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Ultra Cuts Rig Count -43% in Q1 to Four; Talks Pinedale Vertical Program

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Ultra Petroleum reported its Q1 2018 results.

Highlights:

- First quarter production of 72.3 Bcfe increased 13% compared to first quarter 2017, beating mid-point of guidance. This is a slight reduction in output from 4Q17.

- Reduced operated rig fleet from 7 rigs to 4; all of which are equipped for horizontal development,

- Accelerated horizontal well activity while decreasing well costs; now targeting 25-30 horizontal wells for 2018:

• -- WB 9-23 A-2H online in Feb: IP= 54.5 MMcfe/d (873 Bopd, 10% oil)
  -- WB 9-23 A-3H online in Apr: IP= 11.7 MMcfe/d (146 Bopd, 7% oil)
  -- WB 8-25 A-1H online in Apr: IP= 28.5 MMcfe/d (441 Bopd, 9% oil)
  -- 3-well Average IP= 31.6 MMcfe/d (47% greater than budget case)
  -- 3-well Average cost: $8.6 million (4% below budget case)
  -- 5 additional horizontal wells currently completing or in flowback

• Vertical IP rates increasing: first quarter 2018 average IP = 7.7 MMcfe/d

Pinedale Vertical Program

During the first quarter, the Company and its partners brought online 48 gross (35.9 net) vertical wells in Pinedale. The average initial production (IP) rate for new operated vertical wells brought online in the first quarter of 2018 was 7.7 million cubic feet equivalent (MMcfe) per day.

Unless pricing improves, the Company plans to devote a significant amount of its remaining capital spending for 2018 to drilling horizontal wells, which provide superior economic returns to vertical wells.