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TWST: John, could we have your thoughts on the issues?

Mr. Parry: I think what you've brought up is the reversal in oil price direction that certainly became a positive driver of these oil stocks. Recall, we had this merger mania that went on during the past year or two, and not surprisingly, some of the merger candidates as well as the acquirers themselves tended to be outperformers. Then when the FTC put a roadblock on British Petroleum's (NYSE:BPA) proposed purchase of ARCO, that altered the thinking on the part of investors/speculators holding a portfolio of merger candidates, which seemed to coincide with equity price weakness for a period of time among this group. However, the unexpected sustained strength in the price of oil has re-ignited investor/speculator interest. I've been at these Roundtables before, and I was looking back over some of our earlier statements wherein most of the analyst panelists felt that the earlier distressed oil price was unrealistic and that we would get a rebound, perhaps to the 10-year average of $18-$20 per barrel — certainly not current levels. But the thing I would add is that many of the non-merger targeted equities that underperformed last year have exhibited a sort of catch-up—names like Phillips (NYSE:P) and Amerada Hess (NYSE:AHC). So there has been a little bit of a leveling out process occurring this year wherein 1999's superior stock market performers have given up some ground to last year's underperformers.

TWST: John, have you identified any integrateds that can grow even with commodity price volatility?

Mr. Parry: There are few, if any, companies that are able to grow their reserves fast enough to offset a 10, 20, 30% decline in oil prices, should that materialize. I believe a couple of the panelists mentioned Phillips and OXY having purchased their production using cash/debt. In both cases, as long as we keep oil in the high teens or better, those purchases look okay. So you'll certainly get some healthy incremental volume growth from these companies as far as the upstream is concerned. In addition, chemicals are likely to provide a strong contribution going forward for each. On the other hand, USX-Marathon (NYSE:MRO) has both upstream volume growth and a higher relative exposure to downstream than most of its peers. This sector should benefit from any trend to lower crude oil prices. Plus, I believe the odds are increasing that we will see the USX corporate structure which links the steel and energy operations changed. MRO's new CEO, Mr. Cazelot, could well be a catalyst for that change. With JSH ANW valuation in the high $30s, Marathon has some attractive value attributes for consideration going forward.