Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 01, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'GeoMet, Inc. | ' |
Entity Central Index Key | '0001352302 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 40,515,020 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Current Assets: | ' | ' |
Cash and cash equivalents | $24,978,808 | $8,108,272 |
Assets related to discontinued operations | 2,833,774 | ' |
Accounts receivable, net of allowance of $0 and $14,744 at June 30, 2014 and December 31, 2013, respectively | 112,794 | 2,900,807 |
Other current assets | 24,921 | 692,740 |
Total current assets | 27,950,297 | 11,701,819 |
Natural gas properties-utilizing the full cost method of accounting: | ' | ' |
Proved natural gas properties | ' | 333,109,974 |
Other property and equipment | ' | 3,158,701 |
Total property and equipment | ' | 336,268,675 |
Less accumulated depreciation, depletion, amortization and impairment of gas properties | ' | -293,939,624 |
Property and equipment-net | ' | 42,329,051 |
Other noncurrent assets: | ' | ' |
Other | ' | 769,384 |
Total other noncurrent assets | ' | 769,384 |
TOTAL ASSETS | 27,950,297 | 54,800,254 |
Current Liabilities: | ' | ' |
Accounts payable | 155,686 | 3,541,770 |
Royalties payable | 115,522 | 3,656,272 |
Accrued liabilities | 17,816 | 1,073,653 |
Liabilities related to discontinued operations | 2,298,769 | ' |
Income tax payable | 709,719 | ' |
Derivative liability-natural gas contracts | ' | 834,151 |
Asset retirement obligations | 669,817 | 265,470 |
Current portion of long-term debt | ' | 71,550,000 |
Total current liabilities | 3,967,329 | 80,921,316 |
Asset retirement obligations | ' | 8,915,407 |
Derivative liability-natural gas contracts | ' | 709,571 |
Other long-term accrued liabilities | ' | 113,434 |
TOTAL LIABILITIES | 3,967,329 | 90,659,728 |
Commitments and contingencies (Note 16) | ' | ' |
Mezzanine equity: | ' | ' |
Series A Convertible Redeemable Preferred Stock-net of offering costs of $1,660,435; redemption amount $63,813,590; $.001 par value; 7,401,832 shares authorized, 6,381,359 and 6,000,571 shares were issued and outstanding at June 30, 2014 and December 31, 2013, respectively | 45,907,692 | 43,404,993 |
Stockholders' Deficit: | ' | ' |
Preferred stock, $0.001 par value-2,598,168 shares authorized, none issued | ' | ' |
Common stock, $0.001 par value-authorized 125,000,000 shares; 40,525,452 issued and 40,515,020 outstanding at June 30, 2014 and 40,662,749 issued and 40,652,317 outstanding at December 31, 2013 | 40,525 | 40,663 |
Treasury stock, at cost-10,432 shares at June 30, 2014 and December 31, 2013 | -94,424 | -94,424 |
Paid-in capital | 185,044,673 | 187,527,716 |
Retained deficit | -206,915,498 | -266,738,422 |
Total stockholders' deficit | -21,924,724 | -79,264,467 |
TOTAL LIABILITIES, MEZZANINE AND STOCKHOLDERS' DEFICIT | $27,950,297 | $54,800,254 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
CONSOLIDATED BALANCE SHEETS | ' | ' |
Accounts receivable, allowance (in dollars) | $0 | $14,744 |
Series A Convertible Redeemable Preferred Stock, offering costs (in dollars) | 1,660,435 | 1,660,435 |
Series A Convertible Redeemable Preferred Stock, redemption amount (in dollars) | $63,813,590 | $63,813,590 |
Series A Convertible Redeemable Preferred Stock, par value (in dollars per share) | $0.00 | $0.00 |
Series A Convertible Redeemable Preferred Stock, shares authorized | 7,401,832 | 7,401,832 |
Series A Convertible Redeemable Preferred Stock, shares issued | 6,381,359 | 6,000,571 |
Series A Convertible Redeemable Preferred Stock, shares outstanding | 6,381,359 | 6,000,571 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 2,598,168 | 2,598,168 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 40,525,452 | 40,662,749 |
Common stock, shares outstanding | 40,515,020 | 40,652,317 |
Treasury stock, shares | 10,432 | 10,432 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Expenses: | ' | ' | ' | ' |
Depreciation, depletion and amortization | ' | $34,639 | $113,817 | $69,011 |
General and administrative | 917,519 | 1,408,521 | 1,947,123 | 2,406,754 |
Lease termination costs | 427,722 | ' | 427,722 | ' |
Restructuring costs | ' | 17,396 | ' | 87,584 |
Total operating expenses | 1,345,241 | 1,460,556 | 2,488,662 | 2,563,349 |
Operating loss | -1,345,241 | -1,460,556 | -2,488,662 | -2,563,349 |
Other expense | -1,669 | -6,697 | -20,203 | -35,345 |
Loss before income taxes from continuing operations | -1,346,910 | -1,467,253 | -2,508,865 | -2,598,694 |
Income tax expense - continuing operations | 6,250 | 6,250 | 12,500 | 12,500 |
Loss from continuing operations | -1,353,160 | -1,473,503 | -2,521,365 | -2,611,194 |
Discontinued operations, net of tax of $709,719 for the three and six months ended June 30, 2014 and $0 for the three and six months ended June 30, 2013 | 60,327,228 | 43,843,152 | 62,344,289 | 39,225,929 |
Net income | 58,974,068 | 42,369,649 | 59,822,924 | 36,614,735 |
Accretion of Series A Convertible Redeemable Preferred Stock | -705,165 | -532,836 | -1,349,909 | -1,026,373 |
Paid-in-kind dividends on Series A Convertible Redeemable Preferred Stock | -552,915 | -1,367,488 | -1,152,790 | -2,443,173 |
Cash dividends paid on Series A Convertible Redeemable Preferred Stock | -490 | -568 | -1,058 | -1,201 |
Net income available to common stockholders | $57,715,498 | $40,468,757 | $57,319,167 | $33,143,988 |
Net income per common share-basic: | ' | ' | ' | ' |
Net loss per common share from continuing operations (in dollars per share) | ($0.07) | ($0.08) | ($0.13) | ($0.15) |
Net income per common share from discontinued operations (in dollars per share) | $1.49 | $1.08 | $1.54 | $0.97 |
Net income per common share-basic (in dollars per share) | $1.42 | $1 | $1.41 | $0.82 |
Net income per common share-diluted: | ' | ' | ' | ' |
Net loss per common share from continuing operations (in dollars per share) | ($0.07) | ($0.08) | ($0.13) | ($0.15) |
Net income per common share from discontinued operations (in dollars per share) | $1.49 | $1.08 | $1.54 | $0.97 |
Net income per common share-diluted (in dollars per share) | $1.42 | $1 | $1.41 | $0.82 |
Weighted average number of common shares: | ' | ' | ' | ' |
Basic (in shares) | 40,515,020 | 40,477,411 | 40,514,561 | 40,467,149 |
Diluted (in shares) | 40,515,020 | 40,477,411 | 40,514,561 | 40,467,149 |
CONSOLIDATED_STATEMENT_OF_OPER
CONSOLIDATED STATEMENT OF OPERATIONS (parenthetical) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Discontinued Operation, Tax Effect of Discontinued Operation | ($709,719) | $0 | ($709,719) | $0 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ' | ' | ' | ' |
Net income | $58,974,068 | $42,369,649 | $59,822,924 | $36,614,735 |
Loss on foreign currency translation adjustment | ' | -10,350 | ' | -9,118 |
Unrealized loss on available for sale securities | ' | -60,472 | ' | -40,409 |
Other comprehensive income | $58,974,068 | $42,298,827 | $59,822,924 | $36,565,208 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Cash flows (used in) provided by operating activities: | ' | ' |
Loss from continuing operations | ($2,521,365) | ($2,611,194) |
Adjustments to reconcile loss from continuing operations to net cash flows used in continuing operating activities: | ' | ' |
Depreciation, depletion and amortization | 113,817 | 69,011 |
Stock-based compensation | 20,575 | 119,374 |
Changes in operating assets and liabilities: | ' | ' |
Other current assets | 391,386 | 279,541 |
Accounts payable | -351,698 | 148,125 |
Other accrued liabilities | 3,020 | 28,608 |
Net cash used in continuing operating activities | -2,344,265 | -1,966,535 |
Income from discontinued operations | 62,344,289 | 39,225,929 |
Adjustments to reconcile Income from discontinued operations to net cash flows (used in) provided by discontinued operating activities: | ' | ' |
Depreciation, depletion and amortization | 715,892 | 2,808,132 |
Amortization of debt issuance costs | 218,357 | 454,340 |
Unrealized losses from the change in market value of open derivative contracts | -1,543,722 | 1,838,088 |
Gain on the sale of gas properties | -61,824,007 | -37,135,611 |
Loss on sale of other assets | 22,706 | 35,348 |
Accretion expense | 298,130 | 612,553 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 1,719,550 | 2,100,139 |
Other current assets | 377,103 | -180,351 |
Accounts payable | -5,003,504 | -2,556,625 |
Income taxes payable | 709,719 | ' |
Other accrued liabilities | -2,710,824 | 1,110,774 |
Net cash (used in) provided by discontinued operating activities | -4,676,311 | 8,312,716 |
Net cash (used in) provided by operating activities | -7,020,576 | 6,346,181 |
Continuing operations: | ' | ' |
Proceeds from the sale of other assets | 140,000 | ' |
Net cash provided by investing activities- continuing operations | 140,000 | ' |
Discontinued operations: | ' | ' |
Capital expenditures | -108,597 | -494,031 |
Proceeds from the sale of gas properties | 95,385,256 | 60,732,775 |
Proceeds from sale of other assets | 25,511 | 19,276 |
Net cash provided in investing activities - discontinued operations | 95,302,170 | 60,258,020 |
Net cash provided by investing activities | 95,442,170 | 60,258,020 |
Continuing operation: | ' | ' |
Dividends paid | -1,058 | -633 |
Treasury stock | ' | -586 |
Net cash used in financing activities- continuing operations | -1,058 | -1,219 |
Discontinued operations: | ' | ' |
Repayment of borrowings under Credit Agreement | -71,550,000 | -62,300,000 |
Deferred financing costs | ' | -3,801 |
Net cash used in financing activities - discontinued operations | -71,550,000 | -62,303,801 |
Net cash used in financing activities | -71,551,058 | -62,305,020 |
Increase in cash and cash equivalents | 16,870,536 | 4,299,181 |
Cash and cash equivalents at beginning of period | 8,108,272 | 7,234,225 |
Cash and cash equivalents at end of period | 24,978,808 | 11,533,406 |
Supplemental disclosure of cash flow information: | ' | ' |
Interest expense | 1,448,385 | 3,293,996 |
Income taxes | 12,500 | 12,500 |
Significant noncash investing and financing activities: | ' | ' |
Accrued capital expenditures | ' | $444,102 |
Organization_and_Our_Business
Organization and Our Business | 6 Months Ended |
Jun. 30, 2014 | |
Organization and Our Business | ' |
Organization and Our Business | ' |
Note 1—Organization and Our Business | |
GeoMet, Inc. (“GeoMet,” the “Company,” “we,” or “our”) (formerly GeoMet Resources, Inc.) was incorporated under the laws of the state of Delaware on November 9, 2000. Prior to the completion of the sale of substantially all of our remaining assets on May 12, 2014, we were primarily engaged in the exploration for and development and production of natural gas from coal seams (“coalbed methane” or “CBM”). All of our production was CBM, which is a dry natural gas containing no hydrocarbon liquids. We were originally founded as a consulting company to the coalbed methane industry in 1985 and were active as an operator, developer and producer of coalbed methane properties since 1993. Our principal operations and producing properties were located in the central Appalachian Basin in Virginia and West Virginia. | |
The accompanying unaudited consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The unaudited consolidated financial statements reflect, in the opinion of our management, all adjustments, consisting only of normal and recurring adjustments, necessary to present fairly the financial position as of, and results of operations for, the interim periods presented. These unaudited consolidated financial statements have been prepared in accordance with the guidelines of interim reporting; therefore, they do not include all disclosures required for our year-end audited consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Interim period results are not necessarily indicative of results of operations or cash flows for the full year. These unaudited consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2013 and the accompanying notes included in our Annual Report on Form 10-K, which we filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2014. | |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncement | 6 Months Ended |
Jun. 30, 2014 | |
Recent Pronouncement | ' |
Recent Pronouncement | ' |
Note 2—Recent Accounting Pronouncement | |
In April 2014, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”), No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The ASU changes the requirements for reporting discontinued operations in Subtopic 205-20. A discontinued operation may include a component of an entity or a group of components of an entity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when an entity meets the criteria to be classified as held for sale, the component of an entity or group of components of an entity is disposed of by sale, or the component of an entity or group of components of an entity is disposed of other than by sale. ASU 2014-08 should be applied when any of these occur within annual periods beginning on or after December 15, 2014. Early adoption is permitted; however, the Company elected not to early adopt the ASU. The ASU requires entities to separately present assets and liabilities of a discontinued operation for all periods presented in the balance sheet. The impact of adopting the ASU would be the reclassification of all of the assets related to our operations as Assets held for sale and all related liabilities as Liabilities held for sale, both in our Consolidated Balance Sheet (Unaudited) as of December 31, 2013. | |
Sale_of_our_Central_Appalachia
Sale of our Central Appalachian Assets and Termination of Credit Agreement | 6 Months Ended |
Jun. 30, 2014 | |
Sale of our Central Appalachian Assets and Termination of Credit Agreement | ' |
Sale of our Central Appalachian Assets and Termination of Credit Agreement | ' |
Note 3—Sale of our Central Appalachian Assets and Termination of Credit Agreement | |
On May 12, 2014, we closed the sale of substantially all of our remaining assets which consisted of coalbed methane interests and other assets located in the Appalachian Basin in McDowell, Harrison, Wyoming, Raleigh, Barbour and Taylor Counties, West Virginia and Buchanan County, Virginia (the “Asset Sale”) to ARP Mountaineer Productions, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Atlas Resource Partners, L.P., a Delaware limited partnership (the “Buyer”). The purchase price of $107.0 million was adjusted downward $10.0 million to account for purchase price adjustments, resulting in net proceeds of $97.0 million. The final settlement statement is expected to be provided to the Buyer on August 15, 2014. The Buyer has 10 days after receipt of the final settlement statement, or through August 25, 2014, to review and make any objections. | |
Immediately following the closing of the Asset Sale, GeoMet, Bank of America, N.A., as administrative agent (the “Administrative Agent”), and the financial institutions party thereto terminated the Fifth Amended and Restated Credit Agreement, dated as of October 14, 2011, by and among GeoMet, the Administrative Agent, the financial institutions party thereto as lenders and the other agents party thereto (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Immediately prior to termination of the Credit Agreement, we repaid all amounts owed to the lenders party to the Credit Agreement, which amounts totaled $69.1 million. As a result, we satisfied all of our obligations under the Credit Agreement. We were not required to pay a termination penalty or other fee in connection with the termination of the Credit Agreement. | |
Additionally, we settled all of our remaining outstanding natural gas hedge positions for approximately $3.1 million. | |
Assets_and_Liabilities_Related
Assets and Liabilities Related to Discontinued Operations and Results of Discontinued Operations | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Assets and Liabilities Related to Discontinued Operations and Results of Discontinued Operations | ' | |||||||||||||
Assets and Liabilities Related to Discontinued Operations and Results of Discontinued Operations | ' | |||||||||||||
Note 4—Assets and Liabilities Related to Discontinued Operations and Results of Discontinued Operations | ||||||||||||||
As a result of the Asset Sale, we have classified all of the assets related to our gas properties as Assets related to discontinued operations and all related liabilities as Liabilities related to discontinued operations, both in the Consolidated Balance Sheet (Unaudited) as of June 30, 2014. Additionally, the related operating activities are presented as discontinued operations in the Consolidated Statements of Operations (Unaudited) for the three and six months ended June 30, 2014 and 2013. | ||||||||||||||
Assets related to discontinued operations in the Consolidated Balance Sheet (Unaudited) at June 30, 2014 include: | ||||||||||||||
Accounts receivable | $ | 1,068,463 | ||||||||||||
Receivable from Buyer — purchase price amount withheld | 1,515,311 | |||||||||||||
Other noncurrent assets | 250,000 | |||||||||||||
Assets related to discontinued operations | $ | 2,833,774 | ||||||||||||
Liabilities related to discontinued operations in the Consolidated Balance Sheet (Unaudited) at June 30, 2014 include: | ||||||||||||||
Accounts payable | $ | 1,380,571 | ||||||||||||
Payable to Buyer — transition services | 904,481 | |||||||||||||
Accrued liabilities | 13,717 | |||||||||||||
Liabilities related to discontinued operations | $ | 2,298,769 | ||||||||||||
Results for activities reported as discontinued operations (unaudited) for the three and six months ended June 30, 2014 and 2013 were as follows: | ||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Revenues: | ||||||||||||||
Gas sales | $ | 3,967,450 | $ | 12,053,170 | $ | 13,645,825 | $ | 22,932,434 | ||||||
Other | 9,730 | 38,113 | 27,505 | 83,069 | ||||||||||
Total revenues | 3,977,180 | 12,091,283 | 13,673,330 | 23,015,503 | ||||||||||
Expenses: | ||||||||||||||
Lease operating expense | 1,372,710 | 4,122,868 | 3,924,356 | 8,592,107 | ||||||||||
Compression and transportation expense | 1,039,897 | 1,868,165 | 2,713,296 | 3,706,801 | ||||||||||
Production taxes | 239,044 | 647,371 | 817,531 | 1,197,917 | ||||||||||
Lease termination costs | 300,000 | — | 300,000 | — | ||||||||||
Depreciation, depletion and amortization | — | 1,336,138 | 715,892 | 2,808,132 | ||||||||||
Losses (gains) on natural gas derivatives | 1,515,474 | (4,149,649 | ) | 2,753,190 | 1,385,470 | |||||||||
Total operating expenses | 4,467,125 | 3,824,893 | 11,224,265 | 17,690,427 | ||||||||||
Gain on the sale of assets | 61,824,007 | 37,135,611 | 61,824,007 | 37,135,611 | ||||||||||
Operating income | 61,334,062 | 45,402,001 | 64,273,072 | 42,460,687 | ||||||||||
Interest income | 2,722 | 427 | 4,284 | 847 | ||||||||||
Interest expense | (299,837 | ) | (1,559,276 | ) | (1,223,348 | ) | (3,235,605 | ) | ||||||
Income tax expense | (709,719 | ) | — | (709,719 | ) | — | ||||||||
Income from discontinued operations | $ | 60,327,228 | $ | 43,843,152 | $ | 62,344,289 | $ | 39,225,929 | ||||||
Gain_on_Sale_of_Assets
Gain on Sale of Assets | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Gain on the Sale of Assets | ' | ||||||||||
Gain on the Sale of Assets | ' | ||||||||||
Note 5— Gain on the Sale of Assets | |||||||||||
The total gain on sale of assets for the three and six months ended June 30, 2014 as presented above include the following: | |||||||||||
Sale to ARP | Sale to New | Total Gain | |||||||||
Mountaineer | River Energy | ||||||||||
Productions, LLC | Corporation | ||||||||||
Cash proceeds | $ | 95,485,256 | $ | (100,000 | ) | $ | 95,385,256 | ||||
Additional proceeds receivable as of June 30, 2014 | 1,515,311 | — | 1,515,311 | ||||||||
Buyer’s assumption of asset retirement obligations | 8,027,899 | 699,544 | 8,727,443 | ||||||||
Buyer’s assumption of other liabilities | 3,812,411 | — | 3,812,411 | ||||||||
Net book value of sold gas properties | (41,332,191 | ) | — | (41,332,191 | ) | ||||||
Net book value of sold equipment | (198,875 | ) | — | (198,875 | ) | ||||||
Transaction costs | (6,085,348 | ) | — | (6,085,348 | ) | ||||||
Total gain on sale | $ | 61,224,463 | $ | 599,544 | $ | 61,824,007 | |||||
Current year operating losses generated in the normal course of business are less than the estimated taxable gain from the Asset Sale. However, no regular income tax is expected to result from the Asset Sale as we estimate sufficient net operating losses will be available from prior years to offset the estimated taxable gain, resulting in a reduction of our deferred tax asset and the related valuation allowance of $22.7 million. We are subject to the Alternative Minimum Tax and have estimated $0.7 million in Income taxes payable recorded in the Consolidated Balance Sheet (Unaudited) as of June 30, 2014. | |||||||||||
Pro_Forma_Financial_Informatio
Pro Forma Financial Information | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Pro Forma Financial Information | ' | |||||||||||||
Pro Forma Financial Information | ' | |||||||||||||
Note 6— Pro Forma Financial Information | ||||||||||||||
Pro forma adjustments related to the unaudited pro forma financial information presented below were computed assuming the asset sales completed in June 2013 and May 2014 were both consummated on January 1, 2013 and include adjustments which give effect to events that are (i) directly attributable to the asset sales, (ii) expected to have a continuing impact on the registrant, and (iii) factually supportable. As such, included in Net income (loss), Net income (loss) available to common stockholders and Net income (loss) per common share (basic and diluted) for the six months ended June 30, 2013 are the gains on the asset sales completed in June 2013 and May 2014 of $37,135,611 and $61,824,007, respectively. | ||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Revenue | $ | — | $ | — | $ | — | $ | — | ||||||
Loss from continuing operations | $ | (1,353,160 | ) | $ | (1,473,503 | ) | $ | (2,521,365 | ) | $ | (2,611,194 | ) | ||
Net income (loss) | $ | (1,353,160 | ) | $ | (1,473,503 | ) | $ | (2,521,365 | ) | $ | 96,348,424 | |||
Net income (loss) available to common stockholders | $ | (2,611,730 | ) | $ | (3,374,395 | ) | $ | (5,025,122 | ) | $ | 92,877,677 | |||
Net income (loss) per common share—basic | $ | (0.06 | ) | $ | (0.08 | ) | $ | (0.12 | ) | $ | 2.3 | |||
Net income (loss) per common share—diluted | $ | (0.06 | ) | $ | (0.08 | ) | $ | (0.12 | ) | $ | 1.17 | |||
Net_Income_Per_Common_Share
Net Income Per Common Share | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Net Income Per Common Share | ' | |||||||||||||
Net Income Per Common Share | ' | |||||||||||||
Note 7—Net Income Per Common Share | ||||||||||||||
Net income per common share—basic is calculated by dividing Net income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income per common share—diluted assumes the conversion of all potentially dilutive securities and is calculated by dividing Net income available to common stockholders by the sum of the weighted average number of shares of common stock outstanding plus potentially dilutive securities. Net income per common share—diluted considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential shares of common stock would have an anti-dilutive effect. A reconciliation of Net income per common share for the three and six months ended June 30, 2014 and 2013 is as follows: | ||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net income available to common stockholders | $ | 57,715,498 | $ | 40,468,757 | $ | 57,319,167 | $ | 33,143,988 | ||||||
Net income per common share—basic: | ||||||||||||||
Net loss per common share from continuing operations | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.13 | ) | $ | (0.15 | ) | ||
Net income per common share from discontinued operations | 1.49 | 1.08 | 1.54 | 0.97 | ||||||||||
Net income per common share—basic | $ | 1.42 | $ | 1 | $ | 1.41 | $ | 0.82 | ||||||
Net income per common share— diluted: | ||||||||||||||
Net loss per common share from continuing operations | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.13 | ) | $ | (0.15 | ) | ||
Net income per common share from discontinued operations | 1.49 | 1.08 | 1.54 | 0.97 | ||||||||||
Net income per common share— diluted | $ | 1.42 | $ | 1 | $ | 1.41 | $ | 0.82 | ||||||
Weighted average number of common shares: | ||||||||||||||
Basic | 40,515,020 | 40,477,411 | 40,514,561 | 40,467,149 | ||||||||||
Diluted | 40,515,020 | 40,477,411 | 40,514,561 | 40,467,149 | ||||||||||
Net income per common share—diluted for the three months ended June 30, 2014 excluded the effect of 60,563 weighted average restricted shares outstanding, and 6,381,359 shares of Series A Convertible Redeemable Preferred Stock (“Preferred Stock”) (49,087,376 in dilutive shares, as converted, which assumes conversion on the first day of the period) because we reported Loss from continuing operations which caused the options, restricted shares and the Preferred Stock to be anti-dilutive. Additionally, in computing the dilutive effect of convertible securities, Net income available to common stockholders is also adjusted to add back any convertible preferred dividends and accretion unless the shares of Preferred Stock are anti-dilutive. As such, there was no add back to Net income available to common stockholders for the three months ended June 30, 2014 for accretion of and dividends paid for Preferred Stock of $705,165 and $553,405, respectively, in computing Net income per common share—diluted as the shares of Preferred Stock were anti-dilutive. | ||||||||||||||
Net income per common share—diluted for the six months ended June 30, 2014 excluded the effect of 97,746 weighted average restricted shares outstanding, and 6,381,359 shares of Preferred Stock (49,087,376 in dilutive shares, as converted, which assumes conversion on the first day of the period) because we reported Loss from continuing operations which caused the options, restricted shares and the Preferred Stock to be anti-dilutive. Additionally, in computing the dilutive effect of convertible securities, Net income available to common stockholders is also adjusted to add back any convertible preferred dividends and accretion unless the shares of Preferred Stock are anti-dilutive. As such, there was no add back to Net income available to common stockholders for the six months ended June 30, 2014 for accretion of and dividends paid for Preferred Stock of $1,349,909 and $1,153,848, respectively, in computing Net income per common share—diluted as the shares of Preferred Stock were anti-dilutive. | ||||||||||||||
Net income per common share—diluted for the three months ended June 30, 2013 excluded the effect of outstanding exercisable options to purchase 2,099,658 shares, 205,083 weighted average restricted shares outstanding, and 5,471,610 shares of Preferred Stock (42,089,307 in dilutive shares, as converted, which assumes conversion on the first day of the period) because we reported Loss from continuing operations which caused the options, restricted shares and the Preferred Stock to be anti-dilutive. Additionally, in computing the dilutive effect of convertible securities, Net income available to common stockholders is also adjusted to add back any convertible preferred dividends and accretion unless the shares of Preferred Stock are anti-dilutive. As such, there was no add back to Net income available to common stockholders for the three months ended June 30, 2014 for accretion of and dividends paid for Preferred Stock of $532,836 and $1,368,056, respectively, in computing Net income per common share—diluted as the shares of Preferred Stock were anti-dilutive. | ||||||||||||||
Net income per common share—diluted for the six months ended June 30, 2013 excluded the effect of outstanding exercisable options to purchase 2,099,658 shares, 219,014 weighted average restricted shares outstanding, and 5,471,610 shares of Preferred Stock (42,089,307 in dilutive shares, as converted, which assumes conversion on the first day of the period) because we reported Loss from continuing operations which caused the options, restricted shares and the Preferred Stock to be anti-dilutive. Additionally, in computing the dilutive effect of convertible securities, Net income available to common stockholders is also adjusted to add back any convertible preferred dividends and accretion unless the shares of Preferred Stock are anti-dilutive. As such, there was no add back to Net income available to common stockholders for the six months ended June 30, 2014 for accretion of and dividends paid for Preferred Stock of $1,026,373 and $2,444,374, respectively, in computing Net income per common share—diluted as the shares of Preferred Stock were anti-dilutive. | ||||||||||||||
Gas_Properties
Gas Properties | 6 Months Ended |
Jun. 30, 2014 | |
Gas Properties | ' |
Gas Properties | ' |
Note 8—Gas Properties | |
As described in Note 3—Sale of our Central Appalachian Assets and Termination of Credit Agreement, on May 12, 2014, we sold substantially all of our remaining assets. Prior to the Asset Sale, the method of accounting for oil and gas producing activities determined which costs were capitalized and how these costs were ultimately matched with revenues and expenses. We used the full cost method of accounting for our gas properties. Under this method, all direct costs and certain indirect costs associated with the acquisition, exploration, and development of our gas properties were capitalized. | |
Gas properties were depleted using the units-of-production method. The depletion expense was significantly affected by the unamortized historical and future development costs and the estimated proved gas reserves. | |
Estimation of proved gas reserves involves professional judgment and use of factors that cannot be precisely determined. Subsequent proved reserve estimates materially different from those reported would change the depletion expense recognized during future reporting periods. No gains or losses are recognized upon the sale or disposition of gas properties unless the sale or disposition represents a significant quantity of gas reserves, which would have a significant impact on the depreciation, depletion and amortization rate. | |
Under full cost accounting rules, total capitalized costs are limited to a ceiling equal to the present value of estimated future net revenues, discounted at 10% per annum, plus the cost of properties not being amortized plus the lower of cost or fair value of unevaluated properties less income tax effects (the “ceiling limitation”). We perform a quarterly ceiling test to evaluate whether the net book value of our full cost pool exceeds the ceiling limitation. If capitalized costs (net of accumulated depreciation, depletion and amortization) less related deferred taxes are greater than the discounted future net revenues or ceiling limitation, a write-down or impairment of the full cost pool is required. A write-down of the carrying value of the full cost pool is a non-cash charge that reduces earnings and stockholders’ equity in the period of occurrence and typically results in lower depreciation, depletion and amortization expense in future periods. Once incurred, a write-down is not reversible at a later date. | |
The ceiling test is calculated using the unweighted arithmetic average of the natural gas price on the first day of each month within the twelve-month period prior to the end of the reporting period, unless prices are defined by contractual arrangements, excluding escalations based on future conditions. In addition, the future cash outflows associated with settling asset retirement obligations were not included in the computation of the discounted present value of future net revenues for the purposes of the ceiling test calculation. | |
No ceiling test was performed at June 30, 2014, as there was no longer any value in the full cost pool. For the twelve months ended June 30, 2013, the unweighted arithmetic average of the Henry Hub spot market price on the first day of each month was $3.47 per Mcf, resulting in a natural gas price of $3.53 per Mcf when adjusted for regional price differentials. Based on the ceiling test performed utilizing the aforementioned prices, no write-down of the carrying value of our U.S. full cost pool was required at June 30, 2013. | |
Asset_Retirement_Obligations
Asset Retirement Obligations | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Asset Retirement Obligations | ' | ||||
Asset Retirement Obligations | ' | ||||
Note 9—Asset Retirement Obligations | |||||
We record an asset retirement obligation (“ARO”) in the Consolidated Balance Sheets (Unaudited) and capitalize the asset retirement costs in gas properties in the period in which the retirement obligation is incurred. The amount of the ARO and the costs capitalized are equal to the estimated future costs to satisfy the obligation using current prices that are escalated by an assumed inflation factor up to the estimated settlement date, which is then discounted back to the date the abandonment obligation was incurred using an assumed cost of funds for GeoMet. Once the ARO is recorded, it is then accreted to its estimated future value using the same assumed cost of funds. Periodically, we update the cost assumptions resulting from market changes and revise the liability recorded accordingly. | |||||
The following table details the changes to our ARO for the six months ended June 30, 2014: | |||||
Current portion of asset retirement obligation at January 1, 2014 | $ | 265,470 | |||
Add: Long-term portion of asset retirement obligation at January 1, 2014 | 8,915,407 | ||||
Asset retirement obligation at January 1, 2014 | 9,180,877 | ||||
Conveyed to purchaser of assets | (8,727,442 | ) | |||
Settlements | (81,748 | ) | |||
Accretion | 298,130 | ||||
Asset retirement obligation at June 30, 2014 | 669,817 | ||||
Less: Current portion of asset retirement obligation | (669,817 | ) | |||
Long-term portion of asset retirement obligation at June 30, 2014 | $ | — | |||
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 6 Months Ended | |||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||
Derivative Instruments and Hedging Activities | ' | |||||||||||||||||||||
Derivative Instruments and Hedging Activities | ' | |||||||||||||||||||||
Note 10—Derivative Instruments and Hedging Activities | ||||||||||||||||||||||
In connection with the closing of the Asset Sale described in Note 3—Sale of our Central Appalachian Assets and Termination of Credit Agreement, we settled all of our outstanding natural gas hedge positions for approximately $3.1 million. | ||||||||||||||||||||||
Prior to the closing of the Asset Sale, in an effort to reduce the effects of the volatility of the price of natural gas on our operations, management had historically hedged natural gas prices primarily using derivative instruments in the form of three-way collars, traditional collars and swaps. While the use of these hedging arrangements limited the downside risk of adverse price movements, it also limited future gains from favorable movements. We entered into hedging transactions, generally for forward periods up to two years or more, which increased the probability of achieving our targeted level of cash flows. Our price risk management policy strictly prohibited the use of derivatives for speculative positions. | ||||||||||||||||||||||
Swaps exchange floating price risk in the future for a fixed price at the time of the hedge. Costless collars set both a maximum ceiling (a sold ceiling) and a minimum floor (a bought floor) future price. We have accounted for these transactions using the mark-to-market accounting method. Generally, we incurred accounting losses on derivatives during periods where prices were rising and gains during periods where prices were falling which caused significant fluctuations in our Consolidated Balance Sheets (Unaudited) and Consolidated Statements of Operations (Unaudited). | ||||||||||||||||||||||
Commodity Price Risk and Related Hedging Activities | ||||||||||||||||||||||
At June 30, 2014, we had no natural gas derivative contracts. | ||||||||||||||||||||||
At December 31, 2013, we had the following natural gas derivative contracts: | ||||||||||||||||||||||
Contract | Period | Volume | Fixed Price or | Derivative | Derivative | Total Fair | ||||||||||||||||
Type | (MMBtu) | Sold Ceiling/ | liability— | liability— | Value of | |||||||||||||||||
Bought Floor | current | non-current | Contract | |||||||||||||||||||
Swap | January 2014 through March 2014 | 360,000 | $3.82 | $ | (164,121 | ) | $ | — | $ | (164,121 | ) | |||||||||||
Collar | January 2014 through December 2015 | 3,650,000 | $4.30/$3.60 | (280,392 | ) | (296,436 | ) | (576,828 | ) | |||||||||||||
Collar | January 2014 through December 2015 | 3,650,000 | $4.20/$3.50 | (389,638 | ) | (413,135 | ) | (802,773 | ) | |||||||||||||
7,660,000 | $ | (834,151 | ) | $ | (709,571 | ) | $ | (1,543,722 | ) | |||||||||||||
We reviewed the financial strength of our hedge counterparties and believed our credit risk was minimal. Our hedge counterparties were participants or affiliates of the participants in the Credit Agreement and the collateral for the outstanding borrowings under the Credit Agreement was used as collateral for our hedges. We did not have rights to collateral from our counterparties, nor did we have rights of offset against borrowings under the Credit Agreement. | ||||||||||||||||||||||
We estimated the fair value of our natural gas derivative contracts using the income approach. The income approach uses valuation techniques that convert future cash flows to a single discounted value. In order to estimate the fair value of our natural gas derivative contracts, a forward price curve and volatility estimates were compiled from sources that include NYMEX settlements and observed trading activity in the Over-the-Counter markets. Pricing estimates for the theoretical market value of hedge positions were developed using analytical models accepted and employed by a broad cross-section of industry participants. To extrapolate future cash flows, discount factors incorporating our counterparties’ and our credit standing were used to discount future cash flows. The estimated fair value of our natural gas derivative contracts also reflected its nonperformance risk, the risk that the obligation would not be fulfilled. Because nonperformance risk included our counterparties’ and our credit risk, we had considered the effect of credit risk on the fair value of our natural gas derivative contracts. The consideration for discounting our counterparties’ liabilities (our assets) was based on the difference between the S&P credit rating of a comparable company to our counterparties and the 1-Year Treasury bill rate, both at the reporting date. The consideration for discounting our liabilities was based on the difference between the market weighted average cost of debt capital plus a premium over the capital asset pricing model and the 1-Year Treasury bill rate. | ||||||||||||||||||||||
We did not have any derivative assets or derivative liabilities as of June 30, 2014 and there were no transfers of assets and liabilities between Level 1 and Level 2 of the fair value measurement hierarchy during the three months ended June 30, 2014. Based on the use of observable market inputs, we had designated these types of instruments designated below as Level 2. The fair value of our Level 2 derivative instruments were as follows: | ||||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||
June 30, 2014 | December 31, 2013 | June 30, 2014 | December 31, 2013 | |||||||||||||||||||
Balance Sheet | Fair | Balance Sheet | Fair | Balance Sheet | Fair | Balance Sheet | Fair | |||||||||||||||
Location | Value | Location | Value | Location | Value | Location | Value | |||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||||
Natural gas hedge positions | Derivative asset (current) | $ | — | Derivative asset (current) | $ | — | Derivative liability (current) | $ | — | Derivative liability (current) | $ | 834,151 | ||||||||||
Natural gas hedge positions | Derivative asset (non- current) | — | Derivative asset (non- current) | — | Derivative liability (non- current) | — | Derivative liability (non-current) | 709,571 | ||||||||||||||
Total derivatives not designated as hedging instruments | $ | — | $ | — | $ | — | $ | 1,543,722 | ||||||||||||||
The following losses on our hedging instruments have been classified as Discontinued operations on the Consolidated Statements of Operations (Unaudited) for the three and six months ended June 30, 2014 and 2013. | ||||||||||||||||||||||
Amount of (Gain) or Loss | ||||||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||
Location of (Gain) | Three Months Ended | Six Months Ended | ||||||||||||||||||||
or Loss Recognized in | June 30, | June 30, | ||||||||||||||||||||
Derivatives | Income on Derivatives | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Derivatives not designated as hedging instruments under ASC 815-20-25 | ||||||||||||||||||||||
Natural gas collar/swap settled positions | Discontinued operations | $ | 3,331,035 | $ | 2,647,134 | $ | 4,296,912 | $ | (452,618 | ) | ||||||||||||
Natural gas collar/swap unsettled positions | Discontinued operations | (1,815,561 | ) | (6,796,783 | ) | (1,543,722 | ) | 1,838,088 | ||||||||||||||
Total (gain) loss | $ | 1,515,474 | $ | (4,149,649 | ) | $ | 2,753,190 | $ | 1,385,470 | |||||||||||||
LongTerm_Debt
Long-Term Debt | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Long-Term Debt | ' | |||||||
Long-Term Debt | ' | |||||||
Note 11—Long-Term Debt | ||||||||
As described in Note 3—Sale of our Central Appalachian Assets and Termination of Credit Agreement, on May 12, 2014, we sold substantially all of our remaining assets. Immediately following the closing of the Asset Sale, we repaid all outstanding borrowings under the Credit Agreement of $69.1 million. | ||||||||
During 2012, the amounts borrowed under the Credit Agreement exceeded the borrowing base. Borrowings under the Credit Agreement at August 8, 2012 totaled $148.6 million. On August 8, 2012, in connection with the excess of borrowings over the borrowing base, we amended the Credit Agreement to provide for a tranche A loan in the amount of our borrowing base and a tranche B loan in the amount of the borrowing base deficiency. | ||||||||
On June 14, 2013, the Company closed the sale of all of its coalbed methane properties located in the state of Alabama. Simultaneously with the close of the property sale, approximately $57.0 million was used to repay outstanding borrowings under the Credit Agreement, which eliminated the borrowing base deficiency. After this repayment, borrowings outstanding under the Credit Agreement totaled $77.0 million. | ||||||||
For the three months ended June 30, 2014, we had no borrowings and made payments of $70.0 million under the Credit Agreement. For the three months ended June 30, 2013, we had no borrowings and made payments of $57.8 million under the Credit Agreement. For the period April 1, 2014 through May 12, 2014, interest on the borrowings averaged 5.48% per annum. For the three months ended June 30, 2013, interest on the borrowings averaged 3.83% per annum. | ||||||||
For the six months ended June 30, 2014, we had no borrowings and made payments of $71.6 million under the Credit Agreement. For the six months ended June 30, 2013, we had no borrowings and made payments of $62.3 million under the Credit Agreement. For the period January 1, 2014 through May 12, 2014, interest on the borrowings averaged 5.00% per annum. For the six months ended June 30, 2013, interest on the borrowings averaged 4.06% per annum. | ||||||||
The following is a summary of our long-term debt at June 30, 2014 and December 31, 2013: | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Borrowings under the Credit Agreement | $ | — | $ | 71,550,000 | ||||
Less current maturities included in current liabilities | — | (71,550,000 | ) | |||||
Total long-term debt | $ | — | $ | — | ||||
We record our debt instruments based on contractual terms. We did not elect to apply the fair value option for recording financial assets and financial liabilities. We measure the fair value of our debt instruments using discounted cash flow analyses based on our current borrowing rates for similar types of borrowing arrangements (categorized as level 3). We do not have any debt instruments with fair value measurements categorized as level 1 or 2 within the fair value hierarchy. Fair value measurement for an asset or liability reflects its nonperformance risk, the risk that the obligation will not be fulfilled. Because nonperformance risk includes our credit risk, we have considered the effect of our credit risk on the fair value of the long-term debt. This consideration involved discounting our long-term debt based on the difference between the market weighted average cost of equity capital plus a premium over the capital asset pricing model and the stated interest rates of the debt instruments included in our long-term debt. The fair value of long-term debt as of December 31, 2013 was estimated to be approximately $70.1 million. | ||||||||
Income_Taxes
Income Taxes | 6 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Income Taxes | ' | |||||||||||
Income Taxes | ' | |||||||||||
Note 12—Income Taxes | ||||||||||||
We record our income taxes using an asset and liability approach. This results in the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the book carrying amounts and the tax basis of assets and liabilities using enacted tax rates at the end of the period. The effect of a change in tax rates of deferred tax assets and liabilities is recognized in the year of the enacted change. | ||||||||||||
For tax reporting purposes, we have federal and state net operating losses (“NOLs”) of approximately $116.4 million and $135.5 million, respectively, at June 30, 2014 that are available to reduce future taxable income. For tax reporting purposes, we had federal and state NOLs of approximately $156.0 million and $162.3 million, respectively, at December 31, 2013 that were available to reduce future taxable income. Our first material federal NOL carryforward expires in 2022 and the last one expires in 2034. | ||||||||||||
Additionally, for tax reporting purposes, we have a federal capital loss carryforward generated by the sale of Hudson’s Hope Gas, Ltd. in 2012, of approximately $33.9 million at June 30, 2014 that is available to reduce future taxable capital gains and expires in 2017. Additionally, we have a federal capital loss carryforward of $0.2 million generated by the sale of other assets in 2014. | ||||||||||||
At June 30, 2014, we have a valuation allowance of $60.8 million recorded against our net deferred tax asset which includes $47.9 million related to our United States operations and $12.9 million related to the capital loss carryforward generated by the sale of Hudson’s Hope Gas, Ltd. in 2012 and other assets in 2014. | ||||||||||||
The income tax expense for the three and six months ended June 30, 2014 was different than the amount computed using the statutory rate primarily due to a decrease of $22.4 million and $22.7 million, respectively, in the valuation allowance on our deferred tax asset. A reconciliation of the effective tax rate to the statutory rate is as follows: | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, 2014 | June 30, 2014 | |||||||||||
Amount computed using statutory rates | $ | 20,294,613 | 34 | % | 20,585,349 | 34 | % | |||||
State income taxes—net of federal benefit | 2,029,515 | 3.4 | % | 2,066,374 | 3.41 | % | ||||||
Valuation Allowance | (22,363,601 | ) | -37.47 | % | (22,707,501 | ) | -37.51 | % | ||||
Stock-based compensation shortfall | 636,443 | 1.07 | % | 636,443 | 1.05 | % | ||||||
Nondeductible items and other | 118,999 | 0.19 | % | 141,554 | 0.23 | % | ||||||
Income tax provision | $ | 715,969 | 1.19 | % | $ | 722,219 | 1.18 | % | ||||
Income tax expense—discontinued operations | (709,719 | ) | (709,719 | ) | ||||||||
Income tax expense—continuing operations | $ | 6,250 | $ | 12,500 | ||||||||
Current year operating losses generated in the normal course of business are less than the estimated taxable gain from the Asset Sale. However, no regular income tax is expected to result from the Asset Sale as we estimate sufficient net operating losses will be available from prior years to offset the estimated taxable gain, resulting in a reduction of our deferred tax asset and the related valuation allowance of $22.7 million. We are subject to the Alternative Minimum Tax and have estimated $0.7 million in Income taxes payable recorded in the Consolidated Balance Sheet (Unaudited) as of June 30, 2014. | ||||||||||||
Common_Stock
Common Stock | 6 Months Ended |
Jun. 30, 2014 | |
Common Stock | ' |
Common Stock | ' |
Note 13—Common Stock | |
As of June 30, 2014, shares of our common stock, par value $0.001 per share (the “Common Stock”) issued and outstanding were 40,525,452 and 40,515,020, respectively. As of December 31, 2013, shares of our Common Stock issued and outstanding were 40,662,749 and 40,652,317, respectively. Included in shares of our Common Stock issued as of June 30, 2014 and December 31, 2013 were 10,432 shares of treasury stock held by the Company. Included in our Common Stock both issued and outstanding at December 31, 2013 were 158,065 shares of restricted stock. During the six months ended June 30, 2014, 153 shares of restricted stock were forfeited and canceled upon the termination of an employee by the Company, 2,724 shares of restricted stock expired unvested and were canceled, and 134,420 shares of restricted stock were cancelled in conjunction with the termination of the employment agreements with our executive officers. | |
Series_A_Convertible_Redeemabl
Series A Convertible Redeemable Preferred Stock | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Series A Convertible Redeemable Preferred Stock | ' | ||||||||||
Series A Convertible Redeemable Preferred Stock | ' | ||||||||||
Note 14—Series A Convertible Redeemable Preferred Stock | |||||||||||
At June 30, 2014 and December 31, 2013, 6,381,359 and 6,000,571 shares of Series A Convertible Redeemable Preferred Stock, par value $0.001 per share (the “Preferred Stock”) were issued and outstanding, respectively. At June 30, 2014, an additional 1,020,473 shares of our Preferred Stock are reserved exclusively for the payment of paid-in-kind dividends (“PIK dividends”). We measure the fair value of PIK dividends using the closing quoted NASDAQ market price on the dividend date (categorized as level 1). The following table details the activity related to the Preferred Stock for the three months ended June 30, 2014: | |||||||||||
Dividend Period | Date Issued | Number of Shares | Balance | ||||||||
(Three Months Ended) | |||||||||||
Balance at January 1, 2014 | 6,000,571 | $ | 43,404,993 | ||||||||
Accretion of discount on Preferred Stock | 1,349,909 | ||||||||||
PIK Dividends Issued for Preferred Stock : | 3/31/14 | 3/31/14 | 187,461 | 599,875 | |||||||
6/30/14 | 6/30/14 | 193,327 | 552,915 | ||||||||
Balance At June 30, 2014 | 6,381,359 | $ | 45,907,692 | ||||||||
At June 30, 2014, the 6,381,359 shares of Preferred Stock were issued and outstanding were convertible into 49,087,376 shares of our Common Stock. | |||||||||||
ShareBased_Awards
Share-Based Awards | 6 Months Ended |
Jun. 30, 2014 | |
Share-Based Awards | ' |
Share-Based Awards | ' |
Note 15—Share-Based Awards | |
Our 2006 Long-Term Incentive Plan (the “2006 Plan”) which authorized the granting of incentive stock options, non-qualified stock options, stock appreciation rights, stock awards, restricted stock, restricted stock units and performance awards was terminated on May 12, 2014. In connection with the termination of the 2006 Plan, we recorded a $40,560 reduction in General and administrative expenses in the Consolidated Statements of Operations (Unaudited) for the three and six months ended June 30, 2014 resulting from forfeiture reversals. | |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies | ' |
Commitments and Contingencies | ' |
Note 16— Commitments and Contingencies | |
From time to time we are a party to litigation in the normal course of business. While the outcome of lawsuits or other proceedings against us are not possible to reasonably predict, management does not believe that the adverse effect on our financial condition, results of operations or cash flows, if any, will be material. | |
Environmental and Regulatory | |
As of June 30, 2014, there were no known environmental or other regulatory matters related to our operations that are reasonably expected to result in a material liability to us. | |
Assets_and_Liabilities_Related1
Assets and Liabilities Related to Discontinued Operations and Results of Discontinued Operations | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Assets and Liabilities Related to Discontinued Operations and Results of Discontinued Operations | ' | |||||||||||||
Schedule of balance sheets | ' | |||||||||||||
Assets related to discontinued operations in the Consolidated Balance Sheet (Unaudited) at June 30, 2014 include: | ||||||||||||||
Accounts receivable | $ | 1,068,463 | ||||||||||||
Receivable from Buyer — purchase price amount withheld | 1,515,311 | |||||||||||||
Other noncurrent assets | 250,000 | |||||||||||||
Assets related to discontinued operations | $ | 2,833,774 | ||||||||||||
Liabilities related to discontinued operations in the Consolidated Balance Sheet (Unaudited) at June 30, 2014 include: | ||||||||||||||
Accounts payable | $ | 1,380,571 | ||||||||||||
Payable to Buyer — transition services | 904,481 | |||||||||||||
Accrued liabilities | 13,717 | |||||||||||||
Liabilities related to discontinued operations | $ | 2,298,769 | ||||||||||||
Schedule of statement of operations | ' | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Revenues: | ||||||||||||||
Gas sales | $ | 3,967,450 | $ | 12,053,170 | $ | 13,645,825 | $ | 22,932,434 | ||||||
Other | 9,730 | 38,113 | 27,505 | 83,069 | ||||||||||
Total revenues | 3,977,180 | 12,091,283 | 13,673,330 | 23,015,503 | ||||||||||
Expenses: | ||||||||||||||
Lease operating expense | 1,372,710 | 4,122,868 | 3,924,356 | 8,592,107 | ||||||||||
Compression and transportation expense | 1,039,897 | 1,868,165 | 2,713,296 | 3,706,801 | ||||||||||
Production taxes | 239,044 | 647,371 | 817,531 | 1,197,917 | ||||||||||
Lease termination costs | 300,000 | — | 300,000 | — | ||||||||||
Depreciation, depletion and amortization | — | 1,336,138 | 715,892 | 2,808,132 | ||||||||||
Losses (gains) on natural gas derivatives | 1,515,474 | (4,149,649 | ) | 2,753,190 | 1,385,470 | |||||||||
Total operating expenses | 4,467,125 | 3,824,893 | 11,224,265 | 17,690,427 | ||||||||||
Gain on the sale of assets | 61,824,007 | 37,135,611 | 61,824,007 | 37,135,611 | ||||||||||
Operating income | 61,334,062 | 45,402,001 | 64,273,072 | 42,460,687 | ||||||||||
Interest income | 2,722 | 427 | 4,284 | 847 | ||||||||||
Interest expense | (299,837 | ) | (1,559,276 | ) | (1,223,348 | ) | (3,235,605 | ) | ||||||
Income tax expense | (709,719 | ) | — | (709,719 | ) | — | ||||||||
Income from discontinued operations | $ | 60,327,228 | $ | 43,843,152 | $ | 62,344,289 | $ | 39,225,929 | ||||||
Gain_on_sale_of_assets_Tables
Gain on sale of assets (Tables) | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Gain on the Sale of Assets | ' | ||||||||||
Schedule of total gain on the sale | ' | ||||||||||
Sale to ARP | Sale to New | Total Gain | |||||||||
Mountaineer | River Energy | ||||||||||
Productions, LLC | Corporation | ||||||||||
Cash proceeds | $ | 95,485,256 | $ | (100,000 | ) | $ | 95,385,256 | ||||
Additional proceeds receivable as of June 30, 2014 | 1,515,311 | — | 1,515,311 | ||||||||
Buyer’s assumption of asset retirement obligations | 8,027,899 | 699,544 | 8,727,443 | ||||||||
Buyer’s assumption of other liabilities | 3,812,411 | — | 3,812,411 | ||||||||
Net book value of sold gas properties | (41,332,191 | ) | — | (41,332,191 | ) | ||||||
Net book value of sold equipment | (198,875 | ) | — | (198,875 | ) | ||||||
Transaction costs | (6,085,348 | ) | — | (6,085,348 | ) | ||||||
Total gain on sale | $ | 61,224,463 | $ | 599,544 | $ | 61,824,007 | |||||
Pro_Forma_Financial_Informatio1
Pro Forma Financial Information (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Pro Forma Financial Information | ' | |||||||||||||
Schedule of pro forma adjustments related to the unaudited pro forma financial information | ' | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Revenue | $ | — | $ | — | $ | — | $ | — | ||||||
Loss from continuing operations | $ | (1,353,160 | ) | $ | (1,473,503 | ) | $ | (2,521,365 | ) | $ | (2,611,194 | ) | ||
Net income (loss) | $ | (1,353,160 | ) | $ | (1,473,503 | ) | $ | (2,521,365 | ) | $ | 96,348,424 | |||
Net income (loss) available to common stockholders | $ | (2,611,730 | ) | $ | (3,374,395 | ) | $ | (5,025,122 | ) | $ | 92,877,677 | |||
Net income (loss) per common share—basic | $ | (0.06 | ) | $ | (0.08 | ) | $ | (0.12 | ) | $ | 2.3 | |||
Net income (loss) per common share—diluted | $ | (0.06 | ) | $ | (0.08 | ) | $ | (0.12 | ) | $ | 1.17 | |||
Net_Income_Per_Common_Share_Ta
Net Income Per Common Share (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Net Income Per Common Share | ' | |||||||||||||
Schedule of reconciliation of net income per common share | ' | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net income available to common stockholders | $ | 57,715,498 | $ | 40,468,757 | $ | 57,319,167 | $ | 33,143,988 | ||||||
Net income per common share—basic: | ||||||||||||||
Net loss per common share from continuing operations | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.13 | ) | $ | (0.15 | ) | ||
Net income per common share from discontinued operations | 1.49 | 1.08 | 1.54 | 0.97 | ||||||||||
Net income per common share—basic | $ | 1.42 | $ | 1 | $ | 1.41 | $ | 0.82 | ||||||
Net income per common share— diluted: | ||||||||||||||
Net loss per common share from continuing operations | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.13 | ) | $ | (0.15 | ) | ||
Net income per common share from discontinued operations | 1.49 | 1.08 | 1.54 | 0.97 | ||||||||||
Net income per common share— diluted | $ | 1.42 | $ | 1 | $ | 1.41 | $ | 0.82 | ||||||
Weighted average number of common shares: | ||||||||||||||
Basic | 40,515,020 | 40,477,411 | 40,514,561 | 40,467,149 | ||||||||||
Diluted | 40,515,020 | 40,477,411 | 40,514,561 | 40,467,149 | ||||||||||
Asset_Retirement_Obligations_T
Asset Retirement Obligations (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Asset Retirement Obligations | ' | ||||
Schedule of changes to ARO | ' | ||||
Current portion of asset retirement obligation at January 1, 2014 | $ | 265,470 | |||
Add: Long-term portion of asset retirement obligation at January 1, 2014 | 8,915,407 | ||||
Asset retirement obligation at January 1, 2014 | 9,180,877 | ||||
Conveyed to purchaser of assets | (8,727,442 | ) | |||
Settlements | (81,748 | ) | |||
Accretion | 298,130 | ||||
Asset retirement obligation at June 30, 2014 | 669,817 | ||||
Less: Current portion of asset retirement obligation | (669,817 | ) | |||
Long-term portion of asset retirement obligation at June 30, 2014 | $ | — | |||
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended | |||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||
Derivative instruments and hedging activities | ' | |||||||||||||||||||||
Schedule of fair value of derivative instruments | ' | |||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||
June 30, 2014 | December 31, 2013 | June 30, 2014 | December 31, 2013 | |||||||||||||||||||
Balance Sheet | Fair | Balance Sheet | Fair | Balance Sheet | Fair | Balance Sheet | Fair | |||||||||||||||
Location | Value | Location | Value | Location | Value | Location | Value | |||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||||
Natural gas hedge positions | Derivative asset (current) | $ | — | Derivative asset (current) | $ | — | Derivative liability (current) | $ | — | Derivative liability (current) | $ | 834,151 | ||||||||||
Natural gas hedge positions | Derivative asset (non- current) | — | Derivative asset (non- current) | — | Derivative liability (non- current) | — | Derivative liability (non-current) | 709,571 | ||||||||||||||
Total derivatives not designated as hedging instruments | $ | — | $ | — | $ | — | $ | 1,543,722 | ||||||||||||||
Schedule of losses (gains) on our hedging instruments have been classified as Discontinued operations included in the consolidated statements of operations | ' | |||||||||||||||||||||
Amount of (Gain) or Loss | ||||||||||||||||||||||
Recognized in Income on | ||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||
Location of (Gain) | Three Months Ended | Six Months Ended | ||||||||||||||||||||
or Loss Recognized in | June 30, | June 30, | ||||||||||||||||||||
Derivatives | Income on Derivatives | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Derivatives not designated as hedging instruments under ASC 815-20-25 | ||||||||||||||||||||||
Natural gas collar/swap settled positions | Discontinued operations | $ | 3,331,035 | $ | 2,647,134 | $ | 4,296,912 | $ | (452,618 | ) | ||||||||||||
Natural gas collar/swap unsettled positions | Discontinued operations | (1,815,561 | ) | (6,796,783 | ) | (1,543,722 | ) | 1,838,088 | ||||||||||||||
Total (gain) loss | $ | 1,515,474 | $ | (4,149,649 | ) | $ | 2,753,190 | $ | 1,385,470 | |||||||||||||
Commodity Contract [Member] | Natural Gas Collar [Member] | ' | |||||||||||||||||||||
Derivative instruments and hedging activities | ' | |||||||||||||||||||||
Schedule of derivative contract positions | ' | |||||||||||||||||||||
Contract | Period | Volume | Fixed Price or | Derivative | Derivative | Total Fair | ||||||||||||||||
Type | (MMBtu) | Sold Ceiling/ | liability— | liability— | Value of | |||||||||||||||||
Bought Floor | current | non-current | Contract | |||||||||||||||||||
Swap | January 2014 through March 2014 | 360,000 | $3.82 | $ | (164,121 | ) | $ | — | $ | (164,121 | ) | |||||||||||
Collar | January 2014 through December 2015 | 3,650,000 | $4.30/$3.60 | (280,392 | ) | (296,436 | ) | (576,828 | ) | |||||||||||||
Collar | January 2014 through December 2015 | 3,650,000 | $4.20/$3.50 | (389,638 | ) | (413,135 | ) | (802,773 | ) | |||||||||||||
7,660,000 | $ | (834,151 | ) | $ | (709,571 | ) | $ | (1,543,722 | ) | |||||||||||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Long-Term Debt | ' | |||||||
Summary of long-term debt | ' | |||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Borrowings under the Credit Agreement | $ | — | $ | 71,550,000 | ||||
Less current maturities included in current liabilities | — | (71,550,000 | ) | |||||
Total long-term debt | $ | — | $ | — | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 6 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Income Taxes | ' | |||||||||||
Schedule of reconciliation of the effective tax rate to the statutory rate | ' | |||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, 2014 | June 30, 2014 | |||||||||||
Amount computed using statutory rates | $ | 20,294,613 | 34 | % | 20,585,349 | 34 | % | |||||
State income taxes—net of federal benefit | 2,029,515 | 3.4 | % | 2,066,374 | 3.41 | % | ||||||
Valuation Allowance | (22,363,601 | ) | -37.47 | % | (22,707,501 | ) | -37.51 | % | ||||
Stock-based compensation shortfall | 636,443 | 1.07 | % | 636,443 | 1.05 | % | ||||||
Nondeductible items and other | 118,999 | 0.19 | % | 141,554 | 0.23 | % | ||||||
Income tax provision | $ | 715,969 | 1.19 | % | $ | 722,219 | 1.18 | % | ||||
Income tax expense—discontinued operations | (709,719 | ) | (709,719 | ) | ||||||||
Income tax expense—continuing operations | $ | 6,250 | $ | 12,500 | ||||||||
Series_A_Convertible_Redeemabl1
Series A Convertible Redeemable Preferred Stock (Tables) | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Series A Convertible Redeemable Preferred Stock | ' | ||||||||||
Schedule of activity related to the Preferred Stock | ' | ||||||||||
Dividend Period | Date Issued | Number of Shares | Balance | ||||||||
(Three Months Ended) | |||||||||||
Balance at January 1, 2014 | 6,000,571 | $ | 43,404,993 | ||||||||
Accretion of discount on Preferred Stock | 1,349,909 | ||||||||||
PIK Dividends Issued for Preferred Stock : | 3/31/14 | 3/31/14 | 187,461 | 599,875 | |||||||
6/30/14 | 6/30/14 | 193,327 | 552,915 | ||||||||
Balance At June 30, 2014 | 6,381,359 | $ | 45,907,692 | ||||||||
Sale_of_our_Central_Appalachia1
Sale of our Central Appalachian Assets and Termination of Credit Agreement (Details) (USD $) | 0 Months Ended | 6 Months Ended | 0 Months Ended | |||
12-May-14 | Jun. 30, 2014 | Jun. 30, 2013 | 12-May-14 | 12-May-14 | 12-May-14 | |
Commodity Contract [Member] | Credit Agreement [Member] | Coalbed Methane Properties [Member] | ||||
Discontinued Operations | ' | ' | ' | ' | ' | ' |
Purchase price subject to purchase price adjustments | ' | ' | ' | ' | ' | $107,000,000 |
Purchase price adjustments | ' | ' | ' | ' | ' | 10,000,000 |
Net proceeds from sale of properties | ' | ' | ' | ' | ' | 97,000,000 |
Period within objections can be raised after receipt of the final settlement statement | ' | ' | ' | ' | ' | '10 days |
Repayment of borrowings under Credit Agreement | -69,100,000 | -71,550,000 | -62,300,000 | ' | 69,100,000 | ' |
Settlement of derivative instruments | ' | ' | ' | $3,100,000 | ' | ' |
Assets_and_Liabilities_Related2
Assets and Liabilities Related to Discontinued Operations and Results of Discontinued Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Expenses: | ' | ' | ' | ' |
Income tax expense | $709,719 | $0 | $709,719 | $0 |
Income from discontinued operations | 60,327,228 | 43,843,152 | 62,344,289 | 39,225,929 |
Assets of Disposal Group, Including Discontinued Operation, Current [Abstract] | ' | ' | ' | ' |
Accounts receivable | 1,068,463 | ' | 1,068,463 | ' |
Receivable from Buyer-purchase price amount withheld | 1,515,311 | ' | 1,515,311 | ' |
Other noncurrent assets | 250,000 | ' | 250,000 | ' |
Assets related to discontinued operations | 2,833,774 | ' | 2,833,774 | ' |
Liabilities of Disposal Group, Including Discontinued Operation, Current [Abstract] | ' | ' | ' | ' |
Accounts payable | 1,380,571 | ' | 1,380,571 | ' |
Payable to Buyer-transition services | 904,481 | ' | 904,481 | ' |
Accrued liabilities | 13,717 | ' | 13,717 | ' |
Liabilities related to discontinued operations | 2,298,769 | ' | 2,298,769 | ' |
Coalbed Methane Properties [Member] | ' | ' | ' | ' |
Revenues: | ' | ' | ' | ' |
Gas sales | 3,967,450 | 12,053,170 | 13,645,825 | 22,932,434 |
Other | 9,730 | 38,113 | 27,505 | 83,069 |
Total revenues | 3,977,180 | 12,091,283 | 13,673,330 | 23,015,503 |
Expenses: | ' | ' | ' | ' |
Lease operating expense | 1,372,710 | 4,122,868 | 3,924,356 | 8,592,107 |
Compression and transportation expense | 1,039,897 | 1,868,165 | 2,713,296 | 3,706,801 |
Production taxes | 239,044 | 647,371 | 817,531 | 1,197,917 |
Lease termination costs | 300,000 | ' | 300,000 | ' |
Depreciation, depletion and amortization | ' | 1,336,138 | 715,892 | 2,808,132 |
Losses (gains) on natural gas derivatives | 1,515,474 | -4,149,649 | 2,753,190 | 1,385,470 |
Total operating expenses | 4,467,125 | 3,824,893 | 11,224,265 | 17,690,427 |
Gain on the sale of assets | 61,824,007 | 37,135,611 | 61,824,007 | 37,135,611 |
Operating income | 61,334,062 | 45,402,001 | 64,273,072 | 42,460,687 |
Interest income | 2,722 | 427 | 4,284 | 847 |
Interest expense | -299,837 | -1,559,276 | -1,223,348 | -3,235,605 |
Income tax expense | -709,719 | ' | -709,719 | ' |
Income from discontinued operations | 60,327,228 | 43,843,152 | 62,344,289 | 39,225,929 |
Assets of Disposal Group, Including Discontinued Operation, Current [Abstract] | ' | ' | ' | ' |
Receivable from Buyer-purchase price amount withheld | $1,515,311 | ' | $1,515,311 | ' |
Gain_on_Sale_of_Assets_Details
Gain on Sale of Assets (Details) (USD $) | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Gain (Loss) on Divestiture of Businesses [Abstract] | ' | ' | ' |
Cash proceeds | $95,385,256 | $60,732,775 | ' |
Additional proceeds receivable | 1,515,311 | ' | ' |
Buyer's assumption of asset retirement obligations | 669,817 | ' | 265,470 |
Buyer's assumption of other liabilities | ' | ' | 113,434 |
Net book value of sold gas properties | ' | ' | -333,109,974 |
Net book value of sold equipment | ' | ' | -42,329,051 |
Total gain on sale | 61,824,007 | 37,135,611 | ' |
Reduction in deferred tax asset | -22,700,000 | ' | ' |
Reduction in valuation allowance | -22,700,000 | ' | ' |
Current federal or state income taxes payable in conjunction with the sale of properties | 700,000 | ' | ' |
Coalbed Methane Properties [Member] | ' | ' | ' |
Gain (Loss) on Divestiture of Businesses [Abstract] | ' | ' | ' |
Cash proceeds | 95,385,256 | ' | ' |
Additional proceeds receivable | 1,515,311 | ' | ' |
Buyer's assumption of asset retirement obligations | 8,727,443 | ' | ' |
Buyer's assumption of other liabilities | 3,812,411 | ' | ' |
Net book value of sold gas properties | -41,332,191 | ' | ' |
Net book value of sold equipment | -198,875 | ' | ' |
Transaction costs | -6,085,348 | ' | ' |
Total gain on sale | 61,824,007 | ' | ' |
Reduction in deferred tax asset | -22,700,000 | ' | ' |
Reduction in valuation allowance | 22,700,000 | ' | ' |
Current federal or state income taxes payable in conjunction with the sale of properties | 700,000 | ' | ' |
Coalbed Methane Properties [Member] | ARP Mountaineer Productions LLC [Member] | ' | ' | ' |
Gain (Loss) on Divestiture of Businesses [Abstract] | ' | ' | ' |
Cash proceeds | 95,485,256 | ' | ' |
Additional proceeds receivable | 1,515,311 | ' | ' |
Buyer's assumption of asset retirement obligations | 8,027,899 | ' | ' |
Buyer's assumption of other liabilities | 3,812,411 | ' | ' |
Net book value of sold gas properties | -41,332,191 | ' | ' |
Net book value of sold equipment | -198,875 | ' | ' |
Transaction costs | -6,085,348 | ' | ' |
Total gain on sale | 61,224,463 | ' | ' |
Coalbed Methane Properties [Member] | New River Energy Corporation [Member] | ' | ' | ' |
Gain (Loss) on Divestiture of Businesses [Abstract] | ' | ' | ' |
Cash proceeds | -100,000 | ' | ' |
Buyer's assumption of asset retirement obligations | 699,544 | ' | ' |
Total gain on sale | $599,544 | ' | ' |
Pro_Forma_Financials_Informati
Pro Forma Financials Information (Details) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Discontinued Operations | ' | ' | ' | ' | ' |
Loss from continuing operations | ' | ($1,353,160) | ($1,473,503) | ($2,521,365) | ($2,611,194) |
Net income (loss) | ' | 58,974,068 | 42,369,649 | 59,822,924 | 36,614,735 |
Net income (loss) available to common stockholders | ' | 57,715,498 | 40,468,757 | 57,319,167 | 33,143,988 |
Earnings Per Share, Basic | ' | $1.42 | $1 | $1.41 | $0.82 |
Earnings Per Share, Diluted | ' | $1.42 | $1 | $1.41 | $0.82 |
Total gain on sale | ' | ' | ' | 61,824,007 | 37,135,611 |
Coalbed Methane Properties [Member] | ' | ' | ' | ' | ' |
Discontinued Operations | ' | ' | ' | ' | ' |
Total gain on sale | ' | ' | ' | 61,824,007 | ' |
Coalbed Methane Properties [Member] | Pro Forma [Member] | ' | ' | ' | ' | ' |
Discontinued Operations | ' | ' | ' | ' | ' |
Loss from continuing operations | ' | -1,353,160 | -1,473,503 | -2,521,365 | -2,611,194 |
Net income (loss) | ' | -1,353,160 | -1,473,503 | -2,521,365 | 96,348,424 |
Net income (loss) available to common stockholders | ' | -2,611,730 | -3,374,395 | -5,025,122 | 92,877,677 |
Earnings Per Share, Basic | ' | ($0.06) | ($0.08) | ($0.12) | $2.30 |
Earnings Per Share, Diluted | ' | ($0.06) | ($0.08) | ($0.12) | $1.17 |
Total gain on sale | $37,135,611 | ' | ' | $61,824,007 | ' |
Net_Income_Per_Common_Share_De
Net Income Per Common Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Net Income Per Common Share | ' | ' | ' | ' |
Net income available to common stockholders | $57,715,498 | $40,468,757 | $57,319,167 | $33,143,988 |
Net income per common share-basic: | ' | ' | ' | ' |
Net loss per common share from continuing operations (in dollars per share) | ($0.07) | ($0.08) | ($0.13) | ($0.15) |
Net income per common share from discontinued operations (in dollars per share) | $1.49 | $1.08 | $1.54 | $0.97 |
Net income per common share-basic (in dollars per share) | $1.42 | $1 | $1.41 | $0.82 |
Net income per common share-diluted: | ' | ' | ' | ' |
Net loss per common share from continuing operations (in dollars per share) | ($0.07) | ($0.08) | ($0.13) | ($0.15) |
Net income per common share from discontinued operations (in dollars per share) | $1.49 | $1.08 | $1.54 | $0.97 |
Net income per common share-diluted (in dollars per share) | $1.42 | $1 | $1.41 | $0.82 |
Weighted average number of common shares: | ' | ' | ' | ' |
Basic (in shares) | 40,515,020 | 40,477,411 | 40,514,561 | 40,467,149 |
Diluted (in shares) | 40,515,020 | 40,477,411 | 40,514,561 | 40,467,149 |
Net_Income_Per_Common_Share_De1
Net Income Per Common Share (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Effect of anti-dilutive securities | ' | ' | ' | ' |
Dilutive shares of series A convertible redeemable preferred stock | 49,087,376 | 42,089,307 | 49,087,376 | 42,089,307 |
Add back to Net loss available to common stockholders for Accretion of and dividends paid for Series A Convertible Redeemable Preferred Stock (in shares) | 0 | 0 | 0 | 0 |
Accretion of Series A Convertible Redeemable Preferred Stock | $705,165 | $532,836 | $1,349,909 | $1,026,373 |
Dividends paid for Series A Convertible Redeemable Preferred Stock (cash and PIK) | $553,405 | $1,368,056 | $1,153,848 | $2,444,374 |
Employee Stock Option [Member] | ' | ' | ' | ' |
Effect of anti-dilutive securities | ' | ' | ' | ' |
Antidilutive securities excluded from diluted weighted average shares outstanding | ' | 2,099,658 | ' | 2,099,658 |
Restricted Stock [Member] | ' | ' | ' | ' |
Effect of anti-dilutive securities | ' | ' | ' | ' |
Antidilutive securities excluded from diluted weighted average shares outstanding | 60,563 | 205,083 | 97,746 | 219,014 |
Redeemable Convertible Preferred Stock [Member] | ' | ' | ' | ' |
Effect of anti-dilutive securities | ' | ' | ' | ' |
Antidilutive securities excluded from diluted weighted average shares outstanding | 6,381,359 | 5,471,610 | 6,381,359 | 5,471,610 |
Gas_Properties_Details
Gas Properties (Details) (USD $) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | |
Gas Properties | ' | ' | ' |
Discount rate per annum used to calculate present value of estimated future net revenues (as a percent) | 10.00% | ' | ' |
Period of natural gas prices prior to the end of the reporting period whose unweighted arithmetic average used to calculate ceiling test | '12 months | ' | ' |
Unweighted arithmetic average of the Henry Hub spot market price (in dollars per Mcf) | ' | ' | 3.47 |
Natural gas price when adjusted for the regional price differentials (in dollars per Mcf) | ' | ' | 3.53 |
Write-down of the carrying value of U.S. full cost pool | ' | $0 | ' |
Asset_Retirement_Obligations_D
Asset Retirement Obligations (Details) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Changes to asset retirement Obligations | ' |
Current portion of asset retirement obligation at the beginning of the period | $265,470 |
Add: Long-term portion of asset retirement obligation at the beginning of the period | 8,915,407 |
Asset retirement obligation at beginning of the period | 9,180,877 |
Conveyed to purchaser of assets | -8,727,442 |
Settlements | -81,748 |
Accretion | 298,130 |
Asset retirement obligation at end of the period | 669,817 |
Less: Current portion of asset retirement obligation | ($669,817) |
Derivative_Instruments_and_Hed2
Derivative Instruments and Hedging Activities (Details) (USD $) | 6 Months Ended | ||
Jun. 30, 2014 | 12-May-14 | Dec. 31, 2013 | |
item | |||
Derivative instruments and hedging activities | ' | ' | ' |
Derivative liability - current | ' | ' | ($834,151) |
Derivative liability - non-current | ' | ' | -709,571 |
Commodity Contract [Member] | ' | ' | ' |
Derivative instruments and hedging activities | ' | ' | ' |
Period of derivative contracts | '2 years | ' | ' |
Volume (in MMBtu) | ' | ' | 7,660,000 |
Derivative liability - current | ' | ' | -834,151 |
Derivative liability - non-current | ' | ' | -709,571 |
Fair Value | ' | ' | -1,543,722 |
Settlement of derivative instruments | ' | 3,100,000 | ' |
Commodity Contract [Member] | Natural Gas Collar [Member] | January2014 Through December2015 Period One [Member] | ' | ' | ' |
Derivative instruments and hedging activities | ' | ' | ' |
Volume (in MMBtu) | ' | ' | 3,650,000 |
Sold Ceiling (in dollars per unit) | ' | ' | 4.3 |
Bought Floor (in dollars per unit) | ' | ' | 3.6 |
Derivative liability - current | ' | ' | -280,392 |
Derivative liability - non-current | ' | ' | -296,436 |
Fair Value | ' | ' | -576,828 |
Commodity Contract [Member] | Natural Gas Collar [Member] | January2014 Through December2015 Period Two [Member] | ' | ' | ' |
Derivative instruments and hedging activities | ' | ' | ' |
Volume (in MMBtu) | ' | ' | 3,650,000 |
Sold Ceiling (in dollars per unit) | ' | ' | 4.2 |
Bought Floor (in dollars per unit) | ' | ' | 3.5 |
Derivative liability - current | ' | ' | -389,638 |
Derivative liability - non-current | ' | ' | -413,135 |
Fair Value | ' | ' | -802,773 |
Commodity Contract [Member] | Natural Gas Swap [Member] | January2014 Through March2014 Period Two [Member] | ' | ' | ' |
Derivative instruments and hedging activities | ' | ' | ' |
Volume (in MMBtu) | ' | ' | 360,000 |
Fixed Price (in dollars per unit) | ' | ' | 3.82 |
Derivative liability - current | ' | ' | -164,121 |
Fair Value | ' | ' | ($164,121) |
Derivative_Instruments_and_Hed3
Derivative Instruments and Hedging Activities (Details 2) (Nondesignated [Member], USD $) | Dec. 31, 2013 |
Fair value of the entity's derivative instruments | ' |
Liability Derivatives, Fair Value | $1,543,722 |
Commodity Contract [Member] | Derivative Liabilities Current [Member] | ' |
Fair value of the entity's derivative instruments | ' |
Liability Derivatives, Fair Value | 834,151 |
Commodity Contract [Member] | Derivative Liabilities Noncurrent [Member] | ' |
Fair value of the entity's derivative instruments | ' |
Liability Derivatives, Fair Value | $709,571 |
Derivative_Instruments_and_Hed4
Derivative Instruments and Hedging Activities (Details 3) (Nondesignated [Member], USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
The Effect of Derivative Instruments on the Unaudited Consolidated Statements of Operations and Other Comprehensive Income | ' | ' | ' | ' |
Discontinued operations | $1,515,474 | ($4,149,649) | $2,753,190 | $1,385,470 |
Natural Gas Collar Swap Contract One [Member] | ' | ' | ' | ' |
The Effect of Derivative Instruments on the Unaudited Consolidated Statements of Operations and Other Comprehensive Income | ' | ' | ' | ' |
Discontinued operations | 3,331,035 | 2,647,134 | 4,296,912 | -452,618 |
Natural Gas Collar Swap Contract Two [Member] | ' | ' | ' | ' |
The Effect of Derivative Instruments on the Unaudited Consolidated Statements of Operations and Other Comprehensive Income | ' | ' | ' | ' |
Discontinued operations | ($1,815,561) | ($6,796,783) | ($1,543,722) | $1,838,088 |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | 0 Months Ended | 6 Months Ended | 3 Months Ended | 4 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
12-May-14 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | 12-May-14 | Jun. 14, 2013 | Aug. 08, 2012 | 12-May-14 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 14, 2013 | |
Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Credit Agreement [Member] | Credit Agreement [Member] | Credit Agreement [Member] | Credit Agreement [Member] | Credit Agreement [Member] | Credit Agreement [Member] | |||||
Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | |||||||||||
Long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | $148,600,000 | ' | ' | ' | ' | ' | ' |
Initial borrowing base | ' | ' | ' | ' | ' | ' | ' | 57,000,000 | ' | ' | ' | ' | ' | ' | ' |
Borrowings outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 77,000,000 |
Amount borrowed during the period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 0 | 0 | ' |
Payments made during the period | 69,100,000 | 71,550,000 | 62,300,000 | ' | ' | ' | ' | ' | ' | -69,100,000 | 70,000,000 | 57,800,000 | 71,600,000 | 62,300,000 | ' |
Average interest rate (as a percent) | ' | ' | 4.06% | ' | 5.48% | 3.83% | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowings under the Credit Agreement | ' | ' | ' | 71,550,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Less current maturities included in current liabilities | ' | ' | ' | -71,550,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of long-term debt | ' | ' | ' | $70,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Net operating loss carryforward | ' | ' |
Recorded valuation allowances | $60.80 | ' |
U [S] | ' | ' |
Net operating loss carryforward | ' | ' |
Valuation allowance related to U.S. operations | 47.9 | ' |
Internal Revenue Service I R S [Member] | ' | ' |
Net operating loss carryforward | ' | ' |
Loss carry forward | 116.4 | 156 |
Internal Revenue Service I R S [Member] | Capital Loss Carryforward [Member] | Hudson Hope Gas Limited [Member] | ' | ' |
Net operating loss carryforward | ' | ' |
Loss carry forward | 33.9 | ' |
State And Local Jurisdiction [Member] | ' | ' |
Net operating loss carryforward | ' | ' |
Loss carry forward | 135.5 | 162.3 |
Canada Energy Partners Inc [Member] | Internal Revenue Service I R S [Member] | Capital Loss Carryforward [Member] | ' | ' |
Net operating loss carryforward | ' | ' |
Loss carry forward | 0.2 | ' |
Canada Energy Partners Inc [Member] | Internal Revenue Service I R S [Member] | Capital Loss Carryforward [Member] | Hudson Hope Gas Limited [Member] | ' | ' |
Net operating loss carryforward | ' | ' |
Valuation allowance related to the capital loss carryforward | $12.90 | ' |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Income tax expense reconciliation | ' | ' | ' | ' |
Amount computed using statutory rates | $20,294,613 | ' | $20,585,349 | ' |
State income taxes - net of federal benefit | 2,029,515 | ' | 2,066,374 | ' |
Valuation allowance | -22,363,601 | ' | -22,707,501 | ' |
Stock-based compensation shortfall | 636,443 | ' | 636,443 | ' |
Nondeductible items and other | 118,999 | ' | 141,554 | ' |
Income tax provision | 715,969 | ' | 722,219 | ' |
Income tax expense - discontinued operations | -709,719 | 0 | -709,719 | 0 |
Income tax expense - continuing operations | 6,250 | 6,250 | 12,500 | 12,500 |
Income tax expense reconciliation | ' | ' | ' | ' |
Amount computed using statutory rates (as a percent) | 34.00% | ' | 34.00% | ' |
State income taxes - net of federal benefit (as a percent) | 3.40% | ' | 3.41% | ' |
Valuation Allowance (as a percent) | -37.57% | ' | -37.51% | ' |
Stock-based compensation shortfall (as a percent) | 1.07% | ' | 1.05% | ' |
Nondeductible items and other (as a percent) | 0.30% | ' | 0.23% | ' |
Income tax provision (as a percent) | 1.20% | ' | 1.18% | ' |
Current deferred tax asset: | ' | ' | ' | ' |
Deferred Tax Asset Change in Amount | ' | ' | -22,700,000 | ' |
Valuation Allowance, Deferred Tax Asset, Change in Amount | ' | ' | 22,700,000 | ' |
Taxes Payable, Current | $700,000 | ' | $700,000 | ' |
Common_Stock_Details
Common Stock (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | |
Common Stock | ' | ' |
Common stock, par value (in dollars per share) | 0.001 | 0.001 |
Common stock, shares issued | 40,525,452 | 40,662,749 |
Common stock, shares outstanding | 40,515,020 | 40,652,317 |
Treasury stock (in shares) | 10,432 | 10,432 |
Restricted Stock [Member] | ' | ' |
Common Stock | ' | ' |
Shares | 134,420 | 158,065 |
Forfeited and canceled | 153 | ' |
Unvested and canceled | 2,724 | ' |
Series_A_Convertible_Redeemabl2
Series A Convertible Redeemable Preferred Stock (Details) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | |
Redeemable Convertible Preferred Stock [Member] | Redeemable Convertible Preferred Stock [Member] | Redeemable Convertible Preferred Stock [Member] | ||||
Series A Convertible Redeemable Preferred Stock | ' | ' | ' | ' | ' | ' |
Series A Convertible Redeemable Preferred Stock, par value (in dollars per share) | ' | $0.00 | $0.00 | ' | ' | ' |
Number of shares issued | ' | 6,381,359 | 6,000,571 | ' | 6,381,359 | 6,000,571 |
Number of shares outstanding | ' | 6,381,359 | 6,000,571 | ' | ' | ' |
Additional shares reserved for paid-in-kind dividends | ' | ' | ' | ' | 1,020,473 | ' |
Activity related to common stock (Number of Shares) | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period (in shares) | ' | ' | ' | 6,000,571 | 6,000,571 | ' |
PIK Dividend Issued for Preferred Stock | ' | ' | ' | 187,461 | 193,327 | ' |
Balance at the end of the period (in shares) | ' | ' | ' | ' | 6,381,359 | ' |
Activity related to the preferred stock (Balance) | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | $45,907,692 | ' | $43,404,993 | $43,404,993 | $43,404,993 | ' |
Accretion of discount on Preferred Stock | ' | ' | ' | ' | 1,349,909 | ' |
PIK Dividend Issued for Preferred Stock | ' | ' | ' | 599,875 | 552,915 | ' |
Balance at the end of the period | ' | ' | $43,404,993 | ' | $45,907,692 | ' |
Conversion of Stock, Shares Converted | 49,087,376 | ' | ' | ' | ' | ' |
ShareBased_Awards_Details
Share-Based Awards (Details) (USD $) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2014 | Jun. 30, 2014 | |
Share-Based Awards | ' | ' |
Reduction in General and administrative expenses | $40,560 | $40,560 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) | Jun. 30, 2014 |
item | |
Commitments and Contingencies | ' |
Number of environmental or other regulatory matters, reasonably expected to result in a material liability | 0 |