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Thursday, November 14, 1996

Shell Western plans to surrender Ward

County Oil Patch to new company

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By Jerome P. Curry

Shell Western E & P Inc. and AMOCO their place in West Texas Oil Patch
to a down-sized, out-sourced joint venture Shell and AMOCO executives
call Altura Energy Ltd.

Altura will become the largest oil and gas producer in Texas and the
third largest in the United States.

Under the joint venture plan, 90 jobs will be lost; 60 at AMOCO, 30 at
Shell. At least five positions will be eliminated at Shell's Sealy Smith
Field No. 1 near the Sandhills State Park in Ward County. None of those
Ward County Shell workers who will be displaced list Monahans as their
home address.

Charles Walker, director of the Monahans Economic Development Agency,
said the Shell-AMOCO venture is more evidence, if any is needed, that
oil and gas production in Monahans and the Permian Basin is at the point
where companies are seeking alternatives like Altura to mitigate rising
costs. AMOCO's John Curry, speaking from the AMOCO base in Houston, said
of the Permian Basin reservoir: "Nothing is forever."

Of the decision to establish Altura, Walker noted: "It just gives us one
more reason to move forward in our diversification efforts. It
demonstrates how Monahans must seek a multi-industry base for its
economy and make a commitment to that search."

Plans have not been finalized but Shell, which has been a major part of
economic activity in Monahans and Ward County for nearly three-quarters
of a century, plans to switch its oil and gas production in the Permian
Basin to Altura by early next year, perhaps as early as Jan. 1, 1997,
the current target date and one executives of both Shell and AMOCO
expect to meet.

"That field (Sealy Smith) out there next to the Monahans state park will
cease to be Shell," said Rich G. Hansen, the manager of public affairs
at Shell Western E & P in Houston. "Shell and Amoco will disappear from
West Texas."

Sealy Smith No. 1 was brought in on July 3, 1941 and is still producing.
Shell first came to Ward County, says Carolyn Cook, curator at the
Million Barrel Museum in Monahans, when it assumed control of Roxanne
(or Roxanna) Oil Co. in 1927, a year before Shell built the Million
Barrell oil storage tank. Use of the mammoth oil storage facility ended
two years later after the stock market crash that blew the nation and
the planet into the Great Depression of the 1930s. That tank is the base
on which Cook's oil and gas museum is built.

Shell will control 35 percent of the new company; AMOCO, 65 percent, a
division basically based on the assets each of the corporations brings
to the Altura joint venture from their oil and gas production facilities
in West Texas. Already, executives of Shell and AMOCO have prepared
employees for the coming transition to a leaner, meanor company.

Hansen and Curry said company teams had been in the field for the past
two weeks talking with workers. Some Shell Western employees have
accepted transfers to Shell Operations in the Gulf of Mexico out of New
Orleans. Others have applied for jobs with Altura. Some will accept
buy-outs. Those who have accepted buy-outs and will leave their jobs
will be allowed under the transition to Altura to work for the next 60
days, or until the end of the year.

Hansen confirmed the restructuring of the Monahans Shell Western

Under the plan, workers who move to Altura first terminate from Shell
and apply for jobs with Altura. Most of that process already has been
completed and most workers know if they are making the transition.

Altura will save productions costs, the News was told, by working with
fewer employees and contracting with private companies to do much of the
work that had been done by Shell and AMOCO personnel.

Errant burglar drops into Monahans News

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Police are investigating the bizarre entry of a burglar into the
Monahans News building at 107 West Second Street sometime late Monday or
early Tuesday morning.

Editor and Publisher Steve Patterson said it appeared the only item
taken was a hammer. But, Patterson said, there was damage, now repaired.
The errant thief entered the building through an old air conditioning
duct on the roof and promptly fell about 18 feet through a false ceiling
onto the concrete floor of the press room. The injured burglar left
through one of the exit doors that can be unlocked from the inside. The
extent of injuries is unknown.

Police seek a limping burglar with a hammer.

Hospital on fiscal carpet County wants answers

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By Steve Patterson

The Ward County Commissioners Court Tuesday requested the Ward Memorial
Hospital Board to order the hospital's administration to appear at a
special joint-meeting at noon, Friday to explain the hospital's
financial situation.

Among the matters the commissioners want explained in a public meeting

*How the hospital became $300,000 in arrears on its bills - many of them
90 days overdue.

*The hospital's ability to meet its payroll obligations this Friday for
its approximately 153 employees. The payroll totals approximately
$140,000 every two weeks.

*Why the hospital administration felt it could purchase a $30,000 tube
for its CAT scan machine without having the funds approved by the

*Why the hospital's salaries are at an all-time high.

*What began as routine matter on the court's agenda - the transfer of
funds from the county to the hospital - took an unexpected turn after
Commissioner Julian Florez started questioning a request for a budget
amendment in the travel expense.

Representing the hospital administration at the meeting was Peggy
Vestal, director of nurses. She was accompanied by Ted Ward, head of the
hospital board's Finance Committee.

As the commissioners' questioning picked up speed and intensity, County
Judge Sam Massey reminded the court Vestal was merely appearing on
behalf of the administration and was not personally responsible for the
financial decisions of the institution.

The commissioners made it clear that they were anticipating questioning
Administrator Bill O'Brien and Chief Financial Officer Jesse Saucedo.
The two top officials were absent at the Tuesday meeting due to a trip
to Tennessee to inspect computer equipment. The commissioners requested
that the. hospital board order the pair to attend Friday's meeting in
the hospital's classroom.

Commissioner Florez got the ball rolling by questioning a request that
$1,000 be added to the travel expense budget. Florez pointed out that
the travel expense budget had been amended several times already this
year and was curious whether the amount budgeted for next year - $10,000
was a realistic figure.

Florez noted the budget figure at the beginning of the year was $13,000.
That figure was amended upwards to $29,500 and the hospital had spent,
in fact, $30,500.

"With this new request, " Florez said, "it would mean it would go up to

Vestal explained that the hospital expected the travel expenses to drop
significantly next year because it will not be necessary to do as much
recruiting of department heads as was done this year.

At that point, County Auditor Barbara Walsh pointed out that the money
used for paying travel expenses for prospective employees came out of
the Recruitment Fund and not the Travel Expense.

The discussion gathered steam until - at one point - Commissioner r)on
Creech said something to the affect of "Ya'll don't even have enough
money to cover payroll this week." The commissioners refused to mend
the hospital budget and transfer the necessary funds until they received
explanations at Friday's meeting.


Administrator O'Brien returned to Monahans by Wednesday morning to find
a can of worms opened for him. In an interview with the Monahans News,
O' Brien took pains to explain that the h~ospital did indeed have enough
cash on hand to cover the payroll.

"I assure you that this situation is not all that unusual in that we
h~ave a cyclical business. August was a thin month for us, but October
was good. What the commissioners are overly concerned about is our cash
flow situation.

"Many profitable businesses have cash flow problems," O'Brien said,
adding that he had complete confidence in the projected revenue figures
for the hospital.

He cited figures from the audit which indicated the hospital, in 1994,
had an operating loss of $1.5 million with total revenues of $5,297,042.
In 1995, however, under former Administrator David Keith, the hospital
had an operating surplus of $111,598 with revenues totaling almost $6.8

Up through Sept. 30 of this year, the hospital has had an operating
surplus of $291,222 with revenues totaling $5,782,087, according to the
figures provided by O'Brien.

So what about the $300,000 in outstanding bills?

"Well, actually it's closer to $228,041. As I told you before, this is a
cash flow problem because we have accounts receivable out there of
around $2.7 million," O'Brien said.

In response to the commissioners' concerns about high salaries, O'Brien
said increased expenses can be explained because of the opening of four
clinics and the high start-up costs associated with those.
In addition, he also cited the cancellation of several contracts which
will result in a positive impact in excess of $200,000 next year.


County Judge Sam Massey, who was described by the former administrator
as a "friend of the hospital", made it clear Tuesday that he was not
pleased with the hospital's current financial situation.

"I am anticipating Friday's meeting and the explanations we will be
given there. At this time, I am not satisfied with the information I
have received from the hospital administration in the past," Judge
Massey said.

County Auditor Barbara Walsh is recommending to the commissioners that
the county take funds out of the state pool to loan the hospital to pay
off its debts. This, Walsh believes, would allow the hospital to get a
handle on finances and satisfy local creditors.

In response to rumors to the contrary, Commissioner Larry Hunt said he
is not in favor of closing the hospital.

"No~ Absolutely not [to the closing]... the hospital is an essential
part of our community. We need to do everything we can to keep it open.
There are some solutions to these problems and I bet if we can sit and
go over these things, we can find those solutions," Commissioner Hunt


O'Brien and CFO Saucedo were scheduled to appear today (Thursday) before
the Ward County Grand Jury concerning the closure of several
unauthorized bank accounts.

O'Brien told this newspaper that the accounts had been closed and he had
notified District Attorney John Stickles of that matter.

No, it's only Paul, Terry And crew

on a slow trip to a fast game in Vegas

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At 10:50 a.m. on Thursday, Nov. 7, 1996, the thing came Floating out of
a brilliant West Texas sky above Monahans. It was heading for the
Monahans airport which has not hosted many flying machines like this one.

What was coming down was an airship, a blimp, a more-or-less sturdy
balloon given power and direction by a couple of 72-horsepower
Rolls-Royce engines. Paul Adams, one of the airship's pilots, grinned
when he said the engines were akin to those that powered a Volkswagen
Beetle. But VW Bugs don't cost $2 million, which Adams said this little
airship cost.

The current pilot on duty, Terry Hillard, had brought the blimp into
Monahans for a 15-minute refueling stop. Adams and Hillard trade off on
the flying chores and a chore it must be with sometimes fickle winds
aloft and a top speed of only about 40 miles an hour.

Adams was riding with the two-trailer, two-vehicle ground crew on this
Thursday. The crew met the blimp as Hillard brought it in like floating
down onto the runway and began refueling. The ground crew, said Adams,
carries everything the airship needs in its leisurely jaunts here and
there for the advertising clients of The Lightship Group out ' of
Orlando, Fla. They had left Boston, Mass., about five days previously.
The crew, by blimp and motor vehicle, was on its way to Las Vegas, Nev.,
for a major computer show. The client, an on-line internet service,
planned to tap the internet from the airship and do wondrous things with
flying electrons from the airship.

Thursday night, Adams said, the team would be in El Paso. They planned
to fly around a weekend football game before lifting off for the final
leg to Vegas. Wednesday night had been spent in Sweetwater. Adams said
they had planned to come into Monahans on Wednesday but had held off
until Thursday "because of some storms."

It's 11:10 a.m., Thursday, Nov. 7, the airship lifts off, floating
toward El Paso at 40 miles an hour. The ground crew saddles up.
Travelling at 70 miles an hour but Earthbound, the ground crew expected
to be in El Paso, in four to five hours, at about the same time as
Hillard and the airship arrives.
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Copyright 1996 by Ward Newspapers, Inc.
107 W. Second St., Monahans TX 79756
Phone 915-943-4313, FAX 915-943-4314

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