ERHC Energy Inc (ERHE)

[chcr]

aka_rapture, Try this:
JDA: Final Agreement for Sept
From Onyebuchi Ezigbo in Abuja, 06.27.2005

The Nigeria-Sao Tome and Principe Joint Develop-ment Authority (JDA) has said that it hopes to conclude all negotiations regarding the terms of agreement for the exploitation of the five oil blocks recently awarded to some oil companies in the 2004 Licensing round by September 2005.
A statement from the JDA at the weekend requested all awardees of the five oil blocks recently approved by the governments of Nigeria and Sao Tome and Principe under the 2004 Licensing round to commence Joint Operating Agreements (JOA) among the consortium for each oil block.
The authority said it is now in a position to commence the negotiations of the Production Sharing Contracts (PSCs) with the awardees based on the Model PSC document, having received acceptance of offer from the companies in respect of the five oil blocks.
"JDA expects the awardees to also commence the negotiations of the Joint Operating Agreements (JOAs) among the consortium for each block in parallel with the PSC negotiations in order that 2004 Licensing Round can be completed within three months, and the two countries can receive the Signature Bonuses while work programmes can commence in earnest".
President Olusegun Obasanjo and his Sao Tome and Principe counterpart, Fradique de Menezes on May 31 in Abuja jointly approved the award of five oil blocks in the 2004 Joint Development Zone (JDZ) licensing round after several postponements.
The companies awarded the oil blocks include Conoil with 20 per cent equity in block 4 won by Noble/ERHC, which has 60 per cent, Hercules oil (10 per cent), Godsonic Oil and Gas (5 per cent) and Overt Oil (5 per cent). The winners are to pay a signature bonus of $90 million dollars.
Devon/Pioneer/ERHC as the operator with equity of 65 per cent won Block 2. Others who got equity in this block include Equator Exploration/ONGC Videsh (25 per cent); A. & Harmattan (10 per cent); Foby Engineering (5 five per cent); and Momo Oil & Gas (5 per cent).The signature bonus for the block is $71million.
Block 3 with a signature bonus of $40 million has Anardako oil as the operator for Block 3 with equity of 51 per cent, Devon/ERHC (20 per cent); DNO/EER (10 per cent); Equinox (10 per cent); and Ophir/Broadlink - 4 per cent. They are to pay a signature bonus of $40 million.
The ICC/OEOC Consortium is the lead operator for Block 5 with a signature bonus of $37 million; its equity is 75 per cent. ERHC has 15 per cent while Sahara has 10 per cent. Oil Block 6 was won by Filthim-Huzod Oil & Gas with 85 per cent equity, while ERHC has 15 per cent equity in this block.
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24th June 2005
DOW JONES NEWS:

JDA Abuja
Sao Tome Says Oil Field Negotiations To Wrap Up In 3 Mos
24 Jun 2005 10:17 ET DJ


LONDON (Dow Jones)--Negotiations for operating agreements and production sharing contracts on five Sao Tome oil blocks should be finished within three months, the agency overseeing talks said Friday.

The five oil blocks were awarded May 31 after protracted talks between the Nigerian and Sao Tome which jointly govern the offshore fields believed to hold billions of barrels of oil.

The talks were marred with accusations of corruption and rocked the tiny island-state of Sao Tome with a series of high profile resignations from government.

The Joint Development Authority said in a statement that all the awardees of the bidding round have accepted the offers.

The statement said the agreements would be modeled on the contracts signed for block 1 which was granted earlier to Chevron (CVX) and ExxonMobil (XOM) in February.

Winners in the second round include Devon Energy Corp. (DVN) and ERHC Energy Inc. (ERHE) on block two.

Block three went to Anadarko Petroleum (APC). Block four was awarded to a consortium of Noble Energy Inc. (NBL) and ERHC. Block five was given to Nigerian independents I.C.C-O.E.O.C.

Nigerian independent Filtim-Huzod won block 6.

-By Shai Oster, Dow Jones Newswires; [phone]; [e-mail]

(END) Dow Jones Newswires
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June 24, 2005 10:17 ET (14:17 GMT)
UPSTEAM NEWS:

Menezes stirs hornets' nest
A rift over oil policy has inflamed latent political rivalries in prospective Sao Tome&Principe, putting the president in a precarious position ahead of upcoming elections for the top job
President Fradique de Menezes may soon face re-election if the political turmoil in the twin-island archipelago of Sao Tome&Principe deepens. To lose a special adviser may be considered unlucky, but then to lose one's oil minister and prime minister in quick succession, just as you conclude a ground-breaking lease sale in West Africa's hottest oil patch, smacks of carelessness.

His autocratic style in pushing through six awards under a licensing process administered by a treaty provision with neighbouring Nigeria in the Joint Development Zone offended the local elite, several of whom stood to gain from alternative selections. Ministers cited disagreement over oil policy as reasons for resigning.

Labour unrest in the civil service testifies to a growing sense of frustrated expectation among a 140,000-strong population demanding quick gains from the promised oil bonanza. However, World Bank constraints prohibit sharp pay rises, despite the $160 million in signature bonuses heading for Sao Tome's coffers Sao Tomeans owe a whopping $320 million in foreign debt.

About $50 million is already on its way from the Chevron-led consortium, in which ExxonMobil holds a 25% stake, that landed Block-1 in the first round in February.

The drillbit will go down before the end of the year and observers predict Noble Energy, Devon Energy and Pioneer Natural Resources, in tandem with Texas-based ERHC Energy, will swiftly follow suit if the remaining five production sharing contracts are signed within 30 days as expected.

Signs are the 55-member parliament will also be forced back to the ballot box rather sooner than November 2006 alongside a presidential poll, mainly fielding yesterday's men to a jaundiced electorate desperately seeking new faces. New blood is thin on the ground and the parties are in disarray.

Nonetheless, "Sao Tome is a functioning democracy and we would encourage it to remain so", the US State Department stated this week. A proposed military facility on the islands, along with other measures to help shore up regional stability in the Gulf of Guinea, where the US expects to source 25% of its oil and gas in the coming years, is also "under review", according to US Defense Department officials.

It will not be an easy ride, despite the islands' ethnic, religious and cultural homogeneity. Sharp factional divisions, similar to the politics of the more restive East Caribbean states, persist and the country remains coup-prone as last year's abortive putsch, in which Menezes was restored to power through Nigerian mediation, clearly demonstrated.

Best equipped to salvage electoral sympathies is the Movement for Liberation&Social Democratic Alliance (MLSTP), which has a well-oiled machinery to fall back on but who will run for the top job remains an open question.

Menezes benefited from MLSTP malcontents along with factional support from the Independent Democratic Action Party (ADI), the party of his predecessor Miguel Trovoada. However, Menezes has effectively split the ADI, weakening his own power base.

It is understood former head of state Pinto da Costa will not stand but that former foreign affairs minister Posser da Costa, who was prime minister under Trovoada, will run. Meanwhile, Trovoada's son, Patrice, who resigned as Menezes' special advisor on petroleum, is likely to fight a spirited campaign against those he believed let him down in the JDZ debacle. Houston-based Patrice Trovoada is understood to have backed Anadarko's bid for Block-4 and opposed the five-block deal that Menezes eventually agreed to break the gridlock on the long-delayed round.

Yet to declare his interest in the race is Carlos Gomes, the current head of the Nigeria-Sao Tome Joint Development Authority and one-time point man for ERHC.

Providing subtext to the political discourse over the next few months will be the vexed question of how to proceed with licensing of the Exclusive Economic Zone, set to kick off in six months' time, against World Bank advice.

With JDZ awards barely done and dusted, the attraction of leasing acreage over which Sao Tome exercises exclusive control will be seized by politicians keen to pin down a fresh source of patronage.

Both ERHC and BVI-registered Equator Exploration are touting preferential acreage deals in the EEZ. Lawsuits have yet to fly, but it is understood the government of Sao Tome has already been served notice by lawyers acting for the Texan company that it will not compromise on rights it claims are secured by treaty.

And if that is not enough to chew on, there is fresh secessionist talk in the even more sparsely populated and socially depressed island of Principe, in which practically all JDZ/EEZ prospects are concentrated.

It is going to be acrimonious.
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RUETER NEWS:
Nigeria-Sao Tome see oil PSC talks over end-Sept
Fri Jun 24, 2005 11:59 AM ET

ABUJA, June 24 (Reuters) - Sao Tome and Nigeria expect negotiations of production sharing contracts (PSCs) for five offshore oil blocks to conclude within three months, the Joint Development Authority (JDA) that administers the blocks said on Friday.
The JDA awarded the five exploration licences on May 31 after a turbulent five-month delay over disagreements between the countries and accusations of corruption.

The JDA said on Friday it had received acceptance from the consortia that were awarded the licences, and was now in a position to start negotiating PSCs with them.

"The JDA expects the awardees to also commence the negotiations of the joint operating agreements among the consortium for each block in parallel with PSC negotiations, in order that 2004 licensing round can be completed within three months," the authority said in a statement.

A consortium of ERHC Energy (ERHE.OB: Quote, Profile, Research) and Devon (DEV.N: Quote, Profile, Research) won a 65 percent stake and the operatorship of block two, while the operatorship of block four, the other most highly contested block, was won by a consortium of ERHC Energy and Noble.

Anadarko (APC.N: Quote, Profile, Research) won a 51 percent share and the operatorship of block three, the consortium of International Commerce and Communications (ICC) and Oil Exploration Consortium (OEC) got 75 percent and operatorship of block five, while block six went to Filtim Huzod which secured 85 percent and operatorship of the acreage.

The blocks are in the deep waters of the Gulf of Guinea, one of the world's exploration hotspots since a series of huge oil discoveries over the last decade.

This was the second licensing round, since the first was aborted after just one exploration contract was awarded for $123 million, to a consortium led by U.S. energy giant Chevron (CVX.N: Quote, Profile, Research) .

Nigeria and Sao Tome set up the JDA in 2000 to administer the offshore area after signing a treaty ending a protracted maritime border dispute.


© Reuters 2005. All Rights Reserved.
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June 4, 2004
Houston Chronicle
Unknown hits offshore jackpot
Obscure local oil firm is chosen to work leases off Nigeria, São Tomé
By DAVID IVANOVICH
Copyright 2005 Houston Chronicle Washington Bureau

WASHINGTON - An obscure Houston oil company cleaned up in the bidding for some potentially lucrative blocks off Nigeria and São Tomé and Príncipe.


ERHC Energy has been awarded equity stakes in five different blocks in West Africa's oil-rich Gulf of Guinea, in waters believed to hold more than 11 billion barrels of crude.

"ERHC is now in league with the big boys," said Phil Nugent, an ERHC investor.

But the bidding process run by Nigeria and São Tomé and Príncipe's Joint Development Authority has been mired in controversy, helping to spark a political crisis in the tiny, turbulent nation.

ERHC, controlled by a wealthy Nigerian businessman, began talks with São Tomé and Príncipe's government about a possible oil deal long before other companies would give the twin-island nation a second glance.

Those roller-coaster negotiations were marked by corruption accusations, international arbitration and threats of arrest. But eventually the outfit with no experience in the offshore was granted preferential rights in the offshore acreage of the two countries' joint development zone.

Realizing ERHC could open the door to waters where they might make a blockbuster discovery, U.S. independents Devon Energy Corp., Pioneer Natural Resources and Houston's Noble Energy Corp. agreed to team up with the virtual unknown.

And this week, a Devon-Pioneer-ERHC consortium won a 65 percent stake and was named operator of the development zone's Block 2, while a Noble-ERHC alliance was awarded rights to explore the much-sought-after Block 4.

Devon, Pioneer and ERHC also will be minority partners in a block operated by Houston-based Anadarko Petroleum Corp., while ERHC will enjoy stakes in two other blocks.

Like ERHC, super-major Exxon Mobil Corp. had preferential rights to claim stakes in two of the offshore blocks. But the Irving-based company decided not to exercise those rights.

The bid results were controversial because the winners weren't always the parties that had initially agreed to pay the highest upfront payments, known as "signature bonuses."

Anadarko, for instance, had agreed to pay a $90 million signature bonus for the rights to explore for Block 4, while Noble-ERHC had agreed to pay only $57 million, International Oil Daily reported. The Noble-led group was then asked to submit a new bid to match Anadarko's proposal.

Likewise, the Devon-led group was asked to submit a new bid to match a higher bonus offered by an Indian oil company, Oil Daily reported.

A statement from the Joint Development Authority announcing the winners, said the winning signature bonus for Block 4 was $90 million and the winning bonus for Block 2 was $71 million.

Officials from Devon and Anadarko declined to comment. A spokesman for Noble could not be reached for immediate comment.

Stung by accusations of corruption, the Joint Development Authority issued a statement, noting: "Other details pertaining to the commercial and technical aspects, including the work program, ... were given due consideration during the exhaustive bid evaluation process."

On Thursday, São Tomé and Príncipe's prime minister, Damiao Vaz de Almeida, abruptly resigned, accusing the government of signing deals with companies "of doubtful credibility and inadequate technical ability," the Associated Press reported.

[e-mail]



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News articles relating to ERHC which give great explanation of what ERHC Energy has evolved from and some hints of what lies ahead.

Upstreamonline.com news dated 3-10-05:
http://ragingbull.lycos.com/mboard/boards.cgi?board=ERHE&read=9279


Houston Chronicle story dated 3-13-05:
http://ragingbull.lycos.com/mboard/boards.cgi?board=ERHE&read=10252

Dow Jones Newswire story dated 1-31-05:
http://ragingbull.lycos.com/mboard/boards.cgi?board=ERHC&read=96350

LA Times article dated 5-24-03:
http://ragingbull.lycos.com/mboard/boards.cgi?board=ERHC&read=11156

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For those speaking of "DEAD MONEY".....these articles are saying otherwise IMHO. This poster will be surprised if ERHC doesn't have commericail discoveries before Christmas. Maybe several. These oil co's were selected for nothing. It is my opinion they bid to fast track their blocks and they won with their bids due to aggressive work committments.


**ERHE DD: FUNDING,VALUE, RISK, TIMELINE**

5 Sections:
1: Awards
2: Funding
3: Valuation
4: Risk Factors
------ERHE specific
------Sector specific
5: Timeline

In DD'ing ERHE you come back to the same question again and again. How will ERHE finance the exploitation of the assets it has been awarded? If you don't follow the oil patch then your first hunch would be that ERHE will have to issue more equity, or issue some debt. (ERHE has no debt.) However, there are other, non-dilutive methods of raising funds and covering costs in the oil patch.

Abbreviation Key:
JDZ = Sao Tome and Nigeria Joint Development Zone - The area that holds oil and gas in the waters off Nigeria and Sao Tome. (ERHE won awards in JDZ)
EEZ or STPEEZ = Sao Tome and Principe Exclusive Economic Zone - a second area that will be auctioned in the near future. (ERHE has preferential rights in STPEEZ)
NEEZ - Nigeria Exclusive Economic Zone - a third area with a submission deadline for bids on June 25, 2005. (Rumors of ERHE participation.)

Section 1: JDZ Awards and Preferential Rights in the Sao Tome EEZ

Summary of Joint Development Zone (JDZ)Awards
http://biz.yahoo.com/bw/050601/15521.html?.v=1
HOUSTON--(BUSINESS WIRE)--June 1, 2005--The Nigeria-Sao Tome and Principe Joint Development Authority (JDA) issued a press statement on May 31, 2005 announcing the award of five blocks on offer in the 2004 JDZ Licensing Round.
ERHC Energy Inc. (ERHC) (OTCBB:ERHE - News) had previously exercised its option rights in all the five Blocks on offer in the 2004 JDZ Licensing Round, and in December 2004 submitted bids as a consortium member for Blocks 2, 3 and 4.

In Block 2, the ERHC/Devon/Pioneer consortium has been awarded 65% interest, which is inclusive of ERHC's 30% signature bonus free interest. The consortium has been designated operator for Block 2.

In Block 3, the ERHC/Devon/Pioneer consortium has been awarded 25% interest, which is inclusive of ERHC's 20% signature bonus free interest.

In Block 4, the ERHC/Noble consortium has been awarded 60% interest, which is inclusive of ERHC's 25% signature bonus free interest. The consortium has been designated operator for Block 4.

In making the awards for Blocks 5 and 6, the JDA confirmed ERHC's 15% interest in each of these Blocks. ERHC's interest in Block 6 is free of signature bonus.

"The announcement of the awards is a significant milestone for ERHC. We look forward to working with the JDA and other participants towards developing the petroleum resources in the JDZ for the mutual benefit of the peoples of Nigeria and Sao Tome & Principe as well as our respective companies," commented Ali Memon, President & CEO of ERHC.
------------
Many potential investors are not aware that ERHE also has secured preferential rights to a second area, the Sao Tome EEZ. (STPEEZ) This is above and beyond the JDZ (awards in the article above).

For verification see the latest 10Q, See Note 2: Sao Tome Concession page 9.
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=3666737&Type=HTML
Under the 2001 Agreement ERHC retained the following rights to participate in exploration and production activities in the EEZ subject to certain restrictions: (a) right to receive up to two blocks of ERHC's choice without the payment of signature bonus, and (b) the option to acquire up to a 15% paid working interest in up to two blocks of ERHC's choice in the EEZ.


Summary of rights in Sao Tome Exclusive Economic Zone (EEZ): (Yes in addition to the JDZ awards already made on June 1).
100% block--signature bonus free
100% block--signature bonus free
15% block---must pay its percentage of the signature bonus
15% block---must pay its percentage of the signature bonus

Any valuation of ERHE should include both the JDZ awards already made PLUS the Sao Tome EEZ rights.
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Section 2: How does ERHE Fund exploration and development in the JDZ and the EEZ.

Here is a list of posts that discuss how ERHE will fund it’s share of the exploration and development of its prospects in the JDZ and the STP EEZ.
http://www.investorshub.com/boards/read_msg.asp?message_id=6647315
http://ragingbull.lycos.com/mboard/boards.cgi?board=ERHE&read=55553
http://ragingbull.lycos.com/mboard/boards.cgi?board=ERHE&read=55570
http://ragingbull.lycos.com/mboard/boards.cgi?board=ERHE&read=55594
http://www.investorshub.com/boards/read_msg.asp?message_id=6669557
http://www.nigeriasaotomejda.com/PDFs/Updated%20Guidelines%202004.pdf


To Summarize:
Tens of millions of dollars in fees, signature bonuses, must be paid within 30 days of the acceptance of awards. Many more tens of millions of dollars will be spent in the first few years on exploration and development of prospects. ERHE will cover its share of these costs by trading a portion of its rights to its partners. This is a common practice, called “farming-out”, and means that it is not necessary for ERHE to issue vast amounts of debt and equity to raise funds. The Administrators of the JDZ, the JDA, only grant awards to a company or a group of companies that provide evidence of sufficient technical and financial resources. ERHE had years to prepare for award day and so formed partnerships with Devon, Pioneer, and Noble. The advantage of the partnership for these companies was that ERHE already owned preferential rights in the JDZ while ERHE required the technical and financial resources of the partners to successfully exercise those rights. ERHE preferential rights, basically an option to explore, in the STPEEZ also have value and can be used to negotiate favorable terms with its existing partners in the JDZ blocks.

Section 3: Valuation of ERHE’s Share of JDZ Oil Reserves

A reasonable estimate of the oil in blocks 1-9 of the JDZ is around 14 billion barrels, (14Bbbl). ERHE shares for blocks 2-6 is spelled out in the awards notice. Here are links to posts that describe a method of valuing oil companies based on the amount of reserves they own.
http://ragingbull.lycos.com/mboard/boards.cgi?board=ERHC&board=ERHC&read=65552
http://ragingbull.lycos.com/mboard/boards.cgi?board=ERHE&read=56175

If we update the model for the new share count the Totals the results look like this: (From the bottom row of the Table below.)

Total ERHE Unproven Reserves: 2.2 Billion bbl.
Conservative Share Price estimate: $3.13.
Less Conservative Share Price estimate: $6.25.
Least Conservative Share Price estimate: $9.38.
Share Price using Proven Reserve Multiplier: $23.45.
Share Price including STPEEZ Rights: $46.90.
Share price including STPEEZ and Gas rights: $70.45.

Table with a breakdown by block. A description follows.
Oil… erhe… unp… unp… unp… prv
Blk… Res… 1.00… 2.00… 3.00… 7.50
2… 0.95… 1.34… 2.68… 4.01… 10.04
3… 0.20… 0.27… 0.55… 0.82… 2.06
4… 0.70… 0.98… 1.97… 2.95… 7.37
5… 0.15… 0.21… 0.41… 0.62… 1.55
6… 0.23… 0.32… 0.65… 0.97… 2.43
T… 2.22… 3.13… 6.25… 9.38… 23.45


Column 1 is the block, column 2 is an estimate of ERHE's portion of the estimated reserves (in billions) for each block, columns 3, 4 and 5 are per share values of each block based on the number in the row labeled BLK and using 710M shares. Column 6 uses a value of $7.50 per barrel assuming the estimates turn out to be proven at some point in the future. The bottom row labeled T is the Total for all blocks. So reading across row T the estimate is 2.22B bbl's of unproven reserves for ERHE. The corresponding share price at $1/bbl P=$3.13, at $2 P=$6.25, at $3 P = $9.38 and at $7.50 P = 23.45.


Looking at Block 4 alone a share price of $0.98 can be justified based on unproven reserves valued at $1/bbl.

Continuing to use the most conservative estimate of $1 for unproven reserves we start with a benchmark shareprice of $3.13. Add to that unproven reserves in the STPEEZ and the price probably doubles to the $6 range. Multiply share price by 1.5 and you move up to the $9 range.

If you assume the unproven reserves turn out to be proven reserves then using the same math and starting with a price of $23.45 you end up with a long run price of $46.90 with STPEEZ, and a price of $70 after adding in the value of gas.

Of course it will take years to turn all those billions of bbls of unproven reserves into proven reserves. However, if it is true (link anybody?) that Noble has committed to 3 wells this year on block 4 then it is possible to move the block 4 share price of $0.98 toward the block 4 proven price of $7.37. In other words, add the difference 7.37-.98 = $6.39 to the prevailing share price at the time discoveries are made.

Section 4: Major Risk Factors as identified by various individuals:

------Section 4A: ERHE Specific Risk.

Political Risk-could lead to delays but doubtful it would lead to any change in awards.
Asset Transfer from ERHC to Chrome or Cayman subsidiary-I think this violates SEC corporate governance regulations even if the BOD or a controlling shareholder Offor/Chrome.

Risk of Convertible Debt/Dilutive Financing - Doubtful for reasons cited in Section 1 above. In addition, the SEC would scrutinize such a deal even if authorized by BOD, or Offor/Chrome. ERHE could claim that it needs to raise several millions of dollars to secure rights and Offor/Chrome would provide the financing that would result in more cheap shares for Offor/Chrome. However, as has been discussed, there are other nondilutive means of funding. Minority shareholders, us, would demand that the SEC look into the deal. This would cause lengthy delays for Offor/Chrome so I doubt this is a probable scenario.

Other Risk associated with major shareholder Emeka Offor - As I understand it Offor’s help was solicited by ERHE major shareholder, Phil Nugent, when ERHE’s claim to a large fraction of Sao Tome oil revenue was challenged and collapsing. Offor is shrewd and clearly benefited from past financing deals with ERHE. ERHE , Memon, Offor, have put together partnerships with Devon, Noble and Pioneer. The incentive to proceed as quickly as possible to first oil is now in everyone’s best interest, including Offor. Any underhanded dealing that violates, or appears to violate SEC reg’s would only lead to more delays. Only time will tell on this one.

------Section 4B: Sector Specific Risk associated with the exploration and development (ED) sector.

The contents of the link below reads like a boilerplate safe haven statement for the most part. If you are not familiar with the risks in this sector then it is a must read. As you read it keep in mind that some of the risks mentioned, eg drilling, ED risks, are actually lower for ERHE relative to the average ED play. This is because the success rate per well in this part of world is significantly above average. The specific area on which ERHE owns rights is considered to be in the last giant (elephant) field on the planet. ERHE has also teamed with quality partners who will not be constrained by cash, manpower or technical capabilities.
http://ragingbull.lycos.com/mboard/boards.cgi?board=ERHE&read=56937
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Section 5: Timeline

June 1, 2005: JDZ Awards.
End of July/First of August 2005: JDZ: PSC’s signed.
July to September 2005: Operating Agreements signed.
Fall 2005: STPEEZ: ERHE exercises preferential rights and chooses blocks.
Late 2005 to first part of 2006: JDZ: drilling commences, perhaps with Noble/ERHE consortiumdrilling 3 back to back wells in bock 4.
Late 2005 to first part of 2006: STPEEZ licensing round.

Most recent press on timing to signed PSC’s and first drilling:
http://www.upstreamonline.com/eceRedirect?articleId=70671
http://ragingbull.lycos.com/mboard/boards.cgi?board=ERHE&read=57748

6/23/05…About $50 million is already on its way from the Chevron-led consortium, in which ExxonMobil holds a 25% stake, that landed Block-1 in the first round in February.

The drillbit will go down before the end of the year and observers predict Noble Energy, Devon Energy and Pioneer Natural Resources, in tandem with Texas-based ERHC Energy, will swiftly follow suit if the remaining five production sharing contracts are signed within 30 days as expected.

…Providing subtext to the political discourse over the next few months will be the vexed question of how to proceed with licensing of the Exclusive Economic Zone, set to kick off in six months' time, against World Bank advice.

*****DOW JONES NEWS******ERHC*****
Sao Tome Says Oil Field Negotiations To Wrap Up In 3 Mos
24 Jun 2005 10:17 ET DJ
LONDON (Dow Jones)--Negotiations for operating agreements and production sharing contracts on five Sao Tome oil blocks should be finished within three months, the agency overseeing talks said Friday.

http://www.upstreamonline.com
http://ragingbull.lycos.com/mboard/boards.cgi?board=ERHE&read=16031
"The JDA already has a fast-track commitment from Noble Energy to sink three wells back-to-back and that is the kind of action Nigeria wants."
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Website with ERHE Discussion and DD links:
http://www.investorshub.com/boards/board.asp?board_id=1909

Company link for ERHC Energy Inc.:
http://www.erhc.com/

Joint Development Zone (JDZ) link:
http://www.nigeriasaotomejda.com/

Map of the Joint Development Zone (JDZ):
http://www.nigeriasaotomejda.com/PDFs/multi%20client%20data%20flyer.pdf

General information about ERHC Energy put together by Dadd17:
http://www.erhc.greatsprings.net/

Other stock boards relative to ERHC Energy:
http://ragingbull.lycos.com/mboard/boards.cgi?board=BB%3AERHE&origsymbols=BB%3Aerhe

http://www.atomicbobs.com/index.php?board=11

http://quotes.freerealtime.com/rt/frt/M?SA=quotes/MessageBoard&IM=quotes&symbol=ERHC&typ.... (password required by is free access)

http://finance.groups.yahoo.com/group/theelephantfields/
(must apply for membership to this group--free)

Link to seismic reports for JDZ with full explanation of volume of expected recoverable reserves:
http://www.erhc.com/pdfs/ERHC%20Comments%20on%20Bid%20Round%20and%20Announces%20Results%20of%20Seism....


It is of the utmost importance for shareholders to understand that ERHC Energy has preferential rights in Sao Tomes EEZ as well as the JDZ (currently being auctioned). In Sao Tomes EEZ ERHC Energy has the following preferential rights:

100% block--signature bonus free
100% block--signature bonus free
15% block---must pay its percentage of the signature bonus
15% block---must pay its percentage of the signature bonus

It is also just as important to note that every block currently on tender in round II of the JDZ has a slice (preferential right) waiting for ERHC.

ERHC's rights in this round (round II of JDZ):
http://www.erhc.com/pdfs/Press%20Release%20ERHC%20Selects%20Options%20April%2021,%202004.htm

UPDATE on the 2004 LICENSING ROUND

the Nigeria-Sao Tome JDA is please to announce that as of June 23rd 2005, ALL AWARDEEZ in respect of the 5 blocks offered in the 2004 Round have CONFIRMED their ACCEPTANCE of the OFFERS

Furthermore, the JDA is now in a position to commence the negotiations of the Production Sharing Contracts [PSCs] with awardees based on the Model PSC document negotiated for Block 1

The JDA expects the Awardees to also commence the negotiations of the Joint Operating Agreements [JOA's] among the consortium for each block in parallel with the PSC negotiations in order that the 2004 Licensing Round can be completed within 3 months, and the two countries can receive the signature Bonuses while work programmes can commence in earnest.