Gasfrac Energy Services Inc. has filed for protection from creditors after the struggling drilling company failed to find a buyer or attract new customers as oil and gas markets sputtered.
Gasfrac, known for its unique waterless rock fracturing technology, said on Friday it filed for court protection under the Companies' Creditors Arrangement Act. The move comes two months after it hired financial advisers to seek out strategic options, including a sale.
The company said in a statement that it is unable to meet its financial obligations due to negative operating results, limited access to new capital, the slowdown in the energy industry and the absence of a buyer for its assets.
The stock was halted on on the Toronto Stock Exchange Friday. It last traded at 27.5 cents, down from $1.99 in May, after activist investor Julien Balkany, chief investment officer of Nanes Balkany Partners LLC, took a sizable stake and forced board and strategic changes at the company.
"The corporation was unable to restructure its affairs in an adequate manner, and after careful consideration of all other available alternatives, the board of directors ... determined that it was in the best interests of the corporation and all of its stakeholders to file for an application for creditor protection under the CCAA," it said.