BY Fraser Tennant
Another victim of the industry’s continuing downcycle, multinational oil and natural gas company Weatherford International plc has filed for Chapter 11 bankruptcy protection amid mounting debt.
Through a prepackaged Chapter 11 process, the company expects to implement a comprehensive financial restructuring agreement to significantly reduce its long-term debt and related interest costs, provide access to additional financing and establish a more sustainable capital structure.
In addition to its Chapter 11 filing, as a company domiciled in Ireland, Weatherford has also filed Irish examinership proceedings. Furthermore, as part of the bankruptcy and restructuring process, Weatherford intends to continue engaging in discussions with, and begin soliciting votes from, its creditors in connection with a proposed plan of reorganisation prior to filing.
"During the past year, we have been executing a company-wide transformation to fundamentally improve the way we operate our business and to strengthen Weatherford for the long run," said Mark A. McCollum, president and chief executive of Weatherford. "Despite the challenging market dynamics our industry continues to face, we believe that our transformation strategy, which is designed to improve our execution capabilities, lower our cost structure and create efficiency to allow us to better price our products and services, will position Weatherford for long-term success.”
Weatherford expects to continue to operate its businesses and facilities during the Chapter 11 and restructuring process, without disruption to its customers, vendors, partners or employees.
“However, we still face a high level of debt that affects our ability to make investments in our Company and implement further elements of our transformation plan,” continued Mr McCollum. “We expect that the new capital structure will allow us to continue to capitalise on our momentum and build a truly integrated service company with sustainable profitability and long-term growth potential."
One of the world’s largest oilfield service companies, Weatherford operates in over 80 countries and has a network of approximately 650 locations, including manufacturing, service, research and development and training facilities and employs approximately 26,000 people.
Mr McCollum concluded: “Our customers, partners, employees and vendors should not experience any changes in the way we do business, and we expect their experience will improve after the restructuring is complete.”