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We should be looking at a Sinopec/Total alliance and what would be in that JV's best interest if that were to happen.
Would/Could ERHC be the 3rd leg of that stool? Or do they just want us to get out and therefore need to evaluate the EEZ further in order to determine what price they will need to take ERHC out of the EEZ as well.
If Total was requesting a look at the Geophysics of the EEZ at the same time they were negotiating a buy-out of Chevron in Block 1 (per Luis). That points in the direction of a French/Chinese alliance.
imo
Bay
Dr. J,
Why the sudden change, in the past your e-mails with Dan have been almost friendly. And now all of a sudden he will not, "communicate commerciality with individual stockholders".
It sounds as if they (SEO & minions) are not ready for the news (good or bad) to be released.
Now that is puzzling..? It must be a deal that SEO is trying to get completed before all hell breaks loose.
Very puzzling.
bay
Red,
If what we are reading is correct and current...when SINOPEC uses the term commercial in this context it refers to the amount of hydrocarbons found and not the rate at which they flow.
What is needed is validation from another partner..preferably our own ERHC board. There should be no reason that any or all the partners could not report the information they have been given on drilling results (for the Bomu-1) at this time.
I have to feel that this just one more domino falling.....
Bayfisher
Thanks for your positive response HP but in truth most of my posts are more speculative in nature (based on my knowledge and experience) as I do not have the time or inclination to do the research of someone like Balance Builder.
BB more than any of us works hard to connect all the dots. And while all of us know he is not 100% correct, I would bet that when we look back at all of this we will see that BB hit the truth as much as anyone.
Then there are others among us who are like the guy that yells "FIRE" in the movie theater. They simply enjoy seeing the anguish they cause.
Bay
SSC,
Respond one more time, we are all wanting to see if you can go 3 for 3.
About as asinine as the guy that first bought Microsoft in the mid 80's.
Market pricing is a reflection of market knowledge, the market does not like risk and the unknown.
SSC, are you saying that the market with its interpretation as to the value of ERHC has the ability to see downhole and knows what the amount and value of hydro-carbons there are in that area?
Because again you have made one of your 'now famous' dumb reponses.
Our price reflects the insecurity the market feels over the lack of information that is coming forth. That and nothing more.
If they come out and say there is nothing there then our price will fall even more and will only be propped up by the potentiality of the EEZ. If they come out and announce Phase II then our stock will respond in a correspondingly upward path.
Simply put, the market values its knowledge of our asset potential and not our asset's hydrocarbon potential.
Bay
I first heard about ERHC when I was approached by thier recruiting company.
I declined the job interview but became interested in the company and its assets.
Sneak,
Maybe you just hit on the answer. If Sinopec releases what they actually found the smaller players could possibly have very little trouble finding the financing they need to stay in the game.
Maybe the stalling is an end run to push the small players out.
Balance your thoughts on this would be appreciated.
Bay.
All my life, I was a very young man (before college) working in Prudhoe Bay, Alaska (Wireline Operator)got hurt bad in a rodeo so off to college I go. Then worked in the Gulf Of Mexico during college (offshore roustabout), and field experince in Kazakhstan as a Financial Consultant on the Tengizchevroil operation.
Now I am an Office-Puke in a suit and tie.
I know a little bit about a lot of the energy industry but a lot about hardly anything. I am 3rd generation since 1922.
MoMo,
I am not expecting ERHC to release any drilling results as it is not their responsibility, as Operator it is Sinopec's responsibility and then ERHC can repost in their own fashion. And to that extent we have not seen an official release of drilling results by Sinopec. Rather, a communication that states drilling results warrant further examination. A true release would contain exactly how many hydrocarbon plays were found, what were their intervals, what were their depts, what were the pressures at each zone and a "very" qualified estimate as to the amount of recoverable hydrocarbons that were found across each zone. I missed that press release, did you see it?
When we look at the drill depths of all 5 exploratory wells the contention among this group "given the limited amount of information made public", is that only one well was drilled deep enough to be below what would possibly be the gas cap of the reservoir. I know this is somewhat speculative but when compared to OBO-1's depth and looking at the drilling days per well it looks like a viable explanation. Also given a few (field) leaks (again somewhat speculative) that enormous pressures were encountered when they reached certain zones so they pulled out it seems to be a plausible scenario that they did not go deep into the 'Big Play' formation.
And finally without drilling and detailed geophysical data how do you know what is in the EEZ and how it compares to the JDZ..truth is, you don't. But regardless if Sinopec and Afren came out and released full data and said the JDZ wells they drilled contained no economic hydrocarbons then that would have a tremendous affect on the bid results of the EEZ.
I still keep coming back to why are they not releasing the drilling results. From every viewpoint that I can see it would be in both Afrens, Sinopec's and ERHC's advantage to release the data quickly IF IT WERE POOR.
There is something in the timing that we have all missed, matbe it is infrastructure related, maybe it is weeding out the poorer players, maybe it is negotiations to develop a huge consortium to develop the JDZ as one large field.
Those are answers I am still looking for, but I feel very confident that the JDZ is an economically viable field.
My two cents,
Bay
Investor,
It is hard to answer that question. If they only drilled into the caps there was not a chance they would find a wet zone.
For all we know that may not have been their intention.
What I keep coming back to, is, if nothing of significance has been found why have the results not been released?
It really makes no sense, if they (Sinopec) could release the results and lower expectations for the EEZ bidding, why wouldn't they?
If they (ERHC and SEO) have knowledge that the 5 wells drilled were not commercial and they(ERHC) did not release that information to their investors they have potential problems the SEC, so why wouldn't they?
If you read the annual or semi annual reports of all the investing parties (Afren, Equater, ERHC) they all state the same thing that results are not known but warrant a continued review iuntil September. There is something in the timing that we are all missing.
Frankly it makes sense for SEO not to puch to have the results made public. The smart move for him would be to start buying into STP infrastructure projects. Just like in California during the gold rush it wasn't the miners that made all the money it was the people that brought in the infrastructure.
Bay
An Effect filing is a Notice of Effectiveness.
Notice of Effectiveness: The notice of effectiveness is a public declaration by the Securities and Exchange Commission that a public company's registration statement has been accepted.
For shares in a public company to trade on the open market they must be registered by the company. These registration statements are reviewed by the Commission for a period of time before approval is given, and this notice marks the successful completion of this review process.
Just using the numbers from the Feb 2010 Quest spreadsheet.
I came up with: 200 million barrels of oil & oil eqivalents for ERHC. And a per share price of $2.37/share.
And this is from only 4 fields that were marginally explored:
Lemba, Bomu, Kina & Kina South.
Krom,
Exactly how did you calculate your probabilities, did you use baysian statistics, multivariate disciminate analysis, linear regression, limit theory, were you able to develop a normalized pool of data, or did you pull these out of....the air??
Bay
Mid,
With all due respect you waste a lot of your time and the boards arguing against and or defending many topis on this board, so why are BB's any different?
If you refute a post back it up and prove your point.
Bay
And Mid you certainly have the right to call out anyone on the board and question the veracity of any statement they post.
But for the benefit of all who read ot post on this board I would ask you to substantiate your refutals by posting your own alternative vision of what is or is about to transpire.
Bay
Oil-Cowboy,
I appreciate posters as well that come in and try to formulate logical opinions and lay them out for all of us to look at and debate. BB goes a step farther and does his best (through links and past messages) to substantiate what he is trying to reflect.
In my mind BB, BSK7000 and FISHDOG are posters I pay a lot of attention to. I have been in the energy industry for more than 35 years (started in the GOM at 17 as a roustabout), and most of what these posters say falls within reason of my experience.
I am not afraid to call down a poster that I feel is writing a drive by post for his own selfish reasons, as everyone re-calls I was the first to call MARKGOVALS out for his drive-by frenetic postings. He never substantiated anything and in my mind it looked like he was taking MM positions on the stock.
Unfortunately he left with our defending his posting so we will never know.
Bay
As the French say the 'raison d'etre' (reason for being) of this board is to have honest open dialogue and debate to help all of us determine what is happening in regards to our ERHC investment.
You post a lot on this board, why not substantiate why you differ with BB's analogy?
Bay
Balance,
Good summary, but I have one observation to make. When Bovell made his valuation statement he was talking only about the JDZ as our blocks in the EEZ were not determined at that time.
If you are includeing ERHC's two 100% carries (blocks 4 & 11) and our two 15% carries (blocks still unknown) in the EEZ, then I would conclude that your pricing guidance is too low.
Am I correct in thinking that your $7.75 per share value only includes the JDZ and does not include the EEZ? And if I am correct do you have a number in mind that SEO may be willing to walk away completely?
Bayfisher
Yes you are right but a Chinese would be better. Deeper pockets
And why would there be any compulsion for them to do this?
They would want the prices for the EEZ to be a as low as possible.
That scenario makes very little sense.
Nice analysis BB, I always look forwrad to your public sentiment as well as your private.
Bay
It may be in this boards interest if Posters were limited by the number of posts they could make each day.
Unless something out of the norm happens (like Total announcing they are buying Chevrons interest in JDZ-1) then this board seems to be an ongoing daily argument between 2 to 3 posters.
It has become tedious and a waste of everyone's time. If you are arguing with just each other, why not (for the betterment of the board) take your 'argument du jour' to a private message status.
I know that I will take shots from a certain group on this board but most will probably agree with me. Keep it between yourselves, if it is just your ongoing diatribe?
Krom,
You are getting silly with your numbers.
You cannot do what you are trying to do.
You need porosity, permiability, reservoir pressure, Z-factor and many other unknown variables at this time.
It will be interesting to see who buys this offering. The powers that be seem to have been trying to shake off fragile investors for the last 8 months. With some success, but maybe not enough. If you look at the economics this could be a way for someone to pick up 25% of ERHC for only $50 million. If a buyout announcement is forthcoming then this is a great way for someone or something to grab a large amount of the future proceeds.
Devaluing your stock price by 25.6 % without a planned acquisition and publicly stating that it is only to allow ERHC to be able to target future acquisions especially when you have over $20MM in cash. This smells like a class action lawsuit and is another indication that Peter and the board are either up to something or are not thinking clearly.
Bay
sorry for the miss-spell
Unbra,
With all respect it's not your table, it's ours and I live in that area.
A nuclear exposion could also frac the well and well bore and create a far far worse situation.
Respectfully,
Bay
Condolences are certainly in order and I should have been the first to express mine. Sorry Mark I was not online at all this weekend. I lost my father 12 years ago and the pain has not left, but the memory of him and his lessons for me have not left.
To that end I wish Mark and his family wonderful memories of their (father/husband/friend/mentor/confidant) and the shared knowledge that the legacy of his memory reflects the character that he sustained, and in the end that is all a man can ask for.
As to an apology, I think Mark would be the first to say that it is not appropriate or needed. Mark right or wrong set himself up to be an ORACLE for this board and as such should be held accountable for his postings.
Bayfisher
It is interesting to note that all the buys are coming in at 50k and 100k volume packages. Looks like someone is swooping down and buying in large increments. If someone has inside info this is their dream situation.
My two cents:
1) Where the hell is Mark G. now, all that great info he has been telling but he cannot divulge his sources...?
2) In a shareholders meeting It is just as important to look at what is said as what is NOT said. My take is that "YES" we do know a lot more than we did before this meeting. First we know that we do have commercial quantities of gas in at least 4 of the 5 wells drilled. We know this not because they said so, we know this because they stated that BOMU did not have commercial quantities of Hyudrocarbons and they did not say this about the other four wells. It was only in the perimeter one on one meetings that we were told specifics about the condition of the gas.
3) Everyone here was waiting for a bombshell and hoping that ERHC would announce that Total and/or Sinopec were going to buy us out for $20,000,000,000. Guess what, there is still a very good chance that that will happen. But only the top players know the timeline. Guys they drilled for almost 5 years in Saudi Arabia before they found GAWAR, The NAVY drilled across the North Slope Burrough in Alaska for almost 9 years before they found the Sadlerorochit. It will happen, just not on the timeline we want.
4) If we are going to discuss something on this board (instead of just arguing with the bashers), let's discuss Corporate Strategies and what Sinopec, Chevron and or Total would try to do to optimize their holdings in the JDZ and EEZ. (after all this is the highest touted area for finding (NEW) oil of any region in the world, and they all want to be here). My current take is the majors want to take out all of the small players (while it is more affordable) that they can. It is my feeling (and hope) that ERHC will be untouchable given our holdings, our reserve capital, and that we have a free carry until production. That leaves the rest of the small players to be taken out. Once that has happened then there is a very good chance that ERHC will be divided up between the majors and hopefully at a price we are all very happy with.
5) Word of advice keep you cards close to your chest and sit and watch. Don't overreact to good news or to bad. Finally, accept the fact that you may have to hold this stock another 2 to 4 years to start seeing the return that drove us to buy into this stck in the first place. Remember, they have only drilled 4 of the 22 known structures. If we see Sinopec/Addax start contracturally securing a deep water rig for later this year then (to me) that completely seals the deal that there are known hydrocarbons and in significant amounts.
Balance Builder do you have anything to add to this, I generally have much respect for your position on what is happening?
Mark GoVols are you prepared to come back and tell us how this fits into all the "GREAT NEWS" information you have been bringing to the board from your unidentified resources?
Bayfisher.
Krombacker,
A little unusual in determining your numbers but effective none the less.
I suspect that very few of the true Long-Term holders are leaving. There is simply not enough information being given out to warrant an exodus.
This stock is so tightly held that any type of exodus would generate a free fall in sp. We would know it and know it quickly.
We have seen our current share price status continuously over the last 5 years. When information gets tight the SP drops, when info (right or wrong) flows the sp tends to rise.
Here is hoping that the Powers that be throw us a bone at 3:00 today!
Bayfisher.
Red,
They only reflect the numbers that were given in EEl's annual report. By the way, big numbers was the reason we all come into this roadshow...wasn't it!
It would be nice for a lot of us, but there are some here that will never be satisfied.
I feel confident that things are progressing as they should
Strass,
Do you think that statement would quiet a lot of the investors on this board? .......NOT!
Bay
Based on EEL's numbers I do not see how it can be less.
Bay
Balance,
I think you cannot read EEL's commentary and not be excited. Companies are generally extremely careful about what goes into thier annual reports as they do not want to under set expectations as well as oversell their expectations. I have to think that while this did not come from the comapny actually drilling the well the results will have to be similar to what we will see from the exploration company. All in all a P50 chance that we have oil or oil equivalents that comes to 5.1 Bbl's; and that in only one of the fields drilled in Zone 2 is very significant. It becomes apparent that there may be more to the Meandering stream dialog that has been off and on discussed over the last 2 years.
Frankly I think the reason ERHC is not talking is because they are negotiation a big deal with other signifcant interests (MAJORS) and are required to keep silent about all aspects while the deal is completed. I feel there is a good chance that ERHC would simply sell their position (lock stock and barrel) in Zone 2 for a certain sum of cash and continue to work on developing the remaining 6 zones they have interest in in the JDZ and the 4 zones they have interest in in the EEZ. There are many reasons why this would benefit the JDZ as a whole and ultimately benefit ERHC again in the future. It is my hope that they do this by setting up a shell company for Zone 2 assets and allocating stock based on the shares that current owners have, that would allow a significant portion of the money to be given back to the current shareholders while allowing them to keep thier resident shares intack. This would certainly allow SEO to receive a significant sum of money and allow him to invest it in the infrastructure buildup going on in Sao Tome.
Finally I still think investors are undervaluing the value of ERHC's 22% share of zone 2 based on EEL's annual report. ERHC's share of the Kina alone looks to be worth over 10 Billion. And if ERHC's is going to sell out of their position in all the other oil bearing formations (in Zone 2) without the chance to drill how do you value that roll of the dice. This is probably why it is taking so long to get the deal done.
Based on EEl's Zone 2 report I cannot see ERHC selling thier mineral rights in Zone 2 for less that 12 to 13 Billion dollars and their is a solid chance it is more.
I think we are solid just do not know how solid yet.
JMO
Bayfisher
I still think we have a few more weeks to wait on this news
SNP has to have Total (or another major with thier deepwater experience) to bring the oil up. ERHE can sell their share of zone 2 and still have carry's in 6 other zones in the JDZ aas well as 4 zones in the EEZ.
Jim,
I think ERHC is not willing to talk because they are in the middle of deal negotiations and have been instructed not to by related parties. If anything the EEL disclosure wilol speed up the pace of that deal. This bodes well for us a sfrustrating as it is.
Several months ago Balanace asked me using background to make an estimate of the ERBC sales price and I said a low of 10 billion to a high of 20 billion. A lot of the "Paid Bashers" immediately started crucifying me.
In fact, they may have been correct my estimate in reality may have been a bit conservative.
P10 (also called P3)means that is the amount of oil that is generally assumed should in a reservoir but when you value it you only value 10% of that estimate. (ex: 100 Million barrels of oil at P10 is a 10 Million barrel field - RISKED)
While P50 (also called P2) means that you are reasonably confident through well test and exploration that there is the amount of oil in tthe reservoir thta you expect. This reservoir has generally not been produced but only had discovery wells and flow tests measurements. When you value this reservoir at P50 you use 50% of the estimate. (ex: 100 million barrels of oi;l at P50 is 50 million barrel - RISKED)
While P90 (also called P1) means that you are 90% certain. And generally the P90 designation is only given to reservoirs that have had multiple production wells drilled and produced and multiple production tests that given the reservoir engineers a high expectation that the reservoir contains what they believe it does. (ex: 100 Million barrels of oil at P90 is a 90 Million barrel field - Risked)
Majic,
Can you post the source of this information for us?
If valid this is very solid news and right along the lines we have been weaiting for.
Thanks
Bayfisher