Houston-based drilling expert Superior Energy Services is to emerge debt-free from bankruptcy after its plan of reorganization received court approval.

The U.S. Bankruptcy Court for the Southern District of Texas confirmed the reorganization plan, which allows Superior to convert into equity an estimated $1.3 billion in debt.

“This confirmation order marks a key milestone in the company’s reorganization process, and we look forward to emerging in the near future with a strengthened capital structure and greatly improved ability to compete,” said CEO David Dunlap. 

The global oilfield services operator filed for Chapter 11 protection last September, joining scores of other energy firms that succumbed to the devastating impact on demand and spending wrought by Covid-19.

The restructuring proposal was filed in December. 

Debtholders with 85% of the $1.3 billion in senior unsecured notes had given approval to the plan to receive 100% of the issued equity.

Ahead of its bankruptcy filing last year, Superior said U.S. land revenue in 2Q2020 totaled $55 million, down 59% sequentially and 72% under 2Q2019 revenue. Also in 2Q2020, U.S. offshore revenue decreased 27% sequentially and 29% year/year to $58.6 million. In addition, international revenue of $70.3 million was down 34% from 1Q2020 and 22% below the 2Q2019 results.

Ducera Partners LLC and Johnson Rice & Company LLC are Superior’s financial advisers. Latham & Watkins LLP and Hunton Andrews Kurth LLP are acting as legal counsel, while Alvarez & Marsal is serving as restructuring adviser.