PENNZOIL (PZL) WILLING TO SETTLE TEXACO (TX) LAWSUIT Pennzoil Co said it had not yet received any "meaningful settlement offer" from Texaco Inc but added that the company remained willing to consider proposals to settle the 10.2 billion dlr jury judgment it won against Texaco. In its newly-released annual report to shareholders, Pennzoil said it expected the Texas state court judgment, which was upheld by a state appeals court on February 12, to be upheld if appealed again. "To date, Pennzoil has yet to receive any meaningful settlement offer from Texaco, though it remains open to any realistic effort to settle the matter," Pennzoil chairman Hugh Liedtke said in the annual report. Pennzoil also said it had budgeted 212 mln dlrs for capital spending in 1987, a drop from the 233 mln dlrs spent last year. Proved U.S. and foreign reserves of natural gas declined to 964 billion cubic feet last year, from 1.01 trillion cubic feet in 1985, because of a virtual halt in its exploration program, Pennzoil said. Its crude oil reserves dropped to 140 mln barrels from 158 mln barrels in 1985. The Houston-based company said it sold an average of 339 mln cubic feet of domestic natural gas each day last year, a 17 pct drop from 1985. The average sales price for gas dropped by 60 cents per mcf to 2.16 dlrs per mcf, Pennzoil said. U.S. crude oil and gas liquids production last year fell to an average of 33,290 barrels per day from 34,102 barrels per day in 1985. The company's total revenues in 1986 declined to 482.3 mln dlrs, from 762.5 mln dlrs the previous year. Operating income in 1986 fell more than 80 pct, to 38.0 mln dlrs. Pennzoil said its goals for 1987 included development of its Point Arguello oilfield off the California coast, to maintain current production levels in its Bluebell-Altamont Field in Utah and to drill for prospects in the Gulf of Mexico's Mobile Bay area. "Production should begin late in the year from the Harvest Platform in the Santa Maria Basin offshore California," the company said. "Pennzoil's share of this production initially should be five thousand barrels a day, increasing to a peak of 15 thousand barrels a day, net, by 1989." In its sulphur business, Pennzoil said production totaled 2.1 mln long tons last year, a decline of 18 pct from 1985. The average sales price also declined, to 138.25 dlrs per long ton from 141.05 dlrs in 1985. "The long term outlook for our sulphur operations remains bright," the company said. "We expect sulphur's pricing structure to strengthen during the current year, probably in the third and fourth quarters."