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Show .Business Tuesday Section D Up and Down the Street Firm Still Has Hopes for Shale Oil It's like drinking Coke through a straw. You never know you're at the bottom until you start sucking wind. We'll be sucking wind in our petroleum reserves in tuO years. Geokinetics President M. A. "Mike" Lekas By Robert H. Woody Tribune Business Editor As far as the Salt Lake d Geokinetics Inc. is concerned, it was City-base- U.S. Syncurtains for the thetics Fuel Corp. this week. But not for Geokinetics, insists its chairman Henry Patton. "Were a going concern. We have 30,000 acres of state and fee leases containing 2 billion barrels of recoverable shale oil. We have the technology. Now, we have to take stock and decide what we are going to do. Until last week, Geokinetics held to a slim hope it would get $184 million in SFC price and loan guarantees that would allow it to move ahead with its Seep Ridge Project 70 miles south of Vernal. Seep Ridge proposed production of 1,100 barrels a day of shale oil from shallow beds of shale over a period. But on Monday, in a terse announcement, Geokinetics wrote off the SFC. Despite four days of intense activity by congressional supporters of the Geokinetics Seep Ridge Project and additional support from the White House, the U.S. Synthetic Fuels Corp. (SFC) was terminated without signing a contract with Seep Ridge . . . Without the price and loan guarantees provided by the SFC, the Seep Ridge project cannot proceed under current conditions of depressed oil prices. Geokinetics had developed what it called its Low Front End Technology process. Involved: 1. Break-u- p of thin, shallow underground beds of shale with explosives. 2. Ignition and injection of air into the rubble to maintain combustion. 3. Recovery of the shale oil as condensate from wells at the other end of the bed. It had produced 136,000 barrels of shale oil at its Kamp Kerogen type tracts before it suspended operations in August 1984. Geokinetics had asked for for a $55 a barrel guaranteed price for 10 years to be escalated on basis of the Producer Price Index and a guaranteed loan of $63 million for construc-to- n of the project. Selling Sends Dow Into - NEW YORK (AP) Stock prices tumbled in moderate trading Monsurge day, pushed down by a year-en- d of profit-taker- s and news that suggests the economy will remain sluggish through early 1986. The Dow Jones average of 30 industrials fell 14.22 points to 1,528.78. It was the Dows first double-dig- it drop indsince Dec. 2, when the blue-chi- p icator' also declined by 14.22 points, and was only the second double-dig- it drop since Sept. 11, when it fell 14.01 points. The Dow has climbed more than 200 points in the past three months and hit an unprecedented high Dec. 16 of 1,553. J, the 36th record it has set this year, reflecting Wall Streets strongest rally in history. Analysts were not surprised by the downturn and emphasized that the volume of shares traded on the New New York Stock Exchange 1 do. 985 the Congress Understandably, was jaundiced. That of course, is not to dismiss the value of the "beyond the call of duty efforts to Utah Republican Sens. Jake Garn and Orrin Hatch in support of effort to get the project funded, he said. In our innocence, we made an application for Seep Ridge guarantees in January 1983, budgeting $250,000 over a timetable of six months to get approval. But pursuit of that funding ended up costing Geokinetics and its partner, Peter Kiewit Sons Inc., $2.5 million to $3 million, according to Mitchell A. (Mike) Lekas, president of Geokinetics. Total costs for Geokinetics over the lifetime of its development efforts, he said Monday, was $5 million with about $2.5 million was recovered in production and sale of its shale oil. ar Geokinetics was formed 17 years ago, on basis of a friendship between Mr. Patton, founder and a former director of United Nuclear Co., a New Mexico uranium producer, and Mr. Lekas, then with the Atomic Energy Commission in Grand Junction, Colo. Double-Dig- The Market In Brief Dec. 24, The Congresss action was shortsighted, said Mr. Patton. But there was bumbling inefficiency by the SFC from the very beginning. It has made three awards out of 175 applications. It has failed to do what it was told to Dive it York Stock Exchange also was at a three-wee- k low of 107.89 million, compared with 170.27 million on Friday. In the final analysis its a market e that has run a mile and is pausing for a breather, said Larry Wachtel, an analyst for Prudential-Bach- e Securities, a New York investment firm. Losing issues outran gainers by on the Big Board. Stocks nearly of automakers, steelmakers, retailers, airlines, financial firms and other manufacturing and service industries fell broadly. Wall Streeters noted that Monday was the last day that stock profits could be applied to 1985 income figures and said many corporate money managers skimmed their rally gains statements look to make year-en- d more impressive. two-minut- UP VOLUME 107,890,000 SHARES UNCHANGED 386 ISSUES TRADED DOWN 1,200 N.Y.S.E. Index 120.01-1.3- S. & P. 208.57 - 2.37 Comp. Dow Jones Ind. 0 14.22 1,528.78 24, 1985 Morning-Decem- ber Geokinetics turned its interest to shale oil in 1971 when the Federal government announced its first prototype tract leasing program. It was a member of a consortium that made an unsuccessful bid on the first Utah federal Ua tract in 1974. It secured state and fee leases several miles to to the south, however, where it began development work in 1975. It spent about $18 million $15 million supplied by the Department of Energy in developing its process. The Synthetics Fuels Corp. was formed as a agency in 1980 under the Energy Security Act President Jimmy Carter's "moral equivalent of war when the nation believed that world oil prices would climb higher and that traditional energy sources would soon be exhausted by escalating demand. It was in 1981, however, that oil prices began to fall, pressured by world recession as well as development of new reserves. "Most of the pundits talk about prices going up again in the But we have been chewing away at our productive capacity. That surplus is being depleted rapidly, Mr. Lekas told The Tribune. Its like drinking Coke through a straw. You never know youre at the bottom until you start sucking wind. Well be sucking wind in our petroleum reserves in two years. Commented Mr. Patton: I predict when the next energy crisis comes the Congress, as it inevitably will at behest of its constituents, will embark on another crash program that will be far more expensive than anything to date." In the meantime: We intend to keep full speed ahead, Mr. Lekas told The Tribune.We have built a Model-Ford in our process. We think it can run and run well. But certainly it can be improved. As far the jursidictional questions evolving from a 10th Circuit Court of Appeals decision which puts major shale oil sites within expanded Ute Indian Tribe boundaries, We can work with any authority federal, state or Indian. We assume all will be reasonable, said Mr. Patton. The 10th Circuit Case, however, said Mr. Lekas, while expanding the boundaries of the tribe, does not address the issue of property ownership. Geokinetics will persist in its title to the leases it holds, he says. mid-1990- s. T Page 1 Christmas Catalog Sales Up 15 From Last Year - NEW YORK (AP) Catalog sales of consumer merchandise this Christmas are up an estimated 15 percent from a year ago, a r business information firm said Monday. That's a real sales increase, after taking into account the fact Sharper Image, gifts and gadgets, San Francisco, up 20 percent. Orvis, sporting goods, Manchester, N H., up 15 percent. mail-orde- Caswell-Masse- mail-ord- apothecary, New York, up 10 percent. Orders placed from September up to Monday were included, Sroge said. He said more consumers are choosing to buy Christmas gifts by mail and people are buying later this year. Many mail order companies are reporting tremendous December volume after posting relatively flat September and October sales, Sroge said. that some companies mailed more catalogs this year than last, said Maxwell Sroge, whose information company bears his name. Both department stores offering merchandise by mail and spewhich cialty catalog marketers target specific markets with focused product selections did well, said Sroge, who is based in Colorado Springs, Colo. Leading the department stores in mail-orde- r sales, according to Sroge, were: Bloomingdales By Mail, New York, up 40 percent; B. Altman, New York, up more than 30 percent; I Magnin, San Francisco, up 22 percent; Saks Fifth Avenue, New York, up 15 percent; and jSieman-MarcuHouston, up 15 percent. These specialty catalog marketers fared well, Sroge said: Lillian Vernon, gifts, Mount Vernon, N.Y., up 25 percent. Spiegel, apparel and furnishings, Oak Brook, 111., up 25 percent. The catalog companies are beginning to cut into the retailers advantage of being able to serve e shoppers, he said. By last-minut- offering expedited shipment through air couriers at extra charge, catalog marketers can accept orders up to Dec. 20, and sometimes later, and still deliver by Christmas, Sroge said. Looking ahead, Sroge estimated consumer mail order sales will pass $50 billion in 1986, which would be 12 percent higher than estimated sales of $45 billion this year. Including Nissan, Volvo Franchises Rick Warner and Son Buy Schettler-William- s Inc. Were excited about the opportu- nity of selling these two excellent products, Mr. Warner said. The dealership will be renamed with Dick Jr., Warner Nissan-Volvserving as general manager. Mr. Warner said he and his son are excited about the deal, and are eager to begin building their new owner-bas- e in the import area. He also feels sevconcludes announcement The to a is a definite there eral months of negotiations between downtown location. advantage both the includes and two the parties Weve found customers like to buy Nissan and Volvo automobile franhave their vehicles serviced near and chises and the real estate and buildwhere they work rather than near Schettler-Williams ings at 702 S. Main, where Mr. Warner said. their residence, has located since 1970. Mr. Mr. Warner has been associated Volvo Warner said both Nissan and with Ford Motor Co. for 40 years and factories have approved the sale. recently acquired the Yugo car franThe timing was right for what we, chise. Dick Jr., began his association with feel is a win-wi- n situation," Mr. See D-Column 4 Warner said. By T.R. Dowell Tribune Auto Writer Rick Warner, president of Rick Warner Ford, and James Warren Williams and Gordon O. 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