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Commitments and contingencies
9 Months Ended
Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and contingencies
Commitments and contingencies

Standby letters of credit (“Letters”) available under our credit facility are used in lieu of surety bonds with various organizations for liabilities relating to the operation of oil and natural gas properties. We had Letters outstanding totaling $0 as of September 30, 2019 and $869 as of December 31, 2018. When amounts under the Letters are paid by the lenders, interest accrues on the amount paid at the same interest rate applicable to borrowings under the credit facility. No amounts were paid by the lenders under the Letters; therefore, we paid no interest on the Letters during the nine months ended September 30, 2019 or 2018.

Litigation and Claims

Chapter 11 Proceedings. Commencement of the Chapter 11 Cases automatically stayed many of the proceedings and actions against us noted below as well as other claims and actions that were or could have been brought prior to May 9, 2016 (“Petition Date”), and the claims remain subject to Bankruptcy Court jurisdiction. With respect to the proofs of claim asserted in the Chapter 11 Cases arising from the proceedings or actions below that were initiated prior to the Petition Date, we are unable to estimate the amount of such claims that will be allowed by the Bankruptcy Court due to, among other things, the complexity and number of legal and factual issues which are necessary to determine the amount of such claims and uncertainties related to the nature of defenses asserted in connection with the claims, the potential size of the putative classes, and the types of the properties and scope of agreements related to such claims. As a result, no reserves were established in respect of such proofs of claims or any of the proceedings or actions described below. To the extent that any of the legal proceedings were filed and relate to one or more claims accruing prior to the Petition Date and result in a claim being allowed against us, pursuant to the terms of the Reorganization Plan, such claims will be satisfied through the issuance of new stock in the Company or, if the amount of such claim is below the convenience class threshold, through cash settlement. Of the total alleged dollar amount of claims still unresolved, the large majority, as measured by the alleged amount of such claims, consists of claims from the Naylor Farms case described below. If the Bankruptcy Court were to allow the remaining unresolved proofs of claims from any of these cases, the Company, pursuant to the Plan of Reorganization, would be required to issue additional shares to the holders of such allowed proofs of claim that are in excess of a convenience class threshold, which would result in dilution to existing stockholders.

Naylor Farms, Inc., individually and as class representative on behalf of all similarly situated persons v. Chaparral Energy, L.L.C (the “Naylor Farms case”). On June 7, 2011, an alleged class action was filed against us in the United States District Court for the Western District of Oklahoma (“Naylor Trial Court”) alleging that we improperly deducted post-production costs from royalties paid to plaintiffs and other non-governmental Royalty Interest owners from crude oil and natural gas wells we operate in Oklahoma. The plaintiffs have alleged a number of claims, including breach of contract, fraud, breach of fiduciary duty, unjust enrichment, and other claims and seek termination of leases, recovery of compensatory damages, interest, punitive damages and attorney fees on behalf of the alleged class. Plaintiffs indicated they seek damages in excess of $5,000, the majority of which would consist of interest and may increase with the passage of time.

The Naylor Trial Court certified a class of plaintiffs with oil and gas leases containing specific language with claims beginning June 1, 2006 through present and our appeal of that class certification was subsequently denied by the United States Court of Appeals for the Tenth Circuit.

In addition to filing claims on behalf of the named plaintiffs and putative class members, plaintiffs' attorneys, on behalf of the putative class, filed amended proofs of claims in our Chapter 11 Cases in excess of $90,000 inclusive of actual and punitive damages, statutory interest and attorney fees. The Company's objection to treatment of the claims on a class basis is the subject of an appeal pending with the United States Court of Appeals for the Third Circuit.

We continue to dispute the plaintiffs’ allegations and are objecting to the claims both individually and on a class-wide basis. To the extent that any claims are allowed, determined or settled in favor of plaintiffs and they accrued prior to the Petition Date, pursuant to the terms of the Reorganization Plan, such claims will be satisfied through the issuance of new shares of common stock in the Company.

Lacheverjuan Bennett et al. v. Chaparral Energy, L.L.C., et al.  On March 26, 2018, a group of twenty-seven individual plaintiffs filed a lawsuit in the District Court of Logan County, State of Oklahoma against twenty-three named defendants, including us, and twenty-five unnamed defendants. Plaintiffs all claim to be property owners and residents of Logan County, Oklahoma, and allege the defendants, all oil and gas companies which have engaged in injection well operations, induced earthquakes which have caused damage to real and personal property, and caused emotional damages. Plaintiffs claim absolute liability for ultra-hazardous activities, negligence, gross negligence, public and private nuisance, and trespass, and ask for compensatory and punitive damages, and attorney fees and costs. On November 1, 2019, we were dismissed from the case. 

Hallco Petroleum, Inc. v. Chaparral Energy, L.L.C. On November 7, 2017, Hallco Production, LLC (“Hallco”) filed a lawsuit against us in the District Court of Kay County, State of Oklahoma. Plaintiffs alleged carbon dioxide which was injected for enhanced oil recovery in wells operated by us in the North Burbank Unit migrated to wells operated by Hallco, damaging its salt water disposal well and therefore preventing operation of, and production from, all wells on Hallco’s lease. Plaintiffs allege the migration of carbon dioxide constituted trespass, and further allege negligence and nuisance. Plaintiff seeks actual damages in excess of  $75, plus punitive damages in an unspecified amount. Because we sold the EOR wells on November 17, 2017, Hallco filed an amended petition on March 6, 2018 to add the purchaser, Perdure Petroleum, LLC, as an additional defendant in the lawsuit. Plaintiff claims the damage is ongoing. While we dispute the plaintiff’s claims, dispute the remedies requested are available under Oklahoma law, and have been vigorously defending the case, we have reached an agreement in principle to settle the claims within insurance policy limits.

We are involved in various other legal proceedings including, but not limited to, commercial disputes, claims from royalty and surface owners (including those alleging damages from induced earthquakes), property damage claims, quiet title actions, personal injury claims, employment claims, and other matters which arise in the ordinary course of business. In addition, other proofs of claim have been filed in our bankruptcy case which we anticipate repudiating. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect any of them individually to have a material effect on our financial condition, results of operations or cash flows.

Contractual obligations

We have numerous contractual commitments in the ordinary course of business including debt service requirements, operating leases, financing leases, well drilling obligations and purchase obligations. Our operating leases currently consist of an office space lease at our headquarters, which we entered into in August 2019, and leases for drilling rigs, which have remaining terms of up to 3 months. Our financing leases consist of leases on our fleet vehicles. We previously had operating leases and financing leases on CO2 recycle compressors with terms of seven years which were terminated in September 2019 (see “Note 5 - Leases”). As of September 30, 2019, other than additional borrowings under our credit facility, the repayment of the mortgage on our headquarters, the termination of our CO2 recycle compressor leases and our new leases for fleet vehicles, we did not have material changes to our contractual commitments since December 31, 2018.