So, here's a good analogy for the industry. Think of oil and gas in terms on Hollywood. No, it can work, if you stretch the definition of reality far enough. Okay, for companies you've got your independents, your operators, your supermajors and your joint ventures. I'm not going to go into MLPs because that's just crazytalk during the current environment. Your independents function sort of like independent movie studios. They could be B-movie studios, which make a lot of cheesy but profitable pictures. Think of your locally owned oil companies that have some assets and don't really venture outside of their safe zones. Maybe 20-50 barrels per day, at most. These oil companies don't make production that would be number one at the box office, but they at least can clear their overhead costs. You also have your art house movie studios, basically companies that want to make a small number of pictures that can affect their audience greatly. These are the innovators that are out to change the world. In the oil industry, this would be independents like George Mitchell's Mitchell Energy, which spent decades making the Barnett shale economic. He ended up making history, and we're still talking about it now. Next we have operators, which could be stand ins for the production companies in the movie industry. It's their job to actually get the work done, doing the day-to-day grind and making the minute decisions. Think along the lines of Ron Howard's Image Entertainment, a production house that latches unto larger studios to distribute the films. You didn't think the brass at Columbia Pictures was doing the actual heavy lifting to make "Angels and Demons," did you? National oil companies function with government assistance and often function to provide revenue for social services in the host county. Much as national film endowments that provide funds to filmmakers in several countries. The downside of this is that often times the people don't like what it is being carried out with their tax dollars. This can lead to Venezuelans revolting over how PDVSA is being run, or Canadians getting indignant when they see the kind of movies David Cronenberg was making in the mid-1970s thanks to subsidies from the National Film Board of Canada. Finally, you have your supermajors and superindependents, like Chevron and Marathon. A small number of companies who control a large number of assets. Namely, your Warner Bros. and 20th Century Foxes of the energy industry. They're large, control a notable portion of the market, and have been around for decades. Also, like movie studios, they sometimes gobble up smaller companies and add them to their ranks. They can use them as subsidiaries to hold smaller projects, like say Warner Bros.'s ownership of New Line Cinema in order to give the appearance of being an independent studio while secretly being controlled by corporate interests. Or they may be necessary to gain access to other sources of revenue the main company can't normally access, such as in foreign countries with different copyright laws. So hopefully that helps. Next time you see some news about ExxonMobil, just think about Warner Brothers. When hear about Devon Energy, ask yourself what View Askew Entertainment is up to these days. And when some local oil company finds a gusher, just smile and know that another Quentin Tarantino has been discovered. –Stephen Payne, Editor, Oil and Gas Investor This Week;;