ULTRA PETROLEUM CORP. (OTCMKTS:UPLMQ) Files An 8-K Entry into a Material Definitive Agreement
Item1.01.
| Entry Into a Material Definitive Agreement. |
Commitment Letter
As previously disclosed, on April29, 2016, Ultra Petroleum Corp.
(the Company) and each of its subsidiaries, 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 Debtors), filed voluntary petitions for reorganization under
Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court for the Southern District of Texas (the
Bankruptcy Court). The Debtors Chapter 11 cases are being jointly
administered under the caption In re
Ultra Petroleum Corp., et
al., Case No.16-32202 (MI).
On February8, 2017, the Debtors filed with the Bankruptcy Court
the Debtors Second Amended
Joint Chapter Plan of Reorganization (the
Second Amended Plan and, as may be amended, modified or
supplemented from time to time, the Plan).
On February8, 2017, the Debtors obtained a commitment letter (the
Commitment Letter) from Barclays Bank PLC (including any
affiliates that may perform its responsibilities thereunder,
Barclays), to which, in connection with the consummation of the
proposed Plan, Barclays has agreed to provide secured and
unsecured financing in an aggregate amount of up to $2.4billion,
consisting of:
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A seven-year senior secured first lien term loan credit facility (the Term Loan Facility) in an aggregate amount of $600.0million; |
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A five-year senior secured first lien revolving credit facility (the Revolving Facility) in an aggregate amount of $400.0million with an initial borrowing base (the Borrowing Base) (which limits the aggregate amount of first lien debt under the Revolving Facility and the Term Loan Facility) of $1.0billion with scheduled semi-annual redeterminations starting on October1, 2017; and |
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Senior unsecured bridge loans under senior unsecured bridge facilities (together with the Revolving Facility and the Term Loan Facility, the Credit Facilities) in an aggregate amount of $1.4billion, consisting of (i)a five-year bridge facility in an aggregate principal amount of $700.0million, less the aggregate principal amount of privately placed five-year senior unsecured notes of the Company, if any, issued on or prior to the closing date of the Credit Facilities (the Closing Date) and (ii)an eight-year bridge facility in an aggregate principal amount of $700.0million, less the aggregate principal amount of privately placed eight-year senior unsecured notes of the Company, if any, issued on or prior to the Closing Date. |
The Revolving Facility is anticipated to, among other things:
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have capacity for the Debtors to increase the commitments subject to certain conditions; |
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have $100.0million of the commitments available for the issuance of letters of credit; and |
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require the Company to maintain (A)a maximum total net debt to EBITDAX ratio of (i) 4.25 to 1.0 as of the end of the first full fiscal quarter after the closing date and each subsequent fiscal quarter of 2017 and (ii) 4.0 to 1.0 as of the end of each fiscal quarter thereafter, (B)a minimum current ratio of 1.0 to 1.0 and (C)a minimum interest coverage ratio of 2.5 to 1.0. |
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Based on the indicative pricing levels provided to the Company,
the blended interest rate of the Credit Facilities on the
effective date of the Plan (the Blended Rate) is expected to be
approximately 5.10% per annum. The actual Blended Rate on the
effective date of the Plan will depend on factors including,
without limitation, the size of each tranche of the Credit
Facilities and the results of the syndication process of such
Credit Facilities, and may therefore be higher or lower than
5.10% per annum.
The Term Loan Facility is anticipated to, among other things,
have capacity for the Debtors to increase the commitments, with
such increase in commitments subject to certain conditions.
The Revolving Facility and Term Loan Facility will include
customary affirmative and negative covenants, including, among
other things, as to compliance with laws, delivery of quarterly
and annual financial statements and oil and gas engineering
reports, maintenance and operation of properties (including oil
and gas properties), maintenance of a lien on, and delivery of
title information with respect to, 85% of the Debtors proved oil
and gas reserves, restrictions on the incurrence of liens,
indebtedness, asset dispositions, fundamental changes, restricted
payments and other customary covenants.
The Revolving Facility and Term Loan Facility will include events
of default relating to customary matters, including, among other
things, nonpayment of principal, interest or other amounts;
violation of covenants; incorrectness of representations and
warranties in any material respect; cross-payment default and
cross acceleration with respect to material indebtedness;
bankruptcy; material judgments; and certain ERISA events. Many
events of default are subject to customary notice and cure
periods.
The commitments of Barclays to provide the Credit Facilities are
subject to certain conditions set forth in the Commitment Letter,
including but not limited to the Plan Support Parties (as defined
below) reasonable satisfaction with the approval by the
Bankruptcy Court of all actions to be taken, undertakings to be
made and obligations to be incurred by the Debtors in connection
with the Credit Facilities.
The Commitment Letter will terminate upon the occurrence of
certain events described therein and the outside termination date
for the Commitment Letter is May9, 2017.
On February8, 2017, the Debtors filed a motion with the
Bankruptcy Court seeking authorization to enter into and perform
under the Commitment Letter.
The foregoing description of the Commitment Letter is qualified
in its entirety by reference to the Commitment Letter attached
hereto as Exhibit 10.1 and incorporated herein by reference.
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| Section9. | Financial Statements and Exhibits |
| Item9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits |
|
Exhibit No. |
Description |
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| 10.1 | Commitment Letter dated as of February8, 2017. |
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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 up +0.02 at 7.90 with 16,184,089 shares trading hands.
