BIG OIL SPENDS BIG

Accounting firm Ernst & Youngs recently took a look at how the major oil companies are spending their record profits:

The study found that the top companies -- including Exxon Mobil, ConocoPhillips and Chevron, among others -- took in a mind-numbing $5 trillion in revenue from sales of oil and related products between 1995 and 2005. After subtracting the cost of equipment, leases, labor and other operating expenses, the companies posted whopping profits of $336 billion.

Over the same time span, however, the companies spent even more than they earned -- $550 billion -- on oil exploration and development. Some of them went deeply into debt to finance new ventures, especially during times of lean profits.

The Ernst & Young study, which was not done on behalf of any client firms, confirms what the oil companies have been saying about the high cost and difficulty of exploiting the world's remaining petroleum reserves.

You gotta spend money to make money.