To ERHC Shareholders:
I am pleased to again update the ERHC Energy family on the company’s progress during the past two months.
You may have read that ERHC’s consortium partners in the Joint Development Zone (JDZ), Addax Petroleum and Sinopec Corp., have jointly secured the deepwater drill ship Aban Abraham to start exploratory drilling operations as early as mid-2008 in Blocks 2 and 4 of the JDZ. These are exciting developments for ERHC shareholders and have resulted from years of planning and preparation.
There is plenty of excitement about the extensive exploration and appraisal program that is planned. The goal is to realize value from our asset base in the JDZ in order to have a positive impact on the Company''s profitability for the benefit of its shareholders. That said, I want to continue to caution that there are many contingencies that affect operations of this nature and guidance for when exploratory drilling may commence could change. We will continue to look to the operators of each of the Blocks to make the relevant announcements when the time is right.
A number of shareholders have asked about the status of JDZ Block 3, in which ERHC has a 10 percent carried working interest and a production sharing contract with Addax. Another oil and gas company, Anadarko, which has a 51 percent working interest, is the operator of that Block and will be the source of any updates related to drilling timelines.
Last month, ERHC’s Vice President, Technical, James Ledbetter, was in Nigeria on an intensive working tour. He had positive and productive discussions with Addax and Sinopec. He also participated in meetings of the Operating Committee and the Technical Committee for each of the Blocks in which ERHC has an interest. We remain positive about the progress being made.
While in Nigeria, Mr. Ledbetter also participated in meetings with the Joint Development Authority to build trust and strengthen ERHC’s bonds with the organization. He has also been exploring prospects in the region for ERHC and met with several parties who might have interesting opportunities for investment by ERHC. Nigeria, as many shareholders are aware, has announced it will soon auction exploration licenses for 45 offshore and onshore oil and gas blocks. In addition, marginal fields which might provide good investment for companies of ERHC’s size and capacity are starting to become available. ERHC is seriously looking at all available opportunities right now and assessing them for feasibility of participation.
The Board of Directors has appointed the national law firm of Duane Morris LLP, which is one of the 100 largest law firms in the world, as ERHC’s corporate securities counsel. The Company’s corporate‑securities legal work had previously been handled by a local Houston firm. Going forward, Duane Morris will handle matters relating to ERHC’s corporate securities, including compliance with the federal reporting requirements. Meanwhile, the law firm of Akin Gump Strauss Hauer and Feld LLP continues to interface with U.S. Department of Justice and the Securities and Exchange Commission investigators and respond to their requests for information.
We have fully settled into our new and expanded Houston headquarters. With more than double our previous space, we are prepared for an acceleration of business operations in the months and years ahead. While the Board continues its efforts to identify the appropriate CEO and CFO, the Company remains confident in the capabilities of the interim leadership to maintain our positive momentum.
Thank you for your continued interest and please know that everyone associated with ERHC Energy values your trust and support.
Acting Chief Executive Officer