Replies to post #342896 on ERHC Energy Inc (ERHE)

[kingpindg]

Krom, although published in 2017, that report details what occurred with respect to the STP oil industry in 2015, including the payment described. However, in ERHC's annual report for 2016 they said this...

ERHC will decide whether to take up the option to acquire up to a 15% paid working interest in each of two additional blocks of the EEZ when called upon to exercise the option by the Government of STP in accordance with the agreements which provide for the rights and option.

https://www.sec.gov/Archives/edgar/data/799235/000114036117002243/form10k.htm

So as of September 2016, at least, ERHC had not exercised either option. I am of the opinion that they still have not.


Additionally, in their 2015 annual report, ERHC said the following regarding the consideration to be received from Kosmos for Block 11...

ERHC will be entitled to receive from Kosmos as follow:
· A limited refund of verifiable past costs of which $1.5 million has been received to date.
· Cash consideration of $2.5 million.
· Further value consideration dependent on whether exploration (i) proceeds through seismic to drilling of wells and (ii) results in a commercial discovery and production.

https://www.sec.gov/Archives/edgar/data/799235/000114036116064293/form10ka.htm

So, if the upside retained was 15% of the block, why not just say that?


With respect to the future value consideration on Block 11, we know that Kosmos shot seismic on that block and that they did not relinquish the block afterward which would imply that a decision was made to proceed "through seismic to drilling", meaning a payment could have already been due from Kosmos. I have speculated before that it is possible that ERHC was able to pay for some of their litigation expenses against Kosmos with proceeds received from Kosmos from the Block 11 agreement.




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