UPDATE: Canaccord Initiates Ultra Petroleum with Hold on Drilling Plan Uncertainty

In a report published Tuesday, Canaccord Genuity analyst Robert Christensen initiated coverage on

with a Hold rating and $22.00 price target. In the report, Canaccord Genuity noted, “UPL is a very low-cost producer of natural gas with potential upside in a rising price environment. However, its financial leverage makes it rather risky. The high debt load has led UPL to curtail much of its drilling to preserve its assets until prices recover. With high decline rates in both areas of operation, production and cash flow will fall. Therefore, UPL is in a bit of a ‘vicious circle' until gas prices rise enough to allow it to drill more and resume production growth.” Ultra Petroleum Corp. closed on Monday at $20.92.