Court approves Chaparral exit plan from bankruptcy
A judge has approved Chaparral Energy Inc.’s plan to exit bankruptcy, wiping out $1.2 billion in debt from the Oklahoma City-based company.
Chaparral expects to emerge from bankruptcy by the end of March, the company said Monday. Chaparral has about 350 employees.
Under the plan, Chaparral’s unsecured bondholders and general unsecured creditors will own all of the company’s ownership interest, subject to some dilution.
“Thanks to the hard work of everyone involved with this process, Chaparral will emerge from Chapter 11 within the next few weeks as one of the most financially stable oil and gas companies of its size in the industry,” CEO K. Earl Reynolds said in a statement. “This security, coupled with our outstanding STACK assets, will be the driving force behind Chaparral’s success for decades to come.”
Upon emergence, Chaparral’s capital structure will include cash on hand and a reserve-based lending facility with an initial borrowing base of $225 million, as well as an additional $150 million term loan. Both will mature in four years. The plan also includes $50 million of new money equity from a rights offering.
Chaparral said it expects to have liquidity of more than $100 million when it emerges from bankruptcy. The oil and natural gas producer filed for bankruptcy reorganization in May.
The company will be governed by a new, seven-member independent board of directors: Reynolds; Douglas Brooks; Matt Cabell; Robert Heinemann; Sam Langford; Ken Moore; and Gysle Shellum.
“We are very excited to welcome an extremely talented and seasoned board of directors to Chaparral,” Reynolds said. “These gentlemen have decades of oil and gas experience and have held numerous executive and board positions throughout their well-respected careers. Their combined wealth of industry and leadership experience will be invaluable to Chaparral
as we embark on the next successful chapter in our company’s history.”
A federal bankruptcy court in Delaware approved Chaparral’s exit plan on Thursday. The plan received overwhelming support from the company’s bondholders and lenders, Chaparral said.
Chaparral, founded in 1988, has focused its operations in Oklahoma’s fast-growing STACK play. The company also is the third-largest oil producer in Oklahoma.