Trading Updates: As Oil Soars, Why Does ERHE Stumble?

Yesterday, June 20, was a bad day for most energy stocks we checked; at mid-afternoon, ERHC Energy's partners Devon, Noble, Pioneer, as well as ExxonMobil and ChevronTexaco were all down, as were the more speculative FEEC, HPYD and TDY, while the Canadian energy firm IVAN managed to eke out a $0.01 gain.

With oil straining at OPEC's leash to hit $60 a barrel, why are oil company shares suffering?

It's good to know that the entire industry shared our experience of falling a bit even as the value of our potential reserves - amounting, conservatively, to between 2 billion and 5 billion barrels of Nigerian light crude - rose to stratospheric levels. Good to know - but still incredibly difficult to understand.

The good news on that front is that we expect ERHE to enjoy a decent gain today as the market revisits the issues involved.

Oil is at record highs; ERHC Energy has rights validated by Nigeria and Sao Tome to some of the richest new fields in the world; and to exploit our rights, we have some of the most able partners in the petroleum industry in Devon Energy, Pioneer Natural Resources (Blocks 2 and 3) and Noble Energy (Block 4). So what's to worry?

That kind of factual basis for investment is unavoidably attractive, and soon will out.

Update, 2:10pm, 6/21/06: Markvol1, one of the more reliable posters on this and other boards, lets us know that the JDA has set June 23 as a deadline for the acceptance of its awards letters by the host of companies involved in bid for the Joint Development Zone acreage offered by Nigeria and Sao Tome. There remains a bit of interest in whether Anadarko Petroleum will actually accept its proffered portion of Block 3, which it originally wanted to operate with ExxonMobil but was forced to negotiate for alone due to the tradiness of Exxon's "bid," which never materialized. Most would say they'd be crazy not to accept, but that of they don't it could go to the ERHC Energy/Devon Energy/Pioneer Natural Resources consortium that won operatorship on Block 2. With the caveat that the JDA never does anything when it says it will, here is Mark's note:

****UPDATE****************************
Just spoke with Sam Dimka at the JDA. He said that the 14 day deadline that companies have to accept awards started on June 9th as this was the date that the last bit of accpetance letters were sent out to respective winners. This puts the deadline for award winners to accept their awards by June 23 (Thursday). This is in line with what JDA officals have been saying about mid week NEWS this week. Sam said that the JDA will be issuing a Press Release upon formal acceptance of all winners. He said process has been going extremely well. He told me to call back Thursday am for an update. (Mark says) Expect PR's from accepted winners and JDA soon.