You may think that Colorado is mostly about breathtaking vistas and exhilarating skiing. If so, let's add another justification for contemplating the Centennial State: the rationale it provides for exchanging shekels for shares in the likes of EOG Resources (EOG 0.13%), Anadarko Petroleum (APC), and Noble Energy (NBL).

You see, in addition to its other attractions, Colorado is the figurative home base for a massive -- and expanding -- oil and gas play, the Denver-Julesburg Basin. You may know it as the Denver Basin, the Julesburg Basin, or the DJ Basin. It's there that Noble and its pals, also including Chesapeake Energy (CHKA.Q), are producing steadily increasing volumes of oil and gas.

Fishing for oil
By whatever moniker, the basin extends from south of Denver well north into Wyoming, and overlaps into parts of Nebraska and Kansas. In case you're curious, Julesburg stems from a small northeastern Colorado town whose handle is itself tied to one Jules Beni, a notorious horse thief who prowled the area in the mid-nineteenth century.

Even more amazing to most is the notion that what is now much of Colorado, including Denver, was once submerged beneath the Western Interior Seaway, an inland body of water that likely stretched during the Cretaceous period from northern New Mexico into Canada. It thereby divided our continent and was a home for fish -- including a primitive nine-foot swordfish -- all manner of sharks, squid, and shellfish.

Well-oiled creatures
Those and other critters eventually gave themselves up over tens of millions of years to become the hydrocarbons now being extracted by EOG, Anadarko, et al. Most ended up in the Niobrara Formation (or Chalk), which was formed more than 80 million years ago. Much of the recent, more oily discoveries in the Niobrara have been to its northeast.

Production of oil and gas has occurred in the DJ Basin since 1901, when oil was discovered in the Pierre Shale in Boulder County. Most of the formation's subsequent production has come from the Cretaceous sandstones.

The numero uno field
Clearly the key field in the basin is the Wattenberg, a huge 2,000 square-mile play located northeast of Denver and directly opposite Boulder. It's a stratigraphic trap, consisting of sandstones, shales, and limestones. Thus far it's been pierced by more than 20,000 currently producing wells. Key operators in the Wattenberg include Noble, which leads the entire DJ pack with about 640,000 net acres, and Anadarko, with about 4,000 wells. Their average recoverability is about 350,000 barrels of oil equivalent.

To the north -- indeed, entirely in Wyoming -- is the Silo Field. Far smaller and less thoroughly explored than the Wattenberg, the Silo counts Chesapeake among its major acreage holders.

Put the best in your portfolio
With that rather colorful background, let's take a look at which Denver-Julesburg Basin operators appear to offer the greatest opportunity for increased growth and profitability:

  • EOG Resources: Why is EOG at the top of my recommendation heap, when Noble is the largest acreage holder in the DJ? Quite simply, because I continue to believe that Fools will benefit most from companies with positions in two or more of the major liquids-prone U.S. onshore plays. As noted, EOG is active in the DJ. (It's 2009 "Jake" well was the first big oil find in the Niobrara, with an initial production of 1,750 barrels per day.) It also is the top producer in the Eagle Ford, continues to impress in the Bakken, and is heavily involved in the Permian Basin.
  • Anadarko Petroleum: Anadarko offers an attractive blend of Wattenberg and Eagle Ford opportunities . Add to that operations in Algeria, where it's the largest foreign producer, and offshore Ghana, where it is a partner in the Jubilee Field, with its 2 billion barrels of proved reserves.
  • Noble Energy: I don't mean to shortchange Noble by putting it in third place on my hit parade. It's truly a quality company that's the major domo in the Denver-Julesburg from an acreage perspective. It also represents an opportunity in the deepwater Gulf of Mexico, offshore West Africa, and the Eastern Mediterranean.

The bottom line
I wouldn't completely discourage Fools from taking a position in Chesapeake, which is likely to benefit from new management and sizable acreage positions in a host of U.S. unconventional plays. (I admittedly own shares in the company.) But it's still a far gassier play than the other three, and so patience is a sine qua non for those considering buying into the Oklahoma City company.

All in all, as I said in a recent Foolish article, EOG is simply better than the rest.