Posted by: tryoty Date: Saturday, March 14, 2009 2:13:40 PM
In reply to: more please who wrote msg# 155104 Post # of 180008
more please, let me add...
First, 1/2 of all oil in every block in the GoG goes to the host nation. That's nothing new and a cost of doing business, always has been. 1/2 of AKPO goes to Nigeria too, and the Chinese bought a 45% stake for $2.46B, or about $5 per barrel.
The rest of your comments are pretty accurate. The money isn't coming yet because the gamblers (us) have placed their "bets". The investors won't come until proven. But when they come, they will immediately pay $5 per barrel because the company can be bought at any time for that price. What these investors have avoided is the risk of dry holes and non-commercial quantities. What they lose for that protection is the 10-bagger ride that we will enjoy before they even start to invest. Why would they invest at all if the stock is already trading at the valuation of the oil in the ground you may ask... production. As this proven oil is brought to production, its value goes up. Its values will go to $12-$15 per barrel at production... higher if oil heads back over $100. So these "smart money" folks may lose the initial 10-bagger, but they gain a HUGE guarantee. Known commercial quantities of oil that they can put a value on and a guaranteed double/triple over the 5 years it takes to bring a deep water field online. That's smart money investing smartly. We're placing bets that the oil is there, and we will be stunned by the reward for taking that risk.
When the news hits that Kina is an elephant, there will be no chasing, ERHC will be valued at its percentage of that oil times $5 overnight. Big money will buy it, and continue to buy it because they know that the definable value of the reserves found will only go up into production. The stock will not pull back from that level much because smart money will be there, knowing they have a guaranteed value and guaranteed gain as the field comes on line... they will continue buying with confidence.
The process repeats for each successful drill. People talk of 2009-2011 being the fun years. If ERHC can stay ERHC, the next DECADE is going to be a steady astonishing climb.
I think soon means soon this time!
