Proposed Final Judgment and Competitive Impact Statement

DEPARTMENT OF JUSTICE

Antitrust Division

Proposed Final Judgment and Competitive Impact Statement

United States v. Halliburton Company and Dresser Industries, Inc.

Notice is hereby given pursuant to the Antitrust Procedures and

Penalties Act, 15 U.S.C. Sec. 16(b)-(h), that a proposed Final

Judgment, Stipulation and Order, and Competitive Impact Statement have

been filed with the United States District Court for the District of

Columbia in United States v. Halliburton Company and Dresser

Industries, Inc., Civil Action No. 98-CV-2340. The proposed Final

Judgment is subject to approval by the Court after the expiration of

the statutory 60-day public comment period and compliance with the

Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)-(h).

On September 29, 1998, the United States filed a Complaint seeking

to enjoin a transaction in which Halliburton Company (``Halliburton'')

would merge with Dresser Industries, Inc. (``Dresser''). The Complaint

alleges that the merger would combine two of four companies that

provide logging-while-drilling (``LWD'') services for oil and natural

gas drilling projects. Oil and gas companies use LWD tools and services

when drilling non-vertical wells, especially when drilling offshore.

While the drilling ongoing, sensors in

[[Page 58771]]

these tools send back data that allow the drillers to evaluate the

formation through which the drill bit is cutting. The formation

evaluation data assist the driller in locating oil and gas reserves.

Because LWD tools transmit formation data during the drilling, the

driller can detect changes in downhole pressure and prevent the drill

bit from straying out of the zone of oil and gas, thereby reducing the

time and risk of drilling. The Complaint alleges that the proposed

acquisition would substantially lessen competition in the provision of

LWD services in the United States in violation of Section 7 of the

Clayton Act, 15 U.S.C. 18.

The proposed Final Judgment orders defendants to sell Halliburton's

worldwide LWD Business, as defined in Schedule A of the Proposed Final

Judgment, to a purchaser acceptable to plaintiff in its sole

discretion. The Final Judgment and the stipulation and Order also

impose a hold separate agreement that, in essence, requires the

defendants to ensure that, until the divestiture mandated by the Final

Judgment has been accomplished, the LWD Business will be held separate

and apart from, and operated independently of, any of defendants' other

assets and businesses. A Competitive Impact Statement filed by the

United States describes the Complaint, the proposed Final Judgment, and

remedies available to private litigants.

Public comment is invited within the statutory 60-day comment

period. Such comments, and responses thereto, will be published in the

Federal Register and filed with the Court. Written comments should be

directed to Roger W. Fones, Chief, Transportation, Energy, and

Agriculture Section, Antitrust Division, 325 Seventh Street, N.W.,

Suite 500, Washington, DC 20530 (telephone: (202) 307-6351).

Copies of the Complaint, Stipulation and Order, proposed Final

Judgment, and Competitive Impact Statement are available for inspection

in Room 215 of the U.S. Department of Justice, Antitrust Division, 325

Seventh Street, N.W., Washington, DC 20530 (telephone: (202) 514-2481),

and at the office of the Clerk of the United States District Court for

the District of Columbia, 333 Constitution Avenue, N.W., Washington, DC

20001. Copies of any of these materials may be obtained upon request

and payment of a copying fee.

Constance K. Robinson,

Director of Operations and Merger, Enforcement, Antitrust Division.

Stipulation and Order

It is hereby Stipulated by and between the undersigned parties, by

their respective attorneys, as follows:

1. The Court has jurisdiction over the subject matter of this

action and over each of the parties hereto, and venue of this action is

proper in the United States Court for the District of Columbia.

2. The parties stipulate that a Final Judgment in the form hereto

attached may be filed and entered by the Court, upon the motion of any

party or upon the Court's own motion, at any time after compliance with

the requirements of the Antitrust Procedure and Penalties Act (15

U.S.C. Sec. 16), and without further notice to any party or other

proceedings, provided that plaintiff has not withdrawn its consent,

which it may do at any time before the entry of the proposed Final

Judgment by serving notice thereof on defendants and by filing that

notice with the Court.

3. Defendant shall abide by and comply with the provisions of the

proposed Final Judgment pending entry of the Final Judgment by the

Court, or until expiration of time for all appeals of any Court ruling

declining entry of the proposed Final Judgment, and shall, from the

date of the signing of this Stipulation by the parties, comply with all

the terms and provisions of the proposed Final Judgment as though they

were in full force and effect as an order of the Court.

4. This Stipulation shall apply with equal force and effect to any

amended proposed Final judgment agreed upon in writing by the parties

and submitted to the Court.

5. In the event that plaintiff withdraws its consent, as provided

in paragraph 2 above, or in the event that the proposed Final Judgment

is not entered pursuant to this Stipulation, the time has expired for

all appeals of any Court ruling declining entry of the proposed Final

Judgment, and the Court has not otherwise ordered continued compliance

with the terms and provisions of the proposed Final Judgment, then the

parties are released from all further obligations under this

Stipulation, and the making of this Stipulation shall be without

prejudice to any part in this or any other proceeding.

6. Defendants represent that the divestiture ordered in the

proposed Final Judgment can and will be made, and that the defendants

will later raise no claims of hardship or difficulty as grounds for

asking the Court to modify any of the divestiture provisions contained

therein.

Respectfully submitted,

For Plaintiff, United States of America:

Angela L. Hughes,

Member of the Florida Bar No. 211052, Attorney, Antitrust Division,

U.S. Department of Justice, 325 Seventh St., N.W., Suite 500,

Washington, DC 20530, (202) 307-6410 or (202) 307-6351, Facsimile:

(202) 307-2784.

Dated: September 29, 1998.

For Defendant, Halliburton Company:

Ky P. Ewing, Jr.,

District of Columbia Bar No. 41285, Vinson & Elkins L.L.P., The Willard

Office Building, 1455 Pennsylvania Avenue, N.W., Washington, DC 20004-

1008, (202) 639-6500.

For Defendant, Dresser Industries, Inc.:

David A. Hickerson,

District of Columbia Bar No. 414723, Weil, Gotshal & Manges L.L. P.,

1615 L Street, N.W., Washington, DC 20035, (202) 682-7000.

Order

It is So Ordered, this ______ day of ______, 1998.

----------------------------------------------------------------------

United States District Court Judge

Final Judgment

Whereas, plaintiff, the United States of America, filed its

Complaint in this action on September 29, 1998, and plaintiff and

defendants Halliburton Company (``Halliburton'') and Dresser

Industries, Inc. (``Dresser'') by their respective attorneys, having

consented to the entry of this Final Judgment without trial or

adjudication of any issue of fact or law herein, and without this Final

Judgment constituting any evidence against or an admission by any party

with respect to any issue of law or fact herein;

And Whereas, defendants have agreed to be bound by the provisions

of this Final Judgment pending its approval by the Court;

And Whereas, the essence of this Final Judgment is prompt and

certain divestiture of Halliburton's LWD Business to assure that

competition is not substantially lessened;

And Whereas, plaintiff requires defendants to make certain

divestitures for the purpose of remedying the loss of competition

alleged in the Complaint;

And Whereas, defendants have represented to the plaintiff that the

divestiture ordered herein can and will be made and that defendants

will later raise no claims of hardship or difficulty as grounds for

asking the Court to modify any of the divestiture requirements

contained below;

Now, Therefore, before the taking of any testimony, and without

trial or

[[Page 58772]]

adjudication of any issue of fact or law herein, and upon consent of

the parties hereto, it is hereby Ordered, Adjudged, and Decreed as

follows:

I. Jurisdiction

This Court has jurisdiction over defendants hereto and over the

subject matter of this action. The Complaint states a claim upon which

relief may be granted against defendants, as hereafter defined, under

Section 7 of the Clayton Act, as amended (15 U.S.C. Sec. 18).

II. Definitions

As used in this Final Judgment:

A. ``Dresser'' means Dresser Industries, Inc., a Delaware

corporation with its headquarters and principal place of business in

Dallas, Texas, and its; successors, assigns, subsidiaries, divisions,

groups, affiliates, partnerships and joint ventures, directors,

officers, managers, agents, and employees.

B. ``Halliburton'' means Halliburton Company, a Delaware

corporation with its headquarters and principal place of business in

Dallas, Texas, and its successors, assigns, subsidiaries, divisions,

groups, affiliates, partnerships and joint ventures, directors,

officers, managers, agents, and employees.

C. ``HESI'' means Halliburton Energy Services, Inc., a wholly owned

subsidiary of Halliburton.

D. ``Intellectual Property'' means intellectual property used in

connection with the use, manufacture and/or sale of the transferred LWD

and MWD tools and related software, including without limitation,

foreign and domestic patent applications and patents; trade secrets;

foreign and domestic copyrights and copyright registrations; and

foreign and domestic common law and registered trademarks or service

marks, and trademarks or service mark applications.

E. ``LWD Services'' means the services and products used to provide

real-time logging-while-drilling formation evaluation data is utilized

to evaluate the formation characteristics of a given geologic

formation. LWD Services also include MWD Services provided in

conjunction with LWD Services.

F. ``LWD Business'' means `HESI's worldwide business providing LWD

Services and includes the tangible and intangible assets, obligations,

and understandings set forth in Schedule A.

G. ``MWD Services'' means the services and products used in

drilling directional wells to provide real-time information about the

inclination and azimuth of downhole drilling tools at the bottom of the

hole.

H. ``Person'' means any natural person, corporation, association,

firm, relationship, or other business or legal entity.

III. Applicability

A. The provisions of this Final Judgment apply to each of the

defendants, their successors and assigns, their subsidiaries,

directors, officers, managers, agents, and employers, and all other

persons in active concert or participation with any of them who shall

have received actual notice of this Final Judgment by personal service

or otherwise.

B. Defendants shall require, as a condition of the sale or other

disposition of all or substantially all of the LWD Business, that the

acquiring party agree to be bound by the provisions of this Final

Judgment.

IV. Divestiture

A. Defendants are hereby ordered and directed in accordance with

the terms of this Final Judgment, within one hundred and eighty (180)

calendar days after this Final Judgment is filed by plaintiff or five

(5) days after notice of the entry of this Final Judgment by the Court,

whichever is later, to divest the LWD Business as an ongoing business,

in accordance with the terms and commitments set forth in Schedule A,

to an acquirer acceptable to plaintiff in its sole discretion.

B. Defendants shall use their best efforts to accomplish the

divestiture ordered by this Final Judgment as expeditiously and timely

as possible. Plaintiff, in its sole discretion, may extend the time

period for any divestiture for an additional period of time not to

exceed thirty (30) days.

C. In accomplishing the divestiture ordered by this Final Judgment,

defendants promptly shall make known, by usual and customary means, the

availability for sale of the LWD Business Defendants shall inform any

person making an inquiry regarding a possible purchase that the sale is

being made pursuant to this Final Judgment and provide such person with

a copy of the Final Judgment. Defendants shall also offer to furnish to

all prospective purchasers, subject to customary confidentiality

assurances, all information regarding the LWD Business customarily

provided in a due diligence process except such information subject to

attorney-client privilege or attorney work-product privilege.

Defendants shall make available such information to plaintiff at the

same time that such information is made available to any other person.

Defendants shall not interfere with any negotiations by any purchaser

to employ any Halliburton employee of the LWD Business.

D. Defendants shall permit prospective purchasers of the LWD

Business to have reasonable access to their personnel and to make such

inspection of the physical facilities and any and all of their

financial, operational, or other documents and information customarily

provided as part of a due diligence process.

E. Defendants shall not take any action, direct or indirect, that

will impede in any way the operation of the LWD Business.

F. Unless plaintiff otherwise consents in writing, divestiture

pursuant to Section IV, or by trustee appointed pursuant to Section V

of this Final Judgment, shall include all of the LWD Business, and

shall be accomplished in such a way as to satisfy plaintiff, in its

sole discretion, that the LWD Business can and will be used by the

purchaser as part of a viable, ongoing business engaged in the

provision of LWD Services. The divestiture, whether pursuant to Section

IV or Section V of this Final Judgment, shall be made (1) to a

purchaser who is demonstrated to plaintiff's sole satisfaction (a) to

have the capability and intent of competing effectively in LWD

Services, and (b) to have the managerial, operational, and financial

capability to compete effectively in LWD Services, and (2) on terms

none of which give defendants the ability unreasonably to raise the

purchaser's costs, to lower the purchaser's efficiency, or otherwise to

interfere in the ability of the purchaser to compete effectively.

G. Defendants shall not sell the LWD Business to Baker Hughes,

Inc., Schlumberger Limited, or any of their affiliates or subsidiaries

during the life of this decree.

V. Appointment of Trustee

A. In the event that defendants have not divested the LWD Business

within the time specified in Section IV of this Final Judgment, the

Court shall appoint, on application of the United States, a trustee

selected by plaintiff to effect the divestiture of the LWD Business.

Until such time as a trustee is appointed, defendants shall continue

their efforts to effect the divestiture as specified in Section IV.

B. After the appointment of a trustee becomes effective, only the

trustee shall have the right to sell the LWD Business. The trustee

shall have the power and authority to accomplish the divestiture at the

best price then obtainable upon a reasonable effort by the trustee,

subject to the provisions of Sections IV and VI

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of this Final Judgment, and shall have such other powers as the Court

shall deem appropriate. Subject to Section V(C) of this Final Judgment,

the trustee shall have the power and authority to hire at the cost and

expense of defendants any investment bankers, attorneys, or other

agents reasonably necessary in the judgment of the trustee to assist in

the divestiture, and such professionals and agents shall be accountable

solely to the trustee. The trustee shall have the power and authority

to accomplish the divestiture at the earliest possible time to a

purchaser acceptable to plaintiff in its sole discretion, and shall

have such other powers as this Court shall deem appropriate. Defendants

shall not object to a sale by the trustee on any grounds other than the

trustee's malfeasance. Any such objections by defendants must be

conveyed in writing to plaintiff and the trustee within ten (10)

calendar days after the trustee has provided the notice required under

Section VI of this Final Judgment.

C. The trustee shall serve at the cost and expense of defendants,

on such terms and conditions as the Court may prescribe, and shall

account for all monies derived from the sale of the assets sold by the

trustee and all costs and expenses so incurred. After approval by the

Court of the trustee's accounting, including fees for its services and

those of any professionals and agents retained by the trustee, all

remaining money shall be paid to defendants, and the trust shall then

be terminated. The compensation of such trustee and of any

professionals and agents retained by the trustee shall be reasonable in

light of the value of the divested business and based on a fee

arrangement providing the trustee with an incentive based on the price

and terms of the divestiture and the speed with which it is

accomplished.

D. Defendants shall use their best efforts to assist the trustee in

accomplishing the required divestiture, including their best efforts to

effect all necessary regulatory approvals. The trustee and any

consultants, accountants, attorneys, and other persons retained by the

trustee shall have full and complete access to the personnel, books,

records, and facilities of the business to be divested, and Defendants

shall develop financial or other information relevant to the business

to be divested customarily provided in a due diligence process as the

trustee may reasonable request, subject to customary confidentiality

assurances. Defendants shall permit bona fide prospective purchasers of

the assets to have reasonable access to their personnel and to make

such inspection of physical facilities and any and all financial,

operational or other documents and other information as may be relevant

to the divestiture required by this Final Judgment.

E. After its appointment, the trustee shall file monthly reports

with the parties and the Court setting forth the trustee's efforts to

accomplish the divestiture ordered under this Final Judgment; provided,

however, that to the extent such reports contain information that the

trustee deems confidential, such reports shall not be filed in the

public docket of the Court. Such reports shall include the name,

address and telephone number of each person who, during the preceding

month, made an offer to acquire, expressed an interest in acquiring,

entered into negotiations to acquire, or was contacted or made an

inquiry about acquiring, any interest in the business to be divested,

and shall describe in detail each contact with any such person during

that period. The trustee shall maintain full records of all efforts

made to divest the LWD Business.

F. If the trustee has not accomplished such divestiture within six

(6) months after its appointment, the trustee thereupon shall file

promptly with the Court a report setting forth (1) the trustee's

efforts to accomplish the required divestiture, (2) the reasons, in the

trustee's judgment, why the required divestiture has not been

accomplished, and (3) the trustee's recommendations; provided, however,

that to the extent such reports contain information that the trustee

deems confidential, such reports shall not be filed in the public

docket of the Court. The trustee shall at the same time furnish such

report to the parties, who shall each have the right to be heard and to

make additional recommendations consistent with the purpose of the

trust. The Court shall enter thereafter such orders as it shall deem

appropriate in order to carry out the purpose of the trust which may,

if necessary, include extending the trust and the term of the trustee's

appointment by a period requested by plaintiff.

VI. Notification

Within two (2) business days following execution of a definitive

agreement, contingent upon compliance with the terms of this Final

Judgment, to effect, in whole in part, any proposed divestiture

pursuant to Section IV or V of this Final Judgment, defendants or the

trustee, whichever is then responsible for effecting the divestiture,

shall notify plaintiff of the proposed divestiture. If the trustee is

responsible, it shall similarly notify defendants. The notice shall set

forth the details of the proposed transaction and list the name,

address and telephone number of each person not previously identified

who offered to, or expressed an interest in or a desire to, acquire any

ownership interest in the business to be divested, together with full

details of same. Within fifteen (15) calendar days of receipt by

plaintiff of such notice, plaintiff may, in its sole discretion,

request from defendants, the proposed purchaser or purchasers, or any

other third party, additional information concerning the proposed

divestiture and the proposed purchaser. Defendants and the trustee

shall furnish any additional information requested from then within

fifteen (15) calendar days of the receipt of the request, unless the

parties shall otherwise agree. Within thirty (30) calendar days after

receipt of the notice of within twenty (20) calendar days after

plaintiff has been provided with the additional information requested

from defendants, the proposed purchaser or purchasers, and any third

party, whichever is later, plaintiff shall provide written notice to

defendants and the trustee, if there is one, stating whether or not it

objects to the proposed divestiture. If plaintiff provides written

notice to defendants and the trustee that it does not object, then the

divestiture may be consummated, subject only to defendants' limited

right to object to the sale under Section V(B) of this Final Judgment.

Absent written notice that plaintiff does not object to the proposed

purchaser or upon objection by the plaintiff, a divestiture proposed

under Section IV or V may not be consummated. Upon objection by

defendants under the provision in Section V(B), a divestiture proposed

under Section V shall not be consummated unless approved by the Court.

VII. Affidavits

A. Within twenty (20) calendar days of the filing of the Complaint

in this matter and every thirty (30) calendar days thereafter until the

divestiture has been completed, whether pursuant to Section IV or

Section V of this Final Judgment, defendants shall deliver to plaintiff

an affidavit as to the fact and manner of compliance with Section IV or

V of this Final Judgment. Each such affidavit shall include, inter

alia, the name, address, and telephone number of each person who, at

any time after the period covered by the last such report, made an

offer to acquire, expressed an interest in acquiring, entered into

negotiations to acquire, or was contacted or made an inquiry about

[[Page 58774]]

acquiring, any interest in the business to be divested, and shall

describe in detail each contact with any such person during that

period. Each such affidavit shall also include a description of the

efforts that defendants have taken to solicit a purchaser for the

relevant business and to provide required information to prospective

purchasers including the limitations, if any, on such information.

B. Within twenty (20) calendar days of the filing of the Complaint

in this matter, defendants shall deliver to plaintiff an affidavit

which describes in detail all actions defendants have taken and all

steps defendants have implemented on an on-going basis to perserve the

LWD Business pursuant to Section VIII of this Final Judgment. The

affidavit also shall describe, but not be limited to, defendants'

efforts to maintain and operate the LWD Business as an active

competitor, maintain the management, staffing, research and development

activities, sales, marketing and pricing of the LWD Business, and

maintain the LWD Business in operable condition at current capacity

configurations. Defendants shall deliver to plaintiff an affidavit

describing any changes to the efforts and actions outlined in

defendants' earlier affidavit(s) filed pursuant to this Section within

fifteen (15) calendar days after the change is implemented.

C. Until one year after such divestiture has been completed,

defendants shall preserve all records of all efforts made to preserve

the business to be divested and effect the divestiture.

VIII. Preservation of Assets

Until the divestiture required by the Final Judgment has been

accomplished:

A. Defendants shall take all steps necessary to assure that the LWD

Business will be maintained as a separate and independent, economically

viable, ongoing business with its assets (including Intellectual

Property, management, operations, and books and records) separate,

distinct, and apart from those of defendants. Defendants shall use all

reasonable efforts on behalf of themselves and the LWD Business to

maintain and increase sales of LWD Services, continue current plans for

research, development, and testing of LWD Services, and otherwise

maintain the business as a viable and active competitor. Defendants

shall take no action that would jeopardize the sale of the LWD

Business.

B. Defendants shall not sell, lease, assign, transfer or otherwise

dispose of, or pledge as collateral for loans (except such loans as are

currently outstanding or replacements or substitutes therefore), assets

required to be divested pursuant to Section IV or V, except that any

component of such assets as is replaced in the ordinary course of

business with a newly purchased, assembled, remanufactured or

manufactured component may be sold or otherwise disposed of, provided

the newly purchased, assembled, remanufactured or manufactured

component is so identified as a replacement component for one to be

divested.

C. Defendants shall provide and maintain sufficient working capital

to maintain the LWD Business as a viable, ongoing business consistent

with the requirements of Section VIII(A).

D. Defendants shall preserve the assets required to be divested

pursuant to Section IV or V, except those replaced with newly acquired

assets in the ordinary course of business, in a state of repair equal

to their state of repair as of the date this Final Judgment is filed,

ordinary wear and tear excepted. Defendants shall preserve the

documents, books, and records relating to the LWD Business until the

date of divestiture of the LWD Business.

E. Except in the ordinary course of business, Defendants shall

refrain from terminating or altering current employment, salary, or

benefit agreements for any executive or managerial person whose

principal responsibilities are with the LWD Business, or for any sales,

manufacturing, marketing, engineering, or other technical person of the

LWD Business. Defendants shall also refrain from transferring any

employee so employed without the prior approval of plaintiff.

F. Defendants shall use all reasonable efforts to maintain the

manufacturing activities of the LWD Business, and shall maintain at a

level no less than the highest level since February 25, 1998, research

and development funding, promotional, advertising, sales, technical

assistance, marketing, and merchandising support for the LWD Business.

G. Defendants shall provide and maintain sufficient lines and

sources of credit to maintain the LWD Business as an economically

viable, ongoing business.

H. Defendants shall take all steps necessary to ensure that the

facilities associated with the LWD Business are fully maintained in

operable condition at no lower than their current rated capacity, and

shall maintain and adhere to normal repair and maintenance schedules

for the LWD Business.

I. Defendants shall maintain, in accordance with sound accounting

principles, separate, true, accurate and complete financial ledgers,

books and records that report, on a periodic basis, such as the last

business day of every month, consistent with past practices, the

assets, liabilities, expenses, revenues, income, profit and loss of the

LWD Business.

J. Defendants shall take no action that would interfere with the

ability of any trustee appointed pursuant to the Final Judgment to

complete the divestiture pursuant to the Final Judgment to a suitable

purchaser.

K. Until such time as the LWD Business is divested, the assets to

be divested shall be managed by a person appointed by Halliburton

within ten (10) business days of consummation of the merger of

Halliburton and Dresser, subject to plaintiff's approval. The person so

appointed shall have complete managerial responsibility for the LWD

Business, subject to the provisions of this Order and the Final

Judgment. In the event that the person becomes unable to perform his

duties, defendants shall appoint, subject to plaintiff's approval, a

replacement within ten (10) business days. Should defendants fail to

appoint a replacement acceptable to plaintiff within ten (10) business

days, plaintiff shall appoint a replacement.

IX. Financing

Defendants are ordered and directed not to finance all or any part

of any purchase by purchaser made pursuant to Sections IV or V of this

Final Judgment.

X. Compliance Inspection

For purposes of determining or securing compliance with the Final

Judgment and subject to any legally recognized privilege, from time to

time.

A. Duly authorized representatives of the United States Department

of Justice, upon written request of the Attorney General or of the

Assistant Attorney General in charge of the Antitrust Division, and on

reasonable notice to defendants made to their principal offices, shall

be permitted:

1. Access during office hours of defendants to inspect and copy all

books, ledgers, accounts, correspondence, memoranda, and other records

and documents in the possession or under the control of defendants, who

may have counsel present, relating to the matters contained in this

Final Judgment; and

2. Subject to the reasonable convince of defendants and without

restraint or interference from them, to interview, either informally or

on the record, their officers, employees, and agents, who

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may have counsel present, regarding any such matters.

B. Upon the written request of the Attorney General of the

Assistant Attorney General in charge of the Antitrust Division, made to

defendants' principal offices, defendants shall submit such written

reports, under oath if requested, with respect to any matter contained

in the Final Judgment.

C. No information or documents obtained by the means provided in

Sections VII or X of this Final Judgment shall be divulged by a

representative of the plaintiff to any person other than a duly

authorized representative of the Executive Branch of the United States,

except in the course or legal proceedings to which the United States is

a party (including grand jury proceedings), or for the purpose of

securing compliance with this Final Judgment, or as otherwise required

by law.

D. If at the time information or documents are furnished by

defendants to plaintiff, defendant represent and identify in writing

the material in any such information or documents to which a claim of

protection may be asserted under Rule 26(c)(7) of the Federal Rules of

Civil Procedure, and defendants mark each pertinent page of such

material: ``Subject to claim of protection under Rule 26(c)(7) of the

Federal Rules of Civil Procedure,'' then ten (10) calendar days notice,

if practicable, shall be given by plaintiff to defendants prior to

divulging such material in any legal proceeding (other than a grand

jury proceeding) to which each defendant is not a party.

XI. Retention of Jurisdiction

Jurisdiction is retained by this Court for the purpose of enabling

any of the parties to this Final Judgment to apply to this Court at any

time for such further orders and directions as may be necessary or

appropriate for the construction or carrying out of this Final

Judgment, for the modification of any of the provisions hereof, for the

enforcement of compliance herewith, and for the punishment of any

violations hereof.

XII. Termination

Unless this Court grants an extension, this Final Judgment will

expire upon the tenth anniversary of the day of its entry.

XIII. Public Interest

Entry of this Final Judgment is in the public interest.

Dated __________, 1998.

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United States District Judge

Schedule A

1. LWD and MWD Tools

Subject to the other provisions of this Schedule A, HESI shall

transfer to purchaser all of its LWD tools and such quantity of MWD

tools as will allow purchaser to operate such LWD tools. Such LWD tools

shall include the following tools:

------------------------------------------------------------------------

Approximate

current

quantity

------------------------------------------------------------------------

LWD:

CWRGM Resistivity--GR Tool............................ 111

DNSC Density--Neutron Tool............................ 53

SCWR Slim Resistivity Tool............................ 42

------------------------------------------------------------------------

In order to allow purchaser to operate such LWD tools, HESI will

transfer the following MWD tools to purchaser:

------------------------------------------------------------------------

MWD:

HDSM Directional Tool (positive pulse) 95

HDS1 MWD Kits (positive pulse) 17

RX4 MLWD Surface System............................... 50

------------------------------------------------------------------------

Included with such tools shall be the software required to operate

such tools in their current mode of operation by HESI and a hard copy

and copy of all computer tapes and discs containing any data in the

possession or control of HESI (but not data owned by a customer unless

the customer consents) that record the performance anywhere of those

tools, together with instructions and all other materials necessary to

use or interpret the data. HESI will use its best efforts to obtain the

consent of customers who own such data that is in its possession or

control.

2. Sonic Tools

HESI shall transfer to purchaser 50% of its CLSS Sonic Tools

(approximately 23 tools), 50% of its SCLSS Sonic (slim) Tools

(approximately 9 tools), and 50% of its Sonic Workstations

(approximately 7 workstations). HESI will also grant to purchaser a

worldwide, royalty-free, irrevocable, non-exclusive license covering

HESI's Intellectual Property for the use, manufacture and sale of such

Sonic Tools. Such license will not be subject to any requirement to

grant back to HESI rights to any improvements made by purchaser to such

tools.

Included with such tools shall be the software necessary to operate

such tools in their current mode of operation by HESI and a hard copy

and copy of all computer tapes and discs containing any data in the

possession or control of HESI (but not data owned by a customer unless

the customer consents) that record the performance anywhere of those

tools, together with instructions and all other materials necessary to

use or interpret the data. HESI will use its best efforts to obtain the

consent of customers who own such data that is in its possession or

control. HESI shall be permitted to offer Sonic LWD services worldwide

using the Sonic LWD tools and workstations it retains. HESI shall be

permitted to rent from purchaser sufficient other HESI LWD tools to

allow it to provide sonic LWD services until such tine as HESI is able

to adapt its sonic LWD tools to operate in real time with LWD tools

acquired from Dresser Industries, Inc., but in any event not longer

than 12 months after the merger of Halliburton Company and Dresser

Industries, Inc. is consummated. To the extent and for the period that

HESI retains LWD tools (other than sonic tools) for such purpose, it

shall pay purchaser a reasonable rental amount for such retained tools.

3. Buildings

(a) In the United States, the LWD Business is operated from the

HESI-owned Lafayette, Louisiana service center, which is a 63,400 sq.

ft. facility located on a 9.8 acre site, and configured for the storage

of radioactive well logging sources. HESI shall transfer to purchaser

the entire Lafayette facility, including all workshop, testing, and

repair equipment required for the maintenance of the tools.

(b) With respect to equipment and facilities located outside the

United States which are used by HESI to conduct the LWD Business, HESI

will transfer to purchaser all workshop, testing, and repair equipment

used by HESI to conduct the LWD Business and such of the buildings HESI

owns or leases which are used solely for purposes of conducting the LWD

Business. Where HESI conducts its LWD Business from a facility that is

also used by HESI for other purposes, HESI will transfer such workshop,

testing and repair equipment to purchaser at a nearby facility of

purchaser's selection which purchaser has acquired for such purpose. In

those areas where, following the merger of Halliburton Company and

Dresser Industries, Inc., a facility formerly used by one of the

companies to provide LWD services will not be used by HESI to provide

LWD services, purchaser will have the option to

[[Page 58776]]

acquire that facility from HESI as part of the LWD Business.

4. Manufacturing

(a) HESI will transfer to purchaser manufacturing, assembly,

testing, calibration and other machinery and equipment, including

related software, to equip a building, to be supplied by purchaser,

with sufficient equipment to permit purchaser to conduct the

manufacturing, assembly, testing, and calibration of LWD tools and MWD

tools used in conjunction with the LWD tools currently performed by

HESI (with the exception of a test well). HESI will make its current

test well in Fort Worth, TX available to purchaser for a period of two

years for a charge not to exceed the amount charged by AMOCO at its

test well in Catoosa, OK, which is available on a rental basis to the

industry. This transferred equipment shall include HESI designed

automated test equipment and accelerated stress screen test equipment,

and standard injection molding equipment used to ``pott'' circuit

boards in shock resistant elastomer. Also included will be a hydraulic

shake table used to perform tool chassis testing. HESI will provide

purchaser with copies of all drawings, histories, manuals, lab

notebooks, blueprints, designs, design protocols, specifications for

materials, specifications for parts and devices, and quality assurance

control procedures and other records maintained by HESI related to the

tools specified in paragraphs 1 and 2.

(b) A reasonable number of employees whose qualifications are

suited to conduct the management of the manufacturing, assembly,

testing or calibration process will be selected by purchaser from a

list HESI shall supply to purchaser of all of its skilled technical and

management employees who work in the manufacturing, assembly, testing,

or calibration of LWD tools and MWD tools used in conjunction with the

LWD tools, which list shall include their expertise, qualifications,

job descriptions, salary, date of hire, and all other information from

the employee's personnel file that HESI can legally provide to

purchaser. Purchaser will be responsible for offering such employees

such compensation and benefit program as will induce such persons

voluntarily to agree to leave HESI's employment and become employees of

purchaser. HESI will use its best efforts to work with purchaser to

make reasonable arrangements to cause such employees to accept such

employment by purchaser.

(c) If at the time of sale there exist continuing contract

obligations of HESI to sell or maintain or support LWD tools previously

sold to third-parties, HESI shall identify and purchaser shall assume

such obligations.

5. R&D

HESI will deliver to purchaser R&D equipment, including related

software, and copies of tool histories, development records and

laboratory records related to the LWD tools and MWD tools listed in

paragraphs 1 and 2, including the results of unsuccessful designs. HESI

will provide purchaser, at a location to be supplied by purchaser, a

LWD research laboratory capable of conducting the research projects

existing at any time on or after February 25, 1998 with respect to

existing LWD or MWD tools or new tools that extend the technology

contained in the tools listed in paragraphs 1 and 2. A reasonable

number of employees whose technical qualifications are suited to

conduct the types of LWD research and development purchaser wishes to

conduct will be selected by purchaser from HESI's current LWD technical

staff. HESI shall supply to purchaser a complete list of all its LWD

technical staff members who have participated in any research projects

with respect to LWD or MWD tools, including their expertise,

qualifications, job descriptions, salary, date of hire, and all other

information from the employee's personnel file that HESI can legally

provide to purchaser. Purchaser will be responsible for offering such

employees such compensation and benefit programs as will induce such

persons voluntarily to agree to leave HESI's employment and become

employees of purchaser. HESI will use its best efforts to work with

purchaser to make reasonable arrangements to cause such employees to

accept employment by purchaser.

6. Licenses

(a) HESI will grant to purchaser a worldwide, royalty-free,

irrevocable, non-exclusive license covering HESI owned Intellectual

Property. Purchaser shall not be granted any rights, including

trademarks and service marks, associated with the use of the trade

names or commercial names of Halliburton or HES; provided, however,

that in the marketing of LWD services using LWD or MWD tools acquired

from HESI, purchaser will possess the right following the date of the

purchase of the LWD Business to identify its LWD and MWD tools as being

manufactured pursuant to a license from HESI and its LWD Business as

having been acquired from HESI. Such license will not be subject to any

requirement that purchaser grant back to HESI rights to any

improvements made by purchaser to such tools.

(b) HESI will grant to purchaser sublicenses covering the use of

third-party technology and related software embodied in the transferred

LWD and MWD tools and software, to the extent permitted by its licenses

from such third parties. Such sublicenses will not be subject to any

requirement that purchaser grant back to HESI rights to any

improvements made by purchaser to such tools. To the extent that the

third party licenses do not permit HESI to grant purchaser a

sublicense, HESI will identify each such third party license and use

its best efforts to assist purchaser in obtaining a license from the

third party.

7. Contracts

(a) At the time of sale, HESI will assign to purchaser all of its

contracts with customers to provide LWD services in the United States,

or to the extent applicable, portions of contracts to provide LWD

services in the United States that are outstanding at closing. To the

extent not assignable, HESI will use its best efforts to obtain for

purchaser the benefit of such contracts by designating purchaser as

HESI's agent for the purposes of performing such contracts and paying

to purchaser all monies due under such contracts for the performance of

such LWD services.

(b) At the time of sale, HESI will assign to purchaser all of its

contracts with customers to provide LWD Services outside the United

States, or to the extent applicable, portions of contracts to provide

LWD Services that are outstanding at closing. To the extent not

assignable or to the extent that the assignment is unacceptable to the

customer, in order to allow HESI to complete contracts existing at the

time of sale any resulting from the award under a tender outstanding at

the date of sale, HESI shall be allowed to rent from purchaser such LWD

and MWD tools, and to use equipment and facilities of the LWD Business

and such employees of the LWD Business as are reasonably required for

HESI to complete the performance of LWD Services under such contracts.

HESI shall pay to purchaser a reasonable rental amount for such tools,

equipment, facilities, and employees during the period from the close

of the sale of the LWD Business to the time such contracts are

completed.

[[Page 58777]]

8. Employees

Subject to the other terms of this Schedule A, HESI and purchaser

will enter into commercially reasonable arrangements for purchaser to

employ such of the employees of the LWD Business as purchaser requires

to operate the LWD Business.

9. Customer Lists, Credit Records, and Supplied/Vendor Lists and

Supplier/Vendor Contracts

HESI will transfer to purchaser its lists of customers, customer

credit records, and supplier/vendor lists and supplier/vendor contracts

for its LWD Business anywhere in the world.

10. Technical Support and Training

HESI will transfer to purchaser technical support and training

services employees and related assets with respect to the LWD Business.

Purchaser will be responsible for offering such employees such

compensation and benefit programs as will induce such persons

voluntarily to agree to leave HESI's employment and become employees of

purchaser. HESI shall be permitted to utilize the services of

sufficient technical support and training services employees and

related assets to the extent required for HESI to complete the

contracts referred to in paragraph 7(b). To the extent and for the

period that HESI utilizes the services of technical support and

training services employees and related assets, it shall pay purchaser

a reasonable fee for those services.

11. Spare Parts

HESI's inventory of spare parts and consumables relating to the LWD

Business will be transferred to purchaser, provided, however, that the

inventory of Sonic LWD tool parts shall be divided between HESI and

purchaser in the same proportions as the Sonic tools are divided

pursuant to paragraph 2. Purchase will agree to sell to HESI at

reasonable prices spare parts sufficient to permit HESI to complete the

contracts referred to in paragraph 7(b).

12. Continuing LWD Services

HESI agrees that after the sale of the LWD Business it will not

offer LWD services, directly or indirectly, including by a licensee

other than purchaser, anywhere in the world using any of the HESI tools

of the type sold to purchaser, except (i) LWD services necessary to

complete the contracts referred to in paragraph 7(b); (ii) LWD services

using LWD tools acquired from Dresser; and (iii) sonic LWD services

using sonic LWD tools of the type sold to purchaser. Further, HESI may

continue to use the underlying technology licensed to purchaser in its

wireline logging tools and other products and in Dresser tools.

13. No Transfer of Acquired Assets

HESI may require purchaser to agree that it will not transfer by

any means any of the tangible or intangible property or assets it

acquires from HESI to either Schlumberger Limited, or Baker Hughes

Incorporated, or their affiliates for the life of the consent decree.

This provision does not prevent purchaser from making the property or

assets available to any joint venture in which it participated.

Excluded assets:

Excluded from the LWD Business are (1) all business, assets and

technology of Dresser Industries, Inc. which is being acquired by

Halliburton; (2) all business, assets and technology of NUMAR; and (3)

Intellectual Property, except to the extent provided in paragraphs 2

and 6.

Certificate of Service

I hereby certify that I have caused a copy of the foregoing

Complaint and proposed Final Judgment to be served on counsel for

defendants in this matter in the manner set forth below:

By first class mail, postage prepaid, and by facsimile:

Helene D. Jaffe, Esquire, Weil, Gotshal & Manges, 767 Fifth Avenue, New

York, NY 10153

Ky P. Ewing, Esquire, Vinson & Elkins, 1455 Pennsylvania Avenue, N.W.,

Washington, D.C. 20004-1008

Andrew K. Rosa,

Antitrust Division, U.S. Department of Justice, 325 Seventh Street,

N.W., Suite 500, Washington, D.C. 20530, (202) 307-0886, (202) 616-2441

(Fax).

Competitive Impact Statement

The United States, pursuant to Section 2(b) of the Antitrust

Procedures and Penalties Act (``APPA''), 15 U.S.C. Sec. 16(b)-(h),

files this Competitive Impact Statement relating to the proposed Final

Judgment submitted for entry in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

On September 29, 1998, the United States filed a civil antitrust

Complaint alleging that the proposed merger of Dresser Industries, Inc.

(``Dresser'') and Halliburton Company (``Halliburton'') would violate

Section 7 of the Clayton Act, 15 U.S.C. Sec. 18. The Complaint alleges

that Halliburton and Dresser are two of only four companies that

provide logging-while-drilling (``LWD'') services to oil and gas

drilling companies and are the only sources of current and likely

future innovations in new and improved LWD tools. The request for

relief in the Complaint seeks: (1) a judgment that the proposed merger

would violate Section 7 of the Clayton Act; (2) a permanent injunction

preventing consummation of the merger agreement; (3) an award of costs

to the plaintiff; and (4) such other relief as the Court may deem just

and proper.

When the Complaint was filed, the United States also filed a

proposed settlement that would permit the merger of Halliburton and

Dresser to proceed, but require a divestiture that will preserve

competition in the market for provision of LWD services. This

settlement consists of a Stipulation and Order and a proposed Final

Judgment. The proposed Final Judgment orders defendants to divest ``the

LWD business,'' which is described in Schedule A of the proposed Final

Judgment, within one hundred and eighty (180) calendar days after the

filing of the Final Judgment in this matter, or five (5) days after

notice of the entry of the Final Judgment by the Court, whichever is

later. The purchaser of the LWD Business must be acceptable to the

Antitrust Division of the Department of Justice (``DOJ''). The LWD

Business includes virtually all of Halliburton's LWD tools; sufficient

measurement-while-drilling (``MWD'') tools for use with the LWD tools;

manufacturing equipment; workshop, testing, and repair equipment used

by Halliburton to conduct the LWD Business anywhere in the world;

research and development equipment; Halliburton's Lafayette, Louisiana,

facility and the option to acquire facilities outside the United States

previously used by Halliburton or Dresser to provide LWD services that

will not continue to be used by Halliburton; the right to hire

employees of the LWD Business as the purchaser requires to operate the

LWD business, including a reasonable number of employees to manage the

manufacture, assembly, testing or calibration of LWD tools and

associated MWD tools and to conduct LWD research and development; and

worldwide, royalty-free, irrevocable licenses to the intellectual

property used in connection with the use, manufacture, or sale of the

transferred tools.

The plaintiff and defendants have stipulated that the proposed

Final Judgment may be entered after compliance with the APPA. Entry of

the proposed final Judgment would terminate the action, except that the

Court would retain jurisdiction to construe, modify, or enforce the

[[Page 58778]]

provisions of the proposed Final Judgment and to punish violations

thereof.

II. Description of the Events Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction

Halliburton is a Delaware corporation, with its principal office in

Dallas, Texas. It provides products and services for the exploration,

development, and production of oil and natural gas. It is one of the

``Big Four'' oil field service companies--along with Dresser and two

other companies. In 1997, Halliburton had revenues of over $8 billion.

Dresser is also a Delaware corporation headquartered in Dallas, Texas.

In 1997, it reported total sales of about $7.5 billion.

On February 25, 1998, Halliburton and Dresser entered into an

Agreement and Plan of Merger under which Halliburton would merge with

Dresser. This transaction, which would increase concentration in the

already highly concentrated market for the provision of LWD services,

precipitated the government's suit.

B. The LWD Service Market

Oil and gas companies use data from LWD tools, which are placed

behind the drill bit, to guide drilling operations, particularly in

offshore drilling projects. The data from LWD tools, which is

transmitted to the surface while the drilling is ongoing, allows the

driller to evaluate the formation that the drill bit is cutting. With

this data, the driller can detect changes in downhole pressure, prevent

the drill bit from straying out or oil or gas deposits, and otherwise

determine the optimum drilling path.

There are four types of LWD tools, each of which provide different

data to evaluate the formation: (1) gamma ray, (2) resistivity, (3)

neutron density, and (4) sonic. Gamma ray tools, which are the most

rudimentary LWD tools, identify the type of formation (e.g., shale or

sand) by measuring natural radioactivity. Data from LWD resistivity

tools help detect the presence of oil, gas, and water in the formation.

Data from LWD neutron density and sonic tools help determine the

formation's porosity, which indicates the amount of liquid in the

formation and the formation's permeability.

There are no realistic substitutes for LWD services for offshore

drilling projects. Drillers can use wireline logging tools to gather

similar data, but, in order to use wireline logging, they must cease

drilling, remove the drill from the well, lower tools into the well by

wire, collect data downhole, remove the tools, and read the data on the

surface. During this entire operation, which may take as long as a day

and a half, the drilling rig sits idle (costing the operator $250,000

to $300,000 per day in deepwater areas of the Gulf of Mexico), which

makes wireline logging much more expensive than LWD services. A small

but significant and nontransitory increase in the price of LWD services

would not cause a significant number of customers drilling offshore

wells to switch to wireline services, or to any other method for

obtaining formation evaluation data.

C. Harm to Competition as a Consequence of the Merger

Halliburton and Dresser are two of only four firms that provide the

full range of LWD services. The proposed transaction would reduce to

three the number of firms providing the full range of LWD services in

the United States.

Moreover, successful entry into the market for provision of LWD

services would be difficult, time-consuming, and costly. Even if a new

entrant invested in the research, development, and engineering programs

required to produce the current generation of LWD tools, it would also

have to engage in extensive testing, and, over a course of years,

eventually establish a reputation for quality and reliability--

particularly for customers drilling offshore for whom the costs of

delay due to failure of LWD tools can be great.

Halliburton and Dresser are also two of only four firms that are

engaged in the research, development, and commercialization of new LWD

tools. Competition between these firms to develop new and better LWD

tools is important to oil and gas companies, in order to minimize the

per-barrel cost of producing oil and gas. This competition has hastened

the pace of innovation and given customers a variety of solutions to

their formation evaluation needs.

The Complaint alleges that the transaction would have the following

effects, among others:

a. Actual and potential competition between Halliburton and Dresser

will be eliminated;

b. Competition generally in the provision of LWD services will

likely be substantially lessened;

c. Prices for LWD services will likely increase; and

d. Competition in the development, commercialization, and

improvement of LWD tools will likely be substantially lessened.

III. Explanation of the Proposed Final Judgment

The provisions of the proposed Final Judgment are designed to

eliminate the anticompetitive effects of the proposed merger of

Halliburton and Dresser.

The proposed Final Judgment provides that, within one hundred and

eighty (180) calendar days after the filing of the Final Judgment in

this matter, or five (5) days after notice of the entry of the Final

Judgment by the Court, whichever is later, defendants must divest the

LWD Business to an acquirer acceptable to DOJ. If defendants fail to

divest the LWD Business within this period, a trustee, selected by DOJ,

will be appointed by the Court to sell the LWD Business.

The Final Judgment provides that defendants will pay all costs and

expenses of the trustee. After the trustee's appointment becomes

effective, the trustee will file monthly reports with the parties and

the Court, setting forth the trustee's efforts to accomplish

divestiture. At the end of six months, if the divestiture has not been

accomplished, the trustee and the parties will have the opportunity to

make recommendations to the Court, which shall enter such orders as

appropriate in order to carry out the purpose of the trust, including

extending the trust and the term of the trustee's appointment.

Section IV of the proposed Final Judgment requires defendants to

divest ``the LWD Business' as an ongoing business to a purchaser

acceptable to the United States in its sole discretion. ``The LWD

Business'' is defined as Halliburton Energy Services, Inc.'s (``HESI'')

worldwide business providing LWD Services and includes the tangible and

intangible assets, obligations, and understandings set forth in

Schedule A of the proposed Final Judgment.\1\

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\1\ HESI is a wholly owned subsidiary of Halliburton. ``LWD

Services'' means the services and products used to provide real-time

logging-while-drilling formation evaluation data which is utilized

to evaluate the formation characteristics of a given geologic

formation. LWD Services also include MWD Services provided in

conjunction with LWD Services. MWD tools are used when drilling non-

vertical wells to measure and transmit data from downhole during the

drilling process on the inclination and azimuth of the downhole

drilling tools. When LWD tools are used, the driller also uses MWD

tools, and the driller usually obtains both types of tools from the

same company because the MWD tools and LWD tools must be compatible.

---------------------------------------------------------------------------

The assets to be divested include:

(1) HESI's resistivity tools, density-neutron tools, and slim

resistivity tools;

(2) half of Halliburton's sonic tools and sonic workstations;

(3) enough MWD tools to allow the purchaser to operate these LWD

tools;

[[Page 58779]]

(4) software required to operate the tools, information about tool

performance history, and spare parts;

(5) a building from which Halliburton currently supplies LWD

services to U.S. offshore drilling projects;

(6) equipment necessary to allow the buyer of the LWD Business to

manufacture, assemble, test, and calibrate LWD and MWD tools,\2\

---------------------------------------------------------------------------

\2\ Excluded from the divestiture package is HESI's test well.

The purchaser will be able, for a fee, to use HESI's test well at

Fort Worth, Texas, for two years.

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(7) worldwide, royalty-free, irrevocable, non-exclusive licenses to

use HESI-owned intellectual property, and sublicenses covering the use

of third-party technology and related software embodied in the

transferred LWD and MWD tools and software, to the extent permitted by

HESI's licenses from such third parties;

(8) research and development equipment and development and

laboratory records related to the LWD tools and MWD tools to be sold,

including the results of unsuccessful designs;

(9) all assignable contracts to provide LWD services worldwide, as

well as lists of customers, customer credit records, and supplier/

vendor lists and supplier/vendor contracts; and

(10) the opportunity to hire Halliburton employees to operate the

LWD Business, including employees in manufacturing, research and

development, and technical support and training services.

After the sale of the LWD Business, defendants will not be able to

offer LWD services using any of the tools of the type sold with the LWD

Business, except for (i) LWD services necessary to complete existing

contracts for which Halliburton will rent the tools from the purchaser;

(ii) LWD services using LWD tools acquired from Dresser; and (iii)

sonic LWD services using sonic LWD tools of the type sold to purchaser.

Although the Complaint alleges the United States as the relevant

geographic market, the proposed Final Judgment requires divestiture of

the assets that Halliburton has used to provide LWD Services worldwide.

Divestiture of the worldwide LWD business is necessary to preserve

competition in the United States LWD services market because

Halliburton, Dresser, and the other two major providers of LWD Services

have worldwide operations that provide them a revenue base to support

LWD research and development efforts. Thus, the divestiture is designed

to ensure that the new buyer is viable and to put the purchaser in

Halliburton's place as an international LWD company, enabling the

purchaser to continue the innovation of LWD tools, which will benefit

U.S. customers.

IV. Remedies Available to Potential Private Litigants

Section 4 of the Clayton Act, 15 U.S.C. Sec. 15, provides that any

person who has been injured as a result of conduct prohibited by the

antitrust laws may bring suit in federal court to recover three times

the damages the person has suffered, as well as costs and reasonable

attorneys' fees. Entry of the proposed Final Judgment will neither

impair nor assist the bringing of any private antitrust damage action.

Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C.

Sec. 16(a), the proposed Final Judgment has no prima facie effect in

any subsequent private lawsuit that may be brought against defendants.

V. Procedures Available for Modification of the Proposed Final

Judgment

The United States and defendants have stipulated that the proposed

Final Judgment may be entered by the Court after compliance with the

provisions of the APPA, provided that the United States has not

withdrawn its consent. The APPA conditions entry upon the Court's

determination that the proposed Final Judgment is in the public

interest.

The APPA provides a period of at least sixty days preceding the

effective date of the proposed Final Judgment within which any person

may submit to the United States written comments regarding the proposed

Final Judgment. Any person who wishes to comment should do so within

sixty days of the date of publication of this Competitive Impact

Statement in the Federal Register. The United States will evaluate and

respond to the comments. All comments will be given due consideration

by the Department of Justice, which remains free to withdraw its

consent to the proposed Judgment at any time prior to entry. The

comments and the response of the United States will be filed with the

Court and published in the Federal Register. Written comments should be

submitted to: Roger W. Fones, Chief, Transportation, Energy &

Agriculture Section, Antitrust Division, United States Department of

Justice, 325 Seventh Street, NW., Suite 500, Washington, DC 20530.

The proposed Final Judgment provides that the Court retains

jurisdiction over this action, and the parties may apply to the Court

for any order necessary or appropriate for the modification,

interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

The United States considered, as an alternative to the proposed

Final Judgment, a full trial on the merits against Halliburton and

Dresser. The United States is satisfied that the divestiture of the

described assets specified in the proposed Final Judgment will

facilitate continued viable competition in the market for the provision

of LWD services. The United States is satisfied that the proposed

relief will prevent the merger from having anticompetitive effects in

this market. The divestiture of the LWD Business will preserve the

structure of the market for the provision of LWD services that existed

prior to the merger and will preserve the existence of an independent

competitor.

VII. Standard of Review Under the APPA for Proposed Final Judgment

The APPA requires that proposed consent judgments in antitrust

cases brought by the United States be subject to a sixty-day comment

period, after which the court shall determine whether entry of the

proposed Final Judgment ``is in the public interest.'' In making that

determination, the court may consider--

(1) The competitive impact of such judgment, including

termination of alleged violations, provisions for enforcement and

modification, duration or relief sought, anticipated effects of

alternative remedies actually considered, and any other

considerations bearing upon the adequacy of such judgment;

(2) The impact of entry of such judgment upon the public

generally and individuals alleging specific injury from the

violations set forth in the complaint including consideration of the

public benefit, if any, to be derived from a determination of the

issues at trail.

15 U.S.C. Sec. 16(e). As the Court of Appeals for the District of

Columbia Circuit held, the APPA permits a court to consider, among

other things, the relationship between the remedy secured and the

specific allegations set forth in the government's complaint, whether

the decree is sufficiently clear, whether enforcement mechanisms are

sufficient, and whether the decree may positively harm third parties.

See United States v. Microsoft, 56 F.3d 1448 (D.C. Cir. 1995).

In conducting this inquiry, ``the Court is nowhere compelled to go

to trial or to engage in extended proceedings which might have the

effect of vitiating the benefits of prompt and less costly

[[Page 58780]]

settlement through the consent decree process.'' \3\ Rather,

\3\ 119 Cong. Rec. 24598 (1973). See also United States v.

Gillette Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public

interest'' determination can be made properly on the basis of the

Competitive Impact Statement and Response to Comments filed pursuant

to the APPA. Although the APPA authorizes the use of additional

procedures, 15 U.S.C. Sec. 16(f), those procedures are

discretionary. A court need not invoke any of them unless it

believes that the comments have raised significant issues and that

further proceedings would aid the court in resolving those issues.

See H.R. 93-1463, 93rd Cong. 2d Sess. 8-9, reprinted in (1974) U.S.

Code Cong. & Ad. News 6535, 6538.

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absent a showing of corrupt failure of the government to discharge

its duty, the Court, in making its public interest finding, should *

* * carefully consider the explanations of the government in the

competitive impact statement and its responses to comments in order

to determine whether those explanations are reasonable under the

circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. para.

61,508, at 71,980, (W.D. Mo. 1977).

Accordingly, with respect to the adequacy of the relief secured by

the decree, a court may not ``engage in an unrestricted evaluation of

what relief would best serve the public.'' United States v, BNS, Inc.,

858 F.2d 456, 462 (9th Cir. 1988), quoting United States v. Bechtel

Corp., 648 F. 2d 660, 666 (9th Cir.), cert denied, 454 U.S. 1083

(1981). Precedent requires that

[t]he balancing of competing social and political interests affected

by a proposed antitrust consent decree must be left, in the first

instance, to the discretion of the Attorney General. The court's

role in protecting the public interest is one of insuring that the

government has not breached its duty to the public in consenting to

the decree. The court is required to determine not whether a

particular decree is the one that will best serve society, but

whether the settlement is ``within the reaches of the public

interest.'' More elaborate requirements might undermine the

effectiveness of antitrust enforcement by consent decree.\4\

\4\ United States v. Bechtel, 648 F.2d at 666 (internal

citations omitted) (emphasis added); see United States v. BNS, Inc.,

858 F.2d at 463; United States v. National Broadcasting Co., 449 F.

Supp. 1127, 1143 (C.D. Cal. 1978); Gillette, 406 F. Supp. at 716.

See also United States v. American Cyanamid Co., 719 F.2d 558, 565

(2d Cir. 1983).

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The proposed Final Judgment, therefore, should not be reviewed

under a standard of whether it is certain to eliminate every

anticompetitive effect of a particular practice or whether it mandates

certainty of free competition in the future. Court approval of a final

judgment requires a standard more flexible and less strict than the

standard required for a finding of liability. ``[A] proposed decree

must be approved even if it falls short of the remedy the court would

impose on its own, as long as it falls within the range of

acceptability or is `within the reaches of public interest.' (citations

omitted).'' \5\

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\5\ United States v. American Tel & Tel. Co., 552 F. Supp. 131,

150 (D.D.C. 1982), aff'd sub nom. Maryland v. United States, 460

U.S. 1001 (1983), quoting Gillette, 406 F. Supp. at 716; United

States v. Alcan Aluminium, Ltd., 605 F. Supp. 619, 622 (W.D. Ky.

1985).

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VIII. Determinative Documents

There are no determinative materials or documents within the

meaning of the APPA that were considered by the United States in

formulating the proposed Final Judgment.

For Plaintiff United States of America:

Dated: October 21, 1998.

Respectfully submitted,

Angela L. Hughes,

Trial Attorney, U.S.C. Department of Justice, Antitrust Division, 325

Seventh Street, N.W., Suite 500, Washington, DC 20530, Telephone: (202)

307-6410 or (202) 307-6351, Facsimile: (202) 307-2784.

Certificate of Service

I hereby certify that on this 21st day of October, 1998, I have

caused a copy of the foregoing Competitive Impact Statement to be

served on counsel for defendants in this matter by first class mail,

postage prepared, and by facsimile.

Counsel for Defendant Halliburton Company:

Ky P. Ewing, Jr., Esquire, Vinson & Elkins, 1455 Pennsylvania Avenue,

N.W., Washington, D.C. 20004-1008, Telephone (202) 639-6580, Facsimile:

(202) 639-6604

Counsel for Defendant Dresser Industries, Inc.:

Helene D. Jaffe, Esquire, Weil, Gotshal & Manges, 767 Fifth Avenue, New

York, NY 10153, Telephone: (212) 310-8572, Facsimile: (212) 310-8007.

Angela L. Hughes,

Antitrust Division, U.S. Department of Justice, 325 Seventh Street,

N.W., suite 500, Washington, D.C. 20530, Telephone: (202) 307-6410,

Facsimile: (202) 307-2784.

[FR Doc. 98-29222 Filed 10-30-98; 8:45 am]

BILLING CODE 4410-11-M