Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 6-May-15 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Matador Resources Co | |
Entity Central Index Key | 1520006 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 85,370,330 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash | $6,061 | $8,407 |
Restricted cash | 991 | 609 |
Accounts receivable | ||
Oil and natural gas revenues | 26,349 | 28,976 |
Joint interest billings | 12,924 | 6,925 |
Other | 7,114 | 9,091 |
Derivative instruments | 47,011 | 55,549 |
Lease and well equipment inventory | 1,718 | 1,212 |
Prepaid expenses | 3,025 | 2,554 |
Total current assets | 105,193 | 113,323 |
Oil and natural gas properties, full-cost method | ||
Evaluated | 1,785,208 | 1,617,913 |
Unproved and unevaluated | 449,042 | 264,419 |
Other property and equipment | 64,610 | 43,472 |
Less accumulated depletion, depreciation and amortization | -717,330 | -603,732 |
Net property and equipment | 1,581,530 | 1,322,072 |
Other assets | ||
Other assets | 703 | 896 |
Total other assets | 703 | 896 |
Total assets | 1,687,426 | 1,436,291 |
Current liabilities | ||
Accounts payable | 61,476 | 17,526 |
Accrued liabilities | 128,845 | 109,502 |
Royalties payable | 11,932 | 14,461 |
Note payable | 11,982 | 0 |
Advances from joint interest owners | 1,378 | 0 |
Deferred income taxes | 16,462 | 19,751 |
Income taxes payable | 0 | 444 |
Other current liabilities | 123 | 103 |
Total current liabilities | 232,198 | 161,787 |
Long-term liabilities | ||
Borrowings under Credit Agreement | 410,000 | 340,000 |
Asset retirement obligations | 13,275 | 11,640 |
Derivative instruments | 19 | |
Deferred income taxes | 106,649 | 53,783 |
Other long-term liabilities | 2,451 | 2,540 |
Total long-term liabilities | 532,394 | 407,963 |
Commitments and contingencies (Note 11) | ||
Shareholders’ equity | ||
Preferred stock - Series A, $0.01 par value, 2,000,000 shares authorized; 150,000 and zero shares issued and outstanding, respectively | 1 | 0 |
Common stock - $0.01 par value, 80,000,000 shares authorized; 76,844,899 and 73,373,744 shares issued; and 76,780,402 and 73,342,777 shares outstanding, respectively | 769 | 734 |
Additional paid-in capital | 830,824 | 724,819 |
Retained earnings | 90,621 | 140,855 |
Treasury stock, at cost, 64,497 and 30,967 shares, respectively | 0 | 0 |
Total Matador Resources Company shareholders’ equity | 922,215 | 866,408 |
Non-controlling interest in subsidiary | 619 | 133 |
Total shareholders' equity | 922,834 | 866,541 |
Total liabilities and shareholders’ equity | $1,687,426 | $1,436,291 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 76,844,899 | 73,373,744 |
Common stock, shares outstanding | 76,780,402 | 73,342,777 |
Treasury stock, shares | 64,497 | 30,967 |
Series A Preferred Stock | ||
Preferred stock, par value | $0.01 | $0 |
Preferred stock, shares authorized | 2,000,000 | 0 |
Preferred stock, shares issued | 150,000 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues | ||
Oil and natural gas revenues | $62,465 | $78,931 |
Realized gain (loss) on derivatives | 18,504 | -1,843 |
Unrealized loss on derivatives | -8,557 | -3,108 |
Total revenues | 72,412 | 73,980 |
Expenses | ||
Production taxes and marketing | 7,049 | 6,006 |
Lease operating | 13,046 | 9,351 |
Depletion, depreciation and amortization | 46,470 | 24,030 |
Accretion of asset retirement obligations | 112 | 117 |
Full-cost ceiling impairment | 67,127 | 0 |
General and administrative | 13,413 | 7,219 |
Total expenses | 147,217 | 46,723 |
Operating (loss) income | -74,805 | 27,257 |
Other income (expense) | ||
Net loss on asset sales and inventory impairment | 97 | 0 |
Interest expense | -2,070 | -1,396 |
Interest and other income | -384 | -38 |
Total other expense | -1,783 | -1,358 |
(Loss) income before income taxes | -76,588 | 25,899 |
Income tax (benefit) provision | ||
Current | 0 | 1,275 |
Deferred | -26,390 | 8,261 |
Total income tax (benefit) provision | -26,390 | 9,536 |
Net (loss) income | -50,198 | 16,363 |
Net income attributable to non-controlling interest in subsidiary | -36 | 0 |
Net (loss) income attributable to Matador Resources Company shareholders | ($50,234) | $16,363 |
Earnings (loss) per common share | ||
Basic (in dollars per share) | ($0.68) | $0.25 |
Diluted (in dollars per share) | ($0.68) | $0.25 |
Weighted average common shares outstanding | ||
Basic (shares) | 73,819 | 65,684 |
Diluted (shares) | 73,819 | 66,229 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statement of Changes in Shareholders' Equity (USD $) | Total | Preferred Stock | Common Stock | Preferred Stock | Preferred Stock | Additional paid-in capital | Additional paid-in capital | Retained earnings | Treasury Stock | Total shareholders' equity attributable to Matador Resources Company | Total shareholders' equity attributable to Matador Resources Company | Non-controlling interest in subsidiary |
In Thousands, except Share data, unless otherwise specified | Preferred Stock | Preferred Stock | ||||||||||
Balance at January 1, 2015 at Dec. 31, 2014 | $866,541 | $734 | $0 | $724,819 | $140,855 | $0 | $866,408 | $133 | ||||
Balance at January 1, 2015 at Dec. 31, 2014 | 0 | |||||||||||
Beginning Balance, shares at Dec. 31, 2014 | 73,342,777 | 73,374,000 | 31,000 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of common stock | 71,478 | 32,490 | 33 | 1 | 71,445 | 32,489 | 71,478 | 32,490 | ||||
Issuance of common stock, shares | 3,300,000 | 150,000 | ||||||||||
Common stock issued to Board members and advisors, shares | 6,000 | |||||||||||
Common stock issued to Board members and advisors | 4 | 4 | 4 | |||||||||
Stock options expense related to equity-based awards | 1,019 | 1,019 | 1,019 | |||||||||
Stock options exercised, shares | -3,000 | |||||||||||
Stock options exercised | 0 | |||||||||||
Restricted stock issued, shares | 163,000 | |||||||||||
Restricted stock issued | 0 | 2 | -2 | |||||||||
Restricted stock forfeited | 0 | |||||||||||
Restricted stock forfeited, shares | 33,000 | |||||||||||
Restricted stock and restricted stock units expense | 1,050 | 1,050 | 1,050 | |||||||||
Capital contribution to less than wholly owned subsidiary | 450 | 450 | ||||||||||
Current period net (loss) income | -50,198 | -50,234 | -50,234 | 36 | ||||||||
Balance at March 31, 2015 at Mar. 31, 2015 | $922,834 | $769 | $1 | $830,824 | $90,621 | $0 | $922,215 | $619 | ||||
Balance at March 31, 2015 at Mar. 31, 2015 | 150,000 | |||||||||||
Ending Balance, shares at Mar. 31, 2015 | 76,780,402 | 76,846,000 | 64,000 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating activities | ||
Net (loss) income | ($50,198) | $16,363 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities | ||
Unrealized loss on derivatives | 8,557 | 3,108 |
Depletion, depreciation and amortization | 46,470 | 24,030 |
Accretion of asset retirement obligations | 112 | 117 |
Full-cost ceiling impairment | 67,127 | 0 |
Stock-based compensation expense | 2,337 | 1,795 |
Deferred income tax (benefit) provision | -26,390 | 8,261 |
Net loss on asset sales and inventory impairment | 97 | 0 |
Changes in operating assets and liabilities | ||
Accounts receivable | 2,140 | -6,941 |
Lease and well equipment inventory | -112 | -31 |
Prepaid expenses | -364 | -424 |
Other assets | 193 | -466 |
Accounts payable, accrued liabilities and other current liabilities | 45,703 | -16,540 |
Royalties payable | -2,907 | 1,597 |
Advances from joint interest owners | 1,378 | 0 |
Income taxes payable | -444 | 1,275 |
Other long-term liabilities | -353 | -199 |
Net cash provided by operating activities | 93,346 | 31,945 |
Investing activities | ||
Oil and natural gas properties capital expenditures | -127,440 | -92,891 |
Expenditures for other property and equipment | -14,241 | -1,007 |
Business combination, net of cash acquired | -24,028 | 0 |
Restricted cash in less than wholly-owned subsidiary | -383 | 0 |
Net cash used in investing activities | -166,092 | -93,898 |
Financing activities | ||
Borrowings under Credit Agreement | 70,000 | 70,000 |
Proceeds from stock options exercised | 0 | 6 |
Capital commitment from non-controlling interest in subsidiary | 450 | 0 |
Taxes paid related to net share settlement of stock-based compensation | -50 | 0 |
Net cash provided by financing activities | 70,400 | 70,006 |
Increase (decrease) in cash | -2,346 | 8,053 |
Cash at beginning of period | 8,407 | 6,287 |
Cash at end of period | $6,061 | $14,340 |
Nature_of_Operations
Nature of Operations | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NATURE OF OPERATIONS |
Matador Resources Company, a Texas corporation (“Matador” and, collectively with its subsidiaries, the “Company”), is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas shale and other unconventional plays. The Company’s current operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Permian Basin in Southeast New Mexico and West Texas and the Eagle Ford shale play in South Texas. The Company also operates in the Haynesville shale and Cotton Valley plays in Northwest Louisiana and East Texas. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Accounting Policies [Abstract] | ||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Interim Financial Statements, Basis of Presentation, Consolidation and Significant Estimates | ||||||
The unaudited condensed consolidated financial statements of Matador and its wholly-owned and majority-owned subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) but do not include all of the information and footnotes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC (the “Annual Report”). The Company proportionately consolidates certain subsidiaries that are less-than-wholly-owned and the net income and equity to the non-controlling interest in these subsidiaries have been reported separately as required by Accounting Standards Codification (“ASC”) 810. All intercompany accounts and transactions have been eliminated in consolidation. In management’s opinion, these interim unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the Company’s consolidated financial position as of March 31, 2015, consolidated results of operations for the three months ended March 31, 2015 and 2014, consolidated changes in shareholders’ equity for the three months ended March 31, 2015 and consolidated cash flows for the three months ended March 31, 2015 and 2014. Amounts as of December 31, 2014 are derived from the audited consolidated financial statements in the Annual Report. | ||||||
Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end and the results for the interim periods shown in this report are not necessarily indicative of results to be expected for the full year due in part to volatility in oil, natural gas and natural gas liquids prices, global economic and financial market conditions, interest rates, access to sources of liquidity, estimates of reserves, drilling risks, geological risks, transportation restrictions, oil, natural gas and natural gas liquids supply and demand, market competition and interruptions of production. | ||||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions may also affect 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. The Company’s interim unaudited condensed consolidated financial statements are based on a number of significant estimates, including accruals for oil and natural gas revenues, accrued assets and liabilities primarily related to oil and natural gas operations, stock-based compensation, valuation of derivative instruments and oil and natural gas reserves. The estimates of oil and natural gas reserves quantities and future net cash flows are the basis for the calculations of depletion and impairment of oil and natural gas properties, as well as estimates of asset retirement obligations and certain tax accruals. While the Company believes its estimates are reasonable, changes in facts and assumptions or the discovery of new information may result in revised estimates. Actual results could differ from these estimates. | ||||||
Reclassifications | ||||||
Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations, cash flows or retained earnings. | ||||||
Restricted Cash | ||||||
Restricted cash represents the cash held by our less-than-wholly-owned subsidiary. By contractual agreement, the cash in this account is not to be commingled with other Company cash and is to be used only to fund the capital expenditures and operations of this less-than-wholly-owned subsidiary, which disposes of limited quantities of Company and third-party salt water. | ||||||
Property and Equipment | ||||||
The Company uses the full-cost method of accounting for its investments in oil and natural gas properties. Under this method of accounting, all costs associated with the acquisition, exploration and development of oil and natural gas properties and reserves, including unproved and unevaluated property costs, are capitalized as incurred and accumulated in a single cost center representing the Company’s activities, which are undertaken exclusively in the United States. Such costs include lease acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties, costs of drilling both productive and non-productive wells, capitalized interest on qualifying projects and certain general and administrative expenses directly related to acquisition, exploration and development activities, but do not include any costs related to production, selling or general corporate administrative activities. The Company capitalized approximately $1.6 million and $0.9 million of its general and administrative costs for the three months ended March 31, 2015 and 2014, respectively. The Company capitalized approximately $1.0 million and $0.7 million of its interest expense for the three months ended March 31, 2015 and 2014, respectively. | ||||||
The net capitalized costs of oil and natural gas properties are limited to the lower of unamortized costs less related deferred income taxes or the cost center “ceiling.” The cost center ceiling is defined as the sum of: | ||||||
(a) the present value, discounted at 10%, of future net revenues of proved oil and natural gas reserves, reduced by the estimated costs of developing these reserves, plus | ||||||
(b) unproved and unevaluated property costs not being amortized, plus | ||||||
(c) the lower of cost or estimated fair value of unproved and unevaluated properties included in the costs being amortized, if any, less | ||||||
(d) income tax effects related to the properties involved. | ||||||
Any excess of the Company’s net capitalized costs above the cost center ceiling as described above is charged to operations as a full-cost ceiling impairment. The need for a full-cost ceiling impairment is required to be assessed on a quarterly basis. The fair value of the Company’s derivative instruments is not included in the ceiling test computation as the Company does not designate these instruments as hedge instruments for accounting purposes. | ||||||
The estimated present value of after-tax future net cash flows from proved oil and natural gas reserves is highly dependent upon the quantities of proved reserves, the estimation of which requires substantial judgment. The associated commodity prices and applicable discount rate used in these estimates are in accordance with guidelines established by the SEC. Under these guidelines, oil and natural gas reserves are estimated using then-current operating and economic conditions, with no provision for price and cost escalations in future periods except by contractual arrangements. Future net revenues are calculated using prices that represent the arithmetic averages of first-day-of-the-month oil and natural gas prices for the previous 12-month period, and the guidelines further dictate that a 10% discount factor be used to determine the present value of future net revenues. For the period from April 2014 through March 2015, these average oil and natural gas prices were $79.21 per barrel (“Bbl”) and $3.882 per million British thermal units (“MMBtu”), respectively. For the period from April 2013 through March 2014, these average oil and natural gas prices were $94.92 per Bbl and $3.989 per MMBtu, respectively. In estimating the present value of after-tax future net cash flows from proved oil and natural gas reserves, the average oil prices were adjusted by property for quality, transportation and marketing fees and regional price differentials, and the average natural gas prices were adjusted by property for energy content, transportation and marketing fees and regional price differentials. At March 31, 2015 and 2014, the Company’s oil and natural gas reserves estimates were prepared by the Company’s engineering staff in accordance with guidelines established by the SEC and then, for the oil and natural gas reserves estimates at March 31, 2015, audited for their reasonableness and conformance with SEC guidelines by Netherland, Sewell & Associates, Inc., independent reservoir engineers. | ||||||
Using the average commodity prices, as adjusted, to determine the Company’s estimated proved oil and natural gas reserves at March 31, 2015, the Company’s net capitalized costs less related deferred income taxes exceeded the full-cost ceiling by $42.8 million. As a result, the Company recorded an impairment charge of $67.1 million to its net capitalized costs and a deferred income tax credit of $24.3 million related to the full-cost ceiling limitation at March 31, 2015. These charges are reflected in the Company’s unaudited condensed consolidated statement of operations for the three months ended March 31, 2015. Using the average commodity prices, as adjusted, to determine the Company’s estimated proved oil and natural gas reserves at March 31, 2014, the Company’s net capitalized costs less related deferred income taxes did not exceed the full-cost ceiling. As a result, the Company recorded no impairment to its net capitalized costs for the three months ended March 31, 2014. | ||||||
As a non-cash item, the full-cost ceiling impairment impacts the accumulated depletion and the net carrying value of the Company’s assets on its consolidated balance sheet, as well as the corresponding consolidated shareholders’ equity, but it has no impact on the Company’s consolidated net cash flows as reported. Changes in oil and natural gas production rates, oil and natural gas prices, reserves estimates, future development costs and other factors will determine the Company’s actual ceiling test computation and impairment analyses in future periods. | ||||||
Capitalized costs of oil and natural gas properties are amortized using the unit-of-production method based upon production and estimates of proved reserves quantities. Unproved and unevaluated property costs are excluded from the amortization base used to determine depletion. Unproved and unevaluated properties are assessed for possible impairment on a periodic basis based upon changes in operating or economic conditions. This assessment includes consideration of the following factors, among others: the assignment of proved reserves, geological and geophysical evaluations, intent to drill, remaining lease term and drilling activity and results. Upon impairment, the costs of the unproved and unevaluated properties are immediately included in the amortization base. Exploratory dry holes are included in the amortization base immediately upon determination that the well is not productive. | ||||||
Allocation of Purchase Price in Business Combinations | ||||||
As part of the Company’s business strategy, it periodically pursues the acquisition of oil and natural gas properties. The purchase price in a business combination is allocated to the assets acquired and liabilities assumed based on their fair values as of the acquisition date, which may occur many months after the announcement date. Therefore, while the consideration to be paid may be fixed, the fair value of the assets acquired and liabilities assumed is subject to change during the period between the announcement date and the acquisition date. The most significant estimates in the allocation typically relate to the value assigned to proved oil and natural gas reserves and unproved and unevaluated properties. As the allocation of the purchase price is subject to significant estimates and subjective judgments, the accuracy of this assessment is inherently uncertain. | ||||||
Earnings (Loss) Per Common Share | ||||||
The Company reports basic earnings (loss) per common share, which excludes the effect of potentially dilutive securities, and diluted earnings per common share, which includes the effect of all potentially dilutive securities, unless their impact is anti-dilutive. | ||||||
The following table sets forth the computation of diluted weighted average common shares outstanding for the three months ended March 31, 2015 and 2014 (in thousands). | ||||||
Three Months Ended | ||||||
March 31, | ||||||
2015 | 2014 | |||||
Weighted average common shares outstanding | ||||||
Basic | 73,819 | 65,684 | ||||
Dilutive effect of options, restricted stock units and preferred shares | — | 545 | ||||
Diluted weighted average common shares outstanding | 73,819 | 66,229 | ||||
A total of 2.5 million options to purchase shares of the Company’s common stock, 0.2 million restricted stock units and 150,000 preferred shares were excluded from the calculations above for the three months ended March 31, 2015 because their effects were anti-dilutive. Additionally, 0.8 million restricted shares, which are participating securities, were excluded from the calculations above for the three months ended March 31, 2015 as the security holders do not have the obligation to share in the losses of the Company. | ||||||
Fair Value Measurements | ||||||
The Company measures and reports certain assets and liabilities on a fair value basis. Fair value is 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 (exit price). The Company follows Financial Accounting Standards Board (“FASB”) guidance establishing a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. | ||||||
Recent Accounting Pronouncements | ||||||
Revenue from Contracts with Customers. In May 2014, the FASB issued Accounting Standards Update, or ASU, 2014-09, Revenue from Contracts with Customers (Topic 606), which specifies how and when to recognize revenue. This standard requires expanded disclosures surrounding revenue recognition and is intended to improve, and converge with international standards, the financial reporting requirements for revenue from contracts with customers. ASU 2014-09 will become effective for fiscal years beginning after December 15, 2016, i.e., in the Company’s first fiscal quarter of 2017. The Company is currently evaluating the impact, if any, of the adoption of this ASU on its consolidated financial statements. | ||||||
Interest - Imputation of Interest. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 935-30): Simplifying the Presentation of Debt Issuance Costs, which requires companies that have historically presented debt issuance costs as an asset to present those costs as a direct deduction from the carrying amount of the underlying debt liability. The guidance requires retrospective application in financial statements issued for fiscal years beginning after December 31, 2015 and interim periods within fiscal years beginning after December 15, 2016. The impact of the adoption of this ASU on the Company’s financial statements will be to reduce total assets and total liabilities by the carrying value of unamortized debt issuance costs at the time of adoption. |
Business_Combination
Business Combination | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Business Combinations [Abstract] | ||||
BUSINESS COMBINATION | BUSINESS COMBINATION | |||
On February 27, 2015, the Company completed a business combination with Harvey E. Yates Company (“HEYCO”), a subsidiary of HEYCO Energy Group, Inc., through which it obtained certain oil and natural gas producing properties and undeveloped acreage located in Lea and Eddy Counties, New Mexico, consisting of approximately 58,600 gross (18,200 net) acres strategically located between Matador’s existing acreage in its Ranger and Rustler Breaks prospect areas through a merger of HEYCO with and into a wholly-owned subsidiary of Matador (the “HEYCO Merger”). HEYCO, headquartered in Roswell, New Mexico, was privately-owned prior to the transaction. As consideration for the business combination, Matador paid approximately $33.6 million in cash and assumed debt obligations and issued 3,300,000 shares of Matador common stock and 150,000 shares of a new series of Matador Series A Convertible Preferred Stock (“Series A Preferred Stock”) to HEYCO Energy Group, Inc. (convertible into ten shares of common stock for each one share of Series A Preferred Stock upon the effectiveness of an amendment to the Company’s Amended and Restated Certificate of Formation to increase the number of authorized shares of common stock; the Series A Preferred Stock converted to common stock on April 6, 2015). Matador paid an additional $3.0 million for customary purchase price adjustments, including adjusting for production, revenues and operating and capital expenditures from September 1, 2014 to closing. As a result of the HEYCO Merger, Matador incurred deferred tax liabilities of approximately $76.0 million and assumed other liabilities of approximately $4.6 million. The HEYCO Merger was accounted for using the acquisition method under ASC Topic 805, “Business Combinations,” which requires the assets acquired and liabilities assumed to be recorded at fair value as of the respective acquisition date. During the three months ended March 31, 2015, the Company incurred approximately $2.2 million of transaction costs associated with the HEYCO Merger. These costs are recorded in general and administrative expenses for the three months ended March 31, 2015. The majority of the assets acquired in the HEYCO Merger were in the form of non-producing acreage. The producing wells acquired in the HEYCO Merger did not have a material impact on our revenues or results of operations. Therefore, pro forma financial information for the HEYCO Merger is not presented as the effects are not material to the Company’s consolidated results. Included in the Statement of Operations for the three months ended March 31, 2015 is revenue attributable to the operations acquired in the HEYCO Merger of approximately $0.7 million. | ||||
The preliminary allocation of the consideration given related to this business combination, which is subject to change, was as follows. | ||||
Consideration given | ||||
Cash | $ | 24,648 | ||
Preferred shares issued | 32,490 | |||
Common shares issued | 71,478 | |||
Total consideration given | $ | 128,616 | ||
Allocation of purchase price | ||||
Cash acquired | $ | 620 | ||
Accounts receivable | 3,536 | |||
Inventory | 180 | |||
Other current assets | 106 | |||
Oil and natural gas properties | ||||
Evaluated oil and natural gas properties | 22,044 | |||
Unproved oil and unevaluated natural gas properties | 194,686 | |||
Accounts payable | (2,551 | ) | ||
Accrued liabilities | (11 | ) | ||
Current note payable | (11,982 | ) | ||
Asset retirement obligations | (2,046 | ) | ||
Deferred tax liabilities incurred | (75,966 | ) | ||
Net assets acquired | $ | 128,616 | ||
Equity
Equity | 3 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
EQUITY | EQUITY |
As discussed in Note 3, the Company issued 3,300,000 shares of common stock and 150,000 shares of a new series of Series A Preferred Stock to HEYCO Energy Group, Inc. (convertible into ten shares of common stock for each one share of Preferred Stock) in connection with the HEYCO Merger. Pursuant to the statement of resolutions, each share of Series A Preferred Stock would automatically convert into ten shares of Matador common stock, subject to customary anti-dilution adjustments, upon the vote and approval by Matador’s shareholders of an amendment to Matador’s Amended and Restated Certificate of Formation to increase the number of shares of authorized Matador common stock. Each share of Series A Preferred Stock would be entitled to ten votes on each matter submitted to Matador’s shareholders for vote. Beginning on August 27, 2015 and until such time as the Series A Preferred Stock was converted to common stock, the holders would be entitled to a quarterly dividend of $1.80 per share. Neither the issuance of the Series A Preferred Stock nor the common stock issued in connection with the HEYCO Merger were registered under the Securities Act of 1933, as amended, and neither the Series A Preferred Stock nor such common stock may be offered or sold in the United States absent such registration or an applicable exemption from registration requirements. As part of the HEYCO Merger, the Company entered into a registration rights agreement with HEYCO Energy Group, Inc. providing certain demand and piggyback registration rights, with demand registration rights exercisable beginning on February 27, 2016. | |
On April 2, 2015, the shareholders of the Company approved an amendment to the Company’s Amended and Restated Certificate of Formation that authorized an increase in the number of authorized shares of common stock from 80,000,000 shares to 120,000,000 shares. The 150,000 outstanding shares of Series A Preferred Stock converted to 1,500,000 shares of common stock on April 6, 2015, following shareholder approval of the amendment to our Amended and Restated Certificate of Formation. | |
On April 21, 2015, the Company completed a public offering of 7,000,000 shares of its common stock. After deducting direct offering costs totaling approximately $1.6 million, the Company received net proceeds of approximately $187.1 million. The Company used a portion of the net proceeds to repay $85.0 million in outstanding borrowings under its revolving credit facility (see Note 6), which amounts may be reborrowed in accordance with the terms of that facility. The remaining $102.1 million of net proceeds is being used to fund a portion of the Company’s working capital expenditures, including the possible addition of a third drilling rig in the Permian Basin as early as late summer 2015 and targeted acquisitions of additional acreage in the Permian Basin, as well as in the Eagle Ford shale and the Haynesville shale, and for other general working capital needs. Pending such uses, the Company plans to invest the remaining proceeds in short-term marketable securities. | |
All shares of treasury stock outstanding at March 31, 2015 and December 31, 2014 represent forfeitures of non-vested restricted stock awards. |
Asset_Retirement_Obligations
Asset Retirement Obligations | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Asset Retirement Obligation Disclosure [Abstract] | ||||
ASSET RETIREMENT OBLIGATIONS | ASSET RETIREMENT OBLIGATIONS | |||
The following table summarizes the changes in the Company’s asset retirement obligations for the three months ended March 31, 2015 (in thousands). | ||||
Beginning asset retirement obligations | $ | 11,951 | ||
Liabilities incurred during period | 2,404 | |||
Liabilities settled during period | (221 | ) | ||
Revisions in estimated cash flows | (703 | ) | ||
Accretion expense | 112 | |||
Ending asset retirement obligations | 13,543 | |||
Less: current asset retirement obligations(1) | (268 | ) | ||
Long-term asset retirement obligations | $ | 13,275 | ||
_______________ | ||||
-1 | Included in accrued liabilities in the Company’s unaudited condensed consolidated balance sheet at March 31, 2015. |
Debt
Debt | 3 Months Ended | ||
Mar. 31, 2015 | |||
Debt Disclosure [Abstract] | |||
DEBT | DEBT | ||
Credit Agreement | |||
On September 28, 2012, the Company entered into a third amended and restated credit agreement with the lenders party thereto (the “Credit Agreement”), which increased the maximum facility amount from $400.0 million to $500.0 million. The Credit Agreement matures December 29, 2016. MRC Energy Company is the borrower under the Credit Agreement and is a subsidiary of Matador that, at March 31, 2015, directly or indirectly owns the ownership interests in the Company’s other operating subsidiaries other than one less-than-wholly-owned subsidiary and MRC Delaware Resources, LLC. Borrowings are secured by mortgages on substantially all of the Company’s proved oil and natural gas properties and by the equity interests of certain of MRC Energy Company’s wholly-owned subsidiaries, which are also guarantors. In addition, all obligations under the Credit Agreement are guaranteed by Matador, the parent corporation. Various commodity hedging agreements with certain of the lenders under the Credit Agreement (or affiliates thereof) are also secured by the collateral of and guaranteed by certain eligible subsidiaries of MRC Energy Company. | |||
The borrowing base under the Credit Agreement is determined semi-annually as of May 1 and November 1 by the lenders based primarily on the estimated value of the Company’s proved oil and natural gas reserves at December 31 and June 30 of each year, respectively. Both the Company and the lenders may request an unscheduled redetermination of the borrowing base once each between scheduled redetermination dates. During the second quarter of 2015, the lenders completed their review of the Company’s estimated total proved oil and natural gas reserves at December 31, 2014, and as a result, on April 6, 2015, the Company received notice that the borrowing base under the Credit Agreement would be reaffirmed at $450.0 million, and the conforming borrowing base would be reaffirmed at $375.0 million. Pursuant to an amendment to the Credit Agreement entered into concurrently with the issuance of $400.0 million of senior unsecured notes on April 14, 2015 discussed herein, the borrowing base was reduced to the conforming borrowing base of $375.0 million. | |||
In the event of a borrowing base increase, the Company is required to pay a fee to the lenders equal to a percentage of the amount of the increase, which is determined based on market conditions at the time of the borrowing base increase. Total deferred loan costs were $1.6 million at March 31, 2015, and these costs are being amortized over the term of the agreement, which approximates the amortization of these costs using the effective interest method. If, upon a redetermination or the automatic reduction of the borrowing base to the conforming borrowing base, the borrowing base were to be less than the outstanding borrowings under the Credit Agreement at any time, the Company would be required to provide additional collateral satisfactory in nature and value to the lenders to increase the borrowing base to an amount sufficient to cover such excess or to repay the deficit in equal installments over a period of six months. | |||
At March 31, 2015, the Company had $410.0 million in borrowings outstanding under the Credit Agreement and approximately $0.6 million in outstanding letters of credit issued pursuant to the Credit Agreement. For the three months ended March 31, 2015, the Company’s outstanding borrowings bore interest at an effective interest rate of approximately 2.9% per annum. On April 14, 2015, using a portion of the net proceeds from the senior unsecured notes offering discussed herein, the Company repaid $380.0 million of its outstanding borrowings under the Credit Agreement. From April 14, 2015 through April 23, 2015, the Company borrowed $55.0 million under the Credit Agreement to finance a portion of its working capital requirements and capital expenditures and the acquisition of additional leasehold interests. On April 24, 2015, using a portion of the net proceeds from the April 2015 public offering of common stock discussed herein, the Company repaid the $85.0 million of outstanding borrowings under the Credit Agreement. At May 6, 2015, the Company had no borrowings outstanding under the Credit Agreement and approximately $0.6 million in outstanding letters of credit issued pursuant to the Credit Agreement. | |||
As of March 31, 2015, if the Company borrows funds as a base rate loan, such borrowings will bear interest at a rate equal to the higher of (i) the prime rate for such day, (ii) the Federal Funds Effective Rate (as defined in the Credit Agreement) on such day, plus 0.50% or (iii) the daily adjusting LIBOR rate (as defined in the Credit Agreement) plus 1.0% plus, in each case, an amount from 0.50% to 2.75% of such outstanding loan depending on the level of borrowings under the agreement. If the Company borrows funds as a Eurodollar loan, such borrowings will bear interest at a rate equal to (i) the quotient obtained by dividing (A) the LIBOR rate by (B) a percentage equal to 100% minus the maximum rate during such interest calculation period at which Royal Bank of Canada (“RBC”) is required to maintain reserves on Eurocurrency Liabilities (as defined in Regulation D of the Board of Governors of the Federal Reserve System) plus (ii) an amount from 1.50% to 3.75% of such outstanding loan depending on the level of borrowings under the Credit Agreement. The interest period for Eurodollar borrowings may be one, two, three or six months as designated by the Company. A commitment fee of 0.375% to 0.50%, depending on the unused availability under the Credit Agreement, is also paid quarterly in arrears. The Company includes this commitment fee, any amortization of deferred financing costs (including origination, borrowing base increase and amendment fees) and annual agency fees, if any, as interest expense and in its interest rate calculations and related disclosures. The Credit Agreement requires the Company to maintain a debt to EBITDA ratio, which is defined as total debt outstanding divided by a rolling four quarter EBITDA calculation, of 4.25 or less. | |||
Subject to certain exceptions, the Credit Agreement contains various covenants that limit the Company’s ability to take certain actions, including, but not limited to, the following: | |||
• | incur indebtedness or grant liens on any of the Company’s assets; | ||
• | enter into commodity hedging agreements; | ||
• | declare or pay dividends, distributions or redemptions; | ||
• | merge or consolidate; | ||
• | make any loans or investments; | ||
• | engage in transactions with affiliates; | ||
• | engage in certain asset dispositions, including a sale of all or substantially all of the Company’s assets; and | ||
• | take certain actions with respect to the Company’s senior unsecured notes. | ||
If an event of default exists under the Credit Agreement, the lenders will be able to accelerate the maturity of the borrowings and exercise other rights and remedies. Events of default include, but are not limited to, the following events: | |||
• | failure to pay any principal or interest on the outstanding borrowings or any reimbursement obligation under any letter of credit when due or any fees or other amounts within certain grace periods; | ||
• | failure to perform or otherwise comply with the covenants and obligations in the Credit Agreement or other loan documents, subject, in certain instances, to certain grace periods; | ||
• | bankruptcy or insolvency events involving the Company or its subsidiaries; and | ||
• | a change of control, as defined in the Credit Agreement. | ||
At March 31, 2015, the Company believes that it was in compliance with the terms of the Credit Agreement. | |||
Senior Unsecured Notes | |||
On April 14, 2015, Matador issued $400.0 million of 6.875% senior notes due 2023 (the “Notes”). The Notes are Matador’s senior unsecured obligations, are redeemable as described below and were issued at par value. The net proceeds of approximately $392.0 million, after deducting the initial purchasers’ discounts and estimated offering expenses, were used to pay down a portion of the outstanding borrowings under the Credit Agreement and the debt assumed in connection with the HEYCO Merger. The Notes mature on April 15, 2023, and interest is payable semi-annually in arrears on April 15 and October 15 of each year. The Notes are guaranteed on a senior unsecured basis by all of Matador’s wholly-owned subsidiaries. | |||
On or after April 15, 2018, Matador may redeem all or a portion of the Notes at any time or from time to time at the following redemption prices (expressed as percentages of the principal amount) plus accrued and unpaid interest, if any, to the applicable redemption date, if redeemed during the twelve month period beginning on April 15 of the years indicated. | |||
Year | Redemption Price | ||
2018 | 105.16% | ||
2019 | 103.44% | ||
2020 | 101.72% | ||
2021 and thereafter | 100.00% | ||
At any time prior to April 15, 2018, Matador may redeem up to 35% of the aggregate principal amount of the Notes with net proceeds from certain equity offerings at a redemption price of 106.875% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to the redemption date; provided that (i) at least 65% in aggregate principal amount of the Notes (including any additional notes) originally issued remains outstanding immediately after the occurrence of such redemption (excluding Notes held by Matador and its subsidiaries) and (ii) each such redemption occurs within 180 days of the date of the closing of the related equity offering. | |||
In addition, at any time prior to April 15, 2018, Matador may redeem all or part of the Notes at a redemption price equal to the sum of: | |||
(i) the principal amount thereof, plus | |||
(ii) the excess, if any, of (a) the present value at such time of (1) the redemption price of such Notes at April 15, 2018 plus (2) any required interest payments due on such Notes through April 15, 2018 discounted to the redemption date on a semi-annual basis using a discount rate equal to the Treasury Rate (as defined in the indenture governing the Notes (the “Indenture”)) plus 50 basis points, over (b) the principal amount of such Notes, plus | |||
(iii) accrued and unpaid interest, if any, to the redemption date. | |||
Subject to certain exceptions, the Indenture contains various covenants that limit the Company’s ability to take certain actions, including, but not limited to, the following: | |||
• | incur or guarantee additional debt or issue certain types of preferred stock; | ||
• | pay dividends on capital stock or redeem, repurchase or retire its capital stock or subordinated indebtedness; | ||
• | transfer or sell assets; | ||
• | make certain investments; | ||
• | create certain liens; | ||
• | enter into agreements that restrict dividends or other payments from its Restricted Subsidiaries (as defined in the Indenture) to the Company; | ||
• | consolidate, merge or transfer all or substantially all of its assets; | ||
• | engage in transactions with affiliates; and | ||
• | create unrestricted subsidiaries. | ||
In the case of an event of default arising from certain events of bankruptcy or insolvency with respect to Matador, any Restricted Subsidiary that is a Significant Subsidiary (as defined in the Indenture) or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice. If any other event of default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Events of default include, but are not limited to, the following events: | |||
• | default for 30 days in the payment when due of interest on the Notes; | ||
• | default in the payment when due of the principal of, or premium, if any, on the Notes; | ||
• | failure by Matador to comply with its obligations to offer to purchase or purchase Notes when required pursuant to the change of control or asset sale provisions of the Indenture or Matador’s failure to comply with the covenant relating to merger, consolidation or sale of assets; | ||
• | failure by Matador for 180 days after notice to comply with its reporting obligations under the Indenture; | ||
• | failure by Matador for 60 days after notice to comply with any of the other agreements in the Indenture; | ||
• | payment defaults and accelerations with respect to other indebtedness of Matador and its Restricted Subsidiaries in the aggregate principal amount of $25.0 million or more; | ||
• | failure by Matador or any Restricted Subsidiary to pay certain final judgments aggregating in excess of $25.0 million within 60 days; | ||
• | any subsidiary guarantee by a guarantor ceases to be in full force and effect, is declared null and void in a judicial proceeding or is denied or disaffirmed by its maker; and | ||
• | certain events of bankruptcy or insolvency with respect to Matador or any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary. | ||
Current Note Payable | |||
In connection with the HEYCO Merger, Matador assumed a note payable to PlainsCapital Bank in the amount of $12.5 million pursuant to which approximately $12.0 million of indebtedness was outstanding. The outstanding indebtedness was repaid on April 14, 2015 using a portion of the net proceeds from the Notes offering, and the related credit agreement and all associated obligations of Matador were terminated. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES |
The Company had an effective tax rate of 34.4% for the three months ended March 31, 2015. Total income tax benefit for the three months ended March 31, 2015 differed from amounts computed by applying the U.S. federal statutory tax rate to pre-tax loss due primarily to the impact of permanent differences between book and taxable income. The total income tax benefit of $26.4 million for the three months ended March 31, 2015 includes $24.3 million of deferred income tax benefit resulting from the full-cost ceiling impairment. Based upon its projections for the remainder of 2014, the Company anticipated incurring a small alternative minimum tax (“AMT”) liability for the year ending December 31, 2014, the proportionate share of which was recorded as the current income tax provision for the three months ended March 31, 2014. The Company had an effective tax rate of 36.8% for the three months ended March 31, 2014. Total income tax expense for the three months ended March 31, 2014 differed from amounts computed by applying the U.S. federal statutory tax rate to pre-tax income due primarily to the impact of permanent differences between book and taxable income. |
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION |
In January 2015, the Company granted awards of 113,289 shares of restricted stock and options to purchase 607,995 shares of the Company’s common stock at an exercise price of $22.01 to certain of its employees. The fair value of these awards was approximately $8.4 million. All of these awards vest over a term of three years. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS | |||||||||||||||
From time to time, the Company uses derivative financial instruments to mitigate its exposure to commodity price risk associated with oil, natural gas and natural gas liquids prices. These instruments consist of put and call options in the form of costless collars and swap contracts. The Company records derivative financial instruments in its consolidated balance sheet as either assets or liabilities measured at fair value. The Company has elected not to apply hedge accounting for its existing derivative financial instruments. As a result, the Company recognizes the change in derivative fair value between reporting periods currently in its consolidated statement of operations as an unrealized gain or unrealized loss. The fair value of the Company’s derivative financial instruments is determined using industry-standard models that consider various inputs including: (i) quoted forward prices for commodities, (ii) time value of money and (iii) current market and contractual prices for the underlying instruments, as well as other relevant economic measures. RBC, Comerica Bank, The Bank of Nova Scotia and BMO Harris Financing (Bank of Montreal) (or affiliates thereof) were the counterparties for the Company’s commodity derivatives at March 31, 2015. The Company has considered the credit standings of the counterparties in determining the fair value of its derivative financial instruments. | ||||||||||||||||
The Company has entered into various costless collar contracts to mitigate its exposure to fluctuations in oil prices, each with an established price floor and ceiling. For each calculation period, the specified price for determining the realized gain or loss pursuant to any of these transactions is the arithmetic average of the settlement prices for the NYMEX West Texas Intermediate oil futures contract for the first nearby month corresponding to the calculation period’s calendar month. When the settlement price is below the price floor established by one or more of these collars, the Company receives from the counterparty an amount equal to the difference between the settlement price and the price floor multiplied by the contract oil volume. When the settlement price is above the price ceiling established by one or more of these collars, the Company pays to the counterparty an amount equal to the difference between the settlement price and the price ceiling multiplied by the contract oil volume. | ||||||||||||||||
The Company has entered into various costless collar transactions for natural gas, each with an established price floor and ceiling. For each calculation period, the specified price for determining the realized gain or loss to the Company pursuant to any of these transactions is the settlement price for the NYMEX Henry Hub natural gas futures contract for the delivery month corresponding to the calculation period’s calendar month for the settlement date of that contract period. When the settlement price is below the price floor established by one or more of these collars, the Company receives from the counterparty an amount equal to the difference between the settlement price and the price floor multiplied by the contract natural gas volume. When the settlement price is above the price ceiling established by one or more of these collars, the Company pays to the counterparty an amount equal to the difference between the settlement price and the price ceiling multiplied by the contract natural gas volume. | ||||||||||||||||
The Company has entered into various swap contracts to mitigate its exposure to fluctuations in natural gas liquids (“NGL”) prices, each with an established fixed price. For each calculation period, the settlement price for determining the realized gain or loss to the Company pursuant to any of these transactions is the arithmetic average of any current month for delivery on the nearby month futures contracts of the underlying commodity as stated on the “Mont Belvieu Spot Gas Liquids Prices: NON-TET prop” on the pricing date. When the settlement price is below the fixed price established by one or more of these swaps, the Company receives from the counterparty an amount equal to the difference between the settlement price and the fixed price multiplied by the contract NGL volume. When the settlement price is above the fixed price established by one or more of these swaps, the Company pays to the counterparty an amount equal to the difference between the settlement price and the fixed price multiplied by the contract NGL volume. | ||||||||||||||||
At March 31, 2015, the Company had various costless collar contracts open and in place to mitigate its exposure to oil and natural gas price volatility, each with a specific term (calculation period), notional quantity (volume hedged) and price floor and ceiling. Each contract is set to expire at varying times during 2015 and 2016. | ||||||||||||||||
At March 31, 2015, the Company had various swap contracts open and in place to mitigate its exposure to NGL price volatility, each with a specific term (calculation period), notional quantity (volume hedged) and fixed price. Each contract is set to expire at varying times during 2015. | ||||||||||||||||
The following is a summary of the Company’s open costless collar contracts for oil and natural gas and open swap contracts for NGL at March 31, 2015. | ||||||||||||||||
Commodity | Calculation Period | Notional | Price | Price | Fair Value of | |||||||||||
Quantity | Floor | Ceiling | Asset | |||||||||||||
(Bbl/month) | ($/Bbl) | ($/Bbl) | (Liability) | |||||||||||||
(thousands) | ||||||||||||||||
Oil | 04/01/2015 - 12/31/2015 | 20,000 | 80 | 100 | $ | 4,974 | ||||||||||
Oil | 04/01/2015 - 12/31/2015 | 20,000 | 80 | 101 | 4,978 | |||||||||||
Oil | 04/01/2015 - 12/31/2015 | 20,000 | 83 | 96.12 | 5,499 | |||||||||||
Oil | 04/01/2015 - 12/31/2015 | 20,000 | 83 | 97 | 5,499 | |||||||||||
Oil | 04/01/2015 - 12/31/2015 | 20,000 | 85 | 99 | 5,855 | |||||||||||
Oil | 04/01/2015 - 12/31/2015 | 20,000 | 85 | 100 | 5,855 | |||||||||||
Oil | 04/01/2015 - 12/31/2015 | 20,000 | 85 | 105.1 | 5,855 | |||||||||||
Total open oil costless collar contracts | 38,515 | |||||||||||||||
Commodity | Calculation Period | Notional | Price | Price | Fair Value of | |||||||||||
Quantity | Floor | Ceiling | Asset | |||||||||||||
(MMBtu/month) | ($/MMBtu) | ($/MMBtu) | (Liability) | |||||||||||||
(thousands) | ||||||||||||||||
Natural Gas | 04/01/2015 - 10/31/2015 | 150,000 | 2.75 | 3.19 | 154 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 2.75 | 3.05 | 66 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 2.75 | 3.15 | 89 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 2.75 | 3.11 | 80 | |||||||||||
Natural Gas | 04/01/2014 - 12/31/2015 | 300,000 | 2.88 | 3.18 | 490 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 3.75 | 4.36 | 891 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 3.75 | 4.45 | 892 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 3.75 | 4.6 | 895 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 3.75 | 4.65 | 888 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 200,000 | 3.75 | 5.04 | 1,799 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 3.75 | 5.34 | 900 | |||||||||||
Natural Gas | 01/01/2016 - 12/31/2016 | 200,000 | 2.75 | 3.5 | (65 | ) | ||||||||||
Total open natural gas costless collar contracts | 7,079 | |||||||||||||||
Commodity | Calculation Period | Notional Quantity | Fixed Price | Fair Value of Asset (Liability) | ||||||||||||
(Gal/month) | ($/Gal) | (thousands) | ||||||||||||||
Propane | 04/01/2015 - 12/31/2015 | 150,000 | 1 | 626 | ||||||||||||
Propane | 04/01/2015 - 12/31/2015 | 100,000 | 1.03 | 444 | ||||||||||||
Propane | 04/01/2015 - 12/31/2015 | 68,000 | 1.073 | 328 | ||||||||||||
Total open NGL swap contracts | 1,398 | |||||||||||||||
Total open derivative financial instruments | $ | 46,992 | ||||||||||||||
These derivative financial instruments are subject to master netting arrangements within specific commodity types, i.e., oil, natural gas and NGL, by counterparty. Derivative financial instruments with Counterparty A are not subject to master netting across commodity types, while derivative financial instruments with Counterparties B, C and D allow for cross-commodity master netting provided the settlement dates for the commodities are the same. The Company does not present different types of commodities with the same counterparty on a net basis in its consolidated balance sheet. | ||||||||||||||||
The following table presents the gross asset balances of the Company’s derivative financial instruments, the amounts subject to master netting arrangements, the amounts that the Company has presented on a net basis, the amounts subject to master netting across different commodity types that were presented on a gross basis and the location of these balances in its unaudited condensed consolidated balance sheet as of March 31, 2015 (in thousands). | ||||||||||||||||
Derivative Instruments | Gross | Gross amounts | Net amounts of | Amounts subject to master netting arrangements presented on a gross basis | ||||||||||||
amounts of | netted in the condensed | assets | ||||||||||||||
recognized | consolidated | presented in the condensed | ||||||||||||||
assets | balance sheet | consolidated | ||||||||||||||
balance sheet | ||||||||||||||||
Counterparty A | ||||||||||||||||
Current assets | $ | 11,372 | $ | (17 | ) | $ | 11,355 | $ | — | |||||||
Other assets | — | — | — | — | ||||||||||||
Counterparty B | ||||||||||||||||
Current assets | 7,683 | (19 | ) | 7,664 | — | |||||||||||
Other assets | — | — | — | — | ||||||||||||
Counterparty C | ||||||||||||||||
Current assets | 22,186 | (950 | ) | 21,236 | — | |||||||||||
Other assets | 359 | (359 | ) | — | — | |||||||||||
Counterparty D | ||||||||||||||||
Current assets | 6,764 | (8 | ) | 6,756 | — | |||||||||||
Other assets | — | — | — | — | ||||||||||||
Total | $ | 48,364 | $ | (1,353 | ) | $ | 47,011 | $ | — | |||||||
The following table presents the gross liability balances of the Company’s derivative financial instruments, the amounts subject to master netting arrangements, the amounts that the Company has presented on a net basis, the amounts subject to master netting across different commodity types that were presented on a gross basis and the location of these balances in its unaudited condensed consolidated balance sheet as of March 31, 2015 (in thousands). | ||||||||||||||||
Derivative Instruments | Gross | Gross amounts | Net amounts of | Amounts subject to master netting arrangements presented on a gross basis | ||||||||||||
amounts of | netted in the condensed | liabilities | ||||||||||||||
recognized | consolidated | presented in the condensed | ||||||||||||||
liabilities | balance sheet | consolidated | ||||||||||||||
balance sheet | ||||||||||||||||
Counterparty A | ||||||||||||||||
Current liabilities | $ | 17 | $ | (17 | ) | $ | — | $ | — | |||||||
Other liabilities | — | — | — | — | ||||||||||||
Counterparty B | ||||||||||||||||
Current liabilities | 19 | (19 | ) | — | — | |||||||||||
Other liabilities | — | — | — | — | ||||||||||||
Counterparty C | ||||||||||||||||
Current liabilities | 950 | (950 | ) | — | — | |||||||||||
Other liabilities | 378 | (359 | ) | 19 | — | |||||||||||
Counterparty D | ||||||||||||||||
Current liabilities | 8 | (8 | ) | — | — | |||||||||||
Other liabilities | — | — | — | — | ||||||||||||
Total | $ | 1,372 | $ | (1,353 | ) | $ | 19 | $ | — | |||||||
The following table presents the gross asset balances of the Company’s derivative financial instruments, the amounts subject to master netting arrangements, the amounts that the Company has presented on a net basis, the amounts subject to master netting across different commodity types that were presented on a gross basis and the location of these balances in its unaudited condensed consolidated balance sheet as of December 31, 2014 (in thousands). | ||||||||||||||||
Derivative Instruments | Gross | Gross amounts | Net amounts of | Amounts subject to master netting arrangements presented on a gross basis | ||||||||||||
amounts of | netted in the | assets | ||||||||||||||
recognized | condensed | presented in the condensed | ||||||||||||||
assets | consolidated | consolidated | ||||||||||||||
balance sheet | balance sheet | |||||||||||||||
Counterparty A | ||||||||||||||||
Current assets | $ | 13,437 | $ | (157 | ) | $ | 13,280 | $ | — | |||||||
Other assets | — | — | — | — | ||||||||||||
Counterparty B | ||||||||||||||||
Current assets | 8,759 | (116 | ) | 8,643 | — | |||||||||||
Other assets | — | — | — | — | ||||||||||||
Counterparty C | ||||||||||||||||
Current assets | 25,685 | (368 | ) | 25,317 | — | |||||||||||
Other assets | — | — | — | — | ||||||||||||
Counterparty D | ||||||||||||||||
Current assets | 8,374 | (65 | ) | 8,309 | — | |||||||||||
Other assets | — | — | — | — | ||||||||||||
Total | $ | 56,255 | $ | (706 | ) | $ | 55,549 | $ | — | |||||||
The following table presents the gross liability balances of the Company’s derivative financial instruments, the amounts subject to master netting arrangements, the amounts that the Company has presented on a net basis, the amounts subject to master netting across different commodity types that were presented on a gross basis and the location of these balances in its unaudited condensed consolidated balance sheet as of December 31, 2014 (in thousands). | ||||||||||||||||
Derivative Instruments | Gross | Gross amounts | Net amounts of | Amounts subject to master netting arrangements presented on a gross basis | ||||||||||||
amounts of | netted in the | liabilities | ||||||||||||||
recognized | condensed | presented in the | ||||||||||||||
liabilities | consolidated | condensed | ||||||||||||||
balance sheet | consolidated | |||||||||||||||
balance sheet | ||||||||||||||||
Counterparty A | ||||||||||||||||
Current liabilities | $ | 157 | $ | (157 | ) | $ | — | $ | — | |||||||
Other liabilities | — | — | — | — | ||||||||||||
Counterparty B | ||||||||||||||||
Current liabilities | 116 | (116 | ) | — | — | |||||||||||
Other liabilities | — | — | — | — | ||||||||||||
Counterparty C | ||||||||||||||||
Current liabilities | 368 | (368 | ) | — | — | |||||||||||
Other liabilities | — | — | — | — | ||||||||||||
Counterparty D | ||||||||||||||||
Current liabilities | 65 | (65 | ) | — | — | |||||||||||
Other liabilities | — | — | — | — | ||||||||||||
Total | $ | 706 | $ | (706 | ) | $ | — | $ | — | |||||||
The following table summarizes the location and aggregate fair value of all derivative financial instruments recorded in the unaudited condensed consolidated statements of operations for the periods presented (in thousands). These derivative financial instruments are not designated as hedging instruments. | ||||||||||||||||
Three Months Ended | ||||||||||||||||
March 31, | ||||||||||||||||
Type of Instrument | Location in Condensed Consolidated Statement of Operations | 2015 | 2014 | |||||||||||||
Derivative Instrument | ||||||||||||||||
Oil | Revenues: Realized gain (loss) on derivatives | $ | 14,433 | $ | (942 | ) | ||||||||||
Natural Gas | Revenues: Realized gain (loss) on derivatives | 3,600 | (589 | ) | ||||||||||||
NGL | Revenues: Realized gain (loss) on derivatives | 471 | (312 | ) | ||||||||||||
Realized gain (loss) on derivatives | 18,504 | (1,843 | ) | |||||||||||||
Oil | Revenues: Unrealized loss on derivatives | (6,464 | ) | (2,050 | ) | |||||||||||
Natural Gas | Revenues: Unrealized loss on derivatives | (1,563 | ) | (1,267 | ) | |||||||||||
NGL | Revenues: Unrealized (loss) gain on derivatives | (530 | ) | 209 | ||||||||||||
Unrealized loss on derivatives | (8,557 | ) | (3,108 | ) | ||||||||||||
Total | $ | 9,947 | $ | (4,951 | ) | |||||||||||
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS | |||||||||||||||
The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is 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 (exit price). Fair value measurements are classified and disclosed in one of the following categories. | ||||||||||||||||
Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Active markets are considered to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. | |||||||||||||||
Level 2 | Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that are valued with industry standard models that consider various inputs including: (i) quoted forward prices for commodities, (ii) time value of money and (iii) current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the derivative instrument and can be derived from observable data or supported by observable levels at which transactions are executed in the marketplace. | |||||||||||||||
Level 3 | Unobservable inputs that are not corroborated by market data. This category is comprised of financial and non-financial assets and liabilities whose fair value is estimated based on internally developed models or methodologies using significant inputs that are generally less readily observable from objective sources. | |||||||||||||||
Financial and non-financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. | ||||||||||||||||
At March 31, 2015 and December 31, 2014, the carrying values reported on the unaudited condensed consolidated balance sheets for accounts receivable, prepaid expenses, accounts payable, accrued liabilities, royalties payable, note payable, advances from joint interest owners, income taxes payable and other current liabilities approximate their fair values due to their short-term maturities. | ||||||||||||||||
At March 31, 2015 and December 31, 2014, the carrying value of borrowings under the Credit Agreement approximates fair value, as it is subject to short-term floating interest rates that reflect market rates available to the Company at the time, and is classified at Level 2. | ||||||||||||||||
The following tables summarize the valuation of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis in accordance with the classifications provided above as of March 31, 2015 and December 31, 2014 (in thousands). | ||||||||||||||||
Fair Value Measurements at | ||||||||||||||||
March 31, 2015 using | ||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets (Liabilities) | ||||||||||||||||
Oil, natural gas and NGL derivatives | $ | — | $ | 47,011 | $ | — | $ | 47,011 | ||||||||
Oil, natural gas and NGL derivatives | — | (19 | ) | — | (19 | ) | ||||||||||
Total | $ | — | $ | 46,992 | $ | — | $ | 46,992 | ||||||||
Fair Value Measurements at | ||||||||||||||||
December 31, 2014 using | ||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets (Liabilities) | ||||||||||||||||
Oil, natural gas and NGL derivatives | $ | — | $ | 55,549 | $ | — | $ | 55,549 | ||||||||
Total | $ | — | $ | 55,549 | $ | — | $ | 55,549 | ||||||||
Additional disclosures related to derivative financial instruments are provided in Note 9. For purposes of fair value measurement, the Company determined that derivative financial instruments (e.g., oil, natural gas and NGL derivatives) should be classified at Level 2. | ||||||||||||||||
The Company accounts for additions and revisions to asset retirement obligations and lease and well equipment inventory when adjusted for impairment at fair value on a non-recurring basis and has determined that these fair value measurements should be classified at Level 3. The following tables summarize the valuation of the Company’s assets and liabilities that were accounted for at fair value on a non-recurring basis for the periods ended March 31, 2015 and December 31, 2014 (in thousands). | ||||||||||||||||
Fair Value Measurements at | ||||||||||||||||
March 31, 2015 using | ||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets (Liabilities) | ||||||||||||||||
Asset retirement obligations | $ | — | $ | — | $ | (1,701 | ) | $ | (1,701 | ) | ||||||
Total | $ | — | $ | — | $ | (1,701 | ) | $ | (1,701 | ) | ||||||
Fair Value Measurements at | ||||||||||||||||
December 31, 2014 using | ||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets (Liabilities) | ||||||||||||||||
Asset retirement obligations | $ | — | $ | — | $ | (3,985 | ) | $ | (3,985 | ) | ||||||
Total | $ | — | $ | — | $ | (3,985 | ) | $ | (3,985 | ) | ||||||
No impairment to any equipment was recorded during the three months ended March 31, 2015 and December 31, 2014. Reconciliations for the Company’s asset retirement obligations at March 31, 2015 are provided in Note 5. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Natural Gas and NGL Processing and Transportation Commitments |
Effective September 1, 2012, the Company entered into a firm five-year natural gas processing and transportation agreement whereby the Company committed to transport the anticipated natural gas production from a significant portion of its Eagle Ford acreage in South Texas through the counterparty’s system for processing at the counterparty’s facilities. The agreement also includes firm transportation of the natural gas liquids extracted at the counterparty’s processing plant downstream for fractionation. After processing, the residue natural gas is purchased by the counterparty at the tailgate of its processing plant and further transported under its natural gas transportation agreements. The arrangement contains fixed processing and liquids transportation and fractionation fees, and the revenue the Company receives varies with the quality of natural gas transported to the processing facilities and the contract period. | |
Under this agreement, if the Company does not meet 80% of the maximum thermal quantity transportation and processing commitments in a contract year, it will be required to pay a deficiency fee per MMBtu of natural gas deficiency. Any quantity in excess of the maximum MMBtu delivered in a contract year can be carried over to the next contract year for purposes of calculating the natural gas deficiency. During certain prior periods, the Company had an immaterial natural gas deficiency, and the counterparty to this agreement waived the deficiency fee. The Company’s remaining aggregate undiscounted minimum commitments under this agreement are $5.3 million at March 31, 2015. The Company paid $1.3 million and $1.2 million in processing and transportation fees under this agreement during the three months ended March 31, 2015 and 2014, respectively. | |
Other Commitments | |
The Company does not own or operate its own drilling rigs, but instead enters into contracts with third parties for such rigs. These contracts establish daily rates for the drilling rigs and the term of the Company’s commitment for the drilling services to be provided, which have typically been for one year or less, although the Company has recently begun to enter into longer-term contracts in order to secure new drilling rigs equipped with the latest technology in plays that were until recently experiencing heavy demand for drilling rigs. The Company would incur a termination obligation if the Company elected to terminate a contract and the drilling contractor were unable to secure work for the contracted drilling rigs or if the drilling contractor were unable to secure replacement work for the contracted drilling rigs at the same daily rates being charged to the Company prior to the end of their respective contract terms. The Company’s undiscounted minimum outstanding aggregate termination obligations under its drilling rig contracts were approximately $45.0 million at March 31, 2015. | |
The Company entered into an agreement with a third party for the engineering, procurement, construction and installation of a natural gas processing plant in Loving County, Texas in 2014. This plant is expected to process a portion of the Company’s natural gas produced from certain of its wells in the Permian Basin, as well as third-party natural gas once the plant is completed. Total commitments under this contract are $17.0 million, and the Company made payments totaling $5.2 million during the three months ended March 31, 2015. The Company made no payments under this contract during the three months ended March 31, 2014. The plant is scheduled to be completed and placed in service in the third quarter of 2015. | |
At March 31, 2015, the Company had agreed to participate in the drilling and completion of various non-operated wells. If all of these wells are drilled and completed, the Company will have undiscounted minimum outstanding aggregate commitments for its participation in these wells of approximately $18.6 million at March 31, 2015, which the Company expects to incur within the next few months. | |
Legal Proceedings | |
The Company is a defendant in several lawsuits encountered in the ordinary course of its business. While the ultimate outcome and impact to the Company cannot be predicted with certainty, in the opinion of management, it is remote that these lawsuits will have a material adverse impact on the Company’s financial condition, results of operations or cash flows. |
Supplemental_Disclosures
Supplemental Disclosures | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Supplemental Disclosures [Abstract] | ||||||||
SUPPLEMENTAL DISCLOSURES | Accrued Liabilities | |||||||
The following table summarizes the Company’s current accrued liabilities at March 31, 2015 and December 31, 2014 (in thousands). | ||||||||
March 31, | 31-Dec-14 | |||||||
2015 | ||||||||
Accrued evaluated and unproved and unevaluated property costs | $ | 96,432 | $ | 86,259 | ||||
Accrued support equipment and facilities costs | 11,302 | 4,290 | ||||||
Accrued stock-based compensation | 325 | — | ||||||
Accrued lease operating expenses | 7,942 | 9,034 | ||||||
Accrued interest on borrowings under Credit Agreement | 292 | 206 | ||||||
Accrued asset retirement obligations | 268 | 311 | ||||||
Accrued partners’ share of joint interest charges | 6,516 | 3,767 | ||||||
Other | 5,768 | 5,635 | ||||||
Total accrued liabilities | $ | 128,845 | $ | 109,502 | ||||
Supplemental Cash Flow Information | ||||||||
The following table provides supplemental disclosures of cash flow information for the three months ended March 31, 2015 and 2014 (in thousands). | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Cash paid for interest expense, net of amounts capitalized | $ | 1,990 | $ | 1,269 | ||||
Asset retirement obligations related to mineral properties | 1,507 | 1,715 | ||||||
Asset retirement obligations related to support equipment and facilities | 32 | 111 | ||||||
Increase in liabilities for oil and natural gas properties capital expenditures | 8,654 | 42,012 | ||||||
Increase in liabilities for support equipment and facilities | 6,865 | 437 | ||||||
Issuance of restricted stock units for Board and advisor services | 142 | 96 | ||||||
Issuance of common stock for advisor services | 4 | 6 | ||||||
Stock-based compensation expense recognized as liability | 263 | 677 | ||||||
Transfer of inventory from oil and natural gas properties | 310 | 107 | ||||||
Subsidiary_Guarantors
Subsidiary Guarantors | 3 Months Ended |
Mar. 31, 2015 | |
Subsidiary Guarantors [Abstract] | |
SUBSIDIARY GUARANTORS | SUBSIDIARY GUARANTORS |
Matador filed a registration statement on Form S-3 with the SEC in 2013, which became effective on May 9, 2013, and a registration statement on Form S-3 with the SEC in 2014, which became effective upon filing on May 22, 2014, registering, in each case, among other securities, senior and subordinated debt securities and guarantees of debt securities by certain subsidiaries of Matador (the “Shelf Guarantor Subsidiaries”). On April 14, 2015, the Company issued the Notes (see Note 6), which are jointly and severally guaranteed by certain subsidiaries of Matador (the “Notes Guarantor Subsidiaries” and, together with the Shelf Guarantor Subsidiaries, the “Guarantor Subsidiaries”) on a full and unconditional basis (except for customary release provisions). As of March 31, 2015, the Guarantor Subsidiaries are 100% owned by Matador, and any subsidiaries of Matador other than the Notes Guarantor Subsidiaries are minor. Matador is a parent holding company and has no independent assets or operations, and there are no significant restrictions on the ability of Matador to obtain funds from the Guarantor Subsidiaries by dividend or loan. As of March 31, 2015, the Company had no outstanding debt securities. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Interim Financial Statements, Basis of Presentation, Consolidation and Significant Estimates | Interim Financial Statements, Basis of Presentation, Consolidation and Significant Estimates |
The unaudited condensed consolidated financial statements of Matador and its wholly-owned and majority-owned subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) but do not include all of the information and footnotes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC (the “Annual Report”). The Company proportionately consolidates certain subsidiaries that are less-than-wholly-owned and the net income and equity to the non-controlling interest in these subsidiaries have been reported separately as required by Accounting Standards Codification (“ASC”) 810. All intercompany accounts and transactions have been eliminated in consolidation. In management’s opinion, these interim unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the Company’s consolidated financial position as of March 31, 2015, consolidated results of operations for the three months ended March 31, 2015 and 2014, consolidated changes in shareholders’ equity for the three months ended March 31, 2015 and consolidated cash flows for the three months ended March 31, 2015 and 2014. Amounts as of December 31, 2014 are derived from the audited consolidated financial statements in the Annual Report. | |
Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end and the results for the interim periods shown in this report are not necessarily indicative of results to be expected for the full year due in part to volatility in oil, natural gas and natural gas liquids prices, global economic and financial market conditions, interest rates, access to sources of liquidity, estimates of reserves, drilling risks, geological risks, transportation restrictions, oil, natural gas and natural gas liquids supply and demand, market competition and interruptions of production. | |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions may also affect 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. The Company’s interim unaudited condensed consolidated financial statements are based on a number of significant estimates, including accruals for oil and natural gas revenues, accrued assets and liabilities primarily related to oil and natural gas operations, stock-based compensation, valuation of derivative instruments and oil and natural gas reserves. The estimates of oil and natural gas reserves quantities and future net cash flows are the basis for the calculations of depletion and impairment of oil and natural gas properties, as well as estimates of asset retirement obligations and certain tax accruals. While the Company believes its estimates are reasonable, changes in facts and assumptions or the discovery of new information may result in revised estimates. Actual results could differ from these estimates. | |
Reclassifications | Reclassifications |
Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations, cash flows or retained earnings. | |
Restricted Cash | Restricted Cash |
Restricted cash represents the cash held by our less-than-wholly-owned subsidiary. By contractual agreement, the cash in this account is not to be commingled with other Company cash and is to be used only to fund the capital expenditures and operations of this less-than-wholly-owned subsidiary, which disposes of limited quantities of Company and third-party salt water. | |
Property and Equipment | Property and Equipment |
The Company uses the full-cost method of accounting for its investments in oil and natural gas properties. Under this method of accounting, all costs associated with the acquisition, exploration and development of oil and natural gas properties and reserves, including unproved and unevaluated property costs, are capitalized as incurred and accumulated in a single cost center representing the Company’s activities, which are undertaken exclusively in the United States. Such costs include lease acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties, costs of drilling both productive and non-productive wells, capitalized interest on qualifying projects and certain general and administrative expenses directly related to acquisition, exploration and development activities, but do not include any costs related to production, selling or general corporate administrative activities. The Company capitalized approximately $1.6 million and $0.9 million of its general and administrative costs for the three months ended March 31, 2015 and 2014, respectively. The Company capitalized approximately $1.0 million and $0.7 million of its interest expense for the three months ended March 31, 2015 and 2014, respectively. | |
The net capitalized costs of oil and natural gas properties are limited to the lower of unamortized costs less related deferred income taxes or the cost center “ceiling.” The cost center ceiling is defined as the sum of: | |
(a) the present value, discounted at 10%, of future net revenues of proved oil and natural gas reserves, reduced by the estimated costs of developing these reserves, plus | |
(b) unproved and unevaluated property costs not being amortized, plus | |
(c) the lower of cost or estimated fair value of unproved and unevaluated properties included in the costs being amortized, if any, less | |
(d) income tax effects related to the properties involved. | |
Any excess of the Company’s net capitalized costs above the cost center ceiling as described above is charged to operations as a full-cost ceiling impairment. The need for a full-cost ceiling impairment is required to be assessed on a quarterly basis. The fair value of the Company’s derivative instruments is not included in the ceiling test computation as the Company does not designate these instruments as hedge instruments for accounting purposes. | |
The estimated present value of after-tax future net cash flows from proved oil and natural gas reserves is highly dependent upon the quantities of proved reserves, the estimation of which requires substantial judgment. The associated commodity prices and applicable discount rate used in these estimates are in accordance with guidelines established by the SEC. Under these guidelines, oil and natural gas reserves are estimated using then-current operating and economic conditions, with no provision for price and cost escalations in future periods except by contractual arrangements. Future net revenues are calculated using prices that represent the arithmetic averages of first-day-of-the-month oil and natural gas prices for the previous 12-month period, and the guidelines further dictate that a 10% discount factor be used to determine the present value of future net revenues. For the period from April 2014 through March 2015, these average oil and natural gas prices were $79.21 per barrel (“Bbl”) and $3.882 per million British thermal units (“MMBtu”), respectively. For the period from April 2013 through March 2014, these average oil and natural gas prices were $94.92 per Bbl and $3.989 per MMBtu, respectively. In estimating the present value of after-tax future net cash flows from proved oil and natural gas reserves, the average oil prices were adjusted by property for quality, transportation and marketing fees and regional price differentials, and the average natural gas prices were adjusted by property for energy content, transportation and marketing fees and regional price differentials. At March 31, 2015 and 2014, the Company’s oil and natural gas reserves estimates were prepared by the Company’s engineering staff in accordance with guidelines established by the SEC and then, for the oil and natural gas reserves estimates at March 31, 2015, audited for their reasonableness and conformance with SEC guidelines by Netherland, Sewell & Associates, Inc., independent reservoir engineers. | |
Using the average commodity prices, as adjusted, to determine the Company’s estimated proved oil and natural gas reserves at March 31, 2015, the Company’s net capitalized costs less related deferred income taxes exceeded the full-cost ceiling by $42.8 million. As a result, the Company recorded an impairment charge of $67.1 million to its net capitalized costs and a deferred income tax credit of $24.3 million related to the full-cost ceiling limitation at March 31, 2015. These charges are reflected in the Company’s unaudited condensed consolidated statement of operations for the three months ended March 31, 2015. Using the average commodity prices, as adjusted, to determine the Company’s estimated proved oil and natural gas reserves at March 31, 2014, the Company’s net capitalized costs less related deferred income taxes did not exceed the full-cost ceiling. As a result, the Company recorded no impairment to its net capitalized costs for the three months ended March 31, 2014. | |
As a non-cash item, the full-cost ceiling impairment impacts the accumulated depletion and the net carrying value of the Company’s assets on its consolidated balance sheet, as well as the corresponding consolidated shareholders’ equity, but it has no impact on the Company’s consolidated net cash flows as reported. Changes in oil and natural gas production rates, oil and natural gas prices, reserves estimates, future development costs and other factors will determine the Company’s actual ceiling test computation and impairment analyses in future periods. | |
Capitalized costs of oil and natural gas properties are amortized using the unit-of-production method based upon production and estimates of proved reserves quantities. Unproved and unevaluated property costs are excluded from the amortization base used to determine depletion. Unproved and unevaluated properties are assessed for possible impairment on a periodic basis based upon changes in operating or economic conditions. This assessment includes consideration of the following factors, among others: the assignment of proved reserves, geological and geophysical evaluations, intent to drill, remaining lease term and drilling activity and results. Upon impairment, the costs of the unproved and unevaluated properties are immediately included in the amortization base. Exploratory dry holes are included in the amortization base immediately upon determination that the well is not productive. | |
Allocation of Purchase Price in Business Combinations | Allocation of Purchase Price in Business Combinations |
As part of the Company’s business strategy, it periodically pursues the acquisition of oil and natural gas properties. The purchase price in a business combination is allocated to the assets acquired and liabilities assumed based on their fair values as of the acquisition date, which may occur many months after the announcement date. Therefore, while the consideration to be paid may be fixed, the fair value of the assets acquired and liabilities assumed is subject to change during the period between the announcement date and the acquisition date. The most significant estimates in the allocation typically relate to the value assigned to proved oil and natural gas reserves and unproved and unevaluated properties. As the allocation of the purchase price is subject to significant estimates and subjective judgments, the accuracy of this assessment is inherently uncertain. | |
Earnings (Loss) Per Common Share | Earnings (Loss) Per Common Share |
The Company reports basic earnings (loss) per common share, which excludes the effect of potentially dilutive securities, and diluted earnings per common share, which includes the effect of all potentially dilutive securities, unless their impact is anti-dilutive. | |
Fair Value Measurements | Fair Value Measurements |
The Company measures and reports certain assets and liabilities on a fair value basis. Fair value is 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 (exit price). The Company follows Financial Accounting Standards Board (“FASB”) guidance establishing a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
Revenue from Contracts with Customers. In May 2014, the FASB issued Accounting Standards Update, or ASU, 2014-09, Revenue from Contracts with Customers (Topic 606), which specifies how and when to recognize revenue. This standard requires expanded disclosures surrounding revenue recognition and is intended to improve, and converge with international standards, the financial reporting requirements for revenue from contracts with customers. ASU 2014-09 will become effective for fiscal years beginning after December 15, 2016, i.e., in the Company’s first fiscal quarter of 2017. The Company is currently evaluating the impact, if any, of the adoption of this ASU on its consolidated financial statements. | |
Interest - Imputation of Interest. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 935-30): Simplifying the Presentation of Debt Issuance Costs, which requires companies that have historically presented debt issuance costs as an asset to present those costs as a direct deduction from the carrying amount of the underlying debt liability. The guidance requires retrospective application in financial statements issued for fiscal years beginning after December 31, 2015 and interim periods within fiscal years beginning after December 15, 2016. The impact of the adoption of this ASU on the Company’s financial statements will be to reduce total assets and total liabilities by the carrying value of unamortized debt issuance costs at the time of adoption. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Accounting Policies [Abstract] | ||||||
Reconciliations of basic and diluted distributed and undistributed earnings (loss) per common share | The following table sets forth the computation of diluted weighted average common shares outstanding for the three months ended March 31, 2015 and 2014 (in thousands). | |||||
Three Months Ended | ||||||
March 31, | ||||||
2015 | 2014 | |||||
Weighted average common shares outstanding | ||||||
Basic | 73,819 | 65,684 | ||||
Dilutive effect of options, restricted stock units and preferred shares | — | 545 | ||||
Diluted weighted average common shares outstanding | 73,819 | 66,229 | ||||
Business_Combination_Tables
Business Combination (Tables) | 3 Months Ended |
Mar. 31, 2015 | |
Business Combinations [Abstract] | |
Initial allocation of consideration given | The preliminary allocation of the consideration given related to this business combination, which is subject to change, was as follows. |
Asset_Retirement_Obligations_T
Asset Retirement Obligations (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Asset Retirement Obligation Disclosure [Abstract] | ||||
Schedule of changes in Company's asset retirement obligations | The following table summarizes the changes in the Company’s asset retirement obligations for the three months ended March 31, 2015 (in thousands). | |||
Beginning asset retirement obligations | $ | 11,951 | ||
Liabilities incurred during period | 2,404 | |||
Liabilities settled during period | (221 | ) | ||
Revisions in estimated cash flows | (703 | ) | ||
Accretion expense | 112 | |||
Ending asset retirement obligations | 13,543 | |||
Less: current asset retirement obligations(1) | (268 | ) | ||
Long-term asset retirement obligations | $ | 13,275 | ||
Debt_Tables
Debt (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Debt Disclosure [Abstract] | |||
Debt Instrument Redemption | On or after April 15, 2018, Matador may redeem all or a portion of the Notes at any time or from time to time at the following redemption prices (expressed as percentages of the principal amount) plus accrued and unpaid interest, if any, to the applicable redemption date, if redeemed during the twelve month period beginning on April 15 of the years indicated. | ||
Year | Redemption Price | ||
2018 | 105.16% | ||
2019 | 103.44% | ||
2020 | 101.72% | ||
2021 and thereafter | 100.00% |
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Open Option Contracts Written [Line Items] | ||||||||||||||||
Summary of gross asset balances of derivative instruments | The following table presents the gross asset balances of the Company’s derivative financial instruments, the amounts subject to master netting arrangements, the amounts that the Company has presented on a net basis, the amounts subject to master netting across different commodity types that were presented on a gross basis and the location of these balances in its unaudited condensed consolidated balance sheet as of December 31, 2014 (in thousands). | |||||||||||||||
Derivative Instruments | Gross | Gross amounts | Net amounts of | Amounts subject to master netting arrangements presented on a gross basis | ||||||||||||
amounts of | netted in the | assets | ||||||||||||||
recognized | condensed | presented in the condensed | ||||||||||||||
assets | consolidated | consolidated | ||||||||||||||
balance sheet | balance sheet | |||||||||||||||
Counterparty A | ||||||||||||||||
Current assets | $ | 13,437 | $ | (157 | ) | $ | 13,280 | $ | — | |||||||
Other assets | — | — | — | — | ||||||||||||
Counterparty B | ||||||||||||||||
Current assets | 8,759 | (116 | ) | 8,643 | — | |||||||||||
Other assets | — | — | — | — | ||||||||||||
Counterparty C | ||||||||||||||||
Current assets | 25,685 | (368 | ) | 25,317 | — | |||||||||||
Other assets | — | — | — | — | ||||||||||||
Counterparty D | ||||||||||||||||
Current assets | 8,374 | (65 | ) | 8,309 | — | |||||||||||
Other assets | — | — | — | — | ||||||||||||
Total | $ | 56,255 | $ | (706 | ) | $ | 55,549 | $ | — | |||||||
The following table presents the gross asset balances of the Company’s derivative financial instruments, the amounts subject to master netting arrangements, the amounts that the Company has presented on a net basis, the amounts subject to master netting across different commodity types that were presented on a gross basis and the location of these balances in its unaudited condensed consolidated balance sheet as of March 31, 2015 (in thousands). | ||||||||||||||||
Derivative Instruments | Gross | Gross amounts | Net amounts of | Amounts subject to master netting arrangements presented on a gross basis | ||||||||||||
amounts of | netted in the condensed | assets | ||||||||||||||
recognized | consolidated | presented in the condensed | ||||||||||||||
assets | balance sheet | consolidated | ||||||||||||||
balance sheet | ||||||||||||||||
Counterparty A | ||||||||||||||||
Current assets | $ | 11,372 | $ | (17 | ) | $ | 11,355 | $ | — | |||||||
Other assets | — | — | — | — | ||||||||||||
Counterparty B | ||||||||||||||||
Current assets | 7,683 | (19 | ) | 7,664 | — | |||||||||||
Other assets | — | — | — | — | ||||||||||||
Counterparty C | ||||||||||||||||
Current assets | 22,186 | (950 | ) | 21,236 | — | |||||||||||
Other assets | 359 | (359 | ) | — | — | |||||||||||
Counterparty D | ||||||||||||||||
Current assets | 6,764 | (8 | ) | 6,756 | — | |||||||||||
Other assets | — | — | — | — | ||||||||||||
Total | $ | 48,364 | $ | (1,353 | ) | $ | 47,011 | $ | — | |||||||
Summary of gross liability balances of derivative instruments | The following table presents the gross liability balances of the Company’s derivative financial instruments, the amounts subject to master netting arrangements, the amounts that the Company has presented on a net basis, the amounts subject to master netting across different commodity types that were presented on a gross basis and the location of these balances in its unaudited condensed consolidated balance sheet as of March 31, 2015 (in thousands). | |||||||||||||||
Derivative Instruments | Gross | Gross amounts | Net amounts of | Amounts subject to master netting arrangements presented on a gross basis | ||||||||||||
amounts of | netted in the condensed | liabilities | ||||||||||||||
recognized | consolidated | presented in the condensed | ||||||||||||||
liabilities | balance sheet | consolidated | ||||||||||||||
balance sheet | ||||||||||||||||
Counterparty A | ||||||||||||||||
Current liabilities | $ | 17 | $ | (17 | ) | $ | — | $ | — | |||||||
Other liabilities | — | — | — | — | ||||||||||||
Counterparty B | ||||||||||||||||
Current liabilities | 19 | (19 | ) | — | — | |||||||||||
Other liabilities | — | — | — | — | ||||||||||||
Counterparty C | ||||||||||||||||
Current liabilities | 950 | (950 | ) | — | — | |||||||||||
Other liabilities | 378 | (359 | ) | 19 | — | |||||||||||
Counterparty D | ||||||||||||||||
Current liabilities | 8 | (8 | ) | — | — | |||||||||||
Other liabilities | — | — | — | — | ||||||||||||
Total | $ | 1,372 | $ | (1,353 | ) | $ | 19 | $ | — | |||||||
The following table presents the gross liability balances of the Company’s derivative financial instruments, the amounts subject to master netting arrangements, the amounts that the Company has presented on a net basis, the amounts subject to master netting across different commodity types that were presented on a gross basis and the location of these balances in its unaudited condensed consolidated balance sheet as of December 31, 2014 (in thousands). | ||||||||||||||||
Derivative Instruments | Gross | Gross amounts | Net amounts of | Amounts subject to master netting arrangements presented on a gross basis | ||||||||||||
amounts of | netted in the | liabilities | ||||||||||||||
recognized | condensed | presented in the | ||||||||||||||
liabilities | consolidated | condensed | ||||||||||||||
balance sheet | consolidated | |||||||||||||||
balance sheet | ||||||||||||||||
Counterparty A | ||||||||||||||||
Current liabilities | $ | 157 | $ | (157 | ) | $ | — | $ | — | |||||||
Other liabilities | — | — | — | — | ||||||||||||
Counterparty B | ||||||||||||||||
Current liabilities | 116 | (116 | ) | — | — | |||||||||||
Other liabilities | — | — | — | — | ||||||||||||
Counterparty C | ||||||||||||||||
Current liabilities | 368 | (368 | ) | — | — | |||||||||||
Other liabilities | — | — | — | — | ||||||||||||
Counterparty D | ||||||||||||||||
Current liabilities | 65 | (65 | ) | — | — | |||||||||||
Other liabilities | — | — | — | — | ||||||||||||
Total | $ | 706 | $ | (706 | ) | $ | — | $ | — | |||||||
Summary of location and aggregate fair value of all derivative financial instruments recorded in the consolidated statements of operations | The following table summarizes the location and aggregate fair value of all derivative financial instruments recorded in the unaudited condensed consolidated statements of operations for the periods presented (in thousands). These derivative financial instruments are not designated as hedging instruments. | |||||||||||||||
Three Months Ended | ||||||||||||||||
March 31, | ||||||||||||||||
Type of Instrument | Location in Condensed Consolidated Statement of Operations | 2015 | 2014 | |||||||||||||
Derivative Instrument | ||||||||||||||||
Oil | Revenues: Realized gain (loss) on derivatives | $ | 14,433 | $ | (942 | ) | ||||||||||
Natural Gas | Revenues: Realized gain (loss) on derivatives | 3,600 | (589 | ) | ||||||||||||
NGL | Revenues: Realized gain (loss) on derivatives | 471 | (312 | ) | ||||||||||||
Realized gain (loss) on derivatives | 18,504 | (1,843 | ) | |||||||||||||
Oil | Revenues: Unrealized loss on derivatives | (6,464 | ) | (2,050 | ) | |||||||||||
Natural Gas | Revenues: Unrealized loss on derivatives | (1,563 | ) | (1,267 | ) | |||||||||||
NGL | Revenues: Unrealized (loss) gain on derivatives | (530 | ) | 209 | ||||||||||||
Unrealized loss on derivatives | (8,557 | ) | (3,108 | ) | ||||||||||||
Total | $ | 9,947 | $ | (4,951 | ) | |||||||||||
Open costless collar contracts | ||||||||||||||||
Open Option Contracts Written [Line Items] | ||||||||||||||||
Summary of contracts for oil and natural gas | The following is a summary of the Company’s open costless collar contracts for oil and natural gas and open swap contracts for NGL at March 31, 2015. | |||||||||||||||
Commodity | Calculation Period | Notional | Price | Price | Fair Value of | |||||||||||
Quantity | Floor | Ceiling | Asset | |||||||||||||
(Bbl/month) | ($/Bbl) | ($/Bbl) | (Liability) | |||||||||||||
(thousands) | ||||||||||||||||
Oil | 04/01/2015 - 12/31/2015 | 20,000 | 80 | 100 | $ | 4,974 | ||||||||||
Oil | 04/01/2015 - 12/31/2015 | 20,000 | 80 | 101 | 4,978 | |||||||||||
Oil | 04/01/2015 - 12/31/2015 | 20,000 | 83 | 96.12 | 5,499 | |||||||||||
Oil | 04/01/2015 - 12/31/2015 | 20,000 | 83 | 97 | 5,499 | |||||||||||
Oil | 04/01/2015 - 12/31/2015 | 20,000 | 85 | 99 | 5,855 | |||||||||||
Oil | 04/01/2015 - 12/31/2015 | 20,000 | 85 | 100 | 5,855 | |||||||||||
Oil | 04/01/2015 - 12/31/2015 | 20,000 | 85 | 105.1 | 5,855 | |||||||||||
Total open oil costless collar contracts | 38,515 | |||||||||||||||
Commodity | Calculation Period | Notional | Price | Price | Fair Value of | |||||||||||
Quantity | Floor | Ceiling | Asset | |||||||||||||
(MMBtu/month) | ($/MMBtu) | ($/MMBtu) | (Liability) | |||||||||||||
(thousands) | ||||||||||||||||
Natural Gas | 04/01/2015 - 10/31/2015 | 150,000 | 2.75 | 3.19 | 154 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 2.75 | 3.05 | 66 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 2.75 | 3.15 | 89 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 2.75 | 3.11 | 80 | |||||||||||
Natural Gas | 04/01/2014 - 12/31/2015 | 300,000 | 2.88 | 3.18 | 490 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 3.75 | 4.36 | 891 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 3.75 | 4.45 | 892 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 3.75 | 4.6 | 895 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 3.75 | 4.65 | 888 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 200,000 | 3.75 | 5.04 | 1,799 | |||||||||||
Natural Gas | 04/01/2015 - 12/31/2015 | 100,000 | 3.75 | 5.34 | 900 | |||||||||||
Natural Gas | 01/01/2016 - 12/31/2016 | 200,000 | 2.75 | 3.5 | (65 | ) | ||||||||||
Total open natural gas costless collar contracts | 7,079 | |||||||||||||||
Open Swap Contracts | ||||||||||||||||
Open Option Contracts Written [Line Items] | ||||||||||||||||
Summary of contracts for oil and natural gas | ||||||||||||||||
Commodity | Calculation Period | Notional Quantity | Fixed Price | Fair Value of Asset (Liability) | ||||||||||||
(Gal/month) | ($/Gal) | (thousands) | ||||||||||||||
Propane | 04/01/2015 - 12/31/2015 | 150,000 | 1 | 626 | ||||||||||||
Propane | 04/01/2015 - 12/31/2015 | 100,000 | 1.03 | 444 | ||||||||||||
Propane | 04/01/2015 - 12/31/2015 | 68,000 | 1.073 | 328 | ||||||||||||
Total open NGL swap contracts | 1,398 | |||||||||||||||
Total open derivative financial instruments | $ | 46,992 | ||||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Summary of the valuation of the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis | The following tables summarize the valuation of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis in accordance with the classifications provided above as of March 31, 2015 and December 31, 2014 (in thousands). | |||||||||||||||
Fair Value Measurements at | ||||||||||||||||
March 31, 2015 using | ||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets (Liabilities) | ||||||||||||||||
Oil, natural gas and NGL derivatives | $ | — | $ | 47,011 | $ | — | $ | 47,011 | ||||||||
Oil, natural gas and NGL derivatives | — | (19 | ) | — | (19 | ) | ||||||||||
Total | $ | — | $ | 46,992 | $ | — | $ | 46,992 | ||||||||
Fair Value Measurements at | ||||||||||||||||
December 31, 2014 using | ||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets (Liabilities) | ||||||||||||||||
Oil, natural gas and NGL derivatives | $ | — | $ | 55,549 | $ | — | $ | 55,549 | ||||||||
Total | $ | — | $ | 55,549 | $ | — | $ | 55,549 | ||||||||
Additions to asset retirement obligations and lease and well equipment inventory at fair value on a non-recurring basis | The following tables summarize the valuation of the Company’s assets and liabilities that were accounted for at fair value on a non-recurring basis for the periods ended March 31, 2015 and December 31, 2014 (in thousands). | |||||||||||||||
Fair Value Measurements at | ||||||||||||||||
March 31, 2015 using | ||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets (Liabilities) | ||||||||||||||||
Asset retirement obligations | $ | — | $ | — | $ | (1,701 | ) | $ | (1,701 | ) | ||||||
Total | $ | — | $ | — | $ | (1,701 | ) | $ | (1,701 | ) | ||||||
Fair Value Measurements at | ||||||||||||||||
December 31, 2014 using | ||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets (Liabilities) | ||||||||||||||||
Asset retirement obligations | $ | — | $ | — | $ | (3,985 | ) | $ | (3,985 | ) | ||||||
Total | $ | — | $ | — | $ | (3,985 | ) | $ | (3,985 | ) | ||||||
Supplemental_Disclosures_Table
Supplemental Disclosures (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Supplemental Disclosures [Abstract] | ||||||||
Summary of current accrued liabilities | The following table summarizes the Company’s current accrued liabilities at March 31, 2015 and December 31, 2014 (in thousands). | |||||||
March 31, | 31-Dec-14 | |||||||
2015 | ||||||||
Accrued evaluated and unproved and unevaluated property costs | $ | 96,432 | $ | 86,259 | ||||
Accrued support equipment and facilities costs | 11,302 | 4,290 | ||||||
Accrued stock-based compensation | 325 | — | ||||||
Accrued lease operating expenses | 7,942 | 9,034 | ||||||
Accrued interest on borrowings under Credit Agreement | 292 | 206 | ||||||
Accrued asset retirement obligations | 268 | 311 | ||||||
Accrued partners’ share of joint interest charges | 6,516 | 3,767 | ||||||
Other | 5,768 | 5,635 | ||||||
Total accrued liabilities | $ | 128,845 | $ | 109,502 | ||||
Supplemental disclosures of cash flow information | The following table provides supplemental disclosures of cash flow information for the three months ended March 31, 2015 and 2014 (in thousands). | |||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2015 | 2014 | |||||||
Cash paid for interest expense, net of amounts capitalized | $ | 1,990 | $ | 1,269 | ||||
Asset retirement obligations related to mineral properties | 1,507 | 1,715 | ||||||
Asset retirement obligations related to support equipment and facilities | 32 | 111 | ||||||
Increase in liabilities for oil and natural gas properties capital expenditures | 8,654 | 42,012 | ||||||
Increase in liabilities for support equipment and facilities | 6,865 | 437 | ||||||
Issuance of restricted stock units for Board and advisor services | 142 | 96 | ||||||
Issuance of common stock for advisor services | 4 | 6 | ||||||
Stock-based compensation expense recognized as liability | 263 | 677 | ||||||
Transfer of inventory from oil and natural gas properties | 310 | 107 | ||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average common shares outstanding for basic earnings (loss) per share | 73,819,000 | 65,684,000 |
Dilutive effect of options, restricted stock units and preferred shares | 0 | 545,000 |
Diluted weighted average common shares outstanding | 73,819,000 | 66,229,000 |
Shares excluded from earnings per share calculations because their effects would be anti-dilutive | 2,500,000 | |
Restricted Stock Units (RSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded from earnings per share calculations because their effects would be anti-dilutive | 200,000 | |
Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded from earnings per share calculations because their effects would be anti-dilutive | 150,000 | |
Restricted Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded from earnings per share calculations because their effects would be anti-dilutive | 800,000 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | |
Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ||||
Capitalized general and administrative costs | $1,600,000 | $900,000 | ||
Capitalized interest expense | 979,000 | 670,000 | ||
Present value discounted percent of future net revenues of proved oil and natural gas reserves | 10.00% | |||
Net capitalized costs less related deferred income taxes exceeded the full-cost ceiling | 42,800,000 | |||
Impairment of Oil and Gas Properties | 67,127,000 | 0 | ||
Deferred income tax credit | $24,300,000 | |||
Oil | ||||
Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ||||
Average oil and natural gas prices | 79.21 | 94.92 | ||
Natural Gas | ||||
Summary of Significant Accounting Policies (Additional Textual) [Abstract] | ||||
Average oil and natural gas prices | 3.882 | 3.989 |
Business_Combination_Details
Business Combination (Details) (USD $) | 3 Months Ended | 0 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Feb. 27, 2015 | |
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Revenues | $72,412,000 | $73,980,000 | |
HEYCO | |||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Oil and natural gas producing properties and undeveloped acreage | 58,600 | ||
Net acreage acquired | 18,200 | ||
Consideration for the business combination | 33,600,000 | ||
Shares of common stock converted for each share of Series A Preferred Stock | 10 | ||
Additional amount paid for customary purchase price adjustments | 3,000,000 | ||
Deferred tax liabilities assumed | 75,966,000 | ||
Liabilities assumed in business combination | 4,600,000 | ||
Transaction costs incurred | 2,200,000 | ||
Revenues | 700,000 | ||
Common Stock | HEYCO | |||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Shares issued in business combination | 3,300,000 | ||
Preferred Stock | HEYCO | |||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Shares issued in business combination | $150,000 |
Business_Combination_Details_1
Business Combination Details 1 (Details) (HEYCO, USD $) | 0 Months Ended | |
In Thousands, unless otherwise specified | Feb. 27, 2015 | Feb. 27, 2015 |
Business Acquisition [Line Items] | ||
Cash | $24,648 | |
Total consideration given | 128,616 | |
Cash acquired | 620 | 620 |
Accounts receivable | 3,536 | 3,536 |
Inventory | 180 | 180 |
Other current assets | 106 | 106 |
Evaluated oil and natural gas properties | 22,044 | 22,044 |
Unproved oil and unevaluated natural gas properties | 194,686 | 194,686 |
Accounts payable | -2,551 | -2,551 |
Accrued liabilities | -11 | -11 |
Current note payable | -11,982 | -11,982 |
Asset retirement obligations | -2,046 | -2,046 |
Deferred tax liabilities assumed | -75,966 | -75,966 |
Net assets acquired | 128,616 | 128,616 |
Preferred Stock | ||
Business Acquisition [Line Items] | ||
Preferred and common shares issued | 32,490 | 32,490 |
Common Stock | ||
Business Acquisition [Line Items] | ||
Preferred and common shares issued | $71,478 | $71,478 |
Equity_Detail
Equity (Detail) (USD $) | 0 Months Ended | ||||||||
Apr. 21, 2015 | Aug. 27, 2015 | Apr. 24, 2015 | Apr. 06, 2015 | Feb. 27, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Apr. 02, 2015 | Apr. 01, 2015 | |
Subsidiary, Sale of Stock [Line Items] | |||||||||
Common stock, shares authorized | 80,000,000 | 80,000,000 | |||||||
Subsequent Event | FOLLOW-ON PUBLIC OFFERING | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Direct offering costs | $1,600,000 | ||||||||
Net proceeds received | 187,100,000 | ||||||||
Net proceeds used to fund a portion of working capital expenditures | 102,100,000 | ||||||||
Scenario, Forecast | Subsequent Event | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Quarterly dividend per share | $1.80 | ||||||||
Revolving Credit Facility | Subsequent Event | FOLLOW-ON PUBLIC OFFERING | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Repayments of outstanding borrowings | 85,000,000 | ||||||||
HEYCO | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Shares of common stock converted for each share of Series A Preferred Stock | 10 | ||||||||
Series A Preferred Stock | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Number of votes | 10 | ||||||||
Common Stock | Subsequent Event | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Preferred stock converted to shares common stock | 1,500,000 | ||||||||
Common stock, shares authorized | 120,000,000 | 80,000,000 | |||||||
Common Stock | Subsequent Event | FOLLOW-ON PUBLIC OFFERING | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Shares of common stock included in offering | 7,000,000 | ||||||||
Common Stock | HEYCO | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Shares issued in business combination | 3,300,000 | ||||||||
Preferred Stock | HEYCO | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Shares issued in business combination | $150,000 |
Asset_Retirement_Obligations_D
Asset Retirement Obligations (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Changes in the Company's asset retirement obligations | ||||
Beginning asset retirement obligations | $11,951 | |||
Liabilities incurred during period | 2,404 | |||
Liabilities settled during period | -221 | |||
Revisions in estimated cash flows | -703 | |||
Accretion expense | 112 | 117 | ||
Ending asset retirement obligations | 13,543 | |||
Less: current asset retirement obligations | -268 | [1] | ||
Long-term asset retirement obligations | $13,275 | $11,640 | ||
[1] | Included in accrued liabilities in the Company’s unaudited condensed consolidated balance sheet at March 31, 2015. |
Debt_Details
Debt (Details) (USD $) | 3 Months Ended | 1 Months Ended | 0 Months Ended | ||||||
Mar. 31, 2015 | Sep. 30, 2012 | Apr. 14, 2015 | Dec. 31, 2014 | Feb. 27, 2015 | 6-May-15 | Apr. 06, 2015 | Sep. 28, 2012 | Sep. 27, 2012 | |
subsidiary | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Credit Agreement, maturity date | 29-Dec-16 | ||||||||
Number of wholly owned subsidiaries | 1 | ||||||||
Borrowings under Credit Agreement | $410,000,000 | $340,000,000 | |||||||
Outstanding letters of credit | 600,000 | ||||||||
Outstanding borrowings bore interest effective rate | 2.90% | ||||||||
Percentage of reserves required to maintain | 100.00% | ||||||||
Debt to EBITDA Ratio | 4.25 | ||||||||
HEYCO | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Notes payable assumed in business combination | 11,982,000 | ||||||||
Subsequent Event | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Borrowing base | 450,000,000 | ||||||||
Amount of conforming borrowing base | 375,000,000 | ||||||||
Outstanding letters of credit | 600,000 | ||||||||
Additional borrowings for working capital requirements | 55,000,000 | ||||||||
Borrowed under credit agreement | 0 | ||||||||
LIBOR rate | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Borrowings interest rate | 1.00% | ||||||||
Minimum | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Commitment fee percentage | 0.38% | ||||||||
Maximum | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Commitment fee percentage | 0.50% | ||||||||
Third Amended Credit Agreement | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Company amended and restated its senior secured revolving credit agreement | September 28, 2012 | ||||||||
Senior secured revolving credit maximum facility | 500,000,000 | 400,000,000 | |||||||
Deferred loan costs | 1,605,000 | ||||||||
Revolving Credit Facility | Senior Unsecured Notes | Subsequent Event | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Repayments of outstanding borrowings | 380,000,000 | ||||||||
Federal Funds Effective Rate | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Borrowings interest rate | 0.50% | ||||||||
Base Rate Loan | Minimum | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Additional interest rate | 0.50% | ||||||||
Base Rate Loan | Maximum | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Additional interest rate | 2.75% | ||||||||
Eurodollar | Minimum | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Additional interest rate | 1.50% | ||||||||
Eurodollar | Maximum | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Additional interest rate | 3.75% | ||||||||
Senior Notes | Senior Notes Due 2023 | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Senior unsecured notes | 0 | ||||||||
Senior Notes | Senior Notes Due 2023 | Subsequent Event | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Senior unsecured notes | 400,000,000 | ||||||||
Borrowings interest rate | 0.50% | ||||||||
Interest rate | 6.88% | ||||||||
Net proceeds from offering | 392,000,000 | ||||||||
Notes maturity date | 15-Apr-23 | ||||||||
Date of redemption | 15-Apr-18 | ||||||||
Percentage of principal amount redeemed | 35.00% | ||||||||
Percentage of aggregate principal amount of Notes outstanding after redemption | 65.00% | ||||||||
Percentage of principal outstanding | 25.00% | ||||||||
Period when payment is due | 30 days | ||||||||
Period for failure to comply with notice | 180 days | ||||||||
Period after notice to comply | 60 days | ||||||||
Aggregate principal amount related to payment defaults or accelerations per debt covenant terms | 25,000,000 | ||||||||
Aggregate failure to pay final judgments (in excess of $25 million) | 25,000,000 | ||||||||
Period for failure to pay final judgments | 60 days | ||||||||
Senior Notes | Senior Notes Due 2023 | Time prior to April 15, 2018 | Subsequent Event | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Percentage of principal amount redeemed | 106.88% | ||||||||
Notes Payable to Banks | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Short-term Debt | 12,000,000 | ||||||||
Notes Payable to Banks | HEYCO | |||||||||
Revolving Credit Agreement (Textual) [Abstract] | |||||||||
Notes payable assumed in business combination | $12,500,000 |
Debt_Schedule_of_Redemption_Pr
Debt (Schedule of Redemption Price) (Details) (Subsequent Event, Senior Notes, Senior Notes Due 2023) | 0 Months Ended |
Apr. 14, 2015 | |
2018 | |
Debt Instrument, Redemption [Line Items] | |
Redemption Price | 105.16% |
2019 | |
Debt Instrument, Redemption [Line Items] | |
Redemption Price | 103.44% |
2020 | |
Debt Instrument, Redemption [Line Items] | |
Redemption Price | 101.72% |
2021 and thereafter | |
Debt Instrument, Redemption [Line Items] | |
Redemption Price | 100.00% |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate percentage | 36.80% | |
Deferred income tax (benefit) provision | ($26,390,000) | $8,261,000 |
Changes in Future Income Tax Expense Estimates on Future Cash Flows Related to Proved Oil and Gas Reserves | $24,300,000 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 1 Months Ended |
In Millions, except Share data, unless otherwise specified | Jan. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Option granted to purchase shares of its common stock, Exercise price one | 607,995 |
Granted option share purchase price, per share Exercise price one | $22.01 |
Grant date fair value, Option grants during period | $8.40 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period of shares | 3 years |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock grants during period | 113,289 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Summary of contracts for oil and natural gas | |
Fair Value of Asset (Liability) | $46,992 |
Open costless collar contracts | Oil | |
Summary of contracts for oil and natural gas | |
Fair Value of Asset (Liability) | 38,515 |
Open costless collar contracts | Oil | Open Oil Collar Contract, 20,000 Notional Amount, 80 Price Floor, 100.00 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 20,000 |
Price Floor | 80 |
Price Ceiling | 100 |
Fair Value of Asset (Liability) | 4,974 |
Open costless collar contracts | Oil | Open Oil Collar Contract, 20,000 Notional Amount, 80 Price Floor, 101.00 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 20,000 |
Price Floor | 80 |
Price Ceiling | 101 |
Fair Value of Asset (Liability) | 4,978 |
Open costless collar contracts | Oil | Open Oil Collar Contract, 20,000 Notional Amount, 83 Price Floor, 96.12 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 20,000 |
Price Floor | 83 |
Price Ceiling | 96.12 |
Fair Value of Asset (Liability) | 5,499 |
Open costless collar contracts | Oil | Open Oil Collar Contract, 20,000 Notional Amount, 83 Price Floor, 97.00 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 20,000 |
Price Floor | 83 |
Price Ceiling | 97 |
Fair Value of Asset (Liability) | 5,499 |
Open costless collar contracts | Oil | Open Oil Collar Contract, 20,000 Notional Amount, 85 Price Floor, 99.00 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 20,000 |
Price Floor | 85 |
Price Ceiling | 99 |
Fair Value of Asset (Liability) | 5,855 |
Open costless collar contracts | Oil | Open Oil Collar Contract, 20,000 Notional Amount, 85 Price Floor, 100.00 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 20,000 |
Price Floor | 85 |
Price Ceiling | 100 |
Fair Value of Asset (Liability) | 5,855 |
Open costless collar contracts | Oil | Open Oil Collar Contract, 20,000 Notional Amount, 85 Price Floor, 105.10 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 20,000 |
Price Floor | 85 |
Price Ceiling | 105 |
Fair Value of Asset (Liability) | 5,855 |
Open costless collar contracts | Natural Gas | |
Summary of contracts for oil and natural gas | |
Fair Value of Asset (Liability) | 7,079 |
Open costless collar contracts | Natural Gas | Open Natural Gas Collar Contract, 150,000 Notional Amount, 2.75 Price Floor, 3.19 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 10/31/2015 |
Notional Quantity | 150,000 |
Price Floor | 2.75 |
Price Ceiling | 3.19 |
Fair Value of Asset (Liability) | 154 |
Open costless collar contracts | Natural Gas | Open Natural Gas Collar Contract, 100,000 Notional Amount, 2.75 Price Floor, 3.05 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 100,000 |
Price Floor | 2.75 |
Price Ceiling | 3.05 |
Fair Value of Asset (Liability) | 66 |
Open costless collar contracts | Natural Gas | Open Natural Gas Collar Contract, 100,000 Notional Amount, 2.75 Price Floor, 3.15 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 100,000 |
Price Floor | 2.75 |
Price Ceiling | 3.15 |
Fair Value of Asset (Liability) | 89 |
Open costless collar contracts | Natural Gas | Open Natural Gas Collar Contract, 100,000 Notional Amount, 2.75 Price Floor, 3.11 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 100,000 |
Price Floor | 2.75 |
Price Ceiling | 3.11 |
Fair Value of Asset (Liability) | 80 |
Open costless collar contracts | Natural Gas | Open Natural Gas Collar Contract, 300,000 Notional Amount, 2.88 Price Floor, 3.18 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2014 - 12/31/2015 |
Notional Quantity | 300,000 |
Price Floor | 2.88 |
Price Ceiling | 3.18 |
Fair Value of Asset (Liability) | 490 |
Open costless collar contracts | Natural Gas | Open Natural Gas Collar Contract, 100,000 Notional Amount, 3.75 Price Floor, 4.36 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 100,000 |
Price Floor | 3.75 |
Price Ceiling | 4.36 |
Fair Value of Asset (Liability) | 891 |
Open costless collar contracts | Natural Gas | Open Natural Gas Collar Contract, 100,000 Notional Amount, 3.75Price Floor, 4.45 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 100,000 |
Price Floor | 3.75 |
Price Ceiling | 4.45 |
Fair Value of Asset (Liability) | 892 |
Open costless collar contracts | Natural Gas | Open Natural Gas Collar Contract, 100,000 Notional Amount, 3.75 Price Floor, 4.60 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 100,000 |
Price Floor | 3.75 |
Price Ceiling | 4.6 |
Fair Value of Asset (Liability) | 895 |
Open costless collar contracts | Natural Gas | Open Natural Gas Collar Contract, 100,000 Notional Amount, 3.75 Price Floor, 4.65 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 100,000 |
Price Floor | 3.75 |
Price Ceiling | 4.65 |
Fair Value of Asset (Liability) | 888 |
Open costless collar contracts | Natural Gas | Open Natural Gas Collar Contract, 200,000 Notional Amount, 3.75 Price Floor, 5.04 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 200,000 |
Price Floor | 3.75 |
Price Ceiling | 5.04 |
Fair Value of Asset (Liability) | 1,799 |
Open costless collar contracts | Natural Gas | Open Natural Gas Collar Contract, 100,000 Notional Amount, 3.75 Price Floor, 5.34 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 100,000 |
Price Floor | 3.75 |
Price Ceiling | 5.34 |
Fair Value of Asset (Liability) | 900 |
Open costless collar contracts | Natural Gas | Open Natural Gas Collar Contract, 200,000 Notional Amount, 2.75 Price Floor, 3.50 Price Ceiling | |
Summary of contracts for oil and natural gas | |
Calculation Period | 01/01/2016 - 12/31/2016 |
Notional Quantity | 200,000 |
Price Floor | 2.75 |
Price Ceiling | 3.5 |
Fair Value of Asset (Liability) | ($65) |
Derivative_Financial_Instrumen3
Derivative Financial Instruments (Details 1) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Open swap contracts for natural gas liquid | |
Fair Value of Asset (Liability) | $46,992 |
NGL | Open Swap Contract | |
Open swap contracts for natural gas liquid | |
Fair Value of Asset (Liability) | 1,398 |
NGL | Open Swap Contract | NGL Propane Swap Contract, 150,000 Notional Amount, 1.000 Fixed Price | |
Open swap contracts for natural gas liquid | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 150,000 |
Fixed Price | 1 |
Fair Value of Asset (Liability) | 626 |
NGL | Open Swap Contract | NGL Propane Swap Contract, 100,000 Notional Amount, 1.030 Fixed Price | |
Open swap contracts for natural gas liquid | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 100,000 |
Fixed Price | 1.03 |
Fair Value of Asset (Liability) | 444 |
NGL | Open Swap Contract | NGL Propane Swap Contract, 68,000 Notional Amount, 1.073 Fixed Price | |
Open swap contracts for natural gas liquid | |
Calculation Period | 04/01/2015 - 12/31/2015 |
Notional Quantity | 68,000 |
Fixed Price | 1.073 |
Fair Value of Asset (Liability) | $328 |
Derivative_Financial_Instrumen4
Derivative Financial Instruments (Details 2) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Summary of gross asset balances of derivative instruments | ||
Gross amounts of recognized assets | $48,364 | $56,255 |
Gross amounts netted in the condensed consolidated balance sheet | -1,353 | -706 |
Net amounts of assets presented in the condensed consolidated balance sheet | 47,011 | 55,549 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty A | Current assets | ||
Summary of gross asset balances of derivative instruments | ||
Gross amounts of recognized assets | 11,372 | 13,437 |
Gross amounts netted in the condensed consolidated balance sheet | -17 | -157 |
Net amounts of assets presented in the condensed consolidated balance sheet | 11,355 | 13,280 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty A | Other assets | ||
Summary of gross asset balances of derivative instruments | ||
Gross amounts of recognized assets | 0 | 0 |
Gross amounts netted in the condensed consolidated balance sheet | 0 | 0 |
Net amounts of assets presented in the condensed consolidated balance sheet | 0 | 0 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty B | Current assets | ||
Summary of gross asset balances of derivative instruments | ||
Gross amounts of recognized assets | 7,683 | 8,759 |
Gross amounts netted in the condensed consolidated balance sheet | -19 | -116 |
Net amounts of assets presented in the condensed consolidated balance sheet | 7,664 | 8,643 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty B | Other assets | ||
Summary of gross asset balances of derivative instruments | ||
Gross amounts of recognized assets | 0 | 0 |
Gross amounts netted in the condensed consolidated balance sheet | 0 | 0 |
Net amounts of assets presented in the condensed consolidated balance sheet | 0 | 0 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty C | Current assets | ||
Summary of gross asset balances of derivative instruments | ||
Gross amounts of recognized assets | 22,186 | 25,685 |
Gross amounts netted in the condensed consolidated balance sheet | -950 | -368 |
Net amounts of assets presented in the condensed consolidated balance sheet | 21,236 | 25,317 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty C | Other assets | ||
Summary of gross asset balances of derivative instruments | ||
Gross amounts of recognized assets | 359 | 0 |
Gross amounts netted in the condensed consolidated balance sheet | -359 | 0 |
Net amounts of assets presented in the condensed consolidated balance sheet | 0 | 0 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty D | Current assets | ||
Summary of gross asset balances of derivative instruments | ||
Gross amounts of recognized assets | 6,764 | 8,374 |
Gross amounts netted in the condensed consolidated balance sheet | -8 | -65 |
Net amounts of assets presented in the condensed consolidated balance sheet | 6,756 | 8,309 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty D | Other assets | ||
Summary of gross asset balances of derivative instruments | ||
Gross amounts of recognized assets | 0 | 0 |
Gross amounts netted in the condensed consolidated balance sheet | 0 | 0 |
Net amounts of assets presented in the condensed consolidated balance sheet | 0 | 0 |
Amounts subject to master netting arrangements presented on a gross basis | $0 | $0 |
Derivative_Financial_Instrumen5
Derivative Financial Instruments (Details 3) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Summary of gross liability balances of derivative instruments | ||
Gross amounts of recognized liabilities | $1,372 | $706 |
Gross amounts netted in the condensed consolidated balance sheet | -1,353 | -706 |
Net amounts of liabilities presented in the condensed consolidated balance sheet | 19 | 0 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty A | Current liabilities | ||
Summary of gross liability balances of derivative instruments | ||
Gross amounts of recognized liabilities | 17 | 157 |
Gross amounts netted in the condensed consolidated balance sheet | -17 | -157 |
Net amounts of liabilities presented in the condensed consolidated balance sheet | 0 | 0 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty A | Other liabilities | ||
Summary of gross liability balances of derivative instruments | ||
Gross amounts of recognized liabilities | 0 | 0 |
Gross amounts netted in the condensed consolidated balance sheet | 0 | 0 |
Net amounts of liabilities presented in the condensed consolidated balance sheet | 0 | 0 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty B | Current liabilities | ||
Summary of gross liability balances of derivative instruments | ||
Gross amounts of recognized liabilities | 19 | 116 |
Gross amounts netted in the condensed consolidated balance sheet | -19 | -116 |
Net amounts of liabilities presented in the condensed consolidated balance sheet | 0 | 0 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty B | Other liabilities | ||
Summary of gross liability balances of derivative instruments | ||
Gross amounts of recognized liabilities | 0 | 0 |
Gross amounts netted in the condensed consolidated balance sheet | 0 | 0 |
Net amounts of liabilities presented in the condensed consolidated balance sheet | 0 | 0 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty C | Current liabilities | ||
Summary of gross liability balances of derivative instruments | ||
Gross amounts of recognized liabilities | 950 | 368 |
Gross amounts netted in the condensed consolidated balance sheet | -950 | -368 |
Net amounts of liabilities presented in the condensed consolidated balance sheet | 0 | 0 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty C | Other liabilities | ||
Summary of gross liability balances of derivative instruments | ||
Gross amounts of recognized liabilities | 378 | 0 |
Gross amounts netted in the condensed consolidated balance sheet | -359 | 0 |
Net amounts of liabilities presented in the condensed consolidated balance sheet | 19 | 0 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty D | Current liabilities | ||
Summary of gross liability balances of derivative instruments | ||
Gross amounts of recognized liabilities | 8 | 65 |
Gross amounts netted in the condensed consolidated balance sheet | -8 | -65 |
Net amounts of liabilities presented in the condensed consolidated balance sheet | 0 | 0 |
Amounts subject to master netting arrangements presented on a gross basis | 0 | 0 |
Counterparty D | Other liabilities | ||
Summary of gross liability balances of derivative instruments | ||
Gross amounts of recognized liabilities | 0 | 0 |
Gross amounts netted in the condensed consolidated balance sheet | 0 | 0 |
Net amounts of liabilities presented in the condensed consolidated balance sheet | 0 | 0 |
Amounts subject to master netting arrangements presented on a gross basis | $0 | $0 |
Derivative_Financial_Instrumen6
Derivative Financial Instruments (Details 4) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Summary of location and aggregate fair value of all derivative financial instruments recorded in the consolidated statements of operations | ||
Realized gain (loss) on derivatives | $18,504 | ($1,843) |
Unrealized loss on derivatives | -8,557 | -3,108 |
Total | 9,947 | -4,951 |
Revenues | ||
Summary of location and aggregate fair value of all derivative financial instruments recorded in the consolidated statements of operations | ||
Realized gain (loss) on derivatives | 18,504 | -1,843 |
Unrealized loss on derivatives | -8,557 | -3,108 |
Oil | Revenues | ||
Summary of location and aggregate fair value of all derivative financial instruments recorded in the consolidated statements of operations | ||
Realized gain (loss) on derivatives | 14,433 | -942 |
Unrealized loss on derivatives | -6,464 | -2,050 |
Natural Gas | Revenues | ||
Summary of location and aggregate fair value of all derivative financial instruments recorded in the consolidated statements of operations | ||
Realized gain (loss) on derivatives | 3,600 | -589 |
Unrealized loss on derivatives | -1,563 | -1,267 |
NGL | Revenues | ||
Summary of location and aggregate fair value of all derivative financial instruments recorded in the consolidated statements of operations | ||
Realized gain (loss) on derivatives | 471 | -312 |
Unrealized loss on derivatives | ($530) | $209 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets (Liabilities) | ||
Oil, natural gas and NGL derivatives | $47,011 | $55,549 |
Oil, natural gas and NGL derivatives | -19 | 0 |
Fair value on a recurring basis | ||
Assets (Liabilities) | ||
Oil, natural gas and NGL derivatives | 47,011 | 55,549 |
Oil, natural gas and NGL derivatives | -19 | |
Total | 46,992 | 55,549 |
Fair value on a recurring basis | Level 1 | ||
Assets (Liabilities) | ||
Oil, natural gas and NGL derivatives | 0 | 0 |
Oil, natural gas and NGL derivatives | 0 | |
Fair value on a recurring basis | Level 2 | ||
Assets (Liabilities) | ||
Oil, natural gas and NGL derivatives | 47,011 | 55,549 |
Oil, natural gas and NGL derivatives | -19 | |
Total | 46,992 | 55,549 |
Fair value on a recurring basis | Level 3 | ||
Assets (Liabilities) | ||
Oil, natural gas and NGL derivatives | 0 | 0 |
Oil, natural gas and NGL derivatives | $0 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 1) (Fair value on a non-recurring basis, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets (Liabilities) | ||
Total | ($1,701) | ($3,985) |
Asset retirement obligations | ||
Assets (Liabilities) | ||
Asset retirement obligations | -1,701 | -3,985 |
Level 1 | Asset retirement obligations | ||
Assets (Liabilities) | ||
Asset retirement obligations | 0 | 0 |
Level 2 | Asset retirement obligations | ||
Assets (Liabilities) | ||
Asset retirement obligations | 0 | 0 |
Level 3 | ||
Assets (Liabilities) | ||
Total | -1,701 | -3,985 |
Level 3 | Asset retirement obligations | ||
Assets (Liabilities) | ||
Asset retirement obligations | ($1,701) | ($3,985) |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Commitments and Contingencies (Textual) [Abstract] | ||
Natural gas processing and transportation agreement | 5 years | |
Minimum delivery commitment to avoid paying gas deficiency fee | 80.00% | |
Undiscounted minimum commitments | $5,300,000 | |
Transportation and processing fee under the agreement | 1,300,000 | 1,200,000 |
Payments made under contract | 0 | |
Drilling Rig Commitments | ||
Commitments and Contingencies (Textual) [Abstract] | ||
Maximum termination outstanding obligations of contracts | 45,000,000 | |
Construction Contracts | ||
Commitments and Contingencies (Textual) [Abstract] | ||
Maximum termination outstanding obligations of contracts | 17,000,000 | |
Payments made under contract | 5,200,000 | |
Outside Operated Drilling Commitments | ||
Commitments and Contingencies (Textual) [Abstract] | ||
Minimum outstanding commitments | $18,600,000 |
Supplemental_Disclosures_Detai
Supplemental Disclosures (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Summary of current accrued liabilities | ||
Total accrued liabilities | $128,845 | $109,502 |
Accrued evaluated and unproved and unevaluated property costs | ||
Summary of current accrued liabilities | ||
Total accrued liabilities | 96,432 | 86,259 |
Accrued support equipment and facilities costs | ||
Summary of current accrued liabilities | ||
Total accrued liabilities | 11,302 | 4,290 |
Accrued stock-based compensation | ||
Summary of current accrued liabilities | ||
Total accrued liabilities | 325 | 0 |
Accrued lease operating expenses | ||
Summary of current accrued liabilities | ||
Total accrued liabilities | 7,942 | 9,034 |
Accrued interest on borrowings under Credit Agreement | ||
Summary of current accrued liabilities | ||
Total accrued liabilities | 292 | 206 |
Accrued asset retirement obligations | ||
Summary of current accrued liabilities | ||
Total accrued liabilities | 268 | 311 |
Accrued partners’ share of joint interest charges | ||
Summary of current accrued liabilities | ||
Total accrued liabilities | 6,516 | 3,767 |
Other | ||
Summary of current accrued liabilities | ||
Total accrued liabilities | $5,768 | $5,635 |
Supplemental_Disclosures_Detai1
Supplemental Disclosures (Details 1) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest expense, net of amounts capitalized | $1,990 | $1,269 |
Asset retirement obligations related to mineral properties | 1,507 | 1,715 |
Asset retirement obligations related to support equipment and facilities | 32 | 111 |
Increase in liabilities for oil and natural gas properties capital expenditures | 8,654 | 42,012 |
Increase in liabilities for support equipment and facilities | 6,865 | 437 |
Issuance of restricted stock units for Board and advisor services | 142 | 96 |
Issuance of common stock for advisor services | 4 | 6 |
Stock-based compensation expense recognized as liability | 263 | 677 |
Transfer of inventory from oil and natural gas properties | $310 | $107 |
Subsidiary_Guarantors_Details
Subsidiary Guarantors (Details) (USD $) | Mar. 31, 2015 | Apr. 14, 2015 |
Subsidiary Guarantors (Textual) [Abstract] | ||
Ownership on subsidiaries | 100.00% | |
Senior Notes | Senior Notes Due 2023 | ||
Subsidiary Guarantors (Textual) [Abstract] | ||
Senior unsecured notes | 0 | |
Senior Notes | Senior Notes Due 2023 | Subsequent Event | ||
Subsidiary Guarantors (Textual) [Abstract] | ||
Senior unsecured notes | $400,000,000 |