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Gather 'round and let me tell you about the good old days in the oil patch.

Oil and gas prices were high and stocks were on the rise, reaching peaks not seen in years. Costs were important, but not an all-encompassing worry. It seems like only yesterday.

Those were care-free times, but they were way back four months ago. Now, with crude prices skidding, if there's one thing on which energy investors are laser focused, it's operating cost.

In many cases, those expenses have been edging up over the past decade, especially as companies shifted away from natural gas and into more valuable oil, which involves higher operating costs.

So far, no one's talking about shutting production off because of disappearing returns. But margins are getting squeezed, and executives will be forced to temper their plans for capital spending next year to match expectations for lower cash flow.

As Husky Energy Inc.'s CEO and gifted wordsmith Asim Ghosh put it last week: "We cut our coat to the cloth available."

The bolt of fabric shrunk again this week, with benchmark West Texas intermediate crude briefly slumping below $80 (U.S.) a barrel for the first time in 28 months.

Investment banks in Canada and around the world have knocked down their forecasts for crude prices for the remainder of this year and in 2015, bemoaning a lack of clarity to what the intentions of the Organization of the Petroleum Exporting Countries are.

The cartel meets in late November, and Saudi Arabia, in an apparent battle for market share, has steered clear of giving any hints it might lead an effort to cut production to protect prices.

Some analysts have also painted a bearish picture for natural gas prices this winter following spikes last season.

That puts the onus on energy companies to show that they can keep costs down while keeping production levels close to targeted rates – all while living up to dividend payments.

The industry appears reasonably safe, on average at least.

TD Securities Inc. analyst Juan Jarrah put out interesting numbers on Tuesday that show an incredibly wide array of cost performance among domestically focused companies operating mostly outside the oil sands.

One unexpected result is that there does not appear to be an operating-cost advantage in itself to becoming a bigger company. Mr. Jarrah chalks that up in his report to the fact that costs are incurred at the wellhead level. It's more a function of the commodity produced, how old each well is and what output volumes are. It costs more, per barrel, to maintain output from an old well pumping less than a newer one with higher rates.

Producers that had been forced into restructurings in recent years because of high debt levels are dealing with that issue now. They are among the hardest-hit energy companies in the stock market slide.

Penn West Petroleum Ltd., for instance, had among the highest operating costs of its group, rising above $20 (Canadian) a barrel by 2013 from around $8 in 2005. Analysts have said they rose with years of acquisitions of properties deemed mature.

The company has since sold about $1-billion of assets, announcing its most recent deal last week, and cut staff numbers sharply to get costs under control. It appears to be working, although financial restatements stemming from the company's accounting mess this year may muddy up the results.

Penn West faces a struggle to maintain output and pay dividends as oil prices weaken, and the stock has slumped to multiyear lows.

Others under pressure include Lightstream Resources Ltd. and Legacy Oil & Gas Ltd., each with operating costs around $15 a barrel, according to the TD report.

Companies with their own processing plants bought and paid for, such as gas producer Peyto Exploration and Development Corp., have a cost advantage, and the share price reaction has been less severe. It's still dropped, though, along with the rest of the sector.

All CEOs tell investors they strive to be the low-cost producer. It's boilerplate in corporate presentations. If oil and gas prices are stuck in a trough that lasts months, it will be pretty easy to see how serious they are.