$105 Oil? Goldman Sachs Prediction Rattles Market, Lifts ERHE

An astounding prediction by the respected Wall Street investment banking house Goldman Sachs rattled the stock markets and lifted ERHC Energy's share price Thursday with a prediction that the price of crude oil could go to $105 in a year.

ERHE gained $0.015 to $0.71 on 801,935 shares. The price slipped slightly after hours.

In a related story, Randolph Holhut of The American Reporter, the original Internet daily, writes on the impact of such prices in his Friday piece, "R.I.P.: The Hydrocarbon Economy," at http://www.american-reporter.com.

Two of ERHE's MoU partners in the Gulf Of Guinea oil concessions being auctioned by the Nigeria-Sao Tome Joint Development Authority made a short list of recommended stocks in the Goldman Sachs release.

They were Devon Energy and Pioneer Natural Resources, which have teamed with ERHE to offer bids on Blocks 2 and 3 of the Joint Development Zone.

Those awards are expected shortly after April 9, the deadline set by the JDA for ExxonMobil to make its long-delayed choices of two blocks to exercise its 25 percent preferential options in this second licensing round, but could come earlier.

With Dow Jones' affirmation of the April 9 deadline yesterday and the strong suggestion of much higher oil prices in the near future, the stage seems set for steady price appreciation by ERHE, and a possible $0.03 to $0.06-cent gain today.

However global events including the grave illness of Pope John Paul II could dampen investor enthusiasm this last day of the week. The Pope suffered a heart attack late Thursday in Rome after a high fever due attributed to a urinary tract infection, but he remains at the Vatican and is being fed with a feeding tube.

Here is the Dow Jones story on the Goldman Sachs report:

DJ Goldman Sachs: Oil Markets In Early 'Super Spike' Period
Dow Jones News Services
03/31/2005

NEW YORK (Dow Jones)--Goldman Sachs believes the oil markets have entered the early stages of a "super spike" period, which analyst Arjun Murti defines as a band of oil prices that could be high enough to reduce energy consumption substantially and create a spare capacity cushion that could reduce energy prices return.

Murti increased his super spike range to $50 to $105 per barrel from $50 to $80 per barrel. He also increased his 2005 forecast for West Texas Intermediate oil to $50 per barrel from $41 and his 2006 estimate to $55 per barrel from $40.

Murti recommends adding to positions in the oil sector "at current prices, on a pullback, or even after rallies," and raised 2005 and 2006 earnings estimates across the board.

His top picks in the sector continue to be Exxon Mobil (XOM), Amerada Hess (AHC), Bill Barrett Corp. (BBG), Devon Energy (DVN), EnCana Corp. (ECA), Murphy Oil (MUR), Newfield Exploration (NFX), Pioneer Natural Resources (PXD), Premcor (PCO), Questar Corp. (STR) and Suncor Energy (SU).

(END) Copyright Dow Jones Newswires