ULTRA PETROLEUM CORP. (OTCMKTS:UPLMQ) Files An 8-K Bankruptcy or Receivership
Item1.03
| Bankruptcy or Receivership. |
As previously disclosed, on April29, 2016, Ultra Petroleum Corp.
(the Company) and each of its subsidiaries, including Keystone
Gas Gathering, LLC, Ultra Resources, Inc., Ultra Wyoming, Inc.,
Ultra Wyoming LGS, LLC, UP Energy Corporation, UPL Pinedale, LLC
and UPL Three Rivers Holdings, LLC (collectively, with the
Company, the Ultra Entities or the Debtors), filed voluntary
petitions for reorganization under chapter 11 of title 11
(Chapter 11) of the United States Bankruptcy Code in the Houston
Division of the United States Bankruptcy Court for the Southern
District of Texas (the Bankruptcy Court). The Ultra Entities
Chapter 11 cases are being jointly administered under the caption
In re Ultra Petroleum Corp., et al, Case No.16-32202 (MI).
On March10, 2017,
the Debtors filed the proposed Debtors Second Amended Joint
Chapter 11 Plan of Reorganization (as amended, modified or
supplemented from time to time, the Plan).
On March14, 2017,
the Bankruptcy Court entered an order (the Confirmation Order)
confirming the Plan as modified by the Confirmation Order.
The Debtors expect
that the effective date of the Plan will occur as soon as all
conditions precedent to the Plan have been satisfied (the
Effective Date). Although the Debtors are targeting occurrence of
the Effective Date within the next 30 days, the Debtors can make
no assurances as to when, or ultimately if, the Plan will become
effective. It is also possible that technical amendments could be
made to the Plan prior to the Effective Date.
The following is a
summary of the material terms of the Plan. This summary
highlights only certain substantive provisions of the Plan and is
not intended to be a complete description of the Plan. This
summary is qualified in its entirety by reference to the full
text of the Plan and the Confirmation Order, which are attached
hereto as Exhibits 2.1 and 99.1, respectively, and incorporated
by reference herein.
The Plan
of Reorganization and Treatment of Claims and
Interests
The Plan
contemplates the following treatment of claims against and
interests in the Debtors:
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holders of claims under the Companys senior notes will receive (i)their proportionate share of the new common stock of the Company (New Equity), subject to dilution on account of the stock incentive plan (the Incentive Plan), and (ii)the right to participate in a rights offering for New Equity (the Noteholder Rights Offering), exclusive of New Equity issued on account of the commitment premium (the Commitment Premium) to the backstop commitment agreement between the Company and certain commitment parties party thereto (the Backstop Commitment Parties) and subject to dilution on account of the Incentive Plan; |
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holders of the Companys existing shares of common stock will receive (i)their proportionate share of New Equity, subject to dilution on account of the Incentive Plan and (ii)the right to participate in a rights offering for New Equity (the Equityholder Rights Offering and together with the Noteholder Rights Offering, the Rights Offerings), exclusive of New Equity issued on account of the Commitment Premium and subject to dilution on account of the Incentive Plan; |
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holders of claims arising under Ultra Resources, Inc. (OpCo) senior unsecured notes (the OpCo Notes) and the credit agreement among OpCo, as borrower, Wilmington Savings Fund Society, FSB, as successor administrative agent, and the lenders party thereto (together with the OpCo Notes, the OpCo Funded Debt) will receive payment in full, in cash of allowed claims; |
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holders of general unsecured claims will receive payment in full, in cash, or receive such other treatment as determined by the Bankruptcy Court to ensure that such holders legal, contractual and equitable rights are not altered, except to the extent that a holder of a general unsecured claim agrees to a different treatment in full satisfaction of such claim; |
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holders of certain claims (other than secured tax claims) that are secured by a lien or collateral will receive either reinstatement of the claim or payment in full, in cash; |
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holders of certain claims (other than secured tax claims and administrative claims) entitled to priority in right of payment will receive payment in full, in cash; |
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holders of intercompany claims will have their interests either reinstated, cancelled or treated in a manner determined by the Ultra Entities; |
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holders of intercompany interests will have their interests either reinstated or cancelled; and |
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holders of the Companys equity interests, other than the existing shares of common stock, will not receive or retain any distribution and such interests will be cancelled. |
Unless otherwise
specified, the treatment set forth in the Plan and the
Confirmation Order will be in full satisfaction of all claims
against and interests in the Ultra Entities, which will be
discharged on the Effective Date. All of the Ultra Entities
existing funded debt and equity (except for certain intercompany
interests) will be extinguished by the Plan.
As determined by
the Bankruptcy Court, Settlement Plan Value (as defined in the
Plan) under the Plan is $6.0billion.
Capital
Structure
As of the
Effective Date, the Company will issue New Equity to the holders
of claims against and interests in the Company, and the Companys
shares of common stock outstanding prior to the Effective Date
will be cancelled, in each case as provided in the Plan. As of
February9, 2017, there were 153,418,041 shares of the Companys
common stock outstanding. Under the Plan, the Companys new
organizational documents will become effective on the Effective
Date. The Companys new organizational documents will authorize
the Company to issue shares of New Equity to the Plan. In
addition, on the Effective Date, the Company will enter into a
registration rights agreement with certain of the Companys
securityholders and the Backstop Commitment Parties.
Exit
Financing
The Plan is
expected to be funded by the following exit financings, subject
to certain customary conditions:
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$1,400million in the aggregate principal amount of unsecured senior notes issued by OpCo (the New Notes); however, to the extent that OpCo is unable to issue the New Notes yielding at least $1,400million in gross cash proceeds, OpCo will obtain a senior unsecured bridge loan under the senior unsecured bridge facilities in the aggregate principal amount of $1,400million, less the aggregate principal amount of the issued New Notes; |
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$600.0million in aggregate principal amount under the new senior secured first lien term loan credit facility, with OpCo serving as the borrower; |
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up to $400.0million new senior secured first lien revolving credit facility with an initial borrowing base of $1.0billion, subject to certain conditions, with OpCo serving as the borrower; and |
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$580.0million in proceeds from the Rights Offerings, backstopped by the Backstop Commitment Parties. |
Incentive
Plan
Effective as of
the Effective Date, the Companys board of directors (the Board)
will adopt the Incentive Plan, with a share reserve equal to 7.5%
of the fully-diluted, fully-distributed shares of the Company as
of the Effective Date. The Incentive Plan provides for the grant
of equity-based awards to the Companys key employees and
non-employee Board directors, including the grant of restricted
stock units representing 40% of the total share reserve to be
made as of the Effective Date.
Settlement, Releases
and Exculpations
The Plan
incorporates an integrated compromise and settlement of claims to
achieve a beneficial and efficient resolution of the Chapter 11
cases. Unless otherwise specified, the settlement, distributions,
and other benefits provided under the Plan, including the
releases and exculpation provisions included therein, are in full
satisfaction of all claims and causes of action that could be
asserted.
The Plan provides
releases and exculpations for the benefit of the Ultra Entities,
certain of the Ultra Entities claimholders, other parties in
interest and various parties related thereto, each in their
capacity as such, from various claims and causes of action, as
further set forth in Article VIII of the Plan.
Certain
Information Regarding Assets and Liabilities of the
Company
Information
regarding the assets and liabilities of the Company as of the
most recent practicable date is hereby incorporated by reference
to the Companys Annual Report on Form 10-K for the period ended
December31, 2016, filed with the Securities and Exchange
Commission on February22, 2017.
| Item9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
|
Exhibit No. |
Description |
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| 2.1 |
Debtors Second Amended Joint Chapter 11 Plan of Reorganization (incorporated by reference to Exhibit A of the Confirmation Order attached as Exhibit 99.1 hereto) |
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| 99.1 |
Order Confirming Debtors Second Amended Joint Chapter 11 Plan of Reorganization |
About ULTRA PETROLEUM CORP. (OTCMKTS:UPLMQ)
Ultra Petroleum Corp. is an independent oil and gas company. The Company is engaged in the development, production, operation, exploration and acquisition of oil and natural gas properties. The Company operates in natural gas and oil exploration and development industry, with geographical segment, the United States. It owns oil and natural gas leases in Wyoming, Utah and Pennsylvania. In Colorado, the Company owns oil and natural gas leases, as well as fee oil and gas rights. The Company focuses on developing its natural gas reserves in the Green River Basin of southwest Wyoming, the Pinedale and Jonah fields; its oil reserves in the Uinta Basin in Utah, and its natural gas reserves in the Appalachian Basin of Pennsylvania. The Company owns interests in approximately 104,000 gross (approximately 68,000 net) acres in Wyoming covering approximately 190 square miles. ULTRA PETROLEUM CORP. (OTCMKTS:UPLMQ) Recent Trading Information
ULTRA PETROLEUM CORP. (OTCMKTS:UPLMQ) closed its last trading session down -0.15 at 6.54 with 16,184,089 shares trading hands.