my post over at gumshoe

Posted this over at Gumshoe for th benefit of our American friends.

I suggest the penny oil speculator should stick with pushing Eromanga Hydrocarbons…as you mention in the article, ERH is well off its highs (As are most juniors) but it is entering a very exciting period.

Initial flowtesting results from their 430 project (40% ownership) last week are very promising, and Im expecting a positive flow test announcement on Monday…could be upward of 400bpd (you do the sums).

OK Ill do the sums for you…if 400BPD (and thats the fluid they recovered in initial test based on 5.7 barrels over 20 mnutes), thats around $14M per annum, or $6M for ERH share (using $100 AUD oil price -its actually around $130 right now but im being conservative).

So what? Well thats on a per well basis…430 is looking like around 40 million barrels (again conservative)…so that could justify 15 or so wells. So thats around $90M revenue…!

And then theres 330 (development plan is 2,000BPD and 430B

Fully diluted ERH has a market cap of around $60M…but fully diluted that also means they would have around $50M cash in the bank (due to oppies conversion and conversion of converting shares)!!!

So you are getting the oil production for free at current prices.

Cdchi1