midtieroil,
"All I am saying is that on an economic basis that the net reserves available to the partners is 7 billion because 50% is going to taxes. The partners will get revenues equivalent to 7 billion bbls of oil and that 7 billion bbls will not be encumbered by any more taxes."
The total reserves booked in your example would be 14B barrels. As the oil flows and is sold, 50% is paid as tax to the landowner leasing the blocks. It is an operating cost to the company and does not affect reserves. Again, you are arguing with data that affect net profit, not bookable reserves.
ERHC will be valued on its reserves long before any oil flows, and that recent $24 per barrel valuation is a bigger number than anything I've seen before. I suspect ultra deepwater reserves will be less than that, but even at $10 a barrel it puts ERHE in the $15 range if blocks 2, 3, and 4 contain 5B barrels as expected.
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