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Ultra Petroleum Gains on Q1 Earnings Beat, Raised Outlook - Analyst Blog

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On Apr 30, Ultra Petroleum CorporationUPL reported first-quarter 2015 results. Shares of the company have gained nearly 9% since then due to the earnings beat and increased production guidance.

The natural gas producer reported adjusted earnings of 14 cents per share, easily surpassing the Zacks Consensus Estimate of 5 cents per share. Increase in production volumes supported the results.

However, the bottom line was significantly lower than the year-ago quarter adjusted earnings of 89 cents. A substantial fall in realized prices hampered the results.

Ultra Petroleum Corporation - Earnings Surprise | FindTheCompany

Total operating revenue of $219.3 million not only missed the Zacks Consensus Estimate of $242 million but was also substantially below the first-quarter 2014 level of $326.3 million.

Production

Production during the reported quarter increased year over year to 70.4 billion cubic feet equivalent (Bcfe) from 57.2 Bcfe. Natural gas volumes - accounting for approximately 92% of the total - increased 21% to 64.7 Bcf. Oil production rose to 951,116 barrels in the reported quarter from 658,049 barrels a year ago.

Realized Prices

Ultra Petroleum's average realized price on natural gas (excluding realized gain or loss on commodity derivatives) decreased over 44% to $2.84 per thousand cubic feet (Mcf). Also, the average oil price for the reported quarter was $37.34 per barrel, substantially lower than the first-quarter 2014 figure of $83.22 per barrel.

Costs, Expenses & Margins

Total lease operating costs increased 9.6% from the prior-year quarter to approximately $70.9 million. Ultra Petroleum reported all-in costs of $3.29 per Mcfe, 3.8% higher than the comparable quarter last year.

Total operating expenses came in at $189.4 million, reflecting a 22.3% increase from $154.8 million in the year-earlier period.

Ultra Petroleum's adjusted operating cash flow margin came in at 45% compared with 63% in the prior-year quarter. Adjusted net income margin was 8% compared with 43% in the year-ago quarter.

Balance Sheet

As of Mar 31, 2015, the company had cash and cash equivalents of approximately $34 million and long-term debt of $3.4 billion.

Guidance

For 2015, production is guided in the 280-290 Bcfe range, up from the earlier guidance of 275-285 Bcfe. The midpoint of the guidance reflects 14% year-over-year growth.

Ultra Petroleum expects total operating cost per Mcfe of $3.21-$3.39 for the second quarter.

The company reiterated full-year capital spending of $460 million.

Zacks Rank

Currently, Ultra Petroleum carries a Zacks Rank #3 (Hold).

Better-ranked players from the industry include Callon Petroleum Company CPE , Midstates Petroleum Company, Inc. MPO and Rice Energy Inc. RICE . All these stocks hold a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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