In the spring of 1988, oil companies were slashing jobs throughout the country as crashing oil prices sparked a deep industry downturn.
In the midst of that difficult environment, brothers Mark and Chuck Fischer co-founded Oklahoma City oil company Chaparral Energy Corp.
“Because of that time frame, we were able to acquire properties at very reasonable and respectful prices,” Mark Fischer, who is Chaparral's CEO, told The Oklahoman this week. “That allowed us to establish a base.”
When the Fischers started Chaparral with just two employees, they had high hopes for success, but they could not imagine the company would grow to 750 employees with operations in six states.
“The company has done very well,” Mark Fischer said. “It has not been without its ups and downs, but we never thought we would be here. We've been blessed with management and people to make it grow.”
The Oklahoma City oil and natural gas company will celebrate its 25th anniversary Wednesday.
Throughout much of its history, Chaparral has focused on carbon dioxide waterflooding, a process where companies pump carbon dioxide and water into old oil fields to boost oil production. Chaparral transports carbon dioxide mostly from fertilizer plants through more than 400 miles of pipeline to some of the state's oldest fields.
The company's newest project is the North Burbank in Osage County.
First drilled more than 90 years ago, the North Burbank is where Frank Phillips got his start. More than 319 million barrels of oil already have been recovered from the field. Chaparral expects to extract an additional 80 million to 100 million barrels.
Chaparral also is one of the larger players in the growing Mississippi Lime, which underlies much of northern Oklahoma and western Kansas.
Even though the drilling and recovery operations are very different between Chaparral's two focus areas, adding the Mississippi Lime production was a natural progression for the Chaparral, Fischer said.
The rock layer underlies about 60,000 acres that Chaparral already controlled for its carbon dioxide flooding operations.
“It's a play we had a nice position in, so it made sense for us to start exploring it,” Fischer said.
Chaparral has remained focused on oil even when most producers concentrated on natural gas as prices surged before plummeting in the past three years.
Oil represents about 65 percent of Chaparral's reserves and about 60 percent of its current production.
“I generally always had the opinion that oil is a global commodity while gas is a national commodity,” Fischer said. “When you look at these oil plays now, the amount of oil we're going to generate is very significant from a U.S. standpoint, but from a global perspective, it's only about six percent. Chances are good that we are not going to see a large oil price drop like we saw with gas.”
While the state's largest publicly traded energy companies tend to grab the most attention, Chaparral and the state's privately held energy companies contribute heavily to the economy and the state's energy industry, said Jake Dollarhide, CEO of Tulsa-based Longbow Asset Management Co.
“Small businesses and privately held companies are the lifeblood of our economy,” Dollarhide said. “They're what keep everything going. The high-profile publicly traded names get the attention, but it's the small business and big businesses that are privately held that are able to take the risk and do things that public companies can't do.”
Chaparral for years has flirted with becoming publicly traded. Fischer said he expects to complete an initial public offering in 2014.
“Because we have been around for 25 years, many of our shareholders have gotten older,” Fischer said. “With that, they are beginning to ask for a liquidity event that would allow them to derive the benefits of what has been expended. We could look at an IPO, or we could look at the sale of the company.
“I've been very pro-oriented to an IPO as opposed to a sale. Chaparral has been my baby from the start. I would like to see it continue to be a large player in the Mid-Continent and in Oklahoma.”