New Valuation: EV/EBITDA
2014E EBITDA = $915MM ($755MM previously disclosed estimate using $4 gas prices and $160MM from Uinta acquisition)
Net Debt = $2.49B (2014 $1.84B previous target, plus $650MM acquisition price)
Current Market Cap = $3.07B
EV/EBITDA = 6.07x
It still appears to me that Ultra Petroleum is an undervalued business, but I'm also beginning to fully understand my limitations as an investor and evaluating oil and gas exploration companies might not be in my circle of competence. The market didn't like the acquisition, the price popped after the initial news but has declined well below the pre-news level since, but I'm going to be patient here and see if management can meet their lofty return goals.
Disclosure: I own shares of UPL