Chaparral Energy Announces 2017 Strategy and Explores Strategic Alternatives for Enhanced Oil Recovery Assets
Chaparral Energy, Inc. announced April 28th, its 2017 strategy, as well as its decision to begin exploring strategic alternatives for its Enhanced Oil Recovery (EOR) assets.
The Oklahoma City-based company, which emerged from bankruptcy reorganization last month, said it plans to put its eight enhanced oil recovery assets on the market in June. Chaparral will use the sale proceeds to fund new drilling.
““During the remainder of 2017, we will be pursuing strategic alternatives for our EOR assets as we shift our strategy and portfolio to focus solely on the highly profitable STACK, where we have an approximately 110,000 net acre position,” CEO Earl Reynolds said in a news release. “This move will allow us to further focus our operational expertise and cost-saving initiatives as we continue to deliver best-in-class STACK results.”
The company said it plans to spend between $125 million and $150 million this year, including about $85 million in the STACK. It has two rigs running and plans to drill 18 to 20 wells there this year.
The company also posted an updated investor presentation to the Investor section of its website, which can be viewed at chaparralenergy.com/investors, and includes details about its:
– 2017 strategy, including strategic alternatives to monetize its EOR assets
– 2017 capital budget
– Q1 2017 production results
– Detailed STACK asset overview, including drilling inventory and type curves
“With more than 3,000 operated unrisked drilling locations, our exceptional execution and overall low-cost structure means we have decades of high-return drilling opportunities, even in a $40 to $60 per barrel price environment,” said Reynolds. “We are committed to maintaining a strong balance sheet and safely delivering solid repeatable results as we develop and expand our premier STACK position.”
“Although we fully believe in the value of our EOR assets, they do not fit with our pure-play STACK strategy,” said Reynolds. “We have no doubt that these assets can, however, continue to provide significant upside and value for other companies in the industry.”
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Compiled and Published by GIB KNIGHT
Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma.