Weatherford expects to file for Chapter 11 bankruptcy

Weatherford International has entered an agreement with its top creditors that will enable the oilfield service company to file for Chapter 11 bankruptcy.

The company plans to implement the restructuring agreement via a pre-packaged Chapter 11 process and expects to file US Chapter 11 and Irish examinership proceedings.

As part of the process, Weatherford plans to continue engaging in negotiations with, and start soliciting votes from, its creditors in connection with a proposed plan of reorganisation before filing.

The company expects to reduce its long-term debt by more than $5.8bn through the restructuring.

The proposed restructuring contemplates $1.75bn in new financing and up to $1.25bn in additional post-emergence financing.

Pro forma for the transaction, Weatherford would have up to $2.50bn in total funded debt, which the company says might be reduced depending on various factors upon exit.

Weatherford International president and CEO Mark McCollum said: “During the past year, we have been executing a company-wide transformation to fundamentally improve the way we operate our business and to strengthen Weatherford for the long run.

“Despite the challenging market dynamics our industry continues to face, we believe that our transformation strategy, which is designed to improve our execution capabilities, lower our cost structure and create efficiency to allow us to better price our products and services, will position Weatherford for long-term success.”

Weatherford employs 26,000 people and operates in more than 80 countries with a network of 650 locations.

The company has not reported a profit since the third quarter of 2014. For the first quarter ended 31 March 2019, Weatherford posted a $481m loss, widening from the $245m loss from the same period in 2018. Revenues dropped to $1.35bn in Q1 from $1.42bn a year earlier.

Weatherford said it will be business as usual as the restructuring deal contemplates to continue operating its businesses and facilities with no expected impact on customers, vendors, partners or employees.