Houston-based Fieldwood Energy LLC and its affiliates are seeking relief under Chapter 11, joining the growing list of U.S. oil and gas operators squeezed by the devastating impact of Covid-19.

The Gulf of Mexico (GOM) giant, a portfolio company of private equity (PE) giant Riverstone Holdings LLC, was formed in 2013. A “comprehensive restructuring” is planned, according to the voluntary petition filed in the U.S. Bankruptcy Court for the Southern District of Texas in Houston.

Fieldwood has the largest footprint of any operator in the shallow Outer Continental Shelf, with stakes in about 500 blocks.

Most of Fieldwood’s exploration and production (E&P) efforts are concentrated in the GOM in water depths of less than 1,000 feet, but it also has deepwater operations and properties onshore Texas and Louisiana. In addition, it also works offshore Mexico

The decision to seek Chapter 11 “reflects the next step in our efforts to respond to the challenging market environment and Fieldwood’s liabilities,” said CFO Mike Dane. “Over the last several months, we have worked collaboratively with numerous important stakeholders to evaluate our options and proactively manage our balance sheet.”

The E&P has a restructuring support agreement in place with lenders allowing it to continue to operate in the normal course of business. It also expects to have enough liquidity to meet financial obligations, including cash on hand and a debtor-in-possession facility from lenders. 

Last month, Chairman/CEO Matt McCarroll stepped down. At the time, Dane formed an executive leadership team with general counsel Thomas R. Lamme and Senior Vice President Gary D. Mitchell, who oversees production. The team is overseeing day-to-day operations until a CEO is named.

“Fieldwood, like many in the oil and gas industry, has dealt with severe challenges this year following the onset of the Covid-19 pandemic and unprecedented commodities market conditions,” board member Bartow Jones said at the time. Jones is co-head of PE at Riverstone Holdings LLC.

McCarroll agreed to serve as a consultant for the coming year and would continue as a senior adviser in connection with the company’s Mexico business. 

The ad hoc group of secured lenders has engaged Davis Polk & Wardwell LLP and Haynes & Boone LLP as legal counsel, as well as Rothschild Global Advisory and Intrepid Partners as its financial advisers.