Houston’s C&J Energy Services has emerged from bankruptcy as a new company governed by a new corporate board.
C&J Energy Services Ltd. tweaked its name slightly in becoming the new C&J Energy Services Inc. as it effectively swapped partial control of the company to its lenders in exchange for eradicating more than $1.4 billion in debt.
C&J represented one of the larger Chapter 11 filings out of roughly 225 North American energy companies that sought bankruptcy protection during the two-year oil bust. A handful of others already have emerged from bankruptcy as well.
The Houston company, which has had two other CEOs since founder Josh Comstock died in March at age 46, filed for bankruptcy last year in an effort to shed crippling debt it took on to complete what proved to be an ill-timed acquisition. C&J represents another example of energy companies that expanded too quickly and took on too much debt as the shale boom came to an end. As prices slid, the cash flow needed to support heavy debt loads dried up.
“We are so pleased to be emerging from Chapter 11 and moving forward with a stronger financial foundation,” said new C&J President and CEO Don Gawick, who led the company through its bankruptcy process. Gawick first joined the company in 2012 and served as chief operating officer during most of his tenure.
The new C&J chairman is Patrick Murray, a former CEO of Dresser Inc.
C&J, founded in 1997, grew to about 10,000 employees by early 2015, before slashing nearly 4,000 jobs to bring employment to about 6,100 in February. More jobs have been cut since then, but the company hasn’t disclosed any more numbers. C&J continued to operate during the duration of its bankruptcy.
C&J’s growth was spurred in part by acquiring the well production and completion businesses of Nabors Industries, another Houston company. Oil was trading at more than $106 a barrel when the deal was announced in June 2014; by the time the deal closed in early 2015, prices had slid to about $47. Prices kept falling until February, when they hit a low of $26.21 a barrel.