Fieldwood Energy Files for Chapter 11 Bankruptcy Protection
February 15 2018 - 3:31PM
Dow Jones News
By Patrick Fitzgerald
Fieldwood Energy LLC, one of the largest oil producers in the
Gulf of Mexico, filed for bankruptcy protection Thursday after
reaching a deal with creditors on a $1.6 billion debt-for-equity
swap that also includes the acquisition of Noble Energy Inc.'s
Gulf-based oil and gas assets.
Fieldwood, which is backed by energy investment firm Riverstone
Holdings Inc., filed for chapter 11 in U.S. Bankruptcy Court in
Houston with a prepackaged bankruptcy plan. In a prepackaged
bankruptcy, a company negotiates with key creditors and solicits
votes on its plan before actually filing its chapter 11 petition.
Prepacks allow companies to shorten the often costly bankruptcy
process.
In addition to its balance-sheet restructuring, Fieldwood is
buying Noble's deepwater Gulf of Mexico assets in deal valued at
$710 million. Noble says Fieldwood, which is paying $480 million in
cash, will take over any abandonment obligations -- estimated at
$230 million -- tied to the properties.
The chapter 11 plan calls for the company's unsecured creditors,
including rank-and-file trade creditors, to be paid in cash in
full.
Like many Gulf drillers, Fieldwood was jolted when oil prices
began to slide back in 2014. However, a few years later, the
company was able to sell new debt to a group of institutional
investors and use the proceeds to repay its bank lenders.
As part of the bankruptcy deal, Fieldwood intends raise $525
million from an equity rights offering. The company says the
restructuring deal has the backing of more than 70% of its senior
lenders as well as Riverstone, its private-equity sponsor.
The Houston-based energy company has lined up a $60 million
bankruptcy loan so that it can continue operating during the
bankruptcy process.
Fieldwood has hired Weil Gotshal & Manges LLP, Evercore
Group LLC and Opportune LLP as its bankruptcy advisers.
--Ryan Dezember contributed to this article.
Write to Patrick Fitzgerald at patrick.fitzgerald@wsj.com
(END) Dow Jones Newswires
February 15, 2018 15:16 ET (20:16 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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