Replies to post #296022 on ERHC Energy Inc (ERHE)

[wbyrne]

For context, see post 296012.

[midtieroil]

That $20 million is an outlandish number that has no basis in fact in this market. When oil was $100 back in June a 15% interest in a Kenya block with 1.6 billion bbls of unrisked sold for about $4.5 million in cash plus about .5 million in stock. My original estimate of the stock price was a little low. Now they want you to believe that with oil at under half that price the value of ERHC's interest is $20 million. Can you explain the logic in that to me?

And to sell all of Kenya would be suicide. The JDZ is moribund. The EEZ is at least 5 years from drilling. And ERHC has found no one to contribute a penny toward Chad after 3 years of trying.

I hope management understands that a critical financial problem exists here because it looks like the market already gets it.

Below is the relevant part of the Tower/Taipan farmout agreement.

NAIROBI, KENYA–(Marketwired – June 3, 2014) - Taipan Resources Inc. (“Taipan” or the “Company”) (TSX VENTURE:TPN), through its wholly-owned Kenya-based subsidiary Lion Petroleum Corp. (“Lion”), has completed the previously announced farm-out agreement with Tower Resources (Kenya) Limited (“Tower”), a subsidiary of AIM-listed Tower Resources Inc. (TRP.L, TRP LN), whereby Tower has acquired a 15% participating interest in Block 2B onshore Kenya.

Completion, which occurred on Monday 2 June 2014, was conditional upon consent from Premier Oil (PMO.L, PMO LN), which holds 55% of the licence, as well as the receipt of US$4.5 million cash and the admission on the AIM market of the first tranche of 4.5 million Ordinary Shares in Tower.

In total consideration for the farm-out, Lion Petroleum Corp. received US$4.5 million cash and a total of 9.0 million Ordinary Shares in Tower, the second tranche of which, consisting of 4.5 million shares, will be received in three months’ time. There is also a contingent payment of US$1 million cash on the spudding of a second well in Block 2B.

Taipan retains a 30% interest and operatorship during the exploration phase in Block 2B.

In February 2014, the Company announced an NI 51-101 compliant independent assessment of Block 2B, completed by Sproule International Limited, which estimated that Block 2B, located in the Anza Basin, holds gross mean unrisked prospective resources of 1,593mmboe, based on 19 exploration leads.