BJ Services To Sell Assets as It Seeks Bankruptcy Protection
The legacy service provider operates in every major shale basin in the US and Canada. In court filings, it says it will seek additional funding to sell its equipment and wind down operations.
One of the shale sector’s legacy service providers filed for court-supervised bankruptcy protection on Monday, 20 July.
Based in the Houston area, BJ Services said in its filing that it also intends to sell core assets that include its cementing business and portions of its hydraulic fracturing inventory. The company reports that is active in every major US and Canadian shale basin.
In a statement, Warren Zemlak, the president and chief executive officer of BJ Services, said the financial situation was precipitated by the COVID-19 pandemic and its negative impact on demand. “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,” he added.
In the court filings BJ Services said the value of its assets and debt holdings ranged between $500 million and $1 billion. The company also said it is seeking additional funding to see it through the asset sale and wind-down process. Meanwhile, it is working to minimize the disruption to current projects and is reaching its clients to cover various options.
Amid the early period of the US shale revolution, BJ Services was a leading provider of hydraulic fracturing services and would be acquired in 2010 by Baker Hughes for $6.8 billion.
In 2017, Baker Hughes formed a joint venture to operate BJ Services’ pressure-pumping and cementing businesses. The deal involved selling 53% of the company to oil-services-focused CSL Capital Management and an energy division of Goldman Sachs for $325 million.