ERHC Energy Inc (ERHE)

[ERHClongtimer]

Yes, BB, it is surprising SEO would stand for an approximate 25% dilution (if all $50 million were issued at the same terms as the initial placement).

So...

A. He is buying the new shares himself (which increase would be reported eventually in ERHC's SEC reports) or via a shadow entity; in either case he would be increasing his ownership of the company. (Don't think this is likely.)

B. Sinopec and/or Total are/is buying (with SEO's blessing). A good way to hide their intentions (at least until they hit the 5% ownership mark).

C. Only some of the shares are going to be sold at this cheap price--sufficient shares to provide enough money to make an initial investment/downpayment in an acquisition/marginal field interest, with hopes that the news will boost the share price to more favorable levels for subsequent placements.

D. Some other factor that makes more dilution acceptable to SEO.

Wish we knew the gameplan.

Regarding Peter's statements regarding the shelf registration and those contained in the supplemental prospectus, I really do not think anything necessarily changed. They mentioned how the proceeds would be used in the prospectus, just in a way that doesn't tie them down. But one could still ask: Did something change between the time Peter made his remark and when the prospectus was issued? Is this an indication that another opportunity (Shell property with Elan) has gotten away from them?

I suppose time will tell. - LT