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This is pathetic. We have news of reserves, an article about an impending ROO and we can only muster up 700,000 shares in volume to this point in the day. The company has wasted their time on conferences in Dubai and London, when they needed to get the word out to US investors. Disgraceful IR.
No. That would mean Addax would be subject to the vagaries of US regulation. If they wanted that they'd be listed in the US. However, they could buy ERHC Energy Cayman Ltd., which owns 97.5% of the Block 2, 3 and 4 assets without any problems. Gee, maybe thats why EHRC created the Cayman sub...
No problem. No offence taken.
The NSAI report released by Addax last January showed my numbers. That's what I was comparing. However, the one's you point out were obviously more current. I did miss them.
Addax's NSAI Report hasn't changed much in regard to the JDZ since the last one. 793 vs 727 unrisked. 303 vs 313 risked. Hopefully we'll now see ERHC release their report from NSAI. Anyone extrapolate numbers from this for ERHC?
The costs of both the AA and a ROO have been budgetted for in Addax's 2009 exploration/drilling budget. They have the money and will spend it.
I don't know for certain, but I would make sense that Addax would have acquired the data that PGS shot in the blocks and added that to the Western Geco data and had it all reprocessed by NSAI. The same data will be used for ERHC's report.
Why? What did I miss?
No one will buy EEL now because:
1. they have commitments to drill that they cannot fund
2. they have a balance owing to a driller they cant pay because their Nigerian partner stiffed them because...
3. ...there was no oil in block 122
4. their deal with BG is dead and has been for months - they haven't had the balls to tell anyone - so no money coming in to fund anything
JDZ positions and EEZ rights are full pay - no carries.
They are dead. Best to take the choice bits out of administration (UK term for bankruptcy) rather than buy into all the commitments.
Read Sfreed's last post on EF.
Well said. I noticed on the conf call that there were new shareholders with an obvious understanding of the industry asking relevant questions.
I agree. I means we hold our cash and not waste it on flights of fancy. The management is not oil management, so acquisitions of producing properties were never going to come our way at a reasonable price. We are better to ensure our assets are protected and that relations with partners remain good. Now is not the time for risk taking - that's been done.
It's not a matter to take to a court. It is a matter to take to an attorney to review the Colorado laws in regard to minority shareholders nominating a director. I wouldn't consider contingency - you get what you pay for. We have lawyers who would look at it for nothing and if it is possible then it can be presented to shareholders.
I might make enquiries to counsel on the requirements, costs, etc. Members would have to bear their share of costs.
Since we are all anonymous, I think it would take the following to accomplish:
1. Engaging a lawyer to accept communication from interested shareholders in order to maintain anonymity until a date certain. Shareholders cosidering memebership would probably be required to sign a non-disclosure.
2. After a certain date, shareholders are going to have to be willing to allow their names and the percentages the control the votes on divulged to the others in the group. Members would probably be precluded from divulging the names of other members of the group. bear in mind that there may be members who may not be liked by other members. Too bad, they have just as much right to be there. The lawyer would co-ordinate communication amongst the members.
3. Obviously the in-concert rules would have to be reiewed to ensure compliance.
4. Assuming enough shares are represented (I am not aware of the number required), members would have to nominate potential board members and a proceedure determined on a selection porocess. Note that the nominated person need not be a group member and probably shouldn't be. He probably should be an industry person who can provide value to the company without the baggage of being an interested shareholder.
5. Once the nominated person is agreed, he can be announced publicly which will hopefully cause other shareholders to jump on the band wagon and vote for him.
This needs alot of work and advise from counsel before implementation. Calls can be made to counsel to figure out on a preliminary basis.
Is it time to have minority shareholders get together and demand a seat on the board? Lord knows we are not being represented very well.
Haven't we heard that before???
Did I miss recent update on the sailing dates of the AA? This stock certainly is frustrating sometimes. Can't wait for the reserve report that we hear is coming.
I agree with your views on a deal. There are lots around (this is my business buy the way) and there will continue to be at even cheaper prices as companies with cash problems sell assets to raise cash.
I would argue that it would be nearly impossible at this time to issue shares. If it was doable, it would be at a discoiunt to market with a warrant as the stock would be resricted (you can't keep free trading shares you buy on the market in treasury for sale later as free shares). No one has any interest in buying anything. Everyone is in sell mode. We see deals all the time that in normal markets we'd be all over, but are not biting.
It's not a matter of managements perception of risk, its a matter of spending capital and the cost of future capital.
Your point is well taken. However, cash is king in the current markets and the more you have the better off you are. Many companies would love to be in their position - long cash with no obligations to use it. Like I said, I would have no problem in them using cash flow to buy shares, but in the absence of that you keep your cash. They don't need to buy shares to pay Feltang. The excuse is keeping liquid and prudently managing the assets they have. Would you have them spend it all, save for a few dollars to keep the doors open?
I dont think a buyback would do anything to help the stock price beyond their own buying. Once they are full the situation is the same except we would have 33.3 million less outstanding shares. If they had cash flow, then I might be inclined to agree. However, now is not the time to spend capital attempting to shore up a stock that is doing the same thing every other stock is doing theses days. Ask another question; if they did that and then needed the $5mm, could they get it and at what price? Stand pat and hang on.
How long depends on both parties agreeing to the arbitrator(s), submitting arguments in a timely manner, agreeing when to meet, etc. It could take a few months or longer.
Costs a very low, no way more than $100,000 all in. Each party pays its own legal costs and proportionate share of the arbitrators fees.
This is the best and cheapest way to go to save cash and protect the rights.
You obviously have nothing else better to do. Perhaps you can write a full strategy report for ERHC and give them the benefit of you insights and experience. Far better that than whining continuously on these boards. let us know when your done so we can all have a read.
Amni tried to do an IPO in nigeria. Couldn't get it done. Wade Cherwayko of Abacan and Equator fame is a major shareholder. I don't know about their assets but I'll find out.
Perhaps people are missing bits of good news and interesting rumor that are finally beginning to pile up, like Greg Craig not going to be a factor going forward and Madigan into DoJ means investigations inert and rumor of reserves release that shows more and better. The questions is...does the market care?
I admit I was wrong in calling a bottom a couple weeks ago. Sorry.
RUBBISH! This is business and good will is an accounting entry. If Petrobras wants it they can take it and save everyone the anticipation.
They did up their JDZ budget for Block 4 from $25mm to $35mm knowing they are drilling in 2009. Pearce did say that two contingent wells in blocks 2 and 3 might mature early in 2009 - Sinopec and Anadarko. This will require further budget increases. I'm not sure if the short term urgency we feel is felt at Addax. The commitment to drill there hasn't changed and early drilling is based on value for money not exuberance.
It's not much of a gamble. He has the AA coming. However, he's perfectly willing to get one in earlier if the price is right. We hope he does.
It's not a matter of not working to find a rig or knowing which one they want, it's a matter of price. Full stop. He wants it, but is not fool enough to pay too much for it. Can't argue with that.
ERHC HAD rights in blocks 2, 3 and 4. Those rights were exercised and positions awarded as exercised. Those rights don't exist any more. They have been converted to positions in the blocks in the same way that an individual exercises a stock option.
ERHC IS a signatory to the PSC's and JOA's in each block. We we have fully executed legal documents that detail our positions in the blocks and relationships with the other participants in the blocks. This is in no way different than any other participant in the block regardless of how the positions were obtained.
This is not open for discussion.
It costs tuppence to file a bloody lawsuit. Relax.
Shadow only has 6 letters. Yours has 7. Hmmm. Sinopec has 7.
8-K. ERHC files lawsuit to stop any tampering with rights in JDZ 5 & 6. Comes after failure of JDA and JMC to give satisfactory response to letters seeking clarification on Company's rights.
I'm going to disagree with you here. As I stated before, there are many companies that have very interesting assets but are cash starved. These can be had via a share purchase. There is no need to spend cash for the whole company when shares will do. A much smaller amount of money is then raised to continue acquired company's operations. I am seeing this type of trasaction daily.
Like us, shareholders of these companies have been beaten up but want to maintain the upside they saw in their assets in the first place. Thus incentive are aligned - ours to save our cash while gaining assets, theirs to maintain exposure to their assets and move to a company that is capable of arranging the funding of growth. Sound familiar?
We are well past VC money, but you are very right in saying there is little interest in investing in juniors with nothing but property.
Having said that, ERHC's carries and partnerships are things on which they could raise a bit of money, $5mm to $10mm for example, if they wanted to complete an exploration program of an acquired company. One of the best things about acquiring a company with a hugely undervalued asset is acquiring management and additional contacts for raising that money. There is a massive amount of shareholder fatigue in companies like this so their stocks have been beaten down more than most and their incentives are to do a deal.
The current landscape in the natural resources space is this: there are literally hundreds of small companies with very good assets that used to be able to get financing either privately or through a listing on an exchange. This financing has dried up. This leaves these cash-starveed companies no other alternative but to court cash rich (a relative term, of course) companies to merge with at valuations that are ridiculously low. I personally am working on three projects of exactly this nature (one gold, one diamond and one oil).
Herein lies the opportunity for companies to cherry pick projects in their areas of interest with stock. With the acquisition of a company with such a project you acquire management along with it - so you kill two birds with one stone. ERHC has the cash to sink into a project that has been orphaned by the market (it doesn't often take much to go from prospect to resource in much simpler areas than deepwater Nigeria). With a new prospect and additional seasoned management, they would be in position to raise aditional capital, again not much, without using their current cash reserves.
I'm not saying they will or even should, but the opportunities that are presenting themselves at the moment are very compelling.
You are missing nothing. The only good acquisition management should be using their cash for, if they are going to spend any of it at all, is market purchases of their own shares.
I'm calling it. We have seen the lows on ERHE. The $US is starting to fall back to earth because credit is freeing up so the rush to US Treasuries for safety is starting to end and Libor is falling as a result. This will cause the $US to fall and hard commodities like gold, oil, copper and PGM's to rally. Gold will be the primary beneficiary, but oil will follow. Gold and oil will see many times today's prices as the $US becomes worth less and less as more money is printed for bailout financing. Production costs wont catch up for a long time as the economy wont allow suppliers the power to increase prices. ERHC should be dragged along for the ride and the urgency for a rig might have just increased.
What he thinks the shares are worth may be irrelevant. I'm not saying this is true nor do I have any information to support or deny this, but IF he was dumb enough to leverage his assets (not necessarily his ERHC shares, but other assets) to grow other assets or maintain a lifestyle, he may be under water on many of them and be facing margin calls. The big Russian oligarchs have gotten themselves into a world of hurt doing this.
I doubt, however, if he could obtain excess leverage on his local assets. Most local banks don't have the capaicity and most international banks would be loathe to offer leverage to a Nigerian, especially given his episode with FAB. So I doubt he is in sych trouble.
If he is, however, he may be a willing seller of his ERHC shares (he'd have to sell what he can, not necessarily what he wants to). This would be wonderful. As a partner in the JDZ and other projects, Addax would be the natural buyer.