Analysts who turned their back on Ultra Petroleum over the past year may be about to change their tune as the independent oil and natural gas company appears to be primed for some breakout growth and could very well be an acquisition target by a larger competitor.

Morningstar analyst Mark Hanson this week added Ultra Petroleum (NYSE: UPL) to the firm's "Best Ideas" list with a four-star rating and raised its fair value price estimate from $59 a share to $64 a share.

"Our revised fair value is driven in part by an updated price deck as well as a handful of modeling tweaks that reflect management's latest guidance and the company's most recent results," he wrote in a research note.

"At $64, we concede that Ultra doesn't look cheap, at least on a forward-year basis," he added. Over the longer term, however, we believe patient investors will be rewarded as Ultra's Pinedale and Marcellus assets represent one of the best one-two punches in the North American E&P space."

Last quarter, Ultra posted a profit of $38 million on sales of $237.5 million, down from a profit of $95 million in the year-ago quarter.

In the past year, Stifel Nicolaus, UBS and Global Hunter all downgraded the stock from a "buy" recommendation to a "hold" while Canaccord Genuity initiated it with a "sell" rating in January. However, Canaccord Genuity is starting to come around, upgrading the stock to a "hold" recommendation in May.

Ultra Petroleum is a major player in the natural gas and shale exploration universe, hammering out a prominent position in both southwest Wyoming (Pinedale) and north-central Pennsylvania (Marcellus).

The Houston-based company controls more than 56,000 net acres in Wyoming and 225,000 net acres in Pennsylvania.

These holdings, Hanson said, make it especially appealing to larger energy companies who have accumulated a mountain of cash in the past few years and are eager to put it to work.

"A takeout offer from one of the majors or a larger independent could also help fast-track value realization," he wrote. "Ultra remains one of our top takeover candidates given the quality and scalability of its assets."

Ultra Petroleum shares were trading at around $47.65 a share this week after peaking at a 52-week high of $53.85 in June.