Can you name the most expensive real estate on the planet? In the top 10 would be the choicest blocks in the heart of Manhattan, Hong Kong, London, Moscow—and now, a corner of Robertson County in East Texas.

That’s where EnCana bet big, paying $2.5 billion to secure the rest of Leor Energy it didn’t already own. Deep Bossier gas reserves are the reason why. Some of the wells in this play have flowed between 40- and 65 million cubic feet a day.

If a small company such as Leor, with proved reserves of 150 billion cubic feet and a couple hundred undrilled Bossier locations, is worth this kind of money, just think what Ultra Petroleum, Range Resources or Southwestern Energy is worth. Each has literally thousands of proved undeveloped and probable tight or deep gas locations in the hottest resource plays in the country.

These plays are the focus of our cover story this month, where you’ll learn about which areas will be commanding more drilling dollars in 2008. Multibillion-dollar gas drilling campaigns are unfolding throughout the Rockies, Oklahoma, northern Louisiana and East Texas.

As a side note, senior exploration editor Peggy Williams reports that Marathon Oil Corp., one of the more active deep-gas players, has increased its U.S. spending fivefold since 2004—much of it due to these unconventional or resource plays.

This single data point is of great significance. Like other majors, such as BP, Marathon is devoting more attention to domestic plays even though it is still active in many international hotspots as well.

This fact ought to be known by politicians entrenched in Washington and those stumping on the campaign trail, as they passionately debate U.S. energy policy in this presidential election year. Someone needs to explain to them why a company of Marathon’s size, or EnCana’s, or BP’s, would commit to spending so much on domestic gas plays—and why those plays are becoming a larger component of our energy supply.

During the next few months, we will hear a lot of talk about weaning ourselves off foreign crude oil and planting more corn and soybeans in the Midwest for biofuels. But at the same time, we ought to make darn sure that companies like Marathon, EnCana and BP continue drilling for deep U.S. gas unfettered by government tax and regulatory changes.

The energy industry will be under siege in 2008, bombarded by politically motivated rhetoric, and even more so in 2009 when a new administration takes over. At press time, the House had just passed its new energy bill, HR 6, and the Senate was set to act next, but President Bush was threatening to veto all of it because HR 6 contains a tax increase on the oil and gas industry to help pay for alternative-energy mandates. That’s robbing Peter to pay Paul Petroleum. Peter cannot afford to have empty pockets.

Also ahead in 2008, look for a big jump in gas drilling in the Rocky Mountain region. In December, a federal court denied last-minute attempts to block coalbed-methane drilling on the Atlantic Rim in the Powder River Basin. Now Anadarko Petroleum, Warren Resources and others will proceed to drill leases they have held onto for several years.

In Utah, the Bureau of Land Management made a favorable record of decision recently, such that Bill Barrett Corp. will be allowed to drill year-round in its gas-rich West Tavaputs area. The Rockies Express Pipeline Phase II comes onstream as well, enabling producers to move more gas out of the region.

Analysts think the various shale and coalbed-methane plays will keep up their momentum if gas prices hold above the $6.50 range. E&P companies that acquired more assets in the Antrim shale in Michigan and more CBM in the Cherokee Basin will increase their drilling plans. Other companies are trying to extend shale drilling to the Ardmore Basin in southern Oklahoma and CBM activity to northern Louisiana. Appalachian drilling is on a big upswing also.

Finally, more start-ups will bloom in 2008. Recently, EnCap Investments closed its latest private-equity fund of $2.5 billion, and Natural Gas Partners’ new midstream fund raised $1.4 billion. NGP is also in the market raising another several billion dollars for its next upstream private-equity fund.

We hope you have enjoyed several new departments we’ve added to the magazine recently: Capital Markets, M&A Trends, Technology Report and Events Calendar. And, three more debut this month.

In “Bright Spots,” we get to know up-and-coming, interesting people in the E&P and finance worlds who just may be the industry’s future leaders. In “Legends,” we learn from the best of the best, people who made this industry what it is today. We also expanded our calendar. See “Networking Events” in this issue.

We invite your opinions on these additions and welcome your suggestions for people, events, technology and companies to profile through the year.

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