First the disclaimer: None of these remarks that follow includes any fallout from whatever the new Obama Administration may do/announce/plan once it takes office in January 2009. These predictions are based on news and anecdotes appearing this month, and do not take into account changes to oil and gas regulations or taxation that may be coming later. The worldwide outlook for E&P spending has deteriorated in recent weeks. The global financial turmoil, falling oil demand, and lower oil and gas prices continue to take their toll on E&Ps and service companies. Now Barclays Capital analysts Tom Driscoll and Jim Crandell (formerly of Lehman Brothers) report that spending will fall as much as 25% in 2009. They continue to conduct their annual E&P spending survey, which will be released in December, but preliminary results show a slow first-half 2009. They base this outlook on anecdotal information, announced budget cuts, and a recently-lowered Barclays price forecast of $60 oil and $6.50 per Mcf natural gas. "We are now estimating flat spending internationally in 2009 and a 25% reduction in North America. A recovery of 5% internationally and 10% in North America is forecast for 2010," says Crandall. Meanwhile, crack energy analyst John Olson, of Sanders Morris Harris in Houston, thinks the first-half of 2009 will be slow and the pond will be full of danger. He co-manages three energy hedge funds for the firm and is the dean of Houston-based analysts. He called this banking meltdown when he last spoke to the group in April 2008. Speaking to the Houston Producers Forum this week, he said the only way E&Ps can attract investors back at this point is to increase their dividends. Stock buybacks do not help the average investor, he said. "The government will bail out some industries but it won't bail out any investors. I would urge you to stay away from the market for the next six weeks. There are too many crocodiles out there." For more on Olson's remarks, and a brief video interview, see the premium content section of OilandGasInvestor.com. To subscribe, contact Jim Hart at jhart@hartenergy.com. --Leslie Haines, Editor in chief, Oil and Gas Investor