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	TBP SPEECH NEW YORK SOCIETY OF SECURITY ANALYSTS NEW YORK DECEMBER 16, 1980

TUESDAY

I. I WOULD LIKE TO BEGIN BY INTRODUCING THE MESA-PERSONNEL ATTENDING TODAY: JOHN BOROS, VICE PRESIDENT-SECRETARY AND TREASURER; GAINES GODFREY, VICE PRESIDENT-FINANCE; DAVID BATCHELDER, CONTROLLER; BARRY CANNADAY, GENERAL ATTORNEY; SIDNEY TASSIN (TOSS-ANN), ASSISTANT TO THE CONTROLLER; ALLAN CECIL, MANAGER-CORPORATE COMMUNICATIONS; [HANDWRITTEN ADDITION: AND MARK WOMBLE, ANALYST]. MAY I ALSO INTRODUCE MY WIFE, BEA AND OUR DAUGHTERS TERRY KRSHKA, ELIZABETH PICKENS AND HER FRIEND MARY GRACE ASHTON.

[HANDWRITTEN ADDITION: MSA PEOPLE HERE FOR OTHER BUSINESS-FAMILY GETS TO SHOP]

A. SINCE MOST OF YOU ARE FAMILIAR WITH MESA's FINANCIAL AND PRODUCTION HISTORY, I WOULD LIKE TO DEPART FROM MY USUAL FORMAT BY GIVING A BRIEF UPDATE ON CURRENT ACTIVITIES OF INTEREST AND RESERVE THE MAJORITY OF MY TIME FOR YOUR QUESTIONS.

II. ACREAGE

A. UNDEVELOPED ACREAGE-SLIDE 1 (THIS IS A MUST SLIDE!)

1. OUR PRESENTATIONS USUALLY BEGIN WITH A DISCUSSION OF UNDEVELOPED ACREAGE, AND THIS TIME IS CERTAINLY NO EXCEPTION. WE HAVE ALWAYS FELT THAT A QUALITY ACREAGE POSITION WAS BASIC TO SUCCESS.

A. OUR COMMITMENT TO THIS PHILOSOPHY IS ILLUSTRATED BY MESA'S BIDDING AT LAST MONTH'S OFFSHORE LEASE SALE BY ITSELF AND JOINTLY WITH TEXACO.

		MESA'S SHARE
BLOCK	TOTAL BID PRICE (MILLIONS)	WORKING INTEREST	BID PRICE (MILLIONS)
BRAZOS A-39	$169	50%	$84.5
BRAZOS A-7	81	50%	40.5
MUSTANG ISLAND 800	8	100%	8.0
TOTAL	$258		$133.0

	NET		NET
COMPANY	HIGH BIDS (MILLION $)	RANK	EXPOSURE (MILLION $)	RANK	NUMBER OF TRACTS*
GULF	156.3	1	255.6	2	7
TEXACO	146.5	2	182.1	6	6
MESA	133.0	3	195.8	5	3
ATLANTIC RICHFIELD	127.2	4	300.0	1	10
SOHIO	81.6	5	127.9	8	3
TENNECO	77.8	6	225.0	4	7
PHILLIPS	74.9	7	113.3	9	5
EXXON	70.9	8	234.0	3	4
GETTY	68.5	9	178.1	7	8
SUPERIOR	56.8	10	58.7	10	2

*APPARENT HIGH BIDS, INCLUDING THOSE MADE ALONE OR WITH PARTNERS.

(1) THE INDUSTRY AVERAGED LEAVING 54,6 OF THEIR NET EXPOSURE ON THE TABLE WHILE MESA LEFT 46%. [HANDWRITTEN ADDITION: SOMEBODY IS OUT OF STEP WE ARE EITHER DRIVING TOO HARD OR THE OTHERS ARE LAGGING.]

B. IN CANADA, MESA RETAINED A 12.5% GROSS ORRI IN 1.2 MILLION ACRES. THIS EQUALS A 50% WORKING INTEREST OR THE EQUIVALENT OF 600,000 NET ACRES. (1) PURCHASER HAS COMPLETED 74 OUT OF 93 WELLS DRILLED FOR AN 80% DRILLING SUCCESS.
C.INTERNATIONAL ACREAGE IS PRIMARILY IN WESTERN AUSTRALIA AND A SMALL AMOUNT IN THE GERMAN NORTH SEA. [HANDWRITTEN ADDITION: INSIGNIFICANT AT THIS POINT.]
D. MESA'S CURRENT U.S. UNDEVELOPED ACREAGE INVENTORY ENABLED THE COMPANY TO PROVIDE THE BASIS FOR FORMING THE MTS LIMITED PARTNERSHIP WITH TEXACO INC. AND SEQUOIA PETROLEUM INC. OF THE APPROXIMATELY 1.9 MILLION ACRES IN THE 1980 U.S. UNDEVELOPED ACREAGE, THE HATCHURED I AREA REPRESENTS TEXACO'S AND SEQUOIA'S 35% INTEREST IN MTS LIMITED. THE REMAINDER, WHICH IS VIRTUALLY ALL IN THE PARTNERSHIP, REPRESENTS MESA'S SHARE,{STRICKEN TEXT: [HANDWRITTEN ADDITION: without a doubt we believe]}
E. {STRICKEN TEXT: GOOD OR BAD, MESA IS GIVING SHAREHOLDERS A BETTER OPPORTUNITY TO ENHANCE RESERVES THAN ANYONE ELSE IN THE INDUSTRY.}

B. MTS LIMITED PARTNERSHIP—SLIDE 2

1. MTS LIMITED PARTNERSHIP IS OWNED 65% BY MESA, THE GENERAL PARTNER, 25% BY TEXACO INC. AND 10% BY SEQUOIA PETROLEUM INC., THE LIMITED PARTNERS.

2. THE PARTNERSHIP WAS FORMED TO EXPLORE FOR OIL AND GAS ON THE ACREAGE CONTRIBUTED BY MESA AND ANTICIPATES ACQUIRING ADDITIONAL ACREAGE.

A. MESA'S QUALITY ACREAGE INVENTORY PROVIDED MORE GOOD PROSPECTS THAN COULD BE ACCOMODATED IN THE BUDGET. THE DEAL WITH TEXACO AND SEQUOIA PROVIDES ADDITIONAL CAPITAL TO HELP DEVELOP THE ACREAGE.

3. MESA CONTRIBUTED LEASES IN 15 STATES, PRIMARILY IN THE MID-CONTINENT, ROCKY MOUNTAIN AND SOUTHWESTERN PRODUCING AREAS AND IN FEDERAL AND STATE WATERS OFFSHORE LOUISIANA AND TEXAS FOR ITS 65% WHILE TEXACO AND SEQUOIA CONTRIBUTED CASH FOR THEIR INVESTMENTS. ($177.875 MILLION AND $71.150 MILLION*, RESPECTIVELY.) WE NOW HAVE AN ENTITY WHICH HAS $249 MILLION IN CASH AND 1.9 MILLION NET ACRES. MESA'S 1.9 MILLION ACRES TRANSLATES INTO A VALUE OF $263 PER ACRE. (ON NOVEMBER 16, 1979, JOHN S. HAROLD VALUED MSA'S-ACREAGE AT $35 MILLION OR $25 PER ACRE. *THESE ARE GROSS "UPED" FIGURES.

4. IN ADDITION, TEXACO AGREED TO PURCHASE $150 MILLION OF 7% CUMULATIVE PREFERRED STOCK AND SEQUOIA $60 MILLION, NONE OF WHICH HAS BEEN ISSUED TO DATE.

C. OIL AND GAS EXPENDITURES—SLIDE 3

1. SPENT OVER $320 MILLION IN 1979 WHICH INCLUDES $28 MILLION FOR CANADA AND $10 MILLION FOR BEATRICE PRIOR TO THE SALES.

2. OUR CAPITAL BUDGET[S] FOR 1980 [HANDWRITTEN ADDITION: AND 1981] {STRICKEN TEXT: INCLUDING THE $133 MILLION COMMITTED AT THE OFFSHORE SALE, IS ABOUT $415 MILLION AND IS} [ARE] ESTIMATED AT $400 MILLION. {STRICKEN TEXT: FOR} [THE] 1980 [HANDWRITTEN ADDITION: BUDGET INCLUDES THE $133 MILLION AT THE OFFSHORE SALE AND THE 1981 BUDGET] (DOES NOT INCLUDE FUTURE OFFSHORE ACREAGE PURCHASES.) '81 [UNREADABLE TEXT]

3. NOTE THE INCREASE. IN EXPLORATORY DRILLING FOR 1979, 1980 AND 1981. [HANDWRITTEN ADDITION: 4.WE CURRENTLY HAVE TOTAL DEBT TOTAL DEBT OF $489 MILLION. LESS $339 MILLION OF RECEIVABLES LEAVES A NET OF $150 MILLION OF 7% CARRYING COST WE HAVE THE $100 MILLION REVOLVER PLUS THE SALE OF THE 7% PREFERRED $210 MILLION IF WE NEED THEM.]

D. U.S. WELLS OF SPECIAL INTEREST—SLIDE 4

1. MESA'S AGGRESSIVE DRILLING ACTIVITY IS REFLECTED IN THE LATEST DRILLING REPORT—52 WELLS—28 MESA OPERATED. (INCLUDES 13 WELLS DRILLING TOWARD OBJECTIVES BELOW 15,000 FEET OF WHICH 7 ARE MESA OPERATED—CROOK #1-32, Cox #1-34, TIPTON #1-29, #1-75 URROZ, #1-10 PELTON, S.P. 12 AND CROWN ZELLERBACH #1).

2. I WOULD LIKE TO BRIEFLY REVIEW SOME OF OUR WELLS OF SPECIAL INTEREST.

3. GULF COAST—SLIDE 5

A. GALVESTON 100-L #3 (MESA 100%) WILL ATTEMPT TO COMPLETE AS DUAL OIL AND GAS. OBJECTIVE IS AT 13,500 FEET AND IS CURRENTLY DRILLING AT 9,950 FEET. ONE EXCELLENT GAS WELL HAS BEEN DRILLED {STRICKEN TEXT: AND THE CURRENT WELL HAS TWO PAY ZONES—ONE APPARENT OIL AND THE OTHER GAS.} WE HOPE TO HAVE {THE} TWO WELLS ON PRODUCTION BY APRIL {STRICKEN TEXT: WITH THREE ZONES} PRODUCING AT A DAILY RATE OF {STRICKEN TEXT: OVER} [ABOUT] 20 MM CUBIC FEET OF GAS.
B. BRAZOS A-6 #1 (MTS 22.3%, MESA 14.5%) (DRILLING TO 17,000 FEET. CURRENTLY DRILLING BELOW 14.400 FEET.)

4. GULF COAST—SLIDE 6

A. ONSHORE, MESA CROWN ZELLERBACH #1 (MESA 100%) (A 20,000-FOOT TUSCALOOSA TEST CURRENTLY DRILLING AT 13,000 FEET.)
B. V-381 #2 (MESA 80%) DRILLING TOWARD 10,000 FEET AND CURRENTLY AT 7,312. (#1 WAS DRY BUT DID NOT GO AS DEEP AS PLANNED DUE TO MECHANICAL FAILURE.)
C. S.M.I. 155 #2 (MESA 70%)
D. S.M.I. 156 #6 (MESA 70%) THE WELLS HAVE BEEN DRILLED THROUGH AN UNDERSEA TEMPLATE. OPERATIONS HAVE BEEN SUSPENDED UNTIL A PLATFORM IS SET NEXT SUMMER WHEN ADDITIONAL DRILLING WILL COMMENCE.
E. S.P. 12 #4 (MESA 37.8%) HAS A P.T.D. OF 16,000 FEET CURRENTLY AT 10,700. (THE #2 EXPLORATORY WELL WAS DRY. Two OTHER WELLS HAVE BEEN DRILLED AND ARE AWAITING A PLATFORM AND COMPLETION.)
[HANDWRITTEN ADDITION: F. M.P. 74 #3 (MSA 19.5%) (MTS 30%) AM MTS PROPERTY. SMALL PLATFORM TO BE LOCATED ON #3 WELL WILL DEVELOP RESERVES ESTABLISHED BY #'S 1, 2 & 3 WELLS. (HIGH PRICED ACREAGE TO WEST AND SOUTHWEST. TEXAS PAID $53 MILLION FOR M.P. 75)]
F. V-273 #2 (MTS 75%, MESA 48,8%) DISCOVERY TESTED AT 451 BARRELS OF OIL PER DAY (CURRENTLY DRILLING #5 WHICH WILL BE LAST WELL DRILLED FROM THE TEMPLATE. RIG WILL THEN MOVE TO BRAZOS A-7, ADDITIONAL DRILLING NEXT SPRING WHEN PLATFORM IS SET.) [HANDWRITTEN ADDITION: JAN 81]

GULF COAST—NEW ACREAGE-SLIDE 8

G. BRAZOS A-39 AND A-7 ARE LOCATED IN THE BIGENERINA HUMBLEI (BIG HUM) TREND WHERE SEVERAL GAS DISCOVERIES HAVE BEEN ANNOUNCED BY OTHER COMPANIES. WE BELIEVE THE BIG HUM MAY BE AS BIG A PLAY AS THE TUSCALOOSA.

(1) WILL COMMENCE A WELL ON BRAZOS A-7 BY MID-JANUARY.
(2) WILL BEGIN DRILLING BRAZOS A-39 BY EARLY FEBRUARY.

5. OKLAHOMA-TEXAS—SLIDE 9 - FIVE DEEP WELLS OF INTEREST. A. N.E. MAYFIELD PROSPECT CONTOUR MAP—SLIDE 10

(1) CROOK #1-32 (MESA 64%) PRESENTLY IN COMPLETION OPERATIONS.
(2) Cox #1-34 (MESA 58%) (3 MILES S.E. OF CROOK,) A 26,000-FOOT HUNTON TEST CURRENLTY DRILLING AT 5,200 FEET.
(3) TIPTON #1-29 (MESA 460) (1 MILE N. OF CROOK.) ALSO A 26,000-FOOT HUNTON TEST CURRENTLY DRILLING AT 2,700 FEET.

B. UNIVERSITY-BLOCK 19 CONTOUR MAP—SLIDE 11

(1) UNIVERSITY 42-20 #1 (MESA 50%) FUSSELMAN/ ELLENBURGER GAS DISCOVERY. COMBINED RATE OF 10.5 MMCF.
(2) CERF RANCH #1-9 (MTS 25%, MESA 16.25%) NOW AT 24,300 FEET.

A. RILEY RIDGE FEDERAL #8-24 (MESA 40%) (MADISON/BIGHORN DISCOVERY-HIGHLY C02)
B. UTELAND FEDERAL #1-35 (MTS 41.97%, MESA 27.28%) (AN MTS PROPERTY- CURRENTLY DRILLING AT 12,800 FEET)
C. #1-5 URROZ (MESA 65%) - AN MTS PROPERTY - COMMENCED DRILLING LAST MONTH - A 16,000-FOOT NUGGET TEST IN THE OVERTHRUST CURRENTLY DRILLING AT 3,400 FEET. [HANDWRITTEN ADDITION: WE ARE IN ALL THE RIGHT AREAS. BIG HUM, TUSCALOOSA DEEP ANADARKO-DEEP PERMIAN-OVERTHRUST OFFSHORE, LA & TEX.]

(1) RILEY RIDGE CONTOUR MAP—SLIDE 13
(2) URROZ AND UTELAND FEDERAL CONTOUR MAP-SLIDE 14

F. I WILL CLOSE BY BRIEFLY RECAPING MESA'S CORPORATE PHILOSOPHY—SLIDE 15 (LOGO)

1. MESA WAS A FORERUNNER IN IDENTIFYING UNDERVALUED EQUITIES AND MAKING ACQUISITIONS (HUGOTON-1969, PUBCO-1973)—NOT TO MENTION ATTEMPTS AT AZTEC, IMPERIAL AMERICAN, GAO AND SOUTHLAND ROYALTY.

2. MESA WAS ONE OF THE EARLY COMPANIES TO RECOGNIZE POTENTIAL IN CANADA AND ALSO REALIZED THE CHANGING POLITICAL CLIMATE THERE AS WELL AS IN THE UNITED KINGDOM.

3. MESA WAS ONE OF THE FIRST INDEPENDENTS TO MAKE MAJOR LEASE PURCHASES IN THE GULF OF MEXICO.

4. MESA VERY QUICKLY ADJUSTED TO GAS DEREGULATION BY IDENTIFYING AREAS OF GREATEST POTENTIAL AND RAPIDLY DIRECTED A PORTION OF ITS EFFORTS TO DEEP AND TIGHT GAS.

5. AS PROVEN IN THE PAST, MESA'S MANAGEMENT-WILL CONTINUE TO BE INNOVATIVE IN DEVELOPING NEW IDEAS SUCH AS THE MTR WHICH THE COMPANY CREATED AS MEANS OF ENSURING THAT SHAREHOLDERS RECEIVE THE FULL VALUE OF THEIR ASSETS. OTHERS HAVE FOLLOWED SUIT WITH ROYALTY TRUSTS. SOMEONE SAID WE SHOULD HAVE COPYRIGHTED THE CONCEPT. WELL, I WANT TO TAKE THIS OPPORTUNITY TO PUBLICLY ANNOUNCE FOR THE FIRST TIME THAT WE HAVE A COPYRIGHT, WE WILL CONTINUE TO INTERPRET AND TAKE ADVANTAGE OF REGULATORY CHANGES AND CHANGING POLITICAL CLIMATES THROUGHOUT THE WORLD.

{STRICKEN TEXT: AS IN THE PAST, WE WILL CONTINUE TO TAKE ADVANTAGE OF HIGH POTENTIAL OPPORTUNITIES SUCH AS INFILL DRILLING, OFFSHORE AREAS AND THROUGH ACQUISITIONS. ALL OF THESE ACTIVITIES ARE MEANS BY WHICH MESA CAN EXPAND ITS RESERVES.}

[HANDWRITTEN ADDITION: WE BELIEVE THAT OUR CO. HAS BEEN THE LEADER IN RECOGNIZING THE IMPORTANT OF REPLACING RESERVES- WE OFFER OUR STOCKHOLDERS THE BEST CHANCE IN THE INDUSTRY FOR NOT ONLY REPLACEMENT BUT ENHANCMENT BY RUNNING A $400 MILLION BUDGET, DRILLING HIGH POTENTIAL PROSPECTS DEVELOPED BY A SUPERIOR EXPLORATION GROUP. THANK YOU]