Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Cover page. | ||
Entity Central Index Key | 0001168054 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-31446 | |
Entity Registrant Name | CIMAREX ENERGY CO | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 45-0466694 | |
Entity Address, Address Line One | 1700 Lincoln Street, Suite 3700 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80203 | |
City Area Code | 303 | |
Local Phone Number | 295-3995 | |
Title of 12(b) Security | Common Stock ($0.01 par value) | |
Trading Symbol | XEC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 101,457,009 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 19,414 | $ 800,666 |
Accounts receivable, net of allowance: | ||
Trade | 111,745 | 122,065 |
Oil and gas sales | 267,821 | 315,063 |
Gas gathering, processing, and marketing | 7,796 | 17,072 |
Oil and gas well equipment and supplies | 58,306 | 55,553 |
Derivative instruments | 42,957 | 101,939 |
Prepaid expenses | 8,985 | 7,554 |
Other current assets | 3,032 | 4,227 |
Total current assets | 520,056 | 1,424,139 |
Oil and gas properties at cost, using the full cost method of accounting: | ||
Proved properties | 19,846,426 | 18,566,757 |
Unproved properties and properties under development, not being amortized | 1,564,074 | 436,325 |
Gross oil and gas properties | 21,410,500 | 19,003,082 |
Less—accumulated depreciation, depletion, amortization, and impairment | (15,659,363) | (15,287,752) |
Net oil and gas properties | 5,751,137 | 3,715,330 |
Fixed assets, net of accumulated depreciation of $356,631 and $324,631, respectively | 526,429 | 257,686 |
Goodwill | 727,573 | 620,232 |
Derivative instruments | 613 | 9,246 |
Other assets | 70,126 | 35,451 |
Total assets | 7,595,934 | 6,062,084 |
Accounts payable: | ||
Trade | 104,142 | 76,927 |
Gas gathering, processing, and marketing | 14,934 | 29,887 |
Accrued liabilities: | ||
Exploration and development | 108,299 | 124,674 |
Taxes other than income | 38,201 | 33,622 |
Other | 250,710 | 221,159 |
Derivative instruments | 50,056 | 27,627 |
Revenue payable | 186,206 | 194,811 |
Operating leases | 62,119 | 0 |
Total current liabilities | 814,667 | 708,707 |
Long-term debt principal | 2,000,000 | 1,500,000 |
Less—unamortized debt issuance costs and discounts | (15,770) | (11,446) |
Long-term debt, net | 1,984,230 | 1,488,554 |
Deferred income taxes | 439,429 | 334,473 |
Asset retirement obligation | 157,381 | 152,758 |
Derivative instruments | 840 | 2,267 |
Operating leases | 191,413 | 0 |
Other liabilities | 64,461 | 45,539 |
Total liabilities | 3,652,421 | 2,732,298 |
Commitments and contingencies (Note 10) | ||
Redeemable preferred stock - 8.125% Series A Cumulative Perpetual Convertible Preferred Stock, $0.01 par value, 62,500 shares authorized and issued and no shares authorized and issued, respectively (Note 5) | 81,620 | 0 |
Stockholders’ equity: | ||
Common stock, $0.01 par value, 200,000,000 shares authorized, 101,473,177 and 95,755,797 shares issued, respectively | 1,015 | 958 |
Additional paid-in capital | 3,223,331 | 2,785,188 |
Retained earnings | 635,339 | 542,885 |
Accumulated other comprehensive income | 2,208 | 755 |
Total stockholders’ equity | 3,861,893 | 3,329,786 |
Total liabilities and stockholders' equity | $ 7,595,934 | $ 6,062,084 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation on fixed assets | $ 356,631 | $ 324,631 |
Redeemable preferred stock dividend rate (as a percent) | 8.125% | 8.125% |
Redeemable preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Redeemable preferred stock authorized (shares) | 62,500 | 0 |
Redeemable preferred stock issued (shares) | 62,500 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock authorized (shares) | 200,000,000 | 200,000,000 |
Common stock issued (shares) | 101,473,177 | 95,755,797 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | ||||
Revenues | $ 546,463 | $ 556,274 | $ 1,123,420 | $ 1,123,408 |
Costs and expenses: | ||||
Depreciation, depletion, and amortization | 213,327 | 143,388 | 403,744 | 276,247 |
Asset retirement obligation | 2,157 | 2,053 | 4,206 | 3,113 |
Production | 87,726 | 79,215 | 164,959 | 150,486 |
Transportation, processing, and other operating | 48,331 | 51,933 | 101,939 | 97,098 |
Gas gathering and other | 13,605 | 9,467 | 25,925 | 19,290 |
Taxes other than income | 41,033 | 27,930 | 74,727 | 58,118 |
General and administrative | 24,911 | 19,739 | 53,995 | 43,060 |
Stock compensation | 6,494 | 3,095 | 13,207 | 9,825 |
(Gain) loss on derivative instruments, net | (40,768) | 21,699 | 74,684 | 17,540 |
Other operating expense, net | 590 | 5,252 | 8,916 | 5,455 |
Total costs and expenses | 397,406 | 363,771 | 926,302 | 680,232 |
Operating income | 149,057 | 192,503 | 197,118 | 443,176 |
Other (income) and expense: | ||||
Interest expense | 24,674 | 16,895 | 45,079 | 33,678 |
Capitalized interest | (16,805) | (4,850) | (25,547) | (9,660) |
Loss on early extinguishment of debt | 0 | 0 | 4,250 | 0 |
Other, net | (2,167) | (2,605) | (4,408) | (7,172) |
Income before income tax | 143,355 | 183,063 | 177,744 | 426,330 |
Income tax expense | 34,046 | 42,066 | 42,119 | 99,015 |
Net income | $ 109,309 | $ 140,997 | $ 135,625 | $ 327,315 |
Earnings per share to common stockholders: | ||||
Basic (USD per share) | $ 1.07 | $ 1.48 | $ 1.34 | $ 3.44 |
Diluted (USD per share) | $ 1.07 | $ 1.48 | $ 1.34 | $ 3.44 |
Comprehensive income: | ||||
Net income | $ 109,309 | $ 140,997 | $ 135,625 | $ 327,315 |
Other comprehensive income: | ||||
Change in fair value of investments, net of tax of $89, $57, $428 and $1, respectively | 304 | 192 | 1,453 | 2 |
Total comprehensive income | 109,613 | 141,189 | 137,078 | 327,317 |
Oil sales | ||||
Revenues: | ||||
Revenues | 411,766 | 342,184 | 761,072 | 693,907 |
Gas and NGL sales | ||||
Revenues: | ||||
Revenues | 126,044 | 202,202 | 343,959 | 405,920 |
Gas gathering and other | ||||
Revenues: | ||||
Revenues | 9,769 | 11,810 | 20,031 | 23,262 |
Gas marketing | ||||
Revenues: | ||||
Revenues | $ (1,116) | $ 78 | $ (1,642) | $ 319 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Change in fair value investments, tax | $ 89 | $ 57 | $ 428 | $ 1 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 135,625 | $ 327,315 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, depletion, and amortization | 403,744 | 276,247 |
Asset retirement obligation | 4,206 | 3,113 |
Deferred income taxes | 42,119 | 99,732 |
Stock compensation | 13,207 | 9,825 |
Loss on derivative instruments, net | 74,684 | 17,540 |
Settlements on derivative instruments | (2,814) | (19,919) |
Loss on early extinguishment of debt | 4,250 | 0 |
Amortization of debt issuance costs and discounts | 1,502 | 1,456 |
Changes in non-current assets and liabilities | 2,749 | 713 |
Other, net | 8,152 | 723 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 117,692 | 15,012 |
Other current assets | (761) | 1,886 |
Accounts payable and other current liabilities | (140,272) | (29,304) |
Net cash provided by operating activities | 664,083 | 704,339 |
Cash flows from investing activities: | ||
Acquisition of Resolute Energy, net of cash acquired (Note 13) | (284,441) | 0 |
Oil and gas capital expenditures | (711,757) | (650,807) |
Other capital expenditures | (40,141) | (56,112) |
Sales of oil and gas assets | 13,233 | 34,842 |
Sales of other assets | 434 | 525 |
Net cash used by investing activities | (1,022,672) | (671,552) |
Cash flows from financing activities: | ||
Borrowings of long-term debt | 1,710,310 | 0 |
Repayments of long-term debt | (2,081,000) | 0 |
Financing, underwriting, and debt redemption fees | (11,791) | 0 |
Finance lease payments | (1,555) | 0 |
Dividends paid | (38,647) | (22,801) |
Employee withholding taxes paid upon the net settlement of equity-classified stock awards | (654) | (946) |
Proceeds from exercise of stock options | 674 | 1,249 |
Net cash used by financing activities | (422,663) | (22,498) |
Net change in cash and cash equivalents | (781,252) | 10,289 |
Cash and cash equivalents at beginning of period | 800,666 | 400,534 |
Cash and cash equivalents at end of period | $ 19,414 | $ 410,823 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income |
Balance at beginning of period (shares) at Dec. 31, 2017 | 95,437 | ||||
Balance at beginning of period at Dec. 31, 2017 | $ 2,568,278 | $ 954 | $ 2,764,384 | $ (199,259) | $ 2,199 |
Increase (Decrease) in Stockholders' Equity | |||||
Dividends paid on stock awards subsequently forfeited | 7 | 3 | 4 | ||
Dividends declared on common stock | (15,271) | (15,271) | |||
Net income | 186,318 | 186,318 | |||
Unrealized change in fair value of investments, net of tax | (190) | (190) | |||
Issuance of restricted stock awards (shares) | 2 | ||||
Issuance of restricted stock awards | 0 | ||||
Common stock reacquired and retired (shares) | (3) | ||||
Common stock reacquired and retired | (305) | (305) | |||
Restricted stock forfeited and retired (shares) | (7) | ||||
Restricted stock forfeited and retired | 0 | ||||
Exercise of stock options (shares) | 4 | ||||
Exercise of stock options | 345 | 345 | |||
Stock-based compensation | 12,411 | 12,411 | |||
Balance at end of period (shares) at Mar. 31, 2018 | 95,433 | ||||
Balance at end of period at Mar. 31, 2018 | 2,751,593 | $ 954 | 2,761,567 | (12,937) | 2,009 |
Balance at beginning of period (shares) at Dec. 31, 2017 | 95,437 | ||||
Balance at beginning of period at Dec. 31, 2017 | 2,568,278 | $ 954 | 2,764,384 | (199,259) | 2,199 |
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 327,315 | ||||
Unrealized change in fair value of investments, net of tax | 2 | ||||
Balance at end of period (shares) at Jun. 30, 2018 | 95,393 | ||||
Balance at end of period at Jun. 30, 2018 | 2,886,498 | $ 954 | 2,770,532 | 112,811 | 2,201 |
Balance at beginning of period (shares) at Mar. 31, 2018 | 95,433 | ||||
Balance at beginning of period at Mar. 31, 2018 | 2,751,593 | $ 954 | 2,761,567 | (12,937) | 2,009 |
Increase (Decrease) in Stockholders' Equity | |||||
Dividends paid on stock awards subsequently forfeited | 39 | 26 | 13 | ||
Dividends declared on common stock | (15,241) | 21 | (15,262) | ||
Net income | 140,997 | 140,997 | |||
Unrealized change in fair value of investments, net of tax | 192 | 192 | |||
Issuance of restricted stock awards (shares) | 27 | ||||
Issuance of restricted stock awards | 0 | ||||
Common stock reacquired and retired (shares) | (5) | ||||
Common stock reacquired and retired | (641) | (641) | |||
Restricted stock forfeited and retired (shares) | (75) | ||||
Restricted stock forfeited and retired | 0 | ||||
Exercise of stock options (shares) | 13 | ||||
Exercise of stock options | 904 | 904 | |||
Stock-based compensation | 8,655 | 8,655 | |||
Balance at end of period (shares) at Jun. 30, 2018 | 95,393 | ||||
Balance at end of period at Jun. 30, 2018 | 2,886,498 | $ 954 | 2,770,532 | 112,811 | 2,201 |
Balance at beginning of period (shares) at Dec. 31, 2018 | 95,756 | ||||
Balance at beginning of period at Dec. 31, 2018 | 3,329,786 | $ 958 | 2,785,188 | 542,885 | 755 |
Increase (Decrease) in Stockholders' Equity | |||||
Dividends paid on stock awards subsequently forfeited | 2 | 2 | |||
Dividends declared on common stock | (20,308) | (20,308) | |||
Dividends declared on redeemable preferred stock ($20.31 per share) | (1,269) | (1,269) | |||
Net income | 26,316 | 26,316 | |||
Issuance of stock for Resolute Energy acquisition (Note 13) (shares) | 5,652 | ||||
Issuance of stock for Resolute Energy acquisition (Note 13) | 413,015 | $ 56 | 412,959 | ||
Unrealized change in fair value of investments, net of tax | 1,149 | 1,149 | |||
Issuance of restricted stock awards (shares) | 11 | ||||
Issuance of restricted stock awards | 0 | ||||
Common stock reacquired and retired (shares) | (10) | ||||
Common stock reacquired and retired | (654) | (654) | |||
Restricted stock forfeited and retired (shares) | (4) | ||||
Restricted stock forfeited and retired | 0 | ||||
Exercise of stock options (shares) | 3 | ||||
Exercise of stock options | 80 | 80 | |||
Stock-based compensation | 13,245 | 13,245 | |||
Balance at end of period (shares) at Mar. 31, 2019 | 101,408 | ||||
Balance at end of period at Mar. 31, 2019 | 3,761,362 | $ 1,014 | 3,210,818 | 547,626 | 1,904 |
Balance at beginning of period (shares) at Dec. 31, 2018 | 95,756 | ||||
Balance at beginning of period at Dec. 31, 2018 | 3,329,786 | $ 958 | 2,785,188 | 542,885 | 755 |
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 135,625 | ||||
Unrealized change in fair value of investments, net of tax | 1,453 | ||||
Balance at end of period (shares) at Jun. 30, 2019 | 101,473 | ||||
Balance at end of period at Jun. 30, 2019 | 3,861,893 | $ 1,015 | 3,223,331 | 635,339 | 2,208 |
Balance at beginning of period (shares) at Mar. 31, 2019 | 101,408 | ||||
Balance at beginning of period at Mar. 31, 2019 | 3,761,362 | $ 1,014 | 3,210,818 | 547,626 | 1,904 |
Increase (Decrease) in Stockholders' Equity | |||||
Dividends paid on stock awards subsequently forfeited | 5 | 1 | 4 | ||
Dividends declared on common stock | (20,330) | (20,330) | |||
Dividends declared on redeemable preferred stock ($20.31 per share) | (1,270) | (1,270) | |||
Net income | 109,309 | 109,309 | |||
Unrealized change in fair value of investments, net of tax | 304 | 304 | |||
Issuance of restricted stock awards (shares) | 54 | ||||
Issuance of restricted stock awards | 0 | $ 1 | (1) | ||
Restricted stock forfeited and retired (shares) | (4) | ||||
Restricted stock forfeited and retired | 0 | ||||
Exercise of stock options (shares) | 15 | ||||
Exercise of stock options | 594 | 594 | |||
Stock-based compensation | 11,919 | 11,919 | |||
Balance at end of period (shares) at Jun. 30, 2019 | 101,473 | ||||
Balance at end of period at Jun. 30, 2019 | $ 3,861,893 | $ 1,015 | $ 3,223,331 | $ 635,339 | $ 2,208 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | |
Common Stock | ||||
Dividends declared per common share (USD per share) | $ 0.2 | $ 0.20 | $ 0.16 | $ 0.16 |
Preferred Stock | ||||
Dividends declared per preferred share (USD per share) | $ 20.31 | $ 20.31 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Cimarex Energy Co. (“Cimarex,” “we,” or “us”), a Delaware corporation, is an independent oil and gas exploration and production company. Our operations are mainly located in Texas, Oklahoma, and New Mexico. The accompanying unaudited financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain disclosures required by accounting principles generally accepted in the United States and normally included in Annual Reports on Form 10-K have been omitted. Although management believes that our disclosures in these interim financial statements are adequate, they should be read in conjunction with the financial statements, summary of significant accounting policies, and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2018 . In the opinion of management, the accompanying financial statements reflect all adjustments necessary to fairly present our financial position, results of operations, and cash flows for the periods and as of the dates shown. The accounts of Cimarex and its subsidiaries are presented in the accompanying financial statements, with intercompany balances and transactions eliminated in consolidation. Certain amounts in the prior year financial statements have been reclassified to conform to the 2019 financial statement presentation. On March 1, 2019 , we acquired Resolute Energy Corporation (“Resolute”) in a cash and stock transaction. The results of Resolute’s operations have been included in our consolidated financial statements since the March 1, 2019 acquisition date. See Note 13 for more information on this transaction. Use of Estimates Areas of significance requiring the use of management’s judgments include the estimation of proved oil and gas reserves used in calculating depletion, the estimation of future net revenues used in computing ceiling test limitations, the estimation of future abandonment obligations used in recording asset retirement obligations, and the assessment of goodwill. Estimates and judgments also are required in determining allowances for doubtful accounts, impairments of unproved properties and other assets, valuation of deferred tax assets, fair value measurements, and contingencies. Oil and Gas Well Equipment and Supplies Our oil and gas well equipment and supplies are valued at the lower of cost and net realizable value, where net realizable value is estimated selling prices in the ordinary course of business, less reasonably predictable costs of disposal and transportation. Declines in the price of oil and gas well equipment and supplies in future periods could cause us to recognize impairments on these assets. An impairment would not affect cash flow from operating activities, but would adversely affect our net income and stockholders’ equity. Oil and Gas Properties We use the full cost method of accounting for our oil and gas operations. All costs associated with property acquisition, exploration, and development activities are capitalized. Under the full cost method of accounting, we are required to perform a quarterly ceiling test calculation to test our oil and gas properties for possible impairment. If the net capitalized cost of our oil and gas properties, as adjusted for income taxes, exceeds the ceiling limitation, the excess is charged to expense. The ceiling limitation is equal to the sum of: (i) the present value discounted at 10% of estimated future net revenues from proved reserves, (ii) the cost of properties not being amortized, and (iii) the lower of cost or estimated fair value of unproven properties included in the costs being amortized, as adjusted for income taxes. We currently do not have any unproven properties that are being amortized. Estimated future net revenues are determined based on trailing twelve-month average commodity prices and estimated proved reserve quantities, operating costs, and capital expenditures. The calculated ceiling limitation is not intended to be indicative of the fair market value of our proved reserves or future results. We did not recognize a ceiling test impairment during the three and six months ended June 30, 2019 and 2018 because the net capitalized cost of our oil and gas properties, as adjusted for income taxes, did not exceed the ceiling limitation. However, at June 30, 2019 , a decline in the value of our ceiling limitation of approximately 4% or more would have resulted in an impairment. If pricing conditions deteriorate, including the further widening of local market basis differentials, or if there is a negative impact on one or more of the other components of the calculation, we may incur full cost ceiling test impairments in future quarters. Impairment charges do not affect cash flow from operating activities, but do adversely affect our net income and various components of our balance sheet. Any impairment of oil and gas properties is not reversible at a later date. Revenue Recognition Oil, Gas, and NGL Sales Revenue is recognized from the sales of oil, gas, and NGLs when the customer obtains control of the product, when we have no further obligations to perform related to the sale, and when collectability is probable. All of our sales of oil, gas, and NGLs are made under contracts with customers, which typically include variable consideration based on monthly pricing tied to local indices and monthly volumes delivered. The nature of our contracts with customers does not require us to constrain that variable consideration or to estimate the amount of transaction price attributable to future performance obligations for accounting purposes. As of June 30, 2019 , we had open contracts with customers with terms of one month to multiple years, as well as “evergreen” contracts that renew on a periodic basis if not canceled by us or the customer. Performance obligations under our contracts with customers are typically satisfied at a point-in-time through monthly delivery of oil, gas, and/or NGLs. Our contracts with customers typically require payment within one month of delivery. Our gas and NGLs are sold under a limited number of contract structure types common in our industry. Under these contracts the gas and its components, including NGLs, may be sold to a single purchaser or the residue gas and NGLs may be sold to separate purchasers. Regardless of the contract structure type, the terms of these contracts compensate us for the value of the residue gas and NGLs at current market prices for each product. However, depending on the contract structure type, certain transportation, processing, and other charges may be deducted against the prices received for the product. Our oil typically is sold at specific delivery points under contract terms that also are common in our industry. Gas Gathering When we transport and/or process third-party gas associated with our equity gas, we recognize revenue for the fees charged to third-parties for such services. Gas Marketing When we market and sell gas for working interest owners, we act as agent under short-term sales and supply agreements and may earn a fee for such services. Revenues from such services are recognized as gas is delivered. Gas Imbalances Revenue from the sale of gas is recorded on the basis of gas actually sold by us. If our aggregate sales volumes for a well are greater (or less) than our proportionate share of production from the well, a liability (or receivable) is established to the extent there are insufficient proved reserves available to make-up the overproduced (or underproduced) imbalance. Imbalances have not been significant in the periods presented. Lease Accounting In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (“Topic 842”). The FASB subsequently issued various ASUs which provided additional implementation guidance. Topic 842 requires lessees to recognize lease liabilities and right-of-use assets on the balance sheet for contracts that provide lessees with the right to control the use of identified assets for a period of time. The scope of Topic 842 excludes leases to explore for or use minerals, oil, natural gas, and similar nonregenerative resources. We adopted Topic 842 effective January 1, 2019, using the modified retrospective method applied to all leases that existed on that date, which resulted in the recognition of lease liabilities of $276.9 million and right-of-use assets of $265.0 million . In connection with adoption we made use of the following practical expedients, which are provided in Topic 842: • a package of practical expedients to not reassess: 1) whether expired or existing contracts are or contain a lease, 2) lease classification for expired or existing leases, and 3) initial direct costs for existing leases; • an election not to apply the recognition requirements in Topic 842 to short-term leases (a lease that at commencement date has a lease term of 12 months or less and does not contain a purchase option that the Company is reasonably certain to exercise); • a practical expedient that permits combining lease and nonlease components in a contract and accounting for the combination as a lease (elected by asset class); and • a practical expedient to not reassess certain land easements in existence prior to January 1, 2019. |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2019 | |
Long-term Debt, Unclassified [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt at June 30, 2019 and December 31, 2018 consisted of the following: June 30, 2019 December 31, 2018 (in thousands) Principal Unamortized Debt Issuance Costs and Discounts (1) Long-term Debt, net Principal Unamortized Debt Issuance Costs and Discount (1) Long-term Debt, net 4.375% Notes due 2024 $ 750,000 $ (3,982 ) $ 746,018 $ 750,000 $ (4,439 ) $ 745,561 3.90% Notes due 2027 750,000 (6,651 ) 743,349 750,000 (7,007 ) 742,993 4.375% Notes due 2029 500,000 (5,137 ) 494,863 — — — $ 2,000,000 $ (15,770 ) $ 1,984,230 $ 1,500,000 $ (11,446 ) $ 1,488,554 ________________________________________ (1) At June 30, 2019 , the unamortized debt issuance costs and discount related to the 3.90% Notes due 2027 were $5.1 million and $1.5 million , respectively. At December 31, 2018 , the unamortized debt issuance costs and discount related to the 3.90% Notes due 2027 were $5.4 million and $1.6 million , respectively. At June 30, 2019 , the unamortized debt issuance costs and discount related to the 4.375% Notes due 2029 were $4.5 million and $0.7 million , respectively. The 4.375% Notes due 2024 were issued at par. Bank Debt On February 5, 2019 , we entered into an Amended and Restated Credit Agreement for our senior unsecured revolving credit facility (“Credit Facility”). Among other things, the amended and restated credit facility increased the aggregate commitments to $1.25 billion with an option for us to increase the aggregate commitments to $1.5 billion , and extended the maturity date to February 5, 2024 . As of June 30, 2019 , we had no bank borrowings outstanding under the Credit Facility, but did have letters of credit of $2.5 million outstanding, leaving an unused borrowing availability of $1.248 billion . During the three months ended June 30, 2019 , we borrowed and repaid an aggregate of $528.0 million on the Credit Facility to meet cash requirements as needed. At our option, borrowings under the Credit Facility may bear interest at either (a) LIBOR (or an alternate rate determined by the administrative agent for the Credit Facility in accordance with the Credit Facility when LIBOR is no longer available) plus 1.125 – 2.0% based on the credit rating for our senior unsecured long-term debt, or (b) a base rate (as defined in the credit agreement) plus 0.125 – 1.0% , based on the credit rating for our senior unsecured long-term debt. Unused borrowings are subject to a commitment fee of 0.125 – 0.35% , based on the credit rating for our senior unsecured long-term debt. The Credit Facility contains representations, warranties, covenants, and events of default that are customary for investment grade, senior unsecured bank credit agreements, including a financial covenant for the maintenance of a defined total debt-to-capital ratio of no greater than 65% . As of June 30, 2019 , we were in compliance with all of the financial covenants. At June 30, 2019 and December 31, 2018 , we had $4.6 million and $2.2 million , respectively, of unamortized debt issuance costs associated with our Credit Facility, which were recorded as assets and included in Other assets on our Condensed Consolidated Balance Sheets. These costs are being amortized to interest expense ratably over the life of the Credit Facility. We incurred $3.0 million in additional debt issuance costs in amending our Credit Facility. Senior Notes On March 8, 2019 , we issued $500 million aggregate principal amount of 4.375% senior unsecured notes due March 15, 2029 at 99.862% of par to yield 4.392% per annum. We received $494.7 million in net cash proceeds, after deducting underwriters’ fees, discount, and debt issuance costs. The notes bear an annual interest rate of 4.375% and interest is payable semiannually on March 15 and September 15 , with the first payment due September 15, 2019 . We used the net proceeds to repay borrowings that were outstanding under our Credit Facility that were used to help fund the Resolute acquisition on March 1, 2019 . The effective interest rate on these notes, including the amortization of debt issuance costs and discount, is 4.50% . In April 2017, we issued $750 million aggregate principal amount of 3.90% senior unsecured notes at 99.748% of par to yield 3.93% per annum. These notes are due May 15, 2027 and interest is payable semiannually on May 15 and November 15. The effective interest rate on these notes, including the amortization of debt issuance costs and discount, is 4.01% . In June 2014, we issued $750 million aggregate principal amount of 4.375% senior unsecured notes at par. These notes are due June 1, 2024 and interest is payable semiannually on June 1 and December 1. The effective interest rate on these notes, including the amortization of debt issuance costs, is 4.50% . Our senior unsecured notes are governed by indentures containing certain covenants, events of default, and other restrictive provisions with which we were in compliance as of June 30, 2019 |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedges, Assets [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS We periodically use derivative instruments to mitigate volatility in commodity prices. While the use of these instruments limits the downside risk of adverse price changes, their use may also limit future cash flow from favorable price changes. Depending on changes in oil and gas futures markets and management’s view of underlying supply and demand trends, we may increase or decrease our derivative positions from current levels. As of June 30, 2019 , we have entered into oil and gas collars, oil basis swaps, oil and gas fixed price swaps, and sold oil calls. Under our collars, we receive the difference between the published index price and a floor price if the index price is below the floor price or we pay the difference between the ceiling price and the index price if the index price is above the ceiling price. No amounts are paid or received if the index price is between the floor and the ceiling prices. By using a collar, we have fixed the minimum and maximum prices we can receive on the underlying production. Our basis swaps are settled based on the difference between a published index price plus or minus a fixed differential, as applicable, and the applicable local index price under which the underlying production is sold. By using a basis swap, we have fixed the differential between the published index price and certain of our physical pricing points. For our Permian oil production, the basis swaps fix the price differential between the WTI NYMEX (Cushing Oklahoma) price and the WTI Midland price. For our Permian and Mid-Continent gas production, the contract prices in our collars are consistent with the index prices used to sell our production. Under our fixed price swaps, we receive the difference between the fixed price and the published index price if the published index price is below the fixed price and we pay the difference between the fixed price and the published index price if the published index price is above the fixed price. Under our sold oil calls, we pay the difference between the fixed price and the published index price if the published index price is above the fixed price. The following tables summarize our outstanding derivative contracts as of June 30, 2019 : Oil Collars First Quarter Second Quarter Third Quarter Fourth Quarter Total 2019: WTI (1) Volume (Bbls) — — 3,312,000 2,576,000 5,888,000 Weighted Avg Price - Floor $ — $ — $ 54.28 $ 55.50 $ 54.81 Weighted Avg Price - Ceiling $ — $ — $ 67.88 $ 68.36 $ 68.09 2020: WTI (1) Volume (Bbls) 1,820,000 1,092,000 368,000 368,000 3,648,000 Weighted Avg Price - Floor $ 54.90 $ 51.50 $ 50.00 $ 50.00 $ 52.89 Weighted Avg Price - Ceiling $ 68.49 $ 63.59 $ 62.15 $ 62.15 $ 65.74 ________________________________________ (1) The index price for these collars is West Texas Intermediate (“WTI”) as quoted on the New York Mercantile Exchange (“NYMEX”). Gas Collars First Quarter Second Quarter Third Quarter Fourth Quarter Total 2019: PEPL (1) Volume (MMBtu) — — 12,880,000 10,120,000 23,000,000 Weighted Avg Price - Floor $ — $ — $ 1.93 $ 1.92 $ 1.92 Weighted Avg Price - Ceiling $ — $ — $ 2.32 $ 2.36 $ 2.33 Perm EP (2) Volume (MMBtu) — — 8,280,000 5,520,000 13,800,000 Weighted Avg Price - Floor $ — $ — $ 1.46 $ 1.38 $ 1.43 Weighted Avg Price - Ceiling $ — $ — $ 1.76 $ 1.71 $ 1.74 Waha (3) Volume (MMBtu) — — 5,520,000 5,520,000 11,040,000 Weighted Avg Price - Floor $ — $ — $ 1.48 $ 1.48 $ 1.48 Weighted Avg Price - Ceiling $ — $ — $ 1.82 $ 1.82 $ 1.82 2020: PEPL (1) Volume (MMBtu) 7,280,000 4,550,000 1,840,000 1,840,000 15,510,000 Weighted Avg Price - Floor $ 1.93 $ 1.91 $ 1.85 $ 1.85 $ 1.91 Weighted Avg Price - Ceiling $ 2.36 $ 2.28 $ 2.31 $ 2.31 $ 2.32 Perm EP (2) Volume (MMBtu) 3,640,000 2,730,000 1,840,000 1,840,000 10,050,000 Weighted Avg Price - Floor $ 1.40 $ 1.40 $ 1.35 $ 1.35 $ 1.38 Weighted Avg Price - Ceiling $ 1.79 $ 1.82 $ 1.66 $ 1.66 $ 1.75 Waha (3) Volume (MMBtu) 4,550,000 2,730,000 — — 7,280,000 Weighted Avg Price - Floor $ 1.50 $ 1.57 $ — $ — $ 1.53 Weighted Avg Price - Ceiling $ 1.87 $ 1.97 $ — $ — $ 1.91 ________________________________________ (1) The index price for these collars is Panhandle Eastern Pipe Line, Tex/OK Mid-Continent Index (“PEPL”) as quoted in Platt’s Inside FERC. (2) The index price for these collars is El Paso Natural Gas Company, Permian Basin Index (“Perm EP”) as quoted in Platt’s Inside FERC. (3) The index price for these collars is Waha West Texas Natural Gas Index (“Waha”) as quoted in Platt’s Inside FERC. Oil Basis Swaps First Quarter Second Quarter Third Quarter Fourth Quarter Total 2019: WTI Midland (1) Volume (Bbls) — — 3,266,000 3,266,000 6,532,000 Weighted Avg Differential (2) $ — $ — $ (7.36 ) $ (6.32 ) $ (6.84 ) 2020: WTI Midland (1) Volume (Bbls) 2,093,000 1,365,000 736,000 736,000 4,930,000 Weighted Avg Differential (2) $ 0.16 $ 0.19 $ 0.71 $ 0.71 $ 0.33 ________________________________________ (1) The index price we pay under these basis swaps is WTI Midland as quoted by Argus Americas Crude. (2) The index price we receive under these basis swaps is WTI as quoted on the NYMEX plus or minus, as applicable, the weighted average differential shown in the table. Oil Swaps First Quarter Second Quarter Third Quarter Fourth Quarter Total 2019: WTI (1) Volume (Bbls) — — 460,000 460,000 920,000 Weighted Avg Price $ — $ — $ 64.54 $ 64.54 $ 64.54 ________________________________________ (1) The fixed price on these swaps is NYMEX WTI. Gas Swaps First Quarter Second Quarter Third Quarter Fourth Quarter Total 2019: Henry Hub (1) Volume (MMBtu) — — 3,220,000 3,220,000 6,440,000 Weighted Avg Price $ — $ — $ 3.00 $ 3.00 $ 3.00 ________________________________________ (1) The fixed price on these swaps is NYMEX Henry Hub. Sold Oil Calls First Quarter Second Quarter Third Quarter Fourth Quarter Total 2019: WTI (1) Volume (Bbls) — — 337,640 337,640 675,280 Weighted Avg Call Price $ — $ — $ 64.36 $ 64.36 $ 64.36 ________________________________________ (1) The index on these sold calls is NYMEX WTI. The following table summarizes our derivative contracts entered into subsequent to June 30, 2019 through August 1, 2019: Oil Collars First Second Third Fourth Quarter Total 2019: WTI Volume (Bbls) — — 368,000 368,000 736,000 Wtd Avg Price - Floor $ — $ — $ 50.00 $ 50.00 $ 50.00 Wtd Avg Price - Ceiling $ — $ — $ 63.45 $ 63.45 $ 63.45 2020: WTI Volume (Bbls) 364,000 364,000 368,000 368,000 1,464,000 Wtd Avg Price - Floor $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 Wtd Avg Price - Ceiling $ 63.45 $ 63.45 $ 63.45 $ 63.45 $ 63.45 Derivative Gains and Losses Net gains and losses on our derivative instruments are a function of fluctuations in the underlying commodity index prices as compared to the contracted prices and the monthly cash settlements (if any) of the instruments. We have elected not to designate our derivatives as hedging instruments for accounting purposes and, therefore, we do not apply hedge accounting treatment to our derivative instruments. Consequently, changes in the fair value of our derivative instruments and cash settlements on the instruments are included as a component of operating costs and expenses as either a net gain or loss on derivative instruments. Cash settlements of our contracts are included in cash flows from operating activities in our statements of cash flows. The following table presents the components of (Gain) loss on derivative instruments, net for the periods indicated. Three Months Ended Six Months Ended (in thousands) 2019 2018 2019 2018 (Increase) decrease in fair value of derivative instruments, net: Gas contracts $ (6,370 ) $ 14,566 $ (16,216 ) $ 2,777 Oil contracts (28,161 ) (397 ) 88,086 (5,156 ) (34,531 ) 14,169 71,870 (2,379 ) Cash (receipts) payments on derivative instruments, net: Gas contracts (21,176 ) (9,918 ) (17,412 ) (15,037 ) Oil contracts 14,939 17,448 20,226 34,956 (6,237 ) 7,530 2,814 19,919 (Gain) loss on derivative instruments, net $ (40,768 ) $ 21,699 $ 74,684 $ 17,540 Derivative Fair Value Our derivative contracts are carried at their fair value on our balance sheet using Level 2 inputs and are subject to master netting arrangements, which allow us to offset recognized asset and liability fair value amounts on contracts with the same counterparty. Our accounting policy is to not offset asset and liability positions in our balance sheets. The following tables present the amounts and classifications of our derivative assets and liabilities as of June 30, 2019 and December 31, 2018 , as well as the potential effect of netting arrangements on our recognized derivative asset and liability amounts. June 30, 2019 (in thousands) Balance Sheet Location Asset Liability Oil contracts Current assets — Derivative instruments $ 23,060 $ — Gas contracts Current assets — Derivative instruments 19,897 — Oil contracts Non-current assets — Derivative instruments 613 — Oil contracts Current liabilities — Derivative instruments — 50,056 Oil contracts Non-current liabilities — Derivative instruments — 171 Gas contracts Non-current liabilities — Derivative instruments — 669 Total gross amounts presented in the balance sheet 43,570 50,896 Less: gross amounts not offset in the balance sheet (23,966 ) (23,966 ) Net amount $ 19,604 $ 26,930 December 31, 2018 (in thousands) Balance Sheet Location Asset Liability Oil contracts Current assets — Derivative instruments $ 94,240 $ — Gas contracts Current assets — Derivative instruments 7,699 — Oil contracts Non-current assets — Derivative instruments 9,246 — Oil contracts Current liabilities — Derivative instruments — 23,378 Gas contracts Current liabilities — Derivative instruments — 4,249 Oil contracts Non-current liabilities — Derivative instruments — 311 Gas contracts Non-current liabilities — Derivative instruments — 1,956 Total gross amounts presented in the balance sheet 111,185 29,894 Less: gross amounts not offset in the balance sheet (29,894 ) (29,894 ) Net amount $ 81,291 $ — We are exposed to financial risks associated with our derivative contracts from non-performance by our counterparties. We mitigate our exposure to any single counterparty by contracting with a number of financial institutions, each of which has a high credit rating and is a member of our bank credit facility. Our member banks do not require us to post collateral for our derivative liability positions, nor do we require our counterparties to post collateral for our benefit. In the future we may enter into derivative instruments with counterparties outside our bank group to obtain competitive terms and to spread counterparty risk. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The FASB has established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels. Level 1 inputs are the highest priority and consist of unadjusted quoted prices in active markets for identical assets and liabilities. Level 2 are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level 3 are unobservable inputs for an asset or liability. The following table provides fair value measurement information for certain assets and liabilities as of June 30, 2019 and December 31, 2018 : June 30, 2019 December 31, 2018 (in thousands) Book Value Fair Value Book Value Fair Value Financial Assets (Liabilities): 4.375% Notes due 2024 $ (750,000 ) $ (793,913 ) $ (750,000 ) $ (744,578 ) 3.90% Notes due 2027 $ (750,000 ) $ (769,643 ) $ (750,000 ) $ (701,273 ) 4.375% Notes due 2029 $ (500,000 ) $ (530,535 ) $ — $ — Derivative instruments — assets $ 43,570 $ 43,570 $ 111,185 $ 111,185 Derivative instruments — liabilities $ (50,896 ) $ (50,896 ) $ (29,894 ) $ (29,894 ) Assessing the significance of a particular input to the fair value measurement requires judgment, including the consideration of factors specific to the asset or liability. The fair value (Level 1) of our fixed rate notes was based on quoted market prices. The fair value of our derivative instruments (Level 2) was estimated using discounted cash flow and option pricing models. These models use certain observable variables including forward prices, volatility curves, interest rates, and credit ratings and spreads. The fair value estimates are adjusted relative to non-performance risk as appropriate. See Note 3 for further information on the fair value of our derivative instruments. Other Financial Instruments The carrying amounts of our cash, cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the short-term maturities and/or liquid nature of these assets and liabilities. Included in “Accrued liabilities — Other” at June 30, 2019 were accrued operating expenses (e.g. production, transportation, and gathering expenses) of approximately $82.8 million . Included in “Accrued liabilities — Other” at December 31, 2018 were: (i) accrued operating expenses of approximately $69.1 million , (ii) accrued general and administrative, primarily payroll-related, costs of approximately $47.4 million , and (iii) an accrual of approximately $35.8 million representing the amount by which checks issued, but not yet presented to our banks, exceeded balances in applicable bank accounts. Most of our accounts receivable balances are uncollateralized and result from transactions with other companies in the oil and gas industry. Concentration of customers may impact our overall credit risk because our customers may be similarly affected by changes in economic or other conditions within the industry. We conduct credit analyses prior to making any sales to new customers or increasing credit for existing customers and may require parent company guarantees, letters of credit, or prepayments when deemed necessary. We routinely assess the recoverability of all material accounts receivable to determine their collectability. We accrue a reserve to the allowance for doubtful accounts when it is probable that a receivable will not be collected and the amount of the reserve may be reasonably estimated. At June 30, 2019 and December 31, 2018 , the allowance for doubtful accounts was $3.2 million and $2.7 million , respectively. |
CAPITAL STOCK
CAPITAL STOCK | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
CAPITAL STOCK | CAPITAL STOCK Authorized capital stock consists of 200 million shares of common stock and 15 million shares of preferred stock. At June 30, 2019 , there were 101.5 million shares of common stock outstanding. From the 15 million shares of preferred stock authorized, our Board of Directors created a series of preferred stock designated as 8.125% Series A Cumulative Perpetual Convertible Preferred Stock and authorized 62.5 thousand shares. In March 2019, in conjunction with the Resolute acquisition (see Note 13), we issued 62.5 thousand shares of 8.125% Series A Cumulative Perpetual Convertible Preferred Stock, par value $0.01 per share (the “Convertible Preferred Stock”). Holders of the Convertible Preferred Stock are entitled to receive, when, as, and if declared by the Board out of funds of Cimarex legally available for payment, cumulative cash dividends at the annual rate of 8.125% of each share’s liquidation preference of $1,000 . Dividends on the preferred stock are payable quarterly in arrears and accumulate from the most recent date as to which dividends have been paid. In the event of any liquidation, winding up, or dissolution of Cimarex, whether voluntary or involuntary, each holder will be entitled to receive in respect of its shares and to be paid out of the assets of Cimarex legally available for distribution to its stockholders, after satisfaction of liabilities to Cimarex’s creditors and any senior stock (of which there is currently none) and before any payment or distribution is made to holders of junior stock (including common stock), the liquidation preference of $1,000 per share, with the total liquidation preference being $62.5 million in the aggregate. Each holder has the right at any time, at its option, to convert any or all of such holder’s shares of Convertible Preferred Stock at an initial conversion rate of 8.0421 shares of fully paid and nonassessable shares of our common stock and $471.40 in cash per share of Convertible Preferred Stock. Additionally, at any time on or after October 15, 2021, we shall have the right, at our option, if the closing sale price of our common stock meets certain criteria, to elect to cause all, and not part, of the outstanding shares of Convertible Preferred Stock to be automatically converted into that number of shares of Cimarex common stock for each share of Convertible Preferred Stock equal to the conversion rate in effect on the mandatory conversion date as such terms are defined in the Certificate of Designations for the Convertible Preferred Stock and $471.40 in cash per share of Convertible Preferred Stock. As a result of the cash redemption features included in the Convertible Preferred Stock conversion option, with such conversion not solely within our control, the instruments are classified as Redeemable preferred stock in temporary equity on the Condensed Consolidated Balance Sheet. Dividends Common Stock In May 2019 , our Board of Directors declared a cash dividend of $0.20 per share of common stock. The dividend is payable on or before August 30, 2019 to stockholders of record on August 15, 2019 . Dividends declared are recorded as a reduction of retained earnings to the extent retained earnings are available at the close of the period prior to the date of the declared dividend. Dividends in excess of retained earnings are recorded as a reduction of additional paid-in capital. The $20.3 million dividend declared during the second quarter 2019 was recorded as a reduction of retained earnings and is included as a payable in “Accrued liabilities — Other” on the Condensed Consolidated Balance Sheet. Nonforfeitable dividends paid on stock awards that subsequently forfeit are reclassified out of retained earnings or additional paid-in capital, as applicable, to stock compensation expense in the period in which the forfeitures occur. Future dividend payments will depend on our level of earnings, financial requirements, and other factors considered relevant by our Board of Directors. Preferred Stock In May 2019 , our Board of Directors declared a cash dividend of $20.31 per share of Convertible Preferred Stock. The dividend was paid in July to stockholders of record on July 1, 2019 . The $1.3 million dividend declared during the second quarter 2019 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION We have recognized stock-based compensation cost as shown below for the periods indicated. Three Months Ended Six Months Ended (in thousands) 2019 2018 2019 2018 Restricted stock awards: Performance stock awards $ 5,535 $ 3,809 $ 10,929 $ 10,538 Service-based stock awards 5,993 4,247 13,224 9,319 11,528 8,056 24,153 19,857 Stock option awards 396 637 1,018 1,254 Total stock compensation cost 11,924 8,693 25,171 21,111 Less amounts capitalized to oil and gas properties (5,430 ) (5,598 ) (11,964 ) (11,286 ) Stock compensation expense $ 6,494 $ 3,095 $ 13,207 $ 9,825 |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 6 Months Ended |
Jun. 30, 2019 | |
Asset Retirement Obligation [Abstract] | |
ASSET RETIREMENT OBLIGATIONS | ASSET RETIREMENT OBLIGATIONS We recognize the present value of the fair value of liabilities for retirement obligations associated with tangible long-lived assets in the period in which there is a legal obligation associated with the retirement of such assets and the amount can be reasonably estimated. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. This liability includes costs related to the plugging and abandonment of wells, the removal of facilities and equipment, and site restorations. Subsequent to initial measurement, the asset retirement liability is accreted each period. If there is a change in the estimated cost or timing of retirement, a revision is recorded to both the asset retirement obligation and the asset retirement capitalized cost. Capitalized costs are included as a component of the depreciation and depletion calculations. The following table reflects the components of the change in the carrying amount of the asset retirement obligation for the six months ended June 30, 2019 : (in thousands) Six Months Ended Asset retirement obligation at January 1, 2019 $ 166,904 Liabilities incurred 12,611 Liability settlements and disposals (11,771 ) Accretion expense 3,714 Revisions of estimated liabilities 2,415 Asset retirement obligation at June 30, 2019 173,873 Less current obligation (16,492 ) Long-term asset retirement obligation $ 157,381 For the six months ended June 30, 2019 , liabilities incurred included $9.4 million for the Resolute acquisition. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The calculations of basic and diluted net earnings per common share under the two-class method are presented below for the periods indicated: Three Months Ended June 30, 2019 2018 (in thousands, except per share information) Income (Numerator) Shares (Denominator) Per-Share Amount Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 109,309 $ 140,997 Less: net income attributable to participating securities (1,596 ) (1,892 ) Less: preferred stock dividends (1,270 ) — Basic earnings per share Income available to common stockholders 106,443 99,658 $ 1.07 139,105 93,728 $ 1.48 Effects of dilutive securities (1) Options — 7 — 31 Diluted earnings per share Income available to common stockholders and assumed conversions $ 106,443 99,665 $ 1.07 $ 139,105 93,759 $ 1.48 ________________________________________ (1) Inclusion of certain potential common shares would have an anti-dilutive effect, therefore, these shares were excluded from the calculations of diluted earnings per share. Excluded from the three months ended June 30, 2019 calculation were 387.5 thousand potential common shares from the assumed exercise of employee stock options and 502.6 thousand potential common shares from the assumed conversion of the Convertible Preferred Stock. Excluded from the three months ended June 30, 2018 calculation were 292.1 thousand potential common shares from the assumed exercise of employee stock options. Six Months Ended June 30, 2019 2018 (in thousands, except per share information) Income (Numerator) Shares (Denominator) Per-Share Amount Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 135,625 $ 327,315 Less: net income attributable to participating securities (2,067 ) (4,546 ) Less: preferred stock dividends (2,539 ) — Basic earnings per share Income available to common stockholders 131,019 97,800 $ 1.34 322,769 93,713 $ 3.44 Effects of dilutive securities (1) Options — 9 1 35 Diluted earnings per share Income available to common stockholders and assumed conversions $ 131,019 97,809 $ 1.34 $ 322,770 93,748 $ 3.44 ________________________________________ (1) Inclusion of certain potential common shares would have an anti-dilutive effect, therefore, these shares were excluded from the calculations of diluted earnings per share. Excluded from the six months ended June 30, 2019 calculation were 391.1 thousand potential common shares from the assumed exercise of employee stock options and 502.6 thousand potential common shares from the assumed conversion of the Convertible Preferred Stock. Excluded from the six months ended June 30, 2018 calculation were 295.6 thousand |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The components of our provision for income taxes and our combined federal and state effective income tax rates were as follows: Three Months Ended Six Months Ended (in thousands) 2019 2018 2019 2018 Current tax (benefit) $ — $ (717 ) $ — $ (717 ) Deferred tax expense 34,046 42,783 42,119 99,732 $ 34,046 $ 42,066 $ 42,119 $ 99,015 Combined federal and state effective income tax rate 23.7 % 23.0 % 23.7 % 23.2 % At December 31, 2018 , we had a U.S. net tax operating loss carryforward of approximately $1.16 billion , which will expire in tax years 2032 through 2037. We believe that the carryforward will be utilized before it expires. We also had enhanced oil recovery and marginal well credits of $3.5 million at December 31, 2018. On March 1, 2019 , the Company completed its acquisition of Resolute. For federal income tax purposes, the acquisition was a tax-free merger whereby the Company acquired carryover tax basis in Resolute’s assets and liabilities. As of March 1, 2019 , the Company recorded a net deferred tax liability of $62.4 million associated with the acquired assets. The net deferred tax liability includes certain deferred tax assets net of valuation allowances. The acquired tax attributes include federal net operating loss, capital loss, and enhanced oil recovery tax credit carryforwards. The carryforwards are subject to an annual limitation under Internal Revenue Code Section 382. At June 30, 2019 , we had no unrecognized tax benefits that would impact our effective tax rate and have made no provisions for interest or penalties related to uncertain tax positions. The tax years 2016 through 2018 remain open to examination by the Internal Revenue Service of the United States. We file tax returns with various state taxing authorities, which remain open to examination for tax years 2015 through 2018 . Our combined federal and state effective income tax rates differ from the U.S. federal statutory rate of 21% primarily due to state income taxes and non-deductible expenses. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Lease Commitments Effective January 1, 2019, we began accounting for leases in accordance with Topic 842, which requires lessees to recognize lease liabilities and right-of-use assets on the balance sheet for contracts that provide lessees with the right to control the use of identified assets for periods of greater than 12 months. Prior to January 1, 2019, we accounted for leases in accordance with ASC Topic 840, Leases , under which operating leases were not recorded on the balance sheet. Real Estate Leases We have operating leases for office space in various locations that provide us the right to control the use of the specified office space over the term of the contract. These leases require us to make monthly “base rent” payments, as well as “additional payments” for our share of operating expenses and taxes incurred by the landlord. At our option, the terms of these leases can be renewed for varying periods, and in some cases may be terminated early at our option. As of June 30, 2019 , these leases had remaining lease terms ranging from 4.9 to 7.2 years. These leases do not contain residual value guarantees, options to purchase the underlying office space, or terms or covenants that impose restrictions on our ability to pay dividends, incur debt, or enter into additional leases. We have no subleases of office space. Lease liabilities associated with our real estate leases were recorded at the present value of the future lease payments, after considering the following: • “Base rent” payments are considered fixed lease payments, while “additional payments” are considered variable lease payments. • At commencement of each real estate lease we were not reasonably certain to exercise the option to renew or terminate such lease. • The discount rate used to calculate each lease liability was based on our incremental borrowing rate, which was estimated utilizing trading metrics for our senior unsecured notes as adjusted using relevant market factors to develop a synthetic secured yield curve. • As an accounting policy we have elected not to separate nonlease components from lease components for our real estate class of assets. • Where applicable, we determined that the effect of accounting for the right to use land separately from other lease components would be insignificant. Production-Related Leases We have operating leases for equipment used in connection with our oil and gas production operations, including well-head compressors, pipeline compressors, and artificial lift mechanisms. These leases provide us the right to control the use of explicitly or implicitly identified equipment during the term of the contract. These leases often include an “evergreen” provision that allows the contract term to continue on a month-to-month basis following expiration of the initial term stated in the contract. As of June 30, 2019 , these leases had remaining lease terms ranging from one month to 11.3 years. These leases require us to make monthly payments of fixed amounts, which cover the cost of renting the equipment and, in some cases, the cost of maintaining the leased equipment. These leases do not typically require us to make variable lease payments. These leases do not contain residual value guarantees, options to purchase the underlying equipment, or terms or covenants that impose restrictions on our ability to pay dividends, incur debt, or enter into additional leases. We have no subleases of production-related equipment. Lease liabilities associated with our production-related operating leases were recorded at the present value of the future lease payments, after considering the following: • For leases with an evergreen provision, the term of the lease was determined to be the noncancellable period in the contract plus the period beyond the noncancellable period that we believe it is reasonably certain we will need the equipment for operational purposes, limited to the point in time at which both we and the lessor each have the right to terminate the lease without permission from the other party with no more than an insignificant penalty. • The discount rate used to calculate each lease liability was based on our incremental borrowing rate, which was estimated utilizing trading metrics for our senior unsecured notes as adjusted using relevant market factors to develop a synthetic secured yield curve. • As an accounting policy we have elected not to separate nonlease components from lease components for our production-related class of assets. We have one finance lease, which results from a gathering agreement (the “Gathering Agreement”) on a gathering system. Under terms of the Gathering Agreement, we have the option to acquire a portion of the underlying gathering system upon termination of the Gathering Agreement. We make monthly payments under the Gathering Agreement based on the volume of oil gathered and a gathering rate per barrel, which is adjusted periodically. As of June 30, 2019 , this lease had a remaining term of 6.2 years. Exploration and Development-Related Leases We have operating leases for equipment used in connection with our exploration and development activities, including drilling rigs, pressure pumping equipment, directional drilling tools, well-control devices, and various pieces of support equipment. These leases provide us the right to control the use of explicitly or implicitly identified equipment during the term of the contract. As of June 30, 2019 , these leases had remaining lease terms of 12 months or less. These leases typically require us to make payments in amounts based on the usage of the underlying equipment. These leases do not contain residual value guarantees, options to purchase the underlying equipment, or terms or covenants that impose restrictions on our ability to pay dividends, incur debt, or enter into additional leases. We have no subleases of exploration and development-related equipment. As an accounting policy we have elected not to apply the recognition requirements of Topic 842 to our exploration and development-related class of assets with lease terms at commencement of 12 months or less. As such, we have not recorded any lease liabilities associated with our exploration and development-related leases. In addition, as an accounting policy we have elected not to separate nonlease components from lease components for our exploration and development-related class of assets. Balance Sheet Presentation The following tables present the amounts and classifications of our right-of-use assets and estimated lease liabilities as of June 30, 2019 : (in thousands) Balance Sheet Location June 30, 2019 Operating lease right-of-use assets Non-current assets — Fixed assets, net $ 243,089 Finance lease right-of-use asset Non-current assets — Other assets 27,042 Total right-of-use assets $ 270,131 (in thousands) Balance Sheet Location June 30, 2019 Operating lease liabilities — current Current liabilities — Operating leases $ 62,119 Operating lease liabilities — non-current Non-current liabilities — Operating leases 191,413 Finance lease liability — current Current liabilities — Accrued liabilities-Other 6,576 Finance lease liability — non-current Non-current liabilities — Other liabilities 21,895 Total lease liabilities $ 282,003 Lease Cost and Cash Flows The following table summarizes estimated total lease cost, which includes amounts recognized in income and amounts capitalized for the indicated period: (in thousands) Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Finance lease cost: Amortization of right-of-use asset $ 1,097 $ 2,193 Interest on lease liability 457 943 Operating lease cost: (1) Production expense 3,943 7,777 Gas gathering and other expense 6,522 12,686 General and administrative expense 2,335 4,634 Short-term lease cost (2) 162,334 317,044 Total lease cost $ 176,688 $ 345,277 ________________________________________ (1) Operating lease cost in the table above is composed of costs incurred under real estate and production-related leases. These costs are included in the indicated captions on the Condensed Consolidated Statements of Operations. (2) Short-term lease cost in the table above is composed of costs incurred under leases with terms of 12 months or less for right-of-use assets used in exploration and development activities. Payments under such leases are typically based on usage of the underlying right-of-use asset and, therefore, are also variable lease payments. These costs are capitalized as part of proved properties on the Condensed Consolidated Balance Sheet. The following table summarizes estimated cash paid for our leases for the indicated period: (in thousands) Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Financing cash outflows from finance lease $ 1,555 Operating cash outflows from operating leases $ 25,466 Cash paid for short-term leases and variable lease payments: Investing cash outflows from operating leases $ 309,150 During the six months ended June 30, 2019 , we recognized $49.1 million in right-of-use assets in connection with new operating leases entered into during the period. Lease Liability Maturity Analysis The following table presents the weighted-average remaining lease terms and discount rates of our leases as of the indicated date: June 30, 2019 Weighted-average remaining lease term (in years): Finance lease 6.2 Operating leases 4.5 Weighted-average discount rate: Finance lease 6.5 % Operating leases 4.0 % The following table reflects the undiscounted future cash flows utilized in the calculation of the lease liabilities recorded at June 30, 2019: June 30, 2019 (in thousands) Operating Leases Finance Lease July 1, 2019 — June 30, 2020 $ 72,320 $ 6,802 July 1, 2020 — June 30, 2021 64,198 5,846 July 1, 2021 — June 30, 2022 58,280 5,562 July 1, 2022 — June 30, 2023 45,166 5,279 July 1, 2023 — June 30, 2024 21,977 4,995 Remaining periods 18,814 5,469 Total undiscounted future cash flows 280,755 33,953 Less effects of discounting (27,223 ) (5,482 ) Lease liabilities recognized $ 253,532 $ 28,471 As of December 31, 2018 the following future minimum cash payments were required under leases for office space: (in thousands) December 31, 2018 2019 $ 9,849 2020 10,790 2021 11,000 2022 11,130 2023 11,433 Remaining periods 20,831 Total future minimum lease payments $ 75,033 In addition, as of December 31, 2018, we had various contractual commitments for compressor equipment under operating lease arrangements totaling $34.8 million with lease terms expiring over 1 - 35 months. Other Commitments At June 30, 2019 , we had estimated commitments of approximately: (i) $304.6 million to finish drilling, completing, or performing other work on wells and various other infrastructure projects in progress and (ii) $19.2 million to finish gathering system construction in progress. At June 30, 2019 , we had firm sales contracts to deliver approximately 290.7 Bcf of gas over the next 5.6 years . If we do not deliver this gas, our estimated financial commitment, calculated using the July 2019 index price, would be approximately $303.3 million . The value of this commitment will fluctuate due to price volatility and actual volumes delivered. However, we believe no financial commitment will be due based on our current proved reserves and production levels from which we can fulfill these volumetric obligations. In connection with gas gathering and processing agreements, we have volume commitments over the next 9.5 years . If we do not deliver the committed gas or NGLs, as the case may be, the estimated maximum amount that would be payable under these commitments, calculated as of June 30, 2019 , would be approximately $655.2 million . However, we believe no financial commitment will be due based on our current proved reserves and production levels from which we can fulfill these volumetric obligations. We have minimum volume delivery commitments associated with agreements to reimburse connection costs to various pipelines. If we do not deliver this gas, the estimated maximum amount that would be payable under these commitments, calculated as of June 30, 2019 , would be approximately $153.3 million . Of this total, we have accrued a liability of $4.6 million , representing the estimated amount we will have to pay due to insufficient forecasted volumes at particular connection points. At June 30, 2019 , we have various firm transportation agreements for gas and oil pipeline capacity with end dates ranging from 2020 - 2028 under which we will have to pay an estimated $70.5 million over the remaining terms of the agreements. These agreements were entered into to support our residue gas and oil marketing efforts, and we believe we have sufficient reserves that will utilize this firm transportation. All of the noted commitments were routine and made in the ordinary course of our business. Litigation We have various litigation matters related to the ordinary course of our business. We assess the probability of estimable amounts related to these matters in accordance with guidance established by the FASB and adjust our accruals accordingly. Though some of the related claims may be significant, we believe the resolution of them, individually or in the aggregate, would not have a material adverse effect on our financial condition or results of operations after consideration of current accruals. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 6 Months Ended |
Jun. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Three Months Ended Six Months Ended (in thousands) 2019 2018 2019 2018 Cash paid during the period for: Interest (net of capitalized amounts of $19,381, $9,233, $20,121 and $9,389, respectively) (1) $ 14,396 $ 22,954 $ 32,984 $ 23,343 Income taxes $ 1,200 $ — $ 1,206 $ — Cash received for income tax refunds $ 335 $ 717 $ 336 $ 718 ________________________________________ (1) The six months ended June 30, 2019 includes $17.6 million in interest paid upon the redemption of Resolute’s senior notes and credit facility on March 1, 2019 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Helmerich & Payne, Inc. (“H&P”) provides contract drilling services to Cimarex. Cimarex incurred drilling costs of approximately $22.1 million and $46.6 million related to these services during the three and six months ended June 30, 2019 and $16.4 million and $40.0 million during the three and six months ended June 30, 2018 . The amount incurred in 2019 is included in the short-term lease costs disclosed in Note 10. Hans Helmerich, a director of Cimarex, is Chairman of the Board of Directors of H&P. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS On March 1, 2019 , we completed the acquisition of Resolute Energy Corporation, an independent oil and gas company focused on the acquisition and development of unconventional oil and gas properties in the Delaware Basin area of the Permian Basin of west Texas. The principal factors considered by management in making this acquisition included: (i) our expectation that the acquired assets’ attractive returns are competitive with those in our existing portfolio, (ii) the opportunity to apply our experience and learnings from already operating in this area to generating productivity gains from the acquired properties, (iii) the ability to increase our acreage position in the Delaware Basin, and (iv) the expectation that the acquisition will be financially accretive. We acquired 100% of the outstanding common shares and voting interests of Resolute in a cash and stock transaction. The acquisition date fair value of the consideration transferred totaled $820.3 million , which consisted of cash, common stock, and a newly created series of preferred stock (see Note 5 for more information on the preferred stock) as follows: (in thousands) Fair Value of Consideration Transferred Cash $ 325,677 Common stock (5,652 shares issued) 413,015 Preferred stock (63 shares issued) 81,620 $ 820,312 The fair value of the common stock issued as part of the consideration was determined on the basis of the closing market price of Cimarex common stock on the acquisition date. The fair value of the preferred stock issued as part of the consideration was determined using a multiple probability simulation model. Preliminary Purchase Price Allocation The Resolute acquisition has been accounted for as a business combination, using the acquisition method. The following table represents the preliminary allocation of the Resolute purchase price to the identifiable assets acquired and liabilities assumed based on the fair values at the acquisition date, with any excess of the purchase price over the estimated fair value of the identifiable net assets acquired recorded to goodwill. Certain data necessary to complete the purchase price allocation is not yet available, and includes, but is not limited to, finalization of the fair value of certain assets and liabilities, including pre-acquisition working capital balances and completion of the final Resolute tax returns that will provide the underlying tax basis of Resolute’s assets and liabilities and net operating losses. We expect to complete the purchase price allocation during the 12 -month period following the acquisition date, during which time the value of the assets and liabilities may be revised as appropriate. The following table sets forth the preliminary purchase price allocation: (in thousands) March 1, 2019 Cash $ 41,236 Accounts receivable 50,739 Other current assets 13,280 Proved oil and gas properties 692,600 Unproved oil and gas properties 1,054,200 Fixed assets 5,355 Goodwill 107,341 Other assets 142 Current liabilities (202,735 ) Long-term debt (870,000 ) Deferred income taxes (62,409 ) Asset retirement obligation (9,437 ) Total identifiable net assets $ 820,312 In connection with the acquisition, we assumed, and immediately repaid, $870.0 million principal amount of long-term debt consisting of $600.0 million of senior notes and $270.0 million of credit facility borrowings. On March 1, 2019 , we repaid Resolute’s credit facility borrowings, delivered a notice of optional redemption of Resolute’s senior notes for an April 1, 2019 redemption date, and irrevocably deposited with a trustee the full amount of funds to repay the aggregate outstanding senior notes principal balance plus accrued and unpaid interest, incurring a $4.3 million loss on early extinguishment of debt. The cash consideration transferred and the repayment of Resolute’s long-term debt was funded using cash on hand and borrowings on our Credit Facility. We subsequently repaid the borrowings on our Credit Facility using the net proceeds from the March 8, 2019 issuance of $500 million aggregate principal amount of 4.375% senior unsecured notes (see Note 2 for more information on our debt issuance). Goodwill of $107.3 million has been recognized principally as a result of recording net deferred tax liabilities arising from the difference between the tax basis and the purchase price allocated to Resolute’s assets and liabilities, and anticipated opportunities for cost savings through administrative and operational synergies. Goodwill is not expected to be deductible for tax purposes. Acquisition-related costs incurred in 2019 were $8.4 million . These costs, which are comprised primarily of advisory, legal, and other professional and consulting fees, are included in the Other operating expense, net line item on our Condensed Consolidated Statements of Operations and Comprehensive Income. The results of Resolute’s operations have been included in our consolidated financial statements since the March 1, 2019 acquisition date. The amount of revenue and direct operating expenses resulting from the acquisition included in our Condensed Consolidated Statements of Operations and Comprehensive Income from March 1, 2019 through June 30, 2019 is $100.0 million and $21.9 million , respectively. Pro Forma Financial Information The following supplemental pro forma information for the three and six month periods ended June 30, 2019 and 2018 has been prepared to give effect to the Resolute acquisition as if it had occurred on January 1, 2018. The information below reflects pro forma adjustments based on available information and certain assumptions that we believe are reasonable, including (i) the depletion of the combined company’s proved oil and gas properties, (ii) the capitalization of interest expense, and (iii) the estimated tax impacts of the pro forma adjustments. Additionally, pro forma earnings were adjusted to exclude acquisition-related costs incurred by Cimarex of $8.4 million and transaction-related costs incurred by Resolute of $60.0 million . The pro forma results of operations do not include any cost savings or other synergies that may result from the acquisition or any estimated costs that have been or will be incurred by Cimarex to integrate the Resolute assets. The pro forma financial data has not been adjusted to reflect any other acquisitions or dispositions made during the periods presented as their results were not deemed material. The pro forma information is not necessarily indicative of the results that might have occurred had the transaction actually taken place on January 1, 2018 and is not intended to be a projection of future results. Future results may vary significantly from the results reflected in the following pro forma information because of normal production declines, changes in commodity prices, future acquisitions and divestitures, future development and exploration activities, and other factors. Three Months Ended Six Months Ended (in thousands) 2019 2018 2019 2018 Revenue $ 546,463 $ 625,332 $ 1,176,556 $ 1,263,410 Net income $ 109,365 $ 148,486 $ 121,909 $ 335,544 Net income per share: Basic $ 1.07 $ 1.48 $ 1.18 $ 3.33 Diluted $ 1.07 $ 1.47 $ 1.18 $ 3.33 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION Cimarex Energy Co. (“Cimarex,” “we,” or “us”), a Delaware corporation, is an independent oil and gas exploration and production company. Our operations are mainly located in Texas, Oklahoma, and New Mexico. The accompanying unaudited financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain disclosures required by accounting principles generally accepted in the United States and normally included in Annual Reports on Form 10-K have been omitted. Although management believes that our disclosures in these interim financial statements are adequate, they should be read in conjunction with the financial statements, summary of significant accounting policies, and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2018 . In the opinion of management, the accompanying financial statements reflect all adjustments necessary to fairly present our financial position, results of operations, and cash flows for the periods and as of the dates shown. The accounts of Cimarex and its subsidiaries are presented in the accompanying financial statements, with intercompany balances and transactions eliminated in consolidation. Certain amounts in the prior year financial statements have been reclassified to conform to the 2019 financial statement presentation. |
Use of Estimates | Use of Estimates Areas of significance requiring the use of management’s judgments include the estimation of proved oil and gas reserves used in calculating depletion, the estimation of future net revenues used in computing ceiling test limitations, the estimation of future abandonment obligations used in recording asset retirement obligations, and the assessment of goodwill. Estimates and judgments also are required in determining allowances for doubtful accounts, impairments of unproved properties and other assets, valuation of deferred tax assets, fair value measurements, and contingencies. |
Oil and Gas Well Equipment and Supplies and Oil and Gas Properties | Oil and Gas Well Equipment and Supplies Our oil and gas well equipment and supplies are valued at the lower of cost and net realizable value, where net realizable value is estimated selling prices in the ordinary course of business, less reasonably predictable costs of disposal and transportation. Declines in the price of oil and gas well equipment and supplies in future periods could cause us to recognize impairments on these assets. An impairment would not affect cash flow from operating activities, but would adversely affect our net income and stockholders’ equity. Oil and Gas Properties We use the full cost method of accounting for our oil and gas operations. All costs associated with property acquisition, exploration, and development activities are capitalized. Under the full cost method of accounting, we are required to perform a quarterly ceiling test calculation to test our oil and gas properties for possible impairment. If the net capitalized cost of our oil and gas properties, as adjusted for income taxes, exceeds the ceiling limitation, the excess is charged to expense. The ceiling limitation is equal to the sum of: (i) the present value discounted at 10% of estimated future net revenues from proved reserves, (ii) the cost of properties not being amortized, and (iii) the lower of cost or estimated fair value of unproven properties included in the costs being amortized, as adjusted for income taxes. We currently do not have any unproven properties that are being amortized. Estimated future net revenues are determined based on trailing twelve-month average commodity prices and estimated proved reserve quantities, operating costs, and capital expenditures. The calculated ceiling limitation is not intended to be indicative of the fair market value of our proved reserves or future results. We did not recognize a ceiling test impairment during the three and six months ended June 30, 2019 and 2018 because the net capitalized cost of our oil and gas properties, as adjusted for income taxes, did not exceed the ceiling limitation. However, at June 30, 2019 , a decline in the value of our ceiling limitation of approximately 4% or more would have resulted in an impairment. If pricing conditions deteriorate, including the further widening of local market basis differentials, or if there is a negative impact on one or more of the other components of the calculation, we may incur full cost ceiling test impairments in future quarters. Impairment charges do not affect cash flow from operating activities, but do adversely affect our net income and various components of our balance sheet. Any impairment of oil and gas properties is not reversible at a later date. |
Revenue Recognition | Revenue Recognition Oil, Gas, and NGL Sales Revenue is recognized from the sales of oil, gas, and NGLs when the customer obtains control of the product, when we have no further obligations to perform related to the sale, and when collectability is probable. All of our sales of oil, gas, and NGLs are made under contracts with customers, which typically include variable consideration based on monthly pricing tied to local indices and monthly volumes delivered. The nature of our contracts with customers does not require us to constrain that variable consideration or to estimate the amount of transaction price attributable to future performance obligations for accounting purposes. As of June 30, 2019 , we had open contracts with customers with terms of one month to multiple years, as well as “evergreen” contracts that renew on a periodic basis if not canceled by us or the customer. Performance obligations under our contracts with customers are typically satisfied at a point-in-time through monthly delivery of oil, gas, and/or NGLs. Our contracts with customers typically require payment within one month of delivery. Our gas and NGLs are sold under a limited number of contract structure types common in our industry. Under these contracts the gas and its components, including NGLs, may be sold to a single purchaser or the residue gas and NGLs may be sold to separate purchasers. Regardless of the contract structure type, the terms of these contracts compensate us for the value of the residue gas and NGLs at current market prices for each product. However, depending on the contract structure type, certain transportation, processing, and other charges may be deducted against the prices received for the product. Our oil typically is sold at specific delivery points under contract terms that also are common in our industry. Gas Gathering When we transport and/or process third-party gas associated with our equity gas, we recognize revenue for the fees charged to third-parties for such services. Gas Marketing When we market and sell gas for working interest owners, we act as agent under short-term sales and supply agreements and may earn a fee for such services. Revenues from such services are recognized as gas is delivered. Gas Imbalances Revenue from the sale of gas is recorded on the basis of gas actually sold by us. If our aggregate sales volumes for a well are greater (or less) than our proportionate share of production from the well, a liability (or receivable) is established to the extent there are insufficient proved reserves available to make-up the overproduced (or underproduced) imbalance. Imbalances have not been significant in the periods presented. |
Lease Accounting | Lease Accounting In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (“Topic 842”). The FASB subsequently issued various ASUs which provided additional implementation guidance. Topic 842 requires lessees to recognize lease liabilities and right-of-use assets on the balance sheet for contracts that provide lessees with the right to control the use of identified assets for a period of time. The scope of Topic 842 excludes leases to explore for or use minerals, oil, natural gas, and similar nonregenerative resources. We adopted Topic 842 effective January 1, 2019, using the modified retrospective method applied to all leases that existed on that date, which resulted in the recognition of lease liabilities of $276.9 million and right-of-use assets of $265.0 million . In connection with adoption we made use of the following practical expedients, which are provided in Topic 842: • a package of practical expedients to not reassess: 1) whether expired or existing contracts are or contain a lease, 2) lease classification for expired or existing leases, and 3) initial direct costs for existing leases; • an election not to apply the recognition requirements in Topic 842 to short-term leases (a lease that at commencement date has a lease term of 12 months or less and does not contain a purchase option that the Company is reasonably certain to exercise); • a practical expedient that permits combining lease and nonlease components in a contract and accounting for the combination as a lease (elected by asset class); and • a practical expedient to not reassess certain land easements in existence prior to January 1, 2019. |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of Long-Term Debt | Long-term debt at June 30, 2019 and December 31, 2018 consisted of the following: June 30, 2019 December 31, 2018 (in thousands) Principal Unamortized Debt Issuance Costs and Discounts (1) Long-term Debt, net Principal Unamortized Debt Issuance Costs and Discount (1) Long-term Debt, net 4.375% Notes due 2024 $ 750,000 $ (3,982 ) $ 746,018 $ 750,000 $ (4,439 ) $ 745,561 3.90% Notes due 2027 750,000 (6,651 ) 743,349 750,000 (7,007 ) 742,993 4.375% Notes due 2029 500,000 (5,137 ) 494,863 — — — $ 2,000,000 $ (15,770 ) $ 1,984,230 $ 1,500,000 $ (11,446 ) $ 1,488,554 ________________________________________ (1) At June 30, 2019 , the unamortized debt issuance costs and discount related to the 3.90% Notes due 2027 were $5.1 million and $1.5 million , respectively. At December 31, 2018 , the unamortized debt issuance costs and discount related to the 3.90% Notes due 2027 were $5.4 million and $1.6 million , respectively. At June 30, 2019 , the unamortized debt issuance costs and discount related to the 4.375% Notes due 2029 were $4.5 million and $0.7 million , respectively. The 4.375% Notes due 2024 were issued at par. |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedges, Assets [Abstract] | |
Schedule of Outstanding Hedging Contracts Relative to Future Production | The following tables summarize our outstanding derivative contracts as of June 30, 2019 : Oil Collars First Quarter Second Quarter Third Quarter Fourth Quarter Total 2019: WTI (1) Volume (Bbls) — — 3,312,000 2,576,000 5,888,000 Weighted Avg Price - Floor $ — $ — $ 54.28 $ 55.50 $ 54.81 Weighted Avg Price - Ceiling $ — $ — $ 67.88 $ 68.36 $ 68.09 2020: WTI (1) Volume (Bbls) 1,820,000 1,092,000 368,000 368,000 3,648,000 Weighted Avg Price - Floor $ 54.90 $ 51.50 $ 50.00 $ 50.00 $ 52.89 Weighted Avg Price - Ceiling $ 68.49 $ 63.59 $ 62.15 $ 62.15 $ 65.74 ________________________________________ (1) The index price for these collars is West Texas Intermediate (“WTI”) as quoted on the New York Mercantile Exchange (“NYMEX”). Gas Collars First Quarter Second Quarter Third Quarter Fourth Quarter Total 2019: PEPL (1) Volume (MMBtu) — — 12,880,000 10,120,000 23,000,000 Weighted Avg Price - Floor $ — $ — $ 1.93 $ 1.92 $ 1.92 Weighted Avg Price - Ceiling $ — $ — $ 2.32 $ 2.36 $ 2.33 Perm EP (2) Volume (MMBtu) — — 8,280,000 5,520,000 13,800,000 Weighted Avg Price - Floor $ — $ — $ 1.46 $ 1.38 $ 1.43 Weighted Avg Price - Ceiling $ — $ — $ 1.76 $ 1.71 $ 1.74 Waha (3) Volume (MMBtu) — — 5,520,000 5,520,000 11,040,000 Weighted Avg Price - Floor $ — $ — $ 1.48 $ 1.48 $ 1.48 Weighted Avg Price - Ceiling $ — $ — $ 1.82 $ 1.82 $ 1.82 2020: PEPL (1) Volume (MMBtu) 7,280,000 4,550,000 1,840,000 1,840,000 15,510,000 Weighted Avg Price - Floor $ 1.93 $ 1.91 $ 1.85 $ 1.85 $ 1.91 Weighted Avg Price - Ceiling $ 2.36 $ 2.28 $ 2.31 $ 2.31 $ 2.32 Perm EP (2) Volume (MMBtu) 3,640,000 2,730,000 1,840,000 1,840,000 10,050,000 Weighted Avg Price - Floor $ 1.40 $ 1.40 $ 1.35 $ 1.35 $ 1.38 Weighted Avg Price - Ceiling $ 1.79 $ 1.82 $ 1.66 $ 1.66 $ 1.75 Waha (3) Volume (MMBtu) 4,550,000 2,730,000 — — 7,280,000 Weighted Avg Price - Floor $ 1.50 $ 1.57 $ — $ — $ 1.53 Weighted Avg Price - Ceiling $ 1.87 $ 1.97 $ — $ — $ 1.91 ________________________________________ (1) The index price for these collars is Panhandle Eastern Pipe Line, Tex/OK Mid-Continent Index (“PEPL”) as quoted in Platt’s Inside FERC. (2) The index price for these collars is El Paso Natural Gas Company, Permian Basin Index (“Perm EP”) as quoted in Platt’s Inside FERC. (3) The index price for these collars is Waha West Texas Natural Gas Index (“Waha”) as quoted in Platt’s Inside FERC. Oil Basis Swaps First Quarter Second Quarter Third Quarter Fourth Quarter Total 2019: WTI Midland (1) Volume (Bbls) — — 3,266,000 3,266,000 6,532,000 Weighted Avg Differential (2) $ — $ — $ (7.36 ) $ (6.32 ) $ (6.84 ) 2020: WTI Midland (1) Volume (Bbls) 2,093,000 1,365,000 736,000 736,000 4,930,000 Weighted Avg Differential (2) $ 0.16 $ 0.19 $ 0.71 $ 0.71 $ 0.33 ________________________________________ (1) The index price we pay under these basis swaps is WTI Midland as quoted by Argus Americas Crude. (2) The index price we receive under these basis swaps is WTI as quoted on the NYMEX plus or minus, as applicable, the weighted average differential shown in the table. Oil Swaps First Quarter Second Quarter Third Quarter Fourth Quarter Total 2019: WTI (1) Volume (Bbls) — — 460,000 460,000 920,000 Weighted Avg Price $ — $ — $ 64.54 $ 64.54 $ 64.54 ________________________________________ (1) The fixed price on these swaps is NYMEX WTI. Gas Swaps First Quarter Second Quarter Third Quarter Fourth Quarter Total 2019: Henry Hub (1) Volume (MMBtu) — — 3,220,000 3,220,000 6,440,000 Weighted Avg Price $ — $ — $ 3.00 $ 3.00 $ 3.00 ________________________________________ (1) The fixed price on these swaps is NYMEX Henry Hub. Sold Oil Calls First Quarter Second Quarter Third Quarter Fourth Quarter Total 2019: WTI (1) Volume (Bbls) — — 337,640 337,640 675,280 Weighted Avg Call Price $ — $ — $ 64.36 $ 64.36 $ 64.36 ________________________________________ (1) The index on these sold calls is NYMEX WTI. |
Schedule of Derivative Contracts Entered into Subsequent to Balance Sheet Date | The following table summarizes our derivative contracts entered into subsequent to June 30, 2019 through August 1, 2019: Oil Collars First Second Third Fourth Quarter Total 2019: WTI Volume (Bbls) — — 368,000 368,000 736,000 Wtd Avg Price - Floor $ — $ — $ 50.00 $ 50.00 $ 50.00 Wtd Avg Price - Ceiling $ — $ — $ 63.45 $ 63.45 $ 63.45 2020: WTI Volume (Bbls) 364,000 364,000 368,000 368,000 1,464,000 Wtd Avg Price - Floor $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 50.00 Wtd Avg Price - Ceiling $ 63.45 $ 63.45 $ 63.45 $ 63.45 $ 63.45 |
Schedule of Net (Gains) Losses from Settlements and Changes of Derivative Contracts | The following table presents the components of (Gain) loss on derivative instruments, net for the periods indicated. Three Months Ended Six Months Ended (in thousands) 2019 2018 2019 2018 (Increase) decrease in fair value of derivative instruments, net: Gas contracts $ (6,370 ) $ 14,566 $ (16,216 ) $ 2,777 Oil contracts (28,161 ) (397 ) 88,086 (5,156 ) (34,531 ) 14,169 71,870 (2,379 ) Cash (receipts) payments on derivative instruments, net: Gas contracts (21,176 ) (9,918 ) (17,412 ) (15,037 ) Oil contracts 14,939 17,448 20,226 34,956 (6,237 ) 7,530 2,814 19,919 (Gain) loss on derivative instruments, net $ (40,768 ) $ 21,699 $ 74,684 $ 17,540 |
Schedule of Derivative Assets and Liabilities | The following tables present the amounts and classifications of our derivative assets and liabilities as of June 30, 2019 and December 31, 2018 , as well as the potential effect of netting arrangements on our recognized derivative asset and liability amounts. June 30, 2019 (in thousands) Balance Sheet Location Asset Liability Oil contracts Current assets — Derivative instruments $ 23,060 $ — Gas contracts Current assets — Derivative instruments 19,897 — Oil contracts Non-current assets — Derivative instruments 613 — Oil contracts Current liabilities — Derivative instruments — 50,056 Oil contracts Non-current liabilities — Derivative instruments — 171 Gas contracts Non-current liabilities — Derivative instruments — 669 Total gross amounts presented in the balance sheet 43,570 50,896 Less: gross amounts not offset in the balance sheet (23,966 ) (23,966 ) Net amount $ 19,604 $ 26,930 December 31, 2018 (in thousands) Balance Sheet Location Asset Liability Oil contracts Current assets — Derivative instruments $ 94,240 $ — Gas contracts Current assets — Derivative instruments 7,699 — Oil contracts Non-current assets — Derivative instruments 9,246 — Oil contracts Current liabilities — Derivative instruments — 23,378 Gas contracts Current liabilities — Derivative instruments — 4,249 Oil contracts Non-current liabilities — Derivative instruments — 311 Gas contracts Non-current liabilities — Derivative instruments — 1,956 Total gross amounts presented in the balance sheet 111,185 29,894 Less: gross amounts not offset in the balance sheet (29,894 ) (29,894 ) Net amount $ 81,291 $ — |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurement Information for Certain Assets and Liabilities | The following table provides fair value measurement information for certain assets and liabilities as of June 30, 2019 and December 31, 2018 : June 30, 2019 December 31, 2018 (in thousands) Book Value Fair Value Book Value Fair Value Financial Assets (Liabilities): 4.375% Notes due 2024 $ (750,000 ) $ (793,913 ) $ (750,000 ) $ (744,578 ) 3.90% Notes due 2027 $ (750,000 ) $ (769,643 ) $ (750,000 ) $ (701,273 ) 4.375% Notes due 2029 $ (500,000 ) $ (530,535 ) $ — $ — Derivative instruments — assets $ 43,570 $ 43,570 $ 111,185 $ 111,185 Derivative instruments — liabilities $ (50,896 ) $ (50,896 ) $ (29,894 ) $ (29,894 ) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of Recognition of Non-Cash Stock-Based Compensation Costs | We have recognized stock-based compensation cost as shown below for the periods indicated. Three Months Ended Six Months Ended (in thousands) 2019 2018 2019 2018 Restricted stock awards: Performance stock awards $ 5,535 $ 3,809 $ 10,929 $ 10,538 Service-based stock awards 5,993 4,247 13,224 9,319 11,528 8,056 24,153 19,857 Stock option awards 396 637 1,018 1,254 Total stock compensation cost 11,924 8,693 25,171 21,111 Less amounts capitalized to oil and gas properties (5,430 ) (5,598 ) (11,964 ) (11,286 ) Stock compensation expense $ 6,494 $ 3,095 $ 13,207 $ 9,825 |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Asset Retirement Obligation [Abstract] | |
Schedule of Asset Retirement Obligations | The following table reflects the components of the change in the carrying amount of the asset retirement obligation for the six months ended June 30, 2019 : (in thousands) Six Months Ended Asset retirement obligation at January 1, 2019 $ 166,904 Liabilities incurred 12,611 Liability settlements and disposals (11,771 ) Accretion expense 3,714 Revisions of estimated liabilities 2,415 Asset retirement obligation at June 30, 2019 173,873 Less current obligation (16,492 ) Long-term asset retirement obligation $ 157,381 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Calculations of Basic and Diluted Net Earnings (Loss) per Common Share | The calculations of basic and diluted net earnings per common share under the two-class method are presented below for the periods indicated: Three Months Ended June 30, 2019 2018 (in thousands, except per share information) Income (Numerator) Shares (Denominator) Per-Share Amount Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 109,309 $ 140,997 Less: net income attributable to participating securities (1,596 ) (1,892 ) Less: preferred stock dividends (1,270 ) — Basic earnings per share Income available to common stockholders 106,443 99,658 $ 1.07 139,105 93,728 $ 1.48 Effects of dilutive securities (1) Options — 7 — 31 Diluted earnings per share Income available to common stockholders and assumed conversions $ 106,443 99,665 $ 1.07 $ 139,105 93,759 $ 1.48 ________________________________________ (1) Inclusion of certain potential common shares would have an anti-dilutive effect, therefore, these shares were excluded from the calculations of diluted earnings per share. Excluded from the three months ended June 30, 2019 calculation were 387.5 thousand potential common shares from the assumed exercise of employee stock options and 502.6 thousand potential common shares from the assumed conversion of the Convertible Preferred Stock. Excluded from the three months ended June 30, 2018 calculation were 292.1 thousand potential common shares from the assumed exercise of employee stock options. Six Months Ended June 30, 2019 2018 (in thousands, except per share information) Income (Numerator) Shares (Denominator) Per-Share Amount Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 135,625 $ 327,315 Less: net income attributable to participating securities (2,067 ) (4,546 ) Less: preferred stock dividends (2,539 ) — Basic earnings per share Income available to common stockholders 131,019 97,800 $ 1.34 322,769 93,713 $ 3.44 Effects of dilutive securities (1) Options — 9 1 35 Diluted earnings per share Income available to common stockholders and assumed conversions $ 131,019 97,809 $ 1.34 $ 322,770 93,748 $ 3.44 ________________________________________ (1) Inclusion of certain potential common shares would have an anti-dilutive effect, therefore, these shares were excluded from the calculations of diluted earnings per share. Excluded from the six months ended June 30, 2019 calculation were 391.1 thousand potential common shares from the assumed exercise of employee stock options and 502.6 thousand potential common shares from the assumed conversion of the Convertible Preferred Stock. Excluded from the six months ended June 30, 2018 calculation were 295.6 thousand potential common shares from the assumed exercise of employee stock options. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of the Provision for Income Taxes | The components of our provision for income taxes and our combined federal and state effective income tax rates were as follows: Three Months Ended Six Months Ended (in thousands) 2019 2018 2019 2018 Current tax (benefit) $ — $ (717 ) $ — $ (717 ) Deferred tax expense 34,046 42,783 42,119 99,732 $ 34,046 $ 42,066 $ 42,119 $ 99,015 Combined federal and state effective income tax rate 23.7 % 23.0 % 23.7 % 23.2 % |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Supplemental Balance Sheet Information of Leases | The following tables present the amounts and classifications of our right-of-use assets and estimated lease liabilities as of June 30, 2019 : (in thousands) Balance Sheet Location June 30, 2019 Operating lease right-of-use assets Non-current assets — Fixed assets, net $ 243,089 Finance lease right-of-use asset Non-current assets — Other assets 27,042 Total right-of-use assets $ 270,131 (in thousands) Balance Sheet Location June 30, 2019 Operating lease liabilities — current Current liabilities — Operating leases $ 62,119 Operating lease liabilities — non-current Non-current liabilities — Operating leases 191,413 Finance lease liability — current Current liabilities — Accrued liabilities-Other 6,576 Finance lease liability — non-current Non-current liabilities — Other liabilities 21,895 Total lease liabilities $ 282,003 |
Schedule of Lease Cost and Cash Paid for Leases | The following table summarizes estimated total lease cost, which includes amounts recognized in income and amounts capitalized for the indicated period: (in thousands) Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Finance lease cost: Amortization of right-of-use asset $ 1,097 $ 2,193 Interest on lease liability 457 943 Operating lease cost: (1) Production expense 3,943 7,777 Gas gathering and other expense 6,522 12,686 General and administrative expense 2,335 4,634 Short-term lease cost (2) 162,334 317,044 Total lease cost $ 176,688 $ 345,277 ________________________________________ (1) Operating lease cost in the table above is composed of costs incurred under real estate and production-related leases. These costs are included in the indicated captions on the Condensed Consolidated Statements of Operations. (2) Short-term lease cost in the table above is composed of costs incurred under leases with terms of 12 months or less for right-of-use assets used in exploration and development activities. Payments under such leases are typically based on usage of the underlying right-of-use asset and, therefore, are also variable lease payments. These costs are capitalized as part of proved properties on the Condensed Consolidated Balance Sheet. The following table summarizes estimated cash paid for our leases for the indicated period: (in thousands) Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Financing cash outflows from finance lease $ 1,555 Operating cash outflows from operating leases $ 25,466 Cash paid for short-term leases and variable lease payments: Investing cash outflows from operating leases $ 309,150 |
Schedule of Weighted-Average Remaining Lease Term and Discount Rates of Leases | The following table presents the weighted-average remaining lease terms and discount rates of our leases as of the indicated date: June 30, 2019 Weighted-average remaining lease term (in years): Finance lease 6.2 Operating leases 4.5 Weighted-average discount rate: Finance lease 6.5 % Operating leases 4.0 % |
Schedule of Maturity of Finance Leases | The following table reflects the undiscounted future cash flows utilized in the calculation of the lease liabilities recorded at June 30, 2019: June 30, 2019 (in thousands) Operating Leases Finance Lease July 1, 2019 — June 30, 2020 $ 72,320 $ 6,802 July 1, 2020 — June 30, 2021 64,198 5,846 July 1, 2021 — June 30, 2022 58,280 5,562 July 1, 2022 — June 30, 2023 45,166 5,279 July 1, 2023 — June 30, 2024 21,977 4,995 Remaining periods 18,814 5,469 Total undiscounted future cash flows 280,755 33,953 Less effects of discounting (27,223 ) (5,482 ) Lease liabilities recognized $ 253,532 $ 28,471 |
Schedule of Maturity of Operating Leases | The following table reflects the undiscounted future cash flows utilized in the calculation of the lease liabilities recorded at June 30, 2019: June 30, 2019 (in thousands) Operating Leases Finance Lease July 1, 2019 — June 30, 2020 $ 72,320 $ 6,802 July 1, 2020 — June 30, 2021 64,198 5,846 July 1, 2021 — June 30, 2022 58,280 5,562 July 1, 2022 — June 30, 2023 45,166 5,279 July 1, 2023 — June 30, 2024 21,977 4,995 Remaining periods 18,814 5,469 Total undiscounted future cash flows 280,755 33,953 Less effects of discounting (27,223 ) (5,482 ) Lease liabilities recognized $ 253,532 $ 28,471 |
Schedule of Future Minimum Lease Payments | As of December 31, 2018 the following future minimum cash payments were required under leases for office space: (in thousands) December 31, 2018 2019 $ 9,849 2020 10,790 2021 11,000 2022 11,130 2023 11,433 Remaining periods 20,831 Total future minimum lease payments $ 75,033 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Information | Three Months Ended Six Months Ended (in thousands) 2019 2018 2019 2018 Cash paid during the period for: Interest (net of capitalized amounts of $19,381, $9,233, $20,121 and $9,389, respectively) (1) $ 14,396 $ 22,954 $ 32,984 $ 23,343 Income taxes $ 1,200 $ — $ 1,206 $ — Cash received for income tax refunds $ 335 $ 717 $ 336 $ 718 ________________________________________ (1) The six months ended June 30, 2019 includes $17.6 million in interest paid upon the redemption of Resolute’s senior notes and credit facility on March 1, 2019 . |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Consideration Transferred in Acquisition | The acquisition date fair value of the consideration transferred totaled $820.3 million , which consisted of cash, common stock, and a newly created series of preferred stock (see Note 5 for more information on the preferred stock) as follows: (in thousands) Fair Value of Consideration Transferred Cash $ 325,677 Common stock (5,652 shares issued) 413,015 Preferred stock (63 shares issued) 81,620 $ 820,312 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table sets forth the preliminary purchase price allocation: (in thousands) March 1, 2019 Cash $ 41,236 Accounts receivable 50,739 Other current assets 13,280 Proved oil and gas properties 692,600 Unproved oil and gas properties 1,054,200 Fixed assets 5,355 Goodwill 107,341 Other assets 142 Current liabilities (202,735 ) Long-term debt (870,000 ) Deferred income taxes (62,409 ) Asset retirement obligation (9,437 ) Total identifiable net assets $ 820,312 |
Schedule of Pro Forma information | Three Months Ended Six Months Ended (in thousands) 2019 2018 2019 2018 Revenue $ 546,463 $ 625,332 $ 1,176,556 $ 1,263,410 Net income $ 109,365 $ 148,486 $ 121,909 $ 335,544 Net income per share: Basic $ 1.07 $ 1.48 $ 1.18 $ 3.33 Diluted $ 1.07 $ 1.47 $ 1.18 $ 3.33 |
BASIS OF PRESENTATION - Narrati
BASIS OF PRESENTATION - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jan. 01, 2019 | |
Oil and Gas, Delivery Commitment [Line Items] | ||
Discount rate for calculating present value of estimated future net revenues from proved reserves (as a percent) | 10.00% | |
Decline in ceiling limitation that would have resulted in impairment (as a percent) | 4.00% | |
Lease liabilities recognized | $ 253,532 | |
Operating lease right-of-use assets | $ 243,089 | |
Minimum | ||
Oil and Gas, Delivery Commitment [Line Items] | ||
Oil and gas delivery commitments and contracts, period | 1 month | |
Accounting Standards Update 2016-02 | ||
Oil and Gas, Delivery Commitment [Line Items] | ||
Lease liabilities recognized | $ 276,900 | |
Operating lease right-of-use assets | $ 265,000 |
LONG-TERM DEBT - Long-Term Debt
LONG-TERM DEBT - Long-Term Debt Outstanding (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Apr. 30, 2017 | Jun. 30, 2014 |
Debt Instrument | ||||
Long-term debt principal | $ 2,000,000,000 | $ 1,500,000,000 | ||
Unamortized debt issuance costs and discount | (15,770,000) | (11,446,000) | ||
Long-term debt, net | 1,984,230,000 | 1,488,554,000 | ||
4.375% Notes due 2024 | ||||
Debt Instrument | ||||
Long-term debt principal | 750,000,000 | 750,000,000 | ||
Unamortized debt issuance costs and discount | (3,982,000) | (4,439,000) | ||
Long-term debt, net | $ 746,018,000 | 745,561,000 | ||
4.375% Notes due 2024 | Senior Notes | ||||
Debt Instrument | ||||
Long-term debt principal | $ 750,000,000 | |||
Stated interest rate (as a percent) | 4.375% | 4.375% | ||
3.90% Notes due 2027 | ||||
Debt Instrument | ||||
Long-term debt principal | $ 750,000,000 | 750,000,000 | ||
Unamortized debt issuance costs and discount | (6,651,000) | (7,007,000) | ||
Long-term debt, net | $ 743,349,000 | 742,993,000 | ||
3.90% Notes due 2027 | Senior Notes | ||||
Debt Instrument | ||||
Long-term debt principal | $ 750,000,000 | |||
Stated interest rate (as a percent) | 3.90% | 3.90% | ||
Unamortized debt issuance costs | $ 5,100,000 | 5,400,000 | ||
Unamortized discount | 1,500,000 | 1,600,000 | ||
4.375% Notes due 2029 | ||||
Debt Instrument | ||||
Long-term debt principal | 500,000,000 | 0 | ||
Unamortized debt issuance costs and discount | (5,137,000) | 0 | ||
Long-term debt, net | $ 494,863,000 | $ 0 | ||
4.375% Notes due 2029 | Senior Notes | ||||
Debt Instrument | ||||
Stated interest rate (as a percent) | 4.375% | |||
Unamortized debt issuance costs | $ 4,500,000 | |||
Unamortized discount | $ 700,000 |
LONG-TERM DEBT - Bank Debt Narr
LONG-TERM DEBT - Bank Debt Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Feb. 05, 2019 | Dec. 31, 2018 | |
Line of Credit Facility [Line Items] | ||||
Unamortized debt issuance costs and discount | $ 15,770,000 | $ 15,770,000 | $ 11,446,000 | |
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Aggregate commitments under credit facility | $ 1,250,000,000 | |||
Maximum borrowing capacity including accordion feature | 1,500,000,000 | |||
Borrowings outstanding | 0 | 0 | ||
Unused borrowing availability | 1,248,000,000 | $ 1,248,000,000 | ||
Credit facility borrowings during period | 528,000,000 | |||
Credit facility repayments during period | 528,000,000 | |||
Debt-to-capital ratio (as a percent) | 65.00% | |||
Unamortized debt issuance costs and discount | 4,600,000 | $ 4,600,000 | $ 3,000,000 | $ 2,200,000 |
Letter of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Borrowings outstanding | $ 2,500,000 | $ 2,500,000 | ||
Minimum | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Commitment fee rate (as a percent) | 0.125% | |||
Maximum | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Commitment fee rate (as a percent) | 0.35% | |||
London Interbank Offered Rate (LIBOR) | Minimum | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate margin (as a percent) | 1.125% | |||
London Interbank Offered Rate (LIBOR) | Maximum | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate margin (as a percent) | 2.00% | |||
Base Rate | Minimum | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate margin (as a percent) | 0.125% | |||
Base Rate | Maximum | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate margin (as a percent) | 1.00% |
LONG-TERM DEBT - Senior Notes N
LONG-TERM DEBT - Senior Notes Narrative (Details) - USD ($) | Mar. 08, 2019 | Apr. 30, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Jun. 30, 2014 |
Debt Instrument | ||||||
Principal amount | $ 2,000,000,000 | $ 1,500,000,000 | ||||
Proceeds from issuance of long-term debt | 1,710,310,000 | $ 0 | ||||
4.375% Notes due 2029 | ||||||
Debt Instrument | ||||||
Principal amount | 500,000,000 | 0 | ||||
3.90% Notes due 2027 | ||||||
Debt Instrument | ||||||
Principal amount | 750,000,000 | 750,000,000 | ||||
4.375% Notes due 2024 | ||||||
Debt Instrument | ||||||
Principal amount | $ 750,000,000 | $ 750,000,000 | ||||
Senior Notes | 4.375% Notes due 2029 | ||||||
Debt Instrument | ||||||
Principal amount | $ 500,000,000 | |||||
Stated interest rate (as a percent) | 4.375% | |||||
Issuance price relative to par value (as a percent) | 99.862% | |||||
Effective rate (as a percent) | 4.392% | 4.50% | ||||
Proceeds from issuance of long-term debt | $ 494,700,000 | |||||
Senior Notes | 3.90% Notes due 2027 | ||||||
Debt Instrument | ||||||
Principal amount | $ 750,000,000 | |||||
Stated interest rate (as a percent) | 3.90% | 3.90% | ||||
Issuance price relative to par value (as a percent) | 99.748% | |||||
Effective rate (as a percent) | 3.93% | 4.01% | ||||
Senior Notes | 4.375% Notes due 2024 | ||||||
Debt Instrument | ||||||
Principal amount | $ 750,000,000 | |||||
Stated interest rate (as a percent) | 4.375% | 4.375% | ||||
Effective rate (as a percent) | 4.50% |
DERIVATIVE INSTRUMENTS - Deriva
DERIVATIVE INSTRUMENTS - Derivative Contracts (Details) | 6 Months Ended |
Jun. 30, 2019MMBTU$ / bbl$ / MMBTUbbl | |
Oil Collar WTI Index | 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 5,888,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 54.81 |
Weighted Avg Price - Ceiling (USD per unit) | 68.09 |
Oil Collar WTI Index | 2019 | Subsequent at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 736,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 50 |
Weighted Avg Price - Ceiling (USD per unit) | 63.45 |
Oil Collar WTI Index | Third Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 3,312,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 54.28 |
Weighted Avg Price - Ceiling (USD per unit) | 67.88 |
Oil Collar WTI Index | Third Quarter - 2019 | Subsequent at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 368,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 50 |
Weighted Avg Price - Ceiling (USD per unit) | 63.45 |
Oil Collar WTI Index | Fourth Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 2,576,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 55.50 |
Weighted Avg Price - Ceiling (USD per unit) | 68.36 |
Oil Collar WTI Index | Fourth Quarter - 2019 | Subsequent at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 368,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 50 |
Weighted Avg Price - Ceiling (USD per unit) | 63.45 |
Oil Collar WTI Index | 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 3,648,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 52.89 |
Weighted Avg Price - Ceiling (USD per unit) | 65.74 |
Oil Collar WTI Index | 2020 | Subsequent at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 1,464,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 50 |
Weighted Avg Price - Ceiling (USD per unit) | 63.45 |
Oil Collar WTI Index | First Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 1,820,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 54.90 |
Weighted Avg Price - Ceiling (USD per unit) | 68.49 |
Oil Collar WTI Index | First Quarter - 2020 | Subsequent at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 364,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 50 |
Weighted Avg Price - Ceiling (USD per unit) | 63.45 |
Oil Collar WTI Index | Second Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 1,092,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 51.50 |
Weighted Avg Price - Ceiling (USD per unit) | 63.59 |
Oil Collar WTI Index | Second Quarter - 2020 | Subsequent at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 364,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 50 |
Weighted Avg Price - Ceiling (USD per unit) | 63.45 |
Oil Collar WTI Index | Third Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 368,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 50 |
Weighted Avg Price - Ceiling (USD per unit) | 62.15 |
Oil Collar WTI Index | Third Quarter - 2020 | Subsequent at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 368,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 50 |
Weighted Avg Price - Ceiling (USD per unit) | 63.45 |
Oil Collar WTI Index | Fourth Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 368,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 50 |
Weighted Avg Price - Ceiling (USD per unit) | 62.15 |
Oil Collar WTI Index | Fourth Quarter - 2020 | Subsequent at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 368,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 50 |
Weighted Avg Price - Ceiling (USD per unit) | 63.45 |
Gas Collar PEPL Index | 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 23,000,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.92 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 2.33 |
Gas Collar PEPL Index | Third Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 12,880,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.93 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 2.32 |
Gas Collar PEPL Index | Fourth Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 10,120,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.92 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 2.36 |
Gas Collar PEPL Index | 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 15,510,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.91 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 2.32 |
Gas Collar PEPL Index | First Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 7,280,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.93 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 2.36 |
Gas Collar PEPL Index | Second Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 4,550,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.91 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 2.28 |
Gas Collar PEPL Index | Third Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 1,840,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.85 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 2.31 |
Gas Collar PEPL Index | Fourth Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 1,840,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.85 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 2.31 |
Gas Collar Perm EP | 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 13,800,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.43 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 1.74 |
Gas Collar Perm EP | Third Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 8,280,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.46 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 1.76 |
Gas Collar Perm EP | Fourth Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 5,520,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.38 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 1.71 |
Gas Collar Perm EP | 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 10,050,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.38 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 1.75 |
Gas Collar Perm EP | First Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 3,640,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.40 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 1.79 |
Gas Collar Perm EP | Second Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 2,730,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.40 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 1.82 |
Gas Collar Perm EP | Third Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 1,840,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.35 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 1.66 |
Gas Collar Perm EP | Fourth Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 1,840,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.35 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 1.66 |
Gas Collar Waha | 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 11,040,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.48 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 1.82 |
Gas Collar Waha | Third Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 5,520,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.48 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 1.82 |
Gas Collar Waha | Fourth Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 5,520,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.48 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 1.82 |
Gas Collar Waha | 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 7,280,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.53 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 1.91 |
Gas Collar Waha | First Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 4,550,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.50 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 1.87 |
Gas Collar Waha | Second Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 2,730,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / MMBTU | 1.57 |
Weighted Avg Price - Ceiling (USD per unit) | $ / MMBTU | 1.97 |
Oil Basis Swaps WTI Midland Index | 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 6,532,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | (6.84) |
Oil Basis Swaps WTI Midland Index | Third Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 3,266,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | (7.36) |
Oil Basis Swaps WTI Midland Index | Fourth Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 3,266,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | (6.32) |
Oil Basis Swaps WTI Midland Index | 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 4,930,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | 0.33 |
Oil Basis Swaps WTI Midland Index | First Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 2,093,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | 0.16 |
Oil Basis Swaps WTI Midland Index | Second Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 1,365,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | 0.19 |
Oil Basis Swaps WTI Midland Index | Third Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 736,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | 0.71 |
Oil Basis Swaps WTI Midland Index | Fourth Quarter - 2020 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 736,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | 0.71 |
Oil Swaps WTI Index | 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 920,000 |
Weighted Average Price | |
Weighted Avg Price (USD per unit) | 64.54 |
Oil Swaps WTI Index | Third Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 460,000 |
Weighted Average Price | |
Weighted Avg Price (USD per unit) | 64.54 |
Oil Swaps WTI Index | Fourth Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 460,000 |
Weighted Average Price | |
Weighted Avg Price (USD per unit) | 64.54 |
Gas Swaps Henry Hub | 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 6,440,000 |
Weighted Average Price | |
Weighted Avg Price (USD per unit) | 3 |
Gas Swaps Henry Hub | Third Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 3,220,000 |
Weighted Average Price | |
Weighted Avg Price (USD per unit) | 3 |
Gas Swaps Henry Hub | Fourth Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 3,220,000 |
Weighted Average Price | |
Weighted Avg Price (USD per unit) | 3 |
Oil Sold Calls WTI Index | 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 675,280 |
Weighted Average Price | |
Weighted Avg Price - Ceiling (USD per unit) | 64.36 |
Oil Sold Calls WTI Index | Third Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 337,640 |
Weighted Average Price | |
Weighted Avg Price - Ceiling (USD per unit) | 64.36 |
Oil Sold Calls WTI Index | Fourth Quarter - 2019 | Outstanding at end of period | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 337,640 |
Weighted Average Price | |
Weighted Avg Price - Ceiling (USD per unit) | 64.36 |
DERIVATIVE INSTRUMENTS - (Gain)
DERIVATIVE INSTRUMENTS - (Gain) Loss on Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative [Line Items] | ||||
(Increase) decrease in fair value of derivative instruments, net: | $ (34,531) | $ 14,169 | $ 71,870 | $ (2,379) |
Cash (receipts) payments on derivative instruments, net: | (6,237) | 7,530 | 2,814 | 19,919 |
(Gain) loss on derivative instruments, net | (40,768) | 21,699 | 74,684 | 17,540 |
Gas contracts | ||||
Derivative [Line Items] | ||||
(Increase) decrease in fair value of derivative instruments, net: | (6,370) | 14,566 | (16,216) | 2,777 |
Cash (receipts) payments on derivative instruments, net: | (21,176) | (9,918) | (17,412) | (15,037) |
Oil contracts | ||||
Derivative [Line Items] | ||||
(Increase) decrease in fair value of derivative instruments, net: | (28,161) | (397) | 88,086 | (5,156) |
Cash (receipts) payments on derivative instruments, net: | $ 14,939 | $ 17,448 | $ 20,226 | $ 34,956 |
DERIVATIVE INSTRUMENTS - Deri_2
DERIVATIVE INSTRUMENTS - Derivative Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Asset | ||
Total gross amounts presented in the balance sheet | $ 42,957 | $ 101,939 |
Liability | ||
Total gross amounts presented in the balance sheet | 50,056 | 27,627 |
Not Designated as Hedging Instrument | ||
Asset | ||
Total gross amounts presented in the balance sheet | 43,570 | 111,185 |
Less: gross amounts not offset in the balance sheet | (23,966) | (29,894) |
Net amount | 19,604 | 81,291 |
Liability | ||
Total gross amounts presented in the balance sheet | 50,896 | 29,894 |
Less: gross amounts not offset in the balance sheet | (23,966) | (29,894) |
Net amount | 26,930 | 0 |
Current assets — Derivative instruments | Not Designated as Hedging Instrument | Oil contracts | ||
Asset | ||
Total gross amounts presented in the balance sheet | 23,060 | 94,240 |
Current assets — Derivative instruments | Not Designated as Hedging Instrument | Gas contracts | ||
Asset | ||
Total gross amounts presented in the balance sheet | 19,897 | 7,699 |
Non-current assets — Derivative instruments | Not Designated as Hedging Instrument | Oil contracts | ||
Asset | ||
Total gross amounts presented in the balance sheet | 613 | 9,246 |
Current liabilities — Derivative instruments | Not Designated as Hedging Instrument | Oil contracts | ||
Liability | ||
Total gross amounts presented in the balance sheet | 50,056 | 23,378 |
Current liabilities — Derivative instruments | Not Designated as Hedging Instrument | Gas contracts | ||
Liability | ||
Total gross amounts presented in the balance sheet | 4,249 | |
Non-current liabilities — Derivative instruments | Not Designated as Hedging Instrument | Oil contracts | ||
Liability | ||
Total gross amounts presented in the balance sheet | 171 | 311 |
Non-current liabilities — Derivative instruments | Not Designated as Hedging Instrument | Gas contracts | ||
Liability | ||
Total gross amounts presented in the balance sheet | $ 669 | $ 1,956 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Apr. 30, 2017 | Jun. 30, 2014 |
Financial Assets (Liabilities): | ||||
Derivative instruments — assets | $ 42,957 | $ 101,939 | ||
Derivative instruments — liabilities | $ (50,056) | (27,627) | ||
4.375% Notes due 2024 | Senior Notes | ||||
Financial Assets (Liabilities): | ||||
Stated interest rate (as a percent) | 4.375% | 4.375% | ||
3.90% Notes due 2027 | Senior Notes | ||||
Financial Assets (Liabilities): | ||||
Stated interest rate (as a percent) | 3.90% | 3.90% | ||
4.375% Notes due 2029 | Senior Notes | ||||
Financial Assets (Liabilities): | ||||
Stated interest rate (as a percent) | 4.375% | |||
Book Value | ||||
Financial Assets (Liabilities): | ||||
Derivative instruments — assets | $ 43,570 | 111,185 | ||
Derivative instruments — liabilities | (50,896) | (29,894) | ||
Book Value | 4.375% Notes due 2024 | ||||
Financial Assets (Liabilities): | ||||
Long-term debt | (750,000) | (750,000) | ||
Book Value | 3.90% Notes due 2027 | ||||
Financial Assets (Liabilities): | ||||
Long-term debt | (750,000) | (750,000) | ||
Book Value | 4.375% Notes due 2029 | ||||
Financial Assets (Liabilities): | ||||
Long-term debt | (500,000) | 0 | ||
Fair Value | ||||
Financial Assets (Liabilities): | ||||
Derivative instruments — assets | 43,570 | 111,185 | ||
Derivative instruments — liabilities | (50,896) | (29,894) | ||
Fair Value | 4.375% Notes due 2024 | ||||
Financial Assets (Liabilities): | ||||
Long-term debt | (793,913) | (744,578) | ||
Fair Value | 3.90% Notes due 2027 | ||||
Financial Assets (Liabilities): | ||||
Long-term debt | (769,643) | (701,273) | ||
Fair Value | 4.375% Notes due 2029 | ||||
Financial Assets (Liabilities): | ||||
Long-term debt | $ (530,535) | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Other Financial Instruments | ||
Accrued operating expenses | $ 82.8 | $ 69.1 |
Accrued payroll related general and administrative expenses | 47.4 | |
Overdrawn account accrual | 35.8 | |
Allowance for Trade Receivables | ||
Other Financial Instruments | ||
Aggregate allowance for doubtful accounts | $ 3.2 | $ 2.7 |
CAPITAL STOCK - Narrative (Deta
CAPITAL STOCK - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
May 31, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | |
Class of Stock [Line Items] | ||||||||
Common stock authorized (shares) | 200,000,000 | 200,000,000 | 200,000,000 | |||||
Preferred stock authorized (shares) | 15,000,000 | 15,000,000 | ||||||
Common stock outstanding (shares) | 101,500,000 | 101,500,000 | ||||||
Preferred stock dividend rate (as a percent) | 8.125% | 8.125% | ||||||
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 | ||||||
Preferred stock liquidation preference per share (USD per share) | $ 1,000 | $ 1,000 | ||||||
Preferred stock, liquidation preference | $ 62,500 | $ 62,500 | ||||||
Stock issued upon conversion of preferred stock (shares) | 8.0421 | 8.0421 | ||||||
Price received per share upon conversion (USD per share) | $ 471.40 | $ 471.40 | ||||||
Dividends | ||||||||
Dividends declared per common share (USD per share) | $ 0.20 | |||||||
Dividends declared from retained earnings | $ 20,300 | $ 20,330 | $ 20,308 | $ 15,241 | $ 15,271 | |||
Dividends declared per preferred share (USD per share) | $ 20.31 | |||||||
Preferred stock cash dividends | $ 1,300 | |||||||
Series A Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock authorized (shares) | 62,500 | 62,500 | ||||||
Issuance of stock for acquisition (shares) | 62,500 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Options, Restricted Stock and Unit Awards | ||||
Stock compensation cost | $ 11,924 | $ 8,693 | $ 25,171 | $ 21,111 |
Less amounts capitalized to oil and gas properties | (5,430) | (5,598) | (11,964) | (11,286) |
Stock compensation expense | 6,494 | 3,095 | 13,207 | 9,825 |
Restricted stock awards: | ||||
Options, Restricted Stock and Unit Awards | ||||
Stock compensation cost | 11,528 | 8,056 | 24,153 | 19,857 |
Performance stock awards | ||||
Options, Restricted Stock and Unit Awards | ||||
Stock compensation cost | 5,535 | 3,809 | 10,929 | 10,538 |
Service-based stock awards | ||||
Options, Restricted Stock and Unit Awards | ||||
Stock compensation cost | 5,993 | 4,247 | 13,224 | 9,319 |
Stock option awards | ||||
Options, Restricted Stock and Unit Awards | ||||
Stock compensation cost | $ 396 | $ 637 | $ 1,018 | $ 1,254 |
ASSET RETIREMENT OBLIGATIONS -
ASSET RETIREMENT OBLIGATIONS - Summary (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Asset Retirement Obligations | ||
Balance at beginning of year | $ 166,904 | |
Liabilities incurred | 12,611 | |
Liability settlements and disposals | (11,771) | |
Accretion expense | 3,714 | |
Revisions of estimated liabilities | 2,415 | |
Balance at end of year | 173,873 | |
Less current obligation | (16,492) | |
Long-term asset retirement obligation | $ 157,381 | $ 152,758 |
ASSET RETIREMENT OBLIGATIONS _2
ASSET RETIREMENT OBLIGATIONS - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 01, 2019 |
Resolute Energy Corporation | ||
Business Acquisition [Line Items] | ||
Liabilities incurred | $ 9,400 | $ 9,437 |
EARNINGS PER SHARE - Summary (D
EARNINGS PER SHARE - Summary (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income (Numerator) | ||||||
Net income | $ 109,309 | $ 26,316 | $ 140,997 | $ 186,318 | $ 135,625 | $ 327,315 |
Less: net income attributable to participating securities | (1,596) | (1,892) | (2,067) | (4,546) | ||
Less: preferred stock dividends | (1,270) | 0 | (2,539) | 0 | ||
Basic EPS - Income available to common stockholders | 106,443 | 139,105 | 131,019 | 322,769 | ||
Effects of dilutive securities - options (shares) | 0 | 1 | ||||
Diluted EPS - Income available to common stockholders and assumed conversions | $ 106,443 | $ 139,105 | $ 131,019 | $ 322,770 | ||
Shares (Denominator) | ||||||
Basic EPS - Income available to common stockholders (shares) | 99,658,000 | 93,728,000 | 97,800,000 | 93,713,000 | ||
Effects of dilutive securities - options (shares) | 7,000 | 31,000 | 9,000 | 35,000 | ||
Diluted EPS - Income available to common stockholders and assumed conversions (shares) | 99,665,000 | 93,759,000 | 97,809,000 | 93,748,000 | ||
Per-Share Amount | ||||||
Basic EPS - Income available to common stockholders (USD per share) | $ 1.07 | $ 1.48 | $ 1.34 | $ 3.44 | ||
Diluted EPS - Income available to common stockholders and assumed conversions (USD per share) | $ 1.07 | $ 1.48 | $ 1.34 | $ 3.44 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Document Period End Date | Jun. 30, 2019 | |||||
Employee Stock Option | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Excluded antidilutive securities (shares) | 387,500 | 292,100 | 391,100 | 295,600 | ||
Convertible Preferred Stock | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Excluded antidilutive securities (shares) | 502,600 | 502,600 |
INCOME TAXES - Components of th
INCOME TAXES - Components of the Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Expense (Benefit) | ||||
Current tax (benefit) | $ 0 | $ (717) | $ 0 | $ (717) |
Deferred tax expense | 34,046 | 42,783 | 42,119 | 99,732 |
Income tax expense (benefit) | $ 34,046 | $ 42,066 | $ 42,119 | $ 99,015 |
Combined federal and state effective income tax rate (as a percent) | 23.70% | 23.00% | 23.70% | 23.20% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | Jun. 30, 2019 | Mar. 01, 2019 | Dec. 31, 2018 |
Income Tax Contingency [Line Items] | |||
U.S. net tax operating loss carryforward | $ 1,160,000,000 | ||
Unrecognized tax benefits that would impact the entity's effective rate | $ 0 | ||
Provisions for interest or penalties related to uncertain tax positions | $ 0 | ||
Resolute Energy Corporation | |||
Income Tax Contingency [Line Items] | |||
Deferred tax liability | $ 62,409,000 | ||
Oil Recovery and Marginal Well Credits | |||
Income Tax Contingency [Line Items] | |||
Tax credit carryforward | $ 3,500,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019USD ($)Bcf | Dec. 31, 2018USD ($) | |
Construction, Drilling and Purchase Commitments | ||
Right-of-use asset obtained in exchange for operating leases | $ 49,100 | |
Future minimum payments due on operating leases | $ 75,033 | |
Minimum | ||
Construction, Drilling and Purchase Commitments | ||
Oil and gas delivery commitments and contracts, period | 1 month | |
Drilling Commitments | ||
Construction, Drilling and Purchase Commitments | ||
Commitments for purchases and other expenditures | $ 304,600 | |
Gathering System Construction | ||
Construction, Drilling and Purchase Commitments | ||
Commitments for purchases and other expenditures | $ 19,200 | |
Natural Gas Sales Contracts | ||
Construction, Drilling and Purchase Commitments | ||
Oil and gas delivery commitments and contracts, remaining contractual volume (bcf) | Bcf | 290.7 | |
Oil and gas delivery commitments and contracts, period | 5 years 7 months 6 days | |
Maximum financial commitment resulting from inability to meet gas delivery commitments | $ 303,300 | |
Gas Gathering and Processing Agreements | ||
Construction, Drilling and Purchase Commitments | ||
Oil and gas delivery commitments and contracts, period | 9 years 6 months | |
Maximum financial commitment resulting from inability to meet gas delivery commitments | $ 655,200 | |
Minimum Volume Agreement | ||
Construction, Drilling and Purchase Commitments | ||
Maximum financial commitment resulting from inability to meet gas delivery commitments | 153,300 | |
Commitment liability | 4,600 | |
Other Transportation and Delivery Commitments and Facilities Commitments | ||
Construction, Drilling and Purchase Commitments | ||
Maximum financial commitment resulting from inability to meet gas delivery commitments | $ 70,500 | |
Office Space | Minimum | ||
Construction, Drilling and Purchase Commitments | ||
Remaining lease term | 4 years 10 months 24 days | |
Office Space | Maximum | ||
Construction, Drilling and Purchase Commitments | ||
Remaining lease term | 7 years 2 months 12 days | |
Energy Equipment | Minimum | ||
Construction, Drilling and Purchase Commitments | ||
Remaining lease term | 1 month | |
Energy Equipment | Maximum | ||
Construction, Drilling and Purchase Commitments | ||
Remaining lease term | 11 years 3 months 18 days | |
Gathering System | ||
Construction, Drilling and Purchase Commitments | ||
Remaining lease term | 6 years 2 months 12 days | |
Exploration and Development Equipment | Maximum | ||
Construction, Drilling and Purchase Commitments | ||
Remaining lease term | 12 months | |
Compressor Equipment | ||
Construction, Drilling and Purchase Commitments | ||
Future minimum payments due on operating leases | $ 34,800 | |
Compressor Equipment | Minimum | ||
Construction, Drilling and Purchase Commitments | ||
Remaining lease term | 1 month | |
Compressor Equipment | Maximum | ||
Construction, Drilling and Purchase Commitments | ||
Remaining lease term | 35 months |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Operating lease right-of-use assets | $ 243,089 | |
Finance lease right-of-use asset | 27,042 | |
Total right-of-use assets | 270,131 | |
Liabilities: | ||
Operating lease liabilities — current | 62,119 | $ 0 |
Operating lease liabilities — non-current | 191,413 | $ 0 |
Finance lease liability — current | 6,576 | |
Finance lease liability — non-current | 21,895 | |
Total lease liabilities | $ 282,003 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Finance lease cost: | ||
Amortization of right-of-use asset | $ 1,097 | $ 2,193 |
Interest on lease liability | 457 | 943 |
Operating lease cost: | ||
Short-term lease cost | 162,334 | 317,044 |
Total lease cost | 176,688 | 345,277 |
Production expense | ||
Operating lease cost: | ||
Operating lease cost | 3,943 | 7,777 |
Gas gathering and other expense | ||
Operating lease cost: | ||
Operating lease cost | 6,522 | 12,686 |
General and administrative expense | ||
Operating lease cost: | ||
Operating lease cost | $ 2,335 | $ 4,634 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Cash Paid for Leases (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Financing cash outflows from finance lease | $ 1,555 | $ 0 |
Operating cash outflows from operating leases | 25,466 | |
Cash paid for short-term leases and variable lease payments: | ||
Investing cash outflows from operating leases | $ 309,150 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - Weighted-Average Remaining Lease Term and Discount Rate (Details) | Jun. 30, 2019 |
Weighted-average remaining lease term (in years): | |
Finance lease | 6 years 2 months 12 days |
Operating leases | 4 years 6 months |
Weighted-average discount rate: | |
Finance leases (as a percent) | 6.50% |
Operating leases (as a percent) | 4.00% |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES - Maturity Analysis of Leases (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
July 1, 2019 — June 30, 2020 | $ 72,320 |
July 1, 2020 — June 30, 2021 | 64,198 |
July 1, 2021 — June 30, 2022 | 58,280 |
July 1, 2022 — June 30, 2023 | 45,166 |
July 1, 2023 — June 30, 2024 | 21,977 |
Remaining periods | 18,814 |
Total undiscounted future cash flows | 280,755 |
Less effects of discounting | (27,223) |
Lease liabilities recognized | 253,532 |
Finance Lease | |
July 1, 2019 — June 30, 2020 | 6,802 |
July 1, 2020 — June 30, 2021 | 5,846 |
July 1, 2021 — June 30, 2022 | 5,562 |
July 1, 2022 — June 30, 2023 | 5,279 |
July 1, 2023 — June 30, 2024 | 4,995 |
Remaining periods | 5,469 |
Total undiscounted future cash flows | 33,953 |
Less effects of discounting | (5,482) |
Lease liabilities recognized | $ 28,471 |
COMMITMENTS AND CONTINGENCIES_7
COMMITMENTS AND CONTINGENCIES - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 9,849 |
2020 | 10,790 |
2021 | 11,000 |
2022 | 11,130 |
2023 | 11,433 |
Remaining periods | 20,831 |
Total future minimum lease payments | $ 75,033 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION - Summary (Details) - USD ($) $ in Thousands | Mar. 01, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Cash paid during the period for: | |||||
Interest (net of capitalized amounts of $19,381, $9,233, $20,121 and $9,389, respectively) (1) | $ 14,396 | $ 22,954 | $ 32,984 | $ 23,343 | |
Income taxes | 1,200 | 0 | 1,206 | 0 | |
Cash received for income tax refunds | 335 | 717 | 336 | 718 | |
Interest capitalized | $ 19,381 | $ 9,233 | $ 20,121 | $ 9,389 | |
Resolute Energy Corporation | |||||
Cash paid during the period for: | |||||
Interest (net of capitalized amounts of $19,381, $9,233, $20,121 and $9,389, respectively) (1) | $ 17,600 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Related Party Transaction [Line Items] | ||||
Document Period End Date | Jun. 30, 2019 | |||
Helmerich & Payne | ||||
Related Party Transaction [Line Items] | ||||
Contract drilling service costs | $ 22.1 | $ 16.4 | $ 46.6 | $ 40 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) | Mar. 01, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Mar. 08, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||||||||
Purchase price allocation period | 12 months | |||||||
Loss on early extinguishment of debt | $ (4,300,000) | $ 0 | $ 0 | $ (4,250,000) | $ 0 | |||
Goodwill | $ 727,573,000 | $ 727,573,000 | $ 727,573,000 | $ 620,232,000 | ||||
Resolute Energy Corporation | ||||||||
Business Acquisition [Line Items] | ||||||||
Proportion of voting interests acquired (as a percent) | 100.00% | |||||||
Total consideration transferred | $ 820,312,000 | |||||||
Long-term debt acquired | 870,000,000 | |||||||
Goodwill | 107,341,000 | |||||||
Acquisition-related costs | 8,400,000 | |||||||
Revenue of acquiree since acquisition date | 100,000,000 | |||||||
Direct operating expenses of acquiree since acquisition date | $ 21,900,000 | |||||||
Senior Notes | Resolute Energy Corporation | ||||||||
Business Acquisition [Line Items] | ||||||||
Long-term debt acquired | 600,000,000 | |||||||
Senior Notes | 4.375% Notes due 2029 | ||||||||
Business Acquisition [Line Items] | ||||||||
Senior notes principal | $ 500,000,000 | |||||||
Stated interest rate (as a percent) | 4.375% | 4.375% | 4.375% | |||||
Credit Facility | Resolute Energy Corporation | ||||||||
Business Acquisition [Line Items] | ||||||||
Long-term debt acquired | 270,000,000 | |||||||
Resolute Energy Corporation | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisition-related costs | $ 60,000,000 |
ACQUISITIONS - Consideration Tr
ACQUISITIONS - Consideration Transferred (Details) - Resolute Energy Corporation shares in Thousands, $ in Thousands | Mar. 01, 2019USD ($)shares |
Business Acquisition [Line Items] | |
Cash | $ 325,677 |
Total consideration transferred | 820,312 |
Common stock (5,652 shares issued) | |
Business Acquisition [Line Items] | |
Stock | $ 413,015 |
Stock issued in acquisition (shares) | shares | 5,652 |
Preferred stock (63 shares issued) | |
Business Acquisition [Line Items] | |
Stock | $ 81,620 |
Stock issued in acquisition (shares) | shares | 63 |
ACQUISITIONS - Assets Acquired
ACQUISITIONS - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 01, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 727,573 | $ 620,232 | |
Resolute Energy Corporation | |||
Business Acquisition [Line Items] | |||
Cash | $ 41,236 | ||
Accounts receivable | 50,739 | ||
Other current assets | 13,280 | ||
Proved oil and gas properties | 692,600 | ||
Unproved oil and gas properties | 1,054,200 | ||
Fixed assets | 5,355 | ||
Other assets | 142 | ||
Goodwill | 107,341 | ||
Current liabilities | (202,735) | ||
Long-term debt | (870,000) | ||
Deferred income taxes | (62,409) | ||
Asset retirement obligation | $ (9,400) | (9,437) | |
Total identifiable net assets | $ 820,312 |
ACQUISITIONS - Pro Forma Inform
ACQUISITIONS - Pro Forma Information (Details) - Resolute Energy Corporation - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Business Acquisition, Pro Forma Information [Abstract] | ||||
Revenue | $ 546,463 | $ 625,332 | $ 1,176,556 | $ 1,263,410 |
Net income | $ 109,365 | $ 148,486 | $ 121,909 | $ 335,544 |
Net income per share: | ||||
Basic (USD per share) | $ 1.07 | $ 1.48 | $ 1.18 | $ 3.33 |
Diluted (USD per share) | $ 1.07 | $ 1.47 | $ 1.18 | $ 3.33 |