The Slick List
...refined and now ready to explore

by Jeff Fischer (TMFJeff@aol.com)

ALEXANDRIA, VA (Nov. 9, 1998) -- Today we share the list of oil and gas companies that we'll focus on as we begin our next industry study tomorrow. I've attempted to cull all of your suggestions from the message board, but if there are any not on the list that you really want to see studied, please e-mail it to me tonight.

Below the list is broken apart by each company's focus (or lack of focus). You'll notice that we have many integrated companies and far fewer that focus on just one side of the biz -- either exploration and production, refining or marketing.

  
 no fee biggies                  yield 
 1. Baker Hughes (BHI)            2.0% 
 2. British Petroleum (BP)        2.6 
 3. Chevron (CHV)                 3.0 
 4. Exxon (XON)                   2.2 
 5. Mobil (MOB)                   3.0 
 6. Pennzoil (PZL)                2.6 
 7. Phillips (P)                  3.0 
 8. Occidental Petroleum (OXY)    4.8 
 9. Texaco (TX)                   3.1 
 10. USX/Marathon (MRO)           2.5 
 
oil (and gas) exploration (drilling) yield 11. Apache Corp. (APA) 1.0% 12. Kerr-McGee (KMG) 4.1 13. Transocean Offshore (RIG) 0.3 oil refining and marketing yield 14. Ashland Inc. (ASH) 2.1% 15. Atlantic Richfield (ARC) 4.0 16. Ultramar Diamond Shamrock (UDS) 3.9

Each company's dividend yield is listed because, hey, yield is important -- especially in a dividend reinvestment plan where it can create a great deal of wealth over decades, and especially in this industry, which dances on a string controlled by oil prices. There are some decent yields here, but we of course also want market-beating capital appreciation. You know our overall goal.

If you made a suggestion that isn't on this list, please check the following list. These are companies that we'll consider, but have much less likelihood of buying. All of these DRPs have fees. We do, however, want to look at Royal Dutch/Shell, the largest oil giant in the world. Exxon follows it as number two.

suggested but have fees
Atlantic Richfield (ARC) -- 5% fee to $3 OCP
Amerada Hess (AHC) -- $1.50 fee on transactions
Coastal Corp. (CGP) -- 5 cent fee/share
Royal Dutch (RD) -- 5% fee on div to $2.50, $5+ on OCP
Southwestern Energy (SWN) -- 5% fee on div to $3, $3 on OCP
Unocal (UCL) -- 5% fee to $3 on OCP

Finally, here's the list of companies suggested that, as far as I can find, don't have a DRP.

suggestions without DRPs
Cross Timber Oil
Halliburton
Nabors Industries
Noble Drilling
Pennaco
Schlumberger
Swift Energy
Teekay Shipping (with its 4.9% yield)

If we show any mistakes here or, again, if there are companies from the oil and gas industry we're missing that you wish to study, please e-mail the suggestions to me as soon as possible.

Tomorrow we'll begin with a history of the industry, which will lead into the current situation encompassing the industry (which will take several days to cover). Following that background, we'll begin to tackle our list of companies one at a time. To prepare yourself with specific company information, enter the ticker symbol in the top-left of the Fool's website (www.fool.com) and retrieve snapshots or investor relation phone numbers. Call the companies for materials if you're interested -- or even better, visit company websites.

We're excited to begin this learning process and hope you'll enjoy it and participate actively, as you have so far! In fact, some of you are so electrified that you suggested companies for our next study after oils, which is focused on utilities. Just so you know that we didn't miss them and won't forget them, here are two companies you want to study following oils.

 
 gas utility and dist.         yield 
 Atmos Energy (ATO)             3.4%* 
 Southwest Gas (SWX)            3.5

*plus a 3% disc. on dividend reinvestments

We'll take more of these suggestions later, probably a few months from now.

The Coke Contest. A Fool won Friday's contest on Friday evening, soon after the column was posted, by answering Hemingway in the novel Green Hills of Africa. Thank you to everyone who participated. A twenty-five year old, Mike, won a Coca-Cola DRP account. Very Foolishly, his first reaction was to wonder how large it will be in 50 years.

Until tomorrow, see you on the message board and Fool on!

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


11/09/98 Close

Stock Close Change CPB 55 7/8 0 INTC 96 + 9/16 JNJ 82 3/16 + 1/4 MEL 61 9/16 -1 3/8
Day Month Year History Drip 0.26% 4.82% 22.20% 4.06% S&P 500 0.95%) 2.87% 16.46% 18.80% Nasdaq 0.24% 5.06% 18.51% 16.77% Last Rec'd Total # Security In At Current 09/02/98 8.027 CPB $52.867 $55.875 09/01/98 9.727 INTC $80.238 $96.000 10/07/98 7.850 JNJ $71.405 $82.188 10/07/98 1.000 MEL $48.560 $61.563 Last Rec'd Total # Security In At Value Change 09/02/98 8.027 CPB $424.36 $448.51 $24.15 09/01/98 9.727 INTC $780.50 $933.82 $153.32 10/07/98 7.850 JNJ $560.53 $645.17 $84.65 10/07/98 1.000 MEL $48.56 $61.56 $13.00 Base: $2100.00 Cash: $237.52** Total: $2326.59

The Drip Portfolio has been divided into 89.430 shares with an average purchase price of $23.482 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:
10/24/98: Sent $40 to buy more INTC.
10/26/98: Sending $60 to buy more JNJ.