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Gold/Mining/Energy : Ultra Petroleum (UPL)
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To: Hickory who wrote (4275)8/20/1999 9:34:00 PM
From: Gerald Atwater  Read Replies (2) of 4851
 
Very well thought out post, Hickory. Personally I appreciate your posting it. Maybe your rational skepticism will prevent someone from taking a speculative fling and living to regret it. It does seem a little crazy that with a pending EIS (Environmental Impact Statement) for 700 wells we are going a little nutso over three wells actually drilling at the moment. Of course, two more sites are being prepared and additionally two completions are under way or will be soon. Plus, I believe, there are perhaps 7-8 wells still to be drilled this year, all off BLM land, and not affected by deer winter range restrictions.

Add those wells and the total is 14-15. NOT many for sure but there is one major difference: Under the Anschutz/Questar deal Ultra has a 30% interest in each of the approximately thirteen wells these two companies are rumored to be drilling this year. And at no expense to UP.
FROM DAY ONE of production! (Unlike the Halliburtion deal where HAL got most of the revenue until well construction expenses were paid off). Might be fun to take a calculator and run some numbers!

I agree it would be nice if Ultra could quicken the pace of producing wells. Maybe at this time, though, until Ultra gets the hang of success and operating within a budget it would be prudent to go more slowly. Surely, 30% of a producing well is better than 100% of a producing well . . . that is taken over by creditors.

Two additional things that might help with the share price are: 1) the planned 3-D seismic of the anticline that might help locate more good sites, and 2) EIS approval, which is now scheduled for mid-October.
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