<<They can choose to start escrowing liberal costs for capping (your scenario), or they can assume that some wildcatter will buy the wells at fire sale prices and continue to pump small volumes for years>>
No wildcatter or big oil company will ever buy the TELOZ assets... simply because with such a short life left of the offshore assets, the liabilities to plug, cap, abandon and DISMANTLE massive, multiple offshore platforms will far exceed ANY revenues that TELOZ gets in the next handful of years. Wildcatters are NOT stupid. I can just see it now. A widcatter goes to a bank to try and get millions to borrow to buy cheap TELOZ assets. BAnker sees very limited production life left, banker sees very high productions costs and expenditures....banker sees very high hurricane risk.banker sees declining production rates.....and then banker sees massive plugging and dismantle costs that will have to be paid if some idiot buys TELOZ assets and ASSUMES ALL THOSE FUTURE large, large, large liabilities. And every year those costs to plug, dismantle massive well platforms, cap.....and return the well sites to picture perfect EPA standards...goes up and up and up and up. There is no telling what those costs may increase to in 5-6 years. My guess is that with only $6 million reserved for those large future costs (liabilities) that TELOZ is under reserved by a factor of 50maybe even 10 times of what they have on hand now. But the costs will be FAR higher than what they are now. And Chevron came RIGHT OUT and said that in the latest 10-Q (basically)! Haven't you heard that oil companies are facing huge increases in operating costs? Or have you been sleeping?
Well we can go around and around arguing about who isn't listening.
Lets try this...
Even if we believe all of your gloom and doom, TELOZ still has has two legitimate choices. 1.) Pay no dividends and fund the capping at high rates OR 2.) pay dividends and underfund the capping. Do you understand this?
I understand what happens if they follow plan one and nothing else changes. But what actually happens if they choose 2? Can you not follow this scenario?
One last point, I don't think that a wildcatter would need to borrow 'millions'. It is very possible that the wildcatter deal could involve payments from the escrow to TAKE the wells. If no such wildcatter could be found, the wells could end up like thousands of other uncapped wells in LA. TELOZ would be bankrupt, but my dividends would be secure and long gone...