----

----

----

| T | Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|---|--------------------------------------------------------------------------------|

| £ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|--------|------------------------------------------------------------------------------------------|

| Colorado                                                       | 88-0218499                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
|                                                           |                                 |
| 5444 Westheimer Road, Suite 1440, Houston, Texas               | 77056                                |
| (Address of Principal Executive Office)                        | (Zip Code)                           |

----

----

----

----

TABLE OF CONTENTS

|     | PART I                                                                                                              | PAGE   |
|----------|---------------------------------------------------------------------------------------------------------------------|--------|
|     |                                                                                                                |   |   |
| Item 1.  | Business                                                                                                            |   | 7 |
| Item 1A. | Risk Factors                                                                                                        |   | 15 |
| Item 1B. | Unresolved Staff Comments                                                                                           |   | 20 |
| Item 2.  | Properties                                                                                                          |   | 20 |
| Item 3.  | Legal Proceedings                                                                                                   |   | 21 |
| Item 4.  | Submission of Matters to a Vote of Security Holders                                                                 |   | 21 |
|     |                                                                                                                |   |   |
|     | PART II                                                                                                             |   |   |
|     |                                                                                                                |   |   |
| Item 5.  | Market for Registrant’s Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities |   | 22 |
| Item 6.  | Selected Financial Data                                                                                             |   | 23 |
| Item 7.  | Management’s Discussion and Analysis of Financial Condition and Plan of Operations                            |   | 24 |
| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk                                                          |   | 29 |
| Item 8.  | Financial Statements and Supplementary Data                                                                         |   | 30 |
| Item 9.  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosures                               |   | 61 |
| Item 9A. | Controls and Procedures                                                                                             |   | 61 |
| Item 9B. | Other Information                                                                                                   |   | 61 |
|     |                                                                                                                |   |   |
|     | PART III                                                                                                            |   |   |
|     |                                                                                                                |   |   |
| Item 10. | Directors and Executive Officers of the Registrant                                                                  |   | 61 |
| Item 11. | Executive Compensation                                                                                              |   | 65 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                      |   | 71 |
| Item 13. | Certain Relationships and Related Transactions                                                                      |   | 72 |
| Item 14. | Principal Accounting Fees and Services                                                                              |   | 72 |
|     |                                                                                                                |   |   |
|     | PART IV                                                                                                             |   |   |
|     |                                                                                                                |   |   |
| Item 15. | Exhibits and Financial Statement Schedules                                                                          |   | 73 |
|     | Signatures                                                                                                          |   | 74 |

----

Table of Contents

|   | · | business strategy; |
|--------|--------|--------------------|

|   | · | growth opportunities; |
|--------|--------|-----------------------|

|   | · | future development of concessions, exploitation of assets and other business operations; |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | future market conditions and the effect of such conditions on the Company’s future activities or results of operations; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------|

|   | · | future uses of and requirements for financial resources; |
|--------|--------|----------------------------------------------------------|

|   | · | interest rate and foreign exchange risk; |
|--------|--------|------------------------------------------|

|   | · | future contractual obligations; |
|--------|--------|---------------------------------|

|   | · | outcomes of legal proceedings including, without limitation, the ongoing investigations of the Company; |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | future operations outside the United States; |
|--------|--------|----------------------------------------------|

|   | · | competitive position; |
|--------|--------|-----------------------|

|   | · | expected financial position; |
|--------|--------|------------------------------|

|   | · | future cash flows; |
|--------|--------|--------------------|

|   | · | future liquidity and sufficiency of capital resources; |
|--------|--------|--------------------------------------------------------|

|   | · | future dividends; |
|--------|--------|-------------------|

|   | · | financing plans; |
|--------|--------|------------------|

|   | · | tax planning; |
|--------|--------|---------------|

|   | · | budgets for capital and other expenditures; |
|--------|--------|---------------------------------------------|

|   | · | plans and objectives of management; |
|--------|--------|-------------------------------------|

|   | · | compliance with applicable laws; and |
|--------|--------|--------------------------------------|

|   | · | adequacy of insurance or indemnification. |
|--------|--------|-------------------------------------------|

|   | · | general economic and business conditions; |
|--------|--------|-------------------------------------------|

----

Table of Contents

|   | · | worldwide demand for oil and natural gas; |
|--------|--------|-------------------------------------------|

|   | · | changes in foreign and domestic oil and gas exploration, development and production activity; |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | oil and natural gas price fluctuations and related market expectations; |
|--------|--------|-------------------------------------------------------------------------|

|   | · | termination, renegotiation or modification of existing contracts; |
|--------|--------|-------------------------------------------------------------------|

|   | · | the ability of the Organization of Petroleum Exporting Countries, commonly called OPEC, to set and maintain production levels and pricing, and the level of production in non-OPEC countries; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | policies of the various governments regarding exploration and development of oil and gas reserves; |
|--------|--------|----------------------------------------------------------------------------------------------------|

|   | · | advances in exploration and development technology; |
|--------|--------|-----------------------------------------------------|

|   | · | the political environment of oil-producing regions; |
|--------|--------|-----------------------------------------------------|

|   | · | political instability in the Democratic Republic of Sao Tome and Principe and the Federal Republic of Nigeria; |
|--------|--------|----------------------------------------------------------------------------------------------------------------|

|   | · | competition; |
|--------|--------|--------------|

|   | · | changes in foreign, political, social and economic conditions; |
|--------|--------|----------------------------------------------------------------|

|   | · | risks of international operations, compliance with foreign laws and taxation policies and expropriation or nationalization of equipment and assets; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | risks of potential contractual liabilities; |
|--------|--------|---------------------------------------------|

|   | · | foreign exchange and currency fluctuations and regulations, and the inability to repatriate income or capital; |
|--------|--------|----------------------------------------------------------------------------------------------------------------|

|   | · | risks of war, military operations, other armed hostilities, terrorist acts and embargoes; |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | regulatory initiatives and compliance with governmental regulations; |
|--------|--------|----------------------------------------------------------------------|

----

Table of Contents

|   | · | compliance with environmental laws and regulations; |
|--------|--------|-----------------------------------------------------|

|   | · | compliance with tax laws and regulations; |
|--------|--------|-------------------------------------------|

|   | · | customer preferences; |
|--------|--------|-----------------------|

|   | · | effects of litigation and governmental proceedings; |
|--------|--------|-----------------------------------------------------|

|   | · | cost, availability and adequacy of insurance; |
|--------|--------|-----------------------------------------------|

|   | · | adequacy of the Company’s sources of liquidity; |
|--------|--------|-------------------------------------------------------|

|   | · | labor conditions and the availability of qualified personnel; and |
|--------|--------|-------------------------------------------------------------------|

|   | · | various other matters, many of which are beyond the Company’s control. |
|--------|--------|------------------------------------------------------------------------------|

----

Table of Contents

 1.

----

Table of Contents

----

Table of Contents

| JDZ - ERHC has interests in six of the nine Blocks in the JDZ, a 34,548 square kilometer area approximately 200 kilometers off the coastline of Nigeria and São Tomé & Principe that is adjacent to several large petroleum discovery areas. EEZ - The government of São Tomé & Principe has awarded ERHC rights to participate in exploration and production activities in the EEZ, which encompasses an area of approximately 160,000 square kilometers.  Theserights were granted in a May 21, 2001 Memorandum of Agreement made between the Democratic Republic of Sao Tome and Principe (DRSTP) and the Company. The Company’s rights in the EEZ expire on October 1, 2024 or, or if the company has a producing working interest in any Block(s) at October 1, 2024, the Company’s rights extend in such Block(s), as long as the Block(s) remains in production. |  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|

----

Table of Contents

|   | · | JDZ Block 2:  22.0% Working interest percentage |
|--------|--------|-----------------------------------------------------------|

|   | · | JDZ Block 3:  10.0% Working interest percentage |
|--------|--------|-----------------------------------------------------------|

|   | · | JDZ Block 4:  26.7% Working interest percentage (subject to transfer of 7.2% to Addax ) |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | JDZ Block 5:  15.0% Working interest percentage |
|--------|--------|-----------------------------------------------------------|

|   | · | JDZ Block 6:  15.0% Working interest percentage |
|--------|--------|-----------------------------------------------------------|

|   | · | JDZ Block 9:  20.0% Working interest percentage |
|--------|--------|-----------------------------------------------------------|

----

Table of Contents

|   | · | The right to receive up to two blocks of ERHC’s choice; and |
|--------|--------|-------------------------------------------------------------------|

|   | · | The option to acquire up to a 15 percent paid working interest in another two blocks of ERHC’s choice. |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| JDZ Block # |   | ERHCOriginalParticipatingInterest (1) |   | ERHCJoint BidParticipatingInterest |   | ParticipatingInterest(s) Sold |   | Current ERHCRetainedParticipatingInterest |
|-------------|--------|---------------------------------------|--------|------------------------------------|--------|-------------------------------|--------|-------------------------------------------|
|        |   |                                  |   |                               |   |                          |   |                                      |
| 2           |   | 30%                                   |   | 35%                                |   | 43% (2)                       |   | 22%                                       |
| 3           |   | 20%                                   |   | 5%                                 |   | 15% (3)                       |   | 10%                                       |
| 4           |   | 25%                                   |   | 35%                                |   | 33.3% (4)                     |   | 26.7% (6)                                 |
| 5           |   | 15%                                   |   | (5)                                |   | (5)                           |   | (5)                                       |
| 6           |   | 15%                                   |   | (5)                                |   | (5)                           |   | (5)                                       |
| 9           |   | 20%                                   |   | (5)                                |   | (5)                           |   | (5)                                       |

| (1) | Original Participating Interest granted pursuant to the Option Agreement, dated April 2, 2003, between DRSTP and ERHC (the “2003 Option Agreement”). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | In March 2006, ERHC sold an aggregate 28.67% participating interest to Sinopec and an aggregate 14.33% participating interest to Addax Ltd. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | In February 2006, ERHC sold a 15% participating interest to Addax Sub. |
|-----|------------------------------------------------------------------------|

| (4) | By a Participation Agreement made in November 2005 and subsequently amended, ERHC sold 33.3% participating interest to Addax. |
|-----|-------------------------------------------------------------------------------------------------------------------------------|

| (5) | No contracts have been entered into as of the date hereof. |
|-----|------------------------------------------------------------|

| (6) | Includes the 9% reclaimed from Godsonic by ERHC on behalf of the ERHC/Addax consortium following Godsonic's inability to fulfill financial and other conditions upon which the 9% was to have been assigned to Godsonic. Pursuant to the Amendment to the Participation Agreement made on April 11, 2006, the 9% is subject to distribution between Addax (7.2%) and ERHC (1.8%), if agreement is reached between the parties onthe amount payable by Addax to ERHC for said interest. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Date of Participation Agreement |   | Parties                                                                                                                                                                                                                                              |   | Key Terms                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2 March 2006                    |   | 1. Sinopec International Petroleum Exploration and Production Co. Nigeria Ltd 1b. Sinopec International Petroleum and Production Corporation 2a. Addax Energy Nigeria Limited 2b. Addax Petroleum Corporation 3. ERHC Energy Inc |   | ERHC assigns  28.6% of participating interest to Sinopec International Petroleum Exploration and Production Co Nigeria Ltd (“Sinopec”) and a 14.3% participating interest to Addax Energy Nigeria Limited (“Addax”) leaving ERHC with a 22% participating interest. Consideration from Sinopec to to ERHC for the 28.67% interest (the “SINOPEC assigned interest”) is $13.6 million. Consideration from Addax to ERHC for the 14.33% interest (the “Addax assigned interest”) is $6.8 million In addition, Sinopec and  Addax to pay all of ERHC’s future costs  for petroleum operations (“the carried costs”) in respect of the 22% interest retained by ERHC (the “retained interest”) in Block 2. Sinopec and Addax are entitled to 100% of ERHC’s allocation of cost oil plus up to 50% of ERHC’s allocation of profit oil from the retained interest on Block 2 until Sinopec and Addax Sub recover 100% of the carried costs |

----

Table of Contents

| Date of Participation Agreement |   | Parties                                                                                                    |   | Key Terms                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|---------------------------------|--------|------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 15 February 2006                |   | 1. ERHC Energy Inc 2a. Addax Petroleum Resources Nigeria Limited 2b. Addax Petroleum Corporation |   | ERHC assigns  15% of participating interest to Addax Petroleum Resources Nigeria Limited (“Addax Sub”) leaving ERHC with a 10% participating interest.Consideration from Addax Sub to ERHC for the 15% interest (the “acquired interest”) is $7.5 million. In addition, Addax to pay all of ERHC’s future costs  for petroleum operations (“the carried costs”) in respect of the 10% interest retained by ERHC (the “retained interest”) in Block 3. Addax is entitled to 100% of ERHC’s future costs in respect of petroleum operations. Addax is entitled to 100% of ERHC’s allocation of cost oil plus up to 50% of ERHC’s allocation of profit oil until Addax Sub recovers 100% of the carried costs |

| Date              |   | Parties                                                                                                              |   | Key Terms                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|-------------------|--------|----------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 17 November 20051 |   | 1. ERHC Energy Inc 2a. Addax Petroleum  Nigeria (Offshore 2) Limited 2b. Addax Petroleum NV |   | ERHC shall assign 33.3%2 of participating interest to Addax Petroleum  Nigeria (Offshore 2) Limited (“Addax”) (leaving ERHC with a 26.7% participating interest). Consideration from Addax Sub to ERHC for the interest to be acquired by Addax (the “acquired interest”) is fixed at $18 million. In addition, Addax to pay all of ERHC’s future costs  for petroleum operations (“the carried costs”) in respect of ERHC’s retained interest in Block 4. Addax is entitled to 100% of ERHC’s allocation of cost oil plus up to 50% of ERHC’s allocation of profit oil until Addax  recovers 100% of the carried costs |

----

----

Table of Contents

----

Table of Contents

 1A. 

----

Table of Contents

|   | • | the availability of future capital resources to the Company and the other participants to be used for drilling wells; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------|

|   | • | the approval of other participants for the drilling of wells on the projects; |
|--------|---------|-------------------------------------------------------------------------------|

|   | • | the economic conditions at the time of drilling, including the prevailing and anticipated prices for oil and gas; and |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------|

|   | • | the availability of deep water drilling rigs. |
|--------|---------|-----------------------------------------------|

----

Table of Contents

----

Table of Contents

|   | · | Loss of future revenue and our concessions as a result of hazards such as war, acts of terrorism, insurrection and other political risks |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increases in taxes and governmental interests |
|--------|--------|-----------------------------------------------|

|   | · | Unilateral renegotiation of contracts by government entities |
|--------|--------|--------------------------------------------------------------|

|   | · | Difficulties in enforcing our rights against a governmental agency because of the doctrine of sovereign immunity and foreign sovereignty over international operations |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Changes in laws and policies governing operations of foreign-based companies, and |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | Currency restrictions and exchange rate fluctuations |
|--------|--------|------------------------------------------------------|

----

Table of Contents

|   | · | third party claims against us, which may include claims for special, indirect, derivative or consequential damages; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | damage to our business, operations and reputation; |
|--------|--------|----------------------------------------------------|

|   | · | loss of, or adverse effect on, cash flow, assets, goodwill, operations and financial condition, business, prospects, profits or business value; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | adverse consequences on our ability to obtain or continue financing for current or future projects; and/or |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | claims by directors, officers, employees, affiliates, advisors, attorneys, agents, debt holders or other interest holders or constituents of ERHC. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

 1B

2. 

|  ERHC has interests in six of the nine Blocks in the Joint Development Zone (JDZ), a 34,548 sq km area approximately 200 km off the coastline of Nigeria and Sao Tome and  Principe that is adjacent to several large petroleum discovery areas. ERHC's rights in the JDZ include: |  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|

|   | · | JDZ Block 2:  22.0% Working interest |
|--------|--------|------------------------------------------------|

|   | · | JDZ Block 3:  10.0% Working interest |
|--------|--------|------------------------------------------------|

|   | · | JDZ Block 4:  26.7% Working interest* (subject to transfer of 7.2% to Addax Petroleum) |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | JDZ Block 5:  15.0% Working interest |
|--------|--------|------------------------------------------------|

|   | · | JDZ Block 6:  15.0% Working interest |
|--------|--------|------------------------------------------------|

|   | · | JDZ Block 9:  20.0% Working interest |
|--------|--------|------------------------------------------------|

----

Table of Contents

|   | · | The right to receive up to two blocks of ERHC’s choice; and |
|--------|--------|-------------------------------------------------------------------|

|   | · | The option to acquire up to a 15% paid working interest in another two blocks of ERHC’s choice. |
|--------|--------|-------------------------------------------------------------------------------------------------------|

 3. 

 4.  

----

Table of Contents

 5.

|             |   | High        |   |   | Low    |   |
|------------------|--------|-------------|--------|--------|--------|--------|
|             |   | (per share) |   |
| Fiscal Year 2006 |   |        |   |   |   |   |
| First Quarter    |   | $           | 0.41   |   |   | $      | 0.30 |   |
| Second Quarter   |   | $           | 0.95   |   |   | $      | 0.30 |   |
| Third Quarter    |   | $           | 0.92   |   |   | $      | 0.40 |   |
| Fourth Quarter   |   | $           | 0.54   |   |   | $      | 0.37 |   |
|             |   |        |   |   |   |   |   |   |
| Fiscal Year 2007 |   |        |   |   |   |   |   |   |
| First Quarter    |   | $           | 0.51   |   |   | $      | 0.31 |   |
| Second Quarter   |   | $           | 0.48   |   |   | $      | 0.33 |   |
| Third Quarter    |   | $           | 0.42   |   |   | $      | 0.24 |   |
| Fourth Quarter   |   | $           | 0.34   |   |   | $      | 0.20 |   |

| Plan Category                                              |   | Number of securities to be issued upon exercise of outstanding options, warrantsand rights |      | Weighted-average exercise price of outstanding options, warrants and rights |   |   | Number of securities remaining available for future issuance under equitycompensation plans (excluding securities reflected in column (a)) |   |
|------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|-----------|--------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                       |   | (a)                                                                                                       |      | (b)                                                                                        |   |   | (c)                                                                                                                                                                 |   |
| Equity compensation plans approved by security holders     |   |                                                                                                      | 1,000,000 |                                                                                       |   | $      | 0.43                                                                                                                                                                |   |   |   | 11,423,244 |   |
| Equity compensation plans not approved by security holders |   |                                                                                                      | -         |                                                                                       |   |   | -                                                                                                                                                                   |   |   |   | - |   |

----

Table of Contents

|   | · | During the second fiscal quarter of 2007, warrants issued in 2003, with an exercise price of $0.20, were exercised on a cashless basis, which exercise resulted in the issuance of an aggregate of 2,949,587 shares of common stock. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | During the fourth fiscal quarter of 2007, there were an aggregate of 300,000 shares of common stock due to the Company’s directors for services rendered as more fully disclosed in Item 10, Directors and Executive Officers of the Registrant. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 6. 

|                                                  |   | For the Years Ended September 30, |        |
|-------------------------------------------------------|--------|----------------------------------------|-------------|
| Statements of Operations Data                         |   | 2007                                   |        |   | 2006 |   |   | 2005 |   |   | 2004 |   |   | 2003 |   |
|                                                  |   |                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses                                    |   | $                                      | 4,976,765   |   |   | $ | (24,113,494 | ) |   | $ | 4,652,459 |   |   | $ | 2,085,426 |   |   | $ | 1,944,655 |   |
| Interest expense                                      |   |                                   | (1,843      | ) |   |   | (2,099 | ) |   |   | (1,147,248 | ) |   |   | (1,671,759 | ) |   |   | (1,209227 | ) |
| Other Income (expense)                                |   |                                   | 1,498,704   |   |   |   | 1,123,141 |   |   |   | 278,804 |   |   |   | 163,797 |   |   |   | - |   |
| Loss on extinguishment of debt                        |   |                                   | -           |   |   |   | - |   |   |   | (5,749,575 | ) |   |   | - |   |   |   | - |   |
| Provision for taxes                                   |   |                                   | (1,723,000  | ) |   |   | 2,063,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net income (loss)                                     |   |                                   | (1,756,904  | ) |   |   | 23,171,536 |   |   |   | (11,270,478 | ) |   |   | (3,593,388 | ) |   |   | (3153882 | ) |
| Net income (loss) per share – basic and diluted |   |                                   | 0.00        |   |   |   | 0.03 |   |   |   | (0.02 | ) |   |   | (0.01 | ) |   |   | (0.01 | ) |
| Weighted average shares of common stock outstanding   |   |                                   | 720,966,165 |   |   |   | 712,063,980 |   |   |   | 671,164,058 |   |   |   | 592,603,441 |   |   |   | 567,788,483 |   |

|                           |   | As of September 30, |       |
|--------------------------------|--------|--------------------------|------------|
| Balance Sheets Data            |   | 2007                     |       |   | 2006 |   |   | 2005 |   |   | 2004 |   |   | 2003 |   |
|                           |   |                     |       |   |   |   |   |   |   |   |   |   |   |   |   |
| DRSTP Concession fee           |   | $                        | 2,839,500  |   |   | $ | 2,839,500 |   |   | $ | 5,679,000 |   |   | $ | 5,679,000 |   |   | $ | 5,679,000 |   |
| Total assets                   |   |                     | 39,854,641 |   |   |   | 45,878,249 |   |   |   | 6,720,210 |   |   |   | 5,728,556 |   |   |   | 5,735,744 |   |
| Total liabilities              |   |                     | 5,947,982  |   |   |   | 10,390,126 |   |   |   | 2,799,011 |   |   |   | 14,757,208 |   |   |   | 16,283,506 |   |
| Shareholders' equity (deficit) |   |                     | 33,906,659 |   |   |   | 35,488,123 |   |   |   | 3,941,199 |   |   |   | (9,028,652 | ) |   |   | (10,547,762 | ) |

----

Table of Contents

Item 7. 

| JDZ Block # |   | ERHCOriginalParticipatingInterest (1) |   | ERHCJoint BidParticipatingInterest |   | ParticipatingInterest(s) Sold |   | Current ERHCRetainedParticipatingInterest |
|-------------|--------|---------------------------------------|--------|------------------------------------|--------|-------------------------------|--------|-------------------------------------------|
|        |   |                                  |   |                               |   |                          |   |                                      |
| 2           |   | 30%                                   |   | 35%                                |   | 43% (2)                       |   | 22%                                       |
| 3           |   | 20%                                   |   | 5%                                 |   | 15% (3)                       |   | 10%                                       |
| 4           |   | 25%                                   |   | 35%                                |   | 33.3% (4)                     |   | 26.7% (6)                                 |
| 5           |   | 15%                                   |   | (5)                                |   | (5)                           |   | (5)                                       |
| 6           |   | 15%                                   |   | (5)                                |   | (5)                           |   | (5)                                       |
| 9           |   | 20%                                   |   | (5)                                |   | (5)                           |   | (5)                                       |

| (1) | Original Participating Interest granted pursuant to the Option Agreement, dated April 2, 2003, between DRSTP and ERHC (the “2003 Option Agreement”). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | In March 2006, ERHC sold an aggregate 28.67% participating interest to Sinopec and an aggregate 14.33% participating interest to Addax Ltd. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | In February 2006, ERHC sold a 15% participating interest to Addax Sub. |
|-----|------------------------------------------------------------------------|

| (4) | By a Participation Agreement made in November 2005 and subsequently amended, ERHC sold 33.3% participating interest to Addax. |
|-----|-------------------------------------------------------------------------------------------------------------------------------|

| (5) | No contracts have been entered into as of the date hereof. |
|-----|------------------------------------------------------------|

| (6) | Includes the 9% reclaimed from Godsonic by ERHC on behalf of the ERHC/Addax consortium following Godsonic's inability to fulfill financial and other conditions upon which the 9% was to have been assigned to Godsonic. Pursuant to the Amendment to the Participation Agreement made on April 11, 2006, the 9% is subject to distribution between Addax (7.2%) and ERHC (1.8%), if agreement is reached between the parties onthe amount payable by Addax to ERHC for said interest. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| Date of Participation Agreement |   | Parties                                                                                                                                                                                                                                              |   | Key Terms                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2 March 2006                    |   | 1. Sinopec International Petroleum Exploration and Production Co. Nigeria Ltd 1b. Sinopec International Petroleum and Production Corporation 2a. Addax Energy Nigeria Limited 2b. Addax Petroleum Corporation 3. ERHC Energy Inc |   | ERHC assigns  28.6% of participating interest to Sinopec International Petroleum Exploration and Production Co Nigeria Ltd (“Sinopec”) and a 14.3% participating interest to Addax Energy Nigeria Limited (“Addax”) leaving ERHC with a 22% participating interest. Consideration from Sinopec to to ERHC for the 28.67% interest (the “SINOPEC assigned interest”) is $13.6 million. Consideration from Addax to ERHC for the 14.33% interest (the “Addax assigned interest”) is $6.8 million In addition, Sinopec and  Addax to pay all of ERHC’s future costs  for petroleum operations (“the carried costs”) in respect of the 22% interest retained by ERHC (the “retained interest”) in Block 2. Sinopec and Addax are entitled to 100% of ERHC’s allocation of cost oil plus up to 50% of ERHC’s allocation of profit oil from the retained interest on Block 2 until Sinopec and Addax Sub recover 100% of the carried costs |

| Date of Participation Agreement |   | Parties                                                                                                    |   | Key Terms                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|---------------------------------|--------|------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 15 February 2006                |   | 1. ERHC Energy Inc 2a. Addax Petroleum Resources Nigeria Limited 2b. Addax Petroleum Corporation |   | ERHC assigns  15% of participating interest to Addax Petroleum Resources Nigeria Limited (“Addax Sub”) leaving ERHC with a 10% participating interest. Consideration from Addax Sub to ERHC for the 15% interest (the “acquired interest”) is $7.5 million. In addition, Addax to pay all of ERHC’s future costs  for petroleum operations (“the carried costs”) in respect of the 10% interest retained by ERHC (the “retained interest”) in Block 3. Addax is entitled to 100% of ERHC’s future costs in respect of petroleum operations. Addax is entitled to 100% of ERHC’s allocation of cost oil plus up to 50% of ERHC’s allocation of profit oil until Addax Sub recovers 100% of the carried costs |

----

Table of Contents

| Date                |   | Parties                                                                                                              |   | Key Terms                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------------------|--------|----------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 17 November 2005(1) |   | 1. ERHC Energy Inc 2a. Addax Petroleum  Nigeria (Offshore 2) Limited 2b. Addax Petroleum NV |   | ERHC shall assign 33.3%2 of participating interest to Addax Petroleum  Nigeria Offshore Limited (“Addax”) (leaving ERHC with a 26.7% participating interest). (2) Consideration from Addax Sub to ERHC for the interest to be acquired by Addax (the “acquired interest”) is fixed at $18 million. In addition, Addax to pay all of ERHC’s future costs  for petroleum operations (“the carried costs”) in respect of ERHC’s retained interest in Block 4. Addax is entitled to 100% of ERHC’s allocation of cost oil plus up to 50% of ERHC’s allocation of profit oil until Addax  recovers 100% of the carried costs |

----

Table of Contents

----

Table of Contents

----

Table of Contents

| Contractual Obligations              |   | Total  |    |   | Less than 1 year |   |    | 1 - 3 Years |   |   | 3 - 5 Years |   |   | More than 5 Years |   |
|--------------------------------------|--------|--------|---------|--------|-----------------------|--------|---------|-------------|--------|--------|-------------|--------|--------|------------------------|--------|
|                                 |   |   |    |   |                  |   |    |        |   |   |        |   |   |                   |   |
| Convertible debt (1)                 |   | $      | 33,513  |   |                  | $      | 33,513  |        |   | $      | -           |   |   | $                      | -      |   |   | $ | - |   |
| Operating lease   (2) |   |   | 454,920 |   |                  |   | 107,040 |        |   |   | 321,120     |   |   |                   | 26,760 |   |   |   | - |   |
|                                 |   |   |    |   |                  |   |    |        |   |   |        |   |   |                   |   |   |   |   |   |   |
| Total                                |   | $      | 488,433 |   |                  | $      | 140,553 |        |   | $      | 321,120     |   |   | $                      | 26,760 |   |   | $ | - |   |

| (1) | This represents a convertible note to Joseph Charles and Associates, for which the Company has been unable to locate the payee. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Lease obligations consist of operating lease for office space. Office lease represent non-cancelable leases for office space used in our daily operations. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------|

 7A.

----

Table of Contents

8. 

| ERHC ENERGY INC.                                                                                                                                                         |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|
| A CORPORATION IN THE DEVELOPMENT STAGE                                                                                                                                   |    |
| INDEX TO CONSOLIDATED FINANCIAL STATEMENTS                                                                                                                               |    |
|                                                                                                                                                                     |    |
|                                                                                                                                                                     |    |
|                                                                                                                                                                     | Page(s) |
|                                                                                                                                                                     |    |
| Reports of Independent Public Accounting Firm:                                                                                                                           |    |
|                                                                                                                                                                     |    |
| Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting as of September 30, 2007                                            | 30      |
|                                                                                                                                                                     |    |
| Report of Independent Registered Public Accounting Firm on the Financial Statements for the Years ended September 30, 2007 and 2006                                      | 31      |
|                                                                                                                                                                     |    |
| Consolidated Financial Statements:                                                                                                                                       |    |
|                                                                                                                                                                     |    |
| Consolidated Balance Sheets as of September 30, 2007 and 2006                                                                                                            | 32      |
|                                                                                                                                                                     |    |
| Consolidated Statements of Operations for the Years Ended September 30, 2007, 2006 and 2005, and for the period from inception, September 5, 1995, to September 30, 2007 | 33      |
|                                                                                                                                                                     |    |
| Consolidated Statements of Shareholders' Equity (Deficit) for the period from inception, September 5, 1995, to September 30, 2007                                        | 34      |
|                                                                                                                                                                     |    |
| Consolidated Statements of Cash Flows for the Years Ended September 30, 2007, 2006 and 2005, and for the period from inception, September 5, 1995, to September 30, 2007 | 45      |
|                                                                                                                                                                     |    |
| Notes to Consolidated Financial Statements                                                                                                                               | 47      |
|                                                                                                                                                                     |    |
| Financial Statement Schedules:                                                                                                                                           |    |
|                                                                                                                                                                     |    |
| None                                                                                                                                                                     |    |

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

|                                                                                                                                                            |   | 2007   |        |   | 2006   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                                                                                                                                            |   |   |        |   |   |   |
| ASSETS                                                                                                                                                          |   |   |        |   |   |   |
| Current assets:                                                                                                                                                 |   |   |        |   |   |   |
| Cash                                                                                                                                                            |   | $      | 34,721,933  |   |   | $      | 40,991,114 |   |
| Prepaid expenses and other current assets                                                                                                                       |   |   | 179,955     |   |   |   | 1,073,031 |   |
| Income tax refundable                                                                                                                                           |   |   | 1,568,758   |   |   |   | - |   |
| Deferred tax asset – current                                                                                                                              |   |   | 480,000     |   |   |   | 480,000 |   |
|                                                                                                                                                            |   |   |        |   |   |   |   |   |
| Total current assets                                                                                                                                            |   |   | 36,950,646  |   |   |   | 42,544,145 |   |
|                                                                                                                                                            |   |   |        |   |   |   |   |   |
| DRSTP concession fee                                                                                                                                            |   |   | 2,839,500   |   |   |   | 2,839,500 |   |
| Furniture and equipment, net                                                                                                                                    |   |   | 64,495      |   |   |   | 14,604 |   |
| Deferred tax asset                                                                                                                                              |   |   | -           |   |   |   | 480,000 |   |
|                                                                                                                                                            |   |   |        |   |   |   |   |   |
| Total assets                                                                                                                                                    |   | $      | 39,854,641  |   |   | $      | 45,878,249 |   |
|                                                                                                                                                            |   |   |        |   |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                            |   |   |        |   |   |   |   |   |
| Current Liabilities:                                                                                                                                            |   |   |        |   |   |   |   |   |
| Accounts payable and accrued liabilities                                                                                                                        |   | $      | 5,183,979   |   |   | $      | 6,784,004 |   |
| Accounts payable and accrued liabilities, related parties                                                                                                       |   |   | 238,614     |   |   |   | 69,439 |   |
| Accrued interest                                                                                                                                                |   |   | 6,876       |   |   |   | 5,023 |   |
| Federal income taxes payable                                                                                                                                    |   |   | -           |   |   |   | 3,013,147 |   |
| Asset retirement obligation                                                                                                                                     |   |   | 485,000     |   |   |   | 485,000 |   |
| Convertible debt                                                                                                                                                |   |   | 33,513      |   |   |   | 33,513 |   |
|                                                                                                                                                            |   |   |        |   |   |   |   |   |
| Total current liabilities                                                                                                                                       |   |   | 5,947,982   |   |   |   | 10,390,126 |   |
|                                                                                                                                                            |   |   |        |   |   |   |   |   |
| Commitments and contingencies                                                                                                                                   |   |   | -           |   |   |   | - |   |
|                                                                                                                                                            |   |   |        |   |   |   |   |   |
| Shareholders' equity:                                                                                                                                           |   |   |        |   |   |   |   |   |
| Preferred stock, par value $0.0001; authorized 10,000,000; none issued and outstanding                                                                          |   |   | -           |   |   |   | - |   |
| Common stock, par value $0.0001; authorized 950,000,000 shares; issued and outstanding 721,938,550 and 718,988,982 at September 30, 2007 and 2006, respectively |   |   | 72,193      |   |   |   | 71,899 |   |
| Additional paid-in capital                                                                                                                                      |   |   | 91,827,545  |   |   |   | 91,652,399 |   |
| Deficits accumulated in the development stage                                                                                                                   |   |   | (57,993,079 | )      |   |   | (56,236,175 | ) |
|                                                                                                                                                            |   |   |        |   |   |   |   |   |
| Total shareholders’ equity                                                                                                                                |   |   | 33,906,659  |   |   |   | 35,488,123 |   |
|                                                                                                                                                            |   |   |        |   |   |   |   |   |
| Total liabilities and shareholders' equity                                                                                                                      |   | $      | 39,854,641  |   |   | $      | 45,878,249 |   |

----

Table of Contents

----

|                                                      |   |   |        |   |   |   |        |   |   |   | Inception toSeptember 30, |   |
|-----------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|--------|--------------------------------|--------|
|                                                      |   | 2005   |        |   | 2006   |   |        | 2007   |   |   | 2007                           |   |
|                                                      |   |   |        |   |   |   |        |   |   |   | (Unaudited)                    |   |
| Operating costs and expenses:                             |   |   |        |   |   |   |        |   |   |   |                           |   |
| General and administrative Expenses                       |   | $      | 4,645,783   |   |   | $      | 5,979,609   |   |   | $      | 4,954,848                      |   |   | $ | 64,093,110 |   |
| Depreciation, depletion and amortization                  |   |   | 6,676       |   |   |   | 9,147       |   |   |   | 21,917                         |   |   |   | 1,385,930 |   |
| Gain from sale of partial interest in DRSTP Concession    |   |   | -           |   |   |   | (30,102,250 | )      |   |   | -                              |   |   |   | (30,102,250 | ) |
| Write-offs and abandonments                               |   |   | -           |   |   |   | -           |   |   |   | -                              |   |   |   | 7,742,128 |   |
|                                                      |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| (Loss) gain from operations                               |   |   | (4,652,459  | )      |   |   | 24,113,494  |   |   |   | (4,976,765                     | )      |   |   | (43,118,918 | ) |
|                                                      |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| Other income and (expenses):                              |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| Interest income                                           |   |   | 26,494      |   |   |   | 1,123,141   |   |   |   | 1,998,704                      |   |   |   | 3,148,339 |   |
| Gain (loss) from settlements                              |   |   | 252,310     |   |   |   | -           |   |   |   | (500,000                       | )      |   |   | (247,690 | ) |
| Other income                                              |   |   | -           |   |   |   | -           |   |   |   | -                              |   |   |   | 439,827 |   |
| Interest expense                                          |   |   | (1,147,248  | )      |   |   | (2,099      | )      |   |   | (1,843                         | )      |   |   | (12,125,062 | ) |
| Loss on extinguishment of debt                            |   |   | (5,749,575  | )      |   |   | -           |   |   |   | -                              |   |   |   | (5,749,575 | ) |
|                                                      |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| Total other income and expenses, net                      |   |   | (6,618,019  | )      |   |   | 1,121,042   |   |   |   | 1,496,861                      |   |   |   | (14,534,161 | ) |
|                                                      |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| Income (loss) before benefit (provision) for income taxes |   |   | (11,270,478 | )      |   |   | 25,234,536  |   |   |   | (3,479,904                     | )      |   |   | (57,653,079 | ) |
|                                                      |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| Benefit (provision) for income taxes                      |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| Current                                                   |   |   | -           |   |   |   | (3,023,000  | )      |   |   | 1,243,000                      |   |   |   | (1,780,000 | ) |
| Deferred                                                  |   |   | -           |   |   |   | 960,000     |   |   |   | 480,000                        |   |   |   | 1,440,000 |   |
|                                                      |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| Total benefit (provision) for income taxes                |   |   | -           |   |   |   | (2,063,000  | )      |   |   | 1,723,000                      |   |   |   | (340,000 | ) |
|                                                      |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| Net income (loss)                                         |   | $      | (11,270,478 | )      |   | $      | 23,171,536  |   |   | $      | (1,756,904                     | )      |   | $ | (57,993,079 | ) |
|                                                      |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| Net income (loss) per common shares Basic and diluted     |   | $      | (0.02       | )      |   | $      | 0.03        |   |   | $      | 0.00                           |   |   |   |   |   |
|                                                      |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
|                                                      |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| Weighted average number of common shares outstanding -    |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| Basic                                                     |   |   | 671,164,058 |   |   |   | 712,063,980 |   |   |   | 720,966,165                    |   |   |   |   |   |
| Diluted                                                   |   |   | 671,164,058 |   |   |   | 717,410,403 |   |   |   | 720,966,165                    |   |   |   |   |   |

----

Table of Contents

----

|                                          |   | Common StockShares |      |   | Amount |   |   | AdditionalPaid-InCapital |   |   | AccumulatedDeficit |   |   | SubscriptionReceivable |     |   | DeferredCompensation |   |   | Total  |   |
|-----------------------------------------------|--------|--------------------|-----------|--------|--------|--------|--------|--------------------------|--------|--------|--------------------|--------|--------|------------------------|----------|--------|----------------------|--------|--------|--------|--------|
|                                          |   |               |      |   |   |   |   |                     |   |   |               |   |   |                   |     |   |                 |   |   |   |   |
| Balance at September 5, 1995                  |   |               | -         |   |   | $      | -      |                     |   | $      | -                  |   |   | $                      | -        |   |                 | $      | -      |   |   | $ | - |   |   | $ | - |   |
|                                          |   |               |      |   |   |   |   |                     |   |   |               |   |   |                   |     |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for cash                  |   |               | 884,407   |   |   |   | 88     |                     |   |   | -                  |   |   |                   | -        |   |                 |   | -      |   |   |   | - |   |   |   | 88 |   |
|                                          |   |               |      |   |   |   |   |                     |   |   |               |   |   |                   |     |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for Services              |   |               | 755,043   |   |   |   | 76     |                     |   |   | 499,924            |   |   |                   | -        |   |                 |   | -      |   |   |   | (500,000 | ) |   |   | - |   |
| Net loss                                      |   |               | -         |   |   |   | -      |                     |   |   | -                  |   |   |                   | (3,404   | )      |                 |   | -      |   |   |   | - |   |   |   | (3,404 | ) |
| Balance at September 30, 1995                 |   |               | 1,639,450 |   |   |   | 164    |                     |   |   | 499,924            |   |   |                   | (3,404   | )      |                 |   | -      |   |   |   | (500,000 | ) |   |   | (3,316 | ) |
|                                          |   |               |      |   |   |   |   |                     |   |   |               |   |   |                   |     |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for cash, net of expenses |   |               | 361,330   |   |   |   | 36     |                     |   |   | 124,851            |   |   |                   | -        |   |                 |   | -      |   |   |   | - |   |   |   | 124,887 |   |
| Common stock issued for                       |   |               |      |   |   |   |   |                     |   |   |               |   |   |                   |     |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Services                                      |   |               | 138,277   |   |   |   | 14     |                     |   |   | 528,263            |   |   |                   | -        |   |                 |   | -      |   |   |   | - |   |   |   | 528,277 |   |
| Common stock issued for Equipment             |   |               | 744,000   |   |   |   | 74     |                     |   |   | 3,719,926          |   |   |                   | -        |   |                 |   | -      |   |   |   | - |   |   |   | 3,720,000 |   |
| Effect of reverse merger                      |   |               | 1,578,470 |   |   |   | 158    |                     |   |   | (243,488           | )      |   |                   | -        |   |                 |   | -      |   |   |   | - |   |   |   | (243,330 | ) |
| Amortization of deferred compensation         |   |               | -         |   |   |   | -      |                     |   |   | -                  |   |   |                   | -        |   |                 |   | -      |   |   |   | 72,500 |   |   |   | 72,500 |   |
| Net loss                                      |   |               | -         |   |   |   | -      |                     |   |   | -                  |   |   |                   | (728,748 | )      |                 |   | -      |   |   |   | - |   |   |   | (728,748 | ) |
|                                          |   |               |      |   |   |   |   |                     |   |   |               |   |   |                   |     |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Balance at September 30, 1996                 |   |               | 4,461,527 |   |   | $      | 446    |                     |   | $      | 4,629,476          |   |   | $                      | (732,152 | )      |                 | $      | -      |   |   | $ | (427,500 | ) |   | $ | 3,470,270 |   |

----

Table of Contents

----

|                                                      |   | Common StockShares |       |   | Amount |   |   | AdditionalPaid-InCapital |   |   | AccumulatedDeficit |   |   | SubscriptionReceivable |        |   | DeferredCompensation |   |     | Total  |   |
|-----------------------------------------------------------|--------|--------------------|------------|--------|--------|--------|--------|--------------------------|--------|--------|--------------------|--------|--------|------------------------|-------------|--------|----------------------|--------|----------|--------|--------|
|                                                      |   |               |       |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |     |   |   |
| Balance at September 30, 1996                             |   |               | 4,461,527  |   |   | $      | 446    |                     |   | $      | 4,629,476          |   |   | $                      | (732,152    | )      |                 | $      | -        |   |   | $ | (427,500 | ) |   | $ | 3,470,270 |   |
|                                                      |   |               |       |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |     |   |   |   |   |   |   |   |   |   |
| Common stock issued for cash                              |   |               | 2,222,171  |   |   |   | 222    |                     |   |   | 1,977,357          |   |   |                   | -           |   |                 |   | (913,300 | )      |   |   | - |   |   |   | 1,064,279 |   |
| Common stock issued for services                          |   |               | 9,127,981  |   |   |   | 913    |                     |   |   | 12,430,725         |   |   |                   | -           |   |                 |   | -        |   |   |   | - |   |   |   | 12,431,638 |   |
| Common stock issued for oil and gas leases and properties |   |               | 500,000    |   |   |   | 50     |                     |   |   | 515,575            |   |   |                   | -           |   |                 |   | -        |   |   |   | - |   |   |   | 515,625 |   |
| Common stock issued for Chevron contract                  |   |               | 3,000,000  |   |   |   | 300    |                     |   |   | -                  |   |   |                   | -           |   |                 |   | -        |   |   |   | - |   |   |   | 300 |   |
| Common stock issued for BAPCO acquisition                 |   |               | 4,000,000  |   |   |   | 400    |                     |   |   | 499,600            |   |   |                   | -           |   |                 |   | -        |   |   |   | - |   |   |   | 500,000 |   |
| Contributed                                               |   |               | (100,000   | )      |   |   | (10    | )                        |   |   | (99,990            | )      |   |                   | -           |   |                 |   | -        |   |   |   | - |   |   |   | (100,000 | ) |
| Amortization of deferred compensation                     |   |               | -          |   |   |   | -      |                     |   |   | -                  |   |   |                   | -           |   |                 |   | -        |   |   |   | 177,500 |   |   |   | 177,500 |   |
| Net loss                                                  |   |               | -          |   |   |   | -      |                     |   |   | -                  |   |   |                   | (16,913,052 | )      |                 |   | -        |   |   |   | - |   |   |   | (16,913,052 | ) |
|                                                      |   |               |       |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |     |   |   |   |   |   |   |   |   |   |
| Balance at September 30, 1997                             |   |               | 23,211,679 |   |   | $      | 2,321  |                     |   | $      | 19,952,743         |   |   | $                      | (17,645,204 | )      |                 | $      | (913,300 | )      |   | $ | (250,000 | ) |   | $ | 1,146,560 |   |

----

Table of Contents

----

|                                                           |   | Common StockShares |       |   | Amount |   |   | AdditionalPaid-InCapital |   |   | AccumulatedDeficit |   |   | SubscriptionReceivable |        |   | DeferredCompensation |   |     | Total  |   |
|----------------------------------------------------------------|--------|--------------------|------------|--------|--------|--------|--------|--------------------------|--------|--------|--------------------|--------|--------|------------------------|-------------|--------|----------------------|--------|----------|--------|--------|
|                                                           |   |               |       |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |     |   |   |
| Balance at September 30, 1997                                  |   |               | 23,211,679 |   |   | $      | 2,321  |                     |   | $      | 19,952,743         |   |   | $                      | (17,645,204 | )      |                 | $      | (913,300 | )      |   | $ | (250,000 | ) |   | $ | 1,146,560 |   |
|                                                           |   |               |       |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |     |   |   |   |   |   |   |   |   |   |
| Common stock and warrants issued for cash                      |   |               | 1,124,872  |   |   |   | 113    |                     |   |   | 972,682            |   |   |                   | -           |   |                 |   | -        |   |   |   | - |   |   |   | 972,795 |   |
| Common stock issued for services                               |   |               | 1,020,320  |   |   |   | 102    |                     |   |   | 1,526,878          |   |   |                   | -           |   |                 |   | -        |   |   |   | - |   |   |   | 1,526,980 |   |
| Common stock issued for Uinta acquisition                      |   |               | 1,000,000  |   |   |   | 100    |                     |   |   | 1,999,900          |   |   |                   | -           |   |                 |   | -        |   |   |   | - |   |   |   | 2,000,000 |   |
| Common stock issued for Nueces acquisition                     |   |               | 50,000     |   |   |   | 5      |                     |   |   | 148,745            |   |   |                   | -           |   |                 |   | -        |   |   |   | - |   |   |   | 148,750 |   |
| Common stock issued for accounts payable                       |   |               | 491,646    |   |   |   | 49     |                     |   |   | 337,958            |   |   |                   | -           |   |                 |   | -        |   |   |   | - |   |   |   | 338,007 |   |
| Beneficial conversion feature associated with convertible debt |   |               | -          |   |   |   | -      |                     |   |   | 1,387,500          |   |   |                   | -           |   |                 |   | -        |   |   |   | - |   |   |   | 1,387,500 |   |
| Receipt of subscription receivable                             |   |               | -          |   |   |   | -      |                     |   |   | -                  |   |   |                   | -           |   |                 |   | 913,300  |   |   |   | - |   |   |   | 913,300 |   |
| Option fee and penalty                                         |   |               | 299,536    |   |   |   | 30     |                     |   |   | 219,193            |   |   |                   | -           |   |                 |   | -        |   |   |   | - |   |   |   | 219,223 |   |
| Common stock issued for building equity                        |   |               | 24,000     |   |   |   | 2      |                     |   |   | 69,998             |   |   |                   | -           |   |                 |   | -        |   |   |   | - |   |   |   | 70,000 |   |
| Amortization of deferred compensation                          |   |               | -          |   |   |   | -      |                     |   |   | -                  |   |   |                   | -           |   |                 |   | -        |   |   |   | 125,000 |   |   |   | 125,000 |   |
| Net loss                                                       |   |               | -          |   |   |   | -      |                     |   |   | -                  |   |   |                   | (11,579,024 | )      |                 |   | -        |   |   |   | - |   |   |   | (11,579,024 | ) |
|                                                           |   |               |       |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |     |   |   |   |   |   |   |   |   |   |
| Balance at September 30, 1998                                  |   |               | 27,222,053 |   |   | $      | 2,722  |                     |   | $      | 26,615,597         |   |   | $                      | (29,224,228 | )      |                 | $      | -        |   |   | $ | (125,000 | ) |   | $ | (2,730,909 | ) |

----

Table of Contents

----

|                                                                          |   | Common StockShares |        |   | Amount |   |   | AdditionalPaid-InCapital |   |   | AccumulatedDeficit |   |   | SubscriptionReceivable |        |   | DeferredCompensation |   |   | Total  |   |
|-------------------------------------------------------------------------------|--------|--------------------|-------------|--------|--------|--------|--------|--------------------------|--------|--------|--------------------|--------|--------|------------------------|-------------|--------|----------------------|--------|--------|--------|--------|
|                                                                          |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |
| Balance at September 30, 1998                                                 |   |               | 27,222,053  |   |   | $      | 2,722  |                     |   | $      | 26,615,597         |   |   | $                      | (29,224,228 | )      |                 | $      | -      |   |   | $ | (125,000 | ) |   | $ | (2,730,909 | ) |
|                                                                          |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for cash                                                  |   |               | 397,040,000 |   |   |   | 39,704 |                     |   |   | 2,062,296          |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 2,102,000 |   |
| Common stock issued for services                                              |   |               | 7,169,000   |   |   |   | 717    |                     |   |   | 1,034,185          |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 1,034,902 |   |
| Common stock issued for Uinta settlement                                      |   |               | 7,780,653   |   |   |   | 778    |                     |   |   | 2,541,161          |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 2,541,939 |   |
| Common stock surrendered in BAPCO settlement                                  |   |               | (7,744,000  | )      |   |   | (774   | )                        |   |   | (2,709,626         | )      |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | (2,710,400 | ) |
| Common stock issued for accounts payable, debt,accrued interest and penalties |   |               | 42,334,767  |   |   |   | 4,233  |                     |   |   | 6,768,054          |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 6,772,287 |   |
| Common stock issued for officer's salary and bonuses                          |   |               | 10,580,000  |   |   |   | 1,058  |                     |   |   | 4,723,942          |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 4,725,000 |   |
| Common stock issued for shareholder loans and accrued interest payable        |   |               | 3,939,505   |   |   |   | 394    |                     |   |   | 771,318            |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 771,712 |   |
| Reclassification of common stock previously presented as a liability          |   |               | 750,000     |   |   |   | 75     |                     |   |   | 1,499,925          |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 1,500,000 |   |
| Amortization of deferred compensation                                         |   |               | -           |   |   |   | -      |                     |   |   | -                  |   |   |                   | -           |   |                 |   | -      |   |   |   | 125,000 |   |   |   | 125,000 |   |
| Net loss                                                                      |   |               | -           |   |   |   | -      |                     |   |   | -                  |   |   |                   | (19,727,835 | )      |                 |   | -      |   |   |   | - |   |   |   | (19,727,835 | ) |
|                                                                          |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Balance at September 30, 1999                                                 |   |               | 489,071,978 |   |   | $      | 48,907 |                     |   | $      | 43,306,852         |   |   | $                      | (48,952,063 | )      |                 | $      | -      |   |   | $ | - |   |   | $ | (5,596,304 | ) |

----

Table of Contents

----

|                                                                                       |   | Common StockShares |        |   | Amount |   |   | AdditionalPaid-InCapital |   |   | AccumulatedDeficit |   |   | SubscriptionReceivable |        |   | DeferredCompensation |   |   | Total  |   |
|--------------------------------------------------------------------------------------------|--------|--------------------|-------------|--------|--------|--------|--------|--------------------------|--------|--------|--------------------|--------|--------|------------------------|-------------|--------|----------------------|--------|--------|--------|--------|
|                                                                                       |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |
| Balance at September 30, 1999                                                              |   |               | 489,071,978 |   |   | $      | 48,907 |                     |   | $      | 43,306,852         |   |   | $                      | (48,952,063 | )      |                 | $      | -      |   |   | $ | - |   |   | $ | (5,596,304 | ) |
|                                                                                       |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for con -version of debt and payment of accrued interest and penalties |   |               | 7,607,092   |   |   |   | 761    |                     |   |   | 295,120            |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 295,881 |   |
| Net loss                                                                                   |   |               | -           |   |   |   | -      |                     |   |   | -                  |   |   |                   | (1,958,880  | )      |                 |   | -      |   |   |   | - |   |   |   | (1,958,880 | ) |
|                                                                                       |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Balance at September 30, 2000                                                              |   |               | 496,679,070 |   |   |   | 49,668 |                     |   |   | 43,601,972         |   |   |                   | (50,910,943 | )      |                 |   | -      |   |   |   | - |   |   |   | (7,259,303 | ) |
|                                                                                       |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for services                                                           |   |               | 37,000,000  |   |   |   | 3,700  |                     |   |   | 1,846,300          |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 1,850,000 |   |
| Net loss                                                                                   |   |               | -           |   |   |   | -      |                     |   |   | -                  |   |   |                   | (6,394,810  | )      |                 |   | -      |   |   |   | - |   |   |   | (6,394,810 | ) |
|                                                                                       |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Balance at September 30, 2001                                                              |   |               | 533,679,070 |   |   | $      | 53,368 |                     |   | $      | 45,448,272         |   |   | $                      | (57,305,753 | )      |                 | $      | -      |   |   | $ | - |   |   | $ | (11,804,113 | ) |

----

Table of Contents

----

|                                                                                        |   | Common StockShares |        |   | Amount |   |   | AdditionalPaid-InCapital |   |   | AccumulatedDeficit |   |   | SubscriptionReceivable |        |   | DeferredCompensation |   |   | Total  |   |
|---------------------------------------------------------------------------------------------|--------|--------------------|-------------|--------|--------|--------|--------|--------------------------|--------|--------|--------------------|--------|--------|------------------------|-------------|--------|----------------------|--------|--------|--------|--------|
|                                                                                        |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |
| Balance at September 30, 2001                                                               |   |               | 533,679,070 |   |   | $      | 53,368 |                     |   | $      | 45,448,272         |   |   | $                      | (57,305,753 | )      |                 | $      | -      |   |   | $ | - |   |   | $ | (11,804,113 | ) |
|                                                                                        |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for cash net of expenses                                                |   |               | 4,000,000   |   |   |   | 400    |                     |   |   | 643,100            |   |   |                   | -           |   |                 |   | -      |   |   |   | 643,500 |   |   |   |   |   |
| Common stock issued for services                                                            |   |               | 3,475,000   |   |   |   | 348    |                     |   |   | 527,652            |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 528,000 |   |
| Common stock issued for accounts payable                                                    |   |               | 4,407,495   |   |   |   | 440    |                     |   |   | 817,757            |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 818,197 |   |
| Common stock issued for con -version of debt and pay-ment of accrued interest And penalties |   |               | 7,707,456   |   |   |   | 771    |                     |   |   | 1,540,721          |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 1,541,492 |   |
| Common stock issued for officer's salary and bonuses                                        |   |               | 2,700,000   |   |   |   | 270    |                     |   |   | 289,730            |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 290,000 |   |
| Net loss                                                                                    |   |               | -           |   |   |   | -      |                     |   |   | -                  |   |   |                   | (4,084,210  | )      |                 |   | -      |   |   |   | - |   |   |   | (4,084,210 | ) |
|                                                                                        |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Balance at September 30, 2002                                                               |   |               | 555,969,021 |   |   | $      | 55,597 |                     |   | $      | 49,267,232         |   |   | $                      | (61,389,963 | )      |                 | $      | -      |   |   | $ | - |   |   | $ | (12,067,134 | ) |

----

Table of Contents

----

|                                                                         |   | Common StockShares |        |   | Amount |   |   | AdditionalPaid-InCapital |   |   | AccumulatedDeficit |   |   | SubscriptionReceivable |        |   | DeferredCompensation |   |   | Total  |   |
|------------------------------------------------------------------------------|--------|--------------------|-------------|--------|--------|--------|--------|--------------------------|--------|--------|--------------------|--------|--------|------------------------|-------------|--------|----------------------|--------|--------|--------|--------|
|                                                                         |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |
| Balance at September 30, 2002                                                |   |               | 555,969,021 |   |   | $      | 55,597 |                     |   | $      | 49,267,232         |   |   | $                      | (61,389,963 | )      |                 | $      | -      |   |   | $ | - |   |   | $ | (12,067,134 | ) |
|                                                                         |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for cash, net of expenses                                |   |               | 9,440,000   |   |   |   | 944    |                     |   |   | 1,071,556          |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 1,072,500 |   |
| Common stock issued for accounts payable                                     |   |               | 1,527,986   |   |   |   | 153    |                     |   |   | 177,663            |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 177,816 |   |
| Common stock issued for con -version of debt and payment of accrued interest |   |               | 17,114,740  |   |   |   | 1,711  |                     |   |   | 3,421,227          |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 3,422,938 |   |
| Net loss                                                                     |   |               | -           |   |   |   | -      |                     |   |   | -                  |   |   |                   | (3,153,882  | )      |                 |   | -      |   |   |   | - |   |   |   | (3,153,882 | ) |
|                                                                         |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Balance at September 30, 2003                                                |   |               | 584,051,747 |   |   | $      | 58,405 |                     |   | $      | 53,937,678         |   |   | $                      | (64,543,845 | )      |                 | $      | -      |   |   | $ | - |   |   | $ | (10,547,762 | ) |

----

Table of Contents

----

|                                                                          |   | Common StockShares |        |   | Amount |   |   | AdditionalPaid-InCapital |   |   | AccumulatedDeficit |   |   | SubscriptionReceivable |        |   | DeferredCompensation |   |   | Total  |   |
|-------------------------------------------------------------------------------|--------|--------------------|-------------|--------|--------|--------|--------|--------------------------|--------|--------|--------------------|--------|--------|------------------------|-------------|--------|----------------------|--------|--------|--------|--------|
|                                                                          |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |
| Balance at September 30, 2003                                                 |   |               | 584,051,747 |   |   | $      | 58,405 |                     |   | $      | 53,937,678         |   |   | $                      | (64,543,845 | )      |                 | $      | -      |   |   | $ | - |   |   | $ | (10,547,762 | ) |
|                                                                          |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for cash, net of expenses                                 |   |               | 3,231,940   |   |   |   | 323    |                     |   |   | 974,677            |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 975,000 |   |
| Common stock issued for accounts payable                                      |   |               | 1,458,514   |   |   |   | 146    |                     |   |   | 533,102            |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 533,248 |   |
| Common stock issued for con -version of debt and payment of accrued interest  |   |               | 11,185,052  |   |   |   | 1,119  |                     |   |   | 2,236,093          |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 2,237,212 |   |
| Common stock issued for proceeds received in 2003                             |   |               | 1,000,000   |   |   |   | 100    |                     |   |   | (100               | )      |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | - |   |
| Beneficial conversion feature associated with the con-vertible line of credit |   |               | -           |   |   |   | -      |                     |   |   | 1,058,912          |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 1,058,912 |   |
| Options issued to employee                                                    |   |               | -           |   |   |   | -      |                     |   |   | 765,000            |   |   |                   | -           |   |                 |   | -      |   |   |   | (765,000 | ) |   |   | - |   |
| Amortization of deferred compensation                                         |   |               | -           |   |   |   | -      |                     |   |   | -                  |   |   |                   | -           |   |                 |   | -      |   |   |   | 308,126 |   |   |   | 308,126 |   |
| Common stock issued for cash Less exercise of options And/or warrants         |   |               | 247,882     |   |   |   | 25     |                     |   |   | (25                | )      |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | - |   |
| Net loss                                                                      |   |               | -           |   |   |   | -      |                     |   |   | -                  |   |   |                   | (3,593,388  | )      |                 |   | -      |   |   |   | - |   |   |   | (3,593,388 | ) |
|                                                                          |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Balance at September 30, 2004                                                 |   |               | 601,175,135 |   |   | $      | 60,118 |                     |   | $      | 59,505,337         |   |   | $                      | (68,137,233 | )      |                 | $      | -      |   |   | $ | (456,874 | ) |   | $ | (9,028,652 | ) |

----

Table of Contents

----

|                                                                          |   | Common StockShares |        |   | Amount |   |    | AdditionalPaid-InCapital |   |   | AccumulatedDeficit |   |   | SubscriptionReceivable |        |   | DeferredCompensation |   |   | Total  |   |
|-------------------------------------------------------------------------------|--------|--------------------|-------------|--------|--------|--------|---------|--------------------------|--------|--------|--------------------|--------|--------|------------------------|-------------|--------|----------------------|--------|--------|--------|--------|
|                                                                          |   |               |        |   |   |   |    |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |
| Balance at September 30, 2004                                                 |   |               | 601,175,135 |   |   | $      | 60,118  |                     |   | $      | 59,505,337         |   |   | $                      | (68,137,233 | )      |                 | $      | -      |   |   | $ | (456,874 | ) |   | $ | (9,028,652 | ) |
|                                                                          |   |               |        |   |   |   |    |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for accounts payable                                      |   |               | 735,000     |   |   |   | 73      |                     |   |   | 359,716            |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 359,789 |   |
| Common stock issued for con -version of debt and payment of accrued interest  |   |               | 107,819,727 |   |   |   | 10,782  |                     |   |   | 22,678,054         |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 22,688,836 |   |
| Common stock issued in settle-ment of lawsuits                                |   |               | 595,000     |   |   |   | 59      |                     |   |   | 394,391            |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 394,450 |   |
| Variable accounting for repriced employee stock options                       |   |               | -           |   |   |   | -       |                     |   |   | 300,000            |   |   |                   | -           |   |                 |   | -      |   |   |   | (300,000 | ) |   |   | - |   |
| Beneficial conversion feature associated with the con-vertible line of credit |   |               | 347,517     |   |   |   | 347,517 |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Amortization of deferred compensation                                         |   |               | -           |   |   |   | -       |                     |   |   | -                  |   |   |                   | -           |   |                 |   | -      |   |   |   | 449,737 |   |   |   | 449,737 |   |
| Common stock issued for cash Less exercise of options And/or warrants         |   |               | 587,364     |   |   |   | 59      |                     |   |   | (59                | )      |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | - |   |
| Net loss                                                                      |   |               | -           |   |   |   | -       |                     |   |   | -                  |   |   |                   | (11,270,478 | )      |                 |   | -      |   |   |   |   |   |   |   | (11,270,478 | ) |
|                                                                          |   |               |        |   |   |   |    |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Balance at September 30, 2005                                                 |   |               | 710,912,226 |   |   | $      | 71,091  |                     |   | $      | 83,584,956         |   |   | $                      | (79,407,711 | )      |                 | $      | -      |   |   | $ | (307,137 | ) |   | $ | 3,941,199 |   |

----

Table of Contents

----

|                                                                  |   | Common StockShares |        |   | Amount |   |   | AdditionalPaid-InCapital |   |   | AccumulatedDeficit |   |   | SubscriptionReceivable |        |   | DeferredCompensation |   |   | Total  |   |
|-----------------------------------------------------------------------|--------|--------------------|-------------|--------|--------|--------|--------|--------------------------|--------|--------|--------------------|--------|--------|------------------------|-------------|--------|----------------------|--------|--------|--------|--------|
|                                                                  |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |
| Balance at September 30, 2005                                         |   |               | 710,912,226 |   |   | $      | 71,091 |                     |   | $      | 83,584,956         |   |   | $                      | (79,407,711 | )      |                 | $      | -      |   |   | $ | (307,137 | ) |   | $ | 3,941,199 |   |
|                                                                  |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Variable accounting for repriced employee stock options               |   |               | -           |   |   |   | -      |                     |   |   | (60,660            | )      |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | (60,660 | ) |
| Issuance of warrants for success fee                                  |   |               | -           |   |   |   | -      |                     |   |   | 5,154,500          |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 5,154,500 |   |
| Issuance of options as comp-ensation to consultants                   |   |               | -           |   |   |   | -      |                     |   |   | 1,145,000          |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 1,145,000 |   |
| Common stock issued upon exercise of warrants                         |   |               | 800,000     |   |   |   | 80     |                     |   |   | 159,920            |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 160,000 |   |
| Amortization of deferred Compensation                                 |   |               | -           |   |   |   | -      |                     |   |   | (307,137           | )      |   |                   | -           |   |                 |   | -      |   |   |   | 307,137 |   |   |   | - |   |
| Common stock issued for board compensation                            |   |               | 4,665,000   |   |   |   | 467    |                     |   |   | 1,976,081          |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 1,976,548 |   |
| Common stock issued for cash Less exercise of options And/or warrants |   |               | 2,611,756   |   |   |   | 261    |                     |   |   | (261               | )      |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | - |   |
| Net income                                                            |   |               | -           |   |   |   | -      |                     |   |   | -                  |   |   |                   | 23,171,536  |   |                 |   | -      |   |   |   | - |   |   |   | 23,171,536 |   |
|                                                                  |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Balance at September 30, 2006                                         |   |               | 718,988,982 |   |   | $      | 71,899 |                     |   | $      | 91,652,399         |   |   | $                      | (56,236,175 | )      |                 | $      | -      |   |   | $ | - |   |   | $ | 35,488,123 |   |

----

Table of Contents

----

|                                                                  |   | Common StockShares |        |   | Amount |   |   | AdditionalPaid-InCapital |   |   | AccumulatedDeficit |   |   | SubscriptionReceivable |        |   | DeferredCompensation |   |   | Total  |   |
|-----------------------------------------------------------------------|--------|--------------------|-------------|--------|--------|--------|--------|--------------------------|--------|--------|--------------------|--------|--------|------------------------|-------------|--------|----------------------|--------|--------|--------|--------|
|                                                                  |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |
| Balance at September 30, 2006                                         |   |               | 718,988,982 |   |   | $      | 71,899 |                     |   | $      | 91,652,399         |   |   | $                      | (56,236,175 | )      |                 | $      | -      |   |   | $ | - |   |   | $ | 35,488,123 |   |
|                                                                  |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Accounting for employee stock options                                 |   |               | -           |   |   |   | -      |                     |   |   | 175,440            |   |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | 175,440 |   |
| Common stock issued for cash Less exercise of options And/or warrants |   |               | 2,949,568   |   |   |   | 294    |                     |   |   | (294               | )      |   |                   | -           |   |                 |   | -      |   |   |   | - |   |   |   | - |   |
| Net income                                                            |   |               | -           |   |   |   | -      |                     |   |   | -                  |   |   |                   | (1,756,904  | )      |                 |   | -      |   |   |   | - |   |   |   | (1,756,904 | ) |
|                                                                  |   |               |        |   |   |   |   |                     |   |   |               |   |   |                   |        |   |                 |   |   |   |   |   |   |   |   |   |   |   |
| Balance at September 30, 2007                                         |   |               | 721,938,550 |   |   | $      | 72,193 |                     |   | $      | 91,827,545         |   |   | $                      | (57,993,079 | )      |                 | $      | -      |   |   | $ | - |   |   | $ | 33,906,659 |   |

----

Table of Contents

----

|                                                                                |   |   |        |   |   |   |        |   |   |   | Inception toSeptember 30, |   |
|-------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|--------|--------------------------------|--------|
|                                                                                |   | 2005   |        |   | 2006   |   |        | 2007   |   |   | 2007                           |   |
|                                                                                |   |   |        |   |   |   |        |   |   |   | (Unaudited)                    |   |
| Cash Flows from Operating Activities                                                |   |   |        |   |   |   |        |   |   |   |                           |   |
| Net income (loss)                                                                   |   | $      | (11,270,478 | )      |   | $      | 23,171,536  |   |   | $      | (1,756,904                     | )      |   | $ | (57,993,079 | ) |
| Adjustments to reconcile net income (loss) to net cash used by operating activities |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| Depreciation, depletion and amortization expenses                                   |   |   | 6,676       |   |   |   | 9,147       |   |   |   | 21,917                         |   |   |   | 1,385,930 |   |
| Write-offs and abandonments                                                         |   |   | -           |   |   |   | -           |   |   |   | -                              |   |   |   | 7,742,128 |   |
| Deferred income taxes                                                               |   |   | -           |   |   |   | (960,000    | )      |   |   | 480,000                        |   |   |   | (480,000 | ) |
| Compensatory stock options                                                          |   |   | -           |   |   |   | 1,084,340   |   |   |   | 175,440                        |   |   |   | 1,259,780 |   |
| Gain from settlement                                                                |   |   | (252,310    | )      |   |   | -           |   |   |   | -                              |   |   |   | (252,310 | ) |
| Gain on sale of partial interest in DRSTP concession                                |   |   | -           |   |   |   | (30,102,250 | )      |   |   | -                              |   |   |   | (30,102,250 | ) |
| Amortization of beneficial conversion feature associated with convertible debt      |   |   | 784,348     |   |   |   | -           |   |   |   | -                              |   |   |   | 2,793,929 |   |
| Amortization of deferred Compensation                                               |   |   | 449,737     |   |   |   | -           |   |   |   | -                              |   |   |   | 1,257,863 |   |
| Common stock issued for services                                                    |   |   | -           |   |   |   | -           |   |   |   | -                              |   |   |   | 20,897,077 |   |
| Common stock issued for settlements                                                 |   |   | -           |   |   |   | -           |   |   |   | -                              |   |   |   | 225,989 |   |
| Common stock issued for officer Bonuses                                             |   |   | -           |   |   |   | -           |   |   |   | -                              |   |   |   | 5,015,000 |   |
| Common stock issued for interest and penalties on convertible debt                  |   |   | -           |   |   |   | -           |   |   |   | -                              |   |   |   | 10,631,768 |   |
| Common stock issued for board compensation                                          |   |   | -           |   |   |   | 1,976,548   |   |   |   | -                              |   |   |   | 1,976,548 |   |
|                                                                                |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| Gain (loss) on extinguishment of debt                                               |   |   | 5,749,575   |   |   |   | -           |   |   |   | -                              |   |   |   | 5,682,368 |   |
| Changes in operating assets and liabilities:                                        |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| Prepaid expenses and other current assets                                           |   |   | (5,835      | )      |   |   | (1,040,938  | )      |   |   | 893,077                        |   |   |   | (179,954 | ) |
| Income tax refundable                                                               |   |   | -           |   |   |   | -           |   |   |   | (1,568,758                     | )      |   |   | (1,568,758 | ) |
| Accounts payable and other accrued liabilities                                      |   |   | 324,454     |   |   |   | (1,210,546  | )      |   |   | (1,598,173                     | )      |   |   | (2,612,896 | ) |
| Accrued federal income taxes                                                        |   |   | -           |   |   |   | 3,013,147   |   |   |   | (3,013,147                     | )      |   |   | - |   |
| Accrued officers' salaries                                                          |   |   | (76,275     | )      |   |   | -           |   |   |   | -                              |   |   |   | - |   |
| Accounts payable, and accrued liabilities, related party                            |   |   | 2,146,375   |   |   |   | (1,995,236  | )      |   |   | 169,175                        |   |   |   | 238,614 |   |
| Accrued interest - related party                                                    |   |   | 386,228     |   |   |   | -           |   |   |   | -                              |   |   |   | - |   |
| Accrued retirement obligation                                                       |   |   | -           |   |   |   | -           |   |   |   | -                              |   |   |   | 485,000 |   |
|                                                                                |   |   |        |   |   |   |        |   |   |   |                           |   |   |   |   |   |
| Net cash used by operating activities                                               |   | $      | (1,757,505  | )      |   | $      | (6,054,252  | )      |   | $      | (6,197,373                     | )      |   | $ | (33,597,253 | ) |

----

Table of Contents

----

|                                                       |   |   |      |   |   |   |       |   |   |   | Inception toSeptember 30, |   |
|------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|------------|--------|--------|--------|--------------------------------|--------|
|                                                       |   | 2005   |      |   | 2006   |   |       | 2007   |   |   | 2007                           |   |
|                                                       |   |   |      |   |   |   |       |   |   |   | (Unaudited)                    |   |
| Cash Flows from Investing Activities                       |   |   |      |   |   |   |       |   |   |   |                           |   |
| Release of restricted cash                                 |   | $      | 3,026     |   |   | $      | -          |   |   | $      | -                              |   |   | $ | - |   |
| Purchase of DRSTP concession                               |   |   | -         |   |   |   | -          |   |   |   | -                              |   |   |   | (5,679,000 | ) |
| Proceeds from sale of partial interest In DRSTP concession |   |   | -         |   |   |   | 45,900,000 |   |   |   | -                              |   |   |   | 45,900,000 |   |
| Purchase of furniture and equipment                        |   |   | (27,303   | )      |   |   | (3,124     | )      |   |   | (71,808                        | )      |   |   | (877,200 | ) |
|                                                       |   |   |      |   |   |   |       |   |   |   |                           |   |   |   |   |   |
| Net cash provided (used) by investing Activities           |   |   | (24,277   | )      |   |   | 45,896,876 |   |   |   | (71,808                        | )      |   |   | 39,343,800 |   |
|                                                       |   |   |      |   |   |   |       |   |   |   |                           |   |   |   |   |   |
| Cash Flows from Financing Activities:                      |   |   |      |   |   |   |       |   |   |   |                           |   |   |   |   |   |
| Proceeds from warrants exercised                           |   |   | -         |   |   |   | 160,000    |   |   |   | -                              |   |   |   | 160,000 |   |
| Proceeds from common stock, net of expenses                |   |   | -         |   |   |   | -          |   |   |   | -                              |   |   |   | 6,955,049 |   |
| Proceeds from related party line of credit                 |   |   | 2,750,000 |   |   |   | -          |   |   |   | -                              |   |   |   | 2,750,000 |   |
| Proceeds from related party debt                           |   |   | -         |   |   |   | -          |   |   |   | -                              |   |   |   | 158,700 |   |
| Proceeds from related party convertible debt               |   |   | -         |   |   |   | -          |   |   |   | -                              |   |   |   | 8,207,706 |   |
| Proceeds from convertible debt                             |   |   | -         |   |   |   | -          |   |   |   | -                              |   |   |   | 9,019,937 |   |
| Proceeds from note payable to bank                         |   |   | -         |   |   |   | -          |   |   |   | -                              |   |   |   | 175,000 |   |
| Proceeds from shareholder loans                            |   |   | -         |   |   |   | -          |   |   |   | -                              |   |   |   | 1,845,809 |   |
| Collection of stock subscription receivable                |   |   | -         |   |   |   | -          |   |   |   | -                              |   |   |   | 913,300 |   |
| Repayment of shareholder loans                             |   |   | -         |   |   |   | -          |   |   |   | -                              |   |   |   | (1,020,607 | ) |
| Repayment of long-term debt                                |   |   | -         |   |   |   | -          |   |   |   | -                              |   |   |   | (189,508 | ) |
|                                                       |   |   |      |   |   |   |       |   |   |   |                           |   |   |   |   |   |
| Net cash provided by investing activities                  |   |   | 2,750,000 |   |   |   | 160,000    |   |   |   | -                              |   |   |   | 28,975,386 |   |
|                                                       |   |   |      |   |   |   |       |   |   |   |                           |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents       |   |   | 968,218   |   |   |   | 40,002,624 |   |   |   | (6,269,181                     | )      |   |   | 34,721,933 |   |
|                                                       |   |   |      |   |   |   |       |   |   |   |                           |   |   |   |   |   |
| Cash and cash equivalents, beginning of period             |   |   | 20,272    |   |   |   | 988,490    |   |   |   | 40,991,114                     |   |   |   | - |   |
|                                                       |   |   |      |   |   |   |       |   |   |   |                           |   |   |   |   |   |
| Cash and cash equivalents, end of period                   |   | $      | 988,490   |   |   | $      | 40,991,114 |   |   | $      | 34,721,933                     |   |   | $ | 34,721,933 |   |
|                                                       |   |   |      |   |   |   |       |   |   |   |                           |   |   |   |   |   |
| Supplemental Disclosure of Cash Flow Information           |   |   |      |   |   |   |       |   |   |   |                           |   |   |   |   |   |
| Cash paid for interest expense                             |   | $      | -         |   |   | $      | -          |   |   | $      | -                              |   |   | $ | - |   |
| Cash paid for income taxes                                 |   |   | -         |   |   |   | -          |   |   |   | 2,378,905                      |   |   |   | - |   |

----

Table of Contents

----

----

Table of Contents

----

Table of Contents

----

Table of Contents

|                                            |   | 2007   |      |   | 2006   |   |
|-------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                            |   |   |      |   |   |   |
|  Accrued success fee                       |   | $      | -         |   |   | $      | 1,500,000 |   |
|  Accrued stock payable – success fee |   |   | 4,803,750 |   |   |   | 4,803,750 |   |
|  Accrued settlement payable                |   |   | -         |   |   |   | 175,000 |   |
|  Accounts payable                          |   |   | 380,228   |   |   |   | 305,254 |   |
|                                            |   |   |      |   |   |   |   |   |
|                                            |   | $      | 5,183,978 |   |   | $      | 6,784,004 |   |

| JDZ Block # |   | ERHCOriginalParticipatingInterest (1) |   | ERHCJoint BidParticipatingInterest |   | ParticipatingInterest(s) Sold |   | Current ERHCRetainedParticipatingInterest |
|-------------|--------|---------------------------------------|--------|------------------------------------|--------|-------------------------------|--------|-------------------------------------------|
|        |   |                                  |   |                               |   |                          |   |                                      |
| 2           |   | 30%                                   |   | 35%                                |   | 43% (2)                       |   | 22%                                       |
| 3           |   | 20%                                   |   | 5%                                 |   | 15% (3)                       |   | 10%                                       |
| 4           |   | 25%                                   |   | 35%                                |   | 33.3% (4)                     |   | 26.7% (6)                                 |
| 5           |   | 15%                                   |   | (5)                                |   | (5)                           |   | (5)                                       |
| 6           |   | 15%                                   |   | (5)                                |   | (5)                           |   | (5)                                       |
| 9           |   | 20%                                   |   | (5)                                |   | (5)                           |   | (5)                                       |

----

Table of Contents

| (1)  | Original Participating Interest granted pursuant to the Option Agreement, dated April 2, 2003, between DRSTP and ERHC (the “2003 Option Agreement”). |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | In March 2006, ERHC sold an aggregate 28.67% participating interest to Sinopec and an aggregate 14.33% participating interest to Addax Ltd. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | In February 2006, ERHC sold a 15% participating interest to Addax Sub. |
|-----|------------------------------------------------------------------------|

| (4) | By a Participation Agreement made in November 2005 and subsequently amended, ERHC sold 33.3% participating interest to Addax. |
|-----|-------------------------------------------------------------------------------------------------------------------------------|

| (5) | No contracts have been entered into as of the date hereof. |
|-----|------------------------------------------------------------|

| (6) | Includes the 9% reclaimed by ERHC from Godsonic by ERHC on behalf of the ERHC/Addax consortium following Godsonic's inability to fulfill financial and other conditions upon which the 9% was to have been assigned to Godsonic. Pursuant to the Amendment to the Participation Agreement made on April 11, 2006, the 9% is subject to distribution between Addax (7.2%) and ERHC (1.8%), if agreement is reached between the partieson the amount payable by Addax to ERHC for said interest. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|    |   | CostBasis |      |   | CashProceeds |   |       | SuccessFees (1) |   |   | GainLoss   |   |
|---------|--------|-----------|-----------|--------|--------------|--------|------------|-----------------|--------|--------|------------|--------|
|    |   |      |      |   |         |   |       |            |   |   |       |   |
| Block 2 |   | $         | 946,500   |   |         | $      | 20,400,000 |            |   | $      | 12,958,250 |   |   | $ | 6,495,250 |   |
|    |   |      |      |   |         |   |       |            |   |   |       |   |   |   |   |   |
| Block 3 |   |      | 946,500   |   |         |   | 7,500,000  |            |   |   | -          |   |   |   | 6,553,500 |   |
|    |   |      |      |   |         |   |       |            |   |   |       |   |   |   |   |   |
| Block 4 |   |      | 946,500   |   |         |   | 18,000,000 |            |   |   | -          |   |   |   | 17,053,500 |   |
|    |   |      |      |   |         |   |       |            |   |   |       |   |   |   |   |   |
| Total   |   | $         | 2,839,500 |   |         | $      | 45,900,000 |            |   | $      | 12,958,250 |   |   | $ | 30,102,250 |   |

----

Table of Contents

|                         |   | 2007   |      |   | 2006   |   |
|------------------------------|--------|--------|-----------|--------|--------|--------|
|                         |   |   |      |   |   |   |
| Net operating losses         |   | $      | 931,241   |   |   | $      | 3,410,000 |   |
| Accrual for asset retirement |   |   | 164,900   |   |   |   | 164,900 |   |
|                         |   |   |      |   |   |   |   |   |
| Total deferred tax assets    |   |   | 1,096,141 |   |   |   | 3,574,900 |   |
| Valuation allowance          |   |   | (616,141  | )      |   |   | (2,614,900 | ) |
|                         |   |   |      |   |   |   |   |   |
| Net deferred tax asset       |   | $      | 480,000   |   |   | $      | 960,000 |   |

|                                                     |   | Years Ended September 30, |       |
|----------------------------------------------------------|--------|--------------------------------|------------|
|                                                     |   | 2007                           |       |   | 2006 |   |   | 2005 |   |
|                                                     |   |                           |       |   |   |   |   |   |   |
| Income tax benefit (provision) at federal statutory rate |   | $                              | 1,183,167  |   |   | $ | (8,579,742 | ) |   | $ | 3,831,962 |   |
| Gain on sale of assets                                   |   |                           | -          |   |   |   | 59,243 |   |   |   | - |   |
| Change in valuation allowance                            |   |                           | 1,998,759  |   |   |   | 19,179,493 |   |   |   | 340,989 |   |
| Expiration and adjustment of NOL’s                 |   |                           | (1,364,518 | ) |   |   | (12,266,000 | ) |   |   | (1,022,244 | ) |
| Director’s stock compensation                      |   |                           | (30,090    | ) |   |   | (44,896 | ) |   |   | (627,130 | ) |
| Consultants stock option expense                         |   |                           | (59,650    | ) |   |   | (368,676 | ) |   |   | - |   |
| Accrued interest not paid                                |   |                           | -          |   |   |   | - |   |   |   | (390,064 | ) |
| Amortization of deferred compensation                    |   |                           | -          |   |   |   | - |   |   |   | (152,910 | ) |
| Loss on extinguishment of debt                           |   |                           | -          |   |   |   | - |   |   |   | (1,954,856 | ) |
| State income tax                                         |   |                           | -          |   |   |   | (9,853 | ) |   |   | - |   |
| Penalties                                                |   |                           | (3,621     | ) |   |   | (31,771 | ) |   |   | - |   |
| Other                                                    |   |                           | (1,047     | ) |   |   | (798 | ) |   |   | (25,747 | ) |
|                                                     |   |                           |       |   |   |   |   |   |   |   |   |   |
| Income tax benefit (provision)                           |   | $                              | 1,723,000  |   |   | $ | (2,063,000 | ) |   | $ | - |   |

----

Table of Contents

----

Table of Contents

|                           |   | Warrants |       |   | Options |      |
|--------------------------------|--------|----------|------------|--------|---------|-----------|
|                           |   | 2007     |       |   | 2006    |      |   | 2005 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                           |   |     |       |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding, beginning of year |   |     | 20,866,940 |   |    |      | 15,166,940 |   |   |   | 16,166,940 |   |   |   | - |   |   |   | 3,000,000 |   |   |   | 3,000,000 |   |
| Granted                        |   |     | -          |   |    |      | 6,500,000 |   |   |   | - |   |   |   | 1,000,000 |   |   |   | - |   |   |   | - |   |
| Exercised                      |   | (a)      | (5,625,000 | )      |    | (b)  | (800,000 | ) |   | (c)  | (1,000,000 | ) |   |   | - |   |   | (d)  | (2,000,000 | ) |   |   | - |   |
| Expired/cancelled              |   |     | (1,840,000 | )      |    |      | - |   |   |   | - |   |   |   | - |   |   |   | (1,000,000 | ) |   |   | - |   |
|                           |   |     |       |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding, end of year       |   |     | 13,401,940 |   |    |      | 20,866,940 |   |   |   | 15,166,940 |   |   |   | 1,000,000 |   |   |   | - |   |   |   | 3,000,000 |   |
|                           |   |     |       |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercisable                    |   |     | 13,401,940 |   |    |      | 20,866,940 |   |   |   | 15,166,940 |   |   |   | - |   |   |   | - |   |   |   | 2,000,000 |   |

|                           |   | Warrants |   |   | Options |   |
|--------------------------------|--------|----------|--------|--------|---------|--------|
|                           |   | 2007     |   |   | 2006    |   |   | 2005 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                           |   |     |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding, beginning of year |   | $        | 0.37   |   |    | $      | 0.37 |   |   | $ | 0.36 |   |   | $ | - |   |   | $ | - |   |   | $ | 0.30 |   |
| Granted                        |   |     | -      |   |    |   | 0.36 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Exercised                      |   |     | 0.20   |   |    |   | 0.20 |   |   |   | 0.20 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Expired/cancelled              |   |     | (0.50  | )      |    |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                           |   |     |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding, end of year       |   | $        | 0.43   |   |    | $      | 0.37 |   |   | $ | 0.37 |   |   | $ | - |   |   | $ | - |   |   | $ | 0.30 |   |
|                           |   |     |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercisable                    |   | $        | 0.43   |   |    | $      | 0.37 |   |   | $ | 0.37 |   |   | $ | - |   |   | $ | - |   |   | $ | 0.30 |   |

----

Table of Contents

| GrantGrouping         |   | WarrantsOutstanding |      |   | WeightedAverage Exercise Price |   |   | ExercisePriceRange |   |   | WeightedAverageContractualYears |   |
|-----------------------|--------|---------------------|-----------|--------|--------------------------------|--------|--------|--------------------|--------|--------|---------------------------------|--------|
|                  |   |                |      |   |                           |   |   |               |   |   |                            |   |
| Chrome                |   |                | 2,500,000 |   |                           | $      | 0.25   |               |   | $      | 0.25                            |   |   |   | 1.27 |   |
| Common stock purchase |   |                | 9,731,940 |   |                           |   | 0.41   |               |   |   | 0.20-0.55                       |   |   |   | 1.13 |   |
| S-1/S-3 contingent    |   |                | 1,050,000 |   |                           |   | 0.75   |               |   |   | 0.75                            |   |   | (a) |   |
| Other                 |   |                | 120,000   |   |                           |   | 3.00   |               |   |   | 3.00                            |   |   |   | 1.25 |   |

----

Table of Contents

----

Table of Contents

| Year Ending September 30, |   | Amount |    |
|---------------------------|--------|--------|---------|
|                      |   |   |    |
| 2008                      |   | $      | 107,040 |   |
| 2009                      |   |   | 107,040 |   |
| 2010                      |   |   | 107,040 |   |
| 2011                      |   |   | 107,040 |   |
| 2012                      |   |   | 26,760  |   |

| Year |   | CashCompensation |   |   | CommonStockIssuances |   |      | Value ofCommonStockIssuances |   |   | TotalCompensation |   |
|------|--------|------------------|--------|--------|----------------------|--------|-----------|------------------------------|--------|--------|-------------------|--------|
| 2007 |   | $                | 38,100 |   |                 |   | 60,000    |                         |   | $      | 17,700            |   |   | $ | 55,800 |   |
| 2006 |   | $                | 48,900 |   |                 |   | 60,000    |                         |   | $      | 24,378            |   |   | $ | 73,278 |   |
| 2005 |   | $                | 33,300 |   |                 |   | 4,085,000 |                         |   | $      | 1,736,125         |   |   | $ | 1,769,425 |   |

|                                                            |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|-----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                            |   |   |   |   |   |   |   |   |   |
| Non-cash operating and financing activities:                    |   |   |   |   |   |   |   |   |   |
| Stock issued in exchange for:                                   |   |   |   |   |   |   |   |   |   |
| Accounts payable and accrued liabilities                        |   | $      | -      |   |   | $      | -      |   |   | $ | 359,790 |   |
| Accrued salaries                                                |   |   | -      |   |   |   | -      |   |   |   | 394,450 |   |
| Accrued interest                                                |   |   | -      |   |   |   | -      |   |   |   | 84,852 |   |
| Accrued interest, related party                                 |   |   | -      |   |   |   | -      |   |   |   | 2,620,295 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-cash investing and financing activities:                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock issued for conversion of non-related party debt to equity |   |   | -      |   |   |   | -      |   |   |   | 1,592,521 |   |
| Beneficial conversion feature associated with convertible debt  |   |   | -      |   |   |   | -      |   |   |   | 347,517 |   |
| Exchange of convertible and non convertible Debt, related party |   |   | -      |   |   |   | -      |   |   |   | 10,134,084 |   |
| Stock issued for conversion of related party Debt to equity     |   |   | -      |   |   |   | -      |   |   |   | 12,634,084 |   |

----

Table of Contents

|                                                  | For the Year Ended September 30, 2007 |   |
|-------------------------------------------------------|--------------------------------------------|--------|
|                                                  | First                                      |   | Second |   | Third |   | Fourth |   |
|                                                  | Quarter                                    |   | Quarter |   | Quarter |   | Quarter |   |
|                                                  |                                       |   |   |   |   |   |   |   |
| General and administrative expenses                   |                                       | $      | 1,334,313 |   |   | $ | 1,181,541 |   |   | $ | 1,083,539 |   |   | $ | 1,377,372 |   |
| Interest expense                                      |                                       |   | 461 |   |   |   | 461 |   |   |   | 461 |   |   |   | 460 |   |
| Other income                                          |                                       |   | 543,632 |   |   |   | 540,495 |   |   |   | 457,541 |   |   |   | 457,036 |   |
| Gain (loss) on settlements                            |                                       |   | - |   |   |   | - |   |   |   | (500,000 | ) |   |   | - |   |
| Benefit (provision) for income tax                    |                                       |   | 269,000 |   |   |   | 197,000 |   |   |   | 539,241 |   |   |   | 717,759 |   |
| Net income (loss) attributable to common Stockholders |                                       |   | (522,142 | ) |   |   | (444,507 | ) |   |   | (587,218 | ) |   |   | (203,037 | ) |
| Basic and diluted earnings per share                  |                                       | $      | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |

|                                                     | For the Year Ended September 30, 2006 |   |
|----------------------------------------------------------|--------------------------------------------|--------|
|                                                     | First                                      |   | Second |   | Third |   | Fourth |   |
|                                                     | Quarter                                    |   | Quarter |   | Quarter |   | Quarter |   |
|                                                     |                                       |   |   |   |   |   |   |   |
| General and administrative expenses                      |                                       | $      | 1,232,792 |   |   | $ | 1,727,524 |   |   | $ | 1,459,282 |   |   | $ | 1,569,158 |   |
| Gain on sale of partial interest in DRSTP concession fee |                                       | $      |   |   |   |   | 30,102,250 |   |   |   | - |   |   |   | - |   |
| Interest expense                                         |                                       |   | 461 |   |   |   | 461 |   |   |   | 461 |   |   |   | 716 |   |
| Other income                                             |                                       |   | 4,269 |   |   |   | 27,399 |   |   |   | 583,269 |   |   |   | 508,204 |   |
| Benefit (provision) for income tax                       |                                       |   | - |   |   |   | (2,340,000 | ) |   |   | 300,000 |   |   |   | (23,000 | ) |
| Net loss attributable to common stockholders             |                                       |   | (1,228,984 | ) |   |   | 26,061,664 |   |   |   | (621,474 | ) |   |   | (1,039,670 | ) |
| Basic and diluted earnings per share                     |                                       | $      | - |   |   | $ | 0.04 |   |   | $ | - |   |   | $ | - |   |

|                                         | For the Year Ended September 30, 2005 |   |
|----------------------------------------------|--------------------------------------------|--------|
|                                         | First                                      |   | Second |   | Third |   | Fourth |   |
|                                         | Quarter                                    |   | Quarter |   | Quarter |   | Quarter |   |
|                                         |                                       |   |   |   |   |   |   |   |
| General and administrative expenses          |                                       | $      | 643,235 |   |   | $ | 980,821 |   |   | $ | 233,704 |   |   | $ | 2,794,699 |   |
| Interest expense                             |                                       |   | 1,045,775 |   |   |   | 100,551 |   |   |   | 461 |   |   |   | 461 |   |
| Other income                                 |                                       |   | - |   |   |   | 260,013 |   |   |   | 10,537 |   |   |   | 8,254 |   |
| Loss on extinguishments of debt              |                                       |   | 5,749,575 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net loss attributable to common stockholders |                                       |   | (7,438,585 | ) |   |   | (821,359 | ) |   |   | (223,628 | ) |   |   | (2,786,906 | ) |
| Basic and diluted earnings per share         |                                       | $      | (0.01 | ) |   | $ | - |   |   | $ | - |   |   | $ | - |   |

----

Table of Contents

 9.

 9A

9B.

----

Table of Contents

10.  

| Name                      |   | Age    |   | Position                                      |
|---------------------------|--------|--------|--------|-----------------------------------------------|
|                      |   |   |   |                                          |
| Nicolae Luca         |   | 48     |   | Interim Chief Executive Officer, and Director |
| Howard Jeter         |   | 60     |   | Director                                      |
| Andrew Uzoigwe       |   | 65     |   | Director                                      |
| Clement Nwizubo           |   | 55     |   | Director                                      |
| Peter C. Ntephe |   | 41     |   | Corporate Secretary                           |

----

Table of Contents

|            |   | Fees Earned orPaid in Cash |   |   | StockAwards |   |   | OptionAwards |   |   | Non-EquityIncentive PlanCompensation |   |   | Change inPension Valueand NonqualifiedDeferredCompensationEarnings |   |   | All OtherCompensation |   |   | Total  |   |
|-----------------|--------|----------------------------|--------|--------|-------------|--------|--------|--------------|--------|--------|--------------------------------------|--------|--------|--------------------------------------------------------------------|--------|--------|-----------------------|--------|--------|--------|--------|
| Name            |   | ($)                        |   |   | ($)(1)      |   |   | ($)(2)       |   |   | ($)                                  |   |   | ($)                                                                |   |   | ($)                   |   |   | ($)    |   |
|            |   |                       |   |   |        |   |   |         |   |   |                                 |   |   |                                                               |   |   |                  |   |   |   |   |
| Sir Emeka Offor |   |                       | 38,100 |   |        |   | 17,700 |         |   |   | --                                   |   |   |                                                               | --     |   |                  |   | --     |   |   |   | -- |   |   |   | 55,800 |   |
| Nicolae Luca    |   |                       | 17,500 |   |        |   | 17,700 |         |   |   | --                                   |   |   |                                                               | --     |   |                  |   | --     |   |   |   | -- |   |   |   | 35,200 |   |
| Howard Jeter    |   |                       | 39,000 |   |        |   | 17,700 |         |   |   | --                                   |   |   |                                                               | --     |   |                  |   | --     |   |   |   | -- |   |   |   | 56,700 |   |
| Andrew Uzoigwe  |   |                       | 36,750 |   |        |   | 17,700 |         |   |   | --                                   |   |   |                                                               | --     |   |                  |   | --     |   |   |   | -- |   |   |   | 54,450 |   |
| Clement Nwizubo |   |                       | 39,500 |   |        |   | 17,700 |         |   |   | --                                   |   |   |                                                               | --     |   |                  |   | --     |   |   |   | -- |   |   |   | 57,200 |   |

|   | (1) | The amounts included in the “Stock Awards” column represent the compensation cost  of  $0.295 per share recognized by the Company in 2007 related to non-option awards to directors, computed in accordance with Statement of Financial Accounting Standards No. 123(R), or SFAS No. 123(R). As of September 30, 2007, no non-employee directors had any aggregate outstanding deferred shares. .  Thenumber of shares underlying stock awards to directors during fiscal 2007 were as follows: Sir Emeka Offor – 60,000 shares, Nicolae Luca – 60,000 shares, Howard Jeter – 60,000 shares, Andrew Uzoigwe – 60,000 shares and Clement Nwizubo – 60,000 shares.  The disclosure relates solely to grants of restricted stock (Under Rule 144) in 2007. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|   | (2) | The amounts included in the “Option Awards” column represent the compensation cost recognized by the Company in related to stock option awards to directors, computed in accordance with SFAS No. 123(R). There were no stock option awards to directors in 2007. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

 11

----

Table of Contents

|   | • | a base salary rate typically targeted at a level that is competitive in our market as determined by the Compensation Committee, |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------|

|   | • | other equity awards, including equity grants to new hires to attract talented personnel and occasional grants of options/restricted shares to retain our talented employees, and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | a comprehensive benefits package. |
|--------|---------|-----------------------------------|

----

Table of Contents

| Name and Principal Position |   | Year   |   | Salary($) |    |   | Bonus($) |   |    | StockAwards($) (1) |   |   | OptionAwards($) (4) |   |   | Non-EquityIncentive PlanCompensation($) |    |   | Changein PensionValue andNonqualifiedDeferredCompensationEarnings($)(2) |   |    | All OtherCompensation($) |   |   | Total($) |   |
|-----------------------------|--------|--------|--------|-----------|---------|--------|----------|--------|---------|--------------------|--------|--------|---------------------|--------|--------|-----------------------------------------|---------|--------|-------------------------------------------------------------------------|--------|---------|--------------------------|--------|--------|----------|--------|
| Nicolae Luca                |   |   |   |      |    |   |     |   |    |               |   |   |                |   |   |                                    |    |   |                                                                    |   |    |                     |   |   |     |   |
| Interim Chief               |   |   |   |      |    |   |     |   |    |               |   |   |                |   |   |                                    |    |   |                                                                    |   |    |                     |   |   |     |   |
| Executive                   |   | 2007   |   |      | ---     |   |     |   | — |               |   |   | ---                 |   |   |                                    | — |   |                                                                    |   | — |                     |   |   | —  |   |   |   | — |   |   |   | --- |   |
| Officer                     |   | 2006   |   |      | ---     |   |     |   | ---     |               |   |   | ---                 |   |   |                                    | ---     |   |                                                                    |   | --      |                     |   |   | --       |   |   |   | -- |   |   |   | --- |   |
| James Ledbetter             |   |   |   |      |    |   |     |   |    |               |   |   |                |   |   |                                    |    |   |                                                                    |   |    |                     |   |   |     |   |   |   |   |   |   |   |   |   |
| Technical Vice              |   | 2007   |   |      | 191,083 |   |     |   | — |               |   |   | —             |   |   |                                    | 175,440 |   |                                                                    |   | — |                     |   |   | —  |   |   |   | — |   |   |   | 366,523 |   |
| President                   |   | 2006   |   |      | ---     |   |     |   | --      |               |   |   | ---                 |   |   |                                    | ---     |   |                                                                    |   | ---     |                     |   |   | ---      |   |   |   | --- |   |   |   | --- |   |
| Walter Brandhuber           |   |   |   |      |    |   |     |   |    |               |   |   |                |   |   |                                    |    |   |                                                                    |   |    |                     |   |   |     |   |   |   |   |   |   |   |   |   |
| Former Chief                |   |   |   |      |    |   |     |   |    |               |   |   |                |   |   |                                    |    |   |                                                                    |   |    |                     |   |   |     |   |   |   |   |   |   |   |   |   |
| Executive                   |   | 2007   |   |      | ---     |   |     |   | — |               |   |   | —             |   |   |                                    | — |   |                                                                    |   | — |                     |   |   | —  |   |   |   | — |   |   |   | --- |   |
| Officer                     |   | 2006   |   |      | 125,000 |   |     |   | --      |               |   |   | ---                 |   |   |                                    | ---     |   |                                                                    |   | ---     |                     |   |   | ---      |   |   |   | --- |   |   |   | 125,000 |   |
| Ali Memon                   |   |   |   |      |    |   |     |   |    |               |   |   |                |   |   |                                    |    |   |                                                                    |   |    |                     |   |   |     |   |   |   |   |   |   |   |   |   |
| Former Chief                |   |   |   |      |    |   |     |   |    |               |   |   |                |   |   |                                    |    |   |                                                                    |   |    |                     |   |   |     |   |   |   |   |   |   |   |   |   |
| Executive                   |   | 2007   |   |      | ---     |   |     |   | — |               |   |   | —             |   |   |                                    | — |   |                                                                    |   | — |                     |   |   | —  |   |   |   | — |   |   |   | --- |   |
| Officer (3)                 |   | 2006   |   |      | 58,333  |   |     |   | --      |               |   |   | ---                 |   |   |                                    | ---     |   |                                                                    |   | ---     |                     |   |   | ---      |   |   |   | --- |   |   |   | 58,333 |   |
| Sylvan Odobulu              |   | 2007   |   |      | 111,018 |   |     |   | — |               |   |   | —             |   |   |                                    | — |   |                                                                    |   | — |                     |   |   | —  |   |   |   | — |   |   |   | 111,018 |   |
| Controller                  |   | 2006   |   |      | 9,000   |   |     |   | --      |               |   |   | ---                 |   |   |                                    | ---     |   |                                                                    |   | ---     |                     |   |   | ---      |   |   |   | --- |   |   |   | 9,000 |   |

----

Table of Contents

| (1) | In connection with service rendered as a member of our board of directors, Mr. Luca was issued 60,000 shares in each of the years ended September 30, 2007 and 2006. These shares were valued at $17,700 and $24,378 for the years ended September 30, 2007 and 2006, respectively. These values reflect the dollar amounts recognized for financial statement reporting purposes for the fiscal years ended September 30, 2007and 2006, in accordance with FAS123(R) of awards made pursuant to the 2004 Plan excluding any reduction in value due to potential service-based forfeitures, and thus may include amounts from awards granted in and prior to 2007. Assumptions used in the calculation of these amounts are included in footnote 8 to the Company's audited financial statements for the fiscal year ended September 30, 2007 included in this Annual Report on Form 10-K. Mr. Luca also received cash compensation of $17,500 and $26,250 for servicerendered as a member of our board of directors for the years ended September 30, 2007 and 2006, respectively. Mr. Luca received no additional compensation in his roleas Interim Chief Executive Officer and his compensation is described in “Compensation of Directors”. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | ERHC does not provide either a pension plan or a nonqualified deferred compensation plan for any of its employees. |
|-----|--------------------------------------------------------------------------------------------------------------------|

| (3) | Pursuant to Mr. Memon’s employment agreement, Mr. Memon exercised on a cashless basis an option to purchase up to 2,000,000 shares of Company common stock in June 2006 and acquired 1,272,727 shares. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Mr. Ledbetter was issued 1,000,000 stock options at an exercise price of $0.43 per share  on December 18, 2006. The option exercise price is $0.43 per share, the closing price of the Company's common stock on the date of grant. The options vest over a one-year period beginning on the date of grant. Fair value of $22.39 per share or a total of $223,900 was calculated using the Black-Scholes option pricing model.Variables used in this option-pricing model for the year ended September 30, 2007 were (1) 4.90% discount rate, (2) option life is the expected remaining life of the options as of each year end, (3) expected volatility of 75.00%, and (4) zero expected dividends. Option expense of $175,440 was recorded during the year ended September 30, 2007 in accordance with FAS123(R). . |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                | Grant Date |   | Estimated Future PayoutsUnder Non-Equity IncentivePlan Awards |    |   | Estimated Future PayoutsUnder Equity IncentivePlan Awards |   |    | All OtherStock Awards:Number ofShares ofStock or Units(#)(1) |   |   | All OtherOptionAwards:Number ofSecuritiesUnderlyingOptions(#)(2) |   |   | Exerciseor BasePrice ofOptionAwards($/ Sh) |    |   | GrantDate FairValue ofStock andOptionAwards($)(3) |   |
|---------------------|------------|--------|---------------------------------------------------------------|---------|--------|-----------------------------------------------------------|--------|---------|--------------------------------------------------------------|--------|--------|------------------------------------------------------------------|--------|--------|--------------------------------------------|---------|--------|---------------------------------------------------|--------|
|                |       |   | Threshold($)                                                  |    |   | Target($)                                                 |   |    | Maximum($)                                                   |   |   | Threshold(#)                                                     |   |   | Target(#)                                  |    |   | Maximum(#)                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nicolae Luca (4)    |       |   |                                                          | — |   |                                                      |   | — |                                                         |   |   | —                                                          |   |   |                                       | — |   |                                              |   | — |   |   |   | — |   |   |   | --- |   |   |   | — |   |   |   | — |   |   |   | --- |   |
| James Ledbetter (2) | 12/18/2006 |   |                                                          | — |   |                                                      |   | — |                                                         |   |   | —                                                          |   |   |                                       | — |   |                                              |   | — |   |   |   | — |   |   |   | — |   |   |   | 1,000,000 |   |   |   | 0.43 |   |   |   | 223,900 |   |
| Sylvan Odobulu      |       |   |                                                          | — |   |                                                      |   | — |                                                         |   |   | —                                                          |   |   |                                       | — |   |                                              |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |

| (1) | The number in this column reflects the rule 144 restricted stock awarded in 2007 pursuant to the 2004 Plan. |
|-----|-------------------------------------------------------------------------------------------------------------|

| (2) | Mr. Ledbetter received this retention grant on December 18, 2006. The option exercise price is $0.43 per share, the closing price of the Company’s common stock on the date of grant. The options vest over a one-year period beginning on the date of grant. Fair value of $22.39 per share or a total of $223,900 was calculated using the Black-Scholes option pricing model. Variables used in this option-pricing modelfor the year ended September 30, 2007 were (1) 4.90% discount rate, (2) option life is the expected remaining life of the options as of each year end, (3) expected volatility of 75.00%, and (4) zero expected dividends. Option expense of $175,440 was recorded during the year ended September 30, 2007 in accordance with FAS123R |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Reflects the dollar amounts recognized for financial statement reporting purposes for the fiscal year ended September 30, 2007 in accordance with FAS123R of awards made pursuant to the 2005 Plan excluding any reduction in value due to potential service-based forfeitures. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Mr. Lucas is a director serving on an interim basis as Chief Executive Officer. He received no compensation associated with the position of Interim Chief Executive officer and the grant of common stock associated with his service as a director is described in “Compensation of Directors”. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|            |   | Option Awards                                     |    |   | Stock Awards |   |
|-----------------|--------|---------------------------------------------------|---------|--------|--------------|--------|
| Name            |   | Number ofSecuritiesUnderlying Unexercised Options |    |   |         |   |   | EquityIncentivePlan Awards:Number ofSecuritiesUnderlyingUnexercisedUnearnedOptions(#) |   | OptionExercisePrice($) |   |   | OptionExpirationDate |   |   | Number ofShares orUnits ofStock ThatHave NotVested(#) |   |   | Market Valueof Shares orUnits ofStock ThatHave NotVested($)(1) |   |   | EquityIncentivePlan Awards:Number ofUnearnedShares,Unitsor OtherRights ThatHave NotVested(#) |   |   | EquityIncentivePlan Awards:Market orPayout ValueofUnearnedShares, Unitsor OtherRights ThatHave NotVested($) |   |
|            |   | Exercisable                                       |    |   |         |   |   | Unexercisable |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nicolae Luca    |   |                                              | — |   |         |   |   |   |   | — |   |   |   |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| James Ledbetter |   |                                              | — |   |         |   | (4 | ) |   |   | 1,000,000 |   |   |   | (4 | ) |   |   | — |   |   | $ | 0.43 |   |   | 12/18/2008 |   |   |   | 1,000,000 |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Sylvan Odobulu  |   |                                              | — |   |         |   |   |   |   |   | — |   |   |   |   |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |

| (1) | The closing price of ERHC’s common stock on September 28, 2007 of $0.28 was used in the calculations. |
|-----|-------------------------------------------------------------------------------------------------------------|

| (4) | The options were granted on December 18, 2006 and vest upon the completion of one year of service. |
|-----|----------------------------------------------------------------------------------------------------|

|            |   | Option Awards                          |   | Stock Awards                 |   |
|-----------------|--------|----------------------------------------|--------|------------------------------|--------|
| Name            |   | Number ofShares Acquiredon Exercise(#) |   | Value Realized onExercise($) |   | Number ofShares Acquiredon Vesting(#) |   | Value RealizedonVesting($) |   |
| Nicolae Luca    |   |                                   |   | —                      |   |   |   | — |   |   |   | — |   |   |   | — |   |
| James Ledbetter |   |                                   |   | —                      |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Sylvan Odobulu  |   |                                   |   | —                      |   |   |   | — |   |   |   | — |   |   |   | — |   |

----

Table of Contents

|   | · | Termination  based on death or disability, termination for cause, termination by notice or termination by expiration without renewal of the employment agreement – No amount due. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Termination without cause – Three months salary or  $57,501 due |
|--------|--------|---------------------------------------------------------------------------------|

| Plan Category                                              |   | Number of securities to beissued upon exercise ofoutstanding options,warrantsand rights |   | Weighted-average exerciseprice of outstandingoptions, warrants andrights |   | Number of securitiesremaining available forfuture issuance underequitycompensation plans(excluding securitiesreflected in column (a)) |   |
|------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                       |   | (a)                                                                                     |   | (b)                                                                      |   | I                                                                                                                                     |   |
| Equity compensation plans approved by security holders     |   |                                                                                    |   | 1,000,000                                                                |   |                                                                                                                                  | $      | 0.43 |   |   |   | 11,423,244 |   |
| Equity compensation plans not approved by security holders |   |                                                                                    |   | -                                                                        |   |                                                                                                                                  |   | - |   |   |   | - |   |

----

Table of Contents

12.  

| Name and Address                                            |   | Shares of common stockBeneficially Owned |        |        | PercentageOf Voting Power |   |
|-------------------------------------------------------------|--------|------------------------------------------|-------------|-------------|---------------------------|--------|
|                                                        |   |                                     |        |        |                      |   |
| Principal Shareholders                                      |   |                                     |        |        |                      |   |
|                                                        |   |                                     |        |        |                      |   |
| Chrome Oil Services LTD                                     |   |                                     | 202,785,727 | (1          | )                    |   | 28.1 | % |
| c/o No 22 Lobito, Wuse II                              |   |                                     |        |        |                      |   |   |   |
| Abuja, Nigeria                                              |   |                                     |        |        |                      |   |   |   |
|                                                        |   |                                     |        |        |                      |   |   |   |
| Chrome Energy, LLC                                          |   |                                     | 103,305,706 | (2          | )                    |   | 14.3 | % |
| c/o No 22 Lobito Crescent, Wuse II,                    |   |                                     |        |        |                      |   |   |   |
| Abuja, Nigeria.                                             |   |                                     |        |        |                      |   |   |   |
|                                                        |   |                                     |        |        |                      |   |   |   |
| First Atlantic Bank                                         |   |                                     | 60,641,821  |        |                      |   | 8.4 | % |
| 4/6 Adetokunboh Ademola Street                              |   |                                     |        |        |                      |   |   |   |
| Victoria Island, Lagos                                      |   |                                     |        |        |                      |   |   |   |
|                                                        |   |                                     |        |        |                      |   |   |   |
| Directors and Named Executive Officers                      |   |                                     |        |        |                      |   |   |   |
|                                                        |   |                                     |        |        |                      |   |   |   |
| Sir Emeka Offor                                   |   |                                     | 310,296,433 |  (1)(2 | )                    |   | 43.0 | % |
|                                                        |   |                                     |        |        |                      |   |   |   |
| Nicolae Luca(3)                                        |   |                                     | 205,000     |        |                      |   | * |   |
| Andrew Uzoigwe(3)                                      |   |                                     | 205,000     |        |                      |   | * |   |
| Howard Jeter(3)                                        |   |                                     | 205,000     |        |                      |   | * |   |
| Clement Nwizubo(3)                                          |   |                                     | 145,000     |        |                      |   | * |   |
| Peter Ntephe(3)                                        |   |                                     | 388,889     |        |                      |   | * |   |
|                                                        |   |                                     |        |        |                      |   |   |   |
| All executive officers and directors as a group (6 persons) |   |                                     | 311,445,322 |        |                      |   | 43.1 | % |
|                                                        |   |                                     |        |        |                      |   |   |   |
|                                                        |   |                                     |        |        |                      |   |   |   |
| *Less than 1%.                                              |   |                                     |        |        |                      |   |   |   |

| (1) | Includes warrants to purchase 2,500,000 shares of the Company’s common stock, of which 1,500,000 expire in October 2008 and have a $0.25 per share exercise price, and 1,000,000 expire in April 2009 and have a $0.25 per share exercise price. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| (2) | Sir Emeka Offor is the beneficial owner of the shares held of record by Chrome Oil Services, Ltd., and Chrome Energy, LLC as the sole voting and investment power over these shares. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | c/o Suite 1440, 5444 Westheimer Road, Houston, TX 77056 |
|-----|--------------------------------------------------------------|

13. 

 14. 

|                              |   | 2007   |   |   | 2006   |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|
|                              |   |   |   |   |   |   |
| Audit fee                         |   | $      | 92,125 |   |   | $      | 96,982 |  (1) |
| Audit-related fees                |   | $      | 5,200  |   |   | $      | - |   |
| Tax fees                          |   | $      | 8,341  |   |   | $      | 18,434 |   |
| All other fees                    |   | $      | -      |   |   | $      | 20,140 |   |
|                              |   |   |   |   |   |   |   |   |
| ______________                    |   |   |   |   |   |   |   |   |
| (1) Includes $12,409 paid to PKF. |   |   |   |   |   |   |   |   |

----

Table of Contents

Item 15

|   | (32) | Consolidated Financial Statements and Schedules: |
|--------|------|--------------------------------------------------|

|   | 1. | Consolidated Financial Statements:  See Index to Consolidated Financial Statements immediately following the signature pages of this report. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | Consolidated Financial Statement Schedule: See Index to Consolidated Financial Statements immediately following the signature pages of this report. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | The following documents are filed as exhibits to this report: |
|--------|----|---------------------------------------------------------------|

| EXHIBIT NO. | IDENTIFICATION OF EXHIBIT |
|-------------|---------------------------|
|        | Exhibit 3.1*              | Articles of Incorporation |
|        | Exhibit 3.2*              | Bylaws |
|        | Exhibit 4.1*              | Specimen Common Stock Certificate. |
|        | Exhibit 4.2*              | Form of Amended and Restated 12% Convertible Promissory Note, dated effective January 2001. |
|        | Exhibit 4.3*              | Form of Amended and Restated 5.5% Convertible Promissory Note, dated effective January 2001. |
|        | Exhibit 4.4*              | 20% Convertible Promissory Note, dated January 31, 2001, in favor of Chrome. |
|        | Exhibit 4.5*              | Term Loan Agreement, dated February 15, 2001, by and between Chrome and ERHC. |
|        | Exhibit 4.6*              | Senior Secured 10% Exchangeable 10% Convertible Promissory Note, dated January 31, 2001, in favor of Chrome. |
|        | Exhibit 4.7*              | Form of Warrant entitling Chrome to purchase common stock of the Company, exercise price of $0.40 per share. |
|        | Exhibit 10.1*             | Option Agreement, dated April 7, 2003, by and between the Company and the Democratic Republic of Sao Tome and Principe (incorporated herein by reference to Exhibit 10.1 of Form 8-K filed April 2, 2003) |
|        | Exhibit 10.2*             | Management and Administrative Services Agreement by and between Chrome Oil Services, Ltd. And the Company. (Incorporated by reference to Form 10-KSB filed September 24, 2001). |
|        | Exhibit 10.4*             | Letter Agreement, dated November 29, 2004, by and between the Company and Chrome (incorporated herein by reference to Exhibit 10.1 of Form 8-K filed December 29, 2004). |
|        | Exhibit 10.5*             | Promissory Note, dated December 15, 2004, made by the Company in favor of Chrome (incorporated herein by reference to Exhibit 10.2 of Form 8-K filed December 29, 2004). |
|        | Exhibit 10.6*             | Promissory Note, dated December 15, 2004, made by the Company in favor of Chrome (incorporated herein by reference to Exhibit 10.3 of Form 8-K filed December 29, 2004). |
|        | Exhibit 10.7*             | Employment Agreement with Ali Memon. |
|        | Exhibit 10.8*             | Audit committee charter |
|        | Exhibit 10.9              | Employment Agreement with James Ledbetter |
|        | Exhibit 10.10             | May 21, 2001 Memorandum of Agreement made b/w DRSTP and ERHC |
|        | Exhibit 10.11             | March 15,  2003 Memorandum of Agreement made b/w DRSTP and ERHC |
|        | Exhibit 10.12             | April 2, 2003 Option Agreement b/w DRSTP and ERHC |
|        | Exhibit 10.13             | Administrative Agreement b/w Nigeria/DRSTP and ERHC |
|        | Exhibit 10.14             | Block 2 Participation Agreement March 2, 2006 b/w ERHC, Addax and Sinopec |
|        | Exhibit 10.15             | Block 2 Participation Agreement August 11, 2004 b/w ERHC and Pioneer |
|        | Exhibit 10.16             | Block 3 Participation Agreement  February 16, 2006 b/w ERHC and Addax |
|        | Exhibit 10.17             | Block 4 Participation Agreement November 17, 2005 b/w ERHC and Addax |
|        | Exhibit 10.18             | Block 4 2nd Amendment to Participation Agreement March 14, 2006 |
|        | Exhibit 10.19             | Block 4 3rd Amendment to Participation Agreement July 14, 2006 |
|        | Exhibit 31.1              | Certification Pursuant to 18 U.S.C Section 1350, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|        | Exhibit 31.2              | Certification Pursuant to 18 U.S.C Section 1350, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|        | Exhibit 32.1              | Certification Pursuant to 18 U.S.C Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|        | Exhibit 32.2              | Certification Pursuant to 18 U.S.C Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |

|   | * | Previously filed |
|--------|---|------------------|

----

Table of Contents

SIGN

| ERHC Energy Inc. |        |                                                        |   |
|------------------|-------------|-------------------------------------------------------------|--------|
| By:              | //s//  | Peter Ntephe                                           |   |
|             |        | Peter Ntephe,                                          |   |
|             |        | Chief Operating Officer and Interim Chief Executive Officer |   |
|             | //s//  | Sylvan Odobulu                                              |   |
|             |        | Sylvan Odobulu                                              |   |
|             |        | Principal Accounting Officer                                |   |

| Signature                                                                 |   | Title                    |   | Date         |
|---------------------------------------------------------------------------|--------|--------------------------|--------|--------------|
| //s//  Howard Jeter                                             |   | Director                 |   | July 8, 2009 |
|          Howard Jeter   |   | Member Audit Committee   |   |         |
| //s//  Andrew Uzoigwe                                           |   | Director                 |   | July 8, 2009 |
|          Andrew Uzoigwe |   | Member Audit Committee   |   |         |
| //s//  Clement Nwizubo                                          |   | Director                 |   | July 8, 2009 |
|          Clement Nwizubo     |   | Chairman Audit Committee |   |         |

----