Chaparral reports financial, operational results
Chaparral Energy highlighted growing production numbers and improved margins when it announced its 2018 results Thursday.
The Oklahoma City-based company recorded a net income of $33.4 million, or 73 cents per share, on adjusted earnings before interest, taxes, depreciation and amortization of $125 million in 2018.
It boosted average total daily production to 14,500 barrels of oil equivalent from wells it produced in Oklahoma’s STACK play in 2018, a 52 percent increase compared to 2017.
And after accounting for 2018 asset sales, it grew its companywide average daily production for the year by 13 percent compared to the previous year, to 20,500 equivalent barrels, and grew the amount of its total proved reserves to 94.8 million barrels, a 35 percent year-over-year increase.
Officials said the average mix of Chaparral’s production in 2018 was 36 percent oil, 25 percent natural gas liquids and 39 percent natural gas. Chaparral also reduced per-barrel lease operating expenses from $10.96 in 2017 to $7.24 in 2018.
Officials have been working over the past 18 months to transform the company, which emerged from bankruptcy reorganization in 2017.
In 2018, Chaparral sold $50.5 million in non-core assets that officials said included portions of its legacy and Oklahoma/Texas Panhandle acreage, as well as parts of its saltwater disposal system.
As for 2019, Chaparral is expected to spend between $275 million and $300 million, with more than 80 percent of that targeting ongoing drilling and completion work in the STACK and MERGE plays in west-central and northwest Oklahoma.
Production is scheduled to continue to climb to daily average for 2019 of between 25,000 and 27,000 equivalent barrels — a 22 to 32-percent increase, year-over-year. Officials said about 85 percent of the expected companywide production will come from its ongoing STACK operations.
Its 2018 net income of about $34 million compares to a post-bankruptcy net loss of about $119 million in 2017.
The market has been upbeat about the firm recently. Over the past week, its New York Stock Exchange share traded under the symbol “CHAP” has increased in value from $4.44 to $4.98 (its closing price Thursday).
“Our team is extremely proud of all we accomplished in 2018,” CEO Earl Reynolds stated in the earnings release. “From strategically adding to our STACK acreage position to uplisting to the New York Stock Exchange, and from successfully completing a $300 million senior notes offering to increasing our borrowing base, we were able to increase the value of our assets while strengthening our balance sheet.
“Our outstanding operational and drilling results allowed us to significantly grow production and reserves in 2018. We will continue to prudently manage our capital and protect our balance sheet as we grow production and reserves, work to become cash flow neutral and deliver long-term value for our shareholders.”