How much longer will it go on? Well, since the market appears to have entirely discounted the May 31 award of goodly chunks of five oil-rich blocks in the Gulf of Guinea, and more recently ignored the formal acceptance of those awards, there's appears to be little reason the slicing can't continue for a long, long time.
We have to presume that the analysts and researchers know almost as much as we do about ERHC's prospects, and that they aren't trying to stay the executioner's hand by accumulating.
Nor are they issuing reports and recommendations, despite the front-page headlines that heralded our prospects before the awards were announced. Almost all of those earlier stories discounted the possibility that we would win operatorships, and now that we have, they are not also trumpeting that victory. In short, we are getting no support - moral, technical or otherwise - except from the handful of investors like myself who have seen these dramatic swings before and elect not to sell no matter what. Our partners are not issuing press releases as we had hoped on the acceptance of the awards, so we will not get a boost from their coattails.
Then there is the problem of the naivete of some investors and the cynicism of others on Raging Bull, Elephant Fields and (albeit less so) InvestorsHub who gull the former into believing they are anything more than day traders who play ERHE every day for all the nickels and dimes they can carry away.
It is not inconceivable that they will play this game back down to the $0.28 range or (inconceivably) even lower, I'm sorry to say. How long will it take? Looking back over the performance of ERHE since I invested in May 2003, it is typically a matter of a couple of months, so we may have yet another month to go before any upturn begins in earnest.
I am hoping that I can add another 100,000 shares somewhere in the $0.30 to $0.40 range. The opportunities in the sub-$0.30 range are typically very limited and work as quasi loss-leaders for market makers. Once it gets to the bottom, which could be as low as $0.22, ERHE will turn upwards very suddenly and dramatically.
Just the same, we shouldn't expect a very substantial recovery except in terms of percentages from such prices. The best we can hope for in a post-decline upturn is about $0.25, to $0.54 or so. After that, it will be a long, hard two-year slog to real money - $2 to $3 or more.
In the event a buyout of the kind we predicted for last March does occur - and as we noted recently, our favored poster mutwadadi says rumors about one are ciruclating in Nigeria - most investors will not share in the largesse, as the buyers will have accumulated all through this downturn and only need a small number of shares to gain control whenever a buyout might be announced. But the whole idea of a buyout is speculative in the extreme, as mutwadadi cautioned, since the market apparently feels our prospects are close to nil.
Update, 4:55pm EDT, 6/30/05: We closed at $0.435, with volume of 720,587. The day's "cut" was $0.0080.
Update, 3:58pm EDT, 6/30/05: The price is $0.435, yet another little slice, with the Bid and Ask $0.426 x $0.435 and volume of 719,587 shares.
Update, 2:15pm EDT, 6/30/05: We're at $0.425, a cent below my cost average, signaling my own buying opportunity. I hope I can take advantage of it soon. Volume is 596,186, and the Bid and Ask are $0.425 x $0.43.
Update, 2:15pm EDT, 6/30/05: We did bounce off $0.425. the current Bid, and are back at the Ask of $0.43. Volume is 566,329 shares. We may see some improvement as a result of the BBC news on Nigerian debt relief, posted by rancho on I-Hub.
Update, 2:15pm EDT, 6/30/05: Nigeria has won some $18 billion in debt relief from the Paris Vlub of 19 lender countries, reducing its $35 billion foreign debt by half after paying down $8 billion more, the BBC reported. That is great news for investors, as it dramatically reduces the pressure on Nigeria to raise royalty and tax requirements in Joint Development Zone deals. Here is the BBC story:
Nigeria to get $18bn debt relief
The Paris club has said there will be significant Nigerian debt relief
The Paris Club of creditor countries has agreed the outline of a debt relief package for Nigeria. About $18bn (£10bn) of debt will be written off and Nigeria plans to buy back a chunk of outstanding loans.
The country owes the rest of the world $35bn, and the new talks are linked to an agreement between Nigeria and the IMF on debt repayments.
Nigeria is the world's seventh-largest oil exporter and Africa's most populous nation, but also one of its poorest.
The Paris Club have agreed in principle a further debt write-off.
About $31bn of Nigeria's debt is owed to members of the 19-nation-strong Paris Club. It has not received any fresh loans since 1992, but repaid $8bn debt since then.
Part of Nigeria's case in asking for debt relief has been that most of the money it received was lent to corrupt military dictators, a fact the African country says was well known by foreign banks and governments.
The UK's Chancellor of the Exchequer, Gordon Brown, said the debt relief combined with the debt buy-back would "mean there is 100% debt relief for Nigeria possible over the next six months".
The UK is Nigeria's biggest creditor and has been attempting to persuade other G8 creditors of the need for debt write-off.'Economic reform'
The debt breakthrough came after Nigeria expressed its willingness to clinch a new deal with the IMF to pay its arrears to Paris Club creditors.
"The representatives of the Paris Club creditor countries... expressed their readiness, consistent with their national laws and regulations, to enter into negotiations with the Nigerian authorities in the months to come on a comprehensive debt treatment," said the group of creditor nations.
"They took note of the economic reform programme implemented by the Nigerian authorities since 2003 and of their willingness to take advantage of exceptional revenues in order to finance an exit treatment from the Paris Club."
It said the debt relief would be significant, and allow for long-term debt sustainability.
The initial debt relief terms will be based on the so-called "Naples terms" - which are equivalent to a 67% reduction on the face value of debt and are applied to debts of poorest nations.'Major development'
"As an initial negotiating position, it is welcome, but Nigeria will naturally press for a higher discount," said Nigerian senator Udo Udoma.
"It is a major development because about a year ago they (Paris Club) were not willing to listen to any plea for debt relief.
"To move from zero to 67% within a year is a major development, I am excited by that."
Campaign group Actionaid welcomed the deal, saying that "Nigerians have been paying out in debt repayments nearly six times the amount they receive in aid."
"As home to one in five Africans, progress on debt in Nigeria is critical to progress on poverty in Africa," the organisation said.
And international development minister Hilary Benn said: "This deal will help to change the lives of millions of people in Nigeria.
"Today's deal is a major step in bringing a better future for the people of Nigeria, in a country in which seven million children receive no schooling at all and one in five die before their fifth birthday."
Update, 1:45 EDT, 6/30/05: The price is $0.43 as volume tops 549,391. The Bid is $0.425 and the Ask $0.43.
Update, 11:54am EDT, 6/30/05: A couple of years ago we watched in awe at MDDM took off from $0.25 or so and soared nearly a buck on news about its ShockRounds product, a bullet that requires no wires like Tasers do to deliver an incapacitating but non-deadly electric shock to the target. I was delighted to see it climbing 35 percent or $0.48 today on volume of 128,869 shares. That's because I have 4,000 shares of its parent, Austrlian holding company HGRLF.
Update, 11:49 EDT, 6/30/05: Volume has doubled in the past hour to a still-low 404,126 shares, and the price is $0.435, still $0.003 off the open. The Bid is $0.435 and the Ask $0.44. Lots of unenlightening talk on I-Hub about ERHC Energy's offices in Houston, where the staff was recently described as "two retards in a trailer." Actually, we have two retards in a very nice office. Just kidding. But it's taken up lots of time and space on I-Hub, but that appears to be over now.
Update, 11:04am EDT, 6/30/05: Our Money.net streaming Level II quotes service stopped sometime between 10:17 and 11am, as volume more than doubled to a still-abysmal 189,085 and the price fell to $0.435 and now to $0.43, the Bid. The Ask is $0.435.
Update, 10:42am EDT, 6/30/05: Just 4,000 shares have traded in the past 40 mimnutes, and the price is unchanged at $0.44, the Bid. The Ask is $0.448, and volume now is 85,005.
Update, 10:17am EDT, 6/30/05: Breaking News: Raging Bull Is Dead. At least I think it's important: the InvestorsHub Website, which has the downside of being censored by its barely literate moderators, has finally overtaken Raging Bull's ERHE message board as the leading message board on ERHE. Between midnight and 10am EDT today, there were just 15 posts on Raging Bull compared to 26 on InvestorsHub. That compares to about 300 readers in the same time frame for this blog.
Update, 10am EDT, 6/30/05: The price is $0.44, off a tiny slice from the opening $0.443, on tepid volume of 81,005 shares.
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