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EX-32.2 - EX-32.2 - Chaparral Energy, Inc.cpr-ex322_6.htm
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EX-31.2 - EX-31.2 - Chaparral Energy, Inc.cpr-ex312_12.htm
EX-31.1 - EX-31.1 - Chaparral Energy, Inc.cpr-ex311_7.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number: 333-134748

 

Chaparral Energy, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

73-1590941

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

701 Cedar Lake Boulevard

Oklahoma City, Oklahoma

 

73114

(Address of principal executive offices)

 

(Zip code)

 

(405) 478-8770

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

(Explanatory Note: The registrant was a voluntary filer within the past 90 days and was not subject to the filing requirements of the Securities Exchange Act of 1934 for such period.)

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

Non-accelerated filer (Do not check if a smaller reporting company)

 

 

Smaller reporting company

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.                  Yes      No  

Number of shares outstanding of each of the issuer’s classes of common stock as of August 14, 2017:

Class

 

Number of Shares

 

Class A Common Stock, $0.01 par value

 

 

37,110,630

 

Class B Common Stock, $0.01 par value

 

 

7,871,512

 

 

 

 


 

CHAPARRAL ENERGY, INC.

Index to Form 10-Q

 

 

 

Page

Part I. FINANCIAL INFORMATION

 

 

Item 1. Financial Statements

 

7

Consolidated Balance Sheets

 

7

Consolidated Statements of Operations

 

9

Consolidated Statements of Stockholders' Equity (Deficit)

 

11

Consolidated Statements of Cash Flows

 

12

Condensed Notes to Consolidated Financial Statements

 

13

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

37

Overview

 

37

Results of Operations

 

41

Liquidity and Capital Resources

 

51

Non-GAAP Financial Measure and Reconciliation

 

55

Critical Accounting Policies

 

57

Recent Accounting Pronouncements

 

57

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

57

Item 4. Controls and Procedures

 

59

Part II. OTHER INFORMATION

 

 

Item 1. Legal Proceedings

 

59

Item 1A. Risk Factors

 

60

Item 3. Defaults Upon Senior Securities

 

61

Item 5. Other Information

 

61

Item 6. Exhibits

 

61

Signatures

 

62

 

2


 

CAUTIONARY NOTE

REGARDING FORWARD-LOOKING STATEMENTS

This report includes statements that constitute forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties. These statements may relate to, but are not limited to, information or assumptions about us, our capital and other expenditures, dividends, financing plans, capital structure, cash flow, pending legal and regulatory proceedings and claims, including environmental matters, future economic performance, operating income, cost savings, and management’s plans, strategies, goals and objectives for future operations and growth. These forward-looking statements generally are accompanied by words such as “intend,” “anticipate,” “believe,” “estimate,” “expect,” “should,” “seek,” “project,” “plan” or similar expressions. Any statement that is not a historical fact is a forward-looking statement. It should be understood that these forward-looking statements are necessarily estimates reflecting the best judgment of senior management, not guarantees of future performance. They are subject to a number of assumptions, risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements in this report may include, for example, statements about:

 

fluctuations in demand or the prices received for oil and natural gas;

 

the amount, nature and timing of capital expenditures;

 

drilling, completion and performance of wells;

 

competition and government regulations;

 

timing and amount of future production of oil and natural gas;

 

costs of exploiting and developing properties and conducting other operations, in the aggregate and on a per-unit equivalent basis;

 

changes in proved reserves;

 

operating costs and other expenses;

 

our future financial condition, results of operations, revenue, cash flows and expenses;

 

estimates of proved reserves;

 

exploitation of property acquisitions; and

 

marketing of oil and natural gas.

These forward-looking statements represent intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In addition to the risk factors described in Part II, Item 1A. Risk Factors of this report, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, and Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2016, the factors include:

 

the ability to operate our business following emergence from bankruptcy;

 

worldwide supply of and demand for oil and natural gas;

 

volatility and declines in oil and natural gas prices;

 

drilling plans (including scheduled and budgeted wells);

 

our new capital structure and the adoption of fresh start accounting, including the risk that assumptions and factors used in estimating enterprise value vary significantly from current values;

 

the number, timing or results of any wells;

 

changes in wells operated and in reserve estimates;

 

supply of CO2 ;

 

future growth and expansion;

 

future exploration;

 

integration of existing and new technologies into operations;

3


 

 

future capital expenditures (or funding thereof) and working capital;

 

borrowings and capital resources and liquidity;

 

changes in strategy and business discipline, including our post-emergence business strategy;

 

future tax matters;

 

any loss of key personnel;

 

geopolitical events affecting oil and natural gas prices;

 

outcome, effects or timing of legal proceedings;

 

the effect of litigation and contingencies;

 

the ability to generate additional prospects; and

 

the ability to successfully complete merger, acquisition or divestiture plans, regulatory or other limitations imposed as a result of a merger, acquisition or divestiture, and the success of the business following a merger, acquisition or divestiture.

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements contained herein. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. All forward-looking statements included herein are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

 

4


 

GLOSSARY OF CERTAIN DEFINED TERMS

The terms defined in this section are used throughout this Form 10-Q:

Active EOR Areas

Areas where we are currently or where we plan to inject and/or recycle CO2 as a means of oil recovery.

 

 

Basin

A low region or natural depression in the earth’s crust where sedimentary deposits accumulate.

 

 

Bankruptcy Court

United States Bankruptcy Court for the District of Delaware

 

 

Bbl

One stock tank barrel of 42 U.S. gallons liquid volume used herein in reference to crude oil, condensate, or natural gas liquids.

 

 

BBtu

One billion British thermal units.

 

 

Boe

Barrels of oil equivalent using the ratio of six thousand cubic feet of natural gas to one barrel of oil.

 

 

Boe/d

Barrels of oil equivalent per day.

 

 

Btu

British thermal unit, which is the heat required to raise the temperature of a one-pound mass of water from 58.5 to 59.5 degrees Fahrenheit.

 

 

Completion

The process of treating a drilled well followed by the installation of permanent equipment for the production of oil or natural gas, or in the case of a dry well, the reporting to the appropriate authority that the well has been abandoned.

 

 

CO2

Carbon dioxide.

 

 

Developed acreage

The number of acres that are assignable to productive wells.

 

 

Dry well or dry hole

An exploratory, development or extension well that proves to be incapable of producing either oil or natural gas in sufficient quantities to justify completion as an oil or natural gas well.

 

 

Enhanced oil recovery (EOR)

The use of any improved recovery method, including injection of CO2 or polymer, to remove additional oil after Secondary Recovery.

 

 

Prior Credit Facility

Eighth Restated Credit Agreement, dated as of April 12, 2010, by and among us, Chaparral Energy, L.L.C., in its capacity as Borrower Representative for the Borrowers, JPMorgan Chase Bank, N.A., as Administrative Agent and each of the Lenders named therein, as amended.

 

 

Field

An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.

 

 

MBbls

One thousand barrels of crude oil, condensate, or natural gas liquids.

 

 

MBoe

One thousand barrels of crude oil equivalent.

 

 

Mcf

One thousand cubic feet of natural gas.

 

 

MMBtu

One million British thermal units.

 

 

MMcf

One million cubic feet of natural gas.

 

 

MMcf/d

Millions of cubic feet per day.

 

 

Natural gas liquids (NGLs)

Those hydrocarbons in natural gas that are separated from the gas as liquids through the process of absorption, condensation, adsorption or other methods in gas processing or cycling plants. Natural gas liquids primarily include propane, butane, isobutane, pentane, hexane and natural gasoline.

 

 

5


 

New Credit Facility

Ninth Restated Credit Agreement, dated as of March 21, 2017, by and among, Chaparral Energy, Inc., as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent and The Lenders and Prepetition Borrowers Party thereto.

NYMEX

The New York Mercantile Exchange.

 

 

Play

A term describing an area of land following the identification by geologists and geophysicists of reservoirs with potential oil and natural gas reserves.

 

 

Proved developed reserves

Reserves that can be expected to be recovered through existing wells with existing equipment and operating methods, or in which the cost of the required equipment is relatively minor compared to the cost of a new well.

 

 

Proved reserves

The quantities of oil and natural gas which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain.

 

 

Proved undeveloped reserves

Reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion.

 

 

PV-10 value

When used with respect to oil and natural gas reserves, PV-10 value means the estimated future gross revenue to be generated from the production of proved reserves, net of estimated production and future development costs, excluding escalations of prices and costs based upon future conditions, before income taxes, and without giving effect to non-property-related expenses, discounted to a present value using an annual discount rate of 10%.

 

 

Registration Rights Agreement

Registration Rights Agreement, dated as of March 21, 2017, by and among Chaparral Energy, Inc. and the Stockholders named therein.

 

 

Reorganization Plan

First Amended Joint Plan of Reorganization for Chaparral Energy, Inc. and its Affiliate Debtors under Chapter 11 of the Bankruptcy Code.

 

 

SEC

The Securities and Exchange Commission.

 

 

Secondary Recovery

The recovery of oil and natural gas through the injection of liquids or gases into the reservoir, supplementing its natural energy. Secondary Recovery methods are often applied when production slows due to depletion of the natural pressure.

 

 

Senior Notes

Collectively, our 9.875% senior notes due 2020, 8.25% senior notes due 2021, and 7.625% senior notes due 2022, of which all obligations have been discharged upon consummation of our Reorganization Plan.

 

 

STACK

An acronym standing for Sooner Trend Anadarko Canadian Kingfisher. A play in the Anadarko Basin of Oklahoma in which we operate.

 

 

Undeveloped acreage

Lease acreage on which wells have not been drilled or completed to a point that would permit the production of economic quantities of oil or natural gas regardless of whether such acreage contains proved reserves.

 

 

Unit

The joining of all or substantially all interests in a reservoir or field, rather than a single tract, to provide for development and operation without regard to separate property interests. Also, the area covered by a unitization agreement.

 

 

6


 

PART I — FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

Chaparral Energy, Inc. and subsidiaries

Consolidated balance sheets

 

 

 

Successor

 

 

 

Predecessor

 

 

 

June 30,

 

 

 

December 31,

 

(dollars in thousands, except share data)

 

2017

 

 

 

2016

 

 

 

(unaudited)

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

17,267

 

 

 

$

186,480

 

Accounts receivable, net

 

 

59,901

 

 

 

 

46,226

 

Inventories, net

 

 

5,289

 

 

 

 

7,351

 

Prepaid expenses

 

 

2,677

 

 

 

 

3,886

 

Derivative instruments

 

 

23,275

 

 

 

 

 

Total current assets

 

 

108,409

 

 

 

 

243,943

 

Property and equipment, net

 

 

53,902

 

 

 

 

41,347

 

Oil and natural gas properties, using the full cost method:

 

 

 

 

 

 

 

 

 

Proved

 

 

661,695

 

 

 

 

4,323,964

 

Unevaluated (excluded from the amortization base)

 

 

604,927

 

 

 

 

20,353

 

Accumulated depreciation, depletion, amortization and impairment

 

 

(30,583

)

 

 

 

(3,789,133

)

Total oil and natural gas properties

 

 

1,236,039

 

 

 

 

555,184

 

Derivative instruments

 

 

13,081

 

 

 

 

 

Other assets

 

 

3,340

 

 

 

 

5,513

 

Total assets

 

$

1,414,771

 

 

 

$

845,987

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

7


 

Chaparral Energy, Inc. and subsidiaries

Consolidated balance sheets—continued

 

 

 

Successor

 

 

 

Predecessor

 

 

 

June 30,

 

 

 

December 31,

 

(dollars in thousands, except share data)

 

2017

 

 

 

2016

 

 

 

(unaudited)

 

 

 

 

 

 

Liabilities and stockholders’ equity (deficit)

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

64,495

 

 

 

$

42,442

 

Accrued payroll and benefits payable

 

 

9,634

 

 

 

 

3,459

 

Accrued interest payable

 

 

679

 

 

 

 

732

 

Revenue distribution payable

 

 

13,009

 

 

 

 

9,426

 

Long-term debt and capital leases, classified as current

 

 

4,813

 

 

 

 

469,112

 

Derivative instruments

 

 

 

 

 

 

7,525

 

Total current liabilities

 

 

92,630

 

 

 

 

532,696

 

Long-term debt and capital leases, less current maturities

 

 

305,572

 

 

 

 

 

Derivative instruments

 

 

 

 

 

 

5,844

 

Deferred compensation

 

 

836

 

 

 

 

 

Asset retirement obligations

 

 

64,988

 

 

 

 

65,456

 

Liabilities subject to compromise

 

 

 

 

 

 

1,284,144

 

Commitments and contingencies (Note 10)

 

 

 

 

 

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

 

 

 

Predecessor preferred stock, 600,000 shares authorized, none issued and outstanding as of December 31, 2016

 

 

 

 

 

 

 

Predecessor Class A Common stock, $0.01 par value, 10,000,000 shares authorized and 333,686 shares issued and outstanding as of December 31, 2016

 

 

 

 

 

 

4

 

Predecessor Class B Common stock, $0.01 par value, 10,000,000 shares authorized and 344,859 shares issued and outstanding as of December 31, 2016

 

 

 

 

 

 

3

 

Predecessor Class C Common stock, $0.01 par value, 10,000,000 shares authorized and 209,882 shares issued and outstanding as of December 31, 2016

 

 

 

 

 

 

2

 

Predecessor Class E Common stock, $0.01 par value, 10,000,000 shares authorized and 504,276 shares issued and outstanding as of December 31, 2016

 

 

 

 

 

 

5

 

Predecessor Class F Common stock, $0.01 par value, 1 share authorized, issued, and outstanding as of December 31, 2016

 

 

 

 

 

 

 

Predecessor Class G Common stock, $0.01 par value, 3 shares authorized and 2 shares issued and outstanding as of December 31, 2016

 

 

 

 

 

 

 

Predecessor additional paid in capital

 

 

 

 

 

 

425,231

 

Successor preferred stock, 5,000,000 shares authorized, none issued and outstanding as of June 30, 2017

 

 

 

 

 

 

 

Successor Class A Common stock, $0.01 par value, 180,000,000 shares authorized and 37,110,630 shares issued and outstanding as of June 30, 2017

 

 

371

 

 

 

 

 

Successor Class B Common stock, $0.01 par value, 20,000,000 shares authorized and 7,871,512 shares issued and outstanding as of June 30, 2017

 

 

79

 

 

 

 

 

Successor additional paid in capital

 

 

948,613

 

 

 

 

 

Retained earnings (accumulated deficit)

 

 

1,682

 

 

 

 

(1,467,398

)

Total stockholders' equity (deficit)

 

 

950,745

 

 

 

 

(1,042,153

)

Total liabilities and stockholders' equity (deficit)

 

$

1,414,771

 

 

 

$

845,987

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

8


 

Chaparral Energy, Inc. and subsidiaries

Consolidated statements of operations

(Unaudited)

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Three months

 

 

 

Three months

 

 

 

ended

 

 

 

ended

 

(in thousands, except share and per share data)

 

June 30, 2017

 

 

 

June 30, 2016

 

Revenues - commodity sales

 

$

74,048

 

 

 

$

65,990

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Lease operating

 

 

23,059

 

 

 

 

22,756

 

Transportation and processing

 

 

3,067

 

 

 

 

2,185

 

Production taxes

 

 

3,383

 

 

 

 

2,882

 

Depreciation, depletion and amortization

 

 

30,851

 

 

 

 

32,964

 

Loss on impairment of oil and gas assets

 

 

 

 

 

 

203,183

 

Loss on impairment of other assets

 

 

 

 

 

 

1,259

 

General and administrative

 

 

8,973

 

 

 

 

6,804

 

Liability management

 

 

 

 

 

 

3,807

 

Cost reduction initiatives

 

 

115

 

 

 

 

14

 

Total costs and expenses

 

 

69,448

 

 

 

 

275,854

 

Operating income (loss)

 

 

4,600

 

 

 

 

(209,864

)

Non-operating (expense) income:

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(5,051

)

 

 

 

(20,153

)

Derivative gains (losses)

 

 

23,474

 

 

 

 

(21,400

)

Other (expense) income, net

 

 

(551

)

 

 

 

210

 

Net non-operating (expense) income

 

 

17,872

 

 

 

 

(41,343

)

Reorganization items, net

 

 

(1,070

)

 

 

 

(5,355

)

Income (loss) before income taxes

 

 

21,402

 

 

 

 

(256,562

)

Income tax expense

 

 

37

 

 

 

 

92

 

Net income (loss)

 

$

21,365

 

 

 

$

(256,654

)

Net income per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.47

 

 

 

*

 

Diluted

 

$

0.47

 

 

 

*

 

Weighted average shares used to compute net income per share:

 

 

 

 

 

 

 

 

 

Basic

 

 

44,982,142

 

 

 

*

 

Diluted

 

 

44,982,142

 

 

 

*

 

 ____________________________________________________________

* Item not disclosed. See “Note 1—Nature of operations and summary of significant accounting policies.”

 

The accompanying notes are an integral part of these consolidated financial statements.

9


 

Chaparral Energy, Inc. and subsidiaries

Consolidated statements of operations—continued

(Unaudited)

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Period from

 

 

 

Period from

 

 

 

 

 

 

 

March 22, 2017

 

 

 

January 1, 2017

 

 

Six months

 

 

 

through

 

 

 

through

 

 

ended

 

(in thousands, except share and per share data)

 

June 30, 2017

 

 

 

March 21, 2017

 

 

June 30, 2016

 

Revenues - commodity sales

 

$

81,856

 

 

 

$

66,531

 

 

$

114,229

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating

 

 

27,318

 

 

 

 

19,941

 

 

 

46,171

 

Transportation and processing

 

 

3,428

 

 

 

 

2,034

 

 

 

4,064

 

Production taxes

 

 

3,699

 

 

 

 

2,417

 

 

 

4,638

 

Depreciation, depletion and amortization

 

 

34,265

 

 

 

 

24,915

 

 

 

64,772

 

Loss on impairment of oil and gas assets

 

 

 

 

 

 

 

 

 

281,079

 

Loss on impairment of other assets

 

 

 

 

 

 

 

 

 

1,259

 

General and administrative

 

 

14,717

 

 

 

 

6,843

 

 

 

13,293

 

Liability management

 

 

 

 

 

 

 

 

 

9,396

 

Cost reduction initiatives

 

 

121

 

 

 

 

629

 

 

 

3,139

 

Total costs and expenses

 

 

83,548

 

 

 

 

56,779

 

 

 

427,811

 

Operating (loss) income

 

 

(1,692

)

 

 

 

9,752

 

 

 

(313,582

)

Non-operating (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(5,701

)

 

 

 

(5,862

)

 

 

(49,807

)

Derivative gains (losses)

 

 

11,359

 

 

 

 

48,006

 

 

 

(9,468

)

Write-off of Senior Note issuance costs, discount and premium

 

 

 

 

 

 

 

 

 

(16,970

)

Other (expense) income, net

 

 

(556

)

 

 

 

1,373

 

 

 

346

 

Net non-operating (expense) income

 

 

5,102

 

 

 

 

43,517

 

 

 

(75,899

)

Reorganization items, net

 

 

(1,690

)

 

 

 

988,727

 

 

 

(5,355

)

Income (loss) before income taxes

 

 

1,720

 

 

 

 

1,041,996

 

 

 

(394,836

)

Income tax expense

 

 

38

 

 

 

 

37

 

 

 

224

 

Net income (loss)

 

$

1,682

 

 

 

$

1,041,959

 

 

$

(395,060

)

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.04

 

 

 

*

 

 

*

 

Diluted

 

$

0.04

 

 

 

*

 

 

*

 

Weighted average shares used to compute net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

44,982,142

 

 

 

*

 

 

*

 

Diluted

 

 

44,982,142

 

 

 

*

 

 

*

 

____________________________________________________________

* Item not disclosed. See “Note 1—Nature of operations and summary of significant accounting policies.”

 

The accompanying notes are an integral part of these consolidated financial statements.

10


 

Chaparral Energy, Inc. and subsidiaries

Consolidated statements of stockholders’ equity (deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

earnings

 

 

 

 

 

 

 

Common stock

 

 

paid in

 

 

(accumulated

 

 

 

 

 

(dollars in thousands)

 

Shares

 

 

Amount

 

 

capital

 

 

deficit)

 

 

Total

 

Balance at December 31, 2016 - Predecessor

 

 

1,392,706

 

 

$

14

 

 

$

425,231

 

 

$

(1,467,398

)

 

$

(1,042,153

)

Restricted stock forfeited

 

 

(1,454

)

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock cancelled

 

 

(8,964

)

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

194

 

 

 

 

 

 

194

 

Net income

 

 

 

 

 

 

 

 

 

 

 

1,041,959

 

 

 

1,041,959

 

Balance at March 21, 2017 - Predecessor

 

 

1,382,288

 

 

 

14

 

 

 

425,425

 

 

 

(425,439

)

 

 

 

Cancellation of Predecessor equity

 

 

(1,382,288

)

 

 

(14

)

 

 

(425,425

)

 

 

425,439

 

 

 

 

Balance at March 21, 2017 - Predecessor

 

 

 

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Successor common stock - rights offering

 

 

4,197,210

 

 

$

42

 

 

$

49,985

 

 

$

 

 

$

50,027

 

Issuance of Successor common stock - backstop premium

 

 

367,030

 

 

 

4

 

 

 

 

 

 

 

 

4

 

Issuance of Successor common stock - settlement of claims

 

 

40,417,902

 

 

 

404

 

 

 

898,510

 

 

 

 

 

 

898,914

 

Issuance of Successor warrants

 

 

 

 

 

 

 

118

 

 

 

 

 

 

118

 

Balance at March 21, 2017 - Successor

 

 

44,982,142

 

 

 

450

 

 

 

948,613

 

 

 

 

 

 

949,063

 

Net income

 

 

 

 

 

 

 

 

 

 

 

1,682

 

 

 

1,682

 

Balance at June 30, 2017 - Successor

 

 

44,982,142

 

 

$

450

 

 

$

948,613

 

 

$

1,682

 

 

$

950,745

 

 

The accompanying notes are an integral part of these consolidated financial statements.

11


 

Chaparral Energy, Inc. and subsidiaries

Consolidated statements of cash flows

(Unaudited)

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Period from

 

 

 

Period from

 

 

 

 

 

 

 

March 22, 2017

 

 

 

January 1, 2017

 

 

Six months

 

 

 

through

 

 

 

through

 

 

ended

 

(in thousands)

 

June 30, 2017

 

 

 

March 21, 2017

 

 

June 30, 2016

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

1,682

 

 

 

$

1,041,959

 

 

$

(395,060

)

Adjustments to reconcile net loss to net cash provided by operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash reorganization items

 

 

 

 

 

 

(1,012,090

)

 

 

 

Depreciation, depletion and amortization

 

 

34,265

 

 

 

 

24,915

 

 

 

64,772

 

Loss on impairment of assets

 

 

 

 

 

 

 

 

 

282,338

 

Write-off of Senior Note issuance costs, discount and premium

 

 

 

 

 

 

 

 

 

16,970

 

Derivative (gains) losses

 

 

(11,359

)

 

 

 

(48,006

)

 

 

9,468

 

Loss (gain) on sale of assets

 

 

863

 

 

 

 

(206

)

 

 

(66

)

Other

 

 

1,120

 

 

 

 

645

 

 

 

1,998

 

Change in assets and liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(11,973

)

 

 

 

198

 

 

 

(12,006

)

Inventories

 

 

1,596

 

 

 

 

466

 

 

 

1,837

 

Prepaid expenses and other assets

 

 

1,830

 

 

 

 

(497

)

 

 

(557

)

Accounts payable and accrued liabilities

 

 

(14,098

)

 

 

 

8,733

 

 

 

22,519

 

Revenue distribution payable

 

 

1,983

 

 

 

 

(1,875

)

 

 

(354

)

Deferred compensation

 

 

582

 

 

 

 

143

 

 

 

(424

)

Net cash provided by (used in) operating activities

 

 

6,491

 

 

 

 

14,385

 

 

 

(8,565

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenditures for property, plant, and equipment and oil and natural gas properties

 

 

(61,198

)

 

 

 

(31,179

)

 

 

(88,901

)

Proceeds from asset dispositions

 

 

1,929

 

 

 

 

1,884

 

 

 

487

 

Proceeds from derivative instruments

 

 

8,355

 

 

 

 

1,285

 

 

 

74,847

 

Net cash used in investing activities

 

 

(50,914

)

 

 

 

(28,010

)

 

 

(13,567

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from long-term debt

 

 

18,000

 

 

 

 

270,000

 

 

 

181,000

 

Repayment of long-term debt