Replies to post #259662 on ERHC Energy Inc (ERHE)

[2IRAs]

It is natural to forget unpleasant things.

[steelwundrin]

Block 4 is the reason we are invested. Of course we would like to see great success in all blocks, but from a prospectivity standpoint our best odds for a home run have always been in Block 4. Don't forget that a NON-OBLIGATORY 3rd well was drilled in Kina. Check these old estimates out to see the value of Block 4 vs. Block 2:

Addax Estimates
2 - Bomu Unrisked 350,000,000 Recoverable 50,100,000
3 - Lemba Unrisked 273,000,000 Recoverable 41,000,000
4 - Kina Unrisked 1,188,000,000 Recoverable 428,700,000

In my mind (small), everything is riding on Kina, and I like our chances. They didn't drill that 3rd well just for grins - it cost $50 million imho.

Sleep well.

[farrell90]

They also forgot the EEL Jan 4 letter to shareholders.

04 January 2012

Dear Shareholder,

Shareholder Update

Accounts

The Accounts for the year 2011 are being compiled. Once the audit is complete, the Annual Report and Financial Statements will be published and notice given for the 2012 Annual General Meeting. The debt owing to Oando Plc as at 31 December 2010 amounted to US$ 4.5 million.

OPL 321 and OPL 323

The appeals by the Nigerian Government parties and by Owel Petroleum Services Ltd against the judgment made in August 2009 in favour of KNOC continue to be heard in the Nigerian Court of Appeal. However, to date the hearings have been mainly procedural and the substance of both cases is yet to be heard. At hearings held in November 2011, the cases were adjourned until March 2012 for the Owel appeal and to a date as yet unknown for the Government appeal. The Company continues to seek a compromise amongst all of the stakeholders.

JDZ Block 2

It was concluded from the evaluation of the exploration well that the Bomu discovery is sub-commercial and the rest of the block has insufficient prospectivity to justify further expenditure by Equator. The drilling and evaluation costs relating to the well, amounting to US$9.4 million, are already impaired and it is intended to treat a similar amount of geological & geophysical costs in the same way.

Bilabri & Owanare (OML 122)

Equator offered Peak a compromise in which we would fund the development of Bilabri, and possibly Owanare, in return for larger interests than those conferred by the Bilabri Settlement Agreement. We would recover, from Peak's share of production, the carry on their future development costs and their existing debts under the Bilabri Settlement Agreement. Peak did not accept the offer, which remains open.

In November, the winding up petition against Peak was made final and the final liquidator was appointed. Peak has appealed the court's decision and has applied for an injunction against Equator. The appeal, which in the opinion of Equator's counsel has no merit, was adjourned until later this month.

São Tomé & Príncipe Block 5 and Block 12

The negotiations on the Production Sharing Contracts for Block 5 and Block 12 are complete. The official Portuguese versions are under review. There will be total signature bonuses payable of US$ 4.5 million, which is the most immediate capital funding requirement of Equator. We expect to execute the PSC's in Q1 2012.

Change of immediate parent company

Equator has been subsidiary of Oando Plc, the Nigerian integrated oil and gas company quoted in Lagos and Johannesburg, since 2009 when it acquired a 78 per cent. stake in your company.

On 2 August 2011, it was announced that Exile Resources Inc., an oil company whose shares are traded on the Toronto Stock Exchange Venture Exchange ("TSXV"), had agreed to acquire the exploration & production assets of Oando Plc in exchange for 100 million post-consolidation Exile shares. In a further announcement on 13 October 2011, it was revealed that Oando Plc will hold at least 94 percent of Exile, which will be renamed Oando Energy Resources Inc ("OER") and, subject to approvals, will move its listing from the TSXV to the Toronto Stock Exchange ("TSX"). On 29 November 2011, Exile issued an information circular and held a meeting of its shareholders on 29 December 2011. The meeting approved the share consolidation and the transaction with Oando. Subject to remaining TSX approvals, it is expected that the transaction will complete during January 2012 and shares in OER will commence trading soon after.

The Equator shares owned by Oando Plc are among the assets being transferred to Exile so the Company's majority shareholder will become OER instead of Oando Plc. In the event that Oando Plc increases its ownership in Equator prior to the closing of the reverse takeover, the agreement with Exile provided for an increase of up to 2,164,500 in the number of OER shares issued to Oando. Oando has acquired sufficient Equator shares to earn an extra 339,052 Exile consolidated shares.

Directorate change

As announced at the last Annual General Meeting, Mr. 'Pade Durotoye has been appointed a Non Executive Director of Equator. Mr Durotoye has a broad international experience in the industry and has been CEO of Oando Exploration Production Limited ("OEPL") since June 2010. Mr. Durotoye is due to become the new Chief Executive of Oando Energy Resources Inc.

Offer from Oando

On 9 November 2011, Equator received an offer from Oando Plc for all of the minority shares. The terms offered were a choice of 6p per Equator share or one OER share for every 48.6893 Equator shares. The offer, which expired on 30 November, was conditional on the acquisition of all the remaining Equator shares and acceptance by the Equator Board therefore required the successful implementation a scheme of arrangement in the BVI courts.

By coincidence, a meeting had been requested by the Equator Shareholders Liaison Group ("SLG") on the same day that the offer was received. The terms of the offer were discussed with the 25 shareholders present at the meeting. The meeting was also told that Oando Plc had acquired further shares in Equator at a price of 3p per share, raising its stake to 81.5 per cent. Mr. Durotoye informed the meeting that, in future, all shareholders, not just OER, would be asked to contribute to the capital cash requirements of the Company.

The board of Equator established an Independent Committee to consider the offer from Oando Plc and engaged Anglo-Suisse Capital Limited as financial advisers. The Independent Committee comprises those directors who do not owe fiduciary duties to Oando other than as directors to Equator, namely Messrs. Patrick Bastin, Philip Dimmock and David Rowlinson. Information on these directors can be found on the Company's website http://www.equatorexploration.com.

The information circular issued on 29 November 2011 by Exile to its shareholders contained the necessary information for Anglo-Suisse Capital to assess the share alternative of the Oando offer for the Equator minority shares. From discussions held by Anglo-Suisse Capital with institutional shareholders and representative members of the SLG, it became clear that a sufficient number of shareholders were planning to vote against the Oando offer as to make the success of a scheme of arrangement, which requires a 75% positive vote, unlikely. On 30 November 2011, having taken the views of shareholders and the advice of Anglo-Suisse Capital into account, the Independent Committee advised Oando Plc that the proposed scheme of arrangement was unlikely to achieve sufficient support to succeed and that it was unlikely that it could be completely closed before the closing of the transaction with Exile. The Independent Committee also passed on the suggestions of Anglo-Suisse Capital for enhancing the offer in order to make a scheme of arrangement more likely to succeed, assuming that Oando still wished to acquire all of the minority shares.

On 6 December 2011, Oando Plc responded that that it was not prepared to change its offer nor to relax the deadline for closing, partly because these would breach its agreement with Exile, and it was therefore ending discussion with Equator in relation to the offer. Subsequent discussions with Oando and its advisers confirmed that Oando was not prepared to improve its offer.

We wish all our shareholders the best for the New Year.

Yours sincerely