I have some very confusing questions about Oil and Energy companies. Can Anyone Help?

I read an article in the New York Times, and was confused by some of the information. If you know the answers, or you know of a good site please share. Thanks for any help. :)

The article mentions that from the mid 90's to 2006 the % of oil companies capital investments on exploration went from 30% to 18%.
Why? Do they believe that there isn’t much left to find? Is the risk to high?

It also mentions that the cost of hiring deepwater drill ships has doubled over the last two years, because of their availability.
Cost now is $500,000 a day.
Why has the availability gone down? Is it because there are less deepwater ships? Or is it because there are more people like building more and more oil companies?

The oil companies are spending more time, money, and energy on strategic and financial maneuvers - such as acquisitions and share buy-backs. What do they mean buy acquisitions and buy-backs? So they have gone from looking for new petroleum sources to this?

The last thing the article mentions is that some oil companies have bolstered dividend payments in order to please their shareholders. What does this mean?

Answers:
Several good questions.

Exploration dollars decreased because the risk was higher than previously with less return. Less oil to find, more risk.

Deepwater drill ships are in short supply as the number isn't growing while the demand is.

Acquisitions of related or vertically integrated companies are common in the oil industry as in many others. And, yes, they can make more money buying companies, improving those companies' bottom lines, than they make by finding new sources of oil. Share buyback is basically the company buying their own shares back. Objective is to increase share price with the lowest possible investment.

Dividend payments go up when investors demand so oil companies can continue to sell shares and see share prices go up. Ultimately, we live in a capitalistic economy, and that means that oil companies, and all other businesses will do what their owners (shareholders) demand, in order to remain in business. As a shareholder, I would demand high profits, growth, and dividends. So, it's not surprising that oil companies have modified their strategies to deliver exactly what I, Mr. Shareholder, demand.
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