![](http://investorshub.advfn.com/images/default_ih_profile2_4848.jpg?cb=0)
Friday, August 22, 2008 12:26:31 PM
This remaining 7 billion is actually worth MORE than $15 per bbl BECAUSE it is unencumbered by additional taxes which have already been paid.
Now to do the actual calculation of the bbls attributable to ERHE in addition to taxes you have to subtract out cost oil from that 7 billion figure, you have to subtract out royalty oil from that 7 billion figure and then you come up with the net bbls that ERHE has the revenue rights to. These net bbls are then unencumbered by any additional taxes or costs and as such are worth more than the $15 or whatever value you chose to assign to proven reserves. This does not represent the proven reserves booked by ERHE according to GAAP but what it does represent is the amount bbls ERHE will receive revenue from. Then all you have to do is multiply that number by the price of oil and you have your cash flow. No further reduction is needed for taxes, royalties or costs because they have already been "paid".
The moral of the story here is you can't determine value based on GAAP proven reserves alone because the costs associated with those proven reserves can vary widely from company to company depending on tax rates and other costs. You need to base value on discounted net cash flows which incorporate those costs into the equation. Taking a reserve number and multiplying it by an estimated value per bbl just doesn't cut it because the costs associated with those reserves vary so widely.
Recent ERHE News
- Form SC 13G - Statement of acquisition of beneficial ownership by individuals • Edgar (US Regulatory) • 02/06/2024 07:31:22 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 12/08/2023 09:06:42 PM
Peer To Peer Network aka Mobicard™ Launches AI Investor Chatbot Boosting Engagement & Lead Generation on Ihub • PTOP • Jul 15, 2024 8:30 AM
Greenlite Ventures Announces AI Integration into No Limit Platforms • GRNL • Jul 15, 2024 8:00 AM
Cannabix Technologies and Omega Laboratories Inc. Provide Positive Developments on Marijuana Breathalyzer Testing • BLO • Jul 11, 2024 8:21 AM
ECGI Holdings Enhances Board with Artificial Intelligence (AI) Expert Ahead of Allon Apparel Launch • ECGI • Jul 10, 2024 8:30 AM
Avant Technologies to Meet Unmet Needs in AI Industry While Addressing Sustainability Concerns • AVAI • Jul 10, 2024 8:00 AM
Panther Minerals Inc. Launches Investor Connect AI Chatbot for Enhanced Investor Engagement and Lead Generation • PURR • Jul 9, 2024 9:00 AM