News Release: Ultra records its first earnings
Ultra Petroleum Corp UP
Shares issued 56,424,325 Nov 29 close $1.15
Mon 29 Nov 99 News Release
Mr. David Russell reports
Ultra Petroleum had net income of $205,682 for the quarter ending Sept. 30,
1999, marking an important milestone as it is the first time in Ultra's
history that earnings have been recorded. This compares with a net loss of
$1,433,171 for the quarter ending Sept. 30, 1998. Cash flow for the quarter
was $586,832 in 1999 as compared with ($1,345,583) in 1998 and EBITDA
(earnings before interest, income taxes, depreciation, depletion and
amortization) for the quarter was $738,063 in 1999 as compared with
($1,208,747) in 1998. The results from the quarter suggest that the company
has gained firm financial footing and is positioned to more effectively
build shareholder value going forward.
Quarter ended Sept. 30
1999 1998
Cash flow $ 586,832 $(1,345,583)
EBITDA (earnings
before interest,
income taxes,
depreciation,
depletion and
amortization) 738,063 (1,208,747)
Oil and gas
revenues 2,114,890 940,595
Gas production
(mmcf) 911 528
Condensate
production (bbl) 10,000 5,500
Gas prices (avg/mcf) $2.09 $1.65
Condensate prices
(avg/bbl) $20.78 $12.23
Direct lease
operating expenses
(unit basis) 12 cents 53 cents
Production taxes
/gathering fees 490,001 295,641
Total lease
operating expenses
(including
production taxes
and gathering
fees) (per mcfe) 62 cents 97 cents
General and
administrative
expense 753,366 1,438,354
Oil and gas revenues increased by 125 per cent. This was attributable to
improvement in product prices and increases in production during the
quarter. The 48-per-cent decrease in general and administrative expense for
the quarter ending Sept. 30, 1999, was primarily attributable to reduction
in staffing as part of the restructuring plan implemented during the second
half of fiscal year 1999. Depletion and depreciation expense for the
quarter increased to $444,088 in 1999 from $315,069 in 1998. This was
attributable to increased production. More importantly, on a unit basis,
the oil and gas depletion and depreciation rate fell to 45.7 cents per
thousand cubic foot equivalent in 1999 from 56.1 cents per mcfe in 1998.
This decline in the per mcfe depletion and depreciation rate was
attributable to the effects of reduced finding and development costs,
additions to reserves and ceiling test writedowns. The book value of oil
and gas properties was $35,674,815 at Sept. 30, 1999, compared with
$28,338,873 at Sept. 30, 1998. The components of this increase include the
costs of drilling additional wells, and the sale and writedown of oil and
gas properties.
During the quarter, Ultra carried out the first phases of the acquisition
of 77 square miles of three-dimensional seismic data covering the Mesa
project area on the northern end of the Pinedale anticline. The seismic
acquisition program operated by Ultra should be completed prior to the end
of 1999, with processing and interpretation to proceed immediately
thereafter. Ultra plans to have its priority development areas identified
and the relevant 3-D data interpreted prior to the upcoming drilling
season.
Ultra remains committed to leveraging emerging technologies to increase its
efficiency in exploration and development of its acreage position. Ultra
plans to use the winter months to re-evaluate existing data and interpret
the 3-D survey to identify and prioritize locations for the summer drilling
campaign that will yield the greatest impact on Ultra's equity value.
During the quarter, Ultra participated in the drilling of four gross wells.
Three of the wells drilled during the quarter were in the Mesa project area
and reached total depths of greater than 13,000 feet, cutting a substantial
Lance interval. These wells have been logged, cased and are currently
undergoing completions by their respective operators. The fourth well, an
exploration well at Ross Ridge to the north of the Jonah Field, on the
flanks of the Pinedale anticline, cut several thousand feet of
overpressured gas bearing Lance section, but was deemed non-commercial due
to lack of effective porosity. While encouraged by the presence of over
pressured gas in the well, Ultra's technical team recognizes the need to
integrate the information from this well with the existing data to better
its understanding of the depositional environment on the flanks of the
Pinedale anticline. The company is currently participating in two wells
operated by Anshutz that are drilling ahead and will reach total depth
prior to year end.
The draft Pinedale environmental impact statement was issued on Nov. 17,
1999, with the final version and record of decision expected by mid-April.
The final EIS will clarify the restrictions on drilling and other
activities on the Pinedale anticline and adjacent prospective areas,
leading to a clearer path for development of the Pinedale anticline gas
reserves. |
