Sao Tome To Get US Navy Help In Fending Off Pirates

The U.S. Navy will train the tiny, nearly non-existent Sao Tome and Principe navy to control its seas and fight terrorism and piracy, Stars and Stripes - the private, officially-sanctioned publication widely read by members of the U.S. Armed Forces - said today.

It immediately raised the question of whether U.S. forces would do anything to help Sao Tome defend its rights in the Nigeria-Sao Tome and Principe Joint Development Zone if Nigeria decided to take over control of the oil-rich zone in the Gulf Of Guinea.

At a meeting last Friday, the delegations of the two countries deadlocked on what Nigeria has described as an "unforeseen administrative error" that resulted in a denunciation of Sao Tome as a "bad business partner" by Nigerian Oil Minister Dr. Edmund Daukoru, who is also President of OPEC, the global oil cartel.

Dr. Daukoru demanded a public apology from Sao Tome which several sources is in fact due Sao Tome, not Nigeria, which reportedly failed to observe some "due process" rules.

No apology has been forthcoming, and there has been no official indication that one will be reqired before Block 2, 3 and 4 negotiations resume at a meeting scheduled for March 14. It may be awkward for Dr. Daukoru to withdraw his demand, and for Sao Tome to accede to it.

Here is the story:

U.S. sailors will train Africans to fight terrorism
USS Emory S. Land’s mission to coast part of push ‘south and east’

By Sandra Jontz
Stars and Stripes European Edition

The Sardinia, Italy-based USS Emory S. Land has sailed again for a two-month deployment to the Gulf of Guinea on a mission to teach African navies how to defend against smuggling, piracy and terrorism.

About 1,400 sailors and Marines are aboard the submarine tender, which will sail to the African nations of Sao Tome and Principe, Gabon, Congo and Angola.

The deployment is part of U.S. European Command’s big push “south and east” of Europe to secure vulnerable states where terrorists are working to gain a foothold, Navy officials have said.

“The world is getting smaller, and we need a safe and secure African region,” rich in resources such as iron, timber and petroleum, Navy Capt. Tom Rowden, commander of Task Force 65, said Monday in a telephone interview from the ship.

During this deployment, Navy leaders are laying the groundwork to equip West African countries with an unclassified, commercial network system that would allow them to keep tabs on all the vessels in and around the Gulf of Guinea. The system is similar to how air traffic controllers monitor who and what is in the skies.

“We have no funding for the equipment, that’s the bad news,” Rowden said. “The good news is that the cost is a drop in the bucket [and] we’re looking for ways to provide the equipment to them.”

The Land also will provide materials to help restore some of the West African nations’ ships. Materials include extra welding rods, steel pipes, sheet metal and other supplies to either repair or create items such as exhaust manifolds or air-conditioning ducts, said Petty Officer 2nd Class Timothy Sepula, a hull technician on his second tour to the gulf.

In Sao Tome, Seabees from Gulfport, Miss., will rebuild a high school, from new flooring in the gym to running water, urinals, sinks and concrete pillars, said Petty Officer 2nd Class Dane Hendricks, a steelworker.

Blocks 2 And 3 May Be Long Delayed, African Source Says

A source in Africa who is extremely knowledgeable about issues involving ERHC Energy and the Nigeria-Sao Tome Joint Development Zone said today that Blocks 2 and 3 may not see their production Sharing Contracts signed for as much as another two months.

The source wrote to correct a misimpression I left when I suggested based on a misreading of his note that Sinopec may sign a PSC with ERHC and the Nigeria-DRSTP Joint Ministerial Council on March 14, when Block 4 is expected to be signed.

The source, whom I will refer to as "Doc" in the future, wrote:

When you wrote that "Sinopec is indeed likely to become operator of Block 2 with ERHC Energy if a PSC is signed as expected on March 14," that is not exactly what I intended.

The last I heard (this morning) is that any signing on the 14th would be for block 4 alone - or *possibly* 3 and 4 - and also that Dr. Daukoru is bracing himself for some very strong arm-twisting coming from the highest echelons as he visits your nation's capital.

The word is that there is so much money to be made out of Block 2 that the Americans are ready to do *anything* to get a part of the pie, and if possible operatorship.

Frankly, given what I know, I doubt they will succeed in the latter, but the former is possible because they could easily make an offer so large that Conoil or Hercules couldn't refuse.

This would help everyone save face too, but I would be *very* surprised if block 2 PSCs are agreed to within two weeks. Two months is much more likely, although given the JDA record that might be optimistic.

Violence Has Cut Nigerian Crude Output 30%, Vanguard Says, Delaying OPEC Production Cuts

Efforts by the Organization of Petroleum Exporting Countries (OPEC) to reduce production quotas and improve the price of oil are being frustrated by violence in the Niger Delta of Nigeria, the daily Vanguard of Nigeria reported today.

The paper said Nigeria could lose up to half of its production if a raging battle with ethnic Ijaw separatists persists.

The fact that the Nigeria-Sao Tome and Principe Joint Development Zone is far offshore has become a significant new factor in the value of its blocks and potential reserves.

ERHC Energy (OTC BB symbol: ERHE) has substantial equity in five of the blocks and rights to more in the offshore Sao Tome and Principe Exclusive Economic Zone, Its shares have soared as traders anticipate the signing of Production Sharing Contracts that would allow the company to exploit the reserves believed to await explorers in Blocks 2, 3, 4, 5 and 6.

ERHE's share price closed Tuesday at $0.78, down $0.011, on volume of 3,438,210 shares after trading as high as $0.87.

The extent of the production loss - 30 percent of its crude, Vanguard said - was far greater than earlier reported; Royal Dutch Shell has only cut 455,000 barrels a day, or 17.5 percent of what the paper says is the country's normal 2.6 million barrels a day, mostly as the result of attacks on a receiving terminal from Delta and offshore wells. Most observers say the country produces 2.4 million bpd.

It is unclear what other cuts may have contributed to the total reported by Vanguard, but if the number it reports is true the global ecnomy is far from having seen the worst of gas-pump shock. So far, the Nigerian production cutback has had no discernible impact on prices for gasoline in the United States.

It is not unusual, however, for Nigerian newspapers, even the best one, to exaggerate such figures in the interests of one politial goal or another.

Here is the Vanguard story:

Nigerian violence may delay OPEC cuts
...MEND to escalate state of insecurity
By Hector Igbikiowubo with Agency reports
Posted to the Web: Tuesday, February 28, 2006

VIOLENT unrest in Nigeria that has led to about 30 per cent cut in the country’s crude output could persuade OPEC to maintain its level of oil output at a near historic high when it meets next week, an energy analyst has said. There are also indications that the current state of insecurity in the Niger Delta may escalate further, shutting in at least half of Nigeria’s 2.6 million barrels per day capacity with implications for crude oil pricing.

Prior to violence breaking out last Thursday in Nigeria, Africa’s biggest producer of crude, analysts had predicted that the Organization of Petroleum Exporting Countries would cut output when it meets in Vienna at the start of March.

But Global Insight analyst Simon Wardell told AFP: “If the Nigerian situation means prices are US$60 to US$65 when they (OPEC) next meet, then again they’re going to have a really difficult time in cutting production back, so they’ll probably keep things steady.”

His comments were made as Nigerian separatist guerrillas taunted the army with claims of further attacks after a weekend of violence forced the energy giant Royal Dutch Shell PLC to slash the country’s oil exports by a fifth.

The news prompted oil prices to spike almost 3.0 per cent in London trading, as they struck an intra_day high of US$61.63 per barrel.

Trading in New York was suspended for a national holiday but was expected to open higher today. In London trading, the price of Brent North Sea crude for April delivery surged US$1.79 to US$61.54 per barrel in electronic deals.

The Nigerian insurgents said the military had abandoned one of its posts in waterways west of the oil city of Warri, allowing the militants to dynamite a floating barracks block and another of Shell’s crude oil pipelines.

Shell officials, however, said they had evacuated all oil plants in the immediate area, bringing Nigeria’s losses to around half a million barrels per day.

The global oil market currently has spare capacity of roughly 1.5 million barrels per day, according to market analysts. That would be insufficient to compensate for a loss of total production in Nigeria, which stood at some 2.4 million bpd in January.

Mr. Wardell added that in reaction to the Nigeria unrest, OPEC would prefer to cut production. “It all depends on the price, that’s what they’ll be reacting to.”

Kuwait’s energy minister, however, said yesterday that a cut in oil production may be necessary at OPEC’s next meeting since over_supply may reach two million barrels per day (bpd) in the second quarter.

“We believe the market is well_supplied and we believe the second quarter will be over_supplied ... with between 1_2 million bpd,” Sheikh Ahmad Fahd al_Sabah told reporters in his country’s parliament.

“We have to wait for our March meeting. If necessary and if prices will go back to be determined by supply and demand, we have to do our cut,” Sheikh Ahmad said. “But if prices continue as they are now we will continue to support stable prices for the future,” he added.

At its last meeting on Jan. 31, OPEC decided to keep its production ceiling of 28 million barrels per day.

The widely_expected move followed a 12% spike in the price of crude since the start of the year fuelled by controversy over Iran’s nuclear programme and a series of previous attacks against oil installations in Nigeria.

OPEC, which produces about 40% of the world’s crude, is actually producing more than 29 million barrels per day including output from Iraq, which is not included in the official quota.

While speaking exclusively with the Vanguard, a MEND spokesperson disclosed that government was taking their demands rather lightly and that there is the need to teach government a lesson in ‘quick response’.

“You are a media person, so I can't give you details. But I can let you know that we would no longer give any warnings regarding our actions. We shall go ahead and cripple oil activities in the Niger Delta before this time next month.

Our motive is to make the area unattractive to the multinationals. In no time we shall also take the fight to the streets of Port Harcourt, Warri and Yenagoa. Be rest assured that no oil installation in the Niger Delta can be safe from us neither shall any expatriate working in the area,” he said.

When reminded that their fight was with the government and not the multinationals, the MEND spokesperson countered, “these people are collaborators and we have given them a chance to exit the area. We shall not be held responsible for whatever happens to them.”

The spokesperson also served notice that as long as their demands are not met, more hostages would be taken.

The Niger Delta accounts for over 90 per cent of Nigeria’s crude oil export earnings resulting in revenues in excess of $400 billion in the last 50 years. However, the area is without basic infrastructures such as motorable roads, pipe-born water and electricity.

We've Picked Up Some PXD (No, That's Not Pixie Dust)

ERHC On The Move has added 400 shares of Pioneer Natural Resources to its portfolio at $41.96 a share.

The company, which withdrew from partnerships with ERCH Energy in Blocks 2 and 3 for reasons that have not really been made clear, is continuing to sell assets and according to a reliable source in Africa has already been in takeover/buyout discussions with Chevron.

Regardless of whether these talks really occurred, continue or are consumnated, we believe the company's African interests are going to grow in value and that it remains a likely takeover target.

Ironically, it's one of the few stocks we've ever purchased that rose immediately after we bought it!

In some ways, we have come to admire the company's approach, despite reports that it continued to assure ERHC Energy shareholders who called that it expected to sign PSCs in the near future after it had already withdrawn from the ERHC consortium. The PR department may well have been left out of the loop on that issue.

Meanwhile, ERCH (OTC BB symbol: ERHE) has moved up to $0.87 and fallen all the way back to $0.79 today before rising once again to $0.82. It is now at $0795 x $0.80 on volume of 3,272,210 shares and the last sale was $0.80 at 3:21 p.m.

China Moves In On Nigeria's Oilfields And 'Friendship'

Amid private information from Africa that Sinopec is indeed the likely to become operator of Block 2 with ERHC Energy if a PSC is signed as expected on March 14, United Press International has moved a story about the Asian giant's efforts to win broader support in Nigeria.

At the same time as these efforts aimed at strengthening Nigeria's military at a time when the American CIA is predicting the nation is on the verge of disintegration, China has forgiven loans to all of Portugal's former island territories except Sao Tome and Principe, which has been a long-term supporter of Taiwan.

As some will note, China is also unlikely to take issue, as the United States has, with a third term for President Olusegun Obasanjo that a constitutional convention is now considering.

To its credit, the United States is playing by principled rules in Nigeria, but it has been losing favor as more Nigerians see it becoming heavy-handed in its criticism of their president and unually intrusive in its political affairs. The prediction by CIA Director Porter Goss at hearings on his nomination a year ago that Nigeria was in danger of falling apart by 2010 has also not helped. Very recently, American statesmen seem to have moderated and improved their approach, but more needs to be done.

Probably, educated Nigerians believe that the failure of American oil majors to win all the fields they want in the Joint Development Zone and the seizure of some fields that the companies had failed to exploit has resulted in pressure on the U.S. State Dept., which with conservative leadership is more than willing to act as an interlocutor for ExxonMobil, ChevronTexaco and others.

China doesn't present so many issues - and, of course, its benefits are limited to cash and arms - and it plays the political and the i
intelligence game with mastery.

There is a critical problem developing in Nigeria for the United States, which never before has had a serious competitor for alliances that were securely its own in the past. That means that it is time to reevaluate foreign policy approaches that are not working for us.

A bit of disclosure: UPI is now owned by the Unification Church of Rev. Sun Myung Moon, a Korean native and strong ally of Korean and U.S. conservatives, who also owns the Washington Times. Also, thje Nigerian Vice-Presdent was the subject of an FBI search of his home outside Washingtron last year in connection with the Justice Dept. probe of U.S. Rep. William Jefferson (D-La.).

Here is the UPI story:

(Comtex 02/28 11:25:47)
Nigeria 'let down' by U.S. oil aid
( United Press International )

LAGOS, Nigeria, Feb 28, 2006 (UPI via COMTEX) -- Nigeria is turning to China for military supplies to protect its embattled oil fields, as its vice president says the United States isn't moving fast enough.

In an interview with the Financial Times, Vice President Atiku Abubakar said the U.S. government has offered the Nigerian military technical assistance and training, but has provided only four old coastal patrol boats for use in the oil-rich Niger Delta, where at least 200 are required.

Militant attacks on oil facilities and kidnappings of foreign oil workers this month have shut down one-fifth of oil production in Nigeria, the world's eighth-largest oil exporter.

A senior Nigerian naval official said Nigeria "felt let down" by the reluctance of the U.S. military to offer more support and that the Chinese boats were "a very welcome development."

Last year, Nigeria signed an $800-million deal to supply PetroChina with 30,000 barrels a day of oil.
www.upi.com

ThisDay Online: New JMC Date Is Set; More Background On Blow-Up Offered; Gandur Good On His Feet

Two articles in ThisDay Online came a little bit late to the party, but both shed some new light on the events last Friday that led to the meltdown of the Nigeria-Sao Tome and Principe Joint Ministerial Council meeting.

The story seems to reflect a point of view that is exclusively informed by the Nigerian side. However, in a note from Africa yesterday, a well-informed source told ERHC On The Move that the fault for the blow-up lay not with Sao Tome but Nigeria, which failed to follow "due process" rules that deprived the delegation of opportunities for document review the JMC should have provided.

Moreover, the sources say, the Nigerian side knew very well that their failure to observe the due process was likely to lead to problems.

That is one reason no apology is forthcoming from the Sao Tome side, the source said.

One revelation in the stories is that the Addax chairman Jean Gandur is good on his feet, and his comments indicate that he will be available to the press in ways that Sir Emeka Offor is not. I think many investors will find that a major plus, as ERHC Energy's greatest weakness has always been its information handling. Some would say, though, that the information the company provides has been responsible for two remarkable recoveries in recent weeks.

Here are the two latest stories from ThisDay Online's well-seasoned oil writers, Mike Oduniyi and Onyebuchi Ezigbo. The first is about the new date for the next JMC meeting, and the second about Friday's events:

Nigeria, Sao Tome Pick New Date for Deal on JDZ Block
By Mike Oduniyi, 02.27.2006

Nigeria and Republic of Sao Tome and Principe have picked a new date for the signing of the Production Sharing Contract (PSC) on an offshore block in the Joint Development Zone (JDZ) of the Gulf of Guinea.

The two countries failed last weekend to ink the deal for block 4, owned by the consortium of Swiss firm, Addax Petroleum and US-based oil firm ERHC Energy.

Managing Director of ERHC Energy, in which Nigerian indigenous oil firm Chrome Energy has a major stake, Mr Walter Brandhuber, told THISDAY yesterday that the Joint Development Authority (JDA) has fixed a new date of March 14, 2006 for the signing of the PSC.

“The JDA has informed us that the signing of the PSC will now take place on March 14,” he said.

The PSC signing, which has dragged on for more than five months, was botched on Friday after Sao Tome officials requested postponement of the meeting slated for Abuja.

JDA also said in a statement that postponement was due to “unforeseen administrative issues.

“These issues are not fundamental to the subsisting agreement, and spirited efforts are being made to resolve those issues preparatory to the signing of the PSC,” it said.

The other companies having stakes in the bloc include, Conoil with (20%), Godsonic Oil Ltd (5%), Hercules (10%) and Overt (5%).

Officials of Sao Tome and Principe who were at the botched meeting had sought for more time to enable it thoroughly examine the letters of the agreement, adding that it still shares common interest with Nigeria as fair speeding up the development of resources within the zone.

Under the treaty governing the JDZ, revenue to be derived from the operation of oil blocs are to be shared on the basis of 60/40 for Nigeria and Sao Tome and Principe respectively.

The Chairman of Addax, Mr. Jean Claude had also expressed the hope that Nigeria and Sao Tome and Principe would be able to resolve the matter in good time so as to maximize the great opportunities inherent in the JDZ agreement.

This is the story on the blow-up:

JDZ: Nigeria Condemns Botched PSC Signing
From Onyebuchi Ezigbo in Abuja, 02.27.2006

Nigeria at the weekend demanded a public apology from the government of Sao Tome and Principe over its last minute pull- out from a scheduled signing of the production sharing contract (PSC) on an offshore oil block in the Joint Development Zone (JDZ) managed by the two countries.

The PSC signing for block 4 was to have been with Swiss firm Addax and another consortium which clinched the acreage in the second batch of the 2005 oil licensing round put out under the JDZ collaborative initiative.

All the parties had gathered at the headquarters of JDA in Abuja by 8 PM, Friday night after the event was shifted from the earlier time of 11.30 am, to witness the signing ceremony but rather than have the signing of the agreement proceed as expected, officials from Sao Tome surprisingly asked for the postponement of the ceremony, to enable them to have another look at the draft PSC agreement and the Joint Operating Agreement (JOA).

Nigeria's Minister of State for Petroleum, Dr. Edmund Daukoru, who broke the unpleasant news of the cancellation of the signing ceremony to all the parties, expressed displeasure at the turn of events, especially the continued dragging of feet on the oil deal by Sao Tome.

An American oil firm, Environmental Remediation Holding Company (ERHC), whose majority shareholder happens to be a Nigerian, Chief Emeka Offor, won the operatorship of bloc 4 and has recently entered into joint operating partnership with Addax oil company.

The other companies having stakes in the bloc include Conoil with (20%), Godsonic Oil Ltd (5%), Hercules (10%) and Overt (5%).

While absolving Nigeria of any responsibility for the disappointing show, Daukoru said the country would require a public apology from Sao Tome government over the incident.

He said the FG considered the incident a major embarrassment for which the government of Sao Tome and Principe would have to issue an apology.

An obviously displeased Minister regretted the inability to consummate the bloc 4 agreement as scheduled, saying that the action is not sending the right signal to investors.

"It is very a terrible thing, it is not good. This does not send the right signal to investors. It cannot event quantify the loss in terms of the bad image it has created", he said.

"I feel very sad today, I am an oil man, not a diplomat. Oil business is not run in this manner. I really feel the authorities of SaoTome have to issue a apology on this", he said.

He said there was no real justification for the request for the postponement, adding that before now, Sao Tome and Principe has asked for more time to enable them careful study of the draft contract agreement which "we bended over to allow".
The Minister said that prior to the scheduling of the event, copies of both the PSC and JOA agreement were circulated to all parties with request and enough time for comments and differences to be resolved.

The minister said he does not think fundamental change will be made in the PSC which is modeled out of the one signed by bloc one operator, Chevron.

Daukoru recalled the protracted nature of the process of negotiations leading to the award of the oil blocs at the end of the 2005 licensing round which he attributed to the "peculiar nature of relationship between Nigeria and Sao Tome and Principe".

Expressing concern on the market loss this continued delay is bound to bring about, Daukoru said with regard to the bloc one operated by Chevron, the operators has reportedly hit a first oil in the field which meant that they would benefit from the current high oil prices.

"This cost of crude oil in the international market is going higher and higher. The business in the industry is counted in time. This is not how to do oil business. Nigeria is not happy about the delay but we would take it as part of the sacrifices to be made in ensuring the survival of the partnership.

Under the treaty governing the JDZ, revenue to be derived from the operation of oil blocs are to be shared on the basis of 60/40 for Nigeria and Sao Tome and Principe respectively.

The Chairman of ADDAX, Mr. Jean Claude who spoke later to newsmen on the issue, expressed the hope that Nigeria and Sao Tome and Principe would be able to resolve the matter in good time so as to maximize the great opportunities inherent in the JDZ agreement.

Officials of Sao Tome and Principe who were at the event said their had to seek for more time to enable it thoroughly examine the letters of the agreement, adding that it still shares common interest with Nigeria as fair speeding up the development of resources within the zone.

From The 25th Floor...

A speedboat churns through the calm blue waters of Biscayne Bay in this view from the 25th floor of the Biscayne Bay Marriott on N. Bayshore Drive, across the street from the Miami Herald. In the background are the high-rise hotels and apartment buildings of Miami Beach.
Joe Shea/The American Reporter

ERHC Stages Another Quick Recovery

For the second time in less than three weeks, ERHC Energy has survived a meltdown of historic proportions and restored its share price to better than the starting point, as it did when word of Pioneer Natural Resources' exit from the Nigeria-Sao Tome Joint Development process was announced on Feb. 7.

Fallout from Friday's collapse of the Block 4 signing ceremony had apparently abated sufficiently for the Nigeria-Sao Tome and Principe Joint Development Authority to issue a press release blaming "unforeseen administrative errors" for the blow-up and for ERHC to issue a release saying it has been advised that a signing ceremony will take place on March 14. A Dow Jones story and a correction echoed all but the date, for reasons we do not know.

Given the back-to-back news reports, the stock's share price reversed its slide to $0.63 and climbed back a full $0.17 to $0.80, a larger gain than it had enjoyed after a short-lived $0.15 fall on my birthday, Feb. 7. Today it closed up $0.05 on the day with a Bid and Ask of $0.795 x $0.80.

The big loser, to the glee of many, was me - I cashed out at $0.63. I am certainly glad to have $40,000 back in my hot little hands, though, rather than in the pockets of some market maker riding this unbelievable roller coaster of a stock. It does not look at this point that I will find an acceptable buy-in price in the near future, and it may well be that shares trade over $1 before the PSC is signed - too rich for my blood.

Volume for the tumultuous day was 10,200,052, not a record by a long shot but very, probably the third or fourth highest volume in our recent history.

Dow Jones Corrects Earlier Release, But New One Sets No Date For PSCs; A Note From Africa

Dow Jones corrected a story it wrote that omitted ERHC Energy from the Block 4 consortium but neither the old nor the corrected release follows the company's lead in announcing what it says is a March 14 date certain for the signing ceremony.

Meanwhile, a note from Africa says the essential issue at hand at Friday's failed signing ceremony was "due process" in Nigeria-DRSTP Joint Ministerial Council negotiations, and that in retrospect Sao Tome's assertion of its interests may have helped clear the air and ease negotiations in the future. It is Sao Tome that is due the apology, the note said. Both sides remain committed to signing the Block 4 pact, and ERHC/Addax is not an issue this time, it said.

Here is the Dow Jones article by Vincent Nwannma:

DJ New Date To Be Announced For Nigeria-Sao Tome Oil Pact

02/27/2006
Dow Jones News Services

LAGOS (Dow Jones)--A new date will be announced for the signing of a production sharing contract on Block 4 of the Joint Development Zone being developed by Nigeria and its island neighbor, Sao Tome and Principe, the Joint Development Authority said Monday.

In a statement, the JDA said the signing was postponed from Friday "due to unforeseen administrative issues."

"We wish to assure all the stakeholders that these issues are not fundamental to the subsisting agreement, and spirited efforts are being made to resolve those issues preparatory to the signing of the PSC," the statement said.

Reports said the postponement followed the insistence by Sao Tome and Principe to study the PSC and Joint Operating Agreements before the documents are signed.

Nigeria and Sao Tome share the resources from the joint development zone to the ratio of 60:40.

Block 4 was awarded to a consortium that initially included Houston-based Noble Energy Inc. (NBL), during the 2004 licensing round. However, Noble later withdrew from the consortium and was replaced by Swiss energy company Addax Petroleum Corp. (AXC.T)

Other members of the consortium include Conoil, ERHC Energy (ERHE), and Godsonic Oil and Gas.

-By Vincent Nwanma, Dow Jones Newswires; �1-585-0849; vinwanma@beta.linkserve.com


Corrected February 27, 2006 12:57 EST (17:57 GMT)

(END) Dow Jones Newswires

02-27-06 1132ET

DJ CORRECT: ERHC Energy Is Member Of Consortium


Other members of the consortium include Conoil, ERHC Energy (ERHE), and Godsonic Oil and Gas.

("New Date To Be Announced For Nigeria-Sao Tome Oil Pact", timed at 1632 GMT, misstated the name of one of the companies in the consortium.)
(END) Dow Jones Newswires

02-27-06 1256ET

New PSC Signing Date Set For March 14, ERHC Says

Reacting to Friday's events with remarkable speed, ERHC Energy announced in a press release minutes ago saying that it has been advised its Production Sharing Contract for Block 4 will be signed on March 14, 2006, fulfilling a promise by the Nigeria-Sao Tome and Principe Joint Development Authority to set a new date for the ceremony "very shortly."

It is one of those rare occasions when deeds have followed words for the JDA.

However, ERHC On The Move believes that the company's press release and a corresponding statement by the JDA (see belw) reflect wishful thinking on the part of both.

Investrs should look for a confirming statement from the Sao Tome side of the Joint Development Zone equation before accepting the new date at face value.

Here is the ERHC Energv release from Business Wire:

ERHC Energy Inc. Advised of New Signing Date for PSC in Block 4
Business Wire - February 27, 2006 11:01

HOUSTON, Feb 27, 2006 (BUSINESS WIRE) -- President/CEO of ERHC Energy Inc. (OTCBB:ERHE), Mr. Walter Brandhuber, stated today the Production Sharing Contract for Block 4 was not signed on Friday, February 24, 2006, due to minor political issues.

Management at ERHC Energy Inc. has been advised by government officials to anticipate signing the PSC on Block 4 on Tuesday, March 14, 2006.

Mr. Brandhuber also indicated all parties to the PSC are prepared to execute the PSC on that date.

SOURCE: ERHC Energy Inc.

ERHC Energy Inc., Houston
Jane Barker, 713-626-4700
Website: www.erhc.com

Copyright Business Wire 2006

JDA Says 'Unforeseen Administrative Issues' Stopped Block 4 PSC Signing; New Date To Be Set 'Very Shortly,' It Says

A press release from the Nigeria-Sao Tome and Principe Joint Development Authority this morning says that the "postponement" of the Production Sharing Contract signing ceremony last Friday was due to "unforeseen adminstrative issues."

"Spirited efforts" are being made to resolve those issues and a new date for the Block 4 PSC signing ceremony date will be set "very shortly," the JDA said.

Very little the JDA has said about the process of licensing explorers to exploit the Nigeria-Sao Tome and Principe Joint Development Zone has proved to be even marginally reliable.

The press release said the JDA was hoping to "assure" stakeholders, presumably including those investors on the global markets who have placed their faith and assets in one of the many petroleum stocks involved.

Those stakeholder interests are of "paramount importance at all times," the JDA said.

The brief release was first posted on an ERHC investor site and has not yet appeared on the JDA homepage, http://www.nigeriasaotomejda.com. It typically takes weeks for the JDA to post a simple press release.

As always, there is no word from the company on this seeming material event. It has more difficulty managing its Website than even the JDA does.

Here is the release, dated this morning:

PRESS RELEASE

POSTPONEMENT OF SIGNING FOR PSC OF BLOCK 4

The Joint Development Authority (JDA) wishes to inform the general public and particularly all the stakeholders that the postponement of the signing of the Production Sharing Contract (PSC) for Block 4 was due to unforeseen administrative issues.

We wish to assure all stakeholders that these issues are not fundamental to the subsisting agreement, and spirited efforts are being made to resolve those issues preparatory to the signing of the PSC. Consequently, a new date for the signing ceremony will be announced very shortly.

The JDA wishes to assure all stakeholders that the interests of all parties will always remain of paramount importance at all times.

Nigeria-Sao Tome and Principe
Joint Development Authority
ABUJA

27th February, 2006

We'e Out And Watching

As expected, the price of ERHC Energy fell sharply this morning, and as we said we would, we took what profits we could. We exited, as we indicated we probably would, at $0.63 with a profit of $21,221 on our last 61,800 shares.

The Bid then bounced up to $0.655 and the Buy was holding relatively steady at $0.66 in heavy trading. Volume stood at 3,166,126 at 10:14 a.m. and the Bid and Ask were $0.655 x $0.66.

With the $3,737 profit we took on Friday, we managed to preserve just $24,958 of our original $39,000 in gains.

Now there's $18,000 in the bank ready to buy back a substantial position if the price falls to an amenable range for us. I haven't yet established what that might be.

As we have indicated, we don't think that Friday's events inflicted a merely temporary setback for investors. It will take a lot of time to straighten out all the injured feelings and mistrust that Friday's behaviors engendered, and in the meantime we do not expect progress on PSCs or anything else at least until April, when we also expect ERHC Energy's price to be in an apropriate range for our trading.

Sao Tome Must Issue Public Apology To Nigeria Over Block 4 Incident, Daukoru Tells ThisDay Online; Says Chevron Hit Oil; We Plan To Sell And Buy Back

An article in ThisDay Online today says Nigerian oil minister and OPEC President Dr. Edmund Daukoru is demanding an apology from the government of Sao Tome and Principe for the failure of its delegation to the Nigeria-Sao Tome and Principe Joint Ministerial Council meeting in Abuja last Friday to sign the Production Sharing Contract for Block 4 as planned.

ThisDay Online said nothing about a rescheduled signinjg ceremony, which rival daily Punch of Nigeria said would take place in mid-March. ERHC On The Move cosiders that informnation to be completely false, reflectng only an effort by the ever-optimistic Joint Development Authority to put the best possible face on what is clearly a major break in relations with respect to the JDZ.

Oil executives from around the world, dignitaries and the press had all been invited to the signing ceremony, which had to be rescheduled from an 11 a.m. to 8 p.m., when discussions evaporated "at the last minute" into hostility as the Sao Tomean delegation demanded more time for review of the Joint Operating Agreement that underlies the production contract.

Advance copies had been circulated before the meeting that included a request for comments and ample time to work out differences, he said. The result was a major embarrassment for which Sao Tome must apologize, the new OPEC President said.

But the question of apologies cuts both ways.

Daukoru's branding of DRSTP as "bad business partners" may have inflicted a wound that is wide and deep and resists quick healing. As Dr. Daukoru said, "I am an oilman, not a diplomat."

Thus, absent an apology from Daukoru, too, as well as precipient action by Nigerian President Olusegun Obasanjo and Sao Tome President Fradique de Menezes, ERHC On The Move sees no short-term resolution to what is clearly a deeply fractured relationship.

Given that quandary, ERHC On The Move is intending to sell all its shares of ERHC Energy at market at the opening in New York this morning. This blog will continue, however, and we expect to repurchase shares at the best possible moment.

Here is the JDZ story:

THISDAY JDA: Nigeria Demands Apology from Sao Tome
From Onyebuchi Ezigbo in Abuja, 02.27.2006

Federal Government has demanded a public apology from the government of Sao Tome and Principe over its last minute pull-out from a scheduled oil contract deal at the weekend.

The event was the signing of a Production Sharing Contract (PSC) with Addax and other consortium winners of Block 4 of the second batch of the 2005 oil licensing round put out under the JDZ collaborative initiative.

The incident, which resulted in the postponement of the signing ceremony for the Production Sharing Contract (PSC) between the two state parties and winners of Block 4 of the oilfield awarded in the 2005 Joint Development Authority (JDA) licensing rounds almost caused a strain in the six-year old Joint Development Partnership between the tiny island territory and Nigeria.

All the parties had gathered at the headquarters of JDA in Abuja by 8 PM, Friday night, after the event was shifted from the earlier time of 11.30 am, to witness the signing ceremony but rather than have the signing of the agreement proceed as expected, officials from Sao Tome surprisingly asked for the postponement of the ceremony to enable them have another look at the draft PSC agreement and the Joint Operating Agreement (JOA).

Nigeria's Minister of State for Petroleum, Dr. Edmund Daukoru, who broke the unpleasant news of the cancellation of the signing ceremony to all the parties, expressed displeasure at the turn of events - especially the continued dragging of feet on the oil deal by Sao Tome.

An American Oil firm, Environmental Remediation Holding Company (ERHC), whose majority shareholder happens to be Nigerian, Chief Emeka Offor, won the operatorship of bloc 4 and has recently entered into joint operating partnership with Addax oil company. The other companies having stakes in the bloc include, Conoil with (20%), Godsonic Oil Ltd (5%), Hercules (10%) and Overt (5%).

While absolving Nigeria of any responsibility for the disappointing show, Daukoru said the country would require a public apology from Sao Tome government over the incident.

He said FG considered the incident a major embarrassment which the government of Sao Tome and Principe would have to issue an apology for.

The obviously displeased minister regretted the inability to consummate the Block 4 agreement as scheduled, saying that the action is not sending the right signal to investors.

"It is a terrible thing, it is not good. This does not send the right signal to investors. I cannot even quantify the loss in terms of the bad image it has created", he said.

"I feel very sad today, I am an oilman, not a diplomat. Oil business is not run in this manner. I really feel the authorities of Sao Tome have to issue a apology on this", he said.

He said there was no real justification for the request for the postponement, adding that before now, Sao Tome and Principe has asked for more time to enable them careful study of the draft contract agreement which "we bended over to allow".

The Minister said prior to the scheduling of the event, copies of both the PSC and JOA agreement were circulated to all parties with request for comments and and enough time for differences to be resolved.

The minister said he does not think fundamental change will be made in the PSC which is modeled out of the one signed by bloc one operator, Chevron.

Daukoru recalled the protracted nature of the process of negotiations leading to the award of the oil blocs at the end of the 2005 licensing round, which he attributed to the "peculiar nature of relationship between Nigeria and Sao Tome and Principe".

Expressing concern on the market loss this continued delay is bound to bring about, Daukoru said with regard to Block 1, operated by Chevron, the operators have reportedly hit a first oil in the field, which meant that they would benefit from the current high oil prices.

A Nigeria-Sao Tome Solution: Towards A JDZ Trust

Dissolution of the present Joint Development Zone is an unnecessary, if seemingly unavoidable, step that all parties are very reluctant to take, so it behooves us to search for better solutions.

In fact, I think there is one that will work for everyone but Sao Tome, and to a degree it may work even better for them to ensure their participation in the riches of the JDZ without risk of further debilitating political and diplomatic mishaps.

That solution would be for Nigeria to take over the entire process in trust for Sao Tome, and operate the JDA henceforth as it operates its own Nigerian Exclusive Economic Zone auctions. Nigeria would unilaterally declare that is is forming the Nigeria Sao Tome Trust for the Joint Development Zone, and then continue with the awards process as it has been set in motion, with the next step to be the signing of PSCs with those companies that won equity in the first two Licensing Rounds.

While Sao Tome would continue to shoulder part of the expense and continue to receive 40 percent of the signature bonus fees, it would not have other obligations to approve or deny decisions by the JDA on licensing issues, but it would have an advisory role on the Joint Ministerial Council and be able to register its opinions for the public record. Its status could be reviewed annually to determine if it is ready to become a major oil-producing nation consistent with the responsibility of democratic management of oil's central role in the global economy.

What Nigeria did not appreciate when it entered into the Abuja Declaration is that there has to be a certain historical readiness for the role of being a major oil-producing nation. Some of the requirements that would precede that readiness would be a substantial history of oil production on a small scale, a professional cadre of petroleum executives, experience in oil-related negotiations, and the presence of independent infrastructural bodies to facilitate the development of oil resources.

All of these requirements have been little but afterthoughts in Sao Tome's rush to oil-producing nation status, and as a result it is not capable of managing
oil-resource development in a stable, predictable way. Absent that capacity, it should not be expected to play a substantial role in the exploitation of one of the world's greatest petroleum resources, the Gulf of Guinea.

Nigeria, clearly, is eminently prepared to undertake this role as a major producing nation. I believe it would have in this stance a securely defensible position as a state party acting in a transparent way not only to ensure its own commitments but those of the people of Sao Tome, and well-suited to the structure set forth in the Abuja Declaration. It would allow Nigeria to carry out decisions already taken by the JDZ's governing bodies.

This solution might be analagous to what happens when an American president is deemed unable to hold office by reason of mental or physical incapacity; while the Abuja Declaration does not have any provision for incapacity, this succession procedure in the United States Constitution demonstates the well-established principle that any party to a contract must in fact have the capacity and intention to exercise its contractual obligations.

In the apparent absence of that capacity, Sao Tome's role should be modestly reduced until it does, and in the interim Nigeria's role should be expanded to caretaker status consistent with its long experience in the industry. At the same time, it should invite NGOs to observe its custodianship of JDZ resources to preserve the image of a process that s conducted with integrity.

PSC Dispute On JOA Settled, Contracts To Be Signed "In Two Weeks," Daily Punch Says; We Don't Believe It

In what apparently is yet another bald-faced lie, the Joint Development Authority of the Nigiera-Sao Tome and Principe Joint Development Zone have told reporters for Punch, a respected Nigerian daily, that the dispute that left the meeting of the Joint Mnisterial Council last Friday in shambles has been resolved and that Production Sharing Contracts will be signed in two weeks.

The familiar promise of action in a fortnight has characterized the JDZ process for years; Nigerian JDA officials repeatedly tell the press that issues will be resolved and action taken "in two weeks," but for reasons unknown the day never comes. Meanwhile, pumpers use the false information to improve the share price, selling into it as the price climbs.

Here is the Punch article

Monday, February 27 2006

JDZ: Nigeria, Sao Tome disagree

Michael Faloseyi, and Clara Nwachukwu

The signing of the Production Sharing Contract for Block 4 in the Joint Development Zone being operated by Nigeria and its neighbouring Sao Tome and Principe has been suspended.

JDZ sources, told our correspondents that the suspension of the signing of the PSC on Friday, in Abuja, was as a result of “some minor procedural disagreements on the PSC.”

However, the Joint Development Council has settled the matter and rescheduled the signing of the PSC within the next two weeks.

A JDZ source confirmed that a minor disagreement arose because of “a last minute request by the Sao Tome and Principe representatives to approve the PSC before the consortium signed it.

“Their request was not legitimate because the details of the PSC would have been resolved by the JDC. But their request had to be treated diplomatically, and the matter has been resolved amicably.”

Nigeria’s Minister of State for Petroleum Resources, and Chairman of the JDC, Dr. Edmund Daukoru, expressed the government’s displeasure over the delay and asked the Sao Tomeans to apologise for the setback.

He said, “This is not good. It does not send the right signal to the outside world in terms of doing business with the JDZ.

“Nigeria takes no responsibility for this embarrassment. What happened here today would not jeopardise the spirit of the agreement on the JDZ. This is still better than fighting on a piece of land and Nigeria will try its best to implement the treaty.”

The JDZ is jointly operated under a partnership agreement of 60 to 40, in favour of Nigeria.

Friday’s disagreement was caused by the inability of the parties to agree to the terms of the Joint Operating Agreement for Block 4 in the zone.

Representatives of the consortium of oil companies that include Addax, Environmental Remediation Holding Company, Godsonic Oil and Gas, Hercules and Centurion that had gathered for the signing ceremony for the production sharing contract left the venue disappointed.

Block 4 was awarded to the consortium that had a multinational oil company, Noble, as the operator during the 2004 bid round. Noble’s withdrawal had caused the initial controversy until Addax, another member of the consortium, took over as the operator.

A PSC is the document guiding the relationship between the state parties and operators or the oil companies while JOA guides relationships among the oil companies on an oil block and has no direct impact on the state parties.

Not even the explanation by the Nigerian party that Sao Tome and Principe had no business with the JOA could dissuade that country’s representatives from their hard stance, thereby frustrating the signing of the PSC.

Attempts to get the reaction of the Chairman of the Addax Group, Mr. Jean Claude Gandur, who flew in from Geneva for the signing ceremony were rebuffed.

The PUNCH, Monday, February 27, 2006

From The Everglades: JDZ Blowup Wiil Take A Long Time To Repair

I didn't realize when I connected to the audio blog feature that it is limited to five minutes, and that wasn't enough for all that I had to say. I tried to post an addendum, but after first connecting I was unable to do so a second time. I do plan to post another audioblog commentary as soon as the serveers for the audio blog are working again. They still were down on Sunday night as I post this.

This post ends abruptly as I talk about the need for ERHC Energy to pony up more money to satisfy the demands of Sao Tome, possibly sing fundfs from Addax or from Sinopec or Chevron. Nothing else will move this process forward. What we will get instead is another long series of delays.

Thoughts On The Meltdown

It's almost midnight, and I plan to leave soon on a week-long trip that even at this late hour has no destination. I do plan to post as often as I can access wireless hot spots along the route.

I am afraid I have gotten myself into the position of having learned a lot that I cannot share with you directly.

A post from Africa early this afternoon helped me turn around some of the mad optimism I may have engendered when I "advanced" the post about the signing at 4 a.m. Friday morning. I was afraid I'd be asleep and unable to post if, as expected, the Production Sharing contract for Block 4 was signed at 2 p.m. As Kobiashi and many other trusted posters said during the day, the Block 4 PSC seemed to be a "100%" sure thing.

Instead, it was "the axe in the neck" I warned about last week. More on that later. At any rate, I had repeatedly said that we'd be at $0.73 after PSCs, and once again, we are (the last sale was $0.74 and E*Trade shows $0.75, but the closing Bid and Ask were $0.732 x $0.733). That made me feel slightly better.

Given the burden of confidentiality, my 2:15 p.m. post was the best I could do to warn readers that things were not going to turn out as expected. Quite a lot of selling started just then, so I think many got the message.

Unfortunately, I had allowed myself to become widely disparaged due to my earlier post, and I'm afraid not everyone took that later post to heart; a few I-Hub posters treated it as a bad joke.

Like many others, I tried to sell on the Reuters story. That came out at 3:39 p.m., but didn't show up on I-Hub until precious minutes later, and in my rush to preserve some of my gains this time, I didn't get it posted here until 3:59. Of my 70,000 shares offered at market, only 8,200 sold by the close. I cancelled other sales, and had a gain of $3,737 on those and still have $28,000 more in profits to pull down if the situation in Abuja is not quickly turned around. I will probably only realize about $18,000 of that, however, if I do keep my Sell order in the hopper monday morning, which I hate to do.

I have entered a Sell order for all my shares Monday morning, but reserve the right to revise it if good news appears. I expect the share price to open near $0.63 if there is no news.

Many people are trying to put a bright face on the STP demand that they be allowed to review the ERHC/ADDAX Joint Operating Agreement. I think that was spelled out in the Canadian IPO Addax launched two weeks ago, and many noted that those shares were still rising at Friday's Toronto close.

It seems very probable to me that Sao Tome wants that CDN$18 million Addax promised ERHC Energy on completion of the PSC; they may also want any money ChevronTexaco will advance to us (up to the balance) against a possible arrangement with them in Block 2 for the oil already discovered under our Block 2 and their Block 1.

If that were agreed to, while it would put us deeply in debt for a while it might be well worth it in the long run - especially if they discounted the $58 million by the $6 million we paid for initial seismic - and would make for smooth sailing throughout the Joint Development Zone awards and the Sao Tome Exclusive Economic Zone awards to come. While it is a sacrifice and a big one, we are asking that Sao Tome forgo the same amount, and they surely need it more than we do.

Beyond that, if there is a genuine fire - as there certainly seemed to be in the words of Dr. Edmund Daukoru, Nigeria's oil minister and current President of OPEC - it may take time to douse. A lot of feelings were hurt by Mr. SDaukoru's words, even though they were aimed at just a couple of oppositionists on the Sao Tome delegation. They could have been influenced by other players to resist signing, although I think it was probably a purely political play aimed at the upcoming mid-March Sao Tome elections.

If, however, President Olusegun Obasanjo and President Ferdinand de Menezes agree to meet in the next three days and decisively resolve any outstanding issues, as they alone have the power to do under the Abuja Declaration, and particularly if that resolution involves a healthier payment to Sao Tome, the PSC process will be back on track by April, when I have long expected PSCs to be signed.

I must try to convey to you a warning I have received from a source I implicitly trust (even when I cannot believe what I am told, so bizarre have been so many of the developments in this process). Here it is, and mark it well (there's no levity intended): Be very cautious of sourcing, announcements and deadlines, but perhaps not so worried about the overall project.

Lots Of Readers

Not surprisingly, today was an enormously busy day on the blog:

ERHC On The Move
Site Summary (11:27pm EST)

VISITS

Total 87,987
Average Per Day 2,036
Average Visit Length 2:56
Last Hour 83
Today 3,036
This Week 14,254

PAGE VIEWS

Total 123,994
Average Per Day 2,924
Average Per Visit 1.4
Last Hour 146
Today 4,647
This Week 20,468

!

OIL TALKS FAIL

Bad news from Reuters:

Nigeria blasts Sao Tome after failed oil signing

February 24, 2006 15:40:35 (ET)

ABUJA, Feb 24 (Reuters) - Nigeria's Minister of State for Petroleum Edmund Daukoru called Sao Tome a bad business partner on Friday after the African countries failed to sign a long-awaited production sharing contract with oil companies.

Nigeria, Africa's top oil producer, and the tiny twin island nation of Sao Tome and Principe, which has not yet started producing petroleum, have a joint development zone in Gulf of Guinea waters, one of the world's oil exploration hotspots.

"This is very, very embarrassing ... It is not good. It does not send the right signal to the outside world in terms of doing business ... This is not how to do business and Nigeria is not happy about it," Daukoru said after an aborted signing ceremony.

It was not immediately possible to obtain comment from the Sao Tomean authorities, while officials of the Joint Development Authority (JDA), which administers the deepwater area the partners share, declined to comment.

The JDA had been due to sign a production sharing contract for Block 4 with Houston-based ERHC, which is controlled by private Nigerian company Chrome, and its partner Swiss-based energy firm Addax.

Daukoru said the signing fell through at the last minute because the Sao Tomean authorities wanted to further scrutinise the joint operating agreement between ERHC and Addax.

"Whatever the partners do internally is not the business of the state partners (Nigeria and Sao Tome) ... I cannot even quantify the loss in terms of the bad image this has created, even the monetary value," he said.

The block is one of five that were awarded last May after a turbulent five-month delay plagued by disagreements between the countries and accusations of corruption.

The period since the blocks were awarded has been equally turbulent.

The JDA originally said production sharing contracts on all five blocks would be signed in September. But several partners have dropped out of the winning consortia, delaying negotiations.

In addition, more allegations have surfaced that the process of awarding the blocks was tainted by graft, including a critical report by Sao Tome's attorney-general. Daukoru has dismissed that report as internal politics of Sao Tome, which has elections coming up later this year.

As Sao Tome prepares to enter the world of big oil, political tensions have emerged. President Fradique de Menezes survived a coup attempt in 2003 and there have been several high-profile resignations from the government.

As we had predicted some time ago - saying at PSCs the price would be $0.73 - the closing price after hours was $0.732 x $0.733 although the last sale was at $0.74. ERHC On The Move sold 8,200 shares at around $0.745 near the close.

Closing volume for this painful day was 6,228,079.

A Time For Apology, And For Cautious Waiting

ERHC On The Move may have been too optimistic today about the certainty that Production Sharing Contracts would be signed this evening in Abuja.

We apologize to the Nigeria-Sao Tome and Principe Joint Ministerial Council, to the Joint Development Authority, and to our readers for overstating our knowledge and our presumption in reporting beforehand the outcome of today's meeting, which remains unknown.

The contracts were supposed to have been signed at a ceremony that was to begin at 7 p.m., but as of 8:15 p.m. Abuja time there apparently has not been any news from the meeting of the Nigeria-Sao Tome and Principe Joint Ministerial Council meeting.

That does not mean that the PSC for Block 4 will not be signed, whether tonight or in the next couple of days, but it seems somewhat less than a certainty than it did this morning, when your reporter jumped the gun and "advanced" a post on the signing.

In short, investors ought to be prepared for a bit of a letdown, a minor disappointment, and a possible adverse reaction by the market.

Again, it is our certainty that is the problem. The situation in Abuja is reportedly tense, complex, sensitive and delicate. At stake is wealth beyond imagining for any ordinary individual, and a future so bright it may blind some of us to the present.

Again, we merely urge caution, patience, and steadfast support of ERHC Energy in the days to come.

BLOCK 4 IS OURS!

After years of frustration, false starts and delay, the Nigeria-Sao Tome and Principe Joint Ministerial Council will sign Production Sharing Contracts with a consortium led by Addax Petroleum and ERHC Energy this evening covering the much-coveted Block 4 of its Joint Development Zone.

Block 4 is said to have the potential to produce as much as 4 billion barrels of West Africa's sought-after light, sweet crude oil, a reservoir whose value at today's global market prices for crude exceeds $240 billion.

The signing of the contacts by Nigerian and Sao Tomean officials this evening at 1 p.m. EST (7 p.m. in Abuja) will bring to an end nearly three full years of acrimonious debate and controversy over the role of ERHC Energy, which helped Sao Tome create the Joint Development Zone several years ago, that had often threatened to leave the company's rights unperfected and worthless.

For For Sir Emeka Offor, the Nigerian businessman who owns 43 percent of ERHC Energy stock (OTC BB symbol: ERHE), it waill be a day of quiet and cautious celebration. According to a report last night from UpstreamOnline, Offor is in talks with Chevron about allowing them to gain a foothold in ERHC's share of Block 2. ChevronTexaco;s OBO-1 well in Block 1 has apparently struck a huge field near the Block 1/Block 2 border that extends far under ERHC Energy's side of the boundary line. Sources have said the PSC for Block 2 could be signed as early as next week.

Meanwhile, Offor must also conclude PSCs and Joint Operating Agreements with other players in Blocks 3, 5 and 6, and decide whether to partner with Sinopec, ChevronTexaco or even another suitor in Block 2.

But as to Block 4, where Anadarko and ExxonMobil had struggled mightily to wrest our 65 percent equity away, there is certainty at last: Now those priceless rights are ours.

Christians Burn Muslim Corpses In Streets Of Onitsha As Religious Violence In Nigeria Comes To A Halt

The clashes between Christians and Muslims that have taken at least 146 lives in Onitsha, a southern Nigeria town, over the past few days has finally subsided, Reuters reported in a lengthy article this morning.

The Federal Government probably breathed a sigh of relief that the anger sparked by a massacre of Christians and answered by a massacre of Muslims came to an end, with no deaths reported on Thursday.

Here is the Reuters report, which is well worth the long read:

Bodies burned in open after Nigeria riots kill 146

Thu Feb 23, 2006 12:19 PM
By George Esiri

ONITSHA, Nigeria (Reuters) - Christian youths burned the corpses of Muslims on Thursday on the streets of Onitsha in southeastern Nigeria, the city worst hit by religious riots that have killed at least 146 people across the country in five days.

Christian mobs, seeking revenge for the killings of Christians in the north, attacked Muslims with machetes, set fire to them, destroyed their houses and torched mosques in two days of violence in Onitsha, where 93 people died.

"We are very happy that this thing is happening so that the north will learn their lesson," said Anthony Umai, a motorcycle taxi rider, standing close to where Christian youths had piled up the corpses of 10 Muslims and were burning them.

Dozens more corpses had been thrown into the back of pick-up trucks by security services overnight, residents said.

Uncertainty over Nigeria's political future is aggravating regional, ethnic and religious rivalries in Africa's most populous nation and top oil exporter.

Elections are due next year and many Nigerians believe President Olusegun Obasanjo and some state governors will try to stay on after eight years in power. The prospect angers those who want their own ethnic or regional blocs to have their turn.

Militants in the oil-producing Niger Delta have waged a three-month campaign of attacks and kidnappings, which has cut exports and driven up world oil prices. One of their demands is greater control over their region and its resources.

There was no fighting in Onitsha on Thursday but Emeka Umeh, of human rights group the Civil Liberties Organization, called it "the peace of the graveyard".

Some charred corpses were still lying on the streets and hundreds of Muslim men, women and children fled the city crammed into open-top trucks for fear of more killings. Thousands more were hiding in army barracks and police stations.

Umeh said most of the bodies his group counted were Hausa, but some Ibo were killed too. The Hausa are the main ethnic group in northern Nigeria and most are Muslim, while the Ibo are dominant in the southeast and almost all are Christian.

FUNERALS

It is impossible to verify the exact number of deaths but Red Cross figures from all the different cities give a toll of 146. Local authorities decline to give death tolls.

In northern Maiduguri, where the Christian Association of Nigeria says 50 Christians were killed in a weekend riot that began as a protest against cartoons of the Prophet Mohammad, tensions were high during several Christian funeral masses.

The Red Cross said at least 21 people died in Maiduguri and 9,000 were driven from their homes.

A crowd of Christian youths broke away from the burial of one of the victims, a Catholic priest, and ran shouting through the streets before police dispersed them.
At the funeral of 13 children from two families who were burned in their houses, mourners wailed as police stood by.

News of the Maiduguri killings set off the bloodletting in Onitsha, and tit-for-tat violence spread on Wednesday to Enugu, another southeastern city, where seven people were killed.

Nigeria's 140 million people are divided about equally between Muslims in the north and Christians in the south, but sizeable religious minorities live in both regions.
Thousands of people have been killed in religious violence since the restoration of democracy in 1999. Killings in one part of the country often spark reprisals elsewhere.

The triggers for riots that killed at least at least 46 people, mostly Christians, in northern Maiduguri, Bauchi and Katsina, were different, but religious and secular leaders have linked them to political tensions.

In Bauchi, an alleged blasphemy started the trouble, while in Katsina it was a constitutional review that many see as an attempt to keep Obasanjo in power.

The constitution bars Obasanjo, a Christian from the southwest, from seeking a third term in 2007 and he says he will uphold the charter. But he has declined to comment on a powerful movement to amend the constitution to allow him to stay.

Maiduguri and Katsina are both hosting public hearings on constitutional reform this week which many Nigerians believe are geared toward furthering the so-called third term agenda.

(Additional reporting by Estelle Shirbon in Abuja, Ibrahim Mshelizza in Maiduguri and Tume Ahemba in Lagos)

Chevron, ERHC Talking Now As Abuja Readies Block 4 Sigining Today, Other PSCs Next week, Upstream's Morgan Says

Barry Morgan of UpstreamOnline delivered a raft of good news to float the hopes of ERHC Energy investors Thursday night, saying Block 4 will be signed today, other PSCs next week if they're ready, and that Chevron is striving to take the place of Sinopec as our partner in ERHC's Block 2 of the Nigeria-Sao Tome and Principe Joint Development Zone, where Chevron's areported Block 1 oil find apparently intrudes quite deeply.

Overnight, ERHC Energy shares fell on the Frankfurt Exchange for the second straight day. The stock (ERH.F) was down EUR 0.02 (2.86%) after an identical retreat yesterday.

In late trading after the close at $0.60, >, a 3.61% loss, on Thursday, ERHC shares traded as high as $0.83 before falling back to $0.805 in odd trading an hour after the market's regular day ended. In all, more than 6,123,600 shares traded, according to the New York Times.

Many traders who were busy pumping the stock yesterday are preparing to sell into the good news tomorrow, in the Wall Street tradition of "sell on the good news, buy on the bad."

Additional news about the Chevron/ERHC talks, a fixed date announcement for future PSCs at the close of tomnorrow's or next Tuesday's Joint Ministerial Council meeting, or concerning the Block 1 find, however, could cost sellers substantial profits just days or weeks ahead.

While we fully expect a downturn to start tomorrow, we do not believe it will last beyond April. With ERHC's rights perfected, the company is in excellent shape to proceed to far higher levels.

ERHC On The Move also marked a milestone today: per SiteMeter, we now average 2,036 readers a day.

Here is prize-winning oil industry veteran reporter Barry Morgan's latest - but note a correction in the starred (*) text:

Addax to sign West Africa PSC

By Upstream staff

Swiss explorer Addax Petroleum was expected to sign a production sharing contract this week to operate Block 4 in the Joint Development Zone managed by Nigeria and Sao Tome, writes Barry Morgan.

Addax has just completed a $350 million initial public offering on the Toronto Stock Exchange, which will fund its farm-in agreements with ERHC Energy covering blocks 3 and 4.

The Joint Development Authority expects PSCs to be signed for remaining blocks 2, 3, 5 and 6 next week, subject to agreement by Nigeria and Sao Tome.

ERHC has sought a similar deal with Chinese giant Sinopec to lead Block 2* but it is understood that intensified lobbying in recent days by Chevron of ERHC owner, Nigerian business magnate Emeka Offor, could sway the memorandum of understanding for the US supermajor instead.

High-level talks between senior Chevron and ERHC executives continued as Upstream went to press.

Chevron is understood to be interested in Block 2 even at this stage as its Obo-1 wildcat on block 1, just a few kilometers from the Block 2 border, heads for total depth.

The partners are keeping quite on the well's progress but there is talk that both oil and gas have been intersected.

Transocean drillship Deepwater Discovery's bit is now heading out of the upper horizons towards the original reservoir objective and should reach total depth before mid-March.

24 February 2006 00:02 GMT | last updated: 24 February 2006 00:02 GMT

* Due to a typographical error, Block 2 was misidentified as Block 4 in UpstreamOnline editions last night.

Global Alert From Platts' Jacinta Moran: Addax Block 4 Deal To Be Signed Tomorrow; Chevron In Talks With ERHC; Block 1 Find Not Yet Confirmed

In a long piece from Jacinta Moran of Platts, who has apparently cut off tips to Mark St. Amour, there's major news about the goings-on in Blocks 1 and 2 of the Nigeria-Sao Tome and Principe Joint Development Zone, and confirmation at last that while other PSCs will be delayed "a week", the Addax-ERHC Energy contract for Block 4 will be signed tomorrow at an 8am EST ceremony in Abuja.

A Sao Tome "week" is about a month in the rest of the world.

Here is the latest from Jacinta Moran, who has proven to be a very good reporter on these issues:

Sao Tome/Nigeria block 4 partners to sign deal; others postponed

--Platts Global Alert--

Paris (Platts)--22Feb2006/1156 am EST/1656 GMT

Partners in awarded acreage in deepwater block four in the Joint Development Zone (JDZ) managed by Nigeria and Sao Tome and Principe will sign final terms of the Joint Operating Agreement (JOA) before the end of the week, but the signature of contracts for blocks 2, 3, 5, 6 has been postponed.

The meeting on production sharing contracts scheduled for Feb 27-28 of the Nigeria-Sao Tome and Principe Joint Ministerial Council (JMC) will be postponed by a week, Sao Tome's National Petroleum Agency executive director Luis Prazeras told Platts in a telephone interview Wednesday.

"Just this morning, I got the information that the meeting will be postponed but a date has still to be confirmed. We don't know exactly when but it could probably be one week later," he said.

Houston-based ERHC Energy and Swiss-based Addax will, however, sign the JOA for block 4 in Abuja either Thursday or Friday, the first block to be signed in the controversial second round awards, a spokesman for the Joint Development Authority told Platts Wednesday. "They have already agreed the framework; it is ready to be signed either Thursday or Friday," he said.

Winners of the five blocks were announced in May 2005. But the process has been plagued by allegations of corruption, political wrangling that have delayed signing of the agreements. Since the awards, three US independents--Pioneer Natural Resources, Devon Energy and Noble Energy--have quit negotiations.

The JDA earlier this month approved Swiss-based Addax Petroleum's replacement of Noble Energy as ERHC Energy's partner and operator in block 4.

Noble Energy and ERHC Energy last May were awarded the stake after Noble offered a front-end bonus of $57-mil along with a pledge to drill three wells during the first exploration phase of four years while its rival, Anadarko, had offered a much higher bonus of $91-mil, but committed itself to drilling fewer wells over a longer period of time.

CHEVRON SHOWED INTEREST IN TAKING EQUITY IN BLOCK 2

Prazeras also said Chevron had expressed interest in taking equity in block 2 when Pioneer pulled out of negotiations earlier this month but this interest had not been pursued. "Chevron showed some interest in block 2 when Pioneer withdrew. They sent a letter showing interest but I believe they showed no further interest after that," he said.

Industry sources have recently said Chevron has renewed interest in block 2 where China's Sinopec is hoping to take operatorship in partnership with Houston-based preferential rights holder ERHC Energy. Prazeras said the JMC, the bilateral body overseeing the JDZ Authority, has yet to approve Sinopec, which has signed a MoU with ERHC, as a prospective operator of the deepwater block.

"It has not yet been approved. Initially, the meeting that was scheduled for the end of February would have decided approval so Sinopec is still an open decision. Probably in the next JMC, it will be decided," he said.


NO OFFICIAL WORD ON MAJOR CHEVRON FIND IN BLOCK 1

Sao Tome government officials have yet to be be told "officially" if Chevron and ExxonMobil have struck a major find in deepwater block 1 that may also straddle ERHC's block 2 in the Joint Development Zone, Prazeras said.

"We have no official news so the government cannot say, at least, until we hear officially from Chevron. Unofficially, we have information that everything is going very well on block 1," Prazeras said.

Strong indications have emerged in recent days that Chevron has encountered a substantial oil-bearing structure in the exploration well Obo-1 in block 1, the only block awarded in the first licensing round.

Operator Chevron and its partners, ExxonMobil (40%), Dangote-EER and Afren started drilling the 60-day well in mid-January. The block will test the potential of Nigeria and Sao Tome's shared offshore region and has generated considerable interest from global upstream players.

Chevron has a 51% stake in block 1, ExxonMobil 40% and Nigerian Dangote-EER/Afren 9%. The consortium won exploration rights to the block with a $123-mil bid in an October 2003 bidding round.

Some studies suggest the Sao Tome and Principe islands, which gained independence from Portugal in 1975, sit on between 6 and 11-bil bbl of crude.

Under the terms of a treaty signed in 2002, Nigeria, which is already Africa's largest oil producer, will take 60% of all oil and gas revenues. Sao Tome will take 40%.

--Jacinta Moran, jacinta_moran@platts.com

Lusa: Chevron Expected To Announce Block 1 Find

In an article that is focused entirely on other topics, the Portuguese news agency Lusa said today that Chevron is expected to announce what many descrivbe as a major find in its Obo-1 well in Block 1 of the Nigeria-Sao Tome and Principe Joint Development Zone, the nation's oil minister said.

Before the news came, ERHC Energy (OTC BB symbol: ERHE) again turned downward this morning, as it had yesterday, falling from $0.83 to $0.781, but recovered on strong volume of 3,003,845 to $0.83, where it had traded only once yesterday.

A poster whose sources are frequently wrong, Mark St, Amour, said yesterday that the Block 4 Production Sharing Contract had an "80-90%" chance of being signed today, but there is no indication it has been. The Nigeria-DRSTP said two weeks ago the contracts will be signed on Tuesday, Feb. 28.

For some reason, the news agency said the Chevron find - rumored to be a huge one that straddles Block 1 and Block 2 - is expected to be "announced in late March," far later than it probably will be. The find has already been widely discussed on by tipsters first on ERHC On The Move, and on message boards, in UpstreamOnline and the Guardian, Britain's august daily.

Lusa has a strong aversion to ERHC Energy and to Sao Tome's participation in the awarwds that colors most of its otherwise solid coverage:

STP News: Lusa says Chevron expected to announce B-1 find late March

US helps polish journalists for elections, oil sector coverage

Sao Tome, Feb. 23 (Lusa) - More than 20 Sao Tome and Principe journalists will participate next week in a US-sponsored seminar on media coverage of elections and oil-related issues, an island organizer said Thursday.

The president of the STP chapter of the Association for Media Development in Africa, Maximino Carlos, told Lusa the five-day event would be led by Columbia University Professor Cristina Katsouris, a specialist in political and oil affairs.

"The initiative aims to prepare journalists and technicians in the coverage of issues related to oil and elections, along with journalistic ethics", Carlos said.

The islanders go to the polls for legislative elections March 26 and face three other rounds at the polls later this year, including a presidential poll.

US oil company ChevronTexaco is also expected to announce in late March its first oil find in the offshore Joint Development Zone shared by STP and Nigeria.

On Wednesday, the STP National Petroleum Agency (ANP) launched its first publication, with the agency's president, Luís dos Prazeres, saying authorities had a duty to "form and inform" the public about oil-related issues.

"Considering the importance the print media is gaining in the country, we think it pertinent to add one more instrument of communication to those that already exist", dos Prazeres said of the ANP's quarterly publication.

We're Off To The Turtle Races

In a day of erratic trading that has cut the share price by a few cents, the big news might have been that the Sao Tome's oil minister Deolindo da Costa confirmed to the Portuguese news agency Lusa that ERHC Energy's new partner, Addax Petroleum, has indeed been approved as operator for Block 4 of the Nigeria-Sao Tome and Principe Joint Development Zone.
Or it might have been that, according to a poster whose sources are usually wrong, that the PSC for Block 4 will be signed with Addax and ERHC tomorrow - at least that was "tentatively" scheduled to happen, Mark St, Amour said, just before a new wave of selling began.

But as the share price fluttered back and forth like a nervous butterfly between the high $0.70s and the low $0.80s, the really big news of a possible Block 1 Chevron strike on its OBO-1 well near the boundary with ERHC Energy's Block 2, and the rumors that most of the oil Chevron discovered is in our block, not theirs, remains unconfirmed - by Chevron and ERHC Energy, anyway, since everyone from the drilling rig workers at Chevron to UpstreamOnline's Barry Morgan and Britain's The Guardian have indicated the strike is real.

At 2:51pm Wednesday, volume reached 3,823,584, substantially lighter than yesterday's record-setting 16 million but about two times the 10-day daily average, and the Bid and Ask were $0.80 x $0.805, and there was confusion among investors prompted by a series of posts from an Abuja hotel worker named Meridian (or is that Mongo?) that stated unequivocally that the talks between the two rumored last week are in fact not occurring.

The best information available remains that the coveted Block 4 PSC will be signed next Tuesday, and that Chevron has indeed struck "big oil" that may cross under Block 2 in the JDZ, and that our people and their people - and probably Sinopec's people - are talking.

Whether that assurance is enough to support the share price until confirmation or denial of the strike and the talks can be received from the companies involved is anyone's guess.

But that Block 4's signing is an enormous coup for the company, and that it has rremendous potential, is undeniable. It's going to take time for things to work out, though, so for now we're off to the turtle races.

First Shot In The Bidding War? Discouraging Posts On I-Hub Had Hidden Agenda

Until he slipped up, the new I-Hub poster Meridian - who claims to be in Abuja and says that ERHC and Chevron are not talking, after all - nearly had me fooled. I detected a cultured African flavor in his syntax and believed he might be telling the truth. It almost seemed that he and new ERHC Energy CEO Walter Brandhuber were staying in the same hotel.

That may be in part due to the odd spelling of "Meridian" - not to be confused with the Le Meridien chain. The Meridian is a 400-room luxury hotel in Abuja, 68 percent owned by the government, where Meridian likely works. The basher Mongo, as many posters will recall, likes to say that ERHC investors get their information from a hotel desk clerk.

What gave him away was a seemingly off-handed comment about Exxon and Chevron "passing millions through Good Works" to Nigerians.

What was implied there was not obvious to most readers, I think. The suggestion in those words is that former U.S. Ambssador to Nigeria Ambassador Howard Jeter, who heads the Goodworks foundation in Washington, was serving as a conduit to government officials and perhaps our own management for funds that are meant to be kept out of sight of stockholders and government reglators - bribes, in other words.

Ambassador Jeter, of course, is one of the two latest additions to the ERHC Energy Board of Directors. And he is a man of great probity who brings enormous good will to our Nigerian partnership and to Africa in general. The attempt to slander him is in keeping with the vicious attacks this company has suffered for more than two years.

What looked at first like an honest statement trying to knock down the unconfirmed talks between ERHC and Chevron was in reality a well-disguised torpedo aimed at sinking our ship - possibly on behalf of Sinopec or another suitor.

It may, in fact, be the first shot fired in the bidding war some believe will develop over ERHC Energy's now-precious rights in Block 2, where much of the oil reserve that Chevron discovered near the midline of Block 1 and Block 2 apparently lies. It was a crafty piece of work.

ERHC is going to be a target for some very smart machers in the days to come. Beware the innocent, the deluded, the naive, the malicious and the deceptive; we'll do our best to help.

Meanwhile, on the Frankfurt Exchange, ERH.F, their symbol for ERHC Energy, was at US$0.8585 and EUR $0.72 on regular volume of 13,200 shares at 11:54pm Tuesday night. That's a $0.025 improvement over the U.S. OTC close. The rate of conversion I'm using is 1.1924.

As befits record-setting day of volume, ERHC On The Move set a recent record for unique visitors today (as of 11:28PM est):

VISITS

Total 80,054
Average Per Day 1,764
Average Visit Length 2:56
Last Hour 83
Today 2,835
This Week 12,349

PAGE VIEWS

Total 112,155
Average Per Day 2,540
Average Per Visit 1.4
Last Hour 127
Today 4,284
This Week 17,783

And, on a personal note, the day trader named Manti
on I-Hub deliberately attributed to me a statement that Addax had already paid ERHC Energy the CDN$18 million due us under the MOU. Being ignorant, he failed to read the post in question well, which says that the money - as the IPO states - "will fund" the payment. Morons like Manti, who also believes I sold him shares on the cheap - which I did not - give I-Hub a bad name.

WOW! ERHE Hits $0.87, Up 20% In Pre-Market Trades, Opens At $0.835' At 1:40pm, Volume Sets Record High at 14 Million Shares

Heating up is hardly the word for the $0.15, 20-percent gain in pre-market trades this morning of ERHC Energy (OTC BB symbol: ERHE), which finally opened at $0.835 and hit a million shares of volume in the first minute.


Price Updates

At 9:33am, with 1.26 million shares sold, the price was $0.848.
By 10:16, just 43 minutes later, more than 6,431,000 shares had traded and the price, which has been fluctuating in a five-cent range, was $0.811 x 0.811.
At 10:50am, 8,334,000 shares had traded and the price is $0.82 x $0.829.
At 11:42am, volume is 10,074,000 shares and the price was $0.835, with Bid and Ask $0.827 x $0.83.
At 11:51am, a single block of 285,000 traded at $0.84, volume was 19,575,0000 and the price is $0.835 x $0.84.
At 1:02pm, 13,609,000 shares have traded - close to a record - and the price is sinking. It's now at $0.78 x $0.785.
At 1:42pm, volume is at a new all-time high at 14,066,000 shares, and the price is $0.801 x $0.804.

At 4pm, regular trading closed at $0.82 and after-market orders took it up a cent further, to $0.83. Ending volume was an extraordinary, record-setting 16,309,591 shares.

The stock is high on the recommended list of any number of Wall Street tip sheets this morning after word leaked that Chevron apparently struck oil that runs under ERHC's Block 2 in the Nigeria-Sao Tome Joint Development Zone. That means we may have provable reserves without ever having to drill for oil!

Sellers quickly jumped in and took the price down to $0.835 before the open, unloading 132,500 shares. That gave the appearance that all-capital-letter pumpers who have arrived en masse at I-Hub - many with creative resumes a la Nigerian advance fee letters - are selling into the gains.

Only 45,000 shares traded before 9am in 9 trades, which included one sale at $0.79, and reached $0.82. Imediately after 9am, though, the price jumped another $0.05 to $0.87, on total volume of 128,500 shares.

The prospects for a $1 stock have never seemed so bright!

Britain's Guardian: Reports Of Chevron Strike In Block 1 Boost Afren

Britain's venerable Guardian - not to be confused with the Nigerian publication of the same name - is alerting investors tomorrow in Neil Hume's well-read "Market forces" finance column that they should "keep an eye on Afren," the partner of Dangote EER in Block 1 of the Nigeria-Sao Tome and Principe Joint Development Zone that stands to profit handsomely from any oil strike in that block, where Chervon is the operator and is partnered with ExxonMobil.

This particular mention is the first in the mainstream press of Chevron's rumored strike, which ERHC On The Move first reported last Tuesday. Since that time, the very reliable Mutwadadi has also confirmed a strike.

Here is the comment from the Guardian's Tuesday morning editions:

Finally, keep an eye on Afren, an oil exploration company focused on west Africa. Its shares gained 4.25p to 66.25p, excited by reports that Chevron has encountered a substantial oil-bearing structure during drilling at the Obo-1 exploration well in Block 1 of the Nigeria-Sao Tome joint development zone. Afren owns a 4.4% stake in the block.

It's the last item in the column, so a lot of readers will have it first on their mind when they log into their trading accounts.

Again, we caution that neither ERHC Energy (OTC BB symnbol: ERHE) or Chevron has not confirmed a strike nor any talks betwen the two firms.

Disclosure: I own 72,000 shares of ERHE and wil probably sell at least 1,000 shares today for personal needs. My family also owns a substantial stake in ChevronTexaco.

Mutwadadi Offers Confirmaion On Block 1 & 2 Issues

Mutwadadi, who has been the best source anyone has in Africa with respect to the Nigeria-Sao Tome and Principe Joint Development Zone, has written ERHC On The Move to confirm much of what we have reported concerning Blocks 1 and 2.
Without further ado, here's his note:

dear joe

a lot of the indications of the goings-on you have reported recently are correct. there are very good signs from block 1. the area of interest looks like it may indeed spread significantly into block 2. the news is already leaking and will have to be confirmed sooner rather than later. there is in prospect a contest for operatorship between at least two very big players. all parties are confident on pscs at least for blocks 3 and 4 will be signed off by the jmc as scheduled. block 2 may prove a little longer as parties jockey for position.

mutwa

What I Was Thinking Before I Heard From Mutwadadi

ERHC Soars 17%, Or $0.09, On Franfurt Exchange Overnight; US Markets Closed For Holiday

Yahoo reports this morning (American time) that ERHC Energy shares on the Frankfurt Exchange (Frankfurt symbol: ERH.F; US OTC BB symbol: ERHE)) soared EUR 0.09, or 17 percent, to EUR 0.62 on much lighter than normal volume of just 800 shares Monday morning, while the American markets were closed for Presidents Day.

With such thinly-traded issues, however, it is difficult to tell whether the higher price was due to a desire to equalize the value of the stock in Euros relative to American dollars or reflected a hefty increase over the relative price of American shares, which closed in extended hours trading Friday at $0.725.

The stock opened in Frankfurt at EUR 0.40 on Feb. 13 and has risen sharply since. At the current rate of exchange, the stock - which is denominated in Euros on the Frankfurt Exchange - closed up $0.015 over Friday's U.S. close at $0.7407.

By that standard, the Franfurt performance was disappointing if it reflects what may happen on Tuesday here. Volume in ERH.F shares averages 13,000-plus per day, and the low volume may be attributed to a wait-and-see attitude in Germany.

The stock was set up on the Xetra trading system - an equivalent of our Archipelago - on May 20, 2005. Its equivalent of a CUSIP number is ERHC ENERGY INC.-ERH-US26884J1043-NAM6.

Tipster, An Ex-Pioneer Employee, Re-Confirms 'Midline' Chevron Find; Sinopec Probably Out, He Says, While New Interest Pours In

Workers on the Chevron platform in the Gulf of Guinea's Nigeria-Sao Tome and Principe Joint Development Zone, where the American giant is drilling the JDZ's very first well in Block 1, have told a recently dismissed Pioneer Natural Resources employee that the company has indeed made a large strike near its boundary with ERHC Energy's Block 2.

The tipster, who early last week told us of a $3-per-share offer by Pioneer, responded to our list of things that could go wrong (see "Fat Tuesday? Maybe Not"), also says Sinopec may be out of the block due to China's inability to act quickly, and that the $3-a-share offer by Pioneer has also fallen flat - while a host of new offers are being made.

Here is his point-by-point refutation of my last post:

JOE, The oil is there, for real, big time, unknown quainities of course are yet determined and more interest is coming in from large international players for ERHE interest and buyin interest.Chevron platform workers state high porisity of O&G close to B#2 midline dill area between B 1&2.

JOE, None are withdrawing, yet more are inquisitive. Sinopec likely out due to time frames, other interest dropping big dimes

JOE, That`s always a factor, but less so going forward. My noise says a lot will be settled on the 28th and our game interest played out at a later date, early March.

My Company Pioneer has fully droped out of any play due to cost factors so that $3.00 figure is now null and void. Stay pat or buy more, i`ll be in for another 200,000 market Tues