RE:RE:Random Thoughts Ultra Petroleum owned (still owns, actually, but the bankers took more than 90% of the company in the bankruptcy settlement) a massive gas field in Utah. The gas had been known to be there since the 50s, but was so deep (9-13,000 feet, if I recall correctly) and under such pressure, that every attempted well ended up blowing out. Ultra figured out how to do it. Their break even on gas was less than 70 cents. Their wells were also long-lived. Initial 80 acre spacings were infilled to 20 acres. The drilling crews knew the formation, knew what they were going to find, and every well was a massive success. Further, they had 20 years of future drill sites on their existing land package. In the summer of 2008, if I recall correctly, oil briefly hit $150, spot natgas hit $17. UP was rolling in cash, and there was no reason to expect anything to be different for many years to come. I think that because of that, the market gave them a PE ratio of more than 50. Then , management got cocky, and believed that the future could only get better. They not only took all their cash to buy shale gas rights in Pennsylvania they borrowed all they could get to lock up the Pennsylvania shale gas supply. Somehow, they didn't realize that supply-demand relationships still existed. They didn't foresee that bringing additional gas supplies to market would depress the price. When the price for gas dropped, even their cheap gas field in Utah wasn't enough to service the debt they had taken on, and the company, and stock price, imploded.