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TOB

11/01/12 3:50 PM

#266775 RE: Krombacher #266770

No I wasn't addressing you with the "secret/hidden news" comment.

I've seen a lot of this with ERHE and other stocks with huge potential. It's generally false and very misleading and often gets people in at share price bubbles on hyper-enthusiasm that is not realistic. Or it makes people so fearful so they don't buy when ERHE is in an excellent buy zone.

Also, people get disappointed with the real facts when they've bought into some secret agenda, or been led to believe that there is "great news" about to be revealed and being hidden. So the real good news is taken as bad because it doesn't live up to the unrealistic hype. (Buy the rumour and sell the news.)

Notice that I encourage people to consider CEO Peter Ntephe's value proposition, which is just like Warren Buffet's Maxim. Buy low, ahead of all the hype and enthusiasm when others are fearful, then take profits when you are at an excellent point, when others have given in to greed and think drilling success is guaranteed.

Historically this means buying ERHE in the 10 to 20 cent range and selling in the 80 - 90 cent range with profits of 400% to 900%.

This means doing some early Due Diligence, buying an exploration company like ERHE early in the exploration stage at a low share price, well ahead of the "news" and the pre-drill stage when all the seismic and gravity/magnetic studies and possible JVs are in.

We would need to get the ratio (if not 1:1) to do the math, and we don't yet know all the specifics...once we know, we can do the math.



Exactly my point. Thanks.

TOB

11/01/12 4:24 PM

#266778 RE: Krombacher #266770

Yes, exactly!

But it is far better for ERHC to have the two years work with payable with cash on hand to get the best deal.



It can be enough just for ERHC to have the money on hand and have started the two year work program. This shows a JV farm-in that ERHC is able to go it alone and confident that the studies will show good targets.

If at that point the JV farm-in offers terms as good as would occur later, then sure ERHC accepts them at this point. It's like an auction, until someone bids $1,000 nobody will bid up to $2,000. And often people want an appraisal of value before bidding. For oil blocks this would be Gravity/Magnetic and Seismic studies, third party reserve estimates, and discoveries in adjacent and similar geology.

So it is possible a Farm-in could come at almost any point from now to two years. Or even after drilling once a discovery is made. The money raised can then go to other blocks, expenses, and new acquisitions.

But the worst deal comes if ERHC appears desperate to the JV because they simply can't do it alone with no money. That is negotiating from weakness. Do ERHE shareholders really want a bad JV deal just because they are desperate for a nickle or dime more in the share price now? Or unwilling to help with financing by buying some discounted shares that may prove very profitable?

But note that the great Farm-in terms for the JDZ didn't come until after Seismic studies had shown good targets. We see the same thing with HDY now, they look on the verge of a fantastic farm-in with Tullow, this is coming after initial Seismic and drilling work. Not right away at the asset acquisition stage like ERHE is now in Chad and Kenya.

So the best deal often comes later. Not that this rules out a great deal coming quickly as Kenya is quite hot for exploration, and Chad is also moving along.

TOB

11/01/12 4:46 PM

#266780 RE: Krombacher #266770

Good News for ERHE possible in coming months

No major news (probably) for 2 years.



Very doubtful of a 2 year wait, depending on the definition of major news.

There are many potential news events that could occur at any time over the next 2 years. Some possible in the coming months.

Each has a potential to move the ERHE share price as would just new investors learning about ERHE based upon the existing improved prospects and good news.

Here is a partial list.

1. New exploration blocks. For example; Niger or Guinea, among others.

2. Signing the EEZ PSCs and setting out the work program.

3. Signing a JV in the EEZ, Kenya, Chad, or one of the possible new blocks.

4. Good results from the initial Gravity/Magnetic and Seismic studies showing good drilling targets.

5. Third party estimates of possible reserves based upon the studies.

6. Other companies reporting seismic results and drilling programs around ERHE blocks in Kenya, Chad, the EEZ, etc.

7. Other companies reporting oil discoveries around ERHE blocks in Kenya, Chad, EEZ, etc. (Twiga South 1, Ngamia-1, Paipai-1 all coming in next couple months with many more wells planned.)

8. ERHC being in a better cash position after the successful Rights Offering fund raise, and able to execute the exploration program in Kenya and Chad, pay ongoing G&A expenses, continue bidding for and possibly acquiring new exploration blocks, continue promoting assets and negotiating with potential Farm-in partners.

9. Advancement of the extension of the Chad-Cameroon pipeline planned along ERHE's two southern blocks which is focus Area I and II of the initial Chad exploration program. Pipelines make even small discoveries commercial, and large discoveries even more profitable.

10. Announcement of a pipeline going through ERHE Kenya Block 11A.

11. ERHC making other successful fund raising progress and strategic alliances.

12. A successful IPO on the AIM or another international exchange based upon the improved circumstances.

13. An attractive buy-out, merger, or strategic alliance based upon the improved circumstances and the growing portfolio of exploration assets.

14. Intentionally left blank ;-)

All are possible at any time, from the coming months to during the next 2 years.