ERHC Energy Inc (ERHE)

[YankeMike]

TopShelf: I am sorry I can't narrow down my share price range for 3 or 4 years from now to something like between $24.27 and $25.93, LOL. As you know there are several variables, with the main ones being the amount of proven oil we have and also the price of crude oil.
However, what I think is important is that when looked at from 3 different angles, we still come up with the same general price range. See below for the 3 different angles.

The first is using the AKPO example. This has been posted many times. Basically if we have 1B barrels for our rights in Blocks 2 through 4, and if proven undeveloped reserves are worth $15 per barrel in a few years, our shares would be worth over $20 if you do the math. That doesn't include Blocks 5, 6, and 9, the EEZ, or natural gas. Also, I believe we will have more than 1B barrels in Blocks 2 through 4.

The second angle to project a future share price is Meridian's view that ERHE was worth a couple dollars a share per billion barrels of oil found in our blocks. The key point being he meant per billion barrels in total, not just our percentage rights in the blocks. Since the price of oil has probably more than doubled since then, let's say we're worth $4 per share per billion barrels. If Blocks 2 through 4 contain just 5 billion barrels, that would equate to a share price of $20.

Here is the third angle....just a very rough estimate of another way of calculating a possible share price..... This will be very rough and will probably contain many errors...... Assume we do have 1B barrels in Blocks 2 through 4. Also assume oil is $180 a barrel in 3 years. Assume that the production of these 1 billion barrels is spread over 15 years, meaning we'd produce 67M barrels a year. That would give us annual revenue of $12B. Assuming a profit margin of only 8%, would give us earnings of about $1B per year. Then using a P/E of 15 would give a share price of about $20.

Also, when you say our share price sits at 50 cents. Yes, but look at the trend over the last 4 or 5 months. We've already more than tripled off our lows. You are right, it will take a lot of time to get to $20, but wouldn't it be worth it to wait 4 years for a 40-bagger from today's price?

Have a great weekend!
Mike