3. DEBT AND OTHER LONG-TERM OBLIGATIONS:

			September 30,		December 31,
			2011		2010

	Short-term debt:
	Bank indebtedness	$	278,000	$	-

	Long-term obligations:
	Senior Notes		1,560,000		1,560,000
	Other long-term obligations		76,992		52,575

	Total long-term obligations	$	1,636,992	$	1,612,575

Bank indebtedness: At September 30, 2011, the Company (through its subsidiary, Ultra Resources) was a party to a revolving credit facility with a syndicate of banks led by JP Morgan Chase Bank, N.A. which was to mature in April 2012 (the “2007 Credit Agreement”). On October 6, 2011, in anticipation of the upcoming maturity of the 2007 Credit Agreement, the Company, through Ultra Resources (the “Borrower”), replaced the 2007 Credit Agreement in its entirety with a senior unsecured revolving credit facility with JP Morgan Chase Bank, N.A. as administrative agent, and the lenders party thereto (the “2011 Credit Agreement”) and repaid all amounts outstanding under the 2007 Credit Agreement with proceeds of loans drawn under the 2011 Credit Agreement. (For a description of the 2011 Credit Agreement, see Note 9).

The 2007 Credit Agreement provided an initial loan commitment of $500.0 million. Loans under the 2007 Credit Agreement were unsecured and bore interest, at the Company's option, based on (A) a rate per annum equal to the higher of the prime rate or the weighted average fed funds rate on overnight transactions during the preceding business day plus 50 basis points, or (B) a base Eurodollar rate, substantially equal to the LIBOR rate, plus a margin based on a grid of the Borrower's consolidated leverage ratio (125 basis points per annum as of September 30, 2011).

At September 30, 2011, the Company had $278.0 million in outstanding borrowings and $222.0 million of available borrowing capacity under the 2007 Credit Agreement.

The 2007 Credit Agreement had restrictive covenants that included the maintenance of a ratio of consolidated funded debt to EBITDAX (earnings before interest, taxes, DD&A and other non-cash charges) not to exceed three and one half times; and as long as the Company's debt rating was below investment grade, the maintenance of an annual ratio of the net present value of the Company's oil and gas properties to total funded debt of at least 1.75 to 1.00. At September 30, 2011, the Company was in compliance with all of its debt covenants under the 2007 Credit Agreement.

Senior Notes: The Senior Notes rank pari passu with the Company's 2007 Credit Agreement and the 2011 Credit Agreement. Payment of the Senior Notes is guaranteed by Ultra Petroleum Corp. and UP Energy Corporation. The Senior Notes are pre-payable in whole or in part at any time and are subject to representations, warranties, covenants and events of default customary for a senior note financing. At September 30, 2011, the Company was in compliance with all of its debt covenants under the Master Note Purchase Agreement for Senior Notes.

Other long-term obligations: These costs primarily relate to the long-term portion of production taxes payable and asset retirement obligations.