ERHC Energy Inc (ERHE)

[midtieroil]

It is VERY possible that CEPSA would delay drilling, or that ERHC does not pay one of the cash calls because their bank accounts are frozen by the lien. What happens from there would be spelled out in the joint operating agreement. Again, were I CEPSA I would not just assume ERHC is going to pay and not protect myself against their possible failure to pay. I think CEPSA will drill. The question is will ERHC still be a party to that drilling if they lack the cash to participate. This is what everyone on this board should be asking management. But, for some reason, management is hiding this from us and, those that claim they are in contact with management, won't even ask. Again, I think the most likely scenario is that CEPSA takes more of the block and, in exchange,they cover ERHC's share of the cost. But it could delay drilling while that gets worked out and it would result in ERHC owning less of the block.

I don't believe the IRS is going to allow ERHC to pay drilling costs instead of their tax bill when ERHC cannot point to a single source of revenue to satisfy the IRS deficiency. By the way, these tax attorneys and dozens of advisors ERHC supposedly has to try to work things out with the IRS and CEPSA won't come cheap.