Deepwater drilling rig operator Seadrill Partners has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court in Houston due to the crash of oil prices as a result of the Covid-19 pandemic.
The bankruptcy protection is aimed at helping the company restructure its debt load.
The wider oil drilling rig group Seadrill owns 35% of Seadrill Partners.
Oil price crash in 2014 cut demand for rigs and triggered restructuring at the Seadrill group. In 2018, Seadrill emerged from bankruptcy after converting ‘billions of dollars of bonds into equity’. However, the group’s bank debt still remained.
In September, the Seadrill group suspended its own interest payments after failing to agree revised terms for $5.7bn of bank debt.
In a press statement, Seadrill Partners stated: “The company intends to use the bankruptcy process to ensure that all customer, vendor and employee obligations are met without interruption and to complete a consensual restructuring of its debt.”
The drilling rig operator noted that its filing was supported by a group of lenders under the company’s ‘Term Loan B credit facility’, allowing Seadrill to remain in operation during court proceedings.
Seadrill Partners owns four drillships, four semi-submersible drilling rigs as well as three tender rigs, all operated by Seadrill.
In August, Oklahoma-based oil driller Chaparral Energy filed for Chapter 11 bankruptcy protection due to the crash of oil prices.