Replies to post #33461 on ERHC Energy Inc (ERHE)

[nwtf]

kerrylass
There will x number of dollars spent to develope the oil field. The X number of dollars will have to be paid back with the production of oil BEFORE ERHE receives any revenue. PL

[umbra]

Once Addax has recovered all their costs associated with the successful recovery of oil and begins to turn a profit, so then will ERHC. That explains the statement you mentioned.

Understand that is has nothing to do with signature monies being paid to ERHC.

Most important, it has nothing to do with "apparent" values assigned to ERHC once reserves in each block have been established, confirmed and made public. The determination of these reserves should not be construed as relating to the "exploration period" as noted in the 8-K.

Be happy.

[developer]

Production Sharing Contracts permit the Contractor to recover costs through a Cost Oil allocation. This means that a certain percentage of the production is allocated to the recovery of all permitted costs. This percentage can vary from 40 - 100%. Another part of the production is allocated to Profit Oil. This percentage is paid to all parties regardless as to whether all costs have been recovered. Usually the Government has the largest percentage. Profit Oil allows the Government and "carried" parties to receive part of productio regardless of whether all costs have been recovered. As costs decline Profit Oil increases. ERHC will receive a share of Profit Oil from the first day of production.

[TheDane]

kerry...nobody knows what this means, but it keeps accountants and lawyers working.