The Front Runners
Fools provide their early oil picks

by Brian Graney (TMFPanic)

ALEXANDRIA, VA (Oct. 28, 1998) -- I'll be taking the Drip Port helm from Captain Jeff for the next couple of days as we steer our investing boat into the choppy waters of the Sea of New Investments. Hopefully, I'll have luck on my side and do a better job than the unfortunate skipper of the Exxon Valdez.

Speaking of Exxon, that company was mentioned more often than any other on the Drip message boards over the past two days. It seems that most DRP-pers out there are leaning toward the integrated oil and gas production/exploration companies as our next area of study, with a noticeable preference on the sector's heavyweights. Here's a quick listing of the firms garnering the most votes so far (in no particular order), which has been cross-checked with diceboy1's quite Foolish oil and gas DRP list:

British Petroleum
Occidental Petroleum
Atlantic Richfield
USX/Marathon Group
Apache Corp.
Amerada Hess

That's a baker's dozen and represents a pretty good start. If we're missing any other integrated oil and gas firms with DRPs here, please don't flame us yet. This is a work in progress, so give us some time to sort everything out. We'll consider all comers, as long as they have DRPs (preferably with low or no fees).

A few other oil and gas firms were mentioned -- such as Royal Dutch/Shell, Ultramar Diamond Shamrock, and Conoco -- which will require some more research on our part.

Conoco is currently being spun-out of DuPont, and we're not sure whether a DRP program is in the works there. DuPont has a DRP (with fees), but that doesn't mean Conoco will have one right away. Ultramar is an oil refiner and marketer, so we hesitate to include the firm with the rest of the integrated group even though they have a DRP with no fees. Still, the company may warrant some investigation. Royal Dutch has a DRP for its American depositary shares on the NYSE -- the method by which most foreign-based companies list their shares in the U.S. markets. This is also the case with BP and its DRP, by the way.

Owning the Fool's first foreign-based company would be cool, but the idea merits some special consideration on our part. An added twist with Royal Dutch is its sister company, Shell Transport & Trading, which owns the other 40% of the Royal Dutch/Shell Group not owned by Royal Dutch. Shell has its own DRP, too. But the fees for its DRP are different than those for Royal Dutch's plan, leaving us to decide which company and which plan offers the better deal. How convenient.

Any insight into the "unknowns" surrounding these three companies or any others is welcomed, since I'm still trying to get my sea legs under me on board this oil and gas industry tanker. (I think Jeff is in the same boat as well, but don't tell him I said that!) But fear not, Fools. We plan to learn as much as we can about this industry over the next few months -- with your help, of course. With any luck, we will be able to a find company together which we think is attractive from an investment stand-point, jump on board their DRP, and set sail for the high seas of superior investment performance.

But before we can do that, we need to define our parameters a bit and conduct some more Foolish fact-finding. I'll be back tomorrow with some thoughts on what I personally would like to look at in the energy sector as a whole, including a few firms not listed above which don't fit the "big integrated" mold. Until then, keep posting your suggestions and comments on the Drip Companies message board.

FoolWatch -- It's what's going on at the Fool today.

10/28/98 Close

Stock Close Change CPB 53 1/2 - 3/16 INTC 89 7/32 +1 29/32 JNJ 80 13/16 - 3/4
Day Month Year History Drip 0.53% 3.86% 16.38% (0.89%) S&P 500 0.26% 5.03% 10.07% 12.28% Nasdaq 1.15% 2.57% 10.63% 9.01% Last Rec'd Total # Security In At Current 09/02/98 8.027 CPB $52.867 $53.500 09/01/98 9.727 INTC $80.238 $89.219 10/07/98 7.850 JNJ $71.405 $80.813 Last Rec'd Total # Security In At Value Change 09/02/98 8.027 CPB $424.36 $429.44 $5.08 09/01/98 9.727 INTC $780.50 $867.86 $87.36 10/07/98 7.850 JNJ $560.53 $634.38 $73.85 Base: $2000.00 Cash: $186.08** Total: $2117.76

The Drip Portfolio has been divided into 85.474 shares with an average purchase price of $23.399 per share.

The portfolio began with $500 on July 28, 1997, adds $100 on the 1st of every month, and the goal is to have $150,000 in stock by August of the year 2017.

**Transactions in progress:
09/21/98: Sent $77 to buy/enroll in MEL.
10/24/98: Sent $40 to buy more INTC.
10/26/98: Sending $60 to buy more JNJ.