ERHC Energy Incorporated, an American company with oil and gas assets in Sub-Saharan Africa is seeking approval from Nigeria and Sao Tome & Principe to commence crude oil and gas exploration on Blocks 2, 3 and 4 of the Joint Development Zone (JDZ), which belong to the two countries.
Headquartered in Houston, Texas, ERHC is a publicly-traded American company, with largely Nigerian ownership.
President of the company, Mr. Peter Ntephe said in a letter addressed to the shareholders that the company was also awaiting the decision of the remaining parties to the Production Sharing Contract (PSC).
"The three potential courses of action are entry into Phase 2 of the exploration programme, further extension of Phase 1 or a withdrawal by some or all of the remaining parties from the PSC and relinquishment of the acreage. ERHC intends to remain in the three Blocks and to retain its other interests in the JDZ. We will keep shareholders updated in a timely manner as developments occur," he said.
Ntephe stated that it was anticipated that Production Sharing Contract negotiations related to the company's exploration Blocks in São Tomé and Príncipe Exclusive Economic Zone (EEZ) would be completed by the end of 2012.
"This has not been possible as ERHC and the ANP-STP continues to negotiate diligently a few key terms that remain with a view to making resulting provisions mutually satisfactory and equally beneficial to both sides. We have also continued to explore meaningful farm-in discussions on the EEZ," he said.
"Shareholders will recall that a few days ago, we formally announced the details of a proposed rights offering. If fully subscribed, the rights offering will raise approximately $18.5 million, which will be applied primarily to ERHC's exploration programmes in Chad and Kenya next year," he added.
Ntephe noted that December 17, 2012 was the record date for the Rights Offering.
According to him, each shareholder was entitled to purchase one share of common stock at a subscription price of 7.5 cents per share for every three shares of ERHC stock the shareholder owned as of the close of business on the record date.
"The Rights Offering allows each shareholder to identify with the company's objectives and participate fully in its growth. Of course, no shareholder is obliged to participate in the Offering. A shareholder may also choose to take up some but not all the rights available to him or her under the offering," Ntephe said.