follow us Twitter Facebook
OKLAHOMA INDEPENDENT PETROLEUM ASSOCIATION ABOUT | CONTACT
OIPA News
<< Back to News

Chaparral Energy CEO Earl Reynolds.


Lt. gov. candidate Matt Pinnell and Don Burdick


Liz Brown and Tom Stapleton.


Ryan Dillman, Craig Northcutt and Zac Northcutt.

Earl Reynolds talks about the ‘new’ Chaparral Energy at OIPA Wildcatter Luncheon

October 18, 2018
Earl Reynolds told the OIPA Wildcatter Luncheon crowd that spreading the word about what Oklahoma offers and counterbalancing the negative news about the state’s efforts to tax the oil and natural gas sector is critical to the continued health of the state’s mainstay industry.

Reynolds, president and CEO of Chaparral Energy, was the featured speaker at OIPA’s Wildcatter Luncheon on Oct. 16.

The luncheons help raise awareness of the OIPA Wildcatters PAC, which funds the association’s direct involvement in state and federal legislative races by supporting legislative friends and forging new relationships with emerging political leaders.

“This group, the Wildcatters PAC, is absolutely critical today,” Reynolds said. “It’s critical for investors to understand what Oklahoma offers.”

He said in talking to investors about the Chaparral story, he’s seen that news of the state’s tax and regulatory climate — which is less growth-focused than in previous years — has spread.

“You can’t grow unless you have access to external capital,” he said. “And it’s growth that allows you to create jobs.”

Reynolds said Chaparral is building a company he and his colleagues want to be the next big growth story in Oklahoma.

“We’re a totally different company today than what you may have known in the past.

“I presented to the Wildcatters Club in 2012 or 2013. Back then we were primarily a vertical driller, in Oklahoma and North Dakota and into west and south Texas, and we had a strong position in enhance oil recovery.”

The company now is essentially a pure-play company, all horizontal drilling, and has divested its EOR business.

The last 18 months have been a challenge, he said, as the company went through and emerged from a Chapter 11 process, named Reynolds CEO and named an all-new, independent board.

“We developed a brand-new strategy predicated on one simple thing — to be the premier pure-play STACK company for investors,” he said.

And Chaparral is focused on doing that here in the Mid-Continent.

“While the rocks in Oklahoma may not be the Permian rocks, they still are very good and very promising,” Reynolds said.


Chaparral currently holds almost 120,000 STACK/Merge acres and about 315,000 surface acres in the Mid-Continent.

“We knew we had to do several things to optimize our portfolio. Our first task was to sell our EOR business and use the proceeds to pay down debt.”

Today, the company’s production is about 20,000 BOE a day, of which 13,000 BOE a day is in the STACK.

“I’ve had the privilege to be OIPA legislative chair for the past few months. Legislators ask why we choose to invest in Oklahoma, and there are several pieces.

“One is favorable geology. It’s always about the geology.”

Oklahoma also has great infrastructure, in the service sector as well as the midstream, he said.

“Other basins are having problems right now getting their product to market. We’re seeing none of those problems.

Reynolds said Chaparral’s foundation rests on the company’s four values — results, technical excellence, relationships and integrity.

“If you put those last three things together, you will deliver results. And we think about those things every day.”

Chaparral stock began trading on the New York Stock Exchange in July.

“We came out of Chapter 11, and we knew we had to have access to a more broad investor base for us to grow how we wanted to grow,” Reynolds said.

The company’s has seen excellent returns in the STACK/Merge, he said, exceeding or in-line with current type curve expectations.

“That’s exactly where we want to be, if we want to be premier,” he said. “You put the costs together with the results from a production standpoint, you deliver the kinds of returns we’re looking for.”

 
<< Back to news


AD

Topic

AD