Chaparral Energy rings bell at the New York Stock Exchange
Chaparral executives celebrated achievement of a significant milestone Wednesday when they rang the opening bell on the New York Stock Exchange.
The firm's stock began getting traded on the exchange under the ticker symbol CHAP in July.
"It took us some time" to get listed on the exchange, Chaparral CEO Earl Reynolds said. "But the benefit is: You are in a broader market that gives you a little bit more exposure to capital markets when you get on the New York Stock Exchange."
While Reynolds' remarks indicate the feat is just part Chaparral's overall plan, the company has made many strides the past decade.
Founded in 1988, Chaparral began working on a plan to transform itself from a private, investor-owned firm to one that was publicly traded in 2005 under the leadership of then co-founder and president Mark Fischer.
At the time, executives filed a notice with the U.S. Securities and Exchange Commission and hoped to make an initial public offering by some of its officers and the company to raise $345 million.
However, tumbling natural gas prices in the spring of 2006 prompted Chaparral to pause its plans.
In 2009, executives tried again by proposing a merger deal with United Refining Energy Corp., an already publicly traded company, in a deal officials hoped would create a business worth $1.8 billion.
That deal also had to be scuttled after energy prices collapsed, again.
In early 2014, Fischer said the company would try to go public again, hopefully before the end of the year. But by the end of that same year, commodity prices were dropping like a stone.
In May 2016, with Oklahoma's energy economy still struggling, Chaparral sought bankruptcy protection.
Before the end of that year, it announced it had reached a deal with its bondholders and lenders to enable it to emerge from court as a healthy firm, ready to grow.
It also announced that Fischer would be retiring and that Reynolds, who had left Devon Energy Corp. in 2011 to join Chaparral's executive team, would succeed him as Chaparral's CEO.
In growth mode
Chaparral emerged from bankruptcy in March 2017, shedding $1.2 billion in debt and cutting about $100 million in annual interest expense.
It also held about 100,000 net acres in northwest Oklahoma's STACK play and planned to go after more. Chaparral executives have since sold off most of the company's legacy carbon dioxide-enhanced oil recovery operations and expanded the company's STACK holdings to about 120,000 acres.
“Our understanding of the rock, extensive experience in the area and access to existing infrastructure will allow us to maximize the value of this core area,” Reynolds said.
Chaparral last year became publicly traded in the over-the-counter marketplace OTCQB with about 300 shareholders holding about 45 million shares.
In June of this year, it offered investors $300 million of senior, unsecured notes maturing in 2023, with plans to use proceeds from the sale to pay down its revolving credit debt and for other general corporate purposes.
And it shifted markets, moving to the New York Stock Exchange on July 24, where about 38.6 million shares were being traded on Wednesday. The stock closed at $17.25 a share.
When Fischer first discussed taking Chaparral public, he made no bones about why such a move would benefit the company and its investors.
The deal, he explained, would "give Chaparral access to capital we need to exploit our large inventory of drilling and development opportunities."
Reynolds echoed those sentiments this week, as he and his leadership team prepared to go to New York for the bell ringing event.
The company's core task since emerging from bankruptcy has been to redefine its mission, he said, and investors' desire for a publicly traded currency was part of that, as was its business restructuring through selling off its off high-cost operations and using that cash to invest in future high-growth opportunities.
Reynolds noted the company is adding a fourth drilling rig this month and has revised its production guidance upward for 2018.
"What makes Chaparral unique is what we know about running the business," Reynolds said.
"Prices today are really nice, but we recognize they can go down, so we want to keep our cost structure low, be nimble and have a very entrepreneurial focus, because that is where we have been for years."
Reynolds said the company is focused on returns.
"Our STACK holdings will allow us to do that," he said.
As for being traded on the New York Stock Exchange, Reynolds called it "just one more step in our overall plan."
"Now, through our execution, we are really starting to grow."