Ultra Petroleum Corp. on Monday agreed to pay $400 million to a private company to acquire an additional 80,000 net acres in the Pennsylvania portion of the Marcellus Shale.
The transaction, to be financed using debt, would give the Houston-based producer 250,000 net acres in the region with the potential for 1,800 net drilling locations. Ultra is targeting a close on the transaction for late February, with an effective sales date of Oct. 1, 2009.
“We are strategically increasing the scale of our Marcellus position with assets that rival the returns of our current acreage,” said CEO Michael D. Watford. “With this acquisition, we believe that our net recovered resource in the Marcellus alone will exceed 8.5 Tcfe, an increase of 3.5 Tcfe from current estimates.”
Year-to-date, Ultra has drilled 30 horizontal wells with 13 producing. Initial production rates for the producing wells average 7,500 Mcf/d with preliminary estimated ultimate recoveries ranging from 3.5 Bcf to 4.0 Bcf, the producer said.
Ultra began 2009 with 288,000 gross (152,000 net) acres in the Marcellus (see Daily GPI, Nov. 2; Aug. 5). Through a combination of land acquisitions and swaps, including Monday’s announcement, Ultra said it has added more than 192,000 gross acres, nearly doubling its position to 480,000 gross (250,000 net) acres.
The company’s expanding core position is concentrated around Tioga, Bradford, Lycoming, Potter, Clinton and Centre counties in north-central Pennsylvania.
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