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FOR IMMEDIATE RELEASE
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New Orleans — The most misunderstood aspect of current merger activity in the petroleum industry is what effect it will have on companies’ exploration efforts, said T. Boone Pickens, Jr., president and chairman of the board of Mesa Petroleum Co., in a speech today before the Louisiana Association of Independent Producers & Royalty Owners.
“I continue to hear comments that [Handwritten addition: mergers &] acquisition[Handwritten addition: s] [Text stricken: activity] will [Text stricken: take away money] [Handwritten addition: dry up funds] that could be used for [Text stricken: drilling,] [Handwritten addition: exploration] and that simply is not the case,” said Pickens. He explained that “There’s plenty of money in the industry to drill all the economically [Text stricken: and technically] feasible prospects that exist.”
Pickens stressed that current merger [Text stricken: and acquisition] activity is part of a vital [Text stricken: and urgent] restructuring in the industry, brought on by stabilized oil prices and a depleting domestic reserve base.
“Markets and finding costs for oil and gas have changed significantly from what they were 10 years ago. This industry is struggling to make adjustments so that it can operate profitably in this new environment,” he said. “Decisions on acquisitions should be left to the people who own companies — the shareholders.”
However, Pickens said, too many people, including some [Handwritten addition: prof. Managers &] Congressional leaders, don’t consider shareholders the owners of the company—Instead, they believe a “handful of managers are the owners. This is a fundamental misconception about the way publicly—owned businesses operate. If we are going to have legislation, then why not propose something that would protect stockholders from management?”
Pickens said that he was intrigued by Louisiana Senator Bennett Johnston’s proposed legislation against [Handwritten addition: oil industry] mergers[Handwritten addition: .] [Text stricken: in the oil industry.] “He’s sending the oil industry a signal. The message is that he’s leaving us. In case you missed it, the message came in the form of a bill he co-authored with [Text stricken: an historically] anti-oil Senator, Howard Metzenbaum.
“I can’t believe that there is anything less than a political motive behind his proposed legislation against [Handwritten addition: the oil industry,] shareholders and the free enterprise system. It appears to be a [Text stricken: totally] political move to place himself on anyone’s Democratic ticket as a vice presidential candidate in the 1984 elections.”