Chaparral files for Chapter 11 protection

Oklahoma City, OK-based Chaparral Energy LLC voluntarily filed petitions for relief under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court of Delaware. The Chapter 11 filing will facilitate the restructuring of the company’s balance sheet, as it continues to work through negotiations of a debt to equity exchange with its bondholders and lenders with the objective of reducing its bondholder debt by approximately $1.2 billion.

“The dramatic decrease in oil and natural gas prices over the last two years has presented numerous challenges for the industry as a whole. Chaparral continues to believe in the outstanding potential of our employees and our Mid-Continent assets and EOR programs. The continued depressed price environment, however, coupled with our existing debt levels have severely limited the company’s overall operational ability,” said CEO Mark Fischer.

The privately-held Mid-Continent producer has filed a series of motions with the court that, if granted, will enable the company to maintain its operations as usual throughout the restructuring process. The company has also filed motions seeking authority to pay expenses associated with production operations and drilling and completion activities, as well as costs associated with gathering, processing, transportation, marketing and those related to joint interest billing for non-operated properties.

In February, Chaparral drew down $181 million from its revolving credit facility. The company notes on its website that the money will help the company continue to operate throughout the restructuring process.

Latham & Watkins LLP is serving as legal counsel and Evercore has been engaged as financial advisor to Chaparral. Opportune LLP is the company’s restructuring advisor.

 

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