Lenders to a subsidiary of Ultra Petroleum Corp entered into a waiver and amendment agreements with more than $100 million in payments that were due on March 1. The waiver and the agreement provide the oil and gas exploration company an opportunity to continue the discussion of restructuring all of its debt burden with its creditors.
Reuters reported that the agreements made will cover potential defaults under the subsidiaries' other debt deals through April 30, 2016. The annual report of Ultra Petroleum suggests that it has an interest payment of approximately $26 million due on April 1, $62 million maturity payment due March 1 under one series of senior notes, and $40 million interest payment due the same day under the senior notes.
According to Yahoo Finance, Ultra Petroleum Corp had a balance of cash on hand in excess of $266 million as of February 29, 2016. This provides substantial liquidity to fund the company's continuing operations. However, Ultra Petroleum's spokesperson refused to give any comment.
The company said that the expected breach of its credit agreement is related to a minimum ratio that it is required to maintain related to the total value of its oil and gas properties compared to its debt.
Ultra Petroleum said it has already engaged legal and financial advisers in an attempt to refinance its depth through private transactions. The company will then need to file for bankruptcy if such efforts prove unsuccessful, says Law 360. On Monday, the company warned in a regulatory filing that its auditors have raised concerns about its ability to stay in the business and will seek bankruptcy protection in Canada and in the United States.
Ultra Petroleum also recently loaned out $266 million, the remainder of its revolving credit facility. The company expects to be 'in default' under the agreement on March 15 when it delivers financial statements to lenders of its credit facility.
