Replies to post #243756 on ERHC Energy Inc (ERHE)

[ac hotfries]

longtimer,

Couldn't another popssibility be a deal with Taiwan to take a percentage and operatorship in an eez block in exchange for a full carry in the EEZ and partnership/carry in the Chad property? just thinking out loud. It would certainly explain the secrecy on the terms of the deal.

-ach

[vineseeker2]

longtimer, I interpited it differently. CIOC has 100% ownership of the block, Chad kept a 30% royalty ownership of any oil. If CIOC had to relinquish 50% of the blocks acreage, they might have given up 50% of everything but kept operatorship. That way they still control who gets to buy the oil, ERHC gets to pay for 50% of the continued development & gets 50% of the money from production. CIOC gets to strech their development/production funds - Tiwan has no oil or very little and has to import all they use, like mainland china they need oil.
They might be interested in the EEZ or being the operator in our other two Chad blocks & willing to pay with 1/2 a producing well, JMHO

[seek the light]

ERHClongtimer....I used all my post yesterday,and could not respond to your post until today. As always enjoyed your reasoning.

I see Vines post #243764 and tend to agree with his thoughts CPC owns 100% and has to rebate 30% of the oil produced to Chad. In your post #243183 on 7/13 you posted information on the contract between Chad and CPC which in part was: "The permit covers 26,250 sq km on three oil blocks in the Lake Chad Basin, Chari Sud Basin and Chari Ouest Basin. The new contract DIFFERS from the concession-type convention previously signed with Esso and the Clivenden-Encana joint venture. Under the concession- type convention the government grants a private company or a consortium a licence to extract oil, which becomes the company's property once extracted; the company pays the government taxes and royalties for the oil.

"The OPIC contract stipulates that the government will receive from OPIC royalties of 12.5% and income tax of 50%, and that production will be shared (30% for the government and 70% for OPIC)."

It seems to me this means CPC has 100% of the block and must pay all expenses of the exploration, but if oil is found and produced the government of Chad is rebated 30% of the production. In addition CPC must pay royalties of 12.5% on the oil and taxes of 50% on the income.

I also wonder what this excerpt means. "A new element in the management of oil resources by the government is the division of the oil basins in different zones to allow for diversification of the investing companies, which are now granted only part of the basin." Was this a replacement for the earlier requirement for the relinqushment requirement?

As for Africa Energy Intelligence, i'm with king. They simply are not very reliable on the facts in their reports. As i recall the test on the well was for a period of about 5-6 days and the report was the test resulted in 9800 barrels a day with some gas. My question would be what the heck does a nearby well that was disappointing have to do with it. Tullow had 4 disappointing wells in Uganda ,but the other 51 proved up 2.5 billion barrels. And no i'm not saying block 3 has those kind of reserves.

I think it is very possible that CPC might do a farm in on the block for several wells drilled and pipeline built by ERHC as consideration for giving up the 50%. CPC next 5 year budget for exploration and development is only slightly over $100 million a year as per a WSJ story of a couple days ago {see post #243644}.
That is not much money spread over 17 projects around the world; so they might need some financial help.