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Bernstein Conference – Ultra Petroleum Corp.

Ultra Petroleum Corp. · Mar 13, 2018 · 35 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. Bernstein Conference – Ultra Petroleum Corp. – slide 1
    Bernstein Conference March 13, 2018
  2. Bernstein Conference – Ultra Petroleum Corp. – slide 2
    Presentation Index Slide Area of Focus 4 Company Overview 5 BestInClass Margins 6 Prolific Basin Drives Lowest Breakevens 7 Fourth Quarter and Full Year 2017 Execution 8 New UPL Strategic Focus and Unique Strengths 9 2018 Capital…
  3. Bernstein Conference – Ultra Petroleum Corp. – slide 3
    Company Overview Market Snapshot NASDAQ Symbol: UPL Market Capitalization, million 984 Net Debt 12/31/17, million 2,159 Enterprise Value, million 3,143 Production & Reserves Q417 Production(1), Bcfe 74.5 SEC Proved Developed…
  4. Bernstein Conference – Ultra Petroleum Corp. – slide 4
    BestinClass Margins 3Q17 YTD EBITDA Margin (/Mcfe) /Mcfe BestinClass Margins 3.00 3Q17 PreHedge Realized Price 3.20 Lease Operating Expense 0.34 2.80 Operating Lease Expense 0.08 2.60 Production Taxes 0.33 Gathering Fees 0.32 2.40…
  5. Bernstein Conference – Ultra Petroleum Corp. – slide 5
    Prolific Basin Drives Lowest Breakevens Highly Attractive Geology Highly Competitive Economics Pinedale field in the Green River Basin is one of the top UPL has a nearly 25year track record in the basin and gas fields in the U.S.…
  6. Bernstein Conference – Ultra Petroleum Corp. – slide 6
    Fourth Quarter and FullYear 2017 Execution Produced at Midpoint of Guidance: 74.5 Bcfe Positive Momentum Heading Into 2018 adjusted to 74.8 Bcfe for PA sale in December 2017 Quarterly Production 75 Delivered Production Growth: 9%…
  7. Bernstein Conference – Ultra Petroleum Corp. – slide 7
    New UPL Strategic Focus and Unique Strengths Disciplined approach Operating Accelerate horizontal program and Financial Fundamentals Capital efficient growth Free cash flow generation Balance sheet flexibility Capital…
  8. Bernstein Conference – Ultra Petroleum Corp. – slide 8
    2018 Capital Plan and Guidance 2018 Plan Capital Program = 400 MM Capital Efficiency: Pinedale Operated Vertical 240 Disciplined deployment of capital Pinedale Operated Horizontal 120 Relentless pursuit to control costs Pinedale…
  9. Bernstein Conference – Ultra Petroleum Corp. – slide 9
    2018 FullYear Cash Costs & EBITDA Guidance Expenses & Cash Costs, /Mcfe EBITDA Guidance 1Q18(1) FY18 FY18 Lease Operating Expense 0.32 0.35 0.28 0.32 Revenue, incl. hedges(6), /Mcfe 2.84 Facility Lease Expense 0.08 0.08 0.07 0.09…
  10. Bernstein Conference – Ultra Petroleum Corp. – slide 10
    2018 Initial Look vs. 2018 Guidance Reduced capital budget: balancing production growth with free cash flow generation Divesting of PA & UT reduces 2018 volumes: 12.5 BCFE Vertical capex cut 50% Horizontal program of 120 MM is backend…
  11. Bernstein Conference – Ultra Petroleum Corp. – slide 11
    Early 2018 Accomplishments Flowing back Warbonnet 923 A2H, the 2nd 2mile lateral in the Lower Lance A: 54.5 MMcfe/d (873 Bopd, 10% oil) Drilled and completed the first Mesaverde HZ in Pinedale: 1mile lateral with IP = 17…
  12. Bernstein Conference – Ultra Petroleum Corp. – slide 12
    Increased Hedges for 2018 Volumes Gas Volumes Hedged for 2018 As Of: Oil Volumes Hedged for 2018 As Of: Prices: /MMBtu Prices: /Bbl 200 2.00 Bcf MMBbls 175 1.75 150 1.50 125 1.25 100 1.00 75 0.75 50 0.50 25 0.25 62.17 59.90 2.90 2.90…
  13. Bernstein Conference – Ultra Petroleum Corp. – slide 13
    2018 Development Program 2018 Program: 2017 Activity Summary: Drilling on east flank Disciplined Capital Approach IPs lower than average Grow within cash flow 3 horizontals drilled Reducing operated rigs from 7 to 4 Vertical…
  14. Bernstein Conference – Ultra Petroleum Corp. – slide 14
    Vertical Well Performance 900 800 Cumulative Production (MMCF) 4 Bcfe type curve 700 600 Jan 2018: Avg IP = 8.1 MMcfe/d 500 400 1Q17: Avg IP = 6.1 MMcfe/d 300 2Q17: Avg IP = 7.4 MMcfe/d 200 3Q17: Avg IP = 6.8 MMcfe/d…
  15. Bernstein Conference – Ultra Petroleum Corp. – slide 15
    Horizontal Flank Upside Ultra currently drilling East Flank of Pinedale 1600 HZ flank locations (700 net): 280 net wells with WI 75% 235 net wells with WI 5075% 185 net wells with WI < 50% 1520 high WI HZ wells in 2018…
  16. Bernstein Conference – Ultra Petroleum Corp. – slide 16
    Significant Stacked Pay Horizontal Potential 50 pads x 8 targets/pad x 4 locations/target = 1,600 potential locations (700 net) Upper Lance Lower Lance Mesaverde Ultra Petroleum Corp. NASDAQ: UPL 17
  17. Bernstein Conference – Ultra Petroleum Corp. – slide 17
    Warbonnet 923 A1H and Warbonnet 923 A2H Start of WB 923 A1H Lateral Lateral Length: 10,300, 49 frac stages, 11.6MM lbs proppant WB 9-23- 0 12000 12500 13000 13500 14000 14500 15000 15500 16000 16500 17000 17500 18000 18500…
  18. Bernstein Conference – Ultra Petroleum Corp. – slide 18
    Horizontal Program Potential Horizontal Well Assumptions Resulting Economics(1) EUR = 20 Bcfe (2.0 Bcfe / 1000) IRR 100% IP (24hr) = 30.4 MMcfd / 32.2 MMcfed NPV10 = 14.3MM IP (30day) = 25 MMcfd/ 26.7 MMcfed Discounted Payout = 12…
  19. Bernstein Conference – Ultra Petroleum Corp. – slide 19
    Single Well Economics: Vertical and Horizontal Economic Inputs: Oil yield = 11 Bbls/MMcf Pinedale WTI price = 60/Bbl Vertical Pinedale Horizontal LOE = 3,000/well/month IP, 30day Gas Diff. = HHUB * 0.9 2.9 3.8 15.0 18.9 25.0 37.3…
  20. Bernstein Conference – Ultra Petroleum Corp. – slide 20
    2018 Plan: Horizontal Production Profile 9 Cumulative Production, Bcfe 8 Lower Lance A 7 2well Average: 6 IP = 52.6 MMcfe/d 5 4 3 2 1 Vertical: 4 BCFE 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24…
  21. Bernstein Conference – Ultra Petroleum Corp. – slide 21
    Transition to Horizontal Program 20162018 Timeline of Horizontal Activity Ramp Up in HZ wells per year Currently planning for 3 HZ rigs in 2019 40 3036 30 2nd HZ Well Drilled: 4th HZ Well Drilled: 1520 20 2mile lateral on east…
  22. Bernstein Conference – Ultra Petroleum Corp. – slide 22
    Horizontal Activity Summary Ultra Boulder 1033 B1H Lower Lance B EUR = 3.5 Bcfe (12% oil) 1.2 Bcfe/1000 Ultra Warbonnet 923 A2H Lower Lance A IP (24hr): 54.5 MMcfe/d; 873 Bopd Ultra Warbonnet 923 M1H Lower Mesaverde IP…
  23. Bernstein Conference – Ultra Petroleum Corp. – slide 23
    Bernstein Conference March 13, 2018
  24. Bernstein Conference – Ultra Petroleum Corp. – slide 24
    Appendix 25
  25. Bernstein Conference – Ultra Petroleum Corp. – slide 25
    Natural Gas Export Capacity Export Capacity for Pinedale Production AECO Kingsgate Large takeaway capacity to multiple destinations 2 to 3 Bcf/d of excess capacity Stanfield Pipeline Capacity Serving the Opal Complex (MMcf/d)…
  26. Bernstein Conference – Ultra Petroleum Corp. – slide 26
    Flexible Balance Sheet Millions 1,200 Capital Structure, millions Term Loan due 2024 (LIBOR+3%) 975 Undrawn revolver 1,000 6.875% Unsecured Bonds due 2022 700 7.125% Unsecured Bonds due 2025 500 800 425 million Credit Facility…
  27. Bernstein Conference – Ultra Petroleum Corp. – slide 27
    YE17 Reserve Reconciliation Proved Proved Total Developed Undeveloped Proved Proved Reserves, Bcfe (PDP + PD) (PUD) (1P) 2017 HZ Program adds 3 PD and 4 PUD locations Year End 2016 2,510 2,510 2017 PA Divestiture…
  28. Bernstein Conference – Ultra Petroleum Corp. – slide 28
    Well Costs Update Vertical 4Q17: Stated goal to reduce by 0.2 MM/well with completion cost reduction achieved half of that goal by YE17 4Q17: Isolated drilling events: 2 sidetracks and hole instability on limited wells 4Q17 avg. up by…
  29. Bernstein Conference – Ultra Petroleum Corp. – slide 29
    Well Costs Update Lower Lance Horizontals Latest 2mile lateral in Lower Lance = 9.0 MM 2018 Budget Case = 9 MM/well YE18 Target Case: 7.5 MM/well MM/well MM/1,000 lateral 12 1.50 10 1.25 10.0 8 9.0 1.00 (0.5) (1.0) 7.5 6…
  30. Bernstein Conference – Ultra Petroleum Corp. – slide 30
    UPL Horizontal Well Data EUR, Bcfe Lateral Well Name Status Interval (% oil) Notes Length [Bcfe/1000] 100% drilled in zone; possible completion issue in toe 3.5 Bcfe Set test Plug: 70% of production from 40% of lateral Boulder 1st…
  31. Bernstein Conference – Ultra Petroleum Corp. – slide 31
    Horizontal Well Data (Other Operators) 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)…
  32. Bernstein Conference – Ultra Petroleum Corp. – slide 32
    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 2.6MM 2.9MM Average Condensate Yield, Bbls/MMcf 11 3.0 19% 14% Decline Curve Parameters Bfactor…
  33. Bernstein Conference – Ultra Petroleum Corp. – slide 33
    Current Hedge Positions: NYMEX Gas MMbtu/d Period Type /MMBtu 40,000 Mar18 NYMEX costless collar 3.23 / 3.54 770,000 Apr18 to Oct18 NYMEX Swaps 2.88 200,000 Nov18 to Dec18 NYMEX Swaps 2.85 200,000 Nov18 to Mar19 NYMEX Swaps 2.91…
  34. Bernstein Conference – Ultra Petroleum Corp. – slide 34
    Current Hedge Positions: NYMEX Oil Bbls/d Period Type /Bbl 2,000 Mar18 to Dec18 NYMEX Swaps 62.17 2,000 Apr18 to Dec18 NYMEX Swaps 57.43 1,000 Jan19 to Mar19 NYMEX Swaps 58.30 Bbl/d 8,000 7,000 6,000 5,000 4,000 3,000…
  35. Bernstein Conference – Ultra Petroleum Corp. – slide 35
    Current Hedge Positions: ROX Basis Differentials MMbtu/d Period Type /MMBtu 30,000 Mar18 to Dec18 ROX basis swaps (financial) (0.580) 140,000 Apr18 to Oct18 ROX basis swaps (financial) (0.624) 170,000 Apr18 to Oct18 ROX basis swaps…

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