ERHC Energy Inc (ERHE)

[YankeMike]

It's 1 well per Block plus additional seismic. This is for Block 4...

On March 14, 2006, a subsidiary of the Company, Addax, and several other oil and gas companies (collectively, the "Contractor") entered into an exclusive production sharing contract with the Nigeria-Sao Tome and Principe Joint Development Authority ("JDA") to conduct petroleum operations in Block 4 of the JDZ, where Addax serves as operator. The term of the production sharing contract with the JDA is twenty eight years consisting of a three-phase exploration period and a development and production period. The contract requires minimum work commitments to be performed during the eight year exploration period. During the first four years, or Phase I, the Contractor is required to drill at least two wells, with an option for a third well depending on the results of the first two wells, to a minimum total depth of 3,500 meters subsea, process existing 3D and 2D seismic date, conduct AVO attribute analysis, acquire additional geochemical, structural restorations and/or sequence stratigraphic analysis and perform geological and geophysical studies. During the next two years, or Phase II, the Contractor is required to drill another well and acquire additional seismic data. During the last two years, or Phase III, the Contractor is required to drill another well. The Contractor is required to spend at least $53 million in Phase I, $16 million in Phase II, and $16 million in Phase III. If these minimum financial commitments are not met, the Contractor is required to pay the JDA the difference between the commitment for the then current Phase and the amount actually expended in petroleum operations for such Phase as liquidated damages. The Contractor may, however, terminate this contract at the end of any Phase provided it has fulfilled its obligations relative to that Phase. The Contractor is required to post a performance bond in an amount equal to its minimum financial commitment for each Phase, to insure its property and to obtain liability insurance. The Contractor has a right to produce all commercially viable hydrocarbons discovered and may be granted a series of twenty year extension periods until the hydrocarbons are economically depleted.
http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001144204%2D06%2D010261%2Etxt&FilePath=%5C2006%5C03%5C16%5C&CoName=ERHC+ENERGY+INC&FormType=8%2DK&RcvdDate=3%2F16%2F2006&pdf=