Bronx, United States, Aug 19, 2020, 07:00 /Comserve / -- Chaparral Energy Inc, Oklahoma based oil and gas producer, filed for Chapter 11 bankruptcy protection this Sunday.
USA, 17 Aug, 2020 -- Chaparral Energy Inc, Oklahoma based oil and gas producer, filed for Chapter 11 bankruptcy protection this Sunday. This was the latest energy sector casualty in recent months owing to the weak oil prices which was impacted severely by the Covid-19 pandemic.
The assets and liabilities of the company were in the range of USD 500 million to USD 1 billion. This was according to a court filing in Delaware at the U.S. Bankruptcy Court.
Lenders had been contributing credit for shale drillers, but Chaparral’s borrowing limit was reduced from USD 325 million to USD 175 million. According to reports in March, the driller was working with debt restructuring advisers to improve its financial position.
It is not the first time this company has filed for bankruptcy protection. Back in 2014-2016, when the oil price slump was witnessed, the company had filed for bankruptcy but emerged out of it in March 2017. After emerging, Chaparral’s capital structure included its cash on hand along with a reserve-based lending facility with an initial borrowing base of around USD 225 million and a term loan of USD 150 million. Chaparral ended up with more than USD 100 million in liquidity back then.
It was a fall in economic activity due to Covid-19 along with an oil price war between Russia and Saudi Arabia that led to the price of crude oil dropping below USD 0 in April for the first time in history. That added to the financial condition of Chaparral.
This year in May, the company had warned against its ability to continue because of a growing concern due to the historic plunge in commodity prices. It said that it had hired legal and financial advisors.
Debt-laden shale companies like Whiting Petroleum and Chesapeake Energy have fallen to one of the worst crises to hit the oil industry. Chaparral reported around USD 421 million of debt outstanding at the end of 2019.
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