ERHC Energy Inc (ERHE)

[pinecat]

Sorry if this has been gone over, but did we really pay Feltang about $13M to set up the Sinopec deal in which we only got $13.6M from them plus carry minus the interests in block 2 that we gave up?
What's wrong with my thinking here?



From the last quarterly:
Note 4 - DRSTP concession fee

As described in Note 3, during the quarter ended March 31, 2006, the Company
entered into production sharing agreements in Blocks 2, 3 and 4 under which they
sold various participating interests for total cash proceeds of $45,900,000. The
Company agreed to pay a $3,000,000 cash success fee to Feltang International
Inc. ("Feltang"), a British Virgin Island company that was responsible for
obtaining Sinopec's participation in Block 2. Under the agreement with Feltang,
in addition to the cash payments, the Company also will issue 5,250,000 shares
of common stock and warrants for 6,500,000 shares at $0.355 per share. The
common stock was valued at $4,803,750 based on the quoted market value of the
common stock on the date Sinopec signed the production sharing agreement. The
warrants were valued at $5,154,500 based on a valuation using the Black-Scholes
Option Pricing Model and the following assumptions; market price of $0.915,
strike price of $0.355, volatility of 115%, interest rate of 4.42%, dividend
yield of 0% and expected life of 4 years. Following is an analysis of the sale
of the participating interests in blocks 2,3, and 4.