Frac Sand Companies’ Bankruptcies Add to OFS Sector Troubles
The contraction of the shale sector and its operations such as drilling and completions due to COVID-19 and the drop in oil price has sifted down to the frac sand suppliers.
Frac sand company Vista Proppants and Logistics, Fort Worth, Texas, filed for Chapter 11 bankruptcy protection in June. The sand and logistics service company said in its filing it was “undergoing unprecedented financial distress and operational challenges related to the COVID-19 pandemic.”
Vista secured an $11-million debtor-in-possession credit facility from its senior lenders to cover costs and operations during the restructuring process. It expects to emerge from the Chapter 11 reorganization within 120 days and expects normal operations when the oil and gas industry reports.
Covia, based in Independence, Ohio, and operator of several sand mines in Minnesota and Wisconsin, filed for Chapter 11 bankruptcy protection in June, noting the effects of the pandemic and energy price shocks on its customers. The company entered into an agreement with lenders on a restructuring plan to reduce debt and eliminated more than $1 billion in fixed costs. Its cash reserves of approximately $250 million are expected to provide liquidity to fund operations, support its long-term investment program, and manage the reorganization process.
Another Wisconsin sand mine operator, Hi-Crush, filed for Chapter 11 bankruptcy protection on 12 July. It said it has a prearranged restructuring support agreement with creditors that if completed would allow the company to eliminate approximately $450 million of debt and annual interest expenses of greater than $43 million. It will continue business as usual while it completes its Chapter 11 process, which may take up to 3 months.
ADNOC Subsidiary Awards $324 Million in Contracts To Improve Onshore Operations
Two contracts awarded for flowlines and wellheads at ADNOC’s Abu Dhabi oil fields are expected to be completed in 5 years. A third contract to develop a bypass system for its Jebel Dhanna and Fujairah terminals is expected to be completed in 30 months.
Permian Basin Produced-Water-Recycling Facility Up and Running
Breakwater’s produced-water-recycling facility has the flexibility to recycle, store, or dispose of water. It has already recycled nearly 5 million bbl of produced water in the third quarter of 2020.
China Planning Railway To Transport Vaca Muerta Production
PowerChina said railway plans are moving forward under Argentina’s current administration and China could provide the financing for the $1.2–1.5 billion project.
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12 November 2020
18 November 2020
18 November 2020