By January 23, 2017 Read More →

Forbes Energy eyes quick emergence from prepackaged Chapter 11

Forbes Energy

Under its Chapter 11 plan, existing equity in Forbes Energy Services, including common and preferred stock would be cancelled.  Company photo.

Forbes Energy owns well servicing rigs in TX, LA and PA

CHICAGO, Jan 23 (Reuters) – U.S. oilfield services company Forbes Energy Services Ltd said it expected to “promptly” emerge from bankruptcy after filing a Chapter 11 plan on Monday with a prepackaged deal to exchange $280 million of debt for equity.

Dozens in the sector, whose services include drilling wells and hauling water for energy exploration companies, have sought protection from creditors as low energy prices have prompted producers to scale back on drilling.

In a filing with the U.S. Bankruptcy Court in Houston, Forbes said the slump had reduced demand for its activities, rendering it unable to make payments on some of its debt. It said holders of 87 per cent of senior unsecured notes had voted to accept its restructuring plan.

The Alice, Texas, company operates around 173 well servicing rigs in Texas, Louisiana and Pennsylvania. It also transports and disposes of fluids used in drilling.

Forbes said it had ample liquidity to support the business during the Chapter 11 proceeding and also secured a $50 million facility to be funded by certain of bondholders to ensure adequate working capital after the bankruptcy.

Existing equity in the company, including common and preferred stock, would be cancelled.

Competitors Key Energy Service Inc and Basic Energy Services Inc each filed for bankruptcy in the fourth quarter but emerged soon after.

Another competitor, Seventy Seven Energy Inc, emerged from bankruptcy in August and recently announced an approximately $1.76 billion deal to be acquired by Patterson-UTI Energy Inc.

(Reporting by Tracy Rucinski; Editing by Lisa Von Ahn)

Posted in: Energy Financial

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