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Ultra Petroleum Provides Q1 Production Update, Stock Falls

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Ultra Petroleum Corp. (UPL - Free Report) recently provided first-quarter 2018 production update along with information regarding its borrowing base credit facility, which is supported by a lender consortium. The company plummeted 8.6% yesterday following the update, which brings it 32% down in the past 30-day period.

 

The $585.1 million market cap company’s $1.4 billion borrowing base was reiterated by a group of banks. At the same time, Ultra Petroleum – with a long-term debt of $2.2 billion – now requires to bring down its overall debt burden. Starting Jun 30, 2018, the company requires its net leverage covenant to be 4.50 times, which has to be further reduced to 4.25 times by Sep 30, 2019 and 4 times by Mar 31, 2020. Additionally, the company has lowered its 2018 capital budget by 30% year over year to $400 million as a bid to improve its free cash flow.

Production

Ultra Petroleum stated that its average production in the quarter was 803 million cubic feet equivalent per day (MMcfe/d), which is closer to the upper limit of its guidance of 790-810 MMcfe/d. The first-quarter production — inched up 13% year over year — incorporates natural gas of 68.2 billion cubic feet, and 677.8 thousand barrels of oil and condensate. For the whole year, the company expects its output to be in the 280-290 billion of cubic feet equivalent range. Moreover, Ultra Petroleum anticipates its first-quarter total cost per thousand cubic feet equivalent to be in the range of $2.25-$2.40.

Price Performance

Ultra Petroleum has lost 73.3% in the past year against 1% growth of its industry.

 

Zacks Rank and Stocks to Consider

Houston, TX-based Ultra Petroleum is expected to release earnings report on May 10. The independent upstream company currently operates in Wyoming and Utah. At year-end 2017, the Zacks Rank #3 (Hold) company’s proved reserves totaled 3.1 trillion cubic feet equivalent. If you are interested in the energy sector, you can opt for better-ranked stocks like CNOOC Limited (CEO - Free Report) , CenterPoint Energy, Inc. (CNP - Free Report) and Oasis Midstream Partners LP (OMP - Free Report) . While CNOOC and CenterPoint sport a Zacks Rank #1 (Strong Buy), Oasis Midstream has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Hong Kong-based CNOOC is an integrated energy company. Its revenues for 2018 are anticipated to improve 51.3% year over year, while its bottom line is expected to increase 82.8%.

Houston, TX-based CenterPoint is a public utility holding company. For 2018, the bottom line of the company is likely to be up 13.1%. In the last four reported quarters, the company witnessed a positive average surprise of 11.5%.

Houston, TX-based Oasis Midstream is an integrated energy partnership. Its revenues for 2018 are anticipated to improve 29.3% from the prior-year quarter, while its bottom line is expected to increase 337.2%.

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