Oklahoma City-based Chaparral Energy LLC has cleared the way with its lenders to emerge from bankruptcy. The company also announced the retirement of Mark Fischer, Chaparral’s founder and CEO, according to a report by The Oklahoman.
The agreement — which requires approval by the bankruptcy court — would convert $1.2 billion in outstanding debt to equity. The company filed for Chapter 11 bankruptcy reorganization in May. A hearing on the plan has been requested for December 7.
Chaparral also said Fischer would retire at the end of the year. He will be succeeded by Earl Reynolds, president and chief operating officer.
Reynolds joined the company in 2011 as executive vice president and chief operating officer before becoming president in 2014. He previously worked at Devon Energy Corp., Burlington Resources and Mobil Oil.
Under the proposed restructuring agreement, unsecured bondholders and general unsecured creditors will own 100 percent of the company’s ownership interest. If approved, the agreement will provide a $225 million reserve-based lending facility that matures in 2020. The new capital structure includes another $250 million drawn on a four-year term loan. It will require $50 million of new equity in a rights offering.
“The new capital structure, coupled with the tremendous efficiency gains we have already realized from LOE (lease-operating expenses), drilling and completion and G&A (general and administrative) cost savings, will allow us to continue to develop our leading Mid-Continent STACK position for years to come,” said Joe Evans, chief financial officer.
Chaparral has about 350 employees.