US independent Chaparral Energy expects to emerge from Chapter 11 bankruptcy by the end of the month after its reorganisation plan was approved by a US court.

Chaparral said on Monday that its plan was confirmed by the US Bankruptcy Court of Delaware after receiving support from bondholders and lenders.

As a result, the company will now exit Chapter 11 by the end of March and eliminate $1.2 billion of outstanding debt, it said.

"We are tremendously pleased to announce the confirmation of our plan by the court today," newly appointed chief executive K Earl Reynolds said.

"Thanks to the hard work of everyone involved with this process, Chaparral will emerge from Chapter 11 within the next few weeks as one of the most financially-stable oil and gas companies of its size in the industry. This security, coupled with our outstanding STACK assets, will be the driving force behind Chaparral’s success for decades to come," Reynolds said.

Chaparral filed for Chapter 11 in May last year as it had between $50 million and $100 million in assets, but between $1 billion and $10 billion in liabilities.

However, under the confirmed plan, the company’s unsecured bondholders and general unsecured creditors will own 100% of the company’s ownership interest.

Upon emergence, Chaparral expects to have liquidity in excess of $100 million, cash on hand and a reserve based lending facility with an initial borrowing base of $225 million, as well as an additional $150 million term loan.

Both the revolver and term loan will mature in four years, Chaparral said.

Going forward, the company will also be governed by a new seven-member, independent board of directors that will include, in addition to Reynolds, Douglas Brooks, Matt Cabell, Robert Heinemann, Sam Langford, Ken Moore and Gysle Shellum.

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Chaparral to exit bankruptcy soon