| |
Joint Development Zone
 ERHC has interests in six of the nine Blocks in the Joint Development Zone (JDZ), a 34,548 sq km area approximately 200 km off the coastline of Nigeria and São Tomé & Principe that is adjacent to several large petroleum discovery areas. ERHC's rights in the JDZ include:
- JDZ Block 2: 22.0%
- JDZ Block 3: 10.0%
- JDZ Block 4: 19.5%
- JDZ Block 5: 15.0%
- JDZ Block 6: 15.0%
- JDZ Block 9: 20.0%
In early 2008, Addax Petroleum, an experienced exploration and production company that has participation agreements with ERHC in JDZ Blocks 2, 3 and 4, and is the operator of JDZ Block 4 publicly disclosed seismic images and maps showcasing the prospectivity of its JDZ interests. Addax has authorized ERHC Energy to feature some of the JDZ-related images to better inform the investor community. The Addax Petroleum Capital Markets Day presentation was made public on January 29, 2008 and is available for download.
In 1999, Geco-Prakla (now WesternGeco) shot a 2D seismic survey of approximately 5,900km covering the major part of the JDZ. Interpretation carried out by WesternGeco has enabled the identification of 56 prospective structures within Blocks 1 to 9 in the JDZ, of which 17 were defined as prospects and 39 as leads. WesternGeco used reservoir parameters similar to those known from nearby fields in Nigeria and Equatorial Guinea. Combined recoverable reserves potential of the 17 prospects was estimated by WesternGeco to be 14.4 billion barrels of oil. The scope of the WesternGeco report was to interpret and map seismic data, highlight prospectivity, and calculate volumetrics.
The estimate of "recoverable reserves potential" is based on WesternGeco's report, which interpreted and mapped seismic data, highlighted prospectivity and calculated volumetrics. It did not include any attempt to comply with any SEC definition of reserves. ERHC Energy has access to the data under the terms of a data use license with WesternGeco.
Operations in JDZ Block 4
ERHC's consortium partner Addax Petroleum is the operator of JDZ Block 4. WesternGeco’s interpretation of seismic data estimates the combined recoverable reserves potential of JDZ Block 4 could total more than 1.8 billion barrels (P50) prior to deductions. The estimate of “recoverable reserves potential” is based on the report, which interpreted and mapped seismic data, highlighted prospectivity and calculated volumetrics. It did not include any attempt to comply with any SEC definition of reserves. Addax has secured Joint Development Authority approval to explore the Kina Prospect. Drilling equipment has been ordered. Earlier in 2007, Addax and Sinopec jointly entered into an agreement with a subsidiary of Aban Offshore Limited for the provision of the Aban Abraham, which continues being refurbished and upgraded in Singapore. At the end of its contractual obligations to another partnership, the Aban Abraham will be transferred to Addax and Sinopec.
Operations in JDZ Block 3
WesternGeco’s interpretation of seismic data estimates the combined recoverable reserves potential of JDZ Block 3 could total approximately 600 million barrels (P50) prior to deductions. The estimate of “recoverable reserves potential” is based on the report, which interpreted and mapped seismic data, highlighted prospectivity and calculated volumetrics. It did not include any attempt to comply with any SEC definition of reserves. On August 8, 2007 Anadarko, the operator in JDZ Block 3, presented the initial proposals for exploration well locations for the Block. The Joint Development Authority has approved drilling at the Lemba Prospect. Anadarko has ordered drilling equipment.
Operations in JDZ Block 2
ERHC's consortium partner Sinopec Corp. is the operator in JDZ Block 2. WesternGeco’s interpretation of seismic data estimates the combined recoverable reserves potential of JDZ Block 2 could total more than 2.6 billion barrels (P50) prior to deductions.. The estimate of “recoverable reserves potential” is based on the report, which interpreted and mapped seismic data, highlighted prospectivity and calculated volumetrics. It did not include any attempt to comply with any SEC definition of reserves. The Joint Development Authority has approved drilling at the Bomu Prospect. In 2007, Sinopec and Addax jointly entered into an agreement with a subsidiary of Aban Offshore Limited for the provision of the Aban Abraham deepwater drillship, which continues being refurbished and upgraded in Singapore. At the end of its contractual obligations to another partnership, the Aban Abraham will be transferred to Addax and Sinopec.
Background on the JDZ
In the spring of 2001, the governments of São Tomé & Principe and Nigeria reached an agreement over a long-standing maritime border dispute. Under the terms of the agreement, the two established the Joint Development Zone to govern commercial activities within the disputed boundaries.
Oversight of the JDZ
The JDZ is administered by a Joint Development Authority (JDA) which oversees all future exploration and development activities in the JDZ. The remaining claimed territorial waters of São Tomé & Principe are known as the Exclusive Economic Zone (EEZ).
Revenue Split
Revenues derived from the JDZ will be shared 60/40 between the governments of Nigeria and São Tomé & Principe, respectively.
Cautionary Note to U.S. Investors - The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms on this Web site, such as "recoverable reserves potential," that the SEC's guidelines generally prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 10-K. You may review our filing with the SEC at the following Web site: www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000799235.
|
