I spoke with Geoffrey Plank this morning. Here's the things I asked him about and what I learned from him:
REWORKING OF WELLS: The company currently has 5 wells running, producing 8b/d. Efforts to open more wells have been hampered because of flooding in Texas. The near-term goal is to get 20 wells running using conventional reworking techniques, then use the BAPCO tool, which can increase flow anywhere from 2-8 times. I think he said the average was 3-4 times.
NEW WELL ACQUISITION: The company has not published a number regarding properties they are negotiating to obtain. He did say, however, that Sam Bass is probably considering deals daily. Concerning overseas deals, negotiations are continuing but they do not want to disclose anything because of competition.
PANAMA CANAL VENTURE: Contracts have been signed, but the j.v. is not in operation yet. They still need to put together financing for the deal. It will probably involve ERHC acquiring a piece of Centrum Marine, expected to be 51%. Whatever the income, ERHC would then get 51%.
BASS AMERICAN PETROLEUM: ERHC owns 100% of BAPCO.
8K CONCERNING MIII: Geoffrey believes the $75,000 bond has been delivered. The 8K had to be filed to get the bond. No press release has been put out about this deal because they want to secure the leases first.
8K CONCERNING SAO TOME: ERHC has delivered a $5million performance bond, which is satisfactory to the government of STP. Offices have not yet been openned. They are gathering the studies that have already been done. Still working to obtain the $5million for feasibility studies. They are working on a deal to obtain $19million in debt financing. They have been working on this for 2 months, but still have some administrative hurdles. They also have a source that has verbally committed to $100million in financing, which may involve debt financing, and it may involve the issuance of preferred stock as collateral.
PLUG AND ABANDONMENT: An agreement has been completed with Chevron to do P&A work, but work has not begun. There is no time frame for when the work might start. They are working on building 4 barges for use in P&A work.
ARTICLE IN "UPSTREAM OIL & GAS": He's not sure when it's going to come out. He is going to call the writer today. They may also do a feature article on Sam Bass.
BLUE-SKY: He's not sure when they'll be blue-sky'ed, but he mentioned it could possibly be a week or four weeks.
PAST PRICE DROP: After the reverse merger last fall, the investment banker did not support the company. They may even have been selling their stock. When Sam Bass saw what was happening, he fired everybody and started over again with the current officers. One of the new officers brought in Geoffrey's firm a couple of months ago.
I found Geoffrey to be straightforward and open. The company is very conservative about releasing information. They do not want to release anything that could jeapordize deals, or that may encourage wild speculation in the stock.
I remain bullish on the long-term outlook for the company, but it's going to be a long time before we see significant revenue, and there are a lot of financing deals that have to be worked out. I'll continue to watch the company, and hope that when the speculation and momentum players go away, I can get back in the stock for a long-term hold.
regards,
Mike |
