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earch. Petitioner obtained a report from Kidder Peabody, dated
November 12, 1985, in which Kidder Peabody identified 33 oil and
gas companies as potential acquisition targets. The Kidder
Peabody report selected 8 of the 33 potential targets for further
review.
The Kidder Peabody report and petitioner's acquisition plans
were discussed at the November 15, 1985, meeting of petitioner's
board. According to the minutes of that board meeting:
Mr. Jackson explained the reason why the Company was
currently looking for an acquisition. He stated that
if the Kansas Corporation Commission were to order no
infill drilling in the Hugoton field in 1986 or even in
1987, then the Company must do more than sell its
inventory off the shelf, but must look for ways to
maintain its reserve position. Management had
concluded that currently the best opportunities to add
reserves would be found through the purchase of an oil
and gas exploration and production company, rather than
through the process of building an exploration position
from the ground up. Mr. Jackson advised that Mr.
Billings and Mr. Reed had been actively reviewing many
potential candidates, and that Kidder Peabody had
provided research assistance on acquisitions
candidates. Mr. Jackson stressed that the Company
would consider nothing other than a friendly
acquisition. The characteristics of the ideal
acquisition candidate were discussed in detail.
[Emphasis added.]
Petitioner regularly reported on its acquisition efforts at
its board meetings. Petitioner also reported on its acquisition
efforts, reiterating its commitment to add value through its oil
and gas acquisition strategy, in every quarterly shareholder and
annual report during the period 1986 through 1990.
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