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IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp.

Ultra Petroleum Corp. · Jun 11, 2013 · 42 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. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 1
    Ultra Petroleum Corp. Michael D. Watford Chairman, President and CEO IPAA OGIS Toronto June 11, 2013 Ultra Petroleum Corp. is an independent exploration and production company focused on developing its long-life natural gas reserves in…
  2. IPAA June 2013 OGIS Toronto – 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. IPAA June 2013 OGIS Toronto – 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. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 4
    Long-Life, Low-Cost, Lance Tight Gas Pinedale Field 81,800 gross (47,600 net) 2,200 wells / 1.5 Bcfd Field OGIP = 58.7 Tcf Recoverable = 38.2 Tcf HBP Status: 100% Jonah Field 2,200 gross (1,400 net) 1,760 wells / 0.7 Bcfd…
  5. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 5
    Pinedales Profitable Well Economics 160% 140% 4.00 5.00 6.00 120% Bcfe Bcfe Bcfe 100% Vertical Depth 13,500 13,500 13,500 Well Cost (MM): 4.4 4.4 4.4 80% IRR IRR*: 26% 44% 65% 60% F&D Cost/Mcfe: 1.35 1.08 0.90 Payout, months:…
  6. IPAA June 2013 OGIS Toronto – 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 Q12013 80 70 Pinedale Field RR-RR 60 Reduced by 71% Rig Release to…
  7. IPAA June 2013 OGIS Toronto – 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 Q12013 Ultra Petroleum Corp. NYSE: UPL 7
  8. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 8
    Extensive Future Wyoming Development
  9. IPAA June 2013 OGIS Toronto – 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: 85% 120 producing horizontal…
  10. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 10
    Consistent Marcellus Performance Wellsboro Area 85 wells Avg. IP = 7.2 MMcf/d Krause Area Krause 58 wells Wellsboro Avg. IP = 7.0 MMcf/d Marshlands Potter Texas Tioga Creek Sproul Area 17 wells Avg. IP = 4.8 MMcf/d…
  11. IPAA June 2013 OGIS Toronto – 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. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 12
    Early Stages of Marcellus Development 3,340 future 204 producing 322 producing locations wells YE2011 wells YE2012
  13. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 13
    Geneseo Resource Upside Geneseo Tully Hamilton Geneseo Area Ultra has dominant position 900 Geneseo Horizontal Activity UPL Participation Wells 3rd Party Wells Net Risked Resource Potential = 3.3 Tcfe Upper Play area…
  14. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 14
    Restoring 2012 Reserves YE12 Proved Reserves YE12 Restored Proved Reserves Sensitivity 2.63/Mcf 4.04/Mcf 3.1 Tcfe 5.0 Tcfe Restore YE11 PUD capital & gas price 1.89 Tcfe PUD PUD 1.19 Tcfe 1.19 Tcfe PD PD 1.88 Tcfe…
  15. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 15
    Restoring 2012 Reserve Values YE12 Proved Reserves PV-10 YE12 Restored Proved Reserves PV-10 Sensitivity 2.63/Mcf 4.04/Mcf 2,263MM 5,250MM Restore YE11 PUD capital & gas price 2,986MM PUD PUD 288MM 288MM PD PD 1,976MM…
  16. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 16
    Growing Resource Base 3P Reserves Year-End 2012 20 17.1 Tcfe 18 6/Mcf 5/Mcf 16.0 Tcfe Reserves PV-10 PV-10 16 Reserve Category (Bcfe) (MM) (MM) 14 4.68 5.84 Proved 3,202 6,900 5,520 12 10 Probable 8,022 6,763 4,373 8 2P 2P: (PV…
  17. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 17
    Economic Fundamentals 2012 Reserve Cash flow F&D Full Cycle Replacement Per Mcfe Cost Returns Ratio 2.78 0.83 Per Per 335% 332% Mcfe Mcfe Ultra Petroleum Corp. NYSE: UPL 17
  18. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 18
    Industrys Low-Cost Producer 14.00 2012 All-In Costs per Mcfe 12.00 10.00 Mean - 7.31/Mcfe 8.00 All-in Costs per Mcfe Q12013 Costs Per Mcfe 6.00 LOE 0.40 Production Tax 0.28 Gathering Fees 0.20 4.00 Transportation 0.34 DD&A…
  19. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 19
    Strong & Stable Margins Cash Flow Margin Net Income Margin 100% 50% Cash Flow Breakeven (/Mcfe) Net Income Breakeven (/Mcfe) 90% 45% 1.20 1.20 1.18 1.15 1.35 80% 40% 2.69 2.54 2.53 2.82 3.07 70% 35% 60% 30% 50% 25% 40% 20% 75%…
  20. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 20
    Disciplined Capital Allocation Historical Capital Investment Programs 1,560MM 835MM 2011 Realized Natural Gas 415MM Prices (/Mcf) 2012 2011: 5.05 2012: 4.01 2013 2013: 3.50-estimate Ultra Petroleum Corp. NYSE: UPL 20
  21. IPAA June 2013 OGIS Toronto – 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 2013 Q2 2013E Q3 2013E Q4 2013E Capex (000's) Cash Flow (000's)…
  22. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 22
    Enhancing Financial Flexibility Total Debt Capacity 2.7B 2,400,000 2,200,000 March 31, 2013 2,000,000 1,800,000 Debt Balance 1,600,000 Debt/EBITDA Short-term 2.5X Net Debt 1,400,000 Liquidity 1,919MM 627MM…
  23. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 23
    Decreasing Natural Gas Production Lower 48 Pipeline Data 68 Lower 48 production peak of 66 65.7 Bcf/d on 11/5/12 Current - 64.7 Bcf/d 64 62 Bcf/Day 60 58 56 54 52 Source: Genscape Ultra Petroleum Corp. NYSE: UPL…
  24. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 24
    Gas Price Sensitivities and Induced Coal-to-Gas Switching 6.00 2013 Coal Prices: 5.50 CAPP: 60/ton PRB: 10/ton Goldman Sachs new 5.00 2013 (balance) price forecast of 4.40/MMbtu 4.50 Old forecast: NYMEX 3.75/MMbtu = 2.4 Bcf/d…
  25. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 25
    West/Rockies Marketing Update Rockies basis narrowing REX flowing 50% Rockies and Western Structural change with additional pipeline capacity Canadian supply down and generation load capacity Lower differentials year over year San…
  26. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 26
    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 (Niagara) Nexus Gas…
  27. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 27
    Outlook for 2013 2013 Capital Investment Program 415MM Target drilling program 114 gross (51 net) Wyoming wells 35 10 5 28 gross (14 net) Pennsylvania wells Production goal 228 238 Bcfe 105 135 gross (60 net) Wyoming wells…
  28. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 28
    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)…
  29. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 29
    The Ultra Petroleum Story High Highly concentrated asset Domestic, onshore natural gas asset quality Low all-in and F&D costs Robust 4,600 future net drilling locations 24.9B future development capital investment portfolio 20+…
  30. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 30
    Appendix Ultra Petroleum Corp. NYSE: UPL 30
  31. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 31
    Production and Financial Guidance Q2 2013 Guidance Q2 2013 estimated production 57.0 59.0 Bcfe Q2 2013 realized pricing Natural gas: 2 - 4% discount to NYMEX Condensate: 7.00 discount to NYMEX Q2 2013 expense guidance Assumes…
  32. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 32
    Providing Certainty to Cash Flow Hedging Summary NYMEX Q2 2013 Q3 2013 Q4 2013 Total 2013 Volume (Bcf) 33.4 35.9 12.1 81.4 /Mmbtu 3.51 3.54 3.54 3.53 /Mcf 3.72 3.75 3.75 3.74 Note: Amounts may not total due to rounding Ultra…
  33. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 33
    Profitable Reinvestment Opportunities Reserve Size - Pinedale Wells 4 Bcfe 5 Bcfe 6 Bcfe 7 Bcfe 3/Mcf 13% 24% 37% 52% Gas Price 4/Mcf 26% 44% 65% 92% 5/Mcf 43% 69% 104% 147% 6/Mcf 63% 102% 154% 221% 7/Mcf 87% 142% 218%…
  34. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 34
    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%…
  35. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 35
    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…
  36. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 36
    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%…
  37. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 37
    Production Lags Capital Spend Capital Budget vs. Production 450 90 400 80 Cap-Ex (MM) 350 70 Production (Bcfe) 300 60 250 50 Capex Production (MM) (Bcfe) 200 40 150 30 100 20 50 10 0 0 Ultra Petroleum Corp.…
  38. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 38
    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:…
  39. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 39
    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 /…
  40. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 40
    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…
  41. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 41
    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…
  42. IPAA June 2013 OGIS Toronto – Ultra Petroleum Corp. – slide 42
    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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