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	T. BOONE PICKENS, JR. TBP SPEECH INSTITUTIONAL INVESTOR CONFERENCE NEW YORK, NEW YORK MAY 28, 1981

THURSDAY,

4:30 P.M.

[HANDWRITTEN ADDITION: TO GROUP: HOW DID WE GET SUCH A NEAT SPOT ON THE CARD? I DO APPRECIATE YOUR STAYING WITH US THIS EVENING. COMPLIMENT JACK AND AL, THEY ARE IN SEVERAL BUSINESSES- WE ARE IN ONLY ONE- E&P]

I. SINCE MOST OF YOU ARE FAMILIAR WITH MESA'S {STRICKEN TEXT: HISTORY} [HANDWRITTEN ADDITION: PAST YEAR & 1ST QUARTER] I WOULD LIKE TO UPDATE YOU ON OUR CURRENT ACTIVITIES. [UNREADABLE STRICKEN TEXT].

A. UNDEVELOPED ACREAGE—SLIDE 1

1. THIS IS A MUST SLIDE WE HAVE BEEN USING FOR 16 YEARS. WE HAVE ALWAYS FELT THAT A QUALITY ACREAGE POSITION IS BASIC TO EXPLORATION SUCCESS.

A. IN CANADA, MESA RETAINED A 12.5% GROSS ORRI 2 IN 1.2 MILLION ACRES IN 1979. THIS EQUALED A 50% WORKING INTEREST OR THE EQUIVALENT OF 600,000 NET ACRES.
(1) DURING 1980 AND THE FIRST QUARTER OF 1981, 67 OUT OF 109 WELLS DRILLED ON THE ACREAGE BY DOME, THE PURCHASER, WERE SUCCESSFUL FOR A 61% DRILLING SUCCESS.
(2) {STRICKEN TEXT: AS A RESULT OF THIS DRILLING ACTIVITY, THE COMPANY NOW HOLDS A 12.5% GROSS ORRI IN APPROIMATELY 1.18 MILLION UNDEVELOPED ACRES.}
(3) MESA WENT TO CANADA IN 1959 WITH $35,000 AND SOLD OUT IN 1979 FOR OVER $600 MILLION.
B. INTERNATIONAL ACREAGE I S PRIMARILY IN WESTERN AUSTRALIA AND A SMALL AMOUNT IN THE GERMAN NORTH SEA. AT YEAR-END 1980, MESA OWNED 502,400 NET ACRES IN WESTERN AUSTRALIA. THE COMPANY HAS ACQUIRED NEW PERMITS BRINGING ITS TOTAL NET ACRES IN AUSTRALIA TO OVER 1 MILLION.
C. MESA'S 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 APPROXIMATE 1.9 MILLION ACRES IN THE 1980 U.S. UNDEVELOPED ACREAGE, THE HATCHERED AREA REPRESENTS TEXACO'S AND SEQUOIAS 35% INTEREST IN MTS LIMITED. THE REMAINDER, WHICH IS VIRTUALLY ALL IN THE PARTNERSHIP, REPRESENTS MESA'S SHARE OR ITS NET ACREAGE AFTER FORMATION OF THE PARTNERSHIP. NOTICE THAT THE COMPANY'S 1981 NET ACREAGE IS AGAIN INCREASING.

B. OIL AND GAS EXPENDITURES—SLIDE 2

1. To CONTINUALLY REPLACE PRODUCTION REQUIRES A QUALITY ACREAGE POSITION AND AGGRESSIVE EXPLORATION- BOTH REQUIRE SUBSTANTIAL CAPITAL BUDGETS.

A. MESA SPENT OVER $320 MILLION IN 1979, INCLUDING $28 MILLION FOR CANADA AND $10 MILLION FOR THE BEATRICE FIELD PRIOR TO THE SALES.
B. THE COMPANY'S CAPITAL EXPENDITURES FOR 1980 WERE $400 MILLION WHICH INCLUDED $133 MILLION AT THE OFFSHORE SALE LAST NOVEMBER.
C. OUR 1981 CAPITAL EXPENDITURES ARE ESTIMATED AT OVER $400 MILLION WHICH DOES NOT INCLUDE ANY OFFSHORE ACREAGE PURCHASES WHICH MIGHT BE MADE.
D. NOTE THE INCREASES IN EXPLORATORY DRILLING FOR 1979, 1980 AND 1981.

C. TEN LEADING OPERATORS RANKED BY NEW FIELD WILDCATS DRILLED—SLIDE 3

1. THIS SLIDE IS INDICATIVE OF MESA'S AGGRESSIVENESS. ACCORDING TO PETROLEUM INFORMATION'S 1980 ANNUAL REVIEW, THE COMPANY RANKED IN THE TOP 10 IN NUMBER OF NEW FIELD WILDCATS DRILLED DURING 1980 AND HAD THE HIGHEST PERCENTAGE OF DRILLING SUCCESS.

D. MESA'S SUCESS AT REPLACING RESERVE AS SHOWN IN A RECENT REPORT BY L. F. ROTHSCHILD ON THE PERCENTAGE OF ANNUAL PRODUCTION REPLACED BY THE MAJOR COMPANIES IN THE INDUSTRY.

1. IN 1980, MESA WAS No. 1 IN THE PERCENTAGE OF NATURAL GAS PRODUCTION REPLACED AND No. 2 IN THE PERCENTAGE OF LIQUIDS REPLACED WHEN COMPARED TO 18 MAJORS.
2. THE COMPANY WAS ALSO EITHER No. 1 OR No. 2 IN BOTH CATEGORIES FOR 1979 AND 1978.

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

1. MESA'S AGGRESSIVE DRILLING ACTIVITY IS REFLECTED IN THE COMPANY'S LATEST DRILLING REPORT—68 TOTAL WELLS OF WHICH 44 ARE MESA OPERATED. THE TOTAL INCLUDES 17 WELLS DRILLING TOWARD OBJECTIVES BELOW 15,000 FEET OF WHICH 10 ARE MESA OPERATED.
2. I WOULD LIKE TO REVIEW SOME OF OUR WELLS OF SPECIAL INTEREST.

F. GULF COAST-BIG HUM TREND—SLIDE 5

1. MESA IS CONTINUALLY ADDING TO ITS ACREAGE POSITION WITH PURCHASES SUCH AS BRAZOS A-39 AND A-7 (MESA 50%) ACQUIRED LAST NOVEMBER IN THE BIGENERINA HUMBLEI TREND, COMMONLY KNOWN AS THE BIG HUM, WHERE SEVERAL GAS DISCOVERIES HAVE BEEN ANNOUNCED BY OTHER COMPANIES. WE BELIEVE THE BIG HUM MAY BE AS BIG A PLAY AS THE TUSCALOOSA IN SOUTHERN LOUISIANA.

A. SHELL'S A-20 GAS FIELD HAD 300-400 FEET OF [UNREADABLE STRICKEN TEXT] MIOCENE (BIG HUM) PAY.
B. WE ARE CURRENTLY DRILLING BELOW 13,500 FEET ON BRAZOS A-7 (MESA 50%) TOWARD 17,165 FEET.
C. ON BRAZOS A-39 (MESA 50%, A 20,000-FOOT TEST, WE ARE DRILLING AT APPROXIMATELY 8,700 FEET.
D. BRAZOS 542 No. 3 (MESA 65%), A 19,000-FOOT TEST, {STRICKEN TEXT: WAS REACHED} [HANDWRITTEN ADDITION: FISHING AT] BELOW 14,500 FEET.

G. ONSHORE—GULF COAST—SLIDE 6

1. THE CROWN ZELLERBACH No. 1 (MESA 100%) IS READY TO START UNLOADING AND CLEANING UP. TESTING OF THE AUSTIN CHALK SHOULD BEGIN IN APPROXIMATELY TWO WEEKS.
2. THE NO. 3 (MESA 100%) IS A 16,500 FOOT AUSTIN CHALK TEST WHICH WILL COMMENCE DRILLING AS SOON AS THE RIG IS RELEASED FROM THE NO. 1.

H. OKLAHOMA-TEXAS—SLIDE 7

1. IN BECKHAM COUNTY, OKLAHOMA, THE CROOK NO. 1-32 (MESA 63.5%), A 19,000-FOOT GAS DISCOVERY IN THE MORROW SPRINGER FORMATION, IS CURRENTLY PRODUCING AT APPROXIMATELY 3.3 MILLION CUBIC FEET PER DAY WITH 9,800 PSI TUBING PRESSURE.
2. THE TIPTON No. 1-29 (MESA 46.1%), LOCATED ONE MILE NORTH OF THE CROOK, IS CURRENTLY DRILLING BELOW 17,000 FEET ENROUTE TO A 26,000-FOOT HUNTON OBJECTIVE.
3. THE COX No. 1-34 (MESA 58.1%) LOCATED THREE MILES SOUTHEAST OF THE CROOK AND ALSO A 26,000-FOOT HUNTON TEST, HAS BEEN ABANDONED DUE TO MECHANICAL FAILURE AFTER REACHING 16,500 FEET. A RELIEF/ REPLACEMENT WELL IS PLANNED.
4. IN WEST TEXAS, THE UNIVERSITY NO. 42-20 (MESA 50%) WAS A DUAL DISCOVERY IN THE FUSSELMAN AND ELLENBURGER FORMATIONS WHICH IS PRODUCING AT A RATE OF 4.2 MILLION CUBIC FEET OF GAS PER DAY. THIS GAS IS SELLING FOR {STRICKEN TEXT: APPROXIMATELY} $8.26 PER MCF.
5. THE NIVERSITY No. 43-20 (MESA ,6%), A 22,000- FOOT DEVELOPMENT WELL, IS DRILLING BELOW 11,500 FEET.
6. THE CERF RANCH N0, 1-9 (MESA 16.3%), A 29,500-FOOT ELLENBURGER TEST IN PECOS COUNTY, HAS CASING SET TO 24,655 FEET [UNREADABLE STRICKEN TEXT]

I. WYOMING—SLIDE 8

1. IN SUBLETTE COUNTY, WYOMING, THE RILEY RIDGE FEDERAL No, 5-24 (MESA 40%) WAS A GAS DISCOVERY WHICH ENCOUNTERED 165 FEET OF NET PAY IN THE MADISON AND TESTED GAS CONTAINING 19% METHANE AND 70% CARBON DIOXIDE AT A DAILY RATE OF 12,3 MMCF, THE BIGHORN FORMATION TESTED GAS CONSISTING OF 92% CARBON DIOXIDE, 6% NITROGEN AND 1% METHANE AT A DAILY RATE OF 1.9 MMCF.
2. THE RILEY RIDGE No. 10-14 (MESA 40%) IS NOW DRILLING BELOW 14,500 FEET TOWARD A 16,900-FOOT BIGHORN OBJECTIVE.
3. IN THE UINTA COUNTY PORTION OF THE OVERTHRUST BELT, THE UTELAND FEDERAL NO. 1-35 (MESA 27.3%) IS AWAITING A COMPLETION RIG FOR ADDITIONAL TESTING. [HANDWRITTEN ADDITION: LOOKS BAD]
4. IN THE SAME AREA, THE URROZ N0, 1-5 (MESA 32.5%) A 16,000-FOOT NUGGET EXPLORATORY TEST, IS DRILLING BELOW 6,500 FEET.

J. WESTERN AUSTRALIA—SLIDE 9

1. SEISMIC OPERATIONS WILL SOON BEGIN ON WA-149-P, A 1.2 MILLION ACRE PERMIT (MESA 20%) WHICH IS ADJACENT TO THE BARROW ISLAND OIL FIELD IN THE CARNARVON BASIN. THE WARRADONG No. 1 (MESA 25%), LOCATED FOUR MILES EAST OF THE DONGARA GAS FIELD, HAS BEEN PLUGGED AND ABANDONED AFTER ENCOUNTERING NONCOMMERCIAL QUANTITIES OF GAS.

K. MESA LOGO—SLIDE 10

1. WE ARE IN ALL THE RIGHT AREAS—THE BIG HUM AND TUSCALOOSA TRENDS, THE DEEP ANADARKO AND PERMIAN BASINS, THE OVERTHRUST, OFFSHORE LOUISIANA AND TEXAS AND WESTERN AUSTRALIA.

L. I WILL CLOSE BY BRIEFLY RECAPPING MESA'S CORPORATE PHILOSOPHY.

A. 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.

B. MESA WAS ONE OF THE EARLY COMPANIES TO RECOGNIZE THE POTENTIAL IN CANADA AND ALSO REALIZED THE CHANGING POLITICAL CLIMATE THERE AS WELL AS IN THE UNITED KINGDOM WHICH HAS SUBSEQUENTLY JUSTIFIED OUR LEAVING.

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

D. 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.

E. MESA'S MANAGEMENT WILL CONTINUE TO BE INNOVATIVE IN DEVELOPING NEW IDEAS SUCH AS THE ROYALTY TRUST CONCEPT CREATED AS A MEANS OF ENHANCING THE VALUE OF THEIR SHAREHOLDERS' ASSETS. I BELIEVE THIS CONCEPT WILL EVENTUALLY BE ADOPTED BY THE MAJORITY OF THE INDUSTRY.

(1) MESA HAS LONG BEEN A LEADER IN RECOGNIZING THE IMPORTANCE OF REPLACING RESERVES—WE OFFER OUR STOCKHOLDERS THE BEST CHOICE IN THE INDUSTRY FOR NOT ONLY REPLACEMENT BUT ENHANCEMENT BY RUNNING A $400 MILLION PLUS BUDGET AND DRILLING HIGH POTENTIAL PROSPECTS.

THANK YOU.