The sour grapes coming from Anadarko over its loss of Block 4 to the ERC/Noble Energy consortium focused on the fact that the consortium agreed to pay the same $90 million signature bonus Anadarko had promised instead of its own $57 million bid if it gained operatorship, which the "anonymous source" said was tantamount to reopening the bidding process. The process was in fact re-opened for review by the Nigeria-DRSTP Joint Ministerial Council after awards were initially rejected by the government of Sao Tome and Principe due to the disparity between the winning and the highest bids, which were often not the same as tehcnical competence also played a large role in the decisions.
Here is the story by Deboarh Kelly posted on Raging Bull this morning:
*** US Firms Fare Well in Nigeria, Sao Tome Tender
Energy Intelligence Group, Inc.
Friday, June 3, 2005
Nigeria and Sao Tome and Principe have officially announced the winners of leases on five offshore oil blocks in their second joint licensing round following emergency talks in Abuja earlier this week.
The Nigeria-Sao Tome Joint Ministerial Council, the political overseer of the Joint Development Zone (JDZ), finally overcame a series of deadlocks between the two sides to approve the earlier proposals made in April by the Joint Development Authority (JDA).
The biggest winner was Nigerian-owned, US-listed ERHC, which picked up stakes in four blocks including the hottest acreage, Blocks 2 and 4, after exercising preferential rights acquired through a deal negotiated with Sao Tome in 2003.
US independents Devon Energy and Pioneer Natural Resources were awarded 65% operatorship of Block 2 alongside ERHC. Other shareholders are Equator Exploration and India's Oil and Natural Gas Corp. (ONGC) with a 15% joint stake; Nigerian players A and Hartman, with 10%; and Foby Engineering and Momo Oil & Gas, with 5% each.
Not all of the companies -- which together bid around $270 million in signature bonuses for all five blocks -- were entirely happy with the outcome. US independent Anadarko, which was the lead bidder for the hotly contested Block 4 with $90 million, lost out to US Noble Energy on technical grounds and was relegated to Block 3.
Anadarko was offered 51% operatorship of Block 3, alongside ERHC-Devon-Pioneer (20%). Equinox, Arcadia, PetroChina, Sahara, Ophir, Broad link and DNO split the remaining interest in Block 3.
On Block 4, Noble and ERHC took a 60% joint operating stake, while Conoil got 20%. Centurion, Nigeria's Hercules, Godsonic, Addax and Overt hold the remaining stakes.
"The decision to award operatorship of Block 2 to the Devon group and the operatorship of Block 4 to the Noble-led group is controversial because they were effectively allowed to bid again after the deadline, by being asked to match the original leading bidders," according to UK consultants Clearwater.
Noble originally only bid $57 million for Block 4 but was asked to match Anadarko's $90 million bid while the Devon-led group was asked to match $71 million offered by ONGC and Equator for Block 2.
Deborah Kelly, London
http://www.energyintel.com/
DocumentDetail.asp?document_id=149632
14 comments:
Joe,
Thanks!!!!!!!! We will see higher sp soon!!!!! They can only play these games so long. As soon as the world finds out about us, it will be $$$$$$$$$. Rich
No matter the PR released, ERHE is dead money until we hear of actual drilling form the consortium involved. So hold , sell and just prey shit doesn`t hit the fan, you know it will though.....
Dead money doesn't get partnered with these companies. Get real! They are double digit companies already. Its not like they would fold up without this deal. But hey sell your shares..... I'm buying!!!!!!!
Exxon is just praying there is oil in #1. Thats why their in here? Don't think so. Only shit hitting the fan will be black gold.
ERHC has terrible PR. There had been such a long and profound efffort to harm this company from outsiders that it is going to take a while for people to understand that this company is the real deal. Perception is everything and unfortunately it is going to take some time to change old perceptions.
Hopefully ERHC at some point will realize they need to start selling and promoting their company a little bit. They are probably hand tied until PSC's are signed but after that they need to undertake a PR campaign. The higher the stock price the easier it will be for them to raise capital so they should have some concern.
ERHC is a great company. We were all right when we told people that this wasnt a scam and that ERHC would win these awards.
Unfortunately we all probably bought in about a 6 months too early. That was our only mistake. We will be rewarded in the end though.
Its obvious now that the awards had already been priced into the stock. So there will be no further push due to awards. Now we need tro turn our attention to other things that will drive the share price.
1) When will the PSC's be complete? I would imaging Block 2 would be the first one to be complete then they will go down the line. That might be why Noble said Block 4 PSC wont be done until end of the year.
2) When do Chevron/Exxon begin drilling on Block 1? I know we have rooted against Exxon for awhile but nothing would be better than for them to hit a monster well in Block 1 as we wait to get our blocks in order. Imagain what that would do for the share price.
3) When will ERHC be allowed to make their selections in the Sao Tome EEZ?
These right now are the three most critical things that will drive share price in the next 6 -9 months.
i do believe we will trade a great deal higher over the next few weeks. when people settle down, they will see this is the place to be.
Kudos to the petroleum pros for dropping the price to allow their customers to abuse the stock price to acquire.
All the BS on Raging Bull about people being disappointed and selling is a hoot. Millions of shares would not be sold at a loss by disappointed people. Millions of shares were sold into a few runs before awards. Millions of shares were sold into the morning run on Tuesday.
Most investors want to minimize their profits! LMAO
joe- add another to the SEC list...
Joe, I tried to find Clearwater on the web but failed. Do you have a link and possibly additional information about the source of the above?
Thanks,
SH70
pps will be 30 - 40 cent then 15 cent after dilution.
good luck
Thanks 9:51 (Colin) your 30 cent projection 2 weeks ago was wrong enough, the projection of no awards was wrong enough, now you make your bold 15 cent projection,, which ensures me it will never happen.
The SP is disappointing, but all the other news is good. If in 5 years ERHC is sitting there with 5 billion dollars in the bank and a market valuation of 600 million, then I will deem total irrationality to have hit. Until then, I hold and wait for the oil to flow.
Thanks, Joe, for keeping up the good news summarization.
Maurice
Just sold this morning and bought ljpc at 66 cent . now at 87 cent.
im happy as a clam.
now ljpc 84 cent, you clam still so happy? when ljpc file for bankruptcy, you get no money for shares.
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