The board of Ultra Petroleum Corp., Houston, has approved a further $100 million reduction in the previously approved $925 million capital budget for 2012 in light of continued deterioration in natural gas prices, but the company still expects its production to increase on the year.
Spending totaled $288.6 million on oil and gas development in the quarter ended Mar. 31, when Ultra realized $3.81/Mcf for its gas including hedging gains and losses. The company’s production is expected to increase to 250-260 billion cu ft of gas equivalent, up 2-6% on the year with 72% coming from the Rockies.
The company’s first quarter production was comprised of 66.6 bcf of gas and 359,000 bbl of condensate.
Ultra and its partners drilled 40 gross Wyoming Lance wells and placed on production 30 gross wells in the first quarter, when production averaged 559 MMcfd of gas equivalent compared with 528 MMcfe/d in the 2011 first quarter.
Ultra and partners drilled 36 gross horizontal Marcellus wells in Pennsylvania in the first quarter of 2012. They also drilled 3 gross horizontal wells in the Geneseo, a slightly shallower formation above the Marcellus. No details were given. They started production from 39 gross horizontal Marcellus wells, maintaining a flat inventory of wells awaiting completion or pipeline connection.
Ultra set a Pennsylvania net production record of 223 MMcfe/d, 19% above the previous record of 188 MMcfe/d in the fourth quarter 2011. The new record is double the peak daily production rate of 110 MMcfe/d in the 2011 first quarter.