Ultra Petroleum Corp. (NYSE:UPL) Q3 2018 Earnings Conference Call Transcript

Nov 08, 2018 • 09:00 am ET


Ultra Petroleum Corp. (NYSE:UPL) Q3 2018 Earnings Conference Call Transcript


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Good day, ladies and gentlemen, and welcome to the Ultra Petroleum Corp. Third Quarter 2018 Earnings Conference Call.

(Operator Instructions) As a reminder, this conference call may be recorded.

I would now like to turn the conference over to Aaron Bedeford (ph). You may begin.

Unidentified Speaker

Thanks, operator. Earlier this morning, we included in our news release results for the third quarter and updates for 2018. In this call, we will provide additional information with our prepared remarks along with reference to our updated investor presentation that was posted earlier today on our website.

(Forward-Looking Cautionary Statements)

Thank you all for joining us today. With me on the call is Brad Johnson, our interim CEO; Garland Shaw, our CFO; and Jay Stratton, our COO.

Now I'll turn the call over to Brad.

Brad Johnson

Thanks, Aaron. Good morning, and welcome to Ultra Petroleum's third quarter conference call. Today, we will review the quarter's financial results, summarize our development activities in Pinedale and provide updated guidance for full year 2018. In addition to sharing our third quarter results today, we are very pleased to announce the appointment of 2 new senior executives to our team. David Honeyfield will be joining Ultra as CFO; and Andrew Kidd will be joining as General Counsel.

Mr. Honeyfield brings over 25 years of experience to our executive team, having previously served as CFO for 3 successful upstream E&P companies: PDC Energy, Jonah Energy and SM Energy as well as President and CFO of Intrepid Potash Inc. and other natural resource company. Mr. Kidd brings nearly 30 years of experience to Ultra, including serving as an independent Director for public and private corporations; GC, President CEO of Samsung Resources; and General Counsel for Quantum Utility Generation, Anthem Energy, and Constellation Energy Resources. These 2 appointments complete my efforts to build out a very accomplished, well-respected and high-performing executive team based here in Denver. With our new executive team in place and a transition of Ultra's headquarters to Denver complete, along with the hyper focus on enhancing the value of our world-class assets on Pinedale, we are positioned for tremendous success in the future.

Slide 4 provides a list of highlights for the quarter. Production for 3Q 2018 average 734 million cubic feet equivalent per day, driven by very good run times on our base production and good results from vertical wells brought online during the quarter. EBITDA for the quarter totaled $120 million and cash cost totaled just over $1 per Mcfe.

As we discussed last quarter, we adjusted our capital budget for the second half of 2018 to focus more on vertical wells. In late July, we reduced our operating rig count from 4 to 3 and resumed drilling on pads solely dedicated to vertical development. As a result, we brought online 19 operating wells with an average 24 hour IP of 7.4 million cubic feet equivalent per day. Third quarter wells are tracking the midpoint of recent historical averages. We expect to see continued strong results from our