SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Gold/Mining/Energy : Ultra Petroleum (UPL)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Traveling Man who wrote (4080)4/30/1999 11:43:00 AM
From: Gerald Atwater  Read Replies (2) of 4851
 
Traveling Man --

You wrote in #4080 the following:

<< Concerning the Jonah flowrates of ~2mmcf daily,this isn't bad at all IF the well has been in production for a year or so>>

I am only now realizing the implications of your "IF". If the initial decline is 65%, followed by another decline of 50%, the flow from Day 1 is absolutely critical. For example, in the l998 Ultra Petroleum Brochure the well model for decline rates is a well producing 6 MMcfd on Day 1 After two years this well is still producing 1 MMcfd, after which the decline is minimal. So at $1.50 gas (1000 cubic feet) this well is generating about $547,500 per year ($1.50 x 1000 x 365), less 6% per year, for another 18+ years! And all major expenses of the well were covered during years one and two! Even better, the carrying costs of the well remain "constant" while the revenue per 1000 cf is escalating. (NOTE: As far as I know UP doesn't own 100% of any well.)

On the other hand, if production from Day 1 is 2 MMcfd, the long-term production after the initial drastic decline seems pretty minimal.

How many of the 75 wells that are averaging 2 MMcfd are older than two years? How many Ultra wells? Anyone have any answers? I'm going to check with the company and will post what I find out.

Gerry Atwater
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News