Replies to post #247687 on ERHC Energy Inc (ERHE)

[Krombacher]

First, henceforth I will refer to IMO as IMO/N, which stands for "IMO, Nigeria" so it does not get confused with IMO, which stands for "in my opinion". In a prior post of mine some folks seemed to have that confusion.

That said, it really really depends if IMO/N holds to its "promise" (umbra, I'm referring to the American version of the word promise to mean potential and NOT the English version, referring to some obligation).

What is that potential, in terms of what shareholders really really want?

Well, I can't speak for everyone, but this is what *I* want IMO/N to be:

1) A source of revenues in the very short term to cover ERHC's costs plus a little more, allowing the company to hang in there indefinitely until the JDZ/EEZ and even Chad bear fruit (oil) for the company.

AND

2) This point is probably more important and that is: I want the IMO/N acquisition's present value of all its cash flows to be worth more than what ERHC might pay for it.

Point 2 above might be a tall order, after all, who would sell something for less than all the present value of cash flows?

Well, I am hoping that such a deal could be achieved in the same way that SEO achieved the JDZ and EEZ deals...through ERHC's/SEO's special network of deal producing connections in Africa. In other words, what gives ERHC an edge is what allows them to get good deals.

If point 2 is *not* achieved, however, then I totally fail to see the point. Why buy IMO/N, if you could just hold onto the money in the bank and that money is worth more than all the cash flows produced by IMO/N?

But there is one positive of having IMO/N even if point 2 is not achieved, and that is, ERHC cannot have free access to the entire lump sum of cash used to acquire IMO/N. In effect, IMO/N forces them to only spend what is produced from IMO/N per year as opposed to spending the lump sum now; make sense?

In effect, if IMO/N turns out to be a revenue producer now, then it could discipline management on spending in a way that could be viewed by the market as a positive.

But that's a lot of "if's"...

Krombacher - the above may be wrong.