Midcontinent independent Chaparral Energy LLC, Oklahoma City, reported it has voluntarily filed petitions for relief under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court of Delaware.
The company said the 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.” The company wishes to reduce its bondholder debt by $1.2 billion.
“The dramatic decrease in oil and natural gas prices over the last 2 years has presented numerous challenges for the industry as a whole,” the company said in a news release, adding that it continues to believe in the “outstanding potential” of its employees and its Midcontinent assets and enhanced oil recovery programs.
“The continued depressed price environment, however, coupled with our existing debt levels have severely limited the company’s overall operational ability,” said Chaparral Chief Executive Office Mark Fischer. “By significantly reducing our debt and restructuring our balance sheet, Chaparral will be better positioned to not only weather this down environment, but also increase our long-term financial security and better position us for long-term success.”
The company has capitalized on its sustained success in the Midcontinent area in recent years by expanding its holdings to become a leading player in the liquids-rich Mississippi Lime and STACK, which is home to multiple oil-rich reservoirs including the Oswego, Meramec, Osage, Woodford, and Hunton formations. Chaparral also claims it is the third-largest carbon dioxide EOR producer based on number of active projects in the US.