ERHC Energy Inc (ERHE)

[Krombacher]

Nevertheless, if I use my model for the probability of oil, and our second guessing is leading to either a "gusher" or a "maybe" but not a "bust" then our probability of finding oil should no longer be 30% as is implied by the market.

Let me put it this way, a bust = 0%, a maybe = 50% and a gusher = 100% probability. A maybe/sure thing probability is therefore more than 50% but less than 100%.

That means that our probability of finding oil, a lot of it, in block 4 alone, must be on average about 75%.

That second guessing alone takes the share price to approx. $1.85 based on my model with a 75% chance of finding the oil that we want as the input to the model. Even a risk-averse individual must find the current risk/reward ratio given the current share price to be compelling.

Krombacher