Ultra Petroleum Corp. (OTC: UPLMQ), which filed for Chapter 11 bankruptcy protection in May 2016, has renegotiated its gas processing contracts with Enterprise Products Partners LP (NYSE: EPD) and Williams Partners LP (NYSE: WPZ).
Ultra said in a statement that it expects the new agreements, approved by the U.S. Bankruptcy Court on Feb. 22, to provide financial benefits related to its operations at the Pinedale Field asset in Wyoming, including:
- Processing fees: The contracts will increase EBITDA by about $12 million per year at current production volumes; and
- Gas sales revenues: An increase of about $0.02 per thousand cubic feet for gas processed through the Enterprise plant (which is expected to increase annual revenue by $1.6 million at current production volumes).
The company expects these benefits to increase as production volumes grow through its development drilling program in Pinedale. Primary terms of the new contracts extend through 2036.
“We have made every effort to utilize our in-court restructuring process to maximize the value of our business enterprise,” Michael Watford, Ultra’s chairman, president and CEO said in a written statement. “We are pleased to announce these new long-term gas processing contracts that will not only improve the profitability of our Pinedale asset, but will ensure that our gas will continue to be processed in reliable facilities operated by industry leaders.”
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