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Ultra Petroleum Provides Production And Capital Budget Guidance For 2010

HOUSTON, Feb. 12 /PRNewswire-FirstCall/ -- Ultra Petroleum Corp. (NYSE: UPL) today reported that the company's Board of Directors approved the 2010 capital budget of $1,450.0 billion. The capital budget includes the previously announced Marcellus leasehold acquisition of $400.0 million which is expected to close late February 2010. Excluding the acquisition, the 2010 capital budget is $1,050.0 billion. The 2010 capital budget is planned to be allocated as follows:

    
    
                                         $millions
                                         ---------
        Wyoming:
          Drilling                     $575
          Facilities                     25
                                       ----
          Sub Total                             $600
        Pennsylvania:
          Drilling                     $375
          Facilities                     65
                                       ----
          Sub Total                             $440
        Other                                    $10
                                                ----
    Sub Total Capital Budget                  $1,050
    
        Acquisition                             $400
                                                ----
    Total Capital Budget                      $1,450
                                              ======

"In 2010, we again expect to increase our production in Wyoming by drilling approximately 200 gross (110 net) wells. Additionally, we will expand our Marcellus program as we plan to drill approximately 110 gross (70 net) wells. It is extremely important for us to continue evaluating and de-risking our acreage in the Marcellus so that we are able to better quantify the actual size of the growing resource to Ultra and our shareholders," commented Michael D. Watford, Chairman, President and Chief Executive Officer. "These wells are instrumental to resource expansion and key to value creation. We look forward to increased reserves and greater value at year-end 2010," Watford added.

Production for 2010 is expected to grow approximately 20 percent to 215 Bcfe as compared to 180 Bcfe for 2009.

    
    
                                              1st Quarter    Full-Year 2010
                                              -----------    --------------
    2010 Estimated Total Production (Bcfe)      48 - 49         209 - 216

At this time, Ultra is providing preliminary production guidance for 2011 and 2012 targeting 20 percent per annum production growth at similar capital expenditures levels.

    
    
                                           2010         2011        2012
                                           ----         ----        ----
    Estimated Total Production (Bcfe)    209 - 216    250 - 260   295 - 310

"We expect production to grow by approximately 20 percent each year for the next three years from 180 Bcfe at year-end 2009 to 310 Bcfe at year-end 2012 through the execution of our current capital expenditure plan. With two decades of identified drilling opportunities before us in Wyoming coupled with our new Marcellus opportunity, both at high rates of return, we are illustrating that our differentiated asset base and operating program provide for industry leading performance," stated Watford.

Price Realizations and Differentials Guidance

In the first 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 $10.00 less than the average NYMEX crude oil price.

Expense Guidance

The following table presents the company's expected expenses per Mcfe assuming a $5.38 per mmbtu Henry Hub natural gas price and a $75.00 per Bbl NYMEX crude oil price:

    
    
    Costs Per Mcfe                                 Q1 2010
    --------------                                 -------
    Lease operating expenses                    $0.22 – 0.24
    Production taxes                            $0.60 – 0.62
    Gathering fees                              $0.24 – 0.26
    Transportation charges                      $0.32 – 0.34
    Depletion and depreciation                  $1.07 – 1.09
    General and administrative – total          $0.12 – 0.13
    Interest and debt expense                   $0.28 – 0.29
                                                ------------
    Total costs per Mcfe                        $2.85 – 2.97

Income Tax Guidance

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.

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