Los Angeles-based ARCO said after-tax special charges in thefourth quarter are expected to total $890 million. Net chargeincludes asset write-downs, restructuring costs, and a tax refund.Asset write-downs are a result of investment impairments totaling$790 million after tax and mainly related to expectations of lowercrude prices. Properties involved include some assets acquired aspart of the Union Texas Petroleum (UTP) purchase and other assetsin the UK North Sea, Middle East and North Africa. Essentially allof the oil and gas properties impacted are overseas.

The charges include restructuring costs of $180 million aftertax for the global cost reduction program ARCO announced inOctober. The program is designed to reduce before-tax costs by morethan $500 million by 2000. ARCO said 1,200 employees, up from theoriginal estimate of 900, will be terminated as part of theprogram. In addition to the cost reduction program, ARCO announcedin December that its capital spending plans for 1999 call forreduced spending worldwide. The company said it expects to spend$2.7 billion worldwide in 1999, down 25% from the 1998 spendinglevel.

Also included in the 1998 fourth quarter special items will be anet benefit of $80 million, which includes a federal income taxrefund in excess of $100 million.

More bad news came last week from Tulsa. OK-based ParkerDrilling Co. reported unaudited a net loss of $7,658,000, or a $.10loss per diluted share for the three months ended Nov. 30. Theprior year’s results for the same quarter reflect net income of$10,682,000, or $.14 per diluted share. “The industry continues toexperience the effects of the most dramatic drop in energy pricessince the 1980s,” said Robert Parker, CEO. “Parker’s strategy is tocurtail costs and concentrate our marketing efforts in areasshowing greatest potential.

Parker is changing its fiscal year-end from Aug. 31 to Dec. 31,effective Dec. 31, 1998. Parker specializes in barge and offshoredrilling and workover services, land drilling, and specialized oiltool rentals.

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.