Hi mateWe spoke yesterday about the current SP being fair value...

Hi mate

We spoke yesterday about the current SP being fair value at the moment and a buy in at this price would seem to be the bottom using a PE ratio. Here is how i came to this.

Fully paid ordinary shares (ERH) 123,650,219
Partly paid shares 109,914,313
Options (ERHO) 35,124,152
35,124,152
Director’s Options 16,000,000
Performance Rights 18,250,000
Options exercisable at $0.20 by 29 August 2010 9,000,000
Options exercisable at $0.20 by 28 November 2010 2
Fully diluted 347,062,838
Current Fully diluted market cap = $154,442,962.91

P/E Ratio
Oil $ per barrel= $35.00
"
Sergipe-Alagoas barrels per day=" $70,000.00
40%= $28,000.00
For the year= $10,220,000.00
Average P/E Ratio for the sector 20.08
Current SP .59= a P/E of 15.11
To meet sector average 20.08= a SP of $0.59


I have used Tas's figures and only given $35 dollars per barrel which at the current SP gives a PE of 15.11.

Also i know your a bit of a TA and the charts are starting to come together nicely. The MACD has moved for the first time under the divergence since the stock had its first bull run and the RSI is sitting around 50 still a little high but should still run well of any good news.