Replies to post #315498 on ERHC Energy Inc (ERHE)

[midtieroil]

First of all it would take at least 3 or 4 wells to drain this one reservoir. They need multiple reservoirs. Then you would have the lifting costs, the operating costs, the overhead, the interest on any debt incurred, the transportation costs, the marketing costs the overhead, etc. I think I read that Tullow needed $39 per bbl in Kenya to be commercial and those costs are spread over discoveries of over a billion bbls. They didn't declare commerciality for years until after multiple wells with multiple discoveries in multiple prospects were completed. Like it or not one well or one prospect of 70 million bbls in Kenya is not commercial.

[midtieroil]

You also need to look at the revenue split between Kenya and the oil companies which is found in the PSC. In addition to what Kenya would get for their eventual 20% working interest they also receive a substantial amount in Tax oil which changes based on production levels. I'll look up the percentages and let you know how much that is.