Ultra Petroleum (UPL) held a conference call on February 12, 2010, to discuss its fourth quarter of 2009 earnings report. The company has a large amount of future proved reserves accruing on its Marcellus Shale acreage in Pennsylvania. Ultra Petroleum has also published an updated production curve based on 13 Marcellus shale wells.
Marcellus Shale Reserves
“We added 1,638 gross Marcellus horizontal locations to our 3P database this year. Each of these locations have a planned drilling unit that are incorporated into our development plans. Using a 100 acre spacing per well, our 3P reserves in Pennsylvania correspond to 164,000 gross acres or only ½ of our Marcellus acreage at year-end 2009.”
“Ultra’s 3P reserves are reported using a $6 gas price and a $60 oil price. At these prices the pre-tax PV 10 value for the 1P reserves is $7.9 billion. For the 2P reserves this value is $12.1 billion. For the 3P reserves the pre-tax PV 10 value is $16.5 billion.”
Marcellus Shale Estimated Ultimate Recovery
“A preliminary ultimate recovery estimate for these wells was the type curve used in our Marcellus models which yields an expected EUR per well of 3.75 BCFE with early performance of some wells indicating EURs in excess of 6 BCFE.”
“The results of our wells in 2009 affirm our 3.75 BCF type curve for our current Marcellus acreage. The 13 well average actually exceeding our type curve.”
Source: Seeking Alpha