Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 06, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Emerald Oil, Inc. | |
Entity Central Index Key | 1,283,843 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock Shares Outstanding | 8,708,499 | |
Entity Well Known Seasoned Issuer | No | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filer | No |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash and Cash Equivalents | $ 5,068,320 | $ 12,389,230 |
Accounts Receivable - Oil and Natural Gas Sales | 4,002,942 | 7,203,455 |
Accounts Receivable - Joint Interest Partners | 8,370,512 | 31,842,464 |
Other Receivables | 860,980 | 980,317 |
Prepaid Expenses and Other Current Assets | 681,581 | 289,061 |
Fair Value of Commodity Derivatives | 6,336,057 | 5,044,125 |
Total Current Assets | 25,320,392 | 57,748,652 |
Oil and Natural Gas Properties, Full Cost Method, at cost: | ||
Proved Oil and Natural Gas Properties | 697,814,220 | 593,472,170 |
Unproved Oil and Natural Gas Properties | 141,768,220 | 166,708,263 |
Equipment and Facilities | 15,220,754 | 6,086,896 |
Other Property and Equipment | 4,266,762 | 2,583,372 |
Total Property and Equipment | 859,069,956 | 768,850,701 |
Less - Accumulated Depreciation, Depletion and Amortization | (486,650,786) | (149,703,417) |
Total Property and Equipment, Net | $ 372,419,170 | 619,147,284 |
Restricted Cash | 4,000,000 | |
Fair Value of Commodity Derivatives | $ 1,375,070 | |
Debt Issuance Costs, Net of Amortization | $ 4,183,174 | 5,779,125 |
Deposits on Acquisitions | 140,173 | |
Deferred Tax Assets, Net | $ 1,813,561 | 1,813,796 |
Other Non-Current Assets | 329,572 | 430,846 |
Total Assets | 405,440,939 | 689,059,876 |
CURRENT LIABILITIES | ||
Accounts Payable | 38,762,753 | $ 120,136,903 |
Revolving Credit Facility | 159,683,000 | |
Convertible Senior Notes | 151,500,000 | |
Accrued Expenses | 5,073,975 | $ 11,267,831 |
Advances from Joint Interest Partners | 802,119 | 2,577,247 |
Deferred Tax Liability, Net | 1,813,561 | 1,813,796 |
Total Current Liabilities | $ 357,635,408 | 135,795,777 |
LONG-TERM LIABILITIES | ||
Revolving Credit Facility | 75,000,000 | |
Convertible Senior Notes | 151,500,000 | |
Asset Retirement Obligations | $ 3,265,518 | 2,671,975 |
Warrant Liability | $ 187,000 | $ 2,199,000 |
Fair Value of Commodity Derivatives | ||
Total Liabilities | $ 361,087,926 | $ 367,166,752 |
COMMITMENTS AND CONTINGENCIES | ||
Preferred Stock - Par Value $.001; 20,000,000 Shares Authorized; | ||
Series B Voting Preferred Stock – 255,732 issued and outstanding at September 30, 2015 and December 31, 2014. Liquidation preference value of $256 as of September 30, 2015 and December 31, 2014. | $ 256 | $ 256 |
STOCKHOLDERS' EQUITY | ||
Common Stock, Par Value $.001; 500,000,000 Shares Authorized, 8,708,499 and 3,891,431 Shares Issued and Outstanding, respectively | 8,709 | 3,891 |
Additional Paid-In Capital | 507,612,218 | 455,087,277 |
Accumulated Deficit | (463,268,170) | (133,198,300) |
Total Stockholders' Equity | 44,352,757 | 321,892,868 |
Total Liabilities and Stockholders' Equity | $ 405,440,939 | $ 689,059,876 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Preferred Stock - Par Value (in Dollars per Share) | $ .001 | $ 0.001 |
Preferred Stock - Shares Authorized (in Shares) | 20,000,000 | 20,000,000 |
Preferred Stock - Shares Issued (in Shares) | 255,732 | 255,732 |
Preferred stock - Shares Outstanding (in Shares) | 255,732 | 255,732 |
Preferred Stock - Liquidation Preference Value | $ 256 | $ 256 |
STOCKHOLDERS' EQUITY | ||
Common Stock, Par Value (in Dollars per Share) | $ .001 | $ 0.001 |
Common Stock, Shares Authorized (in Shares) | 500,000,000 | 500,000,000 |
Common Stock, Shares Issued (in Shares) | 8,708,499 | 3,891,431 |
Common Stock, Shares Outstanding (in Shares) | 8,708,499 | 3,891,431 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
REVENUES | ||||
Oil Sales | $ 17,350,524 | $ 28,266,332 | $ 52,981,871 | $ 76,989,268 |
Natural Gas Sales | 494,804 | 460,857 | 1,224,667 | 2,061,201 |
Net Gains on Commodity Derivatives | 12,699,147 | 11,184,716 | 8,148,386 | 3,722,780 |
Total Revenues | 30,544,475 | 39,911,905 | 62,354,924 | 82,773,249 |
OPERATING EXPENSES | ||||
Production Expenses | 8,201,949 | 6,962,450 | 25,972,453 | 13,477,176 |
Production Taxes | 1,653,989 | 3,142,998 | 5,488,364 | 8,632,608 |
General and Administrative Expenses | 3,821,473 | 5,483,655 | 12,495,471 | 21,609,218 |
Depletion of Oil and Natural Gas Properties | 11,242,324 | $ 9,193,566 | 31,622,386 | $ 24,071,676 |
Impairment of Oil and Natural Gas Properties | 158,278,000 | 304,903,000 | ||
Depreciation and Amortization | 232,350 | $ 104,465 | 559,139 | $ 251,722 |
Accretion of Discount on Asset Retirement Obligations | 52,500 | $ 28,037 | 153,007 | $ 63,837 |
Standby Rig Expense | 3,800,446 | 6,173,111 | ||
Total Operating Expenses | 187,283,031 | $ 24,915,171 | 387,366,931 | $ 68,106,237 |
INCOME (LOSS) FROM OPERATIONS | (156,738,556) | 14,996,734 | (325,012,007) | 14,667,012 |
OTHER INCOME (EXPENSE) | ||||
Interest Expense | (2,735,348) | (1,206,571) | (7,044,901) | (2,515,034) |
Warrant revaluation gain (expense) | 221,000 | 216,000 | 2,012,000 | (1,751,000) |
Other Income (Expense) | 281 | (347,088) | 539 | (343,041) |
Total Other Expense, Net | (2,514,067) | (1,337,659) | (5,032,362) | (4,609,075) |
INCOME (LOSS) BEFORE INCOME TAXES | $ (159,252,623) | $ 13,659,075 | $ (330,044,369) | $ 10,057,937 |
INCOME TAX PROVISION | ||||
NET INCOME (LOSS) | $ (159,252,623) | $ 13,659,075 | $ (330,044,369) | $ 10,057,937 |
Net Income (Loss) Per Common Share - Basic (in Dollars per Share) | $ (19.85) | $ 4.11 | $ (52.10) | $ 3.03 |
Net Income (Loss) Per Common Share - Diluted (in Dollars per Share) | $ (19.85) | $ 3.29 | $ (52.10) | $ 2.89 |
Weighted Average Shares Outstanding - Basic (in Shares) | 8,021,992 | 3,324,970 | 6,334,549 | 3,316,751 |
Weighted Average Shares Outstanding - Diluted (in Shares) | 8,021,992 | 4,419,020 | 6,334,549 | 4,093,377 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (330,044,369) | $ 10,057,937 |
Adjustments to Reconcile Net Loss to Net Cash Provided By Operating Activities: | ||
Depletion of Oil and Natural Gas Properties | 31,622,386 | $ 24,071,676 |
Impairment of Oil and Natural Gas Properties | 304,903,000 | |
Depreciation and Amortization | 559,138 | $ 251,722 |
Amortization of Debt Issuance Costs | 2,145,832 | 727,997 |
Accretion of Discount on Asset Retirement Obligations | 153,007 | 63,837 |
Net Gains on Commodity Derivatives | (8,148,386) | (3,722,780) |
Net Cash Settlements Received (Paid) on Commodity Derivatives | 5,481,384 | (2,775,591) |
Warrant Revaluation (Gain) Expense | (2,012,000) | 1,751,000 |
Share-Based Compensation Expense | 2,710,683 | 9,497,044 |
Changes in Assets and Liabilities: | ||
Decrease (Increase) in Trade Receivables - Oil and Natural Gas Revenues | 3,200,513 | (1,390,582) |
Decrease (Increase) in Accounts Receivable - Joint Interest Partners | 23,471,952 | (1,224,056) |
Decrease (Increase) in Other Receivables | 119,337 | (1,132,418) |
Increase in Prepaid Expenses and Other Current Assets | (392,520) | (223,875) |
(Increase) Decrease in Other Non-Current Assets | (35,882) | 67,463 |
(Decrease) Increase in Accounts Payable | 6,585,509 | 2,364,168 |
Decrease in Accrued Expenses | $ (4,867,351) | (7,813,470) |
Increase in Other Non-Current Liabilities | 198,551 | |
(Decrease) Increase in Advances from Joint Interest Partners | $ (1,775,128) | 200,434 |
Net Cash Provided By Operating Activities | 33,677,105 | 30,969,057 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of Other Property and Equipment | (1,683,390) | (1,015,677) |
Restricted Cash Released | $ 4,000,000 | 11,000,512 |
Payments of Restricted Cash | (2,648,721) | |
Decrease (Increase) in Deposits for Acquisitions | $ 140,173 | (648,441) |
Proceeds from Sale of Oil and Natural Gas Properties, Net of Transaction Costs | 36,155,859 | |
Investment in Oil and Natural Gas Properties | $ (175,371,888) | (391,368,324) |
Net Cash Used For Investing Activities | $ (172,915,105) | (348,524,792) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from Issuance of Convertible Senior Notes, Net of Transaction Costs | $ 166,893,211 | |
Proceeds from Issuance of Common Stock, Net of Transaction Costs | $ 48,049,115 | |
Advances on Revolving Credit Facility | 100,000,000 | $ 55,000,000 |
Payments on Revolving Credit Facility | (15,317,000) | (35,000,000) |
Cash Paid for Finance Costs | (265,144) | (24,605) |
Cash Paid for Debt Issuance Costs | $ (549,881) | (1,117,871) |
Proceeds from Exercise of Stock Options and Warrants | 110,750 | |
Net Cash Provided by Financing Activities | $ 131,917,090 | 185,861,485 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (7,320,910) | (131,694,250) |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 12,389,230 | 144,255,438 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 5,068,320 | 12,561,188 |
Supplemental Disclosure of Cash Flow Information | ||
Cash Paid During the Period for Interest | $ 4,124,010 | $ 1,867,433 |
Cash Paid During the Period for Income Taxes | ||
Non-Cash Financing and Investing Activities: | ||
Oil and Natural Gas Properties Included in Account Payable | $ 19,997,664 | $ 92,963,874 |
Stock-Based Compensation Capitalized to Oil and Natural Gas Properties | 708,600 | 2,020,992 |
Asset Retirement Obligation Costs and Liabilities | $ 440,536 | $ 1,669,757 |
ORGANIZATION AND NATURE OF BUSI
ORGANIZATION AND NATURE OF BUSINESS | 9 Months Ended |
Sep. 30, 2015 | |
Organization and Nature of Business [Abstract] | |
ORGANIZATION AND NATURE OF BUSINESS | NOTE 1 ORGANIZATION AND NATURE OF BUSINESS Description of Operations |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES The accompanying condensed consolidated financial statements have been prepared on the accrual basis of accounting whereby revenues are recognized when earned and expenses are recognized when incurred. The condensed consolidated financial statements as of September 30, 2015 and for the three and nine months ended September 30, 2015 and 2014 are unaudited. In the opinion of management, such financial statements include the adjustments and accruals that are of a normal recurring nature and necessary for a fair presentation of the results for the interim periods. The interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted in these condensed consolidated financial statements as of September 30, 2015 and for the three and nine months ended September 30, 2015 and 2014. Interim financial results should be read in conjunction with the audited financial statements and footnotes for the year ended December 31, 2014, which were included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Reverse Stock Split On May 20, 2015, a majority of the Company’s stockholders approved a 1-for-20 reverse stock split pursuant to which all stockholders of record received one share of common stock for each twenty shares of common stock owned (subject to minor adjustments as a result of fractional shares), which the Company’s board of directors had previously authorized.. This reverse stock split decreased the issued and outstanding shares of common stock by approximately 105,274,000 shares, the number of shares of common stock underlying outstanding warrants by approximately 5,919,000 shares, outstanding stock options by approximately 955,000 shares and the number of shares of common stock underlying the outstanding 2.0% Convertible Senior Notes due 2019 (the “Convertible Notes”) by 16,402,000 shares. GAAP requires that the reverse stock split be applied retrospectively to all periods presented. As a result, all shares of common and preferred stock, warrants and stock options, as well as any other common stock derivatives, described herein have been adjusted to reflect the 1-for-20 reverse stock split. Cash and Cash Equivalents The Company considers highly liquid investments with insignificant interest rate risk and original maturities of three months or less to be cash equivalents. Cash equivalents consist primarily of interest-bearing bank accounts and money market funds. The Company’s cash positions represent assets held in checking and money market accounts. These assets are generally available to the Company on a daily or weekly basis and are highly liquid in nature. Due to the balances being greater than their $250,000 insurance coverage, the Company does not have FDIC coverage on the entire amount of its bank deposits. The Company believes this risk to be minimal. In addition, the Company is subject to Security Investor Protection Corporation protection on a vast majority of its financial assets in the event one of the brokerage firms that the Company utilizes for its investments fails. Restricted Cash Restricted cash included in current and long-term assets on the condensed consolidated balance sheets totaled $0 and $4 million at September 30, 2015 and December 31, 2014, respectively. At December 31, 2014, the balance related to a drilling commitment agreement entered into pursuant to oil and natural gas leases. The commitment was fulfilled and funds released during the three months ended September 30, 2015. Accounts Receivable The Company records estimated oil and natural gas revenue receivable from third parties at its net revenue interest. The Company also reflects costs incurred on behalf of joint interest partners in accounts receivable. Management periodically reviews accounts receivable amounts for collectability and records its allowance for uncollectible receivables under the specific identification method. The Company did not record any allowance for uncollectible receivables during the three and nine months ended September 30, 2015 and 2014. Full Cost Method The Company follows the full cost method of accounting for oil and natural gas operations whereby all costs related to the exploration and development of oil and natural gas properties are initially capitalized into a single cost center (“full cost pool”). Such costs include land acquisition costs, a portion of employee salaries related to property development, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling directly related to acquisitions, and exploration activities. For the three months ended September 30, 2015 and 2014, the Company capitalized $814,011 and $1,354,556, respectively, of internal salaries, which included $78,390 and $624,629, respectively, of stock-based compensation. For the nine months ended September 30, 2015 and 2014, the Company capitalized $3,245,667 and $4,278,105, respectively, of internal salaries, which included $708,600, and $2,020,992, respectively, of stock-based compensation. Internal salaries are capitalized based on employee time allocated to the acquisition of leaseholds and development of oil and natural gas properties. The Company capitalized no interest in the three and nine months ended September 30, 2015 and 2014. Proceeds from property sales will generally be credited to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to these costs. No gain or loss was recognized on any sales during the three and nine months ended September 30, 2015 and 2014. The Company engages in acreage trades in the Williston Basin, but these trades are generally for acreage that is similar both in terms of geographic location and potential resource value. The Company assesses all items classified as unproved property on a quarterly basis for possible impairment or reduction in value. 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 an 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 amortization. For the nine months ended September 30, 2015 and the year ended December 31, 2014, the Company included $15,231,547 and $2,979,258, respectively, related to expiring leases within costs subject to the depletion calculation. Capitalized costs associated with impaired properties and properties having proved reserves, estimated future development costs, and asset retirement costs under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 410-20-25 are depleted and amortized on the unit-of-production method based on the estimated gross proved reserves. The costs of unproved properties are withheld from the depletion base until such time as they are developed, impaired or abandoned. Under the full cost method of accounting, capitalized oil and natural gas property costs less accumulated depletion, net of deferred income taxes, may not exceed a ceiling amount equal to the present value, discounted at 10%, of estimated future net revenues from proved oil and natural gas reserves plus the cost of unproved properties not subject to amortization (without regard to estimates of fair value), or estimated fair value, if lower, of unproved properties that are subject to amortization. Should capitalized costs exceed this ceiling, which is tested on a quarterly basis, an impairment is recognized. The present value of estimated future net revenues is computed by applying prices based on a 12-month unweighted average of the oil and natural gas prices in effect on the first day of each month, less estimated future expenditures to be incurred in developing and producing the proved reserves (assuming the continuation of existing economic conditions), less any applicable future taxes. Any required write-downs are included in the consolidated statement of operations as an impairment charge. Based on calculated reserves at September 30, 2015, the unamortized costs of the Company’s oil and natural gas properties exceeded the ceiling test limit by $158,278,000. As a result, the Company was required to record impairments of the net capitalized costs of its oil and natural gas properties in the amount of $158,278,000 and $304,903,000 for the three and nine months ended September 30, 2015, respectively. As of September 30, 2014, the unamortized costs of the Company’s oil and natural gas properties did not exceed the ceiling test limit and no impairment expense was recognized for the three and nine months ended September 30, 2014. Other Property and Equipment Property and equipment that are not oil and natural gas properties are recorded at cost and depreciated using the straight-line method over their estimated useful lives of three to seven years. Expenditures for replacements, renewals, and betterments are capitalized. Maintenance and repairs are charged to expense as incurred. ASC 360-10-35-21 requires that long-lived assets, other than oil and natural gas properties, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The determination of impairment is based upon expectations of undiscounted future cash flows, before interest, of the related asset. If the carrying value of the asset exceeds the undiscounted future cash flows, the impairment would be computed as the difference between the carrying value of the asset and the fair value. The Company has not recognized any impairment losses on non-oil and natural gas long-lived assets. Asset Retirement Obligations The Company records the fair value of a liability for an asset retirement obligation in the period in which it can be reasonably estimated or the asset is acquired and a corresponding increase in the carrying amount of the related long-lived asset. The liability is accreted to its present value each period, and the capitalized cost is depleted using the units of production method. If the liability is settled for an amount other than the recorded amount, a gain or loss is recognized. Revenue Recognition and Natural Gas Balancing The Company recognizes oil and natural gas revenues from its interests in producing wells when production is delivered and title has transferred to the purchaser, to the extent the selling price is reasonably determinable. The Company uses the sales method of accounting for balancing of natural gas production and would recognize a liability if the existing proved reserves were not adequate to cover the current imbalance situation. As of September 30, 2015 and December 31, 2014, the Company’s natural gas production was in balance, i.e., its cumulative portion of natural gas production taken and sold from wells in which it has an interest equaled the Company’s entitled interest in natural gas production from those wells. Stock-Based Compensation The Company accounts for stock-based compensation under the provisions of ASC 718-10-55. The Company recognizes stock-based compensation expense in the financial statements over the vesting period of equity-classified employee stock-based compensation awards based on the grant date fair value of the awards, net of estimated forfeitures. For options and warrants, the Company uses the Black-Scholes option valuation model to calculate the fair value of stock based compensation awards at the date of grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. For the stock options and warrants granted, the Company has used a variety of comparable and peer companies to determine the expected volatility input based on the expected term of the options. The Company believes the use of peer company data fairly represents the expected volatility it would experience if it were in the oil and natural gas industry over the expected term of the options. The Company used the simplified method to determine the expected term of the options due to the lack of historical data. Changes in these assumptions can materially affect the fair value estimate. On May 27, 2011, the stockholders of the Company approved the 2011 Equity Incentive Plan (the “2011 Plan”), under which 35,714 shares of common stock were reserved. On October 22, 2012, the stockholders of the Company approved an amendment to the 2011 Plan to increase the number of shares available for issuance under the 2011 Plan to 175,000 shares. On July 10, 2013, the stockholders of the Company approved an amendment to the 2011 Plan to increase the number of shares authorized for issuance under the 2011 Plan to 490,000 shares. On May 20, 2015, the stockholders of the Company approved an amendment to the 2011 Plan to increase the number of shares authorized for issuance under the 2011 Plan to 990,000 shares. The purpose of the 2011 Plan is to promote the success of the Company and its affiliates by facilitating the employment and retention of competent personnel and by furnishing incentives to those officers, directors and employees upon whose efforts the success of the Company and its affiliates will depend to a large degree. It is the intention of the Company to carry out the 2011 Plan through the granting of incentive stock options, nonqualified stock options, restricted stock awards, restricted stock unit awards, performance awards and stock appreciation rights. As of September 30, 2015, 42,491 stock options and 380,396 shares of common stock and restricted stock units had been issued to officers, directors and employees under the 2011 Plan net of cancelations and forfeitures, including 72,092 nonvested restricted stock units. As of September 30, 2015, there were 567,113 shares available for issuance under the 2011 Plan. Income Taxes The Company accounts for income taxes under ASC 740-10-30 . The tax effects from an uncertain tax position can be recognized in the financial statements only if the position is more likely than not of being sustained if the position were to be challenged by a taxing authority. The Company has examined the tax positions taken in its tax returns and determined that there are no uncertain tax positions. As a result, the Company has recorded no uncertain tax liabilities in its condensed consolidated balance sheet. Net Income (Loss) Per Common Share Basic net income (loss) per common share is based on the net income (loss) divided by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share are computed using the weighted average number of shares of common stock plus dilutive common share equivalents outstanding during the period using the treasury stock method. In the computation of diluted earnings per share, excess tax benefits that would be created upon the assumed vesting of nonvested restricted shares or the assumed exercise of stock options (i.e., hypothetical excess tax benefits) are included in the assumed proceeds component of the treasury stock method to the extent that such excess tax benefits are more likely than not to be realized. When a loss from continuing operations exists, all potentially dilutive securities are anti-dilutive and are therefore excluded from the computation of diluted earnings per share. As the Company had losses for the three and nine months ended September 30, 2015 and 2014, the potentially dilutive shares were anti-dilutive and were thus not included in the net loss per share calculation. As of September 30, 2015, (i) 72,092 nonvested restricted stock units were issued and outstanding and represent potentially dilutive shares; (ii) 30,759 stock options were issued and presently exercisable and represent potentially dilutive shares; (iii) 9,777 stock options were granted but were not presently exercisable and represent potentially dilutive shares; (iv) 255,732 warrants were issued and presently exercisable, which have an exercise price of $9.52 and represent potentially dilutive shares; (v) 11,165 warrants were issued and presently exercisable, which have an exercise price of $137.20 and represent potentially dilutive shares; (vi) 44,643 warrants were issued and presently exercisable, which have an exercise price of $994.00 and represent potentially dilutive shares; and (vii) $151.5 million of Convertible Notes were convertible into approximately 863,248 shares of common stock as of September 30, 2015 and represent potentially dilutive shares. Derivative and Other Financial Instruments Commodity Derivative Instruments The Company has entered into commodity derivative instruments, utilizing oil derivative swap contracts to reduce the effect of price changes on a portion of future oil production. The Company’s commodity derivative instruments are measured at fair value and are included in the consolidated balance sheet as derivative assets and liabilities. Net gains and losses are recorded based on the changes in the fair values of the derivative instruments. The Company’s valuation estimate takes into consideration the counterparties’ creditworthiness, the Company’s creditworthiness, and the time value of money. The consideration of the factors results in an estimated exit price for each derivative asset or liability under a marketplace participant’s view. Management believes that this approach provides a reasonable, non-biased, verifiable, and consistent methodology for valuing commodity derivative instruments (see Note 13 – Derivative Instruments and Price Risk Management). Warrant Liability From time to time, the Company may have financial instruments such as warrants that may be classified as liabilities when either (a) the holders possess rights to net cash settlement, (b) physical or net equity settlement is not in the Company’s control, or (c) the instruments contain other provisions that cause the Company to conclude that they are not indexed to the Company’s equity. Such instruments are initially recorded at fair value and subsequently adjusted to fair value at the end of each reporting period through earnings. As a part of a securities purchase agreement entered into in February 2013 with affiliates of White Deer Energy L.P. (see Note 6 – Preferred and Common Stock), the Company issued warrants that contain a put and other liability type provisions. Accordingly, these warrants are accounted for as a liability. This warrant liability is accounted for at fair value with changes in fair value reported in the consolidated statement of operations. New Accounting Pronouncements From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s consolidated financial statements upon adoption. Use of Estimates The preparation of consolidated financial statements under GAAP in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to proved oil and natural gas reserve volumes, future development costs, estimates relating to certain oil and natural gas revenues and expenses, fair value of derivative instruments, valuation of share-based compensation, valuation of asset retirement obligations and the valuation of deferred income taxes. Actual results may differ from those estimates. Industry Segment and Geographic Information The Company operates in one industry segment, which is the exploration, development and production of oil and natural gas, with all of the Company’s operational activities having been conducted in the U.S. The Company’s current operational activities and the Company’s consolidated revenues are generated from markets exclusively in the U.S., and the Company has no long-lived assets located outside the U.S. Reclassifications Certain reclassifications have been made to amounts reported in prior periods in order to conform to the current period presentation. These reclassifications did not impact the Company’s net loss, stockholders’ equity or cash flows. |
LIQUIDITY AND CAPITAL RESOURCES
LIQUIDITY AND CAPITAL RESOURCES | 9 Months Ended |
Sep. 30, 2015 | |
Liquidity and Capital Resources [Abstract] | |
LIQUIDITY AND CAPITAL RESOURCES | NOTE 3 LIQUIDITY AND CAPITAL RESOURCES As of September 30, 2015, the Company had available cash of approximately $5.1 million, availability under its reserve-based revolving credit facility (the “Credit Facility”) with Wells Fargo Bank, N.A., as administrative agent, and the lenders party thereto, of approximately $40.0 million, and had drawn approximately $160.0 million. On October 6, 2015, the Company’s borrowing base under its Credit Facility was decreased from $200 million to $120 million as part of the Company’s regularly scheduled semi-annual redetermination by its lender. The decrease in the borrowing base has resulted in the outstanding revolving credit facility balance exceeding the revised borrowing base by approximately $19.6 million as of November 6, 2015. Under the terms of the Credit Agreement, the Company is obligated to repay the deficiency in three monthly installments following the date of the redetermination. The Company does not expect to be able to make the monthly installments, which will result in a default under the Credit Agreement. Further, the previously announced term loan facility was not consummated and has had an adverse effect on the Company’s operations and liquidity. The Company and its advisors are negotiating with the bank group regarding a repayment schedule and continues to work with a group of term debt providers for a term debt solution. The Company believes it will need to complete certain transactions, including management of and/or refinancing of its debt capital structure and potential asset sales, to have sufficient liquidity to satisfy all of its obligations, including eliminating the approximate $19.6 million deficiency under the Credit Facility in the near term and obligations such as oil, natural gas and produced water transportation and processing commitments, fixed drilling commitments and operating leases, in the long term. As a result of substantial declines in oil and gas prices during the latter half of 2014 and continuing into the first part of 2015, the liquidity outlook of the Company, including its working capital balance and EBITDA, has been impacted. As a result, the Company expects lower operating cash flows than previously experienced and if commodity prices continue to remain low, the Company’s liquidity will be further impacted. In addition to the default regarding the deficiency repayments under the Credit Agreement described above, the Company was not in compliance with the total debt to EBITDA and Senior Secured Debt-to-EBITDA ratios under the Credit Facility as of September 30, 2015. The breach of the covenants under the Credit Facility could cause a default under the Credit Facility if not amended or waived by the lending group, and the lenders would be able to accelerate the maturity of the Credit Facility and exercise other rights and remedies. This, in turn, would cause a default under the Convertible Notes due in 2019 and permit the holders of those notes to accelerate their maturity. In accordance with the provisions under ASC 470-10-45-1, the Company has classified the balances of the Credit Facility and Convertible Notes as a current liability as of September 30, 2015. Furthermore, the ability to refinance any of the existing indebtedness on commercially reasonable terms may be materially and adversely impacted by the current conditions in the energy industry and the Company’s financial condition. On November 5, 2015, the Company and certain of its subsidiaries entered into a forbearance agreement (the “Forbearance Agreement”) with the lenders party to the Credit Agreement. Pursuant to the Forbearance Agreement, the Lenders and the Agent agreed to forbear from exercising their rights and remedies under the Credit Agreement until December 18, 2015 (the “Forbearance Period”) with respect to certain events of default under the Credit Agreement. For additional information regarding the Forbearance Agreement, see Note 15 Subsequent Events— Forbearance Agreement. The commodity price decline has materially reduced the revenues that were generated from the sale of the Company’s oil and gas production volumes during that period, which, in turn, has negatively affected the Company’s working capital balance and EBITDA. The potential for future oil prices to remain at their current price levels for an extended period of time raises substantial doubt regarding the Company’s ability to continue as a going concern. For purposes of this discussion, the term “substantial doubt” refers to concerns that a company may not be able to meet its obligations when they come due. The accompanying financial statements do not include any adjustments related to the recoverability and classification of recorded assets or the amounts and classification of liabilities, other than classifying the outstanding balances of the Credit Facility and Convertible Notes as current liabilities, that might result from the uncertainty associated with the ability to meet obligations as they come due. The Company continues to pursue a number of actions including (i) actively managing the debt capital structure, (ii) selling additional assets, (iii) minimizing capital expenditures, (iv) obtaining waivers or amendments from lenders, (v) effectively managing working capital and (vi) improving cash flows from operations. As previously noted, the Company has engaged financial advisors and other professionals to assist it with reviewing all options to improve its liquidity profile and strengthen its balance sheet. These efforts continue in earnest and the Company is considering all available strategic alternatives and financing possibilities, including, without limitation, the incurrence of additional secured indebtedness and the exchange or refinancing of existing obligations. The Company can provide no assurance that these discussions will result in the completion of a transaction, or that any completed transaction will result in sufficient liquidity to satisfy the Company’s obligations. |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES | 9 Months Ended |
Sep. 30, 2015 | |
Oil and Natural Gas Properties [Abstract] | |
OIL AND NATURAL GAS PROPERTIES | NOTE 4 OIL AND NATURAL GAS PROPERTIES The value of the Company’s oil and natural gas properties consists of all acreage acquisition costs (including cash expenditures and the value of stock consideration), drilling costs and other associated capitalized costs. Acquisitions are accounted for as purchases and, accordingly, the results of operations are included in the accompanying condensed consolidated statements of operations from the closing date of the acquisition. Purchase prices are allocated to acquired assets based on their estimated fair value at the time of the acquisition. The Company has historically funded acquisitions with internal cash flow, the issuance of equity and debt securities and short-term borrowings under the Credit Facility. Joint Venture Agreement On July 31, 2015, the Company entered into a purchase and sale agreement with Koch Exploration Company, LLC (“Koch Exploration”), a wholly owned subsidiary of Koch Industries Inc. Subject to customary closing conditions, Koch Exploration acquired a 30% working interest in approximately 25,000 undeveloped net acres held by the Company in McKenzie County, North Dakota and approximately 4,400 undeveloped net acres held by the Company in Richland County, Montana for approximately $17.4 million. Koch Exploration reimbursed the Company approximately $5.4 million for its proportionate share of recently drilled and uncompleted wells in southern McKenzie County, North Dakota. Total proceeds to the Company upon closing the transaction were approximately $22.8 million and all proceeds were used to pay down outstanding borrowings under the Company’s Credit Facility (see Note 15 Subsequent Events – Joint Venture Agreement). Acquisitions On September 2, 2014, the Company acquired approximately 30,500 net acres located in McKenzie, Billings and Dunn Counties of North Dakota from an unrelated third party for approximately $71.2 million in cash and the assignment of approximately 4,300 net acres held by the Company in Williams County, North Dakota. The following table summarizes the purchase price and estimated values of assets acquired and liabilities assumed for the September 2014 acquisition (in thousands): Purchase Price Consideration Given: Cash $ 71,187 Assignment of oil and natural gas properties 35,918 Liabilities assumed, net 1,121 Total $ 108,226 Allocation of Purchase Price: Proved oil and natural gas properties $ 48,997 Unproved oil and natural gas properties 59,083 Liabilities released 146 Total fair value of oil and natural gas properties $ 108,226 Pro Forma Operating Results In accordance with ASC Topic 805, presented below are unaudited pro forma results for the three and nine months ended September 30, 2014 to show the effect on our consolidated results of operations as if the September 2014 acquisition had occurred on January 1, 2013. The pro forma results reflect the results of combining our statement of operations with the results of operations from the oil and natural gas properties acquired in September 2014, adjusted for (i) the assumption of asset retirement obligations and accretion expense for the properties acquired and (ii) depletion expense applied to the adjusted basis of the properties acquired. The pro forma information is based upon these assumptions and is not necessarily indicative of future results of operations: Three Months Nine Months Revenues $ 43,160,959 $ 95,151,146 Net Income $ 14,860,956 $ 14,723,060 Net Income Per Share – Basic $ 4.47 $ 4.44 Net Income Per Share – Diluted $ 3.36 $ 3.60 Weighted Average Shares Outstanding – Basic $ 3,324,970 $ 3,316,470 Weighted Average Shares Outstanding – Diluted $ 4,419,020 $ 4,093,377 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 5 RELATED PARTY TRANSACTIONS In February 2013, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with affiliates of White Deer Energy L.P. (“White Deer Energy”), pursuant to which the Company issued to White Deer Energy 500,000 shares of Series A Perpetual Preferred Stock (“Series A Preferred Stock”), 255,732 shares of Series B Voting Preferred Stock (“Series B Preferred Stock”) and warrants to purchase an initial aggregate amount of 255,732 shares of the Company’s common stock at an initial exercise price of $115.40 per share, for an aggregate $50 million. Pursuant to the Securities Purchase Agreement, White Deer Energy obtained the right to designate one member of the Company’s board of directors as long as White Deer Energy held any shares of Series A Preferred Stock. White Deer Energy designated Thomas J. Edelman as its initial director. Following the redemption of the Series A Preferred Stock during 2013, the Governance and Nominating Committee of the Company nominated Mr. Edelman to continue to serve as a director of the Company, and Mr. Edelman was elected to serve on the board of directors of the Company for another term at the annual stockholders meeting of the Company held in June 2014. On January 28, 2015, Mr. Edelman resigned from his position as a director of the Company and Ben Guill, a Managing Partner of White Deer Energy, was appointed to the Board of Directors. For additional information regarding the Securities Purchase Agreement with White Deer Energy, see Note 6 — Preferred and Common Stock. The transaction was subject to customary closing conditions, as well as the execution and delivery of certain other agreements, including a registration rights agreement. Under the terms of the registration rights agreement, as amended, the Company agreed to file with the Securities and Exchange Commission (the “SEC”), within 30 days upon receipt of notice from White Deer Energy, a shelf registration statement covering resales of the 255,732 shares of Company common stock issuable upon exercise of the warrants and use commercially reasonable efforts to cause such registration statement to be declared effective within 120 days after the filing thereof. In June 2013 and October 2013, the Company amended the registration rights agreement to include 139,280 shares of Company common stock and 254,643 shares of Company common stock, respectively, issued to White Deer Energy in connection with subsequent private placements. On April 19, 2014, the Company received a request from White Deer Energy to register the shares of Company common stock and the shares of Company common stock underlying the warrants held by White Deer Energy. On May 16, 2014, the Company filed with the SEC a registration statement on Form S-3 to register for resale the 393,923 shares of common stock and 255,732 shares of common stock underlying the warrants held by White Deer Energy, and the SEC declared the registration statement effective on May 30, 2014. In February 2015, the Company completed a public offering of 1,357,955 shares of common stock at a price of $22.40 per share for total net proceeds of approximately $29.4 million. White Deer Energy purchased 669,643 common shares in the public offering. White Deer Energy’s participation in the public offering was approved by the Company’s board of directors. |
PREFERRED AND COMMON STOCK
PREFERRED AND COMMON STOCK | 9 Months Ended |
Sep. 30, 2015 | |
Preferred and Common Stock [Abstract] | |
PREFERRED AND COMMON STOCK | NOTE 6 PREFERRED AND COMMON STOCK Preferred Stock On February 19, 2013, the Company issued to White Deer Energy 500,000 shares of Series A Preferred Stock, 255,732 shares of Series B Preferred Stock and warrants to purchase an initial aggregate 255,732 shares of the Company’s common stock at an initial exercise price of $115.40 per share, in exchange for an aggregate $50 million. The warrants are exercisable until December 31, 2019. On various dates throughout 2013, the Company redeemed all of the outstanding shares of Series A Preferred Stock, including the $50,000,000 principal and redemption premiums of $6,250,000, and no shares of Series A Preferred Stock remained outstanding as of September 30, 2015. For each redemption, the redemption premium was treated as a dividend and recorded as a return of equity to White Deer Energy through a charge to the Company’s additional paid-in capital. The Company paid no dividends during the three and nine months ended September 30, 2015 and 2014. The Series B Preferred Stock is entitled to vote, until January 1, 2020, in the election of directors and on all other matters submitted to a vote of the holders of common stock as a single class. Each share of Series B Preferred Stock has one vote. The Series B Preferred Stock has no dividend rights and a liquidation preference of $0.001 per share. On and from time to time after January 1, 2020 the Company may redeem, in whole or in part, the then-outstanding shares of Series B Preferred Stock, at a redemption price per share equal to $0.001. Each share of Series B Preferred Stock was issued as part of a unit with a warrant to purchase one share of common stock and will be surrendered to the Company upon exercise of a warrant. The warrants entitle White Deer Energy to acquire 255,732 shares of common stock at an initial exercise price of $115.40 per share and surrendering an equal number of shares of Series B Preferred Stock to the Company. In December 2014, the Company issued 536,091 common shares below the initial warrant exercise price of $115.40 to extinguish $21,000,000 of its Convertible Notes. In February 2015, the Company completed a public offering of 1,357,955 shares of common stock at a price of $22.40 per share for total net proceeds of approximately $29.4 million. During April and May 2015, the Company issued an aggregate 2,460,045 shares of common stock through its at-the-market continuous offering program (“ATM program”) at an average price of $6.87 per share for total net proceeds of approximately $16.4 million. During September 2015, the Company issued an aggregate 848,961 shares of common stock through its ATM Program at an average price of $2.79 per share for total net proceeds of approximately $2.3 million. The sales were made pursuant to the terms of the equity distribution agreements dated April 2, 2015 between the Company and its sales agents. As a result of these issuances, the warrant exercise price was reduced from $16.45 to $9.52 per share pursuant to a formula provided in the original warrant agreement. See Note 9 – Convertible Notes for further discussion of the December 2014 conversion and Note 13 – Derivative Instruments and Price Risk Management – Warrant Liability for further discussion of the warrant liability valuation. Upon a change of control or Liquidation Event, as defined in the Securities Purchase Agreement, White Deer Energy had the right to elect to receive from the Company, in exchange for all, but not less than all, securities issued pursuant to the Securities Purchase Agreement an additional cash payment necessary to achieve a minimum internal rate of return of 25% as calculated as defined. The calculation took into account all cash inflows from and cash outflows to White Deer Energy. Upon the final Series A Preferred Stock redemption on October 15, 2013, the minimum internal rate of return was achieved and no additional cash payment would be required to be paid to White Deer Energy upon a change of control or liquidation event. The Company recorded the transaction by recognizing the fair value of the Series A Preferred Stock at $38,552,994 (net of offering costs of $2,816,006), Series B Preferred Stock at $5,000 and a warrant liability of $8,626,000 at time of issuance. The Company accreted the Series A Preferred Stock to the liquidation or redemption value when it became probable that the event or events underlying the liquidation or redemption were probable. The Company recognized all issuance discount accretion related to the redemptions of preferred stock by October 15, 2013. There was no issuance discount remaining as of September 30, 2015 or December 31, 2014. A summary of the preferred stock transaction components as of September 30, 2015, December 31, 2014 and the issuance date is provided below: September 30, December 31, February 19, 2013 Series A Preferred Stock $ — $ — $ 41,369,000 Series B Preferred Stock 256 256 256 Warrant Liability 187,000 2,199,000 8,626,000 Total $ 187,256 $ 2,199,256 $ 49,995,256 Equity Issuances On February 11, 2015, the Company completed a public offering of 1,357,955 shares of common stock at a price of $22.40 per share for total net proceeds of approximately $29.4 million. During April and May 2015, the Company issued shares of common stock through its ATM Program totaling 2,460,045 at an average price of $6.87 per share for total net proceeds of approximately $16.4 million. During September 2015, the Company issued shares of common stock through its ATM Program totaling 848,961 at an average price of $2.79 per share for total net proceeds of approximately $2.3 million. These sales were made pursuant to the terms of the equity distribution agreement dated April 2, 2015 between the Company and its sales agents. Restricted Stock Awards and Restricted Stock Unit Awards The Company incurred compensation expense associated with restricted stock and restricted stock units granted of $438,346 and $2,480,352 for the three months ended September 30, 2015 and 2014, respectively, and $2,444,623 and $8,686,625 for the nine months ended September 30, 2015 and 2014, respectively. As of September 30, 2015, there were 72,092 non-vested restricted stock units and $975,865 of associated remaining unrecognized compensation expense, which is expected to be recognized over the weighted-average period of 0.70 years. The Company capitalized compensation expense associated with the restricted stock and restricted stock units of $83,425 and $437,612 to oil and natural gas properties for the three months ended September 30, 2015 and 2014, respectively, and $601,605 and $1,425,364 for the nine months ended September 30, 2015 and 2014, respectively. A summary of the restricted stock units and restricted stock shares activity during the nine months ended September 30, 2015 is as follows: Number of Weighted Non-vested restricted stock and restricted stock units at January 1, 2015 29,231 $ 145.40 Granted 52,217 15.50 Canceled (3,961 ) 14.33 Vested and forfeited for taxes (1,358 ) 149.60 Vested and issued (4,037 ) 149.60 Non-vested restricted stock and restricted stock units at September 30, 2015 72,092 $ 57.78 |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 9 Months Ended |
Sep. 30, 2015 | |
Stock Options and Warrants [Abstract] | |
STOCK OPTIONS AND WARRANTS | NOTE 7 STOCK OPTIONS AND WARRANTS Stock Options The Company granted no stock options during the nine months ended September 30, 2015. The impact on the Company’s condensed consolidated statement of operations of stock-based compensation expense related to options granted for the three months ended September 30, 2015 and 2014 was $(15,200) and $337,809, respectively, net of forfeitures, cancellations and $0 tax. The impact on the Company’s condensed consolidated statement of operations of stock-based compensation expense related to options granted for the nine months ended September 30, 2015 and 2014 was $142,276 and $810,419, respectively, net of forfeitures, cancellations and $0 tax. The Company capitalized $(5,035), and $187,017 in compensation to oil and natural gas properties related to outstanding options for the three months ended September 30, 2015 and 2014, respectively, and $106,995 and $595,628 for the nine months ended September 30, 2015 and 2014, respectively. The Company had $183,140 of total unrecognized compensation cost related to nonvested stock options granted as of September 30, 2015. The remaining cost is expected to be recognized over a weighted-average period of 0.89 years. These estimates are subject to change based on a variety of future events that include, but are not limited to, changes in estimated forfeiture rates, cancellations and the issuance of new options. A summary of the stock options activity during the nine months ended September 30, 2015 is as follows: Number of Weighted Balance outstanding at January 1, 2015 59,746 $ 171.20 Granted — — Canceled (19,210 ) 218.39 Exercised — — Balance outstanding at September 30, 2015 40,536 $ 148.78 Options exercisable at September 30, 2015 30,759 $ 150.83 At September 30, 2015, stock options outstanding were as follows: Options Outstanding Options Exercisable Year of Grant Number of Weighted Weighted Number of Weighted Weighted 2015 — — — — — — 2014 15,781 3.18 $ 143.48 8,804 2.98 $ 145.17 2013 8,755 3.36 140.95 5,955 2.92 139.27 2012 14,731 1.82 156.80 14,731 1.82 156.80 Prior 1,269 2.97 174.96 1,269 2.97 174.96 Total 40,536 2.72 $ 148.78 30,759 2.41 $ 150.83 Warrants The table below reflects the status of warrants outstanding at September 30, 2015: Warrants Exercise Expiration Date December 1, 2009 1,861 $ 137.20 December 1, 2019 December 31, 2009 9,304 $ 137.20 December 31, 2019 February 8, 2011 44,643 $ 994.00 February 8, 2016 February 19, 2013 255,732 $ 9.52 December 31, 2019 Total 311,540 No warrants expired or were forfeited during the nine months ended September 30, 2015. All of the compensation expense related to the applicable vested warrants issued to employees has been expensed by the Company prior to 2012. All warrants outstanding were exercisable at September 30, 2015. See Note 13 – Derivative Instruments and Price Risk Management for details on the treatment of the warrants issued on February 19, 2013. |
REVOLVING CREDIT FACILITY
REVOLVING CREDIT FACILITY | 9 Months Ended |
Sep. 30, 2015 | |
Revolving Credit Facility [Abstract] | |
REVOLVING CREDIT FACILITY | NOTE 8 REVOLVING CREDIT FACILITY Wells Fargo Facility On November 20, 2012, the Company entered into a senior secured revolving credit facility (as amended, the “Credit Facility”) with Wells Fargo Bank, N.A., as administrative agent (“Wells Fargo”), and the lenders party thereto. The Credit Facility is a senior secured reserve-based revolving credit facility with a maximum commitment of $400 million. On April 30, 2015, in connection with the semi-annual borrowing base redetermination, the Company and its lending group entered into an amendment to the Credit Facility. The amendment to the Credit Facility reduced the borrowing base from $250 million to $200 million. As of September 30, 2015, the Company had drawn approximately $160 million toward its $200 million borrowing base under the Credit Facility. The Company’s borrowing base under its Credit Facility was subject to its semi-annual redetermination on October 6, 2015, and the lenders decreased the borrowing base to $120 million. This redetermination resulted in an outstanding deficiency under the Credit Facility of approximately $19.6 million. Under the terms of the Credit Agreement, the Company is permitted to repay the deficiency in three monthly installments beginning 30 days after the date of the redetermination. The Company does not expect to be able to make the monthly installments, which will result in a default under the Credit Agreement. The Credit Facility contains customary covenants that include, among other things: limitations on the ability of the Company to incur or guarantee additional indebtedness; create liens; pay dividends on or repurchase stock; make certain types of investments; enter into transactions with affiliates; and sell assets or merge with other companies. The Credit Facility also requires compliance with certain financial covenants, including, (a) a ratio of current assets to current liabilities of at least 1.00 to 1.00, (b) a maximum ratio of total debt to EBITDA for the preceding four fiscal quarters of no more than 5.0 to 1.0 for periods ending on March 31, 2015 through June 30, 2016 and 5.5 to 1.0 for periods ending September 30, 2016 through December 31, 2016 and (c) a Senior Secured Debt-to-EBITDA ratio for periods ending March 31, 2015 through December 31, 2016 of no more than 2.5 to 1.0. The Company was not in compliance with the total debt to EBITDA and Senior Secured Debt-to-EBITDA ratios under the Credit Facility as of September 30, 2015. On November 5, 2015, the Company and certain of its subsidiaries entered into a Forbearance Agreement with the lenders party to the Credit Agreement. Pursuant to the Forbearance Agreement, the Lenders and the Agent agreed to forbear from exercising their rights and remedies under the Credit Agreement until December 18, 2015 with respect to certain events of defaults under the Credit Agreement. Please see Note 3 – Liquidity and Capital Resources and Note 15 – Subsequent Events – Forbearance Agreement for further information regarding changes to financing arrangements and changes to the Credit Facility subsequent to September 30, 2015. Amounts borrowed under the Credit Facility will mature on September 30, 2018, and upon such date, any amounts outstanding under the Credit Facility are due and payable in full. Redeterminations of the borrowing base are made on a semi-annual basis, with an option to elect an additional redetermination every six months between the semi-annual redeterminations. The annual interest cost under the Credit Facility, which is dependent upon the percentage of the borrowing base utilized, is, at the Company’s option, based on either the Alternate Base Rate (as defined under the terms of the Credit Facility) plus 0.75% to 1.75% or the London Interbank Offer Rate (LIBOR) plus 1.75% to 2.75%; provided, in no event may the interest rate exceed the maximum interest rate allowed by any current or future law. Interest on ABR Loans is due and payable on a quarterly basis, and interest on Eurodollar Loans is due and payable, at the Company’s option, at one-, two-, three-, six- (or in some cases nine- or twelve-) month intervals. The Company also pays a commitment fee ranging from 0.375% to 0.5%, depending on the percentage of the borrowing base utilized. As of September 30, 2015, the annual interest rate on the Credit Facility was 2.70%. A portion of the Credit Facility not in excess of $5 million will be available for the issuance of letters of credit by Wells Fargo. The Company will pay a rate per annum ranging from 1.75% to 2.75% on the face amount of each letter of credit issued and will pay a fronting fee equal to the greater of $500 and 0.125% of the face amount of each letter of credit issued. As of September 30, 2015, the Company has not obtained any letters of credit under the Credit Facility. Each of the Company’s subsidiaries is a guarantor under the Credit Facility. The Credit Facility is secured by first priority, perfected liens and security interests on substantially all assets of the Company and the guarantors, including a pledge of their ownership in their respective subsidiaries. The Credit Facility allows the Company to hedge up to 60% of proved reserves for the first 24 months and 80% of projected production from proved developed producing reserves from 24 months up to 60 months later provided that in no event shall the aggregate amount of hedges exceed 100% of actual production in the current period. As of September 30, 2015, the Company had hedges covering 70% of its projected production through 2016. |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 9 Months Ended |
Sep. 30, 2015 | |
Convertible Notes [Abstract] | |
CONVERTIBLE NOTES | NOTE 9 CONVERTIBLE NOTES On March 24, 2014, the Company completed a private placement of $172.5 million in aggregate principal amount of Convertible Notes, and entered into an indenture (the “Indenture”) governing the Convertible Notes, with U.S. Bank National Association, as trustee (the “Trustee”). The Convertible Notes accrue interest at a rate of 2.00% per year, payable semiannually in arrears on April 1 and October 1 of each year, beginning on October 1, 2014. The Convertible Notes mature on April 1, 2019. As of September 30, 2015, the Convertible Notes are the Company’s unsecured senior obligations and are equal in right of payment to the Company’s existing and future senior indebtedness. The Convertible Notes had a total outstanding principal balance of $151.5 million and were convertible into approximately 863,248 shares of common stock. The net proceeds from the Convertible Notes were $166.9 million, after deducting commissions and offering expenses payable by the Company. The Company’s transaction costs in conjunction with the transaction will be amortized to interest expense over the five-year term of the Convertible Notes. The Convertible Notes and the common stock issuable upon conversion of the Convertible Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The Convertible Notes were offered and sold to the initial purchasers in a private placement exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2). The Convertible Notes were resold by the initial purchasers to qualified institutional buyers in reliance on Rule 144A under the Securities Act. Holders may convert their Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding the maturity date of the Convertible Notes. The conversion rate for the Convertible Notes is 5.698 shares of the Company’s common stock per $1,000 principal amount of Convertible Notes (which represents a conversion price of approximately $175.60 per share of the Company’s common stock), subject to certain anti-dilution adjustments as provided in the Indenture. A holder that surrenders its Convertible Notes for conversion in connection with a Make-Whole Fundamental Change (as defined in the Indenture) that occurs before the maturity date may in certain circumstances be entitled to an increased conversion rate. If the Company undergoes a Fundamental Change (as defined in the Indenture), subject to certain conditions, the holder of the Convertible Notes will have the option to require the Company to repurchase all or any portion of its Convertible Notes for cash. The fundamental change purchase price will be 100% of the principal amount of the Convertible Notes to be purchased, plus any accrued and unpaid interest, including additional interest, if any, to, but excluding, the fundamental change purchase date. The Company may not redeem the Convertible Notes prior to their maturity, and no sinking fund is provided for the Convertible Notes. The Company does not intend to file a shelf registration statement for resale of the Convertible Notes or the shares of its common stock issuable upon conversion of the Convertible Notes. The Company will, however, be required to pay additional interest in respect of the Convertible Notes under specified circumstances. As a result, holders may only resell the Convertible Notes or shares of the Company’s common stock issued upon conversion of the Convertible Notes, if any, pursuant to an exemption from the registration requirements of the Securities Act and other applicable securities laws. The Indenture contains customary terms and covenants and events of default, including the acceleration of the maturity of the Credit Facility, which would, in turn, cause a default under the Indenture and permit the holders of the Convertible Notes to accelerate their maturity. If an Event of Default (as defined in the Indenture) occurs and is continuing, the Trustee or the holders of at least 25% in aggregate principal amount of the then-outstanding Convertible Notes may declare by written notice all the Convertible Notes to be immediately due and payable in full. The Company was in compliance with all covenants under the Indenture as of September 30, 2015; however, the Company was not in compliance with all covenants under the Credit Facility, and the lenders thereunder could declare a default, which if remained uncured, would allow the lenders under the Credit Facility to accelerate the maturity of the amounts outstanding under the Credit Facility. As of September 30, 2015, the Company had drawn approximately $160 million toward its $200 million borrowing base under the Credit Facility. The Company’s borrowing base under its Credit Facility was subject to its semi-annual redetermination on October 6, 2015, and the lenders decreased the borrowing base to $120 million. This redetermination resulted in an outstanding deficiency under the Credit Facility of approximately $19.6 million. Under the terms of the Credit Agreement, the Company is permitted to repay the deficiency in three monthly installments beginning 30 days after the date of the redetermination. The Company does not expect to be able to make the monthly installments, which will result in a default under the Credit Agreement. In accordance with the provisions under ASC 470-10-45-1, the Company has classified the balance of the Convertible Notes as a current liability as of September 30, 2015. On November 5, 2015, the Company and certain of its subsidiaries entered into a Forbearance Agreement with the lenders party to the Credit Agreement. Pursuant to the Forbearance Agreement, the Lenders agreed to forbear from exercising their rights and remedies under the Credit Agreement until December 18, 2015 with respect to certain events of defaults under the Credit Agreement. For additional information regarding the Forbearance Agreement, see Note 15 Subsequent Events— Forbearance Agreement. In December 2014, the Company issued 536,091 shares of common stock to extinguish $21,000,000 principal value of Convertible Notes. The Convertible Notes had 119,658 underlying shares of common stock under the terms of the Indenture. As a result, the Company recognized $10,438,080 of debt conversion expense for the year ended December 31, 2014 for the fair value of the shares of common stock issued in excess of the shares of common stock underlying the exchanged Convertible Notes. For details on the additional note conversion subsequent to September 30, 2015, see Note 15 – Subsequent Events – Debt Conversion. |
ASSET RETIREMENT OBLIGATION
ASSET RETIREMENT OBLIGATION | 9 Months Ended |
Sep. 30, 2015 | |
Asset Retirement Obligation [Abstract] | |
ASSET RETIREMENT OBLIGATION | NOTE 10 ASSET RETIREMENT OBLIGATION The Company has asset retirement obligations associated with the future plugging and abandonment of its proved oil and natural gas properties and related facilities. Under the provisions of ASC 410-20-25, the fair value of a liability for an asset retirement obligation is recorded in the period in which it is incurred and can be reasonably estimated, and a corresponding increase in the carrying amount of the related long-lived asset. The liability is accreted to its present value each period, and the capitalized cost is depleted using the units of production method. If the liability is settled for an amount other than the recorded amount, a gain or loss is recognized. The fair value of additions to the asset retirement obligations is estimated using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation include estimates of: (i) plugging and abandonment costs per well based on existing regulatory requirements; (ii) remaining life per well; (iii) future inflation factors (average of 2.5% for each of the periods presented); and (iv) a credit-adjusted risk-free interest rate (average of 7.0% for each of the periods presented). These inputs require significant judgments and estimates by the Company’s management at the time of the valuation and are the most sensitive and subject to change. The Company has no assets that are legally restricted for purposes of settling asset retirement obligations. The following table summarizes the Company’s asset retirement obligation transactions recorded in accordance with the provisions of ASC 410-20-25 for the nine months ended September 30, 2015 and the year ended December 31, 2014: Nine Months Year Ended Beginning Asset Retirement Obligation $ 2,671,975 $ 692,137 Revision of Previous Estimates — 148,968 Liabilities Incurred or Acquired 440,536 1,817,939 Accretion of Discount on Asset Retirement Obligations 153,007 104,803 Wells Settled Through P&A — (72,555 ) Liabilities Associated with Properties Sold — (19,317 ) Ending Asset Retirement Obligation $ 3,265,518 $ 2,671,975 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes [Abstract] | |
INCOME TAXES | NOTE 11 INCOME TAXES Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely than not” that some component or all of the benefits of deferred tax assets will not be realized. As of September 30, 2015 and December 31, 2014, the Company maintained a full valuation allowance for all deferred tax assets. Based on these requirements no provision or benefit for income taxes has been recorded for deferred taxes. There were no recorded unrecognized tax benefits at the end of the reporting period. |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value [Abstract] | |
FAIR VALUE | NOTE 12 FAIR VALUE ASC 820-10-55 defines fair value, establishes a framework for measuring fair value under GAAP and enhances disclosures about fair value measurements. Fair value is defined under ASC 820-10-55 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: Level 1 – Unadjusted quoted prices in active markets that are accessible at measurement date for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and less observable from objective sources. The level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level 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 the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The Company’s policy is to recognize transfer in and/or out of the fair value hierarchy as of the end of the reporting period for which the event or change in circumstances caused the transfer. The Company has consistently applied the valuation techniques discussed below for the periods presented. These valuation policies are determined by the Company’s Vice President of Accounting and approved by the Chief Financial Officer. The valuation policies are discussed with the Company’s Audit Committee as deemed appropriate. Each quarter, the Vice President of Accounting and Chief Financial Officer update the inputs used in the fair value measurement and internally review the changes from period to period for reasonableness. The Company uses data from peers as well as external sources in the determination of the volatility and risk-free rates used in the Company’s fair value calculations. A sensitivity analysis is performed as well to determine the impact of inputs on the ending fair value estimate. Fair Value on a Recurring Basis The following schedule summarizes the valuation of financial instruments measured at fair value on a recurring basis in the condensed consolidated balance sheet as of September 30, 2015: Fair Value Measurements at Quoted Prices In Significant Other Significant Warrant Liability – Long Term Liability $ — $ — $ (187,000 ) Commodity Derivatives – Current Asset (oil puts) — 14,310,070 — Commodity Derivatives – Non Current Asset (oil puts) — 3,442,664 — Commodity Derivatives – Current Liability (oil put premiums) — (7,974,013 ) — Commodity Derivatives – Long Term Liability (oil put premiums) — (2,067,594 ) — Total $ — $ 7,711,127 $ (187,000 ) The following schedule summarizes the valuation of financial instruments measured at fair value on a recurring basis in the condensed consolidated balance sheet as of December 31, 2014: Fair Value Measurements at Quoted Prices In Significant Other Significant Warrant Liability – Long Term Asset (Liability) $ — $ — $ (2,199,000 ) Commodity Derivatives – Current Asset (oil swaps) — 5,044,125 — Total $ — $ 5,044,125 $ (2,199,000 ) Level 2 assets consist of commodity derivative assets and liabilities (see Note 13 – Derivative Instruments and Price Risk Management). The fair value of the commodity derivative assets and liabilities are estimated by the Company using the income valuation techniques utilizing an option pricing or discounted cash flow model, as appropriate, that takes into account notional quantities, market volatility, market prices, contract parameters and discount rates based on published LIBOR rates. The Company validates the data provided by third parties by understanding the pricing models used, obtaining market values from other pricing sources, analyzing pricing data in certain situations and confirming that those securities trade in active markets. Assumed credit risk adjustments, based on published credit ratings, public bond yield spreads and credit default swap spreads, are applied to the Company’s commodity derivatives. Significant changes in the quoted forward prices for commodities and A rollforward of warrant liability measured at fair value using Level 3 inputs on a recurring basis is as follows: Balance, at January 1, 2014 $ (15,703,000 ) Change in Fair Value of Warrant Liability 13,504,000 Balance, at December 31, 2014 (2,199,000 ) Change in Fair Value of Warrant Liability 2,012,000 Balance, at September 30, 2015 $ (187,000 ) The fair value of the warrants upon issuance to White Deer Energy on February 19, 2013 was recorded at $8,626,000. The warrant revaluation gain was $221,000 and $216,000 for the three months ended September 30, 2015 and 2014, respectively, and $2,012,000 and $(1,751,000) for the nine months ended September 30, 2015 and 2014, respectively. The warrant revaluation gain (expense) is included in Other Income/Expense on the accompanying Condensed Consolidated Statements of Operations. See discussion of assumptions used in valuing the warrants at Note 13 – Derivative Instruments and Price Risk Management. Nonrecurring Fair Value Measurements The Company follows the provisions of ASC 820-10 for nonfinancial assets and liabilities measured at fair value on a nonrecurring basis. As it relates to the Company, ASC 820-10 applies to certain nonfinancial assets and liabilities as may be acquired in a business combination and thereby measured at fair value and the initial recognition of asset retirement obligations for which fair value is used. The asset retirement obligation estimates are derived from historical costs as well as management’s expectation of future cost environments. As there is no corroborating market activity to support the assumptions used, the Company has designated these liabilities as Level 3. A reconciliation of the beginning and ending balances of the Company’s asset retirement obligation is presented in Note 10 – Asset Retirement Obligation. The Company’s non-derivative financial instruments include cash and cash equivalents, restricted cash, accounts receivable, accounts payable, the Convertible Notes and the Credit Facility. The carrying amount of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of their immediate or short-term maturities. The book value of the Credit Facility approximates fair value because of its floating rate structure. The Company estimated the fair value of the Convertible Notes to be approximately $39.4 million at September 30, 2015 based on observed prices for the same or similar types of debt instruments. The Company has classified the valuations of the Convertible Notes and Credit Facility under Level 2 of the fair value hierarchy. |
DERIVATIVE INSTRUMENTS AND PRIC
DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Price Risk Management [Abstract] | |
DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT | NOTE 13 DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT Commodity Price Risk The Company utilizes oil swap contracts to (i) reduce the effects of volatility in price changes on the oil commodities it produces and sells, (ii) reduce commodity price risk and (iii) provide a base level of cash flow in order to assure it can execute at least a portion of its capital spending. All derivative positions are carried at their fair value on the condensed consolidated balance sheet and are marked-to-market at the end of each period. The Company has a master netting agreement on each of the individual oil contracts. Therefore, both the current asset and liability and the non-current asset and liability are netted on the condensed consolidated balance sheet. On January 5, 2015, the Company settled its outstanding NYMEX West Texas Intermediate oil derivative swap contracts on a total of 120,000 barrels of oil, resulting in the receipt of $5,317,300 in cash. On April 7, 2015, the Company entered into put option contracts for oil volumes produced in May 2015 through December 2016, whereby premiums are paid monthly throughout the life of the contracts. Open contracts as of September 30, 2015 are provided in the table below. Settlement Period Daily Put Option Total Premium Total October 2015 – December 2015 4,000 $ 55.00 368,000 $ 4.88 $ 1,795,840 January 2016 – December 2016 3,000 $ 60.00 1,098,000 $ 7.54 $ 8,278,920 The following table sets forth a reconciliation of the changes in fair value of the Company’s commodity derivatives for the three and nine months ended September 30, 2015 and 2014. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Beginning fair value of commodity derivatives $ (3,633,216 ) $ (5,852,801 ) $ 5,044,125 $ (853,005 ) Total gains on commodity derivatives 12,699,147 11,184,716 8,148,386 3,722,780 Cash settlements (received) paid on commodity derivatives (1,354,804 ) 313,451 (5,481,384 ) 2,775,591 Ending fair value of commodity derivatives $ 7,711,127 $ 5,645,366 $ 7,711,127 $ 5,645,366 The use of derivative transactions involves the risk that the counterparties will be unable to meet the financial terms of such transactions. The Company has netting arrangements with its counterparties that provide for offsetting payables against receivables from separate derivative instruments. Warrant Liability The warrants issued to White Deer Energy are classified as liabilities on the consolidated balance sheets because the warrants contain a contingent put and other liability type provisions (see Note 6 – Preferred and Common Stock). The shares of common stock underlying the warrants are contingently redeemable and are subject to remeasurement at each balance sheet date, and any changes in fair value will be recognized as a component of other (expense) income on the accompanying condensed consolidated statements of operations. The Company estimated the value of the warrants issued on the date of issuance to be $8,626,000, or $33.80 per warrant, using the Monte Carlo model with the following assumptions: a term of 1,798 trading days, exercise price of $115.40, volatility rate of 40%, and a risk-free interest rate of 1.38%. The Company remeasured the warrants as of September 30, 2015, using a Black-Scholes model with the following assumptions: a term of 1,067 trading days, exercise price of $9.52, a 15-day volume weighted average stock price of $2.34, volatility rate of 80%, and a risk-free interest rate of 1.65%. As of September 30, 2015, the fair value of the warrants was $187,000, and was recorded as a liability on the accompanying condensed consolidated balance sheet. An increase in any of the variables would cause an increase in the fair value of the warrants. Likewise, a decrease in any variable would cause a decrease in the value of the warrants. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 COMMITMENTS AND CONTINGENCIES Executive Compensation In January 2015, the Company determined that fifty percent of the earned cash bonuses for 2014 for the Chief Executive Officer and Vice Chairman of the Board of Directors would be paid in the form of equity and that such 50 percent (payable in the form of equity) would be paid by early 2016. Additionally, the Company determined that fifty percent of the annual equity bonus would be granted in early 2016. After discussions with the Compensation Committee relating to the foregoing payments, each of the officers agreed in principle not to allege a violation of their respective employment agreements if the bonuses were paid in accordance with the foregoing. Oil, Natural Gas and Produced Water Transportation and Processing Commitments. The Company has commitments for the transportation and processing of its production on certain wells within its operating area in the Williston Basin of North Dakota, including an aggregate minimum commitment to deliver on a gross basis 16.4 MMBbls of oil at a fee of $1.21/Bbl, 10.9 Bcf of natural gas at a fee of $1.67/Mcf and 28.2 MMBbls of produced water at a fee of $0.82/Bbl through April 2020. The Company is required to make monthly deficiency payments for any shortfalls in delivering the minimum volumes under these commitments. Currently, the Company has insufficient production to meet these contractual commitments. However, as the Company develops additional reserves, it anticipates exceeding its current minimum volume commitments and, therefore, intends to enter into additional transportation and processing commitments in the future. The commitment price can be adjusted in future years. These future transportation and processing commitments may expose the Company to additional volume deficiency payments. For the three months ended September 30, 2015, the Company incurred deficiency fees of $1.0 million and expects to continue to accrue deficiency fees under its commitments as long as the Company’s development program is suspended. The deficiency fees are included as production expenses in the statement of operations for the three and nine months ended September 30, 2015. Transportation costs aside from the deficiency fee are included in the realized price of oil and natural gas revenues in the statement of operations for the three and nine months ended September 30, 2015. Estimated future deficiency fees are included in the calculation of the present value of estimated future net revenues from proved oil and natural gas reserves, which impacts the ceiling test impairment calculation. Other The Company is involved in various matters incidental to its operations and business that might give rise to a loss contingency. These matters may include legal and regulatory proceedings, commercial disputes, claims from royalty, working interest and surface owners, property damage and personal injury claims and environmental authorities or other matters. In addition, the Company may be subject to customary audits by governmental authorities regarding the payment and reporting of various taxes, governmental royalties and fees as well as compliance with unclaimed property (escheatment) requirements and other laws. Further, other parties with an interest in wells operated by the Company have the ability under various contractual agreements to perform audits of its joint interest billing practices. The Company vigorously defends itself in these matters. If the Company determines that an unfavorable outcome or loss of a particular matter is probable and the amount of the loss can be reasonably estimated, it accrues a liability for the contingent obligation. As new information becomes available or as a result of legal or administrative rulings in similar matters or a change in applicable law, the Company’s conclusions regarding the probability of outcomes and the amount of estimated loss, if any, may change. The impact of subsequent changes to the Company’s accruals could have a material effect on its results of operations. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 SUBSEQUENT EVENTS Joint Venture Agreement On October 1, 2015, the Company closed the purchase and sale agreement with Koch Exploration. Subject to customary closing conditions, Koch Exploration acquired a 30% working interest in approximately 25,000 undeveloped net acres held by the Company in McKenzie County, North Dakota and approximately 4,400 undeveloped net acres held by the Company in Richland County, Montana for approximately $17.4 million. Koch Exploration reimbursed the Company approximately $5.4 million for its proportionate share of recently drilled and uncompleted wells in southern McKenzie County, North Dakota. Total proceeds to the Company upon closing the transaction were approximately $22.8 million and all proceeds were used to repay outstanding borrowings on the Credit Facility, reducing the outstanding balance from $160 million to $139.6 million subsequent to September 30, 2015. Borrowing Base Redetermination On October 6, 2015 the Company’s borrowing base under the Credit Facility was decreased from $200 million to $120 million as part of the Company’s regularly scheduled semi-annual redetermination by its lenders. The decrease in the borrowing base resulted in the outstanding balance of the Credit Facility to exceed the revised borrowing base by approximately $19.6 million as of November 6, 2015 (See Note 8 – Revolving Credit Facility). Forbearance Agreement On November 5, 2015, the Company, along with certain of its subsidiaries (the “Guarantors”), entered into a forbearance agreement (the “Forbearance Agreement”) with the lenders (the “Lenders”) party to the Credit Agreement, and Wells Fargo Bank, N.A., as agent for the Lenders (the “Agent”). Pursuant to the Forbearance Agreement, the Lenders and the Agent agreed to forbear from exercising their rights and remedies under the Credit Agreement until December 18, 2015 (the “Forbearance Period”) with respect to certain events of defaults under the Credit Agreement (the “Specified Defaults”). The Forbearance Period will terminate immediately upon the occurrence of any of the following: (i) a default under the Credit Agreement other than the Specified Defaults; (ii) any misrepresentation by the Company or any of the Guarantors under the Forbearance Agreement; (iii) the failure of the Company or any of the Guarantors to perform, observe or comply with the terms of the Forbearance Agreement; (iv) the commencement of any bankruptcy, insolvency or similar proceeding against the Company or any of the Guarantors or the appointment of a trustee or similar official for the Company or any of the Guarantors or a substantial part of its property; (v) any default in excess of $5,000,000 under certain specified material contracts; or (vi) any event during the Forbearance Period which has a Material Adverse Effect (as defined in the Credit Agreement). In exchange for the Lenders and the Agent agreeing to forbear their rights and remedies under the Credit Agreement, the Company has agreed during the Forbearance Period to, among other things: (i) make monthly interest payments at the Alternate Base Rate (as defined in the Credit Agreement) plus 1.75%; (ii) pay the Lenders a fee equal to 0.50% of the outstanding principal balance of the loans under the Credit Agreement; (iii) use 100% of the Net Cash Proceeds (as defined in the Credit Agreement) received by the Company or any Guarantor to make mandatory prepayments of the loans under the Credit Agreement in certain circumstances; (iv) periodically deliver to the Agent and the Lenders certain financial and budget information; (v) cause unrestricted cash and cash equivalents to not be less than $1,000,000 at the end of each week; and (vi) limit capital expenditures to $300,000. The foregoing description of the Forbearance Agreement is a summary only and is qualified in its entirety by reference to the Forbearance Agreement, a copy of which is attached as Exhibit 10.3 to this Quarterly Report on Form 10-Q and incorporated herein by reference. Debt Conversion On October 22, 2015, the Company entered into an agreement with a holder of the Convertible Notes pursuant to which the Company and the noteholder agreed to exchange approximately $3 million principal value of Convertible Notes for a number of shares of common stock to be issued based upon a formula that utilizes a 15% discount to the volume weighted average price of the Company’s common stock over a period of 15 consecutive trading days starting October 23, 2015 and ending on approximately November 12, 2015, which is expected to be approximately 880,000 shares of common stock based on an average estimated price of approximately $1.70 per common share. As a result, the Company expects to recognize approximately $1.5 million of debt conversion expense for the fair value of the shares of common stock issued in excess of the shares of common stock underlying the original convertible note indenture agreement. Following the completion of the exchange, approximately $148.5 million aggregate principal amount of the Convertible Notes will remain outstanding. |
BASIS OF PRESENTATION AND SIG21
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | |
Cash and Cash Equivalents, Policy | Cash and Cash Equivalents The Company considers highly liquid investments with insignificant interest rate risk and original maturities of three months or less to be cash equivalents. Cash equivalents consist primarily of interest-bearing bank accounts and money market funds. The Company’s cash positions represent assets held in checking and money market accounts. These assets are generally available to the Company on a daily or weekly basis and are highly liquid in nature. Due to the balances being greater than their $250,000 insurance coverage, the Company does not have FDIC coverage on the entire amount of its bank deposits. The Company believes this risk to be minimal. In addition, the Company is subject to Security Investor Protection Corporation protection on a vast majority of its financial assets in the event one of the brokerage firms that the Company utilizes for its investments fails. |
Restricted Cash | Restricted Cash Restricted cash included in current and long-term assets on the condensed consolidated balance sheets totaled $0 and $4 million at September 30, 2015 and December 31, 2014, respectively. At December 31, 2014, the balance related to a drilling commitment agreement entered into pursuant to oil and natural gas leases. The commitment was fulfilled and funds released during the three months ended September 30, 2015. |
Accounts Receivable | Accounts Receivable The Company records estimated oil and natural gas revenue receivable from third parties at its net revenue interest. The Company also reflects costs incurred on behalf of joint interest partners in accounts receivable. Management periodically reviews accounts receivable amounts for collectability and records its allowance for uncollectible receivables under the specific identification method. The Company did not record any allowance for uncollectible receivables during the three and nine months ended September 30, 2015 and 2014. |
Full Cost Method, Policy | Full Cost Method The Company follows the full cost method of accounting for oil and natural gas operations whereby all costs related to the exploration and development of oil and natural gas properties are initially capitalized into a single cost center (“full cost pool”). Such costs include land acquisition costs, a portion of employee salaries related to property development, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling directly related to acquisitions, and exploration activities. For the three months ended September 30, 2015 and 2014, the Company capitalized $814,011 and $1,354,556, respectively, of internal salaries, which included $78,390 and $624,629, respectively, of stock-based compensation. For the nine months ended September 30, 2015 and 2014, the Company capitalized $3,245,667 and $4,278,105, respectively, of internal salaries, which included $708,600, and $2,020,992, respectively, of stock-based compensation. Internal salaries are capitalized based on employee time allocated to the acquisition of leaseholds and development of oil and natural gas properties. The Company capitalized no interest in the three and nine months ended September 30, 2015 and 2014. Proceeds from property sales will generally be credited to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to these costs. No gain or loss was recognized on any sales during the three and nine months ended September 30, 2015 and 2014. The Company engages in acreage trades in the Williston Basin, but these trades are generally for acreage that is similar both in terms of geographic location and potential resource value. The Company assesses all items classified as unproved property on a quarterly basis for possible impairment or reduction in value. 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 an 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 amortization. For the nine months ended September 30, 2015 and the year ended December 31, 2014, the Company included $15,231,547 and $2,979,258, respectively, related to expiring leases within costs subject to the depletion calculation. Capitalized costs associated with impaired properties and properties having proved reserves, estimated future development costs, and asset retirement costs under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 410-20-25 are depleted and amortized on the unit-of-production method based on the estimated gross proved reserves. The costs of unproved properties are withheld from the depletion base until such time as they are developed, impaired or abandoned. Under the full cost method of accounting, capitalized oil and natural gas property costs less accumulated depletion, net of deferred income taxes, may not exceed a ceiling amount equal to the present value, discounted at 10%, of estimated future net revenues from proved oil and natural gas reserves plus the cost of unproved properties not subject to amortization (without regard to estimates of fair value), or estimated fair value, if lower, of unproved properties that are subject to amortization. Should capitalized costs exceed this ceiling, which is tested on a quarterly basis, an impairment is recognized. The present value of estimated future net revenues is computed by applying prices based on a 12-month unweighted average of the oil and natural gas prices in effect on the first day of each month, less estimated future expenditures to be incurred in developing and producing the proved reserves (assuming the continuation of existing economic conditions), less any applicable future taxes. Any required write-downs are included in the consolidated statement of operations as an impairment charge. Based on calculated reserves at September 30, 2015, the unamortized costs of the Company’s oil and natural gas properties exceeded the ceiling test limit by $158,278,000. As a result, the Company was required to record impairments of the net capitalized costs of its oil and natural gas properties in the amount of $158,278,000 and $304,903,000 for the three and nine months ended September 30, 2015, respectively. As of September 30, 2014, the unamortized costs of the Company’s oil and natural gas properties did not exceed the ceiling test limit and no impairment expense was recognized for the three and nine months ended September 30, 2014. |
Other Property and Equipment, Policy | Other Property and Equipment Property and equipment that are not oil and natural gas properties are recorded at cost and depreciated using the straight-line method over their estimated useful lives of three to seven years. Expenditures for replacements, renewals, and betterments are capitalized. Maintenance and repairs are charged to expense as incurred. ASC 360-10-35-21 requires that long-lived assets, other than oil and natural gas properties, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The determination of impairment is based upon expectations of undiscounted future cash flows, before interest, of the related asset. If the carrying value of the asset exceeds the undiscounted future cash flows, the impairment would be computed as the difference between the carrying value of the asset and the fair value. The Company has not recognized any impairment losses on non-oil and natural gas long-lived assets. |
Asset Retirement Obligations, Policy | Asset Retirement Obligations The Company records the fair value of a liability for an asset retirement obligation in the period in which it can be reasonably estimated or the asset is acquired and a corresponding increase in the carrying amount of the related long-lived asset. The liability is accreted to its present value each period, and the capitalized cost is depleted using the units of production method. If the liability is settled for an amount other than the recorded amount, a gain or loss is recognized. |
Revenue Recognition and Natural Gas Balancing, Policy | Revenue Recognition and Natural Gas Balancing The Company recognizes oil and natural gas revenues from its interests in producing wells when production is delivered and title has transferred to the purchaser, to the extent the selling price is reasonably determinable. The Company uses the sales method of accounting for balancing of natural gas production and would recognize a liability if the existing proved reserves were not adequate to cover the current imbalance situation. As of September 30, 2015 and December 31, 2014, the Company’s natural gas production was in balance, i.e., its cumulative portion of natural gas production taken and sold from wells in which it has an interest equaled the Company’s entitled interest in natural gas production from those wells. |
Stock-Based Compensation, Policy | Stock-Based Compensation The Company accounts for stock-based compensation under the provisions of ASC 718-10-55. The Company recognizes stock-based compensation expense in the financial statements over the vesting period of equity-classified employee stock-based compensation awards based on the grant date fair value of the awards, net of estimated forfeitures. For options and warrants, the Company uses the Black-Scholes option valuation model to calculate the fair value of stock based compensation awards at the date of grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. For the stock options and warrants granted, the Company has used a variety of comparable and peer companies to determine the expected volatility input based on the expected term of the options. The Company believes the use of peer company data fairly represents the expected volatility it would experience if it were in the oil and natural gas industry over the expected term of the options. The Company used the simplified method to determine the expected term of the options due to the lack of historical data. Changes in these assumptions can materially affect the fair value estimate. On May 27, 2011, the stockholders of the Company approved the 2011 Equity Incentive Plan (the “2011 Plan”), under which 35,714 shares of common stock were reserved. On October 22, 2012, the stockholders of the Company approved an amendment to the 2011 Plan to increase the number of shares available for issuance under the 2011 Plan to 175,000 shares. On July 10, 2013, the stockholders of the Company approved an amendment to the 2011 Plan to increase the number of shares authorized for issuance under the 2011 Plan to 490,000 shares. On May 20, 2015, the stockholders of the Company approved an amendment to the 2011 Plan to increase the number of shares authorized for issuance under the 2011 Plan to 990,000 shares. The purpose of the 2011 Plan is to promote the success of the Company and its affiliates by facilitating the employment and retention of competent personnel and by furnishing incentives to those officers, directors and employees upon whose efforts the success of the Company and its affiliates will depend to a large degree. It is the intention of the Company to carry out the 2011 Plan through the granting of incentive stock options, nonqualified stock options, restricted stock awards, restricted stock unit awards, performance awards and stock appreciation rights. As of September 30, 2015, 42,491 stock options and 380,396 shares of common stock and restricted stock units had been issued to officers, directors and employees under the 2011 Plan net of cancelations and forfeitures, including 72,092 nonvested restricted stock units. As of September 30, 2015, there were 567,113 shares available for issuance under the 2011 Plan. |
Income Taxes, Policy | Income Taxes The Company accounts for income taxes under ASC 740-10-30 . The tax effects from an uncertain tax position can be recognized in the financial statements only if the position is more likely than not of being sustained if the position were to be challenged by a taxing authority. The Company has examined the tax positions taken in its tax returns and determined that there are no uncertain tax positions. As a result, the Company has recorded no uncertain tax liabilities in its condensed consolidated balance sheet. |
Net Income (Loss) Per Common Share, Policy | Net Income (Loss) Per Common Share Basic net income (loss) per common share is based on the net income (loss) divided by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share are computed using the weighted average number of shares of common stock plus dilutive common share equivalents outstanding during the period using the treasury stock method. In the computation of diluted earnings per share, excess tax benefits that would be created upon the assumed vesting of nonvested restricted shares or the assumed exercise of stock options (i.e., hypothetical excess tax benefits) are included in the assumed proceeds component of the treasury stock method to the extent that such excess tax benefits are more likely than not to be realized. When a loss from continuing operations exists, all potentially dilutive securities are anti-dilutive and are therefore excluded from the computation of diluted earnings per share. As the Company had losses for the three and nine months ended September 30, 2015 and 2014, the potentially dilutive shares were anti-dilutive and were thus not included in the net loss per share calculation. As of September 30, 2015, (i) 72,092 nonvested restricted stock units were issued and outstanding and represent potentially dilutive shares; (ii) 30,759 stock options were issued and presently exercisable and represent potentially dilutive shares; (iii) 9,777 stock options were granted but were not presently exercisable and represent potentially dilutive shares; (iv) 255,732 warrants were issued and presently exercisable, which have an exercise price of $9.52 and represent potentially dilutive shares; (v) 11,165 warrants were issued and presently exercisable, which have an exercise price of $137.20 and represent potentially dilutive shares; (vi) 44,643 warrants were issued and presently exercisable, which have an exercise price of $994.00 and represent potentially dilutive shares; and (vii) $151.5 million of Convertible Notes were convertible into approximately 863,248 shares of common stock as of September 30, 2015 and represent potentially dilutive shares. |
Derivative and Other Financial Instruments, Policy | Derivative and Other Financial Instruments Commodity Derivative Instruments The Company has entered into commodity derivative instruments, utilizing oil derivative swap contracts to reduce the effect of price changes on a portion of future oil production. The Company’s commodity derivative instruments are measured at fair value and are included in the consolidated balance sheet as derivative assets and liabilities. Net gains and losses are recorded based on the changes in the fair values of the derivative instruments. The Company’s valuation estimate takes into consideration the counterparties’ creditworthiness, the Company’s creditworthiness, and the time value of money. The consideration of the factors results in an estimated exit price for each derivative asset or liability under a marketplace participant’s view. Management believes that this approach provides a reasonable, non-biased, verifiable, and consistent methodology for valuing commodity derivative instruments (see Note 13 – Derivative Instruments and Price Risk Management). Warrant Liability From time to time, the Company may have financial instruments such as warrants that may be classified as liabilities when either (a) the holders possess rights to net cash settlement, (b) physical or net equity settlement is not in the Company’s control, or (c) the instruments contain other provisions that cause the Company to conclude that they are not indexed to the Company’s equity. Such instruments are initially recorded at fair value and subsequently adjusted to fair value at the end of each reporting period through earnings. As a part of a securities purchase agreement entered into in February 2013 with affiliates of White Deer Energy L.P. (see Note 6 – Preferred and Common Stock), the Company issued warrants that contain a put and other liability type provisions. Accordingly, these warrants are accounted for as a liability. This warrant liability is accounted for at fair value with changes in fair value reported in the consolidated statement of operations. |
New Accounting Pronouncements, Policy | New Accounting Pronouncements From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s consolidated financial statements upon adoption. |
Use of Estimates, Policy | Use of Estimates The preparation of consolidated financial statements under GAAP in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to proved oil and natural gas reserve volumes, future development costs, estimates relating to certain oil and natural gas revenues and expenses, fair value of derivative instruments, valuation of share-based compensation, valuation of asset retirement obligations and the valuation of deferred income taxes. Actual results may differ from those estimates. |
Industry Segment and Geographic Information, Policy | Industry Segment and Geographic Information The Company operates in one industry segment, which is the exploration, development and production of oil and natural gas, with all of the Company’s operational activities having been conducted in the U.S. The Company’s current operational activities and the Company’s consolidated revenues are generated from markets exclusively in the U.S., and the Company has no long-lived assets located outside the U.S. |
Reclassifications, Policy | Reclassifications Certain reclassifications have been made to amounts reported in prior periods in order to conform to the current period presentation. These reclassifications did not impact the Company’s net loss, stockholders’ equity or cash flows. |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Oil and Natural Gas Properties [Abstract] | |
Schedule of Purchase Price of Acquisition, Assets Acquired and Liabilities Assumed | The following table summarizes the purchase price and estimated values of assets acquired and liabilities assumed for the September 2014 acquisition (in thousands): Purchase Price Consideration Given: Cash $ 71,187 Assignment of oil and natural gas properties 35,918 Liabilities assumed, net 1,121 Total $ 108,226 Allocation of Purchase Price: Proved oil and natural gas properties $ 48,997 Unproved oil and natural gas properties 59,083 Liabilities released 146 Total fair value of oil and natural gas properties $ 108,226 |
Schedule of Pro Forma Operating Results | Pro Forma Operating Results In accordance with ASC Topic 805, presented below are unaudited pro forma results for the three and nine months ended September 30, 2014 to show the effect on our consolidated results of operations as if the September 2014 acquisition had occurred on January 1, 2013. The pro forma results reflect the results of combining our statement of operations with the results of operations from the oil and natural gas properties acquired in September 2014, adjusted for (i) the assumption of asset retirement obligations and accretion expense for the properties acquired and (ii) depletion expense applied to the adjusted basis of the properties acquired. The pro forma information is based upon these assumptions and is not necessarily indicative of future results of operations: Three Months Nine Months Revenues $ 43,160,959 $ 95,151,146 Net Income $ 14,860,956 $ 14,723,060 Net Income Per Share – Basic $ 4.47 $ 4.44 Net Income Per Share – Diluted $ 3.36 $ 3.60 Weighted Average Shares Outstanding – Basic $ 3,324,970 $ 3,316,470 Weighted Average Shares Outstanding – Diluted $ 4,419,020 $ 4,093,377 |
PREFERRED AND COMMON STOCK (Tab
PREFERRED AND COMMON STOCK (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Preferred and Common Stock [Abstract] | |
Schedule of Components of Preferred Stock Transaction | A summary of the preferred stock transaction components as of September 30, 2015, December 31, 2014 and the issuance date is provided below: September 30, December 31, February 19, 2013 Series A Preferred Stock $ — $ — $ 41,369,000 Series B Preferred Stock 256 256 256 Warrant Liability 187,000 2,199,000 8,626,000 Total $ 187,256 $ 2,199,256 $ 49,995,256 |
Schedule of Restricted Stock Units and Restricted Stock Shares Outstanding | A summary of the restricted stock units and restricted stock shares activity during the nine months ended September 30, 2015 is as follows: Number of Weighted Non-vested restricted stock and restricted stock units at January 1, 2015 29,231 $ 145.40 Granted 52,217 15.50 Canceled (3,961 ) 14.33 Vested and forfeited for taxes (1,358 ) 149.60 Vested and issued (4,037 ) 149.60 Non-vested restricted stock and restricted stock units at September 30, 2015 72,092 $ 57.78 |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stock Options and Warrants [Abstract] | |
Schedule of Stock Options Outstanding Roll Forward | A summary of the stock options activity during the nine months ended September 30, 2015 is as follows: Number of Weighted Balance outstanding at January 1, 2015 59,746 $ 171.20 Granted — — Canceled (19,210 ) 218.39 Exercised — — Balance outstanding at September 30, 2015 40,536 $ 148.78 Options exercisable at September 30, 2015 30,759 $ 150.83 |
Schedule of Stock Options Outstanding | At September 30, 2015, stock options outstanding were as follows: Options Outstanding Options Exercisable Year of Grant Number of Weighted Weighted Number of Weighted Weighted 2015 — — — — — — 2014 15,781 3.18 $ 143.48 8,804 2.98 $ 145.17 2013 8,755 3.36 140.95 5,955 2.92 139.27 2012 14,731 1.82 156.80 14,731 1.82 156.80 Prior 1,269 2.97 174.96 1,269 2.97 174.96 Total 40,536 2.72 $ 148.78 30,759 2.41 $ 150.83 |
Schedule of Warrants Outstanding | The table below reflects the status of warrants outstanding at September 30, 2015: Warrants Exercise Expiration Date December 1, 2009 1,861 $ 137.20 December 1, 2019 December 31, 2009 9,304 $ 137.20 December 31, 2019 February 8, 2011 44,643 $ 994.00 February 8, 2016 February 19, 2013 255,732 $ 9.52 December 31, 2019 Total 311,540 |
ASSET RETIREMENT OBLIGATION (Ta
ASSET RETIREMENT OBLIGATION (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Asset Retirement Obligation [Abstract] | |
Schedule of Change in Asset Retirement Obligation | The following table summarizes the Company’s asset retirement obligation transactions recorded in accordance with the provisions of ASC 410-20-25 for the nine months ended September 30, 2015 and the year ended December 31, 2014: Nine Months Year Ended Beginning Asset Retirement Obligation $ 2,671,975 $ 692,137 Revision of Previous Estimates — 148,968 Liabilities Incurred or Acquired 440,536 1,817,939 Accretion of Discount on Asset Retirement Obligations 153,007 104,803 Wells Settled Through P&A — (72,555 ) Liabilities Associated with Properties Sold — (19,317 ) Ending Asset Retirement Obligation $ 3,265,518 $ 2,671,975 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value [Abstract] | |
Schedule of Fair Value of Financial Instruments Measured on Recurring Basis | The following schedule summarizes the valuation of financial instruments measured at fair value on a recurring basis in the condensed consolidated balance sheet as of September 30, 2015: Fair Value Measurements at Quoted Prices In Significant Other Significant Warrant Liability – Long Term Liability $ — $ — $ (187,000 ) Commodity Derivatives – Current Asset (oil puts) — 14,310,070 — Commodity Derivatives – Non Current Asset (oil puts) — 3,442,664 — Commodity Derivatives – Current Liability (oil put premiums) — (7,974,013 ) — Commodity Derivatives – Long Term Liability (oil put premiums) — (2,067,594 ) — Total $ — $ 7,711,127 $ (187,000 ) The following schedule summarizes the valuation of financial instruments measured at fair value on a recurring basis in the condensed consolidated balance sheet as of December 31, 2014: Fair Value Measurements at Quoted Prices In Significant Other Significant Warrant Liability – Long Term Asset (Liability) $ — $ — $ (2,199,000 ) Commodity Derivatives – Current Asset (oil swaps) — 5,044,125 — Total $ — $ 5,044,125 $ (2,199,000 ) |
Schedule of Fair Value of Warrants Liability Measured on Recurring Basis, Unobservable Inputs | A rollforward of warrant liability measured at fair value using Level 3 inputs on a recurring basis is as follows: Balance, at January 1, 2014 $ (15,703,000 ) Change in Fair Value of Warrant Liability 13,504,000 Balance, at December 31, 2014 (2,199,000 ) Change in Fair Value of Warrant Liability 2,012,000 Balance, at September 30, 2015 $ (187,000 ) |
DERIVATIVE INSTRUMENTS AND PR27
DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Price Risk Management [Abstract] | |
Schedule of Open Commodity Contracts | On January 5, 2015, the Company settled its outstanding NYMEX West Texas Intermediate oil derivative swap contracts on a total of 120,000 barrels of oil, resulting in the receipt of $5,317,300 in cash. On April 7, 2015, the Company entered into put option contracts for oil volumes produced in May 2015 through December 2016, whereby premiums are paid monthly throughout the life of the contracts. Open contracts as of September 30, 2015 are provided in the table below. Settlement Period Daily Put Option Total Premium Total October 2015 – December 2015 4,000 $ 55.00 368,000 $ 4.88 $ 1,795,840 January 2016 – December 2016 3,000 $ 60.00 1,098,000 $ 7.54 $ 8,278,920 |
Schedule of Reconciliation of Commodity Derivatives | The following table sets forth a reconciliation of the changes in fair value of the Company’s commodity derivatives for the three and nine months ended September 30, 2015 and 2014. Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Beginning fair value of commodity derivatives $ (3,633,216 ) $ (5,852,801 ) $ 5,044,125 $ (853,005 ) Total gains on commodity derivatives 12,699,147 11,184,716 8,148,386 3,722,780 Cash settlements (received) paid on commodity derivatives (1,354,804 ) 313,451 (5,481,384 ) 2,775,591 Ending fair value of commodity derivatives $ 7,711,127 $ 5,645,366 $ 7,711,127 $ 5,645,366 |
BASIS OF PRESENTATION AND SIG28
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) | May. 20, 2015shares | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($)$ / sharesshares | Jul. 10, 2013shares | Oct. 22, 2012shares | May. 27, 2011shares |
Reverse Stock Split | |||||||||
Reverse Stock split (in Ratio) | .05 | ||||||||
Effect of Reverse Stock Split on Common Stock Underlying Outstanding Convertible Securities [Line Items] | |||||||||
Reverse stock split, reduction in shares (in Shares) | (105,274,000) | ||||||||
Cash and Cash Equivalents | |||||||||
Cash FDIC insured amount | $ | $ 250,000 | $ 250,000 | |||||||
Restricted Cash | |||||||||
Restricted cash and cash equivalents, current and non-current | $ | 0 | 0 | $ 4,000,000 | ||||||
Full Cost Method | |||||||||
Internal salaries capitalized | $ | 814,011 | $ 1,354,556 | 3,245,667 | $ 4,278,105 | |||||
Stock-based compensation included in internal salaries capitalized | $ | 78,390 | 624,629 | 708,600 | 2,020,992 | |||||
Capitalized interest | $ | 0 | $ 0 | 0 | 0 | |||||
Amount related to expiring leases included in the costs subject to depletion calculation | $ | 15,231,547 | $ 2,979,258 | |||||||
Unamortized costs of oil and gas properties exceeding the ceiling test limit | $ | 158,278,000 | ||||||||
Impairment of oil and natural gas properties | $ | $ 158,278,000 | $ 304,903,000 | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Number of options outstanding (in Shares) | 40,536 | 40,536 | 59,746 | ||||||
Income Taxes | |||||||||
Number of uncertain tax positions (in Integer) | $ / shares | 0 | 0 | 0 | ||||||
Uncertain tax liabilities recorded in balance sheet | $ | $ 0 | $ 0 | $ 0 | ||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||||||
Convertible debt | $ | $ 151,500,000 | ||||||||
Industry Segment and Geographic Information | |||||||||
Number of reportable segments (in Integer) | $ / shares | 1 | ||||||||
Number of long lived assets located outside the United States (in Integer) | $ / shares | 0 | 0 | |||||||
Common Shares Underlyng Outstanding Warrants [Member] | |||||||||
Effect of Reverse Stock Split on Common Stock Underlying Outstanding Convertible Securities [Line Items] | |||||||||
Reverse stock split, reduction in shares (in Shares) | (5,919,000) | ||||||||
Common Shares Underlyng Outstanding Options [Member] | |||||||||
Effect of Reverse Stock Split on Common Stock Underlying Outstanding Convertible Securities [Line Items] | |||||||||
Reverse stock split, reduction in shares (in Shares) | (955,000) | ||||||||
Common Shares Underlying Outstanding 2% Convertible Notes Due 2019 [Member] | |||||||||
Effect of Reverse Stock Split on Common Stock Underlying Outstanding Convertible Securities [Line Items] | |||||||||
Reverse stock split, reduction in shares (in Shares) | (16,402,000) | ||||||||
Minimum [Member] | |||||||||
Non oil and gas property and equipment [Line items] | |||||||||
Useful life (in Duration) | 3 years | ||||||||
Maximum [Member] | |||||||||
Non oil and gas property and equipment [Line items] | |||||||||
Useful life (in Duration) | 7 years | ||||||||
2011 Equity Incentive Plan (the "2011 Plan") [Member] | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock-based compensation, equity incentive plan, shares authorized for issuance (in Shares) | 35,714 | ||||||||
Stock-based compensation, equity incentive plan, shares available for issuance (in Shares) | 567,113 | 567,113 | |||||||
2011 Equity Incentive Plan (the "2011 Plan") [Member] | Stock Option [Member] | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Number of options outstanding (in Shares) | 42,491 | 42,491 | |||||||
2011 Equity Incentive Plan (the "2011 Plan") [Member] | Common Stock and Restricted Stock Units [Memeber] | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Nonoption units outstanding (in Shares) | 380,396 | 380,396 | |||||||
2011 Equity Incentive Plan (the "2011 Plan") [Member] | Nonvested Restricted Stock Units [Member] | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Nonoption units outstanding (in Shares) | 72,092 | 72,092 | |||||||
2011 Equity Incentive Plan - October 22, 2012 Amendment [Member] | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock-based compensation, equity incentive plan, shares authorized for issuance (in Shares) | 175,000 | ||||||||
2011 Equity Incentive Plan - July 10, 2013 Amendment [Member] | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock-based compensation, equity incentive plan, shares authorized for issuance (in Shares) | 490,000 | ||||||||
2011 Equity Incentive Plan - May 20, 2015 Amendment [Member] | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock-based compensation, equity incentive plan, shares authorized for issuance (in Shares) | 990,000 | ||||||||
Nonvested Restricted Stock Units [Member] | |||||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||||||
Anti-dilutive securities excluded from computation of earnings per share (in Shares) | 72,092 | ||||||||
Exercisable Stock Options [Member] | |||||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||||||
Anti-dilutive securities excluded from computation of earnings per share (in Shares) | 30,759 | ||||||||
Non Exercisable Stock Options [Member] | |||||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||||||
Anti-dilutive securities excluded from computation of earnings per share (in Shares) | 9,777 | ||||||||
Warrants Exercisable at $9.52 [Member] | |||||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||||||
Anti-dilutive securities excluded from computation of earnings per share (in Shares) | 255,732 | ||||||||
Warrant exercise price | $ / shares | $ 9.52 | $ 9.52 | |||||||
Warrants Exercisable at $137.20 [Member] | |||||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||||||
Anti-dilutive securities excluded from computation of earnings per share (in Shares) | 11,165 | ||||||||
Warrant exercise price | $ / shares | 137.20 | $ 137.20 | |||||||
Warrants Exercisable at $994.00 [Member] | |||||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||||||
Anti-dilutive securities excluded from computation of earnings per share (in Shares) | 44,643 | ||||||||
Warrant exercise price | $ / shares | $ 994 | $ 994 | |||||||
Convertible Senior Notes [Member] | |||||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||||||
Anti-dilutive securities excluded from computation of earnings per share (in Shares) | 863,248 | ||||||||
Convertible debt | $ | $ 151,500,000 | $ 151,500,000 |
LIQUIDITY AND CAPITAL RESOURC29
LIQUIDITY AND CAPITAL RESOURCES (Narrative) (Details) - USD ($) | Nov. 06, 2015 | Oct. 06, 2015 | Sep. 30, 2015 |
Liquidity and Capital Resources [Abstract] | |||
Cash available | $ 5,100,000 | ||
Remaining amount available under credit facility | 40,000,000 | ||
Credit facility outstanding balance | $ 160,000,000 | ||
Line Of Credit Facility [Line Items] | |||
Line of credit facility, excess of amount outstanding over borrowing base | $ 19,600,000 | ||
Prior to Scheduled Semi-Annual Lender Redetermination [Member] | |||
Line Of Credit Facility [Line Items] | |||
Current borrowing base under credit facility | $ 200,000,000 | ||
Subsequent to Scheduled Semi-Annual Lender Redetermination [Member] | |||
Line Of Credit Facility [Line Items] | |||
Current borrowing base under credit facility | $ 120,000,000 |
OIL AND NATURAL GAS PROPERTIE30
OIL AND NATURAL GAS PROPERTIES (Narrative) (Details) | Jul. 31, 2015USD ($)$ / shares | Sep. 02, 2014USD ($)$ / shares | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) |
Oil and Gas in Process Activities [Line Items] | ||||
Total proceeds from sale of working interest | $ 36,155,859 | |||
McKenzie County, North Dakota [Member] | ||||
Oil and Gas in Process Activities [Line Items] | ||||
Working interest percentage sold (in Percent) | 30.00% | |||
Amount of acreage in working interest sold (in Acres) | $ / shares | 25,000 | |||
Recent drilling costs reimbursement received in working interest sale | $ 5,400,000 | |||
Richland County, Montana [Member] | ||||
Oil and Gas in Process Activities [Line Items] | ||||
Amount of acreage in working interest sold (in Acres) | $ / shares | 4,400 | |||
McKenzie County, North Dakota and Richland County, Montana [Member] | ||||
Oil and Gas in Process Activities [Line Items] | ||||
Cash purchase price proceeds from working interest sale | $ 17,400,000 | |||
Total proceeds from sale of working interest | $ 22,800,000 | |||
McKenzie Billings and Dunn Counties, North Dakota [Member] | ||||
Oil and Gas in Process Activities [Line Items] | ||||
Number of acres acquired (in Acres) | $ / shares | 30,500 | |||
Cash portion of purchase price of acquired oil and natural gas property leases | $ 71,200,000 | |||
Williams County, North Dakota [Member] | ||||
Oil and Gas in Process Activities [Line Items] | ||||
Acreage assigned portion of purchase price of acquired oil and gas acreage (in Acres) | $ / shares | 4,300 |
OIL AND NATURAL GAS PROPERTIE31
OIL AND NATURAL GAS PROPERTIES (Schedule of Purchase Price of Acquisition Assets Acquired and Liabilities Assumed) (Details) | Sep. 02, 2014USD ($) |
Oil and Natural Gas Properties [Abstract] | |
Cash | $ 71,187 |
Assignment of oil and natural gas properties | 35,918 |
Liabilities assumed, net | 1,121 |
Total | 108,226 |
Proved oil and natural gas properties | 48,997 |
Unproved oil and natural gas properties | 59,083 |
Liabilites released | 146 |
Total fair value of oil and natural gas properties | $ 108,226 |
OIL AND NATURAL GAS PROPERTIE32
OIL AND NATURAL GAS PROPERTIES (Schedule of Pro Forma Results Of Acquisition) (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2014 | |
Oil and Natural Gas Properties [Abstract] | ||
Revenues | $ 43,160,959 | $ 95,151,146 |
Net Income | $ 14,860,956 | $ 14,723,060 |
Net Income per Share - Basic (in Dollars per Share) | $ 4.47 | $ 4.44 |
Net Income per Share - Diluted (in Dollars per Share) | $ 3.36 | $ 3.60 |
Weighted Average Shares Outstanding - Basic (in Shares) | 3,324,970 | 3,316,470 |
Weighted Average Shares Outstanding - Diluted (in Shares) | 4,419,020 | 4,093,377 |
RELATED PARTY TRANSACTIONS (Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) - USD ($) | May. 16, 2014 | Sep. 30, 2015 | Feb. 28, 2015 | Oct. 31, 2013 | Jun. 30, 2013 | Feb. 28, 2013 | May. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2014 |
Related Party Transaction [Line Items] | |||||||||
Equity offering (in Shares) | 1,357,955 | ||||||||
Issue price per share (in Dollars per Share) | $ 22.40 | ||||||||
Proceeds from issuance of common stock | $ 2,300,000 | $ 29,400,000 | $ 16,400,000 | $ 48,049,115 | |||||
White Deer Energy [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party transaction, Series A Preferred stock issued (in Shares) | 500,000 | ||||||||
Related party transaction, Series B Preferred stock issued (in Shares) | 255,732 | ||||||||
Related party transaction, common stock purchasable with warrants issued (in Shares) | 255,732 | ||||||||
Related party transaction, initial exercise price of common stock purchasable with warrants issued (in Dollars per Share) | $ 115.40 | ||||||||
Related party transaction, proceeds from the issuance of equity | $ 50,000,000 | ||||||||
Related party transaction, number of board members purchaser obtained the right to designate (in Integer) | 1 | ||||||||
Related party transaction, period after notice receipt from related party within which company has agreed to file a shelf registration statement covering resale of common stock purchasable with warrant issue (in Duration) | 30 days | ||||||||
Related party transaction, shares covered under shelf registration statement which company has agreed to file (in Shares) | 255,732 | ||||||||
Related party transaction, period over which Company has agreed to use commerically reasonable efforts to effect registration statement (in Duration) | 120 days | ||||||||
Additional company shares included under amended registratration rights agreement (in Shares) | 254,643 | 139,280 | |||||||
Related party transaction and company, shares registered for resale with the SEC under registration statement Form S-3 (in Shares) | 393,923 | ||||||||
Related party transaction and company, shares underlying warrants registered for resale with the SEC under registration statement Form S-3 (in Shares) | 255,732 | ||||||||
Equity offering (in Shares) | 669,643 |
PREFERRED AND COMMON STOCK (Nar
PREFERRED AND COMMON STOCK (Narrative) (Details) | Feb. 19, 2013USD ($)$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | Feb. 28, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)shares | May. 31, 2015USD ($)$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014USD ($) | Dec. 31, 2013USD ($)$ / shares |
Schedule Of Capitalization Equity [Line Items] | ||||||||||
Stock issued (in Shares) | shares | 1,357,955 | |||||||||
Exercise price of warrants issued (in Dollars per Unit) | $ / shares | 115.40 | 9.52 | 9.52 | 9.52 | 16.45 | |||||
Preferred stock, shares outstanding (in Shares) | shares | 255,732 | 255,732 | 255,732 | 255,732 | ||||||
Shares issued below initial warrant exercise price of $115.40 per share (in Shares) | shares | 536,091 | |||||||||
2% Convertible Notes debt extinguished through common share issuance | $ 21,000,000 | |||||||||
Common shares issued in public offering (in Shares) | shares | 848,961 | 1,357,955 | 2,460,045 | |||||||
Common stock, issuance price per share (in Dollars per Share) | $ / shares | $ 2.79 | $ 22.40 | $ 6.87 | $ 2.79 | $ 2.79 | |||||
Proceeds from issuance of common stock, net of transaction costs | $ 2,300,000 | $ 29,400,000 | $ 16,400,000 | $ 48,049,115 | ||||||
Internal rate of return required to avoid additional cash payment on change of control (in Percent) | 25.00% | 25.00% | 25.00% | |||||||
Additional cash payment that could be required on change of control to achieve 25% internal rate of return on White Deer Securities Purchase Agreement | $ 0 | $ 0 | $ 0 | |||||||
Payments of stock issuance costs | $ 2,816,006 | |||||||||
Warrant liability recognized | $ 8,626,000 | |||||||||
Issuance discount outstanding | $ 0 | $ 0 | 0 | |||||||
Share-Based Compensation Expense | $ 2,710,683 | $ 9,497,044 | ||||||||
Nonvested Restricted Stock Units [Member] | ||||||||||
Schedule Of Capitalization Equity [Line Items] | ||||||||||
Stock-based compensation, equity incentive plan, unvested shares (in Shares) | shares | 72,092 | 72,092 | 72,092 | |||||||
Unrecognized share-based compensation cost | $ 975,865 | $ 975,865 | $ 975,865 | |||||||
Period for recognition of unrecognized compensation costs related to nonvested share based compensation (Duration) | 8 months 12 days | |||||||||
Restricted Stock and Restricted Stock Units [Member] | ||||||||||
Schedule Of Capitalization Equity [Line Items] | ||||||||||
Share-Based Compensation Expense | $ 438,346 | $ 2,480,352 | $ 2,444,623 | 8,686,625 | ||||||
Stock-based compensation, equity incentive plan, unvested shares (in Shares) | shares | 72,092 | 29,231 | 72,092 | 72,092 | ||||||
Share-based compensation capitalized | $ 83,425 | 437,612 | $ 601,605 | 1,425,364 | ||||||
Series A Preferred Stock [Member] | ||||||||||
Schedule Of Capitalization Equity [Line Items] | ||||||||||
Stock issued (in Shares) | shares | 500,000 | |||||||||
Payment for redemption of stock | $ 50,000,000 | |||||||||
Preferred stock, redemption premium | $ 6,250,000 | |||||||||
Preferred stock, shares outstanding (in Shares) | shares | 0 | 0 | 0 | |||||||
Dividends paid | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
Fair value recognized from public offering, net of offering costs | $ 38,552,994 | |||||||||
Series B Preferred Stock [Member] | ||||||||||
Schedule Of Capitalization Equity [Line Items] | ||||||||||
Stock issued (in Shares) | shares | 255,732 | |||||||||
Number of votes per share of preferred stock (in Integer) | $ / shares | 1 | 1 | 1 | |||||||
Dividend rights (in Dollars per Share) | $ / shares | $ 0 | |||||||||
Liquidation preference (in Dollars per Share) | $ / shares | $ .001 | $ .001 | .001 | |||||||
Redemption price (in Dollars per Share) | $ / shares | $ .001 | $ .001 | $ .001 | |||||||
Share of common stock issuable under warrant issued as part of unit with each share of preferred stock (in Shares) | shares | 1 | 1 | 1 | |||||||
Fair value recognized from public offering, net of offering costs | $ 5,000 | |||||||||
Warrant [Member] | ||||||||||
Schedule Of Capitalization Equity [Line Items] | ||||||||||
Warrants to purchase common stock issued (in Shares) | shares | 255,732 | |||||||||
Series A Preferred Series B Preferred and Warrants to Purchase Common Stock [Member] | ||||||||||
Schedule Of Capitalization Equity [Line Items] | ||||||||||
Proceeds from stock issued | $ 50,000,000 |
PREFERRED AND COMMON STOCK (Sch
PREFERRED AND COMMON STOCK (Schedule of Components of Preferred Stock Transaction) (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 | Feb. 19, 2013 |
Total | $ 187,256 | $ 2,199,256 | $ 49,995,256 |
Series A Perpetual Preferred Stock [Member] | |||
Total | 41,369,000 | ||
Series B Voting Preferred Stock [Member] | |||
Total | $ 256 | $ 256 | 256 |
Warrant Liability [Member] | |||
Total | $ 187,000 | $ 2,199,000 | $ 8,626,000 |
PREFERRED AND COMMON STOCK (S36
PREFERRED AND COMMON STOCK (Schedule of Restricted Stock Units and Restricted Stock Shares Outstanding) (Details) - Restricted Stock and Restricted Stock Units [Member] | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Non-vested restricted stock and restricted stock units, at beginning of period (in Shares) | shares | 29,231 |
Restricted stock units and restricted stock shares, Granted (in Shares) | shares | 52,217 |
Restricted stock units and restricted stock shares, Canceled (in Shares) | shares | (3,691) |
Restricted stock units and restricted stock shares, Vested and forfeited for taxes (in Shares) | shares | (1,358) |
Restricted stock units and restricted stock shares, Vested and issued (in Shares) | shares | (4,037) |
Non-vested restricted stock and restricted stock units, at end of period (in Shares) | shares | 72,092 |
Non-vested restricted stock units, Weighted Average Grant Date Fair Value, at beginning of period (in Dollars per Share) | $ 145.40 |
Non-vested restricted stock units, Weighted Average Grant Date Fair Value, Granted (in Dollars per Share) | 15.50 |
Non-vested restricted stock units, Weighted Average Grant Date Fair Value, Canceled (in Dollars per Share) | 14.33 |
Non-vested restricted stock units, Weighted Average Grant Date Fair Value, Vested and forfeited for taxes (in Dollars per Share) | 149.60 |
Non-vested restricted stock units, Weighted Average Grant Date Fair Value, Vested and issued (in Dollars per Share) | 149.60 |
Non-vested restricted stock units, Weighted Average Grant Date Fair Value, at end of period (in Dollars per Share) | $ 57.78 |
STOCK OPTIONS AND WARRANTS (Nar
STOCK OPTIONS AND WARRANTS (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options granted (in Shares) | ||||
Stock Option [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options granted (in Shares) | 0 | |||
Share based compensation, net of tax | $ (15,200) | $ 337,809 | $ 142,276 | $ 810,419 |
Share based compensation, tax | 0 | 0 | 0 | 0 |
Share-based compensation capitalized | (5,035) | $ 187,017 | 106,995 | $ 595,628 |
Unrecognized compensation relating to options granted | $ 183,140 | $ 183,140 | ||
Period for recognition of unrecognized compensation costs related to nonvested share based compensation (Duration) | 10 months 29 days | |||
Warrant [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Warrants expired or forfeited (in Shares) | 0 |
STOCK OPTIONS AND WARRANTS (Sch
STOCK OPTIONS AND WARRANTS (Schedule of Stock Options Outstanding Roll Forward) (Details) | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Stock Options and Warrants [Abstract] | |
Stock options outstanding at beginning of period (in Shares) | shares | 59,746 |
Stock options granted (in Shares) | shares | |
Stock options canceled (in Shares) | shares | (19,210) |
Stock options exercised (in Shares) | shares | |
Stock options outstanding at end of period (in Shares) | shares | 40,536 |
Stock options exercisable at end of period (in Shares) | shares | 30,759 |
Stock options outstanding weighted average exercise price at beginning of period (in Dollars per Share) | $ 171.20 |
Stock options granted weighted average exercise price (in Dollars per Share) | |
Stock options canceled weighted average exercise price (in Dollars per Share) | $ 218.39 |
Stock options exercised weighted average exercise price (in Dollars per Share) | |
Stock options outstanding weighted average exercise price at end of period (in Dollars per Share) | $ 148.78 |
Stock options exercisable, weighted average exercise price at end of period (in Dollars per Share) | $ 150.83 |
STOCK OPTIONS AND WARRANTS (S39
STOCK OPTIONS AND WARRANTS (Schedule of Stock Options Outstanding) (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of options outstanding (in Shares) | 40,536 | 59,746 |
Stock options outstanding, weighted average remaining contract life (years) (in Duration) | 2 years 8 months 19 days | |
Stock options outstanding weighted average exercise price (in Dollars per Share) | $ 148.78 | $ 171.20 |
Number of options exercisable (in Shares) | 30,759 | |
Stock options exercisable, weighted average remaining contract life (years) (in Duration) | 2 years 4 months 28 days | |
Stock options exercisable, weighted average exercise price (in Dollars per Share) | $ 150.83 | |
Year of Grant 2015 [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of options outstanding (in Shares) | ||
Stock options outstanding, weighted average remaining contract life (years) (in Duration) | ||
Stock options outstanding weighted average exercise price (in Dollars per Share) | ||
Number of options exercisable (in Shares) | ||
Stock options exercisable, weighted average remaining contract life (years) (in Duration) | ||
Stock options exercisable, weighted average exercise price (in Dollars per Share) | ||
Year of Grant 2014 [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of options outstanding (in Shares) | 15,781 | |
Stock options outstanding, weighted average remaining contract life (years) (in Duration) | 3 years 2 months 5 days | |
Stock options outstanding weighted average exercise price (in Dollars per Share) | $ 143.48 | |
Number of options exercisable (in Shares) | 8,804 | |
Stock options exercisable, weighted average remaining contract life (years) (in Duration) | 2 years 11 months 23 days | |
Stock options exercisable, weighted average exercise price (in Dollars per Share) | $ 145.17 | |
Year of Grant 2013 [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of options outstanding (in Shares) | 8,755 | |
Stock options outstanding, weighted average remaining contract life (years) (in Duration) | 3 years 4 months 10 days | |
Stock options outstanding weighted average exercise price (in Dollars per Share) | $ 140.95 | |
Number of options exercisable (in Shares) | 5,955 | |
Stock options exercisable, weighted average remaining contract life (years) (in Duration) | 2 years 11 months 1 day | |
Stock options exercisable, weighted average exercise price (in Dollars per Share) | $ 139.27 | |
Year of Grant 2012 [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of options outstanding (in Shares) | 14,731 | |
Stock options outstanding, weighted average remaining contract life (years) (in Duration) | 1 year 9 months 26 days | |
Stock options outstanding weighted average exercise price (in Dollars per Share) | $ 156.80 | |
Number of options exercisable (in Shares) | 14,731 | |
Stock options exercisable, weighted average remaining contract life (years) (in Duration) | 1 year 9 months 26 days | |
Stock options exercisable, weighted average exercise price (in Dollars per Share) | $ 156.80 | |
Year of Grant Prior to 2012 [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of options outstanding (in Shares) | 1,269 | |
Stock options outstanding, weighted average remaining contract life (years) (in Duration) | 2 years 11 months 19 days | |
Stock options outstanding weighted average exercise price (in Dollars per Share) | $ 174.96 | |
Number of options exercisable (in Shares) | 1,269 | |
Stock options exercisable, weighted average remaining contract life (years) (in Duration) | 2 years 11 months 19 days | |
Stock options exercisable, weighted average exercise price (in Dollars per Share) | $ 174.96 |
STOCK OPTIONS AND WARRANTS (S40
STOCK OPTIONS AND WARRANTS (Schedule of Warrants Outstanding) (Details) | 9 Months Ended | ||
Sep. 30, 2015$ / sharesshares | Dec. 31, 2013$ / shares | Feb. 19, 2013$ / shares | |
Class of Warrant or Right [Line Items] | |||
Warrants outstanding (in Shares) | shares | 311,540 | ||
Weighted-average exercise price of warrants outstanding (in Dollars per Unit) | 9.52 | 16.45 | 115.40 |
Issued December 1, 2009 [Member] | |||
Class of Warrant or Right [Line Items] | |||
Warrants outstanding (in Shares) | shares | 1,861 | ||
Weighted-average exercise price of warrants outstanding (in Dollars per Unit) | 137.20 | ||
Expiration date of warrants outstanding (in Date) | Dec. 1, 2019 | ||
Issued December 31, 2009 [Member] | |||
Class of Warrant or Right [Line Items] | |||
Warrants outstanding (in Shares) | shares | 9,304 | ||
Weighted-average exercise price of warrants outstanding (in Dollars per Unit) | 137.20 | ||
Expiration date of warrants outstanding (in Date) | Dec. 31, 2019 | ||
Issued February 8, 2011 [Member] | |||
Class of Warrant or Right [Line Items] | |||
Warrants outstanding (in Shares) | shares | 44,643 | ||
Weighted-average exercise price of warrants outstanding (in Dollars per Unit) | 994 | ||
Expiration date of warrants outstanding (in Date) | Feb. 8, 2016 | ||
Issued February 19, 2013 [Member] | |||
Class of Warrant or Right [Line Items] | |||
Warrants outstanding (in Shares) | shares | 255,732 | ||
Weighted-average exercise price of warrants outstanding (in Dollars per Unit) | 9.52 | ||
Expiration date of warrants outstanding (in Date) | Dec. 31, 2019 |
REVOLVING CREDIT FACILITY (Narr
REVOLVING CREDIT FACILITY (Narrative) (Details) | 9 Months Ended | ||||
Sep. 30, 2015USD ($) | Nov. 06, 2015USD ($) | Oct. 06, 2015USD ($) | Apr. 30, 2015USD ($) | Dec. 31, 2014USD ($) | |
Line Of Credit Facility [Line Items] | |||||
Credit facility amount outstanding | $ 159,683,000 | ||||
Line of credit facility, excess of amount outstanding over borrowing base | $ 19,600,000 | ||||
Prior to Scheduled Semi-Annual Lender Redetermination [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Current borrowing base under credit facility | $ 250,000,000 | ||||
Subsequent to Scheduled Semi-Annual Lender Redetermination [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Current borrowing base under credit facility | $ 200,000,000 | ||||
Wells Fargo Credit Agreement [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Date credit facility was entered into (in Date) | Nov. 20, 2012 | ||||
Maximum amount available under credit facility | $ 400,000,000 | ||||
Maturity date of credit facility (in Date) | Sep. 30, 2018 | ||||
Effective interest rate at period end | 2.70% | ||||
Facility covenant, minimum current ratio (in Ratio) | 1 | ||||
Facility covenant, maximum debt to EBITDA, current and through June 30, 2016 (in percent) | 5 | ||||
Facility covenant, maximum debt to EBITDA, July 01, 2016 - December 31, 2016 (in percent) | 5.50 | ||||
Facility covenant, maximum Senior Secured Debt to EBITDA (in percent) | 2.50 | ||||
Wells Fargo Credit Agreement [Member] | Minimum [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Commitment fee percentage (in Percent) | 0.375% | ||||
Wells Fargo Credit Agreement [Member] | Minimum [Member] | Alternate Base rate Under Credit Facility [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Interest rate spread (in Percent) | 0.75% | ||||
Wells Fargo Credit Agreement [Member] | Minimum [Member] | LIBOR Rate [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Interest rate spread (in Percent) | 1.75% | ||||
Wells Fargo Credit Agreement [Member] | Maximum [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Commitment fee percentage (in Percent) | 0.50% | ||||
Facility covenant, maximum amount of proved reserves permitted to be hedged for up to 24 months from facility initiation (in Percent) | 60.00% | ||||
Facility covenant, maximum amount of proved reserves permitted to be hedged for 24 to 60 months from facility initiation (in Percent) | 80.00% | ||||
Facility covenant, maximum value of proved reserves hedging as a percent of actual current period production (in Percent) | 100.00% | ||||
Percentage of projected production through next fiscal year end covered by hedges (in Percent) | 70.00% | ||||
Wells Fargo Credit Agreement [Member] | Maximum [Member] | Alternate Base rate Under Credit Facility [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Interest rate spread (in Percent) | 1.75% | ||||
Wells Fargo Credit Agreement [Member] | Maximum [Member] | LIBOR Rate [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Interest rate spread (in Percent) | 2.75% | ||||
Wells Fargo Credit Agreement [Member] | Subsequent to Scheduled Semi-Annual Lender Redetermination [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Line of credit facility, excess of amount outstanding over borrowing base | $ 19,600,000 | ||||
Wells Fargo Credit Agreement Letters of Credit [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Maximum amount available under credit facility | $ 5,000,000 | ||||
Fronting fee to be paid if this value exceeds point one two five percent of the face amount of the letter of credit to be issued | $ 500 | ||||
Fronting fee to be paid if this value times the Letter of credit face amount exceeds five hundred dollars (in Percent) | 0.125% | ||||
Wells Fargo Credit Agreement Letters of Credit [Member] | Minimum [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Interest on letters of credit (in Percent) | 1.75% | ||||
Wells Fargo Credit Agreement Letters of Credit [Member] | Maximum [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Interest on letters of credit (in Percent) | 2.75% |
CONVERTIBLE NOTES (Narrative) (
CONVERTIBLE NOTES (Narrative) (Details) | Mar. 24, 2014USD ($) | Dec. 31, 2014USD ($)shares | Dec. 31, 2014USD ($) | Sep. 30, 2015USD ($)$ / sharesshares |
Debt Instrument [Line Items] | ||||
Convertible senior notes amount outstanding | $ 151,500,000 | |||
Amount of convertible debt extinguished through equity issuance | $ 21,000,000 | |||
Convertible Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes issuance date (Date) | Mar. 24, 2014 | |||
Notes, amount issued | $ 172,500,000 | |||
Notes interest rate (in Percent) | 2.00% | |||
Notes maturity date (in Date) | Apr. 1, 2019 | |||
Convertible senior notes amount outstanding | $ 151,500,000 | |||
Shares issuable on conversion of convertible notes (in Shares) | shares | 863,248 | |||
Private placement, proceeds | $ 166,900,000 | |||
Period of amortization of note issuance costs to interest expense (in Duration) | 5 years | |||
Convertible notes, conversion rate, shares per $1,000 principal amount (in Shares) | $ / shares | 5.698 | |||
Convertible notes, conversion rate, principal amount per 5.698 shares | $ 1,000 | |||
Convertible notes, conversion rate, price per share (in Dollars per Share) | $ / shares | $ 175.60 | |||
Convertible notes, fundamental change purchase price percentage (in Percent) | 100.00% | |||
Convertible notes, event of default, minimum percent of outstanding principal required among noteholders to trigger prepayment demand under event of default (in Percent) | 25.00% | |||
Shares issued in debt conversion (in Shares) | shares | 536,091 | |||
Amount of convertible debt extinguished through equity issuance | $ 21,000,000 | |||
Number of common shares underlying convertible debt under original indenture agreement (in Shares) | shares | 119,658 | |||
Debt conversion expense recognized | $ 10,438,080 |
ASSET RETIREMENT OBLIGATION (Na
ASSET RETIREMENT OBLIGATION (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Asset Retirement Obligation [Abstract] | |
Significant input to assumption, asset retirement obligation valuation, future inflation factor (in Percent) | 2.50% |
Significant input to assumption, asset retirement obligation valuation, interest rate credit-adjusted risk-free (in Percent) | 7.00% |
Assets legally restricted for purposes of settling asset retirement obligtions | $ 0 |
ASSET RETIREMENT OBLIGATION (Sc
ASSET RETIREMENT OBLIGATION (Schedule of Change in Asset Retirement Obligation) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Asset Retirement Obligation [Abstract] | |||||
Beginning Asset Retirement Obligation | $ 2,671,975 | $ 692,137 | $ 692,137 | ||
Revision of previous estimate | 148,968 | ||||
Liabilities Incurred or Acquired | $ 440,536 | 1,817,939 | |||
Accretion of Discount on Asset Retirement Obligations | $ 52,500 | $ 28,037 | $ 153,007 | $ 63,837 | 104,803 |
Wells Settled through P&A | (72,555) | ||||
Liabilities Associated with Properties Sold | (19,317) | ||||
Ending Asset Retirement Obligation | $ 3,265,518 | $ 3,265,518 | $ 2,671,975 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Income Taxes [Abstract] | ||
Deferred income tax provision or benefit | $ 0 | $ 0 |
Unrecognized tax benefits | $ 0 | $ 0 |
FAIR VALUE (Narrative) (Details
FAIR VALUE (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Feb. 19, 2013 | |
Fair Value [Abstract] | |||||
Fair value of warrant liability at issuance | $ 8,626,000 | ||||
Warrant revaluation gain (expense) | $ 221,000 | $ 216,000 | $ 2,012,000 | $ (1,751,000) | |
Fair value of convertible notes | $ 39,400,000 | $ 39,400,000 |
FAIR VALUE (Schedule of Fair Va
FAIR VALUE (Schedule of Fair Value of Financial Instruments Measured on Recurring Basis) (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Warrant Liability - Long Term Liability | $ (187,000) | $ (2,199,000) |
Commodity Derivatives - Current Asset (oil puts at 2015-09-30 and oil swaps at 2014-12-31) | $ 6,336,057 | $ 5,044,125 |
Commodity Derivatives - Long Term Liabilitiy (oil put premiums) | ||
Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Warrant Liability - Long Term Liability | ||
Commodity Derivatives - Current Asset (oil puts at 2015-09-30 and oil swaps at 2014-12-31) | ||
Commodity Derivatives - Current Liabilitiy (oil put premiums) | ||
Commodity Derivatives - Long Term Liabilitiy (oil put premiums) | ||
Total | ||
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Warrant Liability - Long Term Liability | ||
Commodity Derivatives - Current Asset (oil puts at 2015-09-30 and oil swaps at 2014-12-31) | $ 14,310,070 | $ 5,044,125 |
Commodity Derivatives - Current Liabilitiy (oil put premiums) | (7,974,014) | |
Commodity Derivatives - Long Term Liabilitiy (oil put premiums) | (2,067,594) | |
Total | 7,711,127 | 5,044,125 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Warrant Liability - Long Term Liability | $ (187,000) | $ (2,199,000) |
Commodity Derivatives - Current Asset (oil puts at 2015-09-30 and oil swaps at 2014-12-31) | ||
Commodity Derivatives - Current Liabilitiy (oil put premiums) | ||
Commodity Derivatives - Long Term Liabilitiy (oil put premiums) | ||
Total | $ (187,000) | $ (2,199,000) |
FAIR VALUE (Schedule of Fair 48
FAIR VALUE (Schedule of Fair Value of Warrants Liability Measured on Recurring Basis, Unobservable Inputs) (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Rollforward of Level 3 warrants liability measured at fair value using level 3 on a recurring basis | ||
Warrants liability, balance at beginning of period | $ (2,199,000) | $ (15,703,000) |
Change in Fair Value of Warrant Liability | 2,012,000 | 13,504,000 |
Warrants liability, balance at end of period | $ (187,000) | $ (2,199,000) |
DERIVATIVE INSTRUMENTS AND PR49
DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT (Narrative) (Details) | Sep. 30, 2015USD ($)$ / shares | Jan. 05, 2015USD ($)$ / shares | Feb. 19, 2013USD ($)$ / shares | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Derivative Instruments and Price Risk Management [Abstract] | |||||
Barrels of outstanding NYMEX West Texas intermediate oil derivative swap contracts, oil settled (in Barrels) | 120,000 | ||||
Proceeds from settlement of oil derivative swap contracts | $ | $ 5,317,300 | ||||
Warrant liability recognized | $ | $ 8,626,000 | ||||
Warrants issued, price per warrant (in Dollars per Unit) | 33.80 | ||||
Expected volatility rate (in Percent) | 80.00% | 40.00% | |||
Risk-free interest rate (in Percent) | 1.65% | 1.38% | |||
Expected term (in Duration) | 1067 days | 1798 days | |||
Exercise price of warrants (in Dollars per Unit) | $ 9.52 | ||||
Fair value of warrants | $ | $ 187,000 | $ 2,199,000 | $ 15,703,000 | ||
Average stock price valuation assumption (in Dollars per Share) | $ 2.34 |
DERIVATIVE INSTRUMENTS AND PR50
DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT (Schedule of Open Commodity Swap Contracts) (Details) - Crude Oil [Member] - Put [Member] | Sep. 30, 2015USD ($)$ / shares |
Settlement Period October 2015 - December 2015 | |
Derivative [Line Items] | |
Daily Volume Oil (in Barrels) | 4,000 |
Put Option Fixed Price Per Bbl (in Dollars per Unit) | 55 |
Total Volume (in Barrels) | 368,000 |
Premium Paid per Bbl (in Dollars per Unit) | 4.88 |
Total Premiums Due | $ | $ 1,795,840 |
Settlement Period January 2016 - December 2016 | |
Derivative [Line Items] | |
Daily Volume Oil (in Barrels) | 3,000 |
Put Option Fixed Price Per Bbl (in Dollars per Unit) | 60 |
Total Volume (in Barrels) | 1,098,000 |
Premium Paid per Bbl (in Dollars per Unit) | 7.54 |
Total Premiums Due | $ | $ 8,278,920 |
DERIVATIVE INSTRUMENTS AND PR51
DERIVATIVE INSTRUMENTS AND PRICE RISK MANAGEMENT (Schedule of Reconciliation of the Changes in Fair Value of Commodity Derivatives) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative Instruments and Price Risk Management [Abstract] | ||||
Beginning fair value of commodity derivatives | $ (3,633,216) | $ (5,852,801) | $ 5,044,125 | $ (853,005) |
Total gains (losses) on commodity derivatives | 12,699,147 | 11,184,716 | 8,148,386 | 3,722,780 |
Cash settlements paid on commodity derivatives | (1,354,804) | 313,451 | (5,481,384) | 2,775,591 |
Ending fair value of commodity derivatives | $ 7,711,127 | $ 5,645,366 | $ 7,711,127 | $ 5,645,366 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) | Sep. 30, 2015USD ($)$ / Unit$ / bblMMBblsBcf |
Executive Compensation [Abstract] | |
Percent of 2014 earned cash bonus of CEO and Vice Chair of BOD to be paid in equity by early 2016 (in Percent) | 50.00% |
Percent of 2014 annual equity bonus of CEO and Vice Chair of BOD to be paid in equity by early 2016 (in Percent) | 50.00% |
Oil, Natural Gas and Produced Water Transportation and Processing Commitments [Abstract] | |
Gross barrels of oil committed to be delivered (in Millions of barrels) | 16.4 |
Oil delivery commitment, price per barrel (in USD/bbl) | $ / bbl | 1.21 |
Gross natural gas committed to be delivered (in Billions of Cubic Feet) | Bcf | 10.9 |
Natural gas delivery commitment, price per million cubic feet (in USD/Mcf) | $ / Unit | 1.67 |
Gross barrels of produced water committed to be delivered (in Millions of barrels) | 28.2 |
Produced water delivery commitment, price per barrel (in USD/bbl) | $ / bbl | .82 |
Accrued volume commitment deficiency fee expense | $ | $ 1,000,000 |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) - Subsequent Event [Member] - USD ($) | Nov. 06, 2015 | Nov. 04, 2015 | Oct. 22, 2015 | Oct. 06, 2015 | Oct. 01, 2015 |
Subsequent Event [Line Items] | |||||
Joint venture agreement working interest sold (in Percent) | 30.00% | ||||
Joint venture agreement acreage of working interest sale in McKenzie County, North Dakota (in Acres) | 25,000 | ||||
Joint venture agreement acreage of working interest sale in Richland County, Montana (in Acres) | 4,400 | ||||
Joint venture agreement sales price of working interest sold | $ 17,400,000 | ||||
Joint venture agreement reimbursement by partner for proportionate share of recently drilled and uncompleted wells | 5,400,000 | ||||
Joint venture agreement working interest sale total cash proceeds | 22,800,000 | ||||
Balance of credit facility prior to reduction via proceeds from working interest sale | 160,000,000 | ||||
Balance of credit facility subsequent to reduction via proceeds from working interest sale | $ 139,600,000 | ||||
Credit facility borrowing base prior to redetermination | $ 200,000,000 | ||||
Credit facility borrowing base subsequent to redetermination | $ 120,000,000 | ||||
Credit facility excess balance over borrowing base | $ 19,600,000 | ||||
Lender forbearance agreement default condition on default of certain specified contracts | $ 5,000,000 | ||||
Lender forbearance agreement required monthly interest payment annual percentage rate over Alternate Base Rate (in Percent) | 1.75% | ||||
Lender forbearance agreement fee percentage of outstanding principal balance (in Percent) | 0.50% | ||||
Lender forbearance agreement percentage of net cash proceeds received (as defined) required to be made as mandatory prepayments (in Percent) | $ 1 | ||||
Lender forbearance agreement required minimum combined weekly balance of unrestricted cash and cash equivalents | 1,000,000 | ||||
Lender forbearance agreement limit on capital expenditures | $ 1,500,000 | ||||
Debt conversion noteholder agreement to exchange principal due for common stock value of debt to be converted | $ 3,000,000 | ||||
Debt conversion noteholder agreement to exchange principal due for common stock, discount to be applied to volume-weighted stock price over fifteen trading days, appriximately October 23, 2015 through November 12, 2015 (in Percent) | 15.00% | ||||
Debt conversion noteholder agreement to exchange principal due for common stock, expected number of shares to be issued in conversion (in Shares) | 880,000 | ||||
Debt conversion noteholder agreement to exchange principal due for common stock estimated per share price of shares to be issued in exchange (In Dollars per Share) | $ 1.70 | ||||
Debt conversion noteholder agreement to exchange principal due for common stock expected debt conversion expense to be recognized | $ 1,500,000 | ||||
Debt conversion noteholder agreement to exchange principal due for common stock expected remaining aggregate principal of convertible notes after conversion | $ 148,500,000 |