As the world's third-richest person and most celebrated investor, Warren Buffett attracts a lot of attention. Thousands try to glean what they can from his thinking processes and track his investments.

We can't know for sure whether Buffett is about to buy Ultra Petroleum (NYSE: UPL) -- he hasn't specifically mentioned anything about it to me -- but we can discover whether it's the sort of stock that might interest him. Answering that question could also reveal whether it's a stock that should interest us. In this series, we do just that.

Writing in a recent 10-K, Buffett lays out the qualities he looks for in an investment. In addition to adequate size, proven management, and a reasonable valuation, he demands:

  1. Consistent earnings power.
  2. Good returns on equity with limited or no debt.
  3. Management in place.
  4. Simple, non-techno-mumbo-jumbo businesses.

Although it might be too small for Buffett to literally buy, does Ultra Petroleum meet Buffett's standards?

1. Earnings power
Buffett is famous for betting on a sure thing. For that reason, he likes to see companies with demonstrated earnings stability.

Let's examine Ultra Petroleum's earnings and free cash flow history:

Source: S&P Capital IQ.

Although Ultra Petroleum's free cash flow has been all over the map because of capital investments, its earnings have remained consistent. (The big reported loss in 2009 was mostly because of asset writedowns.)

2. Return on equity and debt
Return on equity is a great metric for measuring both management's effectiveness and the strength of a company's competitive advantage or disadvantage -- a classic Buffett consideration. When considering return on equity, it's important to make sure a company doesn't have an enormous debt burden, because that will skew your calculations and make the company look much more efficient than it is.

Ultra Petroleum generates a strong return on equity -- 33% over the past year, 20% on average over the past five years -- while employing a moderately large debt-to-equity ratio of 119%.

3. Management
CEO Michael Watford has been at the job ever since 1999 and has been at various companies in the energy industry as far back as 1975.

4. Business
Oil and gas exploration and production may be undergoing technological changes, particularly in the Marcellus shale where Ultra Petroleum has major operations, but it isn't particularly susceptible to technological disruption.

The Foolish conclusion
So is Ultra Petroleum a Buffett stock? Possibly. The company exhibits several of the quintessential characteristics of a Buffett investment: consistent earnings, tenured management, a straightforward business, and high returns on equity, though its strong returns on equity might be slightly mitigated by its moderately high debt-to-equity ratio. If you're interested in a stock that our top analysts and chief investment officer picked to beat the market, you can check out The Motley Fool's Top Stock for 2012. I invite you to download this special report for a limited time by clicking here -- it's free.

Ilan Moscovitz doesn't own shares of any company mentioned. The Motley Fool owns shares of Ultra Petroleum. Motley Fool newsletter services have recommended buying shares of Ultra Petroleum. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.