Ultra Petroleum Announces Discovery in Bohai Bay

Ultra Petroleum, through its wholly owned subsidiary, Sino-American Energy Corp, announced that the CFD 12-1S-1 exploration well in Block 05/36, Bohai Bay, China has tested a combined 6,049 BOEPD of light oil and gas from 5 successful drill stem tests. The well had over 215 feet of hydrocarbon bearing sandstones in the Dongying, Guantao and Lower Ming formations. The well was drilled on a separate structure approximately 5 kilometers south of the 12-1 field area to test the Dongying formation that is productive in the 11-2 Field area and the 12-1-5 well.

The Dongying formation in the 12-1S-1 well tested a combined 4,360 BOPD and 7.1 MMCF gas (5,543 BOEPD) from a total 106 feet of hydrocarbon-bearing sandstone. The flow was from a total of 4 successful drill stem tests conducted on the well. The tested oil was consistently light, ranging from 37 to 41 API gravity.

The Guantao formation had a total of 53 feet of oil pay in 4 sands confirmed by electric log calculation and MDT pressure and sample analysis. The Guantao formation is a major oil reserve contributor to the CFD 11-1, CFD 11-2 and CFD 12-1 fields in the Ultra Bohai blocks. Existence of these analogous Guantao pay zones eliminated the need to perform DSTs in these pay sands.

Logs and MDT pressure and sample analysis confirmed that the Lower Ming formation had 56 feet of oil pay. One of these Lower Ming sands tested at a rate of 506 BOPD of 17 degree API oil. The Ming is also a significant reservoir in nearly all Bohai Bay oil fields. The rig has moved 1.5 kilometers southwest to appraise this discovery.

"The success of the CFD 12-1S-1 well reiterates the excellent prospectivity of our Bohai acreage and confirms our emerging Dongying play. In fact, this well tested one of the higher flows ever recorded from the Dongying in the Bohai Bay. Had we tested several of the Guantao zones in this well, we may have exceeded 7,000 BOEPD for a total flow. The data collected from this well tells us the 12-1S-1 may be a significant commercial discovery. In addition to the excellent economics of the light oil, the possibility exists to use the gas found in this well to power the production equipment on our CFD 11-1 and 11-2 fields, potentially reducing costs and improving our production economics across the blocks. The continued outstanding results of our 2001 China drilling program confirm our expectations of at least four times asset growth for these properties," stated Michael D. Watford, Ultra's Chairman, CEO and President.

Ultra Petroleum has 15% working interest in the 05/36 Block; Kerr McGee has 50% working interest and is operator, while Newfield Exploration has 35% working interest.