Israeli companies to explore the EEZ?

There was an intriguing article  with the title

Israelis hit the jackpot

Two Israeli companies as yet unknown in African oil circles were awarded the most promising block in the latest auction in Sierra Leone’s offshore . ..

Which may have been easily overlooked as not especially of interest to investors in ERHE. Yet hidden in the content was a connection with ERHC.

For this reason I suggest subscribing in this journal, which often gives great information.

It was reported that one of the two companies which scored a block in Sierra Leone, and Israeli company, is also negotiating for exploration interest in the EEZ of São Tomé and Príncipe where ERHC has two massive 100% blocks and two optional 15% blocks.

I can't say whether or not they are negotiating to enter ERHC's blocks, but we should keep in mind two things.

1. ERHC has two of the choicest blocks and in the STP EEZ and is actively seeking farm-in partners.

2. The start of exploration anywhere in the EEZ will help generate interest which could positively impact the EEZ as a new exploration area.

It could be just like Kenya where there was previously little interest and plenty of blocks on offer. Only some small companies like Africa Oil and ERHC acquired blocks. Everything changed when Tullow did a farm-in to Africa Oil's block and made the major Ngamia-1 discovery. All of the sudden Kenya became the hottest place for oil and gas exploration and it became easy to find JC partners.

Something similar could occur in the EEZ once exploration commences. It could start in ERHC 's blocks, or it could start in an adjacent block.

It is a game of patience as in the case of ultra-deepwater ERHC needs JV partners. This small company has a history of successfully attracting operators, as in the case of the JDZ which saw ERHC attract the most drilling to date.

A similar result in the STP EEZ could have major impact on ERHE which is currently trading around 10 cents. Recall that it ran up to 90 cents as good targets were identified and drilling approached.