0001193125-15-060045.txt : 20150224 0001193125-15-060045.hdr.sgml : 20150224 20150224161553 ACCESSION NUMBER: 0001193125-15-060045 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20150224 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20150224 DATE AS OF CHANGE: 20150224 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ULTRA PETROLEUM CORP CENTRAL INDEX KEY: 0001022646 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-33614 FILM NUMBER: 15643663 BUSINESS ADDRESS: STREET 1: 363 N SAM HOUSTON PARKWAY E STREET 2: SUITE 1200 CITY: HOUSTON STATE: TX ZIP: 77060 BUSINESS PHONE: 2818760120 MAIL ADDRESS: STREET 1: 363 N SAM HOUSTON PARKWAY 3 STREET 2: SUITE 1200 CITY: HOUSTON STATE: TX ZIP: 77060 8-K 1 d879090d8k.htm FORM 8-K Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 24, 2015

 

 

ULTRA PETROLEUM CORP.

(Exact name of registrant as specified in its charter)

 

 

 

Yukon, Canada   001-33614   N/A

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

400 N. Sam Houston Parkway East

Suite 1200

Houston, Texas 77060

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (281) 876-0120

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Explanatory Note

This Current Report on Form 8-K is being filed to update the unaudited pro forma condensed combined statement of operations through December 31, 2014. The registrant previously filed an unaudited pro forma condensed combined statement of operations through June 30, 2014 and September 30, 2014 with the Securities and Exchange Commission on Form 8-K/A on October 1, 2014 and on Form 8-K on December 10, 2014, respectively.

Section 2 – Financial Information

 

Item 2.01 Completion of Acquisition or Disposition of Assets.

The required updated pro forma financial information with respect to the SWEPI Transaction is provided in Item 9.01(b) of this Current Report on Form 8-K.

Section 9 – Financial Statements and Exhibits

 

Item 9.01 Financial Statements and Exhibits.

 

(b) Pro Forma Financial Information.

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2014 and the related notes are attached as Exhibit 99.1 hereto.

 

(d) Exhibits.

 

Exhibit

No.

  

Description

Exhibit 99.1    Unaudited pro forma condensed combined statement of operations showing the pro forma effects of the SWEPI Transaction for the year ended December 31, 2014 and related notes.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

ULTRA PETROLEUM CORP.

(Registrant)

Dated: February 24, 2015 By:

/s/ Garrett B. Smith

Garrett B. Smith
Chief Legal Counsel and Corporate Secretary
EX-99.1 2 d879090dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

SWEPI PROPERTIES

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

On September 25, 2014, a wholly owned subsidiary of Ultra Petroleum Corp. (the “Company” or “Ultra”) completed the previously announced acquisition of all producing and non-producing properties in the Pinedale field in Sublette County, Wyoming (the “SWEPI Properties”) from SWEPI, LP, an affiliate of Royal Dutch Shell, plc in exchange for certain of the Company’s producing and non-producing properties in Pennsylvania (the “Pennsylvania Properties”) and a cash payment of $925.0 million (the “SWEPI Transaction”) pursuant to a Purchase and Sale Agreement dated August 13, 2014. The effective date of the transaction was April 1, 2014. After customary effective-date adjustments and closing adjustments, including payments in settlement of certain liabilities prior to the effective date, the adjusted cash payment was $983.0 million and is subject to further post-closing adjustments. The SWEPI Properties consist primarily of 19,600 net mineral acres in Wyoming where the majority of the properties acquired are those in which the Company already owns an interest and associated oil and gas production and wells and the Pennsylvania Properties consist primarily of 155,000 net acres in Pennsylvania and associated oil and gas production and wells.

The accompanying unaudited pro forma condensed combined statement of operations and accompanying notes of the Company for the year ended December 31, 2014 (the “Pro Forma Statements”), which have been prepared by Ultra’s management, are derived from (a) the audited consolidated financial statements of Ultra for the year ended December 31, 2014 included in its Report on Form 10-K for the year ended December 31, 2014; and, (b) the unaudited statements of revenues and direct operating expenses of the SWEPI Properties for nine months ended September 30, 2014.

These Pro Forma Statements are provided for illustrative purposes only and are not necessarily indicative of the results that would have occurred had the transactions been in effect on the dates or for the periods indicated, or of the results that may occur in the future. The Pro Forma statements are not necessarily indicative of Ultra’s operations going forward because the presentation of the operations of the SWEPI Properties is limited to only revenues and direct operating expenses related thereto, while other operating expenses related to these properties have been excluded. The Pro Forma statements were prepared assuming the purchase of the SWEPI Properties, including purchase price adjustments to date, and assumed related financing transactions occurred on January 1, 2014. These Pro Forma Statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, the audited Statement of Revenues and Direct Operating Expenses for the SWEPI Properties for the year ended December 31, 2013, the unaudited Statement of Revenues and Direct Operating Expenses for the SWEPI Properties for the six months ended June 30, 2014 included in Exhibit 99.1 on the Company’s Report on Form 8-K/A filed on October 1, 2014, and the unaudited pro forma condensed combined statement of operations through September 30, 2014 included in Exhibit 99.1 on the Company’s Report on Form 8-K filed on December 10, 2014.


ULTRA PETROLEUM CORP. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2014

 

     Historical     Pro Forma
SWEPI
Transaction
Adjustments
    Pro Forma
SWEPI
Transaction
Financing
Adjustments
    Pro Forma  
     (in thousands, except per share data)  

Natural gas sales

   $ 969,850      $ 157,268 (a)    $ —        $ 1,127,118   

Oil sales

     260,170        33,588 (a)      —          293,758   

NGL sales

     —          661 (a)      —          661   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating revenues

  1,230,020      191,517      —        1,421,537   

Expenses:

Lease operating expenses

  96,496      20,174 (a)    —        116,670   

Liquids gathering system operating lease expense

  20,306      —        —        20,306   

Production taxes

  103,898      28,557 (a)    —        132,455   

Gathering fees

  59,931      1,059 (a)    —        60,990   

Transportation charges

  77,780      74,635 (a)    —        152,415   

Depletion, depreciation and amortization

  292,951      38,943 (b)    —        331,894   

General and administrative

  19,069      —        —        19,069   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

  670,431      163,368      —        833,799   

Operating income

  559,589      28,149      —        587,738   

Other income (expense), net:

Interest expense:

Incurred

  (146,576   —        (39,812 )(c)    (186,388

Capitalized

  20,419      —        —        20,419   

Gain on commodity derivatives

  82,402      —        —        82,402   

Gain on sale of property

  8,022      8,022   

Deferred gain on sale of liquids gathering system

  10,553      —        —        10,553   

Other income (expense), net

  2,618      —        —        2,618   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other (expense) income, net

  (22,562   —        (39,812   (62,374

Income (loss) before income tax benefit

  537,027      28,149      (39,812   525,364   

Income tax benefit

  (5,824   —   (d)    —        (5,824
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

$ 542,851    $ 28,149    $ (39,812 $ 531,188   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per common share - basic

$ 3.54    $      $ 3.47   
  

 

 

       

 

 

 

Net income per common share - fully diluted

$ 3.51    $      $ 3.43   
  

 

 

       

 

 

 

Weighted average common shares outstanding - basic

  153,136      153,136   
  

 

 

       

 

 

 

Weighted average common shares outstanding - fully diluted

  154,694      154,694   
  

 

 

       

 

 

 

See accompanying notes.


ULTRA PETROLEUM CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1. Basis of Presentation

On September 25, 2014, a wholly owned subsidiary of Ultra Petroleum Corp. (the “Company” or “Ultra”) completed the previously announced acquisition of all producing and non-producing properties in the Pinedale field in Sublette County, Wyoming (the “SWEPI Properties”) from SWEPI, LP, an affiliate of Royal Dutch Shell, plc in exchange for certain of the Company’s producing and non-producing properties in Pennsylvania (the “Pennsylvania Properties”) and a cash payment of $925.0 million (the “SWEPI Transaction”) pursuant to a Purchase and Sale Agreement dated August 13, 2014. The effective date of the transaction is April 1, 2014. After customary effective-date adjustments and closing adjustments, including payments in settlement of certain liabilities prior to the effective date, the adjusted cash payment was $983.0 million and is subject to further post-closing adjustments. The SWEPI Properties consist primarily of 19,600 net mineral acres in Wyoming and associated oil and gas production and wells, and the Pennsylvania Properties consist primarily of 155,000 net acres in Pennsylvania and associated natural gas production and wells.

On September 18, 2014, the Company issued $850.0 million of 6.125% Senior Notes due 2024 (“Notes”) in order to finance a portion of the purchase price of the SWEPI Transaction. The remainder of the cash payment was funded through borrowings under the Company’s senior revolving credit facility. The Notes are general, unsecured senior obligations of the Company.

The historical financial information is derived from the historical, consolidated financial statements of the Company and the historical statements of revenues and direct operating expenses for the SWEPI Properties (which were based on information provided by SWEPI, LP). The unaudited pro forma condensed combined statement of income were prepared assuming the purchase of the SWEPI Properties, including purchase price adjustments to date, and assumed related financing transactions occurred on January 1, 2014.

The unaudited pro forma combined statement of operations and underlying pro forma adjustments are based upon currently available information and certain estimates and assumptions made by the Company’s management; therefore, actual results could differ materially from the pro forma information. However, management believes the assumptions provide a reasonable basis for presenting the significant effects of the SWEPI Transaction. This unaudited pro forma combined statement of operations is provided for illustrative purposes only and may or may not provide an indication of results in the future.


ULTRA PETROLEUM CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

2. Pro Forma Adjustments and Other Information

The following adjustments were made in the preparation of the unaudited pro forma condensed combined statement of operations:

 

(a) Revenues and direct operating expenses were derived from the historical records of SWEPI, LP for the acquired SWEPI Properties and from the historical records of the Company for the divested Pennsylvania Properties (in thousands):

 

     For the Year Ended December 31, 2014  
     Acquired
SWEPI
Properties
     Divested
Pennsylvania
Properties
     Pro Forma
SWEPI
Transaction
 

Revenues:

        

Natural gas sales

   $ 246,122       $ (88,854    $ 157,268   

Oil sales

     33,588         —           33,588   

NGL sales

     661         —           661   
  

 

 

    

 

 

    

 

 

 

Total operating revenues

  280,371      (88,854   191,517   
  

 

 

    

 

 

    

 

 

 

Direct Operating Expenses:

Lease operating expenses

  27,647      (7,473   20,174   

Production taxes

  30,729      (2,172   28,557   

Gathering fees

  —        1,059      1,059   

Transportation charges

  74,635      —        74,635   
  

 

 

    

 

 

    

 

 

 

Total direct operating expenses

  133,011      (8,586   124,425   
  

 

 

    

 

 

    

 

 

 

(b) Depreciation, depletion and amortization (“DD&A”) was estimated using the full-cost method and determined as the incremental DD&A expense due to adding the costs, reserves and production of the SWEPI Properties into the computation for the respective period and removing the costs, reserves and production of the Pennsylvania Properties. Asset retirement obligations, related accretion and future development costs were estimated by the Company. The historical depreciation expense associated with the Pennsylvania Properties’ gathering assets was reversed.

(c) Interest expense was computed on the issuance of $850.0 million of Notes with an interest rate of 6.125% and the remaining cash payment using an effective interest rate of 2.40%, which is the interest rate for borrowings under our senior revolving bank credit facility.

(d) As a result of the ceiling test and other impairments recorded during the year ended December 31, 2012, the Company’s previously recorded net deferred tax liability fully reversed into a net deferred tax asset. The Company has recorded a valuation allowance against certain deferred tax assets and no incremental income taxes are reflected on the Statement of Operations associated with the SWEPI Transaction.