Houston Oilfield Services Firm Nine Energy Service Seeks Chapter 11 Protection, Aims to Shed $320M Debt

Houston-based oilfield services provider Nine Energy Service Inc. (NYSE: NINE) has initiated a prepackaged Chapter 11 bankruptcy proceeding in a strategic move to slash its debt load and restructure its balance sheet. The filing, made on February 1, encompasses the company's U.S. and Canadian subsidiaries, while its Norwegian operations remain outside the process.

Court documents reveal the scale of the challenge: Nine Energy Service listed approximately $388 million in total funded debt obligations as of the petition date. This stands against reported assets of $340.7 million as of September 30, 2025, highlighting the financial pressure that led to this decision.

Prior to the filing, the company secured a critical agreement with a majority of its debtholders on a comprehensive recapitalization plan. The cornerstone of this restructuring is the elimination of roughly $320 million in senior secured notes, a move expected to reduce the firm's annual interest expense by an estimated $40 million and provide crucial breathing room.

"We have taken this decisive step to strengthen our financial foundation," a company representative stated. "Operations continue without interruption, and we are positioned to emerge as a more competitive and sustainable business." To ensure continuity, Nine has received a commitment for $125 million in debtor-in-possession (DIP) financing from its existing asset-based lender.

The filing underscores the ongoing volatility and challenges within the oilfield services sector, where companies remain vulnerable to shifts in energy prices and capital markets.

Industry Voices React

Michael Thorne, Energy Sector Analyst at Gulf Coast Capital: "This is a textbook 'prepack'—negotiated with creditors beforehand for a faster, less disruptive process. It's a necessary recalibration for Nine to survive the current cycle. The DIP financing is a positive signal of lender confidence in their underlying operations."

Sarah Chen, Portfolio Manager: "While restructuring is tough, it's a responsible path compared to limping along. Shedding $40M in annual interest expense transforms their cash flow profile. They're not the first in this space to take this route, and they likely won't be the last."

Frank Delsa, Former Rig Supervisor: "It's infuriating. More financial engineering while the guys in the field worry about their jobs. This company took on too much debt during the good times, and now it's the employees and smaller vendors who will feel the uncertainty. When do the executives ever file for personal bankruptcy?"

Priya Sharma, Bankruptcy Attorney: "The exclusion of the Norwegian entity is a smart, strategic move. It likely protects a more profitable or stable international arm from the procedural complexities of U.S. bankruptcy court, preserving value for the restructured company."

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