Ultra Petroleum is following the lead of other pure play natural gas producers to diversify their resource portfolio to include oil. Ultra Petroleum like other natural gas producers is leveraging their horizontal drilling technology expertise in eastern shale plays to tight oil plays such as the Niobrara. Ultra Petroleum has assembled a large mineral acreage position in the Niobrara including recently acquired acreage near Colorado Springs, and plans to drill leases this winter east of Fountain, Colorado. According to a press release by Ultra Resources on August 10th, 2011:
“In a grassroots exploration effort to establish a third core area, Ultra Petroleum has assembled a substantial acreage position in a liquids prone development area. The company has amassed nearly 100,000 net acres targeting the Niobrara formation in the Denver-Julesburg (DJ) Basin in Colorado. Inherent reservoir characteristics indicate significant resource potential in Ultra’s leasehold area. The company plans to drill and complete several Niobrara exploration wells this winter to further evaluate the potential for oil production.”
The leasehold referred to in the press release are the acquired leases on 100.000 acres spanning most of the Banning Lewis Ranch, from Denver-based Pine Ridge Oil & Gas LLC for $1.67 million. See article at the Colorado Springs Gazette for more details of the purchase and the controversy surrounding it.