Replies to post #175911 on ERHC Energy Inc (ERHE)

[stonemountain]

Considering inflation, one might find a better value in black gold in my opinion. We do not know when oil will be pumped and sold. The name of the game now is find oil and its value. Good Luck to all!

[petemantx]

Your confusion seems to be based on your thinking that deepwater development is like land-based drilling and that you can start pumping after drilling a single well to a nearby pipeline.

First off, it will take a lot more than these first wells to determine if the zone is commercially viable and to establish proven reserves. This includes analyzing the first wave of well results and planning where to drill follow-up wells. That takes time. Once the area is determined to be commercially viable and drills the targets, how do they get the oil to market? In discussions of the JDZ, it appears a FSOP will be brought on site to connect all the wells, bring their oil to a common location, and be able to offload the oil to tankers that will connect to it. This takes time.

I think 2012 actually sounds pretty ambitious. For comparison, see how long it took to bring other major finds in the GOG such as APKO to production.

I am not an oil expert and others will respond with much more detailed and accurate timelines, but the basic idea I am trying to convey is that this is a MASSIVE project that will run into the MANY billions of dollars to bring on-line so it won't be done helter-skelter. If you are looking for production, be prepared to wait. You don't build dams, bridges, or any other major engineering project overnight. I am looking at another major mining project (open pit mine) and that has been in the works for a couple of years and it is going to take until 2016 to get into production. No short cuts with these operations.

Hope this helps.

[tryoty]

Tennessee, the oil, if discovered as expected, is in water over a mile deep. Drilling for it and determining how much is there is only half the battle. The development projects to bring it to the surface will be multi-billion dollar projects. That takes time and planning.

A lot of people think that just because ERHE is listed on the OTCBB it is taboo. Don't read me as a pumper, there's no hype here, take a few weeks to read about the decade that brought us to this point. There will be plenty of upside should you decide to buy later.

To answer your question as I understand it... as Sinopec/Addax/etc drill, proven oil will be determined. In water this deep, proven oil, not yet developed, is valued at about $7 per barrel. ERHC's market cap will be determined by the success of drilling.

We don't know what the JDZ offers. We *do* know that companies have paid hundreds of millions of dollars and fought for nearly a decade for the right to look. WesternGeco estimated the JDZ holds 14.4 billion barrels of oil. If true, ERHC is positioned well by owning a significant chunk of that, hopefully as much as a billion barrels. This doesn't even touch on their other potentially more significant rights in the area.

My personal target for this stock has been $7-$14 based on results, that target goes back years. Do *not* read me like the daytraders do and assume I'm saying we will be $14 overnight. This is not a flip trade to get the prize, it is an investment. Your research will show that one man alone controls over 50% of the shares. His plans aren't clear, but they appear ambitious. However, he could decide to sell the company on a whim and if you're "out" for a trade, your out for the prize.

This isn't for the faint of heart. Don't commit money to this based on message board hype. Google "JDZ ERHC" and start to learn whether this is something you could be comfortable with.

[midtieroil]

ERHE will be valued based on their reserves long before a single drop of oil is produced or sold. This is pretty typical of all offshore oil and gas companies especially small ones with very little existing production like ERHE. I think you would be wise to do a little more research on time frames and valuations in the deepwater offshore oil industry before becoming an investor. Production time frames on this type of drilling is measured in years and there are some pretty standard valuations which can be used to value companies based on reserves alone. Hope this helps.