Replies to post #23265 on ERHC Energy Inc (ERHE)

[mrogop]

dane:

next to last paragraph...what if it was dry? remember, you gotta drill 'em to find out...doubt they would have returned the $123 mil if not a discovery...after the fact it is assumed that there was no risk and this was a summer day walk in the park...before this drilling saga is over, on all the blocks, odds are you will encounter the risk side of this equation..if we don't, then all involved will be very wealthy and very lucky.

[balance_builder]

TheDane...."BWTFDIK? I'm sure someone will let me know where my logic fails. TIA"

You answered it yourself when you said, "ERHC is truly in the catbird seat, regardless of the value placed on this field of oil."

Its all political IMHO. They (big boys) were only going to get what Nigeria (Emeka Offor) said they could get. They weren't willing, at the time, to give Offor what he wanted for partnership in the blocks. Apparently DVN, NBL and lastly, PXD weren't able to keep up with his demands/terms either. Welcome in Sinopec and Addax who were/are willing. Welcome back in one of the big boys after proving out the 3D. You tell me who erred? What are the terms NOW going to be? Addax got away with a full carry and $18 million.

[snow]

Where your logic fails

"..paying just $123 million for all of block 1?" The point is that even if this was supposed to be a high price it is a ridiculously low price if there is one billion barrels of oil in the block. This price implies either that there was a very low chance of finding commercial oil or that any find would be small. It appears that somehow the oil companies have managed to establish i situation where they have to pay very little go get the right to a block in relation to the potential value of the oil in it. There does not seem to be real competition in this field based on realistic assumptions.