Natural gas leader, Ultra Petroleum, may be forced to file for bankruptcy in the United States and Canada in order to protect itself from creditors if it fails to make payments or source for additional funds by the second week of March.
CNBC gives more details about a regulatory fiilng made by Ultra Petroleum last Monday. The oil company acknowledged that it may default on debts which have to be paid this March. They may also be unable to comply with other requirements, such as debt restructuring and acquiring more capital. As of February 29, the company's outstanding debt stands at $3.76 billion. It has a due worth $1.6 billion that has to be paid between March 2016 and October 2025. Another payment of $630 million has to be paid on October 2016.
The current cash reserves of the company only amounts to $26 million. The company's auditors have already stated their concerns that the current challenges may prevent the company from sustaining its operations.
Bidness says that the company's downturn is reflected on the decline of its stocks. Ultra Petroleum ended at a low of 15.45% percent at 29 cents last Monday. CEO Chairman Michael Watford has stated in a company report that the overall bottomline will show a bleak loss of $3.2 billion by end of the fourth quarter 2015. Capital expenditure will also be reduced by almost 50 percent, from $500 million in 2015 to $260 million in 2016.
CNBC attributes the company's decline to the current slump in oil prices. Fuelfix gives another reason: the company's attempts to expand its assets in Wyoming.
Fuelfix says that, Watford further elaborated that the company needs "external assistance" if it is to survive. Creditors, in particular, would have to come in to bail them out.
Michael Scialla, analyst at Stifel, Nicolaus & Company, however, does not give much reason for optimism. He says candidly, "I think it looks like bankruptcy is almost inevitable. It's been a pretty long downward slide for them."
