US independents to increase exploration spending

Spending on oil and gas exploration in the US is expected to increase in 2004, as the demand for energy continues to grow. According to a national survey of mid-size independent US oil and gas companies conducted by Grant Thornton LLP, global accounting, tax and business advisory firm, 70% of respondents plan to increase their US exploration spending in 2004, while only 21% plan to increase foreign exploration efforts.

Spending on oil and gas exploration in the US is expected to increase in 2004, as the demand for energy continues to grow. According to a national survey of mid-size independent US oil and gas companies conducted by Grant Thornton LLP, global accounting, tax and business advisory firm, 70% of respondents plan to increase their US exploration spending in 2004, while only 21% plan to increase foreign exploration efforts.

"Although a healthy majority of respondents expect domestic drilling activity to increase this year, only 30% and 44% expect prices for oil and gas, respectively, to be high enough to support an increase of more than 20%," Ed Davis, partner-in-charge of Grant Thornton's Houston energy practice, said. Davis notes that forecasted natural gas prices are the most important factor affecting respondents' capital spending plans.

According to the survey, 60% of respondents will concentrate on natural gas exploration over the next three years, while only 10% will focus on oil and 30% plan to pursue both. Respondents believe that the Gulf of Mexico and Rocky Mountains provide the greatest potential for domestic natural gas discoveries.

04/06/04

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