ERHC Energy Inc. (OTCMKTS:ERHE) has yet again turned green for no apparent reasons to support the stock’s upward journey. The only piece of information available from the company’s end is its outdated update to the shareholders, which was issued back in the month of April’ 2015.
In the update, the company mentioned the success in identifying Tarach-1 at the Kenya Block, which is set to become the first exploration well for the company. The company’s decision is based on interpretation of 1,086.6 Kms of 2D seismic data, which was generated by the company’s operating partner CEPSA and ERHC. Also, the interpretation led the exploration team to identify as many as 13 drillable prospects and other leads present in the Tarach basin. The company assumes that the basin can generate over 645 million barrels of resources. In view of the results, the company has already initiated the preparations for drilling and tendering.
The company also detailed out the plans with respect to its Chad Block BDs 2008 and Sao Tome and Principe Exclusive Economic Zone (EEZ), whereas it assured that the Deloitte Corporate Finance LLC (DCF) is constantly engaged in the marketing of farm-outs for the company’s assets. Though the company tried to reassure investors about the progress, but it is worthy to note that the company had last promised to start drilling in Sao Tome eighty-five months back and nothing tangible has been done so far.
Poor finances and toxic debt
At the same time, the financial report of ERHC Energy Inc. (OTCMKTS:ERHE) too is less inspiring. For the period ended in March, the company held $1.5 million in cash and $2.3 million in current assets. The current liabilities of the company are $1.1 million while its quarterly net loss stands at $1.9 million. The company’s financial numbers are too poor to convince about anything positive soon.
Over and above this, the company overlooks to the toxic debt of $808,000 in the form of convertible notes that can be converted into stock at nearly 40% to 45% discount. It is not wrong to conclude that ERHC Energy Inc. (OTCMKTS:ERHE)’s situation is far from rosy, at this point of time. The stock of the company surged by more than 46% to $0.00190 as 89 million shares changed hands.