Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 02, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | Bonanza Creek Energy, Inc. | |
Entity Central Index Key | 1,509,589 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 49,621,879 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 218,599 | $ 21,341 |
Accounts receivable: | ||
Oil and gas sales | 23,391 | 25,322 |
Joint interest and other | 10,111 | 31,224 |
Prepaid expenses and other | 5,700 | 4,078 |
Inventory of oilfield equipment | 8,798 | 8,543 |
Derivative asset | 21,052 | 29,566 |
Total current assets | 287,651 | 120,074 |
Property and equipment (successful efforts method), at cost: | ||
Proved properties | 1,658,867 | 1,618,970 |
Less: accumulated depreciation, depletion and amortization | (967,941) | (943,081) |
Total proved properties, net | 690,926 | 675,889 |
Unproved properties | 178,948 | 185,530 |
Wells in progress | 27,058 | 51,196 |
Oil and gas properties and natural gas plant held for sale, net of accumulated depreciation, depletion and amortization of $646,917 and $636,917 in 2016 and 2015, respectively (note 3) | 209,421 | 214,922 |
Other property and equipment, net of accumulated depreciation of $9,976 in 2016 and $9,407 in 2015 | 9,044 | 9,729 |
Total property and equipment, net | 1,115,397 | 1,137,266 |
Other noncurrent assets | 17,799 | 16,027 |
Total assets | 1,420,847 | 1,273,367 |
Current liabilities: | ||
Accounts payable and accrued expenses (note 4) | 78,992 | 96,360 |
Oil and gas revenue distribution payable | 23,905 | 27,613 |
Contractual obligation for land acquisition | 12,000 | 12,000 |
Total current liabilities | 114,897 | 135,973 |
Long-term liabilities: | ||
Long-term debt (note 5) | 1,094,085 | 885,392 |
Ad valorem taxes | 20,789 | 17,069 |
Asset retirement obligations | 15,352 | 14,935 |
Asset retirement obligations for assets held for sale | 10,779 | 10,591 |
Total liabilities | $ 1,255,902 | $ 1,063,960 |
Commitments and contingencies (note 6) | ||
Stockholders’ equity: | ||
Preferred stock, $.001 par value, 25,000,000 shares authorized, none outstanding | $ 0 | $ 0 |
Common stock, $.001 par value, 225,000,000 shares authorized, 49,635,517 and 49,754,408 issued and outstanding in 2016 and 2015, respectively | 49 | 49 |
Additional paid-in capital | 809,161 | 806,386 |
Retained deficit | (644,265) | (597,028) |
Total stockholders’ equity | 164,945 | 209,407 |
Total liabilities and stockholders’ equity | $ 1,420,847 | $ 1,273,367 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Oil and gas properties held for sale, accumulated depreciation, depletion and amortization (in dollars) | $ 646,917 | $ 636,917 |
Other property and equipment, accumulated depreciation (in dollars) | $ 9,976 | $ 9,407 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 225,000,000 | 225,000,000 |
Common stock, shares issued | 49,635,517 | 49,574,408 |
Common stock, shares outstanding | 49,635,517 | 49,574,408 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating net revenues: | ||
Oil and gas sales | $ 44,174 | $ 73,076 |
Operating expenses: | ||
Lease operating expense | 13,298 | 16,973 |
Gas plant and midstream operating expense | 3,789 | 2,291 |
Severance and ad valorem taxes | 3,154 | 6,496 |
Exploration | 266 | 498 |
Depreciation, depletion and amortization | 26,379 | 59,004 |
Impairment of oil and gas properties | 10,000 | 0 |
Abandonment and impairment of unproved properties | 6,906 | 5,469 |
General and administrative (including $3,004 and $3,427, respectively, of stock-based compensation) | 17,685 | 16,872 |
Total operating expenses | 81,477 | 107,603 |
Loss from operations | (37,303) | (34,527) |
Other income (expense): | ||
Derivative gain (loss) | (1,007) | 18,856 |
Interest expense | (14,547) | (14,238) |
Gain on termination fee (note 3) | 6,000 | 0 |
Other loss | (380) | (49) |
Total other income (expense) | (9,934) | 4,569 |
Loss from operations before taxes | (47,237) | (29,958) |
Income tax benefit | 0 | 11,537 |
Net loss | (47,237) | (18,421) |
Comprehensive loss | $ (47,237) | $ (18,421) |
Basic loss per share: | ||
Basic net income (loss) per common share (in dollars per share) | $ (0.96) | $ (0.41) |
Diluted income (loss) per share: | ||
Diluted net income (loss) per common share (in dollars per share) | $ (0.96) | $ (0.41) |
Basic weighted-average common shares outstanding | 49,131 | 44,520 |
Diluted weighted-average common shares outstanding | 49,131 | 44,520 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
General and administrative, stock compensation | $ 3,004 | $ 3,427 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (47,237) | $ (18,421) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation, depletion and amortization | 26,379 | 59,004 |
Deferred income benefit | 0 | (11,537) |
Impairment of oil and gas properties | 10,000 | 0 |
Abandonment and impairment of unproved properties | 6,906 | 5,469 |
Dry hole expense | 232 | 0 |
Stock-based compensation | 3,004 | 3,427 |
Amortization of deferred financing costs and debt premium | 608 | 523 |
Accretion of contractual obligation for land acquisition | 0 | 349 |
Derivative (gain) loss | 1,007 | (18,856) |
Derivative cash settlements | 7,508 | 35,466 |
Other | (116) | (27) |
Changes in current assets and liabilities: | ||
Accounts receivable | 23,044 | 16,298 |
Prepaid expenses and other assets | (1,622) | (1,873) |
Accounts payable and accrued liabilities | (3,141) | (1,981) |
Settlement of asset retirement obligations | (41) | (285) |
Net cash provided by operating activities | 26,531 | 67,556 |
Cash flows from investing activities: | ||
Acquisition of oil and gas properties | (532) | (11,382) |
Exploration and development of oil and gas properties | (34,822) | (154,300) |
Natural gas plant capital expenditures | (50) | (112) |
Increase in restricted cash | (2,533) | 0 |
Additions to property and equipment - non oil and gas | 47 | (1,490) |
Net cash used in investing activities | (37,890) | (167,284) |
Cash flows from financing activities: | ||
Proceeds from credit facility | 209,000 | 44,000 |
Payments to credit facility | 0 | (77,000) |
Proceeds from sale of common stock | 0 | 209,300 |
Offering costs related to sale of common stock | 0 | (6,492) |
Offering costs related to sale of Senior Notes | 0 | (19) |
Payment of employee tax withholdings in exchange for the return of common stock | (229) | (2,127) |
Deferred financing costs | (154) | (4) |
Net cash provided by financing activities | 208,617 | 167,658 |
Net change in cash and cash equivalents | 197,258 | 67,930 |
Cash and cash equivalents: | ||
Beginning of period | 21,341 | 2,584 |
End of period | 218,599 | 70,514 |
Supplemental cash flow disclosure: | ||
Cash paid for interest | 9,500 | 9,894 |
Cash paid for income taxes | 0 | 820 |
Changes in working capital related to drilling expenditures, natural gas plant expenditures, and property acquisition | $ (14,214) | $ (30,880) |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS | ORGANIZATION AND BUSINESS Bonanza Creek Energy, Inc. (“BCEI” or, together with our consolidated subsidiaries, the “Company”) is engaged primarily in acquiring, developing, exploiting and producing oil and gas properties. The Company's oil and liquids-weighted assets are concentrated primarily in the Wattenberg Field in Colorado and in the Dorcheat Macedonia Field in southern Arkansas. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION These statements have been prepared in accordance with the Securities and Exchange Commission and accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information with the condensed consolidated balance sheets (“balance sheets”) and the condensed consolidated statements of cash flows (“statements of cash flows”) as of December 31, 2015 , being derived from audited financial statements. The quarterly financial statements included herein do not necessarily include all of the disclosures as may be required under generally accepted accounting principles for complete financial statements. There has been no material change in the information disclosed in the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “ 2015 Form 10-K”), except as disclosed herein. These consolidated financial statements include all of the adjustments, which, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations. All such adjustments are of a normal recurring nature only. The results of operations for the quarter are not necessarily indicative of the results to be expected for the full fiscal year. The Company evaluated events subsequent to the balance sheet date of March 31, 2016 , and through the filing date of this report. Certain prior period amounts are reclassified to conform to the current period presentation, when necessary. Principles of Consolidation The balance sheets include the accounts of the Company and its wholly owned subsidiaries, Bonanza Creek Energy Operating Company, LLC, Bonanza Creek Energy Resources, LLC, Bonanza Creek Energy Upstream LLC, Bonanza Creek Energy Midstream, LLC, Holmes Eastern Company, LLC and Rocky Mountain Infrastructure, LLC. All significant intercompany accounts and transactions have been eliminated. Rocky Mountain Infrastructure, LLC During the first quarter of 2015, the Company’s wholly owned subsidiary, Bonanza Creek Energy Operating Company, LLC, formed a wholly owned subsidiary, Rocky Mountain Infrastructure, LLC (“RMI”), to hold gathering systems, central production facilities and related infrastructure that service the Wattenberg Field. Significant Accounting Policies The significant accounting policies followed by the Company were set forth in Note 1 to the 2015 Form 10-K and are supplemented by the notes throughout this report. These unaudited condensed consolidated financial statements should be read in conjunction with the 2015 Form 10-K. Recently Issued Accounting Standards In January 2016, the FASB issued Update No. 2016-01 – Financial Instruments - Overall to require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. This authoritative guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company is currently evaluating the provisions of this guidance and assessing its impact, but does not currently believe it will have a material effect on the Company’s financial statements or disclosures. In February 2016, the FASB issued Update No. 2016-02 – Leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This authoritative guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The Company is currently evaluating the provisions of this guidance and assessing its impact in relation to the Company's leases. In March 2016, the FASB issued Update No. 2016-08 – Revenue from Contracts with Customers , which clarifies the implementation guidance on principal versus agent considerations. This authoritative accounting guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company has started going through its contracts and is assessing their impact, but does not currently believe this guidance will have a material effect on the Company's financial statements or disclosures. In March 2016, the FASB issued Update No. 2016-09 – Compensation - Stock Compensation . The update simplifies 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. This authoritative guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. The Company is currently evaluating the provisions of this guidance and assessing its impact, but does not currently believe it will have a material effect on the Company’s financial statements or disclosures. |
ASSETS HELD FOR SALE
ASSETS HELD FOR SALE | 3 Months Ended |
Mar. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
ASSETS HELD FOR SALE | ASSETS HELD FOR SALE Assets are classified as held for sale when the Company commits to a plan to sell the assets and there is reasonable certainty that the sale will take place within one year. Upon classification as held for sale, long-lived assets are no longer depreciated or depleted, and a measurement for impairment is performed to identify and expense any excess of carrying value over fair value less estimated costs to sell. Any subsequent decreases to the estimated fair value less the costs to sell impact the measurement of assets held for sale. As of March 31, 2016 , the accompanying balance sheets present $209.4 million of assets held for sale, net of accumulated depreciation, depletion and amortization, which consist of the Company’s ownership interests in RMI, all assets within the Company's Mid-Continent region and all assets in the North Park Basin. There is a corresponding asset retirement obligation liability of approximately $10.8 million for assets held for sale recorded in the asset retirement obligations for assets held for sale financial statement line item in the accompanying balance sheets. There were no other material assets or liabilities associated with the assets held for sale. During the three months ended March 31, 2016, the Company recorded write-downs to fair value less estimated costs to sell of $10.0 million for its Mid-Continent assets. These write-downs are recorded in the impairment of oil and gas properties line item in the accompanying statements of operations. The Company also received $6.0 million upon termination of the purchase and sale agreement of its RMI interest which is shown in the gain on termination fee line item in the accompanying statements of operations. The Company determined that none of these potential asset sales qualify for discontinued operations accounting as they did not result in a strategic shift of the Company. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses contain the following: As of March 31, As of December 31, 2016 2015 (in thousands) Drilling and completion costs $ 18,245 $ 32,459 Accounts payable trade 484 1,085 Accrued general and administrative cost 4,719 10,643 Lease operating expense 4,336 4,731 Accrued reclamation cost 162 162 Accrued interest 18,669 14,231 Production and ad valorem taxes and other 32,377 33,049 Total accounts payable and accrued expenses $ 78,992 $ 96,360 |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consisted of the following: As of March 31, As of December 31, 2016 2015 (in thousands) Revolving credit facility $ 288,000 $ 79,000 6.75% Senior Notes due 2021 500,000 500,000 Unamortized premium on 6.75% Senior Notes 6,085 6,392 5.75% Senior Notes due 2023 300,000 300,000 Total long-term debt $ 1,094,085 $ 885,392 Credit Facility The Company’s senior secured revolving Credit Agreement, dated March 29, 2011, as amended (the “revolving credit facility”), provides for borrowings up to $1.0 billion . As of March 31, 2016 , and through the filing date of this report, the borrowing base under the revolving credit facility was $475.0 million and equal to the commitment level under the Credit Agreement. The borrowing base is redetermined semiannually, generally occurring no later than May 15 and November 15; we currently expect our next redetermination to occur by May 30, 2016. The revolving credit facility is collateralized by substantially all of the Company’s assets and matures on September 15, 2017. As of March 31, 2016 , the Company had $288.0 million outstanding under the revolving credit facility, an outstanding letter of credit of $12.0 million and no available borrowing capacity due to limitations on the incurrence of additional debt set by the indentures for our Senior Notes. As of December 31, 2015 , the Company had $79.0 million outstanding under the revolving credit facility with an available borrowing capacity of $384.0 million , if the Company elected to take advantage of the entire borrowing base, after reduction for the outstanding letter of credit of $12.0 million . The revolving credit facility restricts, among other items, certain dividend payments, additional indebtedness, asset sales, loans, investments and mergers. The revolving credit facility also contains certain financial covenants, which require the maintenance of certain financial and leverage ratios, as defined by the revolving credit facility. The revolving credit facility contains a ratio of maximum senior secured debt to trailing twelve-month EBITDAX that must not exceed 2.50 to 1.00 and a minimum interest coverage ratio that must exceed 2.50 to 1.00. The maximum senior secured debt ratio is calculated by dividing borrowings under the revolving credit facility, balances drawn under letters of credit, and any outstanding second lien debt divided by trailing twelve-month EBITDAX (defined as earnings before interest expense, income tax expense, depreciation, depletion and amortization expense, and exploration expense and other non-cash charges). The minimum interest coverage ratio is calculated by dividing trailing twelve-month EBITDAX by trailing twelve-month interest expense. The revolving credit facility also contains a minimum current ratio covenant of 1.00 to 1.00. The Company was in compliance with all financial and non-financial covenants as of March 31, 2016 , and through the filing date of this report. Senior Unsecured Notes The $500.0 million aggregate principal amount of 6.75% Senior Notes that mature on April 15, 2021 (“ 6.75% Senior Notes”) and the $300.0 million aggregate principal amount of 5.75% Senior Notes that mature on February 1, 2023 (“ 5.75% Senior Notes” and, together with the 6.75% Senior Notes, the “Senior Notes”) are unsecured senior obligations and rank equal in right of payment with all of the Company’s existing and future unsecured senior debt, and are senior in right of payment to any future subordinated debt. The Senior Notes are jointly and severally guaranteed on a senior unsecured basis by our existing and future domestic subsidiaries that guarantee or are borrowers under our revolving credit facility. The Company is subject to certain covenants under the respective indentures governing the Senior Notes that limit the Company’s ability to incur additional indebtedness, issue preferred stock, and make restricted payments, including certain dividends. The incurrence by the Company or any of the Guarantors of additional indebtedness and letters of credit under the revolving credit facility in an aggregate principal amount at any one time outstanding is not to exceed the greater of (a) $300.0 million or (b) 35% of the Company's Adjusted Consolidated Net Tangible Assets (“ACNTA”). ACNTA is defined as the Company's PV-10 value plus capitalized costs for unproved properties plus consolidated net working capital and other tangible assets. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company is involved in various commercial and regulatory claims, litigation and other legal proceedings that arise in the ordinary course of its business. The Company assesses these claims in an effort to determine the degree of probability and range of possible loss for potential accrual in its condensed consolidated financial statements. In accordance with accounting authoritative guidance, an accrual is recorded for a loss contingency when its occurrence is probable and damages can be reasonably estimated based on the most likely anticipated outcome or the minimum amount within a range of possible outcomes. Because legal proceedings are inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments about uncertain future events. When evaluating contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. The Company regularly reviews contingencies to determine the adequacy of its accruals and related disclosures. No claims have been made, nor is the Company aware of any material uninsured liability which the Company may have, as it relates to any environmental cleanup, restoration or the violation of any rules or regulations. As of the filing date of this report, there were no material pending or overtly threatened legal actions against the Company of which it is aware. Commitments There have been no material changes from the commitments disclosed in the notes to the Company’s consolidated financial statements included in the 2015 Form 10-K. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Restricted Stock under the Long Term Incentive Plan The Company grants shares of restricted stock to directors, eligible employees and officers under its Long Term Incentive Plan, as amended and restated (“LTIP”). Each share of restricted stock represents one share of the Company’s common stock to be released from restriction upon completion of the vesting period. The awards typically vest in one-third increments over three years. Each share of restricted stock is entitled to a non-forfeitable dividend, if the Company were to declare one, and has the same voting rights as a share of the Company’s common stock. Shares of restricted stock are valued at the closing price of the Company’s common stock on the grant date and are recognized as general and administrative expense over the vesting period of the award. Total expense recorded for restricted stock for the three month periods ended March 31, 2016 and 2015 was $2.3 million and $2.9 million , respectively. As of March 31, 2016 , unrecognized compensation cost was $10.5 million and will be amortized through 2018 . A summary of the status and activity of non-vested restricted stock for the three months ended March 31, 2016 is presented below. Restricted Stock Weighted- Average Grant-Date Fair Value Non-vested at beginning of year 731,818 $ 29.47 Granted — $ — Vested (248,447 ) $ 33.57 Forfeited (51,070 ) $ 21.81 Non-vested at end of quarter 432,301 $ 28.02 Performance Stock Units under the Long Term Incentive Plan The Company grants performance stock units (“PSUs”) to certain officers under its LTIP. The number of shares of the Company’s common stock that may be issued to settle PSUs ranges from zero to two times the number of PSUs awarded. PSUs are determined at the end of each annual measurement period over the course of the three -year performance cycle in an amount up to two-thirds of the target number of PSUs that are eligible for vesting (such that an amount equal to 200% of the target number of PSUs may be earned during the performance cycle) although no stock is actually awarded to the participant until the end of the entire three-year performance cycle. Any PSUs that have not vested at the end of the applicable measurement period are forfeited. The performance criterion for the PSUs is based on a comparison of the Company’s total shareholder return (“TSR”) for the measurement period compared with the TSRs of a group of peer companies for the same measurement period. The TSR for the Company and each of the peer companies is determined by dividing (A)(i) the average share price for the last 30 trading days of the applicable measuring period, minus (ii) the average share price for the 30 trading days immediately preceding the beginning of the applicable measuring period, by (B) the average share price for the 30 trading days immediately preceding the beginning of the applicable measuring period. The number of earned shares of our common stock will be calculated based on which quartile our TSR percentage ranks as of the end of the annual measurement period relative to the other companies in the comparator group. The fair value of each PSU is estimated at the date of grant using a Monte Carlo simulation, which results in an expected percentage of PSUs to be earned during the performance period. Compensation expense associated with PSUs is recognized as general and administrative expense over the measurement period. Total expense recorded for PSUs for the three months ended March 31, 2016 and 2015 was $0.7 million and $0.5 million , respectively. As of March 31, 2016 , there was $4.1 million of total unrecognized compensation expense related to unvested PSUs to be amortized through 2019 . A summary of the status and activity of PSUs for the three months ended March 31, 2016 is presented below: PSU Weighted-Average Grant-Date Fair Value Non-vested at beginning of year (1) 114,833 $ 35.27 Granted (1) — $ — Vested (1) — $ — Forfeited (1) — $ — Non-vested at end of quarter (1) 114,833 $ 35.27 ____________________________ (1) The number of awards assumes that the associated performance condition is met at the target amount. The final number of shares of the Company’s common stock issued may vary depending on the performance multiplier, which ranges from zero to two , depending on the level of satisfaction of the performance condition. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company follows fair value measurement authoritative guidance, which defines fair value, establishes a framework for using fair value to measure assets and liabilities, and expands disclosures about fair value measurements. The authoritative accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The statement establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: Level 1: Quoted prices are available in active markets for identical assets or liabilities Level 2: Quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations whose inputs are observable or whose significant value drivers are observable Level 3: Significant inputs to the valuation model are unobservable Financial and non-financial assets and liabilities are to be classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following tables present the Company’s financial and non-financial assets and liabilities that were accounted for at fair value as of March 31, 2016 and December 31, 2015 and their classification within the fair value hierarchy: As of March 31, 2016 Level 1 Level 2 Level 3 (in thousands) Derivative assets (1) $ — $ 21,052 $ — Proved properties (2) $ — $ — $ 100,000 Unproved properties (2) $ — $ — $ 178,947 As of December 31, 2015 Level 1 Level 2 Level 3 (in thousands) Derivative assets (1) $ — $ 29,566 $ — Proved properties (2) $ — $ — $ 811,913 Unproved properties (2) $ — $ — $ 185,530 Asset retirement obligations (3) $ — $ — $ 2,027 ____________________________ (1) This represents a financial asset or liability that is measured at fair value on a recurring basis. (2) This represents non-financial assets that are measured at fair value on a nonrecurring basis due to impairments. This is the fair value of the asset base that was subjected to impairment and does not reflect the entire asset balance as presented on the accompanying balance sheets. Please refer to the Proved Oil and Gas Properties and Unproved Oil and Gas Properties sections below for additional discussion. (3) This represents the revision to estimates of the asset retirement obligation, which is a non-financial liability that is measured at fair value on a nonrecurring basis. Please refer to the Asset Retirement Obligation section below for additional discussion. Derivatives Fair value of all derivative instruments are estimated with industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value of money, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. All valuations were compared against counterparty statements to verify the reasonableness of the estimate. The Company’s commodity swaps are validated by observable transactions for the same or similar commodity options using the NYMEX futures index, and are designated as Level 2 within the valuation hierarchy. Presently, all of our derivative arrangements are concentrated with three counterparties, all of which are lenders under the Company’s revolving credit facility. Proved Oil and Gas Properties Proved oil and gas property costs are evaluated for impairment and reduced to fair value when there is an indication that the carrying costs exceed the sum of the undiscounted cash flows. The Company uses Level 3 inputs and the income valuation technique, which converts future amounts to a single present value amount, to measure the fair value of proved properties through an application of risk-adjusted discount rates and price forecasts selected by the Company’s management. The calculation of the risk-adjusted discount rate is a significant management estimate based on the best information available. Management believes that the risk-adjusted discount rate is representative of current market conditions and reflects the following factors: estimates of future cash payments, expectations of possible variations in the amount and/or timing of cash flows, the risk premium, and nonperformance risk. The price forecast is based on the NYMEX strip pricing, adjusted for basis differentials. Future operating costs are also adjusted as deemed appropriate for these estimates. Proved properties classified as held for sale are valued using a market approach, based on an estimated selling price, as evidenced by the most current bid prices received from third parties. If a relevant estimated selling price is not available, the Company utilizes the income valuation technique discussed above. The Company impaired the Mid-Continent region which had a carrying value of $110.0 million to its estimated fair value, based on the latest received bid, of $100.0 million and recognized an impairment of $10.0 million for the three months ended March 31, 2016 . No impairment was recognized for the Rocky Mountain region for the three months ended March 31, 2016 . The Company impaired the Mid-Continent region which had a carrying value of $431.2 million to its fair value of $110.0 million and recognized an impairment of $321.2 million for the year ended December 31, 2015 . The Company impaired the Rocky Mountain region which had a carrying value of $1.1 billion to its fair value of $701.9 million and recognized an impairment of $419.3 million for the year ended December 31, 2015 . Unproved Oil and Gas Properties Unproved oil and gas property costs are evaluated for impairment and reduced to fair value when there is an indication that the carrying costs may not be fully recoverable. To measure the fair value of unproved properties, the Company uses Level 3 inputs and the income valuation technique, which takes into account the following significant assumptions: future development plans, risk weighted potential resource recovery, remaining lease life and estimated reserve values. Unproved properties classified as held for sale are valued using a market approach, based on an estimated selling price, as evidenced by the most current bid prices received from third parties. If a relevant estimated selling price is not available, the Company uses the price received for similar acreage in recent transactions by the Company or other market participants in the principal market. The Company impaired non-core acreage in the Wattenberg Field due to leases expiring which had a carrying value of $185.8 million to their fair value of $178.9 million and recognized an impairment of unproved properties of $6.9 million for the three months ended March 31, 2016 . The Company impaired non-core acreage in the Wattenberg Field due to leases expiring, which had a carrying value of $210.3 million to their fair value of $185.5 million and recognized an impairment of unproved properties for the year ended December 31, 2015 of $24.8 million . The Company also fully impaired the North Park Basin in 2015, due to a change in the Company’s development plan, recognizing an impairment of unproved properties of $8.7 million . Asset Retirement Obligation The Company utilizes the income valuation technique to determine the fair value of the asset retirement obligation liability at the point of inception by applying a credit-adjusted risk-free rate, which takes into account the Company’s credit risk, the time value of money, and the current economic state, to the undiscounted expected abandonment cash flows. Upon completion of wells and natural gas plants, the Company records an asset retirement obligation at fair value using Level 3 assumptions. Given the unobservable nature of the inputs, the initial measurement of the asset retirement obligation liability is deemed to use Level 3 inputs. There were no asset retirement obligations measured at fair value as of March 31, 2016 . The Company had $2.0 million of asset retirement obligations recorded at fair value as of December 31, 2015 . Long-term Debt As of March 31, 2016 , the Company had $500.0 million of outstanding 6.75% Senior Notes and $300.0 million of outstanding 5.75% Senior Notes, all of which are unsecured senior obligations. The 6.75% Senior Notes are recorded at cost, plus the unamortized premium, on the accompanying balance sheets at $506.1 million and $506.4 million as of March 31, 2016 and December 31, 2015 , respectively. The fair value of the 6.75% Senior Notes as of March 31, 2016 and December 31, 2015 was $141.3 million and $301.3 million , respectively. The 5.75% Senior Notes are recorded at cost on the accompanying balance sheets at $300.0 million as of March 31, 2016 and December 31, 2015 . The fair value of the 5.75% Senior Notes as of March 31, 2016 and December 31, 2015 was $81.8 million and $163.1 million , respectively. The Senior Notes are measured using Level 1 inputs based on a secondary market trading price. The Company’s revolving credit facility approximates fair value as the applicable interest rates are floating. The outstanding balance under the revolving credit facility as of March 31, 2016 and December 31, 2015 was $288.0 million and $79.0 million , respectively. |
DERIVATIVES
DERIVATIVES | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES The Company enters into commodity derivative contracts to mitigate a portion of its exposure to potentially adverse market changes in commodity prices and the associated impact on cash flows. All contracts are entered into for other-than-trading purposes. The Company’s derivatives include oil swap arrangements and puts, none of which qualify as having hedging relationships. Effective March 10, 2016, the Company converted its three-way collars into fixed price swaps and puts. As of March 31, 2016 , and as of the filing date of this report, the Company had the following derivative commodity contracts in place: Settlement Period Derivative Instrument Total Volumes (Bbls per day) Average Fixed Price Fair Market Value of Assets (in thousands) Oil 2Q 2016 Swap 3,103 $49.87 $ 2,815 3Q 2016 Swap 2,704 $51.78 2,434 4Q 2016 Swap 2,303 $52.83 2,062 2Q 2016 Put 5,430 $51.01 5,548 3Q 2016 Put 4,733 $51.01 4,409 4Q 2016 Put 4,031 $51.01 3,784 Total $ 21,052 Derivative Assets Fair Value The Company’s commodity derivatives are measured at fair value and are included in the accompanying balance sheets as derivative assets. The following table contains a summary of all the Company’s derivative positions reported on the accompanying balance sheets as of March 31, 2016 and December 31, 2015 : As of March 31, 2016 Balance Sheet Location Fair Value (in thousands) Derivative Assets: Commodity contracts Current assets $ 21,052 Commodity contracts Noncurrent assets — Derivative Liabilities: Commodity contracts Current liabilities — Commodity contracts Long-term liabilities — Total derivative asset $ 21,052 As of December 31, 2015 Balance Sheet Location Fair Value (in thousands) Derivative Assets: Commodity contracts Current assets $ 29,566 Commodity contracts Noncurrent assets — Derivative Liabilities: Commodity contracts Current liabilities — Commodity contracts Long-term liabilities — Total derivative asset $ 29,566 The following table summarizes the components of the derivative gain (loss) presented on the accompanying statements of operations: Three months ended March 31, 2016 2015 (in thousands) Derivative cash settlement gain: Oil contracts $ 7,508 $ 34,791 Gas contracts — 675 Total derivative cash settlement gain (1) $ 7,508 $ 35,466 Change in fair value loss $ (8,515 ) $ (16,610 ) Total derivative gain (loss) (1) $ (1,007 ) $ 18,856 _______________________________ (1) Total derivative gain (loss) and the derivative cash settlement gain for the three months ended March 31, 2016 and 2015 is reported in the derivative (gain) loss line item and derivative cash settlements line item on the accompanying statements of cash flows within the net cash provided by operating activities. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The Company issues shares of restricted stock entitling the holders to receive non-forfeitable dividends, if and when, the Company was to declare a dividend, before vesting, thus making the awards participating securities. The awards are included in the calculation of earnings per share under the two-class method. The two-class method allocates earnings for the period between common shareholders and unvested participating shareholders and losses to common shareholders only. The Company issues PSUs, which represent the right to receive, upon settlement of the PSUs, a number of shares of the Company’s common stock that range from zero to two times the number of PSUs granted on the award date. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, that would be issuable at the end of the respective reporting period, assuming that date was the end of the measurement period applicable to such PSUs. Please refer to Note 7- Stock-Based Compensation for additional discussion. The following table sets forth the calculation of loss per basic and diluted shares for the three month periods ended March 31, 2016 and 2015 . Three Months Ended March 31, 2016 2015 (in thousands, except per share amounts) Net loss $ (47,237 ) $ (18,421 ) Less: undistributed loss to unvested restricted stock — — Undistributed loss to common shareholders (47,237 ) (18,421 ) Basic net loss per common share $ (0.96 ) $ (0.41 ) Diluted net loss per common share $ (0.96 ) $ (0.41 ) Weighted-average shares outstanding - basic 49,131 44,520 Add: dilutive effect of contingent PSUs — — Weighted-average shares outstanding - diluted 49,131 44,520 The Company was in a net loss position for the three months ended March 31, 2016 and 2015 , which made any potentially dilutive shares anti-dilutive. There were no dilutive shares for the three months ended March 31, 2016 and 147,786 dilutive shares that were anti-dilutive for the three months ended March 31, 2015. The participating shareholders are not contractually obligated to share in the losses of the Company, and therefore, the entire net loss is allocated to the outstanding common shareholders. |
CAPITAL STOCK
CAPITAL STOCK | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
CAPITAL STOCK | CAPITAL STOCK On February 6, 2015, the Company completed a public offering of 8,050,000 shares of its common stock generating net proceeds of $202.7 million after deducting underwriter discounts, commissions and offering expenses of approximately $6.6 million . The Company used a portion of the net proceeds to repay all of the then outstanding borrowings under its revolving credit facility and for general corporate purposes, including its drilling and development program and other capital expenditures. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company uses the asset and liability method of accounting for deferred income taxes. Deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities. Deferred tax assets or liabilities at the end of each period are determined using the tax rate in effect at that time. During the three month periods ended March 31, 2016 and 2015 , the effective tax rate was 0.0% and 38.5% , respectively. As of December 31, 2015 a full valuation allowance was placed against the net deferred tax assets. The Company’s current rate differs from the U.S. statutory income tax rate due to the full valuation allowance being placed against the net deferred tax assets as of March 31, 2016. The deferred income tax liability for an oil and gas exploration company is dependent on many variables such as estimating the economic lives of depleting oil and gas reserves and commodity prices. Accordingly, the liability is subject to continual recalculation, revision of the numerous estimates required, and may change significantly in the event of such things as major acquisitions, divestitures, product price changes, changes in reserve estimates, changes in reserve lives, and changes in tax rates or tax laws. As of March 31, 2016 , the Company had no unrecognized tax benefits. The Company’s management does not believe that there are any new items or changes in facts or judgments that should impact the Company's tax position taken thus far in 2016 . Given the substantial net operating loss carry forward at the federal level, neither significant interest expense nor penalties charged for any examining agents’ tax adjustments of income tax returns are anticipated, and any such adjustments would very likely adjust only net operating loss carry forward. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The balance sheets include the accounts of the Company and its wholly owned subsidiaries, Bonanza Creek Energy Operating Company, LLC, Bonanza Creek Energy Resources, LLC, Bonanza Creek Energy Upstream LLC, Bonanza Creek Energy Midstream, LLC, Holmes Eastern Company, LLC and Rocky Mountain Infrastructure, LLC. All significant intercompany accounts and transactions have been eliminated. |
Significant Accounting Policies | Significant Accounting Policies The significant accounting policies followed by the Company were set forth in Note 1 to the 2015 Form 10-K and are supplemented by the notes throughout this report. These unaudited condensed consolidated financial statements should be read in conjunction with the 2015 Form 10-K. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In January 2016, the FASB issued Update No. 2016-01 – Financial Instruments - Overall to require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. This authoritative guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company is currently evaluating the provisions of this guidance and assessing its impact, but does not currently believe it will have a material effect on the Company’s financial statements or disclosures. In February 2016, the FASB issued Update No. 2016-02 – Leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This authoritative guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The Company is currently evaluating the provisions of this guidance and assessing its impact in relation to the Company's leases. In March 2016, the FASB issued Update No. 2016-08 – Revenue from Contracts with Customers , which clarifies the implementation guidance on principal versus agent considerations. This authoritative accounting guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company has started going through its contracts and is assessing their impact, but does not currently believe this guidance will have a material effect on the Company's financial statements or disclosures. In March 2016, the FASB issued Update No. 2016-09 – Compensation - Stock Compensation . The update simplifies 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. This authoritative guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. The Company is currently evaluating the provisions of this guidance and assessing its impact, but does not currently believe it will have a material effect on the Company’s financial statements or disclosures. |
ACCOUNTS PAYABLE AND ACCRUED 20
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses contain the following: As of March 31, As of December 31, 2016 2015 (in thousands) Drilling and completion costs $ 18,245 $ 32,459 Accounts payable trade 484 1,085 Accrued general and administrative cost 4,719 10,643 Lease operating expense 4,336 4,731 Accrued reclamation cost 162 162 Accrued interest 18,669 14,231 Production and ad valorem taxes and other 32,377 33,049 Total accounts payable and accrued expenses $ 78,992 $ 96,360 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following: As of March 31, As of December 31, 2016 2015 (in thousands) Revolving credit facility $ 288,000 $ 79,000 6.75% Senior Notes due 2021 500,000 500,000 Unamortized premium on 6.75% Senior Notes 6,085 6,392 5.75% Senior Notes due 2023 300,000 300,000 Total long-term debt $ 1,094,085 $ 885,392 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of the status and activity of non-vested restricted stock | A summary of the status and activity of non-vested restricted stock for the three months ended March 31, 2016 is presented below. Restricted Stock Weighted- Average Grant-Date Fair Value Non-vested at beginning of year 731,818 $ 29.47 Granted — $ — Vested (248,447 ) $ 33.57 Forfeited (51,070 ) $ 21.81 Non-vested at end of quarter 432,301 $ 28.02 |
Summary of the status and activity of PSUs | A summary of the status and activity of PSUs for the three months ended March 31, 2016 is presented below: PSU Weighted-Average Grant-Date Fair Value Non-vested at beginning of year (1) 114,833 $ 35.27 Granted (1) — $ — Vested (1) — $ — Forfeited (1) — $ — Non-vested at end of quarter (1) 114,833 $ 35.27 ____________________________ (1) The number of awards assumes that the associated performance condition is met at the target amount. The final number of shares of the Company’s common stock issued may vary depending on the performance multiplier, which ranges from zero to two , depending on the level of satisfaction of the performance condition. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities at fair value on recurring basis | The following tables present the Company’s financial and non-financial assets and liabilities that were accounted for at fair value as of March 31, 2016 and December 31, 2015 and their classification within the fair value hierarchy: As of March 31, 2016 Level 1 Level 2 Level 3 (in thousands) Derivative assets (1) $ — $ 21,052 $ — Proved properties (2) $ — $ — $ 100,000 Unproved properties (2) $ — $ — $ 178,947 As of December 31, 2015 Level 1 Level 2 Level 3 (in thousands) Derivative assets (1) $ — $ 29,566 $ — Proved properties (2) $ — $ — $ 811,913 Unproved properties (2) $ — $ — $ 185,530 Asset retirement obligations (3) $ — $ — $ 2,027 ____________________________ (1) This represents a financial asset or liability that is measured at fair value on a recurring basis. (2) This represents non-financial assets that are measured at fair value on a nonrecurring basis due to impairments. This is the fair value of the asset base that was subjected to impairment and does not reflect the entire asset balance as presented on the accompanying balance sheets. Please refer to the Proved Oil and Gas Properties and Unproved Oil and Gas Properties sections below for additional discussion. (3) This represents the revision to estimates of the asset retirement obligation, which is a non-financial liability that is measured at fair value on a nonrecurring basis. Please refer to the Asset Retirement Obligation section below for additional discussion. |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of all the Company's derivative positions reported on the accompanying balance sheets | The following table contains a summary of all the Company’s derivative positions reported on the accompanying balance sheets as of March 31, 2016 and December 31, 2015 : As of March 31, 2016 Balance Sheet Location Fair Value (in thousands) Derivative Assets: Commodity contracts Current assets $ 21,052 Commodity contracts Noncurrent assets — Derivative Liabilities: Commodity contracts Current liabilities — Commodity contracts Long-term liabilities — Total derivative asset $ 21,052 As of December 31, 2015 Balance Sheet Location Fair Value (in thousands) Derivative Assets: Commodity contracts Current assets $ 29,566 Commodity contracts Noncurrent assets — Derivative Liabilities: Commodity contracts Current liabilities — Commodity contracts Long-term liabilities — Total derivative asset $ 29,566 |
Summary of the components of the derivative gain (loss) presented on the accompanying statements of operations | The following table summarizes the components of the derivative gain (loss) presented on the accompanying statements of operations: Three months ended March 31, 2016 2015 (in thousands) Derivative cash settlement gain: Oil contracts $ 7,508 $ 34,791 Gas contracts — 675 Total derivative cash settlement gain (1) $ 7,508 $ 35,466 Change in fair value loss $ (8,515 ) $ (16,610 ) Total derivative gain (loss) (1) $ (1,007 ) $ 18,856 _______________________________ (1) Total derivative gain (loss) and the derivative cash settlement gain for the three months ended March 31, 2016 and 2015 is reported in the derivative (gain) loss line item and derivative cash settlements line item on the accompanying statements of cash flows within the net cash provided by operating activities. |
Commodity derivative | |
Summary of derivative commodity contracts in place | As of March 31, 2016 , and as of the filing date of this report, the Company had the following derivative commodity contracts in place: Settlement Period Derivative Instrument Total Volumes (Bbls per day) Average Fixed Price Fair Market Value of Assets (in thousands) Oil 2Q 2016 Swap 3,103 $49.87 $ 2,815 3Q 2016 Swap 2,704 $51.78 2,434 4Q 2016 Swap 2,303 $52.83 2,062 2Q 2016 Put 5,430 $51.01 5,548 3Q 2016 Put 4,733 $51.01 4,409 4Q 2016 Put 4,031 $51.01 3,784 Total $ 21,052 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of calculation of earnings per basic and diluted shares from continuing and discontinued operations | The following table sets forth the calculation of loss per basic and diluted shares for the three month periods ended March 31, 2016 and 2015 . Three Months Ended March 31, 2016 2015 (in thousands, except per share amounts) Net loss $ (47,237 ) $ (18,421 ) Less: undistributed loss to unvested restricted stock — — Undistributed loss to common shareholders (47,237 ) (18,421 ) Basic net loss per common share $ (0.96 ) $ (0.41 ) Diluted net loss per common share $ (0.96 ) $ (0.41 ) Weighted-average shares outstanding - basic 49,131 44,520 Add: dilutive effect of contingent PSUs — — Weighted-average shares outstanding - diluted 49,131 44,520 |
ASSETS HELD FOR SALE (Details)
ASSETS HELD FOR SALE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Period within which sale of asset takes place to classify it as held for sale | 1 year | |
Assets held for sale, net | $ 209,421 | $ 214,922 |
Asset retirement obligations for assets held for sale | 10,779 | $ 10,591 |
Mid-Continent Region | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Write-down of disposal group to fair value | 10,000 | |
Rocky Mountain Infrastructure, LLC Subsidiary, Mid-Continent Region Assets, and North Park Field Assets | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Assets held for sale, net | 209,400 | |
Asset retirement obligations for assets held for sale | 10,800 | |
Rocky Mountain Infrastructure, LLC Subsidiary | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Termination fee received upon termination of purchase and sale agreement | $ 6,000 |
ACCOUNTS PAYABLE AND ACCRUED 27
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Accounts payable and accrued expenses contain the following: | ||
Drilling and completion costs | $ 18,245 | $ 32,459 |
Accounts payable trade | 484 | 1,085 |
Accrued general and administrative cost | 4,719 | 10,643 |
Lease operating expense | 4,336 | 4,731 |
Accrued reclamation cost | 162 | 162 |
Accrued interest | 18,669 | 14,231 |
Production and ad valorem taxes and other | 32,377 | 33,049 |
Total accounts payable and accrued expenses | $ 78,992 | $ 96,360 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
LONG-TERM DEBT | ||
Long-term debt | $ 1,094,085 | $ 885,392 |
6.75% Senior Notes | ||
LONG-TERM DEBT | ||
Long-term debt | 500,000 | |
Long term debt - gross | 500,000 | 500,000 |
Unamortized premium on 6.75% Senior Notes | $ 6,085 | $ 6,392 |
Interest rate (as a percent) | 6.75% | 6.75% |
5.75% Senior Notes | ||
LONG-TERM DEBT | ||
Long-term debt | $ 300,000 | $ 300,000 |
Long term debt - gross | $ 300,000 | $ 300,000 |
Interest rate (as a percent) | 5.75% | 5.75% |
Revolver | ||
LONG-TERM DEBT | ||
Long-term debt | $ 288,000 | $ 79,000 |
LONG-TERM DEBT - NARRATIVE (Det
LONG-TERM DEBT - NARRATIVE (Details) | 3 Months Ended | |
Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
LONG-TERM DEBT | ||
Long-term debt | $ 1,094,085,000 | $ 885,392,000 |
Maximum senior secured debt to trailing twelve month EBITDAX covenant | 2.50 | |
Minimum trailing twelve month interest to trailing twelve month EBITDAX coverage covenant | 2.50 | |
Minimum current ratio covenant | 1 | |
6.75% Senior Notes | ||
LONG-TERM DEBT | ||
Long-term debt | $ 500,000,000 | |
Amount of notes issued | $ 500,000,000 | |
Interest rate (as a percent) | 6.75% | 6.75% |
Debt covenant, maximum aggregate principal outstanding on revolving credit | $ 300,000,000 | |
Debt covenant, maximum aggregate principal outstanding as a percent of adjusted consolidated net tangible assets | 35.00% | |
5.75% Senior Notes | ||
LONG-TERM DEBT | ||
Long-term debt | $ 300,000,000 | $ 300,000,000 |
Amount of notes issued | $ 300,000,000 | |
Interest rate (as a percent) | 5.75% | 5.75% |
Revolver | ||
LONG-TERM DEBT | ||
Maximum borrowing capacity | $ 1,000,000,000 | |
Borrowing base amount | 475,000,000 | |
Long-term debt | 288,000,000 | $ 79,000,000 |
Remaining borrowing capacity | 0 | 384,000,000 |
Letters of credit outstanding | $ 12,000,000 | $ 12,000,000 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES (Details) | 3 Months Ended |
Mar. 31, 2016claim | |
Commitments and Contingencies Disclosure [Abstract] | |
Number of Claims | 0 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2016USD ($)shares | Mar. 31, 2015USD ($) | |
PSUs | Minimum | ||
STOCK-BASED COMPENSATION | ||
Ratio at which award holders get common stock of the company | 0 | |
PSUs | Maximum | ||
STOCK-BASED COMPENSATION | ||
Ratio at which award holders get common stock of the company | 2 | |
2011 Long Term Incentive Plan | Restricted shares | ||
STOCK-BASED COMPENSATION | ||
Ratio of restricted stock to common stock to be released from restrictions upon completion of the vesting period | shares | 1 | |
Vesting portion of shares | 0.333 | |
Vesting period | 3 years | |
Stock-based compensation expense | $ 2.3 | $ 2.9 |
Unrecognized compensation cost | $ 10.5 | |
Granted (in shares) | shares | 0 | |
2011 Long Term Incentive Plan | PSUs | ||
STOCK-BASED COMPENSATION | ||
Granted (in shares) | shares | 0 | |
2011 Long Term Incentive Plan | PSUs | Minimum | ||
STOCK-BASED COMPENSATION | ||
Ratio at which award holders get common stock of the company | 0 | |
2011 Long Term Incentive Plan | PSUs | Maximum | ||
STOCK-BASED COMPENSATION | ||
Ratio at which award holders get common stock of the company | 2 | |
2011 Long Term Incentive Plan | PSUs | Officers | ||
STOCK-BASED COMPENSATION | ||
Stock-based compensation expense | $ 0.7 | $ 0.5 |
Unrecognized compensation cost | $ 4.1 | |
Percentage of awards earned during performance cycle | 200.00% | |
Measurement period | 3 years | |
Vesting percent | 66.67% | |
2011 Long Term Incentive Plan | PSUs | Officers | Last trading days in applicable measuring period | ||
STOCK-BASED COMPENSATION | ||
Number of trading days used to measure total shareholder return | 30 days | |
2011 Long Term Incentive Plan | PSUs | Officers | Last trading days immediately preceeding the beginning of the applicable measuring period | ||
STOCK-BASED COMPENSATION | ||
Number of trading days used to measure total shareholder return | 30 days | |
2011 Long Term Incentive Plan | PSUs | Officers | Minimum | ||
STOCK-BASED COMPENSATION | ||
Ratio at which award holders get common stock of the company | 0 | |
2011 Long Term Incentive Plan | PSUs | Officers | Maximum | ||
STOCK-BASED COMPENSATION | ||
Ratio at which award holders get common stock of the company | 2 |
STOCK-BASED COMPENSATION SUMMAR
STOCK-BASED COMPENSATION SUMMARY OF STATUS AND ACTIVITY OF NON-VESTED RESTRICTED STOCK (Details) - 2011 Long Term Incentive Plan - Restricted shares | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Restricted Stock | |
Non-vested at beginning of year (in shares) | shares | 731,818 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | (248,447) |
Forfeited (in shares) | shares | (51,070) |
Non-vested at end of year (in shares) | shares | 432,301 |
Weighted-Average Grant-Date Fair Value | |
Non-vested at beginning of year (in dollars per share) | $ / shares | $ 29.47 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 33.57 |
Forfeited (in dollars per share) | $ / shares | 21.81 |
Non-vested at end of year (in dollars per share) | $ / shares | $ 28.02 |
STOCK-BASED COMPENSATION SUMM33
STOCK-BASED COMPENSATION SUMMARY OF STATUS AND ACTIVITY OF PSUS (Details) - 2011 Long Term Incentive Plan - PSUs | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
PSUs | |
Non-vested at beginning of year (in shares) | shares | 114,833 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Non-vested at end of year (in shares) | shares | 114,833 |
Weighted-Average Grant-Date Fair Value | |
Non-vested at beginning of year (in dollars per share) | $ / shares | $ 35.27 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Non-vested at end of year (in dollars per share) | $ / shares | $ 35.27 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Financial assets and liabilities accounted for at fair value | ||
Proved properties | $ 1,658,867 | $ 1,618,970 |
Unproved properties | 178,948 | 185,530 |
Asset retirement obligations | 15,352 | 14,935 |
Level 1 | ||
Financial assets and liabilities accounted for at fair value | ||
Derivative assets | 0 | 0 |
Proved properties | 0 | 0 |
Unproved properties | 0 | 0 |
Asset retirement obligations | 0 | |
Level 2 | ||
Financial assets and liabilities accounted for at fair value | ||
Derivative assets | 21,052 | 29,566 |
Proved properties | 0 | 0 |
Unproved properties | 0 | 0 |
Asset retirement obligations | 0 | |
Level 3 | ||
Financial assets and liabilities accounted for at fair value | ||
Derivative assets | 0 | 0 |
Proved properties | 100,000 | 811,913 |
Unproved properties | $ 178,947 | 185,530 |
Asset retirement obligations | $ 2,027 |
FAIR VALUE MEASUREMENTS - NARRA
FAIR VALUE MEASUREMENTS - NARRATIVE (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016USD ($)counterparty | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | |
Derivatives measured at fair value | |||
Total number of counterparties in derivative financial instruments | counterparty | 3 | ||
Proved properties | $ 1,658,867,000 | $ 1,618,970,000 | |
Unproved properties | 178,948,000 | 185,530,000 | |
Unproved oil and gas property impairments | 6,906,000 | $ 5,469,000 | |
Asset retirement obligations | 15,352,000 | 14,935,000 | |
Outstanding amount | 1,094,085,000 | 885,392,000 | |
Revolver | |||
Derivatives measured at fair value | |||
Outstanding amount | 288,000,000 | $ 79,000,000 | |
6.75% Senior Notes | |||
Derivatives measured at fair value | |||
Outstanding amount | $ 500,000,000 | ||
Interest rate (as a percent) | 6.75% | 6.75% | |
Long-term debt | $ 506,100,000 | $ 506,400,000 | |
5.75% Senior Notes | |||
Derivatives measured at fair value | |||
Outstanding amount | $ 300,000,000 | $ 300,000,000 | |
Interest rate (as a percent) | 5.75% | 5.75% | |
Level 3 | |||
Derivatives measured at fair value | |||
Proved properties | $ 100,000,000 | $ 811,913,000 | |
Unproved properties | 178,947,000 | 185,530,000 | |
Asset retirement obligations | 2,027,000 | ||
Estimate of Fair Value Measurement | 6.75% Senior Notes | |||
Derivatives measured at fair value | |||
Fair value of senior notes | 141,300,000 | 301,300,000 | |
Estimate of Fair Value Measurement | 5.75% Senior Notes | |||
Derivatives measured at fair value | |||
Fair value of senior notes | 81,800,000 | 163,100,000 | |
Estimate of Fair Value Measurement | Level 3 | |||
Derivatives measured at fair value | |||
Asset retirement obligations | 0 | 2,000,000 | |
Mid-Continent Region | |||
Derivatives measured at fair value | |||
Proved properties | 110,000,000 | 431,200,000 | |
Proved oil and gas property impairments | 10,000,000 | 321,200,000 | |
Mid-Continent Region | Estimate of Fair Value Measurement | Level 3 | |||
Derivatives measured at fair value | |||
Proved properties | 100,000,000 | 110,000,000 | |
Rocky Mountain Region | |||
Derivatives measured at fair value | |||
Proved properties | 1,100,000,000 | ||
Proved oil and gas property impairments | 0 | 419,300,000 | |
Rocky Mountain Region | Estimate of Fair Value Measurement | Level 3 | |||
Derivatives measured at fair value | |||
Proved properties | 701,900,000 | ||
Wattenberg Field | |||
Derivatives measured at fair value | |||
Unproved properties | 185,800,000 | 210,300,000 | |
Unproved oil and gas property impairments | 6,900,000 | 24,800,000 | |
Wattenberg Field | Estimate of Fair Value Measurement | Level 3 | |||
Derivatives measured at fair value | |||
Unproved properties | $ 178,900,000 | 185,500,000 | |
North Park Basin | |||
Derivatives measured at fair value | |||
Unproved oil and gas property impairments | $ 8,700,000 |
DERIVATIVES - CONTRACTS IN PLAC
DERIVATIVES - CONTRACTS IN PLACE (Details) $ in Thousands | Mar. 31, 2016USD ($)bbl / ditem$ / bbl | Dec. 31, 2015USD ($) |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Number of derivative instruments qualified for hedging instruments | item | 0 | |
Commodity derivative | ||
Derivative contract | ||
Fair Market Value of Assets | $ 21,052 | $ 29,566 |
Commodity derivative | 2016 | ||
Derivative contract | ||
Fair Market Value of Assets | $ 21,052 | |
Commodity derivative | Swap | Oil | Q2 2016 | ||
Derivative contract | ||
Total Volumes (in units per day) | bbl / d | 3,103 | |
Average fixed price (in USD per barrel or mmbtu) | $ / bbl | 49.87 | |
Fair Market Value of Assets | $ 2,815 | |
Commodity derivative | Swap | Oil | Q3 2016 | ||
Derivative contract | ||
Total Volumes (in units per day) | bbl / d | 2,704 | |
Average fixed price (in USD per barrel or mmbtu) | $ / bbl | 51.78 | |
Fair Market Value of Assets | $ 2,434 | |
Commodity derivative | Swap | Oil | Q4 2016 | ||
Derivative contract | ||
Total Volumes (in units per day) | bbl / d | 2,303 | |
Average fixed price (in USD per barrel or mmbtu) | $ / bbl | 52.83 | |
Fair Market Value of Assets | $ 2,062 | |
Commodity derivative | Put Option [Member] | Oil | Q2 2016 | ||
Derivative contract | ||
Total Volumes (in units per day) | bbl / d | 5,430 | |
Average fixed price (in USD per barrel or mmbtu) | $ / bbl | 51.01 | |
Fair Market Value of Assets | $ 5,548 | |
Commodity derivative | Put Option [Member] | Oil | Q3 2016 | ||
Derivative contract | ||
Total Volumes (in units per day) | bbl / d | 4,733 | |
Average fixed price (in USD per barrel or mmbtu) | $ / bbl | 51.01 | |
Fair Market Value of Assets | $ 4,409 | |
Commodity derivative | Put Option [Member] | Oil | Q4 2016 | ||
Derivative contract | ||
Total Volumes (in units per day) | bbl / d | 4,031 | |
Average fixed price (in USD per barrel or mmbtu) | $ / bbl | 51.01 | |
Fair Market Value of Assets | $ 3,784 |
DERIVATIVES - SUMMARY OF DERIVA
DERIVATIVES - SUMMARY OF DERIVATIVE POSITIONS (Details) - Commodity derivative - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Derivatives measured at fair value | ||
Total derivative asset | $ 21,052 | $ 29,566 |
Current assets | ||
Derivatives measured at fair value | ||
Derivative assets | 21,052 | 29,566 |
Noncurrent assets | ||
Derivatives measured at fair value | ||
Derivative assets | 0 | 0 |
Current liabilities | ||
Derivatives measured at fair value | ||
Derivative liabilities | 0 | 0 |
Long-term liabilities | ||
Derivatives measured at fair value | ||
Derivative liabilities | $ 0 | $ 0 |
DERIVATIVES - COMPONENTS OF DER
DERIVATIVES - COMPONENTS OF DERIVATIVE GAINS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Components of the derivative gain (loss) | ||
Derivative gain | $ (1,007) | $ 18,856 |
Commodity derivative | ||
Components of the derivative gain (loss) | ||
Derivative cash settlement gain (loss) | 7,508 | 35,466 |
Change in fair value gain (loss) | (8,515) | (16,610) |
Derivative gain | (1,007) | 18,856 |
Commodity derivative | Oil | ||
Components of the derivative gain (loss) | ||
Derivative cash settlement gain (loss) | 7,508 | 34,791 |
Commodity derivative | Natural gas | ||
Components of the derivative gain (loss) | ||
Derivative cash settlement gain (loss) | $ 0 | $ 675 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016USD ($)$ / sharesshares | Mar. 31, 2015USD ($)$ / sharesshares | |
Net income (loss): | ||
Net loss | $ | $ (47,237) | $ (18,421) |
Less: undistributed income (loss) to unvested restricted stock | $ | 0 | 0 |
Undistributed income (loss) to common shareholders | $ | $ (47,237) | $ (18,421) |
Basic net income (loss) per common share (in dollars per share) | $ / shares | $ (0.96) | $ (0.41) |
Diluted net income (loss) per common share (in dollars per share) | $ / shares | $ (0.96) | $ (0.41) |
Weighted-average shares outstanding - basic | 49,131,000 | 44,520,000 |
Add: dilutive effect of contingent PSUs | 0 | 0 |
Weighted-average shares outstanding - diluted | 49,131,000 | 44,520,000 |
Antidilutive securities excluded from EPS calculation | 0 | 147,786 |
PSUs | Minimum | ||
EARNINGS PER SHARE | ||
Percentage of awards earned during performance cycle | 0 | |
PSUs | Maximum | ||
EARNINGS PER SHARE | ||
Percentage of awards earned during performance cycle | 2 |
CAPITAL STOCK (Details)
CAPITAL STOCK (Details) - USD ($) $ in Thousands | Feb. 06, 2015 | Mar. 31, 2016 | Mar. 31, 2015 |
Net proceeds | $ 0 | $ 209,300 | |
Underwriter discounts, commissions and offering expenses | $ 0 | $ 6,492 | |
IPO | |||
Shares of common stock sold in initial public offering | 8,050,000 | ||
Net proceeds | $ 202,700 | ||
Underwriter discounts, commissions and offering expenses | $ 6,600 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Reconciliation of effective tax rate to expected federal tax rate | ||
Effective tax rate (as a percent) | 0.00% | 38.50% |