VIEW FROM THE TOP
RESTRUCTURING FOR OPTIMUM PERFORMACE MATT MCCARROLL President and CEO of Fieldwood Energy
Q: Fieldwood has been restructuring. What is the current
flow, so the business has never been stronger. We are going
state of the company?
on the offensive again.
A: The company has never been in a better situation. We have been in business now for four and half years and we
At this moment, we are putting two rigs to work on the
have a very profitable operation, with our only challenge
US side of the Gulf of Mexico. We have another rig coming
being that we had too much debt. We had an overleveraged
this summer so we are going to get back to drilling. We are
balance sheet, consisting of the debt we incurred initially
going to increase our US capital budget by over five times
when we made acquisitions from Apache Corporation and
from 2017 to 2018. We are going to be a much more active
Sandridge Energy in 2013 and 2014, when prices were at
company with the ability to fund our Mexico operations
US$100/b.
in development. All in all, it is a great outcome. We are bringing on a world-class deepwater team to manage
For that reason, we started discussions last fall with all our
Noble Energy’s assets and we are very excited that we
stakeholders and finalized agreements to equitize over
will be drilling deepwater wells on the US side of the Gulf
US$1.6 billion of debt. We raised US$525 million of new
of Mexico.
capital and we simultaneously closed the acquisition of the entirety of Noble Energy’s deepwater assets in the Gulf of
Q: What is your perspective on how the licensing rounds
Mexico. The restructuring means we have gone from being
have progressed, and what does it mean for the players
five times overleveraged to 1.5 times and we have significant
you have seen entering the market?
liquidity as well as 40 percent more production. We have
A: There has been a lot of bidding activity but not much
done this with the support of 100 percent of our lenders
well drilling and construction activity. The only companies
and stakeholders.
that have ever actually drilled wells are winners from Round 1.1 and 1.2: Talos Energy, Pan American Energy, ENI
The only worrying factor to people who do not understand
and ourselves. There is a lot of activity to come. I think a
the process is that in the US, a Chapter 11 process is the
legitimate question is whether or not the regulatory process
most expedient way to effectuate a restructuring, even
and the administrative process within government agencies
though it may be possible to do it out of court. The word
such as the Ministry of Energy, CNH and ASEA can handle
“bankruptcy” scares many people, but in our case, we got
the volume of work that is coming.
in and out of bankruptcy in only 45 days. We restructured and emerged from the process in great shape but most
We know how long it took for us to get permits to drill
important to our management team, all our vendors, all the
and to get our appraisal plan approved and that was
government agencies, all our partners and all our employees
only with four operators. Now there will be more than 73
and contractors continued to be paid throughout.
operators and the volume of work and permitting is going
Essentially, business continued as usual. We always had
to be dramatically higher. We are all getting better over
plenty of money to run the company, we just needed to
time as CNH and ASEA gain a greater understanding of the
restructure our balance sheet. Now we have accomplished
processes. But the process will really have to pick up speed
that and we have emerged a much stronger company.
or it is going to hit some bumps.
Q: What does this resolution mean for the company in the medium term?
Fieldwood Energy is privately held and among the 10 largest
A: We have cut our annual interest payments by
operators in the Gulf of Mexico, with production exceeding
approximately 50 percent and we reduced our debt by
130,000 boe per day from 1,000 wells across 2 million acres of
about 50 percent. We increased our assets and our cash
shallow and deepwater leases in the Gulf
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