Houston-based, Rockies-focused Ultra Petroleum Corp. (NYSE: UPL) plans to acquire approximately 80,000 net acres in the Pennsylvania Marcellus shale from an undisclosed private company for $400 million, further expanding its position into Appalachia.

The assets include a 50% nonoperated working interest in 160,000 gross acres (43.75% net revenue interest per Ultra’s interest) in Centre, Clinton and Lycoming counties in north-central Pennsylvania. Ultra estimates total resource potential of 3.5 trillion cu. ft. equivalent. Anadarko Petroleum Corp., Houston, (NYSE: APC) is operator.

Six horizontal wells have been drilled on the acreage with two in production, with each producing 5 million cu. ft. per day, curtailed by surface constraints.

Following the acquisition, Ultra will hold approximately 250,000 net acres (480,000 gross acres) in the region concentrated around Tioga, Bradford, Lycoming, Potter, Clinton and Centre counties, with the potential for 1,800 net drilling locations.

In 2009, Ultra drilled 30 horizontal wells in the Marcellus with 13 producing. Initial production rates for the producing wells average 7.5 million cu. ft. per day with preliminary estimated ultimate recoveries ranging from 3.5- to 4 billion cu. ft. Including this acquisition, it added some 192,000 gross acres in 2009 through land acquisitions and swaps, doubling its position in the play.

Ultra will finance the deal with debt.

The seller is a GE Capital-funded company. Jefferies & Co. represented the seller. Closing is expected in late February. The effective date is Oct. 1, 2009.

Ultra’s core positions are in Pinedale and Jonah fields in the Green River Basin of Wyoming with 15 trillion cu. ft. of resource potential, representing 64% of its total reserves.

Analysts at Tudor, Pickering, Holt & Co. Securities Inc. estimate Ultra paid $5,000 per acre, which they calculate as full value until the acreage is derisked, which sets “a new high-water mark.” This acquisition “sets the stage for rapid growth in Pennsylvania as Ultra now will invest the same capex in Pennsylvania as Wyoming.”