Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 13, 2015 | Jun. 30, 2014 |
Document and Entity Information | |||
Entity Registrant Name | CIMAREX ENERGY CO | ||
Entity Central Index Key | 1168054 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $12.30 | ||
Entity Common Stock, Shares Outstanding | 87,597,134 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $405,862 | $4,531 |
Accounts receivable: | ||
Trade, net of allowance | 134,443 | 83,070 |
Oil and gas sales, net of allowance | 259,220 | 265,050 |
Gas gathering, processing, and marketing, net of allowance | 18,009 | 19,102 |
Other | 436 | 532 |
Oil and gas well equipment and supplies | 89,780 | 66,772 |
Deferred income taxes | 13,475 | 16,854 |
Derivative instruments | 4,268 | |
Prepaid expenses | 9,356 | 7,867 |
Other current assets | 1,223 | 1,093 |
Total current assets | 931,804 | 469,139 |
Oil and gas properties at cost, using the full cost method of accounting: | ||
Proved properties | 14,402,064 | 12,863,961 |
Unproved properties and properties under development, not being amortized | 759,149 | 585,361 |
Gross oil and gas properties | 15,161,213 | 13,449,322 |
Less - accumulated depreciation, depletion and amortization | -8,257,502 | -7,483,685 |
Net oil and gas properties | 6,903,711 | 5,965,637 |
Fixed assets, less accumulated depreciation of $175,453 and $167,675 | 211,031 | 146,918 |
Goodwill | 620,232 | 620,232 |
Other assets, net | 58,515 | 51,209 |
Total assets | 8,725,293 | 7,253,135 |
Accounts payable: | ||
Trade | 102,276 | 80,918 |
Gas gathering, processing, and marketing | 35,775 | 35,192 |
Exploration and development | 200,929 | 173,298 |
Taxes other than income | 26,950 | 27,509 |
Other | 219,505 | 211,688 |
Derivative instruments | 389 | |
Revenue payable | 190,892 | 154,173 |
Total current liabilities | 776,327 | 683,167 |
Long-term debt | 1,500,000 | 924,000 |
Deferred income taxes | 1,754,706 | 1,459,841 |
Asset retirement obligation | 159,792 | 126,968 |
Other liabilities | 33,836 | 36,951 |
Total liabilities | 4,224,661 | 3,230,927 |
Stockholders' equity: | ||
Common stock, $0.01 par value, 200,000,000 shares authorized, 87,592,535 and 87,152,197 shares issued, respectively | 876 | 872 |
Paid-in capital | 1,997,080 | 1,970,113 |
Retained earnings | 2,501,574 | 2,050,034 |
Accumulated other comprehensive income | 1,102 | 1,189 |
Total stockholders' equity | 4,500,632 | 4,022,208 |
Total liabilities and stockholders' equity | $8,725,293 | $7,253,135 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Condensed Consolidated Balance Sheets | ||
Fixed assets, accumulated depreciation (in dollars) | $175,453 | $167,675 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 87,592,535 | 87,152,197 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues: | |||
Oil sales | $1,308,958 | $1,250,212 | $1,027,757 |
Gas sales | 687,930 | 471,045 | 340,744 |
NGL sales | 375,941 | 231,248 | 213,149 |
Gas gathering and other | 49,602 | 45,441 | 43,042 |
Gas marketing, net of related costs of $256,836, $187,772 and $86,813 respectively | 1,745 | 105 | -754 |
Total revenues | 2,424,176 | 1,998,051 | 1,623,938 |
Costs and expenses: | |||
Depreciation, depletion and amortization | 806,021 | 615,874 | 513,916 |
Asset retirement obligation | 10,082 | 7,989 | 13,019 |
Production | 342,304 | 286,742 | 258,584 |
Transportation, processing and other operating | 195,414 | 93,580 | 57,354 |
Gas gathering and other | 35,113 | 25,876 | 21,965 |
Taxes other than income | 128,793 | 112,732 | 86,994 |
General and administrative | 81,160 | 77,466 | 54,428 |
Stock compensation | 15,001 | 14,279 | 21,919 |
(Gain) loss on derivative instruments, net | -3,762 | 209 | -245 |
Other operating (income) expense, net | 116 | -132,334 | 24,961 |
Total costs and expenses | 1,610,242 | 1,102,413 | 1,052,895 |
Operating income | 813,934 | 895,638 | 571,043 |
Other (income) and expense: | |||
Interest expense | 72,865 | 54,973 | 49,317 |
Capitalized interest | -35,925 | -31,517 | -35,174 |
Loss on early extinguishment of debt | 16,214 | ||
Other, net | -28,907 | -21,518 | -19,864 |
Income before income tax | 805,901 | 893,700 | 560,550 |
Income tax expense | 298,697 | 329,011 | 206,727 |
Net income | 507,204 | 564,689 | 353,823 |
Basic | |||
Distributed (in dollars per share) | $0.64 | $0.56 | $0.48 |
Undistributed (in dollars per share) | $5.15 | $5.92 | $3.60 |
Total basic (in dollars per share) | $5.79 | $6.48 | $4.08 |
Diluted | |||
Distributed (in dollars per share) | $0.64 | $0.56 | $0.48 |
Undistributed (in dollars per share) | $5.14 | $5.91 | $3.59 |
Total diluted (in dollars per share) | $5.78 | $6.47 | $4.07 |
Comprehensive income: | |||
Net income | 507,204 | 564,689 | 353,823 |
Other comprehensive income: | |||
Change in fair value of investments, net of tax | -87 | 715 | 488 |
Total comprehensive income | $507,117 | $565,404 | $354,311 |
CONSOLIDATED_STATEMENTS_OF_INC1
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Statements of Income and Comprehensive Income | |||
Gas marketing, related costs | $256,836 | $187,772 | $86,813 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income | $507,204 | $564,689 | $353,823 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, depletion and amortization | 806,021 | 615,874 | 513,916 |
Asset retirement obligation | 10,082 | 7,989 | 13,019 |
Deferred income taxes | 298,293 | 329,700 | 208,216 |
Stock compensation | 15,001 | 14,279 | 21,919 |
(Gain) loss on derivative instruments | -3,762 | 209 | -245 |
Settlements on derivative instruments | 7,641 | -4,088 | |
Loss on early extinguishment of debt | 16,214 | ||
Changes in non-current assets and liabilities | -2,440 | -141,215 | 3,125 |
Other, net | -3,828 | 751 | 4,728 |
Changes in operating assets and liabilities: | |||
Receivables, net | -35,133 | -64,780 | 56,435 |
Other current assets | -25,428 | 14,234 | 4,209 |
Accounts payable and accrued liabilities | 45,714 | -13,294 | -2,595 |
Net cash provided by operating activities | 1,619,365 | 1,324,348 | 1,192,764 |
Cash flows from investing activities: | |||
Oil and gas expenditures | -2,108,250 | -1,572,288 | -1,662,707 |
Sales of oil and gas assets | 449,981 | 61,503 | 311,562 |
Sales of other assets | 8,413 | 31,661 | 1,060 |
Other expenditures | -90,611 | -51,913 | -64,987 |
Net cash used by investing activities | -1,740,467 | -1,531,037 | -1,415,072 |
Cash flows from financing activities: | |||
Net bank debt borrowings | -174,000 | 174,000 | -55,000 |
Proceeds from other long-term debt | 750,000 | 750,000 | |
Other long-term debt payments | -363,595 | ||
Financing costs incurred | -11,616 | -100 | -13,821 |
Dividends paid | -53,849 | -46,712 | -39,577 |
Issuance of common stock and other | 11,898 | 14,494 | 11,433 |
Net cash provided by financing activities | 522,433 | 141,682 | 289,440 |
Net change in cash and cash equivalents | 401,331 | -65,007 | 67,132 |
Cash and cash equivalents at beginning of period | 4,531 | 69,538 | 2,406 |
Cash and cash equivalents at end of period | $405,862 | $4,531 | $69,538 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2011 | $858 | $1,908,506 | $1,221,263 | ($14) | $3,130,613 |
Balance, shares at Dec. 31, 2011 | 85,774 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Dividends | -41,318 | -41,318 | |||
Net income | 353,823 | 353,823 | |||
Unrealized change in fair value of investments, net of tax | 488 | 488 | |||
Issuance of restricted stock awards | 5 | -5 | |||
Issuance of restricted stock awards, shares | 562 | ||||
Common stock reacquired and retired | -2 | -11,015 | -11,017 | ||
Common stock reacquired and retired, shares | -184 | ||||
Restricted stock forfeited and retired | -1 | 1 | |||
Restricted stock forfeited and retired, shares | -141 | ||||
Exercise of stock options | 6 | 11,427 | 11,433 | ||
Exercise of stock options, shares | 559 | ||||
Vesting of restricted stock units, shares | 26 | ||||
Stock-based compensation | 34,085 | 34,085 | |||
Stock-based compensation tax benefit | -3,371 | -3,371 | |||
Balance at Dec. 31, 2012 | 866 | 1,939,628 | 1,533,768 | 474 | 3,474,736 |
Balance, shares at Dec. 31, 2012 | 86,596 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Dividends | -48,423 | -48,423 | |||
Net income | 564,689 | 564,689 | |||
Unrealized change in fair value of investments, net of tax | 715 | 715 | |||
Issuance of restricted stock awards | 6 | -6 | |||
Issuance of restricted stock awards, shares | 579 | ||||
Common stock reacquired and retired | -1 | -10,100 | -10,101 | ||
Common stock reacquired and retired, shares | -153 | ||||
Restricted stock forfeited and retired | -2 | 2 | |||
Restricted stock forfeited and retired, shares | -171 | ||||
Exercise of stock options | 3 | 14,491 | 14,494 | ||
Exercise of stock options, shares | 276 | ||||
Vesting of restricted stock units, shares | 25 | ||||
Stock-based compensation | 26,098 | 26,098 | |||
Balance at Dec. 31, 2013 | 872 | 1,970,113 | 2,050,034 | 1,189 | 4,022,208 |
Balance, shares at Dec. 31, 2013 | 87,152 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Dividends | -55,664 | -55,664 | |||
Net income | 507,204 | 507,204 | |||
Unrealized change in fair value of investments, net of tax | -87 | -87 | |||
Issuance of restricted stock awards | 4 | -4 | |||
Issuance of restricted stock awards, shares | 487 | ||||
Common stock reacquired and retired | -1 | -13,559 | -13,560 | ||
Common stock reacquired and retired, shares | -123 | ||||
Restricted stock forfeited and retired | -1 | 1 | |||
Restricted stock forfeited and retired, shares | -135 | ||||
Exercise of stock options | 2 | 11,896 | 11,898 | ||
Exercise of stock options, shares | 211 | ||||
Stock-based compensation | 28,633 | 28,633 | |||
Balance at Dec. 31, 2014 | $876 | $1,997,080 | $2,501,574 | $1,102 | $4,500,632 |
Balance, shares at Dec. 31, 2014 | 87,592 |
BASIS_OF_PRESENTATION_AND_SUMM
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2014 | |
Basis of Presentation | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Cimarex Energy Co., a Delaware corporation, is an independent oil and gas exploration and production company. Our operations are mainly located in Texas, Oklahoma and New Mexico. | |
Basis of presentation | |
Our Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. Our significant accounting policies are discussed below. The accounts of Cimarex and its subsidiaries are presented in the accompanying Consolidated Financial Statements. All intercompany accounts and transactions were eliminated in consolidation. | |
Segment Information | |
We have determined that our business is comprised of only one segment because our gathering, processing and marketing activities are ancillary to our production operations and are not separately managed. | |
Use of estimates | |
The preparation of our financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. The more significant areas requiring the use of management’s estimates and judgments relate to the estimation of proved oil and gas reserves, the use of these oil and gas reserves in calculating depletion, depreciation, and amortization (DD&A), the use of the estimates of future net revenues in computing ceiling test limitations and estimates of future abandonment obligations used in recording asset retirement obligations, and the assessment of goodwill. | |
The process of estimating quantities of oil and gas reserves is complex, requiring significant decisions in the evaluation of all available geological, geophysical, engineering and economic data. The data for a given field may also change substantially over time as a result of numerous factors including, but not limited to, additional development activity, evolving production history and continual reassessment of the viability of production under varying economic conditions. As a result, material revisions to existing reserve estimates may occur from time to time. Although every reasonable effort is made to ensure that our reserve estimates represent the most accurate assessments possible, subjective decisions and available data for our various fields make these estimates generally less precise than other estimates included in financial statement disclosures. | |
Estimates and judgments are also required in determining allowance for doubtful accounts, impairments of undeveloped properties and other assets, purchase price allocation, valuation of deferred tax assets, fair value measurements, and commitments and contingencies. We analyze our estimates, including those related to oil, gas and NGL revenues, and base our estimates 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. | |
Cash and Cash Equivalents | |
Cash and cash equivalents consist of cash in banks and investments readily convertible into cash, which have original maturities of three months or less. Cash equivalents are stated at cost, which approximates market value. | |
Oil and Gas Well Equipment and Supplies | |
Our oil and gas well equipment and supplies are valued at the lower of cost or market using weighted average cost. The steep decline in oil, gas and NGL prices has resulted in fewer drilling rigs running in the United States as companies cut back on their capital expenditures. Through the first part of February 2015, published oil rig counts are at their lowest since December 2011. The effect of lower exploration and development activity, and thus lower demand, will create downward pressure on the price of oil and gas well equipment and supplies. GAAP requires that these assets are to be carried at the lower of cost or market. Declines in prices related to our oil and gas well equipment and supplies will likely result in impairments in future quarters. | |
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. Exploration and development costs include dry hole costs, geological and geophysical costs, direct overhead related to exploration and development activities, and other costs incurred for the purpose of finding oil and gas reserves. Salaries and benefits paid to employees directly involved in the exploration and development of properties, as well as other internal costs that can be directly identified with acquisition, exploration, and development activities, are also capitalized. Under the full cost method of accounting, no gain or loss is recognized upon the disposition of oil and gas properties unless such disposition would significantly alter the relationship between capitalized costs and proved reserves. | |
Companies that follow the full cost accounting method are required to make quarterly ceiling test calculations. This test ensures that total capitalized costs for oil and gas properties (net of accumulated DD&A and deferred income taxes) do not exceed the sum of the present value discounted at 10% of estimated future net cash flows from proved reserves, the cost of properties not being amortized, the lower of cost or estimated fair value of unproven properties included in the costs being amortized, and all related tax effects. We currently do not have any unproven properties that are being amortized. Revenue calculations in the reserves are based on the unweighted average first-day-of-the-month prices for the prior 12 months. Changes in proved reserve estimates (whether based upon quantity revisions or commodity prices) will cause corresponding changes to the full cost ceiling limitation. If net capitalized costs subject to amortization exceed this limit, the excess would be charged to expense. Any recorded impairment of oil and gas properties is not reversible at a later date. | |
Our quarterly and annual ceiling tests are primarily impacted by commodity prices, reserve quantities added and produced, overall exploration and development costs and depletion expense. As of December 31, 2014, the calculated value of the ceiling limitation exceeded the carrying value of our oil and gas properties subject to the test and no impairment was necessary. However, a decline of 8% or more in the value of the ceiling limitation would have resulted in an impairment. If commodity prices stay at the current early 2015 levels or decline further, we will incur full cost ceiling impairments in future quarters. Because the ceiling calculation uses rolling 12-month average commodity prices, the effect of lower quarter-over-quarter prices in 2015 compared to 2014 is a lower ceiling value each quarter. This will result in ongoing impairments each quarter until prices stabilize or improve. Impairment charges would not affect cash flow from operating activities, but would adversely affect our net income and stockholders’ equity. | |
Depletion of proved oil and gas properties is computed on the units- of-production method, whereby capitalized costs, including future development costs and asset retirement obligations, are amortized over total estimated proved reserves. Changes in our estimate of proved reserve quantities, commodity prices and impairment of oil and gas properties will cause corresponding changes in depletion expense in periods subsequent to these changes. | |
The capitalized costs of unproved properties, including those in wells in progress, are excluded from the costs being amortized. We do not have major development projects that are excluded from costs being amortized. On a quarterly basis, we evaluate excluded costs for inclusion in the costs to be amortized resulting from the determination of proved reserves or impairments. To the extent that the evaluation indicates these properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized. Expenditures for maintenance and repairs are charged to production expense in the period incurred. | |
Fixed assets, net | |
Fixed assets consist primarily of gathering and plant facilities, vehicles, airplanes, office furniture, and computer equipment and software. These items are recorded at cost and are depreciated on the straight-line method based on expected lives of the individual assets, which range from 3 to 30 years. | |
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. We first assess qualitative factors to determine whether it is more likely than not (with a greater than 50% threshold) that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. If goodwill is determined to be impaired then it is written down to a calculated fair value by charging the impairment to expense. | |
We evaluate our goodwill for impairment in the fourth quarter of each year or whenever events or changes in circumstances indicate the possibility that goodwill may be impaired. Based upon our qualitative assessment at December 31, 2014, goodwill was not impaired. It is possible that goodwill could become impaired in the future if commodity prices or other economic factors become less favorable. | |
Revenue Recognition | |
Oil, Gas and NGL Sales | |
Revenue is recorded from the sales of oil, gas and NGLs when the product is delivered at a fixed or determinable price, title has transferred and collectability is reasonably assured. There is a ready market for our products and sales occur soon after production. | |
Under certain contracts, when NGLs are extracted from the gas stream, processors receive a portion of the sales value from both the residue gas and the NGLs as a processing fee and remit the contractual proceeds to us. Prior to 2014, revenue was recognized net of these processing fees for residue gas and NGLs sold under these contracts as allowed under EITF 00-10 Accounting for Shipping and Handling Fees and Costs. Increasing NGL production combined with the impact of recent changes to these contracts has resulted in processing costs becoming more significant. Accordingly, we have changed our policy to record these processing costs with operating costs as allowed under EITF 00-10. Beginning in 2014, our realized prices for sales under these contracts reflect the value of 100% of the residue gas and NGLs yielded by processing, rather than the value associated with the contractual proceeds we received. The related processing fees now are included in “transportation, processing and other operating” costs. The effect of this change in 2014 was that total revenue was $51.4 million higher with an offsetting increase in total transportation, processing and other operating costs. There was no impact on operating income. Financial statements for periods prior to 2014 have not been reclassified to reflect this change in accounting treatment as it was impracticable to do so. | |
Marketing Sales | |
We market and sell natural gas for working interest owners under short term sales and supply agreements and earn a fee for such services. Revenues are recognized as gas is delivered and are reflected net of gas purchases on the consolidated statements of income and comprehensive income. | |
Gas Imbalances | |
We use the sales method of accounting for gas imbalances. Under this method, revenue is recorded on the basis of gas actually sold. Gas reserves are adjusted to the extent there are sufficient quantities of natural gas to make up an imbalance. A liability is established in situations where there are insufficient proved reserves available to make-up an overproduced imbalance. Imbalances have not been significant in the periods presented. | |
General and Administrative Expenses | |
General and administrative expenses are reported net of amounts reimbursed by working interest owners of the oil and gas properties operated by Cimarex and net of amounts capitalized pursuant to the full cost method of accounting. | |
Derivatives | |
Our derivative contracts are recorded on the balance sheet at fair value. Our firm sales contracts qualify for the normal purchase and normal sale exception. Contracts that qualify for this treatment do not require mark-to-market accounting treatment. See Note 5 for additional information regarding our derivative instruments. | |
Income Taxes | |
Cimarex records deferred tax assets and liabilities to account for the expected future tax consequences of events that have been recognized in the financial statements and tax returns. The company routinely assesses the realizability of its deferred tax assets. If the company concludes that it is more likely than not that some or all of the deferred tax assets will not be realized, the tax asset is reduced by a valuation allowance. Numerous judgments and assumptions are inherent in the determination of future taxable income, including factors such as future operating conditions (particularly as related to prevailing oil and gas prices) and changing tax laws. | |
The company regularly assesses and, if required, establishes accruals for tax contingencies that could result from assessments of additional tax by taxing jurisdictions where the company operates. See Note 10 for additional information regarding our income taxes. | |
Contingencies | |
A provision for contingencies is charged to expense when the loss is probable and the cost can be reasonably estimated. Determining when expenses should be recorded for these contingencies and the appropriate amounts for accrual is a complex estimation process that includes subjective judgment. In many cases, this judgment is based on interpretation of laws and regulations, which can be interpreted differently by regulators and/or courts of law. We closely monitor known and potential legal, environmental, and other contingencies and periodically determine when we should record losses for these items based on information available to us. See Note 11 for additional information regarding our contingencies. | |
Asset Retirement Obligations | |
We recognize the fair value of liabilities for retirement obligations associated with tangible long-lived assets in the period in which there is a legal obligation associated with the retirement of such assets and the amount can be reasonably estimated. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. This liability includes costs related to the abandonment of wells, the removal of facilities and equipment, and site restorations. Subsequent to initial measurement, the asset retirement liability is required to be accreted each period. If the fair value of a recorded asset retirement obligation changes, a revision is recorded to both the asset retirement obligation and the asset retirement capitalized cost. Capitalized costs are included as a component of the DD&A calculations. The current portions of the asset retirement obligations are recorded in “accrued liabilities, other” in the accompanying consolidated balance sheets and expenditures are classified as cash used in operating activities in the accompanying consolidated statements of cash flows. See Note 9 for additional information regarding our asset retirement obligations. | |
Stock-based Compensation | |
We recognize compensation related to all stock-based awards, including stock options, in the financial statements based on their estimated grant-date fair value. We grant various types of stock-based awards including stock options, restricted stock (including awards with service-based vesting and market condition-based vesting provisions) and restricted stock units. The fair value of stock option awards is determined using the Black-Scholes option pricing model. Service-based restricted stock and units are valued using the market price of our common stock on the grant date. The fair value of the market condition-based restricted stock is based on the grant-date market value of the award utilizing a statistical analysis. Compensation cost is recognized ratably over the applicable vesting period. To the extent compensation cost relates to employees directly involved in oil and gas acquisition, exploration and development activities, such amounts are capitalized to oil and gas properties. Amounts not capitalized to oil and gas properties are recognized as stock compensation expense. See Note 7 for additional information regarding our stock-based compensation. | |
Earnings per Share | |
We calculate earnings (loss) per share recognizing that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are “participating securities” and therefore should be included in computing earnings per share using the two-class earnings allocation method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Our unvested share based payment awards, consisting of restricted stock and units qualify as participating securities. See Note 8 for additional information regarding our earnings per share. | |
Recently Issued Accounting Standards | |
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance in this update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. We must comply with this ASU beginning in fiscal year 2017 and early adoption is not permitted. Entities can choose to apply the standard using either the full retrospective approach or a modified retrospective approach. We are currently evaluating the potential impact of this guidance, but at this time, do not expect that the adoption of this standard will have a material effect on our financial position or results of operation. | |
Subsequent Events | |
The accompanying financial disclosures include an evaluation of subsequent events through the date of this filing. | |
LONGTERM_DEBT
LONG-TERM DEBT | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Long-Term Debt | |||||||
Long-Term Debt | 2. LONG-TERM DEBT | ||||||
A summary of our debt is as follows: | |||||||
December 31, | |||||||
(in thousands) | 2014 | 2013 | |||||
Bank debt | $ | — | $ | 174,000 | |||
5.875% Senior Notes, due May 1, 2022 | 750,000 | 750,000 | |||||
4.375% Senior Notes, due June 1, 2024 | 750,000 | — | |||||
Total long-term debt | $ | 1,500,000 | $ | 924,000 | |||
All of our long-term debt is senior unsecured debt and is, therefore, pari passu with respect to the payment of both principal and interest. | |||||||
Bank Debt | |||||||
In May 2014, we amended our senior unsecured revolving credit facility (Credit Facility) to extend the maturity date two years to July 14, 2018 and lowered the margins applicable to loans and commitments. The amendment also raised our borrowing base from $2.25 billion to $2.5 billion until the next regular annual redetermination date scheduled for April 15, 2015. The borrowing base under the Credit Facility is determined at the discretion of the lenders based on the value of our proved reserves. Our aggregate commitments remained unchanged at $1 billion. | |||||||
As of December 31, 2014, we had letters of credit outstanding under the Credit Facility of $2.5 million, leaving an unused borrowing availability of $997.5 million. | |||||||
At our option, borrowings under the Credit Facility, as amended in May 2014, may bear interest at either (a) LIBOR plus 1.5 - 2.25%, based on our leverage ratio, or (b) the higher of (i) a prime rate, (ii) the federal funds effective rate plus 0.50%, or (iii) adjusted one-month LIBOR plus 1.0% plus, in each case, an additional 0.5 - 1.25%, based on our leverage ratio. | |||||||
The Credit Facility also has financial covenants that include the maintenance of current assets (including unused bank commitments) to current liabilities of greater than 1.0. We also must maintain a leverage ratio of total debt to earnings before interest expense, income taxes and non-cash items (such as depreciation, depletion and amortization expense, unrealized gains and losses on commodity derivatives, ceiling test write-downs, and goodwill impairments) of not more than 3.5. Other covenants could limit our ability to incur additional indebtedness, pay dividends, repurchase our common stock, or sell assets. As of December 31, 2014, we were in compliance with all of the financial and non-financial covenants. | |||||||
Senior Notes | |||||||
In June 2014, we issued $750 million of 4.375% senior notes due 2024 and received net proceeds of $740.9 million, after deducting offering discounts and costs. The net proceeds were used to pay outstanding bank debt and for general corporate purposes. | |||||||
In April 2012, we issued $750 million of 5.875% senior notes due 2022 and received net proceeds of $737.0 million, after deducting underwriting discounts and offering costs. We used a portion of the net proceeds to retire our 7.125% senior notes and the remaining proceeds were used to pay outstanding bank debt and for general corporate purposes. | |||||||
In the second quarter of 2012, we completed a cash tender offer to purchase all of our outstanding 7.125% senior notes. We recognized a $16.2 million loss on early extinguishment of debt during the second quarter of 2012. | |||||||
Each of our outstanding senior notes is governed by an indenture containing certain covenants, events of default and other restrictive provisions. Interest on each of the senior notes is payable semi-annually. | |||||||
PROPERTY_SALES_AND_ACQUISITION
PROPERTY SALES AND ACQUISITIONS | 12 Months Ended |
Dec. 31, 2014 | |
Property Acquisitions and Sales | |
Property Acquisitions and Sales | 3. PROPERTY SALES AND ACQUISITIONS |
The following sales and acquisitions were made in the ordinary course of business. All amounts are net of customary purchase price adjustments. | |
We sold interests in various non-core oil and gas properties for $446.1 million during 2014. Most of the proceeds were related to sales of producing gas wells in southwestern Kansas and undeveloped acreage in Reagan County, Texas. During 2014, we made property acquisitions totaling $249.7 million, most of which were in our Cana-Woodford shale play in Western Oklahoma. | |
In 2013, we sold interests in non-core oil and gas assets for $61.5 million. During the second quarter of 2013, we also sold a 50% interest in our Culberson County, Texas Triple Crown gas gathering and processing system for approximately $31 million. Total property acquisitions during 2013 were $37.1 million, mostly for undeveloped acreage in Reeves County, Texas. | |
During 2012, we sold interests in non-core oil and gas assets for $306 million. Of this total, $290 million was related to non-core oil and gas assets located in Texas. We had property acquisitions of $33.5 million during 2012, most of which were undeveloped acreage in the Permian Basin. | |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Fair Value Measurements | |||||||
Fair Value Measurements | 4. FAIR VALUE MEASUREMENTS | ||||||
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The FASB has established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels. Level 1 inputs are the highest priority and consist of unadjusted quoted prices in active markets for identical assets and liabilities. Level 2 are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level 3 are unobservable inputs for an asset or liability. | |||||||
The following tables provide fair value measurement information for certain assets and liabilities as of December 31, 2014 and 2013. | |||||||
December 31, 2014: | Carrying | Fair | |||||
(in thousands) | Amount | Value | |||||
Financial Assets (Liabilities): | |||||||
5.875% Notes due 2022 | $ | -750,000 | $ | -776,250 | |||
4.375% Notes due 2024 | $ | -750,000 | $ | -720,000 | |||
December 31, 2013: | Carrying | Fair | |||||
(in thousands) | Amount | Value | |||||
Financial Assets (Liabilities): | |||||||
Bank debt | $ | -174,000 | $ | -174,000 | |||
5.875% Notes due 2022 | $ | -750,000 | $ | -799,988 | |||
Derivative instruments — assets | $ | 4,268 | $ | 4,268 | |||
Derivative instruments — liabilities | $ | -389 | $ | -389 | |||
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 following methods and assumptions were used to estimate the fair value of the liabilities in the table above. | |||||||
Debt (Level 1) | |||||||
The fair value of our bank debt at December 31, 2013 was estimated to approximate the carrying amount because the floating rate interest paid on such debt was set for periods of three months or less. | |||||||
The fair value for our 4.375% and 5.875% fixed rate notes was based on their last traded value before year end. | |||||||
Derivative Instruments (Level 2) | |||||||
The fair value of our derivative instruments was estimated using internal discounted cash flow calculations. Cash flows are based on the stated contract prices and current and published forward commodity price curves, adjusted for volatility. The cash flows are risk adjusted relative to non-performance for both our counterparties and our liability positions. Please see Note 5 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 December 31, 2014 and 2013, respectively, are liabilities of approximately $42.0 million and $43.7 million representing the amount by which checks issued, but not yet presented to our banks for collection, exceeded balances in applicable bank accounts. Also included in “accrued liabilities, other” at December 31, 2014 and 2013, respectively, are accrued payroll related general and administrative expenses of $44.2 million and $41.9 million. | |||||||
Our accounts receivable are primarily from either purchasers of our gas, oil and NGL production (customers) or from exploration and production companies which own interests in properties we operate. This industry concentration has the potential to impact our overall exposure to credit risk, either positively or negatively, because our customers and joint working interest owners may be similarly affected by changes in industry conditions. | |||||||
We conduct credit analyses prior to making any sales to new customers or increasing credit for existing customers and may require parent company guarantees, letters of credit or prepayments when deemed necessary. | |||||||
We routinely assess the recoverability of all material accounts receivable to determine their collectability. We accrue a reserve to the allowance for doubtful accounts when it is probable that a receivable will not be collected and the amount of the reserve may be reasonably estimated. At December 31, 2014, the allowance for doubtful accounts totaled $1.5 million. At December 31, 2013, the allowance for doubtful accounts was $6.0 million. | |||||||
Major Customers | |||||||
Our major customers during 2014 were Enterprise Products Partners L.P. (Enterprise), Sunoco Logistics Partners L.P. (Sunoco) and Oneok Partners, L.P. (Oneok). Enterprise and Sunoco each accounted for 19% of our consolidated revenues in 2014. Oneok accounted for 10% of our 2014 consolidated revenues. During 2013, Enterprise and Sunoco were our major customers and accounted for 24% and 22% of our consolidated revenues, respectively. | |||||||
Enterprise is a significant oil purchaser in Oklahoma and West Texas. Sunoco is a significant purchaser of our oil in Southeast New Mexico and Canadian County, Oklahoma. If either of these entities were to stop purchasing our production, we believe there are a number of other purchasers to whom we could sell our production with some delay. If both parties were to discontinue purchasing our product, there would be challenges initially, but ample markets to handle the disruption. | |||||||
Oneok primarily purchases our NGLs and provides gathering, compression and processing services for the majority of our Mid-Continent region gas production. In the event Oneok ceased buying our NGLs, a minimal impact would occur as these products are piped to various processing and storage market areas where we could sell to a different purchaser. In the event Oneok ceased gathering, compressing, and processing our gas, there would be challenges initially, but several other entities exist to fill in the gap. | |||||||
DERIVATIVE_INSTRUMENTSHEDGING
DERIVATIVE INSTRUMENTS/HEDGING | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Derivative Instruments/Hedging | ||||||||||
Derivative Instruments/Hedging | 5. DERIVATIVE INSTRUMENTS/HEDGING | |||||||||
We periodically enter into derivative instruments to mitigate a portion of our potential exposure to a decline in commodity prices and the corresponding negative impact on cash flow available for reinvestment. While the use of these instruments limits the downside risk of adverse price changes, their use may also limit future revenues from favorable price changes. | ||||||||||
We have elected not to account for our derivatives as cash flow hedges. Therefore, we recognize settlements and changes in the assets or liabilities relating to our open derivative contracts in earnings. Cash settlements of our contracts are included in cash flows from operating activities in our statements of cash flows. | ||||||||||
The following table presents the net gains and (losses) from settlements and changes in fair value of our derivative contracts, and the gains (losses) only from settlements during the periods shown below. | ||||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||||
Gain (loss) on derivative instruments, net | $ | 3,762 | $ | -209 | $ | 245 | ||||
Settlement gains (losses) | $ | 7,641 | $ | -4,088 | $ | — | ||||
Our derivative contracts are carried at their fair value on our balance sheet using Level 2 inputs and are subject to enforceable master netting arrangements, which allow us to offset recognized asset and liability fair value amounts on contracts with the same counterparty. Our policy is to not offset asset and liability positions in our accompanying balance sheets. We entered into oil and gas contracts at the end of 2013 and the beginning of 2014. All of these contracts were settled as of December 31, 2014 and we have not entered into any new contracts. Depending on oil and gas futures markets and management’s view of underlying supply and demand trends, we may hedge in the future. | ||||||||||
The following table presents the amounts and classifications of our derivative assets and liabilities as of December 31, 2013, as well as the potential effect of netting arrangements on contracts with the same counterparty. | ||||||||||
December 31, 2013: | ||||||||||
(in thousands) | Balance Sheet Location | Asset | Liability | |||||||
Oil contracts | Current assets — Derivative instruments | $ | 1,805 | $ | — | |||||
Natural gas contracts | Current assets — Derivative instruments | 2,463 | — | |||||||
Oil contracts | Current liabilities — Derivative instruments | — | 389 | |||||||
Total gross amounts presented in accompanying balance sheet | 4,268 | 389 | ||||||||
Less: gross amounts not offset in the accompanying balance sheet | -389 | -389 | ||||||||
Net amount: | $ | 3,879 | $ | — | ||||||
We were exposed to financial risks associated with our derivative contracts from non-performance by our counterparties. We mitigated our exposure to any single counterparty by contracting with a number of financial institutions, each of which had a high credit rating and was a member of our bank credit facility. Our member banks do not require us to post collateral for our hedge liability positions. Because some of the member banks have discontinued hedging activities, in the future we may hedge with counterparties outside our bank group to obtain competitive terms and to spread counterparty risk. | ||||||||||
CAPITAL_STOCK
CAPITAL STOCK | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Capital Stock | ||||||||||
Capital Stock | 6. CAPITAL STOCK | |||||||||
Authorized capital stock consists of 200 million shares of common stock and 15 million shares of preferred stock. At December 31, 2014, there were no shares of preferred stock outstanding. See our Consolidated Statements of Stockholders’ Equity for detailed capital stock activity. | ||||||||||
Dividends | ||||||||||
A cash dividend has been paid to stockholders in every quarter since the first quarter of 2006. In February 2014, the quarterly dividend was increased to $0.16 per share from $0.14 per share. Future dividend payments will depend on our level of earnings, financial requirements and other factors considered relevant by the Board of Directors. | ||||||||||
2014 | 2013 | 2012 | ||||||||
Dividend declared (in millions) | $ | 55.7 | $ | 48.4 | $ | 41.3 | ||||
Dividend per share | $ | 0.64 | $ | 0.56 | $ | 0.48 | ||||
STOCKBASED_and_OTHER_COMPENSAT
STOCK-BASED and OTHER COMPENSATION | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
STOCK-BASED AND OTHER COMPENSATION | ||||||||||||||||
Stock-based compensation and other compensation | 7. STOCK-BASED and OTHER COMPENSATION | |||||||||||||||
We have recognized non-cash stock-based compensation cost as follows: | ||||||||||||||||
Years Ended December 31, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||||||||||
Performance stock awards | $ | 12,141 | $ | 11,105 | $ | 19,066 | ||||||||||
Service-based stock awards | 13,607 | 12,018 | 12,231 | |||||||||||||
Restricted stock awards | 25,748 | 23,123 | 31,297 | |||||||||||||
Stock option awards | 3,057 | 3,145 | 2,889 | |||||||||||||
28,805 | 26,268 | 34,186 | ||||||||||||||
Less amounts capitalized to oil and gas properties | -13,804 | -11,989 | -12,267 | |||||||||||||
Compensation expense | $ | 15,001 | $ | 14,279 | $ | 21,919 | ||||||||||
Historical amounts may not be representative of future amounts as additional awards may be granted. The 2012 compensation cost for the performance awards includes $3.9 million of accelerated vesting related to the death of former Chairman, F.H. Merelli. In addition, the 2013 cost for performance awards is approximately $4.3 million lower than 2012 costs due to the timing of awards granted. Almost all of the performance awards granted in 2013 were awarded in mid-December. Awards granted in early January of 2010 were fully amortized in January of 2013, resulting in 2013 having less costs amortized during the year. | ||||||||||||||||
Equity Incentive Plan | ||||||||||||||||
Our 2014 Equity Incentive Plan (the 2014 Plan) was approved by stockholders in May 2014 and our previous plan was terminated at that time. Outstanding awards under the previous plan were not impacted. A total of 6.6 million shares of common stock may be issued under the 2014 Plan, including shares available from the previous plan. The primary purposes of the 2014 Plan are to increase the number of shares available in connection with awards, provide flexibility in the types of available awards and design of awards, modify certain individual award limits and revise the performance measures for qualified performance-based awards. The 2014 Plan provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, dividend equivalents and other stock-based awards. | ||||||||||||||||
Restricted Stock | ||||||||||||||||
The following table provides information about restricted stock awards granted during the last three years. | ||||||||||||||||
Years Ended December 31, | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||
Average | Average | Average | ||||||||||||||
Number | Grant-Date | Number | Grant-Date | Number | Grant-Date | |||||||||||
of Shares | Fair Value | of Shares | Fair Value | of Shares | Fair Value | |||||||||||
Performance stock awards | 316,441 | $ | 83.22 | 298,000 | $ | 77.75 | 262,770 | $ | 43.22 | |||||||
Service-based stock awards | 170,402 | $ | 136.72 | 281,236 | $ | 72.89 | 299,499 | $ | 54.17 | |||||||
Total restricted stock awards | 486,843 | $ | 101.95 | 579,236 | $ | 75.39 | 562,269 | $ | 49.05 | |||||||
Performance awards were granted to eligible executives and are subject to market condition-based vesting determined by our stock price performance relative to a defined peer group’s stock price performance. After three years of continued service, an executive will be entitled to vest in 50% to 100% of the award. In accordance with Internal Revenue Code Section 162(m), certain of the amounts awarded may not be deductible for tax purposes. Service-based stock awards granted to other eligible employees and non-employee directors have vesting schedules of three to five years. | ||||||||||||||||
Compensation cost for the performance stock awards is based on the grant-date fair value of the award utilizing a Monte Carlo simulation model. Compensation cost for the service-based vesting restricted shares is based upon the grant-date market value of the award. Such costs are recognized ratably over the applicable vesting period. | ||||||||||||||||
The following table provides information on restricted stock activity during the year. | ||||||||||||||||
Performance | ||||||||||||||||
Service-based | (subject to market conditions) | |||||||||||||||
Weighted | Weighted | |||||||||||||||
Average | Average | |||||||||||||||
Grant-Date | Grant-Date | |||||||||||||||
Awards | Fair Value | Awards | Fair Value | |||||||||||||
Outstanding beginning of period | 1,035,032 | $ | 68.41 | 828,802 | $ | 65.27 | ||||||||||
Vested | -106,817 | $ | 37.91 | -195,664 | $ | 73.01 | ||||||||||
Granted | 170,402 | $ | 136.72 | 316,441 | $ | 83.22 | ||||||||||
Canceled | -62,200 | $ | 69.91 | -72,368 | $ | 73.01 | ||||||||||
Outstanding end of period | 1,036,417 | $ | 82.69 | 877,211 | $ | 69.38 | ||||||||||
The total fair value of restricted stock that vested was $34.1 million in 2014, $25.7 million in 2013, and $36.0 million in 2012. | ||||||||||||||||
Unrecognized compensation cost related to unvested restricted shares at December 31, 2014 was $83.9 million. We expect to recognize that cost over a weighted average period of 2.2 years. | ||||||||||||||||
Restricted Units | ||||||||||||||||
As of December 31, 2014 and 2013, we had 8,838 restricted units outstanding. These represent restricted units held by a non-employee director who has elected to defer payment of common stock represented by the units until termination of his service on the Board of Directors. | ||||||||||||||||
Stock Options | ||||||||||||||||
Options that have been granted under the 2014 plan and previous plans expire seven to ten years from the grant date and have service-based vesting schedules of three to five years. The exercise price for an option under the 2014 plan is the closing price of our common stock as reported by the New York Stock Exchange (NYSE) on the date of grant. The previous plans provided that all grants have an exercise price of the average of the high and low prices of our common stock as reported by the NYSE on the date of grant. | ||||||||||||||||
Compensation cost related to stock options is based on the grant-date fair value of the award, recognized ratably over the applicable vesting period. We estimate the fair value using the Black-Scholes option-pricing model. Expected volatilities are based on the historical volatility of our common stock. We also use historical data to estimate the probability of option exercise, expected years until exercise and potential forfeitures. We use U.S. Treasury bond rates in effect at the grant date for our risk-free interest rates. | ||||||||||||||||
The following summarizes the options granted and related information, and the assumptions used to determine the fair value of those options. | ||||||||||||||||
Years Ended December 31, | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Options granted | 82,500 | 144,400 | 152,800 | |||||||||||||
Weighted average grant-date fair value | $ | 41.69 | $ | 21.64 | $ | 20.55 | ||||||||||
Weighted average exercise price | $ | 139.02 | $ | 72.25 | $ | 51.92 | ||||||||||
Total Fair Value (in thousands) | $ | 3,439 | $ | 3,125 | $ | 3,140 | ||||||||||
Expected years until exercise | 4.0 | 4.0 | 5.3 | |||||||||||||
Expected stock volatility | 36.7 | % | 38.6 | % | 47.4 | % | ||||||||||
Dividend yield | 0.5 | % | 0.8 | % | 0.9 | % | ||||||||||
Risk-free interest rate | 1.8 | % | 1.4 | % | 0.6 | % | ||||||||||
Information about outstanding stock options is summarized below. | ||||||||||||||||
Weighted | Weighted | Aggregate | ||||||||||||||
Average | Average | Intrinsic | ||||||||||||||
Exercise | Remaining | Value | ||||||||||||||
Options | Price | Term | (in thousands) | |||||||||||||
Outstanding as of January 1, 2014 | 531,016 | $ | 59.78 | |||||||||||||
Exercised | -211,258 | $ | 56.32 | |||||||||||||
Granted | 82,500 | $ | 139.02 | |||||||||||||
Forfeited | -18,176 | $ | 70.67 | |||||||||||||
Outstanding as of December 31, 2014 | 384,082 | $ | 78.19 | 5.0 | Years | $ | 13,260 | |||||||||
Exercisable as of December 31, 2014 | 178,926 | $ | 59.19 | 4.1 | Years | $ | 8,319 | |||||||||
The following table provides information regarding options exercised and the grant-date fair value of options vested. | ||||||||||||||||
Years Ended December 31, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||||||||||
Number of options exercised | 211,258 | 276,069 | 558,419 | |||||||||||||
Cash received from option exercises | $ | 11,899 | $ | 14,494 | $ | 11,433 | ||||||||||
Tax benefit from option exercises included in paid-in-capital (1) | $ | — | $ | — | $ | 76 | ||||||||||
Intrinsic value of options exercised | $ | 15,384 | $ | 10,109 | $ | 22,482 | ||||||||||
Grant-date fair value of options vested | $ | 4,419 | $ | 2,521 | $ | 2,560 | ||||||||||
-1 | No tax benefit is recorded until the benefit reduces current taxes payable. | |||||||||||||||
The following summary reflects the status of non-vested stock options as of December 31, 2014 and changes during the year. | ||||||||||||||||
Weighted | Weighted | |||||||||||||||
Average | Average | |||||||||||||||
Grant-Date | Exercise | |||||||||||||||
Options | Fair Value | Price | ||||||||||||||
Non-vested as of January 1, 2014 | 343,014 | $ | 21.64 | $ | 63.81 | |||||||||||
Vested | -202,182 | $ | 21.86 | $ | 62.48 | |||||||||||
Granted | 82,500 | $ | 41.69 | $ | 139.02 | |||||||||||
Forfeited | -18,176 | $ | 23.24 | $ | 70.67 | |||||||||||
Non-vested as of December 31, 2014 | 205,156 | $ | 29.35 | $ | 94.76 | |||||||||||
As of December 31, 2014, there was $4.1 million of unrecognized compensation cost related to non-vested stock options. We expect to recognize that cost on a pro rata basis over a weighted average period of 1.8 years. | ||||||||||||||||
Other Compensation | ||||||||||||||||
We maintain and sponsor a contributory 401(k) plan for our employees. Annual costs related to the plan were $11.0 million for 2014. During 2013 and 2012, such costs were $9.0 million and $8.2 million, respectively. | ||||||||||||||||
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Earnings per Share | ||||||||||
Earnings per Share | 8. EARNINGS PER SHARE | |||||||||
The calculations of basic and diluted net earnings per common share under the two-class method are presented below. | ||||||||||
Years Ended December 31, | ||||||||||
(in thousands, except per share data) | 2014 | 2013 | 2012 | |||||||
Basic: | ||||||||||
Net income | $ | 507,204 | $ | 564,689 | $ | 353,823 | ||||
Participating securities’ share in earnings | -9,906 | -11,091 | -6,753 | |||||||
Net income applicable to common stockholders | $ | 497,298 | $ | 553,598 | $ | 347,070 | ||||
Diluted: | ||||||||||
Net income | $ | 507,204 | $ | 564,689 | $ | 353,823 | ||||
Participating securities’ share in earnings | -9,891 | -11,076 | -6,732 | |||||||
Net income applicable to common stockholders | $ | 497,313 | $ | 553,613 | $ | 347,091 | ||||
Shares: | ||||||||||
Basic shares outstanding | 85,679 | 85,288 | 84,757 | |||||||
Incremental shares from assumed exercise of stock options | 131 | 121 | 277 | |||||||
Fully diluted common stock | 85,810 | 85,409 | 85,034 | |||||||
Excluded (1) | 94 | 251 | 414 | |||||||
Earnings per share to common stockholders (2): | ||||||||||
Basic | $ | 5.79 | $ | 6.48 | $ | 4.08 | ||||
Diluted | $ | 5.78 | $ | 6.47 | $ | 4.07 | ||||
-1 | Inclusion of certain outstanding stock options would have an anti-dilutive effect. | |||||||||
-2 | Earnings per share are based on actual figures rather than the rounded figures presented. | |||||||||
ASSET_RETIREMENT_OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Asset Retirement Obligations | |||||||
Asset Retirement Obligations | 9. ASSET RETIREMENT OBLIGATIONS | ||||||
The following table reflects the components of the change in the carrying amount of the asset retirement obligation for the years ended December 31, 2014 and 2013. | |||||||
(in thousands) | 2014 | 2013 | |||||
Asset retirement obligation at January 1, | $ | 154,026 | $ | 185,138 | |||
Liabilities incurred | 13,015 | 5,547 | |||||
Liability settlements and disposals | -27,036 | -47,842 | |||||
Accretion expense | 7,583 | 7,871 | |||||
Revisions of estimated liabilities | 25,420 | 3,312 | |||||
Asset retirement obligation at December 31, | 173,008 | 154,026 | |||||
Less current obligation | 13,216 | 27,058 | |||||
Long-term asset retirement obligation | $ | 159,792 | $ | 126,968 | |||
During 2014, the liability settlements and disposals included $11.2 million related to properties that were sold. Also during this period we recognized revisions of estimated liabilities totaling $25.4 million, which were due to changes in abandonment cost and timing estimates. During 2013, the liability settlements and disposals included $4.4 million related to properties that were sold. | |||||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Income Taxes | ||||||||||
Income Taxes | 10. INCOME TAXES | |||||||||
Federal income tax expense (benefit) for the years presented differs from the amounts that would be provided by applying the U.S. Federal income tax rate, primarily due to the effect of state income taxes. The components of the provision for income taxes are as follows: | ||||||||||
Years Ended December 31, | ||||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||||
Current Taxes: | ||||||||||
Federal (benefit) | $ | — | $ | -381 | $ | -1,629 | ||||
State (benefit) | 404 | -308 | 140 | |||||||
404 | -689 | -1,489 | ||||||||
Deferred taxes: | ||||||||||
Federal | 282,729 | 315,165 | 199,459 | |||||||
State | 15,564 | 14,535 | 8,757 | |||||||
298,293 | 329,700 | 208,216 | ||||||||
$ | 298,697 | $ | 329,011 | $ | 206,727 | |||||
Reconciliations of the income tax expense calculated at the federal statutory rate of 35% to the total income tax expense are as follows: | ||||||||||
Years Ended December 31, | ||||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||||
Provision at statutory rate | $ | 282,066 | $ | 312,795 | $ | 196,192 | ||||
Effect of state taxes | 15,826 | 14,226 | 8,902 | |||||||
Domestic Production Activities allowance | — | — | 567 | |||||||
Other permanent differences | 805 | 1,990 | 1,066 | |||||||
Income tax expense | $ | 298,697 | $ | 329,011 | $ | 206,727 | ||||
The components of Cimarex’s net deferred tax liabilities are as follows: | ||||||||||
December 31, | ||||||||||
(in thousands) | 2014 | 2013 | ||||||||
Long-term: | ||||||||||
Assets: | ||||||||||
Stock compensation and other accrued amounts | $ | 26,527 | $ | 24,815 | ||||||
Net operating loss carryforward, net of valuation allowance | 218,584 | 207,282 | ||||||||
Credit carryforward | 4,068 | 4,068 | ||||||||
249,179 | 236,165 | |||||||||
Liabilities: | ||||||||||
Property, plant and equipment | -2,003,885 | -1,696,006 | ||||||||
Net, long-term deferred tax liability | -1,754,706 | -1,459,841 | ||||||||
Current: | ||||||||||
Assets: | ||||||||||
Other accrued amounts | 13,475 | 16,854 | ||||||||
13,475 | 16,854 | |||||||||
Net deferred tax liabilities | $ | -1,741,231 | $ | -1,442,987 | ||||||
At December 31, 2014, the company had a U.S. net tax operating loss carryforward of approximately $651.1 million, which would expire in years 2031 through 2034. We believe that the carryforward will be utilized before it expires. The company recorded an increase to its net operating loss carryforward at December 31, 2014 for certain state losses. A corresponding valuation allowance of $19.1 million was established since it is not more likely than not that these additional state net operating losses will be utilized before they expire. The amount of the U.S. net tax operating loss carryforward that will be recorded to equity when utilized to reduce taxes payable is $83.1 million. We also had an alternative minimum tax credit carryforward of approximately $4.1 million. | ||||||||||
At December 31, 2014 and 2013, we had no unrecognized tax benefits that would impact our effective rate and we have made no provisions for interest or penalties related to uncertain tax positions. The tax years 2011 through 2013 remain open to examination by the Internal Revenue Service of the United States. We file tax returns with various state taxing authorities which remain open to examination for the 2010 through 2013 tax years. | ||||||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies | ||||
Commitments and Contingencies | 11. COMMITMENTS AND CONTINGENCIES | |||
Lease Commitments | ||||
We have various commitments for office space and equipment under operating lease arrangements. Rent expense for the operating leases totaled $14.3 million in 2014. Rent expense was $13.2 million and $5.7 million for 2013 and 2012, respectively. The increases in rent expense over the periods were due to additional costs associated with office relocations and entering into new lease arrangements. | ||||
Shown below are future minimum cash payments required under these leases as of December 31, 2014. | ||||
(in thousands) | Operating | |||
Leases | ||||
2015 | $ | 10,166 | ||
2016 | 11,261 | |||
2017 | 10,789 | |||
2018 | 10,416 | |||
2019 | 10,522 | |||
Later years | 67,795 | |||
Total future minimum lease payments | $ | 120,949 | ||
Other Commitments | ||||
We have commitments of $207.7 million to finish drilling and completing wells in progress at December 31, 2014. We also have various commitments for drilling rigs. The total minimum expenditure commitments under these agreements are $51.7 million. | ||||
In New Mexico and Texas, we are constructing gathering facilities and pipelines. At December 31, 2014, we had commitments of $6.9 million relating to these construction projects. | ||||
At December 31, 2014, we had firm sales contracts to deliver approximately 30.8 Bcf of natural gas over the next 12 months. If this gas is not delivered, our financial commitment would be approximately $91.7 million. This commitment will fluctuate due to price volatility and actual volumes delivered. However, we believe no financial commitment will be due based on our current proved reserves and production levels. | ||||
We have other various transportation and delivery commitments in the normal course of business, which are not material individually or in the aggregate. | ||||
All of the noted commitments were routine and were made in the normal course of our business. | ||||
Litigation | ||||
In the normal course of business, we have various litigation matters. We assess the probability of estimable amounts related to litigation matters in accordance with guidance established by the FASB and adjust our accruals accordingly. Though some of the related claims may be significant, the resolution of them we believe, individually or in the aggregate, would not have a material adverse effect on our financial condition or results of operations after consideration of current accruals. | ||||
H.B. Krug, et al. versus H&P | ||||
In 2008, we recorded litigation expense of $119.6 million for the H.B. Krug, et al. v. Helmerich & Payne, Inc. (H&P) lawsuit, and began accruing additional post-judgment interest and costs for this case. | ||||
Over the years, the lawsuit has been disputed until December 13, 2013 when the Oklahoma Supreme Court reversed the Tulsa County District Court’s original judgment of $119.6 million and affirmed an alternative jury verdict for $3.65 million. It also remanded the case back to the trial court for consideration of potential prejudgment interest, attorney’s fees and cost awards. Accordingly, on December 31, 2013 we reduced the previously recognized litigation expense, which included related interest and costs, and the associated long-term liability by $142.8 million. | ||||
On April 1, 2014, Cimarex paid the Plaintiffs $15.8 million in satisfaction of the $3.65 million damages award, the post-judgment interest award and the payment in lieu of bond, all of which are now final and not appealable. On June 24, 2014, the trial court ruled the Plaintiffs were not entitled to prejudgment interest but were entitled to attorney’s fees and costs, the amount of which will be determined at a subsequent hearing. On July 31, 2014, the Plaintiffs appealed the trial court’s denial of prejudgment interest, which will be determined by the Oklahoma Supreme Court. The outcome of these remaining issues cannot be determined, and our current estimates and assessments likely will change, as a result of these future legal proceedings. | ||||
Hitch Enterprises, Inc. et al. v. Cimarex Energy Co. | ||||
On December 11, 2012, Cimarex entered into a preliminary resolution of the Hitch Enterprises, Inc., et al. v. Cimarex Energy Co., et al. (Hitch) litigation matter for $16.4 million. Hitch is a statewide royalty class action pending in the Federal District Court in Oklahoma City, Oklahoma. The settlement was reached at a mediation, which occurred after the parties began to exchange information, including damage analyses, on November 16, 2012. On July 2, 2013, the Court entered a judgment approving the parties’ settlement. The judgment became final and unappealable on August 2, 2013. Cimarex distributed the settlement proceeds pursuant to the Court’s order in September 2013 and the administration of the settlement is ongoing. In the fourth quarter of 2012, we accrued $16.4 million for this matter. | ||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2014 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 12. RELATED PARTY TRANSACTIONS |
Helmerich & Payne, Inc. (H&P) provides contract drilling services to Cimarex. Drilling costs of approximately $18.4 million were incurred by Cimarex related to such services for 2014. During 2013 and 2012, such costs were $17.0 million and $20.8 million, respectively. Hans Helmerich, a director of Cimarex, is Chairman of the Board of Directors of H&P. | |
Jerry Box, a director of Cimarex, was the non-executive Chairman of the Board of Newpark through May 2014. Certain subsidiaries of Newpark Resources, Inc. have provided various drilling services to Cimarex. Costs of such services were $0.6 million through May 2014. During 2013 and 2012, such costs were $3.5 million and $4.1 million, respectively. | |
SUPPLEMENTAL_DISCLOSURE_OF_CAS
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Supplemental Disclosure of Cash Flow Information: | ||||||||||
Supplemental Disclosure of Cash Flow Information: | 13. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||
Years Ended December 31, | ||||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||||
Cash paid during the period for: | ||||||||||
Interest expense (including capitalized amounts) | $ | 66,167 | $ | 50,754 | $ | 42,420 | ||||
Interest capitalized | $ | 32,623 | $ | 29,098 | $ | 30,255 | ||||
Income taxes | $ | 354 | $ | 205 | $ | 377 | ||||
Cash received for income taxes | $ | 460 | $ | 966 | $ | 49,754 | ||||
BASIS_OF_PRESENTATION_AND_SUMM1
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Basis of Presentation | |
Basis of presentation | Basis of presentation |
Our Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. Our significant accounting policies are discussed below. The accounts of Cimarex and its subsidiaries are presented in the accompanying Consolidated Financial Statements. All intercompany accounts and transactions were eliminated in consolidation. | |
Segment Information | Segment Information |
We have determined that our business is comprised of only one segment because our gathering, processing and marketing activities are ancillary to our production operations and are not separately managed. | |
Use of Estimates | Use of estimates |
The preparation of our financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. The more significant areas requiring the use of management’s estimates and judgments relate to the estimation of proved oil and gas reserves, the use of these oil and gas reserves in calculating depletion, depreciation, and amortization (DD&A), the use of the estimates of future net revenues in computing ceiling test limitations and estimates of future abandonment obligations used in recording asset retirement obligations, and the assessment of goodwill. | |
The process of estimating quantities of oil and gas reserves is complex, requiring significant decisions in the evaluation of all available geological, geophysical, engineering and economic data. The data for a given field may also change substantially over time as a result of numerous factors including, but not limited to, additional development activity, evolving production history and continual reassessment of the viability of production under varying economic conditions. As a result, material revisions to existing reserve estimates may occur from time to time. Although every reasonable effort is made to ensure that our reserve estimates represent the most accurate assessments possible, subjective decisions and available data for our various fields make these estimates generally less precise than other estimates included in financial statement disclosures. | |
Estimates and judgments are also required in determining allowance for doubtful accounts, impairments of undeveloped properties and other assets, purchase price allocation, valuation of deferred tax assets, fair value measurements, and commitments and contingencies. We analyze our estimates, including those related to oil, gas and NGL revenues, and base our estimates 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. | |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Cash and cash equivalents consist of cash in banks and investments readily convertible into cash, which have original maturities of three months or less. Cash equivalents are stated at cost, which approximates market value. | |
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 or market using weighted average cost. The steep decline in oil, gas and NGL prices has resulted in fewer drilling rigs running in the United States as companies cut back on their capital expenditures. Through the first part of February 2015, published oil rig counts are at their lowest since December 2011. The effect of lower exploration and development activity, and thus lower demand, will create downward pressure on the price of oil and gas well equipment and supplies. GAAP requires that these assets are to be carried at the lower of cost or market. Declines in prices related to our oil and gas well equipment and supplies will likely result in impairments in future quarters. | |
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. Exploration and development costs include dry hole costs, geological and geophysical costs, direct overhead related to exploration and development activities, and other costs incurred for the purpose of finding oil and gas reserves. Salaries and benefits paid to employees directly involved in the exploration and development of properties, as well as other internal costs that can be directly identified with acquisition, exploration, and development activities, are also capitalized. Under the full cost method of accounting, no gain or loss is recognized upon the disposition of oil and gas properties unless such disposition would significantly alter the relationship between capitalized costs and proved reserves. | |
Companies that follow the full cost accounting method are required to make quarterly ceiling test calculations. This test ensures that total capitalized costs for oil and gas properties (net of accumulated DD&A and deferred income taxes) do not exceed the sum of the present value discounted at 10% of estimated future net cash flows from proved reserves, the cost of properties not being amortized, the lower of cost or estimated fair value of unproven properties included in the costs being amortized, and all related tax effects. We currently do not have any unproven properties that are being amortized. Revenue calculations in the reserves are based on the unweighted average first-day-of-the-month prices for the prior 12 months. Changes in proved reserve estimates (whether based upon quantity revisions or commodity prices) will cause corresponding changes to the full cost ceiling limitation. If net capitalized costs subject to amortization exceed this limit, the excess would be charged to expense. Any recorded impairment of oil and gas properties is not reversible at a later date. | |
Our quarterly and annual ceiling tests are primarily impacted by commodity prices, reserve quantities added and produced, overall exploration and development costs and depletion expense. As of December 31, 2014, the calculated value of the ceiling limitation exceeded the carrying value of our oil and gas properties subject to the test and no impairment was necessary. However, a decline of 8% or more in the value of the ceiling limitation would have resulted in an impairment. If commodity prices stay at the current early 2015 levels or decline further, we will incur full cost ceiling impairments in future quarters. Because the ceiling calculation uses rolling 12-month average commodity prices, the effect of lower quarter-over-quarter prices in 2015 compared to 2014 is a lower ceiling value each quarter. This will result in ongoing impairments each quarter until prices stabilize or improve. Impairment charges would not affect cash flow from operating activities, but would adversely affect our net income and stockholders’ equity. | |
Depletion of proved oil and gas properties is computed on the units- of-production method, whereby capitalized costs, including future development costs and asset retirement obligations, are amortized over total estimated proved reserves. Changes in our estimate of proved reserve quantities, commodity prices and impairment of oil and gas properties will cause corresponding changes in depletion expense in periods subsequent to these changes. | |
The capitalized costs of unproved properties, including those in wells in progress, are excluded from the costs being amortized. We do not have major development projects that are excluded from costs being amortized. On a quarterly basis, we evaluate excluded costs for inclusion in the costs to be amortized resulting from the determination of proved reserves or impairments. To the extent that the evaluation indicates these properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized. Expenditures for maintenance and repairs are charged to production expense in the period incurred. | |
Fixed assets, net | Fixed assets, net |
Fixed assets consist primarily of gathering and plant facilities, vehicles, airplanes, office furniture, and computer equipment and software. These items are recorded at cost and are depreciated on the straight-line method based on expected lives of the individual assets, which range from 3 to 30 years. | |
Goodwill | 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. We first assess qualitative factors to determine whether it is more likely than not (with a greater than 50% threshold) that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. If goodwill is determined to be impaired then it is written down to a calculated fair value by charging the impairment to expense. | |
We evaluate our goodwill for impairment in the fourth quarter of each year or whenever events or changes in circumstances indicate the possibility that goodwill may be impaired. Based upon our qualitative assessment at December 31, 2014, goodwill was not impaired. It is possible that goodwill could become impaired in the future if commodity prices or other economic factors become less favorable. | |
Revenue Recognition | Revenue Recognition |
Oil, Gas and NGL Sales | |
Revenue is recorded from the sales of oil, gas and NGLs when the product is delivered at a fixed or determinable price, title has transferred and collectability is reasonably assured. There is a ready market for our products and sales occur soon after production. | |
Under certain contracts, when NGLs are extracted from the gas stream, processors receive a portion of the sales value from both the residue gas and the NGLs as a processing fee and remit the contractual proceeds to us. Prior to 2014, revenue was recognized net of these processing fees for residue gas and NGLs sold under these contracts as allowed under EITF 00-10 Accounting for Shipping and Handling Fees and Costs. Increasing NGL production combined with the impact of recent changes to these contracts has resulted in processing costs becoming more significant. Accordingly, we have changed our policy to record these processing costs with operating costs as allowed under EITF 00-10. Beginning in 2014, our realized prices for sales under these contracts reflect the value of 100% of the residue gas and NGLs yielded by processing, rather than the value associated with the contractual proceeds we received. The related processing fees now are included in “transportation, processing and other operating” costs. The effect of this change in 2014 was that total revenue was $51.4 million higher with an offsetting increase in total transportation, processing and other operating costs. There was no impact on operating income. Financial statements for periods prior to 2014 have not been reclassified to reflect this change in accounting treatment as it was impracticable to do so. | |
Marketing Sales | |
We market and sell natural gas for working interest owners under short term sales and supply agreements and earn a fee for such services. Revenues are recognized as gas is delivered and are reflected net of gas purchases on the consolidated statements of income and comprehensive income. | |
Gas Imbalances | |
We use the sales method of accounting for gas imbalances. Under this method, revenue is recorded on the basis of gas actually sold. Gas reserves are adjusted to the extent there are sufficient quantities of natural gas to make up an imbalance. A liability is established in situations where there are insufficient proved reserves available to make-up an overproduced imbalance. Imbalances have not been significant in the periods presented. | |
General and Administrative Expenses | General and Administrative Expenses |
General and administrative expenses are reported net of amounts reimbursed by working interest owners of the oil and gas properties operated by Cimarex and net of amounts capitalized pursuant to the full cost method of accounting. | |
Derivatives | Derivatives |
Our derivative contracts are recorded on the balance sheet at fair value. Our firm sales contracts qualify for the normal purchase and normal sale exception. Contracts that qualify for this treatment do not require mark-to-market accounting treatment. See Note 5 for additional information regarding our derivative instruments. | |
Income Taxes | Income Taxes |
Cimarex records deferred tax assets and liabilities to account for the expected future tax consequences of events that have been recognized in the financial statements and tax returns. The company routinely assesses the realizability of its deferred tax assets. If the company concludes that it is more likely than not that some or all of the deferred tax assets will not be realized, the tax asset is reduced by a valuation allowance. Numerous judgments and assumptions are inherent in the determination of future taxable income, including factors such as future operating conditions (particularly as related to prevailing oil and gas prices) and changing tax laws. | |
The company regularly assesses and, if required, establishes accruals for tax contingencies that could result from assessments of additional tax by taxing jurisdictions where the company operates. See Note 10 for additional information regarding our income taxes. | |
Contingencies | Contingencies |
A provision for contingencies is charged to expense when the loss is probable and the cost can be reasonably estimated. Determining when expenses should be recorded for these contingencies and the appropriate amounts for accrual is a complex estimation process that includes subjective judgment. In many cases, this judgment is based on interpretation of laws and regulations, which can be interpreted differently by regulators and/or courts of law. We closely monitor known and potential legal, environmental, and other contingencies and periodically determine when we should record losses for these items based on information available to us. See Note 11 for additional information regarding our contingencies. | |
Asset Retirement Obligations | Asset Retirement Obligations |
We recognize the fair value of liabilities for retirement obligations associated with tangible long-lived assets in the period in which there is a legal obligation associated with the retirement of such assets and the amount can be reasonably estimated. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. This liability includes costs related to the abandonment of wells, the removal of facilities and equipment, and site restorations. Subsequent to initial measurement, the asset retirement liability is required to be accreted each period. If the fair value of a recorded asset retirement obligation changes, a revision is recorded to both the asset retirement obligation and the asset retirement capitalized cost. Capitalized costs are included as a component of the DD&A calculations. The current portions of the asset retirement obligations are recorded in “accrued liabilities, other” in the accompanying consolidated balance sheets and expenditures are classified as cash used in operating activities in the accompanying consolidated statements of cash flows. See Note 9 for additional information regarding our asset retirement obligations. | |
Stock-based Compensation | Stock-based Compensation |
We recognize compensation related to all stock-based awards, including stock options, in the financial statements based on their estimated grant-date fair value. We grant various types of stock-based awards including stock options, restricted stock (including awards with service-based vesting and market condition-based vesting provisions) and restricted stock units. The fair value of stock option awards is determined using the Black-Scholes option pricing model. Service-based restricted stock and units are valued using the market price of our common stock on the grant date. The fair value of the market condition-based restricted stock is based on the grant-date market value of the award utilizing a statistical analysis. Compensation cost is recognized ratably over the applicable vesting period. To the extent compensation cost relates to employees directly involved in oil and gas acquisition, exploration and development activities, such amounts are capitalized to oil and gas properties. Amounts not capitalized to oil and gas properties are recognized as stock compensation expense. See Note 7 for additional information regarding our stock-based compensation. | |
Earnings per Share | Earnings per Share |
We calculate earnings (loss) per share recognizing that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are “participating securities” and therefore should be included in computing earnings per share using the two-class earnings allocation method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Our unvested share based payment awards, consisting of restricted stock and units qualify as participating securities. See Note 8 for additional information regarding our earnings per share. | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards |
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance in this update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. We must comply with this ASU beginning in fiscal year 2017 and early adoption is not permitted. Entities can choose to apply the standard using either the full retrospective approach or a modified retrospective approach. We are currently evaluating the potential impact of this guidance, but at this time, do not expect that the adoption of this standard will have a material effect on our financial position or results of operation. | |
Subsequent Events | Subsequent Events |
The accompanying financial disclosures include an evaluation of subsequent events through the date of this filing. | |
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Long-Term Debt | |||||||
Summary of debt | |||||||
December 31, | |||||||
(in thousands) | 2014 | 2013 | |||||
Bank debt | $ | — | $ | 174,000 | |||
5.875% Senior Notes, due May 1, 2022 | 750,000 | 750,000 | |||||
4.375% Senior Notes, due June 1, 2024 | 750,000 | — | |||||
Total long-term debt | $ | 1,500,000 | $ | 924,000 | |||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Fair Value Measurements | |||||||
Fair value measurement information for certain assets and liabilities | |||||||
December 31, 2014: | Carrying | Fair | |||||
(in thousands) | Amount | Value | |||||
Financial Assets (Liabilities): | |||||||
5.875% Notes due 2022 | $ | -750,000 | $ | -776,250 | |||
4.375% Notes due 2024 | $ | -750,000 | $ | -720,000 | |||
December 31, 2013: | Carrying | Fair | |||||
(in thousands) | Amount | Value | |||||
Financial Assets (Liabilities): | |||||||
Bank debt | $ | -174,000 | $ | -174,000 | |||
5.875% Notes due 2022 | $ | -750,000 | $ | -799,988 | |||
Derivative instruments — assets | $ | 4,268 | $ | 4,268 | |||
Derivative instruments — liabilities | $ | -389 | $ | -389 | |||
DERIVATIVE_INSTRUMENTSHEDGING_
DERIVATIVE INSTRUMENTS/HEDGING (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Derivative Instruments/Hedging | ||||||||||
Net gains and (losses) from settlements and changes in fair value of derivative contracts | ||||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||||
Gain (loss) on derivative instruments, net | $ | 3,762 | $ | -209 | $ | 245 | ||||
Settlement gains (losses) | $ | 7,641 | $ | -4,088 | $ | — | ||||
Schedule of amounts and classifications of entity's derivative assets and liabilities as well as the potential effect of netting arrangements on contracts with the same counterparty | . | |||||||||
December 31, 2013: | ||||||||||
(in thousands) | Balance Sheet Location | Asset | Liability | |||||||
Oil contracts | Current assets — Derivative instruments | $ | 1,805 | $ | — | |||||
Natural gas contracts | Current assets — Derivative instruments | 2,463 | — | |||||||
Oil contracts | Current liabilities — Derivative instruments | — | 389 | |||||||
Total gross amounts presented in accompanying balance sheet | 4,268 | 389 | ||||||||
Less: gross amounts not offset in the accompanying balance sheet | -389 | -389 | ||||||||
Net amount: | $ | 3,879 | $ | — | ||||||
CAPITAL_STOCK_Tables
CAPITAL STOCK (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Capital Stock | ||||||||||
Schedule of dividends declared | ||||||||||
2014 | 2013 | 2012 | ||||||||
Dividend declared (in millions) | $ | 55.7 | $ | 48.4 | $ | 41.3 | ||||
Dividend per share | $ | 0.64 | $ | 0.56 | $ | 0.48 | ||||
STOCKBASED_and_OTHER_COMPENSAT1
STOCK-BASED and OTHER COMPENSATION (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Options, Restricted Stock and Unit Awards | ||||||||||||||||
Recognition of non-cash stock-based compensation cost | ||||||||||||||||
Years Ended December 31, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||||||||||
Performance stock awards | $ | 12,141 | $ | 11,105 | $ | 19,066 | ||||||||||
Service-based stock awards | 13,607 | 12,018 | 12,231 | |||||||||||||
Restricted stock awards | 25,748 | 23,123 | 31,297 | |||||||||||||
Stock option awards | 3,057 | 3,145 | 2,889 | |||||||||||||
28,805 | 26,268 | 34,186 | ||||||||||||||
Less amounts capitalized to oil and gas properties | -13,804 | -11,989 | -12,267 | |||||||||||||
Compensation expense | $ | 15,001 | $ | 14,279 | $ | 21,919 | ||||||||||
Restricted Stock [Member] | ||||||||||||||||
Options, Restricted Stock and Unit Awards | ||||||||||||||||
Restricted stock activity | ||||||||||||||||
Performance | ||||||||||||||||
Service-based | (subject to market conditions) | |||||||||||||||
Weighted | Weighted | |||||||||||||||
Average | Average | |||||||||||||||
Grant-Date | Grant-Date | |||||||||||||||
Awards | Fair Value | Awards | Fair Value | |||||||||||||
Outstanding beginning of period | 1,035,032 | $ | 68.41 | 828,802 | $ | 65.27 | ||||||||||
Vested | -106,817 | $ | 37.91 | -195,664 | $ | 73.01 | ||||||||||
Granted | 170,402 | $ | 136.72 | 316,441 | $ | 83.22 | ||||||||||
Canceled | -62,200 | $ | 69.91 | -72,368 | $ | 73.01 | ||||||||||
Outstanding end of period | 1,036,417 | $ | 82.69 | 877,211 | $ | 69.38 | ||||||||||
Restricted Stock and Units [Member] | ||||||||||||||||
Options, Restricted Stock and Unit Awards | ||||||||||||||||
Summary of restricted stock awards granted | ||||||||||||||||
Years Ended December 31, | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||
Average | Average | Average | ||||||||||||||
Number | Grant-Date | Number | Grant-Date | Number | Grant-Date | |||||||||||
of Shares | Fair Value | of Shares | Fair Value | of Shares | Fair Value | |||||||||||
Performance stock awards | 316,441 | $ | 83.22 | 298,000 | $ | 77.75 | 262,770 | $ | 43.22 | |||||||
Service-based stock awards | 170,402 | $ | 136.72 | 281,236 | $ | 72.89 | 299,499 | $ | 54.17 | |||||||
Total restricted stock awards | 486,843 | $ | 101.95 | 579,236 | $ | 75.39 | 562,269 | $ | 49.05 | |||||||
Employee Stock Option [Member] | ||||||||||||||||
Options, Restricted Stock and Unit Awards | ||||||||||||||||
Summary of information regarding options exercised and grant-date fair value of options vested | ||||||||||||||||
Years Ended December 31, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||||||||||
Number of options exercised | 211,258 | 276,069 | 558,419 | |||||||||||||
Cash received from option exercises | $ | 11,899 | $ | 14,494 | $ | 11,433 | ||||||||||
Tax benefit from option exercises included in paid-in-capital (1) | $ | — | $ | — | $ | 76 | ||||||||||
Intrinsic value of options exercised | $ | 15,384 | $ | 10,109 | $ | 22,482 | ||||||||||
Grant-date fair value of options vested | $ | 4,419 | $ | 2,521 | $ | 2,560 | ||||||||||
-1 | No tax benefit is recorded until the benefit reduces current taxes payable. | |||||||||||||||
Status of non-vested stock options | ||||||||||||||||
Weighted | Weighted | |||||||||||||||
Average | Average | |||||||||||||||
Grant-Date | Exercise | |||||||||||||||
Options | Fair Value | Price | ||||||||||||||
Non-vested as of January 1, 2014 | 343,014 | $ | 21.64 | $ | 63.81 | |||||||||||
Vested | -202,182 | $ | 21.86 | $ | 62.48 | |||||||||||
Granted | 82,500 | $ | 41.69 | $ | 139.02 | |||||||||||
Forfeited | -18,176 | $ | 23.24 | $ | 70.67 | |||||||||||
Non-vested as of December 31, 2014 | 205,156 | $ | 29.35 | $ | 94.76 | |||||||||||
Summary of options granted, weighted average grant-date fair value, total fair value of the options and assumptions used to determine fair market value of those options | ||||||||||||||||
Years Ended December 31, | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Options granted | 82,500 | 144,400 | 152,800 | |||||||||||||
Weighted average grant-date fair value | $ | 41.69 | $ | 21.64 | $ | 20.55 | ||||||||||
Weighted average exercise price | $ | 139.02 | $ | 72.25 | $ | 51.92 | ||||||||||
Total Fair Value (in thousands) | $ | 3,439 | $ | 3,125 | $ | 3,140 | ||||||||||
Expected years until exercise | 4.0 | 4.0 | 5.3 | |||||||||||||
Expected stock volatility | 36.7 | % | 38.6 | % | 47.4 | % | ||||||||||
Dividend yield | 0.5 | % | 0.8 | % | 0.9 | % | ||||||||||
Risk-free interest rate | 1.8 | % | 1.4 | % | 0.6 | % | ||||||||||
Outstanding stock options | ||||||||||||||||
Weighted | Weighted | Aggregate | ||||||||||||||
Average | Average | Intrinsic | ||||||||||||||
Exercise | Remaining | Value | ||||||||||||||
Options | Price | Term | (in thousands) | |||||||||||||
Outstanding as of January 1, 2014 | 531,016 | $ | 59.78 | |||||||||||||
Exercised | -211,258 | $ | 56.32 | |||||||||||||
Granted | 82,500 | $ | 139.02 | |||||||||||||
Forfeited | -18,176 | $ | 70.67 | |||||||||||||
Outstanding as of December 31, 2014 | 384,082 | $ | 78.19 | 5.0 | Years | $ | 13,260 | |||||||||
Exercisable as of December 31, 2014 | 178,926 | $ | 59.19 | 4.1 | Years | $ | 8,319 | |||||||||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Earnings per Share | ||||||||||
Calculations of basic and diluted net earnings (loss) per common share under the two-class method | ||||||||||
Years Ended December 31, | ||||||||||
(in thousands, except per share data) | 2014 | 2013 | 2012 | |||||||
Basic: | ||||||||||
Net income | $ | 507,204 | $ | 564,689 | $ | 353,823 | ||||
Participating securities’ share in earnings | -9,906 | -11,091 | -6,753 | |||||||
Net income applicable to common stockholders | $ | 497,298 | $ | 553,598 | $ | 347,070 | ||||
Diluted: | ||||||||||
Net income | $ | 507,204 | $ | 564,689 | $ | 353,823 | ||||
Participating securities’ share in earnings | -9,891 | -11,076 | -6,732 | |||||||
Net income applicable to common stockholders | $ | 497,313 | $ | 553,613 | $ | 347,091 | ||||
Shares: | ||||||||||
Basic shares outstanding | 85,679 | 85,288 | 84,757 | |||||||
Incremental shares from assumed exercise of stock options | 131 | 121 | 277 | |||||||
Fully diluted common stock | 85,810 | 85,409 | 85,034 | |||||||
Excluded (1) | 94 | 251 | 414 | |||||||
Earnings per share to common stockholders (2): | ||||||||||
Basic | $ | 5.79 | $ | 6.48 | $ | 4.08 | ||||
Diluted | $ | 5.78 | $ | 6.47 | $ | 4.07 | ||||
-1 | Inclusion of certain outstanding stock options would have an anti-dilutive effect. | |||||||||
-2 | Earnings per share are based on actual figures rather than the rounded figures presented. | |||||||||
ASSET_RETIREMENT_OBLIGATIONS_T
ASSET RETIREMENT OBLIGATIONS (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Asset Retirement Obligations | |||||||
Change in the carrying amount of the asset retirement obligation | |||||||
(in thousands) | 2014 | 2013 | |||||
Asset retirement obligation at January 1, | $ | 154,026 | $ | 185,138 | |||
Liabilities incurred | 13,015 | 5,547 | |||||
Liability settlements and disposals | -27,036 | -47,842 | |||||
Accretion expense | 7,583 | 7,871 | |||||
Revisions of estimated liabilities | 25,420 | 3,312 | |||||
Asset retirement obligation at December 31, | 173,008 | 154,026 | |||||
Less current obligation | 13,216 | 27,058 | |||||
Long-term asset retirement obligation | $ | 159,792 | $ | 126,968 | |||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Income Taxes | ||||||||||
Components of the provision for income taxes | ||||||||||
Years Ended December 31, | ||||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||||
Current Taxes: | ||||||||||
Federal (benefit) | $ | — | $ | -381 | $ | -1,629 | ||||
State (benefit) | 404 | -308 | 140 | |||||||
404 | -689 | -1,489 | ||||||||
Deferred taxes: | ||||||||||
Federal | 282,729 | 315,165 | 199,459 | |||||||
State | 15,564 | 14,535 | 8,757 | |||||||
298,293 | 329,700 | 208,216 | ||||||||
$ | 298,697 | $ | 329,011 | $ | 206,727 | |||||
Reconciliations of income tax (benefit) expense calculated at federal statutory rate of 35% to the total income tax (benefit) expense | ||||||||||
Years Ended December 31, | ||||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||||
Provision at statutory rate | $ | 282,066 | $ | 312,795 | $ | 196,192 | ||||
Effect of state taxes | 15,826 | 14,226 | 8,902 | |||||||
Domestic Production Activities allowance | — | — | 567 | |||||||
Other permanent differences | 805 | 1,990 | 1,066 | |||||||
Income tax expense | $ | 298,697 | $ | 329,011 | $ | 206,727 | ||||
Components of net deferred tax liabilities | ||||||||||
December 31, | ||||||||||
(in thousands) | 2014 | 2013 | ||||||||
Long-term: | ||||||||||
Assets: | ||||||||||
Stock compensation and other accrued amounts | $ | 26,527 | $ | 24,815 | ||||||
Net operating loss carryforward, net of valuation allowance | 218,584 | 207,282 | ||||||||
Credit carryforward | 4,068 | 4,068 | ||||||||
249,179 | 236,165 | |||||||||
Liabilities: | ||||||||||
Property, plant and equipment | -2,003,885 | -1,696,006 | ||||||||
Net, long-term deferred tax liability | -1,754,706 | -1,459,841 | ||||||||
Current: | ||||||||||
Assets: | ||||||||||
Other accrued amounts | 13,475 | 16,854 | ||||||||
13,475 | 16,854 | |||||||||
Net deferred tax liabilities | $ | -1,741,231 | $ | -1,442,987 | ||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies | ||||
Schedule of future minimum payments required under leases | ||||
(in thousands) | Operating | |||
Leases | ||||
2015 | $ | 10,166 | ||
2016 | 11,261 | |||
2017 | 10,789 | |||
2018 | 10,416 | |||
2019 | 10,522 | |||
Later years | 67,795 | |||
Total future minimum lease payments | $ | 120,949 | ||
SUPPLEMENTAL_DISCLOSURE_OF_CAS1
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Supplemental Disclosure of Cash Flow Information: | ||||||||||
Supplemental Disclosure of Cash Flow Information | ||||||||||
Years Ended December 31, | ||||||||||
(in thousands) | 2014 | 2013 | 2012 | |||||||
Cash paid during the period for: | ||||||||||
Interest expense (including capitalized amounts) | $ | 66,167 | $ | 50,754 | $ | 42,420 | ||||
Interest capitalized | $ | 32,623 | $ | 29,098 | $ | 30,255 | ||||
Income taxes | $ | 354 | $ | 205 | $ | 377 | ||||
Cash received for income taxes | $ | 460 | $ | 966 | $ | 49,754 | ||||
BASIS_OF_PRESENTATION_AND_SUMM2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
segment | |
Number of reportable segments | 1 |
Oil and Gas Properties | |
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 |
Ceiling limitation used in ceiling test sensitivity analysis | 8.00% |
Oil, Gas and NGL Sales | |
Residue gas and NGLs, portion reflected in prices (as a percent) | 100.00% |
Increase in total revenue and processing costs | $51,400,000 |
Maximum [Member] | |
Fixed assets, net | |
Fixed assets expected lives | 30 years |
Minimum [Member] | |
Fixed assets, net | |
Fixed assets expected lives | 3 years |
LONGTERM_DEBT_Summary_Details
LONG-TERM DEBT - Summary (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 30, 2012 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||||
Debt Instrument | ||||
Long-term debt | $1,500,000 | $924,000 | ||
Line of Credit [Member] | ||||
Debt Instrument | ||||
Long-term debt | 174,000 | |||
Notes 5.875 Percent [Member] | ||||
Debt Instrument | ||||
Long-term debt | 750,000 | 750,000 | 750,000 | |
Interest rate (as a percent) | 5.88% | 5.88% | 5.88% | |
Notes 4.375 Percent [Member] | ||||
Debt Instrument | ||||
Long-term debt | $750,000 | $750,000 | ||
Interest rate (as a percent) | 4.38% | 4.38% |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (USD $) | 12 Months Ended | 1 Months Ended | 8 Months Ended | 12 Months Ended | 3 Months Ended | 1 Months Ended | |||
Dec. 31, 2012 | 31-May-14 | Dec. 31, 2014 | Dec. 31, 2014 | Jun. 30, 2012 | Apr. 30, 2012 | Jun. 30, 2014 | Dec. 31, 2013 | Apr. 30, 2014 | |
Debt Instrument | |||||||||
Long-term debt | $1,500,000,000 | $1,500,000,000 | $924,000,000 | ||||||
Loss on early extinguishment of debt | 16,214,000 | ||||||||
Line of Credit [Member] | |||||||||
Debt Instrument | |||||||||
Period of maturity date extension | 2 years | ||||||||
Borrowing base of credit facility | 2,500,000,000 | 2,250,000,000 | |||||||
Bank commitments of credit facility | 1,000,000,000 | 1,000,000,000 | |||||||
Long-term debt | 174,000,000 | ||||||||
Letters of credit outstanding under the credit facility | 2,500,000 | 2,500,000 | |||||||
Unused borrowing availability | 997,500,000 | 997,500,000 | |||||||
Additional interest rate margin, low end of range (as a percent) | 0.50% | ||||||||
Maximum leverage ratio | 3.5 | ||||||||
Line of Credit [Member] | Minimum [Member] | |||||||||
Debt Instrument | |||||||||
Current ratio to be maintained under credit facility | 1 | ||||||||
Line of Credit [Member] | Maximum [Member] | |||||||||
Debt Instrument | |||||||||
Additional interest rate margin, high end of range (as a percent) | 1.25% | ||||||||
Notes 7.125 Percent [Member] | |||||||||
Debt Instrument | |||||||||
Interest rate (as a percent) | 7.13% | 7.13% | |||||||
Loss on early extinguishment of debt | 16,200,000 | ||||||||
Notes 5.875 Percent [Member] | |||||||||
Debt Instrument | |||||||||
Long-term debt | 750,000,000 | 750,000,000 | 750,000,000 | 750,000,000 | |||||
Interest rate (as a percent) | 5.88% | 5.88% | 5.88% | 5.88% | |||||
Issuance of senior unsecured notes | 737,000,000 | ||||||||
Notes 4.375 Percent [Member] | |||||||||
Debt Instrument | |||||||||
Long-term debt | 750,000,000 | 750,000,000 | 750,000,000 | ||||||
Interest rate (as a percent) | 4.38% | 4.38% | 4.38% | ||||||
Issuance of senior unsecured notes | $740,900,000 | ||||||||
London Interbank Offered Rate (LIBOR) [Member] | Line of Credit [Member] | Minimum [Member] | |||||||||
Debt Instrument | |||||||||
Interest rate margin (as a percent) | 1.50% | ||||||||
London Interbank Offered Rate (LIBOR) [Member] | Line of Credit [Member] | Maximum [Member] | |||||||||
Debt Instrument | |||||||||
Interest rate margin (as a percent) | 2.25% | ||||||||
Debt Instrument Variable Rate Federal Funds [Member] | Line of Credit [Member] | |||||||||
Debt Instrument | |||||||||
Interest rate margin (as a percent) | 0.50% | ||||||||
Debt Instrument Variable Rate Base One Month Adjusted LIBOR [Member] | Line of Credit [Member] | |||||||||
Debt Instrument | |||||||||
Interest rate margin (as a percent) | 1.00% |
PROPERTY_SALES_AND_ACQUISITION1
PROPERTY SALES AND ACQUISITIONS - Sales (Details) (USD $) | 12 Months Ended | 3 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 | |
Property Sales | ||||
Sales of other assets | $8,413,000 | $31,661,000 | $1,060,000 | |
Triple Crown Gas Gathering and Processing System [Member] | ||||
Property Sales | ||||
Sales of other assets | 31,000,000 | |||
Interest sold in property (as a percent) | 50.00% | |||
Non Core Oil and Gas Properties [Member] | ||||
Property Sales | ||||
Sale of interests in oil and gas properties | 446,100,000 | 61,500,000 | 306,000,000 | |
Texas [Member] | ||||
Property Sales | ||||
Sale of interests in oil and gas properties | $290,000,000 |
PROPERTY_SALES_AND_ACQUISITION2
PROPERTY SALES AND ACQUISITIONS - Acquisitions (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property Acquisitions and Sales | |||
Acquisition of interest in oil and gas properties | $249.70 | $37.10 | $33.50 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2014 | Apr. 30, 2012 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||||
Financial Assets (Liabilities): | ||||
Derivative instruments | $4,268 | |||
Derivative instruments - liabilities | -389 | |||
Notes 5.875 Percent [Member] | ||||
Financial Assets (Liabilities): | ||||
Interest rate (as a percent) | 5.88% | 5.88% | 5.88% | |
Notes 5.875 Percent [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Financial Assets (Liabilities): | ||||
Interest rate (as a percent) | 5.88% | |||
Notes 4.375 Percent [Member] | ||||
Financial Assets (Liabilities): | ||||
Interest rate (as a percent) | 4.38% | 4.38% | ||
Notes 4.375 Percent [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Financial Assets (Liabilities): | ||||
Interest rate (as a percent) | 4.38% | |||
Reported Value Measurement [Member] | ||||
Financial Assets (Liabilities): | ||||
Derivative instruments | 4,268 | |||
Derivative instruments - liabilities | -389 | |||
Reported Value Measurement [Member] | Notes 5.875 Percent [Member] | ||||
Financial Assets (Liabilities): | ||||
Long-term debt | -750,000 | -750,000 | ||
Reported Value Measurement [Member] | Line of Credit [Member] | ||||
Financial Assets (Liabilities): | ||||
Long-term debt | -174,000 | |||
Reported Value Measurement [Member] | Notes 4.375 Percent [Member] | ||||
Financial Assets (Liabilities): | ||||
Long-term debt | -750,000 | |||
Estimate of Fair Value Measurement [Member] | ||||
Financial Assets (Liabilities): | ||||
Derivative instruments | 4,268 | |||
Derivative instruments - liabilities | -389 | |||
Estimate of Fair Value Measurement [Member] | Notes 5.875 Percent [Member] | ||||
Financial Assets (Liabilities): | ||||
Long-term debt | -799,988 | -776,250 | ||
Estimate of Fair Value Measurement [Member] | Line of Credit [Member] | ||||
Financial Assets (Liabilities): | ||||
Long-term debt | -174,000 | |||
Estimate of Fair Value Measurement [Member] | Notes 4.375 Percent [Member] | ||||
Financial Assets (Liabilities): | ||||
Long-term debt | -720,000 |
FAIR_VALUE_MEASUREMENTS_Other_
FAIR VALUE MEASUREMENTS - Other instruments (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Other Financial Instruments | ||
Liabilities representing checks issued but not yet presented for payment | $42 | $43.70 |
Accrued payroll related general and administrative expenses | 44.2 | 41.9 |
Allowance for Trade Receivables [Member] | ||
Other Financial Instruments | ||
Aggregate allowance for doubtful accounts | $1.50 | $6 |
FAIR_VALUE_MEASUREMENTS_Concen
FAIR VALUE MEASUREMENTS - Concentration (Details) (Sales Revenue, Goods, Net [Member]) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Enterprise Products | ||
Concentration Risk | ||
Percentage of sales to revenue, major customers (as a percent) | 19.00% | 24.00% |
Sunoco Logistics | ||
Concentration Risk | ||
Percentage of sales to revenue, major customers (as a percent) | 19.00% | 22.00% |
Oneok | ||
Concentration Risk | ||
Percentage of sales to revenue, major customers (as a percent) | 10.00% |
DERIVATIVE_INSTRUMENTSHEDGING_1
DERIVATIVE INSTRUMENTS/HEDGING (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Gain (loss) on derivative instruments, net | |||
Gain (loss) on derivative instruments, net | $3,762 | ($209) | $245 |
Gains (losses) from settlement of derivative instruments: | |||
Settlement gains (losses) | 7,641 | -4,088 | |
Not Designated as Hedging Instrument [Member] | |||
Gain (loss) on derivative instruments, net | |||
Gain (loss) on derivative instruments, net | 3,762 | -209 | 245 |
Gains (losses) from settlement of derivative instruments: | |||
Settlement gains (losses) | $7,641 | ($4,088) |
DERIVATIVE_INSTRUMENTSHEDGING_2
DERIVATIVE INSTRUMENTS/HEDGING - Fair value (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Asset | |
Total gross amounts presented in accompanying balance sheet | $4,268 |
Liability | |
Total gross amounts presented in accompanying balance sheet | 389 |
Not Designated as Hedging Instrument [Member] | |
Asset | |
Total gross amounts presented in accompanying balance sheet | 4,268 |
Less: gross amounts not offset in the accompanying balance sheet | -389 |
Net amount: | 3,879 |
Liability | |
Total gross amounts presented in accompanying balance sheet | 389 |
Less: gross amounts not offset in the accompanying balance sheet | -389 |
Not Designated as Hedging Instrument [Member] | Oil Contracts [Member] | Other Current Assets [Member] | |
Asset | |
Total gross amounts presented in accompanying balance sheet | 1,805 |
Not Designated as Hedging Instrument [Member] | Oil Contracts [Member] | Other Current Liabilities [Member] | |
Liability | |
Total gross amounts presented in accompanying balance sheet | 389 |
Not Designated as Hedging Instrument [Member] | Natural Gas Contracts [Member] | Other Current Assets [Member] | |
Asset | |
Total gross amounts presented in accompanying balance sheet | $2,463 |
CAPITAL_STOCK_Details
CAPITAL STOCK (Details) (USD $) | 1 Months Ended | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Capital Stock | |||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | |||
Preferred stock, shares authorized | 15,000,000 | 15,000,000 | |||
Preferred stock outstanding (in shares) | 0 | ||||
Dividends | |||||
Cash dividend declared (in dollars per share) | $0.16 | $0.14 | |||
Dividend payable | |||||
Dividend declared | $55,664 | $48,423 | $41,318 | ||
Dividend per share | $0.64 | $0.56 | $0.48 |
STOCKBASED_and_OTHER_COMPENSAT2
STOCK-BASED and OTHER COMPENSATION (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Options, Restricted Stock and Unit Awards | |||
Compensation expense before capitalized cost | $28,805,000 | $26,268,000 | $34,186,000 |
Less amounts capitalized to oil and gas properties | -13,804,000 | -11,989,000 | -12,267,000 |
Compensation expense | 15,001,000 | 14,279,000 | 21,919,000 |
Maximum number of shares of common stock that may be issued under the Stock Incentive Plan | 6,600,000 | ||
Restricted Stock and Units [Member] | |||
Options, Restricted Stock and Unit Awards | |||
Compensation expense before capitalized cost | 25,748,000 | 23,123,000 | 31,297,000 |
Restricted Stock [Member] | |||
Options, Restricted Stock and Unit Awards | |||
Restricted stock granted (in shares) | 486,843 | 579,236 | 562,269 |
Restricted stock granted, weighted average grant-date fair value (in dollars per share) | $101.95 | $75.39 | $49.05 |
Performance Based Restricted Stock [Member] | |||
Options, Restricted Stock and Unit Awards | |||
Compensation expense before capitalized cost | 12,141,000 | 11,105,000 | 19,066,000 |
Accelerated compensation cost | 3,900,000 | ||
Compensation cost lower than 2012 costs due to the timing of awards granted | 4,300,000 | ||
Restricted stock granted (in shares) | 316,441 | 298,000 | 262,770 |
Restricted stock granted, weighted average grant-date fair value (in dollars per share) | $83.22 | $77.75 | $43.22 |
Vesting period | 3 years | ||
Performance Based Restricted Stock [Member] | Maximum [Member] | |||
Options, Restricted Stock and Unit Awards | |||
Award vesting percentage | 100.00% | ||
Performance Based Restricted Stock [Member] | Minimum [Member] | |||
Options, Restricted Stock and Unit Awards | |||
Award vesting percentage | 50.00% | ||
Service Based Restricted Stock [Member] | |||
Options, Restricted Stock and Unit Awards | |||
Compensation expense before capitalized cost | 13,607,000 | 12,018,000 | 12,231,000 |
Restricted stock granted (in shares) | 170,402 | 281,236 | 299,499 |
Restricted stock granted, weighted average grant-date fair value (in dollars per share) | $136.72 | $72.89 | $54.17 |
Service Based Restricted Stock [Member] | Maximum [Member] | |||
Options, Restricted Stock and Unit Awards | |||
Vesting period | 5 years | ||
Service Based Restricted Stock [Member] | Minimum [Member] | |||
Options, Restricted Stock and Unit Awards | |||
Vesting period | 3 years | ||
Employee Stock Option [Member] | |||
Options, Restricted Stock and Unit Awards | |||
Compensation expense before capitalized cost | $3,057,000 | $3,145,000 | $2,889,000 |
Employee Stock Option [Member] | Maximum [Member] | |||
Options, Restricted Stock and Unit Awards | |||
Vesting period | 5 years | ||
Employee Stock Option [Member] | Minimum [Member] | |||
Options, Restricted Stock and Unit Awards | |||
Vesting period | 3 years |
STOCKBASED_and_OTHER_COMPENSAT3
STOCK-BASED and OTHER COMPENSATION - RSU activity (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Restricted Stock [Member] | |||
Restricted stock and unit activity | |||
Granted (in shares) | 486,843 | 579,236 | 562,269 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Granted | $101.95 | $75.39 | $49.05 |
Fair value of resticted stock vested | $34.10 | $25.70 | $36 |
Performance Based Restricted Stock [Member] | |||
Restricted stock and unit activity | |||
Outstanding at the beginning of the period (in shares) | 828,802 | ||
Vested (in shares) | -195,664 | ||
Granted (in shares) | 316,441 | 298,000 | 262,770 |
Canceled (in shares) | -72,368 | ||
Outstanding at the end of the period (in shares) | 877,211 | 828,802 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Outstanding beginning of period | $65.27 | ||
Vested | $73.01 | ||
Granted | $83.22 | $77.75 | $43.22 |
Canceled | $73.01 | ||
Outstanding end of period | $69.38 | $65.27 | |
Service Based Restricted Stock [Member] | |||
Restricted stock and unit activity | |||
Outstanding at the beginning of the period (in shares) | 1,035,032 | ||
Vested (in shares) | -106,817 | ||
Granted (in shares) | 170,402 | 281,236 | 299,499 |
Canceled (in shares) | -62,200 | ||
Outstanding at the end of the period (in shares) | 1,036,417 | 1,035,032 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Outstanding beginning of period | $68.41 | ||
Vested | $37.91 | ||
Granted | $136.72 | $72.89 | $54.17 |
Canceled | $69.91 | ||
Outstanding end of period | $82.69 | $68.41 | |
Restricted Stock Units (RSUs) [Member] | |||
Restricted stock and unit activity | |||
Outstanding at the end of the period (in shares) | 8,838 | 8,838 |
STOCKBASED_and_OTHER_COMPENSAT4
STOCK-BASED and OTHER COMPENSATION - Options, assumptions (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Assumptions used to determine the fair market value of options | |||
Annual costs related to the plan | $11,000,000 | $9,000,000 | $8,200,000 |
Restricted Stock and Units [Member] | |||
Options, Restricted Stock and Unit Awards | |||
Unrecognized compensation costs related to unvested awards (in dollars) | 83,900,000 | ||
Expected period to recognize unamortized compensation costs related to unvested awards | 2 years 2 months 12 days | ||
Restricted Stock Units (RSUs) [Member] | |||
Options, Restricted Stock and Unit Awards | |||
Share Based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other than Options, Outstanding, Number | 8,838 | 8,838 | |
Employee Stock Option [Member] | |||
Options, Restricted Stock and Unit Awards | |||
Unrecognized compensation costs related to unvested awards (in dollars) | 4,100,000 | ||
Expected period to recognize unamortized compensation costs related to unvested awards | 1 year 9 months 18 days | ||
Outstanding Stock Options | |||
Outstanding balance at beginning of period (in shares) | 531,016 | ||
Granted (in shares) | 82,500 | 144,400 | 152,800 |
Exercised (in shares) | -211,258 | -276,069 | -558,419 |
Forfeited (in shares) | -18,176 | ||
Outstanding balance at end of period (in shares) | 384,082 | 531,016 | |
Exercisable at end of period (in shares) | 178,926 | ||
Weighted Average Exercise Price | |||
Outstanding balance at beginning of period (in dollars per share) | $59.78 | ||
Granted (in dollars per share) | $139.02 | $72.25 | $51.92 |
Exercised (in dollars per share) | $56.32 | ||
Forfeited (in dollars per share) | $70.67 | ||
Outstanding at end of period (in dollars per share) | $78.19 | $59.78 | |
Exercisable at end of period (in dollars per share) | $59.19 | ||
Weighted Average Remaining Term | |||
Weighted Average Remaining Term, Outstanding at end of period | 5 years | ||
Weighted Average Remaining Term, Exercisable at end of period | 4 years 1 month 6 days | ||
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value Outstanding at end of period (in dollars) | 13,260,000 | ||
Aggregate Intrinsic Value Exercisable at the end of the period (in dollars) | 8,319,000 | ||
Grant-Date Fair value | |||
Number of options exercised (in shares) | 211,258 | 276,069 | 558,419 |
Cash received from option exercises | 11,899,000 | 14,494,000 | 11,433,000 |
Tax benefit from option exercises included in paid-in-capital | 76,000 | ||
Intrinsic value of stock options exercised | 15,384,000 | 10,109,000 | 22,482,000 |
Grant date fair value of options vested | 4,419,000 | 2,521,000 | 2,560,000 |
Granted (in dollars per share) | $41.69 | $21.64 | $20.55 |
Non-vested Stock Options | |||
Non-vested at the beginning of the period (in shares) | 343,014 | ||
Granted (in shares) | 82,500 | 144,400 | 152,800 |
Vested (in shares) | -202,182 | ||
Forfeited (in shares) | -18,176 | ||
Non-vested at the end of the period (in shares) | 205,156 | 343,014 | |
Weighted Average Grant Date Fair Value - Non-Vested Stock Options | |||
Non-vested as of January (in dollars per share) | $21.64 | ||
Granted (in dollars per share) | $41.69 | $21.64 | $20.55 |
Vested (in dollars per share) | $21.86 | ||
Forfeited (in dollars per share) | $23.24 | ||
Non-vested as of December (in dollars per share) | $29.35 | $21.64 | |
Weighted Average Exercise Price - Non-Vested Stock Options | |||
Non-vested at the beginning of the period (in dollars per share) | $63.81 | ||
Granted (in dollars per share) | $139.02 | ||
Vested (in dollars per share) | $62.48 | ||
Forfeited (in dollars per share) | $70.67 | ||
Non-vested at the end of the period (in dollars per share) | $94.76 | $63.81 | |
Assumptions used to determine the fair market value of options | |||
Granted (in shares) | 82,500 | 144,400 | 152,800 |
Weighted average grant-date fair value | $41.69 | $21.64 | $20.55 |
Weighted average exercise price | $139.02 | $72.25 | $51.92 |
Total fair value of options granted | $3,439,000 | $3,125,000 | $3,140,000 |
Expected years until exercise | 4 years | 4 years | 5 years 3 months 18 days |
Expected stock volatility (as a percent) | 36.70% | 38.60% | 47.40% |
Dividend yield (as a percent) | 0.50% | 0.80% | 0.90% |
Risk-free interest rate (as a percent) | 1.80% | 1.40% | 0.60% |
Maximum [Member] | Employee Stock Option [Member] | |||
Grant-Date Fair value | |||
Vesting period | 5 years | ||
Term of options from grant to expiration | 10 years | ||
Minimum [Member] | Employee Stock Option [Member] | |||
Grant-Date Fair value | |||
Vesting period | 3 years | ||
Term of options from grant to expiration | 7 years |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Basic: | |||
Net income | $507,204 | $564,689 | $353,823 |
Participating securities' share in earnings (in dollars) | -9,906 | -11,091 | -6,753 |
Net income applicable to common shareholders | 497,298 | 553,598 | 347,070 |
Diluted: | |||
Net income | 507,204 | 564,689 | 353,823 |
Participating securities' share in earnings (in dollars) | -9,891 | -11,076 | -6,732 |
Net income applicable to common shareholders | $497,313 | $553,613 | $347,091 |
Shares: | |||
Basic shares outstanding | 85,679 | 85,288 | 84,757 |
Incremental shares from assumed exercise of stock options | 131 | 121 | 277 |
Fully diluted common stock (in shares) | 85,810 | 85,409 | 85,034 |
Excluded antidilutive securities (in shares) | 94 | 251 | 414 |
Earnings per share to common shareholders | |||
Basic (in dollars per share) | $5.79 | $6.48 | $4.08 |
Diluted (in dollars per share) | $5.78 | $6.47 | $4.07 |
ASSET_RETIREMENT_OBLIGATIONS_D
ASSET RETIREMENT OBLIGATIONS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Asset Retirement Obligations | ||
Balance at beginning of year | $154,026,000 | $185,138,000 |
Liabilities incurred | 13,015,000 | 5,547,000 |
Liability settlements and disposals | -27,036,000 | -47,842,000 |
Accretion expense | 7,583,000 | 7,871,000 |
Revisions of estimated liabilities | 25,420,000 | 3,312,000 |
Balance at end of year | 173,008,000 | 154,026,000 |
Less current obligation | 13,216,000 | 27,058,000 |
Long-term asset retirement obligation | 159,792,000 | 126,968,000 |
Liability settlements and disposals related to properties that were sold | $11,200,000 | $4,400,000 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Current Taxes: | |||
Federal (benefit) | ($381,000) | ($1,629,000) | |
State (benefit) | 404,000 | -308,000 | 140,000 |
Current benefit | 404,000 | -689,000 | -1,489,000 |
Deferred Taxes: | |||
Federal | 282,729,000 | 315,165,000 | 199,459,000 |
State | 15,564,000 | 14,535,000 | 8,757,000 |
Deferred taxes | 298,293,000 | 329,700,000 | 208,216,000 |
Total income tax expense (benefits) | 298,697,000 | 329,011,000 | 206,727,000 |
U.S. statutory rate (as a percent) | 35.00% | 35.00% | 35.00% |
Reconciliations of the income tax (benefit) expense | |||
Provision at statutory rate | 282,066,000 | 312,795,000 | 196,192,000 |
Effect of state taxes | 15,826,000 | 14,226,000 | 8,902,000 |
Domestic Production Activities allowance | 567,000 | ||
Other permanent differences | 805,000 | 1,990,000 | 1,066,000 |
Income Tax Expense (Benefit) | 298,697,000 | 329,011,000 | 206,727,000 |
Long-term Assets: | |||
Stock compensation and other accrued amounts | 26,527,000 | 24,815,000 | |
Net operating loss carryforward, net of valuation allowance | 218,584,000 | 207,282,000 | |
Credit carryforward | 4,068,000 | 4,068,000 | |
Net deferred tax assets, long-term | 249,179,000 | 236,165,000 | |
Long-term Liabilities: | |||
Property, plant and equipment | -2,003,885,000 | -1,696,006,000 | |
Net, long-term deferred tax liability | -1,754,706,000 | -1,459,841,000 | |
Current Assets: | |||
Other accrued amounts | 13,475,000 | 16,854,000 | |
Net deferred tax assets, current, total | 13,475,000 | 16,854,000 | |
Net deferred tax liabilities | -1,741,231,000 | -1,442,987,000 | |
U.S. net tax operating loss carryforward | 651,100,000 | ||
U.S. net tax operating loss carryforward recorded to equity when utilized to reduce taxes payable | 83,100,000 | ||
Valuation allowance against net operating losses | 19,100,000 | ||
Alternative minimum tax credit carryforward | 4,100,000 | ||
Unrecognized tax benefits that would impact the entity's effective rate | 0 | 0 | |
Provisions for interest or penalties related to uncertain tax positions | $0 | $0 |
Recovered_Sheet1
Commitments and Contingencies - leases, etc. (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Commitments and Contingencies | |||
Rental expense | $14,300,000 | $13,200,000 | $5,700,000 |
Future minimum payments under leases | |||
2015 | 10,166,000 | ||
2016 | 11,261,000 | ||
2017 | 10,789,000 | ||
2018 | 10,416,000 | ||
2019 | 10,522,000 | ||
Later years | 67,795,000 | ||
Total future minimum lease payments | $120,949,000 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES - Purchases (Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Drilling Commitments [Member] | |
Construction, Drilling and Purchase Commitments | |
Commitments for purchases and other expenditures | $207.70 |
Gathering Facilities and Pipelines Commitments [Member] | |
Construction, Drilling and Purchase Commitments | |
Commitments for purchases and other expenditures | 6.9 |
Commitments to Secure Use of Drilling Rigs [Member] | |
Construction, Drilling and Purchase Commitments | |
Commitments for purchases and other expenditures | $51.70 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Delivery, leases (Details) (Natural Gas Sales Contracts [Member], USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
MMcf | |
Natural Gas Sales Contracts [Member] | |
Delivery Commitments | |
Volume of gas deliverable (in Bcf) | 30,800 |
Delivery term | 12 months |
Financial commitment upon nondelivery | $91.70 |
COMMITMENTS_AND_CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Loss (Details) (USD $) | 3 Months Ended | 0 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2012 | Apr. 01, 2014 | Dec. 31, 2013 | Dec. 13, 2013 | Dec. 31, 2008 |
Hitch Enterprises Case [Member] | |||||
Loss Contingencies | |||||
Accrued litigation expense | $16.40 | ||||
Helmerich and Payne Case [Member] | |||||
Loss Contingencies | |||||
Accrued litigation expense | 119.6 | ||||
Reversal of initial award to plaintiff, disgorgement | 119.6 | ||||
Loss Contingency, Damages Awarded, Value | 3.65 | ||||
Reduction in previously recognized litigation expense and associated long-term liability | 142.8 | ||||
Payments to plaintiff | $15.80 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 12 Months Ended | 5 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-14 |
Helmerich and Payne, Inc [Member] | ||||
Related Party Transactions | ||||
Contract drilling services costs | $18.40 | $17 | $20.80 | |
Subsidiary of Newpark Resources, Inc [Member] | ||||
Related Party Transactions | ||||
Contract drilling services costs | $3.50 | $4.10 | $0.60 |
SUPPLEMENTAL_DISCLOSURE_OF_CAS2
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash paid during the period for: | |||
Interest expense (including capitalized amounts) | $66,167 | $50,754 | $42,420 |
Interest capitalized | 32,623 | 29,098 | 30,255 |
Income taxes | 354 | 205 | 377 |
Cash received for income taxes | $460 | $966 | $49,754 |