BJ Services LLC has announced 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.
In connection with the Chapter 11 process, the company said it intends to sell its assets and noted that it is in active discussions with bidders regarding its cementing business and portions of its fracturing business. BJ Services believes a successful completion of these sales would reduce the number of jobs impacted by the Chapter 11 process.
The company said it is developing a plan with its stakeholders to minimize disruption to current client activity “as much as feasible”. BJ Services revealed that it is working with its lenders to procure liquidity to fund the sale and wind-down through the Chapter 11 and noted that it is filing several customary first day motions with the court. Among these is a motion to continue providing wages, salaries and benefits to employees, BJ Services noted.
“The industry continues to face unprecedented uncertainty caused by volatile commodity markets and significantly reduced demand due to the Covid-19 pandemic,” Warren Zemlak, the president and chief executive officer of BJ Services, said in a company statement.
“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,” he added.
“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,” Zemlak continued.
BJ Services describes itself as a leading provider of hydraulic fracturing and cementing services to upstream oil and gas companies engaged in the exploration and production of North American oil and natural gas resources. The business is based in Tomball, Texas.
As of July 20, there have been 14.3 million confirmed cases of Covid-19 and 603,691 deaths, according to the World Health Organization (WHO). The U.S. has seen 3.6 million confirmed cases and 139,468 deaths, as of July 20, WHO data shows.
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