ERHC Energy Inc (ERHE)

[RUBY1100]

The Toronto Globe and Mail Newspaper ...

http://www.theglobeandmail.com/globe-investor/addax-shares-jump-on-news-of-talks/article1173454/

The Canadian Press, Monday, Jun. 08, 2009 04:20PM EDT

Addax Petroleum Corp.'s (AXC-T39.753.7510.42%) shares rose more than 10 per cent Monday after acknowledging rumours of talks with a potential buyer.

Shares of Addax Petroleum were up $3.69, or 10.25 per cent, at $39.69 during noon trading on the TSX.

Earlier, the Calgary-based company, with a focus in West Africa and the Middle East, said it “held preliminary discussions with third parties expressing an interest in a potential transaction with the corporation.”

It added: “While such preliminary discussions are ongoing, no assurance can be given that a transaction will be completed.”

Addax responded after South China Morning Post, an English language newspaper, reported China Petroleum and Chemical Corp. is working on a bid to acquire the company for $8 billion.

The newspaper also reported that China National Petroleum Corp. and China National Offshore Oil Corp. are also interested in the deal.
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If Addax Petroleum is really to be acquired by CNOOC or CNPC, then it shows how shortsighted Canadian and particularly British investors are when it comes to Oil & Gas companies. Addax has a formidable collection of assets in very low cost jurisdictions. It follows a series of similar deals in which Canadian O&G companies with significant foreign assets are sold to the Chinese, or the assets are transfered to separate entities listed solely on the Hong Kong Stock Exchange. The trouble is, without the likes of PetroKazakhstan, Addax, First Calgary, and a soon Heritage and others, Canadian O & G companies will have no significant foreign assets in Oil & Gas. All they will get is black sand that they have to invest 10 times as much money into for each dollar of profit. Stupid right?