Ultra Petroleum lenders redetermine borrowing base at $1.75 billion

Chicago, Sept. 16 – Ultra Petroleum Corp. amended its credit facility, including establishing the fall borrowing base at $1.75 billion, according to a company news release.

The $1.75 billion borrowing base includes $200 million of commitment allocated to the credit facility, stepping down to $120 million in February 2020 when the credit facility balance nears full repayment.

The tenor of future hedging requirements was reduced as part of the amendment.

Financial maintenance covenants were removed from the credit facility.

Maximum capital expenditures were established at $65 million, $10 million and $5 million for the quarters ended Sept. 30, Dec. 31 and quarterly thereafter, with the ability to carry forward unused amounts of up to $5 million total.

The company may repurchase junior debt, including borrowings under the company’s term loan, second-lien notes and unsecured notes following the occurrence of certain events.

The fifth amendment also provides flexibility for the company to suspend drilling in the Pinedale field while natural gas prices remain near multiyear lows and preserve its highest value inventory for future development locations under more favorably pricing conditions.

“In the near term we will direct our free cash flow to the repayment of the credit facility, building flexibility for the company as we continue to focus on improvement of the overall capital structure,” Brad Johnson, Ultra Petroleum’s chief executive officer and president said.

Ultra Petroleum is a natural gas and oil exploration, development and production company based in Englewood, Colo.

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