Oil and Gas Industry Optimistic About Growth

NEW YORK, June 1, 2011 /PRNewswire/ -- Against a backdrop of renewed global corporate confidence, oil and gas (O&G) companies anticipate growth in 2011, according to Ernst & Young's Capital Confidence Barometer. Of the 60 O&G industry respondents, 37% are focused on growing the company organically by adding projects and properties; 46% are actively looking to grow inorganically through mergers and acquisitions.

O&G industry respondents were broken out from the broader group of 1,000 respondents. The industry group was largely optimistic about the economy. Sixty-five percent said they are more optimistic today than they were last October. An additional 18% continue to feel optimistic since the last survey.

Though optimistic, O&G respondents' greatest areas of focus, as a result of the economic situation, continue to be creating cost reductions and operational efficiencies and improving cash flow/liquidity. Most of the respondents expect financing will be readily available to fund major acquisitions and/or capital projects in the coming year.

• 23% of respondents believe financing will be available within 6 months.
• 23% of respondents believe financing will be available in 6-12 months.
• 18% of respondents believe financing will be available in 1-2 years.
• 33% believes that access to finance is not a problem.

"With oil prices high and the fundamentals for gas gaining strength, we expect really strong growth-oriented investment over the next year," said Jon McCarter, Ernst & Young's Americas Oil and Gas transactions leader. "Political unrest in the Middle East continues to put the spotlight on developing energy sources outside of that region and companies are working to respond to that need, as well as higher demand resulting from economic growth."

For more on Ernst & Young's Capital Confidence Barometer and the findings from the broader group of 1,000 executives polled, visit EY.com.

About Ernst & Young

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 141,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. This news release has been issued by Ernst & Young LLP, a client-serving member firm of Ernst & Young Global Limited located in the US.

How Ernst & Young's Global Oil & Gas Center can help your business

The oil and gas industry is constantly changing. Increasingly uncertain energy policies, geopolitical complexities, cost management and climate change all present significant challenges. Ernst & Young's Global Oil & Gas Center supports a global practice of over 8,000 oil and gas professionals with technical experience in providing assurance, tax, transaction and advisory services across the upstream, midstream, downstream and oilfield service sub-sectors. The Center works to anticipate market trends, execute the mobility of our global resources and articulate points of view on relevant key industry issues. With our deep industry focus, we can help your organization drive down costs and compete more effectively to achieve its potential.

SOURCE Ernst & Young

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