Fitch rates Ultra BB-

Fitch Ratings said it assigned BB- issuer default ratings to Ultra Resources, Inc. and Ultra Petroleum Corp. following the close of exit financing and the company's successful emergence from Ch. 11.

The ratings are based on the company's low cost position and an improved capital structure and leverage forecasts following emergence from Ch. 11, Fitch said.

Ultra's go-forward operating cost structure will have lower gathering costs and no transportation costs until December 2019 based on a series of contract renegotiations with midstream counterparties, the agency said.

When combined with reduced drilling and completion costs, this serves to lower expected all-in costs, Fitch said.

The ratings also consider the company's limited diversity with 91% of Ultra's total production in from the Pinedale field in Wyoming, the agency said.

Limited growth opportunities outside the Pinedale field and significant exposure to natural gas prices will likely serve to cap the rating in the BB category in the near term, Fitch said.

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