Chaparral Energy Inc. next week will meet a long-awaited goal by joining the New York Stock Exchange.
The Oklahoma City-based oil and natural gas producer’s stock is set to begin trading on the Big Board on Tuesday under the new ticker symbol “CHAP.” Chaparral shares have traded on the over-the-counter marketplace OTCQB since May 2017.
“Going from over-the-counter to the New York Stock Exchange is going to provide more liquidity and more opportunity for new investors,” CEO Earl Reynolds said in an interview with The Oklahoman. “It’s the logical next step for our company.”
Since emerging from bankruptcy reorganization in March 2017, Chaparral executives have transformed the company, selling off its carbon dioxide enhanced oil recovery operations and focusing on modern horizontal wells in northwest Oklahoma’s STACK play.
Joining the New York Stock Exchange, Reynolds said, continues the company’s growth and business plan.
“It’s the next step. We think it makes sense,” he said. “There’s nothing magical about the timing, but it gives us broad exposure to new investors and creates more demand for our shares.”
Many institutional and other investors are restricted to buying only stock listed on the major exchanges. Moving to the NYSE greatly expands Chaparral’s pool of potential investors.
Goal is realized
Chaparral executives for years have said they planned for the company to be traded on one of the country’s major exchanges. Initial public offering plans were scuttled most recently in 2014 when oil prices tumbled, plunging the industry into its deepest downturn in a generation.
Chaparral filed for Chapter 11 bankruptcy reorganization in May 2016 and emerged in March 2017 with new leadership and a new business model. But the goal of reaching the major exchanges didn’t change.
“Going though Chapter 11 is a very difficult way to become publicly traded,” Reynolds said.
Chaparral has about 230 employees, including about 130 in its Oklahoma City headquarters.
Thursday’s announcement follows less than a month after Chaparral sold $300 million in 8.75 percent notes due 2023.
“It provides the opportunity for additional growth,” Reynolds said. “It provides more liquidity for the company. We’re in a great position financially and have had great success in the last several quarters delineating our acreage in the STACK.”
Chaparral controls 119,000 acres in the STACK, centered in Kingfisher, Canadian and Garfield counties. The company is operating three rigs in the area, and Reynolds said executives are considering adding a fourth rig.
Chaparral’s STACK oil and natural gas production grew by 50 percent from the first quarter of 2017 to the first quarter of 2018.
“Now we have a change with the bond deal and our nice financial liquidity position to accelerate,” Reynolds said.
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