Mr. Deacon: Yes, I agree there has been a lot of volatility over the last two weeks. My coverage is not very focused on the Gulf of Mexico, but it's had a big impact on a number of the companies we cover. You've seen some rebound in names like Anadarko and Apache over the past couple of days because there has been some definition around the liabilities that each will have to assume. So at least we've kind of got that and it looks like some progress towards coming up with some solutions that will stop the problem from getting bigger.
TWST: If we look at the likely backlash, I assume it would be more regulation, translating to higher costs. Is that what the industry is thinking at this point?
Mr. Deacon: I think so. It's still very early. I think that the expansion of drilling offshore is likely going to be off the table for some time anyway. But within the areas where you are currently active, I think there's going to be more owners' testing of blowout per vendors, and the government is going to seek to make sure that security procedures are followed. So maybe there are some delays at the margin in the deepwater, and maybe the government takes it another step and decides to promote measures that would help the natural gas industry versus oil, given that the safety record has been very good for onshore gas development.
Tickers included in this excerpt: APA, APC, BHI, CHK, EOG, EQT, HK, MUR, PXD, ROSE, SFY, STR, XCO, XOM, XTO
For more information call (212) 952 7433. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.