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    Rising World Oil Prices Mean Windfall For Sacramento, Mini-Windfall For LB City Hall, From LB Tidelands Oil Properties

    (March 12, 2003) -- With crude oil prices rising on world markets, there are some beneficiaries beyond OPEC.

    The State of California -- and to a lesser extent LB City Hall -- are pocketing additional revenue from Wilmington Crude being pumped off LB's coast -- on state tidelands property, held in trust and operated by City of LB. It currently brings over $30 a barrel...although not long ago, the market price was roughly $20 a barrel...and sometimes lower.

    Responding to a query from, Dennis Sullivan, Dir. of the City of LB Dept. of Oil Properties, offered some rough (very rough) estimates of what the market price rise might mean for Sacramento and LB City Hall.

    Stressing that no one knows for certain what the oil price will be in the future, Mr. Sullivan estimated Sacramento is currently collecting approximately $1 million more every month from LB's tidelands oil properties than before recent market price rises.

    Mr. Sullivan indicated LB City Hall will likely see considerably less...currently estimated at roughly $500,000 more for the current fiscal year. (Caveat: these figures are only estimates.)

    City Hall's share of LB's oil revenue ultimately winds up in LB's Tidelands Operating Fund, where under state law it must be used in the tidelands for tidelands trust purposes (including beach, coastal uses and the like).

    Mr. Sullivan indicated LB's financial arrangement with Sacramento is complex, with City Hall getting some incremental revenue increases based on a formula; as the oil price goes up, City Hall gets a smaller portion. The State of CA is the bigger beneficiary.

    Mr. Sullivan cautioned against estimating future crude oil prices. The current $32-33/barrel for Wilmington Crude may not hold up for the rest of the fiscal year...and the price may eventually come down to the low $20/barrel range.

    Despite the caveats accompanying admittedly rough estimates, Mr. Sullivan was unequivocal on one point:

    "One thing is certain," he said. "You can't predict oil prices."

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