The outlook of possible austerity as integrated oil and gas giants face the prospect of reigning in drilling budgets matches a phenomena already mapped out by Guggenheim Securities for more highly leveraged independent drillers. In September, Guggenheim Securities analyst Michael Lamotte highlighted that Chesapeake Energy's financial struggles are reflective of a wider cash crunch for shale drillers that may hit at sector-wide earnings. Notably high debt levels may force drillers to pull in spending budgets, in a move that would depress earnings and the outlook for rig contractors. Heading into the third quarter, Guggenheim's Lamotte sees little reason to change a bearish industry forecast and points out trends energy sector investors may be wise to hone in on heading into 2013. After rig contractors like Halliburton continue to cut earnings estimates as rig counts fall, Lamotte highlights that balance sheet liquidity, in addition to operating restraint, may be an industry trend through year-end. Still, the bigger question is whether falling earnings will color the sector outlook for 2013. The reason for the rig count decline is not just a matter of opinion, as it is foundational to the shape of the recovery in drilling next year. Whereas budget discipline implies that E&P spending can grow in line with consensus cash flow growth expectations (now +14%), our liquidity analysis suggests that E&P spending will be down for the full year," writes Lamotte, in an earnings preview. Lamotte notes that even with reduced guidance for the fourth quarter and the first quarter of 2013, earnings estimates for oilfield service companies and independent drillers may be too high. He advises clients to focus on the secular growth of deepwater rig contractors like Slumberger ( SLB) and Tenaris ( TS).