Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2021 | Jul. 31, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
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 ($0.01 par value) | |
Trading Symbol | XEC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 102,813,233 | |
Entity Central Index Key | 0001168054 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 799,315 | $ 273,145 |
Accounts receivable, net of allowance: | ||
Trade | 51,421 | 49,650 |
Oil and gas sales | 410,327 | 271,141 |
Gas gathering, processing, and marketing | 12,422 | 11,694 |
Oil and gas well equipment and supplies | 28,635 | 37,150 |
Derivative instruments | 1,246 | 6,848 |
Prepaid expenses | 6,823 | 7,113 |
Other current assets | 999 | 597 |
Total current assets | 1,311,188 | 657,338 |
Oil and gas properties at cost, using the full cost method of accounting: | ||
Proved properties | 21,430,301 | 21,281,840 |
Unproved properties and properties under development, not being amortized | 1,182,073 | 1,142,183 |
Gross oil and gas properties | 22,612,374 | 22,424,023 |
Less—accumulated depreciation, depletion, amortization, and impairment | (19,176,876) | (18,987,354) |
Net oil and gas properties | 3,435,498 | 3,436,669 |
Fixed assets, net of accumulated depreciation of $434,753 and $455,815, respectively | 384,216 | 436,101 |
Derivative instruments | 2,458 | 2,342 |
Deferred income taxes | 0 | 20,472 |
Other assets | 73,827 | 69,067 |
Total assets | 5,207,187 | 4,621,989 |
Accounts payable: | ||
Trade | 54,911 | 21,902 |
Gas gathering, processing, and marketing | 24,439 | 22,388 |
Accrued liabilities: | ||
Exploration and development | 89,946 | 50,014 |
Taxes other than income | 40,896 | 29,051 |
Other | 216,646 | 201,784 |
Derivative instruments | 366,591 | 145,398 |
Revenue payable | 216,889 | 130,637 |
Operating leases | 57,665 | 59,051 |
Total current liabilities | 1,067,983 | 660,225 |
Long-term debt principal | 2,000,000 | 2,000,000 |
Less—unamortized debt issuance costs and discounts | (11,669) | (12,701) |
Long-term debt, net | 1,988,331 | 1,987,299 |
Deferred income taxes | 54,248 | 0 |
Asset retirement obligation | 119,553 | 165,595 |
Derivative instruments | 16,167 | 17,749 |
Operating leases | 111,325 | 134,705 |
Other liabilities | 56,746 | 66,181 |
Total liabilities | 3,414,353 | 3,031,754 |
Commitments and contingencies (Note 10) | ||
Redeemable preferred stock - 8.125% Series A Cumulative Perpetual Convertible Preferred Stock, $0.01 par value, 28,165 shares authorized and issued (Note 5) | 36,781 | 36,781 |
Stockholders’ equity: | ||
Common stock, $0.01 par value, 200,000,000 shares authorized, 102,820,006 and 102,866,806 shares issued, respectively | 1,028 | 1,029 |
Additional paid-in capital | 3,172,652 | 3,211,562 |
Accumulated deficit | (1,417,627) | (1,659,137) |
Total stockholders’ equity | 1,756,053 | 1,553,454 |
Total liabilities and stockholders' equity | $ 5,207,187 | $ 4,621,989 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation on fixed assets | $ 434,753 | $ 455,815 |
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) | 28,165 | 28,165 |
Redeemable preferred stock issued (shares) | 28,165 | 28,165 |
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) | 102,820,006 | 102,866,806 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues: | ||||
Revenues | $ 712,380 | $ 249,383 | $ 1,391,846 | $ 722,213 |
Costs and expenses: | ||||
Impairment of oil and gas properties | 0 | 941,198 | 0 | 1,274,849 |
Depreciation, depletion, and amortization | 110,733 | 194,954 | 223,667 | 410,040 |
Asset retirement obligation | 2,514 | 1,661 | 4,732 | 6,385 |
Impairment of goodwill | 0 | 0 | 0 | 714,447 |
Production | 77,408 | 64,337 | 152,214 | 151,573 |
Transportation, processing, and other operating | 59,285 | 53,282 | 122,892 | 108,204 |
Gas gathering and other | 9,549 | 3,526 | 20,027 | 11,824 |
Taxes other than income | 40,247 | 16,486 | 81,233 | 47,447 |
General and administrative | 24,978 | 26,226 | 50,238 | 51,735 |
Stock-based compensation | 7,878 | 6,747 | 16,427 | 13,141 |
Loss (gain) on derivative instruments, net | 211,833 | 123,885 | 373,768 | (103,055) |
Other operating expense, net | 8,050 | 130 | 7,117 | 381 |
Total costs and expenses | 552,475 | 1,432,432 | 1,052,315 | 2,686,971 |
Operating income (loss) | 159,905 | (1,183,049) | 339,531 | (1,964,758) |
Other (income) and expense: | ||||
Interest expense | 23,370 | 23,047 | 46,448 | 46,228 |
Capitalized interest | (11,386) | (12,939) | (22,951) | (26,121) |
Other, net | (459) | 3,496 | (598) | 2,625 |
Income (loss) before income tax | 148,380 | (1,196,653) | 316,632 | (1,987,490) |
Income tax expense (benefit) | 34,992 | (271,506) | 75,162 | (288,061) |
Net income (loss) | $ 113,388 | $ (925,147) | $ 241,470 | $ (1,699,429) |
Earnings (loss) per share to common stockholders: | ||||
Basic (USD per share) | $ 1.10 | $ (9.28) | $ 2.35 | $ (17.05) |
Diluted (USD per share) | $ 1.10 | $ (9.28) | $ 2.35 | $ (17.05) |
Oil sales | ||||
Revenues: | ||||
Revenues | $ 424,175 | $ 138,817 | $ 768,879 | $ 499,797 |
Gas and NGL sales | ||||
Revenues: | ||||
Revenues | 274,554 | 100,261 | 599,952 | 198,742 |
Gas gathering and other | ||||
Revenues: | ||||
Revenues | 13,530 | 11,589 | 25,745 | 25,172 |
Gas marketing | ||||
Revenues: | ||||
Revenues | $ 121 | $ (1,284) | $ (2,730) | $ (1,498) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 241,470 | $ (1,699,429) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Impairment of oil and gas properties | 0 | 1,274,849 |
Depreciation, depletion, and amortization | 223,667 | 410,040 |
Asset retirement obligation | 4,732 | 6,385 |
Impairment of goodwill | 0 | 714,447 |
Deferred income taxes | 74,720 | (287,900) |
Stock-based compensation | 16,427 | 13,141 |
Loss (gain) on derivative instruments, net | 373,768 | (103,055) |
Settlements on derivative instruments | (148,670) | 107,055 |
Amortization of debt issuance costs and discounts | 1,776 | 1,602 |
Changes in non-current assets and liabilities | (5,654) | 7,019 |
Other, net | 6,966 | 6,795 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (142,832) | 204,615 |
Other current assets | (651) | 1,495 |
Accounts payable and other current liabilities | 120,865 | (203,562) |
Net cash provided by operating activities | 766,584 | 453,497 |
Cash flows from investing activities: | ||
Oil and gas capital expenditures | (298,306) | (411,330) |
Acquisition of oil and gas properties | (308) | (7,250) |
Other capital expenditures | (5,806) | (38,052) |
Sales of oil and gas assets | 118,669 | 830 |
Sales of other assets | 606 | 1,188 |
Net cash used by investing activities | (185,145) | (454,614) |
Cash flows from financing activities: | ||
Borrowings of long-term debt | 0 | 161,000 |
Repayments of long-term debt | 0 | (161,000) |
Financing fees | (100) | (1,557) |
Finance lease payments | (2,437) | (2,808) |
Dividends paid | (51,210) | (45,209) |
Employee withholding taxes paid upon the net settlement of equity-classified stock awards | (2,191) | (189) |
Proceeds from exercise of stock options | 669 | 0 |
Net cash used by financing activities | (55,269) | (49,763) |
Net change in cash and cash equivalents | 526,170 | (50,880) |
Cash and cash equivalents at beginning of period | 273,145 | 94,722 |
Cash and cash equivalents at end of period | $ 799,315 | $ 43,842 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Balance at beginning of period (shares) at Dec. 31, 2019 | 102,145 | |||
Balance at beginning of period at Dec. 31, 2019 | $ 3,576,141 | $ 1,021 | $ 3,243,325 | $ 331,795 |
Increase (Decrease) in Stockholders' Equity | ||||
Dividends paid on stock awards subsequently forfeited | 29 | 6 | 23 | |
Dividends declared on common stock | (22,548) | (22,548) | ||
Dividends declared on redeemable preferred stock | (1,269) | (1,269) | ||
Net income (loss) | (774,282) | (774,282) | ||
Common stock reacquired and retired (shares) | (12) | |||
Common stock reacquired and retired | (165) | (165) | ||
Restricted stock forfeited and retired (shares) | (31) | |||
Stock-based compensation | 11,594 | 11,594 | ||
Balance at end of period (shares) at Mar. 31, 2020 | 102,102 | |||
Balance at end of period at Mar. 31, 2020 | 2,789,500 | $ 1,021 | 3,254,760 | (466,281) |
Balance at beginning of period (shares) at Dec. 31, 2019 | 102,145 | |||
Balance at beginning of period at Dec. 31, 2019 | 3,576,141 | $ 1,021 | 3,243,325 | 331,795 |
Increase (Decrease) in Stockholders' Equity | ||||
Net income (loss) | (1,699,429) | |||
Balance at end of period (shares) at Jun. 30, 2020 | 102,151 | |||
Balance at end of period at Jun. 30, 2020 | 1,850,847 | $ 1,022 | 3,241,244 | (1,391,419) |
Balance at beginning of period (shares) at Mar. 31, 2020 | 102,102 | |||
Balance at beginning of period at Mar. 31, 2020 | 2,789,500 | $ 1,021 | 3,254,760 | (466,281) |
Increase (Decrease) in Stockholders' Equity | ||||
Dividends paid on stock awards subsequently forfeited | 8 | 1 | 7 | |
Dividends declared on common stock | (22,559) | (22,561) | 2 | |
Dividends declared on redeemable preferred stock | (1,269) | (1,269) | ||
Net income (loss) | (925,147) | (925,147) | ||
Issuance of restricted stock awards (shares) | 66 | |||
Issuance of restricted stock awards | 0 | $ 1 | (1) | |
Common stock reacquired and retired (shares) | (2) | |||
Common stock reacquired and retired | (24) | (24) | ||
Restricted stock forfeited and retired (shares) | (15) | |||
Stock-based compensation | 10,338 | 10,338 | ||
Balance at end of period (shares) at Jun. 30, 2020 | 102,151 | |||
Balance at end of period at Jun. 30, 2020 | 1,850,847 | $ 1,022 | 3,241,244 | (1,391,419) |
Balance at beginning of period (shares) at Dec. 31, 2020 | 102,867 | |||
Balance at beginning of period at Dec. 31, 2020 | 1,553,454 | $ 1,029 | 3,211,562 | (1,659,137) |
Increase (Decrease) in Stockholders' Equity | ||||
Dividends paid on stock awards subsequently forfeited | 46 | 14 | 32 | |
Dividends declared on common stock | (27,845) | (27,845) | ||
Dividends declared on redeemable preferred stock | (572) | (572) | ||
Net income (loss) | 128,082 | 128,082 | ||
Issuance of restricted stock awards (shares) | 25 | |||
Restricted stock forfeited and retired (shares) | (73) | |||
Restricted stock forfeited and retired | 0 | $ (1) | 1 | |
Exercise of stock options (shares) | 9 | |||
Exercise of stock options | 385 | 385 | ||
Stock-based compensation | 10,215 | 10,215 | ||
Balance at end of period (shares) at Mar. 31, 2021 | 102,828 | |||
Balance at end of period at Mar. 31, 2021 | 1,663,765 | $ 1,028 | 3,193,760 | (1,531,023) |
Balance at beginning of period (shares) at Dec. 31, 2020 | 102,867 | |||
Balance at beginning of period at Dec. 31, 2020 | 1,553,454 | $ 1,029 | 3,211,562 | (1,659,137) |
Increase (Decrease) in Stockholders' Equity | ||||
Net income (loss) | 241,470 | |||
Balance at end of period (shares) at Jun. 30, 2021 | 102,820 | |||
Balance at end of period at Jun. 30, 2021 | 1,756,053 | $ 1,028 | 3,172,652 | (1,417,627) |
Balance at beginning of period (shares) at Mar. 31, 2021 | 102,828 | |||
Balance at beginning of period at Mar. 31, 2021 | 1,663,765 | $ 1,028 | 3,193,760 | (1,531,023) |
Increase (Decrease) in Stockholders' Equity | ||||
Dividends paid on stock awards subsequently forfeited | 15 | 7 | 8 | |
Dividends declared on common stock | (27,855) | (27,855) | ||
Dividends declared on redeemable preferred stock | (572) | (572) | ||
Net income (loss) | 113,388 | 113,388 | ||
Issuance of restricted stock awards (shares) | 27 | |||
Common stock reacquired and retired (shares) | (32) | |||
Common stock reacquired and retired | (2,191) | (2,191) | ||
Restricted stock forfeited and retired (shares) | (10) | |||
Exercise of stock options (shares) | 7 | |||
Exercise of stock options | 284 | 284 | ||
Stock-based compensation | 9,219 | 9,219 | ||
Balance at end of period (shares) at Jun. 30, 2021 | 102,820 | |||
Balance at end of period at Jun. 30, 2021 | $ 1,756,053 | $ 1,028 | $ 3,172,652 | $ (1,417,627) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | |
Common Stock | ||||
Dividends declared per common share (USD per share) | $ 0.27 | $ 0.27 | $ 0.22 | $ 0.22 |
Preferred Stock | ||||
Dividends declared per preferred share (USD per share) | $ 20.3125 | $ 20.3125 | $ 20.3125 | $ 20.3125 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Cimarex Energy Co. (“Cimarex,” “company,” “we,” or “us”), a Delaware corporation, is an independent oil and gas exploration and production company. Our operations are located entirely within the United States, mainly in Texas, New Mexico, and Oklahoma. 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, 2020. 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 2021 financial statement presentation. 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, and the estimation of future abandonment obligations used in recording asset retirement obligations. Estimates and judgments also are required in determining allowances for credit losses, impairments of unproved properties and other assets, valuation of deferred tax assets, fair value measurements, lease liabilities, and contingencies. We analyze our estimates and base them on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. 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 based on estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, 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 quarterly ceiling test is primarily impacted by commodity prices, changes in estimated reserve quantities, overall exploration and development costs, and deferred taxes. If pricing conditions decline, or if there is a negative impact on one or more of the other components of the calculation, we may incur a full cost ceiling test impairment. The calculated ceiling limitation is not intended to be indicative of the fair market value of our proved reserves or future results. 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. We did not incur a ceiling test impairment for the six months ended June 30, 2021. At June 30, 2021, a decline in the value of the ceiling limitation of approximately 34% or more would have resulted in an impairment. For the six months ended June 30, 2020, we incurred ceiling test impairments totaling $1.275 billion resulting primarily from the impact of decreases in the 12-month average trailing prices for oil, gas, and NGLs as well as significant basis differentials utilized in determining the estimated future net cash flows from proved reserves. Goodwill Goodwill represents the excess of the purchase price of business combinations over the fair value of the net assets acquired and is tested for impairment at least annually. During the three months ended March 31, 2020, the company’s market capitalization declined significantly, caused by macroeconomic and geopolitical conditions including the collapse of oil prices driven by surplus supply and decreased demand caused by the COVID-19 pandemic. In addition, the uncertainty related to oil demand significantly impacted our investment and operating decisions at the time. As a result of these events and circumstances, we performed an interim quantitative impairment test for goodwill as of March 31, 2020, which utilized quoted market prices for our common stock as a basis for determining the fair value of our reporting unit. Based upon this test, we concluded that goodwill was fully impaired at March 31, 2020. The following table reflects components of the change in the carrying amount of goodwill for the six months ended June 30, 2020 (subsequent to June 30, 2020 through June 30, 2021 we have not recognized any additional goodwill balance): (in thousands) Six Months Ended Goodwill balance at January 1, 2020 $ 716,865 Business combination purchase price adjustments (2,418) Impairment (714,447) Goodwill balance at June 30, 2020 $ — 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, 2021, 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 is sold under various contracts. Under these contracts the gas and its components, including residue gas and NGLs, may be sold to a single purchaser or separate purchasers. Regardless of the contract, we are compensated for the value of the residue gas and NGLs at current market prices for each product. Depending on the specific contract terms, certain gathering, treating, transportation, processing, and other charges may be deducted against the prices we receive for the products. Our oil typically is sold at specific delivery points under contract terms that are common in our industry. Gas Gathering When we transport, process, and/or market 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 other 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 or for 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. |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2021 | |
Long-term Debt, Unclassified [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt at June 30, 2021 and December 31, 2020 consisted of the following: June 30, 2021 December 31, 2020 (in thousands) Principal Unamortized Debt Issuance Costs and Discounts (1) Long-term Principal Unamortized Debt Issuance Costs and Discounts (1) Long-term 4.375% Notes due 2024 $ 750,000 $ (2,254) $ 747,746 $ 750,000 $ (2,672) $ 747,328 3.90% Notes due 2027 750,000 (5,156) 744,844 750,000 (5,541) 744,459 4.375% Notes due 2029 500,000 (4,259) 495,741 500,000 (4,488) 495,512 $ 2,000,000 $ (11,669) $ 1,988,331 $ 2,000,000 $ (12,701) $ 1,987,299 ________________________________________ (1) The 4.375% Notes due 2024 were issued at par, therefore, the amounts shown in the table are for unamortized debt issuance costs only. At June 30, 2021, the unamortized debt issuance costs and discount related to the 3.90% Notes due 2027 were $4.0 million and $1.2 million, respectively. At June 30, 2021, the unamortized debt issuance costs and discount related to the 4.375% Notes due 2029 were $3.7 million and $0.6 million, respectively. At December 31, 2020, the unamortized debt issuance costs and discount related to the 3.90% Notes due 2027 were $4.3 million and $1.3 million, respectively. At December 31, 2020, the unamortized debt issuance costs and discount related to the 4.375% Notes due 2029 were $3.9 million and $0.6 million, respectively. Bank Debt On June 3, 2020, we entered into the First Amendment to Amended and Restated Credit Agreement (the “First Amendment”) dated as of February 5, 2019 for our senior unsecured revolving credit facility (“Credit Facility”). The Credit Facility has aggregate commitments of $1.25 billion with an option for us to increase the aggregate commitments to $1.5 billion, and matures on February 5, 2024. There is no borrowing base subject to the discretion of the lenders based on the value of our proved reserves under the Credit Facility. The First Amendment, among other things: (i) allows up to $3.5 billion of non-cash impairment charge add-backs to Shareholders’ Equity for covenant calculation purposes, (ii) institutes traditional anti-cash hoarding provisions (if borrowings are outstanding under the Credit Facility) at a consolidated cash threshold of $175.0 million, (iii) reduces the priority lien debt basket from 15% of Consolidated Net Tangible Assets (as defined in the credit agreement) to a $50.0 million cap, and (iv) adds an acknowledgement and consent to European Union bail-in legislation. As of June 30, 2021, 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. 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-capitalization ratio of no greater than 65%. As of June 30, 2021, we were in compliance with all of the financial covenants. At June 30, 2021 and December 31, 2020, we had $3.6 million and $4.3 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. Senior Notes In March 2019, we issued $500.0 million aggregate principal amount of 4.375% senior unsecured notes at 99.862% of par to yield 4.392% per annum. These notes are due March 15, 2029 and interest is payable semiannually on March 15 and September 15. The effective interest rate on these notes, including the amortization of debt issuance costs and discount, is 4.50%. In April 2017, we issued $750.0 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 $750.0 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, 2021. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 6 Months Ended |
Jun. 30, 2021 | |
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, 2021, we have entered into oil and gas collars, oil basis swaps, and oil “roll differential” swaps. 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. Our roll differential swaps are settled based on the difference between the monthly roll differential and a fixed price per Bbl. The monthly roll differential is calculated as the sum of 2/3 of the difference in the WTI NYMEX closing settlement price for the first nearby month futures contract minus the second nearby month futures contract and 1/3 of the difference in the WTI NYMEX closing settlement price for the first nearby month futures contract minus the third nearby month futures contract. By using a roll differential swap, we have fixed the differential in pricing between the WTI NYMEX calendar month average price and the physical crude oil delivery month price. The following tables summarize our outstanding derivative contracts as of June 30, 2021: Oil Collars First Second Third Fourth Total 2021: WTI (1) Volume (Bbls) — — 3,680,000 3,680,000 7,360,000 Weighted Avg Price - Floor $ — $ — $ 34.65 $ 34.65 $ 34.65 Weighted Avg Price - Ceiling $ — $ — $ 44.37 $ 44.37 $ 44.37 2022: WTI (1) Volume (Bbls) 3,060,000 2,457,000 1,656,000 736,000 7,909,000 Weighted Avg Price - Floor $ 41.94 $ 43.74 $ 47.56 $ 57.00 $ 45.08 Weighted Avg Price - Ceiling $ 54.06 $ 56.34 $ 59.52 $ 72.43 $ 57.62 ________________________________________ (1) The index price for these collars is West Texas Intermediate (“WTI”) as quoted on the New York Mercantile Exchange (“NYMEX”). Gas Collars First Second Third Fourth Total 2021: PEPL (1) Volume (MMBtu) — — 8,280,000 8,280,000 16,560,000 Weighted Avg Price - Floor $ — $ — $ 2.00 $ 2.00 $ 2.00 Weighted Avg Price - Ceiling $ — $ — $ 2.42 $ 2.42 $ 2.42 Perm EP (2) Volume (MMBtu) — — 6,440,000 6,440,000 12,880,000 Weighted Avg Price - Floor $ — $ — $ 1.86 $ 1.86 $ 1.86 Weighted Avg Price - Ceiling $ — $ — $ 2.22 $ 2.22 $ 2.22 Waha (3) Volume (MMBtu) — — 9,200,000 9,200,000 18,400,000 Weighted Avg Price - Floor $ — $ — $ 1.88 $ 1.88 $ 1.88 Weighted Avg Price - Ceiling $ — $ — $ 2.23 $ 2.23 $ 2.23 2022: PEPL (1) Volume (MMBtu) 7,200,000 3,640,000 1,840,000 1,840,000 14,520,000 Weighted Avg Price - Floor $ 2.25 $ 2.50 $ 2.60 $ 2.60 $ 2.40 Weighted Avg Price - Ceiling $ 2.73 $ 3.07 $ 3.27 $ 3.27 $ 2.95 Perm EP (2) Volume (MMBtu) 5,400,000 3,640,000 1,840,000 1,840,000 12,720,000 Weighted Avg Price - Floor $ 2.25 $ 2.45 $ 2.50 $ 2.50 $ 2.38 Weighted Avg Price - Ceiling $ 2.74 $ 3.01 $ 3.15 $ 3.15 $ 2.93 Waha (3) Volume (MMBtu) 8,100,000 4,550,000 2,760,000 1,840,000 17,250,000 Weighted Avg Price - Floor $ 2.14 $ 2.44 $ 2.47 $ 2.50 $ 2.31 Weighted Avg Price - Ceiling $ 2.59 $ 2.94 $ 3.00 $ 3.12 $ 2.80 ________________________________________ (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 Second Third Fourth Total 2021: WTI Midland (1) Volume (Bbls) — — 3,220,000 3,220,000 6,440,000 Weighted Avg Differential (2) $ — $ — $ (0.08) $ (0.08) $ (0.08) 2022: WTI Midland (1) Volume (Bbls) 2,700,000 2,093,000 1,380,000 736,000 6,909,000 Weighted Avg Differential (2) $ 0.20 $ 0.22 $ 0.20 $ 0.05 $ 0.19 ________________________________________ (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 Roll Differential Swaps First Second Third Fourth Total 2021: WTI (1) Volume (Bbls) — — 1,656,000 1,656,000 3,312,000 Weighted Avg Price $ — $ — $ (0.10) $ (0.10) $ (0.10) 2022: WTI (1) Volume (Bbls) 1,620,000 1,001,000 644,000 — 3,265,000 Weighted Avg Price $ (0.10) $ (0.01) $ 0.10 $ — $ (0.03) ________________________________________ (1) The index price used to determine the settlement “roll” is WTI as quoted on the NYMEX. 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 “Loss (gain) on derivative instruments, net” for the periods indicated. Three Months Ended Six Months Ended (in thousands) 2021 2020 2021 2020 Decrease (increase) in fair value of derivative instruments, net: Gas contracts $ 40,026 $ 19,826 $ 39,579 $ 32,319 Oil contracts 85,671 168,000 185,519 (28,319) 125,697 187,826 225,098 4,000 Cash payments (receipts) on derivative instruments, net: Gas contracts 14,403 (5,870) 29,668 (17,589) Oil contracts 71,733 (58,071) 119,002 (89,466) 86,136 (63,941) 148,670 (107,055) Loss (gain) on derivative instruments, net $ 211,833 $ 123,885 $ 373,768 $ (103,055) 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, 2021 and December 31, 2020, as well as the potential effect of netting arrangements on our recognized derivative asset and liability amounts. June 30, 2021 (in thousands) Balance Sheet Location Asset Liability Oil contracts Current assets — Derivative instruments $ 1,246 $ — Oil contracts Non-current assets — Derivative instruments 1,284 — Gas contracts Non-current assets — Derivative instruments 1,174 — Oil contracts Current liabilities — Derivative instruments — 285,524 Gas contracts Current liabilities — Derivative instruments — 81,067 Oil contracts Non-current liabilities — Derivative instruments — 16,132 Gas contracts Non-current liabilities — Derivative instruments — 35 Total gross amounts presented in the balance sheet 3,704 382,758 Less: gross amounts not offset in the balance sheet (3,704) (3,704) Net amount $ — $ 379,054 December 31, 2020 (in thousands) Balance Sheet Location Asset Liability Oil contracts Current assets — Derivative instruments $ 5,425 $ — Gas contracts Current assets — Derivative instruments 1,423 — Gas contracts Non-current assets — Derivative instruments 2,342 — Oil contracts Current liabilities — Derivative instruments — 106,507 Gas contracts Current liabilities — Derivative instruments — 38,891 Oil contracts Non-current liabilities — Derivative instruments — 12,526 Gas contracts Non-current liabilities — Derivative instruments — 5,223 Total gross amounts presented in the balance sheet 9,190 163,147 Less: gross amounts not offset in the balance sheet (8,863) (8,863) Net amount $ 327 $ 154,284 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, 2021 | |
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. Authoritative accounting guidance 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 inputs are other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable. The following table provides fair value measurement information for certain assets and liabilities as of June 30, 2021 and December 31, 2020: June 30, 2021 December 31, 2020 (in thousands) Book Fair Book Fair Financial Assets (Liabilities): 4.375% Notes due 2024 $ 750,000 $ (816,375) $ (750,000) $ (818,025) 3.90% Notes due 2027 $ 750,000 $ (826,800) $ (750,000) $ (826,575) 4.375% Notes due 2029 $ 500,000 $ (567,900) $ (500,000) $ (567,250) Derivative instruments — assets $ 3,704 $ 3,704 $ 9,190 $ 9,190 Derivative instruments — liabilities $ (382,758) $ (382,758) $ (163,147) $ (163,147) 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, 2021 are accrued operating expenses (e.g., production, transportation, and midstream expenses) of approximately $73.4 million. Included in “Accrued liabilities — Other” at December 31, 2020 are: (i) accrued operating expenses (e.g., production, transportation, and midstream expenses) of approximately $67.4 million and (ii) accrued general and administrative costs of approximately $46.8 million, which consisted primarily of $34.1 million in regular payroll-related costs and $11.3 million in voluntary early retirement incentive program and involuntary reduction in workforce severance accruals (the aggregate balance for these severance accruals decreased to $2.5 million at June 30, 2021 due to payments made during the six months ended June 30, 2021). 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. For properties we operate, we have the right to realize amounts due to us from non-operators by netting the non-operators’ share of production revenues from those properties. |
CAPITAL STOCK
CAPITAL STOCK | 6 Months Ended |
Jun. 30, 2021 | |
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, 2021, there were 102.8 million shares of common stock outstanding and 28.2 thousand shares of 8.125% Series A Cumulative Perpetual Convertible Preferred Stock outstanding (the “Preferred Stock”). Holders of the Preferred Stock are entitled to receive, when, as, and if declared by the Board, cumulative cash dividends at an annual rate of 8.125% of each share’s liquidation preference of $1,000. In the event of any liquidation, winding up, or dissolution of Cimarex, each holder will be entitled to receive in respect of its shares, up to each share’s liquidation preference, with the total liquidation preference being $28.2 million in the aggregate at June 30, 2021, after satisfaction of liabilities and any senior stock (of which there is currently none) and before any payment or distribution to holders of junior stock (including common stock). Each holder has the right at any time, at its option, to convert any or all of such holder’s shares of Preferred Stock into a certain number of shares of Cimarex common stock based on a conversion rate that adjusts upon the occurrence of certain events, including the payment of cash dividends to common shareholders, and $471.40 in cash per share of Preferred Stock. The June 30, 2021 conversion rate was 8.45897 shares of common stock for each share of Preferred Stock. As a result of the cash component included in the redemption feature of the Preferred Stock conversion option, which conversion is not solely within our control, the instruments are classified as “Redeemable preferred stock” in temporary equity on the Condensed Consolidated Balance Sheets. Dividends Common Stock In May 2021, our Board of Directors declared a cash dividend of $0.27 per share of common stock. The dividend is payable on or before September 1, 2021 to stockholders of record on August 13, 2021. 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 $27.9 million dividend declared during the second quarter 2021 was recorded as a reduction of additional paid-in capital and is included as a payable in “Accrued liabilities — Other” on the Condensed Consolidated Balance Sheet at June 30, 2021. Nonforfeitable dividends paid on unvested stock awards that subsequently forfeit are reclassified out of retained earnings or additional paid-in capital, as applicable, to stock-based compensation expense in the period in which the stock award 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 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [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) 2021 2020 2021 2020 Restricted stock awards: Performance stock awards $ 3,441 $ 4,059 $ 6,723 $ 8,119 Service-based stock awards 6,543 6,585 14,842 13,962 9,984 10,644 21,565 22,081 Stock option awards 426 416 900 914 Total stock-based compensation cost 10,410 11,060 22,465 22,995 Less amounts capitalized to oil and gas properties (2,532) (4,313) (6,038) (9,854) Stock-based compensation expense $ 7,878 $ 6,747 $ 16,427 $ 13,141 |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 6 Months Ended |
Jun. 30, 2021 | |
Asset Retirement Obligation [Abstract] | |
ASSET RETIREMENT OBLIGATIONS | 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, 2021: (in thousands) Six Months Ended Asset retirement obligation at January 1, 2021 $ 177,867 Liabilities incurred 2,967 Liability settlements and disposals (77,531) Accretion expense 3,730 Revisions of estimated liabilities 25,149 Asset retirement obligation at June 30, 2021 132,182 Less current obligation (12,629) Long-term asset retirement obligation $ 119,553 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE The calculations of basic and diluted net earnings (loss) per common share under the two-class method are presented below for the periods indicated. Earnings (loss) per share are based on whole numbers rather than the rounded numbers presented. Three Months Ended June 30, 2021 2020 (in thousands, except per share information) Income (Numerator) Shares (Denominator) Per-Share Amount Income (Numerator) Shares (Denominator) Per-Share Amount Net income (loss) $ 113,388 $ (925,147) Less: dividends and net income attributable to participating securities (1) (2,399) (569) Less: redeemable preferred stock dividends (572) (1,269) Basic earnings (loss) per share Income (loss) available to common stockholders 110,417 100,194 $ 1.10 (926,985) 99,880 $ (9.28) Effects of dilutive securities Dilutive securities (2) 1 91 — — Diluted earnings (loss) per share Income (loss) available to common stockholders and assumed conversions $ 110,418 100,285 $ 1.10 $ (926,985) 99,880 $ (9.28) Six Months Ended June 30, 2021 2020 (in thousands, except per share information) Income (Numerator) Shares (Denominator) Per-Share Amount Income (Numerator) Shares (Denominator) Per-Share Amount Net income (loss) $ 241,470 $ (1,699,429) Less: dividends and net income attributable to participating securities (1) (5,172) (1,119) Less: redeemable preferred stock dividends (1,144) (2,538) Basic earnings (loss) per share Income (loss) available to common stockholders 235,154 100,160 $ 2.35 (1,703,086) 99,861 $ (17.05) Effects of dilutive securities Dilutive securities (2) 2 68 — — Diluted earnings (loss) per share Income (loss) available to common stockholders and assumed conversions $ 235,156 100,228 $ 2.35 $ (1,703,086) 99,861 $ (17.05) ________________________________________ (1) Participating securities do not have a contractual obligation to share in the losses of the entity, therefore, net losses are not attributable to participating securities. (2) Inclusion of certain potential common shares would have an anti-dilutive effect, therefore, these shares were excluded from the calculations of diluted earnings (loss) per share. Excluded from the calculation for the three months ended June 30, 2021 were 427.4 thousand potential common shares from the assumed exercise of employee stock options and 238.2 thousand potential common shares from the assumed conversion of the Preferred Stock. Excluded from the calculation for the three months ended June 30, 2020 were 456.6 thousand potential common shares from the assumed exercise of employee stock options, 515.8 thousand potential common shares from the assumed conversion of the Preferred Stock, and 8.8 thousand potential common shares from the assumed vesting of incremental shares of unvested restricted stock units. Excluded from the calculation for the six months ended June 30, 2021 were 450.7 thousand potential common shares from the assumed exercise of employee stock options and 238.2 thousand potential common shares from the assumed conversion of the Preferred Stock. Excluded from the calculation for the six months ended June 30, 2020 were 456.6 thousand potential common shares from the assumed exercise of employee stock options, 515.8 thousand potential common shares from the assumed conversion of the Preferred Stock, and 8.8 thousand potential common shares from the assumed vesting of incremental shares of unvested restricted stock units. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2021 | |
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) 2021 2020 2021 2020 Current tax expense (benefit) $ 442 $ 37 $ 442 $ (161) Deferred tax expense (benefit) 34,550 (271,543) 74,720 (287,900) $ 34,992 $ (271,506) $ 75,162 $ (288,061) Combined federal and state effective income tax rate 23.6% 22.7% 23.7% 14.5% 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, non-deductible expenses, and changes in valuation allowances. The combined federal and state effective income tax rate for the six months ended June 30, 2020 was impacted by the non-deductible impairment of goodwill recorded during the first quarter 2020. At December 31, 2020, we had a U.S. net tax operating loss carryforward of approximately $1.997 billion, $1.773 billion of which is subject to expiration in tax years 2032 through 2037 and $224.4 million of which is not subject to expiration. We believe that the carryforward, net of valuation allowance, will be utilized before it expires. We also had enhanced oil recovery and marginal well credits of $4.2 million at December 31, 2020. The total valuation allowance on state net operating losses at December 31, 2020 was $120.7 million since it is not more likely than not that these additional state net operating losses will be utilized before they expire. When assessing the need for a valuation allowance against a deferred tax asset, both positive and negative evidence is considered when determining the ability to utilize our deferred tax assets. Based on our estimate of the timing of future reversals of existing taxable temporary differences, our estimate of future taxable income exclusive of reversing temporary differences and carryforwards, the length of time before the deferred tax assets associated with the net operating loss carryovers begin to expire, and tax planning strategies that could be implemented to accelerate taxable amounts to utilize expiring carryovers, we believe it is more likely than not that the benefit from the deferred tax asset recorded in the financial statements will be realized. We will continue to assess all available positive and negative evidence to estimate whether sufficient future taxable income will be generated in order to utilize the deferred tax assets. Additional valuation allowances may be required in future periods if additional losses are incurred or other circumstances change. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES At June 30, 2021, we had estimated commitments of approximately: (i) $224.8 million to finish drilling, completing, or performing other work on wells and various other infrastructure projects in progress and (ii) $4.8 million to finish midstream construction in progress. At June 30, 2021, we had firm sales contracts to deliver approximately 456.5 Bcf of gas over the next 10.0 years. If we do not deliver this gas, our estimated financial commitment, calculated using the July 2021 index prices, would be approximately $1.433 billion. The value of this commitment will fluctuate due to price volatility and actual volumes delivered. In connection with gas gathering and processing agreements, we have volume commitments over the next 15.0 years. If we do not deliver the committed gas or NGLs, as applicable, the estimated maximum amount that would be payable under these commitments, calculated as of June 30, 2021, would be approximately $728.6 million. We have minimum volume delivery commitments associated with agreements to reimburse connection costs to various pipelines. If we do not deliver this gas or oil, as applicable, the estimated maximum amount that would be payable under these commitments, calculated as of June 30, 2021, would be approximately $104.0 million. Of this total, we have accrued a liability of $4.1 million representing the estimated amount we will have to pay due to insufficient forecasted volumes at particular connection points. At June 30, 2021, we have various firm transportation agreements for gas pipeline capacity with end dates ranging from 2021 - 2025 under which we will have to pay an estimated $16.1 million over the remaining terms of the agreements. We have minimum volume water delivery commitments associated with a water services agreement that ends in 2030. If the water volumes are not delivered by us or third parties, the estimated maximum amount that would be payable by us under this commitment, calculated as of June 30, 2021, would be approximately $60.8 million. Of this total, we have accrued a liability of $0.7 million representing the estimated amount we will have to pay due to insufficient forecasted volumes at particular connection points. In May 2021, we entered into a lease for the use of an electric hydraulic fracturing fleet and the personnel and other equipment required to use the fleet for a period of four years. The lessor is constructing the fleet and the lease will commence on the earlier of the commencement of field activity or June 30, 2022. Upon commencement of the lease, we expect to record a lease liability and right-of-use asset of between $150.0 million and $160.0 million. All of the noted commitments were routine and made in the ordinary course of our business. Litigation In the ordinary course of business, we are involved with various litigation matters. When a loss contingency exists, we assess the likelihood that a future event or events will confirm the loss or impairment of an asset or the incurrence of a liability. If the likelihood is probable, we accrue a loss if reasonably estimable. 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. In June and July 2021, four putative stockholders of Cimarex filed separate lawsuits against Cimarex and its board of directors related to the proposed merger (the “Merger”) of Cabot Oil & Gas Corporation and Cimarex. See Note 13 to the Condensed Consolidated Financial Statements for additional information regarding the merger. Three of the lawsuits were filed in the United States District Court for the Southern District of New York and are captioned Wang v. Cimarex, et al. , Case No. 1:21-cv-05672, Graff v. Cimarex, et al. , Case No. 1:21-cv-05804, and Elliot v. Cimarex, et al. , Case No. 1:21-cv-06315. The fourth lawsuit was filed in the United States District Court for the District of Colorado and is captioned Woodyard v. Cimarex , et al. , Case No. 1:21-cv-01850. Each of the actions is asserted only on behalf of the named plaintiff. All four actions allege violations of Section 14(a) and 20(a) of the Securities Exchange Act of 1934 (the Exchange Act) and Rule 14a-9 promulgated thereunder based on various alleged omissions of material information from the registration statement on Form S-4 filed in connection with the Merger. One of the actions (Elliot) also asserts claims that the members of the Cimarex board of directors breached fiduciary duties in connection with the Merger, and that Cimarex aided and abetted those alleged breaches. Each action names as defendants Cimarex and each of its directors, and seeks, among other things, to enjoin the Merger (or, in the alternative, rescission or an award for rescissory damages in the event the Merger is completed), an award of costs and attorneys’ and experts’ fees, and such other and further relief as the court may deem just and proper. We believe that the actions are without merit. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 6 Months Ended |
Jun. 30, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Three Months Ended Six Months Ended (in thousands) 2021 2020 2021 2020 Cash paid during the period for: Interest (net of capitalized amounts of $16,001, $18,145, $22,014 and $25,473, respectively) $ 16,553 $ 14,050 $ 22,538 $ 19,609 Income taxes $ 541 $ — $ 571 $ — Cash received for income tax refunds $ 103 $ 280 $ 369 $ 484 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONSHelmerich & Payne, Inc. (“H&P”) provides contract drilling services to Cimarex. Cimarex incurred drilling costs of approximately $2.3 million and $5.2 million related to these services during the three and six months ended June 30, 2021 and $7.8 million and $23.4 million during the three and six months ended June 30, 2020. Hans Helmerich, a director of Cimarex, is Chairman of the Board of Directors of H&P. |
MERGER AND DIVESTITURES
MERGER AND DIVESTITURES | 6 Months Ended |
Jun. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
MERGER AND DIVESTITURES | MERGER AND DIVESTITURES Merger On May 23, 2021, Cimarex entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Cabot Oil & Gas Corporation (“Cabot”) and Double C Merger Sub, Inc., a wholly-owned subsidiary of Cabot (“Merger Sub”). The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement: (i) Merger Sub will be merged with and into Cimarex (the “Merger”), with Cimarex surviving and continuing as a wholly-owned subsidiary of Cabot in the Merger, and (ii) at the effective time of the Merger, each outstanding share of common stock of Cimarex (other than certain Excluded Shares, Converted Shares, or shares of Cimarex common stock subject to a Cimarex Restricted Share Award (each as defined in the Merger Agreement)) will be converted into the right to receive 4.0146 shares of common stock of Cabot. Following the closing of the Merger, Cimarex’s existing stockholders and Cabot’s existing stockholders will own approximately 50.5% and 49.5%, respectively, of the issued and outstanding shares of the combined company. The transaction is expected to close in the fourth quarter of 2021, subject to the approval of Cimarex and Cabot stockholders and the satisfaction of other customary closing conditions. Other operating expense, net during the six months ended June 30, 2021 included $8.1 million in expenses related to the Cabot merger. These expenses were primarily for advisory and legal services. Divestitures |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATIONCimarex Energy Co. (“Cimarex,” “company,” “we,” or “us”), a Delaware corporation, is an independent oil and gas exploration and production company. Our operations are located entirely within the United States, mainly in Texas, New Mexico, and Oklahoma. 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, 2020. 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 2021 financial statement presentation. |
Use of Estimates | Use of EstimatesAreas 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, and the estimation of future abandonment obligations used in recording asset retirement obligations. Estimates and judgments also are required in determining allowances for credit losses, impairments of unproved properties and other assets, valuation of deferred tax assets, fair value measurements, lease liabilities, and contingencies. We analyze our estimates and base them on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. |
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 based on estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, 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. |
Goodwill | GoodwillGoodwill represents the excess of the purchase price of business combinations over the fair value of the net assets acquired and is tested for impairment at least annually. During the three months ended March 31, 2020, the company’s market capitalization declined significantly, caused by macroeconomic and geopolitical conditions including the collapse of oil prices driven by surplus supply and decreased demand caused by the COVID-19 pandemic. In addition, the uncertainty related to oil demand significantly impacted our investment and operating decisions at the time. As a result of these events and circumstances, we performed an interim quantitative impairment test for goodwill as of March 31, 2020, which utilized quoted market prices for our common stock as a basis for determining the fair value of our reporting unit. |
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, 2021, 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 is sold under various contracts. Under these contracts the gas and its components, including residue gas and NGLs, may be sold to a single purchaser or separate purchasers. Regardless of the contract, we are compensated for the value of the residue gas and NGLs at current market prices for each product. Depending on the specific contract terms, certain gathering, treating, transportation, processing, and other charges may be deducted against the prices we receive for the products. Our oil typically is sold at specific delivery points under contract terms that are common in our industry. Gas Gathering When we transport, process, and/or market 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 other 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 or for 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. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The following table reflects components of the change in the carrying amount of goodwill for the six months ended June 30, 2020 (subsequent to June 30, 2020 through June 30, 2021 we have not recognized any additional goodwill balance): (in thousands) Six Months Ended Goodwill balance at January 1, 2020 $ 716,865 Business combination purchase price adjustments (2,418) Impairment (714,447) Goodwill balance at June 30, 2020 $ — |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of Long-Term Debt | Long-term debt at June 30, 2021 and December 31, 2020 consisted of the following: June 30, 2021 December 31, 2020 (in thousands) Principal Unamortized Debt Issuance Costs and Discounts (1) Long-term Principal Unamortized Debt Issuance Costs and Discounts (1) Long-term 4.375% Notes due 2024 $ 750,000 $ (2,254) $ 747,746 $ 750,000 $ (2,672) $ 747,328 3.90% Notes due 2027 750,000 (5,156) 744,844 750,000 (5,541) 744,459 4.375% Notes due 2029 500,000 (4,259) 495,741 500,000 (4,488) 495,512 $ 2,000,000 $ (11,669) $ 1,988,331 $ 2,000,000 $ (12,701) $ 1,987,299 ________________________________________ |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedges, Assets [Abstract] | |
Schedule of Outstanding Derivative Contracts | The following tables summarize our outstanding derivative contracts as of June 30, 2021: Oil Collars First Second Third Fourth Total 2021: WTI (1) Volume (Bbls) — — 3,680,000 3,680,000 7,360,000 Weighted Avg Price - Floor $ — $ — $ 34.65 $ 34.65 $ 34.65 Weighted Avg Price - Ceiling $ — $ — $ 44.37 $ 44.37 $ 44.37 2022: WTI (1) Volume (Bbls) 3,060,000 2,457,000 1,656,000 736,000 7,909,000 Weighted Avg Price - Floor $ 41.94 $ 43.74 $ 47.56 $ 57.00 $ 45.08 Weighted Avg Price - Ceiling $ 54.06 $ 56.34 $ 59.52 $ 72.43 $ 57.62 ________________________________________ (1) The index price for these collars is West Texas Intermediate (“WTI”) as quoted on the New York Mercantile Exchange (“NYMEX”). Gas Collars First Second Third Fourth Total 2021: PEPL (1) Volume (MMBtu) — — 8,280,000 8,280,000 16,560,000 Weighted Avg Price - Floor $ — $ — $ 2.00 $ 2.00 $ 2.00 Weighted Avg Price - Ceiling $ — $ — $ 2.42 $ 2.42 $ 2.42 Perm EP (2) Volume (MMBtu) — — 6,440,000 6,440,000 12,880,000 Weighted Avg Price - Floor $ — $ — $ 1.86 $ 1.86 $ 1.86 Weighted Avg Price - Ceiling $ — $ — $ 2.22 $ 2.22 $ 2.22 Waha (3) Volume (MMBtu) — — 9,200,000 9,200,000 18,400,000 Weighted Avg Price - Floor $ — $ — $ 1.88 $ 1.88 $ 1.88 Weighted Avg Price - Ceiling $ — $ — $ 2.23 $ 2.23 $ 2.23 2022: PEPL (1) Volume (MMBtu) 7,200,000 3,640,000 1,840,000 1,840,000 14,520,000 Weighted Avg Price - Floor $ 2.25 $ 2.50 $ 2.60 $ 2.60 $ 2.40 Weighted Avg Price - Ceiling $ 2.73 $ 3.07 $ 3.27 $ 3.27 $ 2.95 Perm EP (2) Volume (MMBtu) 5,400,000 3,640,000 1,840,000 1,840,000 12,720,000 Weighted Avg Price - Floor $ 2.25 $ 2.45 $ 2.50 $ 2.50 $ 2.38 Weighted Avg Price - Ceiling $ 2.74 $ 3.01 $ 3.15 $ 3.15 $ 2.93 Waha (3) Volume (MMBtu) 8,100,000 4,550,000 2,760,000 1,840,000 17,250,000 Weighted Avg Price - Floor $ 2.14 $ 2.44 $ 2.47 $ 2.50 $ 2.31 Weighted Avg Price - Ceiling $ 2.59 $ 2.94 $ 3.00 $ 3.12 $ 2.80 ________________________________________ (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 Second Third Fourth Total 2021: WTI Midland (1) Volume (Bbls) — — 3,220,000 3,220,000 6,440,000 Weighted Avg Differential (2) $ — $ — $ (0.08) $ (0.08) $ (0.08) 2022: WTI Midland (1) Volume (Bbls) 2,700,000 2,093,000 1,380,000 736,000 6,909,000 Weighted Avg Differential (2) $ 0.20 $ 0.22 $ 0.20 $ 0.05 $ 0.19 ________________________________________ (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 Roll Differential Swaps First Second Third Fourth Total 2021: WTI (1) Volume (Bbls) — — 1,656,000 1,656,000 3,312,000 Weighted Avg Price $ — $ — $ (0.10) $ (0.10) $ (0.10) 2022: WTI (1) Volume (Bbls) 1,620,000 1,001,000 644,000 — 3,265,000 Weighted Avg Price $ (0.10) $ (0.01) $ 0.10 $ — $ (0.03) ________________________________________ (1) The index price used to determine the settlement “roll” is WTI as quoted on the NYMEX. |
Schedule of Net (Gains) Losses from Settlements and Changes of Derivative Contracts | The following table presents the components of “Loss (gain) on derivative instruments, net” for the periods indicated. Three Months Ended Six Months Ended (in thousands) 2021 2020 2021 2020 Decrease (increase) in fair value of derivative instruments, net: Gas contracts $ 40,026 $ 19,826 $ 39,579 $ 32,319 Oil contracts 85,671 168,000 185,519 (28,319) 125,697 187,826 225,098 4,000 Cash payments (receipts) on derivative instruments, net: Gas contracts 14,403 (5,870) 29,668 (17,589) Oil contracts 71,733 (58,071) 119,002 (89,466) 86,136 (63,941) 148,670 (107,055) Loss (gain) on derivative instruments, net $ 211,833 $ 123,885 $ 373,768 $ (103,055) |
Schedule of Derivative Assets and Liabilities | The following tables present the amounts and classifications of our derivative assets and liabilities as of June 30, 2021 and December 31, 2020, as well as the potential effect of netting arrangements on our recognized derivative asset and liability amounts. June 30, 2021 (in thousands) Balance Sheet Location Asset Liability Oil contracts Current assets — Derivative instruments $ 1,246 $ — Oil contracts Non-current assets — Derivative instruments 1,284 — Gas contracts Non-current assets — Derivative instruments 1,174 — Oil contracts Current liabilities — Derivative instruments — 285,524 Gas contracts Current liabilities — Derivative instruments — 81,067 Oil contracts Non-current liabilities — Derivative instruments — 16,132 Gas contracts Non-current liabilities — Derivative instruments — 35 Total gross amounts presented in the balance sheet 3,704 382,758 Less: gross amounts not offset in the balance sheet (3,704) (3,704) Net amount $ — $ 379,054 December 31, 2020 (in thousands) Balance Sheet Location Asset Liability Oil contracts Current assets — Derivative instruments $ 5,425 $ — Gas contracts Current assets — Derivative instruments 1,423 — Gas contracts Non-current assets — Derivative instruments 2,342 — Oil contracts Current liabilities — Derivative instruments — 106,507 Gas contracts Current liabilities — Derivative instruments — 38,891 Oil contracts Non-current liabilities — Derivative instruments — 12,526 Gas contracts Non-current liabilities — Derivative instruments — 5,223 Total gross amounts presented in the balance sheet 9,190 163,147 Less: gross amounts not offset in the balance sheet (8,863) (8,863) Net amount $ 327 $ 154,284 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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, 2021 and December 31, 2020: June 30, 2021 December 31, 2020 (in thousands) Book Fair Book Fair Financial Assets (Liabilities): 4.375% Notes due 2024 $ 750,000 $ (816,375) $ (750,000) $ (818,025) 3.90% Notes due 2027 $ 750,000 $ (826,800) $ (750,000) $ (826,575) 4.375% Notes due 2029 $ 500,000 $ (567,900) $ (500,000) $ (567,250) Derivative instruments — assets $ 3,704 $ 3,704 $ 9,190 $ 9,190 Derivative instruments — liabilities $ (382,758) $ (382,758) $ (163,147) $ (163,147) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [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) 2021 2020 2021 2020 Restricted stock awards: Performance stock awards $ 3,441 $ 4,059 $ 6,723 $ 8,119 Service-based stock awards 6,543 6,585 14,842 13,962 9,984 10,644 21,565 22,081 Stock option awards 426 416 900 914 Total stock-based compensation cost 10,410 11,060 22,465 22,995 Less amounts capitalized to oil and gas properties (2,532) (4,313) (6,038) (9,854) Stock-based compensation expense $ 7,878 $ 6,747 $ 16,427 $ 13,141 |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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, 2021: (in thousands) Six Months Ended Asset retirement obligation at January 1, 2021 $ 177,867 Liabilities incurred 2,967 Liability settlements and disposals (77,531) Accretion expense 3,730 Revisions of estimated liabilities 25,149 Asset retirement obligation at June 30, 2021 132,182 Less current obligation (12,629) Long-term asset retirement obligation $ 119,553 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 (loss) per common share under the two-class method are presented below for the periods indicated. Earnings (loss) per share are based on whole numbers rather than the rounded numbers presented. Three Months Ended June 30, 2021 2020 (in thousands, except per share information) Income (Numerator) Shares (Denominator) Per-Share Amount Income (Numerator) Shares (Denominator) Per-Share Amount Net income (loss) $ 113,388 $ (925,147) Less: dividends and net income attributable to participating securities (1) (2,399) (569) Less: redeemable preferred stock dividends (572) (1,269) Basic earnings (loss) per share Income (loss) available to common stockholders 110,417 100,194 $ 1.10 (926,985) 99,880 $ (9.28) Effects of dilutive securities Dilutive securities (2) 1 91 — — Diluted earnings (loss) per share Income (loss) available to common stockholders and assumed conversions $ 110,418 100,285 $ 1.10 $ (926,985) 99,880 $ (9.28) Six Months Ended June 30, 2021 2020 (in thousands, except per share information) Income (Numerator) Shares (Denominator) Per-Share Amount Income (Numerator) Shares (Denominator) Per-Share Amount Net income (loss) $ 241,470 $ (1,699,429) Less: dividends and net income attributable to participating securities (1) (5,172) (1,119) Less: redeemable preferred stock dividends (1,144) (2,538) Basic earnings (loss) per share Income (loss) available to common stockholders 235,154 100,160 $ 2.35 (1,703,086) 99,861 $ (17.05) Effects of dilutive securities Dilutive securities (2) 2 68 — — Diluted earnings (loss) per share Income (loss) available to common stockholders and assumed conversions $ 235,156 100,228 $ 2.35 $ (1,703,086) 99,861 $ (17.05) ________________________________________ (1) Participating securities do not have a contractual obligation to share in the losses of the entity, therefore, net losses are not attributable to participating securities. (2) Inclusion of certain potential common shares would have an anti-dilutive effect, therefore, these shares were excluded from the calculations of diluted earnings (loss) per share. Excluded from the calculation for the three months ended June 30, 2021 were 427.4 thousand potential common shares from the assumed exercise of employee stock options and 238.2 thousand potential common shares from the assumed conversion of the Preferred Stock. Excluded from the calculation for the three months ended June 30, 2020 were 456.6 thousand potential common shares from the assumed exercise of employee stock options, 515.8 thousand potential common shares from the assumed conversion of the Preferred Stock, and 8.8 thousand potential common shares from the assumed vesting of incremental shares of unvested restricted stock units. Excluded from the calculation for the six months ended June 30, 2021 were 450.7 thousand potential common shares from the assumed exercise of employee stock options and 238.2 thousand potential common shares from the assumed conversion of the Preferred Stock. Excluded from the calculation for the six months ended June 30, 2020 were 456.6 thousand potential common shares from the assumed exercise of employee stock options, 515.8 thousand potential common shares from the assumed conversion of the Preferred Stock, and 8.8 thousand potential common shares from the assumed vesting of incremental shares of unvested restricted stock units. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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) 2021 2020 2021 2020 Current tax expense (benefit) $ 442 $ 37 $ 442 $ (161) Deferred tax expense (benefit) 34,550 (271,543) 74,720 (287,900) $ 34,992 $ (271,506) $ 75,162 $ (288,061) Combined federal and state effective income tax rate 23.6% 22.7% 23.7% 14.5% |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Information | Three Months Ended Six Months Ended (in thousands) 2021 2020 2021 2020 Cash paid during the period for: Interest (net of capitalized amounts of $16,001, $18,145, $22,014 and $25,473, respectively) $ 16,553 $ 14,050 $ 22,538 $ 19,609 Income taxes $ 541 $ — $ 571 $ — Cash received for income tax refunds $ 103 $ 280 $ 369 $ 484 |
BASIS OF PRESENTATION - Narrati
BASIS OF PRESENTATION - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
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% | |||
Impairment of oil and gas properties | $ 0 | $ 941,198 | $ 0 | $ 1,274,849 |
Minimum | ||||
Oil and Gas, Delivery Commitment [Line Items] | ||||
Oil and gas delivery commitments and contracts, period | 1 month |
BASIS OF PRESENTATION - Changes
BASIS OF PRESENTATION - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Goodwill [Roll Forward] | ||||
Goodwill balance at beginning of period | $ 716,865 | |||
Business combination purchase price adjustments | (2,418) | |||
Impairment | $ 0 | $ 0 | $ 0 | (714,447) |
Goodwill balance at end of period | $ 0 | $ 0 |
LONG-TERM DEBT - Long-Term Debt
LONG-TERM DEBT - Long-Term Debt Outstanding (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Mar. 08, 2019 | Apr. 30, 2017 | Sep. 30, 2014 |
Debt Instrument | |||||
Principal | $ 2,000,000,000 | $ 2,000,000,000 | |||
Unamortized Debt Issuance Costs and Discounts | (11,669,000) | (12,701,000) | |||
Long-term Debt, net | 1,988,331,000 | 1,987,299,000 | |||
4.375% Notes due 2024 | |||||
Debt Instrument | |||||
Principal | 750,000,000 | 750,000,000 | |||
Unamortized Debt Issuance Costs and Discounts | (2,254,000) | (2,672,000) | |||
Long-term Debt, net | $ 747,746,000 | 747,328,000 | |||
4.375% Notes due 2024 | Senior Notes | |||||
Debt Instrument | |||||
Stated interest rate of debt instrument (as a percent) | 4.375% | 4.375% | |||
Principal | $ 750,000,000 | ||||
3.90% Notes due 2027 | |||||
Debt Instrument | |||||
Principal | $ 750,000,000 | 750,000,000 | |||
Unamortized Debt Issuance Costs and Discounts | (5,156,000) | (5,541,000) | |||
Long-term Debt, net | $ 744,844,000 | 744,459,000 | |||
3.90% Notes due 2027 | Senior Notes | |||||
Debt Instrument | |||||
Stated interest rate of debt instrument (as a percent) | 3.90% | 3.90% | |||
Principal | $ 750,000,000 | ||||
Unamortized debt issuance costs | $ 4,000,000 | 4,300,000 | |||
Unamortized discount | 1,200,000 | 1,300,000 | |||
4.375% Notes due 2029 | |||||
Debt Instrument | |||||
Principal | 500,000,000 | 500,000,000 | |||
Unamortized Debt Issuance Costs and Discounts | (4,259,000) | (4,488,000) | |||
Long-term Debt, net | $ 495,741,000 | 495,512,000 | |||
4.375% Notes due 2029 | Senior Notes | |||||
Debt Instrument | |||||
Stated interest rate of debt instrument (as a percent) | 4.375% | ||||
Principal | $ 500,000,000 | ||||
Unamortized debt issuance costs | $ 3,700,000 | 3,900,000 | |||
Unamortized discount | $ 600,000 | $ 600,000 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) - USD ($) | Mar. 08, 2019 | Apr. 30, 2017 | Jun. 30, 2021 | Dec. 31, 2020 | Feb. 05, 2019 | Sep. 30, 2014 |
Line of Credit Facility [Line Items] | ||||||
Unamortized debt issuance costs and discounts | $ 11,669,000 | $ 12,701,000 | ||||
Long-term debt principal | 2,000,000,000 | 2,000,000,000 | ||||
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 | |||||
Maximum additional non-cash impairment charge add-backs | 3,500,000,000 | |||||
Consolidated cash threshold | $ 175,000,000 | |||||
Property lien debt basket (as a percent) | 15.00% | |||||
Consolidated net tangible assets cap | $ 50,000,000 | |||||
Borrowings outstanding | 0 | |||||
Unused borrowing availability | $ 1,248,000,000 | |||||
Debt-to-capital ratio (as a percent) | 65.00% | |||||
Unamortized debt issuance costs and discounts | $ 3,600,000 | 4,300,000 | ||||
Letter of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Borrowings outstanding | 2,500,000 | |||||
4.375% Notes due 2029 | ||||||
Line of Credit Facility [Line Items] | ||||||
Unamortized debt issuance costs and discounts | 4,259,000 | 4,488,000 | ||||
Long-term debt principal | $ 500,000,000 | 500,000,000 | ||||
4.375% Notes due 2029 | Senior Notes | ||||||
Line of Credit Facility [Line Items] | ||||||
Long-term debt principal | $ 500,000,000 | |||||
Stated interest rate of debt instrument (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% | ||||
3.90% Notes due 2027 | ||||||
Line of Credit Facility [Line Items] | ||||||
Unamortized debt issuance costs and discounts | $ 5,156,000 | 5,541,000 | ||||
Long-term debt principal | $ 750,000,000 | 750,000,000 | ||||
3.90% Notes due 2027 | Senior Notes | ||||||
Line of Credit Facility [Line Items] | ||||||
Long-term debt principal | $ 750,000,000 | |||||
Stated interest rate of debt instrument (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% | ||||
4.375% Notes due 2024 | ||||||
Line of Credit Facility [Line Items] | ||||||
Unamortized debt issuance costs and discounts | $ 2,254,000 | 2,672,000 | ||||
Long-term debt principal | $ 750,000,000 | $ 750,000,000 | ||||
4.375% Notes due 2024 | Senior Notes | ||||||
Line of Credit Facility [Line Items] | ||||||
Long-term debt principal | $ 750,000,000 | |||||
Stated interest rate of debt instrument (as a percent) | 4.375% | 4.375% | ||||
Effective rate (as a percent) | 4.50% | |||||
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% |
DERIVATIVE INSTRUMENTS - Deriva
DERIVATIVE INSTRUMENTS - Derivative Contracts (Details) - Outstanding at end of period | 6 Months Ended |
Jun. 30, 2021MMBTU$ / MMBTU$ / bblbbl | |
Oil Collar WTI Index | 2021 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 7,360,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / bbl | 34.65 |
Weighted Avg Price - Ceiling (USD per unit) | $ / bbl | 44.37 |
Oil Collar WTI Index | Third Quarter - 2021 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 3,680,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / bbl | 34.65 |
Weighted Avg Price - Ceiling (USD per unit) | $ / bbl | 44.37 |
Oil Collar WTI Index | Fourth Quarter - 2021 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 3,680,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / bbl | 34.65 |
Weighted Avg Price - Ceiling (USD per unit) | $ / bbl | 44.37 |
Oil Collar WTI Index | 2022 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 7,909,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / bbl | 45.08 |
Weighted Avg Price - Ceiling (USD per unit) | $ / bbl | 57.62 |
Oil Collar WTI Index | First Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 3,060,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / bbl | 41.94 |
Weighted Avg Price - Ceiling (USD per unit) | $ / bbl | 54.06 |
Oil Collar WTI Index | Second Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 2,457,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / bbl | 43.74 |
Weighted Avg Price - Ceiling (USD per unit) | $ / bbl | 56.34 |
Oil Collar WTI Index | Third Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 1,656,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / bbl | 47.56 |
Weighted Avg Price - Ceiling (USD per unit) | $ / bbl | 59.52 |
Oil Collar WTI Index | Fourth Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 736,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | $ / bbl | 57 |
Weighted Avg Price - Ceiling (USD per unit) | $ / bbl | 72.43 |
Gas Collar PEPL Index | 2021 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 16,560,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2 |
Weighted Avg Price - Ceiling (USD per unit) | 2.42 |
Gas Collar PEPL Index | Third Quarter - 2021 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 8,280,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2 |
Weighted Avg Price - Ceiling (USD per unit) | 2.42 |
Gas Collar PEPL Index | Fourth Quarter - 2021 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 8,280,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2 |
Weighted Avg Price - Ceiling (USD per unit) | 2.42 |
Gas Collar PEPL Index | 2022 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 14,520,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2.40 |
Weighted Avg Price - Ceiling (USD per unit) | 2.95 |
Gas Collar PEPL Index | First Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 7,200,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2.25 |
Weighted Avg Price - Ceiling (USD per unit) | 2.73 |
Gas Collar PEPL Index | Second Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 3,640,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2.50 |
Weighted Avg Price - Ceiling (USD per unit) | 3.07 |
Gas Collar PEPL Index | Third Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 1,840,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2.60 |
Weighted Avg Price - Ceiling (USD per unit) | 3.27 |
Gas Collar PEPL Index | Fourth Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 1,840,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2.60 |
Weighted Avg Price - Ceiling (USD per unit) | 3.27 |
Gas Collar Perm EP | 2021 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 12,880,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 1.86 |
Weighted Avg Price - Ceiling (USD per unit) | 2.22 |
Gas Collar Perm EP | Third Quarter - 2021 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 6,440,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 1.86 |
Weighted Avg Price - Ceiling (USD per unit) | 2.22 |
Gas Collar Perm EP | Fourth Quarter - 2021 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 6,440,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 1.86 |
Weighted Avg Price - Ceiling (USD per unit) | 2.22 |
Gas Collar Perm EP | 2022 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 12,720,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2.38 |
Weighted Avg Price - Ceiling (USD per unit) | 2.93 |
Gas Collar Perm EP | First Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 5,400,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2.25 |
Weighted Avg Price - Ceiling (USD per unit) | 2.74 |
Gas Collar Perm EP | Second Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 3,640,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2.45 |
Weighted Avg Price - Ceiling (USD per unit) | 3.01 |
Gas Collar Perm EP | Third Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 1,840,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2.50 |
Weighted Avg Price - Ceiling (USD per unit) | 3.15 |
Gas Collar Perm EP | Fourth Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 1,840,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2.50 |
Weighted Avg Price - Ceiling (USD per unit) | 3.15 |
Gas Collar Waha | 2021 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 18,400,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 1.88 |
Weighted Avg Price - Ceiling (USD per unit) | 2.23 |
Gas Collar Waha | Third Quarter - 2021 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 9,200,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 1.88 |
Weighted Avg Price - Ceiling (USD per unit) | 2.23 |
Gas Collar Waha | Fourth Quarter - 2021 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 9,200,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 1.88 |
Weighted Avg Price - Ceiling (USD per unit) | 2.23 |
Gas Collar Waha | 2022 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 17,250,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2.31 |
Weighted Avg Price - Ceiling (USD per unit) | 2.80 |
Gas Collar Waha | First Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 8,100,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2.14 |
Weighted Avg Price - Ceiling (USD per unit) | 2.59 |
Gas Collar Waha | Second Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 4,550,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2.44 |
Weighted Avg Price - Ceiling (USD per unit) | 2.94 |
Gas Collar Waha | Third Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 2,760,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2.47 |
Weighted Avg Price - Ceiling (USD per unit) | 3 |
Gas Collar Waha | Fourth Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (MMBtu) | MMBTU | 1,840,000 |
Weighted Average Price | |
Weighted Avg Price - Floor (USD per unit) | 2.50 |
Weighted Avg Price - Ceiling (USD per unit) | 3.12 |
Oil Basis Swaps WTI Midland Index | 2021 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 6,440,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | $ / bbl | (0.08) |
Oil Basis Swaps WTI Midland Index | Third Quarter - 2021 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 3,220,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | $ / bbl | (0.08) |
Oil Basis Swaps WTI Midland Index | Fourth Quarter - 2021 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 3,220,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | $ / bbl | (0.08) |
Oil Basis Swaps WTI Midland Index | 2022 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 6,909,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | $ / bbl | 0.19 |
Oil Basis Swaps WTI Midland Index | First Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 2,700,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | $ / bbl | 0.20 |
Oil Basis Swaps WTI Midland Index | Second Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 2,093,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | $ / bbl | 0.22 |
Oil Basis Swaps WTI Midland Index | Third Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 1,380,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | $ / bbl | 0.20 |
Oil Basis Swaps WTI Midland Index | Fourth Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 736,000 |
Weighted Average Price | |
Weighted Avg Differential (USD per Bbl) | $ / bbl | 0.05 |
Oil Roll Differential Swaps WTI Index | 2021 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 3,312,000 |
Weighted Average Price | |
Weighted Avg Price (USD per unit) | $ / bbl | (0.10) |
Oil Roll Differential Swaps WTI Index | Third Quarter - 2021 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 1,656,000 |
Weighted Average Price | |
Weighted Avg Price (USD per unit) | $ / bbl | (0.10) |
Oil Roll Differential Swaps WTI Index | Fourth Quarter - 2021 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 1,656,000 |
Weighted Average Price | |
Weighted Avg Price (USD per unit) | $ / bbl | (0.10) |
Oil Roll Differential Swaps WTI Index | 2022 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 3,265,000 |
Weighted Average Price | |
Weighted Avg Price (USD per unit) | $ / bbl | (0.03) |
Oil Roll Differential Swaps WTI Index | First Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 1,620,000 |
Weighted Average Price | |
Weighted Avg Price (USD per unit) | $ / bbl | (0.10) |
Oil Roll Differential Swaps WTI Index | Second Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 1,001,000 |
Weighted Average Price | |
Weighted Avg Price (USD per unit) | $ / bbl | (0.01) |
Oil Roll Differential Swaps WTI Index | Third Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 644,000 |
Weighted Average Price | |
Weighted Avg Price (USD per unit) | $ / bbl | 0.10 |
Oil Roll Differential Swaps WTI Index | Fourth Quarter - 2022 | |
Fair values of derivative assets and liabilities | |
Volume (Bbls) | bbl | 0 |
Weighted Average Price | |
Weighted Avg Price (USD per unit) | $ / bbl | 0 |
DERIVATIVE INSTRUMENTS - (Gain)
DERIVATIVE INSTRUMENTS - (Gain) Loss on Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Derivative [Line Items] | ||||
Decrease (increase) in fair value of derivative instruments, net: | $ 125,697 | $ 187,826 | $ 225,098 | $ 4,000 |
Cash payments (receipts) on derivative instruments, net: | 86,136 | (63,941) | 148,670 | (107,055) |
Loss (gain) on derivative instruments, net | 211,833 | 123,885 | 373,768 | (103,055) |
Gas contracts | ||||
Derivative [Line Items] | ||||
Decrease (increase) in fair value of derivative instruments, net: | 40,026 | 19,826 | 39,579 | 32,319 |
Cash payments (receipts) on derivative instruments, net: | 14,403 | (5,870) | 29,668 | (17,589) |
Oil contracts | ||||
Derivative [Line Items] | ||||
Decrease (increase) in fair value of derivative instruments, net: | 85,671 | 168,000 | 185,519 | (28,319) |
Cash payments (receipts) on derivative instruments, net: | $ 71,733 | $ (58,071) | $ 119,002 | $ (89,466) |
DERIVATIVE INSTRUMENTS - Deri_2
DERIVATIVE INSTRUMENTS - Derivative Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Asset | ||
Total gross amounts presented in the balance sheet | $ 1,246 | $ 6,848 |
Liability | ||
Total gross amounts presented in the balance sheet | 366,591 | 145,398 |
Not Designated as Hedging Instrument | ||
Asset | ||
Total gross amounts presented in the balance sheet | 3,704 | 9,190 |
Less: gross amounts not offset in the balance sheet | (3,704) | (8,863) |
Net amount | 0 | 327 |
Liability | ||
Total gross amounts presented in the balance sheet | 382,758 | 163,147 |
Less: gross amounts not offset in the balance sheet | (3,704) | (8,863) |
Net amount | 379,054 | 154,284 |
Current assets — Derivative instruments | Not Designated as Hedging Instrument | Oil contracts | ||
Asset | ||
Total gross amounts presented in the balance sheet | 1,246 | 5,425 |
Current assets — Derivative instruments | Not Designated as Hedging Instrument | Gas contracts | ||
Asset | ||
Total gross amounts presented in the balance sheet | 1,423 | |
Non-current assets — Derivative instruments | Not Designated as Hedging Instrument | Oil contracts | ||
Asset | ||
Total gross amounts presented in the balance sheet | 1,284 | |
Non-current assets — Derivative instruments | Not Designated as Hedging Instrument | Gas contracts | ||
Asset | ||
Total gross amounts presented in the balance sheet | 1,174 | 2,342 |
Current liabilities — Derivative instruments | Not Designated as Hedging Instrument | Oil contracts | ||
Liability | ||
Total gross amounts presented in the balance sheet | 285,524 | 106,507 |
Current liabilities — Derivative instruments | Not Designated as Hedging Instrument | Gas contracts | ||
Liability | ||
Total gross amounts presented in the balance sheet | 81,067 | 38,891 |
Non-current liabilities — Derivative instruments | Not Designated as Hedging Instrument | Oil contracts | ||
Liability | ||
Total gross amounts presented in the balance sheet | 16,132 | 12,526 |
Non-current liabilities — Derivative instruments | Not Designated as Hedging Instrument | Gas contracts | ||
Liability | ||
Total gross amounts presented in the balance sheet | $ 35 | $ 5,223 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Apr. 30, 2017 | Sep. 30, 2014 |
Financial Assets (Liabilities): | ||||
Derivative instruments — assets | $ 1,246 | $ 6,848 | ||
Derivative instruments — liabilities | $ (366,591) | (145,398) | ||
4.375% Notes due 2024 | Senior Notes | ||||
Financial Assets (Liabilities): | ||||
Stated interest rate of debt instrument (as a percent) | 4.375% | 4.375% | ||
3.90% Notes due 2027 | Senior Notes | ||||
Financial Assets (Liabilities): | ||||
Stated interest rate of debt instrument (as a percent) | 3.90% | 3.90% | ||
4.375% Notes due 2029 | Senior Notes | ||||
Financial Assets (Liabilities): | ||||
Stated interest rate of debt instrument (as a percent) | 4.375% | |||
Book Value | ||||
Financial Assets (Liabilities): | ||||
Derivative instruments — assets | $ 3,704 | 9,190 | ||
Derivative instruments — liabilities | (382,758) | (163,147) | ||
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 | (500,000) | ||
Fair Value | ||||
Financial Assets (Liabilities): | ||||
Derivative instruments — assets | 3,704 | 9,190 | ||
Derivative instruments — liabilities | (382,758) | (163,147) | ||
Fair Value | 4.375% Notes due 2024 | ||||
Financial Assets (Liabilities): | ||||
Long-term debt | (816,375) | (818,025) | ||
Fair Value | 3.90% Notes due 2027 | ||||
Financial Assets (Liabilities): | ||||
Long-term debt | (826,800) | (826,575) | ||
Fair Value | 4.375% Notes due 2029 | ||||
Financial Assets (Liabilities): | ||||
Long-term debt | $ (567,900) | $ (567,250) |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Other Financial Instruments | ||
Accrued operating expenses | $ 73.4 | $ 67.4 |
Accrued general and administrative costs | 46.8 | |
Accrued regular payroll-related costs | 34.1 | |
Accrued voluntary early retirement incentive program and involuntary reduction in workforce accruals | 2.5 | 11.3 |
Allowance for Trade Receivables | ||
Other Financial Instruments | ||
Aggregate allowance for doubtful accounts | $ 3 | $ 2.6 |
CAPITAL STOCK - Narrative (Deta
CAPITAL STOCK - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended |
May 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | |||
Common stock authorized (shares) | 200,000,000 | 200,000,000 | |
Preferred stock authorized (shares) | 15,000,000 | ||
Common stock outstanding (shares) | 102,800,000 | ||
Preferred stock dividend rate (as a percent) | 8.125% | 8.125% | |
Preferred stock liquidation preference per share (USD per share) | $ 1,000 | ||
Preferred stock, liquidation preference | $ 28.2 | ||
Price received per share upon conversion (USD per share) | $ 471.40 | ||
Stock issued upon conversion of preferred stock (shares) | 8.45897 | ||
Dividends | |||
Dividends declared per common share (USD per share) | $ 0.27 | ||
Dividends declared | $ 27.9 | ||
Dividends declared per preferred share (USD per share) | $ 20.3125 | ||
Preferred stock cash dividends | $ 0.6 | ||
Series A Preferred Stock | |||
Class of Stock [Line Items] | |||
Preferred stock authorized (shares) | 28,200 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Options, Restricted Stock and Unit Awards | ||||
Stock compensation cost | $ 10,410 | $ 11,060 | $ 22,465 | $ 22,995 |
Less amounts capitalized to oil and gas properties | (2,532) | (4,313) | (6,038) | (9,854) |
Stock-based compensation expense | 7,878 | 6,747 | 16,427 | 13,141 |
Restricted stock awards: | ||||
Options, Restricted Stock and Unit Awards | ||||
Stock compensation cost | 9,984 | 10,644 | 21,565 | 22,081 |
Performance stock awards | ||||
Options, Restricted Stock and Unit Awards | ||||
Stock compensation cost | 3,441 | 4,059 | 6,723 | 8,119 |
Service-based stock awards | ||||
Options, Restricted Stock and Unit Awards | ||||
Stock compensation cost | 6,543 | 6,585 | 14,842 | 13,962 |
Stock option awards | ||||
Options, Restricted Stock and Unit Awards | ||||
Stock compensation cost | $ 426 | $ 416 | $ 900 | $ 914 |
ASSET RETIREMENT OBLIGATIONS -
ASSET RETIREMENT OBLIGATIONS - Summary (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Asset Retirement Obligations | ||
Balance at beginning of year | $ 177,867 | |
Liabilities incurred | 2,967 | |
Liability settlements and disposals | (77,531) | |
Accretion expense | 3,730 | |
Revisions of estimated liabilities | 25,149 | |
Balance at end of year | 132,182 | |
Less current obligation | (12,629) | |
Long-term asset retirement obligation | $ 119,553 | $ 165,595 |
EARNINGS (LOSS) PER SHARE - Sum
EARNINGS (LOSS) PER SHARE - Summary (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income (Numerator) | ||||||
Net income (loss) | $ 113,388 | $ 128,082 | $ (925,147) | $ (774,282) | $ 241,470 | $ (1,699,429) |
Less: dividends and net income attributable to participating securities | (2,399) | (569) | (5,172) | (1,119) | ||
Less: redeemable preferred stock dividends | (572) | (1,269) | (1,144) | (2,538) | ||
Basic EPS - Income (loss) available to common stockholders | 110,417 | (926,985) | 235,154 | (1,703,086) | ||
Effects of dilutive securities - Dilutive securities | 1 | 0 | 2 | 0 | ||
Diluted EPS - Income (loss) available to common stockholders and assumed conversions | $ 110,418 | $ (926,985) | $ 235,156 | $ (1,703,086) | ||
Shares (Denominator) | ||||||
Basic EPS - Income (loss) available to common stockholders (shares) | 100,194,000 | 99,880,000 | 100,160,000 | 99,861,000 | ||
Effects of dilutive securities - Dilutive securities (shares) | 91,000 | 0 | 68,000 | 0 | ||
Diluted EPS - Income (loss) available to common stockholders and assumed conversions (shares) | 100,285,000 | 99,880,000 | 100,228,000 | 99,861,000 | ||
Per-Share Amount | ||||||
Basic EPS - Income (loss) available to common stockholders (USD per share) | $ 1.10 | $ (9.28) | $ 2.35 | $ (17.05) | ||
Diluted EPS - Income (loss) available to common stockholders and assumed conversions (USD per share) | $ 1.10 | $ (9.28) | $ 2.35 | $ (17.05) | ||
Employee Stock Option | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Excluded antidilutive securities (shares) | 427,400 | 456,600 | 450,700 | 456,600 | ||
Convertible Preferred Stock | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Excluded antidilutive securities (shares) | 238,200 | 515,800 | 238,200 | 515,800 | ||
Restricted Stock Awards | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Excluded antidilutive securities (shares) | 8,800 | 8,800 |
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, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Tax Expense (Benefit) | ||||
Current tax expense (benefit) | $ 442 | $ 37 | $ 442 | $ (161) |
Deferred tax expense (benefit) | 34,550 | (271,543) | 74,720 | (287,900) |
Income tax expense (benefit) | $ 34,992 | $ (271,506) | $ 75,162 | $ (288,061) |
Combined federal and state effective income tax rate (as a percent) | 23.60% | 22.70% | 23.70% | 14.50% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Income Tax Contingency [Line Items] | ||
U.S. net tax operating loss carryforward | $ 1,997,000,000 | |
U.S. net tax operating loss carryforward subject to expiration | 1,773,000,000 | |
U.S. net tax operating loss carryforward not subject to expiration | 224,400,000 | |
Unrecognized tax benefits that would impact the entity's effective rate | $ 0 | |
Provisions for interest or penalties related to uncertain tax positions | $ 0 | |
State Jurisdiction | ||
Income Tax Contingency [Line Items] | ||
Valuation allowance against net operating loss carryovers | 120,700,000 | |
Oil Recovery and Marginal Well Credits | ||
Income Tax Contingency [Line Items] | ||
Tax credit carryforward | $ 4,200,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2021USD ($)Bcf | May 31, 2021USD ($) | |
Construction, Drilling and Purchase Commitments | ||
Term of lease not yet commenced | 4 years | |
Minimum | ||
Construction, Drilling and Purchase Commitments | ||
Oil and gas delivery commitments and contracts, period | 1 month | |
Lease liability not yet commenced | $ 150 | |
Right-of-use asset not yet commenced | 150 | |
Maximum | ||
Construction, Drilling and Purchase Commitments | ||
Lease liability not yet commenced | 160 | |
Right-of-use asset not yet commenced | $ 160 | |
Natural Gas Sales Contracts | ||
Construction, Drilling and Purchase Commitments | ||
Oil and gas delivery commitments and contracts, remaining contractual volume (bcf) | Bcf | 456.5 | |
Oil and gas delivery commitments and contracts, period | 10 years | |
Maximum financial commitment resulting from inability to meet gas delivery commitments | $ 1,433 | |
Gas Gathering and Processing Agreements | ||
Construction, Drilling and Purchase Commitments | ||
Oil and gas delivery commitments and contracts, period | 15 years | |
Maximum financial commitment resulting from inability to meet gas delivery commitments | $ 728.6 | |
Minimum Volume Delivery Commitments | ||
Construction, Drilling and Purchase Commitments | ||
Maximum financial commitment resulting from inability to meet gas delivery commitments | 104 | |
Commitment liability | 4.1 | |
Firm Transportation Agreements | ||
Construction, Drilling and Purchase Commitments | ||
Maximum financial commitment resulting from inability to meet gas delivery commitments | 16.1 | |
Minimum Volume Water Delivery Commitments | ||
Construction, Drilling and Purchase Commitments | ||
Commitment liability | 0.7 | |
Maximum financial commitment resulting from inability to meet water delivery commitments | 60.8 | |
Drilling Commitments | ||
Construction, Drilling and Purchase Commitments | ||
Commitments for purchases and other expenditures | 224.8 | |
Gathering System Construction | ||
Construction, Drilling and Purchase Commitments | ||
Commitments for purchases and other expenditures | $ 4.8 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Cash paid during the period for: | ||||
Interest (net of capitalized amounts) | $ 16,553 | $ 14,050 | $ 22,538 | $ 19,609 |
Income taxes | 541 | 0 | 571 | 0 |
Cash received for income tax refunds | 103 | 280 | 369 | 484 |
Capitalized interest | $ 16,001 | $ 18,145 | $ 22,014 | $ 25,473 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Helmerich & Payne | ||||
Related Party Transaction [Line Items] | ||||
Contract drilling service costs | $ 2.3 | $ 7.8 | $ 5.2 | $ 23.4 |
MERGER AND DIVESTITURES (Detail
MERGER AND DIVESTITURES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | May 23, 2021 | |
Business Acquisition [Line Items] | ||||
Proceeds from sale of oil and gas property and equipment | $ 118,669 | $ 830 | ||
Double C Merger Sub, Inc. | ||||
Business Acquisition [Line Items] | ||||
Noncontrolling interest, percentage of ownership by parent | 50.50% | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | West Texas and Southern Oklahoma | ||||
Business Acquisition [Line Items] | ||||
Proceeds from sale of oil and gas property and equipment | $ 111,000 | |||
Cabot Oil & Gas Corporation | Double C Merger Sub, Inc. | ||||
Business Acquisition [Line Items] | ||||
Noncontrolling interest, percentage of ownership by noncontrolling owners | 49.50% | |||
Double C Merger Sub, Inc. | ||||
Business Acquisition [Line Items] | ||||
Exchange ratio of common stock in the Merger (shares) | 4.0146 | |||
Business acquisition costs | $ 8,100 |