ERHC Energy Inc (ERHE)

[balance_builder]

Time to take my pick out of the 4 presented choices with an explanation outlining "why". First the "why":

There was much talk from responsible posters about the pressure SEO was feeling from the assortment of ongoing investigations. Starcrest/Feltang etc.

On 8-12-07 SEO stepped down as COB for ERHC PR'ed to the public on 8-15-07.

On 8-24-07 (9 days following the public announcement of SEO stepping down), O.J. Chidolue, Chromes Attorney had his court orders dismissed by the court at the will of the SEC. Oilphant probably said it best that SEO picked bank bars instead of prison bars...i.e. he bargained with the US oafs.

Ok...so the stranglehold grip that SEO had on the company was forced loose in a legal manner after he held it so close for the past 6.5 years. Ouch...to be sure! Logically, SEO would want to retain his control on the company so he looks around at who he can trust and there sits one of his most trusted friends.....on the BOD of another smallish start up oil company.

Hmmm....goes SEO....if I could make a deal with them, I could retain all my upside to our fantastic assets and let a professionally run management team leverage them in the market. They are slated to begin producing their first barrels of oil Q1 08 and are projected to be producing 15,000 to 20,000 barrels by mid 2008. The market likes it when a start up begins producing its product and has an actual cash flow. If I make a deal now, said production will boost my value as we wait for rigs of opportunity to begin drilling our great assets. Besides, I totally trust my brother and he and I can work together with our huge number of political contacts and add even more to the bottom line. First, my brother will want me to clean house so I best do some serious house cleaning. I'll quickly scoot that pesky Lakeshore Capital to the side and I better settle up with Godsonic as the SEC apparently is serious as Akin has been telling me for some time now.

BB talking again: If I elect to believe that SEO was pressured to step down (and I do believe this based on the timeliness of O.J.'s action being dismissed) then I believe he would feel the safest by putting his hard earned holdings into the hands of one of his closest friends, Rilwana Lukman. This, coupled with the fact that big institutional money has been buying this company despite the fact that they appear to be at or past fair value.....leads me to believe that big money, once again, is ahead of the general market in knowing the forward game plan. That, however, is never a surprise.

According to one poster, SEO has been offered up to $2 for his shares and he rejected! :

"What has to be considered is that every offer for ERHE shares incorporates an implicit value for Offor’s oil. I know that Offor had at least 3 offers from a Middle Eastern group of investors (not Brandhuber's Millenium!). The last one was a staged proposal with an increasing share price reflecting the state of advancement of exploration and development.

Offor said no to all of them, including a proposal of USD 2 per share. According to my really conservative calculations, USD 2 means an implicit offer to pay approximately USD 1 for a barrel probable (everybody can plug in his own numbers)."
http://investorshub.advfn.com/boards/read_msg.asp?message_id=24410702

Afren currently sells at approximately $2.26 per share. More importantly, serious upside potential would come from a share swap here.


All said, I opt, as my first choice for:

2. ERHC is scooped up in a share swap deal with AFREN. Since ERHC and Addax are at odds on the Godsonic 9% it places some doubt in my mind that an Addax/ERHC deal is in play. Also, if SEO's stepping down as COB is SEC related, SEO would feel comfortable with his buddy, Lukman, taking control of his holdings and he would still feel the upside of his investment and have even stronger political connections going forward. AFREN's current price is about right IMHO for a 1:1 shareswap.