As the industry rounds the corner of another year of strong commodity prices, John Thieroff, director, Standard & Poor's Corp., is wondering if it's time for a breather. "We hear companies are still doing the things they need to do to run their businesses-they just have so much cash," he said at a recent oil and gas conference hosted by S&P in Houston. "[But] we're not completely convinced the level of investment necessary has taken place. The amount of cash flow generated in the current environment is extraordinarily high, but the industry has not replaced production for the last three years. "It likely won't this year, either." It's not that E&P companies aren't trying. Capital spending continues to rise worldwide even as acquisitions continue to cost more, with companies paying top-dollar for acquisitions they wouldn't have had to pay much for in the past. For more on this, see the December issue of Oil and Gas Investor. For a subscription, call 713-260-6441.

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