the dirty little secret

Hey all

We slightly touched on this is the last thread and think its differently worth covering in detail as its own thread.

The dirty little secret is one we all own to well but for some reason complicate it with NVP's, DCF's and IRR and alike or in some cases pure arrogance.

No doubt you have all guessed that the dirty little secret is "cash flow". This is the driver that ensure the success or the failure of a company. Simple ain't it.

I feel a little blessed that the ERH investors are openly willing to discuss in detail the in,s and out,s of the stock and the good with the bad. Made the mistake of asking about cash flows on another stock and one guy got suspended and another gave one of the most out there replies i have ever received.


Anyways back to ERH

You need to ask yourself a couple of questions
1. Can ERH produce a sustainable positive cash flow??
2. If yes, how long will it take to archive a positive result??

This rule applies to all companies and it really is this simple. Sure there gapes and blanks to fill in along the way but don't over complicate it.

Ok back to ERH
Its a huge blow having 430 up in the air and as i indicated in my last post ERH needs to be reevaluated. Not only does this half the assets but it doubles the risk

i.e
In the past we could be comfortable in the fact that if anything happen to one block we had the other to shaw up our investment. By no means have we lost 430 but if we do this will be a huge blow to us and the company.

We seem to be somewhere near the bottom IMO, so we need to ask another question has the market already factored in losing 430 and if we dont lose it and minimum obligations are met will we see a rise in the share price?? or if we do lose it will the share price drop further?? Not sure, for my money the only way management can pull us out of the doldrums in the short term is by cash flow i.e flowing oil.

This would mean resolving all the issues with UBX and them getting it right. Tall order but not out of the question. History is not our friend but its the future for us who remain to look towards i guess. I know this investment has left a knot in my stomach but i also know we are darn close and wont take much for ERH to become the investment we dreamed about a couple of years ago.

So i remain a true believer and positive on this stock


Cheers