Natural gas producer Ultra Petroleum Corporation (UPL) has agreed to buy additional properties in the Marcellus Shale region of Pennsylvania from an unnamed private company for $400 million. The deal, which will be financed with debt, is expected to close by late February 2010. The new acreage is located on the south and west of Ultra’s existing Marcellus assets.

Per the agreement terms, the Houston-based exploration and production firm will acquire 80,000 net acres in north-central Pennsylvania, which will bring the company’s total holdings in the region to 480,000 gross acres (250,000 net), with the potential for 1,800 net drilling locations.

According to Ultra Petroleum, the added acreage (in the counties of Lycoming, Clinton, and Centre in north central Pennsylvania) is expected to increase its net recovered resource in the Marcellus region to more than 8.5 trillion cubic feet equivalent, 70% more than the current estimate. The deal is part of the company’s development efforts that have resulted in robust natural gas production in this region over the last few years.

In the beginning of 2009, Ultra Petroleum held acreage in 288,000 gross acres in the Marcellus Shale. Since then, the company has added more than 192,000 gross acres through swaps and outright acquisitions.

In recent times, energy companies have been expanding their shale gas holdings despite low natural gas prices, betting that these unconventional resource bases will be a key future source of energy as the economy recovers.

Ultra Petroleum’s move follows U.S. integrated major ExxonMobil’s (XOM) decision to pick up unconventional natural gas producer XTO Energy (XTO) in a $41 billion all-stock deal and Range Resources Corp‘s (RRC) completion of the third phase of its natural gas processing infrastructure expansion program at the Marcellus Shale.

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