We shouldn't overlook two of the three pockets of profit concerning our investment.
These three IMO can and will all manifest themsevles to triple most things we have been discussing for years.
First of all : The Top Reservoirs
These are what the operators of the JDZ are making the first bet on. They are easier and less expensive to define and bring to market. Addax, in one of their conference calls, stated their efforts concerning the JDZ was to find these reservoirs. Do our demise, they gave a less flowery prediction than what would be more palatable to our ears. Specifically, and I'm paraphrasing, they said they expect to find a bunch of medium sized reservoirs, implying pockets in the 300-600 milion barrel range, further implying they would tie these together in an infrastructure to commercialize the whole group. In retrospect, that sounds fine to me. I expect we see several fields as such in several blocks. AND, what might not have been commercial, maginal, if you will, becomes a better canadate for development as the price of oil inches it's way up and beyond $100 a barrell. Also, I think it's likely we will encounter a few elephants drifting around upstairs, such as Apko and others.
Secondly, and easily dismissed ( out of sight and out of mind ) is the gas factor. It CANNOT be dismissed. It's way too big. Correct me if I'm wrong, but I thought I heard numbers on Bomu ( Block 2) indicating approx. 250 bcf of gas. That's a huge number. You cannot marginalize it. I forget the conversion factor to barrels of oil equivalent, but it's somewhere in the range of 1 billion barrells of oil = 1 tcf of gas, or was it 5 tcf of gas ?? I'm sure this equation drifts along depending on the market price of oil and gas, but, STILL, 250 bcf in Bomu is alot of gas. AND, if the equation is 1 tcf gas = 1 billion boe, thus Bomu's 250 bcf gas = 250 million barrels of oil equivalent. Add that with the first glance of oil in KINA, and you've almost got the NSAI numbers from the few wells we've already dug. I think we are very lucky that technology has increased enough that decent amounts of gas will find their way to the marketplace.
Does anyone believe that SEO doesn't have a keen eye of the gas factor ?? I think he most certainly does, and yes, it's only my opinion. BUT, consider the fact that SEO ( or shall we say Chrome ) are parterned up with China ( or shall we say Addax ) and Korea to monitize the gas factor. Whew, SEO, China, Korea all in the same sentence. That's alot to swallow. It's like SEO is graduating from a strong regional power to a much higher stage. I think we are riding the proper coattails.
Lastly, THE DEEPER OPPORTUNITY
From day one of my investment in ERHC, I've had my eyes and my attention of the prospects of very large reservoirs down deeper than the top reservoirs. For purposes of brevity and sore fingers from typing, we won't discuss this third finger of our investment. Besides it's just too plain scary or stupid to do so. Wink !!!!!
JMO
Red
