I know I am going to get grief for this message but so be it. Do you really think we should be wasting ERHC's time with a bunch of phone calls to IR? Dont you think they already have their hands full? They only have 3 or 4 employees and imho they have bigger fish to fry then worrying about what the investors in the company think. I dont really think I would be wanting to P off Emeka Offor. And since there are only 4 employees word might get back to him that shareholders are being a pain in the arse. They dont have time to reassure shareholders about thier investment.

That is why it would be a mistake to be out of this stock. Because like LNG you never know when the fuse will be lit. You dont want to be left behind on the day that happens.

btw nice call on LNG.

Well look on the bright side. The company can never be accused of trying to pump up the share price. I think they realize that there is a definite negative perception in the market about ERHC being a scam/pump and dump. So they seem to be going out of their way to prove otherwise.

Hopefully they are taking the position that nothing is finalized until PSC's are finalized. And then after that point they will begin selling the investment community on the enormous rights they own in the JDZ.

I would think they would want to get the share price up at some point. It is advantageous if they are trying to raise capital.

I can feel you pain. But if you take a day to day view of this stock you are going to be frustrated. You have to have a longer term perspective on things. I dont like it any more than you do but thats just the way it is. We need PSC's signed. Then we need an announcement of drilling schedules, and then things should begin to move. Until then it will probably be pretty boring in these parts.

This is my point. Those who have been pessimistic regarding timelines, pricing etc have been correct throughout. So the tendency is to just be pessimistic about everything that way you feel you will always be right.

However we have to look at what caused the awards to be delayed time and time again. IMO it was the disagreements between the two countries and the politics within the two countries that caused all of the delays. Politicians promising things to the various companies and feeling as if they have to deliver on their promise of getting them involved in the blocks.

Well now that we are beyond the awards process the politicians role's have now been minimized. And IMO they were the ones holding everything up. So now with the PSC's it will be the companies themselves dictating the timelines. Not a bunch of greedy politicians who are only looking out for their own best interests.

And imo the companies involved want this done as quickly as possible. And there is no poplitical bs to stand in their way. So I tend to believe Barry this time.

See post 6642...

I cant blame you for being skeptical. We will just have to wait and see how quickly PSC's will be signed. I think BM will be in the ballpark this time. With $60 oil these companies have every incentive to move things along as quickly as possible.

I think political issues between Sao Tome and Nigeria is what really caused all of the delays in awards announcements. Sao Tome wanted more money up front, Nigeria wanted things based on drilling timelines.

Now that we are beyond the awards most of the politics have been taken out of the decision making. Thats why I believe things will move more quickly than people think. As far as I can tell we dont have to worry about the various political parties holding things up to get their way or get their compaines they promised favors to into the mix.

Nwtf I dont believe it will be two years before there are reserves. If you choose to believe the Barry Morgan article he said signed PSC's within a month. That would mean drilling would take place anytime between late 2005 and mid 2006.

And that should provide a nice shot in the arm to share price. As will a successful well on Block 1.

The above hinges on Barry Morgan being correct about signed PSC timelines.

Thats a good point. LNG has a $1.5 billion market cap on $2 million in revenues.

We have a $350 million market cap on no revenues.

They are both asset plays at this point.

EGY dropped right at the close due to the Russell Microcap Index rebalancing. It really should have closed at $3.65. But at 4:02 PM the rebalancing went through that dropped it to $3.52. Unfortunately that was counted as the last trade of the day instead of an after hours order. The stock had not trade anywhere near $3.52 all day. It was around $3.65.

Part of the problem with EGY is the overhang from 1818 fund dilution. It appears as if there is still some overhang left but it should be dwindling. That is the main reason the stock has underperformed.

EGY is in a similiar situation now that TGA was in last year. TGA had some dilution in the early spring of 04. The stock went sideways for 6 months. No one could understand why the price wasnt moving. Then it popped about 6 months later and never looked back.

Imo EGY is in a similiar situation and hopefully the Etame 6 will be successful and will move the share price. I wouldnt be surpirsed if results are announced early this week.

EGY is drilling the Etame #6. Results could come at any time now. If successful that should provide the impetus to move EGY's share price. I wouldnt be out of EGY right now. Unless you believe they are going to drill a dry hole.

58. The Marathon "Gorilla " is the world's largest and heaviest mobile off-shore jack up (self- elevating) oil rig. This colossal rig, built in Vicksburg by Marathon LeTourneau Company, stands over 600 feet tall and weighs approximately 38 million pounds. The monstrous drilling platform moves across land at a snail's pace of 100 feet per day.

RE: FAB the seller (From Bullwriter on RB)

It's true the lawsuit was for $57 million but the settlement valued the 60.6 million shares at $0.41.
http://edgar.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=3362292&Type=HTML

So the actual value of the award that goes on FAB's books is around $24.9 million.

Now put yourselves in the shoes of the banker. You have an asset that is extremely volatile. After you book it's value ranges rises and falls from around $25 million to $60 million then back to $30 million today.

Bankers do not like that sort of variability, even if it is on the upside.

I don't know if FAB sold, or hedged. But ask any banker and they will tell you that at the very least the bank would hedge the position. The only way to hedge a long position in a stock is to take a short position.

If FAB is fully hedged at say $0.60/share then they have locked in a value of $36.4 million.(Nearly a 50% gain over the $24.8 million initial value). All they have to do to realize the value is deliver the shares to GNET or whoever helped them short.

Everytime GNET gets a buy order they place FAB's shares into the buyers account. This would explain why GNET is always on the ASK selling shares into the market but never on the BID and buying from the market.

It also offers a potential "seller" as the share price rises. If FAB is not or was not fully hedged then everytime the price hits $0.82/share they can literally double their money by shorting at that level and covering with their $0.41 shares. For a bank that would be easy money and extremely hard to pass up, even if they had a "hunch" the price could go higher.

So, I feel that FAB either sold or more likely has hedged their shares. I have no idea if they are done. But if they are then the price can higher and their will be no short squeeze as FAB already owns the shares and won't have to buy them to cover.

If, as Larry suggests, GNET is helping FAB then maybe their is a share count for GNET at the ASK since 11/10/04. If it's less than 60 million then there could still be more shorting.

Sorry to make a long post longer but if you are interested in who has to file an SEC form when they sell then read the definitions below. The way I read it is that FAB should have filed a 13-D when they acquired the shares but since their ownership percentage is under 10% they are not required to file if they sell.

Insiders
These are directors and senior officers of a corporation-in effect, those who have access to inside information about a company. An insider also is someone who owns more than 10% of the voting shares of a company.

Control Persons, Insiders or Affiliates

Officers, directors, policy-making executives, major shareholders (generally owners of 10% or more of outstanding shares), and other people who are in a position to directly or indirectly control the management of the company.

This includes spouses, family members who live with the control person, and other entities affiliated with control persons, as defined in Rule 144. Securities trading by a control person of the issuer is subject to restrictions, regardless of whether the security is restricted. A control person must complete Rule 144 documentation and comply with Rule 144 when selling control securities.

Rule 144

SEC Rule 144 is a means by which restricted and control securities may be sold in compliance with federal law and regulations. Rule 144 requirements depend upon who owns the security, the length of time it has been owned, and how it was acquired. Rule 144 applies to the resale of restricted securities as well as to restricted and non-restricted securities sold by control persons. To sell the security, some or all of these requirements must be met:

• The issuer must be in compliance with SEC reporting requirements
• A holding period of one year must have been met by the shareholder. However, a control person may sell unrestricted securities without regard to the holding period. Volume restrictions still apply.
• The amount of stock sold in any 3-month period does not exceed the volume limitations which are the greater of 1% of the outstanding shares or the average weekly trading volume for the 4 calendar weeks preceding the filing of a Form 144 notice. A Form 144 notice must be filed in certain transactions
• The stock must be sold in a broker's transaction or a transaction with a market maker. Solicitation of purchasers is prohibited.

Form 4
The form required by the SEC for a change in the holdings of an individual owning 10% or more of the outstanding stock or in the holdings of a company officer.

Form 3
A form required by the SEC and the stock exchange from all holders of 10% or more of a company's stock and all directors and officers, which details securities owned.

Schedule 13d

This Schedule discloses beneficial ownership of certain registered equity securities. Any person or group of persons who acquire a beneficial ownership of more than 5% of a class of registered equity securities of certain issuers must file a Schedule 13D reporting such acquisition together with certain other information within ten days after such acquisition. Moreover, any material changes in the facts set forth in the Schedule generally precipitates a duty to promptly file an amendment on Schedule 13D.

The Commission's rules define the term "beneficial owner" to be any person who directly or indirectly shares voting power or investment power (the power to sell the security).

(Voluntary Disclosure: Position- Long)

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Interesting discussion on RB about First Atlantic Bank being the ones who sold shares. Especially during the awards announcements. Sounds like a possible reason for the limited upside on awards day.

Rancho just imagine the enthusiasm on this board when the ERHC consortium announces they have begun spudding the Offor #1`well in Block 4. If you think the countdown to awards were exciting this will dwarf that. Now think about the excitement of multiple wells drilling on multiple blocks. That is the true rush of investing in oil stocks. The countdown to results on an oil well.

I want to be fully loaded with shares when those events begin.

Rancho, first of all Im just an individual inestor like you who just happens to have invested primarily in small cap oil stocks. I dont have any connections in the oil industry whatsoever.

Its hard to quantify exactly how each event would impact share price. The reason? The stock market rarely reacts the way you expect it to.

As I said before, just about the time when we all start believeing ERHC will not move up in share price anytime soon, then it will unexpectedly start to run. That is the nature of the stock market. Expect the unexpected.

Bottom line: I wouldnt be out of ERHC right now. If I were and it began to take off I would be kicking myself for years.Ive made that mistake before on another stock and I will never make that same mistake again. Just when you least expect it ERHC will start to run. I just hope someone doesnt attempt to put a cap on the run by dumping shares like they did on awards day.

With $60 oil events will move quickly so that greatly works to our advantage. They will make the JDZ the number #1 priority because they will want to drill on their properties with the largest potential targets. So this bodes well for PSC's getting done quickly and drilling rigs becoming available.

Rancho you asked for the average investor. But oil indutry people and wall streetshould react more enthusiastically in the short run on PSC's being finalized etc. For average investor:

PSC finalized - Miminmal

Drilling Program Announced - Buzz will begin

Drilling program announced - 3-6 months some will begin to rotate into ERHC

Drilling Program announced 6+ months - People will wait several months before buying in

Drilling Begun - Enthusiasm will be great

Doug rule number one in the stock market is that the majority of investors are very short sighted. So they take a quick glance at ERHC, see 700 million shares outstanding, no revenues, and most importantly no active drilling program and they jump to other oil stocks that have current drilling programs underway where they can make a quick buck. Why park your money in ERHC and have to wait 6 months to a year for drilling to get underway when they can put their money in hundreds of other oil and gas stocks that are drilling wells right now and taking advantage of $60 oil?

The drillbit turning is what creates investor enthusiasm in oil stocks. Nothing else matters. So when a oil company has no drilling program underway there is usually no investor enthusiasm for the stock. TGA is currently drilling the Marakah well. So there is a buzz and excitement in anticipation of well results. EGY is currently drilling Etame #6, so that creates enthusiasm and people put their money into that stock waiting for well results any day now. I could go on and on. ERHC? Why put your money there? They will not be drilling any new wells for months. So it is viewed as dead money right now.

That is the mindset of the average investor. They want to put their money where the action is right now. They dont want to park their money in a stock where no drilling activity will be taking place for 6 months to a year. I own a stock EGY that has a great balance sheet, great earnings, and the stock has done nothing for about 9 months. Even with great earnings and great cash flow. Why is that the case? Because it had been a year since they had attempted to drill any new wells. So the stock has been languishing. Now they are beginning o drill the again so the stock should begin to run. (provided they dont drill a dry hole.) Small to mid cap oil stocks move based on active drilling programs.

You can't gauge investor reaction to ERHC by reading messages on this board and RB. Go to other oil and gas boards on yahoo. When ERHC is brought up the person gets run off the board for bringing it up. There is very little enthusiasm or discussion for ERHC on other oil and gas message boards. People see it as too futuristic. They want to make a quick buck now. Not a year from now.

Thats why intelligent people like you and I take advantage of the short sightedness and load up on ERHC before others get in. You and I know that everything looks great for ERHC. We just have to be patient. Once the consortium starts announcing drilling schedules and drilling gets underway then a buzz will be created about ERHC and that will start driving share price. In the mean time we just have to be patient and accumulate.

Let the dumbies miss the boat in it and pay two to three times the amount we are. They should be buying in right now. If they are too short sighted to do that we can take advantage of it and should.

Doug there is very little buying interest in ERHC right now. That is why the stock is stagnant. The volume is miniscule, especially for a stock with such a large outstanding share count.

Very good news day today for ERHC. If all of these events come to fruition then things will start getting exciting around here around Christmas.

Oil at $60 a barrel certainly doesnt hurt matters. It gives these companies a sense of urgency that they might not otherwise have. In addition Im sure they would rather go after larger targets vs. smaller fields. So high oil prices should definitely work in our favor.

"Both ERHC and BVI-registered Equator Exploration are touting preferential acreage deals in the EEZ. Lawsuits have yet to fly, but it is understood the government of Sao Tome has already been served notice by lawyers acting for the Texan company that it will not compromise on rights it claims are secured by treaty"

Good job Emeka. Stay on the offensive!!

Ruby great article. Thanks for posting it. Things look much better now. Hopefully the timelines are accurate.

OT: Dat, nothing is a certainty in the stock market though.

OT: They are currently drilling the Etame #6 which is an infill well in the sweet spot of the field. It has about an 80% chance of being successful. They should be reaching total depth on this well within a few days. Then well results should be announced anytime within the next few weeks. Hope that helps.

OT: When I plugged EGY into that chart it has it running about 80% in the next two months. I would say that is fairly accurate. It is one of the few undervalued oil stocks. It has a PE of 7 with $40 million in cash. They are drilling a well right now with results within a week or two. It has a high probability of success as it is in the sweet spot of the field. The well is being drilled in the Gulf of Guinea in shallower waters. Rumour has it that EGY is buying the land that Pioneer recently announced they were selling.

Stock is currently at $3.64 I would expect it to be in the $6 to $7 range by August.

(OK that is my one stock tip of the year and Im done)

Rancho that is true about Block 3 imo. In fact I wouldnt be surprised to learn that ERHC was asked to bid for an operatorship in Block 3 so that they would lose. That way it wouldnt appear as if they had won everything they bid on.

Rancho I believe you hit the nail on he head. That is exactly the way I see it.

P.S. Thanks for the updates Mark.

More than 2 million shares were traded on awards day.

I would like to hear deadeye's thoughts on this.

Reverse Split? I dont think Offor would be in favor of seeing any kind of reverse split. He owns too many shares and wouldnt want to see his own share count reduced. Lets say they did something on the order of a 1 for 6 reverse split. Then Offor's share count would be reduced from 300 million to 50 million.

I dont think Offor feels it would be in "his own" best interest to see his share count drop so dramatically.

I for one, would be totally against any reverse split. I know that the market cap is the same before and after they occur. But what typically happens is a company does a reverse split. Then the price usually drops dramatically afterwards. Then the company issues more shares to raise capital and you end up with 1/6 of your shares while the overall outstanding share count ends up rising back to where it was pre-split.

I was in another stock last year where the exact same discussion came up on the message board after a company announced they were doing a reverse split. People tried to argue that reverse splits are good and often work. Well the stock is now down 400% a year later and the shareholders who have held since pre-split will have a difficult time ever getting back to even, let alone making any significant money. Now the company is announcing additional dilution to raise capital which will make it even more difficult for the shareholders to make up their money.

When reverse splits occur, the company is basically raising money on the backs of the shareholders. And those that held pre-split rarely make any significant money on their investment.

I did not invest in this stock so I could see marginal returns and see my share count reduced by splits and dilution. I bought this stock to hit a home run. I am betting Offor feels the same way. Thats why he will say no to any reverse split.

The price might pop a bit on awards acceptance. Then it will pop once again with signed PSC's. Then it will pop again if Chevron/Exxon hit a nice well in Block 1. Then it will rise once announcements are made with regards to drilling schedules.

So I probably came across a bit harshly when I say no price movement until first oil.

EEZ info from Yemenoil:

About EEZ...That news really doesn't apply to Equators and ERHE rights in the best 5 blocks. From Equators recent releases they expect to begin working on their block choices in the 4th quarter. Those top 5 blocks that ERHE and Equator gobble up do not have to be auctioned. Per the Equator release..."Equator plans to select its two option blocks and commence negotiations on production sharing contracts with the government for each block by the end of the year. Once the production sharing contracts are finalised, Equator then intends to undertake 2D and 3D siesmic programme on each block prior to farm-out and drilling of the two blocks."
That was written last year and Equator is shooting seismic now. Appears they already know their blocks and ERHE should have a pretty good idea of which one they want, too.

(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)



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I share your frustration over the share price. Certainly it is disaapointing. However, just to keep things in perspective, the companies have not even formally accepted the bids yet. So unfortunately we are in the 1st inning of a 9 inning game.

I dont really understand what all of you think ERHC should be doing to support the share price. Imo there is not much they can do. We are too far away from first oil for there to be any impetus in the share price. Why would anyone feel any sense of urgency to buy ERHC now? There is no sense of urgency. As drilling plans begin to be announced that should all change. But I do not believe it will happen before then. So those of us who choose to stay in are going to have a long wait.

Would I like the company to be more responsive to its shareholders? Yes. Do I think they could make a significant difference in the share price? No

Lets not forget one other thing. When you only have three employees it is a waste of company time and resources to be spending all day trying to answer shareholder concerns. ERHC doesnt have the resources to babysit and reassure. The best way they can move the share price is to move thing along as quickly as possible. Unfortunately some of that is beyond their control.

dat that is very possible. It could also be possible that ERHC is not allowed to use one of its 15%ers in the Sao Tome #3 selection as well as that block would go 100% to Sao Tome.

That is why I do think a possibility exists that the two 15%ers can only be used in blocks that are actually auctioned, from the 6th selection on down.

That would be the perfect scenario for ERHC. We could go ahead and make our two 100% selections well in advance of the auction. And we wouldnt have to worry about paying any signature bonus fees on the two 15%ers until 2007.

That is a good question. But I am pretty sure that EEL is in the process of selecting their two blocks. So if that is the case they are not waiting on any auction.

I see your point about our two 15%ers and the required signature bonuses. Maybe there is a stipulation that they cannot be used in any of the first 5 blocks. That is obviously a wild guess on my part. Nevertheless I am certainly hopeful that we will not have to wait until 2007 to select out two 100% blocks.

(In sum, Im pretty clueless on exactly what is taking place in the STP EEZ. Maybe I should call EEL and ask them about timelines.)

oiljunior,

It looks like you will have plenty of time to buy back in and accumulate ERHC shares. Good for you. (Bad for me lol)

Well earlier in the year it was de Menezes himself in an article back in January who stated that they hope to launch the Sao Tome EEZ by the end of the year.

So that is what started the speculation that they would start the round this year.

I wonder if EEL has selected their two blocks. If so then we would be waiting on the Sao Tomean govt to make the third selection then ERHC would pick 4th and 5th.

I would have to believe that ERHC would make their selections well in advance of the actual auction starting in 2007. If Sao Tome was in a risky mood they would allow some drilling to occur first in the first 5 blocks and then have the auction.

Sao Tome slates 2007 for round
22 June 2005 15:36 GMT

Sao Tome said it aims to launch the first oil exploration licencing round for its Gulf of Guinea waters in 2007.

(This article is on Upstream Online today. It looks as if Sao Tome is aiming to launch their licensing round in the Sao Tome EEZ some time in 2007. Hopefully ERHC will be allowed to make their selections well before then.)

bsk, Do you ever post on the TGA board? Afre you franjewy? Just curious. Nice comments though. You are correct on all counts imo.

My guess goes along the lines of what nwtf had to say on RB. It will be at least 6 months until signed PSC's and probably longer.

First drilling wont take place till the end of 06. Look how long it has taken Exxon/Chevron in Block 1. The PSC was signed in January and they wont drill the first well until one year later due to rig unavailability in West Africa.

Noble apparently did promise 3 wells within one year from the point PSC's are signed. So hopefully the PSC get signed within 6 months and Noble starts drilling mid 06.

That would be the very earliest we could expect any drilling. Middle of 06.

Thats why ERHC will be dead money for 12 months.

I know that sounds harsh but that is what I really believe will happen. I wish someone would have been saying all of this a year ago. I wouldnt have bought the stock when I did and wasted so much time.

Dont get me wrong. I think ERHC will be a great stock. But for those of us who bought in the .40 to .80 range we bought in way too early.