ERHC Energy Inc (ERHE)

[Krombacher]

From ERHC's website:

ERHC has two focus areas in BDS 2008 that it plans to pursue with a rift margin play. One focus area is north of Esso’s Tega and Maku discoveries in the Doseo Basin and the other is east of and expected to have geological characteristics consistent with OPIC’s Benoy-1 discovery in the Doba Basin.

And

ERHC plans to focus its work program initially on the BDS 2008 and Chari Ouest III Blocks in Southern Chad.

Both Blocks are located on the north flank of the Doba/Doseo basin, where Esso and other operators have made discoveries exceeding 1.29 billion barrels of oil equivalent.

Now consider this.

If Benoy is producing $1.6 billion in profits and if we find a Benoy sized well in Chad...

...and let's say we get silly conservative here and say ERHC only keeps 20% of its interest after a farm in with an operator...

that's $320 million in profits for ERHC...which is like giving everyone a 50 cent dividend per share of ERHC pretty much for EVERY YEAR of YOUR life or until they deplete the oil.

What would that do to the share price? Well slap a multiple on that profit stream...let's get silly conservative again and say that multiple is 5.

50 cents times 5 = $2.50 a share. And again, that's silly conservative, so a Benoy sized find would put a floor of $2.50.

Hence Chad is very different from Kenya. If Kenya only takes us to a buck with a small pearl...Chad throws another $2.50 on that.

And let's not forget that we have the biggest black blob in Kenya...so we might have a gigantic pearl on our hands.

Krombacher