erhc energy dubai presentation, october 27, 2008
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ERHC Energy (OTCBB: ERHE)ERHC Energy (OTCBB: ERHE)
Presented October 27, 2008
By David Bovell
Vice President Corporate Development
Cautionary StatementCautionary Statement
Statements during this presentation may concern 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 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.
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.
Introducing ERHCIntroducing ERHC
• Based in Houston, Texas USA• Publicly traded on NASDAQ’s Over the Counter
Bulletin Board (OTCBB) – ERHE.OB• Valuable oil and gas assets in the Gulf of
Guinea• Seeking new assets and business partners
What Makes Us DifferentWhat Makes Us Different
• Sound strategy and record of accomplishment
• Strong financial position
• Strong leadership
• World class assets
• Strong technical partners
Business StrategyBusiness Strategy
We have created significant opportunities in the Gulf of Guinea and, through strategic alliances, have begun the process of exploiting these. In 2009
progress will be demonstrable.
Strong Cash PositionStrong Cash Position
• ERHC is well placed to prosper during the credit crunch
• Latest quarterly financial report (Q3 2008):– Cash assets of $32.4 million USD– Debt of less than $35,000
• The credit crunch will create opportunities
“…Those in a weaker position are having to sell assets or find partners for their most promising projects to get the
cash infusions they need.”- Wall Street Journal
October 7, 2008
Established Yet Established Yet EmergingEmerging
• Began trading on OTC in 2001
• Market cap: $213 million
• Percentage of shares held by insiders: 51.7%
Strong ManagementStrong Management
• Peter Ntephe, Chief Operating Officer 20 years of experience in corporate law and governance. Oversees the general administration and governance of ERHC and its subsidiaries, ensuring the group meets its strategic objectives.
• David Bovell, Vice President, Corporate DevelopmentExpertise in corporate finance. He oversees strategies for corporate growth, including identification of appropriate opportunities for corporate mergers and acquisitions.
• Jim Ledbetter, Vice President, Technical More than 25 years in exploration and production projects around the world. Manages relation-ships with consortium partners and regulatory agencies, and helps to expand its asset base.
• Sylvan Odobulu, Controller Principal accounting officer, responsible for overseeing ERHC's day to day operations, preparing financial statements and managing the activities of the company's staff and service providers.
Strong BoardStrong Board
• Ambassador (rtd.) Howard Jeter Ambassador Jeter was U.S. Ambassador to Nigeria and to the Republic of Botswana, and also served as Deputy Assistant Secretary of State for African Affairs, Director of West African Affairs, and Special Presidential Envoy to Liberia.
• Andrew Uzoigwe Dr. Uzoigwe retired from Nigerian National Petroleum Corporation (NNPC) after holding numerous positions including Group Executive Director.
• Clement Nwizubo Mr. Nwizubo is a Certified Public Accountant, and member of America Institute of Certified Public Accountants (AICPA). He is President of Clement E. Nwizubo, CPA, PC. Earlier he was the Manager of Accounting and Financial Reporting at Primerica Corporation and other accounting positions.
World Class AssetsWorld Class Assets
ERHC has oil & gas exploration rights in a region of the world that
experts believe can produce billions of barrels of oil
Where Do We Believe Where Do We Believe the Oil Is?the Oil Is?
Assets in the Gulf of Assets in the Gulf of GuineaGuinea
• Rights in six of the nine blocks of the Joint Development Zone
• Additional preferential rights in the Sao Tome & Principe Exclusive Economic Zone
Highly Prospective Highly Prospective RegionRegion
“The Gulf of Guinea…is one of the most prolific hydrocarbon provinces in the world, with oil and gas discoveries of more than 10 Bbbl and tremendous potential beyond that level.”
-Dr. Edmund Daukoru
President of OPEC in 2006
Nearby DiscoveriesNearby Discoveries
Bonga
Agbami
Ikija-1
Akpo-1
Ukot
Nnwa-2
Significant Discoveries:– Bonga: 700 million barrels– Ikija-1: 500 million barrels– Agbami: 1 billion barrels– Nnwa-2: Gas discovery– Akpo-1: 500 million barrels– Ukot: Oil discovery
The JDZ and EEZThe JDZ and EEZ
EEZEEZJDZ
JDZ– 34,548 sq km area– Approximately 200 km off
the coastline of Nigeria and São Tomé & Principe
EEZ– Approximately 160,000
square km area
ERHC’s JDZ InterestsERHC’s JDZ Interests
JDZ Block ERHC Original Participating Interest
ERHC Joint Bid Participating Interest
Participating Interest Sold
Current ERHC Interest
Block 2 30% 35% 43% 22%
Block 3 20% 5% 15% 10%
Block 4 25% 35% 40.5% 19.5%
Block 5 15% No Contracts No Contracts 15%
Block 6 15% “ “ 15%
Block 9 20% “ “ 20%
Recoverable Reserves Recoverable Reserves PotentialPotential
The combined recoverable reserves potential in the nine JDZ Blocks is
estimated at 14.4 billion barrelsSource: WesternGeco
Significant FootholdSignificant Foothold
In total, ERHC has 12% of the exploration and production rights awarded in the
JDZ by the Joint Development Authority
JDZ Deepwater BlocksJDZ Deepwater Blocks
JDZ Block 3 (10% WI)
Lemba ProspectAddax Estimate:
270 MMbbl for Block
JDZ Block 4 (19.5% WI)
Kina ProspectAddax Estimate:
1,134 MMbbl for Block
JDZ Block 1ERHC does
not haveinterest
JDZ Block 2(22% WI)
Bomu ProspectAddax Estimate:
437 MMbbl for Block
Kina Prospect in JDZ Kina Prospect in JDZ Block 4Block 4
Exploration ImminentExploration Imminent
Operators in three JDZ Blocks in which ERHC has interests have indicated exploratory drilling will
commence in 2009
Full Carry RelationshipsFull Carry Relationships
• ERHC has a full carry in JDZ Blocks 2, 3 and 4
• 100% of ERHC’s upfront costs for exploration and production are covered by our technical partners
• Costs will be paid from a portion of profit oil and cost oil
ERHC’s EEZ InterestsERHC’s EEZ Interests
• 100% interest in up to two blocks of ERHC’s choice
• Option for up to 15% paid working interest in two blocks of ERHC’s choice
• ERHC responsible for proportionate share of costs
EEZ
Strong Technical Strong Technical PartnersPartners
• Addax Petroleum (TSX: AXC and LSE: AXC)– One of the largest oil
producers in West Africa, plus significant production in the Middle East
Strong Technical Strong Technical PartnersPartners
• Sinopec (NYSE: SNP)– Operates an integrated oil
and gas and chemical company in the People’s Republic of China and Hong Kong
’’06 Cash Infusion Provides 06 Cash Infusion Provides Stability, OpportunityStability, Opportunity
JDZ Block Participating interests sold to
Proceeds of sales (millions)
Participating agreement
Block 2: Sinopec and Addax
$20.4
Block 3: Addax $7.5
Block 4: Addax $18.0
Exploration is ImminentExploration is Imminent
• JDZ Block 2Sinopec has secured Joint Development Authority (JDA) approval to drill the Bomu Prospect and the budget is approved
• JDZ Block 3Anadarko has secured JDA approval to drill the Lemba Prospect and the budget is approved
• JDZ Block 4Addax has secured JDA approval to drill the Kina Prospect and the budget is approved
Near-Term Exploration Near-Term Exploration EffortsEfforts
First Half of 2009– ERHC’s technical partners are engaged in a
worldwide search for an available deepwater drill ship
– When secured, expect to commence exploration in early 2009
2009 Exploration Plans 2009 Exploration Plans
Second Half of 2009– Addax and Sinopec
have contracted to take possession of Deepwater drill ship Aban Abraham
Corporate Growth Corporate Growth InitiativeInitiative
Our growth strategy is to build on our success through additional
discoveries of undervalued assets in West Africa
Risk DiversificationRisk Diversification
We will diversify risk by pursuing other growth opportunities by:
– Acquiring revenue-producing assets in diverse geographical areas
– Forging new strategic business partnerships and alliances
Corporate Growth Corporate Growth Action ItemsAction Items
• Leverage technical and geographic expertise
• Examining opportunities:– North America– Europe– Africa
SummarySummary
• You can benefit from ERHC Energy’s vision and determination
• Exploratory drilling is nearly ready to begin• ERHC’s assets are highly prospective• To accelerate growth we are seeking
acquisitions and business partners
Contact InformationContact Information
Mr. David Bovell
Phone: +44-776-873-5695
E-mail: [email protected]
Web: www.erhc.com