Ultra Petroleum Corp. said this week that it would cut 2019 capital expenditures further and drop a rig in the Green River Basin as it barrels ahead with ongoing efforts to curb spending and improve results.
The Wyoming pure-player, which operates in the Pinedale Anticline, cut its rig count from three to two and said this year’s budget has been slashed by $15 million to a new range of $305-335 million. However, Ultra said its full-year production guidance remains unchanged at 240-250 Bcfe.
“Our team continues to improve drilling cycle time performance,” said CEO Brad Johnson. “As a result, we are drilling wells faster and can accomplish our 2019 plan with the adjustment down to two operated rigs for the remainder of the year.”
In May, Ultra drilled three wells with spud to total depth times of less than six days, compared to an average of a little more than eight days in the first quarter. Higher working interest in wells planned for the rest of 2019 would also help keep production on target, Johnson added.
While production surpassed the midpoint of guidance in the first quarter, it still was down from the prior year. The company previously announced an 11% year/year decline in production for 2019 and noted that volumes fell on lower capital investment through the second half of last year and into this year.
Ultra has cut spending to focus on cash flow and debt reduction in the face of weak regional pricing in the Rockies. The weak gas outlook also prompted the company to scale back its horizontal drilling program last year and shift toward higher-return vertical wells.
While no horizontal activity is planned for the year, Ultra is currently studying existing data with the aim of unlocking more resources from the Pinedale through such development.