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Play Updates - Citigroup and Ultra Petroleum

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Play Updates in Ultra Petroleum and Citigroup

Ultra Petroleum hit our breakout trigger at $83 this morning.

UPL - Ultra Petroleum

 

This may seem like a strange play given my thoughts that gas prices could go down this summer. The reason UPL has been rising is the new cross country pipeline to their property in Utah. Once completed they will be able to sell their gas for more money with access to the eastern markets. Ultra is on a capex program to spend $755 million in 2008 to boost production by 18-22%. They pln to boost production another 25-30% in 2009 over 2008 levels. 2008 estimates are for 135-140 BCF. They produced 117 BCF in 2007. 2009 estimates are for 170-175 BCF. 2010 estimates are for 200-205 BCF. That would be nearly double their 2007 production.

 

Company Info:

 

Ultra Petroleum Corp. (Ultra) is an independent oil and gas company engaged in the development, production, operation, exploration and acquisition of oil and natural gas properties. The Company?s operations are primarily in the Green River Basin of southwest Wyoming. The Company continually evaluates other opportunities for the acquisition, exploration and development of oil and natural gas properties. As of December 31, 2007, Ultra owns interests in approximately 121,652 gross (62,756 net) acres in Wyoming covering approximately 230 square miles. The Company owns an interest in approximately 676 gross producing wells in this area and is operator of approximately 50% of the 676 gross wells. The Company owns interests in 252,629 gross acres in Pennsylvania. On October 22, 2007, the Company sold Sino-American Energy Corporation (Sino-American), which owned its Bohai Bay assets in China.

Breakout trigger: $83 Hit April 14th 

 

Buy 2009 $90 LEAP Call OZH-AR @ $9.40 4/14
 
Breakdown trigger: $76 Cancelled
 
Buy 2009 $85 LEAP Call OZH-AQ 
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C - Citigroup Stopped Out

The announcement by Wachovia (WB) of a $393 million loss and the need to raise billions in additional capital struck fear in bank investors once again. Citigroup declined to our stop at $22.50 and we exited for a breakeven on the trade.

Jim Brown

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