Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 04, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | HALCON RESOURCES CORP | |
Entity Central Index Key | 1,282,648 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 92,638,093 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 09, 2016 | Sep. 30, 2015 | Sep. 09, 2016 | Sep. 30, 2015 | |
Oil, natural gas and natural gas liquids sales: | |||||
Oil | $ 21,260 | ||||
Natural gas | 823 | ||||
Natural gas liquids | 798 | ||||
Total oil, natural gas and natural gas liquids sales | 22,881 | ||||
Other | 226 | ||||
Total operating revenues | 23,107 | ||||
Production: | |||||
Lease operating | 3,791 | ||||
Workover and other | 1,565 | ||||
Taxes other than income | 2,173 | ||||
Gathering and other | 2,637 | ||||
General and administrative | 16,681 | ||||
Depletion, depreciation and accretion | 9,051 | ||||
Full cost ceiling impairment | 420,934 | ||||
Total operating expenses | 456,832 | ||||
Income (loss) from operations | (433,725) | ||||
Other income (expenses): | |||||
Net gain (loss) on derivative contracts | (7,575) | ||||
Interest expense and other, net | (5,479) | ||||
Reorganization items | (556) | ||||
Total other income (expenses) | (13,610) | ||||
Income (loss) before income taxes | (447,335) | ||||
Income tax benefit (provision) | (3,357) | ||||
Net income (loss) | (450,692) | ||||
Preferred dividends and accretion on redeemable noncontrolling interest | (791) | ||||
Net income (loss) available to common stockholders | $ (451,483) | ||||
Net income (loss) per share of common stock: | |||||
Basic (in dollars per share) | $ (4.96) | ||||
Diluted (in dollars per share) | $ (4.96) | ||||
Weighted average common shares outstanding: | |||||
Basic (in shares) | 91,071 | ||||
Diluted (in shares) | 91,071 | ||||
Predecessor | |||||
Oil, natural gas and natural gas liquids sales: | |||||
Oil | $ 74,002 | $ 121,845 | $ 248,064 | $ 404,368 | |
Natural gas | 2,610 | 5,058 | 9,511 | 17,595 | |
Natural gas liquids | 2,488 | 2,615 | 7,929 | 10,572 | |
Total oil, natural gas and natural gas liquids sales | 79,100 | 129,518 | 265,504 | 432,535 | |
Other | 247 | 421 | 1,339 | 1,622 | |
Total operating revenues | 79,347 | 129,939 | 266,843 | 434,157 | |
Production: | |||||
Lease operating | 12,473 | 22,248 | 50,032 | 81,266 | |
Workover and other | 6,801 | 4,769 | 22,507 | 11,614 | |
Taxes other than income | 7,442 | 12,102 | 24,453 | 37,246 | |
Gathering and other | 7,376 | 9,091 | 29,279 | 30,583 | |
Restructuring | 95 | 434 | 5,168 | 2,664 | |
General and administrative | 17,317 | 21,027 | 83,641 | 68,098 | |
Depletion, depreciation and accretion | 25,618 | 77,071 | 120,555 | 297,409 | |
Full cost ceiling impairment | 511,882 | 754,769 | 2,014,518 | ||
Other operating property and equipment impairment | 28,056 | ||||
Total operating expenses | 77,122 | 658,624 | 1,118,460 | 2,543,398 | |
Income (loss) from operations | 2,225 | (528,685) | (851,617) | (2,109,241) | |
Other income (expenses): | |||||
Net gain (loss) on derivative contracts | 17,783 | 204,621 | (17,998) | 216,805 | |
Interest expense and other, net | (16,136) | (57,977) | (122,249) | (180,206) | |
Reorganization items | 913,722 | 913,722 | |||
Gain (loss) on extinguishment of debt | 535,141 | 81,434 | 557,907 | ||
Gain (loss) on extinguishment of Convertible Note and modification of February 2012 Warrants | (8,219) | ||||
Total other income (expenses) | 915,369 | 681,785 | 854,909 | 586,287 | |
Income (loss) before income taxes | 917,594 | 153,100 | 3,292 | (1,522,954) | |
Income tax benefit (provision) | 8,666 | (6,025) | 8,666 | (6,224) | |
Net income (loss) | 926,260 | 147,075 | 11,958 | (1,529,178) | |
Series A preferred dividends | (2,451) | (4,196) | (8,847) | (13,999) | |
Preferred dividends and accretion on redeemable noncontrolling interest | (7,388) | (19,351) | (35,905) | (39,069) | |
Net income (loss) available to common stockholders | $ 916,421 | $ 123,528 | $ (32,794) | $ (1,582,246) | |
Net income (loss) per share of common stock: | |||||
Basic (in dollars per share) | $ 7.58 | $ 1.05 | $ (0.27) | $ (15.28) | |
Diluted (in dollars per share) | $ 6.06 | $ 0.88 | $ (0.27) | $ (15.28) | |
Weighted average common shares outstanding: | |||||
Basic (in shares) | 120,905 | 117,211 | 120,513 | 103,525 | |
Diluted (in shares) | 151,876 | 150,958 | 120,513 | 103,525 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 2,011 | |
Accounts receivable | 125,244 | |
Receivables from derivative contracts | 70,835 | |
Restricted cash | 165 | |
Prepaids and other | 7,713 | |
Total current assets | 205,968 | |
Oil and natural gas properties (full cost method): | ||
Evaluated | 1,202,727 | |
Unevaluated | 329,218 | |
Gross oil and natural gas properties | 1,531,945 | |
Less - accumulated depletion | (429,361) | |
Net oil and natural gas properties | 1,102,584 | |
Other operating property and equipment: | ||
Gas gathering and other operating assets | 38,097 | |
Less - accumulated depreciation | (203) | |
Net other operating property and equipment | 37,894 | |
Other noncurrent assets: | ||
Receivables from derivative contracts | 2,816 | |
Debt issuance costs, net | 0 | |
Funds in escrow and other | 1,786 | |
Total assets | 1,351,048 | |
Current liabilities: | ||
Accounts payable and accrued liabilities | 170,992 | |
Liabilities from derivative contracts | 1,415 | |
Other | 4,938 | |
Total current liabilities | 177,345 | |
Long -term debt, net | 1,004,524 | |
Other noncurrent liabilities: | ||
Liabilities from derivative contracts | 1,122 | |
Asset retirement obligations | 31,082 | |
Other | 4,139 | |
Commitments and contingencies (Note 10) | ||
Stockholders' equity: | ||
Predecessor Preferred stock: 1,000,000 shares of $0.0001 par value authorized; 244,724 shares of 5.75% Cumulative Perpetual Convertible Series A, issued and outstanding | ||
Common stock | 9 | |
Additional paid-in capital | 584,310 | |
Retained Earnings (accumulated deficit) | (451,483) | |
Total stockholders' equity | 132,836 | |
Total liabilities and stockholders' equity | $ 1,351,048 | |
Predecessor | ||
Current assets: | ||
Cash | $ 8,026 | |
Accounts receivable | 173,624 | |
Receivables from derivative contracts | 348,861 | |
Restricted cash | 16,812 | |
Inventory | 4,635 | |
Prepaids and other | 9,270 | |
Total current assets | 556,593 | |
Oil and natural gas properties (full cost method): | ||
Evaluated | 7,060,721 | |
Unevaluated | 1,641,356 | |
Gross oil and natural gas properties | 8,702,077 | |
Less - accumulated depletion | (5,933,688) | |
Net oil and natural gas properties | 2,768,389 | |
Other operating property and equipment: | ||
Gas gathering and other operating assets | 130,090 | |
Less - accumulated depreciation | (22,435) | |
Net other operating property and equipment | 107,655 | |
Other noncurrent assets: | ||
Receivables from derivative contracts | 16,614 | |
Debt issuance costs, net | 7,633 | |
Funds in escrow and other | 1,808 | |
Total assets | 3,458,692 | |
Current liabilities: | ||
Accounts payable and accrued liabilities | 295,085 | |
Other | 163 | |
Total current liabilities | 295,248 | |
Long -term debt, net | 2,873,637 | |
Other noncurrent liabilities: | ||
Liabilities from derivative contracts | 290 | |
Asset retirement obligations | 46,853 | |
Other | 6,264 | |
Commitments and contingencies (Note 10) | ||
Mezzanine equity: | ||
Redeemable noncontrolling interest | 183,986 | |
Stockholders' equity: | ||
Predecessor Preferred stock: 1,000,000 shares of $0.0001 par value authorized; 244,724 shares of 5.75% Cumulative Perpetual Convertible Series A, issued and outstanding | ||
Common stock | 12 | |
Additional paid-in capital | 3,283,097 | |
Retained Earnings (accumulated deficit) | (3,230,695) | |
Total stockholders' equity | 52,414 | |
Total liabilities and stockholders' equity | $ 3,458,692 |
CONDENSED CONSOLIDATED BALANCE4
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Sep. 30, 2016 | |
Stockholders' equity: | ||
Common stock, shares authorized | 1,000,000,000 | |
Common stock, par value (in dollars per share) | $ 0.0001 | |
Common stock, shares issued | 92,638,093 | |
Common stock, shares outstanding | 92,638,093 | |
Predecessor | ||
Stockholders' equity: | ||
Preferred stock, shares authorized | 1,000,000 | |
Preferred stock, par value (in dollars per share) | $ 0.0001 | |
Preferred stock, shares issued | 244,724 | |
Preferred stock, shares outstanding | 244,724 | |
Cumulative Perpetual Convertible Series A (as a percent) | 5.75% | |
Common stock, shares authorized | 1,340,000,000 | |
Common stock, par value (in dollars per share) | $ 0.0001 | |
Common stock, shares issued | 122,523,559 | |
Common stock, shares outstanding | 122,523,559 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balances (Predecessor) at Dec. 31, 2014 | $ 8 | $ 2,995,436 | $ (1,223,275) | $ 1,772,169 | |
Balances (in shares) (Predecessor) at Dec. 31, 2014 | 345 | 85,562 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | Predecessor | (1,922,621) | (1,922,621) | |||
Dividends on Series A preferred stock | Predecessor | $ 1 | 9,801 | (17,979) | (8,177) | |
Dividends on Series A preferred stock (in shares) | Predecessor | 1,354 | ||||
Conversion of Series A preferred stock (in shares) | Predecessor | (100) | 3,258 | |||
Preferred dividends of redeemable noncontrolling interest | Predecessor | (12,614) | (12,614) | |||
Accretion of redeemable noncontrolling interest | Predecessor | (53,561) | (53,561) | |||
Change in fair value of redeemable noncontrolling interest | Predecessor | (645) | (645) | |||
Common stock issuance | Predecessor | 15,356 | 15,356 | |||
Common stock issuance (in shares) | Predecessor | 1,888 | ||||
Common stock issuance on conversion of senior notes | Predecessor | $ 3 | 231,380 | 231,383 | ||
Common stock issuance on conversion of senior notes (in shares) | Predecessor | 28,955 | ||||
Modification of February 2012 Warrants | Predecessor | 14,129 | 14,129 | |||
Offering costs | Predecessor | (1,871) | (1,871) | |||
Long-term incentive plan grants (in shares) | Predecessor | 2,048 | ||||
Long-term incentive plan forfeitures (in shares) | Predecessor | (388) | ||||
Reduction in shares to cover individuals' tax withholding | Predecessor | (947) | (947) | |||
Reduction in shares to cover individuals' tax withholding (in shares) | Predecessor | (153) | ||||
Share-based compensation | Predecessor | 19,813 | 19,813 | |||
Balances (Predecessor) at Dec. 31, 2015 | $ 12 | 3,283,097 | (3,230,695) | 52,414 | |
Balances (in shares) (Predecessor) at Dec. 31, 2015 | 245 | 122,524 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | Predecessor | 11,958 | 11,958 | |||
Conversion of Series A preferred stock (in shares) | Predecessor | (23) | 724 | |||
Preferred dividends of redeemable noncontrolling interest | Predecessor | (9,329) | (9,329) | |||
Accretion of redeemable noncontrolling interest | Predecessor | (26,576) | (26,576) | |||
Cash payment to Preferred Holders | Predecessor | (11,100) | (11,100) | |||
Reverse stock split rounding (in shares) | Predecessor | 5 | ||||
Offering costs | Predecessor | (10) | (10) | |||
Long-term incentive plan forfeitures (in shares) | Predecessor | (517) | ||||
Reduction in shares to cover individuals' tax withholding | Predecessor | (176) | (176) | |||
Reduction in shares to cover individuals' tax withholding (in shares) | Predecessor | (498) | ||||
Share-based compensation | Predecessor | 4,995 | 4,995 | |||
Balances (Predecessor) at Sep. 09, 2016 | $ 12 | 3,254,630 | (3,254,642) | (933,139) | |
Balances at Sep. 09, 2016 | $ 9 | 571,114 | 571,123 | ||
Balances (in shares) (Predecessor) at Sep. 09, 2016 | 222 | 122,238 | |||
Balances (in shares) at Sep. 09, 2016 | 90,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Fair value of equity issued to Predecessor Common Stockholders | Predecessor | (22,176) | (22,176) | |||
Fair value of equity issued to Predecessor Common Stockholders | 554,432 | ||||
Cancellation of equity | Predecessor | $ (12) | (3,254,630) | 3,254,642 | ||
Cancellation of equity (in shares) | Predecessor | (222) | (122,238) | |||
Issuance of common stock and warrants | $ 9 | 571,114 | 571,123 | ||
Issuance of common stock and warrants (in shares) | 90,000 | ||||
Net income (loss) | (450,692) | (450,692) | |||
Preferred dividends of redeemable noncontrolling interest | (791) | (791) | |||
Long-term incentive plan grants (in shares) | 2,638 | ||||
Share-based compensation | 13,196 | 13,196 | |||
Balances at Sep. 30, 2016 | $ 9 | $ 584,310 | $ (451,483) | $ 132,836 | |
Balances (in shares) at Sep. 30, 2016 | 92,638 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 09, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (450,692) | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depletion, depreciation and accretion | 9,051 | ||
Full cost ceiling impairment | 420,934 | ||
Share-based compensation, net | 13,196 | ||
Unrealized loss (gain) on derivative contracts | 30,338 | ||
Non-cash interest and amortization of discount and premium | 377 | ||
Reorganization items | 560 | ||
Accrued settlements on derivative contracts | (22,695) | ||
Other income (expense) | (94) | ||
Change in assets and liabilities: | |||
Accounts receivable | 12,541 | ||
Prepaids and other | (81) | ||
Accounts payable and accrued liabilities | (1,113) | ||
Net cash provided by (used in) operating activities | 12,322 | ||
Cash flows from investing activities: | |||
Oil and natural gas capital expenditures | (10,289) | ||
Other operating property and equipment capital expenditures | (231) | ||
Funds held in escrow and other | (1,721) | ||
Net cash provided by (used in) investing activities | (12,241) | ||
Cash flows from financing activities: | |||
Proceeds from borrowings | 30,000 | ||
Repayments of borrowings | (32,000) | ||
Cash payments to Noteholders and Preferred Holders | (10,013) | ||
Net cash provided by (used in) financing activities | (12,013) | ||
Net increase (decrease) in cash | (11,932) | ||
Cash at beginning of period | 13,943 | ||
Cash at end of period | 2,011 | $ 13,943 | |
Supplemental cash flow information: | |||
Cash paid (received) for reorganization items | (4) | ||
Disclosure of non-cash investing and financing activities: | |||
Asset retirement obligations | 8 | ||
Preferred dividends on redeemable noncontrolling interest paid-in-kind | 791 | ||
Predecessor | |||
Cash flows from operating activities: | |||
Net income (loss) | 11,958 | $ (1,529,178) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depletion, depreciation and accretion | 120,555 | 297,409 | |
Full cost ceiling impairment | 754,769 | 2,014,518 | |
Other operating property and equipment impairment | 28,056 | ||
Share-based compensation, net | 4,876 | 11,245 | |
Unrealized loss (gain) on derivative contracts | 263,732 | 93,972 | |
Amortization and write-off of deferred loan costs | 6,371 | 6,002 | |
Non-cash interest and amortization of discount and premium | 1,515 | 2,029 | |
Reorganization items | (929,084) | ||
Loss (gain) on extinguishment of debt | (81,434) | (557,907) | |
Loss (gain) on extinguishment of Convertible Note and modification of February 2012 Warrants | 8,219 | ||
Accrued settlements on derivative contracts | (37,803) | ||
Other income (expense) | (4,233) | 5,805 | |
Change in assets and liabilities: | |||
Accounts receivable | 47,920 | 75,331 | |
Prepaids and other | (4,329) | 2,216 | |
Accounts payable and accrued liabilities | (45,324) | (59,664) | |
Net cash provided by (used in) operating activities | 175,348 | 332,194 | |
Cash flows from investing activities: | |||
Oil and natural gas capital expenditures | (226,617) | (531,741) | |
Other operating property and equipment capital expenditures | (950) | (9,913) | |
Funds held in escrow and other | (207) | 2,988 | |
Net cash provided by (used in) investing activities | (227,774) | (538,666) | |
Cash flows from financing activities: | |||
Proceeds from borrowings | 886,000 | 1,579,000 | |
Repayments of borrowings | (727,648) | (1,392,000) | |
Cash payments to Noteholders and Preferred Holders | (97,521) | ||
Debt issuance costs | (1,977) | (25,703) | |
Series A preferred dividends | (4,656) | ||
Common stock issued | 15,354 | ||
Offering costs and other | (511) | (2,982) | |
Net cash provided by (used in) financing activities | 58,343 | 169,013 | |
Net increase (decrease) in cash | 5,917 | (37,459) | |
Cash at beginning of period | $ 13,943 | 8,026 | 43,713 |
Cash at end of period | 13,943 | 6,254 | |
Supplemental cash flow information: | |||
Cash paid (received) for reorganization items | 15,362 | ||
Disclosure of non-cash investing and financing activities: | |||
Accrued capitalized interest | (23,966) | (442) | |
Asset retirement obligations | 939 | 2,405 | |
Series A preferred dividends paid in common stock | 9,803 | ||
Preferred dividends on redeemable noncontrolling interest paid-in-kind | 9,329 | 9,340 | |
Accretion of redeemable noncontrolling interest | 26,576 | 29,084 | |
Change in fair value of redeemable noncontrolling interest | 645 | ||
Accrued debt issuance costs | $ 1,176 | ||
Common stock issued on conversion of senior notes | 231,383 | ||
Third Lien Notes issued on conversion of senior notes | $ 1,017,994 |
FINANCIAL STATEMENT PRESENTATIO
FINANCIAL STATEMENT PRESENTATION | 9 Months Ended |
Sep. 30, 2016 | |
FINANCIAL STATEMENT PRESENTATION | |
FINANCIAL STATEMENT PRESENTATION | 1. FINANCIAL STATEMENT PRESENTATION Basis of Presentation and Principles of Consolidation Halcón Resources Corporation (Halcón or the Company) is an independent energy company focused on the acquisition, production, exploration and development of onshore liquids-rich oil and natural gas assets in the United States. The unaudited condensed consolidated financial statements include the accounts of all majority-owned and controlled subsidiaries. The Company operates in one segment focused on oil and natural gas acquisition, production, exploration and development. The Company's oil and natural gas properties are managed as a whole rather than through discrete operating areas. Operational information is tracked by operating area; however, financial performance is assessed as a whole. Allocation of capital is made across the Company's entire property portfolio without regard to operating area. All intercompany accounts and transactions have been eliminated. These unaudited condensed consolidated financial statements reflect, in the opinion of the Company's management, all adjustments, consisting of normal and recurring adjustments, necessary to present fairly the financial position as of, and the results of operations for, the periods presented. During interim periods, Halcón follows the accounting policies disclosed in its Annual Report on Form 10-K, as filed with the United States Securities and Exchange Commission (SEC) on February 26, 2016. Please refer to the notes in the 2015 Annual Report on Form 10-K when reviewing interim financial results, though, as described below, such prior financial statements may not be comparable to the interim financial statements due to the adoption of fresh-start accounting on September 9, 2016. Emergence from Voluntary Reorganization under Chapter 11 On July 27, 2016 (the Petition Date), the Company and certain of its subsidiaries (the Halcón Entities) filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court in the District of Delaware (the Bankruptcy Court) to pursue a joint prepackaged plan of reorganization (the Plan). On September 8, 2016, the Bankruptcy Court entered an order confirming the Plan and on September 9, 2016, the Plan became effective (the Effective Date) and the Halcón Entities emerged from chapter 11 bankruptcy. The Company's subsidiary, HK TMS, LLC which was divested on September 30, 2016, was not part of the chapter 11 bankruptcy filings. See Note 2, "Reorganization," for further details on the Company's chapter 11 bankruptcy and the Plan and Note 4, "Divestiture" for further details on the divestiture of HK TMS, LLC. Upon emergence from chapter 11 bankruptcy, the Company adopted fresh-start accounting in accordance with provisions of the Financial Accounting Standards Board's (FASB) Accounting Standards Codification (ASC) No. 852, "Reorganizations" (ASC 852) which resulted in the Company becoming a new entity for financial reporting purposes on the Effective Date. Upon the adoption of fresh-start accounting, the Company's assets and liabilities were recorded at their fair values as of the fresh-start reporting date, September 9, 2016. As a result of the adoption of fresh-start accounting, the Company's unaudited condensed consolidated financial statements subsequent to September 9, 2016 may not be comparable to its unaudited condensed consolidated financial statements prior to September 9, 2016. See Note 3, "Fresh-start Accounting," for further details on the impact of fresh-start accounting on the Company's unaudited condensed consolidated financial statements. References to "Successor" or "Successor Company" relate to the financial position and results of operations of the reorganized Company subsequent to September 9, 2016. References to "Predecessor" or "Predecessor Company" relate to the financial position and results of operations of the Company prior to, and including, September 9, 2016. Use of Estimates The preparation of the Company's unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the respective reporting periods. Estimates and assumptions that, in the opinion of management of the Company, are significant include oil and natural gas revenue, capital and operating expense accruals, oil and natural gas reserves, depletion relating to oil and natural gas properties, asset retirement obligations, fair value estimates, including estimates of Reorganization Value, Enterprise Value and the fair value of assets and liabilities recorded as a result of the adoption of fresh-start accounting, and income taxes. The Company bases its estimates and judgments on historical experience and on various other assumptions and information believed to be reasonable under the circumstances. Estimates and assumptions about future events and their effects are uncertain and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company's operating environment changes. Actual results may differ from the estimates and assumptions used in the preparation of the Company's unaudited condensed consolidated financial statements. Interim period results are not necessarily indicative of results of operations or cash flows for the full year and accordingly, certain information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States, has been condensed or omitted. The Company has evaluated events or transactions through the date of issuance of these unaudited condensed consolidated financial statements. Accounts Receivable and Allowance for Doubtful Accounts The Company's accounts receivable are primarily receivables from joint interest owners and oil and natural gas purchasers. Accounts receivable are recorded at the amount due, less an allowance for doubtful accounts, when applicable. The Company establishes provisions for losses on accounts receivable if it determines that collection of all or part of the outstanding balance is doubtful. The Company regularly reviews collectability and establishes or adjusts the allowance for doubtful accounts as necessary using the specific identification method. There were no material allowances for doubtful accounts as of September 30, 2016 (Successor) or December 31, 2015 (Predecessor). Other Operating Property and Equipment Gas gathering systems and equipment are recorded at cost. Depreciation is calculated using the straight-line method over a 30-year or 10-year estimated useful life applicable to gas gathering systems and a compressed natural gas facility, respectively. Upon disposition, the cost and accumulated depreciation are removed and any gains or losses are reflected in current operations. Maintenance and repair costs are charged to operating expense as incurred. Material expenditures which increase the life or productive capacity of an asset are capitalized and depreciated over the estimated remaining useful life of the asset. With the adoption of fresh-start accounting, the Company recorded its gas gathering systems and equipment at fair value totaling approximately $16.3 million as of the fresh-start reporting date. Refer to Note 3, "Fresh-start Accounting," for a discussion of the valuation approach used. Other operating assets are recorded at cost. Depreciation is calculated using the straight-line method over the following estimated useful lives: automobiles and computers, three years; computer software, fixtures, furniture and equipment, five years or the lesser of the lease term; trailers, seven years; heavy equipment, ten years; buildings, twenty years and leasehold improvements, lease term. Upon disposition, the cost and accumulated depreciation are removed and any gains or losses are reflected in current operations. Maintenance and repair costs are charged to operating expense as incurred. Material expenditures which increase the life of an asset are capitalized and depreciated over the estimated remaining useful life of the asset. With the adoption of fresh-start accounting, the Company recorded its other operating assets at fair value totaling approximately $21.8 million as of the fresh-start reporting date. Refer to Note 3, "Fresh-start Accounting," for a discussion of the valuation approach used. The Company reviews its gas gathering systems and equipment and other operating assets for impairment in accordance with ASC 360, Property, Plant, and Equipment (ASC 360). ASC 360 requires the Company to evaluate gas gathering systems and equipment and other operating assets for impairment as events occur or circumstances change that would more likely than not reduce the fair value below the carrying amount. If the carrying amount is not recoverable from an asset's undiscounted cash flows, then the Company recognizes an impairment loss for the difference between the carrying amount and the current fair value. The Company also evaluates the remaining useful lives of its gas gathering systems and other operating assets at each reporting period to determine whether events and circumstances warrant a revision to the remaining depreciation periods. For the three months ended March 31, 2016 (Predecessor), the Company recorded a non-cash impairment charge of $28.1 million in "Other operating property and equipment impairment" in the Company's unaudited condensed consolidated statements of operations and in "Gas gathering and other operating assets" in the Company's unaudited condensed consolidated balance sheets related to $32.8 million gross investments in gas gathering infrastructure that were deemed non-economical due to a shift in exploration, drilling and developmental plans in a low commodity price environment. In accordance with ASC 820, Fair Value Measurements and Disclosures (ASC 820), a financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The estimate of the fair value of the Company's gas gathering systems was based on an income approach that estimated future cash flows associated with those assets, which resulted in negative net cash flows due to insufficient throughput of natural gas volumes and certain fixed costs necessary to operate and maintain the assets. This estimation includes the use of unobservable inputs, such as estimated future production, and gathering and compression revenues and operating expenses. The use of these unobservable inputs results in the fair value estimate of the Company's gas gathering systems being classified as Level 3. Recently Issued Accounting Pronouncements In August 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-15, Statement of Cash Flows (Topic 230) (ASU 2016-15). For public business entities, ASU 2016-15 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 and early adoption is permitted. The areas for simplification in this ASU involve addressing eight specific classification issues in the statement of cash flows. An entity should apply the amendments in this ASU using a retrospective transition method. The Company is in the process of assessing the effects of the application of the new guidance. In March 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-09, Compensation—Stock Compensation (ASU 2016-09). For public business entities, ASU 2016-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016 and early adoption is permitted. The areas for simplification in this ASU involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. As there are multiple amendments in this ASU, the FASB has issued guidance on how an entity should apply each amendment, either prospectively or retrospectively. The Company adopted ASU 2016-09 on September 9, 2016. See Note 12, "Stockholders' Equity" for further details. In March 2016, the FASB issued ASU No. 2016-06, Contingent Put and Call Options in Debt Instruments (ASU 2016-06). For public business entities, ASU 2016-06 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016 and early adoption is permitted. ASU 2016-06 provides new guidance that simplifies the analysis of whether a contingent put or call option in a debt instrument qualifies as a separate derivative. An entity should apply the amendments in this ASU on a modified retrospective basis to existing debt instruments as of the beginning of the fiscal year for which the amendments are effective. The Company is in the process of assessing the effects of the application of the new guidance. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02). For public business entities, ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 and early adoption is permitted. The FASB issued ASU 2016-02 to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. An entity should apply the amendments in this ASU on a modified retrospective basis. The transition will require application of the new guidance at the beginning of the earliest comparative period presented in the financial statements. The Company is in the process of assessing the effects of the application of the new guidance. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (ASU 2015-17) to simplify the presentation of deferred income taxes. Under ASU 2015-17, all deferred tax assets and liabilities, along with any related valuation allowance, are required to be classified as noncurrent on the balance sheet. Effective December 31, 2015, the Company early adopted ASU 2015-17, on a prospective basis, which resulted in the reclassification of its current deferred tax assets and liabilities as a non-current deferred tax asset and liability, net of the valuation allowance, in the accompanying unaudited condensed consolidated balance sheets. No prior periods were retrospectively adjusted. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations—Simplifying the Accounting for Measurement-Period Adjustments (ASU 2015-16). For public business entities, ASU 2015-16 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and early adoption is permitted. The amendments in this ASU require that an acquirer, in a business combination, recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, the amendments in this ASU eliminate the requirement to retrospectively account for those adjustments, and instead present separately on the face of the income statement or disclose in the footnotes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods. The adoption of ASU 2015-16 did not have an impact to the Company's financial statements or disclosures. In April 2015, the FASB issued ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (ASU 2015-05). ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. For public business entities, the guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. An entity can elect to adopt the guidance either (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. Early adoption is permitted. The Company adopted prospectively and it did not have a material impact to the Company's financial statements or disclosures. In February 2015, the FASB issued ASU No. 2015-02, Amendments to the Consolidation Analysis (ASU 2015-02). The amendments in ASU 2015-02 eliminate the previous presumption that a general partner controls a limited partner. ASU 2015-02 may impact the Company's accounting for its general partner interest in SBE Partners LP (SBE Partners), which is currently accounted for as an equity method investment. ASU 2015-02 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. Entities may apply the guidance using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the first fiscal year adopted or it may apply the amendment retrospectively. The adoption of ASU 2015-02 did not have an impact on the Company's accounting for its general partner interest in SBE Partners, LP. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (ASU 2014-15). ASU 2014-15 is effective for annual reporting periods (including interim periods within those periods) ending after December 15, 2016. Early application is permitted with companies applying the guidance prospectively. The amendments in ASU 2014-15 create a new ASC Sub-topic 205-40, Presentation of Financial Statements—Going Concern and require management to assess for each annual and interim reporting period if conditions exist that raise substantial doubt about an entity's ability to continue as a going concern. The rule requires various disclosures depending on the facts and circumstances surrounding an entity's ability to continue as a going concern. Effective June 30, 2016, the Company early adopted ASU 2014-15 on a prospective basis. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09). ASU 2014-09 states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in amounts that reflect the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard provides five steps an entity should apply in determining its revenue recognition. In March 2016, ASU 2014-09 was updated with ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08), which provides further clarification on the principal versus agent evaluation. ASU 2014-09 is required to be adopted using either the full retrospective approach, with all prior periods presented adjusted, or the modified retrospective approach, with a cumulative adjustment to retained earnings on the opening balance sheet and is effective for annual reporting periods, and interim periods within that reporting period, beginning after December 15, 2016, or after December 2017, if companies choose to elect the deferred adoption date approved by the FASB. Early adoption is not permitted. The Company is in the process of assessing the effects of the application of the new guidance. |
REORGANIZATION
REORGANIZATION | 9 Months Ended |
Sep. 30, 2016 | |
REORGANIZATION | |
REORGANIZATION | 2. REORGANIZATION On June 9, 2016, the Halcón Entities entered into a restructuring support agreement (the Restructuring Support Agreement) with certain holders of the Company's 13% senior secured third lien notes due 2022 (the Third Lien Noteholders), the Company's 8.875% senior unsecured notes due 2021, 9.25% senior unsecured notes due 2022 and 9.75% senior unsecured notes due 2020 (collectively, the Unsecured Noteholders), the holder of the Company's 8% senior unsecured convertible note due 2020 (the Convertible Noteholder), and certain holders of the Company's 5.75% Series A Convertible Perpetual Preferred Stock. On July 27, 2016, the Halcón Entities filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court in the District of Delaware to effect an accelerated prepackaged bankruptcy restructuring as contemplated in the Restructuring Support Agreement. On September 8, 2016, the Bankruptcy Court entered an order confirming the Company's plan of reorganization (the Plan) and on September 9, 2016, the Halcón Entities emerged from chapter 11 bankruptcy. Upon emergence, pursuant to the terms of the Plan, the following significant transactions occurred: • the Predecessor Company's financing facility under the Predecessor Credit Agreement was refinanced and replaced with the DIP Facility, which was subsequently converted into the Senior Credit Agreement (refer to Note 6, "Debt" for credit agreement definitions and further details regarding the credit agreements); • the Predecessor Company's Second Lien Notes (consisting of $700.0 million in aggregate principal amount outstanding of 8.625% senior secured notes due 2020 and $112.8 million in aggregate principal amount outstanding of 12% senior secured notes due 2022) were unimpaired and reinstated; • the Predecessor Company's Third Lien Notes were cancelled and the Third Lien Noteholders received their pro rata share of 76.5% of the common stock of reorganized Halcón, together with a cash payment of $33.8 million, and accrued and unpaid interest on their notes through May 15, 2016, which interest was paid prior to the chapter 11 bankruptcy filing, in full and final satisfaction of their claims; • the Predecessor Company's Unsecured Notes were cancelled and the Unsecured Noteholders received their pro rata share of 15.5% of the common stock of reorganized Halcón, together with a cash payment of $37.6 million and warrants to purchase 4% of the common stock of reorganized Halcón (with a four year term and an exercise price of $14.04 per share), and accrued and unpaid interest on their notes through May 15, 2016, which interest was paid prior to the chapter 11 bankruptcy filing, in full and final satisfaction of their claims; • the Predecessor Company's Convertible Note was cancelled and the Convertible Noteholder received 4% of the common stock of reorganized Halcón, together with a cash payment of $15.0 million and warrants to purchase 1% of the common stock of reorganized Halcón (with a four year term and an exercise price of $14.04 per share), in full and final satisfaction of their claims; • the general unsecured claims were unimpaired and paid in full in the ordinary course; • all outstanding shares of the Predecessor Company's Series A Preferred Stock were cancelled and the Preferred Holders received their pro rata share of $11.1 million in cash, in full and final satisfaction of their interests; and • all of the Predecessor Company's outstanding shares of common stock were cancelled and the common stockholders received their pro rata share of 4% of the common stock of reorganized Halcón, in full and final satisfaction of their interests. Each of the foregoing percentages of equity in the reorganized Company were as of September 9, 2016 and are subject to dilution from the exercise of the new warrants described above, a management incentive plan discussed further in Note 12 , "Stockholders' Equity," and other future issuances of equity interests. See Note 6, " Debt ," and Note 12, " Stockholders' Equity ," for further information regarding the Company's Successor and Predecessor debt and equity instruments. |
FRESH START ACCOUNTING
FRESH START ACCOUNTING | 9 Months Ended |
Sep. 30, 2016 | |
FRESH START ACCOUNTING | |
FRESH START ACCOUNTING | 3. FRESH-START ACCOUNTING Upon the Company's emergence from chapter 11 bankruptcy, the Company qualified for and adopted fresh-start accounting in accordance with the provisions set forth in ASC 852 as (i) the Reorganization Value of the Company's assets immediately prior to the date of confirmation was less than the post-petition liabilities and allowed claims, and (ii) the holders of the existing voting shares of the Predecessor entity received less than 50% of the voting shares of the emerging entity. Refer to Note 2 , "Reorganization" for the terms of the Plan. Fresh-start accounting requires the Company to present its assets, liabilities, and equity as if it were a new entity upon emergence from bankruptcy. The new entity is referred to as "Successor" or "Successor Company." However, the Company will continue to present financial information for any periods before adoption of fresh-start accounting for the Predecessor Company. The Predecessor and Successor companies may lack comparability, as required in ASC Topic 205, Presentation of Financial Statements (ASC 205). ASC 205 states financial statements are required to be presented comparably from year to year, with any exceptions to comparability clearly disclosed. Therefore, "black-line" financial statements are presented to distinguish between the Predecessor and Successor companies. Adopting fresh-start accounting results in a new financial reporting entity with no beginning retained earnings or deficit as of the fresh-start reporting date. Upon the application of fresh-start accounting, the Company allocated the Reorganization Value (the fair value of the Successor Company's total assets) to its individual assets based on their estimated fair values. The Reorganization Value is intended to represent the approximate amount a willing buyer would value the Company's assets immediately after the reorganization. Reorganization Value is derived from an estimate of Enterprise Value, or the fair value of the Company's long-term debt, stockholders' equity and working capital. The estimated Enterprise Value at the Effective Date is below the midpoint of the Court approved range of $1.6 billion to $1.8 billion, primarily reflecting the decline in forward commodity prices during the period between the Company's analysis performed in advance of the July 2016 chapter 11 bankruptcy filing and the Effective Date. The Enterprise Value was derived from an independent valuation using an asset based methodology of proved reserves, undeveloped acreage, and other financial information, considerations and projections, applying a combination of the income, cost and market approaches as of the fresh-start reporting date of September 9, 2016. The Company's principal assets are its oil and natural gas properties. For purposes of estimating the fair value of the Company's proved, probable and possible reserves, an income approach was used which estimated fair value based on the anticipated cash flows associated with the Company's reserves, risked by reserve category and discounted using a weighted average cost of capital rate of 10.5% for proved reserves and 12.5% for probable and possible reserves. The proved reserve locations were limited to wells expected to be drilled in the Company's five year development plan. Weighted average commodity prices utilized in the determination of the fair value of oil and natural gas properties were $72.30 per barrel of oil, $3.50 per million British thermal units (MMBtu) of natural gas and $12.00 per barrel of oil equivalent of natural gas liquids, after adjustment for transportation fees and regional price differentials. Base pricing was derived from an average of forward strip prices and analysts' estimated prices. In estimating the fair value of the Company's unproved acreage that was not included in the valuation of probable and possible reserves, a market approach was used in which a review of recent transactions involving properties in the same geographical location indicated the fair value of the Company's unproved acreage from a market participant perspective. See further discussion below in the "Fresh-start accounting adjustments" for the specific assumptions used in the valuation of the Company's various other assets. Although the Company believes the assumptions and estimates used to develop Enterprise Value and Reorganization Value are reasonable and appropriate, different assumptions and estimates could materially impact the analysis and resulting conclusions. The assumptions used in estimating these values are inherently uncertain and require judgment. The following table reconciles the Company's Enterprise Value to the estimated fair value of the Successor's common stock as of September 9, 2016 (in thousands): September 9, 2016 Enterprise Value $ Plus: Cash Less: Fair value of debt ) Less: Fair value of redeemable noncontrolling interest ) Less: Fair value of other long-term liabilities ) Less: Fair value of warrants ) ​ ​ ​ ​ ​ Fair Value of Successor common stock $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table reconciles the Company's Enterprise Value to its Reorganization Value as of September 9, 2016 (in thousands): September 9, 2016 Enterprise Value $ Plus: Cash Plus: Current liabilities Plus: Noncurrent asset retirement obligation ​ ​ ​ ​ ​ Reorganization Value of Successor assets $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Condensed Consolidated Balance Sheet The following illustrates the effects on the Company's unaudited condensed consolidated balance sheet due to the reorganization and fresh-start accounting adjustments. The explanatory notes following the table below provide further details on the adjustments, including the Company's assumptions and methods used to determine fair value for its assets and liabilities. Amounts included in the table below are rounded to thousands. As of September 9, 2016 Predecessor Reorganization Fresh-Start Successor Current assets: Cash $ $ ) (1) $ — $ Accounts receivable — — Receivables from derivative contracts — — Restricted cash — — Prepaids and other — ) (7) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Oil and natural gas properties (full cost method): Evaluated — ) (8) Unevaluated — ) (8) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross oil and natural gas properties — ) Less—accumulated depletion ) — (8) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net oil and natural gas properties — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other operating property and equipment: Gas gathering and other operating assets — ) (9) Less—accumulated depreciation ) — (9) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net other operating property and equipment — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other noncurrent assets: Receivables from derivative contracts — — Funds in escrow and other — (10) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current liabilities: Accounts payable and accrued liabilities $ $ (2) $ — $ Liabilities from derivative contracts — — Other — (11)(12) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt, net — ) (13) Liabilities subject to compromise ) (3) — — Other noncurrent liabilities: Liabilities from derivative contracts — — Asset retirement obligations — ) (12) Other — (11)(14) Commitments and contingencies Mezzanine equity: Redeemable noncontrolling interest — ) (14) Stockholders' equity: Preferred stock (Predecessor) — — (4) — — Common Stock (Predecessor) ) (4) — — Common Stock (Successor) — (5) — Additional paid-in capital (Predecessor) ) (4) — — Additional paid-in capital (Successor) — (5) — Retained earnings (accumulated deficit) ) (6) ) (15) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders' equity ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity $ $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reorganization adjustments 1) The table below details cash payments as of September 9, 2016, pursuant to the terms of the Plan described in Note 2 " Reorganization " (in thousands): Payment to Third Lien Noteholders $ Payment to Unsecured Noteholders Payment to Convertible Noteholder Payment to Preferred Holders ​ ​ ​ ​ ​ Total Uses $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2) In connection with the chapter 11 bankruptcy, the Company modified and rejected certain office lease arrangements and paid approximately $3.4 million for these modifications and rejections subsequent to the emergence from chapter 11 bankruptcy. This amount also reflects $10.3 million paid to the Company's restructuring advisors subsequent to the emergence from chapter 11 bankruptcy. 3) Liabilities subject to compromise were as follows (in thousands): 13.0% senior secured third lien notes due 2022 $ 9.25% senior notes due 2022 8.875% senior notes due 2021 9.75% senior notes due 2020 8.0% convertible note due 2020 Accrued interest Office lease modification and rejection fees ​ ​ ​ ​ ​ Liabilities subject to compromise Fair value of equity and warrants issued to Third Lien Noteholders, Unsecured Noteholders and Convertible Noteholder ) Cash payments to Third Lien Noteholders, Unsecured Noteholders and Convertible Noteholder ) Office lease modification and rejection fees ) ​ ​ ​ ​ ​ Gain on settlement of Liabilities subject to compromise $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4) Reflects the cancellation of Predecessor equity, as follows (in thousands): Predecessor Company stock $ Fair value of equity issued to Predecessor common stockholers ) Cash payment to Preferred Holders ) ​ ​ ​ ​ ​ Cancellation of Predecessor Company equity $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5) Reflects the issuance of Successor equity. In accordance with the Plan, the Successor Company issued 3.6 million shares of common stock to the Predecessor Company's existing common stockholders, 68.8 million shares of common stock to the Third Lien Noteholders, 14.0 million shares of common stock to the Unsecured Noteholders, and 3.6 million shares of common stock to the Convertible Noteholder. This amount is subject to dilution by warrants issued to the Unsecured Noteholders and the Convertible Noteholder totaling 4.7 million shares with an exercise price of $14.04 per share and a term of four years. The fair value of the warrants was estimated at $3.52 per share using a Black-Scholes-Merton valuation model. 6) The table below reflects the cumulative effect of the reorganization adjustments discussed above (in thousands): Gain on settlement of Liabilities subject to compromise $ Accrued reorganization items ) Cancellation of Predecessor Company equity ​ ​ ​ ​ ​ Net impact to retained earnings (accumulated deficit) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fresh-start accounting adjustments 7) Reflects the reclassification of tubulars and well equipment to " Oil and natural gas properties ." 8) In estimating the fair value of its oil and natural gas properties, the Company used a combination of the income and market approaches. For purposes of estimating the fair value of the Company's proved, probable and possible reserves, an income approach was used which estimated fair value based on the anticipated cash flows associated with the Company's reserves, risked by reserve category and discounted using a weighted average cost of capital rate of 10.5% for proved reserves and 12.5% for probable and possible reserves. The proved reserve locations were limited to wells expected to be drilled in the Company's five year development plan. Weighted average commodity prices utilized in the determination of the fair value of oil and natural gas properties were $72.30 per barrel of oil, $3.50 per MMBtu of natural gas and $12.00 per barrel of natural gas liquids, after adjustment for transportation fees and regional price differentials. Base pricing was derived from an average of forward strip prices and analysts' estimated prices. In estimating the fair value of the Company's unproved acreage that was not included in the valuation of probable and possible reserves, a market approach was used in which a review of recent transactions involving properties in the same geographical location indicated the fair value of the Company's unproved acreage from a market participant perspective. 9) In estimating the fair value of its gas gathering and other operating assets, the Company used a combination of the income, cost, and market approaches. For purposes of estimating the fair value of its gas gathering assets, an income approach was used that estimated future cash flows associated with the assets over the remaining useful lives. The valuation included such inputs as estimated future production, gathering and compression revenues, and operating expenses that were discounted at a weighted average cost of capital rate of 9.5%. For purposes of estimating the fair value of its other operating assets, the Company used a combination of the market and cost approaches. A market approach was relied upon to value land and computer equipment, and in this valuation approach, recent transactions of similar assets were utilized to determine the value from a market participant perspective. For the remaining other operating assets, a cost approach was used. The estimation of fair value under the cost approach was based on current replacement costs of the assets, less depreciation based on the estimated economic useful lives of the assets and age of the assets. 10) Reflects the adjustment of the Company's equity method investment in SBE Partners, L.P. to fair value based on an income approach, which calculated the discounted cash flows of the Company's share of the partnership's interest in oil and gas proved reserves. The anticipated cash flows of the reserve were risked by reserve category and discounted at 10.5%. Weighted average commodity prices utilized in the determination of the fair value of oil and natural gas properties were $72.30 per barrel of oil, $3.50 per MMBtu of natural gas and $12.00 per barrel of oil equivalent of natural gas liquids, after adjustment for transportation fees and regional price differentials. Base pricing was derived from an average of forward strip prices and analysts' estimated prices. 11) Records an intangible liability of approximately $8.3 million, $4.5 million of which was recorded as current, to adjust the Company's active rig contract to fair value at September 9, 2016. The intangible liability will be amortized over the remaining life of the contract through July 2018. 12) Reflects the adjustment of asset retirement obligations to fair value using estimated plugging and abandonment costs as of September 9, 2016, adjusted for inflation and then discounted at the appropriate credit-adjusted risk free rate ranging from 5.5% to 6.6% depending on the life of the well. The fair value of asset retirement obligations was estimated at $32.5 million, approximately $0.3 million of which was recorded as current. Refer to Note 9, "Asset Retirement Obligations" for further details of the Company's asset retirement obligations. 13) Reflects the adjustment of the 2020 Second Lien Notes and the 2022 Second Lien Notes to fair value. The fair value estimate was based on quoted market prices from trades of such debt on September 9, 2016. Refer to Note 6, "Debt" for definitions of and further information regarding the 2020 Second Lien Notes and 2022 Second Lien Notes. 14) Reflects the adjustment of the Company's redeemable noncontrolling interest and related embedded derivative of HK TMS, LLC to fair value. The fair value of the redeemable noncontrolling interest was estimated at $41.1 million and the embedded derivative was estimated at zero. For purposes of estimating the fair values, an income approach was used that estimated fair value based on the anticipated cash flows associated with HK TMS, LLC's proved reserves, risked by reserve category and discounted using a weighted average cost of capital rate of 12.5%. The value of the redeemable noncontrolling interest was further reduced by a probability factor of the potential assignment of the common shares of HK TMS, LLC to Apollo Global Management, which occurred subsequent to the fresh-start date. Refer to Note 4, "Divestiture," for further information regarding the divestiture of HK TMS, LLC on September 30, 2016. 15) Reflects the cumulative effect of the fresh-start accounting adjustments discussed above. Reorganization Items Reorganization items represent (i) expenses or income incurred subsequent to the Petition Date as a direct result of the Plan, (ii) gains or losses from liabilities settled, and (iii) fresh-start accounting adjustments and are recorded in " Reorganization items " in the Company's unaudited condensed consolidated statements of operations. The following table summarizes the net reorganization items (in thousands): Successor Predecessor Period from Period from Gain on settlement of Liabilities subject to compromise $ — $ Fresh-start accounting adjustments — ) Reorganization professional fees and other ) ) Write-off debt discounts/premiums and debt issuance costs — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain (loss) on reorganization items $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
DIVESTITURE
DIVESTITURE | 9 Months Ended |
Sep. 30, 2016 | |
DIVESTITURE | |
DIVESTITURE | 4. DIVESTITURE On September 30, 2016, certain wholly-owned subsidiaries of the Successor Company executed an Assignment and Assumption Agreement with an affiliate of Apollo Global Management (Apollo) pursuant to which Apollo acquired one hundred percent (100%) of the common shares (the Membership Interests) of HK TMS, LLC (HK TMS), which transaction is referred to as the HK TMS Divestiture. HK TMS was previously a wholly-owned subsidiary and held all of the Successor Company's oil and natural gas properties in the Tuscaloosa Marine Shale (TMS). In exchange for the assignment of the Membership Interests, Apollo assumed all obligations relating to the Membership Interests, which were classified as "Mezzanine Equity" on the unaudited condensed consolidated balance sheets of HK TMS, from and after such date. Refer to Note 11, "Mezzanine Equity" for further details of the accounting considerations for HK TMS. Effective with the HK TMS Divestiture, all of the Successor Company's existing 100% owned subsidiaries are joint and several, full and unconditional guarantors of its long-term debt obligations and the Successor Company has no independent assets or operations. As a consequence, the Successor Company has discontinued the presentation of condensed consolidating financial statements which separately presented HK TMS's non-guarantor financial position, statements of operations and statements of cash flows. |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES | 9 Months Ended |
Sep. 30, 2016 | |
OIL AND NATURAL GAS PROPERTIES | |
OIL AND NATURAL GAS PROPERTIES | 5. OIL AND NATURAL GAS PROPERTIES The Company uses the full cost method of accounting for its investment in oil and natural gas properties. Under this method of accounting, all costs of acquisition, exploration and development of oil and natural gas reserves (including such costs as leasehold acquisition costs, geological expenditures, dry hole costs, tangible and intangible development costs and direct internal costs) are capitalized as the cost of oil and natural gas properties when incurred. To the extent capitalized costs of evaluated oil and natural gas properties, net of accumulated depletion, exceed the discounted future net revenues of proved oil and natural gas reserves, net of deferred taxes, such excess capitalized costs are charged to expense. With the adoption of fresh-start accounting, the Company recorded its oil and natural properties at fair value as of September 9, 2016. The Company's evaluated and unevaluated properties were assigned values of $1.2 billion and $332.1 million, respectively. Refer to Note 3, "Fresh-start Accounting," for a discussion of the valuation approach used. Additionally, the Company assesses all properties classified as unevaluated on a quarterly basis for possible impairment or reduction in value. The Company assesses properties on an individual basis or as a group, if properties are individually insignificant. The assessment includes consideration of the following factors, among others: intent to drill; remaining lease term; geological and geophysical evaluations; drilling results and activity; the assignment of proved reserves; and the economic viability of development if proved reserves are assigned. During any period in which these factors indicate impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and are then subject to depletion and the full cost ceiling test limitation. Investments in unevaluated oil and natural gas properties and exploration and development projects for which depletion expense is not currently recognized, and for which exploration or development activities are in progress, qualify for interest capitalization. The Predecessor Company determined capitalized interest by multiplying the Predecessor Company's weighted-average borrowing cost on debt by the average amount of qualifying costs incurred that were excluded from the full cost pool. The capitalized interest amounts were recorded as additions to unevaluated oil and natural gas properties on the unaudited condensed consolidated balance sheets. For the period from January 1, 2016 through September 9, 2016 (Predecessor) and the nine months ended September 30, 2015 (Predecessor), the Company capitalized interest costs of $68.2 million and $80.0 million, respectively. Upon the adoption of fresh-start accounting, the Successor Company revised its accounting policy on the capitalization of interest and expects future capitalized interest amounts to be minimal. At September 30, 2016, the ceiling test value of the Company's reserves was calculated based on the first-day-of-the-month average for the 12-months ended September 30, 2016 of the West Texas Intermediate (WTI) crude oil spot price of $41.68 per barrel, adjusted by lease or field for quality, transportation fees, and regional price differentials, and the first-day-of-the-month average for the 12-months ended September 30, 2016 of the Henry Hub natural gas price of $2.28 per MMBtu, adjusted by lease or field for energy content, transportation fees, and regional price differentials. Using these prices, the Company's net book value of oil and natural gas properties at September 30, 2016 (Successor) exceeded the ceiling amount by $420.9 million ($268.1 million after taxes, before valuation allowance) which resulted in a ceiling test impairment of that amount for the period of September 10, 2016 through September 30, 2016 (Successor). The impairment at September 30, 2016 reflects the differences between the first day of the month average prices for the preceding twelve months required by Regulation S-X, Rule 4-10 and ASC 932 in calculating the ceiling test and the forward-looking prices required by ASC 852 to estimate the fair value of the Company's oil and natural gas properties on the fresh-start reporting date of September 9, 2016. At June 30, 2016 (Predecessor) and March 31, 2016 (Predecessor), the Company recorded a full cost ceiling impairment before income taxes of $257.9 million ($163.1 million after taxes, before valuation allowance) and $496.9 million ($315.1 million after taxes, before valuation allowance), respectively. The ceiling test impairments at March 31, 2016 and June 30, 2016, were driven by decreases in the first-day-of-the-month 12-month average prices for crude oil used in the ceiling test calculations since December 31, 2015, when the first-day-of-month 12-month average price for crude oil was $50.28 per barrel. The impairment at March 31, 2016 also reflects the transfer of the remaining unevaluated Utica / Point Pleasant (Utica) and TMS properties of approximately $330.4 million and $74.8 million, respectively, to the full cost pool. As discussed above, the Company considers the facts and circumstances around its unevaluated properties that may indicate impairment on a quarterly basis. For the quarter ended March 31, 2016, management concluded that it was no longer probable that capital would be available or approved to continue exploratory drilling activities in the Company's Utica or TMS acreage positions in advance of the related lease expirations due to the Company's evaluation of strategic alternatives to reduce its debt and preserve liquidity in light of continued low commodity prices, together with a reduction of the Company's exploration department and the Company's intent to expend capital only on its most economical and proven areas. At September 30, 2015 (Predecessor), the ceiling test value of the Company's reserves was calculated based on the first-day-of-the-month average for the 12-months ended September 30, 2015 of the WTI crude oil spot price of $59.21 per barrel, adjusted by lease or field for quality, transportation fees, and regional price differentials, and the first-day-of-the-month average for the 12-months ended September 30, 2015 of the Henry Hub natural gas price of $3.06 per MMBtu, adjusted by lease or field for energy content, transportation fees, and regional price differentials. Using these prices, the Company's net book value of oil and natural gas properties at September 30, 2015 (Predecessor) exceeded the ceiling amount by $511.9 million ($322.3 million after taxes before valuation allowance) which resulted in a ceiling test impairment of that amount for the quarter. At June 30, 2015 (Predecessor) and March 31, 2015 (Predecessor), the Company recorded full cost ceiling impairments before income taxes of $948.6 million ($597.3 million after taxes before valuation allowance) and $554.0 million ($348.8 million after taxes before valuation allowance), respectively. The ceiling test impairments were driven by decreases in the first-day-of-the-month average prices for crude oil used in the ceiling test calculations since December 31, 2014, when the first-day-of-the-month average price for crude oil was $94.99 per barrel. The Company recorded the full cost ceiling test impairments in " Full cost ceiling impairment " in the Company's unaudited condensed consolidated statements of operations and in " Accumulated depletion " in the Company's unaudited condensed consolidated balance sheets. Changes in commodity prices, production rates, levels of reserves, future development costs, transfers of unevaluated properties, capital spending, and other factors will determine the Company's ceiling test calculations and impairment analyses in future periods. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2016 | |
DEBT | |
DEBT | 6. DEBT As of September 30, 2016 (Successor) and December 31, 2015 (Predecessor), the Company's long-term debt consisted of the following (in thousands): Successor Predecessor September 30, 2016 December 31, 2015 Successor senior revolving credit facility $ $ — Predecessor senior revolving credit facility — 8.625% senior secured second lien notes due 2020 (1) 12.0% senior secured second lien notes due 2022 (2) 13.0% senior secured third lien notes due 2022 (3)(8) — 9.25% senior notes due 2022 (4)(8) — 8.875% senior notes due 2021 (5)(8) — 9.75% senior notes due 2020 (6)(8) — 8.0% convertible note due 2020 (7)(8) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Amount is net of $12.2 million unamortized debt issuance costs at December 31, 2015 (Predecessor). Amount is net of a $29.3 million discount at September 30, 2016 (Successor). (2) Amount is net of $1.2 million unamortized debt issuance costs at December 31, 2015 (Predecessor). Amount is net of a $7.0 million discount at September 30, 2016 (Successor). (3) Amount is net of $8.4 million unamortized debt issuance costs at December 31, 2015 (Predecessor). (4) Amount is net of $0.8 million unamortized debt issuance costs at December 31, 2015 (Predecessor). (5) Amount is net of a $1.0 million unamortized discount at December 31, 2015 (Predecessor) related to the issuance of the original 2021 Notes. The unamortized premium related to the additional 2021 Notes was approximately $5.5 million at December 31, 2015 (Predecessor). Amount is net of $5.8 million unamortized debt issuance costs at and December 31, 2015 (Predecessor). See "8.875% Senior Notes" below for more details. (6) Amount is net of a $1.9 million unamortized discount at December 31, 2015 (Predecessor) related to the issuance of the original 2020 Notes. The unamortized premium related to the additional 2020 Notes was approximately $2.6 million at December 31, 2015 (Predecessor). Amount is net of $4.3 million unamortized debt issuance costs at December 31, 2015 (Predecessor). See "9.75% Senior Notes" below for more details. (7) Amount is net of a $23.0 million unamortized discount at December 31, 2015 (Predecessor). See "8.0% Convertible Note" below for more details. (8) These notes were cancelled on September 9, 2016 upon emergence from chapter 11 bankruptcy. Contractual interest expense not accrued or recorded on pre-petition debt as a result of the chapter 11 bankruptcy amounted to $25.2 million for the period from July 27, 2016 to September 9, 2016. Successor Senior Revolving Credit Facility On the Effective Date, the Company entered into a senior secured revolving credit agreement (the Senior Credit Agreement) with JPMorgan Chase Bank, N.A., as administrative agent, and certain other financial institutions party thereto, as lenders, which refinanced the DIP facility, discussed below. The Senior Credit Agreement currently provides for a $600.0 million senior secured reserve-based revolving credit facility. The maturity date of the Senior Credit Agreement is the earlier of (i) July 28, 2021 and (ii) the 120th day prior to the February 1, 2020 stated maturity date of the Company's 2020 Second Lien Notes (defined below), if such notes have not been refinanced, redeemed or repaid in full on or prior to such 120th day. The first borrowing base redetermination will be on May 1, 2017 and redeterminations will occur semi-annually thereafter, with the lenders and the Company each having the right to one interim unscheduled redetermination between any two consecutive semi-annual redeterminations. The borrowing base takes into account the estimated value of the Company's oil and natural gas properties, proved reserves, total indebtedness, and other relevant factors consistent with customary oil and natural gas lending criteria. Amounts outstanding under the Senior Credit Agreement bear interest at specified margins over the base rate of 1.75% to 2.75% for ABR-based loans or at specified margins over LIBOR of 2.75% to 3.75% for Eurodollar-based loans. These margins fluctuate based on the Company's utilization of the facility. The Company may elect, at its option, to prepay any borrowings outstanding under the Senior Credit Agreement without premium or penalty (except with respect to any break funding payments which may be payable pursuant to the terms of the Senior Credit Agreement). The Company may be required to make mandatory prepayments under the Senior Credit Agreement in connection with certain borrowing base deficiencies. Additionally, if the Company has outstanding borrowings or letters of credit or reimbursement obligations in respect of letters of credit and the Consolidated Cash Balance (as defined in the Senior Credit Agreement) exceeds $100.0 million as of the close of business on the most recently ended business day, the Company may also be required to make mandatory prepayments. Amounts outstanding under the Senior Credit Agreement are guaranteed by certain of the Company's direct and indirect subsidiaries and secured by a security interest in substantially all of the assets of the Company and its subsidiaries. The Senior Credit Agreement also contains certain financial covenants, including the maintenance of (i) a Total Net Indebtedness Leverage Ratio (as defined in the Senior Credit Agreement) not to exceed 4.75:1.00 initially, determined as of each four fiscal quarter periods and commencing with the fiscal quarter ending September 30, 2016, stepping down to 4.50:1.00 and 4.00:1.00 on September 30, 2017 and March 31, 2019, respectively, and (ii) a Current Ratio (as defined in the Senior Credit Agreement) not to be less than 1.00:1.00, commencing with the fiscal quarter ending December 31, 2016. At September 30, 2016, the Company was in compliance with the financial covenants under the Senior Credit Agreement. The Senior Credit Agreement also contains certain events of default, including non-payment; breaches of representations and warranties; non-compliance with covenants or other agreements; cross-default to material indebtedness; judgments; change of control; and voluntary and involuntary bankruptcy. At September 30, 2016, the Company had approximately $228.0 million of indebtedness outstanding, approximately $5.0 million letters of credit outstanding and approximately $367.0 million of borrowing capacity available under the Senior Credit Agreement. DIP Facility In connection with the chapter 11 bankruptcy proceedings, the Predecessor Company entered into a commitment letter pursuant to which the lenders party thereto committed to provide, subject to certain conditions, a $600.0 million debtor-in-possession senior secured, super-priority revolving credit facility (the DIP Facility) and to replace it upon emergence with a $600.0 million senior secured reserve-based revolving credit facility, discussed above. Proceeds from the DIP Facility were used to refinance borrowings under the Predecessor Credit Agreement (defined below). Availability under the DIP Facility was $500.0 million upon interim approval by the Bankruptcy Court, and rose to $600.0 million upon entry of a final order. The DIP Facility was refinanced by the Senior Credit Agreement, upon emergence from chapter 11 bankruptcy. Loans under the DIP Facility bore interest at specified margins over the base rate of 1.75% to 2.75% for ABR-based loans or at specified margins over LIBOR of 2.75% to 3.75% for Eurodollar-based loans. These margins fluctuated based on the utilization of the DIP Facility. Predecessor Senior Revolving Credit Facility On February 8, 2012, the Predecessor Company entered into a senior secured revolving credit agreement (the Predecessor Credit Agreement) with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto. The Predecessor Credit Agreement provided for a $1.5 billion facility with a borrowing base of $700.0 million. Amounts outstanding under the Predecessor Credit Agreement bore interest at specified margins over the base rate of 1.50% to 2.50% for ABR-based loans or at specified margins over LIBOR of 2.50% to 3.50% for Eurodollar-based loans. These margins fluctuated based on the utilization of the facility. Proceeds from the DIP Facility were used to refinance borrowings under the Company's Predecessor Credit Agreement. 8.625% Senior Secured Second Lien Notes On May 1, 2015, the Company issued $700.0 million aggregate principal amount of its 8.625% senior secured second lien notes due 2020 (the 2020 Second Lien Notes) in a private placement. The 2020 Second Lien Notes were issued at par. The net proceeds from the sale of the 2020 Second Lien Notes were approximately $686.2 million (after deducting offering fees and expenses). The Predecessor Company used the net proceeds from the offering to repay the majority of the then outstanding borrowings under its Predecessor Credit Agreement. The 2020 Second Lien Notes bear interest at a rate of 8.625% per annum, payable semi-annually on February 1 and August 1 of each year. The 2020 Second Lien Notes will mature on February 1, 2020. The 2020 Second Lien Notes are secured by second-priority liens on substantially all of the Company's and its subsidiaries' assets to the extent such assets secure the Company's Senior Credit Agreement and its 2022 Second Lien Notes (defined below) (the Collateral). Pursuant to the terms of an Intercreditor Agreement, dated May 1, 2015, as amended by those certain Priority Confirmation Joinders, dated September 10, 2015 and December 21, 2015, in connection with the issuance of the Third Lien Notes and the 2022 Second Lien Notes (discussed below), respectively (the Intercreditor Agreement), the security interest in those assets that secure the 2020 Second Lien Notes and the guarantees are contractually subordinated to liens that secure the Company's Senior Credit Agreement and certain other permitted indebtedness. Consequently, the 2020 Second Lien Notes and the guarantees are effectively subordinated to the Senior Credit Agreement and such other indebtedness to the extent of the value of such assets. The Collateral does not include any of the assets of the Company's future unrestricted subsidiaries. In accordance with the terms of the Plan, the 2020 Second Lien Notes were unimpaired and reinstated upon the Company's emergence from the chapter 11 bankruptcy. As discussed in Note 3, "Fresh-start Accounting," on September 9, 2016, the Company adjusted the 2020 Second Lien Notes to fair value of $679.0 million by recording a discount of $21.0 million to be amortized over the remaining life of the 2020 Second Lien Notes, using the effective interest method. In addition, on September 28, 2016, the Company, each of its guarantors and U.S. Bank National Association, as trustee, entered into a supplemental indenture (the 2020 Second Lien Note Supplemental Indenture) to the Indenture dated as of May 1, 2015 with respect to the Company's 2020 Second Lien Notes (the 2020 Second Lien Note Indenture). The 2020 Second Lien Note Supplemental Indenture amended the 2020 Second Lien Note Indenture to modify the incurrence of indebtedness, lien and restricted payments covenants. The 2020 Second Lien Note Supplemental Indenture became operative upon the consummation of the consent solicitation on September 30, 2016. The Company paid an aggregate consent fee of approximately $8.6 million to holders of the 2020 Second Lien Notes and recorded an additional discount of approximately $8.6 million. The remaining unamortized discount was $29.3 million at September 30, 2016. 12.0% Senior Secured Second Lien Notes On December 21, 2015, the Company completed the issuance in a private placement of approximately $112.8 million aggregate principal amount of new 12.0% senior secured second lien notes due 2022 (the 2022 Second Lien Notes) in exchange for approximately $289.6 million principal amount of its then outstanding senior unsecured notes, consisting of $116.6 million principal amount of 9.75% senior notes due 2020, $137.7 million principal amount of 8.875% senior notes due 2021 and $35.3 million principal amount of 9.25% senior notes due 2022. At closing, the Predecessor Company paid all accrued and unpaid interest since the respective interest payment dates of the unsecured notes surrendered in the exchange. The Predecessor Company recorded the issuance of the 2022 Second Lien Notes at par. Interest on the 2022 Second Lien Notes accrues at a rate of 12.0% per annum, payable semi-annually on February 15 and August 15 of each year, beginning on February 15, 2016. The 2022 Second Lien Notes will mature on February 15, 2022. The 2022 Second Lien Notes are secured by second-priority liens on the Collateral. Pursuant to the terms of the Intercreditor Agreement, dated December 21, 2015, the security interest in the Collateral securing the 2022 Second Lien Notes and the guarantees are contractually equal with the liens that secure the 2020 Second Lien Notes and contractually subordinated to liens that secure the Company's Senior Credit Agreement and certain other permitted indebtedness. Consequently, the 2022 Second Lien Notes and the guarantees are effectively subordinated to the Senior Credit Agreement and such other indebtedness and effectively equal to the 2020 Second Lien Notes, in each case to the extent of the value of the Collateral. In accordance with the terms of the Plan, the 2022 Second Lien Notes were unimpaired and reinstated upon the Company's emergence from chapter 11 bankruptcy. As discussed in Note 3, "Fresh-start Accounting," on September 9, 2016, the Company adjusted the 2022 Second Lien Notes to fair value of $107.2 million by recording a discount of $5.7 million to be amortized over the remaining life of the 2020 Second Lien Notes, using the effective interest method. In addition, on September 28, 2016, the Company, each of its guarantors and U.S. Bank National Association, as trustee, entered into a supplemental indenture (the 2022 Second Lien Note Supplemental Indenture) to the Indenture dated as of December 21, 2015 with respect to the Company's 2022 Second Lien Notes (the 2022 Second Lien Note Indenture). The 2022 Second Lien Note Supplemental Indenture amended the 2022 Second Lien Note Indenture to modify the incurrence of indebtedness, lien and restricted payments covenants. The 2022 Second Lien Note Supplemental Indenture became operative upon the consummation of the consent solicitation on September 30, 2016. The Company paid an aggregate consent fee of approximately $1.4 million to holders of the 2022 Second Lien Notes and recorded an additional discount of approximately $1.4 million. The remaining unamortized discount was $7.0 million at September 30, 2016. 13.0% Senior Secured Third Lien Notes On September 10, 2015, the Predecessor Company issued approximately $1.02 billion aggregate principal amount of new 13.0% senior secured third lien notes due 2022 (the Third Lien Notes) in a private placement in exchange for approximately $497.2 million principal amount of its then outstanding 9.75% senior notes due 2020, $774.7 million principal amount of its then outstanding 8.875% senior notes due 2021 and $294.4 million principal amount of its then outstanding 9.25% senior notes due 2022 in privately negotiated transactions with certain holders of its senior unsecured notes. The Predecessor Company recorded the issuance of the Third Lien Notes at par and also recognized a $535.1 million net gain on the extinguishment of debt, as a $548.2 million gain on the exchanges was partially offset by the writedown of $13.1 million associated with related issuance costs and discounts and premiums for the respective notes. The net gain was recorded in "Gain (loss) on extinguishment of debt" in the unaudited condensed consolidated statements of operation for the three months ended September 30, 2015 (Predecessor). The Third Lien Notes bore interest at a rate of 13.0% per annum and were scheduled to mature on February 15, 2022. On September 9, 2016, upon emergence from chapter 11 bankruptcy, the Third Lien Notes were cancelled. Refer to Note 2, "Reorganization," for further details. 9.25% Senior Notes On August 13, 2013, the Predecessor Company issued at par $400.0 million aggregate principal amount of 9.25% senior notes due 2022 (the 2022 Notes). The net proceeds from the offering of approximately $392.1 million (after deducting offering fees and expenses) were used to repay a portion of the then outstanding borrowings under the Company's Predecessor Credit Agreement. The 2022 Notes bore interest at a rate of 9.25% per annum and were scheduled to mature on February 15, 2022. During the first quarter of 2016, the Predecessor Company repurchased $15.5 million principal amount of 2022 Notes for cash at prevailing market prices at the time of the transactions and recognized an $11.1 million net gain on the extinguishment of debt. On September 9, 2016, upon emergence from chapter 11 bankruptcy, the 2022 Notes were cancelled. Refer to Note 2, "Reorganization," for further details. 8.875% Senior Notes On November 6, 2012, the Predecessor Company issued $750.0 million aggregate principal amount of its 8.875% senior notes due 2021 (the 2021 Notes), at a price to the initial purchasers of 99.247% of par. The net proceeds from the offering of approximately $725.6 million (after deducting offering fees and expenses) and were used to fund a portion of the cash consideration paid in the Williston Basin Acquisition. On January 14, 2013, the Predecessor Company issued an additional $600.0 million aggregate principal amount of the 2021 Notes at a price to the initial purchasers of 105% of par. The net proceeds from the sale of the additional 2021 Notes of approximately $619.5 million (after offering fees and expenses) were used to repay all of the then outstanding borrowings under the Predecessor Credit Agreement and for general corporate purposes, including funding a portion of the Predecessor Company's 2013 capital expenditures program. These notes were issued as "additional notes" under the indenture governing the 2021 Notes and under the indenture were treated as a single series with substantially identical terms as the 2021 Notes previously issued. The 2021 Notes bore interest at a rate of 8.875% per annum and were scheduled to mature on May 15, 2021. In conjunction with the issuance of the 2021 Notes, the Predecessor Company recorded a discount of approximately $5.7 million to be amortized over the remaining life of the 2021 Notes using the effective interest method. In conjunction with the issuance of the additional 2021 Notes, the Predecessor Company recorded a premium of approximately $30.0 million to be amortized over the remaining life of the additional 2021 Notes using the effective interest method. During the first quarter of 2016, the Predecessor Company repurchased $51.8 million principal amount of the 2021 Notes for cash at prevailing market prices at the time of the transactions and recognized a $47.5 million net gain on the extinguishment of debt. On September 9, 2016, upon emergence from chapter 11 bankruptcy, the 2021 Notes were cancelled. Refer to Note 2, "Reorganization," for further details. 9.75% Senior Notes On July 16, 2012, the Predecessor Company issued $750.0 million aggregate principal amount of 9.75% senior notes due 2020 issued at 98.646% of par (the 2020 Notes). The net proceeds from the offering were approximately $723.1 million (after deducting offering fees and expenses) and were used to fund a portion of the cash consideration paid in the merger with GeoResources, Inc., and the acquisition of certain oil and gas leaseholds located in East Texas. On December 19, 2013, the Predecessor Company issued an additional $400.0 million aggregate principal amount of the 2020 Notes at a price to the initial purchasers of 102.750% of par. The net proceeds from the sale of the additional 2020 Notes of approximately $406.3 million (after deducting offering fees and expenses) were used to repay a portion of the then outstanding borrowings under the Predecessor Credit Agreement. These notes were issued as "additional notes" under the indenture governing the 2020 Notes and under the indenture are treated as a single series with substantially identical terms as the 2020 Notes previously issued. The 2020 Notes bore interest at a rate of 9.75% per annum and were scheduled to mature on July 15, 2020. In conjunction with the issuance of the 2020 Notes, the Predecessor Company recorded a discount of approximately $10.2 million to be amortized over the remaining life of the 2020 Notes using the effective interest method. In conjunction with the issuance of the additional 2020 Notes, the Predecessor Company recorded a premium of approximately $11.0 million to be amortized over the remaining life of the additional 2020 Notes using the effective interest method. During the first quarter of 2016, the Predecessor Company repurchased $24.5 million principal amount of the 2020 Notes for cash at prevailing market prices at the time of the transactions and recognized a $22.8 million net gain on the extinguishment of debt. On September 9, 2016, upon emergence from chapter 11 bankruptcy, the 2020 Notes were cancelled. Refer to Note 2, "Reorganization," for further details. 8.0% Convertible Note On February 8, 2012, the Predecessor Company issued to HALRES, LLC (HALRES), a note in the principal amount of $275.0 million due 2017 (the Convertible Note) together with five year warrants (February 2012 Warrants) for an aggregate purchase price of $275.0 million. The Convertible Note bore interest at a rate of 8% per annum. Through the March 31, 2014 interest payment date, the Predecessor Company was permitted to elect to pay the interest in kind, by adding to the principal of the Convertible Note, all or any portion of the interest due on the Convertible Note. The Predecessor Company elected to pay the interest in kind on March 31, June 30 and September 30, 2012, and added $3.2 million, $5.7 million and $5.8 million of interest incurred, respectively, to the Convertible Note, increasing the principal amount to $289.7 million. On March 9, 2015, the Predecessor Company entered into an amendment (the HALRES Note Amendment) to its Convertible Note, which extended the maturity date of the Convertible Note by three years and adjusted the conversion price of the Convertible Note from $22.50 per share to $12.20 per share. The Predecessor Company accounted for the HALRES Note Amendment as a debt extinguishment and recorded a net gain of $7.3 million in "Gain (loss) on extinguishment of Convertible Note and modification of February 2012 Warrants" in the unaudited condensed consolidated statements of operations for the nine months ended September 30, 2015 (Predecessor). On September 9, 2016, and upon emergence from chapter 11 bankruptcy, the Convertible Note was cancelled. Refer to Note 2, "Reorganization," for further details. Debt Issuance Costs The Company capitalizes certain direct costs associated with the issuance of debt and amortizes such costs over the lives of the respective debt. For the period from January 1, 2016 through September 9, 2016, the Predecessor Company expensed $7.9 million of debt issuance costs in conjunction with debt repurchases, decreases in the borrowing base under the Predecessor Credit Agreement, and refinancing of the Predecessor Credit Agreement. At December 31, 2015 (Predecessor), the Company had approximately $40.3 million of debt issuance costs capitalized related to its Predecessor senior secured and unsecured debt. As part of the Company's reorganization, all debt issuance costs related to the Company's Predecessor debt were extinguished. The debt issuance costs for the Company's Predecessor Credit Agreement are presented in "Debt issuance costs, net" , and the debt issuance costs for the Company's senior unsecured debt are presented in "Long-term debt, net" within total liabilities on the unaudited condensed consolidated balance sheet at December 31, 2015 (Predecessor). |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2016 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 7. FAIR VALUE MEASUREMENTS Pursuant to ASC 820, Fair Value Measurements (ASC 820), the Company's determination of fair value incorporates not only the credit standing of the counterparties involved in transactions with the Company resulting in receivables on the Company's unaudited condensed consolidated balance sheets, but also the impact of the Company's nonperformance risk on its own liabilities. ASC 820 defines fair value as 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). ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy assigns the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Level 2 measurements are inputs that are observable for assets or liabilities, either directly or indirectly, other than quoted prices included within Level 1. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. As required by ASC 820, a financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There were no transfers between fair value hierarchy levels for any period presented. The following tables set forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as of September 30, 2016 (Successor) and December 31, 2015 (Predecessor) (in thousands): Successor September 30, 2016 Level 1 Level 2 Level 3 Total Assets Receivables from derivative contracts $ — $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Liabilities from derivative contracts $ — $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Predecessor December 31, 2015 Level 1 Level 2 Level 3 Total Assets Receivables from derivative contracts $ — $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Liabilities from derivative contracts $ — $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative contracts listed above as Level 2 include collars, swaps and swaptions that are carried at fair value. The Company records the net change in the fair value of these positions in "Net gain (loss) on derivative contracts" in the Company's unaudited condensed consolidated statements of operations. The Company is able to value the assets and liabilities based on observable market data for similar instruments, which resulted in the Company reporting its derivatives as Level 2. This observable data includes the forward curves for commodity prices based on quoted market prices and implied volatility factors related to changes in the forward curves. See Note 8, "Derivative and Hedging Activities" for additional discussion of derivatives. Derivative contracts listed above as Level 3 include extendable collars that are carried at fair value. The significant unobservable inputs for these Level 3 contracts include unpublished forward strip prices and market volatilities. The following table sets forth a reconciliation of changes in the fair value of the Company's extendable collar contracts classified as Level 3 in the fair value hierarchy (in thousands): Significant Unobservable Inputs (Level 3) Successor Predecessor September 30, 2016 December 31, 2015 Beginning Balance $ ) $ ) Net gain (loss) on derivative contracts ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending Balance $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Successor Predecessor Period from September 10, 2016 through September 30, 2016 Period from January 1, 2016 through September 9, 2016 December 31, 2015 Change in unrealized gains (losses) included in earnings related to derivatives still held at September 30, 2016 (Successor), September 9, 2016 (Predecessor), and December 31, 2015 (Predecessor) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company's derivative contracts are with major financial institutions with investment grade credit ratings which are believed to have minimal credit risk. As such, the Company is exposed to credit risk to the extent of nonperformance by the counterparties in the derivative contracts; however, the Company does not anticipate such nonperformance. The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of ASC 825, Financial Instruments . The estimated fair value amounts have been determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair value of cash, accounts receivables and accounts payables approximate their carrying value due to their short-term nature. The estimated fair value of the Company's Senior Credit Agreement approximates carrying value because the interest rates approximate current market rates. The following table presents the estimated fair values of the Company's fixed interest rate debt instruments as of September 30, 2016 (Successor) and December 31, 2015 (Predecessor) (excluding discounts, premiums and debt issuance costs) (in thousands): Successor Predecessor September 30, 2016 December 31, 2015 Debt Principal Amount Estimated Fair Value Principal Amount Estimated Fair Value 8.625% senior secured second lien notes $ $ $ $ 12.0% senior secured second lien notes 13.0% senior secured third lien notes (1) — — 9.25% senior notes (1) — — 8.875% senior notes (1) — — 9.75% senior notes (1) — — 8.0% convertible note (1) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) These notes were cancelled on September 9, 2016 upon emergence from chapter 11 bankruptcy. The fair value of the Company's fixed interest rate debt instruments was calculated using Level 2 criteria. The fair value of the Company's senior notes is based on quoted market prices from trades of such debt. The fair value of the Predecessor Company's Convertible Note was based on published market prices and risk-free rates. On September 9, 2016, the Company emerged from chapter 11 bankruptcy and adopted fresh-start accounting, which resulted in the Company becoming a new entity for financial reporting purposes. Upon the adoption of fresh-start accounting, the Company's assets and liabilities were recorded at their fair values as of the fresh-start reporting date, September 9, 2016. See Note 3, "Fresh-start Accounting," for a detailed discussion of the fair value approaches used by the Company. During the three months ended March 31, 2016 (Predecessor), the Company recorded a non-cash impairment charge of $28.1 million related to its gas gathering systems. See Note 1, "Financial Statement Presentation," for a discussion of the valuation approach used and the classification of the estimate within the fair value hierarchy. As discussed in Note 6, " Debt " and in Note 12, " Stockholders' Equity ," on May 6, 2015 (Predecessor), the HALRES Note Amendment and the Warrant Amendment became effective. The fair value estimates for the Convertible Note and the February 2012 Warrants included the use of observable inputs such as the Predecessor Company's stock price, expected volatility, and credit spread and the risk-free rate. The use of these observable inputs results in the fair value estimates being classified as Level 2. The Company follows the provisions of ASC 820 for nonfinancial assets and liabilities measured at fair value on a non-recurring basis. These provisions apply to the Company's initial recognition of asset retirement obligations for which fair value is used. The asset retirement obligation estimates are derived from historical costs and management's expectation of future cost environments; consequently, the Company has designated these liabilities as Level 3. See Note 9, " Asset Retirement Obligations ," for a reconciliation of the beginning and ending balances of the liability for the Company's asset retirement obligations. |
DERIVATIVE AND HEDGING ACTIVITI
DERIVATIVE AND HEDGING ACTIVITIES | 9 Months Ended |
Sep. 30, 2016 | |
DERIVATIVE AND HEDGING ACTIVITIES | |
DERIVATIVE AND HEDGING ACTIVITIES | 8. DERIVATIVE AND HEDGING ACTIVITIES The Company is exposed to certain risks relating to its ongoing business operations, including commodity price risk and interest rate risk. Derivative contracts are utilized to economically hedge the Company's exposure to price fluctuations and reduce the variability in the Company's cash flows associated with anticipated sales of future oil and natural gas production. When derivative contracts are available at terms (or prices) acceptable to the Company, it generally hedges a substantial, but varying, portion of anticipated oil and natural gas production for future periods. Derivatives are carried at fair value on the unaudited condensed consolidated balance sheets as assets or liabilities, with the changes in the fair value included in the unaudited condensed consolidated statements of operations for the period in which the change occurs. The Company's hedge policies and objectives may change significantly as its operational profile changes and/or commodities prices change. The Company does not enter into derivative contracts for speculative trading purposes. It is the Company's policy to enter into derivative contracts only with counterparties that are creditworthy financial institutions determined by management as competent and competitive market makers. The Company did not post collateral under any of its derivative contracts as they are secured under the Company's Senior Credit Agreement or are uncollateralized trades. At September 30, 2016 (Successor) and December 31, 2015 (Predecessor), the Company's crude oil and natural gas derivative positions consisted of swaps, swaptions, costless put/call "collars," and extendable costless collars. Swaps are designed so that the Company receives or makes payments based on a differential between fixed and variable prices for crude oil and natural gas. Swaptions are swap contracts that may be extended annually at the option of the counterparty on a designated date. A costless collar consists of a sold call, which establishes a maximum price the Company will receive for the volumes under contract and a purchased put that establishes a minimum price. Extendable collars are costless put/call contracts that may be extended annually at the option of the counterparty on a designated date. The Company has elected not to designate any of its derivative contracts for hedge accounting. Accordingly, the Company records the net change in the mark-to-market valuation of these derivative contracts, as well as payments and receipts on settled derivative contracts, in "Net gain (loss) on derivative contracts" on the unaudited condensed consolidated statements of operations. At September 30, 2016 (Successor), the Company had 37 open commodity derivative contracts summarized in the following tables: one natural gas collar arrangement, 18 crude oil collar arrangements, 12 crude oil swaps, five crude oil swaptions and one crude oil extendable collar. At December 31, 2015 (Predecessor), the Company had 36 open commodity derivative contracts summarized in the following tables: one natural gas collar arrangement, 16 crude oil collar arrangements, 13 crude oil swaps, five crude oil swaptions and one crude oil extendable collar. All derivative contracts are recorded at fair market value in accordance with ASC 815 and ASC 820 and included in the unaudited condensed consolidated balance sheets as assets or liabilities. The following table summarizes the location and fair value amounts of all derivative contracts in the unaudited condensed consolidated balance sheets as of September 30, 2016 (Successor) and December 31, 2015 (Predecessor) (in thousands): Asset derivative contracts Liability derivative contracts Successor Predecessor Successor Predecessor Derivatives not designated as hedging contracts under ASC 815 Balance September 30, December 31, Balance September 30, December 31, Commodity contracts Current assets—receivables from derivative contracts $ $ Current liabilities—liabilities from derivative contracts $ ) $ — Commodity contracts Other noncurrent assets—receivables from derivative contracts Other noncurrent liabilities—liabilities from derivative contracts ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivatives not designated as hedging contracts under ASC 815 $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table summarizes the location and amounts of the Company's realized and unrealized gains and losses on derivative contracts in the Company's unaudited condensed consolidated statements of operations (in thousands): Amount of gain or (loss) recognized in Successor Predecessor Derivatives not designated as hedging Location of gain or (loss) recognized in Period from Period from Three Commodity contracts: Unrealized gain (loss) on commodity contracts Other income (expenses)—net gain (loss) on derivative contracts $ ) $ ) $ Realized gain (loss) on commodity contracts Other income (expenses)—net gain (loss) on derivative contracts ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total net gain (loss) on derivative contracts $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount of gain or (loss) recognized in Successor Predecessor Period from Period from Nine Months Location of gain or (loss) recognized in Derivatives not designated as hedging Commodity contracts: Unrealized gain (loss) on commodity contracts Other income (expenses)—net gain (loss) on derivative contracts $ ) $ ) $ ) Realized gain (loss) on commodity contracts Other income (expenses)—net gain (loss) on derivative contracts ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total net gain (loss) on derivative contracts $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At September 30, 2016 (Successor) and December 31, 2015 (Predecessor), the Company had the following open crude oil and natural gas derivative contracts: Successor September 30, 2016 Floors Ceilings Period Instrument Commodity Volume in Price / Weighted Price / Weighted October 2016 - December 2016 (1) Collars Natural Gas $4.00 $ $4.22 $ October 2016 - December 2016 (2)(3) Collars Crude Oil 60.00 - 90.00 64.00 - 95.10 October 2016 - December 2016 (4)(5) Swaps Crude Oil 62.00 - 91.73 January 2017 - December 2017 Collars Crude Oil 47.00 - 60.00 52.00 - 76.84 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Predecessor December 31, 2015 Floors Ceilings Period Instrument Commodity Volume in Price / Weighted Price / Weighted January 2016 - June 2016 Collars Crude Oil $90.00 $ $96.85 $ January 2016 - December 2016 Collars Natural Gas 4.00 4.22 January 2016 - December 2016 (2) Collars Crude Oil 60.00 - 90.00 64.00 - 95.10 January 2016 - December 2016 (4) Swaps Crude Oil 62.00 - 91.73 January 2017 - December 2017 Collars Crude Oil 50.00 - 60.00 70.00 - 76.84 (1) Subsequent to September 30, 2016, the Successor Company entered into a natural gas collar for 5,000 MMBtu per day for 2017 at a floor of $3.15 per MMBtu and a ceiling of $3.50 per MMBtu. (2) Includes an outstanding crude oil collar which may be extended by the counterparty at a floor of $60.00 per Bbl and a ceiling of $75.00 per Bbl for a total of 365,000 Bbls for the year ended December 31, 2017. (3) Subsequent to September 30, 2016, the Successor Company entered into crude oil collars totaling 4,000 barrels per day for 2017 at floors ranging from $49.40 to $51.50 per barrel and ceilings ranging from $54.40 to $56.50 per barrel. (4) Includes an outstanding crude oil swap which may be extended by the counterparty at a price of $88.25 per Bbl for a total of 730,000 Bbls for the year ended December 31, 2017. Also includes certain outstanding crude oil swaps which may be extended by the counterparty at a price of $88.00 per Bbl totaling 912,500 Bbls for the year ended December 31, 2017. Includes an outstanding crude oil swap which may be extended by the counterparty at a price of $88.87 per Bbl totaling 547,500 Bbls for the year ended December 31, 2017. (5) Subsequent to September 30, 2016, the Successor Company entered into crude oil swaps totaling 4,000 barrels per day for the fourth quarter of 2016 at $50.00 per barrel. The Company presents the fair value of its derivative contracts at the gross amounts in the unaudited condensed consolidated balance sheets. The following table shows the potential effects of master netting arrangements on the fair value of the Company's derivative contracts at September 30, 2016 (Successor) and December 31, 2015 (Predecessor) (in thousands): Derivative Assets Derivative Liabilities Successor Predecessor Successor Predecessor September 30, December 31, September 30, December 31, Offsetting of Derivative Assets and Liabilities Gross Amounts Presented in the Consolidated Balance Sheet $ $ $ ) $ ) Amounts Not Offset in the Consolidated Balance Sheet ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Amount $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company enters into an International Swap Dealers Association Master Agreement (ISDA) with each counterparty prior to a derivative contract with such counterparty. The ISDA is a standard contract that governs all derivative contracts entered into between the Company and the respective counterparty. The ISDA allows for offsetting of amounts payable or receivable between the Company and the counterparty, at the election of both parties, for transactions that occur on the same date and in the same currency. |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 9 Months Ended |
Sep. 30, 2016 | |
ASSET RETIREMENT OBLIGATIONS | |
ASSET RETIREMENT OBLIGATIONS | 9. ASSET RETIREMENT OBLIGATIONS The Company records an asset retirement obligation (ARO) on oil and natural gas properties when it can reasonably estimate the fair value of an obligation to perform site reclamation, dismantle facilities or plug and abandon costs. For gas gathering systems and equipment, the Company records an ARO when the system is placed in service and it can reasonably estimate the fair value of an obligation to perform site reclamation and other necessary work when it is required. The Company records the ARO liability on the unaudited condensed consolidated balance sheets and capitalizes a portion of the cost in " Oil and natural gas properties " or " Other operating property and equipment " during the period in which the obligation is incurred. The Company records the accretion of its ARO liabilities in " Depletion, depreciation and accretion " expense in the unaudited condensed consolidated statements of operations. The additional capitalized costs are depreciated on a unit-of-production basis or straight-line basis. The Company recorded the following activity related to its ARO liability (in thousands, inclusive of the current portion): Liability for asset retirement obligations as of December 31, 2015 (Predecessor) $ Liabilities settled and divested ) Additions Acquisitions Accretion expense ​ ​ ​ ​ ​ Liability for asset retirement obligations as of September 9, 2016 (Predecessor) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value fresh-start adjustment $ ) ​ ​ ​ ​ ​ Liability for asset retirement obligations as of September 9, 2016 (Successor) $ Liabilities settled and divested (1) ) Additions Accretion expense ​ ​ ​ ​ ​ Liability for asset retirement obligations as of September 30, 2016 (Successor) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) See Note 4, "Divestiture," for further information. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2016 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES Commitments The Company leases corporate office space in Houston, Texas and Denver, Colorado as well as a number of other field office locations. Rent expense was approximately $0.4 million for the period of September 10, 2016 through September 30, 2016 (Successor) and $5.9 million for the period of January 1, 2016 through September 9, 2016 (Predecessor). Rent expense was approximately $6.4 million for the nine months ended September 30, 2015 (Predecessor). In connection with the chapter 11 bankruptcy, the Company modified and rejected certain office lease arrangements and paid approximately $3.4 million for these modifications and rejections subsequent to the emergence from chapter 11 bankruptcy. Future obligations associated with the Company's operating leases are presented in the table below (in thousands): Remaining period in 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ In addition, the Company has commitments for certain equipment under long-term operating lease agreements, namely drilling rigs, with various expiration dates through 2018. In the first quarter of 2016, the Company entered into an amendment to one of its drilling rig contracts with an original term ending date of August 31, 2016, whereby, as of April 5, 2016 (Predecessor), the Company early terminated the rig contract, incurred a termination fee of approximately $1.2 million and reduced its 2016 drilling commitments by extending part of the contract term on another of its drilling rig contracts out further in 2018. In January 2015, the Company made the decision to early terminate a drilling rig contract in response to the decline in crude oil prices, and the Company incurred an early termination fee of $6.0 million, paid over the first half of 2015 (Predecessor). If certain requirements are not met by two separate trigger dates, the first being January 1, 2017 and the second being January 12, 2020, the Company may incur up to an additional $3.0 million in connection with this drilling rig contract. Rig termination fees are expensed as incurred within "Gathering and other" on the unaudited condensed consolidated statements of operations. In addition, the Company has two drilling rig commitments, for which the Company is incurring a stacking fee of $16,000 and $17,000 per day. The contract terms for these drilling rig commitments extend through the second quarter of 2017 and 2018, respectively. Rig stacking fees are expensed as incurred within " Gathering and other " on the unaudited condensed consolidated statements of operations. Early termination of the Company's additional drilling rig commitments would result in termination penalties approximating $13.0 million, which would be in lieu of the remaining $18.2 million of drilling rig commitments as of September 30, 2016 (Successor). The Company has entered into various long-term gathering, transportation and sales contracts with respect to production from the Bakken/Three Forks formations in North Dakota. As of September 30, 2016 (Successor), the Company had in place eight long-term crude oil contracts and five long-term natural gas contracts in this area. Under the terms of these contracts, the Company has committed a substantial portion of its Bakken/Three Forks production for periods ranging from one to ten years from the date of first production. The sales prices under these contracts are based on posted market rates. Historically, the Company has been able to meet its delivery commitments. Contingencies From time to time, the Company may be a plaintiff or defendant in a pending or threatened legal proceeding arising in the normal course of its business. While the outcome and impact of currently pending legal proceedings cannot be determined, the Company's management and legal counsel believe that the resolution of these proceedings through settlement or adverse judgment will not have a material effect on the Company's unaudited condensed consolidated operating results, financial position or cash flows. |
MEZZANINE EQUITY
MEZZANINE EQUITY | 9 Months Ended |
Sep. 30, 2016 | |
MEZZANINE EQUITY | |
MEZZANINE EQUITY | 11. MEZZANINE EQUITY On June 16, 2014 (Predecessor), funds and accounts managed by Apollo contributed $150 million in cash to HK TMS, a Delaware limited liability company, which was then wholly owned by the Company and held all of the Company's undeveloped acreage in the TMS formation, located in Mississippi and Louisiana, in exchange for the issuance by HK TMS of 150,000 preferred shares. At the closing, the Company also contributed $50 million in cash to HK TMS. Holders of the HK TMS preferred shares were to receive quarterly cash dividends of 8% cumulative perpetual per annum, subject to HK TMS' option to pay such dividends "in-kind" through the issuance of additional preferred shares. The preferred shares were expected to be automatically redeemed and cancelled when the holders receive cash dividends and distributions on the preferred shares equating to the greater of a 12% annual rate of return plus principal and 1.25 times their investment plus applicable fees (the Redemption Price), subject to adjustment under certain circumstances. The preferred shares had a liquidation preference in the event of dissolution in an amount equal to the Redemption Price plus any unpaid dividends not otherwise included in the calculation of the Redemption Price through the date of liquidation payment. HK TMS was also allowed to redeem the preferred shares at any time after December 31, 2016 by paying the Redemption Price, and under certain circumstances it would have been required to redeem the preferred shares for the Redemption Price plus certain fees. On September 30, 2016, certain wholly-owned subsidiaries of the Successor Company executed an Assignment and Assumption Agreement with an affiliate of Apollo pursuant to which 100% of the Membership Interests in HK TMS were assigned to Apollo. In exchange for the assignment, Apollo assumed all obligations relating to such Membership Interests. See Note 4, "Divestiture," for further information regarding the HK TMS Divestiture. On June 1, 2015 (Predecessor), HK TMS and Apollo entered into an amendment to the original agreement (the HK TMS Amendment) which, among other things, i) committed HK TMS to drill a minimum of 6.5 net wells in each of the five consecutive twelve month periods beginning December 31, 2015 and ii) allowed for the redemption of preferred shares at the Redemption Price between March 1, 2016 and June 30, 2016 at the election of Apollo to the extent there was available cash above the minimum cash balance, which is discussed further below. For any commitment period in which HK TMS did not meet its drilling obligation, HK TMS would have been required to use available cash, above the minimum cash balance, to redeem preferred shares at the Redemption Price. The preferred shares were classified as " Redeemable noncontrolling interest " and included in " Mezzanine equity " between total liabilities and stockholders' equity on the unaudited condensed consolidated balance sheets pursuant to ASC 480-10-S99-3A. The preferred shares were considered probable of becoming redeemable and therefore were accreted up to the estimated required redemption value. The accretion was presented as a deemed dividend and recorded in " Redeemable noncontrolling interest " on the unaudited condensed consolidated balance sheets and within " Preferred dividends and accretion on redeemable noncontrolling interest " on the unaudited condensed consolidated statements of operations. In accordance with ASC 480-10-S99-3A, an adjustment to the carrying amount presented in " Mezzanine equity " was recognized as charges against retained earnings and reduced income available to common shareholders in the calculation of earnings per share. HK TMS was required to maintain a minimum cash balance equal to two quarterly dividend payments, of approximately $3.5 million each, plus $10.0 million, which was presented on the unaudited condensed consolidated balance sheets in " Restricted cash " at December 31, 2015 (Predecessor). In March 2015 (Predecessor), Apollo delivered a withdrawal notice to HK TMS indicating their election not to acquire additional preferred shares in HK TMS (the Withdrawal Notice). Upon issuance of the Withdrawal Notice, HK TMS incurred a fee escalating from $2.50 per share to $20.00 per share for the next eight full fiscal quarters for any preferred shares then outstanding, which began in the quarter ended June 30, 2015 (the Withdrawal Exit Fee). The Withdrawal Exit Fee would have been payable upon redemption of the preferred shares and was recorded at fair value within " Other noncurrent liabilities " on the unaudited condensed consolidated balance sheets at December 31, 2015 (Predecessor). The following table sets forth a reconciliation of the changes in fair value of the embedded derivative associated with the amended transaction, which is classified as Level 3 in the fair value hierarchy (in thousands): Embedded Balance at December 31, 2015 (Predecessor) $ Change in fair value ) ​ ​ ​ ​ ​ Balance at September 9, 2016 (Predecessor) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value fresh-start adjustment $ ) ​ ​ ​ ​ ​ Balance at September 9, 2016 (Successor) and at September 30, 2016 (Successor) $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company recorded the following activity related to the preferred shares recorded in "Mezzanine equity" on the unaudited condensed consolidated balance sheets for the period presented (in thousands, except share amounts): Redeemable Shares Amount Balances at December 31, 2015 (Predecessor) $ Dividends paid in-kind Accretion of redeemable noncontrolling interest — ​ ​ ​ ​ ​ ​ ​ ​ Balances at September 9, 2016 (Predecessor) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value fresh-start adjustment — $ ) ​ ​ ​ ​ ​ ​ ​ ​ Balances at September 9, 2016 (Successor) $ Dividends paid in-kind HK TMS Divestiture (1) ) ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at September 30, 2016 (Successor) — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) See Note 4, "Divestiture," for further information regarding the HK TMS Divestiture. For the period of September 10, 2016 through September 30, 2016 (Successor) and January 1, 2016 through September 9, 2016 (Predecessor), HK TMS issued 791 and 9,329 additional preferred shares to Apollo for dividends paid-in-kind, respectively. For the nine months ended September 30, 2015 (Predecessor), HK TMS issued 9,340 additional preferred shares to Apollo for dividends paid-in-kind. These dividends were presented within " Preferred dividends and accretion on redeemable noncontrolling interest " on the unaudited condensed consolidated statements of operations. Upon the election of in-kind dividends, HK TMS was required to pay a fee of $5.00 per preferred share then outstanding (PIK Exit Fee). Such fees would have been due upon redemption of the preferred shares and were recorded at fair value within " Other noncurrent liabilities " on the unaudited condensed consolidated balance sheets. HK TMS was not included in the chapter 11 bankruptcy filings or the Restructuring Support Agreement discussed in Note 2, " Reorganization. " |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2016 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 12. STOCKHOLDERS' EQUITY Common Stock On September 9, 2016, upon emergence from chapter 11 bankruptcy, all existing shares of Predecessor common stock were cancelled and the Successor Company issued approximately 90.0 million shares of common stock in total to the Predecessor Company's existing common stockholders, Third Lien Noteholders, Unsecured Noteholders, and the Convertible Noteholder. Refer to Note 2, " Reorganization " for further details. On September 9, 2016, upon emergence from chapter 11 bankruptcy, the Company filed an amended and restated certificate of incorporation with the Delaware Secretary of State to provide for (i) the total number of shares of all classes of capital stock that the Company has the authority to issue is 1,001,000,000 of which 1,000,000,000 shares are common stock, par value $0.0001 per share and 1,000,000 shares are preferred stock, par value $0.0001 per share, (ii) a classified board structure, (iii) the right of removal of directors with or without cause by stockholders, and (iv) a restriction on the Company from issuing any non-voting equity securities in violation of Section 1123(a)(6) of chapter 11 of title 11 of the United States Code. Additionally, the Company's 5.75% Series A Convertible Perpetual Preferred Stock (the Series A Preferred), was cancelled pursuant to the Plan, and no shares of Series A Preferred are outstanding. Warrants On September 9, 2016, upon the emergence from chapter 11 bankruptcy, all existing February 2012 warrants were cancelled and the Company issued 3.8 million new warrants to the Unsecured Noteholders and 0.9 million new warrants to the Convertible Noteholder. The warrants in aggregate can be exercised to purchase 4.7 million shares of the Successor Company's common stock at an exercise price of $14.04 per share. The Company allocated approximately $16.7 million of the Enterprise Value to the warrants which is reflected in " Successor Additional paid-in capital " on the unaudited condensed consolidated balance sheet at September 30, 2016 (Successor). The holders are entitled to exercise the warrants in whole or in part at any time prior to expiration on September 9, 2020. See Note 2, " Reorganization " for further details. Incentive Plans Immediately prior to emergence from chapter 11 bankruptcy, the 2006 Long-Term Incentive Plan (Predecessor Incentive Plan) of the Predecessor Company was cancelled and all share-based compensation awards granted thereunder were either vested or cancelled and the former board of directors adopted the 2016 Long-Term Incentive Plan (the 2016 Incentive Plan). An aggregate of 10.0 million shares of the Successor Company's common stock, are available for grant pursuant to awards under the 2016 Incentive Plan in the form of nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance units, performance bonuses, stock awards and other incentive awards. As of September 30, 2016 (Successor), a maximum of 2.4 million shares of common stock remained reserved for issuance under the 2016 Incentive Plan. The Company accounts for share-based payment accruals under authoritative guidance on stock compensation. The guidance requires all share-based payments to employees and directors, including grants of stock options, and restricted stock, to be recognized in the financial statements based on their fair values. For awards granted under the 2016 Incentive Plan subsequent to emerging from chapter 11 bankruptcy and in conjunction with the early adoption of ASU 2016-09, the Company has elected to not apply a forfeiture estimate and will recognize a credit in compensation expense to the extent awards are forfeited. For the period from September 10, 2016 through September 30, 2016 (Successor), the period from July 1, 2016 through September 9, 2016 (Predecessor) and the period from January 1, 2016 through September 9, 2016 (Predecessor) the Company recognized $13.2 million, $1.2 million, and $4.9 million, respectively, of share-based compensation expense. For the three and nine months ended September 30, 2015 (Predecessor), the Company recognized $3.0 million and $11.2 million, respectively, of share-based compensation expense. Share-based compensation expense is recorded as a component of " General and administrative " on the unaudited condensed consolidated statements of operations. Stock Options Immediately prior to emergence from chapter 11 bankruptcy, all outstanding stock options under the Predecessor Incentive Plan were cancelled. Refer to Note 2, "Reorganization," for further details. During the period from September 10, 2016 through September 30, 2016 (Successor), in accordance with the terms of the Plan, the Company granted stock options under the 2016 Incentive Plan covering 5.0 million shares of common stock to employees of the Company. These stock options have an exercise price of $9.24 per share with a weighted average exercise price of $9.24 per share. These awards vest over a three year period at a rate of one-third on the annual anniversary date of the grant and expire ten years from the grant date. At September 30, 2016 (Successor), the Company had $29.8 million of unrecognized compensation expense related to non-vested stock options to be recognized over a weighted-average period of 1.9 years. The following table sets forth the stock option transactions for the period from September 10, 2016 through September 30, 2016 (Successor): Number of Weighted Aggregate (1) (In thousands) Weighted Outstanding at September 9, 2016 (Successor) — $ — $ — — Granted Exercised — — Forfeited — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2016 (Successor) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The intrinsic value of a stock option is the amount by which the current market value of the underlying stock exceeds the exercise price of the option. No stock options were exercised during the period from September 10, 2016 through September 30, 2016 (Successor). The assumptions used in calculating the Black-Scholes-Merton valuation model fair value of the Successor Company's stock options for the period from September 10, 2016 through September 30, 2016 (Successor) are set forth in the following table: Stock Option Weighted average value per option granted during the period $ Assumptions: Stock price volatility (1) % Risk free rate of return % Expected term 6 years (1) Due to the Company's limited historical data, expected volatility was estimated using volatilities of similar entities whose share or option prices and assumptions were publicly available. Restricted Stock Immediately prior to emergence from chapter 11 bankruptcy, all restricted stock awards granted under the Predecessor Incentive Plan were vested. Refer to Note 2, "Reorganization," for further details. During the period from September 10, 2016 through September 30, 2016 (Successor), in accordance with the terms of the Plan, the Company granted 2.6 million shares of restricted stock under the 2016 Incentive Plan to non-employee directors and employees of the Company. These restricted shares were granted at prices ranging from $7.82 to $9.24 per share with a weighted average price of $9.17 per share. Non-employee directors' shares vest six-months from the date of grant. For restricted stock awards granted on September 12, 2016 (Successor), half vested immediately on the date of the grant and the remaining half will vest on the first anniversary of the date of grant. At September 30, 2016 (Successor), the Company had $12.0 million of unrecognized compensation expense related to non-vested restricted stock awards to be recognized over a weighted-average period of 0.9 years. The following table sets forth the restricted stock transactions for the period from September 10, 2016 through September 30, 2016 (Successor): Number of Weighted Aggregate (1) (In thousands) Unvested shares outstanding at September 9, 2016 (Successor) — $ — $ — Granted Vested ) Forfeited — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unvested shares outstanding at September 30, 2016 (Successor) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The intrinsic value of restricted stock was calculated as the closing market price on September 30, 2016 of the underlying stock multiplied by the number of restricted shares. The total fair value of shares vested was $11.5 million for the period from September 10, 2016 to September 30, 2016 (Successor). |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2016 | |
EARNINGS PER COMMON SHARE | |
EARNINGS PER COMMON SHARE | 13. EARNINGS PER COMMON SHARE On September 9, 2016, upon emergence from chapter 11 bankruptcy, the Company's Predecessor equity was cancelled and new equity was issued. Refer to Note 2, "Reorganization," for further details. The following represents the calculation of earnings (loss) per share (in thousands, except per share amounts): Successor Predecessor Period from Period from Three Months Basic: Net income (loss) available to common stockholders $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average basic number of common shares outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic net income (loss) per share of common stock $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted: Net income (loss) available to common stockholders $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest on Convertible Note, net — Series A preferred dividends — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) available to common stockholders after assumed conversions $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average basic number of common shares outstanding Common stock equivalent shares representing shares issuable upon: Exercise of stock options Anti-dilutive Anti-dilutive Anti-dilutive Exercise of February 2012 Warrants — Anti-dilutive Anti-dilutive Exercise of warrants Anti-dilutive — — Vesting of restricted shares Anti-dilutive Anti-dilutive Anti-dilutive Vesting of performance units — — — Conversion of Convertible Note — Conversion of Series A Preferred Stock — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average diluted number of common shares outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted net income (loss) per share of common stock $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Successor Predecessor Period from Period from Nine Months Basic: Net income (loss) available to common stockholders $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average basic number of common shares outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic net income (loss) per share of common stock $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted: Net income (loss) available to common stockholders $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest on Convertible Note, net — — — Series A preferred dividends — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) available to common stockholders after assumed conversions $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average basic number of common shares outstanding Common stock equivalent shares representing shares issuable upon: Exercise of stock options Anti-dilutive Anti-dilutive Anti-dilutive Exercise of February 2012 Warrants — Anti-dilutive Anti-dilutive Exercise of warrants Anti-dilutive — — Vesting of restricted shares Anti-dilutive Anti-dilutive Anti-dilutive Vesting of performance units — — — Conversion of Convertible Note — Anti-dilutive Anti-dilutive Conversion of Series A Preferred Stock — Anti-dilutive Anti-dilutive ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average diluted number of common shares outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted net income (loss) per share of common stock $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common stock equivalents, including stock options, warrants, restricted shares, convertible debt and preferred stock totaling 11.1 million, 11.9 million and 43.6 million shares for the period from September 10, 2016 through September 30, 2016 (Successor), the period from July 1, 2016 through September 9, 2016 (Predecessor), the period from January 1, 2016 through September 9, 2016 (Predecessor), respectively, were not included in the computation of diluted earnings per share of common stock because the effect would have been anti-dilutive. Common stock equivalents, including stock options, warrants and restricted shares totaling 13.1 million shares for the three months ended September 30, 2015 (Predecessor) were not included in the computation of diluted earnings per share of common stock because the effect would have been anti-dilutive. Common stock equivalents, including stock options, warrants, restricted shares, convertible debt, and preferred stock totaling 47.8 million shares for the nine months ended September 30, 2015 (Predecessor) were not included in the computation of diluted earnings per share of common stock because the effect would have been anti-dilutive due to the net loss. |
ADDITIONAL FINANCIAL STATEMENT
ADDITIONAL FINANCIAL STATEMENT INFORMATION | 9 Months Ended |
Sep. 30, 2016 | |
ADDITIONAL FINANCIAL STATEMENT INFORMATION | |
ADDITIONAL FINANCIAL STATEMENT INFORMATION | 14. ADDITIONAL FINANCIAL STATEMENT INFORMATION Certain balance sheet amounts are comprised of the following (in thousands): Successor Predecessor September 30, 2016 December 31, 2015 Accounts receivable: Oil, natural gas and natural gas liquids revenues $ $ Joint interest accounts Accrued settlements on derivative contracts Affiliated partnership Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Prepaids and other: Prepaids $ $ Inventory — Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts payable and accrued liabilities: Trade payables $ $ Accrued oil and natural gas capital costs Revenues and royalties payable Accrued interest expense Accrued employee compensation Accrued lease operating expenses Drilling advances from partners Income taxes payable Affiliated partnership Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
FINANCIAL STATEMENT PRESENTAT21
FINANCIAL STATEMENT PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
FINANCIAL STATEMENT PRESENTATION | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation Halcón Resources Corporation (Halcón or the Company) is an independent energy company focused on the acquisition, production, exploration and development of onshore liquids-rich oil and natural gas assets in the United States. The unaudited condensed consolidated financial statements include the accounts of all majority-owned and controlled subsidiaries. The Company operates in one segment focused on oil and natural gas acquisition, production, exploration and development. The Company's oil and natural gas properties are managed as a whole rather than through discrete operating areas. Operational information is tracked by operating area; however, financial performance is assessed as a whole. Allocation of capital is made across the Company's entire property portfolio without regard to operating area. All intercompany accounts and transactions have been eliminated. These unaudited condensed consolidated financial statements reflect, in the opinion of the Company's management, all adjustments, consisting of normal and recurring adjustments, necessary to present fairly the financial position as of, and the results of operations for, the periods presented. During interim periods, Halcón follows the accounting policies disclosed in its Annual Report on Form 10-K, as filed with the United States Securities and Exchange Commission (SEC) on February 26, 2016. Please refer to the notes in the 2015 Annual Report on Form 10-K when reviewing interim financial results, though, as described below, such prior financial statements may not be comparable to the interim financial statements due to the adoption of fresh-start accounting on September 9, 2016. |
Emergence from Voluntary Reorganization under Chapter 11 | Emergence from Voluntary Reorganization under Chapter 11 On July 27, 2016 (the Petition Date), the Company and certain of its subsidiaries (the Halcón Entities) filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court in the District of Delaware (the Bankruptcy Court) to pursue a joint prepackaged plan of reorganization (the Plan). On September 8, 2016, the Bankruptcy Court entered an order confirming the Plan and on September 9, 2016, the Plan became effective (the Effective Date) and the Halcón Entities emerged from chapter 11 bankruptcy. The Company's subsidiary, HK TMS, LLC which was divested on September 30, 2016, was not part of the chapter 11 bankruptcy filings. See Note 2, "Reorganization," for further details on the Company's chapter 11 bankruptcy and the Plan and Note 4, "Divestiture" for further details on the divestiture of HK TMS, LLC. Upon emergence from chapter 11 bankruptcy, the Company adopted fresh-start accounting in accordance with provisions of the Financial Accounting Standards Board's (FASB) Accounting Standards Codification (ASC) No. 852, "Reorganizations" (ASC 852) which resulted in the Company becoming a new entity for financial reporting purposes on the Effective Date. Upon the adoption of fresh-start accounting, the Company's assets and liabilities were recorded at their fair values as of the fresh-start reporting date, September 9, 2016. As a result of the adoption of fresh-start accounting, the Company's unaudited condensed consolidated financial statements subsequent to September 9, 2016 may not be comparable to its unaudited condensed consolidated financial statements prior to September 9, 2016. See Note 3, "Fresh-start Accounting," for further details on the impact of fresh-start accounting on the Company's unaudited condensed consolidated financial statements. References to "Successor" or "Successor Company" relate to the financial position and results of operations of the reorganized Company subsequent to September 9, 2016. References to "Predecessor" or "Predecessor Company" relate to the financial position and results of operations of the Company prior to, and including, September 9, 2016. |
Use of Estimates | Use of Estimates The preparation of the Company's unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the respective reporting periods. Estimates and assumptions that, in the opinion of management of the Company, are significant include oil and natural gas revenue, capital and operating expense accruals, oil and natural gas reserves, depletion relating to oil and natural gas properties, asset retirement obligations, fair value estimates, including estimates of Reorganization Value, Enterprise Value and the fair value of assets and liabilities recorded as a result of the adoption of fresh-start accounting, and income taxes. The Company bases its estimates and judgments on historical experience and on various other assumptions and information believed to be reasonable under the circumstances. Estimates and assumptions about future events and their effects are uncertain and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company's operating environment changes. Actual results may differ from the estimates and assumptions used in the preparation of the Company's unaudited condensed consolidated financial statements. Interim period results are not necessarily indicative of results of operations or cash flows for the full year and accordingly, certain information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States, has been condensed or omitted. The Company has evaluated events or transactions through the date of issuance of these unaudited condensed consolidated financial statements. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company's accounts receivable are primarily receivables from joint interest owners and oil and natural gas purchasers. Accounts receivable are recorded at the amount due, less an allowance for doubtful accounts, when applicable. The Company establishes provisions for losses on accounts receivable if it determines that collection of all or part of the outstanding balance is doubtful. The Company regularly reviews collectability and establishes or adjusts the allowance for doubtful accounts as necessary using the specific identification method. There were no material allowances for doubtful accounts as of September 30, 2016 (Successor) or December 31, 2015 (Predecessor). |
Other Operating Property and Equipment | Other Operating Property and Equipment Gas gathering systems and equipment are recorded at cost. Depreciation is calculated using the straight-line method over a 30-year or 10-year estimated useful life applicable to gas gathering systems and a compressed natural gas facility, respectively. Upon disposition, the cost and accumulated depreciation are removed and any gains or losses are reflected in current operations. Maintenance and repair costs are charged to operating expense as incurred. Material expenditures which increase the life or productive capacity of an asset are capitalized and depreciated over the estimated remaining useful life of the asset. With the adoption of fresh-start accounting, the Company recorded its gas gathering systems and equipment at fair value totaling approximately $16.3 million as of the fresh-start reporting date. Refer to Note 3, "Fresh-start Accounting," for a discussion of the valuation approach used. Other operating assets are recorded at cost. Depreciation is calculated using the straight-line method over the following estimated useful lives: automobiles and computers, three years; computer software, fixtures, furniture and equipment, five years or the lesser of the lease term; trailers, seven years; heavy equipment, ten years; buildings, twenty years and leasehold improvements, lease term. Upon disposition, the cost and accumulated depreciation are removed and any gains or losses are reflected in current operations. Maintenance and repair costs are charged to operating expense as incurred. Material expenditures which increase the life of an asset are capitalized and depreciated over the estimated remaining useful life of the asset. With the adoption of fresh-start accounting, the Company recorded its other operating assets at fair value totaling approximately $21.8 million as of the fresh-start reporting date. Refer to Note 3, "Fresh-start Accounting," for a discussion of the valuation approach used. The Company reviews its gas gathering systems and equipment and other operating assets for impairment in accordance with ASC 360, Property, Plant, and Equipment (ASC 360). ASC 360 requires the Company to evaluate gas gathering systems and equipment and other operating assets for impairment as events occur or circumstances change that would more likely than not reduce the fair value below the carrying amount. If the carrying amount is not recoverable from an asset's undiscounted cash flows, then the Company recognizes an impairment loss for the difference between the carrying amount and the current fair value. The Company also evaluates the remaining useful lives of its gas gathering systems and other operating assets at each reporting period to determine whether events and circumstances warrant a revision to the remaining depreciation periods. For the three months ended March 31, 2016 (Predecessor), the Company recorded a non-cash impairment charge of $28.1 million in "Other operating property and equipment impairment" in the Company's unaudited condensed consolidated statements of operations and in "Gas gathering and other operating assets" in the Company's unaudited condensed consolidated balance sheets related to $32.8 million gross investments in gas gathering infrastructure that were deemed non-economical due to a shift in exploration, drilling and developmental plans in a low commodity price environment. In accordance with ASC 820, Fair Value Measurements and Disclosures (ASC 820), a financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The estimate of the fair value of the Company's gas gathering systems was based on an income approach that estimated future cash flows associated with those assets, which resulted in negative net cash flows due to insufficient throughput of natural gas volumes and certain fixed costs necessary to operate and maintain the assets. This estimation includes the use of unobservable inputs, such as estimated future production, and gathering and compression revenues and operating expenses. The use of these unobservable inputs results in the fair value estimate of the Company's gas gathering systems being classified as Level 3. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-15, Statement of Cash Flows (Topic 230) (ASU 2016-15). For public business entities, ASU 2016-15 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 and early adoption is permitted. The areas for simplification in this ASU involve addressing eight specific classification issues in the statement of cash flows. An entity should apply the amendments in this ASU using a retrospective transition method. The Company is in the process of assessing the effects of the application of the new guidance. In March 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-09, Compensation—Stock Compensation (ASU 2016-09). For public business entities, ASU 2016-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016 and early adoption is permitted. The areas for simplification in this ASU involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. As there are multiple amendments in this ASU, the FASB has issued guidance on how an entity should apply each amendment, either prospectively or retrospectively. The Company adopted ASU 2016-09 on September 9, 2016. See Note 12, "Stockholders' Equity" for further details. In March 2016, the FASB issued ASU No. 2016-06, Contingent Put and Call Options in Debt Instruments (ASU 2016-06). For public business entities, ASU 2016-06 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016 and early adoption is permitted. ASU 2016-06 provides new guidance that simplifies the analysis of whether a contingent put or call option in a debt instrument qualifies as a separate derivative. An entity should apply the amendments in this ASU on a modified retrospective basis to existing debt instruments as of the beginning of the fiscal year for which the amendments are effective. The Company is in the process of assessing the effects of the application of the new guidance. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02). For public business entities, ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 and early adoption is permitted. The FASB issued ASU 2016-02 to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. An entity should apply the amendments in this ASU on a modified retrospective basis. The transition will require application of the new guidance at the beginning of the earliest comparative period presented in the financial statements. The Company is in the process of assessing the effects of the application of the new guidance. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (ASU 2015-17) to simplify the presentation of deferred income taxes. Under ASU 2015-17, all deferred tax assets and liabilities, along with any related valuation allowance, are required to be classified as noncurrent on the balance sheet. Effective December 31, 2015, the Company early adopted ASU 2015-17, on a prospective basis, which resulted in the reclassification of its current deferred tax assets and liabilities as a non-current deferred tax asset and liability, net of the valuation allowance, in the accompanying unaudited condensed consolidated balance sheets. No prior periods were retrospectively adjusted. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations—Simplifying the Accounting for Measurement-Period Adjustments (ASU 2015-16). For public business entities, ASU 2015-16 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and early adoption is permitted. The amendments in this ASU require that an acquirer, in a business combination, recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, the amendments in this ASU eliminate the requirement to retrospectively account for those adjustments, and instead present separately on the face of the income statement or disclose in the footnotes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods. The adoption of ASU 2015-16 did not have an impact to the Company's financial statements or disclosures. In April 2015, the FASB issued ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (ASU 2015-05). ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. For public business entities, the guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. An entity can elect to adopt the guidance either (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. Early adoption is permitted. The Company adopted prospectively and it did not have a material impact to the Company's financial statements or disclosures. In February 2015, the FASB issued ASU No. 2015-02, Amendments to the Consolidation Analysis (ASU 2015-02). The amendments in ASU 2015-02 eliminate the previous presumption that a general partner controls a limited partner. ASU 2015-02 may impact the Company's accounting for its general partner interest in SBE Partners LP (SBE Partners), which is currently accounted for as an equity method investment. ASU 2015-02 is effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. Entities may apply the guidance using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the first fiscal year adopted or it may apply the amendment retrospectively. The adoption of ASU 2015-02 did not have an impact on the Company's accounting for its general partner interest in SBE Partners, LP. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (ASU 2014-15). ASU 2014-15 is effective for annual reporting periods (including interim periods within those periods) ending after December 15, 2016. Early application is permitted with companies applying the guidance prospectively. The amendments in ASU 2014-15 create a new ASC Sub-topic 205-40, Presentation of Financial Statements—Going Concern and require management to assess for each annual and interim reporting period if conditions exist that raise substantial doubt about an entity's ability to continue as a going concern. The rule requires various disclosures depending on the facts and circumstances surrounding an entity's ability to continue as a going concern. Effective June 30, 2016, the Company early adopted ASU 2014-15 on a prospective basis. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09). ASU 2014-09 states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in amounts that reflect the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard provides five steps an entity should apply in determining its revenue recognition. In March 2016, ASU 2014-09 was updated with ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08), which provides further clarification on the principal versus agent evaluation. ASU 2014-09 is required to be adopted using either the full retrospective approach, with all prior periods presented adjusted, or the modified retrospective approach, with a cumulative adjustment to retained earnings on the opening balance sheet and is effective for annual reporting periods, and interim periods within that reporting period, beginning after December 15, 2016, or after December 2017, if companies choose to elect the deferred adoption date approved by the FASB. Early adoption is not permitted. The Company is in the process of assessing the effects of the application of the new guidance. |
FRESH START ACCOUNTING (Tables)
FRESH START ACCOUNTING (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
FRESH START ACCOUNTING | |
Schedule of Enterprise value to estimated fair value of the Successor's common stock | The following table reconciles the Company's Enterprise Value to the estimated fair value of the Successor's common stock as of September 9, 2016 (in thousands): September 9, 2016 Enterprise Value $ Plus: Cash Less: Fair value of debt ) Less: Fair value of redeemable noncontrolling interest ) Less: Fair value of other long-term liabilities ) Less: Fair value of warrants ) ​ ​ ​ ​ ​ Fair Value of Successor common stock $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of Enterprise Value to its Reorganization Value | The following table reconciles the Company's Enterprise Value to its Reorganization Value as of September 9, 2016 (in thousands): September 9, 2016 Enterprise Value $ Plus: Cash Plus: Current liabilities Plus: Noncurrent asset retirement obligation ​ ​ ​ ​ ​ Reorganization Value of Successor assets $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of reorganization balance sheet and fresh-start accounting adjustments | Amounts included in the table below are rounded to thousands. As of September 9, 2016 Predecessor Reorganization Fresh-Start Successor Current assets: Cash $ $ ) (1) $ — $ Accounts receivable — — Receivables from derivative contracts — — Restricted cash — — Prepaids and other — ) (7) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Oil and natural gas properties (full cost method): Evaluated — ) (8) Unevaluated — ) (8) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross oil and natural gas properties — ) Less—accumulated depletion ) — (8) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net oil and natural gas properties — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other operating property and equipment: Gas gathering and other operating assets — ) (9) Less—accumulated depreciation ) — (9) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net other operating property and equipment — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other noncurrent assets: Receivables from derivative contracts — — Funds in escrow and other — (10) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current liabilities: Accounts payable and accrued liabilities $ $ (2) $ — $ Liabilities from derivative contracts — — Other — (11)(12) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt, net — ) (13) Liabilities subject to compromise ) (3) — — Other noncurrent liabilities: Liabilities from derivative contracts — — Asset retirement obligations — ) (12) Other — (11)(14) Commitments and contingencies Mezzanine equity: Redeemable noncontrolling interest — ) (14) Stockholders' equity: Preferred stock (Predecessor) — — (4) — — Common Stock (Predecessor) ) (4) — — Common Stock (Successor) — (5) — Additional paid-in capital (Predecessor) ) (4) — — Additional paid-in capital (Successor) — (5) — Retained earnings (accumulated deficit) ) (6) ) (15) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders' equity ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity $ $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reorganization adjustments 1) The table below details cash payments as of September 9, 2016, pursuant to the terms of the Plan described in Note 2 " Reorganization " (in thousands): Payment to Third Lien Noteholders $ Payment to Unsecured Noteholders Payment to Convertible Noteholder Payment to Preferred Holders ​ ​ ​ ​ ​ Total Uses $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2) In connection with the chapter 11 bankruptcy, the Company modified and rejected certain office lease arrangements and paid approximately $3.4 million for these modifications and rejections subsequent to the emergence from chapter 11 bankruptcy. This amount also reflects $10.3 million paid to the Company's restructuring advisors subsequent to the emergence from chapter 11 bankruptcy. 3) Liabilities subject to compromise were as follows (in thousands): 13.0% senior secured third lien notes due 2022 $ 9.25% senior notes due 2022 8.875% senior notes due 2021 9.75% senior notes due 2020 8.0% convertible note due 2020 Accrued interest Office lease modification and rejection fees ​ ​ ​ ​ ​ Liabilities subject to compromise Fair value of equity and warrants issued to Third Lien Noteholders, Unsecured Noteholders and Convertible Noteholder ) Cash payments to Third Lien Noteholders, Unsecured Noteholders and Convertible Noteholder ) Office lease modification and rejection fees ) ​ ​ ​ ​ ​ Gain on settlement of Liabilities subject to compromise $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4) Reflects the cancellation of Predecessor equity, as follows (in thousands): Predecessor Company stock $ Fair value of equity issued to Predecessor common stockholers ) Cash payment to Preferred Holders ) ​ ​ ​ ​ ​ Cancellation of Predecessor Company equity $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5) Reflects the issuance of Successor equity. In accordance with the Plan, the Successor Company issued 3.6 million shares of common stock to the Predecessor Company's existing common stockholders, 68.8 million shares of common stock to the Third Lien Noteholders, 14.0 million shares of common stock to the Unsecured Noteholders, and 3.6 million shares of common stock to the Convertible Noteholder. This amount is subject to dilution by warrants issued to the Unsecured Noteholders and the Convertible Noteholder totaling 4.7 million shares with an exercise price of $14.04 per share and a term of four years. The fair value of the warrants was estimated at $3.52 per share using a Black-Scholes-Merton valuation model. 6) The table below reflects the cumulative effect of the reorganization adjustments discussed above (in thousands): Gain on settlement of Liabilities subject to compromise $ Accrued reorganization items ) Cancellation of Predecessor Company equity ​ ​ ​ ​ ​ Net impact to retained earnings (accumulated deficit) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fresh-start accounting adjustments 7) Reflects the reclassification of tubulars and well equipment to " Oil and natural gas properties ." 8) In estimating the fair value of its oil and natural gas properties, the Company used a combination of the income and market approaches. For purposes of estimating the fair value of the Company's proved, probable and possible reserves, an income approach was used which estimated fair value based on the anticipated cash flows associated with the Company's reserves, risked by reserve category and discounted using a weighted average cost of capital rate of 10.5% for proved reserves and 12.5% for probable and possible reserves. The proved reserve locations were limited to wells expected to be drilled in the Company's five year development plan. Weighted average commodity prices utilized in the determination of the fair value of oil and natural gas properties were $72.30 per barrel of oil, $3.50 per MMBtu of natural gas and $12.00 per barrel of natural gas liquids, after adjustment for transportation fees and regional price differentials. Base pricing was derived from an average of forward strip prices and analysts' estimated prices. In estimating the fair value of the Company's unproved acreage that was not included in the valuation of probable and possible reserves, a market approach was used in which a review of recent transactions involving properties in the same geographical location indicated the fair value of the Company's unproved acreage from a market participant perspective. 9) In estimating the fair value of its gas gathering and other operating assets, the Company used a combination of the income, cost, and market approaches. For purposes of estimating the fair value of its gas gathering assets, an income approach was used that estimated future cash flows associated with the assets over the remaining useful lives. The valuation included such inputs as estimated future production, gathering and compression revenues, and operating expenses that were discounted at a weighted average cost of capital rate of 9.5%. For purposes of estimating the fair value of its other operating assets, the Company used a combination of the market and cost approaches. A market approach was relied upon to value land and computer equipment, and in this valuation approach, recent transactions of similar assets were utilized to determine the value from a market participant perspective. For the remaining other operating assets, a cost approach was used. The estimation of fair value under the cost approach was based on current replacement costs of the assets, less depreciation based on the estimated economic useful lives of the assets and age of the assets. 10) Reflects the adjustment of the Company's equity method investment in SBE Partners, L.P. to fair value based on an income approach, which calculated the discounted cash flows of the Company's share of the partnership's interest in oil and gas proved reserves. The anticipated cash flows of the reserve were risked by reserve category and discounted at 10.5%. Weighted average commodity prices utilized in the determination of the fair value of oil and natural gas properties were $72.30 per barrel of oil, $3.50 per MMBtu of natural gas and $12.00 per barrel of oil equivalent of natural gas liquids, after adjustment for transportation fees and regional price differentials. Base pricing was derived from an average of forward strip prices and analysts' estimated prices. 11) Records an intangible liability of approximately $8.3 million, $4.5 million of which was recorded as current, to adjust the Company's active rig contract to fair value at September 9, 2016. The intangible liability will be amortized over the remaining life of the contract through July 2018. 12) Reflects the adjustment of asset retirement obligations to fair value using estimated plugging and abandonment costs as of September 9, 2016, adjusted for inflation and then discounted at the appropriate credit-adjusted risk free rate ranging from 5.5% to 6.6% depending on the life of the well. The fair value of asset retirement obligations was estimated at $32.5 million, approximately $0.3 million of which was recorded as current. Refer to Note 9, "Asset Retirement Obligations" for further details of the Company's asset retirement obligations. 13) Reflects the adjustment of the 2020 Second Lien Notes and the 2022 Second Lien Notes to fair value. The fair value estimate was based on quoted market prices from trades of such debt on September 9, 2016. Refer to Note 6, "Debt" for definitions of and further information regarding the 2020 Second Lien Notes and 2022 Second Lien Notes. 14) Reflects the adjustment of the Company's redeemable noncontrolling interest and related embedded derivative of HK TMS, LLC to fair value. The fair value of the redeemable noncontrolling interest was estimated at $41.1 million and the embedded derivative was estimated at zero. For purposes of estimating the fair values, an income approach was used that estimated fair value based on the anticipated cash flows associated with HK TMS, LLC's proved reserves, risked by reserve category and discounted using a weighted average cost of capital rate of 12.5%. The value of the redeemable noncontrolling interest was further reduced by a probability factor of the potential assignment of the common shares of HK TMS, LLC to Apollo Global Management, which occurred subsequent to the fresh-start date. Refer to Note 4, "Divestiture," for further information regarding the divestiture of HK TMS, LLC on September 30, 2016. 15) Reflects the cumulative effect of the fresh-start accounting adjustments discussed above. |
Schedule of net cash payments pursuant to the terms of the Reorganization Plan | The table below details cash payments as of September 9, 2016, pursuant to the terms of the Plan described in Note 2 " Reorganization " (in thousands): Payment to Third Lien Noteholders $ Payment to Unsecured Noteholders Payment to Convertible Noteholder Payment to Preferred Holders ​ ​ ​ ​ ​ Total Uses $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of Liabilities subject to compromise, settled | Liabilities subject to compromise were as follows (in thousands): 13.0% senior secured third lien notes due 2022 $ 9.25% senior notes due 2022 8.875% senior notes due 2021 9.75% senior notes due 2020 8.0% convertible note due 2020 Accrued interest Office lease modification and rejection fees ​ ​ ​ ​ ​ Liabilities subject to compromise Fair value of equity and warrants issued to Third Lien Noteholders, Unsecured Noteholders and Convertible Noteholder ) Cash payments to Third Lien Noteholders, Unsecured Noteholders and Convertible Noteholder ) Office lease modification and rejection fees ) ​ ​ ​ ​ ​ Gain on settlement of Liabilities subject to compromise $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of cancellation of predecessor equity | Reflects the cancellation of Predecessor equity, as follows (in thousands): Predecessor Company stock $ Fair value of equity issued to Predecessor common stockholers ) Cash payment to Preferred Holders ) ​ ​ ​ ​ ​ Cancellation of Predecessor Company equity $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of cumulative effect of the reorganization adjustments | The table below reflects the cumulative effect of the reorganization adjustments discussed above (in thousands): Gain on settlement of Liabilities subject to compromise $ Accrued reorganization items ) Cancellation of Predecessor Company equity ​ ​ ​ ​ ​ Net impact to retained earnings (accumulated deficit) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of the net reorganization items | The following table summarizes the net reorganization items (in thousands): Successor Predecessor Period from Period from Gain on settlement of Liabilities subject to compromise $ — $ Fresh-start accounting adjustments — ) Reorganization professional fees and other ) ) Write-off debt discounts/premiums and debt issuance costs — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain (loss) on reorganization items $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
DEBT | |
Schedule of debt | As of September 30, 2016 (Successor) and December 31, 2015 (Predecessor), the Company's long-term debt consisted of the following (in thousands): Successor Predecessor September 30, 2016 December 31, 2015 Successor senior revolving credit facility $ $ — Predecessor senior revolving credit facility — 8.625% senior secured second lien notes due 2020 (1) 12.0% senior secured second lien notes due 2022 (2) 13.0% senior secured third lien notes due 2022 (3)(8) — 9.25% senior notes due 2022 (4)(8) — 8.875% senior notes due 2021 (5)(8) — 9.75% senior notes due 2020 (6)(8) — 8.0% convertible note due 2020 (7)(8) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Amount is net of $12.2 million unamortized debt issuance costs at December 31, 2015 (Predecessor). Amount is net of a $29.3 million discount at September 30, 2016 (Successor). (2) Amount is net of $1.2 million unamortized debt issuance costs at December 31, 2015 (Predecessor). Amount is net of a $7.0 million discount at September 30, 2016 (Successor). (3) Amount is net of $8.4 million unamortized debt issuance costs at December 31, 2015 (Predecessor). (4) Amount is net of $0.8 million unamortized debt issuance costs at December 31, 2015 (Predecessor). (5) Amount is net of a $1.0 million unamortized discount at December 31, 2015 (Predecessor) related to the issuance of the original 2021 Notes. The unamortized premium related to the additional 2021 Notes was approximately $5.5 million at December 31, 2015 (Predecessor). Amount is net of $5.8 million unamortized debt issuance costs at and December 31, 2015 (Predecessor). See "8.875% Senior Notes" below for more details. (6) Amount is net of a $1.9 million unamortized discount at December 31, 2015 (Predecessor) related to the issuance of the original 2020 Notes. The unamortized premium related to the additional 2020 Notes was approximately $2.6 million at December 31, 2015 (Predecessor). Amount is net of $4.3 million unamortized debt issuance costs at December 31, 2015 (Predecessor). See "9.75% Senior Notes" below for more details. (7) Amount is net of a $23.0 million unamortized discount at December 31, 2015 (Predecessor). See "8.0% Convertible Note" below for more details. (8) These notes were cancelled on September 9, 2016 upon emergence from chapter 11 bankruptcy. Contractual interest expense not accrued or recorded on pre-petition debt as a result of the chapter 11 bankruptcy amounted to $25.2 million for the period from July 27, 2016 to September 9, 2016. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
FAIR VALUE MEASUREMENTS | |
Schedule of fair value of the Company's financial assets and liabilities | The following tables set forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as of September 30, 2016 (Successor) and December 31, 2015 (Predecessor) (in thousands): Successor September 30, 2016 Level 1 Level 2 Level 3 Total Assets Receivables from derivative contracts $ — $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Liabilities from derivative contracts $ — $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Predecessor December 31, 2015 Level 1 Level 2 Level 3 Total Assets Receivables from derivative contracts $ — $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities Liabilities from derivative contracts $ — $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of reconciliation of changes in the fair value of the Company's extendable collar contracts classified as Level 3 in the fair value hierarchy | The following table sets forth a reconciliation of changes in the fair value of the Company's extendable collar contracts classified as Level 3 in the fair value hierarchy (in thousands): Significant Unobservable Inputs (Level 3) Successor Predecessor September 30, 2016 December 31, 2015 Beginning Balance $ ) $ ) Net gain (loss) on derivative contracts ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending Balance $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Successor Predecessor Period from September 10, 2016 through September 30, 2016 Period from January 1, 2016 through September 9, 2016 December 31, 2015 Change in unrealized gains (losses) included in earnings related to derivatives still held at September 30, 2016 (Successor), September 9, 2016 (Predecessor), and December 31, 2015 (Predecessor) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of the estimated fair values of the Company's fixed interest rate debt instruments | The following table presents the estimated fair values of the Company's fixed interest rate debt instruments as of September 30, 2016 (Successor) and December 31, 2015 (Predecessor) (excluding discounts, premiums and debt issuance costs) (in thousands): Successor Predecessor September 30, 2016 December 31, 2015 Debt Principal Amount Estimated Fair Value Principal Amount Estimated Fair Value 8.625% senior secured second lien notes $ $ $ $ 12.0% senior secured second lien notes 13.0% senior secured third lien notes (1) — — 9.25% senior notes (1) — — 8.875% senior notes (1) — — 9.75% senior notes (1) — — 8.0% convertible note (1) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) These notes were cancelled on September 9, 2016 upon emergence from chapter 11 bankruptcy. |
DERIVATIVE AND HEDGING ACTIVI25
DERIVATIVE AND HEDGING ACTIVITIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
DERIVATIVE AND HEDGING ACTIVITIES | |
Summary of location and fair value of derivative contracts | The following table summarizes the location and fair value amounts of all derivative contracts in the unaudited condensed consolidated balance sheets as of September 30, 2016 (Successor) and December 31, 2015 (Predecessor) (in thousands): Asset derivative contracts Liability derivative contracts Successor Predecessor Successor Predecessor Derivatives not designated as hedging contracts under ASC 815 Balance September 30, December 31, Balance September 30, December 31, Commodity contracts Current assets—receivables from derivative contracts $ $ Current liabilities—liabilities from derivative contracts $ ) $ — Commodity contracts Other noncurrent assets—receivables from derivative contracts Other noncurrent liabilities—liabilities from derivative contracts ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivatives not designated as hedging contracts under ASC 815 $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of the location and amounts of the Company's realized and unrealized gains and losses on derivative contracts | The following table summarizes the location and amounts of the Company's realized and unrealized gains and losses on derivative contracts in the Company's unaudited condensed consolidated statements of operations (in thousands): Amount of gain or (loss) recognized in Successor Predecessor Derivatives not designated as hedging Location of gain or (loss) recognized in Period from Period from Three Commodity contracts: Unrealized gain (loss) on commodity contracts Other income (expenses)—net gain (loss) on derivative contracts $ ) $ ) $ Realized gain (loss) on commodity contracts Other income (expenses)—net gain (loss) on derivative contracts ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total net gain (loss) on derivative contracts $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount of gain or (loss) recognized in Successor Predecessor Period from Period from Nine Months Location of gain or (loss) recognized in Derivatives not designated as hedging Commodity contracts: Unrealized gain (loss) on commodity contracts Other income (expenses)—net gain (loss) on derivative contracts $ ) $ ) $ ) Realized gain (loss) on commodity contracts Other income (expenses)—net gain (loss) on derivative contracts ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total net gain (loss) on derivative contracts $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of open derivative contracts | Successor September 30, 2016 Floors Ceilings Period Instrument Commodity Volume in Price / Weighted Price / Weighted October 2016 - December 2016 (1) Collars Natural Gas $4.00 $ $4.22 $ October 2016 - December 2016 (2)(3) Collars Crude Oil 60.00 - 90.00 64.00 - 95.10 October 2016 - December 2016 (4)(5) Swaps Crude Oil 62.00 - 91.73 January 2017 - December 2017 Collars Crude Oil 47.00 - 60.00 52.00 - 76.84 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Predecessor December 31, 2015 Floors Ceilings Period Instrument Commodity Volume in Price / Weighted Price / Weighted January 2016 - June 2016 Collars Crude Oil $90.00 $ $96.85 $ January 2016 - December 2016 Collars Natural Gas 4.00 4.22 January 2016 - December 2016 (2) Collars Crude Oil 60.00 - 90.00 64.00 - 95.10 January 2016 - December 2016 (4) Swaps Crude Oil 62.00 - 91.73 January 2017 - December 2017 Collars Crude Oil 50.00 - 60.00 70.00 - 76.84 (1) Subsequent to September 30, 2016, the Successor Company entered into a natural gas collar for 5,000 MMBtu per day for 2017 at a floor of $3.15 per MMBtu and a ceiling of $3.50 per MMBtu. (2) Includes an outstanding crude oil collar which may be extended by the counterparty at a floor of $60.00 per Bbl and a ceiling of $75.00 per Bbl for a total of 365,000 Bbls for the year ended December 31, 2017. (3) Subsequent to September 30, 2016, the Successor Company entered into crude oil collars totaling 4,000 barrels per day for 2017 at floors ranging from $49.40 to $51.50 per barrel and ceilings ranging from $54.40 to $56.50 per barrel. (4) Includes an outstanding crude oil swap which may be extended by the counterparty at a price of $88.25 per Bbl for a total of 730,000 Bbls for the year ended December 31, 2017. Also includes certain outstanding crude oil swaps which may be extended by the counterparty at a price of $88.00 per Bbl totaling 912,500 Bbls for the year ended December 31, 2017. Includes an outstanding crude oil swap which may be extended by the counterparty at a price of $88.87 per Bbl totaling 547,500 Bbls for the year ended December 31, 2017. (5) Subsequent to September 30, 2016, the Successor Company entered into crude oil swaps totaling 4,000 barrels per day for the fourth quarter of 2016 at $50.00 per barrel. |
Schedule of potential effects of master netting arrangements on the fair value of derivative contracts | The following table shows the potential effects of master netting arrangements on the fair value of the Company's derivative contracts at September 30, 2016 (Successor) and December 31, 2015 (Predecessor) (in thousands): Derivative Assets Derivative Liabilities Successor Predecessor Successor Predecessor September 30, December 31, September 30, December 31, Offsetting of Derivative Assets and Liabilities Gross Amounts Presented in the Consolidated Balance Sheet $ $ $ ) $ ) Amounts Not Offset in the Consolidated Balance Sheet ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Amount $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
ASSET RETIREMENT OBLIGATIONS | |
Schedule of activity related to ARO liability | The Company recorded the following activity related to its ARO liability (in thousands, inclusive of the current portion): Liability for asset retirement obligations as of December 31, 2015 (Predecessor) $ Liabilities settled and divested ) Additions Acquisitions Accretion expense ​ ​ ​ ​ ​ Liability for asset retirement obligations as of September 9, 2016 (Predecessor) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value fresh-start adjustment $ ) ​ ​ ​ ​ ​ Liability for asset retirement obligations as of September 9, 2016 (Successor) $ Liabilities settled and divested (1) ) Additions Accretion expense ​ ​ ​ ​ ​ Liability for asset retirement obligations as of September 30, 2016 (Successor) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) See Note 4, "Divestiture," for further information. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of operating leases | Future obligations associated with the Company's operating leases are presented in the table below (in thousands): Remaining period in 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
MEZZANINE EQUITY (Tables)
MEZZANINE EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
MEZZANINE EQUITY | |
Reconciliation of financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | The following table sets forth a reconciliation of the changes in fair value of the embedded derivative associated with the amended transaction, which is classified as Level 3 in the fair value hierarchy (in thousands): Embedded Balance at December 31, 2015 (Predecessor) $ Change in fair value ) ​ ​ ​ ​ ​ Balance at September 9, 2016 (Predecessor) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value fresh-start adjustment $ ) ​ ​ ​ ​ ​ Balance at September 9, 2016 (Successor) and at September 30, 2016 (Successor) $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of activity related to the preferred shares recorded as mezzanine equity | The Company recorded the following activity related to the preferred shares recorded in "Mezzanine equity" on the unaudited condensed consolidated balance sheets for the period presented (in thousands, except share amounts): Redeemable Shares Amount Balances at December 31, 2015 (Predecessor) $ Dividends paid in-kind Accretion of redeemable noncontrolling interest — ​ ​ ​ ​ ​ ​ ​ ​ Balances at September 9, 2016 (Predecessor) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value fresh-start adjustment — $ ) ​ ​ ​ ​ ​ ​ ​ ​ Balances at September 9, 2016 (Successor) $ Dividends paid in-kind HK TMS Divestiture (1) ) ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at September 30, 2016 (Successor) — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) See Note 4, "Divestiture," for further information regarding the HK TMS Divestiture. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
STOCKHOLDERS' EQUITY | |
Schedule of the stock option transactions (Successor) | Number of Weighted Aggregate (1) (In thousands) Weighted Outstanding at September 9, 2016 (Successor) — $ — $ — — Granted Exercised — — Forfeited — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at September 30, 2016 (Successor) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The intrinsic value of a stock option is the amount by which the current market value of the underlying stock exceeds the exercise price of the option. No stock options were exercised during the period from September 10, 2016 through September 30, 2016 (Successor). |
Schedule of assumptions used in calculating fair value of the Company's stock-based compensation (Successor) | The assumptions used in calculating the Black-Scholes-Merton valuation model fair value of the Successor Company's stock options for the period from September 10, 2016 through September 30, 2016 (Successor) are set forth in the following table: Stock Option Weighted average value per option granted during the period $ Assumptions: Stock price volatility (1) % Risk free rate of return % Expected term 6 years (1) Due to the Company's limited historical data, expected volatility was estimated using volatilities of similar entities whose share or option prices and assumptions were publicly available. |
Schedule of the restricted stock transactions (Successor) | Number of Weighted Aggregate (1) (In thousands) Unvested shares outstanding at September 9, 2016 (Successor) — $ — $ — Granted Vested ) Forfeited — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unvested shares outstanding at September 30, 2016 (Successor) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The intrinsic value of restricted stock was calculated as the closing market price on September 30, 2016 of the underlying stock multiplied by the number of restricted shares. The total fair value of shares vested was $11.5 million for the period from September 10, 2016 to September 30, 2016 (Successor). |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
EARNINGS PER COMMON SHARE | |
Schedule of calculation of earnings (loss) per share | The following represents the calculation of earnings (loss) per share (in thousands, except per share amounts): Successor Predecessor Period from Period from Three Months Basic: Net income (loss) available to common stockholders $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average basic number of common shares outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic net income (loss) per share of common stock $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted: Net income (loss) available to common stockholders $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest on Convertible Note, net — Series A preferred dividends — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) available to common stockholders after assumed conversions $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average basic number of common shares outstanding Common stock equivalent shares representing shares issuable upon: Exercise of stock options Anti-dilutive Anti-dilutive Anti-dilutive Exercise of February 2012 Warrants — Anti-dilutive Anti-dilutive Exercise of warrants Anti-dilutive — — Vesting of restricted shares Anti-dilutive Anti-dilutive Anti-dilutive Vesting of performance units — — — Conversion of Convertible Note — Conversion of Series A Preferred Stock — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average diluted number of common shares outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted net income (loss) per share of common stock $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Successor Predecessor Period from Period from Nine Months Basic: Net income (loss) available to common stockholders $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average basic number of common shares outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic net income (loss) per share of common stock $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted: Net income (loss) available to common stockholders $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest on Convertible Note, net — — — Series A preferred dividends — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) available to common stockholders after assumed conversions $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average basic number of common shares outstanding Common stock equivalent shares representing shares issuable upon: Exercise of stock options Anti-dilutive Anti-dilutive Anti-dilutive Exercise of February 2012 Warrants — Anti-dilutive Anti-dilutive Exercise of warrants Anti-dilutive — — Vesting of restricted shares Anti-dilutive Anti-dilutive Anti-dilutive Vesting of performance units — — — Conversion of Convertible Note — Anti-dilutive Anti-dilutive Conversion of Series A Preferred Stock — Anti-dilutive Anti-dilutive ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average diluted number of common shares outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted net income (loss) per share of common stock $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
ADDITIONAL FINANCIAL STATEMEN31
ADDITIONAL FINANCIAL STATEMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
ADDITIONAL FINANCIAL STATEMENT INFORMATION | |
Schedule of additional financial statement information, balance sheet | Certain balance sheet amounts are comprised of the following (in thousands): Successor Predecessor September 30, 2016 December 31, 2015 Accounts receivable: Oil, natural gas and natural gas liquids revenues $ $ Joint interest accounts Accrued settlements on derivative contracts Affiliated partnership Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Prepaids and other: Prepaids $ $ Inventory — Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts payable and accrued liabilities: Trade payables $ $ Accrued oil and natural gas capital costs Revenues and royalties payable Accrued interest expense Accrued employee compensation Accrued lease operating expenses Drilling advances from partners Income taxes payable Affiliated partnership Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
FINANCIAL STATEMENT PRESENTAT32
FINANCIAL STATEMENT PRESENTATION (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016USD ($)item | Dec. 31, 2015USD ($) | |
Basis of Presentation and Principles of Consolidation | ||
Number of operating segments | item | 1 | |
Allowance for doubtful accounts receivable | $ 0 | |
Predecessor | ||
Basis of Presentation and Principles of Consolidation | ||
Allowance for doubtful accounts receivable | $ 0 |
FINANCIAL STATEMENT PRESENTAT33
FINANCIAL STATEMENT PRESENTATION- Emergence from reorganization (Details) | Sep. 09, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 10, 2015 | Aug. 13, 2013 | Nov. 06, 2012 | Jul. 16, 2012 | Feb. 08, 2012 |
5.75% Series A Convertible Perpetual Preferred Stock | |||||||||
Restructuring Support Agreement | |||||||||
Dividend rate (as a percent) | 5.75% | ||||||||
13.0% senior secured third lien notes due 2022 | |||||||||
Restructuring Support Agreement | |||||||||
Interest rate (as a percent) | 13.00% | ||||||||
9.25% senior notes due 2022 | |||||||||
Restructuring Support Agreement | |||||||||
Interest rate (as a percent) | 9.25% | ||||||||
8.875% senior notes due 2021 | |||||||||
Restructuring Support Agreement | |||||||||
Interest rate (as a percent) | 8.875% | ||||||||
9.75% senior notes due 2020 | |||||||||
Restructuring Support Agreement | |||||||||
Interest rate (as a percent) | 9.75% | ||||||||
8.0% convertible note due 2017 | |||||||||
Restructuring Support Agreement | |||||||||
Interest rate (as a percent) | 8.00% | ||||||||
Predecessor | |||||||||
Restructuring Support Agreement | |||||||||
Dividend rate (as a percent) | 5.75% | ||||||||
Predecessor | 13.0% senior secured third lien notes due 2022 | |||||||||
Restructuring Support Agreement | |||||||||
Interest rate (as a percent) | 13.00% | 13.00% | |||||||
Predecessor | 9.25% senior notes due 2022 | |||||||||
Restructuring Support Agreement | |||||||||
Interest rate (as a percent) | 9.25% | 9.25% | 9.25% | ||||||
Predecessor | 8.875% senior notes due 2021 | |||||||||
Restructuring Support Agreement | |||||||||
Interest rate (as a percent) | 8.875% | 8.875% | 8.875% | ||||||
Predecessor | 9.75% senior notes due 2020 | |||||||||
Restructuring Support Agreement | |||||||||
Interest rate (as a percent) | 9.75% | 9.75% | 9.75% | ||||||
Predecessor | 8.0% convertible note due 2017 | |||||||||
Restructuring Support Agreement | |||||||||
Interest rate (as a percent) | 8.00% | 8.00% |
FINANCIAL STATEMENT PRESENTAT34
FINANCIAL STATEMENT PRESENTATION- Other PPE (Details) - USD ($) $ in Thousands | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Mar. 31, 2016 | Sep. 09, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Other operating property and equipment | ||||
Fair value of gas gathering systems and equipment | $ 1,546,244 | $ 1,102,584 | ||
Other operating asset | 1,843,626 | 1,351,048 | ||
Gross investments | 38,071 | 38,097 | ||
Fresh Start Adjustments | ||||
Other operating property and equipment | ||||
Fair value of gas gathering systems and equipment | (555,787) | |||
Other operating asset | (594,946) | $ 21,800 | ||
Gross investments | (62,008) | |||
Predecessor | ||||
Other operating property and equipment | ||||
Fair value of gas gathering systems and equipment | 2,102,031 | $ 2,768,389 | ||
Other operating asset | 2,536,093 | 3,458,692 | ||
Non-cash impairment charge | $ 28,100 | 28,056 | ||
Gross investments | $ 100,079 | $ 130,090 | ||
Gas gathering systems and equipment | ||||
Other operating property and equipment | ||||
Estimated useful life | 30 years | |||
Fair value of gas gathering systems and equipment | $ 16,300 | |||
Gas gathering systems and equipment | Predecessor | ||||
Other operating property and equipment | ||||
Non-cash impairment charge | 28,100 | |||
Gross investments | $ 32,800 | |||
Compressed natural gas facilities | ||||
Other operating property and equipment | ||||
Estimated useful life | 10 years | |||
Automobiles | ||||
Other operating property and equipment | ||||
Estimated useful life | 3 years | |||
Computers | ||||
Other operating property and equipment | ||||
Estimated useful life | 3 years | |||
Computer software | Maximum | ||||
Other operating property and equipment | ||||
Estimated useful life | 5 years | |||
Fixtures, furniture and equipment | Maximum | ||||
Other operating property and equipment | ||||
Estimated useful life | 5 years | |||
Trailers | ||||
Other operating property and equipment | ||||
Estimated useful life | 7 years | |||
Heavy equipment | ||||
Other operating property and equipment | ||||
Estimated useful life | 10 years | |||
Buildings | ||||
Other operating property and equipment | ||||
Estimated useful life | 20 years |
REORGANIZATION (Details)
REORGANIZATION (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 09, 2016 | May 15, 2016 | Mar. 09, 2015 | Dec. 31, 2015 | Sep. 30, 2016 | Dec. 21, 2015 | Sep. 30, 2015 | Sep. 10, 2015 | May 01, 2015 | Aug. 13, 2013 | Nov. 06, 2012 | Jul. 16, 2012 | Feb. 08, 2012 |
5.75% Series A Convertible Perpetual Preferred Stock | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Dividend rate (as a percent) | 5.75% | ||||||||||||
8.625% senior secured second lien notes due 2020 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Interest rate (as a percent) | 8.625% | ||||||||||||
12.0% senior secured second lien notes due 2022 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Interest rate (as a percent) | 12.00% | ||||||||||||
13.0% senior secured third lien notes due 2022 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Interest rate (as a percent) | 13.00% | ||||||||||||
9.25% senior notes due 2022 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Interest rate (as a percent) | 9.25% | ||||||||||||
8.875% senior notes due 2021 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Interest rate (as a percent) | 8.875% | ||||||||||||
9.75% senior notes due 2020 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Interest rate (as a percent) | 9.75% | ||||||||||||
8.0% convertible note due 2017 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Interest rate (as a percent) | 8.00% | ||||||||||||
Predecessor | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Dividend rate (as a percent) | 5.75% | ||||||||||||
Predecessor | Maximum | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Percentage of outstanding debt represented by the Restructuring Support Agreement (as a percent) | 50.00% | ||||||||||||
Predecessor | 8.625% senior secured second lien notes due 2020 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Interest rate (as a percent) | 8.625% | ||||||||||||
Predecessor | 12.0% senior secured second lien notes due 2022 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Interest rate (as a percent) | 12.00% | ||||||||||||
Predecessor | 13.0% senior secured third lien notes due 2022 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Interest rate (as a percent) | 13.00% | 13.00% | |||||||||||
Predecessor | 9.25% senior notes due 2022 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Interest rate (as a percent) | 9.25% | 9.25% | 9.25% | ||||||||||
Predecessor | 8.875% senior notes due 2021 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Interest rate (as a percent) | 8.875% | 8.875% | 8.875% | ||||||||||
Predecessor | 9.75% senior notes due 2020 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Interest rate (as a percent) | 9.75% | 9.75% | 9.75% | ||||||||||
Predecessor | 8.0% convertible note due 2017 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Interest rate (as a percent) | 8.00% | 8.00% | |||||||||||
Predecessor | 8% convertible Note post-amendment | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Extension term | 3 years | ||||||||||||
Predecessor | Restructuring of indebtedness and capitalization | The Restructuring Support Agreement | Common Stock | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Percentage of outstanding debt represented by the Restructuring Support Agreement (as a percent) | 4.00% | ||||||||||||
Predecessor | Restructuring of indebtedness and capitalization | The Restructuring Support Agreement | 5.75% Series A Convertible Perpetual Preferred Stock | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Cash payment to noteholders | $ 11.1 | ||||||||||||
Dividend rate (as a percent) | 5.75% | ||||||||||||
Predecessor | Restructuring of indebtedness and capitalization | The Restructuring Support Agreement | 13.0% senior secured third lien notes due 2022 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Redemption price of debt instrument (as a percent) | 76.50% | ||||||||||||
Cash payment to noteholders | $ 33.8 | ||||||||||||
Predecessor | Restructuring of indebtedness and capitalization | The Restructuring Support Agreement | 8.0% convertible note due 2017 | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Percentage of outstanding debt represented by the Restructuring Support Agreement (as a percent) | 4.00% | ||||||||||||
Cash payment to noteholders | $ 15 | ||||||||||||
Pro forma equity of reorganized Halcon (as a percent) | 1.00% | ||||||||||||
Exercise price (in dollars per share) | $ 14.04 | ||||||||||||
Extension term | 4 years | ||||||||||||
Predecessor | Restructuring of indebtedness and capitalization | The Restructuring Support Agreement | Senior Unsecured Notes Held by Certain Holders | |||||||||||||
Restructuring Support Agreement | |||||||||||||
Percentage of outstanding debt represented by the Restructuring Support Agreement (as a percent) | 15.50% | ||||||||||||
Cash payment to noteholders | $ 37.6 | ||||||||||||
Pro forma equity of reorganized Halcon (as a percent) | 4.00% | ||||||||||||
Warrant term | 4 years | ||||||||||||
Exercise price (in dollars per share) | $ 14.04 |
FRESH START ACCOUNTING (Details
FRESH START ACCOUNTING (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 09, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Fresh-Start Adjustment | |||||
Enterprise Value | $ 1,618,888 | ||||
Plus: Cash | $ 2,011 | 13,943 | |||
Less: Fair value of debt | (1,016,160) | ||||
Less: Fair value of redeemable noncontrolling interest | (41,070) | ||||
Less: Fair value of other long-term liabilities | (4,478) | ||||
Less: Fair value of warrants | (16,691) | ||||
Fair Value of Successor common stock | 554,432 | ||||
Minimum | |||||
Fresh-Start Adjustment | |||||
Enterprise Value | 1,600,000 | ||||
Maximum | |||||
Fresh-Start Adjustment | |||||
Enterprise Value | 1,800,000 | ||||
Predecessor | |||||
Fresh-Start Adjustment | |||||
Plus: Cash | 13,943 | $ 8,026 | $ 6,254 | $ 43,713 | |
Fair Value of Successor common stock | $ (22,176) | ||||
Predecessor | Maximum | |||||
Fresh-Start Adjustment | |||||
Percentage of outstanding debt represented by the Restructuring Support Agreement (as a percent) | 50.00% |
FRESH START ACCOUNTING-Enterpri
FRESH START ACCOUNTING-Enterprise to Reorg Values (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 09, 2016 |
FRESH START ACCOUNTING | ||
Enterprise Value | $ 1,618,888 | |
Plus: Cash | $ 2,011 | 13,943 |
Plus: Current liabilities | 178,639 | |
Plus: Noncurrent asset retirement obligation | 32,156 | |
Reorganization Value of Successor assets | $ 1,843,626 |
FRESH START ACCOUNTING-Balance
FRESH START ACCOUNTING-Balance sheet effects (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 09, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||||
Cash | $ 2,011 | $ 13,943 | ||
Accounts receivable | 125,244 | 116,859 | ||
Receivables from derivative contracts | 70,835 | 97,648 | ||
Restricted cash | 165 | 17,164 | ||
Prepaids and other | 7,713 | 7,629 | ||
Total current assets | 205,968 | 253,243 | ||
Oil and natural gas properties (full cost method): | ||||
Evaluated | 1,202,727 | 1,214,129 | ||
Unevaluated | 329,218 | 332,115 | ||
Gross oil and natural gas properties | 1,531,945 | 1,546,244 | ||
Less - accumulated depletion | (429,361) | |||
Net oil and natural gas properties | 1,102,584 | 1,546,244 | ||
Other operating property and equipment: | ||||
Gas gathering and other operating assets | 38,097 | 38,071 | ||
Less - accumulated depreciation | (203) | |||
Net other operating property and equipment | 37,894 | 38,071 | ||
Other noncurrent assets: | ||||
Receivables from derivative contracts | 2,816 | 4,431 | ||
Funds in escrow and other | 1,786 | 1,637 | ||
Total assets | 1,351,048 | 1,843,626 | ||
Current liabilities: | ||||
Accounts payable and accrued liabilities | 170,992 | 173,688 | ||
Liabilities from derivative contracts | 1,415 | 102 | ||
Other | 4,938 | 4,849 | ||
Total current liabilities | 177,345 | 178,639 | ||
Long -term debt, net | 1,004,524 | 1,016,160 | ||
Other noncurrent liabilities: | ||||
Liabilities from derivative contracts | 1,122 | 525 | ||
Asset retirement obligations | 31,082 | 32,156 | ||
Other | 4,139 | 3,953 | ||
Commitments and contingencies | ||||
Mezzanine equity: | ||||
Redeemable noncontrolling interest | 41,070 | |||
Stockholders' equity: | ||||
Preferred stock | ||||
Common stock | 9 | 9 | ||
Additional paid-in capital | 584,310 | 571,114 | ||
Retained Earnings (accumulated deficit) | (451,483) | |||
Total stockholders' equity | 132,836 | 571,123 | ||
Total liabilities and stockholders' equity | 1,351,048 | 1,843,626 | ||
Reorganization Adjustments | ||||
Current assets: | ||||
Cash | (97,521) | |||
Total current assets | (97,521) | |||
Other noncurrent assets: | ||||
Total assets | (97,521) | |||
Current liabilities: | ||||
Accounts payable and accrued liabilities | 13,688 | |||
Total current liabilities | 13,688 | |||
Liabilities subject to compromise | (2,007,703) | |||
Other noncurrent liabilities: | ||||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Common stock | 9 | |||
Additional paid-in capital | 571,114 | |||
Retained Earnings (accumulated deficit) | 4,613,289 | |||
Total stockholders' equity | 1,896,494 | |||
Total liabilities and stockholders' equity | (97,521) | |||
Fresh Start Adjustments | ||||
Current assets: | ||||
Prepaids and other | (1,332) | |||
Total current assets | (1,332) | |||
Oil and natural gas properties (full cost method): | ||||
Evaluated | (6,497,874) | |||
Unevaluated | (861,144) | |||
Gross oil and natural gas properties | (7,359,018) | |||
Less - accumulated depletion | 6,803,231 | |||
Net oil and natural gas properties | (555,787) | |||
Other operating property and equipment: | ||||
Gas gathering and other operating assets | (62,008) | |||
Less - accumulated depreciation | 24,154 | |||
Net other operating property and equipment | (37,854) | |||
Other noncurrent assets: | ||||
Funds in escrow and other | 27 | |||
Total assets | $ 21,800 | (594,946) | ||
Current liabilities: | ||||
Other | 4,435 | |||
Total current liabilities | 4,435 | |||
Long -term debt, net | (14,954) | |||
Other noncurrent liabilities: | ||||
Asset retirement obligations | (16,799) | |||
Other | 3,425 | |||
Commitments and contingencies | ||||
Mezzanine equity: | ||||
Redeemable noncontrolling interest | (178,821) | |||
Stockholders' equity: | ||||
Retained Earnings (accumulated deficit) | (392,232) | |||
Total stockholders' equity | (392,232) | |||
Total liabilities and stockholders' equity | (594,946) | |||
Predecessor | ||||
Current assets: | ||||
Cash | 111,464 | $ 8,026 | ||
Accounts receivable | 116,859 | 173,624 | ||
Receivables from derivative contracts | 97,648 | 348,861 | ||
Restricted cash | 17,164 | 16,812 | ||
Prepaids and other | 8,961 | 9,270 | ||
Total current assets | 352,096 | 556,593 | ||
Oil and natural gas properties (full cost method): | ||||
Evaluated | 7,712,003 | 7,060,721 | ||
Unevaluated | 1,193,259 | 1,641,356 | ||
Gross oil and natural gas properties | 8,905,262 | 8,702,077 | ||
Less - accumulated depletion | (6,803,231) | (5,933,688) | ||
Net oil and natural gas properties | 2,102,031 | 2,768,389 | ||
Other operating property and equipment: | ||||
Gas gathering and other operating assets | 100,079 | 130,090 | ||
Less - accumulated depreciation | (24,154) | (22,435) | ||
Net other operating property and equipment | 75,925 | 107,655 | ||
Other noncurrent assets: | ||||
Receivables from derivative contracts | 4,431 | 16,614 | ||
Funds in escrow and other | 1,610 | 1,808 | ||
Total assets | 2,536,093 | 3,458,692 | ||
Current liabilities: | ||||
Accounts payable and accrued liabilities | 160,000 | 295,085 | ||
Liabilities from derivative contracts | 102 | |||
Other | 414 | 163 | ||
Total current liabilities | 160,516 | 295,248 | ||
Long -term debt, net | 1,031,114 | 2,873,637 | ||
Liabilities subject to compromise | 2,007,703 | |||
Other noncurrent liabilities: | ||||
Liabilities from derivative contracts | 525 | 290 | ||
Asset retirement obligations | 48,955 | 46,853 | ||
Other | 528 | 6,264 | ||
Commitments and contingencies | ||||
Mezzanine equity: | ||||
Redeemable noncontrolling interest | 219,891 | 183,986 | ||
Stockholders' equity: | ||||
Preferred stock | ||||
Common stock | 12 | 12 | ||
Additional paid-in capital | 3,287,906 | 3,283,097 | ||
Retained Earnings (accumulated deficit) | (4,221,057) | (3,230,695) | ||
Total stockholders' equity | (933,139) | 52,414 | $ 1,772,169 | |
Total liabilities and stockholders' equity | 2,536,093 | $ 3,458,692 | ||
Predecessor | Reorganization Adjustments | ||||
Stockholders' equity: | ||||
Common stock | (12) | |||
Additional paid-in capital | (3,287,906) | |||
Total stockholders' equity | $ (3,287,918) |
FRESH START ACCOUNTING-Net cash
FRESH START ACCOUNTING-Net cash payments (Details) - USD ($) $ in Thousands | Sep. 09, 2016 | Sep. 09, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Reorganization Adjustments | ||||
Uses: | ||||
Total Uses | $ 97,521 | |||
Reorganization Adjustments | 5.75% Series A Convertible Perpetual Preferred Stock | ||||
Uses: | ||||
Payment to settle debt | 11,100 | |||
Reorganization Adjustments | 13.0% senior secured third lien notes due 2022 | ||||
Uses: | ||||
Payment to settle debt | 33,826 | |||
Reorganization Adjustments | 8.0% convertible note due 2017 | ||||
Uses: | ||||
Payment to settle debt | 15,000 | |||
Reorganization Adjustments | Senior Unsecured Notes Held by Certain Holders | ||||
Uses: | ||||
Payment to settle debt | $ 37,595 | |||
Predecessor | ||||
Uses: | ||||
Debt issuance fees paid on Exit Facility | $ 1,977 | $ 25,703 | ||
Predecessor | Senior revolving credit facility | ||||
Uses: | ||||
Debt issuance fees paid on Exit Facility | $ 40,300 |
FRESH START ACCOUNTING-Liabilit
FRESH START ACCOUNTING-Liabilities subject to compromise (Details) - USD ($) $ in Thousands | Sep. 09, 2016 | Sep. 30, 2016 | Sep. 09, 2016 |
Liabilities subject to compromise | |||
Fair value of equity and warrants issued to Third Lien Noteholders, Unsecured Noteholders and Convertible Noteholder | $ 554,432 | $ 554,432 | |
Reorganization Adjustments | |||
Fresh-Start Adjustment | |||
Payments for amended certain office lease arrangements | $ 3,400 | ||
Restructuring Advisor fees | $ 10,300 | ||
Liabilities subject to compromise | |||
Accrued interest | 46,715 | 46,715 | |
Office lease modification and rejection fees | 3,427 | 3,427 | |
Liabilities Subject to Compromise, Total | (2,007,703) | (2,007,703) | |
Fair value of equity and warrants issued to Third Lien Noteholders, Unsecured Noteholders and Convertible Noteholder | (548,947) | (548,947) | |
Cash payments to Third Lien Noteholders, Unsecured Noteholders and Convertible Noteholder | (86,421) | (86,421) | |
Office lease modification and rejection fees | (3,427) | (3,427) | |
Gain on settlement of liabilities subject to compromise | 1,368,908 | ||
Reorganization Adjustments | 13.0% senior secured third lien notes due 2022 | |||
Liabilities subject to compromise | |||
Debt | 1,017,970 | 1,017,970 | |
Reorganization Adjustments | 9.25% senior notes due 2022 | |||
Liabilities subject to compromise | |||
Debt | 37,194 | 37,194 | |
Reorganization Adjustments | 8.875% senior notes due 2021 | |||
Liabilities subject to compromise | |||
Debt | 297,193 | 297,193 | |
Reorganization Adjustments | 9.75% senior notes due 2020 | |||
Liabilities subject to compromise | |||
Debt | 315,535 | 315,535 | |
Reorganization Adjustments | 8.0% convertible note due 2017 | |||
Liabilities subject to compromise | |||
Debt | 289,669 | 289,669 | |
Predecessor | |||
Liabilities subject to compromise | |||
Liabilities Subject to Compromise, Total | 2,007,703 | 2,007,703 | |
Fair value of equity and warrants issued to Third Lien Noteholders, Unsecured Noteholders and Convertible Noteholder | (22,176) | (22,176) | |
Gain on settlement of liabilities subject to compromise | 1,368,908 | ||
Predecessor | Reorganization Adjustments | |||
Liabilities subject to compromise | |||
Fair value of equity and warrants issued to Third Lien Noteholders, Unsecured Noteholders and Convertible Noteholder | $ (22,176) | $ (22,176) |
FRESH START ACCOUNTING-Cancella
FRESH START ACCOUNTING-Cancellation of predecessor equity (Details) - USD ($) $ in Thousands | 8 Months Ended | |||
Sep. 09, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cancellation of predecessor equity | ||||
Predecessor Company Stock | $ (571,123) | $ (132,836) | ||
Fair value of equity issued to Predecessor Common Stockholders | 554,432 | |||
Predecessor | ||||
Cancellation of predecessor equity | ||||
Predecessor Company Stock | 933,139 | $ (52,414) | $ (1,772,169) | |
Fair value of equity issued to Predecessor Common Stockholders | (22,176) | |||
Cash payment to Preferred Holders | (11,100) | |||
Reorganization Adjustments | ||||
Cancellation of predecessor equity | ||||
Predecessor Company Stock | (1,896,494) | |||
Fair value of equity issued to Predecessor Common Stockholders | (548,947) | |||
Reorganization Adjustments | Predecessor | ||||
Cancellation of predecessor equity | ||||
Predecessor Company Stock | 3,287,918 | |||
Fair value of equity issued to Predecessor Common Stockholders | (22,176) | |||
Cash payment to Preferred Holders | (11,100) | |||
Cancellation of Predecessor Company equity | $ (3,254,642) |
FRESH START ACCOUNTING-Successo
FRESH START ACCOUNTING-Successor equity (Details) - $ / shares | Sep. 09, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Stockholders' equity | |||
Common stock, shares issued | 92,638,093 | ||
Common stock, par value (in dollars per share) | $ 0.0001 | ||
2016 Incentive Plan | |||
Stockholders' equity | |||
Common stock, par value (in dollars per share) | $ 3.52 | ||
Warrants Issued to Former Holders of Unsecured and Convertible Notes | |||
Stockholders' equity | |||
Number of warrants issued | 4,700,000 | ||
Exercise price (in dollars per share) | $ 14.04 | ||
Exercise or expiration period | 4 years | ||
8.0% convertible note due 2017 | |||
Stockholders' equity | |||
Number of warrants issued | 900,000 | ||
Senior Unsecured Notes Held by Certain Holders | |||
Stockholders' equity | |||
Number of warrants issued | 3,800,000 | ||
Predecessor | |||
Stockholders' equity | |||
Common stock, shares issued | 122,523,559 | ||
Common stock, par value (in dollars per share) | $ 0.0001 | ||
Common Stock | |||
Stockholders' equity | |||
Common stock, par value (in dollars per share) | $ 0.0001 | ||
Shares issued | 90,000,000 | ||
Reorganization Adjustments | 13.0% senior secured third lien notes due 2022 | |||
Stockholders' equity | |||
Shares issued | 68,800,000 | ||
Reorganization Adjustments | 8.0% convertible note due 2017 | |||
Stockholders' equity | |||
Shares issued | 3,600,000 | ||
Reorganization Adjustments | Senior Unsecured Notes Held by Certain Holders | |||
Stockholders' equity | |||
Shares issued | 14,000,000 | ||
Reorganization Adjustments | Common Stock | |||
Stockholders' equity | |||
Common stock, shares issued | 3,600,000 |
FRESH START ACCOUNTING-Effect o
FRESH START ACCOUNTING-Effect of reorganization adj cumulative (Details) $ in Thousands | Sep. 09, 2016USD ($) | Sep. 09, 2016USD ($) |
Reorganization Adjustments | ||
Cumulative effect of the reorganization adjustments | ||
Gain on settlement of liabilities subject to compromise | $ 1,368,908 | |
Predecessor | ||
Cumulative effect of the reorganization adjustments | ||
Gain on settlement of liabilities subject to compromise | $ 1,368,908 | |
Predecessor | Reorganization Adjustments | ||
Cumulative effect of the reorganization adjustments | ||
Accrued reorganization items | (10,261) | (10,261) |
Cancellation of Predecessor Company equity | 3,254,642 | 3,254,642 |
Net impact to retained earnings (accumulated deficit) | $ 4,613,289 | $ 4,613,289 |
FRESH START ACCOUNTING-FV adjus
FRESH START ACCOUNTING-FV adjustments to oil and natural gas properties (Details) - Fresh Start Adjustments | Sep. 09, 2016$ / MMBTU$ / bbl |
Oil and natural gas properties (full cost method): | |
Weighted average cost of capital rate (as a percent) | 10.50 |
Weighted average cost of capital for probable and possible reserves rate (as a percent) | 12.5 |
Development plan in years | 5 years |
Weighted average commodity price of oil (in dollars per barrel) | 72.30 |
Weighted average commodity price of natural gas (in dollars per Mmbtu) | $ / MMBTU | 3.50 |
Weighted average commodity price of natural gas liquids (in dollars per barrel) | 12 |
FRESH START ACCOUNTING-FV adj45
FRESH START ACCOUNTING-FV adjustments to other operating properties (Details) - Fresh Start Adjustments $ in Millions | Sep. 09, 2016USD ($) |
Other operating property and equipment: | |
Weighted average cost of capital rate (as a percent) | 10.50 |
Fair value of asset retirement obligation | $ 32.5 |
Fair value of asset retirement obligation current | 0.3 |
Fair value of redeemable noncontrolling interest | 41.1 |
Fair Value of embedded derivative | $ 0 |
Embedded Derivative | |
Other operating property and equipment: | |
Weighted average cost of capital rate (as a percent) | 12.5 |
Minimum | |
Other operating property and equipment: | |
Risk free rate (as a percent) | 5.50% |
Maximum | |
Other operating property and equipment: | |
Risk free rate (as a percent) | 6.60% |
Drilling rig commitments | |
Other operating property and equipment: | |
Intangible liability for rig contract | $ 8.3 |
Intangible current liability for rig contract | $ 4.5 |
Gas gathering systems and equipment | |
Other operating property and equipment: | |
Weighted average cost of capital rate (as a percent) | 9.5 |
FRESH START ACCOUNTING-Reorgani
FRESH START ACCOUNTING-Reorganization items (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 8 Months Ended |
Sep. 30, 2016 | Sep. 09, 2016 | Sep. 09, 2016 | |
Reorganization Items | |||
Reorganization professional fees and other | $ (556) | ||
Gain (loss) on reorganization items | $ (556) | ||
Predecessor | |||
Reorganization Items | |||
Gain on settlement of liabilities subject to compromise | $ 1,368,908 | ||
Fresh-start accounting adjustments | (392,232) | ||
Reorganization professional fees and other | (30,287) | ||
Write-off of debt discounts/premium and debt issuance costs | (32,667) | ||
Gain (loss) on reorganization items | $ 913,722 | $ 913,722 |
DIVESTITURE (Details)
DIVESTITURE (Details) | Sep. 30, 2016 |
Apollo Global Management | Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | |
Divestitures | |
Ownership percentage in subsidiaries | 100.00% |
Companys Existing Wholly Owned Subsidiaries Other Than HK TMS | |
Divestitures | |
Ownership percentage in subsidiaries | 100.00% |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014$ / bbl | Sep. 09, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)$ / MMBTU$ / bbl | Dec. 31, 2015USD ($)$ / bbl | Sep. 30, 2015$ / MMBTU$ / bbl | |
Oil and Natural Gas Properties | |||||||||||||
Evaluated | $ 1,202,727 | $ 1,202,727 | $ 1,214,129 | $ 1,202,727 | |||||||||
Unevaluated | 329,218 | 329,218 | 332,115 | $ 329,218 | |||||||||
Ceiling Limitation Disclosures | |||||||||||||
First day average of the West Texas Intermediate (WTI) crude oil spot price (in dollars per barrel) | $ / bbl | 41.68 | ||||||||||||
First day average of the Henry Hub natural gas price (in dollars per Mmbtu) | $ / MMBTU | 2.28 | ||||||||||||
Full cost ceiling impairment | $ 420,934 | ||||||||||||
Full cost ceiling impairment, after tax | $ 268,100 | ||||||||||||
Fresh Start Adjustments | |||||||||||||
Oil and Natural Gas Properties | |||||||||||||
Evaluated | (6,497,874) | ||||||||||||
Unevaluated | (861,144) | ||||||||||||
Predecessor | |||||||||||||
Oil and Natural Gas Properties | |||||||||||||
Evaluated | 7,712,003 | $ 7,060,721 | |||||||||||
Unevaluated | 1,193,259 | $ 1,641,356 | |||||||||||
Ceiling Limitation Disclosures | |||||||||||||
First day average of the West Texas Intermediate (WTI) crude oil spot price (in dollars per barrel) | $ / bbl | 59.21 | ||||||||||||
First day average of the Henry Hub natural gas price (in dollars per Mmbtu) | $ / MMBTU | 3.06 | ||||||||||||
Full cost ceiling impairment | $ 257,900 | $ 496,900 | $ 511,882 | $ 948,600 | $ 554,000 | 754,769 | $ 2,014,518 | ||||||
Full cost ceiling impairment, after tax | $ 163,100 | 315,100 | $ 322,300 | $ 597,300 | $ 348,800 | ||||||||
Average price (in dollars per barrel) | $ / bbl | 94.99 | 50.28 | |||||||||||
Predecessor | Unevaluated Oil and Gas Leaseholds | |||||||||||||
Oil and Natural Gas Properties | |||||||||||||
Interest costs capitalized | $ 68,200 | $ 80,000 | |||||||||||
Predecessor | Tuscaloosa Marine Shale | |||||||||||||
Ceiling Limitation Disclosures | |||||||||||||
Amount of unevaluated property costs transferred to the full cost pool | 74,800 | ||||||||||||
Predecessor | Utica areas | Unevaluated Oil and Gas Leaseholds | |||||||||||||
Ceiling Limitation Disclosures | |||||||||||||
Amount of unevaluated property costs transferred to the full cost pool | $ 330,400 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | 1 Months Ended | |||||||||||||
Sep. 09, 2016 | Sep. 30, 2016 | Sep. 28, 2016 | Dec. 31, 2015 | Dec. 21, 2015 | Sep. 30, 2015 | Sep. 10, 2015 | May 01, 2015 | Dec. 19, 2013 | Aug. 13, 2013 | Jan. 14, 2013 | Nov. 06, 2012 | Jul. 16, 2012 | Feb. 08, 2012 | |
Current and long-term debt | ||||||||||||||
Principal amount outstanding, net | $ 1,016,160 | $ 1,004,524 | ||||||||||||
8.625% senior secured second lien notes due 2020 | ||||||||||||||
Current and long-term debt | ||||||||||||||
Principal amount outstanding, net | $ 670,715 | |||||||||||||
Interest rate (as a percent) | 8.625% | |||||||||||||
Unamortized discount | $ 29,300 | $ 8,600 | ||||||||||||
12.0% senior secured second lien notes due 2022 | ||||||||||||||
Current and long-term debt | ||||||||||||||
Principal amount outstanding, net | $ 105,809 | |||||||||||||
Interest rate (as a percent) | 12.00% | |||||||||||||
Unamortized discount | $ 7,000 | $ 1,400 | ||||||||||||
13.0% senior secured third lien notes due 2022 | ||||||||||||||
Current and long-term debt | ||||||||||||||
Interest rate (as a percent) | 13.00% | |||||||||||||
9.25% senior notes due 2022 | ||||||||||||||
Current and long-term debt | ||||||||||||||
Interest rate (as a percent) | 9.25% | |||||||||||||
8.875% senior notes due 2021 | ||||||||||||||
Current and long-term debt | ||||||||||||||
Interest rate (as a percent) | 8.875% | |||||||||||||
9.75% senior notes due 2020 | ||||||||||||||
Current and long-term debt | ||||||||||||||
Interest rate (as a percent) | 9.75% | |||||||||||||
8.0% convertible note due 2017 | ||||||||||||||
Current and long-term debt | ||||||||||||||
Interest rate (as a percent) | 8.00% | |||||||||||||
Successor Senior revolving credit facility | ||||||||||||||
Current and long-term debt | ||||||||||||||
Principal amount outstanding, net | $ 228,000 | |||||||||||||
Predecessor | ||||||||||||||
Current and long-term debt | ||||||||||||||
Principal amount outstanding, net | 1,031,114 | $ 2,873,637 | ||||||||||||
Predecessor | 8.625% senior secured second lien notes due 2020 | ||||||||||||||
Current and long-term debt | ||||||||||||||
Principal amount outstanding, net | 687,797 | |||||||||||||
Interest rate (as a percent) | 8.625% | |||||||||||||
Unamortized debt issuance costs | 12,200 | |||||||||||||
Predecessor | 12.0% senior secured second lien notes due 2022 | ||||||||||||||
Current and long-term debt | ||||||||||||||
Principal amount outstanding, net | 111,598 | |||||||||||||
Interest rate (as a percent) | 12.00% | |||||||||||||
Unamortized debt issuance costs | 1,200 | |||||||||||||
Predecessor | 13.0% senior secured third lien notes due 2022 | ||||||||||||||
Current and long-term debt | ||||||||||||||
Principal amount outstanding, net | $ 1,009,585 | |||||||||||||
Interest rate (as a percent) | 13.00% | 13.00% | ||||||||||||
Unamortized debt issuance costs | $ 8,400 | |||||||||||||
Predecessor | 9.25% senior notes due 2022 | ||||||||||||||
Current and long-term debt | ||||||||||||||
Principal amount outstanding, net | $ 51,887 | |||||||||||||
Interest rate (as a percent) | 9.25% | 9.25% | 9.25% | |||||||||||
Unamortized debt issuance costs | $ 800 | |||||||||||||
Predecessor | 8.875% senior notes due 2021 | ||||||||||||||
Current and long-term debt | ||||||||||||||
Principal amount outstanding, net | $ 347,671 | |||||||||||||
Interest rate (as a percent) | 8.875% | 8.875% | 8.875% | |||||||||||
Unamortized debt issuance costs | $ 5,800 | |||||||||||||
Unamortized discount | 1,000 | $ 5,700 | ||||||||||||
Unamortized premium related to debt issued | 5,500 | $ 30,000 | ||||||||||||
Predecessor | 9.75% senior notes due 2020 | ||||||||||||||
Current and long-term debt | ||||||||||||||
Principal amount outstanding, net | $ 336,470 | |||||||||||||
Interest rate (as a percent) | 9.75% | 9.75% | 9.75% | |||||||||||
Unamortized debt issuance costs | $ 4,300 | |||||||||||||
Unamortized discount | 1,900 | $ 10,200 | ||||||||||||
Unamortized premium related to debt issued | 2,600 | $ 11,000 | ||||||||||||
Predecessor | 8.0% convertible note due 2017 | ||||||||||||||
Current and long-term debt | ||||||||||||||
Principal amount outstanding, net | $ 266,629 | |||||||||||||
Interest rate (as a percent) | 8.00% | 8.00% | ||||||||||||
Unamortized discount | $ 23,000 | |||||||||||||
Predecessor | Senior revolving credit facility | ||||||||||||||
Current and long-term debt | ||||||||||||||
Principal amount outstanding, net | $ 62,000 | |||||||||||||
Contractual interest expense not accrued or recorded | $ 25,200 |
DEBT-Senior Facility (Details)
DEBT-Senior Facility (Details) $ in Thousands | Sep. 09, 2016USD ($)item | Feb. 08, 2012USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 21, 2015USD ($) |
Current and long-term debt | |||||
Letters of credit outstanding | $ 5,000 | ||||
Principal amount | 812,826 | ||||
12.0% senior secured second lien notes due 2022 | |||||
Current and long-term debt | |||||
Principal amount | $ 112,826 | ||||
Interest rate (as a percent) | 12.00% | ||||
Senior revolving credit facility | |||||
Current and long-term debt | |||||
Amount outstanding | $ 228,000 | ||||
Successor Senior revolving credit facility | |||||
Current and long-term debt | |||||
Maximum borrowing capacity | $ 600,000 | ||||
Number of interim unscheduled redeterminations of borrowing base to which the company and lender each have the right | item | 1 | ||||
Number of consecutive semi-annual redeterminations between which the company and the lenders each have the right to one interim unscheduled redetermination of borrowing base | item | 2 | ||||
Credit facility term | 120 days | ||||
Number of fiscal quarters used to determine certain financial covenants | item | 4 | ||||
Borrowing capacity available | $ 367,000 | ||||
Successor Senior revolving credit facility | Minimum | |||||
Current and long-term debt | |||||
Amount outstanding | $ 100,000 | ||||
Current Ratio | 1 | ||||
Successor Senior revolving credit facility | Maximum | |||||
Current and long-term debt | |||||
Total Net Indebtedness Leverage Ratio initial period | 4.75 | ||||
Total Net Indebtedness Leverage Ratio on September 30, 2017 | 4.50 | ||||
Total Net Indebtedness Leverage Ratio on March 31, 2019 | 4 | ||||
Successor Senior revolving credit facility | ABR - based | Minimum | |||||
Current and long-term debt | |||||
Applicable margin (as a percent) | 1.75% | ||||
Successor Senior revolving credit facility | ABR - based | Maximum | |||||
Current and long-term debt | |||||
Applicable margin (as a percent) | 2.75% | ||||
Successor Senior revolving credit facility | LIBOR | Minimum | |||||
Current and long-term debt | |||||
Applicable margin (as a percent) | 2.75% | ||||
Successor Senior revolving credit facility | LIBOR | Maximum | |||||
Current and long-term debt | |||||
Applicable margin (as a percent) | 3.75% | ||||
Predecessor | |||||
Current and long-term debt | |||||
Principal amount | $ 2,862,138 | ||||
Predecessor | 12.0% senior secured second lien notes due 2022 | |||||
Current and long-term debt | |||||
Principal amount | $ 112,826 | $ 112,800 | |||
Interest rate (as a percent) | 12.00% | ||||
Predecessor | Senior revolving credit facility | |||||
Current and long-term debt | |||||
Maximum borrowing capacity | $ 1,500,000 | ||||
Current borrowing capacity | $ 700,000 | ||||
Predecessor | Senior revolving credit facility | ABR - based | Minimum | |||||
Current and long-term debt | |||||
Applicable margin (as a percent) | 1.50% | ||||
Predecessor | Senior revolving credit facility | ABR - based | Maximum | |||||
Current and long-term debt | |||||
Applicable margin (as a percent) | 2.50% | ||||
Predecessor | Senior revolving credit facility | Euro-dollar based | Minimum | |||||
Current and long-term debt | |||||
Applicable margin (as a percent) | 2.50% | ||||
Predecessor | Senior revolving credit facility | Euro-dollar based | Maximum | |||||
Current and long-term debt | |||||
Applicable margin (as a percent) | 3.50% | ||||
Predecessor | Senior revolving credit facility | The DIP Facility | |||||
Current and long-term debt | |||||
Interim availability borrowings | $ 500,000 | ||||
Debtor in possession interim credit facility maximum borrowing capacity | 600,000 | ||||
Debtor in possession financing borrowings arranged upon final order | $ 600,000 | ||||
Predecessor | Senior revolving credit facility | The DIP Facility | ABR - based | Minimum | |||||
Current and long-term debt | |||||
Applicable margin (as a percent) | 1.75% | ||||
Predecessor | Senior revolving credit facility | The DIP Facility | ABR - based | Maximum | |||||
Current and long-term debt | |||||
Applicable margin (as a percent) | 2.75% | ||||
Predecessor | Senior revolving credit facility | The DIP Facility | Euro-dollar based | Minimum | |||||
Current and long-term debt | |||||
Applicable margin (as a percent) | 2.75% | ||||
Predecessor | Senior revolving credit facility | The DIP Facility | Euro-dollar based | Maximum | |||||
Current and long-term debt | |||||
Applicable margin (as a percent) | 3.75% |
DEBT - Amended Senior Facilitie
DEBT - Amended Senior Facilities (Details) - USD ($) $ in Thousands | Sep. 09, 2016 | Dec. 21, 2015 | Sep. 10, 2015 | May 01, 2015 | Dec. 19, 2013 | Aug. 13, 2013 | Jan. 14, 2013 | Nov. 06, 2012 | Jul. 16, 2012 | Mar. 31, 2016 | Sep. 30, 2015 | Sep. 09, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 28, 2016 | Dec. 31, 2015 |
Current and long-term debt | ||||||||||||||||
Principal amount | $ 812,826 | |||||||||||||||
Predecessor | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Principal amount | $ 2,862,138 | |||||||||||||||
Gain (loss) on extinguishment of debt | $ 535,141 | $ 81,434 | $ 557,907 | |||||||||||||
8.625% senior secured second lien notes due 2020 | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Principal amount | $ 700,000 | |||||||||||||||
Interest rate (as a percent) | 8.625% | |||||||||||||||
Unamortized discount | $ 29,300 | $ 8,600 | ||||||||||||||
Consent fee paid | 8,600 | |||||||||||||||
8.625% senior secured second lien notes due 2020 | Reorganization Adjustments | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Fair value of debt | $ 679,000 | 679,000 | ||||||||||||||
Write-off of related issuance costs and discounts and premiums | 21,000 | |||||||||||||||
8.625% senior secured second lien notes due 2020 | Predecessor | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Principal amount | $ 700,000 | 700,000 | ||||||||||||||
Interest rate (as a percent) | 8.625% | |||||||||||||||
Net proceeds from issuance | $ 686,200 | |||||||||||||||
12.0% senior secured second lien notes due 2022 | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Principal amount | $ 112,826 | |||||||||||||||
Interest rate (as a percent) | 12.00% | |||||||||||||||
Unamortized discount | $ 7,000 | 1,400 | ||||||||||||||
Consent fee paid | $ 1,400 | |||||||||||||||
12.0% senior secured second lien notes due 2022 | Reorganization Adjustments | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Fair value of debt | 107,200 | $ 107,200 | ||||||||||||||
Write-off of related issuance costs and discounts and premiums | $ 5,700 | |||||||||||||||
12.0% senior secured second lien notes due 2022 | Predecessor | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Principal amount | $ 112,800 | 112,826 | ||||||||||||||
Gross debt extinguished for new notes | $ 289,600 | |||||||||||||||
Interest rate (as a percent) | 12.00% | |||||||||||||||
13.0% senior secured third lien notes due 2022 | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Interest rate (as a percent) | 13.00% | |||||||||||||||
13.0% senior secured third lien notes due 2022 | Predecessor | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Principal amount | $ 1,020,000 | $ 1,017,970 | ||||||||||||||
Writedown of related issuance costs | 13,100 | |||||||||||||||
Gain (loss) on extinguishment of debt | $ 548,200 | |||||||||||||||
Interest rate (as a percent) | 13.00% | 13.00% | ||||||||||||||
Net gain on extinguishment of debt | $ 535,100 | |||||||||||||||
9.25% senior notes due 2022 | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Interest rate (as a percent) | 9.25% | 9.25% | ||||||||||||||
9.25% senior notes due 2022 | Predecessor | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Principal amount | $ 400,000 | $ 52,694 | ||||||||||||||
Interest rate (as a percent) | 9.25% | 9.25% | 9.25% | |||||||||||||
Net proceeds from issuance | $ 392,100 | |||||||||||||||
Principal amount repurchased | $ 15,500 | |||||||||||||||
Net gain on extinguishment of debt | 11,100 | |||||||||||||||
8.875% senior notes due 2021 | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Interest rate (as a percent) | 8.875% | 8.875% | ||||||||||||||
8.875% senior notes due 2021 | Predecessor | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Principal amount | $ 600,000 | $ 750,000 | $ 348,944 | |||||||||||||
Interest rate (as a percent) | 8.875% | 8.875% | 8.875% | |||||||||||||
Issue price as a percentage of par value | 105.00% | 99.247% | ||||||||||||||
Net proceeds from issuance | $ 619,500 | $ 725,600 | ||||||||||||||
Unamortized discount | $ 5,700 | $ 1,000 | ||||||||||||||
Unamortized premium | $ 30,000 | 5,500 | ||||||||||||||
Principal amount repurchased | 51,800 | |||||||||||||||
Net gain on extinguishment of debt | 47,500 | |||||||||||||||
9.75% senior notes due 2020 | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Interest rate (as a percent) | 9.75% | 9.75% | ||||||||||||||
9.75% senior notes due 2020 | Predecessor | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Principal amount | $ 750,000 | $ 340,035 | ||||||||||||||
Interest rate (as a percent) | 9.75% | 9.75% | 9.75% | |||||||||||||
Issue price as a percentage of par value | 102.75% | 98.646% | ||||||||||||||
Net proceeds from issuance | $ 406,300 | $ 723,100 | ||||||||||||||
Principal amount of debt issued | 400,000 | |||||||||||||||
Unamortized discount | $ 10,200 | $ 1,900 | ||||||||||||||
Unamortized premium | $ 11,000 | $ 2,600 | ||||||||||||||
Principal amount repurchased | 24,500 | |||||||||||||||
Net gain on extinguishment of debt | $ 22,800 | |||||||||||||||
Senior Unsecured Notes Held by Certain Holders | 9.25% senior notes due 2022 | Predecessor | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Extinguishment of debt, aggregate principal | $ 35,300 | $ 294,400 | ||||||||||||||
Senior Unsecured Notes Held by Certain Holders | 8.875% senior notes due 2021 | Predecessor | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Extinguishment of debt, aggregate principal | 137,700 | 774,700 | ||||||||||||||
Senior Unsecured Notes Held by Certain Holders | 9.75% senior notes due 2020 | Predecessor | ||||||||||||||||
Current and long-term debt | ||||||||||||||||
Extinguishment of debt, aggregate principal | $ 116,600 | $ 497,200 |
DEBT-Convertible Notes (Details
DEBT-Convertible Notes (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 09, 2015 | Sep. 30, 2015 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Sep. 09, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Feb. 08, 2012 |
Current and long-term debt | ||||||||||
Principal amount | $ 812,826 | |||||||||
8.0% convertible note due 2017 | ||||||||||
Current and long-term debt | ||||||||||
Interest rate (as a percent) | 8.00% | 8.00% | ||||||||
Predecessor | ||||||||||
Current and long-term debt | ||||||||||
Principal amount | $ 2,862,138 | |||||||||
Gain (loss) on extinguishment of debt | $ 535,141 | $ 81,434 | $ 557,907 | |||||||
Predecessor | February 2012 Warrants | ||||||||||
Current and long-term debt | ||||||||||
Warrant term | 5 years | |||||||||
Predecessor | 8.0% convertible note due 2017 | ||||||||||
Current and long-term debt | ||||||||||
Principal amount | $ 289,669 | $ 275,000 | ||||||||
Interest rate (as a percent) | 8.00% | 8.00% | ||||||||
Interest in kind | $ 5,800 | $ 5,700 | $ 3,200 | |||||||
Principal outstanding | $ 289,700 | |||||||||
Predecessor | 8% convertible Note pre-amendment | ||||||||||
Current and long-term debt | ||||||||||
Amount of principal and accrued interest that is convertible into one share of the entity's common stock (in dollars per share) | $ 22.50 | |||||||||
Predecessor | 8% convertible Note post-amendment | ||||||||||
Current and long-term debt | ||||||||||
Extension term | 3 years | |||||||||
Amount of principal and accrued interest that is convertible into one share of the entity's common stock (in dollars per share) | $ 12.20 | |||||||||
Gain (loss) on extinguishment of debt | $ 7,300 |
DEBT- Issuance Costs (Details)
DEBT- Issuance Costs (Details) - Predecessor - USD ($) $ in Thousands | 8 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 09, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Debt Issuance Costs | ||||
Costs associated with the issuance of debt capitalized | $ 1,977 | $ 25,703 | ||
Senior revolving credit facility | ||||
Debt Issuance Costs | ||||
Debt issuance costs expensed | $ 7,900 | |||
Costs associated with the issuance of debt capitalized | $ 40,300 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Assets | ||
Asset transfers between levels | $ 0 | |
Recurring | Total | ||
Assets | ||
Receivables from derivative contracts | 73,651 | |
Liabilities | ||
Liabilities from derivative contracts | 2,537 | |
Recurring | Level 2 | ||
Assets | ||
Receivables from derivative contracts | 73,651 | |
Liabilities | ||
Liabilities from derivative contracts | 2,385 | |
Recurring | Level 3 | ||
Liabilities | ||
Liabilities from derivative contracts | $ 152 | |
Predecessor | ||
Liabilities | ||
Liability transfers between levels | $ 0 | |
Predecessor | Recurring | Total | ||
Assets | ||
Receivables from derivative contracts | 365,475 | |
Liabilities | ||
Liabilities from derivative contracts | 290 | |
Predecessor | Recurring | Level 2 | ||
Assets | ||
Receivables from derivative contracts | 365,475 | |
Liabilities | ||
Liabilities from derivative contracts | 105 | |
Predecessor | Recurring | Level 3 | ||
Liabilities | ||
Liabilities from derivative contracts | $ 185 |
FAIR VALUE MEASUREMENTS-Level 3
FAIR VALUE MEASUREMENTS-Level 3 Reconciliation (Details) - Recurring - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Sep. 06, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Reconciliation of changes in the fair value of the Company's oil derivative instruments classified as Level 3 in the fair value hierarchy | ||||
Beginning Balance | $ (185) | $ (185) | ||
Net gain (loss) on derivative contracts | 155 | |||
Ending Balance | $ (30) | (30) | $ (185) | |
Change in unrealized gains (losses) included in earnings related to derivatives still held at September 30, 2016 (Successor) and December 31, 2015 (Predecessor) | $ 18 | |||
Predecessor | ||||
Reconciliation of changes in the fair value of the Company's oil derivative instruments classified as Level 3 in the fair value hierarchy | ||||
Beginning Balance | (185) | $ (185) | (1,319) | |
Net gain (loss) on derivative contracts | 1,134 | |||
Ending Balance | (185) | |||
Change in unrealized gains (losses) included in earnings related to derivatives still held at September 30, 2016 (Successor) and December 31, 2015 (Predecessor) | $ 137 | $ (185) |
FAIR VALUE MEASUREMENTS-Estimat
FAIR VALUE MEASUREMENTS-Estimated FV (Details) - USD ($) $ in Thousands | 3 Months Ended | 8 Months Ended | ||||||||||
Mar. 31, 2016 | Sep. 09, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 21, 2015 | Sep. 30, 2015 | Sep. 10, 2015 | May 01, 2015 | Aug. 13, 2013 | Nov. 06, 2012 | Jul. 16, 2012 | Feb. 08, 2012 | |
8.625% senior secured second lien notes due 2020 | ||||||||||||
Fair value measurements | ||||||||||||
Interest rate (as a percent) | 8.625% | |||||||||||
12.0% senior secured second lien notes due 2022 | ||||||||||||
Fair value measurements | ||||||||||||
Interest rate (as a percent) | 12.00% | |||||||||||
13.0% senior secured third lien notes due 2022 | ||||||||||||
Fair value measurements | ||||||||||||
Interest rate (as a percent) | 13.00% | |||||||||||
9.25% senior notes due 2022 | ||||||||||||
Fair value measurements | ||||||||||||
Interest rate (as a percent) | 9.25% | |||||||||||
8.875% senior notes due 2021 | ||||||||||||
Fair value measurements | ||||||||||||
Interest rate (as a percent) | 8.875% | |||||||||||
9.75% senior notes due 2020 | ||||||||||||
Fair value measurements | ||||||||||||
Interest rate (as a percent) | 9.75% | |||||||||||
8.0% convertible note due 2017 | ||||||||||||
Fair value measurements | ||||||||||||
Interest rate (as a percent) | 8.00% | |||||||||||
Total | ||||||||||||
Fair value measurements | ||||||||||||
Estimated fair value of short-term debt | $ 819,826 | |||||||||||
Total | 8.625% senior secured second lien notes due 2020 | ||||||||||||
Fair value measurements | ||||||||||||
Estimated fair value of short-term debt | 707,000 | |||||||||||
Total | 12.0% senior secured second lien notes due 2022 | ||||||||||||
Fair value measurements | ||||||||||||
Estimated fair value of short-term debt | $ 112,826 | |||||||||||
Predecessor | ||||||||||||
Fair value measurements | ||||||||||||
Non-cash impairment charge | $ 28,100 | $ 28,056 | ||||||||||
Predecessor | 8.625% senior secured second lien notes due 2020 | ||||||||||||
Fair value measurements | ||||||||||||
Interest rate (as a percent) | 8.625% | |||||||||||
Predecessor | 12.0% senior secured second lien notes due 2022 | ||||||||||||
Fair value measurements | ||||||||||||
Interest rate (as a percent) | 12.00% | |||||||||||
Predecessor | 13.0% senior secured third lien notes due 2022 | ||||||||||||
Fair value measurements | ||||||||||||
Interest rate (as a percent) | 13.00% | 13.00% | ||||||||||
Predecessor | 9.25% senior notes due 2022 | ||||||||||||
Fair value measurements | ||||||||||||
Interest rate (as a percent) | 9.25% | 9.25% | 9.25% | |||||||||
Predecessor | 8.875% senior notes due 2021 | ||||||||||||
Fair value measurements | ||||||||||||
Interest rate (as a percent) | 8.875% | 8.875% | 8.875% | |||||||||
Predecessor | 9.75% senior notes due 2020 | ||||||||||||
Fair value measurements | ||||||||||||
Interest rate (as a percent) | 9.75% | 9.75% | 9.75% | |||||||||
Predecessor | 8.0% convertible note due 2017 | ||||||||||||
Fair value measurements | ||||||||||||
Interest rate (as a percent) | 8.00% | 8.00% | ||||||||||
Predecessor | Total | ||||||||||||
Fair value measurements | ||||||||||||
Estimated fair value of debt | $ 1,180,560 | |||||||||||
Predecessor | Total | 8.625% senior secured second lien notes due 2020 | ||||||||||||
Fair value measurements | ||||||||||||
Estimated fair value of debt | 479,500 | |||||||||||
Predecessor | Total | 12.0% senior secured second lien notes due 2022 | ||||||||||||
Fair value measurements | ||||||||||||
Estimated fair value of debt | 77,286 | |||||||||||
Predecessor | Total | 13.0% senior secured third lien notes due 2022 | ||||||||||||
Fair value measurements | ||||||||||||
Estimated fair value of debt | 333,385 | |||||||||||
Predecessor | Total | 9.25% senior notes due 2022 | ||||||||||||
Fair value measurements | ||||||||||||
Estimated fair value of debt | 14,422 | |||||||||||
Predecessor | Total | 8.875% senior notes due 2021 | ||||||||||||
Fair value measurements | ||||||||||||
Estimated fair value of debt | 95,506 | |||||||||||
Predecessor | Total | 9.75% senior notes due 2020 | ||||||||||||
Fair value measurements | ||||||||||||
Estimated fair value of debt | 93,068 | |||||||||||
Predecessor | Total | 8.0% convertible note due 2017 | ||||||||||||
Fair value measurements | ||||||||||||
Estimated fair value of debt | $ 87,393 |
DERIVATIVE AND HEDGING ACTIVI57
DERIVATIVE AND HEDGING ACTIVITIES (Details) $ in Thousands | Sep. 30, 2016USD ($)item | Dec. 31, 2015USD ($)item |
Derivative and hedging activities | ||
Asset derivative contracts | $ 73,651 | |
Liability derivative contracts | (2,537) | |
Predecessor | ||
Derivative and hedging activities | ||
Asset derivative contracts | $ 365,475 | |
Liability derivative contracts | (290) | |
Derivatives not designated as hedging contracts | ||
Derivative and hedging activities | ||
Asset derivative contracts | 73,651 | |
Liability derivative contracts | $ (2,537) | |
Derivatives not designated as hedging contracts | Commodity contracts | ||
Derivative and hedging activities | ||
Number of open commodity derivative contracts | item | 37 | |
Derivatives not designated as hedging contracts | Commodity contracts | Current assets - receivables from derivative contracts | ||
Derivative and hedging activities | ||
Asset derivative contracts | $ 70,835 | |
Derivatives not designated as hedging contracts | Commodity contracts | Other noncurrent assets - receivables from derivative contracts | ||
Derivative and hedging activities | ||
Asset derivative contracts | 2,816 | |
Derivatives not designated as hedging contracts | Commodity contracts | Current liabilities - liabilities from derivative contracts | ||
Derivative and hedging activities | ||
Liability derivative contracts | (1,415) | |
Derivatives not designated as hedging contracts | Commodity contracts | Other noncurrent liabilities - liabilities from derivative contracts | ||
Derivative and hedging activities | ||
Liability derivative contracts | $ (1,122) | |
Derivatives not designated as hedging contracts | Commodity contracts | Collars | Natural gas | ||
Derivative and hedging activities | ||
Number of open commodity derivative contracts | item | 1 | |
Derivatives not designated as hedging contracts | Commodity contracts | Collars | Crude oil | ||
Derivative and hedging activities | ||
Number of open commodity derivative contracts | item | 18 | |
Derivatives not designated as hedging contracts | Commodity contracts | Swaps | Crude oil | ||
Derivative and hedging activities | ||
Number of open commodity derivative contracts | item | 12 | |
Derivatives not designated as hedging contracts | Commodity contracts | Swaptions | Crude oil | ||
Derivative and hedging activities | ||
Number of open commodity derivative contracts | item | 5 | |
Derivatives not designated as hedging contracts | Commodity contracts | Extendable collars | Crude oil | ||
Derivative and hedging activities | ||
Number of open commodity derivative contracts | item | 1 | |
Derivatives not designated as hedging contracts | Predecessor | ||
Derivative and hedging activities | ||
Asset derivative contracts | 365,475 | |
Liability derivative contracts | $ (290) | |
Derivatives not designated as hedging contracts | Predecessor | Commodity contracts | ||
Derivative and hedging activities | ||
Number of open commodity derivative contracts | item | 36 | |
Derivatives not designated as hedging contracts | Predecessor | Commodity contracts | Current assets - receivables from derivative contracts | ||
Derivative and hedging activities | ||
Asset derivative contracts | $ 348,861 | |
Derivatives not designated as hedging contracts | Predecessor | Commodity contracts | Other noncurrent assets - receivables from derivative contracts | ||
Derivative and hedging activities | ||
Asset derivative contracts | 16,614 | |
Derivatives not designated as hedging contracts | Predecessor | Commodity contracts | Other noncurrent liabilities - liabilities from derivative contracts | ||
Derivative and hedging activities | ||
Liability derivative contracts | $ (290) | |
Derivatives not designated as hedging contracts | Predecessor | Commodity contracts | Collars | Natural gas | ||
Derivative and hedging activities | ||
Number of open commodity derivative contracts | item | 1 | |
Derivatives not designated as hedging contracts | Predecessor | Commodity contracts | Collars | Crude oil | ||
Derivative and hedging activities | ||
Number of open commodity derivative contracts | item | 16 | |
Derivatives not designated as hedging contracts | Predecessor | Commodity contracts | Swaps | Crude oil | ||
Derivative and hedging activities | ||
Number of open commodity derivative contracts | item | 13 | |
Derivatives not designated as hedging contracts | Predecessor | Commodity contracts | Swaptions | Crude oil | ||
Derivative and hedging activities | ||
Number of open commodity derivative contracts | item | 5 | |
Derivatives not designated as hedging contracts | Predecessor | Commodity contracts | Extendable collars | Crude oil | ||
Derivative and hedging activities | ||
Number of open commodity derivative contracts | item | 1 |
DERIVATIVE AND HEDGING ACTIVI58
DERIVATIVE AND HEDGING ACTIVITIES- Realized Unrealized (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 09, 2016 | Sep. 30, 2015 | Sep. 09, 2016 | Sep. 30, 2015 | |
Derivative and hedging activities | |||||
Total net gain (loss) on derivative contracts | $ (7,575) | ||||
Derivatives not designated as hedging contracts | Commodity contracts | Other Income Expense | |||||
Derivative and hedging activities | |||||
Unrealized gain (loss) on commodity contracts | (30,338) | ||||
Realized gain (loss) on commodity contracts | 22,763 | ||||
Total net gain (loss) on derivative contracts | $ (7,575) | ||||
Predecessor | |||||
Derivative and hedging activities | |||||
Total net gain (loss) on derivative contracts | $ 17,783 | $ 204,621 | $ (17,998) | $ 216,805 | |
Predecessor | Derivatives not designated as hedging contracts | Commodity contracts | Other Income Expense | |||||
Derivative and hedging activities | |||||
Unrealized gain (loss) on commodity contracts | (39,451) | 89,741 | (263,732) | (93,972) | |
Realized gain (loss) on commodity contracts | 57,234 | 114,880 | 245,734 | 310,777 | |
Total net gain (loss) on derivative contracts | $ 17,783 | $ 204,621 | $ (17,998) | $ 216,805 |
DERIVATIVE AND HEDGING ACTIVI59
DERIVATIVE AND HEDGING ACTIVITIES- Open contracts (Details) $ in Thousands | Sep. 30, 2016$ / MMBTU | Sep. 30, 2016bbl | Sep. 30, 2016MMBTU | Sep. 30, 2016$ / bbl | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($)MMBTU$ / MMBTU$ / bblbbl |
Derivative Assets | ||||||
Gross amounts presented in the consolidated balance sheets | $ | $ 73,651 | |||||
Amounts not offset in the consolidated balance sheets | $ | (2,506) | |||||
Net amount | $ | 71,145 | |||||
Derivative Liabilities | ||||||
Gross amounts presented in the consolidated balance sheet | $ | (2,537) | |||||
Amounts not offset in the consolidated balance sheet | $ | 2,408 | |||||
Net amount | $ | $ (129) | |||||
Predecessor | ||||||
Derivative Assets | ||||||
Gross amounts presented in the consolidated balance sheets | $ | $ 365,475 | |||||
Amounts not offset in the consolidated balance sheets | $ | (53) | |||||
Net amount | $ | 365,422 | |||||
Derivative Liabilities | ||||||
Gross amounts presented in the consolidated balance sheet | $ | (290) | |||||
Amounts not offset in the consolidated balance sheet | $ | 52 | |||||
Net amount | $ | $ (238) | |||||
January 2016 - June 2016 | Collars | Predecessor | Commodity contracts | Crude oil | ||||||
Derivative and hedging activities | ||||||
Volume in Bbl's | bbl | 182,000 | |||||
Floors (in dollars per Mmbtu's/Bbl's) | 90 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 96.85 | |||||
January 2016 - June 2016 | Collars | Predecessor | Commodity contracts | Crude oil | Weighted Average | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 90 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 96.85 | |||||
January 2016 - December 2016 | Collars | Commodity contracts | Crude oil | 365,000 Bbls | Extendable period through December 31, 2017 | ||||||
Derivative and hedging activities | ||||||
Volume in Bbl's | bbl | 365,000 | |||||
Floors (in dollars per Mmbtu's/Bbl's) | 60 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 75 | |||||
January 2016 - December 2016 | Collars | Predecessor | Commodity contracts | Crude oil | ||||||
Derivative and hedging activities | ||||||
Volume in Mmbtu's | MMBTU | 4,392,000 | |||||
January 2016 - December 2016 | Collars | Predecessor | Commodity contracts | Crude oil | Minimum | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | $ / MMBTU | 60 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | $ / MMBTU | 64 | |||||
January 2016 - December 2016 | Collars | Predecessor | Commodity contracts | Crude oil | Maximum | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | $ / MMBTU | 90 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | $ / MMBTU | 95.10 | |||||
January 2016 - December 2016 | Collars | Predecessor | Commodity contracts | Crude oil | Weighted Average | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | $ / MMBTU | 71.91 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | $ / MMBTU | 77.71 | |||||
January 2016 - December 2016 | Collars | Predecessor | Commodity contracts | Natural gas | ||||||
Derivative and hedging activities | ||||||
Volume in Bbl's | bbl | 732,000 | |||||
Floors (in dollars per Mmbtu's/Bbl's) | 4 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 4.22 | |||||
January 2016 - December 2016 | Collars | Predecessor | Commodity contracts | Natural gas | Weighted Average | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | $ / MMBTU | 4 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | $ / MMBTU | 4.22 | |||||
January 2016 - December 2016 | Swaps | Commodity contracts | Crude oil | 730,000 Bbls | Extendable period through December 31, 2017 | ||||||
Derivative and hedging activities | ||||||
Volume in Bbl's | bbl | 730,000 | |||||
Floors (in dollars per Mmbtu's/Bbl's) | 88.25 | |||||
January 2016 - December 2016 | Swaps | Commodity contracts | Crude oil | 912,500 Bbls | Extendable period through December 31, 2017 | ||||||
Derivative and hedging activities | ||||||
Volume in Bbl's | bbl | 912,500 | |||||
Floors (in dollars per Mmbtu's/Bbl's) | 88 | |||||
January 2016 - December 2016 | Swaps | Commodity contracts | Crude oil | 547,500 Bbls | Extendable period through December 31, 2017 | ||||||
Derivative and hedging activities | ||||||
Volume in Bbl's | bbl | 547,500 | |||||
Floors (in dollars per Mmbtu's/Bbl's) | 88.87 | |||||
January 2016 - December 2016 | Swaps | Predecessor | Commodity contracts | Crude oil | ||||||
Derivative and hedging activities | ||||||
Volume in Bbl's | bbl | 4,758,000 | |||||
January 2016 - December 2016 | Swaps | Predecessor | Commodity contracts | Crude oil | Minimum | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 62 | |||||
January 2016 - December 2016 | Swaps | Predecessor | Commodity contracts | Crude oil | Maximum | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 91.73 | |||||
January 2016 - December 2016 | Swaps | Predecessor | Commodity contracts | Crude oil | Weighted Average | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 85.43 | |||||
October 2016 - December 2016 | Collars | Commodity contracts | Crude oil | ||||||
Derivative and hedging activities | ||||||
Volume in Bbl's | bbl | 920,000 | |||||
October 2016 - December 2016 | Collars | Commodity contracts | Crude oil | Extendable period through December 31, 2017 | ||||||
Derivative and hedging activities | ||||||
Volume in Bbl's | bbl | 4,000 | |||||
October 2016 - December 2016 | Collars | Commodity contracts | Crude oil | Minimum | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 60 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 64 | |||||
October 2016 - December 2016 | Collars | Commodity contracts | Crude oil | Minimum | Extendable period through December 31, 2017 | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 49.40 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 54.40 | |||||
October 2016 - December 2016 | Collars | Commodity contracts | Crude oil | Maximum | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 90 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 95.10 | |||||
October 2016 - December 2016 | Collars | Commodity contracts | Crude oil | Maximum | Extendable period through December 31, 2017 | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 51.50 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 56.50 | |||||
October 2016 - December 2016 | Collars | Commodity contracts | Crude oil | Weighted Average | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 74.30 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 80.26 | |||||
October 2016 - December 2016 | Collars | Commodity contracts | Natural gas | ||||||
Derivative and hedging activities | ||||||
Volume in Bbl's | bbl | 5,000 | |||||
Volume in Mmbtu's | MMBTU | 184,000 | |||||
Floors (in dollars per Mmbtu's/Bbl's) | 4 | 3.15 | ||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 4.22 | 3.50 | ||||
October 2016 - December 2016 | Collars | Commodity contracts | Natural gas | Weighted Average | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | $ / MMBTU | 4 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | $ / MMBTU | 4.22 | |||||
October 2016 - December 2016 | Swaps | Commodity contracts | Crude oil | ||||||
Derivative and hedging activities | ||||||
Volume in Bbl's | bbl | 1,104,000 | |||||
October 2016 - December 2016 | Swaps | Commodity contracts | Crude oil | Extendable period through December 31, 2016 | ||||||
Derivative and hedging activities | ||||||
Volume in Bbl's | bbl | 4,000 | |||||
Floors (in dollars per Mmbtu's/Bbl's) | 50 | |||||
October 2016 - December 2016 | Swaps | Commodity contracts | Crude oil | Minimum | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 62 | |||||
October 2016 - December 2016 | Swaps | Commodity contracts | Crude oil | Maximum | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 91.73 | |||||
October 2016 - December 2016 | Swaps | Commodity contracts | Crude oil | Weighted Average | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 84.91 | |||||
January 2017 - December 2017 | Collars | Commodity contracts | Crude oil | ||||||
Derivative and hedging activities | ||||||
Volume in Bbl's | bbl | 3,923,750 | |||||
January 2017 - December 2017 | Collars | Commodity contracts | Crude oil | Minimum | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 47 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 52 | |||||
January 2017 - December 2017 | Collars | Commodity contracts | Crude oil | Maximum | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 60 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 76.84 | |||||
January 2017 - December 2017 | Collars | Commodity contracts | Crude oil | Weighted Average | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 51.29 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 60.41 | |||||
January 2017 - December 2017 | Collars | Predecessor | Commodity contracts | Crude oil | ||||||
Derivative and hedging activities | ||||||
Volume in Bbl's | bbl | 1,368,750 | |||||
January 2017 - December 2017 | Collars | Predecessor | Commodity contracts | Crude oil | Minimum | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 50 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 70 | |||||
January 2017 - December 2017 | Collars | Predecessor | Commodity contracts | Crude oil | Maximum | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 60 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 76.84 | |||||
January 2017 - December 2017 | Collars | Predecessor | Commodity contracts | Crude oil | Weighted Average | ||||||
Derivative and hedging activities | ||||||
Floors (in dollars per Mmbtu's/Bbl's) | 57.33 | |||||
Ceilings (in dollars per Mmbtu's/Bbl's) | 74.16 |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended |
Sep. 30, 2016 | Sep. 09, 2016 | |
Activity related to ARO liability | ||
Liability for asset retirement obligations at the beginning of the period | $ 32,486 | |
Liabilities settled and divested | (1,211) | |
Additions | 8 | |
Accretion expense | 131 | |
Liability for asset retirement obligations at the end of the period | 31,414 | $ 32,486 |
Fair value fresh-start adjustment | (16,883) | |
Predecessor | ||
Activity related to ARO liability | ||
Liability for asset retirement obligations at the beginning of the period | $ 49,369 | 47,016 |
Liabilities settled and divested | (180) | |
Additions | 1,044 | |
Acquisitions | 75 | |
Accretion expense | 1,414 | |
Liability for asset retirement obligations at the end of the period | $ 49,369 |
COMMITMENTS AND CONTINGENCIES61
COMMITMENTS AND CONTINGENCIES (Details) | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($) | Mar. 31, 2016item | Sep. 09, 2016USD ($) | Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($) | Apr. 05, 2016USD ($) | Jan. 31, 2015USD ($) | |
Commitments and contingencies | |||||||
Rent expense | $ 400,000 | ||||||
Approximate future minimum lease payments for all non-cancelable operating leases | |||||||
Remaining period in 2016 | 867,000 | $ 867,000 | |||||
2,017 | 3,493,000 | 3,493,000 | |||||
2,018 | 3,540,000 | 3,540,000 | |||||
2,019 | 2,997,000 | 2,997,000 | |||||
2,020 | 1,811,000 | 1,811,000 | |||||
Thereafter | 3,677,000 | 3,677,000 | |||||
Total | 16,385,000 | $ 16,385,000 | |||||
Predecessor | |||||||
Commitments and contingencies | |||||||
Rent expense | $ 5,900,000 | $ 6,400,000 | |||||
Non-cancelable termination penalties | $ 1,200,000 | $ 6,000,000 | |||||
Approximate future minimum lease payments for all non-cancelable operating leases | |||||||
Number of long-term natural gas gathering contracts to which the entity is committed | item | 1 | ||||||
Number of trigger dates | item | 2 | ||||||
Maximum | Predecessor | |||||||
Approximate future minimum lease payments for all non-cancelable operating leases | |||||||
Drilling rig commitments | 3,000,000 | $ 3,000,000 | |||||
Drilling rig commitments | |||||||
Commitments and contingencies | |||||||
Non-cancelable termination penalties | 13,000,000 | $ 13,000,000 | |||||
Approximate future minimum lease payments for all non-cancelable operating leases | |||||||
Number of drilling rig commitments | item | 2 | ||||||
Drilling rig commitments | 18,200,000 | $ 18,200,000 | |||||
Drilling rig commitments | Minimum | |||||||
Commitments and contingencies | |||||||
Stacking fees per day pertaining to the new drilling rig commitment | 16,000 | ||||||
Drilling rig commitments | Maximum | |||||||
Commitments and contingencies | |||||||
Stacking fees per day pertaining to the new drilling rig commitment | $ 17,000 | ||||||
Gathering, transportation and sales | North Dakota | |||||||
Approximate future minimum lease payments for all non-cancelable operating leases | |||||||
Number of long-term crude oil sales contracts to which the entity is committed | item | 8 | ||||||
Number of long-term natural gas sales contracts to which the entity is committed | item | 5 | ||||||
Gathering, transportation and sales | North Dakota | Minimum | |||||||
Approximate future minimum lease payments for all non-cancelable operating leases | |||||||
Period of commitment for production from the date of first production | 1 year | ||||||
Gathering, transportation and sales | North Dakota | Maximum | |||||||
Approximate future minimum lease payments for all non-cancelable operating leases | |||||||
Period of commitment for production from the date of first production | 10 years | ||||||
Reorganization Adjustments | |||||||
Commitments and contingencies | |||||||
Payments for amended certain office lease arrangements | $ 3,400,000 |
MEZZANINE EQUITY (Details)
MEZZANINE EQUITY (Details) $ / shares in Units, $ in Thousands | Dec. 31, 2015USD ($)itemshares | Jun. 16, 2014USD ($)multipliershares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 09, 2016USD ($)shares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015shares | Jun. 01, 2015item |
Apollo Global Management | Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | |||||||
Mezzanine equity | |||||||
Ownership percentage in subsidiaries | 100.00% | 100.00% | |||||
Preferred Stock | |||||||
Mezzanine equity | |||||||
Balances at beginning of period (in shares) | shares | 174,968 | ||||||
HK TMS Divestiture (in shares) | shares | 175,759 | ||||||
Dividends paid in-kind (in shares) | shares | 791 | ||||||
Balances at end of period (in shares) | shares | 174,968 | ||||||
Increase (Decrease) in Temporary Equity | |||||||
Balances at beginning of period | $ 41,070 | ||||||
Dividends paid in-kind | 791 | ||||||
Fair value fresh-start adjustment | $ (178,821) | ||||||
HK TMS Divestiture | $ 41,861 | ||||||
Balances at end of period | $ 41,070 | ||||||
Predecessor | Preferred Stock | |||||||
Mezzanine equity | |||||||
Balances at beginning of period (in shares) | shares | 174,968 | 165,639 | 165,639 | ||||
Dividends paid in-kind (in shares) | shares | 9,329 | ||||||
Balances at end of period (in shares) | shares | 165,639 | 174,968 | |||||
Increase (Decrease) in Temporary Equity | |||||||
Balances at beginning of period | $ 219,891 | $ 183,986 | $ 183,986 | ||||
Dividends paid in-kind | 9,329 | ||||||
Accretion of redeemable noncontrolling interest | 26,576 | ||||||
Balances at end of period | $ 183,986 | $ 219,891 | |||||
HK TMS | Apollo | Preferred Stock | |||||||
Mezzanine equity | |||||||
Additional preferred shares issued for dividends paid-in-kind | shares | 791 | ||||||
PIK exit fee per share | $ / shares | $ 5 | ||||||
HK TMS | Predecessor | |||||||
Mezzanine equity | |||||||
Value of quarterly dividend payments whose equivalent amount is to be maintained as minimum cash balance | 3,500 | ||||||
Additional amount to be maintained as cash balance | $ 10,000 | ||||||
HK TMS | Predecessor | Minimum | |||||||
Mezzanine equity | |||||||
Number of quarterly dividend payments whose equivalent amount is to be maintained as minimum cash balance | item | 2 | ||||||
HK TMS | Predecessor | Preferred Stock | |||||||
Mezzanine equity | |||||||
Proceeds received on sale of preferred shares | $ 150,000 | ||||||
Proceeds contributed by parent | $ 50,000 | ||||||
Dividend rate (as a percent) | 8.00% | ||||||
Rate of return on preferred shares (as a percent) | 12.00% | ||||||
Multiple factor on investment | multiplier | 1.25 | ||||||
Number of wells committed to be drilled | item | 6.5 | ||||||
Number of consecutive twelve month periods beginning December 31, 2015 for wells committed to be drilled | item | 5 | ||||||
HK TMS | Predecessor | Preferred Stock | Minimum | |||||||
Mezzanine equity | |||||||
Withdrawal exit fee (per share) | $ / shares | $ 2.50 | ||||||
HK TMS | Predecessor | Preferred Stock | Maximum | |||||||
Mezzanine equity | |||||||
Withdrawal exit fee (per share) | $ / shares | $ 20 | ||||||
HK TMS | Predecessor | Apollo | Preferred Stock | |||||||
Mezzanine equity | |||||||
Additional preferred shares issued for dividends paid-in-kind | shares | 9,329 | 9,340 | |||||
Additional preferred shares available for issuance | shares | 150,000 |
MEZZANINE EQUITY-Change in FV (
MEZZANINE EQUITY-Change in FV (Details) - Embedded Derivative - USD ($) $ in Thousands | 8 Months Ended | |
Sep. 09, 2016 | Sep. 10, 2016 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Fair value fresh-start adjustment | $ (366) | |
Predecessor | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning Balance | $ 6,100 | |
Change in fair value | (5,734) | |
Ending Balance | $ 366 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 09, 2016 | Sep. 30, 2016 |
Stockholders' equity | ||
Authorized shares of capital stock, after amendment of certificate of incorporation | 1,001,000,000 | |
Authorized shares of common stock, after amendment of certificate of incorporation | 1,000,000,000 | |
Common stock, par value (in dollars per share) | $ 0.0001 | |
Preferred stock, par value (in dollars per share) | $ 0.0001 | |
Additional Paid in Capital | $ 571,114 | $ 584,310 |
8.0% convertible note due 2017 | ||
Stockholders' equity | ||
Number of warrants issued | 900,000 | |
Senior Unsecured Notes Held by Certain Holders | ||
Stockholders' equity | ||
Number of warrants issued | 3,800,000 | |
Warrants Issued to Former Holders of Unsecured and Convertible Notes | ||
Stockholders' equity | ||
Number of warrants issued | 4,700,000 | |
Exercise price (in dollars per share) | $ 14.04 | |
Additional Paid in Capital | $ 16,700 | |
Preferred stock | ||
Stockholders' equity | ||
Authorized shares of preferred stock, after amendment of certificate of incorporation | 1,000,000 | |
Common Stock | ||
Stockholders' equity | ||
Shares issued | 90,000,000 | |
Authorized shares of common stock, after amendment of certificate of incorporation | 1,000,000,000 | |
Common stock, par value (in dollars per share) | $ 0.0001 | |
5.75% Series A Convertible Perpetual Preferred Stock | ||
Stockholders' equity | ||
Dividend rate (as a percent) | 5.75% | |
Preferred stock, shares outstanding | 0 |
STOCKHOLDERS' EQUITY- Options (
STOCKHOLDERS' EQUITY- Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Sep. 30, 2016 | Sep. 09, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 09, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Stock-based compensation | |||||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
General and administrative | |||||||||
Stock-based compensation | |||||||||
Compensation expense recorded | $ 13,200 | ||||||||
Common Stock | |||||||||
Stock-based compensation | |||||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||||
Stock options | |||||||||
Stock-based compensation | |||||||||
Vesting period | 3 years | ||||||||
Percentage of awards vesting on the annual anniversary date of the grant | 33.33% | ||||||||
Expiration term | 10 years | ||||||||
Unrecognized compensation expense | $ 29,800 | $ 29,800 | $ 29,800 | $ 29,800 | |||||
Weighted average remaining vesting period | 1 year 10 months 24 days | ||||||||
Number of Shares | |||||||||
Granted (in shares) | 5,000 | ||||||||
Exercised | 0 | ||||||||
Outstanding at the end of the period (in shares) | 5,000 | 5,000 | 5,000 | 5,000 | |||||
Weighted Average Exercise Price Per Share | |||||||||
Granted (in dollars per share) | $ 9.24 | ||||||||
Outstanding at the end of the period (in dollars per share) | $ 9.24 | $ 9.24 | $ 9.24 | $ 9.24 | |||||
Aggregate Intrinsic Value | |||||||||
Outstanding at the end of the period | $ 714 | $ 714 | $ 714 | $ 714 | |||||
Weighted Average Remaining Contractual Term | |||||||||
Outstanding at the end of the period | 10 years | 0 years | |||||||
Exercised | 0 | ||||||||
Assumptions: | |||||||||
Weighted average grant date fair value of grants | $ 6.15 | ||||||||
Stock price volatility (as a percent) | 56.30% | ||||||||
Risk free rate of return (as a percent) | 1.30% | ||||||||
Expected term | 6 years | ||||||||
Predecessor | |||||||||
Stock-based compensation | |||||||||
Common stock, par value (in dollars per share) | $ 0.0001 | ||||||||
Predecessor | General and administrative | |||||||||
Stock-based compensation | |||||||||
Compensation expense recorded | $ 1,200 | $ 3,000 | $ 4,900 | $ 11,200 | |||||
2016 Incentive Plan | |||||||||
Stock-based compensation | |||||||||
Common stock, par value (in dollars per share) | $ 3.52 | $ 3.52 | |||||||
2016 Incentive Plan | Common Stock | |||||||||
Stock-based compensation | |||||||||
Aggregate number of shares available | 10,000 | 10,000 | |||||||
Shares issuable under the plan | 10,000 | 10,000 | |||||||
Maximum number of shares that remained reserved for issuance under the Plan | 2,400 | 2,400 | 2,400 | 2,400 | |||||
2016 Incentive Plan | Restricted Stock | |||||||||
Stock-based compensation | |||||||||
Weighted average remaining vesting period | 10 months 24 days | ||||||||
Weighted average grant date price (in dollars per share) | $ 9.17 | $ 9.17 | $ 9.17 | $ 9.17 | |||||
Performance Share Units | |||||||||
Granted (in shares) | 2,638 | ||||||||
Unrecognized compensation expense | $ 12,000 | $ 12,000 | $ 12,000 | $ 12,000 | |||||
Number of Shares | |||||||||
Granted (in shares) | 2,638 | ||||||||
Vested (in shares) | (1,250) | ||||||||
Unvested outstanding shares at the end of the period (in shares) | 1,388 | 1,388 | 1,388 | 1,388 | |||||
Weighted Average Grant Date fair Value Per Share | |||||||||
Granted (in dollars per share) | $ 9.17 | ||||||||
Vested (in dollars per share) | 9.24 | ||||||||
Unvested outstanding shares at the end of the period (in dollars per share) | $ 9.10 | $ 9.10 | $ 9.10 | $ 9.10 | |||||
Aggregate Intrinsic Value | |||||||||
Aggregate Intrinsic Value (in dollars) | $ 13,020 | $ 13,020 | $ 13,020 | $ 13,020 | |||||
Additional Disclosures | |||||||||
Total fair value of shares vested | $ 11,500 | ||||||||
2016 Incentive Plan | Restricted Stock | Directors and employees | |||||||||
Performance Share Units | |||||||||
Granted (in shares) | 2,600 | ||||||||
Number of Shares | |||||||||
Granted (in shares) | 2,600 | ||||||||
2016 Incentive Plan | Restricted Stock | Non-employee director | |||||||||
Stock-based compensation | |||||||||
Vesting period | 6 months | ||||||||
2016 Incentive Plan | Restricted Stock | Minimum | |||||||||
Stock-based compensation | |||||||||
Grant date price (in dollars per share) | $ 7.82 | $ 7.82 | $ 7.82 | $ 7.82 | |||||
2016 Incentive Plan | Restricted Stock | Maximum | |||||||||
Stock-based compensation | |||||||||
Grant date price (in dollars per share) | $ 9.24 | $ 9.24 | $ 9.24 | $ 9.24 |
EARNINGS PER COMMON SHARE (Deta
EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 09, 2016 | Sep. 30, 2015 | Sep. 09, 2016 | Sep. 30, 2015 | |
Basic: | |||||
Net income (loss) available to common stockholders | $ (451,483) | ||||
Weighted average basic number of common shares outstanding | 91,071 | ||||
Basic net income (loss) per share of common stock (in dollars per share) | $ (4.96) | ||||
Diluted: | |||||
Net income (loss) available to common stockholders | $ (451,483) | ||||
Net income (loss) available to common stockholders after assumed conversions | $ (451,483) | ||||
Weighted average basic number of common shares outstanding | 91,071 | ||||
Weighted average diluted number of common shares outstanding | 91,071 | ||||
Diluted net income (loss) per share of common stock (in dollars per share) | $ (4.96) | ||||
Common stock equivalents of stock options, warrants, restricted shares, convertible debt and preferred stock, not included in the computations of diluted earnings per share of common stock as their effect would have been anti-dilutive (in shares) | 11,100 | ||||
Predecessor | |||||
Basic: | |||||
Net income (loss) available to common stockholders | $ 916,421 | $ 123,528 | $ (32,794) | $ (1,582,246) | |
Weighted average basic number of common shares outstanding | 120,905 | 117,211 | 120,513 | 103,525 | |
Basic net income (loss) per share of common stock (in dollars per share) | $ 7.58 | $ 1.05 | $ (0.27) | $ (15.28) | |
Diluted: | |||||
Net income (loss) available to common stockholders | $ 916,421 | $ 123,528 | $ (32,794) | $ (1,582,246) | |
Interest on Convertible Note, net | 1,522 | 4,664 | |||
Series A preferred dividends | 2,451 | 4,196 | 8,847 | 13,999 | |
Net income (loss) available to common stockholders after assumed conversions | $ 920,394 | $ 132,388 | $ (32,794) | $ (1,582,246) | |
Weighted average basic number of common shares outstanding | 120,905 | 117,211 | 120,513 | 103,525 | |
Common stock equivalent shares representing shares issuable upon conversion of Convertible Note | 23,743 | 23,744 | |||
Common stock equivalent shares representing shares issuable upon conversion of Preferred Stock | 7,228 | 10,003 | |||
Weighted average diluted number of common shares outstanding | 151,876 | 150,958 | 120,513 | 103,525 | |
Diluted net income (loss) per share of common stock (in dollars per share) | $ 6.06 | $ 0.88 | $ (0.27) | $ (15.28) | |
Common stock equivalents of stock options, warrants, restricted shares, convertible debt and preferred stock, not included in the computations of diluted earnings per share of common stock as their effect would have been anti-dilutive (in shares) | 11,900 | 13,100 | 43,600 | 47,800 |
ADDITIONAL FINANCIAL STATEMEN67
ADDITIONAL FINANCIAL STATEMENT INFORMATION (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 09, 2016 | Dec. 31, 2015 |
Accounts receivable: | |||
Oil, natural gas and natural gas liquids revenues | $ 62,010 | ||
Joint interest accounts | 38,832 | ||
Accrued settlements on derivative contracts | 22,695 | ||
Affiliated partnership | 221 | ||
Other | 1,486 | ||
Total | 125,244 | $ 116,859 | |
Prepaids and other: | |||
Prepaids | 7,641 | ||
Other | 72 | ||
Total | 7,713 | 7,629 | |
Accounts payable and accrued liabilities: | |||
Trade payables | 37,605 | ||
Accrued oil and natural gas capital costs | 33,991 | ||
Revenues and royalties payable | 62,516 | ||
Accrued interest expense | 12,666 | ||
Accrued employee compensation | 7,102 | ||
Accrued lease operating expenses | 11,837 | ||
Drilling advances from partners | 93 | ||
Income taxes payable | 3,863 | ||
Affiliated partnership | 297 | ||
Other | 1,022 | ||
Total | $ 170,992 | 173,688 | |
Predecessor | |||
Accounts receivable: | |||
Oil, natural gas and natural gas liquids revenues | $ 55,129 | ||
Joint interest accounts | 67,626 | ||
Accrued settlements on derivative contracts | 47,011 | ||
Affiliated partnership | 176 | ||
Other | 3,682 | ||
Total | 116,859 | 173,624 | |
Prepaids and other: | |||
Prepaids | 4,585 | ||
Inventory | 4,635 | ||
Other | 50 | ||
Total | 8,961 | 9,270 | |
Accounts payable and accrued liabilities: | |||
Trade payables | 47,261 | ||
Accrued oil and natural gas capital costs | 54,651 | ||
Revenues and royalties payable | 64,002 | ||
Accrued interest expense | 88,499 | ||
Accrued employee compensation | 2,829 | ||
Accrued lease operating expenses | 20,036 | ||
Drilling advances from partners | 7,964 | ||
Income taxes payable | 9,172 | ||
Affiliated partnership | 365 | ||
Other | 306 | ||
Total | $ 160,000 | $ 295,085 |