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Unbra, you lost me on the Easter nonsense?
And I agree these plays are both adjacent and are significant producers.
My question for the board was is this a new JV and if so, what does everyone think
This was just posted late last night. Has anyone seen this?
This is from a so called 'expert-trader' blog. Has the ERHC website posted news of a JV with Baker-Hughes and Schlumberger for more geophysical data.
The date on this is 9/25 so if this is old news I apologize to everyone.
Read below and share your thoughts.
INVESTOR ALERT: ERHC enters into joint-venture license agreementwith SCHLUMBERGER LTD (NYSE: SLB, $60) and BAKER HUGHES, INC.(NYSE: BHI, $40) for seismic data on some of the richest offshoreoil blocks where ERHC controls a huge working interest! INVESTORS - WE HAVE FOUND THE HIDDEN GEM: (OTCBB: ERHC)! ERHC's joint-venture with SCHLUMBERGER and BAKER HUGHES puts them inworld-class company with these leaders in oil exploration and reservoirimaging services. The involvement of SLB and BHI reinforces the$MULTI-BILLION DOLLAR VALUE that has been placed in this offshoredrilling haven. ERHC's goal is to maximize shareholder value fromexisting contractual rights, making them a significant player inthis region. THE BIG MONEY ROLLS IN: The seismic data from this joint-venture is being made available forfurther involvement by the LARGEST OIL COMPANIES IN THE WORLD overthe next 2 weeks!!Bidding wars have already developed between major oil companies suchas:SHELL, CHEVRON/TEXACO, CONOCO, EXXON/MOBIL, PHILIPS, and MARATHON whoare willing to pay $Hundreds of Millions to drill in these zones andpartner with ERHC. STOCK SET TO EXPLODE ON EARNINGS BOOM: ERHC's exclusive right to participate in exploration and productionalong with OIL INDU.S.TRY GIANTS could be worth up to $FIFTY MILLIONas these oil blocks are adjacent to Billion Barrel producing regions! SPECIAL SITUATION ALERTS' newsletter offers valuable research thatbuilds your wealth. We target serious gains for serious investorswith a 700% investment return on ERHC.
http://expert-trader.blogspot.com/2008/09/investment-scams-newsletters.html
EMETIB....?
You would be foolish to fly that direction.
I would pass.
Colloid,
Help me out here, the numeric value is .000352.
Is that not just under 4/10th's of 1 percent?
Bayfisher
Pete,
I think you are right on track. I know that shareholders are frustrated with the lack of movement with this stock and then anytime we get a brief spike the price seems to retract within a few days.
What everyone should focus on is the volume, there are over 710 million shares outstanding with a stock that is measured in pennies and still this stock is trading on most days less than 250,000 shares. That is less than four-tenths of one percent. If and when any positive news develops this stock will go up exponentially.
Bayfisher
Your numbers are better than mine.
I agree, I have no poroblem with the tax rate. I am only directing MID that he is not applying that tax rate to the proven reserve numbers.,
Mid,
You must have scrambled and plagiarized all night to come up with this analysis. I personally do not think you have ever shown yourself to have enough understanding of the mechanics and economics of oil to come up with this on your own.
As to your 1st point, in very few instances between royalties, land usage fees and taxes do you ever see a number much under 50% on the production economics. And even so the taxes are based after costs and will include all variable as well as fixed costs associated (and this is important so write it down) with drilling as well as on-going production costs. Where you came up with a 20% tax figure I cannot fathom unless you are in an area so uneconomic that incentives are being given to induce companies to explore there.
As to your second point, the 14 billion figure was never validated as an actual volume available. It was appropriately labeled as the total amount of risked and unrisked reserved that could be in the JDZ that had currently been licensed. Who knows what we will find ‘maybe more’ but ‘probably less’. The point that I was making is that if the $25 per proven reserve figure was accurate then all of a sudden our economics get enormous quick. ( I am still looking and hoping that we can validate the $25 number)
As a suggestion MID, stay off topics that you do not have even a modicum of knowledge or understanding of.
Pete,
The casing goes betwen the production string and the outside wall of the hole. The production string sits in a packer just above the perf's so that (in theory) no oil is produced up the casing.
In the lower 48 there are completions called 'barefoot completions' where casing is not used, but I cannot see them completing a JDZ well in this manner.
Bayfisher
And yes drilling is very expensive.
Pete,
The simple answer is no.
The drilling is the same, the downhole completion jewelry is the same, The time it takes is different only in that an exploratory well will run a lot of tests after it is completed and perfed. These tests are what require additional time and with a land well the rig can move off before the testing is done, in this case I suspect that the drill ship will have to stay on-site to support the testing.
But I am not 100% sure on this as I am inexperienced in deep water drilling projects.
Bayfisher
Mid,
As I sometimes see, you really do not know what you are talking about.
Proven Reserve valuations are used by companies firms to value and book the assets associated with their Balance sheets. This is important as companies are held captive to little things like ratio's names Debt to Equity, Price to Equity. If a company can not value the potential reserves they have in thier portfolio then they really cannot leverage these reserves and get the full potential out of them.
Now when a company books a proven reserve (at whatever value) the PSC as well as any foreign taxes have been taken into account. That is a GAAP truth that is uncontestable.
My point earlier was asking if posters on IHUB could validate the $24 per barrel proven reserve value. If so all shareholders economics have doubled, at least if you hold the view that i have held that proven reserves are worth about $10 to $12/Bbl. Now pull out your slide rule and run the numbers I suggested and you will see that if that number $24 is correct, then my numbers are within an acceptable range of where we could be.
Mid, you seem to relish your role as a contrarian even when you have no idea what you are trying to talk about.
IMO
BAyfisher
Did you mean 'one rig in 2009'
Looking forward to seeing it.
I wish someone could find more validation on the $24/Bbl for proven reserves. Essentially if we can validate that number every share owner should just about double the economics they have been assuming over the last 6 months.
What I think is interesting, when I first bought into ERHC, proven reserves were valued at $5/Bbl and I thought it was a terrific buy then. Now multiply that value by almost 500%.
Bayfisher
YK,
I quickly ran the numbers based on a $24/Bbl proven reserve value.
If they prove 14 Billion recoverable (that is the combined value (risk and unrisked) given by the latest Geophysical sureveys) the our share price would come in around $80 a share.
That assumes the recoverable oil is averaged evenly between zones 2,3 & 4. if the predominance of oil is found in zones 2 & 4 (which I assume will be the case) then that number (sp) goes up.
What I am excited about, is that, if in the first 5 well drilling program between 4th qtr 2008 thru all of 2009, they prove just 4 Billion Barrels our SP should hit $23/share (again could be higher depending on which zones the oil is found in). And if I remember correctly, the 4 billion recoverable number was close to the number that the geophysical surveys said should be there under the RISKED scenario.
I had asked about 3 weeks ago (on IHUB) what a fair book value would be for proven reserves and most responses were in the range of $12.50 to $15/Bbl. If $24/Bbl is correct then shareholders have something to get very excited about. Essentially, if $24/Bbl is a market approved value price for Risked reserves, coupled with the fact that Oil for all practical purposes will continue to stay over $100/Bbl. Then By my calulations this stock should be trading today no less than $10/share.
Again,
I have little experince in drilling in this depth, but I would estimate 2 to 3 weeks
Spec,
As i said, I do not know know long it takes to drill in 6,000 feet of water. 60 to 65 days may be the average time.
But in my opinion Chevron was tight-holing information so much; no one knows for sure how long it took Chevron to spud-in, drill and complete OBO-1.
Pete, not even geophysiscists looking at 3-D seismic with overlay mapping can tell you what is down there. They can tell you that a formation looks like it could be a trap and probably should be a trap. But until at least 2 wells are drilled and test flowed and then engineers run bottom hole pressure tests, you cannot say what the reservoir potential is.
on land a well this deep would be 40 to 45 days to drill, perf & complete. Offshore in 6,000 feet of water I am not sure.
Pete,
We can only assume Schrull and Ledbetters comments were based on the meandering stream feature of the reservoir or possibly the many Toe Thrust features.. Actually a lot of the geology and the seismics that are based on the JDZ have the potential to be enormous, and when you couple that potential to what has been said by both the drilling crew and company official regarding OBO-1 (though it was quickly covered up it) is hard not to get excited about what is down there.
But the truth is, until the bit turns we will not know for sure.
Pete,
The ocean floor and the geology of the reservoir are not the same. The reservoir itself may be 2 to 3 miles below the ocean floor. When they say a meandering stream they are talking about a channel bed from millions of years ago that deposited layers of layers of silt and sand. As these layers piled up they created a porous trap (or vessel) that could collect the hydrocarbons over the last 100 million years or so. Eventually they were covered up by more deposits and pushed down into the earths crust. The meandering channel they talk about is deep below the floor. And essentially what this is telling us is that this reservoir could be a very long and very deep reservoir. Reservoirs that derive from a meandering channel have many layers of sediment and tend to be deep and long. And are generally regarded as a positive structure.
I have mentioned a few times that the geology of the JDZ (from what we know) has a lot of similarities with some very large reservoirs currently producing. That in itself means nothing but if it is confirmed that the JDZ has the appropriate features to trap hydrocarbons then as I have said before and with caution the JDZ could be a very large find.
I think one of the orginal statements we heard from a geologist of one of the company's that had access to OBO-1 information was 'Company Making". Is this fabrication is it the truth, therein lies the frustration and is the catalyst for most of the discord on this board.
I for one am going to hold on to my shares and wait and see. In my limited opinion the upside potential is worth the risk.
John,
As I remember from Depositioanl Processes 101, a meandering channel is a stream bed that is primarily sand and silt. Additioanlly you will see along its sides what are called splays (this is where when a river floods it deposits additional sand beds (they lool like fans) along its sides).
all of these structures generally can make a good trap for hydrocarbons)
Well said Kelly,
I am at a loss to understand what most of these negative posters feel that the ERHC board is not doing?
It all comes down to drilling and the timeline on drilling is out of ERHC's ontrol at this point. Both deep water rig availability and the operators control that timing.
Until the bit hits the dirt there is not a lot that anyone can do but wait.
You have to assume a few of the posters on this board are working for (or are) day traders trying to leverage a few pennies a day. I could care less, as the price does not matter to me at all until we start drilling. At that time I will care about SP?
Thanks for the words of encouragement and let's hope the JDZ truly holds what a lot of us suspect.
BayFisher
Art,
The literal denotation of moribund is "almost dead" when Mike made that statement I was wondering if there was an intended double entendre there.
I think we put this issue to bed and realize that no one from the DOJ is going to come out and officially announce that the investigation is over and ERHC was clean.
Bay
TRY,
I like a lot of us here have been holdoing ERHC for well over 4 years. And like a lot of us I am underwater at present.
BUT, I know that once the drill bit starts turning we will see the SP appreciate rapidly. I keep trying to understand what it is a lot of posters want ERHC to do to promote the shareprice before drilling. In my opinion they need to hold on to as much cash as possible in order to take advantage or mitigate any issues that may arise during the initial drilling phase. No investment opportunity that comes across their desks could be as substantial as ERHC rights in the JDZ and EEZ. ANd in my opinion everything needs to be done to protect that investment, that is primary.
I understand that the waiting is frustrating but that is the price we have to pay. Let me just remind everyone how valuable ERHC's rights are and why they first and foremost must be protected.
If between Zones 2, 3 & 4 the operators find just 4 Billion barrels (which has a market value of just under a half trillion dollars), then That alone (using my conservative calculations) should push our share price to over $11.50/share.
From what I have been able to glean from the available information that has come out and pushing as much information as is available to my Seismic friends and relatives, the chances that we will find at least 4 to 5 billion recoverable barrels in the 3 zones (2,3 & 4) is extremely high. If as is hoped that number is more in the line of 12 to 14 billion barrels, then our share price shoots up over $30.
Granted we have a hard task, we have to wait. And all of us get caught up in the board and hope that some unbelievable news comes out on it. It has been a fairly bleak summer (as far a news), I have even started looking forward to Oily's silly prognostications.
Anyway that is my take on everything. Sorry for being so long winded. My advice to everyone is just wait, once we start drilling it will get very very exciting.
JMO - Bayfisher
PS: If anyone wants me to corroborate my numbers above just contact me.
Hawk,
Right on the money.
Strass, I have not read any reports on parafin problems in the GOG, and frankly that would surprise me as you do not see parafin problems as much where you have higher gravity oil
Dat,
I cannot say without having more information available. And like yourself I am a bit conflicted by the different statements coming from the Operator/Owners of the companies associated with the JDZ.
The potential is there, in what form that is I just do not know.
Degen,
I really wish I could but without drill logs, flow rates and BHP's (bottom hole preesure tests) I would only be making a very uninformed guess.
What I can tell you is that the little bit of the picture that we can see looks very good.
As I have stated before I was invloved in Prudhoe Bay and I have overseas experince as well. In PB we had a reservoir pressue of about 3,600 PSIG a surface pressure of about 2,100 PSIG, our producion column (or pay zone) was a little over 90 feet. To date that reservoir (sadlerochit) has produced more than 12 billion. And one more thing it was also a meandering stream formation.
Not necessarily, but high well head pressure generally means you have a lot of lift and will not have to actually pump the oil out of the reservoir, The two factors that matter most are perosity and permeability. The first measures how much oil the stone in the formation can hold and the second measures the abilty of the oil to move within a formation.
Five seprate zones simply means that they have identified five seperate zones that hold oil. In this case the more the better because it indicates a larger deeper formation
Midtieroil,
Good point and that is why I do not think that the 10 well program will focus on more that 2 or 3 hot spots for drilling and then if a significant find is made the company will focus on truing up those reserves.
Pete, I do remember J Ledbetter sayig that but still am not 100% certain that we know from anyones statement exactly how that reservoir is laid out.
Strass,
I assure you they will not spend the amount of money required without determining what the specific area they are in holds. They may not get to do as many areas as they would like but they will determine what they in the areas they do drill.
Frankly with the cost of deepwater drilling rig where it is, I would suspect that the engineers that make the drilling location determination will focus on the areas they feel they will get the most bang for their buck. From everything we have heard that should be Zone 2 & 4.
I would be surprised if the 10 well program deviated much from 2 to 3 specific areas.
Bay
Petemax,
I don't disagree with you but am not sure why you feel that instead of one large elephant we will have many smaller fields.
In looking at the 3D seismic pdf's on ERHC's website as well as the news about the meandering channel, then I am not for certain that we will only have several separate AKPO type structures.
BayfisherII
Strass,
I am not 100% for sure (maybe only 90%) but to my knowledge as few as 3 to 4 wells can be drilled to determine the reservoir potential of a specific field. Which indicates that once drilling begins and if all things fall into place the market could have a good idea of what some reservoirs with the JDZ have as proven reserves in a very short time (maybe 6 to 10 months). And depending on what those reserve predictions are we could see an ERHC stock price appreciation also in a very short time.
My point being, it only takes 3 or 4 wells to determine the portential.
BayfisherII
Thanks Mike,
The reason I ask is: can we utilize a number such as this one($13/BBL, 10% of todays market price) to determine the "potential' for share price appreciation; if and once we have proven reserves. If reserves are estimated around the 10 Billion risked potential the original geophysical survey indicated, does that mean that our share price could move to approximately $35/share over night? Not trying to hype ERHE (it does not need it) I am only trying to understand the potential for an extreme exponential rise in share price (almost overnight) once reserves are determined.
Therefore, my best guess is that once a rig is on-site we will not see any MM's swinging the price around, it would be too risky. You get caught on the wrong side of the boat (in this case 'The Rig') and you could get severely hurt.
Anyone have any thoughts on how fast and how much the market could understand and apprciate the value of the JDZ if reserves are proved up?
BayfisherII
Does anyone on this Board have a reasonable guess as to what proven reserves are worth at today's prices?
I know that when Oil was between $25 and $40 dollars a barrel proven undeveloped reserves were given a $5/Bbl book value.
In the JDZ we have a lot of factors that could affect this benchmark both positively as well as negatively.
Such as:
PROS: $130/Bbl, highest grade crude, 40 to 45 API gravity, far enough off-shore to reduce geo-political turmoil, zero carry value through project pay-back
CONS: Ties to Nigeria, in 5,000 foot water creating high recovery cost.
Given these pros & cons (and I am sure there are many others I have not alluded to) what would most of you think a book value would be per barrel for JDZ reserves.
I am curious to see what you guys think,
BayfisherII
Strass,
You keep changing your argument. Now your issue is the age of the investors is what concerns you.
Granted we would all like to have a rig in place within the next 4 months for many reasons. But I find it hard to develop a rational conspiracy theory based on the fact that the rig is being delayed.
WZeb,
There is a company out of Oklahoma, Syntroleum that has a patented process for Coal gassification using air and not pure oxygen. This process can also convert Natural Gas to sulphur free fuel (with higher flash point). While the air process is not as efficient as the pure oxygen process it has the advantage of a significantly reduced Capital cost.
All of these processes are based on the old German process invented in the late 20's called the Fischer Trophe Process. This process is what allowed Germany to stay in Ww2 as long as they did.
The biggest player in this field today is SASOL. Don't know much more about it but it is very interesting