TEXACO <TX> RESERVES DOWN DESPITE LOWER OUTPUT
Texaco Inc's oil and gas reserves
declined in 1986 despite reduced production and upward
revisions in the company's previous reserve estimates, its
annual report said.
    The statement of the report's auditor was qualified -- as
was the previous one -- because of the unkonwn final impact of
the judgement won by Pennzoil Co <PZL> against Texaco on
charges Texaco interfered with Pannzoil's contract to acquire
Getty Oil Co.
    The auditor's point out, as Texaco has in the past, the
company's loss of any of several pending court decisions in
this case could cause it "to face prospects such as having to
seek protection of its assets and business pursuant to the
bankruptcy and reorganization provisions of Chapter 11" of the
federal bankruptcy code.
    Commenting on a Texas Court of Appeals ruling which reduced
Pennzoil's judgement by two billion dlrs, to 9.1 billion dlrs,
Texaco said it will file a motion for a rehearing by the
appeals court no later than March 30.
    Texaco said the proven crude oil reserves of the company
and its consolidated subsidiaries totaled 2.54 billion barrels
at the end of 1986, down from 2.69 billion a year earlier.
    However, inclusion of Texaco's equity in the Eastern
Hemisphere reserves of a nonsubsidiary company limited the
decline to 2.91 billion barrels from 3.00 billion at the end of
1985.
    Worldwide production by the consolidated subsidiaries
declined to 341 mln barrels last year from 362 mln in 1985 and
upward revisions in previous reserve estimates rose to 143 mln
barrels from 117 mln, respectively.
    Texaco said the largest drop in reserves came in the United
States -- where the total dropped to 1.46 billion barrels from
1.55 billion.
    The company said U.S. liquids production averaged 660,000
barrels per day last year, down from 714,000 in 1985, with
about 44 pct of the decline -- some 24,000 barrels per day --
representing high-cost production shut-in or curtailed in
response to the decline in crude oil prices during 1986.
    Texaco said its natural gas reserves totaled 8.16 trillion
cubic feet at year end, down from 8.87 trillion cubic feet at
the end of 1985.
 Reuter
