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Ultra Petroleum Releases FY17 Operational & Financial Updates

Upstream player Ultra Petroleum Corp UPL has released its operational and financial updates for fiscal 2017.

Ultra Petroleum expects higher production in third quarter compared with the numbers in preceding quarter. The company’s net daily production as of Sep 15, 2017, was 796 million cubic feet equivalent (MMcfe) per day, up 8% compared with an average of 738 MMcfe per day during the second quarter of 2017.

Beginning Jul 1, 2017 to Sep 15, 2017, the company drilled 48 gross operated wells and brought online 41 gross operated wells. During the second quarter of 2017, 43 gross operated wells were drilled and 39 gross operated wells were commissioned.

Since Jun 30, 2017, total days per well averaged 10.4 days, compared with 11.4 days in the second quarter of 2017. It was calculated by considering rig-release to rig-release days. A new drilling record was set by Ultra Petroleum on Sep 5, 2017, measured in terms of spud to total depth (TD) of 6.27 days compared with 9.4 days during the second quarter of 2017.

On Aug 20, 2017, Ultra Petroleum drilled Lower Lance “A”, a two mile horizontal well to reach TD of 22,483’ on Sep 17, 2017 with a lateral of 10,228’. The well was 100% spud in the target zone. Throughout the lateral, the company hit considerable sand and gas shows. Scheduled to be concluded during the first week of October 2017, the well will be completed in projected 45 frac stages. During the fourth quarter of 2017, the company plans to drill two additional horizontal wells.

The bank group of Ultra Petroleum has given consent to an increase in the borrowing base under its senior secured credit facility to $1.4 billion from $1.2 billion. Consequently, the company intends to increase its existing secured, floating rate term loan by $175 million. However, net debt remains unchanged as the proceeds will be used to reduce the revolving credit facility. This transaction has total commitments of $425 million and is anticipated to be concluded next week.

Price Movement

The company’s shares have decreased 9.4% compared with the industry’s gain of 3.4% over the last three months.


Zacks Rank & Key Picks

Currently, Ultra Petroleum carries a Zacks Rank #5 (Strong Sell). A few better-ranked players in the energy sector include TransCanada Corporation TRP, Transmontaigne Partners LP TLP and SolarEdge Technologies, Inc SEDG. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.  

Headquartered in Calgary, Canada, TransCanada is a midstream energy firm in North America. The company delivered an average positive earnings surprise of 4.06% over the last four quarters.

Transmontaigne, headquartered in Denver, CO, involves in transporting and storing refined petroleum products. The firm delivered an average positive earnings surprise of 6.60% over the last four quarters.

Headquartered in Herzliya, Israel, SolarEdge Technologies designs, develops and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations in Israel, Europe, the United States and internationally. The company delivered an average positive earnings surprise of 21.72% over the last four quarters.

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