Word: mesas
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Dates: during 1980-1989
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...distance tower the Abajo Mountains. Spread out below is an immense rock garden, burnished red and brown and buff. The sun bursts through the clouds, first lighting the Six-Shooter Peaks, then Cathedral Butte. The Colorado and Green rivers meander deep in the shadows, carving their signatures into the mesa with canyons 1,200 ft. deep. Five miles away, the joined rivers let out a thunderous roar, but up here all is silence. The space is awesome, the stillness complete, the solitude absolute...
...Mesa Petroleum of Amarillo last year put 55% of its $1.1 billion worth of oil and gas wells into a trust. Wall Street's response was sharp; in less than two months the stock shot up from $40 to $66. Some brokers had hitherto respected Mesa as a well-run company, but felt that it had too many large tracts of older wells. Aggressive investors usually look for small firms with assets concentrated in new drilling fields. By unloading its aging wells, Mesa transformed its image to that of a lean and hungry company oriented toward exploration...
Mastermind of the tax tactic is Mesa Chairman T. Boone Pickens Jr., 52, who majored in geology at Oklahoma State and started his own oil-producing firm in 1954 on a shoestring investment of $2,500. He has built Mesa into a company with 1979 revenues of $270 million and has amassed a personal fortune of more than $70 million. The biggest beneficiary from tax breaks on Mesa's trust fund will be Pickens. He owns 500,000 shares worth $20.5 million...
Other imitators of Mesa have already appeared. Southland Royalty of Fort Worth will soon put 50% of its $3 billion in oil and gas holdings into trust. Within a week after that announcement was made, South land's stock rose 46%, to $102. In a variant of Pickens' idea, Houston Oil & Minerals set up a trust combining older wells and an interest in 40 major prospects, mostly how the Gulf of Mexico. Instead of giving the shares to its stockholders, how ever, thereby Oil & Minerals sold them on the open market. The firm thereby raised $60 million, which...
...analysts believe that several other companies, including General American the of Texas and Marathon Oil of Ohio, are likely to follow the Mesa or Houston examples. As the exploration boom heats up, many firms may be anx ious to jettison old wells and concentrate on wild-cat drilling. One uncertainty about the trusts: the Internal Revenue Service has yet to rule on the tax benefits that will shower on shareholders. Until then, Texas tycoons will continue drilling through this large loophole...