By Aaron Levitt

The U.S. and Canada are sitting on one of the biggest energy booms ever. An oil and gas production renaissance is under way, thanks to improved hydraulic fracturing and advances in drilling techniques. Though not without controversy, shale formations like the Marcellus, Utica and Eagle Ford have become hotbeds of North American drilling activity because these advances have made it possible to extract the plethora of fossil fuels trapped between the rocks.

With billions of dollars in revenue at stake, these regions have witnessed a land grab not seen since the California Gold Rush of the 1800s. While the usual suspects like Exxon (XOM) are staking their claims, North America's shale interests are getting plenty of attention from overseas sources as well.

Surging global interest

Indeed, landholders across the Northeast, Nebraska and Texas are getting some new foreign neighbors. The shale boom and all its riches have been attracting energy companies from around the globe. Take French oil giant Total (TOT). The major integrated oil company recently paid $2.32 billion for a 25% share in 619,000 acres across the Utica shale owned by Chesapeake (CHK).

This is the second joint venture between the two companies, and it gives Total access to the nearly 5.5 billion recoverable barrels of oil and 15.7 trillion cubic feet of natural gas that the Utica formation contains.

The Total-Chesapeake deal is just one example. Also last week, China's Sinopec (SHI) made its first incursion into U.S. shale with a $2.2 billion investment to create a joint venture with Devon Energy (DVN). Over the past year, shale acreage has seen buyout and merger activity from Australia's BHP Billiton (BHP), Norway's Statoil (STO), various Chinese-owned entities and Malaysia's Petronas.

Overall, data compiled by Thomson Reuters showed more than $473 billion in energy asset transactions were completed in 2011.

It's no wonder North America's shale assets are becoming such a hotbed. Growing populations require major amounts of energy. Securing these assets now, while prices are relatively low, makes strategic sense for any nation or company.

In addition, many of the acquiring international companies are behind the curve in terms of drilling technology. In a classic win-win, smaller to midsize domestic energy companies get the capital they need to actually tap these resources, while the foreign corporations get the future energy supplies they require. With a little luck, the U.S. and Canada gain some economic prosperity and jobs, with a minimum of environmental disruption.

Getting exposure

This pattern of joint ventures and buyouts should continue to play out over the next few years. For energy investors, that could spell opportunity. Shares of both Devon and Chesapeake surged 4% and 3.4%, respectively, when the news of their deals broke. Analysts at UBS cite both Cabot Oil & Gas (COG) -- which just hiked its dividend --  and EOG Resources (EOG) as the next major M&A targets.

However, investors may want to think a bit smaller and broader. The Jefferies TR/J CRB Wildcatters E&P Equities (WCAT), along with the PowerShares S&P SmallCap Energy (PSCE), track baskets of various small-cap oil and gas companies that could make juicy targets for the foreign energy majors. These ETFs could provide an overall play on the trend.

Here's another tack: Small caps PDC Energy (PETD) and Rex Energy (REXX) could be exactly what foreign companies are looking for. Both have market caps of just under $1 billion, and both have been expanding their shale acreage. In September, PDC added exposure to the Utica shale and is seeking a partner to fund drilling on 100,000 net acres. And Rex continues to add acreage across the Marcellus, Niobrara and Utica formations and is seeing higher production from its wells.

With long-term energy demand trends firmly in place, North America's shale formations will continue to be a prime destination for the international oil majors. These companies, flush with cash, will be able to provide the necessary funds to extract this energy. For investors, playing the land grab means betting on the small to midsize companies within the exploration and production sector. The companies discussed here, along with the ETFs, are great ways to do that.

Aaron Levitt doesn't hold any of the stocks or funds mentioned here.

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