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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Wallace Rivers who wrote (71343)	8/22/2000 10:19:41 AM
From: jim_p	Read Replies (2) \| Respond to of 95453

Wallace, If the case is not heard by the Louisiana Supreme Court, they may have to settle in a matter of months. My guess is that it will go on for years, or ROIL may settle if the Louisiana Supreme Court decides to hear the case. "As of August 4, 2000, the Appellate Court had not ruled on our request for a rehearing. We do not know when the Court of Appeal will rule on our request for rehearing. If the court denies the rehearing request, we have thirty days to appeal to the Louisiana Supreme Court. The Louisiana Supreme Court has 120 days to determine whether it will review the case. If the Supreme Court determines that it will take the case it will, in all probability, be several months before the case is heard and a decision rendered. Once the Supreme Court announces its decision on the suit, it is likely that various issues will be remanded to the trial court to determine how much, if any, we owe as a result of the decision. Since the issues are complex and involve interconnected transactions occurring as early as 1977, it may take several months to resolve and determine the exact payment amount. When the litigation is concluded and the amount, if any, of our liability is finally determined, we intend to use a combination of cash, debt financing, and/or property sales or, as a last resort, protection from creditors under applicable law to fulfill the amount of any judgment. Final resolution of this matter through the courts will take a minimum of several months and could take two or more years." "The total judgment awarded by the trial court in 1998 including interest was $18.0 million. We recorded an $18.0 million charge to income in the third quarter of 1998 and continue to accrue interest on this liability each quarter. The current total liability is $19.3 million. The appellate court ruling of January 2000, if it stands, would change this liability to approximately $55.7 million including interest through June 30, 2000. If unsuccessful on our rehearing request, we intend to appeal to the Louisiana Supreme Court. Because we believe that it is probable that the decision of the appellate court will not stand, we have not recorded any additional contingent liability on our financial statements. Statement of Financial Accounting Standards No. 5 entitled "Accounting for Contingencies" requires that when a loss contingency exists, it be accrued if it is reasonably estimable and it is probable that an unfavorable outcome will occur. In reaching our conclusion we rely on our legal counsel who have informed us that in their opinion, the appellate court incorrectly applied the law and made erroneous findings of fact in reversing the trial court's judgment. They have further advised us that in their opinion it is as likely as not that the Court of Appeal's errors will be corrected on rehearing or on appeal to the Louisiana Supreme Court. Currently, we have $9 million in restricted cash set aside for this litigation." Jim