January 31, 2000. Houston, Texas - The board of directors of Baker Hughes Incorporated (BHI-NYSE, PCX, EBS) announced today that it will begin a search for a chief executive officer to succeed Max L. Lukens, who has resigned from the board and is leaving the company. Joe B. Foster, chairman of Newfield Exploration Company and a Baker Hughes director since 1990, has been appointed interim chairman, president and chief executive officer to lead the company until a new chief executive is selected. Victor G. Beghini, a director since 1992, will chair the committee of the board of directors that will conduct the search. Other members of the search committee are directors Richard D. Kinder, H. John Riley Jr. and Charles L. Watson.
"Baker Hughes is a premier oilfield services firm," said Mr. Foster. "It has outstanding product lines, services, people and technology. While our customers have been pleased with our performance, we have not been satisfied with our performance in the stock market. We want to improve value for the shareholders of Baker Hughes."
"This is a strong company, and it will attract strong candidates to lead it. We will search both inside and outside the company and inside and outside of the oilfield service industry."
In other actions, Andrew J. Szescila, Senior Vice President of the company, will assume responsibilities for Baker Hughes Oilfield Operations. In his position as president of Baker Hughes Oilfield Operations he will report to Mr. Foster. Thomas R. Bates Jr., who previously had responsibilities for the Western Geophysical, Baker Atlas and INTEQ divisions, has resigned to spend more time with his family.
Mr. Foster added, "There will be no lack of leadership at Baker Hughes during the interim period. I will work with Andy Szescila and Steve Finley, our Chief Financial Officer, to make necessary changes and act decisively. At current levels of oil and gas prices, Baker Hughes' markets should improve during the course of the year. We will not lose focus on our markets or our customers during this transition period."
"Finally, I want to thank Max Lukens for his contributions to Baker Hughes during a long and distinguished career. He has played a big role in building this company. His departure is not a result of the accounting issues at INTEQ announced December 8, 1999. The company does not anticipate that this change will delay the completion of its ongoing review. There is no indication that the impact of these issues will exceed the range that the company originally disclosed."
Joe B. Foster, 65, chairman of Newfield Exploration Company and immediate past chief executive officer and president of Newfield, has over forty years of experience in the oil and gas industry. He has been chairman of the board of Newfield since 1989 and will remain its non-executive chairman. Prior to founding Newfield in 1989, he was executive vice president of Tenneco Inc. from 1981 to 1988 and had earlier served as chairman and president of Tenneco Oil Company and chairman of Tenneco Gas Pipeline Group. Mr. Foster has just completed a term as chairman of the National Petroleum Council and has served as chairman of the Offshore Committee of the Independent Petroleum Association of America. Mr. Foster is also a director of New Jersey Resources Corporation and McDermott International. He is a graduate of Texas A&M with a B.S. in petroleum engineering and a B.B.A. in business administration.
Andrew J. Szescila, 52, is Senior Vice President of Baker Hughes Incorporated and has been employed by Baker Hughes for 27 years. Mr. Szescila has served as president of Hughes Christensen, BJ Services International and Baker Service Tools. He has also served as a marketing vice president for various divisions. He joined Baker Oil Tools in 1973 as a region engineer. Mr. Szescila earned a B.S. degree from Mississippi State University.
Baker Hughes will host a conference call on Monday, January 31, 2000 at 11:00 am eastern time (10:00 am central time) to discuss these changes. The dial-in number for the call is 888-324-8106 (U.S. callers) and 712-257-2494 (International callers). A replay of the call will also be available at 402-998-0659 until Friday February 4, 2000 at 6:00 pm eastern time. The call will also be webcast with a replay until February 4, 2000 on www.vcall.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "will", "should", "anticipate" and similar expressions are intended to identify forward-looking statements.
Baker Hughes' expectation regarding its markets is only its forecast. This forecast may be substantially different from actual market conditions, which are effected by the following factors: the effect of competition; the level of petroleum industry exploration and production expenditures; world economic conditions; price of, and the demand for, crude oil and natural gas; drilling activity; weather; the legislative environment in the United States and other countries; OPEC policy; conflict in the Middle East and other major petroleum-producing or consuming regions, the development of technology that lowers overall finding and development costs and the condition of the capital and equity markets.
Baker Hughes' expectations regarding the INTEQ accounting issues are only its forecasts regarding these matters. These forecasts may be substantially different from actual results, depending upon the final results and scope of the audit.
Baker Hughes is a leading supplier of reservoir-centered products, services and systems to the worldwide oil and gas industry and is a leading supplier of separation technologies to the worldwide process industries.
NOT INTENDED FOR BENEFICIAL HOLDERS
Gary R. Flaharty
Baker Hughes Incorporated
3900 Essex Lane
Houston, TX 77210-4740