ERHC Nigeria Oil & Gas '10 Presentation

Remodeling Nigeria’s Energy Industry for 2020: The E&P Capital Challenge Peter Ntephe (COO, ERHC Energy)

Cautionary 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 U.S. governmental authority 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 hereof. 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.

The E&P Vacuum
Nigerian Petroleum Policy Emphasis: Local Capacity Development
Stunted Progress: operational capacity in exploration and production
Common problem for developing economies

The Constraints
Two constraints
Technical capabilities
Financial capacity
Finance is arguably the paramount constraint
E&P is highly capital intensive

Capital Intensive Pursuit
E&P activities are:
‘ ...characterised by a high level of risk, a long time span before a return on investment is received, a lack of correlation between ... expenditures and the value of any resulting reserves ’
– Wright and Gallun (2008:2)

The Illustration
Nigerian Marginal Field Program
23 marginal fields awarded in 2003
Less than a quarter taken into production
Major complaint has been finance
Limited domestic sources
Limited access to international capital

Accessing International Capital
Credibility challenge for E&P players
International recognition required
Recognizable corporate structures
Corporate governance and accounting
Reporting and disclosure

Case Study
www.erhc.com
Possible precedent for Nigerian E&P players
A model not the [only] model

Introducing ERHC
Incorporated in Colorado and based in Texas, USA
Publicly traded on the U.S. Over the Counter Bulletin Board (OTCBB) – ERHE.OB
Market cap: $250 million - $500million
Valuable E&P assets in the Gulf of Guinea

ERHC in the Gulf of Guinea
Rights in six of the nine blocks of the Joint Development Zone
100% of two blocks and other rights in the Sao Tome & Principe Exclusive Economic Zone
Moving into Nigerian fields

Uniqueness of ERHC
Significant investment by Nigerian business interests
Sensitive to American and Nigerian policies
Subject to international corporate governance standards
Structure and governance recognized by international capital

ERHC Access to Capital I: Equity
Impressive market capitalization on OTCBB
Exploring listing on AIM of the London Stock Exchange for even better capitalization

ERHC Access to Capital II: Carry
‘ Carry’ arrangements with technical partners in 3 JDZ Blocks
Costs of exploration borne
by partners
Cost recovery from
production

Conclusion
Capital for aspiring Nigerian E&P players remains major issue
Aspiring Nigerian E&P players need structures recognized by international capital
ERHC a possible model

Remodeling Nigeria’s Energy Industry for 2020: The E&P Capital Challenge Peter Ntephe (COO, ERHC Energy)

http://www.erhc.com	404
http://erhc.com	13
http://www.slideshare.net	5
http://webcache.googleusercontent.com	3
http://bblearn2.rowan.edu	2
http://translate.googleusercontent.com	2
http://www.theofficialboard.com	1

ERHC Nigeria Oil & Gas '10 Presentation

by Dan Keeney on Feb 24, 2010

Accessibility

Categories

Tags

Upload Details

Usage Rights

7 Embeds 430

Statistics

ERHC Nigeria Oil & Gas ’10 Presentation — Presentation Transcript