Ultra Petroleum files pre-packaged Chapter 11 plan of reorganization

By Caroline Salls

Pittsburgh, May 15 – Ultra Petroleum Corp. filed its pre-packaged plan of reorganization and related disclosure statement Friday with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, Ultra Petroleum filed Chapter 11 bankruptcy Thursday after agreeing 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 said it hopes to eliminate $2 billion in debt from its balance sheet and substantially deleverage its capital structure. According to its Chapter 11 petition, Ultra Petroleum had $1.45 billion in total assets and $2.56 billion in total debt as of March 31.

Under the plan, holders of first-lien RBL claims will receive either an exit RBL lender cash election amount equal to 85% of the claim if the holder provided the company with an executed signature page to the exit RBL commitment letter and exercises an exit RBL lender cash or election, or a share of 97.5% of the new interests in the reorganized company, subject to dilution.

Holders of first-lien term loan claims will receive the right to participate in a rights offering and a share of a first-lien term loan distribution.

According to the disclosure statement, holders of first-lien claims that are accredited investors or qualified institutional buyers will have the opportunity to participate in an offer to purchase up to $85 million in new interests under the rights offering. The company said 50% of the rights offering securities will be reserved for rights offering participants, and 50% are reserved for priority backstop parties.

Holders of second-lien notes claims will receive a share of a second-lien notes distribution, which consists of 2.5% of the new interests, subject to dilution, and make-whole instruments entitling them to 45% of any make-whole litigation proceeds.

If holders of general unsecured claims vote to accept the plan, they will receive a share of $250,000. If the class votes to reject the plan, these creditors will receive no distribution.

Ongoing trade claims will be reinstated and satisfied in the ordinary course of business.

Holders of existing interests will receive no distribution.

On the plan effective date, reorganized Ultra Petroleum will enter into a $60 million exit facility.

Ultra Petroleum is a natural gas and oil exploration, development and production company based in Englewood, Colo. The Chapter 11 case number is 20-32631.

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