Addax Geneva presentation.
I participated today at a presentation of Addax Petroleum to the Geneva financial community and had a discussion afterwards with CEO Jean-Claude Gandur. He is a really impressive personality, very enthusiast about what he is doing. Lots of energy and with an important culture related to the Middle-East and Africa’s history and art. Here are the ERHE related items from his presentation and the subsequent questions.
1. When will drilling start in JDZ block 4?
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The Aban Abraham will be drilling for Addax approximately a year from now, in Q3FY09, up to 10 wells. Addax is doing the maximum to drill earlier and is actively looking for a rig of opportunity, ideally for Q3-Q4/FY08. They are willing and able to spend the USD 600.000 or more per day for an earlier drillship. First target: the Kina prospect in block 4.
2. Block 4 expectations?
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No massive, elephant fields but a series of well exploitable, prolific deposits.
3. Where is Addax on the block 4 Godsonic issue?
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Actually subject of arbitration in London. A friendly arbitration process, the relationship with ERHE is excellent. Addax will most probably end up with an additional 7.2% of block 4, ERHE with 1.8%.
4. Why did Exxon sell their interest in block 1?
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Insufficient exploration, oil considered not commercially interesting (related to other opportunities) and continuing pressure from Addax to sell.
5. Why Addax success in Nigeria, contrary to Shell?
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Excellent local relations and far away from troubled areas. Addax did not lose one day of production since they are in Nigeria. They maintain good personal contacts with local communities and do not give money to local chiefs (like Shell does). Addax asks the locals what they want and build it for them (schools, hospitals, etc.).
6. Views on oil price?
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Will go up longer term with intermediate ups and downs.
7. Jean-Claude Gandurs plans for the future?
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Finish the actual 3 year program, increase the value of the company and sell the company for the highest amount possible (possibly in the order of USD 16 B). Jean-Claude Gandur started the business with USD 13 M, Addax is now worth USD 8 B and the programs underway (JDZ and Taq-Taq) should double the Company. Addax is looking for acquisitions.
The above is 100% factual reporting: nothing added, nothing deleted, nothing changed.
Excellent, professional presentation, much liked by the audience. Yesterdays Zürich presentation was also very well received (Claude-Alain where you there?). In total, about 50 investors/financial people were present in Geneva and Zürich. ERHE was mentioned many times.
All is well although I would like to have seen faster drilling. Hope this is useful.
ERHE, long & strong.
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