Houston-based GulfMark Offshore, which runs support vessels for offshore drilling, said Tuesday that it plans to to file for bankruptcy after reaching a agreement with bond holders to convert debt to equity.
The reorganization, which was first reported in the Houston Business Journal, would help the company shed $430 million in debt. Shareholders will have .75 percent of the equity in the reorganized company. GulfMark said it expects to file for Chapter 11 bankruptcy by May 21.
“We are confident that this step will position GulfMark to seize opportunities as the downturn continues and in the eventual market recovery,” said Quintin Kneen, GulfMark’s CEO, said in statement.
While operators drilling in West Texas’ shale plays have managed to turn a profit with lower oil prices, the offshore drilling industry has struggled to recover as oil prices hover at or below $50 a barrel.
Earlier this month at the Houston’s annual Offshore Technology Conference, the industry’s largest gathering, executives from large companies discussed the need to cut costs in offshore operations. Some companies, like British oil company BP, said they can profit with “lower- for- longer” oil prices. But smaller offshore drillers and service companies haven’t managed to profit, conference goers said.