$0.33 Close Marks Beginning Of Buying Spree

Given all the risks that an investment in ERHC Energy entails - and the company is frank about them in every one of its SEC filings - the risk/reward ratio reached parity Friday at $0.33, I believe. It's time for a modest buying spree to begin, and I believe investors can look forward a price in the low $0.40s very soon.

While I still plan a major investment in ERHE (OTC BB), I get antsy when I have to pay very much to buy into a stock that is facing two federal indictments for Foreign Corrupt Practices Act violations and for SEC violations that if handed down are likely to allege major fraud.

I have said on quite a few occasions that I don't believe the evidence is there to support an indictment in the bribery matter because the government of Nigeria is not cooperating in the probe; I think the SEC indictment has a better chance, since someone - probably the big players we all know - almost certainly were manipulating the stock through nominees (I don't use the term in its formal sense here) on I-Hub's ERHC Energy board and Raging Bull's ERHE board.

Anywhere between $0.28 and $0.33 is a great place to buy this stock, I believe. That takes into account my own belief that momentarily, in the event of an indictment, the share price may well fal to $0.18. But you'll hasve to have ready cash and be fast on the trigger to buy it there.

Once the indictments are handed down, if they ever are, the issues then becomes a known and manageable set of facts that will entail a finite amount of risk for the possibility of substantial reward when drilling begins in 2008. I feel like I would like to have 200,000 shares by then, but that's just a pipe dream today.

It's heartening in some ways (and I know it must be painful for some investors, who paid too much at some point) to see a decent bottom for this stock, and to be able to look forward not only to a major buying opportunity if the indictments arrive, but for a modest one now that the risk has been subtracted from the price.

A caveat, however: any investor wanting to get in for a substantial block of shares should ask themselves how long they are willing to sit on their investment, waiting for an oil strike in the Gulf of Guinea. If the same money might be used for other plays (like FSTR or CUP, if you're looking), it may not be available for a year or so.