It is about time ERHE comes back to life.
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Thanks for starting a new board. Let's hope for better luck on retaining this new board as with the one I started a few days back. I would expect this board to have better luck as it has the topic of JDZ/Nigeria/STP.
Good luck and I will contribute when I can.
Strategyone
I agree, stop the deletions. You better archive this message. It will most likely be deleted....LOL
Strategyone
I hope Conoil doesn't come up with the signature money and forfeits their rights. If they are so unreliable when it comes to a one time, pre-negotiated buyin cost, I can't imagine being in partnership with them over years of expense sharing.
maestro224, you hit the nail on the head with that post.
Overt was never in the game to play, just get the best deal they could. They were within a day or two of giving up their 5% interest to the remaining parties with nothing in return.
Another way of looking at it is: Have you ever purchased a scalped ticket to an event after the event had started? Believe it or not, I have. Many years ago when I was young, fresh out of college, broke and in New York for a company paid business trip, I purchased a ticket to see Paul Simon play at the Garden. I couldn't afford the street value for these tickets before the show. So, I waited and waited and watched the scalpers. Then as the show began and the crowd outside dwindled..... I purchased probably the best seat in a concert I've attended, for less than the origanal face amount. Sure, I missed the opening act???? and the first 5 or 10 minutes, but it was well worth it.
My point is this.... Overt couldn't afford the show. Within the rules, they had the 30 days to come up with their signature bonus money or sell their rights. Since Addax was in for 33.5% interest, they would have gotten 33.5% of Overt's 5% given up shares for nothing had they not purchased the 5% rights. So really, they just purchased the remaining 3.325% (66.5% of 5%) that would have gone to the other parties. And given that they got these rights at the last hour (and paid the $500,000 fine to the JDA for changing the award) they most likely got it for a steal.
All in all, it is encouraging to see Addax pick up these rights (although, I would have loved to see ERHE purchase them instead).
Now let's hear about the drilling schedule!
Strategyone
ts, because the .70 printed first, you mean you sold short at .70 and covered your short position today at 1.35 to minimize your loss..LOL
Oilphant actually doesn't know anything about ERHE. He is just invested in Google, LOL.
Meridian, good to see you posting again.
In many ways I agree with your opinion about ERHE and its direction. I think ERHE share price might perform better on the AIM where many other international smaller oil companies are listed. I also understand your opinion you previously stated about the most recent appointees to ERHE board. I do think that ERHE could have gotten candidates that had great financial qualifications but also within the oil industry and maybe not of Nigerian decent.
BUT (here's the big but) I think Offor is just being Offor, the businessman in Nigeria the way business is done in that neck of the woods. Although it doesn't always sit well with my US based business experience, I try to recognize it and evaluate it for what it is. Some other poster posted a link to an article that reiterated similar historical events and connections relating to Offor from what I have read in the past. I would like to hear your opinion of the article posted:
http://www.nigeriavillagesquare.com/content/view/2041/55/
If even half of what is said in an article like this is true, then it seems to me that Offor is continuing to do business the way he successfully has done things in the past. Using connections to place "Nigerians" on the board yet try to make it look like "outside" representation with New York base accounting firm and US citizenship board members. I think Offor tried and probably did increase the credibility of the board with the US/NY based individuals with good financial credentials yet probably maintained a "strong" influence over them with some kind of native Nigerian connections. We may never know how these people connect back up but I would bet they do.
I get the strong impression that you are influenced or connected in some way to Walter Brandhuber or to someone from the company from which Brandhuber came from. Especially, since he is the only non-Nigerian within the company right now. I am guessing that both you and Brandhuber think ERHE should be moving towards the European exchanges and broadening the directors with non-Nigerians but with strong oil experience and thus move the company quicker into other areas of influence than just the JDZ/EEZ. I would probably agree with that direction also but I think for the short term, Offor is sticking within his realm of influence and he is making it look like moving ERHE in the direction of a bigger US based exchange (with the outside director appointees).
I personally think it will take 6 months to a year before ERHE is solidified with drilling results from their own partners in blocks 2, 3 & 4 before they should move to another exchange. Although, I am sure the short term share price would benefit from any move, I think a lot of people want too much change in too short of time. For the short term, I would much prefer hearing about ERHE utilizing there efforts to finalizing drilling schedules within Blocks 2, 3 & 4, and beginning negotiations with STP about their EEZ rights or continuing negotiations on Blocks 5 & 6. JMHO.
I don’t think ERHE share price will have a problem getting to $2 or $3 on the OTC as long as any company continues to discover and disclose the details of the oil finds in the JDZ. It just may take more time.
Good luck to all,
Strategyone
Oh Yeah? I heard the discovery was so HUGE that the world won't have to worry about oil for 200 years. Only problem is that oil prices will drop dramatically to $5 per barrel and then it will cost more to pump the oil than what the oil companies will get and therefore the blocks have become worthless!
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Jusk kidding, all.
Patiently watching and waiting. At least it is easier to patiently wait at .85 versus the .30's from before.
Strategyone
If there truely is a buyin for over $5 per share, I don't think there will be a problem of the 711 million shares getting to $3+ on their own. LOL
About 6 years ago I owned a stock that had a well known outside corporation come in and "buy in" a large block of shares for about 4 X the current price. Once it was announced, the security itself went well beyond that 4 X as people knew the corporate buyers price was also at a "discount" to the value.
This could be fun soon.
GLTA,
Strategyone
Which CVX board? I found one on RB but the last post was in 2005. I couldn't find one on I-Hub.
Can anyone let me in on the "oilphant" story? Is this poster like another Meridian but of RB?
TIA,
Strategyone
Since multiple posters have replied to you with very good answers, yet you continue to ask the same question and claim it is "pertinent" to you, I've got a great solution. The I-Hub and RB board collectively elects you to go out and investigate the answer to this pertinent question. We will give you 6 months and we don't want to hear back from you until you have actual filing evindence illustrating the answer to your question.
Thanks bunches
your friends from I-hub and RB......
brez, if OBO-1 hit a field with over a trillion barrels of oil, I think GWB would be invading Nigeria or STP shortly, LOL. Nice math though and fun to think about.
Patiently waiting for official news which I think we may be weeks away from hearing real details.
GLTA,
Strategyone
Tapco1, for the investors of ERHE, we are not concerned as to when we will "see" the oil as to when it is proven. Once proven, it will be priced into the valuation of our investment here. There will only be slight discounts to the time it is produced because there will always be speculation as to a buyout for the proven reserves. If CVX comes out and states they have found oil that straddles into block 2 (or others) ERHE will shortly have "proven reserves" without any of their own partners sinking a drill bit.
GLTA,
Strategyone
Geez, talk about buy on rumor, LOL.
This thing just hit .90, up over 10% on ok to light volume. That is very good to see. Now that the PSC's are signed the risk of ERHE "not getting their rights" has been removed thus allowing it to run on any perceived good news.
I just want to see or hear of a large oil discovery and top it off with a straddle into one or more of the ERHE blocks. Of course, it wouldn't hurt to have ERHE follow it up with a PR that has their ticker in it.....
GLTA
Strategyone
ERHC Energy Inc. Announces Production Sharing Contracts in JDZ Blocks 2, 3 and 4
Business Wire News Release
ERHE
ERHC ENERGY INC
HOUSTON, Mar 17, 2006
Walter Brandhuber, President and CEO, of ERHC Energy Inc. (OTCBB:ERHE) announced today that on March
14, 2006, a subsidiary of the Company entered into a production sharing contract with Addax Petroleum
(Nigeria Offshore 2) Limited ("Addax"), several oil and gas companies, and the Nigeria-Sao Tome and Principe
Joint Development Authority ("JDA"), to conduct petroleum operations in Block 4 of the Joint Development
Zone between Sao Tome & Principe and Nigeria ("JDZ"). Mr. Brandhuber also announced that on March 14,
2006, a subsidiary of the Company entered into a production sharing contract with Addax Petroleum
Resources Nigeria Limited ("Addax Sub"), several oil and gas companies, and the JDA, to conduct petroleum
operations in Block 3 of the JDZ, and on March 15, 2006, a subsidiary of the Company entered into a
production sharing contract with Sinopec International Petroleum Exploration and Production Corporation
Nigeria ("Sinopec"), Addax Energy Nigeria Limited ("Addax Ltd."), several oil and gas companies, and the JDA,
to conduct petroleum operations in Block 2 of the JDZ. Addax, Addax Sub, Sinopec and Addax Ltd. are
required to pay all of the Company's future costs in respect of all future petroleum operations in Blocks 2, 3
and 4 of the JDZ. They are entitled to the Company's share of cost oil until they recover the Company's costs.
The Company's CEO Walter C. Brandhuber commented by saying, "The entering into production sharing
contracts in Blocks 2, 3 and 4 of the JDZ represents an important step in our goal of commercializing the
Company's interests in the JDZ and increasing shareholder value. The Companies' interests in the JDZ
blocks represent the cornerstone for the Company's future growth strategy."
In November 2005, the Company entered into a participation agreement with Addax with respect to Block 4 of
the JDZ where Addax paid the Company $1.35 million, and will be required to pay an additional $16.65 million
on or before March 24, 2006. In February 2006, The Company entered into a participation agreement with
Addax Sub with respect to Block 3 where Addax Sub paid the Company $500,000, and will be required to pay
an additional $7 million on or before March 24, 2006. Further, on March 2, 2006, the Company entered into a
participation agreement with Sinopec and Addax Ltd. with respect to Block 2 where Sinopec will pay the
Company $13.6 million on or before March 25, 2006, and Addax Ltd. will pay the Company $6.8 million on or
before March 25, 2006.
The JDZ lies approximately 200 km. offshore Nigeria and is adjacent to areas offshore Nigeria where several
large petroleum discoveries have been made. The JDZ was established in 2001 following ratification of a
formal bilateral treaty between Nigeria and Sao Tome and Principe. The JDZ is administered by the Joint
Development Authority.
Safe Harbor Statement
his press release contains "forward-looking statements," including statements about ERHC Energy Inc.'s
future operating milestones, financing plans, as well as other matters that are not historical facts or
information. These forward-looking statements are based on management's current assumptions and
expectations and involve risks, uncertainties and other important factors, specifically including those relating
to the Company's ability to exploit its commercial interests in the JDZ and the exclusive territorial waters of
Sao Tome and Principe, that may cause the Company's actual results to be materially different from any
future results expressed or implied by such forward-looking statements. The Company undertakes no
obligation to update or revise any such forward-looking statements, whether as a result of new information,
future events or otherwise, nor is there any assurance that the contemplated financing will be effected,
Page 1
Business Wire News Release
ERHE
ERHC ENERGY INC
under the terms set forth herein or any other terms.
SOURCE: ERHC Energy Inc.
ERHC Energy Inc., Houston
Jane Barker, 713-626-4700
Page 2
Suggestion for the Board Here: STOP THE R/S BS!
The banter about reverse splits is purely a waste of energy and quite possibly a hindrance to the share price movement of your investment.
All this talk about R/S simply started because Meridian had an 'OPINION' that ERHE should move to the AIM AND that the AIM recommends fewer than 500 million shares. Meridian himself said multiple times that this is all his opinion UNLIKE the facts he has provided this board regarding the details of the PSC's and JOA's.
Everyone has an opinion about R/S's and right now it is completely a NON ISSUE. Until the company comes out with a PR regarding future plans where it might make sense (long-term) to do a R/S, all this R/S talk is detracting from the real news that every true investor here has been waiting for.
I would almost rather see the blatant BS that Mongo spews all over these boards than to see a bunch of once respectable, speculative investors argue over the topic of R/S for which they truly have no control over. That is right, regardless of your opinion, and even though we are all "part owners" of this company by owning stock. A majority is held by Offor/Chrome/Insiders and therefore if they feel it is in the best interest of their investment, they can go down that path. If and when that happens, we can all make our decision THEN whether it is good, bad or indifferent to the short or long term value of our holdings. So far, I like what Offor has done leading this company. I don't think he would do something to make his $300 to $500 million-dollar investment go down. If they decide to go down that path in the future, I would think there would be some very good reasons behind it and I am guessing they would have a well thought out plan to minimize the negative impact (like doing it as a step to move to another exchange).
Now please, please, please end the discussion of R/S's. Talk about Oil, or contracts or 8K's or PR's or JOA's or EEZ or March Madness......
Ok, stepping down from my soapbox. Happy St. Patrick's Day tomorrow.
Strategyone
Welcome back from Dinner Meridian. Thank you for giving us your insights to the actual details. Don't know who you are or why you are posting here but I truly appreciate it (and I won't ask either). It is an extreme rarity that an OTC:BB stock which is highly speculative has a poster show up with insider insights such as yourself who seems to share it freely and without profit motive (or at least a profit motive at the expense of the bulletin board readers/investor/gamblers here). I always liked reading the information you posted but always reserved my judgment to what you said until today. As much as I wanted to believe every word you wrote, I was cautiously optimistic that you were legit yet you landed in the "to good to be true" category. Though you have posted many clarification facts for us, the fact that solidified your validity was the 22% and $20+ million in cash details of the Sinopec deal. Nobody else's "little birdies" had that kind of detail.
I have been invested in many speculative stocks where someone occasionally had a "source" with some details but most of the time it was short lived or the source was used to pump the stock for the benefit of insiders. You have shown a different color.
I have been in this stock for over 4 years and I only sold a few shares at one time. When there was a STP "coup" attempt several years ago, that was beyond my comfort level at the time and I sold out in one account. Only to repurchase at a higher level several days or weeks later. If only you were around then, LOL.
Anyway, the events of yesterday and today were truly a major milestone for ERHE and I feel like the risk has been greatly reduced in this investment. I am still not planning on selling any shares for the near term. I hope to take a little off the table once ERHE has "proven reserves" and let the rest go to retirement.
Thank you again and I hope to see you continue posting for a while.
Strategyone
Great explanation 'developer'. Thank you.
ERHE THANK YOU for the FACTS (8k)
Now we have the answers to many questions and speculation:
Money: Not a problem. $49mm+ from Block 2,3 & 4 JOA's. Not only that but cost for exploration, drilling and future production expenses are all paid for without ERHE cash outlay! And a surprise to me is that the $49+ million is paid 10 days after the PSC signatures which means in less than a fortnight! I was expecting the bulk of the money to be paid over phase 1 or so. NOT, this is upfront money. Can you say "good bye" going concern? LOL (That one is for you Mongo)
Percentage Interest: I was fairly confused by the Addax PR today showing ERHE with 7.3% of block 2. Confused no more. ERHE with 22% of block 2, 17.7% of block 4 and 10% of block 3.
These are the facts the investment community needs at this stage.
A PR will be bonus and might add some positive fluff but this is what I was looking for.
Thank you again ERHE,
GLTA,
Strategyone
I have been too busy since yesterday to read all the posts. I briefly read the Addax PR on block 2 and I think I am missing a piece. Can someone give me their guess?
Meridian was stating something like 22% and full carry on block 2 with Sinopec. I didn't know Addax was involved but according to their press release, Addax is getting 14.3% of block 2 and carrying 7.3% for ERHE. Does this mean ERHE is down to 7.3% of Block 2 to go along with 10% of block 3 and 17.7% of Block 4?
A little humor for the Blog haters or just the stock flippers.
Without going into too much detail, I personally got a good chuckle over JS's posted trading record as of late.
If I got this straight, he used to own 75,000 shares purchased somewhere around .30. He panicked and sold all around .63. Good for him, he banked a profit. Nothing wrong with that trade (now pumping and dumping with his blog forum is entirely different and he should go to jail for it....). Now he thinks that ERHE is ready to run again and this time buys 30,000 shares (on margin???? whoah nelly, a OTC:BB volitile speculative stock on margin. That's taking a risk!) for .80. OK, he is forced to sell the next day after a Fed call on his margin, which he does at .88. Yippee, another $2,300 banked short term profits. Today he jumps back in with a purchase of 25,000 shares at .96 and jumps out at .983 for $683 short term gains.
Now again, never complain about a person taking a profit. But in this case, JS used to control 75,000 shares from .30 which would now be worth $73,500 and a paper profit of $51,500 which if held over 1 year would be taxed at 15% Cap Gains rate. JS has exchanged that option for in/out short term gains of $27,733 (24,750 + 2,300 + 683) and no position. Not only has he lost out on the potential for a lower tax bracket, he has lost out on the 75,000 original shares owned for leverage as apposed to what he will likely purchase next at over $1...LOL
This is why I don't day trade or try to time the market. Invest in fundamentals (even in the high risk/ high reward arena). It will pay off!
GLTA,
Strategyone
Lunch hour over on the East Coast. ERHE ascenting to the $1 mark again. When will it break through, nobody knows?
My thoughts on the PR from ERHE. I would much prefer a well written PR with as much details as possible coming out tomorrow than a quicky this morning which couldn't have provided details of the Block 2 signing or percentages or $ or drilling plans etc.
Once ERHE releases this kind of info, I don't think busting through a $1 will be a problem and I don't think it will be hard to hold either.
GLTA,
Strategyone
Unfortunately all these news clips keep stating ERHC. This is why ERHE is not popping up on the "news" alerts. I am guessing that ERHE will actually put out a press release that the stock might benefit from, LOL.
A few things I am curious about:
Sinopec deal with ERHE. How much % does ERHE retain with a carry? How much $ also?
Something not yet discussed: Block 4. ERHE consortium signed for 60% interest. Addax gets 33.3% and pays their share plus 17.7% of ERHE interest. This leave 9% uncovered but in ERHE control. Maybe they deal that to Godsonic like rumored but now it looks like ERHE may get something back in return. I was not expecting anything on that. Who knows, maybe ERHE surprises us and keeps the 9% and pays for that on their own from cash received from Addax and what they may get from Sinopec. Stranger things have happened.
Congrats all,
Strategyone
Wire, this will be my first and only reply to you.
Nobody knows where the share price will go tomorrow or next week. It could be up, it could be down.
Today ERHE finally recieved the news it has been waiting for for a year and a half. There is much more news to be released (details) which couldn't be released before the PSC signings. This info is critical to provide NEW investors the information needed to see a substantial gain from the .90 range. Even with more positive news to come, the stock price will not go straight up.
If you are this upset over the ERHE reaching a huge milestone; nearly closing at it 3 to 5 year high; a greater than 10% gain after nearly 200% gain over the past 3 months, then I think now would be a good time for you to take your profits and find another investment that is a better fit for your risk/reward tolerance.
Good luck to you,
Strategyone
Block 2 signing tomorrow
So much for that BM....
In a way, it might explain some of the low volume pull back. To me, it always seems that there are some trades advancing the news from BM's stories. It might be people that work at Upstream Online or their family and friends but I think there was some front running on the "delay" article. I've got a strong suspicion that tomorrow may go more in the lines of what Meridian is suggesting which is PSC's for both blocks 3 & 4. It would now make sense that the pleasant surprise would be conoil being bumped and the JDA going forward with the remaining players.
As for fun name suggestions:
I just about fell off my chair when I read Meridian Oil (good one, Meridian)
We may want a more business like name...
KMA Oil or (Kiss my Arse Oil)
or MONGO Energy.
Tomorrow looks to be more than interesting once again....
GLTA,
Strategyone
Ok, I just about lost my lunch laughing at that one (I am on Pacific time). Gap is filled....to funny.
Meridian, you are such a tease. "There may even be a pleasent surprise"
I hope there is just to burn a few of the flippers around here.
Looking forward to tomorrow. Thanks for your insights.
Strategyone
As far as I can tell, it has been a very low volume sell off to bring it from .87 to .83/4. Could be that the buyers are now "all in" waiting for tomorrow so the MM's can do their usual games. Will have to wait until after news hits to see where the real volume takes this...
Wire, I think many have that same cautious voice in the back of their mind saying "what can possibly happen this time?". I also think there may be some traders here that are doing the usual buy the rumor sell the news and they are getting out before the news hits tomorrow.
The difference that I think will prevail this time is that if (ok BIG IF) the PSC(s) actually does get signed, there may be a new set of buyers willing to invest as the risk is dramatically reduced. Second, I think we will get news tomorrow of Blocks 3 & 4 being signed from the JDA. Within days we should get multiple PR's: 1 from ERHE regarding PSC signing, 1 from Addax regarding PSC signing, maybe 1 from the Block 3 operator, possibly several more regarding details of JOA's, 1 more from JDA regarding official date for Block 2 with Sinopec, etc.
I do think that with the signings of the PSC's it should open the flood gates for real and valuable data being released that previously was not allowed to be released. It should lower the wild speculations and fear tactics that have prevailed with ERHE for years. It should also allow investors to better estimate the value of ERHE. One of these days Chevron will even spill the beans regarding Block 1.
GLTA,
Strategyone
Maybe those big buys going through at .89 were JS getting back in.....LOL.
Wrong again Mongo, Yes I do know.
Simple facts. Addax gets 33.3% and ERHE get 17.7%. It is simple as that. No more, no less. Simple, simple, simple fact. Here is a tough factual question for you. What is 33.3 + 17.7?
Ok, now if the total amount that goes to the Joint Venture of ERHE/Addax is 51% (oh, darn I gave away the answer) and ERHE started with only 25% bonus free but they ended up with 17.7% free (with a free expense ride plus $18MM), what did ERHE give away to Addax in the negotiation?
Don't make a mountain out of a mole hill. The 9% came from the original total award of 60%. Since only 51% is needed for the Consortium to retain control and operatorship, the 9% was excess.
We may never know when, how, why or who negotiated the 9% away to Godsonic but we do know that in the end it wasn't relevant to ERHE's 25% original bonus free rights. ERHE ended up with 17.7% in exchange for a free ride and $18,000,000.00 in cash. So, if my math serves me correctly, 25 - 17.7 equals 7.3%. ERHE negotiated 7.3% of their rights away to Addax in exchange for $18mm cash and expenses paid till oil.
Once PSC and JOA's are signed (in two business days), a PR and/or 8k will be filed for the material event.
Now, go back to your room and come out after next Tuesday when official details are PR'd.
Mongo, you are like the little kid who was sent to their room for behaving badly and they keep coming back out and asking why.
It is only convoluted in YOUR own mind because you refuse to accept the BLACK & WHITE facts.
In Block 4, ERHE owns 25% bonus free. They can negotiate only with that 25%. They will be getting 17.7% with a free ride in the end. The "consortium" was awarded an additional 35%, which we all know, ERHE is in name only. ERHE will never get any profits from that 35% nor will they pay any of the expense of that 35%. It has 0 dollar value as it stands for ERHE. The 35% Consortium piece plus the 25% ERHE piece together provides controlling interest or Operatorship for ERHE and the consortium.
The 9% that you (and only you) don't understand is out of the 35% originally awarded to the consortium of ERHE/Noble.
Just like Meridian said but now in my words: the 9% going to Godsonic is from the 35% piece awarded to ERHE/Noble consortium. Since that 9% would never provide ERHE any revenue nor create any expenses to them, it has 0$ (yes, add that up one more time Mongo.....zero) value on its own. Since the reduction of 9% from the consortium still leaves the 25% + 26% (35 - 9) or 51%, the consortium still retains controlling interest.
Therefore, no 8K is needed as no material change took place.
Now, Mongo, go back to your room. You are still bad for hitting your little brother. You will always be bad for hitting your little brother no matter how you ask the question or interpret our answer. You now have all weekend to think about hitting your little brother and if you still don't understand it on Monday, we will send you to your room again.
Have a great weekend all,
Strategyone
I'm hoping there is no BM tonight as nothing will matter to the Share Price until the 14/15th PSC signing PR.
Unless, of course, he has some enlightening news regarding Block 1 drilling results or meetings between Chev. and ERHE....
Otherwise, silence is golden until next Tuesday.
Night all,
Strategyone
I personally am not going to waste any energy getting all worked up over who is "doc" or Joe Blog or Meridian or Rancho or Mongo ........ It's all pretty much irrelavant in the grand scheme of ERHE's value. I will let everyones record speak for themselves. I also refuse to speculate on the 100's of conspiracy theories floated over the years here with ERHE and the JDZ.
Here are a few plain and simple truths:
1) ERHE has rights to 6 of 9 blocks in the JDZ, 4 without paying signature bonus.
2) ERHE has rights to 4 blocks in the STP EEZ (two at 100%)
3) These rights have been agreed to, argued over, threatened in international court, renegotiated and now standing on solid ground (even though some may still not be happy).
4) Block 1 of the JDZ broke a new record for signature bonus paid and it was done by two of the largest oil companies in the world. This legitimizes the potential. They started drilling Jan 14th 2006 and expected to get results in approximately 60 days. That puts us around a week away from finding out the truth. No rumors, no back room deals, no speculations (elephants, mammoths, dusters.....) Just the oil.
5) We are one week away from the next announced signing party/meeting/ceremony/event. Until I hear officially otherwise, I expect the signing to get done for blocks 2, 3 and 4 as clearly stated. 5 and 6 are up in the air but I would prefer to see them delayed as ERHE will owe signature bonus on one of them.
6) From the Addax IPO details made public, ERHE will be getting up to $18 million in cash plus a full carry to oil in block 4. This should help greatly in the cash flow department.
7) ERHE has a MOU with the 7th largest oil company in the world for Block 2 (Sinopec) and they are cash rich, oil starved and have shown a tendancy to overpay for oil rights.
Once the PSC's are signed, all parties will begin releasing information on the details of which company gets what percentage/carried to oil/cash etc along with drilling schedules. When Block 1 drilling details are released (oil being struck), it will greatly increase the odds of other blocks with similar structures to be holding the "black gold" (and if heavily publicized rumors of the block 1 find straddling into block 2 are true and made public, ERHE will end up with proven reserves before even drilling.
All of this leads to a once highly speculative OTC stock becoming a real oil company with true calculatable value and legitimized deals with some of the largest companies in the world.
It is all about to unfold. No basher can stop it. No manipulator can prevent it.
Just
a
little
more
Patience................... it will happen.
Good luck to all,
Strategyone
What appears to be good and informative information from a well connected person to ERHE AND a sense of humor. Good one Meridian..... shall we start referring to you as air Jordan..LOL?
Don't know if you can answer this question or not, but, has ERHE heard of any more details on the Block 1 drilling results?
TIA,
Strategyone
Operators and Multiple Blocks - My opinion
I read most of the JDA bidding application info 3 or 4 years ago and I don't remember the details but here is how I view it regardless of what was once written or what the JDA/JMC is actually going by:
The most important thing for the owners of the property over the oil (in this case Nigeria and STP) is getting the oil out of the ground. This means priority number 1 is finding capable parties (oil companies) to drill in deep water and do something with it. This is why the JDA/JMC was courting the biggest oil companies as they would likely have the best resources to get the job done.
The second most important thing (after number one is taken care of) is to get the oil out of the ground as FAST AS POSSIBLE. Simple time value of money here. I can sell 10 billion barrels of oil this year at $10 net profit to the JDZ for $100 billion (just an example) or 1 billion barrels of oil over the next 10 years for $10 billion dollars per year for 10 years. Which would you prefer?
Now, lets look at the major oil companies position:
There number one goal is to have the "rights" to as much oil/acerage as possible. This is the fight for replacing their annual reserves used by developement or purchasing other oil companies rights. This is what oil companies are primarily valued for.
The second objective for the oil company is to Maximize the profit on the oil they do have rights to get. Since oil prices fluxuate based on supply, demand and fear, it will NOT always be in the best interest of one oil company to produce what reserves they do have as fast as they can. Hence, If I were XOM and I controlled Blocks 1, 2, 3, and 4. I would drill one hole at a time to figure out where to start extracting the oil at the maximum profit (in other words, only the biggest single deposits in the easiest to get at locations). I also want to control the output of these reserves once proven. This keeps the price of oil at the maximum the market will bare which maximizes the oil companies profit (and actually would maximize the portion going to Nigeria/STP which also kind of puts them on the same side of the table).
IN SUMMARY
The JDA would like a different oil company drilling in each block that is capable of drilling and utilizing as many rigs as available to the various companies in order for them to get their money sooner. Thus, I think there is a desire or unwritten rule at least, that the JDA only wants one block going to any one operator. For a Chevron/XOM, they want control over the rights to oil to maximize the valuation of their stock price.
Comments welcome
ERHE GAVE UP NOTHING, NADA, ZILCH!
I think we are getting ahead of our selves and quite frankly, looking at it from the wrong point of view.
Let's take a step back and recognized what ERHE is and has.
ERHE started out with 25% preferential rights (bonus free)that they decided on for Block 4. ERHE has nothing else on Block 4. What they did is negotiate with another oil company to work with them on Block 4 (in this case Noble). It doesn't matter whether the "consortium" has 51%, 60%, 75% or 99%. ERHE has ONLY 25% bonus free to negotiate with. The end results is that ERHE is getting 17.7% in the end in exchange for "up to" $18 Million in cash and a FREE ride to production with the new deal with Addax. I am guessing that the original deal with Noble would have been for less, maybe a lot less.
Any amount above ERHE's free 17.7% is simply the other participant(s) within the "consortium". The other player in this case is Addax. They are getting 33.3% of the benefit but paying $18 Million to ERHE and 51% of the cost to production. At the point of production, I am sure, ERHE will start picking up 17.7% of ongoing costs of production paid for by the revenue stream of that production. The MAGIC of the 51% is simply the operatorship control. With Noble or Addax going in on the "ERHE Consortium", they are only paying 33.3% of future costs essentially have 51% controlling interest in the block.
Remember, for all the big oil companies out there that actually drill and produce this oil, there are many areas or blocks to bid and explore. The JDZ is unproven territory in the ultradeep. How many blocks did Nigeria alone put up for auction in their EEZ last year? (like 100 or something). Look at the other African countries that have their own EEZ's. The big oil companies want to diversify their stakes around the world. We (as ERHE small time shareholders) may think the JDZ portion of the GOG is the be all and end all of oil exploration on this planet but I'll bet the oil companies think differently.
My opinion is that ERHE is getting a GREAT deal at 17.7% of the block with a free ride to production and the $18MM cash. This all they would have gotten regardless of the percent for the Consortium. I think ERHE would have ended up with less than half of their free 25% if Noble would have stayed in the picture. JMHO
Be happy,
Strategyone
leo, thanks for the update from your source.
I am right there with you in both age and time in ERHE. It's been 4 years waiting on fortnights for good news to finally propell this stock into its valuation stage. I have slowly accumulated more (probably more than I should have), averaging up each time.
I can be more patient now with the events unfolding. It is especially easier to be patient with the stock hanging around .80's instead of the .30's a few weeks back, LOL.
Keep the source info coming from all,
Strategyone