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A Monumentally Forgettable Quarter

A Monumentally Forgettable Quarter

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 quarter decline in crude and natural gas prices was blamed for the earnings fall-off, Texaco Chairman Peter I. Bijur found a positive sign for the rest of the year in the fact that "prices have strengthened significantly."

Texaco's first quarter net income without special items was $105 million this year compared to $259 million for the quarter last year. With special items the 1Q net for 1999 was $199 million compared to $234 million last year. Phillips had a first quarter net without special items of $18 million versus $171 million for 1Q'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. Crude oil fared worse, however, at $9.11/barrel which is 23% below last year's $11.78. Natural gas production in the U.S. was down in the quarter just ended to about 1.5 Bcf/d compared to 1.7 Bcf/d in 1Q'98. Bijur said the lower production was the result of reduced capital spending.

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

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