Texas fracking services provider FTS International Inc. (NYSE: FTSI) filed for Chapter 11 bankruptcy Tuesday, citing slumping oil and gas prices caused by a severe dropoff in demand during the coronavirus pandemic.
Fort Worth-based FTS International listed assets totaling $517.2 million and debts totaling $535.3 million. The company filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of Texas in Houston.
In its Chapter 11 filing, FTS noted between 200 and 999 creditors. The company’s funded debt obligations totaled $446.7 million, according to FTS CFO Lance Turner in the filing.
FTS International and two of its subsidiaries, FTS International Services LLC and FTS International Manufacturing LLC, “will continue to operate in the ordinary course of business during the restructuring, supported by the consenting creditors’ agreement to allow the company to use existing cash to fund the Chapter 11 cases,” the company said in a release.
The company’s cash balance was $161 million as of Sept. 18. FTS International’s operating revenue was $776.6 million for 2019, and the company currently employs 600 people.
Significant shareholders of FTS include Maju Investments at 38.9%, Chesapeake Energy Holdings at 20.1% and Senja Capital at 11.1%.
Slumping energy prices caused by the pandemic have translated to layoffs and bankruptcies across the oil and gas services industry. Since March, Chesapeake Energy, Tin Cup Water Solutions, Sun Coast Resources, Smith Industries, UTLX Manufacturing and Schlumberger have all reported layoffs.
FTS International operates 1,117 trucks with 578 drivers, according to the Federal Motor Carrier Safety Administration. In April, FTS announced it was furloughing 59 employees at a facility in Longview, Texas.
“This furlough, resulting from unforeseeable business circumstances, will last at least six months and may turn into a permanent separation from employment,” FTS officials said in a Worker Adjustment and Retraining Notification to the Texas Workforce Commission.
Founded in 2002 as Frac Tech by brothers Dan and Farris Wilks, FTS International is one of the largest well completion companies in North America and a provider of customized hydraulic fracturing solutions.
In 2011, the Farris brothers sold their shares in the company to a group of investors, who changed the name to FTS International and took the company public.
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