Ultra Petroleum Announces First Six Months and Second Quarter 2010 Financial
and Operating Results, Reaffirms 2010 Capital Budget and Production Guidance,
and Increases Hedges


    



    
</pre>
<p><span class="xn-location">HOUSTON</span>, <span class="xn-chron">July 30</span> /CNW/ -- Ultra Petroleum Corp. (NYSE:   UPL) continued to deliver strong financial and operating performance for the first half and the second quarter of 2010. Highlights include:</p>
<pre>
    

    --  Record natural gas and crude oil production of 100.9 Bcfe for the
first
        six months of 2010, a 17 percent increase from the prior year
    --  Produced record volumes of 52.4 Bcfe in the second quarter of 2010, an
        increase of 18 percent from the second quarter of 2009
    --  Operating cash flow(1) for the first half of 2010 of $367.1 million,
an
        increase of 25 percent from same period in 2009
    --  Operating cash flow(1) of $178.2 million for the quarter ended June
30,
        2010, an increase of 6 percent from the same quarter a year ago
    --  Earnings for the six month period ended June 30, 2010, of $167.7
        million or $1.09 per diluted share - adjusted, an increase of 42
        percent from the same period in 2009
    --  Earnings of $82.8 million in the second quarter of 2010, or $0.54 per
        diluted share - adjusted, an increase of 6 percent from 2009
    --  Outstanding 2010 year-to-date (adjusted) returns: 68 percent cash flow
        margin, 31 percent net income margin, 44 percent return on equity, and
        19 percent return on capital
    --  Superior returns in the second quarter of 2010 (adjusted): 67 percent
        cash flow margin, 31 percent net income margin, 42 percent return on
        equity, and 18 percent return on capital


    
</pre>
<p>"Ultra's profitable results for the first half of 2010 were driven by higher price realizations and increased production volumes. On an unhedged basis, our realized natural gas price for the first six months of 2010 increased more than 40 percent over the same period last year. We achieved higher natural gas prices while preserving our industry-leading cost structure, keeping it flat with the prior year. Ultra Petroleum's sustainable growth coupled with our consistently low cost structure offers a compelling value proposition," stated Michael D. Watford, Chairman, President and Chief Executive Officer.</p>
<p/>
<p>Natural gas and crude oil production for the six month period ended <span class="xn-chron">June 30, 2010</span>, increased to 100.9 billion cubic feet equivalent (Bcfe) compared to 86.6 Bcfe for the six month period ended <span class="xn-chron">June 30, 2009</span>, a 17 percent increase. Production for the first six months of 2010 was comprised of 97.0 billion cubic feet (Bcf) of natural gas and 649.8 thousand barrels (MBbls) of condensate.</p>
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</pre>
<p>Operating cash flow(1) for the first half of 2010 was <span class="xn-money">$367.1 million</span>, an increase of 25 percent, as compared to <span class="xn-money">$292.7 million</span> for the six months ended <span class="xn-chron">June 30, 2009</span>. Adjusted earnings for the six month period ended <span class="xn-chron">June 30, 2010</span>, increased 42 percent over the same period a year ago, registering <span class="xn-money">$167.7 million</span> or <span class="xn-money">$1.09</span> per diluted share.</p>
<p/>
<p>The average realized natural gas price during the six month period ended <span class="xn-chron">June 30, 2010</span>, was <span class="xn-money">$5.09</span> per thousand cubic feet (Mcf), including realized gains and losses on commodity hedges. This compares to <span class="xn-money">$4.76</span> per Mcf during the first six months of 2009, an increase of seven percent.  Excluding realized gains and losses on commodity hedges, the company's average price for natural gas increased 42 percent to <span class="xn-money">$4.71</span> per Mcf, as compared to <span class="xn-money">$3.31</span> per Mcf for the same period a year ago. The realized condensate price was <span class="xn-money">$68.57</span> per barrel (Bbl), an increase of 83 percent over the prior year period, as compared to <span class="xn-money">$37.56</span> per Bbl during the six month period ended <span class="xn-chron">June 30, 2009</span>.</p>
<p/>
<p>For the second quarter of 2010, production of natural gas and crude oil increased 18 percent to a record 52.4 Bcfe, which compares to production of 44.5 Bcfe during the second quarter of 2009. Ultra Petroleum's second quarter 2010 production levels were the highest ever achieved by the company. The company's production for the second quarter was comprised of 50.4 Bcf of natural gas and 327.9 Mbls of condensate.</p>
<p/>
<p>Ultra Petroleum reported strong operating cash flow(1) of <span class="xn-money">$178.2 million</span> for the quarter ended <span class="xn-chron">June 30, 2010</span>, a six percent increase over the same period in 2009. Adjusted net income was <span class="xn-money">$82.8 million</span>, or <span class="xn-money">$0.54</span> per diluted share for the second quarter, compared to <span class="xn-money">$78.3 million</span>, or <span class="xn-money">$0.51</span> per diluted share for the same period a year ago. For the second quarter of 2010, Ultra's reported net income was <span class="xn-money">$61.5 million</span> or <span class="xn-money">$0.40</span> per diluted share, which compares to a net loss of <span class="xn-money">$25.5 million</span> or (<span class="xn-money">$0.17</span>) per diluted share in the prior year period. The company recorded approximately <span class="xn-money">$6.4 million</span>, net of taxes, of litigation expense in the second quarter, the first such expense in ten years. Second quarter 2010 results also included an unrealized, mark-to-market loss of <span class="xn-money">$14.9 million</span>, net of taxes, on the company's commodity hedges. The unrealized loss on commodity hedges and anomalous litigation expense are typically excluded by the investment community in published estimates.</p>
<p/>
<p>During the second quarter of 2010, Ultra Petroleum's average realized natural gas price was <span class="xn-money">$4.83</span> per Mcf, including realized gains and losses on commodity hedges. This is a slight decrease as compared to <span class="xn-money">$5.04</span> per Mcf in the second quarter of 2009. Excluding realized gains and losses on commodity hedges, the company's average realized price for natural gas was <span class="xn-money">$4.09</span> per Mcf. This is a 51 percent increase as compared to <span class="xn-money">$2.71</span> per Mcf in the second quarter of 2009. The realized condensate price in the second quarter of 2010 was <span class="xn-money">$67.64</span> per Bbl, an increase of 46 percent in comparison to <span class="xn-money">$46.27</span> per Bbl for the same period in 2009.</p>
<p/>
<p>"Our strong performance this quarter was aided by the 51 percent increase in unhedged natural gas prices. Rockies natural gas prices have strengthened significantly in 2010," commented Watford.</p>
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    Capital Investment Program

    
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<p>Ultra Petroleum invested approximately <span class="xn-money">$905.0 million</span> during the first six months of 2010 towards the 2010 capital investment program. Approximately <span class="xn-money">$315.0 million</span> was devoted to Wyoming development and facilities investments while the company spent <span class="xn-money">$170.0 million</span> toward Pennsylvania development and facilities activities. In addition, Ultra invested <span class="xn-money">$400.0 million</span> in land acquisitions in Pennsylvania. As previously announced, the company's total estimated capital investment program for 2010 of <span class="xn-money">$1,450.0 million</span> is expected to remain unchanged for the remainder of the year.</p>
<p/>
<p> </p>
<p> 2010 Capital Expenditure Update ($ millions)</p>
<p> </p>
<pre>
    
                                 Annual       Year-to-
                                  Budget    Date Actual
                                  ------    -----------
      Wyoming:
        Drilling                      $575         $300
        Facilities                      25           15
                                       ---          ---
         Sub Total                    $600         $315
      Pennsylvania:
        Drilling                      $375         $155
        Facilities                      65           15
         Sub Total                    $440         $170
         Corporate
        Other                          $10          $20
                                       ---          ---
        Sub Total Capital
         Budget                     $1,050         $505
        Land Acquisitions             $400         $400
                                      ----         ----
        Total Capital Budget        $1,450         $905
                                    ======         ====


    
</pre>
<p>"We opportunistically expanded our second high-growth, high-returning asset this year through our strategic land acquisition in the Marcellus Shale. Growing and adding scale to our Marcellus position affords us two focus areas that possess the cost structure, margins, and returns to build profitably upon our existing solid foundation," Watford added.</p>
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    Wyoming - Operational Highlights

    
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<p>Ultra Petroleum continues to achieve significant efficiency gains in its operated drilling program. For the first half of 2010, Ultra drilled and cased to total depth (TD) 74 gross (50 net) wells compared to 55 gross (35 net) wells for the six months ended <span class="xn-chron">June 30, 2009</span>, an increase of 35 percent over the prior year. During the second quarter of 2010, Ultra reached TD on 36 gross (24 net) Pinedale wells. This compares to 19 gross (12 net) wells drilled and cased in the second quarter 2009, an increase of 90 percent. In the second quarter, Ultra established a new standard for drilling performance by continuing to drive down average drill time in Pinedale. For the quarter, Ultra averaged 14.5 days per well spud to TD, which compares to an average of 20.6 days in the second quarter of 2009, or a 30 percent improvement over the prior year period. Further highlighting decreased drill times, 86 percent of the wells drilled in the second quarter reached TD in 15 days or less while 94 percent were drilled in less than 20 days. These operational milestones led to continued decreasing well costs. Ultra's completed well costs in Wyoming averaged <span class="xn-money">$4.6 million</span> for the second quarter of 2010, a reduction of 12 percent in comparison to <span class="xn-money">$5.25 million</span> for the second quarter of 2009.</p>
<p/>
<p> </p>
<p>                       Improving Efficiencies</p>
<p> </p>
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                               2007  2008  2009  Q1 2010   Q2 2010
                               ----  ----  ----  -------   -------
    Spud to TD (days)            35    24    20        16        15
    Rig release to rig release
     (days)                      48    32    24        20        17
    % wells drilled < 20 days     2%   27%   73%       92%       94%
    Well cost - pad ($MM)      $6.2  $5.5  $5.0      $4.8      $4.6


    
</pre>
<p>Ultra completed approximately 2,380 frac stages in the first half of 2010 across almost 90 wells, an average of 26 frac stages per well. This compares to 1,510 frac stages completed in the first six months of 2009 across 61 wells, an average of 25 stages per well. In the second quarter 2010, Ultra completed 48 wells averaging 27 stages per well for a total of nearly 1,300 frac stages, as compared to 627 frac stages completed in the second quarter of 2009 across 23 wells, an average of 27 stages per well.</p>
<p/>
<p>For the six months ended <span class="xn-chron">June 30, 2010</span>, Ultra brought on production 127 gross (69 net) wells, as compared to 115 gross (56 net) wells in the first half of 2009, an increase of 10 percent. Ultra placed 68 gross (37 net) new Pinedale wells on production during the second quarter of 2010, as compared to 64 gross (26 net) wells in the second quarter of 2009. The average initial production (IP) rate in the second quarter of 2010 for the Ultra-operated wells was 9.8 million cubic feet (MMcf) per day. The average estimated ultimate recovery (EUR) for the Ultra-operated wells was 6.2 billion cubic feet equivalent (Bcfe) for the quarter ended <span class="xn-chron">June 30, 2010</span>.</p>
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    Pennsylvania - Operational Highlights

    
</pre>
<p>During the first six months of 2010, Ultra participated in the drilling of 64 gross (38 net) horizontal Marcellus wells in Pennsylvania. In the second quarter of 2010, Ultra drilled 37 gross (22 net) Pennsylvania horizontal Marcellus wells. During the second quarter of 2010, the company's horizontal wells averaged approximately 4,400 feet lateral length and 12 frac stages. In the first half of 2010, the company brought on line 21 gross (14 net) horizontal Marcellus wells. Ultra connected 20 gross (13 net) new horizontal Marcellus wells to sales during the second quarter of 2010. Ultra's net production in Pennsylvania averaged 33 MMcf per day, while reaching a peak of 46 MMcf per day in the quarter-ended <span class="xn-chron">June 30, 2010</span>. As of the end of the second quarter of 2010, there were 36 gross (22 net) horizontal Marcellus wells producing in Pennsylvania. The early production performance of these wells continues to exceed the company's current type-curve expectations. To date, the average daily production rate on day 60 is over 3.0 MMcf per day among all of the horizontal wells producing currently. Ultra continues to swiftly incorporate information gained to enhance future well performance.</p>
<p/>
<p>Ultra Petroleum continues to expand its leasehold position in the preferred Pennsylvania Marcellus Shale. The company now owns approximately 470,000 gross (255,000 net) acres in north central Pennsylvania. In the first half of 2010, the company increased its net acreage position by over 50 percent, adding approximately 85,000 net acres. Ultra started the year with approximately 320,000 gross (170,000 net) acres. The largely contiguous acreage was strategically added to the company's core position encompassing Tioga, Lycoming, Potter, Clinton and Centre counties.</p>
<p/>
<p>"We are fortunate to be early entrants into Pennsylvania where we have assembled an outstanding acreage position at attractive lease terms. We accumulated our net position for significantly less than current industry averages. In terms of accessible Pennsylvania Marcellus acreage, we are one of the top ten largest acreage holders. Given the robust economics we enjoy and our low cost structure, we will be able to generate significant returns for our shareholders," stated Watford.</p>
<p/>
<p>"Combining our 8 Tcfe of undeveloped reserves in Pennsylvania with our 12 Tcfe in Wyoming, I am comfortable we have 20 Tcfe of identified, undeveloped future reserves in our two high-returning, high-margin assets. Future capital to develop these reserves is estimated to be <span class="xn-money">$24.7 billion dollars</span>, which implies a finding and development cost of <span class="xn-money">$1.24</span> per Mcfe," added Watford.</p>
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    Commodity Hedges

    
</pre>
<p>Ultra Petroleum opportunistically layered on additional 2011 hedges to underpin the excellent economics of its capital investments. This hedging strategy helps increase certainty around cash flow to improve Ultra's ability to meet its anticipated capital expenditure requirements. The total volume of commodity hedges for 2011 is currently 133.2 Bcf at a weighted-average realized price of <span class="xn-money">$5.83</span> per Mcf. Currently, the commodity hedges represent over 50 percent of the company's 2011 forecasted production of 260 Bcfe.</p>
<p/>
<p>In addition, the company has 50.4 Bcf hedged for the remainder of 2010 at a weighted-average realized price of <span class="xn-money">$5.49</span> per Mcf.</p>
<p/>
<p>"Our hedge position for 2010 and 2011 underpins the excellent economics in our business. These hedged volumes along with our 73 Bcf of annual firm transportation on Rockies Express create diversified markets for financial success," stated Watford.</p>
<p/>
<p>As of today, Ultra Petroleum has the following positions in place to mitigate its natural gas commodity price exposure:</p>
<p/>
<p> </p>
<p> </p>
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                   Q3 2010          Q4 2010          Total          Total 2011
                   -------          ------- Balance - 2010          ----------
                                            --------------
               Total Average  Total Average  Total Average  Total  Average
              Volume   Price Volume   Price Volume   Price Volume   Price
               (Bcf)  ($/Mcf) (Bcf)  ($/Mcf) (Bcf)  ($/Mcf) (Bcf)  ($/Mcf)
               -----  ------- -----  ------- -----  ------- -----  -------
    
</pre>
<p> </p>
<pre>
    
    NW
     Rockies     23.9   $5.33   20.9   $5.33   44.8   $5.33  62.0*   $5.41
    Northeast     2.8   $6.79    2.8   $6.79    5.6   $6.79  71.2*   $6.19
                  ---            ---            ---          -----
    Total        26.7   $5.48   23.7   $5.50   50.4   $5.49  133.2   $5.83
    
</pre>
<p> </p>
<pre>
    
    * The total volume of 2011 hedges are equally divided across the four
    quarters



    Natural Gas Marketing Update

    
</pre>
<p>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). The basis differential is expressed as a percentage of Henry Hub.</p>
<p/>
<p> </p>
<p>         Basis Differential as a Percentage (%) of Henry Hub</p>
<p> </p>
<pre>
    
                                                 NW Rockies      Dominion
                                                                  South
    Historical Average Basis Differential (2006
     - 2009)                                              71            105
    Current Average Basis Differential (Balance
     2010)                                                87            103
    Future Average Basis Differential (2011 -
     2012)                                                91            103


    
</pre>
<p>"Going forward, price spreads should be relatively flat across the US, while basis in the Rockies continues to strengthen in conjunction with new pipeline construction and reduced supply," stated Watford. "In fact, Wyoming natural gas production has been down the past seven months, consistent with industry's decreasing activity in the Rockies," Watford added.</p>
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    Management Update

    
</pre>
<p>During the second quarter, Ultra created a New Ventures group headed by <span class="xn-person">Sally Zinke</span> as Director, New Ventures. <span class="xn-person">Ms. Zinke</span> and her team are charged with finding new, significant capital investment opportunities for the company that generate similar returns as the Wyoming Lance and Pennsylvania Marcellus. <span class="xn-person">Ms. Zinke</span> began working for Ultra in 2000 in the Geology and Geophysical Department while most recently serving as Director, Exploration. In this capacity, <span class="xn-person">Ms. Zinke</span> was instrumental in pioneering the growth and development of Pinedale, as she played a key role on the team that elevated the unconventional natural gas play from relative obscurity to become one of the top five natural gas fields in <span class="xn-location">North America</span> based on estimated reserves. Furthermore, <span class="xn-person">Ms. Zinke</span>, leveraging the expertise refined in Wyoming, played an integral role in the company's initial exploration stages of the Marcellus Shale to help establish the play as a second core property for Ultra Petroleum.</p>
<p/>
<p>"We are delighted to have Sally head our New Ventures group as her wealth of industry experience as well as technical and business skills will parlay well into the success of evaluating new investment opportunities. Of the potential prospects our New Ventures group has evaluated this year, the economic returns of our strategic Marcellus acquisition have proven to be superior to any of the other opportunities we have considered," stated Watford.</p>
<p/>
<p>In connection with <span class="xn-person">Ms. Zinke</span>'s new role, Ultra is pleased to announce that Douglas Selvius joined the company in <span class="xn-chron">April 2010</span> as Director, Exploration to assume responsibilities of leading the Geological and Geophysical efforts in Wyoming and Pennsylvania. With over 27 years in the oil and gas industry, <span class="xn-person">Mr. Selvius</span> most recently headed SM Energy Company's Gulf Coast and Offshore Exploration activities (previously known as St. <span class="xn-person">Mary Land</span> and Exploration Company). A graduate of the University of Michigan with a degree in Geology, <span class="xn-person">Mr. Selvius</span> has served in multiple operational and managerial roles at various exploration and production companies.</p>
<p/>
<p>"Doug is a welcomed addition to our leadership team and we are looking forward to leveraging his exceptional talents and breadth of experience as we continue to execute on our strategy of profitable growth," commented Watford.</p>
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    Production Guidance

    
</pre>
<p>Ultra Petroleum is reaffirming its annual natural gas and crude oil production guidance for 2010 of 213 to 216 Bcfe. Production for 2010 is an 18 to 20 percent increase over 2009's record annual production of 180.1 Bcfe.</p>
<p/>
<p> </p>
<p>2010 Estimated Total Production (Bcfe)</p>
<p> </p>
<pre>
    
        1st Quarter(A)                 48.5
        2nd Quarter(A)                 52.4
        3rd Quarter(E)      54.5 - 55.5
        Full-Year 2010(E)   213 - 216


    
</pre>
<p>At this time, Ultra is reaffirming production guidance for 2011 and 2012 targeting 20 percent per annum production growth.</p>
<p/>
<p> </p>
<p>      Estimated Total Production (Bcfe)</p>
<p> </p>
<pre>
    
                                   2011          2012
        Total Production
         (Bcfe)              250 - 260     295 - 310


    Financial Strength

    
</pre>
<p>Ultra has a strong balance sheet, ending the quarter with 88 percent of its outstanding debt composed of long-term, fixed rate debt with an average remaining term of approximately 8 years. On <span class="xn-chron">June 30, 2010</span>, Ultra had <span class="xn-money">$1.36 billion</span> in unused debt capacity.</p>
<pre>
    

    Price Realizations and Differentials Guidance

    
</pre>
<p>In the third quarter of 2010, the company's realized natural gas price is expected to average 4 to 6 percent below the NYMEX price due to regional differentials, before consideration of any hedging activity. Realized pricing for condensate is expected to be about <span class="xn-money">$10.00</span> less than the average NYMEX crude oil price.</p>
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    Expense Guidance

    
</pre>
<p>The following table presents the company's expected expenses in the third quarter of 2010 per Mcfe assuming a <span class="xn-money">$4.63</span> per mmbtu Henry Hub natural gas price and a <span class="xn-money">$76.87</span> per Bbl NYMEX crude oil price:</p>
<p/>
<p> </p>
<p> </p>
<pre>
    
        Costs Per Mcfe                         Q3 2010
        --------------                         -------
        Lease operating expenses               $0.22 - 0.24
        Production taxes                       $0.44 - 0.46
        Gathering fees                         $0.24 - 0.26
        Transportation charges                 $0.31 - 0.33
        Depletion and depreciation             $1.11 - 1.13
        General and administrative -
         total                                 $0.12 - 0.13
        Interest and debt expense              $0.25 - 0.27
                                               ------------
        Total costs per Mcfe                   $2.69 - 2.82


    Income Tax Guidance

    
</pre>
<p>For the year, Ultra projects a 35.5 percent effective tax rate (based on adjusted net income) with approximately 2 to 3 percent of that amount expected to be currently payable.</p>
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    Other Events During the Quarter

    
</pre>
<p>Ultra Petroleum joined the broad-market Russell 3000® Index when Russell Investments reconstituted its comprehensive set of US and global equity indexes on <span class="xn-chron">June 25, 2010</span>. Annual reconstitution of Russell's US indexes captures the 4,000 largest US stocks as of the end of May, ranking them by total market capitalization. Membership in the Russell 3000, which remains in place for one year, means automatic inclusion in the large-cap Russell 1000® Index or small-cap Russell 2000® Index as well as the appropriate growth and value style indexes. An industry-leading <span class="xn-money">$3.9 trillion</span> in assets currently are benchmarked to them. Total returns data for the Russell 3000 and other Russell Indexes is available at <a href="http://www.russell.com/Indexes/performance/default.asp">http://www.russell.com/Indexes/performance/default.asp</a>.</p>
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    Financial tables to follow.


    
</pre>
<p> </p>
<p> </p>
<pre>
    
    Ultra Petroleum Corp.
    Consolidated Statement of Operations (unaudited)
    All amounts expressed in US$000's
    
</pre>
<p> </p>
<p> </p>
<pre>
    
                                               For the Six Months
                                                      Ended
                                                    June 30,
                                                    --------
                                             2010              2009
                                             ----              ----
    Volumes
         Oil liquids (Bbls)               649,794           649,243
         Natural gas (Mcf)                97,016,440        82,682,313
                                          ----------        ----------
         Mcfe - Total                     100,915,204        86,577,771
                                          -----------        ----------
    
</pre>
<p> </p>
<pre>
    
    Revenues
         Oil sales                        $44,557           $24,386
         Natural gas sales                456,955           273,908
                                           ------            ------
    Total operating revenues              501,512           298,294
                                           ------            ------
    
</pre>
<p> </p>
<pre>
    
    Expenses
         Lease operating expenses          21,858            20,387
         Production taxes                  50,893            30,089
         Gathering fees                    24,453            22,364
                                            -----             -----
    Total lease operating costs            97,204            72,840
                                            -----             -----
    
</pre>
<p> </p>
<pre>
    
         Transportation charges            32,427            26,540
         Depletion and depreciation       108,120           105,635
         Write-down of proved oil and
          gas properties                       -         1,037,000
         General and administrative         6,370             5,405
         Stock compensation                 6,137             4,819
                                             ----              ----
    Total operating expenses              250,258         1,252,239
                                           ------          --------
    
</pre>
<p> </p>
<pre>
    
    Other income (expense), net               173            (3,117)
    Litigation expense                    (9,902)               -
    Interest and debt expense             (23,156)          (17,195)
    Realized gain (loss) on
     commodity derivatives                 36,985           119,561
    Unrealized (loss) gain on
     commodity derivatives                158,932            26,169
                                           -------            ------
    Income (loss) before income
     taxes                                414,286         (828,527)
    
</pre>
<p> </p>
<pre>
    
    Income tax provision
     (benefit) -current                     2,501                23
    Income tax provision
     (benefit) -deferred                  147,916         (290,436)
                                           -------          --------
    
</pre>
<p> </p>
<pre>
    
    Net income (loss)                     $263,869         $(538,114)
                                          --------         ---------
    
</pre>
<p> </p>
<pre>
    
    Impairment of proved oil and
     gas properties,                   $       -          $673,013
      net of tax
    Litigation expense, net of
     tax                                    6,387               -
    Unrealized loss (gain) on
     commodity derivatives, net
     of tax                               (102,511)          (16,984)
                                          --------           -------
    Adjusted net income                   $167,745          $117,915
                                          --------          --------
    
</pre>
<p> </p>
<p> </p>
<pre>
    
    Operating cash flows (1)              $367,110          $292,735
                                          --------          --------
    (1) (see non-GAAP
     reconciliation)
    Weighted average shares -
     basic                                152,187           151,285
    Weighted average shares -
     diluted                              154,268           151,285
    
</pre>
<p> </p>
<pre>
    
    Earnings per share
      Net income - basic                    $1.73            ($3.56)
      Net income - fully diluted            $1.71            ($3.56)
    
</pre>
<p> </p>
<pre>
    
    Adjusted earnings per share
      Adjusted net income - basic           $1.10             $0.78
      Adjusted net income -fully
       diluted (4)                          $1.09             $0.77
    
</pre>
<p> </p>
<pre>
    
    Realized Prices
      Oil liquids (Bbls)                   $68.57            $37.56
      Natural gas (Mcf), including
       realized gain
       (loss) on commodity
       derivatives                          $5.09             $4.76
      Natural gas (Mcf), excluding
       realized gain (loss) on
       commodity derivatives                $4.71             $3.31
    
</pre>
<p> </p>
<pre>
    
    Costs Per Mcfe
      Lease operating expenses              $0.22             $0.24
      Production taxes                      $0.50             $0.35
      Gathering fees                        $0.24             $0.26
      Transportation charges                $0.32             $0.31
      Depletion and depreciation            $1.07             $1.22
      General and administrative -
       total                                $0.12             $0.12
      Interest and debt expense             $0.23             $0.20
                                            -----             -----
                                            $2.71             $2.68
                                            -----             -----
    
</pre>
<p> </p>
<pre>
    
    Note: Amounts on a per
     Mcfe basis may not total
     due to rounding.
    
</pre>
<p> </p>
<pre>
    
    Adjusted Margins
      Adjusted Net Income (2)                  31%               28%
      Adjusted Operating Cash Flow
       Margin (3)                              68%               70%
    
</pre>
<p> </p>
<pre>
    
    Ultra Petroleum Corp.
    Supplemental Balance
     Sheet Data
    All amounts expressed in
     US$000's
                                                  As of
                                                  -----
                                                           December
                                          June 30,                   31,
                                             2010              2009
                                             ----              ----
                                           (Unaudited)
    Cash and cash equivalents              $8,329           $14,254
    Long-term debt
       Bank indebtedness                  146,000           260,000
       Senior notes                       1,035,000           535,000
                                           --------            ------
                                          $1,181,000          $795,000
                                           ----------          --------
    
</pre>
<p> </p>
<p> </p>
<pre>
    
                                                   For the Quarter
                                                        Ended
                                                      June 30,
                                                      --------
                                                 2010                  2009
                                                 ----                  ----
    Volumes
         Oil liquids (Bbls)                   327,919               329,835
         Natural gas (Mcf)                 50,447,951            42,491,032
                                           ----------            ----------
         Mcfe - Total                      52,415,465            44,470,042
                                           ----------            ----------
    
</pre>
<p> </p>
<pre>
    
    Revenues
         Oil sales                            $22,180               $15,262
         Natural gas sales                    206,208               115,079
                                               ------                ------
    Total operating revenues                  228,388               130,341
                                               ------                ------
    
</pre>
<p> </p>
<pre>
    
    Expenses
         Lease operating expenses              11,534                10,144
         Production taxes                      22,487                12,738
         Gathering fees                        12,498                11,573
                                                -----                 -----
    Total lease operating
     costs                                     46,519                34,455
                                               ------                ------
    
</pre>
<p> </p>
<pre>
    
         Transportation charges                16,522                13,185
         Depletion and
          depreciation                         56,853                44,974
         Write-down of proved oil
          and gas properties                        -                     -
         General and
          administrative                        2,749                 2,956
         Stock compensation                     3,356                 2,694
                                                 ----                  ----
    Total operating expenses                  125,999                98,264
                                               ------                 -----
    
</pre>
<p> </p>
<pre>
    
    Other income (expense),
     net                                           22                  (505)
    Litigation expense                         (9,902)                    -
    Interest and debt expense                 (11,437)               (9,897)
    Realized gain (loss) on
     commodity derivatives                     37,654                99,205
    Unrealized (loss) gain on
     commodity derivatives                    (23,088)             (159,903)
                                              -------              --------
    Income (loss) before
     income taxes                              95,638               (39,023)
    
</pre>
<p> </p>
<pre>
    
    Income tax provision
     (benefit) -current                           696                     -
    Income tax provision
     (benefit) -deferred                       33,449               (13,497)
                                               ------               -------
    
</pre>
<p> </p>
<pre>
    
    Net income (loss)                         $61,493              $(25,526)
                                              -------              --------
    
</pre>
<p> </p>
<pre>
    
    Impairment of proved oil
     and gas properties,                 $          -        $            -
      net of tax
    Litigation expense, net
     of tax                                     6,387                     -
    Unrealized loss (gain) on
     commodity derivatives,
     net of tax                                14,892               103,777
                                               ------               -------
    Adjusted net income                       $82,772               $78,251
                                              -------               -------
    
</pre>
<p> </p>
<p> </p>
<pre>
    
    Operating cash flows (1)                 $178,239              $168,549
                                             --------              --------
    (1) (see non-GAAP
     reconciliation)
    Weighted average shares -
     basic                                    152,300               151,331
    Weighted average shares -
     diluted                                  154,310               151,331
    
</pre>
<p> </p>
<pre>
    
    Earnings per share
      Net income - basic                        $0.40                ($0.17)
      Net income -fully
       diluted                                  $0.40                ($0.17)
    
</pre>
<p> </p>
<pre>
    
    Adjusted earnings per
     share
      Adjusted net income -
       basic                                    $0.54                 $0.52
      Adjusted net income -
       fully diluted (4)                        $0.54                 $0.51
    
</pre>
<p> </p>
<pre>
    
    Realized Prices
      Oil liquids (Bbls)                       $67.64                $46.27
      Natural gas (Mcf),
       including realized gain
               (loss) on
               commodity derivatives            $4.83                 $5.04
      Natural gas (Mcf),
       excluding realized gain
       (loss) on commodity
       derivatives                              $4.09                 $2.71
    
</pre>
<p> </p>
<pre>
    
    Costs Per Mcfe
      Lease operating expenses                  $0.22                 $0.23
      Production taxes                          $0.43                 $0.29
      Gathering fees                            $0.24                 $0.26
      Transportation charges                    $0.32                 $0.30
      Depletion and
       depreciation                             $1.08                 $1.01
      General and
       administrative -total                    $0.12                 $0.13
      Interest and debt expense                 $0.22                 $0.22
                                                -----                 -----
                                                $2.62                 $2.43
                                                -----                 -----
    
</pre>
<p> </p>
<pre>
    
    Note: Amounts on a per
     Mcfe basis may not
     total due to rounding.
    
</pre>
<p> </p>
<pre>
    
    Adjusted Margins
      Adjusted Net Income (2)                      31%                   34%
      Adjusted Operating Cash
       Flow Margin (3)                             67%                   73%

    
</pre>
<p> </p>
<pre>
    
    Ultra Petroleum Corp.
    Reconciliation of 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.  These statements are unaudited
    and subject to adjustment.
    
</pre>
<p> </p>
<p> </p>
<p> </p>
<pre>
    
                                For the Six Months         For the Quarter
                                       Ended                    Ended
                                     June 30,                 June 30,
                                     --------                 --------
                                 2010          2009     2010          2009
                                 ----          ----     ----          ----
    
</pre>
<p> </p>
<pre>
    
    Net cash provided by
     operating activities    $372,182      $240,400 $203,504      $108,483
      Net changes in
       operating assets and
       liabilities
        and other non-cash
         items*                (5,072)       52,335  (25,265)       60,066
                               ------        ------  -------        ------
    Cash flow from
     operations before
     changes in
        operating assets and
         liabilities         $367,110      $292,735 $178,239      $168,549
                             --------      -------- --------      --------
    
</pre>
<p> </p>
<pre>
    
    (1) 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.
    (2) 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.
    (3) Adjusted Operating Cash Flow Margin is defined as Operating Cash
    Flows divided by the sum of Oil and Natural
    Gas Sales plus Realized Gain (Loss) on Commodity Derivatives.
    (4) For the six months and quarter ended June 30, 2009, fully diluted
    shares excludes 2.7 million and 2.9 million,
    respectively, potentially dilutive instruments that were anti-
    dilutive due to the net loss for the period ended
    June 30, 2009.
    *Other non-cash items include excess tax benefit from stock based
    compensation and other.



    About Ultra Petroleum

    
</pre>
<p>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 early exploration and development stages in the Appalachian Basin of Pennsylvania - Marcellus Shale. Ultra is listed on the New York Stock Exchange and trades under the ticker symbol "UPL". The company had 152,477,688 shares outstanding on <span class="xn-chron">June 30, 2010</span>.</p>
<pre>
    

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

    
</pre>
<p>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. In this news release we disclose our undeveloped, future reserves. These reserves are not proved, probable or possible reserves as those terms are defined by the SEC and represent other descriptions of our oil and gas deposits that SEC guidelines permit us to disclose in news releases but prohibit us from including in SEC filings.  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. Full details regarding the selected financial information provided above will be available in the company's report on Form 10-Q for the quarter ended <span class="xn-chron">June 30, 2010</span>.</p>
<pre>
    




    

For further information: For further information: Kelly L. Whitley, Manager 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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