Joint Development Zone

ERHC has interests in six of the nine Blocks in the Joint Development Zone (JDZ), a 34,548 sq km area approximately 200 km off the coastline of Nigeria and São Tomé & Principe that is adjacent to several large petroleum discovery areas. ERHC's rights in the JDZ include:

  • JDZ Block 2:  22.0%
  • JDZ Block 3:  10.0%
  • JDZ Block 4:  19.5%
  • JDZ Block 5:  15.0%
  • JDZ Block 6:  15.0%
  • JDZ Block 9:  20.0%
In early 2008, Addax Petroleum, an experienced exploration and production company that has participation agreements with ERHC in JDZ Blocks 2, 3 and 4, and is the operator of JDZ Block 4, publicly disclosed seismic images and maps showcasing the prospectivity of its JDZ interests. Addax has authorized ERHC Energy to feature some of the JDZ-related images to better inform the investor community.

Operations in JDZ Block 2

ERHC's consortium partner Sinopec Corp. is the operator in JDZ Block 2. In August 2009, Sinopec commenced exploratory drilling of the Bomu-1 well, which was completed in early October 2009. The well was drilled to a total depth of 3,580 meters. Pre-drill, 13 individual sands were targeted and eight sands were found to contain biogenic methane gas. Analysis of drilling data is ongoing. The NSAI report estimated ERHC's unrisked prospective resources in JDZ Block 2 totaled 77 million barrels of oil and 93.9 billion cubic feet of natural gas (P50). The NSAI report estimated ERHC risked prospective resources in JDZ Block 2 totaled 38.3 million barrels of oil and 47.9 billion cubic feet of natural gas (P50).  

Operations in JDZ Block 3
 
The operator, Addax Petroleum, began drilling the Lemba-1 well in October 2009 and completed drilling in November 2009. The well was drilled to a total depth of 3,758 meters. Prior to drilling, the exploration team targeted eight individual sands and two were found to contain biogenic methane gas. Analysis of drilling data is ongoing. The NSAI report estimated ERHC's unrisked prospective resources in JDZ Block 3 totaled 27.3 million barrels of oil and 32.9 billion cubic feet of natural gas (P50). The NSAI report estimated ERHC risked prospective resources in JDZ Block 3 totaled 8.7 million barrels of oil and 10.5 billion cubic feet of natural gas (P50).

Operations in JDZ Block 4

ERHC's consortium partner Addax Petroleum is the operator of JDZ Block 4.  In 2009 and early 2010, Addax Petroleum drilled the Kina 1x, Malanza-1 and Oki East wells. The Kina 1x well was drilled to a total depth of 3,750 meters. Prior to drilling, the exploration team targeted 10 sands, and found biogenic methane gas in three. The Malanza well was drilled to a total depth of 4,196 meters. Pre-drill, nine sands were targeted and two contained biogenic methane gas. The Oki East well was drilled to a total depth of 3,873 meters. Pre-drill, 10 sands were targeted and three contained biogenic methane gas. Analysis of drilling data is ongoing. The NSAI report estimated ERHC's unrisked prospective resources in JDZ Block 4 totaled 231.6 million barrels of oil and 245 billion cubic feet of natural gas (P50). The NSAI report estimated ERHC risked prospective resources in JDZ Block 4 totaled 88.4 million barrels of oil and 86.2 billion cubic feet of natural gas (P50).

Estimated Resources  

In 2009, the independent engineering firm, Netherland, Sewell & Associates, Inc. (NSAI) released a Resources Assessment for ERHC that examined unrisked and risked prospective resources for JDZ Blocks 2, 3 and 4. The NSAI report estimated ERHC's unrisked prospective resources in those JDZ Blocks totaled more than 336 million barrels of oil and 372 billion cubic feet of natural gas (P50). The NSAI report estimated ERHC risked prospective resources in JDZ Blocks 2, 3 and 4 totaled 135.5 million barrels of oil and 144 billion cubic feet of natural gas (P50).


Background on the JDZ
 
In the spring of 2001, the governments of São Tomé & Principe and Nigeria reached an agreement over a long-standing maritime border dispute. Under the terms of the agreement, the two established the Joint Development Zone to govern commercial activities within the disputed boundaries.
 
Oversight of the JDZ
 
The JDZ is administered by a Joint Development Authority (JDA) which oversees all future exploration and development activities in the JDZ. The remaining claimed territorial waters of São Tomé & Principe are known as the Exclusive Economic Zone (EEZ).

Revenue Split

Revenues derived from the JDZ will be shared 60/40 between the governments of Nigeria and São Tomé & Principe, respectively.
 
More on ERHC Energy's operations:
 
Republic of Kenya. ERHC has a Production Sharing Contract (PSC) with the Government of the Republic of Kenya on Block 11A in northwestern Kenya. The Block is in the vicinity of Block 10BB in which significant oil discoveries have recently been announced. East Africa has emerged in recent years as one of the most exciting, new oil provinces in the world with the discovery of over 1 billion barrels of recoverable oil in Uganda’s Block 1 (EA1), the Ngamia-1 oil discovery in Kenya, which is estimated to be bigger than the Ugandan discovery, and large gas discoveries, including the recent Zafarani find, offshore Tanzania. For more on ERHC's operations in Kenya, click here.
 
Republic of Chad. ERHC has interests in Block BDS 2008 in the Republic of Chad. The government of Chad formally awarded the company the oil block for exploration and development in June 2011. A Production Sharing Contract was signed in July 2011. Chad is one of sub-Saharan Africa’s significant crude oil producers with proven oil reserves of 1.5 billion barrels. It share borders with Nigeria, Cameroun and Sudan, which all produce oil as well. For more on ERHC's operations in Chad, click here.
 
São Tomé & Principe’s Exclusive Economic Zone (EEZ). The government of São Tomé & Principe has awarded ERHC rights to participate in exploration and production activities in São Tomé & Principe’s Exclusive Economic Zone (EEZ), which encompasses an area of approximately 160,000 square km. For more on ERHC's operations in the EEZ, click here.
 
 
Cautionary Note to U.S. Investors - The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms on this Web site, such as "recoverable reserves potential," that the SEC's guidelines generally prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 10-K. You may review our filing with the SEC at the following Web site: www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000799235.