Published on May 24, 2017
Right-sizing, Refinancing & Selling Oil & Gas Companies
The precipitous drop in oil prices from January 2014 to January 2016 and continued suppressed pricing has turned countless companies upside-down. At Stapleton Group, we are right-sizing, refinancing and selling oil & gas producers and their service vendors to achieve the best possible recoveries for lenders and other stakeholders.
Here are 3 examples of recent engagements:
Receivership of Oil & Gas Service Provider
Management of a national provider of well-testing and wireline services for oil wells failed to adjust operations when demand fell, causing severe cash flow shortfalls. As receiver, we maximized the recovery for the company’s multiple lenders and preserved the business as a going-concern by: quickly negotiating a take out of the senior secured lender; restructuring operations; and, negotiating an asset sale with the acquirer hiring the company’s employees.
As Federal Regulatory Receiver, we successfully turned around a severely mismanaged oil & gas company. Numerous obstacles were overcome in transforming the insolvent business to cash flow positive through capital improvements, operational improvements and creditor negotiations. We are in the process of preparing the company for sale to salvage a return for the company’s stakeholders.
Financial Advisor to Electrical Engineering Company
The sharp decline in oil prices dramatically reduced demand for the company’s services from oil producers. Expense reductions to right-size the business were not fast and deep enough, and the company’s senior lender lost faith in management’s financial projections. We negotiated a forbearance with the lender to buy time for due diligence and a refinancing or sale. We succeeded in getting the incumbent lender to refinance the company based on our defensible cash flow projections.
Contact us to learn more about our oil & gas sector expertise and services.