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Yep, and based on the gas kick, I still don't believe reports that poo-poo the JDZ, particularly Kina. - LT
'At times, the drill got stuck. Many times, it "kicked," meaning gas was shooting back through the mud at an alarming rate.'
'"I've seen a lot of gas coming up from muds on different wells, and the highest I've ever seen in my 11 years was 1,500 units. And this well gave us 3,000," Brown said. "I've never been on a well with that high of gas coming out of the mud. That was kind of letting me know this well was something to be reckoned with."'
- from CNN's interview of oil rig workers regarding the Macondo oil well
Reading this reminded me of what Africa Oil and Gas reported about the Kina-1 well:
17/09/2009 - Addax hits JDZ drilling problem (Africa Oil and Gas) - 128 (aog v12-19 17september-text____0029)
The firm is using Transocean's Deepwater Pathfinder to drill the Kina well on Block 4. However, AOG has learnt that the company became concerned about a blowout due to high gas pressure last week - 10 days after spudding - and decided it had to start the well again.
Just a reminder of upcoming events that are either imminent or on the horizon:
1. 2 signature-bonus-free EEZ blocks obtained by ERHC. - DONE
2. JDZ Drilling results revealed.
3. Total's possible buyout of Chevron's Block 1 interest (as reported by Dow Jones and Tela Non).
4. Phase II exploration commitment for Blocks 2, 3, & 4 announced (by September 14).
5. Drillship contract announcement by JDZ operators. (Remember the Block 1 consortium must complete their Phase II well commitment by 2/1/2011, so they only have about 8 months left to get a drillship & drill a hole--if they have not gotten an extension.)
6. EEZ block farm-out MOUs/PSCs signed w/more $$$ headed to ERHC's coffers.
7. Execution of ERHC's AIM subsidiary IPO.
8. Participation in Nigerian marginal oil fields.
- Longtimer
hetherb, I've read articles (already posted on this board) that spoke of disppointment over the initial results from AKPO and that it was not going to be as large as they thought it was going to be.
Would you mind posting what you have read? Thx - LT
We'll soon know who the "international E&P operator" is that is going to take delivery of the deepwater drillship West Gemini in West Africa. Will it be Sinopec?! The secrecy has the earmark of the Chinese. - LT
"Seadrill has received a letter of award from an international E&P operator for the ultra-deepwater drillship West Gemini under construction. The letter of award represents a two-year contract with an estimated contract value of approximately US $345 million, including mobilization fee. Furthermore, the operator has the right to extend the contract for an additional year at a similar dayrate. West Gemini is expected to be completed early July 2010 and will subsequently relocate from Korea to West Africa to commence operations under the two-year contract."
http://www.rigzone.com/news/article.asp?a_id=87418 (February 12, 2010)
"The next expected delivery is the drillship West Gemini to leave the Samsung yard for West Africa in July on-time and at original cost."
http://seekingalpha.com/article/207355-seadrill-limited-q1-2010-earnings-call-transcript?page=-1 (May 27, 2010)
Anyone know how much it would cost to shoot more detailed 2D seismic across ERHC's EEZ Block 4? How about 3D? And ditto for Block 11? - LT
"In turn Philip Dimmock, Director of Equator Exploration, assured full availability of the company to pay the bonus for signing set for each block. "The Equator has money available to pay the signature bonus and has the financial capacity to fund the work on acquisition of seismic data and additional information about the blocks' needed."
You've got that right!
Umbra, was this something that VQ was reported as saying, or did you hear it directly from him? - LT
I certainly have no delusions in that regard. In any case, both Troy and myself independently verified this; believe what you want.
As far as his presence here... He was interested in setting the facts straight. Hopefully in the future he might grace us with helpful information that would not be a breach of confidentially; but I have no indication that he plans to do that. - LT
ERHC has proven, agree with you on both points. (Sorry, have no PMing)
So far, that makes at least three different IHub posters (you, me, and Umbra) that have contacted him. I do hope discretion is being used. - LT
Yes, that is true Gremlin, but read my message carefully:
Posted by: ERHClongtimer
Date: Monday, May 31, 2010 12:00:44 PM
In reply to: ERHClongtimer who wrote msg# 215670
Poster VBQuerio PE is who he says he is. I have confirmed this by direct e-mail contact. - Longtimer
The response I received was from his Addax e-mail address. So I have no doubt he is who he claims to be. Whether he will post again on this forum is another story. May depend on how civil and respectful of his confidentially we are.
Digdeep... don't see how making a personal post on a public forum would violate company policy unless it breached confidentiality.
- Longtimer
Poster VBQuerio PE is who he says he is. I have confirmed this by direct e-mail contact. - Longtimer
http://investorshub.advfn.com/boards/profile.asp?user=205655
I'm working on it. We'll see who's who.
Umbra (or anyone else) did you send Vince a link to the ERHE IHub board? Can't imagine he searched it on his on initiative. - LT
Maybe this is the reason there seems to be bit of an urgency to get the AIM listing or other deal done.
They need money to participate in the Nigerian marginal fields bid. - LT
Hi Umbra, thanks for passing along the response from Vance Querio (and thanks to farrell90 as well).
I'm not sure about the nuances of the King's English, but in American English we would invariably say, "To my knowledge Total does not currently have any interest in JDZ Block 1, 2, 3 or 4" to convey the idea that Total isn't interested in the JDZ.
Since Mr. Querio is from America, when he said, "To my knowledge Total does not currently possess any interest in JDZ Block 1, 2, 3 or 4," he has to mean Total does not currently hold any interests in the JDZ (as petemantx, farrell90, & YankeMike have expressed).
Incidentally, here is a little background info on Mr. Querio:
Vance Querio, Engineering G&G Support Manager, Addax Petroleum
Vance Querio has many years of professional experience working with unconventional resources, coal bed methane and shale gas. He worked with Chevron for many years, before he recently undertook his own development project in Wyoming, turning an abandoned depleted gas field into a viable investment for venture capitalists. - Oil & Gas Exchange 2006
Source
Who has skin in the game...
http://data.cnbc.com/quotes/erhe/tab/8
Thought today's update was about as positive as management could be in view of current circumstances:
"With the authorization of the operators, ERHC has released preliminary findings that biogenic methane gas was discovered across all three Blocks."
I think some have forgotten that ERHC's hands are tied as to what info they can release, and that the operator is Chinese. I still think the eager disclosure of biogenic gas is a strategic move on the part of Sinopec to downplay the potential of the JDZ. If it helps Total acquire more JDZ interests, I say the more power to them.
"There seems to have been a little confusion about these preliminary findings and I want to be clear that ERHC management is as excited about what we have accomplished as we were several months ago. It is not unusual for initial oil and gas exploration in a previously unexplored area to have surprising findings that prompt questions about existing models. The challenge is to use those findings to guide future drilling decisions and maximize the likelihood of success."
Sounds like Peter is saying, "I am still as enthused about the prospects of the JDZ as I was in the video interview conducted by Dan Keeney."
"That said, I must continue to caution that offshore exploration, especially in deepwater, is a long and involving process."
Those on this board that haven't come to grips with this statement or don't accept it should consider selling their shares.
"The Joint Development Authority has granted the operators of all three Blocks a 6-month extension to Exploration Phase I. That means we and our partners have until mid-September to determine how to proceed. Specifically, the operators are focusing on the following five tasks:
1. Further examine the controlling elements in the hydrocarbon accumulation based on seismic data and drilled well data;
2. Re-evaluate geologic conditions for petroleum accumulation;
3. Estimate resources of undrilled traps and evaluate drillable trap(s);
4. Analyze economic feasibility of developing the oil/gas reservoir; and
5. Propose the way forward."
As has been commented on already, the inclusion of oil in this statement is encouraging. We are still only in the first inning of exploration. - Longtimer
Pete, did they say this at the SHM?:
"Finally, it is important to caution again about rumors concerning ERHC Energy and the Company’s various initiatives. We have heard reports from inauthentic sources that are apparently designed to contradict some of the information released by the Company. These reports are inaccurate and seem to be intended to cause doubt and suspicion." - from today's update from Peter.
We've had plenty of that on this board. - LT
Good job putting the pieces together, Farrell. - LT
Just a word of caution; Total has its fingers in a number of deepwater blocks off the coast of Nigeria, as shown below.
So they have a lot of deepwater blocks in which they could spend that $7 billion for expanding its deep off-shore exploration for oil and gas. It certainly is a plus that they are focused on deep water. Hopefully by September we will see if some of that $7 billion is earmarked for the JDZ. - Longtimer
FRAMEWORK OF TOTAL’S ACTIVITIES IN NIGERIA
TOTAL is present in Nigeria through its main subsidiary Total Exploration & Production Nigeria Limited since 1962.
This company has participating interests in most of the licenses allocated. TOTAL is also present through TOTAL
Upstream Nigeria Limited (a 100% subsidiary) and Nigeria LNG Limited (TOTAL’s interests up to 15%).
The other TOTAL subsidiaries are:
1. TOTAL Exploration Nigeria Limited (TEN).
2. TOTAL Petroleum Nigeria Limited.
3. TOTAL E&P Nigeria Deepwater A Limited (TEPNDAL), OPL 221.
4. TOTAL E&P Nigeria Deepwater B Limited (TEPNDBL), OPL 247.
5. TOTAL E&P Nigeria Deepwater C Limited (TEPNDCL), OPL 223.
6. TOTAL E&P Nigeria Deepwater D Limited (TEPNDDL), OPL 215.
7. TOTAL E&P Nigeria Deepwater E Limited (TEPNDEL), OPL 222 (2nd OML 139).
8. TOTAL E&P Nigeria Deepwater F Limited (TEPNDFL), OPL 279.
9. TOTAL E&P Nigeria Deepwater G Limited (TEPNDGL), OPL 285.
10. TOTAL E&P Nigeria Deepwater H Limited (TEPNDHL), OPL 257.
11. TOTAL LNG Nigeria Limited (Nigeria LNG Limited shareholder).
12. TOTAL E&P Nigeria Limited (TEPNG), Operators of the NNPC/TEPNG JV and OML 138.
The exploration mining title granted by the State is named OPL, i.e. “Oil Prospective License”, and becomes an “OML”
(“Oil Mining Lease”) when the State authorizes the oil exploitation, which includes the development and production phases.
TOTAL is involved in 59 licenses, 10 of which are operated by TOTAL and 49 non-operated.
Balance, very interesting dot connecting.
I do expect ERHC to come up with some pleasantly surprising arrangements in regard to the EEZ, just as happened with the JDZ. There is potential for some great news in the next 4-5 months. - Longtimer
"Prazeres has said that stable income from oil revenues for the country could be expected within five to six years."
This statement is taken from Kingpin's posted article - http://investorshub.advfn.com/boards/read_msg.aspx?message_id=50360477
Here's the entire paragraph:
"In addition to its EEZ, the archipelagic nation has a 40% interest in the Joint Development Zone (JDZ) it shares with neighbouring Nigeria, but has so far struggled to develop a domestic oil industry. Prazeres has said that stable income from oil revenues for the country could be expected within five to six years. BMI views this timeline as optimistic given how underdeveloped the industry is and the delays and setbacks that have so far hindered development*, but does see longer-term potential given the country's location in the oil-rich Gulf of Guinea. If, however, the round attracts large well-capitalised IOCs into the country's nascent oil industry, development could move quickly. The country had hoped to begin production from its EEZ in 2011, but drilling efforts in 2003 and 2007 failed to yield commercial production opportunities." - BMI Middle East and Africa Oil and Gas Insights
*BMI (Business Monitor International Ltd) may have overlooked the fact that Prazeres was likely referring to oil revenues coming to STP from the JDZ, not the EEZ, in 5-6 years. Prazeres is painfully aware of how long things take in the oil patch, given STP's experience with the JDZ. So I seriously doubt he is expecting revenues from the EEZ within 5-6 years.
How could Prazeres make such a confident statement about an area (the EEZ) which hasn't been drilled yet or even has 3D seismic shot? However he could say that with confidence knowing positive results from the JDZ. Sounds commercial to me. - Longtimer
Very interesting find, Kingpin! - Longtimer
Tap, he already does his own "DD". Have you ever heard of Debbie Downer. :) - LT
http://www.hulu.com/watch/68225/saturday-night-live-debbie-downer
Balance, a buyout deal before the expiration of the low capital gains tax at the end of the year would be nice. But I don't see how we could get a fair valuation for our shares without further exploration to prove up the extent of what lies in the JDZ. I don't see that happening before the end of the year.
In the long run, the value of the offer we get pre-Phase II drilling may be far less than post-Phase II drilling (assuming successful hits) even with higher capital gains taxes factored in. This, of course, is stated from a US-centric point of view.
As much as I would like to see a tangible return soon on my investment (12+ years now), I am willing to wait a year or two longer to see that return maximized. - Longtimer
P.S.: Great summarization of facts in your post. I Totally agree that something is afoot in the JDZ, and that one major reason for the delay of Phase II is to get all the pieces into place.
ERHC should make Blair COO.
The thought has definitely crossed my mind. I really doubt I can get any specifics, but I do have an idea of something to try. - LT
He also made this remark:
Thanks for checking ... you are obviously aware that the Nigerian media does not always exercise what some of us would consider due diligence.
Not news to us, but a good thing to keep in mind. - Longtimer
Straight from the horse's (Addax's) mouth...
I sent the following to Vance Querio of Addax:
---------------------------------------------------------------------
From: xxxxxxxxxxxxxxx
Sent: Thu 5/06/10 4:41 PM
To: vance.querio@addaxpetroleum.com
Dear Mr. Querio,
I am an independent investor. I read the following quote from the article "Addax Petroleum pays N900bn to FG" in The Punch, a Nigeria newspaper, dated today, May 6th:
"Addax Nigeria‘s Managing Director, Mr. Vance Querio, who disclosed this in Houston, Texas, United States on Wednesday, also said the company invested $5bn in the Nigerian oil industry within the period. ... He added that Addax Petroleum was partnering with Nigerian companies in seven out of nine contract areas in the Joint Development Zone between Nigeria and Sao-Tome and Principe."
I just wanted to make sure you were quoted correctly in this article. Would you be so kind as to verify that Addax has taken up interests in seven of the blocks in the JDZ? Your response would be greatly appreciated.
Best regards,
xxxxxxxxxxxxxxx
His reply was:
---------------------------------------------------------------------
Re: Addax JDZ interests?
From: Vance.Querio@addaxpetroleum.com
Sent: Fri 5/07/10 5:20 AM
To: xxxxxxxxxxxxxxx
I was misquoted. What I was pointing out was that we have indigenous partners in seven out of nine interests in "Nigeria and the JDZ." Those being OPL 227, OPL291 and Okwok in Nigeria, along with the four Blocks in the JDZ.
...
---------------------------------------------------------------------
THE MORAL OF THIS STORY: We should try to verify any information coming out of the Nigerian press (or really from any news source) with the original source if possible before we give it a lot of credence. - Longtimer
P.S.: See my next post for more on this.
I have e-mailed Addax to see if they will verify Mr. Querio's quote from The Punch. It's a long shot, but let's see if they reply.
It is interesting that the remaining three unconsummated block interests that ERHC has, added to Addax's current interests, would give Addax a total of seven blocks. And they did get the total number of blocks (9) currently delineated in the JDZ correct. - LT
Thx, HP!
Kobi, just saw your reply. I agree, ERHC was passing along what they could pass along.
I feel the same way; not going to get all worked up at this stage of the game by what was or was not released at the ASM. By all accounts, ERHC management is still positive and confident of our JDZ interests. - Longtimer
Peter, that's the impression I got from your and others' ASM posts -- that ERHC management was very positive and confident regarding the JDZ.
Shouldn't we be too?! - Longtimer
P.S.: These comments are not directed to you particularly, just a reminder to those who seem to be getting nervous over the recent decline in share price.
Sorry, I meant Peter (not Rep). - LT
RKT, good reminders! - LT
Strategy, excellent reminders for those on the marooned spaceship. (See post immediately to this one for context.) - LT
Thanks, Rep.
Sometimes this board reminds me of one of those scifi movies in which a group of people are marooned on a spaceship, cut off from the outside world, and they become so paranoid that they end up killing one another.
Except in this case they are figuratively killing ERHC. - LT
Kobi, I completely agree.
People here still just don't get it in regard to oil exploration. We are still early in the game, still in the first inning as far as exploration goes. It takes time, especially in deep water.
Plus, if things go according to the model PSC, the consortiums have to give up 25% of their acreage upon entering Phase II. I'm sure they want to be careful about what areas they give up.
Like you, I think the dust will settle a bit in Q3. I don't think there is any doubt Sinopec will commit to Phase II. Likely we will know by then how much of the JDZ Total has bought into. Still think some of the smaller players will be gone by then.
And I still think the information Sinopec allowed ERHC to share was a step in their game of strategy. Whether knowingly or unknowingly, ERHC has helped spread some Chinese Pu Pu platter (propaganda), and it was not meant to be appetizing. - Longtimer