ERHC Energy Inc (ERHE)

[jbofthecloth]

It doesn't matter whose rights are oldest, ours are part of the arbitral award received in 2002. The bits of that award regarding the JDZ were renegotiated to our current rights when Menezes came in. The rights in regard to the EEZ were not touched.

Specifically, ERHC gets 1) 100% of 2 blocks of its choice, without signature bonus, AFTER STP reserves 3 blocks (so we get 100% of the 4th and 5th best EEZ blocks for free), 2) option to acquire up to 15% of 2 blocks of its choice with signature bonus payable (these can and probably will be in 2 of the 3 blocks reserved by STP - assumung that STP reserves the 3 best blocks).

According to EEL's prospectus, it has the option to acquire 100% of 2 blocks of their choice. Their options are not constrained or restricted by any of the 3 blocks STP may reserve. EEL would probably pick the 2 best blocks of the 3 blocks reserved by STP - again assuming STP picked the 3 best blocks.

Therefore, EEL has rights to 100% of the 2 best blocks and ERHC has the right to 15% of potentially the same blocks - assuming everyone knows which blocks are the best.

That, my friends, is a conflict.