As always, this year’s winter NAPE expo in Houston was a terrific opportunity to hear plenty of industry buzz, feel which way the wind was blowing in A&D and see colleagues you hardly ever get to see. Some takeaways: --Though expensive to develop, the shale plays still have the industry excited. However, as first movers planted their flags some time ago (and at a much lower cost per acre), it’s become difficult for smaller E&Ps to accumulate large positions in the shales. Shales also require a good mix of development expertise and plenty of cash, two more hurdles for many smaller producers. The play that keeps coming up in conversation: Marcellus. --The money is really back in E&P. After months of being in a deep-freeze state, capital is flowing more freely for energy investments. Producers are anticipating fewer bumps and bruises from the next round of credit redeterminations. With the changes in reserves-reporting rules in effect, many companies are busy doing what’s necessary to avoid painful write-downs this spring. Some are accomplishing this by selling non-core assets or ones that are producing less than expected. --Though potential oil and gas tax reforms and a financial system overhaul are still in play, several well-respected industry figures openly doubt the tax portion will make it across the finish line. --Several folks at this year’s show said attendees were showing genuine interest in the prospects on display. A good number of people were huddled around tables by the refreshment areas and on the upper floors of the convention center, nodding while studying maps and well logs—always a positive sign. --The industry is concerned about the state of gas prices, but it’s not giving up. While oil prices are more attractive at the moment, firms with heavy gas portfolios aren’t running for the hills. At the expo, the buzz about gas pricing was that the numbers would get better, but not significantly so until late 2010/early 2011. –Bertie Taylor, Senior Editor, Oil and Gas Investor, btaylor@hartenergy.com, 713-260-6497.