Noble Corp. plc, one of the top offshore drilling rig experts in the world, has secured a restructuring support agreement to eliminate all bond debt and reorganize via Chapter 11.

Subsidiaries of the London-based operator filed Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of Texas in Houston. The company expects to emerge from bankruptcy before year’s end.

“Along with many other businesses in our industry, Noble has been affected by the severe downturn in commodity prices, which has been compounded by the Covid-19 pandemic,” CEO Robert Eifler said. “After many months exploring our strategic options, we concluded that a substantial deleveraging transaction implemented through a Chapter 11 filing, supported by our largest creditors, provides the best outcome for Noble and our stakeholders.

“Our improved balance sheet and liquidity position will enable us to further invest in our assets, customer relationships and our people.”

Noble through its subsidiaries performs contract drilling services with a fleet of 24 offshore drilling units that consist of 12 drillships and semisubmersibles, as well as 12 jackups. The global operator primarily works on ultra deepwater and high-specification jackup drilling.

The restructuring is designed to eliminate more than $3.4 billion of debt. Major bondholders also agreed to invest $200 million through second lien notes. Noble expects to emerge with an enhanced liquidity position supported by a $675 million secured revolving credit facility. 

“Noble plans to continue to operate as normal and without interruption for the duration of the restructuring and will continue to pay employee wages and health and welfare benefits as well as vendors in the normal course,” management said.

Houston-based contract driller Diamond Offshore Drilling Inc., which has 11 semisubmersibles and four dynamically positioned drillships, sought bankruptcy protection in late April. 

With the pandemic compressing energy demand, the oilfield services (OFS) sector has been sharply impacted as exploration and production (E&P) customers have retreated. Many Lower 48 E&P operators have filed for Chapter 11, and a host of OFS operators also are seeking protection.