Yesterday's stellar performance of ERHC Energy (OTC BB symbol: ERHE), I believe, is only prelude to some very significant gains between now and the end of June, when I expect the stock to be selling in the $1.30 range.
Thursday's 17.65 percent recovery, a gain of $0.105 from the last Extended Hours price on Wednesday, signalled the end of the capital accumulation stage for the company and the beginning of the share price appreciation stage for investors.
As painful as it was for some investors who foolishly sold on Wednesday when the sinking price scared them out and then struggled to reaccumulate as it rose once again yesterday - despite plentiful warnings here - it was a necessary step to aid our participation with our big-league partners in future discoveries in the Nigeria-Sao Tome Joint Development Zone, where we were awarded vast tracts of oil-rich waters in the Gulf of Guinea on May 31.
We nonetheless expect a slight retrenchment this morning, perhaps of five cents or so, but renewed buying interest through most of the day and a better close than we enjoyed on Thursday.
Update, 3:08pm EDT, 6/10/05: With 1,640,000 shares changing hands, we stand at $0.585 going into the final hour of trading. The Bid is $0.58 and the Ask is a $0.585.
The significance for ERHE investors of the decision not to grant debt relief to Nigeria and Sao Tome is that both those nations will have to be more focused on earning royalties from projects such as those in the Joint Development Zone. The fact that they won't get full debt relief, however, doesn't foreclose the possibility of some debt relief down the line. The decision also indicates the United States believes that Nigeria and Sao Tome are likely to prosper mightily in the future from their oil resources, and that, too, is good for ERHC Energy.
Update, 1:25am EDT, 6/11/05: We closed at $0.59 Friday, off $0.025, on volume of 1,927,071. I was pleased with our performance today as it made clear that few are willing to sell at at the phenomenally low prices that prevailed last week. We came back from a five-cent deficit and closed near the open after a 17.65 percent gain yesterday. The good news of ERHE ought to be amplified when the letter of acceptance is made and then again when the PSA is signed.
Update, 2:06pm EDT, 6/10/05: At $0.575, we should hold. I missed the 12:16 low of the day just above $0.56 in my last post, so I would not expect to revisit that price. The Bid and Ask are $0.575 x $0.58. By 3pm, we ought to be off for the races to close near the high of the day..
Update, 1:57pm EDT, 6/10/05: We're off $0.035 now, after falling five cents from yesterday's close at 12:16. Volume is 1,489,400 and the Bid is $0.575 and the Ask $0.59.
Update, 12:24pm EDT, 6/10/05: The anticipated retrenchment is now underway, and the price is $0.581, the Bid, with the Ask at $0.585 and volume of 1,313,400 shares. We may have two cents to go before we start back up into the green towards the close.
Update, 10:29am EDT, 6/10/05: A gap has opened, with the price $0.63, the Bid $0.62, and the Ask $0.63 as volume reaches 502,317 shares.
Update, 9:52am EDT, 6/10/05: The price is $0.63 after a brief run to $0.645, and volume is a solid 440,271. The Bid and Ask are $0.63 x $0.635.
Word comes from the New York Times that neither Nigeria nor Sao Tome scored on debt relief. The countries that did are: Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia. Almost all are in Africa.
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I posted a comment of possible hat-trick yesterday. Would it make the potential buyer hurry up? What would be the buyout price? They better buy sooner than later because the value of ERHE assets would keep going up.
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