| Basis of Presentation and Significant Accounting Policies | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned direct and indirect subsidiaries, and have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). All significant intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the consolidated financial position and results of operations for the indicated periods. All such adjustments are of a normal recurring nature. In January 2014, the Company’s Board of Directors declared a stock dividend on all shares of the Company’s outstanding common stock entitling stockholders of record as of the close of business on February 13, 2014, to receive an additional 1.4348 shares of common stock for every share of common stock held (the “Stock Dividend”). Payment of the Stock Dividend was effected on February 21, 2014 . Because the Stock Dividend exceeded 25% of the total shares of common stock outstanding prior to the distribution, it was considered a large stock dividend. Accordingly, it has been accounted for as a stock split under current accounting rules. The effect is a retroactive adjustment to the financial statements and associated footnotes as if the dividend had occurred at the beginning of the first period presented. In February 2014, the Company completed the acquisition of the remaining economic interests that it did not already own in the Production Sharing Contract covering Oil Mining Leases 120 and 121 located offshore Nigeria (the “OMLs”), which include the currently producing Oyo field (the “Allied Assets”), from Allied (the “Allied Transaction”). Pursuant to the terms of the Transfer Agreement entered into with Allied, the Company issued approximately 82.9 million shares of common stock to Allied, as partial consideration for the Allied Assets. Allied is a subsidiary of CEHL, the Company’s majority shareholder, and deemed to be under common control. Accordingly, the net assets acquired from Allied were recorded at their respective carrying values as of the acquisition date. The shares issued to Allied and the financial statements presented for all periods included herein are presented as though the transfer of the Allied Assets had occurred in June 2012, the effective date when Allied acquired the Allied Assets from an independent third party. See Note 4. — Acquisitions for further information. Effective April 22, 2015 , the Company implemented a reverse stock split, whereby each six shares of outstanding common stock pre-split was converted into one share of common stock post-split (the “reverse stock split”). All share and per share amounts for all periods presented herein have been adjusted to reflect the reverse stock split as if it had occurred at the beginning of the first period presented. Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts and activities of the Company, subsidiaries in which the Company has a controlling financial interest, and entities for which the Company is the primary beneficiary. All material intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates based on assumptions. Estimates affect the reported amounts of assets and liabilities, disclosure of contingent liabilities, and the reported amounts of revenues and expenses during the reporting periods. Accordingly, accounting estimates require the exercise of judgment. While management believes that the estimates and assumptions used in the preparation of the Company’s consolidated financial statements are appropriate, actual results could differ from those estimates. Estimates that may have a significant effect on the Company’s financial position and results from operations include share-based compensation assumptions, oil and natural gas reserve quantities, impairment of oil and gas properties, depletion and amortization relating to oil and gas properties, asset retirement obligation assumptions, and income taxes. The accounting estimates used in the preparation of the consolidated financial statements may change as new events occur, more experience is acquired, additional information is obtained and our operating environment changes. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, demand deposits and short-term investments with initial maturities of three months or less. Restricted Cash Restricted cash consists of cash deposits that are contractually restricted for withdrawal or required to be maintained in a reserve bank account for a specific period of time, as provided for under certain agreements with third parties. Restricted cash as of December 31, 2015 and 2014 , consists of $8.7 million and $10.4 million , respectively, held in a debt service reserve account to secure certain interest and principal repayments pursuant to the Term Loan Facility in Nigeria. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are accounted for at cost less allowance for doubtful accounts. The Company establishes provisions for losses on accounts receivable if it is determined that collection of all or a part of an outstanding balance is not probable. Collectability is reviewed regularly and an allowance is established or adjusted, as necessary, using the specific identification method. As of December 31, 2015 and 2014 , no allowance for doubtful accounts was necessary. As of December 31, 2015 , the Company had a $1.0 million trade receivable for the remaining balance owed from its December 2015 crude oil sale. As of December 31, 2014, the trade receivable balance was nil . Partner accounts receivable consist of balances owed from joint venture (“JV”) partners. As of December 31, 2015 and 2014 , the Company was owed $0.3 million and $0.5 million from its Ghana JV partners for their share of the expenditures incurred in the Shallow Water Tano block, pursuant to the Ghana JV Joint Operating Agreement. Crude Oil Inventory Inventories of crude oil are valued at the lower of cost or market using the first-in, first-out method and include certain costs directly related to the production process. The Company had crude oil inventory of $4.8 million and $1.1 million as of December 31, 2015 and 2014 , respectively. Successful Efforts Method of Accounting for Oil and Gas Activities The Company follows the successful efforts method of accounting for its costs of acquisition, exploration and development of oil and gas properties. Under this method, oil and gas lease acquisition costs and intangible drilling costs associated with exploration efforts that result in the discovery of proved reserves and costs associated with development drilling, whether or not successful, are capitalized when incurred. Drilling costs of exploratory wells are capitalized pending determination that proved reserves have been found. If the determination is dependent upon the results of planned additional wells and require additional capital expenditures to develop the reserves, the drilling costs will be capitalized as long as sufficient reserves have been found to justify completion of the exploratory well as a producing well, and additional wells are underway or firmly planned to complete the evaluation of the well. Exploratory wells not meeting the criteria for continued capitalization are expensed when such a determination is made. Other exploration costs are expensed as incurred. A portion of the Company’s oil and gas properties include oilfield materials and supplies inventory to be used in connection with the Company’s drilling program. These inventories are stated at the lower of cost or market, which approximates fair value, and they are regularly assessed for obsolescence. Oilfield materials and supplies inventory balances were $30.0 million and $30.5 million at December 31, 2015 and 2014 , respectively. Depreciation, depletion and amortization costs for productive oil and gas properties are recorded on a unit-of-production basis. For other depreciable property, depreciation is recorded on a straight-line basis over the estimated useful life of the assets, which range between three to five years , or the lease term if shorter. Repairs and maintenance charges, including workover costs, are charged to expense as incurred. Impairment of Long-Lived Assets The Company reviews its long-lived assets in property, plant and equipment for impairment each reporting period, or whenever changes in circumstances indicate that the carrying amount of assets may not be fully recoverable. Possible indicators of impairment include lower expected future oil and gas prices, actual or expected future development or operating costs significantly higher than previously anticipated, significant downward oil and gas reserve revisions, or when changes in other circumstances indicate the carrying amount of an asset may not be recoverable. An impairment loss is recognized for proved properties when the estimated undiscounted future cash flows expected to result from the asset are less than its carrying amount. The Company estimates the future undiscounted cash flows of the affected properties to judge the recoverability of carrying amounts. Cash flows are determined on the basis of reasonable and documented assumptions that represent the best estimate of the future economic conditions during the remaining useful life of the asset. The Company’s cash flow projections into the future include assumptions on variables, such as future sales, sales prices, operating costs, economic conditions, market competition and inflation. Prices used to quantify the expected future cash flows are estimated based on forward prices prevailing in the marketplace and management’s long-term planning assumptions. Impairment is measured by the excess of carrying amount over the fair value of the assets. Unevaluated leasehold costs are assessed for impairment at the end of each reporting period and transferred to proved oil and gas properties to the extent they are associated with successful exploration activities. Significant unevaluated leasehold costs are assessed individually for impairment, based on the Company’s current exploration plans, and any indicated impairment is charged to expense. Asset Retirement Obligations The Company accounts for asset retirement obligations in accordance with applicable accounting guidelines , which require that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred. Specifically, the Company records a liability for the present value, using a credit-adjusted risk free interest rate, of the estimated site restoration costs with a corresponding increase to the carrying amount of the related long-lived assets. Revenues Revenues are recognized when crude oil is delivered to a buyer. The recognition criteria are satisfied when there exists a signed contract with defined pricing, delivery, and acceptance, as defined in a contract, and there is no significant uncertainty of collectability. Crude oil revenues are recorded net of royalties. Income Taxes The Company provides for income taxes using the asset and liability method of accounting for income taxes in accordance with applicable accounting rules. Under the asset and liability method, deferred tax assets and liabilities are recognized for temporary differences between the tax bases of assets and liabilities and their carrying values for financial reporting purposes and for 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 income in the period that includes the enactment date. A valuation allowance is established to reduce deferred tax assets to their net realizable amounts if it is more likely than not that the related tax benefits will not be fully realized. The Company routinely evaluates any tax deduction and tax refund positions in a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained. If that test is met, the second step is to determine the amount of benefit or expense to recognize in the consolidated financial statements. See Note 13. — Income Taxes for further information. Debt Issuance Costs Debt issuance costs consist of certain costs paid to lenders in the process of securing a borrowing facility. Debt issuance costs incurred are capitalized and subsequently charged to interest expense over the term of the related debt, using the effective interest rate method. As of December 31, 2015 and 2014 , unamortized debt issuance costs were $1.6 million and $1.9 million , of which nil and $1.3 million was classified as long-term, respectively. The current portion of the debt issuance costs, which was $1.6 million and $0.6 million as of December 31, 2015 and 2014 , respectively, was recorded in prepaids and other current assets. Capitalized Interest The Company capitalizes interest costs for qualifying oil and gas properties. The capitalization period begins when expenditures are incurred on qualified properties, activities begin which are necessary to prepare the property for production, and interest costs have been incurred. The capitalization period continues as long as these events occur. Capitalized interest is added to the cost of the underlying assets and is depleted using the unit-of-production method in the same manner as the underlying assets. During the years ended December 31, 2015 and 2014 , the Company capitalized $2.2 million and $0.3 million , respectively, in interest cost as additions to property, plant and equipment related to the Oyo field redevelopment campaign. Stock-Based Compensation The Company recognizes all stock-based payments to employees, including grants of employee stock options, in the consolidated financial statements based on their grant-date fair values. The Company values its stock options awarded using the Black-Scholes option pricing model. Restricted stock awards are valued at the grant date closing market price. Stock-based compensation costs are recognized over the vesting period, which is the period during which the employee is required to provide service in exchange for the award. Stock-based compensation paid to non-employees are valued at the fair value of the goods or services provided at the applicable measurement date and charged to expense as services are rendered. Reporting and Functional Currency The Company has adopted the U.S. dollar as the functional currency for all of its foreign subsidiaries. Gains and losses on foreign currency transactions are included in results of operations. Net Earnings (Loss) Per Common Share Basic net earnings or loss per common share is computed by dividing net earnings or loss by the weighted average number of shares of common stock outstanding at the end of the reporting period. Diluted net earnings or loss per share is computed by dividing net earnings or loss by the fully dilutive common stock equivalent, which consists of shares outstanding, augmented by potentially dilutive shares issuable upon the exercise of the Company’s stock options, non-vested restricted stock awards, and stock warrants and conversion of the Convertible Subordinated Note, calculated using the treasury stock method. The table below sets forth the number of stock options, warrants, non-vested restricted stock, and shares issuable upon conversion of Convertible Subordinated Note that were excluded from dilutive shares outstanding during the years ended December 31, 2015 , 2014 and 2013 , as these securities are anti-dilutive because the Company was in a loss position each year. Years Ended December 31, (In thousands) 2015 2014 2013 Stock options 1,101 1,038 — Stock warrants 541 6 — Non-vested restricted stock awards 1,275 997 359 Convertible note 12,379 10,932 — 15,296 12,973 359 Upon the occurrence of certain events, the Company is also contingently liable to make additional payments to Allied, under the Transfer Agreement, up to an additional amount totaling $50.0 million in cash, or the equivalent in shares of the Company’s common stock, at Allied’s option. See Note 11. — Commitments and Contingencies for further information. Non-Controlling Interests The Company reports its non-controlling interests as a separate component of equity. The Company also presents the consolidated net loss and the portion of the consolidated net loss allocable to the non-controlling interests and to the shareholders of the Company separately in its consolidated statements of operations. Losses attributable to the non-controlling interests are allocated to the non-controlling interests even when those losses are in excess of the non-controlling interests’ investment basis. As of December 31, 2015 and 2014 , the non-controlling interest recorded in equity was $0.8 million and $0.7 million , respectively, attributable to the joint ownership of an affiliate in our Erin Energy Ghana Limited subsidiary. Fair Value Measurements Fair value is defined as the amount at which an asset (or liability) could be bought (or incurred) or sold (or settled) in an orderly transaction between market participants at the measurement date. The established framework for measuring fair value establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and includes certain disclosure requirements. Fair value estimates are based on either (i) actual market data or (ii) assumptions that other market participants would use in pricing an asset or liability, including estimates of risk. There are three levels of valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels are defined as follows: Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an on-going basis. Level 2 - Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Substantially all of these inputs are observable in the marketplace throughout the term, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace. Level 3 - Inputs that are unobservable and significant to the fair value measurement (including the Company’s own assumptions in determining fair value). The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair Value on a Non-Recurring Basis The Company used discounted cash flow techniques to determine the estimated fair value of its oil and gas properties as part of the Company's analysis for impairment. Accordingly, the Company estimated the present value of expected future net cash flows from the Oyo field, discounted using risk-adjusted cost of capital. Significant Level 3 assumptions used in the calculation include the Company's estimate of future crude oil prices, production costs, development costs, and anticipated production of proved reserves, as well as appropriate risk-adjusted probable and possible reserves. The following table presents information about the Company’s oil and gas properties measured at fair value on a non-recurring basis: Level 3 As of December 31, (in thousands) 2015 2014 Value of oil and gas properties (1) $ 272,848 $ — (1) This represents non-financial assets that are measured at fair value on a non-recurring basis due to impairments. This is the fair value of the asset base that was subjected to impairment and does not reflect the entire asset balance as presented on the accompanying balance sheets. Please see Note 5. — Property, Plant and Equipment for further information. There was no impairment to the Company's oil and gas properties for the year ended December 31, 2014 . Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, restricted cash, accounts receivable, inventory, deposits, accounts payable and accrued liabilities, and debts at floating interest rates, approximate their fair values at December 31, 2015 and 2014 , respectively, principally due to the short-term nature, maturities or nature of interest rates of the above listed items. Risks and Uncertainties The Company’s producing properties are located offshore Nigeria. Substantially all of the Company’s crude oil available for sale is sold under spot sales contracts and is delivered Free on Board ("FOB") at the point of transfer from the FPSO, as is customary in the industry. During 2015, the Company sold its crude oil under spot sales contracts with two ( 2 ) customers. The Company believes that the potential loss of one or both of these customers would not prevent it from selling its crude oil, as it will find other buyers for its crude oil. Reclassification Certain reclassifications have been made to the 2014 and 2013 consolidated financial statements to conform to the 2015 presentation. These reclassifications were not material to the accompanying consolidated financial statements. Recently Issued Accounting Standards In January 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. ASU No. 2015-01 eliminates from US GAAP the concept of extraordinary items, and is effective for fiscal years beginning after December 15, 2015. The Company will adopt this standards update, as required, beginning with the first quarter of 2016. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU No. 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. ASU No. 2015-02 is effective for interim and annual periods beginning after December 15, 2015, and the Company will adopt this standards update, as required, beginning with the first quarter of 2016. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which is guidance for the reporting of debt issuance costs related to a recognized debt liability on an entity's balance sheet. Under the guidance, an entity must report debt issuance costs as a direct deduction from the carrying amount of that debt liability, consistent with the treatment for debt discounts. ASU No. 2015-03 is effective for interim and annual periods beginning after December 15, 2015; early adoption is permitted for financial statements that have not been previously issued. The Company will adopt this standards update beginning with the first quarter of 2016. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. ASU No. 2015-11 simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. The FASB defines net realizable value as the “estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” Under current guidance, an entity subsequently measures inventory at the lower of cost or market, with market defined as the replacement cost, net realizable value or net realizable value less a normal profit margin. An entity uses current replacement cost provided that it is not above net realizable value (i.e. the ceiling) or below net realizable value less an “approximately normal profit margin” (i.e. the floor). ASU No. 2015-11 eliminates this analysis for entities within the scope of the guidance. ASU No. 2015-11 applies to entities that recognize inventory within the scope of ASC 330, except for inventory measured under the LIFO method or the retail inventory method. ASU No. 2015-11 is effective for interim and annual periods beginning after December 15, 2016, and the Company will adopt this standards update, as required, beginning with the first quarter of 2017. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date. ASU 2015-14 defers the effective date of revenue standard ASU 2014-09 by one year for all entities. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU No. 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. With the issuance of ASU No. 2015-14, the Company is required to adopt revenue standard ASU No. 2014-09 beginning with the first quarter of 2018. The Company is continuing to evaluate the impact of the adoption of this guidance on its consolidated financial statements. In August 2015, the FASB issued ASU No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting. ASU 2015-15 addresses line-of-credit arrangements that were omitted from Accounting Standards Update No. 2015-03. Under the guidance, the SEC staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU No. 2015-15 is effective for interim and annual periods beginning after December 15, 2015; early adoption is permitted for financial statements that have not been previously issued. The Company will adopt this standards update beginning with the first quarter of 2016. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. Under ASU No. 2015-16, an acquirer must recognize adjustments to provisional amounts in business combinations that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, including the cumulative effect of the change in provisional amount as if the accounting had been completed at the acquisition date. The adjustments related to previous reporting periods since the acquisition date must be disclosed by income statement line item either on the face of the income statement or in the notes. ASU No. 2015-16 is effective for interim and annual periods beginning after December 15, 2016, and the Company will adopt this standards update, as required, beginning with the first quarter of 2017. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 704): Balance Sheet Classification of Deferred Taxes. ASU No. 2015-17 eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and non-current in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as non-current. ASU No. 2015-17 is effective for interim and annual periods beginning after December 15, 2016, and the Company will adopt this standards update, as required, beginning with the first quarter of 2017. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements. |
