Chaparral Announces $170 million Assets Sale as It Focuses Purely on STACK

A $170 million cash sale of holdings in the North Burbank and Texas Panhandle has been announced by Oklahoma City-based Chaparral Energy, Inc.

The company said the sale also included certain contingent payments but it did not reveal the identity of the buyer.

“The sale of these assets marks a major milestone in the transition of Chaparral to a premiere pure-play STACK operator,” said Earl Reynolds, Chief Executive Officer. “Our teams will now be able to further focus our capital, activity and operational knowledge exclusively on accelerating development of our highly economic STACK inventory.”

He also said the proceeds will allow the company to reduce debt, increase liquidity and strengthen its strong balance sheet.

“The sale will also materially lower our overall total operating cost structure, which we view as critical in this volatile commodity price environment,” said Reynolds.

It was in April when Reynolds announced the company intended to become a “pure STACK-focused company.” He said at the time that the firm would focus on its 100,000 acres in Kingfisher, Canadian and Garfield counties.

The closing of the sale is expected to be made next month subject to satisfaction of certain customary closing conditions. The company said the agreement provides for contingent payments to Chaparral through December 2020 on a part of the buyer’s unhedged production volumes.

Other details of the sale are to be disclosed when Chaparral announces its third quarter earnings call in early November.