ERHC Energy Inc (ERHE)

[Nightdaytrader]

To understand Kosmos and STP EEZ block #4, you have to go back a few years.. You can't look at it from today's perspective... Everything has changed..

Go back a few years ago and Kosmos Energy was acquiring STP EEZ blocks and they wanted to drill in all these STP EEZ blocks and find oil/gas... That has been their Company philosophy for a long, long time.. That is what they do.... But extracting a huge find costs billions and billions of dollars....

Kosmos found this out in Senegal/Mauritania.. After drilling and finding 100 TRILLION cubic feet of natural gas (4th largest find in world history), Kosmos understands that they know how to find oil and gas... but you need a super major partner with billions of dollars to develop world class fields that will produce for 30+ years... That is why in the STP EEZ, they had BP as a partner, then also Shell (for awhile)...

So Kosmos wanted to drill in STP EEZ and then share the production/operations costs with super-majors.. That was their STP EEZ philosophy..... That is why they have partners like BP, Shell, Chevron... That is why Kosmos was leading the STP EEZ Block #6 drilling... GALP doesn't know anything about drilling in this type of deep water.. they needed Kosmos, now Shell to help lead that drilling...

However, the huge oil price decline and the COVID19 pandemic made Kosmos changed their philosophy... They didn't have enough cash to continue to explore new Frontiers... They are now focused on operating and producing from existing fields (Ghana, Equatorial Guinea, GOM), or new drilling where they can easily tie into existing production facilities.... So at this moment, they have cut way back on exploration into the new frontiers like Nambia, STP, South Africa, Congo, etc..

Once the Kosmos Senegal/Mauritania fields come on line in a couple of years, things could change and Kosmos might be back, exploring the frontiers again...

ND9