Geokinetics Inc. Chapter 11 Bankruptcy

[Geokinetics Inc. 4:2018bk33410]

Published: June 29, 2018

Geokinetics Inc., a corporation that provides seismic data services to the oil and gas exploration sector, filed its second Chapter 11 bankruptcy case in the previous 8 years this week. Headquartered in Houston, TX, Geokinetics Inc. is one of the largest independent land and seafloor geophysical companies on the planet. The company’s survey library consists of more than 7,000 square miles of 3D data spanning conventional and unconventional oil and gas plays across North America, as well as Mexico and Brazil. Geokinetics owes an estimated $10,000,001 to $500 million in liabilities to 200 to 299 different creditors.

Geokinetic’s Previous Bankruptcy

This isn’t the first time that Geokinetics Inc. has run into financial issues. The company filed for Chapter 11 bankruptcy protection in the first half of 2013. Geokinetics was able to successfully exit Chapter 11 with the assistance of a $75MM asset-based loan from Wells Fargo. The company’s bankruptcy reorganization involved repayment of a $50 million secured credit facility, the conversation of $300 million of secured notes into a new class of common stock, and a $25 million debtor-in-possession credit facility.

SAExploration Seeks Bankruptcy Assets

Geokinetics stated in its voluntary petition for Chapter 11 bankruptcy protection filed with the US Bankruptcy Court for the Southern District of Texas that its estimated assets are in the $10,000,001 to $50 million range. Consequently, another global seismic services company located in Houston, TX hopes to purchase certain assets out of the Geokinetics bankruptcy. SAExploration, which had its own share of financial issues in 2014, has placed an asset purchase agreement with the Bankruptcy Courts to obtain permission to buy certain contracts, equipment, machinery, and seismic processing software and equipment from Geokinetics.

Oil & Gas Bankruptcies Down

In a time when the oil and gas sector in America is just now beginning to stabilize, companies are still feeling the effects of the record low crude prices that battered energy companies in 2016. During that year, more than 100 North American oil and gas companies filed for bankruptcy. While the number of annual bankruptcies from E&P Companies has subsided, some experts feel that this year is the aftershock that could be just now arriving at the services side of the business. The news of Geokinetic’s recent Chapter 11 declaration, has no doubt caused many CFOs in the industry to give a second thought to their debt load.