Natural gas producer,
Ultra Petroleum Corporation
), is set to offer senior unsecured notes worth $400.0 million.
The company added that the notes, anticipated to mature by 2018,
will be offered to a few selected investors.
The net proceeds from the notes offering are expected to be
utilized to partly finance Ultra Petroleum's acquisition of Uinta
On Oct 21, 2013 Ultra Petroleum entered into a definitive
contract for acquiring 100% working interest in oil-producing
assets, based in Uinta Basin, northeast Utah, from an undisclosed
seller. The $650 million deal is expected to close by Dec 2013,
dependent on customary closing conditions.
At the time of the deal, the Uinta Basin acreage consisted of 38
operating wells that generated roughly 4,000 barrels of oil each
day. Management anticipates strong earnings from the assets even
if oil prices drop to below $75 per barrel.
Houston, Texas-based Ultra Petroleum is engaged in the
acquisition, development, exploration and production of oil and
gas properties. The company's operations are mostly concentrated
in the Green River Basin of southwest Wyoming, mainly covering
the Pinedale and the Jonah fields. The firm also holds impressive
acreage in the north-central Pennsylvania area of the Appalachian
Moreover, Ultra Petroleum has amassed a large acreage position in
the prolific Marcellus Shale play, a key natural gas drilling
area located throughout Western Pennsylvania and much of the
Appalachian Basin. This provides the company with a multi-year
inventory of low-risk development drilling opportunities.
However, Ultra Petroleum's high natural gas exposure raises its
sensitivity to gas price fluctuations, compared to its
more-diversified independent peers with higher oil
Ultra Petroleum holds a Zacks Rank #3 (Hold), implying that it
is expected to perform in line with the broader U.S. equity
market over the next one to three months.
ABRAXAS PETE/NV (AXAS): Free Stock Analysis
HARVEST NATURAL (HNR): Free Stock Analysis
SM ENERGY CO (SM): Free Stock Analysis Report
ULTRA PETRO CP (UPL): Free Stock Analysis
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Meanwhile, some better-ranked players in the oil and gas
exploration and production sector include
Abraxas Petroleum Corp.
Harvest Natural Resources Inc.
SM Energy Co.
). All these stocks sport a Zacks Rank #1 (Strong Buy).