ERHC Rises Most in 20 Months on Kenya Block TalksPaul Burkhardt
ERHC Energy Inc. rose the most in 22 months after the independent oil and natural gas explorer said it signed a letter of intent to sell a stake in an exploration block in Kenya.
ERHC gained 35 percent, the most since June 2011, to 7.4 cents at 4 p.m. New York time in over-the-counter trading. The shares have declined 1.3 percent this year.
The company and its unidentified “international oil and gas” partner will negotiate terms of a farm-out agreement for Block 11A, Houston-based ERHC said in a statement today. So-called farm-out agreements usually involve a partner paying for drilling expenses in exchange for a portion of a well’s output. Any contract will be subject to government approval.
Tullow Oil Plc, the U.K. explorer that has found billions of barrels in Africa, said in November it had made a second discovery in Kenya, raising prospects that East Africa’s biggest economy will become an oil producer.
ERHC signed a production-sharing contract with the Kenyan government for the 11,950 square-kilometer (4,600 square-mile) block in July, the company said. Block 11A is located on the border of South Sudan.
Daniel Keeney, a spokesman for ERHC, didn’t respond to an e-mailed request to identify the partner.