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Gold/Mining/Energy : coastal caribbean (cco@) -- Ignore unavailable to you. Want to Upgrade?

To: Edwin S. Fujinaka who wrote (1219)	12/30/1999 11:31:00 AM
From: Henry Volquardsen	Respond to of 4686

It is hard for any of us to know what might be going on behind the scenes, that's my point but my sense is that the Company has the upper hand at this point with the "just compensation" comment from the Court. I disagree. The judge's comment was just one comment in a long battle. The state can and has asked her to reconsider. And even if she affirms her opinion it is subject to appeal and I don't doubt the state will appeal. The state still has a lot of resources in this battle and can, if they choose, drag this through the courts for a long time. I also believe our political moment has passed. I posted a while ago that I thought there was a good opportunity for settlement early in the Bush administration when he could still blame it on missteps in the previous administration. That moment has passed. We are about to enter a political year and Florida is likely to be extremely important for the presidential chances of George Bush. A settlement, regardless of the appropriateness is going to antagonize some of the voters. I doubt Jeb Bush is going to willing do something next year that could hurt his brother's chance. So I believe the State of Florida will use every recourse to drag this out longer. And please don't anyone point out that it would be cheaper to settle now, I may not be able to restrain myself from making a rude response. Anyone who believes any professional politician, Republican or Democrat, values the taxpayer's money over hs or her own political needs has just not been paying attention. So the notion that we have the upper hand based on one judge's ruling is, I believe, mistaken. I strongly believe Coastal will win but as I have said in the past I believe it will take a long battle in the courts. At some point, the State should be petitioning the Company to try to settle for as low a price as they can to fufill the just compensation requirement. You are assuming that government responds the same way as a business. They won't they will respond as politicians and lawyers. This condemnation valuation is probably a lot higher than the market price for leases that are under attack by the full power of the State. Of course the market price for the leases is depressed because the State has been using every immoral and illegal method they can muster to devalue the leases. Free market prices for Gulf leases are high and they are high because the supply of leases has been artificially reduced by federal and state bans on new leases. The current prices of our leases are depressed because we can't do anything with them. But in a condemnation proceeding they will be compared to the free market lease prices, a lease price that will be artificially high due to the government restriction. We should want a condemnation hearing. If the state were to lift all restrictions on our leases the price of all Gulf leases would fall.