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TEXACO, LOUISIANA AGREE TO SETTLE ROYALTY DISPUTE

Feb. 14, 1994

Texaco Inc. has agreed to an out of court settlement to end a long royalty dispute with Louisiana. The state's claims against Texaco for alleged underpayment of royalties on state gas leases and interest had totaled about $1.1 billion. In the settlement, Texaco agreed to pay Louisiana $250 minion in three payments during 1994 96 and to undertake projects in Louisiana that will result in outlays of about $152 million the next 5 years for expanded activity on state owned oil and gas

Texaco Inc. has agreed to an out of court settlement to end a long royalty dispute with Louisiana.

The state's claims against Texaco for alleged underpayment of royalties on state gas leases and interest had totaled about $1.1 billion.

In the settlement, Texaco agreed to pay Louisiana $250 minion in three payments during 1994 96 and to undertake projects in Louisiana that will result in outlays of about $152 million the next 5 years for expanded activity on state owned oil and gas properties.

The expansion program essentially entails outlays beyond what Texaco would have spent on Louisiana E&D, currently averaging about $40 million/year. Involved are drilling projects, 3D seismic surveys, carbon dioxide enhanced oil recovery, and workovers across South Louisiana. Of special note is a Pilot CO2 EOR project for Garden Island Bay, field incorporating 3D seismic surveys. If successful, the pilot is likely to be duplicated in other South Louisiana fields.