"So, what is fair compensation? At a minimum it has to be what...

"So, what is fair compensation?  At a minimum it has to be what the asset has cost us.  (ie Historical cost basis) - that would be $80 million"

Tomh, maybe I don't know how to read financial statements.  Kill me dead if I am wrong.  But I think you have clearly underestimated the value we are talking here.  Mate, I'm not having a crack at you.  I, like so many and probably you too, are just so frustrated with all of this.

in 2014, Mel reported a loss of $85,917,632.  Of this, $81,219,760 was attributed to the write down of its "P" reserves to "C" contingent reserves.  As already discussed in this thread, the decision to do this was directly related to the deteriorating political environment, not because the reserves aren't there.

In 2015, MEL reported a loss of $3,867,393 and we are told that a significant portion of this cost is taken up with legal action and costs associated with being "inactive" and site remediation.

Go to the balance sheet.  The issued capital for the company is $123,990,967.  We have accumulated losses of $116,157,645 and equity of $8,222,745.  There are no asset revaluation reserves.  This tells me then that in cold hard cash, MEL has spent $123,990,967 less cash at bank on developing this business and the gas reserve/lease/tenement that it has to date.  This amount is well north of $80M-$85M

If MEL is to do nothing more than recoup its investment and "sell" itself as a going concern to the NSW state government, the amount we are talking is $123,990,967 less any amount recoverable from its tangible assets after all of its liabilities are honoured and paid. I really don't care about recouping any value back out of the assets held by the company (although, I do care about all liabilities to creditors and staff being paid).  Let the NSW government learn a lesson about wringing out cash from the dead shell of a business.

It is not $80 or $85M, it is substantially more.

Balance sheets, in general do not take into account the time value of money.  So, if mel's investors are to be placed back into a position for nothing more than the original investment, then we have to be talking a number north of $123M.

Clearly while PH has stated that the $120 odd milling dollar price tag is in 2014 or 2015 dollars, it isn't, or doesn't appear to me to have a NPV component to it.

Ultimately, what MEL should be paid is 1. compensation for the court action and 2. the value of the business as a going concern.  Both are mutually exclusive components although clearly if MEL is bought out, the former will be included within the latter.  What is the company worth? Ultimately, a starting point has to be the value of the reserves.  What should the government pay?  Potentially something greater than this. Why? Because, this is not a "willing buyer and willing seller" arrangement.  A willing buyer and willing seller (see Spencer v Commonwealth) is the basis at law for modelling property transactions (in particular land).  Mels negotiations with NSW govt may prove to be a de facto case of compulsory acquisition and as such there may need to be some degree of injurious affection paid on top.

Interestingly in all of this, approx. 445,000,000 shares have been issued. At an issued capital of $123,000,000, those who have actually invested in capital raisings have done so at an average share price of $0.28.  That is the number I think of .  That is something I don't want to loose sight of - all of those people - the phrase of "5,000 mum and dad investors" that keeps getting bandied about with such ease. the "5,000 mum and dad investors" who have sunk money into this business at an average price of 28c.  It is those people that the NSW government need to give some respect to and pay a fair price for the company.

Maybe this is something that our "green" brethren need to realise before they consider it quite ok before they carry on about the government cancelling/repealing/doing whatever it likes MEL's right to conduct a lawful business.  Maybe some of our green academics need to be teaching business and accounting too.

"123"  that's the starting number.