This is the presentation delivered by ERHC Energy Inc. President and CEO Peter Ntephe at the 14th UNCTAD Africa Oil, Gas & Minerals Trade & Finance Conference in Sao Tome.

1. Oil and Gas Value Creation and Retention in AfricaOil and Gas Value Creation and Retention in Africa
Peter NtephePeter Ntephe
Chief Executive Officer, ERHC Energy IncChief Executive Officer, ERHC Energy Inc
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2. Cautionary StatementCautionary Statement
Statements during this presentation may concern ERHC Energy Inc.’s future operating milestones, future drilling operations, the
planned exploration and appraisal program, future prospects, future investment opportunities and financing plans, future
shareholders’ meetings, response to U.S. governmental authority and related proceedings, as well as other matters that are not
historical facts or information. Such statements are inherently subject to a variety of risks, assumptions and uncertainties that
could cause actual results to differ materially from those anticipated, projected, expressed or implied. A discussion of the risk
factors that could impact these areas and the Company’s overall business and financial performance can be found in the
Company’s reports and other filings with the Securities and Exchange Commission. These factors include, among others, those
relating to the Company’s ability to exploit its commercial interests in the JDZ and the exclusive territorial waters of São Tomé
and Príncipe, general economic and business conditions, changes in foreign and domestic oil and gas exploration and production
activity, competition, changes in foreign, political, social and economic conditions, regulatory initiatives and compliance with
governmental regulations and various other matters, many of which are beyond the Company’s control. Given these concerns,
investors and analysts should not place undue reliance on these statements. Each of the above statements speaks only as of the
date of hereof. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to
any forward-looking statement to reflect any change in the Company’s expectations with regard thereto or any change in events,
conditions or circumstances on which any of the above statements is based.
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3. Theme of ConferenceTheme of Conference
• Natural Resources Development: Value Creation and
Retention
• How do we retain the value created by the development of Africa’s
natural resources? To develop [Africa’s] resources in a sustainable
manner, countries need sound pro-development domestic policies.
Good regulation is not the only precondition. It is also necessary to
build beneficial relationships with the various stakeholders in the natural
resource extraction process
– http://www.unctad.org/
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4. Old Model: RevenuesOld Model: Revenues
• Oil and Gas Exploration and Production
(E&P) : Epitome of Extractive Industries
• Old model in Africa: Extraction by foreign
companies; share of revenue to African
governments
• Limited local value creation/sustainability
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5. New Model: LocalNew Model: Local
ContentContent
• Emerging Model in Africa: Local Content
• Local content laws in many countries (Angola,
Equatorial Guinea, Gabon, Nigeria, etc):
– Use of Indigenous Manpower
– Use of Locally-sourced Material
– Reliance on local business
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6. The ConstraintsThe Constraints
• Two Constraints for African Participation
– Technical Expertise
– Financial Capacity
• Finance is arguably the paramount constraint
• E&P is highly capital intensive
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7. Capital Intensive PursuitCapital Intensive Pursuit
• E&P activities are:
‘...characterised by a high level of risk, a long
time span before a return on investment is
received, a lack of correlation between ...
expenditures and the value of any resulting
reserves’ – Wright and Gallun (2008:2)
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8. The IllustrationThe Illustration
• Nigerian Marginal Field Program
– 23 marginal fields awarded in 2003
– Less than a quarter taken into production
• Major complaint has been finance
– Limited domestic sources
– Limited access to international capital
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9. AccessingAccessing
International CapitalInternational Capital
• Credibility challenge for African E&P players
• International standards required
– Accepted corporate structures
– Corporate governance and accounting
– Reporting and disclosure
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10. New Thrust of LocalNew Thrust of Local
Content?Content?
• Ownership of foreign companies
– Through concerted action on international equity markets
• Market-based investment in foreign parents
• No expropriation of local subsidiaries of foreign parents
– Complementary to other two thrusts
• Avoids ‘re-inventing the wheel’
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11. Case StudyCase Study
www.erhc.com
Possible precedent for African E&P players
A model not the [only] model
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12. Introducing ERHCIntroducing ERHC
• Incorporated in Colorado and based in Texas, USA
• Publicly traded on the U.S. Over the Counter
Bulletin Board (OTCBB) – ERHE.OB
• Market cap: $150 million - $500 million
• Valuable oil and gas assets in the Gulf of Guinea
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13. ERHC in the Gulf ofERHC in the Gulf of
GuineaGuinea
• Working interests in six of the
nine blocks of the Joint
Development Zone
• 100% of two blocks and other
rights in the Sao Tome &
Principe Exclusive Economic
Zone
• Exploring other opportunities in
the Gulf of Guinea
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14. Uniqueness of ERHCUniqueness of ERHC
• Market-based acquisition of control of American parent
by African interests
• Reverses usual trend of ‘foreign’ investment
• Equally sensitive to both Western and African policies
• Subject to international corporate governance standards
• Structure and governance recognized by international
capital
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15. ERHC Result: JDZERHC Result: JDZ
Exploration ProgressExploration Progress
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JDZ
• Five-well drilling campaign
completed in January 2010
• Over $300m expended
• Interesting drilling results
• Analysis of information
gathered continuing

16. Replicating theReplicating the
ERHC ModelERHC Model
• Policy to encourage Africans to
invest in foreign equity
• Sovereign Wealth Funds
• Raise awareness and re-direct
elitist consumption
• Critical mass of small
contributors
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17. ConclusionConclusion
• Value Creation and Retention: Need to move
beyond mere revenue stake
• Sustainability: Local participation in extractive
activity
• Challenge: Technical and financial capacity
• ERHC Model: A possible solution
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