Attached files
| file | filename |
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| 8-K - ULTRA PETROLEUM CORP | v191953_8k.htm |
NEWS
RELEASE
FOR
IMMEDIATE RELEASE
ULTRA PETROLEUM ANNOUNCES
FIRST SIX MONTHS AND SECOND QUARTER 2010 FINANCIAL AND OPERATING RESULTS,
REAFFIRMS 2010 CAPITAL BUDGET AND PRODUCTION GUIDANCE, AND INCREASES
HEDGES
HOUSTON, Texas – July 30, 2010
– Ultra Petroleum Corp. (NYSE: UPL) continued to deliver strong financial and
operating performance for the first half and the second quarter of 2010.
Highlights include:
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·
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Record
natural gas and crude oil production of 100.9 Bcfe for the first six
months of 2010, a 17 percent increase from the prior
year
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|
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·
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Produced
record volumes of 52.4 Bcfe in the second quarter of 2010, an increase of
18 percent from the second quarter of
2009
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|
·
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Operating
cash flow(1)
for the first half of 2010 of $367.1 million, an increase of 25 percent
from same period in 2009
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|
|
·
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Operating
cash flow(1)
of $178.2 million for the quarter ended June 30, 2010, an increase of 6
percent from the same quarter a year
ago
|
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·
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Earnings
for the six month period ended June 30, 2010, of $167.7 million or $1.09
per diluted share – adjusted, an increase of 42 percent from the same
period in 2009
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·
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Earnings
of $82.8 million in the second quarter of 2010, or $0.54 per diluted share
– adjusted, an increase of 6 percent from
2009
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·
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Outstanding
2010 year-to-date (adjusted) returns: 68 percent cash flow margin, 31
percent net income margin, 44 percent return on equity, and 19 percent
return on capital
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·
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Superior
returns in the second quarter of 2010 (adjusted): 67 percent cash flow
margin, 31 percent net income margin, 42 percent return on equity, and 18
percent return on capital
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“Ultra’s
profitable results for the first half of 2010 were driven by higher price
realizations and increased production volumes. On an unhedged basis, our
realized natural gas price for the first six months of 2010 increased more than
40 percent over the same period last year. We achieved higher natural gas prices
while preserving our industry-leading cost structure, keeping it flat with the
prior year. Ultra Petroleum’s sustainable growth coupled with our consistently
low cost structure offers a compelling value proposition,” stated Michael D.
Watford, Chairman, President and Chief Executive Officer.
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Ultra
Petroleum Corp.
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Page
1 of 12
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2nd
Quarter 2010 Results
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Natural
gas and crude oil production for the six month period ended June 30, 2010,
increased to 100.9 billion cubic feet equivalent (Bcfe) compared to 86.6 Bcfe
for the six month period ended June 30, 2009, a 17 percent increase. Production
for the first six months of 2010 was comprised of 97.0 billion cubic feet (Bcf)
of natural gas and 649.8 thousand barrels (MBbls) of condensate.
Operating
cash flow(1) for
the first half of 2010 was $367.1 million, an increase of 25 percent, as
compared to $292.7 million for the six months ended June 30, 2009. Adjusted
earnings for the six month period ended June 30, 2010, increased 42 percent over
the same period a year ago, registering $167.7 million or $1.09 per diluted
share.
The
average realized natural gas price during the six month period ended June 30,
2010, was $5.09 per thousand cubic feet (Mcf), including realized gains and
losses on commodity hedges. This compares to $4.76 per Mcf during the first six
months of 2009, an increase of seven percent. Excluding realized
gains and losses on commodity hedges, the company’s average price for natural
gas increased 42 percent to $4.71 per Mcf, as compared to $3.31 per Mcf for the
same period a year ago. The realized condensate price was $68.57 per barrel
(Bbl), an increase of 83 percent over the prior year period, as compared to
$37.56 per Bbl during the six month period ended June 30, 2009.
For the
second quarter of 2010, production of natural gas and crude oil increased 18
percent to a record 52.4 Bcfe, which compares to production of 44.5 Bcfe during
the second quarter of 2009. Ultra Petroleum’s second quarter 2010 production
levels were the highest ever achieved by the company. The company’s production
for the second quarter was comprised of 50.4 Bcf of natural gas and 327.9 Mbls
of condensate.
Ultra
Petroleum reported strong operating cash flow(1) of
$178.2 million for the quarter ended June 30, 2010, a six percent increase over
the same period in 2009. Adjusted net income was $82.8 million, or $0.54 per
diluted share for the second quarter, compared to $78.3 million, or $0.51 per
diluted share for the same period a year ago. For the second quarter of 2010,
Ultra’s reported net income was $61.5 million or $0.40 per diluted share, which
compares to a net loss of $25.5 million or ($0.17) per diluted share in the
prior year period. The company recorded approximately $6.4 million, net of
taxes, of litigation expense in the second quarter, the first such expense in
ten years. Second quarter 2010 results also included an unrealized,
mark-to-market loss of $14.9 million, net of taxes, on the company’s commodity
hedges. The unrealized loss on commodity hedges and anomalous litigation expense
are typically excluded by the investment community in published
estimates.
During
the second quarter of 2010, Ultra Petroleum’s average realized natural gas price
was $4.83 per Mcf, including realized gains and losses on commodity hedges. This
is a slight decrease as compared to $5.04 per Mcf in the second quarter of 2009.
Excluding realized gains and losses on commodity hedges, the company’s average
realized price for natural gas was $4.09 per Mcf. This is a 51 percent increase
as compared to $2.71 per Mcf in the second quarter of 2009. The realized
condensate price in the second quarter of 2010 was $67.64 per Bbl, an increase
of 46 percent in comparison to $46.27 per Bbl for the same period in
2009.
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Ultra
Petroleum Corp.
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Page 2
of 12
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2nd
Quarter 2010 Results
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“Our
strong performance this quarter was aided by the 51 percent increase in unhedged
natural gas prices. Rockies natural gas prices have strengthened significantly
in 2010,” commented Watford.
Capital Investment
Program
Ultra
Petroleum invested approximately $905.0 million during the first six months of
2010 towards the 2010 capital investment program. Approximately $315.0 million
was devoted to Wyoming development and facilities investments while the company
spent $170.0 million toward Pennsylvania development and facilities activities.
In addition, Ultra invested $400.0 million in land acquisitions in Pennsylvania.
As previously announced, the company’s total estimated capital investment
program for 2010 of $1,450.0 million is expected to remain unchanged for the
remainder of the year.
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2010
Capital Expenditure Update ($ millions)
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||||||||
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Annual
Budget
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Year-to-Date
Actual
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|||||||
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Wyoming:
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||||||||
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Drilling
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$ | 575 | $ | 300 | ||||
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Facilities
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25 | 15 | ||||||
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Sub
Total
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$ | 600 | $ | 315 | ||||
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Pennsylvania:
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Drilling
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$ | 375 | $ | 155 | ||||
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Facilities
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65 | 15 | ||||||
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Sub
Total
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$ | 440 | $ | 170 | ||||
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Corporate
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Other
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$ | 10 | $ | 20 | ||||
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Sub
Total Capital Budget
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$ | 1,050 | $ | 505 | ||||
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Land
Acquisitions
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$ | 400 | $ | 400 | ||||
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Total
Capital Budget
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$ | 1,450 | $ | 905 | ||||
“We
opportunistically expanded our second high-growth, high-returning asset this
year through our strategic land acquisition in the Marcellus Shale. Growing and
adding scale to our Marcellus position affords us two focus areas that possess
the cost structure, margins, and returns to build profitably upon our existing
solid foundation,” Watford added.
Wyoming - Operational
Highlights
Ultra
Petroleum continues to achieve significant efficiency gains in its operated
drilling program. For the first half of 2010, Ultra drilled and cased to total
depth (TD) 74 gross (50 net) wells compared to 55 gross (35 net) wells for the
six months ended June 30, 2009, an increase of 35 percent over the prior year.
During the second quarter of 2010, Ultra reached TD on 36 gross (24 net)
Pinedale wells. This compares to 19 gross (12 net) wells drilled and cased in
the second quarter 2009, an increase of 90 percent. In the second quarter, Ultra
established a new standard for drilling performance by continuing to drive down
average drill time in Pinedale. For the quarter, Ultra averaged 14.5 days per
well spud to TD, which compares to an average of 20.6 days in the second quarter
of 2009, or a 30 percent improvement over the prior year period. Further
highlighting decreased drill times, 86 percent of the wells drilled in the
second quarter reached TD in 15 days or less while 94 percent were drilled in
less than 20 days. These operational milestones led to continued decreasing well
costs. Ultra’s completed well costs in Wyoming averaged $4.6 million for the
second quarter of 2010, a reduction of 12 percent in comparison to $5.25 million
for the second quarter of 2009.
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Ultra
Petroleum Corp.
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Page 3
of 12
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2nd
Quarter 2010 Results
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Improving
Efficiencies
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2007
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2008
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2009
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Q1 2010
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Q2 2010
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Spud
to TD (days)
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35 | 24 | 20 | 16 | 15 | |||||||||||||||
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Rig
release to rig release (days)
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48 | 32 | 24 | 20 | 17 | |||||||||||||||
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%
wells drilled < 20 days
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2 | % | 27 | % | 73 | % | 92 | % | 94 | % | ||||||||||
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Well
cost – pad ($MM)
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$ | 6.2 | $ | 5.5 | $ | 5.0 | $ | 4.8 | $ | 4.6 | ||||||||||
Ultra
completed approximately 2,380 frac stages in the first half of 2010 across
almost 90 wells, an average of 26 frac stages per well. This compares to 1,510
frac stages completed in the first six months of 2009 across 61 wells, an
average of 25 stages per well. In the second quarter 2010, Ultra completed 48
wells averaging 27 stages per well for a total of nearly 1,300 frac stages, as
compared to 627 frac stages completed in the second quarter of 2009 across 23
wells, an average of 27 stages per well.
For the
six months ended June 30, 2010, Ultra brought on production 127 gross (69 net)
wells, as compared to 115 gross (56 net) wells in the first half of 2009, an
increase of 10 percent. Ultra placed 68 gross (37 net) new Pinedale wells on
production during the second quarter of 2010, as compared to 64 gross (26 net)
wells in the second quarter of 2009. The average initial production (IP) rate in
the second quarter of 2010 for the Ultra-operated wells was 9.8 million cubic
feet (MMcf) per day. The average estimated ultimate recovery (EUR) for the
Ultra-operated wells was 6.2 billion cubic feet equivalent (Bcfe) for the
quarter ended June 30, 2010.
Pennsylvania - Operational
Highlights
During
the first six months of 2010, Ultra participated in the drilling of 64 gross (38
net) horizontal Marcellus wells in Pennsylvania. In the second quarter of 2010,
Ultra drilled 37 gross (22 net) Pennsylvania horizontal Marcellus wells. During
the second quarter of 2010, the company’s horizontal wells averaged
approximately 4,400 feet lateral length and 12 frac stages. In the first half of
2010, the company brought on line 21 gross (14 net) horizontal Marcellus wells.
Ultra connected 20 gross (13 net) new horizontal Marcellus wells to sales during
the second quarter of 2010. Ultra’s net production in Pennsylvania averaged 33
MMcf per day, while reaching a peak of 46 MMcf per day in the quarter-ended June
30, 2010. As of the end of the second quarter of 2010, there were 36 gross (22
net) horizontal Marcellus wells producing in Pennsylvania. The early production
performance of these wells continues to exceed the company’s current type-curve
expectations. To date, the average daily production rate on day 60 is over 3.0
MMcf per day among all of the horizontal wells producing currently. Ultra
continues to swiftly incorporate information gained to enhance future well
performance.
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Ultra
Petroleum Corp.
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Page 4
of 12
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2nd
Quarter 2010 Results
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Ultra
Petroleum continues to expand its leasehold position in the preferred
Pennsylvania Marcellus Shale. The company now owns approximately 470,000 gross
(255,000 net) acres in north central Pennsylvania. In the first half of 2010,
the company increased its net acreage position by over 50 percent, adding
approximately 85,000 net acres. Ultra started the year with approximately
320,000 gross (170,000 net) acres. The largely contiguous acreage was
strategically added to the company’s core position encompassing Tioga, Lycoming,
Potter, Clinton and Centre counties.
“We are
fortunate to be early entrants into Pennsylvania where we have assembled an
outstanding acreage position at attractive lease terms. We accumulated our net
position for significantly less than current industry averages. In terms of
accessible Pennsylvania Marcellus acreage, we are one of the top ten largest
acreage holders. Given the robust economics we enjoy and our low cost structure,
we will be able to generate significant returns for our shareholders,” stated
Watford.
“Combining
our 8 Tcfe of undeveloped reserves in Pennsylvania with our 12 Tcfe in Wyoming,
I am comfortable we have 20 Tcfe of identified, undeveloped future reserves in
our two high-returning, high-margin assets. Future capital to develop these
reserves is estimated to be $24.7 billion dollars, which implies a finding and
development cost of $1.24 per Mcfe,” added Watford.
Commodity
Hedges
Ultra
Petroleum opportunistically layered on additional 2011 hedges to underpin the
excellent economics of its capital investments. This hedging strategy helps
increase certainty around cash flow to improve Ultra’s ability to meet its
anticipated capital expenditure requirements. The total volume of commodity
hedges for 2011 is currently 133.2 Bcf at a weighted–average realized price of
$5.83 per Mcf. Currently, the commodity hedges represent over 50 percent of the
company’s 2011 forecasted production of 260 Bcfe.
In
addition, the company has 50.4 Bcf hedged for the remainder of 2010 at a
weighted-average realized price of $5.49 per Mcf.
“Our
hedge position for 2010 and 2011 underpins the excellent economics in our
business. These hedged volumes along with our 73 Bcf of annual firm
transportation on Rockies Express create diversified markets for financial
success,” stated Watford.
As of
today, Ultra Petroleum has the following positions in place to mitigate its
natural gas commodity price exposure:
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Ultra
Petroleum Corp.
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Page 5
of 12
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2nd
Quarter 2010 Results
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Q3
2010
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Q4
2010
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Total
Balance
- 2010
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Total
2011
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Total
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Average
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Total
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Average
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Total
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Average
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Total
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Average
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|||||||||||||||||||||||||
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Volume
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Price
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Volume
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Price
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Volume
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Price
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Volume
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Price
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(Bcf)
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($/Mcf)
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(Bcf)
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($/Mcf)
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(Bcf)
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($/Mcf)
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(Bcf)
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($/Mcf)
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|||||||||||||||||||||||||
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NW
Rockies
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23.9 | $ | 5.33 | 20.9 | $ | 5.33 | 44.8 | $ | 5.33 | 62.0 | * | $ | 5.41 | |||||||||||||||||||
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Northeast
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2.8 | $ | 6.79 | 2.8 | $ | 6.79 | 5.6 | $ | 6.79 | 71.2 | * | $ | 6.19 | |||||||||||||||||||
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Total
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26.7 | $ | 5.48 | 23.7 | $ | 5.50 | 50.4 | $ | 5.49 | 133.2 | $ | 5.83 | ||||||||||||||||||||
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*
The total volume of 2011 hedges are equally divided across the four
quarters
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||||||||||||||||||||||||||||||||
Natural Gas Marketing
Update
The table
below provides a historical, current, and future perspective on average basis
differentials for Wyoming gas (NW Rockies) and premium markets in the Northeast
(Dominion South). The basis differential is expressed as a percentage of Henry
Hub.
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Basis
Differential as a Percentage (%) of Henry Hub
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||
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NW
Rockies
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Dominion
South
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Historical
Average Basis Differential (2006 – 2009)
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71
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105
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Current
Average Basis Differential (Balance 2010)
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87
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103
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Future
Average Basis Differential (2011 – 2012)
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91
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103
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“Going
forward, price spreads should be relatively flat across the US, while basis in
the Rockies continues to strengthen in conjunction with new pipeline
construction and reduced supply,” stated Watford. “In fact, Wyoming natural gas
production has been down the past seven months, consistent with industry’s
decreasing activity in the Rockies,” Watford added.
Management
Update
During
the second quarter, Ultra created a New Ventures group headed by Sally Zinke as
Director, New Ventures. Ms. Zinke and her team are charged with finding new,
significant capital investment opportunities for the company that generate
similar returns as the Wyoming Lance and Pennsylvania Marcellus. Ms. Zinke began
working for Ultra in 2000 in the Geology and Geophysical Department while most
recently serving as Director, Exploration. In this capacity, Ms. Zinke was
instrumental in pioneering the growth and development of Pinedale, as she played
a key role on the team that elevated the unconventional natural gas play from
relative obscurity to become one of the top five natural gas fields in North
America based on estimated reserves. Furthermore, Ms. Zinke, leveraging the
expertise refined in Wyoming, played an integral role in the company’s initial
exploration stages of the Marcellus Shale to help establish the play as a second
core property for Ultra Petroleum.
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Ultra
Petroleum Corp.
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Page 6
of 12
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2nd
Quarter 2010 Results
|
“We are
delighted to have Sally head our New Ventures group as her wealth of industry
experience as well as technical and business skills will parlay well into the
success of evaluating new investment opportunities. Of the potential prospects
our New Ventures group has evaluated this year, the economic returns of our
strategic Marcellus acquisition have proven to be superior to any of the other
opportunities we have considered,” stated Watford.
In
connection with Ms. Zinke’s new role, Ultra is pleased to announce that Douglas
Selvius joined the company in April 2010 as Director, Exploration to assume
responsibilities of leading the Geological and Geophysical efforts in Wyoming
and Pennsylvania. With over 27 years in the oil and gas industry, Mr. Selvius
most recently headed SM Energy Company’s Gulf Coast and Offshore Exploration
activities (previously known as St. Mary Land and Exploration Company). A
graduate of the University of Michigan with a degree in Geology, Mr. Selvius has
served in multiple operational and managerial roles at various exploration and
production companies.
“Doug is
a welcomed addition to our leadership team and we are looking forward to
leveraging his exceptional talents and breadth of experience as we continue to
execute on our strategy of profitable growth,” commented Watford.
Production
Guidance
Ultra
Petroleum is reaffirming its annual natural gas and crude oil production
guidance for 2010 of 213 to 216 Bcfe. Production for 2010 is an 18 to 20 percent
increase over 2009’s record annual production of 180.1 Bcfe.
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2010
Estimated Total Production (Bcfe)
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1st
Quarter(A)
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48.5
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2nd
Quarter(A)
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52.4
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3rd
Quarter(E)
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54.5
– 55.5
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Full-Year
2010(E)
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213
– 216
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At this
time, Ultra is reaffirming production guidance for 2011 and 2012 targeting 20
percent per annum production growth.
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Estimated
Total Production (Bcfe)
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||
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2011
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2012
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Total
Production (Bcfe)
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250
– 260
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295
– 310
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Financial
Strength
Ultra has
a strong balance sheet, ending the quarter with 88 percent of its outstanding
debt composed of long-term, fixed rate debt with an average remaining term of
approximately 8 years. On June 30, 2010, Ultra had $1.36 billion in unused debt
capacity.
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Ultra
Petroleum Corp.
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Page 7
of 12
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2nd
Quarter 2010 Results
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Price Realizations and Differentials Guidance
In the
third quarter of 2010, the company’s realized natural gas price is expected to
average 4 to 6 percent below the NYMEX price due to regional differentials,
before consideration of any hedging activity. Realized pricing for condensate is
expected to be about $10.00 less than the average NYMEX crude oil
price.
Expense
Guidance
The
following table presents the company’s expected expenses in the third quarter of
2010 per Mcfe assuming a $4.63 per mmbtu Henry Hub natural gas price and a
$76.87 per Bbl NYMEX crude oil price:
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Costs
Per Mcfe
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Q3
2010
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|
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Lease
operating expenses
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$
0.22 – 0.24
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Production
taxes
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$
0.44 – 0.46
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Gathering
fees
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$
0.24 – 0.26
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Transportation
charges
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$
0.31 – 0.33
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Depletion
and depreciation
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$
1.11 – 1.13
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General
and administrative – total
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$
0.12 – 0.13
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Interest
and debt expense
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$ 0.25 – 0.27
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Total
costs per Mcfe
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$
2.69 – 2.82
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Income Tax
Guidance
For the
year, Ultra projects a 35.5 percent effective tax rate (based on adjusted net
income) with approximately 2 to 3 percent of that amount expected to be
currently payable.
Other Events During the
Quarter
Ultra
Petroleum joined the broad-market Russell 3000Ò Index
when Russell Investments reconstituted its comprehensive set of US and global
equity indexes on June 25, 2010. Annual reconstitution of Russell’s US indexes
captures the 4,000 largest US stocks as of the end of May, ranking them by total
market capitalization. Membership in the Russell 3000, which remains in place
for one year, means automatic inclusion in the large-cap Russell 1000Ò
Index or small-cap Russell 2000Ò
Index as well as the appropriate growth and value style indexes. An
industry-leading $3.9 trillion in assets currently are benchmarked to them.
Total returns data for the Russell 3000 and other Russell Indexes is available
at http://www.russell.com/Indexes/performance/default.asp.
Financial
tables to follow.
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Ultra
Petroleum Corp.
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Page 8
of 12
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|
2nd
Quarter 2010 Results
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Ultra
Petroleum Corp.
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|
Consolidated
Statement of Operations (unaudited)
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|
All
amounts expressed in
US$000's
|
|
For
the Six Months Ended
|
For
the Quarter Ended
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|||||||||||||||
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June
30,
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June
30,
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|||||||||||||||
|
2010
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2009
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2010
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2009
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Volumes
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||||||||||||||||
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Oil
liquids (Bbls)
|
649,794 | 649,243 | 327,919 | 329,835 | ||||||||||||
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Natural
gas (Mcf)
|
97,016,440 | 82,682,313 | 50,447,951 | 42,491,032 | ||||||||||||
|
Mcfe
- Total
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100,915,204 | 86,577,771 | 52,415,465 | 44,470,042 | ||||||||||||
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Revenues
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||||||||||||||||
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Oil
sales
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$ | 44,557 | $ | 24,386 | $ | 22,180 | $ | 15,262 | ||||||||
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Natural
gas sales
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456,955 | 273,908 | 206,208 | 115,079 | ||||||||||||
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Total
operating revenues
|
501,512 | 298,294 | 228,388 | 130,341 | ||||||||||||
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Expenses
|
||||||||||||||||
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Lease
operating expenses
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21,858 | 20,387 | 11,534 | 10,144 | ||||||||||||
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Production
taxes
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50,893 | 30,089 | 22,487 | 12,738 | ||||||||||||
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Gathering
fees
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24,453 | 22,364 | 12,498 | 11,573 | ||||||||||||
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Total
lease operating costs
|
97,204 | 72,840 | 46,519 | 34,455 | ||||||||||||
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Transportation
charges
|
32,427 | 26,540 | 16,522 | 13,185 | ||||||||||||
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Depletion
and depreciation
|
108,120 | 105,635 | 56,853 | 44,974 | ||||||||||||
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Write-down
of proved oil and gas properties
|
- | 1,037,000 | - | - | ||||||||||||
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General
and administrative
|
6,370 | 5,405 | 2,749 | 2,956 | ||||||||||||
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Stock
compensation
|
6,137 | 4,819 | 3,356 | 2,694 | ||||||||||||
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Total
operating expenses
|
250,258 | 1,252,239 | 125,999 | 98,264 | ||||||||||||
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Other
income (expense), net
|
173 | (3,117 | ) | 22 | (505 | ) | ||||||||||
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Litigation
expense
|
(9,902 | ) | - | (9,902 | ) | - | ||||||||||
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Interest
and debt expense
|
(23,156 | ) | (17,195 | ) | (11,437 | ) | (9,897 | ) | ||||||||
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Realized
gain (loss) on commodity derivatives
|
36,985 | 119,561 | 37,654 | 99,205 | ||||||||||||
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Unrealized
(loss) gain on commodity derivatives
|
158,932 | 26,169 | (23,088 | ) | (159,903 | ) | ||||||||||
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Income
(loss) before income taxes
|
414,286 | (828,527 | ) | 95,638 | (39,023 | ) | ||||||||||
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Income
tax provision (benefit) - current
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2,501 | 23 | 696 | - | ||||||||||||
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Income
tax provision (benefit) - deferred
|
147,916 | (290,436 | ) | 33,449 | (13,497 | ) | ||||||||||
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Net
income (loss)
|
$ | 263,869 | $ | (538,114 | ) | $ | 61,493 | $ | (25,526 | ) | ||||||
|
Impairment
of proved oil and gas properties, net
of tax
|
$ | - | $ | 673,013 | $ | - | $ | - | ||||||||
|
Litigation
expense, net of tax
|
6,387 | - | 6,387 | - | ||||||||||||
|
Unrealized
loss (gain) on commodity derivatives, net of tax
|
(102,511 | ) | (16,984 | ) | 14,892 | 103,777 | ||||||||||
|
Adjusted
net income
|
$ | 167,745 | $ | 117,915 | $ | 82,772 | $ | 78,251 | ||||||||
|
Operating
cash flows (1)
|
$ | 367,110 | $ | 292,735 | $ | 178,239 | $ | 168,549 | ||||||||
|
(1)
(see non-GAAP reconciliation)
|
||||||||||||||||
|
Weighted
average shares – basic
|
152,187 | 151,285 | 152,300 | 151,331 | ||||||||||||
|
Weighted
average shares – diluted
|
154,268 | 151,285 | 154,310 | 151,331 | ||||||||||||
|
Earnings
per share
|
||||||||||||||||
|
Net
income - basic
|
$ | 1.73 | $ | (3.56 | ) | $ | 0.40 | $ | (0.17 | ) | ||||||
|
Net
income - fully diluted
|
$ | 1.71 | $ | (3.56 | ) | $ | 0.40 | $ | (0.17 | ) | ||||||
|
Adjusted
earnings per share
|
||||||||||||||||
|
Adjusted
net income - basic
|
$ | 1.10 | $ | 0.78 | $ | 0.54 | $ | 0.52 | ||||||||
|
Adjusted
net income - fully diluted (4)
|
$ | 1.09 | $ | 0.77 | $ | 0.54 | $ | 0.51 | ||||||||
|
Realized
Prices
|
||||||||||||||||
|
Oil
liquids (Bbls)
|
$ | 68.57 | $ | 37.56 | $ | 67.64 | $ | 46.27 | ||||||||
|
Natural
gas (Mcf), including realized gain (loss) on commodity
derivatives
|
$ | 5.09 | $ | 4.76 | $ | 4.83 | $ | 5.04 | ||||||||
|
Natural
gas (Mcf), excluding realized gain (loss) on commodity
derivatives
|
$ | 4.71 | $ | 3.31 | $ | 4.09 | $ | 2.71 | ||||||||
|
Costs
Per Mcfe
|
||||||||||||||||
|
Lease
operating expenses
|
$ | 0.22 | $ | 0.24 | $ | 0.22 | $ | 0.23 | ||||||||
|
Production
taxes
|
$ | 0.50 | $ | 0.35 | $ | 0.43 | $ | 0.29 | ||||||||
|
Gathering
fees
|
$ | 0.24 | $ | 0.26 | $ | 0.24 | $ | 0.26 | ||||||||
|
Transportation
charges
|
$ | 0.32 | $ | 0.31 | $ | 0.32 | $ | 0.30 | ||||||||
|
Depletion
and depreciation
|
$ | 1.07 | $ | 1.22 | $ | 1.08 | $ | 1.01 | ||||||||
|
General
and administrative - total
|
$ | 0.12 | $ | 0.12 | $ | 0.12 | $ | 0.13 | ||||||||
|
Interest
and debt expense
|
$ | 0.23 | $ | 0.20 | $ | 0.22 | $ | 0.22 | ||||||||
| $ | 2.71 | $ | 2.68 | $ | 2.62 | $ | 2.43 | |||||||||
|
Ultra
Petroleum Corp.
|
Page 9
of 12
|
|
2nd
Quarter 2010 Results
|
|
Note:
Amounts on a per Mcfe basis may not total due to
rounding.
|
||||||||||||||||
|
Adjusted
Margins
|
||||||||||||||||
|
Adjusted
Net Income (2)
|
31 | % | 28 | % | 31 | % | 34 | % | ||||||||
|
Adjusted
Operating Cash Flow Margin (3)
|
68 | % | 70 | % | 67 | % | 73 | % | ||||||||
|
Ultra
Petroleum Corp.
|
|
Supplemental
Balance Sheet Data
|
|
All
amounts expressed in US$000's
|
|
As
of
|
||||||||||||||||
|
June
30,
|
December
31,
|
|||||||||||||||
|
2010
|
2009
|
|||||||||||||||
|
(Unaudited)
|
||||||||||||||||
|
Cash
and cash equivalents
|
$ | 8,329 | $ | 14,254 | ||||||||||||
|
Long-term
debt
|
||||||||||||||||
|
Bank
indebtedness
|
146,000 | 260,000 | ||||||||||||||
|
Senior
notes
|
1,035,000 | 535,000 | ||||||||||||||
| $ | 1,181,000 | $ | 795,000 | |||||||||||||
|
Ultra
Petroleum Corp.
|
Page
10 of 12
|
|
2nd
Quarter 2010 Results
|
|
Ultra
Petroleum Corp.
|
|
Reconciliation
of Cash Flow and Cash Provided by Operating Activities
(unaudited)
|
|
All
amounts expressed in US$000's
|
|
The
following table reconciles net cash provided by operating activities with
operating cash flow as derived from the company’s financial
information. These statements are unaudited and subject to
adjustment.
|
|
For
the Six Months Ended
|
For
the Quarter Ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
Net
cash provided by operating activities
|
$ | 372,182 | $ | 240,400 | $ | 203,504 | $ | 108,483 | ||||||||
|
Net
changes in operating assets and liabilities
|
||||||||||||||||
|
and other
non-cash items*
|
(5,072 | ) | 52,335 | (25,265 | ) | 60,066 | ||||||||||
|
Cash
flow from operations before changes in
|
||||||||||||||||
|
operating
assets and liabilities
|
$ | 367,110 | $ | 292,735 | $ | 178,239 | $ | 168,549 | ||||||||
|
(1)
Operating cash flow is defined as net cash provided by operating
activities before changes in operating assets and liabilities. Management
believes that the non-GAAP measure of operating cash flow is useful as an
indicator of an oil and gas exploration and production company's ability
to internally fund exploration and development activities and to service
or incur additional debt. The company has also included this
information because changes in operating assets and liabilities relate to
the timing of cash receipts and disbursements which the company may not
control and may not relate to the period in which the operating activities
occurred. Operating cash flow should not be considered in
isolation or as a substitute for net cash provided by operating activities
prepared in accordance with GAAP.
|
||||||||
|
(2)
Adjusted Net Income Margin is defined as Adjusted Net Income divided by
the sum of Oil and Natural Gas Sales plus Realized Gain (Loss) on
Commodity Derivatives.
|
||||||||
|
(3)
Adjusted Operating Cash Flow Margin is defined as Operating Cash Flows
divided by the sum of Oil and Natural Gas Sales plus Realized Gain (Loss)
on Commodity Derivatives.
|
||||||||
|
(4)
For the six months and quarter ended June 30, 2009, fully diluted shares
excludes 2.7 million and 2.9 million, respectively, potentially dilutive
instruments that were anti-dilutive due to the net loss for the period
ended June 30, 2009.
|
||||||||
|
*Other
non-cash items include excess tax benefit from stock based compensation
and other.
|
About Ultra
Petroleum
Ultra
Petroleum Corp. is an independent exploration and
production company focused on
developing its long-life natural gas reserves in the Green River Basin of
Wyoming – the Pinedale and Jonah fields – and is in the early exploration and
development stages in the Appalachian Basin of Pennsylvania – Marcellus Shale.
Ultra is listed on the New York Stock Exchange and trades under the ticker
symbol "UPL". The company had 152,477,688 shares outstanding on June 30,
2010.
This
release can be found at http://www.ultrapetroleum.com.
This news
release includes “forward-looking statements” within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. The opinions, forecasts, projections or other
statements, other than statements of historical fact, are forward-looking
statements. Although the company believes that the expectations reflected in
such forward-looking statements are reasonable, we can give no assurance that
such expectations will prove to have been correct. In this news release we
disclose our undeveloped, future reserves. These reserves are not proved,
probable or possible reserves as those terms are defined by the SEC and
represent other descriptions of our oil and gas deposits that SEC guidelines
permit us to disclose in news releases but prohibit us from including in SEC
filings. Certain risks and uncertainties inherent in the company’s
businesses are set forth in our filings with the SEC, particularly in the
section entitled “Risk Factors” included in our Annual Report on Form 10-K for
our most recent fiscal year and from time to time in other filings made by us
with the SEC. Full details regarding the selected financial information provided
above will be available in the company’s report on Form 10-Q for the quarter
ended June 30, 2010.
|
Ultra
Petroleum Corp.
|
Page
11 of 12
|
|
2nd
Quarter 2010 Results
|
For
further information contact:
Kelly L.
Whitley
Manager
Investor Relations
Phone:
281-876-0120 Extension 302
Email:
info@ultrapetroleum.com
Julie E.
Danvers
Investor
Relations Analyst
Phone:
281-876-0120 Extension 304
Email:
info@ultrapetroleum.com
|
Ultra
Petroleum Corp.
|
Page
12 of 12
|
|
2nd
Quarter 2010 Results
|