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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: marc chatman who wrote (32149)	11/26/1998 10:32:00 AM
From: sportsman	Read Replies (1) \| Respond to of 95453

Marc, I am wondering the same thing. Here is a news release: Exxon Must Drill Deep For Merger Benefits By Andrew Callus LONDON (Reuters) - An Exxon Corp takeover of Mobil Corp (NYSE:MOB - news) would be easily the largest ever industrial deal, but harsh drilling conditions stand between the U.S. oil giants and the mammoth cost savings they are looking for. Nevertheless, Exxon's high stock rating means it can pay a premium for the business it split from with the breakup of Standard Oil early this century, analysts said Thursday. ''This looks more likely to go ahead than not,'' said Commerzbank analyst Jeremy Elden. Sources close to the deal said earlier that the two are in talks about an all-share deal that would eclipse the $55 billion BP-Amoco merger announced in the summer as the world's biggest industrial takeover. The merger could produce cost savings well above the $2 billion dollars a year targeted by BP and Amoco, but Exxon faces problems that BP does not, analysts said. ''Exxon is so much bigger than Mobil it will have to account the deal as a takeover, not a merger of near equals, which means it will have to write off goodwill,'' said analysts at Merrill Lynch. Commerzbank's Elden said anti-trust will also be a problem, especially in European downstream oil markets, where Exxon's own presence and an existing BP-Mobil joint venture represents a significant market share for the planned pairing. Untangling joint ventures with other companies -- not least the BP-Mobil European venture that cuts across the two ''superleague'' deals -- will be an added complication. ''Merging the downstream is where the challenge is going to be,'' said one oil industry finance expert. ''In refining and marketing those two companies are very large and they have agreements with other companies... How do they disentangle all those agreements?'' Exxon has exploration and/or production operations in 30 countries around the world and downstream businesses that generate about half its income span 75 countries. Mobil has a similar structure and is just under half Exxon's size in terms of income and reserves, but its market capital is just $60 billion compared with higher-rated Exxon's 176 billion. Tony Alves of Henderson Crosthwaite said ''Exxon over the last couple of years has put in some pretty impressive performances in very weak markets. I guess they will probably try and apply the magic they have to the (Mobil) portfolio but it'll be a pretty tough thing to do.'' More deals could be on the way, particularly in the U.S. in a sector whose agenda is driven by the reality of oil prices at 25 year lows in real terms, meaning cost-savings are even more important as a source of earnings growth. The deal sparked European oil shares higher as the Exxon talks turned up the heat under other companies to form similar tie-ups. Peter Hitchens at Williams de Broe said if the deal went ahead, it should open the way for more mergers, particularly with the other U.S. oil companies. Royal Dutch/Shell has long been cited as in a position to take over a rival, and its shares rose by 3.33 percent to 365 pence in London and by 1.74 percent in Amsterdam to 93.60. In Paris, Total jumped 5.66 percent to 691 francs and Elf rose 4.28 percent to 731.

To: marc chatman who wrote (32149)	11/26/1998 6:39:00 PM
From: marc chatman	Read Replies (2) \| Respond to of 95453

Thursday November 26 3:38 PM ET OPEC Fails To Reach Agreement By DIDI KIRSTEN TATLOW Associated Press Writer VIENNA, Austria (AP) - OPEC failed to reach even a basic agreement to extend oil production cuts, saying Thursday at the close of a testy year-end meeting that it would review the situation again in March. . . . . dailynews.yahoo.com Thursday November 26 2:49 PM ET Unruly OPEC Proves Unfit To Fight Oil Slump By Richard Mably VIENNA, Austria (Reuters) - OPEC oil producers Thursday turned their back on a crippling price crash, failing to agree any new policy on supply limits to ease the world's huge petroleum glut. . . . . dailynews.yahoo.com Sounds like things got pretty ugly.