ERHC Energy Inc (ERHE)

[jbofthecloth]

The current landscape in the natural resources space is this: there are literally hundreds of small companies with very good assets that used to be able to get financing either privately or through a listing on an exchange. This financing has dried up. This leaves these cash-starveed companies no other alternative but to court cash rich (a relative term, of course) companies to merge with at valuations that are ridiculously low. I personally am working on three projects of exactly this nature (one gold, one diamond and one oil).

Herein lies the opportunity for companies to cherry pick projects in their areas of interest with stock. With the acquisition of a company with such a project you acquire management along with it - so you kill two birds with one stone. ERHC has the cash to sink into a project that has been orphaned by the market (it doesn't often take much to go from prospect to resource in much simpler areas than deepwater Nigeria). With a new prospect and additional seasoned management, they would be in position to raise aditional capital, again not much, without using their current cash reserves.

I'm not saying they will or even should, but the opportunities that are presenting themselves at the moment are very compelling.