By the way, Schlumberger is doing well completions for Ultra, Questar, Amoco and Anschutz, according to the company.
To me the 22 additional Jonah locations is free money. It didn't exist before the revised Jonah EIS last month. And those locations didn't cost Ultra a penny. Free money!
Also, Ultra has a 60% working-interest in each NEW Stud Horse Butte well compared to a 30% working-interest in each Questar/Ultra well on the Anticline. So each new SH well is financially equal to two Questar wells (assuming equal production). That's a nice multiplier! Further beauty is to be found in the fact that the new Jonah wells are financed by a straight interest loan rather than by Halliburton's project financing, which left Ultra with but a 15% working-interest until payout. It's this plus good NG prices that will impact Ultra's bottom line by the end of the year. Beyond that, Ultra's future is looking brighter because all Anticline wells drilled from now on will be with the "magic eye" of 3D seismic, which should drastically reduce the chances of poor locations. AND, as drilling begins south of Mesa, Ultra's working-interest increases to as much as 85%. If the southern half of the Anticline is found to be highly productive, well, what is the limit!? Stay tuned . . .
Gerry Atwater |
