By Jonathan Randles 

An affiliate of offshore contract driller Seadrill Ltd. said Tuesday it will shop its assets while in bankruptcy, the second time in just over three years parts of its business have tipped into chapter 11 as the oil-and-gas industry faces continued pressure during the pandemic.

Seadrill Partners LLC and several related corporate entities filed for chapter 11 protection in the U.S. Bankruptcy Court in Houston listing assets of nearly $4.58 billion and about $3.12 billion in debt. London-based Seadrill Ltd., which isn't part of Tuesday's chapter 11 filings, owns 35% of Seadrill Partners, according to court papers and a quarterly report from June.

Seadrill Partners follows several other offshore rig operators that have filed for bankruptcy in recent months, including Pacific Drilling SA, which is currently making a second trip through chapter 11 after emerging in 2018.

Seadrill Ltd., founded by Norwegian shipping magnate John Fredriksen, filed for chapter 11 in September 2017, burdened at the time by substantial debt as it navigated a prolonged decline in commodities prices. The company emerged from chapter 11 the following year. In June, Seadrill Ltd. said it wrote off its stake in Seadrill Partners, which owns and operates a fleet of drillships, semi-submersible rigs and tender rigs.

Seadrill Partners said it filed for chapter 11 with the support of a group of lenders with which it has been negotiating a consensual reorganization of its balance sheet. The bankruptcy will preserve the value of Seadrill Partners' business while it continues to operate and market its assets, the company said.

Seadrill Partners said in a press release it intends to complete a consensual restructuring of its debt and ensure "that all customer, vendor and employee obligations are met without interruption."

Seadrill Ltd. didn't immediately return a message seeking comment.

Seadrill Partners has retained law firm Jackson Walker LLP to represent the company in chapter 11. It has also hired Evercore Inc. as financial adviser and M-III Partners LP as restructuring adviser.

U.S. Bankruptcy Judge David R. Jones has been assigned to the chapter 11 case, number 20-35740.

Write to Jonathan Randles at Jonathan.Randles@wsj.com

 

(END) Dow Jones Newswires

December 01, 2020 18:25 ET (23:25 GMT)

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