The 12-15 mpg certainly fits with the symptoms of a failed O2 sensor. The black smoke on startup does also but usually it will also blow black under medium acceleration. Other symptoms are a "surging" feeling under medium acceleration, and surging unsteady idle. One easy test is to find a lightly travelled road and do a full throttle run. If the car seems to run fine at full throttle then the O2 is probably to blame. Another test is to unplug the O2 sensor from the wiring harness and if the car runs better then the sensor has failed. Of course if you know how you can always check the Motronic fault codes.

The V8 only uses one O2 sensor, dead center in the exhaust crossover on the 3.6 cars, and on the left side of the crossover of the 4.2 cars.

Keith