So if I understand your post correctly, you are saying the following:
1) ERHC could lose its rights due to political upheaval.
I think the ultimate test of this hypothesis has and will be two things.
First, the EEZ rights that have now been resolved with EEL. Clearly STP wanted to have it another way, but it didn't. That's a testament to political whim not being able to overcome international contracts.
Second, the outcome of the contested JDZ out-blocks. Hopefully soon, we will know the results of the arbitration on those blocks. You are right that political upheaval or whim does add significant amounts of time to the situation as is shown by how long it has taken for the arbitration to come to a conclusion. However, that is a two edged sword. STP's and the JDA's desire is to take advantage of their resources, quickly. And that segue's nicely onto the next point.
2) Sinopec may simply drill what is required and then sit on the assets in order to starve out ERHC.
This scenario could be possible except I would expect the following:
a) SNP and China need the oil and gas now. They have to make a decision of what is more valuable. Taking what is in the ground now, or leaving it in the ground into an uncertain future.
b) JDA wants to sell the oil and gas now. If SNP takes too long, then I'm sure at that point the JDA would release results, and the valuation of ERHC's assets, and hence SP will be in hand, royalties paid now or later will just be a matter of time value of money adjustments. But in any case, would value the SP higher than it is now.
3) As far as cash burning up, there are a number of solutions:
a) dilute shares.
b) sell some of percentage of interest
c) I would say other properties, but meh.
But overall I see your point.
Krombacher
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