Basic Energy Services Inc. is once again seeking voluntary bankruptcy protection and plans to sell off a substantial portion of its Lower 48 assets.

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Hit by the oil price rout in 2015 and 2016, the Fort Worth, TX-based oilfield services operator successfully emerged from voluntary bankruptcy five years ago. After Covid-19 bashed energy demand last year, Basic shrank its Lower 48 business to three segments from five.

The latest restructuring would give Basic the ability to sell assets in separate transactions to Axis Energy Services Holding LLC, Berry Corp. and Select Energy Services Inc. Basic filed for Chapter 11 in U.S. Bankruptcy Court for the Southern District of Texas in Houston (No. 21-90006).

“We believe the asset purchase agreements will enable us to maximize the value of our businesses and create the best path forward for our customers, partners, employees and the communities we serve,” said CEO Keith Schilling. “The company has faced extraordinary challenges as a result of the Covid-19 pandemic, and we thank the Basic team for their ongoing hard work and dedication as we continue to provide our customers outstanding service, experienced crews and a wide range of safe and efficient production services.”

Basic has operations in all of the major producing basins of the Lower 48. It provides services to more than 2,000 oil and gas companies. 

Axis agreed to acquire nearly all of Basic’s assets within the Well Servicing unit and the Completion and Remedial business that are not in California. Berry said it would buy most of the assets in California. Select wants to buy the Water Logistics assets outside of California, including Agua Libre Midstream LLC.

To facilitate the sales, Basic filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. The transactions with Axis, Berry and Select are serving “as the ‘stalking horse’ bidders in the court-supervised sale process,” Basic officials said. “Accordingly, the proposed transactions are subject to higher and better offers, among other conditions.”

In the bankruptcy court filing, Basic provided a consolidated list of creditors with the 30 “largest unsecured claims.” The list is led by the Internal Revenue Service, which has a $7.86 million claim regarding payroll taxes. A $4.74 million claim by Howard Supply Co. regards material and supplies.

Basic’s management team said it “remains focused on serving customers and fully expects to continue operating without interruption, including paying its employees, during the court-supervised process.”
If other qualified bids are submitted during the court-supervised process, Basic may hold an auction “with the agreements with Axis, Berry and Select setting the floor for the auction processes.”

Basic also noted that it has a $35 million debtor-in-possession commitment from Guggenheim Credit Services LLC. With court approval, “this new financing, together with cash generated from the company’s ongoing operations, is expected to provide sufficient liquidity to support the Company during the court-supervised process,” management said.