Document and Entity Information
Document and Entity Information - $ / shares | 9 Months Ended | ||
Sep. 30, 2017 | Nov. 07, 2017 | Aug. 01, 2017 | |
Document Information [Line Items] | |||
Common par value | $ 0.001 | ||
Entity Registrant Name | Vanguard Natural Resources, Inc. | ||
Entity Central Index Key | 1,384,072 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-Q | ||
Document Period End Date | Sep. 30, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | Q3 | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 20,055,958 | ||
Subsequent Event | |||
Document Information [Line Items] | |||
Common par value | $ 0.001 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended |
Jul. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Jul. 31, 2017 | Sep. 30, 2016 | |
Other income (expense): | |||||
Reorganization items (Note 3) | $ 900 | ||||
Successor | |||||
Revenues: | |||||
Oil sales | 27,303 | ||||
Natural gas sales | 39,032 | ||||
NGLs sales | 13,465 | ||||
Oil, natural gas and NGLs sales | 79,800 | ||||
Net gains (losses) on commodity derivative contracts | (32,352) | ||||
Total revenues | 47,448 | ||||
Production: | |||||
Lease operating expenses | 26,447 | ||||
Transportation, gathering, processing and compression | 8,044 | ||||
Production and other taxes | 5,737 | ||||
Depreciation, depletion, amortization, and accretion | 27,578 | ||||
Impairment of oil and natural gas properties | 0 | ||||
Impairment of goodwill | 0 | ||||
Exploration expense | 105 | ||||
Selling, general and administrative expenses | 7,194 | ||||
Total costs and expenses | 75,105 | ||||
Loss from operations | (27,657) | ||||
Other income (expense): | |||||
Interest expense | (9,615) | ||||
Net gains on interest rate derivative contracts | 0 | ||||
Net loss on acquisition of oil and natural gas properties | 0 | ||||
Gain on extinguishment of debt | 0 | ||||
Other | 36 | ||||
Total other expense, net | (9,579) | ||||
Loss before reorganization items | (37,236) | ||||
Reorganization items (Note 3) | 0 | ||||
Net income (loss) | (37,236) | ||||
Less: Net income attributable to non-controlling interests | (61) | ||||
Net income (loss) attributable to Vanguard stockholders/unitholders | (37,297) | ||||
Distributions to Preferred unitholders | 0 | ||||
Net income (loss) attributable to Common stockholders/Common and Class B unitholders | $ (37,297) | ||||
Net loss per Common and Class B unit – basic and diluted (in usd per share) | $ (1.86) | ||||
Successor | Common Units | |||||
Other income (expense): | |||||
Weighted average Common units outstanding – basic & diluted (in shares) | 20,056 | ||||
Successor | Class B Units | |||||
Other income (expense): | |||||
Weighted average Common units outstanding – basic & diluted (in shares) | 0 | ||||
Predecessor | |||||
Revenues: | |||||
Oil sales | $ 11,820 | $ 41,999 | $ 97,496 | $ 127,594 | |
Natural gas sales | 4,412 | 52,454 | 113,587 | 121,756 | |
NGLs sales | 4,792 | 10,733 | 35,565 | 30,752 | |
Oil, natural gas and NGLs sales | 21,024 | 105,186 | 246,648 | 280,102 | |
Net gains (losses) on commodity derivative contracts | (12,019) | 21,099 | (24,887) | (15,752) | |
Total revenues | 9,005 | 126,285 | 221,761 | 264,350 | |
Production: | |||||
Lease operating expenses | 11,787 | 39,386 | 87,092 | 120,228 | |
Transportation, gathering, processing and compression | 0 | 0 | 0 | 0 | |
Production and other taxes | 1,983 | 11,823 | 21,186 | 29,967 | |
Depreciation, depletion, amortization, and accretion | 7,328 | 32,096 | 58,384 | 118,935 | |
Impairment of oil and natural gas properties | 0 | 365,658 | |||
Impairment of goodwill | 0 | 252,676 | 0 | 252,676 | |
Exploration expense | 0 | 0 | 0 | 0 | |
Selling, general and administrative expenses | 8,738 | 11,454 | 28,810 | 35,884 | |
Total costs and expenses | 29,836 | 347,435 | 195,472 | 923,348 | |
Loss from operations | (20,831) | (221,150) | 26,289 | (658,998) | |
Other income (expense): | |||||
Interest expense | (5,003) | (22,976) | (35,276) | (72,612) | |
Net gains on interest rate derivative contracts | 0 | 764 | 30 | (6,061) | |
Net loss on acquisition of oil and natural gas properties | 0 | (2,117) | 0 | (3,782) | |
Gain on extinguishment of debt | 0 | 89,714 | |||
Other | 472 | 111 | 783 | 363 | |
Total other expense, net | (4,531) | (24,218) | (34,463) | 7,622 | |
Loss before reorganization items | (25,362) | (245,368) | (8,174) | (651,376) | |
Reorganization items (Note 3) | 988,452 | 0 | 908,485 | 0 | |
Net income (loss) | 963,090 | (245,368) | 900,311 | (651,376) | |
Less: Net income attributable to non-controlling interests | (1) | (27) | (13) | (91) | |
Net income (loss) attributable to Vanguard stockholders/unitholders | 963,089 | (245,395) | 900,298 | (651,467) | |
Distributions to Preferred unitholders | 0 | (6,690) | (2,230) | (20,069) | |
Net income (loss) attributable to Common stockholders/Common and Class B unitholders | $ 963,089 | $ (252,085) | $ 898,068 | $ (671,536) | |
Net loss per Common and Class B unit – basic and diluted (in usd per share) | $ 7.33 | $ (1.92) | $ 6.84 | $ (5.12) | |
Predecessor | Common Units | |||||
Other income (expense): | |||||
Weighted average Common units outstanding – basic & diluted (in shares) | 130,978 | 131,040 | 130,962 | 130,862 | |
Predecessor | Class B Units | |||||
Other income (expense): | |||||
Weighted average Common units outstanding – basic & diluted (in shares) | 420 | 420 | 420 | 420 |
CONSOLIDATED STATEMENTS OF OPE3
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Contractual Interest Expense on Prepetition Liabilities Not Recognized in Statement of Operations | $ 8.6 | $ 14.3 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accrued liabilities: | ||
Commitments and contingencies (Note 9) | ||
Cumulative Preferred Units | ||
Stockholders’ equity/Members’ (deficit) (Note 10) | ||
Partners' Capital | 0 | |
Common Units | ||
Stockholders’ equity/Members’ (deficit) (Note 10) | ||
Partners' Capital | 0 | |
Class B Units | ||
Stockholders’ equity/Members’ (deficit) (Note 10) | ||
Partners' Capital | 0 | |
Successor | ||
Current assets | ||
Cash and cash equivalents | 16,765 | |
Trade accounts receivable, net | 56,265 | |
Derivative assets | 254 | |
Restricted cash | 28,455 | |
Other current assets | 4,709 | |
Total current assets | 106,448 | |
Proved properties | 1,535,917 | |
Unproved properties | 95,611 | |
Oil and natural gas properties | 1,631,528 | |
Accumulated depletion, amortization and impairment | (25,905) | |
Oil and natural gas properties, net – successful efforts method at September 30, 2017 and full cost method at December 31, 2016 | 1,605,623 | |
Other assets | ||
Goodwill | 0 | |
Other assets | 24,476 | |
Total assets | 1,736,547 | |
Accounts payable: | ||
Trade | 12,889 | |
Affiliates | 0 | |
Accrued liabilities: | ||
Lease operating | 12,346 | |
Developmental capital | 12,596 | |
Interest | 4,973 | |
Production and other taxes | 25,314 | |
Other | 23,818 | |
Derivative liabilities | 29,506 | |
Oil and natural gas revenue payable | 27,120 | |
Long-term debt classified as current (Note 5) | 0 | |
Other current liabilities | 11,757 | |
Total current liabilities | 160,319 | |
Long-term debt, net of current portion (Note 5) | 938,224 | |
Derivative liabilities | 25,669 | |
Asset retirement obligations, net of current portion | 140,079 | |
Other long-term liabilities | 403 | |
Total liabilities | 1,264,694 | |
Stockholders’ equity/Members’ (deficit) (Note 10) | ||
Partners' Capital | 471,853 | |
Successor additional paid-in capital | 506,923 | |
Successor accumulated deficit | (37,297) | |
Total stockholders' equity/members’ (deficit) | 469,646 | |
Non-controlling interest in subsidiary | 2,207 | |
Total stockholders' equity/members’ (deficit) | 471,853 | |
Total liabilities and equity (deficit) | 1,736,547 | |
Successor | Common Units | ||
Stockholders’ equity/Members’ (deficit) (Note 10) | ||
Partners' Capital | $ 20 | |
Predecessor | ||
Current assets | ||
Cash and cash equivalents | $ 49,957 | |
Trade accounts receivable, net | 97,138 | |
Derivative assets | 0 | |
Restricted cash | 0 | |
Other current assets | 7,944 | |
Total current assets | 155,039 | |
Proved properties | 4,725,692 | |
Unproved properties | 0 | |
Oil and natural gas properties | 4,725,692 | |
Accumulated depletion, amortization and impairment | (3,867,439) | |
Oil and natural gas properties, net – successful efforts method at September 30, 2017 and full cost method at December 31, 2016 | 858,253 | |
Other assets | ||
Goodwill | 253,370 | |
Other assets | 42,626 | |
Total assets | 1,309,288 | |
Accounts payable: | ||
Trade | 12,929 | |
Affiliates | 1,443 | |
Accrued liabilities: | ||
Lease operating | 14,909 | |
Developmental capital | 6,676 | |
Interest | 13,345 | |
Production and other taxes | 32,663 | |
Other | 5,416 | |
Derivative liabilities | 125 | |
Oil and natural gas revenue payable | 33,672 | |
Long-term debt classified as current (Note 5) | 1,753,345 | |
Other current liabilities | 14,160 | |
Total current liabilities | 1,888,683 | |
Long-term debt, net of current portion (Note 5) | 15,475 | |
Derivative liabilities | 0 | |
Asset retirement obligations, net of current portion | 264,552 | |
Other long-term liabilities | 39,443 | |
Total liabilities | 2,208,153 | |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity/Members’ (deficit) (Note 10) | ||
Partners' Capital | (898,865) | |
Successor additional paid-in capital | 0 | |
Successor accumulated deficit | 0 | |
Total stockholders' equity/members’ (deficit) | (905,708) | |
Non-controlling interest in subsidiary | 6,843 | |
Total stockholders' equity/members’ (deficit) | (898,865) | |
Total liabilities and equity (deficit) | 1,309,288 | |
Predecessor | Cumulative Preferred Units | ||
Stockholders’ equity/Members’ (deficit) (Note 10) | ||
Partners' Capital | 335,444 | |
Predecessor | Common Units | ||
Stockholders’ equity/Members’ (deficit) (Note 10) | ||
Partners' Capital | (1,248,767) | |
Predecessor | Class B Units | ||
Stockholders’ equity/Members’ (deficit) (Note 10) | ||
Partners' Capital | 7,615 | |
Predecessor | Successor Common Stock | ||
Stockholders’ equity/Members’ (deficit) (Note 10) | ||
Partners' Capital | $ 0 |
CONSOLIDATED BALANCE SHEETS (U5
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - Predecessor - shares | Sep. 30, 2017 | Dec. 31, 2016 |
Stockholders’ equity/Members’ (deficit) (Note 10) | ||
Preferred units, issued (shares) | 13,881,873 | 13,881,873 |
Preferred units, outstanding (shares) | 13,881,873 | 13,881,873 |
Common Units | ||
Stockholders’ equity/Members’ (deficit) (Note 10) | ||
Common units (Predecessor) | 130,978,907 | 131,008,670 |
Common units, outstanding (shares) | 130,978,907 | 131,008,670 |
Class B Units | ||
Stockholders’ equity/Members’ (deficit) (Note 10) | ||
Common units (Predecessor) | 420,000 | 420,000 |
Common units, outstanding (shares) | 420,000 | 420,000 |
CONSOLIDATED STATEMENTS OF MEMB
CONSOLIDATED STATEMENTS OF MEMBERS' DEFICIT (Unaudited) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2017 | Sep. 30, 2017 | Jul. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | $ 506,943 | ||||||
Balance | $ 506,943 | $ 506,943 | $ 506,943 | ||||
Accumulated Deficit | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 0 | ||||||
Balance | 0 | 0 | 0 | ||||
Non-controlling Interest | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 0 | ||||||
Balance | 0 | 0 | 0 | ||||
Cumulative Preferred Units | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 0 | $ 0 | |||||
Cumulative Preferred Units | Common Units | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 20 | ||||||
Balance | 20 | 20 | 20 | ||||
Common Units | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 0 | 0 | |||||
Common Units | Additional Paid-in Capital | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 506,923 | ||||||
Balance | 506,923 | 506,923 | 506,923 | ||||
Class B Units | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 0 | 0 | |||||
Predecessor | |||||||
Net Income (Loss) Attributable to Parent | 963,089 | 900,298 | $ (651,467) | ||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 6,621 | 2,274 | (898,865) | (898,865) | (87,435) | $ (87,435) | |
Issuance costs related to prior period equity transactions | 19 | (250) | |||||
Distributions to Preferred unitholders (see Note 9) | (5,575) | ||||||
Distributions to Common and Class B unitholders (see Note 9) | (7,998) | ||||||
Unit-based compensation | 5,391 | 10,639 | |||||
Net income | 963,090 | 900,311 | 900,311 | (651,376) | (815,007) | ||
Non-controlling interest in subsidiary | 7,452 | ||||||
Potato Hills cash distribution to non-controlling interest | (235) | (691) | |||||
Cancellation of Predecessor equity | (4,347) | ||||||
Balance | 2,274 | 2,274 | 2,274 | (898,865) | |||
Predecessor | Non-controlling Interest | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 6,621 | 2,274 | 6,843 | 6,843 | 0 | 0 | |
Net income | 13 | 82 | |||||
Non-controlling interest in subsidiary | 7,452 | ||||||
Potato Hills cash distribution to non-controlling interest | (235) | (691) | |||||
Cancellation of Predecessor equity | (4,347) | ||||||
Balance | 2,274 | 2,274 | 2,274 | 6,843 | |||
Predecessor | Cumulative Preferred Units | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 335,444 | 335,444 | |||||
Balance | 335,444 | ||||||
Predecessor | Cumulative Preferred Units | Member Units | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 335,444 | 335,444 | 335,444 | 335,444 | 335,444 | ||
Cancellation of Predecessor equity | (335,444) | ||||||
Balance | 0 | 0 | 335,444 | ||||
Predecessor | Common Units | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | (1,248,767) | (1,248,767) | |||||
Balance | (1,248,767) | ||||||
Predecessor | Common Units | Member Units | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | (343,059) | (1,248,767) | (1,248,767) | (430,494) | (430,494) | ||
Issuance costs related to prior period equity transactions | 19 | (250) | |||||
Distributions to Preferred unitholders (see Note 9) | (5,575) | ||||||
Distributions to Common and Class B unitholders (see Note 9) | (7,998) | ||||||
Unit-based compensation | 5,391 | 10,639 | |||||
Net income | 900,298 | (815,089) | |||||
Cancellation of Predecessor equity | 343,059 | ||||||
Balance | 0 | 0 | (1,248,767) | ||||
Predecessor | Class B Units | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 7,615 | 7,615 | |||||
Balance | 7,615 | ||||||
Predecessor | Class B Units | Member Units | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 7,615 | 7,615 | 7,615 | $ 7,615 | 7,615 | ||
Cancellation of Predecessor equity | (7,615) | ||||||
Balance | 0 | 0 | $ 7,615 | ||||
Successor | |||||||
Net Income (Loss) Attributable to Parent | (37,297) | ||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 509,217 | ||||||
Net income | (37,236) | ||||||
Potato Hills cash distribution to non-controlling interest | (128) | ||||||
Balance | 509,217 | 509,217 | 471,853 | 509,217 | 471,853 | ||
Successor | Accumulated Deficit | |||||||
Net Income (Loss) Attributable to Parent | (37,297) | ||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 0 | ||||||
Balance | 0 | 0 | (37,297) | 0 | (37,297) | ||
Successor | Non-controlling Interest | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Net income | 61 | ||||||
Potato Hills cash distribution to non-controlling interest | (128) | ||||||
Balance | 2,207 | 2,207 | |||||
Successor | Common Units | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 20 | 20 | |||||
Successor | Common Units | Additional Paid-in Capital | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 506,923 | ||||||
Balance | 506,923 | 506,923 | 506,923 | 506,923 | 506,923 | ||
Successor | Common Units | Common Units | |||||||
Increase (Decrease) in Members' Equity [Roll Forward] | |||||||
Balance | 20 | ||||||
Balance | $ 20 | $ 20 | $ 20 | $ 20 | $ 20 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 2 Months Ended | 7 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Jul. 31, 2017 | Sep. 30, 2016 | |
Successor | |||
Operating activities | |||
Net income (loss) | $ (37,236) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation, depletion, amortization, and accretion | 27,578 | ||
Impairment of oil and natural gas properties | 0 | ||
Impairment of goodwill | 0 | ||
Amortization of deferred financing costs | 443 | ||
Amortization of debt discount | 0 | ||
Reorganization cost | 0 | ||
Compensation related items | 0 | ||
Net losses on commodity and interest rate derivative contracts | 32,352 | ||
Cash settlements received on matured commodity derivative contracts | (2,326) | ||
Cash settlements paid on matured interest rate derivative contracts | 0 | ||
Net loss on acquisition of oil and natural gas properties | 0 | ||
Gain on extinguishment of debt | 0 | ||
Changes in operating assets and liabilities: | |||
Trade accounts receivable | (398) | ||
Other current assets | (253) | ||
Net premiums received (paid) on commodity derivative contracts | 0 | ||
Increase To Restricted Cash Current | 0 | ||
Accounts payable and oil and natural gas revenue payable | (6,692) | ||
Payable to affiliates | 0 | ||
Accrued expenses and other current liabilities | (186) | ||
Other assets | 446 | ||
Net cash provided by operating activities | 13,728 | ||
Investing activities | |||
Additions to property and equipment | 0 | ||
Potato Hills Gas Gathering System acquisition | 0 | ||
Additions to oil and natural gas properties | (14,431) | ||
Deposits and prepayments of oil and natural gas properties | 0 | ||
Proceeds from the sale of oil and natural gas properties | (9,013) | ||
Net cash provided by (used in) investing activities | (23,444) | ||
Financing activities | |||
Proceeds from long-term debt | 0 | ||
Repayment of long-term debt | (835) | ||
Net repayment of debt under the predecessor revolving credit facility | 0 | ||
Proceeds from rights offerings and second lien investment | 0 | ||
Distributions to Preferred unitholders | 0 | ||
Distributions to Common and Class B unitholders | 0 | ||
Potato Hills distribution to non-controlling interest | (128) | ||
Financing fees | (166) | ||
Net cash used in financing activities | (1,129) | ||
Net increase (decrease) cash and cash equivalents | (10,845) | ||
Cash and cash equivalents, beginning of period | 27,610 | ||
Cash and cash equivalents, end of period | 16,765 | $ 27,610 | |
Supplemental cash flow information: | |||
Cash paid for interest | 4,196 | ||
Non-cash investing activity: | |||
Asset retirement obligations, net | 206 | ||
Predecessor | |||
Operating activities | |||
Net income (loss) | 900,311 | $ (651,376) | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation, depletion, amortization, and accretion | 58,384 | 118,935 | |
Impairment of oil and natural gas properties | 0 | 365,658 | |
Impairment of goodwill | 0 | 252,676 | |
Amortization of deferred financing costs | 2,584 | 3,306 | |
Amortization of debt discount | 348 | 2,739 | |
Reorganization cost | (937,956) | 0 | |
Compensation related items | 5,429 | 8,850 | |
Net losses on commodity and interest rate derivative contracts | 24,858 | 21,813 | |
Cash settlements received on matured commodity derivative contracts | 7 | 198,104 | |
Cash settlements paid on matured interest rate derivative contracts | (95) | (6,770) | |
Net loss on acquisition of oil and natural gas properties | 0 | 3,782 | |
Gain on extinguishment of debt | 0 | (89,714) | |
Changes in operating assets and liabilities: | |||
Trade accounts receivable | 34,845 | 10,482 | |
Other current assets | 1,435 | (553) | |
Net premiums received (paid) on commodity derivative contracts | (16) | 176 | |
Increase To Restricted Cash Current | (28,455) | 0 | |
Accounts payable and oil and natural gas revenue payable | 19,444 | (36,296) | |
Payable to affiliates | (895) | 65 | |
Accrued expenses and other current liabilities | (27,018) | (32,497) | |
Other assets | (922) | 10,197 | |
Net cash provided by operating activities | 52,288 | 179,577 | |
Investing activities | |||
Additions to property and equipment | (102) | (73) | |
Potato Hills Gas Gathering System acquisition | 0 | (7,501) | |
Additions to oil and natural gas properties | (25,694) | (49,117) | |
Deposits and prepayments of oil and natural gas properties | (23,731) | (12,257) | |
Proceeds from the sale of oil and natural gas properties | 126,363 | 288,483 | |
Net cash provided by (used in) investing activities | 76,836 | 219,535 | |
Financing activities | |||
Proceeds from long-term debt | 0 | 93,500 | |
Repayment of long-term debt | (41,603) | (430,897) | |
Net repayment of debt under the predecessor revolving credit facility | (500,266) | 0 | |
Proceeds from rights offerings and second lien investment | 275,000 | 0 | |
Distributions to Preferred unitholders | 0 | (6,690) | |
Distributions to Common and Class B unitholders | 0 | (11,917) | |
Potato Hills distribution to non-controlling interest | (235) | (550) | |
Financing fees | (9,367) | (3,764) | |
Net cash used in financing activities | (151,471) | (360,318) | |
Net increase (decrease) cash and cash equivalents | (22,347) | 38,794 | |
Cash and cash equivalents, beginning of period | 27,610 | 49,957 | 0 |
Cash and cash equivalents, end of period | 27,610 | 38,794 | |
Supplemental cash flow information: | |||
Cash paid for interest | 29,631 | 60,575 | |
Non-cash investing activity: | |||
Asset retirement obligations, net | 9,581 | 13,208 | |
Successor Term Loan | Successor | |||
Financing activities | |||
Proceeds from long-term debt | $ 0 | ||
Successor Term Loan | Predecessor | |||
Financing activities | |||
Proceeds from long-term debt | $ 125,000 | $ 0 |
Description of the Business
Description of the Business | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Description of Business | Description of the Business We are an exploration and production company focused on the acquisition, production and development of oil and natural gas properties in the United States. Through our operating subsidiaries, as of September 30, 2017 , we own properties and oil and natural gas reserves primarily located in ten operating areas: • the Green River Basin in Wyoming; • the Piceance Basin in Colorado; • the Permian Basin in West Texas and New Mexico; • the Gulf Coast Basin in Texas, Louisiana, Mississippi and Alabama; • the Arkoma Basin in Arkansas and Oklahoma; • the Big Horn Basin in Wyoming and Montana; • the Anadarko Basin in Oklahoma and North Texas; • the Williston Basin in North Dakota and Montana; • the Wind River Basin in Wyoming; and • the Powder River Basin in Wyoming. Following the completion of the financial restructuring on August 1, 2017 (see Note 1, “ Summary of Significant Accounting Policies, (b) Emergence from Voluntary Reorganization under Chapter 11” and Note 3, “ Fresh-Start Accounting” ), the Company had 20.1 million shares of its common stock outstanding. The Company’s shares of common stock and warrants are traded and quoted on the OTCQX market (which is operated by OTC Markets Group, Inc.) under the symbol VNRR. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The accompanying consolidated financial statements are unaudited and were prepared from our records. We derived the Consolidated Balance Sheet as of December 31, 2016 from the audited financial statements contained in our 2016 Annual Report. Because this is an interim period filing presented using a condensed format, it does not include all of the disclosures required by generally accepted accounting principles in the United States (“GAAP”). You should read this Quarterly Report on Form 10-Q along with our Predecessor’s 2016 Annual Report, which contains a summary of our significant accounting policies and other disclosures. In our opinion, we have made all adjustments which are of a normal, recurring nature to fairly present our interim period results. Information for interim periods may not be indicative of our operating results for the entire year. As of September 30, 2017 , our significant accounting policies, except for those related to the effects of our Chapter 11 Cases discussed below, are consistent with those discussed in Note 1 of our Predecessor’s consolidated financial statements contained in our Predecessor’s 2016 Annual Report. (a) Basis of Presentation and Principles of Consolidation The consolidated financial statements as of September 30, 2017 (Successor) and December 31, 2016 (Predecessor) and for the two months ended September 30, 2017 (Successor), the one and seven months ended July 31, 2017 (Predecessor), and the three and nine months ended September 30, 2016 (Predecessor) include our accounts and those of our subsidiaries. We present our financial statements in accordance with GAAP. All intercompany transactions and balances have been eliminated upon consolidation. We consolidate Potato Hills Gas Gathering System as we have the ability to control the operating and financial decisions and policies of the entity through our 51% ownership and reflected the non-controlling interest as a separate element in our consolidated financial statements. (b) Emergence from Voluntary Reorganization under Chapter 11 On February 1, 2017 (the “Petition Date”), Old Vanguard filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). During the pendency of the Chapter 11 proceedings, the Debtors operated their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. On July 18, 2017, the Bankruptcy Court entered an order confirming the Final Plan (as defined in Note 2). The Company emerged from bankruptcy effective August 1, 2017. Please read Note 2. Emergence From Voluntary Reorganization Under Chapter 11 for a discussion of the Chapter 11 Cases and the Final Plan. In accordance with Accounting Standards Codification (“ASC”) 852, Reorganizations (“ASC 852”), the Successor was required to apply fresh-start accounting upon its emergence from bankruptcy. The Successor evaluated transaction activity between July 31, 2017 and the Effective Date and concluded that an accounting convenience date of July 31, 2017 (the “Convenience Date”) was appropriate for the adoption of fresh-start accounting which resulted in the Successor becoming a new entity for financial reporting purposes as of the Convenience Date. References to “Successor” or “Successor Company” relate to the financial position and results of operations of the reorganized Company subsequent to July 31, 2017. References to “Predecessor” or “Predecessor Company” relate to the financial position and results of operations of the Company prior to, and including, July 31, 2017. As such, these periods are not comparable, are labeled Successor or Predecessor, and are separated by a bold black line. (c) Oil and Natural Gas Properties - Transition from Full Cost Method to Successful Efforts Accounting Method Under GAAP, there are two allowed methods of accounting for oil and natural gas properties: the full cost method and the successful efforts method. Entities engaged in the production of oil and natural gas have the option of selection either method for application in the accounting for their properties. The principal differences between the two methods are in the treatment of exploration costs, the calculation of DD&A expense, and the assessment of impairment of oil and natural gas properties. Prior to July 31, 2017, we followed the full cost method of accounting. Under the full cost method, substantially all costs incurred in connection with the acquisition, development and exploration of oil, natural gas and NGLs reserves are capitalized. These capitalized amounts include the costs of unproved properties, internal costs directly related to acquisitions, development and exploration activities, asset retirement costs and capitalized interest. Under the full cost method, both dry hole costs and geological and geophysical costs are capitalized into the full cost pool, which is subject to amortization and ceiling test limitations. Capitalized costs associated with proved reserves are amortized over the life of the reserves using the unit of production method. Conversely, capitalized costs associated with unproved properties are excluded from the amortizable base until these properties are evaluated, which occurred on a quarterly basis. Specifically, costs are transferred to the amortizable base when properties are determined to have proved reserves. In addition, we transferred unproved property costs to the amortizable base when unproved properties were evaluated as being impaired and as exploratory wells were determined to be unsuccessful. Additionally, the amortizable base includes estimated future development costs, dismantlement, restoration and abandonment costs net of estimated salvage values. Capitalized costs are limited to a ceiling based on the present value of future net revenues, computed using the 12-month unweighted average of first-day-of-the-month historical price, the “12-month average price” discounted at 10% , plus the lower of cost or fair market value of unproved properties. Because a new entity has been created at the Effective Date, and there is no comparability to the Predecessor’s financial statements (refer to Note 3, “ Fresh-Start Accounting ”), upon emergence from bankruptcy, we elected to adopt the Successful Efforts Method of Accounting for our oil and natural gas properties. We believe that application of successful efforts accounting will provide greater transparency in the results of our oil and natural gas properties and enhance decision making and capital allocation processes. Additionally, application of the successful efforts method will eliminate proved property impairments based on historical prices, which are not indicative of the fair value of our oil and natural gas properties, and better reflect the true economics of developing our oil and natural gas reserves. Therefore, from August 1, 2017 we have used the successful efforts method to account for our investment in oil and natural gas properties in the Successor. Under the successful efforts method, we will capitalize the costs of acquiring unproved and proved oil and natural gas leasehold acreage. When proved reserves are found on an unproved property, the associated leasehold cost is transferred to proved properties. Significant unproved leases are reviewed periodically, and a valuation allowance is provided for any estimated decline in value. In determining whether an unproved property is impaired, the Company considers numerous factors including, but not limited to, current exploration and development plans, favorable or unfavorable exploration activity on the property being evaluated and/or adjacent properties, our geologists' evaluation of the property, and the remaining months in the lease term for the property. Development costs are capitalized, including the costs of unsuccessful and successful development wells and the costs to drill and equip exploratory wells that find proved reserves. Exploration costs, including unsuccessful exploratory wells and geological and geophysical costs, are expensed as incurred. Depreciation, depletion and amortization of the leasehold and development costs that are capitalized into proved oil and natural gas properties are computed using the units-of-production method, at the district level, based on total proved reserves and proved developed reserves, respectively. Upon sale or retirement of oil and gas properties, the costs and related accumulated depreciation, depletion and amortization are eliminated from the accounts and the resulting gain or loss is recognized. Additionally, proved oil and natural gas properties are assessed for impairment in accordance with Accounting Standards Codification Topic 360 “ Property, Plant and Equipment”, when events and circumstances indicate a decline in the recoverability of the carrying values of such properties, such as a negative revision of reserves estimates or sustained decrease in commodity prices, but at least annually. We estimate future cash flows expected in connection with the properties and compare such future cash flows to the carrying amount of the properties to determine if the carrying amount is recoverable. If, the sum of the undiscounted pretax cash flows is less than the carrying amount, then the carrying amount is written down to its estimated fair value. (d) Goodwill and Other Intangible Assets Prior to July 31, 2017, we accounted for goodwill under the provisions of the Accounting Standards Codification (“ASC”) Topic 350, “Intangibles-Goodwill and Other.” Goodwill represented the excess of the purchase price over the estimated fair value of the net assets acquired in business combinations. Goodwill was not amortized, but was tested for impairment annually on October 1 or whenever indicators of impairment existed. (e) Income Taxes Prior to July 31, 2017, the Company was a limited liability corporation treated as a partnership for federal and state income tax purposes, in which the taxable income tax or loss of the Company were passed through to its unitholders. Effective upon consummation of the Final Plan, the Successor became a C Corporation subject to federal and state income taxes. As a C corporation, we will account for income taxes, as required, under the liability method. Deferred tax assets and liabilities will be recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities will be measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates will be recognized in income in the period that includes the enactment date. Deferred tax assets will be reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. (f) New Pronouncements Recently Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. Throughout 2015 and 2016, the FASB issued a series of updates to the revenue recognition guidance in Topic 606, including ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The amendments in ASU 2014-09, ASU 2016-08, ASU 2016-10, ASU 2016-12, and ASU 2016-20 are effective for public entities for annual reporting periods beginning after December 15, 2017, and for interim periods within that reporting period with early adoption permitted for annual reporting periods beginning after December 15, 2016. In conjunction with fresh-start accounting, the Company has elected to early adopt the standard effective August 1, 2017. We adopted using the modified retrospective method, which fresh-start accounting allows us to apply the new standard to all new contracts entered into on or after August 1, 2017 and all existing contracts for which all (or substantially all) of the revenue has not been recognized under legacy revenue guidance as of August 1, 2017. The adoption of this guidance did not have a material impact on the Company’s financial statements. See Note 4, “Impact of ASC 606 Adoption,” for further details related to the Company’s adoption of this standard. (g) New Pronouncements Issued But Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU No. 2016-02”), which requires lessees to recognize at the commencement date for all leases, with the exception of short-term leases, (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The ASU No. 2016-02 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We do not expect the adoption of ASU No. 2016-02 will have a material impact on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-48 “Statement of Cash Flows (Topic 230): Restricted Cash” which is intended to address diversity in the classification and presentation of changes in restricted cash on the statement of cash flows. This ASU will be applied retrospectively as of the date of adoption and is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years (early adoption permitted). The Company is currently evaluating the impact of the adoption of this ASU on its financial statements and related disclosures. The adoption of this ASU is expected to result in the inclusion of restricted cash in the beginning and ending balances of cash on the statements of cash flows and disclosure reconciling cash and cash equivalents presented on the consolidated balance sheets to cash, cash equivalents and restricted cash on the consolidated statements of cash flows. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU No. 2017-01”). The amendments under this ASU provide guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (disposals) or business combinations by providing a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business, therefore reducing the number of transactions that need to be further evaluated for treatment as a business combination. The ASU No. 2017-01 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 and should be applied prospectively. The Company is currently evaluating the provisions of ASU 2017-01 and assessing the impact adoption may have on our consolidated financial statements. Currently, we do not expect the adoption of ASU 2017-01 to have a material impact on our consolidated financial statements; however these amendments could result in the recording of fewer business combinations in future periods. (h) Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates pertain to proved oil, natural gas and NGLs reserves and related future cash flows, the fair value of derivative contracts, asset retirement obligations, accrued oil, natural gas and NGLs revenues and expenses, as well as estimates of expenses related to depreciation, depletion, amortization and accretion, income taxes and estimated enterprise value and fair values of assets and liabilities under the provisions of ASC 852 fresh-start accounting. Actual results could differ from those estimates. |
Emergence from Voluntary Reorga
Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code | 9 Months Ended |
Sep. 30, 2017 | |
Chapter 11 Cases [Abstract] | |
Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code | Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code On February 1, 2017, the Predecessor and certain subsidiaries (such subsidiaries, together with the Predecessor, the “Debtors”) filed voluntary petitions for relief (collectively, the “Bankruptcy Petitions” and, the cases commenced thereby, the “Chapter 11 Cases”) under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Chapter 11 Cases were administered under the caption “In re Vanguard Natural Resources, LLC, et al.” Prior to the filing of the Bankruptcy Petitions, on February 1, 2017, we entered into a restructuring support agreement (the “Initial RSA”). The Debtors entered into the Initial RSA with: (i) certain holders of the 7.875% Senior Notes due 2020 (the “Senior Notes due 2020”), constituting at the time of signing approximately 52% of such holders (the “Consenting 2020 Noteholders”); (ii) certain holders of the 8.375% Senior Notes due 2019 (the “Senior Notes due 2019,” and together with the Senior Notes due 2020, the “Senior Notes”), constituting at the time of signing approximately 10% of such holders (the “Consenting 2019 Noteholders” and, together with the Consenting 2020 Noteholders, the “Consenting Senior Noteholders”); and (iii) certain holders of the 7.0% Senior Secured Second Lien Notes due 2023 (the “Old Second Lien Notes” or “Senior Notes due 2023”), constituting at the time of signing approximately 92% of such holders (the “Consenting Second Lien Noteholders”). On June 6, 2017, certain lenders under the Predecessor’s Third Amended and Restated Credit Agreement, dated as of September 30, 2011 (as amended from time to time, the “Predecessor Credit Facility”), among them, Citibank, N.A., as administrative agent and Issuing Bank, (such lenders, the “Consenting RBL Lenders” and, together with the Consenting Senior Noteholders and Consenting Second Lien Noteholders, the “Restructuring Support Parties”), became parties to the amended Restructuring Support Agreement dated as of May 23, 2017. On July 18, 2017, the Bankruptcy Court entered the Order Confirming Debtors’ Modified Second Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the “Confirmation Order”), which approved and confirmed the Debtors’ Modified Second Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the “Final Plan”). The Final Plan provided for the reorganization of the Debtors as a going concern and significantly reduced the long-term debt and annual interest payments of the Successor. During the pendency of the Chapter 11 Cases, we operated our business as debtors-in-possession in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Debtors satisfied all conditions precedent under the Final Plan and emerged from bankruptcy on August 1, 2017. The Successor reorganized as a Delaware corporation named Vanguard Natural Resources, Inc. on the Effective Date. Pursuant to the Final Plan, each of the Predecessor’s equity securities outstanding immediately before the Effective Date (including any unvested restricted units held by employees or officers of the Debtor, or options and warrants to purchase such securities) have been cancelled and are of no further force or effect as of the Effective Date. Under the Final Plan, the Debtors’ new organizational documents became effective on the Effective Date. The Successor’s new organizational documents authorize the Successor to issue new equity, certain of which was issued to holders of allowed claims pursuant to the Final Plan on the Effective Date. In addition, on the Effective Date, the Successor entered into a registration rights agreement with certain equity holders. As of August 1, 2017, the Successor reserved for issuance 20.1 million outstanding shares of common stock, $0.001 par value. (“Common Stock”). Plan of Reorganization Upon emergence, pursuant to the terms of the Final Plan, the following significant transactions occurred: • The Predecessor transferred all of its membership interests in VNG, a Kentucky limited liability company and the Predecessor’s wholly owned first-tier subsidiary, to the Successor (formerly known as VNR Finance Corp.). VNG directly or indirectly owned all of the other subsidiaries of the Predecessor. As a result of the foregoing and certain other transactions, the Successor is no longer a subsidiary of the Predecessor and now owns all of the former subsidiaries of the Predecessor; • VNG, as borrower, entered into that certain Fourth Amended and Restated Credit Agreement dated as of August 1, 2017 (the “Successor Credit Facility”), by and among VNG as borrower, Citibank, N.A. as administrative agent (the “Administrative Agent”) and Issuing Bank, and the lenders party thereto (the “Lenders”). Pursuant to the Successor Credit Facility, the lenders party thereto agreed to provide VNG with an $850.0 million exit senior secured reserve-based revolving credit facility (the “Revolving Loans”). The initial borrowing base available under the Successor Credit Facility as of the Effective Date was $850.0 million and the aggregate principal amount of Revolving Loans outstanding under the Successor Credit Facility as of the Effective Date was $730.0 million . The Successor Credit Facility also includes an additional $125.0 million senior secured term loan (the “Term Loan”). The holders of claims under the Predecessor Credit Facility received a full recovery, consisting of a cash pay down and their pro rata share of the Successor Credit Facility; The next borrowing base redetermination is scheduled for August of 2018; • The Successor issued approximately $80.7 million aggregate principal amount of new 9.0% Senior Secured Second Lien Notes due 2024 (the “New Notes” or “Senior Notes due 2024”) to certain eligible holders of their outstanding Old Second Lien Notes in full satisfaction of their claim of approximately $80.7 million related to the Old Second Lien Notes held by such holders; • The Predecessor’s Senior Notes were cancelled and the Consenting Senior Noteholders received their pro rata share of 3.38% (subject to dilution) of the Common Stock, in full and final satisfaction of their claims; • The Predecessor completed a rights offering backstopped by certain holders of our Senior Notes (the “Backstop Parties”) which generated $275.0 million of gross proceeds. The rights offering resulted in the issuance of Common Stock, representing approximately 89.92% of outstanding shares of Common Stock, to holders of claims arising under the Senior Notes and to the Backstop Parties; • The Successor entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with certain recipients of shares of its Common Stock distributed on the Effective Date that were parties to the Amended and Restated Backstop Commitment Agreement (including the Backstop Parties and certain of their affiliates and related funds), in accordance with the terms set forth in the Final Plan (collectively, the “Registration Rights Holders”). Pursuant to the Registration Rights Agreement, we agreed to, among other things, file a registration statement with the SEC within 90 days of the Effective Date covering the offer and resale of “Registrable Securities” (as defined in the Registration Rights Agreement); We filed the registration statement on October 30, 2017; • Additional shares of Common Stock, representing eleven percent of outstanding shares of Common Stock on a fully diluted basis, were authorized for issuance under the Vanguard Natural Resources, Inc. 2017 Management Incentive Plan (the “MIP”); • All outstanding Preferred Units (defined below) issued and outstanding immediately prior to the Effective Date were cancelled and the holders thereof received their pro rata shares of (i) 3% of outstanding shares of Common Stock and (ii) Preferred Unit Warrants (as defined below), in full and final satisfaction of their interests; • All common equity of the Predecessor issued and outstanding immediately prior to the Effective Date were cancelled and the holders of the common equity received Common Unit Warrants (as defined below), in full and final satisfaction of their interests; • The Successor entered into a warrant agreement (the “Warrant Agreement”) with American Stock Transfer & Trust Company, LLC, as warrant agent, pursuant to which the Successor issued (i) to electing holders of the Predecessor’s (A) 7.875% Series A Cumulative Redeemable Perpetual Preferred Units (“Series A Preferred Units”), (B) 7.625% Series B Cumulative Redeemable Perpetual Preferred Units (“Series B Preferred Units”), and (C) 7.75% Series C Cumulative Redeemable Perpetual Preferred Units (“Series C Preferred Units” and, together with the Series A Preferred Units and Series B Preferred Units, the “Preferred Units”), three and a half year warrants (the “Preferred Unit Warrants”), which will be exercisable to purchase up to 621,649 shares of the Common Stock as of the Effective Date; and (ii) to electing holders of the Predecessor’s common units representing limited liability company interests, three and a half year warrants (the “Common Unit Warrants” and, together with the Preferred Unit Warrants, the “Warrants”) which will be exercisable to purchase up to 640,876 shares of the Common Stock as of the Effective Date. The expiration date of the Warrants will be February 1, 2021. The strike price for the Preferred Unit Warrants is $44.25 , and the strike price for the Common Unit Warrants is $61.45 ; • By operation of the Final Plan and the Confirmation Order, the terms of the Predecessor’s board of directors expired as of the Effective Date. Our current board of directors (the “Board”) consists of seven members, including our and our Predecessor’s Chief Executive Officer. Our Chief Financial Officer was initially appointed as a director upon emergence and became our Chief Financial Officer as well, following the resignation of our Predecessor’s Chief Financial Officer; • Certain other priority or convenience class claims were paid in full in cash, reinstated or otherwise treated in a manner acceptable to the creditor claimholders; and • On the Effective Date, the Successor reserved for issuance 20,100,000 shares of Common Stock. Each of the foregoing percentages of equity in the Successor were as of August 1, 2017 and are subject to dilution from the exercise of the Warrants described above, the MIP discussed further in Note 10, “Stockholders’ Equity (Members’ Deficit),” and other future issuances of equity interests. See Note 5, “Debt,” and Note 10, “Stockholders’ Equity (Members’ Deficit),” for further information regarding the Predecessor and Successor’s debt and equity instruments. Listing on the OTCQX Market As a result of cancellation of the Predecessor’s units on the Effective Date, the units ceased to trade on the OTC Markets Group Inc.’s Pink marketplace. In September 2017, the Successor’s common stock was approved for trading on the OTCQX market under the symbol “VNRR.” Fresh-Start Accounting Upon the Company’s emergence from chapter 11 bankruptcy, the Company qualified for and applied fresh-start accounting in accordance with the provisions set forth in ASC 852 as (i) the Reorganization Value (as defined below) of the Company’s assets immediately prior to the date of confirmation was less than the post-petition liabilities and allowed claims, and (ii) the holders of the existing voting shares of the Predecessor entity received less than 50% of the voting shares of the emerging entity. Refer to Note 2 , “Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code” for the terms of the Final Plan. Fresh-start accounting requires the Company to present its assets, liabilities, and equity as if it were a new entity upon emergence from bankruptcy. The new entity is referred to as “Successor” or “Successor Company.” However, the Company will continue to present financial information for any periods before application of fresh-start accounting for the Predecessor Company. The Predecessor and Successor companies lack comparability, as required in ASC Topic 205, Presentation of Financial Statements (ASC 205). ASC 205 states financial statements are required to be presented comparably from year to year, with any exceptions to comparability clearly disclosed. Therefore, “black-line” financial statements are presented to distinguish between the Predecessor and Successor companies. Adopting fresh-start accounting results in a new financial reporting entity with no beginning retained earnings or deficit as of the fresh-start reporting date. Upon the application of fresh-start accounting, the Company allocated the fair value of the Successor Company’s total assets (the “Reorganization Value”) to its individual assets based on their estimated fair values. The Reorganization Value is intended to represent the approximate amount a willing buyer would value the Company's assets immediately after the reorganization. Reorganization Value is derived from an estimate of Enterprise Value, or the fair value of the Company’s long-term debt and stockholders’ equity. The estimated Enterprise Value at the Effective Date was $1.425 billion as established in the Plan and approved by the bankruptcy court. The Enterprise Value was derived from an independent valuation using an asset based methodology of proved reserves, undeveloped acreage, and other financial information, considerations and projections, applying a combination of the income, cost and market approaches as of the Convenience Date. The Company’s principal assets are its oil and natural gas properties. Significant inputs used to determine the fair values of properties include estimates of: (i) reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital rate. These inputs require significant judgments and estimates by the Company’s management at the time of the valuation and are the most sensitive and subject to change. For purposes of estimating the fair value of the Company’s proved, probable and possible reserves, an income approach was used which estimated fair value based on the anticipated cash flows associated with the Company’s reserves, risked by reserve category and discounted using a weighted average cost of capital rate of 10.0% . The proved reserve locations were limited to wells expected to be drilled in the Company’s five -year development plan. Weighted average commodity prices utilized in the determination of the fair value of oil and natural gas properties were $67.20 per barrel of oil, $3.69 per million British thermal units (MMBtu) of natural gas and $24.59 per barrel of oil equivalent of natural gas liquids, after adjustment for transportation fees, quality differentials and regional price differentials. Base pricing was derived from an average of forward strip prices and analysts’ estimated prices. In estimating the fair value of the Company's unproved acreage that was not included in the valuation of probable and possible reserves, a market approach was used in which a review of recent transactions involving properties in the same geographical location indicated the fair value of the Company's unproved acreage from a market participant perspective. See further discussion below under “Fresh-Start Adjustments” for the specific assumptions used in the valuation of the Company's various other assets. Although the Company believes the assumptions and estimates used to develop Enterprise Value and Reorganization Value are reasonable and appropriate, different assumptions and estimates could materially impact the analysis and resulting conclusions. The assumptions used in estimating these values are inherently uncertain and require judgment. The following table reconciles the Company’s Enterprise Value to the estimated fair value of the Successor’s common stock as of July 31, 2017 (in thousands): July 31, 2017 Enterprise Value $ 1,425,000 Plus: Cash and cash equivalents 27,610 Less: Debt (943,392 ) Total stockholders' equity 509,217 Less: Fair value of warrants (11,734 ) Less: Fair value of non-controlling interest (2,274 ) Fair Value of Successor common stock $ 495,209 The following table reconciles the Company’s Debt as of July 31, 2017 (in thousands): July 31, 2017 Successor Credit Facility $ 730,000 Successor Term Loan 125,000 Senior Notes due 2024 80,722 Lease Financing Obligation, net of current portion 12,464 Current portion of Lease Financing Obligation 4,647 Total Fair value of debt 952,833 Successor Credit Facility fees and debt issuance costs (9,441 ) Total Debt $ 943,392 The following table reconciles the Company’s Enterprise Value to its Reorganization Value as of July 31, 2017 (in thousands): July 31, 2017 Enterprise Value $ 1,425,000 Plus: Cash and cash equivalents 27,610 Plus: Current liabilities, excluding current portion of Lease Financing Obligation 147,552 Plus: Other noncurrent liabilities 15,589 Plus: Long-term asset retirement obligation 136,769 Reorganization Value of Successor assets $ 1,752,520 Condensed Consolidated Balance Sheet The following illustrates the effects on the Company’s unaudited condensed consolidated balance sheet due to the reorganization and fresh-start accounting adjustments. The explanatory notes following the table below provide further details on the adjustments, including the Company’s assumptions and methods used to determine fair value for its assets and liabilities. As of July 31, 2017 (in thousands) Predecessor Reorganization Adjustments (1) Fresh-Start Adjustments Successor Assets Current assets Cash and cash equivalents $ 68,933 $ (41,323 ) (2) $ — $ 27,610 Trade accounts receivable, net 64,253 (155 ) (3) (8,231 ) (15) 55,867 Derivative assets 3,236 — — 3,236 Restricted cash 102,556 (74,101 ) (4) — 28,455 Other current assets 4,430 (394 ) (5) 416 (16) 4,452 Total current assets 243,408 (115,973 ) (7,815 ) 119,620 Oil and natural gas properties, at cost 4,635,867 — (3,029,173 ) (17) 1,606,694 Accumulated depletion (3,916,889 ) — 3,916,889 (17) — Oil and natural gas properties 718,978 — 887,716 1,606,694 Other assets Goodwill 253,370 — (253,370 ) (18) — Other assets 44,315 — (18,109 ) (19)(20) 26,206 Total assets $ 1,260,071 $ (115,973 ) $ 608,422 $ 1,752,520 Liabilities and equity (deficit) Current liabilities Accounts payable: Trade $ 8,444 $ 9,978 (6) $ — $ 18,422 Accrued liabilities: Lease operating 13,199 — — 13,199 Development capital 8,928 — — 8,928 Interest 8,478 (8,478 ) (7) — — Production and other taxes 23,494 — — 23,494 Other 20,933 12,297 (8) — 33,230 Derivative liabilities 12,987 — — 12,987 Oil and natural gas revenue payable 36,087 — (7,808 ) (15) 28,279 Long-term debt classified as current 1,300,971 (1,300,971 ) (9) — — Other 14,246 (382 ) (10) (203 ) (21) 13,661 Total current liabilities 1,447,767 (1,287,556 ) (8,011 ) 152,200 Long-term debt, net of current portion 12,647 926,281 (11) (183 ) (22) 938,745 Derivative liabilities 15,143 — — 15,143 Asset retirement obligations, net of current portion 260,089 — (123,320 ) (23) 136,769 Other long-term liabilities 37,683 — (37,237 ) (24) 446 Total liabilities not subject to compromise 1,773,329 (361,275 ) (168,751 ) 1,243,303 Liabilities subject to compromise 479,911 (479,911 ) (12) — — Total Liabilities 2,253,240 (841,186 ) (168,751 ) 1,243,303 As of July 31, 2017 Predecessor Reorganization Adjustments (1) Fresh-Start Adjustments Successor Stockholders’ equity/Members’ (deficit) (Note 9) Preferred units (Predecessor) 335,444 (335,444 ) (13) — — Common units (Predecessor) (1,342,849 ) 763,217 (13) 579,632 (25) — Class B units (Predecessor) 7,615 (7,615 ) (13) — — Common stock (Successor) — 20 (14) — 20 Additional paid-in capital (Successor) — 305,035 (14) 201,888 (25) 506,923 Total VNR stockholders' equity/ members’ (deficit) (999,790 ) 725,213 781,520 506,943 Non-controlling interest in subsidiary 6,621 — (4,347 ) (26) 2,274 Total stockholders' equity/members’ (deficit) (993,169 ) 725,213 777,173 509,217 Total liabilities and equity (deficit) $ 1,260,071 $ (115,973 ) $ 608,422 $ 1,752,520 Reorganization Adjustments: 1) Represent amounts recorded as of the Convenience Date for the implementation of the Final Plan, including, among other items, settlement of the Predecessor’s liabilities subject to compromise, repayment of certain of the Predecessor’s debt, cancellation of the Predecessor’s equity, issuances of the Successor’s common stock and equity warrants, proceeds received from the Successor’s rights offering and issuance of the Successor’s debt. 2) Changes in cash and cash equivalents included the following (in thousands): Proceeds from equity investment from holders of Old Second Lien Notes $ 19,250 Proceeds from rights offering 255,750 Borrowings under the Successor's Term Loan 125,000 Removal of restriction on cash balance 102,556 Payment of holders of claims under the Predecessor Credit Facility (500,266 ) Payment of interest and fees under the Predecessor Credit Facility (3,390 ) Payment of Successor Credit Facility fees (9,300 ) Payment of professional fees (2,468 ) Funding of the general unsecured claims cash distribution pools (6,750 ) Funding of the professional fees escrow account (21,705 ) Changes in cash and cash equivalents $ (41,323 ) 3) Reflects the write-off of lease incentive costs due to the rejection of the related lease contract. 4) Net change to restricted cash includes the following: Removal of restriction on cash balance $ (102,556 ) Funding of the general unsecured claims cash distribution pools 6,750 Funding of the professional fees escrow account 21,705 $ (74,101 ) 5) Primarily reflects the write-off of the Predecessor’s equity offering costs. 6) Reflects reinstatement of payables for the general unsecured claims and trade claims cash distribution pool. 7) Reflects payment of accrued interest related to Predecessor Credit Facility and Predecessor debtor-in-possession credit facility of $3.4 million and the capitalization of approximately $5.1 million accrued interest on the Old Second Lien Notes into the principal amount of the Senior Notes due 2024. 8) Net increase in other accrued expenses reflect (in thousands): Recognition of payables for the professional fees escrow account $ 12,627 Write-off of accrued non cash compensation related to Phantom Units granted (330 ) Net increase in accounts payable and accrued expenses $ 12,297 9) Reflects the repayment of outstanding borrowings under the Predecessor Credit Facility of approximately $500.3 million and the conversion of the remaining outstanding debt to Successor Credit Facility and the Senior Notes due 2024 to Long-Term Debt, net of the write-off of deferred financing fees. 10) Reflects the write-off of deferred rent due to the rejection of the related lease contract. 11) Reflects $855.0 million of outstanding borrowings under the Successor Credit Facility, which includes a $730.0 million revolving loan and a $125.0 million Term Loan. The adjustment also reflects the issuance of Senior Notes due 2024 of $80.7 million . The amounts are presented net of capitalized deferred financing fees related to each debt. 12) Settlement of Liabilities subject to compromise and the resulting net gain were determined as follows (in thousands): Accounts payable and accrued expenses $ 36,224 Accrued interest payable 10,737 Debt 432,950 Total liabilities subject to compromise 479,911 Reinstatement of liability for the general unsecured claims (4,978 ) Reinstatement of liability for settlement of an unsecured claim (5,000 ) Issuance of common shares to holders of general unsecured claims (1,089 ) Issuance of common shares to holders of Senior Notes claims (16,715 ) Gain on settlement of liabilities subject to compromise $ 452,129 13) Net change in Predecessor common units reflects (in thousands): Recognition of gain on settlement of liabilities subject to compromise $ 452,129 Cancellation of Predecessor Preferred units 335,444 Cancellation of Predecessor Class B units 7,615 Write-off of deferred financing costs and debt discounts (4,917 ) Recognition of professional and success fees (14,968 ) Fair value of warrants issued to Predecessor unitholders (11,734 ) Fair value of shares issued to Predecessor unitholders (517 ) Terminated contracts 165 Net change in Predecessor Common units $ 763,217 14) Net change in Successor equity reflects net increase in capital accounts as follows (in thousands): Issuance of common stock to general unsecured creditors $ 1,089 Issuance of common stock to holders of Senior Notes claims 16,715 Issuance of common stock to Predecessor preferred unitholders 517 Issuance of common stock for the second lien equity investment 19,250 Issuance of common stock pursuant to the rights offering 255,750 Issuance of warrants 11,734 Change in additional paid-in capital 305,055 Par value of common stock (20 ) Net increase in capital accounts $ 305,035 See Note 10 , “Stockholders’ Equity (Members’ Deficit)” for additional information on the issuances of the Successor’s equity. Fresh-Start Adjustments: 15) Reflects a change in accounting policy from the entitlements method for natural gas production imbalances in accordance with the adoption of ASC 606. 16) Reflects fair value adjustment for oil inventory. 17) Reflects the adjustments to oil and natural gas properties, based on the methodology discussed above, and the elimination of accumulated depletion. The following table summarizes the components of oil and natural gas properties as of the Convenience Date (in thousands): Successor Predecessor Fair Value Historical Book Value Proved properties $ 1,511,083 $ 4,635,867 Unproved properties 95,611 — 1,606,694 4,635,867 Less: accumulated depletion and amortization — (3,916,889 ) $ 1,606,694 $ 718,978 18) Reflects the write-off of Predecessor goodwill. 19) Reflects a decrease of other property and equipment and the elimination of accumulated depreciation. The following table summarizes the components of other property and equipment as of the Convenience Date (in thousands): Successor Predecessor Fair Value Historical Book Value Gas gathering assets $ 4,196 $ 19,942 Office equipment and furniture 574 5,847 Buildings and leasehold improvements 57 836 Vehicles 1,311 1,549 6,138 28,174 Less: accumulated depreciation — (13,657 ) $ 6,138 $ 14,517 In estimating the fair value of other property and equipment, the Company used a combination of cost and market approaches. A cost approach was used to value the Company’s other operating assets, based on current replacement costs of the assets less depreciation based on the estimated economic useful lives of the assets and age of the assets. A market approach was used to value the Company’s vehicles, using recent transactions of similar assets to determine the fair value from a market participant perspective. 20) Reflects an adjustment for the intangible asset related to the Company’s nickel gas contract of $5.6 million and the write-off of deferred tax asset of $4.1 million . 21) Reflects the adjustment of current portion of financing obligation to fair value and write-off of deferred rent. 22) Reflects the adjustment of long-term portion of financing obligation to fair value. 23) Primarily reflects the fair value adjustment of asset retirement obligations (“ARO”) to fair value of approximately $145.2 million , of which $136.8 million is reflected as long-term ARO and $8.4 million of current ARO shown in other current liabilities. The fair value of asset retirement obligations was estimated using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation include estimates of: (i) plug and abandon costs per well based on existing regulatory requirements; (ii) remaining life per well; (iii) future inflation factors; and (iv) a credit-adjusted risk-free interest rate. Refer to Note 8, “ Asset Retirement Obligations” for further details of the Company's asset retirement obligations. 24) Reflects the write-off of deferred tax liabilities. 25) Reflects the cumulative impact of the fresh-start accounting adjustments discussed above and the elimination of Common units (Predecessor). 26) Reflects the fair value adjustment to the Potato Hills gas gathering assets on the non-controlling interest. Reorganization Items Reorganization items represent (i) expenses or income incurred subsequent to the Petition Date as a direct result of the Final Plan, (ii) gains or losses from liabilities settled, and (iii) fresh-start accounting adjustments and are recorded in “Reorganization items” in the Company’s unaudited consolidated statements of operations. The following table summarizes the net reorganization items (in thousands): Predecessor Seven Months Ended July 31, 2017 Gain on settlement of Liabilities subject to compromise $ 452,129 Fresh-start accounting adjustments 781,520 Issuance of common shares and warrants (214,140 ) Legal and other professional fees (58,482 ) Recognition of additional unsecured claims (31,346 ) Write-off of deferred financing costs and debt discounts (21,361 ) Terminated contracts 165 Reorganization items $ 908,485 Reorganization costs incurred subsequent to the Emergence Date of $0.9 million are recorded in the selling, general and administrative expenses line item in the Company’s unaudited consolidated statements of operations for the two months ended September 30, 2017. |
Fresh-Start Accounting (Notes)
Fresh-Start Accounting (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Reorganizations [Abstract] | |
Fresh-Start Accounting | Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code On February 1, 2017, the Predecessor and certain subsidiaries (such subsidiaries, together with the Predecessor, the “Debtors”) filed voluntary petitions for relief (collectively, the “Bankruptcy Petitions” and, the cases commenced thereby, the “Chapter 11 Cases”) under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Chapter 11 Cases were administered under the caption “In re Vanguard Natural Resources, LLC, et al.” Prior to the filing of the Bankruptcy Petitions, on February 1, 2017, we entered into a restructuring support agreement (the “Initial RSA”). The Debtors entered into the Initial RSA with: (i) certain holders of the 7.875% Senior Notes due 2020 (the “Senior Notes due 2020”), constituting at the time of signing approximately 52% of such holders (the “Consenting 2020 Noteholders”); (ii) certain holders of the 8.375% Senior Notes due 2019 (the “Senior Notes due 2019,” and together with the Senior Notes due 2020, the “Senior Notes”), constituting at the time of signing approximately 10% of such holders (the “Consenting 2019 Noteholders” and, together with the Consenting 2020 Noteholders, the “Consenting Senior Noteholders”); and (iii) certain holders of the 7.0% Senior Secured Second Lien Notes due 2023 (the “Old Second Lien Notes” or “Senior Notes due 2023”), constituting at the time of signing approximately 92% of such holders (the “Consenting Second Lien Noteholders”). On June 6, 2017, certain lenders under the Predecessor’s Third Amended and Restated Credit Agreement, dated as of September 30, 2011 (as amended from time to time, the “Predecessor Credit Facility”), among them, Citibank, N.A., as administrative agent and Issuing Bank, (such lenders, the “Consenting RBL Lenders” and, together with the Consenting Senior Noteholders and Consenting Second Lien Noteholders, the “Restructuring Support Parties”), became parties to the amended Restructuring Support Agreement dated as of May 23, 2017. On July 18, 2017, the Bankruptcy Court entered the Order Confirming Debtors’ Modified Second Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the “Confirmation Order”), which approved and confirmed the Debtors’ Modified Second Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the “Final Plan”). The Final Plan provided for the reorganization of the Debtors as a going concern and significantly reduced the long-term debt and annual interest payments of the Successor. During the pendency of the Chapter 11 Cases, we operated our business as debtors-in-possession in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Debtors satisfied all conditions precedent under the Final Plan and emerged from bankruptcy on August 1, 2017. The Successor reorganized as a Delaware corporation named Vanguard Natural Resources, Inc. on the Effective Date. Pursuant to the Final Plan, each of the Predecessor’s equity securities outstanding immediately before the Effective Date (including any unvested restricted units held by employees or officers of the Debtor, or options and warrants to purchase such securities) have been cancelled and are of no further force or effect as of the Effective Date. Under the Final Plan, the Debtors’ new organizational documents became effective on the Effective Date. The Successor’s new organizational documents authorize the Successor to issue new equity, certain of which was issued to holders of allowed claims pursuant to the Final Plan on the Effective Date. In addition, on the Effective Date, the Successor entered into a registration rights agreement with certain equity holders. As of August 1, 2017, the Successor reserved for issuance 20.1 million outstanding shares of common stock, $0.001 par value. (“Common Stock”). Plan of Reorganization Upon emergence, pursuant to the terms of the Final Plan, the following significant transactions occurred: • The Predecessor transferred all of its membership interests in VNG, a Kentucky limited liability company and the Predecessor’s wholly owned first-tier subsidiary, to the Successor (formerly known as VNR Finance Corp.). VNG directly or indirectly owned all of the other subsidiaries of the Predecessor. As a result of the foregoing and certain other transactions, the Successor is no longer a subsidiary of the Predecessor and now owns all of the former subsidiaries of the Predecessor; • VNG, as borrower, entered into that certain Fourth Amended and Restated Credit Agreement dated as of August 1, 2017 (the “Successor Credit Facility”), by and among VNG as borrower, Citibank, N.A. as administrative agent (the “Administrative Agent”) and Issuing Bank, and the lenders party thereto (the “Lenders”). Pursuant to the Successor Credit Facility, the lenders party thereto agreed to provide VNG with an $850.0 million exit senior secured reserve-based revolving credit facility (the “Revolving Loans”). The initial borrowing base available under the Successor Credit Facility as of the Effective Date was $850.0 million and the aggregate principal amount of Revolving Loans outstanding under the Successor Credit Facility as of the Effective Date was $730.0 million . The Successor Credit Facility also includes an additional $125.0 million senior secured term loan (the “Term Loan”). The holders of claims under the Predecessor Credit Facility received a full recovery, consisting of a cash pay down and their pro rata share of the Successor Credit Facility; The next borrowing base redetermination is scheduled for August of 2018; • The Successor issued approximately $80.7 million aggregate principal amount of new 9.0% Senior Secured Second Lien Notes due 2024 (the “New Notes” or “Senior Notes due 2024”) to certain eligible holders of their outstanding Old Second Lien Notes in full satisfaction of their claim of approximately $80.7 million related to the Old Second Lien Notes held by such holders; • The Predecessor’s Senior Notes were cancelled and the Consenting Senior Noteholders received their pro rata share of 3.38% (subject to dilution) of the Common Stock, in full and final satisfaction of their claims; • The Predecessor completed a rights offering backstopped by certain holders of our Senior Notes (the “Backstop Parties”) which generated $275.0 million of gross proceeds. The rights offering resulted in the issuance of Common Stock, representing approximately 89.92% of outstanding shares of Common Stock, to holders of claims arising under the Senior Notes and to the Backstop Parties; • The Successor entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with certain recipients of shares of its Common Stock distributed on the Effective Date that were parties to the Amended and Restated Backstop Commitment Agreement (including the Backstop Parties and certain of their affiliates and related funds), in accordance with the terms set forth in the Final Plan (collectively, the “Registration Rights Holders”). Pursuant to the Registration Rights Agreement, we agreed to, among other things, file a registration statement with the SEC within 90 days of the Effective Date covering the offer and resale of “Registrable Securities” (as defined in the Registration Rights Agreement); We filed the registration statement on October 30, 2017; • Additional shares of Common Stock, representing eleven percent of outstanding shares of Common Stock on a fully diluted basis, were authorized for issuance under the Vanguard Natural Resources, Inc. 2017 Management Incentive Plan (the “MIP”); • All outstanding Preferred Units (defined below) issued and outstanding immediately prior to the Effective Date were cancelled and the holders thereof received their pro rata shares of (i) 3% of outstanding shares of Common Stock and (ii) Preferred Unit Warrants (as defined below), in full and final satisfaction of their interests; • All common equity of the Predecessor issued and outstanding immediately prior to the Effective Date were cancelled and the holders of the common equity received Common Unit Warrants (as defined below), in full and final satisfaction of their interests; • The Successor entered into a warrant agreement (the “Warrant Agreement”) with American Stock Transfer & Trust Company, LLC, as warrant agent, pursuant to which the Successor issued (i) to electing holders of the Predecessor’s (A) 7.875% Series A Cumulative Redeemable Perpetual Preferred Units (“Series A Preferred Units”), (B) 7.625% Series B Cumulative Redeemable Perpetual Preferred Units (“Series B Preferred Units”), and (C) 7.75% Series C Cumulative Redeemable Perpetual Preferred Units (“Series C Preferred Units” and, together with the Series A Preferred Units and Series B Preferred Units, the “Preferred Units”), three and a half year warrants (the “Preferred Unit Warrants”), which will be exercisable to purchase up to 621,649 shares of the Common Stock as of the Effective Date; and (ii) to electing holders of the Predecessor’s common units representing limited liability company interests, three and a half year warrants (the “Common Unit Warrants” and, together with the Preferred Unit Warrants, the “Warrants”) which will be exercisable to purchase up to 640,876 shares of the Common Stock as of the Effective Date. The expiration date of the Warrants will be February 1, 2021. The strike price for the Preferred Unit Warrants is $44.25 , and the strike price for the Common Unit Warrants is $61.45 ; • By operation of the Final Plan and the Confirmation Order, the terms of the Predecessor’s board of directors expired as of the Effective Date. Our current board of directors (the “Board”) consists of seven members, including our and our Predecessor’s Chief Executive Officer. Our Chief Financial Officer was initially appointed as a director upon emergence and became our Chief Financial Officer as well, following the resignation of our Predecessor’s Chief Financial Officer; • Certain other priority or convenience class claims were paid in full in cash, reinstated or otherwise treated in a manner acceptable to the creditor claimholders; and • On the Effective Date, the Successor reserved for issuance 20,100,000 shares of Common Stock. Each of the foregoing percentages of equity in the Successor were as of August 1, 2017 and are subject to dilution from the exercise of the Warrants described above, the MIP discussed further in Note 10, “Stockholders’ Equity (Members’ Deficit),” and other future issuances of equity interests. See Note 5, “Debt,” and Note 10, “Stockholders’ Equity (Members’ Deficit),” for further information regarding the Predecessor and Successor’s debt and equity instruments. Listing on the OTCQX Market As a result of cancellation of the Predecessor’s units on the Effective Date, the units ceased to trade on the OTC Markets Group Inc.’s Pink marketplace. In September 2017, the Successor’s common stock was approved for trading on the OTCQX market under the symbol “VNRR.” Fresh-Start Accounting Upon the Company’s emergence from chapter 11 bankruptcy, the Company qualified for and applied fresh-start accounting in accordance with the provisions set forth in ASC 852 as (i) the Reorganization Value (as defined below) of the Company’s assets immediately prior to the date of confirmation was less than the post-petition liabilities and allowed claims, and (ii) the holders of the existing voting shares of the Predecessor entity received less than 50% of the voting shares of the emerging entity. Refer to Note 2 , “Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code” for the terms of the Final Plan. Fresh-start accounting requires the Company to present its assets, liabilities, and equity as if it were a new entity upon emergence from bankruptcy. The new entity is referred to as “Successor” or “Successor Company.” However, the Company will continue to present financial information for any periods before application of fresh-start accounting for the Predecessor Company. The Predecessor and Successor companies lack comparability, as required in ASC Topic 205, Presentation of Financial Statements (ASC 205). ASC 205 states financial statements are required to be presented comparably from year to year, with any exceptions to comparability clearly disclosed. Therefore, “black-line” financial statements are presented to distinguish between the Predecessor and Successor companies. Adopting fresh-start accounting results in a new financial reporting entity with no beginning retained earnings or deficit as of the fresh-start reporting date. Upon the application of fresh-start accounting, the Company allocated the fair value of the Successor Company’s total assets (the “Reorganization Value”) to its individual assets based on their estimated fair values. The Reorganization Value is intended to represent the approximate amount a willing buyer would value the Company's assets immediately after the reorganization. Reorganization Value is derived from an estimate of Enterprise Value, or the fair value of the Company’s long-term debt and stockholders’ equity. The estimated Enterprise Value at the Effective Date was $1.425 billion as established in the Plan and approved by the bankruptcy court. The Enterprise Value was derived from an independent valuation using an asset based methodology of proved reserves, undeveloped acreage, and other financial information, considerations and projections, applying a combination of the income, cost and market approaches as of the Convenience Date. The Company’s principal assets are its oil and natural gas properties. Significant inputs used to determine the fair values of properties include estimates of: (i) reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital rate. These inputs require significant judgments and estimates by the Company’s management at the time of the valuation and are the most sensitive and subject to change. For purposes of estimating the fair value of the Company’s proved, probable and possible reserves, an income approach was used which estimated fair value based on the anticipated cash flows associated with the Company’s reserves, risked by reserve category and discounted using a weighted average cost of capital rate of 10.0% . The proved reserve locations were limited to wells expected to be drilled in the Company’s five -year development plan. Weighted average commodity prices utilized in the determination of the fair value of oil and natural gas properties were $67.20 per barrel of oil, $3.69 per million British thermal units (MMBtu) of natural gas and $24.59 per barrel of oil equivalent of natural gas liquids, after adjustment for transportation fees, quality differentials and regional price differentials. Base pricing was derived from an average of forward strip prices and analysts’ estimated prices. In estimating the fair value of the Company's unproved acreage that was not included in the valuation of probable and possible reserves, a market approach was used in which a review of recent transactions involving properties in the same geographical location indicated the fair value of the Company's unproved acreage from a market participant perspective. See further discussion below under “Fresh-Start Adjustments” for the specific assumptions used in the valuation of the Company's various other assets. Although the Company believes the assumptions and estimates used to develop Enterprise Value and Reorganization Value are reasonable and appropriate, different assumptions and estimates could materially impact the analysis and resulting conclusions. The assumptions used in estimating these values are inherently uncertain and require judgment. The following table reconciles the Company’s Enterprise Value to the estimated fair value of the Successor’s common stock as of July 31, 2017 (in thousands): July 31, 2017 Enterprise Value $ 1,425,000 Plus: Cash and cash equivalents 27,610 Less: Debt (943,392 ) Total stockholders' equity 509,217 Less: Fair value of warrants (11,734 ) Less: Fair value of non-controlling interest (2,274 ) Fair Value of Successor common stock $ 495,209 The following table reconciles the Company’s Debt as of July 31, 2017 (in thousands): July 31, 2017 Successor Credit Facility $ 730,000 Successor Term Loan 125,000 Senior Notes due 2024 80,722 Lease Financing Obligation, net of current portion 12,464 Current portion of Lease Financing Obligation 4,647 Total Fair value of debt 952,833 Successor Credit Facility fees and debt issuance costs (9,441 ) Total Debt $ 943,392 The following table reconciles the Company’s Enterprise Value to its Reorganization Value as of July 31, 2017 (in thousands): July 31, 2017 Enterprise Value $ 1,425,000 Plus: Cash and cash equivalents 27,610 Plus: Current liabilities, excluding current portion of Lease Financing Obligation 147,552 Plus: Other noncurrent liabilities 15,589 Plus: Long-term asset retirement obligation 136,769 Reorganization Value of Successor assets $ 1,752,520 Condensed Consolidated Balance Sheet The following illustrates the effects on the Company’s unaudited condensed consolidated balance sheet due to the reorganization and fresh-start accounting adjustments. The explanatory notes following the table below provide further details on the adjustments, including the Company’s assumptions and methods used to determine fair value for its assets and liabilities. As of July 31, 2017 (in thousands) Predecessor Reorganization Adjustments (1) Fresh-Start Adjustments Successor Assets Current assets Cash and cash equivalents $ 68,933 $ (41,323 ) (2) $ — $ 27,610 Trade accounts receivable, net 64,253 (155 ) (3) (8,231 ) (15) 55,867 Derivative assets 3,236 — — 3,236 Restricted cash 102,556 (74,101 ) (4) — 28,455 Other current assets 4,430 (394 ) (5) 416 (16) 4,452 Total current assets 243,408 (115,973 ) (7,815 ) 119,620 Oil and natural gas properties, at cost 4,635,867 — (3,029,173 ) (17) 1,606,694 Accumulated depletion (3,916,889 ) — 3,916,889 (17) — Oil and natural gas properties 718,978 — 887,716 1,606,694 Other assets Goodwill 253,370 — (253,370 ) (18) — Other assets 44,315 — (18,109 ) (19)(20) 26,206 Total assets $ 1,260,071 $ (115,973 ) $ 608,422 $ 1,752,520 Liabilities and equity (deficit) Current liabilities Accounts payable: Trade $ 8,444 $ 9,978 (6) $ — $ 18,422 Accrued liabilities: Lease operating 13,199 — — 13,199 Development capital 8,928 — — 8,928 Interest 8,478 (8,478 ) (7) — — Production and other taxes 23,494 — — 23,494 Other 20,933 12,297 (8) — 33,230 Derivative liabilities 12,987 — — 12,987 Oil and natural gas revenue payable 36,087 — (7,808 ) (15) 28,279 Long-term debt classified as current 1,300,971 (1,300,971 ) (9) — — Other 14,246 (382 ) (10) (203 ) (21) 13,661 Total current liabilities 1,447,767 (1,287,556 ) (8,011 ) 152,200 Long-term debt, net of current portion 12,647 926,281 (11) (183 ) (22) 938,745 Derivative liabilities 15,143 — — 15,143 Asset retirement obligations, net of current portion 260,089 — (123,320 ) (23) 136,769 Other long-term liabilities 37,683 — (37,237 ) (24) 446 Total liabilities not subject to compromise 1,773,329 (361,275 ) (168,751 ) 1,243,303 Liabilities subject to compromise 479,911 (479,911 ) (12) — — Total Liabilities 2,253,240 (841,186 ) (168,751 ) 1,243,303 As of July 31, 2017 Predecessor Reorganization Adjustments (1) Fresh-Start Adjustments Successor Stockholders’ equity/Members’ (deficit) (Note 9) Preferred units (Predecessor) 335,444 (335,444 ) (13) — — Common units (Predecessor) (1,342,849 ) 763,217 (13) 579,632 (25) — Class B units (Predecessor) 7,615 (7,615 ) (13) — — Common stock (Successor) — 20 (14) — 20 Additional paid-in capital (Successor) — 305,035 (14) 201,888 (25) 506,923 Total VNR stockholders' equity/ members’ (deficit) (999,790 ) 725,213 781,520 506,943 Non-controlling interest in subsidiary 6,621 — (4,347 ) (26) 2,274 Total stockholders' equity/members’ (deficit) (993,169 ) 725,213 777,173 509,217 Total liabilities and equity (deficit) $ 1,260,071 $ (115,973 ) $ 608,422 $ 1,752,520 Reorganization Adjustments: 1) Represent amounts recorded as of the Convenience Date for the implementation of the Final Plan, including, among other items, settlement of the Predecessor’s liabilities subject to compromise, repayment of certain of the Predecessor’s debt, cancellation of the Predecessor’s equity, issuances of the Successor’s common stock and equity warrants, proceeds received from the Successor’s rights offering and issuance of the Successor’s debt. 2) Changes in cash and cash equivalents included the following (in thousands): Proceeds from equity investment from holders of Old Second Lien Notes $ 19,250 Proceeds from rights offering 255,750 Borrowings under the Successor's Term Loan 125,000 Removal of restriction on cash balance 102,556 Payment of holders of claims under the Predecessor Credit Facility (500,266 ) Payment of interest and fees under the Predecessor Credit Facility (3,390 ) Payment of Successor Credit Facility fees (9,300 ) Payment of professional fees (2,468 ) Funding of the general unsecured claims cash distribution pools (6,750 ) Funding of the professional fees escrow account (21,705 ) Changes in cash and cash equivalents $ (41,323 ) 3) Reflects the write-off of lease incentive costs due to the rejection of the related lease contract. 4) Net change to restricted cash includes the following: Removal of restriction on cash balance $ (102,556 ) Funding of the general unsecured claims cash distribution pools 6,750 Funding of the professional fees escrow account 21,705 $ (74,101 ) 5) Primarily reflects the write-off of the Predecessor’s equity offering costs. 6) Reflects reinstatement of payables for the general unsecured claims and trade claims cash distribution pool. 7) Reflects payment of accrued interest related to Predecessor Credit Facility and Predecessor debtor-in-possession credit facility of $3.4 million and the capitalization of approximately $5.1 million accrued interest on the Old Second Lien Notes into the principal amount of the Senior Notes due 2024. 8) Net increase in other accrued expenses reflect (in thousands): Recognition of payables for the professional fees escrow account $ 12,627 Write-off of accrued non cash compensation related to Phantom Units granted (330 ) Net increase in accounts payable and accrued expenses $ 12,297 9) Reflects the repayment of outstanding borrowings under the Predecessor Credit Facility of approximately $500.3 million and the conversion of the remaining outstanding debt to Successor Credit Facility and the Senior Notes due 2024 to Long-Term Debt, net of the write-off of deferred financing fees. 10) Reflects the write-off of deferred rent due to the rejection of the related lease contract. 11) Reflects $855.0 million of outstanding borrowings under the Successor Credit Facility, which includes a $730.0 million revolving loan and a $125.0 million Term Loan. The adjustment also reflects the issuance of Senior Notes due 2024 of $80.7 million . The amounts are presented net of capitalized deferred financing fees related to each debt. 12) Settlement of Liabilities subject to compromise and the resulting net gain were determined as follows (in thousands): Accounts payable and accrued expenses $ 36,224 Accrued interest payable 10,737 Debt 432,950 Total liabilities subject to compromise 479,911 Reinstatement of liability for the general unsecured claims (4,978 ) Reinstatement of liability for settlement of an unsecured claim (5,000 ) Issuance of common shares to holders of general unsecured claims (1,089 ) Issuance of common shares to holders of Senior Notes claims (16,715 ) Gain on settlement of liabilities subject to compromise $ 452,129 13) Net change in Predecessor common units reflects (in thousands): Recognition of gain on settlement of liabilities subject to compromise $ 452,129 Cancellation of Predecessor Preferred units 335,444 Cancellation of Predecessor Class B units 7,615 Write-off of deferred financing costs and debt discounts (4,917 ) Recognition of professional and success fees (14,968 ) Fair value of warrants issued to Predecessor unitholders (11,734 ) Fair value of shares issued to Predecessor unitholders (517 ) Terminated contracts 165 Net change in Predecessor Common units $ 763,217 14) Net change in Successor equity reflects net increase in capital accounts as follows (in thousands): Issuance of common stock to general unsecured creditors $ 1,089 Issuance of common stock to holders of Senior Notes claims 16,715 Issuance of common stock to Predecessor preferred unitholders 517 Issuance of common stock for the second lien equity investment 19,250 Issuance of common stock pursuant to the rights offering 255,750 Issuance of warrants 11,734 Change in additional paid-in capital 305,055 Par value of common stock (20 ) Net increase in capital accounts $ 305,035 See Note 10 , “Stockholders’ Equity (Members’ Deficit)” for additional information on the issuances of the Successor’s equity. Fresh-Start Adjustments: 15) Reflects a change in accounting policy from the entitlements method for natural gas production imbalances in accordance with the adoption of ASC 606. 16) Reflects fair value adjustment for oil inventory. 17) Reflects the adjustments to oil and natural gas properties, based on the methodology discussed above, and the elimination of accumulated depletion. The following table summarizes the components of oil and natural gas properties as of the Convenience Date (in thousands): Successor Predecessor Fair Value Historical Book Value Proved properties $ 1,511,083 $ 4,635,867 Unproved properties 95,611 — 1,606,694 4,635,867 Less: accumulated depletion and amortization — (3,916,889 ) $ 1,606,694 $ 718,978 18) Reflects the write-off of Predecessor goodwill. 19) Reflects a decrease of other property and equipment and the elimination of accumulated depreciation. The following table summarizes the components of other property and equipment as of the Convenience Date (in thousands): Successor Predecessor Fair Value Historical Book Value Gas gathering assets $ 4,196 $ 19,942 Office equipment and furniture 574 5,847 Buildings and leasehold improvements 57 836 Vehicles 1,311 1,549 6,138 28,174 Less: accumulated depreciation — (13,657 ) $ 6,138 $ 14,517 In estimating the fair value of other property and equipment, the Company used a combination of cost and market approaches. A cost approach was used to value the Company’s other operating assets, based on current replacement costs of the assets less depreciation based on the estimated economic useful lives of the assets and age of the assets. A market approach was used to value the Company’s vehicles, using recent transactions of similar assets to determine the fair value from a market participant perspective. 20) Reflects an adjustment for the intangible asset related to the Company’s nickel gas contract of $5.6 million and the write-off of deferred tax asset of $4.1 million . 21) Reflects the adjustment of current portion of financing obligation to fair value and write-off of deferred rent. 22) Reflects the adjustment of long-term portion of financing obligation to fair value. 23) Primarily reflects the fair value adjustment of asset retirement obligations (“ARO”) to fair value of approximately $145.2 million , of which $136.8 million is reflected as long-term ARO and $8.4 million of current ARO shown in other current liabilities. The fair value of asset retirement obligations was estimated using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation include estimates of: (i) plug and abandon costs per well based on existing regulatory requirements; (ii) remaining life per well; (iii) future inflation factors; and (iv) a credit-adjusted risk-free interest rate. Refer to Note 8, “ Asset Retirement Obligations” for further details of the Company's asset retirement obligations. 24) Reflects the write-off of deferred tax liabilities. 25) Reflects the cumulative impact of the fresh-start accounting adjustments discussed above and the elimination of Common units (Predecessor). 26) Reflects the fair value adjustment to the Potato Hills gas gathering assets on the non-controlling interest. Reorganization Items Reorganization items represent (i) expenses or income incurred subsequent to the Petition Date as a direct result of the Final Plan, (ii) gains or losses from liabilities settled, and (iii) fresh-start accounting adjustments and are recorded in “Reorganization items” in the Company’s unaudited consolidated statements of operations. The following table summarizes the net reorganization items (in thousands): Predecessor Seven Months Ended July 31, 2017 Gain on settlement of Liabilities subject to compromise $ 452,129 Fresh-start accounting adjustments 781,520 Issuance of common shares and warrants (214,140 ) Legal and other professional fees (58,482 ) Recognition of additional unsecured claims (31,346 ) Write-off of deferred financing costs and debt discounts (21,361 ) Terminated contracts 165 Reorganization items $ 908,485 Reorganization costs incurred subsequent to the Emergence Date of $0.9 million are recorded in the selling, general and administrative expenses line item in the Company’s unaudited consolidated statements of operations for the two months ended September 30, 2017. |
Impact of ASC 606 Adoption
Impact of ASC 606 Adoption | 9 Months Ended |
Sep. 30, 2017 | |
Revenue from Contract with Customer [Abstract] | |
Impact of ASC 606 Adoption | Impact of ASC 606 Adoption In conjunction with the application of fresh-start accounting, we adopted ASC 606 - Revenue from Contracts with Customers (“ASC 606”). We adopted using the modified retrospective method, which fresh-start accounting allows us to apply the new standard to all new contracts entered into after August 1, 2017 and all existing contracts for which all (or substantially all) of the revenue has not been recognized under legacy revenue guidance as of July 31, 2017. ASC 606 supersedes previous revenue recognition requirements in ASC 605 and includes a five-step revenue recognition model to depict the transfer of goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The impact of adoption on our current period results is as follows (in thousands): Successor Two Months Ended September 30, 2017 Under ASC 606 Under ASC 605 Increase/(Decrease) Revenues : Oil sales $ 27,303 $ 27,303 $ — Natural gas sales 39,032 32,983 6,049 NGLs sales 13,465 11,470 1,995 Oil, natural gas and NGLs sales 79,800 71,756 8,044 Net losses on commodity derivative contracts (32,352 ) (32,352 ) — Total revenues 47,448 39,404 8,044 Costs and expenses : Transportation, gathering, processing, and compression 8,044 — 8,044 Net loss $ (37,236 ) $ (37,236 ) $ — Changes to sales of oil, natural gas and NGLs, and transportation, gathering, processing, and compression expense are due to the conclusion that the Company represents the principal and the ultimate third party is our customer in certain natural gas processing and marketing agreements with certain midstream entities in accordance with the control model in ASC 606. This is a change from previous conclusions reached for these agreements utilizing the principal versus agent indicators under ASC 605 where we acted as the agent and the mid stream processing entity was our customer. As a result, we modified our presentation of revenues and expenses for these agreements. Revenues related to these agreements are now presented on a gross basis for amounts expected to be received from third-party customers through the marketing process. Transportation, gathering, processing and compression expenses related to these agreements, incurred prior to the transfer of control to the customer at the tailgate of the natural gas processing facilities, are now presented as Transportation, gathering, processing, and compression expense. Revenue from Contracts with Customers Sales of oil, natural gas and NGLs are recognized at the point control of the product is transferred to the customer and collectability is reasonably assured. Virtually all of our contracts’ pricing provisions are tied to a market index, with certain adjustments based on, among other factors, whether a well delivers to a gathering or transmission line, quality of the oil or natural gas, and prevailing supply and demand conditions. As a result, the price of the oil, natural gas, and NGLs fluctuates to remain competitive with other available oil, natural gas, and NGLs supplies. Natural gas and NGLs Sales Under our natural gas processing contracts, we deliver natural gas to a midstream processing entity at the wellhead or the inlet of the midstream processing entity’s system. The midstream processing entity gathers and processes the natural gas and remits proceeds to us for the resulting sales of NGLs and residue gas. In these scenarios, the Company evaluates whether we are the principal or the agent in the transaction. For those contracts where we have concluded we are the principal and the ultimate third party is our customer, we recognize revenue on a gross basis, with transportation, gathering, processing and compression fees presented as an expense in our Statement of Operations. Alternatively, for those contracts where we have concluded the Company is the agent and the midstream processing entity is our customer, we recognize natural gas and NGLs revenues based on the net amount of the proceeds received from the midstream processing. In certain natural gas processing agreements, we may elect to take our residue gas and/or NGLs in-kind at the tailgate of the midstream entity’s processing plant and subsequently market the product. Through the marketing process, we deliver product to the ultimate third-party purchaser at a contractually agreed-upon delivery point and receive a specified index price from the purchaser. In this scenario, we recognize revenue when control transfers to the purchaser at the delivery point based on the index price received from the purchaser. The gathering, processing and compression fees attributable to the gas processing contract, as well as any transportation fees incurred to deliver the product to the purchaser, are presented as Transportation, gathering, processing and compression expense in our consolidated statements of operations. Oil sales Our oil sales contracts are generally structured in one of the following ways: • We sell oil production at the wellhead and collect an agreed-upon index price, net of pricing differentials. In this scenario, we recognize revenue when control transfers to the purchaser at the wellhead at the net price received. • We deliver oil to the purchaser at a contractually agreed-upon delivery point at which the purchaser takes custody, title, and risk of loss of the product. Under this arrangement, we pay a third party to transport the product and receive a specified index price from the purchaser with no deduction. In this scenario, we recognize revenue when control transfers to the purchaser at the delivery point based on the price received from the purchaser. The third-party costs are recorded as Transportation, gathering, processing and compression expense in our consolidated statements of operations. Production imbalances Previously, the Company elected to utilize the entitlements method to account for natural gas production imbalances which is no longer applicable. In conjunction with the adoption of ASC 606, for the period from August 1, 2017 through September 30, 2017, there was no material impact to the financial statements due to this change in accounting for our production imbalances. Transaction price allocated to remaining performance obligations A significant number of our product sales are short-term in nature with a contract term of one year or less. For those contracts, we have utilized the practical expedient in ASC 606-10-50-14 exempting the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. For our product sales that have a contract term greater than one year, we have utilized the practical expedient in ASC 606-10-50-14(a) which states the Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these sales contracts, each unit of product generally represents a separate performance obligation; therefore future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. Contract balances Under our product sales contracts, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our product sales contracts do not give rise to contract assets or liabilities under ASC 606. Prior-period performance obligations We record revenue in the month production is delivered to the purchaser. However, settlement statements for certain natural gas and NGL sales may not be received for 30 to 90 days after the date production is delivered, and as a result, we are required to estimate the amount of production delivered to the purchaser and the price that will be received for the sale of the product. We record the differences between our estimates and the actual amounts received for product sales in the month that payment is received from the purchaser. We have existing internal controls for our revenue estimation process and related accruals, and any identified differences between our revenue estimates and actual revenue received historically have not been significant. For the period from August 1, 2017 through September 30, 2017, revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Our financing arrangements consisted of the following as of the date indicated (in thousands): Successor Predecessor Description Interest Rate Maturity Date September 30, 2017 December 31, 2016 (in thousands) Successor Credit Facility Variable (1) February 1, 2021 $ 730,000 $ — Successor term loan Variable (2) May 1, 2021 125,000 — Senior Notes due 2024 9.0% February 15, 2024 80,722 — Predecessor Credit Facility Variable (3) April 16, 2018 — 1,269,000 Senior Notes due 2019 8.375% (4) June 1, 2019 — 51,120 Senior Notes due 2020 7.875% (5) April 1, 2020 — 381,830 Senior Notes due 2023 7.00% February 15, 2023 — 75,634 Lease Financing Obligation 4.16% August 10, 2020 (6) 16,354 20,167 Unamortized discount on Senior Notes — (13,167 ) Unamortized deferred financing costs (9,164 ) (11,072 ) Total debt $ 942,912 $ 1,773,512 Less: Long-term debt classified as current — (1,753,345 ) Current portion of Lease Financing Obligation (4,688 ) (4,692 ) Total long-term debt $ 938,224 $ 15,475 (1) Variable interest rate of 4.74% at September 30, 2017 . (2) Variable interest rate of 8.74% at September 30, 2017 . (3) Variable interest rate of 3.11% at December 31, 2016 . (4) Effective interest rate of 21.45% at December 31, 2016 . (5) Effective interest rate of 8.0% at December 31, 2016 . (6) The Lease Financing Obligations expire on August 10, 2020, except for certain obligations which expire on July 10, 2021. Successor Credit Facility On the Effective Date, VNG, as borrower, has entered into the Successor Credit Facility, by and among VNG as borrower, Citibank, N.A. as administrative agent (the “Administrative Agent”) and Issuing Bank, and the lenders party thereto (the “Lenders”). Pursuant to the Successor Credit Facility, the lenders party thereto agreed to provide VNG with an $850.0 million exit senior secured reserve-based revolving credit facility (the “Revolving Loans”). The initial borrowing base available under the Successor Credit Facility as of the Effective Date is $850.0 million and the aggregate principal amount of Revolving Loans outstanding under the Successor Credit Facility as of the Effective Date is $730.0 million . The Successor Credit Facility also includes an additional $125.0 million senior secured term loan (the “Term Loan”). The next borrowing base redetermination is scheduled for August of 2018. At September 30, 2017 , there were $730.0 million of outstanding borrowings and $119.9 million of borrowing capacity under the Successor Credit Facility, after reflecting a $0.2 million reduction in availability for letters of credit (discussed below). The maturity date of the Successor Credit Facility is February 1, 2021 with respect to the Revolving Loans and May 1, 2021 with respect to the Term Loan. Until the maturity date for the Term Loan, the Term Loan shall bear an interest rate equal to (i) the alternative base rate plus an applicable margin of 6.50% for an Alternate Base Rate loan or (ii) adjusted LIBOR plus an applicable margin of 7.50% for a Eurodollar loan. Until the maturity date for the Revolving Loans, the Revolving Loans shall bear interest at a rate per annum equal to (i) the alternative base rate plus an applicable margin of 1.75% to 2.75% , based on the borrowing base utilization percentage under the Successor Credit Facility or (ii) adjusted LIBOR plus an applicable margin of 2.75% to 3.75% , based on the borrowing base utilization percentage under the Successor Credit Facility. Unused commitments under the Successor Credit Facility will accrue a commitment fee of 0.5% , payable quarterly in arrears. VNG may elect, at its option, to prepay any borrowing outstanding under the Revolving Loans without premium or penalty (except with respect to any break funding payments which may be payable pursuant to the terms of the Successor Credit Facility). VNG may be required to make mandatory prepayments of the Revolving Loans in connection with certain borrowing base deficiencies or asset divestitures. VNG is required to repay the Term Loans on the last day of each March, June, September and December (commencing with the first full fiscal quarter ended after the Effective Date), in each case, in an amount equal to 0.25% of the original principal amount of such Term Loans and, on the Maturity Date, the remainder of the principal amount of the Term Loans outstanding on such date, together in each case with accrued and unpaid interest on the principal amount to be paid but excluding the date of such payment. The table below shows the amounts of required payments under the Term Loan for each year as of September 30, 2017 (in thousands): Year 2018 $ 1,250 2019 1,250 2020 1,250 2021 through Maturity date 121,250 Additionally, if (i) VNG has outstanding borrowings, undrawn letters of credit and reimbursement obligations in respect of letters of credit in excess of the aggregate revolving commitments or (ii) unrestricted cash and cash equivalents of VNG and the Guarantors (as defined below) exceeds $35.0 million as of the close of business on the most recently ended business day, VNG is also required to make mandatory prepayments, subject to limited exceptions. The obligations under the Successor Credit Facility are guaranteed by the Successor and all of VNG’s subsidiaries (the “Guarantors”), subject to limited exceptions, and secured on a first-priority basis by substantially all of VNG’s and the Guarantors’ assets, including, without limitation, liens on at least 95% of the total value of VNG’s and the Guarantors’ oil and gas properties, and pledges of stock of all other direct and indirect subsidiaries of VNG, subject to certain limited exceptions. The Successor Credit Facility contains certain customary representations and warranties, including, without limitation: organization; powers; authority; enforceability; approvals; no conflicts; financial condition; no material adverse change; litigation; environmental matters; compliance with laws and agreements; no defaults; no borrowing base deficiency; Investment Company Act; taxes; ERISA; disclosure; no material misstatements; insurance; restrictions on liens; locations of businesses and offices; properties and titles; maintenance of properties; gas imbalances; prepayments; marketing of production; swap agreements; use of proceeds; solvency; money laundering; anti-corruption laws and sanctions. The Successor Credit Facility also contains certain affirmative and negative covenants, including, without limitation: delivery of financial statements; notices of material events; existence and conduct of business; payment of obligations; performance of obligations under the Successor Credit Facility and the other loan documents; operation and maintenance of properties; maintenance of insurance; maintenance of books and records; compliance with laws and regulations; compliance with environmental laws and regulations; delivery of reserve reports; delivery of title information; requirement to grant additional collateral; compliance with ERISA; maintenance of commodity price risk management policy; requirement to maintain commodity swaps; maintenance of treasury management; restrictions on indebtedness; liens; dividends and distributions; repayment of permitted unsecured debt; amendments to certain agreements; investments; change in the nature of business; leases (including oil and gas property leases); sale or discount of receivables; mergers; sale of properties; termination of swap agreements; transactions with affiliates; negative pledges; dividend restrictions; marketing activities; gas imbalances; take-or-pay or other prepayments; swap agreements and transactions, and passive holding company status. The Successor Credit Facility also contains certain financial covenants, including the maintenance of (i) the ratio of consolidated first lien debt of VNG and the Guarantors as of the date of determination to EBITDA for the most recently ended four consecutive fiscal quarter period for which financial statements are available of (a) 4.75 to 1.00 as of the last of any fiscal quarter ending from July 1, 2018 through December 31, 2018, (b) 4.50 to 1.00 as of the last day of any fiscal quarter ending from January 1, 2019 through December 31, 2019, (c) 4.25 to 1.00 as of the last day of any fiscal quarter ending from January 1, 2020 through September 30, 2020, and (d) 4.00 to 1.00 as of the last day of any fiscal quarter ending thereafter; (ii) an asset coverage ratio calculated as PV-9 of proved reserves, including impact of hedges and strip prices to first lien debt, of not less than 1.25 to 1.00 as tested on each January 1 and July 1 for the period from August 1, 2017 until August 1, 2018; and (iii) a current ratio, determined as of the last day of each fiscal quarter for the four fiscal-quarter period then ending, commencing with the fiscal quarter ending December 31, 2017, of not less than 1.00 to 1.00. The Successor Credit Facility also contains certain events of default, including, without limitation: non-payment; breaches of representations and warranties; non-compliance with covenants or other agreements; cross-default to material indebtedness; judgments; change of control; and voluntary and involuntary bankruptcy. New Second Lien Notes Indenture On August 1, 2017, the Company issued approximately $80.7 million aggregate principal amount of new 9.0% Senior Secured Second Lien Notes due 2024 (the “Senior Notes due 2024”) to certain eligible holders of their outstanding Old Second Lien Notes issued by the Predecessor and the Successor (the “Existing Notes”) in full satisfaction of their claim of approximately $80.7 million related to the Existing Notes held by such holders. The Senior Notes due 2024 were issued in accordance with the exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act. The New Notes are governed by an Amended and Restated Indenture, dated as of August 1, 2017 (as amended, the “Amended and Restated Indenture”), by and among the Company, certain subsidiary guarantors of the Company (the “Guarantors”) and Delaware Trust Company, as Trustee (in such capacity, the “Trustee”) and as Collateral Trustee (in such capacity, the “Collateral Trustee”), which contains affirmative and negative covenants that, among other things, limit the ability of the Company and the Guarantors to (i) incur, assume or guarantee additional indebtedness or issue preferred stock; (ii) create liens to secure indebtedness; (iii) make distributions on, purchase or redeem the Company’s common stock or purchase or redeem subordinated indebtedness; (iv) make investments; (v) restrict dividends, loans or other asset transfers from the Company’s restricted subsidiaries; (vi) consolidate with or merge with or into, or sell substantially all of its properties to, another person; (vii) sell or otherwise dispose of assets, including equity interests in subsidiaries; (viii) enter into transactions with affiliates; or (ix) create unrestricted subsidiaries. These covenants are subject to important exceptions and qualifications. If the New Notes achieve an investment grade rating from each of Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., no default or event of default under the Amended and Restated Indenture exists, and the Company delivers to the Trustee an officers’ certificate certifying such events, many of the foregoing covenants will terminate. The Amended and Restated Indenture also contains customary events of default, including (i) default for thirty (30) days in the payment when due of interest on the New Notes; (ii) default in payment when due of principal of or premium, if any, on the New Notes at maturity, upon redemption or otherwise; and (iii) certain events of bankruptcy or insolvency with respect to the Company or any of restricted subsidiary of the Company that is a significant subsidiary or any group of restricted subsidiaries of the Company that taken together would constitute s significant subsidiary. If an event of default occurs and is continuing, the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding New Notes may declare all the New Notes to be due and payable immediately. If an event of default arises from certain events of bankruptcy or insolvency, with respect to the Company, any restricted subsidiary of the Company that is a significant subsidiary or any group of restricted subsidiaries of the Company that, taken together, would constitute a significant subsidiary, all outstanding New Notes will become due and payable immediately without further action or notice. Interest is payable on the New Notes on February 15 and August 15 of each year, beginning on February 15, 2018. The New Notes will mature on February 15, 2024. At any time prior to February 15, 2020, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of the New Notes issued under the Amended and Restated Indenture, with an amount of cash not greater than the net cash proceeds of an equity offering, at a redemption price equal to 109% of the principal amount of the New Notes, together with accrued and unpaid interest, if any, to the redemption date; provided that (i) at least 65% of the aggregate principal amount of the New Notes originally issued under the Amended and Restated Indenture remain outstanding after such redemption, and (ii) the redemption occurs within one hundred eighty (180) days of the equity offering. On or after February 15, 2020, the New Notes will be redeemable, in whole or in part, at redemption prices equal to the principal amount multiplied by the percentage set forth below, plus accrued and unpaid interest: Year Percentage 2020 106.75 % 2021 104.50 % 2022 102.25 % 2023 and thereafter 100.00 % In addition, at any time prior to February 15, 2020, the Company may on any one or more occasions redeem all or a part of the New Notes at a redemption price equal to 100% of the principal amount thereof, plus the Applicable Premium (as defined in the Amended and Restated Indenture) as of, and accrued and unpaid interest, if any, to the date of redemption. Amended and Restated Intercreditor Agreement On August 1, 2017, Citibank, N.A., as priority lien agent, and the Collateral Trustee entered into an Amended and Restated Intercreditor Agreement, which was acknowledged and agreed to by the Company and the Guarantors (the “Amended and Restated Intercreditor Agreement”), to govern the relationship of holders of the New Notes, the Lenders under the Company’s Successor Credit Facility and holders of other priority lien, second lien or junior lien obligations that the Company may issue in the future, with respect to the Collateral (as defined below) and certain other matters. Under the Intercreditor Agreement, the Collateral Trustee may enforce or exercise any rights or remedies with respect to any Collateral, subject to a 180 day standstill period. However, the Collateral Trustee may not commence, or join with another party in commencing, any enforcement action with respect to any second-priority lien unless the first-priority liens have been discharged. Amended and Restated Collateral Trust Agreement On August 1, 2017, the Company, the Guarantors, the Trustee and the Collateral Trustee entered into an Amended and Restated Collateral Trust Agreement (the “Amended and Restated Collateral Trust Agreement”) pursuant to which the Collateral Trustee will receive, hold, administer, maintain, enforce and distribute all of its liens upon the Collateral for the benefit of the current and future holders of the New Notes and other obligations secured on an equal and ratable basis with the New Notes, if any. Letters of Credit At September 30, 2017 , we had unused irrevocable standby letters of credit of approximately $0.2 million . The letters are being maintained as security related to the issuance of oil and natural gas well permits to recover potential costs of repairs, modification, or construction to remedy damages to properties caused by the operator. Borrowing availability for the letters of credit was provided under our Successor Credit Facility. The fair value of these letters of credit approximates contract values based on the nature of the fee arrangements with marketing counterparties. Predecessor’s Credit Facility, Old Second Lien Notes and Senior Notes On the Effective Date, pursuant to the terms of the Final Plan, all outstanding obligations under the Predecessor’s Credit Facility, Old Second Lien Notes and unsecured senior notes were canceled. See Note 2 , “Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code” for additional information. Predecessor Covenant Violations The Company’s filing of the Bankruptcy Petitions described in Note 2 constituted an event of default that accelerated the obligations under the Predecessor’s Credit Facility, Old Second Lien Notes and Senior Notes. For the period from February 1, 2017 to the Effective Date, contractual interest, which was not recorded, on the Senior Notes was approximately $17.2 million . Under the Bankruptcy Code, the creditors under these debt agreements were stayed from taking any action against the Company as a result of an event of default. Lease Financing Obligations On October 24, 2014, as part of our acquisition of certain natural gas, oil and NGLs assets in the Piceance Basin, we entered into an assignment and assumption agreement with Banc of America Leasing & Capital, LLC as the lead bank, whereby we acquired compressors and related facilities and assumed the related financing obligations (the “Lease Financing Obligations”). Certain rights, title, interest and obligations under the Lease Financing Obligations have been assigned to several lenders and are covered by separate assignment agreements, which expire on August 10, 2020 and July 10, 2021. We have the option to purchase the equipment at the end of the lease term for the current fair market value. The Lease Financing Obligations also contain an early buyout option whereby the Company may purchase the equipment for $16.0 million on February 10, 2019. The lease payments related to the equipment are recognized as principal and interest expense based on a weighted average implicit interest rate of 4.16% . During the course of the Chapter 11 Cases, the Company assumed the Lease Financing Obligations. |
Price and Interest Rate Risk Ma
Price and Interest Rate Risk Management Activities | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Price and Interest Rate Risk Management Activities | Price and Interest Rate Risk Management Activities In June 2017, we entered into derivative contracts primarily with counterparties that are also lenders under our Successor Credit Facility to hedge price risk associated with a portion of our oil, natural gas and NGLs production. While it is never management’s intention to hold or issue derivative instruments for speculative trading purposes, conditions sometimes arise where actual production is less than estimated which has, and could, result in over hedged volumes. Pricing for these derivative contracts is based on certain market indexes and prices at our primary sales points. We have also historically entered into fixed LIBOR interest rate swap agreements with certain counterparties that are lenders under our Successor Credit Facility, which require exchanges of cash flows that serve to synthetically convert a portion of our variable interest rate obligations to fixed interest rates. The Company did not have any interest rate swaps in place at September 30, 2017 . The following tables summarize oil, natural gas, and NGLs commodity derivative contracts in place at September 30, 2017 . Fixed-Price Swaps (NYMEX) Gas Oil NGLs Contract Period MMBtu Weighted Average Fixed Price Bbls Weighted Average WTI Price Gallons Weighted Average October 1, 2017 – December 31, 2017 18,400,000 $ 3.11 818,900 $ 45.20 15,842,400 $ 0.63 January 1, 2018 – December 31, 2018 70,242,000 $ 3.00 3,059,200 $ 46.47 56,721,000 $ 0.60 January 1, 2019 - December 31, 2019 52,539,000 $ 2.79 1,858,200 $ 48.50 — $ — January 1, 2020 - December 31, 2020 47,227,500 $ 2.75 1,393,800 $ 49.53 — $ — Collars Gas Oil Contract Period MMBtu Floor Price ($/MMBtu) Ceiling Price ($/MMBtu) Bbls Floor Price ($/Bbl) Ceiling Price ($/Bbl) January 1, 2019 - December 31, 2019 4,125,000 $ 2.60 $ 3.00 575,730 $ 43.81 $ 54.04 January 1, 2020 - December 31, 2020 5,490,000 $ 2.60 $ 3.00 659,340 $ 44.17 $ 55.00 Balance Sheet Presentation Our commodity derivatives and interest rate swap derivatives are presented on a net basis in “derivative assets” and “derivative liabilities” on the Consolidated Balance Sheets as governed by the International Swaps and Derivatives Association Master Agreement with each of the counterparties. The following table summarizes the gross fair values of our derivative instruments, presenting the impact of offsetting the derivative assets and liabilities on our Consolidated Balance Sheets for the periods indicated (in thousands): Successor September 30, 2017 Offsetting Derivative Assets: Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets Commodity price derivative contracts $ 3,650 $ (3,396 ) $ 254 Total derivative instruments $ 3,650 $ (3,396 ) $ 254 Offsetting Derivative Liabilities: Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets Commodity price derivative contracts $ (58,572 ) $ 3,397 $ (55,175 ) Total derivative instruments $ (58,572 ) $ 3,397 $ (55,175 ) Predecessor December 31, 2016 Derivative Liabilities: Amount Presented in the Consolidated Balance Sheets Interest rate derivative contracts $ (125 ) Total derivative instruments $ (125 ) By using derivative instruments to economically hedge exposures to changes in commodity prices and interest rates, we expose ourselves to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk. All of our counterparties were participants in our Successor Credit Facility (see Note 5 , “Debt” for further discussion), which is secured by our oil and natural gas properties; therefore, we were not required to post any collateral. The maximum amount of loss due to credit risk that we would incur if our counterparties failed completely to perform according to the terms of the contracts, based on the gross fair value of financial instruments, was approximately $3.7 million at September 30, 2017 . We minimize the credit risk related to derivative instruments by: (i) entering into derivative instruments with counterparties that are also lenders in our Successor Credit Facility and (ii) monitoring the creditworthiness of our counterparties on an ongoing basis Changes in fair value of our commodity and interest rate derivatives for the periods indicated are as follows (in thousands): Successor Predecessor Two Months Ended September 30, 2017 Seven Months Ended July 31, 2017 December 31, 2016 Derivative asset (liability) at beginning of period, net $ (24,895 ) $ (125 ) $ 316,691 Purchases Net premiums and fees received for derivative contracts — — (2,444 ) Net losses on commodity and interest rate derivative contracts (32,352 ) (24,858 ) (46,939 ) Settlements Cash settlements paid (received) on matured commodity derivative contracts 2,326 (7 ) (226,876 ) Cash settlements paid on matured interest rate derivative contracts — 95 13,398 Termination of derivative contracts — — (53,955 ) Derivative liability at end of period, net $ (54,921 ) $ (24,895 ) $ (125 ) |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We estimate the fair values of financial and non-financial assets and liabilities under ASC Topic 820 “Fair Value Measurements and Disclosures” (“ASC Topic 820”). ASC Topic 820 provides a framework for consistent measurement of fair value for those assets and liabilities already measured at fair value under other accounting pronouncements. Certain specific fair value measurements, such as those related to share-based compensation, are not included in the scope of ASC Topic 820. Primarily, ASC Topic 820 is applicable to assets and liabilities related to financial instruments, to some long-term investments and liabilities, to initial valuations of assets and liabilities acquired in a business combination, recognition of asset retirement obligations and to long-lived assets written down to fair value when they are impaired. It does not apply to oil and natural gas properties accounted for under the full cost method, which are subject to impairment based on SEC rules. ASC Topic 820 applies to assets and liabilities carried at fair value on the Consolidated Balance Sheets, as well as to supplemental information about the fair values of financial instruments not carried at fair value. We have applied the provisions of ASC Topic 820 to assets and liabilities measured at fair value on a recurring basis, which includes our commodity and interest rate derivatives contracts, and on a nonrecurring basis, which includes acquisitions of oil and natural gas properties and other intangible assets. ASC Topic 820 provides a definition of fair value and a framework for measuring fair value, as well as expanding disclosures regarding fair value measurements. The framework requires fair value measurement techniques to include all significant assumptions that would be made by willing participants in a market transaction. ASC Topic 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820 provides a hierarchy of fair value measurements, based on the inputs to the fair value estimation process. It requires disclosure of fair values classified according to the “levels” described below. The hierarchy is based on the reliability of the inputs used in estimating fair value and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The framework for fair value measurement assumes that transparent “observable” (Level 1) inputs generally provide the most reliable evidence of fair value and should be used to measure fair value whenever available. The classification of a fair value measurement is determined based on the lowest level (with Level 3 as the lowest) of significant input to the fair value estimation process. The standard describes three levels of inputs that may be used to measure fair value: Level 1 Quoted prices for identical instruments in active markets. Level 2 Quoted market prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Level 3 assets and liabilities generally include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation or for which there is a lack of transparency as to the inputs used. As required by ASC Topic 820, financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. As of the Effective Date, the Company adopted fresh-start accounting, which resulted in the Company becoming a new entity for financial reporting purposes. Upon the adoption of fresh-start accounting, the Company's assets and liabilities were recorded at their fair values as of the Convenience Date of July 31, 2017. See Note 3, “Fresh-start Accounting,” for a detailed discussion of the fair value approaches used by the Company. The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: Financing arrangements. The carrying amounts of our bank borrowings outstanding, including the term loans, represent their approximate fair value because our current borrowing rates are variable and do not materially differ from market rates for similar bank borrowings. We consider this fair value estimate as a Level 2 input. As of September 30, 2017 , the carrying value of our Senior Notes due 2024 approximates its fair value. The Senior Notes due 2024 were issued at the Effective Date to holders of the predecessor Senior Notes due 2023 wherein they received full value of their claims and with terms that satisfied all counterparties. We consider the inputs to the valuation of our Senior Notes due 2024 to be Level 2. Derivative instruments. Our commodity derivative instruments consist of fixed-price swaps and collars. We account for our commodity derivatives and interest rate derivatives at fair value on a recurring basis. We estimate the fair values of the fixed-price swaps based on published forward commodity price curves for the underlying commodities as of the date of the estimate. We estimate the option value of the contract floors and ceilings using an option pricing model which takes into account market volatility, market prices and contract parameters. The discount rate used in the discounted cash flow projections is based on published LIBOR rates, Eurodollar futures rates and interest swap rates. As of December 31, 2016 (Predecessor), we had one remaining interest rate swap derivative contract, which expired in February 2017. In order to estimate the fair value of our interest rate swaps, we use a yield curve based on money market rates and interest rate swaps, extrapolate a forecast of future interest rates, estimate each future cash flow, derive discount factors to value the fixed and floating rate cash flows of each swap, and then discount to present value all known (fixed) and forecasted (floating) swap cash flows. We consider the fair value estimate for these derivative instruments as a Level 2 input. Inputs to the pricing models include publicly available prices and forward price curves generated from a compilation of data gathered from third parties. Management validates the data provided by third parties by understanding the pricing models used, analyzing pricing data in certain situations and confirming that those securities trade in active markets. Assumed credit risk adjustments, based on published credit ratings, public bond yield spreads and credit default swap spreads, are applied to our commodity derivatives and interest rate derivatives. Financial assets and financial liabilities measured at fair value on a recurring basis are summarized below (in thousands): Successor September 30, 2017 Fair Value Measurements Assets/Liabilities Using Level 2 at Fair Value Assets: Commodity price derivative contracts $ 254 $ 254 Total derivative instruments $ 254 $ 254 Liabilities: Commodity price derivative contracts $ (55,175 ) $ (55,175 ) Total derivative instruments $ (55,175 ) $ (55,175 ) Predecessor December 31, 2016 Fair Value Measurements Assets/Liabilities Using Level 2 at Fair Value Liabilities: Interest rate derivative contracts $ (125 ) $ (125 ) Total derivative instruments $ (125 ) $ (125 ) The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 (unobservable inputs) in the fair value hierarchy: Predecessor Nine Months Ended September 30, 2016 (in thousands) Unobservable inputs, beginning of period $ (5,933 ) Total gains 9,381 Settlements (4,608 ) Unobservable inputs, end of period $ (1,160 ) Change in fair value included in earnings related to derivatives still held as of September 30, $ 223 During periods of market disruption, including periods of volatile oil and natural gas prices, there may be certain asset classes that were in active markets with observable data that become illiquid due to changes in the financial environment. In such cases, more derivative instruments may fall to Level 3 and thus require more subjectivity and management judgment. Further, rapidly changing commodity and unprecedented credit and equity market conditions could materially impact the valuation of derivative instruments as reported within our consolidated financial statements and the period-to-period changes in value could vary significantly. Decreases in value may have a material adverse effect on our results of operations or financial condition. Our Predecessor applied the provisions of ASC Topic 350 “ Intangibles-Goodwill and Other .” Goodwill represented the excess of the purchase price over the estimated fair value of the net assets acquired in business combinations. Goodwill was assessed for impairment annually on October 1 or whenever indicators of impairment existed. The goodwill test was performed at the reporting unit level, which represented our oil and natural gas operations in the United States. If indicators of impairment were determined to exist, an impairment charge was recognized if the carrying value of goodwill exceeded its implied fair value. We utilized a market approach to determine the fair value of our reporting unit. Any sharp prolonged decreases in the prices of oil and natural gas as well as any continued declines in the quoted market price of the Company’s units could change our estimates of the fair value of our reporting unit and could result in an impairment charge. Our nonfinancial assets and liabilities that are initially measured at fair value are comprised primarily of assets acquired in business combinations and asset retirement costs and obligations. These assets and liabilities are recorded at fair value when acquired/incurred but not re-measured at fair value in subsequent periods. We classify such initial measurements as Level 3 since certain significant unobservable inputs are utilized in their determination. A reconciliation of the beginning and ending balance of our asset retirement obligations is presented in Note 8, “ Asset Retirement Obligations ,” in accordance with ASC Topic 410-20 “ Asset Retirement Obligations. ” The fair value of additions to the asset retirement obligation liability is measured using valuation techniques consistent with the income approach, converting future cash flows to a single discounted amount. Inputs to the valuation include: (1) estimated plug and abandonment cost per well based on our experience; (2) estimated remaining life per well based on average reserve life per field; (3) our credit-adjusted risk-free interest rate; and (4) the average inflation factor. These inputs require significant judgments and estimates by the Company’s management at the time of the valuation and are the most sensitive and subject to change. |
Asset Retirement Obligations
Asset Retirement Obligations | 9 Months Ended |
Sep. 30, 2017 | |
Asset Retirement Obligation [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations The following table presents a reconciliation of the Company’s asset retirement obligations (in thousands): Asset retirement obligations as of December 31, 2016 (Predecessor) $ 272,436 Liabilities added during the current period 555 Accretion expense 6,795 Retirements (1,161 ) Liabilities related to assets divested (10,107 ) Change in estimate (29 ) Asset retirement obligation at July 31, 2017 (Predecessor) 268,489 Fresh-start adjustment (1) (123,320 ) Asset retirement obligation at July 31, 2017 (Successor) 145,169 Liabilities added during the current period 206 Accretion expense 1,478 Retirements (317 ) Asset retirement obligation at September 30, 2017 (Successor) 146,536 Less: current obligations (6,457 ) Long-term asset retirement obligation at September 30, 2017 (Successor) $ 140,079 (1) As a result of the application of fresh-start accounting, the Successor recorded its asset retirement obligations at fair value as of the Effective Date. Significant inputs to the valuation include estimates of: (i) plug and abandon costs per well based on existing regulatory requirements; (ii) remaining life per well; (iii) future inflation factor of 1.8% ; and (iv) a credit-adjusted risk-free interest rate of 6.4% . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Transportation Demand Charges As of September 30, 2017 , we have contracts that provide firm transportation capacity on pipeline systems. The remaining terms on these contracts range from one month to three years and require us to pay transportation demand charges regardless of the amount of pipeline capacity we utilize. The values in the table below represent gross future minimum transportation demand charges we are obligated to pay as of September 30, 2017 . However, our financial statements will reflect our proportionate share of the charges based on our working interest and net revenue interest, which will vary from property to property. September 30, 2017 (in thousands) October 1, 2017 - December 31, 2017 $ 356 2018 1,009 2019 821 2020 410 Total $ 2,596 Legal Proceedings On February 1, 2017, the Debtors filed the Bankruptcy Petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Debtors’ Chapter 11 Cases were administered jointly under the caption “In re Vanguard Natural Resources, LLC, et al.” On July 18, 2017, the Bankruptcy Court entered the Confirmation Order. Consummation of the Final Plan was subject to certain conditions set forth in the Final Plan. On the Effective Date, all of the conditions were satisfied or waived and the Final Plan became effective and was implemented in accordance with its terms. The Debtors’ Chapter 11 Cases will remain pending until the final resolution of all outstanding claims. Pursuant to 11 U.S.C. § 362, the Predecessor’s legal proceedings were automatically stayed as to the Debtors through the Effective Date. However, the Company is, and will continue to be until the final resolution of all claims, subject to certain contested matters and adversary proceedings stemming from the Chapter 11 Cases. The Company is not currently a party to any litigation or pending claims that it believes would have a material adverse effect on its overall business, financial position, results of operations or liquidity; however, cash flow could be significantly impacted in the reporting periods in which such matters are resolved. We are defendants in certain legal proceedings arising in the normal course of our business. While the outcome and impact of such legal proceedings on the Company cannot be predicted with certainty, management does not believe that it is probable that the outcome of these actions will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flow. In addition, we are not aware of any legal or governmental proceedings against us, or contemplated to be brought against us, under the various environmental protection statutes to which we are subject. |
Stockholders' Equity (Members'
Stockholders' Equity (Members' Deficit) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Members’ Deficit and Net Loss per Common and Class B Unit | Stockholders’ Equity (Members’ Deficit) Cancellation of Units and Issuance of Common Stock As previously discussed, all outstanding Preferred Units issued and outstanding immediately prior to the Effective Date were cancelled and the holders thereof received their pro rata shares of (i) 3% of outstanding shares of Common Stock and (ii) Preferred Unit Warrants, in full and final satisfaction of their interests. Further, all common equity of the Predecessor issued and outstanding immediately prior to the Effective Date were cancelled and the holders of the common equity received Common Unit Warrants, in full and final satisfaction of their interests. Please see further discussion below regarding the issuance of new warrants. On the Effective Date, the Company issued the following in accordance with the Final Plan: • 678,464 shares of New Common Stock were issued pro rata to holders of claims arising under the Senior Notes; • 1,283,333 shares of New Common Stock were issued pro rata to holders of the Old Second Lien Notes in exchange for a fully committed $19.25 million investment; • 678,405 shares of New Common Stock were issued to participants in the 1145 rights offering extended by the Debtors to certain holders of claims arising under the Senior Notes (including certain of the commitment parties party to the Backstop Commitment Agreement); • 7,846,595 shares of New Common Stock were issued to participants who were eligible to participate in the accredited investor rights offering extended by the Debtors to certain holders of claims arising under the Senior Notes (including certain of the commitment parties party to the Backstop Commitment Agreement); • 1,023,000 shares of New Common Stock were issued to commitment parties under the Amended and Restated Backstop Commitment Agreement in respect of the premium due thereunder; • 8,525,000 shares of New Common Stock were issued to commitment parties under the Amended and Restated Backstop Commitment Agreement in connection with their backstop obligation thereunder together with 1,482,021 shares of New Common Stock reflecting shares purchased by such commitment parties in respect of unsubscribed shares in the rights offerings; and • 20,983 shares of New Common Stock were issued to holders of Old Vanguard’s Preferred Units. Warrant Agreement On the Effective Date, the Company entered into a warrant agreement (the “Warrant Agreement”) with American Stock Transfer & Trust Company, LLC, as warrant agent, pursuant to which the Company issued (i) to electing holders of Old Vanguard’s (A) 7.875% Series A Cumulative Redeemable Perpetual Preferred Units (“Series A Preferred Units”), (B) 7.625% Series B Cumulative Redeemable Perpetual Preferred Units (“Series B Preferred Units”), and (C) 7.75% Series C Cumulative Redeemable Perpetual Preferred Units (“Series C Preferred Units” and, together with the Series A Preferred Units and Series B Preferred Units, the “Preferred Units”), three and a half year warrants (the “Preferred Unit New Warrants”), which will be exercisable to purchase up to 621,649 shares of the New Common Stock as of the Effective Date, subject to dilution; and (ii) to electing holders of Predecessor’s common units representing limited liability company interests (the “Common Units”), three and a half year warrants (the “Common Unit New Warrants” and, together with the Preferred Unit New Warrants, the “Warrants”) which will be exercisable to purchase up to 640,876 shares of the New Common Stock as of the Effective Date, subject to dilution. The expiration date of the Warrants will be February 1, 2021. The strike price for the Preferred Unit New Warrants is $44.25 , and the strike price for the Common Unit New Warrants is $61.45 . The Company allocated approximately $11.7 million of the Enterprise Value to the warrants which is reflected in “Successor Additional paid-in capital” on the unaudited condensed consolidated balance sheet at September 30, 2017. Management Incentive Plan On August 22, 2017, the Company’s board of directors approved, upon the recommendation of the Company’s Compensation Committee (“Committee”), the Vanguard Natural Resources, Inc. 2017 Management Incentive Plan (the “2017 MIP”), which will assist the Company in attracting, motivating and retaining key personnel and will align the interests of participants with those of stockholders. The maximum number of shares of common shares available for issuance under the 2017 MIP is 2,233,333 shares. The 2017 MIP will be administered by the Committee or, in certain instances, its designee. Employees, directors, and consultants of the Company and its subsidiaries will be eligible to receive awards of stock options, restricted stock, restricted stock units or other stock-based awards at the Committee or its designee's discretion. The Board may amend, modify, suspend, or terminate the 2017 MIP in its discretion; however no amendment, modification, suspension or termination may materially and adversely affect any award previously granted without the consent of the participant or the permitted transferee of the award. No grant will be made under the 2017 Plan more than 10 years after its effective date. Dividends/Distributions Under the Predecessor’s limited liability company agreement, unitholders were entitled to receive a distribution of available cash, which included cash on hand plus borrowings less any reserves established by the Predecessor’s Board of Directors to provide for the proper conduct of the Predecessor’s business (including reserves for future capital expenditures, including drilling, acquisitions and anticipated future credit needs) or to fund distributions, if any, over the next four quarters. In February 2016, the Predecessor’s Board of Directors determined to suspend payment of the Predecessor’s distribution. The Successor currently has no intention of paying cash dividends and any future payment of cash dividends would be subject to the restrictions in the agreements governing the Successor Credit Facility and the Senior Notes due 2024. Earnings Per Share/Unit Basic earnings per share/unit is computed by dividing net earnings attributable to stockholders/unitholders by the weighted average number of shares/units outstanding during the period. Diluted earnings per share/unit is computed by adjusting the average number of shares/units outstanding for the dilutive effect, if any, of potential common shares/units. The Company uses the treasury stock method to determine the dilutive effect. The diluted earnings per share calculation excludes approximately 1.3 million warrants that were antidilutive for the two months ended September 30, 2017. For the one month and seven months ended July 31, 2017, 13.5 million phantom units were excluded from the calculation of diluted earnings per unit as they were antidilutive. For the three months and nine months period ended September 30, 2016, 2.6 million phantom units were excluded from the calculation of diluted earnings per unit for each period, due to their antidilutive effect as we were in a loss position. |
Unit-Based Compensation
Unit-Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Unit-Based Compensation | Unit-Based Compensation Effect of Emergence from Bankruptcy on Unit-Based Compensation Pursuant to the Final Plan, all unvested equity grants under the Predecessor’s Long-Term Incentive Plan (the “Predecessor Incentive Plan”) that were outstanding immediately before the Effective Date were canceled and of no further force or effect as of the Effective Date. In addition, on the Effective Date, the Predecessor’s Incentive Plan was canceled and extinguished, and participants in the Predecessor’s Incentive Plan received no payment or other distribution on account of the Incentive Plan. Second Amended and Restated Employment Agreements On August 1, 2017, the Company entered into amended and restated employment agreements (the “Employment Agreements”) with each of Scott W. Smith and Britt Pence (each, an “Executive” and collectively, the “Executives”). The Employment Agreements were effective on the Effective Date, and supersede prior employment agreements dated January 1, 2016. The initial term of the Employment Agreements ends on January 1, 2019, with a subsequent twelve ( 12 ) month term extension automatically commencing on January 1, 2019, provided that neither the Company nor the Executives deliver a timely non-renewal notice prior to the expiration date. On October 31, 2017, the Company entered into an employment agreement with R. Scott Sloan. The initial term of Mr. Sloan’s employment agreement ends on December 31, 2020, with a subsequent twelve ( 12 ) month term extension automatically commencing on January 1, 2021, provided that neither the Company nor the Executives deliver a timely non-renewal notice prior to the expiration date. The Employment Agreements provide that (i) Mr. Smith is entitled to an annual base salary of $650,000 , which will increase to $700,000 on January 1, 2018; (ii) Mr. Sloan is entitled to an annual base salary of $510,000 , which is subject to review at least annually; and (iii) Mr. Pence is entitled to an annual base salary of $450,000 , which will increase to $460,000 on January 1, 2018. In addition, the Company’s Board has the discretion to increase the base salaries of Messrs. Smith, Sloan and Pence at any time. Subject to certain terms and conditions, the Board may not reduce an Executive’s base salary without his prior written approval. Each Executive shall be eligible to receive an annual bonus in an amount to be determined by the Board or compensation committee of the Board (the “Compensation Committee”). Each Executive will also be eligible to receive bonus payments through the year ended December 31, 2017 in accordance with Old Vanguard’s 2017 pre-emergence annual cash bonus program. The Employment Agreements provide that Messrs. Smith, Sloan and Pence are eligible to participate in the benefit programs generally available to senior executives of the Company, including the management incentive plan (“MIP”) to be implemented by the Board, in its sole discretion. In the event of the Company’s Change in Control (as defined in the Employment Agreements), the Executives are entitled to certain change in control payments and benefits under the Employment Agreements. If, during the twelve ( 12 ) months immediately following the occurrence of a Change of Control of the Company, the Executive is terminated by the Company without Cause or resigns for Good Reason (each as defined below), the Executive will be entitled to receive within ten ( 10 ) business days after the date of his termination, accrued compensation and reimbursements listed in the Employment Agreements, and (ii) on the sixtieth ( 60 th) day following the date of termination, a lump sum payment of an amount equaling two (2) times his then-current base-salary and annual bonus. Under the Employment Agreements, Messrs. Smith, Sloan and Pence are entitled to severance payments and benefits upon certain qualifying terminations. Upon a termination by the Company without Cause or termination by any such Executive for Good Reason (and except with respect to a Change of Control within a year of the Effective Date, as described above), the Executive is entitled to receive on the sixtieth ( 60 th) day following the date of termination, a lump sum payment of an amount equal to two and a half ( 2.5 ) times the Executive’s then-current base salary. Upon an executive’s termination by Disability (as defined below) or death, the Executive is entitled to accrued compensation and reimbursements. As a condition to receiving any of the Change of Control or severance payments and benefits provided in the Employment Agreements, the terminated Executive (or his legal representative, as applicable) must execute and not revoke a customary severance and release agreement, including a waiver of all claims. The Employment Agreements generally define the term “Cause” to mean (i) the Executive’s commission of theft, embezzlement, any other act of dishonesty relating to his employment with the Company or any willful violation of any law, rules, or regulation applicable to the Company, including, but not limited to, those laws, rules, or regulations established by the SEC or any self-regulatory organization having jurisdiction or authority over the Executive or the Company; (ii) the Executive’s conviction of, or Executive’s plea of guilty or nolo contendere to, any felony or any other crime involving fraud, dishonesty, or moral turpitude; (iii) a determination by the Board that the Executive has materially breached his Employment Agreement (other than during any period of Disability) where such breach is not remedied within ten ( 10 ) business days after written demand by the Board for substantial performance is actually received by the Executive which specifically identifies the manner in which the Board believes the Executive has so breached; or (iv) the Executive’s willful failure to perform the reasonable and customary duties of his position as stated in the Employment Agreement which such failure is not remedied within ten ( 10 ) business days after written demand by the Board for substantial performance is actually received by the Executive which specifically identifies the nature of such failure. The Employment Agreements define the term “Good Reason” to mean the following, without the Executive’s written consent: (a) a material reduction in the Executive’s authority, duties, or responsibilities (excluding any changes to the foregoing resulting from the Company’s emergence from the Chapter 11 Cases); (b) a material reduction in the Executive’s base salary, other than a reduction affecting senior management similarly and in no event more than 10% from the Executive’s base salary in effect on that date; (c) the Executive’s removal from his position as stated in the Employment Agreement, other than for Cause or by death or Disability, to a position that is not at least equivalent in authority and duties (excluding his removal as a member of the Board, as applicable); (d) relocation of the Executive’s principal place of business to a location fifty ( 50 ) or more miles from its location as of the date of the Employment Agreement; (e) a material breach by the Company of the Employment Agreement, which materially adversely affects the Executive; (f) the Company’s failure to make any material payment to the Executive required to be made under the Employment Agreement, or (g) the Board or the Compensation Committee (x) fails to make grants of initial awards (“Initial Grants”) under the MIP within ninety ( 90 ) days following the Effective Date or (y) fails to grant the Executive an Initial Grant substantially equivalent in value, on the award date, to the lesser of (I) Executive’s past equity awards or (II) grants made at median to similarly situated Executives employed by other companies within the Company’s peer group selected by the Board or a committee thereof based on the recommendation of an independent compensation consultant to the Board or a committee thereof. The Employment Agreements generally define the term “Disability” to mean the Executive’s inability to substantially perform his duties as an employee of the Company as a result of sickness or injury, and continued inability to perform any such duties for a period of more than 180 consecutive days in any 12 month period. The Employment Agreements contain standard non-competition, non-solicitation and confidentiality provisions. Management Incentive Plan As discussed in Note 10 , “Stockholders’ Equity (Members’ Deficit),” on August 22, 2017, the Company’s board of directors approved the Vanguard Natural Resources, Inc. 2017 Management Incentive Plan (the “2017 MIP ”), which will assist the Company in attracting, motivating and retaining key personnel and will align the interests of participants with those of stockholders. There were no grants under the 2017 MIP from the Effective Date through September 30, 2017. |
Income Taxes Income Taxes
Income Taxes Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Effective August 1, 2017, upon consummation of the Final Plan, the Successor became a C corporation subject to federal and state income taxes. For the two months ended September 30, 2017, we recorded no income tax expense or benefit. The significant difference between our effective tax rate and the federal statutory income tax rate of 35% is primarily due to the effect of changes in the Company’s valuation allowance. During the two months ended September 30, 2017, the Company recorded a full valuation allowance against its deferred tax position. A valuation allowance has been recorded as management does not believe that it is more-likely-than-not that its deferred tax assets will be realized. |
Shelf Registration Statements
Shelf Registration Statements | 9 Months Ended |
Sep. 30, 2017 | |
Shelf Registration Statements [Abstract] | |
Shelf Registration Statements | Shelf Registration Statement Registration Rights Agreement On the Effective Date, in accordance with the Final Plan and that certain Amended and Restated Backstop Commitment and Equity Investment Agreement, dated as of February 24, 2017, as amended and restated on May 23, 2017 (as may have been further amended from time to time, the “Amended and Restated Backstop Commitment Agreement”), the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with certain recipients of shares of New Common Stock distributed on the Effective Date that were party to the Amended and Restated Backstop Commitment Agreement (including certain of their affiliates and related funds), in accordance with the terms set forth in the Final Plan (collectively, the “Registration Rights Holders”). The Registration Rights Agreement required the Company to file a shelf registration statement (“Initial Shelf Registration Statement”) within ninety ( 90 ) calendar days following the Effective Date that includes the Registrable Securities (as defined in the Registration Rights Agreement) whose inclusion has been timely requested, provided, however, that the Company is not required to file or cause to be declared effective an Initial Shelf Registration Statement unless the request from Registration Rights Holders amounts to at least 20% of all Registrable Securities. The Registration Rights Agreement also provides the Registration Rights Holders the ability to demand registrations or underwritten shelf takedowns subject to certain requirements and exceptions. In addition, if the Company proposes to register shares of New Common Stock in certain circumstances, the Registration Rights Holders will have certain “piggyback” registration rights, subject to restrictions set forth in the Registration Rights Agreement, to include their shares of New Common Stock in the registration statement. The Registration Rights Agreement also provides that (i) for so long as the Company is subject to the requirements to publicly file information or reports with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, the Company will timely file all information and reports with the SEC and comply with all such requirements and (b) if the Company is not subject to the requirements of Section 13 or 15(d) of the Exchange Act, the Company will make available the information necessary to comply with Section 4(a)(7) of the Securities Act and Rule 144 and Rule 144A, if available with respect to resales of the Registrable Securities under the Securities Act, at all times, all to the extent required from time to time to enable Registration Rights Holders to sell Registrable Securities without registration under the Securities Act pursuant to the abovementioned exemptions or any other rule or regulation hereafter adopted by the SEC. The Company filed the Initial Shelf Registration Statement on October 30, 2017. The Company is required to use commercially reasonable efforts to cause the Initial Shelf Registration Statement to be declared effective by the Commission as promptly as practicable, and shall use its commercially reasonable efforts to keep such Initial Shelf Registration Statement continuously effective. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The consolidated financial statements as of September 30, 2017 (Successor) and December 31, 2016 (Predecessor) and for the two months ended September 30, 2017 (Successor), the one and seven months ended July 31, 2017 (Predecessor), and the three and nine months ended September 30, 2016 (Predecessor) include our accounts and those of our subsidiaries. We present our financial statements in accordance with GAAP. All intercompany transactions and balances have been eliminated upon consolidation. We consolidate Potato Hills Gas Gathering System as we have the ability to control the operating and financial decisions and policies of the entity through our 51% ownership and reflected the non-controlling interest as a separate element in our consolidated financial statements. |
Chapter 11 Proceedings | On February 1, 2017 (the “Petition Date”), Old Vanguard filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). During the pendency of the Chapter 11 proceedings, the Debtors operated their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. On July 18, 2017, the Bankruptcy Court entered an order confirming the Final Plan (as defined in Note 2). The Company emerged from bankruptcy effective August 1, 2017. Please read Note 2. Emergence From Voluntary Reorganization Under Chapter 11 for a discussion of the Chapter 11 Cases and the Final Plan. In accordance with Accounting Standards Codification (“ASC”) 852, Reorganizations (“ASC 852”), the Successor was required to apply fresh-start accounting upon its emergence from bankruptcy. The Successor evaluated transaction activity between July 31, 2017 and the Effective Date and concluded that an accounting convenience date of July 31, 2017 (the “Convenience Date”) was appropriate for the adoption of fresh-start accounting which resulted in the Successor becoming a new entity for financial reporting purposes as of the Convenience Date. References to “Successor” or “Successor Company” relate to the financial position and results of operations of the reorganized Company subsequent to July 31, 2017. References to “Predecessor” or “Predecessor Company” relate to the financial position and results of operations of the Company prior to, and including, July 31, 2017. As such, these periods are not comparable, are labeled Successor or Predecessor, and are separated by a bold black line. |
Oil and Natural Gas Properties | Oil and Natural Gas Properties - Transition from Full Cost Method to Successful Efforts Accounting Method Under GAAP, there are two allowed methods of accounting for oil and natural gas properties: the full cost method and the successful efforts method. Entities engaged in the production of oil and natural gas have the option of selection either method for application in the accounting for their properties. The principal differences between the two methods are in the treatment of exploration costs, the calculation of DD&A expense, and the assessment of impairment of oil and natural gas properties. Prior to July 31, 2017, we followed the full cost method of accounting. Under the full cost method, substantially all costs incurred in connection with the acquisition, development and exploration of oil, natural gas and NGLs reserves are capitalized. These capitalized amounts include the costs of unproved properties, internal costs directly related to acquisitions, development and exploration activities, asset retirement costs and capitalized interest. Under the full cost method, both dry hole costs and geological and geophysical costs are capitalized into the full cost pool, which is subject to amortization and ceiling test limitations. Capitalized costs associated with proved reserves are amortized over the life of the reserves using the unit of production method. Conversely, capitalized costs associated with unproved properties are excluded from the amortizable base until these properties are evaluated, which occurred on a quarterly basis. Specifically, costs are transferred to the amortizable base when properties are determined to have proved reserves. In addition, we transferred unproved property costs to the amortizable base when unproved properties were evaluated as being impaired and as exploratory wells were determined to be unsuccessful. Additionally, the amortizable base includes estimated future development costs, dismantlement, restoration and abandonment costs net of estimated salvage values. Capitalized costs are limited to a ceiling based on the present value of future net revenues, computed using the 12-month unweighted average of first-day-of-the-month historical price, the “12-month average price” discounted at 10% , plus the lower of cost or fair market value of unproved properties. Because a new entity has been created at the Effective Date, and there is no comparability to the Predecessor’s financial statements (refer to Note 3, “ Fresh-Start Accounting ”), upon emergence from bankruptcy, we elected to adopt the Successful Efforts Method of Accounting for our oil and natural gas properties. We believe that application of successful efforts accounting will provide greater transparency in the results of our oil and natural gas properties and enhance decision making and capital allocation processes. Additionally, application of the successful efforts method will eliminate proved property impairments based on historical prices, which are not indicative of the fair value of our oil and natural gas properties, and better reflect the true economics of developing our oil and natural gas reserves. Therefore, from August 1, 2017 we have used the successful efforts method to account for our investment in oil and natural gas properties in the Successor. Under the successful efforts method, we will capitalize the costs of acquiring unproved and proved oil and natural gas leasehold acreage. When proved reserves are found on an unproved property, the associated leasehold cost is transferred to proved properties. Significant unproved leases are reviewed periodically, and a valuation allowance is provided for any estimated decline in value. In determining whether an unproved property is impaired, the Company considers numerous factors including, but not limited to, current exploration and development plans, favorable or unfavorable exploration activity on the property being evaluated and/or adjacent properties, our geologists' evaluation of the property, and the remaining months in the lease term for the property. Development costs are capitalized, including the costs of unsuccessful and successful development wells and the costs to drill and equip exploratory wells that find proved reserves. Exploration costs, including unsuccessful exploratory wells and geological and geophysical costs, are expensed as incurred. Depreciation, depletion and amortization of the leasehold and development costs that are capitalized into proved oil and natural gas properties are computed using the units-of-production method, at the district level, based on total proved reserves and proved developed reserves, respectively. Upon sale or retirement of oil and gas properties, the costs and related accumulated depreciation, depletion and amortization are eliminated from the accounts and the resulting gain or loss is recognized. Additionally, proved oil and natural gas properties are assessed for impairment in accordance with Accounting Standards Codification Topic 360 “ Property, Plant and Equipment”, when events and circumstances indicate a decline in the recoverability of the carrying values of such properties, such as a negative revision of reserves estimates or sustained decrease in commodity prices, but at least annually. We estimate future cash flows expected in connection with the properties and compare such future cash flows to the carrying amount of the properties to determine if the carrying amount is recoverable. If, the sum of the undiscounted pretax cash flows is less than the carrying amount, then the carrying amount is written down to its estimated fair value. |
Goodwill and Intangible Assets | Goodwill and Other Intangible Assets Prior to July 31, 2017, we accounted for goodwill under the provisions of the Accounting Standards Codification (“ASC”) Topic 350, “Intangibles-Goodwill and Other.” Goodwill represented the excess of the purchase price over the estimated fair value of the net assets acquired in business combinations. Goodwill was not amortized, but was tested for impairment annually on October 1 or whenever indicators of impairment existed. |
New Pronouncements Issued But Not Yet Adopted | New Pronouncements Issued But Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU No. 2016-02”), which requires lessees to recognize at the commencement date for all leases, with the exception of short-term leases, (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The ASU No. 2016-02 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We do not expect the adoption of ASU No. 2016-02 will have a material impact on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-48 “Statement of Cash Flows (Topic 230): Restricted Cash” which is intended to address diversity in the classification and presentation of changes in restricted cash on the statement of cash flows. This ASU will be applied retrospectively as of the date of adoption and is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years (early adoption permitted). The Company is currently evaluating the impact of the adoption of this ASU on its financial statements and related disclosures. The adoption of this ASU is expected to result in the inclusion of restricted cash in the beginning and ending balances of cash on the statements of cash flows and disclosure reconciling cash and cash equivalents presented on the consolidated balance sheets to cash, cash equivalents and restricted cash on the consolidated statements of cash flows. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU No. 2017-01”). The amendments under this ASU provide guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (disposals) or business combinations by providing a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business, therefore reducing the number of transactions that need to be further evaluated for treatment as a business combination. The ASU No. 2017-01 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 and should be applied prospectively. The Company is currently evaluating the provisions of ASU 2017-01 and assessing the impact adoption may have on our consolidated financial statements. Currently, we do not expect the adoption of ASU 2017-01 to have a material impact on our consolidated financial statements; however these amendments could result in the recording of fewer business combinations in future periods |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates pertain to proved oil, natural gas and NGLs reserves and related future cash flows, the fair value of derivative contracts, asset retirement obligations, accrued oil, natural gas and NGLs revenues and expenses, as well as estimates of expenses related to depreciation, depletion, amortization and accretion, income taxes and estimated enterprise value and fair values of assets and liabilities under the provisions of ASC 852 fresh-start accounting. Actual results could differ from those estimates. |
Fresh-Start Accounting (Tables)
Fresh-Start Accounting (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Reorganizations [Abstract] | |
Schedule of Fresh-Start Adjustments | The following table reconciles the Company’s Enterprise Value to the estimated fair value of the Successor’s common stock as of July 31, 2017 (in thousands): July 31, 2017 Enterprise Value $ 1,425,000 Plus: Cash and cash equivalents 27,610 Less: Debt (943,392 ) Total stockholders' equity 509,217 Less: Fair value of warrants (11,734 ) Less: Fair value of non-controlling interest (2,274 ) Fair Value of Successor common stock $ 495,209 The following table reconciles the Company’s Debt as of July 31, 2017 (in thousands): July 31, 2017 Successor Credit Facility $ 730,000 Successor Term Loan 125,000 Senior Notes due 2024 80,722 Lease Financing Obligation, net of current portion 12,464 Current portion of Lease Financing Obligation 4,647 Total Fair value of debt 952,833 Successor Credit Facility fees and debt issuance costs (9,441 ) Total Debt $ 943,392 The following table reconciles the Company’s Enterprise Value to its Reorganization Value as of July 31, 2017 (in thousands): July 31, 2017 Enterprise Value $ 1,425,000 Plus: Cash and cash equivalents 27,610 Plus: Current liabilities, excluding current portion of Lease Financing Obligation 147,552 Plus: Other noncurrent liabilities 15,589 Plus: Long-term asset retirement obligation 136,769 Reorganization Value of Successor assets $ 1,752,520 Condensed Consolidated Balance Sheet The following illustrates the effects on the Company’s unaudited condensed consolidated balance sheet due to the reorganization and fresh-start accounting adjustments. The explanatory notes following the table below provide further details on the adjustments, including the Company’s assumptions and methods used to determine fair value for its assets and liabilities. As of July 31, 2017 (in thousands) Predecessor Reorganization Adjustments (1) Fresh-Start Adjustments Successor Assets Current assets Cash and cash equivalents $ 68,933 $ (41,323 ) (2) $ — $ 27,610 Trade accounts receivable, net 64,253 (155 ) (3) (8,231 ) (15) 55,867 Derivative assets 3,236 — — 3,236 Restricted cash 102,556 (74,101 ) (4) — 28,455 Other current assets 4,430 (394 ) (5) 416 (16) 4,452 Total current assets 243,408 (115,973 ) (7,815 ) 119,620 Oil and natural gas properties, at cost 4,635,867 — (3,029,173 ) (17) 1,606,694 Accumulated depletion (3,916,889 ) — 3,916,889 (17) — Oil and natural gas properties 718,978 — 887,716 1,606,694 Other assets Goodwill 253,370 — (253,370 ) (18) — Other assets 44,315 — (18,109 ) (19)(20) 26,206 Total assets $ 1,260,071 $ (115,973 ) $ 608,422 $ 1,752,520 Liabilities and equity (deficit) Current liabilities Accounts payable: Trade $ 8,444 $ 9,978 (6) $ — $ 18,422 Accrued liabilities: Lease operating 13,199 — — 13,199 Development capital 8,928 — — 8,928 Interest 8,478 (8,478 ) (7) — — Production and other taxes 23,494 — — 23,494 Other 20,933 12,297 (8) — 33,230 Derivative liabilities 12,987 — — 12,987 Oil and natural gas revenue payable 36,087 — (7,808 ) (15) 28,279 Long-term debt classified as current 1,300,971 (1,300,971 ) (9) — — Other 14,246 (382 ) (10) (203 ) (21) 13,661 Total current liabilities 1,447,767 (1,287,556 ) (8,011 ) 152,200 Long-term debt, net of current portion 12,647 926,281 (11) (183 ) (22) 938,745 Derivative liabilities 15,143 — — 15,143 Asset retirement obligations, net of current portion 260,089 — (123,320 ) (23) 136,769 Other long-term liabilities 37,683 — (37,237 ) (24) 446 Total liabilities not subject to compromise 1,773,329 (361,275 ) (168,751 ) 1,243,303 Liabilities subject to compromise 479,911 (479,911 ) (12) — — Total Liabilities 2,253,240 (841,186 ) (168,751 ) 1,243,303 As of July 31, 2017 Predecessor Reorganization Adjustments (1) Fresh-Start Adjustments Successor Stockholders’ equity/Members’ (deficit) (Note 9) Preferred units (Predecessor) 335,444 (335,444 ) (13) — — Common units (Predecessor) (1,342,849 ) 763,217 (13) 579,632 (25) — Class B units (Predecessor) 7,615 (7,615 ) (13) — — Common stock (Successor) — 20 (14) — 20 Additional paid-in capital (Successor) — 305,035 (14) 201,888 (25) 506,923 Total VNR stockholders' equity/ members’ (deficit) (999,790 ) 725,213 781,520 506,943 Non-controlling interest in subsidiary 6,621 — (4,347 ) (26) 2,274 Total stockholders' equity/members’ (deficit) (993,169 ) 725,213 777,173 509,217 Total liabilities and equity (deficit) $ 1,260,071 $ (115,973 ) $ 608,422 $ 1,752,520 Reorganization Adjustments: 1) Represent amounts recorded as of the Convenience Date for the implementation of the Final Plan, including, among other items, settlement of the Predecessor’s liabilities subject to compromise, repayment of certain of the Predecessor’s debt, cancellation of the Predecessor’s equity, issuances of the Successor’s common stock and equity warrants, proceeds received from the Successor’s rights offering and issuance of the Successor’s debt. 2) Changes in cash and cash equivalents included the following (in thousands): Proceeds from equity investment from holders of Old Second Lien Notes $ 19,250 Proceeds from rights offering 255,750 Borrowings under the Successor's Term Loan 125,000 Removal of restriction on cash balance 102,556 Payment of holders of claims under the Predecessor Credit Facility (500,266 ) Payment of interest and fees under the Predecessor Credit Facility (3,390 ) Payment of Successor Credit Facility fees (9,300 ) Payment of professional fees (2,468 ) Funding of the general unsecured claims cash distribution pools (6,750 ) Funding of the professional fees escrow account (21,705 ) Changes in cash and cash equivalents $ (41,323 ) 3) Reflects the write-off of lease incentive costs due to the rejection of the related lease contract. 4) Net change to restricted cash includes the following: Removal of restriction on cash balance $ (102,556 ) Funding of the general unsecured claims cash distribution pools 6,750 Funding of the professional fees escrow account 21,705 $ (74,101 ) 5) Primarily reflects the write-off of the Predecessor’s equity offering costs. 6) Reflects reinstatement of payables for the general unsecured claims and trade claims cash distribution pool. 7) Reflects payment of accrued interest related to Predecessor Credit Facility and Predecessor debtor-in-possession credit facility of $3.4 million and the capitalization of approximately $5.1 million accrued interest on the Old Second Lien Notes into the principal amount of the Senior Notes due 2024. 8) Net increase in other accrued expenses reflect (in thousands): Recognition of payables for the professional fees escrow account $ 12,627 Write-off of accrued non cash compensation related to Phantom Units granted (330 ) Net increase in accounts payable and accrued expenses $ 12,297 9) Reflects the repayment of outstanding borrowings under the Predecessor Credit Facility of approximately $500.3 million and the conversion of the remaining outstanding debt to Successor Credit Facility and the Senior Notes due 2024 to Long-Term Debt, net of the write-off of deferred financing fees. 10) Reflects the write-off of deferred rent due to the rejection of the related lease contract. 11) Reflects $855.0 million of outstanding borrowings under the Successor Credit Facility, which includes a $730.0 million revolving loan and a $125.0 million Term Loan. The adjustment also reflects the issuance of Senior Notes due 2024 of $80.7 million . The amounts are presented net of capitalized deferred financing fees related to each debt. 12) Settlement of Liabilities subject to compromise and the resulting net gain were determined as follows (in thousands): Accounts payable and accrued expenses $ 36,224 Accrued interest payable 10,737 Debt 432,950 Total liabilities subject to compromise 479,911 Reinstatement of liability for the general unsecured claims (4,978 ) Reinstatement of liability for settlement of an unsecured claim (5,000 ) Issuance of common shares to holders of general unsecured claims (1,089 ) Issuance of common shares to holders of Senior Notes claims (16,715 ) Gain on settlement of liabilities subject to compromise $ 452,129 13) Net change in Predecessor common units reflects (in thousands): Recognition of gain on settlement of liabilities subject to compromise $ 452,129 Cancellation of Predecessor Preferred units 335,444 Cancellation of Predecessor Class B units 7,615 Write-off of deferred financing costs and debt discounts (4,917 ) Recognition of professional and success fees (14,968 ) Fair value of warrants issued to Predecessor unitholders (11,734 ) Fair value of shares issued to Predecessor unitholders (517 ) Terminated contracts 165 Net change in Predecessor Common units $ 763,217 14) Net change in Successor equity reflects net increase in capital accounts as follows (in thousands): Issuance of common stock to general unsecured creditors $ 1,089 Issuance of common stock to holders of Senior Notes claims 16,715 Issuance of common stock to Predecessor preferred unitholders 517 Issuance of common stock for the second lien equity investment 19,250 Issuance of common stock pursuant to the rights offering 255,750 Issuance of warrants 11,734 Change in additional paid-in capital 305,055 Par value of common stock (20 ) Net increase in capital accounts $ 305,035 See Note 10 , “Stockholders’ Equity (Members’ Deficit)” for additional information on the issuances of the Successor’s equity. Fresh-Start Adjustments: 15) Reflects a change in accounting policy from the entitlements method for natural gas production imbalances in accordance with the adoption of ASC 606. 16) Reflects fair value adjustment for oil inventory. 17) Reflects the adjustments to oil and natural gas properties, based on the methodology discussed above, and the elimination of accumulated depletion. The following table summarizes the components of oil and natural gas properties as of the Convenience Date (in thousands): Successor Predecessor Fair Value Historical Book Value Proved properties $ 1,511,083 $ 4,635,867 Unproved properties 95,611 — 1,606,694 4,635,867 Less: accumulated depletion and amortization — (3,916,889 ) $ 1,606,694 $ 718,978 18) Reflects the write-off of Predecessor goodwill. 19) Reflects a decrease of other property and equipment and the elimination of accumulated depreciation. The following table summarizes the components of other property and equipment as of the Convenience Date (in thousands): Successor Predecessor Fair Value Historical Book Value Gas gathering assets $ 4,196 $ 19,942 Office equipment and furniture 574 5,847 Buildings and leasehold improvements 57 836 Vehicles 1,311 1,549 6,138 28,174 Less: accumulated depreciation — (13,657 ) $ 6,138 $ 14,517 In estimating the fair value of other property and equipment, the Company used a combination of cost and market approaches. A cost approach was used to value the Company’s other operating assets, based on current replacement costs of the assets less depreciation based on the estimated economic useful lives of the assets and age of the assets. A market approach was used to value the Company’s vehicles, using recent transactions of similar assets to determine the fair value from a market participant perspective. 20) Reflects an adjustment for the intangible asset related to the Company’s nickel gas contract of $5.6 million and the write-off of deferred tax asset of $4.1 million . 21) Reflects the adjustment of current portion of financing obligation to fair value and write-off of deferred rent. 22) Reflects the adjustment of long-term portion of financing obligation to fair value. 23) Primarily reflects the fair value adjustment of asset retirement obligations (“ARO”) to fair value of approximately $145.2 million , of which $136.8 million is reflected as long-term ARO and $8.4 million of current ARO shown in other current liabilities. The fair value of asset retirement obligations was estimated using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation include estimates of: (i) plug and abandon costs per well based on existing regulatory requirements; (ii) remaining life per well; (iii) future inflation factors; and (iv) a credit-adjusted risk-free interest rate. Refer to Note 8, “ Asset Retirement Obligations” for further details of the Company's asset retirement obligations. 24) Reflects the write-off of deferred tax liabilities. 25) Reflects the cumulative impact of the fresh-start accounting adjustments discussed above and the elimination of Common units (Predecessor). 26) Reflects the fair value adjustment to the Potato Hills gas gathering assets on the non-controlling interest. The following table summarizes the net reorganization items (in thousands): Predecessor Seven Months Ended July 31, 2017 Gain on settlement of Liabilities subject to compromise $ 452,129 Fresh-start accounting adjustments 781,520 Issuance of common shares and warrants (214,140 ) Legal and other professional fees (58,482 ) Recognition of additional unsecured claims (31,346 ) Write-off of deferred financing costs and debt discounts (21,361 ) Terminated contracts 165 Reorganization items $ 908,485 |
Impact of ASC 606 Adoption (Tab
Impact of ASC 606 Adoption (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Revenue from Contract with Customer [Abstract] | |
Impact of Adoption on Current Period Results | The impact of adoption on our current period results is as follows (in thousands): Successor Two Months Ended September 30, 2017 Under ASC 606 Under ASC 605 Increase/(Decrease) Revenues : Oil sales $ 27,303 $ 27,303 $ — Natural gas sales 39,032 32,983 6,049 NGLs sales 13,465 11,470 1,995 Oil, natural gas and NGLs sales 79,800 71,756 8,044 Net losses on commodity derivative contracts (32,352 ) (32,352 ) — Total revenues 47,448 39,404 8,044 Costs and expenses : Transportation, gathering, processing, and compression 8,044 — 8,044 Net loss $ (37,236 ) $ (37,236 ) $ — |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Our financing arrangements consisted of the following as of the date indicated (in thousands): Successor Predecessor Description Interest Rate Maturity Date September 30, 2017 December 31, 2016 (in thousands) Successor Credit Facility Variable (1) February 1, 2021 $ 730,000 $ — Successor term loan Variable (2) May 1, 2021 125,000 — Senior Notes due 2024 9.0% February 15, 2024 80,722 — Predecessor Credit Facility Variable (3) April 16, 2018 — 1,269,000 Senior Notes due 2019 8.375% (4) June 1, 2019 — 51,120 Senior Notes due 2020 7.875% (5) April 1, 2020 — 381,830 Senior Notes due 2023 7.00% February 15, 2023 — 75,634 Lease Financing Obligation 4.16% August 10, 2020 (6) 16,354 20,167 Unamortized discount on Senior Notes — (13,167 ) Unamortized deferred financing costs (9,164 ) (11,072 ) Total debt $ 942,912 $ 1,773,512 Less: Long-term debt classified as current — (1,753,345 ) Current portion of Lease Financing Obligation (4,688 ) (4,692 ) Total long-term debt $ 938,224 $ 15,475 (1) Variable interest rate of 4.74% at September 30, 2017 . (2) Variable interest rate of 8.74% at September 30, 2017 . (3) Variable interest rate of 3.11% at December 31, 2016 . (4) Effective interest rate of 21.45% at December 31, 2016 . (5) Effective interest rate of 8.0% at December 31, 2016 . (6) The Lease Financing Obligations expire on August 10, 2020, except for certain obligations which expire on July 10, 2021. |
Schedule of Maturities of Long-term Debt | The table below shows the amounts of required payments under the Term Loan for each year as of September 30, 2017 (in thousands): Year 2018 $ 1,250 2019 1,250 2020 1,250 2021 through Maturity date 121,250 |
Debt Instrument Redemption | On or after February 15, 2020, the New Notes will be redeemable, in whole or in part, at redemption prices equal to the principal amount multiplied by the percentage set forth below, plus accrued and unpaid interest: Year Percentage 2020 106.75 % 2021 104.50 % 2022 102.25 % 2023 and thereafter 100.00 % |
Price and Interest Rate Risk 26
Price and Interest Rate Risk Management Activities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments [Table Text Block] | The following tables summarize oil, natural gas, and NGLs commodity derivative contracts in place at September 30, 2017 . Fixed-Price Swaps (NYMEX) Gas Oil NGLs Contract Period MMBtu Weighted Average Fixed Price Bbls Weighted Average WTI Price Gallons Weighted Average October 1, 2017 – December 31, 2017 18,400,000 $ 3.11 818,900 $ 45.20 15,842,400 $ 0.63 January 1, 2018 – December 31, 2018 70,242,000 $ 3.00 3,059,200 $ 46.47 56,721,000 $ 0.60 January 1, 2019 - December 31, 2019 52,539,000 $ 2.79 1,858,200 $ 48.50 — $ — January 1, 2020 - December 31, 2020 47,227,500 $ 2.75 1,393,800 $ 49.53 — $ — Collars Gas Oil Contract Period MMBtu Floor Price ($/MMBtu) Ceiling Price ($/MMBtu) Bbls Floor Price ($/Bbl) Ceiling Price ($/Bbl) January 1, 2019 - December 31, 2019 4,125,000 $ 2.60 $ 3.00 575,730 $ 43.81 $ 54.04 January 1, 2020 - December 31, 2020 5,490,000 $ 2.60 $ 3.00 659,340 $ 44.17 $ 55.00 |
Fair Value of Derivatives Outstanding | The following table summarizes the gross fair values of our derivative instruments, presenting the impact of offsetting the derivative assets and liabilities on our Consolidated Balance Sheets for the periods indicated (in thousands): Successor September 30, 2017 Offsetting Derivative Assets: Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets Commodity price derivative contracts $ 3,650 $ (3,396 ) $ 254 Total derivative instruments $ 3,650 $ (3,396 ) $ 254 Offsetting Derivative Liabilities: Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets Commodity price derivative contracts $ (58,572 ) $ 3,397 $ (55,175 ) Total derivative instruments $ (58,572 ) $ 3,397 $ (55,175 ) Predecessor December 31, 2016 Derivative Liabilities: Amount Presented in the Consolidated Balance Sheets Interest rate derivative contracts $ (125 ) Total derivative instruments $ (125 ) |
Reported Gains and Losses on Derivative Instruments | Changes in fair value of our commodity and interest rate derivatives for the periods indicated are as follows (in thousands): Successor Predecessor Two Months Ended September 30, 2017 Seven Months Ended July 31, 2017 December 31, 2016 Derivative asset (liability) at beginning of period, net $ (24,895 ) $ (125 ) $ 316,691 Purchases Net premiums and fees received for derivative contracts — — (2,444 ) Net losses on commodity and interest rate derivative contracts (32,352 ) (24,858 ) (46,939 ) Settlements Cash settlements paid (received) on matured commodity derivative contracts 2,326 (7 ) (226,876 ) Cash settlements paid on matured interest rate derivative contracts — 95 13,398 Termination of derivative contracts — — (53,955 ) Derivative liability at end of period, net $ (54,921 ) $ (24,895 ) $ (125 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis | Predecessor December 31, 2016 Fair Value Measurements Assets/Liabilities Using Level 2 at Fair Value Liabilities: Interest rate derivative contracts $ (125 ) $ (125 ) Total derivative instruments $ (125 ) $ (125 ) |
Reconciliation of changes in the fair value of assets and liabilities classified as Level 3 | The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 (unobservable inputs) in the fair value hierarchy: Predecessor Nine Months Ended September 30, 2016 (in thousands) Unobservable inputs, beginning of period $ (5,933 ) Total gains 9,381 Settlements (4,608 ) Unobservable inputs, end of period $ (1,160 ) Change in fair value included in earnings related to derivatives still held as of September 30, $ 223 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Asset Retirement Obligation [Abstract] | |
Changes in Asset Retirement Obligations | Asset retirement obligations as of December 31, 2016 (Predecessor) $ 272,436 Liabilities added during the current period 555 Accretion expense 6,795 Retirements (1,161 ) Liabilities related to assets divested (10,107 ) Change in estimate (29 ) Asset retirement obligation at July 31, 2017 (Predecessor) 268,489 Fresh-start adjustment (1) (123,320 ) Asset retirement obligation at July 31, 2017 (Successor) 145,169 Liabilities added during the current period 206 Accretion expense 1,478 Retirements (317 ) Asset retirement obligation at September 30, 2017 (Successor) 146,536 Less: current obligations (6,457 ) Long-term asset retirement obligation at September 30, 2017 (Successor) $ 140,079 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum transportation demand charges | The values in the table below represent gross future minimum transportation demand charges we are obligated to pay as of September 30, 2017 . However, our financial statements will reflect our proportionate share of the charges based on our working interest and net revenue interest, which will vary from property to property. September 30, 2017 (in thousands) October 1, 2017 - December 31, 2017 $ 356 2018 1,009 2019 821 2020 410 Total $ 2,596 |
Description of the Business (De
Description of the Business (Details) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017operating_areas | Aug. 01, 2017USD ($) | Jul. 31, 2017USD ($) | |
Number of operating areas | operating_areas | 10 | ||
Fair Value of Successor common stock | $ | $ 20,100 | $ 20 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details) | Sep. 30, 2017 |
Potato Hills Gas Gathering System [Member] | |
Ownership interest percent | 51.00% |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Oil and Gas Properties) (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Discount rate used in determining limitation of capitalized costs | 10.00% |
Emergence from Voluntary Reor33
Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code (Details) $ / shares in Units, $ in Thousands | Aug. 01, 2017USD ($)$ / sharesshares | Feb. 01, 2017 | Sep. 30, 2017USD ($)board_member | Jul. 31, 2017USD ($) | Jul. 18, 2017$ / shares | Dec. 31, 2016USD ($) | |
Fresh-Start Adjustment [Line Items] | |||||||
Basis Points Increase in Debt Securities Interest Rate | 0.02 | ||||||
Debt instrument, interest rate, stated percentage | 9.00% | ||||||
Common stock (Successor) | $ 20,100 | $ 20 | |||||
Common par value | $ / shares | $ 0.001 | ||||||
Percentage of common stock in exchange for cancelled senior notes | 3.38% | ||||||
Common stock shares issued | shares | 20,100,000 | ||||||
Number of board members | board_member | 7 | ||||||
Warrant Exercise Period | 3 years 6 months | ||||||
New Second Lien Notes Due 2024 [Member] | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Debt instrument, interest rate, stated percentage | 9.00% | ||||||
Debt amount outstanding | $ 80,700 | ||||||
Senior Notes due 2020 [Member] | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Debt instrument, interest rate, stated percentage | 7.875% | 7.875% | [1] | 7.875% | |||
Percentage or principal amount of debt | 52.00% | ||||||
Exit Term Loan Facility [Member] | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Debt amount outstanding | 125,000 | ||||||
Exit Revolving Credit Facility [Member] | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Debt amount outstanding | 850,000 | ||||||
Current borrowing capacity | 850,000 | ||||||
Successor Credit Facility [Member] | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Debt amount outstanding | $ 730,000 | ||||||
Senior Notes due 2019 [Member] | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Debt instrument, interest rate, stated percentage | 8.375% | ||||||
Percentage or principal amount of debt | 10.00% | ||||||
Subordinated Debt due 2023 | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Debt instrument, interest rate, stated percentage | 7.00% | ||||||
Percentage or principal amount of debt | 92.00% | ||||||
Series A Preferred Units | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Distribution Rate | 7.875% | 7.875% | |||||
Series B Preferred Unit | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Distribution Rate | 7.625% | 7.625% | |||||
Series C Preferred Units | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Distribution Rate | 7.75% | 7.75% | |||||
VNR Preferred Unit New Warrant [Member] | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Number of securities called by each warrant | shares | 621,649 | ||||||
Class of warrant or right, exercise price | $ / shares | $ 44.25 | $ 44.25 | |||||
VNR Common Unit New Warrant [Member] | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Number of securities called by each warrant | shares | 640,876 | ||||||
Class of warrant or right, exercise price | $ / shares | $ 61.45 | $ 61.45 | |||||
Preferred Unit Holder [Member] | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Percentage of pro-rat shares to be received by holder of bankruptcy claim | 3.00% | ||||||
Successor | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Debt amount outstanding | $ 942,912 | ||||||
Successor | New Second Lien Notes Due 2024 [Member] | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Debt instrument, interest rate, stated percentage | 9.00% | ||||||
Debt amount outstanding | $ 80,700 | ||||||
Predecessor | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Debt amount outstanding | $ 1,773,512 | ||||||
Predecessor | Senior Notes due 2020 [Member] | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Proceeds from rights offering | $ 275,000 | ||||||
Percent of common stock outstanding shares issued | 89.92% | ||||||
2017 Management Incentive Plan | |||||||
Fresh-Start Adjustment [Line Items] | |||||||
Percentage of outstanding common stock authorized for issuance | 11.00% | ||||||
[1] | Effective interest rate of 8.0% at December 31, 2016. |
Fresh-Start Accounting (Details
Fresh-Start Accounting (Details) - USD ($) | Jul. 31, 2017 | Jul. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Jul. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Fresh-Start Adjustment [Line Items] | ||||||||
Percent of voting shares | 50.00% | |||||||
Enterprise Value | $ 1,425,000,000 | $ 1,425,000,000 | $ 1,425,000,000 | $ 1,425,000,000 | $ 1,425,000,000 | |||
WACC | 10.00% | |||||||
Plan duration | 5 years | |||||||
Weighted average commodity price oil and gas | $ 67.20 | |||||||
Weighted average commodity British units | 3.69 | |||||||
Weighted average commodity price | $ 24.59 | |||||||
Asset retirement obligations, net of current portion | 136,769,000 | 136,769,000 | 136,769,000 | |||||
Asset Retirement Obligation | 145,200,000 | 145,200,000 | 145,200,000 | |||||
Asset Retirement Obligation, Current | 8,400,000 | 8,400,000 | 8,400,000 | |||||
Reorganization Items | (908,485,000) | $ (900,000) | ||||||
Accrued Interest Paid [Member] | ||||||||
Fresh-Start Adjustment [Line Items] | ||||||||
Increase (decrease) in accrued interest | 3,400,000 | 3,400,000 | 3,400,000 | |||||
Accrued Interest Capitalized [Member] | ||||||||
Fresh-Start Adjustment [Line Items] | ||||||||
Increase (decrease) in accrued interest | 5,100,000 | 5,100,000 | 5,100,000 | |||||
Reorganization Adjustments | ||||||||
Fresh-Start Adjustment [Line Items] | ||||||||
Increase (decrease) in accrued interest | (8,478,000) | (8,478,000) | (8,478,000) | |||||
Increase (decrease) in other assets | 0 | 0 | 0 | |||||
Intangible Asset Adjustment [Member] | ||||||||
Fresh-Start Adjustment [Line Items] | ||||||||
Increase (decrease) in other assets | 5,600,000 | 5,600,000 | 5,600,000 | |||||
Deferred Tax Asset Write-off [Member] | ||||||||
Fresh-Start Adjustment [Line Items] | ||||||||
Increase (decrease) in other assets | 4,100,000 | 4,100,000 | 4,100,000 | |||||
Predecessor | ||||||||
Fresh-Start Adjustment [Line Items] | ||||||||
Line of credit repayment | 500,266,000 | $ 0 | ||||||
Long-term debt, net of current portion | $ 15,475,000 | |||||||
Reorganization Items | (988,452,000) | $ 0 | (908,485,000) | $ 0 | ||||
Predecessor | Line of Credit [Member] | Reorganization Adjustments | ||||||||
Fresh-Start Adjustment [Line Items] | ||||||||
Line of credit repayment | 500,300,000 | |||||||
Long-term debt, net of current portion | 855,000,000 | 855,000,000 | 855,000,000 | |||||
Predecessor | Revolving Credit Facility [Member] | Reorganization Adjustments | ||||||||
Fresh-Start Adjustment [Line Items] | ||||||||
Long-term debt, net of current portion | 730,000,000 | 730,000,000 | 730,000,000 | |||||
Predecessor | Secured Debt [Member] | Reorganization Adjustments | ||||||||
Fresh-Start Adjustment [Line Items] | ||||||||
Long-term debt, net of current portion | 125,000,000 | 125,000,000 | 125,000,000 | |||||
Senior Notes due 2024 | Senior Notes | Predecessor | Reorganization Adjustments | ||||||||
Fresh-Start Adjustment [Line Items] | ||||||||
Debt | $ 80,700,000 | $ 80,700,000 | $ 80,700,000 |
Fresh-Start Accounting - Enterp
Fresh-Start Accounting - Enterprise Value Reconciliation to Common Stock (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jul. 31, 2017 |
Reorganizations [Abstract] | ||
Enterprise Value | $ 1,425,000 | $ 1,425,000 |
Cash and cash equivalents | 27,610 | |
Less: Debt | (943,392) | |
Total stockholders' equity | 509,217 | |
Less: Fair value of warrants | (11,734) | |
Less: Fair value of non-controlling interest | (2,274) | |
Fair Value of Successor common stock | $ 495,209 |
Fresh-Start Accounting - Debt R
Fresh-Start Accounting - Debt Reconciliation (Details) $ in Thousands | Jul. 31, 2017USD ($) |
Fresh-Start Adjustment [Line Items] | |
Successor Credit Facility | $ 730,000 |
Lease Financing Obligation, net of current portion | 12,464 |
Current portion of Lease Financing Obligation | 4,647 |
Total Fair value of debt | 952,833 |
Successor Credit Facility fees and debt issuance costs | (9,441) |
Total Debt | 943,392 |
Successor Term Loan | |
Fresh-Start Adjustment [Line Items] | |
Long-term Debt | 125,000 |
Senior Notes | |
Fresh-Start Adjustment [Line Items] | |
Long-term Debt | $ 80,722 |
Fresh-Start Accounting - Ente37
Fresh-Start Accounting - Enterprise Value Reconciliation to Reorganization Value (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jul. 31, 2017 |
Reorganizations [Abstract] | ||
Enterprise Value | $ 1,425,000 | $ 1,425,000 |
Cash and cash equivalents | 27,610 | |
Posconfirmation, Current Liabilities, Excluding Current Portion Of Lease Financing Obligation | 147,552 | |
Postconfirmation, Noncurrent Other Obligations | 15,589 | |
Asset retirement obligations, net of current portion | 136,769 | |
Reorganization Value | $ 1,752,520 |
Fresh-Start Accounting - Balanc
Fresh-Start Accounting - Balance Sheet (Details) - USD ($) $ in Thousands | Aug. 01, 2017 | Jul. 31, 2017 | Dec. 31, 2016 |
Stockholders’ equity/Members’ (deficit) | |||
Common stock (Successor) | $ 20 | ||
Additional paid-in capital (Successor) | 305,035 | ||
Current assets | |||
Cash and cash equivalents | 27,610 | ||
Trade accounts receivable, net | 55,867 | ||
Derivative assets | 3,236 | ||
Restricted cash | 28,455 | ||
Other current assets | 4,452 | ||
Total current assets | 119,620 | ||
Oil and natural gas properties, at cost | 1,606,694 | ||
Accumulated depletion | 0 | ||
Oil and natural gas properties | 1,606,694 | ||
Other assets | |||
Goodwill | 0 | ||
Other assets | 26,206 | ||
Total assets | 1,752,520 | ||
Current liabilities | |||
Accounts payable, trade | 18,422 | ||
Accrued liabilities, lease operating | 13,199 | ||
Accrued liabilities, development capital | 8,928 | ||
Accrued liabilities, interest | 0 | ||
Accrued liabilities, production and other taxes | 23,494 | ||
Accrued liabilities, other | 33,230 | ||
Derivative liabilities | 12,987 | ||
Oil and natural gas revenue payable | 28,279 | ||
Long-term debt classified as current | 0 | ||
Other | 13,661 | ||
Total current liabilities | 152,200 | ||
Long-term debt, net of current portion | 938,745 | ||
Derivative liabilities | 15,143 | ||
Asset retirement obligations, net of current portion | 136,769 | ||
Other long-term liabilities | 446 | ||
Total liabilities not subject to compromise | 1,243,303 | ||
Liabilities subject to compromise | 0 | ||
Total Liabilities | 1,243,303 | ||
Stockholders’ equity/Members’ (deficit) | |||
Preferred units (Predecessor) | 0 | ||
Common units (Predecessor) | 0 | ||
Class B units (Predecessor) | 0 | ||
Common stock (Successor) | $ 20,100 | 20 | |
Additional paid-in capital (Successor) | 506,923 | ||
Total VNR stockholders' equity/ members’ (deficit) | 506,943 | ||
Non-controlling interest in subsidiary | 2,274 | ||
Total stockholders' equity/members’ (deficit) | 509,217 | ||
Total liabilities and equity (deficit) | 1,752,520 | ||
Reorganization Adjustments | |||
Current assets | |||
Cash and cash equivalents | (41,323) | ||
Trade accounts receivable, net | (155) | ||
Derivative assets | 0 | ||
Restricted cash | (74,101) | ||
Other current assets | (394) | ||
Total current assets | (115,973) | ||
Oil and natural gas properties, at cost | 0 | ||
Accumulated depletion | 0 | ||
Oil and natural gas properties | 0 | ||
Other assets | |||
Goodwill | 0 | ||
Other assets | 0 | ||
Total assets | (115,973) | ||
Current liabilities | |||
Accounts payable, trade | 9,978 | ||
Accrued liabilities, lease operating | 0 | ||
Accrued liabilities, development capital | 0 | ||
Accrued liabilities, interest | (8,478) | ||
Accrued liabilities, production and other taxes | 0 | ||
Accrued liabilities, other | 12,297 | ||
Derivative liabilities | 0 | ||
Oil and natural gas revenue payable | 0 | ||
Long-term debt classified as current | (1,300,971) | ||
Other | (382) | ||
Total current liabilities | (1,287,556) | ||
Long-term debt, net of current portion | 926,281 | ||
Derivative liabilities | 0 | ||
Asset retirement obligations, net of current portion | 0 | ||
Other long-term liabilities | 0 | ||
Total liabilities not subject to compromise | (361,275) | ||
Liabilities subject to compromise | (479,911) | ||
Total Liabilities | (841,186) | ||
Stockholders’ equity/Members’ (deficit) | |||
Preferred units (Predecessor) | (335,444) | ||
Common units (Predecessor) | 763,217 | ||
Class B units (Predecessor) | (7,615) | ||
Common stock (Successor) | 20 | ||
Additional paid-in capital (Successor) | 305,035 | ||
Total VNR stockholders' equity/ members’ (deficit) | 725,213 | ||
Non-controlling interest in subsidiary | 0 | ||
Total stockholders' equity/members’ (deficit) | 725,213 | ||
Total liabilities and equity (deficit) | (115,973) | ||
Fresh-Start Adjustments | |||
Current assets | |||
Cash and cash equivalents | 0 | ||
Trade accounts receivable, net | (8,231) | ||
Derivative assets | 0 | ||
Restricted cash | 0 | ||
Other current assets | 416 | ||
Total current assets | (7,815) | ||
Oil and natural gas properties, at cost | (3,029,173) | ||
Accumulated depletion | 3,916,889 | ||
Oil and natural gas properties | 887,716 | ||
Other assets | |||
Goodwill | (253,370) | ||
Other assets | (18,109) | ||
Total assets | 608,422 | ||
Current liabilities | |||
Accounts payable, trade | 0 | ||
Accrued liabilities, lease operating | 0 | ||
Accrued liabilities, development capital | 0 | ||
Accrued liabilities, interest | 0 | ||
Accrued liabilities, production and other taxes | 0 | ||
Accrued liabilities, other | 0 | ||
Derivative liabilities | 0 | ||
Oil and natural gas revenue payable | (7,808) | ||
Long-term debt classified as current | 0 | ||
Other | (203) | ||
Total current liabilities | (8,011) | ||
Long-term debt, net of current portion | (183) | ||
Derivative liabilities | 0 | ||
Asset retirement obligations, net of current portion | (123,320) | ||
Other long-term liabilities | (37,237) | ||
Total liabilities not subject to compromise | (168,751) | ||
Liabilities subject to compromise | 0 | ||
Total Liabilities | (168,751) | ||
Stockholders’ equity/Members’ (deficit) | |||
Preferred units (Predecessor) | 0 | ||
Common units (Predecessor) | 579,632 | ||
Class B units (Predecessor) | 0 | ||
Common stock (Successor) | 0 | ||
Additional paid-in capital (Successor) | 201,888 | ||
Total VNR stockholders' equity/ members’ (deficit) | 781,520 | ||
Non-controlling interest in subsidiary | (4,347) | ||
Total stockholders' equity/members’ (deficit) | 777,173 | ||
Total liabilities and equity (deficit) | 608,422 | ||
Predecessor | |||
Current assets | |||
Cash and cash equivalents | 68,933 | ||
Trade accounts receivable, net | 64,253 | ||
Derivative assets | 3,236 | ||
Restricted cash | 102,556 | ||
Other current assets | 4,430 | ||
Total current assets | 243,408 | ||
Oil and natural gas properties, at cost | 4,635,867 | ||
Accumulated depletion | (3,916,889) | ||
Oil and natural gas properties | 718,978 | ||
Other assets | |||
Goodwill | 253,370 | ||
Other assets | 44,315 | ||
Total assets | 1,260,071 | ||
Current liabilities | |||
Accounts payable, trade | 8,444 | ||
Accrued liabilities, lease operating | 13,199 | ||
Accrued Liabilities, development capital | 8,928 | ||
Accrued liabilities, interest | 8,478 | ||
Accrued liabilities, production and other taxes | 23,494 | ||
Accrued liabilities, other | 20,933 | ||
Derivative liabilities | 12,987 | ||
Oil and natural gas revenue payable | 36,087 | ||
Long-term debt classified as current | 1,300,971 | ||
Other | 14,246 | ||
Total current liabilities | 1,447,767 | ||
Long-term debt, net of current portion | 12,647 | ||
Derivative liabilities | 15,143 | ||
Asset retirement obligations, net of current portion | 260,089 | ||
Other long-term liabilities | 37,683 | ||
Total liabilities not subject to compromise | 1,773,329 | ||
Liabilities subject to compromise | 479,911 | ||
Total Liabilities | 2,253,240 | ||
Stockholders’ equity/Members’ (deficit) | |||
Preferred units (Predecessor) | 335,444 | ||
Common units (Predecessor) | (1,342,849) | ||
Class B units (Predecessor) | 7,615 | ||
Common stock (Successor) | 0 | ||
Additional paid-in capital (Successor) | 0 | ||
Total VNR stockholders' equity/ members’ (deficit) | (999,790) | ||
Non-controlling interest in subsidiary | 6,621 | ||
Total stockholders' equity/members’ (deficit) | (993,169) | ||
Total liabilities and equity (deficit) | $ 1,260,071 | ||
Stockholders’ equity/Members’ (deficit) | |||
Additional paid-in capital (Successor) | $ 0 |
Fresh-Start Accounting - Change
Fresh-Start Accounting - Change In Cash and Cash Equivalents (Details) $ in Thousands | Jul. 31, 2017USD ($) |
Proceeds from equity investment from holders of Old Second Lien Notes | |
Fresh-Start Adjustment [Line Items] | |
Changes in cash and cash equivalents | $ 19,250 |
Proceeds from rights offering | |
Fresh-Start Adjustment [Line Items] | |
Changes in cash and cash equivalents | 255,750 |
Borrowings under the Successor's Term Loan | |
Fresh-Start Adjustment [Line Items] | |
Changes in cash and cash equivalents | 125,000 |
Removal of restriction on cash balance | |
Fresh-Start Adjustment [Line Items] | |
Changes in cash and cash equivalents | 102,556 |
Payment of holders of claims under the Predecessor Credit Facility | |
Fresh-Start Adjustment [Line Items] | |
Changes in cash and cash equivalents | (500,266) |
Payment of interest and fees under the Predecessor Credit Facility | |
Fresh-Start Adjustment [Line Items] | |
Changes in cash and cash equivalents | (3,390) |
Payment of Successor Credit Facility fees | |
Fresh-Start Adjustment [Line Items] | |
Changes in cash and cash equivalents | (9,300) |
Payment of professional fees | |
Fresh-Start Adjustment [Line Items] | |
Changes in cash and cash equivalents | (2,468) |
Funding of the general unsecured claims cash distribution pools | |
Fresh-Start Adjustment [Line Items] | |
Changes in cash and cash equivalents | (6,750) |
Funding of the professional fees escrow account | |
Fresh-Start Adjustment [Line Items] | |
Changes in cash and cash equivalents | (21,705) |
Reorganization Adjustments | |
Fresh-Start Adjustment [Line Items] | |
Changes in cash and cash equivalents | $ (41,323) |
Fresh-Start Accounting - Chan40
Fresh-Start Accounting - Change In Restricted Cash (Details) $ in Thousands | Jul. 31, 2017USD ($) |
Removal of restriction on cash balance | |
Fresh-Start Adjustment [Line Items] | |
Restricted cash | $ (102,556) |
Funding of the general unsecured claims cash distribution pools | |
Fresh-Start Adjustment [Line Items] | |
Restricted cash | 6,750 |
Funding of the professional fees escrow account | |
Fresh-Start Adjustment [Line Items] | |
Restricted cash | 21,705 |
Reorganization Adjustments | |
Fresh-Start Adjustment [Line Items] | |
Restricted cash | $ (74,101) |
Fresh-Start Accounting - Net In
Fresh-Start Accounting - Net Increase In Other Accrued Expenses (Details) $ in Thousands | Jul. 31, 2017USD ($) |
Recognition of payables for the professional fees escrow account | |
Fresh-Start Adjustment [Line Items] | |
Increase in other accrued expenses | $ 12,627 |
Write-off of accrued non cash compensation related to Phantom Units granted | |
Fresh-Start Adjustment [Line Items] | |
Increase in other accrued expenses | (330) |
Reorganization Adjustments | |
Fresh-Start Adjustment [Line Items] | |
Increase in other accrued expenses | $ 12,297 |
Fresh-Start Accounting - Settle
Fresh-Start Accounting - Settlement Of Liabilities Subject To Compromise (Details) $ in Thousands | Jul. 31, 2017USD ($) |
Fresh-Start Adjustment [Line Items] | |
Accounts payable and accrued expenses | $ 36,224 |
Accrued interest payable | 10,737 |
Debt | 432,950 |
Total liabilities subject to compromise | 479,911 |
Reinstatement of liability for the general unsecured claims | |
Fresh-Start Adjustment [Line Items] | |
Liabilities Subject to Compromise, Expense (Reversal of Expense) for Liabilities | (4,978) |
Reinstatement of liability for settlement of an unsecured claim | |
Fresh-Start Adjustment [Line Items] | |
Liabilities Subject to Compromise, Expense (Reversal of Expense) for Liabilities | (5,000) |
Issuance of common shares to holders of general unsecured claims | |
Fresh-Start Adjustment [Line Items] | |
Liabilities Subject to Compromise, Expense (Reversal of Expense) for Liabilities | (1,089) |
Issuance of common shares to holders of Senior Notes claims | |
Fresh-Start Adjustment [Line Items] | |
Liabilities Subject to Compromise, Expense (Reversal of Expense) for Liabilities | (16,715) |
Discharge of debt | |
Fresh-Start Adjustment [Line Items] | |
Gain on settlement of liabilities subject to compromise | $ 452,129 |
Fresh-Start Accounting - Chan43
Fresh-Start Accounting - Change in Members Deficit (Details) $ in Thousands | Jul. 31, 2017USD ($) |
Discharge of debt | |
Fresh-Start Adjustment [Line Items] | |
Increase (decrease) in equity | $ 452,129 |
Cancellation of Predecessor Preferred units | |
Fresh-Start Adjustment [Line Items] | |
Increase (decrease) in equity | 335,444 |
Cancellation of Predecessor Class B units | |
Fresh-Start Adjustment [Line Items] | |
Increase (decrease) in equity | 7,615 |
Write-off of deferred financing costs and debt discounts | |
Fresh-Start Adjustment [Line Items] | |
Increase (decrease) in equity | (4,917) |
Recognition of professional and success fees | |
Fresh-Start Adjustment [Line Items] | |
Increase (decrease) in equity | (14,968) |
Fair value of warrants issued to Predecessor unitholders | |
Fresh-Start Adjustment [Line Items] | |
Increase (decrease) in equity | (11,734) |
Fair value of shares issued to Predecessor unitholders | |
Fresh-Start Adjustment [Line Items] | |
Increase (decrease) in equity | (517) |
Terminated contracts | |
Fresh-Start Adjustment [Line Items] | |
Increase (decrease) in equity | 165 |
Net change in Predecessor Common units | |
Fresh-Start Adjustment [Line Items] | |
Increase (decrease) in equity | $ 763,217 |
Fresh-Start Accounting - Chan44
Fresh-Start Accounting - Change In Equity (Details) $ in Thousands | Jul. 31, 2017USD ($) |
Fresh-Start Adjustment [Line Items] | |
Par value of common stock | $ (20) |
Net increase in capital accounts | 305,035 |
Issuance of common stock to general unsecured creditors | |
Fresh-Start Adjustment [Line Items] | |
Total reorganization items, net | 1,089 |
Issuance of common stock to holders of Senior Notes claims | |
Fresh-Start Adjustment [Line Items] | |
Total reorganization items, net | 16,715 |
Issuance of common stock to Predecessor preferred unitholders | |
Fresh-Start Adjustment [Line Items] | |
Total reorganization items, net | 517 |
Issuance of common stock for the second lien equity investment | |
Fresh-Start Adjustment [Line Items] | |
Total reorganization items, net | 19,250 |
Issuance of common stock pursuant to the rights offering | |
Fresh-Start Adjustment [Line Items] | |
Total reorganization items, net | 255,750 |
Issuance of warrants | |
Fresh-Start Adjustment [Line Items] | |
Total reorganization items, net | 11,734 |
Change in additional paid-in capital | |
Fresh-Start Adjustment [Line Items] | |
Total reorganization items, net | $ 305,055 |
Fresh-Start Accounting - Adjust
Fresh-Start Accounting - Adjustments To Oil And Natural Gas Properties (Details) $ in Thousands | Jul. 31, 2017USD ($) |
Successor | |
Fresh-Start Adjustment [Line Items] | |
Proved properties | $ 1,511,083 |
Unproved properties | 95,611 |
Properties gross | 1,606,694 |
Less: accumulated depletion and amortization | 0 |
Properties net | 1,606,694 |
Predecessor | |
Fresh-Start Adjustment [Line Items] | |
Proved properties | 4,635,867 |
Unproved properties | 0 |
Properties gross | 4,635,867 |
Less: accumulated depletion and amortization | (3,916,889) |
Properties net | $ 718,978 |
Fresh-Start Accounting - Other
Fresh-Start Accounting - Other Property And Equipment (Details) $ in Thousands | Jul. 31, 2017USD ($) |
Successor | |
Fresh-Start Adjustment [Line Items] | |
Other PP&E gross | $ 6,138 |
Less: accumulated depreciation | 0 |
Other PP&E net | 6,138 |
Successor | Gas gathering assets | |
Fresh-Start Adjustment [Line Items] | |
Other PP&E gross | 4,196 |
Successor | Office equipment and furniture | |
Fresh-Start Adjustment [Line Items] | |
Other PP&E gross | 574 |
Successor | Buildings and leasehold improvements | |
Fresh-Start Adjustment [Line Items] | |
Other PP&E gross | 57 |
Successor | Vehicles | |
Fresh-Start Adjustment [Line Items] | |
Other PP&E gross | 1,311 |
Predecessor | |
Fresh-Start Adjustment [Line Items] | |
Other PP&E gross | 28,174 |
Less: accumulated depreciation | (13,657) |
Other PP&E net | 14,517 |
Predecessor | Gas gathering assets | |
Fresh-Start Adjustment [Line Items] | |
Other PP&E gross | 19,942 |
Predecessor | Office equipment and furniture | |
Fresh-Start Adjustment [Line Items] | |
Other PP&E gross | 5,847 |
Predecessor | Buildings and leasehold improvements | |
Fresh-Start Adjustment [Line Items] | |
Other PP&E gross | 836 |
Predecessor | Vehicles | |
Fresh-Start Adjustment [Line Items] | |
Other PP&E gross | $ 1,549 |
Fresh-Start Accounting - Reorga
Fresh-Start Accounting - Reorganization Items (Details) - USD ($) $ in Thousands | Jul. 31, 2017 | Sep. 30, 2017 |
Fresh-Start Adjustment [Line Items] | ||
Fresh-start accounting adjustments | $ 781,520 | |
Issuance of common shares and warrants | (214,140) | |
Legal and other professional fees | (58,482) | |
Recognition of additional unsecured claims | (31,346) | |
Write-off of deferred financing costs and debt discounts | (21,361) | |
Terminated contracts | 165 | |
Reorganization items | 908,485 | $ 900 |
Discharge of debt | ||
Fresh-Start Adjustment [Line Items] | ||
Recognition of gain on settlement of liabilities subject to compromise | $ 452,129 |
Impact of ASC 606 Adoption (Det
Impact of ASC 606 Adoption (Details) - Successor $ in Thousands | 2 Months Ended |
Sep. 30, 2017USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Oil sales | $ 27,303 |
Natural gas sales | 39,032 |
NGLs sales | 13,465 |
Oil, natural gas and NGLs sales | 79,800 |
Net gains (losses) on commodity derivative contracts | (32,352) |
Revenues | 47,448 |
Transportation, gathering, processing and compression | 8,044 |
Net income | (37,236) |
Under ASC 605 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
NGLs sales | 11,470 |
Accounting Standards Update 2014-09 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Revenues | 47,448 |
Transportation, gathering, processing and compression | 8,044 |
Accounting Standards Update 2014-09 [Member] | Increase/(Decrease) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Oil sales | 0 |
Natural gas sales | 6,049 |
NGLs sales | 1,995 |
Oil, natural gas and NGLs sales | 8,044 |
Net gains (losses) on commodity derivative contracts | 0 |
Revenues | 8,044 |
Transportation, gathering, processing and compression | 8,044 |
Net income | 0 |
Accounting Standards Update 2014-09 [Member] | Under ASC 605 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Natural gas sales | 32,983 |
Oil, natural gas and NGLs sales | 71,756 |
Revenues | 39,404 |
Transportation, gathering, processing and compression | $ 0 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Aug. 01, 2017 | Sep. 30, 2017 | Jul. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2016 | Jan. 01, 2020 | Jan. 01, 2019 | Jul. 01, 2018 | Feb. 01, 2017 | |||
Senior Secured Reserve-Based Credit Facility [Abstract] | ||||||||||||||||
Unrecorded Contractual Interest | $ 17,200 | |||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt instrument, interest rate, stated percentage | 9.00% | 9.00% | ||||||||||||||
Limit on unrestricted cash | $ 35,000 | |||||||||||||||
Lien on oil and gas properties, Percentage | 95.00% | |||||||||||||||
Debt Instrument, Covenant, Debt to EBITDA ratio | 475.00% | 400.00% | 425.00% | 450.00% | ||||||||||||
Asset coverage ratio | 125.00% | |||||||||||||||
Debt Instrument, Covenant, Current Ratio | 100.00% | |||||||||||||||
Claims, Holders of Old Second Lien Notes | $ 80,700 | |||||||||||||||
Percentage of aggregate principal debt representing holders who can declare the debt due immediately upon default | 25.00% | |||||||||||||||
Percentage of Principal Senior Notes than can be redeemed before February 15, 2020 | 35.00% | |||||||||||||||
Debt Instrument, Redemption Price, Percentage | 109.00% | |||||||||||||||
Percentage of Principal Amount of Senior Notes to remain outstanding on February 2020 | 65.00% | |||||||||||||||
Debt Instrument, Redemption Period, Number of days from equity offering | 180 days | |||||||||||||||
Debt Instrument, Redemption Price, Percentage, subsequent to equity offering | 100.00% | |||||||||||||||
Standstill period for Collateral Trustee to enforce rights or remedies | 180 days | |||||||||||||||
Line of Credit [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Variable interest rate | 4.74% | 4.74% | 3.11% | |||||||||||||
Interest rate description | [1] | Variable (3) | ||||||||||||||
Senior Secured Reserve-Based Credit Facility [Abstract] | ||||||||||||||||
Long-term Line of Credit, Deficiency | $ 119,900 | $ 119,900 | ||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt Instrument, Maturity Date | Apr. 16, 2018 | |||||||||||||||
Senior Notes due 2019 [Member] | ||||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt instrument, interest rate, stated percentage | 8.375% | |||||||||||||||
Senior Notes due 2020 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 8.00% | 8.00% | ||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt instrument, interest rate, stated percentage | 7.875% | [2] | 7.875% | [2] | 7.875% | 7.875% | ||||||||||
Lease Financing Obligations | ||||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt instrument, interest rate, stated percentage | 4.16% | 4.16% | 4.16% | |||||||||||||
Aggregate Cost, Early Buyout Option to Purchase equipment | $ 16,000 | $ 16,000 | ||||||||||||||
Debt Instrument, Maturity Date | Aug. 10, 2020 | [3] | Aug. 10, 2020 | |||||||||||||
Exit Revolving Credit Facility [Member] | ||||||||||||||||
Senior Secured Reserve-Based Credit Facility [Abstract] | ||||||||||||||||
Line of Credit Facility, Current Borrowing Capacity | $ 850,000 | |||||||||||||||
Debt amount outstanding | $ 850,000 | |||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.50% | |||||||||||||||
New Second Lien Notes Due 2024 [Member] | ||||||||||||||||
Senior Secured Reserve-Based Credit Facility [Abstract] | ||||||||||||||||
Debt amount outstanding | $ 80,700 | |||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt instrument, interest rate, stated percentage | 9.00% | |||||||||||||||
Standby Letters of Credit [Member] | Line of Credit [Member] | ||||||||||||||||
Senior Secured Reserve-Based Credit Facility [Abstract] | ||||||||||||||||
Line of Credit Facility, Current Borrowing Capacity | 200 | $ 200 | ||||||||||||||
Line of Credit [Member] | Line of Credit [Member] | ||||||||||||||||
Senior Secured Reserve-Based Credit Facility [Abstract] | ||||||||||||||||
Debt amount outstanding | $ 730,000 | $ 730,000 | ||||||||||||||
Senior Notes due 2019 [Member] | Senior Notes [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 21.45% | 21.45% | 21.45% | |||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt instrument, interest rate, stated percentage | 8.375% | [4] | 8.375% | [4] | 8.375% | |||||||||||
Debt Instrument, Maturity Date | Jun. 1, 2019 | Jun. 1, 2019 | ||||||||||||||
Senior Notes due 2020 [Member] | Senior Notes [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 8.00% | |||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt Instrument, Maturity Date | Apr. 1, 2020 | Apr. 1, 2020 | ||||||||||||||
Senior Notes due 2023 [Member] | Senior Notes [Member] | ||||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt instrument, interest rate, stated percentage | 7.00% | 7.00% | 7.00% | |||||||||||||
Debt Instrument, Maturity Date | Feb. 15, 2023 | Feb. 15, 2023 | ||||||||||||||
Base Rate [Member] | Exit Term Loan Facility [Member] | ||||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt instrument, interest rate, stated percentage | 6.50% | |||||||||||||||
Eurodollar [Member] | Exit Term Loan Facility [Member] | ||||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt instrument, interest rate, stated percentage | 7.50% | |||||||||||||||
Minimum | Base Rate [Member] | Exit Revolving Credit Facility [Member] | ||||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |||||||||||||||
Minimum | Eurodollar [Member] | Exit Revolving Credit Facility [Member] | ||||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.75% | |||||||||||||||
Maximum | Base Rate [Member] | Exit Revolving Credit Facility [Member] | ||||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.75% | |||||||||||||||
Maximum | Eurodollar [Member] | Exit Revolving Credit Facility [Member] | ||||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.75% | |||||||||||||||
Successor | ||||||||||||||||
Senior Secured Reserve-Based Credit Facility [Abstract] | ||||||||||||||||
Debt amount outstanding | $ 942,912 | $ 942,912 | ||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Gain (Loss) on Extinguishment of Debt | 0 | |||||||||||||||
Successor | Line of Credit [Member] | ||||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt Instrument, Maturity Date | Feb. 1, 2021 | |||||||||||||||
Successor | Senior Notes [Member] | ||||||||||||||||
Senior Secured Reserve-Based Credit Facility [Abstract] | ||||||||||||||||
Debt amount outstanding | 80,722 | $ 80,722 | ||||||||||||||
Successor | Lease Financing Obligations | ||||||||||||||||
Senior Secured Reserve-Based Credit Facility [Abstract] | ||||||||||||||||
Debt amount outstanding | $ 16,354 | $ 16,354 | ||||||||||||||
Successor | New Second Lien Notes Due 2024 [Member] | ||||||||||||||||
Senior Secured Reserve-Based Credit Facility [Abstract] | ||||||||||||||||
Debt amount outstanding | $ 80,700 | |||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt instrument, interest rate, stated percentage | 9.00% | |||||||||||||||
Successor | Successor Term Loan | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Variable interest rate | 8.74% | 8.74% | ||||||||||||||
Senior Secured Reserve-Based Credit Facility [Abstract] | ||||||||||||||||
Debt amount outstanding | $ 125,000 | $ 125,000 | ||||||||||||||
Successor | Line of Credit [Member] | Line of Credit [Member] | ||||||||||||||||
Senior Secured Reserve-Based Credit Facility [Abstract] | ||||||||||||||||
Debt amount outstanding | 730,000 | 730,000 | ||||||||||||||
Successor | Senior Notes due 2019 [Member] | Senior Notes [Member] | ||||||||||||||||
Senior Secured Reserve-Based Credit Facility [Abstract] | ||||||||||||||||
Debt amount outstanding | 0 | 0 | ||||||||||||||
Successor | Senior Notes due 2020 [Member] | Senior Notes [Member] | ||||||||||||||||
Senior Secured Reserve-Based Credit Facility [Abstract] | ||||||||||||||||
Debt amount outstanding | 0 | 0 | ||||||||||||||
Successor | Senior Notes due 2023 [Member] | Senior Notes [Member] | ||||||||||||||||
Senior Secured Reserve-Based Credit Facility [Abstract] | ||||||||||||||||
Debt amount outstanding | $ 0 | $ 0 | ||||||||||||||
Forecast | ||||||||||||||||
Senior Notes [Abstract] | ||||||||||||||||
Debt Instrument, Redemption Price, Percentage | 100.00% | 102.25% | 104.50% | 106.75% | ||||||||||||
[1] | Variable interest rate of 4.74% at September 30, 2017.(2)Variable interest rate of 8.74% at September 30, 2017.(3)Variable interest rate of 3.11% at December 31, 2016. | |||||||||||||||
[2] | Effective interest rate of 8.0% at December 31, 2016. | |||||||||||||||
[3] | The Lease Financing Obligations expire on August 10, 2020, except for certain obligations which expire on July 10, 2021. | |||||||||||||||
[4] | Effective interest rate of 21.45% at December 31, 2016. |
Debt (Financing Arrangements) (
Debt (Financing Arrangements) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Dec. 31, 2016 | Feb. 01, 2017 | |||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate, stated percentage | 9.00% | ||||
Line of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate description | [1] | Variable (3) | |||
Debt Instrument, Maturity Date | Apr. 16, 2018 | ||||
Variable interest rate | 4.74% | 3.11% | |||
Senior Notes due 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate, stated percentage | 7.875% | [2] | 7.875% | 7.875% | |
Debt Instrument, Interest Rate, Effective Percentage | 8.00% | ||||
Senior Notes due 2019 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate, stated percentage | 8.375% | ||||
Lease Financing Obligations | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate, stated percentage | 4.16% | 4.16% | |||
Debt Instrument, Maturity Date | Aug. 10, 2020 | [3] | Aug. 10, 2020 | ||
Line of Credit [Member] | Line of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt amount outstanding | $ 730,000 | ||||
Senior Notes due 2019 [Member] | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate, stated percentage | 8.375% | [4] | 8.375% | ||
Debt Instrument, Maturity Date | Jun. 1, 2019 | Jun. 1, 2019 | |||
Debt Instrument, Interest Rate, Effective Percentage | 21.45% | 21.45% | |||
Senior Notes due 2020 [Member] | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Maturity Date | Apr. 1, 2020 | Apr. 1, 2020 | |||
Debt Instrument, Interest Rate, Effective Percentage | 8.00% | ||||
Senior Notes due 2023 [Member] | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate, stated percentage | 7.00% | 7.00% | |||
Debt Instrument, Maturity Date | Feb. 15, 2023 | Feb. 15, 2023 | |||
Successor | |||||
Debt Instrument [Line Items] | |||||
Debt amount outstanding | $ 942,912 | ||||
Unamortized deferred financing costs | (9,164) | ||||
Long-term debt classified as current | 0 | ||||
Current portion of Lease Financing Obligation | (4,688) | ||||
Total long-term debt | $ 938,224 | ||||
Successor | Line of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Maturity Date | Feb. 1, 2021 | ||||
Successor | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt amount outstanding | $ 80,722 | ||||
Unamortized discount on Senior Notes | 0 | ||||
Successor | Lease Financing Obligations | |||||
Debt Instrument [Line Items] | |||||
Debt amount outstanding | 16,354 | ||||
Successor | Line of Credit [Member] | Line of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt amount outstanding | 730,000 | ||||
Successor | Senior Notes due 2019 [Member] | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt amount outstanding | 0 | ||||
Successor | Senior Notes due 2020 [Member] | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt amount outstanding | 0 | ||||
Successor | Senior Notes due 2023 [Member] | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt amount outstanding | $ 0 | ||||
Predecessor | |||||
Debt Instrument [Line Items] | |||||
Debt amount outstanding | $ 1,773,512 | ||||
Unamortized deferred financing costs | (11,072) | ||||
Long-term debt classified as current | (1,753,345) | ||||
Current portion of Lease Financing Obligation | (4,692) | ||||
Total long-term debt | 15,475 | ||||
Predecessor | Line of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Maturity Date | Apr. 16, 2018 | ||||
Predecessor | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt amount outstanding | 0 | ||||
Unamortized discount on Senior Notes | (13,167) | ||||
Predecessor | Lease Financing Obligations | |||||
Debt Instrument [Line Items] | |||||
Debt amount outstanding | 20,167 | ||||
Predecessor | Line of Credit [Member] | Line of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt amount outstanding | 1,269,000 | ||||
Predecessor | Senior Notes due 2019 [Member] | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt amount outstanding | 51,120 | ||||
Predecessor | Senior Notes due 2020 [Member] | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt amount outstanding | 381,830 | ||||
Predecessor | Senior Notes due 2023 [Member] | Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt amount outstanding | $ 75,634 | ||||
[1] | Variable interest rate of 4.74% at September 30, 2017.(2)Variable interest rate of 8.74% at September 30, 2017.(3)Variable interest rate of 3.11% at December 31, 2016. | ||||
[2] | Effective interest rate of 8.0% at December 31, 2016. | ||||
[3] | The Lease Financing Obligations expire on August 10, 2020, except for certain obligations which expire on July 10, 2021. | ||||
[4] | Effective interest rate of 21.45% at December 31, 2016. |
Debt (Acceleration of Debt Obli
Debt (Acceleration of Debt Obligations) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Contractual Interest Expense on Prepetition Liabilities Not Recognized in Statement of Operations | $ 8.6 | $ 14.3 |
Debt (Amount of Required Paymen
Debt (Amount of Required Payments under the Term Loan) (Details) - Successor Term Loan | Sep. 30, 2017USD ($) |
Debt Instrument [Line Items] | |
Repayment, percentage of the original principal amount for 2018 - 2020 | 0.25% |
2,018 | $ 1,250 |
2,019 | 1,250 |
2,020 | 1,250 |
2021 through Maturity date | $ 121,250 |
Price and Interest Rate Risk 53
Price and Interest Rate Risk Management Activities (Details) | Sep. 30, 2017MMBTU$ / MMBTU$ / bblbbl |
Natural Gas [Member] | Contract Period August 1 2017 to December 31 2017 [Member] | Fixed-Price Swap [Member] | |
Derivative [Line Items] | |
Portion of Future Gas Production Being Hedged | MMBTU | 18,400,000 |
Derivative, Swap Type, Average Fixed Price | $ / MMBTU | 3.11 |
Natural Gas [Member] | Contract Period January 1 2018 to December 31 2018 [Member] | Fixed-Price Swap [Member] | |
Derivative [Line Items] | |
Portion of Future Gas Production Being Hedged | MMBTU | 70,242,000 |
Derivative, Swap Type, Average Fixed Price | $ / MMBTU | 3 |
Natural Gas [Member] | Contract Period January 1 2019 to December 31 2019 [Member] | Fixed-Price Swap [Member] | |
Derivative [Line Items] | |
Portion of Future Gas Production Being Hedged | MMBTU | 52,539,000 |
Derivative, Swap Type, Average Fixed Price | $ / MMBTU | 2.79 |
Natural Gas [Member] | Contract Period January 1 2019 to December 31 2019 [Member] | Collars [Member] | |
Derivative [Line Items] | |
Portion of Future Gas Production Being Hedged | MMBTU | 4,125,000 |
Derivative, Floor Price | $ / MMBTU | 2.60 |
Derivative, Cap Price | $ / MMBTU | 3 |
Natural Gas [Member] | Contract Period January 1 2020 to December 31 2020 [Member] | Fixed-Price Swap [Member] | |
Derivative [Line Items] | |
Portion of Future Gas Production Being Hedged | MMBTU | 47,227,500 |
Derivative, Swap Type, Average Fixed Price | $ / MMBTU | 2.75 |
Natural Gas [Member] | Contract Period January 1 2020 to December 31 2020 [Member] | Collars [Member] | |
Derivative [Line Items] | |
Portion of Future Gas Production Being Hedged | MMBTU | 5,490,000 |
Derivative, Floor Price | $ / MMBTU | 2.60 |
Derivative, Cap Price | $ / MMBTU | 3 |
Oil [Member] | Contract Period August 1 2017 to December 31 2017 [Member] | Fixed-Price Swap [Member] | |
Derivative [Line Items] | |
Portion of Future Oil and Gas Production Being Hedged | bbl | 818,900 |
Derivative, Swap Type, Average Fixed Price | 45.20 |
Oil [Member] | Contract Period January 1 2018 to December 31 2018 [Member] | Fixed-Price Swap [Member] | |
Derivative [Line Items] | |
Portion of Future Oil and Gas Production Being Hedged | bbl | 3,059,200 |
Derivative, Swap Type, Average Fixed Price | 46.47 |
Oil [Member] | Contract Period January 1 2019 to December 31 2019 [Member] | Fixed-Price Swap [Member] | |
Derivative [Line Items] | |
Portion of Future Oil and Gas Production Being Hedged | bbl | 1,858,200 |
Derivative, Swap Type, Average Fixed Price | 48.50 |
Oil [Member] | Contract Period January 1 2019 to December 31 2019 [Member] | Collars [Member] | |
Derivative [Line Items] | |
Portion of Future Oil and Gas Production Being Hedged | bbl | 575,730 |
Derivative, Floor Price | 43.81 |
Derivative, Cap Price | 54.04 |
Oil [Member] | Contract Period January 1 2020 to December 31 2020 [Member] | Fixed-Price Swap [Member] | |
Derivative [Line Items] | |
Portion of Future Oil and Gas Production Being Hedged | bbl | 1,393,800 |
Derivative, Swap Type, Average Fixed Price | 49.53 |
Oil [Member] | Contract Period January 1 2020 to December 31 2020 [Member] | Collars [Member] | |
Derivative [Line Items] | |
Portion of Future Oil and Gas Production Being Hedged | bbl | 659,340 |
Derivative, Floor Price | 44.17 |
Derivative, Cap Price | 55 |
Natural Gas Liquids [Member] | Contract Period August 1 2017 to December 31 2017 [Member] | Fixed-Price Swap [Member] | |
Derivative [Line Items] | |
Portion of Future Oil and Gas Production Being Hedged | bbl | 15,842,400 |
Derivative, Swap Type, Average Fixed Price | 0.63 |
Natural Gas Liquids [Member] | Contract Period January 1 2018 to December 31 2018 [Member] | Fixed-Price Swap [Member] | |
Derivative [Line Items] | |
Portion of Future Oil and Gas Production Being Hedged | bbl | 56,721,000 |
Derivative, Swap Type, Average Fixed Price | 0.60 |
Natural Gas Liquids [Member] | Contract Period January 1 2019 to December 31 2019 [Member] | Fixed-Price Swap [Member] | |
Derivative [Line Items] | |
Portion of Future Oil and Gas Production Being Hedged | bbl | 0 |
Derivative, Swap Type, Average Fixed Price | 0 |
Natural Gas Liquids [Member] | Contract Period January 1 2020 to December 31 2020 [Member] | Fixed-Price Swap [Member] | |
Derivative [Line Items] | |
Portion of Future Oil and Gas Production Being Hedged | bbl | 0 |
Derivative, Swap Type, Average Fixed Price | 0 |
Price and Interest Rate Risk 54
Price and Interest Rate Risk Management Activities - Balance Sheet Presentation (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Offsetting Derivative Assets [Abstract] | ||
Gross amounts of recognized assets | $ 3,650 | |
Gross amounts offset in the consolidated balance sheets | 3,396 | |
Net Amounts Presented in the Consolidated Balance Sheets | 254 | |
Offsetting Derivative Liabilities [Abstract] | ||
Gross amounts of recognized liabilities | $ (125) | |
Gross amounts offset in the consolidated balance sheets | 3,397 | |
Net Amounts Presented in the Consolidated Balance Sheets | (55,175) | |
Commodity Contract [Member] | ||
Offsetting Derivative Assets [Abstract] | ||
Gross amounts of recognized assets | 3,650 | |
Gross amounts offset in the consolidated balance sheets | 3,396 | |
Net Amounts Presented in the Consolidated Balance Sheets | 254 | |
Offsetting Derivative Liabilities [Abstract] | ||
Gross amounts offset in the consolidated balance sheets | 3,397 | |
Net Amounts Presented in the Consolidated Balance Sheets | (55,175) | |
Interest Rate Contract | ||
Offsetting Derivative Liabilities [Abstract] | ||
Gross amounts of recognized liabilities | $ (58,572) | $ (125) |
Price and Interest Rate Risk 55
Price and Interest Rate Risk Management Activities - Change in Fair Value of Derivatives (Details) - USD ($) $ in Thousands | 2 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Jul. 31, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Predecessor | ||||
Fair Value, Net Derivative Asset (Liability), Reconciliation [Roll Forward] | ||||
Derivative asset at beginning of period, net | $ (24,895) | $ (125) | $ 316,691 | $ 316,691 |
Net premiums and fees received for derivative contracts | 0 | (2,444) | ||
Net losses on commodity and interest rate derivative contracts | (24,858) | (21,813) | (46,939) | |
Cash settlement received on matured commodity derivative contracts | (7) | (198,104) | (226,876) | |
Cash settlements paid on matured interest rate derivative contracts | 95 | $ 6,770 | 13,398 | |
Termination of derivative contracts | 0 | (53,955) | ||
Derivative asset at end of period, net | (24,895) | $ (125) | ||
Successor | ||||
Fair Value, Net Derivative Asset (Liability), Reconciliation [Roll Forward] | ||||
Derivative asset at beginning of period, net | (24,895) | |||
Net premiums and fees received for derivative contracts | 0 | |||
Net losses on commodity and interest rate derivative contracts | (32,352) | |||
Cash settlement received on matured commodity derivative contracts | 2,326 | |||
Cash settlements paid on matured interest rate derivative contracts | 0 | |||
Termination of derivative contracts | 0 | |||
Derivative asset at end of period, net | $ (54,921) | $ (24,895) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Thousands | 7 Months Ended | ||
Jul. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Change in estimate | $ (123,320) | ||
Number of Interest Rate Derivatives Held by entity at reporting date | 1 | ||
Fair Value Measured on a Recurring Basis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Price Risk Derivative Assets, at Fair Value | $ 254 | ||
Derivative Asset | 254 | ||
Liabilities: | |||
Commodity derivative contracts | (55,175) | ||
Interest rate derivative contracts | $ (125) | ||
Total derivative instruments | (55,175) | (125) | |
Fair Value Measured on a Recurring Basis | Fair Value Measurements Using Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Price Risk Derivative Assets, at Fair Value | 254 | ||
Derivative Asset | 254 | ||
Liabilities: | |||
Commodity derivative contracts | (55,175) | ||
Interest rate derivative contracts | (125) | ||
Total derivative instruments | $ (55,175) | $ (125) |
Fair Value Measurements - Unobs
Fair Value Measurements - Unobservable Inputs Reconciliation (Details) - Fair Value Measurements Using Level 3 $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Unobservable inputs reconciliation | |
Unobservable inputs, beginning of period | $ (5,933) |
Total gains | 9,381 |
Settlements | (4,608) |
Unobservable inputs, end of period | (1,160) |
Change in fair value included in earnings related to derivatives still held as of September 30, | $ 223 |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 2 Months Ended | 7 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Jul. 31, 2017 | Dec. 31, 2016 | |
Changes in asset retirement obligations [Abstract] | |||
Change in estimate | $ (123,320) | ||
Predecessor | |||
Changes in asset retirement obligations [Abstract] | |||
Asset retirement obligations as of December 31, 2016 (Predecessor) | $ 268,489 | $ 272,436 | |
Liabilities added during the current period | 555 | ||
Accretion expense | 6,795 | ||
Retirements | (1,161) | ||
Liabilities related to assets divested | (10,107) | ||
Change in estimate | (29) | ||
Asset retirement obligation at July 31, 2017 (Predecessor) | 268,489 | ||
Long-term asset retirement obligation at September 30, 2017 (Successor) | $ 264,552 | ||
Future inflation factor | 1.80% | ||
Credit-adjusted risk-free interest rate | 6.40% | ||
Successor | |||
Changes in asset retirement obligations [Abstract] | |||
Asset retirement obligations as of December 31, 2016 (Predecessor) | $ 145,169 | ||
Liabilities added during the current period | 206 | ||
Accretion expense | 1,478 | ||
Retirements | (317) | ||
Asset retirement obligation at July 31, 2017 (Predecessor) | 146,536 | $ 145,169 | |
Less: current obligations | (6,457) | ||
Long-term asset retirement obligation at September 30, 2017 (Successor) | $ 140,079 |
Commitments and Contingencies -
Commitments and Contingencies - Transportation Demand Charges (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Gross future minimum transportation demand | |
October 1, 2017 - December 31, 2017 | $ 356 |
Due 2,018 | 1,009 |
Due 2,019 | 821 |
Due 2,020 | 410 |
Total | $ 2,596 |
Minimum | |
Oil and Gas Delivery Commitments and Contracts | |
Oil and Gas Delivery Commitments and Contracts, Length of Contract | 1 month |
Maximum | |
Oil and Gas Delivery Commitments and Contracts | |
Oil and Gas Delivery Commitments and Contracts, Length of Contract | 3 years |
Stockholders' Equity (Members60
Stockholders' Equity (Members' Deficit) - Cancellation of Units and Issuance of Common Stock (Details) $ in Thousands | Jul. 31, 2017USD ($)shares |
Equity [Abstract] | |
Percentage of outstanding shares of Common Stock to holders of outstanding Preferred Units immediately prior to the Effective Date | 3.00% |
New common stock issued pro rata to holders of claims arising under the Senior Notes | 678,464 |
New common stock issued pro rata to holders of the Old Second Lien Notes | 1,283,333 |
Full committed investment amount in exchange to holders of Old Second Lien Notes | $ | $ 19,250 |
New common stock issued to participants in the rights offering | 678,405 |
New common stock issued to participants in accredited investor rights offering | 7,846,595 |
New common stock issued to commitment parties in respect of the premium due | 1,023,000 |
New common stock issued to commitment parties | 8,525,000 |
New common stock, reflecting shares purchased | 1,482,021 |
New common stock issued to holders of Old Vanguard's preferred units | 20,983 |
Stockholders' Equity (Members61
Stockholders' Equity (Members' Deficit) - Warrant Agreement (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 01, 2017 | Sep. 30, 2017 | Jul. 18, 2017 |
Class of Warrant or Right [Line Items] | |||
Portion Of Enterprise Value Allocated To Warrants, Amount | $ 11.7 | ||
Series A Preferred Units | |||
Class of Warrant or Right [Line Items] | |||
Preferred Unit, Distribution Rate, Percentage | 7.875% | 7.875% | |
Series B Preferred Unit | |||
Class of Warrant or Right [Line Items] | |||
Preferred Unit, Distribution Rate, Percentage | 7.625% | 7.625% | |
Series C Preferred Units | |||
Class of Warrant or Right [Line Items] | |||
Preferred Unit, Distribution Rate, Percentage | 7.75% | 7.75% | |
VNR Preferred Unit New Warrant [Member] | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 621,649 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 44.25 | $ 44.25 | |
VNR Common Unit New Warrant [Member] | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 640,876 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 61.45 | $ 61.45 |
Stockholders' Equity (Members62
Stockholders' Equity (Members' Deficit) - Management Incentive Plan (Details) | Aug. 22, 2017shares |
Management Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,233,333 |
Stockholders' Equity (Members63
Stockholders' Equity (Members' Deficit) - Earning Per Share/Unit (Details) - shares shares in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended |
Jul. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Jul. 31, 2017 | Sep. 30, 2016 | |
Warrant | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants | 1.3 | ||||
Phantom Share Units (PSUs) | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 13.5 | 2.6 | 13.5 | 2.6 |
Unit-Based Compensation (Detail
Unit-Based Compensation (Details) shares in Thousands | Jan. 01, 2018USD ($) | Aug. 01, 2017USD ($)miles | Sep. 30, 2017shares | Sep. 30, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Period following change of control executives receive compensation if terminated without cause or resigns for good reason | 12 months | |||
Period executives to receive compensation following change of control and subsequent termination without cause or resigns for good reason | 10 days | |||
Period executives to receive lump sum compensation following change of control and subsequent termination without cause ore resigns for good reason | 60 days | |||
Executive annual base salary and bonus multiplier, Basis for lump sum payment to executives following change of control and subsequent termination without cause or resignation for good reason | 2 | |||
Period executives to receive severance payments following change of control and subsequent termination without cause ore resigns for good reason | 60 days | |||
Executive annual base salary and bonus multiplier, Basis for severance payment to executives following change of control and subsequent termination without cause or resignation for good reason | 2.5 | |||
Cure period for breach of executive employment agreement | 10 days | |||
Employment agreement, terms, maximum number of miles for relocation of place of business | miles | 50 | |||
Period following Effective Date initial grants to be made under the Management Incentive Plan | 90 days | |||
Number of consecutive days within disability period as defined in the executive employment agreement | 180 days | |||
Disability period as defined in the executive employment agreement | 12 days | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 33.33% | |||
Phantom Share Units (PSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 33.33% | |||
2017 Management Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in units) | shares | 0 | |||
Mr. Smith | Executive Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual Base Salary per executive employment agreement | $ 700,000 | $ 650,000 | ||
Scott Sloan | Executive Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual Base Salary per executive employment agreement | 510,000 | |||
Britt Pence | Executive Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Annual Base Salary per executive employment agreement | $ 460,000 | $ 450,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 2 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | 35.00% |