ERHC Energy Inc (ERHE)

[Krombacher]

No, that's not what I think at all.

You see, Kosmos valued block 4 at 17 cents a share and xrimlinger.com valued Oranto's adjacent block 3 at 20 cents a share. So the value of block 4 is around 17 to 20 cents.

BUT

That's before oil prices were as high as they are now and before we discovered that block 4 has source oil. And does not include a bidding war which might also happen over block 4.

So, I think ERHC will get half a billion to a billion in cash and from that they can certainly afford to pay $30 million in dividends of a penny a share to squeeze the shorts.

BUT

The real value is in the JDZ where Total has blocks adjacent to ours. Xrimlinger.com valued similar assets in the JDZ for 80 cents a share.

Hence, I believe that after the Shell deal, Total will step in and buy ERHC for its cash from Shell AND for its JDZ assets.

So after the Shell announcement, shareholders should NOT sell and instead wait for the Total deal to receive Total shares UNLESS the Shell announcement and/or the dividend is enough to cause a short squeeze into the dollars. If that's the case then it's ok to sell into that squeeze for dollars per share, but otherwise just wait for Total to come in after Shell.

Krombacher