Ultra Petroleum Corp (OTCMKTS:UPLMQ) Delivers For Shareholders

Shareholders of bankrupt oil and gas producer Ultra Petroleum Corp (OTCMKTS:UPLMQ) got some welcome news last week. Each holder of Ultra Petroleum common stock will receive a pro rata share of 41% of the equity in Ultra Petroleum after the reorganization is consummated and a pro rata share of rights to participate in the Rights Offering for 5.4% of the equity in Ultra Petroleum. This recovery marks a major victory for shareholders that bet on Ultra emerging from bankruptcy. Shares are now up by over 4400% off the lows of $.16 seen earlier this year.We've been touting Ultra Petroleum ever since the company hit the OTC. We said back in August that the Ad Hoc Equity Committee was represented by Attorney Edward Weisfelner from Brown Rudnick LLP in New York. The committee members owned over 30.4% of the outstanding shares with David Tepper protege Eric Cole’s Warlander Asset Management as the largest holder with 17,000,000 common shares. Attorney Ed Weisfelner certainly delivered here for shareholders. As we said before:

Ed Weisfelner is perhaps the top bankruptcy litigator in the United States. He’s the go-to guy Carl Icahn calls when he needs to be represented in Bankruptcy Court. Weisfelner has been involved with nearly every major bankruptcy of the last 30 years including Energy Future Holdings, Trump Casinos, Global Crossing, MCI/Worldcom, XO Communications, Adelphia Communications, AMR Corp (parent of American Airlines), TWA, and many others. Having him represent the Ad Hoc Equity Committee is a huge win for common shareholders.

The next steps are as follows. On December 6, the company will file a reorganization plan and disclosure statement. On January 20, the court will look to approve the adequacy of the disclosure statement. Come March 17, the court is set to confirm the reorganization plan. April 15 will see the consummation of the plan and Ultra Petroleum emerging from bankruptcy and back trading on the Big Boards. Dates are subject to change of course, but this provides a preliminary timeline. CEO Michael Watford said:

"The fact that more than two-thirds of our Ultra Petroleum Corp. Senior Noteholders are now in support of our Plan Support Agreement attests to the strength of the deal that we have reached with these stakeholders and demonstrates that our restructuring process has made significant progress."

Q3 results showed that Ultra Petroleum reported adjusted net income of $102.4 million, or $0.66 per diluted share for the quarter ended September 30, 2016. Operating cash flow was $129.0 million for the quarter ended September 30, 2016. Production of natural gas and oil was 69.3 billion cubic feet equivalent (Bcfe). The company's production for the third quarter was comprised of 65.2 billion cubic feet (Bcf) of natural gas and 680.1 thousand barrels (Mbls) of oil and condensate. Ultra Petroleum's average realized natural gas price was $2.62 per thousand cubic feet (Mcf). The company's average realized oil and condensate price was $41.55 per barrel (Bbl).

Going forward, the focus will be on oil and natural gas prices. For natural gas, exports and the coming winter months will eat into supply. For oil, OPEC is scheduled to meet this Wednesday. A deal that delivers a concrete supply reduction of at least 1M barrels a day, with non-members such as Russia on board could boost oil beyond its recent $40-$50 range.Currently trading with a market cap of $1.12 billion, Ultra’s reserves totaled 14.3 trillion cubic feet equivalent and present value discounted at 10% totals between $7.2 billion and $8.7 billion. As of December 31, 2015, it owned interests in approximately 104,000 gross acres in Wyoming; and approximately 150,000 gross acres in Pennsylvania. The company also owns approximately 9,000 net acres in the Uinta Basin in Utah. If oil and natural gas prices keep ticking higher, shares of UPLMQ will do so as well. We will be updating our subscribers as soon as we know more. For the latest updates on UPLMQ, sign up below!Disclosure: We have no position in UPLMQ and have not been compensated for this article.