Reorganization Efforts

• The pace of restructuring activity picked up in Q4, a trend that is expected to continue in 2020. Switzerland and Houston-based oilfield service company Weatherford International has emerged from Chapter 11 bankruptcy with roughly $10 billion of financial support. Weatherford announced that the company emerged from Chapter 11 with $6.2 billion of outstanding funded debt, secured $2.6 billion in exit financing facilities, including a $450 million revolving credit facility, secured a $195 million letter of credit facility, and emerged with over $900 million of liquidity.
• Reports state that McDermott is preparing to file for Chapter 11 over the next few weeks and that a group of lenders led by the New York investment firm HPS Investment Partners and Boston hedge fund operator Baupost Group are in talks to provide the struggling Houston company with a loan of around $2 billion to maintain operations during bankruptcy.
• Chesapeake Energy, which helped propel the shale gas revolution in the late 2000s, is now facing tough times trying to heal its balance sheet, on which $9.7 billion in total debt weighs. The company is looking to improve its balance sheet and is evaluating multiple options to reduce debt and to become free cash flow positive next year.
• Fort Worth, Texas-based Approach Resources said it will explore a restructuring of its balance sheet, a going-concern sale of its business and other alternatives while under Chapter 11 protection. The company has drilling operations in West Texas, having operated oil and gas properties in the Permian Basin since 2004.
• Banks are expected to continue cutting their exposure to struggling US shale drillers and are restricting lending as they revise their estimates on the value of shale reserves. Haynes & Boone estimates that banks could cut their credit lines to the sector by an average of 10 percent, with much more significant reductions for companies that are in a weaker financial position. The scrambling among financial institutions comes as the industry is being hit by a wave of write downs by the super majors, which has implications for the entire sector.

Riveron brings energy companies an uncommon agility, applying extensive technical accounting, finance, and operations expertise to accelerate the timeline and impact of change. Our experienced team members have sat on all sides of the table from executive roles in accounting and operations to investor roles in private equity and investment banks. We understand the unique challenges facing the energy industry and partner with our clients to achieve exceptional results.