EXHIBIT 10.23 


 



	
 

	


	
 












 On July 6, 2011, ERHC Energy, Inc. (the “Company” or “ERHC”) announced that it had signed, through one of its subsidiaries, a Production Sharing Contract (PSC) on three oil blocks with the Government of Chad namely the Manga, Chari-Ouest and BDS 2008 Blocks. What follows below is a fair and accurate English summary of said PSC, pursuant to, and as permitted by, § 230.403(c)(3) or § 240.12b-12(d)(3) of the Securities Act of 1933, which “fairly and accurately summarize(s) the terms of each material provision of the foreign language document” and “fairly and accurately describe(s) the terms that have been omitted or abridged.” 


 




	
 SUMMARY OF ERHC CHAD PRODUCTION SHARING CONTRACT (PSC) 

	
 


	
 

	
 

	
 

	
 


	
 1. 

	
 PARTIES TO PSC 

	
 

	
 ERHC ENERGY (BVI) LTD. 


 


 -and- 


 


 THE REPUBLIC OF CHAD 


	
 

	
 

	
 

	
 


	
 2. 

	
 DATE OF EXECUTION 

	
 

	
 30 June 2011 


	
 

	
 

	
 

	
 


	
 3. 

	
 PSC ITEMS 

	
 PERIOD 

	
 WORK PROGRAM COMMITMENT 


	
 

	
 

	
 

	
 


	
 a. 

	
 Exclusive Exploration Authorization 

	
 

	
 


	
 

	
 Initial Period 

	
 5 years 

	
 USD15 Million + 50% Bank Guarantee 


	
 

	
 Renewal Period1 

	
 3 years 

	
 USD1Million + 50% Bank Guarantee 


	
 

	
 

	
 

	
 


	
 

	
 Signing Bonus 

	
 

	
 USD6 Million 


	
 

	
 Administrative Fee 

	
 

	
 USD480 Thousand 


	
 

	
 Recurring Yearly Fees 

	
 

	
 


	
 

	
 Annual Meeting 

	
 

	
 USD75 Thousand 


	
 

	
 Ministry Training 

	
 

	
 USD250 Thousand 


	
 

	
 Chadian ERHC Personnel and Training 

	
 

	
 Max USD 100 Thousand 


	
 

	
 Surface Royalty (Initial Period) 

	
 

	
 USD1/km2 


	
 

	
 Surface Royalty (Renewal Period) 

	
 

	
 USD5/km2 


	
 

	
 

	
 

	
 


	
 

	
 Drilling Obligations 

	
 

	
 One exploratory well during Exclusive Exploration Authorization 


	
 

	
 

	
 

	
 


	
 b. 

	
 Extension of Exclusive Exploration Authorization 

	
 2 years 

	
 Conditioned upon Feasibility Study 


	
 

	
 Recurring Yearly Fees 

	
 

	
 


	
 

	
 Surface Royalty 

	
 

	
 USD10/km2 


	
 

	
 

	
 

	
 


	
 

	
 Exclusive Exploitation Authorization2 

	
 25 years 

	
 


	
 

	
 Award Bonus 

	
 

	
 USD2 Million 


	
 

	
 

	
 

	
 


	
 

	
 Recurring Yearly Fees 

	
 

	
 


	
 

	
 Abandonment Work Reserve Fund 

	
 

	
 Production based formula 


	
 

	
 Ministry Training 

	
 

	
 USD500 Thousand 


	
 

	
 Chadian ERHC Personnel and Training 

	
 

	
 1% of Operator’s payroll 


	
 

	
 Surface Royalty 

	
 

	
 USD100/km2 


	
 

	
 

	
 

	
 


	
 c. 

	
 Renewal of Exclusive Exploitation Authorization 

	
 10 years 

	
 Conditioned upon commerciality 


	
 

	
 Recurring Yearly Fees 

	
 

	
 


	
 

	
 Surface Royalty 

	
 

	
 USD150/km2 












 1 Upon ERHC’s request and compliance with work program commitment for the Initial Period. 


 2 Upon ERHC’s request and Chad Ministry Approval. 








 Recent Developments 


 Recently, ERHC offered to novate the PSC by retaining only the BDS 2008 Block and voluntarily relinquishing the Manga and Chari Ouest III Blocks to the Chadian government for efficiency.  The novation of the PSC has been approved by the Chadian Ministry of Energy and Petroleum.  In April 2014 ERHC received the arrêté (decree) of the President of Chad giving presidential seal of approval to the Company's retention of oil exploration Block BDS 2008 and its voluntary relinquishment of the Manga and Chari-Ouest III Blocks. The BDS 2008 Block has an area of 16,360 square kilometers or 4,042,644 acres. 


 




 Cost Recovery and Production Sharing 


 In the event of a discovery and commercial production from the Company’s blocks, the Company and any partners that have participated in the exploration will be entitled to recover up to 70% of the net hydrocarbon production (less any production royalty) as cost of oil, until all the costs for exploration and development have been recovered. Production royalty is 14.25% in the case of crude oil and 5% in the case of natural gas.  No guarantee can be given that; there will be production in commercial quantities from the Company’s exploration acreage in Chad. 


 




 Transfer of Rights and Obligations 


 The Company may at any time transfer all or part of the rights and obligations deriving from its Exclusive Exploration Authorization and, if applicable, from any Exclusive Exploitation Authorizations as well as contractual rights pertaining to such Authorizations, subject to the State’s approval. 


 




 [END OF SUMMARY]