The third phase of the profit program -- to create lucrative new sources of income -- entailed an important change in management philosophy. "Let's budget," the chief executive said, "on the basis of what we need the most, not on how much money we have to spend." This change forced planners to give priority in the expenditure of capital funds to the correction of Sinclair's major weaknesses -- such as the low output of crude oil from its own wells. Management sought a truly balanced integration of operations to achieve permanent stability and make Sinclair less sensitive to gasoline price fluctuations.

Closing the gap between raw materials production and refinery throughput received first priority. A record high ratio of 53 percent was reached in January 1965. With new discoveries and increasing production in Canada, Colombia and Algeria, acquisitions which added production from Peru and Libya and increased domestic output, Sinclair's total net production of raw materials rose dramatically from an average of 204,000 barrels a day in 1963 to a rate of about 250,000 net barrels daily as 1965 came to a close.

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