HOUSTON, Feb. 17, 2015 (GLOBE NEWSWIRE) -- 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. Kenya Block 11A – The exploration team is making steady progress toward drilling during the current "First Additional Phase" of exploration. 2D seismic mapping has been completed. To date, over a dozen structural prospects and leads have been identified and supported. The parties' technical team is calculating volumetrics for identified prospects and leads in the Block, which will help determine the location of the first well.
Our 2015 work program includes securing the requisite drilling rig, determining the location for drilling the first exploration well, completing an Environmental Impact Assessment for the drilling location and developing the well design. The work program is underway with long lead items for well operations already tendered. Drilling of the first exploration well is expected during the first quarter of 2016, if all conditions precedent are met.
ERHC currently holds a carried 35 percent interest in Block 11A, which is operated by CEPSA with a 55 percent interest.
We continue to work with Deloitte Corporate Finance LLC (DCF) on a further farm-down of our interest in the Block. Selling stakes in acreage to other companies is common practice in the oil industry to spread risk and exploration and development cost. DCF's involvement continues to assist this process.
2. Chad Block BDS 2008 – ERHC's exploration team has commenced planning toward 2-D seismic acquisition. The information gathered through an airborne gravity/magnetic survey of the Block in Southern Chad proved to be a significant improvement on prior data. ERHC's sub-contractor, Bridgeporth Ltd., a specialist geosciences company, completed the survey during the fourth quarter of 2014, confirming the preliminary leads and revealing additional targets. To view an image from ERHC's Chad survey, click: http://erhc.com/media/files/files/41359672/ERHC-Chad-Survey.jpg.
Interpretation of the survey reveals the following:
- The study confirmed the graben edge in the southwest portion of the survey.
- Two regional lines were recorded to the east in a north-south orientation. These suggest the possibility that there may be a previously unrecognized rift basin in the north east portion of BDS 2008.
- In general, the aero gravity and magnetic data showed three dominant trends; East-west associated with the Doseo, Doba and Bongor grabens and a conjugate set of fabric oriented NE-SW and NNW-SSE.
- The time structure map at the top Lower Cretaceous objective extends into BDS 2008 giving rise to the faulted Leads A and B (in Focus Area 2) with maximum closure areas of 44,000 and 15,600 acres respectively.
- Based on the survey, total PIIP for Focus Area 2 alone in a best case scenario has been estimated at 278 million barrels (with a high case of 876 million barrels). It is expected that estimates for ERHC's two focus areas might be even further enhanced by seismic work, the next activity in the work program.
ERHC currently holds a 100 percent interest in BDS 2008. As we did with the JDZ and Kenya Block 11A, ERHC continues to explore a farm-out to spread risk. The Chad acreage is also within the scope of DCF's engagement and we continue to work with them to find suitable farm-out or joint venture partners.
3. São Tomé and Príncipe Exclusive Economic Zone (EEZ) – ERHC is currently working with the National Petroleum Agency of São Tomé and Príncipe (ANP-STP) to complete the budget for the first year of its exploration work program.
Concurrently, the Company continues to review the viability of its two offshore Blocks in the EEZ, particularly given the prevalent downturn in global oil prices.
As shareholders are probably aware, the drop in oil prices has tempered the enthusiasm among International operating companies (IOCs) for deep offshore exploration, especially in frontier areas. We continue to hold discussions with prospective partners, including an IOC to whom ERHC in December granted first right of refusal for a farm-out for a period of six months.
A preliminary examination of available 2D seismic data indicates the possibility of commercially sizeable Cretaceous deep water tubidite fan existing in Block 11. While further investigation is in process, ERHC's exploration team believes it has the potential for holding enormous hydrocarbon resources.
4. Oil & Gas Industry – For the first time in many months, oil prices have moved up in recent days but still remain more than 50 percent below prices as late as June last year. With oil inventories at historic highs, the oil exploration industry remains in a state of flux. Many IOCs have slashed exploration budgets for 2015 and exited exploration acreage completely. Junior exploration companies like ERHC have are now significantly challenged to raise exploration funding either by farmouts or issuance of corporate equity.
ERHC is, however, working hard to attract new strategic investors who can bring not just significant new funding but also new synergies to revitalize the Company's business plan. We believe that current market conditions provide a unique opportunity for a savvy investor interested in African exploration, and oil and gas generally, to acquire a significant stake in ERHC for a price that would have been a bargain just a few months ago.
Those with questions are encouraged to reference the Company's SEC filings, which are available at http://erhc.com/secfilings/ or contact Daniel Keeney, ERHC's investor relations representative, at dan@dpkpr.com.
Sincerely,
Peter Ntephe
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.
Cautionary Statement
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.