Chaparral Energy Inc. Files For Second Bankruptcy

ODESSA, TX - Chaparral Energy Inc. has filed for bankruptcy protection for the second time in four years, paving the way for bondholders to take control of the Oklahoma driller in the aftermath of sluggish oil prices.

The company recently filed for bankruptcy under Chapter 11 in the U.S Bankruptcy Court in Delaware, as it looks to restructure it's balance sheet and raise additional funding throughout the upcoming months. 

In a statement Monday, Chaparral Energy Inc. indicated that nearly 80% of it's first-lien lenders and bondholders showed widespread support for its' proposal to swap $300 million of unsecured notes into equity, raise nearly $175 million in reserve-based exit facilities, and release an additional $35 million of convertible notes.

Recently the company listed an estimated $500 million to $1 billion in total assets and liabilities, however the novel coronavirus pandemic has led to a surge in bankruptcies industry wide as lock downs strangle demand, prompting lenders to cut credit lines.

Thus far in 2020, the spike in bankruptcies has included California Resources Corp., the state’s largest crude oil producer, and shale drilling powerhouse Chesapeake Energy Corp.

Chaparral Energy Inc. Chief Executive Officer Chuck Duginski noted, “While we have taken carefully measured and decisive action to address the challenges of 2020, the overall impact to the energy industry, including Chaparral, has been severe." 

 “We intend to maintain normal operations and meet all of our trade commitments timely, and under their existing terms.”

The Oklahoma City based oil and gas producer previously filed for bankruptcy protection in 2016, following a plunge in crude prices that started in 2014.

Lenders recently cut Chaparral’s monetary borrowing cap nearly in half down to $175 million from the previous $325 million which was originally set back in April.

Previously, the company reportedly borrowed approximately $250 million from its credit facility, leaving the company with a so-called 'borrowing base deficiency', which the company subsequently agreed to pay in future installments.

Back in April, Scott Pittman resigned from his position as chief financial officer of Chaparral Energy inc.

The company recently stated that it expects their $32 million in cash reserves will allow it to maintain normal production operations listed in the Chapter 11 restructuring period.