Gas "over there" is worthless. It has to be converted into LNG at a HUGE cost and then shipped to somewhere it can be used before it will generate any revenue. Assuming we could get a gas sales contract to some LNG facility who would then liquefy the gas, I doubt it would be for much more than $4 per MCF or mmbtu. Yes, gas is usually sold on a mmbtu basis but in this case it would be "sold" to an LNG facility under a long-term contract. The value of the condensates would also have to be included and could change the profitability quite a bit. Most gas contracts are written on an mcf basis with an adjustment for the btu content.
Bottom line is I was not trying to do a precise calculation. I was simply putting into numbers the difference between gas and oil. Oil is worth more no matter how you slice and dice it.
On the plus side, the Chinese might like gas just as much since on a BTU content basis, it is cheaper. They aren't just about making a huge profit, they are just as concerned about supplying their own energy needs. That will make a gas discovery more likely to be developed by the Chinese. Unfortunately, as ERHE shareholders our biggest concern is with profitability.
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