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Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp.

Ultra Petroleum Corp. · Nov 11, 2014 · 40 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. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 1
    Ultra Petroleum Corp. Michael D. Watford Chairman, President and CEO Jefferies 2014 Global Energy Conference November 2014 Ultra Petroleum Corp. is an independent energy company engaged in domestic natural gas and crude oil exploration,…
  2. Jefferies 2014 Global Energy 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. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 3
    The Ultra Petroleum Story: Future 2014 Back to the Profitable Growth Plan 30% EBITDA growth Tripling oil production Grow reserves and production Expand margins by repositioning portfolio Increase capital efficiency Ultra…
  4. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 4
    2014 Accomplishments Reposition portfolio to higher returning assets in Pinedale while shedding lower returning assets in the Marcellus Increased operatorship to 82% from 62% across entire portfolio Increased exposure to more…
  5. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 5
    Transaction Increases 1P Reserves by 1.8 Tcfe Reserves, Bcfe Acquired Pinedale from Shell = 2.1 Tcfe 1P Reserves 35% PDP 65% PUD Note: Year end 2013 price deck of 3.67 / mmbtu Henry Hub gas price and WTI oil price of 96.92 /…
  6. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 6
    Transaction Increases 1P Reserves PV10 by 1.8bn PV-10 Values, MM Acquired Pinedale from Shell = 2.1 billion 1P PV-10 57% PDP 43% PUD Note: Year end 2013 price deck of 3.67 / mmbtu Henry Hub gas price and WTI oil price of 96.92…
  7. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 7
    Long-Life, Low-Cost, Lance Tight Gas Pinedale Field 81,800 gross (68,853 net) 2,200 wells / 1.5 Bcfd Field OGIP = 58.7 Tcf UPL WI Wells Sept 30, 2014 Total = 2,298 Recoverable = 38.2 Tcf HBP Status: 100% Jonah Field 2,200…
  8. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 8
    Pinedales Profitable Well Economics 350% 300% Robust Reinvestment Opportunities 250% Reserve Size (Bcfe) 200% IRR 4.0 5.0 6.0 7.0 Well Cost (/MM) 150% 4.0 33% 55% 80% 114% 100% 3.8 37% 60% 92% 128% 50% 3.6 42% 68%…
  9. Jefferies 2014 Global Energy 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. Jefferies 2014 Global Energy 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. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 11
    Extensive Future Wyoming Development
  12. Jefferies 2014 Global Energy 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. Jefferies 2014 Global Energy 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. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 14
    Uinta Well Economics 800% 700% Robust Reinvestment Opportunities 600% 500% Reserve Size (MBO) 200 300 400 IRR 400% Well Cost (mm) 1.7 200% 513% 1,141% 300% 1.5 270% 719% 1,674% 200% 1.2 464% 1,350% 3,423% 100%…
  15. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 15
    Rapid Production Growth 12,000 10,000 2014 Exit Rate 11,000 BOE/D 8,000 Avg Boe/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…
  16. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 16
    Strong Uinta Well Performance 2014 YTD Average IP30 Average IP60 Average IP90 Average IP120 Area Well Count (BO/d) (BO/d) (BO/d) (BO/d) 1 22 179 171 168 150 2 21 150 145 131 125 3 15 97 99 94 182 100 Area 1 Type Curve 90…
  17. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 17
    Uinta Operations Update October 2013 Acquisition Q3 2014 Update 4,700 Boe/d of production (gross) 10,400 Boe/d of production (gross) 39 producing wells 94 producing wells 8 day cycle time planned < 6 day cycle times being achieved…
  18. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 18
    Uinta Accomplishments 2014 YTD Achievements: Doubled production with record of 10,400 BOE/d in September Drilled 59 wells in first 9 months Reduced drilling cycle time to 5.5 days from 7 days Enhancing Value: Upgraded rig while…
  19. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 19
    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…
  20. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 20
    Marcellus Shale Natural Gas Anadarko/Mitsui AMI 91,000 net acres HBP Status: 81% 133 producing hz wells 55 Mmcfe/d (net) Ultra-Interest Lands Ultra Petroleum Corp. NYSE: UPL 20
  21. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 21
    Marcellus Well Economics 250% 200% Reinvestment Opportunities 150% Reserve Size (Bcfe) IRR 6.0 7.0 8.0 9.0 Well Cost (/MM) 100% 6.5 18% 26% 35% 46% 50% 6.0 22% 31% 42% 55% 5.5 26% 38% 51% 66% 0% 3 4 5 6 Economics at…
  22. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 22
    Industrys Low-Cost Producer 12.00 2013 All-In Costs per Mcfe 10.00 8.00 All-in Costs per Mcfe 6.00 Mean - 6.81/Mcfe YTD 2014 Costs Per Mcfe LOE 0.47 4.00 Production Tax 0.42 Gathering Fees 0.23 Transportation 0.32 DD&A…
  23. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 23
    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 1.75 2.53 2.82 3.07 2.82 3.02 70% 40% 60% 50% 30% 40% 70% 73% 64% 20%…
  24. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 24
    Driving Higher Margins & Cash Flows Margin/Mcfe by Area West Production % 4 HH and 80 WTI Pre/Post Pinedale Acquisition 4.00 100% 3.50 3.51 90% 95% 3.00 80% 2.50 70% 73% 2.00 60% 50% 1.50 1.73 40% 1.00 30% 0.50 20% 0.00 10%…
  25. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 25
    Shift in Basis Differentials 120% Basis Differentials as a Percentage of Henry Hub 100% 80% 96% 97% 95% 60% 94% 94% 90% 86% 94% 81% 40% 77% 78% 77% 78% 69% 63% 61% 58% 56% 54% 20% 0% NW Rockies Dominion South…
  26. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 26
    Outlook for 2014 2014 Capital Investment Program 1,500MM Target drilling program 173 gross (106 net) Wyoming wells 76 gross (76 net) Utah wells 5 gross (2.5 net) Pennsylvania wells Production goal 247 250 Bcfe 178 gross (106 net)…
  27. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 27
    2015 Outlook 2015 guidance will be issued in mid-February 2015 Targeting production of 280 to 300 Bcfe at lower capital budget Delivering 15% per annum growth over the next three years while spending within cash flow Oil volumes…
  28. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 28
    Appendix Ultra Petroleum Corp. NYSE: UPL 29
  29. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 29
    Lower 48 Natural Gas Production Lower 48 Pipeline Data 72 70 68 66 64 Bcf/Day 62 60 58 56 54 52 Source: SpringRock Ultra Petroleum Corp. NYSE: UPL 30
  30. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 30
    Growing Natural Gas Demand Annual Gas Demand 6.0 5.0 4.0 Bcf/d 3.0 2.0 1.0 0.0 2013 2014 2015 2016 2017 2018 2019 LNG Power Gen Industrial Mexico Transport Source: Simmons & Company, IEA, EIA, CITI Ultra…
  31. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 31
    Growing Natural Gas Demand Cumulative Gas Demand 25.0 24 Bcf/d incremental demand 2013 2019 10 Bcf/d incremental demand 2013 - 2016 20.0 15.0 Bcf/d 10.0 5.0 0.0 2013 2014 2015 2016 2017 2018 2019 LNG Power Gen…
  32. Jefferies 2014 Global Energy 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. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 33
    Production and Financial Guidance Q4 2014 estimated production 68.8 71.8 Bcfe Q4 2014 realized pricing Natural gas: 4 - 6% discount to NYMEX Crude oil & condensate: 18 20% discount to NYMEX Q4 2014 expense guidance Total…
  34. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 34
    Hedging Summary Q4 Bal Q1 Q2 Q3 Q4 Total NYMEX 2014 2014 2015 2015 2015 2015 2015 Volume 20.1 20.1 - 13.9 14.0 4.7 32.6 (Bcf) /Mmbtu 4.01 4.01 - 3.79 3.79 4.01 3.79 /Mcf 4.26 4.26 - 4.02 4.02 4.02 4.02 Crude Oil Q4 Bal Q1 Q2 Q3…
  35. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 35
    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…
  36. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 36
    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 / complementary…
  37. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 37
    Debt Maturity Profile 900,000,000 800,000,000 Redetermination of 700,000,000 senior credit facility 600,000,000 500,000,000 Debt Balance 400,000,000 300,000,000 200,000,000 100,000,000 0 2015 2016 2017 2018 2019 2020…
  38. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 38
    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…
  39. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 39
    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…
  40. Jefferies 2014 Global Energy Conference – Ultra Petroleum Corp. – slide 40
    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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