By OGJ editors
HOUSTON, Oct. 14 -- Privately owned independent Chaparral Energy Inc., Oklahoma City, and publicly held United Refining Energy Corp., a special purpose acquisition company, agreed to merge in a deal valued by company officials at $1.8 billion.
The combination is expected to close by Dec. 11 and will retain the Chaparral name. Founded in 1988, Chaparral has a large inventory of low-risk exploitation prospects as well as near-term, high-potential drilling projects. Since 2003, management has increased the company's reserves and production by 21%/year. At the end of June, it had proved reserves of 146 million boe, 62% of which is oil. Production in this year’s first half averaged 21,000 boe/d.
United Refining in New York was formed last December to acquire energy assets through merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar combinations. At the end of September, it held $452 million in trust.
Chaparral has acquired and enhanced properties in its core areas of the Midcontinent and the Permian basin, as well as in the Gulf Coast, the Ark-La-Tex region, North Texas, and the Rocky Mountains. It has several enhanced oil recovery (EOR) projects under way using carbon dioxide injection and has identified other candidates with the potential for substantial reserve and production growth, said company officials.
John A. Catsimatidis, United Refining’s chief executive and chairman, will become executive chairman of the combined company. Chaparral’s senior management will remain in place, including cofounder Mark A. Fischer, chairman and chief executive; Joseph O. Evans, chief financial officer; and Robert W. Kelly II, senior vice-president and general counsel.
“Chaparral's management team has demonstrated the ability to find lucrative oil and gas properties at prices that have resulted in superior returns on investment,” said Catsimatidis. The merger is subject to approval of United Refining shareholders.
Fischer said, “This merger will give Chaparral access to capital we need to exploit our large inventory of drilling and development opportunities and to significantly step up our EOR program.”
Chaparral Energy, United Refining to merge
By OGJ editors