Published: May 24, 2016 |

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Chaparral Energy has filed for bankruptcy protection under Chapter 11 in the US, as it came under financial pressure due to a slump in oil prices.

The filing will enable the Oklahoma City-based oil and gas driller to restructure its balance sheet, as it works to negotiate on a debt to equity exchange with its bondholders and lenders. A successful deal will cut its debt by nearly $1.2bn.

Chaparral chief executive officer Mark Fischer said: “The dramatic decrease in oil and natural gas prices over the last two years has presented numerous challenges for the industry as a whole.

“Chaparral continues to believe in the outstanding potential of our employees and our Mid-Continent assets and EOR programs. The continued depressed price environment, however, coupled with our existing debt levels have severely limited the company’s overall operational ability.”

The company has made appeals in the court to continue its operations as usual without interruption throughout the restructuring process. The court is yet to grant permission for the company.

Chaparral has also sought the court’s approval to continue to pay employee wages, honor existing employee benefit programs and pay royalties to mineral owners under the terms of the applicable agreements.

“The company has also filed motions seeking authority to pay expenses associated with production operations and drilling and completion activities, as well as costs associated with gathering, processing, transportation, marketing and those related to joint interest billing for non-operated properties,” Chaparral said in a statement.

Source: (May 10, 2016) Energy Business Review

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