Despite oil-service constraints and manpower shortages, many publicly held independents reported strong production growth in the second quarter. About one quarter of the 40-plus companies on the Oil and Gas Investor This Week scoreboard reported production growth of 25% or higher.

Another 25% saw growth of between 10% and 24% while 10 reported less percentage growth. The balance had production losses that ranged from 6% to 41%. Many of these were net asset sellers, since the comparable quarter in 2005, such as Forest Oil Corp., which spun out its Gulf of Mexico assets to Mariner Energy, and Kerr-McGee Corp., which launched a portfolio facelift in the summer of 2005.

Similarly, many producers boasting production growth pointed to acquisitions that helped the numbers, according to London-based Evaluate Energy analysts Hannah Mumby and Eoin Coyne. (For a list of first-half 2006 U.S. deal-making, see "Betting on the Curve" in this issue.)

Some investors may be feeling harried by the asset shuffle, but Shannon Nome, managing director, E&P research, Deutsche Bank Securities, warns that the M&A trend among the independents is here to stay.

"The have-nots will continue to pursue the haves. Anadarko's bold mega-transaction underscores the very real ramifications of basin maturity: growth-constrained independents will continue to pony up significant premiums to gain access to visible, multi-year, low-risk drilling-opportunity sets."

In spite of declining near-month natural gas prices, she says basin maturity in North America and elsewhere will keep commodity prices "stronger for longer," and underscore the value of independent producers armed with large, low-risk drilling inventories.

She has her eye on the low asset-intensity "resource players" moving forward, and says many unconventional resource players have underperformed year-to-date in response to weakening gas prices.

"This presents an ideal opportunity to revisit quality, growth-oriented E&P stocks that have been hindered by sector weakness. Our top picks-Chesapeake, Quicksilver, Range Resources, Southwestern Energy, Ultra Petroleum, Exco and XTO-each enjoy low and/or declining asset intensity, lean cost structures and/or high margins, and needle-moving individual prospects or prospect inventories.

"Not coincidentally, these are the very characteristics that we think drew Anadarko to Western Gas and Kerr-McGee."