Item 1.01 Entry into a Material Definitive Agreement

As previously reported, on July 15, 2020, Chaparral Energy, Inc. (the "Company"), certain lenders party thereto (the Lenders"), Royal Bank of Canada, as Administrative Agent and Issuing Bank (the "Agent"), and the other parties thereto, entered into a Limited Forbearance Agreement (the "Forbearance Agreement") under the Company's Tenth Restated Credit Agreement, dated as of December 21, 2017 (as amended, modified or supplemented, the "Credit Agreement"). Pursuant to the Forbearance Agreement, the Lenders agreed, during the forbearance period, to forbear from exercising any remedies under the Credit Agreement for any default or event of default resulting from any failure by the Company or any of its subsidiaries to make all or any part of the required interest payment due on July 15, 2020 with respect to the Company's 8.75% senior notes due 2023 (the "Notes"). The forbearance period under the Forbearance Agreement began on July 15, 2020 and ends on 5:00 p.m. (Central Time) on July 29, 2020, unless terminated earlier in accordance with the terms thereof.

The Forbearance Agreement provided that the forbearance period would terminate prior to its scheduled expiration if certain early termination milestones were not met. These early termination milestones effectively required that the Company reach agreement with the Administrative Agent no later than 5:00 p.m. (Central Time) on July 22, 2020 with respect to the timeline and process for unwinding the Company's hedges (the "Hedge Process Agreement Deadline")

On July 22, 2020, prior to the Hedge Process Agreement Deadline, the Agent approved of the timeline and process for unwinding the Company's hedges. The timeline and process were subsequently documented in the First Amendment to Limited Forbearance Agreement (the "First Amendment"), which was executed by the Company, the Lenders, the Agent, and the other parties thereto, effective as of July 24, 2020.

The First Amendment replaced the original early termination milestones with the requirement that on July 31, 2020, at or prior to 3:00 p.m. (Eastern Time), the Company must:





  •   unwind all of its hedges; and




    •     use all or a portion of the hedge unwind proceeds to repay a portion of
          the borrowings under the Credit Agreement, together with accrued interest
          and any applicable break funding payments under the Credit Agreement.

The First Amendment did not change the amount of the hedge unwind proceeds required for repaying the Credit Agreement borrowings. Therefore, if the total net cash proceeds are less than or equal to $33 million, then the Loan Repayment is equal to $24 million or the total amount of those proceeds, whichever is less. If the total net cash proceeds are greater than $33 million, then the Loan Repayment is equal to the amount by which those proceeds exceed $9 million.

The Company's hedge counterparties are parties to the First Amendment and have agreed to unwind the hedges, as long as the Company agrees to the consensual termination of all hedges in existence on July 15, 2020. The First Amendment provides that the loan repayment described above cannot be used by the Company to satisfy all or any portion of the remaining borrowing base deficiency payments it is required to make under the Credit Agreement, including the $12.5 million deficiency payment required to be made on or before August 2, 2020.

The First Amendment also provides that such termination of the Company's hedges will not result in an automatic reduction of the Company's borrowing base under the Credit Agreement.

The foregoing descriptions of the Forbearance Agreement and the First Amendment are a summary only, do not purport to be complete, and are qualified in their entirety by reference to the complete text of the Forbearance Agreement, which was filed as Exhibit 99.1 to our Current Report on Form 8-K filed on July 15, 2020, and the complete text of the First Amendment, which is filed as Exhibit 99.1 to this Current Report, each of which is incorporated by reference herein.





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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an

Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.






(d) Exhibits

The exhibit listed in the following Exhibit Index is filed as part of this Current Report on Form 8-K.





Exhibit
  No.                                     Description

99.1           First Amendment to Forbearance Agreement dated as of July 24,  2020,
             by and among the Company, the subsidiary guarantors party thereto,
             certain Lenders identified therein, Royal Bank of Canada, as
             Administrative Agent and Issuing Bank, and the hedge counterparties
             party thereto.




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