Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2016shares | |
Document And Entity Information [Abstract] | |
Entity Registrant Name | Cobalt International Energy, Inc. |
Entity Central Index Key | 1,471,261 |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2016 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Trading Symbol | CIE |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 414,154,631 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 131,661 | $ 71,593 |
Restricted cash and cash equivalents and investments | 252,200 | 252,950 |
Joint interest and other receivables | 48,932 | 54,709 |
Prepaid expenses and other current assets | 57,562 | 43,881 |
Inventory | 13,128 | 26,113 |
Short-term investments | 440,866 | 885,994 |
Current assets held for sale | 1,873,514 | 1,811,051 |
Total current assets | 2,817,863 | 3,146,291 |
Property, plant, and equipment: | ||
Oil and gas properties, successful efforts method of accounting, net of accumulated depletion of $6,574 and $0, as of June 30, 2016 and December 31, 2015, respectively | 1,001,526 | 893,734 |
Other property and equipment, net of accumulated depreciation and amortization of $7,533 and $6,647, as of June 30, 2016 and December 31, 2015, respectively | 4,748 | 2,202 |
Total property, plant, and equipment, net | 1,006,274 | 895,936 |
Long-term restricted funds | 9,044 | |
Other assets | 8,831 | 18,992 |
Total assets | 3,842,012 | 4,061,219 |
Current liabilities: | ||
Trade and other accounts payable | 24,350 | 856 |
Accrued liabilities | 138,165 | 126,323 |
Deferred Angola sales proceeds | 250,000 | 250,000 |
Current liabilities held for sale | 196,707 | 250,839 |
Total current liabilities | 609,222 | 628,018 |
Long-term debt | 2,030,721 | 1,981,895 |
Asset retirement obligations | 3,371 | 3,167 |
Other long-term liabilities | 1,897 | 2,002 |
Total long-term liabilities | 2,035,989 | 1,987,064 |
Stockholders’ Equity: | ||
Common stock, $0.01 par value per share; 2,000,000,000 shares authorized, 410,054,961 and 408,740,182 issued and outstanding as of June 30, 2016 and December 31, 2015, respectively | 4,101 | 4,088 |
Additional paid-in capital | 4,166,910 | 4,164,097 |
Accumulated deficit | (2,974,210) | (2,722,048) |
Total stockholders’ equity | 1,196,801 | 1,446,137 |
Total liabilities and stockholders’ equity | $ 3,842,012 | $ 4,061,219 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Oil and gas properties, successful efforts method of accounting, accumulated depletion (in dollars) | $ 6,574 | $ 0 |
Other property and equipment, accumulated depreciation and amortization (in dollars) | $ 7,533 | $ 6,647 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued | 410,054,961 | 408,740,182 |
Common stock, shares outstanding | 410,054,961 | 408,740,182 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Oil and gas revenue: | ||||
Oil sales | $ 3,077,000 | $ 4,688,000 | ||
Natural gas sales | 40,000 | 65,000 | ||
Natural gas liquids sales | 56,000 | 56,000 | ||
Total revenue | 3,173,000 | 4,809,000 | ||
Operating costs and expenses: | ||||
Seismic and exploration | 6,335,000 | $ 11,267,000 | 5,081,000 | $ 25,334,000 |
Dry hole expense and impairment | 157,492,000 | 7,533,000 | 153,515,000 | 27,430,000 |
Lease operating expense | 1,703,000 | 2,658,000 | ||
General and administrative | 19,174,000 | 20,437,000 | 38,311,000 | 38,167,000 |
Accretion expense | 102,000 | 204,000 | ||
Depreciation and amortization | 4,290,000 | 367,000 | 7,459,000 | 779,000 |
Total operating costs and expenses | 189,096,000 | 39,604,000 | 207,228,000 | 91,710,000 |
Operating income (loss) | (185,923,000) | (39,604,000) | (202,419,000) | (91,710,000) |
Other income (expense): | ||||
Gain on sale of assets | 2,625,000 | 2,625,000 | ||
Interest income | 1,453,000 | 1,451,000 | 2,791,000 | 3,111,000 |
Interest expense | (15,975,000) | (17,841,000) | (31,616,000) | (37,861,000) |
Total other income (expense) | (14,522,000) | (13,765,000) | (28,825,000) | (32,125,000) |
Net income (loss) from continuing operations before income tax | (200,445,000) | (53,369,000) | (231,244,000) | (123,835,000) |
Income tax expense | 0 | 0 | ||
Net income (loss) from continuing operations | (200,445,000) | (53,369,000) | (231,244,000) | (123,835,000) |
Net income (loss) from discontinued operations, net of income tax | (5,104,000) | (13,441,000) | (20,918,000) | (24,593,000) |
Net income (loss) | $ (205,549,000) | $ (66,810,000) | $ (252,162,000) | $ (148,428,000) |
Basic and diluted income (loss) per share from continuing operations | $ (0.49) | $ (0.13) | $ (0.56) | $ (0.30) |
Basic and diluted income (loss) per share from discontinued operations | (0.01) | (0.03) | (0.05) | (0.06) |
Basic and diluted income (loss) per share | $ (0.50) | $ (0.16) | $ (0.61) | $ (0.36) |
Basic and diluted weighted average common shares outstanding | 409,920,869 | 408,521,844 | 409,590,679 | 408,515,037 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Changes in Stockholders' Equity - 6 months ended Jun. 30, 2016 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Balance at Dec. 31, 2015 | $ 1,446,137 | $ 4,088 | $ 4,164,097 | $ (2,722,048) |
Equity based compensation | 2,826 | 2,826 | ||
Common stock issued for restricted stock and stock options | 13 | (13) | ||
Net income (loss) | (252,162) | (252,162) | ||
Balance at Jun. 30, 2016 | $ 1,196,801 | $ 4,101 | $ 4,166,910 | $ (2,974,210) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows provided from operating activities | ||
Net income (loss) | $ (252,162) | $ (148,428) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 7,459 | 779 |
Gain on the sale of assets | (2,625) | |
Accretion expense | 204 | |
Loss from discontinued operations | 20,918 | 24,593 |
Dry hole expense and impairment of unproved properties | 153,515 | 27,430 |
Equity based compensation | 2,826 | 12,981 |
Amortization of premium (accretion of discount) on investments | 765 | 8,915 |
Amortization of debt discount and debt issuance costs | 52,420 | 44,040 |
Changes in operating assets and liabilities: | ||
Joint interest and other receivables | 5,777 | (36,751) |
Inventory | 12,962 | 7,211 |
Prepaid expense and other current assets | (13,681) | (20,826) |
Deferred charges and other | 6,566 | (12,451) |
Trade and other accounts payable | 12,867 | 8,088 |
Accrued liabilities and other | (8,844) | (35,228) |
Net cash provided by (used in) operating activities—continuing operations | 1,592 | (122,272) |
Net cash provided by (used in) operating activities—discontinued operations | (53,029) | (19,259) |
Net cash provided by (used in) operating activities | (51,437) | (141,531) |
Cash flows from investing activities | ||
Capital expenditures for other property and equipment | (3,432) | (188) |
Exploratory wells drilling in process | (236,651) | (130,534) |
Change in restricted funds | (8,247) | (48,249) |
Proceeds from maturity of investment securities | 1,166,266 | 909,569 |
Purchase of investment securities | (639,556) | (519,867) |
Net cash provided by (used in) investing activities—continuing operations | 278,380 | 210,731 |
Net cash provided by (used in) investing activities—discontinued operations | (166,875) | (173,806) |
Net cash provided by (used in) investing activities | 111,505 | 36,925 |
Cash flows from financing activities | ||
Payment of debt issuance costs | (4,025) | |
Net cash provided by (used in) financing activities | (4,025) | |
Net increase (decrease) in cash and cash equivalents | 60,068 | (108,631) |
Cash and cash equivalents, beginning of period | 71,593 | 246,705 |
Cash and cash equivalents, end of period | 131,661 | 138,074 |
Cash paid for interest | 39,495 | 38,426 |
Non-cash disclosures | ||
Changes in accrued capital expenditures | 13,986 | (54,135) |
Transfer of investment securities to and from restricted funds | $ 82,348 | $ 46,049 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies General Cobalt International Energy, Inc. (the “Company”) is an independent exploration and production company with operations in the deepwater U.S. Gulf of Mexico and offshore Angola and Gabon in West Africa. On August 22, 2015, Cobalt International Energy Angola Ltd., a wholly-owned subsidiary of the Company, executed a purchase and sale agreement with Sociedade Nacional de Combustíveis de Angola—Empresa Pública (“Sonangol”) for the sale by the Company to Sonangol of the entire issued and outstanding share capital of its indirect wholly-owned subsidiaries CIE Angola Block 20 Ltd. and CIE Angola Block 21 Ltd., which respectively hold the Company’s 40% working interest in each of Block 20 and Block 21 offshore Angola (the “Angola Transaction”). On July 26, 2016, the Company’s Chief Executive Officer met with Sonangol’s Chairwoman of the Board of Directors Isabel dos Santos and members of her executive team in Luanda, Angola to discuss the status of the Angolan Transaction. At this meeting, it was jointly agreed with Sonangol that the Company would market its working interests in Blocks 20 and 21 for sale by the Company to a third party other than Sonangol. On August 1, 2016, the Company received a letter from Chairwoman Isabel dos Santos confirming Sonangol’s support of such marketing and sale process. The Company therefore believes that it is unlikely that the Angola Transaction will close pursuant to the terms of the Purchase and Sale Agreement and believe that it is likely that the Purchase and Sale Agreement will automatically terminate on August 22, 2016. In such a case, the Purchase and Sale Agreement provides that the parties are to be restituted in order to put them in their original positions as if no agreement had been executed. The Company plans to work with Sonangol to understand and agree on the financial and operational implications of this provision. With respect to the marketing of its Angolan assets, the Company intends to immediately commence the marketing and sale process. On February 29, 2016, the Company relinquished its working interest in Block 9. The Company’s working interests in Blocks 20 and 21 offshore Angola have been classified as “held for sale” on the consolidated balance sheet. The results of operations associated with Blocks 9, 20 and 21 offshore Angola have been presented as discontinued operations in the accompanying consolidated statement of operations. Historically, the Company’s Angolan subsidiaries constituted a significant portion of its West Africa segment. The Company’s operations in Gabon, which are deemed immaterial, have been combined with its United States segment and are reported as one segment. The terms “Company,” “Cobalt,” “we,” “us,” “our,” “ours,” and similar terms refer to Cobalt International Energy, Inc. unless the context indicates otherwise. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the financial statements of Cobalt International Energy, Inc. and all of its wholly-owned subsidiaries. All significant intercompany transactions and amounts have been eliminated for all periods presented. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the appropriate rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, the condensed consolidated financial statements do not include all of the information and footnote disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for interim periods are not necessarily indicative of the results that may be presented for the entire year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Correction of Immaterial Errors The accompanying unaudited condensed financial statements for the six months ended June 30, 2016 include a reduction of impairment charges related to the Heidelberg field totaling approximately $8.5 million related to the prior year. The amounts were not deemed material with respect to such prior year or the anticipated results and the trend of earnings for fiscal year 2016. Recently Issued Accounting Standards In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (“ASU 2016-02”), Leases (Subtopic 842). Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, ASU 2016-02 will require both types of leases to be recognized on the balance sheet. ASU 2016-02 also will require disclosures to help investors and other financial statement users to better understand the amount, timing and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. ASU 2016-02 does not apply for leases for oil and gas properties, but does apply to equipment used to explore and develop oil and gas resources. The Company currently does not have any leases classified as financing leases. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018 and is to be applied using the modified retrospective approach. The Company has not yet fully determined or quantified the effect ASU 2016-02 will have on the Company’s financial statements. In March 2016, the FASB issued Accounting Standards Update No. 2016-09 (“ASU 2016-09”), Compensation – Stock Compensation (Subtopic 718). The objective of ASU 2016-09 is for simplification involving several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016 and early adoption is permitted. The Company has not yet fully determined or quantified the effect ASU 2016-09 will have on the Company’s financial statements. In May 2016, the FASB issued Accounting Standards Update No. 2016-11 (“ASU 2016-11”), Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting. The guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. The Company is required to adopt the new standards in the first quarter of 2018 using one of two retrospective application methods. The Company is continuing to evaluate the provisions of these ASUs, and has not determined the impact these standards may have on its consolidated financial statements and related disclosures or decided upon the method of adoption. In April 2015, Financial Accounting Standards Board (FASB) amended Accounting Standard Codification Subtopic No. 835-30, Interest—Imputation of Interest (the “ASC Subtopic 835-30”). The amendments require 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. The recognition and measurement guidance for debt issuance costs are not affected by the amendments. The amendments under ASC Subtopic 835-30 are effective for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. The adoption of ASU 2015-03 resulted in $32.9 million of unamortized debt issuance costs reclassified from long-term assets to a reduction in long-term liabilities as of December 31, 2015. In July 2015, the FASB issued Accounting Standards Update (ASU) 2015-11, "Accounting for Inventory" (ASU 2015-11), which requires entities to measure most inventory at lower of cost or net realizable value. ASU 2015-11 defines net realizable value as "the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation." ASU 2015-11 is effective prospectively for interim and annual periods beginning after December 15, 2016. The Company adopted the amendments to ASC 2015-11 on January 1, 2016. The adoption of ASC 2015-11 did not have material impact on the Company’s financial statements. In August 2014, the FASB issued a new standard related to the disclosure of uncertainties about an entity's ability to continue as a going concern (ASU 2014-15). The new standard will explicitly require management to assess an entity's ability to continue as a going concern every reporting period and to provide related footnote disclosures in certain circumstances. The new standard will be effective for all entities in the first annual period ending after December 15, 2016, with early adoption permitted. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09 (“ASU 2014-09”), Summary and Amendments That Create Revenue from Contracts and Customers (Subtopic 606). ASU 2014-09 amends and replaces current revenue recognition requirements, including most industry-specific guidance. The revised guidance establishes a five step approach to be utilized in determining when, and if, revenue should be recognized. ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2017. Upon application, an entity may elect one of two methods, either restatement of prior periods presented or recording a cumulative adjustment in the initial period of application. The Company has not determined the effect ASU 2014-09 will have on the recognition of its revenue, if any, nor has the Company determined the method the Company will utilize upon adoption, which would be in the first quarter of 2018. Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by the Company include (i) accruals related to expenses, (ii) assumptions used in estimating fair value of equity based awards and the fair value of the liability component of the convertible senior notes and (iii) assumptions used in impairment testing. Although the Company believes these estimates are reasonable, actual results could differ from these estimates. Investments The Company’s policy on accounting for its investments, which consist entirely of debt securities, is based on the accounting guidance relating to “ Accounting for Certain Investments in Debt and Equity Securities See Note 5—Investments Investments are considered to be impaired when a decline in fair value is determined to be other-than-temporary. The Company conducts a regular assessment of its debt securities with unrealized losses to determine whether securities have other-than-temporary impairment (“OTTI”). This assessment considers, among other factors, the nature of the securities, credit rating or financial condition of the issuer, the extent and duration of the unrealized loss, market conditions and whether the Company intends to sell or whether it is more likely than not that the Company will be required to sell the debt securities. As of June 30, 2016 and December 31, 2015, the Company has no OTTI in its debt securities. Property, Plant, and Equipment The Company uses the “successful efforts” method of accounting for its oil and gas properties. Acquisition costs for unproved leasehold properties and costs of drilling exploration wells are capitalized pending determination of whether proved reserves can be attributed to the areas as a result of drilling those wells. Under the successful efforts method of accounting, proved leasehold costs are capitalized and amortized over the proved developed and undeveloped reserves on a units-of-production basis. Successful drilling costs, costs of development and developmental dry holes are capitalized and amortized over the proved developed reserves on a units-of-production basis. When circumstances indicate that proved oil and gas properties may be impaired, the Company compares expected undiscounted future cash flows at a depreciation, depletion and amortization group level to the unamortized capitalized cost of the asset. If the expected undiscounted future cash flows, based on the Company's estimate of future crude oil and natural gas prices, operating costs, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is generally calculated using the Income Approach described in the Fair Value Measurement Topic of the ASC. Significant unproved leasehold costs are capitalized and are not amortized, pending an evaluation of their exploration potential. Unproved leasehold costs are assessed periodically to determine if an impairment of the cost of individual properties has occurred. Factors taken into account for impairment analysis include results of the technical studies conducted, lease terms and management’s future exploration plans. The cost of impairment is charged to expense in the period in which it occurs. Costs incurred for exploration dry holes, geological and geophysical work (including the cost of seismic data), and delay rentals are charged to expense as incurred. Costs of other property and equipment are depreciated on a straight-line basis based on their respective useful lives. Asset Retirement Obligation The Company expects to have significant obligations under its lease agreements and federal regulation to remove its equipment and restore land or seabed at the end of oil and natural gas production operations. These asset retirement obligations (“ARO”) are primarily associated with plugging and abandoning wells and removing and disposing of offshore oil and natural gas platforms. Estimating the future restoration and removal cost is difficult and requires the Company to make estimates and judgments because most of the removal obligations are many years in the future and contracts and regulation often have vague descriptions of what constitutes removal. Pursuant to the accounting guidance relating to “ Assets Retirement Obligations Inherent to the present value calculation are numerous estimates, assumptions and judgments, including the ultimate settlement amounts, inflation factors, credit adjusted risk-free rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the present value of the abandonment liability, the Company will make corresponding adjustments to both the asset retirement obligation and the related oil and natural gas property asset balance. Increases in the discounted abandonment liability resulting from the passage of time will be reflected as additional accretion expense in the consolidated statement of operations. The following summarizes the changes in the asset retirement obligation for the six months ended June 30, 2016: June 30, 2016 ($ Beginning of period $ 3,167 Liabilities incurred — Accretion 204 End of period $ 3,371 Capitalized Interest For exploration and development projects that have not commenced production, interest is capitalized as part of the historical cost of developing and constructing assets. Capitalized interest is determined by multiplying the Company’s weighted-average borrowing cost on debt by the average amount of qualifying costs incurred. Once an asset subject to interest capitalization is completed and placed in service, the associated capitalized interest is expensed through depreciation or impairment. See Note 7—Property, Plant, and Equipment and Note 9—Long-term Debt Earnings (Loss) Per Share Basic loss per share was calculated by dividing net income or loss applicable to common shares by the weighted average number of common shares outstanding during the periods presented. The weighted average number of shares used in the calculation for the three and six months ended June 30, 2016 were 409,920,869 and 409,590,679, respectively. The calculation of diluted loss per share includes the potential dilutive impact of non-vested restricted stock, non-vested restricted stock units, outstanding stock options, the 2.625% convertible senior notes due 2019 and the 3.125% convertible senior notes due 2024 during the period, unless their effect is anti-dilutive. For the three and six months ended June 30, 2016, 8,808,708 shares of non-vested restricted stock, non-vested restricted stock units, outstanding stock options, the 2.625% convertible senior notes due 2019 and the 3.125% convertible senior notes due 2024, were excluded from the diluted loss per share calculation because they were anti-dilutive. For the three and six months ended June 30, 2015, 9,967,516 shares of non-vested restricted stock, non-vested restricted stock units, outstanding stock options and the 2.625% convertible senior notes due 2019 and the 3.125% convertible senior notes due 2024, were excluded from the diluted loss per share because they are anti-dilutive. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 6 Months Ended |
Jun. 30, 2016 | |
Cash And Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | 2. Cash and Cash Equivalents Cash and cash equivalents consisted of the following: June 30, 2016 December 31, 2015 ($ in thousands) Cash at banks $ 22,918 $ 33,173 Money market funds 23,064 — Held-to-maturity securities(1) 85,679 38,420 $ 131,661 $ 71,593 (1) These securities mature three months or less from the date of purchase. |
Restricted Cash and Cash Equiva
Restricted Cash and Cash Equivalents and Investments | 6 Months Ended |
Jun. 30, 2016 | |
Restricted Cash And Investments [Abstract] | |
Restricted Cash and Cash Equivalents and Investments | 3. Restricted Cash and Cash Equivalents and Investments Restricted cash and cash equivalents and investments consisted of the following: June 30, 2016 December 31, 2015 ($ in thousands) Angolan sale proceeds $ 250,000 $ 250,000 American Express Bank pledge agreement — 750 Citibank commercial card agreement 2,200 2,200 Total restricted funds(1) $ 252,200 $ 252,950 (1) Pursuant to the purchase and sale agreement governing the Angola Transaction, the Company received the First Payment of $250 million during the quarterly period ended September 30, 2015. See Note 10—Angola Transaction. |
Joint Interest and Other Receiv
Joint Interest and Other Receivables | 6 Months Ended |
Jun. 30, 2016 | |
Receivables [Abstract] | |
Joint Interest and Other Receivables | 4. Joint Interest and Other Receivables Joint interest and other receivables result primarily from billing shared costs under the respective operating agreements to the Company’s partners. These are usually settled within 30 days of the invoice date. As of June 30, 2016 and December 31, 2015, the balance in joint interest, revenue, and other receivables consisted of the following: June 30, 2016 December 31, 2015 ($ in thousands) Partners in the U.S. Gulf of Mexico $ 45,423 $ 50,766 Revenue receivable 1,909 — Accrued interest on investment securities 1,005 3,567 Other 595 376 $ 48,932 $ 54,709 |
Investments
Investments | 6 Months Ended |
Jun. 30, 2016 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | 5. Investments The Company’s investments in held-to-maturity securities, which are recorded at cost which approximates fair market value, were as follows as of June 30, 2016 and December 31, 2015: June 30, 2016 December 31, 2015 ($ in thousands) Corporate securities $ 120,501 $ 492,955 Commercial paper 526,383 604,986 U.S. Treasury securities 91,421 — Certificates of deposit — 20,750 Total $ 738,305 $ 1,118,691 The Company’s condensed consolidated balance sheet included the following held-to-maturity securities: June 30, 2016 December 31, 2015 ($ in thousands) Cash and cash equivalents $ 85,679 $ 38,420 Short-term investments 440,866 885,994 Restricted cash and cash equivalents and investments 202,716 194,277 Long-term restricted funds 9,044 — $ 738,305 $ 1,118,691 The contractual maturities of these held-to-maturity securities as of June 30, 2016 and December 31, 2015 were as follows: June 30, 2016 December 31, 2015 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value ($ in thousands) Within 1 year $ 738,305 $ 738,305 $ 1,118,691 $ 1,118,691 After 1 year — — — — $ 738,305 $ 738,305 $ 1,118,691 $ 1,118,691 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. Fair Value Measurements The fair values of the Company’s cash and cash equivalents, joint interest and other receivables, short-term and long-term restricted funds and investments approximate their carrying amounts due to their short-term duration. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements as applicable to one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. The levels are: Level 1—Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. This category includes the Company’s cash and money market funds. Level 2—Quoted prices in non-active markets or in active markets for similar assets or liabilities, and inputs other than quoted prices that are observable, for the asset or liability, either directly or indirectly, for substantially the full contractual term of the asset or liability being measured. This category includes the Company’s U.S. Treasury bills, U.S. Treasury notes, commercial paper, U.S. agency securities, corporate bonds, and certificates of deposits. The Company secures valuations from its brokers to price U.S. Treasury bills, U.S. Treasury notes, commercial paper, U.S. agency securities, and corporate bonds. All of the Company’s brokers and custodians use Interactive Data Corporation as a third party pricing service to price corporate bonds, U.S. Treasury bills, U.S. Treasury notes, and U.S. agency securities, and S&P to price commercial paper. Level 3—Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The Company does not currently have any financial instruments categorized as Level 3. The following tables summarize the Company’s significant financial instruments measured on a recurring basis as categorized by the fair value measurement hierarchy: Level 1 Level 2 Balance as of Carrying Value Fair Value(1) Carrying Value Fair Value(1) June 30, 2016 ($ in thousands) Cash and cash equivalents: Cash $ 22,918 $ 22,918 $ — $ — $ 22,918 Money market funds 23,064 23,064 — — 23,064 Commercial paper — — 85,679 85,679 85,679 Subtotal 45,982 45,982 85,679 85,679 131,661 Restricted cash and cash equivalents and investments: Money market funds 49,484 49,484 — — 49,484 Commercial paper — — 82,215 82,215 82,215 Corporate bonds — — 120,501 120,501 120,501 Certificates of deposit — — — — — Subtotal 49,484 49,484 202,716 202,716 252,200 Short-term investments: U.S. Treasury securities — — 82,377 82,377 82,377 Corporate bonds — — — — — Commercial paper — — 358,489 358,489 358,489 Certificates of deposit — — — — — Subtotal — — 440,866 440,866 440,866 Long-term restricted funds: U.S. Treasury securities — — 9,044 9,044 9,044 Subtotal — — 9,044 9,044 9,044 Total $ 95,466 $ 95,466 $ 738,305 $ 738,305 $ 833,771 Level 1 Level 2 Balance as of Carrying Value Fair Value(1) Carrying Value Fair Value(1) December 31, 2015 ($ in thousands) Cash and cash equivalents: Cash $ 33,173 $ 33,173 $ — $ — $ 33,173 Money market funds — — — — — Commercial paper — — 38,420 38,420 38,420 Subtotal 33,173 33,173 38,420 38,420 71,593 Restricted cash and cash equivalents: Money market funds 58,673 58,673 — — 58,673 Commercial paper — — 188,517 188,517 188,517 Corporate bonds — — 5,010 5,010 5,010 Certificates of deposit — — 750 750 750 Subtotal 58,673 58,673 194,277 194,277 252,950 Short-term investments: U.S. Agency securities — — — — — Corporate bonds — — 487,946 487,946 487,946 Commercial paper — — 378,048 378,048 378,048 Certificates of deposit — — 20,000 20,000 20,000 Subtotal — — 885,994 885,994 885,994 Long-term investments: Corporate bonds — — — — — Subtotal — — — — — Total $ 91,846 $ 91,846 $ 1,118,691 $ 1,118,691 $ 1,210,537 (1) As of June 30, 2016 and December 31, 2015, the Company did not record any OTTI on these assets. |
Property, Plant, and Equipment
Property, Plant, and Equipment | 6 Months Ended |
Jun. 30, 2016 | |
Property Plant And Equipment [Abstract] | |
Property, Plant, and Equipment | 7. Property, Plant, and Equipment Property, plant, and equipment is stated at cost less accumulated depletion/depreciation/amortization and consisted of the following: Estimated Useful Life (Years) June 30, 2016 December 31, 2015 ($ in thousands) Oil and Gas Properties: Proved properties: Well and development costs $ 84,157 $ 71,463 Less: accumulated depletion (6,574 ) — Total proved properties 77,584 71,463 Unproved properties: Oil and gas leasehold 330,829 382,976 Less: accumulated valuation allowance (169,217 ) (175,963 ) 161,612 207,013 Exploration wells in process 762,329 615,258 Total unproved properties 923,941 822,271 Total oil and gas properties, net 1,001,526 893,734 Other Property and Equipment: Computer equipment and software 3 8,782 5,350 Office equipment and furniture 3 – 1,349 1,349 Leasehold improvements 3 – 2,150 2,150 12,281 8,849 Less: accumulated depreciation and amortization (7,533 ) (6,647 ) Total other property and equipment, net 4,748 2,202 Property, plant, and equipment, net $ 1,006,274 $ 895,936 The Company recorded $4.2 million and $0.4 million of depletion, depreciation and amortization expense for the three months ended June 30, 2016 and 2015, respectively, and $7.5 million and $0.8 million for the six months ended June 30, 2016 and 2015, respectively. Proved Oil and Gas Properties The Heidelberg project was formally sanctioned for development in mid-2013. As a result of the project sanction, the Company reclassified its Heidelberg exploration well costs to proved property well and development costs and these costs will be depleted as the related proved developed reserves are produced. During the quarter ended March 31, 2015, the Company assigned its 9.375% ownership interest in the Heidelberg prospect to its wholly owned subsidiary, Cobalt GOM #1 LLC (“GOM #1”). As a result, the carrying value of the costs capitalized for all the Heidelberg projects as of March 31, 2015 were transferred to GOM #1. As of June 30, 2016, prior to recognition of impairment charges, the well and development costs consisted of $102.4 million relating to exploration, appraisal and development well costs and $219.9 million for costs associated with field development. As of December 31, 2015, prior to recognition of impairment charges, the well and development costs consisted of $104.0 million relating to well costs for the Heidelberg #1 exploration well, Heidelberg #3 appraisal well, and the Heidelberg #4 and Heidelberg #6 development wells and $221.2 million for costs associated with field development. Unproved Oil and Gas Properties As of June 30, 2016 and December 31, 2015, the Company has the following unproved property acquisition costs, net of valuation allowance on the consolidated balance sheets: June 30, 2016 December 31, 2015 ($ in thousands) Individual oil and gas leaseholds with carrying value greater than $1 million $ 255,203 $ 305,270 Individual oil and gas leaseholds with carrying value less than $1 million 75,626 77,706 330,829 382,976 Accumulated valuation allowance (169,217 ) (175,963 ) Total oil and gas leasehold $ 161,612 $ 207,013 Capitalized Exploration Well Costs If an exploration well provides evidence as to the existence of sufficient quantities of hydrocarbons to justify evaluation for potential development, drilling costs associated with the well are initially capitalized, or suspended, pending a determination as to whether a commercially sufficient quantity of proved reserves can be attributed to the area as a result of drilling. This determination may take longer than one year in certain areas (generally, deepwater and international locations) depending upon, among other things, (i) the amount of hydrocarbons discovered, (ii) the outcome of planned geological and engineering studies, (iii) the need for additional appraisal drilling activities to determine whether the discovery is sufficient to support an economic development plan and (iv) the requirement for government sanctioning in international locations before proceeding with development activities. The following tables reflect the Company’s net changes in and the cumulative costs of capitalized exploration well costs (excluding any related leasehold costs): June 30, 2016 December 31, 2015 ($ in thousands) Beginning of period $ 615,258 $ 330,099 Additions to capitalized exploration Exploration well costs 236,069 285,118 Capitalized interest 22,621 24,161 Reclassifications to wells, facilities, and equipment based on determination of proved reserves — — Amounts charged to expense(1) (111,619 ) (24,120 ) End of period $ 762,329 $ 615,258 (1) The amounts of $111.6 million for the six months ended June 30, 2016 and $24.1 million for the year ended December 31, 2015, represents impairment charges on exploration wells drilled in the U.S. Gulf of Mexico which did not encounter commercial hydrocarbons. June 30, 2016 December 31, 2015 ($ in thousands) Cumulative costs: Exploration well costs $ 701,144 $ 576,694 Capitalized interest 61,185 38,564 $ 762,329 $ 615,258 Well costs capitalized for a period greater than one year after completion of drilling (included in table above) $ 362,187 $ 351,753 As of June 30, 2016, capitalized exploration well costs that have been suspended longer than one year are associated with the Company’s Shenandoah, North Platte, Anchor, and Diaman discoveries. These well costs are suspended pending ongoing evaluation including, but not limited to, results of additional appraisal drilling, well-test analysis, additional geological and geophysical data and approval of a development plan. Management believes these discoveries exhibit sufficient indications of hydrocarbons to justify potential development and is actively pursuing efforts to fully assess them. If additional information becomes available that raises substantial doubt as to the economic or operational viability of these discoveries, the associated costs will be expensed at that time. The Heidelberg discovery has been sanctioned for development and the Heidelberg capitalized exploration and appraisal well costs were reclassified to development costs in 2013. In January 2016, the Company achieved initial production of oil and gas from the Heidelberg field. |
Other Assets
Other Assets | 6 Months Ended |
Jun. 30, 2016 | |
Other Assets [Abstract] | |
Other Assets | 8. Other Assets As of June 30, 2016 and December 31, 2015, the balance in other assets consisted of the following: June 30, 2016 December 31, 2015 (in thousands) Debt issue costs(1) $ — $ 3,595 Rig costs(2) 8,331 15,397 Other deposits 500 — $ 8,831 $ 18,992 (1) As of June 30, 2016 and December 31, 2015, the $0 million and $3.6 million, respectively, in debt issue costs was related to the issuance of the Borrowing Base Facility Agreement, as described in Note 9. On June 17, 2016, the Company terminated the Borrowing Base Facility Agreement and all associated costs were written off. (2) As of June 30, 2016 and December 31, 2015, the $8.3 million and $15.4 million, respectively, relate to costs associated with the Rowan Reliance drilling rig which is currently drilling in U.S. Gulf of Mexico. These costs are capitalized to the wells over the term of the respective drilling rig contracts. |
Long-term Debt
Long-term Debt | 6 Months Ended |
Jun. 30, 2016 | |
Long Term Debt [Abstract] | |
Long-term Debt | 9. Long-term Debt As of June 30, 2016, the Company’s long-term debt consists of the 2.625% convertible senior notes due 2019 issued on December 17, 2012 (the “2.625% Notes”), and the 3.125% convertible senior notes due 2024 issued on May 13, 2014 (the “3.125% Notes”, and, collectively with the 2.625% Notes, the “Notes”), as follows: Borrowing Base Facility Agreement On June 17, 2016, Cobalt GOM #1 LLC (“GOM #1”), an indirect wholly-owned subsidiary of the Company, terminated the Borrowing Base Facility Agreement among GOM #1, the Company, Société Générale, as administrative agent, and certain other lenders named therein (the “Facility Agreement”). The Facility Agreement provided for a limited recourse $150 million senior secured reserve-based term loan facility, with an amount available for borrowing at any one time limited to a periodically adjusted borrowing base amount. Based on discussions between the Company and the lenders under the Facility Agreement, the borrowing base amount under the Facility Agreement was expected to be materially reduced to a level that would not justify the ongoing expense of maintaining the facility. No borrowings were outstanding under the Facility Agreement at the time of termination, and no prepayment fees were payable by the Company or GOM #1 upon termination. Following termination of the Facility Agreement, all liens, mortgages, pledges and other security provided in favor of the lenders in connection with the Facility Agreement were terminated and released. In June 2016, the Company 2.625% Convertible Senior Notes due 2019 On December 17, 2012, the Company issued $1.38 billion aggregate principal amount of the 2.625% Notes. The 2.625% Notes are the Company’s senior unsecured obligations and interest is payable semi-annually in arrears on June 1 and December 1 of each year. The 2.625% Notes will mature on December 1, 2019, unless earlier repurchased or converted in accordance with the terms of the 2.625% Notes. The 2.625% Notes may be converted at the option of the holder at any time prior to 5:00 p.m., New York City time, on the second scheduled trading day immediately preceding the maturity date, in multiples of $1,000 principal amount. The 2.625% Notes are convertible at an initial conversion rate of 28.023 shares of common stock per $1,000 principal amount, representing an initial conversion price of approximately $35.68 per share for a total of approximately 38.7 million underlying shares. The conversion rate is subject to adjustment upon the occurrence of certain events, as defined in the indenture governing the 2.625% Notes, but will not be adjusted for any accrued and unpaid interest except in limited circumstances. Upon conversion, the Company’s conversion obligation may be satisfied, at the Company’s option, in cash, shares of common stock or a combination of cash and shares of common stock. 3.125% Convertible Senior Notes due 2024 On May 13, 2014, the Company issued $1.3 billion aggregate principal amount of the 3.125% Notes. The 3.125% Notes are the Company’s senior unsecured obligations and rank equal in right of payment to the 2.625% Notes. Interest on the 3.125% Notes is payable semi-annually in arrears on May 15 and November 15 of each year. The 3.125% Notes will mature on May 15, 2024, unless earlier repurchased, converted or redeemed in accordance with the terms of the Notes. Prior to November 15, 2023, the 3.125% Notes are convertible only under the following circumstances: (1) during any fiscal quarter commencing after March 31, 2015 (and only during such fiscal quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a 30 consecutive trading-day period ending on, and including, the last trading day of the immediately preceding fiscal quarter exceeds $30.00 on each applicable trading day; (2) during the five business-day period after any five consecutive trading-day period (the “3.125% Notes Measurement Period”) in which the trading price per $1,000 principal amount of notes for each trading day of the 3.125% Notes Measurement Period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (3) if the Company calls all or any portion of the 3.125% Notes for redemption, at any time prior to 5:00 p.m., New York City time, on the second scheduled trading day immediately preceding the related redemption date; or (4) upon the occurrence of specified distributions or the occurrence of specified corporate events. On or after November 15, 2023, the 3.125% Notes may be converted at the option of the holder at any time prior to 5:00 p.m., New York City time, on the second scheduled trading day immediately preceding the stated maturity date, in multiples of $1,000 principal amount. As of June 30, 2016, none of the conditions allowing holders of the 3.125% Notes to convert had been met. The 3.125% Notes are convertible at an initial conversion rate of 43.3604 shares of common stock per $1,000 principal amount, representing an initial conversion price of approximately $23.06 per share for a total of approximately 56.4 million underlying shares. The conversion rate is subject to adjustment upon the occurrence of certain events, as defined in the indenture governing the 3.125% Notes, but will not be adjusted for any accrued and unpaid interest except in limited circumstances. Upon conversion, the Company’s conversion obligation may be satisfied, at the Company’s option, in cash, shares of common stock or a combination of cash and shares of common stock. Holders of the Notes who convert their Notes in connection with a “make-whole fundamental change”, as defined in the indenture governing these Notes, may be entitled to a make-whole premium in the form of an increase in the conversion rate. Additionally, in the event of a fundamental change, as defined in the indenture governing the Notes, holders of the Notes may require the Company to repurchase for cash all or a portion of their Notes equal to $1,000 or a multiple of $1,000 at a fundamental change repurchase price equal to 100% of the principal amount of Notes, plus accrued and unpaid interest, if any, to, but not including, the fundamental change repurchase date. Upon the occurrence of an Event of Default, as defined within the indenture governing the Notes, the trustee or the holders of at least 25% in aggregate principal amount of the Notes then outstanding may declare 100% of the principal of, and accrued and unpaid interest on, all the Notes to be due and payable immediately. In accordance with accounting guidance relating to, “ Debt with Conversion and Other Options The carrying amounts of the liability components of the Notes were as follows: June 30, 2016 December 31, 2015 Principal Amount Unamortized discount and debt issuance costs (1) Carrying Amount Principal Amount Unamortized discount and debt issuance costs Carrying Amount ($ in thousands) Carrying amount of liability component 2.625% Notes $ 1,380,000 $ (229,048 ) $ 1,150,952 $ 1,380,000 $ (258,565 ) $ 1,121,435 3.125% Notes 1,300,000 (420,231 ) 879,769 1,300,000 (439,540 ) 860,460 Total $ 2,680,000 $ (649,279 ) $ 2,030,721 $ 2,680,000 $ (698,105 ) $ 1,981,895 (1) Unamortized discount and debt issuance costs will be amortized over the remaining life of the Notes which is 3.5 years for the 2.625% Notes and 8.0 years for the 3.125% Notes. See Note 1 related to a change in the classification of unamortized debt issuance costs on the Condensed Consolidated Balance Sheets. The carrying amounts of the equity components of the Notes were as follows: June 30, 2016 December 31, 2015 ($ in thousands) Debt discount relating to value of conversion option $ 866,340 $ 866,340 Debt issue costs (20,185 ) (20,185 ) Total $ 846,155 $ 846,155 Fair Value The fair value of the Notes was calculated based on the fair value of similar debt instruments since an observable quoted price of the Notes or a similar asset or liability is not readily available (Level 2 inputs). As of June 30, 2016 and December 31, 2015, the fair values of the Notes were as follows: June 30, 2016 December 31, 2015 ($ in thousands) 2.625% Notes $ 503,700 $ 793,500 3.125% Notes 432,276 640,250 Total $ 935,976 $ 1,433,750 As of June 30, 2016, the Company had $7.8 million accrued for interest on the Notes. For the three months ended June 30, 2016 and 2015, the interest expense, net of capitalized amount, relating to the Notes and certain costs and commitment fees associated with the Facility Agreement was $16.0 million and $17.8 million, respectively. For the six months ended June 30, 2016 and 2015, the interest expense, net of capitalized amount, relating to the Notes and certain costs and commitment fees associated with the Facility Agreement was $31.6 million and $37.9 million, respectively. As of June 30, 2016 and December 31, 2015, the debt discounts associated with the 2.625% Notes and the 3.125% Notes resulted in the recognition of $217.5 million and $233.6 million of deferred tax liability, respectively. |
Angola Transaction
Angola Transaction | 6 Months Ended |
Jun. 30, 2016 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Angola Transaction | 10. Angola Transaction On August 22, 2015, Cobalt International Energy Angola Ltd. (“Cobalt Angola”), a wholly-owned subsidiary of the Company, executed a purchase and sale agreement (the “Purchase and Sale Agreement”) with Sonangol for the sale by Cobalt Angola to Sonangol of the entire issued and outstanding share capital of CIE Angola Block 20 Ltd. and CIE Angola Block 21 Ltd., which respectively hold the Company’s 40% working interest in each of Block 20 and Block 21 offshore Angola for aggregate gross consideration of $1.75 billion before Angolan withholding taxes of approximately $19.7 million (to be netted out of the gross consideration to be paid to Cobalt Angola) and certain other U.S. and Angolan taxes, expenses, and contingent liabilities (the “Angola Transaction”). In accordance with the Purchase and Sale Agreement, Sonangol paid the Company $250 million (the “First Payment”). The First Payment has been reported as restricted cash and a liability on the balance sheet. Sonangol Pesquisa e Produção, S.A., an affiliate of Sonangol, currently holds a 30% working interest in Block 20 and a 60% working interest in Block 21. The Angola Transaction is subject to Angolan government approvals. On July 26, 2016, the Company’s Chief Executive Officer met with Sonangol’s Chairwoman of the Board of Directors Isabel dos Santos and members of her executive team in Luanda, Angola to discuss the status of the Angolan Transaction. At this meeting, it was jointly agreed with Sonangol that the Company would market its working interests in Blocks 20 and 21 for sale by the Company to a third party other than Sonangol. On August 1, 2016, the Company received a letter from Chairwoman Isabel dos Santos confirming Sonangol’s support of such marketing and sale process. The Company therefore believes that it is unlikely that the Angola Transaction will close pursuant to the terms of the Purchase and Sale Agreement and believe that it is likely that the Purchase and Sale Agreement will automatically terminate on August 22, 2016. In such a case, the Purchase and Sale Agreement provides that the parties are to be restituted in order to put them in their original positions as if no agreement had been executed. The Company plans to work with Sonangol to understand and agree on the financial and operational implications of this provision including with respect to the return of the First Payment and the payment of the $158.6 million of receivables owed to the Company by Sonangol. With respect to the marketing of its Angolan assets, the Company intends to immediately commence the marketing and sale process. Assets and Liabilities Held for Sale The following table summarizes the assets and liabilities associated with Blocks 9, 20, and 21 offshore Angola. Although the Company relinquished its working interest in Block 9 on February 29, 2016, the Company continues to have assets and liabilities associated with the entity. The Company continues to assess the balances for possible impairment as the assets and liabilities held for sale are required to be presented at fair value. There has been no impairment identified to date. June 30, 2016 December 31, 2015 ($ in thousands) Cash and cash equivalents $ 43,527 $ 8,578 Joint interest and other receivables 159,542 156,599 Prepaid expenses and other current assets 5,025 8,216 Inventory 43,147 56,224 Short term restricted funds — 22,538 Oil and gas properties 1,611,828 1,465,299 Other property and equipment, net 10,107 10,107 Long term restricted funds — 82,568 Other assets 338 922 Total assets of the discontinued operation 1,873,514 1,811,051 Trade and other accounts payable (20,528 ) (6,089 ) Accrued liabilities (81,415 ) (128,259 ) Short term contractual obligations (92,076 ) (115,110 ) Long term contractual obligations (2,688 ) (1,381 ) Other long term liabilities — — Total liabilities of the discontinued operation $ (196,707 ) $ (250,839 ) Results for Blocks 9, 20, and 21 offshore Angola classified within discontinued operations consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Seismic and exploration $ 3,093 $ 5,646 $ 10,410 $ 9,348 Dry hole expense and impairment (1,677 ) 611 1,874 611 General and administrative 3,688 6,258 13,009 12,778 Depreciation and amortization — 926 — 1,856 Gain on the release of letters of credit (1) — — (4,375 ) — Net loss from discontinued operations $ 5,104 $ 13,441 $ 20,918 $ 24,593 (1) Amount represents the gain recognized on the release of the Block 9 letter of credit that was previously written off. |
Seismic and Exploration Expense
Seismic and Exploration Expenses | 6 Months Ended |
Jun. 30, 2016 | |
Oil And Gas Exploration And Production Industries Disclosures [Abstract] | |
Seismic and Exploration Expenses | 11. Seismic and Exploration Expenses Seismic and exploration expenses consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Seismic costs $ 3,024 $ 7,970 $ 570 $ 19,801 Leasehold delay rentals 3,297 2,936 4,561 4,327 Other exploration expense 14 361 (50 ) 1,206 $ 6,335 $ 11,267 $ 5,081 $ 25,334 |
Equity Based Compensation
Equity Based Compensation | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity Based Compensation | 12. Equity Based Compensation The Company accounts for stock-based compensation at fair value. The Company grants various types of stock-based awards including stock options, stock appreciation rights, restricted stock, restricted stock units and performance-based awards. The fair value of stock option awards is determined using the Black-Scholes-Merton option-pricing model. For restricted stock awards with market conditions, the fair value of the awards is measured using the Monte Carlo pricing model. Restricted stock awards without market conditions are valued using the market price of the Company’s common stock on the grant date. The Company records compensation cost, net of estimated forfeitures, for stock-based compensation awards over the requisite service period except for performance-based awards, which are amortized on a straight-line basis over a weighted average period. During the six months ended June 30, 2016, the Company granted a total of 571,428 shares of restricted stock, 3,491,352 restricted stock units and 1,129,944 stock options to employees which include 571,428 shares of restricted stock and 1,129,944 stock options with both service and market conditions granted to two senior officers under the terms of their employment agreements. During the six months ended June 30, 2016, the Company granted 82,898 shares of common stock as retainer awards and 362,934 restricted stock units to its non-employee directors. On February 18, 2016, the Company granted 3,491,352 restricted stock units (“RSUs”) under the Company’s 2015 Long Term Incentive Plan (the “2015 Plan”) to the Company’s employees based on the common stock market price at the time of issuance of $2.44 per share. The RSU’s will vest in equal installments on each of March 1, 2017, March 1, 2018, and March 1, 2019 by issuance of the Company’s shares of common stock or by cash or by a combination thereof, at the discretion of the Company. The fair value of the RSU’s on the date of grant was $10.4 million. The Company accounts for the RSUs as compensation cost and records a corresponding liability based on the fair value of the RSUs at the end of each reporting period. For the three months ended June 30, 2016 and 2015, the Company recognized $1.3 million and $0.0 million, respectively, in compensation expense relating to the RSU awards. For the six months ended June 30, 2016 and 2015, the Company recognized $1.3 million and $0.0 million, respectively, in compensation expense relating to the RSU awards. The Company recorded equity based compensation expense, net of forfeitures, of ($4.9) million and $7.1 million for the three months ended June 30, 2016 and 2015, respectively. The Company recorded equity based compensation expense, net of forfeitures, of $2.8 million and $13.0 million for the six months ended June 30, 2016 and 2015, respectively. On February 20, 2015, the Company issued a total of 1,526,835 share appreciation rights (“SARs”) under the Company’s Long Term Incentive Plan to the Company’s officers, based on the common stock market price at the time of issuance of $8.87 per share. The SARs will vest with respect to one-third (1/3) of the underlying shares on each anniversary of the grant date over the next three years and may be settled, at the Company’s discretion, by issuance of the Company’s shares or by cash or by a combination of the Company’s shares and cash based on the fair market value of the shares on date of exercise. The fair value of a SAR is determined using the Black-Scholes-Merton option-pricing model which at the date of grant was $4.53 per SAR share. The Company accounts for the SAR awards as compensation cost and records a corresponding liability based on the fair value of the SARs at the end of each reporting period. As of June 30, 2016, the fair value of each SAR decreased to $2.74, resulting in a reduction of the fair value of $1.3 million. For the three months ended June 30, 2016 and 2015, the Company recognized $0.1 million and $0.4 million, respectively, in compensation expense relating to the SAR awards. For the six months ended June 30, 2016 and 2015, the Company recognized $0.6 million and $0.9 million, respectively, in compensation expense relating to the SAR. On April 30, 2015, the Company’s stockholders approved the 2015 Plan. The total number of shares of the Company’s common stock available for issuance under the 2015 Plan is 12,000,000. The 2015 Plan provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based awards. As of June 30, 2016, the Company has awarded 1,851,372 shares under the 2015 Plan, not including the 3,491,352 RSU’s which may be settled in cash at the Company’s election. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income taxes | 13. Income taxes We recorded no income tax expense or benefit for the three and six months ended June 30, 2016. We increased our valuation allowance and reduced our net deferred tax assets to zero during 2009 after considering all available positive and negative evidence related to the realization of our deferred tax assets. Our assessment of the realization of our deferred tax assets has not changed, and as a result we continue to maintain a full valuation allowance for our net deferred assets as of June 30, 2016. As of June 30, 2016, we have no unrecognized tax benefits. There were no significant changes to the calculation since December 31, 2015. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | 14. Contingencies The Company is currently, and from time to time may be, subject to various lawsuits, claims and proceedings that arise in the normal course of business, including employment, commercial, environmental, safety and health matters. It is not presently possible to determine whether any such matters will have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity. |
Other Matters
Other Matters | 6 Months Ended |
Jun. 30, 2016 | |
Legal Proceedings Disclosure [Abstract] | |
Other Matters | 15. Other Matters As previously disclosed, in November 2011 a formal order of investigation was issued by the SEC related to the Company’s operations in Angola. In August 2014, the Company received a Wells Notice from the SEC related to this investigation. In January 2015, the Company received a termination letter from the SEC advising that the SEC’s FCPA investigation has concluded and the Staff does not intend to recommend any enforcement action by the SEC. This letter formally concluded the SEC’s investigation. The Company continues to cooperate with the Department of Justice (“DOJ”) with regard to its ongoing parallel investigation. The Company is unable to predict the outcome of the DOJ’s ongoing investigation or any action that the DOJ may decide to pursue. On February 19, 2016, the Company initiated a workforce reduction program in response to the Angola Transaction and prolonged commodity price weakness, which has resulted in a reduction of the Company’s capital programs and other operations. The Company expects to recognize the majority of these restructuring costs in the first and second quarters of 2016 and will recognize the remaining costs throughout 2016 until the remaining employee terminations have occurred. Included in the three and six months ended June 30, 2016 was $3.0 million and $6.1 million, respectively, of severance costs associated with the Company’s workforce reduction plan. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the financial statements of Cobalt International Energy, Inc. and all of its wholly-owned subsidiaries. All significant intercompany transactions and amounts have been eliminated for all periods presented. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the appropriate rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, the condensed consolidated financial statements do not include all of the information and footnote disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for interim periods are not necessarily indicative of the results that may be presented for the entire year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. |
Correction of Immaterial Errors | Correction of Immaterial Errors The accompanying unaudited condensed financial statements for the six months ended June 30, 2016 include a reduction of impairment charges related to the Heidelberg field totaling approximately $8.5 million related to the prior year. The amounts were not deemed material with respect to such prior year or the anticipated results and the trend of earnings for fiscal year 2016. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (“ASU 2016-02”), Leases (Subtopic 842). Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, ASU 2016-02 will require both types of leases to be recognized on the balance sheet. ASU 2016-02 also will require disclosures to help investors and other financial statement users to better understand the amount, timing and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. ASU 2016-02 does not apply for leases for oil and gas properties, but does apply to equipment used to explore and develop oil and gas resources. The Company currently does not have any leases classified as financing leases. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018 and is to be applied using the modified retrospective approach. The Company has not yet fully determined or quantified the effect ASU 2016-02 will have on the Company’s financial statements. In March 2016, the FASB issued Accounting Standards Update No. 2016-09 (“ASU 2016-09”), Compensation – Stock Compensation (Subtopic 718). The objective of ASU 2016-09 is for simplification involving several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016 and early adoption is permitted. The Company has not yet fully determined or quantified the effect ASU 2016-09 will have on the Company’s financial statements. In May 2016, the FASB issued Accounting Standards Update No. 2016-11 (“ASU 2016-11”), Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting. The guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. The Company is required to adopt the new standards in the first quarter of 2018 using one of two retrospective application methods. The Company is continuing to evaluate the provisions of these ASUs, and has not determined the impact these standards may have on its consolidated financial statements and related disclosures or decided upon the method of adoption. In April 2015, Financial Accounting Standards Board (FASB) amended Accounting Standard Codification Subtopic No. 835-30, Interest—Imputation of Interest (the “ASC Subtopic 835-30”). The amendments require 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. The recognition and measurement guidance for debt issuance costs are not affected by the amendments. The amendments under ASC Subtopic 835-30 are effective for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. The adoption of ASU 2015-03 resulted in $32.9 million of unamortized debt issuance costs reclassified from long-term assets to a reduction in long-term liabilities as of December 31, 2015. In July 2015, the FASB issued Accounting Standards Update (ASU) 2015-11, "Accounting for Inventory" (ASU 2015-11), which requires entities to measure most inventory at lower of cost or net realizable value. ASU 2015-11 defines net realizable value as "the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation." ASU 2015-11 is effective prospectively for interim and annual periods beginning after December 15, 2016. The Company adopted the amendments to ASC 2015-11 on January 1, 2016. The adoption of ASC 2015-11 did not have material impact on the Company’s financial statements. In August 2014, the FASB issued a new standard related to the disclosure of uncertainties about an entity's ability to continue as a going concern (ASU 2014-15). The new standard will explicitly require management to assess an entity's ability to continue as a going concern every reporting period and to provide related footnote disclosures in certain circumstances. The new standard will be effective for all entities in the first annual period ending after December 15, 2016, with early adoption permitted. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09 (“ASU 2014-09”), Summary and Amendments That Create Revenue from Contracts and Customers (Subtopic 606). ASU 2014-09 amends and replaces current revenue recognition requirements, including most industry-specific guidance. The revised guidance establishes a five step approach to be utilized in determining when, and if, revenue should be recognized. ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2017. Upon application, an entity may elect one of two methods, either restatement of prior periods presented or recording a cumulative adjustment in the initial period of application. The Company has not determined the effect ASU 2014-09 will have on the recognition of its revenue, if any, nor has the Company determined the method the Company will utilize upon adoption, which would be in the first quarter of 2018. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by the Company include (i) accruals related to expenses, (ii) assumptions used in estimating fair value of equity based awards and the fair value of the liability component of the convertible senior notes and (iii) assumptions used in impairment testing. Although the Company believes these estimates are reasonable, actual results could differ from these estimates. |
Investments | Investments The Company’s policy on accounting for its investments, which consist entirely of debt securities, is based on the accounting guidance relating to “ Accounting for Certain Investments in Debt and Equity Securities See Note 5—Investments Investments are considered to be impaired when a decline in fair value is determined to be other-than-temporary. The Company conducts a regular assessment of its debt securities with unrealized losses to determine whether securities have other-than-temporary impairment (“OTTI”). This assessment considers, among other factors, the nature of the securities, credit rating or financial condition of the issuer, the extent and duration of the unrealized loss, market conditions and whether the Company intends to sell or whether it is more likely than not that the Company will be required to sell the debt securities. As of June 30, 2016 and December 31, 2015, the Company has no OTTI in its debt securities. |
Property, Plant, and Equipment | Property, Plant, and Equipment The Company uses the “successful efforts” method of accounting for its oil and gas properties. Acquisition costs for unproved leasehold properties and costs of drilling exploration wells are capitalized pending determination of whether proved reserves can be attributed to the areas as a result of drilling those wells. Under the successful efforts method of accounting, proved leasehold costs are capitalized and amortized over the proved developed and undeveloped reserves on a units-of-production basis. Successful drilling costs, costs of development and developmental dry holes are capitalized and amortized over the proved developed reserves on a units-of-production basis. When circumstances indicate that proved oil and gas properties may be impaired, the Company compares expected undiscounted future cash flows at a depreciation, depletion and amortization group level to the unamortized capitalized cost of the asset. If the expected undiscounted future cash flows, based on the Company's estimate of future crude oil and natural gas prices, operating costs, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is generally calculated using the Income Approach described in the Fair Value Measurement Topic of the ASC. Significant unproved leasehold costs are capitalized and are not amortized, pending an evaluation of their exploration potential. Unproved leasehold costs are assessed periodically to determine if an impairment of the cost of individual properties has occurred. Factors taken into account for impairment analysis include results of the technical studies conducted, lease terms and management’s future exploration plans. The cost of impairment is charged to expense in the period in which it occurs. Costs incurred for exploration dry holes, geological and geophysical work (including the cost of seismic data), and delay rentals are charged to expense as incurred. Costs of other property and equipment are depreciated on a straight-line basis based on their respective useful lives. |
Asset Retirement Obligation | Asset Retirement Obligation The Company expects to have significant obligations under its lease agreements and federal regulation to remove its equipment and restore land or seabed at the end of oil and natural gas production operations. These asset retirement obligations (“ARO”) are primarily associated with plugging and abandoning wells and removing and disposing of offshore oil and natural gas platforms. Estimating the future restoration and removal cost is difficult and requires the Company to make estimates and judgments because most of the removal obligations are many years in the future and contracts and regulation often have vague descriptions of what constitutes removal. Pursuant to the accounting guidance relating to “ Assets Retirement Obligations Inherent to the present value calculation are numerous estimates, assumptions and judgments, including the ultimate settlement amounts, inflation factors, credit adjusted risk-free rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the present value of the abandonment liability, the Company will make corresponding adjustments to both the asset retirement obligation and the related oil and natural gas property asset balance. Increases in the discounted abandonment liability resulting from the passage of time will be reflected as additional accretion expense in the consolidated statement of operations. The following summarizes the changes in the asset retirement obligation for the six months ended June 30, 2016: June 30, 2016 ($ Beginning of period $ 3,167 Liabilities incurred — Accretion 204 End of period $ 3,371 |
Capitalized Interest | Capitalized Interest For exploration and development projects that have not commenced production, interest is capitalized as part of the historical cost of developing and constructing assets. Capitalized interest is determined by multiplying the Company’s weighted-average borrowing cost on debt by the average amount of qualifying costs incurred. Once an asset subject to interest capitalization is completed and placed in service, the associated capitalized interest is expensed through depreciation or impairment. See Note 7—Property, Plant, and Equipment and Note 9—Long-term Debt |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic loss per share was calculated by dividing net income or loss applicable to common shares by the weighted average number of common shares outstanding during the periods presented. The weighted average number of shares used in the calculation for the three and six months ended June 30, 2016 were 409,920,869 and 409,590,679, respectively. The calculation of diluted loss per share includes the potential dilutive impact of non-vested restricted stock, non-vested restricted stock units, outstanding stock options, the 2.625% convertible senior notes due 2019 and the 3.125% convertible senior notes due 2024 during the period, unless their effect is anti-dilutive. For the three and six months ended June 30, 2016, 8,808,708 shares of non-vested restricted stock, non-vested restricted stock units, outstanding stock options, the 2.625% convertible senior notes due 2019 and the 3.125% convertible senior notes due 2024, were excluded from the diluted loss per share calculation because they were anti-dilutive. For the three and six months ended June 30, 2015, 9,967,516 shares of non-vested restricted stock, non-vested restricted stock units, outstanding stock options and the 2.625% convertible senior notes due 2019 and the 3.125% convertible senior notes due 2024, were excluded from the diluted loss per share because they are anti-dilutive. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of changes in asset retirement obligation | The following summarizes the changes in the asset retirement obligation for the six months ended June 30, 2016: June 30, 2016 ($ Beginning of period $ 3,167 Liabilities incurred — Accretion 204 End of period $ 3,371 |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Cash And Cash Equivalents [Abstract] | |
Cash and cash equivalents | Cash and cash equivalents consisted of the following: June 30, 2016 December 31, 2015 ($ in thousands) Cash at banks $ 22,918 $ 33,173 Money market funds 23,064 — Held-to-maturity securities(1) 85,679 38,420 $ 131,661 $ 71,593 (1) These securities mature three months or less from the date of purchase. |
Restricted Cash and Cash Equi25
Restricted Cash and Cash Equivalents Investments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Restricted Cash And Investments [Abstract] | |
Schedule of Restricted Cash and Cash Equivalents and Investments | Restricted cash and cash equivalents and investments consisted of the following: June 30, 2016 December 31, 2015 ($ in thousands) Angolan sale proceeds $ 250,000 $ 250,000 American Express Bank pledge agreement — 750 Citibank commercial card agreement 2,200 2,200 Total restricted funds(1) $ 252,200 $ 252,950 (1) Pursuant to the purchase and sale agreement governing the Angola Transaction, the Company received the First Payment of $250 million during the quarterly period ended September 30, 2015. See Note 10—Angola Transaction. |
Joint Interest and Other Rece26
Joint Interest and Other Receivables (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Receivables [Abstract] | |
Schedule of joint interest, revenue and other receivables | June 30, 2016 December 31, 2015 ($ in thousands) Partners in the U.S. Gulf of Mexico $ 45,423 $ 50,766 Revenue receivable 1,909 — Accrued interest on investment securities 1,005 3,567 Other 595 376 $ 48,932 $ 54,709 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Investments Debt And Equity Securities [Abstract] | |
Schedule of Fair Value of Held-to-maturity Securities Recorded at Amortized Cost | The Company’s investments in held-to-maturity securities, which are recorded at cost which approximates fair market value, were as follows as of June 30, 2016 and December 31, 2015: June 30, 2016 December 31, 2015 ($ in thousands) Corporate securities $ 120,501 $ 492,955 Commercial paper 526,383 604,986 U.S. Treasury securities 91,421 — Certificates of deposit — 20,750 Total $ 738,305 $ 1,118,691 |
Schedule of Held-to-maturity Securities Included in the Company's Condensed Consolidated Balance Sheet | The Company’s condensed consolidated balance sheet included the following held-to-maturity securities: June 30, 2016 December 31, 2015 ($ in thousands) Cash and cash equivalents $ 85,679 $ 38,420 Short-term investments 440,866 885,994 Restricted cash and cash equivalents and investments 202,716 194,277 Long-term restricted funds 9,044 — $ 738,305 $ 1,118,691 |
Schedule of Contractual Maturities of Held-to-maturity Securities | The contractual maturities of these held-to-maturity securities as of June 30, 2016 and December 31, 2015 were as follows: June 30, 2016 December 31, 2015 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value ($ in thousands) Within 1 year $ 738,305 $ 738,305 $ 1,118,691 $ 1,118,691 After 1 year — — — — $ 738,305 $ 738,305 $ 1,118,691 $ 1,118,691 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Significant Financial Instruments Measured on a Recurring Basis as Categorized by the Fair Value Measurement Hierarchy | The following tables summarize the Company’s significant financial instruments measured on a recurring basis as categorized by the fair value measurement hierarchy: Level 1 Level 2 Balance as of Carrying Value Fair Value(1) Carrying Value Fair Value(1) June 30, 2016 ($ in thousands) Cash and cash equivalents: Cash $ 22,918 $ 22,918 $ — $ — $ 22,918 Money market funds 23,064 23,064 — — 23,064 Commercial paper — — 85,679 85,679 85,679 Subtotal 45,982 45,982 85,679 85,679 131,661 Restricted cash and cash equivalents and investments: Money market funds 49,484 49,484 — — 49,484 Commercial paper — — 82,215 82,215 82,215 Corporate bonds — — 120,501 120,501 120,501 Certificates of deposit — — — — — Subtotal 49,484 49,484 202,716 202,716 252,200 Short-term investments: U.S. Treasury securities — — 82,377 82,377 82,377 Corporate bonds — — — — — Commercial paper — — 358,489 358,489 358,489 Certificates of deposit — — — — — Subtotal — — 440,866 440,866 440,866 Long-term restricted funds: U.S. Treasury securities — — 9,044 9,044 9,044 Subtotal — — 9,044 9,044 9,044 Total $ 95,466 $ 95,466 $ 738,305 $ 738,305 $ 833,771 Level 1 Level 2 Balance as of Carrying Value Fair Value(1) Carrying Value Fair Value(1) December 31, 2015 ($ in thousands) Cash and cash equivalents: Cash $ 33,173 $ 33,173 $ — $ — $ 33,173 Money market funds — — — — — Commercial paper — — 38,420 38,420 38,420 Subtotal 33,173 33,173 38,420 38,420 71,593 Restricted cash and cash equivalents: Money market funds 58,673 58,673 — — 58,673 Commercial paper — — 188,517 188,517 188,517 Corporate bonds — — 5,010 5,010 5,010 Certificates of deposit — — 750 750 750 Subtotal 58,673 58,673 194,277 194,277 252,950 Short-term investments: U.S. Agency securities — — — — — Corporate bonds — — 487,946 487,946 487,946 Commercial paper — — 378,048 378,048 378,048 Certificates of deposit — — 20,000 20,000 20,000 Subtotal — — 885,994 885,994 885,994 Long-term investments: Corporate bonds — — — — — Subtotal — — — — — Total $ 91,846 $ 91,846 $ 1,118,691 $ 1,118,691 $ 1,210,537 (1) As of June 30, 2016 and December 31, 2015, the Company did not record any OTTI on these assets. |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property, Plant, and Equipment | Property, plant, and equipment is stated at cost less accumulated depletion/depreciation/amortization and consisted of the following: Estimated Useful Life (Years) June 30, 2016 December 31, 2015 ($ in thousands) Oil and Gas Properties: Proved properties: Well and development costs $ 84,157 $ 71,463 Less: accumulated depletion (6,574 ) — Total proved properties 77,584 71,463 Unproved properties: Oil and gas leasehold 330,829 382,976 Less: accumulated valuation allowance (169,217 ) (175,963 ) 161,612 207,013 Exploration wells in process 762,329 615,258 Total unproved properties 923,941 822,271 Total oil and gas properties, net 1,001,526 893,734 Other Property and Equipment: Computer equipment and software 3 8,782 5,350 Office equipment and furniture 3 – 1,349 1,349 Leasehold improvements 3 – 2,150 2,150 12,281 8,849 Less: accumulated depreciation and amortization (7,533 ) (6,647 ) Total other property and equipment, net 4,748 2,202 Property, plant, and equipment, net $ 1,006,274 $ 895,936 |
Schedule of Unproved Property Acquisition Costs, Net of Valuation Allowance | As of June 30, 2016 and December 31, 2015, the Company has the following unproved property acquisition costs, net of valuation allowance on the consolidated balance sheets: June 30, 2016 December 31, 2015 ($ in thousands) Individual oil and gas leaseholds with carrying value greater than $1 million $ 255,203 $ 305,270 Individual oil and gas leaseholds with carrying value less than $1 million 75,626 77,706 330,829 382,976 Accumulated valuation allowance (169,217 ) (175,963 ) Total oil and gas leasehold $ 161,612 $ 207,013 |
Schedule of Net Changes in Capitalized Exploration Well Costs | The following tables reflect the Company’s net changes in and the cumulative costs of capitalized exploration well costs (excluding any related leasehold costs): June 30, 2016 December 31, 2015 ($ in thousands) Beginning of period $ 615,258 $ 330,099 Additions to capitalized exploration Exploration well costs 236,069 285,118 Capitalized interest 22,621 24,161 Reclassifications to wells, facilities, and equipment based on determination of proved reserves — — Amounts charged to expense(1) (111,619 ) (24,120 ) End of period $ 762,329 $ 615,258 (1) The amounts of $111.6 million for the six months ended June 30, 2016 and $24.1 million for the year ended December 31, 2015, represents impairment charges on exploration wells drilled in the U.S. Gulf of Mexico which did not encounter commercial hydrocarbons. |
Schedule of Cumulative Costs of Capitalized Exploration Well Costs | June 30, 2016 December 31, 2015 ($ in thousands) Cumulative costs: Exploration well costs $ 701,144 $ 576,694 Capitalized interest 61,185 38,564 $ 762,329 $ 615,258 Well costs capitalized for a period greater than one year after completion of drilling (included in table above) $ 362,187 $ 351,753 |
Other Assets (Tables)
Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Other Assets [Abstract] | |
Schedule of Other Assets | As of June 30, 2016 and December 31, 2015, the balance in other assets consisted of the following: June 30, 2016 December 31, 2015 (in thousands) Debt issue costs(1) $ — $ 3,595 Rig costs(2) 8,331 15,397 Other deposits 500 — $ 8,831 $ 18,992 (1) As of June 30, 2016 and December 31, 2015, the $0 million and $3.6 million, respectively, in debt issue costs was related to the issuance of the Borrowing Base Facility Agreement, as described in Note 9. On June 17, 2016, the Company terminated the Borrowing Base Facility Agreement and all associated costs were written off. (2) As of June 30, 2016 and December 31, 2015, the $8.3 million and $15.4 million, respectively, relate to costs associated with the Rowan Reliance drilling rig which is currently drilling in U.S. Gulf of Mexico. These costs are capitalized to the wells over the term of the respective drilling rig contracts. |
Long-term Debt (Tables)
Long-term Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Long Term Debt [Abstract] | |
Schedule of The Carrying Amounts of The Liability Components of The Notes | The carrying amounts of the liability components of the Notes were as follows: June 30, 2016 December 31, 2015 Principal Amount Unamortized discount and debt issuance costs (1) Carrying Amount Principal Amount Unamortized discount and debt issuance costs Carrying Amount ($ in thousands) Carrying amount of liability component 2.625% Notes $ 1,380,000 $ (229,048 ) $ 1,150,952 $ 1,380,000 $ (258,565 ) $ 1,121,435 3.125% Notes 1,300,000 (420,231 ) 879,769 1,300,000 (439,540 ) 860,460 Total $ 2,680,000 $ (649,279 ) $ 2,030,721 $ 2,680,000 $ (698,105 ) $ 1,981,895 (1) Unamortized discount and debt issuance costs will be amortized over the remaining life of the Notes which is 3.5 years for the 2.625% Notes and 8.0 years for the 3.125% Notes. See Note 1 related to a change in the classification of unamortized debt issuance costs on the Condensed Consolidated Balance Sheets. |
Schedule of Carrying Amounts of The Equity Components of The Notes | The carrying amounts of the equity components of the Notes were as follows: June 30, 2016 December 31, 2015 ($ in thousands) Debt discount relating to value of conversion option $ 866,340 $ 866,340 Debt issue costs (20,185 ) (20,185 ) Total $ 846,155 $ 846,155 |
Schedule of The Fair Value of The Notes Excluding The Conversion Feature | As of June 30, 2016 and December 31, 2015, the fair values of the Notes were as follows: June 30, 2016 December 31, 2015 ($ in thousands) 2.625% Notes $ 503,700 $ 793,500 3.125% Notes 432,276 640,250 Total $ 935,976 $ 1,433,750 |
Angola Transaction (Tables)
Angola Transaction (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Summary of Assets and Liabilities and Operation Results Associated with Blocks 9, 20, and 21 Offshore Angola | The following table summarizes the assets and liabilities associated with Blocks 9, 20, and 21 offshore Angola. Although the Company relinquished its working interest in Block 9 on February 29, 2016, the Company continues to have assets and liabilities associated with the entity. The Company continues to assess the balances for possible impairment as the assets and liabilities held for sale are required to be presented at fair value. There has been no impairment identified to date. June 30, 2016 December 31, 2015 ($ in thousands) Cash and cash equivalents $ 43,527 $ 8,578 Joint interest and other receivables 159,542 156,599 Prepaid expenses and other current assets 5,025 8,216 Inventory 43,147 56,224 Short term restricted funds — 22,538 Oil and gas properties 1,611,828 1,465,299 Other property and equipment, net 10,107 10,107 Long term restricted funds — 82,568 Other assets 338 922 Total assets of the discontinued operation 1,873,514 1,811,051 Trade and other accounts payable (20,528 ) (6,089 ) Accrued liabilities (81,415 ) (128,259 ) Short term contractual obligations (92,076 ) (115,110 ) Long term contractual obligations (2,688 ) (1,381 ) Other long term liabilities — — Total liabilities of the discontinued operation $ (196,707 ) $ (250,839 ) |
Results for Blocks 9, 20, and 21 Offshore Angola Classified within Discontinued Operations | Results for Blocks 9, 20, and 21 offshore Angola classified within discontinued operations consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Seismic and exploration $ 3,093 $ 5,646 $ 10,410 $ 9,348 Dry hole expense and impairment (1,677 ) 611 1,874 611 General and administrative 3,688 6,258 13,009 12,778 Depreciation and amortization — 926 — 1,856 Gain on the release of letters of credit (1) — — (4,375 ) — Net loss from discontinued operations $ 5,104 $ 13,441 $ 20,918 $ 24,593 (1) Amount represents the gain recognized on the release of the Block 9 letter of credit that was previously written off. |
Seismic and Exploration Expen33
Seismic and Exploration Expenses (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Oil And Gas Exploration And Production Industries Disclosures [Abstract] | |
Schedule of Seismic and Exploration Expenses | Seismic and exploration expenses consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Seismic costs $ 3,024 $ 7,970 $ 570 $ 19,801 Leasehold delay rentals 3,297 2,936 4,561 4,327 Other exploration expense 14 361 (50 ) 1,206 $ 6,335 $ 11,267 $ 5,081 $ 25,334 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Schedule of Changes in Asset Retirement Obligation (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Changes in asset retirement obligation | |
Beginning of period | $ 3,167 |
Liabilities incurred | 0 |
Accretion | 204 |
End of period | $ 3,371 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2016USD ($)shares | Jun. 30, 2015shares | Jun. 30, 2016USD ($)segmentshares | Jun. 30, 2015shares | Dec. 31, 2015USD ($) | Aug. 22, 2015 | Mar. 31, 2015 | May 13, 2014 | Dec. 17, 2012 | |
Description of Operations | |||||||||
Percentage of working interest acquired | 9.375% | ||||||||
Number of reportable segment | segment | 1 | ||||||||
Reclassification of unamortized debt issuance costs | $ 3,595,000 | ||||||||
Investments | |||||||||
OTTI in debt securities | $ 0 | $ 0 | 0 | ||||||
Earnings (Loss) Per Share | |||||||||
Weighted average number of shares outstanding, basic | shares | 409,920,869 | 409,590,679 | |||||||
Shares of non-vested restricted stock, non vested restricted stock units, outstanding stock options and 2.625% convertible senior notes due 2019 and 3.125% convertible senior notes due 2024, excluded from the diluted loss per share calculation | shares | 8,808,708 | 9,967,516 | 8,808,708 | 9,967,516 | |||||
2.625% convertible senior notes due 2019 | |||||||||
Earnings (Loss) Per Share | |||||||||
Interest rate (as a percent) | 2.625% | 2.625% | 2.625% | 2.625% | 2.625% | ||||
3.125% convertible senior notes due 2024 | |||||||||
Earnings (Loss) Per Share | |||||||||
Interest rate (as a percent) | 3.125% | 3.125% | 3.125% | 3.125% | 3.125% | ||||
New Accounting Pronouncement Early Adoption Effect | |||||||||
Description of Operations | |||||||||
Reclassification of unamortized debt issuance costs | $ 32,900,000 | ||||||||
Impairment charges related to Heidelberg field | |||||||||
Description of Operations | |||||||||
Reduction of impairment charges related to prior year | $ 8,500,000 | ||||||||
Discontinued operations held for sale | Block 20, offshore Angola | CIE Angola Block 20 Ltd | |||||||||
Description of Operations | |||||||||
Percentage of working interest acquired | 40.00% | ||||||||
Discontinued operations held for sale | Block 21, offshore Angola | CIE Angola Block 21 Ltd | |||||||||
Description of Operations | |||||||||
Percentage of working interest acquired | 40.00% |
Cash and Cash Equivalents - Cas
Cash and Cash Equivalents - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Cash And Cash Equivalents [Abstract] | ||||
Cash at banks | $ 22,918 | $ 33,173 | ||
Money market funds | 23,064 | |||
Held-to-maturity securities | 85,679 | 38,420 | ||
Total | $ 131,661 | $ 71,593 | $ 138,074 | $ 246,705 |
Restricted Cash and Cash Equi37
Restricted Cash and Cash Equivalents and Investments - Schedule of Restricted Cash and Cash Equivalents and Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Restricted Cash and Cash Equivalents and Investments | ||
Restricted cash and cash equivalents and investments | $ 252,200 | $ 252,950 |
Angolan sale proceeds | ||
Restricted Cash and Cash Equivalents and Investments | ||
Restricted cash and cash equivalents and investments | 250,000 | 250,000 |
American Express Bank pledge agreement | ||
Restricted Cash and Cash Equivalents and Investments | ||
Restricted cash and cash equivalents and investments | 750 | |
Citibank commercial card agreement | ||
Restricted Cash and Cash Equivalents and Investments | ||
Restricted cash and cash equivalents and investments | $ 2,200 | $ 2,200 |
Restricted Cash and Cash Equi38
Restricted Cash and Cash Equivalents and Investments - Schedule of Restricted Cash and Cash Equivalents and Investments (Parenthetical) (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Restricted Cash and Cash Equivalents and Investments | |||
Restricted cash and cash equivalents and investments | $ 252,200 | $ 252,950 | |
Angolan sale proceeds | |||
Restricted Cash and Cash Equivalents and Investments | |||
Consideration received | $ 250,000 | ||
Restricted cash and cash equivalents and investments | 250,000 | $ 250,000 | |
American Express Bank And Citibank Pledge Agreement | |||
Restricted Cash and Cash Equivalents and Investments | |||
Collateral held | $ 2,200 |
Joint Interest and Other Rece39
Joint Interest and Other Receivables - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2016 | |
Receivables [Abstract] | |
Settlement period for bills under operating agreements | 30 days |
Joint Interest and Other Rece40
Joint Interest and Other Receivables - Schedule of Joint Interest, Revenue and Other Receivables (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Joint Interest and Other Receivables | ||
Receivable attributable to joint interest partners | $ 48,932 | $ 54,709 |
Revenue receivable | 1,909 | |
Accrued interest on investment securities | 1,005 | 3,567 |
Other | 595 | 376 |
Partners in the U.S. Gulf of Mexico | ||
Joint Interest and Other Receivables | ||
Receivable attributable to joint interest partners | $ 45,423 | $ 50,766 |
Investments - Schedule of Fair
Investments - Schedule of Fair Value of Held-to-maturity Securities Recorded at Amortized Cost (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Schedule Of Held To Maturity Securities [Line Items] | ||
Fair market value | $ 738,305 | $ 1,118,691 |
Corporate securities | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Fair market value | 120,501 | 492,955 |
U.S. Treasury securities | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Fair market value | 91,421 | |
Commercial paper | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Fair market value | $ 526,383 | 604,986 |
Certificates of deposit | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Fair market value | $ 20,750 |
Investments - Schedule of Held-
Investments - Schedule of Held-to-maturity Securities Included in the Company's Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Schedule Of Held To Maturity Securities [Line Items] | ||
Fair market value | $ 738,305 | $ 1,118,691 |
Cash and cash equivalents | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Fair market value | 85,679 | 38,420 |
Short-term investments | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Fair market value | 440,866 | 885,994 |
Restricted cash and cash equivalents and investments | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Fair market value | 202,716 | $ 194,277 |
Long-term restricted funds | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Fair market value | $ 9,044 |
Investments - Schedule of Contr
Investments - Schedule of Contractual Maturities of Held-to-maturity Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Held-to-maturities, Carrying value | ||
Within 1 year | $ 738,305 | $ 1,118,691 |
Total | 738,305 | 1,118,691 |
Held-to-maturity securities, Estimated fair value | ||
Within 1 year | 738,305 | 1,118,691 |
Total | $ 738,305 | $ 1,118,691 |
Fair Value Measurements - Signi
Fair Value Measurements - Significant Financial Instruments Measured on a Recurring Basis as Categorized by the Fair Value Measurement Hierarchy (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Cash and cash equivalents | $ 131,661 | $ 71,593 | $ 138,074 | $ 246,705 |
Restricted cash and cash equivalents and investments | 252,200 | 252,950 | ||
Short-term investments | 440,866 | 885,994 | ||
Long-term restricted funds | 9,044 | |||
Recurring basis | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Cash and cash equivalents | 131,661 | 71,593 | ||
Restricted cash and cash equivalents and investments | 252,200 | 252,950 | ||
Short-term investments | 440,866 | 885,994 | ||
Long-term restricted funds | 9,044 | |||
Total | 833,771 | 1,210,537 | ||
Level 1 | Recurring basis | Carrying Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Cash and cash equivalents | 45,982 | 33,173 | ||
Restricted cash and cash equivalents and investments | 49,484 | 58,673 | ||
Total | 95,466 | 91,846 | ||
Level 1 | Recurring basis | Fair Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Cash and cash equivalents | 45,982 | 33,173 | ||
Restricted cash and cash equivalents and investments | 49,484 | 58,673 | ||
Total | 95,466 | 91,846 | ||
Level 2 | Recurring basis | Carrying Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Cash and cash equivalents | 85,679 | 38,420 | ||
Restricted cash and cash equivalents and investments | 202,716 | 194,277 | ||
Short-term investments | 440,866 | 885,994 | ||
Long-term restricted funds | 9,044 | |||
Total | 738,305 | 1,118,691 | ||
Level 2 | Recurring basis | Fair Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Cash and cash equivalents | 85,679 | 38,420 | ||
Restricted cash and cash equivalents and investments | 202,716 | 194,277 | ||
Short-term investments | 440,866 | 885,994 | ||
Long-term restricted funds | 9,044 | |||
Total | 738,305 | 1,118,691 | ||
Cash | Recurring basis | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Cash and cash equivalents | 22,918 | 33,173 | ||
Cash | Level 1 | Recurring basis | Carrying Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Cash and cash equivalents | 22,918 | 33,173 | ||
Cash | Level 1 | Recurring basis | Fair Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Cash and cash equivalents | 22,918 | 33,173 | ||
Money market funds | Recurring basis | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Cash and cash equivalents | 23,064 | |||
Restricted cash and cash equivalents and investments | 49,484 | 58,673 | ||
Money market funds | Level 1 | Recurring basis | Carrying Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Cash and cash equivalents | 23,064 | |||
Restricted cash and cash equivalents and investments | 49,484 | 58,673 | ||
Money market funds | Level 1 | Recurring basis | Fair Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Cash and cash equivalents | 23,064 | |||
Restricted cash and cash equivalents and investments | 49,484 | 58,673 | ||
Commercial paper | Recurring basis | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Cash and cash equivalents | 85,679 | 38,420 | ||
Restricted cash and cash equivalents and investments | 82,215 | 188,517 | ||
Short-term investments | 358,489 | 378,048 | ||
Commercial paper | Level 2 | Recurring basis | Carrying Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Cash and cash equivalents | 85,679 | 38,420 | ||
Restricted cash and cash equivalents and investments | 82,215 | 188,517 | ||
Short-term investments | 358,489 | 378,048 | ||
Commercial paper | Level 2 | Recurring basis | Fair Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Cash and cash equivalents | 85,679 | 38,420 | ||
Restricted cash and cash equivalents and investments | 82,215 | 188,517 | ||
Short-term investments | 358,489 | 378,048 | ||
Corporate securities | Recurring basis | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Restricted cash and cash equivalents and investments | 120,501 | 5,010 | ||
Short-term investments | 487,946 | |||
Corporate securities | Level 2 | Recurring basis | Carrying Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Restricted cash and cash equivalents and investments | 120,501 | 5,010 | ||
Short-term investments | 487,946 | |||
Corporate securities | Level 2 | Recurring basis | Fair Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Restricted cash and cash equivalents and investments | 120,501 | 5,010 | ||
Short-term investments | 487,946 | |||
Certificates of deposit | Recurring basis | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Restricted cash and cash equivalents and investments | 750 | |||
Short-term investments | 20,000 | |||
Certificates of deposit | Level 2 | Recurring basis | Carrying Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Restricted cash and cash equivalents and investments | 750 | |||
Short-term investments | 20,000 | |||
Certificates of deposit | Level 2 | Recurring basis | Fair Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Restricted cash and cash equivalents and investments | 750 | |||
Short-term investments | $ 20,000 | |||
U.S. Treasury securities | Recurring basis | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Short-term investments | 82,377 | |||
Long-term restricted funds | 9,044 | |||
U.S. Treasury securities | Level 2 | Recurring basis | Carrying Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Short-term investments | 82,377 | |||
Long-term restricted funds | 9,044 | |||
U.S. Treasury securities | Level 2 | Recurring basis | Fair Value | ||||
Significant financial instruments as categorized by the fair value measurement hierarchy | ||||
Short-term investments | 82,377 | |||
Long-term restricted funds | $ 9,044 |
Property, Plant, and Equipmen45
Property, Plant, and Equipment - Schedule of Property, Plant, and Equipment (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Property, Plant, and Equipment | ||
Well and development costs | $ 84,157 | $ 71,463 |
Less: accumulated depletion | (6,574) | 0 |
Total proved properties | 77,584 | 71,463 |
Oil and gas leasehold | 330,829 | 382,976 |
Less: accumulated valuation allowance | (169,217) | (175,963) |
Total oil and gas leasehold | 161,612 | 207,013 |
Total unproved properties | 923,941 | 822,271 |
Total oil and gas properties, net | 1,001,526 | 893,734 |
Other Property and Equipment | 12,281 | 8,849 |
Less: accumulated depreciation and amortization | (7,533) | (6,647) |
Total other property and equipment, net | 4,748 | 2,202 |
Total property, plant, and equipment, net | 1,006,274 | 895,936 |
Exploration wells in process | ||
Property, Plant, and Equipment | ||
Total unproved properties | $ 762,329 | 615,258 |
Computer equipment and software | ||
Property, Plant, and Equipment | ||
Estimated Useful Life | 3 years | |
Other Property and Equipment | $ 8,782 | 5,350 |
Office equipment and furniture | ||
Property, Plant, and Equipment | ||
Other Property and Equipment | $ 1,349 | 1,349 |
Office equipment and furniture | Minimum | ||
Property, Plant, and Equipment | ||
Estimated Useful Life | 3 years | |
Office equipment and furniture | Maximum | ||
Property, Plant, and Equipment | ||
Estimated Useful Life | 5 years | |
Leasehold improvements | ||
Property, Plant, and Equipment | ||
Other Property and Equipment | $ 2,150 | $ 2,150 |
Leasehold improvements | Minimum | ||
Property, Plant, and Equipment | ||
Estimated Useful Life | 3 years | |
Leasehold improvements | Maximum | ||
Property, Plant, and Equipment | ||
Estimated Useful Life | 10 years |
Property, Plant, and Equipmen46
Property, Plant, and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Mar. 31, 2015 | |
Property, Plant, and Equipment | ||||||
Depletion, depreciation and amortization | $ 4,290 | $ 367 | $ 7,459 | $ 779 | ||
Percentage of working interest acquired | 9.375% | |||||
Well and development costs | 84,157 | 84,157 | $ 71,463 | |||
Exploration well costs | ||||||
Property, Plant, and Equipment | ||||||
Well and development costs | 102,400 | 102,400 | 104,000 | |||
Development well costs | ||||||
Property, Plant, and Equipment | ||||||
Well and development costs | $ 219,900 | $ 219,900 | $ 221,200 |
Property, Plant, and Equipmen47
Property, Plant, and Equipment - Schedule of Unproved Property Acquisition Costs, Net of Valuation Allowance (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Unproved property acquisition costs, net of valuation allowance | ||
Individual oil and gas leaseholds with carrying value greater than $1 million | $ 255,203 | $ 305,270 |
Individual oil and gas leaseholds with carrying value less than $1 million | 75,626 | 77,706 |
Unproved property | 330,829 | 382,976 |
Accumulated valuation allowance | (169,217) | (175,963) |
Total oil and gas leasehold | $ 161,612 | $ 207,013 |
Property, Plant, and Equipmen48
Property, Plant, and Equipment - Schedule of Unproved Property Acquisition Costs, Net of Valuation Allowance (Parenthetical) (Details) $ in Millions | Jun. 30, 2016USD ($) |
Unproved property acquisition costs, net of valuation allowance | |
Upper limit of individual leasehold | $ 1 |
Lower limit of individual leasehold | $ 1 |
Property, Plant, and Equipmen49
Property, Plant, and Equipment - Schedule of Net Changes in Capitalized Exploration Well Costs (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Net changes in capitalized exploratory well costs (excluding any related leasehold costs) | ||
Beginning of period | $ 615,258 | $ 330,099 |
Amounts charged to expense | (111,619) | (24,120) |
End of period | 762,329 | 615,258 |
Exploration well costs | ||
Net changes in capitalized exploratory well costs (excluding any related leasehold costs) | ||
Beginning of period | 576,694 | |
Additions to capitalized exploration | 236,069 | 285,118 |
End of period | 701,144 | 576,694 |
Capitalized interest | ||
Net changes in capitalized exploratory well costs (excluding any related leasehold costs) | ||
Beginning of period | 38,564 | |
Additions to capitalized exploration | 22,621 | 24,161 |
End of period | $ 61,185 | $ 38,564 |
Property, Plant, and Equipmen50
Property, Plant, and Equipment - Schedule of Net Changes in Capitalized Exploration Well Costs (Parenthetical) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Net changes in capitalized exploratory well costs (excluding any related leasehold costs) | ||
Amounts charged to expense | $ 111,619 | $ 24,120 |
U.S. Gulf of Mexico | ||
Net changes in capitalized exploratory well costs (excluding any related leasehold costs) | ||
Amounts charged to expense | $ 111,600 | $ 24,100 |
Property, Plant, and Equipmen51
Property, Plant, and Equipment - Schedule of Cumulative Costs of Capitalized Exploration Well Costs (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Cumulative costs of capitalized exploratory well costs (excluding any related leasehold costs) | |||
Cumulative costs | $ 762,329 | $ 615,258 | $ 330,099 |
Well costs capitalized for a period greater than one year after completion of drilling | 362,187 | 351,753 | |
Exploration well costs | |||
Cumulative costs of capitalized exploratory well costs (excluding any related leasehold costs) | |||
Cumulative costs | 701,144 | 576,694 | |
Capitalized interest | |||
Cumulative costs of capitalized exploratory well costs (excluding any related leasehold costs) | |||
Cumulative costs | $ 61,185 | $ 38,564 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Other Assets [Abstract] | ||
Debt issue costs | $ 3,595 | |
Rig costs | $ 8,331 | 15,397 |
Other deposits | 500 | |
Other assets | $ 8,831 | $ 18,992 |
Other Assets - Schedule of Ot53
Other Assets - Schedule of Other Assets (Parenthetical) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Other Assets [Abstract] | ||
Debt issue cost | $ 0 | $ 3,600 |
Termination of borrowing base facility agreement | Jun. 17, 2016 | |
Rig costs | $ 8,331 | $ 15,397 |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Details) $ / shares in Units, item in Millions | May 13, 2014USD ($)item$ / shares | Dec. 17, 2012USD ($)item$ / shares | Jun. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)$ / shares | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Jun. 17, 2016USD ($) |
Debt instrument | |||||||||
Accrued for interest | $ 7,800,000 | $ 7,800,000 | $ 7,800,000 | ||||||
Interest expense, net of capitalized amount | $ 16,000,000 | $ 17,800,000 | $ 31,600,000 | $ 37,900,000 | |||||
Debt Issuance Costs Allocated to Liability Component | $ 233,600,000 | ||||||||
Notes | |||||||||
Debt instrument | |||||||||
Repurchase price as a percentage of principal amount of debt instrument | 100.00% | ||||||||
Specified minimum percentage of principal amount, the holders of which may declare all principal, accrued and unpaid interest to be due and payable immediately, upon the occurrence of an Event of Default | 25.00% | ||||||||
Percentage of principal amount, which may be declared by holders of a specified principal amount to be due and payable immediately upon occurrence of an Event of Default | 100.00% | ||||||||
2.625% convertible senior notes due 2019 | |||||||||
Debt instrument | |||||||||
Interest rate (as a percent) | 2.625% | 2.625% | 2.625% | 2.625% | 2.625% | 2.625% | |||
Aggregate principal amount of notes issued | $ 1,380,000,000 | ||||||||
Initial conversion rate of common stock | 28.023 | ||||||||
Initial conversion price per share of common stock (in dollars per share) | $ / shares | $ 35.68 | ||||||||
Number of underlying shares that the holder of the debt instrument would receive upon conversion | item | 38.7 | ||||||||
Effective interest rate used to amortize liability component of debt issue costs (as a percent) | 8.40% | ||||||||
Debt Issuance Costs Allocated to Liability Component | $ 217,500,000 | ||||||||
3.125% convertible senior notes due 2024 | |||||||||
Debt instrument | |||||||||
Interest rate (as a percent) | 3.125% | 3.125% | 3.125% | 3.125% | 3.125% | 3.125% | |||
Aggregate principal amount of notes issued | $ 1,300,000,000 | ||||||||
Initial conversion rate of common stock | 43.3604 | ||||||||
Initial conversion price per share of common stock (in dollars per share) | $ / shares | $ 23.06 | ||||||||
Number of underlying shares that the holder of the debt instrument would receive upon conversion | item | 56.4 | ||||||||
Number of days within 30 consecutive trading days in which the closing price of the entity's common stock must exceed the conversion price for the notes to be redeemable | 20 days | ||||||||
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for at least 20 days in order for the notes to be redeemable | 30 days | ||||||||
Minimum sale price of common stock to determine eligibility of conversion | $ / shares | $ 30 | ||||||||
Number of business days after any five consecutive trading day period during the note measurement period | 5 days | ||||||||
Number of consecutive trading days before five consecutive business days during the note measurement period | 5 days | ||||||||
Convertibility of debt, trading price of debt test, percentage of closing price of stock used in calculation | 98.00% | ||||||||
Effective interest rate used to amortize liability component of debt issue costs (as a percent) | 8.97% | ||||||||
Facility Agreement | GOM#1 | |||||||||
Debt instrument | |||||||||
Maximum borrowing capacity | $ 150,000,000 | ||||||||
Borrowings under facility | 0 | ||||||||
Prepayment fees payable | $ 0 | ||||||||
Write off of debt issuance cost | $ 3,300,000 |
Long-term Debt - Schedule of Th
Long-term Debt - Schedule of The Carrying Amounts of The Liability Components of The Notes (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Debt instrument | ||
Principal Amount | $ 2,680,000 | $ 2,680,000 |
Unamortized discount and debt issuance costs | (649,279) | (698,105) |
Carrying Amount | 2,030,721 | 1,981,895 |
2.625% Notes | ||
Debt instrument | ||
Principal Amount | 1,380,000 | 1,380,000 |
Unamortized discount and debt issuance costs | (229,048) | (258,565) |
Carrying Amount | 1,150,952 | 1,121,435 |
3.125% Notes | ||
Debt instrument | ||
Principal Amount | 1,300,000 | 1,300,000 |
Unamortized discount and debt issuance costs | (420,231) | (439,540) |
Carrying Amount | $ 879,769 | $ 860,460 |
Long-term Debt - Schedule of 56
Long-term Debt - Schedule of The Carrying Amounts of The Liability Components of The Notes (Parenthetical) (Details) | 6 Months Ended |
Jun. 30, 2016 | |
2.625% Notes | |
Debt instrument | |
Remaining term of debt | 3 years 6 months |
3.125% Notes | |
Debt instrument | |
Remaining term of debt | 8 years |
Long-term Debt -Schedule of Car
Long-term Debt -Schedule of Carrying Amounts of The Equity Components of The Notes (Details) - Notes - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Debt instrument | ||
Debt discount relating to value of conversion option | $ 866,340 | $ 866,340 |
Debt issue costs | (20,185) | (20,185) |
Total | $ 846,155 | $ 846,155 |
Long-term Debt - Schedule of 58
Long-term Debt - Schedule of The Fair Value of The Notes Excluding The Conversion Feature (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Notes | ||
Debt instrument | ||
Fair value of the notes excluding conversion feature | $ 935,976 | $ 1,433,750 |
2.625% Notes | ||
Debt instrument | ||
Fair value of the notes excluding conversion feature | 503,700 | 793,500 |
3.125% Notes | ||
Debt instrument | ||
Fair value of the notes excluding conversion feature | $ 432,276 | $ 640,250 |
Angola Transaction - Additional
Angola Transaction - Additional Information (Details) - USD ($) | Aug. 22, 2015 | Jun. 30, 2016 | Jul. 26, 2016 | Mar. 31, 2015 |
Angola Transaction | ||||
Percentage of working interest acquired | 9.375% | |||
Discontinued operations held for sale | Block 20, offshore Angola | CIE Angola Block 20 Ltd | ||||
Angola Transaction | ||||
Percentage of working interest acquired | 40.00% | |||
Discontinued operations held for sale | Block 21, offshore Angola | CIE Angola Block 21 Ltd | ||||
Angola Transaction | ||||
Percentage of working interest acquired | 40.00% | |||
Discontinued operations held for sale | Block 20 and Block 21 | First Payment | Subsequent Event | ||||
Angola Transaction | ||||
Consideration | $ 158,600,000 | |||
Discontinued operations held for sale | Block 20 and Block 21 | CIE Angola block 20 and block 21 | ||||
Angola Transaction | ||||
Consideration | $ 1,750,000,000 | |||
Withholding taxes for the gross consideration to be paid | 19,700,000 | |||
Discontinued operations held for sale | Block 20 and Block 21 | CIE Angola block 20 and block 21 | First Payment | ||||
Angola Transaction | ||||
Consideration | $ 250,000,000 | |||
Discontinued operations held for sale | Block 9, Block 20 And Block 21, Offshore Angola | ||||
Angola Transaction | ||||
Impairment | $ 0 | |||
Sonangol Pesquisa e Producao, S.A | Block 20, offshore Angola | CIE Angola Block 20 Ltd | ||||
Angola Transaction | ||||
Percentage of working interest acquired | 30.00% | |||
Sonangol Pesquisa e Producao, S.A | Block 21, offshore Angola | CIE Angola Block 21 Ltd | ||||
Angola Transaction | ||||
Percentage of working interest acquired | 60.00% |
Angola Transaction - Summary of
Angola Transaction - Summary of Assets and Liabilities and Operation Results Associated with Blocks 9, 20, and 21 Offshore Angola (Details) - Discontinued operations held for sale - Block 9, Block 20 And Block 21, Offshore Angola - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Angola Transaction | ||
Cash and cash equivalents | $ 43,527 | $ 8,578 |
Joint interest and other receivables | 159,542 | 156,599 |
Prepaid expenses and other current assets | 5,025 | 8,216 |
Inventory | 43,147 | 56,224 |
Short term restricted funds | 22,538 | |
Oil and gas properties | 1,611,828 | 1,465,299 |
Other property and equipment, net | 10,107 | 10,107 |
Long term restricted funds | 82,568 | |
Other assets | 338 | 922 |
Total assets of the discontinued operation | 1,873,514 | 1,811,051 |
Trade and other accounts payable | (20,528) | (6,089) |
Accrued liabilities | (81,415) | (128,259) |
Short term contractual obligations | (92,076) | (115,110) |
Long term contractual obligations | (2,688) | (1,381) |
Total liabilities of the discontinued operation | $ (196,707) | $ (250,839) |
Angola Transaction - Summary 61
Angola Transaction - Summary of Results for Blocks 9, 20, and 21 Offshore Angola Classified Within Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Angola Transaction | ||||
Loss from discontinued operations | $ 5,104 | $ 13,441 | $ 20,918 | $ 24,593 |
Discontinued operations held for sale | Block 9, Block 20 And Block 21, Offshore Angola | ||||
Angola Transaction | ||||
Seismic and exploration | 3,093 | 5,646 | 10,410 | 9,348 |
Dry hole expense and impairment | (1,677) | 611 | 1,874 | 611 |
General and administrative | 3,688 | 6,258 | 13,009 | 12,778 |
Depreciation and amortization | 926 | 1,856 | ||
Gain on the release of letters of credit | (4,375) | |||
Loss from discontinued operations | $ 5,104 | $ 13,441 | $ 20,918 | $ 24,593 |
Seismic and Exploration Expen62
Seismic and Exploration Expenses - Schedule of Seismic and Exploration Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Oil And Gas Exploration And Production Industries Disclosures [Abstract] | ||||
Seismic costs | $ 3,024 | $ 7,970 | $ 570 | $ 19,801 |
Leasehold delay rentals | 3,297 | 2,936 | 4,561 | 4,327 |
Other exploration expense | 14 | 361 | (50) | 1,206 |
Total seismic and exploration expenses | $ 6,335 | $ 11,267 | $ 5,081 | $ 25,334 |
Equity Based Compensation - Add
Equity Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 18, 2016 | Feb. 20, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Apr. 30, 2015 |
Equity Based Compensation | ||||||||
Equity based compensation | $ (4,900) | $ 7,100 | $ 2,826 | $ 12,981 | ||||
Common stock, shares issued | 410,054,961 | 410,054,961 | 408,740,182 | |||||
2015 Long Term Incentive Plan (the "2015 Plan") | ||||||||
Equity Based Compensation | ||||||||
Awards granted (in shares) | 1,851,372 | |||||||
Common Stock | 2015 Long Term Incentive Plan (the "2015 Plan") | ||||||||
Equity Based Compensation | ||||||||
Shares available for grant under the plan | 12,000,000 | |||||||
Restricted Stock | ||||||||
Equity Based Compensation | ||||||||
Granted (in shares) | 571,428 | |||||||
Restricted Stock | Two Senior Officers | ||||||||
Equity Based Compensation | ||||||||
Granted (in shares) | 571,428 | |||||||
Restricted Stock Units | ||||||||
Equity Based Compensation | ||||||||
Granted (in shares) | 3,491,352 | |||||||
Restricted Stock Units | 2015 Long Term Incentive Plan (the "2015 Plan") | ||||||||
Equity Based Compensation | ||||||||
Awards granted (in shares) | 3,491,352 | |||||||
Market price per share | $ 2.44 | |||||||
Grant date fair value of RSU's | $ 10,400 | |||||||
Stock compensation expense | $ 1,300 | 0 | $ 1,300 | 0 | ||||
Restricted Stock Units | 2015 Long Term Incentive Plan (the "2015 Plan") | Vesting Yearly Installment One | ||||||||
Equity Based Compensation | ||||||||
RSU's vesting date | Mar. 1, 2017 | |||||||
Restricted Stock Units | 2015 Long Term Incentive Plan (the "2015 Plan") | Vesting Yearly Installment Two | ||||||||
Equity Based Compensation | ||||||||
RSU's vesting date | Mar. 1, 2018 | |||||||
Restricted Stock Units | 2015 Long Term Incentive Plan (the "2015 Plan") | Vesting Yearly Installment Three | ||||||||
Equity Based Compensation | ||||||||
RSU's vesting date | Mar. 1, 2019 | |||||||
Restricted Stock Units | Non-employee Directors | ||||||||
Equity Based Compensation | ||||||||
Awards granted (in shares) | 362,934 | |||||||
Stock Options | ||||||||
Equity Based Compensation | ||||||||
Granted (in shares) | 1,129,944 | |||||||
Stock Options | Two Senior Officers | ||||||||
Equity Based Compensation | ||||||||
Granted (in shares) | 1,129,944 | |||||||
Retainer Awards | Non-employee Directors | Common Stock | ||||||||
Equity Based Compensation | ||||||||
Awards granted (in shares) | 82,898 | |||||||
Stock Appreciation Rights ("SARs") | Long Term Incentive Plan | ||||||||
Equity Based Compensation | ||||||||
Market price per share | $ 8.87 | |||||||
Stock compensation expense | $ 100 | $ 400 | $ 600 | $ 900 | ||||
Common stock, shares issued | 1,526,835 | |||||||
Vesting period | 3 years | |||||||
Fair value price per share | $ 4.53 | $ 2.74 | $ 2.74 | |||||
Reduction in aggregate fair value | $ (1,300) | |||||||
Stock Appreciation Rights ("SARs") | Long Term Incentive Plan | Vesting in one year | ||||||||
Equity Based Compensation | ||||||||
SARs vesting percentage | 0.33% | |||||||
Stock Appreciation Rights ("SARs") | Long Term Incentive Plan | Vesting in two years | ||||||||
Equity Based Compensation | ||||||||
SARs vesting percentage | 0.33% | |||||||
Stock Appreciation Rights ("SARs") | Long Term Incentive Plan | Vesting in three years | ||||||||
Equity Based Compensation | ||||||||
SARs vesting percentage | 0.33% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense | $ 0 | $ 0 | |
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 |
Other Matters - Additional Info
Other Matters - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2016 | Jun. 30, 2016 | |
Legal Proceedings Disclosure [Abstract] | ||
Severance costs associated with workforce reduction plan | $ 3 | $ 6.1 |