Natural Gas Prices

[dan_s]

I think natgas has to top $7.00/mcf before we see the large E&P companies allocate capital back to drilling in the dry gas shale plays.

UPL management's discussion on the subject:

"Even low cost producer UPL is taking the safe route of shifting more
capital to oil. Watford said on last week's call that the company is
putting the pedal down on their new oil play while backing way down in
the Marcellus. They will continue to work the old reliable Pinedale but
the returns on oil are expected to be astronomical versus nat gas. It
seems UPL has turned its nat gas expertise to the new oil play and it
seems to be working magic."

EOG CEO said the same. They are focused on drilling for oil.

[allen46]

Dan, what is your opinion of UPL? I own a full position and like the stock a lot, but my shares are borrowed at Fidelity.

[dan_s]

UPL is a good company that will definitely benefit if natural gas prices move higher. I have not modeled it in a long time.

UPL looks like they have too much debt until you look at the year-end reserve report. They took a big writedown of assets at end of 2012 due to low gas prices. Read This: http://finance.yahoo.com/news/ultra-pet ... 00834.html