ERHC Energy Inc. 3rd Quarter Conference Call


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ERHC Energy Inc. 3rd Quarter Conference Call

  1. 1. www.erhc.com1
  2. 2. Cautionary StatementStatements 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 2 and the Company’s overall business and financial performance can be found in
  3. 3. Today’s Presenters• Peter Ntephe, president and chief executive officer• Sylvan Odobulu, ERHC’s vice president in charge of operations and financial matters.• Gertjan van Mechelen, ERHC’s senior geoscientist and exploration manager• Dr. Ken Seymour, ERHC’s senior petroleum engineer• Mike Shafie, ERHC’s senior geoscientist.• Dr. Peter Thuo, ERHC’s geoscientist and resident Kenya technical expert• And Reginald Sewell, ERHC’s legal counsel who practices with Warner & Associates3
  4. 4. • As of June 30th, 2012, ERHC had cash and cash equivalents totaling about $8.4 million.• Management believes that these cash assets are sufficient to keep the company going for more than 12 months.• During the third quarter, ERHCs general and administrative expenses totaled slightly over one million dollars, which represented a slight increase compared to the third quarter of 2011.• Detailed financial results are contained in our quarterly report, form 10Q, which was filed on August 8th, 2012. The report is accessible through the investor center on our website.4
  5. 5. I. ERHC’s Interests in the Republic of Kenya5
  6. 6. Briefing: East Africa• Emerging as one of the world’s most exciting, new oil provinces• An estimated 2,000 MMBOE discovered in Lake Albert Rift Basin in Uganda’s Block 1 (EA1)• Large gas discoveries, including the recent Zafarani find, offshore Tanzania 6
  7. 7. Kenya Block 11A • Encompasses 11,950 square kilometers or 2.95 million acres • Situated on Kenya’s border with South Sudan to the north, Block 11B and Lake Turkana to the east and near Kenya’s border with Uganda to the west • In the vicinity of recent significant discoveries7
  8. 8. Recent Exploration Success •Eliye Springs well is in the adjacent Block 10BA •Loperot and Ngamia-1 wells in Block 10BB are also nearbyNorthwest KenyaThe proximity and in-trendrelationship between theLotikipi plain and the AbuGabra Rift basins of southern Regional GeologySudan suggest high oil and The area is dominated by the Cretaceousgas prospectivity Central Africa Rift System (CARS) and the Tertiary East Africa Rift System (EARS) with the associated basin depositional trends Regional GeologySimilar to Uganda Finds Gravity data enabled the delineation of aOperator Tullow estimates the sedimentary basin within the Block 11Adiscoveries may be similar in area below the Lotikipi plain with asize to the Lake Albert Rift Basin basin-fill believed to be in excess ofin Uganda, which are estimated 5,000 metersat 2,000 MMBOE 8
  9. 9. Republic of Kenya • Eliye Springs well is in adjacent Block 10BA • The Loperot and Ngamia-1 wells in Block 10BB are nearby • The Loperot well recovered light paraffinic oil sourced from an excellent type 1 oil-prone lacustrine shale • The Ngamia-1 well has encountered significant oil columns9
  10. 10. II. ERHC’s Interests in the Republic of Chad10
  11. 11. Briefing: Republic of Chad • One of sub-Saharan Africa’s significant crude oil producers • Shares borders with oil producing nations Nigeria, Libya, Sudan and Cameroun • U.S. companies have invested $3.7 billion to develop oil reserves - estimated at 1 billion barrels11
  12. 12. Republic of Chad •Proven Reserves are 1.5 Billion Bbls Source International Petroleum EncyclopediaNiger •Undeveloped Discoveries are 2.6 Billion Bbls, andCNPC largest player 14.6 TCF of GasCurrent Production: ~17,000 bbl/d Source USGS, World Petroleum Resources ProjectUnconfirmed EUR: 1.0 BlnbblContinue to explore Sudan All Fields Key Operators: CNPC & ConsortiumsNdjamena Refinery ERHC BLOCKS Current Production: 465,000 bbl/d Peak Production: 538,000 bbl/d (2011)Operator: CNPC Reserves (remaining): 1.96 Bln bblsCapacity: 20,000 bbl/d expandable EUR: 3.0 Bln bblsto 60,000 bbl/d Key basins: Muglad, MelutOnline Date: June 2011 Wells Drilled: 300Supply: Block H Area II (CNPC) Commercial & Technical Success: 60%Block H Area II Greater Nile Oil ProjectOperator: CNPC (Former EnCana) Operator: GNPOC (Formerly Arakis)Expected Production: ~17,000 bbl/d Current Production: 203,000 bbl/dReserves (remaining): 85 MMbbl Peak Production: 300,000 bbl/d (2004)OOIP: 700 mmbbl (CNPC) Reserves (remaining): 662 MMbblContinue to explore EUR: 1.49 Bln bbl Chad/Cameroon Pipeline Chari Ouest - Doba Basin Operator: Exxon Operator: Exxon (Esso) Capacity: 225,000 bbl/d Current Production: 115,000 bbl/d Utilization: 115,000 bbl/d Peak Production: 220,000 (2004) Distance: 1,070 km Reserves (remaining): 462 MMbbl12 Port: Cameroon loading EUR: 795 mmbbl Expandable by adding pump stations
  13. 13. 13
  14. 14. ERHC’s Exploration Blocks in Chad Block Sq. Km. Acres Working Interest Chari-Ouest III 4,500 1,111,974 50% BDS 2008 16,360 4,042,644 100% Manga 6,77 1,600,501 100%14
  15. 15. Adjacent to Doba Basin Oilfield CHARI-QUEST III BDS 2008 Chari-Ouest 3 BDS 2008 • Consortium led by U.S. majors ExxonMobil and ChevronTexaco • In 2010, had an average daily production of 122,500 ERHC Blocks barrels of crude oil15
  16. 16. Prospectivity of ERHC Blocks• Focus area extends 260 km. and is on trend and east of OPIC discovery and north of Esso discoveries• The ERHC team expects to find at least three prospects with a 30 percent chance of success on ERHC’s blocks• ERHC estimates a combined mean potential of 63 MMBOE and the upside exceeds 332 MMBOE 16
  17. 17. III. São Tomé & Principe Exclusive Economic Zone17
  18. 18. São Tomé &Principe EEZ 18
  19. 19. IV. Nigeria - Sao Tome & Principe Joint Development Zone19
  20. 20. ERHC’s JDZ Interests JDZ Block Current ERHC Interest Block 2 22.0% Block 3 10.0% Block 4 19.5% Block 5 15.0% Block 6 15.0% Block 9 20.0%20
  21. 21. JDZ Exploration • Five-well drilling campaign completed in January 2010 • Over $300m expended JDZ • Biogenic methane gas discovered • Analysis continuing21
  22. 22. IV. Growth through Strategic Acquisitions22
  23. 23. Exile Resources• In July, the remaining regulatory hurdles related to the reverse takeover by Oando Exploration and Production had been cleared• The company has been renamed Oando Energy Resources Inc. and admitted to trading on the Toronto Stock Exchange under the ticker ‘OER’• ERHC continues to hold an interest in the re-formed company23
  24. 24. IV. Fund Raising24
  25. 25. Fund Raising: Rationale• Exploration activities in Kenya and Chad will require considerable investment• The EEZ is also expected to come into the frame of exploration within a few months• Exploration is expected to significantly increase the prospectivity and value of our assets and have a positive effect on shareholder value25
  26. 26. Fund Raising Plans• The Board and management, in conjunction with our financial and legal advisers, have carefully considered ERHC’s available options and formulated a funding strategy that is expected to involve the following: – Rights issuances to existing shareholders – Direct placements to new shareholders or strategic investors – Farm-outs of part of our interests in the assets to interested E&P companies or strategic investors26
  27. 27. Fund Raising: Goals• ERHC is simultaneously continuing work on farm-outs – Involve selling some of the interests in our PSCs to raise money and spread risk by reducing ERHC’s financial obligations on the work programs• We have more exciting assets in view across Africa – Our goal: to become one of the largest holders of exploration acreage on the continent and one of the most successful in exploiting them• We are rapidly making the transition from a passive holder of deep offshore licenses concentrated in one area to a company with a diversified portfolio of onshore and offshore assets across many different countries27
  28. 28. Q&ATo ask a question, call 888-669-0676 (US & Canada) or 201-604-0467 (international) 28
  29. 29. www.erhc.com29