Financial Checkup for Marcellus/Utica Drillers

RBN Energy, headed by founder Rusty Braziel (co-founder of Bentek Energy), is, in our opinion, the premier oil and gas analytics firm out there. Smart people working at RBN. And they offer up some amazing content on their blog site–for free! At least it’s free for a while, then it goes behind a paywall. A few days ago RBN published a blog post on the financial health for the 44 major publicly-traded U.S. exploration and production companies (drillers). RBN groups them into three categories: Oil-Weighted, Diversified, and Gas-Weighted. We found the Gas-Weighted list of 10 companies and the information revealed about them to be fascinating and worth studying. Each of the companies has major operations in the Marcellus/Utica–some of them totally focused on our region. Among the data points shared: revenue, production costs, lifting costs and more. We think of the following as a handy financial health scorecard/checkup for 10 of the biggest drillers in the M-U, including Antero Resources, Cabot Oil & Gas, Chesapeake Energy, CNX Resources, EQT, Gulfport Energy, National Fuel Gas (Seneca Resources), Range Resources, Southwestern Energy, and Ultra Petroleum…
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Ultra Petroleum Sells Its 72K Marcellus Acres to Alta Res. for $115M

Ultra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a “non-operated” (someone else does the drilling) position in the Pennsylvania Marcellus shale with leases on 72,000 net acres–no small amount. As recently as May of this year Ultra CEO Michael Watford signaled that the Marcellus acreage is not a drain on their budget, so they would just hold on to it and see what happens (see Ultra Petroleum 1Q17 – Holding on to 72K Marcellus Acres, for Now). What happened is the company saw an opportunity to cash in that acreage, and the wells producing on it, for $115 million in cold, hard cash that they can use elsewhere. Ultra announced a deal yesterday to sell all of their Marcellus acreage/wells, mostly located in Centre and Clinton counties in north-central PA, to Alta Resources. Alta is not a name we’ve seen a lot, but they were one of the first drillers we wrote about just after starting the MDN website back in 2009 (see Texas Billionaire George Mitchell is Betting on the Marcellus in PA). George Mitchell, widely recognized as the father of shale energy, was a partner in Alta and had glowing things to say about the Marcellus. Mitchell died in 2013. His legacy lives on. According to Alta’s website, the company has drilled or participated in more than a thousand wells–in Arkansas, Texas, Louisiana, Alabama, Pennsylvania and Alberta, Canada. The most recent news related to Alta in our area, prior to yesterday’s announcement, was their purchase of Anadarko’s Marcellus assets for $1.24 billion in December 2016 (see Anadarko Sells All Marcellus Assets for $1.24B to Alta Resources). Seems like December is the month to watch for an Alta purchase in the Marcellus!…
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Ultra Petroleum Not Out of Woods Yet, Corp Raider Fir Tree Attacks

Ultra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a “non-operated” (someone else does the drilling) position in the Pennsylvania Marcellus shale with leases on 72,000 net acres–no small amount. One year ago, in April 2016, Ultra filed for Chapter 11 bankruptcy (see Ultra Petroleum (with 184K Marcellus Acres) Files for Bankruptcy). A year later, Ultra announced it has emerged from bankruptcy, raising nearly $3 billion to pay back creditors and floating 195 million shares of new stock (see Ultra Petroleum Does Bankruptcy Right, Exits with Higher Value). We thought Ultra was out of the woods, now on a strong footing. But perhaps not. Yesterday a loathsome corporate raider, Fir Tree Partners, announced it’s intention to “immediately engage with Company management to pursue value-maximizing strategic alternatives for UPL.” UPL is Ultra’s stock ticker acronym. Unfortunately for Ultra, Fir Tree is their largest stockholder. As a quick reminder for those new to MDN, corporate raiders (these days renamed to “activist investors”) take a major position in a company so they can pressure the company into firing hundreds (or thousands), and selling off assets, in order to make the company look better on paper. Once the company looks better, the share price goes up and the raider sells its stock in the target company, taking a big profit and moving on to the next target. It’s disgusting. And now it’s happening to Ultra…
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Ultra Petroleum 1Q17 – Holding on to 72K Marcellus Acres, for Now

Ultra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a “non-operated” (someone else does the drilling) position in the Pennsylvania Marcellus shale with leases on 72,000 net acres–no small amount. One year ago, in April 2016, Ultra filed for Chapter 11 bankruptcy (see Ultra Petroleum (with 184K Marcellus Acres) Files for Bankruptcy). A year later, Ultra announced it has emerged from bankruptcy, raising nearly $3 billion to pay back creditors and floating 195 million shares of new stock (see Ultra Petroleum Does Bankruptcy Right, Exits with Higher Value). The company is worth more today than when it entered bankruptcy. Talk about engineering a turnaround! Ultra shows other E&Ps how to do a bankruptcy “right.” A few weeks back Ultra issued its first quarter 2017 update. While the official update itself doesn’t mention Ultra’s Marcellus acreage, the earnings call did. We learn more about Ultra’s attitude and future plans for their Marcellus holdings from comments made by Ultra CEO Michael Watford. We also get more details about the company’s Marcellus holdings from the accompanying slide deck used during the earnings call…
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Ultra Petroleum Does Bankruptcy Right, Exits with Higher Value

Ultra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a position in the Pennsylvania Marcellus shale with leases on 184,000 gross (91,000 net) acres–no small amount. They aren’t currently drilling on their Marcellus acreage, but it’s a good bet they will at some point. One year ago, in April 2016, Ultra filed for Chapter 11 bankruptcy (see Ultra Petroleum (with 184K Marcellus Acres) Files for Bankruptcy). Shareholders tried to get an official equity committee approved to protect their interest, but that effort failed when the trustee denied the motion. So equity holders (i.e. stockholders), with the aid of Ultra’s management (who happen to be stockholders themselves), adopted a new strategy: wait them out. Management asked for an extension to file their bankruptcy plan, which would put a plan filing date out to spring of this year (see Ultra Petroleum Trying to Force Debtholders to Deal re Bankruptcy). Ultra didn’t want to go the way so many other oil and gas companies have gone–by wiping out existing shareholder’s stock value and handing the keys of the company to the debtholders. Ultra’s strategy was to use time against debtholders as a tactic to force them to the table to deal. It worked. In November 2016, Ultra announced a deal supported by a full two-thirds of outstanding debtholders and plans to move forward (see Ultra Petroleum Gets 67% Debtholders to Agree to Bankruptcy Plan). Ultra announced yesterday it has emerged from bankruptcy, raising nearly $3 billion to pay back creditors and floating 195 million shares of new stock. The company is worth more today than when it entered bankruptcy. Talk about engineering a turnaround! Ultra shows other E&Ps how to do a bankruptcy “right”…
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Ultra Petroleum 2016 Update – Will Exit Bankruptcy by April

Ultra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a position in the Pennsylvania Marcellus shale with leases on 184,000 gross (91,000 net) acres–no small amount. They aren’t currently drilling on their Marcellus acreage, but if prices change, they likely would. At the end of April Ultra filed for Chapter 11 bankruptcy (see Ultra Petroleum (with 184K Marcellus Acres) Files for Bankruptcy). Shareholders tried to get an official equity committee approved to protect their interest (see Update on Ultra Petroleum Bankruptcy). That effort failed–the trustee denied the motion. So equity holders (stockholders), with the aid of Ultra’s management (who happen to be stockholders themselves) adopted a new strategy: wait them out. Management asked for an extension to file their bankruptcy plan, which would put a plan filing date out to spring 2017 (see Ultra Petroleum Trying to Force Debtholders to Deal re Bankruptcy). It seems that management is using time against debtholders as a tactic to force them to the table to deal–and they did it. Ultra announced in November it has a deal supported by a full two-thirds of outstanding debtholders and plans to move forward (see Ultra Petroleum Gets 67% Debtholders to Agree to Bankruptcy Plan). Yesterday Ultra issued an update for 2016 and regarding the bankruptcy–they are on track to emerge from bankruptcy by early April…
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Ultra Petroleum Gets 67% Debtholders to Agree to Bankruptcy Plan

Ultra PetroleumUltra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a position in the Pennsylvania Marcellus shale with leases on 184,000 gross (91,000 net) acres–no small amount. They aren’t currently drilling on their Marcellus acreage, but if prices change, they likely would. At the end of April Ultra filed for Chapter 11 bankruptcy (see Ultra Petroleum (with 184K Marcellus Acres) Files for Bankruptcy). Shareholders tried to get an official equity committee approved to protect their interest (see Update on Ultra Petroleum Bankruptcy). That effort failed–the trustee denied the motion. So equity holders (stockholders), with the aid of Ultra’s management (who happen to be stockholders themselves) adopted a new strategy: wait them out. Management asked for an extension to file their bankruptcy plan, which would put a plan filing date out to next spring (see Ultra Petroleum Trying to Force Debtholders to Deal re Bankruptcy). It seems that management is using time against debtholders as a tactic to force them to the table to deal–and they’ve now done it. Ultra announced last week it has a deal supported by a full two-thirds of outstanding debtholders and plans to move forward. Unlike other o&g companies forced into bankruptcy, Ultra is not wiping out existing shareholders under their restructuring deal…
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Ultra Petroleum Trying to Force Debtholders to Deal re Bankruptcy

Ultra PetroleumUltra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a position in the Pennsylvania Marcellus shale with leases on 184,000 gross (91,000 net) acres–no small amount. They aren’t currently drilling on their Marcellus acreage, but if prices change, they likely would. That is, if they make it through bankruptcy. At the end of April Ultra filed for Chapter 11 bankruptcy (see Ultra Petroleum (with 184K Marcellus Acres) Files for Bankruptcy). Shareholders tried to get an official equity committee approved to protect their interest (see Update on Ultra Petroleum Bankruptcy). That effort failed–the trustee denied the motion. So equity holders (stockholders), with the aid of Ultra’s management (who happen to be stockholders themselves) have adopted a new strategy: wait them out. Management has asked for an extension to file their bankruptcy plan, which would put a plan filing date out to next spring. It seems that management is using time against debtholders as a tactic to force them to the table to deal…
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List of 85 Bankrupt O&G Companies Since 2015; 4 in Marc/Utica

Haynes BooneIn November 2015 MDN brought you a list of 36 North America drillers that had, as of that time, declared bankruptcy (see List of 36 Oil & Gas Companies that Filed for Bankruptcy in 2015). In April, just three short months ago, the list stood at 59 bankruptcies (see List of 59 Oil & Gas Companies Filing for Bankruptcy in 2015/2016). The law firm compiling the list, Haynes and Boone, keeps updating the list. The most recent version was issued on June 30 and it shows the list growing to 85 declared bankruptcies, with more on the way. As of April we noted there was only one Marcellus/Utica driller on the list–Magnum Hunter Resources–which has since emerged from Chapter 11 and is once again up and running. However, in the latest list of 85 bankruptcies, we now must add three more companies with operations in the Marcellus/Utica…
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Update on Ultra Petroleum Bankruptcy

Ultra PetroleumUltra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a position in the Pennsylvania Marcellus shale with leases on 184,000 gross (91,000 net) acres–no small amount. They aren’t currently drilling on their Marcellus acreage, but if prices change, they likely would. That is, if they make it through bankruptcy. At the end of April Ultra filed for Chapter 11 bankruptcy (see Ultra Petroleum (with 184K Marcellus Acres) Files for Bankruptcy). Some shareholders are trying to get an official equity committee approved to protect their interest. Will they succeed? Here’s the latest on the Ultra bankruptcy as it progresses…
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Ultra Petroleum (with 184K Marcellus Acres) Files for Bankruptcy

Ultra PetroleumUltra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a position in the Pennsylvania Marcellus shale with leases on 184,000 gross (91,000 net) acres–no small amount. They aren’t currently drilling on their Marcellus acreage, but if prices change, they likely would. That is, if they make it through bankruptcy. On Friday Ultra filed for Chapter 11 bankruptcy protection in Houston. The company listed $1.28 billion in assets and $3.92 billion in debt. One (we would say stupid) investor owns a whopping $1.46 billion in unsecured IOUs (i.e. notes) from Ultra. Good luck with getting that paid. Here’s the low down on Ultra’s bankruptcy filing…
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Ultra Petroleum Threatened with NYSE De-listing

It’s been a while since we’ve written anything about Ultra Petroleum. Ultra is an independent exploration and production (E&P) company focused on drilling in the Green River Basin of Wyoming–in the Pinedale and Jonah Fields. In addition, Ultra is currently drilling for oil in the Uinta Basin/Three Rivers area in Utah. However, our interest in Ultra is because they maintain a position in the Pennsylvania Marcellus shale with leases on 184,000 gross (91,000 net) acres. They aren’t currently drilling on their acreage, but if prices change, they likely will. The news we bring you about Ultra is news we’ve brought you about other companies, like Atlas Energy (see today’s story on Atlas). And that news is that the New York Stock Exchange has threatened Ultra with de-listing its stock if the price is not boosted to over $1 per share…
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After Selling 208K Marcellus Acres, Shell “Buys” 155K More Acres!

GyrationIn a seemingly strange twist, Shell has just picked up more Marcellus and Utica Shale acreage. Say what? Yesterday MDN told you that Rex Energy just bought 208,000 Marcellus acres from Shell in southwest Pennsylvania’s wet gas area (see Rex Energy Takes Shell to the Cleaners – Picks up 208K Acres). We pointed out that many majors like Shell seem to have a hard time turning a buck in American shale plays, and that Shell CEO Ben van van Beurden had warned of scaling back their shale operations. So what happened a day later? Shell further divested itself of both conventional and unconventional holdings–this time in Wyoming and Louisiana. As part of the same deal, the picked up new Marcellus acreage (155,000 acres) in Pennsylvania’s dry gas area. Let’s try to sort through these Shell gyrations…
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Rogue Obama EPA Goes on Methane Witch Hunt

The recent Climate Action Plan to cut methane emissions emitted by the White House last week contains this ominous bullet point: “EPA will assess several potentially significant sources of methane and other emissions from the oil and gas sector. EPA will solicit input from independent experts through a series of technical white papers, and in the fall of 2014, EPA will determine how best to pursue further methane reductions from these sources.”(1) The good news is that the overbearing, out-of-control actions by the Obama EPA will only apply to drilling on federal lands. The bad news is that they will try to bully individual states to adopt the same new onerous regulations, thereby making federal regulations de facto in many locations.

Will the EPA methane witch hunt affect the Marcellus and Utica region? Too early to tell whether PA, OH and WV will cave to Obama EPA pressure. Here’s an analysis of how onerous new regulations may affect several drillers with major operations in the Marcellus…
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Who’s a Member of the Marcellus “1 Bcf/d” Club?

1 bcfd club At the end of an article about EQT, Seeking Alpha blogger and energy analyst Richard Zeits includes a short list of companies who either already belong, or soon will join, the “1 billion cubic feet per day club” of Marcellus Shale gas production.

So far only one driller has achieved 1 Bcf/d of Marcellus production (quick, which one is it?). EQT will likely join the club in 2014. Who else is on the short list to join them? Read on to find out…

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Ultra Petroleum Marcellus Production in PA Jumps 321%

Ultra Petroleum, an independent energy company headquartered in Houston, TX, reports a major ramp-up in Marcellus Shale gas drilling and production for the second quarter of 2011. Ultra says their Marcellus net production increased 321 percent over the second quarter of 2010. Since Ultra started drilling in the Marcellus Shale in 2009, they have drilled 235 gas wells in Pennsylvania’s Marcellus Shale. All of Ultra’s Marcellus drilling (so far) has been in PA.

Ultra’s PA Marcellus operational update (from their quarterly report):

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