The global financial tsunami is something the energy industry will steer itself through, El Paso Corp. CEO Doug Foshee said Thursday, noting that the current crisis summons memories of the one precipitated in the energy industry by Enron Corp.’s 2001 bankruptcy.

“For lack of a better description with regard to the current capital markets environment, as we say here in Texas, this ain’t our first rodeo,” Foshee said during a quarterly earnings call (see Daily GPI, Nov. 7a). Foshee took over at El Paso when the company was near bankruptcy and still attempting to steer itself through the Enron-precipitated crisis.

“We have experienced, engaged and talented professionals that have been through much tougher environments than this one relative to our own company in the past six years,” Foshee said. “So, we know how to operate our company in an environment where capital constraint and speed, flexibility and contingency are key.”

What Foshee said in his company’s quarterly earnings call has been said in one way or another by many energy company executives in the past few weeks. The credit market turmoil is not confined to one part of the energy sector or only the small companies. And even though most of them are telling analysts that they are adequately financed for what may be a long haul, many companies appear to be preparing for what may be an a very lean and destabilizing 2009, with a variety of potential impacts.

Consider the following news that NGI reported in just the past week:

IHS Global Insight researchers analyzed the impact of the financial crisis on exploration and production (E&P) activity around the world, and they joined several industry prognosticators to forecast cutbacks across the energy sector in the months ahead (see Daily GPI, Nov. 4).

If there’s financing already in place, such as for gas pipelines as El Paso has secured, projects won’t be held up. However, projects scheduled to be built after 2012 may begin to feel a squeeze in the next couple of years, IHS reported.

“The vast majority of projects with finance in place due for completion in the 2008-12 time-frame are expected to move forward,” IHS researchers said. However, many E&Ps already are cutting their costs through the end of this year, and those cuts, which are already being extended through at least 2009, will cut into access to oil and natural gas reserves.

ExxonMobil Corp., BP plc and Chevron Corp. recently said their capital spending programs are on track despite the financial distress. All of them are cash cows, IHS noted, and all of them and most of the other majors should have plenty of cash to fund their oil and gas projects across the globe.

Most impacted, though, will be the independents that were buying undeveloped — and unproven — leaseholds in North America and elsewhere. Now many of the producers, including leading gas producer Chesapeake Energy Corp., have put some of their prized unconventional gas prospects up for sale to ensure that there is enough liquidity to fund other projects, IHS noted. Others are expected to soon follow.

With the share prices down across the board in the energy sector, financial analyst Gil Yang, who works for Citi Investment Research, on Friday boosted his ratings to “buy” from “hold” for three gas producers: EOG Resources Inc., Southwestern Energy Co. and Quicksilver Resources Inc.

“Natural gas prices still face pressure from strong supply growth and high inventory levels, but with the rig count falling and colder winter weather approaching we think that investors should increase their exposure to this sector at this time,” Yang wrote in a note to clients.

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