Integrated oil and gas companies were late to arrive on the scene for onshore unconventional natural gas plays, and have started to make inroads via acquisition (ExxonMobil's [NYSE: XOM 75 *****] June 2010 acquisition of former independent XTO Energy for approximately $41 billion is a notable example). While ERS thinks natural gas remains a solid long-term play, short-term natural gas prospects continue to look weak given depressed prices, putting pressure on smaller players that lack access to the currently more promising liquids-rich plays. ERS thinks this will spur more natural gas acreage deals in a buyer's market We see the integrateds increasing production of natural gas by 10% in 2011, fueled by acquisitions, compared to just 1% growth in liquids production.4. Energy MLPs will likely raise dividends.
S&P Equity Research Issues Energy & Materials Sector Predictions For 2011
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