Heavily indebted rig operator Paragon Offshore will file for Chapter 11 bankruptcy this weekend.
The Houston-based company announced it has come to terms with creditors on restructuring its $2.7bn of debts. It will cut about $1.1bn of that debt. The parties had been in talks since December.
Paragon had opted not to make a $15.4m bond interest payment last month and that triggered a 30-day grace period before default, so restructuring and bankruptcy were the next logical steps.
Like most others in the offshore industry, Paragon has been hit by the plunge in crude prices, which has seen its clients drastically reduce drilling activity.
