Update on Watfords meeting with an Edmonton broker.
FRIDAY FAX July 16, 1999 FAX#154
We were halfway through an enjoyable lunch with the new man from Ultra
Petroleum (T-UP) www.ultrapetroleum.com, Michael Watford and his
sidekick Dick Schuster when we got the feeling for awhile that the lunch
just might revisit us. We had no idea until meeting the new boy just how bad
of shape Ultra had been in early this spring. It is becoming more apparent
that if Watford or someone of his abilities had not been in, Ultra might well
have been broke and faced bankruptcy. Our hat goes off to Doug Varley,
the senior person with Canaccord Capital, who finally stepped in to stop the
silliness. The silliness being commitments to drill holes for which there was
no money, those that had drilled had not been paid, huge expense accounts
seem to abound and a company that is facing such a tough financial mess,
was still paying $130,00 a month to a PR firm in Vancouver – when most oil
and gas companies of that size budget virtually nothing to investor relations.
Since Watford's appearance, all the bills have been paid through selling a
small chunk of assets and while many had thought this year would be a
turn-around with not a lot of activity, thoughts of seven to nine wells for this
year are already up to 12 – 14. Two have already been spudded, which
means in about 30 days, Ultra will once again have something to talk about.
What's different this year is that in the past, Ultra's drilling season had
basically been between May and November. This year they have plans to
be drilling right through the winter on lands that don't face environmental
restraints. We should point out that Watford, who has had a tremendous
track record with Torch Energy and a spectacular stint with Nuevo
Energy in the States where he tripled the stock price, tripled oil and gas
production and quadrupled reserves in just a few years and is indeed a very
wealthy man – and looks like the savior for Ultra. While we toured the mall,
he did not do his "Superman" routine. No bungee jumping and no rides on
the "Mindbender". Oh well, as long as he cures the ills with Ultra – we will
be more than happy. But in the meantime, one hopes that the board of
directors is completely revamped as they certainly didn't know what has
been going on in the past and were obviously more of the problem than the
cure. While many of the oil and gas companies have had to merge or have
gone under in the oil and gas crunch of 1998, Ultra over the next 30 days
looks like it could see a very dramatic turnaround……
Regards, Farmer
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