Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 28, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
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 | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 86,284,226 |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 79 | $ 21 |
Accounts receivable: | ||
Joint interest owners | 89 | 92 |
Oil, NGLs and gas sales | 8,687 | 9,547 |
Unrealized gain on commodity derivatives | 855 | |
Prepaid expenses and other current assets | 1,005 | 2,834 |
Total current assets | 10,715 | 12,494 |
PROPERTIES AND EQUIPMENT: | ||
Oil and gas properties, at cost, using the successful efforts method of accounting | 1,882,051 | 1,869,774 |
Furniture, fixtures and equipment | 5,650 | 5,644 |
Total oil and gas properties and equipment | 1,887,701 | 1,875,418 |
Less accumulated depletion, depreciation and amortization | (801,218) | (783,357) |
Net oil and gas properties and equipment | 1,086,483 | 1,092,061 |
Unrealized gain on commodity derivatives | 832 | |
Total assets | 1,098,030 | 1,104,555 |
CURRENT LIABILITIES: | ||
Accounts payable | 6,982 | 9,482 |
Oil, NGLs and gas sales payable | 4,507 | 4,190 |
Unrealized loss on commodity derivatives | 2,162 | 4,880 |
Accrued liabilities | 12,509 | 7,817 |
Total current liabilities | 26,160 | 26,369 |
NON-CURRENT LIABILITIES: | ||
Senior secured credit facility, net | 273,831 | 271,696 |
Senior notes, net | 83,958 | 226,653 |
Deferred income taxes | 144,315 | 5,615 |
Asset retirement obligations | 10,655 | 10,607 |
Other non-current liabilities | 604 | 663 |
Total liabilities | 539,523 | 541,603 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none outstanding | ||
Common stock, $0.01 par value, 180,000,000 and 90,000,000 shares authorized, 86,257,549 and 41,764,770 issued and outstanding, respectively | 851 | 418 |
Additional paid-in capital | 721,985 | 586,095 |
Accumulated deficit | (164,329) | (23,561) |
Total stockholders’ equity | 558,507 | 562,952 |
Total liabilities and stockholders’ equity | $ 1,098,030 | $ 1,104,555 |
Unaudited Consolidated Balance3
Unaudited Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
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 | 180,000,000 | 90,000,000 |
Common stock, issued | 86,257,549 | 41,764,770 |
Common stock, outstanding | 86,257,549 | 41,764,770 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
REVENUES: | |||
Oil, NGLs and gas sales | $ 26,355 | $ 17,615 | |
EXPENSES: | |||
Lease operating | 4,170 | 6,356 | |
Production and ad valorem taxes | 2,357 | 1,664 | |
Exploration | 1,043 | 569 | |
General and administrative | [1] | 5,928 | 6,051 |
Depletion, depreciation and amortization | 17,962 | 20,229 | |
Total expenses | 31,460 | 34,869 | |
OPERATING LOSS | (5,105) | (17,254) | |
OTHER: | |||
Interest expense, net | (5,463) | (6,298) | |
Gain on debt extinguishment | 5,053 | ||
Realized (loss) gain on commodity derivatives | (961) | 3,500 | |
Unrealized gain (loss) on commodity derivatives | 4,405 | (957) | |
Other income | 3 | 104 | |
LOSS BEFORE INCOME TAX PROVISION (BENEFIT) | (2,068) | (20,905) | |
INCOME TAX PROVISION (BENEFIT) | 138,700 | (7,245) | |
NET LOSS | $ (140,768) | $ (13,660) | |
LOSS PER SHARE: | |||
Basic | $ (2) | $ (0.33) | |
Diluted | $ (2) | $ (0.33) | |
WEIGHTED AVERAGE SHARES OUTSTANDING: | |||
Basic | 70,409,303 | 41,069,071 | |
Diluted | 70,409,303 | 41,069,071 | |
Includes non-cash share-based compensation expense as follows: | $ 1,159 | $ 1,550 | |
[1] | Includes non-cash share-based compensation expense as follows: |
Unaudited Consolidated Stateme5
Unaudited Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Includes non-cash share-based compensation expense as follows: | $ 1,159 | $ 1,550 |
Unaudited Consolidated Stateme6
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (140,768) | $ (13,660) |
Adjustments to reconcile net loss to cash provided by operating activities: | ||
Depletion, depreciation and amortization | 17,962 | 20,229 |
Amortization of debt issuance costs | 219 | 372 |
Gain on debt extinguishment | (5,053) | |
Unrealized (gain) loss on commodity derivatives | (4,405) | 957 |
Exploration expense | 1,033 | 505 |
Share-based compensation expense | 1,159 | 1,550 |
Deferred income tax provision (benefit) | 138,700 | (7,245) |
Other non-cash items | (3) | (104) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 863 | 4,390 |
Prepaid expenses and other current assets | (266) | (348) |
Accounts payable | (3,973) | 535 |
Oil, NGLs and gas sales payable | 318 | (1,034) |
Accrued liabilities | (97) | (856) |
Cash provided by operating activities | 5,689 | 5,291 |
INVESTING ACTIVITIES: | ||
Additions to oil and gas properties | (13,359) | (4,874) |
Additions to furniture, fixtures and equipment, net | (6) | (3) |
Change in working capital related to investing activities | 6,479 | 1,563 |
Cash used in investing activities | (6,886) | (3,314) |
FINANCING ACTIVITIES: | ||
Borrowings under credit facility | 21,500 | 12,600 |
Repayment of amounts outstanding under credit facility | (19,500) | (13,600) |
Equity issuance costs | (2,468) | |
Tax withholdings related to restricted stock | (93) | (6) |
Change in working capital related to financing activities | 1,816 | (731) |
Cash provided by (used in) financing activities | 1,255 | (1,737) |
CHANGE IN CASH AND CASH EQUIVALENTS | 58 | 240 |
CASH AND CASH EQUIVALENTS, beginning of period | 21 | 600 |
CASH AND CASH EQUIVALENTS, end of period | 79 | 840 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 4,202 | 1,873 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTION: | ||
Asset retirement obligations capitalized | $ 11 | $ 28 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
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. Our properties are primarily located in the Permian Basin in West Texas. We also own interests in the East Texas Basin. 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, 2016, filed with the Securities and Exchange Commission on March 10, 2017. 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 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 adoption not permitted. In August 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. This evaluation will continue throughout 2017, and we are currently planning to adopt this new standard in the first quarter of 2018. In February 2016, FASB issued an accounting standards update for “Leases,” which amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. This new guidance is effective for interim and annual periods beginning after December 15, 2018, and we will adopt it using a modified retrospective approach. The Company is evaluating the impact of this new guidance on its consolidated financial statements. In January 2017, the FASB issued an accounting standards update for “Clarifying the Definition of a Business,” which provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This standard requires entities to use a screen test to determine when an integrated set of assets and activities is not a business or if the integrated set of assets and activities needs to be further evaluated against the framework. This standard is effective for interim and annual reporting periods beginning after December 15, 2017. |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | 2. 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 March 31, 2017 2016 Income (numerator): Net loss – basic $ (140,768 ) $ (13,660 ) Weighted average shares (denominator): Weighted average shares – basic 70,409,303 41,069,071 Dilution effect of share-based compensation, treasury method (1) — — Weighted average shares – diluted 70,409,303 41,069,071 Net loss per share: Basic $ (2.00 ) $ (0.33 ) Diluted $ (2.00 ) $ (0.33 ) (1) Approximately 39,000 options to purchase our common stock were excluded from this calculation because they were antidilutive for the three months ended March 31, 2017 and 2016. |
Exchange Transactions
Exchange Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Exchange Transactions [Abstract] | |
Exchange Transactions | 3. Exchange Transactions On November 2, 2016, we entered into an exchange agreement with the largest holder of our 7% Senior Notes due 2021 (the “Senior Notes”) to exchange $130,552,000 principal amount of our Senior Notes for 39,165,600 newly issued shares of common stock, par value $0.01 per share (the “Initial Exchange”). On January 26, 2017, our stockholders approved the Exchange Transactions (defined below) and an increase in our authorized common stock from 90 million shares to 180 million shares. We closed the Initial Exchange on January 27, 2017, and paid $1.1 million of accrued interest on the Senior Notes held by the exchanging noteholder. In connection with the Initial Exchange, a second supplemental indenture became effective, which removed certain covenants and events of default from the indenture governing our Senior Notes and eliminated certain restrictive covenants discussed in Note 4. On March 22, 2017, we exchanged an additional $14,528,000 principal amount of outstanding Senior Notes for 4,009,728 shares of our common stock (the “Follow-On Exchange”). The Initial Exchange and the Follow-On Exchange (together, the “Exchange Transactions”) reduced the principal amount of outstanding Senior Notes by $145.1 million and reduced interest payments by $44.3 million over the remaining term of the Senior Notes. The Exchange Transactions were accounted for as a debt extinguishment. A gain of $5.1 million was recognized on the Exchange Transactions for the difference between the fair market value of the shares issued, a Level 1 fair value measurement, and the net carrying value of the Senior Notes exchanged. We incurred equity issuance costs of $2.5 million related to the Exchange Transactions, which were recorded as a reduction to additional paid-in capital. The Exchange Transactions triggered a cumulative change in ownership of our common stock by more than 50% under Section 382 of the Internal Revenue Code as of March 22, 2017. This established an annual limitation on the usage of our pre-change net operating losses (“NOLs”) in the future. Accordingly, we recognized a valuation allowance on our deferred tax assets of $139.1 million. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 4. Long-Term Debt The following table provides a summary of our long-term debt at March 31, 2017, and December 31, 2016 (in thousands). March 31, December 31, 2017 2016 Senior secured credit facility: Outstanding borrowings $ 275,000 $ 273,000 Debt issuance costs (1,169 ) (1,304 ) Senior secured credit facility, net 273,831 271,696 Senior notes: Principal 85,240 230,320 Debt issuance costs (1,282 ) (3,667 ) Senior notes, net 83,958 226,653 Total long-term debt $ 357,789 $ 498,349 Senior Secured Credit Facility At March 31, 2017, the borrowing base and aggregate lender commitments under our amended and restated senior secured credit facility (the “Credit Facility”) were $325 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, NGLs and gas reserves. We, or the lenders, can each request one additional borrowing base redetermination each calendar year. Our semi-annual borrowing base redetermination was completed on May 3, 2017, and our borrowing base and aggregate lender commitments were reaffirmed at $325 million. At March 31, 2017, borrowings under the Credit Facility bore interest based on the agent bank’s prime rate plus an applicable margin ranging from 1.50% to 2.50%, or the sum of the LIBOR rate plus an applicable margin ranging from 2.50% to 3.50%. In addition, we pay an annual commitment fee of 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 $275 million under the Credit Facility at March 31, 2017, compared to $273 million of outstanding borrowings at December 31, 2016. The weighted average interest rate applicable to borrowings under the Credit Facility for the three months ended March 31, 2017, was 4%. We had outstanding unused letters of credit under the Credit Facility totaling $0.3 million and $0.6 million at March 31, 2017, and December 31, 2016, respectively, 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 grant liens in favor of the lenders covering the oil and gas properties of the Company and its subsidiaries representing at least 90% 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 interest coverage ratio covenant (as defined in the Credit Facility) that requires us to maintain a ratio of consolidated EBITDAX (as defined in the Credit Facility) to cash Interest Expense (as defined in the Credit Facility) as of the last day of any fiscal quarter of not less than 1.25 to 1.0 (or 1.0 to 1.0 following the issuance of second lien indebtedness) through December 31, 2017, a ratio of not less than 1.5 to 1.0 through December 31, 2018, and a ratio of not less than 2.0 to 1.0 thereafter, and • 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. 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 At March 31, 2017, $85.2 million of Senior Notes were outstanding, compared to $230.3 million as of December 31, 2016. The Exchange Transactions reduced the outstanding principal balance of our Senior Notes by $145.1 million and reduced future interest payments by $44.3 million over the remaining term of the Senior Notes. We issued the Senior Notes under a senior indenture dated June 11, 2013, among the Company, our subsidiary guarantors and Wilmington Trust, National Association, as successor trustee. The senior indenture, as supplemented by a supplemental indenture dated June 11, 2013, is referred to as the “Indenture.” On December 20, 2016, we entered into the second supplemental indenture (the “Second Supplemental Indenture”), which became effective on January 27, 2017, in connection with the closing of the Initial Exchange. The Second Supplemental Indenture (i) eliminated certain definitions and references to definitions contained in the Indenture, (ii) eliminated and revised, as applicable, certain events of default contained in the Indenture, (iii) eliminated certain conditions to consolidation, merger, conveyance, transfer or lease contained in the Indenture, (iv) eliminated certain covenants contained in the Indenture, including substantially all of the restrictive covenants set forth therein, and (v) supplemented and amended the Senior Notes and the securities guarantees, as and to the same extent as the Indenture has been amended and supplemented in accordance with the preceding clauses (i), (ii), (iii) and (iv). We may redeem some or all of the Senior Notes at specified redemption prices, plus accrued and unpaid interest to the redemption date. 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. As a result of the Second Supplemental Indenture, the Indenture contains limited 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 March 31, 2017, we were in compliance with all of our covenants, and there were no existing defaults or events of default, under our debt instruments. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies Our contractual obligations include long-term debt, operating lease obligations, asset retirement obligations and employment agreements with our executive officers. At March 31, 2017, outstanding borrowings under the Credit Facility were $275 million, compared to $273 million at December 31, 2016. The Exchange Transactions reduced the outstanding principal of our Senior Notes from $230.3 million at December 31, 2016, to $85.2 million at March 31, 2017. In January 2017, we amended our office lease to reduce the aggregate leased space by approximately 5,500 square feet and extended the term to September 30, 2021. This amendment reduced our contractual obligations by approximately $0.4 million during the next three years, while increasing our total contractual obligations by $0.9 million over the extended term of the lease. 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 | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes For the three months ended March 31, 2017, our income tax expense was $138.7 million, compared to an income tax benefit of $7.2 million for the three months ended March 31, 2016. The Exchange Transactions triggered a cumulative change in ownership of our common stock by more than 50% under Section 382 of the Internal Revenue Code as of March 22, 2017. This established an annual limitation on the usage of our pre-change NOLs in the future. Accordingly, we recognized a valuation allowance on our deferred tax assets of $139.1 million. T |
Derivative Instruments and Fair
Derivative Instruments and Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Fair Value Measurements | 7. Derivative Instruments and Fair Value Measurements The following table provides our outstanding commodity derivative positions at March 31, 2017. Commodity and Period Contract Type Volume Transacted Contract Price Natural Gas April 2017 – December 2017 Collar 100,000 MMBtu/month $3.00/MMBtu - $3.65/MMBtu April 2017 – December 2017 Collar 200,000 MMBtu/month $2.30/MMBtu - $2.60/MMBtu April 2017 – December 2017 Collar 200,000 MMBtu/month $3.00/MMBtu - $3.44/MMBtu April 2017 – December 2017 Collar 200,000 MMBtu/month $3.00/MMBtu - $3.50/MMBtu January 2018 – December 2018 Swap 200,000 MMBtu/month $3.085/MMBtu January 2018 – December 2018 Swap 250,000 MMBtu/month $3.084/MMBtu NGLs (C2 - Ethane) April 2017 – December 2017 Swap 1,050 Bbls/day $11.34/Bbl NGLs (C3 - Propane) April 2017 – December 2017 Swap 750 Bbls/day $27.916/Bbl NGLs (IC4 - Isobutane) April 2017 – December 2017 Swap 75 Bbls/day $36.7325/Bbl NGLs (NC4 - Butane) April 2017 – December 2017 Swap 250 Bbls/day $35.9205/Bbl The following table summarizes the fair value of our open commodity derivatives as of March 31, 2017, and December 31, 2016 (in thousands). Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value March 31, December March 31, December 2017 2016 2017 2016 Derivatives not designated as hedging instruments Commodity derivatives Unrealized gain on commodity derivatives $ 1,687 $ — Unrealized loss on commodity derivatives $ (2,162 ) $ (4,880 ) The following table summarizes the change in the fair value of our commodity derivatives (in thousands). Income Statement Location Three Months Ended March 31, 2017 2016 Derivatives not designated as hedging instruments Commodity derivatives Unrealized gain (loss) on commodity derivatives $ 4,405 $ (957 ) Realized (loss) gain on commodity derivatives (961 ) 3,500 $ 3,444 $ 2,543 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. 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. The shares of our common stock issued in the Exchange Transactions were valued as a Level 1 measurement. At March 31, 2017, 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 March 31, 2017, 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. At March 31, 2017, we had no Level 3 measurements. 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). March 31, 2017 Carrying Amount Fair Value Senior Notes $ 83,958 $ 71,602 The fair value of the Senior Notes is based on quoted market prices, but the Senior Notes are not actively traded 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 | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | 8. Share-Based Compensation In March 2017, 1,232,035 restricted shares were awarded to our executive officers, of which 821,357 shares are subject to certain performance conditions and 410,678 shares are subject to three-year total shareholder return (“TSR”) conditions, assuming maximum TSR. The aggregate fair market value of the awards is $2.5 million, which will be expensed over a service period of approximately three years, subject to performance and three-year TSR conditions. Cash-settled performance awards In 2016, we awarded 1,100,543 cash-settled performance awards, subject to certain performance conditions to our executive officers. The cash-settled performance awards represent a non-equity unit with a conversion value equal to the fair market value of a share of the Company’s common stock at the vesting date. These awards are classified as liability awards due to the cash settlement feature. Compensation costs associated with the cash-settled performance awards are re-measured at each interim reporting period and an adjustment is recorded in general and administrative expenses on our consolidated statements of operations. For the three months ended March 31, 2017, we recognized a benefit of $113,000 compared to $41,000 in expense for the three-months ended March 31, 2016. At March 31, 2017, we recorded a current liability of $0.5 million and a non-current liability of $0.6 million related to the cash-settled performance awards on our consolidated balance sheets. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
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. Our properties are primarily located in the Permian Basin in West Texas. We also own interests in the East Texas Basin. |
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, 2016, filed with the Securities and Exchange Commission on March 10, 2017. 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 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 adoption not permitted. In August 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. This evaluation will continue throughout 2017, and we are currently planning to adopt this new standard in the first quarter of 2018. In February 2016, FASB issued an accounting standards update for “Leases,” which amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. This new guidance is effective for interim and annual periods beginning after December 15, 2018, and we will adopt it using a modified retrospective approach. The Company is evaluating the impact of this new guidance on its consolidated financial statements. In January 2017, the FASB issued an accounting standards update for “Clarifying the Definition of a Business,” which provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This standard requires entities to use a screen test to determine when an integrated set of assets and activities is not a business or if the integrated set of assets and activities needs to be further evaluated against the framework. This standard is effective for interim and annual reporting periods beginning after December 15, 2017. |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 2016 Income (numerator): Net loss – basic $ (140,768 ) $ (13,660 ) Weighted average shares (denominator): Weighted average shares – basic 70,409,303 41,069,071 Dilution effect of share-based compensation, treasury method (1) — — Weighted average shares – diluted 70,409,303 41,069,071 Net loss per share: Basic $ (2.00 ) $ (0.33 ) Diluted $ (2.00 ) $ (0.33 ) (1) Approximately 39,000 options to purchase our common stock were excluded from this calculation because they were antidilutive for the three months ended March 31, 2017 and 2016. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | The following table provides a summary of our long-term debt at March 31, 2017, and December 31, 2016 (in thousands). March 31, December 31, 2017 2016 Senior secured credit facility: Outstanding borrowings $ 275,000 $ 273,000 Debt issuance costs (1,169 ) (1,304 ) Senior secured credit facility, net 273,831 271,696 Senior notes: Principal 85,240 230,320 Debt issuance costs (1,282 ) (3,667 ) Senior notes, net 83,958 226,653 Total long-term debt $ 357,789 $ 498,349 |
Derivative Instruments and Fa18
Derivative Instruments and Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Outstanding Commodity Derivatives Volumes and Prices | The following table provides our outstanding commodity derivative positions at March 31, 2017. Commodity and Period Contract Type Volume Transacted Contract Price Natural Gas April 2017 – December 2017 Collar 100,000 MMBtu/month $3.00/MMBtu - $3.65/MMBtu April 2017 – December 2017 Collar 200,000 MMBtu/month $2.30/MMBtu - $2.60/MMBtu April 2017 – December 2017 Collar 200,000 MMBtu/month $3.00/MMBtu - $3.44/MMBtu April 2017 – December 2017 Collar 200,000 MMBtu/month $3.00/MMBtu - $3.50/MMBtu January 2018 – December 2018 Swap 200,000 MMBtu/month $3.085/MMBtu January 2018 – December 2018 Swap 250,000 MMBtu/month $3.084/MMBtu NGLs (C2 - Ethane) April 2017 – December 2017 Swap 1,050 Bbls/day $11.34/Bbl NGLs (C3 - Propane) April 2017 – December 2017 Swap 750 Bbls/day $27.916/Bbl NGLs (IC4 - Isobutane) April 2017 – December 2017 Swap 75 Bbls/day $36.7325/Bbl NGLs (NC4 - Butane) April 2017 – December 2017 Swap 250 Bbls/day $35.9205/Bbl |
Summary of Fair Value of Open Commodity Derivatives | The following table summarizes the fair value of our open commodity derivatives as of March 31, 2017, and December 31, 2016 (in thousands). Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value March 31, December March 31, December 2017 2016 2017 2016 Derivatives not designated as hedging instruments Commodity derivatives Unrealized gain on commodity derivatives $ 1,687 $ — Unrealized loss on commodity derivatives $ (2,162 ) $ (4,880 ) |
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 March 31, 2017 2016 Derivatives not designated as hedging instruments Commodity derivatives Unrealized gain (loss) on commodity derivatives $ 4,405 $ (957 ) Realized (loss) gain on commodity derivatives (961 ) 3,500 $ 3,444 $ 2,543 |
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). March 31, 2017 Carrying Amount Fair Value Senior Notes $ 83,958 $ 71,602 |
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 | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Net loss – basic | $ (140,768) | $ (13,660) |
Weighted average shares – basic | 70,409,303 | 41,069,071 |
Weighted average shares – diluted | 70,409,303 | 41,069,071 |
Basic | $ (2) | $ (0.33) |
Diluted | $ (2) | $ (0.33) |
Earnings Per Common Share - R20
Earnings Per Common Share - Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share (Parenthetical) (Detail) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
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 |
Exchange Transactions - Additio
Exchange Transactions - Additional Information (Detail) - USD ($) | Mar. 22, 2017 | Jan. 27, 2017 | Nov. 02, 2016 | Mar. 31, 2017 | Jan. 26, 2017 | Dec. 31, 2016 |
Exchange Transactions [Line Items] | ||||||
Common stock, par value | $ 0.01 | $ 0.01 | ||||
Common stock, shares authorized | 180,000,000 | 90,000,000 | ||||
Gain recognized on exchange of senior notes | $ 5,053,000 | |||||
Equity issuance costs | $ 2,468,000 | |||||
NOLs, limitations on use | The Exchange Transactions triggered a cumulative change in ownership of our common stock by more than 50% under Section 382 of the Internal Revenue Code as of March 22, 2017. This established an annual limitation on the usage of our pre-change net operating losses (“NOLs”) in the future. | |||||
Valuation allowance on deferred tax assets | $ 139,100,000 | |||||
7% Senior Notes Due 2021 [Member] | ||||||
Exchange Transactions [Line Items] | ||||||
Debt exchange to common stock, principal amount | 145,100,000 | |||||
Reduction of debt interest payment for remaining term of senior notes | $ 44,300,000 | |||||
7% Senior Notes Due 2021 [Member] | Initial Exchange [Member] | ||||||
Exchange Transactions [Line Items] | ||||||
Debt exchange to common stock, principal amount | $ 130,552,000 | |||||
Common stock, par value | $ 0.01 | |||||
Common stock, shares authorized | 90,000,000 | 180,000,000 | ||||
Payments of accrued interest | $ 1,100,000 | |||||
Debt conversion, interest rate of debt | 7.00% | |||||
Debt exchange date | Jan. 27, 2017 | |||||
7% Senior Notes Due 2021 [Member] | Initial Exchange [Member] | Common Stock [Member] | ||||||
Exchange Transactions [Line Items] | ||||||
Debt exchange to common stock, shares issued | 39,165,600 | |||||
7% Senior Notes Due 2021 [Member] | Follow-On Exchange [Member] | ||||||
Exchange Transactions [Line Items] | ||||||
Debt exchange to common stock, principal amount | $ 14,528,000 | |||||
Debt exchange date | Mar. 22, 2017 | |||||
7% Senior Notes Due 2021 [Member] | Follow-On Exchange [Member] | Common Stock [Member] | ||||||
Exchange Transactions [Line Items] | ||||||
Debt exchange to common stock, shares issued | 4,009,728 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long Term Debt (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Outstanding borrowings | $ 275,000 | $ 273,000 |
Senior secured credit facility, net | 273,831 | 271,696 |
Senior notes, net | 83,958 | 226,653 |
Total long-term debt | 357,789 | 498,349 |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal | 85,240 | 230,320 |
Debt issuance costs | (1,282) | (3,667) |
Senior notes, net | 83,958 | 226,653 |
Senior Secured Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings | 275,000 | 273,000 |
Debt issuance costs | (1,169) | (1,304) |
Senior secured credit facility, net | $ 273,831 | $ 271,696 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Line of Credit Facility [Line Items] | ||
Senior secured credit facility | $ 275,000,000 | $ 273,000,000 |
Senior Notes [Member] | ||
Line of Credit Facility [Line Items] | ||
Senior notes outstanding | 85,240,000 | 230,300,000 |
Debt exchange to common stock, principal amount | 145,100,000 | |
Reduced future interest payments amount | 44,300,000 | |
Senior Secured Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Senior secured credit facility, borrowing base | 325,000,000 | |
Senior secured facility, maximum borrowing capacity | $ 1,000,000,000 | |
Maturity period of senior secured credit facility | May 7, 2019 | |
Additional borrowing base, re-determination description | We, or the lenders, can each request one additional borrowing base redetermination each calendar year. Our semi-annual borrowing base redetermination was completed on May 3, 2017, and our borrowing base and aggregate lender commitments were reaffirmed at $325 million. | |
Borrowing base re-determined completion date | May 3, 2017 | |
Borrowing base and aggregate lender commitments reaffirmed | $ 325,000,000 | |
Annual commitment fee of unused borrowings | 0.50% | |
Senior secured credit facility, interest rate description | Borrowings under the Credit Facility bore 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 | $ 275,000,000 | 273,000,000 |
Interest rate applicable of senior secured credit facility | 4.00% | |
Unused letters of credit outstanding | $ 300,000 | $ 600,000 |
Production from liens covering the oil and gas properties | 90.00% | |
Outstanding equity interests ownership percentage | 50.00% | |
Senior Secured Credit Facility [Member] | Covenants Agreements One [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 (as defined in the Credit Facility) to cash Interest Expense (as defined in the Credit Facility) as of the last day of any fiscal quarter of not less than 1.25 to 1.0 (or 1.0 to 1.0 following the issuance of second lien indebtedness) through December 31, 2017, a ratio of not less than 1.5 to 1.0 through December 31, 2018, and a ratio of not less than 2.0 to 1.0 thereafter, and 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. | |
Minimum current ratio | 1.5 | |
Interest coverage ratio, thereafter | 2 | |
Senior Secured Credit Facility [Member] | Covenants Agreements Two [Member] | ||
Line of Credit Facility [Line Items] | ||
Minimum current ratio | 1 | |
Senior Secured Credit Facility [Member] | Before Second Lien Indebtedness [Member] | Covenants Agreements One [Member] | ||
Line of Credit Facility [Line Items] | ||
Minimum interest coverage ratio | 1.25 | |
Senior Secured Credit Facility [Member] | After Second Lien Indebtedness [Member] | Covenants Agreements One [Member] | ||
Line of Credit Facility [Line Items] | ||
Minimum interest coverage ratio | 1 | |
Senior Secured Credit Facility [Member] | Minimum [Member] | Prime Rate [Member] | ||
Line of Credit Facility [Line Items] | ||
Senior secured credit facility, marginal percentage | 1.50% | |
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 | 2.50% | |
Senior Secured Credit Facility [Member] | Maximum [Member] | Prime Rate [Member] | ||
Line of Credit Facility [Line Items] | ||
Senior secured credit facility, marginal percentage | 2.50% | |
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 | 3.50% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Thousands | 1 Months Ended | ||
Jan. 31, 2017USD ($)ft² | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Other Commitments [Line Items] | |||
Outstanding borrowings | $ 275,000 | $ 273,000 | |
Reduction in aggregate leased space | ft² | 5,500 | ||
Non-Cancelable lease agreement for office space, expiration date | Sep. 30, 2021 | ||
Reduction in contractual obligations during next three years | $ 400 | ||
Increase in total contractual obligations | $ 900 | ||
Senior Notes [Member] | |||
Other Commitments [Line Items] | |||
Senior notes outstanding | $ 85,240 | $ 230,300 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 138,700 | $ (7,245) |
NOLs, limitations on use | The Exchange Transactions triggered a cumulative change in ownership of our common stock by more than 50% under Section 382 of the Internal Revenue Code as of March 22, 2017. This established an annual limitation on the usage of our pre-change net operating losses (“NOLs”) in the future. | |
Valuation allowance on deferred tax assets | $ 139,100 | |
Share-based compensation tax shortfall | $ 300 | $ 200 |
Derivative Instruments and Fa26
Derivative Instruments and Fair Value Measurements - Outstanding Commodity Derivatives Volumes and Prices (Detail) | 3 Months Ended |
Mar. 31, 2017MMBTU$ / MMBTU$ / bblbbl | |
Natural Gas April 2017 - December 2017 Contract One [Member] | Collar [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | MMBTU | 100,000 |
Natural Gas April 2017 - December 2017 Contract One [Member] | Collar [Member] | Minimum [Member] | |
Derivatives Fair Value [Line Items] | |
Contract Price | 3 |
Natural Gas April 2017 - December 2017 Contract One [Member] | Collar [Member] | Maximum [Member] | |
Derivatives Fair Value [Line Items] | |
Contract Price | 3.65 |
Natural Gas April 2017 - December 2017 Contract Two [Member] | Collar [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | MMBTU | 200,000 |
Natural Gas April 2017 - December 2017 Contract Two [Member] | Collar [Member] | Minimum [Member] | |
Derivatives Fair Value [Line Items] | |
Contract Price | 2.30 |
Natural Gas April 2017 - December 2017 Contract Two [Member] | Collar [Member] | Maximum [Member] | |
Derivatives Fair Value [Line Items] | |
Contract Price | 2.60 |
Natural Gas April 2017 - December 2017 Contract Three [Member] | Collar [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | MMBTU | 200,000 |
Natural Gas April 2017 - December 2017 Contract Three [Member] | Collar [Member] | Minimum [Member] | |
Derivatives Fair Value [Line Items] | |
Contract Price | 3 |
Natural Gas April 2017 - December 2017 Contract Three [Member] | Collar [Member] | Maximum [Member] | |
Derivatives Fair Value [Line Items] | |
Contract Price | 3.44 |
Natural Gas April 2017 - December 2017 Contract Four [Member] | Collar [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | MMBTU | 200,000 |
Natural Gas April 2017 - December 2017 Contract Four [Member] | Collar [Member] | Minimum [Member] | |
Derivatives Fair Value [Line Items] | |
Contract Price | 3 |
Natural Gas April 2017 - December 2017 Contract Four [Member] | Collar [Member] | Maximum [Member] | |
Derivatives Fair Value [Line Items] | |
Contract Price | 3.50 |
Natural Gas January 2018 - December 2018 Contract One [Member] | Swap [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | MMBTU | 200,000 |
Contract Price | 3.085 |
Natural Gas January 2018 - December 2018 Contract Two [Member] | Swap [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | MMBTU | 250,000 |
Contract Price | 3.084 |
NGLs (C2 - Ethane) April 2017 - December 2017 Contract [Member] | Swap [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | bbl | 1,050 |
Contract Price | $ / bbl | 11.34 |
NGLs (C3 - Propane) April 2017 - December 2017 Contract [Member] | Swap [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | bbl | 750 |
Contract Price | $ / bbl | 27.916 |
NGLs (IC4 - Isobutane) April 2017 - December 2017 Contract [Member] | Swap [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | bbl | 75 |
Contract Price | $ / bbl | 36.7325 |
NGLs (NC4 - Butane) April 2017 - December 2017 Contract [Member] | Swap [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | bbl | 250 |
Contract Price | $ / bbl | 35.9205 |
Derivative Instruments and Fa27
Derivative Instruments and Fair Value Measurements - Summary of Fair Value of Open Commodity Derivatives (Detail) - Commodity Derivatives [Member] - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Unrealized Gain on Commodity Derivatives [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives not designated as hedging instruments, fair value of assets derivative | $ 1,687 | |
Unrealized Loss on Commodity Derivatives [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives not designated as hedging instruments, fair value of Liability derivative | $ (2,162) | $ (4,880) |
Derivative Instruments and Fa28
Derivative Instruments and Fair Value Measurements - Summary of Change in Fair Value of Commodity Derivatives (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Derivatives Fair Value [Line Items] | ||
Total gain (loss) on commodity derivatives | $ (961) | $ 3,500 |
Derivatives Not Designated as Hedging Instruments [Member] | ||
Derivatives Fair Value [Line Items] | ||
Total gain (loss) on commodity derivatives | 3,444 | 2,543 |
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 | 4,405 | (957) |
Derivatives Not Designated as Hedging Instruments [Member] | Realized (Loss) Gain on Commodity Derivatives [Member] | ||
Derivatives Fair Value [Line Items] | ||
Total gain (loss) on commodity derivatives | $ (961) | $ 3,500 |
Derivative Instruments and Fa29
Derivative Instruments and Fair Value Measurements - Summary of Financial Instruments Not Recorded at Fair Value (Detail) $ in Thousands | Mar. 31, 2017USD ($) |
Carrying Amount | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Senior Notes | $ 83,958 |
Fair Value | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Senior Notes | $ 71,602 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Performance Shares [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of share awards | 821,357 | |||
Fair market value of shares subject to performance conditions | $ 2,500,000 | |||
Service period | 3 years | |||
Total Shareholder Return Performance Stock Awards [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of share awards | 410,678 | |||
Cash Settled Performance Shares [Member] | Current Liability [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation, liability | $ 500,000 | $ 500,000 | ||
Cash Settled Performance Shares [Member] | Non-Current Liability [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation, liability | $ 600,000 | 600,000 | ||
Cash Settled Performance Shares [Member] | General and Administrative Expenses [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation (benefit) expense | $ (113,000) | $ 41,000 | ||
Executive Officers [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of share awards | 1,232,035 | |||
Executive Officers [Member] | Cash Settled Performance Shares [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of share awards | 1,100,543 |