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Matt, still no reaction, in how many days? Sorry, but I will create another account. Although it seems to be a violation of the TOS, I see no other way to start posting again, since you do not respond. Have been patient enough!
Kind regards,
Petrotsar
Matt, no response, am I supposed to create a new account to get out of jail.
How do I get out of here?
Mr. Matt, why am I in Jail. What did I do wrong?
Cash2blow, I do understand SEO's position in Nigeria and I knew, or had a feeling, he would be able to secure the rights. And so he did.
I also understand how these things get done in that part of the world. I just hope there are no links to the houston office. IMHO SEO's involvement is still required with the STP EEZ.
Walldog, sometimes you overlook the obvious when it is right under your nose.
There two parties that got better deals in the JDZ?
I will give you a hint DRSTP and FRN
Maestro look at the date of the feltang agreement jan 23. On jan 23 Pioneer was still our partner. Pioneer bailed out about two weeks later. shortly after pioneer walked, erhc announced a MOU with sinopec.
I assume that in the two week period prior to pioneer bailing out a deal was made with sinopec and that no other partners were considered. Yes i am implying erhc did not consider all the offers on the table.
LowFloatGoat I am invested in Afren, I probably read the report before you did. And let's be realistic about the report it is not brilliant.
LowFloatGoat. The discussions started with my opinion that I think that sinopec got in way too cheap compared to angola. The Afren website basically proofs my point as the entry price of Sinopec and Addax. I do not disagree with you. I disagree with Dadd.
Dadd, following that/your line of reasoning, you could easily argue that erhc is overvalued today.
Kuxe, I do understand the benefit sinopec/addax provides to erhc: zero interest, non-recourse debt financing (kind of project financing). sinopec/addax get all erhc's cost oil.
The future interest charge foregone by sinopec is the value transferred from sinopec to erhc. Still, the present value of the foregone future interest charge plus upfront signature bonus minus feltang payment is peanuts compared to the signature bonuses paid in angola.
I agree with you raising that question? It seems that the deal they got with ERHC is very very cheap. Too cheap.
Why on earth did ERHC have to pay for Sinopec's involvement. According to the 10Q we did not have to pay to get Addax involved.
Magicatlast,
In general, I do not invest in companies as such, but in management capable of delivering results. In other words I invest in people who can deliver.
I have based my decision to invest in erhc solely on SEO's involvement. I know his powerbase and I was convinced that he would get the rights for the Company.
I am 100% sure SEO bribed government officials in STP and FRN. Why, because in those parts of the world bribing is as natural as breathing. It is a cultural thing. And we all benefit, don't we.
Now my only concern is whether SEO structured these bribes outside the scope US FCPA legislation. When looking at the 10Q I observed some issues that potentially tie back to the Houston office, such as the 9% in block 4, the interest charge of sinopec, and the feltang deal. That's all.
It appears that some fellow posters are really stressed out.
Since 2003 I have accumulated a little less than 5 million shares at an average of .34 (rounded obviously). So I think I am entitled to my opinions and my concerns.
With the kind of info requested I am pretty sure they are invesitgating erhc. What or who else can be involved in that communication.
Magic, I thought ERHC was awarded a 25% option interest and a 35% consortium bid interest.
According to Meridian the 9% was apparently sold/transferred to Godsonic. If that is so, why wasn't that mentioned in the 10Q.
Thanks, that is way back. I will look it up.
The way the 10Q is worded implies ERHC owned the combined awarded option and bid interests after Noble and Pioneer left the scene. Otherwise they could not sell the percentage participating interests to Addax and Sinopec.
I assume the wording on the 10Q to be accurate as it took a long time to prepare the 10Q.
That leaves unexplained the 9% that is not accounted for in JDZ Block 4.
Thank you.
I see, thanks. That is one concern less.
Who are you, and who is M. Meridian.
Is this a hostile community or what. Am I supposed to get into fight here?
As per you comment I checked out Meridian and Mongo. No I am not one of them. Why the hostility? And what is RB?
Who and what is meridianonrb and RB.
I think the current 8-k states it all. ERHC dealings with the local governments are being investigated.
amj23,
Sir/Madam, I may be new to this board indeed, but I have a substantial long position in this stock for a very good reason since 2003.
With all due respect, I do think there is an investigation and ERHC is the subject. I simply cannot believe that a search warrant was executed for a fishing expedition. If the company is not subject of the investigation, then where is the PR stating that it is not.
Art2004, didn't STP get 40% of the USD 145 MM signature bonuses.
Art2004, the scenario you are painting is even far worse. That could be a seriouos ground to revoke the license from ERHC.
10Q Observations.
1. Sale of participating interests:
According to the 10Q the Company has been selling participating interests to Addax and Sinopec. I must assume that the Company owned the participating interest they were selling (how else could they sell something they did not own).
That leaves me with the question as regards the missing 9% for Block 4 (17.7+33.3=51% while there was 60%). Perhaps the company did not own the 9%, so could not sell it, but then who does own it. Does the missing 9% have anything to do with the current investigations into the dealings of ERHC.
2. Benefits to erhc
As regards the sale of the participating interests I identify two valuable benefits to erhc.
a) signature bonuses paid by Addax and Sinopec to the Company
b) interest free non-recourse debt financing of erhc's share of petroleum expenditures. The value here is the foregone interest, which can very substantial.
WELL DONE MINNOW
I have never seen any deal like it which such minimal dilution.
3. Sinopec interest charge
I saw a paragraph about an interest cap of 6% on USD 35 MM financing. I think that it is strange, because 6% of usd 35 MM is absolutely nothing in the scheme of things.
My take on it is the following: I think Sinopec can recover a capped interest charge of USD 35 MM from ERHC, because Sinopec paid a USD 35 MM entrance fee to a third party.
The reason for this thinking is the following. If you look at the structure of the participation agreements it seems they used one and the same template. split interest according to a formula (I assume), signature bonus, and interest free debt finaning. And then in Block 2, only Sinopec is suddenly recovering an interest charge. IMHO that is too obvious. I also think it is realistic that sinopec is paying to get in to the block, because they are not a qualified deep offshore operator, they needed to pursuade some parties. Could this be subject of the investigation.
4. Feltang
The latter point brings me to Feltang, why would ERHC be paying anybody to get sinopec to the table. It should the other way round. At the time that Sinopec got involved, the results of Obo-1 were known to intimi in the industry. I assume more than one party wanted to get into block 2. Why wasn't this agreement filed with an 8-k. It is material.
And what about the date of the agreement Jan 23. As far as I recall, Pioneer was in the deal at the time. We had an agreement. Signing an agreement like Feltang is a serious breach of trust contract partners owe each other. Pioneer my now know that ERHC was trying to deal with somebody else behind their back. Pioneer may feel canned/forced out. Do they have a claim over the asset?
So who were the Feltang money, shares, warrants paid too. Has this been the cause of the delay in filing, because the auditors were not comfortable how to handle these payments. Is it going back to SEO, to recoup his "costs" on behalf of the company? Is that what is being investigated.
5. Conclusion
We have excellent deals in the pocket, but my concern is that there are some issues that could attract the attention of the Feds for a while.
Thanks.
Thanks I noticed, but no further explanation. we already knew this. It does not seem to be a big problem.
Great 10Q is out. Excellent numbers.
But where is info on the search warrant. It is not addressed so it does not seem to be a problem. I assume the feltang deal was the problem.