Ultra Petroleum exclusivity extension, contract suspension deal OK’d

By Caroline Salls

Pittsburgh, Feb. 23 – Ultra Petroleum Corp. received an extension of its exclusive periods for filing and soliciting votes on a Chapter 11 plan, according to an order filed Wednesday with the U.S. Bankruptcy Court for the Southern District of Texas.

The company’s exclusive filing period was extended through April 15 from Feb. 28 and the solicitation period through June 15 from April 30.

Ultra Petroleum said the extension is critical to giving it a stable platform upon which to attempt to “fold in” the official committee of unsecured creditors and operating company stakeholders to the restructuring contemplated by its plan support agreement and, if no consensus can be reached, to prosecute a plan.

“The debtors are hopeful that, based on their steady progress to date, that they will be able to use a further extension to forge consensus on a restructuring that will maximize recoveries for all stakeholders,” the motion said.

In addition, Ultra Petroleum obtained court approval of a crude contract suspension claim settlement reached with Big West Oil LLC, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Texas.

Under the crude contracts, Big West agreed to purchase Ultra’s wax crude and condensate production. However, shortly before filing for bankruptcy, Ultra said it entered into a temporary suspension of contracts and interim crude oil purchase and sale agreement with Big West.

Specifically, the parties agreed to suspend their performance under the contracts for the 180-day period after Ultra’s bankruptcy filing, extended to Feb. 28, provided that the Ultra debtors would continue to sell and deliver, and Big West agreed to purchase and accept, the wax crude oil and condensate production.

Ultra said the parties also agreed to reserve their rights to collect and enforce any damages arising from the suspension of the contracts.

In August 2016, Big West filed claims against several Ultra Petroleum entities, each of which asserted a general unsecured claim of $32.57 million on account of the crude contracts, the suspension agreement and Ultra’s anticipated rejection of the contracts.

Under the settlement, each of the Big West claims will be deemed to be reduced to $17.35 million, and Big West will have an allowed unsecured claim against each of the debtors in that amount.

However, Big West will not recover more than $17.35 million in total under the agreed claims.

Also under the settlement, the crude contracts will be deemed rejected, and Big West will not have any claims against the Ultra debtors in connection with the rejection.

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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