At $18 per proved Mcfe, the EnCana Corp./Leor Energy deal is huge-quite possibly one of the most aggressive prices paid in recent industry history. Just two years ago, eyebrows were raised by Norsk Hydro's offer of $2.5 billion for Spinnaker Exploration's 129 million proved barrels of oil equivalent in the deepwater Gulf of Mexico, or about $20 per proved BOE.

The EnCana/Leor deal equivalent value is $108 per proved BOE on a 6:1 gas/oil basis.

Will the EnCana offer lift all East Texas asset values? Not all, deal-makers say. It will improve owners' price expectations-rightfully or wrongfully-for some properties in and near Robertson County, but buyers won't bite on a bigger price across the entire region.

The EnCana/Leor deal is unique, they explain. It's for Amoruso Field and its pressured Deep Bossier gas. "Nothing else in East Texas is like it," one producer says.

Immediately affected, however, are the few players in the pressured Deep Bossier, including Navasota Resources LP and its general partner Alta Mesa Holdings, which is a Denham Capital private-equity investment; Gastar Exploration Ltd.; and Chesapeake Energy Corp.

Leor Energy took a stake in Navasota this year when the latter exercised its right to buy a greater stake in Gastar and Chesapeake's Hilltop and neighboring acreage that is prospective for Deep Bossier gas-and adjacent to Amoruso Field.

Guma Aguiar, Leor chief executive officer, said at the time of the deal, "We have every reason to believe that Navasota's acreage should be as prolific as Leor's core Amoruso Field acreage."

Upon news of the EnCana/Leor deal, Gastar's stock price ran up from $1.47 to $1.79. At press time, it had fallen, however, below the pre-deal level. The decline was in part due to the market pushing most independents' stock prices down at the time. But, Gastar's was pushed harder due to a major eruption in an ongoing dispute with Michigan-based GeoStar Corp.

GeoStar has filed a demand letter for 1.7 billion Gastar shares it says it is owed under a look-back provision in two GeoStar sales of East Texas interests involving the Hilltop area in 2005. Gastar chief executive Russ Porter says GeoStar owes it a refund of shares paid in the deals, instead, and is "outraged by this claim." The number of shares GeoStar claims would represent some 90% of outstanding Gastar stock.

GeoStar says it may reclaim operatorship of Hilltop.

Gastar may by stymied by the dispute; it may be forced into play. An aggressive buyer could eagerly overcome the small matter of to whom to write the check.

"Although Gastar does not currently anticipate the need to access the equity capital markets through 2008 to continue its business plan, until these issues are resolved in whole or in significant part, it may be difficult for Gastar to raise capital through the sale of equity," the company reports.

And, this comes just as its Hilltop-area assets' worth may be more prominent than ever. Meanwhile, Gastar's total worth affects Chesapeake's net interest in Hilltop, since Chesapeake has a roughly 16% stake in Gastar stock.

Besides Chesapeake, other significant, active producers in the pressured Deep Bossier are also much larger than Gastar, Navasota and Alta Mesa. They include Anadarko Petroleum, ConocoPhillips, which owns Savell Field, Devon Energy and XTO Energy.

Deal-makers say Deep Bossier well costs ($10 million and more) are so high that there are few producers who can play in the area.

Foreign buyers may have an advantage as their currency is stronger against the dollar currently, one notes. And East Texas has drawn the interest already of an Asia-based buyer, Sojitz Energy Venture Inc., which recently bought a package there from Ark-La-Tex Energy.

More details on the EnCana/Leor deal are in "Company Briefs" in this issue.