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

To: Bobby1418 who wrote (1226)	12/31/1999 1:19:00 PM
From: Edwin S. Fujinaka	Read Replies (1) \| Respond to of 4686

We have to keep in mind that when we are dealing with the Goverment or Government Agencies and there is the additional involvement with the Court system, nothing moves very quickly or logically. I doubt if anyone is seriously negotiating prior to a final ruling from the appeals court. Remember that the published ruling in October was only preliminary. BTW, that ruling only outlined the obvious application of the law that has been the law since the Country was founded. The State has always had the right to "take" anyone's property for public use of public reasons and this includes the Coastal Petroleum lease rights. When the State exercises their power of eminent domain to take property, they have to pay "just compensation". The Florida Appeals Court appears to be saying that the rules of condemnation apply in this case. They further point out that there is no dispute about the validity of the Contract between the State and Coastal Petroleum. They actually said that the State has to pay "just compensation" if they prevent Coastal Petroleum from exercising their lease rights. The problem that remains is that the Court needs to clarify whether they have actually determined that Coastal Petroleum has essentially won an inverse condemnation case via their ruling. My opinion is that the Appeals Court fell short of such a ruling and the inverse condemnation case will have to be heard in the lower circuit court. We will see what the Appeals Court says in their final Ruling. The upshot of all this is that the State can still delay a final ruling where they have to pay any monies for several more years. The question now is whether it is politically good for the current administration to settle this now or wait until the Court imposes a settlement years from now. The deal that I have been promoting is designed to provide the basis for a middle ground. I think it provides the politicians with an easy financial out that could be very inexpensive for the State and it's taxpayers in the long run. The long run will almost certainly result in the leases being developed eventually if there is anywhere near the tens of billions of barrels of oil there. In the meantime an up front payment of $500 million will probably result in an immediate price jump to close to $10/share and perhaps a lot higher. The $50 million yearly payments should see the CCO stock going to at least $15/share as my guess. Rational public discussion of the whole situation really should see CCO stock over $20/share with my deal in place. Earnings would look like over $1/share plus whatever CCO could get from investing the initial lump sum. CCO could easily show total earnings of $2 or maybe $3 per share and a PE multiple of ten should propel the stock to over $20/share. For a deal like I've proposed to be viable, both sides have to pump up the value of the Apalachicola Embayment oil find. Floridians should love the prospect of sharing in such a windfall just like the folks in Alaska. They don't have to develop it immediately, but it's there in their backpocket ready to develop when needed. In fact, the entire US should be relieved to have a major addition to the strategic oil reserves. Politicians could actually look statemanlike if they handled it right. A major oil find under Florida and US control is actually a plus and not a negative. Where is everybody's head on this? When I asked for specifics on anyone's reason for my not proposing the delay in drilling deal to Governor Jeb Bush, I was not being combative and belligerant. I'd just like to hear any possible downside scenario. I'd especially like to hear from Henry on this. If I pose the deal as just an individual shareholder (and if I let Jeb Bush take credit for the idea) how can it possibly damage the interests of CCO or us shareholders?