What A Wonderful Week It Was

Well, we're up 100 percent in the past week, surpassing the expectations of even the most ardent and vocal longs. Why did it happen, and what does it mean?

First, it means that Sir Emeka Offor can exercise his option to buy 1,000,000 shares at $0.25 he`was granted last year and make $270,000 doing so at Friday's closing price. That ought to put him a good mood next week. Then there's 5,250,000 shares that were issued to Feltang International for its help in securing the Sinopec tie-up after we'd lost several of our earlier drilling partners. That's $2,730,000 for them, whoever they are. And SEO's net worth, based on 303,000,000 shares, rose $82,000,000.

Beyond that, hundreds of shareholders suddenly found themselves once again in the black. That would have been $22,000 and change - not a bad haul for one week - had I stayed in, but I sold all but 100 shares at my wife's urging at $0.29. I've been talking to her about that.

But to me, the most important accomplishment of this wonderful week for investors was the cushion we've given ourselves against any indictments that may come down from the Federal Grand Jury in Houston that is looking into bribery claims proffered by the Attorney General of Sao Tome & Principe, the love child of R. Dobie Langenkamp and George Soros, the billionaire formerly allied with our onetime partner, Pioneer Natural Resources, and God knows who else.

If the indictments come down now, they would surely drive the price down, too - but maybe just to $0.25 or so, and that fall would probably be followed by a very quick rebound. I don't see how even a conviction could do lasting harm, unless they allowed a character clause in the JDZ agreement (and there is one) to be exercised, so that our concession rights return to the JDZ for resale.

But as there is evidently (!) no evidence for a conviction, and probably not even for an indictment. or even the protracted investigation that began a year ago Tuesday with the raid on our Houston offices, I expect the SEC to seek a fine in the $300,000 range that would not require an admission of guilt. I think ERHC, even if innocent of the charges, wouild probably accept that to make it all go away before drilling.

My hunch is that if the indictments come down at all, it will be soon. I'm not sure what the term of the jury is, but if it is the standard year, they will happen soon if at all. We need to call the U.S. District Clerk of the Court next week and see what's shaking with that.

In fact, it's possible that our attorneys have learned on the QT that indictments are unlikely and signaled the company. The company couldn't say that in a press release until it's officially cleared or indicted, and I'm not sure how word would spread to other shareholders who want to see the price rise. It could, though, I suppose.

But let's do some guessing. I can't see the steady march from $0.22 to to $0.52 occurring as it has without a powerful driver. I did give it a good write-up in The American Reporter, and some very, very wealthy and powerful people do read our paper around the world, not only from Europe but places like Iran, Syria, China and Russia, where people likely to know about the paper are also likely to be well-heeled.

On top of that, I have made some pretty strong points in recent weeks that riled a lot of investors who misread it, as when I said it was time to sell your shares - if you want to get screwed in a hurry out of a much better price. That seemed to have the effect of locking down the share price around $0.22 for a week or so, so it didn't fall back to $0.18 or $0.19 as it had repeatedly done for months and months earlier. This bloh currently averages 410 readers per day, according to Site Meter.

Then came balance_builder's report on the whiteboard that seemed to show the outlines of a future deal. Both the p.r. man who writes for ERHC Energy, Dan Keeney, and the company in the CEO's Update tried to knock the rumor cold, but the excitement was then exacerbated by an Addax presentation that seems to show a vast amount of oil waiting for us in Block 4. The whiteboard was an iomportant catalyst, as was the seismic from Addax of the Kina formation under Block 4 of the Nigeria-Sao Tome & Pirncipe Joint Development Zone..

Finally, the company repeated its guidance that there would likely be drilling in the fourth quarter of 2008, which - especially from the viewpoint of people who have held the stock for five years or more - is not very long to wait.

Well, that's the big picture. Drilling is a few months ahead, the seismics look terrific, the indictments haven't come and now the penny traders are pouring in over the transom. Can we go to $1.00?

Maybe.