National survey finds incentives to increase U.S. drilling for oil and gas as most effective measure to reduce the cost of energy to U.S. consumers

HOUSTON, February 9, 2009 - Incentives to increase U.S. drilling for oil and gas topped the list of measures that could be taken to reduce the cost of energy to U.S. consumers, followed by conservation and increased U.S. refining/processing capacity. The findings come from Grant Thornton LLP's 7th Annual Survey of Upstream U.S. Energy Companies.

Unsurprisingly, the top three most important issues facing the oil and gas industry are uncertain natural gas prices, uncertain oil prices and obtaining capital. Survey respondents also believe that the best way to enhance their company's value and growth is through successful exploitation of resources, followed by successful exploration and mergers and/or acquisitions.

"Overall, as to be expected, respondents were generally not as optimistic as compared to the past two years," said Reed Wood, Grant Thornton LLP's partner-in-charge of the firm's energy practice. "Their responses, together with intelligence gathered from client and industry meetings, indicate that the entire energy industry will likely confront formidable challenges throughout 2009 as it continues to adjust to one of the most severe declines (absolute, percentage and period) for oil prices."

Additional highlights of this year's survey include:

• Nearly a third (32%) of the energy executives anticipate increases in domestic capital expenditures in 2009, down from 65 percent in 2008. Nearly all (92%) anticipate decreases or no change in the amount of foreign capital expenditures in 2009.
• $3.93 per MMbtu is the maximum acquisition price companies are willing to pay for conventional proved reserves.
• More than a third (35%) expect higher employment levels at their companies in 2009- compared to three-fourths (76%) in 2008 and 2007.
• One out of four (26%) anticipate difficulties in hiring and retaining employees - down significantly from 85 percent in 2008 and 69 percent in 2007.
• Top choices for alternative fuels are: nuclear, wind, and clean coal.
• While 43 percent believe the U.S. is a global leader in the industry, 89 percent believe the U.S. relies too heavily 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, visit www.GrantThornton.com/oilandgas.

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About the survey
This is Grant Thornton LLP's seventh annual survey of U.S. energy companies. Survey questionnaires were mailed to senior executives of independent oil and gas operators and service companies throughout the United States. The survey period was from October 2008 through December 2008. Issues explored by the Grant Thornton Survey of Upstream U.S. Energy Companies were identified by seasoned professionals in Grant Thornton LLP's Energy Practice. More than 65 companies responded to the survey questionnaire. The following indicate the relative size of the companies that responded to the survey: average total assets at the end of 2008 - $715 million; average revenues for the 2008 fiscal year - $432 million.

About Grant Thornton LLP's national Energy practice
Grant Thornton LLP's national Energy practice is dedicated to serving the accounting and tax 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.