Replies to post #137740 on ERHC Energy Inc (ERHE)

[tryoty]

Wrong. ERHC's cost of operations will pay the taxes, etc. ERHC's reserves will be the oil discovered times their percentage interest. We've been over this repeatedly.

The oil will be produced and *all* of it sold to market. The rest of it is all bean-counters putting numbers in certain columns for the various companies that have interests in the producing block.

Taxes, royalties, costs, and any other hands in the cookie jar will be accounted for as operational costs in the financials, just like EVERY OTHER OIL COMPANY.

Those items have never had, don't, and never will have any effect on the bookable reserves. If you want to subtract all those items from ERHC's percentage of discovered reserves what is left is pure, raw, bottom line profit.

I can't make it any clearer.

[YankeMike]

Nice post midtieroil. So what do you think is a fair value to use for proven reserves with a 50% tax rate? $10 per barrel with oil at current levels?

Mike

[bayfisherii]

Mid,

You must have scrambled and plagiarized all night to come up with this analysis. I personally do not think you have ever shown yourself to have enough understanding of the mechanics and economics of oil to come up with this on your own.

As to your 1st point, in very few instances between royalties, land usage fees and taxes do you ever see a number much under 50% on the production economics. And even so the taxes are based after costs and will include all variable as well as fixed costs associated (and this is important so write it down) with drilling as well as on-going production costs. Where you came up with a 20% tax figure I cannot fathom unless you are in an area so uneconomic that incentives are being given to induce companies to explore there.

As to your second point, the 14 billion figure was never validated as an actual volume available. It was appropriately labeled as the total amount of risked and unrisked reserved that could be in the JDZ that had currently been licensed. Who knows what we will find ‘maybe more’ but ‘probably less’. The point that I was making is that if the $25 per proven reserve figure was accurate then all of a sudden our economics get enormous quick. ( I am still looking and hoping that we can validate the $25 number)

As a suggestion MID, stay off topics that you do not have even a modicum of knowledge or understanding of.