Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 30, 2017 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Entity Registrant Name | Linn Energy, Inc. | |
Entity Central Index Key | 1,326,428 | |
Current Fiscal Year End | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 89,233,922 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | |
Successor | |||
Current assets: | |||
Cash and cash equivalents | $ 1,072 | ||
Accounts receivable – trade, net | 181,034 | ||
Derivative instruments | 2,406 | ||
Restricted cash | 81,766 | ||
Other current assets | 91,005 | ||
Total current assets | 357,283 | ||
Noncurrent assets: | |||
Oil and natural gas properties (successful efforts method) | 2,203,893 | ||
Less accumulated depletion and amortization | (15,351) | ||
Oil and natural gas properties, successful efforts method, net | 2,188,542 | ||
Other property and equipment | 445,951 | ||
Less accumulated depreciation | (4,197) | ||
Other property and equipment, net | 441,754 | ||
Derivative instruments | 8,960 | ||
Deferred income taxes | 624,704 | ||
Other noncurrent assets | 23,352 | ||
Noncurrent assets, excluding property, total | 657,016 | ||
Total noncurrent assets | 3,287,312 | ||
Total assets | 3,644,595 | ||
Current liabilities: | |||
Accounts payable and accrued expenses | 334,160 | ||
Derivative instruments | 18,701 | ||
Current portion of long-term debt, net | 28,125 | ||
Other accrued liabilities | 48,829 | ||
Total current liabilities | 429,815 | ||
Derivative instruments | 0 | ||
Long-term debt | 805,625 | ||
Other noncurrent liabilities | 350,981 | ||
Liabilities subject to compromise | 0 | ||
Commitments and contingencies (Note 10) | |||
Temporary equity: | |||
Redeemable noncontrolling interests | 29,350 | ||
Stockholders’/unitholders’ equity (deficit): | |||
Successor preferred stock ($0.001 par value, 30,000,000 shares authorized and no shares issued at March 31, 2017; no shares authorized or issued at December 31, 2016) | 0 | ||
Successor Class A common stock ($0.001 par value, 270,000,000 shares authorized and 89,233,922 shares issued at March 31, 2017; no shares authorized or issued at December 31, 2016) | 89 | ||
Successor additional paid-in capital | 2,035,991 | ||
Successor accumulated deficit | (7,256) | ||
Total stockholders’/unitholders’ equity (deficit) | 2,028,824 | ||
Total liabilities and equity (deficit) | $ 3,644,595 | ||
Predecessor | |||
Current assets: | |||
Cash and cash equivalents | $ 694,857 | ||
Accounts receivable – trade, net | 198,064 | ||
Derivative instruments | 0 | ||
Restricted cash | 1,602 | ||
Other current assets | 106,011 | ||
Total current assets | 1,000,534 | ||
Noncurrent assets: | |||
Oil and natural gas properties (successful efforts method) | 13,232,959 | ||
Less accumulated depletion and amortization | (9,999,560) | ||
Oil and natural gas properties, successful efforts method, net | 3,233,399 | ||
Other property and equipment | 636,487 | ||
Less accumulated depreciation | (224,547) | ||
Other property and equipment, net | 411,940 | ||
Derivative instruments | 0 | ||
Deferred income taxes | 0 | ||
Other noncurrent assets | 14,718 | ||
Noncurrent assets, excluding property, total | 14,718 | ||
Total noncurrent assets | 3,660,057 | ||
Total assets | 4,660,591 | ||
Current liabilities: | |||
Accounts payable and accrued expenses | 295,077 | ||
Derivative instruments | 82,508 | ||
Current portion of long-term debt, net | [1] | 1,937,729 | |
Other accrued liabilities | 26,304 | ||
Total current liabilities | 2,341,618 | ||
Derivative instruments | 11,349 | ||
Long-term debt | 0 | ||
Other noncurrent liabilities | 399,607 | ||
Liabilities subject to compromise | 4,305,005 | ||
Commitments and contingencies (Note 10) | |||
Temporary equity: | |||
Redeemable noncontrolling interests | 0 | ||
Stockholders’/unitholders’ equity (deficit): | |||
Predecessor units issued and outstanding (no units issued or outstanding at March 31, 2017; 352,792,474 units issued and outstanding at December 31, 2016) | 5,386,885 | ||
Predecessor accumulated deficit | (7,783,873) | ||
Total stockholders’/unitholders’ equity (deficit) | (2,396,988) | ||
Total liabilities and equity (deficit) | $ 4,660,591 | ||
[1] | At March 31, 2017, the current portion of long-term debt reflects required payments on the Successor’s term loan in the next twelve months. Due to covenant violations, the Predecessor’s credit facility and term loan were classified as current at December 31, 2016. |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Unitholders' capital: Units issued | 0 | 352,792,474 |
Unitholders’ capital: Units outstanding | 0 | 352,792,474 |
Common stock par value | $ 0.001 | |
Common stock authorized | 270,000,000 | 0 |
Common stock issued | 89,233,922 | 0 |
Preferred stock par value | $ 0.001 | |
Preferred stock authorized | 30,000,000 | 0 |
Preferred stock issued | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended |
Mar. 31, 2017 | Feb. 28, 2017 | Mar. 31, 2016 | |
Successor | |||
Revenues and other: | |||
Oil, natural gas and natural gas liquids sales | $ 87,445 | ||
Gains (losses) on oil and natural gas derivatives | (11,959) | ||
Marketing revenues | 2,914 | ||
Other revenues | 2,033 | ||
Total revenues | 80,433 | ||
Expenses: | |||
Lease operating expenses | 27,166 | ||
Transportation expenses | 13,723 | ||
Marketing expenses | 2,539 | ||
General and administrative expenses | 10,411 | ||
Exploration costs | 55 | ||
Depreciation, depletion and amortization | 21,362 | ||
Impairment of long-lived assets | 0 | ||
Taxes, other than income taxes | 7,502 | ||
Losses on sale of assets and other, net | 445 | ||
Total expenses | 83,203 | ||
Other income and (expenses): | |||
Interest expense, net of amounts capitalized | (4,917) | ||
Other, net | (388) | ||
Total other income and (expenses) | (5,305) | ||
Reorganization items, net | (2,565) | ||
Income (loss) from continuing operations before income taxes | (10,640) | ||
Income tax expense (benefit) | (3,384) | ||
Income (loss) from continuing operations | (7,256) | ||
Loss from discontinued operations, net of income taxes | 0 | ||
Net income (loss) | $ (7,256) | ||
Basic and diluted income (loss) per share/unit – continuing operations | $ (0.08) | ||
Basic and diluted loss per share/unit – discontinued operations | 0 | ||
Basic and diluted net income (loss) per share/unit | $ (0.08) | ||
Basic and diluted weighted average shares/units outstanding | 89,848 | ||
Predecessor | |||
Revenues and other: | |||
Oil, natural gas and natural gas liquids sales | $ 203,766 | $ 199,849 | |
Gains (losses) on oil and natural gas derivatives | 92,691 | 109,453 | |
Marketing revenues | 6,636 | 9,061 | |
Other revenues | 9,925 | 28,336 | |
Total revenues | 313,018 | 346,699 | |
Expenses: | |||
Lease operating expenses | 53,224 | 88,387 | |
Transportation expenses | 25,972 | 41,994 | |
Marketing expenses | 4,820 | 7,833 | |
General and administrative expenses | 71,745 | 83,720 | |
Exploration costs | 93 | 2,693 | |
Depreciation, depletion and amortization | 56,484 | 105,215 | |
Impairment of long-lived assets | 0 | 123,316 | |
Taxes, other than income taxes | 15,747 | 19,754 | |
Losses on sale of assets and other, net | 672 | 1,269 | |
Total expenses | 228,757 | 474,181 | |
Other income and (expenses): | |||
Interest expense, net of amounts capitalized | (18,406) | (85,267) | |
Other, net | (149) | 68 | |
Total other income and (expenses) | (18,555) | (85,199) | |
Reorganization items, net | 2,331,189 | 0 | |
Income (loss) from continuing operations before income taxes | 2,396,895 | (212,681) | |
Income tax expense (benefit) | (166) | 10,246 | |
Income (loss) from continuing operations | 2,397,061 | (222,927) | |
Loss from discontinued operations, net of income taxes | 0 | (1,124,819) | |
Net income (loss) | $ 2,397,061 | $ (1,347,746) | |
Basic and diluted income (loss) per share/unit – continuing operations | $ 6.79 | $ (0.64) | |
Basic and diluted loss per share/unit – discontinued operations | 0 | (3.19) | |
Basic and diluted net income (loss) per share/unit | $ 6.79 | $ (3.83) | |
Basic and diluted weighted average shares/units outstanding | 352,792 | 352,234 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF EQUITY (PREDECESSOR) (Unaudited) - 2 months ended Feb. 28, 2017 - USD ($) $ in Thousands | Total | Units | Unitholders’ Capital | Accumulated Deficit |
Beginning of period, in units (predecessor) (Predecessor) at Dec. 31, 2016 | 352,792,000 | |||
Beginning of period, in units (predecessor) at Dec. 31, 2016 | 352,792,474 | |||
Beginning of period (predecessor) (Predecessor) at Dec. 31, 2016 | $ (2,396,988) | $ 5,386,885 | $ (7,783,873) | |
Net income | Predecessor | 2,397,061 | 0 | 2,397,061 | |
Other | Predecessor | $ (73) | (73) | 0 | |
Cancellation of predecessor equity | Predecessor | (352,792,000) | |||
Cancellation of predecessor equity | Predecessor | $ 0 | (5,386,812) | 5,386,812 | |
End of period, in units (successor) (Predecessor) at Feb. 28, 2017 | 0 | |||
End of period (successor) (Predecessor) at Feb. 28, 2017 | $ 0 | 0 | 0 | |
End of period, in units (predecessor) | Predecessor | 352,792,000 | |||
End of period (predecessor) | Predecessor | $ 0 | $ 5,386,812 | $ (5,386,812) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF EQUITY (SUCCESSOR) (Unaudited) Statement - 1 months ended Mar. 31, 2017 - Successor - USD ($) $ in Thousands | Total | Amount | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | Emergence date grants [Member] | Emergence date grants [Member]Amount | Emergence date grants [Member]Additional Paid-in Capital | Emergence date grants [Member]Accumulated Deficit | Emergence date grants [Member]Total Stockholders’ Equity |
Issuances of successor Class A common stock | 4,000 | 89,230,000 | ||||||||
Issuances of successor Class A common stock | $ 0 | $ 0 | $ 0 | $ 0 | $ 89 | $ 2,021,142 | $ 0 | $ 2,021,231 | ||
Share-based compensation expenses | 0 | 1,135 | 0 | 1,135 | 0 | 13,750 | 0 | 13,750 | ||
Beginning of period (in shares) at Feb. 28, 2017 | 89,229,892 | |||||||||
Beginning of period at Feb. 28, 2017 | 89 | 2,034,892 | 0 | 2,034,981 | ||||||
Net loss | $ (7,256) | 0 | (7,256) | (7,256) | ||||||
Issuances of successor Class A common stock | 4,000 | 89,230,000 | ||||||||
Issuances of successor Class A common stock | 0 | 0 | 0 | 0 | 89 | 2,021,142 | 0 | 2,021,231 | ||
Share-based compensation expenses | 0 | 1,135 | 0 | 1,135 | $ 0 | $ 13,750 | $ 0 | $ 13,750 | ||
Other | 0 | (36) | 0 | (36) | ||||||
End of period (in shares) at Mar. 31, 2017 | 89,234,000 | |||||||||
End of period at Mar. 31, 2017 | $ 2,028,824 | $ 89 | $ 2,035,991 | $ (7,256) | $ 2,028,824 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended |
Mar. 31, 2017 | Feb. 28, 2017 | Mar. 31, 2016 | |
Successor | |||
Cash flow from operating activities: | |||
Net income (loss) | $ (7,256) | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Loss from discontinued operations | 0 | ||
Depreciation, depletion and amortization | 21,362 | ||
Impairment of long-lived assets | 0 | ||
Deferred income taxes | (3,384) | ||
Noncash (gains) losses on oil and natural gas derivatives | 17,741 | ||
Share-based compensation expenses | 4,177 | ||
Amortization and write-off of deferred financing fees | 3 | ||
Losses on sale of assets and other, net | 345 | ||
Reorganization items, net | 0 | ||
Changes in assets and liabilities: | |||
(Increase) decrease in accounts receivable – trade, net | 26,614 | ||
(Increase) decrease in other assets | (2,620) | ||
Increase in restricted cash | 0 | ||
Increase (decrease) in accounts payable and accrued expenses | (43,476) | ||
Increase in other liabilities | 4,187 | ||
Net cash provided by (used in) operating activities – continuing operations | 17,693 | ||
Net cash provided by operating activities – discontinued operations | 0 | ||
Net cash provided by (used in) operating activities | 17,693 | ||
Cash flow from investing activities: | |||
Development of oil and natural gas properties | (20,244) | ||
Purchases of other property and equipment | (2,466) | ||
Proceeds from sale of properties and equipment and other | 326 | ||
Net cash used in investing activities – continuing operations | (22,384) | ||
Net cash used in investing activities – discontinued operations | 0 | ||
Net cash used in investing activities | (22,384) | ||
Cash flow from financing activities: | |||
Proceeds from rights offering, net | 0 | ||
Proceeds from borrowings | 30,000 | ||
Repayments of debt | (96,250) | ||
Payment to holders of claims under the second lien notes | 0 | ||
Other | 17,658 | ||
Net cash provided by (used in) financing activities – continuing operations | (48,592) | ||
Net cash from financing activities – discontinued operations | 0 | ||
Net cash provided by (used in) financing activities | (48,592) | ||
Net increase (decrease) in cash and cash equivalents | (53,283) | ||
Cash and cash equivalents: | |||
Beginning | 54,355 | ||
Ending | 1,072 | $ 54,355 | |
Less cash and cash equivalents of discontinued operations at end of period | 0 | ||
Ending – continuing operations | 1,072 | ||
Predecessor | |||
Cash flow from operating activities: | |||
Net income (loss) | 2,397,061 | $ (1,347,746) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Loss from discontinued operations | 0 | 1,124,819 | |
Depreciation, depletion and amortization | 56,484 | 105,215 | |
Impairment of long-lived assets | 0 | 123,316 | |
Deferred income taxes | (166) | 9,422 | |
Noncash (gains) losses on oil and natural gas derivatives | (104,263) | 225,258 | |
Share-based compensation expenses | 50,255 | 12,425 | |
Amortization and write-off of deferred financing fees | 1,338 | 4,676 | |
Losses on sale of assets and other, net | 1,069 | 2,226 | |
Reorganization items, net | (2,359,364) | 0 | |
Changes in assets and liabilities: | |||
(Increase) decrease in accounts receivable – trade, net | (7,216) | (16,082) | |
(Increase) decrease in other assets | 402 | (8,225) | |
Increase in restricted cash | (80,164) | 0 | |
Increase (decrease) in accounts payable and accrued expenses | 20,949 | (630) | |
Increase in other liabilities | 2,801 | 35,713 | |
Net cash provided by (used in) operating activities – continuing operations | (20,814) | 270,387 | |
Net cash provided by operating activities – discontinued operations | 0 | 20,641 | |
Net cash provided by (used in) operating activities | (20,814) | 291,028 | |
Cash flow from investing activities: | |||
Development of oil and natural gas properties | (50,739) | (70,407) | |
Purchases of other property and equipment | (7,851) | (6,404) | |
Proceeds from sale of properties and equipment and other | (166) | (280) | |
Net cash used in investing activities – continuing operations | (58,756) | (77,091) | |
Net cash used in investing activities – discontinued operations | 0 | (14,330) | |
Net cash used in investing activities | (58,756) | (91,421) | |
Cash flow from financing activities: | |||
Proceeds from rights offering, net | 514,069 | 0 | |
Proceeds from borrowings | 0 | 978,500 | |
Repayments of debt | (1,038,986) | (100,000) | |
Payment to holders of claims under the second lien notes | (30,000) | 0 | |
Other | (6,015) | (20,719) | |
Net cash provided by (used in) financing activities – continuing operations | (560,932) | 857,781 | |
Net cash from financing activities – discontinued operations | 0 | 0 | |
Net cash provided by (used in) financing activities | (560,932) | 857,781 | |
Net increase (decrease) in cash and cash equivalents | (640,502) | 1,057,388 | |
Cash and cash equivalents: | |||
Beginning | $ 54,355 | 694,857 | 2,168 |
Ending | 54,355 | 1,059,556 | |
Less cash and cash equivalents of discontinued operations at end of period | 0 | (7,334) | |
Ending – continuing operations | $ 54,355 | $ 1,052,222 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation When referring to Linn Energy, Inc. (formerly known as Linn Energy, LLC) (“Successor,” “LINN Energy” or the “Company”), the intent is to refer to LINN Energy, a newly formed Delaware corporation, and its consolidated subsidiaries as a whole or on an individual basis, depending on the context in which the statements are made. Linn Energy, Inc. is a successor issuer of Linn Energy, LLC pursuant to Rule 15d‑5 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). When referring to the “Predecessor” in reference to the period prior to the emergence from bankruptcy, the intent is to refer to Linn Energy, LLC, the predecessor that will be dissolved following the effective date of the Plan (as defined below) and resolution of all outstanding claims, and its consolidated subsidiaries as a whole or on an individual basis, depending on the context in which the statements are made. The reference to “Berry” herein refers to Berry Petroleum Company, LLC, which was an indirect 100% wholly owned subsidiary of the Predecessor through February 28, 2017. Berry was deconsolidated effective December 3, 2016 (see Note 4). The reference to “LinnCo” herein refers to LinnCo, LLC, which was an affiliate of the Predecessor. Nature of Business LINN Energy is an independent oil and natural gas company that was formed in February 2017, in connection with the reorganization of the Predecessor. The Predecessor was publicly traded from January 2006 to February 2017. As discussed further in Note 2, on May 11, 2016 (the “Petition Date”), Linn Energy, LLC, certain of its direct and indirect subsidiaries, and LinnCo (collectively, the “LINN Debtors”) and Berry (collectively with the LINN Debtors, the “Debtors”), filed voluntary petitions (“Bankruptcy Petitions”) for relief under Chapter 11 of the U.S. Bankruptcy Code (“Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of Texas (“Bankruptcy Court”). The Debtors’ Chapter 11 cases were administered jointly under the caption In re Linn Energy, LLC, et al., Case No. 16-60040. During the pendency of the Chapter 11 proceedings, the Debtors operated their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. The Company emerged from bankruptcy effective February 28, 2017. The Company’s properties are located in eight operating regions in the United States (“U.S.”), in the Rockies, the Hugoton Basin, the Mid-Continent, east Texas and north Louisiana (“TexLa”), the Permian Basin, California, Michigan/Illinois and south Texas. Principles of Consolidation and Reporting The information reported herein reflects all normal recurring adjustments that are, in the opinion of management, necessary for the fair presentation of the results for the interim periods. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted under Securities and Exchange Commission (“SEC”) rules and regulations; as such, this report should be read in conjunction with the financial statements and notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The results reported in these unaudited condensed consolidated financial statements should not necessarily be taken as indicative of results that may be expected for the entire year. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated upon consolidation. Investments in noncontrolled entities over which the Company exercises significant influence are accounted for under the equity method. Redeemable noncontrolling interests on the condensed consolidated balance sheet as of March 31, 2017, relate to the noncontrolling Class B unitholders of the Company’s subsidiary, Linn Energy Holdco LLC (“Holdco”). See Note 12 and Note 17 for additional information. The condensed consolidated financial statements for previous periods include certain reclassifications that were made to conform to current presentation. In addition, the Company has classified the results of operations and cash flows of Berry as discontinued operations on its condensed consolidated statement of operations and condensed consolidated statement of cash flows for the three months ended March 31, 2016. Such reclassifications have no impact on previously reported net income (loss), unitholders’ deficit or cash flows. Bankruptcy Accounting The condensed consolidated financial statements have been prepared as if the Company will continue as a going concern and reflect the application of Accounting Standards Codification 852 “Reorganizations” (“ASC 852”). ASC 852 requires that the financial statements, for periods subsequent to the Chapter 11 filing, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that are realized or incurred in the bankruptcy proceedings are recorded in “reorganization items, net” on the Company’s condensed consolidated statements of operations. In addition, prepetition unsecured and under-secured obligations that may be impacted by the bankruptcy reorganization process have been classified as “liabilities subject to compromise” on the Company’s condensed consolidated balance sheet at December 31, 2016. These liabilities are reported at the amounts expected to be allowed as claims by the Bankruptcy Court, although they may be settled for less. Upon emergence from bankruptcy on February 28, 2017, the Company adopted fresh start accounting which resulted in the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh start accounting and the effects of the implementation of the plan of reorganization, the condensed consolidated financial statements on or after February 28, 2017, are not comparable with the condensed consolidated financial statements prior to that date. See Note 3 for additional information. Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management of the Company to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amount of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. The estimates that are particularly significant to the financial statements include estimates of the Company’s reserves of oil, natural gas and natural gas liquids (“NGL”), future cash flows from oil and natural gas properties, depreciation, depletion and amortization, asset retirement obligations, certain revenues and operating expenses, fair values of commodity derivatives and fair values of assets acquired and liabilities assumed. In addition, as part of fresh start accounting, the Company made estimates and assumptions related to its reorganization value, liabilities subject to compromise, the fair value of assets and liabilities recorded as a result of the adoption of fresh start accounting and income taxes. As fair value is a market-based measurement, it is determined based on the assumptions that market participants would use. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Such estimates and assumptions are adjusted when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates. Any changes in estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. Recently Issued Accounting Standards In November 2016, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) that is intended to address diversity in the classification and presentation of changes in restricted cash on the statement of cash flows. This ASU will be applied retrospectively as of the date of adoption and is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years (early adoption permitted). The Company is currently evaluating the impact of the adoption of this ASU on its financial statements and related disclosures. The adoption of this ASU is expected to result in the inclusion of restricted cash in the beginning and ending balances of cash on the statements of cash flows and disclosure reconciling cash and cash equivalents presented on the consolidated balance sheets to cash, cash equivalents and restricted cash on the consolidated statements of cash flows. In March 2016, the FASB issued an ASU that is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted this ASU on January 1, 2017. The adoption of this ASU had no impact on the Company’s historical financial statements or related disclosures. In the future, this ASU will result in excess tax benefits, which were previously recorded in equity on the balance sheets and classified as financing activities on the statements of cash flows, being recorded to the statements of operations and classified as operating activities on the statements of cash flows. Additionally, the Company elected to begin accounting for forfeitures as they occur. In February 2016, the FASB issued an ASU that is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet. This ASU will be applied retrospectively as of the date of adoption and is effective for fiscal years beginning after December 15, 2018, and interim periods within those years (early adoption permitted). The Company is currently evaluating the impact of the adoption of this ASU on its financial statements and related disclosures. The Company expects the adoption of this ASU to impact its consolidated balance sheets resulting from an increase in both assets and liabilities related to the Company’s leasing activities. In May 2014, the FASB issued an ASU that is intended to improve and converge the financial reporting requirements for revenue from contracts with customers. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those years (early adoption permitted for fiscal years beginning after December 15, 2016, including interim periods within that year). The Company does not plan to early adopt this ASU. The Company is currently evaluating the impact of the adoption of this ASU on its financial statements and related disclosures. The Company expects to use the cumulative-effect transition method, has completed an initial review of its contracts and is developing accounting policies to address the provisions of the ASU, but has not finalized any estimates of the potential impacts. |
Emergence From Voluntary Reorga
Emergence From Voluntary Reorganization Under Chapter 11 | 3 Months Ended |
Mar. 31, 2017 | |
Emergence From Voluntary Reorganization Under Chapter 11 [Abstract] | |
Emergence From Voluntary Reorganization Under Chapter 11 | Emergence From Voluntary Reorganization Under Chapter 11 On the Petition Date, the Debtors filed Bankruptcy Petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Debtors’ Chapter 11 cases were administered jointly under the caption In re Linn Energy, LLC, et al., Case No. 16‑60040. On December 3, 2016, the LINN Debtors filed the Amended Joint Chapter 11 Plan of Reorganization of Linn Energy, LLC and Its Debtor Affiliates Other Than Linn Acquisition Company, LLC (“LAC”) and Berry Petroleum Company, LLC (the “Plan”). The LINN Debtors subsequently filed amended versions of the Plan with the Bankruptcy Court. On December 13, 2016, LAC and Berry filed the Amended Joint Chapter 11 Plan of Reorganization of Linn Acquisition Company, LLC and Berry Petroleum Company, LLC (the “Berry Plan” and together with the Plan, the “Plans”). LAC and Berry subsequently filed amended versions of the Berry Plan with the Bankruptcy Court. On January 27, 2017, the Bankruptcy Court entered an order approving and confirming the Plans (the “Confirmation Order”). On February 28, 2017 (the “Effective Date”), the Debtors satisfied the conditions to effectiveness of the respective Plans, the Plans became effective in accordance with their respective terms and LINN Energy and Berry emerged from bankruptcy as stand-alone, unaffiliated entities. Plan of Reorganization In accordance with the Plan, on the Effective Date: • The Predecessor transferred all of its assets, including equity interests in its subsidiaries, other than LAC and Berry, to Linn Energy Holdco II LLC (“Holdco II”), a newly formed subsidiary of the Predecessor and the borrower under the Credit Agreement (“Successor Credit Facility”) entered into in connection with the reorganization, in exchange for 100% of the equity of Holdco II and the issuance of interests in the Successor Credit Facility to certain of the Predecessor’s creditors in partial satisfaction of their claims (the “Contribution”). Immediately following the Contribution, the Predecessor transferred 100% of the equity interests in Holdco II to the Successor in exchange for approximately $530 million in cash and an amount of equity securities in the Successor not to exceed 49.90% of the outstanding equity interests of the Successor (the “Disposition”), which the Predecessor distributed to certain of its creditors in satisfaction of their claims. Contemporaneously with the reorganization transactions and pursuant to the Plan, (i) LAC assigned all of its rights, title and interest in the membership interests of Berry to Berry Petroleum Corporation, (ii) all of the equity interests in LAC and the Predecessor were canceled and (iii) LAC and the Predecessor commenced liquidation, which is expected to be completed following the resolution of the respective companies’ outstanding claims. • The holders of claims under the Predecessor’s Sixth Amended and Restated Credit Agreement (“Predecessor Credit Facility”) received a full recovery, consisting of a cash paydown and their pro rata share of the $1.7 billion Successor Credit Facility. As a result, all outstanding obligations under the Predecessor Credit Facility were canceled. • Holdco II, as borrower, entered into the Successor Credit Facility with the holders of claims under the Predecessor Credit Facility, as lenders, and Wells Fargo Bank, National Association, as administrative agent, providing for a new reserve-based revolving loan with up to $1.4 billion in borrowing commitments and a new term loan in an original principal amount of $300 million . For additional information about the Successor Credit Facility, see Note 6. • The holders of the Company’s 12.00% senior secured second lien notes due December 2020 (the “Second Lien Notes”) received their pro rata share of (i) 17,678,889 shares of Class A common stock; (ii) certain rights to purchase shares of Class A common stock in the rights offering, as described below; and (iii) $30 million in cash. The holders of the Company’s 6.50% senior notes due May 2019, 6.25% senior notes due November 2019, 8.625% senior notes due 2020, 7.75% senior notes due February 2021 and 6.50% senior notes due September 2021 (collectively, the “Unsecured Notes”) received their pro rata share of (i) 26,724,396 shares of Class A common stock; and (ii) certain rights to purchase shares of Class A common stock in the rights offering (as described below). As a result, all outstanding obligations under the Second Lien Notes and the Unsecured Notes and the indentures governing such obligations were canceled. • The holders of general unsecured claims (other than claims relating to the Second Lien Notes and the Unsecured Notes) against the LINN Debtors (the “LINN Unsecured Claims”) received their pro rata share of cash from two cash distribution pools totaling $40 million , as divided between a $2.3 million cash distribution pool for the payment in full of allowed LINN Unsecured Claims in an amount equal to $2,500 or less (and larger claims for which the holders irrevocably agreed to reduce such claims to $2,500 ), and a $37.7 million cash distribution pool for pro rata distributions to all remaining allowed general LINN Unsecured Claims. As a result, all outstanding LINN Unsecured Claims were fully satisfied, settled, released and discharged as of the Effective Date. • All units of the Predecessor that were issued and outstanding immediately prior to the Effective Date were extinguished without recovery. On the Effective Date, the Successor issued in the aggregate 89,229,892 shares of Class A common stock. No cash was raised from the issuance of the Class A common stock on account of claims held by the Predecessor’s creditors. • The Successor entered into a registration rights agreement with certain parties, pursuant to which the Company agreed to, among other things, file a registration statement with the Securities and Exchange Commission within 60 days of the Effective Date covering the offer and resale of “Registrable Securities” (as defined therein). • By operation of the Plan and the Confirmation Order, the terms of the Predecessor’s board of directors expired as of the Effective Date. The Successor formed a new board of directors, consisting of the Chief Executive Officer of the Predecessor, one director selected by the Successor and five directors selected by a six-person selection committee. Liabilities Subject to Compromise The Predecessor’s condensed consolidated balance sheet as of December 31, 2016, includes amounts classified as “liabilities subject to compromise,” which represent prepetition liabilities that were allowed, or that the Company estimated would be allowed, as claims in its Chapter 11 cases. The following table summarizes the components of liabilities subject to compromise included on the condensed consolidated balance sheet: Predecessor December 31, 2016 (in thousands) Accounts payable and accrued expenses $ 137,692 Accrued interest payable 144,184 Debt 4,023,129 Liabilities subject to compromise $ 4,305,005 Reorganization Items, Net The Company incurred significant costs associated with the reorganization. Reorganization items represent costs and income directly associated with the Chapter 11 proceedings since the Petition Date, and also include adjustments to reflect the carrying value of certain liabilities subject to compromise at their estimated allowed claim amounts, as such adjustments were determined. The following table summarizes the components of reorganization items included on the condensed consolidated statements of operations: Successor Predecessor One Month Ended March 31, 2017 Two Months Ended February 28, 2017 (in thousands) Gain on settlement of liabilities subject to compromise $ — $ 3,724,750 Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement — (1,000,000 ) Fresh start valuation adjustments — (591,525 ) Income tax benefit related to implementation of the Plan — 264,889 Legal and other professional advisory fees (2,570 ) (46,961 ) Terminated contracts — (6,915 ) Other 5 (13,049 ) Reorganization items, net $ (2,565 ) $ 2,331,189 |
Fresh Start Accounting
Fresh Start Accounting | 3 Months Ended |
Mar. 31, 2017 | |
Fresh Start Accounting [Abstract] | |
Fresh Start Accounting | Fresh Start Accounting Upon the Company’s emergence from Chapter 11 bankruptcy, it adopted fresh start accounting in accordance with the provisions of ASC 852 which resulted in the Company becoming a new entity for financial reporting purposes. In accordance with ASC 852, the Company was required to adopt fresh start accounting upon its emergence from Chapter 11 because (i) the holders of existing voting ownership interests of the Predecessor received less than 50% of the voting shares of the Successor and (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the Plan was less than the total of all post-petition liabilities and allowed claims. Upon adoption of fresh start accounting, the reorganization value derived from the enterprise value as disclosed in the Plan was allocated to the Company’s assets and liabilities based on their fair values (except for deferred income taxes) in accordance with ASC 805 “Business Combinations” (“ASC 805”). The amount of deferred income taxes recorded was determined in accordance with ASC 740 “Income Taxes” (“ASC 740”). The Effective Date fair values of the Company’s assets and liabilities differed materially from their recorded values as reflected on the historical balance sheet. The effects of the Plan and the application of fresh start accounting were reflected in the condensed consolidated financial statements as of February 28, 2017, and the related adjustments thereto were recorded on the statement of operations for the two months ended February 28, 2017. As a result of the adoption of fresh start accounting and the effects of the implementation of the Plan, the Company’s condensed consolidated financial statements subsequent to February 28, 2017, are not comparable to its condensed consolidated financial statements prior to February 28, 2017. References to “Successor” relate to the financial position and results of operations of the reorganized Company as of and subsequent to February 28, 2017. References to “Predecessor” relate to the financial position of the Company prior to, and results of operations through and including, February 28, 2017. The Company’s condensed consolidated financial statements and related footnotes are presented with a black line division, which delineates the lack of comparability between amounts presented after February 28, 2017, and amounts presented on or prior to February 28, 2017. The Company’s financial results for future periods following the application of fresh start accounting will be different from historical trends and the differences may be material. Reorganization Value Under ASC 852, the Successor determined a value to be assigned to the equity of the emerging entity as of the date of adoption of fresh start accounting. The Plan confirmed by the Bankruptcy Court estimated an enterprise value of $2.35 billion . The Plan enterprise value was prepared using an asset based methodology, as discussed further below. The enterprise value was then adjusted to determine the equity value of the Successor of approximately $2.03 billion . Adjustments to determine the equity value are presented below (in thousands): Plan confirmed enterprise value $ 2,350,000 Fair value of debt (900,000 ) Fair value of subsequently determined tax attributes 621,486 Fair value of vested Class B units (36,505 ) Value of Successor’s stockholders’ equity $ 2,034,981 The subsequently determined tax attributes were primarily the result of the conversion from a limited liability company to a C corporation and differences in the accounting basis and tax basis of the Company’s oil and natural gas properties as of the Effective Date. The Class B units are incentive interest awards that were granted on the Effective Date by Holdco to certain members of its management (see Note 12), and the associated fair value was recorded as a liability of approximately $7 million in “other accrued liabilities” and temporary equity of approximately $29 million in “redeemable noncontrolling interests” on the condensed consolidated balance sheet at February 28, 2017. The Company's principal assets are its oil and natural gas properties. The fair values of oil and natural gas properties were estimated using valuation techniques consistent with the income approach, converting future cash flows to a single discounted amount. Significant inputs used to determine the fair values of properties include estimates of: (i) reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital rate. 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 underlying commodity prices embedded in the Company’s estimated cash flows are the product of a process that begins with New York Mercantile Exchange (“NYMEX”) forward curve pricing, adjusted for estimated location and quality differentials, as well as other factors that Company management believes will impact realizable prices. See below under “Fresh Start Adjustments” for additional information regarding assumptions used in the valuation of the Company's various other significant assets and liabilities. Condensed Consolidated Balance Sheet The adjustments included in the following fresh start condensed consolidated balance sheet reflect the effects of the transactions contemplated by the Plan and executed by the Company on the Effective Date (reflected in the column “Reorganization Adjustments”) as well as fair value and other required accounting adjustments resulting from the adoption of fresh start accounting (reflected in the column “Fresh Start Adjustments”). The explanatory notes provide additional information with regard to the adjustments recorded, the methods used to determine the fair values and significant assumptions. As of February 28, 2017 Predecessor Reorganization Adjustments (1) Fresh Start Adjustments Successor (in thousands) ASSETS Current assets: Cash and cash equivalents $ 734,166 $ (679,811 ) (2) $ — $ 54,355 Accounts receivable – trade, net 212,099 — (7,808 ) (16) 204,291 Derivative instruments 15,391 — — 15,391 Restricted cash 1,602 80,164 (3) — 81,766 Other current assets 106,426 (15,983 ) (4) 1,780 (17) 92,223 Total current assets 1,069,684 (615,630 ) (6,028 ) 448,026 Noncurrent assets: Oil and natural gas properties (successful efforts method) 13,269,035 — (11,082,258 ) (18) 2,186,777 Less accumulated depletion and amortization (10,044,240 ) — 10,044,240 (18) — 3,224,795 — (1,038,018 ) 2,186,777 Other property and equipment 641,586 — (197,653 ) (19) 443,933 Less accumulated depreciation (230,952 ) — 230,952 (19) — 410,634 — 33,299 443,933 Derivative instruments 4,492 — — 4,492 Deferred income taxes — 264,889 (5) 356,597 (5) 621,486 Other noncurrent assets 15,003 151 (6) 8,139 (20) 23,293 19,495 265,040 364,736 649,271 Total noncurrent assets 3,654,924 265,040 (639,983 ) 3,279,981 Total assets $ 4,724,608 $ (350,590 ) $ (646,011 ) $ 3,728,007 LIABILITIES AND EQUITY (DEFICIT) Current liabilities: Accounts payable and accrued expenses $ 324,585 $ 41,266 (7) $ (2,351 ) (21) $ 363,500 Derivative instruments 7,361 — — 7,361 Current portion of long-term debt, net 1,937,822 (1,912,822 ) (8) — 25,000 Other accrued liabilities 41,251 (1,026 ) (9) 1,104 (22) 41,329 Total current liabilities 2,311,019 (1,872,582 ) (1,247 ) 437,190 Derivative instruments 2,116 — — 2,116 Long-term debt — 875,000 (10) — 875,000 Other noncurrent liabilities 402,776 (167 ) (11) (53,239 ) (23) 349,370 Liabilities subject to compromise 4,301,912 (4,301,912 ) (12) — — As of February 28, 2017 Predecessor Reorganization Adjustments (1) Fresh Start Adjustments Successor Temporary equity: Redeemable noncontrolling interests — 29,350 (13) — 29,350 Stockholders’/unitholders’ equity (deficit): Predecessor units issued and outstanding 5,386,812 (5,386,812 ) (14) — — Predecessor accumulated deficit (7,680,027 ) 2,884,740 (15) 4,795,287 (24) — Successor Class A common stock — 89 (14) — 89 Successor additional paid-in capital — 7,421,704 (14) (5,386,812 ) (24) 2,034,892 Successor retained earnings — — — — Total stockholders’/unitholders’ equity (deficit) (2,293,215 ) 4,919,721 (591,525 ) 2,034,981 Total liabilities and equity (deficit) $ 4,724,608 $ (350,590 ) $ (646,011 ) $ 3,728,007 Reorganization Adjustments: 1) Represent amounts recorded as of the Effective Date for the implementation of the Plan, including, among other items, settlement of the Predecessor’s liabilities subject to compromise, repayment of certain of the Predecessor’s debt, cancellation of the Predecessor’s equity, issuances of the Successor’s Class A common stock, proceeds received from the Successor’s rights offering and issuance of the Successor’s debt. 2) Changes in cash and cash equivalents included the following: (in thousands) Borrowings under the Successor’s revolving loan $ 600,000 Borrowings under the Successor’s term loan 300,000 Proceeds from rights offering 530,019 Removal of restriction on cash balance 1,602 Payment to holders of claims under the Predecessor Credit Facility (1,947,357 ) Payment to holders of claims under the Second Lien Notes (30,000 ) Payment of Berry’s ad valorem taxes (23,366 ) Payment of the rights offering backstop commitment premium (15,900 ) Payment of professional fees (13,043 ) Funding of the professional fees escrow account (41,766 ) Funding of the general unsecured claims cash distribution pool (40,000 ) Changes in cash and cash equivalents $ (679,811 ) 3) Primarily reflects the transfer to restricted cash to fund the Predecessor’s professional fees escrow account and general unsecured claims cash distribution pool. 4) Primarily reflects the write-off of the Predecessor’s deferred financing fees. 5) Reflects deferred tax assets recorded as of the Effective Date as determined in accordance with ASC 740. The deferred tax assets were primarily the result of the conversion from a limited liability company to a C corporation and differences in the accounting basis and tax basis of the Company’s oil and natural gas properties as of the Effective Date. 6) Reflects the capitalization of deferred financing fees related to the Successor’s revolving loan. 7) Net increase in accounts payable and accrued expenses reflects: (in thousands) Recognition of payables for the professional fees escrow account $ 41,766 Recognition of payables for the general unsecured claims cash distribution pool 40,000 Payment of professional fees (17,130 ) Payment of Berry’s ad valorem taxes (23,366 ) Other (4 ) Net increase in accounts payable and accrued expenses $ 41,266 8) Reflects the settlement of the Predecessor Credit Facility through repayment of approximately $1.9 billion , net of the write-off of deferred financing fees and an increase of $25 million for the current portion of the Successor’s term loan. 9) Reflects a decrease of approximately $8 million for the payment of accrued interest on the Predecessor Credit Facility partially offset by an increase of approximately $7 million related to noncash share-based compensation classified as a liability related to the incentive interest awards issued by Holdco to certain members of its management (see Note 12). 10) Reflects borrowings of $900 million under the Successor Credit Facility, which includes a $600 million revolving loan and a $300 million term loan, net of $25 million for the current portion of the Successor’s term loan. 11) Reflects a reduction in deferred tax liabilities as determined in accordance with ASC 740. 12) Settlement of liabilities subject to compromise and the resulting net gain were determined as follows: (in thousands) Accounts payable and accrued expenses $ 134,599 Accrued interest payable 144,184 Debt 4,023,129 Total liabilities subject to compromise 4,301,912 Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement 1,000,000 Funding of the general unsecured claims cash distribution pool (40,000 ) Payment to holders of claims under the Second Lien Notes (30,000 ) Issuance of Class A common stock to creditors (1,507,162 ) Gain on settlement of liabilities subject to compromise $ 3,724,750 13) Reflects redeemable noncontrolling interests classified as temporary equity related to the incentive interest awards issued by Holdco to certain members of its management. See Note 12 and Note 17 for additional information. 14) Net increase in capital accounts reflects: (in thousands) Issuance of Class A common stock to creditors $ 1,507,162 Issuance of Class A common stock pursuant to the rights offering 530,019 Payment of the rights offering backstop commitment premium (15,900 ) Payment of issuance costs (50 ) Share-based compensation expenses 13,750 Cancellation of the Predecessor’s units issued and outstanding 5,386,812 Par value of Class A common stock (89 ) Change in additional paid-in capital 7,421,704 Par value of Class A common stock 89 Predecessor’s units issued and outstanding (5,386,812 ) Net increase in capital accounts $ 2,034,981 See Note 11 for additional information on the issuances of the Successor’s equity. 15) Net decrease in accumulated deficit reflects: (in thousands) Recognition of gain on settlement of liabilities subject to compromise $ 3,724,750 Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement (1,000,000 ) Recognition of professional fees (37,680 ) Write-off of deferred financing fees (16,728 ) Recognition of deferred income taxes 264,889 Total reorganization items, net 2,935,231 Share-based compensation expenses (50,255 ) Other (236 ) Net decrease in accumulated deficit $ 2,884,740 Fresh Start Adjustments: 16) Reflects a change in accounting policy from the entitlements method to the sales method for natural gas production imbalances. 17) Reflects the recognition of intangible assets for the current portion of favorable leases, partially offset by decreases for well equipment inventory and the write-off of historical intangible assets. 18) Reflects a decrease of oil and natural gas properties, based on the methodology discussed above, and the elimination of accumulated depletion and amortization. The following table summarizes the components of oil and natural gas properties as of the Effective Date: Successor Predecessor Fair Value Historical Book Value (in thousands) Proved properties $ 2,186,777 $ 12,258,835 Unproved properties — 1,010,200 2,186,777 13,269,035 Less accumulated depletion and amortization — (10,044,240 ) $ 2,186,777 $ 3,224,795 19) Reflects a decrease of other property and equipment and the elimination of accumulated depreciation. The following table summarizes the components of other property and equipment as of the Effective Date: Successor Predecessor Fair Value Historical Book Value (in thousands) Natural gas plants and pipelines $ 342,924 $ 426,914 Office equipment and furniture 39,211 106,059 Buildings and leasehold improvements 32,817 66,023 Vehicles 16,980 30,760 Land 7,747 3,727 Drilling and other equipment 4,254 8,103 443,933 641,586 Less accumulated depreciation — (230,952 ) $ 443,933 $ 410,634 In estimating the fair value of other property and equipment, the Company used a combination of cost and market approaches. A cost approach was used to value the Company’s natural gas plants and pipelines and other operating assets, based on current replacement costs of the assets less depreciation based on the estimated economic useful lives of the assets and age of the assets. A market approach was used to value the Company’s vehicles and land, using recent transactions of similar assets to determine the fair value from a market participant perspective. 20) Reflects the recognition of intangible assets for the noncurrent portion of favorable leases, as well as increases in equity method investments and carbon credit allowances. Assets and liabilities for out-of-market contracts were valued based on market terms as of February 28, 2017, and will be amortized over the remaining life of the respective lease. The Company’s equity method investments were valued based on a market approach using a market EBITDA multiple. Carbon credit allowances were valued using a market approach based on trading prices for carbon credits on February 28, 2017. 21) Primarily reflects the write-off of deferred rent partially offset by an increase in carbon emissions liabilities. 22) Reflects an increase of the current portion of asset retirement obligations. 23) Primarily reflects a decrease of approximately $49 million for asset retirement obligations and approximately $5 million for deferred rent, partially offset by an increase of approximately $1 million for carbon emissions liabilities. The fair value of asset retirement obligations were estimated using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation include estimates of: (i) plug and abandon costs per well based on existing regulatory requirements; (ii) remaining life per well; (iii) future inflation factors; and (iv) a credit-adjusted risk-free interest rate. Carbon emissions liabilities were valued using a market approach based on trading prices for carbon credits on February 28, 2017. 24) Reflects the cumulative impact of the fresh start accounting adjustments discussed above and the elimination of the Predecessor’s accumulated deficit. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2017 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | Discontinued Operations On December 3, 2016, LINN Energy filed an amended plan of reorganization that excluded Berry (see Note 2). As a result of its loss of control of Berry, LINN Energy concluded that it was appropriate to deconsolidate Berry effective on the aforementioned date. The Company has classified the results of operations and cash flows of Berry as discontinued operations on its condensed consolidated financial statements for the three months ended March 31, 2016 . The following table presents summarized financial results of the Company’s discontinued operations on the consolidated statements of operations: Predecessor Three Months Ended March 31, 2016 (in thousands) Revenues and other $ 91,266 Expenses 1,196,201 Other income and (expenses) (19,886 ) Loss from discontinued operations before income taxes (1,124,821 ) Income tax benefit (2 ) Loss from discontinued operations, net of income taxes $ (1,124,819 ) Transition Services and Separation Agreement On the Effective Date, Berry entered into a Transition Services and Separation Agreement (the “TSSA”) with LINN Energy and certain of its subsidiaries to facilitate the separation of Berry’s operations from LINN Energy’s operations. Pursuant to the TSSA, LINN Energy will continue to provide, or cause to be provided, certain administrative, management, operating, and other services and support to Berry during a transitional period following the Effective Date (the “Transition Services”). Under the TSSA, Berry will reimburse LINN Energy for any and all reasonable, third-party out-of-pocket costs and expenses, without markup, actually incurred by LINN Energy, to the extent documented, in connection with providing the Transition Services. Additionally, Berry paid to LINN Energy a management fee of $6 million per month, prorated for partial months, during the period from the Effective Date through the last day of the second full calendar month after the Effective Date (the “Transition Period”) and will pay $2.7 million per month, prorated for partial months, from the first day following the Transition Period through the last day of the second full calendar month thereafter (the “Accounting Period”). During the Accounting Period, the scope of the Transition Services will be reduced to specified accounting and administrative functions. The Transition Period under the TSSA ended April 30, 2017, and the Accounting Period ends June 30, 2017. |
Oil and Natural Gas Properties
Oil and Natural Gas Properties | 3 Months Ended |
Mar. 31, 2017 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
Oil and Natural Gas Properties | Oil and Natural Gas Properties Oil and Natural Gas Capitalized Costs As a result of the application of fresh start accounting, the Company recorded its oil and natural gas properties at fair value as of the Effective Date. The fair values of oil and natural gas properties are estimated using valuation techniques consistent with the income approach, converting future cash flows to a single discounted amount. Significant inputs used to determine the fair values of proved and unproved properties include estimates of: (i) reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital rate. 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 fair value was estimated using inputs characteristic of a Level 3 fair value measurement. Aggregate capitalized costs related to oil, natural gas and NGL production activities with applicable accumulated depletion and amortization are presented below: Successor Predecessor March 31, 2017 December 31, 2016 (in thousands) Proved properties $ 2,203,022 $ 12,234,099 Unproved properties 871 998,860 2,203,893 13,232,959 Less accumulated depletion and amortization (15,351 ) (9,999,560 ) $ 2,188,542 $ 3,233,399 Impairment of Proved Properties The Company evaluates the impairment of its proved oil and natural gas properties on a field-by-field basis whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The carrying values of proved properties are reduced to fair value when the expected undiscounted future cash flows of proved and risk-adjusted probable and possible reserves are less than net book value. Based on the analysis described above, for the three months ended March 31, 2016 , the Company recorded a noncash impairment charge of approximately $123 million associated with proved oil and natural gas properties in the Mid-Continent region due to a decline in commodity prices, changes in expected capital development and a decline in the Company’s estimates of proved reserves. The carrying values of the impaired proved properties were reduced to fair value, estimated using inputs characteristic of a Level 3 fair value measurement. The impairment charges are included in “impairment of long-lived assets” on the condensed consolidated statement of operations. The Company recorded no impairment charges for the one month ended March 31, 2017 , or the two months ended February 28, 2017. Divestiture – Pending On May 2, 2017, the Company, through certain of its wholly owned subsidiaries, entered into a definitive purchase and sale agreement to sell its interest in properties located in western Wyoming to Jonah Energy LLC for a contract price of approximately $581.5 million , subject to closing adjustments. The sale is anticipated to close in the second quarter of 2017, subject to closing conditions. There can be no assurance that all of the conditions to closing will be satisfied. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following summarizes the Company’s outstanding debt: Successor Predecessor March 31, 2017 December 31, 2016 (in thousands, except percentages) Successor revolving loan (1) $ 540,000 $ — Successor term loan (2) 293,750 — Predecessor credit facility (3) — 1,654,745 Predecessor term loan (3) — 284,241 6.50% senior notes due May 2019 — 562,234 6.25% senior notes due November 2019 — 581,402 8.625% senior notes due April 2020 — 718,596 12.00% senior secured second lien notes due December 2020 — 1,000,000 7.75% senior notes due February 2021 — 779,474 6.50% senior notes due September 2021 — 381,423 Net unamortized deferred financing fees — (1,257 ) Total debt, net 833,750 5,960,858 Less current portion, net (4) (28,125 ) (1,937,729 ) Less liabilities subject to compromise (5) — (4,023,129 ) Long-term debt $ 805,625 $ — (1) Variable interest rate of 4.33% at March 31, 2017 . (2) Variable interest rate of 8.33% at March 31, 2017 . (3) Variable interest rate of 5.50% at December 31, 2016 . (4) At March 31, 2017 , the current portion of long-term debt reflects required payments on the Successor’s term loan in the next twelve months. Due to covenant violations, the Predecessor’s credit facility and term loan were classified as current at December 31, 2016 . (5) The Predecessor’s senior notes and Second Lien Notes were classified as liabilities subject to compromise at December 31, 2016 . On the Effective Date, pursuant to the terms of the Plan, all outstanding amounts under these debt instruments were canceled. Fair Value The Company’s debt is recorded at the carrying amount on the condensed consolidated balance sheets. The carrying amounts of the credit facilities and term loans approximate fair value because the interest rates are variable and reflective of market rates. The Company used a market approach to determine the fair value of the Predecessor’s Second Lien Notes and senior notes using estimates based on prices quoted from third-party financial institutions, which is a Level 2 fair value measurement. Predecessor December 31, 2016 Carrying Value Fair Value (in thousands) Senior secured second lien notes $ 1,000,000 $ 863,750 Senior notes, net 3,023,129 1,179,224 Successor Credit Facility On the Effective Date, pursuant to the terms of the Plan, the Company entered into the Successor Credit Facility with Holdco II as borrower and Wells Fargo Bank, National Association, as administrative agent, providing for: 1) a revolving loan with an initial borrowing base of $1.4 billion and 2) a term loan in an original principal amount of $300 million . As of March 31, 2017 , total borrowings outstanding under the Successor Credit Facility were approximately $834 million , and there was approximately $853 million of remaining available borrowing capacity (which includes a $7 million reduction for outstanding letters of credit). There are no scheduled borrowing base redeterminations until April 1, 2018. After such time and until August 28, 2020, any scheduled redetermination of the borrowing base resulting in a decrease of the borrowing base will cause the borrowing base to be allocated into a conforming revolving loan tranche and a non-conforming revolving loan tranche that, in the aggregate, equal $1.4 billion . Interest on borrowings under the revolving loan is determined by reference to the London Interbank Offered Rate (“LIBOR”) plus an applicable margin of (a) 3.50% per annum in the case of the conforming revolving loan tranche and (b) 5.50% per annum in the case of the non-conforming revolving loan tranche. The revolving loan is not subject to amortization. The conforming revolving loan tranche matures on February 27, 2021, and the non-conforming revolving loan tranche matures on August 28, 2020. The term loan incurs interest at a rate of LIBOR plus 7.50% per annum, amortizes quarterly, and matures on February 27, 2021. Holdco II has the right to prepay any borrowings under the Successor Credit Facility at any time without a prepayment penalty, other than customary “breakage” costs with respect to eurodollar loans. The obligations under the Successor Credit Facility are secured by mortgages covering approximately 95% of the total value of the proved reserves of the oil and natural gas properties of the Company, and certain equipment and facilities associated therewith, along with liens on substantially all personal property of the Company and are guaranteed by the Company, Linn Energy Holdco LLC and Holdco II’s subsidiaries, subject to customary exceptions. Under the Successor Credit Facility, the Company is required to maintain certain financial covenants including the maintenance of (i) an asset coverage ratio of at least 1.1 to 1.0 , tested on (a) the date of each scheduled borrowing base redetermination commencing with the first scheduled borrowing base redetermination and (b) the date of each additional borrowing base redetermination done in conjunction with an asset sale and (ii) a maximum total net debt to last twelve months EBITDAX ratio of 6.75 to 1.0 for March 31, 2018 through December 31, 2018, 6.5 to 1.0 for March 31, 2019 through March 31, 2020, and 4.5 to 1.0 thereafter. The Successor Credit Facility also contains customary affirmative and negative covenants, including as to compliance with laws (including environmental laws, ERISA and anti-corruption laws), maintenance of required insurance, delivery of quarterly and annual financial statements, oil and natural gas engineering reports and budgets, maintenance and operation of property (including oil and natural gas properties), restrictions on the incurrence of liens and indebtedness, mergers, consolidations and sales of assets, transactions with affiliates and other customary covenants. The Successor Credit Facility contains customary events of default and remedies for credit facilities of this nature. Failure to comply with the financial and other covenants in the Successor Credit Facility would allow the lenders, subject to customary cure rights, to require immediate payment of all amounts outstanding under the Successor Credit Facility. Predecessor’s Credit Facility, Second Lien Notes and Senior Notes On the Effective Date, pursuant to the terms of the Plan, all outstanding obligations under the Predecessor’s credit facility, Second Lien Notes and senior notes were canceled. See Note 2 for additional information. Predecessor Covenant Violations The Company’s filing of the Bankruptcy Petitions described in Note 2 constituted an event of default that accelerated the obligations under the Predecessor’s credit facility, Second Lien Notes and senior notes. For the two months ended February 28, 2017, contractual interest, which was not recorded, on the Second Lien Notes and senior notes was approximately $57 million . Under the Bankruptcy Code, the creditors under these debt agreements were stayed from taking any action against the Company as a result of an event of default. |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives Commodity Derivatives Historically, the Company has hedged a portion of its forecasted production to reduce exposure to fluctuations in oil and natural gas prices and provide long-term cash flow predictability to manage its business. The current direct NGL hedging market is constrained in terms of price, volume, duration and number of counterparties, which limits the Company’s ability to effectively hedge its NGL production. The Company has also hedged its exposure to differentials in certain operating areas but does not currently hedge exposure to oil or natural gas differentials. The Company has historically entered into commodity hedging transactions primarily in the form of swap contracts that are designed to provide a fixed price, collars and, from time to time, put options that are designed to provide a fixed price floor with the opportunity for upside. The Company enters into these transactions with respect to a portion of its projected production or consumption to provide an economic hedge of the risk related to the future commodity prices received or paid. The Company does not enter into derivative contracts for trading purposes. The Company did not designate any of its contracts as cash flow hedges; therefore, the changes in fair value of these instruments are recorded in current earnings. See Note 8 for fair value disclosures about oil and natural gas commodity derivatives. The following table presents derivative positions for the periods indicated as of March 31, 2017 : April 1 – December 31, 2017 2018 2019 Natural gas positions: Fixed price swaps (NYMEX Henry Hub): Hedged volume (MMMBtu) 101,750 47,815 11,315 Average price ($/MMBtu) $ 3.17 $ 3.01 $ 2.97 Oil positions: Fixed price swaps (NYMEX WTI): Hedged volume (MBbls) 3,300 — — Average price ($/Bbl) $ 52.13 $ — $ — Collars (NYMEX WTI): Hedged volume (MBbls) — 1,825 1,825 Average floor price ($/Bbl) $ — $ 50.00 $ 50.00 Average ceiling price ($/Bbl) $ — $ 55.50 $ 55.50 During the one month ended March 31, 2017 , the Company entered into commodity derivative contracts consisting of natural gas swaps for January 2018 through December 2019. The Company did not enter into any commodity derivative contracts during the two months ended February 28, 2017, or the three months ended March 31, 2016 . The natural gas derivatives are settled based on the closing price of NYMEX Henry Hub natural gas on the last trading day for the delivery month, which occurs on the third business day preceding the delivery month, or the relevant index prices of natural gas published in Inside FERC’s Gas Market Report on the first business day of the delivery month. The oil derivatives are settled based on the average closing price of NYMEX WTI crude oil for each day of the delivery month. Balance Sheet Presentation The Company’s commodity derivatives are presented on a net basis in “derivative instruments” on the condensed consolidated balance sheets. The following table summarizes the fair value of derivatives outstanding on a gross basis: Successor Predecessor March 31, 2017 December 31, 2016 (in thousands) Assets: Commodity derivatives $ 32,949 $ 19,369 Liabilities: Commodity derivatives $ 40,284 $ 113,226 By using derivative instruments to economically hedge exposures to changes in commodity prices, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk. The Company’s counterparties were former participants or affiliates of participants in the Predecessor Credit Facility or are current participants or affiliates of participants in the Successor Credit Facility. The Successor Credit Facility is secured by certain of the Company’s and its subsidiaries’ oil, natural gas and NGL reserves and personal property; therefore, the Company is not required to post any collateral. The Company does not receive collateral from its counterparties. The maximum amount of loss due to credit risk that the Company would incur if its counterparties failed completely to perform according to the terms of the contracts, based on the gross fair value of financial instruments, was approximately $33 million at March 31, 2017 . The Company minimizes the credit risk in derivative instruments by: (i) limiting its exposure to any single counterparty; (ii) entering into derivative instruments only with counterparties that meet the Company’s minimum credit quality standard, or have a guarantee from an affiliate that meets the Company’s minimum credit quality standard; and (iii) monitoring the creditworthiness of the Company’s counterparties on an ongoing basis. In accordance with the Company’s standard practice, its commodity derivatives are subject to counterparty netting under agreements governing such derivatives and therefore the risk of loss due to counterparty nonperformance is somewhat mitigated. Gains and Losses on Derivatives Losses on derivatives were approximately $12 million for the one month ended March 31, 2017 , and gains on derivatives were approximately $93 million and $109 million for the two months ended February 28, 2017, and the three months ended March 31, 2016 , respectively, and are reported on the condensed consolidated statements of operations in “gains (losses) on oil and natural gas derivatives.” For the one month ended March 31, 2017 , the Company received net cash settlements of approximately $6 million and for the two months ended February 28, 2017, the Company paid net cash settlements of approximately $12 million . For the three months ended March 31, 2016, the Company received net cash settlements of approximately $335 million . |
Fair Value Measurements on a Re
Fair Value Measurements on a Recurring Basis | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements on a Recurring Basis | Fair Value Measurements on a Recurring Basis The Company accounts for its commodity derivatives at fair value (see Note 7) on a recurring basis. The Company determines the fair value of its oil and natural gas derivatives utilizing pricing models that use a variety of techniques, including market quotes and pricing analysis. Inputs to the pricing models include publicly available prices and forward price curves generated from a compilation of data gathered from third parties. Company management 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 instruments trade in active markets. Assumed credit risk adjustments, based on published credit ratings and public bond yield spreads, are applied to the Company’s commodity derivatives. Fair Value Hierarchy In accordance with applicable accounting standards, the Company has categorized its financial instruments into a three-level fair value hierarchy based on the priority of inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The following presents the fair value hierarchy for assets and liabilities measured at fair value on a recurring basis: Successor March 31, 2017 Level 2 Netting (1) Total (in thousands) Assets: Commodity derivatives $ 32,949 $ (21,583 ) $ 11,366 Liabilities: Commodity derivatives $ 40,284 $ (21,583 ) $ 18,701 Predecessor December 31, 2016 Level 2 Netting (1) Total (in thousands) Assets: Commodity derivatives $ 19,369 $ (19,369 ) $ — Liabilities: Commodity derivatives $ 113,226 $ (19,369 ) $ 93,857 (1) Represents counterparty netting under agreements governing such derivatives. |
Asset Retirement Obligations
Asset Retirement Obligations | 3 Months Ended |
Mar. 31, 2017 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations The Company has the obligation to plug and abandon oil and natural gas wells and related equipment at the end of production operations. Estimated asset retirement costs are recognized as liabilities with an increase to the carrying amounts of the related long-lived assets when the obligation is incurred. The liabilities are included in “other accrued liabilities” and “other noncurrent liabilities” on the condensed consolidated balance sheets. Accretion expense is included in “depreciation, depletion and amortization” on the condensed consolidated statements of operations. 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) plug and abandon costs per well based on existing regulatory requirements; (ii) remaining life per well; (iii) future inflation factors; and (iv) a credit-adjusted risk-free interest rate. 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 following table presents a reconciliation of the Company’s asset retirement obligations (in thousands): Asset retirement obligations at December 31, 2016 (Predecessor) $ 402,162 Liabilities added from drilling 146 Accretion expense 4,024 Settlements (618 ) Asset retirement obligations at February 28, 2017 (Predecessor) $ 405,714 Fresh start adjustment (1) (48,317 ) Asset retirement obligations at February 28, 2017 (Successor) $ 357,397 Liabilities added from drilling 33 Accretion expense 1,814 Settlements (907 ) Asset retirement obligations at March 31, 2017 (Successor) $ 358,337 (1) As a result of the application of fresh start accounting, the Successor recorded its asset retirement obligations at fair value as of the Effective Date. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies On May 11, 2016, the Debtors filed Bankruptcy Petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Debtors’ Chapter 11 cases were administered jointly under the caption In re Linn Energy, LLC, et al., Case No. 16‑60040. On January 27, 2017, the Bankruptcy Court entered the Confirmation Order. Consummation of the Plan was subject to certain conditions set forth in the Plan. On the Effective Date, all of the conditions were satisfied or waived and the Plan became effective and was implemented in accordance with its terms. The LINN Debtors Chapter 11 cases will remain pending until the final resolution of all outstanding claims. The commencement of the Chapter 11 proceedings automatically stayed certain actions against the Company, including actions to collect prepetition liabilities or to exercise control over the property of the Company’s bankruptcy estates. For certain statewide class action royalty payment disputes, the Company filed notices advising that it had filed for bankruptcy protection and seeking a stay, which was granted. However, the Company is, and will continue to be until the final resolution of all claims, subject to certain contested matters and adversary proceedings stemming from the Chapter 11 proceedings. In March 2017, Wells Fargo Bank, National Association (“Wells Fargo”), the administrative agent under the Predecessor Credit Facility, filed a motion in the Bankruptcy Court seeking payment of post-petition default interest of approximately $31 million . The Company has vigorously disputed that Wells Fargo is entitled to any default interest based on the plain language of the Plan and Confirmation Order. A hearing was held on April 27, 2017, and the parties are awaiting a ruling from the Bankruptcy Court on this matter. The Company is not currently a party to any litigation or pending claims that it believes would have a material adverse effect on its overall business, financial position, results of operations or liquidity; however, cash flow could be significantly impacted in the reporting periods in which such matters are resolved. During the one month ended March 31, 2017 , the two months ended February 28, 2017, and the three months ended March 31, 2016 , the Company made no significant payments to settle any legal, environmental or tax proceedings. The Company regularly analyzes current information and accrues for probable liabilities on the disposition of certain matters as necessary. Liabilities for loss contingencies arising from claims, assessments, litigation or other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. |
Equity (Deficit)
Equity (Deficit) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Equity (Deficit) | Equity (Deficit) Cancellation of Units and Issuance of Class A Common Stock In accordance with the Plan, on the Effective Date: • All units in the Predecessor that were issued and outstanding immediately prior to the Effective Date were extinguished without recovery; • 17,678,889 shares of Class A common stock were issued pro rata to holders of the Second Lien Notes with claims allowed under the Plan; • 26,724,396 shares of Class A common stock were issued pro rata to holders of Unsecured Notes with claims allowed under the Plan; • 471,110 shares of Class A common stock were issued to commitment parties under the Backstop Commitment Agreement in respect of premium due thereunder; • 2,995,691 shares of Class A common stock were issued to commitment parties under the Backstop Commitment Agreement in connection with their backstop obligation thereunder; and • 41,359,806 shares of Class A common stock were issued to participants in the rights offerings extended by the Company to certain holders of claims arising under the Second Lien Notes and the Unsecured Notes (including, in each case, certain of the commitment parties party to the Backstop Commitment Agreement). As of the Effective Date, there were 89,229,892 shares of Class A common stock, par value $0.001 per share, issued and outstanding. Dividends/Distributions Under the Predecessor’s limited liability company agreement, unitholders were entitled to receive a distribution of available cash, which included cash on hand plus borrowings less any reserves established by the Predecessor’s Board of Directors to provide for the proper conduct of the Predecessor’s business (including reserves for future capital expenditures, including drilling, acquisitions and anticipated future credit needs) or to fund distributions, if any, over the next four quarters. In October 2015, the Predecessor’s Board of Directors determined to suspend payment of the Predecessor’s distribution. The Successor currently has no intention of paying cash dividends and any future payment of cash dividends would be subject to the restrictions in the Successor Credit Facility. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation The Company had no equity awards outstanding as of December 31, 2016. In accordance with the Plan, in February 2017, the Company implemented the Linn Energy, Inc. 2017 Omnibus Incentive Plan (the “Omnibus Incentive Plan”) pursuant to which employees and consultants of the Company and its affiliates are eligible to receive stock options, restricted stock, performance awards, other stock-based awards and other cash-based awards. The Committee (as defined in the Omnibus Incentive Plan) has broad authority under the Omnibus Incentive Plan to, among other things: (i) select participants; (ii) determine the types of awards that participants receive and the number of shares that are subject to such awards; and (iii) establish the terms and conditions of awards, including the price (if any) to be paid for the shares or the award. As of the Effective Date, an aggregate of 6,444,381 shares of Class A common stock were reserved for issuance under the Omnibus Incentive Plan (the “Share Reserve”). Additional shares of Class A common stock may be issued in excess of the Share Reserve for the sole purpose of satisfying any conversion of Class B units or Class A‑2 units of Holdco, as applicable, into shares of Class A common stock pursuant to the Limited Liability Company Operating Agreement of Holdco (the “Holdco LLC Agreement”), and the conversion procedures set forth therein. If any stock option or other stock-based award granted under the Omnibus Incentive Plan expires, terminates or is canceled for any reason without having been exercised in full, the number of shares of Class A common stock underlying any unexercised award shall again be available for the purpose of awards under the Omnibus Incentive Plan. If any shares of restricted stock, performance awards or other stock-based awards denominated in shares of Class A common stock awarded under the Omnibus Incentive Plan are forfeited for any reason, the number of forfeited shares shall again be available for purposes of awards under the Omnibus Incentive Plan. Any award under the Omnibus Incentive Plan settled in cash shall not be counted against the maximum share limitation. As is customary in incentive plans of this nature, each share limit and the number and kind of shares available under the Omnibus Incentive Plan and any outstanding awards, as well as the exercise or purchase prices of awards, and performance targets under certain types of performance-based awards, are subject to adjustment in the event of certain reorganizations, mergers, combinations, recapitalizations, stock splits, stock dividends or other similar events that change the number or kind of shares outstanding, and extraordinary dividends or distributions of property to the Company’s stockholders. Restricted Stock Units On the Effective Date, the Company granted to certain employees 2,478,606 restricted stock units (the “Emergence Awards”). The portion of the Share Reserve that does not constitute the Emergence Awards, plus any subsequent awards forfeited before vesting (the “Remaining Share Reserve”), will be fully granted within the 36-month period immediately following the Effective Date (with such 36-month anniversary, the “Final Allocation Date”). If a “Change in Control” (as defined in the Omnibus Incentive Plan) occurs before the Final Allocation Date, the Company will allocate the entire remaining Share Reserve on a fully-vested basis to actively employed employees (pro-rata based upon each such employee’s relative awards) upon the consummation of the Change in Control. In March 2017, the Company granted to certain employees 1,222,420 restricted stock units from the Remaining Share Reserve. Upon a participant’s termination of employment and/or service (as applicable), the Company has the right (but not the obligation) to repurchase all or any portion of the shares of Class A common stock acquired pursuant to an award at a price equal to the fair market value (as determined under the Omnibus Incentive Plan) of the shares of Class A common stock to be repurchased, measured as of the date of the Company’s repurchase notice. Holdco Incentive Interest Plan On the Effective Date, Holdco granted incentive interest awards to certain members of its management in the form of 3,470,051 Class B units, which are intended to qualify as “profits interests” for U.S. income tax purposes. The Class B units vested 25% on the Effective Date and the remaining amount vest ratably over the following three years, subject to meeting a performance condition described in the agreements. Each Class B unit represents a non-voting equity interest in Holdco that entitles the holder to Holdco distributions, after an applicable hurdle amount is met, such that each Class B unit only participates in Holdco’s increase in value following the grant date. In accordance with the Holdco LLC Agreement, the requirements entitling Class B unitholders to Holdco distributions had not been met as of March 31, 2017 . Class B units can be converted at any time by the holder to Class A-2 units of Holdco or Class A common stock of the Company in accordance with the terms of the Holdco LLC Agreement. Accounting for Share-Based Compensation The Company recognizes expense for share-based compensation over the requisite service period in an amount equal to the fair value of share-based awards granted. The fair value of share-based awards, excluding liability awards, is computed at the date of grant and is not remeasured. The fair value of liability awards is remeasured at each reporting date through the settlement date with the change in fair value recognized as compensation expense over that period. The Company has made a policy decision to recognize compensation expense for service-based awards on a straight-line basis over the requisite service period for the entire award. Beginning in 2017, the Company accounts for forfeitures as they occur. The Company’s restricted stock units are equity-classified and its incentive interest awards in the form of Class B units are liability-classified on the condensed consolidated balance sheet. The fair value of the Company’s restricted stock units was determined based on the fair value of the Company’s shares on the date of grant and the fair value of the incentive interest awards in the form of Class B units was determined based on the estimated amount to be owed to settle the awards. Share-Based Compensation Expenses A summary of share-based compensation expenses included on the condensed consolidated statements of operations is presented below: Successor Predecessor One Month Ended March 31, 2017 Two Months Ended February 28, 2017 Three Months Ended March 31, 2016 (in thousands) General and administrative expenses $ 4,177 $ 50,255 $ 9,460 Lease operating expenses — — 2,965 Total share-based compensation expenses $ 4,177 $ 50,255 $ 12,425 Income tax benefit $ 427 $ 5,170 $ 4,591 |
Earnings Per Share_Unit
Earnings Per Share/Unit | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share/Unit | Earnings Per Share/Unit Basic earnings per share/unit is computed by dividing net earnings attributable to stockholders/unitholders by the weighted average number of shares/units outstanding during the period. Diluted earnings per share/unit is computed by adjusting the average number of shares/units outstanding for the dilutive effect, if any, of potential common shares/units. The Company uses the treasury stock method to determine the dilutive effect. The diluted earnings per share/unit calculation excludes approximately 2 million restricted stock units and approximately 3 million Class B units that were anti-dilutive for the one month ended March 31, 2017 , and approximately 1 million unit options and warrants that were anti-dilutive for the three months ended March 31, 2016 . There were no potential common units outstanding during the two months ended February 28, 2017. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Effective February 28, 2017, upon consummation of the Plan, the Successor became a C corporation subject to federal and state income taxes. Prior to the consummation of the Plan, the Predecessor was a limited liability company treated as a partnership for federal and state income tax purposes, with the exception of the state of Texas, in which income tax liabilities and/or benefits of the Company were passed through to its unitholders. Limited liability companies are subject to Texas margin tax. In addition, certain of the Predecessor’s subsidiaries were C corporations subject to federal and state income taxes. As such, with the exception of the state of Texas and certain subsidiaries, the Predecessor did not directly pay federal and state income taxes and recognition was not given to federal and state income taxes for the operations of the Predecessor. The effective income tax rates were 31.81% , (0.01)% and (4.82)% for the one month ended March 31, 2017 , the two months ended February 28, 2017, and the three months ended March 31, 2016 , respectively. The deferred tax effects of the Company’s change to a C corporation are included in income from continuing operations for the two months ended February 28, 2017. Amounts recognized as income taxes are included in “income tax expense (benefit)” on the condensed consolidated statements of operations. |
Supplemental Disclosures to the
Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows | 3 Months Ended |
Mar. 31, 2017 | |
Supplemental Disclosures to the Condensed Consolidated Statements of Cash Flows [Abstract] | |
Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows | Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows “Other current assets” reported on the condensed consolidated balance sheets include the following: Successor Predecessor March 31, 2017 December 31, 2016 (in thousands) Prepaid expenses $ 67,897 $ 70,116 Inventories 15,053 15,798 Deferred financing fees — 16,809 Other 8,055 3,288 Other current assets $ 91,005 $ 106,011 “Other accrued liabilities” reported on the condensed consolidated balance sheets include the following: Successor Predecessor March 31, 2017 December 31, 2016 (in thousands) Accrued compensation $ 20,862 $ 16,443 Share-based payment liability 10,197 — Asset retirement obligations (current portion) 10,168 9,686 Other 7,602 175 Other accrued liabilities $ 48,829 $ 26,304 Supplemental disclosures to the condensed consolidated statements of cash flows are presented below: Successor Predecessor One Month Ended March 31, 2017 Two Months Ended February 28, 2017 Three Months Ended March 31, 2016 (in thousands) Cash payments for interest, net of amounts capitalized $ 1,458 $ 17,651 $ 23,731 Cash payments for income taxes $ — $ — $ 1,228 Cash payments for reorganization items, net $ 1,286 $ 21,571 $ — Noncash investing activities: Accrued capital expenditures $ 18,670 $ 22,191 $ 25,818 For purposes of the condensed consolidated statements of cash flows, the Company considers all highly liquid short-term investments with original maturities of three months or less to be cash equivalents. At March 31, 2017 , “restricted cash” on the condensed consolidated balance sheet represents cash that will be used to settle certain claims and pay certain professional fees in accordance with the Plan. At December 31, 2016, “restricted cash” on the condensed consolidated balance sheet represents amounts restricted related to utility services providers. In addition, restricted cash of approximately $8 million is included in “other noncurrent assets” on the condensed consolidated balance sheets at both March 31, 2017 , and December 31, 2016, and represents cash deposited by the Company into a separate account designated for asset retirement obligations in accordance with contractual agreements. At March 31, 2017 , and December 31, 2016, net outstanding checks of approximately $18 million and $6 million , respectively, were reclassified and included in “accounts payable and accrued expenses” on the condensed consolidated balance sheets. Net outstanding checks are presented as cash flows from financing activities and included in “other” on the consolidated statements of cash flows. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Berry Petroleum Company, LLC Berry, a former subsidiary of the Predecessor, was deconsolidated effective December 3, 2016 (see Note 4). The employees of Linn Operating, Inc. (“LOI”), a subsidiary of the Predecessor, provided services and support to Berry in accordance with an agency agreement and power of attorney between Berry and LOI. Upon deconsolidation, transactions between the Predecessor and Berry were no longer eliminated in consolidation and were treated as related party transactions. These transactions include, but are not limited to, management fees paid to the Company by Berry. On the Effective Date, Berry emerged from bankruptcy as a stand-alone, unaffiliated entity. For the two months ended February 28, 2017, and the three months ended March 31, 2016 , Berry incurred management fees of approximately $6 million and $23 million , respectively, for services provided by LOI. The Predecessor also had accounts payable due to Berry of approximately $3 million included in “accounts payable and accrued expenses” on the condensed consolidated balance sheet at December 31, 2016. In addition, $25 million due to Berry was included in “liabilities subject to compromise” on the Predecessor’s condensed consolidated balance sheet at December 31, 2016. LinnCo, LLC LinnCo, an affiliate of the Predecessor, was formed on April 30, 2012. All of LinnCo’s common shares were held by the public. As of December 31, 2016, LinnCo had no significant assets or operations other than those related to its interest in the Predecessor and owned approximately 71% of the Predecessor’s then outstanding units. In accordance with the Plan, LinnCo will be dissolved following the resolution of all outstanding claims. The Predecessor had agreed to provide to LinnCo, or to pay on LinnCo’s behalf, any financial, legal, accounting, tax advisory, financial advisory and engineering fees, and other administrative and out-of-pocket expenses incurred by LinnCo, along with any other expenses incurred in connection with any public offering of shares in LinnCo or incurred as a result of being a publicly traded entity. These expenses include costs associated with annual, quarterly and other reports to holders of LinnCo shares, tax return and Form 1099 preparation and distribution, NASDAQ listing fees, printing costs, independent auditor fees and expenses, legal counsel fees and expenses, limited liability company governance and compliance expenses and registrar and transfer agent fees. In addition, the Predecessor had agreed to indemnify LinnCo and its officers and directors for damages suffered or costs incurred (other than income taxes payable by LinnCo) in connection with carrying out LinnCo’s activities. All expenses and costs paid by the Predecessor on LinnCo’s behalf were expensed by the Predecessor. For the two months ended February 28, 2017, LinnCo incurred total general and administrative expenses of approximately $287,000 , including approximately $240,000 related to services provided by the Predecessor. All of the expenses incurred during the two months ended February 28, 2017, had been paid by the Predecessor on LinnCo’s behalf as of February 28, 2017. For the three months ended March 31, 2016 , LinnCo incurred total general and administrative expenses and certain offering costs of approximately $1.7 million , including approximately $603,000 related to services provided by the Predecessor. Of the expenses and costs incurred during the three months ended March 31, 2016 , approximately $918,000 had been paid by the Predecessor on LinnCo’s behalf as of March 31, 2016 . |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 3 Months Ended |
Mar. 31, 2017 | |
Redeemable Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest | Noncontrolling Interests Redeemable noncontrolling interests on the condensed consolidated balance sheet as of March 31, 2017, relate to the noncontrolling Class B unitholders of Holdco. Class B units can be converted at any time by the holder to Class A-2 units of Holdco or Class A common stock of the Company in accordance with the terms of the Holdco LLC Agreement. As of March 31, 2017, the redeemable noncontrolling interests of approximately $29 million presented as temporary equity on the condensed consolidated balance sheet consists solely of the noncash share-based compensation related to the vested portion of such incentive interest awards in the form of Class B units issued to certain members of management (see Note 12). In accordance with the Holdco LLC Agreement, the requirements entitling Class B unitholders to Holdco distributions had not been met as of March 31, 2017, and, therefore, no allocation of net income (loss) was made to the redeemable noncontrolling interests for the one month ended March 31, 2017. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business LINN Energy is an independent oil and natural gas company that was formed in February 2017, in connection with the reorganization of the Predecessor. The Predecessor was publicly traded from January 2006 to February 2017. As discussed further in Note 2, on May 11, 2016 (the “Petition Date”), Linn Energy, LLC, certain of its direct and indirect subsidiaries, and LinnCo (collectively, the “LINN Debtors”) and Berry (collectively with the LINN Debtors, the “Debtors”), filed voluntary petitions (“Bankruptcy Petitions”) for relief under Chapter 11 of the U.S. Bankruptcy Code (“Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of Texas (“Bankruptcy Court”). The Debtors’ Chapter 11 cases were administered jointly under the caption In re Linn Energy, LLC, et al., Case No. 16-60040. During the pendency of the Chapter 11 proceedings, the Debtors operated their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. The Company emerged from bankruptcy effective February 28, 2017. The Company’s properties are located in eight operating regions in the United States (“U.S.”), in the Rockies, the Hugoton Basin, the Mid-Continent, east Texas and north Louisiana (“TexLa”), the Permian Basin, California, Michigan/Illinois and south Texas. |
Principles of Consolidation and Reporting | Principles of Consolidation and Reporting The information reported herein reflects all normal recurring adjustments that are, in the opinion of management, necessary for the fair presentation of the results for the interim periods. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted under Securities and Exchange Commission (“SEC”) rules and regulations; as such, this report should be read in conjunction with the financial statements and notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The results reported in these unaudited condensed consolidated financial statements should not necessarily be taken as indicative of results that may be expected for the entire year. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated upon consolidation. Investments in noncontrolled entities over which the Company exercises significant influence are accounted for under the equity method. Redeemable noncontrolling interests on the condensed consolidated balance sheet as of March 31, 2017, relate to the noncontrolling Class B unitholders of the Company’s subsidiary, Linn Energy Holdco LLC (“Holdco”). See Note 12 and Note 17 for additional information. The condensed consolidated financial statements for previous periods include certain reclassifications that were made to conform to current presentation. In addition, the Company has classified the results of operations and cash flows of Berry as discontinued operations on its condensed consolidated statement of operations and condensed consolidated statement of cash flows for the three months ended March 31, 2016. Such reclassifications have no impact on previously reported net income (loss), unitholders’ deficit or cash flows. |
Use of Estimates | Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management of the Company to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amount of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. The estimates that are particularly significant to the financial statements include estimates of the Company’s reserves of oil, natural gas and natural gas liquids (“NGL”), future cash flows from oil and natural gas properties, depreciation, depletion and amortization, asset retirement obligations, certain revenues and operating expenses, fair values of commodity derivatives and fair values of assets acquired and liabilities assumed. In addition, as part of fresh start accounting, the Company made estimates and assumptions related to its reorganization value, liabilities subject to compromise, the fair value of assets and liabilities recorded as a result of the adoption of fresh start accounting and income taxes. As fair value is a market-based measurement, it is determined based on the assumptions that market participants would use. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Such estimates and assumptions are adjusted when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates. Any changes in estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In November 2016, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) that is intended to address diversity in the classification and presentation of changes in restricted cash on the statement of cash flows. This ASU will be applied retrospectively as of the date of adoption and is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years (early adoption permitted). The Company is currently evaluating the impact of the adoption of this ASU on its financial statements and related disclosures. The adoption of this ASU is expected to result in the inclusion of restricted cash in the beginning and ending balances of cash on the statements of cash flows and disclosure reconciling cash and cash equivalents presented on the consolidated balance sheets to cash, cash equivalents and restricted cash on the consolidated statements of cash flows. In March 2016, the FASB issued an ASU that is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted this ASU on January 1, 2017. The adoption of this ASU had no impact on the Company’s historical financial statements or related disclosures. In the future, this ASU will result in excess tax benefits, which were previously recorded in equity on the balance sheets and classified as financing activities on the statements of cash flows, being recorded to the statements of operations and classified as operating activities on the statements of cash flows. Additionally, the Company elected to begin accounting for forfeitures as they occur. In February 2016, the FASB issued an ASU that is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet. This ASU will be applied retrospectively as of the date of adoption and is effective for fiscal years beginning after December 15, 2018, and interim periods within those years (early adoption permitted). The Company is currently evaluating the impact of the adoption of this ASU on its financial statements and related disclosures. The Company expects the adoption of this ASU to impact its consolidated balance sheets resulting from an increase in both assets and liabilities related to the Company’s leasing activities. In May 2014, the FASB issued an ASU that is intended to improve and converge the financial reporting requirements for revenue from contracts with customers. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those years (early adoption permitted for fiscal years beginning after December 15, 2016, including interim periods within that year). The Company does not plan to early adopt this ASU. The Company is currently evaluating the impact of the adoption of this ASU on its financial statements and related disclosures. The Company expects to use the cumulative-effect transition method, has completed an initial review of its contracts and is developing accounting policies to address the provisions of the ASU, but has not finalized any estimates of the potential impacts. |
Emergence From Voluntary Reor26
Emergence From Voluntary Reorganization Under Chapter 11 (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Emergence From Voluntary Reorganization Under Chapter 11 [Abstract] | |
Schedule of liabilities subject to compromise [Table Text Block] | The following table summarizes the components of liabilities subject to compromise included on the condensed consolidated balance sheet: Predecessor December 31, 2016 (in thousands) Accounts payable and accrued expenses $ 137,692 Accrued interest payable 144,184 Debt 4,023,129 Liabilities subject to compromise $ 4,305,005 |
Schedule of Reorganization Items [Table Text Block] | The following table summarizes the components of reorganization items included on the condensed consolidated statements of operations: Successor Predecessor One Month Ended March 31, 2017 Two Months Ended February 28, 2017 (in thousands) Gain on settlement of liabilities subject to compromise $ — $ 3,724,750 Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement — (1,000,000 ) Fresh start valuation adjustments — (591,525 ) Income tax benefit related to implementation of the Plan — 264,889 Legal and other professional advisory fees (2,570 ) (46,961 ) Terminated contracts — (6,915 ) Other 5 (13,049 ) Reorganization items, net $ (2,565 ) $ 2,331,189 |
Fresh Start Accounting (Tables)
Fresh Start Accounting (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fresh Start Accounting [Abstract] | |
Adjustments to Determine Equity Value | Adjustments to determine the equity value are presented below (in thousands): Plan confirmed enterprise value $ 2,350,000 Fair value of debt (900,000 ) Fair value of subsequently determined tax attributes 621,486 Fair value of vested Class B units (36,505 ) Value of Successor’s stockholders’ equity $ 2,034,981 |
Fresh-Start Adjustments | As of February 28, 2017 Predecessor Reorganization Adjustments (1) Fresh Start Adjustments Successor (in thousands) ASSETS Current assets: Cash and cash equivalents $ 734,166 $ (679,811 ) (2) $ — $ 54,355 Accounts receivable – trade, net 212,099 — (7,808 ) (16) 204,291 Derivative instruments 15,391 — — 15,391 Restricted cash 1,602 80,164 (3) — 81,766 Other current assets 106,426 (15,983 ) (4) 1,780 (17) 92,223 Total current assets 1,069,684 (615,630 ) (6,028 ) 448,026 Noncurrent assets: Oil and natural gas properties (successful efforts method) 13,269,035 — (11,082,258 ) (18) 2,186,777 Less accumulated depletion and amortization (10,044,240 ) — 10,044,240 (18) — 3,224,795 — (1,038,018 ) 2,186,777 Other property and equipment 641,586 — (197,653 ) (19) 443,933 Less accumulated depreciation (230,952 ) — 230,952 (19) — 410,634 — 33,299 443,933 Derivative instruments 4,492 — — 4,492 Deferred income taxes — 264,889 (5) 356,597 (5) 621,486 Other noncurrent assets 15,003 151 (6) 8,139 (20) 23,293 19,495 265,040 364,736 649,271 Total noncurrent assets 3,654,924 265,040 (639,983 ) 3,279,981 Total assets $ 4,724,608 $ (350,590 ) $ (646,011 ) $ 3,728,007 LIABILITIES AND EQUITY (DEFICIT) Current liabilities: Accounts payable and accrued expenses $ 324,585 $ 41,266 (7) $ (2,351 ) (21) $ 363,500 Derivative instruments 7,361 — — 7,361 Current portion of long-term debt, net 1,937,822 (1,912,822 ) (8) — 25,000 Other accrued liabilities 41,251 (1,026 ) (9) 1,104 (22) 41,329 Total current liabilities 2,311,019 (1,872,582 ) (1,247 ) 437,190 Derivative instruments 2,116 — — 2,116 Long-term debt — 875,000 (10) — 875,000 Other noncurrent liabilities 402,776 (167 ) (11) (53,239 ) (23) 349,370 Liabilities subject to compromise 4,301,912 (4,301,912 ) (12) — — As of February 28, 2017 Predecessor Reorganization Adjustments (1) Fresh Start Adjustments Successor Temporary equity: Redeemable noncontrolling interests — 29,350 (13) — 29,350 Stockholders’/unitholders’ equity (deficit): Predecessor units issued and outstanding 5,386,812 (5,386,812 ) (14) — — Predecessor accumulated deficit (7,680,027 ) 2,884,740 (15) 4,795,287 (24) — Successor Class A common stock — 89 (14) — 89 Successor additional paid-in capital — 7,421,704 (14) (5,386,812 ) (24) 2,034,892 Successor retained earnings — — — — Total stockholders’/unitholders’ equity (deficit) (2,293,215 ) 4,919,721 (591,525 ) 2,034,981 Total liabilities and equity (deficit) $ 4,724,608 $ (350,590 ) $ (646,011 ) $ 3,728,007 Reorganization Adjustments: 1) Represent amounts recorded as of the Effective Date for the implementation of the Plan, including, among other items, settlement of the Predecessor’s liabilities subject to compromise, repayment of certain of the Predecessor’s debt, cancellation of the Predecessor’s equity, issuances of the Successor’s Class A common stock, proceeds received from the Successor’s rights offering and issuance of the Successor’s debt. 2) Changes in cash and cash equivalents included the following: (in thousands) Borrowings under the Successor’s revolving loan $ 600,000 Borrowings under the Successor’s term loan 300,000 Proceeds from rights offering 530,019 Removal of restriction on cash balance 1,602 Payment to holders of claims under the Predecessor Credit Facility (1,947,357 ) Payment to holders of claims under the Second Lien Notes (30,000 ) Payment of Berry’s ad valorem taxes (23,366 ) Payment of the rights offering backstop commitment premium (15,900 ) Payment of professional fees (13,043 ) Funding of the professional fees escrow account (41,766 ) Funding of the general unsecured claims cash distribution pool (40,000 ) Changes in cash and cash equivalents $ (679,811 ) 3) Primarily reflects the transfer to restricted cash to fund the Predecessor’s professional fees escrow account and general unsecured claims cash distribution pool. 4) Primarily reflects the write-off of the Predecessor’s deferred financing fees. 5) Reflects deferred tax assets recorded as of the Effective Date as determined in accordance with ASC 740. The deferred tax assets were primarily the result of the conversion from a limited liability company to a C corporation and differences in the accounting basis and tax basis of the Company’s oil and natural gas properties as of the Effective Date. 6) Reflects the capitalization of deferred financing fees related to the Successor’s revolving loan. 7) Net increase in accounts payable and accrued expenses reflects: (in thousands) Recognition of payables for the professional fees escrow account $ 41,766 Recognition of payables for the general unsecured claims cash distribution pool 40,000 Payment of professional fees (17,130 ) Payment of Berry’s ad valorem taxes (23,366 ) Other (4 ) Net increase in accounts payable and accrued expenses $ 41,266 8) Reflects the settlement of the Predecessor Credit Facility through repayment of approximately $1.9 billion , net of the write-off of deferred financing fees and an increase of $25 million for the current portion of the Successor’s term loan. 9) Reflects a decrease of approximately $8 million for the payment of accrued interest on the Predecessor Credit Facility partially offset by an increase of approximately $7 million related to noncash share-based compensation classified as a liability related to the incentive interest awards issued by Holdco to certain members of its management (see Note 12). 10) Reflects borrowings of $900 million under the Successor Credit Facility, which includes a $600 million revolving loan and a $300 million term loan, net of $25 million for the current portion of the Successor’s term loan. 11) Reflects a reduction in deferred tax liabilities as determined in accordance with ASC 740. 12) Settlement of liabilities subject to compromise and the resulting net gain were determined as follows: (in thousands) Accounts payable and accrued expenses $ 134,599 Accrued interest payable 144,184 Debt 4,023,129 Total liabilities subject to compromise 4,301,912 Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement 1,000,000 Funding of the general unsecured claims cash distribution pool (40,000 ) Payment to holders of claims under the Second Lien Notes (30,000 ) Issuance of Class A common stock to creditors (1,507,162 ) Gain on settlement of liabilities subject to compromise $ 3,724,750 13) Reflects redeemable noncontrolling interests classified as temporary equity related to the incentive interest awards issued by Holdco to certain members of its management. See Note 12 and Note 17 for additional information. 14) Net increase in capital accounts reflects: (in thousands) Issuance of Class A common stock to creditors $ 1,507,162 Issuance of Class A common stock pursuant to the rights offering 530,019 Payment of the rights offering backstop commitment premium (15,900 ) Payment of issuance costs (50 ) Share-based compensation expenses 13,750 Cancellation of the Predecessor’s units issued and outstanding 5,386,812 Par value of Class A common stock (89 ) Change in additional paid-in capital 7,421,704 Par value of Class A common stock 89 Predecessor’s units issued and outstanding (5,386,812 ) Net increase in capital accounts $ 2,034,981 See Note 11 for additional information on the issuances of the Successor’s equity. 15) Net decrease in accumulated deficit reflects: (in thousands) Recognition of gain on settlement of liabilities subject to compromise $ 3,724,750 Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement (1,000,000 ) Recognition of professional fees (37,680 ) Write-off of deferred financing fees (16,728 ) Recognition of deferred income taxes 264,889 Total reorganization items, net 2,935,231 Share-based compensation expenses (50,255 ) Other (236 ) Net decrease in accumulated deficit $ 2,884,740 Fresh Start Adjustments: 16) Reflects a change in accounting policy from the entitlements method to the sales method for natural gas production imbalances. 17) Reflects the recognition of intangible assets for the current portion of favorable leases, partially offset by decreases for well equipment inventory and the write-off of historical intangible assets. 18) Reflects a decrease of oil and natural gas properties, based on the methodology discussed above, and the elimination of accumulated depletion and amortization. The following table summarizes the components of oil and natural gas properties as of the Effective Date: Successor Predecessor Fair Value Historical Book Value (in thousands) Proved properties $ 2,186,777 $ 12,258,835 Unproved properties — 1,010,200 2,186,777 13,269,035 Less accumulated depletion and amortization — (10,044,240 ) $ 2,186,777 $ 3,224,795 19) Reflects a decrease of other property and equipment and the elimination of accumulated depreciation. The following table summarizes the components of other property and equipment as of the Effective Date: Successor Predecessor Fair Value Historical Book Value (in thousands) Natural gas plants and pipelines $ 342,924 $ 426,914 Office equipment and furniture 39,211 106,059 Buildings and leasehold improvements 32,817 66,023 Vehicles 16,980 30,760 Land 7,747 3,727 Drilling and other equipment 4,254 8,103 443,933 641,586 Less accumulated depreciation — (230,952 ) $ 443,933 $ 410,634 In estimating the fair value of other property and equipment, the Company used a combination of cost and market approaches. A cost approach was used to value the Company’s natural gas plants and pipelines and other operating assets, based on current replacement costs of the assets less depreciation based on the estimated economic useful lives of the assets and age of the assets. A market approach was used to value the Company’s vehicles and land, using recent transactions of similar assets to determine the fair value from a market participant perspective. 20) Reflects the recognition of intangible assets for the noncurrent portion of favorable leases, as well as increases in equity method investments and carbon credit allowances. Assets and liabilities for out-of-market contracts were valued based on market terms as of February 28, 2017, and will be amortized over the remaining life of the respective lease. The Company’s equity method investments were valued based on a market approach using a market EBITDA multiple. Carbon credit allowances were valued using a market approach based on trading prices for carbon credits on February 28, 2017. 21) Primarily reflects the write-off of deferred rent partially offset by an increase in carbon emissions liabilities. 22) Reflects an increase of the current portion of asset retirement obligations. 23) Primarily reflects a decrease of approximately $49 million for asset retirement obligations and approximately $5 million for deferred rent, partially offset by an increase of approximately $1 million for carbon emissions liabilities. The fair value of asset retirement obligations were estimated using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation include estimates of: (i) plug and abandon costs per well based on existing regulatory requirements; (ii) remaining life per well; (iii) future inflation factors; and (iv) a credit-adjusted risk-free interest rate. Carbon emissions liabilities were valued using a market approach based on trading prices for carbon credits on February 28, 2017. 24) Reflects the cumulative impact of the fresh start accounting adjustments discussed above and the elimination of the Predecessor’s accumulated deficit. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Discontinued Operations [Abstract] | |
Discontinued operations, summarized statements of operations | The following table presents summarized financial results of the Company’s discontinued operations on the consolidated statements of operations: Predecessor Three Months Ended March 31, 2016 (in thousands) Revenues and other $ 91,266 Expenses 1,196,201 Other income and (expenses) (19,886 ) Loss from discontinued operations before income taxes (1,124,821 ) Income tax benefit (2 ) Loss from discontinued operations, net of income taxes $ (1,124,819 ) |
Oil and Natural Gas Properties
Oil and Natural Gas Properties (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
Capitalized Costs Related to Oil, Natural Gas and NGL Production Activities | Aggregate capitalized costs related to oil, natural gas and NGL production activities with applicable accumulated depletion and amortization are presented below: Successor Predecessor March 31, 2017 December 31, 2016 (in thousands) Proved properties $ 2,203,022 $ 12,234,099 Unproved properties 871 998,860 2,203,893 13,232,959 Less accumulated depletion and amortization (15,351 ) (9,999,560 ) $ 2,188,542 $ 3,233,399 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Outstanding Debt | The following summarizes the Company’s outstanding debt: Successor Predecessor March 31, 2017 December 31, 2016 (in thousands, except percentages) Successor revolving loan (1) $ 540,000 $ — Successor term loan (2) 293,750 — Predecessor credit facility (3) — 1,654,745 Predecessor term loan (3) — 284,241 6.50% senior notes due May 2019 — 562,234 6.25% senior notes due November 2019 — 581,402 8.625% senior notes due April 2020 — 718,596 12.00% senior secured second lien notes due December 2020 — 1,000,000 7.75% senior notes due February 2021 — 779,474 6.50% senior notes due September 2021 — 381,423 Net unamortized deferred financing fees — (1,257 ) Total debt, net 833,750 5,960,858 Less current portion, net (4) (28,125 ) (1,937,729 ) Less liabilities subject to compromise (5) — (4,023,129 ) Long-term debt $ 805,625 $ — (1) Variable interest rate of 4.33% at March 31, 2017 . (2) Variable interest rate of 8.33% at March 31, 2017 . (3) Variable interest rate of 5.50% at December 31, 2016 . (4) At March 31, 2017 , the current portion of long-term debt reflects required payments on the Successor’s term loan in the next twelve months. Due to covenant violations, the Predecessor’s credit facility and term loan were classified as current at December 31, 2016 . (5) The Predecessor’s senior notes and Second Lien Notes were classified as liabilities subject to compromise at December 31, 2016 . On the Effective Date, pursuant to the terms of the Plan, all outstanding amounts under these debt instruments were canceled. |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | Predecessor December 31, 2016 Carrying Value Fair Value (in thousands) Senior secured second lien notes $ 1,000,000 $ 863,750 Senior notes, net 3,023,129 1,179,224 |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table presents derivative positions for the periods indicated as of March 31, 2017 : April 1 – December 31, 2017 2018 2019 Natural gas positions: Fixed price swaps (NYMEX Henry Hub): Hedged volume (MMMBtu) 101,750 47,815 11,315 Average price ($/MMBtu) $ 3.17 $ 3.01 $ 2.97 Oil positions: Fixed price swaps (NYMEX WTI): Hedged volume (MBbls) 3,300 — — Average price ($/Bbl) $ 52.13 $ — $ — Collars (NYMEX WTI): Hedged volume (MBbls) — 1,825 1,825 Average floor price ($/Bbl) $ — $ 50.00 $ 50.00 Average ceiling price ($/Bbl) $ — $ 55.50 $ 55.50 |
Fair Value of Derivatives Outstanding on a Gross Basis by Location on the Balance Sheets | The following table summarizes the fair value of derivatives outstanding on a gross basis: Successor Predecessor March 31, 2017 December 31, 2016 (in thousands) Assets: Commodity derivatives $ 32,949 $ 19,369 Liabilities: Commodity derivatives $ 40,284 $ 113,226 |
Fair Value Measurements on a 32
Fair Value Measurements on a Recurring Basis (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring Basis | The following presents the fair value hierarchy for assets and liabilities measured at fair value on a recurring basis: Successor March 31, 2017 Level 2 Netting (1) Total (in thousands) Assets: Commodity derivatives $ 32,949 $ (21,583 ) $ 11,366 Liabilities: Commodity derivatives $ 40,284 $ (21,583 ) $ 18,701 Predecessor December 31, 2016 Level 2 Netting (1) Total (in thousands) Assets: Commodity derivatives $ 19,369 $ (19,369 ) $ — Liabilities: Commodity derivatives $ 113,226 $ (19,369 ) $ 93,857 (1) Represents counterparty netting under agreements governing such derivatives. |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations Reconciliation | The following table presents a reconciliation of the Company’s asset retirement obligations (in thousands): Asset retirement obligations at December 31, 2016 (Predecessor) $ 402,162 Liabilities added from drilling 146 Accretion expense 4,024 Settlements (618 ) Asset retirement obligations at February 28, 2017 (Predecessor) $ 405,714 Fresh start adjustment (1) (48,317 ) Asset retirement obligations at February 28, 2017 (Successor) $ 357,397 Liabilities added from drilling 33 Accretion expense 1,814 Settlements (907 ) Asset retirement obligations at March 31, 2017 (Successor) $ 358,337 (1) As a result of the application of fresh start accounting, the Successor recorded its asset retirement obligations at fair value as of the Effective Date. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share/Unit-Based Compensation | A summary of share-based compensation expenses included on the condensed consolidated statements of operations is presented below: Successor Predecessor One Month Ended March 31, 2017 Two Months Ended February 28, 2017 Three Months Ended March 31, 2016 (in thousands) General and administrative expenses $ 4,177 $ 50,255 $ 9,460 Lease operating expenses — — 2,965 Total share-based compensation expenses $ 4,177 $ 50,255 $ 12,425 Income tax benefit $ 427 $ 5,170 $ 4,591 |
Supplemental Disclosures to t35
Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Supplemental Disclosures to the Condensed Consolidated Statements of Cash Flows [Abstract] | |
Other Current Assets | “Other current assets” reported on the condensed consolidated balance sheets include the following: Successor Predecessor March 31, 2017 December 31, 2016 (in thousands) Prepaid expenses $ 67,897 $ 70,116 Inventories 15,053 15,798 Deferred financing fees — 16,809 Other 8,055 3,288 Other current assets $ 91,005 $ 106,011 |
Other Current Liabilities | “Other accrued liabilities” reported on the condensed consolidated balance sheets include the following: Successor Predecessor March 31, 2017 December 31, 2016 (in thousands) Accrued compensation $ 20,862 $ 16,443 Share-based payment liability 10,197 — Asset retirement obligations (current portion) 10,168 9,686 Other 7,602 175 Other accrued liabilities $ 48,829 $ 26,304 |
Supplemental Disclosures to the Condensed Consolidated Statements of Cash Flows [Table Text Block] | Supplemental disclosures to the condensed consolidated statements of cash flows are presented below: Successor Predecessor One Month Ended March 31, 2017 Two Months Ended February 28, 2017 Three Months Ended March 31, 2016 (in thousands) Cash payments for interest, net of amounts capitalized $ 1,458 $ 17,651 $ 23,731 Cash payments for income taxes $ — $ — $ 1,228 Cash payments for reorganization items, net $ 1,286 $ 21,571 $ — Noncash investing activities: Accrued capital expenditures $ 18,670 $ 22,191 $ 25,818 |
Emergence From Voluntary Reor36
Emergence From Voluntary Reorganization Under Chapter 11 Plan of Reorganization (Details) - USD ($) | Feb. 28, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||||
Equity exchanged | 100.00% | |||
Percent of equity sold | 50.00% | |||
Net income | 89,229,892 | |||
Cash pool for unsecured claims | $ 40,000,000 | |||
bankruptcy claim amount | 2,500 | |||
Line of Credit | Revolving Line of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 1,700,000,000 | |||
Line of Credit Facility, Current Borrowing Capacity | 1,400,000,000 | |||
Line of Credit | Term loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Loans Payable | $ 300,000,000 | |||
Senior Secured Notes [Member] | Senior Secured Second Lien Notes Due 2020 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||
Net income | 17,678,889 | |||
Repayments of Long-term Debt | $ 30,000,000 | |||
Senior Notes [Member] | Senior Notes Due May 2019 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | |||
Senior Notes [Member] | Senior Notes Due November 2019 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 6.25% | |||
Net income | 26,724,396 | |||
Senior Notes [Member] | Senior Notes Due April 2020 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 8.625% | |||
Senior Notes [Member] | Senior Notes Due February 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 7.75% | |||
Senior Notes [Member] | Senior Notes Due September 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | |||
claims under $2,500 [Member] | ||||
Debt Instrument [Line Items] | ||||
Cash pool for unsecured claims | $ 2,300,000 | |||
claims over $2,500 [Member] | ||||
Debt Instrument [Line Items] | ||||
Cash pool for unsecured claims | 37,700,000 | |||
Successor | ||||
Debt Instrument [Line Items] | ||||
Repayments of Long-term Debt | $ 96,250,000 | |||
Successor | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Current Borrowing Capacity | [1] | $ 1,400,000,000 | ||
Rights offering [Member] | Successor | ||||
Debt Instrument [Line Items] | ||||
Par value of Class A common stock | $ 530,000,000 | |||
Net income | 41,359,806 | |||
[1] | Variable interest rate of 4.33% at March 31, 2017. |
Emergence From Voluntary Reor37
Emergence From Voluntary Reorganization Under Chapter 11 Reorganization (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | ||
Mar. 31, 2017 | Feb. 28, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | ||
Predecessor | |||||
Liabilities Subject to Compromise | |||||
Accounts payable and accrued expenses | $ 134,599 | $ 137,692 | |||
Accrued interest payable | 144,184 | 144,184 | |||
Debt | 4,023,129 | 4,023,129 | [1] | ||
Liabilities subject to compromise | 4,301,912 | $ 4,305,005 | |||
Reorganization Items | |||||
Gain on settlement of liabilities subject to compromise | 3,724,750 | ||||
Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement | (1,000,000) | ||||
Fresh start valuation adjustments | (591,525) | ||||
Debtor Reorganization Items, Deferred Income Taxes | 264,889 | ||||
Legal and other professional advisory fees | (46,961) | ||||
Terminated contracts | (6,915) | ||||
Other | (13,049) | ||||
Total reorganization items, net | $ 2,331,189 | $ 0 | |||
Successor | |||||
Liabilities Subject to Compromise | |||||
Debt | $ 0 | ||||
Liabilities subject to compromise | 0 | ||||
Reorganization Items | |||||
Gain on settlement of liabilities subject to compromise | 0 | ||||
Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement | 0 | ||||
Fresh start valuation adjustments | 0 | ||||
Legal and other professional advisory fees | (2,570) | ||||
Terminated contracts | 0 | ||||
Other | 5 | ||||
Total reorganization items, net | $ (2,565) | ||||
[1] | The Predecessor’s senior notes and Second Lien Notes were classified as liabilities subject to compromise at December 31, 2016. |
Fresh Start Accounting Fresh St
Fresh Start Accounting Fresh Start Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Feb. 28, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | |
Predecessor | |||||
Current assets: | |||||
Cash and cash equivalents | $ 734,166 | ||||
Cash and cash equivalents | 54,355 | $ 694,857 | $ 1,052,222 | ||
Accounts receivable – trade, net | 212,099 | ||||
Accounts receivable – trade, net | 198,064 | ||||
Derivative instruments | 15,391 | 0 | |||
Restricted cash | 1,602 | ||||
Restricted cash | 1,602 | ||||
Other current assets | 106,426 | ||||
Other current assets | 106,011 | ||||
Total current assets | 1,069,684 | ||||
Total current assets | 1,000,534 | ||||
Noncurrent assets: | |||||
Oil and natural gas properties (successful efforts method) | 13,269,035 | 13,232,959 | |||
Less accumulated depletion and amortization | (10,044,240) | (9,999,560) | |||
Oil and natural gas properties, successful efforts method, net | 3,224,795 | 3,233,399 | |||
Other property and equipment | 641,586 | ||||
Other property and equipment | 636,487 | ||||
Less accumulated depreciation | 230,952 | ||||
Less accumulated depreciation | (224,547) | ||||
Other property and equipment, net | 410,634 | ||||
Other property and equipment, net | 411,940 | ||||
Derivative instruments | 4,492 | 0 | |||
Deferred income taxes | 0 | ||||
Deferred income taxes | 0 | ||||
Other noncurrent assets | 15,003 | ||||
Other noncurrent assets | 14,718 | ||||
Noncurrent assets, excluding property, total | 19,495 | ||||
Noncurrent assets, excluding property, total | 14,718 | ||||
Total noncurrent assets | 3,654,924 | 3,660,057 | |||
Total assets | 4,724,608 | ||||
Total assets | 4,660,591 | ||||
Current liabilities: | |||||
Accounts payable and accrued expenses | 324,585 | ||||
Accounts payable and accrued expenses | 295,077 | ||||
Derivative instruments | 7,361 | 82,508 | |||
Current portion of long-term debt, net | 1,937,822 | ||||
Current portion of long-term debt, net | [1] | 1,937,729 | |||
Other accrued liabilities | 41,251 | ||||
Other accrued liabilities | 26,304 | ||||
Total current liabilities | 2,311,019 | ||||
Total current liabilities | 2,341,618 | ||||
Derivative instruments | 2,116 | 11,349 | |||
Long-term debt | 0 | ||||
Long-term debt | 0 | ||||
Other noncurrent liabilities | 402,776 | ||||
Other noncurrent liabilities | 399,607 | ||||
Liabilities subject to compromise | 4,301,912 | ||||
Liabilities subject to compromise | 4,301,912 | 4,305,005 | |||
Redeemable noncontrolling interests | 0 | 0 | |||
Stockholders’/unitholders’ equity (deficit): | |||||
Predecessor units issued and outstanding | 5,386,812 | 5,386,885 | |||
Predecessor accumulated deficit | (7,680,027) | (7,783,873) | |||
Successor Class A common stock | 0 | ||||
Successor additional paid-in capital | 0 | ||||
Successor retained earnings | 0 | ||||
Total stockholders’/unitholders’ equity (deficit) | (2,293,215) | ||||
Total liabilities and equity (deficit) | 4,724,608 | ||||
Total liabilities and equity (deficit) | $ 4,660,591 | ||||
Reorganization Adjustments | |||||
Current assets: | |||||
Cash and cash equivalents | (679,811) | ||||
Accounts receivable – trade, net | 0 | ||||
Derivative instruments | 0 | ||||
Restricted cash | 80,164 | ||||
Other current assets | (15,983) | ||||
Total current assets | (615,630) | ||||
Noncurrent assets: | |||||
Oil and natural gas properties (successful efforts method) | 0 | ||||
Less accumulated depletion and amortization | 0 | ||||
Oil and natural gas properties, successful efforts method, net | 0 | ||||
Other property and equipment | 0 | ||||
Less accumulated depreciation | 0 | ||||
Other property and equipment, net | 0 | ||||
Derivative instruments | 0 | ||||
Deferred income taxes | 264,889 | ||||
Other noncurrent assets | 151 | ||||
Noncurrent assets, excluding property, total | 265,040 | ||||
Total noncurrent assets | 265,040 | ||||
Total assets | (350,590) | ||||
Current liabilities: | |||||
Accounts payable and accrued expenses | 41,266 | ||||
Derivative instruments | 0 | ||||
Current portion of long-term debt, net | (1,912,822) | ||||
Other accrued liabilities | (1,026) | ||||
Total current liabilities | (1,872,582) | ||||
Derivative instruments | 0 | ||||
Long-term debt | 875,000 | ||||
Other noncurrent liabilities | (167) | ||||
Liabilities subject to compromise | (4,301,912) | ||||
Redeemable noncontrolling interests | 29,350 | ||||
Stockholders’/unitholders’ equity (deficit): | |||||
Predecessor units issued and outstanding | (5,386,812) | ||||
Predecessor accumulated deficit | 2,884,740 | ||||
Successor Class A common stock | 89 | ||||
Successor additional paid-in capital | 7,421,704 | ||||
Successor retained earnings | 0 | ||||
Total stockholders’/unitholders’ equity (deficit) | 4,919,721 | ||||
Total liabilities and equity (deficit) | (350,590) | ||||
Fresh Start Adjustments | |||||
Current assets: | |||||
Cash and cash equivalents | 0 | ||||
Accounts receivable – trade, net | (7,808) | ||||
Derivative instruments | 0 | ||||
Restricted cash | 0 | ||||
Other current assets | 1,780 | ||||
Total current assets | (6,028) | ||||
Noncurrent assets: | |||||
Oil and natural gas properties (successful efforts method) | (11,082,258) | ||||
Less accumulated depletion and amortization | 10,044,240 | ||||
Oil and natural gas properties, successful efforts method, net | (1,038,018) | ||||
Other property and equipment | (197,653) | ||||
Less accumulated depreciation | 230,952 | ||||
Other property and equipment, net | 33,299 | ||||
Derivative instruments | 0 | ||||
Deferred income taxes | 356,597 | ||||
Other noncurrent assets | 8,139 | ||||
Noncurrent assets, excluding property, total | 364,736 | ||||
Total noncurrent assets | (639,983) | ||||
Total assets | (646,011) | ||||
Current liabilities: | |||||
Accounts payable and accrued expenses | (2,351) | ||||
Derivative instruments | 0 | ||||
Current portion of long-term debt, net | 0 | ||||
Other accrued liabilities | 1,104 | ||||
Total current liabilities | (1,247) | ||||
Derivative instruments | 0 | ||||
Long-term debt | 0 | ||||
Other noncurrent liabilities | (53,239) | ||||
Liabilities subject to compromise | 0 | ||||
Redeemable noncontrolling interests | 0 | ||||
Stockholders’/unitholders’ equity (deficit): | |||||
Predecessor units issued and outstanding | 0 | ||||
Predecessor accumulated deficit | 4,795,287 | ||||
Successor Class A common stock | 0 | ||||
Successor additional paid-in capital | (5,386,812) | ||||
Successor retained earnings | 0 | ||||
Total stockholders’/unitholders’ equity (deficit) | (591,525) | ||||
Total liabilities and equity (deficit) | (646,011) | ||||
Successor | |||||
Current assets: | |||||
Cash and cash equivalents | $ 1,072 | ||||
Cash and cash equivalents | 54,355 | ||||
Accounts receivable – trade, net | 181,034 | ||||
Accounts receivable – trade, net | 204,291 | ||||
Derivative instruments | 2,406 | 15,391 | |||
Restricted cash | 81,766 | ||||
Restricted cash | 81,766 | ||||
Other current assets | 91,005 | ||||
Other current assets | 92,223 | ||||
Total current assets | 357,283 | ||||
Total current assets | 448,026 | ||||
Noncurrent assets: | |||||
Oil and natural gas properties (successful efforts method) | 2,203,893 | 2,186,777 | |||
Less accumulated depletion and amortization | (15,351) | 0 | |||
Oil and natural gas properties, successful efforts method, net | 2,188,542 | 2,186,777 | |||
Other property and equipment | 445,951 | ||||
Other property and equipment | 443,933 | ||||
Less accumulated depreciation | (4,197) | ||||
Less accumulated depreciation | 0 | ||||
Other property and equipment, net | 441,754 | ||||
Other property and equipment, net | 443,933 | ||||
Derivative instruments | 8,960 | 4,492 | |||
Deferred income taxes | 624,704 | ||||
Deferred income taxes | 621,486 | ||||
Other noncurrent assets | 23,352 | ||||
Other noncurrent assets | 23,293 | ||||
Noncurrent assets, excluding property, total | 657,016 | ||||
Noncurrent assets, excluding property, total | 649,271 | ||||
Total noncurrent assets | 3,287,312 | 3,279,981 | |||
Total assets | 3,644,595 | ||||
Total assets | 3,728,007 | ||||
Current liabilities: | |||||
Accounts payable and accrued expenses | 334,160 | ||||
Accounts payable and accrued expenses | 363,500 | ||||
Derivative instruments | 18,701 | 7,361 | |||
Current portion of long-term debt, net | 28,125 | 25,000 | |||
Current portion of long-term debt, net | 25,000 | ||||
Other accrued liabilities | 48,829 | ||||
Other accrued liabilities | 41,329 | ||||
Total current liabilities | 429,815 | ||||
Total current liabilities | 437,190 | ||||
Derivative instruments | 0 | 2,116 | |||
Long-term debt | 805,625 | ||||
Long-term debt | 875,000 | ||||
Other noncurrent liabilities | 350,981 | ||||
Other noncurrent liabilities | 349,370 | ||||
Liabilities subject to compromise | 0 | ||||
Liabilities subject to compromise | 0 | ||||
Redeemable noncontrolling interests | 29,350 | 29,350 | |||
Stockholders’/unitholders’ equity (deficit): | |||||
Predecessor units issued and outstanding | 0 | ||||
Predecessor accumulated deficit | 0 | ||||
Successor Class A common stock | 89 | 89 | |||
Successor additional paid-in capital | 2,035,991 | 2,034,892 | |||
Successor retained earnings | (7,256) | 0 | |||
Total stockholders’/unitholders’ equity (deficit) | 2,034,981 | ||||
Total liabilities and equity (deficit) | $ 3,644,595 | ||||
Total liabilities and equity (deficit) | $ 3,728,007 | ||||
[1] | At March 31, 2017, the current portion of long-term debt reflects required payments on the Successor’s term loan in the next twelve months. Due to covenant violations, the Predecessor’s credit facility and term loan were classified as current at December 31, 2016. |
Fresh Start Accounting Fresh 39
Fresh Start Accounting Fresh Start Accounting (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||
Plan confirmed enterprise value | $ 2,350,000 | |||
Fresh start adjustment, increase (decrease) in asset retirement obligations | 49,000 | |||
Fresh start adjustment, write off of deferred rent | 5,000 | |||
Fresh start adjustments, write off of carbon emissions liabilities | 1,000 | |||
Predecessor | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Current portion of long-term debt, net | [1] | $ 1,937,729 | ||
Reorganization Adjustments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Payment to holders of claims under the Predecessor Credit Facility | 1,947,357 | |||
Current portion of long-term debt, net | (1,912,822) | |||
Increase (decrease) in Accrued Interest Payable | 8,000 | |||
Increase (decrease) in liability for share based compensation | 7,000 | |||
Proceeds from Lines of Credit | 900,000 | |||
Borrowings under the Successor’s revolving loan | 600,000 | |||
Borrowings under the Successor’s term loan | 300,000 | |||
Successor | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Plan confirmed enterprise value | 2,350,000 | |||
Value of Successor’s stockholders’ equity | 2,034,981 | |||
Current portion of long-term debt, net | $ 25,000 | $ 28,125 | ||
[1] | At March 31, 2017, the current portion of long-term debt reflects required payments on the Successor’s term loan in the next twelve months. Due to covenant violations, the Predecessor’s credit facility and term loan were classified as current at December 31, 2016. |
Fresh Start Accounting Fresh 40
Fresh Start Accounting Fresh Start Adjustment Schedules (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Mar. 31, 2017 | Feb. 28, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Adjustments to determine equity value | ||||||
Plan confirmed enterprise value | $ 2,350,000 | $ 2,350,000 | ||||
Reorganization Adjustments | ||||||
Changes in cash and cash equivalents | ||||||
Borrowings under the Successor’s revolving loan | 600,000 | |||||
Borrowings under the Successor’s term loan | 300,000 | |||||
Proceeds from rights offering | 530,019 | |||||
Removal of restriction on cash balance | (1,602) | |||||
Payment to holders of claims under the Predecessor Credit Facility | 1,947,357 | |||||
Payment to holders of claims under the Second Lien Notes | 30,000 | |||||
Payment of Berry’s ad valorem taxes | (23,366) | |||||
Payment of the rights offering backstop commitment premium | 15,900 | |||||
Payment of professional fees | 13,043 | |||||
Funding of the professional fees escrow account | 41,766 | |||||
Funding of the general unsecured claims cash distribution pool | 40,000 | |||||
Changes in cash and cash equivalents | 679,811 | |||||
Increase in accounts payable and accrued expenses | ||||||
Recognition of payables for the professional fees escrow account | 41,766 | |||||
Recognition of payables for the general unsecured claims cash distribution pool | 40,000 | |||||
Payment of professional fees | (17,130) | |||||
Payment of Berry’s ad valorem taxes | (23,366) | |||||
Other | (4) | |||||
Total | 41,266 | |||||
Settlement of liabilities subject to compromise | ||||||
Liabilities subject to compromise | (4,301,912) | (4,301,912) | ||||
Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement | (1,000,000) | |||||
Funding of the Predecessor’s general unsecured claims cash distribution pool | 40,000 | |||||
Payment to holders of claims under the Second Lien Notes | 30,000 | |||||
Issuance of Class A common stock to creditors | 1,507,162 | |||||
Gain on settlement of liabilities subject to compromise | 3,724,750 | |||||
Increase in capital account | ||||||
Issuance of Class A common stock to creditors | 1,507,162 | |||||
Proceeds from rights offering | 530,019 | |||||
Payment of the rights offering backstop commitment premium | 15,900 | |||||
Payment of issuance costs | (50) | |||||
Share-based compensation expenses | 50,255 | |||||
Par value of Class A common stock | (89) | |||||
Change in additional paid-in capital | 7,421,704 | 7,421,704 | ||||
Par value of Class A common stock | 89 | |||||
Net increase in capital accounts | 2,034,981 | |||||
Decrease in accumulated deficit | ||||||
Recognition of gain on settlement of liabilities subject to compromise | 3,724,750 | |||||
Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement | (1,000,000) | |||||
Legal and other professional advisory fees | (37,680) | |||||
Write-off of deferred financing fees | (16,728) | |||||
Recognition of deferred income taxes | (264,889) | |||||
Total reorganization items, net | 2,935,231 | |||||
Share-based compensation expenses | (50,255) | |||||
Other | (236) | |||||
Increase (decrease) in retained earnings (accumulated deficit) | 2,884,740 | |||||
Oil and Gas Property [Abstract] | ||||||
Oil and natural gas properties (successful efforts method) | 0 | 0 | ||||
Less accumulated depletion and amortization | 0 | 0 | ||||
Oil and natural gas properties, successful efforts method, net | 0 | 0 | ||||
Successor | ||||||
Adjustments to determine equity value | ||||||
Plan confirmed enterprise value | 2,350,000 | 2,350,000 | ||||
Fair value of debt | (900,000) | (900,000) | ||||
Fair value of subsequently determined tax attributes | 621,486 | 621,486 | ||||
Fair value of vested Class B units | (36,505) | (36,505) | ||||
Value of Successor’s stockholders’ equity | 2,034,981 | 2,034,981 | ||||
Changes in cash and cash equivalents | ||||||
Proceeds from rights offering | $ 0 | |||||
Removal of restriction on cash balance | 0 | |||||
Increase in accounts payable and accrued expenses | ||||||
Total | (43,476) | |||||
Settlement of liabilities subject to compromise | ||||||
Debt | 0 | |||||
Liabilities subject to compromise | 0 | |||||
Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement | 0 | |||||
Gain on settlement of liabilities subject to compromise | 0 | |||||
Increase in capital account | ||||||
Proceeds from rights offering | 0 | |||||
Decrease in accumulated deficit | ||||||
Recognition of gain on settlement of liabilities subject to compromise | 0 | |||||
Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement | 0 | |||||
Legal and other professional advisory fees | (2,570) | |||||
Total reorganization items, net | (2,565) | |||||
Oil and Gas Property [Abstract] | ||||||
Proved properties | 2,186,777 | 2,203,022 | 2,186,777 | |||
Unproved properties | 0 | 871 | 0 | |||
Oil and natural gas properties (successful efforts method) | 2,186,777 | 2,203,893 | 2,186,777 | |||
Less accumulated depletion and amortization | 0 | (15,351) | 0 | |||
Oil and natural gas properties, successful efforts method, net | 2,186,777 | 2,188,542 | 2,186,777 | |||
Postconfirmation property and equipment | ||||||
Natural gas plants and pipelines | 342,924 | 342,924 | ||||
Office equipment and furniture | 39,211 | 39,211 | ||||
Buildings and leasehold improvements | 32,817 | 32,817 | ||||
Vehicles | 16,980 | 16,980 | ||||
Land | 7,747 | 7,747 | ||||
Drilling and other equipment | 4,254 | 4,254 | ||||
Other property and equipment | 443,933 | 443,933 | ||||
Less accumulated depreciation | 0 | 0 | ||||
Other property and equipment, net | 443,933 | 443,933 | ||||
Predecessor | ||||||
Changes in cash and cash equivalents | ||||||
Proceeds from rights offering | 514,069 | $ 0 | ||||
Removal of restriction on cash balance | 80,164 | 0 | ||||
Increase in accounts payable and accrued expenses | ||||||
Total | 20,949 | (630) | ||||
Settlement of liabilities subject to compromise | ||||||
Accounts payable and accrued expenses | 134,599 | 134,599 | $ 137,692 | |||
Accrued interest payable | 144,184 | 144,184 | 144,184 | |||
Debt | 4,023,129 | 4,023,129 | 4,023,129 | [1] | ||
Liabilities subject to compromise | 4,301,912 | 4,301,912 | 4,305,005 | |||
Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement | (1,000,000) | |||||
Gain on settlement of liabilities subject to compromise | 3,724,750 | |||||
Increase in capital account | ||||||
Proceeds from rights offering | 514,069 | 0 | ||||
Cancellation of the Predecessor’s units issued and outstanding | 0 | |||||
Predecessor’s units issued and outstanding | 0 | |||||
Decrease in accumulated deficit | ||||||
Recognition of gain on settlement of liabilities subject to compromise | 3,724,750 | |||||
Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement | (1,000,000) | |||||
Legal and other professional advisory fees | (46,961) | |||||
Total reorganization items, net | 2,331,189 | $ 0 | ||||
Oil and Gas Property [Abstract] | ||||||
Proved properties | 12,258,835 | 12,258,835 | 12,234,099 | |||
Unproved properties | 1,010,200 | 1,010,200 | 998,860 | |||
Oil and natural gas properties (successful efforts method) | 13,269,035 | 13,269,035 | 13,232,959 | |||
Less accumulated depletion and amortization | (10,044,240) | (10,044,240) | (9,999,560) | |||
Oil and natural gas properties, successful efforts method, net | 3,224,795 | 3,224,795 | $ 3,233,399 | |||
Preconfirmation property and equipment | ||||||
Natural gas plants and pipelines | 426,914 | 426,914 | ||||
Office equipment and furniture | 106,059 | 106,059 | ||||
Buildings and leasehold improvements | 66,023 | 66,023 | ||||
Vehicles | 30,760 | 30,760 | ||||
Land | 3,727 | 3,727 | ||||
Drilling and other equipment | 8,103 | 8,103 | ||||
Other property and equipment | 641,586 | 641,586 | ||||
Less accumulated depreciation | 230,952 | 230,952 | ||||
Other property and equipment, net | 410,634 | 410,634 | ||||
Unitholders’ Capital | ||||||
Increase in capital account | ||||||
Share-based compensation expenses | (13,750) | |||||
Decrease in accumulated deficit | ||||||
Share-based compensation expenses | 13,750 | |||||
Unitholders’ Capital | Predecessor | ||||||
Increase in capital account | ||||||
Cancellation of the Predecessor’s units issued and outstanding | (5,386,812) | |||||
Predecessor’s units issued and outstanding | (5,386,812) | |||||
Accumulated Deficit | Reorganization Adjustments | ||||||
Increase in capital account | ||||||
Cancellation of the Predecessor’s units issued and outstanding | 5,386,812 | |||||
Predecessor’s units issued and outstanding | 5,386,812 | |||||
Accumulated Deficit | Successor | ||||||
Increase in capital account | ||||||
Share-based compensation expenses | 0 | |||||
Par value of Class A common stock | 0 | |||||
Par value of Class A common stock | 0 | |||||
Decrease in accumulated deficit | ||||||
Share-based compensation expenses | $ 0 | |||||
Accumulated Deficit | Predecessor | ||||||
Increase in capital account | ||||||
Cancellation of the Predecessor’s units issued and outstanding | 5,386,812 | |||||
Predecessor’s units issued and outstanding | 5,386,812 | |||||
Liability [Member] | Successor | ||||||
Adjustments to determine equity value | ||||||
Fair value of vested Class B units | (7,000) | (7,000) | ||||
Temporary equity [Member] | Successor | ||||||
Adjustments to determine equity value | ||||||
Fair value of vested Class B units | $ (29,000) | $ (29,000) | ||||
[1] | The Predecessor’s senior notes and Second Lien Notes were classified as liabilities subject to compromise at December 31, 2016. |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenues and other | $ 91,266 | |
Expenses | 1,196,201 | |
Other income and (expenses) | (19,886) | |
Loss from discontinued operations before income taxes | (1,124,821) | |
Income tax benefit | (2) | |
Loss from discontinued operations, net of income taxes | $ (1,124,819) | |
May-June 2017 [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Contractual management fee | $ 6,000 | |
March-April 2017 [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Contractual management fee | $ 2,700 |
Oil and Natural Gas Propertie42
Oil and Natural Gas Properties (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | ||
Mar. 31, 2017 | Feb. 28, 2017 | Mar. 31, 2016 | May 02, 2017 | Dec. 31, 2016 | |
Successor | |||||
Capitalized Costs Relating to Oil and Gas Producing Activities, by Geographic Area [Line Items] | |||||
Proved properties | $ 2,203,022 | $ 2,186,777 | |||
Unproved properties | 871 | 0 | |||
Oil and natural gas properties (successful efforts method) | 2,203,893 | 2,186,777 | |||
Less accumulated depletion and amortization | (15,351) | 0 | |||
Oil and natural gas properties, successful efforts method, net | 2,188,542 | 2,186,777 | |||
Impairment of long-lived assets | $ 0 | ||||
Predecessor | |||||
Capitalized Costs Relating to Oil and Gas Producing Activities, by Geographic Area [Line Items] | |||||
Proved properties | 12,258,835 | $ 12,234,099 | |||
Unproved properties | 1,010,200 | 998,860 | |||
Oil and natural gas properties (successful efforts method) | 13,269,035 | 13,232,959 | |||
Less accumulated depletion and amortization | (10,044,240) | (9,999,560) | |||
Oil and natural gas properties, successful efforts method, net | 3,224,795 | $ 3,233,399 | |||
Impairment of long-lived assets | $ 0 | $ 123,316 | |||
Subsequent Event [Member] | |||||
Capitalized Costs Relating to Oil and Gas Producing Activities, by Geographic Area [Line Items] | |||||
Divestiture Contract Price | $ 581,500 |
Debt (Details)
Debt (Details) $ in Thousands | Feb. 28, 2017USD ($) | Mar. 31, 2017USD ($) | Feb. 28, 2017USD ($) | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||||
Contractual Interest Expense on Prepetition Liabilities Not Recognized in Statement of Operations | $ 57,000 | ||||
Loans Payable [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 7.50% | ||||
Line of Credit | Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line Of Credit Facility Collateral Coverage Ratio | 1.1 | ||||
Line Of Credit Facility Portion Of Properties Required To Maintain Mortgages | 100.00% | ||||
Senior Secured Notes [Member] | Senior Secured Second Lien Notes Due 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | ||||
Repayments of Long-term Debt | $ 30,000 | ||||
Senior Notes [Member] | Senior Notes Due September 2021 | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | ||||
Senior Notes [Member] | Senior Notes Due November 2019 | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 6.25% | ||||
Senior Notes [Member] | Senior Notes Due May 2019 | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | ||||
Senior Notes [Member] | Senior Notes Due April 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 8.625% | ||||
Senior Notes [Member] | Senior Notes Due February 2021 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 7.75% | ||||
Loans Payable [Member] | |||||
Debt Instrument [Line Items] | |||||
Loans Payable | $ 300,000 | $ 300,000 | |||
Linn Energy, LLC [Member] | Senior Secured Notes [Member] | Senior Secured Second Lien Notes Due 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | ||||
Linn Energy, LLC [Member] | Senior Notes [Member] | Senior Notes Due September 2021 | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | ||||
Linn Energy, LLC [Member] | Senior Notes [Member] | Senior Notes Due November 2019 | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 6.25% | ||||
Linn Energy, LLC [Member] | Senior Notes [Member] | Senior Notes Due May 2019 | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | ||||
Linn Energy, LLC [Member] | Senior Notes [Member] | Senior Notes Due April 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 8.625% | ||||
Linn Energy, LLC [Member] | Senior Notes [Member] | Senior Notes Due February 2021 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 7.75% | ||||
March 31, 2018 through December 31, 2018 [Member] | Line of Credit | Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt to EBITDAX Ratio | 6.75 | ||||
March 31, 2019 through March 31, 2020 [Member] | Line of Credit | Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt to EBITDAX Ratio | 6.5 | ||||
After March 31, 2020 [Member] | Line of Credit | Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt to EBITDAX Ratio | 4.5 | ||||
Successor | |||||
Debt Instrument [Line Items] | |||||
Repayments of Long-term Debt | $ 96,250 | ||||
Cash payments for interest, net of amounts capitalized | 1,458 | ||||
Successor | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Current Borrowing Capacity | [1] | 1,400,000 | |||
Line of Credit Facility, Remaining Borrowing Capacity | [1] | 853,000 | |||
Letters of Credit Outstanding, Amount | [1] | 7,000 | |||
Successor | Linn Energy, LLC [Member] | |||||
Debt Instrument [Line Items] | |||||
Credit facilities | [1] | 834,000 | |||
Successor | Linn Energy, LLC [Member] | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Credit facilities | [1] | 540,000 | |||
Successor | Linn Energy, LLC [Member] | Loans Payable [Member] | |||||
Debt Instrument [Line Items] | |||||
Term Loan | [2] | $ 293,750 | |||
Conforming [Member] | Credit Facility | London Interbank Offered Rate (LIBOR) [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 3.50% | ||||
Non-Conforming [Member] [Member] | Credit Facility | London Interbank Offered Rate (LIBOR) [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 5.50% | ||||
[1] | Variable interest rate of 4.33% at March 31, 2017. | ||||
[2] | Variable interest rate of 8.33% at March 31, 2017. |
Debt Schedule of Long Term Debt
Debt Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Feb. 28, 2017 | Dec. 31, 2016 | ||
Debt Instrument [Line Items] | |||||
Senior notes, net | $ 3,023,129 | ||||
Senior secured second lien notes | $ 1,000,000 | ||||
Linn Energy, LLC [Member] | Line of Credit | Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Interest Rate at Period End | 4.33% | 5.50% | |||
Successor | |||||
Debt Instrument [Line Items] | |||||
Total debt, net | $ 833,750 | ||||
Less current portion, net | (28,125) | $ (25,000) | |||
Less liabilities subject to compromise | 0 | ||||
Long-term debt, net | 805,625 | ||||
Successor | Linn Energy, LLC [Member] | |||||
Debt Instrument [Line Items] | |||||
Credit facilities | [1] | 834,000 | |||
Successor | Linn Energy, LLC [Member] | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Credit facilities | [1] | 540,000 | |||
Successor | Linn Energy, LLC [Member] | Loans Payable [Member] | |||||
Debt Instrument [Line Items] | |||||
Term Loan | [2] | $ 293,750 | |||
Line of Credit Facility, Interest Rate at Period End | 8.33% | ||||
Predecessor | |||||
Debt Instrument [Line Items] | |||||
Total debt, net | $ 5,960,858 | ||||
Less current portion, net | [3] | (1,937,729) | |||
Less liabilities subject to compromise | $ (4,023,129) | (4,023,129) | [4] | ||
Long-term debt, net | 0 | ||||
Predecessor | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Net unamortized deferred financing fees (4) | (1,257) | ||||
Predecessor | Linn Energy, LLC [Member] | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Credit facilities | [5] | 1,654,745 | |||
Predecessor | Linn Energy, LLC [Member] | Loans Payable [Member] | |||||
Debt Instrument [Line Items] | |||||
Term Loan | [5] | 284,241 | |||
Predecessor | Linn Energy, LLC [Member] | Senior Notes [Member] | Senior Notes Due May 2019 | |||||
Debt Instrument [Line Items] | |||||
Senior notes, net | 562,234 | ||||
Predecessor | Linn Energy, LLC [Member] | Senior Notes [Member] | Senior Notes Due November 2019 | |||||
Debt Instrument [Line Items] | |||||
Senior notes, net | 581,402 | ||||
Predecessor | Linn Energy, LLC [Member] | Senior Notes [Member] | Senior Notes Due 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior notes, net | 718,596 | ||||
Predecessor | Linn Energy, LLC [Member] | Senior Notes [Member] | Senior Notes Due September 2021 | |||||
Debt Instrument [Line Items] | |||||
Senior notes, net | 381,423 | ||||
Predecessor | Linn Energy, LLC [Member] | Senior Notes [Member] | Senior Notes Due 2021 [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior notes, net | 779,474 | ||||
Predecessor | Linn Energy, LLC [Member] | Senior Secured Notes [Member] | Senior Secured Second Lien Notes Due 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior secured second lien notes | $ 1,000,000 | ||||
[1] | Variable interest rate of 4.33% at March 31, 2017. | ||||
[2] | Variable interest rate of 8.33% at March 31, 2017. | ||||
[3] | At March 31, 2017, the current portion of long-term debt reflects required payments on the Successor’s term loan in the next twelve months. Due to covenant violations, the Predecessor’s credit facility and term loan were classified as current at December 31, 2016. | ||||
[4] | The Predecessor’s senior notes and Second Lien Notes were classified as liabilities subject to compromise at December 31, 2016. | ||||
[5] | Variable interest rate of 5.50% at December 31, 2016. |
Debt Debt Fair Value Disclosure
Debt Debt Fair Value Disclosure (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Carrying Value | |
Senior secured second lien notes | $ 1,000,000 |
Senior notes, net | 3,023,129 |
Fair Value | |
Senior secured second lien notes | 863,750 |
Senior notes, net | $ 1,179,224 |
Derivatives (Commodity Derivati
Derivatives (Commodity Derivatives) (Details) | Mar. 31, 2017MBblsMMMBTU$ / MMBTU$ / bbl |
Year 2017 [Member] | Natural Gas Commodity Contract [Member] | Swap [Member] | |
Derivative [Line Items] | |
Hedged Volume (in energy unit) | MMMBTU | 101,750 |
Average price (in usd per energy unit) | $ / MMBTU | 3.17 |
Year 2017 [Member] | Oil Commodity Contract [Member] | Swap [Member] | |
Derivative [Line Items] | |
Hedged Volume (in energy unit) | MBbls | 3,300 |
Average price (in usd per energy unit) | 52.13 |
Year 2017 [Member] | Oil Commodity Contract [Member] | Curde Oil Sales - Collars [Member] | |
Derivative [Line Items] | |
Hedged Volume (in energy unit) | MBbls | 0 |
Derivative, Floor Price | 0 |
Derivative, Cap Price | 0 |
Year 2018 [Member] | Natural Gas Commodity Contract [Member] | Swap [Member] | |
Derivative [Line Items] | |
Hedged Volume (in energy unit) | MMMBTU | 47,815 |
Average price (in usd per energy unit) | $ / MMBTU | 3.01 |
Year 2018 [Member] | Oil Commodity Contract [Member] | Swap [Member] | |
Derivative [Line Items] | |
Hedged Volume (in energy unit) | MBbls | 0 |
Average price (in usd per energy unit) | 0 |
Year 2018 [Member] | Oil Commodity Contract [Member] | Curde Oil Sales - Collars [Member] | |
Derivative [Line Items] | |
Hedged Volume (in energy unit) | MBbls | 1,825 |
Derivative, Floor Price | 50 |
Derivative, Cap Price | 55.50 |
Year 2019 [Member] | Natural Gas Commodity Contract [Member] | Swap [Member] | |
Derivative [Line Items] | |
Hedged Volume (in energy unit) | MMMBTU | 11,315 |
Average price (in usd per energy unit) | $ / MMBTU | 2.97 |
Year 2019 [Member] | Oil Commodity Contract [Member] | Swap [Member] | |
Derivative [Line Items] | |
Hedged Volume (in energy unit) | MBbls | 0 |
Average price (in usd per energy unit) | 0 |
Year 2019 [Member] | Oil Commodity Contract [Member] | Curde Oil Sales - Collars [Member] | |
Derivative [Line Items] | |
Hedged Volume (in energy unit) | MBbls | 1,825 |
Derivative, Floor Price | 50 |
Derivative, Cap Price | 55.50 |
Derivatives (Balance Sheet Pres
Derivatives (Balance Sheet Presentation) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Assets: | ||
Commodity derivatives | $ 32,949 | $ 19,369 |
Liabilities: | ||
Commodity derivatives | 40,284 | $ 113,226 |
Concentration Risk, Credit Risk, Financial Instrument, Maximum Exposure | $ 33,000 |
Derivatives (Gains (Losses) On
Derivatives (Gains (Losses) On Derivatives) (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended |
Mar. 31, 2017 | Feb. 28, 2017 | Mar. 31, 2016 | |
Successor | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) on oil and natural gas derivatives | $ (11,959) | ||
Derivative, Cash Received on Hedge | $ (6,000) | ||
Predecessor | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) on oil and natural gas derivatives | $ 92,691 | $ 109,453 | |
Derivative, Cash Received on Hedge | $ 12,000 | $ 335,000 |
Fair Value Measurements on a 49
Fair Value Measurements on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | |
Assets: | |||
Commodity derivatives | $ 32,949 | $ 19,369 | |
Commodity derivatives | [1] | (21,583) | (19,369) |
Commodity derivatives | 11,366 | 0 | |
Liabilities: | |||
Commodity derivatives | 40,284 | 113,226 | |
Commodity derivatives | [1] | (21,583) | (19,369) |
Commodity derivatives | $ 18,701 | $ 93,857 | |
[1] | Represents counterparty netting under agreements governing such derivatives. |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Thousands | Feb. 28, 2017 | Mar. 31, 2017 | Feb. 28, 2017 | |
Predecessor | ||||
Recorded Unconditional Purchase Obligation [Line Items] | ||||
Beginning of Period | $ 405,714 | $ 402,162 | ||
Liabilities added from drilling | 146 | |||
Current year accretion expense | 4,024 | |||
Settlements | (618) | |||
End of Period | $ 405,714 | $ 405,714 | ||
Fresh start adjustment | [1] | $ (48,000) | ||
Successor | ||||
Recorded Unconditional Purchase Obligation [Line Items] | ||||
Liabilities added from drilling | 33 | |||
Current year accretion expense | 1,814 | |||
Settlements | (907) | |||
End of Period | $ 358,337 | |||
[1] | As a result of the application of fresh start accounting, the Successor recorded its asset retirement obligations at fair value as of the Effective Date. |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | |
Mar. 31, 2017 | Feb. 28, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Loss Contingency, Damages Sought, Value | $ 31,000 | |||
Payments for Legal Settlements | $ 0 | $ 0 | $ 0 |
Equity (Deficit) Equity Offerin
Equity (Deficit) Equity Offering (Details) - $ / shares | Feb. 28, 2017 | Mar. 31, 2017 |
Schedule of Equity Offerings [Line Items] | ||
Net income | 89,229,892 | |
Common stock par value | $ 0.001 | |
Successor | ||
Schedule of Equity Offerings [Line Items] | ||
Common shares outstanding | 89,229,892 | 89,234,000 |
Common stock par value | $ 0.001 | |
Successor | Unsecured claims [Domain] | ||
Schedule of Equity Offerings [Line Items] | ||
Net income | 26,724,396 | |
Successor | Backstop Commitment Premium [Member] | ||
Schedule of Equity Offerings [Line Items] | ||
Net income | 471,110 | |
Successor | Backstop Commitment Agreement [Member] | ||
Schedule of Equity Offerings [Line Items] | ||
Net income | 2,995,691 | |
Successor | Senior Secured Second Lien Notes Due 2020 [Member] | ||
Schedule of Equity Offerings [Line Items] | ||
Net income | 17,678,889 | |
Successor | Rights offering [Member] | ||
Schedule of Equity Offerings [Line Items] | ||
Net income | 41,359,806 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - shares | Feb. 28, 2017 | Mar. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement, Shares Reserved for Issuance | 6,444,381 | |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 2,478,606 | 1,222,420 |
Class B Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 3,470,051 |
Share-Based Compensation (Compe
Share-Based Compensation (Compensation Expenses) (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended |
Mar. 31, 2017 | Feb. 28, 2017 | Mar. 31, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | |||
Share/unit-based compensation expenses | $ 4,177 | $ 50,255 | $ 12,425 |
Income tax benefit | 427 | 5,170 | 4,591 |
General and administrative expenses | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | |||
Share/unit-based compensation expenses | 4,177 | 50,255 | 9,460 |
Lease operating expenses | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | |||
Share/unit-based compensation expenses | $ 0 | $ 0 | $ 2,965 |
Earnings Per Share_Unit (Detail
Earnings Per Share/Unit (Details) - shares shares in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended |
Mar. 31, 2017 | Feb. 28, 2017 | Mar. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted average anti-dilutive unit equivalents excluded from computation of earnings per unit (in units) | 0 | ||
Restricted Stock Units (RSUs) [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted average anti-dilutive unit equivalents excluded from computation of earnings per unit (in units) | 2,000 | ||
Class B Units [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted average anti-dilutive unit equivalents excluded from computation of earnings per unit (in units) | 3,000 | ||
Unit options and warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted average anti-dilutive unit equivalents excluded from computation of earnings per unit (in units) | 1,000 |
Income Taxes Details (Details)
Income Taxes Details (Details) | 1 Months Ended | 2 Months Ended | 3 Months Ended |
Mar. 31, 2017 | Feb. 28, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Effective Income Tax Rate Reconciliation, Percent | 31.80% | 0.00% | (4.80%) |
Supplemental Disclosures to t57
Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows (Cash Flows) (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended |
Mar. 31, 2017 | Feb. 28, 2017 | Mar. 31, 2016 | |
Predecessor | |||
Schedule of supplemental cash flow disclosures [Line Items] | |||
Cash payments for interest, net of amounts capitalized | $ 17,651 | $ 23,731 | |
Cash payments for income taxes | 0 | 1,228 | |
Cash payments for reorganization items, net | 21,571 | 0 | |
Noncash investing activities: | |||
Accrued capital expenditures | $ 22,191 | $ 25,818 | |
Successor | |||
Schedule of supplemental cash flow disclosures [Line Items] | |||
Cash payments for interest, net of amounts capitalized | $ 1,458 | ||
Cash payments for income taxes | 0 | ||
Cash payments for reorganization items, net | 1,286 | ||
Noncash investing activities: | |||
Accrued capital expenditures | $ 18,670 |
Supplemental Disclosures to t58
Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Successor | ||
Other current assets | ||
Prepaid expenses | $ 67,897 | |
Inventories | 15,053 | |
Deferred financing fees | 0 | |
Other | 8,055 | |
Other current assets | 91,005 | |
Other accrued liabilities | ||
Accrued compensation | 20,862 | |
Share-based payment liability | 10,197 | |
Asset retirement obligations (current portion) | 10,168 | |
Other | 7,602 | |
Other accrued liabilities | 48,829 | |
Restricted Cash | 8,000 | $ 8,000 |
Net Outstanding Checks | $ 18,000 | |
Predecessor | ||
Other current assets | ||
Prepaid expenses | 70,116 | |
Inventories | 15,798 | |
Deferred financing fees | 16,809 | |
Other | 3,288 | |
Other current assets | 106,011 | |
Other accrued liabilities | ||
Accrued compensation | 16,443 | |
Share-based payment liability | 0 | |
Asset retirement obligations (current portion) | 9,686 | |
Other | 175 | |
Other accrued liabilities | 26,304 | |
Net Outstanding Checks | $ 6,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | ||
Feb. 28, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | |
Berry [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Other Revenues from Transactions with Related Party | $ 6,000 | $ 23,000 | ||
LinnCo [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 71.00% | |||
General and administrative expenses | 287 | 1,700 | ||
General and administrative expenses paid on behalf of LinnCo | 918 | |||
Related party transaction, amounts of transaction | $ 240 | $ 603 | ||
Accounts Payable [Member] | Berry [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to Related Parties, Current | $ 3,000 | |||
Liabilities subject to compromise [Member] | Berry [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to Related Parties, Current | $ 25,000 |
Redeemable Noncontrolling Int60
Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Feb. 28, 2017 |
Successor | ||
Redeemable Noncontrolling Interest [Line Items] | ||
Redeemable noncontrolling interests | $ 29,350 | $ 29,350 |