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

To: oelfuerunsalle who wrote (2673)	5/3/2001 4:29:35 PM
From: Edwin S. Fujinaka	Read Replies (1) \| Respond to of 4686

Although I've been trying to keep a low profile on the potential valuation it might be entertaining to review Matt Moore's 1999 Article in the Panama City NewsHerald once again. He quotes someone <G> as suggesting that it might cost Florida $100 Billion to buy out the Coastal Petroleum Leases. Perhaps that would be a good place to start negotiating <G>. He also discusses a possible "deal" that I've been promoting where the State would pay a $500 million lump sum up front for Coastal Petroleum to defer drilling and then pay a yearly fee as long as drilling is deferred. A key feature of my proposal was that the initial payment of $500 million would be repaid out of eventual oil revenue whenever the State agreed that it was time to drill. He got details of my proposal a little garbled. Anyway here is Moore's two year old Article: 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.

To: oelfuerunsalle who wrote (2673)	5/3/2001 5:58:13 PM
From: still learning	Respond to of 4686

The low end may be compensation for the lease purchase price and fees paid since then, plus any amount CCO has invested, plus some formula to bring it back into the net present value of the $$ invested over that time. That # would be quite low, but it is the bottom end. IT could potentially be multiplied (maybe trble damages) should CCO prove the state acted in bad faith, and even fradulently. I believe CCO has about $50 mm in hard investment into the leases, litigation, and exploration -- correct me if I'm wrong. I know from the filings that: "This is an action for damages in excess of $15,000.00, and as such is within the jurisdictional limits of this Court." "During the period between 1944 and 1947, the annual rental paid by Arnold Oil to TRUSTEES for the Original Drilling Lease and all other leases it owned in Florida was approximately $45,000.00. The annual rental comprised a major portion of TRUSTEES’ budget during that period. When the resources of Arnold Oil were exhausted, Chester Ferguson, acting as Trustee for the Lykes family, purchased a 51% interest in Arnold Oil. The money derived from the sale of this stock was used by Arnold Oil to pay rent to TRUSTEES. Between 1946 and 1947, William F. Buckley and his associates arranged for the purchase of all of the stock of Arnold Oil for $1,000,000.00, and changed its name to Coastal Petroleum Company" "By the end of 1968, COASTAL and its partners had expended approximately $16,370,000 on oil exploration on its various leases, including the Drilling Lease."