Hedges will keep them profitable this year. 184.1 Bcf of 2012 production is hedged at $4.43 This represents 75% of 2011 production (245 Bcfe). There are no hedges posted on the website for 2013. I think they could trim cash costs to less than $1.50 per Mcf. (Back in August 2009 Mike Watford on the 2Q call: …”our cash cost structure of $1.40…all-in cost of $2.40...”). Sorry for the aged data point but it was convenient. Marcellus costs probably higher, other initiatives hopefully offsetting. I will look for more recent data. For years they’ve added low-cost reserves. They increased Proved Reserves in 2011 from 4,390 Bcfe to 4,977 Bcfe - a reserve replacement rate of 339%. The all-in finding and development costs in 2011 was $1.82 per Mcfe. From the website:“Ultra invested $1.3 billion in drilling-only capital during 2011, yielding a $1.60 per thousand cubic feet equivalent (Mcfe) finding and development (F&D) cost. Total capital investments, including gathering and facilities, land and corporate capital expenditures, were $1.5 billion for an F&D cost of $1.82 per Mcfe.”4-5 years of $2.00 natural gas would be a reason to sell now. I'm not selling.-jandctl
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