Another Day To Remember

Tuesday, April 26, will either be the day ERHC Energy learns of its awards in the Joint Development Zone of the Nigeria-Sao Tome and Principe Joint Development Authority Gulf of Guinea 2004 licensing round (whew!), or the day before it learns of those awards, or two days before them. In any case, today shapes up as another day to remember, with investors on edge amid the promise of big gains.

Yesterday's action was incredible. There were huge blocks of stock poised to sell for profit-taking at the open, yet the first trades gapped up to $0.84 and when the sell orders hit, they were overwhelmed by buying that drove the price to $0.90 in the first five minutes of trading, albeit for only one small trade. Nonetheless, of the first 1.6 million shares traded, almost half were sells.

As the day wore on, however, the pattern changed. The number of trades was almost double last Friday's, while the volume was not substantially higher. By the end of the day Monday, there were some 1,020 trades (including two Form T trade Buys totaling 7.500 shares after hours), with 2,347,097 Buys and 1,594,770 Sells, and a huge 370,910 unidentified (all very early in the trading day). The last two Form T trades were at $0.87, so the day ended on a downtick.

The last 13 minutes saw 24 Buys versus 17 Sells, with the Buys totaling 86,380 shares and the Sells totaling 105,000 shares. The preponderance of positive trades suggests to us that the buying will continue early this morning, while there undoubtedly be some investors who sell - and will lose over the day and the long term.

Many investors are prepared to see $0.90 in early trading today, and hope the $1 finish line is crossed before the close. That appears to be reasonable only if awards are announced sometime around noon. Volume should reach 5 million today with or without awards in anticipation of them.

The lack of an announcement could cause some selling the afternoon. We expect a more modest gain, perhaps of $0.05, if no awards are announced, as we think investors remain wary of delays and don't enjoy the nail-biting they can bring.

Undoubtedly, the stunning announcement of the appointment of the last US Ambassadoer to Nigeria and a Stanford-educated former head of the NNPC as new directors was the catalyst that overcame the profit-takers early in the morning Monday. While we still feel the euphoria of that great news, awards now come center-stage and take the focus.

There was no coverage in any of the 14 Nigerian publications we follow daily of the awards process; whoever's in charge of group-think over there has a firm hand on things. There were also no updates from JDA spokesman Sam Dimka posted anywhere. The silence is welcome, however, because there is only one piece of news we want to hear.

We're very grateful to the 2,454 visitors who stopped by ERHC On The Move yesterday and for the 98 ad-clicks you registered for income of $28.58. We deeply appreciate your support in keeping this blog alive.

Patience is again the key today; the award will arrive, although I do not expect them until the 28th, which is what the two much-maligned (by me and many others) Punch reporters predicted back in late March. It now looks like they must have had some basis for that date, and I'm going to give them the benefit of the doubt.

We are not going to leave our desk today, just in case the awards do come, and because the action will be terrific; follow our trading updates throughout the day for all the latest.

Disclosure: The author holds 123,040 shares of ERHE purchased at an average of $0.4394, and benefits materially from any increase in share price.