[Mouton]

For those who play the energy area, this is a good concise picture of the situation. Only missing part is how natural gas plays in this equation for each company. In any event, firms at the current $75 per barrel for oil are going to be pressed if they are facing large debt structures as their ability to be flexible by cutting exploration and development is hampered by debt service and the ability to obtain further credit. There will be some consolidations and some firms may go chapt 11 before this all plays out. It has happened before, it will happen this time too. Sooner than later the advice of T Pickens will bear out, “it sometimes is cheaper to find reserves on wall street than in the field”.

[thackney]

There will be some consolidations and some firms may go chapt 11 before this all plays out.

Unless the price drop is far more drastic than what we see today, I would expect sell-offs and mergers rather than much Bankruptcy.

There are many with strong financial positions that would buy the assets at reduced prices.