Basic Energy Services Files for Voluntary Bankruptcy Protection
A trio of service companies will serve as proposed “stalking horse” bidders in the court-supervised sale process, which will be facilitated through Chapter 11 filing.
Basic Energy Services has commenced voluntary Chapter 11 proceedings in the US Bankruptcy Court for the Southern District of Texas to facilitate a trio of asset sales to different contractors. Basic has entered into asset purchase agreements with Axis Energy Services Holdings, Berry Corporation, and Select Energy Services for different pieces of the contractor’s business.
Axis will acquire substantially all of Basic’s Well Servicing and Completion and Remedial segment assets outside of California. Berry will acquire substantially all of Basic’s assets in California for $27 million. Select will acquire substantially all of Basic’s Water Logistics segment assets outside of California, including all of the assets of Agua Libre Midstream. Financial terms for the Axis and Select deals were not disclosed.
Axis, Berry, and Select will serve as the “stalking horse” bidders in the court-supervised sale process. Accordingly, the proposed transactions are subject to higher and better offers, among other conditions.
“We believe the asset-purchase agreements will enable us to maximize the value of our businesses and create the best path forward for our customers, partners, employees, and the communities we serve,” said Keith Schilling, president and chief executive officer of Basic. “The company has faced extraordinary challenges as a result of the COVID-19 pandemic.”
Basic fully expects to continue operating without interruption, including paying its employees, during the court-supervised process.
If other qualified bids are submitted during the court-supervised sale process, Basic will conduct an auction or auctions with the agreements with Axis, Berry, and Select setting the floor for the auction processes.
Basic has received a commitment for $35 million in debtor-in-possession financing from Guggenheim Credit Services. Upon court approval, this new financing, together with cash generated from the company’s ongoing operations, is expected to provide enough liquidity to support the company during the court-supervised process.