Ultra Petroleum Corp., Houston, (NYSE: UPL) reports its Pennsylvania Marcellus and Wyoming Pinedale operations in 2009.

During 2009, Ultra drilled 37 gross (22.5 net) wells in Pennsylvania. The company’s first production in the Marcellus program began in July, and by year-end 13 wells were producing. Initial production rates average 7.5 million cubic feet of gas per day with an average lateral length of more than 3,800 feet.

Preliminary estimated ultimate recoveries affirm Ultra’s 3.75 billion cubic feet of gas equivalent type-curve, with some preliminary EURs exceeding 6 billion cubic feet equivalent. The cost to drill and complete a horizontal Marcellus well during 2009 was $3.5 million.

The company’s four pipeline interconnects to major interstate pipelines remain ahead of the drilling campaign. By mid-year, this interconnect capacity is expected to exceed 560 million cubic feet per day, according to Ultra.

Ultra increased its Marcellus holdings from 288,000 gross (152,000 net) to 326,000 gross (169,000 net) acres by year-end. On Dec. 21, Ultra entered a deal to acquire approximately 160,000 gross (80,000 net) acres in the Marcellus. Upon closing in late February, the company will hold approximately 486,000 gross (249,000 net) acres. With the acquisition, the company’s core position in Tioga, Bradford, Lycoming and Potter counties in north-central Pennsylvania will expand to include the adjacent counties of Clinton and Centre.

Ultra chairman, president and chief executive Michael Watford says, “In 2009, we initiated our horizontal Marcellus activity with above expectation results. Accordingly, we believe that we have substantially de-risked our Marcellus acreage due to these results. Well performance is improving along with our returns. Of the horizontal wells that we have completed so far, IP rates have ranged from over 3.4 million cubic feet per day to 10.4 million cubic feet per day, including two wells that are producing over 7.5 million cubic feet per day after 30 days. Examining our early wells, the first six have 30-day production averaging over 3 million cubic feet per day with the next seven wells averaging over 5.7 million cubic feet per day. In 2010, our Marcellus development program will expand with a drilling program exceeding 110 wells.”

In Wyoming, Ultra drilled 222 gross (113.9 net) wells in 2009. In Pinedale, the company averaged 20 days per well spud to total depth as compared to its average of 24 days in 2008, a 17% improvement on 2008 figures. Ultra’s new measure of success is the number of wells drilled in less than 20 days from spud to total depth.

In 2009, 73% of the wells were drilled in less than 20 days as compared to 27% in 2008. During the fourth quarter, Ultra reports it set a new Pinedale record in drilling time from spud to total depth of 13,500 feet in 11 days.

Due to these improvements, pad well costs continue to decrease year-over-year.

Ultra brought on-line 16 delineation wells in the Pinedale Anticline in 2009. The EUR of these delineation wells averaged 26% higher than the pre-drill reserve estimates determined by the company’s independent third-party reserve engineering firm.

The company brought on-line nine five-acre wells in 2009. Ultra plans to continue conducting five-acre pilots in 2010 in order to gain more data to support increased density drilling in Pinedale.

Watford says, “We have a great team of folks executing daily on our legacy Wyoming assets with consistently improving results.”

Ultra Petroleum has oil and gas operations are in the Green River Basin of Wyoming in the Pinedale and Jonah fields and in Pennsylvania.