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CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp.

Ultra Petroleum Corp. · May 14, 2014 · 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. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 1
    Ultra Petroleum Corp. Michael D. Watford Chairman, President and CEO Citi Global Energy & Utilities Conference May 14, 2014 Ultra Petroleum Corp. is an independent energy company engaged in domestic natural gas and crude oil…
  2. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 2
    The Ultra Petroleum Story: History 2001 - 2011 2012 2013 Focused on Profitable Growth Disciplined Capital Allocation Rebalancing for the Future Production growth: 1,911% Reduce capital investments Allocate project capital 20% 1P…
  3. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 3
    The Ultra Petroleum Story: Future 2014 Back to the Profitable Growth Plan 40% EBITDA growth Tripling oil production Invest within cash flow Grow reserves and production Expand margins Increase capital efficiency Ultra…
  4. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 4
    2013 Accomplishments Grew PV-10 value 83% to 4.1bn and proved reserves 18% to 3.6 Tcfe Reserve replacement ratio 307% and F&D costs of 0.53/Mcfe Executed 376MM capital investment program (excluding Uinta acquisition) generating…
  5. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 5
    2013 Proved Reserves Sensitivities Net PUD PV-10 Rem. Capital MM Bcfe MM YE13 Proved Reserves 3.51/Mcf 4,132 3,614 1,758 Sensitivity 1: YE13 Proved 4.50/Mcf 5,700 3,716 1,781 Sensitivity 2: YE13 Proved 4.50/Mcf & Increased Capital…
  6. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 6
    Strong Reserve Base Wyoming Pennsylvania Utah Total Lance Marcellus Uinta Reserves 9.6 Tcfe 9.1 Tcfe 91 MMBO 19.3Tcfe 2,600 future 2,000 future 550 future 5,150 future net wells net wells net wells net wells 10,500MM 14,900MM 800MM…
  7. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 7
    Long-Life, Low-Cost, Lance Tight Gas Pinedale Field 81,800 gross (47,600 net) 2,200 wells / 1.5 Bcfd UPL WI Wells in Red Field OGIP = 58.7 Tcf YE 2013 Total = 1,958 Recoverable = 38.2 Tcf HBP Status: 100% Jonah Field 2,200…
  8. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 8
    Pinedales Profitable Well Economics 250% 200% Robust Reinvestment Opportunities Reserve Size (Bcfe) 150% 4.0 5.0 6.0 7.0 Well Cost (/MM) IRR 4.0 42% 68% 102% 145% 100% 3.8 47% 77% 115% 164% 50% 3.6 53% 88% 130%…
  9. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 9
    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 2013 80 70 Pinedale Field RR-RR 60 Reduced by 71% Rig Release to…
  10. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 10
    Leads to Further Cost Reductions 8.0 Pinedale Field 7.0 6.0 5.0 Total Well Cost 4.0 (MM) 3.0 2.0 1.0 - 2006 2007 2008 2009 2010 2011 2012 2013 Ultra Petroleum Corp. NYSE: UPL 10
  11. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 11
    Extensive Future Wyoming Development
  12. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 12
    Uinta Basin Crude Oil Opportunity Three Rivers 3P reserves: 91 MMBO PD reserves: 10.1 MMBO Future locations: 550 Ultra Petroleum Corp. NYSE: UPL 12
  13. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 13
    Geologically Similar to Pinedale Pinedale Three Rivers Type Section Type Section Pinedale Three Rivers Reservoir Top (MD): 10,500 4,900 10,100 4,600 Reservoir Base (MD): 13,300 7,000 Upper Green River Average Porosity: 6% 7%…
  14. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 14
    Profitable Well Economics Single Well Returns 380 MBO 345 MBO 160 MBO 100 MBO 80/bbl 380% 345% 85% 40% Oil Price 100/bbl 610% 560% 140% 65% Acquisition Burdened Returns 80/bbl 60% 60% 50% 40% 100/bbl 95% 90% 85% 65% Upper Lower…
  15. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 15
    Rapid Production Growth 12,000 2014 exit rate 10,000 11,000 BOD 8,000 Avg Bo/d 6,000 4,000 2,000 - 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Gross Production…
  16. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 16
    Strong Utah Well Performance Well Number Q114 IP30 IP60 IP90 IP Date (BO/d) (BO/d) (BO/d) 1 1/4/2014 126 172 170 2 1/4/2014 147 194 185 3 1/24/2014 135 153 142 4 1/24/2014 231 194 171 5 2/7/2014 156 149 142 6 2/20/2014 166 167 7…
  17. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 17
    Moving Up the Learning Curve Maintain continuous operations continue drilling and completing wells since taking over operations in mid-December install effective winterization of production equipment build appropriate inventory of…
  18. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 18
    Uinta Oil Market Infrastructure Rail Terminal Ogden Rail Terminal Refinery Highway Holly Big West Frontier Chevron Tesoro Salt Lake City Ultra Uinta Basin Provo Rail Terminal Three Rivers Field Helper Rail…
  19. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 19
    Marcellus Shale Natural Gas Ultra-Interest Lands Potter-Tioga Area 156,000 net acres HBP Status: 68% 215 producing horizontal wells Year-end 2013 Clinton-Lycoming Area 91,000 net acres HBP Status: 81% 133 producing horizontal…
  20. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 20
    Marcellus Well Economics 120% 100% Reinvestment Opportunities 80% Reserve Size (Bcfe) 5.0 6.0 7.0 8.0 Well Cost (/MM) IRR 60% 8.0 1% 7% 13% 19% 40% 7.0 5% 11% 19% 27% 20% 6.0 9% 18% 27% 38% 0% * Economics at 3.25/Mcf…
  21. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 21
    Geneseo Resource Assessment Type Log Geneseo Area Ultra has a significant Geneseo position in the fairway Tully 900 Hamilton Geneseo Horizontal Activity UPL Participation Wells (6) 3rd Party Wells (10) Possible…
  22. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 22
    Stacked Pay Potential UPL Leasehold Geneseo 60% is prospective Lake Erie for at least two plays Play Area Utica Play Area Marcellus Play Area Ultra Petroleum Corp. NYSE: UPL 22
  23. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 23
    Economic Fundamentals 2013 Reserve Cash flow F&D Full Cycle Replacement Per Mcfe Cost Returns Ratio 3.28 0.53 Per Per 411% 307% Mcfe Mcfe Ultra Petroleum Corp. NYSE: UPL 23
  24. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 24
    Strong & Stable Margins Cash Flow Margin Net Income Margin 100% 60% Cash Flow Breakeven (/Mcfe) Net Income Breakeven (/Mcfe) 90% 50% 80% 1.18 1.15 1.35 1.62 1.76 2.53 2.82 3.07 2.82 3.01 70% 40% 60% 50% 30% 40% 70% 73% 43% 64%…
  25. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 25
    Expanding Rockies Capacity 12.0 10.0 Excess takeaway capacity 4.0 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.…
  26. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 26
    Shift in Basis Differentials 120% Basis Differentials as a Percentage of Henry Hub 100% 80% 60% 94% 94% 96% 97% 97% 90% 86% 40% 77% 81% 78% 77% 78% 69% 63% 59% 58% 56% 20% 0% NW Rockies Dominion South Transco…
  27. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 27
    Outlook for 2014 2014 Capital Investment Program 560MM Target drilling program 172 gross (104 net) Wyoming wells 38 5 2 63 gross (63 net) Utah wells 25 95 5 gross (2.5 net) Pennsylvania wells Production goal 243 253 Bcfe 155…
  28. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 28
    Early Look Ahead 2013A 2014E 2015E 2016E Operations Realized price (/Mcf) 3.57 4.20 4.20 4.25 Realized price (/Bbl) 90.98 80.00 73.00 68.00 Capex (MM) 376 560 590 625 1,775 Production Oil (mbbls) 1,196 3,800 6,700 8,200 586% Gas…
  29. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 29
    The Ultra Petroleum Story High Highly concentrated assets Large scale, domestic onshore, profitable operations quality assets Industry leading all-in and F&D costs Robust 5,150 future net drilling locations 26.2BN future…
  30. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 30
    Appendix Ultra Petroleum Corp. NYSE: UPL 31
  31. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 31
    Lower 48 Natural Gas Production Lower 48 Pipeline Data 70 68 66 64 62 Bcf/Day 60 58 56 54 52 Source: SpringRock Ultra Petroleum Corp. NYSE: UPL 32
  32. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 32
    Nuclear Retirements & License Reviews 2013 Actual Retirements Generation Capacity MWh Average Consumption Mcf/d San Onofre Unit 2 (CA) 1,070 218,280 San Onofre Unit 3 (CA) 1,080 220,320 Kewanee (WI) 511 104,244 Crystal River No. 3…
  33. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 33
    Production and Financial Guidance Q2 2014 estimated production 59 61 Bcfe Q2 2014 realized pricing Natural gas: 5 - 7% discount to NYMEX Crude oil & condensate: 16 18% discount to NYMEX Q2 2014 expense guidance Total operating…
  34. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 34
    Providing Certainty to Cash Flow Detailed Hedge Profile NYMEX Q2 2014 Q3 2014 Q4 2014 Bal 2014 Volume (Bcf) 43.7 44.2 20.1 108.0 /Mmbtu 3.90 3.90 4.01 3.92 /Mcf 4.13 4.13 4.26 4.15 Crude Oil Swaps Q2 2014 Q3 2014 Q4 2014 Bal…
  35. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 35
    2013 3P Reserve Value Net 5/Mcf 4.5/Mcf Reserves PV-10 PV-10 Reserve Category (Bcfe) MM MM 1P: (Proved) 3,727 6,478 5,700 Tech PUD 3,675 3,357 2,799 Other PROB 3,397 2,467 1,917 Total Probable 7,072 5,825 4,717 2P: (Proved +…
  36. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 36
    Uinta Basin Players UPL - Pinedale Utah Duschesne Uintah Colorado Northern Edge of Uinta Basin Altamont UPL Uinta CUM: 312 MMBo 539 Bcf (Three Rivers Project) DVN EP CPG BBG QEP NFX UPL QEP NFX CPG APC EOG BRY EP…
  37. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 37
    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 /…
  38. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 38
    Significant Debt Coverage PV-10 (MM) - December 31, 2013 SEC 3.51/Mcf 4.50/Mcf 5.00/Mcf PD 2,858 3,757 4,194 PUD 1,274 1,943 2,283 Total Proved 4,132 5,700 6,478 PV-10 / Debt 1.7x 2.3x 2.6x Total Proved & Tech PUD 8,499 9,835…
  39. CITI GLOBAL Energy And Utilities Conference – Ultra Petroleum Corp. – slide 39
    Debt Maturity Profile 700,000,000 600,000,000 500,000,000 Redetermination of senior credit facility 400,000,000 Debt Balance 300,000,000 200,000,000 100,000,000 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023…
  40. CITI GLOBAL Energy And Utilities Conference – 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. CITI GLOBAL Energy And Utilities Conference – 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. CITI GLOBAL Energy And Utilities Conference – 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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