High Chaparral
Chaparral Energy Inc. stock this week began trading on the over-thecounter marketplace OTCQB, fulfilling a promise executives made in bankruptcy reorganization.
Chaparral Energy Inc. stock this week began trading on the over-thecounter marketplace OTCQB, fulfilling a promise executives made in bankruptcy reorganization and a step toward a goal the company outlined more than a decade ago.
The Oklahoma Citybased oil and natural gas producer until earlier this year was privately held by a small group of investors. Under Chapter 11 bankruptcy reorganization, the company converted about $1.2 billion in debt into equity, boosting the company’s shareholders to about 300. Being publicly traded gives those investors the opportunity to sell shares and cash out some of their investment.
“We’re very pleased to be publicly traded,” CEO Earl Reynolds told The
Oklahoman on Friday. “We will continue to look at other options and may go to another exchange at some point in the future.”
Trading under the symbol “CHPE,” Chaparral has about 45 million shares and little trading volume. Reynolds said the company will consider eventually issuing more shares or moving to a larger exchange.
“We’re looking at numerous alternative to create maximum value for our shareholders,” he said. “We think this gives us visibility, more opportunity to tell of our exposure in the STACK. This is a logical first step for us, and part of our restructuring and obligation to do that.”
Reynolds and other Chaparral executives over the past three months have outlined a new strategy for the company. They have listed for sale the company’s enhanced oil recovery projects, including a large carbon dioxide flooding project in Osage County, and instead are focused on new horizontal drilling in the STACK play in Kingfisher, Canadian and Garfield counties.
“We believe the best path for the company is to create a pure-play STACK company,” Reynolds said Friday. “We think there’s a lot of investor interest there, and we have the capability of drilling new wells and a low cost structure. That will give us a platform to grow.”
Chaparral has about 340 employees.
The company first announced plans for an initial public offering in 2006. Executives discussed becoming publicly traded several other times in the following years, but repeatedly decided against the move.
This week’s jump to the over-the-counter market is a part of the broader effort of redefining the company, Reynolds said.
“This is the first step of hopefully many opportunities to tell our great story of what we’re doing and what we’re going to do,” he said.
Over-the-counter stocks typically see large price swings in part because of relatively few shares outstanding and relatively small trades, compared to the larger markets.
Chaparral shares opened at $24.81 on Wednesday. The sales price dipped to $12 Friday as fewer than 400 shares changed hands the day before a holiday weekend.