Ultra Petroleum Continues Rapid Growth in Marcellus Shale Gas Drilling – Tioga PA Well Output 2x Initial Estimates

Ultra Petroleum’s growth continues to be double-digit, largely because of it’s Marcellus Shale gas drilling operations. From Ultra’s recent press release on first quarter activity we get the following Marcellus operational update:

During the first quarter, Ultra Petroleum and its partners drilled 31 gross (17 net) horizontal wells. As of March 31, 2011, Ultra and its partners have drilled 185 gross (111 net) horizontal wells since the program’s inception in 2009.

Ultra and its partners initiated production from 13 gross (8 net) new horizontal Marcellus wells during the first quarter of 2011. The average initial production rate for the wells brought online was 6.5 MMcf per day. At the end of the quarter, there were 105 gross (67 net) horizontal wells producing since the program’s inception in 2009.

In western Tioga County, Ultra drilled an extended lateral test to 6,700 feet during the first quarter. Subsequent to quarter-end, the Pierson 810-3H was completed with 27 frac stages and turned to sales at 10.0 MMcf per day. Similar to adjacent well estimates, preliminary results suggest the well’s estimated ultimate recovery (EUR) could exceed 8.0 Bcfe, over two times the company’s 3.75 Bcfe type curve for this area.

In western Lycoming County, the company brought online a 6-well pad in the first quarter with average per well initial production rates of 7.7 MMcf per day. These wells are demonstrating flatter declines and significantly stronger performance compared to Ultra’s conservative 5.0 Bcfe type curve for this area.

At the end of the first quarter, Ultra’s inventory of wells either waiting on completion or awaiting pipeline connection was 80 gross (44 net) wells. Ninety percent of this year’s expected well startups will occur in the remaining nine months of the year with 148 gross (75 net) horizontal Marcellus wells online by the end of 2011. For the year, Ultra anticipates its total Pennsylvania production will grow 2.5 times the company’s 2010 Pennsylvania annual volumes.*

*Ultra Petroleum Press Release (May 6, 2011) – Ultra Petroleum Reaches 1 Tcfe Cumulative Production Milestone, Generates Strong Cash Flow and Earnings, and Delivers Exceptional Returns for First Quarter 2011