8-K: Nine Energy Service Delisted, Secures $125M DIP Financing

Nine Energy Service, Inc. has been delisted from the NYSE following its Chapter 11 filing, but secured a $125 million debtor-in-possession credit facility to maintain operations.

Summary

• Nine Energy Service, Inc. and certain subsidiaries filed voluntary Chapter 11 petitions on February 1, 2026, in the U.S. Bankruptcy Court for the Southern District of Texas to implement a prepackaged reorganization plan.
• The Bankruptcy Court approved a senior secured super-priority asset-based debtor-in-possession (DIP) credit facility of up to $125 million on an interim basis on February 3, 2026, provided by White Oak Commercial Finance, LLC and its affiliates.
• This DIP ABL Facility includes a roll-up or refinancing of all obligations under the prior Loan and Security Agreement dated May 1, 2025, where approximately $66,850,159.07 in revolving loans and $1,661,064.66 in letters of credit were outstanding.
• The New York Stock Exchange (NYSE) suspended trading and commenced delisting proceedings for Nine Energy Service's common stock on February 2, 2026, due to the Chapter 11 filing.
• The NYSE filed a Form 25 with the SEC on February 5, 2026, to delist the common stock, with deregistration effective 90 days or less after filing.
• The DIP Loan and Security Agreement includes terms for conversion to an exit senior secured asset-based revolving credit facility (Exit ABL Facility) of up to $135 million upon the effective date of the Chapter 11 Plan.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a significantly negative event due to the Chapter 11 filing and NYSE delisting, which typically result in substantial shareholder value destruction. While the DIP financing provides necessary liquidity for operations, it is a measure taken in distress.

Positives

• Secured a $125 million senior secured super-priority asset-based debtor-in-possession (DIP) credit facility to provide liquidity and support ongoing operations during the Chapter 11 process.
• The DIP facility includes a roll-up or refinancing of existing prepetition ABL obligations, providing continuity for prior lenders.
• A clear path to emergence from bankruptcy is outlined with the expectation of converting the DIP facility into a $135 million Exit ABL Facility upon the Chapter 11 Plan's effectiveness.
• The NYSE delisting will not affect business operations or SEC reporting requirements, allowing the company to focus on reorganization.

Negatives

• The company and certain subsidiaries filed for voluntary Chapter 11 bankruptcy, indicating significant financial distress.
• The company's common stock has been delisted from the New York Stock Exchange, leading to a loss of public market access and liquidity for shareholders.
• The company faces increased legal and professional costs associated with the Chapter 11 reorganization process.
• Existing prepetition ABL obligations totaling approximately $66,850,159.07 in revolving loans and $1,661,064.66 in letters of credit are being addressed through the bankruptcy process.

Risks

• Uncertainty regarding the company's ability to obtain court approval for motions or requests throughout the Chapter 11 Cases.
• Risk that the company may not be able to consummate a plan of reorganization.
• Potential negative effects of the Chapter 11 Cases on the company's liquidity, results of operations, or business prospects, including increased professional costs.
• Risks associated with third-party motions in the Chapter 11 Cases and the general outcome of the proceedings.
• Conditions for the conversion to the Exit ABL Facility may not be satisfied for various reasons, including those outside the company's control.
• Fluctuations in capital spending and well completions by the onshore oil and natural gas industry, influenced by geopolitical and economic developments, inflation, tariffs, and supply chain constraints.
• Challenges in attracting and retaining key employees, technical personnel, and other skilled workers.
• Inability to maintain existing prices or implement price increases on products and services due to intense competition, particularly for dissolvable plug products.
• Inherent risks in the oilfield services industry, such as equipment defects, liabilities from accidents, explosions, uncontrollable flows of gas or well fluids, and loss of well control.
• Difficulties in implementing and commercializing new technologies, services, and tools, or growing the completion tool business domestically and internationally.
• Adequacy of capital resources and liquidity, and the ability to manage capital expenditures.
• Inability to accurately predict customer demand, including that of international customers.
• Loss of, or interruption or delay in operations by, one or more significant customers or key suppliers.
• Incurrence of significant costs and liabilities resulting from litigation, including the ongoing Royalty Litigation.
• Cybersecurity risks and changes in laws or regulations regarding health, safety, and environmental protection.

Future Outlook

The company expects to continue operating its business during the Chapter 11 Cases, supported by the new DIP ABL Facility. The prepackaged Chapter 11 plan anticipates the conversion of the DIP ABL Facility into a $135 million Exit ABL Facility upon the plan's effective date, aiming for a successful reorganization and emergence from bankruptcy.

Management Comments

• The Company Parties filed voluntary petitions under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of Texas to implement a prepackaged chapter 11 plan of reorganization.
• The deregistration of the common stock under Section 12(b) of the Securities Exchange Act of 1934, as amended, will be effective 90 days, or such shorter period as the SEC may determine, after filing of the Form 25.
• Such delisting will not affect the Company's business operations or change its reporting requirements under the rules of the SEC.
• The terms of the Exit ABL Facility are expected to be consistent with the Exit ABL Term Sheet attached as Exhibit D to the Restructuring Support Agreement.

Industry Context

StockSavvy.ai notes that the oilfield services sector has faced significant volatility, and Chapter 11 filings are not uncommon for companies seeking to restructure debt and optimize operations in challenging market conditions. The securing of a DIP financing facility is a critical step for distressed companies like Nine Energy Service, Inc. to maintain operations and instill confidence among customers and suppliers during the reorganization process. The planned conversion to an Exit ABL Facility aligns with typical prepackaged bankruptcy strategies aimed at emerging with a more sustainable capital structure. The delisting from the NYSE, while a negative for public shareholders, is a standard consequence of such filings and allows the company to focus on its internal restructuring without the immediate pressures of public market listing requirements.

Comparison to Industry Standards

• DIP financing, such as the $125 million facility secured by Nine Energy Service, is a standard and often essential mechanism for companies undergoing Chapter 11 reorganization. It provides critical liquidity to maintain operations, pay employees, and manage suppliers, similar to facilities provided to other distressed energy sector companies like McDermott International or Weatherford International during their respective bankruptcies.
• The delisting from the NYSE is a common outcome for companies filing for Chapter 11, as they typically fall out of compliance with listing standards (e.g., minimum share price, market capitalization). This is consistent with the experiences of other companies that have entered bankruptcy, such as Frontier Communications or Chesapeake Energy, which subsequently traded on over-the-counter markets.
• The prepackaged Chapter 11 plan and the anticipated conversion to a $135 million Exit ABL Facility are standard components of a structured bankruptcy process, aiming to provide a stable, long-term capital structure upon emergence. This approach is often favored for its efficiency compared to traditional bankruptcies, as seen in the reorganizations of companies like Seadrill or Valaris.

Corporate Governance

Legal Proceedings

• Voluntary petitions filed under Chapter 11 of the U.S. Bankruptcy Code on February 1, 2026, in the U.S. Bankruptcy Court for the Southern District of Texas (Case No. 26-90295).
• Royalty Litigation: A lawsuit filed on April 8, 2020, in the U.S. District Court for the Western District of Texas (Waco Division) by NCS Multistage Inc. and NCS Multistage, LLC, against the Company regarding alleged infringement of U.S. Patent No. 10,465,445.

Related Party Transactions

• White Oak Commercial Finance, LLC, the agent and a lender for the new DIP ABL Facility, and White Oak ABL 3, LLC and White Oak Europe ABL Limited, the DIP Lenders, were also the agent and lenders under the Prepetition ABL Loan and Security Agreement dated May 1, 2025. This indicates a continuation of the lending relationship with the same financial institutions.

Stakeholder Impact

• Shareholders: Significant negative impact due to the Chapter 11 filing and delisting from the NYSE, likely resulting in substantial dilution or loss of equity value.
• DIP Lenders (White Oak Commercial Finance, LLC and affiliates): Benefit from super-priority administrative expense claims and perfected liens on collateral, providing a high level of security for their new financing.
• Prepetition ABL Lenders (White Oak Commercial Finance, LLC and affiliates): Their existing obligations are rolled up or refinanced into the super-priority DIP facility, providing them with enhanced protection during the bankruptcy.
• Senior Secured Noteholders: Involved in the Restructuring Support Agreement, indicating their claims are subject to the Chapter 11 plan, which will likely involve a restructuring of their debt.
• Employees: Business operations are expected to continue, supported by DIP financing, which aims to ensure payroll and benefits are maintained, reducing immediate job uncertainty.
• Customers and Suppliers: The DIP financing is intended to provide stability and ensure the company can continue to operate in the ordinary course of business, minimizing disruption to customer relationships and supplier payments.

Next Steps

• Obtain Bankruptcy Court approval for the Final DIP Order and Confirmation Order by March 16, 2026.
• Achieve the effective date of the Chapter 11 Plan and consummate all restructuring transactions by March 31, 2026.
• Convert the DIP ABL Facility into the Exit ABL Facility upon the effective date of the Chapter 11 Plan.
• The common stock will be deregistered from the NYSE, effective 90 days or less after the Form 25 filing.
• Continue operating the business under Chapter 11 protection.

Key Dates

Recommendation

The Chapter 11 bankruptcy filing and subsequent delisting from the NYSE represent a severe negative event for existing equity holders. While the DIP financing provides operational liquidity, it is a measure taken in distress, and common shareholders typically face significant, if not total, loss of investment value in such reorganizations. The stock is highly speculative and carries extreme risk.

Keywords

Chapter 11, Bankruptcy, DIP Financing, Delisting, NYSE, Oilfield Services, Reorganization, Asset-Based Lending, Corporate Governance, Risk Management, Nine Energy Service