Morgan Stanley Investor Day December 5, 2017 Ultra Petroleum Corp. is an independent energy company engaged in domestic natural gas and oil exploration, development and production. The company is listed on NASDAQ and trades under the…
Ultra Petroleum Corp. Overview Ticker Symbol NASDAQ:UPL Headquarters Houston, TX Full-time employees 170 Shares outstanding 196,346,736 3Q17 Business Results Net production 773 MMcfe/d Adjusted EBITDA 153 million Net acreage Wyoming…
Ultra is a Tier 1 Gas Producer Extensive, attractive and predictable inventory. Vertical inventory to 2025 with at least 20% IRR, with more than 1,000 vertical locations 25% IRR (at 3.00 per MMBtu HHUB) Low cost, high margin…
Core Asset: Pinedale Field Q3 2017 production of 728 Mmcfe/d Pinedale Field T33N-R107W Over 95% of companys reserves DA 1 4,903 remaining gross vertical Mesa Pole Creek locations Significant Horizontal Upside 1,600 potential…
Pinedale Asset Overview Description 78,000 net acres in Sublette County, Wyoming Net Acreage Details: Pinedale Vertical Core: 27,000 acres Horizontal Flank, 700 net locations: 28,000 acres Additional Flank Acreage/Jonah: 23,000…
Pinedale Vertical Drilling Progression 2017 Activity Summary: Drilling on east flank IPs lower than average Higher condensate yield Concurrent horizontals 2018-19 Drilling Plans: Rigs moving west into core Expecting higher IPs and…
Pinedale Vertical Inventory Remaining inventory: 1,910 10-acre wells and 2,993 5-acre wells Producing Wells Future Vertical Locations Oakridge/ QEP operated Ultra operated Inventory based on 3rd party reserve report (NSAI)…
Pinedale Vertical Well Economics Parameter Value IRR Sensitivity: DC&E Costs & EUR EUR, Bcfe 4.0 DC&E Capital / Well IP30, MMcf/d 3.8 2.5MM 2.8MM Average Condensate Yield, Bbls/MMcf 11 3.0 16% 12% Decline Curve Parameters B-factor…
Low Cost Operations Further Improved Through Reorganization Ultra is a low cost leader among public companies with Cash Operating Costs…
Pinedale Pipeline Transportation Infrastructure Unlike its Appalachian peers with burdensome fixed minimum volume commitments, UPL has a variable cost structure with no current contractual commitments Excess pipeline capacity leads to…
Attractive Basis Differentials Out of Rockies Attractive basis differentials out of the Rockies with price realization 90% NYMEX Approximately 95% of Q3 2017 production from Rockies 120% Basis Differentials as a Percentage of Henry…
2018 Preliminary Growth Considerations Key focus. Balancing free cash flow (FCF) generation with production growth 100% Vertical program. Ability to grow production 20% at 3.00 HHUB while living within FCF Horizontal integration.…
Horizontal Program Potential Potential Well Economics: Inputs Potential Well Economics: Results EUR = 20 Bcfe (2.0 Bcfe / 1000) IRR = 70% IP = 11 MMcfd (Antelope 341-19H) NPV10 = 12.8 MM Condensate Yield = 20 Bbls/MMcf Payout = 19…
Horizontal Well Activity Ultra Boulder 10-33-B-1H Ultra Lower Lance B Warbonnet 9-23-A-2H Drilled in 2016 Lower Lance A Drilling Ultra Warbonnet 9-23-M-1H Lower Mesaverde Drilling Jonah Energy Ultra Antelope 341-19H…
Pinedale Horizontal Flank Upside Potential Horizontal Flank Wells Beyond the Boundary of Pinedale Vertical Development Ultra currently 1,600 potential horizontal locations using testing East Flank pre-existing infrastructure…
Horizontal Well Data EUR, Bcfe Lateral Well Name Operator Status Interval (% oil) Notes Length [Bcfe/1000] 10.8 Bcfe Low IP: 3 MMcf/d Antelope Jonah 1st production Low decline rate Lower Lance A 3,800 (15% oil) 91-29H Energy Jan…
Uinta Basin Oil Uinta 8,000 Net Acres Basin Q3 2017 production of Bluebell 2,324 Boe/d 137 Producing Wells Brennan Bottom 100% Operated Three Rivers 6,500 to 7,500 Leland Bench Wonsits Valley Average Well Depth…
Marcellus Shale Natural Gas 72,000 Net Acres Marcellus Q3 2017 Production of 31 Mmcf/d 136 Producing Wells Operated by Alta Resources 99% Held by Production 1,972 Gross Locations Marcellus & Geneseo stacked pay…
Ultra is a Tier 1 Gas Producer Extensive, attractive and predictable inventory. Vertical inventory to 2025 with at least 20% IRR, with more than 1,000 vertical locations 25% IRR (at 3.00 per MMBtu HHUB) Low cost, high margin…
Appendix
Capital Structure and Debt Maturities As of September 30, 2017 (MM) Millions Debt Maturities Cash 5 1,200 1,000 425.0 Million Credit Facility 20 Undrawn revolver 7.875% Unsecured Bonds due 2022 700 800 Term Loan due 2024…
Ultra Petroleum: High Return on Invested Capital Margin expansion drives strong recycle ratio Attractive Realizations Low Costs NYMEX Henry Hub strip (/Mmbtu) 3.10 Lease operating expense 0.34 Less: Average location differential…
Minimal Well Cost Inflation Ongoing efficiency gains partially offset 10% cost inflation since 2016 Completion design modified in 2Q to test increased diversion with additional frac plugs Early results under study; returned to…
Pinedale Vertical Well Performance 900 800 Cumulative Production (MMCF) 7-year history validates 700 high-quality inventory 600 500 400 4 Bcfe type curve 300 200 100 - 1 2 3 4 5 6 7 8 9 10 11 12 Months Ultra…
Most Accurate IRRs Derived from Actual Producing Days Producing Day Rate (PDR) is critical to derive accurate IP rates and type curves. Monthly volume should be divided by actual producing days, which are publicly reported by State of…
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