Nine Energy Service, Inc. and its debtor affiliates filed voluntary Chapter 11 petitions on February 1, 2026, in the United States Bankruptcy Court for the Southern District of Texas, Houston Division, commencing a prepackaged restructuring with support from holders of more than 70% of the company's Senior Secured Notes. The Houston-based oilfield services provider is seeking to deleverage its balance sheet through a 100% equitization of approximately $319.5 million in Senior Secured Notes while preserving approximately 1,100 jobs and leaving general unsecured creditors unimpaired.
Company Background and Business Operations
Nine Energy Service is a publicly traded company listed on the New York Stock Exchange under the symbol "NINE" that provides completion solutions for unconventional oil and gas resource extraction across North America. The company operates through four main business segments serving exploration and production customers: Cementing (approximately 37% of revenue), Wireline Services (approximately 21% of revenue), Coiled Tubing (approximately 18% of revenue), and Completion Tools (approximately 24% of revenue).
Headquartered in Houston, Texas, the company employs approximately 1,100 full-time employees and engages approximately 30 independent contractors. The company maintains operations across all major onshore basins in the United States and Canada, with additional research and development facilities in Norway serving international markets.
Corporate History and Strategic Acquisitions
The company was formed in 2013 through a merger of three energy service companies owned by SCF Partners, L.P. and its affiliates: Northern States Completions, Integrated Production Services (Canada), and CDK Perforating (US). Following the merger, the company expanded through a series of strategic acquisitions, including Peak Pressure Control, Crest Pumping Technologies, Dak-Tana Wireline, G8 Oil Tool, and Beckman Production Services, Inc. in 2017.
In January 2018, the company completed an initial public offering with J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC, and Wells Fargo Securities, LLC acting as joint book-running managers. The IPO raised approximately $169.5 million in net proceeds, which the company used to commence operations as a public company, repay existing financing facilities, expand customer relationships, and further expand service offerings.
A pivotal transaction occurred on October 25, 2018, when the company acquired all equity interests of Magnum Oil Tools International, LTD. and certain affiliates. The Magnum Acquisition augmented the company's completion tools segment by adding proprietary downhole completions consumables products, including specialized components such as frac plugs, disk subs, and other bespoke parts. The company financed this acquisition by issuing $400 million in aggregate principal amount of 8.750% senior unsecured notes due 2023.
In August 2019, the company divested its production solutions segment through the sale of interests in wholly owned subsidiary Beckman Holding Production Services, LLC, which provided $17.1 million in cash.
Events Leading to the Bankruptcy Filing
The declaration notes that the company commenced the Chapter 11 cases primarily to address two related challenges: an over-leveraged balance sheet that constrained liquidity and limited operational flexibility, and industry headwinds that tightened already slim margins.
Liquidity Constraints and Industry Challenges
Shortly after the Magnum Acquisition, multiple industry headwinds challenged the company's operations and amplified the effect of its over-leveraged balance sheet. The COVID-19 pandemic triggered a decline in demand for oil and other energy resources as international travel fell to record lows. Oil and gas market activity levels decreased by 50% during the COVID-19 period, causing pricing pressures that decreased the company's revenue, strained liquidity, and exacerbated the effects of newly increased funded debt obligations.
Energy prices remained volatile in subsequent years. The first quarter of 2021 saw oil and natural gas prices rebound from the COVID-19 trough, steadily increasing throughout 2021 and remaining supportive into 2022. Oil prices reached a 13-year high in March 2022, primarily as a result of the conflict between Russia and Ukraine. However, in late 2022, due to the rise in interest rates, economic uncertainty, and fears of recession, oil prices began to decline.
The declaration notes that in 2024, natural gas price averages fell by over 60% compared to 2022 prices. Oil prices continued to fall towards the end of 2024, and the imposition of tariffs in April 2025 led to increased costs for critical raw materials such as steel, aluminum, and other manufactured components, creating further headwinds for the energy industry.
Cash interest payments for the 2023 Notes came due twice each year, forcing the company to consistently absorb material interest expenses and expend a considerable amount of available liquidity.
Refinancing Challenges
As the maturity date for the 2023 Notes neared, the company began exploring options to refinance existing funded debt. Market conditions limited the company's options and lenders demanded more expensive borrowing terms. As a result of the impending maturity and the company's diminished liquidity position, the company was forced to refinance the maturing unsecured 2023 Notes through a transaction that both added to the company's secured debt and increased the interest rate.
In January 2023, the company issued the Senior Secured Notes to fund the redemption of the 2023 Notes and amended the 2018 ABL Credit Facility to extend the maturity date and facilitate the issuance of the Senior Secured Notes. While these transactions enhanced the company's liquidity position and provided additional runway to analyze and develop long-term solutions, they were expensive debt facilities that continued to burden the company's balance sheet. The company further refinanced and replaced the 2018 ABL Credit Facility via the Prepetition ABL Facility on May 1, 2025.
The combination of recent 2023 and 2025 refinancing transactions, high interest rates, and market activity demanding more strenuous terms rendered a regular-way deleveraging transaction untenable. Oil prices and customer demand are both projected to remain stagnant in 2026, minimizing opportunity for additional organic liquidity, making out-of-court deleveraging options impracticable.
Industry Consolidation Pressures
The declaration describes how industry consolidation caused additional economic hardship. Oil and gas businesses commonly gain market leverage by increasing the scale of operations through strategic mergers and acquisitions. As the company struggled to keep up with debt service, the oil and gas industry experienced consolidation and technological advancement, especially with respect to the company's customer base.
The trend towards larger, centralized well development companies that utilize fewer, more technically complex wells limited the number of potential customers. The number of rigs operating in the Haynesville basin declined by 30% between 2023 and 2024. Many oil and gas companies successfully restructured to reduce their leverage profiles towards leaner operations better suited to current market environments. The company, by comparison, remained at a competitive disadvantage.
Investors and market participants began to view North American oil and gas production with increased skepticism, often assigning flat or less optimistic outlooks to pricing and production. This contributed to a reduction in the establishment and deployment of oil rigs, which precipitated a reduction in the number of wells being developed, resulting in fewer opportunities to offer well completion services.
NYSE Non-Compliance
On October 21, 2024, the company received notice from the NYSE that it no longer satisfied continued listing standards because its average global market capitalization was less than $50 million over a consecutive 30 trading-day period and, at the same time, its last reported stockholders' equity was less than $50 million. On April 30, 2025, the company received another notice from the NYSE that it no longer satisfied continued listing standards because the average closing share price of its common stock was less than $1.00 over a consecutive 30 trading-day period. As of the Petition Date, the company is still not in compliance with the NYSE continued listing standards but continues to actively work towards compliance.
Capital Structure and Funded Debt
As of the Petition Date, the company's funded debt totaled approximately $388.0 million, consisting of two principal obligations:
Prepetition ABL Facility
The company entered into a new ABL Credit Agreement on May 1, 2025, with White Oak ABL 3, LLC, as administrative and collateral agent, and White Oak Europe ABL Limited. The Prepetition ABL Facility provides for a senior secured revolving credit facility in an aggregate principal amount of up to $125 million, subject to a borrowing base. As of the Petition Date, approximately $68.5 million is outstanding under the Prepetition ABL Facility, including approximately $1.7 million in letters of credit.
The Prepetition ABL Facility is secured by a first-priority security interest in substantially all assets of the company and its U.S. and Canadian subsidiaries, subject to the first-priority liens granted in favor of Senior Secured Noteholders in Notes Priority Collateral. ABL Priority Collateral includes, among other collateral, all Accounts, Inventory, Controlled Accounts, Chattel Paper, Documents, Instruments, and all General Intangibles (other than equity interests in subsidiaries and intellectual property, which constitute Notes Priority Collateral).
The maturity date for the Prepetition ABL Facility is the earlier of May 1, 2028, and the date that is 91 days prior to the maturity of the Senior Secured Notes. The Prepetition ABL Facility bears interest at a rate per annum ranging from SOFR + 4.00% to SOFR + 4.50%, based on the then applicable Fixed Charge Coverage Ratio. The Prepetition ABL Facility replaced the company's prior ABL facility, the 2018 ABL Credit Facility.
Senior Secured Notes
On January 30, 2023, the company entered into an indenture providing for the issuance of $300 million aggregate principal amount of 13.000% Senior Secured Notes due 2028, with U.S. Bank Trust Company, National Association, as trustee, collateral agent, paying agent, and registrar. The Senior Secured Notes are secured by a first-priority security interest in substantially all assets of the company and its U.S. subsidiaries, subject to the first-priority liens granted in favor of the Prepetition ABL Agent in ABL Priority Collateral.
As of the Petition Date, approximately $319.5 million is outstanding under the Senior Secured Notes, including approximately $19.5 million in accrued interest. The Senior Secured Notes mature on February 1, 2028, and accrue interest at a rate per annum equal to 13.000% cash payable on February 1 and August 1 of each year.
Letters of Credit
The company maintains three letters of credit totaling approximately $2.7 million. One letter of credit secures the company's obligations to WEX, Inc., administrator of the company's fuel card program for employee travel between work sites. The company is also subject to two letters of credit in connection with ongoing litigation. The company posted a $775,000 supersedeas bond in connection with a patent infringement lawsuit involving its Breakthru Casing Flotation Device, which is secured by a letter of credit issued by JPMorgan Chase Bank, N.A., to Trisura Insurance Company. Wells Fargo has also issued a separate letter of credit covering supplemental damages, ongoing royalties, and interest ordered by the trial court judge in connection with the litigation. The total outstanding amount for the letters of credit securing the bond and supplemental amounts is approximately $2.44 million.
Equity Structure
The company is publicly traded, and shares of common stock, par value $0.01 per share, trade on the NYSE under the symbol "NINE." The company's certificate of incorporation authorizes the board of directors to issue 120 million shares of common stock. As of the Petition Date, approximately 43,326,339 shares of common stock were outstanding.
The Restructuring Plan and Support Agreement
In November 2025, the company and its advisors engaged an ad hoc group of holders of the company's Senior Secured Notes, who had organized with Milbank LLP as counsel and Houlihan Lokey Capital, Inc. as financial advisor. The company submitted a non-binding proposal to the restricted members of the Ad Hoc Group for a comprehensive deleveraging transaction to be effectuated through a quick, prepackaged chapter 11 plan.
In parallel, the company engaged with the Prepetition ABL Lenders on the terms of a financing package to fund both a chapter 11 process and the reorganized company's go-forward operations. Following months of negotiations, the Debtors, the Prepetition ABL Lenders, and members of the Ad Hoc Group holding more than 70% of the claims arising under the Senior Secured Notes entered into a restructuring support agreement on February 1, 2026.
Key Terms of the Restructuring
The restructuring support agreement provides for 100% equitization of the Senior Secured Notes. General unsecured claims will be unimpaired under the plan. The $125 million DIP facility will convert to a $135 million Exit ABL Facility upon emergence.
The restructuring transactions are designed to deleverage the company and provide adequate liquidity upon emergence through the upsized asset-based loan facility. The plan contemplates an accelerated timeline with emergence within 31 days of the Petition Date.
All general unsecured creditors, including the company's key trade vendors, are unimpaired under the plan. The restructuring transactions will preserve over 1,000 jobs and maximize the value of the company for the benefit of all stakeholders.
DIP Financing
The company seeks approval of a $125 million senior secured superpriority asset-based financing facility composed of postpetition access to all commitments under the Prepetition ABL Facility, a roll-up or refinancing of all prepetition ABL obligations upon entry of the Interim DIP Order, and a $5 million sublimit for the issuance of standby letters of credit. The company will also have access to cash collateral subject to a prepetition security interest in favor of the Prepetition ABL Lenders on a consensual basis.
DIP Marketing Process
In the weeks preceding the Petition Date, the company, with the assistance of Moelis & Company, launched a targeted market test process to gauge third-party interest in providing debtor-in-possession financing. The company contacted third parties that specialize in special situation direct lending to solicit interest in extending financing on the timeline and in the quantum required. In total, the company contacted 25 parties and 15 executed confidentiality agreements.
In response, the company received two additional DIP proposals to refinance the prepetition ABL obligations, and the company closely engaged those parties to gauge the potential for securing better terms for chapter 11 financing. No alternative third-party financing was offered on better terms than those proposed under the DIP Facility.
The declaration notes that the DIP Facility is essential to the company's ability to continue operations and administer the chapter 11 cases. Based on the company's forecast, absent the funds available from the DIP Facility, the company would hit a liquidity shortfall in the first week of the chapter 11 cases and would face a value-destructive interruption to business and lose support from key customers, stakeholders, and vendors.
Prepetition Solicitation and Voting
Given the high level of consensus for the restructuring transactions and the need to limit the cost and disruption of the chapter 11 cases, the company intends to proceed through the cases quickly and efficiently. To meet various milestones and minimize the effect of the chapter 11 cases on the company and its businesses, the Debtors successfully launched solicitation prior to the commencement of the chapter 11 cases.
On February 1, 2026, the Debtors commenced service of the solicitation materials, including the Disclosure Statement, the plan, various exhibits, and a ballot to vote to accept or reject the plan, pursuant to sections 1125 and 1126(b) of the Bankruptcy Code on holders of Senior Secured Notes entitled to vote on the plan. The Debtors required that such holders submit their ballots by March 2, 2026. The Consenting Noteholders who hold more than 70% of the claims in Class 4 of the plan—the only voting class—have committed to vote in favor of the plan through the restructuring support agreement.
Independent Investigation
In December 2025, the company, at the direction of the company's independent director, engaged Kane Russell Coleman Logan PC as independent counsel to assist in conducting an independent investigation into any and all potential estate claims and causes of action, including as against related parties of the company arising from the company's prepetition transactions.
The independent director instructed Kane Russell to conduct a thorough review of the company's books and records, transactions, and actions taken prior to the Petition Date. The company provided the independent director with access to documents and personnel, and Kane Russell conducted interviews of current directors, officers, and employees. The declaration notes that the investigation concluded prior to the commencement of the chapter 11 cases. The Debtors intend to provide additional information regarding the investigation and evidentiary support for the plan's various release and exculpation provisions prior to confirmation.
Timeline and Key Dates
The restructuring support agreement and DIP Credit Agreement contain various milestones designed to advance the chapter 11 cases expeditiously. The Debtors are seeking entry of a scheduling order establishing a hearing to approve the Disclosure Statement and confirm the plan 31 days after the Petition Date and emergence the following day, or as soon as practicable thereafter.
Key dates in the restructuring process include:
- February 1, 2026: Petition Date; execution of restructuring support agreement; commencement of voting solicitation
- March 2, 2026: Voting Deadline for holders of Senior Secured Notes
- March 16, 2026: Target date for Court to approve Disclosure Statement and confirm plan
- March 31, 2026: Target Plan Effective Date
Historical dates relevant to the company's capital structure include:
- January 30, 2023: Issuance of $300 million of 13.000% Senior Secured Notes due 2028
- May 1, 2025: Entry into new Prepetition ABL Credit Agreement
- October 21, 2024: Receipt of NYSE non-compliance notice regarding market capitalization
- April 30, 2025: Receipt of NYSE non-compliance notice regarding share price
- November 2025: Engagement with Ad Hoc Group of Senior Secured Noteholders
Professional Representation
The Debtors are represented by Kirkland & Ellis LLP as legal counsel. The company's financial advisors include Moelis & Company and FTI Consulting, Inc. as restructuring advisor.
The Ad Hoc Group of Senior Secured Noteholders is represented by Milbank LLP as legal counsel and Houlihan Lokey Capital, Inc. as financial advisor.
The company engaged Kane Russell Coleman Logan PC as independent counsel to the independent director for purposes of the investigation.
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