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	NOTES FOR FORTUNE CORPORATE COMMUNICATIONS SEMINAR APRIL 9, 1984

RESTRUCTURING IS VITAL TO THE INDUSTRY’S HEALTH.

SOME OPPOSITION IN CONGRESS STEMMING FROM A BASIC MISUNDERSTANDING OF INDUSTRY ECONOMICS AND OPERATIONS

THE PETROLEUM INDUSTRY FACES UNIQUE SITUATION
          —DEPLETABLE ASSETS
          —10-YEAR RESERVE LIFE INDEX

RESERVE REPLACEMENT HAS BEEN A PROBLEM SINCE 1970
          —1982: MAJORS 63%, INDEPENDENTS 108%

AVAILABILITY OF CASH IS NOT A PROBLEM.

INTERNAL STUDY AT MESA
          —300 COMPANIES
          —FROM 1980-1982 SPENT $166 BILLION AND FOUND $109 BILLION OF RESERVES
          —RECEIVED 66 CENTS FOR EACH DOLLAR SPENT
          —EXPLAINS WHY ACQUISITION OF RESERVES IS ATTRACTIVE

THE ECONOMIC PROSPECTS AREN’T THERE.

AT MESA
          —FOCUS ON OIL PROSPECTS
          —TRIMMED BUDGET TO $100 MM
          —PURSUING UNDERVALUED ASSETS

SHAREHOLDERS COME FIRST
          —THEY ARE THE OWNERS OF THE COMPANY
          —INVEST CAPITAL TO ENHANCE SHAREHOLDERS’ VALUE

CURRENT MERGER ACTIVITY
          —WILL BENEFIT SHAREHOLDERS, CONSUMERS, GOVERNMENT AND THE NATION
          —ASSETS FLOWING TO STRONGER MANAGEMENTS

RESTRUCTURING IS THE FREE ENTERPRISE SYSTEM WORKING TO CORRECT INEFFICIENCIES.