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Author: jandctl One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 167  
Subject: Re: Basic Laws Date: 4/30/2012 5:57 PM
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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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