well Spec read it below and make sure my cold medz haven't decieved me,,,
Today (3/3) SWAG Share Price.
Assume ERHC gets a “2/1” in each block for full carry to first oil. (2/1=ERHC gets half the partner’s interest.)
ERHC ends up with around 21 2/3% of Block 2, 6 2/3% of Block 3, 17 2/3% of block 4 and 5% of blocks 5/6. Plus cash in blocks 2 and 4.
(Block 4 looks like ERHC gets $16 million (US) + full carry to first oil. Assume $25 million for block 2.) Assume a cost to first oil of $500 million.
Value of carry is in each block is: ERHC % interest x $500 million.
The Chinese just paid $4.60 bbl in the nearby Akpo field for proven plus probable reserves. Rumor is that Chevron's Block 1 find is an "elephant" with more than 1B bbls+ in ERHC controlled Block 2 so value block 2 similar to Akpo. The remainder of ERHC's blocks are unproven so value at $2 per bbl.
Scenario 1: 1B bbls in each of blocks 2, 3 and 4 with 0.5B bbls in each of blocks 5 and 6.
Share price = $2.64 = $1.59 for block 2 + $0.23 for block 3 + $0.64 for block 4 + $.09 for block 5 and block 6.
Scenario 2: 3B bbls in each of blocks 2 and 4, 1B bbls in block 3 with 0.5B bbls in each of blocks 5 and 6.
Share price = $6.44 = $4.39 for block 2 + $0.23 for block 3 + $1.64 for block 4 + $.09 for block 5 and block 6.
If all oil in Scenario is proven and valued at $10 bbl then the share price is $18.65.
IMHO, the current share price reflects scenario 1 but the price is discounted until PSC’s are signed. Once PSC’s are signed for blocks 2 and 4 then the price may quickly rise over $5.
Yesterday (3/2) SWAG Near Term Fair Share Price: $6+ per share.
The Chinese just paid $4.60 bbl in the nearby Akpo field for proven plus probable reserves. Rumor is that Chevron's Block 1 find is an "elephant" with more than 1B bbls+ in ERHC contolled Block 2. 65% of 1B is .65B bbls x $4.60 = $4.21 per share. A deal similar to Addax would leave ERHC with 32% and partner 33% of block 2. That suggests a partner, like Sinopec or Chevron, should be willing to pay around $2.10 per share in cash n carry for half of the 65% stake in block 2.
The remainder of ERHC's blocks are unproven. Assuming an additional 1B bbls each in blocks 2, 3 and 4, and, 250 mil bbls each in blocks 5 and 6 then ERHC has another 3.5B bbls in unproven which will be valued at less than $4.60 per bbl. Using $2 per bbl for ERHC's unproven interests in the JDZ and you get another $2.43 in share price. So a current share price for ERHC would be $4.21 + $2.43 = $6.64. If all the unproven became probable and valued at $4.60 then the share price would be over $10. If all reserves are proven, valued at $9 per bbl, then the share price would be around $20. If you add in STPEEZ reserves, (assuming 2B bbls to ERHC), plus natural gas then it's possible that several years down the road ERHC could have a share price over $40.
99% of the worst catastrophes in my life never happened
