HOUSTON, Nov. 22, 2016 /PRNewswire/ — Ultra Petroleum Corp. (OTC: UPLMQ) (“UPL”) announced today that it has entered into a Plan Support Agreement dated November 21, 2016 (the “PSA“) and a Backstop Commitment Agreement dated November 21, 2016 (the “Backstop Agreement”) with (i) holders of a substantial majority of the principal amount of its outstanding 5.750% Senior Notes due 2018 and 6.125% Senior Notes due 2024 and (ii) shareholders who own at least a majority of its outstanding common stock or the economic interests therein (collectively, the “Commitment Parties“).
As previously reported, on April 29, 2016, UPL and each of its subsidiaries (collectively, the “Ultra Entities“) filed voluntary petitions seeking in-court reorganization under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas (collectively, the “Reorganization Proceedings“). The PSA sets forth the terms and conditions pursuant to which the Ultra Entities and the Commitment Parties have agreed to seek and support a joint plan of reorganization at an aggregate plan value of $6.25 billion, $6.0 billion, or $5.5 billion, depending on commodity prices, for the Ultra Entities which will successfully complete the Reorganization Proceedings (collectively, the “Plan“). The Backstop Agreement sets forth the terms and conditions under which the Commitment Parties have agreed to fund a $580.0 million offering of rights to purchase shares of common stock in reorganized UPL in connection with the Plan (the “Rights Offering”). Under the Plan, the total enterprise value of the Ultra Entities will be $6.0 billion (the “Plan Value”); provided, that if the average closing price of the 12-month forward Henry Hub natural gas strip price during the seven (7) trading days preceding the commencement of the Rights Offering solicitation is: (i) greater than $3.65/MMBtu, the Plan Value will be $6.25 billion; or (ii) less than $3.25/MMBtu, the Plan Value will be $5.5 billion.
Among other matters, the Plan provides for a comprehensive restructuring of all allowable claims against and interests in the Ultra Entities, including the conversion of the outstanding unsecured senior notes issued by UPL to newly-issued shares of common stock in UPL, the exchange of the outstanding unsecured senior notes issued by UPL’s subsidiary Ultra Resources, Inc. (“Ultra Resources”) 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.
Mr. Michael Watford, Chairman, President and Chief Executive Officer of the Company, said, “These agreements reflect our commitment to maximizing the value of our estates for the benefit of all our stakeholders. Even before we began our in-court reorganization, we have been steadfastly dedicated to preserving significant value for our shareholders, and entering into these agreements represents the next step in pursuit of that objective.” He continued, “We are very appreciative of the cooperation we received from our stakeholders and their recognition of the substantial value represented by our assets and hard-working employees and contractors.”
The PSA, the Backstop Agreement, this news release, and certain confidential information the Commitment Parties have asked UPL to disclose will be attached as exhibits to a Current Report on Form 8-K filed by the Company with the U.S. Securities and Exchange Commission later today.
Additional information is available on the company’s website at www.ultrapetroleum.com. In addition, court filings and other documents related to the reorganization proceedings are available on a separate website administered by the company’s claims agent, Epiq Systems, at http://dm.epiq11.com/UPT.
About Ultra Petroleum
Ultra Petroleum Corp. is an independent energy company engaged in domestic natural gas and oil exploration, development and production. The company trades over-the-counter under the ticker symbol “UPLMQ”. Additional information on the company is available at www.ultrapetroleum.com.