<<Ask Ultra what this part of the play cost them. You won't like the answer I'll bet.>>
Liz --
I'm a collector so I have every news release Ultra has put out since I got interested, back in late 1997. The one from August, l997, states Ultra paid Burlington U.S.$11,260,000 for 80 sections (80 x 640 = 51,200 acres)or $218.75 per acre. Anschultz paid Ultra U.S.$13,200,000 for 15,000 (of which, I think, 13,000 or so were from the Burlington acquisition)or approximately $880 per acre. That's a 4x increase. A few years from now that will seem dirt cheap, but at present with only a few wells on Mesa and no gigantic proved reserves and no 100,000,000 cubic feet per day flowing into a sales line, probably the best that could be done. In other words, Anschultz had Ultra by what is known as the short hairs. Anschultz had what is known in any business as a MOTIVATED seller. So while 13.2 mil isn't a fantastic profit it's better than a poke in the eye with a sharp stick. Or the sheriff serving legal notices for non-payment of bills. And it does give Ultra a chance to drill some wells on its own and net 30% off the top. My opinion!
Gerry Atwater |
