coastal caribbean (cco@) Message Board

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

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To: Robert Furman who wrote (538)	9/3/1998 4:06:00 PM
From: Edwin S. Fujinaka	Read Replies (2) of 4686

Bob,...How did you pay $1.75? <G>. I think my average cost basis is around $0.75, but it's been so long since I started investing in CCO that I have to agree that a passbook account might look pretty good in comparison. I agree that the glimmer in the distance might be the light at the end of the tunnel (hopefully not the headlight of an oncoming freight train). I've been throwing around some outrageous big numbers for an ultimate valuation for CCO to try to conjure up some rational basis for valuation. Based on the Michigan Case, my extrapolation to $75/share seems to actually be reasonable if not low. I think the Company has a reasonable shot at getting there, the question is how they do it? If the Appeals Court rules that the State has to grant the drilling permit without a prohibitive bond requirement, I believe that the State will either be forced to grant the permit or face another court case (groan) like the case in Michigan. This will result in the refusal to grant the drilling permit being an "effective taking" or a condemnation and then the argument will come down to dueling appraisers. At this point, the State will be facing massive liabilities and tens of billions of dollars could be the result. Five years ago I would have said that tens of billions of dollars was totally out of the question. After the $11 billion dollar tobacco settlement and last years estimate of the 619 million barrels of recoverable oil, my expectations have escalated. The Governor of Florida and other State officials have made a serious mistake in not settling this case much sooner through negotiations. The longer they wait, the worse it will be for the State. Of course, the potential for the CCO long term investors is better if it drags on, but I'm ready to settle now. The question is for how much?

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