Natural gas producer
Ultra Petroleum Corporation
) reported mixed third-quarter 2012 results, reflecting better
margin and a drop in production taxes and gathering fees,
partially offset by less liquids volume.
CABOT OIL & GAS (COG): Free Stock Analysis
ULTRA PETRO CP (UPL): Free Stock Analysis
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Earnings per share, excluding special items, came in at 64 cents,
moving ahead of the Zacks Consensus Estimate of 51 cents.
However, compared with the year-earlier period, Ultra Petroleum's
adjusted earnings per share declined 11.1% from 72 cents,
impacted by a weak natural gas price scenario.
Total operating revenue, at $196.4 million, was well below the
Zacks Consensus Estimate of $275.0 million and year-ago level of
Production during the quarter remained almost in line at 63.1
billion cubic feet equivalent (Bcfe). Natural gas volumes -
accounting for approximately 97.0% of the total - were up
marginally to 61.1 billion cubic feet (Bcf). Oil production
dropped 20.6% year over year to 309,573 barrels.
Ultra Petroleum's average realized price on natural gas fell
35.4% to $2.77 per thousand cubic feet (Mcf). Including commodity
derivative gains/losses, average realized natural gas price for
the quarter was $4.13 per Mcf, down 20.1% from the prior-year
level. The average oil price for the reported quarter reached
$86.51 per barrel, higher than the third-quarter 2011 figure of
$79.45 per barrel.
Costs, Expenses & Margins
Lease operating expense rose 34.7% from the prior-year quarter to
$16.7 million. During the third quarter of 2012, the company
reported all-in costs of $2.88 per Mcfe, up 3.6% from the
comparable quarter last year. Ultra Petroleum's competitive cost
structure enabled it to achieve a 67% cash flow margin and a 35%
net income margin.
As of September 30, 2012, the company had cash and cash
equivalents of $59.2 million and long-term debt of $2.2 billion.
Ultra Petroleum expects its full-year 2012 production in the
range of approximately 250-260 Bcfe, implying an increase of 2%
to 6% from the 2011 level.
Another natural gas firm
Cabot Oil & Gas Corporation
) reported strong third-quarter 2012 results of 21 cents,
breezing past the Zacks Consensus Estimate of 15 cents. Cabot's
performance also improved considerably from the year-ago adjusted
profit of 17 cents per share.
Ultra Petroleum currently retains a Zacks #2 Rank (short-term Buy
rating). The company seems well positioned to sustain the strong
growth momentum for quite some time based on its impressive
exposure to the high-return Marcellus Shale play, Green River
Basin of Wyoming, Jonah natural gas field and the Pinedale