Ultra Petroleum’s 2Q16 production performance
Sequentially, Ultra Petroleum’s 2Q16 production is lower by ~3% when compared with 1Q16.
Ultra Petroleum’s 2Q16 production mix and realized prices
In 2Q16, Ultra Petroleum reported ~93% natural gas (UNG) in its production mix. For 2Q16, UPL’s average realized price for natural gas production decreased by ~47% to $1.76 per Mcf (thousand cubic feet) compared to $3.33 per Mcf for the same period in 2015.
Ultra Petroleum’s 2Q16 operational update
For 2Q16, the majority (or ~92%) of Ultra Petroleum’s production came from its Wyoming operations. In 2Q16, Ultra Petroleum drilled 25 gross (or 18 net) Wyoming Lance wells and placed into production 18 gross (or 15 net) wells.
According to UPL’s estimates, assuming well costs of $2.6 million per well, estimated ultimate recovery of 5.0 Bcfe, wellhead prices of $3.00 per Mcf for natural gas, and $42.63 per barrel for crude oil, the expected return for its Pinedale wells is ~58%.
Ultra Petroleum’s capital expenditure guidance
In 2Q16, Ultra Petroleum has increased its fiscal 2016 capital expenditure to $295 million, an increase of $35 million (or ~13%) from its previous capital expenditure guidance of $260 million.
UPL plans to use the additional capital from its increased budget to drill additional development wells in Wyoming and complete some of its already drilled but uncompleted wells in Utah.
Ultra Petroleum’s production guidance
Ultra Petroleum also increased its fiscal 2016 production guidance to a range of 277–284 Bcfe, a mid-point increase of 8 Bcfe (or ~3%) from its old production guidance of ~273 Bcfe.