Ultra Petroleum Corp (OTCMKTS:UPLMQ) Hits The OTC

Ultra Petroleum Corp (OTCMKTS:UPLMQ) is just the latest energy company to declare bankruptcy and hit the OTC markets. Smart penny stock investors know that a bankruptcy filing is not necessarily the end of a trade-able opportunity. Just recently, Sun Edison Inc (OTCMKTS:SUNEQ) and Peabody Energy Inc (OTCMKTS:BTUUQ) provided great trading opportunities for dip buyers. Can UPLMQ deliver as well?The Texas-based company, which has operations in Wyoming, Utah and Pennsylvania, listed assets in the range of $1 billion to $10 billion, and liabilities of $1 billion to $10 billion, according to a court filing. Ultra's total debt stood at about $3.9 billion as of March 31, according to its quarterly filing. The company had 167 employees at the end of December. The company entered into a waiver period extending until April 30 over $100 million in payments that were due March 1. Ultra also deferred making a $26 million interest payment due April 1, beginning a 30 day-grace period.The filing was done quietly in Houston and marks the largest energy company to file in that court after Energy XXI Ltd (OTCMKTS:EXXIQ) did so earlier. According to UPLMQ's latest 10-Q, the company said:

because low crude oil and natural gas prices during 2015 had a significant adverse impact on our business and our financial condition, substantial doubt exists that we will be able to continue as a going concern. Although crude oil and natural gas prices have improved somewhat in recent weeks, product prices continue to be historically low, our financial condition continues to be distressed, and substantial doubt continues to exist that we will be able to continue as a going concern. Our ability to continue as a going concern is dependent on many factors, including our ability to comply with the obligations in our existing debt agreements, to obtain waivers or other relief if we are unable to comply, and/or to be able to repay or replace our indebtedness as it matures. We can offer no assurance that we will be able to obtain waivers or other relief, and it is unlikely we will be able to comply with all of the obligations and covenants in our debt agreements. In addition, we have substantial unpaid principal maturities and interest payments that are past due, and we have substantial additional principal maturities and interest payments coming due in the near future. We do not have sufficient liquidity to pay our unpaid and near-term principal maturities and interest payments without raising additional capital. We do not have sufficient liquidity to pay our indebtedness if it is accelerated and becomes immediately due and payable without raising additional capital. Additional capital may be available only on extremely onerous terms if it is available at all. Due to our current financial constraints, including the likelihood of the occurrence of events of default under our debt agreements, there is a substantial risk that it may be necessary for us to seek protection from our creditors under Chapter 11 of the U.S. Bankruptcy Code (“Chapter 11”) or the Canadian Bankruptcy and Insolvency Act, or an involuntary petition for bankruptcy may be filed against us in the U.S. or in Canada.

Currently, UPLMQ is the most actively traded name on the OTC markets. Trading at $.20 per share is quite a fall from grace for a stock that traded at $100 at one point before the financial crisis. No doubt long-term shareholders have been left decimated and in the end will be wiped out when the bankruptcy process is over. The good news is that we can see shares bouncing back up towards $.50 on any positive news or hope on the back of short covering and momentum players trading the stock. We will be updating Insider Financial as soon as we know more. For continuing coverage on UPLMQ, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in UPLMQ and have not been compensated for this article.