It is about time ERHE comes back to life.
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Wow, 20 million shares from just 5 top officers of FB filed Form 4's today.
Gee, do you think these insiders might know something?
Good luck Monday shareholders....
Great post!
Great.... AOI new date of news release would be US Election day.... ha ha. Maybe most will get at least some good news that day....
emdyal,
In my eyes, ERHE has clearly communicated the full plan. There is no more detail I want to see until the analysis of the seismic are completed.
The clearly communicated plan only has significant meaning to current shareholders and therefore has little to no effect on potential new shareholders.
In order to attract new potential shareholders, something material needs to get PR'ed. I feel we will get a slight pop in shareprice when the details of the first funding opportunity is announced. I think ERHE gets a bigger pop when they announce the amount of funds successfully raised (assuming a reasonable percent of the first round goal like 70% - 100% IMHO). When they announce details of a signed contract with a date of when seismics will be performed in either Chad or Kenya, ERHE likely get a bigger pop.
I do agree with you that the clearer and more detailed they get with these event driven PR's will have an effect on the amount of the share price appreciation. The jury is still out until they show they can do it correctly but I have confidence that they will.
well stated petemantx!
I view it as a few people expecting the worst or bad news from the meeting.
It is down pretty big in two days on relatively low volumes compared to the ramp up over the past two weeks.
Fun days, huh?
amj23,
What you are asking is not common for most stock placements and nearly impossible to answer to your liking. Try taking a step back from your personal attachment to ERHE and review what is really going on.
Erhe has already disclosed exactly what they should have and that is all we get UNTIL the increased authorized is approved. They have also kindly disclosed that Offor/Chrome is in favor of the increase in authorized.
Once the authorized is approved tomorrow, ERHE will begin the next phase in fund raising which they have given us a general idea of. They plan to make an offering to shareholders first. This is very common for company's and I personally have participated in other company's offerings like the hinted at strategy. They will come out with the specifics of what every shareholder can purchase. It has to be across the board so what Offor is able to do, is also what every shareholder is able to do. What happens to the opportunities NOT taken by whomever, can be offered back to shareholders on a similar equitable basis. ALL shareholders have the exact same opportunity. There are no secret investors, no special increased percentage for Offor/Chrome etc. I see no boogie man in the closet. It is impossible for ERHE to tell you before the placement occurs, exactly who will and who will not participate for all shareholders. They also can't speak for all participating shareholders and what amount of over subscription they may choose to participate in after the initial offering. This is a ridiculous request and has nothing to do with "fair to all". The fact of the matter is, the offering WILL be fair to all when it is released.
Future placements/private placements/exchanges for products & services rendered etc. are a separate transaction and will likely be disclosed when the timing is appropriate. Again, I expect ERHE to release the appropriate details at that time. No boogie man, no secretive partners. All disclosed in PR's or filings when relevant. Suggesting otherwise is purely a scare tactic or paranoia on your part and against SEC regulations which I highly doubt ERHE would risk. If I did think they would risk illegal activity, I would divest from my holdings and move on like any reasonable person should.
Gee, if that is really your view of ERHE (all negative), I think it would be obvious to sell and move on. Good luck on where you go.
Myself, I am a real investor and I will most likely be participating in the upcoming placement of new ERHE shares. I am excited about the potential and I have good confidence in the current management direction. I think the potetial reward will be very worth the risk of adding MORE money to this management and company.
Unlike you, I like the direction ERHE is going. I see the positive developments they have made ADDING assets in great prospective areas. I don't hold ERHE management at fault for the JDZ drilling 5 wells without finding commercial oil. I see ERHE with experts on staff with tons of experience that understand the business and knowledgable about what they have to do. I respect their abilities and the time frames they have provided. I understand they are putting ERHE in a better financial position to accomplish the programs laid out for Kenya, Chad, and EEZ.
That is their guess as to the potential worth of the current proposed 12 - 18 month drilling program. Not counting the other assets or other wells to drill in other places, AOIFF could add up to $27+ per share in value once this area is "derisked".
Off to a good start with the first well and now two more have been spudded.
GLA
amj23,
I agree that it is an important piece of information when ERHE announces the first placement deal. Why don't we through out our guesses of how much and if it is good or bad in our humble opinions. I'll start.
I guess ERHE announce a potential placement of 25% new shares. For every 4 shares you own, you have the ability to purchase 1 more at the previous 30 day average stock price minus a 10% discount. A Warrant rider for 1 additional share over a 2 year period at a 50% premium to the placement price.
I estimate this will raise an immediate $20 million after expenses with an additional $20 million to come in over the next two years as the warrant become in the money.
I think this will be the high side of what they will do immediately.
.15 now.... go ERHE go...
Don't know whats up but I am willing to put up with green while reading all the negative ranting..lol
Seriously, 1.2 billion on 11/15/12?
One would have to assume that kind of pressure on the float will pop the current inflated value down to the likes of google or Apple for a future P/E ratio....
That would put the FB shareprice around $8 ish, correct?
I'll wait for the pre-christmas sale of FB.
Nice post Buffalo Trader.
investor dude -
I think you have only part of the story correct here. You are correct that people spend a lot of time on facebook and store lots of pictures. For now, they will continue to come back and back and back some more.
In reality, this is social media and right now, Facebook is the "in thing". Unfortunately for facebook, there is no barrier to entry in this business. There is just "what is hot and what is free".
You suggest that facebook would make money by having users pay a few $ per year. You guess 90% of active users would pay. I can almost guarantee you that this is way, WAY overstated.
Let me give you an example. In my family (including wife and kids), we count as 7 active users for FB. Yes, all 7 of us have our own facebook accounts/profiles and vary in user status from logging in daily (multiple times a day) to once a week or so (for the youngest - yes below the minimum age required by FB...lol). If facebook came out and said they would start charging $1/year. Our numbers would go from 7 to 1 overnight. Partly because of the hassles of actually paying for an account on the internet without getting a physical item in return and part of it simply for finding what is the next best FREE alternative. Can you say MySpace? I had a myspace account long before I had a FB account. I have not logged in or updated my Myspace account in at least 5 years. In fact, I don't like Myspace but I wouldn't pay for my kids to maintain a FB account. They can suffer through a less superior yet free alternative to socializing with their friends. I doubt very seriously that I am alone in this feeling.
Ask yourself this question. How fast would it take for 1 to 10 current FB engineers/programmers to break away from FB and start up a free site overnight to compete with FB? Right now, people like the free facebook too much and it wouldn't be that worth it for employees to take that risk BUT if FB threatened to charge users an account fee, there would be an uproar and with no other barrier to enter the market place, I think many people would risk starting their own websites to compete for that business.
My thoughts are similar for the initial go around. I think 10 to 20% with a matching number for warrants.
However, I doubt very seriously that we will see the total additional 2 Billion (added) be released. I think they use up to 500 million shares on public offerings over a three year period AT MOST.
I think they are asking for such a large increase to provide the ability to create a block buster type merger down the road. Maybe with the Elands or other companies that already have producing assets.
I also think they will use some substantial blocks of new issues in trade for services. Like 10 million shares plus $1 million dollars to due seismic studies or something along that line. I think we can use shares especially with potential drilling companies early on to reduce the cash outflow and let the drilling (on shore) operators participate in the discoveries more with the shares.
Just having the 2 Billion new share potential will strengthen ERHE negotiating stance for partners moving forward.
All in my humble opinion.
I kinda hope they keep it up. I am still trying to build a position here.
Considering the officers stock options were granted at $9.90 a share, I figure anything in that range is a steal one year from now.
Hopefully, more to invest during this next month.
amj23, honestly, where do you come up with this stuff?
Any positive price movement and volume and it must be a conspiracy. It couldn't possibly be anything the company is doing or progress they are making???
It couldn't possibly be about Kenya being the hotest area in the oil sector in the past couple of months and ERHE has prime real estate with a desire to find a partner.
Maybe tejas is the potential partners buyer????
amj23,
Although ophir did pull out in early 2011, they pulled out of block 3. This was the Lemba-1 prospect and it is located about as far away from Block R as you can get in the JDZ.
It doesn't preclude potential interest in Block 2 which is the closest block to Block R and has many more prospects. According to the NSAI reports, Block 2 had 3 times the gas potential (Unrisked) and nearly 5 times the gas potential (Risked).
Only time will tell
And if you listen to the last presentation several days ago by the CEO, they are only allowed to count a certain amount or percentage of the actual oil net pay that they found. His quote was something to the effect that they may still prove up 4X the current estimate.
It will take a few more confirmation drills and time for the numbers to be adjusted for but the likelihood is quite high IMHO.
Nicely stated. all should read this post.
agreed but what if there is a 50% increase in sp instead? If ERHE does a reasonable job of raising limited cash to get them back on track with fair disclosure, I think it is totally possible and more than likely in my opinion.
amj23, you seem to be jumping to the worse case scenario conclussion.
Africa Oil got cash and carry for 50% with Tullow Oil in Kenya and that was before they drilled and before Kenya was hyped up.
I think we all need to take a deep breath and let this thing unfold. I feel ERHE may have gotten extremely lucky with the timing of this Kenya acquiring. Keep in mind, we first heard of the Kenya interest last year. Now the deal is done (awarded) and then the news comes out about Africa Oil/Tullow hitting a multi billion barrel find in Kenya.
Give it some time, I'll bet ERHE is in a better position than Africa Oil was at the time of their inked deal.
I know I can wait and this share authorization raise is just setting the stage. All is good IMHO.
Good luck all.
wow, too scrary to listen to this presentation.
"23 Billion" barrels is not a dream. It is possible and could be more.
first well drilled out of over 100 prospects.
Thanks kingpindg. It's going to be tough for ERHE to live up to the contractual obligation then. Maybe they will have to find an experienced partner in the region that can...
amj23,
to be fair, I just listened to the replay of the conference call again. I heard nothing about 2017 and the Kenya drilling program.
If the PSC states drilling within 2 years, I can't see how ERHE would not know this and state they wouldn't likely drill until 2017. Maybe I am still missing something.
If they did state that, I would lean towards a miss-speak rather than in intentional planned breaking of their contractual obligations. That just doesn't make sense.
Now, you and I are very much in agreement in that if ERHE fails to provide a very detailed future plan, they will NOT be able to raise the money they think they can. Some of this comes down to timing and order.
I "wish" they would disclose every detail of the proposed stock offering for the next two years before asking shareholders to vote on the increase in authorized. And to take it a step further, I wish they would earmark the raised funds to the specific planned spending or drilling campaigns. Unfortunately, it doesn't look like ERHE is going to do it to the extent some would like and/or the order they would like.
They are asking for "let us have your permission to issue new shares up to 2 billion more first" and "trust us, our goal is to improve shareholder value with this". They are also being somewhat vague as to how much they plan to raise and when. I reiterate my opinion that we will have a much better feeling for the offering once we see the details in the different offerings down the road. It looks like ERHE management wants permission to create the offerings before they disclose the planned detail of those offerings. Who knows, maybe they will surprise all of us and provide a specific plan in the next couple of weeks.
amj23,
this is not meant as an attack but more of a clarification because your response does not match with my understanding of the potential here. If you don't understand the possibilities of how ERHE may use the 3 billion shares then I can understand your negativity. Let me clarify
I'm in and will participate up to a certain dollar amount given a standard offering. By standard offering, I am expecting a very slight discount to no discount on the 30 day average share price + a 1 to 1 ratio of warrants to purchase additional shares at a higher price for up to two years (Extremely similar to the private placement made last time). The main difference I see is that they will offer this to current shareholders first. Not only that but it is extremely likely that they will have pre-buy off from Offor and Chrome for 50% of the offering.
Right now it would be something like this:
Offering 25% additional shares (of current holdings as of ##/##/##) to be purchased at a price of .10 (last 30 day average approx .115). Offering comes with an equal number of warrants at .20 for up to 2 years.
If you think about this type offering (using rounded and estimated numbers), this is offering approximately 187,500,000 (25% of 750 million) at .10 now. Let's say between current shareholders and an open offering to current shareholders to pick up extra percentages not taken, ERHE gets 100% participation (also very likely considering it will allow Offor/Chrome and insiders the ability to increase percentage holdings). This will raise approximately 18.5 million dollars immediately and the share count will raise to 950,000,000.
Now they use the money to do some seismic studies on the Kenya block and go in 50% partners with Tullow Oil (not completely out of the realm of possibilities). They must drill within 2 years the first prospect (great news by the way). Now let's say they drill at the end of 2013 (still very doable in this example) and the hit 100 feet of net pay. On land, that would be commercial! ERHE share price will raise anywhere from 500% - 1500% from the .10 range easily (look at AOIFF for an example this year in Kenya). If ERHE shareprice raises anywhere from .50 to $1.50 due to the discovery. The people who own the warrants from this offering will now be holding the ability to purchase 187,000,000 more shares at .20 for an immediate 150% or greater profit (can you say in the money). This will give ERHE another approximate $37 million in cash within two years and the outstanding share count will raise to 1.137 billion.
Expand your mind a little and think about it. ERHE could do this exact same example twice and with the Chad blocks. This is all realistic, possible, likely and doable no matter how much some small whining vocal nay-sayers cry about on this board.
By the way, for all the "Doom and Gloom; Nay-sayers; the worlds coming to an end; this is soooo unfair" actual shareholders out there, I will be purchasing a percent your share offerings too (along with Offor).
Yes. The tip of the iceberg. But, who can post some reasonable valuation estimates based on some future success in the current drilling sites? We experienced the share price going to $11+ on the success of the last well. There are one or two being drilled right now (?) and I think three total scheduled by end of year. With preliminary pay numbers on the first well, it still looks to be dramatically undervalued (granted it will have to be closer to production before full valuation of the pay numbers are achieved).
I have increased my position lately here too. Glad I am along side the insiders...lol.
Any idea on the timing for hearing about the drilling that spudded late August?
buyout not happening anytime soon. Insiders are not going to give up majority before they have a bigger market share. To much upside short term IMHO.
Watching for an entry price....
Good luck all,
Strategyone
That is some pretty good updated information on ERHE's website. Thanks for letting us know they updated it TOB.
I agree tryoty.
This is Ntephe's baby.
A couple more interesting points I would like to throw out regarding today's hiring news....
1) Non-Nigerian, to me this means he is not Offors, friend, cousin, mother-in-laws uncle..... etc - Positive for credibility for a global US based company.
2) Very extensive experience - Positive (comment .... How the heck does ERHE attract these people).
3) Most recently worked out of Houston which probably means he will work out of ERHE's Houston office as a main base. - Positive and someone to utilize some of that office space, lol.
Last comment. For ERHE to attract the likes of the professionals they have on staff, they must have way more to the story that what this board is interpreting. This is not just one lucky hire. This is multiple highly skilled/experienced experts which likely have great opportunities available for other companies. Their likely .75 stock options must have serious appeal to them with insider information.... end of comment.
Wow, Another new hire - pretty impressive:
"ERHC Energy Inc. Appoints Exploration Manager
HOUSTON, August 27, 2012 – ERHC Energy Inc. (OTCBB: ERHE), a publicly traded American company with oil and gas assets in Sub-Saharan Africa, today announced the appointment of Gertjan van Mechelen as Exploration Manager. Van Mechelen will oversee exploration activities at the Company's growing portfolio of onshore and offshore assets in Africa.
Van Mechelen brings more than 35 years experience in oil and gas exploration. He worked previously in Africa, Southeast Asia, China, Europe and North America with ConocoPhillips and TransAtlantic Petroleum. He joins an impressive ERHC technical team, which already consists of Senior Petroleum Engineer Dr. Ken Seymour, Senior Geoscientist Michael Shafie, Geologist and Geochemist Dr. Peter Thuo and Geoscientist Martin Wensrich.
Van Mechelen's appointment brings extensive experience in coordinating oil and gas exploration work programs to ERHC's technical team. His expertise includes interpretation, prospect generation and farm-in evaluation.
Van Mechelen earned a Masters Degree in Structural Geology and Exploration Geophysics from Rijks University Utrecht.
ERHC holds oil and gas exploration interests in the Republic of Kenya, the Republic of Chad, the Sao Tome and Principe Exclusive Economic Zone (EEZ) and the Nigeria-Sao Tome and Principe Joint Development Zone (JDZ). In the Republic of Kenya, ERHC has 100 percent of the interest in Block 11A, which is in the vicinity of Block 10BB where significant oil discoveries have recently been announced. In the Republic of Chad, ERHC has 100 percent of the interest in BDS 2008 and Manga, and 100 percent interest in half of Chari-Ouest Block 3. In the EEZ, ERHC holds 100 percent working interests in Blocks 4 and 11 with an option to acquire up to 15 percent working interests in two more Blocks. In the JDZ, ERHC holds working interests in Blocks 2, 3, 4, 5, 6 and 9.
About ERHC Energy............"
dest_golf,
My thought is that we have already priced in the 'same ol, same ol' from Peter. I know, I am not expecting any new news. I can hope that I am wrong but I really don't expect anything surprisingly good.
I do, however, expect them to give their best efforts on explaining the general plan for the expanded shares. To the degree on how vague that explanation is, I think, is where the direction of the share price goes but only temporarily.
My thoughts also lean me towards any short term negative being short term only. I hold to the thoughts we have priced in almost all negative news at this point. IMHO, there is absolutely nothing on the near term horizon with any time table. Besides going belly-up, the next news I expect would be some kind of positive momentum coming from any one of the 4 main fronts (JDZ, EEZ, Chad, Kenya). Ironically, the two newer fronts should have a shorter time frame to progress as opposed to the high risk, high cost deep water exploration of the JDZ and EEZ.
I do feel any kind of partnership news for any block will give ERHE a healthy pop. It is looooonnnnng overdue.
3 Billion WHAT?
I haven't chimed in yet on all this expanded share news so here are my thoughts:
First impression of expanding authorized shares from 950 million to 3 Billion was major negative. Yes, that is natural human emotion. Worst case scenario immediately runs through my mind. Tripling the potential share count with the current information released on the market is a very scary thought. First thought was . . . . here comes .05 a share.
Now, after cooler heads have prevailed and one works through the "fear of the unknown" (what is ERHE really trying to do), one can start logically analyzing this news. First, SEO (and company) are the majority shareholders. Any negative effect on the share value (greater than the short term emotional effect) will definitely effect SEO's shares too. I would almost bet that SEO could fairly quickly do an outright sell of ERHE at some price around .50 (probably greater). I would say 3 to 4 years ago, this price would have been $2 - $4 but he wanted $5 - $10 at that time. Oh well, circumstances have changed since then and now we have to adjust our thinking accordingly. Now, assuming there is a quick and less stressful cash out for SEO at some share price point (whatever you decide that is), this is the bottom valuation that the ERHE team needs to beat with their expansion strategy. In other words, whatever plans or business strategies that Peter and his team come up with, it would have to provide a fairly attainable future value and a much higher price than what SEO can sell for now with a lot less risk, right? This type of thinking should be able to sooth the negative thoughts that go through some investors heads regarding mass dilution.
Keep in mind, there is proof on this board that some "posters" can't think openly about all the options and will only subscribe to the worst case scenario of doom and gloom even though standard logic should override this thinking. Some of these posters are true investors with over-riding skeptical thoughts, others are likely traders that feed off of the emotions they can try to emphasize for personal gain (I am trying to be polite and calling a spade, a spade). To be fair, the flip side also exists. There are posters that only discuss the most optimistic potential outcomes ( lets fast track this baby and see $20 a share by Christmas or Hanukah or Easter or what-ever, lol ). ERHE had a lot more of these overly optimistic posters back when the JDZ blocks were newly awarded. There are still many here that can hold on to the dream of best case scenarios (every block hits a commercial elephant field sized discovery) and the truth will likely fall somewhere in between. In my opinion, it will only take one commercial sized discovery in any block for ERHE to hit the home run (well over $1 valuation).
That said, lets continue to discuss the logical strategies ERHE might do with this expanded share count.
1) The simplest thinking is, disclose no new information or detailed plan and float a bunch of shares at whatever price the market will bear. I give this option the least likelihood of happening but still possible and I feel this is what many of the nay-Sayers are suggesting as the reality they see. Because SEO would be effected a LOT more than I would, I really don't see this as being a realistic option.
2) Strategic floating over time but still without attachment to specific plans would be the next least favorable outcome for the short term share price, IMO. This is the "I have a bunch of new shares and I will float them for cash when I need the money, thank you very much". Similar to my reason above, since it would take more shares or dilution with this strategy than a few more options yet to discuss and SEO feels the same effect, I don't see this as being the option chosen. BUT - with some of the historical communications experience we have endured from ERHE, this has a slightly more likelihood chance of happening than #1 above UNLESS ERHE gets lucky or learns from their past mistakes.
3) Full transparency, strategic floating over time WITH attachment to specific business plan or strategy. This is what I hope ERHE management team can do as a minimal level of business acumen. Much simplified example PR: "ERHE plans to raise $5million in the next 3 months by placing up to 20 million shares in the market. First choice of purchase will be existing shareholders at 1 share for every 37 shares they hold for a price of X. This purchase comes with a warrant option to purchase up to 5 more shares at Y price for 2 years. For shares intended for this specific placement that is not acted upon by shareholders will be offered through private placement under the same terms. This $5million dollar placement will be used to do seismic studies on the current awarded blocks in Chad, Kenya and the EEZ." I personally view this approach as the easiest for the investment public to react to and would help support the share price which would in turn lower the number of future shares needed to be floated.
4) AIM! ERHE successfully floats a new block of shares (ie. 100 million shares) at a price of X on the AIM to raise a larger amount of $. This would likely cost more to set up but may be a good approach to raise $50 million plus in money for a larger project/strategic plan. I would view this as a positive as it would likely require some specific disclosures for the public offering to establish a reasonable price.
5) Strategic Partnership arrangements. Now this is where it could get really exciting and immediately have a boost and/or support for the share price. Example: "Tullow Oil has agreed to purchase 50 million shares of ERHE for $2 per share and will become a 50% partner in the Kenya exploration on block 11A. Tullow Oil has agreed to become the primary operator on this block. Shares are in a preferred class A status with minimum voting rights and with a 2 year lock up period". This type of arrangement is more likely than I bet most here realize. I am not saying this is going to happen in this specific manner, just that companies like ERHE can create a win/win situation with a strong business partner with this type of arrangement.
6) Similar to 5 above but on a larger scale. Think "white board" here for those that were around for that bit-o-history in ERHE. This would be a strategic placement of most likely a separate class shares (also with different voting rights) to form a conglomerate partnership for joint development of a region (think JDZ or EEZ here). This may have far reaching effects into the block % ownership of existing ERHE rights but would likely result in a much higher share price and better support.
I am sure there are other options or a combination of options above but none of these are possible on a large enough scale without expanding the current authorized shares.
I, personally, think the proposed increase in authorized shares could be a great positive BUT I would like ERHE management to do a better job of disclosing plans and a better job of pitching this to the current shareholders BEFORE they get my vote. At a minimum, a more detailed strategic plan disclosure would build better support of the share price.
All IMHO
I hope that with this recent run to hover around a 52 week high and over 2 million shares traded today, maybe those that are convinced management is that bad, they have a good opportunity to sell their positions and move on.
Hopefully, never to be heard from again......
Hey, one can hope can't they, lol.
Good luck all
tryoty,
This is an excellent reminder that many here seemed to have forgotten. There were 56 identified prospective structures in the JDZ. So far 6 have been drilled into (1 in block 1 and 5 in blocks 2 - 4) and 1 found oil. A 7th hole is being drilled by Total now in block 1 with unknown results.
So if we use basic math and 1 out of 6 holes drilled so far found oil (16.6%) and there are still 50 undrilled prospects, that leaves either 8 or 9 prospects to discover oil shows IF they don't learn anything from the 6 holes drilled to date.
And some people here are claiming the end of the JDZ...... If you were running state run Sinopec, would you be exiting the JDZ this soon?
I think there is a much bigger story yet to be written about the JDZ. Luckily for ERHE, the diversification of the EEZ, Chad and now Kenya, increases the chances of funding until a commercial discovery is made.
Nice Close! Up 20%
Ok, now I would fall out of my chair if they had a Kenya farm-in that quickly... lol.
I totally expect them to be working on that but even I think we are 3 to 6 months away from news for a farm in type arrangment. Although, now that I think about it, they have been working on the Kenya deal for a long time to begin with.
looking forward to any news.
I think something else is up. In the last 30 minutes over 500,000 shares traded and the price is above .13.
Hopefully, news after the close. That is what it smells like to me...lol.