Natural gas producer,
Ultra Petroleum Corporation
), reported better-than-expected second-quarter 2013 results,
mainly due to significant increase in natural gas prices.
Earnings per share, excluding special items, came in at 47 cents,
breezing past the Zacks Consensus Estimate of 43 cents.
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However, comparing year over year, Ultra Petroleum's adjusted
earnings per share declined 7.8% (from 51 cents to 47 cents) on
Total operating revenue, at $261.4 million, was above the Zacks
Consensus Estimate of $240.0 million and was also up by 53.5% as
compared to the year-ago period.
Production during the quarter was down 10.3% to 58.4 billion
cubic feet equivalent (Bcfe) against the prior year's production
of 65.1 Bcfe. Natural gas volumes - accounting for approximately
96.9% of the total production - were down 10.2% to 56.6 billion
cubic feet (Bcf). Oil production dropped 10.0% year over year to
Ultra Petroleum's average realized price on natural gas rose
86.1% to $4.15 per thousand cubic feet (Mcf). The average oil
price for the reported quarter reached $88.90 per barrel,
marginally above the second-quarter 2012 figure of $88.52 per
Costs, Expenses & Margins
Lease operating expense rose 43.1% from the prior-year quarter to
$17.5 million. During the second quarter of 2013, Ultra Petroleum
reported all-in costs of $2.88 per Mcfe, down 8.9% from the
comparable quarter last year. Ultra Petroleum's competitive cost
structure enabled it to achieve a 56% cash flow margin and a 30%
net income margin.
As of Jun 30, 2013, Ultra Petroleum had cash and cash equivalents
of $6.6 million and long-term debt of $1.9 billion.
Ultra Petroleum expects full-year 2013 production of 230-236
Bcfe, and third-quarter 2013 production of 56.0-58.5 Bcfe.
Ultra Petroleum currently retains a Zacks Rank #3 (Hold),
implying that it is expected to perform in line with the broader
U.S. equity market over the next 1 to 3 months.
Meanwhile, one can look at exploration and production firms like
Range Resources Corporation
VOC Energy Trust
Clayton Williams Energy Inc.
) that offer value. All the stocks currently retain a Zacks Rank
#1 (Strong Buy).