HOUSTON, April 20, 2011 – 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 investment community and other interested parties on ERHC Energy Inc.
São Tomé and Príncipe Exclusive Economic Zone (EEZ)
ERHC will be sending down a team of specialists in PSC negotiations to Sao Tome in the third week of May for deliberations with the National Petroleum Agency of São Tomé and Príncipe (ANP-STP) on matters regarding negotiation of PSCs on Blocks 4 and 11 of the Exclusive Economic Zone (EEZ). The date for start of negotiations and the timeline will be as mutually agreed subsequently by ERHC and ANP-STP. ERHC has 100 percent working interests of EEZ Blocks 4 and 11 with no signature bonus obligations attached to those interests.
For those investors who were not involved with ERHC several years ago when the Joint Development Zone (JDZ) PSCs were negotiated, a PSC is an agreement between the Company (and its joint venture partners) and the government of São Tomé and Príncipe that spells out the work commitments (including acquisition of data, drilling of wells, social projects, etc.), the time frames for accomplishing the work commitments, how production will be shared between the parties and the government, and how costs of exploration, development and production will be recovered.
ERHC management is looking to negotiate PSCs for the EEZ Blocks that will be attractive to potential joint venture partners. Discussions are continuing simultaneously with prospective operating partners for ERHC’s EEZ Blocks.
The São Tomé and Príncipe EEZ is a frontier region that sits south of the Niger Delta, and west of the Gabon salt basin, retaining similarities with each of those prolific hydrocarbon regions. The regional seismic database comprises approximately 12,000 kms of seismic data. Interpretation of that seismic data shows numerous structures that have similar characteristics to known hydrocarbon accumulations in the area. The interpretation done to date has led to a regional understanding of the subsurface geology, trapping styles and prospectivity within the region of investigation.
EEZ Block 4 (right above) is 5,808 square km, situated directly east of the island of Príncipe. The northeastern area near EEZ Block 4 contains a large graben structure, which is bound by the Kribi Fracture Zone.
EEZ Block 11 (right below) totals 8,941 square km, situated directly east of the island of São Tomé and abuts the territorial waters of Gabon. The southern area of the EEZ, where EEZ Block 11 is situated, contains parts of the Ascension and Fang Fracture Zones.
Several hydrocarbon plays can be proposed in the territorial waters of São Tomé and Príncipe.
ERHC has recently engaged Dr. Ken Seymour as a senior engineering consultant to join the Company’s technical team. In recent weeks, ERHC has been expanding its technical team to properly position the Company to take advantage of emergent West African E&P opportunities. Dr. Seymour joins Senior Geoscientist Michael Shafie and Technical Consultant Dan Gralla on ERHC’s technical team.
Dr. Seymour is a highly qualified and experienced petroleum engineer who has worked in E&P for over 30 years. He has worked in Africa for most of the past 25 years, particularly in Angola and Nigeria. In addition to English, he speaks fluent Portuguese which is the national language of São Tomé and Príncipe. He recently completed his engagement with the German multinational company E.ON Ruhrgas E&P GmBH as Vice President Business Development (West Africa) and Country Manager for Nigeria. Dr. Seymour has a first class honors Bachelors’ degree in engineering and a PhD specializing in rock mechanics from the University of Leeds in England. He also holds an MBA from the University of Aberdeen and Robert Gordon University in Scotland. He is a member of the Society of Petroleum Engineers and the Institute of Petroleum.
We are very excited to have a professional of Dr. Seymour’s stature with such a deep understanding of West Africa’s oil and gas industry and the opportunities therein to help lead ERHC’s expansion in the region.
Joint Development Zone (JDZ)
Negotiations to determine next steps in JDZ Blocks 2, 3 and 4 are continuing. The contracting parties, led by our technical partners and operators in the Joint Development Zone (JDZ), Sinopec Corp. (in JDZ Block 2) and Addax Petroleum (in JDZ Blocks 3 and 4) and the Joint Development Authority (JDA) are working to reach agreement on how to proceed with the exploration program.
ERHC has a 22 percent interest in JDZ Block 2, a 10 percent interest in JDZ Block 3 and a 19.5 percent interest in JDZ Block 4. While the initial drilling campaign that concluded in early 2010 discovered biogenic methane gas, we have cause to remain positive about the long-term prospectivity of the JDZ. We want to emphasize that to date, negotiations continue between the contracting parties, led by the operators, and the JDA on next steps in the exploration program. When definitive agreement is reached, ERHC will promptly disclose it with the relevant authorizations as has been our practice. ERHC will not make speculative comments on the negotiations or conjectural remarks on the JDA’s or operating parties’ intentions.
We urge caution about putting undue reliance on sources other than ERHC Energy for information about the Company and/or its assets in the Gulf of Guinea. The dissemination of accurate, authoritative and material information on operating and other fundamental decisions in the JDZ Blocks is within the purview of the operators and/or the JDA. ERHC will publish such information in a timely manner in accordance with our contractual and regulatory obligations.
ERHC’s website has accurate information about the Company’s assets and the FAQ on the website is frequently updated to address the latest questions. I encourage you to visit www.erhc.com periodically to keep up to date on Company initiatives.
AIM Listing Status Update
ERHC and its advisers are currently reviewing the initial results of corporate due diligence carried out on the Company with a view to resolving any issues arising from the exercise. The exercise has covered ERHC’s history over the last 25 years but particularly since 1997. Completion of the review and successful resolution of any issues will clear the way for admission of ERHC to trading on AIM.
We would like to emphasize however that the due diligence is an ongoing process until the eve of listing when finalized reports will be completed for attachment to, and publication with, the admission document. While a considerable part of the process has now been accomplished, we have not yet reached the stage where there are finalized reports for publication. As we have stated from the beginning, a competent persons’ report commenting on ERHC’s assets in the Gulf of Guinea, will be one of the finalized reports that will be published with the AIM admission document.
Although the listing process has taken longer than expected, ERHC’s management believes that listing on the AIM is in the best interests of the company and its shareholders. An AIM listing will give ERHC access to a much larger pool of funds than the OTC and to a market that has demonstrated long-standing affinity for West African oil and gas assets.
As stated previously, none of this activity impacts the Company’s current trading on the OTC in the U.S. We will provide updates as the process advances.
Quarterly Report and Conference Call
Work is well underway on ERHC’s second quarter financial report for the period that ended March 31, 2011. We have scheduled an Investor Conference Call for May 10, 2011 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). To participate, please dial 877-309-0830 (domestic) or 716-247-5185 (international) five to ten minutes before the call begins and reference the pass code 62093492.
A replay of the call will be available from Tuesday, May 10, 2011 at 10:00 a.m. Eastern Time through May 17, 2011 by dialing 800-642-1687 (domestic) or 706-645-9291 (international) and referencing the pass code 62093492.
Thank you all for your continued interest in ERHC and your trust.
We anticipate making the audio from the call available online and will post Web access information when it is available.
If you have questions, please ask the Company directly through its investor relations representative, Dan Keeney (214.432.7556 or firstname.lastname@example.org).
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, 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 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.