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Ultra Petroleum Corp Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 1, 2012 12:02PM

Ultra Petroleum Corp (UPL) filed Quarterly Report for the period ended 2012-09-30. Ultra Petroleum Corporation has a market cap of $3.5 billion; its shares were traded at around $23.94 with a P/E ratio of 11.6 and P/S ratio of 3.2.



Highlight of Business Operations:

During the quarter ended September 30, 2012, production remained relatively flat on a gas equivalent basis at 63.1 Bcfe compared to 63.4 Bcfe for the same quarter in 2011 as a result of decreased capital spending in response to decreased natural gas prices during the quarter. Realized natural gas prices, including realized gains and losses on commodity derivatives, decreased 20% to $4.13 per Mcf in the third quarter of 2012 as compared to $5.17 per Mcf for the same quarter of 2011. During the three months ended September 30, 2012, the Company’s average price for natural gas was $2.77 per Mcf, excluding realized gains and losses on commodity derivatives as compared to $4.29 per Mcf for the same period in 2011. The decrease in average natural gas prices resulted in a 33% decrease in revenues to $196.4 million in the quarter ended September 30, 2012 as compared to $293.1 million in for the same period in 2011.

During the three months ended September 30, 2012, production taxes were $15.0 million compared to $25.7 million during the same period in 2011, or $0.24 per Mcfe compared to $0.40 per Mcfe. Production taxes are primarily calculated based on a percentage of revenue from production in Wyoming after certain deductions and were 7.7% of revenues for the quarter ended September 30, 2012 and 8.8% of revenues for the same period in 2011. In addition, the quarter ended September 30, 2012 includes charges related to Pennsylvania impact fees totaling $1.5 million while the period ended September 30, 2011 did not include any charges related to impact fees in Pennsylvania. The decrease in per unit taxes is primarily attributable to decreased sales revenues as a result of decreased natural gas prices, excluding the effects of commodity derivatives, during the quarter ended September 30, 2012 as compared to the same period in 2011, as well as increased production in Pennsylvania in areas where the Company does not incur third party transportation charges.

The Company recorded a $606.8 million non-cash write-down of the carrying value of its proved oil and natural gas properties for the quarter ended September 30, 2012 as a result of ceiling test limitations, which is reflected with ceiling test and other impairments in the accompanying Consolidated Statements of Operations. The ceiling test was calculated based upon the average of quoted market prices in effect on the first day of the month for the preceding twelve month period at September 30, 2012 of $2.83 per MMBtu for Henry Hub natural gas and $94.97 per barrel for West Texas Intermediate oil, adjusted for market differentials. The write-down reduced earnings in the third quarter of 2012 and will result in a lower DD&A rate in future periods. The Company did not have any write-downs related to the full cost ceiling limitation during the quarter ended September 30, 2011. See Note 1(d).

During the nine months ended September 30, 2012, production increased 10% on a gas equivalent basis to 196.9 Bcfe from 178.4 Bcfe for the same period in 2011. This increase in production was attributable to the Company’s successful drilling activities during 2011 and in the first nine months of 2012. Realized natural gas prices, including realized gains and losses on commodity derivatives, decreased 23% to $3.99 per Mcf in the nine months ended September 30, 2012 as compared to $5.15 per Mcf for the same period in 2011. During the nine months ended September 30, 2012, the Company’s average price for natural gas was $2.63 per Mcf, excluding realized gains and losses on commodity derivatives as compared to $4.32 per Mcf for the same period in 2011. The decrease in average natural gas prices, offset in part by the increase in production, resulted in a 29% decrease in revenues to $592.8 million as compared to $831.0 million in 2011.

During the nine months ended September 30, 2012, production taxes were $46.6 million compared to $73.8 million during the same period in 2011, or $0.24 per Mcfe compared to $0.41 per Mcfe. Production taxes are primarily calculated based on a percentage of revenue from production in Wyoming after certain deductions and were 7.9% of revenues for the nine months ended September 30, 2012 and 8.9% of revenues for the same period in 2011. In addition, the period ended September 30, 2012 includes charges related to Pennsylvania impact fees totaling $4.1 million while the period ended September 30, 2011 did not include any charges related to impact fees in Pennsylvania. The decrease in per unit taxes is primarily attributable to decreased sales revenues as a result of decreased natural gas prices, excluding the effects of commodity derivatives, during the nine months ended September 30, 2012 as compared to the same period in 2011 as well as increased production in Pennsylvania in areas where the Company does not incur third party transportation charges.

Read the The complete Report



Stocks Discussed: UPL,
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