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Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp.

Ultra Petroleum Corp. · Mar 4, 2013 · 41 slides

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Slides

  1. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 1
    Ultra Petroleum Corp. Michael D. Watford Chairman, President and CEO Raymond James Energy Conference March 4, 2013 Ultra Petroleum Corp. is an independent exploration and production company focused on developing its long-life natural…
  2. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 2
    A Unique Energy Company 2001 2011 2013+ Focused on Profitable Growth On the Horizon Production growth: 1,911% Invest within cash flow 1P Reserve growth: 1,019% Allocate project capital 20% IRR ROE: 36% average No growth for growths…
  3. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 3
    Strong Reserve Base Wyoming Pennsylvania Total Lance Marcellus Reserves 9.6 Tcfe 7.4 Tcfe 17.0 Tcfe 2,900 future net 1,700 future net 4,600 future net wells wells wells 13,600MM 11,300MM 24,900MM future capital future capital…
  4. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 4
    Long-Life, Low-Cost, Lance Tight Gas Pinedale Field 53,440 acres UPL: 40,160 gross (21,375 net) 2,200 wells / 1.5 Bcfd Field OGIP = 58.7 Tcf Recoverable = 38.2 Tcf HBP Status: 100% Jonah Field 21,000 acres UPL: 2,000 gross…
  5. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 5
    Pinedales Profitable Well Economics 140% 120% 4.00 5.00 6.00 Bcfe Bcfe Bcfe 100% Vertical Depth 13,500 13,500 13,500 80% Well Cost (MM): 4.6 4.6 4.6 IRR*: 24% 40% 59% IRR 60% F&D Cost/Mcfe: 1.41 1.13 0.94 40% Payout, months:…
  6. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 6
    Improving Operating Efficiencies 70 Pinedale Field 60 Spud to TD 50 Reduced by 40 67% Spud to TD (Days) 30 20 10 0 2006 2007 2008 2009 2010 2011 2012 90 80 Pinedale Field 70 RR-RR 60 Reduced by 71% Rig Release to…
  7. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 7
    Leads to Further Cost Reductions 8.0 Pinedale Field 7.0 Total Well Costs 6.0 Reduced by 29% 5.0 Total Well Cost 4.0 (MM) 3.0 2.0 1.0 - 2006 2007 2008 2009 2010 2011 2012 Ultra Petroleum Corp. NYSE: UPL 7
  8. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 8
    Extensive Future Wyoming Development
  9. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 9
    Abundant Marcellus Shale Ultra-Interest Lands Potter-Tioga Area 170,000 net acres HBP Status: 70% 202 producing horizontal wells Year-end 2012 Clinton-Lycoming Area 90,000 net acres HBP Status: 80% 120 producing horizontal…
  10. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 10
    Consistent Marcellus Performance Wellsboro Area 50 wells Avg. IP = 7.3 MMcf/d Krause Area Krause 5 wells Wellsboro Avg. IP = 7.7 MMcf/d Marshlands Potter Texas Tioga Creek Sproul Area 5 wells Avg. IP = 5.0 MMcf/d…
  11. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 11
    Strong Marcellus Well Economics 200% 180% 5.0 7.0 9.0 160% Bcfe Bcfe Bcfe 140% Vertical Depth 5,600 8,400 8400' 120% Well Cost: 7.2 MM 6.2 MM 6.2 MM IRR*: 12% 47% 82% 100% IRR F&D Cost/Mcfe: 1.69 1.01 0.79 80% Payout, months:…
  12. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 12
    Decreasing Marcellus Well Costs Marcellus Shale 10.00 Potter-Tioga: 17% Clinton-Lycoming: 19% 8.00 Total 6.00 Well Cost (MM) 4.00 2.00 - 1Q 2012 2Q 2012 3Q 2012 4Q 2012 PotterTioga Area ClintonLycoming Area…
  13. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 13
    Early Stages of Marcellus Development 3,340 future 204 producing 322 producing locations wells YE2011 wells YE2012
  14. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 14
    Geneseo Resource Upside Ultra has dominant exposure to heart of the Geneseo play in north central Pennsylvania 17 wells drilled in Ultra leasehold area Geneseo General thickening from west to east, with higher Tully Hamilton total…
  15. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 15
    Restoring 2012 Reserves YE12 Proved Reserves YE12 Restored Proved Reserves 2.63/Mcf Sensitivity 3.1 Tcfe 5.0 Tcfe Restore YE11 PUD capital 1.83 Tcfe Restore YE11 gas price 92 Bcfe PUD 1.19 Tcfe PUD 1.19 Tcfe PD 1.88 Tcfe…
  16. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 16
    Restoring 2012 Reserve Values YE12 Proved Reserves YE12 Restored Proved Reserves PV-10 Value Sensitivity 2.63/Mcf PV-10 Value 2,263MM 5,250MM Restore YE11 PUD capital 1,029MM Restore YE11 gas price PUD 1,958MM 288MM PUD…
  17. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 17
    Growing Resource Base Year-End 2012 Year-End 2011 6/Mcf 5/Mcf 6/Mcf 5/Mcf Reserves PV-10 PV-10 Reserves PV-10 PV-10 Reserve Category (Bcfe) (MM) (MM) (Bcfe) (MM) (MM) Proved 3,202 6,900 5,520 5,227 9,586 7,369 Probable 8,022…
  18. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 18
    Industrys Low-Cost Producer 12.00 2012e All-In Costs per Mcfe 10.00 8.00 Mean - 6.31 6.00 2012 Costs Per Mcfe All-in Costs LOE 0.25 per Mcfe Production Tax 0.24 4.00 Gathering Fees 0.23 Transportation 0.33 DD&A 1.51 2.00…
  19. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 19
    Strong & Stable Margins Cash Flow Margin Net Income Margin 100% 50% Cashflow Breakeven (/Mcfe) Net Income Breakeven (/Mcfe) 90% 45% 80% 1.20 1.20 1.18 1.15 1.35 2.69 2.54 2.53 2.82 3.07 40% 70% 35% 60% 30% 50% 25% 40% 20% 75%…
  20. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 20
    Disciplined Capital Allocation Historical Capital Investment Programs 1,560MM 835MM 2011 Realized Natural Gas Prices (/Mcf) 415MM 2012 2011: 5.05 2012: 4.01 2013 2013: 3.50-estimate Ultra Petroleum Corp. NYSE: UPL…
  21. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 21
    Prudently Investing Within Cash Flow 350,000 300,000 Cash flow positive 250,000 Q312 200,000 150,000 100,000 50,000 0 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013E Q2 2013E Q3 2013E Q4 2013E Capex (000's) Cash Flow…
  22. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 22
    Enhancing Financial Flexiblity Total Debt Capacity 2.9B Reduced debt by 2,400,000 323MM in Q42012 2,200,000 December 31, 2012 2,000,000 1,800,000 Debt Balance Debt/EBITDA 1,600,000 Short-term 2.2X Net Debt Liquidity…
  23. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 23
    Impressive Performance Record 2006 - 2011 Production Reserve ROCE ROE Growth Growth 22% 16% 23% 37% CAGR CAGR Average Average Absolute Growth Metrics Production: 168% Proved Reserves: 108% Ultra Petroleum Corp.…
  24. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 24
    Decreasing Natural Gas Production Lower 48 Pipeline Data 68 Lower 48 Production peak of 65.7Bcf/d on 11/5/12 66 Current 64.3 Bcf/d 64 62 Bcf/Day 60 58 56 54 52 Source: Genscape Ultra Petroleum Corp. NYSE:…
  25. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 25
    Natural Gas Usage for Electric Generation 40 6.7 Bcf/d summer 2012 average YOY increase in natural gas demand for electric generation 35 30 Bcf/d 25 20 15 10 January February March April May June July August…
  26. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 26
    Gas Price Sensitivities and Induced Coal-to-Gas Switching 6.00 2013 Coal Prices: 5.50 CAPP - 60/ton PRB: 10/ton 5.00 4.50 Goldman Sachs 2013 average NYMEX price forecast: 3.75/MMbtu Natural Gas 4.00 (/MMbtu) 3.50 3.00…
  27. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 27
    West/Rockies Marketing Update Rockies basis narrowing with REX flowing 50% Rockies and Western Structural change and additional pipeline capacity capacity Canadian supply down generation load Average basis 07 09 : 68%HH Lower…
  28. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 28
    Marcellus Gas Entering New Markets Rapid pace of development has caused a pursuit of new markets for Marcellus gas Eastern Canada: export capacity of Marcellus Facilities Expansion 450MMcf/d as of 4Q12 (Niagra) NJ/NY: 800MMcf/d of…
  29. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 29
    Growth Ahead 2013E 2014E 2015E 2016E Operations Realized price (/Mcf) 3.50 4.00 4.25 4.50 Capex (MM) 415 675 890 995 Production (Bcfe) 233 245 285 330 42% Income Statement (MM) EBITDA 600 755 965 1,200 100% Balance Sheet (MM)…
  30. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 30
    Appendix Ultra Petroleum Corp. NYSE: UPL 30
  31. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 31
    Production and Financial Guidance Q1 2013 Guidance Q1 2013 estimated production 57.5 59.5 Bcfe Q1 2013 realized pricing Natural gas: 2 - 4% discount to NYMEX Condensate: 7.00 discount to NYMEX Q1 2013 expense guidance Assumes…
  32. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 32
    Profitable Reinvestment Opportunities Reserve Size - Pinedale Wells 4 Bcfe 5 Bcfe 6 Bcfe 7 Bcfe 3/Mcf 12% 22% 33% 47% Gas Price 4/Mcf 24% 40% 59% 84% 5/Mcf 39% 63% 94% 133% 6/Mcf 57% 92% 139% 199% 7/Mcf 79% 129% 196%…
  33. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 33
    Marcellus Technical Review Updates High-grading acreage to optimize returns Utilizing seismic attributes to delineate resource sweet spots Sweet spot EURs 2.5 times better than non-sweet spot 944 sq-mi of UPL and partner 3D data (70%…
  34. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 34
    Conservative Type Curve Estimates 8.0 Clinton-Lycoming Area 7.0 Potter-Tioga Area 6.0 Gross Production 5.0 (MMcfe/D) 4.0 7 Bcfe 5 Bcfe 3.0 2.0 1.0 0.0 1 91 181 271 361 451 541 631 721 Days Ultra…
  35. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 35
    Marcellus Well Economics Reserve Size - Marcellus Wells 4 Bcfe 5 Bcfe 6 Bcfe 7 Bcfe 8 Bcfe 9 Bcfe 5.5MM 12% 24% 44% 62% 82% 107% 6.0MM 9% 19% 36% 51% 68% 88% Well Cost 6.5MM 7% 16% 30% 43% 57% 74% 7.0MM 5% 13% 25% 36% 48%…
  36. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 36
    Production Lags Capital Spend Capital Budget vs. Production 450 80 400 70 Cap-Ex (MM) 350 Production (Bcfe) 60 300 50 250 Capex Production 40 (MM) (Bcfe) 200 30 150 20 100 50 10 0 0 Ultra Petroleum Corp.…
  37. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 37
    Expanding Rockies Capacity 12.0 10.0 Excess takeaway capacity 4.3 Bcf/d 8.0 Average 6.0 Daily Volume (Bcf/D) 4.0 2.0 0.0 Source: Bentek Energy Actual Forecast Pipeline Capacity Ultra Petroleum Corp. NYSE:…
  38. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 38
    New Ventures Strategy Objectives: Identify best geologic provinces and plays in North America Develop detailed in-house familiarity with attractive plays Identify entry points to plays of interest Focus on strategic /…
  39. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 39
    Benefits of Using Natural Gas Domestic: Greater use of this clean, abundant, madein- America energy source will create U.S.jobs and boost local economies, while advancing our national security Abundant: 2,543 Tcf of natural gas…
  40. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 40
    Innovative Employees We value the multi-faceted skills and performance our talented employees have to offer We have a unique, entrepreneurial, value-driven business culture We operate in a highly decentralized work environment…
  41. Raymond James 34th Annual Institutional Investors Conference – Ultra Petroleum Corp. – slide 41
    Safety and Environmental We are committed to safe operations, and maintain high standards of ethical conduct by employees, contractors and service providers We pursue our work with integrity and respect for the environment where we…

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