Jan 1, 2021   SOURCE: BusinessWire

Pacific Drilling Announces Successful Completion of Balance-Sheet Restructuring and Emergence from Chapter 11 Process

Pacific Drilling S.A. (the “Company”) announced today that the Company and each of its debtor affiliates have emerged from the Chapter 11 process, signaling the successful completion of the Company’s balance-sheet restructuring and the implementation of the Modified First Amended Joint Plan of Reorganization of Pacific Drilling S.A. and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code (the “Plan”) confirmed by the United States Bankruptcy Court for the Southern District of Texas on December 21, 2020.

Pursuant to the Plan, all of the Company’s outstanding common shares were deemed to have no value and will receive no recovery. In accordance with the restructuring transactions contemplated by the Plan, upon emergence, the Company has a new parent company, Pacific Drilling Company LLC, a Cayman Islands limited liability company (the “reorganized Company”), the equity of which is owned by former creditors of the Company and its debtor affiliates.

“We are pleased to reach completion of this process. Having now emerged from Chapter 11 with a fully de-levered balance sheet, we are well positioned to continue to deliver world class drilling services with our fleet of 6th and 7th generation drillships,” said Bernie G. Wolford, Chief Executive Officer of the reorganized Company.

After emergence, the reorganized Company now operates with a substantially de-levered capital structure, due to the elimination of more than $1 billion of funded debt obligations pursuant to the Plan. The reorganized Company has approximately $100 million in cash on hand, and access to an undrawn $80 million senior secured delayed draw term loan exit facility, to support its ongoing operations.

Additional information regarding the restructuring and Chapter 11 proceedings, including the Plan, can be found (i) on the reorganized Company’s website at www.pacificdrilling.com/restructuring, (ii) on a website administered by Prime Clerk LLC, at http://cases.primeclerk.com/PacificDrilling2020, or (iii) via our dedicated restructuring information line at: +1 877-930-4314 (toll free) or +1 347-897-4073 (international). In connection with emergence from the Chapter 11 process, the Company filed with the Securities and Exchange Commission a Form 15 to suspend its duty to file periodic reports under the Securities Exchange Act of 1934.

Advisors

In the Company’s Chapter 11 process, Greenhill & Co. acted as financial advisor, Latham & Watkins LLP and Jones Walker LLP served as legal counsel, and AlixPartners acted as restructuring advisor to the Company. Houlihan Lokey acted as financial advisor and Akin Gump Strauss Hauer & Feld LLP acted as legal advisor to an ad hoc group of noteholders.

About Pacific Drilling

With our best-in-class drillships and highly experienced team, Pacific Drilling is committed to exceeding our customers’ expectations by delivering the safest, most efficient and reliable deepwater drilling services in the industry. Pacific Drilling’s fleet of seven drillships represents one of the youngest and most technologically advanced fleets in the world. For more information about Pacific Drilling, including the Chapter 11 proceedings and the Plan of Reorganization, please visit our website at www.pacificdrilling.com.

Forward-Looking Statements

Certain statements and information contained in this press release constitute “forward-looking statements,” and are generally identifiable by their use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “our ability to,” “may,” “plan,” “potential,” “predict,” “project,” “projected,” “should,” “will,” “would,” or other similar words which are not generally historical in nature. The forward-looking statements speak only as of the date hereof, and we undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

Our forward-looking statements express our current expectations or forecasts of possible future results or events, including from our Chapter 11 proceedings; the appeal filed by Patrick F. Lennon, in his capacity as liquidation trustee of the liquidation trust established in the Chapter 11 cases of Pacific Drilling VIII Limited and Pacific Drilling Services, Inc. (the “Liquidation Trustee”), of the order confirming the Plan (the “Confirmation Order”); the future impact of the COVID-19 pandemic on our business; future financial and operational performance and cash balances; our future liquidity position and future efforts to improve our liquidity position, revenue efficiency levels, market outlook, forecasts of trends, future client contract opportunities, future contract dayrates, our business strategies and plans or objectives of management; estimated duration of client contracts; backlog; expected capital expenditures; and projected costs and savings.

Although we believe that the assumptions and expectations reflected in our forward-looking statements are reasonable and made in good faith, these statements are not guarantees, and actual future results may differ materially due to a variety of factors. These statements are subject to a number of risks and uncertainties and are based on a number of judgments and assumptions as of the date such statements are made about future events, many of which are beyond our control. Actual events and results may differ materially from those anticipated, estimated, projected or implied by us in such statements due to a variety of factors, including if one or more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect.

Important factors that could cause actual results to differ materially from our expectations include: the potential continued impact from our Chapter 11 proceedings; the potential outcome of the Liquidation Trustee’s appeal of the Confirmation Order; evolving risks from the COVID-19 outbreak and resulting significant disruption in international economies, and international financial and oil markets, including a substantial decline in the price of oil during 2020, which if sustained would continue to have a material adverse effect on our financial condition, results of operations and cash flow; changes in actual and forecasted worldwide oil and gas supply and demand and prices, and the related impact on demand for our services; the offshore drilling market, including changes in capital expenditures by our clients; rig availability and supply of, and demand for, high-specification drillships and other drilling rigs competing with our fleet; our ability to enter into and negotiate favorable terms for new drilling contracts or extensions of existing drilling contracts; our ability to successfully negotiate and consummate definitive contracts and satisfy other customary conditions with respect to letters of intent and letters of award that we receive for our drillships; actual contract commencement dates; possible cancellation, renegotiation, termination or suspension of drilling contracts as a result of mechanical difficulties, performance, market changes or other reasons; costs related to stacking of rigs and costs to reactivate a stacked rig; downtime and other risks associated with offshore rig operations, including unscheduled repairs or maintenance, relocations, severe weather or hurricanes or accidents; our small fleet and reliance on a limited number of clients; the effects of the Chapter 11 proceedings on our operations and agreements, including our relationships with employees, regulatory authorities, customers, suppliers, banks and other financing sources, insurance companies and other third parties; the potential adverse effects of the Chapter 11 proceedings on our liquidity, results of operations, or business prospects; and the increased administrative and legal costs related to the Chapter 11 proceedings.