is waiting for some serious oil exploration activity.
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She will probably want to buy some shares of her own in her retirement account. I sprung for another 50,000 this morning. Got that average price down to 20¢. My first two purchases were at 71¢ and 91¢. Jeeze, what a ride (down) this has been.
The warrant exercises at 7.5¢ are now GREEN!!!!!
Could run to 15¢ in a heartbeat
Good stuff BT - thanks for sharing. eom
All good points OCB - I recently looked at taking a position in Taipan due to the fact that their drilling plans are firm and more near-term. One of the things I have read indicates that they could be "taken out" at around $1.50, which would be a triple from here.
Given that both companies are currently valued at $50 million, I looked at where ERHC could be prior to reaching bottom-hole: 20¢ - 40¢ or even more. So on the surface at least, the reward versus the risk appears much higher with ERHC. Especially considering our additional interests in Chad.
I think my previous post was thinking aloud. I had too much time on my hands this morning and probably should have kept my thoughts to myself! I was just reminding all of us that this is not a sure thing.
I truly believed that the JDZ was a sure thing. At the time when the first of our five JDZ wells was spudded (2009), I had a chance encounter with a geologist working in Africa. I excitedly told him about our JDZ wells and he expressed caution. I will never forget how resentful I felt about his comments - How could he say that our wells could possibly be non-commercial?
So when Southern Man mentioned that he was concerned that 2D might not generate ANY prospects, I did a little research. Kenya's National Oil Company comments on their own website that years ago, "In Mandera Basin, Frobisher Ltd., Adobe Oil Company and Burmah Oil Company conducted photo geological field geology, gravity, aeromagnetic and seismic surveys that did not materialize into drilling programs." The point is that maybe we shouldn't necessarily assume that there are going to be a lot of prospects generated with the 2D this summer.
No one wants our current program to be a blazing success more than me. I have almost a half million shares and am always at the ready to buy more.
Good Luck to ALL of us!!!
All of the excitement over Kenya's oil prospects are reminiscent of the JDZ build-up prior to drilling. At that time, the assumption was that the oil was there simply waiting for a well to tap the reservoir. in 2006, I prepared a matrix that showed just how much money was going to be generated off of those blocks. Clearly, my assumptions (and everyone else's) ignored the incredible difficulty in making a new discovery. As the son of a geologist who spent many years in Africa, I should have known better. He was always tantalized by the continent's prospects, but never had a major discovery.
The history of Kenya's oil industry is not very encouraging. Many of the majors have made tentative efforts in the region over the last fifty years. They each quickly abandoned their efforts without any commercial success at all.
Geologic science has advanced significantly over the last fifty years. So now, the smaller e&p companies are again looking at Kenya in search of an elephant field. Tertiary rift basins are not easy to decipher. It is going to be hit and miss. Africa Oil has already had some success, but if my memory is correct, their most recent two wells have found water instead of oil.
So a reminder to everyone: The excitement that builds up prior to reaching the bottom of the hole in a test well can be followed by a very loud thud - believe me, I have heard that "thud" many times. You may remember the thud after Kina #1 in the JDZ.
There is no manipulation of the ask side today - It's kinda nice to see for a change. Someone has had their foot on the stock price for a long time - hopefully they are done doing their thing. But maybe they are just on vacation........ or sick ....... or snowed in (-:
You make a good point. I met him face to face at an ASM a few years back and had the distinct impression that I was talking to an idiot. But that happens more and more as I get older! (-:
Oh, excuse me for being wrong. I thought Peter Ntephe repeated the statement in the annual shareholders meeting in Houston, which I attended in person. But that was a looooooooooong time ago.
ERHC did in fact state that results were in the expected quantities, which at its worst is indeed a lie. At a minium it was an uninformed mis-statement. I will search for the exact link to that statement, but it was clear that ERHC did state that results were as expected. What they meant to say is that the reservoir sands and traps were encountered as expected. Unfortunately, a commercial amount of crude oil was NOT encountered. Very similar to HDY's experience. Everything looked as expected from the seismic, but the oil had migrated leaving an empty bucket.
EEL's 2011 annual report:
" Prospectivity
...While the discovery in the Bomu 1 well of gas rather than oil was disappointing, the reservoir sands and traps were, by and large, encountered as expected."
Good points. Guess we will have to wait for them to tell us the exact percentages. Chances are we will end up with somewhat less of a carry than I initially calculated. But worst case should put us at about 20%, which will be plenty if an elephant is discovered.
Assuming ultimate success, ERHC will be obligated to sell an additional 10% to the government, leaving the shareholders with a 35.5% net carry. That is a significantly better royalty percentage than the typical 18% - 25% here in the USA.
The math:
Gov't of Kenya - 10%
Circle Oil -5%
Partner - 49.5% (55% of 90%)
ERHC - 35.5%
"By virtue of the PSC, the Company holds a 90% interest in Block 11A, which encompasses 11,950.06 square kilometers or 2.95 million square acres. The Government of Kenya has a 10% carried participating interest up to the declaration of commerciality and may thereafter acquire an additional 10% interest in the PSC in which case the total Government participation would rise to 20%.
Circle Oil Limited (www.circleoilandgas.com) (“Circle”) acted as finder in ERHC’s acquisition of the Block by facilitating ERHC’s entry into Kenya, including the introduction of Dr. Peter Thuo, ERHC’s Kenya-based geoscientist and technical adviser who provided liaison services in the pursuit of ERHC’s application. Circle’s involvement provided significant efficiencies, including substantial cost savings, in ERHC’s application process. By virtue of the terms of the business finder’s agreement reached between Circle and ERHC, Circle is entitled to receive a 5% payment on the value of the acquisition accruing resulting to ERHC from the application. Circle has opted to receive this fee in the form of a carried 5% of ERHC’s total interest in Block 11A.
Thanks for the clarification. I see that now in their footnote #2.
That is a very good percentage carry
Current ownership per the 10K puts the total ownership of Offor at 80%. I did not recall his ownership being that high. Am I wrong?
Chrome Oil Services LTD (Sir Emeka Offor)200,285,727 26.19 %
c/o No 22 Lobito, Wuse II
Abuja, Nigeria
Chrome Energy, LLC (Sir Emeka Offor) 103,305,706 13.51 %
c/o No 22 Lobito Crescent, Wuse II,
Abuja, Nigeria.
Sir Emeka Offor 307,796,433 40.24 %
beats me - But I was pleased to see that they retained 45% - I think that is very good.
According to the 10K ERHC sold 55% of the Kenya block for $2 million. Don't know what the other $731,558 represents.
"In October, 2013, the Company entered into a farm-out agreement with an international oil and gas company (the“Kenya farm-out partner”). Under the terms of this agreement, and contingent upon the consent of the Government of Kenya and other conditions, the Company will assign and transfer 55% of its participating interest in Kenya Block 11A to the Kenya farm-out partner for an initial consideration of $2,000,000. In exchange for the transferred rights, Kenya farm-out partner will carry the Company’s proportionate share of obligations and financial costs under the terms outlined in the farm-out agreement. The agreement is contingent upon the Kenyan Government’s approval."
Roses are red, violets are blue.
If we don't hit in Kenya,
Chad will pay us our due.
If Chad does not please,
The Gulf of Guinea remains,
Be it the JDE or EEZ,
One of four is all that we need.
It is a MUTUALLY BENEFICIAL agreement per Peter
Trader, when did the 2 year clock start ticking?
Thanks for the sage advice - I will follow it. ERHC's percentage of my total investment portfolio is already too high without adding more shares. Soooooo, I'll get rid of the car note! I think I was getting greedy.
"Greed is the inordinate desire to possess wealth, goods, or objects of abstract value with the intention to keep it for one's self, far beyond the dictates of basic survival and comfort."
Someone talk me out of my crazy idea. I closed out one of my other holdings today and now have a fresh $10,000. I could pay off my car or I could buy another 250,000 shares. That would bring my total investment to $100,000+ and a book loss of $91,000. And oh yes, that will represent 30% of my investment portfolio. Would I be throwing good money after bad? My average cost would be 20¢ per share. Not bad for a $14 stock. Or will it be a .014 stock?
Please help.
Came in from work, checked the share price, and it's just like the college days after a party all over again: My desk is spinning and I feel like I may throw up.
Tasteless Commentary
Hopefully, soon we will finally have something concrete to place our wobbly legs on. Yeah, I actually have 10,000 shares at 91¢. I have bought at all different prices (and sold some at different prices thank GOD!). My average price is now 35¢. I have been told that "averaging down" is stupid. But the truth is, I have seen this stock run from the teens to 90¢ twice over the last 7 years. And guess what? I don't think it will be too much different this time, assuming we can get a well drilling. A lot is going to hinge on what we had to give up to entice the farm-in. But if they make a discovery well out of it all, we will be in the money.
I have property in the Eagle Ford shale play of South Texas and follow it closely. EOG (the operator)claims each of their wells will produce $400-500 million over their lifetime and costs $6 million to drill. They use 40 acre spacing, so you can do the math. (I don't know the conversion from acres to square kilometers, but I think we are sitting on an incredibly rich asset.)
The ERHE shareholders got hammered by unexpected results from the JDE drilling campaign. Initially we were told that the findings were of the type and amounts expected. Now we find that was a lie, and it explains the share price plunge. Thank goodness they had the intellect and foresight to move into Chad and Kenya. So we have new-found hope!
Good luck to us all.
Steel
You could well be correct. But it sure did take the wind out my sails I'll tell you! Dan speculated that he might have been short of cash after a utility transaction made last December. Who knows, we're all guessing, which is okay. We don't have to know everything. Well, except for that one guy who thinks HDY is better run than ERHE.
Good luck to us all!
MM has a heavy foot on the price. But looking at past history (I analyzed it for 10 years), we need about $100,000 in daily volume to move the price. Of course, that is only about 2,000,000 shares a day, so we are getting there! I dream of making money in this stock constantly, obsessively, but the truth is we need to be drilling in order for the price to move appreciably.
Long and strong, but not strong enough to buy any more! When SEO abruptly declined from participating in the share offering last January, I was shocked back to reality. I didn't buy Dan K's excuse for him. But it may work to our advantage long term: The shares that he was elgible to buy could now be given to our farm-in partner. Good Lord, the possibilities are endless. We clearly are about to get diluted, but that's okay as long as the company continues to move forward in a sensible way. I'm not a pig, but sure would like to see the price go past my original 91¢ a share purchase price.
Do I hear 3.5¢??
I keep watching the MM's push this price down, then make large accumulation transactions at ever lower prices. Makes me sick, but I ain't givin' up.
Can anyone tell me what time the announcement will be made?
66,500 at .05 9:30:11
According to DK, that was the very reason for not participating.
My follow-up e-mail to Dan and his response as follows:
Dan,
Thank you very much for your swift response.
To the point that Chrome is just another shareholder so to speak, then Chrome's
endorsement should not have been publicized to the minority shareholders. The
purpose of that endorsement followed by zero subscription gives an appearance of
intent to deceive.
ERHC may stand by its February characterization that the initial response to the
rights offering was "encouraging", given that total share participation was in
the range of 10% would lead most people to conclude that the response was quite
disappointing. As a consequence, I stand by my characterization of ERHC
management's statement as, at a minimum, misleading, if not clearly
disingenuous.
But again, I do appreciate the speedy response, Dan.
I completely understand your point. Please be assured that ERHC merely referred to Chrome's own news release on the subject. We did not publicize it – we actually tried to make clear that Chrome’s statement did not guarantee they would participate. Below is the only comment I am aware of that ERHC made regarding Chrome’s possible participation – from an interview with Vice President Sylvan Odobulu (http://erhc.com/articles/odobulu-interview/):
Why doesn’t ERHC announce the intentions of its major shareholder, The Chrome Group, to exercise its rights or not?
Please recall that while the Chrome Group is ERHC’s single largest shareholder, it is an independent entity from ERHC. We don’t control their intentions or have authority to speak for them. However, the Chrome Group has already made it public that they support ERHC’s funding plans. Even before the prospectus was filed, they issued a public news release, disseminated internationally including in the U.S, that they support the rights offering. We will know their level of participation – whether they intend to exercise all their rights, or over-subscribe or exercise a portion of their rights, at the close the rights offering when Corporate Stock Transfer reports to us.
We can’t speak for Chrome, but looking at the timing when Chrome issued its news release on the subject in early October, which preceded them winning their bid for the Abuja distribution company with all the related financial obligations, it seems possible that they may have at that time intended to participate in a rights offering. We certainly would have liked all shareholders to participate.
Daniel Keeney, APR
DPK Public Relations
214.432.7556 (DFW)
832.467.2904 (Houston)
Web: www.dpkpr.com
Blog: www.danielkeeney.com
Twitter: @dpkpr
Dan's initial reply"
"Thanks for your note. It would be inappropriate for the Company to comment on
the activities of any particular shareholder. ERHC is not part of Chrome. Chrome
is simply a large shareholder of the Company. We do not have special insight
into Chrome's activities nor its investment strategies. Chrome does not have any
representation on the Company's board. That said, I believe it is public
knowledge that the timing of the offering happened to coincide with the timing
of a major financial commitment related to Chrome's participation in the
Interstate Electrics consortium, which was selected as a preferred bidder for
Abuja electricity distribution company. Bidders were required to pay 25 per cent
value of the bids they made. This is not something ERHC controlled or could
influence, obviously.
Everyone had their own expectations for the rights offering. The management of
ERHC has tried to manage those expectations by stressing that the rights
offering is only the first phase of fundraising. The Company felt obligated to
give its current shareholders the opportunity to participate prior to opening
fundraising up to new shareholders. This decision was in response to shareholder
criticism that a previous private placement was completed without involving
current shareholders. The Company stands by the characterization made in
February that the rights offering was 'encouraging," because numerous
shareholders were expressing their enthusiasm for the Company's plans and future
by participating. We are encouraged today that shareholders have had the
opportunity to participate and the Company can move forward with its other
fundraising activities.
Sincerely,
Daniel Keeney, APR
DPK Public Relations
My response to Dan's attempt to pacify:
At the end of the day, no one likes to be deceived, to be made a fool. Most shareholders, including me, feel led on and deceived. Today's price action confirms it. You, Peter Ntephe, and ERHC have burned a bridge that you cannot cross back over. You will see. "As you sow, so shall you reap."
Letter to Dan Kenney:
"Dan,
I am a 7+ year shareholder. I have believed you and believed Peter when
important statements were made about the company. Please tell me how you can
justify comments that the initial response to the secondary offering was
encouraging when the final minority shareholder participation percentage was
only approximately 25%? And how can the majority shareholder's endorsement of
the offering be justified when his participation was zero?
I look forward to your reply. "
About 25% of the minority shareholders participated. I am guessing that Offor viewed that percentage too small for himself to be fully committed. So here we are.
Apparently Chrome/Offor did NOT participate. I find that shocking. I had to scratch to get the cash, but I did it. Now I feel like the proverbial fool.
I don't think SEO would buy at 7½¢ and dilute it the very next day with a private offering at a lower price. Someone please tell me that isn't going to happen.
Well said Pete. In 2005, I could never have imagined the pain I would endure after asking my stock broker if he had any speculative stock suggestions. My "investment" got started in exactly that way.
As you inferred, IF WE EVER make money on this, it will not come without a high emotional price.
Ah! March, 2006. Thise were the days.
According to my records, that is the last time my investment was in the Green. I purchased 10,000 shares on March 14th at 91¢. To show how times have changed, my broker's sales commission was $320. Wonder what that guy is doing now?
Don't know how I ended up with more than a quarter million shares today. Hard earned money chasing after more. (-: