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Ultra Petroleum Q3 2010 Review
Ultra Petroleum (NYSE:UPL) turned in its typical prodigious production growth during the third quarter of 2010, as the company continues to harvest its core properties in the Pinedale Field in Wyoming. The company also moved forward on the development of its large acreage position in the Marcellus Shale in Pennsylvania. (To learn more, see Oil And Gas Industry Primer.)
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Third Quarter of 2010 Summary
Ultra Petroleum reported total production of 55.4 billion cubic feet equivalent in the third quarter of 2010, up 21% from last year's third quarter. Ninety-five per cent of the company's production is natural gas, and Ultra Petroleum has not jumped onto the oil and liquids bandwagon like many of its peers in the exploration and production industry.
Pinedale
Ultra Petroleum continues to power its growth from its operations in the Pinedale Field in Wyoming. During the third quarter of 2010, the company drilled 33 net wells and brought 37 net wells onto production here. Ultra Petroleum also increased its efficiency at drilling here during the third quarter of 2010, and reported an average of 14 days to reach total depth on a well, down from an average of 18 days in the third quarter of 2009. Well costs also fell on a year over year basis, from $5 million in the third quarter of 2009 to $4.6 million in the quarter that just ended.
Other exploration and production companies that are developing the Pinedale Field include QEP Resources (NYSE:QEP). The company has put 91 wells onto production during the first nine months of 2010, and reported production of 204 million cubic feet equivalents per day as of the end of the third quarter of 2010. One company looking to get out of the Pinedale Field is Rosetta Resources (Nasdaq:ROSE), which is divesting some of its asset base (including its properties) here.
Marcellus Shale
Ultra Petroleum also moved rapidly during the quarter to develop its vast holdings in the Marcellus Shale. The company has 255,000 net acres, and drilled 12 net wells and brought another 16 net wells onto production during the third quarter of 2010. Ultra Petroleum is currently operating seven rigs in the Marcellus Shale, and plans to spend $440 million in capital here to drill 85 net wells in 2010. Other companies in the Marcellus Shale include Penn Virginia Corporation (NYSE:PVA), which has 55,000 net acres under lease in the northern part of Pennsylvania.
Hedging
Ultra Petroleum is preparing for a weak natural gas market in 2011, and has hedged part of is production for that year. The company has hedged 133.2 billion cubic feet of production at a weighted average price of $5.83 per Mcf. (For related reading on hedging, see Hedging In Layman's Terms.)
The Bottom Line
Ultra Petroleum is one of the fastest-growing independent exploration and production companies, and is powering that growth through its core properties in Wyoming and setting up for future growth through the development of the Marcellus Shale.
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Third Quarter of 2010 Summary
Ultra Petroleum reported total production of 55.4 billion cubic feet equivalent in the third quarter of 2010, up 21% from last year's third quarter. Ninety-five per cent of the company's production is natural gas, and Ultra Petroleum has not jumped onto the oil and liquids bandwagon like many of its peers in the exploration and production industry.
Pinedale
Ultra Petroleum continues to power its growth from its operations in the Pinedale Field in Wyoming. During the third quarter of 2010, the company drilled 33 net wells and brought 37 net wells onto production here. Ultra Petroleum also increased its efficiency at drilling here during the third quarter of 2010, and reported an average of 14 days to reach total depth on a well, down from an average of 18 days in the third quarter of 2009. Well costs also fell on a year over year basis, from $5 million in the third quarter of 2009 to $4.6 million in the quarter that just ended.
Other exploration and production companies that are developing the Pinedale Field include QEP Resources (NYSE:QEP). The company has put 91 wells onto production during the first nine months of 2010, and reported production of 204 million cubic feet equivalents per day as of the end of the third quarter of 2010. One company looking to get out of the Pinedale Field is Rosetta Resources (Nasdaq:ROSE), which is divesting some of its asset base (including its properties) here.
Ultra Petroleum also moved rapidly during the quarter to develop its vast holdings in the Marcellus Shale. The company has 255,000 net acres, and drilled 12 net wells and brought another 16 net wells onto production during the third quarter of 2010. Ultra Petroleum is currently operating seven rigs in the Marcellus Shale, and plans to spend $440 million in capital here to drill 85 net wells in 2010. Other companies in the Marcellus Shale include Penn Virginia Corporation (NYSE:PVA), which has 55,000 net acres under lease in the northern part of Pennsylvania.
Hedging
Ultra Petroleum is preparing for a weak natural gas market in 2011, and has hedged part of is production for that year. The company has hedged 133.2 billion cubic feet of production at a weighted average price of $5.83 per Mcf. (For related reading on hedging, see Hedging In Layman's Terms.)
The Bottom Line
Ultra Petroleum is one of the fastest-growing independent exploration and production companies, and is powering that growth through its core properties in Wyoming and setting up for future growth through the development of the Marcellus Shale.
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Eric Fox
Eric J. Fox, CFA, is a freelance financial writer and has previous experience working in the asset management industry as an equity analyst and portfolio manager on the buy side. His favorite area to write on is the energy sector and he keeps current on the industry by reading Haynesville Shale, Permian Oil and Gas and various other blogs.
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