Energy investment bankers have varied opinions on a revival of energy capital markets. "A lot of the traditional drivers just don't seem to apply," John W. Sinders, a managing director and head of the oil-services practice at Jefferies & Co. Inc., said at the annual John S. Herold Inc. energy conference recently. "...We don't expect a big capital markets boom until political questions are resolved and the economy picks up." Greg Pipkin, a managing director and global head of Lehman Brothers Inc.'s E&P group, said, "We'll have a lot fewer bankers saying they're energy lenders if the equity markets don't pick up. We think they will, and producers will benefit." Pipkin also expects some initial public offerings during the next few months. "If we can get past politically motivated SEC investigations, clear up corporate governance issues and see an economic recovery, the equity markets will improve. Get ready, because it will be here before you know it." John R. Collett, a managing director in J.P. Morgan Chase's global natural resources division, took the opposite view. "The answer is a resounding 'no,' and it's not coming soon. We have an abundance of capital available. Energy normally attracts about $41 billion, which sugggests it's a good defensive spot in a down market. But there are a lot of dollars chasing very few opportunities." E&P companies are spending only about 67% of their total cash flow, Collett said. "We expect spending discipline to continue and capital expenditures to rise next year by only 5% as commodity prices return to normal levels." Consolidation will continue upstream, but it won't necessarily create a capital markets boom, suggested Brad Bynum, a vice president specializing in E&P in Merill Lynch's investment banking group. "They'll come along for the right kind of deal," he said, adding that excess debt capacity is limited overall and the ability to issue equity will be a key factor. Bynum expects public equity offerings to accelerate once the market gains clarity with the E&P cost and commodity price environment. "Specifically, this means what a good finding cost is and what commodity prices going forward are profitable and can be sustained," he said. "Perhaps the most important question now is what the industry's metrics will be to determine all this."