Standard & Poor's Ratings Services lowered the corporate credit rating on Ultra Petroleum Corp. (NYSE: UPL) to 'CC' from 'CCC-', given our view that a default, including a selective default, is almost certain. The outlook is negative.

Our issue-level ratings on the company structurally subordinated unsecured debt remain 'C'. The recovery remains '6', indicating our expectation for negligible (0% to 10%) recovery.

The rating action reflects Ultra Petroleum's announcement that it has entered into waiver and amendment agreements with its lenders to postpone and defer the March 1, 2016, debt maturity and interest payments on its senior unsecured notes (held at operating company Ultra Resources Inc.) until April 30, 2016. The deferral will allow the company more time to negotiate with lenders on a potential debt restructuring. We believe a default, including a selective default, is almost certain.

"The negative outlook reflects our view that Ultra Petroleum will either default on its financial obligations or enter into a distressed exchange or restructuring," said Standard & Poor' Carin Dehne-Kiley.

Although unlikely, we would consider an upgrade if we believed the company would be able to fully meet its financial obligations and we no longer believed it would enter into a distressed exchange or restructuring.