Texaco reported a 60% drop and Phillips registered an 89%decline in first quarter net income, excluding special items,compared to the first quarter of 1998. While the first quarterdecline in crude and natural gas prices was blamed for the earningsfall-off, Texaco Chairman Peter I. Bijur found a positive sign forthe rest of the year in the fact that “prices have strengthenedsignificantly.”

Texaco’s first quarter net income without special items was $105million this year compared to $259 million for the quarter lastyear. With special items the 1Q net for 1999 was $199 millioncompared to $234 million last year. Phillips had a first quarternet without special items of $18 million versus $171 million for1Q’98. With special items net income was $70 million, down from$243 million in 1Q’98.

In the U.S. Texaco realized an average natural gas price of$1.79/Mcf, a figure 16% lower than the $2.14/Mcf a year ago. Crudeoil fared worse, however, at $9.11/barrel which is 23% below lastyear’s $11.78. Natural gas production in the U.S. was down in thequarter just ended to about 1.5 Bcf/d compared to 1.7 Bcf/d in1Q’98. Bijur said the lower production was the result of reducedcapital spending.

Phillips realized an average gas price of 1.60/Mcf in thequarter just past versus 1.98/Mcf a year ago. Crude oil brought inan average $9.93, down from $12.20 in 1Q’98. Phillips productionalso was down to 982 MMcf/d from 991 MMcf/d a year ago.

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