Ultra Petroleum files Chapter 11, solicits consents for prepackaged plan

Chicago, May 14 – Ultra Petroleum Corp. has voluntarily filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division on Thursday, according to a press release.

The company has agreed to the terms of a comprehensive balance sheet restructuring with key creditor constituencies, more specifically including holders of 100% of the loans under its first lien revolving bank loan credit facility, 85% of the loans under its first-lien term loan, and 67% of its second-lien notes.

The company has secured a commitment for financing of up to $25 million from certain holders of the company’s first-lien term loan. Combined with cash on hand and normal operation cash flow, the money is expected to allow Ultra to maintain normal operation and meet ongoing financial commitments through the restructuring period.

First day motions have been filed to allow the company to continue to pay employee wages and provide benefits without interruption in the ordinary course of business.

The Company also expects to pay suppliers and vendors in full under normal terms for goods and services and will continue making royalty and working interest payments when due.

The company has also worked with its existing lenders under its revolving bank loan credit facility to secure exit financing in the form of a revolver with a $100 million borrowing base and total commitments of $60 million.

Ultra Petroleum hopes to eliminate $2 billion in debt from its balance sheet and substantially deleverage its capital structure.

The company hopes to finalize within the next three months.

“This financial restructuring will result in an enterprise with very little debt, good liquidity, and significant free cash flow that is underpinned by a large-scale, low-cost base of natural gas and condensate production,” Brad Johnson, chief executive officer of Ultra said.

Centerview Partners LLC is acting as financial advisor for the company, Kirkland & Ellis is acting as legal advisor, and FTI Consulting is acting as restructuring advisor.

Evercore Group, LLC is acting as financial advisor for the consenting term lenders and Stroock & Stroock & Lavan LLP is acting as legal advisor for the consenting term lenders.

The case number is 20-32631.

Ultra Petroleum is a natural gas and oil exploration, development and production company based in Englewood, Colo.

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