Ultra Petroleum to Offer Notes to Fund Pinedale Acquisition


Natural gas producer, Ultra Petroleum Corporation (UPL) is set to offer senior unsecured notes worth $700 million. The company added that the notes, anticipated to mature by 2024, will be offered to a few selected investors.  

The net proceeds from the notes offering are expected to be utilized to partly finance Ultra Petroleum’s acquisition of the Pinedale field.  

Last month, Ultra Petroleum entered into a purchase and sale agreement with a subsidiary of European oil major Royal Dutch Shell plc (RDS.A). Per the deal, Ultra Petroleum is expected purchase the entire interest of Shell in the Pinedale field, which is rich in natural gas. For the acquisition, Ultra Petroleum will pay a cash consideration of $925 million and give away its partial interest in the Marcellus Shale – which covers roughly 155,000 net acres.  

Ultra Petroleum revealed that after the completion of the acquisition – likely to close by the third quarter – its net proved reserves will increase by 1.8 trillion cubic feet equivalent.  

Houston, TX-based Ultra Petroleum is an independent energy firm engaged in the acquisition, development, exploration and production of oil and gas properties. The company’s operations are focused on the Green River Basin of southwest Wyoming, mainly covering the Pinedale and the Jonah fields.

Ultra Petroleum currently holds a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at better-ranked players in the oil and gas exploration and production industry like Cheniere Energy Inc. (LNG) and WPX Energy Inc. (WPX). Both stocks sport a Zacks Rank #1 (Strong Buy).

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