ERHC Energy Inc (ERHE)

[Krombacher]

If Exile is all about the Nigerian Akepo-1 well and if the following is correct:

Akepo reserves

The total proven reserves of the Akepo field are estimated at 81 million barrels. The probable reserves are estimated at 410 million barrels and possible reserves at 1.243 billion barrels.


http://www.offshore-technology.com/projects/akepofieldnigerdelta/

Then we can start making some calculations with 81 million barrel, but WAIT be careful:

Exile's website shows this:

http://www.exileresources.com/press_pdf/2011-04.pdf

So apparently, according to footnote 2 : “Gross Reserves” are Company’s working interest reserves before the deduction of royalties.

So if I'm reading it right, after you deduct royalties, etc., then the proven reserves turns out to be 39 million barrels.

And, I guess, that means Exile has rights to 8% of that 39 million barrels?

It also did some deal with Oando, whereby Exile apparently initially had about 40% interest but farmed it out to Oando and I guess Oando pays for Exile's exploration costs, etc., but then gets the first flow of oil until the costs are paid off, and then pays Exile 8% (or some step down something) after the costs are paid off. Is that about right? It's confusing:

http://www.exileresources.com/press_pdf/2009-01.pdf

Ok, so if I'm reading this right, then Exile's assets in Akepo are about 8% x 39 million barrels or about 3.12 million barrels.

So let's say that oil is worth about $9 a barrel, you're talking in the neighborhood of $28 million dollars in assets.

Exile is currently trading with a market cap of about $13 million.

So if Erhc buys out say 50% of Exile at around $6.5 million but gets half the assets at about $14 million, then that is valued added of about $7.5 million, which amounts to about a penny a share for ERHC.

A penny is better than nothing I suppose, but don't seem like a really big deal to me.

Will Akepo cover both Exile and ERHC costs at least?

Krombacher - the above may be wrong.