Bakken deal values have doubled in the past two years, and winning bids for Eagle Ford acreage are some four times that of first-half 2008.

"It appears expectations for commodity prices going forward for oil and gas liquids will shape data for public companies, drilling activity, and acquisitions and divestiture activity," Sylvia Barnes, head of energy investment-banking and a managing director for Madison Williams and Co., told attendees at the ninth annual A&D Strategies and Opportunities conference presented recently by Oil and Gas Investor and A&D Watch.

In the Williston Basin's Bakken play, the average deal value in first-half 2008 was $1,381 an acre. After oil and gas prices fell, going into the first-half of 2009, a low winning price was $550 in July 2009 by XTO Energy Inc. This year, deal values are averaging $2,986 an acre, and the recent high was $3,998 in Hess Corp.'s bid for American Oil & Gas Inc. leases near Montrail County, North Dakota.

Meanwhile, in South Texas, "the Eagle Ford has truly exploded," she says. The first-half 2008 average price paid per acre there was $1,506. The low was $564 in May 2009 in a ReoStar Energy Corp. purchase. Winning bids this year are averaging $6,156, with the most recent deal was priced at $4,000/acre in August in an Abraxas Petroleum Corp. joint-venture deal with Blue Stone Oil & Gas LLC. The high water mark was set at $11,532 in June in the Reliance Industries Ltd. joint venture with Pioneer Natural Resources Co.

"How to grow an oil and liquids weighting? By buying acreage, making acquisitions, doing joint ventures. But, that's not that easy sometimes and the world can change very quickly. Think about the timeframe I've been talking about. It's just since January 2008," she says, and she warns "don't have tunnel vision. We may miss opportunities if we don’t think in a contrarian way."

Wall Street is buying liquids-rich stories today, versus dry-gas stories, because "that's where the money is." And energy-company directors are providing them. Chesapeake Energy Corp., Devon Energy Corp. and EOG Resources Inc. have stated an increased capex emphasis on their liquids-rich holdings. Chesapeake's production is 8% liquids currently; the target is 20%.

Barnes quotes Tom Ward, chairman, president and chief executive of SandRidge Energy Inc., in an example of a contrarian view. "He said that, if BP, Mitsui, ExxonMobil, Total and Statoil want to be in the U.S. gas market, then we want to be in the U.S. oil market. It seems to me all these companies are having difficulty finding $85 oil around the world or they wouldn't be coming here, trying to find $4 natural gas."

Is an expanded oil-to-gas differential here to stay? The price difference was the more traditional 6:1 at about 6.5 times gas:oil from 2003 to 2005, she notes. The current futures market has priced oil as 15.3 times more valuable than gas, however.

"That's the harsh reality. Only in the heating season, are we seeing more than $6 gas. That's a sobering view."