CorEnergy says Ultra Petroleum will assume Pinedale lease

CorEnergy Infrastructure Trust (CORR) has announced that a subsidiary of Ultra Petroleum has agreed to assume the lease on its Pinedale Liquids Gathering System without amendment, through a motion filed today in bankruptcy court.

CORR is the first publicly listed real estate investment trust focusing on energy infrastructure. According to the CORR website, the Pinedale Liquids Gathering System consists of more than 150 miles of pipeline, with 107 receipt points and four central storage facilities located in the Pinedale Anticline. The system was acquired in 2012 and leased to a subsidiary of Ultra Petroleum (guaranteed by the parent company) under a triple-net participating lease with a 15-year initial term.

Ultra Petroleum, which is focused on natural gas reserves in the Pinedale and Jonah fields as well as in Utah, filed for bankruptcy this past spring, putting CORR’s $20.6 million annual lease payments at risk.

With the new agreement, CORR agreed to withdraw its damages claims and its motion to dismiss its tenant from the bankruptcy proceedings. CORR maintains its right to assert claims in the future to protect the value of its Pinedale LGS systems. These agreements are subject to approval by the court.