Well... responding to your first paragraph... here's how a hypothetical conversation might go:
Erhc: we want $10 a share and no less.
Total: Look we don't know if there's oil down there for sure. There's a lot of risk. How about we offer you $.30 ?
Erhc: $.30 is great and I'm glad that's your current offer, but if we can derisk the EEZ and show more oil potential then we want $10. So instead of making this deal at $.30, is there anything we can do to further derisk and get $10?
Total: well yeah, I guess you can wait for Shell to drill, but then that's double jeopardy. If they don't find oil, our offer drops from 30 cents to only 1 cent but if they find oil then you get $10.
Erhc: I like that bet! So we'll wait.
The above figures of 30 cents and 10 dollar are for illustrative purposes only. No one knows the real numbers, if any.
Krombacher
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