2009 was a painful year for producers and capital providers alike. But honestly, here at the beginning of 2010, the picture is already so much better than it was just a year ago.Though many of us in the industry couldn’t wait to see the end of 2009 for a long list of reasons, the tail end of last year actually held some pleasant surprises. For starters, capital began flowing again. After months of producers plodding onward with a combination of wits, slashed credit lines and existing projects, the market slowly turned a corner. Announcements began to trickle across the wire about successful equity and debt raises, a clear signal that the dismal state of the markets was actually starting to get better. I propose that we hit a particularly interesting high point when Cobalt International Energy Inc. finished its Thanksgiving turkey and promptly approached the public markets, hoping investors would contribute more than $1 billion via an IPO; this, at a time when the company had no proven reserves and expected little revenue for the next two years. To Cobalt, the public markets replied with $850.5 million. Short of the mark, but under the circumstances, amazing. Once money began to flow, the pace of deal activity thankfully kicked itself out of neutral. Quality assets began changing hands and just when energy editors thought they could start their countdown to Christmas, Exxon Mobil Corp. struck a $41-billion, all-stock deal to buy Houston-based XTO Energy, renewing battered faith in the future of domestic natural gas. Industry luncheon presentations have even become interesting again—the prevalent themes of “live within your means” and “cash is king,” taking a break, for now. True, commodity prices aren’t where they used to be. But take heart. As long as the capital keeps flowing, the projects—and profits—will come. –Bertie Taylor, Senior Editor, Oil and Gas Investor, email@example.com, 713-260-6497. Also see A-Dcenter.com and UGcenter.com.
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