Ultra Petroleum Corp. (NASDAQ: UPL) announces financial and
operating results for the quarter ended June 30, 2018.
Financial and Operating
Highlights:
- Second quarter production of 70.9 Bcfe increased 6% compared to
second quarter 2017,
- Drilled and completed 11 horizontal wells targeting
multiple intervals within the Lower Lance formation,
- Increased intervals within the Lower Lance formation from four
to five, with each interval further subdivided into two distinct
zones to land horizontals,
- The six horizontal wells the Company drilled in the Lower Lance
A1 zone (90 feet below the top of the Lower Lance) had an average
24-hour IP rate of 27.3 MMcfe/d with other targeted zones providing
more variable results,
- Brought 18 vertical wells online with highest average
24-hour IP rate over the last seven quarters at 8.8 MMcfe/d,
- Plan to run 3 operated rigs (1 horizontal and 2 vertical) for
remainder of 2018 to focus on free cash flow generation until gas
pricing improves, and
- Additional financial and operating highlights can be found in
the new investor presentation posted at
www.ultrapetroleum.com.
Second Quarter 2018 Financial
Results
During the second quarter of 2018, total
revenues were $190.1 million as compared to $212.7 million during
the second quarter of 2017. The Company’s production of natural gas
and oil was 70.9 billion cubic feet equivalent (Bcfe), an increase
of 6% over the second quarter of 2017, with 66.9 billion cubic feet
(Bcf) of natural gas and 667.0 thousand barrels (MBbls) of oil and
condensate.
During the second quarter of 2018, Ultra
Petroleum’s average realized natural gas price was $2.28 per
thousand cubic feet (Mcf), which includes realized gains and losses
on commodity hedges and compares to $2.84 for the same period in
2017. Excluding the realized gains and losses from commodity
derivatives, the Company’s average price for natural gas was $2.11
per Mcf, compared to $2.85 per Mcf for the second quarter of 2017.
The Company’s average realized oil and condensate price was $58.24
per barrel (Bbl), which includes realized losses on commodity
hedges, for the quarter ended June 30, 2018. Excluding the realized
losses from oil commodity derivatives, the Company’s average price
for oil was $64.71 per Bbl as compared to $45.51 per Bbl for the
same period in 2017.
Ultra Petroleum’s reported net loss was $20.6
million, or $0.10 per diluted share. Ultra reported adjusted net
income(2) of $34.0 million, or $0.17 per diluted share for the
quarter ended June 30, 2018.
Year-to-Date Financial
Results
During the six months ended June 30, 2018, total
revenues were $415.5 million as compared to $433.6 million during
the same period in 2017. During the first six months of 2018, the
Company’s production of natural gas and oil was 143.2 Bcfe, an
increase of 9% over 2017, with 135.1 Bcf of natural gas and 1.3
million barrels (MMBbls) of oil and condensate.
During the first six months of 2018, Ultra
Petroleum’s average realized natural gas price was $2.48 per Mcf,
which includes realized gains and losses on commodity hedges and
compares to $2.99 per Mcf for the same period in 2017. Excluding
realized gains and losses from commodity derivatives, the Company’s
average price for natural gas was $2.39 per Mcf, compared to $3.00
per Mcf for the six months ended June 30, 2017. The Company’s
average realized oil and condensate price was $59.31 per Bbl, which
includes realized losses on commodity hedges, for the six months
ended June 30, 2018. Excluding the realized losses from oil
commodity derivatives, the Company’s average price for oil was
$62.79 per Bbl as compared to $46.39 per Bbl for the same period in
2017.
Ultra Petroleum’s reported net income was $26.9 million, or
$0.14 per diluted share. Ultra reported adjusted net income(2) of
$89.3 million, or $0.45 per diluted share for the six months ended
June 30, 2018.
Pinedale Horizontal Program
Through the Company’s horizontal delineation program, Ultra
Petroleum has now designated five intervals within the Lower Lance:
Lower Lance A through E. Ultra has subdivided each interval into an
upper and lower zone, which it refers to as 1 and 2,
respectively.
In the second quarter, Ultra focused its delineation efforts on
the Lower Lance formation with the completion of 11 gross (8.1 net)
horizontal wells, targeting four different zones within the Lower
Lance. Four of these wells were drilled in the Lower Lance A1 zone
(90 feet below the top of the formation), four were drilled in the
Lower Lance A2 zone (250 feet below the top of the formation), two
were drilled in the Lower Lance C1 zone (690 feet below the top of
the formation) and one was drilled in the Lower Lance E1 zone
(1,290 feet below the top of the formation).
A total of six wells are now producing from the Lower Lance A1
zone (90 feet below the top of the formation) with an average
24-hour initial production (IP) rate of approximately 27.3 million
cubic feet of natural gas equivalent per day (MMcfe/d).
A total of four wells are now producing from the Lower Lance A2
zone (250 feet below the top of the formation) with an average
24-hour IP rate of 8.0 MMcfe/d.
The Company also drilled two wells in the Lower Lance C1 zone
(690 feet below the top of the formation) with an average 24-hour
IP rate of 12.1 MMcfe/d.
At the end of the second quarter, the Company began producing
its first Lower Lance E1 zone well (1,290 feet below the top of the
formation) with a 24-hour IP rate of 11.3 MMcfe/d.
The table below provides details on each Lower Lance horizontal
well brought online since November 2017, along with the average
results by zone:
|
|
|
|
|
|
|
|
|
Well |
Target Zone |
IP Prod Date |
Lateral Length |
Net/Gross % |
Stage Count |
IP 24h Rate, MMcfe/d |
IP30, MMcfe/d |
IP YieldBBl/MMcf |
WB
9-23 A-1H |
Lower Lance A1 |
Nov-17 |
10,364 |
82 |
% |
49 |
50,768 |
35,915 |
15.2 |
WB
9-23 A-2H |
Lower Lance A1 |
Feb-18 |
10,978 |
78 |
% |
49 |
54,459 |
36,816 |
17.7 |
WB
8-25 A-1H |
Lower Lance A1 |
Apr-18 |
9,923 |
54 |
% |
35 |
28,508 |
18,258 |
17.0 |
WB
8-14 A-1H |
Lower Lance A1 |
Apr-18 |
7,159 |
80 |
% |
35 |
16,165 |
9,610 |
25.4 |
WB
7-23 4H |
Lower Lance A1 |
May-18 |
8,095 |
71 |
% |
41 |
7,179 |
4,966 |
7.0 |
WB
7-23 2H |
Lower Lance A1 |
Jun-18 |
6,525 |
53 |
% |
24 |
6,873 |
4,176 |
14.2 |
|
|
|
|
|
|
|
|
|
WB
9-23 A-3H |
Lower Lance A2 |
Apr-18 |
10,864 |
47 |
% |
33 |
11,711 |
7,294 |
13.5 |
WB
8-25 A-2H |
Lower Lance A2 |
Apr-18 |
9,916 |
38 |
% |
36 |
8,427 |
5,420 |
14.9 |
WB
7-23 3H |
Lower Lance A2 |
May-18 |
8,356 |
40 |
% |
33 |
4,480 |
2,659 |
7.0 |
WB
9-23 5H |
Lower Lance A2 |
May-18 |
8,657 |
65 |
% |
34 |
7,554 |
5,540 |
13.1 |
|
|
|
|
|
|
|
|
|
WB
8-14 3H |
Lower Lance C1 |
May-18 |
7,510 |
81 |
% |
35 |
20,021 |
11,645 |
26.0 |
WB
9-23 11H |
Lower Lance C1 |
Jun-18 |
10,821 |
45 |
% |
25 |
4,107 |
2,718 |
18.5 |
|
|
|
|
|
|
|
|
|
WB
8-14 4H |
Lower Lance E1 |
Jun-18 |
6,863 |
40 |
% |
16 |
11,318 |
6,332 |
33.0 |
|
|
|
|
|
|
|
|
|
Lower Lance A1 Average |
|
8,841 |
70 |
% |
39 |
27,325 |
18,290 |
16.1 |
Lower Lance A2 Average |
|
9,448 |
48 |
% |
34 |
8,043 |
5,228 |
12.1 |
Lower Lance C1 Average |
|
9,166 |
63 |
% |
29 |
12,064 |
7,092 |
22.3 |
Lower Lance E1 Average |
|
6,863 |
40 |
% |
16 |
11,318 |
6,332 |
33.0 |
|
|
|
|
|
|
|
|
|
“Ultra is in the beginning stages of developing
the Pinedale field with horizontal wells. While we anticipated
variable results, and had some encouraging results from multiple
zones, overall the average performance of these wells in the second
quarter was below expectations. We are expanding our technical
efforts to better leverage our learnings in future horizontal
wells. With 78,000 net acres and an operating team that has drilled
more than 2,100 vertical wells in Pinedale, we are uniquely
positioned to lead this effort, but it will take time and patience
as we delineate Pinedale’s significant horizontal potential,” said
Ultra Petroleum Interim Chief Executive Officer, Brad Johnson.
Pinedale Vertical Program
During the second quarter, the Company and its
partners brought online 18 gross (10.6 net) vertical wells in
Pinedale. The average 24-hour IP rate for new operated
vertical wells brought online in the second quarter of 2018 was 8.8
MMcfe per day.
“During the second quarter of 2018, we posted
the highest average IPs for our vertical wells in the last seven
quarters. With a large, high quality inventory of vertical
locations, we will continue to execute on a solid, returns-driven
vertical program,” said Ultra Petroleum Chief Operating Officer,
Jay Stratton.
Hedging Activity
The table below provides a summary of the hedges
in place as of August 7, 2018:
|
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|
|
NYMEX |
|
Q3 2018 |
|
|
Q4 2018 |
|
|
Q1 2019 |
|
|
Q2 2019 |
|
|
Q3 2019 |
|
|
Q4 2019 |
|
|
Q1 2020 |
|
Natural Gas
Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (MMBtu/d) |
|
|
770,000 |
|
|
|
657,283 |
|
|
|
660,000 |
|
|
|
400,000 |
|
|
|
380,000 |
|
|
|
360,000 |
|
|
|
170,000 |
|
$/MMBtu |
|
$ |
2.88 |
|
|
$ |
2.88 |
|
|
$ |
2.92 |
|
|
$ |
2.75 |
|
|
$ |
2.76 |
|
|
$ |
2.77 |
|
|
$ |
2.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (Bbl/d) |
|
|
6,500 |
|
|
|
6,500 |
|
|
|
6,000 |
|
|
|
6,000 |
|
|
|
4,000 |
|
|
|
3,000 |
|
|
|
1,000 |
|
$/Bbl |
|
$ |
60.61 |
|
|
$ |
60.45 |
|
|
$ |
58.46 |
|
|
$ |
59.16 |
|
|
$ |
58.59 |
|
|
$ |
59.23 |
|
|
$ |
60.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Basis Swap
Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NW Rockies basis swap
volume (MMBtu/d)(a) financial |
|
|
562,500 |
|
|
|
559,674 |
|
|
|
572,500 |
|
|
|
120,000 |
|
|
|
120,000 |
|
|
|
120,000 |
|
|
|
— |
|
NW Rockies basis swap
volume (MMBtu/d)(a) physical |
|
|
170,000 |
|
|
|
57,283 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Price differential
($/MMBtu) |
|
$ |
(0.65 |
) |
|
$ |
(0.66 |
) |
|
$ |
(0.66 |
) |
|
$ |
(0.77 |
) |
|
$ |
(0.77 |
) |
|
$ |
(0.77 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
(a) Represents swap contracts that fix the basis
differentials for gas sold at or near Opal, Wyoming and the value
of natural gas established on the last trading day of the month by
the NYMEX for natural gas swaps for the respective period.
2018 Guidance
The Company is adjusting its capital plan for
the remainder of 2018. The Company recently reduced its operated
rig count from four to three. Two rigs are currently focused on
vertical development and one rig is currently focused on horizontal
development.
Production: The Company is adjusting annual
production guidance down to 273 to 283 Bcfe. In the third quarter,
the average daily production rate is expected to range between
710-750 MMcfe/d.
Capital Investment: The Company is affirming its
2018 total capital budget of $400 million.
Expenses: The following table presents the
Company's expected per unit of production expenses for the third
quarter of 2018. Production tax guidance assumes a $2.86 per
MMBtu Henry Hub natural gas price and a $68.00 per Bbl
NYMEX crude oil price:
|
|
|
|
Costs Per
Mcfe |
|
|
3Q 2018 |
Lease
operating expenses |
|
$ |
0.30 –
0.34 |
Facility
lease expense |
|
$ |
0.08 –
0.10 |
Production taxes |
|
$ |
0.30 –
0.32 |
Gathering
fees, net |
|
$ |
0.24 –
0.26 |
Transportation charges |
|
$ |
0.00 –
0.00 |
Depletion
and depreciation |
|
$ |
0.72 –
0.76 |
General
and administrative-cash |
|
$ |
0.01 –
0.03 |
Interest
expense |
|
$ |
0.54 – 0.56 |
|
|
|
|
Income Tax: The Company does
not expect any income tax expense during 2018.
Asset Sale
Subsequent to the quarter end, the Company
entered into a Purchase and Sale Agreement to sell all of its Utah
assets for cash consideration of $75 million, subject to customary
closing adjustments. The transaction is expected to close during
the third quarter of 2018. During the quarter ended June 30, 2018,
the Company’s Utah assets produced approximately 2,000 barrels of
oil equivalent per day.
Conference Call Webcast Scheduled for
August 9, 2018
Ultra Petroleum’s second quarter 2018 results
conference call will be available via webcast at 11:00 a.m. Eastern
Daylight Time (10:00 a.m. Central Daylight Time) Thursday, August
9, 2018. To listen to this webcast, log on to
www.ultrapetroleum.com and follow the link to the webcast.
The webcast replay will be archived on Ultra Petroleum’s
website.
Financial tables to follow.
Ultra Petroleum Corp.Consolidated
Statements of Operations (unaudited)All amounts
expressed in US$000's, except per unit data
|
|
For the Six Months Ended |
|
|
For the Quarter Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Volumes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural
gas (Mcf) |
|
|
135,126,814 |
|
|
|
123,056,200 |
|
|
|
66,892,949 |
|
|
|
63,066,779 |
|
Oil and
condensate (Bbls) |
|
|
1,344,880 |
|
|
|
1,338,133 |
|
|
|
667,038 |
|
|
|
675,236 |
|
Mcfe -
Total |
|
|
143,196,094 |
|
|
|
131,084,998 |
|
|
|
70,895,177 |
|
|
|
67,118,195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural
gas sales |
|
$ |
322,716 |
|
|
$ |
368,848 |
|
|
$ |
141,255 |
|
|
$ |
179,997 |
|
Oil
sales |
|
|
84,451 |
|
|
|
62,081 |
|
|
|
43,167 |
|
|
|
30,732 |
|
Other
revenue |
|
|
8,344 |
|
|
|
2,687 |
|
|
|
5,716 |
|
|
|
1,928 |
|
Total operating
revenues |
|
|
415,511 |
|
|
|
433,616 |
|
|
|
190,138 |
|
|
|
212,657 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease
operating expenses |
|
|
45,409 |
|
|
|
46,225 |
|
|
|
23,645 |
|
|
|
23,089 |
|
Facility
lease expense |
|
|
12,682 |
|
|
|
10,452 |
|
|
|
6,526 |
|
|
|
5,226 |
|
Production taxes |
|
|
42,153 |
|
|
|
43,887 |
|
|
|
18,883 |
|
|
|
21,754 |
|
Gathering
fees |
|
|
47,238 |
|
|
|
41,571 |
|
|
|
24,181 |
|
|
|
20,642 |
|
Total lease operating
costs |
|
|
147,482 |
|
|
|
142,135 |
|
|
|
73,235 |
|
|
|
70,711 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depletion
and depreciation |
|
|
102,282 |
|
|
|
70,427 |
|
|
|
51,742 |
|
|
|
38,673 |
|
General
and administrative |
|
|
14,752 |
|
|
|
26,061 |
|
|
|
2,063 |
|
|
|
25,009 |
|
Total operating
expenses |
|
|
264,516 |
|
|
|
238,623 |
|
|
|
127,040 |
|
|
|
134,393 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income,
net |
|
|
(1,541 |
) |
|
|
(119 |
) |
|
|
(1,296 |
) |
|
|
27 |
|
Contract settlement
expense |
|
|
— |
|
|
|
(52,707 |
) |
|
|
— |
|
|
|
— |
|
Interest expense |
|
|
(73,552 |
) |
|
|
(114,872 |
) |
|
|
(37,715 |
) |
|
|
(29,425 |
) |
Deferred gain on sale
of liquids gathering system |
|
|
5,276 |
|
|
|
5,276 |
|
|
|
2,638 |
|
|
|
2,638 |
|
Realized gain (loss) on
commodity derivatives |
|
|
7,736 |
|
|
|
(868 |
) |
|
|
6,662 |
|
|
|
(868 |
) |
Unrealized gain (loss)
on commodity derivatives |
|
|
(61,539 |
) |
|
|
8,367 |
|
|
|
(53,933 |
) |
|
|
21,585 |
|
Total other (expense)
income, net |
|
|
(123,620 |
) |
|
|
(154,923 |
) |
|
|
(83,644 |
) |
|
|
(6,043 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reorganization items,
net |
|
|
— |
|
|
|
369,270 |
|
|
|
— |
|
|
|
426,816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes |
|
|
27,375 |
|
|
|
409,340 |
|
|
|
(20,546 |
) |
|
|
499,037 |
|
Income tax
provision |
|
|
442 |
|
|
|
2 |
|
|
|
9 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
26,933 |
|
|
$ |
409,338 |
|
|
$ |
(20,555 |
) |
|
$ |
499,037 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income Reconciliation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
26,933 |
|
|
$ |
409,338 |
|
|
$ |
(20,555 |
) |
|
$ |
499,037 |
|
Reorganization items,
net |
|
|
— |
|
|
|
(369,270 |
) |
|
|
— |
|
|
|
(426,816 |
) |
Postpetition interest
expense |
|
|
— |
|
|
|
85,338 |
|
|
|
— |
|
|
|
460 |
|
Contract settlement
expense |
|
|
— |
|
|
|
52,707 |
|
|
|
— |
|
|
|
— |
|
Unrealized loss (gain)
on commodity derivatives |
|
|
61,539 |
|
|
|
(8,367 |
) |
|
|
53,933 |
|
|
|
(21,585 |
) |
Other |
|
|
853 |
|
|
|
583 |
|
|
|
639 |
|
|
|
(80 |
) |
Adjusted net
income (2) |
|
$ |
89,325 |
|
|
$ |
170,329 |
|
|
$ |
34,017 |
|
|
$ |
51,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash
flow (1) (7)(8) |
|
$ |
196,453 |
|
|
$ |
261,744 |
|
|
$ |
84,432 |
|
|
$ |
112,464 |
|
(see non-GAAP
reconciliation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(5) |
|
$ |
270,447 |
|
|
$ |
291,279 |
|
|
$ |
122,156 |
|
|
$ |
141,889 |
|
(see non-GAAP
reconciliation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares (000's) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
196,803 |
|
|
|
130,770 |
|
|
|
197,054 |
|
|
|
180,964 |
|
Diluted |
|
|
196,803 |
|
|
|
131,078 |
|
|
|
197,054 |
|
|
|
181,033 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) -
basic |
|
$ |
0.14 |
|
|
$ |
3.13 |
|
|
$ |
(0.10 |
) |
|
$ |
2.76 |
|
Net income (loss)-
diluted |
|
$ |
0.14 |
|
|
$ |
3.12 |
|
|
$ |
(0.10 |
) |
|
$ |
2.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
earnings per share (2) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income -
basic |
|
$ |
0.45 |
|
|
$ |
1.30 |
|
|
$ |
0.17 |
|
|
$ |
0.28 |
|
Adjusted net income -
diluted |
|
$ |
0.45 |
|
|
$ |
1.30 |
|
|
$ |
0.17 |
|
|
$ |
0.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized
Prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural
gas ($/Mcf), excluding realized gain on commodity
derivatives |
|
$ |
2.39 |
|
|
$ |
3.00 |
|
|
$ |
2.11 |
|
|
$ |
2.85 |
|
Natural
gas ($/Mcf), including realized gain on commodity
derivatives |
|
$ |
2.48 |
|
|
$ |
2.99 |
|
|
$ |
2.28 |
|
|
$ |
2.84 |
|
Oil
liquids ($/Bbl), excluding realized gain on commodity
derivatives |
|
$ |
62.79 |
|
|
$ |
46.39 |
|
|
$ |
64.71 |
|
|
$ |
45.51 |
|
Oil
liquids ($/Bbl), including realized gain on commodity
derivatives |
|
$ |
59.31 |
|
|
$ |
46.39 |
|
|
$ |
58.24 |
|
|
$ |
45.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs Per Mcfe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease
operating expenses |
|
$ |
0.32 |
|
|
$ |
0.35 |
|
|
$ |
0.33 |
|
|
$ |
0.34 |
|
Facility
lease expense |
|
$ |
0.09 |
|
|
$ |
0.08 |
|
|
$ |
0.09 |
|
|
$ |
0.08 |
|
Production taxes |
|
$ |
0.29 |
|
|
$ |
0.33 |
|
|
$ |
0.27 |
|
|
$ |
0.32 |
|
Gathering
fees (net) |
|
$ |
0.27 |
|
|
$ |
0.32 |
|
|
$ |
0.26 |
|
|
$ |
0.31 |
|
Depletion
and depreciation |
|
$ |
0.71 |
|
|
$ |
0.54 |
|
|
$ |
0.73 |
|
|
$ |
0.58 |
|
General
and administrative - total |
|
$ |
0.10 |
|
|
$ |
0.20 |
|
|
$ |
0.03 |
|
|
$ |
0.37 |
|
Interest
expense (7) |
|
$ |
0.51 |
|
|
$ |
0.23 |
|
|
$ |
0.53 |
|
|
$ |
0.43 |
|
|
|
$ |
2.29 |
|
|
$ |
2.05 |
|
|
$ |
2.24 |
|
|
$ |
2.43 |
|
Adjusted
Margins |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Net Income Margin (3) |
|
|
21% |
|
|
|
39% |
|
|
|
17% |
|
|
|
24% |
|
Adjusted
Operating Cash Flow Margin (4)(7)(8) |
|
|
46% |
|
|
|
60% |
|
|
|
43% |
|
|
|
53% |
|
Adjusted
EBITDA Margin (6) |
|
|
64% |
|
|
|
67% |
|
|
|
62% |
|
|
|
67% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ultra Petroleum Corp.Supplemental
Balance Sheet DataAll amounts expressed in
US$000’s
|
|
As of |
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
|
(Unaudited) |
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
5,685 |
|
|
$ |
16,631 |
|
Long-term debt: |
|
|
|
|
|
|
|
|
Term
Loan, secured due 2024 |
|
|
972,563 |
|
|
|
975,000 |
|
6.875%
Senior Notes, unsecured due 2022 |
|
|
700,000 |
|
|
|
700,000 |
|
7.125%
Senior Notes, unsecured due 2025 |
|
|
500,000 |
|
|
|
500,000 |
|
Credit
Agreement |
|
|
58,000 |
|
|
|
— |
|
Long-term debt |
|
$ |
2,230,563 |
|
|
$ |
2,175,000 |
|
Less: Deferred
financing costs |
|
|
(54,155 |
) |
|
|
(58,789 |
) |
Total long-term
debt |
|
$ |
2,176,408 |
|
|
$ |
2,116,211 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Operating Cash Flow
and Net Cash Provided by Operating Activities
(unaudited)All amounts expressed in
US$000's
The following table reconciles net cash provided
by operating activities with operating cash flow as derived from
the Company’s financial information.
|
|
|
|
|
|
|
|
|
For the Six Months Ended |
|
|
For the Quarter Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Net cash
provided by operating activities |
|
$ |
205,781 |
|
|
$ |
136,461 |
|
|
$ |
53,785 |
|
|
$ |
(34,971 |
) |
Net
changes in operating assets and liabilities and other
non-cash or non-recurring items (7)(8) |
|
|
(9,328 |
) |
|
|
125,283 |
|
|
|
30,647 |
|
|
|
147,435 |
|
Operating
Cash Flow (1) |
|
$ |
196,453 |
|
|
$ |
261,744 |
|
|
$ |
84,432 |
|
|
$ |
112,464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Earnings before
Interest, Taxes, Depletion and Amortization
(unaudited)All amounts expressed in
US$000's
The following table reconciles net income (loss) as derived from
the Company's financial information with earnings before interest,
taxes, depletion, and amortization and certain other non-recurring
or non-cash charges (Adjusted EBITDA)(5):
|
|
For the Six Months Ended |
|
|
For the Quarter Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Net income
(loss) |
|
$ |
26,933 |
|
|
$ |
409,338 |
|
|
$ |
(20,555 |
) |
|
$ |
499,037 |
|
Interest expense |
|
|
73,552 |
|
|
|
114,872 |
|
|
|
37,715 |
|
|
|
29,425 |
|
Depletion and
depreciation |
|
|
102,282 |
|
|
|
70,427 |
|
|
|
51,742 |
|
|
|
38,673 |
|
Reorganization items,
net |
|
|
— |
|
|
|
(369,270 |
) |
|
|
— |
|
|
|
(426,816 |
) |
Contract settlement
expense |
|
|
— |
|
|
|
52,707 |
|
|
|
— |
|
|
|
— |
|
Unrealized (gain) loss
on commodity derivatives |
|
|
61,539 |
|
|
|
(8,367 |
) |
|
|
53,933 |
|
|
|
(21,585 |
) |
Deferred gain on sale
of liquids gathering system |
|
|
(5,276 |
) |
|
|
(5,276 |
) |
|
|
(2,638 |
) |
|
|
(2,638 |
) |
Stock compensation
expense |
|
|
10,122 |
|
|
|
26,264 |
|
|
|
1,311 |
|
|
|
25,413 |
|
Taxes |
|
|
442 |
|
|
|
2 |
|
|
|
9 |
|
|
|
— |
|
Houston office
relocation |
|
|
564 |
|
|
|
— |
|
|
|
564 |
|
|
|
— |
|
Other |
|
|
289 |
|
|
|
582 |
|
|
|
75 |
|
|
|
380 |
|
Adjusted EBITDA
(5) |
|
$ |
270,447 |
|
|
$ |
291,279 |
|
|
$ |
122,156 |
|
|
$ |
141,889 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company reports its financial results in
accordance with accounting principles generally accepted in the
United States of America ("GAAP"). However, management believes
certain non-GAAP performance measures may provide users of this
financial information with additional meaningful comparisons
between current results and the results of the Company’s peers and
of prior periods.
Management presents the following measures
because (i) they are consistent with the manner in which the
Company's performance is measured relative to the performance of
its peers, (ii) these measures are more comparable to earnings
estimates provided by securities analysts, and (iii) charges or
amounts excluded cannot be reasonably estimated and guidance
provided by the Company excludes information regarding these types
of items. These adjusted amounts are not a measure of financial
performance under GAAP.
(1)Operating Cash Flow is defined as Net cash
provided by operating activities before changes in operating assets
and liabilities and other non-cash items. Management believes that
the non-GAAP measure of operating cash flow is useful as an
indicator of an oil and gas exploration and production Company's
ability to internally fund exploration and development activities
and to service or incur additional debt. The Company has also
included this information because changes in operating assets and
liabilities relate to the timing of cash receipts and disbursements
which the Company may not control and may not relate to the period
in which the operating activities occurred. Operating cash flow
should not be considered in isolation or as a substitute for net
cash provided by operating activities prepared in accordance with
GAAP.
(2)Adjusted Net Income is defined as Net income
adjusted to exclude certain charges or amounts in order to exclude
the volatility associated with the effects of non-recurring
charges, non-cash mark-to-market gains or losses on commodity
derivatives, non-cash ceiling test impairments and other similar
items such as post- petition interest which represents interest
expense related to the prepetition debt agreements incurred as part
of our emergence from chapter 11 proceedings.
(3)Adjusted Net Income Margin is defined as
Adjusted Net Income divided by Total operating revenues plus
Realized gain (loss) on commodity derivatives, if any.
(4)Adjusted Operating Cash Flow Margin is
defined as Operating Cash Flow divided by Total operating revenues
plus Realized gain (loss) on commodity derivatives, if any.
(5)Earnings before interest, taxes, depletion
and amortization (Adjusted EBITDA) is defined as Net income (loss)
adjusted to exclude interest, taxes, depletion and amortization and
certain other non-recurring or non-cash charges. Management
believes that the non-GAAP measure of Adjusted EBITDA is useful as
an indicator of an oil and gas exploration and production Company's
ability to internally fund exploration and development activities
and to service or incur additional debt. Adjusted EBITDA
should not be considered in isolation or as a substitute for net
cash provided by operating activities prepared in accordance with
GAAP.
(6)Adjusted EBITDA Margin is defined as Adjusted
EBITDA divided by Total operating revenues plus Realized gain
(loss) on commodity derivatives, if any.
(7)For the quarter and six months ended June 30,
2017, excludes postpetition interest expense that represents
interest for the period beginning April 29, 2016 through April 12,
2017.
(8)For the quarter and six months ended June 30,
2017, reorganization items, net and contract settlement expense are
considered non-recurring items and are excluded from operating cash
flow.
(9)In conjunction with emergence from chapter 11
on April 12, 2017, the Company issued shares of New Equity to
holders of Existing Common Shares at a conversion ratio of
0.521562. As a result, the basic and fully diluted share counts
have been presented to reflect this conversion as if it had
occurred as of January 1, 2017.
About Ultra Petroleum
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 ticker symbol “UPL”.
Additional information on the Company is
available at www.ultrapetroleum.com. In addition, our filings with
the Securities and Exchange Commission (“SEC”) are available by
written request to Ultra Petroleum Corp. at 400 N. Sam Houston
Parkway E., Suite 1200, Houston, Texas 77060 (Attention: Investor
Relations) or on our website (www.ultrapetroleum.com) or from the
SEC on their website at www.sec.gov or by telephone request at
1-800-SEC-0330.
This news release includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Any statement, including any opinions,
forecasts, projections or other statements, other than statements
of historical fact, are or may be forward-looking statements.
Although the Company believes the expectations reflected in any
forward-looking statements herein are reasonable, we can give no
assurance that such expectations will prove to have been correct
and actual results may differ materially from those projected or
reflected in such statements. In addition, certain risks and
uncertainties inherent in our business as well as risks and
uncertainties related to our operational and financial results are
set forth in our filings with the SEC, particularly in the section
entitled “Risk Factors” included in the Company's most recent
Annual Report on Form 10-K for the most recent fiscal year, and
from time to time in other filings made by the Company with the
SEC. Some of these risks and uncertainties include, but are not
limited to, increased competition, the timing and extent of changes
in prices for oil and gas, particularly in the areas where we own
properties, conduct operations, and market our production, as well
as the timing and extent of our success in discovering, developing,
producing and estimating oil and gas reserves, our ability to
successfully monetize the properties we are marketing, weather and
government regulation, and the availability of oil field services,
personnel and equipment.
For further information
contact:Investor Relations303-708-9740, ext. 9898Email:
IR@ultrapetroleum.com
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