However, the story clearly identified ERHC Energy as the major winner - with its partners Devon Energy and Pioneer Natural Resources in Blocks 2 and 3 and Noble Energy in Block 4 - was the major winner of the licensing round.
Getting that news out to investors may boost the share price today, but since it was released at 3:27pm yesterday, it may have had all the effect it's going to have. We'll just have to see as the market opens.
Update, 4:00pm, 6/22/06: We close at $0.494, off $0.016, with the Bid and Ask $0.48 x $0.494 and good volume of 1,864,900.
Update, 3:48pm, 6/22/06: In another blow to ERHC Energy investors, the daily online petroleum journal UpstreamOnline reported today that Sao Tome and Principe has decided to hold off on its own Exclusive Economic Zone licensing round until 2007, instead of November 2005, as earlier reported, and will offer 10 to 20 blocks. ERHC Energy has great rights in that zone - two full blocks with no bonus fee - but the Sao Tome parliament is poised to revisit its petroleum and oil tax laws, a signal that they will try to shunt us aside.
Meanwhile, near the close the price is $0.494 after someone bought a hair under 100,000 shares, but $0.485 is still the Bid, and the Ask is $0.494. Volume has climbed rather dramatically from a slow start today to 1,860,900 shares.
*Sao Tome slates 2007 for round
By Upstream staff
Sao Tome said it aims to launch the first oil exploration licencing round for its Gulf of Guinea waters in 2007.
The round cannot begin until the country's parliament has revised its petroleum law and oil tax regulations, according to the executive director for national petroleum at Sao Tome's Ministry of National Resources, Luis Prazeres.
Prazeres said the revisions should be completed by May 2006.
He estimated that the round would likely be for between 10 to 20 blocks in Sao Tome's exclusive economic zone (EEZ).
Sao Tome has already completed two licencing rounds in conjunction with Nigeria in shared deep water known as the Joint Development Zone (JDZ).
The upcoming licencing will be the first for waters over which Sao Tome has exclusive authority.
Chevron expects to drill the first exploration well in the JDZ next year.
Sao Tome's EEZ is located in deeper waters of 1850-2300 metres compared to the JDZ's 1800 metres, according to Reuters.
The Gulf of Guinea is expected to be one of the major areas of oil supply growth in coming years.
Update, 2:57pm, 6/22/06: The price is $0.49 after hitting a low of $0.48. Volume is a healthy 1,579,200 shares, and the Bid and Ask are $0.482 x $0.49. My profit is under $6,000.
Update, 1:27pm, 6/22/06: The price is solidly at $0.495 now, the Bid, while the Ask is $0.50 and we have crossed the million-share mark and stand at volume of 1,049,500 shares. I am tempted to sell all of my 120,000 shares to preserve my profit. Meanwhile, I note that EEL has more than doubled since it hit a May low of 77 pence. It now stands at 155 pence.
Update, 1:02pm, 6/22/06: The price momentarily slipped below $0.50 to $0.495, the Bid, while the Ask went to $0.50. Seconds later, however, the price recovered to $0.50 and the Bid and Ask are $0.495 x $0.505. while volume has climbed to 931,186 shares.
Meanwhile, Rancho has revealed pretty good evidence - in the form of two simultaneous posts under their different names of the same message - that pumper TiburonTim and basher Mongo are one and the same person.
Update, 12:55pm, 6/22/06: Google News has just discovered the situation in Sao Tome, without providing any new information, however. Here is the Google story:
22 June 2005
Pouring oil on Sao Tome's troubled waters
Despite São Tomé and Príncipe's bleak economic situation, the tiny African archipelago's remote maritime location could be its fortune. Facing a national debt of more than US$330 million - equating to US$2,000 for each of the 170,000 islanders, or six times their annual output - the economy has previously been overwhelmingly reliant on the export of cocoa at unstable global prices.
Despite this bleak scenario, economic salvation could be very close at hand. Advances in oil technology over the past decade have made deepwater oil production economically viable and have opened up vast areas of maritime territory for exploration. The discovery of oil off São Tomé and Príncipe is by no means guaranteed, but the geology looks promising and even the discovery of small amounts of oil could revolutionise the São Toméan economy, given that the government is entitled to 40 per cent of all state revenues generated in the joint development zone.
Parliament ignored
The resignation of Prime Minister Vaz d'Almeida on 2 June was directly linked to the award of five more production sharing agreements a day earlier. In stepping down, he said that he could no longer work with President Fradique de Menezes, who has taken the lead in oil negotiations and who is alleged to have largely bypassed parliament.
The injection of so much money into the economy even before oil has been discovered should trigger increased economic growth, but may exacerbate political tensions even further. While a repeat of the coup that unseated de Menezes for a week in July 2003 is unlikely, the stakes in the political game are now higher than ever.
Update, 2:52pm, 6/22/06: I'm all out now, with a profit of just over $5,000 and a lot of damage to my pride. I'll likely jump back in as soon as the price is attractive once again. The price is currently $0.482, the Bid, and the Ask is $0.4940, with volume at a healthy 1,579,000 shares. For the time being, though, I have to say long to my dreams.
Update, 12:45pm, 6/22/06: Volume has reached 885,645 shares, but the price is $0.50, the Bid, with the Ask still at $0.505 and no movement in sight. This reminds us a lot of the period in early November last Fall, when well after the fact we learned 63 million shares had been paid as a settlement and the company had gone to the market for 24 million shares while issuing 70 million-odd new ones to itself at $0.17. At that time, the stock would trade all day, and it would often take a million shares of volume to move it one cent. Meanwhile, crude prices are off $0.79 to $58.25, ExxonMobil and Pioneer Natural resources are down and Chevron, Devon Energy and Noble Energy are up.
Update, 11:52am, 6/22/06: The price is $0.505, the Ask, with the Bid at $0.501, asnd volume reaches 753,295. It looks like someone has taken advantage of the low price to buy several hundred thousand shares this morning.
Update, 11:32am, 6/22/06: The price inches back to $0.51, the Bid goes to $0.505, and the Ask stays at $0.51 and volume starts moving again at 676,795 shares.
Update, 11:11am, 6/22/06: Ameritrade killed the E*Trade offer and instead has bid $3 billion for TD Waterhouse, CNBC reported. The price is $0.50, the Bid, and the Ask remains at $0.51, with the volume virtually unchanged in 18 minutes.
Update, 10:53am, 6/22/06: The price has slipped back to $0.50, the Bid, with the Ask still at $0.51 and volume moving up to 604,767 shares.
Update, 10:39am, 6/22/06: In a new note to ERHC On The Move, favored poster Mutwadadi asks, "Who is running the JDA?" The price is $0.505, and Bid and Ask are unchanged. Volume has reached 510,167, holding out the prospect of a million-share day.
Update, 10:29am, 6/22/06: The price is $0.505, a slight improvement and the Bid. while the Ask is at $0.51. Volume is picking up at 480,167, indicating stronger interest at these rock-bottom prices.
Update, 10:17am, 6/22/06: The price and Bid have slipped back to $0.50, and the Ask remains at $0.50. The big question is: Will we bounce from $0.50 again? Volume is slow at 272,034 shares.
Update, 10:10am, 6/22/06: The price is $0.5025, while the Bid is $0.0005 lower at $0.5020 and the Ask is $0.505 and volume stalls at 262,034 shares.
Update, 9:46am, 6/22/06: We're off a cent at $0.50, the Bid, and the Ask $0.505. Volume is 229,734, which is fairly brisk compared to recent activity.
Update, 9:30am, 6/22/06: No sign of help yet, as the share price slips a half cent to $0.505 at the opening on a modest 84,234 shares.
Here is the Reuters story:
Nigeria/Sao Tome aim for new oil deals by end '05
By Simon Webb
Tue Jun 21, 2005 03:27 PM ET
LONDON, June 21 (Reuters) - Nigeria and Sao Tome are aiming to sign five new oil exploration contracts with operators in shared offshore waters by the end of the year, the chairman of the zone's oil administration authority said on Tuesday.
The contracts would allow the winners of the second Nigeria-Sao Tome licensing round to begin drilling exploration wells.
"We hope to have these agreements signed by the end of the year," Carlos Gomes, chairman of the Nigeria and Sao Tome Joint Development Authority, told Reuters on the sidelines of a West African oil and gas conference.
Signing contracts by the end of 2005 would mark a significant reduction in the negotiation time to less than seven months for a contract following the award of an exploration license.
The JDA awarded its first exloration license to a Chevron-led (CVX.N: Quote, Profile, Research) consortium in October 2003, but it did not sign an exploration contract with Chevron until February this year, nearly 18 months later.
Lengthy negotiations over contract details delayed the signing.
A Chevron source involved in the first round of negotiations said the accelerated time scale for the second round was plausible as the JDA would be more familiar with the process after thrashing out the details with Chevron.
"I think they should get these contracts signed more quickly," the Chevron source said.
Companies that won the rights to exploration blocks in the second licensing round in May include ERHC Energy (ERHE.OB: Quote, Profile, Research) , Devon (DEV.N: Quote, Profile, Research) , Noble and Anadarko (APC.N: Quote, Profile, Research) .
The JDA has formally notified companies of their award and the percentage equity share in the blocks this week and companies have two weeks to accept the notification, Gomes said.
The waters are in the Gulf of Guinea, one of the world's exploration hotspots due to several major deepwater oil discoveries in the last 10 years. Big discoveries have been made in Nigerian and Angolan deepwater.
The region is one of the key drivers of global oil supply growth. The United States, the world's largest oil consumer, hopes to import a quarter of its oil from the Gulf of Guinea region in a decade, up from 14 percent now.
The Nigeria-Sao Tome Joint Development Zone was established in 2000 in the previously disputed offshore area. Under the agreement, Nigeria receives 60 percent of revenues while Sao Tome receives 40 percent.
2 comments:
Thanks for the advice, Spiker. I am mighty close.
CC, there should be a reason why you are showing such hostility toward Joe Shea. What is it? How long have you known him?
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