Ultra Petroleum Corp (UPL) filed Quarterly Report for the period ended 2009-09-30.
Ultra Petroleum is an independent exploration and production company focused on developing its long life natural gas reserves in the Green River Basin of Wyoming and oil reserves in Bohai Bay offshore China. Ultra Petroleum Corp has a market cap of $8.02 billion; its shares were traded at around $52.94 with a P/E ratio of 26.6 and P/S ratio of 7.4. Ultra Petroleum Corp had an annual average earning growth of 48.6% over the past 5 years.
Highlight of Business Operations:
During the quarter ended September 30, 2009, production increased 27% on a gas equivalent basis to 45.9 Bcfe from 36.3 Bcfe for the same quarter in 2008 attributable to the Company’s successful drilling activities during 2008 and in the first nine months of 2009. Realized natural gas prices, including realized gains and losses on commodity derivatives, decreased 38% to $5.13 per Mcf in the third quarter of 2009 as compared to $8.21 per Mcf for the same quarter of 2008. During the three months ended September 30, 2009, the Company’s average price for natural gas was $3.09 per Mcf, excluding realized gains and losses on commodity derivatives as compared to $7.71 per Mcf for the same period in 2008. The decrease in average natural gas prices partially offset by the increase in production contributed to a 48% decrease in revenues to $155.2 million as compared to $297.6 million in 2008.
To secure pipeline infrastructure providing sufficient capacity to transport a portion of the Company’s natural gas production away from southwest Wyoming and to provide for reasonable basis differentials for its natural gas, the Company incurred firm transportation charges totaling $16.3 million for the quarter ended September 30, 2009 as compared to $11.4 million for the same period in 2008 in association with REX Pipeline transportation charges. On a per unit basis, transportation charges increased to $0.35 per Mcfe (on total company volumes) for the three months ended September 30, 2009 as compared to $0.32 per Mcfe (on total company volumes) for the same period in 2008 due to increased transportation rates as a result of further Eastern expansion of REX.
Depletion, depreciation and amortization (“DD&A”) expenses increased to $46.4 million during the three months ended September 30, 2009 from $45.7 million for the same period in 2008, attributable to increased production volumes partially offset by a lower depletion rate due mainly to a lower depletable base as a result of the ceiling test write-down during the first quarter of 2009. On a unit of production basis, DD&A decreased to $1.01 per Mcfe for the quarter ended September 30, 2009 from $1.26 for the quarter ended September 30, 2008. The Company recorded a $1.0 billion non-cash write-down of the carrying value of the Company’s proved oil and gas properties at March 31, 2009 as a result of ceiling test limitations. The write-down reduced earnings in the first quarter of 2009 and results in lower DD&A expense in future periods.
September 30, 2009, the Company’s average price for natural gas was $3.24 per Mcf, excluding realized gains and losses on commodity derivatives as compared to $7.95 per Mcf for the same period in 2008. The decrease in average natural gas prices partially offset by the increase in production contributed to a 48% decrease in revenues for the nine months ended September 30, 2009 to $453.5 million as compared to $877.0 million in 2008.
DD&A increased to $152.0 million during the period ended September 30, 2009 from $130.7 million for the same period in 2008, attributable to increased production volumes, partially offset by a lower depletion rate due mainly to a lower depletable base as a result of the ceiling test write-down during the first quarter of 2009. On a unit of production basis, DD&A decreased to $1.15 per Mcfe at September 30, 2009 from $1.25 at September 30, 2008. The Company recorded a $1.0 billion non-cash write-down of the carrying value of the Company’s proved oil and gas properties at March 31, 2009 as a result of ceiling test limitations. The write-down reduced earnings in the first quarter of 2009 and results in lower DD&A expense in future periods.
During the nine month period ended September 30, 2009, the Company relied on cash provided by operations along with borrowings under the senior credit facility and the issuance of the 2009 Senior Notes to finance its capital expenditures. The Company participated in the drilling of 247 wells in Wyoming and Pennsylvania. For the nine month period ended September 30, 2009, net capital expenditures were $537.0 million. At September 30, 2009, the Company reported a cash position of $13.0 million compared to $31.0 million at September 30, 2008. Working capital deficit at September 30, 2009 was $118.4 million compared to a deficit of $126.7 million at September 30, 2008. At September 30, 2009, we had $195.0 million in outstanding borrowings and $305.0 million of available borrowing capacity under our credit facility. In addition, the Company had $300.0 million and $235.0 million outstanding under its 2008 Senior Notes and 2009 Senior Notes, respectively (See Note 3). Other long-term obligations of $38.3 million at September 30, 2009 is comprised of items payable in more than one year, primarily related to production taxes, the long-term portion of our incentive compensation plans and our asset retirement obligation.
UPL is in the portfolios of Private Capital of Private Capital Management, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, Ron Baron of Baron Funds.
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