2006 has More Promise for ERHC !!!
Earlier this year after years many of speculation / doubt / fear, ERHC was Awarded their share in 5 of the most promising deep water blocks offshore W.Africa in the JDZ
our PPS hit $.90 for the 2nd time in 2 years only to slowly creep down to the 2-3 year average of .30
It has been rumored that African shareholders were selling as American buying groups were accumulating.
Bottom line even with all the selling [Millions of Shares] these shares were being placed on the books of stronger hands
This we may never know for certain but common sense would dictate this. Otherwise we'd be at $0.03 vs. $0.30
JDZ Awards Recap
BL 2 65% and operator w/ Pioneer
BL 3 25% w/Pioneer Anadarko as operator
BL 4 60% w/Addax
BL 5 15%
BL 6 15%
We have recently learned from the Addax IPO filing ERHC has cut a deal to receive $18 MM and 26% of BL 4 - with a FREE CARRY
What can we expect from BL 2,3, 5,6 ?
Will ERHC get similar deals ?
My guess is they will be as good as Barry Morgan earlier reported ERHC gets 18.5% in BL 2 w/ Free Carry [he also reported we got 13.5% in BL 4]
So Offor Doubled us up again
Recall we were only supposed to get 15% of BL 2,4
BUT
for some magical reason Exxon passed and we moved in BIG !!
On the negative side ERHC lost Devon, Noble and their auditor
But gained a new auditor and Addax appears to be the better deal even though they are not as well known in the US as Noble
- They are sure to make an impact on the Canadian Markets soon enough
- our share count has stabolized and with financing coming it may not be necessary for further dilution
- New Web Site
- New PR Team
- New Board Members
- new Loan agreement
- Debt Free
- Lawsuits Settled
This has not been an easy stock to own over the years due to all the uncertainty and relative poor pps performance. However I feel a comeback is due in short order.
Aside * this stock has never missied a single day of trading going back to summer of 2001
IMO WE ARE SITTING ON ONE THE BEST KEPT SECRETS ON WALL STREET
as long as our rights remain intact and we continue to get the support of the Nigerian Govt we all stand to do quite well over time. STP has time and time again tried to tamper with our preferential rights only to be turned down.
Politial instability in Africa will always be a concern, but signing PSCs and JOAs will help to releive much of the risk as the Operators take the reins and map out drill campaigns over the next years.
STP Prez. Menezes has said re. ERHC "this is the deal we made, and we must live by it" and re PSCs "we cannot Cancel Alone"
The Incoming OPEC Chairman has said ERHC and the JDZ PSC.s will go forward and be signed" regardless of the Political cries of STP.
The JDA official says not to pay attention to the BS in STP
Chevron starts drilling in a few weeks, they have studied the 2d and 3d maps for years and have better than a 50% chance of hitting a major commercial discovery.
This will help to increase exposure and importance of the JDZ
The importance of African Oil is more and more valuable to the US economy every day as Global Oil demand increases and supplies shrink
The trend going forward may not be so rosy for US Drillers in Africa as more locals and foreign drillers are stepping up leaving less and less for the US Majors.
However somehow I envision ERHC as a major force with proven oil, clean balance sheets and most of all happy shareholders
I wish everyone a Happy Holiday Season
Best Wishes to all of you Longs and your Families
Here's Hoping 2006 will be ERHC's Year
Long and Strong
AI
