Cimarex Energy (CIMXP) 10-Q 5 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - Jun. 30, 2015 - shares	Total
Document and Entity Information
Entity Registrant Name	CIMAREX ENERGY CO
Entity Central Index Key	1,168,054
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	94,456,420
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2

CONDENSED BALANCE SHEETS

CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 856,880	$ 405,862
Receivables, net	319,370	412,108
Oil and gas well equipment and supplies	75,165	89,780
Deferred income taxes	6,961	13,475
Prepaid expenses	8,208	9,356
Other current assets	865	1,223
Total current assets	1,267,449	931,804
Oil and gas properties at cost, using the full cost method of accounting:
Proved properties	15,043,625	14,402,064
Unproved properties and properties under development, not being amortized	599,654	759,149
Gross oil and gas properties	15,643,279	15,161,213
Less - accumulated depreciation, depletion, amortization and impairment	(10,242,417)	(8,257,502)
Net oil and gas properties	5,400,862	6,903,711
Fixed assets, net	223,646	211,031
Goodwill	620,232	620,232
Other assets, net	56,315	58,515
Total assets	7,568,504	8,725,293
Current liabilities:
Accounts payable:	71,486	138,051
Accrued liabilities:	262,727	447,384
Revenue payable	164,671	190,892
Total current liabilities	498,884	776,327
Long-term debt	1,500,000	1,500,000
Deferred income taxes	1,177,289	1,754,706
Other liabilities	196,168	193,628
Total liabilities	$ 3,372,341	$ 4,224,661
Stockholders' equity:
Preferred stock, $0.01 par value, 15,000,000 shares authorized, no shares issued
Common stock, $0.01 par value, 200,000,000 shares authorized, 94,456,420 and 87,592,535 shares issued, respectively	$ 945	$ 876
Paid-in capital	2,737,008	1,997,080
Retained earnings	1,457,298	2,501,574
Accumulated other comprehensive income	912	1,102
Total stockholders' equity	4,196,163	4,500,632
Total liabilities and stockholders' equity	$ 7,568,504	$ 8,725,293

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2015	Dec. 31, 2014
Condensed Consolidated Balance Sheets
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	94,456,420	87,592,535

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenues:
Oil sales	$ 259,344	$ 354,882	$ 455,349	$ 679,953
Gas sales	106,374	172,503	217,336	342,600
NGL sales	49,477	95,470	95,077	185,427
Gas gathering and other	9,141	14,284	17,411	26,748
Gas marketing, net	(53)	(470)	112	1,157
Total revenues	424,283	636,669	785,285	1,235,885
Costs and expenses:
Impairment of oil and gas properties	967,287		1,570,886
Depreciation, depletion and amortization	217,451	194,989	434,229	368,920
Asset retirement obligation	2,042	3,650	3,778	6,868
Production	70,600	86,085	152,811	161,226
Transportation, processing and other operating	43,713	46,478	83,355	90,726
Gas gathering and other	11,306	10,041	20,170	18,825
Taxes other than income	25,980	32,323	47,961	65,944
General and administrative	14,054	16,571	29,992	37,283
Stock compensation	4,988	3,548	10,143	7,272
(Gain) loss on derivative instruments, net		2,454		18,189
Other operating, net	260	112	784	215
Total costs and expenses	1,357,681	396,251	2,354,109	775,468
Operating income (loss)	(933,398)	240,418	(1,568,824)	460,417
Other (income) and expense:
Interest expense	21,297	16,724	42,553	30,766
Capitalized interest	(8,570)	(8,575)	(17,987)	(15,865)
Other, net	(3,854)	(4,129)	(7,439)	(11,084)
Income (loss) before income tax	(942,271)	236,398	(1,585,951)	456,600
Income tax expense (benefit)	(342,056)	87,758	(570,795)	169,503
Net income (loss)	$ (600,215)	$ 148,640	$ (1,015,156)	$ 287,097
Earnings (loss) per share to common stockholders:
Basic (in dollars per share)	$ (6.47)	$ 1.71	$ (10.94)	$ 3.30
Diluted (in dollars per share)	(6.47)	1.70	(10.94)	3.29
Dividends per share	$ 0.16	$ 0.16	$ 0.32	$ 0.32
Comprehensive income (loss):
Net income (loss)	$ (600,215)	$ 148,640	$ (1,015,156)	$ 287,097
Other comprehensive income:
Change in fair value of investments, net of tax	(292)	(56)	(190)	(16)
Total comprehensive income (loss)	$ (600,507)	$ 148,584	$ (1,015,346)	$ 287,081

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net income (loss)	$ (1,015,156)	$ 287,097
Adjustments to reconcile net income to net cash provided by operating activities:
Impairment of oil and gas properties	1,570,886
Depreciation, depletion and amortization	434,229	368,920
Asset retirement obligation	3,778	6,868
Deferred income taxes	(570,795)	169,503
Stock compensation	10,143	7,272
(Gain) loss on derivative instruments		18,189
Settlements on derivative instruments		(5,804)
Changes in non-current assets and liabilities	2,942	(2,436)
Other, net	3,276	2,395
Changes in operating assets and liabilities:
Receivables, net	92,473	(81,702)
Other current assets	16,121	(19,182)
Accounts payable and other current liabilities	(177,352)	18,649
Net cash provided by operating activities	370,545	769,769
Cash flows from investing activities:
Oil and gas expenditures	(599,222)	(1,138,539)
Sales of oil and gas assets and other assets	9,233	1,374
Other capital expenditures	(35,882)	(51,401)
Net cash used by investing activities	(625,871)	(1,188,566)
Cash flows from financing activities:
Net bank debt borrowings		(174,000)
Proceeds from other long-term debt		750,000
Financing and underwriting fees	(22,563)	(11,218)
Dividends paid	(28,129)	(26,022)
Proceeds from sale of common stock	752,100
Proceeds from exercise of stock options and other	4,936	4,061
Net cash provided by financing activities	706,344	542,821
Net change in cash and cash equivalents	451,018	124,024
Cash and cash equivalents at beginning of period	405,862	4,531
Cash and cash equivalents at end of period	$ 856,880	$ 128,555

BASIS OF PRESENTATION

BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2015
Basis of Presentation
Basis of Presentation	1. Basis of Presentation The accompanying unaudited financial statements have been prepared by Cimarex Energy Co. (“Cimarex,” “we” or “us”) pursuant to rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, certain disclosures required by accounting principles generally accepted in the United States and normally included in Annual Reports on Form 10-K have been omitted. Although management believes that our disclosures in these interim financial statements are adequate, they should be read in conjunction with the financial statements, summary of significant accounting policies, and footnotes included in our Annual Report on Form 10-K/A for the year ended December 31, 2014 . In the opinion of management, the accompanying financial statements reflect all adjustments necessary to present fairly our financial position, results of operations, and cash flows for the periods and as of the dates shown. We have evaluated subsequent events through the date of this filing. Use of Estimates Areas of significance requiring the use of management’s judgments relate to the estimation of proved oil and gas reserves, the use of proved reserves in calculating depletion, depreciation, and amortization (DD&A), 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. Estimates and judgments also are required in determining allowance for bad debt, impairments of undeveloped properties and other assets, purchase price allocation, valuation of deferred tax assets, fair value measurements and contingencies. Oil and Gas Well Equipment and Supplies Our oil and gas well equipment and supplies are valued at the lower of cost or market using weighted average cost. An analysis of our oil and gas well equipment and supplies was performed and no impairment was required. However, the industry-wide decline in drilling operations has put downward pressure on the price of oil and gas well equipment and supplies. Further declines in future periods could cause us to recognize impairments on these assets. An impairment would not affect cash flow from operating activities, but would adversely affect our net income and stockholders’ equity. Oil and Gas Properties We use the full cost method of accounting for our oil and gas operations. Accounting rules require us to perform a quarterly ceiling test calculation to test our oil and gas properties for possible impairment. If the net capitalized cost of our oil and gas properties subject to amortization (the carrying value) exceeds the ceiling limitation, the excess is charged to expense. The ceiling limitation is equal to 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. Estimated future net cash flows are determined by commodity prices and proved reserve quantities. At March 31, 2015 , the carrying value of our oil and gas properties subject to the test exceeded the calculated value of the ceiling limitation, and we recognized an impairment of $603.6 million ( $383.2 million, net of tax). This impairment resulted from the impact of decreases in the 12-month average trailing prices for oil, natural gas and NGLs utilized in determining the future net cash flows from proved reserves. Due to continued decreases in the 12-month average trailing prices, we recognized an additional impairment of $967.3 million ($ 614.6 million, net of tax) at June 30, 2015. If pricing conditions stay at current levels or decline further, or if there is a negative impact on one or more of the other components of the calculation, we will incur full cost ceiling impairments in future quarters. T he ceiling calculation is not intended to be indicative of the fair market value of our proved reserves or future results . Impairment charges do not affect cash flow from operating activities, but do adversely affect our net income and stockholders’ equity. Any recorded impairment of oil and gas properties is not reversible at a later date. Accounts Receivable, Accounts Payable, and Accrued Liabilities The components of our accounts receivable, accounts payable and accrued liabilities are shown below: June 30, December 31, (in thousands) 2015 2014 Receivables, net of allowance Trade $ $ Oil and gas sales Gas gathering, processing, and marketing Other Receivables, net $ $ Accounts payable Trade $ $ Gas gathering, processing, and marketing Accounts payable $ $ Accrued liabilities Exploration and development $ $ Taxes other than income Other Accrued liabilities $ $ 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). In July 2015, the FASB deferred the effective date by one year to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted, but not before the original effective date of reporting periods beginning after December 15, 2016. We do not intend to adopt the standard early and are currently evaluating the potential impact of this guidance. At this time we do not expect that the adoption of this standard will have a material effect on our financial position or results of operation and related disclosures .

CAPITAL STOCK

CAPITAL STOCK	6 Months Ended
	Jun. 30, 2015
Capital Stock
Capital Stock	2. Capital Stock In May 2015, we completed an underwritten public offering of 6,900,000 shares of common stock, which included 900,000 shares of common stock issued pursuant to an overallotment option to purchase additional shares granted to the underwriters. The stock was sold to the public at $109.00 per share, with a par value of $0.01 , and we received net proceeds of approximately $730 million from the sale of these shares of common stock, after deducting underwriting fees. Authorized capital stock consists of 200 million shares of common stock and 15 million shares of preferred stock. At June 30, 2015 , there were no shares of preferred stock outstanding. A summary of our common stock activity for the six months ended June 30, 2015 follows: (in thousands) Issued and outstanding as of December 31, 2014 Issuance of common stock Issuance of service-based restricted stock awards Restricted stock forfeited and retired Common stock reacquired and retired Option exercises, net of cancellations Issued and outstanding as of June 30, 2015 Dividends In May 2015, the Board of Directors declared a cash dividend of $0.16 per share. The dividend is payable on September 1, 2015, to stockholders of record on August 14, 2015. Future dividend payments will depend on our level of earnings, financing requirements, and other factors considered relevant by the Board of Directors.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	6 Months Ended
	Jun. 30, 2015
STOCK-BASED COMPENSATION
Stock-based Compensation	3. Stock-based Compensation We have recognized stock-based compensation cost as shown below. Historical amounts may not be representative of future amounts as the value of future awards may vary from historical amounts. Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2015 2014 2015 2014 Restricted stock awards Performance stock awards $ $ $ $ Service-based stock awards Stock option awards Less amounts capitalized to oil and gas properties Compensation expense $ $ $ $ The increase in compensation expense is primarily due to performance stock awards granted in December 2014.

ASSET RETIREMENT OBLIGATIONS

ASSET RETIREMENT OBLIGATIONS	6 Months Ended
	Jun. 30, 2015
Asset Retirement Obligations
Asset Retirement Obligations	4. 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 plugging and 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 following table reflects the components of the change in the carrying amount of the asset retirement obligation for the six months ended June 30, 2015 : (in thousands) Asset retirement obligation at January 1, 2015 $ Liabilities incurred Liability settlements and disposals Accretion expense Revisions of estimated liabilities Asset retirement obligation at June 30, 2015 Less current obligation Long-term asset retirement obligation $

LONG-TERM DEBT

LONG-TERM DEBT	6 Months Ended
	Jun. 30, 2015
Long-Term Debt
Long-Term Debt	5. Long-Term Debt Debt at June 30, 2015 and December 31, 2014 consisted of the following: June 30, December 31, (in thousands) 2015 2014 5.875% Senior Notes, due May 1, 2022 $ $ 4.375% Senior Notes, due June 1, 2024 Total long-term debt $ $ All of our long-term debt is senior unsecured debt and is pari passu with respect to the payment of both principal and interest. Bank Debt We have a senior unsecured revolving credit facility (Credit Facility) which matures July 14, 2018. The Credit Facility has a borrowing base of $2.5 billion and aggregate commitments of $1.0 billion. The borrowing base under the Credit Facility is determined at the discretion of the lenders based on the value of our proved reserves. Our borrowing base was reaffirmed in April 2015. The next regular annual redetermination date is scheduled for April 15, 2016. As of June 30, 2015 , we had letters of credit outstanding under the Credit Facility of $2.5 million, leaving an unused borrowing availability of $997.5 million. The Credit Facility also has customary covenants with which we were in compliance as of June 30, 2015 . Senior Notes Each of our senior notes is governed by an indenture containing certain covenants, events of default and other restrictive provisions with which we were in compliance as of June 30, 2015 . Interest on each of the senior notes is payable semi-annually.

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE	6 Months Ended
	Jun. 30, 2015
Earnings (loss) per Share
Earnings (loss) per Share	6. Earnings (loss) per Share The calculations of basic and diluted net earnings (loss) per common share under the two-class method are presented below: Three Months Ended Six Months Ended June 30, June 30, (in thousands, except per share data) 2015 2014 2015 2014 Basic: Net income (loss) $ $ $ $ Participating securities’ share in earnings (1) — — Net income (loss) applicable to common stockholders $ $ $ $ Diluted: Net income (loss) $ $ $ $ Participating securities’ share in earnings (1) — — Net income (loss) applicable to common stockholders $ $ $ $ Shares: Basic shares outstanding Dilutive effect of stock options — — Fully diluted common stock Excluded (2) — Earnings (loss) per share to common stockholders (3): Basic $ $ $ $ Diluted $ $ $ $ (1) Participating securities are not included in undistributed earnings when a loss exists. (2) Inclusion of certain shares would have an anti-dilutive effect. (3) Earnings (loss) per share are based on actual figures rather than the rounded figures presented.

INCOME TAXES

INCOME TAXES	6 Months Ended
	Jun. 30, 2015
Income Taxes
Income Taxes	7. Income Taxes The components of our provision for income taxes are as follows: Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2015 2014 2015 2014 Current taxes (benefit) $ — $ — $ — $ — Deferred taxes (benefit) $ $ $ $ Combined Federal and State effective income tax rate % % % % At December 31, 2014 , we had a U.S. net tax operating loss carryforward of approximately $651.1 million, which will expire in tax years 2031 through 2034. We believe that the carryforward will be utilized before it expires. The amount of 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 June 30, 2015 , we had no unrecognized tax benefits that would impact our effective tax rate and have made no provisions for interest or penalties related to uncertain tax positions. The tax years 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. Our provision for income taxes differed from the U.S. statutory rate of 35% primarily due to state income taxes and non-deductible expenses.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Jun. 30, 2015
Fair Value Measurements
Fair Value Measurements	8. 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 June 30, 2015 and December 31, 2014 : June 30, 2015: Carrying Fair (in thousands) Amount Value Financial Assets (Liabilities): 5.875% Notes due 2022 $ $ 4.375% Notes due 2024 $ $ December 31, 2014: Carrying Fair (in thousands) Amount Value Financial Assets (Liabilities): 5.875% Notes due 2022 $ $ 4.375% Notes due 2024 $ $ Assessing the significance of a particular input to the fair value measurement requires judgment, including the consideration of factors specific to the asset or liability. The fair value (Level 1) of our 4.375% and 5.875% fixed rate notes was based on their last traded value before period end. 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. Most of our accounts receivable balances are uncollateralized and result from transactions with other companies in the oil and gas industry. Concentration of customers may impact our overall credit risk because our customers may be similarly affected by changes in economic or other conditions within the industry. We routinely assess the recoverability of all material accounts receivable to determine their collectability. We accrue a reserve to the allowance for doubtful accounts when it is probable that a receivable will not be collected and the amount of the reserve may be reasonably estimated. At June 30, 2015 and December 31, 2014 , the allowance for doubtful accounts was $1.8 million and $1.5 million , respectively.

DERIVATIVE INSTRUMENTS_HEDGING

DERIVATIVE INSTRUMENTS/HEDGING	6 Months Ended
	Jun. 30, 2015
Derivative Instruments/Hedging
Derivative Instruments/Hedging	9. Derivative Instruments/Hedging We had derivative contracts outstanding during 2014, all of which had settled as of December 31, 2014. As of June 30, 2015, w e had not entered into any new contracts. Subsequent to June 30, 2015, we entered into the following gas hedges: Weighted Average Price Period Type Volume/Day Index (1) Floor Ceiling Jan 16 - Dec 16 Collars 10,000 MMBtu PEPL $ $ (1) PEPL refers to Panhandle Eastern Pipe Line, Tex/OK Mid-Continent Index as quoted in Platt’s Inside FERC. 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 losses from settlements and changes in fair value of our derivative contracts, and the losses only from settlements during the periods shown below. Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2015 2014 2015 2014 Gain (loss) on derivative instruments, net $ — $ $ — $ Settlement gains (losses) $ — $ $ — $

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2015
Commitments and Contingencies
Commitments and Contingencies	10. Commitments and Contingencies Commitments We have commitments of $138.1 million to finish drilling and completing wells in progress at June 30, 2015 . We also have minimum commitments for six drilling rigs of $37.8 million. We had commitments of $6.3 million relating to the construction of gathering facilities and pipelines in New Mexico and Texas . At June 30, 2015 , we had firm sales contracts to deliver approximately 44.3 Bcf of natural gas over the next 40 months. If this gas is not delivered, our financial commitment would be approximately $116.2 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 from which w e can fulfill these obligations. In connection with gas gathering and processing agreements, we have volume commitments over the next seven years. If no gas is delivered, the maximum amount that would be payable under these commitments would be approximately $85.8 million. However, we believe no financial commitment will be due based on our current proved reserves and production levels from which w e can fulfill these obligations. We have other various transportation and delivery commitments in the normal course of business, which approximate $44.1 million . We have various commitments for office space and equipment under operating lease arrangements totaling $101.9 million. All of the noted commitments were routine and made in the ordinary course of our business. Litigation We have various litigation matters related to the ordinary course of our business. We assess the probability of estimable amounts related to those matters in accordance with guidance established by the FASB and adjust our accruals accordingly. Though some of the related claims may be significant, we believe the resolution of them, individually or in the aggregate, would not have a material adverse effect on our financial condition or results of operations after consideration of current accruals. H.B. Krug, et al versus H&P On April 1, 2014, Cimarex paid the plaintiffs $15.8 million for damages, post-judgment interest, and other expenses, 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 will likely change as a result of future legal proceedings.

SUPPLEMENTAL DISCLOSURE OF CASH

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION	6 Months Ended
	Jun. 30, 2015
Supplemental Disclosure of Cash Flow Information:
Supplemental Disclosure of Cash Flow Information:	11. Supplemental Disclosure of Cash Flow Information Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2015 2014 2015 2014 Cash paid during the period for: Interest expense (including capitalized amounts) $ $ $ $ Interest capitalized $ $ $ $ Income taxes $ $ $ $ Cash received for income taxes $ $ $ $

BASIS OF PRESENTATION (Policies

BASIS OF PRESENTATION (Policies)	6 Months Ended
	Jun. 30, 2015
Basis of Presentation
Use of Estimates	Use of Estimates Areas of significance requiring the use of management’s judgments relate to the estimation of proved oil and gas reserves, the use of proved reserves in calculating depletion, depreciation, and amortization (DD&A), 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. Estimates and judgments also are required in determining allowance for bad debt, impairments of undeveloped properties and other assets, purchase price allocation, valuation of deferred tax assets, fair value measurements and contingencies.
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. An analysis of our oil and gas well equipment and supplies was performed and no impairment was required. However, the industry-wide decline in drilling operations has put downward pressure on the price of oil and gas well equipment and supplies. Further declines in future periods could cause us to recognize impairments on these assets. An impairment would not affect cash flow from operating activities, but would adversely affect our net income and stockholders’ equity. Oil and Gas Properties We use the full cost method of accounting for our oil and gas operations. Accounting rules require us to perform a quarterly ceiling test calculation to test our oil and gas properties for possible impairment. If the net capitalized cost of our oil and gas properties subject to amortization (the carrying value) exceeds the ceiling limitation, the excess is charged to expense. The ceiling limitation is equal to 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. Estimated future net cash flows are determined by commodity prices and proved reserve quantities. At March 31, 2015 , the carrying value of our oil and gas properties subject to the test exceeded the calculated value of the ceiling limitation, and we recognized an impairment of $603.6 million ( $383.2 million, net of tax). This impairment resulted from the impact of decreases in the 12-month average trailing prices for oil, natural gas and NGLs utilized in determining the future net cash flows from proved reserves. Due to continued decreases in the 12-month average trailing prices, we recognized an additional impairment of $967.3 million ($ 614.6 million, net of tax) at June 30, 2015. If pricing conditions stay at current levels or decline further, or if there is a negative impact on one or more of the other components of the calculation, we will incur full cost ceiling impairments in future quarters. T he ceiling calculation is not intended to be indicative of the fair market value of our proved reserves or future results . Impairment charges do not affect cash flow from operating activities, but do adversely affect our net income and stockholders’ equity. Any recorded impairment of oil and gas properties is not reversible at a later date.
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). In July 2015, the FASB deferred the effective date by one year to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted, but not before the original effective date of reporting periods beginning after December 15, 2016. We do not intend to adopt the standard early and are currently evaluating the potential impact of this guidance. At this time we do not expect that the adoption of this standard will have a material effect on our financial position or results of operation and related disclosures .

BASIS OF PRESENTATION (Tables)

BASIS OF PRESENTATION (Tables)	6 Months Ended
	Jun. 30, 2015
Basis of Presentation
Schedule of components of receivable accounts, accounts payable, and accrued liabilities	June 30, December 31, (in thousands) 2015 2014 Receivables, net of allowance Trade $ $ Oil and gas sales Gas gathering, processing, and marketing Other Receivables, net $ $ Accounts payable Trade $ $ Gas gathering, processing, and marketing Accounts payable $ $ Accrued liabilities Exploration and development $ $ Taxes other than income Other Accrued liabilities $ $

CAPITAL STOCK (Tables)

CAPITAL STOCK (Tables)	6 Months Ended
	Jun. 30, 2015
Capital Stock
Common stock activity	(in thousands) Issued and outstanding as of December 31, 2014 Issuance of common stock Issuance of service-based restricted stock awards Restricted stock forfeited and retired Common stock reacquired and retired Option exercises, net of cancellations Issued and outstanding as of June 30, 2015

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	6 Months Ended
	Jun. 30, 2015
STOCK-BASED COMPENSATION
Recognition of non-cash stock-based compensation cost	Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2015 2014 2015 2014 Restricted stock awards Performance stock awards $ $ $ $ Service-based stock awards Stock option awards Less amounts capitalized to oil and gas properties Compensation expense $ $ $ $

ASSET RETIREMENT OBLIGATIONS (T

ASSET RETIREMENT OBLIGATIONS (Tables)	6 Months Ended
	Jun. 30, 2015
Asset Retirement Obligations
Change in the carrying amount of the asset retirement obligation	(in thousands) Asset retirement obligation at January 1, 2015 $ Liabilities incurred Liability settlements and disposals Accretion expense Revisions of estimated liabilities Asset retirement obligation at June 30, 2015 Less current obligation Long-term asset retirement obligation $

LONG-TERM DEBT (Tables)

LONG-TERM DEBT (Tables)	6 Months Ended
	Jun. 30, 2015
Long-Term Debt
Summary of debt	June 30, December 31, (in thousands) 2015 2014 5.875% Senior Notes, due May 1, 2022 $ $ 4.375% Senior Notes, due June 1, 2024 Total long-term debt $ $

EARNINGS (LOSS) PER SHARE (Tabl

EARNINGS (LOSS) PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2015
Earnings (loss) per Share
Calculations of basic and diluted net earnings (loss) per common share under the two-class method	Three Months Ended Six Months Ended June 30, June 30, (in thousands, except per share data) 2015 2014 2015 2014 Basic: Net income (loss) $ $ $ $ Participating securities’ share in earnings (1) — — Net income (loss) applicable to common stockholders $ $ $ $ Diluted: Net income (loss) $ $ $ $ Participating securities’ share in earnings (1) — — Net income (loss) applicable to common stockholders $ $ $ $ Shares: Basic shares outstanding Dilutive effect of stock options — — Fully diluted common stock Excluded (2) — Earnings (loss) per share to common stockholders (3): Basic $ $ $ $ Diluted $ $ $ $

INCOME TAXES (Tables)

INCOME TAXES (Tables)	6 Months Ended
	Jun. 30, 2015
Income Taxes
Components of the provision for income taxes	Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2015 2014 2015 2014 Current taxes (benefit) $ — $ — $ — $ — Deferred taxes (benefit) $ $ $ $ Combined Federal and State effective income tax rate % % % %

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Jun. 30, 2015
Fair Value Measurements
Fair value measurement information for certain assets and liabilities	June 30, 2015: Carrying Fair (in thousands) Amount Value Financial Assets (Liabilities): 5.875% Notes due 2022 $ $ 4.375% Notes due 2024 $ $ December 31, 2014: Carrying Fair (in thousands) Amount Value Financial Assets (Liabilities): 5.875% Notes due 2022 $ $ 4.375% Notes due 2024 $ $

DERIVATIVE INSTRUMENTS_HEDGING

DERIVATIVE INSTRUMENTS/HEDGING (Tables)	6 Months Ended
	Jun. 30, 2015
Derivative Instruments/Hedging
Outstanding hedging contracts relative to future production	Weighted Average Price Period Type Volume/Day Index (1) Floor Ceiling Jan 16 - Dec 16 Collars 10,000 MMBtu PEPL $ $ (1) PEPL refers to Panhandle Eastern Pipe Line, Tex/OK Mid-Continent Index as quoted in Platt’s Inside FERC.
Net gains and (losses) from settlements and changes in fair value of derivative contracts	Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2015 2014 2015 2014 Gain (loss) on derivative instruments, net $ — $ $ — $ Settlement gains (losses) $ — $ $ — $

SUPPLEMENTAL DISCLOSURE OF CA27

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (Tables)	6 Months Ended
	Jun. 30, 2015
Supplemental Disclosure of Cash Flow Information:
Supplemental Disclosure of Cash Flow Information	Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2015 2014 2015 2014 Cash paid during the period for: Interest expense (including capitalized amounts) $ $ $ $ Interest capitalized $ $ $ $ Income taxes $ $ $ $ Cash received for income taxes $ $ $ $

BASIS OF PRESENTATION (Details)

BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Mar. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
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	$ 967,287	$ 603,600	$ 1,570,886
Impairment of oil and gas properties, after tax	614,600	$ 383,200
Receivables, net of allowance
Trade	77,680		77,680	$ 134,443
Oil and gas sales	227,868		227,868	259,220
Gas gathering, processing, and marketing	13,795		13,795	18,009
Other	27		27	436
Receivables, net	319,370		319,370	412,108
Accounts payable:
Trade	44,696		44,696	102,276
Gas gathering, processing, and marketing	26,790		26,790	35,775
Accounts payable	71,486		71,486	138,051
Accrued liabilities
Exploration and development	62,970		62,970	200,929
Taxes other than income	23,682		23,682	26,950
Other	176,075		176,075	219,505
Accrued liabilities	$ 262,727		$ 262,727	$ 447,384

CAPITAL STOCK (Details)

CAPITAL STOCK (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	3 Months Ended		6 Months Ended
	May. 31, 2015	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Capital Stock [Line Items]
Price per share sold	$ 109
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01		$ 0.01		$ 0.01
Proceeds from sale of common stock, net of underwriting fees	$ 730
Common stock, shares authorized		200,000,000		200,000,000		200,000,000
Preferred stock, shares authorized		15,000,000		15,000,000		15,000,000
Preferred stock outstanding (in shares)		0		0
Summary of issued and outstanding common stock activity
Beginning balance, shares				87,592,535
Issuance of common stock	6,900,000			6,900,000
Issuance of service-based restricted stock awards, shares				23,000
Restricted stock forfeited and retired, shares				(16,000)
Common stock reacquired and retired, shares				(129,000)
Option exercises, net of cancellations				86,000
Ending balance, shares		94,456,420		94,456,420
Dividends
Cash dividend declared (in dollars per share)	$ 0.16	$ 0.16	$ 0.16	$ 0.32	$ 0.32
Additional Shares Issued [Member]
Summary of issued and outstanding common stock activity
Issuance of common stock	900,000

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Options, Restricted Stock and Unit Awards
Compensation expense before capitalized cost	$ 9,153	$ 6,761	$ 19,727	$ 13,985
Less amounts capitalized to oil and gas properties	(4,165)	(3,213)	(9,584)	(6,713)
Compensation expense	4,988	3,548	10,143	7,272
Restricted Stock [Member]
Options, Restricted Stock and Unit Awards
Compensation expense before capitalized cost	8,506	5,979	18,441	12,430
Performance Based Restricted Stock [Member]
Options, Restricted Stock and Unit Awards
Compensation expense before capitalized cost	4,645	2,867	9,643	5,814
Service Based Restricted Stock [Member]
Options, Restricted Stock and Unit Awards
Compensation expense before capitalized cost	3,861	3,112	8,798	6,616
Employee Stock Option [Member]
Options, Restricted Stock and Unit Awards
Compensation expense before capitalized cost	$ 647	$ 782	$ 1,286	$ 1,555

ASSET RETIREMENT OBLIGATIONS (D

ASSET RETIREMENT OBLIGATIONS (Details) - Jun. 30, 2015 - USD ($) $ in Thousands	Total
Asset Retirement Obligations
Balance at beginning of year	$ 173,008
Liabilities incurred	2,019
Liability settlements and disposals	(13,593)
Accretion expense	3,900
Revisions of estimated liabilities	3,783
Balance at end of year	169,117
Less current obligation	(9,963)
Long-term asset retirement obligation	$ 159,154

LONG-TERM DEBT - Summary (Detai

LONG-TERM DEBT - Summary (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Debt Instrument
Long-term debt	$ 1,500,000	$ 1,500,000
Notes 5.875 Percent [Member]
Debt Instrument
Long-term debt	$ 750,000	$ 750,000
Interest rate (as a percent)	5.875%	5.875%
Notes 4.375 Percent [Member]
Debt Instrument
Long-term debt	$ 750,000	$ 750,000
Interest rate (as a percent)	4.375%	4.375%

LONG-TERM DEBT (Details)

LONG-TERM DEBT (Details) - Line of Credit [Member] $ in Millions	Jun. 30, 2015USD ($)
Debt Instrument
Borrowing base of credit facility	$ 2,500
Bank commitments of credit facility	1,000
Letters of credit outstanding under the credit facility	2.5
Unused borrowing availability	$ 997.5

EARNINGS (LOSS) PER SHARE (Deta

EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Basic:
Net income (loss)	$ (600,215)	$ 148,640	$ (1,015,156)	$ 287,097
Participating securities' share in earnings (in dollars)		(2,320)		(4,464)
Net income (loss) applicable to common stockholders	(600,215)	146,320	(1,015,156)	282,633
Diluted:
Net income (loss)	(600,215)	148,640	(1,015,156)	287,097
Participating securities' share in earnings (in dollars)		(2,316)		(4,457)
Net income (loss) applicable to common stockholders	$ (600,215)	$ 146,324	$ (1,015,156)	$ 282,640
Shares:
Basic shares outstanding	92,831	85,532	92,831	85,532
Dilutive effect of stock options		157		147
Fully diluted common stock (in shares)	92,831	85,689	92,831	85,679
Excluded antidilutive securities (in shares)	1,931		1,931	1
Earnings per share to common shareholders
Basic (in dollars per share)	$ (6.47)	$ 1.71	$ (10.94)	$ 3.30
Diluted (in dollars per share)	$ (6.47)	$ 1.70	$ (10.94)	$ 3.29

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Components of provision for income taxes (in thousands):
Deferred taxes (benefit)	$ (342,056)	$ 87,758	$ (570,795)	$ 169,503
Total income tax expense (benefits)	$ (342,056)	$ 87,758	$ (570,795)	$ 169,503
Combined Federal and State effective income tax rate	36.30%	37.10%	36.00%	37.10%
U.S. net tax operating loss carryforward					$ 651,100
U.S. net tax operating loss carryforward recorded to equity when utilized to reduce taxes payable					83,100
Alternative minimum tax credit carryforward					$ 4,100
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
U.S. statutory rate (as a percent)			35.00%

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Notes 5.875 Percent [Member]
Financial Assets (Liabilities):
Interest rate (as a percent)	5.875%	5.875%
Notes 5.875 Percent [Member] | Fair Value, Inputs, Level 1 [Member]
Financial Assets (Liabilities):
Interest rate (as a percent)	5.875%	5.875%
Notes 4.375 Percent [Member]
Financial Assets (Liabilities):
Interest rate (as a percent)	4.375%	4.375%
Notes 4.375 Percent [Member] | Fair Value, Inputs, Level 1 [Member]
Financial Assets (Liabilities):
Interest rate (as a percent)	4.375%	4.375%
Reported Value Measurement [Member] | Notes 5.875 Percent [Member]
Financial Assets (Liabilities):
Long-term debt	$ (750,000)	$ (750,000)
Reported Value Measurement [Member] | Notes 4.375 Percent [Member]
Financial Assets (Liabilities):
Long-term debt	(750,000)	(750,000)
Estimate of Fair Value Measurement [Member] | Notes 5.875 Percent [Member] | Fair Value, Inputs, Level 1 [Member]
Financial Assets (Liabilities):
Long-term debt	(802,500)	(776,250)
Estimate of Fair Value Measurement [Member] | Notes 4.375 Percent [Member] | Fair Value, Inputs, Level 1 [Member]
Financial Assets (Liabilities):
Long-term debt	$ (742,500)	$ (720,000)

FAIR VALUE MEASUREMENTS - Other

FAIR VALUE MEASUREMENTS - Other instruments (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Allowance for Trade Receivables [Member]
Other Financial Instruments
Aggregate allowance for doubtful accounts	$ 1.8	$ 1.5

DERIVATIVE INSTRUMENTS_HEDGIN38

DERIVATIVE INSTRUMENTS/HEDGING (Details) - Jul. 31, 2015 - Derivative Contract Gas Collar PEPL Index [Member] - Subsequent Event [Member] - Period From January 2016 To December 2016 [Member]	MMBTU / D$ / bbl
Fair values of derivative assets and liabilities
Volume/Day | MMBTU / D	10,000
Weighted Average Price
Floor, weighted average price (in dollars per unit)	2.70
Ceiling, weighted average price (in dollars per unit)	2.85

DERIVATIVE INSTRUMENTS_HEDGIN39

DERIVATIVE INSTRUMENTS/HEDGING (Details) - Jun. 30, 2014 - USD ($) $ in Thousands	Total	Total
Gain (loss) on derivative instruments, net
Gain (loss) on derivative instruments, net	$ (2,454)	$ (18,189)
Gains (losses) from settlement of derivative instruments:
Settlement gains (losses)		(5,804)
Not Designated as Hedging Instrument [Member]
Gain (loss) on derivative instruments, net
Gain (loss) on derivative instruments, net	(2,454)	(18,189)
Gains (losses) from settlement of derivative instruments:
Settlement gains (losses)	$ (1,017)	$ (5,804)

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - Purchases (Details) - 6 months ended Jun. 30, 2015 $ in Millions	USD ($)item
Drilling Commitments [Member]
Construction, Drilling and Purchase Commitments
Commitments for purchases and other expenditures	$ 138.1
Commitments to Secure Use of Drilling Rigs [Member]
Construction, Drilling and Purchase Commitments
Commitments for purchases and other expenditures	$ 37.8
Number of drilling rigs under commitment | item	6
Gathering Facilities and Pipelines Commitments [Member]
Construction, Drilling and Purchase Commitments
Commitments for purchases and other expenditures	$ 6.3

COMMITMENTS AND CONTINGENCIES41

COMMITMENTS AND CONTINGENCIES - Delivery, operating leases (Details) - Jun. 30, 2015 $ in Millions	USD ($)MMcf
Non-cancelable operating leases
Future minimum operating lease arrangements	$ 101.9
Natural Gas Sales Contracts [Member]
Delivery Commitments
Volume of gas deliverable (in Bcf) | MMcf	44,300
Delivery term	40 months
Financial commitment upon nondelivery	$ 116.2
Gas Gathering And Processing Agreements [Member]
Delivery Commitments
Delivery term	7 years
Financial commitment upon nondelivery	$ 85.8
Other Transportation and Delivery Commitments [Member]
Delivery Commitments
Financial commitment upon nondelivery	$ 44.1

COMMITMENTS AND CONTINGENCIES42

COMMITMENTS AND CONTINGENCIES - Loss (Details) $ in Millions	Apr. 01, 2014USD ($)
Helmerich and Payne Case [Member]
Loss Contingencies
Payments to plaintiff	$ 15.8

SUPPLEMENTAL DISCLOSURE OF CA43

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Cash paid during the period for:
Interest expense (including capitalized amounts)	$ 39,277	$ 24,195	$ 40,212	$ 26,290
Interest capitalized	16,583	12,469	16,997	13,557
Income taxes	555	353	556	354
Cash received for income taxes	$ 109	$ 133	$ 409	$ 342