To ERHC Shareholders:
In recent months, ERHC’s management has concentrated our time, energies and resources on developing our assets in the Joint Development Zone (JDZ). We expect August will be a history-making month for the Company as the operators of two JDZ Blocks in which ERHC has interests plan to commence exploratory drilling.
Sinopec Corp., the operator of JDZ Block 2, in which ERHC has a 22 percent interest, has authorized us to disclose that it plans to drill the Bomu Prospect using the SEDCO 702 semi-submersible drilling unit. Owned by Transocean, Inc., the SEDCO 702 is capable of operating in moderate environments and water depths up to 6,562 feet and drilling depths of up to 25,000 feet. While it is important to understand that drilling plans are subject to change, Sinopec predicts the SEDCO 702 might be available to begin exploration in JDZ Block 2 around August 20, 2009.
Addax Petroleum, operator of JDZ Block 4, in which ERHC holds a 19.5 percent interest, announced earlier this week that it also expects to begin exploratory drilling in August. Addax has arranged to take possession of the Deepwater Pathfinder in the weeks to come and begin a four-well drilling campaign starting with the Kina Prospect.
In JDZ Block 3, in which ERHC holds 10 percent interest, ERHC expects the Operator to make an announcement regarding significant and positive progress toward drilling in due course. The JDA has approved drilling at the Lemba Prospect.
These are exciting developments and everyone associated with these efforts has high expectations. Earlier this year, ERHC reported the findings of an independent assessment of the Company’s unrisked and risked prospective resources prepared by independent engineering firm Netherland Sewell and Associates, Inc. (NSAI). The NSAI estimate of ERHC’s prospective resources (P50) is summarized in the following table:
As drilling in the JDZ approaches, we reiterate that that disclosures relating to drilling and other fundamental steps are initiated or authorized by the operator or the JDA as the case may be. ERHC, like the other parties in the JDZ, is bound to comply with this procedure.
Finally, work is well underway on ERHC’s third quarter financial report for the period that ended June 30th. We have scheduled an Investor Conference Call on August 12, 2009 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). To participate, please dial 888-721-1403 (domestic) or 706-758-1074 (international) five to ten minutes before the call begins and reference the pass code 22567813.
A simultaneous live Webcast of the call will be available over the Internet and will be accessible by going to https://www.livemeeting.com/cc/erhcenergy/join and entering the Meeting ID: SQ8PR4 and Entry Code: kNs~f-5.
A replay of the call will be available from Wednesday, August 12, 2009 at 10:00 a.m. Eastern Time through August 19, 2009 by dialing 800-642-1687 (domestic) or 706-645-9291 (international) five to ten minutes before the call begins and reference the pass code 22567813. In addition, a replay of the Webcast will be available at www.erhc.com.
ERHC Energy remains focused on enhancing value for the benefit of its shareholders. We continue to count on your trust and support.
Chief Operating Officer
This update contains statements concerning ERHC Energy Inc.’s future operating milestones, future drilling operations, the planned exploration and appraisal program, future prospects, future investment opportunities and financing plans, future shareholders’ meetings, response to the Senate Subcommittee investigation, developments in the SEC investigation of the Company and related proceedings, as well as other matters that are not historical facts or information. Such statements are inherently subject to a variety of risks, assumptions and uncertainties that could cause actual results to differ materially from those anticipated, projected, expressed or implied. A discussion of the risk factors that could impact these areas and the Company’s overall business and financial performance can be found in the Company’s reports and other filings with the Securities and Exchange Commission. These factors include, among others, those relating to the Company’s ability to exploit its commercial interests in the JDZ and the exclusive territorial waters of São Tomé and Príncipe, general economic and business conditions, changes in foreign and domestic oil and gas exploration and production activity, competition, changes in foreign, political, social and economic conditions, regulatory initiatives and compliance with governmental regulations and various other matters, many of which are beyond the Company’s control. Given these concerns, investors and analysts should not place undue reliance on these statements. Each of the above statements speaks only as of the date of this update. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any of the above statements is based.
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.