ERHC Energy Inc (ERHE)

[bayfisherii]

Ryg,

You are way off center. CNOOC just cut a deal in South America (3/15/2010) where they bought proven reserves for $10/Bbl and were very pleased that they did not have to pay $20/Bbl. Go Google CNOOC and South America and you will quickly find many articles confirming this.

At $3.50/share the total JDZ zones that ERHC has an interest in would have to contain less than 1.5 billion barrels of oil and oil equivalents and zones 4 & 11 of the EEZ would have to contain zero economically recoverable oil and oil equivalents.

Frankly if all they found and could prove up was 1.5 Billion barrels they probably would forego the risk.

That is why I do not understand when posters here post numbers like $2.50 or even $3.50/share for a buy-out number.

Essentially for the consortium to take the risk and drill, develop and produce these zones they would have to have determined that there are at least 3 to 4 billion recoverable barrels of oil and oil equivalents. If they find less than 2 billion they may just wait.

Let's say the number is 4 billion barrels recoverable in zones 2, 3& 4 then that alone would lead to a share price above $9/share.


What really makes this interesting is the $10/Bbl that CNOOC paid for recoverable reserves in South America last week does not include a full carry, Our does.

That is why (as I see it) we either have a share price above $9/share on a buy-out or we have none at all. Anything less means the field just does not contain enough hydrocarbons to make it economical.

Bayfisher