The end of Big Oil?

No, it's not what it seems like. Oil companies aren't going to dissapear. But we are seeing a shift in the oil & gas industry and it's not clear to me if this is something temporary. Breaking Views, via The New York Times, points out the shift:
U.S. oil companies are becoming less liquid - but not in a financial sense. With natural gas so plentiful Big Oil is fast becoming Big Gas. Shareholders may be underestimating the impact of the shift on future returns while an unexpected advantage is tipping to the oiliest majors.

America's energy titans are finding it ever harder to ramp up oil output. Exxon Mobil is on track to pump 5 percent less this year than in 2005 according to Barclays Capital forecasts. Instead the company has turned to gas for growth. A big project in Papua New Guinea and the XTO acquisition are accelerating the shift. Gas which accounted for 38 percent of Exxon's output in 2005 could account for up to 48 percent next year.

Exxon isn't alone. Rivals ConocoPhillips and to a lesser extent Chevron are also bloating with gas. The trend looks ominous. Oil offers much fatter margins and in the United States sells for almost three times more than gas for the same quantity of energy.

...

With even oily Chevron drifting towards gas, Occidental Petroleum - which still gets 75 percent of its output from the black gold - may wind up the last of the majors to deserve the moniker Big Oil. It is pricier than its three biggest rivals - trading at 14 times expected 2010 earnings compared to an average of about 9.5. But its significantly lower exposure to gas justifies the premium and then some.
If you are investing in the energy complex, you may want to consider the implications of the shift towards natgas. The article seems to imply that oil has higher profit margin than natgas so that's something to keep in mind when looking at historical data.

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