Although all the news is good, there has so far been no reaction in the marketplace, where ERHE is trading slightly lower today on tepid volume.
The news is that all of the winners of the bidding in Round II of the Joint Development Zone auctions pf Gulf of Guinea oil concessions have accepted the awards they were offered - not a sure thing because of the increased signature bonus fees on some - and that Production Sharing Contracts for all of the five offered blocks will be done in three months, not the six that a JDA official predicted in a Reuters news story early this week.
The JDA also said the companies who won are also expected to negiotiate theuir Joint Operating Agreements "in parallel" with the PSCs. Those agreements limn the relationship between members of the various consortia that are operating or participating in the five blocks.
Update, 3:29pm, 6/24/05: For my convenience, blog Comments have been turned off. We will notify you when they are turned back on.
Update, 3:23pm, 6/24/05: The price is $0.487, so the good news has actually hurt a little bit - at least so you'd suppose, if this share price made a lick of sense. Don't owrry, it doesn;t. The volume is a very modest 620,898, and the Biod and Ask are $0.487 x $0.49. I have errands to run, and this will likely be the last Update of the trading day.
Update, 2:23pm, 6/24/05: The market is still snoring in the Summer sun. The price is still $0.49, and the volume has only inched up, now to 588,911 shanes. The Bid and Ask are $0.4875 x $0.49.
Update, 1:43pm, 6/24/05: The market read the JDA, Dow Jones and Reuters news and rolled over and went back to sleep. The price is $0.49, the Ask, and the Bid is $0.485, on still-lukewarm volume of 558,941 shares.
Update, 12:53pm, 6/24/05: Volume is still slow, at 429,814, but the Bid is better at $0.49 and the Ask is imporoved at $0.50.
Update, 12:33pm, 6/24/05: Volume has risen just 22k since the announcements began. The share price is $0.49, the Ask, while the Bid remains unchanged from earlier at $0.485. It is unclear whether the news was long ago discounted or has not reached the market. If, as expected, Noble Energy, Devon Energy and Pioneer Natural Resources all issue releases mentioning the role of ERHC Energy, the effect may be galvanic, however.
Update, 12:05pm, 6/24/05: The price is $0.49, the Ask, with the Bid at $0.485 and volume a slow 368,534.
Reuters has updated its story, also shortening the timeline. Hee is the new Reuters story, which again mentions ERHC Energy prominently:
Nigeria-Sao Tome see oil PSC talks over end-Sept
Fri Jun 24, 2005 11:59 AM ET
ABUJA, June 24 (Reuters) - Sao Tome and Nigeria expect negotiations of production sharing contracts (PSCs) for five offshore oil blocks to conclude within three months, the Joint Development Authority (JDA) that administers the blocks said on Friday.
The JDA awarded the five exploration licences on May 31 after a turbulent five-month delay over disagreements between the countries and accusations of corruption.
The JDA said on Friday it had received acceptance from the consortia that were awarded the licences, and was now in a position to start negotiating PSCs with them.
"The JDA expects the awardees to also commence the negotiations of the joint operating agreements among the consortium for each block in parallel with PSC negotiations, in order that 2004 licensing round can be completed within three months," the authority said in a statement.
A consortium of ERHC Energy (ERHE.OB: Quote, Profile, Research) and Devon (DEV.N: Quote, Profile, Research) won a 65 percent stake and the operatorship of block two, while the operatorship of block four, the other most highly contested block, was won by a consortium of ERHC Energy and Noble.
Anadarko (APC.N: Quote, Profile, Research) won a 51 percent share and the operatorship of block three, the consortium of International Commerce and Communications (ICC) and Oil Exploration Consortium (OEC) got 75 percent and operatorship of block five, while block six went to Filtim Huzod which secured 85 percent and operatorship of the acreage.
The blocks are in the deep waters of the Gulf of Guinea, one of the world's exploration hotspots since a series of huge oil discoveries over the last decade.
This was the second licensing round, since the first was aborted after just one exploration contract was awarded for $123 million, to a consortium led by U.S. energy giant Chevron (CVX.N: Quote, Profile, Research) .
Nigeria and Sao Tome set up the JDA in 2000 to administer the offshore area after signing a treaty ending a protracted maritime border dispute.
Here is the Dow Jones story:
Sao Tome Says Oil Field Negotiations To Wrap Up In 3 Mos
24 Jun 2005 10:17 ET DJ
LONDON (Dow Jones)--Negotiations for operating agreements and production sharing contracts on five Sao Tome oil blocks should be finished within three months, the agency overseeing talks said Friday.
The five oil blocks were awarded May 31 after protracted talks between the Nigerian and Sao Tome which jointly govern the offshore fields believed to hold billions of barrels of oil.
The talks were marred with accusations of corruption and rocked the tiny island-state of Sao Tome with a series of high profile resignations from government.
The Joint Development Authority said in a statement that all the awardees of the bidding round have accepted the offers.
The statement said the agreements would be modeled on the contracts signed for block 1 which was granted earlier to Chevron (CVX) and ExxonMobil (XOM) in February.
Winners in the second round include Devon Energy Corp. (DVN) and ERHC Energy Inc. (ERHE) on block two.
Block three went to Anadarko Petroleum (APC). Block four was awarded to a consortium of Noble Energy Inc. (NBL) and ERHC. Block five was given to Nigerian independents I.C.C-O.E.O.C.
Nigerian independent Filtim-Huzod won block 6.
-By Shai Oster, Dow Jones Newswires; +44-20-7842-9357; shai.oster@dowjones.com
June 24, 2005 10:17 ET (14:17 GMT)
And here is the long-awaited JDA press release:
UPDATE on the 2004 LICENSING ROUND
the Nigeria-Sao Tome Joint Development Authority is please to announce that as at 23rd June 2005, all awardees in respect of the five blocks offered in the 2004 Licensing Round have confirmed their acceptance of the offers.
Furthermore, the JDA is now in a position to commence the negotiations of the Production Sharing Contracts (PSCs) with awardees based on the Model PSC document negotiated for Block 1.
The JDA expects the awardees to also commence the negotiations of the Joint Operating Agreements (JOA's) 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.
Nigeria Sao Tome and Principe
Joint Development Authority
Abuja
24th June 2005
2 comments:
Sorry about that. I didn't mean to delete your comment.
I know who that psycho is.
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