ERHC Energy Inc (ERHE)

[nordicroots]

Rather than address the main part of your question regarding "WHO WOULD BENEFIT?" maybe we can have some discussion around the assumption built into the second part of your question about recovery instead?

We are all aware of the state of the energy market today and how the economic shut down imposed on seemingly everyone nearly everywhere effectively stifled demand and indeed most would be eager to see the markets bounce back to where we were before that inconvenient interruption. But while we were distracted by COVID inspired lock downs and had our attention diverted elsewhere, a lot of the energy companies have quietly begun their transitions from being International Oil Companies (IOCs) to International Energy Companies (IECs) and in the process seem to be moving quickly to endorse UN Sustainable Development Goals (SDGs). Many of the UK/European companies have already jumped on that bandwagon (Total among them) while the big American IOCs have sort of resisted the so called energy transition so far.

Why do I bring that up? Because it sure seems to have a bearing on what any sort of recovery will look like for energy investors everywhere and more specifically how it all shakes out will obviously have an impact on potential suitors for ERHC given the fact that there is a hope/expectation built into the narrative here on this board that we are just waiting on some sort of a deal to be consummated.

What I am seeing with the strategies of the UK/European oil companies is that they are altering their capital expenditure strategy and beginning to shift their investment mix, slowly at first, over to alternatives that by 2050 will allow them to meet the SDGs and make good on their "net zero" commitments. Some of this will be aimed at achieving low carbon intensity and ultimately meeting their forecasts/commitments on emission projections involving scope 1, 2 and 3 emissions. Let's just say this is a complex and fairly ambitious undertaking.

If you go to the Total website and start reading through their ambitions and commitments you will see a statement that hints at their new strategy of "concentrating on low break-even projects" and then you will want to ask yourself if you are confident that drilling ERHC's block would fall neatly into that sort of strategy. If it does then that is great news for all LT investors on this board, if not - it may change some of our thinking with regards to timing. Maybe you see it the same or a bit differently?

Here is the link to the page if you want to read it - https://www.sustainable-performance.total.com/en/our-challenges/climate#strategy these are the specific paragraphs I read and quoted from:

"3) AVOID EXPENSIVE OIL, REDUCING EMISSIONS AT OUR FACILITIES AND PROMOTING SUSTAINABLE BIOFUELS
The Group foresees a long-term stagnation, or even a decline, in the demand for oil and is, therefore, concentrating on low break-even assets.
Additionally, Total is taking steps to reduce CO2 emissions from its operated facilities and a dedicated task force bringing together different skills in the Group was set up in 2019. The Group has set itself a target of cutting GHG emissions from its operated oil & gas facilities from 46 Mt of CO2e to less than 40Mt of CO2e between 2015 and 2025.
Improving the energy efficiency of the facilities is an essential part of this effort. The Group aims to improve its energy efficiency by an average of 1% per year over the 2010-2020 period, at a time when exploration is becoming increasingly complex..."