ERHC Energy Inc. (ERHE.OB) stock closed 1.89% higher and reached $0.27 per share on Sept. 30. Volume rose sharply to 942 thousand shares traded during the session.
The same day, ERHE.PK promulgated that the Joint Development Authority has approved a 6-month extension of Exploration Phase I to the operators of Blocks 3 and 4 of the Nigeria Joint Development Zone. The company owns a 10.00% interest in JDZ Block 3 and 19.05% in Block 4. This news seems to be the impetus, which drove ERHE stock price up yesterday.
ERHC is an independent oil and gas company, which has assets in the Gulf of Guinea, near central West Africa. For the first half of 2010 the company’s assets have decreased by $3.4 million, while liabilities have increased by $77 thousand. The total accumulated deficit amounts to $72 million.
An S3/A form filed by ERHE indicates numerous risk factors in regard to the investment in the company’s securities, some of which are listed below:
* The company has “no sources of revenue, a history of losses” and cannot assure that it “will be profitable in the foreseeable future”.
*ERHE.PK has “a limited operating history in the oil and gas industry”.
* Additional financing may be needed.
* The company’s interest are subject to the volatility of foreign governments, viz. The Nigerian government.
* The discovery of commercially productive reserves in the JDZ is not certain.
As the prospects of ERHE for finding stable income sources are still vague, noting is left for the investors, except for being cautious when they plan to invest in the company.
