NOTE 3 – OIL AND GAS CONCESSIONS

The following is an analysis of the cost of oil and gas concessions at December 31, 2011 and September 30, 2011:

	December 31, 2011		September 30, 2011

DRSTP concession	$	2,839,500	$	2,839,500
Chad concession		1,760,000		1,760,000
Pending Concessions in Other African Countries		21,031		21,031

	$	4,620,531	$	4,620,531

Republic of Chad Concession Fees and Other Financial Commitments

On June 30, 2011, ERHC entered into a production sharing contract ("PSC") with Chad for certain land based hydrocarbon exploration and development.

As of December 31, 2011, the Company has paid or incurred:

$1,000,000 out of a signature bonus commitment of $6,000,000 under the PSC (leaving a balance of $5,000,000 to be completed within 90 days of the later of [i] the publication of Approval Law in the Journel Officiel, an official publication of the Government of Chad or [ii] the notification to ERHC of the Order of Award of an Exclusive Exploration Authorization, neither of which has occurred as of the date hereof)

b.	$480,000 as legal fees and costs for the drafting and negotiation of the PSC, as provided for in the PSC

c.	$280,000 in advisers' and ancillary costs related to the PSC

ERHC is also committed under the PSC to spend at least $15,000,000 over the first five years on a minimum work program and at least an additional $1,000,000 over a further period of up to three years.

Sao Tome Concession

In April 2003, the Company and the DRSTP entered into an Option Agreement (the “2003 Option Agreement”) in which the Company relinquished certain financial interests in the JDZ in exchange for exploration rights in the JDZ. The Company additionally entered into an administration agreement with the Nigeria-Sao Tome and Principe JDA. The administration agreement is the formal agreement by the JDA that it will fully implement ERHC's preferential rights to working interests in the JDZ acreage as set forth in the 2003 Option Agreement and describes certain procedures regarding the exercising of these rights. However, ERHC retained under a previous agreement the following rights to participate in exploration and production activities in the EEZ subject to certain restrictions: (a) the right to receive 100% working interest signature free bonus of two blocks of ERHC's choice and (b) the option to acquire up to a 15% paid working interest in up to two additional blocks of ERHC's choice in the EEZ. The Company would be responsible for its proportionate share of exploration and exploitation costs in the EEZ blocks.

The following represents ERHC's current rights in the JDZ and EEZ blocks:

Block	ERHC Original Participating Interest	ERHC Joint Bid Participating Interest	Participating Interest(s) Sold	Current ERHC Retained Participating Interest	Remaining Cost Allocated to Blocks

JDZ 2	30.00%	35.00%	43.00%	22.00%	-
JDZ 3	20.00%	5.00%	15.00%	10.00%	-
JDZ 4	25.00%	35.00%	40.50%	19.50%	-
JDZ 5	15.00%	-	-	15.00% (in arbitration)	567,900
JDZ 6	15.00%	-	-	15.00% (in arbitration)	567,900
JDZ 9	20.00%	-	-	20.00%	567,900
EEZ 4	100.00%	-	-	100%	567,900
EEZ 11	100.00%	-	-	100%	567,900

The Original Participating Interest is the interest granted pursuant to the Option Agreement, dated April 2, 2003, between DRSTP and ERHC (the “2003 Option Agreement”).

Under the terms each of the Participation Agreements Sinopec and Addax agreed to pay all of ERHC's future costs for petroleum operations (“the carried costs”) in respect of ERHC's retained interests in JDZ blocks 2, 3 and 4. Additionally, 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 interests on individual blocks until Sinopec and Addax Sub recover 100% of ERHC's carried costs.

The remaining $2,839,500 of cost related to the DRSTP concession, as shown on the Company's balance sheet at December 31, 2011 and September 30, 2011, relate to blocks 5, 6 and 9 of the JDZ, and the Company's EEZ blocks on which Production Sharing Contracts are yet to be signed.