Okay Robj - I'll give you my view - straight.
I think the hard part of sticking out ERHE has been done. The rights we have in the JDZ and the EEZ are no longer challenged, the potential for issues stemming from our inception of those rights appears to be behind us, the JDZ is now actively moving forward with drilling, and the EEZ blocks appear on the horizon. The roughest part is over, and we survived. It took forever, but it got done. A better understanding of African time has been learned.
We have solid partners in the region, not some fly-by-night companies that could double over in a moment. Would Sinopec really work with us if we weren't a real company? They are hungry for oil and gas, which is good. That increases the chances of having value should the fields be found mostly gas instead of oil.
But we have issues going forward for sure. We don't have a lot of cash ($20 mil or so) and we only burn it right now. The company has indicated - quite vaguely I will add - that a move to the AIM is being considered, with some kind of IPO apparently planned too. But it takes a ton of reading between the lines to sort it out. Communication is not te long suit of ERHE management (perhaps the understatement of the year).
I think there are basically 2 likely scenarios here:
The buyout - It can happen any time from here to forever, and could include anything from a block in the JDZ to everything we have rights for, but there simply isn't a way for us to value our assets, since they are all really intangible at this point. So it would seem more unlikely to get companies to agree upon a full sale of ERHE without really being able to value it. That doesn't mean it wouldn't or couldn't happen, just that I view it as unlikely at this time.
Long term commitment - Oil and gas takes a long time to bring to production. Define a long time, and then calculate in African time and we have a really really unknown timeline, with 2012 being the first possible scenario. This seems the more logical and likely path at this time, but also figures to be painful, with our shareprice likely to stay in the under $1.50 range until production is upon us, going up and down in swings that will be fun to trade but frustrating for the long holders. Now that view differs with most others who think that once it is said we have X amount of oil/gas that the stock will magically move to value 100% of that oil/gas into our price, but I am not that naive and think the market will wait for it (oil/gas) to be imminent before valueing it more completely.
So, to answer your question.....
If you can wait out an investment, this one should be very good for where you have entered. Downside risks are almost all gone, with the major downsides left being not enough oil/gas found to warrant production, or us running out of cash and forced to do things detrimental to the company. The first one I can't say anything to, but the second I don't think will happen because the single greatest shareholder has huge ties to Nigeria, and I think he can find ways to protect his money. And I believe the talk of a new exchange will do just that, as well as deals created from the rights in the EEZ where we will gather cash just like we did in the JDZ. You seem to understand patience (BNVI and GNVC), and any long term intended purchases of this stock better include a lot of patience (and the ability to live with a very quiet management style - the more they talk, the more trouble they create for themselves). Swing it when you can - create a base holding of shares and work an amount outside the base with the swings. Take advantage of the day-to-day price changes. That is what most do I am sure, even though they won't admit to it because of the constant hatred spewed toward traders on the board.
Or, hold your shares and exit with a profit. I suspect you will be able to hit your $.60s price 2-3 months out, so just sit tight and wait for that time. We have an interesting spring season setting up here. I really don't see a zero price as a realistic possibility here. I just don't. That fear is gone. We will gain in value, just can't be sure when.
AI
