10 Oct 2014 – ERHC Energy [OTC: ERHE], an American exploration stage oil and gas firm with assets in Kenya and Chad, is in discussions with private investors for supplemental capital, a company spokesperson told this news service.
Eliecer Palacios, CEO of New York energy investment firm PetroRock Energy, told this news service that it was looking at opportunities with a US company holding assets in the two African nations. The only American company with assets based in Kenya and Chad is the Houston-based ERHC Energy.
The ERHC spokesperson confirmed that the company was talking with private equity funds, adding, “These talks are preliminary in nature but management believes a significant private equity investor could represent an important source of funding to help meet the company’s long-term obligations.”
PetroRock Energy, which is 18 months old, has about USD 200m in capital commitments from five individual investors, said Palacios. In addition to ERHC, the company is also in discussions with two private energy services companies based in Mexico, he said.
In the context of ERHC, he said it is an exploration company that needs to drill wells, then prove-up and farm-out.
PetroRock is hoping to close one of the deals by the end of the year. It is looking to deploy between USD 10m to USD 20m for each deal. The firm would employ a five-year exit plan, said Palacios. PetroRock will be looking to take non-controlling stakes of below 51% in the deals it completes, said Palacios.
The firm has in-house technical advisers to assess potential partners. Deal leads come from relationships with people in the industry, said Palacios. PetroRock’s legal adviser is Haynes and Boone.
ERHC has a market capitalization of USD 32.1m.
by Katie McQue