Chaparral Energy has voluntarily filed petitions for relief under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court of Delaware. The Chapter 11 filing will facilitate the restructuring of the company’s balance sheet, as it continues to work through negotiations of a debt to equity exchange with its bondholders and lenders with the objective of reducing its bondholder debt by approximately US$1.2 billion.
“The dramatic decrease in oil and natural gas prices over the last two years has presented numerous challenges for the industry as a whole,” said Chief Executive Office Mark Fischer. “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. By significantly reducing our debt and restructuring our balance sheet, Chaparral will be better positioned to not only weather this down environment, but also increase our long-term financial security and better position us for long-term success.”
Chaparral has filed a series of motions with the court that, when granted, will enable the company to maintain its operations as usual, without interruption throughout the restructuring process. Included in these first day motions are requests 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.
Image: Office/Chaparral Energy