Chaparral Energy, Inc. has closed the sale of its North Burbank and Texas Panhandle enhanced oil recovery (EOR) assets. The properties, which represented approximately 5,700 barrels of oil equivalent per day (Boe/d) of the company’s 24,500 Boe/d of total production, were sold to Perdure Petroleum for $170 million, subject to customary closing adjustments and certain contingent payments through December 2020.
The transition away from EOR operations will allow the company to focus our capital and operational activity almost exclusively on accelerating the development of our more than 3,500 STACK drilling locations across our 110,000 net acre position in Kingfisher, Garfield and Canadian counties.
The company has used the proceeds from the sale to fully repay the outstanding $149.2 million balance on its term loan and will also repay a portion of its credit facility. In addition, the company’s bank lending group has confirmed its $225 million borrowing base under its bank credit facility following the sale and associated monetization of certain commodity derivatives.
As of September 30, 2017, Chaparral had $153 million outstanding on its credit facility and liquidity of $93.6 million, consisting of $71.2 million undrawn capacity on its credit facility and $22.4 million of cash. Pro forma for the divestiture, the company’s liquidity is approximately $105 million.