TEXACO <TX> RESERVES DOWN DESPITE LOWER OUTPUT Texaco Inc's oil and gas reserves declined in 1986 despite reduced production and upward revisions in the company's previous reserve estimates, its annual report said. The statement of the report's auditor was qualified -- as was the previous one -- because of the unkonwn final impact of the judgement won by Pennzoil Co <PZL> against Texaco on charges Texaco interfered with Pannzoil's contract to acquire Getty Oil Co. The auditor's point out, as Texaco has in the past, the company's loss of any of several pending court decisions in this case could cause it "to face prospects such as having to seek protection of its assets and business pursuant to the bankruptcy and reorganization provisions of Chapter 11" of the federal bankruptcy code. Commenting on a Texas Court of Appeals ruling which reduced Pennzoil's judgement by two billion dlrs, to 9.1 billion dlrs, Texaco said it will file a motion for a rehearing by the appeals court no later than March 30. Texaco said the proven crude oil reserves of the company and its consolidated subsidiaries totaled 2.54 billion barrels at the end of 1986, down from 2.69 billion a year earlier. However, inclusion of Texaco's equity in the Eastern Hemisphere reserves of a nonsubsidiary company limited the decline to 2.91 billion barrels from 3.00 billion at the end of 1985. Worldwide production by the consolidated subsidiaries declined to 341 mln barrels last year from 362 mln in 1985 and upward revisions in previous reserve estimates rose to 143 mln barrels from 117 mln, respectively. Texaco said the largest drop in reserves came in the United States -- where the total dropped to 1.46 billion barrels from 1.55 billion. The company said U.S. liquids production averaged 660,000 barrels per day last year, down from 714,000 in 1985, with about 44 pct of the decline -- some 24,000 barrels per day -- representing high-cost production shut-in or curtailed in response to the decline in crude oil prices during 1986. Texaco said its natural gas reserves totaled 8.16 trillion cubic feet at year end, down from 8.87 trillion cubic feet at the end of 1985.