Ultra Petroleum announced its entry into a plan support agreement (PSA) and backstop commitment 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”).
The PSA sets forth the terms and conditions pursuant to which the Ultra Petroleum entities and 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 Petroleum entities. The backstop agreement sets forth the terms and conditions under which the commitment parties have agreed to fund a $580 million offering of rights to purchase shares of common stock in the reorganized company in connection with the Plan.
The Plan provides for (1) a comprehensive restructuring of all allowable claims against and interests in the Ultra Petroleum entities, including conversion of the outstanding unsecured senior notes issued by the Company to newly-issued shares of common stock, (2) exchange of the outstanding unsecured senior notes issued by Ultra Petroleum subsidiary Ultra Resources for new unsecured notes issued by Ultra Resources and (3) cash and the payment in full of all other allowed claims against the Ultra Petroleum entities in cash.
Michael Watford, Company chairman, president and C.E.O., states, “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.”
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