Ultra Petroleum bankruptcy constitutes default under Pinedale lease

By Caroline Salls

Pittsburgh, May 15 – Ultra Petroleum Corp.’s Chapter 11 bankruptcy filing, as well as that of debtor Ultra Wyoming, constituted an event of default under the terms of a Pinedale LGS lease agreement, according to an 8-K filed by CorEnergy Infrastructure Trust, Inc. on Friday with the Securities and Exchange Commission.

CorEnergy said Ultra Wyoming operates the Pinedale LGS and is the tenant under the Pinedale lease agreement with CorEnergy wholly owned subsidiary Pinedale LP. Ultra Petroleum is the guarantor under the lease agreement.

According to the 8-K, Ultra Wyoming has also asked the court to reject the Pinedale lease, effective June 30. CorEnergy said it expects to conduct negotiations with Ultra Petroleum regarding the lease.

Pending the effective date of the rejection, CorEnergy said the Bankruptcy Code generally requires Ultra Wyoming to comply with the provisions of the Pinedale lease, as a result, the company said it expects the June 1 rent payment to be made.

CorEenrgy said Prudential previously agreed to forbear through Sept. 1 or the earlier occurrence of a separate event of default related to a Pinedale facility from exercising any rights they may have to accelerate amounts due under the Pinedale facility as a result of occurrence of either a bankruptcy filing made by Ultra Petroleum or Ultra Wyoming and any resulting impact on Pinedale LP’s net worth covenant under the Pinedale facility arising from any accounting impairment of Pinedale LP assets by the bankruptcy filing.

As a result of a limited waiver provided by Prudential, CorEnergy said the Ultra Petroleum bankruptcy filing does not create a current default under any of CorEnergy’s other debt.

Ultra Petroleum is a natural gas and oil exploration, development and production company based in Englewood, Colo. The company filed bankruptcy on May 14 in the U.S. Bankruptcy Court for the Southern District of Texas under Chapter 11 case number 20-32631.

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