Holy Cow! The Panama City NewsHerald's Matt Moore quoted me directly and even repeated my $100 Billion estimated possible valuation! That's the first time that anyone has actually published a number that big. I hesitated to say it myself, except that the Michigan/Miller Brothers Legal settlement could be extrapolated to the $100 Billion. If people want to argue about the numbers, I'd like to see anyone's estimate based on the Oil & Gas Journal Article and the Michigan settlement.
Monday, April 19, 1999
Coastal Co., state
could try new deal
MATT MOORE
Business Editor
The issue of Coastal Petroleum Co. has raised its head, again. And in the coming weeks, it'll be raising more than that.
It'll raise the hackles of environmentalists, raise cries of "foul" from businesses that could benefit from a decision to drill, and most definitely raise the bank accounts of the attorneys arguing for and against drilling.
It's do-or-die for the little-company-that-could, because next month the David from Apalachicola journeys to the realm of the Tallahassee Goliath to battle, at least one last time, over the right see if there's a chance it could tap into black gold off the coast of St. George Island.
If there's any clear winner it's probably going to be the Panhandle. If there's any clear loser, it's going to be the state of Florida, no matter what the decision is.
If the company does drill and does find oil underneath the sea floor, then an economic boom is likely well into the next decade.
If the state wins and keeps Coastal from drilling, then Franklin County stands to gain because its ecosystem would be free of any derricks offshore and the chance of an oil spill.
The state is already a loser because of the time and money it has spent in denying the permits.
Add in the fact that state law already bars any other companies from drilling Florida waters for oil (except for Coastal, which was exempted by a grandfather clause), and then what we have is another round of lawsuits and appeals because Coastal Petroleum and its parent, Coastal Caribbean Oils & Minerals Ltd., is going to want its money back.
The scenarios are endless and the company's investors - the stock was trading at about 1 3/4 on the Boston Exchange last week - see the possibility of riches lying ahead.
They, too, are offering advice, unsolicited in most cases, as to what should be done.
Edwin Fujinaka proffered by far the most intriguing.
His e-mails have been darkening my in-box for quite a while, but the last one he sent definitely was a must-read.
"I have been thinking about an alternative solution that might work out," his latest missive succinctly stated. "The state should offer to settle with (Coastal) by offering a cash payment of $500 million up front and $50 million per year to have (Coastal) not drill."
Edwin goes on to say the state should up its payoff annually by 15 percent for each year Coastal doesn't drill until 2016, when the leases Coastal has owned since 1944, covering a 425-mile stretch southward along the coast, are scheduled to expire.
But, here's the catch: Coastal can't just walk away with the money. Instead, the company ought to drill and if it does find the billions of barrels of oil that are thought to be under the sea floor, the state gets a 50-percent cut straight down the middle, as well as reimbursed for the money it paid Coastal.
"Remember that litigation could result in a $100 billion judgment against the state, or maybe more," Fujinaka said. "Also, keep in mind that the state of Florida is to receive $13 billion in the tobacco settlement and Florida's lawyers in that case will get $3.4 billion. There is no connection between the tobacco case and Coastal, but I am merely pointing out that the deal I suggest is very modest in comparison."
It's an interesting plan, Edwin, but whether it takes root or not is up in the air, or bubbling below the surface.
The writer can be reached via e-mail at matt . moore reporters. Net.
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