##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the transition period from          to
 Commission file number 0-29370
 ULTRA PETROLEUM CORP.
 (Exact name of registrant as specified in its charter)
 Yukon Territory, Canada
    
    N/A(State or other jurisdiction of
    
    (I.R.S. employerincorporation or organization)
    
    identification number)363 North Sam Houston Parkway, 
Suite 1200, Houston, Texas(Address of principal executive offices)
    
    77060(Zip code)
 (281) 876-0120
(Registrants telephone number, including area code)
 þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
 o þ




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##### 



TABLE OF CONTENTS
 PART I  FINANCIAL INFORMATIONITEM 1
    
    FINANCIAL STATEMENTS
    
    
    3ITEM 2
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    15ITEM 3
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    21ITEM 4
    
    CONTROLS AND PROCEDURES
    
    
    22PART II  OTHER INFORMATIONITEM 1.
    
    LEGAL PROCEEDINGS
    
    
    23ITEM 1A.
    
    RISK FACTORS
    
    
    23ITEM 2.
    
    CHANGES IN SECURITIES AND USE OF PROCEEDS
    
    
    23ITEM 3.
    
    DEFAULTS IN SENIOR SECURITIES
    
    
    23ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS
    
    
    24ITEM 5.
    
    OTHER INFORMATION
    
    
    24ITEM 6.
    
    EXHIBITS
    
    
    25SIGNATURES
    
    
    26EXHIBIT INDEX
    
    
    27Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1 FINANCIAL STATEMENTS
 ULTRA PETROLEUM CORP.
CONSOLIDATED STATEMENTS OF INCOME
 For the Three Months
    
    
    For the Six MonthsEnded June 30,
    
    
    Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Unaudited)(Amounts in thousands of U.S. dollars, exceptper share data)Revenues:Natural gas sales
    
    $
    263,327
    
    
    $
    116,421
    
    
    $
    512,449
    
    
    $
    263,705Oil sales
    
    
    30,794
    
    
    
    14,451
    
    
    
    52,809
    
    
    
    23,743Total operating revenues
    
    
    294,121
    
    
    
    130,872
    
    
    
    565,258
    
    
    
    287,448Expenses:Lease operating expenses
    
    
    8,562
    
    
    
    5,573
    
    
    
    19,299
    
    
    
    10,251Production taxes
    
    
    35,776
    
    
    
    14,694
    
    
    
    66,711
    
    
    
    32,207Gathering fees
    
    
    8,766
    
    
    
    6,980
    
    
    
    18,764
    
    
    
    13,473Transportation charges
    
    
    12,013
    
    
    
    
    
    
    
    21,671
    
    
    
    Depletion and depreciation
    
    
    42,780
    
    
    
    32,591
    
    
    
    85,030
    
    
    
    62,221General and administrative
    
    
    4,449
    
    
    
    3,421
    
    
    
    8,794
    
    
    
    6,639Total operating expenses
    
    
    112,346
    
    
    
    63,259
    
    
    
    220,269
    
    
    
    124,791Operating income
    
    
    181,775
    
    
    
    67,613
    
    
    
    344,989
    
    
    
    162,657Other income (expense), net:Interest expense
    
    
    (4,543
    )
    
    
    (4,221
    )
    
    
    (9,814
    )
    
    
    (6,921
    )Interest income
    
    
    127
    
    
    
    309
    
    
    
    277
    
    
    
    636Total other income (expense), net
    
    
    (4,416
    )
    
    
    (3,912
    )
    
    
    (9,537
    )
    
    
    (6,285
    )Income before income tax provision
    
    
    177,359
    
    
    
    63,701
    
    
    
    335,452
    
    
    
    156,372Income tax provision
    
    
    62,603
    
    
    
    23,949
    
    
    
    119,337
    
    
    
    55,978Net income from continuing operations
    
    
    114,756
    
    
    
    39,752
    
    
    
    216,115
    
    
    
    100,394Income from discontinued operations, net of tax
    
    
    482
    
    
    
    9,317
    
    
    
    415
    
    
    
    15,266Net income
    
    
    115,238
    
    
    
    49,069
    
    
    
    216,530
    
    
    
    115,660Retained earnings, beginning of period
    
    
    989,112
    
    
    
    691,375
    
    
    
    887,820
    
    
    
    624,784Retained earnings, end of period
    
    $
    1,104,350
    
    
    $
    740,444
    
    
    $
    1,104,350
    
    
    $
    740,444Basic Earnings per Share:Income per common share from continuing operations
    
    $
    0.75
    
    
    $
    0.26
    
    
    $
    1.41
    
    
    $
    0.66Income per common share from discontinued operations
    
    $
    0.00
    
    
    $
    0.06
    
    
    $
    0.00
    
    
    $
    0.10Net Income per common share
    
    $
    0.75
    
    
    $
    0.32
    
    
    $
    1.41
    
    
    $
    0.76Fully Diluted Earnings per Share:Income per common share from continuing operations
    
    $
    0.73
    
    
    $
    0.25
    
    
    $
    1.37
    
    
    $
    0.63Income per common share from discontinued operations
    
    $
    0.00
    
    
    $
    0.06
    
    
    $
    0.00
    
    
    $
    0.10Net Income per common share
    
    $
    0.73
    
    
    $
    0.31
    
    
    $
    1.37
    
    
    $
    0.73Weighted average common shares outstanding  basic
    
    
    153,061
    
    
    
    152,022
    
    
    
    152,781
    
    
    
    151,975Weighted average common shares outstanding  fully diluted
    
    
    157,818
    
    
    
    158,992
    
    
    
    157,905
    
    
    
    159,056
  3




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ULTRA PETROLEUM CORP.
 CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2008
    
    
    2007(Unaudited)(Amounts in thousands of U.S. Dollars)ASSETSCurrent assetsCash and cash equivalents
    
    $
    60,344
    
    
    $
    10,632Restricted cash
    
    
    2,624
    
    
    
    2,590Accounts receivable
    
    
    177,409
    
    
    
    135,849Derivative assets
    
    
    
    
    
    
    5,625Inventory
    
    
    6,733
    
    
    
    13,333Prepaid drilling costs and other current assets
    
    
    2,290
    
    
    
    424Total current assets
    
    
    249,400
    
    
    
    168,453Oil and gas properties, net, using the full cost method of accountingProved
    
    
    1,866,026
    
    
    
    1,537,751Unproved
    
    
    36,622
    
    
    
    36,778Property, plant and equipment
    
    
    4,846
    
    
    
    4,739Deferred financing costs, derivative assets and other
    
    
    3,063
    
    
    
    3,861Total assets
    
    $
    2,159,957
    
    
    $
    1,751,582LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesAccounts payable and accrued liabilities
    
    $
    213,998
    
    
    $
    140,641Derivative liabilities
    
    
    54,065
    
    
    
    Current taxes payable
    
    
    
    
    
    
    10,839Capital cost accrual
    
    
    118,084
    
    
    
    88,445Total current liabilities
    
    
    386,147
    
    
    
    239,925Long-term debt
    
    
    300,000
    
    
    
    290,000Deferred income tax liability
    
    
    376,524
    
    
    
    341,406Other long-term obligations
    
    
    49,686
    
    
    
    26,672Shareholders equityShare capital
    
    
    (16,865
    )
    
    
    20,050Treasury stock
    
    
    (4,142
    )
    
    
    (59,245
    )Retained earnings
    
    
    1,104,350
    
    
    
    887,820Accumulated other comprehensive (loss) income
    
    
    (35,743
    )
    
    
    4,954Total shareholders equity
    
    
    1,047,600
    
    
    
    853,579Total liabilities and shareholders equity
    
    $
    2,159,957
    
    
    $
    1,751,582
  4




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ULTRA PETROLEUM CORP.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six Months EndedJune 30,2008
    
    
    2007(Unaudited)(Amounts in thousands of U.S.Dollars)Cash provided by (used in):Operating activities:Net income for the period
    
    $
    216,530
    
    
    $
    115,660Adjustments to reconcile net income to net cash provided by operating activities:Income from discontinued operations, net of tax provision of
$225 and $8,220, respectively
    
    
    (415
    )
    
    
    (15,266
    )Depletion and depreciation
    
    
    85,030
    
    
    
    62,221Deferred income taxes
    
    
    119,531
    
    
    
    53,308Excess tax benefit from stock based compensation
    
    
    (62,627
    )
    
    
    (11,548
    )Stock compensation
    
    
    2,755
    
    
    
    2,736Other
    
    
    189
    
    
    
    43Net changes in non-cash working capital:Restricted cash
    
    
    (34
    )
    
    
    (1,207
    )Accounts receivable
    
    
    (41,560
    )
    
    
    (14,654
    )Prepaid drilling costs and other current and non-current assets
    
    
    (1,702
    )
    
    
    (1,006
    )Accounts payable and accrued liabilities
    
    
    71,124
    
    
    
    42,729Other long-term obligations
    
    
    20,424
    
    
    
    (1,748
    )Current taxes payable
    
    
    (10,839
    )
    
    
    (2,150
    )Net cash provided by operating activities from continuing operations
    
    
    398,406
    
    
    
    229,118Net cash provided by operating activities from discontinued operations
    
    
    
    
    
    
    9,522Net cash provided by operating activities
    
    
    398,406
    
    
    
    238,640Investing activities:Oil and gas property expenditures
    
    
    (409,089
    )
    
    
    (349,828
    )Investing activities from discontinued operations
    
    
    
    
    
    
    (10,960
    )Post-closing adjustments on sale of subsidiary
    
    
    640
    
    
    
    Change in capital cost accrual
    
    
    29,639
    
    
    
    (9,752
    )Inventory
    
    
    6,600
    
    
    
    5,837Purchase of capital assets
    
    
    (461
    )
    
    
    (219
    )Net cash used in investing activities
    
    
    (372,671
    )
    
    
    (364,922
    )Financing activities:Borrowings on long-term debt
    
    
    332,000
    
    
    
    135,000Payments on long-term debt
    
    
    (322,000
    )
    
    
    Deferred financing costs
    
    
    (1,580
    )
    
    
    (1,082
    )Repurchased shares
    
    
    (68,635
    )
    
    
    (39,744
    )Excess tax benefit from stock based compensation
    
    
    62,627
    
    
    
    11,548Stock issued for compensation
    
    
    4,934
    
    
    
    Proceeds from exercise of options
    
    
    16,631
    
    
    
    4,867Net cash provided by financing activities
    
    
    23,977
    
    
    
    110,589Increase (decrease) in cash during the period
    
    
    49,712
    
    
    
    (15,693
    )Cash and cash equivalents, beginning of period
    
    
    10,632
    
    
    
    14,574Cash and cash equivalents, end of period
    
    $
    60,344
    
    
    $
    (1,119
    )
  5




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ULTRA PETROLEUM CORP.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
  DESCRIPTION OF THE BUSINESS:
  1. SIGNIFICANT ACCOUNTING POLICIES:
  Basis of presentation and principles of consolidation:
 Cash and cash equivalents:
 Restricted cash:
 Capital assets other than oil and gas properties:
 Oil and natural gas properties:
  6




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Inventories:
 Forward natural gas sales transactions:
 Income taxes:
  Earnings per share:
  7




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Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income from continuing operations
    
    $
    114,756
    
    
    $
    39,752
    
    
    $
    216,115
    
    
    $
    100,394Net income from discontinued operations
    
    $
    482
    
    
    $
    9,317
    
    
    $
    415
    
    
    $
    15,266Net income
    
    $
    115,238
    
    
    $
    49,069
    
    
    $
    216,530
    
    
    $
    115,660Weighted average common shares outstanding
during the period
    
    
    153,061
    
    
    
    152,022
    
    
    
    152,781
    
    
    
    151,975Effect of dilutive instruments
    
    
    4,757
    
    
    
    6,970
    
    
    
    5,124
    
    
    
    7,081Weighted average common shares outstanding
during the period including the effects of
dilutive instruments
    
    
    157,818
    
    
    
    158,992
    
    
    
    157,905
    
    
    
    159,056Basic Earnings per Share:Income per common from continuing operations
    
    $
    0.75
    
    
    $
    0.26
    
    
    $
    1.41
    
    
    $
    0.66Income per common from discontinued operations
    
    $
    0.00
    
    
    $
    0.06
    
    
    $
    0.00
    
    
    $
    0.10Net income per common share
    
    $
    0.75
    
    
    $
    0.32
    
    
    $
    1.41
    
    
    $
    0.76Fully Diluted Earnings per Share:Income per common from continuing operations
    
    $
    0.73
    
    
    $
    0.25
    
    
    $
    1.37
    
    
    $
    0.63Income per common from discontinued operations
    
    $
    0.00
    
    
    $
    0.06
    
    
    $
    0.00
    
    
    $
    0.10Net income per common share
    
    $
    0.73
    
    
    $
    0.31
    
    
    $
    1.37
    
    
    $
    0.73
 Use of estimates:
 Accounting for share-based compensation:
 Fair Value Accounting.
 Revenue Recognition.
 Other Comprehensive Income:
 8




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For the three months ended
    
    
    For the six months endedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income
    
    $
    115,238
    
    
    $
    49,069
    
    
    $
    216,530
    
    
    $
    115,660Unrealized gain (loss) on derivative instruments
    
    
    (5,116
    )
    
    
    3,028
    
    
    
    (55,074
    )
    
    
    3,028Taxes benefit (expense) on unrealized gain
(loss) on derivative instruments
    
    
    1,796
    
    
    
    (1,063
    )
    
    
    19,331
    
    
    
    (1,063
    )Other comprehensive income
    
    $
    111,918
    
    
    $
    51,034
    
    
    $
    180,787
    
    
    $
    117,625
  Reclassifications:
 Impact of recently issued accounting pronouncements:
 2. OIL AND GAS PROPERTIES:
 June 30,
    
    
    December 31,2008
    
    
    2007Developed Properties:Acquisition, equipment, exploration, drilling and environmental costs
    
    $
    2,281,171
    
    
    $
    1,868,564Less accumulated depletion, depreciation and amortization
    
    
    (415,145
    )
    
    
    (330,813
    )1,866,026
    
    
    
    1,537,751Unproven Properties:Acquisition and exploration costs
    
    
    36,622
    
    
    
    36,778$
    1,902,648
    
    
    $
    1,574,529
 3. LONG-TERM LIABILITIES:
 June 30,
    
    
    December 31,2008
    
    
    2007Bank indebtedness
    
    $
    
    
    
    $
    290,000Senior notes, due 2015
    
    
    100,000
    
    
    
    Senior notes, due 2018
    
    
    200,000
    
    
    
    Other long-term obligations
    
    
    49,686
    
    
    
    26,672$
    349,686
    
    
    $
    316,672
 Bank indebtedness:
 9




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1 2
 Senior Notes, due 2015 and 2018:
   Other long-term obligations:
 4. SHARE BASED COMPENSATION:
 Valuation and Expense Information under SFAS 123R
  Six Months Ended June 30,2008
    
    2007Total cost of share-based payment plans
    
    $
    4,866
    
    
    $
    4,649Amounts capitalized in fixed assets
    
    $
    2,111
    
    
    $
    1,913Amounts charged against income, before income tax benefit
    
    $
    2,755
    
    
    $
    2,736Amount of related income tax benefit recognized in income
    
    $
    967
    
    
    $
    977
  10




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Six Months EndedJune 30, 2008
    
    June 30, 2007Non-Executives
    
    Executives
    
    Non-Executives
    
    ExecutivesExpected volatility
    
    
    41.22 - 42.47
    %
    
    
    42.5
    %
    
    
    42.54 - 43.70
    %
    
    
    44.40
    %Expected dividends
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Expected term (in years)
    
    
    5.01 - 5.08
    
    
    
    5.98
    
    
    
    4.75 - 5.02
    
    
    
    5.53Risk free rate
    
    
    2.48 - 3.41
    %
    
    
    2.98
    %
    
    
    4.52 - 5.07
    %
    
    
    4.69
    %Expected forfeiture rate
    
    
    15.0
    %
    
    
    15.0
    %
    
    
    14.0
    %
    
    
    14.0
    %
 Changes in Stock Options and Stock Options Outstanding
  WeightedAverageNumber of
    
    
    Exercise PriceOptions
    
    
    (US$)Balance, December 31, 2007
    
    
    7,589
    
    
    $0.25 to $67.73Granted
    
    
    183
    
    
    $71.72 to $87.59Exercised
    
    
    (2,325
    )
    
    $0.25 to $67.73Balance, June 30, 2008
    
    
    5,447
    
    
    $0.25 to $87.59
 PERFORMANCE SHARE PLANS:
 Long-Term Equity-Based Incentives.
     11




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5. SHARE REPURCHASE PROGRAM:
   Shares
    
    
    Weighted AverageTOTAL
    
    Purchased
    
    
    Price per Share
    
    
    $ Value1st Quarter  2008
    
    
    397
    
    
    $
    75.25
    
    
    $
    29,8292nd Quarter  2008
    
    
    452
    
    
    $
    85.97
    
    
    $
    38,807Prior
    
    
    5,694
    
    
    $
    51.73
    
    
    $
    294,549May 2006  June 30, 2008
    
    
    6,543
    
    
    $
    55.52
    
    
    $
    363,185
 Shares
    
    
    Weighted AverageOPEN MARKET
    
    Purchased
    
    
    Price per Share
    
    
    $ Value1st Quarter  2008
    
    
    214
    
    
    $
    75.53
    
    
    $
    16,1392nd Quarter  2008
    
    
    210
    
    
    $
    84.13
    
    
    $
    17,643Prior
    
    
    5,401
    
    
    $
    51.19
    
    
    $
    276,442May 2006  June 30, 2008
    
    
    5,825
    
    
    $
    53.27
    
    
    $
    310,224
 Shares
    
    
    Weighted AverageNET SHARE SETTLEMENTS
    
    Purchased
    
    
    Price per Share
    
    
    $ Value1st Quarter  2008
    
    
    183
    
    
    $
    74.92
    
    
    $
    13,6902nd Quarter  2008
    
    
    242
    
    
    $
    87.57
    
    
    $
    21,164Prior
    
    
    293
    
    
    $
    61.73
    
    
    $
    18,107May 2006  June 30, 2008
    
    
    718
    
    
    $
    73.79
    
    
    $
    52,961
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6. INCOME TAXES:
   7. DERIVATIVE FINANCIAL INSTRUMENTS:
  Inside FERC Gas Market Report
  Volume-
    
    AverageRemaining Contract Period
    
    MMBTU/Day
    
    Price/MMBTUCalendar 2008
    
    
    100,000
    
    
    $
    6.83Summer 2008 (July  October)
    
    
    20,000
    
    
    $
    6.88Calendar 2009
    
    
    10,000
    
    
    $
    7.51Summer 2009 (April  October)
    
    
    90,000
    
    
    $
    7.06
  13




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Volume-
    
    Average
    
    UnrealizedMMBTU/
    
    Price/
    
    Loss (000s) atType
    
    Remaining Contract Period
    
    Day
    
    MMBTU
    
    6/30/2008*Swap
    
    July 2008  Oct 2008
    
    
    190,000
    
    
    $
    7.19
    
    
    $
    (40,801
    )Swap
    
    Jan 2009  Dec 2009
    
    
    30,000
    
    
    $
    7.35
    
    
    $
    (14,273
    )
 
 *
    
    Unrealized losses are not adjusted for income tax effect.  8. DISCONTINUED OPERATIONS:
    For the Three Months
    
    
    For the Six MonthsEnded June 30,
    
    
    Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Operating revenues
    
    $
    
    
    
    $
    25,951
    
    
    $
    
    
    
    $
    45,568Post closing adjustment on sale of subsidiary
    
    
    743
    
    
    
    
    
    
    
    640
    
    
    
    Operating expenses
    
    
    
    
    
    
    12,399
    
    
    
    
    
    
    
    22,082Income before income tax provision
    
    
    743
    
    
    
    13,552
    
    
    
    640
    
    
    
    23,486Income tax provision
    
    
    261
    
    
    
    4,235
    
    
    
    225
    
    
    
    8,220Income from discontinued operations, net of tax
    
    $
    482
    
    
    $
    9,317
    
    
    $
    415
    
    
    $
    15,266
 9. FAIR VALUE MEASUREMENTS:
  14




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##### Table of Contents



Level 1:
    
    Quoted prices (unadjusted) in active markets for identical assets
and liabilities that we have the ability to access at the
measurement date.Level 2:
    
    Inputs other than quoted prices included within Level 1 that are
either directly or indirectly observable for the asset or
liability, including quoted prices for similar assets or
liabilities in active markets, quoted prices for identical or
similar assets or liabilities in inactive markets, inputs other
than quoted prices that are observable for the asset or
liability, and inputs that are derived from observable market
data by correlation or other means. Instruments categorized in
Level 2 include non-exchange traded derivatives such as
over-the-counter forwards and swaps.Level 3:
    
    Unobservable inputs for the asset or liability, including
situations where there is little, if any, market activity for the
asset or liability.
   Level 1
    
    Level 2
    
    Level 3
    
    TotalAssets:Derivatives
    
    $
    
    
    
    $
    1,071
    
    
    $
    
    
    
    $
    1,071Liabilities:Derivatives
    
    $
    
    
    
    $
    56,145
    
    
    $
    
    
    
    $
    56,145
  10. LEGAL PROCEEDINGS:
  
 ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   15




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##### Table of Contents



Rockies Express Pipeline.
   Discontinued Operations.
 Fair Value Measurements.
  16




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##### Table of Contents



Level 1(a)
    
    Level 2(b)
    
    Level 3(c)
    
    TotalAssets:Derivatives
    
    $
    
    
    
    $
    1,071
    
    
    $
    
    
    
    $
    1,071Liabilities:Derivatives
    
    $
    
    
    
    $
    56,145
    
    
    $
    
    
    
    $
    56,145
 
 (a)
    
    Values represent observable unadjusted quoted prices for traded instruments in active
markets.(b)
    
    Values with inputs that are observable directly or indirectly for the instrument, but do not
qualify for Level 1.(c)
    
    Values with a significant amount of inputs that are not observable for the instrument. Share-Based Payment Arrangements.
  Full Cost Method of Accounting.
  17




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##### Table of Contents



RESULTS OF OPERATIONS
 QUARTER ENDED JUNE 30, 2008 VS. QUARTER ENDED JUNE 30, 2007
            18




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##### Table of Contents



SIX MONTHS ENDED JUNE 30, 2008 VS. SIX MONTHS ENDED JUNE 30, 2007
            19




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
   Bank indebtedness.
  1 2
 Senior Notes, due 2015 and 2018:
   20




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##### Table of Contents



Operating Activities.
 Investing Activities.
 Financing Activities.
 OFF BALANCE SHEET ARRANGEMENTS
  CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISION OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
   
 ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Inside FERC Gas Market Report
 21




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##### Table of Contents



Volume-
    
    AverageRemaining Contract Period
    
    MMBTU/Day
    
    Price/MMBTUCalendar 2008
    
    
    100,000
    
    
    $
    6.83Summer 2008 (July  October)
    
    
    20,000
    
    
    $
    6.88Calendar 2009
    
    
    10,000
    
    
    $
    7.51Summer 2009 (April  October)
    
    
    90,000
    
    
    $
    7.06
  Volume-
    
    Average
    
    UnrealizedMMBTU/
    
    Price/
    
    Loss (000s) atType
    
    Remaining Contract Period
    
    Day
    
    MMBTU
    
    6/30/2008*Swap
    
    July 2008  Oct 2008
    
    
    190,000
    
    
    $
    7.19
    
    
    $
    (40,801
    )Swap
    
    Jan 2009  Dec 2009
    
    
    30,000
    
    
    $
    7.35
    
    
    $
    (14,273
    )
 
 *
    
    Unrealized losses are not adjusted for income tax effect.  
 ITEM 4 CONTROLS AND PROCEDURES
 (a) Evaluation of Disclosure Controls and Procedures
 22




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##### Table of Contents



PART II  OTHER INFORMATION
 
 ITEM 1.LEGAL PROCEEDINGS
  
 ITEM 1A.RISK FACTORS
  
 ITEM 2.CHANGES IN SECURITIES AND USE OF PROCEEDS
  Total Number
    
    
    Maximum Numberof Shares
    
    
    (or ApproximatePurchased
    
    
    Dollar Value)as Part of
    
    
    of Shares ThatPublicly
    
    
    May Yet beTotal Number
    
    
    Average
    
    
    Announced
    
    
    Purchasedof Shares
    
    
    Price Paid
    
    
    Plans or
    
    
    Under thePeriod
    
    Purchased
    
    
    per Share
    
    
    Programs
    
    
    Plans or ProgramsJan 1  Jan 31, 2008
    
    
    96,321
    
    
    $
    71.57
    
    
    
    96,321
    
    
    $699 millionFeb 1  Feb 28, 2008
    
    
    71,281
    
    
    $
    79.04
    
    
    
    71,281
    
    
    $693 millionMar 1  Mar 31, 2008
    
    
    228,830
    
    
    $
    75.61
    
    
    
    228,830
    
    
    $676 millionApr 1  Apr 30, 2008
    
    
    223,559
    
    
    $
    79.51
    
    
    
    223,559
    
    
    $658 millionMay 1  May 31, 2008
    
    
    45,668
    
    
    $
    90.07
    
    
    
    45,668
    
    
    $654 millionJun 1  Jun 30, 2008
    
    
    182,153
    
    
    $
    92.88
    
    
    
    182,153
    
    
    $637 millionTOTAL
    
    
    847,812
    
    
    $
    80.96
    
    
    
    847,812
    
    
    $637 million
  
 ITEM 3.DEFAULTS IN SENIOR SECURITIES
 23




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##### Table of Contents



ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS
  Michael D. Watford
    
    
    
    134,031,245 voted in favor, zero voted against and 839,676 withheld.W. Charles Helton
    
    
    
    134,499,794 voted in favor, zero voted against and 371,127 withheld.Stephen J. McDaniel
    
    
    
    133,826,892 voted in favor, zero voted against and 1,044,029 withheld.Roger A. Brown
    
    
    
    133,828,182 voted in favor, zero voted against and 1,042,739 withheld.Robert E. Rigney
    
    
    
    134,542,847 voted in favor, zero voted against and 328,074 withheld.
    
 ITEM 5.OTHER INFORMATION
  24




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##### Table of Contents



ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
 Exhibits
 3.1
    
    Articles of Incorporation of Ultra Petroleum Corp.  (incorporated
by reference to Exhibit 3.1 of the Companys Quarterly Report on
Form 10Q for the period ended June 30, 2001.)3.2
    
    By-Laws of Ultra Petroleum Corp-(incorporated by reference to
Exhibit 3.2 of the Companys Quarterly Report on Form 10Q for the
period ended June 30, 2001.)3.3
    
    Articles of Amendment to Articles of Incorporation of Ultra
Petroleum Corp. (incorporated by reference to Exhibit 3.3 of the
Companys Report on Form 10-K/A for the period ended December 31,
2005)4.1
    
    Specimen Common Share Certificate  (incorporated by reference to
Exhibit 4.1 of the Companys Quarterly Report on Form 10Q for the
period ended June 30, 2001.)10.1
    
    Master Note Purchase Agreement dated March 6, 2008 (incorporated by
reference to Exhibit 10.1 of the Companys Report on Form 8-K filed
on March 6, 2008).31.1*
    
    Certification of Chief Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2*
    
    Certification of Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32.1*
    
    Certification of Chief Executive Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.32.2*
    
    Certification of Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
 
 *
    
    filed herewith 25




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##### Table of Contents



SIGNATURES
  ULTRA PETROLEUM CORP.By:
    /s/ Michael D. WatfordName:
    Michael D. WatfordTitle:
    Chairman, President and Chief Executive Officer  By:
    /s/ Marshall D. SmithName:
    Marshall D. SmithTitle:
    Chief Financial Officer  26




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##### Table of Contents



EXHIBIT INDEX
 3.1
    
    Articles of Incorporation of Ultra Petroleum Corp.  (incorporated
by reference to Exhibit 3.1 of the Companys Quarterly Report on
Form 10Q for the period ended June 30, 2001.)3.2
    
    By-Laws of Ultra Petroleum Corp-(incorporated by reference to
Exhibit 3.2 of the Companys Quarterly Report on Form 10Q for the
period ended June 30, 2001.)3.3
    
    Articles of Amendment to Articles of Incorporation of Ultra
Petroleum Corp. (incorporated by reference to Exhibit 3.3 of the
Companys Report on Form 10-K/A for the period ended December 31,
2005)4.1
    
    Specimen Common Share Certificate  (incorporated by reference to
Exhibit 4.1 of the Companys Quarterly Report on Form 10Q for the
period ended June 30, 2001).10.1
    
    Master Note Purchase Agreement dated March 6, 2008 (incorporated
by reference to Exhibit 10.1 of the Companys Report on Form 8-K
filed on March 6, 2008).31.1*
    
    Certification of Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.31.2*
    
    Certification of Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.32.1*
    
    Certification of Chief Executive Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.32.2*
    
    Certification of Chief Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
 
 *
    
    filed herewith 27