As we wait for the great news that will take us back out of the low $0.40s - and hope it's out there, somewhere - the story of Devon Energy's exit from the Block 2 and 3 consortium it shared with ERHC Energy and Pioneer Natural Resources has been replayed in UpstreamOnline. The Devon news was first reported more than a week ago, by Reuters and Dow Jones.
Investors posting on Raging Bull and InvestorsHub felt let down, they said, by the lack of new information on a possible buy-out reported in Upstream two weeks ago, and remain disappointed by the low share price, which was unchanged on Thursday at $0.41 on 882,500 shares, a little less than a third of Wednesday's volume. The price decline has brought ERHC Energy's market capitalization to a recent low of $291,400,000.
A line in the Barry Morgan story that came out yesterday is prompting a little interest. He said that senior management of both ERHC Energy and OPioneer Natural Resources were meeting in London. Was that to advance the possibility of a buy-out, or just to work our details of their Joint Operating Agreement and Production Sharing Contracts?
And another line also sparked interest: Pioneer told Morgan that it no longer has "reservations" about taking on so much equity in the Gulf of Guinea prospects it shares with ERHC. Investors were not aware that Pioneer was voicing reservations about the block awards until now.
And yet a third line captured the attention of many alert investors. Pioneer will carry ERHC Energy's signature bonus costs in exchange for a share of its revenue oil, the article indicated.
That appeared to some to answer the question of whether the company's principal shareholder was selling shares to raise money to pay increased signature bonus fees, but in fact the increased fees were in Block 4, where ERHC and Noble Energy were named operators.
ERHC had a bonus-free deal with Sao Tome and Principe in all but one of the blocks.
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