NEW YORK ( TheStreet) -- Production estimates for the Marcellus Shale -- a black shale formation in the Eastern United States believed to be a tremendous repository of natural gas -- have energy investors digging around to find the companies best positioned to benefit.

Geology.com estimates the "volume of natural gas in the Marcellus Shale would be enough to supply the entire United States for about two years and have a wellhead value of about one trillion dollars." And while many companies are involved in the area, few are as targeted as Mesa Energy ( MSEH), which has placed a focus on developing properties in the western New York region.

The company has chosen that area of the shale, which in addition to New York stretches into parts of Maryland, Ohio, Pennsylvania, Virginia, and West Virginia, because it believes the natural gas there is located at shallower depths than it is further south, making it less expensive to drill for.

In addition, Mesa's concentration on western New York puts it close to many densely populated areas with heavy users of natural gas and an established infrastructure, including the company's existing pipeline systems. I recently had a chance to talk with Mesa Energy CEO Randy Griffin and ask him about the significance of Marcellus Shale.

TheStreet: Why is the Marcellus Shale so important?

Griffin: There's a lot of conversation about domestic sources of fuel, including all of the shale basins whether it's Marcellus, Barnett or any of the others around the country. Of course we've only known about these for 10-15 years, so there's a lot of potential domestic supply out there we're aware of now that we weren't aware of then. It's really changed the dynamic. The ability to create a much bigger portion of our energy from domestic sources, when historically we really haven't had that opportunity. It's easy to say we need to reduce our dependence on foreign oil, that makes good politics and a good sound bite, but it's extremely difficult to do.

The Marcellus is a huge basin that is several times the size of the Barnett, the Fayetteville and the other basins in the southern part of the United States. So there's a lot of potential supply there. And not only is it there, it's the proximity to the big Northeastern U.S. population centers. Of course your transportation costs are far less than they would be coming from the northern Rockies, for example

TheStreet: Right. The end user in the New York, Pennsylvania area is a big end user. One of the good things about the company is that you've got the distribution to this big user.

Griffin: Where we are, there are a significant number of public lines, the big cross-country pipelines, most of which are now carrying a high proportion of gas from the Rockies and Midcontinent areas. The capacity is there. It's flowing in the right direction. It's flowing in the big Northeastern markets. Transportation costs to get the gas from the Marcellus Shale-producing areas, in general and particularly where we are in the southern tier of New York, of course is much lower than those other areas. So it's a great market and a great user base.

TheStreet: You've also been able to capitalize on technology, the ability to get to these fields that previously you were not able to get to.

Griffin: When George Mitchell of Mitchell Energy in the mid-nineties experimented with fraccs hydraulic fracturing and the shale in the Barnett, he -- of course everybody now views him as the father of the shale plays, because he was willing to go out there and do some expensive fraccs and the shale. All the engineers and so-called experts told him he was crazy. He was throwing away his money. His view was, "it's my money I can throw it away if I want to."

So he did a lot of the early experimentation. It worked out wonderfully. Of course Mitchell Energy became a pretty significant company there in Tarrant County and the areas west of Fort Worth (Texas). Ultimately sold to Devon Energy ( DVN), they brought more resources to the table. Shale plays went from there. Then of course, because it was so successful, everybody in the industry began to look around and say ok that can't be the only one.

We know the basins are out there because we've been drilling through them for years. The shale is really not easy to drill through. It's always been something everybody viewed negatively - it's a little bit difficult to drill through. You waste your time getting through the shale as quickly as you can. Lo and behold, it's become the big source for a lot of these gas plays and to some extent for oil.

TheStreet:The big boys are also starting to take a lot of interest in these areas too, right?

Griffin: They are. Of course the core of the Marcellus is in a fairway that extends from southwest to northeast Pennsylvania. Chesapeake Energy ( CHK), Cabot Energy ( COG), Atlas Energy ( ATLS), Range Resources ( RCC) a lot of those, what we call big independents have amassed hug acreage positions down there and have begun to drill a lot of wells. Of course they're much deeper than where we are. Much more expensive. Based on the trade journal information I've received. Those wells cost $3 million-3.5million per well and they prove up 3-3.5 bcf gas and they're having a lot of success with it. Course they require huge amounts of water for the fraccs too, which is a little bit of a controversial item.

But where we are, what we refer to as the northern flank of the Marcellus, the shale is shallower, and so we're able to drill fracc and complete a well at a much lower cost. But yet the reserves proved up as a function of the cost, the finding cost per mcf basis is very favorable.

TheStreet: I think investors like Mesa because it's a targeted play in a hot area of the market and as opposed to some of these other companies that are more spread out. With Mesa, they get into the hot areas of the market right now.

Griffin: We believe that upstate New York is a good place to do business. We've met a lot of the landowners, service companies and so forth in that part of the state and they've been very supportive, very cooperative. They are very hungry for the economic development that the Marcellus shale can bring. State and local government of course, tremendous benefits there.

New York obviously has budgetary issues just like every other state has and it's a great resource and I believe it can be developed responsibly from an environmental point of view. So we're anxious to move ahead with our plan and contribute to that.

Edited for length and clarity.

-- Written by Debra Borchardt in New York.