Crude oil had a huge bounce back day Monday after it rebounded to trade at $33.27 per barrel after market.
Ultra Petroleum (UPL:NYSE) also bounced back more than 80% after a horrific end to the week which saw it give up more than 40% of its value on two separate trading days to end last week.
Ultra Petroleum’s pain magnified by weak energy prices
In a recent article published on Seeking Alpha, titled Ultra Petroleum: Negotiating A Debt Restructuring, the company’s bond problems are summarized:
- “Ultra Petroleum appeared to have a high probability of a 2016 restructuring due to upcoming debt maturities and probable covenant violations.
- Ultra is now attempting to negotiate an out-of-court restructuring and appears likely to not pay out its maturing March 2016 bonds.
- Recent asset sales indicate that Ultra’s assets are probably worth $2 billion or less in the current market, while net debt is $3.4 billion.”
Click here to read the entire article.
The above article followed similarly negative articles published on February 18th titled Ultra Petroleum flirts with bankruptcy after $3.2B Q4 loss.
Ultra Petroleum falls from $1.23 to $0.18 in 5 trading days
While the company’s latest financials clearly crushed Ultra’s share price last week, falling 40.36% on the 18th and another 49% on the 19th – Monday’s rising oil price had some investors doubling down on the beleaguered energy producer. Ultra’s shares raced back to a high of $0.37 Monday (from a low of $0.18 Friday) before closing at $0.359 per share. Below are some details surrounding the company’s current obligations outlined in its February 18th press release:
“As of February 18, 2016, the total outstanding principal amount of our debt obligations was $3.76 billion, consisting of the following:
- $450.0 million of unsecured senior notes due 2018 issued by Ultra Petroleum Corp.;
- $850.0 million of unsecured senior notes due 2024 issued by Ultra Petroleum Corp.;
- $999.0 million under the senior unsecured Ultra Resources Credit Agreement; and
- $1.46 billion in unsecured senior notes issued by Ultra Resources, Inc.
The level of our indebtedness and the current commodity price environment has presented significant challenges as they relate to, among other things, our ability to comply with the financial and non-financial covenants in the agreements governing our indebtedness, our ability to amend, replace or refinance any or all of the agreements governing our indebtedness and otherwise raise significant additional capital, which may materially impact the operation of our business.”
Click here to read the entire press release.
Despite the tough conditions, deals are getting done. Seeking out the best management teams as this historic bearish period comes to an end is no small task. So, how does one go about finding the ‘stout’ management teams?
This was the motivation behind our new Ebook at Pinnacle Digest.
Ultra Petroleum stays volatile in February Stock Challenge
Long-time Pinnacle member ‘PTSAELJ‘ has been riding Ultra up, down and all around this month. On Monday it was up as the move greatly outperformed all other issuers in February’s Stock Challenge.
Gold stocks and gold ETFs remain hot as investors remain bullish despite today’s selloff in gold.
Our leader ‘gmcrockwood‘ was sitting pretty Monday with a 93.6% combined average return thus far on the month. His two leveraged gold ETFs ‘JNUG’ and ‘NUGT’ are up huge in recent sessions, despite JNUG declining Monday. February’s Stock Challenge is still wide open as the TSX Venture continues to increase in value.
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