Update, 9:34am EST, 11/11/05: Nearly 294,000 shares traded - all but 663 of them sales - in the first three minutes after the opening bell today, but the selling then came to an abrupt halt, apparently as news of the Dow Jones story moved across the wires.
The news comes amid turmoil that sent the stock one cent lower yesterday and has nibbled away at its share price since last week. It has fallen 14 percent this week, but appears likely to recover ground with today's news.
The current imbroglio includes the placement and withdrawal of conflicting timelines for Production Sharing Contracts in the Nigeria-Sao Tome Joint Development Zone and of a press release from the N-DRSTP Joint Development Agency saying it had approved the substitution of Addax Petroleum for Noble Energy, ERHC Energy's early consortium partner that walked away from operatorship in Block 4 last week. The final development before today's announcement concerned the abrupt resignation of ERHC's auditors yesterday without a statement why but without any suggestion of improprieties.
Here is the Dow Jones piece released today:
DJ Addax, Sao Tome Oil Rights Deal Seen By Yr's End - Source
11/11/2005
Dow Jones News Services
(Copyright © 2005 Dow Jones & Company, Inc.)
LAGOS (Dow Jones) -- Swiss energy company Addax Petroleum and Nigerian authorities won't this week sign an oil drilling rights deal as expected, though the pact will likely be approved by the end of the year, a government source said Friday.
A source at the Nigeria-Sao Tome and Principe Joint Development Authority told Dow Jones Newswires that negotiations were "progressing at a steady rate" despite the delay. The source declined to comment on the reasons for the delay.
The negotiations are over a production sharing agreement for a set of blocks in the Joint Development Zone, or JDZ, in the Gulf of Guinea between Nigeria and Sao Tome and Principe - the island neighbor of the West African oil producer.
Addax, which already has operations in Nigeria, replaced Canada-based Noble Energy Inc. (NBL) after it withdrew this year from a consortium led by ERHC Energy Inc. (ERHE).
Houston-based ERHC, which has drilling rights in the area, enlisted Addax in the consortium after Noble pulled out.
ERHC requested that Addax replace Noble on Block 4 and authorities "are considering it," the source said.
Once outstanding issues are resolved and a deal is signed, the production-sharing agreement will be sent to the joint ministerial council for approval.
That is expected to happen by the end of the year, the source said.
-By Vincent Nwanma, Dow Jones Newswires, +234-1-723-3156; vinwanma@beta.linkserve.com
(END) Dow Jones Newswires
11-11-05 0811ET
Copyright (c) 2005 Dow Jones & Company, Inc.
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