“We are excited that, as part of the restructuring, our noteholders—who bring substantial oilfield experience—will provide us with the additional capital needed to support rig reactivations and technology enhancements for our fleet,” said Gallegos in a statement. The plan also includes $32.5 million in Chapter 11 financing and $40 million in exit financing, ensuring ICD’s immediate liquidity needs are met.
Macroeconomic Factors and Market Conditions Lead to Struggles
ICD’s financial woes have been compounded by several macroeconomic factors, including the fallout from the COVID-19 pandemic, which wreaked havoc on the global economy and further depressed demand in the oil and gas sector. According to the company’s filing, 2019 saw significant market volatility in commodity prices, leading to a sharp decline in rig counts. This decline hit its lowest point in August 2020 when the U.S. land rig count fell to an all-time low of just 230 rigs.
Although ICD began to recover in the aftermath of the pandemic, the company faced additional setbacks as natural gas prices plummeted in late 2022. This oversupply of gas led to a reduction in demand for rigs, particularly in the Haynesville Shale region, which accounts for about half of ICD’s rigs.
Industry Consolidation Contributes to Declining Market Share
ICD also pointed to increased customer consolidation within the U.S. land drilling industry as a contributing factor to its financial troubles. Over the past 18 months, the top 15 exploration and production companies in the U.S. grew to control 43% of the rig count across Texas, New Mexico, and Louisiana. By November 2023, this share ballooned to 62%, with the five largest drillers claiming 84% of the market. As a result, ICD’s customer base shrank, and it received six rig release notices from clients in 2024 as a result of this consolidation.
