|Miami Herald finally mentions Coastal Petroleum and even Coastal Caribbean. But they don't mention the stock, CCO or COCBF. Even so, the story should be good for a modest run up on Monday morning and if the major media begins to focus in on the story of the Coastal Petroleum Court Case we could see some major moves. I've sent the story of the Oil & Gas Journal Article by Azad out along with the Miller Oil Court Settlement in Michigan to several people in the media in the past with no results.|
Normally I would follow up and send a package of additional information out to the reporter who wrote the Miami Herald Story, but since I have changed to a low profile mode I have been restraining myself in recent months. I have mixed feelings about this strategy but I think that the law firm may have a similar perspective. Still, I would enjoy having the stock at a somewhat higher value before we get into the jury phase of the case to discuss damages. What do you other people think?
BTW, mention of the Miami Herald Article was first on Raging Bull and I am just reposting it here:
Published Sunday, June 17, 2001
Battle over offshore drilling at critical point
PETROLEUM and POLITICS
Florida doesn't now allow offshore drilling, but oil companies with leases and a lot at stake are crying `foul.'
BY MIMI WHITEFIELD
There was a time when sleepy Florida dreamed of Texas-like gushers to propel its economy.
It even offered a $50,000 reward to the first company to make a major oil strike in Florida and granted offshore oil and gas leases that ran right up to its powdery west coast beaches.
But it's been nearly 60 years since Humble Oil collected the reward and Florida's attitude toward drilling has changed dramatically.
Now the future of three major offshore leases are in play -- posing a challenge to tourism-dependent Florida's assertion that there should be no drilling for oil and gas in Florida waters because of the environmental risk.
Lease Sale 181 -- six million acres of oil-and-gas-rich seabed that the federal government wants to auction off in December -- has been grabbing recent headlines because it pits Gov. Jeb Bush, who opposes drilling in the entire eastern Gulf, against his brother, President George W. Bush.
But two other leases pose a more immediate risk to Florida's coffers. By this fall, the Commerce Department is expected to rule on whether Chevron can begin drilling in the Destin Dome -- a huge natural gas field 25 miles south of Pensacola that lies in federal waters.
Chevron U.S.A. has filed a lawsuit asking for hundreds of millions of dollars to go away if Florida doesn't allow it to exercise its lease.
Another case involving Coastal Petroleum, a small Apalachicola company with only one paid employee, has been winding its way through circuit court in Tallahassee since January. The company, one of 15 major oil companies and independents that bought oil and gas leases in the 1940s, has been battling the state over its leases for years.
It is no longer fighting for the right to drill. It already lost that battle in court. But now it contends that the state's prohibition on drilling constitutes an illegal taking of its property rights to explore for oil and gas, and it wants compensation.
``The only thing we want to show is that the state can't have it both ways,'' said Cary Gaylord, a Tampa attorney representing Coastal.
The state, he said, has refused to issue a permit allowing Coastal to explore for oil and gas, but also balked at compensating it for the loss of its property rights. Coastal has been making lease payments -- now nearly $60,000 per month -- to the state since the 1940s.
Last month a state motion to have Coastal's suit dismissed was denied. Coastal would like to see the case proceed to a jury trial as soon as possible.
The suit involves only one of Coastal leases -- Lease 224-A, a three-mile wide band between 7.36 and 10.36 miles off Florida's west coast. The 400,000-acre tract stretches from Pasco County to Apalachicola and includes a site off St. George Island -- a barrier island known for its white-sand beaches and pricey real estate -- where Coastal applied for and was denied a drilling permit by the state.
The company has studiously avoided saying how much it thinks the fair market value of Lease 224-A is, but it's clear the amount it has in mind is substantial.
In a letter to shareholders last year, Benjamin W. Heath, president of Coastal Caribbean Oils & Minerals Ltd., Coastal's Bermuda-based parent company, gave a hint: ``The leases are very valuable assets; therefore many millions of dollars are at stake.''
The main assets of Caribbean Oils & Minerals, a publicly traded company, are its 59.25 percent interest in Coastal Petroleum, and Coastal's assets are its Florida leases and royalty interests.
Although Coastal has never discovered commercial quantities of oil and gas despite exploratory drilling from 1947 until the late 1960s, Philip Ware, Coastal's president, said he's confident the use of deep-water technology could yield billions of barrels of oil.
``There is no doubt in my mind that oil is there,'' said Ware. ``The leases are giants. All the major oil companies would love to be in here. It was never a matter of potential, but rather politics: Can you really drill there in Florida?''
At this point the answer is no.
The state has long held that there should be no drilling within 100 miles of Florida's coast and Gov. Bush has said the prudent course is to keep drilling out of the entire eastern Gulf of Mexico.
The state policy is the same whether it concerns Chevron, Coastal Petroleum or other companies that may bid on Sale Lease 181. ``Our policy is very consistent -- no drilling,'' said Lucia Ross, a spokeswoman for the Florida Department of Environmental Protection.
However, a report on natural gas issues presented to the Interior Department's Minerals Management Service's Outer Continental Shelf Policy Committee last month recommended studying whether the current moratorium on new leasing off Florida's shores should be lifted.
While gas lines and oil and gas rigs lace the Gulf of Mexico off the coasts of Texas, Louisiana, Mississippi and Alabama, it's almost as if Florida has erected a huge ``Keep Out'' sign in the ocean.
CHANGE OF HEART
But when Coastal, then known as Arnold Oil Explorations, was formed in 1940, the state's attitude was different.
Coastal was granted oil, gas and mineral leases and royalty interests on millions of acres of submerged lands -- including Lake Okeechobee and along Florida's west coast from Marco Island all the way to Apalachicola.
``When the leases were acquired by Coastal, state officials were openly enthusiastic about the possibility of Florida becoming an oil-producing state,'' Heath, 86, wrote to shareholders last year.
By the late 1960s, however, the state's attitude toward offshore drilling began to shift, and it challenged the validity of Coastal's leases. The company has been in court ever since, battling everything from drilling permits to surety bonds.
The state further toughened its offshore drilling stance in 1990 when Gov. Bob Martinez and the cabinet approved a policy prohibiting production of oil and gas on the state's submerged lands. Florida waters extend 10 miles off the coast.
Through the years, Coastal has been something of a ``paper tiger,'' contends Mark Ferrulo, director of the Florida Public Interest Research Group, an environmental and consumer organization that opposes offshore drilling. ``We thought they were trying to greenmail the state all along.
Meanwhile, Coastal attorneys are watching carefully what happens with Lease Sale 181, an Idaho-shaped tract whose northern tip is within 15 miles of Florida beaches.
A final environmental impact statement is expected to be issued late this month or in early July. Barring problems or a change of heart, the federal Department of Interior is expected to issue a proposed notice of sale in July.
``Clearly if some portion of the Gulf is opened up under President Bush's plan that would be evidence,'' helpful in determining possible compensation for Coastal, said Gaylord.
Lease Sale 181 has the distinction of being the only proposed Eastern Gulf lease in the Interior Department's' current five-year oil and gas leasing program.
The last lease auctioned off in the Eastern Gulf was Sale 116 in November 1988. More than 46 million acres, divided into 8,000 blocks, were up for grabs. Bidders offered $41.5 million for 657,000 acres.
Chevron, which bid on blocks in the eastern and central area of Destin Dome, was among the successful bidders.
Now the Commerce Deparment file on the Chevron case is complete. A final environmental impact statement, a study on the effects on endangered plant and animal species, and an analysis related to water and air quality have all been filed.
Interested parties have until the end of the month to respond. Then Commerce has 90 days to decide whether production can start. Even if it asks for a 45-day extension, there should be a decision by mid-November.
``The Chevron case sometimes gets second billing to Lease Sale 181, but it really should be the governor's top priority,'' said the PIRG's Ferrulo.
Not only are Chevron and its partners ready to drill, but there are dozens of other companies with active oil and gas leases off the Panhandle coast waiting in the wings.
``There's a potential domino effect'' if Chevron is successful, he said. ``The pending decision represents the pinnacle of the 20-year battle to keep Florida's beaches rig-free. It would be the first full-scale drilling operation in our waters.''
To guard against that, Florida Democratic Sens. Bob Graham and Bill Nelson have introduced a bill that would prevent the Secretary of Interior from issuing leases off Florida waters, including the Lease Sale 181 area.
There's also a provision allowing the Secretary of Interior to buy back existing leases in the Destin Dome and other possible offshore drilling sites.
``Sacrificing a priceless landscape is not the way to answer this country's long-term energy needs,'' Graham said.
© 2001 The Miami Herald and wire service sources. All Rights Reserved.