Chaparral Energy Finishes $170 million Sale of Texas Assets

Oklahoma City’s Chaparral Energy, Inc. announced this week it has wrapped up its $170 million sale of assets in the North Burbank and Texas Panhandle to Perdure Petroleum.

The enhanced oil recovery assets represented nearly 5,700 barrels of oil equivalent a day out of Chaparral’s 24,500 Boe/d in total production.

“We are pleased to announce that the close of this sale effectively completes Chaparral’s transition to a pure-play STACK operator,” said Earl Reynolds, Chaparral Chief Executive Officer. He explained the company’s transition from enhanced oil recovery operations will allow a focus of capital and operations “almost exclusively on accelerating the development of our more than 3,500 STACK drilling locations.”

The company’s leased assets in Kingfisher, Garfield and Canadian counties total 110,000 net acres. Chaparral used the proceeds from the sale to fully repay the outstanding $149.2 million balance on its term loan and plans to repay a part of its credit facility.

As of the end of September, the company had $153 million outstanding on its credit facility and liquidity of $93.6 million.

“Chaparral remains focused on maintaining a strong balance sheet through capital discipline, spending within cash flow and potential future non-core asset sales,” added Reynolds. He said by fully repaying the term loan and the portion of its credit facility balance, “we are able to secure the financial flexibility necessary to position us well for future growth.”

Reynolds said it will also ensure the company’s ability to thrive even in a $40 to $60 oil environment.