EXHIBIT 99.1
February 9, 2005
ULTRA PETROLEUM REPORTS 141 % INCREASE IN ANNUAL EARNINGS
Houston, TX - Ultra Petroleum (AMEX-UPL) today reported earnings for the
twelve-month period ended December 31, 2004 increased 141 % to $109.1 million or
$1.35 per diluted share compared to $45.3 million or $0.58 per diluted share for
the same period in 2003. Cashflow (1) for the period increased 126 % to $198.3
million or $2.46 per diluted share, compared to $87.8 million or $1.12 per
diluted share for the same period in 2003. Production increased 71 % to 49.3
Bcfe compared to 28.9 Bcfe for 2003. Production included 350 Mbls oil from
Wyoming, 593 Mbls oil from China, and 43.7 Bcf natural gas from Wyoming. Average
natural gas prices for the year were $5.13 per Mcf as compared to $4.16 per Mcf
for the same period in 2003. China oil prices averaged $32.31per bbl while
Wyoming oil prices averaged $41.92 per bbl compared to $31.86 per bbl for the
same period in 2003.
Earnings for the three-month period ended December 31, 2004 were $43.0 million
or $0.53 per diluted share, a 124% increase from $19.2 million or $0.24 per
diluted share for the same period in 2003. Cash flow ( 1) for the period was $76
million or $0.93 per diluted share, a 130% increase from $33 million or $0.42
per diluted share for the same period in 2003. Production increased 75% to 17
Bcfe compared to 9.7 Bcfe for the same quarter in 2003. Average natural gas
prices were $5.70 per Mcf during the quarter, compared to $4.48 per Mcf for the
same period in 2003. China oil prices for the quarter averaged $29.88 per bbl
while Wyoming oil prices averaged $48.86 per bbl compared to $33.74 per bbl for
the same period in 2003.
On February 7, 2005, Ultra's Board of Directors approved the 2005 capital budget
of $290 million with 90% of that to be spent developing and further delineating
the Company's Pinedale Anticline property. With this budget, Ultra expects to
participate in the drilling of 100 to 110 new wells at Pinedale during 2005.
Additionally, Ultra expects to commence production from the next two fields in
its China property during the year, as well as bringing to development phase an
additional three fields, currently targeted for production start in 2006.
The board also approved the splitting of the common shares of Ultra Petroleum
Corp. on a 2 for 1 basis, subject to a vote by the shareholders at the upcoming
Extraordinary General Meeting on April 29th.
"More than doubling earnings and cashflow in 2004 was the financial evidence of
the robust nature of our business. By maintaining our industry leading low cost
structure and growing production over 70% through the drill-bit, we continue to
deliver net income margins in excess of 40% while doubling revenues. As we again
execute the most aggressive drilling program in our history, we expect
production to grow by approximately 35% to 65 - 67.5 Bcfe and proved reserves to
grow by another 18% to 1.8 Tcfe, achieving a 500% reserve replacement ratio.
With over a decade of identified drilling opportunities and low costs, we remain
well positioned to continue delivering industry leading performance for many
years to come," stated Michael D Watford, Chairman, President and CEO.
For the Three-Month Period Ended For the Twelve-Month Period Ended
31-Dec-04 31-Dec-03 31-Dec-04 31-Dec-03
Production
Oil Production - Bbls: WY 107,886 63,675 349,673 211,591
Oil Production - Bbls: China 382,409 0 593,332 0
Natural Gas - Mcf Gas Equivalent 14,070,402 9,365,920 43,667,384 27,621,759
Production - Mcfe 17,012,172 9,747,970 49,325,414 28,891,305
Realized Production Prices
Oil Price - WY $/bbl $48.86 $33.74 $41.92 $31.86
Oil Price - China $29.88 $0.00 $32.31 $0.00
$/bbl
Gas Price - $/Mcf $5.70 $4.48 $5.13 $4.16
Revenues
Oil Revenue - WY $5,271,551 $2,148,627 $14,659,219 $6,740,539
Oil Revenue - China $11,425,343 $0 $19,170,436 $0
Gas Revenue $80,169,948 $42,005,095 $224,207,694 $114,840,558
Total Revenues $96,866,842 $44,153,722 $258,037,349 $121,581,097
Operating costs and expenses
Operating expenses - WY $2,182,457 $1,142,854 $6,286,715 $3,627,639
Operating expenses - China $1,397,000 $0 $2,286,000 $0
Taxes $10,175,579 $5,093,316 $28,151,661 $13,767,668
Gathering $4,357,264 $2,632,680 $13,135,809 $7,828,372
Depreciation, depletion and $9,772,488 $5,124,369 $27,346,061 $16,215,714
amortization - WY
Depreciation,
depletion and
amortization - China $1,871,587 $0 $2,903,000 $0
General and
administrative $1,845,329 $1,523,117 $6,152,097 $5,733,147
Stock compensation $150,050 $0 $923,623 $1,018,220
Interest and debt
expense $980,689 $699,357 $3,783,070 $2,850,916
Total direct expenses $32,732,443 $16,215,693 $90,968,036 $51,041,676
Interest and other income $48,061 $10,456 $90,760 $36,888
Income Tax - Deferred $21,213,761 $8,795,381 $58,010,278 $25,253,670
Net Income $42,968,699 $19,153,104 $109,149,795 $45,322,639
Per common share - basic $0.57 $0.26 $1.46 $0.61
Per common share - diluted $0.53 $0.24 $1.35 $0.58
Cash flow from operations (1) $75,976,585 $33,072,854 $198,332,757 $87,810,243
Per common share - basic $1.01 $0.44 $2.64 $1.18
Per common share - diluted $0.93 $0.42 $2.46 $1.12
Shares Outstanding 75,217,468 74,547,668 75,217,468 74,547,668
Weighted Average - Basic 75,174,354 74,412,744 74,992,280 74,231,553
Weighted Average - diluted 81,549,536 79,304,844 80,733,760 78,651,439
Costs per Mcfe - Corporate
Lease Operating $1.06 $0.91 $1.01 $0.87
DD&A $0.68 $0.53 $0.61 $0.56
General and $0.12 $0.16 $0.14 $0.23
administrative - total Interest $0.06 $0.07 $0.08 $0.10
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Segment Costs per Mcfe -
United States
Production Costs $0.15 $0.12 $0.14 $0.13
Severance/Production $0.60 $0.52 $0.57 $0.48
Taxes
Gathering $0.26 $0.27 $0.27 $0.27
DD&A $0.66 $0.53 $0.60 $0.56
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$1.67 $1.44 $1.57 $1.43
Segment Costs per Mcfe - China
Production Costs $0.61 $0.00 $0.64 $0.00
DD&A $0.82 $0.00 $0.82 $0.00
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$1.42 $0.00 $1.46 $0.00
These statements are unaudited and subject to adjustment.
(1) "Cash flow" refers to cash flow from operations before net change in
non-cash working capital.
Reconciliation of cash Three Months Ended Dec 31 Twelve Months Ended Dec 31
flow from operations
before change in net
working capital
2004 2003 2004 2003
Net cash provided by $59,105,200 $24,099,931 $185,144,675 $76,461,342
operating activities
Other long-term $2,704,095 ($290,834) ($4,614,691) ($1,261,403)
obligations
Accounts payable and $12,207,682 ($6,826,764) $10,424,506 ($10,168,165)
accrued liabilities
Prepaid expenses and ($2,781,334) ($2,135,887) $14,106 $1,237,458
other current assets
Inventory ($3,214,284) $13,589,270 ($9,037,557) $13,589,270
Accounts receivable $4,518,258 $4,636,818 $16,400,426 $7,950,378
Restricted cash $344 $320 $1,292 $1,363
Deferred revenue $3,436,624 $0 $0 $0
Cash flow from $75,976,585 $33,072,854 $198,332,757 $87,810,243
operations before change
in net working capital
We intend to file a proxy statement in connection with the approval of the stock
split described in this press release. Our shareholders are urged to read the
proxy statement when it becomes available because it will contain important
information about us and the proposed stock split. Our shareholders may obtain a
free copy of the proxy statement when it is available and other documents filed
by us with the SEC at the SEC's web site at www.sec.gov. A free copy of the
proxy statement when it becomes available may also be obtained from us by
written or oral request at 363 North Sam Houston Parkway East, Suite 1200,
Houston, Texas 77060 Attention: Corporate Secretary, telephone number (281)
876-0120.
We and our directors may be deemed to be participants in the solicitation of
proxies from our shareholders with respect to the proposed stock split.
Information about our directors and their ownership of our shares is set forth
in our Proxy Statement on Schedule 14A filed with the Securities and Exchange
Commission on April 21, 2004. A free copy of this document may be obtained from
the SEC or us as indicated above. Our shareholders may obtain additional
information regarding the interests of such directors, if any, in the proposed
stock split by reading the proxy statement when it becomes available.
Management believes that the non-GAAP measures of cash flow before changes in
working capital is useful information to investors because it is widely used by
professional analysts and sophisticated investors in valuing oil and gas
companies. Many other investors use research reports of these analysts in making
investment decisions.
Ultra Petroleum is an independent, exploration and production company focused on
developing its long life natural gas reserves in the Green River Basin of
Wyoming, and oil reserves in Bohai Bay, offshore China. Ultra is listed on the
American Stock Exchange under the ticker "UPL" with 75,257,468 shares
outstanding as of the date of this release.
The United States Securities and Exchange Commission permits oil and gas
companies, in their filings with the SEC, to disclose only proved reserves that
a company has demonstrated by actual production or conclusive formation tests to
be economically and legally producible under existing economic and operating
conditions. We may use certain terms in this press release, relating to reserves
and/or production that the SEC's guidelines strictly prohibit us from including
in filings with the SEC. U.S. Investors are urged to consider closely the
disclosure in our Form 10-K available from us at 363 North Sam Houston Parkway
E., Suite 1200, Houston, TX 77060. You can also obtain this form from the SEC by
calling 1-800-SEC-0330.
This news release includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The opinions, forecasts,
projections or other statements, other than statements of historical fact, are
forward-looking statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, they can give no
assurance that such expectations will prove to have been correct. Certain risks
and uncertainties inherent in the Company's businesses are set forth in their
filings with the Securities and Exchange Commission. Full details regarding the
selected financial information provided above will be available in the Company's
annual report and in the Annual Information form to be filed under the cover of
Form 10-K.
"Completion of 2004 Audit" It should be noted that in the past, the Company's
auditors dated their year-end audit opinion as of the date of the year-end
earnings release. Pursuant to the new Sarbanes-Oxley requirements, the Company's
certifying public accountants' audit opinion with respect to the year-end
financial statements will not be dated until the Company completes the final
10-K report and evaluation of internal controls over financial reporting, which
is anticipated to be filed with the SEC on March 16, 2005. Accordingly, the
financial results reported in this earnings release are preliminary and are
subject to adjustment. The Company expects to report full audited financial
results by March 16, 2005.
For more information contact:
David Russell
Investor Relations
(281) 876-0120 Extension 302