Debt Complicates The Ultra Petroleum Waiting Game

[raygun]

www.investopedia.com:

Debt Complicates The Ultra Petroleum Waiting Game

by Stephen D. Simpson, CFA

May 24, 2012 | Filed Under » Investment, Stock Analysis, Stocks

Tickers in this Article » UPL, CHK, RDS, APC, PVA, RRC

 

There's not much more digital ink to be spilled on the state of the natural gas environment. Massive supply increases from basins like the Marcellus have pushed prices down to uneconomical levels, and those producers who can are switching over from natural gas to oil and liquids. Unfortunately, while Ultra Petroleum (NYSE:UPL) is one of the best-run natural gas companies, the company's reserve base is almost completely natural gas and potential declines in production and profits could pressure liquidity in the coming year.

 

Production a No-Win Proposition

 

While Ultra Petroleum reported a 4% sequential increase in production; it is looking as though production is going to start sliding as the year goes on. Making matters worse, hedges will roll off progressively throughout the year and leave the company with the unenviable position of choosing to curtail production further or produce uneconomically...

 

[read aforementioned excerpted article in its entirely at the above link]

 

 

Thirty percent of the natural gas extracted in North Dakota is flared off, like this gas near Ray

 

 

Image source: In North Dakota, Flames of Wasted Natural Gas Light the Prairie

 

By CLIFFORD KRAUSS

Published: September 26, 2011

 

[graphics above & below are excerpted from link cited immediately above]

 

 

Note: A version of this article cited immediately above - with respects towards copyright of graphics posted above - appeared in print on September 27, 2011, on page A1 of the New York Times edition with the headline: In North Dakota, Flames of Wasted Natural Gas Light the Prairie.