Thursday, November 6, 1986/The Battalion/Page 7
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Photo by Anthony S. Casper
Student body president Mike Sims gives the crowd at Sully’s
Symposium a preview of Wednesday’s student government
meeting. Sims, who spoke Wednesday afternoon, fold the au
dience student government is addressing such student con
cerns as hours at the A.P. Beutel Health Center, changes in the
Aggie Point Plan, and construction of new bicycle racks.
Texas incumbents
all win re-election
to Congress seats
DALLAS (AP) — The party
makeup of the 27-member Texas
congressional delegation remained
unchanged after voters rejected ef
forts by Republicans and Democrats
to target certain incumbents and the
GOP retained the only wide-open
district.
All 26 incumbents clinched re-
election in Luesday’s balloting as the
Democrats re-elected 10 congress
men in contested races and placed
seven unopposed representatives
back in Washington for the 100th
Congress.
U.S. House Majority Leader Jim
Wright, expected to be the next
House speaker, was among the win
ners Tuesday, along with three
Democrats tagged by the GOP as too
liberal for their constituents.
Wright, D-Fort Worth, handily
beat Republican challenger Don Mc-
Niel, an Alvarado businessman.
Complete returns showed Wright
winning with 69 percent of the vote.
The expected successor to
Thomas P. “Tip” O’Neill in the
House’s top post, Wright said the
budget deficit, the trade deficit and
the war on drugs will top his list of
priorities in Congress.
Wright called the trade deficit
“one of our most serious problems,
undercutting industrial strength and
drying up American jobs.”
Freshmen GOP Reps. Mac Swee
ney of Wharton and Joe Barton of
Ennis, tagged as vulnerable by Dem-
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New process for cloning cattle
announced by Houston company
HOUSTON (AP) — Scientists
have devised a way to produce large
numbers of identical cattle from an
embryo in what is said to be the first
successful cloning in large numbers
involving animals, officials said.
The basic goal of the process,
which was designed by Houston-
based Granada Corp., is to obtain
more of fspring from a superior fe
male from the newest method,
which is still highly experimental,
company officials said.
At the present stage, scientists
think they can produce four or five
calves per embryo. Three actually
have been born as a result of the re
search. In the future, it may be pos
sible to produce hundreds or per
haps an unlimited number of
offspring per embryo, the officials
said.
The breakthrough came to light
on Tuesday during a briefing for a
conference at Texas A&M Univer
sity for science writers from across
the United States.
The research was credited to Dr.
Steen Willadsen, a Danish veterinary
surgeon who spent a year in Gra
nada’s laboratories at Marquez.
He recently left the company to
continue his experiments in Canada.
His work is not yet published, and
Granada Genetics President Dr. Joe
Massey declined to fully describe the
process because of its proprietary
nature. Granada Genetics is part of
Granada Corp., an agribusiness con
glomerate involved in a wide range
of activities from cattle feeding to
shrimp farming.
Company officials say cloning is
not the precise definition of the
technology and is not the firm’s goal.
ocrats hoping to expand the party’s
share of the delegation, escaped with
second terms, although both were
given a scare.
In the 14th district, Sweeney won
with 52.4 percent of the vote over
Democrat Greg Laughlin, an attor
ney from West Columbia.
Although Barton and Fort Worth
lawyer Pete Geren were neck and
neck for much of the evening, Bar
ton won with 55.6 percent of the
vote in the 6th district, which until
recently traditionally was rep
resented by a rural conservative
Democrat.
In the only race not involving an
incumbent, Republicans retained
the sprawling 21st district, which
Tom Loeffler abandoned to make
an unsuccessful GOP gubernatorial
bid. Former Bexar County Commis
sioner Lamar Smith easily defeating
Democrat Pete Snelson, a former
state senator from Midland, with 61
percent of the vote.
“We had broad grass-roots sup
port from Democrats, as well as
from Republicans,” Smith said.
Snelson blamed his defeat on
party affiliations. “I think the bot
tom line was party labels and not ex
perience,” he said.
Republican efforts to label three
incumbent Democrats as out of
touch with their constituents failed
to impress the majority of voters.
Rep. John Bryant won re-election
to the 5th district over Tom Carter,
garnering 59 percent. Veteran Rep.
J.J. “Jake” Pickle of Austin trounced
former Austin Mayor Carole Keeton
Rylander with 72 percent of the vote
in the 10th district, and Ron Cole
man of El Paso captured the 16th
district with 66 percent of the vote
over GOP challenger Roy Gillia.
“We saw two weeks of heavy neg
ative campaigning against me,” Bry
ant said. “We were worried about it.
But we made a firm decision to em
phasize the positive and to stick with
my record. We never mentioned my
opponent’s name.”
In the 2nd district, incumbent
Democrat Charles Wilson rolled to
an easy win over Republican chal
lenger Julian Gordon, a Liberty
salesman, and independent Sam
Paradice, with 67 percent of the
vote.
Low prices spur new lending criteria
Texas banks cautious on oil loans
MIDLAND (AP) — The new era of energy
lending which began with the oil price collapse of
1986, has taken banks “back to the future” in
terms of the criteria they use in lending money
for oil and gas operations.
Not since before the Arab oil embargo of 1973
have financial institutions been so cautious in
their application and approval processes, accord
ing to Marvin Schiebout, executive vice president
of energy lending for RepublicBank First Na
tional Midland.
The days of revolving “borrowing base” loans
and loans for lease acquisition costs seen during
the period from 1973 to 1981 have been rele
gated to the history books, with today’s loans be
ing made only using proved producing (or shut-
in produceable) reserves and secured collateral
for backing.
An increasing number of banks are lending on
the basis of the applicant’s balance sheet position,
rather than on the basis of in-the-ground re
serves.
Bankers have learned the lesson of the unpre
dictability of oil prices and the adverse effects
rapid movements can have on their loan portfo
lios. So, each base case economic evaluation is
run with two price sensitivity analyses: one based
on flat $14 per barrel prices through mid-1989
with 4 percent annual escalation from there; and.
an acid test “worst case” scenario of $10 a barrel
prices remaining flat for the remainder of the
decade.
These economic criteria are used to evaluate
the effect on the applicants’ future cash flow and
their ability to repay the loans.
Gas project economics are founded on a base
case of current prices remaining in effect for one
year and then adjusted up to $2 per thousand
cubic feet (Mel) through July, 1989. •
Price analyses are run for gas price scenarios
of current prices remaining in place for the next
year and moving to $1.62 per Mcf through mid-
1989 and another scenario based on prices flat at
$ 1.25 per Mcf for the remainder of the decade.
Local bankers say that loan demand for fi
nancing of new drilling projects is virtually non
existent and that the bulk of current loan busi
ness is refinancing of existing debt.
Bankers note that most borrowing is for main
tenance of operations, as experienced operators
adjust to current economics.
Because of low prices, production costs of
proved reserves are being factored in as a degree
of the risk analysis on new loans. With price lev
els falling to near the break-even point, a high-
cost producer becomes a higher risk borrower.
“Cash flow is the key,” says Schiebout.
The importance of bank financing as a source
of drilling funds is growing oecause competing
sources of outside capital are drying up at an
alarming rate.
Proceeds from public and private placement
drilling fund sales peaked in 1981 at $1,976 bil
lion out of total energy fund sales of $2,884 bil
lion. In 1985, those funds shrank to $371 million
in drilling funds from total placements of $698
million.
Reclassification and less favorable treatment of
passive investments under the reformed tax code
may further contract the funding pool in 1987
and future years.
What effect the advent of insterstate banking
may have on the availablity of energy credit re
mains open to debate.
Backers of interstate banking, including the
state’s largest banking associations, note that 38
other states already permit interstate banking.
They argue that the Texas economy needs the
immediate influx of money that interstate bank
ing may allow, and note that deregulation in the
national banking industry has broken down old,
geographic barriers.
Opponents, including consumer groups, say
out-of state banks won’t have the best interests of
Texans at heart and would allow large New
York-based banks to drain Texas institutions of
their deposits.
SAVE 5(K
ANY
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RETAILER: You are authorized to act as our agent
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Defensive Driving Course
Nov. 10, 11 and Nov.14, 15
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Stage Center presents
Thorton Wilder's
“Our Town”
Nov. 6,7,8 & 13,14,15
A&M Presbyterian Church
College Station
Adults $6
Students w/ID $4
Tickets at Box Office
Senoir Citizens $4
Children under 12 $2. 50
Reservations 693-0050