Bankruptcy / Restructure Update | Financial Results | Financial Trouble | Capital Markets

Ultra Petroleum Files for Bankruptcy Again After Giving Execs Cash Bonuses

Email    |    Print    |    Bookmark

You Need to login first

   |    Friday,May 15,2020

Ultra Petroleum Corp. has filed for bankruptcy again. This is four years to the month since it last filed Chapter 11 in May 2016.

Last month, Ultra Petroleum awarded its top executives over $1.5 million in cash bonuses despite its precarious financial situation.

Through the Chapter 11 restructuring, the Company will eliminate approximately $2.0 billion in debt from its balance sheet.

The Company has secured a commitment for financing of up to $25 million from certain holders of the Company's first lien term loan. Additionally, all of the Company's existing lenders under its first lien RBL credit facility have executed commitment letters to provide exit financing in the form of a revolving credit facility with an initial borrowing base of $100 million and total commitments of $60 million.

Brad Johnson, Chief Executive Officer of Ultra commented, "After several months of liability management efforts and careful consideration of how best to navigate a challenging low commodity price environment and our debt levels, Ultra's Board of Directors determined that a voluntarily filling for Chapter 11 reorganization provides the best outcome for the entity. This financial restructuring will result in an enterprise with very little debt, good liquidity, and significant free cash flow that is underpinned by a large-scale, low-cost base of natural gas and condensate production.

"I want to thank all of our employees for their commitment to Ultra and their continued focus and tenacity demonstrated during the COVID-19 pandemic. The Company has continued to stay focused during this period delivering production results of 554 MMcfe/d in the first quarter and continuing its focus on delivering strong operating margins."

Centerview Partners LLC is acting as financial advisor for the Company, Kirkland & Ellis is acting as legal advisor, and FTI Consulting is acting as restructuring advisor.

Evercore Group, L.L.C is acting as financial advisor for the consenting term lenders and Stroock & Stroock & Lavan LLP is acting as legal advisor for the consenting term lenders.

("Ultra" or the "Company") (OTCQX: UPLC) has agreed to the terms of a comprehensive balance-sheet restructuring with key creditor constituencies, more specifically including holders of 100% of the loans under its first lien RBL credit facility, 85% of the loans under its first lien term loan, and 67% of its second lien notes (collectively, the "Supporting Creditors"). To implement the transactions, Ultra has commenced solicitation of votes to accept a prepackaged plan of reorganization and has voluntarily filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the "Bankruptcy Court").