Ultra Petroleum Corp., Houston, will acquire oil producing properties in Utah’s Uinta basin that Ultra said will provide “exceptional returns at oil prices well below $75/bbl.”
Ultra will pay an undisclosed seller $650 million for 100% working interest in the asset, which is producing 4,000 b/d of oil from 38 wells, has 575 future well locations, and possesses a derisked acreage position with stacked pay potential. Net risked reserves exceed 90 million bbl of oil.
Ultra said it will “apply the same drilling techniques used in Pinedale (Wyoming) due to similar geologic characteristics.” The Utah properties are off the northwestern flank of supergiant Natural Buttes gas field.
The company has signed a definitive purchase and sale agreement and plans to close in December 2013 with an effective date of Oct. 1.
Michael D. Watford, chairman, president, and chief executive officer, said, “The asset is cash flow positive starting in year one and completely pays for itself in 5 years followed by decades of free cash flow.”