BOSTON (Reuters) - Chapparal Energy Inc, a small oil and gas producer whose share price has plummeted 82% this year, plans to award $2.15 million in retention bonuses to five senior executives instead of granting long-term stock awards.
Retention awards have become a red flag in the hard-hit energy sector, as boards of directors work to keep their executive teams in place amid unprecedented ructions in the oil market. Fuel demand is down 30% worldwide, and numerous companies in the U.S. shale space are looking at potential restructuring.
Chaparral Chief Executive Charles Duginski would receive $725,000, the most among the group, if he stays with the Oklahoma City-based company for the next 12 months. Chapparal disclosed the plan on Tuesday evening, in an amended annual report filing with the U.S. Securities and Exchange Commission.
Last month, Whiting Petroleum Corp agreed to pay more than $13 million in bonuses to several executives. About a week later, Whiting filed to restructure the company under the Chapter 11 bankruptcy code.
Chapparal shares are down 82% this year, trading at 30 cents on Tuesday morning. The company produced 26,300 barrels of oil equivalent per day in 2019.
Reporting by Tim McLaughlin; editing by Jonathan Oatis