Ultra Petroleum disclosure approved; plan hearing set for March 14

By Caroline Salls

Pittsburgh, Feb. 14 – Ultra Petroleum Corp. received court approval of the disclosure statement for its revised second amended plan of reorganization, according to an order filed Monday with the U.S. Bankruptcy Court for the Southern District of Texas.

The plan confirmation hearing is scheduled for March 14.

As previously reported, the company entered into a plan support agreement and backstop commitment agreement with holders of a substantial majority of the principal amount of its outstanding 5¾% senior notes due 2018 and 6 1/8% senior notes due 2024 and shareholders who own at least a majority of the company’s common stock or economic interests.

The agreement sets the terms of a joint plan of reorganization with a total plan value of $6.25 billion, $6 billion or $5.5 billion, depending on commodity prices, for the Ultra entities.

Rights offering

Under the backstop agreement, the commitment parties will fund a $580 million offering of rights to purchase shares of common stock in the reorganized company. The company said $580 million in cash will be raised at an implied 20% discount.

Noteholder rights offering shares will reflect a total purchase price of $435 million, and equityholder shares will reflect a total purchase price of $145 million.

The Ultra entities will pay the commitment parties a premium equal to 6% of the $580 million committed amount, either in the form of new common stock at the rights offering price if the plan takes effect or in cash in the amount of 4% of the $580 million committed amount if the backstop agreement is terminated.

Ultra Petroleum also received a commitment from Barclays Bank plc for $2.4 billion in exit financing.

Plan terms

Ultra said the plan provides for a comprehensive restructuring of all allowable claims against and interests, including the conversion of outstanding unsecured senior notes issued to newly issued shares of common stock, the exchange of outstanding unsecured senior notes issued by Ultra Resources, Inc. for new unsecured notes issued by Ultra Resources and cash, and the payment in full of all other allowed claims against the Ultra entities in cash.

The specific plan terms will include the following:

• Holders of common stock will receive a share of 41% of the equity in the company after the reorganization is completed and a share of rights to participate in the rights offering for 5.4% of the equity, all subject to dilution by a management incentive plan;

• Holders of the 2018 notes and 2024 notes will receive a share of 36.2% of the equity and rights to participate in the rights offering for 16.1% of the equity, all subject to dilution by the management incentive plan;

• The commitment parties will receive a share of 1.3% of the equity;

• Holders of unsecured senior notes issued by Ultra Resources, Inc. and/or the Ultra Resources, Inc. credit agreement claims will receive a share of $2 billion in principal amount of new unsecured notes to be issued by Ultra Resources, Inc. and cash;

• An additional $200 million of the new Ultra Resources notes will be held in reserve for or issued to make-whole claimants following resolution of those claims; and

• Holders of other claims in the Ultra proceedings will be paid in full in cash.

Ultra Petroleum is a Houston-based independent exploration and production company. The company filed bankruptcy on April 29, 2016 in the U.S. Bankruptcy Court for the Southern District of Texas under Chapter 11 case number 16-32202.

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