Noble Corp. files massive bankruptcy in Houston

London-based Noble Corporation PLC (NYSE: NE) reached a restructuring support agreement with two groups of lenders and filed for bankruptcy in Houston on July 31.

The agreement would cut more than $3.4 billion of Noble’s debt in exchange for equity interest in the reorganized company, which would be turned over to creditors, according to a July 31 press release. The company is petitioning the Southern District of Texas Bankruptcy Court for Chapter 11 protection while it restructures.

Noble would emerge with new financing in the form of $200 million in second-lien notes and a $675 million revolving credit facility if all goes according to its current plan. The company has enough funding to run its normal operations through the bankruptcy, so it doesn’t need a debtor-in-possession loan right now, it said.

Noble, an offshore drilling contractor, has had to contend with plunging oil and gas prices this year as the Covid-19 pandemic guts fuel demand. The bankruptcy comes after months of looking through other options, Robert Eifler, president and CEO of Noble, said in the press release.

Noble started the second quarter with $7.26 billion in assets and $4.66 billion in debt, according to the court documents.

During 2019, the company produced $1.31 billion in revenue, which resulted in a $734.9 million net loss for the year. Noble has about 2,000 employees worldwide, most of whom are located offshore, according to its most recent annual financial report.

Noble’s bankruptcy comes just a day after the Houston bankruptcy filing of Plano, Texas-based Denbury Resources Inc. (NYSE: DNR). Noble and Denbury are far from the only companies based outside of Houston that have filed their bankruptcies in the Bayou City. Oklahoma City-based Chesapeake Energy Inc., Ohio-based Covia Holdings Corp., Fort Worth-based Lilis Energy Inc., Oklahoma-based Unit Corp., and others have all petitioned the Houston court for Chapter 11 protection. Many oil and gas companies will try to get their cases in front of one of Houston’s two most prominent bankruptcy judges: Marvin Isgur and David Jones. Houston’s bankruptcy court has become well known for its ability to handle large oil and gas bankruptcies efficiently.

By Joshua Mann, Senior Reporter

Courtesy of the Houston Business Journal

https://www.bizjournals.com/houston/news/2020/07/31/noble-corp-files-massive-bankruptcy-in-houston.html