Ultra's Q1 Profit Remains Flat

Ultra Petroleum Corp. on Tuesday reported earnings for the first quarter 2007. Highlights include:

--Operating cash flow(1) for first quarter 2007 of $133.4 million, up 15% from first quarter 2006
--Production increases to a record 28.5 Bcfe for first quarter 2007, up 42% over first quarter 2006
--Earnings were $0.42 per diluted share during the first three months, essentially unchanged from the same period in 2006

Earnings for the first quarter ended March 31, 2007 were $0.42 per diluted share, or $66.6 million, essentially flat compared to $0.41 per diluted share or $67.5 million for the same period in 2006. Operating cash flow(1) for the first quarter 2007 increased 15% to $133.4 million, compared to $116.1 million for the same period in 2006.

Ultra Petroleum's production for the first quarter 2007 increased 42% to 28.5 billion cubic feet equivalent (Bcfe) compared to 20.1 Bcfe in the first quarter 2006. This is the largest quarterly production level ever achieved by Ultra. Production for the first three months of 2007 is comprised of 24.8 billion cubic feet (Bcf) of domestic natural gas, 193.5 thousand barrels (Mbls) of domestic condensate, and 417.6 Mbls of crude oil from China. In the first quarter of 2007, realized domestic natural gas prices were $5.93 per thousand cubic feet (Mcf) a decrease of 17% from $7.13 per Mcf in first quarter 2006. Realized domestic condensate prices were $48.02 per barrel (bbl) down 23% as compared to $62.50 per bbl in the first quarter 2006. China crude oil prices realized during the first quarter were $46.98 per bbl, down 14%, as compared to $54.56 per bbl in the first quarter of 2006.

"We achieved record production, all organic, mitigating the impact of substantially lower natural gas and crude oil prices. Our margins continued to provide industry leading returns with a 38% net income margin and a return on capital of 32%. Clearly, our cost advantage positions Ultra to continue its sector leadership in growth and economic returns," stated Michael D. Watford, Chairman President and Chief Executive Officer.

Operational Highlights

During the first quarter of 2007, Ultra's drilling results in Pinedale continued to expand the understanding of the size of the resource potential of this legacy field. On the east side of the Warbonnet area, five new wells were brought on production each averaging 11.2 million cubic feet of gas per day (Mmcfg/d). The initial production rates exceeded the 2006 year-end pre-drill estimates by approximately 25%. In an adjacent area north of the main Warbonnet producing area, seven additional new wells commenced production with average rates of 8.9 Mmcfg/d, nearly double the pre-drill expectations. Ultra plans to continue delineation drilling in the under drilled portions of both the core and along the edges of the Pinedale Field for the balance of 2007. This work will lead to an increase in the Original Gas in Place (OGIP) estimate for the field and more importantly to the estimate of recovered gas net to Ultra.

Also in the first quarter, the company made significant progress in improving drilling efficiencies in Wyoming. Starting the year with a largely upgraded operated drilling fleet and with no drilling rigs on winter demonstration pads, operated wells brought on production during the quarter totaled 22 gross (14.88 net) compared to 6 gross (3.94 net) last year, a 278% increase on a net well basis. The average first quarter drilling days (spud to total depth) decreased 37% from 67 days in 2006 to 42 days with several wells drilled in less than 30 days. As a result, well costs are trending lower. Overall including non-operated wells, 31 gross (18.1 net) new wells commenced production in the first quarter of 2007, as compared to 7 gross (4.38) net wells for the same period in 2006.

"Our 2006 year-end proved and near-proved reserves totaled approximately 10 trillion cubic feet of natural gas net to Ultra from our legacy Pinedale/Jonah interests. Already in the first quarter of 2007, we are seeing evidence in our drilling results that suggest much more is to come. And we are quickly moving from an environment of attempting to control escalating drilling costs to one of significant decreases paired with improving rig productivity," stated Watford.

Subsequent to Quarter-End

The public comment period for the Draft Supplemental Environmental Impact Statement (SEIS) for the Pinedale Anticline closed April 6, 2007. It is anticipated that the BLM will issue the Record of Decision (ROD) during the third quarter of 2007. When the ROD is issued, Ultra would gain access to additional acreage on a year round basis commencing in the 2007-2008 winter drilling season. After an initial transition period, this additional access would allow for accelerated development of the field and a significant increase in the annual number of wells drilled while simultaneously committing to decreasing emissions and implementing measures to mitigate impact on wildlife.

On April 19, 2007, FERC approved the Rockies Express Pipeline (REX). REX will move natural gas from the Rockies to the Midwest and eventually the Northeast and will significantly increase the take-away capacity for natural gas in the Rockies. It is expected to be operational during the first quarter of 2008. This will provide an approximate 27% increase in natural gas take-away capacity from the Rockies. The increased capacity to the Midwest and eventually Northeast, will have a positive impact on Wyoming natural gas prices.

The company entered into a new unsecured revolving credit facility on April 30, 2007, which matures in five years. The new agreement provides an initial loan commitment of $500 million and may be increased to a maximum aggregate $750 million at the company's request. On April 30, 2007, the company had $210.0 million in outstanding borrowings and $290.0 million in available borrowing capacity under the facility.

Production Guidance

Ultra revised its annual natural gas and crude oil production guidance for 2007 to 114 Bcfe from its previous annual production guidance of 110.0 Bcfe. The revised annual production guidance is a 24% increase from 2006 annual production of 91.6 Bcfe. Ultra is also providing preliminary guidance for 2008 and 2009 of 1

35 Bcfe and 160 Bcfe, respectfully.

Share Repurchase On May 17, 2006, the company announced that its Board of Directors authorized a share repurchase program for up to an aggregate $1 billion of the company's outstanding common stock which has been and will be funded by cash on hand and the company's senior credit facility. Pursuant to this authorization, the company has commenced an initial program to purchase up to $250.0 million of the company's outstanding shares through open market transactions or privately negotiated transactions. On April 30, 2007, the Board of Directors approved an additional $250.0 million for share repurchases under the initial aggregate $1 billion authorization. To date, the total share repurchase authorization is $500.0 million.

During the three months ended March 31, 2007, Ultra purchased and retired 149,900 of its common shares for an aggregate $7.9 million at a weighted average price of $52.66 per share. Since the program's inception in May 2006 to the end of the first quarter 2007, the company has purchased and retired a total of 4.1 million shares for an aggregate $205.4 million at a weighted average price of $49.87 per share. Total shares outstanding as of March 31, 2007 for Ultra Petroleum were 151,886,494.

Ultra Petroleum is an independent, exploration and production company focused on developing its long-life natural gas reserves in the Green River Basin of Wyoming, and oil reserves in Bohai Bay, offshore China.


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