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Thursday, 11/17/2005 6:47:07 PM

Thursday, November 17, 2005 6:47:07 PM

Post# of 353430
Mongo1071, careful with your math posts! I already called you out once on your math skills.

I do want everyone to carefully take the good nuggets of information that you occasionally bring up though. In this post, you provided facts that another oil company (Shell) has drilled in the deep water off the coast of Nigeria and struck oil which now estimates 600 million barrels of oil reserves. The cost to "full field develop" will be $2.7 billion. Realize that this cost is over time while pumping and is not required up front.

The important nuggets that Mongo should be pointing out are this:

1) After awards were made in 1993, the 3D seismic had to be done (3D is already done for JDZ blocks currently being awarded).

2) Discovery well was drilled between 9/95 and 1/96. Let's do the math on that one, eh? 4 months to drill and discover oil to get proven reserve numbers which will then give REAL valuation to ERHE. I like the sounds of that one.

3) Now the costs: It will take $2.7 billion dollars to FULLY develop the 600 million barrels of oil. (2,700/600=4.5). So you have provided facts to this board that in similar waters (off the coast of Nigeria, in deep water territory), it will cost $4.50 per barrel. How much is a barrel of oil going for these days? Let's say the price range drops from $60 - $70 down in half to $30 - $35 per barrel (I doubt you will find many economists to predict oil this low again but lets go with almost worse case scenario). Hmmmmm, still around $25+ PROFIT per barrel to start dividing up amongst the many.

If you really want to put your math skills to a test, you should be then getting an approximate cost for developing what could be 1 to 3 BILLION barrels from block 4 alone. I doubt it is straight line cost ratio.......(maybe $3 billion to get 3 billion barrels...who knows?)

So, if Shell thinks it is well worth the $2.7 Billion in costs to get at 600 million barrels (they haven't called the project off yet have they?), you don't think ERHE could find the financing (including partners) to go after 3 Billion barrels of oil for similar costs?

Mongo, with your proven financial analysis skills, you probably shouldn't be investing on your own in the stock market, in my humble opinion that is.

Please keep bringing up valid facts for us to use and keep the company legal beagles on point but try to stay away from embarrassing your self by analyzing those same facts.

Just a little balancing of the facts in the playing field of OTC stock message boards,

GLTA

Strategyone



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