ERHC Energy Inc (ERHE)

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PA RESOURCES: DRILLING OF A WELL IN BLOCK H IN EQUATORIAL GUINEA POSTPONED
29.jun.07 08:09

A dispute has arisen between the operator Pioneer
Natural Resources, and its partners in Block H
offshore Equatorial Guinea, including Roc Oil,
Atlas Petroleum and PA Resources. The essence of
the dispute is a disagreement about how and when a
second exploration well should be drilled in Block
H and the costs for this. Arbitration has been
claimed and the drilling of the well is postponed.
PA Resources has a 3.1% interest in the block.

A dispute has arisen between the operator Pioneer
Natural Resources, and its partners in Block H
offshore Equatorial Guinea, including Roc Oil,
Atlas Petroleum and PA Resources` subsidiary
Osbourne Resources. The essence of the dispute is
a
disagreement about how and when a second
exploration well should be drilled in Block H and
the costs for this. Arbitration has been claimed
and the drilling of the well is postponed. PA
Resources has a 3.1 percent participating interest
in the block.

PA Resources AB (publ) today announces that a
dispute has arisen between the operator Pioneer
Natural Resources Equatorial Guinea Limited
(`Pioneer`), and its partners in Block H offshore
Equatorial Guinea, including Roc Oil Equatorial
Guinea Company (`ROC EG`), Atlas Petroleum
International Ltd (`Atlas`) and PA Resources AB,
through its wholly-owned subsidiary Osbourne
Resources Ltd (`PA Resources`).

The essence of the dispute relates to the Farm-in
Agreements, which each partner in Block H entered
into with Pioneer in 2004. These agreements
implied, in brief, that Pioneer gained
participating interest in the Production Sharing
Contract for Block H, and in exchange, Pioneer
committed to pay a share of the future costs of
drilling two exploration wells in Block H. The two
wells are part of the working obligations for
Block
H which the state of Equatorial Guinea has
approved.

The first of the two wells, H-1 (Bravo), was
drilled in June 2004. Pioneer thereby discharged
its responsibility in that regard. However, ROC
EG,
Atlas and PA Resources maintain that Pioneer has
breached its obligations with regard to the second
well.

In August 2005, all the partners in the Block H,
including Pioneer, resolved to drill the H-2
(Aleta) well in satisfaction of the work
obligations for Block H. That well would also have
discharged Pioneer`s obligations to the other
partners under the Farm-in Agreements. The
Government of the Republic of Equatorial Guinea
subsequently approved the drilling of the H-2
(Aleta) well. Until early this year, all partners
in Block H were proceeding on the basis that the
well would be drilled, although the precise timing
of the drilling was subject to rig availability.

Earlier this year, Pioneer indicated that it did
not wish to proceed with the drilling of the H-2
(Aleta) well and did not consider itself bound to
fund its parts of the costs of drilling the well.
Pioneer further indicated to the partners that
there were two reasons for this: the enactment of
a
new Hydrocarbons Law by the Republic of Equatorial
Guinea and escalating costs of drilling the well.
PA Resources`, as well as the other partners view,
is that Pioneer is not entitled to take the
position it has.

In order to seek clarification of certain
procedural matters under the terms of the Joint
Venture Agreement which governs the operations and
the co-operation between the companies, Pioneer
commenced arbitration actions against ROC EG,
Atlas
and PA Resources, on 14 June 2007. Subsequently,
ROC EG notified Pioneer of claims for breach of
Pioneer`s contractual obligations under the Farm-
in
Agreement between ROC EG and Pioneer and further
advised Pioneer of its intention to pursue its
claims through arbitration. PA Resources has
authorized ROC EG to pursue the dispute.

Until this dispute is resolved, it is unlikely
that
the drilling of the well H-1 (Aleta) will proceed.

Pioneer Natural Resources Equatorial Guinea
Limited, a wholly-owned subsidiary of Dallas-based
Pioneer Natural Resources Limited, has a 50
percent
participating interest in Block H. Roc Oil
Equatorial Guinea Company has a 18.8 percent
participating interest, Atlas Petroleum
International Ltd a 28.1 percent participating
interest and PA Resources AB has, through its
wholly-owned subsidiary Osbourne Resources Ltd, a
3.1 percent participating interest.

Stockholm, June 29, 2007
PA Resources AB (publ)

http://nettavisen.solutions.six.se/na24no/site/stock/stocknews.page?magic=(cc%20(newsmode%20press)%2...

Seems ERHC may have known about this dilema in April when ERHC shareholders were "cautioned" by our CEO?