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Art004, thanks so much for the link, it was very informative. Now a little math. Total signature bonuses for Blocks 1-4 from link was $324MM. Average for each block, $81MM (to make it simple). Each 1% worth 0.81MM. ERHC's share:
Block 2 22%
Block 3 10%
Block 4 19.5%
Value (at time of bidding)
Block 2 0.1782MM
Block 3 0.081MM
Block 4 0.15.8MM
Total for Block 2-4 = $41.7MM
Value per share (~700 MM shares outstanding) = 6 cents per share. Add this to the "money in the bank value" of ~ 5 cents per share and you get the "base" value of ERHC, 11 cents. This is probably why the five year bottom or support level does not go below 11 cents.
Of course, one factor not considered, is the fact that ERHC has free carry (with eventual payback if oil is found). This has to be worth something.
Any comments guys?
I am not sure who would know the answer to a question that has been on my mind recently, but I would think some of those that were here for at least five mind know. When the bids went out for the JDZ and partners (Addax, Sinopec and Anadarko) bid for the rights to the JDZ how much did they pay for their share. I am trying to determine how much ERHC's rights are (or were) worth when the auction occurred.
For example (figures just made up) if Anadarko paid $35 million for 35% of Block 4, each 1% of Block 4 was (at the time) worth one million dollars. Did this "cost" vary for Blocks 2, 3, 4?
Once to "value" of each 1% of the various JDZ blocks is calculated, one could put a value on what ERHC's base value (as of when the bidding occurred) for their share in the JDZ.
I find it strange, after reading the board for nearly 3 years, that this calculation has not appeared. Do any of the old timers know how much our partners paid for their portions of Blocks 2,3 and 4. Also, would have all the other minority partners had to have paid their proportion? I appreciate any help in getting an answer to this question.
Masker, I would be there if my wife would let me, but just getting the last 100K was a real battle. I think there are at least five of us in the million plus club. (maybe Umbra, etc).
After sitting on my buy order at an even ten cents for the last several days, that today I decided to bump it up to 10.5 then finally to 10.6, which filled a short while ago. So, I picked up another 100,000 shares (in two 50K buys at 10.6 today at 12:21:22 for those who want that verified). I really feel that this end of the year selling is now over and with that ending, the continue downward trend will end at well. I look forward to a steady rise in January as those who sold in December get back in.
My boat is so overloaded with EHHE shares it may sink (over one million shares)
DeGen
PS: Happy New Year to all, I know all ERHE shareholders will have one. One dollar by this time next year.
The odds are excellent that ERHE will hit a dime today or tomorrow as the last minute rush to beat the year end selling comes to a close.
Only two more possible days of year end selling. Hopefully, in January the share price will begin a steady rise and end this continual downward trend.
The news about how oil company report reserves (see post I am replying to) makes me look VERY forward to the new EHRC reports that are due out very sooooooooon.
Bigfish, I thought I heard the IRS "waived" the required IRA withdrawal temporaliry for this year or it may have been for next year (2009). Did anyone else here that? It didn't apply to me, so I did not pay too much attention to it.
It is more than an "appearance" of the SP going up. A few days age, EHRE was trading in the 11-12 range and now it is trading in the 14-15 range. In my mind, that really is going up. FINALLY!!
I will make a wild ass guess and predict ERHC will see the 20's the first week of January. But I have been so wrong in the past with my "hopeful" predictions, it is sad.
Nightdaytrader, excellent comments and your concern about getting a rig is justified. If you look at my tag on EVERY ONE of my posts it reads, "The $64,000 question is: Will there be a Rig of Opportunity or do we have to wait for the AA begin drilling On Oct 1, 2009?". The reason that is there because I KNOW that is the MOST important event for the company, and the most important event to move the share price upward. I wish I knew the answers to your questions, but no one knows those answers right now. Again, great questions.
Troy, maybe you should watch the last presentation again and see Bovell at his worst. Maybe he was having a bad day, maybe he was thrown in at the last moment, but what I saw I did not like. Although I have only limited contact with Jim L through the cc's, he appeared to be on the ball to me and very energetic.
But maybe, Jim L. wanted "too much" in renogotiating his expiring contract and Peter called his bluff.
The BIG question is whether ERHC hit the real bottom the last couple of days. The SP was on a continue spiral down for months now, so why did the SP finally do a little turn around. Several things happened;
1. the last cc which certainly was not earth shaking, but there was no bad news either
2. the AA finally left for the GOG. Better late than never, but still a very expected event.
3. the various BS from OILY, not even going to comment on that since everyone here should already realize he knows nothing more than the rest of us. He is a Pied Piper that only snakes should follow out of town. If you have him member marked, please remove it right now, as only fools listen to his drivel.
4. the price has gotten so low, nearing the cash valve of 5 cents, that investors realize that the oil rights must be worth something. That value has to be at least 7 cents, plus the 5 cents, gives the bottom at 12 cents.
5. the trading volume picks up a little, always a good sign.
6. the end of year selling is slowing down and most have already completed that kind of selling.
7. the news today about ERHC's staff reduction is treated as good news and an effective cost cutting measure. Too bad they let the wrong guy go.
8. oil MUST be close to a bottom, which may bring about the much anticipated ROO. Although I will believe that when ADDAX puts it in writing.
So in conclusion, I predict the bottom is past and the SP will not go below 12 cents again. Those that scooped up shares in the 11'S should be grateful.
Because of the decision to let Ledbetter go, I must assume the company has also decided not to continue to look for acquisitions since Ledbetter was the one doing most of the scouting. During the cc Peter indicated, the company had not made up its mind yet, but now with this event, I am reassured the acquisition idea is out the door with Ledbetter. Thank God! I have ALWAYS been against the idea and NEVER thought it could fly. I always believed it was a big waste of money even looking into the possible prospects. And why is Bovell still working for ERHC? What are his duties, not that the acquisition idea is tabled? Does he hide under the table so they can not find him to give him HIS pink slip?
Go ERHC, get lean and mean!
I hate to see Jim L go, he was always informative and candid during the cc's. It looks like the expiration of his employment contract was the key here. Certainly, Jim brought a lot more to the table than Bovell, but I guess Bovell's contract has some time to run before he gets the boot.
I was the one that suggested that maybe a half time employee would be adequate during this very slow period (waiting for drilling, waiting for the ROO which may never happen). I guess the company really reads IHUB or management is smarter than I thought. Cutting costs in today's economic climate is mandatory and I am glad ERHC's management is doing just that.
PS: Now if they can just find a tenant to sublet at least half of that 5,000 sq ft office space, I would be even happier. At list the space for rent with a real estate company to show that they are really trying get a subtenant.
The books in Vegas just posted the odds on the AA arriving safely in the GOG at 100 to 1. Do they know something or do they have "inside" info from the pirates? Maybe the shipworkers told the books there is hole in the bottom of the boat!
Top Shelf, I do not see how "they" need 2-3 ROO's. In the cc Jim L mentioned that one of the impasses for signing a ROO was "they" (the operators) did not want to commit to a long term 5 year contract for even one ROO. So how can they utilize 2-3 ROOs? It appears if they get one ROO it will be busy for several years but not all five years. Don't forget "they" are already committed to use the AA to drill come the second half of 2009. It appears the ROO is only needed to fill the gap between now and when the AA arrives. How long is that? Maybe 6-12 months. So they only need a "filler" ROO, which is probably MUCH more difficult to contract than signing a ROO for A LONG TERM CONTRACT. To me, this would indicate the likelihood of an ROO being signing is less and less as the AA gets closer and closer.
Revised an error in Q2
I think its time to start a list of questions for the conference call:
1. Has the annual shareholders meeting been scheduled yet? If not, can you estimate when the meeting will be?
2. What is the current status on the investigations (DOJ, Homeland Security, IRS)? Will the wording about these investigations in this year's Annual Shareholders Report contain the same wording as last year or will there be an update on the status?
3. Can you elaborate on David Bovell's off the cuff comment during the last road presentation about the majority shareholder not selling for "south of ten dollars"?
4. Are any future road show presentations planned or have these been put on a temporary hold?
Additional questions are welcome!
I think its time to start a list of questions for the conference call:
1. Has the annual shareholders meeting been scheduled yet? If not, can you estimate when the meeting will be?
2. What is the current status on the investigations (DOJ, Homeland Security, IRS)? Will the wording about these investigations in this year's Annual Shareholders Report contain the same wording this year?
3. Can you elaborate on David Bovell's off the cuff comment during the last road presentation about the majority shareholder not selling for "south of ten dollars"?
4. Are any future road show presentations planned or have these been put on a temporary hold?
Additional questions are welcome!
Your thinking is just like the UAW workers at GM & Ford, they will not budge on their over inflated pay scale. Soon they will be on the unemployment line. Some employees must realize they are replaceable and for far less in today's economic times. The auto workers in the south do the same work for about half the pay. Maybe you would not work half time, but I sure you can be replaced by someone who will. The ERHC employees are in the same boat. These economic times are very difficult and anyone with a SECURE job should be very thankful.
Dadd, if you check the post I am replying to, you will see that several days ago I posted the lease information for the office space. If ERHC can save 2-3K a month on a sublease, that would cut their rental expenses in half. Maybe that is not very much, but as I say the company MUST get leaner in case of harder times. Someone said the savings I have suggested the not meaningful, but I say ANY savings are very meaningful. I would also ask those naysayers, where would they cut expenses? Here are some more cost saving measures.
Salaries for only four employees are necessary, the last guy in does not appear to be presently needed. When he is needed again, he can be hired back as a consultant like before he was hired full time. It would also not be a bad idea to have ALL the present employees go on HALF TIME (at half pay) while they wait for the drilling to start. Not much else is going on. While the shareholders sit and wait, and managements sits and waits, why are they getting paid for full time work when their is little if anything being done.
Legal expenses are likely down, but VERY unforeseeable in the future. Especially any possible fines. I believe at present with the investigations on hold, little money can be saved in this area.
Where else does the company spend money, except on travel expenses, presentation expenses and possible investigating new acquisitions. All of which are money wasted.
How much does it cost to wait 10-12 months for the drilling to occur if they just sit on their hands?
Dadd, Strass's cost reduction plan has PLENTY of merit. A few days ago I posted about the company's cost of their oversized office space and suggested subletting at least half of the space. Is their anything wrong with that idea? IMO, the company is being EXTREMELY wasteful sitting on this space and not even trying to sublet it. I also, indicated that laying off just one employee that is currently NOT needed in today's economic climate (not the right time to make ANY acquisition deal) would be cost beneficial.
I also love Strass's idea to eliminate all presentations and any travel looking for acquisition investments. Any "charitable" contributions to the African poor should also be put on hold at this time.
This company MUST become VERY frugal with its cash since their is no more cash coming in and who knows what unexpected expenses may come up in the future (read legal costs).
How do you think the drilling will be sped up if the JDZ treaty is abolished by Nigeria and STP? My guess that the operators in Blocks 1-4 will be in World Court in a NY minute. The legal battle would last at least 5-10 years. After the courtroom battle ended it would be another 1-2 yrs before drilling. So, STP would not get any oil benefits for at least 7 years. Is that any quicker than the present snails pace? Plus what country would ever want to do business with Nigeria and STP in the future if they welsh on this international treaty?
DeGen
Ps: Troy, I do feel your same animosity towards the company at present.
Office space cost for ERHC, should they cut costs in this area?
ERHC has 3 years remaining on their lease. They pay $8,920 per month for 5,300 sq ft. for five employees who probably are not in the office half of the time. At the time of the rental the space was WAY too large for a company this size and now two years later, remains too large. Why hasn't the company sub-leased at least half this space? That would save them $4-5K a month in overhead. In these mean and lean times, the company should be looking for every way possible to save money. To me, doing a sub-lease is a no brainer. Are they worried about a new CEO coming aboard and taking up a great deal of space. I don't think so. They could still fit in half the space even with double the staff they presently have. I do not foresee the staff doubling anytime soon. In fact, it might be time for the company to consider reducing its staff. Maybe those not competent to give a simple presentation should be the first to go. Maybe those involved with acquisitions should be the first to go, since in today's economic climate, an acquisition is not the wisest thing to be doing. One should be keeping a tight hold on their cash.
DeGen
Troy, I hope your information is correct. I would also expect a "sail away" announcement by the shipyard and a PR by Addax.
DeGen
I not sure if ERHE is only down 7%. My Level II shows last 12 cents, vol 512,782 (bid 12 ask 12.5) while my Ameritrade acct summary shows ERHE 13 cent, vol 512,782 (bid 12 ask 12.5)
I believe ERHE shareprice is 12 at the close.
It is hard to understand why ERHE is at 13 down 7%, while oil is up 10%. Although the volume is light, it is hard to believe the price is this low. Maybe a 5 year low? Has something happened to their oil rights? Has the AA sunk?
Has the DOJ reactivated the investigations? Has everyone just become impatient?
DeGen
Ps: I hope the football game tonight is better than watching ERHE's shareprice.
There is no doubt in my mind that SEO is a better poker play then Jean Claude. SEO knows full well how strong a hand he has and there is no way JC will "bully" him or bluff him out of his "big pot".
DeGen
The big problem is the Jean Claude is a VERY BAD poker player, he thinks he holds a great hand with his company willing to pay for a deep water drillship. He thinks the Rig owners will come running to him offering low prices because the rig owners can not "unload" the drillship elsewhere. The rig owners have called his "bluff" and realize these deep water drillships continue to be in HIGH demand justifying the high prices they are asking for them. JC refuses to pay these high prices and continues to be out of the pot having the losing hand. It appears JC's bad poker playing has caused him to be a bad businessman as well, causing his company to lose out on drilling opportunity.
DeGen
Ps: I write this post between hands in an line poker tournament!
Spec29, maybe SEO is in agreement with your thinking and that is why he WILL hold out for the ten bucks a share. SEO knows damn well what he has in the JDZ and knows he is sitting on a "black" gold mine. I to not think he is in any hurry to sell, especially when the current share price in soooooo low. Any high priced sell would be impossible to make at this point in time with the share price at 14 cents. We all must be patience and wait it out with SEO for the oil to be confirmed after the drilling. Hopefully, in 2009, but that is not guarantee. The AA is STILL in the shipyard and at least a year from drilling for Addax.
DeGen
Ps: Excellent post Kaydee, I fully agree. Times are "achangin"
Oily, I missed the "update from ERHR on FridaY". Can you fill me in. Maybe on Monday? TIA
I am not an expert on rig pricing, but aren't those new high priced (
Over $600K) for the super duper ones that are twice as efficient? If so, that price for an "older" rig was at a substantial higher rate and indeed an INCREASE. But your expertise on this matter would be appreciated.
King, that was one of your most coherent posts, however, as usual there are many flaws in your thinking on why ERHC is hitting new lows.
Although you mention the falling oil prices as a reason, this is possible the single most factor in why the SP is low.
But almost just as important is the lack of the ROO. However, the ROO may show up any day now. No one knows when this major event will happen. The anticipation right now is at an all time low because Jean Claude indicated he is looking for a better deal and does not appear to be in any hurry. This fact is very disappointing and also weights heavy on the falling share price. The market hates uncertainty and for sure the arrival of the ROO is uncertain.
I also agree with you about the bashers, they know nothing like the rest of us. The bashers are no indication of where the shareprice is heading.
As far the investigation having under any current bearing on the sales price, you are very wrong since these investigations have been factored into the sales price years ago. The longer there is "no actions" being conducted by the DOJ the more likely nothing will ever be done. Can you say MORIBUND, MURIBUND, MORIBUND. Just keep repeating those words until it finally sinks in.
Another important factor in why ERHE's price is deteriorating is because the ENTIRE stock market is falling as welling. Why should ERHE be any different, especially since it is in the oil industry, which is being hardest hit. Oil prices have to be near a bottom right now in the low 40's and IMO, will stabilize in the forties.
My guess is that Spec29 and Rufisque have two different sources so it is much more likely this "rumor" has some teeth. Less than 30 days to the new year and Q1 of 2009. The share price sure could use a boost and a ROO would certainly give the SP the needed boost.
rufisque, nice to hear of possibility of some Rig action. If I recall correctly another reliable poster also indicated there would be a rig in the JDZ early next year, but I do not recall his name, maybe Spec29?
Thank you, rufisque, for your latest information, it is much appreciated.
Jim Long, great idea to help resolve the ROO impasse. We can only hope both sides are open minded enough to accept this kind of pricing arrangement. Your efforts to help are greatlly appreciated. It is nice to see all of the contributions done by IHUBers, especially your latest letter to Dan K.
Strass, any recourse against ERHC for the moribund statement would not fly since it was said in a conferece call (if I recall correctly) where a full disclosure was given to cover their asses. Of course if it can be proven that Madigan was lying through his teeth and knew otherwise that would be a different story. IMO Madigan was VERY forthright, candid and honest in his "opinion" of the situation. In fact, for an attorney he probably said too much and should have been less "forthright" about what he knew. IMO there is no chance he was lying about the situation ala Enron. The very fact that govt has not filed any new documents/motios is a very clear indication that NOTHING is going on.
Y Mike, thanks for the correction. Moribund is not a word I use everyday so I erred in my spelling. Thanks also for the definition. Maybe the King will finally realize the investigation is not going anywhere and is no longer a threat to the company. Now King say MORIBUND three times so it finally sinks in.
King, concerning the effects of an investigation: when an investigation is first announced on any stock, the SP takes an initial big hit. Then over the following months the SP normally drifts down further awaiting for some action (like an indicment or other activity like evidence inquiries). If there is "no action" the market accepts the investigation and the investigation hasbeen fully "factored" into the SP. In ERHE case the investigation is dormant and their attorney has called the investigation mortiban. Why do you keep bringing this up? Are you trying to drive the shareprice down to get back in at a lower price or do you just like to repeat the same drivel over and over to hear yourself talk?
What do you suggest Addax do? Should Jean Claude go to the shipyard and light a fire under the workers there to get the AA out faster? You get a clue! Or maybe Jean Claude should threaten to re-neg on the contract and NOT take the AA when it is their turn to use it. That would really show them.