Chaparral Energy Inc. successfully completed its financial restructuring and emerged from Chapter 11 bankruptcy on Oct. 14 as a private, non-SEC filing company.
The Oklahoma shale driller entered Chapter 11 bankruptcy in August, marking the second time the company has filed for bankruptcy protection since 2016. The company’s assets and liabilities were in the range of $500 million to $1 billion, according to a court filing in the U.S. Bankruptcy Court in Delaware. It had around $421 million of debt outstanding at year-end 2019.
“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,” CEO Chuck Duginski said statement on Oct. 14. “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.”
Founded in 1988, Chaparral is focused in the oil window of the Anadarko Basin in the heart of Oklahoma. Duginski has served as president and CEO of Chaparral since joining the Oklahoma City-based company in 2019 from Tapstone Energy LLC where he worked as its COO.
“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,” Duginski added in his statement.
Through its pre-packaged plan of reorganization, which the company said received broad support from its creditors, Chaparral equitized all $300 million of its unsecured 8.75% senior notes due 2023 and reduced its annual interest expense by more than $25 million. Additionally, the company entered a $300 million exit revolving credit facility with an initial borrowing base of $175 million and a $35 million second lien convertible note.
As a result of the plan of reorganization, Chaparral said its 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.
The company also announced a new board of directors on Oct. 14, comprised of Duginski as well as:
- Craig Kelleher, co-founder of Millstreet Capital Management LLC;
- Brian Connolly, co-founder of Millstreet Capital Management LLC;
- Jason Hammerman, senior vice president at Avenue Capital Management II, LP;
- Sam Barker, portfolio manager at Amzak Capital Management;
- Mark Castiglione, partner at Meridian Energy LLC; and
- Jim Addison, CEO of Hawkwood Energy LLC.
For its reorganization, Davis Polk & Wardwell LLP acted as legal counsel, Rothschild & Co. and Intrepid Partners LLC acted as investment bankers and Opportune LLP acted as financial adviser to Chaparral. Sidley Austin LLP provided legal counsel to the Chaparral board of directors in connection with the Chapter 11 cases.
Stroock & Stroock & Lavan LLP acted as legal counsel, Perella Weinberg Partners LP and Tudor, Pickering, Holt & Co. Advisors LP acted as investment banker and financial advisor to the ad hoc committee of holders of senior notes.
Vinson & Elkins LLP acted as legal counsel and FTI Consulting acted as financial advisers to Royal Bank of Canada as administrative agent for the company’s reserves-based credit facility.
Recommended Reading
Tangled Up in Blue: Few Developers Take FID on Hydrogen Projects
2024-04-03 - SLB, Linde and Energy Impact Partners discuss hydrogen’s future and the role natural gas will play in producing it.
John Cockerill Americas President Talks Hydrogen, Electrolyzers
2024-03-06 - Nicolas de Coignac, president of Americas for John Cockerill, recently spoke with Hart Energy about the company’s role in scaling electrolytic hydrogen in the U.S.
Energy Transition in Motion (Week of March 28, 2024)
2024-03-31 - Here is a look at some of this week’s renewable energy news, including proposals submitted to develop about 6.8 gigawatts of wind projects offshore Connecticut, Massachusetts and Rhode Island.
Energy Transition in Motion (Week of Feb. 16, 2024)
2024-02-16 - Here is a look at some of this week’s renewable energy news, including the outlook for solar and battery storage in the U.S.
Energy Transition in Motion (Week of Feb. 9, 2024)
2024-02-09 - Here is a look at some of this week’s renewable energy news, including the latest on a direct lithium extraction technology test involving one of the world’s biggest lithium producers and the company behind the technology.