Re: Freed's post.
S. Freed was responding to a prior poster, who had a private letter that he asked Freed to review. So Freed's post is a response to whatever was said. (all my second guessing from what I read on the EF board)
Freed said: "He seems to argue a point that Addax should buy ERHC to maximize net
revenues to it.
However, if you subscribe to the theory that Addax wants to find
(i.e. locate, prove up and show a buyer its there) as much oil as
possible and then sell out, does it matter whether Addax actually
produces from the JDZ or not. Actually producing oil is probably
further out on the curve than Addax wants to go in the JDZ - its a
much bigger project than their other easier properties.
What matters is proving fields and blocks contain lots and lots of
oil. Maximizing proven reserves to maximize a potential buyout price
is their goal.
Addax is showing that it wants to be top dog in the JDZ. Right now,
ERHC is number 2 - and is fully carried by Addax.
So, right now, Addax is paying for reserves that ERHC will book as
its own and get the benefit in any future valuation. That is not in
Addax's best interests.
The rumours have been heating up over the last few days on exactly
this..."
If I remember right, Freed has suggested that multiple "offers" have been submitted to EO, most of which are buy-ins for a part of his shares. Somehow, EO has to transition control of the company to whoever buy's into ERHE for the value of the company to be maximized. I don't think any E&P can afford to buy us out totally at prices we or EO want. My money is literally on the buy-in scenario and Addax is a likely candidate (along with others too).
My opinion....let the buy-in take place. This will be the best long term strategy for us little investors. Bring it on sooner than later too! Share price and volume moving up in anticipation of the Oil and Gas Conference. Maybe there will be some news. Watch the volume.
Holding for Christmas 2008.
dat
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