TEXACO <TX> SAYS MARKET DROP MAY AFFECT TALKS
Texaco Inc chairman Alfred DeCrane said
the massive stock market correction could affect any out of
court settlement of the company's 10.3 billion dlr legal
dispute with Pennzoil Co <PZL>.
    However, DeCrane refused to say whether the two companies
were holding any settlement negotiations.
    "Certainly the market shakeout might affect the way this is
handled," DeCrane told reporters following a speech at a
meeting of the International Association of Drilling
Contractors.
    "In this environment, cash looks very important."
    DeCrane declined to say whether Texaco and Pennzoil had
held any recent settlement talks, citing a confidentiality
agreement between the two companies.
    "A few months ago Texaco offered 100 mln dlrs cash, no
strings attached just to take this appeal to the Texas Supreme
Court," DeCrane said. He was referring to a non-settlement
proposal that would have eliminated the threat of Pennzoil
filing liens, or ownership rights, against Texaco property
before the company filed for bankruptcy protection in April.
    "I think that (the offer) looks pretty good now to a
Pennzoil shareholder whose stock is trading around 30 or 40."
    Settlement talks between the two companies reportedly broke
down earlier this year after Pennzoil insisted it would not
settle for less than four billion dlrs.
    Since then, Texaco has asked the Texas State Supreme Court
to review the 10.3 billion dlr judgment against it.
    DeCrane also said it was not clear if the stock market drop
could spur further consolidation in the oil patch.
    "We know the value is there. The market fluctuation has not
changed the value of the underlying assets," DeCrane said
of publicly traded U.S. oil companies.
 Reuter
