Ultra Petroleum Reports First Quarter 2009 Financial and Operating Results, Updates 2010 and 2011 Hedges


    HOUSTON, May 5 /CNW/ -- Ultra Petroleum Corp. (NYSE:   UPL) continued to
deliver strong financial and operating performance for the first quarter of
2009. Highlights for the quarter include:

    --  Record natural gas and crude oil production of 42.1 Bcfe, up 24
        over the same period in 2008
    --  Operating cash flow(1) of $124.2 million
    --  Earnings of $39.7 million, or $0.26 per diluted share - adjusted

    --  Achieving superior returns in first quarter (adjusted): 66 percent
        flow margin, 21 percent net income margin, 21 percent return on
        and 11 percent return on capital

    For the first quarter of 2009, production of natural gas and crude oil
increased 24 percent to a record 42.1 billion cubic feet equivalent (Bcfe).
This compares to production of 34.1 Bcfe during the first quarter of 2008 and
production of 40.6 Bcfe for the fourth quarter of 2008. Ultra Petroleum's
first quarter 2009 production levels were the highest ever achieved by the
company. The company's production for the first quarter was comprised of 40.2
billion cubic feet (Bcf) of natural gas and 319.4 thousand barrels of

    During the first quarter of the year, Ultra Petroleum's average realized
natural gas price, including realized gains and losses on commodity
derivatives, was $4.46 per thousand cubic feet (Mcf). Excluding realized gains
and losses on commodity derivatives, the company's average price for natural
gas was $3.95 per Mcf. The realized condensate price in the first quarter of
2009 was $28.56 per barrel (Bbl).

    "In these most difficult of times, we take comfort in our unique position
with the growing scale of our assets, their long-term profitability, the
anticipated natural gas pricing uplift expected with Rockies pipeline
expansion combined with declining domestic natural gas production led by the
Rockies," commented Michael D. Watford, Chairman, President and Chief
Executive Officer.

    For the first quarter of 2009, Ultra Petroleum reported a net loss of
$512.6 million, or $3.39 per diluted share. Net loss included a non-cash
ceiling test write-down ($673.0 million net of taxes) of the company's
carrying value of natural gas and oil properties stemming from significantly
lower natural gas and condensate prices at quarter-end partially offset by
unrealized mark-to-market gains on the company's commodity derivative
contracts ($120.8 million net of taxes). Ultra Petroleum accounts for its
natural gas and oil properties using the full-cost method of accounting, which
requires the company to perform a ceiling test that limits the carrying costs
of its natural gas and oil properties (less accumulated depletion and related
deferred income taxes) to the aggregate of the present value of future net
revenues attributable to proved natural gas and oil reserves (calculated using
period end commodity prices) discounted at 10 percent plus the lower of cost
or market value of unproved properties. The ceiling test for Ultra was
calculated based on March 31, 2009 wellhead prices of $2.47 per Mcf for
natural gas and $33.91 per Bbl for condensate. This compares to December 31,
2008 prices of $4.71 per Mcf and $30.10 per Bbl. If natural gas and oil prices
continue to decline below those at March 31, 2009, additional reductions in
the carrying costs of the company's natural gas and oil properties may occur.

    Ultra Petroleum reported adjusted net income of $39.7 million or $0.26
per diluted share for the first quarter, excluding the non-cash write-down in
the carrying value of its natural gas and oil properties and the unrealized
gain on commodity derivative contracts, which are typically excluded by the
investment community in published estimates. Operating cash flow(1) for the
quarter was $124.2 million or $0.82 per diluted share.

    Operational Highlights

    Currently, Ultra Petroleum's gross operated production volumes in
Pinedale are 650 million cubic feet per day. This level ranks the company as
the largest operator in the field. In the first quarter of 2009, on an
operated well basis, Ultra drilled 20 percent more wells with the same number
of rig days as the first quarter 2008.

    Ultra Petroleum drilled 48 gross (22.5 net) wells, including outside
operated, for the quarter-ended March 31, 2009. In Pinedale, the company
averaged 22.7 days spud to total depth (TD) per pad well. This compares to its
average of 24.6 days in the first quarter of 2008 and is an 8 percent
improvement over the same time period last year.

    Ultra Petroleum's drilling results in Pinedale continued to enlarge the
size of this legacy field. During the first quarter, Ultra Petroleum completed
13 delineation wells. The post-drill reserve estimates from these 13 wells
averaged 47 percent higher than pre-drill reserve estimates. These wells also
have an average post-drill reserve estimate of over 5.5 Bcf per well and an
average initial production rate of approximately 8.2 MMcf per day. Ultra
Petroleum plans to continue delineation drilling in the under-drilled portions
of the Pinedale field. Delineation drilling is key to the company's continued
success in enlarging the size of the Pinedale field by increasing the Original
Gas in Place (OGIP) estimate; but more importantly, the direct results of this
focused drilling is an increase in the estimate of recoverable natural gas
reserves and production net to Ultra Petroleum and its shareholders.

    "We recently analyzed our Wyoming reserves in regard to the new SEC rules
for reserve reporting. Among the varied objectives of the proposed rules, one
is to better represent the low-risk nature of resource plays. Our preliminary
results indicate that we could nearly double our 3.5 Tcfe of proved reserves
without drilling another well in the field. In fact, by strategically placing
the location of less than 100 new wells Ultra's proved reserves would approach
8 Tcfe. This illustrates the conservative nature of our reserve booking policy
and the high quality of our Pinedale asset base," stated Watford. "Now more
than ever, we have our sights set on growing our total reserves from the
current 11.7 Tcfe to beyond 14.0 Tcfe."

    During the first quarter, Ultra increased its position in Pennsylvania to
321,798 gross (171,613 net) acres from 287,745 gross (152,227 net) acres at
year-end 2008. With the expanded acreage position, the company plans on
drilling 21 wells during the year, an increase from the previously planned 19
wells. The company is analyzing the 3-D seismic that was completed earlier
this year. As part of the evaluation of the Marcellus, the company is
currently drilling its third horizontal well and is in the process of
completing the first of two recently drilled horizontal wells.

    Hedges - Derivative Contracts

    The total volume of commodity derivative contracts for the remainder of
2009 currently is 84.6 Bcf at an average realized price of $5.82 per Mcf. In
2010, the total volume of commodity derivative contracts is 84.0 Bcf at an
average realized price of $5.45 per Mcf. In addition, the company has begun to
enter into derivative contracts for 2011 with 65.7 Bcf of commodity derivative
contracts at an average realized price of $5.49 per Mcf.

    As of today, Ultra Petroleum has the following positions in place to
mitigate its commodity price exposure:

                                                      Average Price per Mcf
                             Total Volume (Bcf)       ---------------------
                             ------------------          at Point of Sale
    Q2 2009                         32.7                     $5.84 Mcf
    Q3 2009                         33.1                     $5.84 Mcf
    Q4 2009                         18.8                     $5.73 Mcf
    Total 2009                      84.6                     $5.82 Mcf

    Q1 2010                         20.7                     $5.45 Mcf
    Q2 2010                         20.9                     $5.45 Mcf
    Q3 2010                         21.2                     $5.45 Mcf
    Q4 2010                         21.2                     $5.45 Mcf
    Total 2010                      84.0                     $5.45 Mcf

    Q1 2011                         16.2                     $5.49 Mcf
    Q2 2011                         16.3                     $5.49 Mcf
    Q3 2011                         16.6                     $5.49 Mcf
    Q4 2011                         16.6                     $5.49 Mcf
    Total 2011                      65.7                     $5.49 Mcf

    Production Guidance

    Ultra Petroleum is confirming its annual natural gas and crude oil
production guidance for 2009 of 172 to 177 Bcfe. Production for 2009 is an 18
to 22 percent increase over 2008's record annual production of 145.3 Bcfe. All
forecast production growth is generated organically and does not include any
contribution from exploratory efforts in Pennsylvania.

    Production guidance for the remainder of 2009 on a quarterly basis is
listed in the table below. Fourth quarter 2009 production is forecast to
exceed fourth quarter 2008 volumes by ten percent.

                                 2009 Estimated Total
                  Q1 (A)      Q2 (E)      Q3 (E)      Q4 (E)    Full Year 2009
     (Bcfe)       42.1    42.4 - 44.0  43.4 - 45.0  44.1 - 45.9  172.0 - 177.0

    In conjunction with the production guidance, the company is decreasing
its 2009 capital expenditure budget from $720.0 million to $670.0 million. The
decrease in capital expenditures will not affect the company's ability to
increase production 18 to 22 percent from 2008 levels.

    "We continue to pursue a conservative and disciplined capital program
that is consistent with our long-term strategy of balancing growth and
profitability," stated Watford. "Ultra's legacy Wyoming field warrants growth
and re-investment throughout the energy cycle. We own long-term assets, and
believe that long-term commodity price assumptions drive value, not near-term
commodity prices," Watford added.

    Rockies Express Pipeline Update

    Kinder Morgan recently reaffirmed that Ultra Petroleum will have access
to REX-East in a series of three phases. The interim service for REX-East has
been delayed based on the fact that the Wabash River in Indiana has remained
above flood levels since early April. The commencement of REX-East from
Audrain County, Missouri to Putnam County, Indiana is expected to be in late
May 2009. REX is significant to Ultra, an anchor shipper, as it moves pricing
points to alternative, higher value markets toward the northeastern United
States. Once the first phase to Putnam County, Indiana commences service, it
is expected that the company's natural gas delivered to this point will
generally receive prices which are referenced to Chicago City Gate pricing.
The second phase is expected to be in service to Lebanon, Ohio in June 2009.
It is expected that the natural gas delivered to Lebanon, Ohio, the second
phase, will generally receive prices which are referenced to Michigan City
Gate pricing. The final phase to Clarington, Ohio is to be in service in
November 2009. Natural gas delivered to the final phase in Clarington, Ohio is
expected to generally receive prices which are referenced to Dominion South
pricing. At that time, REX - East will provide natural gas transportation
capacity of 1.8 Bcf per day from the Rockies to Clarington, Ohio, which is an
increase from the current 1.5 Bcf per day from the Rockies to Audrain County,

    Other Events During the Quarter

    On March 5, 2009, Ultra Petroleum issued $235.0 million of Senior Notes
pursuant to a Master Note Purchase Agreement between the company and
purchasers of the Senior Notes. Of the Notes, $173.0 million are 7.77 percent
Senior Notes due March 1, 2019 and $62.0 million are 7.31 percent Senior Notes
due March 1, 2016. The proceeds from the Notes were used to repay bank debt,
but did not reduce the size of the revolving credit facility.

    2009 Annual Shareholders' Meeting

    Ultra Petroleum's 2009 Annual Shareholders' Meeting will be held at the
Crowne Plaza Hotel, 425 N. Sam Houston Parkway East, Houston, Texas, on May
21, 2009, at 10:00 a.m. Central Daylight Time. All shareholders are invited to
attend the meeting. Shareholders are asked to sign and return their proxy form
mailed with the annual report to ensure representation.

    Conference Call Webcast Scheduled for May 6, 2009

    Ultra Petroleum's first quarter 2009 conference call will be available
via live audio webcast at 11:00 a.m. Eastern Daylight Time (10:00 a.m. Central
Daylight Time) Wednesday, May 6, 2009. To listen to this webcast, log on to
www.ultrapetroleum.com. The webcast replay and podcast will be archived on
Ultra Petroleum's website through May 20, 2009.

    Financial tables to follow.

    Ultra Petroleum Corp.
    Consolidated Statement of Operations (unaudited)
    All amounts expressed in US$000's

                                                  For the Three Months Ended
                                                  31-Mar-09         31-Mar-08
      Oil liquids (Bbls)                            319,408           256,280
      Natural gas (Mcf)                          40,191,281        32,519,641
                                                 ----------        ----------
      MCFE - Total                               42,107,729        34,057,321
                                                 ----------        ----------

      Oil sales                                      $9,123           $22,016
      Natural gas sales                             158,830           249,121
                                                 ----------        ----------
    Total operating revenues                        167,953           271,137
                                                 ----------        ----------

      Lease operating expenses                       10,243            10,737
      Production taxes                               17,351            30,935
      Gathering fees                                 10,791             9,998
                                                 ----------        ----------
    Total lease operating costs                      38,385            51,670
                                                 ----------        ----------

      Transportation charges                         13,355             9,657
      Depletion and depreciation                     60,661            42,250
      Write-down of proved oil and
       gas properties                             1,037,000                 -
      General and administrative                      2,449             3,491
      Stock compensation                              2,125               854
                                                 ----------        ----------
    Total operating expenses                      1,153,975           107,922
                                                 ----------        ----------

    Interest income                                      18               162
    Other expense                                    (2,631)              (12)
    Interest and debt expense                        (7,297)           (5,272)
    Realized gain on commodity derivatives           20,355                 -
    Unrealized gain (loss) on commodity
     Derivatives                                    186,073           (27,673)
                                                 ----------        ----------

    (Loss) income before income taxes              (789,504)          130,420

    Income tax provision (benefit) - current             23              (199)
    Income tax (benefit) provision - deferred      (276,939)           47,220
                                                 ----------        ----------

    Net (loss) income from continuing operations   (512,588)           83,399
    Discontinued operations, net of tax                   -               (67)
                                                 ----------        ----------
    Net (loss) income                             $(512,588)          $83,332
                                                 ----------        ----------

    Write-down of proved oil and gas properties,
     net of tax                                    $673,013                $-
    Unrealized (gain) loss on commodity
     derivatives, net of tax                       (120,761)           17,960
                                                 ----------        ----------
    Adjusted net income                             $39,664          $101,292
                                                 ----------        ----------

    Operating cash flows (1)
      Operating cash flow from continuing
       operations  (1)                             $124,186          $201,396
      Operating cash flow from discontinued
       operations (1)                                     -                 -
                                                 ----------        ----------
    Operating cash flows                           $124,186          $201,396
                                                 ----------        ----------
    (1) (see non-GAAP reconciliation)

    Weighted average shares - basic                 151,238           152,501
    Weighted average shares - diluted               151,238           158,083

    Basic (loss) earnings per share
      Net (loss) income from continuing operations   ($3.39)            $0.55
      Net (loss) income from discontinued
       operations                                         -                 -
      Net (loss) income                              ($3.39)            $0.55

    Fully diluted (loss) earnings per share
      Net (loss) income from continuing operations   ($3.39)            $0.53
      Net (loss) income from discontinued
       operations                                         -                 -
      Net (loss) income                              ($3.39)            $0.53

    Adjusted earnings per share
      Adjusted net income - basic                     $0.26             $0.66
      Adjusted net income - fully diluted             $0.26             $0.64

    Realized Prices
      Oil liquids (Bbls) - Domestic                  $28.56            $85.90
      Natural Gas (Mcf), including realized gain
       (loss) on commodity derivatives                $4.46             $7.66
      Natural Gas (Mcf), excluding realized gain
       (loss) on commodity derivatives                $3.95             $7.66

    Costs Per MCFE
      Lease operating expenses                        $0.24             $0.32
      Production taxes                                $0.41             $0.91
      Gathering fees                                  $0.26             $0.29
      Transportation charges                          $0.32             $0.28
      Depletion and depreciation                      $1.44             $1.24
      General and administrative - total              $0.11             $0.13
      Interest and debt expense                       $0.17             $0.15
                                                 ----------        ----------
                                                      $2.95             $3.32
                                                 ----------        ----------

    Note: Amounts on a per MCFE basis may not
     total due to rounding.

    Adjusted Margins
      Adjusted Net Income  Margin (2)                    21%               37%
      Adjusted Operating Cash Flow Margin (3)            66%               74%

    Supplemental Balance Sheet Data
                                                      As of
                                            31-Mar-09        31-Dec-08
      Cash and cash equivalents               $14,396          $14,157

      Long-term debt:
        Bank indebtedness                    $186,000         $270,000
        Senior notes                          535,000          300,000
                                              -------          -------
                                             $721,000         $570,000
                                             --------         --------

    Ultra Petroleum Corp.
    Reconciliation of Cash Flow and Cash Provided by Operating Activities
    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.

                                                     For the Quarter Ended
                                                  31-Mar-09         31-Mar-08
    Net cash provided by operating activities      $131,917          $197,532

      Net changes in working capital and
       other non-cash items(*)                        $(7,731)          $ 3,864

    Cash flow from operations before changes
     in non-cash items and working capital         $124,186          $201,396

    (1)  Operating cash flow is defined as net cash provided by operating
         activities before changes in non-cash items and working capital.
         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 also has 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 Flow
         divided by the sum of Oil and Natural Gas Sales plus Realized Gain
         (Loss) on Commodity Derivatives.

         (*)Other non-cash items include excess tax benefit from stock based
         compensation and other.

    About Ultra Petroleum

    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. Ultra is listed on the
New York Stock Exchange and trades under the ticker symbol "UPL".  The company
had 151,264,256 shares outstanding on April 30, 2009.

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

    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, particularly in
Wyoming, 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-Q for the quarter ended March 31, 2009.


For further information:

For further information: Kelly L. Whitley, Manager Investor Relations of
Ultra Petroleum Corp., +1-281-876-0120, ext. 302, info@ultrapetroleum.com Web
Site: http://www.ultrapetroleum.com

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