Fieldwood Energy Files for Chapter 11 Bankruptcy Protection

By Patrick Fitzgerald 

Fieldwood Energy LLC, one of the largest oil producers in the Gulf of Mexico, filed for bankruptcy protection Thursday after reaching a deal with creditors on a $1.6 billion debt-for-equity swap that also includes the acquisition of Noble Energy Inc.'s Gulf-based oil and gas assets.

Fieldwood, which is backed by energy investment firm Riverstone Holdings Inc., filed for chapter 11 in U.S. Bankruptcy Court in Houston with a prepackaged bankruptcy plan. In a prepackaged bankruptcy, a company negotiates with key creditors and solicits votes on its plan before actually filing its chapter 11 petition. Prepacks allow companies to shorten the often costly bankruptcy process.

In addition to its balance-sheet restructuring, Fieldwood is buying Noble's deepwater Gulf of Mexico assets in deal valued at $710 million. Noble says Fieldwood, which is paying $480 million in cash, will take over any abandonment obligations -- estimated at $230 million -- tied to the properties.

The chapter 11 plan calls for the company's unsecured creditors, including rank-and-file trade creditors, to be paid in cash in full.

Like many Gulf drillers, Fieldwood was jolted when oil prices began to slide back in 2014. However, a few years later, the company was able to sell new debt to a group of institutional investors and use the proceeds to repay its bank lenders.

As part of the bankruptcy deal, Fieldwood intends raise $525 million from an equity rights offering. The company says the restructuring deal has the backing of more than 70% of its senior lenders as well as Riverstone, its private-equity sponsor.

The Houston-based energy company has lined up a $60 million bankruptcy loan so that it can continue operating during the bankruptcy process.

Fieldwood has hired Weil Gotshal & Manges LLP, Evercore Group LLC and Opportune LLP as its bankruptcy advisers.

--Ryan Dezember contributed to this article.

Write to Patrick Fitzgerald at [e-mail]

(END) Dow Jones Newswires

February 15, 2018 15:16 ET (20:16 GMT)

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