BY Fraser Tennant
A victim of the turbulent economics of the oil & gas industry, drilling company Pioneer Energy Services has filed for Chapter 11 bankruptcy in order to implement a comprehensive financial restructuring.
The Chapter 11 process and restructuring, reached in agreement with Pioneer’s key stakeholders, includes a number of the company’s subsidiaries but does not include Pioneer’s international entities, the majority of which are located in Colombia.
“Over the course of the last several years, Pioneer has been challenged by the difficult economics of the oil and gas industry,” said Stacy Locke, president and chief executive of Pioneer. “We have continued to adapt to the challenging market environment in which we operate, but our strong underlying business has continued to labour under a heavy debt burden.”
Pioneer intends to use the Chapter 11 process to implement a balance sheet restructuring by significantly reducing the company’s long-term debt and related interest costs, providing access to additional financing and establishing a strong capital structure. Pioneer expects to emerge in a stronger financial position, capable of accelerating future growth and better able to serve our valued customers.
“Our objective is to use the restructuring process to implement a balance sheet restructuring and set Pioneer on a path to succeed in the future with a right-sized debt structure and ample liquidity going forward,” continued Mr Locke. “We are confident that these are the right steps to deliver value for the benefit of our stakeholders.”
Headquartered in Texas, Pioneer provides well servicing, wireline and coiled tubing services to producers primarily in Texas and the Mid-Continent and Rocky Mountain regions. Pioneer also provides contract land drilling services to oil and gas operators.
The company expects to continue to operate in the normal course during the court-supervised process and the terms of the restructuring contemplate paying all customer, vendor and other trade obligations in full in the ordinary course of business.
Mr Locke concluded: “We appreciate the ongoing hard work and commitment of the entire Pioneer team. I am confident our employees will continue to focus on safety, the day-to-day operations and provide our customers the quality of service they have come to expect from Pioneer.”