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Our Business Today

Pure Exploration in a Time of Cheap Oil

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Part 1. The

Exploration Business Model

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Exploration Company Business Model

• Step 1: Acquire– Acquire early stage exploration assets – low entry costs

• Step 2a: Build – Develop prospectivity of assets – G&G work, reserve

estimate, drilling• Step 2b: Build

– Gain increased valuation of assets and company with Step 2a

• Step 3: Sell– Sell assets or sell company at tremendous profit (just

before drilling or on discovery)

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Exploration Value Proposition

4 to 10 years 5 to 12 years 5 to 20+ years

Mar

ket C

ap A

sset

Val

ue

Exploration Development Production

Usual Point of Sale

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Salient Points on Model• No cash flow

• Until discovery of oil and/or sale of asset or company (“Payout”)

• Equity is sole source of capital• Working capital before Payout is from sale of equity in (a)

asset and/or (b) company

• Process-driven value• Value accretions of asset and company predictable through

asset prospectivity development

• High risk • But high reward when successfully executed

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Successful Example

• Pre-drilling ofRovuma Field, Mozambique: $18m valuation

• 12 months later, after drilling and huge discovery in Rovuma: $2bn valuation

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Part 2. The Cheap Oil Factor

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Brent: June 19, 2014 – April 21, 2015

Series1

$40$50$60$70$80$90

$100$110$120

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Reasons for Price Decline• Increased Supply– North American shale turning U.S. to net

exporter of oil– OPEC and producers such as Russia refusing to

cut production • Diminished Demand– Slowdown of growth from BRICS

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Impact on Finance for Pure Exploration

• Slide in market capitalizations of oil companies

• Sharp decline in equity investor appetite for oil stocks

• Cut in exploration budgets by majors and big independents = sharp decline in appetite for farm-ins

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Part 3.ERHC Energy:

Then and Now

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Introducing ERHC• U.S. Public Company– Founded 1986– Registered in Colorado– Pure exploration company with Africa focus – Regulated by U.S. SEC– Based in Houston– Publicly traded stock (Ticker: ERHE)

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ERHC Exploration Assets• Kenya

• Block 11A

• Chad• Block BDS 2008

• Sao Tome & Principe EEZ • Block 4

• Nigeria-Sao Tome & Principe JDZ • Blocks 2, 3, 4, 5, 6 and 9 (working interests)

• Small Equity Stake • In Toronto-listed Oando Energy Resources (TSX: OER)

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The Original ERHC Plan

Remember the Exploration Business Model and E&P Value Proposition in Part 1:• Step 1. Acquire frontier E&P rights for low entry costs• Step 2a. Build asset value through greenfield G&G

work, attract partners and drill wells• Step 2b. Build company value by doing 2a, driving

ERHC rapidly up the value curve• Step 3. Sell ERHC or E&P rights for tremendous profit

prior to drilling or upon discovery (within 5 years)

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Oil Frontier: Sao Tome & Principe

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Original Plan Execution: Step 1. Acquire

• 1997: Exclusive Agreement with STP• 1999-2003: ERHC and STP renegotiate

Agreement • 2004: ERHC exercises preferential minority

rights in the JDZ• 2005-2006: ERHC teams up with

International Operators to acquire additional rights in JDZ Blocks 2, 3 and 4

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Original Plan Execution: Step 2a. Build

• 2009-2010: Five deepwater wells drilled

Well Block Total DepthKina-1 JDZ Block 4 3,750m

Bomu-1 JDZ Block 2 3,580mLemba–1 JDZ Block 3 3,758mMalanza-1 JDZ Block 4 4,196mOki East-1 JDZ Block 4 3,873m

Original Plan Execution: Step 2b. Build (Value)

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Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09

$/ Sh

are

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February 2009Sinopec-ERHCannounceplans to drillexploration well

June 2009Addax-ERHC announce4 exploration wellprogram

~$80 MM~$160 MM

August 2009Drilling begins onLemba – 1 in Block 3 of JDZ

March 2009Sinopec-ERHC prepare for Bomu– 1 wellon Block 2 of JDZ

~$310 MM

~$535 MM

~$340 MM

~$672 MM

~$540 MM

11x price increase over 8 month period Jan – Sept 2009

Month 1 Month 8

Milestones

Market Cap

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Original Plan Execution: Step 3. Sell?

• 2010: Results of drilling– No commercial discoveries announced– >$400 million exploration costs written off– Value curve inverts

• What to do? Wind up the Company?

Renew plan and start

again?

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Renewing the Plan with Onshore Focus

• 2010-2011– Acquire

• Chad – BDS 2008 (onshore)• Kenya – Block 11A (onshore)

• 2011-2014– Build (Exploration)

• Secured CEPSA as farm-in partner in Kenya• Formation of partnerships in Chad (ongoing)

– Build (Value)• At inception of value curve again

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Financing Before the Oil Crash

• Premised on usual upward trajectory of share price as drilling approached– Existing equity shareholders – Rights Issue

(2012)– Farmout – Kenya (2013)– New equity financing – Convertible Debt (2014)– More farmout – EEZ (2015)– Drilling in Kenya – (2016):If success, put up for

sale (e.g: Cove)

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Financing Afterthe Oil Crash

• Crash in global oil prices– Largely unforeseen– Industry-wide repercussions– Crash in pure exploration companies’ equity

• Convertibles pose challenge– Conversion now favors creditors unduly

• Farmouts now more challenging– Drastic cuts in exploration budgets– Marked withdrawals from exploration projects

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Options• Farmouts

– Heightened interest in Kenya on progress toward drilling– Chad

• Investment by high net-worth investor(s)– Reverse split to make investment easier

• Merger– With well-funded E&P company

• Onshore-asset subsidiary listing and IPO– On emerging market stock exchange (with continuing appetite for E&P)– On traditional market (subject to oil price upswing)

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Cycles• Historically, oil

price cycles • Upward swing

should come• Companies like

ERHC present great investment opportunity now $0.00

$25.00

$50.00

$75.00

$100.00

$125.00

$150.00

1990 2015

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Cautionary StatementThis presentation contains statements concerning 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 stockholders’ meetings 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 Kenya, Chad, the JDZ and the Exclusive Economic Zone 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 this presentation. 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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