Ultra Petroleum recently released their year end prodcution results along with some of their plans for 2011 in the Marcellus Shale. The Company has been trying extremely hard to find ways to cut drilling costs and increase their revenue from this field. Over the last quarter, Ultra drilled 37 gross (24 net) horizontal and 27 gross (14 net) vertical wells in the Marcellus shale. Their total number of wells in the play is at 116 gross (72 net) horizontal and 61 gross (32 net) vertical wells.
The play has been split up into two major regions in the northern and southern areas of the play. The northern wells have average laterals of 4,100’ and their southern counterparts have average laterals of 5,655’. Average 24-hour IP rates have been computed to be 6.2 MMcfpd which is down from 6.4 MMcfpd in the last year. Ultra exited 2010 at a rate of 90 MMscfpd.
Some of the ways the Company is trying to cut costs is through new well designs, intelligent lateral placement, and geo-steering. All these changes have led to a dramatic decrease in drill time where the time has been cut in half from 10.8 days to 5.4 days. Although drill time has decreased significantly, net revenue has not been as high as expected due to additional frac costs from longer wells. The average cost of horizontal wells in the Marcellus Shale play has decreased from $2.1 million/well to $1.5 million/well in 4Q2010.
Below isa map I created in DrillingInfo of Ultra Petroleum’s production in the last year histogrammed by their total measured depths (TMD) and bubbled by their total vertical depths (TVD).
Ultra plans to take these new areas and additional parts of the play and drill 163 gross (80 net) wells in 2011. The Company currently owns 260,000 net acres in the Marcellus Shale play. Keep up to date with Marcellus info in the DNA section of the DrillingInfo site.
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