You know, Liza and Doofus(to his friend, d. lickman to his parents, maybe, maybe not). Some times I get the idea you think Ultra Petroleum is a subsidiary of the Mob, or the Mafia (except its directors' names don't end in vowels). That its wells are really Vertical Cemeteries into which body parts are dumped. That the occasional "tool" dropped "accidently" down the staft is really a late someone's particularly hard skull. That no money is being made so as to throw suspicion off for when the "gas" is "found" and the Mob's ill-gotten money can be laundered as legit gas proceeds. Or not. Hard to know where you're coming from.
So forget Ultra for the moment. Concentrate on the product: GAS. Because the number of rigs drilling has dropped off as much as 50% in the past year or so, the amount of gas flowing into a salesline is actually decreasing while the demand is increasing, mainly to generate electricity. So the price for gas is increasing as well. I have read a comment by the CEO of Coastal(CGP)(naturalgas.com May 11, l999) where he predicts gas in the area of $2.50+ per 1000 cf for several years. An April 23, l999, report from the Raymond James brokerage actually says SPOT PRICES will hit $10+ and lead to a sustained price of $3+ by the end of the coming winter because there won't be enough gas flowing into storage formations to meet demand.
If this is true where does this leave UP (assuming for the moment it's not Mob connected)? If it nearly doubles its income from the same volume of gas as last year and adds a dozen producing wells, what then? If it increases its volume and adds to its reserves would Wells Fargo be interested in increasing its credit line? Could then the 13.2 million from Anschultz be the bridge across the abyss to the future where critical mass is achieved? And if Schlumberger is the driller does the well cost decrease by half? Apparently, the Anshultz money will cover the costs of this years wells.
I wrote half in jest, half seriously. You choose which is which. Has the corner been turned?
Gerry Atwater |
