Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Ultra Petroleum files for Chapter 11 Bankruptcy Protection
Author: Joel R. Glucksman
Date: June 24, 2016
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Ultra Petroleum files Chapter 11
Recently, Ultra Petroleum, the largest natural gas company in Wyoming and one of the biggest firms in the nation, announced that it had filed for Chapter 11 bankruptcy protection. According The Wall Street Journal, the company cited several months of financial decline for its decision.
Ultra Petroleum falls into insolvency
In its bankruptcy documents, the company claimed that it amassed a massive debt load that was directly correlated to the collapse of oil and natural gas prices. For a majority of the previous two years, natural gas prices have declined, and subsequently struggled to rebound, as they have averaged under $2 million per British Thermal Unit.
A Houston Business Journal report noted that the company has struggled with its debt load since 2014, as revenues fell from $183 million in the first quarter of 2015 to under $138 million by the first quarter of this year. Even so, the company only reported $21.8 million in losses in Q1 this year, as opposed to $25 million in revenues at the same time last year.
Nevertheless, this left the company with assets of only $1.28 billion and debts of more than $3.92 billion – all of which were unsecured. Then, after Ultra Petroleum failed over a series of months to negotiate refinancing agreements with any of its lenders and bondholders, the company was forced to seek bankruptcy protection.
The significance of the Ultra Petroleum filing
Ultra Petroleum’s bankruptcy petition comes less than a week after Midstates Petroleum announced that it had filed for Chapter 11 bankruptcy protection. According to The Journal, this has become a growing trend in the energy sector as more companies have struggled to adjust to the collapse of oil and natural gas prices. To date, 67 production and exploration firms have filed for Chapter 11 bankruptcy protection since 2015, which represents a 380 percent increase over 2014.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
For more posts regarding oil & gas companies filing for Bankruptcy, check out:
- Venoco files for Chapter 11 Bankruptcy Protection
- Emerald Oil Inc Files for Chapter 11 Bankruptcy Protection
- Goodrich Petroleum Corp. Files for Chapter 11 Bankruptcy Protection
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
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