Replies to post #22724 on Mesa Offshore Trust (fka MOSH)

[Steady_T]

Shisya... Two things....

First, I agree that that the "For" argument is not that strong.

Second I disagree with your assessment of all parties having a similar number of what the property is worth.

What the property is worth is a relative term. It really means "What the property is worth to the individual bidder".

Lets say that natural gas is what my company is interested in. I have other wells in the area that make the infrastructure costs lower because they are spread over more wells. Then the property is worth more to me because it suit my particular requirements.

Another company might be interested but not have any other wells in the area. They might not have a lot of cash available so they would have to borrow the money so funding costs would be higher for them.....the price they would be able to pay and still make money on the property would be lower.

The other argument about auctions is the Ebay example....there have been many auctions where people have paid more than the cost of an item at retail.

Of course there is no "retail" to compare to in this case, but the example still is instructive.


Lets hope that the properties don't go up for auction.