In our April issue, Canadian financiers and M&A advisors talked about the lull in deal activity that had fallen upon the E&P industry there. In May, deal announcements were rolling off fax machines almost daily. This month, senior financial editor Brian A. Toal explains, in the cover story "Canadian Capital." "There's a new investor focus on returns on capital employed and shareholder equity, which the Canadian energy sector hasn't delivered on for much of the last decade," one Calgary investment banker tells Toal. "In addition, many high-flying operators have disappointed the market, in terms of not meeting their reserve, production and cash flow targets. So it's not hard to see why there's such a dichotomy today between energy share prices and commodity prices-and why the Canadian oil and gas equity markets have been so quiet over the past year." In "Three Yards and a Cloud of Dust," editor Leslie Haines introduces us to Prize Energy Corp., the upstart that made headlines in 1999 when buying a large package of properties from Pioneer Natural Resources and merging with a publicly traded producer. "Between these two deals, Prize now owns interests in 250 fields and about 2,000 wells. The 50 largest fields account for 75% of the value," Haines writes. In "The Maverick Basin," exploration editor Peggy Williams introduces this bane of many exploration dreams. Suddenly, The Exploration Co., based in San Antonio, is drilling up success in this Texas basin. "While the 4,500-square-mile sedimentary basin apparently contains all the requisite elements for sizeable oil and gas accumulations, for decades it has frustrated efforts to unravel its secrets," Williams writes. TXCO has now racked up more successes in the Maverick than any company in the last 40 years. Financial editor Nick Snow discusses the bane of many E&P companies' existence, finding capital, in "Pursuing the 800-Pound Gorilla." "The climate may not be right for most independents to consider public debt and equity offerings at the moment, but the door remains open to meet with private capital sources that are ready for the right kind of deal," Snow writes. And, guest authors Tyler Dann, Michael K. LaMotte and Bob Austrian with Banc of America Securities discuss what could help make or break oil companies in the future: e-commerce. "Simply put, the technology is too important to be ignored any longer, from the perspectives of creating new business opportunities, competitive positioning within existing businesses and overall cost," they write, in "Why Care About E-Oil?" In the evolution of the oil industry, the advent of the Internet could be the most disruptive macro event in a long time. E is for earnings. -Nissa Darbonne, Managing Editor
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