Ultra Petroleum enters PSA with shareholders, senior noteholders

Ultra Petroleum Corp. (OTC: UPLMQ) (UPL) 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 US Bankruptcy Code in the US 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. 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.


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