Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
JDZ: Less Participants + Larger Piece of the Pie = Economically Viable Business Model.
Have a Nice Day!
Sneak
a lot of stock price manipulation seems to have taken place with ERHE stock. Maybe a few complaints to the SEC have taken place. Now and in the near future, the SEC may spring into action if the stock bashers had purchased shares on the cheap because of this behavior and sold them in the rally making money. This maybe the Lynch Pin around their necks.
Like my Grandpa used to say "Give them enough rope and they will Hang themselves."
Just food for thought!
Sneak
Today's action reminds me of the movie "Trading Places" with Eddy Murphy and Dan Aykroyd.
The Nay-Sayers are saying, Get back in there and BUY, BUY BUY!!!
LMAO
Sneak
It looks like it made the Wall Street Journal Today.
http://quotes.wsj.com/ERHE?mod=DNH_S_cq
Have A Great Day
Sneak
All I have to say to the Nay-Sayers is : Giddy on Up and Giddy on Out! You are Wrong and we are Right!!
Have a Great Day :0)
Sneak
Old article, but may give some insight as to what maybe taken place in Kenya.
East Africa : Kenya gifts six key oil blocks to China
Posted on October 9, 2006
The Chinese have lately taken a keener interest in oil exploration in sub Saharan Africa – regarded as one of the fastest growing oil arenas in the world. A STAFF WRITER reports
Two major European oil exploration companies have protested that they are unable to access Kenya even as the country emerges as the latest frontier in the ferocious global battle between Europe and China for oil resources.
The EastAfrican has learnt that the two European companies, Compania Espanola de Petrolas (Cepsa) of Spain and Sweden’s Lundin International, have both lodged complaints with the government.
In an unprecedented act of generosity, the government in April gave the state-owned China National Offshore Oil Company Ltd (CNOOC) exclusive rights over a total of six out of 11 available blocks, including the hotly contested Blocks 9 and 10A in the Mandera area.
So dominant has China become in the oil exploration scene in Kenya that CNOOC alone now controls 28 per cent of the total exploration acreage in Kenya.
Cepsa, the first to apply to the government for the two sought-after blocks, was until last year considered a frontrunner in the race for the coveted Block 9 and 10A when the Chinese jumped into the fray. In 2005, top government officials led by President Mwai Kibaki conducted a high-profile tour of China during which the two countries signed a memorandum of understanding calling for co-operation in several sectors including the oil industry.
After the visit to Beijing, the application by the Spanish appears to have been put into cold storage as it became clear that Kenya had fallen for the charms of the world’s new economic powerhouse.
Events moved very fast from then on. On April 29, acting Energy Minister Henry Obwocha signed away the six blocks to the Chinese under terms that – according to oil industry experts – were far inferior to what the Spanish and the Swedish exploration company had put on the table.
Apparently, CNOOC negotiated and signed only one complete production sharing agreement for Block L4 with the government. The rest of the contracts were one-year-study agreements granting them exclusive access to the five blocks – with the option to relinquish the blocks at the end of the one-year period.
The one-year study period covers Blocks 1, L2 and L3, 10A and 9. The blocks are located in three basins of the country covering 115,343 square kilometres.
With the door having been closed on the European companies, it is understood that the government advised Lundin and Cepsa to try negotiating with CNOOC to get the Chinese to accommodate them in joint-venture exploration deals, a common practice in the business.
But as it turned out, the Chinese have not been willing to accommodate the Europeans.
Recently, Cepsa wrote to the government lamenting that the Chinese had not responded to its offer despite several approaches.
Lundin International has also written to the government narrating its tribulations.
Why the government agreed to sign such a lopsided agreement dishing out liberal privileges to the Chinese and allowing them to hoard exploration acreage at the expense of the two European companies, is clearly the most intriguing aspect of the saga.
Apparently, the Spanish had made the government an offer whereby they would go straight into drilling exploration wells as opposed to the arrangement with the Chinese, where most of the acreage is being hoarded for studies.
Cepsa currently acts as an operator on the onshore Ouhourd Oilfields in Algeria in a joint venture with state-owned Sonatrach.
Recently, it was awarded a new exploration permit in Egypt. Currently, its upstream activities are concentrated in Spain, Algeria, Egypt and Colombia. Fields where the company has interests produce approximately 250,000 barrel per day.
The Chinese have lately taken a keener interest in oil exploration in sub Saharan Africa – regarded as one of the fastest growing oil arenas in the world.
Last year, the activities of the Chinese in Africa grabbed headline attention when CNOOC purchased a stake in Nigeria’s OML Block 130 for $2.3 billion – taking China into the top league of foreign direct investment providers on the continent.
With the entry of China and other Asian companies into the oil exploration field in Africa, including such companies as Petronas of Malaysia and ONGC Videsh of India, the expectations are that this will encourage interest even in the more marginal oilfields such as Kenya’s.
China is also turning to Africa as its preferred source of oil with imports already being sourced from several African countries including Angola, Congo Brazzaville and Sudan.
Interest in oil exploration in Kenya has picked up lately after Shell stopped drilling in the Loporot area of northern Kenya in 1992.
Currently, the total number of leased blocks in Kenya is 11: Apart from the blocks leased to the Chinese, others are leased to Pan Continental Inc and the Australian company, Woodside Energy.
Until recently, the Ministry of Energy had discretionary powers over allocation of exploration acreage.
But in 2003, the responsibility was transferred to an inter-ministerial committee chaired by the ministry with representation from the Treasury, National Environmental Management Authority (Nema), the Office of the Attorney General and the National Oil Corporation of Kenya.
Petroleum exploration in Kenya began in the 1950s with the first well being drilled by British Petroleum (BP) and Shell in 1954 in Lamu, where they drilled 10 wells.
However, none of the wells was fully evaluated despite several indications of oil. In 1975, several companies acquired acreage in the upper part of the Lamu Basin
Texaco drilled at a location called Hargaso – and encountered oil and gas shows. In 1976, Chevron and Esso drilled the Anza-1 and Bahati-1 wells where the mud drilled was suspected to have hydrocarbons.
A group of companies led by Amoco and Total drilled ten wells between 1985 and 1990. The wells were found to contain limited oil and gas.
Have a Nice Day
Sneak
ERHC Energy Inc. Releases Shareholder Update, Seeks Government Consent for Farm-Out Agreement for Kenya Block 11A
HOUSTON, November 13, 2013 – ERHC Energy Inc. (OTCBB: ERHE), a publicly traded American company with oil and gas assets in Sub-Saharan Africa, today issued an update on the Company's progress.
ERHC Shareholders:
ERHC is pleased to present highlights of the Company's recent progress.
Republic of Kenya Block 11A
• ERHC has concluded a farm-out agreement with a renowned integrated oil and gas company.
• The farm-out agreement is subject to the consent of the government of the Republic of Kenya.
• Under terms of the agreement, ERHC would transfer of a portion of its interest in Kenya Block 11A as well as operatorship.
• The proposed farm-out agreement includes a carry and other considerations.
• As required under the farm-out agreement, until government consent is granted, details regarding the partner and terms will remain confidential.
• Pending government consent to the farm-out agreement, ERHC continues to operate Block 11A.
• Work is ready to commence on the airborne Full Tensor Gravity Gradiometry (FTG) survey of Block 11A following the subcontractor's completion of work on a neighboring block.
"This is an excellent time for the entry of a technically and financially capable operating partner," said ERHC President and CEO Peter Ntephe. "We have negotiated a mutually beneficial agreement that advances ongoing exploration in Block 11A and enhances shareholder value."
Republic of Chad Block BDS 2008
• A comprehensive Environmental Impact Assessment (EIA) of ERHC's approved work program on Block BDS 2008 is nearing completion.
• The EIA is being conducted by ERHC's subcontractor ASAT (Archeologie et Socio-Antropologie au Tchad) and is the necessary first step in exploration.
• ERHC is currently accepting bids for an airborne FTG of its BDS-2008 block which is the next step in the approved work program.
• BDS 2008 overlies the Doseo Basin, which hosts much of Chad's current oil production.
"We are pleased to be making progress with our exploration work program in Chad," said Mr. Ntephe. "These are all necessary steps toward eventual drilling."
São Tomé and Príncipe Exclusive Economic Zone (EEZ) Blocks 4 and 11
• Both ERHC and the National Petroleum Agency of São Tomé and Príncipe (ANP-STP) are conducting legal reviews of the draft Production Sharing Contracts (PSCs) for EEZ Blocks 4 and 11, the significant terms of which have been finalized by the parties.
• ERHC's and the ANP-STP's efforts to generate interest in the EEZ as a whole have increased interest in ERHC's EEZ Blocks among International Operating Companies (IOCs).
• ERHC is in discussions with several IOCs about possible partnerships following the signing of the PSCs in Blocks 4 and 11.
"We are very happy that after many years of work, there is now palpable momentum building toward exploration of the Zone – both in our Blocks and in neighboring Blocks," said Mr. Ntephe.
Nigeria - São Tomé and Príncipe Joint Development Zone (JDZ) Blocks 2, 3 and 4
• The Joint Development Authority (JDA), ERHC and other contracting parties are continuing to review possible next steps.
• One of the possibilities that the parties are collectively examining is to bring in exploration companies to spread risk and to reinterpret existing data with a fresh perspective and possibly a fresh exploration strategy.
"Despite the unexpected outcomes of the initial drilling campaign, we remain enthusiastic about the JDZ and believe that taking a new mindset to the exploration effort would be a very positive development for all involved," said Mr. Ntephe.
If you have questions, please reference the Company's SEC filings, which are available at http://erhc.com/secfilings/ or contact Daniel Keeney, ERHC's investor relations representative, at dan@dpkpr.com.
About ERHC Energy
ERHC Energy Inc. is a Houston-based independent oil and gas company focused on growth through high impact exploration in Africa and the development of undeveloped and marginal oil and gas fields. ERHC is committed to creating and delivering significant value for its stockholders, investors and employees, and to sustainable and profitable growth through risk balanced smart exploration, cost efficient development and high margin production. For more information, visit www.erhc.com.
Cautionary Statement
This press release contains statements concerning ERHC Energy Inc.'s future operating milestones, future drilling operations, the planned exploration and appraisal program, future prospects, future investment opportunities and financing plans, future stockholders' meetings as well as other matters that are not historical facts or information. Such statements are inherently subject to a variety of risks, assumptions and uncertainties that could cause actual results to differ materially from those anticipated, projected, expressed or implied. A discussion of the risk factors that could impact these areas and the Company's overall business and financial performance can be found in the Company's reports and other filings with the Securities and Exchange Commission. These factors include, among others, those relating to the Company's ability to exploit its commercial interests in Kenya, Chad, the JDZ and the Exclusive Economic Zone of São Tomé and Príncipe, general economic and business conditions, changes in foreign and domestic oil and gas exploration and production activity, competition, changes in foreign, political, social and economic conditions, regulatory initiatives and compliance with governmental regulations and various other matters, many of which are beyond the Company's control. Given these concerns, investors and analysts should not place undue reliance on these statements. Each of the above statements speaks only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any of the above statements is based.
Contact: Dan Keeney, APR
DPK Public Relations
832-467-2904
dan@dpkpr.com
Have a Nice Day
Sneak
AA: "A picture is worth a thousand Words" You must have hit a Nerve! The Truth Hurts!
They grow more desperate by the Day! The window of negative influence is Shrinking!
To all the ERHE Longs I salute you with the term F.O. aka Fight On!
To those who wish hardship on ERHE, I give you the term F.O. and you know what that means for you!
Have a Great Day
Sneak
MM's Shaking The Tree!!
Sneak
Dan to post a link on the Company website as soon as he can maybe in the morning! Peter did not Speak at the Conference.
Have a Great Day!
By the way, I added more Soldiers Today!
Sneak
Buy when there is "Blood in the Streets" and sell when everyone is Euphoric about the Stock!
JMO
Sneak
Arnim: I quess nobody picked up on "Battle of the Bugle" which meant that the nay-sayers continue to Blow Their Own Horn, bugle that is LOL.
Have a Great Day!
Sneak
OC: Todays action is like "Hitler's Battle of the Bugle" They threw the Kitchen Sink at it and the line Held. I agree Peter and Company need to get ahead on the Issue you talked about!
Hang In There Man!
"AA" thanks for waving the flag in Victory. We survived the onslaught today as the naysayers are dropping back! LOL
Have a Great Day!
Sneak
John, can you post the buys and sell numbers for todays action?
Thanks in Advance! :0)
Sneak
OC: Less than .0013% or Thousands of 1% of all the shares outstanding have traded so far. I would be concerned if 10 to 20 million shares traded and the price fell.
Total Stock Price Manipulation In My Opinion!
Sneak
OC: It look like panic may have set in. It should be short lived as Peter must have not released any new news on the LOI and the ankle biters can unload all their share to force a near panic among week hands and buy back there position without fear of the stock running forward.
They should be ashamed of themselves.
JMO
Sneak
Seek: As I pondered the many scenarios floating around the ERHE stock, I did not have time yesterday to see if the Rodham & Renshaw Company still held shares in ERHE.
Well I would have to say that, They most likely do not! Rodham & Renshaw closed down their operations and changed the company's names to Direct Markets Holdings Corporation and as of December 12 of 2012, One of the founders of Rodham & Renshaw took the company over and it now is listed on the Pink Sheet with 32.8 million shares outstanding and does not trade much at all.
Sorry for the scenario.
Sneak
marty: Treat them like Mushrooms! Keep them in the Dark!
Sneak
The fall in the stock price followed the $2 million raised by making a deal with Rodham and Company.
Rodham could have SHORTED some or all of the 10 million shares to recover some or all of their capital investment in ERHE.
If a buy-in would catch them in a small SHORT position while buying shares to replace the ones shorted, they could exercise the .28 share option thus covering any open position they held as the shorted shares head north of .28
Why the share are at .05 is the million dollar question, when the prospects in Kenya seem like a more Realistic and Achievable Goal over the short run while the share price hangs in the shadow of uncertainly.
JMO
Sneak
DR. J: Rodham and Company paid $2 million for 10 million shares and had the option of buying an undetermined amount of shares at .28 a share down the road. Could Rodham & Company be the ones that have been shorting the the shares forcing them down to .05 a share level?
Could the additional shares through the option at .28 that Rodham & Company have the rights to cover their short position and allow them to make a sizable profit on any buy-in?
Is it all just a coincidence? ERHE still has to raise the stated $50 million. Adamantine Energy's block 11B calls for a 5 years exploration period and a minimum exploration budget of $50 million, Hmm, Just a coincidence as well?
We know Cespa is involved with Adamantine Energy. Cespa does not buy farm-in deals, They buy a % of the Parent Company.
Just Food For Thought.
Sneak
ERHE stated goal is to raise $50 million in cash by selling shares in the company, farm-in deals or equity swaps. If Cespa is the partner to be, a buy-in could be at .20 a share with some perferred class of stock included. ERHE would have to issue 215 million @ .20 to gather $43 million and $5 million in perferred stock together with the $2 million from current investors could fit the billing.
BWDIK
Sneak
Market Makers maybe buying as well in an effort to hedge a large short position until they fully unwind their short position.
Bwdik.
Sneak
Arnim: They resemble the West End of an East Bound Mule!!
:0)
Sneak
I am assuming that you are referring to Middy and his Kind.
Sneak
When one does not pay attention to children, the children tend to get louder and more disruptive in a desperate attempt to gain influence and attention.
Sneak
Seek: I may be wrong, but I thought plane returned to Texas for routine maintenance. I believed that Block 11B had 2-D images taken. Could the plane be getting refitted for 3-D image work in block 11A?
JMO
Sneak
OC: Instead of using the word Lumes as a slang word for Illuminate, maybe I should have used the word Legumes (Beans) as the options seem to be a lost cause as they represent the Giant Gas Fields of the JDZ. LOL
Have a Great Day.
Sneak
The option deadline lumes Big!!!
One thing is for Sure. The Ankle biters are wrong! I will go out on a limb a claim, the Oily one came closer to what is taken place than the Doubting Thomas's of the World.
Jmo
Sneak
The longer it takes for the LOI to get Finalized, the more detailed and involved the partner will become in the future of ERHE.
JMO
Sneak
The ankle biters response to the latest 10K filing shows a defiant respect for the Real Truth of what has been taken place within the confines of ERHE's headquarters.
His Vacuous Opinions mean nothing more than a personal Vendetta against those in charge of ERHE's Future.
JMO
Sneak
Iranian influence of Nigerian Muslim starting to take hold with bombings in local communities to start unrest with governmental officials has now involved the kidnapping of two U.S. citizens at sea off the Nigerian coast.
Sneak
OC: Cespa lost out on a Kenya block deal to CNOOC an the last go round. If Cespa is taken over Block 11B from Adamantine, staying under the radar could bold well for them as the Asian Tiger is on the Prowl in East Africa.
Judging from how Tightlipped any new progress has been. It would not surprise me that the farm-in partner becomes an Equity partner as well.
BWDIK.
Sneak
AA: I do not believe anything the ankle biters say. If this stock goes to $3.00 with a equity buy-in partner they will claim that if Peter had resigned before the deal was finalized the stock would be at $5.00 or higher because of new investor Euphoria!
They are never leaving until ERHE is No More!
JMO
Sneak
OC: It is like betting on a big sporting event. When the resident Know it All claims to be Smarter, Brighter and have an Invincible Self Absorbed Attitude about the outcome, they are Always Wrong.
The same hold true for Middy and friends, Axx Clowns to the End They Are.
JMO
Sneak
Trying to stay focused on the end game (exit strategy). If Cepsa buys shares into ERHE, this will drive the shares to new highs. These highs will be minor if ERHE strikes the Mother Load as SNP will Up the Ante in trying to gain access to this Field.
JMO
Ka Ching!! No Pun intended! LOL
Sneak
Profile
CEPSA (Compañía Española de Petróleos, S.A.U.) is an integrated energy company operating at every stage of the oil value chain, with more than 11,000 employees.
WOW, Did not see that Coming!!
Fingers Crossed
Sneak
OC: ERHE's Kenya Division is a subsidiary and is run by the Good DR. THUO (General Manager) and the parent company is ERHE. So any talk that ERHE cancelled the FTG is just "F-in" Bull SHXT!!
JMO
Sneak
Production Sharing Contract on ERHC's Block in Kenya
On June 28, 2012, the Company announced that it had signed a Production Sharing Contract (PSC) on one oil block with the Government of Kenya. A PSC is an agreement that governs the relationship between ERHC (and any future joint-venture partners) and the Government of Kenya in respect of exploration and production in the Block awarded to the Company. The PSC details, among other things, the work commitments (including acquisition of data, drilling of wells, social projects, etc.), the time frame for completion of the work commitments, production sharing between the parties and the Government, and how the costs of exploration, development and production will be recovered.
Exploration Term and Key Provisions of the PSC
The initial exploration period is two years from the effective date of the PSC. The effective date falls ninety days after the execution of the PSC. The Company is expected to begin exploration operations within three months of the effective date.. The initial exploration period is extendable for two additional two-year exploration periods contingent upon fulfillment of Company's work and expenditure obligations under the PSC.
If not renewed, the PSC expires automatically at the end of the initial exploration period or at the end of any additional exploration period unless a commercial discovery is made before the exploration period expires. In the case of a commercial discovery of crude oil in a relevant development area, the PSC will run for a development period term of 25 years. In the case of a commercial discovery of natural gas in a relevant development area, the PSC will run for a development period term of 35 years.
The PSC provides for a mandatory surrender of 25% of the original contract area by the end of the initial exploration period and 25% of the remaining contract area by the end of the first additional exploration period. . In the case of a commercial discovery of crude oil in a relevant development area, such development area is excluded from the original contract area for the purpose of surrender calculation. Furthermore, ERHC may surrender an additional part of the contract area and such voluntary surrender shall be credited against the next surrender obligation. The PSC will terminate in case of a surrender of the entire contract area.
The PSC requires a signature bonus of $310,000 which the Company has fully paid as of June 30, 2012. The PSC also requires the Company, upon entry into each exploration period, to provide a bank guarantee of 50% and parent company guarantee of 50% guaranteeing its full minimum work and expenditure obligations for each exploration period guaranteeing the Company's minimum work and expenditure obligations under the PSC.
Sneak
Old news, but Interesting at Best.
ERHC Diversifies African Exploration Assets; Adds 2.95 Million Acres in the Middle of Kenyan Activity
July 11, 2012 - By EnerCom, Inc.
ERHC Energy Inc. (OTCBB: ERHE) is a publicly traded American company with oil and natural gas assets in Sub-Saharan Africa. The company is actively pursuing two offshore West Africa zones, the São Tomé and Príncipe Exclusive Economic Zone (EEZ) and the Joint Development Zone (JDZ), and has an additional three onshore exploratory blocks in the Republic of Chad.
However, on July 9, 2012, the company announced the expansion of its African exploration assets. ERHC signed a production sharing contract (PSC) with the Government of the Republic of Kenya that covers 2.95 million acres on Block 11A in northwestern Kenya. This represents the company’s second large PSC onshore in Africa – the first being its three blocks in Chad, and its first foray into one of the more active areas in East Africa.
Source: ERHC
OAG360 Comments:
East Africa emerged in recent years as a well-known oil province with the multiple discoveries - namely the discovery of over 1 billion barrels of recoverable oil in Uganda’s Block 1 (EA1) located West of ERHC’s block in Kenya. According to a recent Dow Jones report, Total (ticker: TOT) is planning to spend at least $300 million on exploration and appraisal activities in its two exploration areas in Uganda this year, Block EA-1 and Block EA-1A. OAG360 notes that Total, China National Offshore Oil Corporation (ticker: CEO) and Tullow Oil (ticker: TLW) in February signed a $2.9 billion deal to ramp up output Uganda. It is clear that larger companies in the industry are allocating billions of dollars into onshore East Africa.
Source: Tullow
Tullow, which is really the industry leader in terms of Kenyan exploration programs and discoveries, has farmed into blocks 10A, 10BA, 10BB, 12A, 12B & 13T, which surround ERHC’s Block 11A. TLW says its acreage covers the Turkana Rift Basin, which has similar characteristics to the Lake Albert Rift Basin (near Uganda Block EA-1), and includes a south-east extension of the geologically older Sudan rift basin trend. The Sudan rift also extends through ERHC’s Block 11A. Effectively this places ERHC’s Kenyan Block 11A in between Tullow’s existing Kenyan and Ugandan exploration plays, bearing in mind TLW’s Uganda exploration program is approximately 300 miles further west.
To further place Block 11A in context, the 2.95 million acres is approximately 11,937 km2 (4,609 mi2), roughly five times larger than the Wattenberg Basin in Colorado, which is 2,530 km2 (978 mi2). Why do we point out this relatively simple mathematical comparison? Large acreage numbers cited with African explorations blocks often create the impression that exploration and developing the blocks is an insurmountable hurdle for smaller companies. Although generally larger than the Wattenberg Field, exploration blocks in Kenya, if prospective, are broadly similar in size to many other basins. The main difference between any of the large onshore African exploration blocks is that relatively few exploration wells have been drilled when considered in the context of established producing fields like the Wattenberg, which has has over 21,000 wellbores drilled since the 1970s. The opportunities in Block 11A and others are unique because the plays are nascent as the industry has really only just begun to discover the resource potential in Kenya.
Funding a Capital Intensive Exploration Program
The vicinity of ERHC’s Block and PSC with Kenya is exciting as they seem to be surrounded by major international oil companies searching for oil, with the understanding the “close-ology” in Africa is measured in terms of huge exploration blocks and drilling locations/discoveries separated by millions of acres. Investors, whether private equity or public market players, are likely to ask questions of smaller companies winning these huge concessions how the exploration programs are to be funded.
OAG360 notes that as of Q1’12, ERHC had approximately $5.0 million in cash and $5.0 million of treasuries, the implication of which is ERHC must attract a larger farm-in or financial partner in order to begin a G&G program prior to any exploration drilling across the 2.95 million acres in Block 11A. Clearly additional sources of funding are required to truly accelerate the pace of exploration in Kenya on Block 11A– whether it be seismic or an organic drilling exploration program. We also note ERHC has demonstrated its ability to farmout exploration acreage on a cash-and-fully-carried basis when the company brought Addax (later Sinopec) into its exploration blocks offshore São Tomé and Príncipe.
Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom's conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company's entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom's Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. The company or companies covered in this note did not review the note prior to publication.
July 11, 2012 - By EnerCom, Inc.
ERHC Energy Inc. (OTCBB: ERHE) is a publicly traded American company with oil and natural gas assets in Sub-Saharan Africa. The company is actively pursuing two offshore West Africa zones, the São Tomé and Príncipe Exclusive Economic Zone (EEZ) and the Joint Development Zone (JDZ), and has an additional three onshore exploratory blocks in the Republic of Chad.
However, on July 9, 2012, the company announced the expansion of its African exploration assets. ERHC signed a production sharing contract (PSC) with the Government of the Republic of Kenya that covers 2.95 million acres on Block 11A in northwestern Kenya. This represents the company’s second large PSC onshore in Africa – the first being its three blocks in Chad, and its first foray into one of the more active areas in East Africa.
Source: ERHC
OAG360 Comments:
East Africa emerged in recent years as a well-known oil province with the multiple discoveries - namely the discovery of over 1 billion barrels of recoverable oil in Uganda’s Block 1 (EA1) located West of ERHC’s block in Kenya. According to a recent Dow Jones report, Total (ticker: TOT) is planning to spend at least $300 million on exploration and appraisal activities in its two exploration areas in Uganda this year, Block EA-1 and Block EA-1A. OAG360 notes that Total, China National Offshore Oil Corporation (ticker: CEO) and Tullow Oil (ticker: TLW) in February signed a $2.9 billion deal to ramp up output Uganda. It is clear that larger companies in the industry are allocating billions of dollars into onshore East Africa.
Source: Tullow
Tullow, which is really the industry leader in terms of Kenyan exploration programs and discoveries, has farmed into blocks 10A, 10BA, 10BB, 12A, 12B & 13T, which surround ERHC’s Block 11A. TLW says its acreage covers the Turkana Rift Basin, which has similar characteristics to the Lake Albert Rift Basin (near Uganda Block EA-1), and includes a south-east extension of the geologically older Sudan rift basin trend. The Sudan rift also extends through ERHC’s Block 11A. Effectively this places ERHC’s Kenyan Block 11A in between Tullow’s existing Kenyan and Ugandan exploration plays, bearing in mind TLW’s Uganda exploration program is approximately 300 miles further west.
To further place Block 11A in context, the 2.95 million acres is approximately 11,937 km2 (4,609 mi2), roughly five times larger than the Wattenberg Basin in Colorado, which is 2,530 km2 (978 mi2). Why do we point out this relatively simple mathematical comparison? Large acreage numbers cited with African explorations blocks often create the impression that exploration and developing the blocks is an insurmountable hurdle for smaller companies. Although generally larger than the Wattenberg Field, exploration blocks in Kenya, if prospective, are broadly similar in size to many other basins. The main difference between any of the large onshore African exploration blocks is that relatively few exploration wells have been drilled when considered in the context of established producing fields like the Wattenberg, which has has over 21,000 wellbores drilled since the 1970s. The opportunities in Block 11A and others are unique because the plays are nascent as the industry has really only just begun to discover the resource potential in Kenya.
Funding a Capital Intensive Exploration Program
The vicinity of ERHC’s Block and PSC with Kenya is exciting as they seem to be surrounded by major international oil companies searching for oil, with the understanding the “close-ology” in Africa is measured in terms of huge exploration blocks and drilling locations/discoveries separated by millions of acres. Investors, whether private equity or public market players, are likely to ask questions of smaller companies winning these huge concessions how the exploration programs are to be funded.
OAG360 notes that as of Q1’12, ERHC had approximately $5.0 million in cash and $5.0 million of treasuries, the implication of which is ERHC must attract a larger farm-in or financial partner in order to begin a G&G program prior to any exploration drilling across the 2.95 million acres in Block 11A. Clearly additional sources of funding are required to truly accelerate the pace of exploration in Kenya on Block 11A– whether it be seismic or an organic drilling exploration program. We also note ERHC has demonstrated its ability to farmout exploration acreage on a cash-and-fully-carried basis when the company brought Addax (later Sinopec) into its exploration blocks offshore São Tomé and Príncipe.
Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom's conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company's entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom's Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. The company or companies covered in this note did not review the note prior to publication.
Talisman Energy Completes $1.5 billion North Sea transaction with Sinopec
Talisman Energy Completes $1.5 billion North Sea transaction with Sinopec
Talisman Energy Inc. (Talisman) (TSX:TLM) (NYSE:TLM) today announced the completion of its joint venture transaction with Addax Petroleum UK Limited (APUK), an indirect wholly-owned subsidiary of China Petrochemical Corporation (Sinopec Group) following receipt of government and regulatory approval.
“We are very pleased to be partnering with Sinopec in the UK North Sea,” said Hal Kvisle, President and CEO of Talisman Energy Inc. “This transaction supports a number of Talisman’s key priorities. The proceeds will be used to strengthen our balance sheet, fund our global capital program and give us the financial flexibility to invest in future opportunities. Sinopec will now fund 49% of the UK capital program, allowing us to increase overall investment in the assets, which will lead to improved operational performance and a stronger UK North Sea business. We look forward to working with Sinopec in the years ahead.”
The completion follows the original announcement of the transaction in July this year. Sinopec Group has acquired a 49% equity interest in Talisman’s UK North Sea business, Talisman Energy (UK) Limited (TEUK), for $1.5 billion. Talisman will continue to hold 51% of the joint venture company. The UK North Sea will be a smaller part of Talisman’s overall portfolio, but remains an important part of it's North Sea business.
The focus of the joint venture will be to continue investment in asset integrity and improve ongoing operating performance as well as accelerating infill drilling, unlocking additional infrastructure-led exploration opportunities and executing major projects, thereby extending field life and deferring decommissioning.
Talisman Energy (UK) Limited will be renamed Talisman Sinopec Energy UK Limited.
Sneak