S. Freed on EF .... You have answered many of your own questions.
Keep in mind a few things:
1. ERHC was involved with Sao Tome long before the concept of a JDZ
and successfully negotiated and renegotiated rights into positions in
the JDZ as it was being contemplated.
2. Offor had nothing to do with the formation of the JDZ; that was a
much bigger political issue. In the wake of the dispute with
Cameroon over the Bakasi peninsula, Nigeria wanted to change its
profile on the international stage and co-operated with Sao Tome in
establishing the JDZ (I know this from a former lead negotiator for
Nigeria and a friend at the law firm Sao Tome used to assist in the
documentation). This was going on long before Offor got involved
with ERHC.
3. Having said that, with the possibility of getting a significant
interest in the JDZ as it was being formed and to probably be in
position to push the JDZ formation through faster, Offor seized an
opportunity. Offor definately accelerated the process. Nigeria
could have held on for many years against Sao Tome.
4. Offor, however, did not bet on being vilified by the Sao Tomeans
and NGO's that came late to the party. Nor did he bet on having to
renegotiate ERHC's interests while defnding the company from all
sides. Offor could not and did not do this alone. Along with the
very capable Chude Mba and John Colemen, he had many experienced and
well connected advisors that ran the negotiations, ran numerous value
comparisons on the different deal outcomes, handled relationships
with the government and regulators, got the stock back trading in the
US and generally made things stick in the US. Offor ensured the
local side was handled and that the company wasn't blindsided. Did
other higher ups in Nigeria press the US at high levels as well?
That is very possible, but I am not aware of it.
5. To be realistic, there was little out manouvering to be done in
the US. The options were solid and an arbitral award. The problem
was that XOM, et al could drag things out for years and wait ERHC
out. ERHC had nothing to play with - no cash, no assets to
leverage. Legally, we just had to hold on.
So, how did we survive? Offor's connections and work locally was a
significant part of that - he certainly pushed things faster that
they may have gone otherwise. I have never doubted that nor have I
ever attempted to belittle his contribution to the company. He took
risks, made things happen and has and will reap rewards. But many
others had a hand in it, especially in the US.
The AG's report is sour grapes and, as we've seen, has little basis
in fact. It may well have prompted the investigations, which will
ultimately prove that ERHC as a company did nothing improper.
If there was anything dodgy, it was Offor's own decision and related
to his own holdings (he could easily give or promise shares in
Chrome), but that is somewhat irrelevant to us. Investigation into
this is merely a near term annoyance for us.
We are in no danger of losing assets, pecentages, deals with Addax or
Sinopec. That really annoys companies that thought they shouldv'e
done better in the region. Too bad.
How do we survive the current problems? We hold fast and time will
reward us all. However, there are many things Offor and the Board
can do to make things easier for himself and more comfortable for the
rest of us.
Unless there is incredible pressure from the US authorities or he has
a desparate need for cash, I do not see him selling outright.
However, what is to stop him from selling his shares to another
company (and I'm not talking a major) for shares so he keeps the
upside? He then remains an interested and viable shareholder (make
that part of the deal) without the same problems. The only thing he
gives up the the Chairman's seat. What is to stop that company from
making a follow on bid for shares to the rest of us? If its a
company with credible management, experience in the region and they
come with a reasonable share bid, we'd really have to consider it.
The only way I'd sell is if I get to keep the upside - swap shares
for shares.
