Cheers for the update phil. As per usual lacking in total information. Every other company would tell you current flow rates on klick. Erh gives you april oil sales figures, and profit for that month. Its like nearly july? How this information would be useful to shareholders is beyond me? Is the well not pumping now? Is it shut in, under workover? Are the flow rates that bad? Have the flow rates dropped now? Why cant current flow rates be given? The share price is at the level it is for a reason. Mainly being this bad reporting. Time for a new ceo i recon.
Anyways lets get back to the information phil has given.
$100,000 sales for the month, at about $90 per barrel, means the klick well produces for erh about 37 Bod of oil net to erh. Or lets say about $1.2m of sales
$75000 is the profit each month, meaning $900,000, profit for the yr
Overheads for last yr where $1.440 million.
ERH are stuffed when it comes to getting a bank loan, no bank is going to lend money to a company that lose $600k a yr. So the only option is to get the money from shareholdersm or the fortrend facility.
How on earth is erh going to fund the next two wells? Let alone pay for admin. Interesting to note that the admin for the current quarter is only 70k, however the rest of the 9 months it is $1.082m. Erh always start the yr of paying about 500k in the first quarter in admin costs. So erh may run out of cash at the end of the first or second quarter next financial yr? Only have $500k in the bank? Erh is one director down, so they should save a few hundred grand a yr?
What we can gather is a capital raising needs to take place asap, one there no cash left, and the money will run out in 6 to 9 months, two make it progress till its cash flow netural by drilling the next two wells.
Erh have to continue to drill wells in amercia, this is the only way forward. The brazilian acerage have been a disaster, and retention and no drilling, is what needs to take place. No more money should be spent in brazil until its on erh terms
Anyways lets get back to the information phil has given.
$100,000 sales for the month, at about $90 per barrel, means the klick well produces for erh about 37 Bod of oil net to erh. Or lets say about $1.2m of sales
$75000 is the profit each month, meaning $900,000, profit for the yr
Overheads for last yr where $1.440 million.
ERH are stuffed when it comes to getting a bank loan, no bank is going to lend money to a company that lose $600k a yr. So the only option is to get the money from shareholdersm or the fortrend facility.
How on earth is erh going to fund the next two wells? Let alone pay for admin. Interesting to note that the admin for the current quarter is only 70k, however the rest of the 9 months it is $1.082m. Erh always start the yr of paying about 500k in the first quarter in admin costs. So erh may run out of cash at the end of the first or second quarter next financial yr? Only have $500k in the bank? Erh is one director down, so they should save a few hundred grand a yr?
What we can gather is a capital raising needs to take place asap, one there no cash left, and the money will run out in 6 to 9 months, two make it progress till its cash flow netural by drilling the next two wells.
Erh have to continue to drill wells in amercia, this is the only way forward. The brazilian acerage have been a disaster, and retention and no drilling, is what needs to take place. No more money should be spent in brazil until its on erh terms