Message Font: Serif | Sans-Serif
No. of Recommendations: 0
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.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.