Publicly held producers with small market capitalization joined their larger brethren to showcase 2002 and first-quarter 2003 results at the IPAA Oil & Gas Investment Symposium (OGIS) in New York. Meanwhile, in an effort to reach even more investors, the Independent Petroleum Association of America announced it will hold a second OGIS later this year, October 7-8 in San Francisco. What was apparent from several presentations is that many small-cap companies, which struggle to attract analyst coverage and investor interest, spent the past year strengthening their balance sheets and positioning themselves to drill more wells this year. Many are making significant changes to their management teams, boards and business models as well. Midland-based Parallel Petroleum (Nasdaq: PLLL) has changed its strategy, according to Larry Oldham, chief executive officer. "We are a new 24-year-old company. We have shifted our focus from historically being a speculative stock looking to drill a major discovery that would change the company overnight, to being an acquire-and-exploit, low-risk company. Why? The risk of exploration and the costs of finding oil and gas have gone up." Chief financial officer Don Tifton said a wildcat discovery has finding costs of $10 per BOE versus $6 on average for an acquisition. That's one reason why, in December 2002, the company acquired Permian Basin assets for $46 million, its largest deal yet. "We consider this the cornerstone of our new plan," Oldham said. Parallel also has assets in East Texas and onshore the Texas Gulf Coast. In the first quarter, the company's production averaged 3,100 barrel of oil equivalent per day, up 50% from the prior quarter. The $12-million drilling budget will be funded from cash flow, with any excess used to reduce debt. Equity Oil Co. of Salt Lake City (Nasdaq: EQTY) made its largest acquisition ever, for $30.7 million, in April 2002 and that has changed the company, said CEO Paul Dougan. The deal increased reserves 46% and added Sacramento Basin gas production. The focus is now in the Rockies and California. "We've gone from predominantly an oil company to a balance of oil and gas, sold our Canadian properties and generated about $2 of cash flow for every $1 invested during the last three years." Last year the company also repurchased 5.4% of shares outstanding and established a new, larger credit facility with Bank One. Gross profit return on investment (revenue less operating expenses and G&A cost per barrel of oil equivalent, divided by finding and development costs) was 204% during the past three years, Dougan said. -Leslie Haines