Meanwhile, there's plenty on another front to interest us. The Joint Development Authority has struck back at an editorial in the Washington Post that was dated June 1 but obviously written before the May 31 awards, since it suggests that President Olusegun Obasanjo may yet listen to the politically-motivated pleas of Sao Tome's leftist MLSTP party for a new auction, even though the decision was already made on May 31.
Update, 4:01pm EDT, 6/3/05: The price closes at $0.61, down almost 22 cents from the week's high after the momentous awards and a wave of ruthless selling. A poster named Electick said on PalTalk that he was told by Phil Nugent that Nugent sold "a few million" shares, as we suggested he might do on Tuesday.
As of 3:36pm EDT, there were 536 trades today, with 1,532,292 Buys and 1,720,187 Sells, with 122,200 unidentified. About 200,000 shares were purchased in the period between 3:31 and 3:46 against about 100,000 sales.
Update, 3:41pm EDT, 6/3/05: The price is $0.60 and volume has climbed to 3,178,500, less than half of yesterday's. The Bid is $0.598 and the Ask $0.60.
Update, 3:20pm EDT, 6/3/05: The price is $0.588, with volume now at 2,975,000. The Bid is $0.58 and the Ask is $0.59.
Update, 3:18pm EDT, 6/3/05: I have responded to the Washington Post with this letter to the editor:
Dear Sirs:
In your "Corruption in Nigeria" editorial of June 1, you made several errors, largely because it was written before awards were made on May 31 but came out afterwards, recommending a new auction.
Your thinly-veiled reference to a "politically-connected Nigerian" competing with a well known US company was clearly a reference to ERHC Energy of Houston, in which I am an investor and which I also blog about ("ERHC On The Move," erhc.blogspot.com), and to Anadarko Petroleum of Oklahoma City.
You suggest, probably because you wrote before the awards, that ERHC and Noble Energy would pay less than Anadarko's bid for Block 4. In fact, bidders were required to pay the highest legitimate bid, and when the bids were reviewed a second time a few days before they were awarded, Noble and ERHC Energy agreed to pay the same amount that Anadarko bid for that highly-coveted block.
But the real difference in the bids was that Anadarko only wanted to commit to drilling one well in three years, while Noble Energy, our partner, committed to drilling three wells in one year, making the oil revenue to Nigeria and Sao Tome & Principe flow much faster. So the reality was that we paid as much as Anadarko would have, and we gave the Joint Development Authority a better deal.
You have really done a disservice to us and to President Obasanjo, who has recently risked an effort by some 188 members of the Nigerian lower house to impeach him due to his strong and effective anti-corruption campaign. He is just as determined to root out corruption in the oil industry as anywhere else, and several important efforts aimed at both local and multinational firms have been prominently reported in the Nigerian press (which you cite without mentioning its own legendary corruption). You could have mentioned, for instance, that one winning bidder for Block 1 was ExxonMobil, which is under investigation by a U.S. Senate subcommittee for bribing leaders of Equatorial Guinea. By contrast, the Clinton-era U.S. Ambassador to Nigeria, Howard Franklin Jeter, has recently joined our board.
In fact, ERHC Energy has been scrupulous in all its dealings with investors and with governments in the region, and it now deserves an apology and a clarifying article about the awards.
Best,
Joe
Joe Shea
ERHC On The Move
erhc.blogspot.com
The JDA's press statement of today is followed by the Washington Post June 1 editorial, below:
PRESS STATEMENT ISSUES ON NIGERIA-SAO TOME AND PRINCIPE JDZ BLOCK
AWARDS ANNOUNCED ON TUESDAY, 31st MAY 2005.
Reference is being made to the Editorial of the Washington Post of 1st June 2005 captioned ‘’CORRUPTION IN NIGERIA,’’ with particular reference to the recently concluded 2004 Nigeria/Sao Tome and Principe Joint Development Zone (JDZ) Licensing Round. Below are comments on the salient issues regarding the recent Block awards in the JDZ.
The Washington Post editorial of June 1, 2005 relied on unnamed Nigerian press reports which it appears were not substantiated by the Washington Post. Also, the article is devoid of any factual information to support its unfounded allegations of corruption in the conduct of the bid round process.
At no time did the Washington Post contact the JDA for factual information concerning the bid evaluation process.PREFERENTIAL RIGHTS
In 2003, the JDA conducted its first bid round which concluded with the award of equity in Block 1 to Chevron-Texaco and Dangote – Energy Equity Resources. ExxonMobil exercised its pre-existing preferential rights which resulted in award of 40% equity to ExxonMobil in the same Block. ERHC Energy also exercised its pre-existing preferential rights, but was not awarded any equity in that bid round. Both ExxonMobil and ERHC Energy are US publicly quoted companies.
The JDA announced the second bid round in November 2004, in which it offered equity in Blocks 2, 3, 4, 5 and 6. This was without prejudice to the pre-existing preferential rights of both ExxonMobil and ERHC Energy, a fact that was disclosed in the Guidelines to bidders for the second licensing round. Additionally, ExxonMobil did not bid while ERHC partnered with other world reputable independent oil companies
such as Devon and Pioneer to bid for block 2 and Noble for block 4.
The bids for the second licensing round were submitted and opened on December 15th, 2004. At the bid opening ceremony, the bidders and their respective signature bonus bids were announced. However, other details pertaining to the commercial and technical aspects, including the work program, were not announced at the bid opening ceremony, but were given due consideration during the exhaustive bid evaluation process.
In line with the earlier mentioned pre-exiting rights, ExxonMobil was given 30 days within which to exercise its preferential rights to take up 25% equity in any two Blocks of its choice.ON OPERATORSHIP OF THE BLOCKS
Out of the five Blocks on offer in the second bid round, US companies submitted bids for equity in only three Blocks, namely Blocks 2, 3 and 4.
The results of awards in these Blocks are as follows:
Block 2: 35% equity and operatorship has been awarded to a consortium of US companies comprising Devon Energy, Pioneer Resources, and ERHC Energy. In addition, ERHC Energy has been awarded its pre-existing preferential right of 30%.
Block 3: 51% equity and operatorship has been awarded to Anadarko, a US publicly quoted company. In addition, the US consortium of Devon, Pioneer, and ERHC has been awarded 25% equity, which includes ERHC’s 20% pre-existing preferential rights.
Block 4: 35% equity and operatorship has been awarded to a US consortium of Noble Energy and ERHC Energy. In addition, ERHC has been awarded 25% equity, being its pre-existing preferential right.
In arriving at these awards, utmost effort was made to spread the award of operatorship to financially and technically capable companies to ensure fast track exploration and development of the Blocks. In this bid round, in no case has an award been made to a Nigerian company over a US contender that bid substantially more.
Other partners (including Nigerian companies) in the Blocks were awarded based on the subsisting policy of transfer of technology in the oil industry. In fact, most companies that submitted bids during the 2004 Round got some stakes, after meeting the minimum requirements, as stipulated in the guidelines. This is a means of encouraging and rewarding their confidence and faith in the JDZ.
At no point did any of the state parties interfere in the process. The process went through transparent and competitive bidding. Bids were evaluated according to set guidelines and criteria. Following from these, the Joint Development Authority (JDA) submitted its recommendations to the Joint Ministerial Council (JMC), which exhaustively deliberated on the report and arrived at a position acceptable to the two countries. In that light JMC observed with satisfaction that the process of the 2004 Licensing Round was conducted in conformity with the Abuja Declaration on Transparency and Good Governance signed by the two Heads of State in June 2004.ON PAYMENT OF SIGNATURE BONUS INTO HALLMARK BANK
This bank was duly vetted in 2003 and later approved by the JMC in line with the JDZ Treaty. This was long before the first Licensing Round results were announced.ON PUBLICATIONS REGARDING THE PRODUCTION SHARING
We are in full compliance with the requirements of the JDZ Treaty as well as the Abuja Declaration on Transparency and Good Governance and have consequently published the payments of Block 1 signature bonus on the JDA website: www.nigeriasaotomejda.com.
Nigeria-Sao Tome and Principe
Joint Development Authority
Abuja
2nd June 2005
Here is the original Washington Post editorial:
Corruption in Nigeria
Wednesday, June 1, 2005; Page A18
ELECTED TO a second term in 2003, Nigeria's president, Olusegun Obasanjo, has promised to clean up corruption. He has shown some signs of seriousness: Investigations have triggered the sacking of two government ministers, the arrest of a former police chief and the resignation of the Senate president. But the key test of Mr. Obasanjo's commitment is oil. Nigeria pumps 3 percent of the world's crude, and oil is the source of the cronyism that has suffocated Nigerian development since independence.
In the oil sphere Mr. Obasanjo has made the right noises. Last year Nigeria was one of four African countries to sign up to the Extractive Industries Transparency Initiative, an international effort to promote the publication of payments oil and mining firms make to governments. The government has appointed a Western audit firm to certify that its oil accounts are accurate; the hope is that published revenue that can be monitored by advocacy groups and the media will not be diverted into ministers' pockets. Nigerians even suggest that their new openness will serve as a model for Africa's burgeoning oil sector. "I rejoice greatly that Nigeria is and will continue to be at the forefront of the continent's new transparent dawn," Mr. Obasanjo declared in February 2004. The quote is displayed prominently on the transparency initiative's Web site.
Recently, however, the dawn has been looking a bit bleak. Some of Nigeria's oil fields are shared with the tiny nation of Sao Tome and Principe, and the allocation of exploration rights there smells bad. According to a Nigerian press report, a firm run by a politically connected Nigerian seems favored to win an auction over a U.S. contender that bid substantially more; several other bidders appear to stand out for their links to the government rather than for their knowledge of geology or engineering. The first payment generated by this auction process has been made into a Nigerian bank controlled (again, according to a Nigerian press report) by the family of the recently sacked Senate president, a move that violated the anti-corruption best practice of depositing it in an international bank. Despite promises of transparency, an exploration contract with Chevron and Exxon Mobil so far has not been published. The plan seems to be to release part of it, eventually.
Sao Tome's government has protested the conduct of the bidding process and demanded a fresh auction. But it's not clear whether Mr. Obasanjo will listen. The president inserted himself directly into the argument this month by visiting Sao Tome; according to one account, his message to his counterpart was to allow the flawed auction to stand. Mr. Obasanjo is no doubt under considerable pressure from corrupt elites at home. But if he wants to change Nigeria's dismal development record, he should live up to his fine rhetoric.
Update, 11:22am EDT, 6/3/05: A teleconference by Noble Energy yesterday discussed the ERHC/Noble consortium in the JDZ for four minutes yesterday. You can hear it at a great site for Due Diligence research, http://www.erhc.greatsprings.net/abouterhc, run by Dadd17. The speaker makes a few errors about Sao Tome's population of 150,000 (he was off by 200,000 people), and says drilling there will not begin "until next year." Many had expected it to start sooner. He said Noble had "acquired" 15 percent of ERHC's option in a farm-in agreement, under which they will do the expensive deep-sea drilling.
Update, 10:52am EDT, 6/3/05: Volume has leapt to 1,630,800 and the Bid and Ask are $0.585 x $0.59. The current price is $0.585.
Update, 10:47am EDT, 6/3/05: The price is $0.571, with the Bid $0.572 and the Ask $0.579. Volume has reached 1,381,400 shares. A surge of buying hit at 10:30pm, per ADVFN, which is on a 15-minute delay. Buys lead Sells by 160,000 at last count.
Update, 10:27am EDT, 6/3/05: The price may be testing yesterday's lows, and is now at $0.588. The Bid is $0.586 and the Ask is $0.59. Volume is 798,342 and slowing.
Update, 10:13am EDT, 6/3/05: The price is $0.591, off $0.039 from yesterday's $0.629 close, with the Bid at $0.590 and the Ask at $0.60. The volume is a brisk 780,842 shares.
46 comments:
nothing will move it for the next year thats why it goes down.
I dont like what i see, if Offor must pony up with some cash erhe shareholders will have to pay back in shares , so why would he want the price to go up ? . soon he will own 99% of the company.
imo
Does redinvest still hold his shares? Only the fools listened to him. Who knows how much he made flipping this stock for the past three years.
Someone just told me that it could be possible that reds group might be selling to get their next big winner. I never thought of this before. What is your take Joe?
My personal belief is that Offor is selling shares to raise cash to pay his $27 million share of the bonus fee. He doesn't have to report selling until 10 days afterwards, I understand. There was never any agreement I saw - although there may have been a verbal comment by Ali Memon at the shareholders' meeting - that the JV partners would put up this cash for us. Ithink we need to establish that.
margin sweep gentlemen
speak nice about the market makers and maybe they will give you a perty penny.
lol
-PLAYA
To say "nothing will move it" is not quite accurate, as it implies sideways action over the course of the next year, and that's doubtful. There is a decent chance it may continue to slowly drop, which will be bad for the buy & hold crowd if they become impatient and decide to sell before "losing" all their investment (around, say, 50% losses). But it's just as likely that the share price will bounce around. And that will be good for traders. In fact, I personally believe that's what the MMs are attempting: bouncing the ball for fun & profits!
Use T&A and you might make some fiat for yourself.
This a.m. I'm watching the volume and making sure the price drop is real. Dropping prices on thin volume, while not meaningless, doesn't create a trend. I may exit 25% of holdings today but I picked those up yesterday at .58, so no big deal. But ST support does appear to be at .57 today (notice the buyers), but if that goes than support might not be found until the mid-40's.
Not what I want, but what might be.
IMHO
Joe where did you get the $27 mil bonus fee? I come up with $5 mil, not $27 mil.
"Energy Intelligence Hails JDA Awards; ERHE "Biggest Winner""
Yet, again, the stock is down. Literally every time there's good news of any sort the stock price goes down.
This has just been one big joke.
Good buying coming on at .58 again today.
Might create a bottom on the trading range, at least ST.
This is not intended for those bashers here who are simply trying to discourage other shareholders for your own personal gain.
But for those who think you're actually "investing" in something, if you do want an investment go out and buy antiques, or Hot Wheels, or clip bonds, or something that doesn't require you to rely on someone else determining how much you should get for scraps of paper. Because trading stocks is not an investment, but a speculation that someone will come along that's a greater fool than you. That's why trading based on emotion is always a mistake. You blind yourself to the nature of the beast.
Either buy the shares and put them away for a couple of years, and quit bitching over the ST action, or actively trade them (you know... buy low, sell higher).
After all, this is not a "great company"; it's a gamble with great odds. Best to wake up to the game at hand. Those who don't will most likely lose a great deal of money.
woo hoo...
The chart's looking great today!
It might not seem that way to some, but it really would be very good to close at even with the open.
But over the next couple of week it needs to get back above .75, which I'd give it a 40:60 chance of doing.
Is it just me or does it look like there is pretty strong support at the 0.55/0.56 level? Both price and volume look supportive at these levels, which is also just above the 200-day moving average. Anyone else see this?
good support, because large volume, at .58, like yesterday. That's encouraging.
this is the most ridiculous thing i have seen. I am sorry, but people saying this isnt being manipulated is crazy. everyone time it tries to run, it gets knocked down. and for the theory that longs sold cause the pop wasnt big really makes no sense if you think about it logically. On tuesday, when news leaked, the stock began a run and looked to blow past .80 when suddenly it started going down. You cant possibly tell me that people who were holding for a big pop sold in the middle of a run. It makes no sense - the theory is that individual investors dumped because the pop wasnt great... but the fact is, we were in a pop that clearly got manipulated from mm's. the subsequent days following could make that theory true - wednesday through today, people in it for the ST got out causing the price to drop. but on tuesday, someone clearly was manipulating this (mm's)
Of course the MMs are manipulating the price action for their own ends. They always do when it's so easy with only a few million shares traded on a penny stock.
Your point? "Somebody" should do something? Who? I know... let's grab some pitchforks and storm the Bastille!
Or, why don't you do that and I'll see where they're heading with this and try to get there first. And, by the way, the SEC will be busy looking the other way, as usual.
We're now getting some decent action around .60 with very small volume. That's good.
why did the wash post run the story after awards?
They're a litle clueless at times. They had a guy in Nigeria two weeks ago writing on corruption, so they had some old data and tried to put a new shine on it.
12:23
Because XOM was mad that awards did occur and probably was the one behind it. They are the biggest in the world yet have no operatorship in the JDZ, and little minnow ERHE has 2 Operatorships.
Thanks for all you've done, Joe.
But the Wash Post is not so much "clueless" as it is driven by a non-news-oriented agenda related to the political control of Nigeria. Someday they'll be saying, "The resources under Nigeria's politicians' control are far too valuable to the poor people of that forsaken country to be left in the hands of such corrupt individuals. Can't somebody do something for those poor citizens?"
Might be sooner than we think. Could it be that XOM's been told when?
Don't think I've ever seen so many block of 2500 passing back and forth between brokersters before. And isn't it odd that my own sell of 5000 shs at .61 this morning (now canceled) never did show up.
Joe, I have not done the math on the sig bonuses due, so I will accept your figures as correct, assuming you mean the total due for B6, which is not free, plus the amounts due on the additional percentages we won in B2/3/4.
Please explain your methodology for arriving at the $27mm which is what I think you said we owe.
Personally, I think we will only pay the amount we owe in B6 and our partners would come up with the additional amounts in the other blocks. Obviously, ERHC gets credited with the saving to the consortium from our free rights, so why would we foot the bill for the additional percentages as well?
Also, in light of Noble's statement that they have farmed-in for 15% of our 25% free rights in B4, I am assumming that farm-in agreement means they will be carrying us in the block, meaning not only will we not be responsible for the sigs but we would also get our drilling expenses paid, in exchange for some percentage of the revenue from the 15% they got on farm-in.
SH70
Anyone else get the feeling that something is about to happen? We have been trading sideways in a very narrow band for a couple of hours now (granted one of them was the lunch hour), on almost no volume. It has an eerie "calm before the storm" feel to it. This after two tests of the 0.55/0.56 level showed significant support. Any thoughs on what is about to come?
who is turkaman on RB?
Notice how so many of the bids / asks come in pairs from the same Brokerage. The appear at the exact same time with .05 (usually) between the bid and ask. And every bid/ask that appears on Level II is 2500 shares. Though many other size bids/asks are being filled, we can't see them. Some shady trading going on. Selling into strength too often too.
This stock will turn your balls into rasins,
good luck
The trading shows alternate Buys and Sells, like someone is working both sides, buying 25-30K then selling 20-25K, then buying and selling, over and over. I guess it's people day-trading to make a penny a share.
New blog name is
ERHC NOT ON THE MOVE.
Joe - A fine letter to the Washington Post.
Some of those who post here need to develop backbones, take responsibility for their own actions, and quit blame everyone but themselves for their loses. Such people truly represent the worst of what has happened to this great country--lack of personal responsibility for the outcome of one's own acts.
Hang your heads in shame. You're cowards who should go back to hanging from your momma's skirts and leave investing to real adults.
SH 70, thanks for your note. I need to retract my number. I don't know who will pay the percentage share of Noble's farm-in, whether or not we participate in the percentages won by the operatorship apart from our rights, and whether we have to pay anything at all since our rights are sig bonus-free.
Once again we see good volume at the .58 - .59 level, pushing it back up to .60. Thought for sure we were about to see a breakdown in the price between 2 and 3 pm, but once it got to the trigger point of .585 quite a few offers were bought up, presuming sitting between .59 and .60.
Might be someone trying to accumulate for an account, which would explain the persistent and anomalous blocks of 2500 (bigger than that and other sellers might get encouraged to up the ante) and, thus, the static range all day.
just IMHO
Ignore the Washington Post editorial. Don't stir the pot. It will be gone when the Michael Jackson jury comes in.
You clowns on RB and IHUB can't figure out that the Houston Texans are selling cheap shares to the old Houston Oilers.
They are running the share price down so Bum Phillips can buy a new hat!
I new something was strange when awards were announced, and by days end the sp struggled to barely make it out of the .70s. Low and behold we find out that a regular contributor to RB had a melt down due to a margin call. I'm sure alot of traders/investors fell into the same situation. More than we know, as this stock has been hyped the high heavens for over a year now. Even I felt compelled on many occasions to use money I had no business using to buy, buy, and buy. God forbid I really did get a margin account. And to top it all off there may have been some insiders selling as well to bring sp where it stands today. I am one of the weak who sold most of my shares in the mid-.60s as I couldn't bare to watch the decline not knowing when/if the sp would come back, and also knowing I will need some of the money in the near future. I now realize what a game this is and know better. This is for flipping, as was already stated, or simply buy and forget it. I know first-hand what is awaiting off the shores of STP and Nigeria. There is indeed alot of petrol in those waters, but it will take some actions by the JVs to indicate that they are about to start the process of drilling or actual drilling to first oil before we see any significant price appreciation in ERHC. I will buy more ERHC when it declines some more, and put it away for 12-24 months. Hopefully, that will be enough time to see some real upward movements.
"Joe, you and your 'Blog' is the sole reason why the stock price is depressed."
Wow... Joe! Such power!! You better turn that power down some. The shine appears to be making some posters feel impotent. This one will probably go home and beat the cat into submission for relief!
Yeah Joe sold 3 million shares and purposely killed the rally so he could continue the blog and make up conspiracies. How come you didn't tell us you had millions of shares Joe? LOL
Nugent is selling. Why is the only question. Houston Oilers. Houston Oilers. Houston Oilers number One!
from a post on IH
A comment on the "ERHC on the Move" blog (4:01PM) indicated that Phil Nugent reportably sold a couple of million shares of stock. This is alleged to have been said on Paltalk by a poster named Electick. I have contacted Phil Nugent and was told in no uncertain terms that he did not sell shares of ERHC and that he knows of nobody that goes by "Electick". He believes this was a daytraders attempt of bashing and he would be glad to meet up with Electick.
Phil Nugent was very disappointed (almost angered) that somebody would even make up a story like this. He assured me that the weeks awarding of the blocks was a milestone for ERHC and only the beginning of what he believes it will become.
Electick = Deep Throat.
Nugent = Nixon?
Obvious Nugent is selling. Someone who knows him should clarify why before he screws up the stockprice more, unless that is what he wants to do. Lower prices helps Texans get in cheaper than the rest of the country.
Joe -
Thanks for taking the time to share the information you have. Too bad a few people have to try and screw up a good thing.
Re: the sp - I would have thought people would have waited till it ran a little higher before taking some profit. If it was a group of investors, I guess it was a good plan to sell into what little run there was and lower the sp. They probably made a profit and created a new entry point for themselves for the next run-up. Or it could be any of the many other rumor reasons suggested. I suspect there will be good news soon and the sp will move up. The bottom line is erhe has more value now than it did when it hit .96.
All in my opinion.
Regards,
This is my second time posting on Joe's blog (thanks for having the blog Joe). But I said on Tuesday that I think this would be the highest share price we'd see this week, and it was (my name is Paul and you can check if you want).
If you want to understand where this stock is going you need to use TA, like an earlier poster posted today. The past 3 days have seen an increase in volume...but that doens't matter. Volume ACCUMULATION is what counts and I see a negative accumulation(lots of selling)
These ppl and the big men on Wall Street have moved on to the next big gain.
If you didn't sell on Tuesday you wont see a profit for a while. Tuesday was the BIG day....news day- awards day. But now its old news for Wall
Street even though its only 3 days old. It won't matter if additional news papers publish it.
I'm not a basher I'm just a lil experienced in the market. I also have a lil thing. You know?
If you still have shares I think you should hold onto them and you'll thank yourself in a few years.
Paul
Stop all the wonderings, guessings, speculations, rumors.
Thanks for the advice, Paul. Like many investors here, I don't mind waiting a few more years. I just thought it would have popped pretty nicely before this. The Houston Chronicle story this weekend, however, may help it do that.
Mark, I was responding to you when the administrator bounced me, apparently for my discussion of the truth. If you don't stir the pot the stew gets burned on the bottom, and that's where we are.
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