SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001 OR [ ] 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. Employer incorporation or organization) Identification Number) 16801 Greenspoint Park Drive, Suite 370, Houston, Texas 77060 (Address of Principal Executive Offices) (Zip Code) (281) 876-0120 (Registrant's Telephone Number, Including Area Code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] The number of common shares, without par value, of Ultra Petroleum Corp., outstanding as of November 7, 2001 was 73,306,918. PART 1 -- FINANCIAL INFORMATION ITEM 1 -- FINANCIAL STATEMENTS ULTRA PETROLEUM CORP. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) For the Three Months Ended For the Nine Months Ended September 30, September 30, ------------------------------- -------------------------------- 2001 2000 2001 2000 ----------- ----------- ----------- ----------- Revenues Natural gas sales $ 6,077,854 $ 3,473,469 $31,351,991 $ 8,071,940 Oil sales 859,181 448,394 2,380,021 858,466 ----------- ----------- ----------- ----------- 6,937,035 3,921,863 33,732,012 8,930,406 Expenses Production expenses and taxes 1,722,796 844,921 6,797,124 2,131,137 Depletion and depreciation 1,690,540 704,835 5,044,785 1,733,179 General and administrative 1,266,476 379,832 3,379,297 1,777,443 Interest 471,052 200,643 1,138,992 517,123 ----------- ----------- ----------- ----------- 5,150,864 2,130,231 16,360,198 6,158,882 Operating income 1,786,171 1,791,632 17,371,814 2,771,524 Other income: Interest 14,201 8,525 102,903 14,780 Other 45,719 -- 176,057 -- ----------- ----------- ----------- ----------- 59,920 8,525 278,960 14,780 Income for the period 1,846,091 1,800,157 17,650,774 2,786,304 Income per common share -- basic $ 0.03 $ 0.03 $ 0.25 $ 0.05 =========== =========== =========== =========== Income per common share -- fully diluted $ 0.02 $ 0.03 $ 0.24 $ 0.05 =========== =========== =========== =========== Weighted average common shares outstanding -- basic 73,223,070 56,843,446 72,059,299 56,782,123 =========== =========== =========== =========== Weighted average common shares outstanding -- fully diluted 76,548,369 58,969,195 75,416,668 58,907,872 =========== =========== =========== =========== 2 ULTRA PETROLEUM CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Expressed in U.S. Dollars) Nine Months Ended September 30, ------------------------- 2001 2000 -------- -------- Cash provided by (used in): Operating activities: Income for the period $ 17,650,774 $ 2,786,304 Add (deduct) Items not involving cash: Depletion and depreciation 5,044,785 1,733,179 Stock compensation 848,447 -- Net changes in non-cash working capital: Restricted cash (5,890) 392,585 Accounts receivable 1,588,392 (1,548,904) Prepaid expenses and other current assets (285,562) (375,118) Note receivable (683,137) -- Accounts payable and accrued liabilities 7,233,753 2,172,694 Deferred revenue (75,000) (75,000) ------------ ------------ 31,315,562 5,085,740 Investing activities: Oil and gas property expenditures (36,409,693) (12,760,525) Purchase of capital assets (177,415) (197,326) Proceeds from sale of oil and gas properties -- 359,764 Cash received from Pendaries Merger 312,365 -- ------------ ------------ (36,274,743) (12,598,087) Financing activities: Long-term debt 4,404,060 8,050,800 Issuance of shares 574,014 172,032 ------------ ------------ 4,978,074 8,222,832 Increase in cash during the period 18,893 710,485 Cash and cash equivalents, beginning of period 1,143,591 401,691 ------------ ------------ Cash and cash equivalents, end of period $ 1,162,484 $ 1,112,176 ============ ============ Supplemental statements of cash flows information Supplemental schedule of non-cash investing activities: Acquisitions Fair value of assets acquired $ 43,950,263 $ -- Less: liabilities assumed (4,225,978) -- Cash acquired 312,365 -- ------------ ------------ Fair value of stock issued $ 40,036,650 $ -- ============ ============ 3 ULTRA PETROLEUM CORP. CONSOLIDATED BALANCE SHEETS (Unaudited) (Expressed in U.S. Dollars) September 30, December 31, 2001 2000 ------------- ------------ Assets Current assets Cash and cash equivalents $ 1,162,484 $ 1,143,591 Restricted cash 206,016 200,126 Accounts receivable 6,690,146 8,278,538 Prepaid expenses and other current assets 1,126,454 839,892 Note receivable -- 2,530,976 ------------ ------------ 9,185,100 12,993,123 Oil and gas properties, net, using the full cost method of Accounting 131,022,395 59,728,715 Capital assets, net 513,076 455,448 ------------ ------------ Total assets $140,720,571 $ 73,177,286 ============ ============ Liabilities and shareholders' equity Current liabilities Accounts payable and accrued liabilities $ 16,606,823 $ 12,752,483 Long-term debt 28,934,672 24,530,612 Deferred revenue 125,000 200,000 Shareholders' equity Share capital 92,547,774 50,838,663 Retained earnings 2,506,302 (15,144,472) ------------ ------------ 95,054,076 35,694,191 ------------ ------------ Total liabilities and shareholders' equity $140,720,571 $ 73,177,286 ============ ============ ULTRA PETROLEUM CORP. CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited) (Expressed in U.S. Dollars) Period Ended September 30, 2001 Period Ended September 30, 2000 ------------------------------- ------------------------------- Number Amount Number Amount ---------- ---------- ---------- ---------- Shares Capital Authorized 10,000,000 preferred shares 100,000,000 common shares Issued Common shares Balance, beginning of year 56,939,762 $ 50,838,663 56,751,125 $ 50,666,631 Employee stock option plan 652,000 574,013 5,000 4,032 Stock Compensation 682,198 1,098,448 119,403 80,000 Acreage option purchase -- -- 64,234 88,000 Merger with Pendaries Petroleum Ltd. 14,994,958 40,036,650 -- -- ---------- ------------ ---------- ------------ Balance, end of period 73,268,918 $ 92,547,774 56,939,762 $ 50,838,663 ---------- ------------ ---------- ------------ Retained earnings (deficit) Balance, beginning of year (15,144,472) (25,034,398) Earnings for period 17,650,774 2,786,304 ------------ ------------ Balance, end of period $ 2,506,302 $(22,248,094) ============ ============ 4 ULTRA PETROLEUM CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Expressed in U.S. dollars unless otherwise noted) Three months ended September 30, 2001 and 2000 and nine months ended September 30, 2001 and 2000 1. INCORPORATION AND NATURE OF OPERATIONS: Ultra Petroleum Corp. (the "Corporation") was originally incorporated under the laws of British Columbia, Canada. At March 1, 2000 the Corporation was continued under the laws of the Yukon Territory, Canada. Its principal business activity is the exploration and development of oil and gas properties located in the United States. The Corporation also owns interests in Petroleum Contracts covering exploration blocks in China. 2. SIGNIFICANT ACCOUNTING POLICIES: The financial statements are prepared using Canadian generally accepted accounting principles ("Canadian GAAP"), which differ from U.S. generally accepted accounting principles ("US GAAP"). We have described these differences in Note 6. The accompanying consolidated financial statements are unaudited, but reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the financial information for the interim period. We prepared these statements on a basis consistent with our annual audited statements and Regulation S-X. Regulation S-X allows us to omit some of the footnote and policy disclosures required by generally accepted accounting principles and normally included in annual reports on Form 10-K. These interim financial statements should be read in conjunction with the financial statements, summary of significant accounting policies and notes to our most recent annual report on Form 20-F for the year ended December 31, 2000. Certain prior year amounts have been reclassified to conform to the current year presentation. The results for the interim period are not necessarily indicative of results to be expected for the calendar year. (a) Basis of presentation: The consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries, Ultra Petroleum (USA) Inc., Ultra Resources, Inc. and Pendaries Petroleum, Ltd. and its wholly owned subsidiary, Sino American Energy Corporation (see item 4 below). All material intercompany transactions and balances have been eliminated upon consolidation. (b) Accounting principles: The consolidated financial statements are prepared in accordance with accounting principles generally accepted in Canada. (c) Revenue recognition and deferred revenue: Revenues from oil and gas operations are recognized at the time the oil is sold or natural gas is delivered. The cash received upon dedicating certain production volumes to a gas pipeline is deferred and is being included in natural gas sales on a straight line basis over the term of the five year dedication. (d) Restricted cash: Restricted cash represents cash received by the Corporation from production sold where the final division of ownership of the production is unknown or in dispute. Wyoming law states that these funds must reside in a federally insured bank in Wyoming. (e) Capital assets: Capital assets are recorded at cost and depreciated using the declining-balance method based on a seven-year useful life. (f) Oil and gas properties: The Corporation follows the full cost method of accounting for oil and gas operations whereby all costs associated with the exploration for and development of oil and gas reserves are capitalized. Such costs include land acquisition costs, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling both productive and non-productive wells and overhead charges directly related to acquisition, exploration and development activities. The capitalized cost, together with the costs of production equipment, are depleted and depreciated on the units-of-production method based on the estimated gross proved reserves as determined by independent petroleum engineers. Oil and gas reserves and production are converted into equivalent units at a 6:1 ratio based upon relative energy content. Costs of acquiring and evaluating unproved properties are initially excluded from the costs subject to depletion and depreciation. These unproved properties are assessed periodically to ascertain whether impairment has occurred. When proved reserves are assigned or the property is considered to be impaired, the cost of the property or the amount of the impairment is added to the costs subject to depletion and depreciation. The total capitalized cost of oil and gas properties less accumulated depletion and depreciation is limited to an amount equal to the estimated future net revenue from proved reserves, using current prices, plus the cost (net of impairment) of unproven properties, less estimated future site restoration costs, general and administrative expenses, financing costs and income taxes. 5 Proceeds from the sale of oil and gas properties are applied against capitalized costs, with no gain or loss recognized, unless such a sale would significantly alter the rate of depletion. Substantially all of the Corporation's exploration, development and production activities are conducted jointly with others and, accordingly, these financial statements reflect only the Corporation's proportionate interest in such activities. (g) Income taxes: The Corporation follows the asset and liability method for accounting for income taxes. Under the asset and liability method, the change in the net deferred tax asset or liability is included in income. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The Company recorded no tax provision in the three and nine months ended September 30, 2001. The deferred tax asset will be recognized in the financial statements when its realization is more likely than not. (h) Foreign currency translation: The Corporation has adopted the United States dollar as its reporting currency, which is also its functional currency. The Corporation and its subsidiaries are considered to be integrated operations and accounts in Canadian dollars are translated using the temporal method. Under this method, monetary assets and liabilities are translated at the rates of exchange in effect at the balance sheet date; non-monetary assets at historical rates and revenue and expense items at the average rates for the period other than depletion and depreciation which are translated at the same rates of exchange as the related assets. The net effect of the foreign currency translation is included in current operations. (i) Change in accounting policies For 2001, the Corporation adopted the new Canadian Institute of Chartered Accountants (CICA) accounting standards, Section 1751, "Interim Financial Statements", and Section 3500, "Earnings per Share" ("EPS"). Section 3500 requires the use of treasury stock method to compute the dilutive effect of stock options. The changes to EPS standard do not have a material impact on the calculated earnings per share. (i) Use of estimates: Preparation of consolidated financial statements in accordance with generally accepted accounting principles in Canada requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 3. OIL AND GAS PROPERTIES: September 30, December 31, 2001 2000 ------------- ------------ Developed Properties: Acquisition, equipment, exploration drilling and environmental costs $130,283,036 $54,362,982 Less accumulated depletion, depreciation and Amortization (12,537,318) (7,047,605) ------------ ----------- 117,745,718 47,315,377 Unproven Properties: Acquisition and exploration costs 13,276,677 12,413,338 ------------ ----------- $131,022,395 $59,728,715 ============ =========== During January 2001, the Corporation issued 14,995,000 common shares to acquire Pendaries Petroleum. The purchase price for Pendaries was $40 million. This transaction did not effect the Corporation's liquidity. 4. LONG-TERM DEBT: September 30, December 31, 2001 2000 ------------- ------------ Bank indebtedness $25,650,000 $17,650,000 Note payable, including accrued interest -- -- Short term obligations to be refinanced $ 3,284,672 6,880,612 ----------- ----------- $28,934,672 $24,530,612 =========== =========== Bank indebtedness: On November 7, 1997, the Corporation entered into a credit facility (Initial Facility) with Wells Fargo with an initial borrowing base of $2,650,000. The borrowing base at December 31, 1999 was amended to $12,000,000 with a final maturity date of April 1, 2000. The outstanding balance of the Initial Facility bears interest at prime rate plus two percent and is secured by all of the Corporation's oil and gas properties. 6 On March 22, 2000, the Corporation entered into a new senior revolving credit facility (New Facility) with Bank One, Texas N.A. Proceeds from the New Facility were used to pay off the outstanding balance of the Initial Facility at March 22, 2000 and to fund the Corporation's drilling programs. This facility provides for a maximum line of credit of $40 million with an initial borrowing base of $18 million. The borrowing base was increased on January 19, 2001 to $28 million based on increased reserves. The outstanding balance on the line bears interest at the bank's Prime Rate or LIBOR plus two and one half percent and is secured by all of the Corporation's Wyoming oil and gas properties. Effective July 19, 2001 the revolving credit line was increased to $43 million. The New Facility expires on March 1, 2003. The credit facility requires the Corporation to maintain certain financial ratios. At September 30, 2001, the Corporation was in compliance with the required ratios. Short term obligations to be refinanced: These costs relate to drilling obligations, which will be funded on a long term basis through the use of the available borrowing base of bank indebtedness. 5. NOTE RECEIVABLE: In conjunction with the arrangement pursuant to which the Corporation acquired all of the issued and outstanding shares of Pendaries Petroleum Ltd (Pendaries), the Corporation provided a U.S. $5.0 million line of credit to Pendaries' subsidiary, Sino-American Energy Corporation (Sino-American). The line of credit bears interest at the prime rate of Bank One Texas, N.A (9.3% at December 31, 2000). The credit facility was fully guaranteed by Pendaries and secured by all of the stock of Sino-American. The outstanding balance at December 31, 2000 was $2,530,976. On January 16, 2001, the Pendaries acquisition was closed and the note was converted to an inter-company receivable. 6. DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CANADA AND THE UNITED STATES: The consolidated financial statements have been prepared in accordance with Canadian GAAP. There were no material differences between Canadian GAAP and US GAAP. In July 2001, the Financial Accounting Standards Board approved for issuance SFAS No. 143, "Accounting for Asset Retirement Allocations." SFAS No. 143 requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived asset and is effective for the fiscal years beginning after June 15, 2002. The Corporation is in the process of determining the impact of this statement on the calendar 2001 financial statements. ITEM 2 - MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2001 VS. THREE MONTHS ENDED SEPTEMBER 30, 2000 OPERATING REVENUES Oil and gas revenues increased to $6,937,035 for the three months ended September 30, 2001 from $3,921,863 for the same three months in 2000. This increase was primarily attributable to an increase in the Corporation's production. During this period the Corporation's production increased to 2.8 Bcf of gas, and 29 thousand barrels of condensate, up from 1.2 Bcf of gas and 13 thousand barrels of condensate for the same three months in 2000. During the three months ended September 30, 2001, the average product prices decreased to $2.15 per Mcf and $29.38 per barrel, compared to $2.84 per Mcf and $33.41 per barrel for the same three months in 2000. PRODUCTION EXPENSES During the three months ended September 30, 2001, production expenses and production taxes increased to $1,722,796 from $844,921 in 2000. Direct lease operating expenses increased to $364,902 in 2001 from $173,717 in 2000. On a unit of production basis, direct operating expenses decreased to $0.12 per Mcfe in 2001, as compared to $0.13 per Mcfe in 2000. Production taxes in 2001 were $683,823, compared to $382,259 in 2000 or $0.23 per Mcfe in 2001, compared to $0.29 per Mcfe in 2000. The increase in production taxes was attributable to higher revenue for the period as production taxes are based on a percentage of revenue from production. Gathering fees for the period increased in 2001 to $674,071 from $288,845 in 2000. This increase was also attributable to higher production volumes. DEPLETION AND DEPRECIATION Depletion and depreciation expense increased to $1,690,540 during the three months ended September 30, 2001 from $704,835 for the same three months in 2000. On a unit basis, DD&A increased to $0.56 per Mcfe, from $0.54 in 2000 primarily as a result of increases in current and future costs applicable to the full cost pool during the period. GENERAL AND ADMINISTRATIVE General and administrative expenses increased to $1,266,476 during the three months ended September 30, 2001 from $379,832 for the same three months in 2000. The increase was primarily attributable to increase in personnel and overhead expenses associated with the Pendaries merger that took place in January of 2001. Also, in August of 2001 there were 62,500 shares of stock compensation granted that were valued at $299,375.00 US. INTEREST Interest expense for the three months increased to $471,052 in 2001 from $200,643 in 2000. This increase was attributable to the increase in borrowings under the senior credit facility. 7 NINE MONTHS ENDED SEPTEMBER 30, 2001 VS. NINE MONTHS ENDED SEPTEMBER 30, 2000 OPERATING REVENUES Oil and gas revenues increased to $33,732,012 for the nine-month period ending September 30, 2001 from $8,930,406 for the same period in 2000. This increase was attributable to an increase in both the Corporation's production and the increase in prices received for that production. During this period, the Corporation's production increased to 8.2 Bcf of gas, and 86 thousand barrels of condensate, up from 2.9 Bcf of gas and 28 thousand barrels of condensate for the same period in 2000. During the nine-month period ending September 30, 2001, the average product prices were $3.84 per Mcf and $27.56 per barrel, compared to $2.80 per Mcf and $30.94 per barrel for the same period in 2000. PRODUCTION EXPENSES During the nine-month period ending September 30, 2001, production expenses and production taxes increased to $6,797,124 from $2,131,137 in 2000. Direct lease operating expenses increased to $972,125 in 2001 from $489,731 in 2000. On a unit of production basis, direct lease operating expenses decreased 31% to $0.11 per Mcfe in 2001, from $0.16 per Mcfe in 2000. Production taxes for this period in 2001 were $3,683,425, compared to $889,346 in 2000. Production taxes are calculated based on a percentage of revenue from production. Higher production and higher prices contributed to the increases. Gathering fees for the period increased in 2001 to $2,141,574 from $752,060 in 2000, which was attributable to higher production volumes. DEPLETION AND DEPRECIATION Depletion and depreciation expenses increased to $5,044,785 during the nine- month period ending September 30, 2001 from $1,733,179 for the same period in 2000. On a unit basis, DD&A increased to $0.58 per Mcf, from $0.57 in 2000 primarily as a result of increases in proved reserves and costs realized to the full cost pool during the period. GENERAL AND ADMINISTRATIVE General and administrative expenses increased to $3,379,297 during the nine- month period ending September 30, 2001 from $1,777,443 for the same period in 2000. The increase was attributable primarily to increase in personnel and overhead expenses associated with the Pendaries merger that took place in January of 2001, along with stock compensation booked in the third quarter as described above. INTEREST Net interest expense for the period increased to $1,138,992 in 2001 from $517,123 in 2000. This increase was attributable to both the increase in borrowings under the senior credit facility and reduction in cash balances earning interest. LIQUIDITY AND CAPITAL RESOURCES The Corporation's primary sources of cash during the first nine months of 2001 were cash flows from operations and borrowings under its credit facility. Additionally, the Corporation realized cash from the issuance of its common shares related to the exercise of options. During the first nine months of 2001, cash provided by operating activities before changes in non-cash working capital was $23,544,006, compared to $4,519,483 for the same period in 2000. The Corporation has a $100 million revolving credit facility with BankOne, Texas N.A., which allows the Corporation to borrow, repay and re-borrow amounts up to a borrowing base. The borrowing base is currently $43 million. The borrowing base is reset periodically by the lenders under the credit facility based on the Corporation's proved reserves and other factors deemed relevant to the lenders, at their discretion. The credit facility matures on March 1, 2003. Borrowings under the credit facility currently bear interest at the BankOne's prime rate or the London Inter-Bank Offered Rate plus 2.5%. During the first nine months of 2001, the weighted average interest rate on outstanding borrowings under the credit facility was 7.5%. As of November 7, 2001, the Corporation had $36,650,000 borrowed under the facility. The borrowing base is currently being reviewed and the Corporation expects that it will increase. During the first nine months of 2001, the Corporation's principal capital expenditures were to develop its properties and to acquire Pendaries. During this period, the Corporation spent $37 million to drill exploration and development wells, $30 million of which was spent to drill 23 wells in the United States and $7 million of which was spent to drill 13 wells in China. During January 2001, the Corporation issued 14,995,000 common shares to acquire Pendaries Petroleum. The purchase price for Pendaries was $40 million. This transaction did not effect the Corporation's liquidity. The Corporation believes that cash flows from operations and borrowings under its credit facility will be sufficient to finance its anticipated 2001 capital budget of $59 million. The Corporation may, however, seek to arrange for other sources of capital depending on market conditions to assure sufficient capital availability. CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISION OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This report contains "forward looking statements" within the meaning of the federal securities laws. These forward-looking statements include the Corporation's outlook for the remainder of 2001 with regard to plans for funding operations and capital expenditures; however, future cash flows and continued availability of financing are subject to a number of uncertainties beyond the Corporation's control. There can be no assurances that adequate funding will be available to execute the Corporation's planned future capital program. These risks and uncertainties include, but are not limited to, fluctuations in the price we receive for oil and gas production, reductions in the quantity of oil and gas sold due to increased industry-wide demand and/or curtailments in production from specific properties due to mechanical, marketing or other problems, operating and capital expenditures that are either significantly higher or lower than anticipated because the actual cost of identified projects varied from original estimates and/or from the number of exploration and development opportunities being greater or fewer than currently anticipated and increased financing costs due to a significant increase in interest rates. ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Corporation's revenues are derived from the sale of its crude oil and natural gas production. The prices for oil and gas have decreased from the prices prevailing on January 1, 2001; however, they remain extremely volatile and sometimes experience large fluctuations as a result of relatively small changes in supplies, weather conditions, economic conditions and government actions. At this time the Corporation has not entered into any derivative financial instruments or forward sales longer than to hedge oil and gas price risks for the production volumes to which the hedge relates. However, the Corporation may enter into hedges in the future that would reduce the Corporation's exposure on the hedged volumes to decreases in commodity prices and limit the benefit the Corporation 8 might otherwise receive from any increases in commodity prices on the hedged volumes. There have been no significant changes in market risks faced by the Corporation since the end of 2000. PART 2 - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS None ITEM 4. OTHER INFORMATION Effective July 16, 2001, the Corporation effected a restructuring of its subsidiaries. Under this restructuring, Pendaries Petroleum, Ltd., a wholly owned subsidiary of the Corporation since the merger in January 2001, was dissolved into Ultra Petroleum Corp. A new wholly owned subsidiary of the Corporation, UP Energy Corporation, a Nevada Corporation was formed. Ultra Petroleum (USA) Inc. was merged into Ultra Resources, Inc., therefore the final restructuring resulted in Ultra Resources Inc. and Sino-American Energy Corporation becoming wholly owned subsidiaries of UP Energy Corporation, itself a wholly owned subsidiary of Ultra Petroleum Corp. ITEM 5. EXHIBITS AND REPORTS ON FORM 8-K (a.) Exhibits 2. Plan of acquisition, reorganization, arrangement, liquidation or succession* 3. Articles of Incorporation and By-Laws 3.1 Articles of Incorporation of Ultra Petroleum Corp. - (incorporated by reference from Exhibit 3.1 of the Corporation's Quarterly Report on Form 10-Q for the period ended June 30, 2001) 3.2 By-Laws of Ultra Petroleum Corp. - (incorporated by reference from Exhibit 3.2 of the Corporation's Quarterly Report on Form 10-Q for the period ended June 30, 2001) 4. Instruments defining the rights of security holders, including indentures 4.1 Specimen common share certificate - (incorporated by reference from Exhibit 4.1 of the Corporation's Quarterly Report on Form 10-Q for the period ended June 30, 2001) 10. Material contracts 10.1 First Amendment to Credit Agreement dated July 19, 2001 10.2 Articles of Merger dated July 16, 2001 10.3 Plan of Merger and Reorganization dated July 16, 2001 11. Statement re computation of per share earnings* 15. Letter re unaudited interim financial information* 18. Letter re change in accounting principles* 19. Report furnished to security holders* 22. Published report regarding matters submitted to vote of security holders* 23. Consents of experts and counsel* 24. Power of attorney* 99. Additional exhibits* ---------- *Inapplicable to this filing (b) Reports on Form 8-K None 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ULTRA PETROLEUM CORP. Date November 7, 2001 By: /s/ Michael D. Watford ----------------------------- Name: Michael D. Watford Title: Chief Executive Officer By: /s/ Kristen J. Miller ----------------------------- Name: Kristen J. Miller Title: Financial Reporting Manager 10