coastal caribbean (cco@) Message Board

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Gold/Mining/Energy : coastal caribbean (cco@)

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To: Henry Volquardsen who wrote (1994)	11/3/2000 7:36:55 PM
From: Edwin S. Fujinaka	Read Replies (1) of 4686

Considering how political the negotiations between CCO and the State of Florida will become, it is not obvious what tactics will work best for the shareholders and the people of Florida in the long run. At some point in every negotiation, CCO will have to state what they want and the State will have to state what they are willing to pay. I believe the gap between the bid and the asked will be enourmous at the beginning. So far the State is apparently saying that they don't owe Coastal Petroleum anything and even if they did, it wouldn't be much. Coastal Petroleum is on record as saying that there is at least 600 million barrels of recoverable oil at just the one St Georges Island site. Based on the Michigan settlement with Miller OIl, we could extrapolate to about $5 billion for St Georges Island alone. I have no idea if this is a credible extrapolation or not. Jack Miller told me that the cases are not directly comparable like that. He also recommended the inverse condemnation tactic which is the course that we are now implimenting if I understand this case correctly. I am guessing that each billion dollars will work out to over $10/share for CCO shareholders. Perhaps $5 billion is too big a number for the St Georges Island site alone, but the rest of the leaseholdings including the other 12 drilling sites that have been identified so far might be worth many times the St Georges site. The Company needs to expend some money to obtain a formal professional estimate of value for the property value lost to the Company through the effective "taking" that will be established through the inverse condemnation process. The question is: Should the Company publicly divulge the estimates of value to the shareholders and the public? Actually, I suppose the question is when? I am adamently opposed to us never finding out what value the experts can come up with and I hope they do not try to keep it a secret forever. I would never accept a blind settlement as a fait acompli unless it is close to my outrageous estimate of $100 billion <G>.

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