Frequently Asked Questions
The following responses are intended to answer the questions currently being posed to the company. We will make every attempt to keep this FAQ section as up-to-date as possible, and appreciate your referencing this section of our website frequently for clarification of facts. Naturally, the content here will evolve as developments occur.
Q. If you start drilling this year, when do you expect first oil and when do you expect to go into commercial production?
Due to the depth of the Joint Development Zone (JDZ) Blocks after the first year of exploration drilling an appraisal well in each block would be drilled in the following year, with a possible second well. Two further wells would be drilled in the third year. Actual commercial production would not be expected until 2012 or 2013.
Q. How do you plan to transport the oil? Are you going to use Floating Production Storage and Offloading (FPSO) vessels or are you going to pipe the oil to an onshore terminal?
Due to the depth of the JDZ Blocks, an FPSO is likely to be the most economical approach to conduct production operations. For more on FPSOs, click here.
Q. Is it just oil down there or are you expecting to find gas as well? If so, do your rights entitle you to the gas as well?
After extensive technical evaluations of all four blocks of the JDZ, it is anticapated that both oil and gas will be discovered. ERHC's exploration and production rights do extend to natural gas as well as to oil.
Q. What kind of oil is down there? How comparable is it to West Texas Intermediate?
Based on current tehcnical evaluations, it is expected that the oil in the JDZ will be in the range of 28 to 32 degrees API, therefore it is quite simialr to West Texas Intermediate.
Q. Is ERHC Energy truly a U.S. energy investment company or a face for another foreign company?
ERHC Energy is a Houston-based publicly-traded, energy investment company with the goal of exploring numerous opportunities in West Africa.
ERHC Energy and its shareholders have the benefit of being invested in a regulated US company that has extensive relationships in the region, which is a unique position among peer companies seeking to do business in the region and attract foreign investment to their cause.
Our company is managed by employees and consultants to the company whose shared mission is to return value to all our shareholders. Though a significant portion of our stock has been held by a Nigerian controlled company, the majority of our ownership is in the hands of other investors.
Q. What is happening with the stock price?
It is impossible at any given time for the company to declare with certainty the trading activity that is affecting the company’s stock price. Investors are encouraged to seek guidance from investment professionals.
Q. Is ERHC going to acquire additional revenue producing properties? If so, when?
We must balance our portfolio of assets to mitigate the risks of having all our corporate interests in one area. Therefore, we intend to acquire a controlling interest of a company that has revenue producing assets or we will form a subsidiary to purchase revenue producing assets directly. We anticipate being able to complete an acquisition in the next three to 12 months (from June 2008).
Q. What is the status of the Aban Abraham drillship?
The Aban Abraham drillship is currently being refurbished and upgraded in Singapore. We understand that it will initially be under contract with another third party operator and, at the end of their contractual obligations, will be transferred to the JDZ Block 2 and 4 operators – Sinopec and Addax. Due to delays with the Aban Abraham, Addax is seeking a rig of opportunity and has indicated that exploratory drilling could begin in JDZ Block 4 as early as the fourth quarter of 2008. More detailed information about the Aban Abraham is available here.
Q. When will investors learn of milestones in the company’s progress?
In keeping with full disclosure rules, the company will announce developments such that all interested parties will simultaneously have access to the information.
Q. Why did ERHC recently double its office space?
ERHC is a different company this year than it was last year, so keeping our old office space was not an option. It literally accommodated just a couple employees. It was fine for a company with no operations, but it was not sufficient for the company we have become. Our partners are progressing toward drilling. We are represented in meetings about our assets by our own staff rather than consultants. We are in discussions about potential acquisitions. And we anticipate that we will be a very different company next year than we are today. So when our lease was up we took a long-term view of what our needs would be not only in 2007 but through the rest of this decade and beyond. All the space is being utilized. When we have a CEO and CFO onboard, our offices will be pretty much filled. But this question is really about whether ERHC management is being wasteful. The answer is absolutely not. This management has worked to keep expenses in check.
Q. Will the company comment on rumors?
No, the company does not comment on rumors and media reports but will provide timely, material information as well as provide periodic updates to the investment community.
Q. Is the company’s plan to position itself for a buy-out?
The Company's intention is to become a recognized and respected member of the international oil and gas community, specifically with interest in developing our business in West Africa. That said, the board will pursue those opportunties -- including but not limited to potential merger and acquisition opportunities -- that it determines are in the best interests of the shareholders.
Q. Should I respond if contacted by Equisearch?
ERHC Energy's stock transfer agent, Corporate Stock Transfer, uses Equisearch to reconnect with shareholders whose addresses or other information have become outdated. As is the case with any organization that contacts you seeking personal information, we recommend proceeding with caution and confirming that the person contacting you works for Equisearch before providing any information. As always, never give your social security number or credit card information.
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