Opinion ID: 2052857
Heading Depth: 1
Heading Rank: 2

Heading: Background and Operations of the Companies.

Text: Immediately before this merger Getty directly owned 7.42% of Skelly's outstanding shares and 89.73% of Mission, which in turn held 72.6% of Skelly's stock. Getty was a large petroleum company concerned primarily with the exploration for and development of crude oil and natural gas throughout the world. Its operations and activities were integrated vertically to include the exploration and development of petroleum, natural gas, and minerals both on land and offshore; the production and refining of petroleum and natural gas, both domestically and in other countries; the transportation of these products by its own fleet of five domestic and twelve international flag vessels, as well as by rail car, tank truck, and pipeline; the manufacturing of petroleum products and chemicals; and the wholesale and retail distribution of these products in the United States and Phillipines. Apart from Getty's operations and significant assets, qualifying it as an integrated oil company, Getty had important subsurface properties of oil and natural gas reserves in the United States, Canada, Spain, the Middle East, and the North Sea. Among the United States reserves was the Kern River field in the San Joaquin basin of California. [1] Getty's foreign holdings included reserves in the Piper and Claymore fields located in the British North Sea. [2] Getty held a 23.5% interest in Piper, estimated in 1975 to contain 642 million barrels of recoverable oil reserves. Getty's share of the crude oil reserves for the Piper and Claymore fields was estimated at 132 and 73 million barrels, respectively. Getty's 1975 annual report listed Claymore's estimated recoverable oil reserves at 356 million barrels. Apart from its North Sea properties, Getty also had offshore interests in Spain, Sumatra, the South China Sea, Algeria, Iran, and the Saudi Arabia  Kuwait Partitioned Neutral Zone, an area of disputed ownership administered jointly by both nations. Getty owned uranium, coal, gold, copper and oil shale reserves in the United States, and maintained an interest in uranium  gold ore reserves in Australia's Northern Territory. Like Getty, Skelly was an integrated oil company with far flung, diversified operations and activities at the time of the merger. Skelly had significant domestic offshore petroleum reserves in the production stage, as well as large leaseholdings onshore in North America. The latter included 325,000 acres in the Powder River Basin of Montana and Wyoming. Internationally, Skelly had a 25% interest in a 500,000 acre concession, including the Mubarek field, in the Persian Gulf. [3] Skelly also had a 31.25% interest in the Heather field in the North Sea. [4] It was disclosed that in 1975, 59% of Skelly's crude oil production was a result of enhanced recovery techniques, principally waterflooding. Beyond its oil reserves, Skelly owned 50% of a wood products manufacturer, held 50% of a petrochemical manufacturer, and maintained interests in two pipeline companies, a Republic of Korea fertilizer manufacturer, a domestic fertilizer plant in Clinton, Iowa (the Hawkeye plant), and a timber concession in Liberia, where it was building a saw mill and plant. It also owned and operated a crude oil refinery in Kansas with an approximate daily capacity of 90,000 barrels, as well as a natural gas plant in Texas. Skelly's operations included oil and gas exploration and development, the production, transportation, refining and sale of crude oil and natural gas, and wholesale and retail marketing. Mission was a Nevada corporation controlled by Getty, and was primarily an investment company with minimal assets other than its Skelly stock.