Linn Energy LLC and Chesapeake Energy Corp. have helped recently to turn Wall Street's attention anew to the Appalachian Basin for its natural gas potential. And, separate articles in this issue-"To Appalachia" and "Structure for Success?"-describe what each is doing in the region. It's well known that the basin has been a prolific producer of oil and gas-the U.S. oil industry began there, and bountiful, shallow gas was a common coal-mining hazard, and long ago fueled street lamps in the region. Little new investor attention has been paid to Appalachia's hydrocarbon riches, however, while the region hasn't been noted for producing headline-making wells. The deepwater Gulf of Mexico and some onshore basins grabbed investors, instead. It is the plodding, dependable production of Appalachia that is making it so interesting today, though, and pushing the value of these assets higher. In just two years, the average price paid per thousand cubic feet equivalent of proved reserves in the region has grown from 80 cents to $1.65, according to M&A advisory and investment-banking firm Scotia Waterous. Wells in the area are hardy producers, particularly of newly prized natural gas. Operators may have to drill thousands of these wells to make the equivalent of a few successful Gulf wells, but the Appalachian wells are still producing 15 years later. Also, Appalachian gas sells for more on the market, since it is nearer the U.S. Northeast and sits amidst infrastructure that takes gas to this highly industrialized market. Aubrey McClendon, Chesapeake chairman and chief executive, says Appalachian gas gets up to 50 cents more per million Btu to the Nymex price. Recent buyers of Appalachian assets, besides Chesapeake, include Range Resources Corp., EnerVest Management Partners Ltd., KeySpan Corp., Exco Resources Inc., Delta Petroleum Corp., Fortuna Energy Inc., NCL Appalachian Partners, Cadence Resources Corp., NGAS Resources Inc. and Penn Virginia Corp. Operators in the Appalachian Basin and outsiders looking to get in note, however, that the culture there prohibits newcomers from just prepping a drillpad and getting started on a well. While permitting is no challenge-compared with that of the Rockies, for example-a large part of the problem is potential conflict with surface owners and property residents. A bulk of Appalachian subsurface rights was bought up long ago by wealthy coal and other speculators, and is held by conglomerates and trusts today. For thousands of square miles, surface residents do not participate directly in the subsurface wealth. E&P personnel who have worked in the region tell tales of regularly encountering "uninviting" neighbors. Fortunately for Chesapeake, its recent acquisition of Columbia Natural Resources comes with personnel who understand Appalachian culture. McClendon says Chesapeake for now is getting its arms around the 3.5 million acres of land it has in the basin. "We want to enhance that with bolt-on strategic acquisitions, but for now we're getting our new team in place, getting our hands around all the play types, and of course, local rules and customs." Appalachia is home to Michael Linn and his Pittsburgh-based Linn Energy LLC. The president and chief executive got started in E&P by working in the field for his father's oil company. He started his company in 2003 with $16 million and proceeded in the next two years to make more than $200 million of acquisitions. While taking over the chairman post of the Independent Petroleum Association of America a few months ago, Linn took his company public, raising some $260 million. Private-equity provider Quantum Energy Partners, which supplied $15 million of Linn Energy's start-up capital, sold down some of its stake to 36% in the deal. Wall Street loved the idea of Linn Energy's long-lived gas reserves and the gas-manufacturing nature of the basin's repeatable drilling plays. John Moon, a managing director of Metalmark Capital LLC, the private-equity backer of Appalachian producer Columbia Natural Resources, which Chesapeake bought last year, says, "If you like unconventional resources, you've got to love Appalachia. The gas is richer, and the infrastructure is there. It feeds into attractive eastern markets that pay up for gas, and up until recently, the competition had been limited to utilities and mom-and-pop operators"