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DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp.

Ultra Petroleum Corp. · Sep 19, 2012 · 38 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. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 1
    Ultra Petroleum Corp. Michael D. Watford Chairman, President and CEO Deutsche Bank Energy Conference September 19, 2012 Ultra Petroleum Corp. is an independent exploration and production company focused on developing its long-life…
  2. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 2
    A Unique Energy Company Exploration & Production company uniquely focused on profitable growth 31% return on equity for 2011 15% production growth for 2011 Growing scale of our assets Early development of Wyoming legacy asset…
  3. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 3
    2011 Results Produced 245.3 Bcfe; 15% growth 1.5B capital budget 4.98 Tcfe proved reserves; 13% growth 339% Organic reserve replacement ratio Drill-bit F&D cost of 1.60/Mcfe Ultra Petroleum Corp. NYSE: UPL 3
  4. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 4
    The Ultra Petroleum Story High asset quality Robust investment portfolio Profitable growth strategy Ultra Petroleum Corp. NYSE: UPL 4
  5. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 5
    Long-Life, Low-Cost, Lance Tight Gas Ultra-Interest Wells Pinedale Field 90 sq. miles 2,000+ wells 1.5 Bcfd Field OGIP = 58.7 Tcf Recoverable = 38.2 Tcf Jonah Field 36 sq. miles 1,760+ wells 0.8 Bcfd Field OGIP = 15.0…
  6. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 6
    Wyoming Asset Overview Key Metrics Inventory Production* Reserves 2,000+ producing 782 Mmcfe/d 4.3 Tcfe proved wells YE2011 gross operated 9.7 Tcfe proved + 5,000+ future production probable locations 516 Mmcfe/d net 10.2 Tcfe proved…
  7. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 7
    Pinedales Profitable Well Economics 160% 4.00 6.00 Bcfe Bcfe 140% Vertical Depth 13,500 13,500 120% Well Cost (MM): 4.8 4.8 IRR*: 32% 76% 100% F&D Cost/Mcfe: 1.49 0.99 80% IRR Payout, months: 40.4 19.2 60% Reserve Life, yrs:…
  8. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 8
    Abundant Marcellus Shale Play Ultra-Interest Lands Potter-Tioga Area 170,000 net acres 130 producing horizontal wells Year-end 2011 Clinton-Lycoming Area 90,000 net acres 74 producing horizontal wells Year-end 2011…
  9. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 9
    Pennsylvania Asset Overview Key Metrics Inventory Production* Reserves 204 producing 531Mmcfe/d 0.7 Tcfe proved wells YE2011 gross production 1.7 Tcfe proved + 4,500 future 198 Mmcfe/d probable locations net production 5.8 Tcfe proved…
  10. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 10
    Strong Marcellus Well Economics 160% 140% 4.25 6.30 7.50 Bcfe Bcfe Bcfe 120% Vertical Depth 5,600 7,500 7,500 100% Well Cost: 7.5 MM 7.0 MM 7.0 MM IRR*: 17% 57% 78% 80% F&D Cost/Mcfe: 2.08 1.27 1.07 IRR 60% Payout, months:…
  11. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 11
    Conservative Type Curve Estimates 8.0 Clinton-Lycoming Area 7.0 Potter-Tioga Area 6.0 5.0 Gross Production (MMcfe/D) 7 Bcfe 4.0 3.0 5 Bcfe 2.0 3 Bcfe 1.0 0.0 1 31 61 91 121 151 181 211 241 271 301 331 361 391…
  12. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 12
    Net Risked Resource Potential Wyoming Pennsylvania Total Lance Marcellus Resource 10.2 Tcfe 9.5 Tcfe 19.7 Tcfe 2,900 future 2,500 future 5,400 future net wells net wells net wells 13,600MM 17,800MM 31,400MM future capital future…
  13. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 13
    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…
  14. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 14
    Leads to Further Cost Reductions 7.0 Pinedale Field 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 2011 Ultra Petroleum Corp. NYSE: UPL 14
  15. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 15
    Industrys Low-Cost Operator 12.00 10.00 Ultra - 2.88 2011 All-In Costs vs. Mean - 6.46 8.00 All-in Costs 6.00 (Mcfe) 4.00 2.00 - 9.00 Source: Wells Fargo 8.00 2011 All-In F&D Costs 7.00 6.00 Ultra - 1.82 F&D Costs…
  16. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 16
    Focused on Creating Long-Term Value UPL CROCI - 23% Production per share CAGR - 23% 20% High Returns SWN Low Growth (50%, 21%) 17% QEP High Returns OXY BBG High Growth MUR 14% NBL NFX CXO BRY 2009 - 2011 APA EOG CROCI…
  17. DEUTSCHE BANK 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. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 18
    2011 Proved Reserves SEC Proved Reserves 4.98 Tcfe PDP increase of 17% Drillbit F&D - 1.60 per Mcfe 339% reserve replacement PUD to 1P location ratio of 1.9 0.80:1 PDP PDNP PUD 2.93 0.15 5.3B PV-10 value 4.04/Mcf Ultra…
  19. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 19
    2011 Real Reserve Value Net 6/Mcf 5/Mcf Reserves PV-10 PV-10 Reserve Category (Bcfe) MM MM Proved* 7,260 11,786 8,913 Probable 4,115 3,255 1,996 2P: (Proved + Probable) 11,375 15,041 10,909 Possible 4,675 3,702 2,288 3P: (Proved +…
  20. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 20
    The Ultra Petroleum Story High asset quality Robust investment portfolio Profitable growth strategy Ultra Petroleum Corp. NYSE: UPL 20
  21. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 21
    Impressive Performance Record Net Income Cashflow ROCE ROE Breakeven Breakeven (last 5 years) (last 5 years) (last 5 years) (last 5 years) 2.60 1.13 21% 36% per Mcf per Mcf Average Average Average Average 2nd Quarter…
  22. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 22
    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% 30% 20% 10% 10% 5% 0% 0% 2007 2008 2009 2010 2011 2007 2008…
  23. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 23
    Consistent Absolute Growth Proved Reserve Growth Production Growth 5,000 300 14% CAGR 4,500 21% CAGR 250 4,000 3,500 200 3,000 Bcfe 2,500 Bcfe 150 2,000 100 1,500 1,000 50 500 0 0 2007 2008 2009 2010 2011 2007 2008…
  24. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 24
    And Leaders in Per-Share Growth Proved Reserves per Share Production per Debt-Adjusted Growth Share Growth 20% 18% 17% 18% 16% 16% 14% 13% 14% 12% 12% 10% 2006 - 2011 9% 2006- 2011 9% 10% CAGR CAGR 8% 8% 6% 6% 4%…
  25. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 25
    Outlook for 2012 2012 Capital Investment Program 825MM 7% Target drilling program 4% 24% 131 gross (53 net) Wyoming wells 19% 72 gross (30 net) Pennsylvania wells 8 gross (8 net) Colorado wells Production goal 250 260 Bcfe 4%…
  26. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 26
    Where are We Going 2010A 2011A 2012E Operations Realized price (/Mcf) 4.88 5.05 4.00 Capex (MM) 1,576 1,514 625* Production (Bcfe) 214 245 255 Income Statement (MM) EBITDA 818 1,034 825 Balance Sheet (MM) Ending debt balance…
  27. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 27
    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 investment portfolio High rate-of-return…
  28. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 28
    Appendix Ultra Petroleum Corp. NYSE: UPL 28
  29. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 29
    New Ventures Activity 136,600 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 Play attractiveness Available acreage…
  30. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 30
    Consistent Marcellus Performance Wellsboro Area 18 wells starts in Q2 Krause Area Avg. IP = 6.7 MMcf/d Krause 4 wells starts in Q2 Wellsboro Avg. IP = 8.3 MMcf/d Marshlands Potter Tioga Texas Creek Grugan Clinton Lycoming…
  31. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 31
    Marcellus Technical Reviews: What We are Learning High-grading acreage to optimize returns Utilizing seismic attributes to delineate resource sweet spots 3D coverage expanded from 315 sq-mi to 455 sq-mi Studying correct well…
  32. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 32
    Northern Pennsylvania Pipeline Capacity Additions Incremental Projects* Capacity Total Date Current Capacity 3.5 Bcf/d Q3 2012 Tennessee 300** 0.28 Bcf/d Springville 0.32 Bcf/d Marc 1 0.50 Bcf/d Total - 2012 4.6 Bcf/d Q4 2012…
  33. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 33
    Financial Strength Total Debt Capacity 3,165MM Maturity Profile 1,000 900 June 30, 2012 800 700 600 millions 500 400 Debt/EBITDA 300 Short-term 2.18X Net Debt 200 Liquidity 2,101MM 100 443MM EBITDA/Interest 11.5X 0…
  34. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 34
    Providing Certainty to Cash Flow: Hedging Summary Total Volume Average Price Time Period (Bcf) (/MMbtu) Q3 2012 54.3 4.34 Q4 2012 48.8 4.27 Balance 2012 103.1 4.31 Amounts on a Bcf basis may not total due to rounding Ultra…
  35. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 35
    Profitable Reinvestment Opportunities Reserve Size - Pinedale Wells 4 Bcfe 5 Bcfe 6 Bcfe 7 Bcfe 8 Bcfe 3/Mcf 10% 18% 28% 39% 53% Gas Price 4/Mcf 20% 33% 49% 68% 91% 5/Mcf 32% 52% 76% 106% 143% 6/Mcf 47% 75% 110% 155%…
  36. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 36
    Quarterly Guidance Q3 2012 Guidance Q3 2012 estimated production 60 62 Bcfe Q3 2012 realized pricing Natural gas: 2 - 4% discount to NYMEX Condensate: 8.00 discount to NYMEX Q3 2012 expense guidance Assumes 3.05 per Mmbtu and…
  37. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 37
    Narrowing Basis Differentials Basis Differential as a Percentage (%) of Henry Hub Balance 2007 2008 2009 2010 2011 2012 2012 2013 NW Rockies 58 69 77 90 94 94 95 96 Dominion South 105 105 107 104 104 101 99 98 Source:…
  38. DEUTSCHE BANK ENERGY CONFERENCE – Ultra Petroleum Corp. – slide 38
    Expanding Rockies Capacity 12.0 Excess takeaway 10.0 capacity 4.5 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:…

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