Huge Gains Seen As UpstreamOnline Says ERHE May Win 3 Operatorships In JDZ

Incredibly good news came tonight from the respected Barry Morgan at UpstreamOnline, the premier daily Website of the petroleum industry. Morgan, a veteran, prizewinning reporter who has had the Gulf Of Guineau beat for years, says ERHC Energy is "in line" to get not only its preferential rights in "a raft of blocks", but operatorships in Blocks 2, 3 and 4 with its partners Noble Energy (in Block 4), and Devon Energy and Pioneer Natural Resources in Blocks 2 and 3.

If true it is astounding news, and may account for an unusual statement from the owners of First Atlantic Bank today that said they guarantee a new offering of shares from the bank, which holds 60 million shares of ERHC Energy, will quickly appreciate in value when they hit the market.

The bank's ERHE stock has risen by $12 million since it was acquired in November from ERHC Energy chairman Sir Emeka Offor.

Given the proximity of the awards - late next week, according to the latest estimates - and the confluence of this article with a 2,000-word story Sunday in the Houston Chronicle, the share price could easily reach $0.90 or more by Monday's close. Investors should expect busy trading through the day on Friday.

This was the article published on UpstreamOnline tonight:

Gulf of Guinea hopefuls eye mid-March awards
by Barry Morgan
March 3, 2005, 00:09 GMT

SUITORS tired of the protracted delays in the deep-water licensing round in the Gulf of Guinea between Nigeria and Sao Tome & Principe, hope the way will be cleared for awards by mid-March, writes Barry Morgan.

ExxonMobil has blown hot and cold over its rights to exercise a 25% option in blocks 2 and 4 in the joint development zone and is affecting the timetable for Abuja's plans to licence its own waters.

The supermajor was put on notice last month to exercise its options within a specific time frame. It is believed a quid pro quo deal might yet be forged if ExxonMobil agrees to farm out its rights to make room for independents in exchange for preferential treatment in Nigeria's Exclusive Economic Zone.

US minnow ERHC Energy also has a sliding scale of preferential rights, some free of signature bonus, on a raft of blocks and has bid again on others.

At this stage in the talks, it appears that ERHC would be in line to operate blocks 2, 3 and 4 in joint ventures with its partners, notably Pioneer Natural Resources and Devon Energy on Blocks 2 and 3, and Noble Energy on Block 4.
barry.morgan@upstreamonline.com