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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Anti-Drilling Group PennFuture Sues Ultra Resources Claiming Air Pollution from Gas Wells, Compressor Stations and Pipelines

Anti-drilling group PennFuture is suing driller Ultra Resources claiming they are causing air pollution from almost all of their operations. A copy of the lawsuit filed in U.S. District Court for the Middle District of Pennsylvania is embedded below.

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What We Learn from Financial Statements About Future Plans for Drilling in the Marcellus Shale

Reading financial statements by corporations is about as fun as watching paint dry—but hey, someone has to do it. We do learn important tidbits of news from drilling companies about their recent activities, and more importantly, what they are planning for the coming year. Henceforth, a few gleanings from some recent financial statements.

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Group of Investment Managers Target Drilling Companies Who Use Hydraulic Fracturing

godfatherA group of investment managers who belong to an organization called The Investor Environmental Health Network have banded together (some might call it collusion) to put pressure on energy companies who engage in natural gas drilling by using hydraulic fracturing. Their aim? To stop fracking of course, but that’s not what they say in their press statement. They’re just little ‘ole investors encouraging companies to “do the right thing” …
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Ultra Petroleum Expands Marcellus Leases to 486,000 Acres and 110 Active Wells in 2010

Ultra Petroleum News Release (Feb 12)
Ultra Petroleum Reports Strong Financial and Operating Results and Record Production for 2009

A portion of the release relating to its operations in the Marcellus in PA is extracted below:

During 2009, Ultra drilled 37 gross (22.5 net) wells in Pennsylvania. The company’s first production in the Marcellus program began in July 2009, and by year-end 13 wells were producing. Initial production (IP) rates for the producing wells average 7,500 Mcf per day with an average lateral length of just over 3,800 feet. Preliminary estimated ultimate recoveries affirm Ultra’s 3.75 Bcfe type-curve, with some preliminary EURs exceeding 6.0 Bcfe. The cost to drill and complete a horizontal Marcellus well during 2009 was $3.5 million.

The company’s four pipeline interconnects to major interstate pipelines remain well ahead of the drilling campaign. By mid-year, this interconnect capacity is expected to exceed 560 MMcf per day.

The company began 2009 with 288,000 gross (152,000 net) acres in the Marcellus. Through a combination of land acquisitions, trades and swaps, Ultra increased its holdings to 326,000 gross (169,000 net) acres by year-end. On December 21, 2009, Ultra announced that it had signed a purchase and sale agreement to acquire approximately 160,000 gross (80,000 net) acres in the Marcellus Shale. Upon closing of the acquisition in late February 2010, the company will hold approximately 486,000 gross (249,000 net) acres. With the acquisition, the company’s core position in Tioga, Bradford, Lycoming, and Potter counties in north-central Pennsylvania will expand to include the adjacent counties of Clinton and Centre.

In 2009, we initiated our horizontal Marcellus activity with above expectation results. Accordingly, we believe that we have substantially de-risked our Marcellus acreage due to these results. Well performance is improving along with our returns. Of the horizontal wells that we have completed so far, IP rates have ranged from over 3,400 Mcf per day to 10,400 Mcf per day, including two wells that are producing over 7,500 Mcf per day after 30 days. Examining our early wells, the first six have 30-day production averaging over 3,000 Mcf per day with the next seven wells averaging over 5,700 Mcf per day. In 2010, our Marcellus development program will expand with a drilling program exceeding 110 wells.