I'm not sure I follow this. First, what is "commercial" oil (or gas)? Is that 75 MMBO?, 100?, 250? Has anyone suggested what development cost might be at the locations that were drilled? Commercial, by western business standards, usually means an expected return of >15% (life of project) after expenses (development cost, royalty, taxes....). And the resource potential of these blocks remains a mystery. Is it 50 MMBO?, 500 MMBO, 5 BBO? ERHE's net share will be it carried interest proportion. My point is, I think its impossible to value this company with the information at hand, the current price means almost nothing. At least we know produceable hydrocarbons do exist. That lessens the risk of investment from months ago. The fact that its not a "screaming success" after drilling first wells, isn't necessarily negative. I think we will have to wait on more information to determine that. While more work is being done, the value of the underlying asset won't change much (the price of oil/gas). All that will change is investors perception of where they can get a better return on investment between now and the next news announcement.
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