Oklahoma City, Okla.-based Chaparral Energy has closed the $170 million sale of its North Burbank (Oklahoma) and Texas Panhandle enhanced oil recovery (EOR) assets to privately-held Perdure Petroleum.
The properties represented roughly 5,700 barrels oil-equivalent per day (BOE/d) of production of the company’s 24,500 BOE/d of total production, Kallanish Energy reports.
EOR is the process of obtaining stranded oil not produced from an oil reservoir through certain extraction processes, such as thermal recovery, gas injection, chemical injection and water flooding.
The transition away from EOR operations allows the company to focus its capital and operational activity almost exclusively on developing its more than 3,500 STACK drilling locations across its 110,000-net-acre position in Oklahoma’s Kingfisher, Garfield and Canadian counties.
Proceeds from the sale was used to fully repay the outstanding $149.2 million balance on its term loan and also repay a portion of its credit facility.
In addition, Chaparral’s bank lending group confirmed its $225 million borrowing base under its bank credit facility following the sale and associated monetization of certain commodity derivatives.
As of Sept. 30, Chaparral had $153 million outstanding on its credit facility and liquidity of $93.6 million, consisting of $71.2 million undrawn capacity on its credit facility and $22.4 million of cash.
Pro forma for the divestiture, the company’s liquidity is roughly $105 million.