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Now that's funny.... :)
Well, it's a company subscription to the WSJ. And the company I work for is a non-profit animal welfare organization, with strong environmental leanings. There, now I've come clean; I think I'm sort of an alien to most on this board. I would love to post a comment, but this stock is not PC for my organization, and the comment would show under their name. So, can't do it, if it were otherwise I certainly would.
All I'll say further is that this stock has really challenged my value system. It has bifurcated my actions in support of what I believe in. Financial security, especially when children are involved, is a pretty compelling motivation. (Did you know seismics are harmful to whales and other marine life? My co also spends a fair amount of time cleaning oiled wildlife. Thus my dilemma.)
I must say that this whole thing is quite fun otherwise - the board, the risk, the learning, the politics, all of it. I've learned a lot.
Article in today's WSJ:
HEARD ON THE STREET JUNE 19, 2009, 4:44 A.M. ET Keeping Upstream Merger Talk in Check
Article Comments more in Heard on the Street
By MATTHEW CURTIN
Oil prices are rising. Risk appetite is returning. So should we prepare for a surge of takeover activity in the exploration and production sector?
Even if western oil majors are currently absorbed with their own problems, emerging market and state-owned oil companies are eager to secure new resources. Rumors that China's Sinopec Group or Korean National Oil Co. are lining up a $7 billion bid for Toronto- and London-listed Addax Petroleum, the operator of the Taq Taq oil field in Iraqi Kurdistan, have helped ignite the sector.
Bloomberg News/Landov
Sinopec is rumored to be bidding for Addax Petroleum.
Still bankers and investors should keep their excitement in check. First, the capital-markets thaw has eased pressure on the balance sheets of the many independent upstream companies geared up in the boom. A wave of distressed selling no longer looks so likely. The U.K. E&P sector, for example, has already raised roughly $4 billion in new debt and equity this year.
Second, there's a mismatch between what buyers and sellers of upstream assets think they're worth. Few buyers are convinced the recent oil-price rally is sustainable. Yet some owners of E&P assets still hope prices will return to last year's giddy levels. In April, French oil group Total pulled a C$1.75 a share offer Canadian oil sands developer UTS Energy Corp. after failing to win over two thirds of shareholders. But today the stock is trading at C$1.58, below Total's last offer.
Meanwhile, value is as notoriously hard to determine in the upstream sector as ever. A rising tide lifts all boats, but higher oil prices have to be put in the context of the quality of the individual E&P assets the companies own -- proved reserves, producing wells, projects in development, and exploration -- and where they are. A barrel of oil underground isn't worth the same in Nigeria, Iraq or Kazakhstan because of different tax rates and political risk, among other factors.
Of course, the national oil companies have deep pockets and their expansion plans may be less commercially driven. But that does not mean they will pay well over the odds. More likely, the current stand-off between buyers and sellers will continue until either sellers lose their nerve or further evidence emerges that oil prices are indeed heading skywards again.
Write to Matthew Curtin at matthew.curtin@dowjones.com
http://online.wsj.com/article/SB124533119031027423.html
Going to look under the sofa cushions for extra $$ as soon as I get home from work....d@#n!
Well, and depending how high it goes, there is that little BMW I've been eyeing up....
Thanks :) I am breathing quite well after last week! I intuitively feel it's only a matter of time, and very little time at that. Whatever happens, buy in, drill first, business combination, it will be great. Pay off some bills, put a little into the house, set aside for future college tuition, and cut back work hours. I'm ready!
Appreciate your kind thoughts. It's all for him --
Nice ERHC reader response Brez63, keep getting the name out there. Gave you a thumbs up vote on the Marketwatch site.
FN
Thank you, AA, your kind words are always appreciated. I have realized I have a pretty good appetite for risk. I used to travel alone to remote and unusual places to photograph, fairly risky, but now that I have a child I won't take that type of risk anymore. I think that ERHE is feeding some of that risk appetite. It's not stressful most of the time, since I've bought using only extra monies cobbled together over the years, I have some good retirement investments in more traditional investments, and I know ERHE will make me money, though I don't know exactly when or how much. Right now I've cut back my hours at work to be there for my son, so money can get tight, but it's short term. An ERHE hit will go a long way for both of us in terms of quality of life.
I came in at a good time and my pps averages .27, so I'm already green. I have only positive feelings about this! Sort of like it was meant to be, my first and only direct stock investment, finding out about it from a random guy on a plane that I never saw again, and actually remembering the ticker and researching it, then finding this board.
Turns out my son loves candlestick charts, and is always asking me about the stock when he sees the chart on the computer.
I certainly hope I can find another interesting "gamble" to learn from and be entertained by when this one is up!
FN
Ah, cheers to you exceo. Who needs astrology when we have new prognostications like this (and no offense to your wife since I had some dabblings myself).
One other sympatico note to you: I don't have lots of $$ invested, but enough to make a big difference to me when this hits, and each month my finances get tight enough where I question holding versus selling, e.g., what would a sane person do? I don't sell, keeping my shares above a round number that I have set as a psychological barrier, and the next day I'm always happier they're still there. Da#@ is it hard some days! When I see the posts asking who could be selling at this level, I think, well, me, trying to make the mortgage payment. It's not always that bad, why would you have your money in such a risky investment, but some months it's a tough toss up.
And petemantx - you may feel your gut sense or intuition is bad, but keep the positive feelings up and don't give in to negativity. I forget the name of the writer you said you followed but I googled him at the time, and the philosophy is a good thing. I'm there with that ideal with similar philosophers.
I wouldn't be here if I didn't intuitively feel this is a good thing in the long run. Day to day doesn't matter, although I'm the first to admit it can take its toll on me too.
This is a great thing, and my six year old will come to the 20 year reunion of the Las Vegas celebrators!! Ha, did you even think about that??
While I'm at it, a special hello to YankeMike :)
FN
Well, the waiting is the hardest part. Especially when the bills start piling up, makes me feel a little demented being on this ride. Going to visit Pinto17 (my brother) late in June, sure would be nice to raise a glass to some ERHC significant happening or sp movement. But, I suspect we'll raise a glass regardless.
FN
Thanks Art. I have pulled the cash out I was going to use for ERHE, and will put that into a new Ameritrade account. I think my existing ERHE will just have to stay there! Who knows what will happen with this company over the next weeks and months.
Went to make a small purchase of ERHE today, only to find out my on-line broker no longer handles purchases of ERHE. They removed it from what they sell (?). A few choice words left my mouth after I found out (but not to the rep on the phone, not his fault). I use Sharebuilder, which I joined naively, but have been unwilling to change because I've been too scared to be out of the market on this stock for the weeks they say it would take to transfer to another broker.
They said that my existing shares and selling them when I want are unaffected. I imagine that must be true by regulation, but I don't have a warm and fuzzy feeling about it.
Any insights or similar experiences? Frustrating, particularly with all this action starting up. Next time I'm with Ameritrade.
FN
Kind of how I'm feeling, though the BMW X6 is in my dreams. Think positive and big, that's all I can say. Petemantx knows the way as I recall.
OT - I concur - I would love some leads, not discussions (they can happen elsewhere), on boards to look at / stocks to think about post-ERHE. I am of course assuming I will have a good size egg to invest.
FN
Well, thanks for that doubleaa, I'm smiling already. Good things are coming.
FN
I like your writing style. Your posts always make me smile :)
Thank you :)
Thanks bsk2007; single mom here :)
FN
This novice investor truly appreciates hearing your rant, I mean exit strategy. Seriously, it's good to hear. I am trying to get ahead financially as much as possible, it's just my young son and I, and single parenting is a precarious thing. I can see that it is all too easy to just keep waiting for the perceived really big bucks and in the end miss out. Wish I had more shares but I know I've scraped every bit of discretionary $ and put it in over the last 2 1/2 years, so I've done what I can. Will be looking for where to go next after this ride is gone, hope you all will provide some good leads and advice.
This is my first stock investment - here's hoping and expecting it will be a stunner!
FN
Art2004 - trying to reconcile BMorgan's two responses - he's 'too busy to follow up on possibilities', and 'hopefully next week'. The latter sounds like he knows what's up, the former sounds like he doesn't. How do you interpret his responses?
Well said, and I couldn't agree more. Big moves will take us by surprise, and I like most others are okay with the risk and hoping for those big positive moves. It's the waiting that's the killer, and boredom in the wait brings on troublemaking. Many days I'm very tired of waiting, and I've only been here 2 1/1 years, so I appease myself considering how long others have waited. Good luck to all of us.
FN
Banking asset valuations? Not taking that bait, sorry.
FN
Regarding the seismic estimates:
My guess - because these numbers are relied upon for actually recording or disclosing asset values in publicly reported financial statements, they are incredibly conservative. The number one concept in financial accounting is conservatism - estimate assets low and liabilities high. The more something is an estimate as opposed to a measure that can be proven, the more conservative (or lowball) it will be recorded on a set of accounts. I am a CPA and have no experience or expertise in the oil industry, but the accounting concept is consistent and I deal with it regularly when estimating the value of donated goods or services, estimating contingent liabilities, and so on. So it rings true to me that these would be very very low. If the companies really thought the amounts were this low, would they really bother drilling?
JMO,
FN
...or news of merger or buyout. I am of the opinion that corporate structuring deals have had to have been on the table in probably many forms with much back and forth, given all we've seen and heard - whiteboards, Bovell hiring, $10 sell price comment, and just the mere fact of ERHC's rights and existing corporate structure and operations. Rumors aside (I used to find the oilygrams as good food for thought, now they're meaningless and from the lack of board response to his posts, most seem to agree), I am very curious to see how this will play out. I can't imagine there won't be a merger or takeover, will it be just before, during or after drilling? What part of drilling, since it is shaping up to be a busy H2? I know this has been hashed about at length on this and other boards, but it really is getting interesting now. I think the most dramatic news over the remainder of this year will come without warning, much like Offor's resignation.
JMO,
FN
I just keep reminding myself how fast this will go up when news does hit, and that slow slippage is the game otherwise. It's only a matter of time. Added a little more this a.m. (little being the operative word here, but it's adding up).
FN
Working with both Germans and Africans, and working in both countries, I can't think of two who are further apart in business norms.
I think you're positively giddy about this.
Now this is some of what I love about this board :)
Pretty sure when I first read that he said "The Agency", which made me think CIA (LOL) but assumed s/he was referencing the JDA. I read it pretty soon after it was posted and think it was then edited.
LOL that's a good one to remember :)
What I neglected to add was how much I've learned over the past few years, from posts on this board that have led me to further research things for myself. I mean broad technical things, about the stock market, oil, politics, economics, and more, as well as the ERHE particulars. Thank you all for that.
Should be another interesting day. Seems hard to deny things are finally moving forward on this investment. Whatever the details are, it will be exciting to watch them unfold. Personally, I think all the posters here and their opinions, speculations, and 'inside' information are what makes this board interesting. Whether I agree with someone or not, whether I think they're credible or not, I like seeing all the posts and deciding for myself. What I'd like to see is everyone being respectful to each other, no meanness, swipes or digs. Come on, it's getting really good now and we seem so close.
Been sleeting here on Cape Cod since last night, now with some high winds added for good measure. School and work closed, nothing to do but hang around and watch the action (providing the power holds out!).
Here, here.
Life is good, things are moving, just enjoy.
did my part in buying a few thousand at $.195 today. down to $.27 average cost. building slowly but surely, anticipating the day...
Thanks all. Hope this helped others besides me get clarity on the rules and impact as we wait for events to play out.
I have no doubt there needs to be a fair amount of evidence and certainty for recording assets - accounting rules are consistent in that across the board. If you can't make a valuation with reasonable certainty that it will be realized, it won't fly past the auditors.
And I certainly hope you are right. Positive thinking can go a long way.
I'm not so sure anymore, see my second post (reply to ssp). Input and clarification surely welcomed.
ssp119: It's very confusing unless you are knowledgeable in the industry. I'm a CPA and used to reading accounting pronouncements, but not for this industry.
I just posted a link to an article, and the article had a link to the SEC's proposed rules. I see at the end of the SEC document references to reserves and resources. Best I can tell resources are before drilling, reserves are after drilling, which is what you are saying. Correct? Surely the 10 business articles I read prior didn't clarify that difference, so for a layperson like me, I assumed reserves covered everything, before and after drilling. Seems this is the source of confusion.
And the big difference is reserves can be booked or disclosed in financials (depending on type), and resources cannot.
Perhaps everyone else has this sorted already, but I've just arrived to this point.
FN
I think being able to book reserves on a balance sheet is a pretty big deal for a company the size of ERHE. I spent a few minutes, not a lot, on Google trying to figure out the new rules. I could not find the actual authoritative literature, but what I found was this:
1. Possible and probable reserves may be DISCLOSED under the new rule - that means putting them in a footnote as additional information, not adding the value to the balance sheet. Big difference.
2. New rules take effect 1 Jan 2010.
3. It's an SEC rule which brings the US reporting standard more in line with international standards.
4. Values would be a 12 month average of prices, not a spot rate of the last day of the reporting period.
5. Seismic (3D/4D) estimates are now allowed for booking proven reserves. (You can bet all numbers produced for clients will be conservative to CYA the experts.)
6. Final rules don't appear to have been issued yet, and I read in one place the SEC put out a 60 day comment period recently.
This is really good stuff and advantageous, but not a silver bullet for ERHE.
Most reliable source I found:
http://www.247wallst.com/2008/12/sec-changes-the.html
FN
Now that's the most glass-half-full comment I've heard in a long time.