Ernst & Young Survey Finds Oil and Gas Executives More Optimistic for the Future...

Ernst & Young Survey Finds Oil and Gas Executives More Optimistic for the
Future than Other Industries
Companies are focused on transactions to emerge stronger out of the downturn

HOUSTON, Aug. 17 /PRNewswire/ -- A survey conducted in June by Ernst & Young
and the Economist Intelligence Unit reveals that nearly half of the oil and
gas industry executives surveyed believe that their business has been less
severely impacted by the economic downturn than other sectors. Nearly half of
survey respondents even realized business improvements. The respondents
primarily represented major international oil and gas firms, which were well
capitalized before the downturn. The oil and gas findings from "Opportunities
in adversity" are available at www.ey.com/oilandgas.

"These findings are consistent with what we're observing in our day-to-day
work with some of the top oil and gas companies in the world," said Marcela
Donadio, Ernst & Young LLP, Americas Leader of Oil and Gas. "Compared to the
last major collapse in the 1980s, today's oil and gas industry is leaner, more
efficient and better-positioned to weather market turmoil and take advantage
of opportunities in the recovery."

Optimism in the storm
Oil and gas executives are also more optimistic than other respondents about
the economic outlook. Fewer oil and gas executives indicated that the economic
downturn has impacted their business more than they expected, 45% versus 56%
of all respondents.

Preserving and creating cash
Eighty-eight percent of oil and gas executives said they had been "very
responsive" or "responsive" to cost management issues over the past 12 months,
compared to 76% of executives from all industries. A majority of respondents
also reported that their company had been "effective" or "very effective" at
achieving overall cost savings over the past 12 months, particularly in the
areas of internal control and supply chain effectiveness.

Oil and gas respondents were significantly more likely than respondents from
all sectors to report that they have scrutinized their relationships with
customers and suppliers more closely over the past 12 months, and negotiated
contracts with suppliers over the last six months (60% of oil and gas
respondents versus 43% of overall respondents).

Thinking ahead
To emerge from the economic crisis ahead of the competition, oil and gas
companies are focused on transactions. When asked what actions they would take
to emerge stronger than competitors, respondents' top four picks all involved
acquisitions (55%), divestitures (36%) and strategic alliances (40%) -- all at
higher percentages than overall responses which were 34%, 29% and 33%
respectively. Elsewhere in the survey, more than two-thirds of respondents
reported an increase in the importance of restructuring the business at their
firms. The survey points to greater restructuring activity through mergers and
acquisitions, divestitures, joint ventures and alliances.

In the meantime
Ernst & Young has identified a path forward that includes a broad range of
actionable responses being taken by many oil and gas companies, including:

-- Securing the present by focusing on the most promising revenue
opportunities
-- Prioritizing capital expenditures and assessing risks
-- Taking a carefully calculated and controlled approach to decreasing
costs and creating capital

-- Examining the project portfolio with geographic challenges and
opportunities in mind.

Economic growth and liberalization of markets throughout the world spurred
significant demand for oil and gas over the past few years. While that demand
has been depressed since the onset of the economic downturn, it will return.
And when it returns, today's oil and gas industry stands ready to respond.

About Ernst & Young's Americas Oil & Gas Center
The oil and gas industry is faced with complex issues and constant change.
Volatile prices, business consolidation, difficult operating environments,
ever-increasing customer demand, continuously evolving regulatory environments
and the reliability of supply all present significant challenges. The Ernst &
Young Americas Oil & Gas Center can draw upon a network of energy
professionals in the Americas and around the world to work closely with
clients to facilitate the development of coordinated approaches to managing
risk, improving performance and increasing operational effectiveness. The
Center works to anticipate market trends, identify the implications of and
develop points of view on relevant industry issues. Our deep energy industry
focus helps Ernst & Young make a difference.

About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory
services. Worldwide, our 135,000 people are united by our shared values and an
unwavering commitment to quality. We make a difference by helping our people,
our clients and our wider communities achieve their potential.

For more information, please visit www.ey.com.

Ernst & Young refers to the global organization of member firms of Ernst &
Young Global Limited, each of which is a separate legal entity. This news
release has been issued by Ernst & Young LLP, a client-serving member firm of
Ernst & Young Global Limited located in the U.S.

SOURCE Ernst & Young

Katy Hancock of Fleishman Hillard, +1-214-665-1323,
katy.hancock@fleishman.com, for Ernst & Young; or Tanya Valle of Ernst & Young
LLP, +1-201-872-1688, tanya.valle@ey.com