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Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp.

Ultra Petroleum Corp. · Dec 7, 2011 · 36 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 1
    Ultra Petroleum Corp. Michael D. Watford Chairman, President and CEO CapitalOne Southcoast Energy Conference December 7, 2011 Ultra Petroleum Corp. is an independent exploration and production company focused on developing its long-life…
  2. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 2
    A Unique Energy Company Exploration & Production company uniquely focused on profitable growth 39% return on equity for 2010 19% production growth for 2010 Growing scale of our assets Early development of Wyoming legacy asset…
  3. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 3
    The Ultra Petroleum Story High asset quality Robust investment portfolio Profitable growth strategy Ultra Petroleum Corp. NYSE: UPL 3
  4. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 4
    Long-Life, Low-Cost, Lance Tight Gas Ultra-Interest Wells Pinedale Field 90 sq. miles 1,700+ wells 1.5 Bcfd Field OGIP = 58.7 Tcf Recoverable = 38.2 Tcf Jonah Field 36 sq. miles 1,500+ wells 0.9 Bcfd Field OGIP = 15.0…
  5. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 5
    Pinedales Profitable Well Economics 160% 140% 4.00 4.50 6.00 Bcfe Bcfe Bcfe 120% Vertical Depth 13,500 13,500 13,500 Well Cost (MM): 4.8 4.8 4.8 100% IRR*: 29% 37% 69% 80% F&D Cost/Mcfe: 1.49 1.32 0.99 IRR Payout, months:…
  6. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 6
    Emerging Marcellus Shale Gas Ultra-Interest Lands Potter-Tioga Area 164,000 net acres 75 producing horizontal wells Year-end 2010 Clinton-Lycoming Area 96,000 net acres 17 producing horizontal wells Year-end 2010…
  7. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 7
    Strong Marcellus Well Economics 160% 4.25 6.30 140% Bcfe Bcfe 120% Vertical Depth 5,600 7,500 100% Well Cost: 4.8 MM 7.5 MM Reserves/well: 4.25 Bcfe 6.30 Bcfe 80% IRR IRR*: 45% 43% 60% F&D Cost/Mcfe: 1.33 1.36 40% Payout,…
  8. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 8
    Conservative Type Curve Estimates 10.0 9.0 Clinton-Lycoming Area 8.0 Potter-Tioga Area 7.0 6.0 Gross Production 7 Bcfe (MMcfe/D) 5.0 4.0 5 Bcfe 3.0 2.0 3 Bcfe 1.0 0.0 1 31 61 91 121 151 181 211 241 271 301…
  9. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 9
    Net Risked Resource Potential Wyoming Pennsylvania Total Lance Marcellus Resource 10.7 Tcfe 9.5 Tcfe 20.2 Tcfe 2,900 net wells 2,500 net wells 5,400 net wells 13,500MM 15,400MM 28,900MM future capital future capital future capital…
  10. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 10
    Improving Operating Efficiencies 40 100% Pinedale Field 35 80% 30 25 Spud to TD 60% Spud to TD % Wells Drilled (Days) 20 Reduced by 66% < 15 Days 15 40% 10 Spud to TD 20% 5 % Wells Drilled < 15 days 0 0% 2007 2008 2009…
  11. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 11
    Leads to Further Cost Reductions 7.0 Completed Well Costs 6.0 Reduced by 23% 5.0 4.0 Completed Well Cost (MM) 3.0 2.0 1.0 0.0 2007 2008 2009 2010 YTD 2011 Ultra Petroleum Corp. NYSE: UPL 11
  12. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 12
    Industrys Low-Cost Operator 9.00 8.00 Ultra - 2.68 2010 All-In Costs 7.00 vs. Mean - 5.62 6.00 5.00 All-in Costs (Mcfe) 4.00 3.00 2.00 1.00 0.00 Source: Wells Fargo 5.00 4.50 2010 All-In F&D Costs 4.00 Ultra - 1.48 3.50…
  13. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 13
    Focused on Creating Long-Term Value UPL CROCI - 28% Production per share CAGR - 25% 18% High Returns Low Growth SWN BRY BBG 17% (53%. 20%) 16% High Returns NBL High Growth APA EOG 15% Median 13.5% TLM NFX CXO 2006 -…
  14. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 14
    The Ultra Petroleum Story High asset quality Robust investment portfolio Profitable growth strategy Ultra Petroleum Corp. NYSE: UPL 14
  15. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 15
    2010 Proved Reserves SEC Proved Reserves Proved Reserve Life 25 4.4 Tcfe* Ultra - 17.6 years vs. Mean 14.4 years 20 15 1.62 PDP Years PDNP 10 2.65 PUD 5 0.13 0 5.0B PV-10 value 4.05/Mcf Source: ISI * 3-year PUD…
  16. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 16
    2010 Real Reserve Value Net 6/Mcf 5/Mcf Reserves PV-10 PV-10 Reserve Category (Bcfe) MM MM Proved* 8,868 11,604 8,669 Probable 2,248 1,651 1,066 2P: (Proved + Probable) 11,116 13,255 9,735 Possible 4,795 3,860 2,552 3P: (Proved +…
  17. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 17
    The Ultra Petroleum Story High asset quality Robust investment portfolio Profitable growth strategy Ultra Petroleum Corp. NYSE: UPL 17
  18. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 18
    Impressive Performance Record Net Income Cashflow ROCE ROE Breakeven Breakeven (last 5 years) (last 5 years) (last 5 years) (last 5 years) 2.40 1.06 25% 38% per Mcf per Mcf Average Average Average Average THIRD QUARTER…
  19. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 19
    Strong & Stable Margins Cash Flow Margin Net Income Margin 100% 50% 90% 45% 80% 40% 70% 35% 60% 30% 50% 25% 40% 20% 42% 72% 75% 73% 37% 70% 70% 30% 15% 31% 31% 31% 20% 10% 10% 5% 0% 0% 2007 2008 2009 2010 YTD 2011 2007 2008…
  20. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 20
    Consistent Absolute Growth Proved Reserve Growth Production Growth 5,000 250 4,500 17% CAGR 24% CAGR 4,000 200 3,500 3,000 150 Bcfe 2,500 Bcfe 2,000 100 1,500 1,000 50 500 0 0 2006 2007 2008 2009 2010 2006 2007 2008…
  21. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 21
    And Leaders in Per-Share Growth Proved Reserves per Share Production per Debt-Adjusted Growth Share Growth 20% 25% 18% 18% 21% 16% 20% 14% UPL 2x the UPL 3x the mean mean 12% 15% 10% 2006 2010 10% 2005- 2010 Growth CAGR 8%…
  22. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 22
    Outlook for 2011 2011 Capital Investment Program 1.35B 3% 3% 4% Target drilling program 242 gross (135 net) Wyoming wells 50% 169 gross (77 net) Pennsylvania wells 40% Production goal 245 255 Bcfe 15 19% growth Target reserve…
  23. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 23
    Where are We Going 2010A 2011E 2012E 2013E Operations Realized price (/Mcf) 4.88 5.07 4.55 5.00 Capex (MM) 1,576 1,350 1,200 1,200 Production (Bcfe) 214 245 290 330 Income Statement (MM) EBITDA 818 1,032 1,062 1,345 Balance Sheet…
  24. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 24
    The Ultra Petroleum Story High Highly concentrated asset Domestic, onshore natural gas asset quality Lowest all-in unit costs Robust 5,400 future net drilling locations 20+ years inventory at 2010 cap-ex investment portfolio High…
  25. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 25
    Appendix Ultra Petroleum Corp. NYSE: UPL 25
  26. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 26
    New Ventures Activity 110,000 net acres in the DJ Basin Targeting liquids-prone Niobrara Formation Resource exposure 200,000 400,000 Bbls of oil per well 150,000 MBbls oil net resource upside Current plans Drill & complete 4…
  27. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 27
    Consistent Marcellus Performance Parthemer Pad 6 wells Soderburg Pad 6 wells 5.4 MMcfe/d Avg. Pazzaglia Pad 5 wells 5.5 MMcfe/d Avg. 8.6 MMcfe/d Avg. Pierson 810-3H: 10.0 MMcfe/d PAD PAD Kenton 902-3H: 11.7 MMcfe/d PAD PAD…
  28. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 28
    Marcellus Technical Reviews: What We are Learning High-grading acreage to optimize returns Utilizing seismic attributes to delineate resource sweet spots Expanding 3D coverage from 315 sq-mi to 455 sq-mi Studying correct well…
  29. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 29
    Northern Pennsylvania Pipeline Capacity Additions Projects* Capacity Total Date Pre-expansion 1.6 Bcf/d Q3 2011 Tennessee 300** 0.55 Bcf/d Stage Coach 0.35 Bcf/d Laser 0.40 Bcf/d Springville 0.25 Bcf/d Empire Extension 0.35 Bcf/d…
  30. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 30
    Financial Strength Total Debt Capacity* 3,035MM Maturity Profile* 1,000 900 September 30, 2011 800 700 600 millions 500 400 Debt/EBITDA 300 Short-term 1.9X Net Debt 200 Liquidity 1,826MM 100 222MM EBITDA/Interest 16.6X…
  31. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 31
    Providing Certainty to Cash Flow: Hedging Summary Total Volume Average Price Time Period (Bcf) (/MMbtu) Q4 2011 40.7 5.31 Q1 2012 27.3 5.03 Q2 2012 35.5 5.02 Q3 2012 35.9 5.02 Q4 2012 30.4 5.03 Total 2012 129.1 5.02 Refer…
  32. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 32
    Profitable Reinvestment Opportunities Reserve Size - Pinedale Wells 4 Bcfe 5 Bcfe 6 Bcfe 7 Bcfe 8 Bcfe 4/Mcf 16.5% 27.9% 41.7% 58.2% 77.7% Gas Price 5/Mcf 29.0% 46.9% 69.2% 96.6% 129.8% 6/Mcf 44.4% 71.0% 104.9% 147.6%…
  33. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 33
    Quarterly Guidance Q4 2011 Guidance Full-year estimated production 245 255 Bcfe Q4 2011 realized pricing Natural gas: 4 6% discount to NYMEX Condensate: 10.00 discount to NYMEX Q4 2011 expense guidance Assumes 3.69 per Mmbtu and…
  34. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 34
    Narrowing Basis Differentials Basis Differential as a Percentage (%) of Henry Hub YTD Balance 2007 2008 2009 2010 2011 2011 2012 2013 NW Rockies 58 69 77 90 93 100 96 96 Dominion South 105 105 107 104 104 105 102 100 Source:…
  35. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 35
    Expanding Rockies Capacity 12.0 10.0 Excess takeaway capacity 4 Bcf/d 8.0 Average Daily Volume 6.0 (Bcf/D) 4.0 2.0 0.0 Source: Bentek Energy Actual Forecast Pipeline Capacity Ultra Petroleum Corp. NYSE: UPL…
  36. Capital One Southcoast 6th Annual Energy Conference – Ultra Petroleum Corp. – slide 36
    Changing Natural Gas Sales Mix 100% 80% 60% Total % Henry Hub Revenues Pricing (MM) 40% 20% 0% 2008 2009 2010 2011 (E) 2012 (E) 2013 (E) Rockies Northeast % Henry Hub Pricing Ultra Petroleum Corp. NYSE: UPL 36

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