Check it out everyone!!! Very exciting info I found on ERHC!!!
We could have a very nice upcoming week.... One is the most recent update by Bay Street Bytes on ERHC and the other is a NY times article that I think is from this weekend(I am trying to confirm this) regarding the huge potential of the Gulf of Gunieu region and specifically mentions ERHC. If this article is from this weekend watch out Monday!!!!
*BAY $TREET BYTE$* March 5 # 2: ENVIRONMENTAL REMEDIATION
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ERHC,NASDAQ: $1.50
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(Featured July '97 $ $0.92)
A late-in-the-day news release from ERHC announces the company is preparing
to begin its Offshore Fuel Service with joint venture partner Central
American Marine Services Inc. (CENTRAM). In last week's announcement of a
US$10 million financing agreement, ERHC said it would proceed immediately to
place the Panama Canal Fuel Concession into operation. Today's release
provides details on just what the Panama JV will mean for the company and
its shareholders.
CENTRAM Marine has a 10 year concession, granted by the Executive Committee
of the National Port Authority, to provide fuel service and other supplies
such as drinking water, food, spare parts, chemicals, accessories and tools
to vessels, by means of barge. Revenue projections provided in the news
release are for fuel services only; revenues from the sale of additional
items could increase to these numbers substantially.
The CENTRAM/ERHC Joint Venture has an important market advantage: it will
operate as a sea-going or offshore fuel concession, bringing supplies
directly to the vessels. Customers "can be refueled without having to
employ the costly and time-consuming task of being towed and tied to a pier
for refueling." Existing concessions are land-based. Fuel sale estimates
were based on average per day sales for current concessions but it is
possible the convenience of offshore services will attract greater than
average demand.
In addition, because of the added convenience and cost savings provided, one
can likely assume the JV will receive at least the current mark-up of $0.08
per gallon of bunker fuel, therefore generating $40,000 per day at start-up,
which translates to net operating profits of $6,740,333 per year (using
startup delivery of 500,000 gallons per day, although this is expected to
double by year end).
In short, the Panama concession should soon provide a continuous flow of
cash to ERHC upon startup and annual earnings which alone make this a very
undervalued equity.
ERHC has an excellent website (www.erhc.com/) which anyone interested in
this company should visit. There the company describes the Panama Canal
Concession in greater detail as well as plans for providing Marine Charter
Services, or offshore logistical support, to oil platforms operating in the
Gulf of Mexico.
Press Release:
"ERHC To Begin Panama Canal Offshore Fuel Service
LAFAYATTE, La.--(BUSINESS WIRE)--March 5, 1998--Environmental Remediation
Holding
Corporation (ERHC OTC: BB) announced that it has entered into a joint
venture agreement with
Centram, S.A., a Panamanian Corporation, to supply fuel and other supplies
to vessels transversing the Panama Canal from the Caribbean Sea (Atlantic
Ocean) side of the Canal. Centram was granted a ten (10) year concession
from the Panama Canal Commission (''PCC''), to supply the fuel and will
receive 33-1/3% of this joint venture for the contract. ERHC, in exchange
for 66-2/3% of the net profits, will supply a tug boat and a 30,000 barrel
(1,260,000 gallons) fuel barge. ERHC is currently negotiating the lease of a
barge and tug for this project.
Marine traffic crossing the Panama Canal is at an all time high. The PCC has
committed One Billion ($1,000,000,000) USD to upgrade and improve the Canal
in anticipation of a further increase in vessel traffic. Approximately
forty-five (45) ships pass through the Colon side of the Canal daily and
1996 statistics demonstrate fuel sales of over five (5) million gallons per
day. The current concession holders are land based operations which require
vessels to be piloted and towed to land based refueling stations. ERHC's
operation will permit vessels to remain offshore for refueling.
''Bunker'' fuel, as it is known in the industry, currently sells for
approximately $0.50 per gallon with a historical average mark-up of $0.08
per gallon. ''ERHC conservatively anticipates,'' as stated by Noreen Wilson,
ERHC's Chief Financial Officer, ''sales of 500,000 gallons per day at the
start of the program, increasing to one (1) million gallons by the end of
the first year of operation. Assuming a conservative markup of only $0.04
per gallon, ERHC anticipates gross sales on 500,000 gallons to be in the
range of $250,000.00 per day resulting in a gross profit of $20,000.00 per
day. ERHC's net operating profit after payment of a three (3%) percent
concession fee on gross sales and operating costs is anticipated to be
$5,133.00 per day (approximately $1,873,666/year) or a 65.7% yearly return
on its investment. Assuming ERHC/Centram is able to sell its fuel at the
$0.08 per gallon mark-up, gross operating profits could potentially generate
$40,000 per day at start up resulting in a net operating profit to ERHC of
$18,466 per day (approximately $6,740,333 per year) and a 236.5% annual
return on investment. These amounts could potentially double by the end of
the first year of operation, as the amount of fuel supplied rises to one
million gallons per day.'' (The following are examples of potential yearly
net profits to ERHC: Sale of 1,000,000 gallons per year @ $0.04 per gallon
yields approximately $4,900,000; and, if sales reach 1,000,000 gallons @
$0.08 per gallon per year, potential profits could be realized in the amount
of $14,600,000).
''This joint venture,'' remarked Sam Bass, Jr., ERHC's CEO, ''marks a major
turning point for
ERHC. With profits from the Panama project, ERHC will derive a positive cash
flow for the benefit of the Company's shareholders and to further the ERHC
name in the oil and gas industry.''
The project will be managed by Mr. Charles Briley, founder and CEO of
Centram, S.A. Mr. Briley has 38 years of experience in operating maritime
industries. He is one of the founders and former Director and Senior Vice
president of Offshore Logistics, Inc. the second largest international
marine transport company and fourth largest helicopter company supporting
the offshore oil and gas industry. Mr. Briley has managed the coordination
of over 55 vessels in the Gulf of Mexico and organized and controlled 55
vessels in the Singapore region while working for Offshore Logistics, Inc.
before retiring.
''This is a wonderful and profitable opportunity for ERHC and Centram,''
remarked Mr. Briley,
Centram's CEO, ''and I am very pleased to be once again working with Sam
Bass. ERHC is a
growing company and this joint venture will add to ERHC's 'cradle to grave'
approach in the oil and gas industry.''
Environmental Remediation Holding Corp. is engaged in oil and gas production
activities and
environmental remediation, both domestically and internationally. This
includes the development and rework of oil and gas properties, plug and
abandonment services (P&A), environmental engineering and consultation,
hazardous waste management (including NORM waste), non-hazardous waste
clean-up, transportation and disposal, and the manufacture and distribution
of waste clean-up materials.
For more information concerning ERHC, please visit our website at www.erhc.com.
Certain matters discussed in this news release are forward-looking
statements, as it is defined in the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are subject to a number of known
and unknown risks and uncertainties including, but not limited to,
fluctuations in the price of crude oil and natural gas, the success taught
of exploration efforts, the timeliness of development activities in Texas,
Utah, and the Gulf of Guinea, West Africa, changes in the political and
economic environment in which ERHC has international operations, as well as
availability of human and financial resources; which may cause actual
results to differ materially from those expressed in any forward-looking
statements made by on or behalf of ERHC.
Contact:
Darryl Hackman
GFC
561-655-7575
or
Cynthia DeMonte
212-473-3700
e-mail: cdemonte@aol.com
or
James Griffin
Corporate Secretary
Environmental Remediation Holding Corp.
516-433-4730
*BAY $TREET BYTE$* March 8 ENVIRONMENTAL REMEDIATION
ERHC,NASDAQ BB: $1.50
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(Featured July '97 @ $0.92)
ADDING TO WEST AFRICAN PROSPECTS &
A NEW YORK TIMES ARTICLE ON 'THE BONANZA' IN THE GULF
We haven't heard much news lately about ERHC's enormous 'blue sky' project
in West Africa. Reporters from "Upstream Oil & Gas" seem to have the most
recent scoop. An article dated February 27 states a top level team from
ERHC "will head for West Africa in the second week of March to sign up fresh
acreage and assess opportunities in Ghana, Togo and Cameroon." It seems
other West African governments have been impressed with ERHC's "landmark
deal with the micro-state of Sao Tome & Principe and its innovative,
development-oriented approach to exploration and production." Sam Bass Jr.,
CEO of ERHC, has a 'leave it better than you found it' philosophy in his
business dealings which I personally find very appealing (and wish many
members of the investment community shared). This philosophy is what won
ERHC participation in the largest exploration concession in the Gulf of
Guinea last year, and that territory may now be expanded to include on and
offshore resources of the three above-named countries as well.
ERHC is now setting its sights on Ghana's last remaining off-shore acreage:
the Saltwater/Central Basin Tract. Ghana is the first stop for ERHC, whose
team will include a 'reserves and asset management' expert from Unocal. The
object is to finalize a memorandum of understanding for the
Saltwater/Central Basin, which was delayed before Christmas. The shallow
Saltwater oilfield is located close to shore and lies in a tract that
extends out to very deep water (3000').
Apparently ERHC has been asked to help with "institution, building and
skills expansion within the ministry and national oil company similar to the
brief it holds for the government of Sao Tome." ERHC is an exceedingly
unique company in the oil and gas field; its senior managers are one of a
kind. The reason ERHC has the opportunity to explore the largest
geographical area in the Gulf of Guinea, in partnership with Sao Tome, is
because the company is willing not only to help underdeveloped countries
develop their natural resources, but help them do so in such a way as to
maximize benefits for the entire population. These west African countries
need more than a windfall from the sale of their commodities. They need
hospital, schools, transportation infrastructure, environmental safeguards
etc. and a plan to use resources in the most constructive way for all.
Whether or not negotiations in Ghana will go as smoothly as they did in
SaoTome is another question. The Upstream article seems to indicate there
may be some opposition by some factions.
In Togo, ERHC will be assessing the country's "entire offshore play... It
will focus on test well data from the Union Carbide discovery" drilled
approximately 20 km offshore. Togo is also interested in examining a joint
venture similar to the one ERHC has with Sao Tome "managing the risk and the
benefits on behalf of the country, setting up environmental laws and
attracting investment in exchange for exploration rights." ERHC is not the
first company to approach this country, where the government recently
revised its exploration strategy after two independents let 1-year drilling
permits expire "without the promised drilling activity." New legislation is
to be passed in Togo this month and the ERHC team likely still has its work
cut out for it here.
According to the article, the final stop will be the Cameroon's, where "the
company hopes to land two secondary oil permits on-shore ."
SATURDAY NEW YORK TIMES:
Thanks to a US reader I have a copy of a New York Times article (Saturday,
Business section) entitled "West Africa's New Oil Barons". The article
focuses on Equatorial Guinea: "Equatorial Guinea Joins the Region's Bonanza"
but also provides information on the area as a whole, illustrating just how
quickly this area is developing as a major oil and gas exploration play.
The article is too long to retype; some readers may have access through the
Internet to the Times.
Showing how quickly some of these small African nations are reaping the
benefits of offshore development, the article begins: "Last year alone,
offshore petroleum production, which was begun here only recently by the
Mobil Oil Corporation, earned this poverty stricken country an estimated
$100 million..." This was a result of a single deep-water field, Safiro,
producing 80,000 BOPD and projected to grow steadily: "Safiro doesn't even
represent one-tenth of the potential production of Equatorial Guinea. Mobil
and other companies are already scrambling for the rights to explore for
more deposits on deep-water blocks nearby." Although off-shore exploration
and drilling is expensive, it is the huge size of the deposits which is
attracting the majors. ERHC expects to attract similar investment in
regions offshore Sao Tome. Sam Bass Jr. and Jim Callender (COO of ERHC) are
no strangers to any of the world's major oil companies and investors can
assume preliminary discussions have already taken place.
The following are other interesting quotes selected from the Times article,
written by Howard W. French:
"Over the next twenty years, industry experts say Western oil companies will
invest between 40 billion and $60 billion in the Gulf of Guinea alone."
"The geological evolution of this region has produced a fortuitous
combination of all the right ingredients required for big oil fields, said
Art Green, production manager fro Mobil in Equatorial Guinea. Jean-Francois
Gavalda, an expert with Elf Aquataine, France's largest oil company, was
even blunter: "The potential here is enormous. There are new discoveries
every two or three months, and that is why all the oil companies want to be
here."
"Last year in the space of six months, Elf announced the discovery of two
major offshore fields in Angola ... each of which could ultimately prove to
contain a billion barrels or more of oil, according to industry experts."
There follows a description of some of the political turmoil that is rampant
in many of these West African countries that tends to strengthen ERHC's
notion that the Democratic Republic of Sao Tome and Principe (DRSTP) is an
ideal location for a Logistics Support Centre in the area. ("In addition to
their vast oil reserves, all the Gulf of Guinea producers share the traits
of authoritarian government.") If the Gulf of Guinea is indeed turning into
one of the world's hottest oil and gas exploration zones, the development of
such a centre would likely be welcomed by all participants.
Just to review previous information, ERHC's joint venture with DRSTP,
"STPETRO", was amended by both parties to stipulate that STPETRO, in
addition to being in charge of the development of all DRSTP's oil and gas
reserves, will be in charge of the development of a seaport, off-shore
logistics centre and the expansion of the DRSTP airport. DRSTP is ideally
located and has the necessary political stability for the development of a
commercial logistics support centre to service all of the Gulf of Guinea
region - a 'Safe Harbour'. There is huge economic value in a logistics
support centre. Development of a deep-water sea port with dry-dock
facilities, an expanded airport for landing and refueling and the
establishment of a bas or 'logistics centre' from which major companies in
the area would work could all be enormously profitable, even dwarfing
revenues and earnings from successful oil production.
Perhaps I am somewhat biased, but the complete ERHC/DRSTP story would have
made for better reading than this one on Equatorial Guinea. Even the most
recent details of ERHC's Panama Canal refueling concession have all the
elements of a great story. ERHC investors patiently await announcements of
new remediation contracts, drilling results in Texas, results of new seismic
testing in the Gulf of Guinea, start-up of offshore refueling in the Panama
Canal, and so much more. Why this stock continues to trade under US $2 is a
mystery to many. |
