Energy Inc. Updates Shareholders on Progress
HOUSTON, September 21, 2010 – ERHC Energy Inc. (OTCBB: ERHE), a publicly traded American company with oil and gas assets in the highly prospective Gulf of Guinea off the coast of West Africa, today issued the following update on Company activities from Peter Ntephe, chief executive officer.
To ERHC Shareholders:
I am pleased to update the ERHC Energy family on the company’s recent progress.
Joint Development Zone
With ERHC’s assent, support and participation, the operators of Joint Development Zone (JDZ) Blocks 2, 3 and 4 are currently negotiating the terms for entry into Exploration Phase II with the Joint Development Authority (JDA). ERHC has 22 percent interest of JDZ Block 2, 10 percent interest of JDZ Block 3 and 19.5 percent interest of JDZ Block 4.
The contracting parties’ commitments on Exploration Phase I of JDZ Blocks 2, 3 and 4 were successfully met with the drilling of five wells in the three blocks between August 2009 and January this year. Natural gas was discovered in at least three wells (you can review more information about each of the Blocks at www.erhc.com/jdz). The operators’ analyses of the well outcomes, while still ongoing, are informing the parties’ negotiations with the JDA on terms for entry into Exploration Phase II (or a further extension of Exploration Phase I).
We are highly encouraged by the decision to negotiate entry into Exploration Phase II. In meetings with Sinopec Corp. (NYSE: SNP), operators of JDZ Block 2, and its subsidiary, Addax Petroleum, operator of JDZ Blocks 3 and 4, ERHC has been a strong advocate for advancing to Exploration Phase II and we consider the current negotiations to be a very positive development.
Potential outcomes of the negotiations could be to enter into Exploration Phase II or further extend Exploration Phase I. An agreement could come at any time.
We also expect these negotiations to address the issue of a number of small interest holders in each Block either defaulting on their financial obligations or choosing not to proceed with Exploration Phase II. The interests of the defaulting or withdrawing parties will be available in the first instance to the remaining parties and thereafter to interested new players in the Blocks.
Institutional Investor Outreach
ERHC had a very enthusiastic reception from institutional investors last week at the Rodman & Renshaw Annual Global Investment Conference. The conference was a good opportunity to describe how, through our heritage of visionary leadership, ERHC secured its current impressive portfolio of assets and how we intend to build on this heritage by leveraging our contacts and expertise.
ERHC Vice President of Corporate Development, David Bovell, offered a history of the Company and an overview of its deepwater oil and gas assets, and explained the Company’s major growth initiatives. The presentation slides can be viewed at www.erhc.com/presentations. Mr. Bovell and other ERHC representatives also met individually with institutional investors to address questions and describe our vision for the Company’s future as an energy investment company with assets across the development lifecycle – from exploration to production.
Status of AIM Listing
ERHC is well advanced with its plans to list on the AIM market of the London Stock Exchange before the end of 2010. When completed, this listing will complement the Company’s current trading on the OTC in the U.S., to which no changes are planned.
In the coming weeks, we expect reports to be completed by the Company’s advisers and independent experts on the Company and its assets. This will include a “Competent Persons Report,” which will include an analysis of the Company’s existing portfolio of oil and gas assets conducted by independent engineering firm Netherland Sewell & Associates. The Competent Persons Report will be made public in ERHC’s AIM Admission Document.
A listing on AIM will give ERHC access to a new pool of capital in a market that is enthusiastic about emerging oil and gas companies and knowledgeable about West Africa’s oil and gas industry. We anticipate that it could also make ERHC more attractive to institutional investors and potentially reduce the volatility of the Company’s share price.
Exclusive Economic Zone
ERHC continues to be encouraged by the interest from potential farm-in partners for oil and gas exploration in the São Tomé and Príncipe Exclusive Economic Zone (EEZ). ERHC has a 100 percent working interest in EEZ Blocks 4 and 11 – completely free of signature bonuses.
Earlier this month, the National Petroleum Agency of São Tomé & Príncipe (ANP-STP) extended the 1st Licensing Round to later in the year to give more companies an opportunity to take part in the bidding process. We consider the extension to be a positive development as it could attract more exploration companies and provides ERHC more time to reach agreement with a technical partner prior to entering into negotiations of Production Sharing Contracts.
ERHC believes the EEZ has all the necessary components of a successful petroleum system. The close proximity of São Tomé and Príncipe’s offshore waters to the proven hydrocarbon systems in the adjacent territorial waters of Gabon, Cameroon, Equatorial Guinea and Nigeria suggests the potential for hydrocarbons, which is further supported by seismic data and petroleum seeps seen on the island of São Tomé.
The effort to conclude an agreement with one or more operating partner(s) in the EEZ is a long-term initiative that is likely to be completed in 2011.
Following the completion of the EEZ 1st Licensing Round, ERHC will consider exercising its preferred rights to back-in to two additional EEZ Blocks of its choice with a 15 percent working interest on which a signature bonus would be payable. This would follow discussions with the Block operators whom ANP-STP selects as well as technical due diligence of the Blocks.
If you have questions, please ask the Company directly through investor relations representative, Dan Keeney (214.432.7556 or email@example.com).
I thank you all for your continued interest in ERHC and your trust.
Chief Executive Officer
Chief Executive Officer
This press release 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, 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 Economic Zone 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 press release. 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.