Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 08, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Breitburn Energy Partners LP | |
Entity Central Index Key | 1,357,371 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 213,789,296 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash | $ 10,424 | $ 71,124 |
Accounts and other receivables, net | 536,548 | 549,544 |
Related party receivables (note 4) | 587 | 860 |
Inventory | 1,637 | 998 |
Prepaid expenses and other current assets | 9,282 | 8,230 |
Total current assets | 558,478 | 630,756 |
Equity investments | 5,550 | 7,160 |
Property, plant and equipment | ||
Oil and natural gas properties | 7,959,537 | 7,907,136 |
Other property, plant and equipment | 189,425 | 192,724 |
Property, Plant and Equipment, Gross | 8,148,962 | 8,099,860 |
Accumulated depletion, depreciation, and impairment (note 5) | (4,831,025) | (4,686,214) |
Net property, plant and equipment | 3,317,937 | 3,413,646 |
Other long-term assets | ||
Other long-term assets (note 6) | 65,869 | 63,846 |
Total assets | 3,947,834 | 4,115,408 |
Current liabilities | ||
Accounts payable | 52,731 | 47,838 |
Current portion of long-term debt (note 7) | 1,198,259 | 1,198,259 |
Current portion of asset retirement obligation | 5,031 | 5,905 |
Revenue and royalties payable | 35,606 | 37,271 |
Wages and salaries payable | 11,489 | 11,057 |
Accrued interest payable | 610 | 21,064 |
Production and property taxes payable | 15,630 | 15,340 |
Other current liabilities | 13,979 | 17,466 |
Total current liabilities | 1,333,335 | 1,354,200 |
Liabilities subject to compromise (note 2) | 1,878,781 | 1,879,176 |
Long-term debt (note 7) | 3,109 | 3,094 |
Deferred income taxes | 2,591 | 2,771 |
Asset retirement obligation (note 9) | 260,199 | 252,589 |
Other long-term liabilities | 17,142 | 17,551 |
Total liabilities | 3,495,157 | 3,509,381 |
Commitments and contingencies (note 10) | ||
Equity | ||
Series A preferred units, 8.0 million units issued and outstanding at each of June 30, 2017 and December 31, 2016 (note 11) | 193,215 | 193,215 |
Series B preferred units, 49.6 million units issued and outstanding at each of June 30, 2017 and December 31, 2016 (note 11) | 359,611 | 359,611 |
Common unitholders' (deficit) equity, 213.8 million units issued and outstanding at each of June 30, 2017 and December 31, 2016 (note 11) | (109,115) | 45,158 |
Accumulated other comprehensive income (note 12) | 1,453 | 1,032 |
Total partners' equity | 445,164 | 599,016 |
Noncontrolling interest | 7,513 | 7,011 |
Total equity | 452,677 | 606,027 |
Total liabilities and equity | $ 3,947,834 | $ 4,115,408 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parentheticals) - shares shares in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Common units issued and outstanding | 213.8 | |
Common Unit, Outstanding | 213.8 | 213.8 |
Preferred Units [Member] | ||
Common units issued and outstanding | 8 | 8 |
Preferred Units B [Member] | ||
Common units issued and outstanding | 49.6 | 49.6 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Revenues and other income items | |||||
Oil, natural gas and natural gas liquid sales | $ 136,703 | $ 127,282 | $ 283,979 | $ 232,732 | |
Loss on commodity derivative instruments, net (note 3) | 0 | (92,210) | 0 | (54,287) | |
Other revenue, net | 4,406 | 4,362 | 8,860 | 8,955 | |
Total revenues and other income items | 141,109 | 39,434 | 292,839 | 187,400 | |
Operating costs and expenses | |||||
Operating costs | 93,724 | 83,795 | 193,512 | 178,769 | |
Depletion, depreciation and amortization | 63,197 | 81,960 | 136,561 | 165,683 | |
Impairment of oil and natural gas properties (note 5) | 321 | 0 | 17,211 | 2,793 | |
General and administrative expenses | 17,197 | 16,270 | 34,769 | 37,684 | |
Restructuring costs (note 14) | 0 | 2,439 | 0 | 5,248 | |
Loss (gain) on sale of assets | 8 | (2) | 7 | (12,262) | |
Total operating costs and expenses | 174,447 | 184,462 | 382,060 | 377,915 | |
Operating loss | (33,338) | (145,028) | (89,221) | (190,515) | |
Interest expense, net of capitalized interest | 23,024 | 49,917 | 45,105 | 105,906 | |
(Gain) loss on interest rate swaps (note 3) | 0 | (533) | 0 | 1,810 | |
Other (income) expense, net | (204) | (130) | (341) | 152 | |
Reorganization Items | 10,167 | 66,897 | 20,507 | 66,897 | |
Loss before taxes | (66,325) | (261,179) | (154,492) | (365,280) | |
Income tax (benefit) expense | (533) | 371 | (431) | 276 | |
Net loss | (65,792) | (261,550) | (154,061) | (365,556) | |
Less: Net income (loss) attributable to noncontrolling interest | 172 | (235) | 213 | (455) | |
Net loss attributable to the partnership | (65,964) | (261,315) | (154,274) | (365,101) | |
Less: Distributions to Series A preferred unitholders | 0 | 2,017 | 0 | 6,142 | |
Less: Non-cash distributions to Series B preferred unitholders | 0 | 3,737 | 0 | 11,123 | |
Net loss used to calculate basic and diluted net loss per unit | $ (65,964) | $ (267,069) | $ (154,274) | $ (382,366) | |
Basic net loss per common unit | $ (0.31) | $ (1.25) | $ (0.72) | $ (1.79) | |
Diluted net loss per unit | $ (0.31) | $ (1.25) | $ (0.72) | $ (1.79) | |
Basic weighted average units outstanding | [1] | 213,789 | 213,779 | 213,789 | 213,720 |
Diluted weighted average units outstanding | 213,789 | 213,779 | 213,789 | 213,720 | |
[1] | We had no participating securities outstanding during the three months and six months ended June 30, 2017. The three months and six months ended June 30, 2016 exclude 20,429 and 19,222, respectively, of weighted average anti-dilutive units from the calculation of the denominator for basic earnings per common unit, as we were in a loss position. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net loss | $ (65,792) | $ (261,550) | $ (154,061) | $ (365,556) | |
Other comprehensive (loss) income, net of tax: | |||||
Change in fair value of available-for-sale securities | [1] | (158) | 263 | 751 | 733 |
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, after Tax | [2] | 1 | (781) | (41) | (781) |
Total other comprehensive (loss) income | (157) | (518) | 710 | (48) | |
Total comprehensive income loss | (65,949) | (262,068) | (153,351) | (365,604) | |
Less: Comprehensive loss attributable to noncontrolling interest | 108 | (447) | 503 | (475) | |
Comprehensive loss attributable to the partnership | $ (66,057) | $ (261,621) | $ (153,854) | $ (365,129) | |
[1] | Net of income tax (benefit) expense of $(0.6) million and $0.1 million for the three months ended June 30, 2017 and 2016, respectively. Net of income tax (benefit) expense of $(0.4) million and $0.4 million for the six months ended June 30, 2017 and 2016, respectively. | ||||
[2] | Net of income tax expense (benefit) of less than $0.1 million and $(0.4) million for the three months ended June 30, 2017 and 2016, respectively. Net of income tax expense (benefit) of less than $0.1 million and $(0.4) million for the six months ended June 30, 2017 and 2016, respectively. |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Loss (Unaudited) (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Other Comprehensive Income (Loss), Available-for-sale Securities, Tax | $ (0.6) | $ 0.1 | $ (0.4) | $ 0.4 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax | $ 0.1 | $ (0.4) | $ 0.1 | $ (0.4) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities | ||
Net loss | $ (154,061) | $ (365,556) |
Adjustments to reconcile to cash flows from operating activities: | ||
Depletion, depreciation and amortization | 136,561 | 165,683 |
Impairment of oil and natural gas properties | 17,211 | 2,793 |
Unit-based compensation expense | 0 | 10,075 |
Loss on derivative instruments | 0 | 56,097 |
Derivative instrument settlement receipts | 0 | 172,199 |
Income from equity affiliates, net | 1,610 | (223) |
Deferred income taxes | (180) | (308) |
Gain on sale of assets | 7 | (12,262) |
Non-cash reorganization items | 292 | 48,829 |
Amortization and write-off of debt issuance costs | 0 | 24,943 |
Other | (3,741) | 1,489 |
Changes in net assets and liabilities | ||
Accounts receivable and other assets | 10,374 | 4,156 |
Inventory | (639) | (435) |
Net change in related party receivables and payables | 273 | 873 |
Accounts payable and other liabilities | (20,808) | 52,641 |
Net cash (used in) provided by operating activities | (13,101) | 160,994 |
Cash flows from investing activities | ||
Property acquisitions, net of cash acquired | (1,962) | (5,983) |
Capital expenditures | (44,327) | (46,287) |
Proceeds from sale of assets | 350 | 11,797 |
Proceeds from sale of available-for-sale securities | 89 | 6,319 |
Purchases of available-for-sale securities | (92) | (6,893) |
Net cash used in investing activities | (45,942) | (41,047) |
Cash flows from financing activities | ||
Distributions to preferred unitholders | 0 | (5,501) |
Proceeds from issuance of long-term debt, net | 0 | 37,329 |
Repayments of long-term debt | 0 | (69,000) |
Proceeds from Issuance of Secured Debt | 3,000 | 0 |
Repayments of Secured Debt | (3,000) | 0 |
Principal payments on capital lease obligations | 0 | (39) |
Change in bank overdraft | 8 | (65) |
Payments of Financing Costs | (1,665) | (2,672) |
Long-term debt issuance costs | 0 | (3) |
Net cash used in financing activities | (1,657) | (39,951) |
(Decrease) increase in cash | (60,700) | 79,996 |
Cash beginning of period | 71,124 | 10,464 |
Cash end of period | $ 10,424 | $ 90,460 |
Organization and Basis of Prese
Organization and Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation The accompanying unaudited condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 (“ 2016 Annual Report”). The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The information reported herein reflects all normal recurring adjustments that are, in the opinion of management, considered necessary for a fair statement of our financial position at June 30, 2017 , our operating results for the three months and six months ended June 30, 2017 and 2016 and our cash flows for the six months ended June 30, 2017 and 2016 have been included. Operating results for the three months and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ended December 31, 2017 . The consolidated balance sheet at December 31, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in our 2016 Annual Report. We follow the successful efforts method of accounting for oil and natural gas activities. Depletion, depreciation and amortization (“DD&A”) of proved oil and natural gas properties is computed using the units-of-production method, net of any estimated residual salvage values. Chapter 11 Cases On May 15, 2016 (the “Chapter 11 Filing Date”), we and certain of our subsidiaries filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. See Note 2 for a discussion of the Chapter 11 Cases (as defined in Note 2). The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. See Note 2 for a discussion of our liquidity and ability to continue as a going concern. Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09 (Topic 606), Revenue from Contracts with Customers . Topic 606 supersedes the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition , and requires entities to recognize revenue at an amount that reflects the consideration to which it expects to be entitled in exchange for transferring goods or services to a customer. Topic 606 also requires disclosures sufficient to enable users to understand an entity’s nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Topic 606 becomes effective January 1, 2018 and permits the use of either the full retrospective or cumulative effect transition method upon adoption. We intend to use the modified retrospective transition method applied to the contracts not yet complete as of the date of initial adoption, and to recognize the cumulative effect adjustment to our opening retained earnings balance in the period of adoption. We are continuing to evaluate the effect that adoption of Topic 606 will have on our consolidated financial statements and related disclosures, specifically principal versus agent considerations and gas imbalance arrangements. We are also continuing to monitor developments regarding Topic 606 that are unique to the oil and natural gas industry. In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments provide guidance on financial instruments specifically related to (i) the classification and measurement of investments in equity securities, (ii) the presentation of certain fair value changes for financial liabilities measured at fair value and (iii) certain disclosure requirements associated with the fair value of financial instruments. ASU 2016-01 is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. A cumulative-effect adjustment to beginning retained earnings is required as of the beginning of the fiscal year in which this ASU is adopted. The adoption of this ASU will not have a significant impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which requires recognizing a right-of-use lease asset and a lease liability on the balance sheet. Lessees are permitted to make an accounting policy to elect not to recognize lease assets and lease liabilities for leases with a term of 12 months or less, and to recognize lease expense on a straight-line basis over the lease term. These new requirements become effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. We are assessing the impact that ASU 2016-02 will have on our consolidated financial statements. This ASU will primarily be applicable to existing office leases and equipment leasing arrangements with terms in excess of 12 months. In March 2016, the FASB issued ASU 2016-09, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . The amendments simplify certain areas of accounting for share-based payment transactions, including classification of awards as either equity or liability, classification on the statement of cash flows, and election of accounting policy to estimate forfeitures or recognize forfeitures when they occur. The amendments are effective for annual and interim periods beginning after December 15, 2016. Early adoption is permitted, however, adoption of all of the amendments are required in the same period of adoption. As of December 31, 2016, all unvested equity awards were canceled, and, therefore, the adoption of this ASU had no impact on the financial statements presented in this report. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments. The objective of this update is to provide more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. We are assessing the impact that ASU 2016-13 will have on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. This update was issued to reduce diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flows, including debt prepayment or debt extinguishment costs, proceeds from the settlement of insurance claims and distributions received from equity method investees. ASU 2016-15 is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. We are assessing the impact that ASU 2016-15 will have on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . To reduce diversity in practice, this update requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The adoption of this ASU will impact the reconciliation of beginning and ending cash flow on our statements of cash flows, as it requires the inclusion of restricted cash. |
Chapter 11 Cases and Liquidity
Chapter 11 Cases and Liquidity (Notes) | 6 Months Ended |
Jun. 30, 2017 | |
Chapter 11 Cases [Abstract] | |
Reorganization under Chapter 11 of US Bankruptcy Code Disclosure [Text Block] | Chapter 11 Cases and Liquidity Chapter 11 Cases On May 15, 2016, we and 21 of our subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (collectively, the “Chapter 11 Petitions” and the cases commenced thereby, the “Chapter 11 Cases”) under chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Chapter 11 Cases are being jointly administered under the caption “In re Breitburn Energy Partners LP, et al.,” Case No. 16-11390 . No trustee has been appointed and we continue to manage ourselves and our affiliates and operate our businesses as “debtors in possession” subject to the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. To assure ordinary course operations, we received approval from the Bankruptcy Court on a variety of “first day” motions, including motions that authorize us to maintain our existing cash management system, to secure debtor-in-possession financing and other customary relief. In connection with the Chapter 11 Cases, Breitburn Operating LP (“BOLP”) entered into the Debtor-in-Possession Credit Agreement, dated as of May 19, 2016, among itself, as borrower, Breitburn Energy Partners LP (the “Partnership”), as parent guarantor, the financial institutions from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent, swing line lender and issuing lender (as amended, the “DIP Credit Agreement”). The other Debtors have guaranteed all obligations under the DIP Credit Agreement. See Note 8 for a discussion of the DIP Credit Agreement. On December 13, 2016, the Bankruptcy Court entered an order approving the First Amendment to the DIP Credit Agreement, effective as of December 15, 2016, by and among the DIP Borrower, the lenders party thereto (the “DIP Lenders”) and the Administrative Agent (the “First Amendment”). The First Amendment, among other things, (i) extended the DIP Credit Agreement’s scheduled maturity date to June 30, 2017, (ii) increased certain pricing, (iii) increased the committed amount available under the DIP Credit Agreement from $75 million to $150 million, (iv) increased the letter of credit sublimit from $50 million to $100 million and (v) provided for the payment of certain fees to the Administrative Agent and the DIP Lenders . On May 10, 2017, the Bankruptcy Court entered an order approving the Third Amendment to the DIP Credit Agreement, effective as of May 11, 2017, by and among the DIP Borrower, the Partnership, the DIP Lenders and the Administrative Agent (the “Third Amendment”). The Third Amendment, among other things, extended the DIP Credit Agreement’s scheduled maturity date to September 30, 2017 and provided for the payment of certain fees to the Administrative Agent and the DIP Lenders. ASC 852-10, Reorganizations , applies to entities that have filed a petition for relief under chapter 11 of the Bankruptcy Code. In accordance with ASC 852-10, transactions and events directly associated with the reorganization are required to be distinguished from the ongoing operations of the business. In addition, the guidance requires changes in the accounting and presentation of liabilities, as well as expenses and income directly associated with the Chapter 11 Cases. The commencement of the Chapter 11 Cases resulted in the acceleration of the Debtors’ obligations under the Third Amended and Restated Credit Agreement, dated as of November 19, 2014, by and among BOLP, as borrower, the Partnership, as parent guarantor, the lenders from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent, swing line lender and issuing lender (as amended, the “RBL Credit Agreement”), and the indentures governing our 9.25% Senior Secured Second Lien Notes due 2020 (“Senior Secured Notes”), our 8.625% Senior Notes due 2020 (“2020 Senior Notes”) and our 7.875% Senior Notes due 2022 (“2022 Senior Notes,” and together with the 2020 Senior Notes, the “Senior Unsecured Notes”). Any efforts to enforce such obligations are automatically stayed as a result of the filing of the Chapter 11 Petitions and the holders’ rights of enforcement in respect of these obligations are subject to the applicable provisions of the Bankruptcy Code. See Note 8 for a discussion of our RBL Credit Agreement (which has been reclassified from long-term debt to current portion of long-term debt on our consolidated balance sheets) and our Senior Secured Notes and Senior Unsecured Notes (which have been reclassified from long-term debt to liabilities subject to compromise on our consolidated balance sheets). We are making adequate protection payments with respect to the RBL Credit Agreement, reflected in interest expense, net of capitalized interest on the consolidated statements of operations, consisting of the payment of interest (at the default rate) and the payment of all reasonable fees and expenses of professionals retained by our lenders, as provided for in the RBL Credit Agreement. We are also making adequate protection payments with respect to the Senior Secured Notes in the form of the payment of all reasonable fees and expenses of professionals retained by the holders of the Senior Secured Notes. The commencement of the Chapter 11 Cases also resulted in a termination right by our counterparties on our commodity and interest rate derivative instruments. See Note 3 for a discussion of the derivative instruments, which were terminated, and resulted in $460.0 million in estimated hedge settlements receivable and $4.1 million in estimated hedge settlements payable, reflected in accounts and other receivables, net and other current liabilities, respectively, on the consolidated balance sheet at each of June 30, 2017 and December 31, 2016 , respectively. Effect of Filing on Creditors and Unitholders On April 14, 2016, we elected to suspend the declaration of any further distributions on our Series A Cumulative Redeemable Perpetual Preferred Units (“Series A Preferred Units”) and Series B Perpetual Convertible Preferred Units (“Series B Preferred Units”). In addition, we elected to defer a $33.5 million interest payment due with respect to our 2022 Senior Notes and a $13.2 million interest payment due with respect to our 2020 Senior Notes, with each such interest payment due on April 15, 2016 and subject to a 30-day grace period. As a consequence of the commencement of the Chapter 11 Cases, such interest payments have not been made, and are classified as liabilities subject to compromise on the consolidated balance sheet at June 30, 2017 and December 31, 2016 . On May 15, 2016, we filed the Chapter 11 Petitions. Under the priority scheme established by the Bankruptcy Code, unless creditors agree otherwise, pre-petition liabilities and post-petition liabilities must be satisfied in full before the holders of our Series A Preferred Units, Series B Preferred Units and common units representing limited partner interests in us (“Common Units”) are entitled to receive any distribution or retain any property under a plan of reorganization. The ultimate recovery to creditors and/or unitholders, if any, will not be determined until confirmation and implementation of a plan of reorganization. No assurance can be given as to what distributions, if any, will be made to each of these constituencies or the nature thereof. As discussed below, if certain requirements of the Bankruptcy Code are met, a plan of reorganization can be confirmed notwithstanding its rejection or deemed rejection by the holders of our Series A Preferred Units, Series B Preferred Units and Common Units and notwithstanding the fact that such holders do not receive or retain any property on account of their equity interests under the plan. Because of such possibilities, the value of our securities, including our Series A Preferred Units, Series B Preferred Units and Common Units, is highly speculative. There can be no assurance that the holders of our Series A Preferred Units, Series B Preferred Units and Common Units will retain any value under a plan of reorganization. We believe it is highly likely that our Series A Preferred Units, Series B Preferred Units and Common Units will be canceled in our Chapter 11 Cases and that the holders thereof will not receive any distribution on account of their holdings. Executory Contracts . Subject to certain exceptions, under the Bankruptcy Code, the Debtors may assume, assign, or reject certain executory contracts and unexpired leases, subject to the approval of the Bankruptcy Court. The rejection of an executory contract or unexpired lease is generally treated as a pre-petition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves the Debtors of performing their future obligations under such executory contract or unexpired lease, but may give rise to a pre-petition general unsecured claim for damages caused by such deemed breach. The assumption of an executory contract or unexpired lease generally requires the Debtors to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance. By order of the Bankruptcy Court dated December 12, 2016, the Debtors assumed all of their executory contracts and unexpired leases related to their oil and gas operations to the extent such contracts and leases constituted commercial property leases under the purview of the Bankruptcy Code. Process for Plan of Reorganization . In order to successfully emerge from Chapter 11, the Debtors will need to obtain confirmation by the Bankruptcy Court of a plan of reorganization that satisfies the requirements of the Bankruptcy Code. A plan of reorganization generally provides for how pre-petition obligations and equity interests will be treated in satisfaction and discharge thereof, and provides for the means by which the plan of reorganization will be implemented. Fresh Start Accounting . We may be required to adopt fresh start accounting upon emergence from Chapter 11. Adopting fresh start accounting would result in the allocation of the reorganization value to individual assets based on their estimated fair values. The enterprise value of the equity of the emerging company is based on several assumptions and inputs contemplated in the future projections of the plan of reorganization and are subject to significant uncertainties. We currently cannot estimate the potential financial effect of fresh start accounting on our consolidated financial statements upon the emergence from Chapter 11, although we would expect to recognize material adjustments upon implementation of fresh-start accounting guidance upon emergence pursuant to a plan of reorganization. The assumptions for which there is a reasonable possibility of material impact affecting the reorganization value include, but are not limited to, management’s assumptions and capital expenditure plans related to the estimation of our oil and gas reserves. Debtors Condensed Combined Financial Statements. Two of our subsidiaries, Breitburn Collingwood Utica LLC and East Texas Salt Water Disposal Company (“ETSWDC”), are non-debtors (“Non-Debtors”). Accordingly, these entities will be accounted for under GAAP for entities not in bankruptcy and outside the scope of ASC 852. The Non-Debtors are minor subsidiaries, and, as such, we have not presented Debtors Condensed Combined Financial Statements. Costs of Reorganization The Debtors have incurred and will continue to incur significant costs associated with the Chapter 11 Cases. The amount of these costs, which are being expensed as incurred, are expected to significantly affect our results. The following table summarizes the components included in reorganization items, net on our consolidated statements of operations for the three months ended June 30, 2017 : Three Months Ended June 30, Six Months Ended June 30, Thousands of dollars 2017 2016 2017 2016 Debt discounts/premiums and issuance costs $ — $ 48,829 $ — $ 48,829 Advisory and professional fees 9,226 13,963 19,383 13,963 DIP Credit Agreement debt issuance costs 465 4,172 465 4,172 Other 476 (67 ) 659 (67 ) Reorganization items, net $ 10,167 $ 66,897 $ 20,507 $ 66,897 We use this category to reflect the net expenses and gains and losses that are the result of the reorganization and restructuring of the business. Advisory and professional fees included in the table above represent professional fees for post-petition expenses. As of June 30, 2017 , we had $12.7 million of accrued reorganization costs not yet paid included in accounts payable on the consolidated balance sheet, consisting primarily of advisory and professional fees. Liabilities Subject to Compromise Liabilities subject to compromise in our consolidated financial statements include pre-petition liabilities that may be affected by the plan of reorganization at the amounts expected to be allowed, even if they may be settled for lesser amounts. If there is uncertainty about whether a secured claim is under-secured, or will be impaired under the plan of reorganization, the entire amount of the claim is included in liabilities subject to compromise. Differences between liabilities we have estimated and the claims to be filed will be investigated and resolved in connection with the claims resolution process in the Chapter 11 Cases. We will continue to evaluate these liabilities throughout the Chapter 11 Cases and adjust amounts as necessary. Such adjustments may be material. Our consolidated financial statements include amounts classified as liabilities subject to compromise that we believe the Bankruptcy Court will allow as claim amounts resulting from the Debtors’ rejection of various executory contracts and unexpired leases and defaults under the debt agreements. Additional amounts may be included in liabilities subject to compromise in future periods if other executory contracts and unexpired leases are rejected. Conversely, the Debtors expect that the assumption of certain executory contracts and unexpired leases may convert certain liabilities currently shown in our financial statements as subject to compromise to post-petition liabilities. Due to the uncertain nature of many of the potential claims, the magnitude of such claims is not reasonably estimable at this time. Such claims may be material. The RBL Credit Agreement was fully collateralized at the Chapter 11 Filing Date and, as a result, has been classified as current portion of long-term debt on our consolidated balance sheets, rather than being classified as liabilities subject to compromise. The following table summarizes the components of liabilities subject to compromise included in our consolidated balance sheets as of June 30, 2017 and December 31, 2016 : As of Thousands of dollars June 30, 2017 December 31, 2016 Senior Unsecured Notes $ 1,155,000 $ 1,155,000 Senior Secured Notes 650,000 650,000 Accrued interest payable 61,908 61,908 Accounts payable 4,899 5,294 Distributions payable 6,974 6,974 Total liabilities subject to compromise $ 1,878,781 $ 1,879,176 Liquidity and Ability to Continue as a Going Concern Although we believe our cash on hand, cash flow from operations and borrowings available under the DIP Credit Agreement will be adequate to meet the operating costs of our existing business, there are no assurances that we will have sufficient liquidity to continue to fund our operations or allow us to continue as a going concern until a plan of reorganization is confirmed by the Bankruptcy Court and becomes effective, and thereafter. Our long-term liquidity requirements, the adequacy of our capital resources and our ability to continue as a going concern are difficult to predict at this time and ultimately cannot be determined until a plan of reorganization has been confirmed, if at all, by the Bankruptcy Court. In addition, we have incurred and continue to incur significant professional fees and costs in connection with the administration of the Chapter 11 Cases, including the fees and expenses of the professionals retained by two statutory committees appointed in the Chapter 11 Cases. We are making adequate protection payments with respect to the lenders under the RBL Credit Agreement, consisting of the payment of interest (at the default rate) and the payment of all reasonable fees and expenses of professionals retained by our lenders, as provided for in the RBL Credit Agreement. We are also making adequate protection payments with respect to the Senior Secured Notes in the form of the payment of all reasonable fees and expenses of professionals retained by the holders of the Senior Secured Notes. We anticipate that we will continue to incur significant professional fees and costs during the pendency of the Chapter 11 Cases. Given the uncertainty surrounding the Chapter 11 Cases, there is substantial doubt about our ability to continue as a going concern. The accompanying consolidated financial statements do not purport to reflect or provide for the consequences of the Chapter 11 Cases. In particular, the consolidated financial statements do not purport to show (i) as to assets, their realizable value on a liquidation basis or their fair value or their availability to satisfy liabilities; (ii) as to certain pre-petition liabilities, the amounts that may be allowed for claims or contingencies, or the status and priority thereof; (iii) as to unitholders’ equity accounts, the effect of any changes that may be made in our capitalization; or (iv) as to operations, the effect of any changes that may be made to our business. While operating as debtors in possession under chapter 11 of the Bankruptcy Code, the Debtors may sell or otherwise dispose of or liquidate assets or settle liabilities in amounts other than those reflected in our consolidated financial statements, subject to the approval of the Bankruptcy Court or otherwise as permitted in the ordinary course of business. Further, a plan of reorganization could materially change the amounts and classifications in our historical consolidated financial statements. In addition to the uncertainty resulting from the Chapter 11 Cases, oil and natural gas prices continue to remain low historically. During the six months ended June 30, 2014, 2015, 2016 and 2017, the WTI posted price averaged approximately $101 per Bbl, $53 per Bbl, $40 per Bbl and $50 per Bbl, respectively. During the six months ended June 30, 2014, 2015, 2016 and 2017, the Henry Hub posted price averaged approximately $4.89 per MMBtu, $2.82 per MMBtu, $2.07 per MMBtu and $3.05 per MMBtu. Our revenue, profitability and cash flow are highly sensitive to movements in oil and natural gas prices. Sustained depressed prices of oil and natural gas materially adversely affect our assets, development plans, results of operations and financial condition. The filing of the Chapter 11 Petitions triggered an event of default under each of the agreements governing our derivative transactions. As a result, our counterparties were permitted to terminate, and did terminate, all outstanding derivative transactions. As of June 30, 2017 , none of our estimated future production was covered by commodity derivatives, and we may not be able to enter into commodity derivatives covering our estimated future production on favorable terms or at all. As a result, we have significant exposure to fluctuations in oil and natural gas prices and our inability to hedge the risk of low commodity prices in the future, on favorable terms or at all, could have a material adverse impact on our business, results of operations and financial condition. If our future sources of liquidity are insufficient, we could face substantial liquidity constraints and be unable to continue as a going concern and would likely be required to implement further cost reductions, significantly reduce, delay or eliminate capital expenditures, seek other financing alternatives or seek the sale of some or all of our assets. If we (i) continue to limit, defer or eliminate future capital expenditure plans, (ii) are unsuccessful in developing reserves and adding production through our capital program or (iii) implement cost-cutting efforts that are too overreaching, the value of our oil and natural gas properties and our financial condition and results of operations could be adversely affected. We have been managing our operating activities and liquidity carefully in light of the uncertainty regarding future oil and natural gas prices and the Chapter 11 Cases. To fund capital expenditures, we will be required to use cash on hand, cash generated from operations or borrowings under the DIP Credit Agreement, or some combination thereof. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
Financial Instruments and Fair Value Measurement | Financial Instruments and Fair Value Measurements Our risk management programs are intended to reduce our exposure to commodity prices and interest rates and to assist with stabilizing cash flows. Historically, we have utilized derivative financial instruments to reduce this volatility. Chapter 11 Cases The filing of the Chapter 11 Petitions triggered an event of default under each of the agreements governing our derivative transactions (“ISDA Agreements”). As a result, our counterparties were permitted to terminate, and did terminate, all outstanding transactions governed by the ISDA Agreements. The termination date for each outstanding transaction is the termination date specified to us by our counterparties. The derivative transactions are no longer accounted for at fair value under ASC 815, because they were terminated in connection with our filing of the Chapter 11 Petitions and have been evaluated as receivables or payables at termination value. At the termination dates, expected settlement receipts on terminated contracts were reclassified from current and long-term derivative instrument assets to accounts and other receivables, net on the consolidated balance sheets and expected settlement payments on terminated contracts were reclassified from current and long-term derivative instrument liabilities to other current liabilities on the consolidated balance sheets. At each of June 30, 2017 and December 31, 2016 , we had $460.0 million of estimated hedge settlements receivable and $4.1 million in estimated hedge settlements payable, reflected in accounts and other receivables, net and other current liabilities on the consolidated balance sheet, respectively. On July 19, 2017, the Bankruptcy Court authorized the release of the Hedge Proceeds, to be applied to the payment of the Hedge Termination Obligations, with the remaining Hedge Proceeds to be applied as a dollar-for-dollar reduction of outstanding obligations under the RBL Credit Agreement. See Note 15 for information. All of our derivative counterparties were lenders, or affiliates of lenders, under the RBL Credit Agreement (see Note 8). In connection with Bankruptcy Court approval of the DIP Credit Agreement, our counterparties were permitted to terminate, and did terminate, all outstanding derivative transactions and to calculate the amounts due to or from the Debtors as a result of such terminations, in accordance with the terms of the governing agreements. Each such counterparty was required to hold any proceeds due to the Debtors (“Hedge Proceeds”) in a book entry account maintained by it pursuant to and subject to the provisions of the order of the Bankruptcy Court approving the DIP Credit Agreement, with the rights of all of the parties reserved as to the ultimate disposition of the proceeds. Payables due to our counterparties (“Hedge Termination Obligations”) with respect to our derivative obligations constituted secured obligations under the RBL Credit Agreement. Because the RBL Credit Agreement was fully collateralized at the Chapter 11 Filing Date, and is excluded from liabilities subject to compromise, settlements payable due to our counterparties were reflected in accounts payable on the consolidated balance sheet rather than in liabilities subject to compromise. We had no gains or losses on derivative instruments during the three months and six months ended June 30, 2017 . The following table presents gains and losses on derivative instruments during the three months and six months ended June 30, 2016 : Thousands of dollars Oil Commodity Derivatives (a) Natural Gas Commodity Derivatives (a) Interest Rate Derivatives (b) Total Financial Instruments Three Months Ended June 30, 2016 Net (loss) gain $ (71,720 ) $ (20,490 ) $ 533 $ (91,677 ) Six Months Ended June 30, 2016 Net loss $ (43,345 ) $ (10,942 ) $ (1,810 ) $ (56,097 ) (a) Included in loss on commodity derivative instruments, net on the consolidated statements of operations. (b) Included in gain (loss) on interest rate swaps on the consolidated statements of operations. Fair Value Measurements FASB Accounting Standards define fair value, establish a framework for measuring fair value and establish required disclosures about fair value measurements. They also establish a fair value hierarchy that prioritizes the inputs to valuation techniques into three broad levels based upon how observable those inputs are. We use valuation techniques that maximize the use of observable inputs and obtain the majority of our inputs from published objective sources or third-party market participants. We incorporate the impact of nonperformance risk, including credit risk, into our fair value measurements. The fair value hierarchy gives the highest priority of Level 1 to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority of Level 3 to unobservable inputs. We categorize our fair value financial instruments based upon the objectivity of the inputs and how observable those inputs are. The three levels of inputs are described further as follows: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities as of the reporting date. Level 2 – Inputs that are observable other than quoted prices that are included within Level 1. Level 2 includes financial instruments that are actively traded but are valued using models or other valuation methodologies. We consider the over-the-counter (“OTC”) commodity and interest rate swaps in our portfolio to be Level 2. Level 3 – Inputs that are not directly observable for the asset or liability and are significant to the fair value of the asset or liability. Level 3 includes financial instruments that are not actively traded and have little or no observable data for input into industry standard models. Certain OTC derivative instruments that trade in less liquid markets or contain limited observable model inputs are currently included in Level 3. Financial assets and liabilities that are categorized in Level 3 may later be reclassified to the Level 2 category at the point we are able to obtain sufficient binding market data. We had no transfers in or out of Levels 1, 2 or 3 during the three months and six months ended June 30, 2017 and 2016 . Our policy is to recognize transfers between levels as of the end of the period. Our assessment of the significance of an input to its fair value measurement requires judgment and can affect the valuation of the assets and liabilities as well as the category within which they are classified. Available-for-Sale Securities The fair value of our available for sale securities are estimated using actual trade data, broker/dealer quotes, and other similar data, which are obtained from quoted market prices, independent pricing vendors, or other sources. We validate the data provided by independent pricing services to make assessments and determinations as to the ultimate valuation of its investment portfolio by comparing such pricing against other third party pricing data. We consider the inputs to the valuation of our available for sale securities to be Level 1. Fair Value Hierarchy The following tables set forth, by level within the hierarchy, the fair value of our financial instrument assets that were accounted for at fair value on a recurring basis. All fair values reflected below and on the consolidated balance sheets have been adjusted for nonperformance risk. Thousands of dollars Level 1 Level 2 Level 3 Total As of June 30, 2017 Available-for-sale securities Equities 1,620 — — 1,620 Mutual funds 11,742 — — 11,742 Exchange traded funds 8,181 — — 8,181 Net assets $ 21,543 $ — $ — $ 21,543 Thousands of dollars Level 1 Level 2 Level 3 Total As of December 31, 2016 Available-for-sale securities Equities 1,492 — — 1,492 Mutual funds 11,229 — — 11,229 Exchange traded funds 7,675 — — 7,675 Net assets $ 20,396 $ — $ — $ 20,396 Credit and Counterparty Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of accounts receivable, including hedge settlements receivable. Our hedge settlements receivable expose us to credit risk from counterparties. As of June 30, 2017 , our hedge settlements receivable were due from Bank of Montreal, Barclays Bank PLC, BNP Paribas, Canadian Imperial Bank of Commerce, Citibank, N.A, Comerica Bank, Credit Suisse Energy LLC, Credit Suisse International, ING Capital Markets LLC, Fifth Third Bank, JP Morgan Chase Bank N.A., Merrill Lynch Commodities, Inc., Morgan Stanley Capital Group Inc., PNC Bank, N.A, Royal Bank of Canada, The Bank of Nova Scotia, The Toronto-Dominion Bank, MUFG Union Bank N.A. and Wells Fargo Bank, N.A. All of our counterparties were lenders, or affiliates of lenders, under the RBL Credit Agreement. The RBL Credit Agreement is secured by our oil, NGL and natural gas reserves, so we are not required to post any collateral, and we conversely do not receive collateral from our counterparties. On all transactions where we are exposed to counterparty risk, we analyze the counterparty’s financial condition prior to entering into an agreement, establish limits and monitor the appropriateness of these limits on an ongoing basis. Although we currently do not believe we have a specific counterparty risk with any party, our loss could be substantial if any of these parties were to fail to perform in accordance with the terms of the contract. This risk has been managed by diversifying our derivatives portfolio. As of June 30, 2017 , each of these financial institutions had an investment grade credit rating from Moody’s Investors Service and Standard & Poor’s. On July 19, 2017, the Bankruptcy Court authorized the release of the Hedge Proceeds, to be applied to the payment of the Hedge Termination Obligations, with the remaining Hedge Proceeds to be applied as a dollar-for-dollar reduction of outstanding obligations under the RBL Credit Agreement. See Note 15 for more information. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Breitburn Management Company LLC (“Breitburn Management”), our wholly-owned subsidiary, operates our assets and performs other administrative services for us such as accounting, corporate development, finance, land administration, legal and engineering. All of our employees, including our executives, are employees of Breitburn Management. Breitburn Management also provided administrative services to Pacific Coast Energy Company LP (“PCEC”), our predecessor, under an administrative services agreement (as amended, the “Administrative Services Agreement”), in exchange for a monthly fee for indirect expenses and reimbursement for all direct expenses, including incentive compensation plan costs and direct payroll and administrative costs related to PCEC properties and operations. PCEC and Breitburn Management agreed to terminate the Administrative Services Agreement effective June 30, 2016. Upon termination of the Administrative Services Agreement on June 30, 2016, PCEC was no longer considered a related party, as Breitburn Management and its management team no longer managed or had significant influence over PCEC. For the each of three months and six months ended June 30, 2016 , the monthly fee paid by PCEC for indirect expenses was $0.7 million . For the three months and six months ended June 30, 2016 , the monthly charges to PCEC for indirect expenses totaled $2.1 million and $4.2 million , and charges for direct expenses including payroll and administrative costs totaled $2.4 million and $4.4 million , respectively. At June 30, 2017 and December 31, 2016 , we had receivables of $0.6 million and $0.9 million , respectively, due from certain of our other affiliates, representing investments in natural gas processing facilities, primarily for management fees and operational expenses incurred on their behalf. On June 7, 2016, PCEC, Pacific Coast Energy Holdings LLC (“PCEH”) and PCEC (GP) LLC (collectively, the “PCEC Parties”) provided written notice to the Partnership, Breitburn GP LLC and Breitburn Management (collectively, the “Breitburn Parties”) of their intent to terminate the Omnibus Agreement, dated August 26, 2008, among the PCEC Parties and the Breitburn Parties (as amended, the “Omnibus Agreement”), effectively immediately. The Omnibus Agreement detailed rights between the PCEC Parties and the Breitburn Parties with respect to certain business opportunities. Pursuant to Section 4.12 of the Omnibus Agreement, either PCEH, on behalf of the PCEC Parties, or Breitburn Management, on behalf of the Breitburn Parties, had the right to terminate the Omnibus Agreement at such time as PCEC and Breitburn Management ceased to be under common management or upon the termination of the Administrative Services Agreement, which occurred on June 30, 2016, as discussed. |
Impairments
Impairments | 6 Months Ended |
Jun. 30, 2017 | |
Impairment or Disposal of Tangible Assets Disclosure [Abstract] | |
Impairments | Impairments Long-Lived Assets We review our oil and gas properties for impairment periodically or when events or circumstances indicate that their carrying amounts may exceed their fair values and may not be recoverable. Under the successful efforts method of accounting, the carrying amount of an oil and gas property to be held and used is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the property. Due to the nature of the recoverability test, certain oil and gas properties may have carrying values which exceed their fair values, but an impairment charge is not recognized because their carrying values are less than their undiscounted cash flows. Determination as to whether and how much an asset is impaired involves management estimates on highly uncertain matters such as future commodity prices, the effects of inflation and technology improvements on operating expenses, production profiles and the outlook for market supply and demand conditions for oil and natural gas. For purposes of assessing our oil and gas properties for potential impairment, management reviews the expected undiscounted future cash flows for our total proved and, in certain instances, risk-adjusted probable and possible reserves on a held and used basis based in large part on future capital and operating plans. The undiscounted cash flow review includes inputs such as applicable NYMEX forward strip prices, estimated basis price differentials, expenses and capital estimates, and escalation factors. Management also considers the impact future price changes are likely to have on our future operating plans. Undiscounted future cash flows were forecast using applicable basis adjusted (i) nine-year NYMEX forward strip prices for oil, and (ii) ten-year NYMEX forward strip prices for natural gas, in each case, at the end of the reporting period, and escalated along with expenses and capital starting in (i) year ten for oil and (ii) year eleven for natural gas, and thereafter at 2% per year. Production and development cost estimates (e.g. operating expenses and development capital) are conformed where applicable to reflect the commodity price strip used. For impairment charges, the associated property’s expected future net cash flows were discounted using a market-based long-term weighted average cost of capital rate that approximated 14% at June 30, 2017 and 13% at December 31, 2016 . There were no impairments during the three months ended June 30, 2016. We consider the inputs for our impairment calculations to be Level 3 inputs. The impairment reviews and calculations are based on assumptions that are consistent with our business plan. At June 30, 2017 , the assumptions from our business plan were included in our impairment reserves analysis. For certain impaired fields, recent operating performance resulted in lower production estimates than previously forecast. Our business plan was prepared with the assumption that we emerge from Chapter 11 and continue to hold and use our assets for their economic lives up to and including final dispositions. Other assumptions and/or revisions in our business plan could result in material changes to the undiscounted cash flows used in our impairment analysis. Accordingly, we cannot estimate what impact, if any, other assumptions or courses of action or their probabilities of occurrence could have on our undiscounted cash flows at June 30, 2017 . Non-cash impairment charges totaled $0.3 million for the three months ended June 30, 2017 , including $0.2 million in California and $0.1 million in the Southeast, primarily related to lower future production expected from certain lower margin properties. There were no impairments during the three months ended June 30, 2016. Non-cash impairment charges totaled $17.2 million for the six months ended June 30, 2017 , including $11.9 million in the Rockies, $4.8 million in the Permian Basin, $0.3 million in the Southeast and $0.2 million in California, primarily related to the impact of the drop in commodity strip prices on projected future revenues of lower margin properties. Impairments totaled $2.8 million for the six months ended June 30, 2016 , including $2.1 million in the Southeast, $0.5 million in the Permian Basin, and $0.2 million in the Rockies. Management prepared its undiscounted cash flow estimates on a held and used basis which assumes oil and gas properties will be held and used for their economic lives. If a decision is reached to sell a particular asset, that asset would be classified as held for sale and could potentially be impaired if the carrying value exceeded the estimated sales value less the costs of disposal. It is also possible that further periods of prolonged lower commodity prices, future declines in commodity prices, changes to our future plans in response to a final plan of reorganization, or increases in operating costs could result in future impairments. Additionally, the oil and gas assets may be further adjusted in the future due to the outcome of Chapter 11 Cases or adjusted to fair value if we are required to apply fresh start accounting upon emergence from Chapter 11. |
Other Long-Term Assets
Other Long-Term Assets | 6 Months Ended |
Jun. 30, 2017 | |
Other Assets [Abstract] | |
Other Long-Term Assets | Other Long-Term Assets As of June 30, 2017 and December 31, 2016 , our other long-term assets were as follows: As of Thousands of dollars June 30, 2017 December 31, 2016 Available-for-sale securities $ 21,543 $ 20,396 Deposit for Jay Field net profit interest obligation 18,263 18,263 Property reclamation deposit 10,752 10,738 Other 15,311 14,449 Total $ 65,869 $ 63,846 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2017 | |
Long-term Debt, Unclassified [Abstract] | |
Long-Term Debt | Debt Our debt is detailed in the following table: As of Thousands of dollars June 30, 2017 December 31, 2016 RBL Credit Agreement $ 1,198,259 $ 1,198,259 Promissory note 2,938 2,938 Senior Secured Notes 650,000 650,000 2020 Senior Notes 305,000 305,000 2022 Senior Notes 850,000 850,000 Capital lease obligations 171 156 Total debt $ 3,006,368 $ 3,006,353 Less: Current portion of debt (1,198,259 ) (1,198,259 ) Less: Amounts reclassified to liabilities subject to compromise (1,805,000 ) (1,805,000 ) Total long-term debt $ 3,109 $ 3,094 DIP Credit Agreement In connection with the Chapter 11 Cases, BOLP entered into the DIP Credit Agreement, as borrower, with the lenders party thereto (the “DIP Lenders”) and Wells Fargo, National Association, as administrative agent. The other Debtors have guaranteed all obligations under the DIP Credit Agreement. Pursuant to the terms of the DIP Credit Agreement, the DIP Lenders made available a revolving credit facility in an aggregate principal amount of $150 million , which includes a letter of credit facility available for the issuance of letters of credit in an aggregate principal amount not to exceed a sublimit of $100 million , and a swingline facility in an aggregate principal amount not to exceed a sublimit of $5 million , in each case, to mature on the earlier to occur of (A) the effective date of a plan of reorganization in the Chapter 11 Cases or (B) the scheduled maturity of the DIP Credit Agreement of June 30, 2017. In addition, the maturity date may be accelerated upon the occurrence of certain events as set forth in the DIP Credit Agreement. On May 10, 2017, the Bankruptcy Court entered an order approving the Third Amendment to the DIP Credit Agreement, effective as of May 11, 2017. The Third Amendment, among other things, extended the DIP Credit Agreement’s scheduled maturity date to September 30, 2017 and provided for the payment of certain fees to the Administrative Agent and the DIP Lenders. The proceeds of the DIP Credit Agreement may be used: (i) to pay the costs and expenses of administering the Chapter 11 Cases, (ii) to fund our working capital needs, capital improvements, and other general corporate purposes, in each case, in accordance with an agreed budget and (iii) to provide adequate protection to existing secured creditors. At June 30, 2017 and December 31, 2016 , we had no borrowings outstanding and $52.1 million and $37.9 million in letters of credit outstanding, respectively, under the DIP Credit Agreement. Acceleration of Debt Obligations The commencement of the Chapter 11 Cases resulted in the acceleration of the Debtors’ obligations under the RBL Credit Agreement, the Senior Secured Notes, and the Senior Unsecured Notes. Any efforts to enforce such obligations are automatically stayed as a result of the filing of the Chapter 11 Petitions and the holders’ rights of enforcement in respect of these obligations are subject to the applicable provisions of the Bankruptcy Code. RBL Credit Agreement BOLP, as borrower, and we and our wholly-owned subsidiaries, as guarantors, are party to a $5.0 billion revolving credit facility with Wells Fargo Bank, National Association, as administrative agent, swing line lender and issuing lender, and a syndicate of banks with a maturity date of November 19, 2019. We entered into the RBL Credit Agreement on November 19, 2014. The RBL Credit Agreement limited the amounts we could borrow to a borrowing base amount determined by the lenders at their sole discretion based on their valuation of our proved reserves and their internal criteria. At each of June 30, 2017 and December 31, 2016 , we had $1.2 billion in indebtedness outstanding under the RBL Credit Agreement. At the Chapter 11 Filing Date, we had $1.2 billion in aggregate principal amount outstanding under the RBL Credit Agreement, the borrowing base was $1.8 billion and the aggregate commitment from lenders was $1.4 billion . The RBL Credit Agreement is secured by a first priority security interest in and lien on substantially all of the Debtors’ assets, including the proceeds thereof and after-acquired property. We determined at the Chapter 11 Filing Date that the RBL Credit Agreement was fully collateralized. As a result of the automatic acceleration of our obligations under the RBL Credit Agreement as a consequence of the commencement of the Chapter 11 Cases, we reclassified the entire RBL Credit Agreement balance to current portion of long-term debt on the consolidated balance sheet. As of the Chapter 11 Filing Date, we recognized $15.7 million of interest expense for the full write-off of unamortized debt issuance costs related to the RBL Credit Agreement. We are required to make adequate protection payments to the lenders under the RBL Credit Agreement, which includes the payment of interest (at the default rate) and the payment of all reasonable fees and expenses of professionals retained by our lenders, as provided for in the RBL Credit Agreement. We are recognizing the default interest accrued on the RBL Credit Agreement as interest expense, net of capitalized interest on the consolidated statements of operations, and we are recognizing the adequate protection payments as accrued interest payable on the consolidated balance sheets, and we are recognizing the adequate protection payments as accrued interest payable on the consolidated balance sheets, rather than in liabilities subject to compromise. At June 30, 2017 , the default interest rate on the RBL Credit Agreement was 7.5% . The carrying value of the RBL Credit Agreement at June 30, 2017 and December 31, 2016 approximated fair value. We consider the fair value of the RBL Credit Agreement to be Level 2, as it is based on the current active market prime rate. On July 19, 2017, the Bankruptcy Court authorized the release of the Hedge Proceeds, to be applied to the payment of the Hedge Termination Obligations, with the remaining Hedge Proceeds to be applied as a dollar-for-dollar reduction of outstanding obligations under the RBL Credit Agreement. See Note 15 for more information. Senior Secured Notes As of June 30, 2017 and December 31, 2016 , we had $650 million in aggregate principal amount of 9.25% Senior Secured Notes due 2020 outstanding. Prior to the commencement of the Chapter 11 Cases, interest on our Senior Secured Notes was payable quarterly in March, June, September and December. Since the commencement of the Chapter 11 Cases on May 15, 2016, no interest has been paid to the holders of the Senior Secured Notes. As of June 30, 2017 , the Senior Secured Notes were reflected as liabilities subject to compromise on the consolidated balance sheet, with the carrying value equal to the face value of the notes of $650 million . In addition, as of the Chapter 11 Filing Date, the accrued but unpaid interest expense on the Senior Secured Notes of $7.5 million was reflected as liabilities subject to compromise. No interest expense was recognized on the Senior Secured Notes after the commencement of the Chapter 11 Cases. Unrecognized, contractual interest expense on the Senior Secured Notes for the three months and six months ended June 30, 2017 was $15.1 million and $30.1 million , respectively. Unrecognized, contractual interest expense on the Senior Secured Notes for each of the three months and six months ended June 30, 2016 was $7.5 million . As a result of the filing of the Chapter 11 Cases, the fair value of our Senior Secured Notes at June 30, 2017 and December 31, 2016 cannot be reasonably determined. Senior Unsecured Notes As of June 30, 2017 and December 31, 2016 , we had $305.0 million in aggregate principal amount of 2020 Senior Notes and $850 million in aggregate principal amount of 2022 Senior Notes. Interest on the 2020 Senior Notes and the 2022 Senior Notes was payable twice a year in April and October. As a consequence of the commencement of the Chapter 11 Cases on May 15, 2016, we did not pay $33.5 million in interest due with respect to our 2022 Senior Notes and $13.2 million interest due with respect to our 2020 Senior Notes, each of which were due on April 15, 2016 As of June 30, 2017 and December 31, 2016 , the Senior Unsecured Notes were reflected as liabilities subject to compromise on the consolidated balance sheet, with the carrying values equal to the face values. No interest expense has been recognized on the Senior Unsecured Notes subsequent to the filing of the Chapter 11 Petitions. Unrecognized contractual interest expense on the Senior Unsecured Notes for the three months and six months ended June 30, 2017 was $23.3 million and $46.6 million , respectively. Unrecognized contractual interest expense on the Senior Unsecured Notes for each of the three months and six months ended June 30, 2016 was $11.7 million . As a result of the filing of the Chapter 11 Cases, the fair value of our Senior Unsecured Notes at June 30, 2017 and December 31, 2016 cannot be reasonably determined. Interest Expense Our interest expense is detailed as follows: Three Months Ended Six Months Ended June 30, June 30, Thousands of dollars 2017 2016 2017 2016 RBL Credit Agreement (including commitment fees) and other debt $ 23,024 $ 13,335 $ 45,105 $ 22,334 Senior Secured Notes — 7,517 — 22,548 Senior Unsecured Notes — 11,655 — 34,966 Amortization of net discount/premium and debt issuance costs — 17,463 — 26,138 Capitalized interest — (53 ) — (80 ) Total $ 23,024 $ 49,917 $ 45,105 $ 105,906 Cash paid for interest $ 24,693 $ 37,606 $ 65,559 $ 43,168 |
Condensed Consolidating Financi
Condensed Consolidating Financial Statements | 6 Months Ended |
Jun. 30, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Financial Statements | Condensed Consolidating Financial Statements The Partnership and Breitburn Finance Corporation (“Breitburn Finance”) (and BOLP, with respect to the Senior Secured Notes), as co-issuers, and certain of the Partnership’s subsidiaries, as guarantors, issued the Senior Secured Notes and the Senior Unsecured Notes (collectively, the “Senior Notes”). All but two of our subsidiaries have guaranteed the Senior Notes, and our only non-guarantor subsidiaries, Breitburn Collingwood Utica LLC and ETSWDC, are minor subsidiaries. In accordance with Rule 3-10 of Regulation S-X, we are not presenting condensed consolidating financial statements as we have no independent assets or operations; Breitburn Finance, the subsidiary co-issuer that does not guarantee the Senior Notes, is a wholly-owned finance subsidiary; all of our material subsidiaries are wholly-owned and have guaranteed the Senior Notes; and all of the guarantees are full, unconditional, joint and several. Each guarantee of each of the Senior Notes is subject to release in the following customary circumstances: (1) a disposition of all or substantially all the assets of the guarantor subsidiary (including by way of merger or consolidation) to a third person, provided the disposition complies with the applicable indenture, (2) a disposition of the capital stock of the guarantor subsidiary to a third person, if the disposition complies with the applicable indenture and as a result the guarantor subsidiary ceases to be our subsidiary, (3) the designation by us of the guarantor subsidiary as an unrestricted subsidiary in accordance with the appropriate indenture, (4) legal or covenant defeasance of such series of Senior Notes or satisfaction and discharge of the related indenture, (5) the liquidation or dissolution of the guarantor subsidiary, provided no default under the applicable indenture exists, or (6) the guarantor subsidiary ceases both (a) to guarantee any other indebtedness of ours or any other guarantor subsidiary and (b) to be an obligor under any bank credit facility. |
Asset Retirement Obligations
Asset Retirement Obligations | 6 Months Ended |
Jun. 30, 2017 | |
Asset Retirement Obligation [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations Asset retirement obligations (“ARO”) are based on our net ownership in wells and facilities and our estimate of the costs to abandon and remediate those wells and facilities together with our estimate of the future timing of the costs to be incurred. Payments to settle ARO occur over the operating lives of the assets, estimated to range from less than one year to 50 years. Estimated cash flows have been discounted at our credit-adjusted risk-free rate of approximately 14% for the six months ended June 30, 2017 and for the year ended December 31, 2016 , and adjusted for inflation using a rate of 2% . Our credit-adjusted risk-free rate is calculated based on our cost of borrowing adjusted for the effect of our credit standing and specific industry and business risk. We consider the inputs to our ARO valuation to be Level 3, as fair value is determined using discounted cash flow methodologies based on standardized inputs that are not readily observable in public markets. Changes in ARO for the period ended June 30, 2017 , and the year ended December 31, 2016 are presented in the following table: Six Months Ended Year Ended Thousands of dollars June 30, 2017 December 31, 2016 Carrying amount, beginning of period $ 258,494 $ 254,378 Liabilities added from acquisitions 49 78 Liabilities related to divested properties — (8,380 ) Liabilities incurred from drilling 405 224 Liabilities settled (3,735 ) (3,162 ) Revision of estimates 1,153 (2,362 ) Accretion expense 8,864 17,718 Carrying amount, end of period 265,230 258,494 Less: Current portion of ARO (5,031 ) (5,905 ) Non-current portion of ARO $ 260,199 $ 252,589 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the normal course of business, we have performance obligations that are secured, in whole or in part, by surety bonds or letters of credit. These obligations primarily relate to abandonments, environmental and other responsibilities where governmental and other organizations require such support. These surety bonds and letters of credit are issued by financial institutions and are required to be reimbursed by us if drawn upon. At each of June 30, 2017 and December 31, 2016 , we had approximately $26.4 million of surety bonds. At June 30, 2017 and December 31, 2016 , we had zero and approximately $13.0 million , respectively, in letters of credit outstanding under the RBL Credit Agreement and approximately $52.1 million and $37.9 million , respectively, in letters of credit outstanding under the DIP Credit Agreement. The increase in letters of credit under the DIP Credit Agreement reflects the transfer of letters of credit from the RBL Credit Agreement to the DIP Credit Agreement. Legal Proceedings Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we are not currently a party to any material legal proceedings. |
Partners' Equity
Partners' Equity | 6 Months Ended |
Jun. 30, 2017 | |
Partners' Capital [Abstract] | |
Partners' Equity | Partners’ Equity Under the priority scheme established by the Bankruptcy Code, unless creditors agree otherwise, pre-petition liabilities and post-petition liabilities must be satisfied in full before the holders of our Series A Preferred Units, Series B Preferred Units and Common Units are entitled to receive any distribution or retain any property under a plan of reorganization. The ultimate recovery to creditors and/or unitholders, if any, will not be determined until confirmation and implementation of a plan of reorganization. No assurance can be given as to what distributions, if any, will be made to each of these constituencies or the nature thereof. As discussed below, if certain requirements of the Bankruptcy Code are met, a plan of reorganization can be confirmed notwithstanding its rejection or deemed rejection by the holders of our Series A Preferred Units, Series B Preferred Units and Common Units and notwithstanding the fact that such holders do not receive or retain any property on account of their equity interests under the plan. Because of such possibilities, the value of our securities, including our Series A Preferred Units, Series B Preferred Units and Common Units, is highly speculative. We believe it is highly likely that our Series A Preferred Units, Series B Preferred Units and Common Units will be canceled in our Chapter 11 Cases and that the holders thereof will not receive any distribution on account of their holdings. Preferred Units As of June 30, 2017 and December 31, 2016 , we had 8.0 million Series A Preferred Units outstanding. The Series A Preferred Units rank senior to our Common Units and on parity with the Series B Preferred Units with respect to the payment of current distributions. As of June 30, 2017 and December 31, 2016 , we had 49.6 million Series B Preferred Units outstanding. The Series B Preferred Units rank senior to our Common Units and on parity with the Series A Preferred Units with respect to the payment of distributions. On April 14, 2016, we elected to suspend the declaration of any further distributions on our Series A Preferred Units and Series B Preferred Units. We have not been accruing distributions on the Series A Preferred Units and Series B Preferred Units since the Chapter 11 Filing Date. During the three months ended June 30, 2016 , we recognized $2.0 million of accrued distributions on the Series A Preferred Units, which were included in distributions to Series A preferred unitholders on the consolidated statements of operations. During three months ended June 30, 2016 , we recognized $3.7 million of accrued distributions on the Series B Preferred Units, which are included in non-cash distributions to Series B preferred unitholders on the consolidated statements of operations. During the six months ended June 30, 2016 , we recognized $6.1 million of accrued distributions on the Series A Preferred Units, which were included in distributions to Series A preferred unitholders on the consolidated statements of operations. During six months ended June 30, 2016 , we recognized $11.1 million of accrued distributions on the Series B Preferred Units, which are included in non-cash distributions to Series B preferred unitholders on the consolidated statements of operations. We will continue to account for our Series A Preferred Units and Series B Preferred Units at their carrying value until a plan of reorganization is confirmed by the Bankruptcy Court and becomes effective. We accrued for earned but undeclared distributions on each series of Preferred Units for the period from April 1, 2016 to the Chapter 11 Filing Date. As of June 30, 2017 and December 31, 2016 , total accrued but unpaid distributions on our Series A Preferred Units and Series B Preferred Units of $7.0 million were reflected as liabilities subject to compromise. Common Units As of the Chapter 11 Filing Date, we had 213.8 million Common Units outstanding. We will continue to account for our Common Units at their carrying value until a plan of reorganization is confirmed by the Bankruptcy Court and becomes effective. At each of June 30, 2017 and December 31, 2016 , we had approximately 213.8 million of Common Units outstanding. Earnings per Common Unit FASB Accounting Standards require use of the “two-class” method of computing earnings per unit for all periods presented. The “two-class” method is an earnings allocation formula that determines earnings per unit for each class of common unit and participating security as if all earnings for the period had been distributed. In prior periods, unvested restricted unit awards that earned non-forfeitable dividend rights qualified as participating securities and, accordingly, were included in the basic computation. Our unvested RPUs and convertible phantom units (“CPUs”) participated in distributions on an equal basis with Common Units. Accordingly, the presentation below is prepared on a combined basis and is presented as net loss per common unit. The following is a reconciliation of net loss and weighted average units for calculating basic net loss per common unit and diluted net loss per common unit. Three Months Ended Six Months Ended June 30, June 30, Thousands, except per unit amounts 2017 2016 2017 2016 Net loss attributable to the partnership $ (65,964 ) $ (261,315 ) $ (154,274 ) $ (365,101 ) Less: Distributions to Series A preferred unitholders — 2,017 — 6,142 Non-cash distributions to Series B preferred unitholders — 3,737 — 11,123 Net loss used to calculate basic and diluted net loss per unit $ (65,964 ) $ (267,069 ) $ (154,274 ) $ (382,366 ) Weighted average number of units used to calculate basic and diluted net loss per unit (in thousands): Common Units (a) 213,789 213,779 213,789 213,720 Dilutive units (b) — — — — Denominator for diluted net loss per unit 213,789 213,779 213,789 213,720 Net loss per common unit Basic $ (0.31 ) $ (1.25 ) $ (0.72 ) $ (1.79 ) Diluted $ (0.31 ) $ (1.25 ) $ (0.72 ) $ (1.79 ) (a) We had no participating securities outstanding during the three months and six months ended June 30, 2017 . The three months and six months ended June 30, 2016 exclude 20,429 and 19,222 , respectively, of weighted average anti-dilutive units from the calculation of the denominator for basic earnings per common unit, as we were in a loss position. (b) We had no dilutive units outstanding during the three months and six months ended June 30, 2017 . Each of the three months and six months ended June 30, 2016 excludes 413 of weighted average anti-dilutive units from the calculation of the denominator for diluted earnings per common unit, as we were in a loss position. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss by component, net of tax, were as follows: Three Months Ended June 30, 2017 2016 Gain (loss) on Gain (loss) on Thousands of dollars Available-For-Sale Securities Post- retirement Benefits Total Available-For-Sale Securities Post retirement Benefits Total Accumulated comprehensive income (loss), beginning of period $ 772 $ 774 $ 1,546 $ (72 ) $ 121 $ 49 Other comprehensive (loss) income before reclassification (169 ) 1 (168 ) 327 (781 ) (454 ) Amounts reclassified from accumulated other comprehensive loss (a) 11 — 11 (64 ) — (64 ) Net current period other comprehensive (loss) income (158 ) 1 (157 ) 263 (781 ) (518 ) Less: Accumulated comprehensive (loss) income attributable to noncontrolling interest (65 ) 1 (64 ) 107 (319 ) (212 ) Accumulated comprehensive income (loss), end of period $ 679 $ 774 $ 1,453 $ 84 $ (341 ) $ (257 ) Six Months Ended June 30, 2017 2016 Gain (loss) on Gain (loss) on Thousands of dollars Available-For-Sale Securities Post- retirement Benefits Total Available-For-Sale Securities Post- retirement Benefits Accumulated comprehensive income (loss), beginning of period $ 234 $ 798 $ 1,032 $ (350 ) $ 121 $ (229 ) Other comprehensive income (loss) before reclassification 745 (41 ) 704 1,209 (781 ) 428 Amounts reclassified from accumulated other comprehensive loss (a) 6 — 6 (476 ) — (476 ) Net current period other comprehensive income (loss) 751 (41 ) 710 733 (781 ) (48 ) Less: Accumulated comprehensive income (loss) attributable to noncontrolling interest 306 (17 ) 289 299 (319 ) (20 ) Accumulated comprehensive income (loss), end of period $ 679 $ 774 $ 1,453 $ 84 $ (341 ) $ (257 ) (a) Amounts were reclassified from accumulated other comprehensive loss to other (income) expense, net on the consolidated statements of operations. |
Incentive Compensation Plans In
Incentive Compensation Plans Incentive Compensation Plans (Notes) | 6 Months Ended |
Jun. 30, 2017 | |
Compensation Related Costs [Abstract] | |
Compensation and Employee Benefit Plans, Other than Share-based Compensation [Text Block] | Incentive Compensation Plans For detailed information on our various compensation plans that were in place during and prior to 2016, see Note 16 to the consolidated financial statements included in our 2016 Annual Report. Our two remaining incentive compensation plans, detailed below, are paid in cash. Key Employee Program In March 2017, the Bankruptcy Court approved the Partnership’s 2017 Key Employee Program (“KEP”). The KEP has substantially similar terms and conditions as the Partnership’s 2016 Key Employee Program, which was approved by the Bankruptcy Court in September 2016. Payments under the KEP are contingent on the Partnership meeting certain performance metrics tied to production and lease operating expense for fiscal year 2017. Participants must be employed on the scheduled payment dates in order to receive a payment under the KEP. During the three months and six months ended June 30, 2017 , we recognized $2.5 million and $5.2 million in general and administrative expenses, and $1.1 million and $2.7 million in operating costs, related to the KEP, respectively. Key Executive Incentive Program In March 2017, the Bankruptcy Court approved the Partnership’s 2017 Key Executive Incentive Program (“KEIP”). Participants in the KEIP include the following named executive officers of Breitburn GP LLC, the general partner of the Partnership: Halbert S. Washburn, Mark L. Pease, James G. Jackson and Gregory C. Brown. The KEIP has substantially similar terms and conditions as the Partnership’s 2016 Key Executive Incentive Program, except for the use of updated metrics and the modification of the timing of award payments so that the payments are made at the conclusion of each quarterly performance period ending March 31, June 30, September 30 and December 31, 2017. The 2016 Key Executive Incentive Program was approved by the Bankruptcy Court in September 2016. Payments under the KEIP are contingent on the Partnership meeting the same performance metrics utilized in the KEP. Participants must be employed on the scheduled payment dates in order to receive a payment under the KEIP. During the three months and six months ended June 30, 2017 , we recognized $1.8 million and $3.6 million general and administrative expenses, respectively, related to the KEIP. |
Restructuring Costs
Restructuring Costs | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring Costs [Abstract] | |
Restructuring Costs | Restructuring Costs During the three months and six months ended June 30, 2016 , we executed workforce reduction plans as part of company-wide reorganization efforts intended to reduce costs, due in part to lower commodity prices. In addition, we executed workforce reductions in the first half of 2016 in connection with the notice received from PCEC in February 2016 of its intention to terminate the administrative services agreement with Breitburn Management, effective as of June 30, 2016 (see Note 4 for a discussion of the administrative services agreement). In connection with the reductions in workforce, we incurred total costs of approximately $2.4 million and $5.2 million for the three months and six months ended June 30, 2016 , respectively, which included severance cash payments, accelerated vesting of LTIP grants for certain individuals and other employee-related termination costs. The reductions were communicated to affected employees on various dates during the six months ended June 30 2016, and all such notifications were completed by June 30, 2016. The plan resulted in a reduction of 12 and 69 employees for the three months and six months ended June 30, 2016 , respectively. There were no workforce reduction plans during the three months and six months ended June 30, 2017 . Three Months Ended Six Months Ended Thousands of dollars June 30, 2016 June 30, 2016 Severance payments $ 1,508 $ 3,451 Unit-based compensation expense 806 1,444 Other termination costs 125 353 Total $ 2,439 $ 5,248 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On July 19, 2017, the Bankruptcy Court authorized the release of the Hedge Proceeds, to be applied to the payment of $4.1 million in Hedge Termination Obligations, with the remaining $460.0 million in Hedge Proceeds to be applied as a dollar-for-dollar reduction of outstanding obligations under the RBL Credit Agreement. We reduced the aggregate principal amount outstanding under the RBL Credit Agreement by $452.2 million , and as of August 8, 2017, we had approximately $746.1 million in aggregate principal amount outstanding under the RBL Credit Agreement. |
Chapter 11 Cases and Liquidit23
Chapter 11 Cases and Liquidity (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Chapter 11 Cases [Abstract] | |
Costs of Reorganization [Table Text Block] | The following table summarizes the components included in reorganization items, net on our consolidated statements of operations for the three months ended June 30, 2017 : Three Months Ended June 30, Six Months Ended June 30, Thousands of dollars 2017 2016 2017 2016 Debt discounts/premiums and issuance costs $ — $ 48,829 $ — $ 48,829 Advisory and professional fees 9,226 13,963 19,383 13,963 DIP Credit Agreement debt issuance costs 465 4,172 465 4,172 Other 476 (67 ) 659 (67 ) Reorganization items, net $ 10,167 $ 66,897 $ 20,507 $ 66,897 |
Schedule of Liabilities Subject to Compromise [Table Text Block] | The following table summarizes the components of liabilities subject to compromise included in our consolidated balance sheets as of June 30, 2017 and December 31, 2016 : As of Thousands of dollars June 30, 2017 December 31, 2016 Senior Unsecured Notes $ 1,155,000 $ 1,155,000 Senior Secured Notes 650,000 650,000 Accrued interest payable 61,908 61,908 Accounts payable 4,899 5,294 Distributions payable 6,974 6,974 Total liabilities subject to compromise $ 1,878,781 $ 1,879,176 |
Financial Instruments and Fai24
Financial Instruments and Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | We had no gains or losses on derivative instruments during the three months and six months ended June 30, 2017 . The following table presents gains and losses on derivative instruments during the three months and six months ended June 30, 2016 : Thousands of dollars Oil Commodity Derivatives (a) Natural Gas Commodity Derivatives (a) Interest Rate Derivatives (b) Total Financial Instruments Three Months Ended June 30, 2016 Net (loss) gain $ (71,720 ) $ (20,490 ) $ 533 $ (91,677 ) Six Months Ended June 30, 2016 Net loss $ (43,345 ) $ (10,942 ) $ (1,810 ) $ (56,097 ) (a) Included in loss on commodity derivative instruments, net on the consolidated statements of operations. (b) Included in gain (loss) on interest rate swaps on the consolidated statements of operations. |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables set forth, by level within the hierarchy, the fair value of our financial instrument assets that were accounted for at fair value on a recurring basis. All fair values reflected below and on the consolidated balance sheets have been adjusted for nonperformance risk. Thousands of dollars Level 1 Level 2 Level 3 Total As of June 30, 2017 Available-for-sale securities Equities 1,620 — — 1,620 Mutual funds 11,742 — — 11,742 Exchange traded funds 8,181 — — 8,181 Net assets $ 21,543 $ — $ — $ 21,543 Thousands of dollars Level 1 Level 2 Level 3 Total As of December 31, 2016 Available-for-sale securities Equities 1,492 — — 1,492 Mutual funds 11,229 — — 11,229 Exchange traded funds 7,675 — — 7,675 Net assets $ 20,396 $ — $ — $ 20,396 |
Other Long-Term Assets (Tables)
Other Long-Term Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Other Assets [Abstract] | |
Schedule of Other Assets | As of June 30, 2017 and December 31, 2016 , our other long-term assets were as follows: As of Thousands of dollars June 30, 2017 December 31, 2016 Available-for-sale securities $ 21,543 $ 20,396 Deposit for Jay Field net profit interest obligation 18,263 18,263 Property reclamation deposit 10,752 10,738 Other 15,311 14,449 Total $ 65,869 $ 63,846 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of Long-term Debt Instruments | Our debt is detailed in the following table: As of Thousands of dollars June 30, 2017 December 31, 2016 RBL Credit Agreement $ 1,198,259 $ 1,198,259 Promissory note 2,938 2,938 Senior Secured Notes 650,000 650,000 2020 Senior Notes 305,000 305,000 2022 Senior Notes 850,000 850,000 Capital lease obligations 171 156 Total debt $ 3,006,368 $ 3,006,353 Less: Current portion of debt (1,198,259 ) (1,198,259 ) Less: Amounts reclassified to liabilities subject to compromise (1,805,000 ) (1,805,000 ) Total long-term debt $ 3,109 $ 3,094 |
Schedule of Interest Expense | Interest Expense Our interest expense is detailed as follows: Three Months Ended Six Months Ended June 30, June 30, Thousands of dollars 2017 2016 2017 2016 RBL Credit Agreement (including commitment fees) and other debt $ 23,024 $ 13,335 $ 45,105 $ 22,334 Senior Secured Notes — 7,517 — 22,548 Senior Unsecured Notes — 11,655 — 34,966 Amortization of net discount/premium and debt issuance costs — 17,463 — 26,138 Capitalized interest — (53 ) — (80 ) Total $ 23,024 $ 49,917 $ 45,105 $ 105,906 Cash paid for interest $ 24,693 $ 37,606 $ 65,559 $ 43,168 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Asset Retirement Obligation [Abstract] | |
Schedule of Change in Asset Retirement Obligation | Changes in ARO for the period ended June 30, 2017 , and the year ended December 31, 2016 are presented in the following table: Six Months Ended Year Ended Thousands of dollars June 30, 2017 December 31, 2016 Carrying amount, beginning of period $ 258,494 $ 254,378 Liabilities added from acquisitions 49 78 Liabilities related to divested properties — (8,380 ) Liabilities incurred from drilling 405 224 Liabilities settled (3,735 ) (3,162 ) Revision of estimates 1,153 (2,362 ) Accretion expense 8,864 17,718 Carrying amount, end of period 265,230 258,494 Less: Current portion of ARO (5,031 ) (5,905 ) Non-current portion of ARO $ 260,199 $ 252,589 |
Partners' Equity (Tables)
Partners' Equity (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Partners' Capital [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a reconciliation of net loss and weighted average units for calculating basic net loss per common unit and diluted net loss per common unit. Three Months Ended Six Months Ended June 30, June 30, Thousands, except per unit amounts 2017 2016 2017 2016 Net loss attributable to the partnership $ (65,964 ) $ (261,315 ) $ (154,274 ) $ (365,101 ) Less: Distributions to Series A preferred unitholders — 2,017 — 6,142 Non-cash distributions to Series B preferred unitholders — 3,737 — 11,123 Net loss used to calculate basic and diluted net loss per unit $ (65,964 ) $ (267,069 ) $ (154,274 ) $ (382,366 ) Weighted average number of units used to calculate basic and diluted net loss per unit (in thousands): Common Units (a) 213,789 213,779 213,789 213,720 Dilutive units (b) — — — — Denominator for diluted net loss per unit 213,789 213,779 213,789 213,720 Net loss per common unit Basic $ (0.31 ) $ (1.25 ) $ (0.72 ) $ (1.79 ) Diluted $ (0.31 ) $ (1.25 ) $ (0.72 ) $ (1.79 ) (a) We had no participating securities outstanding during the three months and six months ended June 30, 2017 . The three months and six months ended June 30, 2016 exclude 20,429 and 19,222 , respectively, of weighted average anti-dilutive units from the calculation of the denominator for basic earnings per common unit, as we were in a loss position. (b) We had no dilutive units outstanding during the three months and six months ended June 30, 2017 . Each of the three months and six months ended June 30, 2016 excludes 413 of weighted average anti-dilutive units from the calculation of the denominator for diluted earnings per common unit, as we were in a loss position |
Accumulated Other Comprehensi29
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive loss by component, net of tax, were as follows: Three Months Ended June 30, 2017 2016 Gain (loss) on Gain (loss) on Thousands of dollars Available-For-Sale Securities Post- retirement Benefits Total Available-For-Sale Securities Post retirement Benefits Total Accumulated comprehensive income (loss), beginning of period $ 772 $ 774 $ 1,546 $ (72 ) $ 121 $ 49 Other comprehensive (loss) income before reclassification (169 ) 1 (168 ) 327 (781 ) (454 ) Amounts reclassified from accumulated other comprehensive loss (a) 11 — 11 (64 ) — (64 ) Net current period other comprehensive (loss) income (158 ) 1 (157 ) 263 (781 ) (518 ) Less: Accumulated comprehensive (loss) income attributable to noncontrolling interest (65 ) 1 (64 ) 107 (319 ) (212 ) Accumulated comprehensive income (loss), end of period $ 679 $ 774 $ 1,453 $ 84 $ (341 ) $ (257 ) Six Months Ended June 30, 2017 2016 Gain (loss) on Gain (loss) on Thousands of dollars Available-For-Sale Securities Post- retirement Benefits Total Available-For-Sale Securities Post- retirement Benefits Accumulated comprehensive income (loss), beginning of period $ 234 $ 798 $ 1,032 $ (350 ) $ 121 $ (229 ) Other comprehensive income (loss) before reclassification 745 (41 ) 704 1,209 (781 ) 428 Amounts reclassified from accumulated other comprehensive loss (a) 6 — 6 (476 ) — (476 ) Net current period other comprehensive income (loss) 751 (41 ) 710 733 (781 ) (48 ) Less: Accumulated comprehensive income (loss) attributable to noncontrolling interest 306 (17 ) 289 299 (319 ) (20 ) Accumulated comprehensive income (loss), end of period $ 679 $ 774 $ 1,453 $ 84 $ (341 ) $ (257 ) (a) Amounts were reclassified from accumulated other comprehensive loss to other (income) expense, net on the consolidated statements of operations. |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring Costs [Abstract] | |
Restructuring and Related Costs | Three Months Ended Six Months Ended Thousands of dollars June 30, 2016 June 30, 2016 Severance payments $ 1,508 $ 3,451 Unit-based compensation expense 806 1,444 Other termination costs 125 353 Total $ 2,439 $ 5,248 |
Chapter 11 Cases and Liquidit31
Chapter 11 Cases and Liquidity (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)$ / Energy$ / bbl | Jun. 30, 2016USD ($)$ / Energy$ / bbl | Jun. 30, 2015$ / Energy$ / bbl | Jun. 30, 2014$ / Energy$ / bbl | May 15, 2016USD ($) | Apr. 15, 2016USD ($) | |
Debtor Reorganization Items, Write-off of Debt Issuance Costs and Debt Discounts | $ 0 | $ 48,829 | $ 0 | $ 48,829 | |||||
WTI Oil Price | $ / bbl | 50 | 40 | 53 | 101 | |||||
Henry Hub Natural Gas Price | $ / Energy | 3.05 | 2.07 | 2.82 | 4.89 | |||||
Debtor Reorganization Items, Legal and Advisory Professional Fees | 9,226 | 13,963 | $ 19,383 | $ 13,963 | |||||
Debtor Reorganization Items, Debtor-in-Possession Facility Financing Costs | 465 | 4,172 | 465 | 4,172 | |||||
Accounts and other receivables, net | 536,548 | $ 549,544 | 536,548 | ||||||
Other current liabilities | 13,979 | 17,466 | 13,979 | ||||||
Debtor Reorganization Items, Other Expense (Income) | 476 | (67) | 659 | (67) | |||||
Reorganization Items | 10,167 | $ 66,897 | 20,507 | $ 66,897 | |||||
Liabilities Subject to Compromise, Accounts Payable and Accrued Liabilities | 4,899 | 5,294 | 4,899 | ||||||
Liabilities subject to compromise (note 2) | 1,878,781 | $ 1,879,176 | 1,878,781 | ||||||
Senior Notes One [Member] | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.625% | ||||||||
Interest Payable | $ 13,200 | ||||||||
Senior Notes Two [Member] | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.875% | ||||||||
Interest Payable | $ 33,500 | ||||||||
DIP Credit Agreement [Member] | |||||||||
Line of Credit Facility, Description | (i) extended the DIP Credit Agreement’s scheduled maturity date to June 30, 2017, (ii) increased certain pricing, (iii) increased the committed amount available under the DIP Credit Agreement from $75 million to $150 million, (iv) increased the letter of credit sublimit from $50 million to $100 million and (v) provided for the payment of certain fees to the Administrative Agent and the DIP Lenders | ||||||||
Senior Secured Notes [Member] | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 9.25% | ||||||||
Estimated Hedge Settlement Receivable [Member] | |||||||||
Accounts and other receivables, net | 460,000 | $ 460,000 | 460,000 | ||||||
Accounts Payable [Member] | |||||||||
Restructuring Reserve | 12,700 | 12,700 | |||||||
Unsecured Debt [Member] | |||||||||
Liabilities Subject to Compromise, Debt and Accrued Interest | 1,155,000 | 1,155,000 | 1,155,000 | ||||||
Estimated Hedge Settlement Payable [Member] | |||||||||
Other current liabilities | 4,100 | 4,100 | 4,100 | ||||||
Secured Debt [Member] | |||||||||
Liabilities Subject to Compromise, Debt and Accrued Interest | 650,000 | 650,000 | 650,000 | ||||||
Accrued Liabilities [Member] | |||||||||
Liabilities Subject to Compromise, Debt and Accrued Interest | 61,908 | 61,908 | 61,908 | ||||||
Accrued Liabilities [Member] | Senior Secured Notes [Member] | |||||||||
Liabilities Subject to Compromise, Debt and Accrued Interest | $ 7,500 | ||||||||
Preferred Units B [Member] | |||||||||
Liabilities Subject to Compromise, Other Liabilities | $ 6,974 | $ 6,974 | $ 6,974 |
Financial Instruments and Fai32
Financial Instruments and Fair Value Measurements - Oil and Natural Gas Contracts (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | ||
Accounts and other receivables, net | $ 536,548 | $ 549,544 |
Estimated Hedge Settlement Receivable [Member] | ||
Derivative [Line Items] | ||
Accounts and other receivables, net | $ 460,000 | $ 460,000 |
Financial Instruments and Fai33
Financial Instruments and Fair Value Measurements - Interest Rate Swaps (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | ||
Other current liabilities | $ 13,979 | $ 17,466 |
Estimated Hedge Settlement Payable [Member] | ||
Derivative [Line Items] | ||
Other current liabilities | $ 4,100 | $ 4,100 |
Financial Instruments and Fai34
Financial Instruments and Fair Value Measurements - Gains and Losses on Derivative Instruments Not Designated As Hedging Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loss (gain) on derivative instruments | $ 0 | $ (92,210) | $ 0 | $ (54,287) | |
Not Designated as Hedging Instrument [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loss (gain) on derivative instruments | (91,677) | (56,097) | |||
Oil | Not Designated as Hedging Instrument [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loss (gain) on derivative instruments | [1] | (71,720) | (43,345) | ||
Natural Gas | Not Designated as Hedging Instrument [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loss (gain) on derivative instruments | [1] | (20,490) | (10,942) | ||
Interest Rate Swap | Not Designated as Hedging Instrument [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loss (gain) on derivative instruments | [2] | $ 533 | $ (1,810) | ||
[1] | Included in loss on commodity derivative instruments, net on the consolidated statements of operations. | ||||
[2] | Included in gain (loss) on interest rate swaps on the consolidated statements of operations. |
Financial Instruments and Fai35
Financial Instruments and Fair Value Measurements - Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value, Net Asset (Liability) | $ 21,543 | $ 20,396 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value, Net Asset (Liability) | 21,543 | 20,396 |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value, Net Asset (Liability) | 0 | 0 |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value, Net Asset (Liability) | 0 | 0 |
Equities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 1,620 | 1,492 |
Equities | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 1,620 | 1,492 |
Equities | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Equities | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 11,742 | 11,229 |
Mutual funds | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 11,742 | 11,229 |
Mutual funds | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Mutual funds | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Exchange traded funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 8,181 | 7,675 |
Exchange traded funds | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 8,181 | 7,675 |
Exchange traded funds | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Exchange traded funds | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | $ 0 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
General and administrative expenses | $ 17,197 | $ 16,270 | $ 34,769 | $ 37,684 | |
Related party receivables | 587 | $ 587 | $ 860 | ||
PCEC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Monthly Fee for Indirect Costs | $ 700 | 700 | |||
Indirect expenses | 2,100 | 4,200 | |||
General and administrative expenses | $ 2,400 | $ 4,400 | |||
Other Affiliates [Member] | |||||
Related Party Transaction [Line Items] | |||||
Current receivables | $ 900 |
Impairments (Details)
Impairments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Reserve Quantities [Line Items] | |||||
Percentage rate of escalation, impairment of assets | 2.00% | ||||
Discount rate, future net revenues for estimated proved reserves | 14.00% | 13.00% | |||
Impairment of oil and natural gas properties | $ 321 | $ 0 | $ 17,211 | $ 2,793 | |
CALIFORNIA | |||||
Reserve Quantities [Line Items] | |||||
Impairment of oil and natural gas properties | 200 | 200 | |||
Southeast [Member] | |||||
Reserve Quantities [Line Items] | |||||
Impairment of oil and natural gas properties | $ 100 | 300 | 2,100 | ||
Rockies [Member] | |||||
Reserve Quantities [Line Items] | |||||
Impairment of oil and natural gas properties | 11,900 | 200 | |||
Permian Basin [Member] | |||||
Reserve Quantities [Line Items] | |||||
Impairment of oil and natural gas properties | $ 4,800 | $ 500 |
Other Long-Term Assets (Details
Other Long-Term Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Noncurrent equity securities | $ 21,543 | $ 20,396 |
Other assets, miscellaneous | 15,311 | 14,449 |
Other long-term assets | 65,869 | 63,846 |
Deposit for Jay Field net profit interest obligation | ||
Noncurrent deposit assets | 18,263 | 18,263 |
Property reclamation deposit | ||
Noncurrent deposit assets | $ 10,752 | $ 10,738 |
Long-Term Debt Total long term
Long-Term Debt Total long term debt (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | May 15, 2016 |
Debt Instrument [Line Items] | |||
Credit facility | $ 1,198,259 | $ 1,198,259 | $ 1,200,000 |
Notes Payable | 2,938 | 2,938 | |
Senior notes at fair value | 650,000 | 650,000 | |
Capital Lease Obligations | 171 | 156 | |
Total debt | 3,006,368 | 3,006,353 | |
Long-term Debt, Current Maturities | (1,198,259) | (1,198,259) | |
Liabilities Subject to Compromise | (1,878,781) | (1,879,176) | |
Long-term Debt | 3,109 | 3,094 | |
Senior Notes One [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | 305,000 | 305,000 | |
Senior Notes Two [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | 850,000 | 850,000 | |
Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Liabilities Subject to Compromise | $ (1,805,000) | $ (1,805,000) |
Long-Term Debt - Credit Facilit
Long-Term Debt - Credit Facility (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2017 | Dec. 31, 2016 | May 15, 2016 | |
Debt Instrument [Line Items] | ||||
Debtor-in-possession financing, amount arranged | $ 150,000 | |||
Maximum borrowing capacity | 5,000,000 | |||
Credit facility | 1,198,259 | $ 1,198,259 | $ 1,200,000 | |
Current borrowing capacity | 1,800,000 | 1,800,000 | ||
Commitment from existing lenders, borrowing base | $ 1,400,000 | 1,400,000 | ||
Prime Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 7.50% | |||
DIP Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Letters of credit outstanding, amount | $ 52,100 | $ 37,900 | ||
Line of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Debtor-in-possession financing, amount arranged | 5,000 | |||
Letter of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Debtor-in-possession financing, amount arranged | $ 100,000 | |||
Line of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Write off of deferred debt issuance cost | $ 15,700 |
Long-Term Debt - Senior Secured
Long-Term Debt - Senior Secured Notes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | May 15, 2016 | |
Debt Instrument [Line Items] | ||||||
Senior notes at fair value | $ 650,000,000 | $ 650,000,000 | $ 650,000,000 | |||
Accrued Liabilities [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Liabilities Subject to Compromise, Debt and Accrued Interest | 61,908,000 | 61,908,000 | 61,908,000 | |||
Senior Secured Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes at fair value | 650,000,000 | 650,000,000 | $ 650,000,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 9.25% | |||||
Senior Secured Notes [Member] | Accrued Liabilities [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Liabilities Subject to Compromise, Debt and Accrued Interest | $ 7,500,000 | |||||
Secured Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Contractual Interest Expense on Prepetition Liabilities Not Recognized in Statement of Operations | $ 15,100,000 | $ 7,500,000 | $ 30,100,000 | $ 7,500,000 |
Long-Term Debt - Senior Unsecur
Long-Term Debt - Senior Unsecured Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Apr. 15, 2016 | |
Senior Notes One [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes, net | $ 305,000 | $ 305,000 | $ 305,000 | |||
Debt instrument, face amount | 305,000 | 305,000 | 305,000 | |||
Interest Payable | $ 13,200 | |||||
Senior Notes Two [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | 850,000 | 850,000 | $ 850,000 | |||
Interest Payable | $ 33,500 | |||||
Unsecured Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Contractual Interest Expense on Prepetition Liabilities Not Recognized in Statement of Operations | $ 23,300 | $ 11,700 | $ 46,600 | $ 11,700 |
Long-Term Debt - Interest Expen
Long-Term Debt - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Debt Instrument [Line Items] | ||||
Amortization of net discount/premium and deferred issuance costs | $ 0 | $ 17,463 | $ 0 | $ 26,138 |
Capitalized interest | 0 | (53) | 0 | (80) |
Interest expense, net of capitalized interest | 23,024 | 49,917 | 45,105 | 105,906 |
Interest Paid | 24,693 | 37,606 | 65,559 | 43,168 |
Line of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense | 23,024 | 13,335 | 45,105 | 22,334 |
Senior Secured Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense | 0 | 7,517 | 0 | 22,548 |
Unsecured Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense | $ 0 | $ 11,655 | $ 0 | $ 34,966 |
Condensed Consolidating Finan44
Condensed Consolidating Financial Statements Condenced Financial Information (Details) | Jun. 30, 2017subsidiary |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Number of subsidiaries not guaranteeing the Senior Notes | 2 |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Carrying amount, beginning of period | $ 258,494 | $ 254,378 |
Liabilities added from acquisitions | 49 | 78 |
Liabilities related to divested properties | 0 | (8,380) |
Liabilities incurred from drilling | 405 | 224 |
Liabilities settled | (3,735) | (3,162) |
Revision of estimates | 1,153 | (2,362) |
Accretion expense | 8,864 | 17,718 |
Carrying amount, end of period | 265,230 | 258,494 |
Less: Current portion of ARO | (5,031) | (5,905) |
Long-term asset retirement obligation | $ 260,199 | $ 252,589 |
Wells and Related Equipment and Facilities [Member] | ||
Asset Retirement Obligations [Line Items] | ||
Credit adjusted risk free rate | 14.00% | 14.00% |
Inflation adjustment rate | 2.00% | 2.00% |
Maximum [Member] | ||
Asset Retirement Obligations [Line Items] | ||
Asset retirement obligations, assets, useful lives, minimum | 50 years | |
Minimum [Member] | ||
Asset Retirement Obligations [Line Items] | ||
Asset retirement obligations, assets, useful lives, minimum | 1 year |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Surety bonds, current carrying value | $ 26.4 | $ 26.4 |
Revolving Credit Facility [Member] | ||
Letters of credit outstanding, amount | 0 | 13 |
DIP Credit Agreement [Member] | ||
Letters of credit outstanding, amount | $ 52.1 | $ 37.9 |
Partners' Equity (Details)
Partners' Equity (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | May 15, 2016 | |
Capital Unit [Line Items] | ||||||
Common units issued and outstanding (in units) | 213.8 | |||||
Less: Distributions to Series A preferred unitholders | $ 0 | $ 2,017 | $ 0 | $ 6,142 | ||
Non-cash distributions to Series B preferred unitholders | $ 0 | $ 3,737 | $ 0 | $ 11,123 | ||
Common Unit, Outstanding | 213.8 | 213.8 | 213.8 | 213.8 | ||
Preferred Units B [Member] | ||||||
Capital Unit [Line Items] | ||||||
Common units issued and outstanding (in units) | 49.6 | 49.6 | 49.6 | |||
Liabilities Subject to Compromise, Other Liabilities | $ 6,974 | $ 6,974 | $ 6,974 | |||
Preferred Units, Class [Domain] | ||||||
Capital Unit [Line Items] | ||||||
Liabilities Subject to Compromise, Other Liabilities | $ 7,000 | $ 7,000 | $ 7,000 | |||
Preferred Class A [Member] | ||||||
Capital Unit [Line Items] | ||||||
Preferred units, issued | 8 | 8 | 8 |
Partners' Equity - Earnings Per
Partners' Equity - Earnings Per Share Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Net income (loss) | $ (65,964) | $ (261,315) | $ (154,274) | $ (365,101) | |
Less: Distributions to Series A preferred unitholders | 0 | 2,017 | 0 | 6,142 | |
Non-cash distributions to Series B preferred unitholders | 0 | 3,737 | 0 | 11,123 | |
Net loss used to calculate basic and diluted net loss per unit | $ (65,964) | $ (267,069) | $ (154,274) | $ (382,366) | |
Basic weighted average units outstanding | [1] | 213,789 | 213,779 | 213,789 | 213,720 |
Diluted Weighted Average Units Outstanding | [2] | 0 | 0 | 0 | 0 |
Weighted average number of units used to calculate basic and diluted net loss per unit: | |||||
Denominator for basic income (loss) per common unit (in shares) | 213,789 | 213,779 | 213,789 | 213,720 | |
Basic net loss per common unit | $ (0.31) | $ (1.25) | $ (0.72) | $ (1.79) | |
Diluted net loss per unit | $ (0.31) | $ (1.25) | $ (0.72) | $ (1.79) | |
Restricted Phantom Units (RPUs) [Member] | |||||
Weighted average number of units used to calculate basic and diluted net loss per unit: | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 20,429 | 19,222 | |||
Convertible Phantom Units (CPUs) [Member] | |||||
Weighted average number of units used to calculate basic and diluted net loss per unit: | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 413 | 0 | |||
[1] | We had no participating securities outstanding during the three months and six months ended June 30, 2017. The three months and six months ended June 30, 2016 exclude 20,429 and 19,222, respectively, of weighted average anti-dilutive units from the calculation of the denominator for basic earnings per common unit, as we were in a loss position. | ||||
[2] | We had no dilutive units outstanding during the three months and six months ended June 30, 2017. Each of the three months and six months ended June 30, 2016 excludes 413 of weighted average anti-dilutive units from the calculation of the denominator for diluted earnings per common unit, as we were in a loss position. |
Accumulated Other Comprehensi49
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Accumulated Other Comprehensive Income [Roll Forward] | |||||
Accumulated comprehensive loss attributable to the partnership, beginning of period | $ 1,546 | $ 49 | $ 1,032 | $ (229) | |
Other comprehensive (loss) income before reclassification | (168) | (454) | 704 | 428 | |
Amounts reclassified from accumulated other comprehensive loss | [1] | 11 | (64) | 6 | (476) |
Net current period other comprehensive (loss) income | (157) | (518) | 710 | (48) | |
Noncontrolling Interest, Accumulated Other Comprehensive Income (loss) Net of Tax | (64) | (212) | 289 | (20) | |
Accumulated comprehensive loss attributable to the partnership, end of period | 1,453 | (257) | 1,453 | (257) | |
Available-For-Sale Securities | |||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||
Accumulated comprehensive loss attributable to the partnership, beginning of period | 772 | (72) | 234 | (350) | |
Other comprehensive (loss) income before reclassification | (169) | 327 | 745 | 1,209 | |
Amounts reclassified from accumulated other comprehensive loss | [1] | 11 | (64) | 6 | (476) |
Net current period other comprehensive (loss) income | (158) | 263 | 751 | 733 | |
Noncontrolling Interest, Accumulated Other Comprehensive Income (loss) Net of Tax | (65) | 107 | 306 | 299 | |
Accumulated comprehensive loss attributable to the partnership, end of period | 679 | 84 | 679 | 84 | |
Post- retirement Benefits | |||||
Accumulated Other Comprehensive Income [Roll Forward] | |||||
Accumulated comprehensive loss attributable to the partnership, beginning of period | 774 | 121 | 798 | 121 | |
Other comprehensive (loss) income before reclassification | 1 | (781) | (41) | (781) | |
Amounts reclassified from accumulated other comprehensive loss | [1] | 0 | 0 | 0 | 0 |
Net current period other comprehensive (loss) income | 1 | (781) | (41) | (781) | |
Noncontrolling Interest, Accumulated Other Comprehensive Income (loss) Net of Tax | 1 | (319) | (17) | (319) | |
Accumulated comprehensive loss attributable to the partnership, end of period | $ 774 | $ (341) | $ 774 | $ (341) | |
[1] | Amounts were reclassified from accumulated other comprehensive loss to other (income) expense, net on the consolidated statements of operations. |
Incentive Compensation Plans 50
Incentive Compensation Plans Incentive Compensation Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
General and Administrative Expense [Member] | key employee program (KEP) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Salaries, Wages and Officers' Compensation | $ 2.5 | $ 5.2 |
General and Administrative Expense [Member] | key executive incentive program [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Salaries, Wages and Officers' Compensation | 1.8 | 3.6 |
Cost of Sales [Member] | key employee program (KEP) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Salaries, Wages and Officers' Compensation | $ 1.1 | $ 2.7 |
Restructuring Costs (Details)
Restructuring Costs (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($)employee | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($)employee | |
Restructuring Reserve [Roll Forward] | ||||
Compensation expense | $ 0 | $ 10,075 | ||
Restructuring costs | $ 0 | $ 2,439 | $ 0 | 5,248 |
Restructuring Charges [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Severance Costs | 1,508 | 3,451 | ||
Compensation expense | 806 | 1,444 | ||
Other restructuring costs | $ 125 | $ 353 | ||
One-time Termination Benefits [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of positions eliminated | employee | 12 | 69 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |||
Aug. 08, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | May 15, 2016 | |
Subsequent Event [Line Items] | |||||
Other current liabilities | $ 13,979 | $ 17,466 | |||
Accounts and other receivables, net | 536,548 | 549,544 | |||
Repayments of Long-term Debt | 0 | $ 69,000 | |||
Long-term Line of Credit | 1,198,259 | 1,198,259 | $ 1,200,000 | ||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Repayments of Long-term Debt | $ 452,200 | ||||
Long-term Line of Credit | $ 746,100 | ||||
Estimated Hedge Settlement Payable [Member] | |||||
Subsequent Event [Line Items] | |||||
Other current liabilities | 4,100 | 4,100 | |||
Estimated Hedge Settlement Receivable [Member] | |||||
Subsequent Event [Line Items] | |||||
Accounts and other receivables, net | $ 460,000 | $ 460,000 |