Back in April, news bubbled to the surface that two American independent oil & gas outfits sought to shed their respective stakes in an Anadarko
So how did Ultra fare in this disposal? According to yesterday's press release, the Chinese assets accounted for roughly 1% of its year-end proved reserves, or a little less than 24 billion cubic feet of gas equivalent. The sale works out to more than $9 per thousand cubic feet. What's Mandarin for "cha-ching"?
Investors were delighted with the news, bidding up the stock more than 6%. The firm can now pay down some debt, though its leverage is already modest. I think Ultra will direct more capital toward stock buybacks. This firm likes pointing to its industry-leading reserve growth per share, which tops formidable competitors XTO Energy
This torrid reserve growth is coming from the Pinedale Anticline field in Wyoming, the country's second largest by reserves. Royal Dutch Shell
With China out of the picture, Ultra is a very straightforward play on Rockies gas. It's an ultra low-cost operator, and with the Rockies Express pipeline still set to open for business on Jan. 1, Ultra is sitting pretty on the Anticline.
The Inside Value team has some natural-gas plays for your consideration. In lead advisor Philip Durell's view, both offer greater than a 25% margin of safety at present prices. The price of a 30-day trial? Zero dollars.
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