Another energy company with Oklahoma ties expects to emerge from Chapter 11 bankruptcy by the end of March. Oklahoma City-based Chaparral Energy, Inc.’s plan of reorganization was confirmed by the U.S. Bankruptcy Court of Delaware last Thursday, March 9. The plan received overwhelming support from the company’s bondholders and lenders, according to a company press release.
“We are tremendously pleased to announce the confirmation of our plan by the court today,” said K. Earl Reynolds, Chief Executive Officer. “Thanks to the hard work of everyone involved with this process, Chaparral will emerge from Chapter 11 within the next few weeks as one of the most financially stable oil and gas companies of its size in the industry. This security, coupled with our outstanding STACK assets, will be the driving force behind Chaparral’s success for decades to come.”
Chaparral filed for Chapter 11 bankruptcy protection in early May, 2016. At the time, the company listed assets ranging from $500 million to $1 billion and liabilities ranging from $1 billion up to $10 billion.
Chaparral’s unsecured bondholders and general unsecured creditors will own 100 percent of the company’s ownership interest, subject to some dilution, under the confirmed plan. The company’s capital structure will include its cash on hand and a reserve-based lending facility with an initial borrowing base of $225 million, as well as an additional $150 million term loan. Both the revolving and term loan will mature in four years. In addition, the plan includes $50 million of new money equity from a rights offering. The company expects to have liquidity in excess of $100 million upon emergence, according to the press release.
The company will be governed by a new independent board of directors which include Douglas Brooks, Matt Cabell, Robert Heinemann, Sam Langford, Ken Moore and Gysle Shellum in addition to K. Earl Reynolds.
“We are very excited to welcome an extremely talented and seasoned board of directors to Chaparral,” said Reynolds. “These gentlemen have decades of oil and gas experience and have held numerous executive and board positions throughout their well-respected careers. Their combined wealth of industry and leadership experience will be invaluable to Chaparral as we embark on the next successful chapter in our company’s history.”