Ultra Petroleum Corp. (NYSE: UPL)
According to the Complaint, Ultra Petroleum Corp. is a petrochemical company focused on developing its natural gas reserves located in southwest Wyoming. Over 80% of the Company’s revenues have historically been derived from the development and sale of natural gas. On May 14, 2020, Ultra Petroleum filed for bankruptcy protection and is not named as a Defendant in the action. Prior to being delisted, Ultra stock traded on NASDAQ under the ticker symbol “UPL.” Ultra shares currently trade over-the-counter under the ticker symbol “UPLCQ.”
In April 2017, at the beginning of the Class Period, Ultra Petroleum exited a court-supervised reorganization under Chapter 11 of the U.S. Bankruptcy Code. According to Defendants, Ultra Petroleum exited the bankruptcy in “growth mode.” Defendants stated that the Company was poised to maximize the value of its substantial oil and gas deposits through ramped up production in 2017 and 2018 and that Ultra Petroleum was on track to produce between 290 and 300 billion cubic feet equivalent in 2017, with 25% production growth over these figures in 2018. Defendants represented that the Company had the financial and production flexibility to weather even a low-commodity-price environment and was set to ramp up well development with 10 rigs operating by 2018 on the back of an estimated $788 million capital budget. Accretive to this plan was the launch of a horizontal well drilling program, which Ultra Petroleum executives claimed was set to significantly expand the production capabilities of the Company’s existing wells.
The Complaint alleges that these and similar statements issued by Defendants during the Class Period were materially false and misleading when made. Throughout the Class Period, the Complaint alleges Defendants: (i) materially overstated the value of Ultra Petroleum’s oil and gas reserves; (ii) materially misrepresented the Company’s ability to ramp up production and its financial flexibility; (iii) failed to disclose the Company’s extreme sensitivity to even a modest decline in natural gas prices; and (iv) concealed significant setbacks in the Company’s vaunted horizontal well drilling program.