Replies to post #10349 on JDZ Nigeria-Sao Tome e Principe

[idcc2006]

That's a serious development from series of dusters rumors to billion barrels of oil rumors.

[Millenium323]

I think that is much too optimistic. First of all you are assuming that Blocks 2,3 and 4 will contain 8 billion barrels of oil equivalent. You do realize that ERHE does not own 100% of blocks 2, 3, and 4. Its more like 20%. So even in the unlikely event 8 billion barrels of oil equivalent were found in blocks 2, 3, and 4 combined, ERHE only gets roughly 20% of that number. 20% of 8 billion barrels of oil equivalent = 1.6 billion barrels of oil equivalent. So ERHE would have 1.6 billion barrels of oil equivalent.

Proven reserves are valued around $6 per barrel. $6 per barrel x 1.6 billion = a $9.6 billion market cap.With 720 million shares outstanding that would put the price around $8 per share.

And that is assuming 8 billion barrels of oil equivalent will be found in blocks 2,3 and 4. I find that to be highly unlikely. The intitial reports make it seem as if 5tcf of nat gas would be optimistic for the 5 wells drilled thus far and 5tcf of nat gas only equates to 1 billion barrels of oil equivalent. Then mutltiply that by ERHE's 20% and it leaves ERHE with only 200 million barrels of oil equivalent based on the initial 5 wells which is obviously a far cry from your 8 billion barrels.

I realize they have more targets to drill but I dont see them hitting 8 billion BOE in 2,3, and 4 and even if they did ERHE only gets roughly 20% of that as they dont own a 100% percentage of each block. So in sum, this company will never be sold for anything approaching $20 imo unless of course they retain 80% to 90% of their EEZ blocks and hit some monster oil wells but drilling in the EEZ is quite a ways off but I dont expect them to retain 80% to 90%.

[ts3221]

I am a 6 year stock holder and I would have to call you a pumper with that estimate. Do you really think that this stock could be sold for more than twice the selling price of Addax Petroleum? I need your dealer's number! That is some quality sh?t your smokin!LOL

Most people are thinking 3-4 dollars per share if we sell before production. I would love to see 10 dollars, but I think that is way too optimistic.

[sneak-attack]

Bay: I say SEO gets his north of $10.00 a share for this Scenario.
With a full carry, SEO will wait for Production to begin. In five years oil will be selling for about $100.00 a barrel. $100.00 less $10.00 a barrel for production cost = $90.00 less JDZ tax of 50% = $45.00 a barrel of gross profit oil. Lets assume that the NSAI numbers are 336 mbls for ERHE. 336/20 year life cycle or 16.8 mbls a year for ERHE. 16.8 x $45.00 = $756 million in gross earnings less $680 million for 90% for development cost payback. That leave $76 million less operating expenses of 8 million, that leaves $68 million x corp. tax rate of 35%, which leave $44.2 million net profit. 44.2million / 730 million shares = .06 a share dividend yield @ 4% should have stock price of $1.50 a share. It will take about 4 years to payback the development cost. Once this is achieved ERHE will have about $486 million net profit / 730 million shares = a .66 dividend yield @ 4% should have a stock price of $16.50 a share. This number is 10 years down the road. If the NSAI numbers for block 2,3 &4 are 365 million your $27.75 a share is possible with $100.00 a barrels oil in ten years if not sooner for a much larger Hydrocarbon Find.

Just Food For Thought.
Sneak