Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 16, 2019 | |
Document Information [Line Items] | ||
Entity Registrant Name | Grizzly Energy, LLC | |
Entity Central Index Key | 0001384072 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Common Class C | ||
Document Information [Line Items] | ||
Entity Common Shares, Shares Outstanding | 100,000 | |
Series A Preferred Stock | ||
Document Information [Line Items] | ||
Entity Common Shares, Shares Outstanding | 45,738,661 | |
Series B Preferred Stock | ||
Document Information [Line Items] | ||
Entity Common Shares, Shares Outstanding | 861,252 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | ||||
Net losses on commodity derivative contracts | $ (9,063) | $ (45,332) | $ (70,202) | $ (63,917) |
Total revenues and losses on commodity derivative contracts | 70,921 | 66,381 | 118,890 | 171,071 |
Production: | ||||
Lease operating expenses | 29,035 | 36,763 | 55,282 | 67,758 |
Production and other taxes | 7,833 | 7,971 | 17,656 | 17,752 |
Depreciation, depletion, amortization, and accretion | 39,044 | 38,711 | 74,758 | 78,750 |
Impairment of oil and natural gas properties | 323,188 | 7,552 | 323,626 | 22,153 |
Exploration expense | 275 | 430 | 476 | 1,746 |
Selling, general and administrative expenses | 9,238 | 11,108 | 21,795 | 23,844 |
Total costs and expenses | 417,097 | 112,303 | 511,599 | 233,273 |
Loss from operations | (346,176) | (45,922) | (392,709) | (62,202) |
Other income (expense): | ||||
Interest expense (excludes contractual interest expense of $15.7 million for each of the three and six months ended June 30, 2019) | (1,680) | (15,870) | (18,655) | (30,623) |
Net gain (loss) on divestitures of oil and natural gas properties | 0 | 4,900 | (458) | 4,900 |
Other | 497 | (175) | 586 | (26) |
Total other expense, net | (1,183) | (11,145) | (18,527) | (25,749) |
Loss before reorganization items | (347,359) | (57,067) | (411,236) | (87,951) |
Reorganization items (Note 2) | (24,743) | (610) | (43,131) | (2,317) |
Net loss | (372,102) | (57,677) | (454,367) | (90,268) |
Less: Net income attributable to non-controlling interests | 0 | (96) | 0 | (189) |
Net loss attributable to Common stockholders | $ (372,102) | $ (57,773) | $ (454,367) | $ (90,457) |
Net income (loss) per share/unit – basic and diluted (USD per share) | $ (18.49) | $ (2.87) | $ (22.58) | $ (4.50) |
Common Stock | ||||
Weighted average Common shares outstanding | ||||
Weighted average Common shares/units outstanding – basic and diluted (in shares) | 20,124 | 20,100 | 20,124 | 20,100 |
Oil sales | ||||
Revenues: | ||||
Oil, natural gas and NGLs sales | $ 37,150 | $ 46,503 | $ 69,897 | $ 92,614 |
Natural gas sales | ||||
Revenues: | ||||
Oil, natural gas and NGLs sales | 29,132 | 42,623 | 91,446 | 97,890 |
NGLs sales | ||||
Revenues: | ||||
Oil, natural gas and NGLs sales | 13,702 | 22,587 | 27,749 | 44,484 |
Oil, natural gas and NGLs sales | ||||
Revenues: | ||||
Oil, natural gas and NGLs sales | 79,984 | 111,713 | 189,092 | 234,988 |
Transportation, gathering, processing and compression | ||||
Production: | ||||
Transportation, gathering, processing and compression | $ 8,484 | $ 9,768 | $ 18,006 | $ 21,270 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||
Interest Expense | $ 15.7 | $ 15.7 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 44,782 | $ 33,538 |
Trade accounts receivable, net | 42,892 | 62,073 |
Derivative assets | 0 | 6,287 |
Restricted cash | 4,449 | 4,450 |
Prepaid drilling costs | 4,916 | 12,476 |
Other current assets | 9,770 | 5,663 |
Total current assets | 106,809 | 124,487 |
Oil and natural gas properties | ||
Proved properties | 1,574,565 | 1,567,903 |
Unproved properties | 81,215 | 81,597 |
Oil and natural gas properties, gross - successful effort method | 1,655,780 | 1,649,500 |
Accumulated depletion, amortization and impairment | (661,137) | (269,972) |
Oil and natural gas properties, net – successful efforts | 994,643 | 1,379,528 |
Other assets | ||
Lease assets | 13,661 | |
Derivative assets | 0 | 6,766 |
Other assets | 16,422 | 9,321 |
Total assets | 1,131,535 | 1,520,102 |
Accounts payable: | ||
Trade | 4,476 | 29,709 |
Accrued liabilities: | ||
Lease operating | 10,628 | 13,140 |
Developmental capital | 3,298 | 6,937 |
Interest | 330 | 4,999 |
Production and other taxes | 23,358 | 23,658 |
Other | 23,371 | 12,175 |
Derivative liabilities | 0 | 6,483 |
Oil and natural gas revenue payable | 19,969 | 35,802 |
Long-term debt classified as current | 0 | 879,181 |
Short-term debt | 20,000 | 0 |
Other current liabilities | 11,122 | 9,091 |
Total current liabilities | 116,552 | 1,021,175 |
Long-term debt, net of current portion (Note 5) | 0 | 5,446 |
Asset retirement obligations | 141,019 | 139,433 |
Other long-term liabilities | 8,020 | 523 |
Total liabilities not subject to compromise | 265,591 | 1,166,577 |
Liabilities subject to compromise (Note 2) | 965,605 | 0 |
Total liabilities | 1,231,196 | 1,166,577 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity (deficit) (Note 11) | ||
Common stock ($0.001 par value, 50,000,000 shares authorized; 20,124,081 and 20,124,080 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively) | 20 | 20 |
Additional paid-in capital | 510,067 | 508,886 |
Accumulated deficit | (609,748) | (155,381) |
Total stockholders’ equity (deficit) | (99,661) | 353,525 |
Total liabilities and equity (deficit) | $ 1,131,535 | $ 1,520,102 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (shares) | 50,000,000 | 50,000,000 |
Common stock, issued (shares) | 20,124,081 | 20,124,080 |
Common stock, outstanding (shares) | 20,124,081 | 20,124,080 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Non-controlling Interest |
Beginning balance (shares) at Dec. 31, 2017 | 20,100,000 | ||||
Beginning balance at Dec. 31, 2017 | $ 397,528 | $ 20 | $ 506,640 | $ (111,410) | $ 2,278 |
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | (90,268) | (90,457) | 189 | ||
Share-based compensation | 1,075 | 1,075 | |||
Potato Hills cash distribution to non-controlling interest | (427) | (427) | |||
Ending balance (shares) at Jun. 30, 2018 | 20,100,000 | ||||
Ending balance at Jun. 30, 2018 | 307,908 | $ 20 | 507,715 | (201,867) | 2,040 |
Beginning balance (shares) at Mar. 31, 2018 | 20,100,000 | ||||
Beginning balance at Mar. 31, 2018 | 365,256 | $ 20 | 507,136 | (144,094) | 2,194 |
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | (57,677) | (57,773) | 96 | ||
Share-based compensation | 579 | 579 | |||
Potato Hills cash distribution to non-controlling interest | (250) | (250) | |||
Ending balance (shares) at Jun. 30, 2018 | 20,100,000 | ||||
Ending balance at Jun. 30, 2018 | $ 307,908 | $ 20 | 507,715 | (201,867) | $ 2,040 |
Beginning balance (shares) at Dec. 31, 2018 | 20,124,080 | 20,124,000 | |||
Beginning balance at Dec. 31, 2018 | $ 353,525 | $ 20 | 508,886 | (155,381) | |
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | (454,367) | (454,367) | |||
Share-based compensation | $ 1,181 | 1,181 | |||
Ending balance (shares) at Jun. 30, 2019 | 20,124,081 | 20,124,000 | |||
Ending balance at Jun. 30, 2019 | $ (99,661) | $ 20 | 510,067 | (609,748) | |
Beginning balance (shares) at Mar. 31, 2019 | 20,124,000 | ||||
Beginning balance at Mar. 31, 2019 | 271,851 | $ 20 | 509,477 | (237,646) | |
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | (372,102) | (372,102) | |||
Share-based compensation | $ 590 | 590 | |||
Ending balance (shares) at Jun. 30, 2019 | 20,124,081 | 20,124,000 | |||
Ending balance at Jun. 30, 2019 | $ (99,661) | $ 20 | $ 510,067 | $ (609,748) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Operating activities | |||||||||
Net loss | $ (372,102) | $ (57,677) | $ (454,367) | $ (90,268) | |||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||
Depreciation, depletion, amortization, and accretion | 39,044 | 38,711 | 74,758 | 78,750 | |||||
Impairment of oil and natural gas properties | 323,188 | 7,552 | 323,626 | 22,153 | |||||
Amortization of deferred financing costs | 841 | 1,361 | |||||||
Share-based compensation | 1,181 | 1,075 | |||||||
Net losses on commodity derivative contracts | 70,202 | 63,917 | |||||||
Cash settlements paid on matured commodity derivative contracts | (9,762) | (27,139) | $ (80,266) | ||||||
Net (gain) loss on divestiture of oil and natural gas properties | 0 | (4,900) | 458 | (4,900) | |||||
Non-cash reorganization items (Note 2) | 20,365 | 0 | |||||||
Changes in operating assets and liabilities: | |||||||||
Trade accounts receivable | 18,723 | 14,124 | |||||||
Other current assets | (4,158) | (1,357) | |||||||
Accounts payable and oil and natural gas revenue payable | (24,051) | (136) | |||||||
Accrued expenses and other current liabilities | (2,666) | (6,598) | |||||||
Other assets | (7,291) | 126 | |||||||
Net cash provided by operating activities | 7,859 | 51,108 | |||||||
Investing activities | |||||||||
Additions to property and equipment | (39) | (94) | |||||||
Additions to oil and natural gas properties | (6,801) | (42,637) | |||||||
Deposits and prepayments of oil and natural gas properties | (7,086) | (49,256) | |||||||
Proceeds from the sale of oil and natural gas properties | 4,461 | 59,876 | |||||||
Net cash used in investing activities | (9,465) | (32,111) | |||||||
Financing activities | |||||||||
Proceeds from long-term debt | 0 | 90,000 | |||||||
Repayment of long-term debt | (7,145) | (104,702) | |||||||
Proceeds from debtor-in-possession financing | 20,000 | 0 | |||||||
Potato Hills distribution to non-controlling interest | 0 | (427) | |||||||
Financing fees | (6) | (172) | |||||||
Net cash provided by (used in) financing activities | 12,849 | (15,301) | |||||||
Net increase in cash, cash equivalents and restricted cash | 11,243 | 3,696 | |||||||
Cash, cash equivalents and restricted cash, beginning of period | 37,988 | 10,017 | 10,017 | ||||||
Cash, cash equivalents and restricted cash, end of period | 49,231 | 13,713 | 49,231 | 13,713 | 37,988 | ||||
Supplemental cash flow information: | |||||||||
Cash paid for interest | 9,937 | 29,988 | |||||||
Non-cash financing and investing activities: | |||||||||
Lease assets obtained in exchange for lease liabilities | 182 | 0 | |||||||
Asset retirement obligations, net | 251 | 12,294 | |||||||
Reconciliation of Cash and Cash Equivalents and Restricted Cash | |||||||||
Cash and cash equivalents | $ 44,782 | $ 33,538 | $ 7,502 | $ 2,762 | |||||
Restricted cash | 4,449 | 4,450 | 6,211 | 7,255 | |||||
Cash and cash equivalents and restricted cash at end of period | $ 49,231 | $ 13,713 | $ 37,988 | $ 10,017 | $ 10,017 | $ 49,231 | $ 37,988 | $ 13,713 | $ 10,017 |
General
General | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General References to the “Company,” refer to Grizzly Energy, LLC and its consolidated subsidiaries as a whole or an individual basis. References to “Vanguard” refer to the Company during the period prior to the Effective Date while references to “Grizzly” refer to the Company during the period following the Effective Date. Description of the Business We are an exploration and production company engaged in the production and development of oil and natural gas properties in the United States. We are currently focused on adding value by efficiently operating our producing assets and, in certain areas, applying modern drilling and completion technologies in order to fully assess and realize potential development upside. Our primary business objective is to maintain reserves, production and cash flow in a capital efficient manner while identifying opportunities to return cash to stakeholders. Through our operating subsidiaries, as of June 30, 2019 , we own properties and oil and natural gas reserves primarily located in nine operating areas: • the Green River Basin in Wyoming; • the Piceance Basin in Colorado; • the Permian Basin in West Texas and New Mexico; • the Arkoma Basin in Oklahoma; • the Gulf Coast Basin in Texas, Louisiana and Alabama; • the Big Horn Basin in Wyoming and Montana; • the Anadarko Basin in Oklahoma and North Texas; • the Wind River Basin in Wyoming; and • the Powder River Basin in Wyoming. On March 31, 2019 (the “Petition Date”), the Company and its subsidiaries (such subsidiaries, together with the Company, the “Debtors”) filed voluntary petitions for relief (collectively, the “Bankruptcy Petitions” and, the cases commenced thereby, the “Chapter 11 Cases”) under Chapter 11 of title 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”). The Chapter 11 Cases were jointly administered under the caption “In re Vanguard Natural Resources, Inc., et al.” On July 9, 2019, the Bankruptcy Court entered an order confirming the Amended Joint Plan of Reorganization (as Modified) of Vanguard Natural Resources, Inc. and its Debtor Affiliates (the “Plan”) and on July 16, 2019, the Company consummated the Plan and emerged from the Chapter 11 Cases. As part of the transactions undertaken pursuant to the Plan, Vanguard was converted from a Delaware corporation to a Delaware limited liability company and renamed Grizzly Energy, LLC (“Grizzly”). See Note 2 for a discussion of the Chapter 11 proceedings. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The accompanying condensed consolidated financial statements are unaudited and were prepared from our records. We derived the condensed consolidated balance sheet as of December 31, 2018 from the audited financial statements contained in our 2018 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 along with our 2018 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 June 30, 2019 , 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 the Notes to the Consolidated Financial Statements contained in our 2018 Annual Report. (a) Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements as of June 30, 2019 and December 31, 2018 , and for the three and six months ended June 30, 2019 and 2018, respectively, include our accounts and those of our subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. Prior to August 2018, we consolidated the Potato Hills Gas Gathering System as we had 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 condensed consolidated financial statements. On August 1, 2018, we completed the sale of our 51% joint venture interest in Potato Hills Gas Gathering System, including the compression assets relating to the gathering system and our working interest in related oil and natural gas producing properties. For periods subsequent to filing the Bankruptcy Petitions, we have prepared our consolidated financial statements in accordance with Accounting Standards Codification 852, Reorganizations (“ASC 852”). ASC 852 requires that the financial statements distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, professional fees incurred in the Chapter 11 Cases have been recorded in a reorganization line item on the consolidated statements of operations. In addition, ASC 852 provides for changes in the accounting and presentation of significant items on the consolidated balance sheets, particularly liabilities. Prepetition obligations that are potentially impacted by the Chapter 11 reorganization process have been classified on the consolidated balance sheets in liabilities subject to compromise. These liabilities are reported at the amounts expected to be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts. (b) Oil and Natural Gas Properties The successful efforts method of accounting is used to account for oil and natural gas properties. Under the successful efforts method, we 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, 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 Depreciation, depletion and amortization (“DD&A”) 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 natural gas properties, the costs and related accumulated DD&A are eliminated from the accounts and the resulting gain or loss is recognized. Impairment of Oil and Natural Gas Properties Proved oil and natural gas properties are assessed for impairment in accordance with ASC 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. Unproved properties are evaluated on a specific-asset basis or in groups of similar assets, as applicable. The Company performs periodic assessments of unproved oil and natural gas properties for impairment and recognizes a loss at the time of impairment. In determining whether an unproved property is impaired, the Company considers numerous factors including, but not limited to, current development and exploration drilling plans, favorable or unfavorable exploration activity on adjacent leaseholds, future reserve cash flows and the remaining lease term. (c) Income Taxes Vanguard was a C corporation subject to federal and state income taxes. Grizzly has elected to be treated as a C corporation for federal and state income taxes. As a C corporation, we account for income taxes, as required, under the liability method. Deferred tax assets and liabilities are 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 are 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 is recognized in net income or loss in the period that includes the enactment date. Deferred tax assets are 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. The Company incurred a net taxable loss in the current taxable period. Thus no current income taxes are anticipated to be paid and no net benefit will be recorded in the Company’s condensed consolidated financial statements due to the full valuation allowance on the tax assets. Our policy is to record interest and penalties relating to uncertain tax positions in income tax expense. At June 30, 2019 , we did not have any accrued liability for uncertain tax positions and do not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. (d) New Pronouncements Recently Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC Topic 842) (“ASU 2016-02”), which requires lessees to recognize at the commencement date for all leases, with the exception of short-term leases, (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) 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. ASU 2016-02 took effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The ASU requires adoption using a modified retrospective transition approach with either (a) periods prior to the adoption date being recast or (b) a cumulative-effect adjustment recognized to the opening balance of retained earnings on the adoption date with prior periods not recast. We adopted ASU No. 2016-02 as of January 1, 2019, using the targeted improvement transition option included in ASU No. 2018-11 - Leases (Topic 842). The targeted improvement approach allows us to apply the standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to carry forward the historical lease classification and not capitalize leases with terms of 12 months or less. In addition, it allowed us not to separate lease and non-lease components. We also elected the practical expedient related to land easements, allowing us to carry forward our accounting treatment for land easements on existing agreements. The adoption of ASU 2016-02 resulted in the recording of additional net lease assets and lease liabilities of approximately $17.5 million and $18.0 million , respectively, as of January 1, 2019, with the difference largely due to prepaid and deferred rent that were reclassified to the right-of-use (“ROU”) asset value. The standard did not require any adjustment to the opening balance of retained earnings and had no impact on cash flows. Please see Note 9, “Leases,” for further details. In June 2016, the FASB issued ASU 2016-13 - Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To comply with this, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The measurement of expected credit losses will be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. In May 2019, the FASB updated Topic 326 by issuing ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief, which provides entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments-Credit Losses - Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments-Overall, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326. The amendments in these Updates will be applied using a modified-retrospective approach and, for public entities, are effective for fiscal years beginning after December 15, 2019 and interim periods within those annual periods. Management does not expect this update to have a material impact on the Company's financial statements. (e) 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 DD&A and accretion expense, income taxes, and share-based compensation. Actual results could differ from those estimates. |
Chapter 11 Proceedings
Chapter 11 Proceedings | 6 Months Ended |
Jun. 30, 2019 | |
Reorganizations [Abstract] | |
Chapter 11 Proceedings | Chapter 11 Proceedings Commencement of Bankruptcy Cases On the Petition Date, the Debtors filed the Chapter 11 Cases under the Bankruptcy Code in the Bankruptcy Court. The Debtors were jointly administered under the caption “In re Vanguard Natural Resources, Inc., et al.” The subsidiary Debtors in the Chapter 11 Cases were GNG, GEH, GO, EOC, EAC, GAC, GUD, GAP, GAC II, GUD II and GAP II. Reorganization Process Throughout the Chapter 11 Cases, we operated our business as a debtor-in-possession in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. We generally continued our operations without interruption during the pendency of the Chapter 11 Cases. To continue ordinary course operations, we secured orders from the Bankruptcy Court approving a variety of “first day” motions, including motions that authorized us to maintain our existing cash management system, to secure debtor-in-possession financing and other customary relief. These motions were designed primarily to minimize the effect of bankruptcy on the Company’s operations, customers and employees. Subject to certain exceptions provided for in section 362 of the Bankruptcy Code, all judicial and administrative proceedings against us or our property were automatically enjoined, or stayed, as of the Petition Date. In addition, subject to certain exceptions, the filing of new judicial or administrative actions against us or our property for claims arising prior to the Petition Date were automatically enjoined. This prohibited, for example, our lenders, noteholders and other creditors from pursuing claims for defaults under our debt agreements and our contract counterparties from pursuing claims for defaults under our contracts. Accordingly, all of our prepetition liabilities and obligations were settled or compromised under the Bankruptcy Code through the Chapter 11 Cases. Our operations and ability to execute our business remain subject to the risks and uncertainties arising as a result of our Chapter 11 Cases, and the number and nature of our outstanding common units and unitholders, assets, liabilities, officers and managers could change materially because of our Chapter 11 Cases. In addition, the descriptions of our prepetition operations, properties and capital plans may not accurately reflect our post-emergence operations, properties and capital plans. Creditors’ Committees - Appointment & Formation On April 11, 2019, the Office of the United States Trustee appointed the Official Committee of Unsecured Creditors (the “Unsecured Creditors Committee”) pursuant to section 1102 of the Bankruptcy Code. The Unsecured Creditors Committee consisted of the following three members: (i) Enterprise Jonah Gas Gathering LLC; (ii) Viva Energy Services LLC; and (iii) Trinity Environmental SWD I, LLC. Schedules and Statements - Claims & Claims Resolution Process On May 6, 2019 each of the Debtors filed a Schedule of Assets and Liabilities and Statement of Financial Affairs (collectively, the “Schedules and Statements”) with the Bankruptcy Court. These documents set forth, among other things, the assets and liabilities of each of the Debtors, including executory contracts to which each of the Debtors was a party, subject to the qualifications and assumptions included therein. The Schedules and Statements were subject to further amendment or modification after filing. Many of the claims identified in the Schedules and Statements were listed as disputed, contingent or unliquidated. Pursuant to the Federal Rules of Bankruptcy Procedure, creditors who wished to assert prepetition claims against us and whose claim (i) were not listed in the Schedules and Statements or (ii) were listed in the Schedules and Statements as disputed, contingent, or unliquidated, were required to file a proof of claim with the Bankruptcy Court prior to the bar dates set by the court. The bar dates are June 14, 2019, for non-governmental creditors, and September 27, 2019, for governmental creditors. As of August 14, 2019, approximately 1,405 claims totaling $7.7 billion were filed with the Bankruptcy Court against the Debtors by approximately 1,206 claimants. We expect additional claims to be filed prior to the last bar date. In addition, creditors who have already filed claims may amend or modify their claims in ways we cannot reasonably predict. The amounts of these additional claims and/or amendments or modifications to claims already filed may be material. We anticipate the claims filed against the Debtors in the Chapter 11 Cases will be numerous. We expect the process of resolving claims filed against the Debtors to be complex and lengthy. We plan to investigate and evaluate all filed claims in connection with the Plan. As part of the process, we will work to resolve differences in amounts scheduled by the Debtors and the amounts claimed by creditors, including through the filing of objections with the Bankruptcy Court where necessary. Accordingly, the ultimate number and amount of claims that will be allowed against the Debtors is not presently known, nor can the ultimate recovery with respect to allowed claims be reasonably estimated. As discussed above, the claims resolution process continues following our emergence from the Chapter 11 Cases. Plan Support Agreement On May 8, 2019, the Debtors entered into a Plan Support Agreement (the “Plan Support Agreement”) with (a) certain holders (the “RBL Lenders”) constituting over 66 2/3% in amount and over 50.1% in number of the revolving credit facility claims and over 66 2/3% in amount and over 50.1% in number of those certain secured swap claims, in each case under that certain Fourth Amendment and Restated Credit Agreement, dated as of August 1, 2017, by and among Vanguard Natural Gas, LLC (“VNG”), as borrower, the guarantors party thereto, Citibank N.A., as Administrative Agent, and the other lenders party thereto from time to time (as amended, the “VNG Credit Facility” and the claims thereunder, the “RBL Claims” and “Secured Swap Claims,” as applicable); and (b) certain holders (the “Term Loan Lenders” and, collectively with the RBL Lenders, the “Plan Support Parties”), constituting over 66 2/3% in amount and over 50.1% in number of the term loan claims under the VNG Credit Facility (the “Term Loan Claims”). On July 3, 2019, the Plan Support Agreement was amended to reflect the support of over 66 2/3% of Second Lien Notes. A summary of the restructuring transactions agreed to by the Plan Support Parties and effectuated through the Plan is included below. Debtor-in-Possession Financing In connection with the Chapter 11 Cases, on the Petition Date, the Debtors filed a motion (the “DIP Motion”) seeking, among other things, interim and final approval of the Debtors’ use of cash collateral and debtor-in-possession financing on terms and conditions set forth in a proposed Debtor-in-Possession Credit Agreement (the “DIP Credit Agreement”) among VNG, as borrower (the “DIP Borrower”), Citibank, N.A., as administrative agent and issuing bank (the “DIP Agent”), and the financial institutions or other entities from time to time parties thereto, as lenders, and the DIP Agent. The initial lender under the DIP Credit Agreement was Citibank N.A. The DIP Credit Agreement contained the following terms: • a super-priority senior secured revolving credit facility in the aggregate amount of up to $65.0 million (the “New Money Facility”), of which $20.0 million was drawn on April 4, 2019 and an additional $5.0 million was drawn in July 2019; • a “roll up” of $65.0 million of the outstanding principal amount of the revolving loans under the VNG Credit Facility (as defined in Note 5) (the “Roll-Up”, and, together with the New Money Facility, collectively, the “DIP Facility”); • proceeds of the New Money Facility were to be used by the DIP Borrower to (i) pay certain costs and expenses related to the Chapter 11 Cases, (ii) make payments provided for in the DIP Motion, including in respect of certain “adequate protection” obligations and (iii) fund working capital needs, capital improvements and other general corporate purposes of the DIP Borrower and its subsidiaries, in all cases subject to the terms of the DIP Credit Agreement and applicable orders of the Bankruptcy Court; • the DIP Credit Agreement was paid off prior to maturity on July 16, 2019 in connection with Grizzly’s emergence from the Chapter 11 Cases; • interest accrued at a rate per year equal to the LIBOR rate plus 5.50% , or the adjusted base rate plus 4.50% per annum; and • in addition to other fees paid to the DIP Agent, the DIP Borrower was required to pay to the DIP Agent for the account of the lenders under the DIP Credit Agreement, an unused commitment fee equal to 1.0% of the daily average of each lender’s unused commitment under the New Money Facility, which was payable in arrears on the last day of each calendar month and on the termination date for the facility for any period for which the unused commitment fee was not previously paid. Plan of Reorganization On July 9, 2019, the Bankruptcy Court entered an order confirming the Amended Joint Plan of Reorganization (as Modified) of Vanguard Natural Resources, Inc. and its Debtor Affiliates (the “Plan”) and on July 16, 2019, the Company consummated the Plan. The Plan provides for the reorganization of the Debtors as a going concern and will significantly reduce long-term debt and annual interest payments of the reorganized Debtors. The following is a summary of the material terms of the Plan. This summary highlights only certain substantive provisions of the Plan and is not intended to be a complete description of the Plan. The Plan provided for: • holders of an allowed claim related to the DIP Credit Agreement to receive their pro rata share of participation in the Revolving Loans/Term Loan A (each as defined below); • holders of allowed RBL Claims and allowed Secured Swap Claims to receive their pro rata share of and interest in: (i) the Term Loan B (as defined below); (ii) the Series A Preferred Units (the “Series A Preferred Units”); and (iii) 75% of the Series C Common Units (the “Series C Common Units”); • holders of allowed claims under the senior secured term loan credit facility pursuant to the VNG Credit Facility to receive a pro rata share and interest in 10% of the Series C Common Units, as well as at the option of each holder of an Allowed Term Loan Claim, either: (i) such holder’s pro rata share of the Series A Preferred Units; or (ii) such holder’s pro rata share of the Series B Preferred Units (the “Series B Preferred Units” and together with the Series A Preferred Units, the “Preferred Units”); • holders of allowed claims related to the VNG Notes to receive a pro rata share and interest in: (i) 15% of the Series C Common Units, if the class of Allowed Senior Note Claims voted to accept the Plan; (ii) the Series A Preferred Units; and (iii) cash; • holders of certain other allowed general unsecured claim to receive 2% of the face amount of its unpaid claim as further described in the Plan; and • customary releases, exculpations, and injunctions. Pursuant to the Plan, the terms of the Vanguard’s board of directors expired as of the Effective Date. Our current board of managers (the “Board”) consists of five members who, except for one manager, are different from those who previously served on Vanguard’s board of directors. Preferred and Common Units The Preferred Units have no stated maturity and are not subject to mandatory redemption or any sinking fund and will remain outstanding indefinitely unless repurchased or redeemed by us, at our option, in accordance with the terms of the Company’s limited liability company agreement (the “LLC Agreement”). The Preferred Units had an initial liquidation preference of $10.00 per unit (the “Initial Liquidation Preference”). From and after the date on which the Term Loan B is repaid, the Company may redeem, in whole or in part, the Series A Preferred Units, at such times as determined by the Board in its sole discretion at the price set forth in the LLC Agreement (the “Series A Redemption Price”). The Series A Redemption Price, at a given date of determination, is based upon an amount equal to the Initial Liquidation Preference increased each month by an annualized rate equal to the LIBO rate for such month, plus 9.5% , compounding monthly on the last day of each such month. Upon the redemption of any Series A Preferred Units and the payment in full to the holders thereof, such Series A Preferred Units will cease to be outstanding. From and after the date on which all Series A Preferred Units are redeemed by Grizzly and are no longer outstanding (the “Series A Redemption Date”), the Company may redeem, in whole or in part, the Series B Preferred Units, at such times as determined by the Board in its sole discretion at the price set forth in the LLC Agreement (the “Series B Redemption Price”). The Series B Redemption Price, at a given date of determination, is based upon an amount equal to the Initial Liquidation Preference increased each month by an annualized rate equal to the LIBO rate for such month, plus 10.5% , compounding monthly on the last day of each such month. Upon the redemption of any Series B Preferred Units and the payment in full to the holders thereof, such Series B Preferred Units will cease to be outstanding. The Common Units represent limited liability company interests. Record holders of Common and Preferred Units are entitled to vote at meetings of members and shall be entitled to one vote for each outstanding unit that is registered in the name of such member on the record date for such meeting. Exit Facility Grizzly has entered into that certain Fifth Amended and Restated Credit Agreement dated as of July 16, 2019 (the “RBL Credit Agreement”), among GNG, as borrower (the “RBL Borrower”), Grizzly, as parent, Citibank, N.A., as administrative agent, issuing bank and collateral agent, and the lenders party thereto from time to time. Pursuant to the RBL Credit Agreement, the lenders party thereto agreed to provide a new first-lien reserved-based credit facility with first-out revolving credit commitments in the aggregate amount of $65.0 million (the “Revolving Loans”) and a second-out term loan in the aggregate amount of $65.0 million (the “Term Loan A”). The initial borrowing base under the RBL Credit Agreement is $65.0 million . The borrowing base will be redetermined semi-annually on April 1st and October 1st of each year, commencing on April 1, 2020. The maturity date of the RBL Credit Agreement, including the Term Loan A, is July 16, 2022. Until the maturity date, the Term Loan A shall bear interest at a rate per annum equal to 3.0% plus the adjusted LIBO rate for an alternate base rate loan, or 4.0% plus the adjusted LIBO rate for a Eurodollar loan, and the Revolving Loans shall bear interest based on borrowing base utilization percentage at a rate per annum equal to the alternate base rate plus a margin ranging from 2.0% to 3.0% for alternative base rate loans or the adjusted LIBO rate plus a margin ranging from 3.0% to 4.0% for Eurodollar loans. Unused commitments under the RBL Credit Agreement will accrue a commitment fee at a rate of 0.5% , payable quarterly in arrears. The RBL Borrower will be required to repay the Term Loan A at the end of each quarter in equal quarterly installments at a rate of 1.0% per annum of the original principal amount of the Term Loan A. Grizzly has also entered into that certain Term Loan Credit Agreement dated as of July 16, 2019 (the “Term Loan Credit Agreement”) among GNG, as borrower (the “Term Loan Borrower”), Grizzly, as parent, Citibank, N.A., as administrative agent and collateral agent, and the lenders party thereto from time to time. Pursuant to the Term Loan Credit Agreement, the lenders party thereto agreed to provide a first-lien, last-out term loan in the aggregate amount of $285.0 million (the “Term Loan B”). The Term Loan Credit Agreement and the RBL Credit Agreement together are referred to herein as the “Exit Facility”. The maturity date of the Term Loan Credit Agreement is January 16, 2023. Until the maturity date, the Term Loan B shall bear interest at a rate per annum equal to (i) the alternate base rate plus an applicable margin of 6.5% for an alternate base rate loan or (ii) the adjusted LIBO rate plus an applicable margin of 7.5% for a Eurodollar loan. The obligations under the Exit Facility are guaranteed by Grizzly and all of Grizzly’s subsidiaries (the “Guarantors”), subject to limited exceptions, and secured on a first-priority basis by substantially all of Grizzly’s and the Guarantors’ assets, including, without limitation, liens on at least 95% of the total value of Grizzly’s and the Guarantors’ oil and natural gas properties, and pledges of equity interests of all other direct and indirect subsidiaries of Grizzly, subject to certain limited exceptions. The Exit Facility also contains certain financial covenants. The RBL Credit Agreement requires that as of the last day of any fiscal quarter commencing with the third full fiscal quarter ending after the effective date of the RBL Credit Agreement, that (i) the consolidated first-out leverage ratio not exceed 2.50 to 1.00 and (ii) current ratio not be less than 1.00 to 1.00. The Term Loan Credit Agreement requires that as of January 1 of each year and July 1 of each year, commencing with the first such date after the effective date of the Term Loan Credit Agreement, that the proved developed producing coverage ratio not be less than 1.00 to 1.00. Amended and Restated Employment Agreements Richard Scott Sloan Amended and Restated Employment Agreement On July 16, 2019, Grizzly entered into an Amended and Restated Employment Agreement with its President and Chief Executive Officer, Richard Scott Sloan (the “Sloan Employment Agreement”). The initial term of the Sloan Employment Agreement will begin on July 16, 2019, and end on December 31, 2020, which term shall automatically renew for one -year periods unless Grizzly or Mr. Sloan gives notice that it or he, as applicable, does not wish to extend the agreement. The employment agreement provides that Mr. Sloan is entitled to receive an annual base salary of $720,000 and an annual target bonus equal to 100% of his base salary; provided that during the 2019 calendar year, Mr. Sloan will instead participate in a quarterly bonus arrangement that provides him the opportunity to earn a target quarterly bonus of $180,000 (the “Sloan STIP”). The Sloan STIP permits Mr. Sloan to earn a quarterly bonus if performance metrics are achieved during the applicable calendar quarter on either a stand-alone or “catch up” basis. Mr. Sloan can earn up to 150% of his quarterly target bonus if the applicable performance metrics are exceeded. The other terms of the Sloan Employment Agreement are generally consistent with the terms of Mr. Sloan’s prior agreement, except that: (i) the Effective Date of the Plan shall constitute a Change of Control (as defined therein), and (ii) Mr. Sloan’s voluntary resignation during the 30 -day period following the three -month anniversary of the Effective Date of the Plan shall constitute Good Reason (as defined herein). Ryan Midgett Amended and Restated Employment Agreement On July 16, 2019, Grizzly entered into an Amended and Restated Employment Agreement with its Chief Financial Officer, Ryan Midgett (the “Midgett Employment Agreement”). The initial term of the Midgett Employment Agreement will begin on July 16, 2019, and end on December 31, 2020, which term shall automatically renew for one -year periods unless Grizzly or Mr. Midgett gives notice that it or he, as applicable, does not wish to extend the agreement. The Midgett Employment Agreement provides that Mr. Midgett is entitled to receive an annual base salary of $325,000 and an annual target bonus equal to 80% of his base salary; provided that during the 2019 calendar year, Mr. Midgett will instead participate in a quarterly bonus arrangement that provides him the opportunity to earn a target quarterly bonus of $65,000 (the “Midgett STIP”). The Midgett STIP permits Mr. Midgett to earn a quarterly bonus if performance metrics are achieved during the applicable calendar quarter on either a stand-alone or “catch up” basis. Mr. Midgett can earn up to 150% of his quarterly target bonus if the applicable performance metrics are exceeded. The other terms of the agreement are generally consistent with the terms of Mr. Midgett’s prior agreement, except that: (i) the Effective Date of the Plan shall constitute a Change of Control (as defined therein), and (ii) Mr. Midgett’s voluntary resignation during the 30 -day period following the three -month anniversary of the Effective Date of the Plan shall constitute Good Reason (as defined herein). Jonathan C. Curth Amended and Restated Employment Agreement On July 16, 2019, Grizzly entered into an Amended and Restated Employment Agreement with its General Counsel, Corporate Secretary and Vice President of Land, Jonathan C. Curth (the “Curth Employment Agreement”). The initial term of the Curth Employment Agreement will begin on July 16, 2019, and end on December 31, 2020, which term shall automatically renew for one -year periods unless the Company or Mr. Curth gives notice that it or he, as applicable, does not wish to extend the agreement. The Curth Employment Agreement provides that Mr. Curth is entitled to receive an annual base salary of $380,000 and an annual target bonus equal to 80% of his base salary; provided that during the 2019 calendar year, Mr. Curth will instead participate in a quarterly bonus arrangement that provides him the opportunity to earn a target quarterly bonus of $76,000 (the “Curth STIP”). The Curth STIP permits Mr. Curth to earn a quarterly bonus if performance metrics are achieved during the applicable calendar quarter on either a stand-alone or “catch up” basis. Mr. Curth can earn up to 150% of his quarterly target bonus if the applicable performance metrics are exceeded. The other terms of the agreement are generally consistent with the terms of Mr. Curth’s prior agreement, except that: (i) the Effective Date of the Plan shall constitute a Change of Control (as defined therein), and (ii) Mr. Curth’s voluntary resignation during the 30 -day period following the three -month anniversary of the Effective Date of the Plan shall constitute Good Reason (as defined herein). Emergence from Chapter 11 On the Effective Date, the Debtors substantially consummated the Plan and emerged from the Chapter 11 Cases. As part of the transactions undertaken pursuant to the Plan, Vanguard was converted to a Delaware limited liability company and renamed Grizzly Energy, LLC. Acceleration of Debt Obligations As of December 31, 2018, the Company was not in compliance with certain covenants under the VNG Credit Facility (as defined in Note 5). Accordingly, all amounts due under the VNG Credit Facility and VNG Notes (as defined in Note 5) (collectively, the “Debt Instruments”) were classified as current in the accompanying consolidated balance sheets as of that date. The commencement of the Chapter 11 Cases was an event of default that accelerated the Debtors’ obligations under the following Debt Instruments: • $677.7 million in unpaid principal with respect to the VNG Revolving Loan (defined in Note 5), $123.4 million in unpaid principal with respect to the Term Loan (defined in Note 5), and approximately $11.6 million of interest, fees, and other expenses arising under or in connection with the VNG Credit Facility; and • $80.7 million in unpaid principal, plus interest, fees, and other expenses, arising in connection with the VNG Notes issued pursuant to the Amended and Restated Indenture. As of June 30, 2019, amounts outstanding under the Debt Instruments are included in liabilities subject to compromise in the condensed consolidated balance sheets. Further, in accordance with accounting guidance in ASC 852, we did not accrue interest on the Debt Instruments during the pendency of the 2019 Chapter 11 Cases. Liabilities Subject to Compromise Liabilities subject to compromise represent estimates of known or potential prepetition claims expected to be resolved in connection with the Chapter 11 Cases. Due to the uncertain nature of many of the potential claims, the magnitude of potential claims is not reasonably estimable at this time. Potential claims not currently included with liabilities subject to compromise in our Consolidated Balance Sheets may be material. In addition, differences between amounts we are reporting as liabilities subject to compromise and the amounts attributable to such matters claimed by our creditors or approved by the Bankruptcy Court may be material. We will continue to evaluate our liabilities throughout the Chapter 11 process, and we will make adjustments in future periods as necessary and appropriate. Such adjustments may be material. Under the Bankruptcy Code, we had the right to assume, assign or reject certain executory contracts and unexpired leases, subject to the approval of the Bankruptcy Court and certain other conditions. Rejections of contracts or leases, generally (1) were treated as a prepetition breach of the contract or lease, (2) subject to certain exceptions, relieved the Debtors of performing their future obligations under such contract or lease and (3) entitled the counterparty thereto to a prepetition general unsecured claim for damages caused by such deemed breach. Assumption of executory contracts or unexpired leases, generally required the Company to cure any existing monetary defaults under such contract or lease and provide adequate assurance of future performance to the counterparty. Accordingly, any description of an executory contract or unexpired lease, including any quantification of our obligations under any such contract or lease, is wholly qualified by the rejection rights we had under the Bankruptcy Code. Further, nothing herein is or shall be deemed an admission with respect to any claim amounts or calculations arising from the rejection of any executory contract or unexpired lease and we expressly preserve all of our rights with respect thereto. The following table summarizes the components of liabilities subject to compromise included in our Consolidated Balance Sheets as of June 30, 2019 : June 30, 2019 (in thousands) Accounts payable $ 3,233 Accrued liabilities 308 Undistributed oil and gas revenues 13,782 Derivative liabilities 53,870 Other liabilities 5 Debt and accrued interest 894,407 Liabilities subject to compromise $ 965,605 Interest Expense We discontinued recording interest on debt classified as liabilities subject to compromise on the Petition Date. Contractual interest on liabilities subject to compromise not reflected in the consolidated statements of operations was approximately $15.7 million , representing contractual interest expense from the Petition Date through June 30, 2019. Reorganization Items We have incurred and will continue to incur significant costs associated with the reorganization. The amount of these costs, which are being expensed as incurred, are expected to significantly affect our results of operations. The following table summarizes the components included in reorganization items on our consolidated statements of operations for the three and six months ended June 30, 2019 and 2018: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Professional and legal fees (1) $ 24,743 $ 610 $ 36,820 $ 2,317 Deferred financing costs and debt discount (2) — — 6,311 — Total Reorganization items $ 24,743 $ 610 $ 43,131 $ 2,317 (1) Includes $14.1 million of accrued reorganization costs as of June 30, 2019 representing unpaid professional and legal fees directly related to the Chapter 11 Cases. Total payments made for professional and legal fees related to the Chapter 11 Cases amounted to $22.7 million for the six months ended June 30, 2019. (2) Includes a non-cash charge to write off of the unamortized debt issuance costs and debt discounts of $6.3 million related to the VNG Revolving Loan, Term Loan and VNG Notes as these debt instruments were expected to be impacted by the bankruptcy reorganization process. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. However, the Chapter 11 Cases raised substantial doubt about our ability to continue as a going concern. The consolidated financial statements and related notes do not include any adjustments related to the recoverability and classification of recorded asset amounts or adjustments as a result of this substantial doubt. |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues 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 most of 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 condensed consolidated 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 condensed 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. Oil revenues are recorded net of these third-party transportation fees in our condensed consolidated statements of operations. 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 Topic 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. For the six months ended June 30, 2019 , revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material. |
Divestitures
Divestitures | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Divestitures | Divestitures During March 2019, the Company completed the sale of certain oil and natural gas properties in the Jonah Field in the Green River Basin. Cash proceeds received from the sale were approximately $4.4 million , subject to customary post-closing adjustments, net of costs to sell of $0.2 million . The net cash proceeds from this divestment were used to pay down outstanding debt under the VNG Credit Facility (defined in Note 5, “Debt” ). |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Our financing arrangements consisted of the following as of the date indicated (in thousands): Description Interest Rate Maturity Date June 30, 2019 December 31, 2018 VNG Revolving Loan Variable (1) February 1, 2021 $ 677,718 $ 682,145 Term Loan Variable (2) May 1, 2021 123,438 123,438 New Money Facility Variable (3) 20,000 — VNG Notes 9.0% February 15, 2024 80,722 80,722 Lease Financing Obligations 4.16% August 10, 2020 (4) — 10,454 Unamortized deferred financing costs — (7,124 ) Total debt $ 901,878 $ 889,635 Less: Liabilities subject to compromise (Note 2) (881,878 ) — Short-term debt (20,000 ) — Long-term debt classified as current (5) — (879,181 ) Current portion of Lease Financing Obligation (4) — (5,008 ) Total long-term debt $ — $ 5,446 (1) Variable interest rate of 6.27% at December 31, 2018 . In accordance with ASC 852, Reorganizations , we have accrued interest expense only up to the Petition Date. (2) Variable interest rate of 9.96% at December 31, 2018 . In accordance with ASC 852, Reorganizations , we have accrued interest expense only up to the Petition Date. (3) Variable interest rate of 7.92% at June 30, 2019 . Borrowings under the New Money Facility were paid off prior to maturity on July 16, 2019 in connection with Grizzly’s emergence from the Chapter 11 Cases. (4) Under ASU No. 2016-02, the lease financing obligations are classified and presented under the “Lease Liabilities” line item in the Balance Sheet. See Note 9, “Leases,” for a detailed discussion of our leases. (5) Under ASC Topic 470, “Debt,” as a result of our debt covenant violations, we classified our debt under our VNG Revolving Loan, Term Loan and VNG Notes as current at December 31, 2018 . Acceleration of Debt Obligations As of December 31, 2018, the Company was not in compliance with certain covenants under the VNG Credit Facility (defined herein). Accordingly, all amounts due under the Debt Instruments are classified as current in the accompanying consolidated balance sheets as of that date. The commencement of the Chapter 11 Cases is an event of default that accelerated the Debtors’ obligations under these Debt Instruments. As of June 30, 2019, amounts outstanding under the Debt instruments are included in liabilities subject to compromise in the condensed consolidated balance sheets. Any efforts to enforce such obligations under the Debt Instruments are stayed automatically as a result of the filing of the Bankruptcy Petitions and the holders’ rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code. We accelerated the amortization of the remaining debt issue costs of $6.3 million associated with the Debt Instruments, fully amortizing those amounts as of the Petition Date. Since the commencement of the Bankruptcy Petitions, no interest has been paid to the holders of the Debt Instruments. Also, in accordance with ASC 852, Reorganizations , we have accrued interest expense on the Debt Instruments only up to the Petition Date. The total amount accrued of $12.5 million is reflected as liabilities subject to compromise on the consolidated balance sheet as of June 30, 2019. In addition, contractual interest on liabilities subject to compromise not reflected in the consolidated statements of operations was approximately $15.7 million , representing interest expense from the Petition Date through June 30, 2019. Additional information regarding the Chapter 11 cases is included in Note 2. Chapter 11 Cases. VNG Credit Facility Under the Company’s Fourth Amended and Restated Credit Agreement (the “VNG Credit Facility”), the lenders party thereto agreed to provide VNG with an $850.0 million senior secured reserve-based revolving credit facility (the “VNG Revolving Loan”). The VNG Credit Facility also included an additional $125.0 million senior secured term loan (the “Term Loan”). As of June 30, 2019 , the VNG Credit Facility had a borrowing base of $677.9 million . Pursuant to the Plan, on the Effective Date, the Company’s obligations with respect to the VNG Credit Facility were canceled and discharged. VNG Notes On June 30, 2019, we had $80.7 million outstanding in aggregate principal amount of 9.0% Senior Secured Second Lien Notes due 2024 (the “VNG Notes”). Pursuant to the Plan, on the Effective Date, the Company’s obligations with respect to the VNG Notes were canceled and discharged. Exit Facility Grizzly has entered into the RBL Credit Agreement. Pursuant to the RBL Credit Agreement, the lenders party thereto agreed to provide the Revolving Loans and the Term Loan A. The initial borrowing base on the Revolving Loans is $65.0 million . The maturity date of the RBL Credit Agreement is July 16, 2022. The Company has also entered into that certain Term Loan Credit Agreement. Pursuant to the Term Loan Credit Agreement, the lenders party thereto agreed to provide a first-lien, last-out term loan in the aggregate amount of $285.0 million . The maturity date of the Term Loan Credit Agreement is January 16, 2023. See Note 2 for a detailed discussion of the Exit Facility. |
Price Risk Management Activitie
Price Risk Management Activities | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Price Risk Management Activities | Price Risk Management Activities Historically, we entered into derivative contracts primarily with counterparties that were also lenders under our VNG Credit Facility to hedge price risk associated with a portion of our oil, natural gas and NGLs production. Our derivative contracts with these counterparties were governed by master agreements, which generally specify that a default under any of our debt agreements as well as any bankruptcy filing is an event of default which may result in early termination of such derivative contracts. As a result of our defaults under our debt agreements and our Bankruptcy Petitions, we were in default under our derivative contracts. In addition, our derivative contract counterparties were permitted to terminate any outstanding derivative transactions and to calculate the amounts due to or from the Debtors as a result of such terminations, in accordance with the terms of the agreements governing such derivative contracts. In April 2019, our derivative contract counterparties unilaterally terminated all derivative contracts to which we were a party and the net settlement owed to counterparties amounted to $53.9 million and was included in Liabilities Subject to Compromise on the Consolidated Balance Sheet as of June 30, 2019. The Company has not entered into any commodity derivative contracts subsequent to June 30, 2019. Balance Sheet Presentation Our commodity derivatives are presented on a net basis in “derivative assets” and “derivative liabilities” on the condensed 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 condensed consolidated balance sheets for the period indicated (in thousands): December 31, 2018 Offsetting Derivative Assets: Gross Amounts of Recognized Assets Gross Amounts Offset in the Condensed Consolidated Balance Sheets Net Amounts Presented in the Condensed Consolidated Balance Sheets Commodity price derivative contracts $ 22,361 $ (9,308 ) $ 13,053 Total derivative instruments $ 22,361 $ (9,308 ) $ 13,053 Offsetting Derivative Liabilities: Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Condensed Consolidated Balance Sheets Net Amounts Presented in the Condensed Consolidated Balance Sheets Commodity price derivative contracts $ (15,791 ) $ 9,308 $ (6,483 ) Total derivative instruments $ (15,791 ) $ 9,308 $ (6,483 ) 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. As previously discussed, all of our counterparties were participants in our VNG 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. As of June 30, 2019, we had no outstanding commodity price or interest rate derivative contracts, and therefore no credit risk related to derivative instruments. Changes in fair value of our commodity derivatives for the periods indicated are as follows (in thousands): Six Months Ended June 30, 2019 Year Ended December 31, 2018 Derivative asset (liability) at beginning of period, net $ 6,570 $ (64,437 ) Net losses on commodity derivative contracts (70,202 ) (9,259 ) Cash settlements paid on matured commodity derivative contracts 9,762 80,266 Termination of commodity derivative contracts 53,870 — Derivative asset at end of period, net $ — $ 6,570 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Financial assets and financial liabilities measured at fair value on a recurring basis are summarized below (in thousands): December 31, 2018 Fair Value Measurements Assets/Liabilities Using Level 2 at Fair Value Assets: Commodity price derivative contracts $ 13,053 $ 13,053 Total derivative instruments $ 13,053 $ 13,053 Liabilities: Commodity price derivative contracts $ (6,483 ) $ (6,483 ) Total derivative instruments $ (6,483 ) $ (6,483 ) 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, some 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 condensed 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. The Company periodically reviews oil and natural gas properties for impairment when facts and circumstances indicate that their carrying value may not be recoverable. During the six months ended June 30, 2019 , we incurred impairment charges of $323.6 million as oil and natural gas properties with a net cost basis of $546.2 million were written down to their fair value of $222.6 million . The most significant factors causing us to record an impairment of oil and natural gas properties in 2019 was the reduction in our proved reserves and the reduction in the value of our unproved properties resulting from a decline in forward natural gas prices. During the six months ended June 30, 2018 , we incurred impairment charges of $22.2 million as oil and natural gas properties with a net cost basis of $89.1 million were written down to their fair value of $66.9 million . The write downs in 2018 primarily relate to downward revisions of unproved property leasehold acreage and working interest in certain of our undeveloped leasehold as well as the reduction in the value of certain of our operating districts due to a decline in forward natural gas prices. In order to determine whether the carrying value of an asset is recoverable, the Company compares net capitalized costs of proved oil and natural gas properties to estimated undiscounted future net cash flows using management’s expectations of future oil and natural gas prices. These future price scenarios reflect the Company’s estimation of future price volatility. If the net capitalized cost exceeds the undiscounted future net cash flows, the Company writes the net cost basis down to the discounted future net cash flows, which is management’s estimate of fair value. Significant inputs used to determine the fair value 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. The inputs used by management for the fair value measurements utilized in this review include significant unobservable inputs, and therefore, the fair value measurements employed are classified as Level 3 for these types of assets. |
Asset Retirement Obligations
Asset Retirement Obligations | 6 Months Ended |
Jun. 30, 2019 | |
Asset Retirement Obligation [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations The following provides a roll-forward of our asset retirement obligations (in thousands): Asset retirement obligation at January 1, 2018 $ 157,424 Liabilities added during the current period 610 Accretion expense 9,295 Liabilities related to assets divested (16,687 ) Retirements (2,499 ) Change in estimate (4,935 ) Asset retirement obligation at December 31, 2018 143,208 Liabilities added during the current period 65 Accretion expense 4,377 Liabilities related to assets divested (294 ) Retirements (1,563 ) Change in estimate (22 ) Asset retirement obligation at June 30, 2019 145,771 Less: current obligations (4,752 ) Long-term asset retirement obligation at June 30, 2019 $ 141,019 Inputs to the valuation of additions to the asset retirement obligation liability and certain changes in the estimated fair value of the liability include: (i) estimated plug and abandonment cost per well based on our experience; (ii) estimated remaining life per well based on average reserve life per field; (iii) our credit-adjusted risk-free interest rate and (iv) the average inflation factor. These inputs require significant judgments and estimates by the Company’s management at the time of the valuation and are sensitive and subject to change. During the year ended December 31, 2018, we used credit-adjusted risk-free interest rate ranging between 6.5% and 7.1% ; and the average inflation factor of 1.7% . During the six months ended June 30, 2019 , we used credit-adjusted risk-free interest rate ranging from 6.3% to 6.8% and the average inflation factor was 1.6% . |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases We determine if an arrangement is a lease at inception. Operating leases and finance leases are included in lease assets, other current liabilities and other long-term liabilities on our consolidated balance sheets. Operating leases with lease term of 12 months or less are not capitalized and excluded from operating lease ROU assets. The lease payments are expensed on a straight-line basis over the term of the lease. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. We do not have any variable lease payments. We lease certain real estate, well equipment, vehicles, and information technology equipment. For certain well equipment, real-estate, and vehicle leases we account for the lease and non-lease components as a single lease component. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The components of lease expense for the three and six months ended June 30, 2019 were as follows (in thousands): Three Months Ended Six Months Ended Lease Expense Classification June 30, 2019 June 30, 2019 Assets Short-term lease cost Selling, general and administrative expenses or Lease operating expenses $ 371 $ 666 Operating lease cost Selling, general and administrative expenses or Lease operating expenses 670 1,521 Finance lease cost Amortization of lease assets Depreciation, depletion, amortization and accretion 1,341 2,674 Interest on lease liabilities Interest expense 125 262 Net lease cost $ 2,507 $ 5,123 Information regarding our lease terms and discount rates as of June 30, 2019 were as follows: June 30, 2019 Weighted-average remaining lease term (years) Operating leases 5.8 Finance leases 1.6 Weighted-average discount rate Operating leases 18.5 % Finance leases 5.7 % Supplemental balance sheet information related to leases as of June 30, 2019 was as follows: Leases (in thousands) Classification June 30, 2019 Assets Operating lease assets Lease assets $ 5,699 Finance lease assets, at cost Lease assets 10,636 Accumulated amortization Lease assets (2,674 ) Finance lease assets, net Lease assets 7,962 Total lease assets $ 13,661 Liabilities Current Operating Liabilities subject to compromise $ 1,116 Finance Liabilities subject to compromise 5,183 Long-Term Operating Liabilities subject to compromise 5,051 Finance Liabilities subject to compromise 2,969 Total lease liabilities $ 14,319 The maturity of our lease liabilities as of June 30, 2019 were as follows (in thousands): Operating Leases Finance Leases Total 2019 (remaining of year) $ 1,221 $ 2,755 $ 3,976 2020 1,763 4,427 6,190 2021 1,557 1,347 2,904 2022 1,255 55 1,310 2023 1,247 — 1,247 Thereafter 3,150 — 3,150 Total undiscounted lease liability 10,193 8,584 18,777 Imputed interest (4,026 ) (432 ) (4,458 ) Total discounted liability $ 6,167 $ 8,152 $ 14,319 Supplemental cash flow and other information related to leases for the six months ended June 30, 2019 was as follows (in thousands): Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,870 Operating cash flows from finance leases $ 262 Financing cash flows from finance leases $ 2,484 Rent expense for our office leases was $0.6 million and $1.1 million for the three and six months ended June 30, 2018 , respectively. The rent expense was for the lease of our office space in Houston, Texas as well as office leases in our other operating areas. Prior to the adoption of ASU No. 2016-02, our policy was to amortize the total payments under the lease agreement on a straight-line basis over the term of the lease. |
Leases | Leases We determine if an arrangement is a lease at inception. Operating leases and finance leases are included in lease assets, other current liabilities and other long-term liabilities on our consolidated balance sheets. Operating leases with lease term of 12 months or less are not capitalized and excluded from operating lease ROU assets. The lease payments are expensed on a straight-line basis over the term of the lease. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. We do not have any variable lease payments. We lease certain real estate, well equipment, vehicles, and information technology equipment. For certain well equipment, real-estate, and vehicle leases we account for the lease and non-lease components as a single lease component. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The components of lease expense for the three and six months ended June 30, 2019 were as follows (in thousands): Three Months Ended Six Months Ended Lease Expense Classification June 30, 2019 June 30, 2019 Assets Short-term lease cost Selling, general and administrative expenses or Lease operating expenses $ 371 $ 666 Operating lease cost Selling, general and administrative expenses or Lease operating expenses 670 1,521 Finance lease cost Amortization of lease assets Depreciation, depletion, amortization and accretion 1,341 2,674 Interest on lease liabilities Interest expense 125 262 Net lease cost $ 2,507 $ 5,123 Information regarding our lease terms and discount rates as of June 30, 2019 were as follows: June 30, 2019 Weighted-average remaining lease term (years) Operating leases 5.8 Finance leases 1.6 Weighted-average discount rate Operating leases 18.5 % Finance leases 5.7 % Supplemental balance sheet information related to leases as of June 30, 2019 was as follows: Leases (in thousands) Classification June 30, 2019 Assets Operating lease assets Lease assets $ 5,699 Finance lease assets, at cost Lease assets 10,636 Accumulated amortization Lease assets (2,674 ) Finance lease assets, net Lease assets 7,962 Total lease assets $ 13,661 Liabilities Current Operating Liabilities subject to compromise $ 1,116 Finance Liabilities subject to compromise 5,183 Long-Term Operating Liabilities subject to compromise 5,051 Finance Liabilities subject to compromise 2,969 Total lease liabilities $ 14,319 The maturity of our lease liabilities as of June 30, 2019 were as follows (in thousands): Operating Leases Finance Leases Total 2019 (remaining of year) $ 1,221 $ 2,755 $ 3,976 2020 1,763 4,427 6,190 2021 1,557 1,347 2,904 2022 1,255 55 1,310 2023 1,247 — 1,247 Thereafter 3,150 — 3,150 Total undiscounted lease liability 10,193 8,584 18,777 Imputed interest (4,026 ) (432 ) (4,458 ) Total discounted liability $ 6,167 $ 8,152 $ 14,319 Supplemental cash flow and other information related to leases for the six months ended June 30, 2019 was as follows (in thousands): Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,870 Operating cash flows from finance leases $ 262 Financing cash flows from finance leases $ 2,484 Rent expense for our office leases was $0.6 million and $1.1 million for the three and six months ended June 30, 2018 , respectively. The rent expense was for the lease of our office space in Houston, Texas as well as office leases in our other operating areas. Prior to the adoption of ASU No. 2016-02, our policy was to amortize the total payments under the lease agreement on a straight-line basis over the term of the lease. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Commitments As of December 31, 2018, the minimum contractual obligations under our lease commitments were approximately $9.2 million in the aggregate. Please see Note 9, “Leases,” for a detailed discussion of our current accounting for leases with the adoption of ASU 2016-02. Lease Payments (in thousands) 2019 $ 1,211 2020 1,149 2021 1,169 2022 1,204 2023 1,241 Thereafter 3,262 Total $ 9,236 Transportation Demand Charges As of June 30, 2019 , we have a contract that provides firm transportation capacity on pipeline systems. The remaining term on this contract is approximately one year and requires 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 June 30, 2019 . 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. June 30, 2019 (in thousands) July 1, 2019 - December 31, 2019 $ 410 2020 410 Total $ 820 Development Commitments We have commitments to third-party operators under joint operating agreements relating to the drilling and completion of oil and natural gas wells. As of June 30, 2019 , total estimated costs to be spent in 20 19 is approximately $9.6 million , of which $2.5 million relates to our drilling and completion commitments in the Pinedale field in the Green River Basin, and $6.1 million is for facility redevelopment costs for the Cotton Valley gas plant in Gulf Coast. Legal Proceedings We are defendants in certain legal proceedings arising in the normal course of our business. Management does not believe that it is probable that the outcome of these actions will have a material adverse effect on the Company’s condensed consolidated financial position, results of operations or cash flow, although the ultimate outcome and impact of such legal proceedings on the Company cannot be predicted with certainty. Furthermore, our insurance may not be adequate to cover all liabilities that may arise out of claims brought against us. If one or more negative outcomes were to occur relative to these matters, the aggregate impact to our financial position, results of operations or cash flow could be material. In addition, we are not aware of any legal or governmental proceedings against us, or contemplated to be brought against us, under applicable environmental laws, that could reasonably be expected to have a material adverse effect on the Company’s condensed consolidated financial position, results of operations or cash flow. Pursuant to 11 U.S.C. § 362, with certain exceptions, our legal proceedings were automatically stayed as to the Debtors through the Effective Date. Please see Note 2, “Chapter 11 Proceedings,” for information regarding our Chapter 11 Cases. |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders’ Equity (Deficit) | Stockholders’ Equity (Deficit) Effect of Filing on Shareholders Under the priority scheme established by the Bankruptcy Code, unless creditors agree otherwise, prepetition debt liabilities and post-petition liabilities must be satisfied in full before the holders of our common shares and warrants are entitled to receive any distribution or retain any property under a plan of reorganization. Pursuant to the Plan the common shares and warrants of Vanguard were cancelled and Grizzly and its affiliates do not have any obligations thereunder. Earnings Per Share Basic earnings per share is computed by dividing net earnings attributable to stockholders by the weighted average number of shares outstanding during the period. Diluted earnings per share is computed by adjusting the average number of shares outstanding for the dilutive effect, if any, of potential common shares. The Company uses the treasury stock method to determine the dilutive effect. The diluted earnings per share calculation for the six months ended June 30, 2019 and 2018 excluded 301,065 restricted stock units (“RSUs”) and 143,181 RSUs, respectively, and approximately 1.3 million warrants for each of the period, that were antidilutive. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation Effect of Emergence from Bankruptcy on Share-Based Compensation Pursuant to the Plan, all unvested equity grants 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 Company’s 2017 Management Incentive Plan (“MIP”) was canceled and extinguished, and participants in the 2017 MIP received no payment or other distribution on account of the 2017 MIP. 2017 MIP Restricted Stock Units The following table summarizes our time-based RSUs as of June 30, 2019 : Time-Based Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at December 31, 2018 244,496 $ 16.62 Vested (1,473 ) $ 11.99 Non-vested at June 30, 2019 243,023 $ 16.65 As of June 30, 2019 , the total remaining unearned compensation related to non-vested time-based RSUs was $2.7 million with a weighted-average remaining service period of 1.5 years. In addition, the total remaining unearned compensation related to TSR performance RSUs as of June 30, 2019 was $0.8 million , with a weighted-average remaining service period of 1.5 years. Pursuant to the Plan, all RSUs issued by Vanguard were cancelled and Grizzly and its affiliates do not have any obligations related thereto. Our condensed consolidated statements of operations reflect non-cash compensation related to our MIP of $0.6 million for each of the three months ended June 30, 2019 and 2018 , and $1.2 million and $1.1 million for the six months ended June 30, 2019 and 2018 , respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the six months ended June 30, 2019 , we recorded no income tax expense or benefit. The difference between our effective tax rate and the federal statutory income tax rate of 21% is primarily due to the effect of changes in the Company’s valuation allowance. As described in Note 2, “ Chapter 11 Proceedings,” in accordance with the Plan, our long-term debt was reorganized and significantly reduced. The Internal Revenue Code (“IRC”) of 1986, as amended, provides that a debtor in a Chapter 11 bankruptcy case may exclude cancellation of debt income (“CODI”) from taxable income but must reduce certain of its tax attributes by the amount of any CODI realized as a result of the consummation of a plan of reorganization. The amount of CODI realized by a taxpayer is determined based on the fair market value of the consideration received by the creditors in settlement of outstanding indebtedness. Upon emergence from Chapter 11 bankruptcy proceedings, the CODI may reduce some or all of the amount of prior U.S. tax attributes. The actual reduction in tax attributes will not occur until after the determination of tax for the 2019 taxable year. The utilization of certain remaining U.S. tax attributes are expected to be limited under IRC Section 382 due to the ownership change resulting from the Plan. Based on historical results and ownership change limitations, during the six months ended June 30, 2019 , 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. Upon emergence, the Company has elected to be treated as a C corporation for federal and state income taxes. |
Related Parties (Notes)
Related Parties (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties One of the members of the Company’s Board, Kevin Asarnow, is also an Executive Director at RPA Advisors, LLC (“RPA”). RPA served as the financial advisor to the holders of allowed RBL Claims and allowed Secured Swap Claims during the Chapter 11 Cases. The Company incurred professional fees related to services provided by RPA of approximately $2.2 million for the six months ended June 30, 2019. We accrued professional services expense of $0.5 million for services rendered but not yet paid as of June 30, 2019. Until August 2018, Dean E. Swick, also a member of the Company’s Board and Audit Committee Chairman, was a Managing Director at Alvarez & Marsal North America, LLC (“A&M”) where he served as the Co-Leader of Energy Restructuring. Another Alvarez & Marsal entity (the “A&M entity”) provided services to the Company related to the analysis of executive compensation. The Company incurred professional fees related to services provided by the A&M entity of approximately $0.2 million for the six months ended June 30, 2019. There were no outstanding amounts owed to the A&M entity as of June 30, 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements as of June 30, 2019 and December 31, 2018 , and for the three and six months ended June 30, 2019 and 2018, respectively, include our accounts and those of our subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. Prior to August 2018, we consolidated the Potato Hills Gas Gathering System as we had 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 condensed consolidated financial statements. On August 1, 2018, we completed the sale of our 51% joint venture interest in Potato Hills Gas Gathering System, including the compression assets relating to the gathering system and our working interest in related oil and natural gas producing properties. For periods subsequent to filing the Bankruptcy Petitions, we have prepared our consolidated financial statements in accordance with Accounting Standards Codification 852, Reorganizations (“ASC 852”). ASC 852 requires that the financial statements distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, professional fees incurred in the Chapter 11 Cases have been recorded in a reorganization line item on the consolidated statements of operations. In addition, ASC 852 provides for changes in the accounting and presentation of significant items on the consolidated balance sheets, particularly liabilities. Prepetition obligations that are potentially impacted by the Chapter 11 reorganization process have been classified on the consolidated balance sheets in liabilities subject to compromise. These liabilities are reported at the amounts expected to be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts. |
Oil and Natural Gas Properties | Oil and Natural Gas Properties The successful efforts method of accounting is used to account for oil and natural gas properties. Under the successful efforts method, we 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, 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 Depreciation, depletion and amortization (“DD&A”) 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 natural gas properties, the costs and related accumulated DD&A are eliminated from the accounts and the resulting gain or loss is recognized. Impairment of Oil and Natural Gas Properties Proved oil and natural gas properties are assessed for impairment in accordance with ASC 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. Unproved properties are evaluated on a specific-asset basis or in groups of similar assets, as applicable. The Company performs periodic assessments of unproved oil and natural gas properties for impairment and recognizes a loss at the time of impairment. In determining whether an unproved property is impaired, the Company considers numerous factors including, but not limited to, current development and exploration drilling plans, favorable or unfavorable exploration activity on adjacent leaseholds, future reserve cash flows and the remaining lease term. |
Income Taxes | Income Taxes Vanguard was a C corporation subject to federal and state income taxes. Grizzly has elected to be treated as a C corporation for federal and state income taxes. As a C corporation, we account for income taxes, as required, under the liability method. Deferred tax assets and liabilities are 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 are 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 is recognized in net income or loss in the period that includes the enactment date. Deferred tax assets are 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. The Company incurred a net taxable loss in the current taxable period. Thus no current income taxes are anticipated to be paid and no net benefit will be recorded in the Company’s condensed consolidated financial statements due to the full valuation allowance on the tax assets. Our policy is to record interest and penalties relating to uncertain tax positions in income tax expense. At June 30, 2019 , we did not have any accrued liability for uncertain tax positions and do not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. |
New Pronouncements Recently Adopted | New Pronouncements Recently Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC Topic 842) (“ASU 2016-02”), which requires lessees to recognize at the commencement date for all leases, with the exception of short-term leases, (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) 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. ASU 2016-02 took effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The ASU requires adoption using a modified retrospective transition approach with either (a) periods prior to the adoption date being recast or (b) a cumulative-effect adjustment recognized to the opening balance of retained earnings on the adoption date with prior periods not recast. We adopted ASU No. 2016-02 as of January 1, 2019, using the targeted improvement transition option included in ASU No. 2018-11 - Leases (Topic 842). The targeted improvement approach allows us to apply the standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to carry forward the historical lease classification and not capitalize leases with terms of 12 months or less. In addition, it allowed us not to separate lease and non-lease components. We also elected the practical expedient related to land easements, allowing us to carry forward our accounting treatment for land easements on existing agreements. The adoption of ASU 2016-02 resulted in the recording of additional net lease assets and lease liabilities of approximately $17.5 million and $18.0 million , respectively, as of January 1, 2019, with the difference largely due to prepaid and deferred rent that were reclassified to the right-of-use (“ROU”) asset value. The standard did not require any adjustment to the opening balance of retained earnings and had no impact on cash flows. Please see Note 9, “Leases,” for further details. In June 2016, the FASB issued ASU 2016-13 - Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To comply with this, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The measurement of expected credit losses will be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. In May 2019, the FASB updated Topic 326 by issuing ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief, which provides entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments-Credit Losses - Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments-Overall, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326. The amendments in these Updates will be applied using a modified-retrospective approach and, for public entities, are effective for fiscal years beginning after December 15, 2019 and interim periods within those annual periods. Management does not expect this update to have a material impact on the Company's financial statements. |
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 DD&A and accretion expense, income taxes, and share-based compensation. Actual results could differ from those estimates. |
Revenue Recognition | 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 most of 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 condensed consolidated 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 condensed 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. Oil revenues are recorded net of these third-party transportation fees in our condensed consolidated statements of operations. 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 Topic 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. For the six months ended June 30, 2019 , revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material. |
Chapter 11 Proceedings (Tables)
Chapter 11 Proceedings (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Reorganizations [Abstract] | |
Schedule of Liabilities Subject to compromise | The following table summarizes the components of liabilities subject to compromise included in our Consolidated Balance Sheets as of June 30, 2019 : June 30, 2019 (in thousands) Accounts payable $ 3,233 Accrued liabilities 308 Undistributed oil and gas revenues 13,782 Derivative liabilities 53,870 Other liabilities 5 Debt and accrued interest 894,407 Liabilities subject to compromise $ 965,605 |
Schedule of Reorganization Items | The following table summarizes the components included in reorganization items on our consolidated statements of operations for the three and six months ended June 30, 2019 and 2018: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Professional and legal fees (1) $ 24,743 $ 610 $ 36,820 $ 2,317 Deferred financing costs and debt discount (2) — — 6,311 — Total Reorganization items $ 24,743 $ 610 $ 43,131 $ 2,317 (1) Includes $14.1 million of accrued reorganization costs as of June 30, 2019 representing unpaid professional and legal fees directly related to the Chapter 11 Cases. Total payments made for professional and legal fees related to the Chapter 11 Cases amounted to $22.7 million for the six months ended June 30, 2019. (2) Includes a non-cash charge to write off of the unamortized debt issuance costs and debt discounts of $6.3 million related to the VNG Revolving Loan, Term Loan and VNG Notes as these debt instruments were expected to be impacted by the bankruptcy reorganization process. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Financing Arrangements | Our financing arrangements consisted of the following as of the date indicated (in thousands): Description Interest Rate Maturity Date June 30, 2019 December 31, 2018 VNG Revolving Loan Variable (1) February 1, 2021 $ 677,718 $ 682,145 Term Loan Variable (2) May 1, 2021 123,438 123,438 New Money Facility Variable (3) 20,000 — VNG Notes 9.0% February 15, 2024 80,722 80,722 Lease Financing Obligations 4.16% August 10, 2020 (4) — 10,454 Unamortized deferred financing costs — (7,124 ) Total debt $ 901,878 $ 889,635 Less: Liabilities subject to compromise (Note 2) (881,878 ) — Short-term debt (20,000 ) — Long-term debt classified as current (5) — (879,181 ) Current portion of Lease Financing Obligation (4) — (5,008 ) Total long-term debt $ — $ 5,446 (1) Variable interest rate of 6.27% at December 31, 2018 . In accordance with ASC 852, Reorganizations , we have accrued interest expense only up to the Petition Date. (2) Variable interest rate of 9.96% at December 31, 2018 . In accordance with ASC 852, Reorganizations , we have accrued interest expense only up to the Petition Date. (3) Variable interest rate of 7.92% at June 30, 2019 . Borrowings under the New Money Facility were paid off prior to maturity on July 16, 2019 in connection with Grizzly’s emergence from the Chapter 11 Cases. (4) Under ASU No. 2016-02, the lease financing obligations are classified and presented under the “Lease Liabilities” line item in the Balance Sheet. See Note 9, “Leases,” for a detailed discussion of our leases. (5) Under ASC Topic 470, “Debt,” as a result of our debt covenant violations, we classified our debt under our VNG Revolving Loan, Term Loan and VNG Notes as current at December 31, 2018 . |
Price Risk Management Activit_2
Price Risk Management Activities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
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 condensed consolidated balance sheets for the period indicated (in thousands): December 31, 2018 Offsetting Derivative Assets: Gross Amounts of Recognized Assets Gross Amounts Offset in the Condensed Consolidated Balance Sheets Net Amounts Presented in the Condensed Consolidated Balance Sheets Commodity price derivative contracts $ 22,361 $ (9,308 ) $ 13,053 Total derivative instruments $ 22,361 $ (9,308 ) $ 13,053 Offsetting Derivative Liabilities: Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Condensed Consolidated Balance Sheets Net Amounts Presented in the Condensed Consolidated Balance Sheets Commodity price derivative contracts $ (15,791 ) $ 9,308 $ (6,483 ) Total derivative instruments $ (15,791 ) $ 9,308 $ (6,483 ) |
Schedule of Changes in Fair Value of Commodity and Interest Rate Derivatives | Changes in fair value of our commodity derivatives for the periods indicated are as follows (in thousands): Six Months Ended June 30, 2019 Year Ended December 31, 2018 Derivative asset (liability) at beginning of period, net $ 6,570 $ (64,437 ) Net losses on commodity derivative contracts (70,202 ) (9,259 ) Cash settlements paid on matured commodity derivative contracts 9,762 80,266 Termination of commodity derivative contracts 53,870 — Derivative asset at end of period, net $ — $ 6,570 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis | Financial assets and financial liabilities measured at fair value on a recurring basis are summarized below (in thousands): December 31, 2018 Fair Value Measurements Assets/Liabilities Using Level 2 at Fair Value Assets: Commodity price derivative contracts $ 13,053 $ 13,053 Total derivative instruments $ 13,053 $ 13,053 Liabilities: Commodity price derivative contracts $ (6,483 ) $ (6,483 ) Total derivative instruments $ (6,483 ) $ (6,483 ) |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Asset Retirement Obligation [Abstract] | |
Schedule of Changes in Asset Retirement Obligations | The following provides a roll-forward of our asset retirement obligations (in thousands): Asset retirement obligation at January 1, 2018 $ 157,424 Liabilities added during the current period 610 Accretion expense 9,295 Liabilities related to assets divested (16,687 ) Retirements (2,499 ) Change in estimate (4,935 ) Asset retirement obligation at December 31, 2018 143,208 Liabilities added during the current period 65 Accretion expense 4,377 Liabilities related to assets divested (294 ) Retirements (1,563 ) Change in estimate (22 ) Asset retirement obligation at June 30, 2019 145,771 Less: current obligations (4,752 ) Long-term asset retirement obligation at June 30, 2019 $ 141,019 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Supplemental cash flow and other information related to leases for the six months ended June 30, 2019 was as follows (in thousands): Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,870 Operating cash flows from finance leases $ 262 Financing cash flows from finance leases $ 2,484 The components of lease expense for the three and six months ended June 30, 2019 were as follows (in thousands): Three Months Ended Six Months Ended Lease Expense Classification June 30, 2019 June 30, 2019 Assets Short-term lease cost Selling, general and administrative expenses or Lease operating expenses $ 371 $ 666 Operating lease cost Selling, general and administrative expenses or Lease operating expenses 670 1,521 Finance lease cost Amortization of lease assets Depreciation, depletion, amortization and accretion 1,341 2,674 Interest on lease liabilities Interest expense 125 262 Net lease cost $ 2,507 $ 5,123 Information regarding our lease terms and discount rates as of June 30, 2019 were as follows: June 30, 2019 Weighted-average remaining lease term (years) Operating leases 5.8 Finance leases 1.6 Weighted-average discount rate Operating leases 18.5 % Finance leases 5.7 % |
Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases as of June 30, 2019 was as follows: Leases (in thousands) Classification June 30, 2019 Assets Operating lease assets Lease assets $ 5,699 Finance lease assets, at cost Lease assets 10,636 Accumulated amortization Lease assets (2,674 ) Finance lease assets, net Lease assets 7,962 Total lease assets $ 13,661 Liabilities Current Operating Liabilities subject to compromise $ 1,116 Finance Liabilities subject to compromise 5,183 Long-Term Operating Liabilities subject to compromise 5,051 Finance Liabilities subject to compromise 2,969 Total lease liabilities $ 14,319 |
Finance Lease Maturity | The maturity of our lease liabilities as of June 30, 2019 were as follows (in thousands): Operating Leases Finance Leases Total 2019 (remaining of year) $ 1,221 $ 2,755 $ 3,976 2020 1,763 4,427 6,190 2021 1,557 1,347 2,904 2022 1,255 55 1,310 2023 1,247 — 1,247 Thereafter 3,150 — 3,150 Total undiscounted lease liability 10,193 8,584 18,777 Imputed interest (4,026 ) (432 ) (4,458 ) Total discounted liability $ 6,167 $ 8,152 $ 14,319 |
Operating Lease Maturity | The maturity of our lease liabilities as of June 30, 2019 were as follows (in thousands): Operating Leases Finance Leases Total 2019 (remaining of year) $ 1,221 $ 2,755 $ 3,976 2020 1,763 4,427 6,190 2021 1,557 1,347 2,904 2022 1,255 55 1,310 2023 1,247 — 1,247 Thereafter 3,150 — 3,150 Total undiscounted lease liability 10,193 8,584 18,777 Imputed interest (4,026 ) (432 ) (4,458 ) Total discounted liability $ 6,167 $ 8,152 $ 14,319 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Please see Note 9, “Leases,” for a detailed discussion of our current accounting for leases with the adoption of ASU 2016-02. Lease Payments (in thousands) 2019 $ 1,211 2020 1,149 2021 1,169 2022 1,204 2023 1,241 Thereafter 3,262 Total $ 9,236 |
Schedule of 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 June 30, 2019 . 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. June 30, 2019 (in thousands) July 1, 2019 - December 31, 2019 $ 410 2020 410 Total $ 820 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes our time-based RSUs as of June 30, 2019 : Time-Based Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at December 31, 2018 244,496 $ 16.62 Vested (1,473 ) $ 11.99 Non-vested at June 30, 2019 243,023 $ 16.65 |
General (Details)
General (Details) | 6 Months Ended |
Jun. 30, 2019operating_area | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating areas | 9 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Lease assets | $ 13,661 | |
Lease liability | $ 14,319 | |
ASU 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Lease assets | $ 17,500 | |
Lease liability | $ 18,000 | |
Potato Hills Gas Gathering System | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Ownership percentage | 51.00% |
Chapter 11 Proceedings (Credito
Chapter 11 Proceedings (Creditors’ Committees - Appointment & Formation and Schedules and Statements - Claims & Claims Resolution Process) (Details) $ in Billions | Aug. 14, 2019USD ($)claimantclaim | Apr. 11, 2019member |
Subsequent Event [Line Items] | ||
Number of members on committee | member | 3 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number claims filed | claim | 1,405 | |
Amount of claims filed | $ | $ 7.7 | |
Number of claimants | claimant | 1,206 |
Chapter 11 Proceedings (Plan Su
Chapter 11 Proceedings (Plan Support Agreement) (Details) | Jul. 03, 2019 | May 08, 2019 |
Revolving Credit Facility | ||
Subsequent Event [Line Items] | ||
Percentage of debt | 66.66% | |
Percentage of number of loans included | 50.10% | |
Line of Credit | Secured Swap Debt | ||
Subsequent Event [Line Items] | ||
Percentage of debt | 66.66% | |
Percentage of number of loans included | 50.10% | |
Term Loan | Term Loan | ||
Subsequent Event [Line Items] | ||
Percentage of debt | 66.66% | |
Percentage of number of loans included | 50.10% | |
Term Loan | Second Lien Notes | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Percentage of debt | 66.66% |
Chapter 11 Proceedings (Debtor-
Chapter 11 Proceedings (Debtor-in-Possession Financing) (Details) - Debtor-in-Possession Financing - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 12, 2019 | Apr. 04, 2019 | |
Debt Instrument [Line Items] | |||
Commitment fee (percent) | 1.00% | ||
LIBOR | |||
Debt Instrument [Line Items] | |||
Applicable margin on variable rate (percent) | 5.50% | ||
Base Rate | |||
Debt Instrument [Line Items] | |||
Applicable margin on variable rate (percent) | 4.50% | ||
New Money Facility | |||
Debt Instrument [Line Items] | |||
Aggregate debt | $ 65 | ||
Amount drawn | $ 20 | ||
New Money Facility | Subsequent Event | |||
Debt Instrument [Line Items] | |||
Amount drawn | $ 5 | ||
Rollup Facility | |||
Debt Instrument [Line Items] | |||
Aggregate debt | $ 65 |
Chapter 11 Proceedings (Plan of
Chapter 11 Proceedings (Plan of Reorganization) (Details) - member | Jul. 09, 2019 | Jun. 30, 2019 |
Class of Stock [Line Items] | ||
Number of members on board of managers | 5 | |
Subsequent Event | ||
Class of Stock [Line Items] | ||
Percent of face amount, unpaid claim | 2.00% | |
Term Loan B | Term Loan | Series C Preferred Units | Subsequent Event | ||
Class of Stock [Line Items] | ||
Percentage of pro-rata share | 75.00% | |
VNG Credit Facility | Line of Credit | Series C Preferred Units | Subsequent Event | ||
Class of Stock [Line Items] | ||
Percentage of pro-rata share | 10.00% | |
VNG Notes | Senior Notes | Common Class C | Subsequent Event | ||
Class of Stock [Line Items] | ||
Percentage of pro-rata share | 15.00% |
Chapter 11 Proceedings (Preferr
Chapter 11 Proceedings (Preferred and Common Units) (Details) | Jun. 30, 2019vote$ / shares |
Class of Stock [Line Items] | |
Liquidation preference (USD per unit) | $ / shares | $ 10 |
Number of votes for each outstanding unit | vote | 1 |
Series A Preferred Stock | |
Class of Stock [Line Items] | |
Basis spread on variable rate | 9.50% |
Series B Preferred Stock | |
Class of Stock [Line Items] | |
Basis spread on variable rate | 10.50% |
Chapter 11 Proceedings (Exit Fa
Chapter 11 Proceedings (Exit Facility) (Details) - Subsequent Event - USD ($) | Jul. 16, 2019 | Jul. 15, 2019 |
Exit Facility | ||
Debt Instrument [Line Items] | ||
Guarantor percentage | 95.00% | |
Line of Credit | Revolving Loans | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 65,000,000 | $ 65,000,000 |
Line of Credit | Revolving Loans | Base Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Applicable margin on variable rate (percent) | 2.00% | |
Line of Credit | Revolving Loans | Base Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Applicable margin on variable rate (percent) | 3.00% | |
Line of Credit | Revolving Loans | Eurodollar | Minimum | ||
Debt Instrument [Line Items] | ||
Applicable margin on variable rate (percent) | 3.00% | |
Line of Credit | Revolving Loans | Eurodollar | Maximum | ||
Debt Instrument [Line Items] | ||
Applicable margin on variable rate (percent) | 4.00% | |
Line of Credit | Term Loan A | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 65,000,000 | |
Interest rate at period end | 1.00% | |
Line of Credit | Term Loan A | Base Rate | ||
Debt Instrument [Line Items] | ||
Applicable margin on variable rate (percent) | 3.00% | |
Line of Credit | Term Loan A | Eurodollar | ||
Debt Instrument [Line Items] | ||
Applicable margin on variable rate (percent) | 4.00% | |
Line of Credit | RBL Credit Agreement | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 65,000,000 | |
Commitment fee (percent) | 0.50% | |
Maximum consolidated first-out leverage ratio | 2.50 | |
Minimum current ratio | 1 | |
Minimum coverage ratio | 1 | |
Term Loan | Term Loan B | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 285,000,000 | $ 285,000,000 |
Term Loan | Term Loan B | Base Rate | ||
Debt Instrument [Line Items] | ||
Applicable margin on variable rate (percent) | 6.50% | |
Term Loan | Term Loan B | Eurodollar | ||
Debt Instrument [Line Items] | ||
Applicable margin on variable rate (percent) | 7.50% |
Chapter 11 Proceedings (Amended
Chapter 11 Proceedings (Amended and Restated Employment Agreements) (Details) - Subsequent Event $ in Thousands | Jul. 16, 2019USD ($) |
Sloan Employment Agreement | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
Renew period | 1 year |
Annual base salary | $ 720 |
Target bonus, percent of base salary | 100.00% |
Target quarterly bonus, amount | $ 180 |
Quarterly target bonus, percentage | 150.00% |
Voluntary resignation period | 30 days |
Anniversary of Effective Date | 3 months |
Midgett Employment Agreement | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
Renew period | 1 year |
Annual base salary | $ 325 |
Target bonus, percent of base salary | 80.00% |
Target quarterly bonus, amount | $ 65 |
Quarterly target bonus, percentage | 150.00% |
Voluntary resignation period | 30 days |
Anniversary of Effective Date | 3 months |
Curth Employment Agreement | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
Renew period | 1 year |
Annual base salary | $ 380 |
Target bonus, percent of base salary | 80.00% |
Target quarterly bonus, amount | $ 76 |
Quarterly target bonus, percentage | 150.00% |
Voluntary resignation period | 30 days |
Anniversary of Effective Date | 3 months |
Chapter 11 Proceedings (Acceler
Chapter 11 Proceedings (Acceleration of Debt) (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | Aug. 01, 2017 | |
Interest expense | $ 11,600 | ||
VNG Revolving Loan | Line of Credit | |||
Debt amount outstanding | 677,718 | $ 682,145 | |
Term Loan | Term Loan | |||
Debt amount outstanding | $ 123,438 | $ 123,438 | $ 125,000 |
Chapter 11 Proceedings (Liabili
Chapter 11 Proceedings (Liabilities Subject to Compromise) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Reorganizations [Abstract] | ||
Accounts payable | $ 3,233 | |
Accrued liabilities | 308 | |
Undistributed oil and gas revenues | 13,782 | |
Derivative liabilities | 53,870 | |
Other liabilities | 5 | |
Debt and accrued interest | 894,407 | |
Liabilities subject to compromise | $ 965,605 | $ 0 |
Chapter 11 Proceedings (Interes
Chapter 11 Proceedings (Interest Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Reorganizations [Abstract] | ||
Interest Expense | $ 15.7 | $ 15.7 |
Chapter 11 Proceedings (Reorgan
Chapter 11 Proceedings (Reorganization Items) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Reorganizations [Abstract] | ||||
Professional and legal fees | $ 24,743 | $ 610 | $ 36,820 | $ 2,317 |
Deferred financing costs and debt discount | 0 | 0 | 6,311 | 0 |
Total Reorganization items | 24,743 | $ 610 | 43,131 | $ 2,317 |
Accrued reorganization costs | 14,100 | 14,100 | ||
Total payments made for professional and legal fees related to Chapter 11 Cases | 22,700 | |||
Unamortized debt issuance costs and debt discounts | $ 6,300 | $ 6,300 |
Revenues (Details)
Revenues (Details) | Jun. 30, 2019 |
Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation period | 30 days |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation period | 90 days |
Transportation, gathering, processing and compression | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation period | 1 year |
Divestitures (Narrative) (Detai
Divestitures (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | |
Mar. 31, 2019 | Jun. 30, 2019 | |
Business Combinations [Abstract] | ||
Proceeds from divestiture | $ 4.4 | |
Transaction costs | $ 0.2 |
Debt (Financing Arrangements) (
Debt (Financing Arrangements) (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | Aug. 01, 2017 | |
Debt Instrument [Line Items] | |||
Unamortized deferred financing costs | $ 0 | $ (7,124) | |
Total debt | 901,878 | 889,635 | |
Liabilities subject to compromise | (881,878) | 0 | |
Short-term debt | (20,000) | 0 | |
Long-term debt classified as current | 0 | (879,181) | |
Current portion of Lease Financing Obligation | (5,008) | ||
Total long-term debt | $ 0 | 5,446 | |
Lease Financing Obligations | |||
Debt Instrument [Line Items] | |||
Stated interest rate (percent) | 4.16% | ||
Maturity Date | Aug. 10, 2020 | ||
Debt amount outstanding | $ 0 | $ 10,454 | |
VNG Revolving Loan | Line of Credit | |||
Debt Instrument [Line Items] | |||
Variable interest rate (percent) | 6.27% | ||
Maturity Date | Feb. 1, 2021 | ||
Debt amount outstanding | $ 677,718 | $ 682,145 | |
Term Loan | Term Loan | |||
Debt Instrument [Line Items] | |||
Variable interest rate (percent) | 9.96% | ||
Maturity Date | May 1, 2021 | ||
Debt amount outstanding | $ 123,438 | $ 123,438 | $ 125,000 |
New Money Facility | |||
Debt Instrument [Line Items] | |||
Variable interest rate (percent) | 7.92% | ||
Debt amount outstanding | $ 20,000 | 0 | |
VNG Notes | Senior Notes | |||
Debt Instrument [Line Items] | |||
Stated interest rate (percent) | 9.00% | ||
Maturity Date | Feb. 15, 2024 | ||
Debt amount outstanding | $ 80,722 | $ 80,722 |
Debt (Acceleration of Debt Obli
Debt (Acceleration of Debt Obligations) (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Debt Disclosure [Abstract] | ||
Debt issuance costs | $ 6.3 | |
Accrued liabilities | $ 12.5 | 12.5 |
Interest Expense | $ 15.7 | $ 15.7 |
Debt (VNG Credit Facility) (Det
Debt (VNG Credit Facility) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Aug. 01, 2017 |
VNG Revolving Loan | |||
Debt Instrument [Line Items] | |||
Current borrowing capacity | $ 677,900 | $ 850,000 | |
Term Loan | Term Loan | |||
Debt Instrument [Line Items] | |||
Debt amount outstanding | $ 123,438 | $ 123,438 | $ 125,000 |
Debt (VNG Notes) (Details)
Debt (VNG Notes) (Details) - VNG Notes - Senior Notes $ in Millions | Aug. 01, 2017USD ($) |
Debt Instrument [Line Items] | |
Debt amount outstanding | $ 80.7 |
Stated interest rate (percent) | 9.00% |
Debt (Exit Facility) (Details)
Debt (Exit Facility) (Details) - Subsequent Event - USD ($) | Jul. 16, 2019 | Jul. 15, 2019 |
Line of Credit | Revolving Loans | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 65,000,000 | $ 65,000,000 |
Term Loan | Term Loan B | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 285,000,000 | $ 285,000,000 |
Price Risk Management Activit_3
Price Risk Management Activities (Narrative) (Details) - USD ($) $ in Thousands | Apr. 01, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Gross Amounts of Recognized Assets | $ 22,361 | |
Commodity Contract | ||
Derivative [Line Items] | ||
Estimate of possible loss due to counterparty failure to perform, maximum | $ 53,900 | |
Gross Amounts of Recognized Assets | $ 22,361 |
Price Risk Management Activit_4
Price Risk Management Activities (Balance Sheet Presentation) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Offsetting Derivative Assets: | |
Gross Amounts of Recognized Assets | $ 22,361 |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | (9,308) |
Net Amounts Presented in the Condensed Consolidated Balance Sheets | 13,053 |
Offsetting Derivative Liabilities: | |
Gross Amounts of Recognized Liabilities | (15,791) |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | 9,308 |
Net Amounts Presented in the Condensed Consolidated Balance Sheets(1) | (6,483) |
Commodity Contract | |
Offsetting Derivative Assets: | |
Gross Amounts of Recognized Assets | 22,361 |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | (9,308) |
Net Amounts Presented in the Condensed Consolidated Balance Sheets | 13,053 |
Offsetting Derivative Liabilities: | |
Gross Amounts of Recognized Liabilities | (15,791) |
Gross Amounts Offset in the Condensed Consolidated Balance Sheets | 9,308 |
Net Amounts Presented in the Condensed Consolidated Balance Sheets(1) | $ (6,483) |
Price Risk Management Activit_5
Price Risk Management Activities (Change in Fair Value of Derivatives) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Fair Value, Net Derivative Asset (Liability), Reconciliation [Roll Forward] | |||
Derivative asset (liability) at beginning of period, net | $ 6,570 | $ (64,437) | $ (64,437) |
Net losses on commodity derivative contracts | (70,202) | (9,259) | |
Cash settlements paid on matured commodity derivative contracts | 9,762 | $ 27,139 | 80,266 |
Termination of commodity derivative contracts | 53,870 | 0 | |
Derivative asset at end of period, net | $ 0 | $ 6,570 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - Fair Value Measured on a Recurring Basis $ in Thousands | Dec. 31, 2018USD ($) |
Derivative Asset [Abstract] | |
Commodity price derivative contracts | $ 13,053 |
Total derivative instruments | 13,053 |
Liabilities: | |
Commodity price derivative contracts | (6,483) |
Total derivative instruments | (6,483) |
Fair Value Measurements Using Level 2 | |
Derivative Asset [Abstract] | |
Commodity price derivative contracts | 13,053 |
Total derivative instruments | 13,053 |
Liabilities: | |
Commodity price derivative contracts | (6,483) |
Total derivative instruments | $ (6,483) |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of oil and natural gas properties | $ 323,188 | $ 7,552 | $ 323,626 | $ 22,153 |
Properties Subject to Impairment Review | Fair Value Measurements Using Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Oil and natural gas properties, net cost basis | 546,200 | 89,100 | 546,200 | 89,100 |
Oil and natural gas properties, fair value | $ 222,600 | $ 66,900 | $ 222,600 | $ 66,900 |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Roll-forward of asset retirement obligations: | ||
Asset retirement obligation, beginning balance | $ 143,208 | $ 157,424 |
Liabilities added during the current period | 65 | 610 |
Accretion expense | 4,377 | 9,295 |
Liabilities related to assets divested | (294) | (16,687) |
Retirements | (1,563) | (2,499) |
Change in estimate | (22) | (4,935) |
Asset retirement obligation, ending balance | 145,771 | 143,208 |
Less: current obligations | (4,752) | |
Long-term asset retirement obligation | $ 141,019 | $ 139,433 |
Future inflation factor | 1.60% | 1.70% |
Minimum | ||
Roll-forward of asset retirement obligations: | ||
Credit-adjusted risk-free interest rate | 6.30% | 6.50% |
Maximum | ||
Roll-forward of asset retirement obligations: | ||
Credit-adjusted risk-free interest rate | 6.80% | 7.10% |
Leases (Lease Expense) (Details
Leases (Lease Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Short-term lease cost | $ 371 | $ 666 |
Operating lease cost | 670 | 1,521 |
Amortization of lease assets | 1,341 | 2,674 |
Interest on lease liabilities | 125 | 262 |
Net lease cost | $ 2,507 | $ 5,123 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Renewal term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Renewal term | 10 years |
Leases (Lease Terms and Discoun
Leases (Lease Terms and Discount Rates) (Details) | Jun. 30, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term, Operating leases | 5 years 9 months 27 days |
Weighted-average remaining lease term, Finance leases | 1 year 7 months 9 days |
Weighted-average discount rate, Operating leases | 18.50% |
Weighted-average discount rate, Finance leases | 5.70% |
Leases (Supplemental Balance Sh
Leases (Supplemental Balance Sheet Information) (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Operating lease assets | $ 5,699 |
Finance lease assets, at cost | 10,636 |
Accumulated amortization | (2,674) |
Finance lease assets, net | 7,962 |
Total lease assets | 13,661 |
Operating, current | 1,116 |
Finance, current | 5,183 |
Operating, long-term | 5,051 |
Finance, long-term | 2,969 |
Total lease liabilities | $ 14,319 |
Leases (Maturity) (Details)
Leases (Maturity) (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
2019 (remaining of year) | $ 1,221 |
2020 | 1,763 |
2021 | 1,557 |
2022 | 1,255 |
2023 | 1,247 |
Thereafter | 3,150 |
Total undiscounted lease liability | 10,193 |
Imputed interest | (4,026) |
Total discounted liability | 6,167 |
Finance Leases | |
2019 (remaining of year) | 2,755 |
2020 | 4,427 |
2021 | 1,347 |
2022 | 55 |
2023 | 0 |
Thereafter | 0 |
Total undiscounted lease liability | 8,584 |
Imputed interest | (432) |
Total discounted liability | 8,152 |
Total | |
2019 (remaining of year) | 3,976 |
2020 | 6,190 |
2021 | 2,904 |
2022 | 1,310 |
2023 | 1,247 |
Thereafter | 3,150 |
Total undiscounted lease liability | 18,777 |
Imputed interest | (4,458) |
Total discounted liability | $ 14,319 |
Leases (Supplemental Cash Flow)
Leases (Supplemental Cash Flow) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Leases [Abstract] | |||
Operating cash flows from operating leases | $ 1,870 | ||
Operating cash flows from finance leases | 262 | ||
Financing cash flows from finance leases | $ 2,484 | ||
Rent expense | $ 600 | $ 1,100 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Other Commitments [Line Items] | ||
Lease commitments | $ 9,236 | |
Remaining term of contracts | 1 year | |
Estimated commitments to third-party operators under joint operating agreements, due in the next 12 months | $ 9,600 | |
Pinedale Field Drilling And Green RIver Basin | ||
Other Commitments [Line Items] | ||
Estimated commitments to third-party operators under joint operating agreements, due in the next 12 months | 2,500 | |
Cotton Valley Gas Plant in Gulf Coast | ||
Other Commitments [Line Items] | ||
Estimated commitments to third-party operators under joint operating agreements, due in the next 12 months | $ 6,100 |
Commitments and Contingencies_3
Commitments and Contingencies (Lease Commitments) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 1,211 |
2020 | 1,149 |
2021 | 1,169 |
2022 | 1,204 |
2023 | 1,241 |
Thereafter | 3,262 |
Total | $ 9,236 |
Commitments and Contingencies_4
Commitments and Contingencies (Transportation Demand Charges) (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Gross future minimum transportation demand | |
July 1, 2019 - December 31, 2019 | $ 410 |
Due 2020 | 410 |
Total | $ 820 |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) (Earning Per Share) (Details) - shares | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Restricted Stock Units (RSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 301,065 | 143,181 |
Warrant | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 1,300,000 | 1,300,000 |
Share-Based Compensation (MIP R
Share-Based Compensation (MIP Restricted Stock) (Details) - Restricted Stock Units (RSUs) | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Time-Based Restricted Stock Units | |
Non-vested units at beginning of period (in units) | shares | 244,496 |
Vested (in units) | shares | (1,473) |
Non-vested units at end of period (in units) | shares | 243,023 |
Weighted Average Grant Date Fair Value | |
Non-vested units at beginning of period (in dollars per unit) | $ / shares | $ 16.62 |
Vested (in dollars per unit) | $ / shares | 11.99 |
Non-vested units at end of period (in dollars per unit) | $ / shares | $ 16.65 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non-cash compensation | $ 0.6 | $ 0.6 | $ 1.2 | $ 1.1 |
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | 2.7 | $ 2.7 | ||
Unrecognized compensation cost recognition period (in years) | 1 year 6 months | |||
TSR Performance RSU Replacement Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 0.8 | $ 0.8 | ||
Unrecognized compensation cost recognition period (in years) | 1 year 6 months |
Related Parties (Details)
Related Parties (Details) - Professional fees $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
RPA | |
Related Party Transaction [Line Items] | |
Professional fees | $ 2.2 |
Accrued professional services expense | 0.5 |
A&M Entity | |
Related Party Transaction [Line Items] | |
Professional fees | $ 0.2 |