The Company believes a successful completion of these sales would reduce the number of jobs impacted by this process
BJ Services, LLC, (collectively with certain of its affiliates, “BJ Services” or the “Company”), a leading provider of hydraulic fracturing and cementing services to upstream oil and gas companies engaged in the exploration and production (E&P) of North American oil and natural gas resources, announced today that it has voluntarily filed petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Court”). In connection with the Chapter 11 process, the Company intends to sell its assets, and is in active discussions with bidders regarding both the cementing business and portions of the fracturing business. The Company believes a successful completion of these sales would reduce the number of jobs impacted by this process.
“The industry continues to face unprecedented uncertainty caused by volatile commodity markets and significantly reduced demand due to the COVID-19 pandemic. Despite maintaining a leading market position and strong client support, the severe downturn in activity and subsequent lack of liquidity resulted in an unmanageable capital structure. After exhausting every possible alternative to address these issues and improve our liquidity, we have made the very difficult decision to proceed with a Chapter 11 process,” said Warren Zemlak, President and Chief Executive Officer of BJ Services. “Our Board of Directors and the entire management team worked diligently over the course of the past several weeks to avoid this outcome. Having said that, we are pleased to be in discussions with interested bidders for our cementing business and for certain portions of our fracturing business and technology.”
The Company is developing a plan with its stakeholders to minimize disruption to current client activity as much as feasible and will be reaching out to clients to discuss available options. The Company is working with its lenders to procure liquidity to fund the sale and wind-down through the Chapter 11 process.
“I would like to extend my sincere appreciation to our employees for their tireless commitment to the Company, and to our clients, suppliers and other business partners for their continued support during these challenging times,” Mr. Zemlak added. “I want to assure our business partners that our team is as focused as ever on working with our stakeholders to procure sufficient liquidity to complete all client activities safely and in accordance with all applicable laws and regulations.”
BJ Services is filing several customary “First Day” motions with the Court, which are intended to support the Company’s efforts during the chapter 11 cases. Among these is a motion to continue providing wages, salaries and benefits to those employees that continue working during this period.
In addition to its operations in the United States, BJ Services has a presence or operates in most major basins throughout Canada. Accordingly, in conjunction with the Chapter 11 filing, BJ Services’ Canadian affiliate will be filing cases seeking protection under the Companies’ Creditors Arrangement Act (CCAA) in Canada to facilitate an orderly wind-down of those operations.
Court filings and other information related to the cases are available at a website administered by the Company’s claims agent, Donlin, Recano & Company, at www.donlinrecano.com/bjs.
Kirkland & Ellis LLP is serving as legal counsel to BJ Services. PJT Partners has acted as investment banker and financial advisor to the Company. Ankura Consulting Group, LLC is acting as restructuring advisor to the Company. Simmons Co. is acting as advisor in the sale of the cementing business.
Source: Company Press Release