ERHC Energy Inc. Issues November 2015 Shareholder Update
Provides latest information about upcoming special meeting of shareholders and various exploration assets
HOUSTON, November 30, 2015– ERHC Energy Inc. (OTCMKTS:ERHE), a publicly traded American company with oil and gas assets in Sub-Saharan Africa, today issued the following update on Company activities from Dr. Peter Ntephe, president and chief executive officer.
To ERHC Shareholders:
I am pleased to update the investment community and other interested parties on ERHC Energy Inc.
1. General Meeting
a) Preparations are underway for a special meeting of shareholders of ERHC, scheduled for December 15, 2015 in Houston.
b) All shareholders of record as of the record date (November 2, 2015) should have received proxy statements. Voting is open online and by mail with specific voting details on each proxy.
c) The purpose of the special meeting is to consider the proposal of a 100:1 reverse stock split. ERHC's management and board believe that approval of the proposal would, among other things, enhance the company's balance sheet and better position ERHC to take advantage of merger and acquisition interest, particularly in the event of exploration success on any of its assets.
d) For more information, please visit ERHC's online database of SEC filings at http://erhc.com/secfilings/.
2. Kenya Block 11A
a) The Tarach-1 well is expected to spud at the end of the first quarter of 2016. The prospect is defined by four 2D seismic lines out of the 2014 survey. The structural trap is a 3-way dip closure against a north-south normal fault plane at 1,426 mMD (-954m TVDSS) and covering a surface area of 12 sq.km. The vertical closure is calculated at 220 meters at the P10 closing contour.
b) The contracting parties, led by CEPSA (the operating partner), have awarded drilling service contracts following the requisite tenders, and logistics operations toward drilling have begun.
c) Contingent upon the results of the Tarach-1 well, a second exploratory well, Egole-1, may follow shortly after the completion of Tarach-1.
d) As drilling approaches, ERHC has experienced a surge in interest in farming into Kenya. ERHC is currently in discussions with several interested international E&P companies.
e) The mean estimate of oil prospective unrisked resources for the prospect is 66 million barrels. Mean unrisked prospective resources of all prospects and leads in Block 11A totals 662 million barrels.
f) ERHC holds a 35 percent interest in Block 11A.
3. Chad Block BDS 2008
a) ERHC's exploration team has received a number of tender proposals for a 2-D seismic acquisition program.
b) The exploration team continues to work on securing regulatory approvals for the seismic program in ERHC's two focus areas. One is north of Esso's Tega and Maku discoveries in the Doseo basin and the other is east of and on trend with OPIC's Benoy-1 margin discovery in the Doba basin.
c) Based on an earlier aero-magnetic and gravity survey and other available data, ERHC estimates total Petroleum Initially in Place (PIIP) for one of the two focus areas is 278 million barrels (with a high case of 876 million barrels).
d) ERHC holds a 100 percent interest in BDS 2008.
4. São Tomé and Príncipe Exclusive Economic Zone (EEZ)
a) ERHC's focus in the EEZ has shifted from Block 11 to Block 4. The Company and the National Petroleum Agency of Sao Tome& Principe (ANP-STP) have agreed in principle to terms of a Production Sharing Contract (PSC) for Block 4.
b) Last month, we announced the transfer of all ERHC's interests in EEZ Block 11. The transaction enabled ERHC to immediately monetize Block 11 while also providing the opportunity for future financial benefit if exploration progresses through to production.
c) ERHC holds a 100 percent interest in EEZ Block 4 as well as the option to take up to a 15 percent working interest in each of two other unlicensed EEZ blocks of its choice.
5. Nigeria - São Tomé and Príncipe Joint Development Zone (JDZ)
a) On behalf of the Joint Development Authority and the contracting parties, including ERHC, PGS has completed the integration of geological and geophysical (G&G) and well data on the operations conducted so far in JDZ, including in ERHC's Blocks 2, 3 and 4.
b) PGS' integrated analysis included well analysis, seismic interpretation and quantitative seismic interpretation of the large exploration dataset. This dataset is composed of a 3D seismic survey that has been recently reprocessed through a pre-stack time migration sequence and eight wells that encountered hydrocarbons within the study area (including three wells in JDZ Block 1 in which ERHC does not have an interest).
c) The key elements of a working petroleum system are proven to occur within the study area from the available well data.
d) Numerous structural and stratigraphic leads have been identified and evaluated in the area of study using this integrated geoscience workflow. A number of undrilled leads with similar geological and structural characteristics to known discoveries have been identified. In some of the identified structural leads there is the potential for the occurrence of stacked reservoirs, which could provide enhanced hydrocarbon trapping opportunities.
e) This process has provided clues about the unexpected results of the previous drilling campaign (involving five deepwater wells in 2009-2010) and how future campaigns might yield the desired results.
f) There has been emergent interest by prospective new operators/partners in the JDZ Blocks following PGS' completion of data integration and analysis.
g) ERHC holds interests in JDZ Blocks 2, 3, 4, 5, 6 and 9.
6. Oil &Gas Industry
a) The industry remains in a challenging environment regarding crude oil prices.
b) We have responded by significantly streamlining operations, cutting costs and reviewing business strategies aimed at realizing the value of our oil and gas assets.
c) ERHC's management and board believe the reverse stock split proposal being considered at the special meeting of shareholders on December 15th will be an important step in putting the Company on a path toward a positive future.
We thank you for your continued interest in ERHC.
President and Chief Executive Officer
About ERHC Energy
ERHC Energy Inc. is a Houston-based independent oil and gas company focused on growth through high impact exploration in Africa and the development of undeveloped and marginal oil and gas fields. ERHC is committed to creating and delivering significant value for its stockholders, investors and employees, and to sustainable and profitable growth through risk balanced smart exploration, cost efficient development and high margin production. For more information, visit www.erhc.com.
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 stockholders' meetings 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 Kenya, Chad, 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.
Photo by Ed Schipul.