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	FOR IMMEDIATE RELEASE Contact: John F. Boros, vice president (806) 378-1003 March 15, 1984

CHICAGO — Restructuring in the oil industry is the free enterprise system at work, said T. Boone Pickens, Jr., president and chairman of the board of Mesa Petroleum Co., in a speech today before The Investment Analysts Society of Chicago.

“What we’re seeing in the way of acquisitions and mergers is the oil industry utilizing the free enterprises system to put its own house in order,” said Pickens. “This is the best economic system in the world, and if it is allowed to work, everyone will benefit—shareholders, consumers and government.”

Pickens said that proposed legislation in Congress to place a moratorium on mergers in the petroleum industry was a rushed response to Standard Oil Company of California’s $80-a-share bid for Gulf: “The argument is that mergers between large oil companies will hurt the consumer and national energy security [Handwritten addition: is unfounded.] I don’t see any harm coming from this deal.” [Text stricken: The only harm will come to the 270,000 Gulf shareholders and their families who stand to lose 5.7 billion if Congress scuttles the deal.]

He said that consumers would not be adversely affected because the combination of Socal and Gulf would not increase prices at the gas pump. “The price of gasoline isn’t arbitrarily determined by big oil companies. It is directly linked to the price of oil. And the price of oil is not even determined inside the United States. It’s determined by OPEC,” said Pickens.

He added that the consolidation of the combined companies’ downstream operations would be beneficial because the United States already has too much refining capacity.

Speaking to the national security issue, Pickens said that although critics have said that the $13.4 billion which will be used to buy Gulf would be better spent on oil exploration, that course would quickly ruin the industry financially.

“If oil companies were told to take all the money available to them and search for all the oil and gas they could find, the industry would quickly go broke because there are not enough economically viable prospects available. And if we’re asked to find petroleum at any cost, the consumer will have to bear the economic burden,” said Pickens.

Pickens stressed that restructuring in the oil industry must take place and that legislation to stop restructuring will not benefit the nation.

“If the industry is left to restructure itself, in the end consumers and the nation will benefit because the industry will be more efficient ark viable,” he said.

Pickens added that he was concerned about the proposed legislation because “it is aimed directly at a specific group of people that are the cornerstone of the free enterprise system—the stockholders. [Handwritten addition: If Congress scuttles the organization, 270,000 Gulf shareholders and their families stand to lose billions of dollars.] The general idea in Congress is that if someone is making money, that has to be bad.

“But what Congress fails to see is that the money going to Gulf stockholders won’t just disappear. Instead, it will be reinvested in the oil and gas industry, placed in savings accounts, used to purchase a new [Handwritten addition: car] or make a downpayment on a home. A large portion of that money will be put right back into the economy, and another big portion will go to the government in the form of tax revenues.”

He said that when stockholders made their investment, they expected to make money on it. “But now they’re told that they might not be able to exercise their right to get the maximum value for their investment under the free enterprise system. That doesn’t make much [Handwritten addition: sense] to them.

“What’s even more frightening is that this kind of legislative thinking could spill over and be passed against other industries. And that has unbelievable implications,” added Pickens.

He cited a New York Stock Exchange survey conducted in mid-1983 which found that one out of every six Americans is a stockholder in a publicly-owned company.

“Who are those 42 million people?” Pickens asked. “They’re voters and taxpayers just like you and me. And it’s obvious that some members of Congress care little about their interests.”