Green Field Energy Services, Inc. (“Green Field”), filed for bankruptcy protection yesterday in the United States Bankruptcy for the District of Delaware. Green Field began in 1969 as Hub City Industries, LLC, a Louisiana limited liability company. The company changed its name to Green Field Energy Services in 2011, at the same time converting to a Delaware corporation. Up until 2010, Green Field focused its business on providing oil well-related services. In recent years, however, the company has focused on hydraulic fracturing services. See Green Field’s Declaration in Support of Chapter 11 Petitions and First Day Motions (the “Declaration” or “Decl.”) at *4-5.
Aside from hydraulic fracturing, Green Field provides cementing, coiled tubing, pressure pumping, acidizing and other pumping related services. Hydraulic fracturing is the process where fluids are pumped underground at high pressure, causing the rock and sediment to fracture, which in turn releases oil and natural gas. Decl. at *3. The process uses “propping agents” which props open the cracks created by the fluid. The propping agents often consist of sand, bauxite or ceramic particles. Id.
Based in Lafayette, Louisiana Green Field employs over 330 employees at 14 different locations in Texas and Louisiana. The company has grown steadily over the years. Revenues in 2007 reached $18 million and by August of 2013, revenues exceeded $183 million. Decl. at *8. Despite the growth in revenue, Green Field has also watched its net losses increase over the years. Losses in 2007 totaled approximately $2.4 million, whereas by August of 2013, the company had a total net loss of $81 million. Decl. at *8. The company heads in to bankruptcy with $80 million in secured debt in its “Shell Credit Facility,” $256 million in senior secured notes maturing in 2016 and trade debt totaling approximately $98 million.
Like most companies, Green Field operates in a competitive market. The company’s competitors include both regional and multinational oilfield service companies. Halliburton Company, Schlumberger Ltd., and Baker Hughes are some of Green Field’s international competitors. Decl. at *17. In order to gain a competitive advantage, in 2011 Green Field expanded its fleet of turbine powered hydraulic fracturing equipment from 8 units to 65. Soon after the expansion, market conditions worsened and the company’s client base declined. Problems compounded in August of this year when Shell informed Green Field that it intended to discontinue using its services. Following these events, the company started to pursue restructuring alternatives. Decl. at *24. By filing for bankruptcy, Green Field hopes to restructure, shed some debt and obtain additional financing. Decl. at *26.
Green Field is represented by the law firms Latham & Watkins LLP and Young Conaway Stargatt and Taylor, LLP. Green Field’s bankruptcy proceeding is before the Honorable Kevin Gross of the Delaware Bankruptcy Court, under case no. 13-12783(KG).
Jason Cornell is an equity partner with the law firm Fox Rothschild LLP. Jason is a creditors’ rights attorney who is admitted and practices before the United States Bankruptcy Court for the District of Delaware. You can reach Jason at 302 427 5512 or firstname.lastname@example.org.
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