Ultra Petroleum files bankruptcy to explore restructuring alternatives

By Caroline Salls

Pittsburgh, May 2 – Ultra Petroleum Corp. filed Chapter 11 bankruptcy on April 29 in the U.S. Bankruptcy Court for the Southern District of Texas.

“During the coming weeks and months, the debtors plan to engage all of their constituencies, including the to-be-formed official committee of unsecured creditors, in a productive dialogue regarding restructuring alternatives designed to maximize value for all of the company’s stakeholders,” senior vice president and chief financial officer Garland R. Shaw said in a statement filed with the court.

“The debtors also plan to carefully evaluate their contractual obligations and identify opportunities to renegotiate or reject those that are no longer beneficial to the estate.”

Ultra Petroleum said it also plans to seek recognition of the Chapter 11 proceedings in Yukon, Canada, under the Canadian Companies’ Creditors Arrangement Act.

The company announced last week that there was still substantial doubt about its ability to continue as a going concern, despite some improvement in crude oil and natural gas prices, and that it does not expect to make the $26 million interest payment due April 1 on its 6 1/8% senior notes due 2024 before the end of a 30-day grace period.

Ultra Petroleum said Friday that it could provide no assurance that it will be able to obtain waivers or other relief if it is unable to comply with existing debt obligations, and it is unlikely that it would be able to comply with all of the obligations and covenants in its debt agreements. In addition, the company has substantial unpaid principal maturities and interest payments that are past due on its debt.

In addition, the company said it has substantial additional principal maturities and interest payments coming due soon, and it does not have sufficient liquidity to pay unpaid and near-term principal maturities and interest payments or to pay its debt if accelerated without raising additional capital, which may only be available “on extremely onerous terms if it is available at all.”

According to court documents, Ultra Petroleum had $1,282,922,000 in total assets and $3,917,351,000 of total debt as of March 31.

The company’s largest unsecured claims are a $1.46 billion claim in connection with private placement notes issued by Ultra Resources, Inc.; a $1.3 billion notes claim asserted by indenture trustee Delaware Trust of Wilmington, Del.; a $999 million revolving credit facility claim asserted by agent JP Morgan Chase Bank, NA; a $303.19 million litigation claim asserted by Rockies Express Pipeline LLC of Houston; and a $38.6 million threatened litigation claim asserted by Sunoco Partners Marketing & Terminals LP.

The company is represented by Jackson Walker LLP.

Ultra Petroleum is a Houston-based independent exploration and production company. The Chapter 11 case number is 16-32202.

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