Oilfield services provider Nine Energy Services filed for Chapter 11 protection in a Texas bankruptcy court Monday with a prepackaged plan to cut $320 million of its $388 million in debt with an equity swap.

In its filings, the company said it had reached an agreement with the holders of 70% of its senior notes on the deal, while the provider of its asset-based loan facility had agreed to provide $125 million in Chapter 11 financing that will convert into a $135 million exit facility.

"We look forward to emerging from this process with a healthier financial foundation, well-positioned to offer comprehensive well solutions for many years to come," CEO Ann Fox said in a statement released Monday.

The Houston-based company was founded in 2013 and has approximately 1,100 employees, according to its filings. It provides services for oil and gas drillers, including pouring cement to line well shafts and providing metal tubing for wells.

The company's current funded debt consists of $219.5 million in senior notes and a $68.5 million asset-based facility, according to its filings.

The notes debt is the remaining amount owed on $400 million in notes the company had taken out in 2018 to acquire Magnum Oil Tools International, it said.

Magnum owned a number of proprietary technologies that were considered critical to Nine Energy's long-term success, but the company has since faced difficulties servicing the debt, Chief Financial Officer Guy Sirkes said in a declaration filed Monday.

Since then, the company's liquidity has been strained by the sharp drop in oil demand caused by the COVID-19 pandemic and the volatility of the energy market in the years since then, which combined with an unfriendly capital market has made refinancing impossible, Sirkes said.

As a result, the company began to look at restructuring options and began talks with an ad hoc noteholder group in November, he said. The result was a restructuring support agreement with the holders of 70% of the note debt to support a plan that will convert the note debt to 100% of the equity of a reorganized Nine Energy, he said.

The asset-based loan lender also agreed to provide $125 million in debtor-in-possession financing consisting of $56.5 million in new money and a rollup of the prepetition ABL debt. The DIP facility will convert into a $135 million ABL facility post-bankruptcy.

The debtor has retained Moelis & Co. as its investment banker and FTI Consulting as its financial adviser.

Nine Energy is represented by John J. Kane, Kyle Woodard, JaKayla J. DaBera and Michael P. Ridulfo of Kane Russell Coleman Logan PC, and Chad J. Husnick and Ross J. Fiedler of Kirkland & Ellis LLP.

The case is In re: Nine Energy Service et al., case number 4:26-bk-90295, in the U.S. Bankruptcy Court for the Southern District of Texas.