I emailed Dan to see if I could get an idea of what might happen in Sinopec's block. Thanks to Dan for your very prompt & straight forward reply. Here is his reply and my email at bottom. Looks like it will not matter about who is partnered with them and what would be in the partners best interest. Sinopec holds all the cards and can do what they want apparently. This was one thing I was afraid of. Nice to have the Chinese with us for some reasons but as far as SP goes, could be fairly benign having them as operator in regards to our SP appreciation. So what good does it do us. They still get their benefits but leave us wanting, apparently.
Hi XXXX:
The contractual terms that guide our actions in the JDZ are clearly spelled out: only operators are allowed to disclose information about the respective blocks. So regardless of what is in any particular company’s interests, the operator will determine the degree to which information is disclosed. I don’t think it would be fair for us to try to anticipate or predict how Sinopec will behave in terms of future disclosures. They have been a good technical partner and we work productively with them.
That said, as Jim Ledbetter indicated at the Annual Shareholders Meeting last month, it may be in ERHC’s interests NOT to disclose the outcomes of exploratory drilling in JDZ Block 2 because it is adjacent to the Sao Tome & Principe EEZ in which we hold future rights. Keeping our findings close to the vest could provide ERHC with important information that can influence future decisions regarding EEZ Block selection.
But let’s give it time and see what actually happens. I’m not at liberty to speculate about what might happen – particularly as it relates to share price, which can fluctuate unpredictably.
Thanks for your note.
Sincerely,
Dan Keeney, APR
DPK Public Relations
214-432-7556 (DFW Area)
832-467-2904 (Houston)
www.dpkpr.com
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From: XXXX
Sent: Wednesday, May 07, 2008 4:29 PM
To: dan@keeneypr.com
Subject: Operator Sinopec
Hi Dan, I am a shareholder of ERHC and I have a question for you. I am also a poster on the Ihub board.
Anadarko, Addax, and others companies from the free world work off of the free market capitalism model. So they want to produce relevant news at some point to enhance their own SP for their investors.
Sinopec does not work under that type of model obviously. News from them regarding results will be at a minimum I am sure. How would you expect to see value added from their block to our SP or company when they have no incentive to give info?
Basically, how would we see our SP move from results from their block? I know we would gain from actual production of oil but what about proven reserves? Does not seem like we would benefit SP wise from that block in terms of info regarding what they found if noone else knows what they found.
If I am not mistaking, I believe I have read from updates or PR's that even ERHC management believes Sinopec would be stingy with info. How would you see this played out when results have been established regarding how we could benefit from said results? If there is anything you could shed light on regarding this issue, it would be greatly appreciated.
Thank You Sir.
BTW You were outstanding at the SH meeting and in your recent efforts to keep us informed.
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