Global Geophysical Services LLC files for Chapter 11 Bankruptcy Protection

Recently, Global Geophysical Services LLC, an oil sector data provider, announced that it had filed for Chapter 11 protection. According to The Wall Street Journal, two years following the the company’s emergence from previous bankruptcy, it will close operations.

Global Geophysical Services falls into debt

In its bankruptcy documents, Global Geophysical Services cited the historic low oil and gas prices for its mounting debt load. Reuters reported that oil prices in the U.S. fell from $115 per barrel in 2014 down to just over $40, which represented the lowest point in 13 years. Subsequently, the oil market has not rebounded enough to impact the company’s bottom line. Currently, its equity trading prices and debt loads are insurmountable under the market’s conditions. As a result, the company listed debts and assets ranging from $100 million to $500 million.

The reorganization plan for Global Geophysical Services

Global Geophysical Services stated in court papers that it intends to file a pre-packaged bankruptcy plan that will effectively divide the company into two entities. One entity will be under the control of the company’s lenders, which will include its most significant assets such as its real property and seismic data library. The other entity will sell off all of its remaining assets, the proceeds of which will go toward its unsecured lenders.

The restructuring plan also calls for senior lenders, who are owed $85 million, to receive 76 cents on the dollar. Junior lenders and unsecured creditors, on the other hand, who are owed close to $40 million, will recapture roughly 7 cents on the dollar. Furthermore, the sponsors of the reorganization plan will provide $2 million in financing while the company winds down operations.

The significance of the Global Geophysical Services filing

Global Geophysical Services is just the latest in a long line of oil and gas companies that have filed for Chapter 11 bankruptcy since last year. In fact, according to The Journal, that number has reached 83 oil companies that have closed operations.

Are you a creditor in a bankruptcy?  Have you been sued by a bankrupt?  If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.

For more posts regarding oil companies filing for Bankruptcy, check out:

• Atlas Resources Files for Chapter 11 Bankruptcy Protection
• The Biggest Bankruptcy Filing in Brazilian History Filed by Oi SA
• Chaparral Energy Inc. files for Chapter 11 Bankruptcy Protection