It is about time ERHE comes back to life.
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Scapegoat 101.
It amazes how so many vocal people here try so hard to lay blame for the current share price of ERHE on a single person.
Really people. Try thinking this one through just a wee bit. When the stock price went from the teens up to .85 a year or so ago, did you all scream praises for Ntephe? So why when it tanks, do you single out him? Don’t get me wrong, I agree that Ntephe has made some mistakes and he is not the best communicator to the typical US based, OTC:BB stock purchasing gambler because we (I include myself in this group sometimes too) all bought into the story of instant, guaranteed riches overnight. But really, it is not Ntephe’s fault ERHE’s share price hasn’t shot to the moon yet. And, to top it off, it still may.
If ERHE fired Ntephe tomorrow, hired away Total’s CEO the next day and the following day the new CEO made a statement that said “No oil was found in the 5 wells drilled in the JDZ but we are still reviewing the data for potentially drilling in the future but we are waiting for 6 months for Block 1 drilling results”, where do you seriously think the stock price would go? Yes, yes, yes… if the Total CEO switched ships to ERHE, we would get a bounce on the confidence statement that would bring to the market, BUT it would not change the timing of when the next set of news items will come. The stock price would still drift WHILE we wait for the next potential news.
My suggestion to the scapegoat artists on this board. Give it a rest for three to six months and see what happens. Take a break from the daily watching. We all know nothing is going to change the CEO short term so let it play out. You are giving yourself heartburn and/or sleepless nights. This negative outlook will only bring more negative circumstances to your lives.
Life is good, smile and be thankful you still have opportunities.
Midtieroil,
There is more than one way for a government to get their money for oil exploration. If you reseach this, you can see that back in 2007 Chad was willing to 'give' blocks away to countries like India, in exchange for a partnership to develop them.
I would agree that the prospects for these blocks are probably not on the top of the big oil companies list but I wouldn't go so far as calling them 'almost worthless' as you state.
Chad is an oil producing nation so they have proof of oil assets. Some of these proven assets are near to ERHE's newly acquired blocks. We know ERHE is not in a position to develope the fields by themselves so we simply wait and see what partners they can bring in and under what contractual agreements they come up with.
I see very low risk of it costing ERHE anything and only increases the odds of diversify their properties and possibly moving up the time table to small revenue streams.
Good luck all
Majicathome, my thoughts exactly.
I think SEO uses ERHE as one of many vehicles he can use for his business needs. The benefits of ERHE over his local Nigerian companies is that it is a US based company that is on a public exchange. Once some of these projects get further down the road, SEO can better utilize this advantage. This vehicle can be used for international financing and passing of projects or part of projects to and from Nigeria when it benefits him most. In a way, we are still here to profit and ride SEO coat tails.
Think about how much the current shelf shares are worth if ERHE waits for several more positive steps and the share price breaks $1 or $2? At $2/share, the remaining 200 million shares become worth $400,000,000.00 for business needs (Yes, ERHE would have to expand the current shelf beyond the $50mm).
It is in everyone's best interest that the shelf not get tapped until some other future successful steps have been completed.
DegenG- your approach to be putting odds on the different scenarios is a very good thing to do. That helps one analyze the risk/reward ratio. I just have different probabilities for the same time frames.
A. in the next 3 months, I would give ERHE about a 25% chance of an unexpected announcement. Kind of like the Chad thing that came right out of nowhere. I think they have enough irons in the fire that we will have a 1 in 4 chance of something taking a step forward. Yes, optimistic but enough of a probability that I don't want to be out of the stock in the short run.
B. 4 - 6 months. I give Total about 90% chance of starting the drilling of block 1. Who knows if they will put out any more announcements of when and what ship starts the drilling. I think ERHE gets a little bounce off of that news (once drilling actually commences).
C. 7 - 9 months. If I am right about B above, I am guessing we see a ramp up in share price as we get closer to the expected drilling results. Unfortunately, I don't have a strong opinion on the likelihood of Total discovering oil again. I would think it is a minimum of greater than 50% that they hit oil again. I think if Total tries to confirm net pay from Obo 1, we have an 85% or better chance of good news of oil being hit again. If they try drilling in a new prospect, I would put it closer to 60% of oil discovery. It is anyone’s guess on whether it will show commercial or not. I think Total will give a fairly strong opinion one way or another based on the next drilling results.
D. 10 - 12 months. I agree with your odds. About a 50/50 chance of ERHE doing some substantial step forward in one of their other endeavors beyond block 1 of the JDZ.
Beyond this time frame, I am fairly optimistic that something substantial will happen sooner than many here are predicting. I don't see Chad as being at least 2 years out. Yes, the JDZ was a major time delay and continues to be. I think when you deal with either the Chad (onshore) or IMO marginal fields, ERHE either finds an interested party to do their work or they don't. Once they find an interested party, I think the timeframe goes pretty quick. No need to wait for contracting a deep water rig. No need to hide results due to blocks close by not auctioned off yet, etc.
Bottom line is, I would put the odds of ERHE share price spiking to .75 - $1.00 in the next 12 months at about 75%. That is a risk/reward ratio that I am betting on as I have added to my position in the past 30 days.
With the current price in the .10 cent range and the CEO buying shares here, I am very comfortable that we are at or near a bottom with something positive happening in the next 6 months minimum.
Just my take.
midtieroil, you use some interesting words in your summation of current events. From the pessimism that you continuously speak about this investment, I can’t for the life of me figure out why you are still invested. But, to each his own.
You state “everything is still years away” and “zero measurable progress”. If you truly felt this way, please tell me why you would not sell every share you own today and put it in the bank at .05% interest rate with an FDIC backing to protect your downside? Then come back YEARS from now to reinvest your increased fortune when the ERHE outlook looks more to your liking? You could even evaluate the then current management to see if they were taking the company in the same direction you were hoping for. This seems like a prudent step if you truly believe what you speak about here.
On the flip side, I see measurable progress on multiple fronts that ERHE has going on. Any one of the ERHE projects (Chad, EEZ, JDZ, Block 1 of the JDZ even though not ERHE, IMO state, AIM listing, any one of the three other Nigerian plays that were discussed in today’s investor update), could have an announcement anytime to dramatically change the short term outlook of ERHE. Yes, they will not magically discover commercial oil overnight but any positive step could propel this investment forward rapidly. It would seem to me that the update released today increases the odds of something positive happening because of the diversification ERHE now has in play.
Let’s take a brief moment to think about short term possibilities and what effect it would have on ERHE’s share price:
Chad – What do you suppose would happen if ERHE announced in the next three months or so, a new consortium partner with a successful track record of drilling for oil in the Chadian region? Positive or negative?
EEZ – What do you suppose would happen if EHRE announced in the next three months or so, a new partner such as Petrobras to explore pre-salt activities? Positive or negative?
Block 1 of the JDZ – we know Total will be drilling in the next 3 to 6 months. What happens if Total announces a discovery of oil anything more that 150 feet of net pay? Positive or negative?
JDZ – albeit a little longer out than 3 months, what happens if the scenario in Block 1 plays out similar to above and Sinopec declares Phase II exploration will commence over the next two year period. What will be the short term effect on the share price, positive or negative?
IMO state – It sounds like the next steps on this front is the awarding of specific marginal fields. Kind of like Chad. ERHE has nothing as of now, but they may end up with additional specific block or field awards in the next 3 to 6 months or so. Will this be positive or negative?
AIM listing – this is currently in a ‘wait’ state. If any other positive step takes place in any of the previously mentioned projects, the share price will likely raise substantially. What would happen if ERHE announced a listing on the AIM shortly after another positive announcement (with price appreciation)? Just the fact of increasing the potential buyers of ERHE shares (from the new listing), will put upward pressure on the share price. This should have a compounding effect on the increase if strategically timed with another major announcement.
None of these examples above sound to me like the ‘same tired story’ or ‘zero measurable progress’. I see it as just the opposite. It may still take years before ERHE has an income stream from commercial oil but we all know the share price appreciation will precede that by years also.
I am very encouraged seeing multiple buys by insiders and officers of EHRE. Thanks for sharing this news.
Krombacher,
You have a creative mind and quite the ability to take something and run a long ways with it (not that I agree with your built in assumptions BUT, creative non-the-less).
Although, what you have described in this most recent post (ERHE selling out with a max price of .50) is certainly a possibility, I see other options that lead to a different outcome.
In my opinion, there is likely a multi-company, multi-block deal or consortium agreement in the future but I am going to run with a different example just illustrating a Block 4 alternative.
Today’s starting point regarding the Block 4 split:
ERHC Energy – 19.5% (drilling costs covered by SNP)
Sinopec – 45.5%
Conoil – 20%
Dana Gas (from Centurion 9.5% + Hercules .5% ) – 10%
Godsonic – 5%
Now, in your hypothetical scenario, Total is needed to take Block 4 into production. Due to this you imply that Total must own ERHE’s percentages. If you look at the whole picture, that would only give Total 19.5% (given no other changes made). This still wouldn’t give Total close to controlling interest or really make it worth their risk to become the drilling operator. With this assumption being true, that must mean other changes in percentages must be made. Now, let’s look at the likelihood of each of the non-operators for selling their percentages for the right cost. First, I would like to run with an argument about ERHE. Since ERHE is the ONLY current percentage holder of the non-operators who has ZERO dollar outlays needed through the drilling phases and ZERO money outlayed for bonus’ paid for the drilling rights, they have the least pressure of all players to relinquish their rights for ANY cost. Because of this fact alone, their 19.5% rights would also be the MOST expensive to acquire comparing like percentages. Now, let me throw out another discussion point – of the remaining non-operator right holders, only ERHE has rights in other JDZ blocks in this region. Because of proximity to other potential projects, I would also like to suggest for Conoil; Dana Gas; and Godsonic, that the long term management of their arrangements in this Block are more expensive than ERHE’s , Sinopec’s and Total’s (counting their Block 1 and Akpo projects as close proximity). For these reasons alone, I would say TOTAL has a better chance and less expensive cost to acquire the other 35% interests from Conoil, Dana Gas, and Godsonic. I am not saying this has to be the case, I am just providing arguments on how other outcomes can be possible.
Now, let’s expand further on another assumption you suggest which basically says TOTAL must be involved and therefore SNP is saying they can’t do it themselves. If this is true, then SNP’s current 45.5% controlling interest is worth less on a stand alone basis than it would if the other 54.5% were owned completely by TOTAL (or the like). In other words, SNP is basically saying “we can’t do it on our own”, “we need someone/some company with better technology/processes/knowledge to get the most value out of our current rights”. With this, I would say SNP would be willing to negotiate at least part of their 45.5% rights away to gain this magical partner.
Using a similar argument above on ERHE’s rights, it would be better for ERHE to get another company with better technology/processes/knowledge to get the most value out of their 19.5% rights (and faster by the way).
Given all the above, I would say there is room for all parties to negotiate for an outcome that looks better than the current situation at hand. If I were a mediator in this type of consortium discussion, here is what I might suggest:
For the three parties (Conoil, Dana Gas, & Godsonic) might I suggest a fair selling price for their combined 35% to TOTAL would be similar to what ExxonMobile sold their rights in block 1 for. Let’s say that is about equivalent to a full recovery of their drilling costs to date and proportionate share of the signing bonus for the block. I will even throw in a sweetener of 2% to Conoil, 1% to Dana Gas, and .5% to Godsonic of the future profit oil (same type of sweetener XOM kept for themselves upon their exit). I would like to point out, this would be the highest possible outcome in the near term, for these three companies, considering oil was actually discovered in block 1 and not in Block 4.
If the above discussions were successful, we now have three significant parties left: ERHE with 19.5%; SNP with 45.5%; and TOTAL now with 31.5% (giving 3.5% trailing interests to the exiting partners). Now, I, being the shrewd mediator I am and desiring to run my fees up more, I suggest a second round of negotiations for these three remaining parties. Here is what I see as the main negotiating parts for the three players: TOTAL has the technology/knowledge/processes to bring this region into production the fastest which is worth something to them and I would suggest TOTAL would want at least an equal if not top billing percentage of this block to become the main operator. SNP has United State dollars to burn that they eagerly want to convert into hard assets (think OIL here). They also have a stronger political desire for ‘control’ of where that oil ends up (over the cost to obtain it). I would go out on a limb to say, SNP would be willing to exchange some of their right percentages to become equal right holders with TOTAL for continued control on where the future oil ends up (think CHINA here). Because SNP has a strong desire to find proven oil/gas/condensate sooner rather than later, they may even be willing to sell a small percentage of their rights to hopefully get to the proven oil sooner. Then we have ERHE who we know has a strong desire to remain a player in this region due to their political connections, their history in this region, and their interests in the other blocks. We also know ERHE has a pretty strong desire to diversify their holdings and negotiate for cash to help their longevity until production (given their shelf dilution experience).
So, we already have come up with at least one price ($X/1%) to pay from our original negotiations with Conoil, Dana Gas, and Godsonic. BUT we know the remaining percentages are worth a little more for the remain parties so I would say we negotiate and outcome that ends like this: ($X plus $Y/1%) is the cost to TOTAL to acquire the final percentages needed for it to become primary operator. I say ERHE sells total 5% of their rights and SNP sells 5% of their rights to TOTAL for this magical ($X plus $Y) amount. We end up with the following for Block 4 of the JDZ:
TOTAL – 41.5%
SNP – 40.5%
ERHE – 14.5%
Conoil - 2%
Dana Gas – 1%
Godsonic - .5%
POOF!!!!! We now have TOTAL being the operator with the most percentage in the block, SNP with a major controlling interest, ERHE with breathing cash and kudo’s for remaining a local and politically connected partner to both Nigeria and STP (I would bet money both these countries still have politicians holding shares in ERHE some way or another, even if through third party/offshore holding companies). And three exiting minority partners with cash plus a future profit percentage for their troubles.
Finally, you can take this type of Block 4 example and expand it to blocks 2 & 3 to come up with a substantial area wide consortium that could be used to purchase blocks 5 – 9.
Voila’ – please make your mediation fees payable to ‘Strategyone’ in the amount of 1,000,000 shares of ERHE. Thank you.
I don't recall anything about releasing 25% of block acreage. Can you provide a link or cut & paste. This doesn't make sense to me because if an operator discovered something that makes them want to invest more to move to the next phase, why would they be required to give up 25% of the acreage?????
Midtieroil,
There have been many things in the recent past that I have not agreed with in your posts. However, this one I firmly stand 100% beside you on.
I am disappointed that ERHE has not scheduled and had an annual shareholders meeting on a regular annual basis. There is absolutely NO excuse for this. These meetings are not costly at all. For all I care, they can schedule one in a local holiday inn conference room or something ridiculously small. They can go off the numbers of shareholder that showed up the previous year to get a good estimated head count. They should be scheduling these on the calendar 3 months in advance and it should be a standard procedure for someone there. In my opinion, the annual shareholder’s meeting is a key item for an OTC company to demonstrate openness, legitimacy, and accountability.
Although I consider this a negative mark on the company and it’s officers, it is an issue that is easily resolved (and should be resolved promptly). This is not an argument to oust management or the CEO.
Fair disclosure - All this being said, I was a purchaser yesterday of more shares and I have another open order today for more shares.
Matt,
There is a marked message on the main ERHC Energy page of IHUB that shows the first article on this potential agreement. It has been brought up a few more times but to my knowledge, no official agreement has been made or PR'd.
The following is the marked message:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=65741047
bmu,
In my opinion there are two large reasons why we have not seen much excitement about IMO. First, there has not been official confirmation that there is a finalized agreement between Imo and ERHC Energy (by form of PR release by ERHE).
Second, an most important are any details to provide some sort of value with regards to this potential agreement.
I look forward to more details and will contain my excitement till then...lol.
midtieroil,
Please stop posting as if you are speaking for everyone or that your opinions are facts. They are not!
You have the right to your opinion and on occasion, I even like to hear your apposing point of view. It helps keep some grounded.
BUT, let me be specific about this last post. You state PN "has not been straight with us on ANYTHING and he continues his secretive ways ....."
First…. If they are secretive ways, then it is a secret and how would you know? NOT LOGICAL… read what you are saying.
I see it differently. I see PN being very straight forward and open and honest. I also see him and the company trying to reach out in new ways to go even beyond what they have to from a disclosure perspective. I see you refusing to listen to what he is saying (you seem to have your hate blinders on that prevents you from listening or sounding balanced or grounded in your posting, imho).
ERHE disclosed exactly what they found over a year ago, yet most of us (to some degree, myself included) refused to listen (NO OIL). Many here continue to spout, as fact, that they are being secretive and holding material info back. I don't believe this for one minute. I do, however, understand agreements to maintain some information between SNP and ERHE for competitive advantage. I think this is highly likely. Again, HOWEVER, I don't believe they found some secretive Billion barrel find. I personally feel they found some interesting stuff that still lends them to believe there still may be a Billion barrel find down there somewhere but they are yet to prove it.
PN stated info about the growth initiative and now he has acted upon it. Again, not secretive and he let us know in advance (years ago). They even let us know about other potential deals that obviously have not gone through yet or may never go through. Again, this was not secretive, yet open and honest in my opinion.
Let me provide one more example: PN, comes out and states that the newly acquired rights for the Chad blocks are very valuable. This is his opinion and you certainly don’t have to believe it. Obviously, he can not justify this opinion yet (even though you insist on this) with detailed facts of discoveries within these blocks because they haven’t been drilled yet. But, he has provided some basis for his “valuable” opinion (discoveries next door, etc). Not only that, but ERHE has experienced staff (Dr. Seymour; Gralla; & Shafie) with decades of technical experience in the industry that have reviewed the full information that you and I do not have access to. I tend to put more weight on what their opinion may be rather than an investment board poster without access to the full information on these blocks.
You claim these blocks are worthless due to the government of Chad “giving them away”. This is also not true. Just because there were huge signature bonuses paid on the JDZ blocks (in fact, the original block 1 bid was a world record amount at that time) and no signature bonuses paid for the Chad blocks, you seem to believe they are worthless. Yet, in the long run, Chad will get a majority of their money from the PSC agreed upon splits just like every other country in the world on every discovery in the world. You are ignoring this fact. We simply can’t quantify this “value” at this time. To me, it is pretty straight forward. These Chad block rights are worth more having them than not having them.
To me, it sounds like you just don’t like what you hear.
MidTO,
Scheduled transactions don't have to be publically disclosed but I agree it would have to be if the first of the scheduled transactions were to occur right before a material event, to avoid insider trading issues.
Regarding the company policy regarding buying shares, it seems you are framing your post to serve your negative slant.
There is no rule that states companies have to publically disclose the employee purchasing policy nor the changes done to this policy.
The company chose to disclose their policy several years ago and at that time, employees could not make purchases. Obviously, this policy has changed and the fact that you did not get notified has nothing to do with the "honesty" of the company.
For a different approach, why don't you take this news as simple good news without any hidden agenda's etc.
Bottom line is, the CEO just used his personal money to purchase shares on the open market. He has new and optional “skin in the game” just as many here wish he had (including myself).
petemantx,
There are a number of ways an insider (including a CEO) can purchase or sell shares during times of change. A scheduled program is one of the simplest ways. For example, Bill Gates has a scheduled selling program for Microsoft. He has for years.
There are also ways of doing transactions based on the timing of the announcements of change. In this case, PN would get in a lot of hot water if he did a one time purchase on 8/26, then the company announced a merger/buyout on 8/29 and the purchase form was submitted and disclosed on 8/30.
That said, common sense will go a long ways to avoiding suspicion.
I seriously doubt ERHE is in any major negotiations regarding mergers at this point (regardless of PN's purchase recently) but it would not surprise me to have material news announced within 2 weeks to 30 days and PN avoiding any investigations. It is now disclosed that he made a purchase.
Umbra,
The answer is Absolutely. Part of the public disclosure of that form is to show the resulting total holding by an insider.
Hope that helps.
Very Nice!
$15K+ purchase and as far as I can tell, an outright purchase. Not part of a structure bonus plan or stock option plan.
NO insider has ever purchased stock in ERHE for as long as I have been here, let alone the CEO.
Thank you PN
Nice Post Tryoty,
I was not a huge fan of the shelf placement either but I seriously believe ERHE thought they were placing it on the heels of SNP announcing phase II.
Now, in hind sight, the buyers may have lost some money on the original placement but I also know for a fact that one of the buyers sold their entire position of the shelf over an extended time frame and some of that time the price was near the strike price and over. In addition, they (shelf purchasers) still are holding their options, which I also strongly believe will be well “in the money” in the not too distant future (IMHO). At that point in time, ERHE will be happier (price appreciation over .28), the shelf buyers will be happier (and maybe willing to purchase again), and hopefully a good number of the shareholders will be happier (as there must be some good news released to get the stock going in a positive direction).
I completely agree with your opinion that SEO would not allow a huge dilution at this price (unless Chrome was the buyer which I doubt would be legal). I also think ERHE had to do this type of placement to show either the government of Chad or the AIM people that they are capable of raising capital if needed. I also feel the “market” spoke volumes on the whether it would be successful again without any great news.
Yes, it hurt. But in the long run, if any one of the now three major assets (JDZ, EEZ, Chad) hit something commercial, the share price will be off to the races and ERHE should be able to raise capital without as many shares being diluted.
Thanks for the good post.
Wow, 3 hours into the trading day and only 300 shares traded. Some thoughts:
Middy, did you sell the second 1/3 of your position today, LOL?
No wait, Peter N, did you finally convince a new institutional investor to buy in an initial position?
Oh, I am killing myself here.
In all seriousness, it is good to see it quiet on the selling front given the somewhat negative tone on this board again.
Looks like a very well stated explanation by DK. I hope this can help clarify it for everyone that reads these boards.
Yes, it is a wise thing for the drilling parties to analyze the data thoroughly to help refine how they read seismics to increase their chances for the next drilling round. Also, getting further information from the Total well about to be drilled sounds very cost effective.
midtieroil,
I have said this before and I will say it again because you continue repeating your 'bash the management' agenda.
It all comes down to commercial oil. If the ERHE partners discover commercial quantities of oil in the next round of drilling, management is completely a moot point. You may continue to scream and cry about changing out management or the PR guy or both but you no longer are coming off as rational or emotionless.
I still appreciate hearing some apposing views so I am not suggesting you stop posting or that you don't have some good points (that get watered down with repetition), but try not to kid yourself that you are presenting a rational view.
Here is my simplistic view: ERHE could fire ALL employees, change out ALL board members, hire top talent from the largest oil companies in the world, hire the best PR firm, fill their board with the board members of Total, XOM, CHV, and what ever other oil companies you want.... they still have no oil... there would be a temporary spike with a leveling off and within 30 to 60 days with no other changes, ERHE price would be back under .15
Happy Friday all
Julius Erving,
I respect your opinion and appreciate your openness to post messages you go back and forth with DK about.
I hope you can also respect the opinions of others that differ from yours.
I fall in that camp. Please don't assume every shareholder or every reader/poster on IHub hates DK or think he or PN are doing as bad of a job that you state they are (that goes for MidTierOil also).
I do agree that some things could have been done better and some things could have been done sooner but it is very easy to judge the past now that you already see the outcome. We can say that about every company on every exchange.
I feel DK is in a tough position being that the stocks share price is heavily depressed. It is not DK or PN's fault that Sinopec did not strike mass quantities of oil in the first 5 wells or that Sinopec has not released full details of every tidbit they found and every tidbit on earth that they didn't find. The facts still remain the same. They found some interesting information from the first 5 wells but not oil. They are holding some info back as this region is still up for grabs per see. They are obviously still interested in holding on to these blocks (perceived value for SNP) as they did NOT give them up. I feel SNP is wisely waiting for the SNP/Total drilling in Block 1 to even gather more information. This may greatly improve their chances for actually striking oil the next time they drill in blocks 2 – 4.
I feel they (ERHE) have done everything they are legally obligated to do so far as it relates to disclosures. If I felt otherwise, I would sell my shares and move on.
As for DK, he has been amazingly straight forward and appropriate with his published replies to you. You seem to be dissatisfied with the answers you get and it seems to me that you are not understanding what he is saying even though it seems very straight forward to me. It would seem that your questioning is of the “leading” variety and because he is not answering the way you want him to, you are ignoring what he is actually telling you.
The bottom line is that I feel most of us here that have been invested for 2, 4, 6, 8 or more years are very frustrated with the share price because of failed expectations. I have been here about 9 years. I would have thought the stock share price would be between $5 and $10 by now. I was ‘hoping’ for over a buck within 3 months of my original purchase. I fell into the groupthink tank around the PSC time that hoped ERHE and their partners would fast track this whole thing, hit greater than a billion barrel find on the first hole and be producing within 18 months. I was wrong. Doesn’t mean ERHE, PN, SEO, Dan K. or SNP are failures. It just means we don’t live in a perfect world in my eyes (yet). I still hold on to a strong hope that they will hit something commercial the next time around. I also feel their chances are better with Total giving it a go in Block 1.
I will be holding.
ERHClongtimer,
A thought to add to your line of thinking....
I think if the right merger came along and if the other party had a good experienced CEO at the helm, SEO would allow a smooth transition of Peter to his previous position (not CEO) and I think Peter would be ok with that. He would still maintain an officer role (and salary) and he could focus on things that are more directly associated with his education, experience and background.
Keep in mind, Peter was only put into the CEO role as somewhat of a default because the JDZ was taking so long to move forward (IMHO). I think Peter would maintain his power role with SEO by a somewhat lateral move out of the CEO role if ERHE moves away from a strictly asset holding company.
I see this as a win-win but I could be wrong....
Precisely,
It says "The company has stated that details are forthcoming and there is a 10-Q scheduled in just a couple weeks."
I read Dan's statement as a PR will be released AND a 10-Q is scheduled. Not "details are forthcoming in a 10-Q"
ERHC has proven, why do you assume Peter is going to bury details in the 10Q? Too many vocal people around here immediately jump to negative conclusion with any new bit of information. That is perplexing to me but I have learned to live with it.
All we know is that in the last PR, the company said more details would be forth coming. I, for one, believe them. Next, we have our PR company/person (Dan) state that a 10Q is due out shortly.
My view of this information is this: They will most likely have the lawyers and accountants make sure they have full disclosure of all the details needed in the official 10Q and it is already scheduled to be released which means they are already working on the wording. Second, they will likely (as they have done many times before) have a PR released the same day as the 10Q filing to state the 10Q is filed and they will have the PR people do the summary wording with just the highlights. This is the information that most investors would like to hear about. I would expect the 10Q to clear up any detail mishaps such as the square km vs. square miles flub pointed out by a poster here (if in fact that was a mistake. I haven't looked that closely and I don't particularly care about the size of the area as opposed to the size of the prospects within the area).
I am looking forward to what I expect to be a more detailed PR for the new Chad prospects and I will give management the benefit of the doubt until that is released. I also expect many but not all answers will be addressed in the next release.
Stocks,
It was publically disclosed and in a legal manner as soon as it was awarded.
What we all wish we had are the details down to the penny on the what, when, where, how and who was responsible. This is an unrealistic expectation no matter how loudly some people scream around here.
The company has stated in the PR release of this Chad award that more information would follow. I sense an unrealistic expectation of what further information we should expect and when. I don't disagree that it would be really nice to get all the minutia but I seriously doubt we get all questions answered.
Bottom line is that they have disclosed the award was made.
kownski, that is why it is worth 10s of millions (even more) if they find nothing. The company carrying ERHE's costs never get to recoup them and yet ERHE doesn't owe anything.
Quick comment - I read the "worth 10's of millions of dollars" to be referring to the amount of cash ERHE would have had to come up with to pay for their "carried" portion of the drilling so far to date. In addition, the more in the future is referring to the continued "carry" until profit oil. For a non-oil company, this truely is worth a lot (IMHO). To think, if all goes well, and it takes 2, 5 or even 10 more years to bring a commercial discovery into full production, the interest alone of the ERHE proportional investment could be worth ten's of millions and more. (also remember that profit oil begins at first production not when a field is brought on to full production)
The carry strategy has been successfully negotiated in blocks 2 - 4. I suspect they will continue with that kind of strategy (giving up a portion of their rights) with other blocks (EEZ & now CHAD) until there is a foreseable cash flow from one of their properties.
Just my take.
Thank you JE.
I have believed all along that ERHE has disclosed completely what they know that was definitively found. Yet, people on this board continue to speculate or state as fact (incorrectly I will point out) that the company is not telling the truth OR the company is not telling us everything.
This does not mean that there is nothing to analyze or that what they discovered may give them (or TOTAL) clues to the structures which can better define where the oil is (which they did not find with the first 5 wells drilled to the depths they chose, so stop pretending otherwise).
Midtieroil, keeps demanding an open communication company and in my mind they have been as open as possible and as relevant as possible to this point (not perfect albeit but none the less, open). They have clearly stated more than once that NO OIL was found. Again, this is not completely bad news because they HAVE found proof of a working hydro-carbine kitchen (if I state the term correctly). They just don't have proof YET where, how big, and if commercial. Exactly, how APKO field next door started.
This is another reason why I can’t believe people keep barking about wanting to see more or a new NSAI report. It is very clear to me that if they did, in fact, have a new study done after drilling where the NSAI utilized the results from the drilling, the values will ONLY be one of two things… the exact same OR lower estimates. Niether one would I want ERHE to spend money on to publish in a PR at this point. If the NSAI came back with substantially higher numbers, I would say they are full of it. If they came back with substantially lower estimates, it would be material and I currently fully believe ERHE would have published them as to not break any compliance laws. What answer are we left with. If they have a new study from the NSAI in their hands, it is probably slightly lower since they did not find oil but because the wells were not completely dry (again proof of a hydro-carbine kitchen), it is probably inconclusive to rule the original findings or estimates as very far off. I believe the NSAI reports are very conservative to start with for this very reason. Once some good oil discoveries are made, only upwards estimates are forthcoming. This is good for all parties concerned.
I agree petemantx. They could even offer to take all submitted questions today and summarize in an updated "Q & A" section on their website.
Still a good start though. I am glad Peter is still enthusiastic. Now if he can only communicate that better to the general investing public, we could all be more enthusiastic.
Going out on a limb here... I think we will have a PR right after the close with more details regarding Chad.
Makes sense leading into the web chat and helps control the discussion especially since they hinted on more info soon.
Just a guess.
Who knows, the MM's may do a low volume dip down to fill the gap at .14. HG, get ready....buy. LOL
That is very interesting about the PSC on Chari-Ouest. That was done in April of this year. Seems strange but maybe a name issue as ERHE states the award of "Chari-Ouest Block 3". Could be close by and not the exact concession.
I suspect this will gap up at the open tomorrow (although I wish it wouldn't). I would also bet that some if not most of the runup 1.9 million shares were people from IHUB. Many here have experienced this stock run from .10 to .80 - .90+ several times over the past 5 - 10 years. I know there are many traders and position traders here that were probably waiting for a significant news event to reposition. Even though 1.9 million shares seems like a lot of volume for one day, I think we will see multiple days of high volume in this stock as soon as the trend change of direction has been confirmed.
In my opinion, this CHAD deal came out of left field from my expectations. With the limited information that we now have, I consider this a major step in the right direction. Take a few moments and think this one through.... this was a DIRECT negotiation with the government of Chad. And it has now been completed. None of us were in those meetings but someone from ERHE must have presented something pretty good (pre-negotiated partner with experience, SEO or friends local influence, etc.) otherwise, why on earth would Chad agree to have a non E&P company win anything???? (no offence intended ERHE management...lol). I feel there is a LOT that we don’t know and we might just be at the beginning of finding out…
Good luck all
Mid - now that is a respectful post.
I appreciate your openness to disclose your intentions. Ironically, you are really only asking ERHE to do the same...
With that in mind, I am looking forward to the July 6th "online chat". I plan on registering and participating. This is the appropriate forum to talk/chat directly with management. I would hope that management would try their best to reply/address any and all fairly asked questions.
This also seems to be a new approach to communicating with shareholders or would-be shareholders, being that it is an open chat with the resulting dialog to be posted on their site. Looks like a positive step forward.
Midtieroil – here is another perspective on all your points:
You say “What is incompetent about management losing 5 million in an unsecured bank?” I say, good thing they diversified and only had $5 million in that safe and secure US bank. There are a lot of once rated AAA banks that have gone under. You are so perfect that you knew that particular bank was bad? What is incompetent is beating this dead horse and trying to blame this on Ntephe. He had nothing to do with it and the results would have been way worse if ERHE had put all their cash in that one bank.
You say “What is incompetent about saying Aim listing is imminent for over 2 years and not delivering?” I say, it has always been imminent just as they have said but you refuse to listen to the truth they speak. Fact is, the AIM listing is a strategy to increase the share price by broadening the demand base. Fact is, it is MUCH wiser for a company to pull the trigger on this strategy on the heels of some positive news. Fact is, ERHE has been simply waiting for the right positive news and they are wise to hold this card until the time is right. They were waiting for the first 5 wells to strike large oil finds first time around. Didn’t happen. But they did hit hydrocarbons as they have stated. Then they were waiting for the operators to announce plans to go to phase II of the drilling program which would have been an extremely positive sign and it would have shown confidence in finding more oil or commercial gas on the next round. Didn’t happen, delayed again by the operator. ERHE has also been continually working on other potential acquisitions but in their eyes, the right deal has not been found yet. This is another possible positive event to springboard onto the AIM. I for one, am not thrilled with this plan and I am glad they have not pulled the trigger yet. What is incompetent is not seeing this situation for what it is and applauding the company for doing it right.
You say “What is incompetent about saying you are going to grow the company through acquisitions and then being unable to deliver on that promise either?” As mentioned above, they have delivered multiple times on the analysis of potential deals as proven with the previous PR’d letter of intent, but the deal was not consummated for reasons only unknown to us. I for one, applaud them for not jumping at any ol’ deal they can get their hands on.
You say “What is incompetent about the total lack of effective communication which has destroyed the credibility of this company along with the share price?” I say, you are partially correct on this point in the fact that their communication has been lacking on several occasions. But, let’s agree to call a spade, a spade. This is an oil play stock. They partnered with world class partners and so far, no commercial oil has been struck. That alone is why the share price is where it is. Yes, better communication may have softened the blow but I would bet the share price would still be between 10 and 20 cents at this stage of no proven discoveries.
You say “What is incompetent about not hiring any employees with technical experience to assist in making the proper block selections in the EEZ?” I say, so far it looks like they have gotten the best picks in both the JDZ and EEZ based on the pecking order of their picks. Until commercial quantities of oil are struck in other blocks, you can’t say otherwise.
You say “What is incompetent about being unable to resolve the Block 5 and Block 6 issues?” I say, this has been perfectly played out so far and this is why: for blocks 5 & 6, ERHE will need to either come up with the cash to pay their own way or negotiate away more of their percentages. From a timing stand point, ERHE will be in a MUCH, MUCH better position for blocks 5 & 6 to be developed after production oil is near or already pumping from blocks 1 – 4. At this time, ERHE will be on the AIM with a much higher price per share and in a better negotiating position with their block 5 & 6 rights. Fact is, the JDM/STP/Nigeria want to get some oil company working on all their blocks as soon as possible and we were lucky that the original operators in 5 & 6 flaked out. ERHE did a perfect job of not getting saddled with their percentages of costs in these blocks and essentially putting these blocks in limbo while blocks 1 – 4 are brought to production (hopefully). They also perfectly played the arbitration suite to put the JDM on point, not to attempt to back out of negotiated rights. I hope this continues to go no where until it is quietly resolved in ERHE’s favor AFTER future successful phases on blocks 1 – 4.
You say “What is incompetent about doing an extremely expensive round of financing at a time it was not needed, further decimating the share price?” I say, they had this ball in motion fully expecting SNP to announce phase II right when this financing was suppose to hit the streets. An unexpected delay happened (another 6 months, then another 12 months) but ERHE already had this game going on. What would have been more incompetent is if they would have gone for more than the minor $2 million. And if you seriously look at it now with the share price at 8 cents, they sold those shares for 22 cents, so you could argue they got a good deal given the delays. What would be real smart is if they would buy back the same number of shares with the price where it is now and this would likely lead to a stabilization of the stock price at a higher point than it is now.
You say “What is incompetent about not coming clean or how badly the investigations were really effecting this company?” I say, this situation sucked but was out of ERHE’s control. I say they played this one perfectly also by hiring very good and expensive lawyers to effectively make this situation play out to the point it has. Again, not much of a chance of doing anything differently on this front, given their circumstances (IMHO). What would have been incompetent is ERHE saying anything more than they did to either make the case worse; last longer; or spook the investing public into a worse share price.
You say “What is incompetent about not being able to secure a partner for the EEZ and not even open a data room so potential partners can look? What is incompetent about not even starting PSC discussions months after the EEZ block awards?” I say, all in due time. If Total drills block 1 in November of this year and announces good news, it will immediately increase ERHE’s negotiating position on the EEZ blocks. I would not mind if they got some partners now but if they did, it would be costly on ERHE’s percentages considering there was not a great demand by the majors for the other EEZ blocks.
You say “What is incompetent when other oil companies are openly laughing about ERHE’s incompetent management?” I say, Really? Point to one that is laughing or using those words. I am not defending the management here as I also think they have made some mistakes, but this point is strictly your opinion which is not shared by all.
All this being said, I respect your opinion and appreciate your efforts to put some heat on the management. I believe they have room for improvement. Once we have significant and proven assets, I will be right next to you on demanding good and experienced management to bring ERHE to the next level. I just don’t think the timing is now.
I know many will disagree but that was a really good post. Great perspective.
Even scarier numbers:
ERHC has 2.3 cents per share of cash in the bank. In addition to that ERHC is sitting on a net loss to date of $77+ million which if rolled (via merger/buyout/reverse buyout) into a profitable entity, in a 34% corporate tax bracket this is equivalent to another 3.5 cents per share.
To use your phrase.... that means this management team has convinced the market that its assets in total are worth (a maximum) of 3 cents per share.
This argument alone screams that someone should be held more accountable than they have been to this point.
Sorry to hear so many of the long termers here getting so worked up. No change took place today but several finally panicked and hit the sell button on emotion.
The assets didn't change. The delay is already announced and priced in. The AIM is not close and that is probably good until there is good news to go along with it. They have not merged with another penny stock oil company (which I hope doesn't happen soon). Management here is not skilled or meant to run a real oil company, it is just here to guide the holding company until the partners strike oil.
Believe me, I feel the same pain of the low share price and wish management could say something magic to suddenly shock the price back up close to a buck, but that isn't reality.
The good news to fall back to is that Total is going to drill in block 1 and they have both the experience and knowledge to make good decisions. If they do well later this year, life will spring back into the rest of the blocks and their potential. I, personally feel pretty good about the chances.
It does suck to wait but I truly hope people don't get scared out of their shares after so long when nothing really changed except for short term emotions.
On a slightly positive side, think about the chances of ERHE share price appreciating 50% from here (9 cents to 13 cents) over the next 6 months. Probably better than IBM or ExxonMobil for that matter (IMHO).
Buy when there is blood in the streets.
Good luck all.
I guess ERHE isn't accumulating Exile today...lol.
Now this is a good example of how news should be released. Let me see, they began drilling April 28th and just 6 weeks later, they announce an estimated 90 million barrel discovery (even without the specifics) and it adds 21% to their shareprice in one day.
ERHE management, look and learn please.