Ultra Petroleum Not Out of Woods Yet, Corp Raider Fir Tree Attacks

Ultra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a “non-operated” (someone else does the drilling) position in the Pennsylvania Marcellus shale with leases on 72,000 net acres–no small amount. One year ago, in April 2016, Ultra filed for Chapter 11 bankruptcy (see Ultra Petroleum (with 184K Marcellus Acres) Files for Bankruptcy). A year later, Ultra announced it has emerged from bankruptcy, raising nearly $3 billion to pay back creditors and floating 195 million shares of new stock (see Ultra Petroleum Does Bankruptcy Right, Exits with Higher Value). We thought Ultra was out of the woods, now on a strong footing. But perhaps not. Yesterday a loathsome corporate raider, Fir Tree Partners, announced it’s intention to “immediately engage with Company management to pursue value-maximizing strategic alternatives for UPL.” UPL is Ultra’s stock ticker acronym. Unfortunately for Ultra, Fir Tree is their largest stockholder. As a quick reminder for those new to MDN, corporate raiders (these days renamed to “activist investors”) take a major position in a company so they can pressure the company into firing hundreds (or thousands), and selling off assets, in order to make the company look better on paper. Once the company looks better, the share price goes up and the raider sells its stock in the target company, taking a big profit and moving on to the next target. It’s disgusting. And now it’s happening to Ultra…

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