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Ultra Petroleum Corp Reports Operating Results (10-Q)

November 04, 2010 | About:
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10qk

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Ultra Petroleum Corp (UPL) filed Quarterly Report for the period ended 2010-09-30.

Ultra Petroleum Corp has a market cap of $6.6 billion; its shares were traded at around $43.1 with a P/E ratio of 19.9 and P/S ratio of 9.8. UPL is in the portfolios of Private Capital of Private Capital Management, Columbia Wanger of Columbia Wanger Asset Management, Ron Baron of Baron Funds, Richard Aster Jr of Meridian Fund, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates, Mario Gabelli of GAMCO Investors, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

During the quarter ended September 30, 2010, production increased 21% on a gas equivalent basis to 55.4 Bcfe from 45.9 Bcfe for the same quarter in 2009 attributable to the Companys successful drilling activities during 2009 and in the first nine months of 2010. Realized natural gas prices, including realized gains and losses on commodity derivatives, decreased 6% to $4.84 per Mcf in the third quarter of 2010 as compared to $5.13 per Mcf for the same quarter of 2009. During the three months ended September 30, 2010, the Companys average price for natural gas was $4.08 per Mcf, excluding realized gains and losses on commodity derivatives as compared to $3.09 per Mcf for the same period in 2009. The increase in production and the increase in average natural gas prices, excluding commodity derivatives, contributed to a 55% increase in revenues to $240.4 million as compared to $155.2 million in 2009.

During the three months ended September 30, 2010, production taxes were $23.2 million compared to $15.2 million during the same period in 2009, or $0.42 per Mcfe compared to $0.33 per Mcfe. The increase in per unit taxes is attributable to increased sales revenues as a result of increased natural gas prices, excluding the effects of commodity derivatives, during the quarter ended September 30, 2010 as compared to the same period in 2009. During the three months ended September 30, 2010, the Companys average price for natural gas was $4.08 per Mcf, excluding realized gains and losses on commodity derivatives, as compared to $3.09 per Mcf for the same period in 2009. Production taxes are calculated based on a percentage of revenue from production and were 9.6% of revenues for the quarter ended September 30, 2010 and 9.8% of revenues for the same period in 2009.

DD&A expenses increased to $59.7 million during the three months ended September 30, 2010 from $46.4 million for the same period in 2009, attributable primarily to increased production volumes. On a unit of production basis, DD&A increased to $1.08 per Mcfe for the quarter ended September 30, 2010 from $1.01 per Mcfe for the quarter ended September 30, 2009.

During the nine months ended September 30, 2010, production increased 18% on a gas equivalent basis to 156.4 Bcfe from 132.5 Bcfe for the same period in 2009 attributable to the Companys successful drilling activities during 2009 and in the first nine months of 2010. Realized natural gas prices, including realized gains and losses on commodity derivatives, increased 2% to $5.00 per Mcf in the nine months ended 2010 as compared to $4.89 per Mcf for the same period in 2009. During the nine months ended September 30, 2010, the Companys average price for natural gas was $4.49 per Mcf, excluding realized gains and losses on commodity derivatives as compared to $3.24 per Mcf for the same period in 2009. The increase in average natural gas prices along with the increase in production contributed to a 64% increase in revenues to $741.9 million as compared to $453.5 million in 2009.

DD&A expenses increased to $167.8 million during the nine months ended September 30, 2010 from $152.0 million for the same period in 2009, attributable to increased production volumes and 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 $1.07 per Mcfe for the nine months ended September 30, 2010 from $1.15 per Mcfe for the nine months ended September 30, 2009. The Company recorded a $1.0 billion non-cash write-down of the carrying value of the Companys 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 a lower DD&A rate in future periods.

At September 30, 2010, the Company reported a cash position of $7.2 million compared to $13.0 million at September 30, 2009. Working capital deficit at September 30, 2010 was $105.5 million compared to deficit of $118.4 million at September 30, 2009. At September 30, 2010, we had $291.0 million in outstanding borrowings and $209.0 million of available borrowing capacity under the credit facility. In addition, the Company had $1.0 billion outstanding under its Senior Notes (See Note 4). Other long-term obligations of $64.0 million at September 30, 2010 is comprised of items payable in more than one year, primarily related to production taxes and asset retirement obligations.

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