C&J Energy Services

Summary

Investment Banker

Houston, TX

C&J Energy Services (C&J) was a Houston-based oilfield services company that provided a comprehensive suite of well construction, completion, and support services to oil and gas exploration and production companies across North America. Their offerings included hydraulic fracturing, cased-hole wireline, cementing, coiled tubing, rig services, and fluid management, supporting the entire life cycle of a well.

After the merger of C&J’s legacy business with Nabors’ completion and production services, the company tripled in size and increased leverage. However, falling oil prices reduced drilling activity, leading to C&J’s bankruptcy in July 2016.

Carl Marks Advisors was retained to represent the Official Committee of Unsecured Creditors (UCC). Key achievements included negotiating DIP financing terms to protect the Committee’s interests, valuing C&J to support reorganization plan negotiations, and securing a recovery package for the UCC. The package included a cash payment, 7-year warrants for 4% of NewCo equity, and the potential for par recovery based on claims received.

Key Challenges

Oil Industry Cyclical Downturn

Depressed Asset Values

Multi-Party Negotiations

Engagement Highlights

Following C&J’s bankruptcy filing in July 206, Carl Marks was retained to represent the Official Committee of Unsecured Creditors (the “UCC” or the “Committee”).
Engagement highlights include:
- Negotiated and analyzed the need for obtaining DIP financing; reached an agreement with the debtors and lenders to modify certain terms that previously prejudiced the Committee’s interest.
- Performed a valuation of C&J, analyzing its financial position and business plan, its competitors, industry research, and market outlook, to assist in negotiations of the proposed terms of a plan of reorganization.
- Successfully negotiated a recovery package for the Committee significantly above initial expectations. The GUC class received a cash payment plus 7-year warrants exercisable into 4% of newco equity.
- The GUC class expects par recovery (pending on claims received).

C&J Energy Services

Summary

Investment Banker

Key Challenges

Engagement Highlights

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