C&J Energy Services commenced cases for a voluntary reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.

The reorganization cases contemplate implementing the previously announced restructuring support agreement (RSA) that C&J executed with its lenders, which provides for the elimination of approximately $1.4 billion in debt from the company’s balance sheet.

Additionally, the RSA contemplates that, subject to the satisfaction of certain conditions, the company will issue one series of seven-year warrants to existing common stockholders, based on their pro rata share, exercisable for up to an aggregate of 6% of new common stock at a strike price of $1.55 billion.

Currently, lenders that beneficially own or manage greater than 83% of the aggregate principal amount of debt outstanding under the company’s credit facilities are parties to the RSA. According to a related 8-K filing, Cortland Capital Market Services served as administrative agent for the lender group.

The company currently estimates that it will emerge from the Chapter 11 reorganization within approximately 130 to 180 days, and fully expects operations to continue as normal throughout the court-supervised financial restructuring process.

C&J Energy Services is a provider of well construction, well completions, well support and other complementary oilfield serves to oil and gas exploration companies in North America.