Ultra Petroleum to pay $150 million in breach-of-contract settlement

By Caroline Salls

Pittsburgh, Jan. 17 – Ultra Petroleum Corp. reached an agreement to settle Rockies Express Pipeline LLC's $303 million breach of contract claim, according to a news release.

The company said the settlement will be submitted to the U.S. Bankruptcy Court for the Southern District of Texas for approval and will be implemented in connection with Ultra’s Chapter 11 plan of reorganization.

According to the release, the settlement includes a cash payment of $150 million to Rockies Express six months after Ultra emerges from Chapter 11, but no later than Oct. 30, 2017.

Additionally, Ultra said it agreed to enter into a new seven-year firm transportation agreement with Rockies Express, beginning on Dec. 1, 2019, for service west-to-east of 200,000 dekatherms per day at a rate of $0.37, or $26.8 million annually.

“This settlement removes the uncertainty around this very significant claim and represents a critical step toward the implementation of the plan of reorganization we filed last month,” Ultra chairman, president and chief executive officer Michael Watford said in the release.

Ultra Petroleum is a Houston-based independent exploration and production company. The company filed bankruptcy on April 29, 2016 under Chapter 11 case number 16-32202.

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