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Why Did Ultra Petroleum’s Stock Price Rise?

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Nov. 23 2016, Published 7:49 a.m. ET

Ultra Petroleum reached an agreement with debt holders

On November 22, 2016, natural gas producer Ultra Petroleum (UPL) (UPLMQ) announced that it entered into a PSA (Plan Support Agreement) and BCA (Backstop Commitment Agreement). The agreements are with holders of most of the principal amount of its outstanding 5.8% Senior Notes due in 2018 and 6.1% Senior Notes due in 2024. The agreements also include shareholders who own at least a majority of its outstanding common stock.

PSA is an important step towards the successful completion of reorganization proceedings. BCA will provide the necessary liquidity to reorganized Ultra Petroleum.

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Ultra Petroleum stock rose more than 30% in a single day

In reaction to signing the PSA and BSA on November 22, Ultra Petroleum’s stock rose 33% and closed at $7.10. In 2016, Ultra Petroleum has been a stronger stock in the upstream space. For 2016, Ultra Petroleum rose ~184%. Other natural gas producers like Range Resources (RRC), Southwestern Energy (SWN), and Gulfport Energy (GPOR) rose ~45%, ~56%, and ~4%, respectively.

In this series

In this series, we’ll look at the details of Ultra Petroleum’s PSA and BCA. We’ll also study the company’s operational performance from the recent quarter, its updated business outlook, and Wall Street analysts’ ratings.

In the next part, we’ll look at the details of Ultra Petroleum’s PSA and BCA agreements.

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