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Joe B. Foster introduces Mike Wiley, Baker Hughes' new CEO

As today's news release reported, Michael E. Wiley will begin leading Baker Hughes Incorporated on August 14, 2000, when he officially becomes our new chairman, president and chief executive officer. Mike has 28 years of oilfield experience with a strong background in exploration, production and executive management. Most recently, he was president and chief operating officer of Atlantic Richfield Company (ARCO) until BP Amoco purchased it in May of this year.

“Mike Wiley is a strong leader and a tough-minded businessman, with hands-on technical and operating knowledge of the oilfield,” said Victor G. Beghini, retired Marathon president and chairman of the BHI board's search committee. “Mike clearly has the qualities we were looking for in a CEO.”

Mike was born and raised near Tulsa, Oklahoma. He earned his Petroleum Engineering degree from the University of Tulsa on a working scholarship from ARCO. In 1972, he joined ARCO full time in Lafayette as an offshore drilling engineer. Within a year, he was transferred to ARCO's international division where he spent two years as a troubleshooting engineer, solving problems in Indonesia, Iran and the North Sea. Then he settled in Copenhagen, where he served as a staff engineer for Arco's North Sea drilling and production operations. In 1977, he was transferred to ARCO Oil & Gas' headquarters in Dallas, where he worked as an upstream staff engineer and earned his M.B.A. from the University of Dallas.

In 1982, Mike moved to Alaska and took his first management assignment as Operations Manager for ARCO's Prudhoe Bay facilities group. During the difficult times of 1986, Mike returned to Dallas as ARCO's head of planning, where he focused on improving the oil and gas company's overall efficiency. In 1989, he became manager of ARCO's Southern District, which included its Gulf of Mexico operations, and in 1991 he was named Vice President of ARCO Exploration & Production Technology.

In 1993, Mike was promoted to President of ARCO Oil & Gas, and after a restructuring he became President of ARCO Southwest (Mid-Continent, Gulf Coast, Gulf of Mexico). In 1994, ARCO Southwest became Vastar, a publicly traded, independent oil and gas company, owned primarily by ARCO. With Mike Wiley as President, Vastar became a strong player in the deepwater Gulf of Mexico.

In 1998, Mike was promoted to President and Chief Operating Officer of ARCO, with full operational responsibility for a company with $10.3 billion in revenues and over $450 million in net income. An innovative leader at ARCO, Mike led a strategic initiative to improve performance by maximizing operating margins and establishing cost-effective alliances.

“I have respected Baker Hughes products and services for a long time,” Mike said when we announced his appointment. “I am looking forward to working closely with our employees, customers, and stockholders as we become the premier performer in the industry.”

“I am extremely pleased to be handing over the CEO's position to such a capable executive as Mike Wiley,” said interim-chairman Joe B. Foster. “He knows our industry, and has a track record of pushing for outstanding results. His capable leadership and excellent communications skills will serve Baker Hughes well as our markets continue to improve. I will continue to serve as interim CEO until Mike reports to work on August 14. Then, please join me in welcoming Mike Wiley to Baker Hughes.”

Success Stories from Baker Hughes Companies
State of the art Baker Oil Tools and INTEQ equipment and services have been selected in contracts valued over $7.5 million with Surgutneftegaz in Western Siberia. The equipment will be used in a number of multi-lateral and re-entry wells. Baker Hughes current technology and past experience were key elements for the awarding of the contracts.

Drilling fluids professionals from INTEQ are currently evaluating drilling fluids modules in the ADVANTAGE software system on a well operated by Pioneer Natural Resources, offshore Lafayette, Louisiana. Fluids engineers have generated over 75 daily mud reports at the well site and have successfully replicated them on the central ADVANTAGE database in Houston. As part of a three-day customer training school, the drilling fluids team also has introduced engineering applications within the ADVANTAGE system to Sonatrach in Algeria with highly successful results.

Project Renaissance reports about 23% of the combined total workforce for Baker Atlas, Baker Oil Tools and INTEQ now sign on to SAP daily. At the end of June, approximately 60% of the total planned end users have converted to SAP. Baker Petrolite recently converted their US financial operations, becoming the fifth BHI division using SAP. Baker Petrolite also recently transferred its IT, payroll and benefits processes to Business Support Services.

Western Geophysical has played a major role on appraisal wells in ultra deepwater fields in the Gulf of Mexico. Western Geo provided the 3-D data acquisition, processing and depth imaging on the Atlantis, Crazy Horse, and Mad Dog fields. In a recent news release, BP Amoco said it was very encouraged by the drilling in Atlantis and Crazy Horse, which have revealed multiple zones that were not encountered in the original discovery wells. BHP, a partner in Atlantis, is also "highly pleased" by the results, and issued its own release saying it expects reserve levels of "multi-hundred million barrels."

A drilling services team approach recently differentiated Baker Hughes from competitors to win a multi-well project for Marathon in the Big Horn Basin, Wyoming. The team - including Gary Ingmire, Hughes Christensen; Jerry Cercovnik, INTEQ-Drilling & Evaluation; and Dan Connell, INTEQ-Drilling Fluids - worked together to enhance ROP, improve wellbore stability, and achieve directional objectives. Three of the first four wells were drilled ahead of schedule, meeting client goals, and the second phase has already begun.

INTEQ and Hughes Christensen have saved Chevron more than $7.2 million (vs historical offsets) on an eight-well program in the Gulf of Mexico. A paper is now being developed for future publication on the GOM record time. It discusses reducing open-hole exposure and costly "flat" time through the use of appropriate bottomhole assemblies, motors, AKO settings, steerable ream-while-drilling tools and roller cone bits in addition to synthetic mud systems. All of these facilitated successful sidetrack operations that drilled an oversize (eccentric technology) hole and hit the directional targets in record time.

Baker Process South Africa was awarded an $840K order for a complete turnkey sedimentation system at Transhex Diamond's processing plant in NW Cape. The order includes two 10m E-Cat's, central feed distribution box, control instrumentation, underflow pumps and polymer make up and dosing system.

Notes on People/Events the Baker Hughes Global Account Manager for Shell
Alex Oliveira has been appointed VP of Sales for Baker Hughes Incorporated, reporting to Trevor Burgess, VP of Marketing and Technology. Alex will be based in Houston. Most recently Alex was the Baker Hughes Global Account Manager for Shell, based in the Hague. He joined Western Atlas in 1988 and has held numerous international marketing positions. Baker Hughes Global Account Managers now report directly to Alex. National Account Managers also report to him on a functional basis.

Baker Oil Tools Singapore has won the "SILVER AWARD" in the Ministry of Manpower's Annual Safety Performance Awards (ASPA) Scheme. The ASPA recognizes companies that have performed well in safety through the implementation of sound safety management systems. Congratulations to Jordan Tan, Wally Gottron and Gary Tan for their leadership in achieving the award and BOT Singapore employees for their outstanding individual efforts.

Report Card from Wall Street
· On 07/17 /00, BHI stock closed at $31.63 compared to $30.34 on 7/10/00, up 4.2%. The Oilfield Service Index of shares of our industry peers was up 3.7% for the same period.
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