An Embarrassment of Gas

The Piceance Basin has nothing to be embarrassed about. This corner of Colorado, when combined with its Utah neighbor, the Uinta, is home to the second-largest accumulation of natural gas in the country. Having that much gas is a good thing, with fuel prices going through the roof.

A few moves in the Piceance (rhymes with Beyonce, minus the last syllable -- not "nice pants") these past few weeks caught my eye. OK, please stop thinking about Beyonce. I knew I should have gone with "fiancee."

Anyway, the first notable deal was Williams' (NYSE: WMB  ) pickup of SandRidge Energy's (NYSE: SD  ) acreage in the area. Williams, along with ExxonMobil (NYSE: XOM  ) and EnCana (NYSE: ECA  ) , is already a heavy hitter in the Piceance. The acquisition boosted the integrated natural gas company's proven and probable reserves in the play by a staggering 42%.

More surprising was the recent news that none other than Petrobras (NYSE: PBR  ) is eyeing the Colorado cache. The company's potential partner in the play, unlikely as it may seem, is a Canadian-listed microcap that appears to be more focused on coal gasification projects. That company, in turn, farmed into some of EnCana's acreage a few years back, and could definitely use a hand to fulfill its drilling commitments. Petrobras has publicly committed to investing billions in the United States over the next few years. This Piceance deal, if signed, would mark the company's first U.S. natural gas foray, however.

Most recently, Plains Exploration & Production (NYSE: PXP  ) and Occidental Petroleum (NYSE: OXY  ) made a joint push into the Piceance play with a $162 million purchase announced Thursday. That's only about half the size of Williams' purchase, but with 800 drilling locations on the property, the pickup ought to keep the latest entrants preoccupied.

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