Chaparral Energy emerged from Chapter 11 as a private, non-SEC filing company, completing its financial restructuring. The company equitized all $300 million of its unsecured 8.75% senior notes due 2023 and reduced its annual interest expense by more than $25 million.
As a result of the plan of reorganization, the company’s lenders received a full recovery of their claims through a combination of paydown and participation in an amended and restated credit facility. Trade and other general unsecured claims were unimpaired and reinstated.
“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,” Chuck Duginski, CEO of Caparral, said. “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. 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.”
The company 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.
Davis Polk & Wardwell acted as legal counsel, Rothschild & Co and Intrepid Partners acted as investment bankers, and Opportune acted as financial advisor to Chaparral. Sidley Austin acted as legal counsel to the board of directors of Chaparral in connection with the Chapter 11 cases.
Stroock & Stroock & Lavan acted as legal counsel to the ad hoc committee of holders of senior notes in connection with the Chapter 11 cases. Perella Weinberg Partners and Tudor, Pickering, Holt & Co. Advisors acted as investment banker and financial advisor to the ad hoc committee of holders of senior notes in connection with the Chapter 11 cases.
Vinson & Elkins acted as legal counsel and FTI Consulting acted as financial advisors to Royal Bank of Canada as administrative agent for Chaparral’s reserves-based credit facility in connection with the Chapter 11 cases.
Chaparral Energy an independent oil and natural gas exploration and production company headquartered in Oklahoma City, OK.
