Ultra Petroleum Corp.
) hit a 52-week high of $25.34 on Feb 6. In fact, the Houston,
Texas-based natural gas producer has seen its stock price climb
some 30% over the past three months. This price appreciation can
be attributed to the recent jump in natural gas prices.
CABOT OIL & GAS (COG): Free Stock Analysis
LINN CO LLC (LNCO): Free Stock Analysis
ULTRA PETRO CP (UPL): Free Stock Analysis
WARREN RSRCS (WRES): Free Stock Analysis
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Why the Bullishness?
Natural gas prices have been on a tear lately, in the process
rising to a four-year high. The single most important contributor
to this upward pressure has been a bout of powerful winter
snowstorm in the U.S. and Canada that called for the heating
fuels' higher consumption.
Taking advantage of this favorable environment, firms like Ultra
Petroleum have been able to drum up investor attention mainly
because of their ability to boost production.
Ultra Petroleum controls substantial acreage in and around the
prolific Jonah natural gas field and the Pinedale Anticline area
in the Green River Basin. Both of these areas are endowed with
rich natural gas reserves, which have remained largely untapped
to date. Ultra Petroleum's production growth over the last few
years highlights its attractive asset base. In 2012, the company
achieved record production of 257.0 billion cubic feet equivalent
(Bcfe), representing a 5% year-over-year increase.
Ultra Petroleum has also amassed a large acreage position
(260,000 net acres) in the prolific Marcellus Shale play, a key
natural gas drilling area located throughout Western Pennsylvania
and much of the Appalachian Basin. This provides the company with
a multi-year inventory of low-risk development drilling
Other positives in the Ultra Petroleum story are its competitive
cost structure and impressive margins.
Zacks Rank & Stock Picks
With Ultra Petroleum shares trading at 52-week high, any upside
from here may be limited, as suggested by the company's Zacks
Rank #3 (Hold).
Some better-ranked stocks in the domestic upstream sector include
Linn Co. LLC
Warren Resources Inc.
Cabot Oil & Gas Corp.
). All of them carry a Zacks Rank #1 (Strong Buy).