I said put iself in play. That means a credible investment bank advises you on valuation, presents you to potential buyers, etc. this exposure is invaluable. No sale price is stipulated publicly and no commitment to sell is made. If a price is high enough then the sale can be made. It will also flush out Sinopec, which is a huge reason for doing it.
Gandur made a cold, calculated assessment of the price versus the risks and made a brave decision to sell a company he started. He may be proved right or wrong by the drill bit. He'll accept whatever comes. But he cannot be faulted for taking a profit.
ERHC management has said for ages that it intends to be an ongoing oil company. The reality is that they are not and cannot unless they add huge staff for that effort. You can't be a fringe player and buy minority interests and expect to make meaningful money. You have to take risks. Addax did it in 15 years (3 of them public) - adding properties they ran, going into areas like Kurdistan, employing over 800 people, etc. In the last 3 years, ERHC has done little to expand its portfolio. That line is long gone.
ERHC has no access to the capital markets to borrow funds, no cash flow to lever off of and no willingness to issue more equity to raise the capital required to play at a scale large enough to make a difference. We are a one tick pony...and that's fine. But not every pony wins every race. Sometimes its best to be claimed away.
Every responsible company has to constantly review its options. Given the situation, a strategic move to engage a bank to conduct such a beauty contast is a proactive move that would be excellent to see. If any company wants to buy us we'll have to engage advisors anyway, why not get that going now?
This is nothing against management or the stock or the prospects. It is merely to present an option beyond hoping that drilling produces the results we all have waited for. Hope is not a strategy.
