Green Field Energy Services Inc. files for Chapter 11 Bankruptcy

Green Field Energy Services Inc., an oilfield service company, has filed for Chapter 11 bankruptcy. The company’s headquarters are in Lafayette, Louisiana, and includes 14 facilities in Louisiana and Texas, employing 355 people. Green Field’s troubles began when the company attempted to shift toward the growing natural gas industry in 2010. This required the development and acquisition of specialized fracturing machinery. The cost of this change, in addition to worsening market conditions, left Green Field with too much debt to bear. The final blow came in August 2013, when the company lost its largest customer, Royal Dutch Shell PLC (RDSA, RDSB).

Although Green Field’s revenues increased after the change to natural gas, it has not been able to turn a profit. In 2007, the company’s revenues were $18.7 million, and by August 2013, they had already earned $183 million. Even so, the 2013 losses are estimated at $81.4 million. By the time they filed for bankruptcy, Green Field’s debt included $255.9 million in bond debt, $80 million owed to Shell, and $98.6 million in trade debt. While the company restructures, it has acquired $30 million in financing from GB Credit Partners LLC and ICON Capital LLC. It is currently leasing its equipment and manpower to other companies, including Shell, EXCO Resources Inc., Navidad Resources LLC, Chesapeake Operating Inc., and Roywell Services Inc.

Unfortunately for Green Field, there are several other companies dominating this field, including Halliburton Co., Schlumberger Ltd., and Baker Hughes Inc. Also, since 2010, Green Field has increasingly relied on only five of its customers. This dependence has grown from 38% of revenues in 2010 to 88% in 2012, with Shell making up a whopping 79%. Only time will tell whether this company will survive its restructuring and become a competitor in the natural gas market.

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