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Ultra Petroleum Acquires Uinta Basin Assets For $650 Million (Metrics: $11.25/BOE Or $105,231/Daily BOE)

|Includes: Ultra Petroleum Corp. (UPL)

Ultra Petroleum Corp has signed a definitive PSA to acquire certain oil producing assets in the Three Rivers project, Uinta basin, for $650 million. The transaction is effective 1-Oct-2013 and is expected to close in Dec-2013.

Asset highlights:

  • Operated asset with 100% WI (82% NRI)
  • Current Production: 4 Mbbl
  • Proved Reserves (1P): 37.4MMbbl (26% PD)
  • Proved plus Probable plus Probable Reserves (3P): 90 MMbbl

· Ultra Petroleum, in its acquisition PPT, has reported a total PV-10 value of $1,135 million for 3P Reserves. PV-10 value for 1P Reserves is $735 million or ~65% of the total PV-10 value of 3P Reserves

Metrics:

  • The value of Proved Reserves is $420.93 million or ~65% of the total deal value of $650 million. This is based on the Ultra Petroleum's reported PV-10 for 1P and 3P Reserves. This implies a metric of $11.25/BOE or $105,231/Daily BOE
  • The balance value of $229.07 million when ascribed to Probable and Possible Reserves yields a metric of $4.31/BOE

Interestingly, Ultra Petroleum had slashed its 2013 capex by 50%, at $415 million.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.