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Gold/Mining/Energy : Ultra Petroleum (UPL) -- Ignore unavailable to you. Want to Upgrade?

To: Traveling Man who wrote (4080)	4/28/1999 12:53:00 PM
From: upultra	Read Replies (3) \| Respond to of 4851

To all: some tidbits of news I have heard (but not confirmed) that: 1) The Arrowhead well is a good one 2) Ultra's land deal will be announced within a week Note that these are not facts yet, but are comments that I have heard and thought that I would let people know what comments are out there. cheers, riker

To: Traveling Man who wrote (4080)	4/30/1999 11:43:00 AM
From: Gerald Atwater	Read Replies (2) \| Respond to 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