This week, following the anouncement that all bidders have accepted the awards of oil exploration rights in the Nigeria-Sao Tome and Principe Joint Development Zone by the zone's Joint Development Authority, there is a possibility that three major oil players - our partners, Devon Energy and Pioneer Natural Resources in Block 3 and and Block 3, and Noble Energy in Block 4 - will mention our role in the awards of substantial acreage in the JDZ. We may also get a press release from our own company noting the same progress.
Also on the press release front, it's possible (although less probable) that the impact of three releases this past Friday from the JDA, Reuters and Dow Jones may finally begin to be felt this week.
Then, too, there's the price of oil: it stood at $60.47 at 5am this morning, near an all-time high. That's helped drive the price of ERHC rival Equator Exploration (EEL) to 155 pence on the London AIM exchange this morning, and given that we have rights to so much more acreage than they do, it soon ought to start to tell in our share price.
Finally, there is the Chinese factor. Sinopec and other Chinese energy companies have been aggressively seeking acreage in West Africa, and it is not inconceivable that one of them will seek a stake in ERHC Energy, whose stock is cheap and whose prospects are very, very bright.
So, despite the miserable performance of our stock (ERHC On The Move holds 120,000 shares at an average price of $0.4374), we will stick with our prediction, and are ready to eat a giant plate of sushi if we are proved wrong by Friday's close.
True, worse things could happen.
Trading Updates: 10:31pm EDT, 6/27/05: ERHE closed at $0.47 on volume of 905,588 shares.
Trading Updates: 3:42pm EDT, 6/27/05: ERHC Energy did release a statement on the awards, and Ruby1100 promptly labeled it "the lamest press release" ever as the share price fell to $0.48 on low volume of 510,082 shares. It certainly is the essence of restraint:
ERHC Announces Acceptance of Awards
Business Wire - June 27, 2005 14:26
HOUSTON, Jun 27, 2005 (BUSINESS WIRE) -- ERHC Energy Inc. ("ERHC" or the "Company") (OTCBB:ERHE) announced that it had accepted the awards of interests in five block in the Joint Development Zone ("JDZ") as was described in the Press Statements by the Nigeria-Sao Tome and Principe Joint Development Authority ("JDA") on May 31, 2005 and June 24, 2005.
About the Company
ERHC is an oil and gas company focused on exploration in the Gulf of Guinea offshore West Africa. ERHC's headquarters are in Houston. For more information, visit ERHC's Web site at www.erhc.com.
SOURCE: ERHC
ERHC, Houston
John Coleman, 713-626-4700
We noticed that Coleman made no mention of any of our partners, and thus feel it's unlikely our partners will make any mention of us. One would also draw from that morsel of evidence the idea that there may be a food fight going on among the members of the consortia as they try to sort out their Production Sharing Contracts and Joint Operating Agreements.
Trading Updates: 8:17am EDT, 6/27/05: The Friday close was $0.485 on 747,400 shares of volume. The Bid and Ask at Friday's close was $0.48 x $0.49.
Meanwhile, here's a bit of catch-up news from the Nigerian daily ThisDay Online:
JDA: Final Agreement for Sept
From Onyebuchi Ezigbo in Abuja, 06.27.2005
The Nigeria-Sao Tome and Principe Joint Develop-ment Authority (JDA) has said that it hopes to conclude all negotiations regarding the terms of agreement for the exploitation of the five oil blocks recently awarded to some oil companies in the 2004 Licensing round by September 2005.
A statement from the JDA at the weekend requested all awardees of the five oil blocks recently approved by the governments of Nigeria and Sao Tome and Principe under the 2004 Licensing round to commence Joint Operating Agreements (JOA) among the consortium for each oil block.
The authority said it is now in a position to commence the negotiations of the Production Sharing Contracts (PSCs) with the awardees based on the Model PSC document, having received acceptance of offer from the companies in respect of the five oil blocks.
"JDA expects the awardees to also commence the negotiations of the Joint Operating Agreements (JOAs) among the consortium for each block in parallel with the PSC negotiations in order that 2004 Licensing Round can be completed within three months, and the two countries can receive the Signature Bonuses while work programmes can commence in earnest".
President Olusegun Obasanjo and his Sao Tome and Principe counterpart, Fradique de Menezes on May 31 in Abuja jointly approved the award of five oil blocks in the 2004 Joint Development Zone (JDZ) licensing round after several postponements.
The companies awarded the oil blocks include Conoil with 20 per cent equity in block 4 won by Noble/ERHC, which has 60 per cent, Hercules oil (10 per cent), Godsonic Oil and Gas (5 per cent) and Overt Oil (5 per cent). The winners are to pay a signature bonus of $90 million dollars.
Devon/Pioneer/ERHC as the operator with equity of 65 per cent won Block 2. Others who got equity in this block include Equator Exploration/ONGC Videsh (25 per cent); A. & Harmattan (10 per cent); Foby Engineering (5 five per cent); and Momo Oil & Gas (5 per cent).The signature bonus for the block is $71 million.
Block 3 with a signature bonus of $40 million has Anardako oil as the operator for Block 3 with equity of 51 per cent, Devon/ERHC (20 per cent); DNO/EER (10 per cent); Equinox (10 per cent); and Ophir/Broadlink - 4 per cent. They are to pay a signature bonus of $40 million.
The ICC/OEOC Consortium is the lead operator for Block 5 with a signature bonus of $37 million; its equity is 75 per cent. ERHC has 15 per cent while Sahara has 10 per cent. Oil Block 6 was won by Filthim-Huzod Oil & Gas with 85 per cent equity, while ERHC has 15 per cent equity in this block.
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