Several speakers at the 16th annual Pacesetters Energy Conference hosted by John S. Herold Inc. claimed to have a lock on how to spend money wisely to create value. Each strategy was different, proving there is more than one way to succeed. A specific basin focus is the key for some. Tracy Krohn, chief executive of Houston-based W&T Offshore Inc. told attendees, "The Gulf of Mexico gets little or no credit for its high-quality probables and possible reserves versus onshore companies. Why is the Gulf a superior basin? There is only one metric we follow: How much money do you get back for every dollar spent? "We think free cash flow is the only metric and the Gulf gives us that. And, I'd like to thank Newfield for recently leaving the Gulf-they were a formidable competitor." Krohn said W&T has enjoyed adjusted EBITDA margins of 40% or more since 2000, and those margins were 80% in 2006 when gas prices soared. For more on this, see the November issue of Oil and Gas Investor. For a subscription, call 713-260-6441.

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