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Oilfield services provider Nine Energy Services sought refuge in bankruptcy court Monday, announcing it has filed for Chapter 11 protection in Texas with a prepackaged restructuring plan designed to erase $320 million of its $388 million debt load through an equity swap.

The filing marks a dramatic turn for the Houston-based company, which once rode the surge of U.S. shale expansion but now seeks to steady itself after years of market turbulence.

Prepack Plan Backed by Major Creditors

In court papers, Nine Energy said it secured support from holders of approximately 70% of its senior notes for the restructuring agreement. The plan calls for converting a substantial portion of its debt into equity, a financial reset aimed at shoring up its balance sheet.

The company’s revolving loan provider has agreed to supply $125 million in Chapter 11 financing. That debtor-in-possession funding is slated to roll into a $135 million exit facility upon the company’s emergence from bankruptcy.

Chief Executive Ann Fox signaled confidence in the restructuring strategy.

“We look forward to emerging from this process with a healthier financial foundation, well-positioned to offer comprehensive well solutions for many years to come,” Fox said in a statement issued Monday.

From Expansion to Overleveraged

Nine Energy provides services critical to drilling and completing oil and gas wells — the behind-the-scenes engineering that turns boreholes into producing assets.

But in its filings, the company said debt incurred to finance a 2018 acquisition left it heavily leveraged. The financial strain was compounded by the collapse in oil demand during the COVID-19 pandemic and ongoing volatility in global energy markets.

Like many service providers tethered to the cyclical rhythms of oil prices, Nine Energy found itself squeezed when consumption fell and capital spending tightened.

Advisors and Legal Counsel

To navigate the restructuring, Nine Energy has retained Moelis & Co. as its investment banker and FTI Consulting as financial adviser.

The company is represented by John J. Kane, Kyle Woodard, JaKayla J. DaBera and Michael P. Ridulfo of Kane Russell Coleman Logan PC, along with Chad J. Husnick and Ross J. Fiedler of Kirkland & Ellis LLP.

The Chapter 11 filing positions Nine Energy to attempt a rapid reorganization under court supervision, trimming liabilities while preserving operations.

With Nine Energy filed for Chapter 11, the company now begins the delicate process of reshaping its capital structure — an effort to convert financial strain into a fresh start in an energy market still defined by unpredictability.