Senior U.S. oil and gas executives expect increased employment for upstream sector this year

Most believe U.S. economic recession will end during 2010

HOUSTON, Feb. 1, 2010 – Half of U.S. oil and gas senior executives expect to increase employment this year and two-thirds believe that the recession burdening 2009 will end this year, according to Grant Thornton LLP’s eighth annual Survey of Upstream U.S. Energy Companies.

Reed Wood, Grant Thornton LLP’s partner-in-charge of the firm’s energy practice, detected optimism from the respondents of the 2010 survey. “It was convincingly evident in their outlooks for prices, capital expenditures and employment.”

While only a third of the respondents expect an overall increase in employment for the industry as a whole in 2010, half indicate that their company would increase its employment levels. The numbers for 2011 are even more promising, with nearly three-quarters (74%) of respondents saying that they expect industry employment to increase and 56 percent expecting their own company’s employment to increase.

With regards to the economy, two-thirds of senior executives at oil and gas companies believe that the conditions will improve enough for the U.S. economy sometime during 2010 for most business leaders to consider the current recession to be over (34% said the first half of 2010 and 33% said the second half of 2010). In addition, 71 percent said that they believe the recession will end in 2010 for the upstream sector and 65 percent for service companies. Only 11 percent said that they believe the recession has already ended for the U.S. economy, 7 percent for the upstream sector and 1 percent for service companies.

Wood feels the survey responses confirm other dialogue with industry leaders that “the upstream industry experienced increased cash flow during the second half of 2009 and more favorable interest in their domestic capital intensive projects requiring highly trained and experienced personnel. Continued stabilization and improvement of the key drivers should result in 2010 as a strong beginning of hopefully another extended recovery for the industry and the U.S. pursuit of less dependence on foreign resources.”

Additional industry issues and opportunities from this year’s survey include the following:

• Uncertain natural gas and crude oil prices repeat for a second year as the top concerns in the industry today.
• Respondents still believe that incentives for increased U.S. drilling are the number one way for U.S. consumers to reduce energy prices.
• While most respondents view alternative fuels as a long-term solution, respondents indicated that clean coal is the most likely to be effective in the short term.
• Area of most opportunity: Successful exploitation of existing prospects, followed by mergers and acquisitions, and operating efficiencies.
• While 35 percent of respondents believe the United States is a global leader in the industry, 80 percent believe the United States is lagging by its dependence on foreign sources of energy.

To view more detailed results or order a copy of the Grant Thornton Survey of Upstream U.S. Energy Companies 2010, visit www.GrantThornton.com/oilandgas.

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About the survey
This is Grant Thornton LLP’s eighth annual Survey of Upstream U.S. Energy Companies. The survey period was from November 2009 through December 2009, with over 100 responses from senior executives at independent oil and gas exploration and service companies. Issues explored by the Grant Thornton Survey of Upstream U.S. Energy Companies were identified by seasoned professionals in Grant Thornton LLP’s national Energy practice. The following indicates the demographics of the companies that responded to the survey: average total assets at the end of 2009 – $540M; average revenues for the 2009 fiscal year – $245M; public – 38 percent; private – 62 percent.

About Grant Thornton LLP’s national Energy practice
Grant Thornton LLP’s national Energy practice is dedicated to serving the accounting, tax and advisory services needs of public and privately owned energy companies. Headquartered in Houston with significant energy expertise in Dallas, Denver, Oklahoma City, Tulsa, Kansas City and Wichita, Grant Thornton’s Energy practice group has experience in all segments of the industry with a focus on exploration and production, drilling and energy services, pipeline and distribution, and refining and marketing.

About Grant Thornton LLP
The people in the independent firms of Grant Thornton International Ltd provide personalized attention and the highest quality service to public and private clients in more than 100 countries. Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd, one of the six global audit, tax and advisory organizations. Grant Thornton International Ltd and its member firms are not a worldwide partnership, as each member firm is a separate and distinct legal entity.

In the U.S., visit Grant Thornton LLP at www.GrantThornton.com.