Independence Contract Drilling (ICD), a Houston-based provider of oil and gas drilling services, filed for Chapter 11 bankruptcy protection on Monday in a Texas court. The move comes as the company grapples with over $230 million in debt and a rapidly declining market for its services. ICD’s filing includes a prepackaged debt-swap restructuring plan aimed at slashing its liabilities and positioning the company for future growth.
The filing reveals that the downturn in U.S. onshore drilling activity over the last six years has significantly affected ICD’s operations. With fewer oil and gas wells being drilled across the country, demand for drilling rigs and crews has plummeted, leaving the company unable to meet its financial obligations.
Debt Swap Restructuring Plan to Ease Financial Burden
The bankruptcy filing outlines a detailed restructuring plan that proposes converting $206.8 million in convertible notes into full equity ownership of ICD. Meanwhile, all remaining secured debts and unsecured trade claims will be paid off in full. Anthony Gallegos Jr., ICD’s president and CEO, expressed confidence in the plan’s ability to reduce the company’s debt load and provide greater financial flexibility.
