Chaparral Energy Emerges from Bankruptcy as Private Operator
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Chaparral Energy has successfully completed its financial restructuring and emerged from Chapter 11 as a private, non-SEC filing company. Through the efficient execution of its pre-packaged plan of reorganization, the company has equitized all $300 million of its unsecured 8.75 percent senior notes due 2023, reduced its annual interest expense by more than $25 million, and significantly enhanced its financial flexibility.
As a result of the plan of reorganization the lenders received a full recovery of their claims through a combination of paydown and participation in an amended and restated credit facility, and trade and other general unsecured claims were unimpaired and reinstated. During the course of its restructuring, Chaparral continued to operate without interruption while satisfying all customer, employee, royalty owner, and working interest owner claims, preserving its strong relationships for the next phase of the company’s future.
“We are very pleased to have completed this efficient and consensual reorganization in under 60 days, and we look forward to working with our stakeholders and newly-appointed board members in charting a course as a private company with firmer financial footing. As a result of the consensual and expedited process, we have preserved the value of the restructured enterprise and the opportunity for success in a dynamic energy environment,” said Chief Executive Officer Chuck Duginski.
“I would like to thank our customers, vendors and other business partners and a special thanks to our employees whose dedication, patience and hard work have been exceptional throughout. We believe that as a result of this process we are better positioned to compete and will look to capitalize on future opportunities with an improved financial and cost structure. We are focused on operating efficiently and effectively, delivering strong operating results, and maintaining a strong balance sheet that will continue to de-lever at the current strip pricing,” added Duginski.
New Capital Structure
The company has bolstered its liquidity position through equitizing the senior notes and obtaining a $300 million exit revolving credit facility with an initial borrowing base of $175 million and a $35 million second lien convertible note. Upon the company’s emergence from Chapter 11, the borrowings under its first lien revolving credit agreement were partially repaid using a portion of cash on hand and the proceeds from the $35 million second lien convertible note. The resulting liquidity position of the company upon exit is approximately $58 million, comprised of availability under the exit facility borrowing base and approximately $10 million of cash on hand.
New Board of Directors
• Craig Kelleher, co-founder of Millstreet Capital Management
• Brian Connolly, co-founder of Millstreet Capital Management
• Jason Hammerman, Senior Vice President at Avenue Capital Management II
• Sam Barker, Portfolio Manager at Amzak Capital Management
• Mark Castiglione, Partner at Meridian Energy
• Jim Addison, Chief Executive Officer of Hawkwood Energy
• Chuck Duginski, Chief Executive Officer of Chaparral Energy
About Chaparral Energy
Chaparral Energy, Inc. is an independent oil and natural gas exploration and production company headquartered in Oklahoma City. Founded in 1988, Chaparral is focused in the oil window of the Anadarko Basin in the heart of Oklahoma.
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