In the 19th century, prospectors swarmed over the Rockies, panning or mining for gold. Today, different kinds of prospectors are punching holes all over the region in search of another kind of gold-coalbed-methane-, tight-sand- and basin-centered gas. But make no mistake. These prospectors aren't the wildcatters of yesterday-a point made clear at the Five-Star Summit energy conference held this summer in the shadow of Pikes Peak in Colorado Springs. The conference, sponsored by five leading Denver-based producers, was aimed at 50 E&P analysts who listened to financially savvy, shareholder-oriented managements talk as much about bottom-line performance and returns as they did about play types-in the Rockies and elsewhere. "All five companies highlighted the business side of the oil and gas industry, stressing return on equity, return on capital employed, and hedges they've put in place to protect against volatile movements in gas prices," says Kenneth H. Beer, a partner at Johnson Rice & Co., New Orleans. "At one end of the spectrum were Evergreen Resources and Western Gas Resources, which are doing a remarkable job of manufacturing gas in Colorado's Raton and Wyoming's Powder River basins, respectively," he says. "In the middle were Westport Resources and Tom Brown, which are more exploitation-type producers with an exploration bent in the Rockies and West Texas, respectively. And at the other end was Forest Oil, a Rockies producer which may be exploitation-minded this year [in Cook Inlet, Alaska], but is setting up other major exploration plays in Alaska, as well as in Canada." Greg L. McMichael, senior analyst for A.G. Edwards & Sons in Denver, says that under the new leadership of Peter Dea-Western Gas Resources' first upstream chief executive officer-E&P has become more significant for the firm, which once focused solely on gathering and processing gas. With 476 billion cubic feet (Bcf) of proved Powder River Basin gas reserves already booked-and another 2.1 trillion cubic feet (Tcf) of probable and possible reserves-the company has a built-in inventory to grow Rockies reserves and production 30% a year for several years, he says. Larry C. Busnardo, small-cap analyst for Petrie Parkman & Co. in Denver, says Tom Brown's Deep Valley prospect in West Texas is highly prospective, with 250 Bcf of net risked gas-reserve potential, plus the company has heavy Rockies gas exposure. Says Larry Benedetto, E&P research analyst for Howard Weil in New Orleans, "Tom Brown is directing more of its efforts toward coalbed-methane gas plays, which are very repeatable, very low cost, and usually have very long-life reserves." Benedetto believes Westport Resources' stock is very undervalued, in terms of discount to net asset value. Busnardo adds that the company has many exploratory projects coming up in the Rockies and the Gulf of Mexico. "Meanwhile, it has basic bread-and-butter production coming out of the onshore Gulf Coast." McMichael says Forest Oil's appointment of Craig Clark as president, the sale of a significant amount of the company's Gulf of Mexico properties to Unocal, and the forthcoming ramp up of Alaskan oil production from its Redoubt Shoal discovery in Cook Inlet are key events for the operator. "Clark, who came over from Apache, brings an added level of accountability and focus to Forest." The Unocal sale, he adds, diminishes the company's weighting to short-lived reserves and allows it to focus more on increased drilling in both Alaska and Canada. Raymond J. Deacon, director, equity research, for RBC Capital Markets in Denver, says that when Forest's Redoubt Shoal discovery comes online-a transforming event for the company-its 2003 production volumes will be 15% to 20% higher versus 2002. "Forest will then see, beginning in 2004, a huge amount of free cash flow that will help it fund higher production-growth rates elsewhere, such as in the Foothills area of Canada." Evergreen Resources, generating an estimated 20% growth in production this year from the Raton Basin, is eyeing tight-sands gas drilling in Northern Ireland, where the reserve potential could be 5 Tcf. But might so prolific a Rockies gas producer be a takeover target before long? "That's just a rumor," Mark Sexton, Evergreen president, told analysts at the conference.