ERHC Energy Inc (ERHE)

[Krombacher]

The idea of leapfrogging phases sounds great to me, except that investors would have to stomach a lot.

For example...

SNP does Phase 1, doesn't like the results (which it gives to the JDA), and gives up its rights.

Company ABC leapfrogs Phase 1, and comes in and does Phase 2. Since we have a new company ABC, ERHC owes SNP nothing for Phase 1.

Company ABC doesn't like Phase 2 results and gives up its rights. Company XYZ comes in and does Phase 3. Since we have a new company XYZ, ERHC owes ABC nothing for Phase 2.

Company XYZ gives up, hands back the rights, at which point Total, with its superior experience and infrastructure at AKPO, steps in. It brings the JDZ to production.

ERHC makes A LOT OF MONEY because ERHC's first oil working interest goes towards paying production costs, but none of the phase 1 to 3 exploration costs. Before you know it, oil production is bringing in much money for ERHC's bottom line.

Why? Because ERHC was extremely patient through all of this. But will the investors be?

Krombacher