Fighting the production-decline curve is a good fight for companies, investors and the country. That's why this entire issue of Oil and Gas Investor is devoted to exploring the biggest challenge North American producers face: replacing reserves and production. We've mentioned this problem before in other contexts, but never in as much detail as this month. Just how bad is it? What are E&P and technology companies doing about it? How does the wave of mergers and acquisitions help or hinder portfolio growth? Is the sky falling, or merely cloudy? The facts certainly speak loudly. U.S. oil production has fallen from 9.6 million barrels a day in 1970 to about 5.5 million today. Gas output has been relatively flat in the past five years despite a surge in gas-well drilling and the ramp up of unconventional supplies such as coalbed methane. Despite outstanding technology and more efficient business practices, the overall trend has been down and will remain so, absent some game-changing technology or another discovery like Prudhoe Bay-wouldn't that be great? There are some tantalizing possibilities, such as the El Paso Production Co.-McMoRan Exploration gas find in the deep Gulf of Mexico shelf, rumored to be 1 trillion cubic feet or more, or the emerging success in the eastern Gulf such as Anadarko Petroleum's Atlas and Jubilee discoveries. Just enough big finds have been announced along the way to motivate explorationists to keep going-such as Jonah Field in Wyoming. In fact, that state is the only one to have increased production in the past few years. Behind the statistics lie some interesting case studies that indicate the decline curve is not a fait accompli in every field-at least not yet. For example, the 33-year-old Wattenberg Field in Weld County, Colorado, is now producing more oil and gas than at any time in its history. The reasons why are the keys that can unlock more reserves in every field: focus, regulatory incentives and technology. At Wattenberg, independents have focus. They are devoting special attention to the field since it has become a platform for their corporate growth. Colorado authorities changed the well-spacing rules in the field a few years ago, which encouraged greater drilling activity in order to drain the reservoirs. And, operators are applying the latest technology to drive down costs. Technology is a recurring theme in this issue. Using it at every step of the process, from exploration to drilling to recompletions, operators are able to reduce finding and operating costs, increase recoveries and make formerly marginal opportunities more viable. We believe we have uncovered some interesting examples of ways in which producers can bring old fields back to renewed vitality. They are drilling into much deeper zones, exploring on the flanks, going out further in horizontal wells and multi-laterals, installing new production facilities, refracturing wells and more. At a conference in New York last fall, Core Lab chief executive David Demshur said that reservoirs around the world only recover about 40% of the original oil and gas in place, on average. If any portion of the remaining reserves can be produced, those incremental hydrocarbons will be highly valuable on the market, and yet at the same time, the cheapest resources we can find. In meeting after meeting, E&P companies tell how they are reversing the decline in old fields. A northern Louisiana gas field goes from 18 million cubic feet a day to 70 million. A southern Louisiana oil field goes from 750 barrels a day to 8,300 in two years. But for the U.S. as a whole, much more needs to be done, especially in exploration. In the late 1970s, thousands of rigs drilled for oil. Today we are importing nearly 10 million barrels a day and the oil-rig count can't get up to 200. And, improving stripper wells should not be forgotten. They produced 29% of our oil in 2001, according to the Interstate Oil & Gas Compact Commission. Now there is a group, The Stripper Well Consortium, to assist operators in commercializing technologies to improve production of the nations' stripper oil and gas wells. Composed of members from 16 states, Canada and Venezuela and representing the E&P and service industries and academia, it is co-funded by the Department of Energy and Penn State University. The consortium seeks proposals by April 2004 for projects that need funding, to aid stripper wells. It expects to provide $1 million during this next round. For more information, see Energy.psu.edu/swc. We, too, are focused on operators making a difference. Next month at NAPE in Houston, we will announce the winners of our first Oil and Gas Investor Excellence Awards, and details will be in the March issue. The nominations we've seen assure us there are some smart companies from whom there is much to learn.