Ultra Petroleum 2011 4th Quarter earnings – sees 15% growth
February 19, 2012
Below are highlights of Ultra Petroleum 2011 4th Quarter earnings report from Mr. Mike Watford, Chairman, President and CEO of Ultra Petroleum Corp on Thursday, February 16, 2012. Click on this link for the full transcript:
- Ultra Petroleum delivered solid results for the fourth quarter and full year 2011. We achieved double-digit growth in production, cash flow and earnings, and met or exceeded all of our targets for the year. We produced 245.3 Bcfe during 2011, a new company record, to achieve a 15% growth rate year-over-year. We also had a new production high of 616 million cubic feet per day in Wyoming and 188 million cubic feet per day in Pennsylvania, and are well on our way to exceeding 200 million a day in Pennsylvania.
- Partner delays: …In getting production on in the Marcellus. Additionally, in December, a compressor station fire and subsequent extended outage in Pinedale, as well as a force majeure event on the Ruby pipeline caused by a blocked valve.
- In spite of these events, our fourth quarter production rose 17% above our fourth quarter 2010 volumes. Our 2011 cash flow of $6.25 per share is an increase of 26% over the prior-year period, and our earnings of $2.52 per share is a 16% increase over the full year 2010.
- Ultra's cash cost for the year were $1.47 per Mcfe, and the total cash and noncash costs was $2.88 per Mcfe. These low costs helped drive our low breakeven levels and superior returns.
- Our net income breakeven is now $2.82 per Mcf, with cash flow breakeven of $1.15. Ultra generated a 73% cash flow margin, a 30% net income margin, a 31% return on equity and a 13% return on capital for 2011, all outstanding metrics regardless of the industry.
- In Wyoming, our fourth quarter Pinedale well results were in line with expectations, and year-to-date in 2012, we are receiving a benefit of moving to better areas of the field. The first 10 wells we have brought online so far averaged 9.4 million a day, with an average EUR in excess of 4.1 Bcfe.
- Capital expenditures in 2011: We exceeded our plan of $1.35 billion by about $180 million primarily due to higher than anticipated efficiency gains and productivity improvements in Wyoming, and significantly higher well costs in Pennsylvania.. As of 2012 capital expenditures…We see limited economic returns in the current natural gas pricing environment for new investments, and thus, see the little reason to grow. So we plan to reduce our net CapEx by 50% in 2012 to $725 million.
Source: http://seekingalpha.com/article/373271-ultra-petroleum-s-ceo-discusses-q4-2011-results-earnings-call-transcript Seeking Alpha