SAN FRANCISCO, Sept 30 Ultra Petroleum Corp
said on Monday it will devote as much of its capital
spending as possible to Wyoming, where the state's gas is
drawing good prices on the West Coast, while gas from the
Marcellus region in Pennsylvania had fewer places to go.
Wyoming gas now has a ready market thanks to expanded
pipeline capacity to Oregon and California, Chief Executive Mike
"We have seen good things happen with nukes shutting out
here on the West Coast," Watford told the Oil and Gas Investment
Symposium in San Francisco, hosted by the Independent Petroleum
Association of America.
One of California's two nuclear plants closed permanently
this summer, increasing power producers' need for gas in the
most populous U.S. state.
Ultra's Wyoming properties account for more than half its 17
trillion cubic feet-equivalent of reserves, and the stronger
economics are clear from Ultra's long-term plans: Wyoming will
account for 63 percent of its 4,600 future wells, but swallow
only 55 percent of the future capital deployed, it said.
The rest of the wells will be in the Marcellus basin in
Pennsylvania, which accounts for the balance of the gas-focused
Ultra shares have lost half their value in the past two
years, and Watford said on Monday he did underestimate how much
over-investment had taken place in the natural gas industry.
While he cited figures showing the Ultra remained the
lowest-cost U.S. gas producer, he also acknowledged that costs
had to be kept down given the persistently low prices for gas in
North America - whereas crude oil trades at over $100 per
"We're in a commodity business, and we're in the wrong
commodity right now," he said.