Wow, group think and paranoia are running rampant today.
Although I don’t like seeing my current valuation this low, I also get a laugh out of this situation. The bashers/doubters/traders seem to have taken over the board as there is not much else to talk about so the price is in its downward trend.
For those that are worried, take a step back and think about the bigger picture.
1st Sinopec got the 6 month extension simply to buy time and because they can. It was smart for them to do. There is no point in analyzing stuff if there was nothing there to analyze. I am guessing, the more time Sinopec manages to stay quiet, the more time they will have to either negotiate for rigs, negotiate for more of the current JDZ pie, and/or negotiate deals close by like the EEZ.
2nd All this talk about the AIM is a dead issue if they found nothing in the JDZ. Someone made this statement the other day but I don’t think many caught on the full meaning. ERHE has stated they want to move to the AIM for a more fair share price valuation and to raise capital. The only way to raise capital is to sell NEW shares to new investors. They will have to have a NEW story to tell (real JDZ data results of commercial oil) to get a reasonable price and volume on enough shares to make a difference.
3rd September 14th is the worse case scenario for the wait, in reality, Sinopec can announce phase II whenever they are ready which may just be a delay tactic to negotiate for the next Rig. In the mean time, news from ERHE about a partner for their two 100% EEZ blocks could happen anytime and will likely be a complete surprise. This alone will catch many traders/flippers while out or waiting for that lowest price.
4th Ironically, the disaster happening off the Louisiana coast will actually increase the value of ERHE’s assets in the GOG. Why? Because the demand for oil is not going anywhere but up. The new regulations that the US will put in place to prevent a like type of disaster will increase the cost of drilling in the Gulf of Mexico. I seriously doubt STP or Nigeria will change any of their regulations or procedures for the oil companies drilling in their waters.
5th Really think about the PR’d news of Total in talks to purchase the Block 1 rights. There is nothing to talk about (and PR about) if it held no value to Total (hint… commercial in the right situation). Chevron stated it doubled the value of their asset.
All in all, too many real items are pointing towards a commercial discovery. The only problem for ERHE investors is time. Unfortunately, we are enduring another “quiet period” where the traders are playing on the emotions of the fence sitters all to flip for free shares.
The good news is that the quiet period will end and hopefully sooner than 9/14.
Good luck all.
