Texaco

"Remember, we were in dialogue with companies that needed money. That was why they were talking to us in the first place. If they had to apologize for their office, saying something like, “Sorry that we’re here, but a buddy of mine had three spare rooms, and this is saving us money while we put this deal together”—I loved that. Conversely, a person with big offices surrounded by fancy art and mahogany wood paneling didn’t exactly exude parsimony. Maybe I was heeding that old lesson from the Texaco boardroom experience without knowing it. Sometimes, little signals mean a lot."

"“Wouldn’t it be cheaper for Texaco to just buy Pennzoil?” The market value of Pennzoil had only increased a few billion dollars since the judgment was issued, so paying a premium for Pennzoil would be cheaper than paying the $ 12 billion judgment. As the junior person on the team, I had no idea whose brainstorm that was. But I thought it was ingenious. Amid all our work, Texaco delivered a bid for Pennzoil that was a big premium to the prevailing stock price at the time."

"Under Texas law, the side appealing the ruling must post a bond equal to the size of the judgment to be able to make the appeal. In this case, Texaco had to post a $ 12 billion bond. That’s a lot of money today, and it was a lot more thirty-five years ago. Speaking for an amount like that back then was almost unheard of."

"Between my Texaco board table “scandal” and the great “Briefing Book Traveling Tutorial,” I saw that the folks who were written about in the newspapers and who commanded respect wherever they went were just fallible people, complete with idiosyncrasies and peculiarities. No better or worse than anyone else. They just had fancy jobs and were paid a lot of money. I swore that I would not get that affected, no matter how successful I became."

"His top holdings were invariably companies he knew well (including smaller conglomerates like Curtiss-Wright and large energy and insurance companies like Texaco and Aetna), whose P/E ratios were at or near record lows at the time of his investment."

"The Mercur mine in Utah was Munk’s next acquisition target, and Bob Smith was front and centre in the decision to go for it. Mercur was owned by Texaco, but had originally been developed by the mining arm of Getty Oil Company. With permission from Texaco White Plains’ senior executive, Peter Byur (later Texaco’s chairman and CEO), Munk sent his newly acquired Camflo team of mining engineers to do a two-day appraisal of Mercur. Bob Smith, the chief, took two of his Camflo geologists with him, Brian Meikle, a McGill graduate, and Alan Hill, a former Noranda mine manager. Smith and his team liked what they saw. Mercur was producing 70,000 ounces a year, but Smith reported that production could be increased dramatically, that the base cost per ounce could be lowered just as dramatically, and that he could run the mine much more efficiently."

"On Smith's advice, Munk put in a bid. When it turned out to be close to but lower than Exxon’s, who came in at about $60 million, Munk withdrew. But then Exxon backed off and departed. Munk lowballed with a bid of US$31 million with a sweetener: Texaco would get half of any proceeds should gold go over US$385 an ounce, topping out at US$9 million. Texaco took Munk’s offer. The next step was to finance the deal. Munk’s recent feat of paying off the Royal’s $100-million Camflo debt gave him new credibility. The Continental Bank Company gave Munk an equity loan of US$31 million. With the funds already in hand, Barrick closed the Mercur deal in June 1985."

"The major rescue operation was set to happen on Wednesday, February 21, six days after the first uneventful grounding. Now, they could not afford to fail. Therefore, they brought in all available rescue personnel, the ship's crew, and pollution experts. The large tugboat "Arild Viking" arrived at the site, and by 4:30 PM, the powerful Norwegian tug had twelve other tugboats with it. Two pilots were sent aboard to direct the attempt to get the "Sea Empress" off the ground. At 5:35 PM, the boat began to slowly turn, and after repeated attempts, the main engine onboard started. By 6 PM, the "Sea Empress" came off the ground, and well aided by the tremendous forces of "Arild Viking," the battered supertanker was moved to the middle of the channel. Finally, a controlled towing could be started up the channel, and after three hours the moorings could be fastened at the Texaco refinery on the north side of Milton Haven."

"Sensibly, Fredriksen and Trøim had three offshore units that they had bought for around 85 million dollars just a few months earlier, which – except for the rig – were in lay-up. But prudence disappears like dew in the sun in good times, and both brokers and investors saw gold. According to Trøim, people were almost generous. The clever shipping man told the newspapers that they had received offers from anonymous American brokerage houses to bring in a total of 575 million dollars for the two drillships and the one rig in a public offering in the USA. Instead, they chose to accept a price tag of "only" 400 million dollars in Oslo, Trøim said. And both the press and the investors bit. Led by the court brokers Pareto Fonds and Fearnley Fonds, the shares in the newly started Northern Offshore ASA were put on the market. In one day, the shares were snapped up, more than 200 investors stood in line. That the emission in practice meant that the bellwether was selling, bothered no one significantly. Thus Fredriksen got rid of both drillships and production rig – and could pocket a profit of an incredible 240 million dollars on just a few months’ paperwork. Fredriksen celebrated the sale by guaranteeing that "Northern Producer" would have good rates for the first year. During that period, the rig was leased out on a lucrative charterparty to Texaco."