Replies to post #115433 on ERHC Energy Inc (ERHE)

[majicathome]

you were answering my question as I was typing, thanks

[oil-cowboy]

Thanks Balance. Honestly, I would take any scenario if it involved moving ahead. Picks 2, and most definatly 4 would be worth waiting for.

I'm here till oil come hell or high water.

Again, thanks for your input.

[balance_builder]

Take your pick - Revision/Update.

Yesterday I posted three speculated scenario's that might be worthy of attention. Today, I find the need to add a 4'th potential possibility to the mix with the dots leading to it. Please find #4 below in bold with an explanation (i.e. dots) below.


Take your pick:

1. ERHC is scooped up in a share swap deal with Addax. This is the logical M & A choice based on existing relationship. Simple and clean.


2. ERHC is scooped up in a share swap deal with AFREN. Since ERHC and Addax are at odds on the Godsonic 9% it places some doubt in my mind that an Addax/ERHC deal is in play. Also, if SEO's stepping down as COB is SEC related, SEO would feel comfortable with his buddy, Lukman, taking control of his holdings and he would still feel the upside of his investment and have even stronger political connections going forward. AFREN's current price is about right IMHO for a 1:1 shareswap.


3. ERHC and 4 other companies throw their assets (or equal assets in the case of larger oil co's) into a basket and spin off into a newly formed public entity. Said newly formed co could have a strong middle east connection. It might even have Petrobra's as one of the partners.....which could be reason for STP mentioning they may sell their oil blocks through direct negotiations instead of public auction. Said team will be THE TEAM for development of the STP EEZ and JDZ (Rickan said it more eloquently). Extremely cabable with unlimited resources for development.....and STP'ers would have the stamp of trust with their brothers, Petrobra's, in the mix. Also, by selling STP EEZ blocks via direct negotiation with Petrobra's in the mix they don't have to worry about BS bids looking for flips and a bunch of non true oil co's in the mix. Hasn't it been interesting how quiet STP has been regarding their blocks since the 3D work was completed? Obviously SEO has developed a relationship with Petrobra's thru Chrome......does it go deeper than a JV for the development of ethanol? There have been several hints that a complicated deal of some fashion is going to take place. This plan seems to best fit that bill.



Those believing they will have to wait for drilling will be proved wrong IMHO based on actual events already taken place and reported via ERHC itself. January to spring timeframe IMHO.

4. The Chinese take a stake in ERHC.


Dots: Leading up to the raid of the ERHC office by the feds in early May of 2006, rumors were running wild about the Chinese taking a stake in ERHC. These rumors were very believable at the time and were silenced following the FBI raid of the ERHC office. Maybe, just maybe, this was the next leg however the forces at be (read: U.S. Oil Co's and the U.S. Government) didn't want the Chinese to enter/take stake this U.S. listed company. So, in an attempt to put the brakes on, they hastily raided the office going overboard (meaning: Going in with 14 armed FBI agents and taking out everything contained in the office in 118 boxes).

Here is a tad bit of the rumormill that was out and about, prior to the raid, referencing the Chinese taking a stake in ERHC:

First from Doc off Joe Shea's ERHC blogger on 4-26-06:

"Dear Mr. Shea,

CVX drilling at the edge of block 1 only revealed the "tip of the oil iceberg". Those in-the-know in Nigeria are now 99% sure that the Gulf of Guinea is a mammoth O&G discovery that will bring decades of unprecedented revenues to the region. This gigantic structure will mostlikely keep oil companies busy in all blocks for a very long time! Just two hours ago (about 7 AM your time this 25 April) I also learned something which I thought I would pass on. This comes from a *very* trusted source of mine who is intimately familiar with ERHC Energy and the Offor clan and says: "A major Chinese oil company is taking a stake in ERHE and in its very large rights in the JDZ. I believe Chief Offor now is or will soon be the richest man in Africa."

My contact already took a huge risk as the clan has imposed total secrecy, I cannot ask more at this time. As you know I have excellent connections in China, but they are not in the oil industry. It is always wise to obtain confirmation from another source so perhaps you or your blog readers could use their China contacts?

In the Spirit of Respect and Friendship,

Doc"



...........which was followed by another letter from Doc:



"I have been on the road again and I just now had a chance to look at your Website on this Sunday nite. For some reason the Post Scriptum of the last email I sent you on April 28 vanished. I am not sure what happened, but here it is again.

PS: Assuming the Chinese take a significant stake in ERHE, at what price level would that be, and how would this happen? These are legitimate questions at this point in time.

As to the former, I would say that the $8-9 per share I had conservatively advanced in a previous email that analysed share price would still stand - please be so kind as to re-post this for your readers. I am between airports and I do not have a copy of it right now, I believe it was sometimes in early March.

One should adjust these figures up (presumably) or down as per one's own interpretation of what has transpired since, of course. As to the latter, it is much a more difficult question, and as a businessman myself I am sorry to have to say that the Brandhuber era has brought no sign whatsoever of changes in the company's secretive ways. I can only conclude that the Offor clan is still completely in control of all PRs and such.

As a result shareholders would be wise to keep a close eye on their portfolio. Looking at past history, what a trusted advisor says is most likely to happen is that those who did favors to Chief Offor will know ahead of time when the Chinese deal will *officially* be in place and released. The price will most likely experience a sudden and enormous increase and I would expect them to then immediately sell very large amounts of shares to realize the profits they have long been promised. Whether the new share price would withhold such an assault is anyone's guess and could also largely depend on a true, detailed business plan being announced or not. Again, I do *not* know when this might happen; it could be Monday morning, or in weeks or months.

I would like to add one new thought if I may. Some, both in Nigeria and America, seem to want to make the current situation far more potentially conflictual than it really is. It is not all just about big money, it is also about finite amounts of resources.

I would urge people to remember three things. First, both Mr. President and Dr. Daukoru have stated many times that they want to reshuffle the cards so that Nigeria
can proudly develop its own O&G industry. *They* are holding the key cards and I am quite certain that they will have their way - China understands this and has brilliantly played along, America doesn't.

Second, regardless of post obo-1 negotiations the GOG's mammoth field(s) will translate into mammoth revenues for *all* parties involved. But this planet is running very short on oil and finds of this magnitude do change a lot of things (look at how life has changed in Qatar or Saudi Arabia over the last 50 years) and little could be gained by Chevron and Exxon keeping with their usual arrogance and disastrous one-sided ways of doing business.

And third, as a Nigerian-owned American company that may very soon also be partly Chinese-owned, ERHC Energy *may* consequently become the poster child for international cooperation betwen Africa and superpowers in the energy sector. The company has the making of such a new model, we shall know fairly shortly if it is just one man's vehicle for extreme enrichment or if higher powers decide that it should live up to this historic opportunity.

On another note, I would like to kindly remind your readers that it was *after* Mr. Shea smartly asked if it would be alright with me to simplify my complicated initials into "Doc" that I agreed and signed my emails accordingly. It would be very unwise of me to sign my name, and I would dare say that with the exception of perhaps a few of your African readers no one could pronounce it correctly anyway.

In the Spirit of Respect and Friendship,

Doc"


..................on 5-2-06 this was posted in part by Art on 5-2-06 (only days before the FBI raid):


"Doc has come out with the words huge or large to describe a China buy in and a definite price range. He also stated that negotiations have been going on for over one month and an announcement could come this week.

There is another rumor going around for a Chinese buy in of 40% of ERHC shares and a $5-6 per share price range.

Do you have comments/thoughts on the Chinses buy in possibilities?"



Ok.......so the rumors were out there. Was there any validity to them? Check out this line in the article Magicathome posted:

"Mr. Stanton, the RBC analyst, said Addax "is not an acquisition target today, but it will become one because it's a growth story." He and the Addax executives think Asian buyers, perhaps the Chinese, are the logical suitors. Why the Chinese? Because they have a voracious appetite for oil, are highly tolerant of political risk and know how to win the hearts and minds of the leaders of poor countries. They do so by funding big local infrastructure investments."
http://investorshub.advfn.com/boards/read_msg.asp?message_id=25937623

Following along (ok,,,,I know this is long) we now have a banker suggesting Addax will be sold to the Chinese. Why not? The Chinese are already significantly partnered with Addax in the JDZ. With ERHC having Addax as its major partner, along with Sinopec, why wouldn't the Chinese take a stake in ERHC? I think they would! This would give them a stronger foothold in their bid for Addax when the reserves are proven.

So....we know the investigation was approved and orchastrated by the U.S. Government very shortly after the rumors that the Chinese were about to take a stake in the lil' ole U.S. listed ERHC Energy company. Possibly to put a buy-in by the Chinese on hold? A temporary fix until they could sort this thing out (keeping in mind that CVX found a ton of oil in the JDZ which they took that knowlege to the US government for help in obtaining said oil).

Nothing found that could strip ERHC of its interests. Bring in Homeland Security. Anybody else find this odd? Homeland Security????? Come on now....ERHC is a penny stock with 5 employees yet Homeland Security gets involved???? Interestingly, here is another instance where Homeland security became involved in the oil business:


"China's Unocal Bid May Face Nat'l Security Hurdles
NewsMax.com Wires
Friday, June 24, 2005
BEIJING -- China's third-largest oil producer made a hostile $18.5 billion bid Thursday for U.S. oil company Unocal Corp., marking the communist nation's most ambitious attempt yet to acquire a Western corporation and setting up a possible showdown with American politicians over national security issues.

The purchase by state-owned CNOOC Ltd., if completed, would be the biggest yet in a multibillion-dollar wave of foreign acquisitions by Chinese companies trying to secure a place as global competitors.
Story Continues Below

It comes amid a flurry of foreign oil and gas deals by China as its government, facing stagnant production at home, tries to secure energy abroad for its booming economy, already the world's third-biggest oil importer behind Japan and the United States.

The offer sets the stage for a possible takeover battle with Chevron Corp., reflecting China's new willingness to adopt Wall Street's more aggressive tactics. Chevron had offered to buy Unocal for a lower price of $16.6 billion - a proposal that Unocal's board already had accepted. Until recently, hostile takeovers by Chinese companies abroad were almost unheard of.

El Segundo, Calif.-based Unocal, the ninth biggest U.S. oil company, said it would evaluate the CNOOC offer, but that its board's recommendation to shareholders to accept the Chevron offer remained in place.

Such a deal, if it goes forward, will almost certainly meet obstacles in Washington. Even before CNOOC made its offer, two members of Congress appealed to President Bush last week to review it for possible security threats. They warned of China's "pursuit of world energy resources."

In Washington, Sen. Ron Wyden, D-Ore., told a Senate Finance Committee hearing on China's currency system that a review by a federal panel for national security considerations would be imperative.

Treasury Secretary John Snow, who heads The Committee on Foreign Investment in the United States, responded: "It's hypothetical at this point because we don't have a transaction." But he added: "I would fully contemplate that the parties ... would want to avail themselves of that process. That is normally what happens on a voluntary basis."

CNOOC chairman and CEO Fu Chengyu insisted Thursday that national security wasn't an issue, calling it a friendly bid and saying it would be superior for Unocal shareholders.

"This transaction is purely a commercial transaction," he said in a conference call with reporters. "We are confident that the U.S. government will support this project."

The federal panel that considers security risks of foreign firms buying or investing in U.S. companies in March cleared Chinese computer maker Lenovo's $1.75 billion purchase of IBM's personal computer division, which created the world's third-largest PC maker. Several U.S. lawmakers asked for the review,

The panel meets in secret and includes representatives from the departments of Treasury, Defense, Justice, Commerce, State and Homeland Security. The committee makes recommendations directly to the president, who can block sales for national security reasons.

George H. W. Bush is the only president ever to block such a deal, stopping the sale of a Seattle aircraft parts manufacturer to China in February 1990.

Elsewhere, China has forged oil and gas deals in countries ranging from Sudan to Kazakhstan to Venezuela. Beijing is competing with Tokyo for access to Russian oil from a planned Siberian pipeline.

China used to meet its own needs from domestic oil fields but became a net importer in the 1990s and now is one of the world's biggest consumers, along with the United States and Japan.

The bid for Unocal is "a case of the Chinese trying to secure supply for their own purposes," said Daniel Hynes of ANZ Bank in Melbourne, Australia. "With their oil needs growing exponentially, securing this asset would put them in very good stead for the future."

In other industries, top state-owned Chinese companies recently have made a string of high-profile acquisitions abroad in an effort to establish a global presence.

CNOOC's offer is the biggest Chinese attempt at an unsolicited takeover of an American company - but not the first.

Appliance maker Haier Group and two U.S. private equity firms offered $1.28 billion for Maytag after the American company agreed to be bought by another U.S. firm. Maytag says it is considering the Haier consortium's offer.

Analysts say Lenovo Group Ltd.' s friendly deal for IBM Corp.'s PC business would expand the U.S. company's access to China.

Troubled British automaker MG Rover courted a Chinese firm as a possible corporate savior, trying to sell itself to state-owned Shanghai Automotive Industries Corp. But the Chinese partner decided against a deal and Rover collapsed.

CNOOC said its deal with Unocal would more than double its production and increase reserves by nearly 80 percent. The company estimated that 85 percent of the combined reserves of both companies are located in Asia and the Caspian Sea region.

Chevron offered in April to acquire Unocal in a deal that would give Unocal shareholders a choice of $65 per share in cash, Chevron stock or a mix of stock and cash.

Chevron, based in San Ramon, Calif., reaffirmed its bid, saying its offer "combines compelling value, regulatory certainty and accelerated timing, providing a superior transaction for Unocal stockholders."

Chevron noted that a deal with CNOOC would require new regulatory reviews in the United States and elsewhere.

CNOOC's chief financial officer, Yang Hua, told Dow Jones Newswires that his company is "prepared to closely cooperate ... to get U.S. approval for this deal." The company plans to retain "substantially all employees, including those in the U.S," noting that Chevron, in contrast, plans layoffs, he said.

"We believe the offer will be very good for America as we are going to protect U.S. jobs while continuously marketing (Unocal's) products in the U.S.," Yang said.


© 2005 The Associated Press"
http://archive.newsmax.com/archives/articles/2005/6/23/155326.shtml


.....makes you go hmmmmm.....


I also wanted to restore memory about Umbra's "very rich by Easter" post. Personally, I found him/her to be upfront and level when that post was put on the board. Shortly after Easter the Sinopec buy-in rumors surfaced. As importantly, Sfreed also cosigned, at the time, that a chinese buy in was in the works. Throw Oilphant in the same mix as well, as he, too has suggested the Chinese are very much at play here.

Will SEO be the vehicle the Chinese ride to attain further properties in the Niger Delta? They (Chinese) certainly aren't intimidated with the dangers involved, physically or politically.

You take the pick....there are now 4 to pick from and I like #4 as well as any of the other choices. Maybe better because I do believe it was the plan of action almost two years ago only to be foiled (delayed?) by a scared natational energy committee in the US of A. Wouldn't that be something if XOM decided they, too, would take a stake alongside the Chinese making ERHC a true poster child (no #5 today....yet).

[balance_builder]

I remain under the belief that ERHC shareholders will either have a buy-in or buy-out well before the drill bit churns into the ocean floor. While this isn't a popular belief by many on this board I believe the co action/inactions speak loudly toward this route. Here's some of my reasoning:

1. ERHC has remained without a real CEO/CFO for 19 months. Any company working toward real growth KNOWS the market perception for a company lacking these critical officer positions would cease all growth capability. The co's lame excuse of being unable to fill these positions due to the ongoing investigations doesn't cut it for this investor. If ERHC can successfully hire on James Ledbetter and he was able to determine the JDZ prospects were not getting sufficient attention.....and that the investigations were baseless....I'm certain ERHC could find quality leaders for the company as well. In fact, with a beat down price, quality leaders doing some real DD would be pleased to gain ownership of co shares at todays price. IMHO.

2. The company has lacked in the area of telling the world what they believe the assets to be worth. ERHC has resisted hiring available co's to read the seismic data and profess it to the world in a PR campaign. Instead they retain 9 year old 2D data and refer shareholders to that information on their website and at the same time, admit to individual shareholders that they do, in fact, have much newer 3D seismic in hand.

3. ERHC settled ALL outstanding lawsuits last year. They did a complete "about face" in their settlement of same with conditions that the filers could never come back (a welcomed condition by any ERHC suitors). Coincidence?

4. SEO steps down as Chairman of the Board. Can a COB vote his shares in a buyout offer or tender offer? Coincidence?

5. Only days after SEO steps down as COB, his Chrome attorney, O.J. Chidolue, is dismissed from his court subpeona. Coincidence?

6. SEO mysteriously moves almost exactly 1/3 of his ERHC holdings from Chrome Services to Chrome Energy. This move takes place AFTER he steps down as COB and after years of holding all of his ERHC shares in his Chrome Services company. Coincidence?

7. ERHC announces their second shareholder meeting (scheduled for April 22, 2008) after years of no shareholder meeting. Coincidence?

8. ERHC's secretary stated at the 1-15-08 Conference Call when questioned about buyout/buyin rumorings:

"Again its not company policy to comment on rumors and there's a lot of rumor out there about ERHC naturally given the exciting times we are currently facing, however, [much emphasis] if there is any such move, if there is any such initiated [end emphasis]we will tell our shareholders as and when appropriate....[pause and then emhpasis again] you will be duly informed [emphasis ends] according to regulations, according to law and according to good corporate practice. That's all we say about that.....at the moment"


Many on this board think SEO would be crazy to sell any shares prior to drilling and subsequent proving of oil which would enhances the co's assets significantly. My response: Risk reduction. FINDING OIL IS NOT A SURE THING. Don't believe me....listen to Devon energy and their quest for finding oil in a block adjacent to the JDZ. They failed after 3 attempts and drilling costs are high!

Bottom line is.....I strongly disagree with those that believe SEO will make no significant move prior to drilling. The action strongly suggests otherwise IMHO. We all wait. What we do know is:

1) AFREN is looking at acquistions with a new major partner looking to take a stake in their co.

2) ADDAX has indicated they are looking at acquisitions in the short term.

3) Petrobras is slithering their way into the STP EEZ through the president of STP and even going as far as seeking a change in the law to get a foothold.

http://investorshub.advfn.com/boards/read_msg.asp?message_id=25907197