Snow....I was long before the rumors on the block 1 came about so whether or not the rumor is true makes no difference in my investing. The mere fact that CVX met with CEO Grandhuber last week gives some credance to the rumor IMHO....not that I have any doubts anyway. I do enjoy the added indication delivered by Barry Morgan that could signify rumors are accurate. Here, Barry reports that a DST was conducted:
"...they added that electrical logs being run to evaluate the open hole were looking positive."
.....in this line he indicates CVX was to reach "Target Depth" (TD) which is an indication of completion of drilling:
"As Transocean drillship Deepwater Discovery prepared this week to punch wildcat Obo-1 down to TD in JDZ block-1, reports began trickling out of a far bigger-than-expected target in the upper horizons."
....in these lines he mentions CVX's success:
"Strong indications emerged that US supermajor Chevron encountered a substantial oil-bearing structure during its current probe in the Joint Development Zone ..."
"...reports began trickling out of a far bigger-than-expected target in the upper horizons."
......and this is proof in the pudding IMHO:
"Senior executives from Chevron and ERHC met Thursday night in Nigeria, primarily to deliberate on the way forward."
.....Barrys line below shows how strong ERHC's MOU with SNP is:
"Sinopec only has a memorandum of understanding with partner ERHC..."
This stock, IMHO, was severly undervalued BEFORE any of the success in B-1 drilling emerged. Throw in the possibility of 650 million OR MORE barrels of oil from this development and its grossly undervalued. [rumor has it that over 50% of a 2 billion barrel oil field has been located in block 2. ERHC currently has 65% interest or a minimum of 650 million barrels.]
If we've gotton rumor of this.....so will the big money IMHO.....and they will recognize this as being HUGE. The only glitch is the PSC's being signed.....could come as early as next week.
If...if...rumors hold out (and I believe they will) and this is a field estimated to be 2 billion barrels in size.....this will be heard at the far corners of the planet IMHO. Not only because giant discoveries are no longer commonplace, but rather the stories that will about Sao Tomeans becoming wealthy in the coming years. Much emphasis will come about the success story of the JDZ.....two countries coming together for success instead of going to war over the properties. Obasanjo AND Menezes will be in the limelight. All this recognition will bring further market recognition to the zone....and ultimately.....our little minnow.
Again, we could ALREADY have as much oil in reserves as PXD yet our market cap is 10 times less than PXD. More importantly, this find only scratches the surface of our interests in this zone and STP's EEZ....not to mention this oil is more valuable that PXD's coffors as it can be produced considerably cheaper than PXD's oil is produced....not to mention the operator getting back 50% of all qualifying capital costs with first oil that will be dished out 80% to the operator and 20% to the countries for the first 5 years of production or until costs are reimbursed.
Oops....just wanted to mention that I fully agree with your synopsis that ERHC is undervalued at current levels.
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