Mergers May Juice Up Energy

Crude oil and natural gas prices are tumbling, drilling costs are on the rise, and the energy sector seems headed for a profit squeeze. Not a pretty picture for investors. Or is it? A wave of mergers is hitting the oil patch, promising tidy payoffs if you play the game right. "The pain of lower prices, even if it's temporary, will accelerate the pace of consolidation," predicts oil analyst Phillip Pace of Morgan Stanley Dean Witter Discover.

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