UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): February 14, 2020
ULTRA PETROLEUM CORP.
(Exact Name of Registrant as Specified in its Charter)
Yukon, Canada | 001-33614 | N/A | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
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116 Inverness Drive East, Suite 400 Englewood, Colorado |
80112 | |||
(Address of principal executive offices) | (Zip code) |
(303) 708-9740
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12) |
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: None.
Title of Each Class |
Trading Symbol(s) |
Name of Exchange on Which Registered |
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Common Shares, without par value | UPLC | OTCQX |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. |
Entry into a Material Definitive Agreement. |
As previously disclosed, on April 12, 2017, Ultra Resources, Inc. (Ultra Resources), the borrower and a subsidiary of Ultra Petroleum Corp. (the Company), entered into that certain Credit Agreement (as amended through December 21, 2018, the Credit Agreement), with the Company and UP Energy Corporation, as parent guarantors, Bank of Montreal, as administrative agent (the Agent), and the other lenders party thereto (collectively, the Lenders), providing for the Companys revolving credit facility (the Credit Facility).
On February 14, 2020, Ultra Resources entered into a Sixth Amendment to Credit Agreement (the Sixth Amendment) with the RBL Agent and the RBL Lenders party thereto. Pursuant to the Sixth Amendment and the spring borrowing base redetermination, which is effective as of April 1, 2020, the Borrowing Base (as defined in the Credit Agreement) was reduced to $1.075 billion, with $100 million attributed to RBL commitments under the Credit Agreement. In accordance with the previously disclosed Fifth Amendment to Credit Agreement, the commitment for the Credit Facility automatically reduces from $200 million to $120 million on February 29, 2020, which will then further reduce to $100 million on April 1, 2020, pursuant to the Sixth Amendment.
The Sixth Amendment also provides for (i) the establishment of quarterly borrowing base redeterminations, with the next redetermination occurring on July 1, 2020, and on each October 1, January 1 and April 1 thereafter and (ii) a reduction of the excess cash threshold, a part of the anti-cash hoarding provisions, from $25 million to $15 million at all times borrowings are outstanding under the Credit Agreement.
The foregoing description of the Sixth Amendment does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Sixth Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference in this Item 1.01.
Item 2.03. |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The relevant information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 2.03.
Item 7.01. |
Regulation FD Disclosure. |
On February 18, 2020, the Company issued a press release announcing, among other things, the entry into the Sixth Amendment. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference into this Item 7.01.
The information contained or incorporated in this Item 7.01 shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Companys filings under the Securities Act of 1933, as amended (the Securities Act), or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.
Item 9.01. |
Financial Statements and Exhibits. |
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
February 18, 2020
ULTRA PETROLEUM CORP. |
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By: |
/s/ Kason D. Kerr |
|
Name: |
Kason D. Kerr |
|
Title: |
Vice President, General Counsel and Corporate Secretary |
Exhibit 10.1
Execution Version
SIXTH AMENDMENT TO CREDIT AGREEMENT
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (this Amendment) is made as of February 14, 2020, by and among ULTRA RESOURCES, INC., a Delaware corporation (the Borrower), BANK OF MONTREAL, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the Administrative Agent), and each of the Lenders party hereto.
W I T N E S S E T H:
WHEREAS, the Borrower, the Administrative Agent and the Lenders entered into that certain Credit Agreement, dated as of April 12, 2017, among Ultra Petroleum Corp., a Yukon corporation, UP Energy Corporation, a Delaware corporation, the Borrower, the Administrative Agent, the Lenders and other parties from time to time party thereto (as amended by that certain First Amendment to Credit Agreement, dated as of June 6, 2017, that certain Second Amendment to Credit Agreement, dated as of April 19, 2018, that certain Third Amendment to Credit Agreement, dated as of December 21, 2018, that certain Fourth Amendment to Credit Agreement dated as of February 14, 2019, that certain Fifth Amendment to Credit Agreement dated as of September 16, 2019 and as further amended, amended and restated, supplemented or otherwise modified from time to time, the Credit Agreement), for the purpose and consideration therein expressed, whereby the Lenders became obligated to make loans to the Borrower as therein provided;
WHEREAS, the Borrower has requested, and the Administrative Agent and the Lenders constituting the Majority Lenders have agreed, as set forth herein, to amend certain provisions of the Credit Agreement;
WHEREAS, the Administrative Agent and the Lenders constituting the Decrease and Maintenance Lenders have agreed, as set forth herein, to decrease the Borrowing Base;
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and in the Credit Agreement, in consideration of the loans which may hereafter be made by Lenders to the Borrower, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS AND REFERENCES
Section 1.1. Defined Terms. Unless the context otherwise requires or unless otherwise expressly defined herein, the terms defined in the Credit Agreement shall have the same meanings whenever used in this Amendment. Unless otherwise specified, all section references in this Amendment refer to sections of the Credit Agreement.
ARTICLE II.
AMENDMENTS TO CREDIT AGREEMENT
Section 2.1. Amendments to Credit Agreement.
(a) Defined Terms. The following defined terms in Section 1.01 are hereby amended and restated in their entirety to read as follows:
Excess Cash Threshold means $15,000,000.
Excluded Cash means (a) any cash or cash equivalents of the Credit Parties in an Excluded Account (other than an account that is an Excluded Account pursuant to clause (a) of the definition thereof), (b) Cash Collateral held by the Administrative Agent pursuant to this Agreement or the other Loan Documents, (c) cash of the Credit Parties constituting purchase price deposits held in escrow by an unaffiliated third party pursuant to a binding and enforceable purchase and sale agreement with an unaffiliated third party containing customary provisions regarding the payment and refunding of such deposits, (d) any cash or Cash Equivalents set aside and for which any Credit Party has issued checks or has initiated wires or ACH transfers (or will issue checks or initiate wires or ACH transfers within five (5) business days) to make a Restricted Payment permitted pursuant to Section 9.04(a), and (e) any cash or Cash Equivalents set aside and for which any Credit Party has issued checks or has initiated wires or ACH transfers (or will issue checks or initiate wires or ACH transfers within five (5) business days) to make payments in respect of accounts payable incurred in the ordinary course of business for services already rendered.
Reserve Report means the Initial Reserve Report and each subsequent report, in form and substance reasonably satisfactory to the Administrative Agent, setting forth, as of each of the following dates:
April 1, 2020 and each April 1 thereafter
July 1, 2020 and each July 1 thereafter
October 1, 2020 and each October 1 thereafter
January 1, 2021 and each January 1 thereafter
(or such other date in the event of an Interim Redetermination), the oil and gas reserves attributable to the Oil and Gas Properties of the Borrower and the other Credit Parties, together with a projection of the rate of production and future net income, taxes, operating expenses and capital expenditures with respect thereto as of such date, based upon the pricing assumptions consistent with the Administrative Agents lending requirements at such time.
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(b) Scheduled and Interim Redeterminations. Section 2.07(b) is hereby amended to remove the text:
July 1, 2017 and each July 1 thereafter
January 1, 2018 and each January 1 thereafter
and to replace it with the text:
April 1, 2020 and each April 1 thereafter
July 1, 2020 and each July 1 thereafter
October 1, 2020 and each October 1 thereafter
January 1, 2021 and each January 1 thereafter.
(c) Scheduled and Interim Redetermination Procedure. Section 2.07(c)(ii)(A) is hereby amended to delete the phrase each March 15 and September 15 and insert in lieu thereof each March 15, June 15, September 15 and December 15.
(d) Effectiveness of Redetermined Borrowing Base. Section 2.07(d)(i) is hereby amended to delete the phrase each April 1 or October 1 and insert in lieu thereof January 1, April 1, July 1 and October 1.
(e) Section 8.12Reserve Reports. Section 8.12(a) is hereby amended to delete the table contained in such section and insert in lieu thereof:
As-of Date |
Delivery Date |
|
April 1, 2020 and each April 1 thereafter | the next following June 1 | |
July 1, 2020 and each July 1 thereafter | the next following September 1 | |
October 1, 2020 and each October 1 thereafter | the next following December 1 | |
January 1, 2021 and each January 1 thereafter. | the next following March 1 |
(f) Section 8.12Reserve Reports. Section 8.12(b) is hereby amended and restated in its entirety to read as follows:
The Reserve Reports as of January 1 of each year shall be prepared by one or more Approved Petroleum Engineers, and the Reserve Reports as of April 1, July 1 and October 1 of each year shall be prepared either by Approved Petroleum Engineers or, at the Borrowers option, by the internal reserve engineering staff of the Borrower in accordance with the procedures used in the immediately preceding Reserve Report.
Section 2.2. Reduction in Total Commitment. Pursuant to Section 2.06(b), the Borrower has notified the Lenders of its desire to reduce the Total Commitment as of April 1, 2020 with each Lender having a Commitment set forth opposite the name of such Lender on Annex I attached hereto.
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ARTICLE III.
BORROWING BASE
Section 3.1. Reduction of Borrowing Base. Pursuant to Section 2.07, the Administrative Agent and the Lenders constituting the Decrease and Maintenance Lenders hereby agree that, for the period from and including April 1, 2020 until the next Redetermination Date (which, for the avoidance of doubt, shall be July 1, 2020), the Borrowing Base shall be, and hereby is, reduced to $1,075,000,000. The parties hereto agree that this reduction of the Borrowing Base constitutes the Scheduled Redetermination for April 1, 2020 and such redetermination shall be deemed to have taken place in accordance with the procedures set forth in the Credit Agreement. This Amendment (a) does not limit redeterminations or further adjustments to the Borrowing Base pursuant to the Credit Agreement and (b) shall constitute the New Borrowing Base Notice in respect of such Scheduled Redetermination in accordance with Section 2.07(d) thereof. As of April 1, 2020, the Total Commitment under the Credit Agreement shall be $100,000,000.
ARTICLE IV.
CONDITIONS OF EFFECTIVENESS
Section 4.1. Effective Date. This Amendment shall become effective as of the date written above (such date, the Sixth Amendment Effective Date) subject to the satisfaction of each of the conditions set forth in this Section 4.1:
(a) the Administrative Agent shall have received counterparts of this Amendment duly executed and delivered by the Borrower and (i) with respect to Section 2.1 of this Amendment, the Lenders constituting the Majority Lenders and (ii) with respect to Section 3.1 of this Amendment, the Lenders constituting the Decrease and Maintenance Lenders, in form, substance and date satisfactory to the Administrative Agent;
(b) after giving effect to this Amendment, no Default or Event of Default shall exist under the Credit Agreement or under any other Loan Document;
(c) each representation and warranty of the Borrower and the Guarantors set forth in the Credit Agreement and in the other Loan Documents shall be true and correct in all material respects on and as of the Sixth Amendment Effective Date, except (i) to the extent any such representation and warranty is expressly limited to an earlier date, in which case, on and as of the Sixth Amendment Effective Date, such representation and warranty shall continue to be true and correct in all material respects as of such specified earlier date, and (ii) to the extent that any such representation and warranty is expressly qualified by materiality or by reference to Material Adverse Effect, such representation and warranty (as so qualified) shall be true and correct in all respects on and as of the Sixth Amendment Effective Date (or, to the extent any such representation and warranty is expressly limited to an earlier date, such representation and warranty (as so qualified) shall continue to be true and correct in all respects as of such specified earlier date); and
(d) the Borrower shall have paid, to the extent invoiced one (1) Business Day prior to the Sixth Amendment Effective Date, all fees and other amounts due and payable on or prior to the Sixth Amendment Effective Date, including reasonable and documented fees and expenses of Simpson Thacher & Bartlett LLP and all reasonable out-of-pocket expenses required to be reimbursed or paid by the Borrower under the Credit Agreement.
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ARTICLE V.
MISCELLANEOUS
Section 5.1. Ratification of Agreements. The Loan Documents, as they may be affected by this Amendment, are hereby ratified and confirmed in all respects. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lenders under the Credit Agreement, the Notes, or any other Loan Document nor constitute a waiver, amendment or other modification of any provision of the Credit Agreement, the Notes or any other Loan Document. The terms of this Amendment do not and shall not constitute a novation and, except as expressly amended hereby, each of the provisions of the Credit Agreement and the other Loan Documents shall remain in full force and effect.
Section 5.2. Loan Documents. This Amendment is a Loan Document, and all provisions in the Credit Agreement (as they may be affected by this Amendment) pertaining to Loan Documents apply thereto.
Section 5.3. Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.
Section 5.4. Counterparts; Fax. This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or in electronic (i.e., pdf or tif) format shall be effective as delivery of a manually executed counterpart of this Amendment.
THIS AMENDMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES HERETO.
[The remainder of this page has been intentionally left blank.]
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IN WITNESS WHEREOF, this Amendment is executed as of the date first above written.
BANK OF MONTREAL, as Administrative Agent | ||
By: | /s/ James V. Ducote | |
Name: James V. Ducote | ||
Title: Managing Director |
[Ultra Resources - Signature Page to Sixth Amendment to Credit Agreement]
BMO HARRIS BANK N.A., as a Lender and as Issuing Bank | ||
By: | /s/ James V. Ducote | |
Name: James V. Ducote | ||
Title: Managing Director |
[Ultra Resources - Signature Page to Sixth Amendment to Credit Agreement]
GOLDMAN SACHS BANK USA, as a Lender | ||
By: | /s/ Jamie Minieri | |
Name: Jamie Minieri | ||
Title: Authorized Signatory |
[Ultra Resources - Signature Page to Sixth Amendment to Credit Agreement]
BARCLAYS BANK PLC, as a Lender | ||
By: | /s/ Sydney G. Dennis | |
Name: Sydney G. Dennis | ||
Title: Director |
[Ultra Resources - Signature Page to Sixth Amendment to Credit Agreement]
HANCOCK WHITNEY BANK, as a Lender | ||
By: | /s/ Eric. K. Sander | |
Name: Eric K. Sander | ||
Title: Vice President |
[Ultra Resources - Signature Page to Sixth Amendment to Credit Agreement]
FIFTH THIRD BANK, as a Lender | ||
By: | /s/ David R. Garcia | |
Name: David R. Garcia | ||
Title: Vice President |
[Ultra Resources - Signature Page to Sixth Amendment to Credit Agreement]
CIT BANK, N.A., as a Lender | ||
By: | /s/ John Feeley | |
Name: John Feeley | ||
Title: Director |
[Ultra Resources - Signature Page to Sixth Amendment to Credit Agreement]
Agreed and acknowledged:
ULTRA RESOURCES, INC., as Borrower |
||
By: | /s/ David W. Honeyfield | |
Name: David W. Honeyfield | ||
Title: Senior Vice President and Chief Financial Officer |
[Ultra Resources - Signature Page to Sixth Amendment to Credit Agreement]
Commitments
Lender |
Commitment | |||
BMO Harris Bank N.A. |
$ | 26,117,647.06 | ||
Barclays Bank PLC |
$ | 25,647,058.82 | ||
Goldman Sachs Bank USA |
$ | 15,294,117.65 | ||
Capital One National Association |
$ | 14,117,647.06 | ||
Whitney Bank |
$ | 7,058,823.53 | ||
Fifth Third Bank |
$ | 5,882,352.94 | ||
CIT Bank, N.A. |
$ | 5,882,352.94 | ||
|
|
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Total |
$ | 100,000,000 | ||
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Exhibit 99.1
Ultra Petroleum Corp. |
NEWS RELEASE
FOR IMMEDIATE RELEASE
Ultra Petroleum Corp. Announces Spring Borrowing Base Redetermination and Amendment to
Credit Agreement, Fourth Quarter 2019 Production Results, and Confirms 2020 Production and
Capital Guidance
Englewood, Colorado February 18, 2020 Ultra Petroleum Corp. (Ultra or the Company) (OTCQX: UPLC) announces its borrowing base redetermination, fourth quarter 2019 production, and guidance for production and capital in 2020.
Sixth Amendment to Credit Facility and April 1, 2020 Borrowing Base Determination
On February 14, 2020, Ultra Resources, Inc. a wholly owned subsidiary of Ultra entered into the Sixth Amendment to Credit Agreement (the Sixth Amendment). Pursuant to the Sixth Amendment and the spring borrowing base redetermination, which will take effect April 1, 2020, the Borrowing Base (as defined in the Credit Agreement) will be reduced to $1.075 billion, with $100 million commitment attributed to the Credit Agreement. In accordance with the previously disclosed Fifth Amendment to Credit Agreement, the commitment amount for the Credit Agreement is scheduled to automatically reduce to $120 million on February 29, 2020, from the current $200 million commitment. The adjustments to the commitment amount on February 29, 2020, and April 1, 2020, coincide with the Companys anticipated reduction of the outstanding borrowings under the Credit Agreement.
The additional changes effected by the Sixth Amendment provide for (i) the establishment of a quarterly borrowing base redetermination, with the next redetermination occurring on July 1, 2020, and on each October 1, January 1 and April 1 thereafter and (ii) a downward revision of the anti-cash hoarding amount from $25 million to $15 million at all times borrowings are outstanding under the Credit Agreement.
The results of the spring 2020 borrowing base review process and the commitment level provided for in this amendment affirms our decision to suspend drilling and focus on free cash flow generation and debt repayment in 2020. This outcome further highlights the unique nature of our low-decline asset, Ultras low-cost operations and a predictable operating free cash flow of approximately $55 million for the fourth quarter, said Brad Johnson, President and Chief Executive Officer of Ultra.
Fourth Quarter 2019 Production
In the fourth quarter of 2019 the Company produced 55.4 Bcfe, an average rate for the quarter of 602 MMcfe per day. Natural gas production was 53.1 Bcf and oil production was 378,000 Bbls for the fourth quarter. Full-year 2019 production was 240.2 Bcfe.
Ultra Petroleum Corp. |
Page 1 of 2 |
2020 Production and Capital Guidance
For 2020, the Companys capital investment program is expected to be approximately $10 - $20 million, reflecting Ultras decision to suspend drilling and focus on free cash flow generation. Additionally, the Company is confirming its 2020 production guidance of 182 to 192 Bcfe.
About Ultra Petroleum
Ultra Petroleum Corp. is an independent energy company engaged in domestic natural gas and oil exploration, development and production. The Company is listed on OTCQX and trades under the ticker symbol UPLC.
Additional information on the Company is available at www.ultrapetroleum.com. In addition, our filings with the Securities and Exchange Commission (SEC) are available by written request to Ultra Petroleum Corp. at 116 Inverness Drive East, Suite 400, Englewood, CO 80112 (Attention: Investor Relations) or on our website (www.ultrapetroleum.com) or from the SEC on their website at www.sec.gov or by telephone request at 1-800-SEC-0330.
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any statement, including any opinions, forecasts, projections or other statements, other than statements of historical fact, are or may be forward-looking statements. Although the Company believes the expectations reflected in any forward-looking statements herein are reasonable, we can give no assurance that such expectations will prove to have been correct and actual results may differ materially from those projected or reflected in such statements. There are numerous uncertainties inherent in estimating proved reserves, including projecting future rates of production and timing of development. In addition, certain risks and uncertainties inherent in our business as well as risks and uncertainties related to our operational and financial results are set forth in our filings with the SEC, particularly in the section entitled Risk Factors included in our Annual Report on Form 10-K for the most recent fiscal year, our most recent Quarterly Reports on Form 10-Q, and from time to time in other filings made by the Company with the SEC. Some of these risks and uncertainties include, but are not limited to, the Companys ability to decrease its leverage or fixed costs, reductions in the Companys borrowing base under its Credit Facility, increased competition, the timing and extent of changes in prices for oil and gas, particularly in the areas where we own properties, conduct operations, and market our production, as well as the timing and extent of our success in discovering, developing, producing and estimating oil and gas reserves, our ability to successfully monetize the properties we are marketing, weather and government regulation, and the availability of oil field services, personnel and equipment.
For further information contact:
Investor Relations
303-708-9740, ext. 9898
Email: IR@ultrapetroleum.com
Ultra Petroleum Corp. |
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