Ultra Petroleum Reaches Production Milestone, Delivers Increased Earnings and Cash Flow, and Achieves Outstanding Returns for 2010

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HOUSTON, Feb. 18, 2011 /CNW/ -- Ultra Petroleum Corp. (NYSE: UPL) today announced strong financial and operating results for both the fourth quarter and full-year 2010. Highlights for 2010 include:

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    (Logo:  http://photos.prnewswire.com/prnh/20020226/DATU029LOGO)

    --  Increased total production by 19 percent over 2009 to a record 213.6
        Bcfe
    --  Generated operating cash flow(2) of $764.5 million, an increase of 20
        percent from the prior year period
    --  Achieved earnings of $336.3 million, or $2.18 per diluted share -
        adjusted(3), an increase of 19 percent from a year ago
    --  Continued record of superior returns (adjusted); 31 percent net income
        margin(4), 70 percent cash flow margin(5), 39 percent return on
equity,
        and 17 percent return on capital employed


    Twelve Month Results

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For the year-ended December 31, 2010, production of natural gas and crude oil reached a record high of 213.6 billion cubic feet equivalent (Bcfe) compared to production of 180.1 Bcfe for 2009, a 19 percent increase. This is the largest annual production level ever achieved by Ultra Petroleum. Total production for 2010 consists of 205.6 billion cubic feet (Bcf) of natural gas and 1.3 million barrels of condensate.

The company's realized price for natural gas during 2010, excluding realized gains and losses on commodity hedges, averaged $4.31 per thousand cubic feet (Mcf), as compared to $3.49 per Mcf for the same period a year ago, a 24 percent increase. Including realized gains and losses on commodity hedges, Ultra's average realized natural gas price was $4.88 per Mcf in 2010, remaining flat to 2009 pricing levels. The average realized condensate price in 2010 increased 40 percent to $69.69 per barrel (Bbl) in comparison to $49.80 per Bbl during 2009.

Operating cash flow(2) for the 12 months ended December 31, 2010 totaled $764.5 million, or $4.96 per diluted share, increasing 20 percent from $637.6 million for the same twelve month prior-year period. Adjusted net income(3) for 2010 also improved substantially to $336.3 million, or $2.18 per diluted share, a 19 percent increase. This compares to $282.2 million, or $1.86 per diluted share, for the year-ended December 31, 2009. These significant increases are largely attributable to higher year-over-year production volumes combined with the company's stable cost structure.

"2010 was a year where Ultra delivered double digit growth in reserves, production, cash flow, and earnings. We maintained strong margins and achieved superior corporate returns," commented Michael D. Watford, Chairman, President, and Chief Executive Officer.

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    Fourth Quarter Results

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During the fourth quarter of 2010, the company's natural gas and crude oil production increased 20 percent to a record 57.3 Bcfe, as compared to production volumes of 47.6 Bcfe for the fourth quarter of 2009. Fourth quarter 2010 production was comprised of 55.2 Bcf of natural gas and 343.9 thousand barrels of condensate.

Including realized gains and losses on commodity hedges, Ultra Petroleum's average natural gas price realized during the fourth quarter of 2010 was $4.54 per Mcf, a slight decrease compared to $4.86 per Mcf in the fourth quarter of 2009. The company's natural gas price, excluding realized gains and losses on commodity derivatives, averaged $3.83 per Mcf during the fourth quarter of 2010. This compares to $4.20 per Mcf in the fourth quarter of 2009, a decrease of 9 percent. The realized condensate price in the fourth quarter of 2010 increased 14 percent to $75.45 per Bbl, as compared to $65.97 per Bbl for the same period in 2009.

The company recorded $198.7 million of operating cash flow(2) for the fourth quarter of 2010 in comparison to $172.2 million for the prior-year period, a 15 percent increase. Adjusted net income(3) was $76.6 million, or $0.50 per diluted share during the fourth quarter of 2010, compared to $78.5 million, or $0.51 per diluted share for the same period a year ago.

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    Wyoming - Operational Highlights

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Ultra Petroleum's Pinedale developmental drilling program continues to reflect superior execution and consistent efficiency gains. For the fourth quarter 2010, Ultra participated in drilling to total depth (TD) 68 gross (40 net) Lance wells in comparison to 60 gross (30 net) wells drilled during 2009. For the twelve months ended December 31, 2010, Ultra and its partners drilled to TD 247 gross (134 net) Lance wells. This compares to 232 gross (108 net) wells drilled during 2009. The total number of days Ultra-operated rigs were employed in Pinedale during 2010 was 2,806, compared to 2,816 days during 2009. Ultra drilled 39 percent more wells in 2010 with essentially the same number of rig days.

Ultra's operations team continues to drive down the average drilling time in Pinedale. For the fourth quarter, Ultra averaged 13 days per well spud to TD, compared to an average of 16 days in the fourth quarter of 2009, a 19 percent improvement over the prior-year period. Further emphasizing decreased drilling times, 98 percent of the wells drilled in the fourth quarter reached TD in 20 days or less, while 84 percent were drilled in less than 15 days. During the fourth quarter, Ultra established a new Pinedale record in drilling time by reaching 13,500 feet in 9.35 days. Ultra's sustained efficiencies led to further well-cost reductions. Ultra's completed well costs in Wyoming averaged $4.6 million for the fourth quarter of 2010, compared to $4.8 million for the fourth quarter 2009.

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                      Improving Operational Efficiencies
                               2007     2008     2009  Q4 2010      2010
                               ----     ----     ----  -------      ----
    Spud to TD (days)            35       24       20        13       14
    Rig release to rig
     release (days)              48       32       24        16       17
    % wells drilled < 20
     days                         2%      27%      73%       98%      95%
    Well cost - pad ($MM)      $6.2     $5.5     $5.0      $4.6     $4.7


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During the fourth quarter, Ultra and its partners brought on production 51 gross (30 net) wells, as compared to 47 gross (21 net) wells in the fourth quarter 2009. Ultra and its partners brought on production 247 gross (137 net) new Lance wells during the twelve months ended December 31, 2010, as compared to 228 gross (108 net) wells for the twelve month period ended December 31, 2009.

Ultra drilled 60 5-acre pilot wells in 2010. The average initial production rates for the Ultra-operated 5-acre wells brought on-line averaged 7.0 million cubic feet (MMcf) per day. On February 8, 2011, Ultra presented to the Wyoming Oil and Gas Conservation Commission (WOGCC) its 2010 5-acre pilot results along with a comprehensive and detailed analysis of incremental recovery associated with 5-acre development in Pinedale. As a result of that technical review, the WOGCC approved Ultra's filing for 5-acre development on remaining Ultra-interest lands in Pinedale. The immediate impact of this ruling provides for nearly an additional 1,500 5-acre locations and over 2.5 Tcfe of net reserves are eligible for booking to proved reserves.

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    Pennsylvania - Operational Highlights

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Ultra Petroleum has amassed an extensive land position in the Pennsylvania Marcellus Shale. The company started 2010 with approximately 168,900 net acres in the Marcellus Shale. During the year, through a combination of land acquisitions and swaps, including the company's 78,000 net acre acquisition from a private company, Ultra Petroleum has added over 91,300 net acres, increasing its position to approximately 495,000 gross (260,200 net) acres. Ultra invested $453.2 million towards its incremental acreage additions throughout the year. The company's core position is concentrated around Potter, Tioga, Lycoming, Clinton and Centre counties in north central Pennsylvania.

During the fourth quarter 2010, Ultra and its partners drilled 37 gross (24 net) horizontal Marcellus wells, compared to 16 gross (11 net) wells during the fourth quarter 2009 across its acreage position in Pennsylvania. For the year, the company participated in drilling 116 gross (72 net) horizontal Marcellus wells, in comparison to 33 gross (20 net) horizontal Marcellus wells for 2009.

Ultra and its partners initiated production from 33 gross (21 net) new horizontal wells during the fourth quarter. For the year-ended December 31, 2010, Ultra and its partners initiated production from 77 gross (51 net) horizontal Marcellus wells. Early well-performance results continue to be encouraging. The initial production rate for wells brought on-line during 2010 averaged 6.4 MMcf per day. Ultra's peak production rate, 90 MMcf per day (net) also coincided with the company's exit production rate for the year.

"We have worked diligently in 2010 to complete the necessary steps towards establishing a second core area: assemble a contiguous acreage position, evaluate resource potential, and build necessary infrastructure. As we move through the next few years, we look forward to transitioning to a development-mode similar to where we are in Pinedale and be able to optimize efficiencies and costs," stated Watford.

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    Commodity Hedges

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Ultra Petroleum opportunistically layered on additional 2011 natural gas hedges and initiated hedges for 2012 to underpin the strong economics of its investment portfolio. This price hedging strategy helps increase certainty in cash flow which is available to fund Ultra's anticipated capital investment requirements. The total volume of commodity hedges for 2011 is currently 167.5 Bcf at a weighted-average price of $5.63 per Mcf. Currently, the commodity hedges represent over 70 percent of the company's 2011 forecast natural gas production. In addition, the company has 98.8 Bcf hedged for 2012 at a weighted-average price of $5.35 per Mcf.

"Our hedge position for 2011 and 2012 provides certainty to our cash flows and economics. These hedged volumes along with our 73 Bcf of annual firm transportation on Rockies Express create diversified markets for financial success. Excluding condensate production, our 2011 hedge position represents over 70 percent of our produced natural gas volumes forecast for 2011," added Watford.

Ultra Petroleum has the following positions in place to mitigate its natural gas commodity price exposure:

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                  Q1 2011            Q2 2011           Q3 2011
                  -------            -------           -------
               Total   Average  Total    Average  Total    Average
               Volume   Price   Volume   Price    Volume   Price
               (Bcf)   ($/Mcf)  (Bcf)    ($/Mcf)  (Bcf)    ($/Mcf)
               -----   -------  -----    -------  -----    -------
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    NW
     Rockies     15.3    $5.41    15.5     $5.41    15.6     $5.41
    Northeast    17.6    $6.19    17.8     $6.19    17.9     $6.19
    NYMEX           -        -    14.6     $4.87    14.7     $4.87
                    -             ----              ----
    Total        32.9    $5.83    47.8     $5.53    48.3     $5.53

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                     Q4 2011        YTD 2011
                     -------        --------
                Total   Average  Total    Average
               Volume    Price   Volume   Price
                (Bcf)   ($/Mcf)  (Bcf)    ($/Mcf)
                -----   -------  -----    -------
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    NW
     Rockies      15.6    $5.41    62.1     $5.41
    Northeast     17.9    $6.19    71.2     $6.19
    NYMEX          5.0    $4.87    34.2     $4.87
                   ---             ----
    Total         38.5    $5.70   167.5     $5.63

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                 Q1 2012          Q2 2012         Q3 2012
                  -------         -------           -------
             Total   Average  Total    Average  Total    Average
             Volume   Price   Volume   Price    Volume   Price
             (Bcf)   ($/Mcf)  (Bcf)    ($/Mcf)  (Bcf)    ($/Mcf)
             -----   -------  -----    -------  -----    -------
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    NYMEX      24.6    $5.35    24.6     $5.35    24.8     $5.35

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                 Q4 2012           YTD 2012
                 -------           --------
              Total   Average  Total    Average
             Volume    Price   Volume   Price
              (Bcf)   ($/Mcf)  (Bcf)    ($/Mcf)
              -----   -------  -----    -------
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NYMEX 24.8 $5.35 98.8 $5.35

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    Amounts may not total due to rounding

    Natural Gas Marketing Update

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The table below provides a historical, current, and future perspective on average basis differentials for Wyoming gas (NW Rockies) and premium markets in the Northeast (Dominion South). 2010 was a pivotal year since it is the first full-year of service for the Rockies Express Pipeline (REX). REX, the first interstate pipeline to deliver natural gas from the Rocky Mountains to the Northeast, is designed to transport 1.8 Bcf per day of natural gas from Opal, Wyoming to Clarington, Ohio. Presently, there continues to be growing take-away capacity out of the Rockies. The excess take-away capacity continues to increase as new pipelines come into service, with the most recent being the 477 MMcf per day Bison pipeline and expected in the second half of 2011, the 1.5 Bcf per day Ruby pipeline.

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    The basis differential is expressed as a percentage of Henry Hub.

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              Basis Differential as a Percentage (%) of Henry Hub
              ---------------------------------------------------
                                                       NW       Dominion
                                                     Rockies      South
    Historical Average Basis Differential (2006 -
     2009)                                                 71         105
    Historical Average Basis Differential (2010)           90         104
    Historical Average Basis Differential (Jan -
     Feb 2011)                                             93         106
    Current Average Basis Differential (Balance
     2011)                                                 91         103
    Future Average Basis Differential (2012 -
     2013)                                                 92         102


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"Our strategic commitment to the REX pipeline project, as an anchor shipper, has helped permanently alter the North American natural gas marketplace, virtually wiping out the historical discounts that have differentially plagued Rockies gas producers in the past. The REX pipeline has allowed us to dramatically diversify our customer portfolio, and affords us substantial flexibility in securing markets for our growing natural gas production. With the completion of REX, we now have unprecedented levels of optionality in the marketing of our Wyoming natural gas production. The future basis differentials shown in the table above reflect this trend," stated Watford.

The basis tightening along with a strong hedge position have aided the company's realizations.

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                        2010 Natural Gas Price Realizations
                        -----------------------------------
                                     Q4 2010    Q4 2009        2010      2009
                                     -------    -------        ----      ----
    NYMEX ($/Mmbtu)                      3.80       4.16       4.39      3.99
    Ultra's realized gas price*
     ($/Mcf)                             4.54       4.86       4.88      4.88
    Ultra's % of NYMEX realized           119%       117%       111%      122%
    * realized prices include the impact of financial hedging


    Financial Strength

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Ultra maintains a strong, flexible balance sheet. As of December 31, 2010, 100 percent of the company's outstanding debt was composed of long-term, fixed-rate debt with an average remaining term of approximately 9.3 years and a weighted-average coupon rate of 5.6 percent. With Ultra's bank facility of $500.0 million undrawn and $70.9 million of cash on the balance sheet at year-end 2010, the company's liquidity position is well positioned to financially weather current economic conditions. Ultra is focused on maintaining capital discipline and financial flexibility by targeting a debt to EBITDA ratio of less than 2.0 times. The company exited the year with a 1.9 times debt to EBITDA ratio.

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    New Executive Appointments

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Ultra Petroleum's Board of Directors is promoting both William R. Picquet and Marshall D. Smith to Senior Vice Presidents. Mr. Picquet in his new role as Senior Vice President, Operations, continues to oversee all facets of the company's operations in Wyoming and Pennsylvania, as well as the New Ventures team. Mr. Smith continues to lead the finance and accounting teams, as well as marketing, investor relations, and information technology groups within Ultra as Senior Vice President, Chief Financial Officer.

Ultra's Board of Directors has also promoted C. Brad Johnson to the executive leadership team of the company as Vice President, Reservoir Engineering and Development. In his new role, Mr. Johnson will lead Ultra's reservoir engineering group and provide valuable insights and perspectives to the strategic goals and objectives of the corporation. Mr. Johnson has over 15 years of experience that includes operations, engineering, acquisitions, project management and corporate planning. Mr. Johnson obtained his Bachelor of Science degree in Petroleum Engineering from Texas A&M University and his Master of Science degree in Petroleum Engineering from the University of Texas. Prior to joining Ultra, Mr. Johnson served in various leadership capacities with increasing responsibilities at Anadarko Petroleum Corporation.

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    Conference Call Webcast Scheduled for February 18, 2011

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Ultra Petroleum's fourth quarter and full year 2010 results conference call will be available via live audio webcast at 11:00 a.m. Eastern Standard Time (10:00 a.m. Central Standard Time) Friday, February 18, 2011. To listen to this webcast, log on to www.ultrapetroleum.com and follow the link to the webcast. The webcast replay and podcast will be archived on Ultra Petroleum's website through May 13, 2011.

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    Financial tables to follow.

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    Ultra Petroleum Corp.
    Consolidated Statement of Operations (unaudited)
    All amounts expressed in US$000's
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                                               For the Year Ended
                                                  December 31,
                                                  ------------
                                                  2010             2009
                                                  ----             ----
    Volumes
    Natural gas (Mcf)                      205,612,546      172,189,447
    Oil liquids (Bbls)                       1,334,413        1,320,072
                                             ---------        ---------
    Mcfe - Total                           213,619,024      180,109,879
                                           -----------      -----------
    >>

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    Revenues
    Natural gas sales                         $886,396         $601,023
    Oil sales                                   92,990           65,739
                                                ------           ------
    Total operating revenues                   979,386          666,762
                                               -------          -------
    >>

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    Expenses
         Lease operating expenses               45,938           40,679
         Production taxes                       95,914           66,970
         Gathering fees                         50,126           45,155
                                                ------           ------
    Total lease operating costs                191,978          152,804
                                               -------          -------
    >>

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         Transportation charges                 64,965           58,011
         Depletion and depreciation            241,796          201,826
         Write-down of proved oil and
          gas properties                             -        1,037,000
         General and administrative             11,407            8,871
         Stock compensation                     12,944           10,901
                                                ------           ------
    Total operating expenses                   523,090        1,469,413
                                               -------        ---------
    >>

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    Other income (expense), net                    260           (2,888)
    Interest and debt expense, net             (49,032)         (37,167)
    Litigation expense                          (9,902)               -
    Realized gain on commodity
     derivatives                               116,827          239,366
    Unrealized gain (loss) on
     commodity derivatives                     208,625          (92,849)
                                               -------          -------
    Income (loss) before income
     taxes                                     723,074         (696,189)
    >>

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    Income tax provision - current              22,211           23,043
    Income tax provision (benefit)
     -deferred                                 236,404         (268,179)
                                               -------         --------
    >>

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    Net income (loss)                         $464,459        $(451,053)
                                              --------        ---------
    >>

    <<
    Impairment of proved oil and
     gas properties,                   $             -         $673,013
      net of tax
    Litigation expense, net of tax               6,387                -
    Unrealized (gain) loss on
     commodity derivatives, net of
     tax                                      (134,563)          60,259
                                              --------           ------
    Adjusted net income (3)                   $336,283         $282,219
                                              --------         --------
    >>

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    Operating cash flow (2)                   $764,500         $637,557
                                              --------         --------
    (see non-GAAP reconciliation)
     (2)
    >>

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    Weighted average shares - basic            152,346          151,367
    Weighted average shares -
     diluted (1)                               154,253          151,367
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    Earnings per share
      Net income - basic                         $3.05           ($2.98)
      Net income - fully diluted                 $3.01           ($2.98)
    >>

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    Adjusted earnings per share
      Adjusted net income -basic (3)             $2.21            $1.86
      Adjusted net income -fully
       diluted (3)                               $2.18            $1.86
    >>

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    Realized Prices
    Natural gas (Mcf), including
     realized gain on commodity
     derivatives                                 $4.88            $4.88
    Natural gas (Mcf), excluding
     realized gain on commodity
     derivatives                                 $4.31            $3.49
    Oil liquids (Bbls)                          $69.69           $49.80
    >>

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    Costs Per Mcfe
      Lease operating expenses                   $0.22            $0.23
      Production taxes                           $0.45            $0.37
      Gathering fees                             $0.23            $0.25
      Transportation charges                     $0.30            $0.32
      Depletion and depreciation                 $1.13            $1.12
      General and administrative -
       total                                     $0.11            $0.11
      Interest and debt expense, net             $0.23            $0.21
                                                 -----            -----
                                                 $2.68            $2.61
                                                 -----            -----
    >>

    <<
    Note: Amounts on a
     per Mcfe basis may
     not total due to
     rounding.
    >>

    <<
    Adjusted Margins
         Adjusted Net Income (4)                    31%              31%
         Adjusted Operating Cash Flow
          Margin (5)                                70%              70%



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                                                For the Quarter
                                                     Ended
                                                 December 31,
                                                 ------------
                                                 2010            2009
                                                 ----            ----
    Volumes
    Natural gas (Mcf)                      55,202,630      45,656,098
    Oil liquids (Bbls)                        343,931         329,344
                                              -------         -------
    Mcfe - Total                           57,266,216      47,632,162
                                           ----------      ----------
    >>

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    Revenues
    Natural gas sales                        $211,551        $191,577
    Oil sales                                  25,949          21,727
                                               ------          ------
    Total operating revenues                  237,500         213,304
                                              -------         -------
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    Expenses
         Lease operating expenses              13,229          10,551
         Production taxes                      21,830          21,660
         Gathering fees                        13,057          11,402
                                               ------          ------
    Total lease operating costs                48,116          43,613
                                               ------          ------
    >>

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         Transportation charges                16,337          15,187
         Depletion and depreciation            74,002          49,824
         Write-down of proved oil and
          gas properties                            -               -
         General and administrative             2,064           1,141
         Stock compensation                     3,823           3,278
                                                -----           -----
    Total operating expenses                  144,342         113,043
                                              -------         -------
    >>

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    Other income (expense), net                    75              37
    Interest and debt expense, net            (14,495)        (10,229)
    Litigation expense                              -               -
    Realized gain on commodity
     derivatives                               39,259          30,185
    Unrealized gain (loss) on
     commodity derivatives                    (59,910)         26,030
                                              -------          ------
    Income (loss) before income
     taxes                                     58,087         146,284
    >>

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    Income tax provision - current             14,671          15,348
    Income tax provision (benefit)
     -deferred                                  5,468          35,545
                                                -----          ------
    >>

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    Net income (loss)                         $37,948         $95,391
                                              -------         -------
    >>

    <<
    Impairment of proved oil and
     gas properties,                   $            -  $            -
      net of tax
    Litigation expense, net of tax                  -               -
    Unrealized (gain) loss on
     commodity derivatives, net of
     tax                                       38,642         (16,893)
                                               ------         -------
    Adjusted net income (3)                   $76,590         $78,498
                                              -------         -------
    >>

    <<
    Operating cash flow (2)                  $198,672        $172,221
                                             --------        --------
    (see non-GAAP reconciliation)
     (2)
    >>

    <<
    Weighted average shares - basic           152,527         151,456
    Weighted average shares -
     diluted (1)                              154,254         154,433
    >>

    <<
    Earnings per share
      Net income - basic                        $0.25           $0.63
      Net income - fully diluted                $0.25           $0.62
    >>

    <<
    Adjusted earnings per share
      Adjusted net income -basic (3)            $0.50           $0.52
      Adjusted net income -fully
       diluted (3)                              $0.50           $0.51
    >>

    <<
    Realized Prices
    Natural gas (Mcf), including
     realized gain on commodity
     derivatives                                $4.54           $4.86
    Natural gas (Mcf), excluding
     realized gain on commodity
     derivatives                                $3.83           $4.20
    Oil liquids (Bbls)                         $75.45          $65.97
    >>

    <<
    Costs Per Mcfe
      Lease operating expenses                  $0.23           $0.22
      Production taxes                          $0.38           $0.45
      Gathering fees                            $0.23           $0.24
      Transportation charges                    $0.29           $0.32
      Depletion and depreciation                $1.29           $1.05
      General and administrative -
       total                                    $0.10           $0.09
      Interest and debt expense, net            $0.25           $0.21
                                                -----           -----
                                                $2.77           $2.59
                                                -----           -----
    >>

    <<
    Note: Amounts on a per
     Mcfe basis may not
     total due to
     rounding.
    >>

    <<
    Adjusted Margins
         Adjusted Net Income (4)                   28%             32%
         Adjusted Operating Cash Flow
          Margin (5)                               72%             71%



    >>

    <<
    Ultra Petroleum Corp.
    Supplemental Balance Sheet Data
    All amounts expressed in US$000's
    >>

    <<
                                                 As of
                                                 -----
                                         December        December
                                            31,             31,
                                              2010           2009
                                              ----           ----
                                       (Unaudited)
    Cash and cash equivalents              $70,834        $14,254
    Long-term debt
       Bank indebtedness                         -        260,000
       Senior notes                      1,560,000        535,000
                                         ---------        -------
                                        $1,560,000       $795,000
                                        ----------       --------


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    <<
    Reconciliation of Operating Cash Flow and Cash Provided by Operating
    Activities (unaudited)
    All amounts expressed in US$000's
    The following table reconciles net cash provided by operating
    activities with operating cash flow as derived from the company's
    financial information.
    >>

    <<
                                          For the Year Ended
                                             December 31,
                                             ------------
                                           2010          2009
                                           ----          ----
    >>

    <<
    Net cash provided by
     operating activities              $824,728      $592,641
      Net changes in operating
       assets and liabilities and
       other non-cash items*            (60,228)       44,916
                                        -------        ------
    Net cash provided by
     operating activities before
     changes in operating assets
     and liabilities                   $764,500      $637,557
                                       --------      --------



    >>

    <<
                                           For the Quarter
                                                Ended
                                            December 31,
                                            ------------
                                          2010          2009
                                          ----          ----
    >>

    <<
    Net cash provided by
     operating activities             $220,584      $170,305
      Net changes in operating
       assets and liabilities and
       other non-cash items*          (21,912)         1,916
                                       -------         -----
    Net cash provided by
     operating activities before
     changes in operating assets
     and liabilities                  $198,672      $172,221
                                      --------      --------
    >>

    <<
    (1) Fully diluted shares excludes 2.2 million potentially dilutive
    instruments that were anti-dilutive due to the net loss for the
    year to date period ended December 31, 2009.
    We report our financial results in accordance with accounting
    principles generally accepted in the United States of America
    ("GAAP"). However, management believes certain non-GAAP performance
    measures may provide users of this financial information with
    additional meaningful comparisons between current results and the
    results of our peers and of prior periods.
    (2) Operating cash flow is defined as net cash provided by operating
    activities before changes in operating assets and liabilities.
    Management believes that the non-GAAP measure of operating cash
    flow is useful as an indicator of an oil and gas exploration and
    production company's ability to internally fund exploration and
    development activities and to service or incur additional debt. The
    company has also included this information because changes in
    operating assets and liabilities relate to the timing of cash
    receipts and disbursements which the company may not control and may
    not relate to the period in which the operating activities occurred.
    Operating cash flow should not be considered in isolation or as a
    substitute for net cash provided by operating activities prepared in
    accordance with GAAP.
    (3) Adjusted net income is defined as net income (loss) adjusted to
    exclude certain charges or amounts in order to provide users of this
    financial information with additional meaningful comparisons between
    current results and the results of prior periods. Management
    presents this measure because (i) it is consistent with the manner
    in which the company's performance is measured relative to the
    performance of its peers, (ii) this measure is more comparable to
    earnings estimates provided by securities analysts, and (iii)
    charges or amounts excluded cannot be reasonably estimated and
    guidance provided by the company excludes information regarding
    these types of items. These adjusted amounts are not a measure of
    financial performance under GAAP.
    (4) Adjusted Net Income Margin is defined as Adjusted Net Income
    divided by the sum of Oil and Natural Gas Sales plus Realized Gain
    (Loss) on Commodity Derivatives. Management presents this measure
    because (i) it is consistent with the manner in which the company's
    performance is measured relative to the performance of its peers,
    and (ii) charges or amounts excluded cannot be reasonably estimated
    and guidance provided by the company excludes information regarding
    these types of items. These adjusted amounts are not a measure of
    financial performance under GAAP
    (5) Adjusted Operating Cash Flow Margin is defined as Operating Cash
    Flow divided by the sum of Oil and Natural Gas Sales plus Realized
    Gain (Loss) on Commodity Derivatives. Management presents this
    measure because (i) it is consistent with the manner in which the
    company's performance is measured relative to the performance of its
    peers, and (ii) charges or amounts excluded cannot be reasonably
    estimated and guidance provided by the company excludes information
    regarding these types of items. These adjusted amounts are not a
    measure of financial performance under GAAP.
    *Other non-cash items include excess tax benefit from stock based
    compensation and other.


    About Ultra Petroleum

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Ultra Petroleum Corp. is an independent exploration and production company focused on developing its long-life natural gas reserves in the Green River Basin of Wyoming - the Pinedale and Jonah Fields and is in the ongoing exploration and early development stage in the Appalachian Basin of Pennsylvania. Ultra is listed on the New York Stock Exchange and trades under the ticker symbol "UPL". The company had 152,567,813 shares outstanding on December 31, 2010.

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    This release can be found at http://www.ultrapetroleum.com

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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, we 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 our filings with the SEC, particularly in the section entitled "Risk Factors" included in our Annual Report on Form 10-K for our most recent fiscal year and from time to time in other filings made by us with the SEC. These risks and uncertainties include increased competition, the timing and extent of changes in prices for oil and gas, the timing and extent of the company's success in discovering, developing, producing and estimating reserves, the effects of weather and government regulation, availability of oil field personnel, services, drilling rigs and other equipment, and other factors listed in the reports filed by the company with the SEC. Full details regarding the selected financial information provided above will be available in the company's report on Form 10-K for the year ended December 31, 2010.

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SOURCE Ultra Petroleum Corp.

For further information: Kelly L. Whitley, Director Investor Relations, +1-281-876-0120, Ext. 302, or Julie E. Danvers, Investor Relations Analyst, +1-281-876-0120, Ext. 304, both of Ultra Petroleum Corp., info@ultrapetroleum.com Web Site: http://www.ultrapetroleum.com

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Ultra Petroleum Corp.

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