Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 30, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | AREX | |
Entity Registrant Name | Approach Resources Inc | |
Entity Central Index Key | 1,405,073 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 40,470,643 |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 319 | $ 432 |
Accounts receivable: | ||
Joint interest owners | 68 | 132 |
Oil, NGL and gas sales | 14,848 | 19,635 |
Unrealized gain on commodity derivatives | 16,201 | 39,951 |
Prepaid expenses and other current assets | 1,116 | 929 |
Total current assets | 32,552 | 61,079 |
PROPERTIES AND EQUIPMENT: | ||
Oil and gas properties, at cost, using the successful efforts method of accounting | 1,852,377 | 1,708,278 |
Furniture, fixtures and equipment | 5,635 | 5,561 |
Total oil and gas properties and equipment | 1,858,012 | 1,713,839 |
Less accumulated depletion, depreciation and amortization | (682,557) | (382,180) |
Net oil and gas properties and equipment | 1,175,455 | 1,331,659 |
Unrealized gain on commodity derivatives | 821 | |
Total assets | 1,208,828 | 1,392,738 |
CURRENT LIABILITIES: | ||
Accounts payable | 13,550 | 33,336 |
Oil, NGL and gas sales payable | 4,611 | 8,536 |
Deferred income taxes - current | 5,670 | 14,242 |
Accrued liabilities | 21,364 | 50,738 |
Total current liabilities | 45,195 | 106,852 |
NON-CURRENT LIABILITIES: | ||
Senior secured credit facility, net | 275,579 | 147,072 |
Senior notes, net | 240,014 | 244,239 |
Deferred income taxes | 26,128 | 110,677 |
Asset retirement obligations | 10,035 | 9,571 |
Total liabilities | $ 596,951 | $ 618,411 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized none outstanding | ||
Common stock, $0.01 par value, 90,000,000 shares authorized, 40,442,397 and 39,814,199 issued and outstanding, respectively | $ 400 | $ 399 |
Additional paid-in capital | 578,782 | 572,888 |
Retained earnings | 32,695 | 201,040 |
Total stockholders' equity | 611,877 | 774,327 |
Total liabilities and stockholders' equity | $ 1,208,828 | $ 1,392,738 |
Unaudited Consolidated Balance3
Unaudited Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, issued | 40,442,397 | 39,814,199 |
Common stock, outstanding | 40,442,397 | 39,814,199 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
REVENUES: | |||||
Oil, NGL and gas sales | $ 33,941 | $ 68,124 | $ 105,844 | $ 203,459 | |
EXPENSES: | |||||
Lease operating | 7,681 | 7,665 | 21,744 | 23,462 | |
Production and ad valorem taxes | 2,700 | 3,335 | 8,502 | 12,429 | |
Exploration | 1,956 | 891 | 4,211 | 3,595 | |
General and administrative | [1] | 7,270 | 7,675 | 22,882 | 23,612 |
Termination costs | 1,436 | 1,436 | |||
Impairment of oil and gas properties | 220,197 | 220,197 | |||
Depletion, depreciation and amortization | 31,222 | 25,959 | 86,146 | 78,138 | |
Total expenses | 272,462 | 45,525 | 365,118 | 141,236 | |
OPERATING (LOSS) INCOME | (238,521) | 22,599 | (259,274) | 62,223 | |
OTHER: | |||||
Interest expense, net | (6,465) | (5,442) | (18,630) | (15,936) | |
Gain on debt extinguishment | 1,483 | 1,483 | |||
Equity in losses of investee | (186) | ||||
Realized gain (loss) on commodity derivatives | 12,755 | (764) | 37,937 | (5,423) | |
Unrealized gain (loss) on commodity derivatives | 296 | 18,810 | (22,929) | 5,206 | |
Other expense | (91) | (53) | (109) | ||
(LOSS) INCOME BEFORE INCOME TAX (BENEFIT) PROVISION | (230,543) | 35,203 | (261,466) | 45,775 | |
INCOME TAX (BENEFIT) PROVISION | (81,756) | 12,756 | (93,121) | 16,590 | |
NET (LOSS) INCOME | $ (148,787) | $ 22,447 | $ (168,345) | $ 29,185 | |
(LOSS) EARNINGS PER SHARE: | |||||
Basic | $ (3.67) | $ 0.57 | $ (4.16) | $ 0.74 | |
Diluted | $ (3.67) | $ 0.57 | $ (4.16) | $ 0.74 | |
WEIGHTED AVERAGE SHARES OUTSTANDING: | |||||
Basic | 40,541,420 | 39,363,441 | 40,419,187 | 39,325,552 | |
Diluted | 40,541,420 | 39,379,779 | 40,419,187 | 39,340,961 | |
[1] | Includes non-cash share-based compensation expense as follows: 1,708 1,965 6,000 5,726 |
Unaudited Consolidated Stateme5
Unaudited Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Includes non-cash share-based compensation expense | $ 1,708 | $ 1,965 | $ 6,000 | $ 5,726 |
Unaudited Consolidated Stateme6
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
OPERATING ACTIVITIES: | ||
Net (loss) income | $ (168,345) | $ 29,185 |
Adjustments to reconcile net (loss) income to cash provided by operating activities: | ||
Depletion, depreciation and amortization | 86,146 | 78,138 |
Impairment of oil and gas properties | 220,197 | |
Amortization of debt issuance costs | 1,178 | 1,151 |
Gain on debt extinguishment | (1,483) | |
Unrealized loss (gain) on commodity derivatives | 22,929 | (5,206) |
Exploration expense | 1,626 | 3,595 |
Share-based compensation expense | 6,000 | 5,726 |
Deferred income tax (benefit) expense | (93,121) | 16,590 |
Equity in losses of investee | 186 | |
Other non-cash items | 53 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 4,851 | 2,090 |
Prepaid expenses and other current assets | (240) | (169) |
Accounts payable | (216) | (520) |
Oil, NGL and gas sales payable | (3,925) | 3,607 |
Accrued liabilities | 6,865 | 1,092 |
Cash provided by operating activities | 82,515 | 135,465 |
INVESTING ACTIVITIES: | ||
Additions to oil and gas properties | (151,226) | (297,122) |
Contribution to equity method investment | (186) | |
Change in restricted cash | 7,350 | |
Additions to furniture, fixtures and equipment, net | (74) | (2,672) |
Change in working capital related to investing activities | (55,915) | 12,765 |
Cash used in investing activities | (207,215) | (279,865) |
FINANCING ACTIVITIES: | ||
Borrowings under credit facility | 241,500 | 231,421 |
Repayment of amounts outstanding under credit facility | (113,500) | (141,921) |
Extinguishment of senior notes | (3,413) | |
Debt issuance costs | (2,227) | |
Cash provided by financing activities | 124,587 | 87,273 |
CHANGE IN CASH AND CASH EQUIVALENTS | (113) | (57,127) |
CASH AND CASH EQUIVALENTS, beginning of period | 432 | 58,761 |
CASH AND CASH EQUIVALENTS, end of period | 319 | 1,634 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 13,216 | 10,529 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTION: | ||
Asset retirement obligations capitalized | $ 151 | $ 428 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Organization and Nature of Operations Approach Resources Inc. (“Approach,” the “Company,” “we,” “us” or “our”) is an independent energy company engaged in the exploration, development, production and acquisition of oil and gas properties. We focus on finding and developing oil and natural gas reserves in oil shale and tight gas sands. Substantially all of our properties are located in the Permian Basin in West Texas. Consolidation, Basis of Presentation and Significant Estimates The interim consolidated financial statements of the Company are unaudited and contain all adjustments (consisting primarily of normal recurring accruals) necessary for a fair statement of the results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full year, due in part to the volatility in prices for oil, natural gas liquids (“NGLs”) and gas, future commodity prices for commodity derivative contracts, global economic and financial market conditions, interest rates, access to sources of liquidity, estimates of reserves, drilling risks, geological risks, transportation restrictions, the timing of acquisitions, product supply and demand, market competition and interruptions of production. You should read these consolidated interim financial statements in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission on February 26, 2015. The accompanying interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of the Company and its wholly owned subsidiaries. Intercompany accounts and transactions are eliminated. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures of contingencies. Actual results may differ from those estimates. Significant assumptions are required in the valuation of proved oil and gas reserves, which affect our estimate of depletion expense as well as our impairment analyses. Significant assumptions also are required in our estimation of accrued liabilities, commodity derivatives, income tax provision, share-based compensation and asset retirement obligations. It is at least reasonably possible these estimates could be revised in the near term, and these revisions could be material. Certain prior-year amounts have been reclassified to conform to current-year presentation. These classifications have no impact on the net (loss) income reported. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update for “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements in “Topic 605, Revenue Recognition.” This accounting standard update provides new guidance concerning recognition and measurement of revenue and requires additional disclosures about the nature, timing and uncertainty of revenue and cash flows arising from contracts with customers. This new guidance permits adoption through the use of either a full retrospective approach or a modified retrospective approach for annual reporting periods beginning on or after December 15, 2016, with early application not permitted. In July 2015, FASB delayed the effective date one year, making the new standard effective for interim periods and annual periods beginning after December 15, 2017. We have not determined which transition method we will use and are continuing to evaluate our existing revenue recognition policies to determine whether any of our contracts will be affected by the new requirements. In April 2015, FASB issued an accounting standards update for “Interest – Imputation of Interest,” which simplifies the presentation of debt issuance costs. This accounting standard update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This new update is effective for financial statements issued for fiscal years beginning after December 15, 2015 (and interim periods within those fiscal years), with early adoption permitted and retrospective application required. We adopted this accounting standard update during the second quarter. The adoption of this new accounting standard update resulted in a reclassification of debt issuance costs from Other assets to Senior secured credit facility, net and Senior notes, net. See Note 4 “Long-Term Debt” for disclosure of debt issuance costs. Adoption of this accounting standard update did not impact our statements of operations or cash flows. In September 2015, FASB issued an accounting standards update for “Business Combinations,” which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This new update is effective for financial statements issued for fiscal years beginning after December 15, 2015 (and interim periods within those fiscal years). This new guidance will be adopted prospectively in the first quarter of 2016. The Company is evaluating the impact of this new guidance and does not expect it to have a significant impact on the consolidated financial statements. |
Impairment of Oil and Gas Prope
Impairment of Oil and Gas Properties | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Impairment of Oil and Gas Properties | 2. Impairment of Oil and Gas Properties Capitalized costs related to proved oil and gas properties, including wells and related equipment and facilities, are periodically evaluated for potential impairment when events or circumstances indicate that the carrying values of those assets may not be recoverable in accordance with ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets Estimating future net cash flows involves the use of judgments, including estimation of the proved and unproved oil, NGL and natural gas reserve quantities, timing of development and production, expected future commodity prices, capital expenditures and production costs. The fair value of the proved oil and gas properties and equipment was estimated using a discounted cash flow model, which is a Level 3 fair value measurement. Significant inputs used to determine the fair value include estimates of: (i) future sales prices for oil and gas based on NYMEX strip prices; (ii) pricing adjustments for differentials; (iii) production costs; (iv) capital expenditures; (v) future oil and gas reserves to be recovered and the timing thereof; and (vi) discount rate. For the three and nine months ended September 30, 2015, we recognized an impairment loss of $214.7 million related primarily to our vertical Canyon wells, due to the impact of the sharp decline in forward commodity prices during the three months ended September 30, 2015. At September 30, 2015, we had $22 million in value recorded for these properties, which is the estimated fair value. Our estimates of future cash flows attributable to our oil and gas properties could decline further with commodity prices which may result in additional impairment losses. Unproved oil and gas properties that are individually significant are periodically assessed for impairment of value, and a loss is recognized at the time of impairment by providing an impairment allowance. Certain leases outside of our core development project were impaired during the three and nine months ended September 30, 2015, as we do not plan to develop them in the current commodity price environment. As a result, we recorded a non-cash impairment loss of unproved property of $5.5 million for the three and nine months ended September 30, 2015. The total impairment loss of $220.2 million for the three and nine months ended September 30, 2015, is recorded in impairment of oil and gas properties on our consolidated statements of operations, and in accumulated depletion, depreciation and amortization on our consolidated balance sheets. |
Earnings Per Common Share
Earnings Per Common Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | 3. Earnings Per Common Share We report basic earnings per common share, which excludes the effect of potentially dilutive securities, and diluted earnings per common share, which includes the effect of all potentially dilutive securities unless their impact is antidilutive. The following table provides a reconciliation of the numerators and denominators of our basic and diluted earnings per share (dollars in thousands, except per-share amounts). Three Months Ended Nine Months Ended 2015 2014 2015 2014 Income (numerator): Net (loss) income – basic $ (148,787 ) $ 22,447 $ (168,345 ) $ 29,185 Weighted average shares (denominator): Weighted average shares – basic 40,541,420 39,363,441 40,419,187 39,325,552 Dilution effect of share-based compensation, treasury method — (1) 16,338 — (1) 15,409 Weighted average shares – diluted 40,541,420 39,379,779 40,419,187 39,340,961 Net (loss) income per share: Basic $ (3.67 ) $ 0.57 $ (4.16 ) $ 0.74 Diluted $ (3.67 ) $ 0.57 $ (4.16 ) $ 0.74 (1) Approximately 39,000 options to purchase our common stock were excluded from this calculation because they were antidilutive for the three and nine months ended September 30, 2015. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 4. Long-Term Debt The following table provides a summary of our long-term debt at September 30, 2015, and December 31, 2014 (in thousands). September 30, December 31, 2015 2014 Senior secured credit facility: Outstanding borrowings $ 278,000 $ 150,000 Debt issuance costs (2,421 ) (2,928 ) Senior secured credit facility, net 275,579 147,072 Senior notes: Principal 245,000 250,000 Debt issuance costs (4,986 ) (5,761 ) Senior notes, net 240,014 244,239 Total long-term debt $ 515,593 $ 391,311 Senior Secured Credit Facility At September 30, 2015, the borrowing base and aggregate lender commitments under our amended and restated senior secured credit facility (the “Credit Facility”) were $450 million, with maximum commitments from the lenders of $1 billion. The Credit Facility has a maturity date of May 7, 2019. The borrowing base is redetermined semi-annually based on our oil, NGL and gas reserves. We, or the lenders, can each request one additional borrowing base redetermination each calendar year. In September 2015, the lenders under the Credit Facility completed their semi-annual borrowing base redetermination, which reaffirmed the aggregate lender commitments of $450 million and decreased the borrowing base to $450 million from $525 million. Borrowings bear interest based on the agent bank’s prime rate plus an applicable margin ranging from 0.50% to 1.50%, or the sum of the LIBOR rate plus an applicable margin ranging from 1.50% to 2.50%. In addition, we pay an annual commitment fee ranging from 0.375% to 0.50% of unused borrowings available under the Credit Facility. Margins vary based on the borrowings outstanding compared to the borrowing base of the lenders. We had outstanding borrowings of $278 million under the Credit Facility at September 30, 2015, compared to $150 million of outstanding borrowings at December 31, 2014. The weighted average interest rate applicable to borrowings under the Credit Facility for the nine months ended September 30, 2015, was 2.1%. We had outstanding unused letters of credit under the Credit Facility totaling $0.3 million at September 30, 2015, and December 31, 2014, which reduce amounts available for borrowing under the Credit Facility. Obligations under the Credit Facility are secured by mortgages on substantially all of the oil and gas properties of the Company and its subsidiaries. The Company is required to maintain liens covering the oil and gas properties of the Company and its subsidiaries, representing at least 80% of the total value of all oil and gas properties of the Company and its subsidiaries. Covenants The Credit Facility contains two principal financial covenants: • a consolidated modified current ratio covenant (as defined in the Credit Facility) that requires us to maintain a ratio of not less than 1.0 to 1.0 as of the last day of any fiscal quarter, and • a consolidated interest coverage ratio covenant (as defined in the Credit Facility) that requires us to maintain a ratio of consolidated EBITDAX to interest for the preceding four fiscal quarters of not less than 2.5 to 1.0 as of the last day of any fiscal quarter. The Credit Facility also contains covenants restricting cash distributions and other restricted payments, transactions with affiliates, incurrence of other debt, consolidations and mergers, the level of operating leases, asset sales, investment in other entities and liens on properties. In addition, the obligations of the Company may be accelerated upon the occurrence of an Event of Default (as defined in the Credit Facility). Events of Default include customary events for a financing agreement of this type, including, without limitation, payment defaults, the inaccuracy of representations and warranties, defaults in the performance of affirmative or negative covenants, defaults on other indebtedness of the Company or its subsidiaries, bankruptcy or related defaults, defaults related to judgments and the occurrence of a Change of Control (as defined in the Credit Facility), which includes instances where a third party becomes the beneficial owner of more than 50% of the Company’s outstanding equity interests entitled to vote. Senior Notes In June 2013, we completed our public offering of $250 million principal amount of 7% Senior Notes due 2021 (the “Senior Notes”). Annual interest on the Senior Notes is payable semi-annually on June 15 and December 15. In August 2015, we repurchased a portion of our Senior Notes in the open market with an aggregate face value of $5 million for a purchase price of $3.5 million, including accrued interest. This resulted in a gain on extinguishment of debt of $1.5 million. We issued the Senior Notes under a senior indenture dated June 11, 2013, among the Company, our subsidiary guarantors and Wells Fargo Bank, National Association, as trustee. The senior indenture, as supplemented by a supplemental indenture dated June 11, 2013, is referred to as the “Indenture.” On and after June 15, 2016, we may redeem some or all of the Senior Notes at specified redemption prices, plus accrued and unpaid interest to the redemption date. Before June 15, 2016, we may redeem up to 35% of the Senior Notes at a redemption price of 107% of the principal amount, plus accrued and unpaid interest to the redemption date, with the proceeds of certain equity offerings. In addition, before June 15, 2016, we may redeem some or all of the Notes for cash at a redemption price equal to 100% of their principal amount plus an applicable make-whole premium and accrued and unpaid interest to the redemption date. If we sell certain of our assets or experience specific kinds of changes of control, we may be required to offer to purchase the Senior Notes from holders. The Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by each of our subsidiaries, subject to certain customary release provisions. A subsidiary guarantor may be released from its obligations under the guarantee: • in connection with any sale or other disposition of all or substantially all of the assets of that guarantor (including by way of merger or consolidation) to a person that is not (either before or after giving effect to such transaction) the Company or a subsidiary guarantor, if the sale or other disposition otherwise complies with the Indenture; • in connection with any sale or other disposition of the capital stock of that guarantor to a person that is not (either before or after giving effect to such transaction) the Company or a subsidiary guarantor, if that guarantor no longer qualifies as a subsidiary of the Company as a result of such disposition and the sale or other disposition otherwise complies with the Indenture; • if the Company designates any restricted subsidiary that is a guarantor to be an unrestricted subsidiary in accordance with the Indenture; • upon defeasance or covenant defeasance of the notes or satisfaction and discharge of the Indenture, in each case, in accordance with the Indenture; • upon the liquidation or dissolution of that guarantor, provided that no default or event of default occurs under the Indenture as a result thereof or shall have occurred and is continuing; or • in the case of any restricted subsidiary that, after the issue date of the notes is required under the Indenture to guarantee the notes because it becomes a guarantor of indebtedness issued or an obligor under a credit facility with respect to the Company and/or its subsidiaries, upon the release or discharge in full from its (i) guarantee of such indebtedness or (ii) obligation under such credit facility, in each case, which resulted in such restricted subsidiary’s obligation to guarantee the notes. The Indenture restricts our ability, among other things, to (i) sell certain assets, (ii) pay distributions on, redeem or repurchase, equity interests, (iii) incur additional debt, (iv) make certain investments, (v) enter into transactions with affiliates, (vi) incur liens and (vii) merge or consolidate with another company. These restrictions are subject to a number of important exceptions and qualifications. If at any time the Senior Notes are rated investment grade by both Moody’s Investors Service and Standard & Poor’s Ratings Services and no default (as defined in the Indenture) has occurred and is continuing, many of these restrictions will terminate. The Indenture contains customary events of default. Subsidiary Guarantors The Senior Notes are guaranteed on a senior unsecured basis by each of our consolidated subsidiaries. Approach Resources Inc. is a holding company with no independent assets or operations. The subsidiary guarantees are full and unconditional and joint and several, and any subsidiaries of the Company other than the subsidiary guarantors are minor. There are no significant restrictions on the Company’s ability, or the ability of any subsidiary guarantor, to obtain funds from its subsidiaries through dividends, loans, advances or otherwise. At September 30, 2015, we were in compliance with all of our covenants, and there were no existing defaults or events of default, under our debt instruments. |
Termination Costs
Termination Costs | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Termination Costs | 5. Termination Costs In September 2015, we reduced our workforce to decrease costs and better align our workforce with the needs of the business and current oil and gas prices. In connection with the reduction, we incurred $1.4 million in expenses, which is recorded in termination costs on our consolidated statements of operations. As of September 30, 2015, $1.4 million in termination costs is recorded in current liabilities on our consolidated balance sheets. We also recorded a benefit of $0.3 million in share-based compensation expense related to the forfeiture of 97,083 outstanding unvested shares of restricted stock in connection with our workforce reduction, which is recorded in general and administrative expense on our consolidated statements of operations. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Our contractual obligations include long-term debt, operating lease obligations, asset retirement obligations, termination agreements and employment agreements with our executive officers. At September 30, 2015, outstanding borrowings under the Credit Facility were $278 million, compared to $150 million at December 31, 2014. In August 2015, we exercised our early termination option related to our last remaining daywork drilling rig contract. We incurred $1.7 million in expense related to the early termination of this contract, which is recorded in exploration expense on our consolidated statements of operations. Since December 31, 2014, there have been no other material changes to our contractual obligations. We are involved in various legal and regulatory proceedings arising in the normal course of business. While we cannot predict the outcome of these proceedings with certainty, we do not believe that an adverse result in any pending legal or regulatory proceeding, individually or in the aggregate, would be material to our consolidated financial condition or cash flows. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes The effective income tax rate for the three and nine months ended September 30, 2015, was 35.5% and 35.6%, respectively. Total income tax expense for the three and nine months ended September 30, 2015, differed from amounts computed by applying the U.S. federal statutory tax rates to pre-tax income, due primarily to state taxes and the impact of permanent differences between book and taxable income. The effective income tax rate for the three and nine months ended September 30, 2014, was 36.2%. Total income tax expense for the three and nine months ended September 30, 2014, differed from amounts computed by applying the U.S. federal statutory tax rates to pre-tax income, due primarily to state taxes and the impact of permanent differences between book and taxable income. |
Derivative Instruments and Fair
Derivative Instruments and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Fair Value Measurements | 8. Derivative Instruments and Fair Value Measurements The following table provides our outstanding commodity derivative positions at September 30, 2015. Commodity and Period Contract Type Volume Transacted Contract Price Crude Oil October 2015 – December 2015 Collar 1,600 Bbls/d $84.00/Bbl - $91.00/Bbl October 2015 – December 2015 Collar 1,000 Bbls/d $90.00/Bbl - $102.50/Bbl October 2015 – December 2015 Three-Way Collar 500 Bbls/d $75.00/Bbl - $84.00/Bbl $94.00/Bbl October 2015 – December 2015 Three-Way 500 Bbls/d $75.00/Bbl - $84.00/Bbl - $95.00/Bbl October 2015 – December 2016 Swap 500 Bbls/d $62.50/Bbl October 2015 – December 2016 Swap 250 Bbls/d $62.55/Bbl Natural Gas October 2015 – December 2015 Swap 200,000 MMBtu/month $4.10/MMBtu October 2015 – December 2015 Collar 130,000 MMBtu/month $4.00/MMBtu - $4.25/MMBtu March 2016 – December 2016 Swap 100,000 MMBtu/month $2.91/MMBtu March 2016 – December 2016 Swap 100,000 MMBtu/month $2.95/MMBtu The following table summarizes the fair value of our open commodity derivatives as of September 30, 2015, and December 31, 2014 (in thousands). Asset Derivatives Balance Sheet Location Fair Value September 30, December 31, 2015 2014 Derivatives not designated as hedging instruments Commodity derivatives Unrealized gain on commodity derivatives $ 17,022 $ 39,951 The following table summarizes the change in the fair value of our commodity derivatives (in thousands). Income Statement Location Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Derivatives not designated as hedging instruments Commodity derivatives Realized gain (loss) on commodity derivatives $ 12,755 $ (764 ) $ 37,937 $ (5,423 ) Unrealized gain (loss) on commodity derivatives 296 18,810 (22,929 ) 5,206 $ 13,051 $ 18,046 $ (15,008 ) $ (217 ) Unrealized gains and losses, at fair value, are included on our consolidated balance sheets as current or non-current assets or liabilities based on the anticipated timing of cash settlements under the related contracts. Changes in the fair value of our commodity derivative contracts are recorded in earnings as they occur and included in income (expense) on our consolidated statements of operations. We estimate the fair values of swap contracts based on the present value of the difference in exchange-quoted forward price curves and contractual settlement prices multiplied by notional quantities. We internally valued the option contracts using industry-standard option pricing models and observable market inputs. We use our internal valuations to determine the fair values of the contracts that are reflected on our consolidated balance sheets. Realized gains and losses are also included in income (expense) on our consolidated statements of operations. Accounts receivable related to oil, NGL and gas sales includes $3.8 million and $4.8 million from realized gains on commodity derivatives at September 30, 2015, and December 31, 2014, respectively. We are exposed to credit losses in the event of nonperformance by the counterparties on our commodity derivatives positions and have considered the exposure in our internal valuations. However, we do not anticipate nonperformance by the counterparties over the term of the commodity derivatives positions. To estimate the fair value of our commodity derivatives positions, we use market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. We primarily apply the market approach for recurring fair value measurements and attempt to use the best available information. We determine the fair value based upon the hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and lowest priority to unobservable inputs (Level 3 measurement). The three levels of fair value hierarchy are as follows: • Level 1 — Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. At September 30, 2015, we had no Level 1 measurements. • Level 2 — Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Our derivatives, which consist primarily of commodity swaps and collars, are valued using commodity market data which is derived by combining raw inputs and quantitative models and processes to generate forward curves. Where observable inputs are available, directly or indirectly, for substantially the full term of the asset or liability, the instrument is categorized in Level 2. At September 30, 2015, all of our commodity derivatives were valued using Level 2 measurements. • Level 3 — Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The fair value of oil and gas properties used in estimating our recognized impairment loss represents a nonrecurring Level 3 measurement. See Note 2 “Impairment of Oil and Gas Properties” for significant inputs and methodology related to the Level 3 measurement. Financial Instruments Not Recorded at Fair Value The following table sets forth the fair values of financial instruments that are not recorded at fair value on our financial statements (in thousands). September 30, 2015 Carrying Amount Fair Value Senior Notes, net $ 240,014 $ 141,612 The fair value of the Senior Notes uses pricing that is readily available in the public market. Accordingly, the fair value of the Senior Notes would be classified as Level 2 in the fair value hierarchy. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | 9. Share-Based Compensation In February 2015, we awarded an aggregate of 724,249 restricted shares to our executive officers, of which 482,833 shares are subject to certain performance conditions and 241,416 shares are subject to three-year total shareholder return (“TSR”) conditions, assuming maximum TSR is achieved. The aggregate fair market value of the award, assuming target TSR is achieved, is $4.5 million, which will be expensed over a service period of approximately three years, subject to performance and three-year TSR conditions. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations Approach Resources Inc. (“Approach,” the “Company,” “we,” “us” or “our”) is an independent energy company engaged in the exploration, development, production and acquisition of oil and gas properties. We focus on finding and developing oil and natural gas reserves in oil shale and tight gas sands. Substantially all of our properties are located in the Permian Basin in West Texas. |
Consolidation, Basis of Presentation and Significant Estimates | Consolidation, Basis of Presentation and Significant Estimates The interim consolidated financial statements of the Company are unaudited and contain all adjustments (consisting primarily of normal recurring accruals) necessary for a fair statement of the results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full year, due in part to the volatility in prices for oil, natural gas liquids (“NGLs”) and gas, future commodity prices for commodity derivative contracts, global economic and financial market conditions, interest rates, access to sources of liquidity, estimates of reserves, drilling risks, geological risks, transportation restrictions, the timing of acquisitions, product supply and demand, market competition and interruptions of production. You should read these consolidated interim financial statements in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission on February 26, 2015. The accompanying interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of the Company and its wholly owned subsidiaries. Intercompany accounts and transactions are eliminated. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures of contingencies. Actual results may differ from those estimates. Significant assumptions are required in the valuation of proved oil and gas reserves, which affect our estimate of depletion expense as well as our impairment analyses. Significant assumptions also are required in our estimation of accrued liabilities, commodity derivatives, income tax provision, share-based compensation and asset retirement obligations. It is at least reasonably possible these estimates could be revised in the near term, and these revisions could be material. Certain prior-year amounts have been reclassified to conform to current-year presentation. These classifications have no impact on the net (loss) income reported. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update for “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements in “Topic 605, Revenue Recognition.” This accounting standard update provides new guidance concerning recognition and measurement of revenue and requires additional disclosures about the nature, timing and uncertainty of revenue and cash flows arising from contracts with customers. This new guidance permits adoption through the use of either a full retrospective approach or a modified retrospective approach for annual reporting periods beginning on or after December 15, 2016, with early application not permitted. In July 2015, FASB delayed the effective date one year, making the new standard effective for interim periods and annual periods beginning after December 15, 2017. We have not determined which transition method we will use and are continuing to evaluate our existing revenue recognition policies to determine whether any of our contracts will be affected by the new requirements. In April 2015, FASB issued an accounting standards update for “Interest – Imputation of Interest,” which simplifies the presentation of debt issuance costs. This accounting standard update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This new update is effective for financial statements issued for fiscal years beginning after December 15, 2015 (and interim periods within those fiscal years), with early adoption permitted and retrospective application required. We adopted this accounting standard update during the second quarter. The adoption of this new accounting standard update resulted in a reclassification of debt issuance costs from Other assets to Senior secured credit facility, net and Senior notes, net. See Note 4 “Long-Term Debt” for disclosure of debt issuance costs. Adoption of this accounting standard update did not impact our statements of operations or cash flows. In September 2015, FASB issued an accounting standards update for “Business Combinations,” which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This new update is effective for financial statements issued for fiscal years beginning after December 15, 2015 (and interim periods within those fiscal years). This new guidance will be adopted prospectively in the first quarter of 2016. The Company is evaluating the impact of this new guidance and does not expect it to have a significant impact on the consolidated financial statements. |
Impairment or Disposal of Long-Lived Assets | Capitalized costs related to proved oil and gas properties, including wells and related equipment and facilities, are periodically evaluated for potential impairment when events or circumstances indicate that the carrying values of those assets may not be recoverable in accordance with ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share | The following table provides a reconciliation of the numerators and denominators of our basic and diluted earnings per share (dollars in thousands, except per-share amounts). Three Months Ended Nine Months Ended 2015 2014 2015 2014 Income (numerator): Net (loss) income – basic $ (148,787 ) $ 22,447 $ (168,345 ) $ 29,185 Weighted average shares (denominator): Weighted average shares – basic 40,541,420 39,363,441 40,419,187 39,325,552 Dilution effect of share-based compensation, treasury method — (1) 16,338 — (1) 15,409 Weighted average shares – diluted 40,541,420 39,379,779 40,419,187 39,340,961 Net (loss) income per share: Basic $ (3.67 ) $ 0.57 $ (4.16 ) $ 0.74 Diluted $ (3.67 ) $ 0.57 $ (4.16 ) $ 0.74 (1) Approximately 39,000 options to purchase our common stock were excluded from this calculation because they were antidilutive for the three and nine months ended September 30, 2015. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | The following table provides a summary of our long-term debt at September 30, 2015, and December 31, 2014 (in thousands). September 30, December 31, 2015 2014 Senior secured credit facility: Outstanding borrowings $ 278,000 $ 150,000 Debt issuance costs (2,421 ) (2,928 ) Senior secured credit facility, net 275,579 147,072 Senior notes: Principal 245,000 250,000 Debt issuance costs (4,986 ) (5,761 ) Senior notes, net 240,014 244,239 Total long-term debt $ 515,593 $ 391,311 |
Derivative Instruments and Fa19
Derivative Instruments and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity Derivative Volumes and Prices | The following table provides our outstanding commodity derivative positions at September 30, 2015. Commodity and Period Contract Type Volume Transacted Contract Price Crude Oil October 2015 – December 2015 Collar 1,600 Bbls/d $84.00/Bbl - $91.00/Bbl October 2015 – December 2015 Collar 1,000 Bbls/d $90.00/Bbl - $102.50/Bbl October 2015 – December 2015 Three-Way Collar 500 Bbls/d $75.00/Bbl - $84.00/Bbl $94.00/Bbl October 2015 – December 2015 Three-Way 500 Bbls/d $75.00/Bbl - $84.00/Bbl - $95.00/Bbl October 2015 – December 2016 Swap 500 Bbls/d $62.50/Bbl October 2015 – December 2016 Swap 250 Bbls/d $62.55/Bbl Natural Gas October 2015 – December 2015 Swap 200,000 MMBtu/month $4.10/MMBtu October 2015 – December 2015 Collar 130,000 MMBtu/month $4.00/MMBtu - $4.25/MMBtu March 2016 – December 2016 Swap 100,000 MMBtu/month $2.91/MMBtu March 2016 – December 2016 Swap 100,000 MMBtu/month $2.95/MMBtu |
Summary of Fair Value of Open Commodity Derivatives | The following table summarizes the fair value of our open commodity derivatives as of September 30, 2015, and December 31, 2014 (in thousands). Asset Derivatives Balance Sheet Location Fair Value September 30, December 31, 2015 2014 Derivatives not designated as hedging instruments Commodity derivatives Unrealized gain on commodity derivatives $ 17,022 $ 39,951 |
Summary of Change in Fair Value of Commodity Derivatives | The following table summarizes the change in the fair value of our commodity derivatives (in thousands). Income Statement Location Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Derivatives not designated as hedging instruments Commodity derivatives Realized gain (loss) on commodity derivatives $ 12,755 $ (764 ) $ 37,937 $ (5,423 ) Unrealized gain (loss) on commodity derivatives 296 18,810 (22,929 ) 5,206 $ 13,051 $ 18,046 $ (15,008 ) $ (217 ) |
Summary of Financial Instruments Not Recorded at Fair Value | The following table sets forth the fair values of financial instruments that are not recorded at fair value on our financial statements (in thousands). September 30, 2015 Carrying Amount Fair Value Senior Notes, net $ 240,014 $ 141,612 |
Impairment of Oil and Gas Pro20
Impairment of Oil and Gas Properties - Additional Information (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | |
Asset Impairment Charges [Line Items] | ||
Impairment of oil and gas properties and equipment | $ 220,197 | $ 220,197 |
Proved oil and gas property fair value | 22,000 | 22,000 |
Proved Property Impairment [Member] | ||
Asset Impairment Charges [Line Items] | ||
Impairment of oil and gas properties and equipment | 214,700 | 214,700 |
Unproved Property Impairment [Member] | ||
Asset Impairment Charges [Line Items] | ||
Impairment of oil and gas properties and equipment | $ 5,500 | $ 5,500 |
Earnings Per Common Share - Rec
Earnings Per Common Share - Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Net (loss) income - basic | $ (148,787) | $ 22,447 | $ (168,345) | $ 29,185 |
Weighted average shares - basic | 40,541,420 | 39,363,441 | 40,419,187 | 39,325,552 |
Dilution effect of share-based compensation, treasury method | 16,338 | 15,409 | ||
Weighted average shares - diluted | 40,541,420 | 39,379,779 | 40,419,187 | 39,340,961 |
Basic | $ (3.67) | $ 0.57 | $ (4.16) | $ 0.74 |
Diluted | $ (3.67) | $ 0.57 | $ (4.16) | $ 0.74 |
Earnings Per Common Share - R22
Earnings Per Common Share - Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share (Parenthetical) (Detail) - shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per common share | 39,000 | 39,000 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long Term Debt (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | ||
Outstanding borrowings | $ 278,000 | $ 150,000 |
Senior secured credit facility, net | 275,579 | 147,072 |
Senior notes, net | 240,014 | 244,239 |
Total long-term debt | 515,593 | 391,311 |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal | 245,000 | 250,000 |
Debt issuance costs | (4,986) | (5,761) |
Senior notes, net | 240,014 | 244,239 |
Senior Secured Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings | 278,000 | 150,000 |
Debt issuance costs | (2,421) | (2,928) |
Senior secured credit facility, net | $ 275,579 | $ 147,072 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Aug. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015 | Dec. 31, 2014USD ($) | Sep. 30, 2014 | Sep. 30, 2015USD ($) | |
Line of Credit Facility [Line Items] | |||||||
Senior secured credit facility | $ 278,000,000 | $ 150,000,000 | $ 278,000,000 | ||||
Senior notes, net | 240,014,000 | 244,239,000 | 240,014,000 | ||||
Gain on extinguishment of debt | 1,483,000 | 1,483,000 | |||||
Senior Notes [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Senior notes, net | 240,014,000 | 244,239,000 | $ 240,014,000 | ||||
Senior Notes [Member] | 7% Senior Notes Originated September 11, 2013 [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Senior Notes maturity date | Jun. 15, 2021 | ||||||
Senior notes, net | $ 250,000,000 | $ 250,000,000 | |||||
Stated interest rate | 7.00% | 7.00% | |||||
Debt instrument payment of interest | Semi-annually on June 15 and December 15. | ||||||
Repurchased price of senior notes | $ 3,500,000 | ||||||
Repurchased senior notes face value | 5,000,000 | ||||||
Gain on extinguishment of debt | $ 1,500,000 | ||||||
Senior Notes [Member] | 7% Senior Notes Originated September 11, 2013 [Member] | Debt Instrument, Redemption, Period Two [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument redemption description | Before June 15, 2016, we may redeem some or all of the Notes for cash at a redemption price equal to 100% of their principal amount plus an applicable make-whole premium and accrued and unpaid interest to the redemption date. | ||||||
Debt instrument, redemption of principal amount percentage | 100.00% | ||||||
Senior Notes [Member] | 7% Senior Notes Originated September 11, 2013 [Member] | Debt Instrument, Redemption, Period One [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument redemption description | Before June 15, 2016, we may redeem up to 35% of the Senior Notes at a redemption price of 107% of the principal amount, plus accrued and unpaid interest to the redemption date, with the proceeds of certain equity offerings. | ||||||
Debt instrument, redemption percentage | 35.00% | ||||||
Debt instrument, redemption of principal amount percentage | 107.00% | ||||||
Senior Secured Credit Facility [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Maturity period of senior secured credit facility | May 7, 2019 | ||||||
Senior secured credit facility, borrowing base | $ 450,000,000 | $ 525,000,000 | $ 450,000,000 | ||||
Aggregate lender commitments | 450,000,000 | 450,000,000 | |||||
Senior secured facility, maximum borrowing capacity | 1,000,000,000 | $ 1,000,000,000 | |||||
Senior secured credit facility, interest rate description | Borrowings bear interest based on the agent bank's prime rate plus an applicable margin ranging from 0.50% to 1.50%, or the sum of the LIBOR rate plus an applicable margin ranging from 1.50% to 2.50%. In addition, we pay an annual commitment fee ranging from 0.375% to 0.50% of unused borrowings available | ||||||
Senior secured credit facility | 278,000,000 | 150,000,000 | $ 278,000,000 | ||||
Interest rate applicable of senior secured credit facility | 2.10% | ||||||
Unused letters of credit outstanding | $ 300,000 | $ 300,000 | $ 300,000 | ||||
Production from liens covering the oil and gas properties | 80.00% | ||||||
Minimum current ratio | 1 | ||||||
Interest coverage ratio | 2.5 | 2.5 | 2.5 | 2.5 | |||
Outstanding equity interests ownership percentage | 50.00% | 50.00% | |||||
Senior Secured Credit Facility [Member] | Covenants Agreements One [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Covenant description | A consolidated modified current ratio covenant (as defined in the Credit Facility) that requires us to maintain a ratio of not less than 1.0 to 1.0 as of the last day of any fiscal quarter | ||||||
Senior Secured Credit Facility [Member] | Covenants Agreements Two [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Covenant description | A consolidated interest coverage ratio covenant (as defined in the Credit Facility) that requires us to maintain a ratio of consolidated EBITDAX to interest for the preceding four fiscal quarters of not less than 2.5 to 1.0 as of the last day of any fiscal quarter. | ||||||
Senior Secured Credit Facility [Member] | Minimum [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Annual commitment fee of unused borrowings | 0.375% | ||||||
Senior Secured Credit Facility [Member] | Minimum [Member] | Prime Rate [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Senior secured credit facility, marginal percentage | 0.50% | ||||||
Senior Secured Credit Facility [Member] | Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Senior secured credit facility, marginal percentage | 1.50% | ||||||
Senior Secured Credit Facility [Member] | Maximum [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Annual commitment fee of unused borrowings | 0.50% | ||||||
Senior Secured Credit Facility [Member] | Maximum [Member] | Prime Rate [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Senior secured credit facility, marginal percentage | 1.50% | ||||||
Senior Secured Credit Facility [Member] | Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Senior secured credit facility, marginal percentage | 2.50% |
Termination Costs - Additional
Termination Costs - Additional Information (Detail) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015USD ($)shares | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||
Severance expenses | $ 1,436 | $ 1,436 | |
Current Liabilities [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Termination costs recorded in current liabilities | $ 1,400 | $ 1,400 | $ 1,400 |
Employee Severance [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance expenses | $ 1,400 | ||
Employee Severance [Member] | Restricted Stock [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Outstanding unvested shares of restricted stock forfeited | shares | 97,083 | ||
Employee Severance [Member] | General and Administrative Expense [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Benefit recorded in share-based compensation expense | $ 300 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Aug. 31, 2015 | Dec. 31, 2014 |
Commitments and Contingencies Disclosure [Abstract] | |||
Contractual obligation | $ 1.7 | ||
Outstanding borrowings | $ 278 | $ 150 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 35.50% | 36.20% | 35.60% | 36.20% |
Derivative Instruments and Fa28
Derivative Instruments and Fair Value Measurements - Commodity Derivative Volumes and Prices (Detail) | 9 Months Ended |
Sep. 30, 2015MMBTU$ / bbl$ / MMBTUbbl | |
Crude - Oil October 2015 - December 2015 Contract One [Member] | Collar [Member] | |
Derivatives, Fair Value [Line Items] | |
Volume Transacted | bbl | 1,600 |
Crude - Oil October 2015 - December 2015 Contract One [Member] | Collar [Member] | Minimum [Member] | |
Derivatives, Fair Value [Line Items] | |
Contract Price | 84 |
Crude - Oil October 2015 - December 2015 Contract One [Member] | Collar [Member] | Maximum [Member] | |
Derivatives, Fair Value [Line Items] | |
Contract Price | 91 |
Crude - Oil October 2015 - December 2015 Contract Two [Member] | Collar [Member] | |
Derivatives, Fair Value [Line Items] | |
Volume Transacted | bbl | 1,000 |
Crude - Oil October 2015 - December 2015 Contract Two [Member] | Collar [Member] | Minimum [Member] | |
Derivatives, Fair Value [Line Items] | |
Contract Price | 90 |
Crude - Oil October 2015 - December 2015 Contract Two [Member] | Collar [Member] | Maximum [Member] | |
Derivatives, Fair Value [Line Items] | |
Contract Price | 102.50 |
Crude - Oil October 2015 - December 2015 Contract Three [Member] | Three-Way Collar [Member] | |
Derivatives, Fair Value [Line Items] | |
Volume Transacted | bbl | 500 |
Contract Price | 84 |
Crude - Oil October 2015 - December 2015 Contract Three [Member] | Three-Way Collar [Member] | Minimum [Member] | |
Derivatives, Fair Value [Line Items] | |
Contract Price | 75 |
Crude - Oil October 2015 - December 2015 Contract Three [Member] | Three-Way Collar [Member] | Maximum [Member] | |
Derivatives, Fair Value [Line Items] | |
Contract Price | 94 |
Crude - Oil October 2015 - December 2015 Contract Four [Member] | Three-Way Collar [Member] | |
Derivatives, Fair Value [Line Items] | |
Volume Transacted | bbl | 500 |
Contract Price | 84 |
Crude - Oil October 2015 - December 2015 Contract Four [Member] | Three-Way Collar [Member] | Minimum [Member] | |
Derivatives, Fair Value [Line Items] | |
Contract Price | 75 |
Crude - Oil October 2015 - December 2015 Contract Four [Member] | Three-Way Collar [Member] | Maximum [Member] | |
Derivatives, Fair Value [Line Items] | |
Contract Price | 95 |
Crude - Oil October 2015 - December 2016 Contract One [Member] | Swap [Member] | |
Derivatives, Fair Value [Line Items] | |
Volume Transacted | bbl | 500 |
Contract Price | 62.50 |
Crude - Oil October 2015 - December 2016 Contract Two [Member] | Swap [Member] | |
Derivatives, Fair Value [Line Items] | |
Volume Transacted | bbl | 250 |
Contract Price | 62.55 |
Natural Gas October 2015 - December 2015 Contract One [Member] | Swap [Member] | |
Derivatives, Fair Value [Line Items] | |
Contract Price | $ / MMBTU | 4.10 |
Volume Transacted | MMBTU | 200,000 |
Natural Gas October 2015 - December 2015 Contract Two [Member] | Collar [Member] | |
Derivatives, Fair Value [Line Items] | |
Volume Transacted | MMBTU | 130,000 |
Natural Gas October 2015 - December 2015 Contract Two [Member] | Collar [Member] | Minimum [Member] | |
Derivatives, Fair Value [Line Items] | |
Contract Price | $ / MMBTU | 4 |
Natural Gas October 2015 - December 2015 Contract Two [Member] | Collar [Member] | Maximum [Member] | |
Derivatives, Fair Value [Line Items] | |
Contract Price | $ / MMBTU | 4.25 |
Natural Gas March 2016 - December 2016 Contract One [Member] | Swap [Member] | |
Derivatives, Fair Value [Line Items] | |
Contract Price | $ / MMBTU | 2.91 |
Volume Transacted | MMBTU | 100,000 |
Natural Gas March 2016 - December 2016 Contract Two [Member] | Swap [Member] | |
Derivatives, Fair Value [Line Items] | |
Contract Price | $ / MMBTU | 2.95 |
Volume Transacted | MMBTU | 100,000 |
Derivative Instruments and Fa29
Derivative Instruments and Fair Value Measurements - Summary of Fair Value of Open Commodity Derivatives (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Unrealized Gain on Commodity Derivatives [Member] | Commodity Derivatives [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative not designated as hedging instruments, fair value of assets derivative | $ 17,022 | $ 39,951 |
Derivative Instruments and Fa30
Derivative Instruments and Fair Value Measurements - Summary of Change in Fair Value of Commodity Derivatives (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivatives, Fair Value [Line Items] | ||||
Total gain (loss) on commodity derivatives | $ 12,755 | $ (764) | $ 37,937 | $ (5,423) |
Derivatives Not Designated as Hedging Instruments [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Total gain (loss) on commodity derivatives | 13,051 | 18,046 | (15,008) | (217) |
Derivatives Not Designated as Hedging Instruments [Member] | Realized Gain (Loss) on Commodity Derivatives [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Total gain (loss) on commodity derivatives | 12,755 | (764) | 37,937 | (5,423) |
Derivatives Not Designated as Hedging Instruments [Member] | Unrealized Gain (Loss) on Commodity Derivatives [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Total gain (loss) on commodity derivatives | $ 296 | $ 18,810 | $ (22,929) | $ 5,206 |
Derivative Instruments and Fa31
Derivative Instruments and Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Accounts receivable related to oil, NGL and gas sales | $ 14,848 | $ 19,635 |
Realized Gain on Commodity Derivatives [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Accounts receivable related to oil, NGL and gas sales | $ 3,800 | $ 4,800 |
Derivative Instruments and Fa32
Derivative Instruments and Fair Value Measurements - Summary of Financial Instruments Not Recorded at Fair Value (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Senior notes, net | $ 240,014 | $ 244,239 |
Senior Notes, net, Fair Value | $ 141,612 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) $ in Millions | 1 Months Ended |
Feb. 28, 2015USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted shares award | 724,249 |
Fair market value of award assuming target TSR achieved | $ | $ 4.5 |
Service period | 3 years |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted shares award | 482,833 |
Total Shareholder Return Performance Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted shares award | 241,416 |