Mr. Oil's Wild, Slippery Ride Continues

After writing about oil and gas exploration companies in September, I followed up with a second and then a third piece. The common theme was that oil and gas producers might be a good long-term play, a sector that could reward investors during the next several years.

Since then, the so-called E&P companies have been on a roller coaster of a ride. As measured by the benchmark American Stock Exchange Oil & Gas Index, the XOI, the group has lost about 2.6%. That's not so bad when compared with what the Nasdaq Composite has done in the period -- down 26%, or 10 times more.

But it's not great either, and certainly not on par with either the XOI rally of early 1999 or the surge this year from February through June. (If you're an institutional investor benchmarked to the S&P or some other index, of course, 2.6% down in the past 10 weeks sounds pretty darn good. But, let's talk absolute return here for folks who spend real dollars when they shop or distribute real dollars to their partners.)

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