Case Studies
Newsletter
Industries
Dreco Energy Services, LTD.
- Industry: Energy
Situation
Dreco Energy Services, Ltd. (NYSE; DREAF), a $250 million builder and servicer of oil rigs, experienced, after years of 100% annual growth, a drop in backing from $250 million to $50 million when demand dropped precipitously in the U.S. oil market.
Action
Assuming the roles of Chairman and CEO, GGG restructured the company in Chapter 11 Bankruptcy. The plan included expanding Dreco’s rig building operations into international markets while growing the service operations in the U.S. For the domestic market, working capital was meticulously monitored in order to buy time for an oil production equipment rebound.
Results
Initially emerging from bankruptcy at 25 cents a share, Dreco survived the downturn in the market. In 1999 the company was sold for $55 per share to National Oil Well, Inc. (NYSE: NOI).