ERHC Energy Inc (ERHE)

[balance_builder]

Still seems to have legs IMHO. Seems SEO's transfer of ERHC shares to a new holding entity of Chrome can't be just by chance....rather a premeditated move prompted by his comment of "enhancing his holdings"???

Note how oilphant made mention of Chrome back in December of 2006.....and now we see SEO moving his shareload around.....

"Posted by: oilphant
In reply to: None Date:12/23/2006 6:08:29 PM
Post #of 113878

Merry CXOMAS all!
5 players 5 presents
Do we create a Chrome message board in the New Year?"


Then we have SFreed making a several comments that could correlate well with the post I am replying to when he stated in part on 8-23-07,

"He may sell some then, but I think something a little more creative is more likely to occur."


On 10-24-07 SFreed also made a comment that correlates well with the post I am replying to when he stated in part:

"Things might get interesting now that EEL is back trading. The combination could be very interesting."


Here's yet another correlation to the post I am replying to where SFreed posted on 8-13-07 in part (Note: recall our lack of CEO/CFO and potential reasoning for),

"As I understand it (I was not involved but heard from a very credible source and confirmed from others after the fact) the deal was a swap of at least part of his shares.

The result would have been him maintaining the upside on his entire holding through ownership of shares of another company, new board members and some new management and him stepping down as Chairman."


Here's an SFreed comment that also seems to go with the same flow which was posted up on 8-16-07, 4 days after SEO stepped down as COB.

"This is wonderful news for ERHC. It paves the way for the
investigations to be dealt with, uncertainties to be cleared up and further partnerships to be entered into. The value of our company has increased dramatically today as a result.

I will comment more later, but we have turned a corner.

The King is dead. Long live the King."


My my....isn't this SFreed 8-16-07 post enlightening??? Makes me wonder is Starcrest is in the same Chrome subsidiary where SEO moved 1/3 of his ERHC holdings to????????

"Starcrest is a wholly owned by Chrome (http://www.starcrestnigeria.com/)."

Yep...verified via starcrest link:

ABOUT STARCREST NIGERIA LIMITED.

"Starcrest Nigeria is a rising star in the natural resources sector in West Africa, and is a Member of the Chrome Group of Companies"



Another indication from SFreed on 7-5-07 as to what the future could hold???

"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."


SFreed followed the above statement the next day (7-6-07) with this post (see below). I wondered at that time why he didn't just say Addax. Now I think I know why....because Addax will only be a partner in this newly formed company where several teams/players will throw in their presents:

"I think the following has a fairly good chance of occuring within the next 12 months:

Because of the ever increasing pressure from the SEC and DoJ (this is a certainty), Offor could be willing to sell/swap his shares in ERHC to another public company for shares (not cash). This company would certainly have to be very familiar with the region and have its own politcal connections (obviously not in conflict with Offor's).

From there, the acquiror could make a follow-on offering on the same terms to the rest of the shareholders.

This would be attractive to Offor for a number of reasons:
1. He maintains an upside on ERHC's assets and rights.
2. Depending on the size of the acquiror, he could end up being a significant shareholder and able to maintain a board seat. This is an important for the ego factor.
3. It would be better for Offor is the acquiror is not a US company. This would allow Offor to get his ownership of the assets outside of the grasp of US regulators. This insulates him against any potential judgement in the US.

I would think this would be attractive to the rest of us shareholders:
1. We maintain an upside on the assets and rights.
2. With Offor remaining a significant shareholder, we maintain his interest and connections to ensure our interests in the region are protected. This is very important to a number of people who think we lose the game if Offor stops playing.
3. If the deal is done with a company with its own connections, we are even more secure.
4. So long as the acquiror is listed in a reasonable jurisdiction (UK, Canada, Hong Kong, Australia) we can be happy with the liquidity.
5. Presumably the acquiror will have real management and operations that would dovetail nicely with ERHC's assets and further rights. In this case 1 + 1 = 3 for everyone.

This is an opinion in reading the tea leaves, not a statement based on fact. We can think amongst ourselves who might fit this profile."


The 10K's acknowlegement of SEO dividing his shares between two Chrome Holdings is most interesting and should have everyone focusing their attention on same. While I know this transfer of shares happened between the last 2 10K's....I don't know exactly when. I am noting that it "is possible" that this was a very recent exchange and we'll see the correct filings in a matter of days as they have 10 days to file a schedule 13D.

Interesting link tieing Starcrest and Petrobra's together...a trusted by STP'ers Oil company.

Makes one go hmmmmmm??? Throw Petrobra's into the list of co's listed in the post I am replying to. There was also a hint, at one time, of Petrobra's being interested in EEL.

EEL Properties
ERHC Properties
AFREN Properties?
Starquest Properties by way of Chrome?

Nah...cosolidation can't be happening, can it??? This from SPP119, a trusted poster on the EEL and an ERHC shareholder:

Risk-Averse Investors Shun Small Oil Cos, Boosting M&A
by James Herron Dow Jones Newswires Thursday, December 13, 2007


LONDON Dec 13, 2007 (Dow Jones Newswires)
As the credit crunch bites, risk-averse investors are taking flight to quality energy stocks and hammering many small oil and gas companies, potentially triggering a wave of consolidation that could see two-thirds of energy listings on London's Alternative Investment Market vanish, say industry executives.


Ninety-dollar a barrel oil may have helped such companies to weather the worst effects but the sector is still in for a rough ride as investors shun companies struggling to execute projects in an overheated market.
"We've seen a material shift from investors," said Simon Ashby-Rudd, Executive Managing Director of Corporate Finance at Tristone Capital Ltd, adding that they are favoring medium-sized companies that already have oil and gas production, leaving smaller more speculative exploration stocks in trouble.

The collapse of the market in subprime U.S. mortgage securities this summer has prompted many banks and investors to shun risky investments as quickly as they had gobbled them up. But even as previously staid markets like interbank lending have seized up, the high risk oil and gas sector has avoided the worst of it.

"Banks generally view lending to the oil and gas sector as much more secure because you have a hard asset there to take security over," said John Hamilton, Executive Director of Oil and Gas at Dutch investment bank ABN Amro Bank Ltd. (AABPL.KA). The rise in the oil price close to $100 a barrel last month has also helped, he added.

"It's not quite as negative as it has been in other sectors...but it should become a more conservative lending environment," Hamilton said.

A more conservative approach from investors in AIM-listed oil and gas companies has begun to have a significant impact, quite apart from the credit crunch.

As the oil price rose from $35 a barrel in 2000 to around $90 currently, around 100 new oil and gas exploration companies were listed on AIM. For several years, investors couldn't get enough of them.

The oil price has stayed high but the huge exploration boom it stimulated has left everything from drilling rigs to geoscientists extremely expensive and hard to come by.

"In 2004 we drilled a well offshore Equatorial Guinea in 1500 meters of water and it cost us $12 million. I don't think anybody is drilling deep water West Africa now for less than $40-60 million, and there are wells over $100 million," said John Doran, Chief Executive of ROC Oil (ROC.AU). Other industry costs have suffered similar inflation.

Even for companies with the cash in hand, many are struggling to secure access to vital equipment in a world still dominated by global giants such as ExxonMobil Corp. (XOM) or BP PLC (BP).

Tony O'Reilly Junior, Chief Executive of Ireland's Providence Resources PLC (PZQ.DB), said his company has only been able to drill one well this year, despite having several good prospects, because of the difficulty of securing rigs.

Many other executives operating everywhere from India to Angola described problems finding the right people and equipment.

Investors are realizing that the smaller pure exploration companies simply do not have the resources to execute their business plan, said Asbhy-Rudd of Tristone.

"The average capitalization on AIM at the end of 2006 was $70 million. $70 million is simply not big enough to be active on the international stage. It will cost $20 million to drill a well in the central North Sea," he said.

"You cannot have your entire capitalization used on three wells. If you drill your first two wells and they are dry, which statistically they will be, your share price will be in the toilet, as Wham found out," he said.

Wham Energy's share price almost halved shortly after listing on AIM in 2005 when its first well came up dry. The company struggled on for another 18 unsuccessful loss-making months before agreeing to be bought for around half its original market value by Venture Production PLC (VPC.LN) in August.

The shares of Wham's fellow AIM-listed explorers have consistently underperformed compared to better capitalized companies with their own production, like Venture.

A report published last month by Ernst and Young said half of small oil companies on AIM are trading below their issue price. Investors are starving these companies of capital with 65% of them having less than $20 million in net cash, the report said.

"The (capital) raisings that have occurred in 2007 have been from successful companies," like Imperial Energy (IEC.LN), which produces 10,000 barrels of oil a day, Ashby-Rudd said. "A lot of smaller companies have not been successful and have not been able to capitalize."

"If capital markets aren't open, they are going to run out of money within 12 months. That is what is driving the mergers and acquisitions market," Ashby-Rudd said.

In addition to the Wham transaction, Cairn Energy PLC (CNE.LN) last month bought AIM-listed explorers MedOil and Plectrum Petroleum.

"We believe that somewhere in the region of two-thirds (of AIM-listed oil and gas companies) will disappear over the next two years. They will be replaced by more mature companies who are in the wings and better capitalized," said Ashby-Rudd.

A report by equity analyst Tim Heeley at investment bank Daniel Stewart published Thursday identified companies like Europe-focused explorer Ascent Resources PLC (AST.LN) as being in the most difficult position, with just $5.5 million on their balance sheet, but without proven reserves. Twenty-three other AIM-listed companies are in a similar situation, the report said.

Companies like U.K. North Sea operator Nautical Petroleum (NPE.LN), which has 65 million barrels of proven and probable heavy oil reserves but is likely to face high development costs and will need to raise additional cash, have a mixed outlook, the report said.

Large reserves are themselves no guarantee of success as Russian gas operator Victoria Oil and Gas (VOG.LN) has discovered. "With 35 million barrels of oil equivalent (Victoria) should be well positioned. However constant problems, both technical and political, have prevented value add for investors and the stock currently sits at 70% of its listing price," Heeley said.

Most likely to survive the current turmoil are small companies like Faroe Petroleum PLC (FPM.LN). Well capitalized, with limited reserves but operating in low risk environments with growing production to generate cash flow, Heeley gave the company a buy rating.

Survivors of the current turmoil face a reasonable future. In addition to continued high oil prices, they are likely to benefit from an influx of capital from North America.

"A lot of North American investors have become frustrated with Canadian operations, the change of the tax royalty system in Alberta has been the final straw that broke the camel's back," said Ashby-Rudd. Funds and private equity groups based in North America are starting to allocate 15-25% of their capital internationally, he said.

"Despite the market turmoil, I believe the bank market is very open and very aggressive for well-structured oil and gas transactions," said ABN Amro's Hamilton.

Ashby-Rudd said Imperial Energy's latest capital raising was fulfilled within 45 minutes and Tristone raised $90 million for Faroe Petroleum last month.

"We've been involved in seven financings in the last two weeks, so the market is there for good companies," he said.

Copyright (c) 2007 Dow Jones & Company, Inc.
http://www.rigzone.com/news/article.asp?a_id=54001


This post thrown into the mix is somewhat confusing to my current mindthink:

Posted by: oilphant
In reply to: None Date:12/6/2007 7:14:59 PM
Post #of 113881

Recent chatter has only two Scenarios.

XOM takes out ERHC
SEO/Chrome + EEL walk with ERHC


Is SEO/Chrome the secret shareholder lender that will capture nearly 20% of EEL shares in a soon to be (today is the due day) transaction which will be followed by a takeover bid by Chrome or a Reverse Merger? Makes me wonder....both ERHC and EEL have similar trading action: Both beat to a pulp.

Things ARE developing IMHO. Oily and SFreed haven't changed their views of around January for "ERHC not to be ERHC". First step may be SEO/Chrome gaining controlling interest of EEL????? The 30 some million shares coupled with what he might already hold gives him quite a toe hold and maybe even controlling interest??? Is SEO the secret shareholder lender?

He (read: SEO) already has a partnership with Starcrest thru Petrobra's which is a very strong deepwater player who has already expressed an interest in STP EEZ. Of course with SEO and Wade C. not seeing eye to eye......it would be fitting for Wade C. to step aside.....which he recently did.

Kobi...and Petrobra's rumorings of deals in the JDZ/EEZ? Would Chevron or Anadarko join that mix? Remember, we still have the very clear ERHC co mention of an interest in North American oil properties.

Things are moving along IMHO....and about to become ultra interesting IMHO. I must say, however, that I STRONGLY hope ERHC isn't taken over via Chrome and EEL as Oily suggests. That would be very ugly.

Maybe, just maybe the Africom proposal will bring the US majors to the table and XOM or CVX will make it all good.

Lastly, I want to add that I appreciate the SFreeds and the Oilphants who I strongly believe give us a true glimpse of what might be occurring. It is greatly appreciated.