Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 5-May-14 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Laredo Petroleum, Inc. | ' |
Entity Central Index Key | '0001528129 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 143,692,185 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Entity Voluntary Filers | 'No | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' |
Consolidated_balance_sheets
Consolidated balance sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $547,519 | $198,153 |
Accounts receivable, net | 80,937 | 77,318 |
Derivatives | 3,946 | 15,806 |
Deferred income taxes | 1,075 | 3,634 |
Other current assets | 17,314 | 12,698 |
Total current assets | 650,791 | 307,609 |
Oil and natural gas properties, full cost method: | ' | ' |
Proved properties | 3,432,647 | 3,276,578 |
Unproved properties not being amortized | 255,892 | 208,085 |
Pipeline and gathering assets | 57,726 | 44,255 |
Other fixed assets | 42,936 | 40,281 |
Total property and equipment | 3,789,201 | 3,569,199 |
Less accumulated depletion, depreciation, amortization and impairment | -1,414,423 | -1,364,875 |
Net property and equipment | 2,374,778 | 2,204,324 |
Derivatives | 564 | 79,726 |
Deferred loan costs, net | 32,398 | 25,933 |
Investment in equity method investee | 22,803 | 5,913 |
Other assets, net | 248 | 255 |
Total assets | 3,081,582 | 2,623,760 |
Current liabilities: | ' | ' |
Accounts payable | 8,001 | 16,002 |
Accrued payable - affiliates | 9,577 | 3,489 |
Undistributed revenue and royalties | 34,072 | 35,124 |
Accrued capital expenditures | 126,950 | 116,328 |
Derivatives | 21,576 | 10,795 |
Other current liabilities | 59,366 | 72,231 |
Total current liabilities | 259,542 | 253,969 |
Long-term debt | 1,501,479 | 1,051,538 |
Derivatives | 5,324 | 2,680 |
Deferred income taxes | 13,841 | 16,293 |
Asset retirement obligations | 22,469 | 21,478 |
Other noncurrent liabilities | 3,326 | 5,546 |
Total liabilities | 1,805,981 | 1,351,504 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock, $0.01 par value, 50,000,000 shares authorized and zero issued at March 31, 2014 and December 31, 2013 | 0 | 0 |
Common stock, $0.01 par value, 450,000,000 shares authorized, and 143,671,983 and 142,671,436 issued, net of treasury, at March 31, 2014 and December 31, 2013, respectively | 1,437 | 1,427 |
Additional paid-in capital | 1,287,357 | 1,283,809 |
Accumulated deficit | -13,193 | -12,980 |
Total stockholders’ equity | 1,275,601 | 1,272,256 |
Total liabilities and stockholders’ equity | $3,081,582 | $2,623,760 |
Consolidated_balance_sheets_Pa
Consolidated balance sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 450,000,000 | 450,000,000 |
Common stock issued | 143,671,983 | 142,671,436 |
Treasury stock, shares | 0 | 0 |
Consolidated_statements_of_ope
Consolidated statements of operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenues: | ' | ' |
Oil and natural gas sales | $173,214 | $163,625 |
Transportation and treating | 96 | 80 |
Total revenues | 173,310 | 163,705 |
Costs and expenses: | ' | ' |
Lease operating expenses | 21,785 | 22,442 |
Production and ad valorem taxes | 12,450 | 11,445 |
Transportation and treating | 594 | 108 |
Transportation and treating - affiliates | 516 | 0 |
Drilling and production | 251 | 674 |
General and administrative | 27,654 | 19,634 |
Accretion of asset retirement obligations | 415 | 394 |
Depletion, depreciation and amortization | 49,607 | 64,503 |
Total costs and expenses | 113,272 | 119,200 |
Operating income | 60,038 | 44,505 |
Realized and unrealized gain (loss): | ' | ' |
Commodity derivatives, net | -31,112 | -16,854 |
Interest rate derivatives, net | 0 | -6 |
Income (loss) from equity method investee | 16 | -64 |
Interest expense | -28,986 | -25,349 |
Interest and other income | 83 | 15 |
Write-off of deferred loan costs | -124 | 0 |
Loss on disposal of assets, net | -21 | 0 |
Non-operating expense, net | -60,144 | -42,258 |
Income (loss) from continuing operations before income taxes | -106 | 2,247 |
Income tax benefit (expense): | ' | ' |
Deferred | -107 | -1,110 |
Total income tax expense | -107 | -1,110 |
Income (loss) from continuing operations | -213 | 1,137 |
Income from discontinued operations, net of tax | 0 | 272 |
Net income (loss) | ($213) | $1,409 |
Basic net income per share: | ' | ' |
Income (loss) from continuing operations, per basic share | $0 | $0.01 |
Income from discontinued operations, net of tax, per basic share | $0 | $0 |
Net income (loss), basic (in dollars per share) | $0 | $0.01 |
Diluted net income per share | ' | ' |
Income (loss) from continuing operations, per diluted share | $0 | $0.01 |
Income from discontinued operations, net of tax, per diluted share | $0 | $0 |
Net income (loss), diluted (in dollars per share) | $0 | $0.01 |
Weighted average common shares outstanding: | ' | ' |
Basic (in shares) | 141,067 | 127,200 |
Diluted (in shares) | 141,067 | 128,851 |
Consolidated_statement_of_stoc
Consolidated statement of stockholders' equity (USD $) | Total | Common Stock | Additional paid-in capital | Treasury Stock (at cost) | Accumulated deficit |
In Thousands, unless otherwise specified | |||||
Balance, beginning of period at Dec. 31, 2013 | $1,272,256 | $1,427 | $1,283,809 | $0 | ($12,980) |
Balance, beginning of period (in shares) at Dec. 31, 2013 | ' | 142,671 | ' | 0 | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Restricted stock awards | ' | 10 | -10 | ' | ' |
Restricted stock awards (in shares) | ' | 1,068 | ' | ' | ' |
Restricted stock forfeitures (in shares) | ' | -21 | ' | ' | ' |
Vested restricted stock exchanged for tax withholding | -3,274 | ' | ' | -3,274 | ' |
Vested restricted stock exchanged for tax withholding (in shares) | ' | ' | ' | 127 | ' |
Retirement of treasury stock | ' | -1 | -3,273 | 3,274 | ' |
Retirement of treasury stock (in shares) | ' | -127 | ' | -127 | ' |
Exercise of employee stock options | 1,585 | 1 | 1,584 | ' | ' |
Exercise of employee stock options (in shares) | ' | 80 | ' | ' | ' |
Stock-based compensation | 5,247 | ' | 5,247 | ' | ' |
Net loss | -213 | ' | ' | ' | -213 |
Balance, end of period (in shares) | ' | 143,671 | ' | 0 | ' |
Balance, end of period at Mar. 31, 2014 | $1,275,601 | $1,437 | $1,287,357 | $0 | ($13,193) |
Consolidated_statements_of_cas
Consolidated statements of cash flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net income (loss) | ($213) | $1,409 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Deferred income tax expense | 107 | 1,263 |
Depletion, depreciation and amortization | 49,607 | 65,130 |
Net stock-based compensation expense | 4,329 | 3,217 |
Accretion of asset retirement obligations | 415 | 394 |
Loss on derivatives, net | 31,112 | 16,860 |
Cash settlements (paid) received for matured derivatives, net | -1,431 | 3,676 |
Cash settlements received for early terminations of derivatives, net | 76,660 | 0 |
Change in net present value of deferred premiums paid for derivatives | 65 | 151 |
Cash premiums paid for derivatives | -1,959 | -2,422 |
Amortization of deferred loan costs | 1,207 | 1,294 |
Write-off of deferred loan costs | 124 | 0 |
Other | -47 | 16 |
Increase in accounts receivable | -3,619 | -5,602 |
Increase in other assets | -4,616 | -2,574 |
Decrease in accounts payable | -8,001 | -18,523 |
Increase (decrease) in undistributed revenues and royalties | -1,052 | 3,524 |
Decrease in accrued compensation and benefits | -10,564 | -4,221 |
Decrease in other accrued liabilities | -4,329 | -792 |
Increase in other noncurrent liabilities | 224 | 162 |
Increase in fair value of performance unit awards | 98 | 98 |
Net cash provided by operating activities | 128,117 | 63,060 |
Capital expenditures: | ' | ' |
Acquisition of mineral interests | -7,305 | 0 |
Investment in equity method investee | -11,300 | -938 |
Oil and natural gas properties | -187,040 | -187,813 |
Pipeline and gathering assets | -10,520 | -4,046 |
Other fixed assets | -3,369 | -6,588 |
Proceeds from dispositions of capital assets, net of costs | 268 | 0 |
Net cash used in investing activities | -219,266 | -199,385 |
Cash flows from financing activities: | ' | ' |
Borrowings on revolving credit facilities | 0 | 135,000 |
Issuance of January 2022 Notes | 450,000 | 0 |
Purchase of treasury stock | -3,274 | -875 |
Proceeds from exercise of employee stock options | 1,585 | 0 |
Payments for loan costs | -7,796 | 0 |
Net cash provided by financing activities | 440,515 | 134,125 |
Net increase (decrease) in cash and cash equivalents | 349,366 | -2,200 |
Cash and cash equivalents at beginning of period | 198,153 | 33,224 |
Cash and cash equivalents at end of period | $547,519 | $31,024 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization | ' |
Organization | |
Laredo Petroleum, Inc. ("Laredo" and formerly known as Laredo Petroleum Holdings, Inc.), together with its subsidiary, Laredo Midstream Services, LLC ("Laredo Midstream"), is an independent energy company focused on the exploration, development and acquisition of oil and natural gas properties primarily in the Permian Basin in West Texas. In these notes, the "Company," (i) when used in the present tense, prospectively or as of December 31, 2013, refers to Laredo and Laredo Midstream collectively; (ii) when used for historical periods prior to December 31, 2013, refers to Laredo and its subsidiaries, collectively. All amounts, dollars and percentages presented in these unaudited consolidated financial statements and the related notes are rounded and therefore approximate. |
Basis_of_presentation_and_sign
Basis of presentation and significant accounting policies | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Basis of presentation and significant accounting policies | ' | ||||||||
Basis of presentation and significant accounting policies | |||||||||
1. Basis of presentation | |||||||||
The accompanying unaudited consolidated financial statements were derived from the historical accounting records of the Company and reflect the historical financial position, results of operations and cash flows for the periods described herein. The Company uses the equity method of accounting to record its net interests when the Company holds 20% to 50% of the voting rights and/or has the ability to exercise significant influence but does not control the entity. Under the equity method, the Company's proportionate share of net income (loss) is included in the unaudited consolidated statements of operations. See Note L for additional discussion of the Company's equity method investment. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). All material intercompany transactions and account balances have been eliminated in the consolidation of accounts. The Company operates oil and natural gas properties as one business segment, which explores for, develops and produces oil and natural gas. Unless otherwise indicated, the information in these notes relate to the Company’s continuing operations. | |||||||||
The accompanying consolidated financial statements have not been audited by the Company’s independent registered public accounting firm, except that the consolidated balance sheet at December 31, 2013 is derived from audited consolidated financial statements. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all necessary adjustments to present fairly the Company’s financial position as of March 31, 2014 and the results of operations and cash flows for the three months ended March 31, 2014 and 2013. | |||||||||
Certain disclosures have been condensed or omitted from these unaudited consolidated financial statements. Accordingly, these unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Laredo’s Annual Report on Form 10-K for the year ended December 31, 2013 (the "2013 Annual Report"). | |||||||||
2. Use of estimates in the preparation of interim unaudited consolidated financial statements | |||||||||
The preparation of the accompanying unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates are reasonable, actual results could differ from these estimates. The interim results reflected in the unaudited consolidated financial statements are not necessarily indicative of the results that may be expected for other interim periods or for the full year. | |||||||||
Significant estimates include, but are not limited to, (i) estimates of the Company’s reserves of oil and natural gas, (ii) future cash flows from oil and natural gas properties, (iii) depletion, depreciation and amortization, (iv) asset retirement obligations, (v) stock-based compensation, (vi) deferred income taxes, (vii) fair value of assets acquired and liabilities assumed in an acquisition and (viii) fair values of commodity derivatives, interest rate derivatives, commodity deferred premiums, performance share awards and performance unit awards. As fair value is a market-based measurement, it is determined based on the assumptions that market participants would use. These estimates and assumptions are based on management’s best judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Such estimates and assumptions are adjusted when facts and circumstances dictate. Illiquid credit markets and volatile equity and energy markets have combined to increase the uncertainty inherent in such estimates and assumptions. Management believes its estimates and assumptions to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual values and results could differ from these estimates. Any changes in estimates resulting from future changes in the economic environment will be reflected in the financial statements in future periods. | |||||||||
3. Reclassifications | |||||||||
Certain amounts in the accompanying unaudited consolidated financial statements have been reclassified to conform to the 2014 presentation. These reclassifications had no impact to previously reported net income or losses, total stockholders' equity or cash flows. | |||||||||
4. Treasury stock | |||||||||
The Company acquires treasury stock, which is recorded at cost, to satisfy tax withholding obligations for Laredo's employees that arise upon the lapse of restrictions on restricted stock or for other reasons. Upon acquisition, this treasury stock is retired. | |||||||||
5. Accounts receivable | |||||||||
The Company sells oil and natural gas to various customers and participates with other parties in the drilling, completion and operation of oil and natural gas wells. Joint interest and oil and natural gas sales receivables related to these operations are generally unsecured. Accounts receivable for joint interest billings are recorded as amounts billed to customers less an allowance for doubtful accounts. | |||||||||
Amounts are considered past due after 30 days. The Company determines joint interest operations accounts receivable allowances based on management’s assessment of the creditworthiness of the joint interest owners. Additionally, as the operator in the majority of its wells, the Company has the ability to realize the receivables through netting of anticipated future production revenues. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses, current receivables aging, and existing industry and economic data. The Company reviews its allowance for doubtful accounts quarterly. Past due balances greater than 90 days and over a specified amount are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is remote. | |||||||||
Accounts receivable consist of the following components for the periods presented: | |||||||||
(in thousands) | 31-Mar-14 | 31-Dec-13 | |||||||
Oil and natural gas sales | $ | 58,086 | $ | 57,647 | |||||
Joint operations, net(1) | 20,773 | 16,629 | |||||||
Other | 2,078 | 3,042 | |||||||
Total | $ | 80,937 | $ | 77,318 | |||||
______________________________________________________________________________ | |||||||||
-1 | Accounts receivable for joint operations are presented net of an allowance for doubtful accounts of $0.7 million as of each of March 31, 2014 and December 31, 2013. | ||||||||
6. Derivatives | |||||||||
The Company uses derivatives to reduce exposure to fluctuations in the prices of oil and natural gas. By removing a significant portion of the price volatility associated with future production, the Company expects to mitigate, but not eliminate, the potential effects of variability in cash flows from operations due to fluctuations in commodity prices. These transactions are primarily in the form of collars, swaps, puts and basis swaps. In addition, in prior periods the Company entered into derivative contracts in the form of interest rate derivatives to minimize the effects of fluctuations in interest rates. | |||||||||
Derivatives are recorded at fair value and are included on the unaudited consolidated balance sheets as assets or liabilities. The Company netted the fair value of derivatives by counterparty in the accompanying unaudited consolidated balance sheets where the right of offset exists. The Company determines the fair value of its derivatives by utilizing pricing models for substantially similar instruments. Inputs to the pricing models include publicly available prices and forward price curves generated from a compilation of data gathered from third parties. | |||||||||
The Company’s derivatives were not designated as hedges for accounting purposes for any of the periods presented. Accordingly, the changes in fair value are recognized in the unaudited consolidated statements of operations in the period of change. Gains and losses on derivatives are included in cash flows from operating activities (see Note G). | |||||||||
7. Property and equipment | |||||||||
The following table sets forth the Company’s property and equipment for the periods presented: | |||||||||
(in thousands) | 31-Mar-14 | 31-Dec-13 | |||||||
Proved oil and natural gas properties | $ | 3,432,647 | $ | 3,276,578 | |||||
Less accumulated depletion and impairment | 1,397,058 | 1,349,315 | |||||||
Proved oil and natural gas properties, net | 2,035,589 | 1,927,263 | |||||||
Unproved properties not being amortized | 255,892 | 208,085 | |||||||
Pipeline and gathering assets | 57,726 | 44,255 | |||||||
Less accumulated depreciation | 3,343 | 2,757 | |||||||
Pipeline and gas gathering assets, net | 54,383 | 41,498 | |||||||
Other fixed assets | 42,936 | 40,281 | |||||||
Less accumulated depreciation and amortization | 14,022 | 12,803 | |||||||
Other fixed assets, net | 28,914 | 27,478 | |||||||
Total property and equipment, net | $ | 2,374,778 | $ | 2,204,324 | |||||
For the three months ended March 31, 2014 and 2013, depletion expense was $19.61 per barrel of oil equivalent ("BOE") and $20.25 per BOE, respectively. | |||||||||
8. Deferred loan costs | |||||||||
Loan origination fees, which are stated at cost, net of amortization, are amortized over the life of the respective debt agreements utilizing the effective interest and straight-line methods. The Company capitalized $7.8 million of deferred loan costs during the three months ended March 31, 2014 as a result of the issuance of the January 2022 Notes (as defined below). No deferred loan costs were capitalized during the three months ended March 31, 2013. The Company had total deferred loan costs of $32.4 million and $25.9 million, net of accumulated amortization of $15.4 million and $14.2 million, as of March 31, 2014 and December 31, 2013, respectively. | |||||||||
As a result of changes in the borrowing base of the Senior Secured Credit Facility (as defined below) due to the issuance of the January 2022 Notes, the Company wrote-off approximately $0.1 million in deferred loan costs during the three months ended March 31, 2014. No deferred loan costs were written-off during the three months ended March 31, 2013. | |||||||||
Future amortization expense of deferred loan costs as of March 31, 2014 is as follows: | |||||||||
(in thousands) | |||||||||
Remaining 2014 | $ | 3,927 | |||||||
2015 | 5,289 | ||||||||
2016 | 5,355 | ||||||||
2017 | 5,427 | ||||||||
2018 | 5,219 | ||||||||
Thereafter | 7,181 | ||||||||
Total | $ | 32,398 | |||||||
9. Other current liabilities | |||||||||
Other current liabilities consist of the following components for the periods presented: | |||||||||
(in thousands) | 31-Mar-14 | 31-Dec-13 | |||||||
Accrued interest payable | $ | 26,893 | $ | 25,885 | |||||
Lease operating expense payable | 12,159 | 10,637 | |||||||
Accrued compensation and benefits | 6,147 | 16,711 | |||||||
Performance unit awards | 2,487 | — | |||||||
Prepaid drilling liability | 802 | 1,393 | |||||||
Asset retirement obligations | 264 | 265 | |||||||
Other accrued liabilities | 10,614 | 17,340 | |||||||
Total other current liabilities | $ | 59,366 | $ | 72,231 | |||||
10. Asset retirement obligations | |||||||||
Asset retirement obligations associated with the retirement of tangible long-lived assets are recognized as a liability in the period in which they are incurred and become determinable. The associated asset retirement costs are part of the carrying amount of the long-lived asset. Subsequently, the asset retirement cost included in the carrying amount of the related long-lived asset is charged to expense through the depletion of the asset. Changes in the liability due to the passage of time are recognized as an increase in the carrying amount of the liability and as corresponding accretion expense. | |||||||||
The fair value of additions to the asset retirement obligation liability is measured using valuation techniques consistent with the income approach, which converts future cash flows into a single discounted amount. Significant inputs to the valuation include: (i) estimated plug and abandonment cost per well based on Company experience; (ii) estimated remaining life per well based on the reserve life per well; (iii) future inflation factors; and (iv) the Company's average credit adjusted risk free rate. Inherent in the fair value calculation of asset retirement obligations are numerous assumptions and judgments including, in addition to those noted above, the ultimate settlement of these amounts, the ultimate timing of such settlement, and changes in legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the fair value of the existing asset retirement obligation liability, a corresponding adjustment will be made to the asset balance. | |||||||||
The Company is obligated by contractual and regulatory requirements to remove certain pipeline and gas gathering assets and perform other remediation of the sites where such pipeline and gas gathering assets are located upon the retirement of those assets. However, the fair value of the asset retirement obligation cannot currently be reasonably estimated because the settlement dates are indeterminate. The Company will record an asset retirement obligation for pipeline and gas gathering assets in the periods in which settlement dates become reasonably determinable. | |||||||||
The following reconciles the Company’s asset retirement obligation liability for continuing and discontinued operations for the periods presented: | |||||||||
(in thousands) | Three months ended March 31, 2014 | Year ended December 31, 2013 | |||||||
Liability at beginning of period | $ | 21,743 | $ | 21,505 | |||||
Liabilities added due to acquisitions, drilling and other | 576 | 2,709 | |||||||
Accretion expense | 415 | 1,475 | |||||||
Liabilities settled upon plugging and abandonment | (1 | ) | (226 | ) | |||||
Liabilities removed due to Anadarko Basin Sale | — | (7,801 | ) | ||||||
Revision of estimates | — | 4,081 | |||||||
Liability at end of period | $ | 22,733 | $ | 21,743 | |||||
11. Fair value measurements | |||||||||
The carrying amounts reported in the unaudited consolidated balance sheets for cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable, undistributed revenue and royalties and other accrued liabilities approximate their fair values. See Note D for fair value disclosures related to the Company’s debt obligations. The Company carries its derivatives at fair value. See Note G and Note H for details regarding the fair value of the Company’s derivatives. | |||||||||
12. Compensation awards | |||||||||
For stock-based compensation awards, compensation expense is recognized in "General and administrative" in the Company’s unaudited consolidated statements of operations over the awards’ vesting periods based on their grant date fair value. The Company utilizes the closing stock price on the date of grant, less an expected forfeiture rate, to determine the fair value of service vesting restricted stock awards and a Black-Scholes pricing model to determine the fair values of service vesting restricted stock option awards. The Company utilizes a Monte Carlo simulation prepared by an independent third party to determine the fair values of the performance share awards and performance unit awards. During the three months ended March 31, 2014, the Company began capitalizing a portion of stock-based compensation for employees who are directly involved in the acquisition, exploration and development of our properties into the full-cost pool. Capitalized stock-based compensation is included as an addition to "Oil and natural gas properties" in the unaudited consolidated balance sheets. See Note E for further discussion of the restricted stock awards, restricted stock option awards, performance share awards and performance unit awards. | |||||||||
13. Environmental | |||||||||
The Company is subject to extensive federal, state and local environmental laws and regulations. These laws, among other things, regulate the discharge of materials into the environment and may require the Company to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites. All environmental expenditures, including expenditures that relate to an existing condition caused by past operations and that have no future economic benefits, are expensed in the period in which they occur. Liabilities for expenditures of a non-capital nature are recorded when environmental assessment or remediation is probable and the costs can be reasonably estimated. Such liabilities are generally undiscounted unless the timing of cash payments is fixed and readily determinable. Management believes no materially significant liabilities of this nature existed as of March 31, 2014 or December 31, 2013. | |||||||||
14. Supplemental cash flow disclosure information and non-cash investing and financing information | |||||||||
The following table summarizes the supplemental disclosure of cash flow information for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Cash paid for interest, net of $0 and $95 of capitalized interest, respectively | $ | 26,849 | $ | 27,649 | |||||
The following presents the supplemental disclosure of non-cash investing and financing information for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Change in accrued capital expenditures | $ | 10,622 | $ | (22,680 | ) | ||||
Capitalized asset retirement cost | $ | 576 | $ | 615 | |||||
Capitalized stock-based compensation | $ | 918 | $ | — | |||||
Acquisition_and_divestiture_No
Acquisition and divestiture (Notes) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Acquisition and Divestitures [Abstract] | ' | ||||
Acquisition and divestiture | ' | ||||
Acquisition and divestiture | |||||
1. 2014 acquisition of mineral interests | |||||
On February 25, 2014, the Company completed the acquisition of the mineral interests underlying 278 net acres in Glasscock County, Texas in the Permian Basin for $7.3 million. The mineral interests entitle the Company to receive royalty interest on all production from this acreage with no additional future capital or operating expense required. As such, the acquisition was accounted for as an acquisition of assets. | |||||
2. 2013 divestiture of Anadarko assets | |||||
On August 1, 2013, the Company completed the sale of its oil and natural gas properties, associated pipeline assets and various other related property and equipment in the Anadarko Granite Wash, Central Texas Panhandle and the Eastern Anadarko Basin (the "Anadarko Basin Sale") to certain affiliates of EnerVest, Ltd. (collectively, "EnerVest") and certain other third parties in connection with the exercise of such third parties' preferential rights associated with the oil and gas assets. The purchase price consisted of $400.0 million from EnerVest and $38.0 million from the third parties. $388.0 million of the purchase price, excluding closing adjustments, was allocated to oil and natural gas properties pursuant to the rules governing full cost accounting. After transaction costs and adjustments at closing reflecting an economic effective date of April 1, 2013, the net proceeds were $428.3 million, net of working capital adjustments. | |||||
Effective at closing, the operations and cash flows of these properties were eliminated from the ongoing operations of the Company and the Company does not have continuing involvement in the operations of these properties. The results of operations of the oil and natural gas properties that are a component of the Anadarko Basin Sale are not presented as discontinued operations pursuant to the rules governing full cost accounting for oil and gas properties. | |||||
The following table presents revenues and operating expenses of the oil and natural gas properties that are a component of the Anadarko Basin Sale included in the accompanying unaudited consolidated statements of operations for the period presented: | |||||
(in thousands) | Three months ended March 31, 2013 | ||||
Revenues | $ | 23,602 | |||
Expenses(1) | 20,919 | ||||
_________________________________________________________________________ | |||||
-1 | Expenses include lease operating expense, production and ad valorem tax expense, accretion expense and depletion, depreciation and amortization expense. | ||||
For the three months ended March 31, 2013, the results of operations of the associated pipeline assets and various other related property and equipment ("Pipeline Assets") are presented as results of discontinued operations, net of tax in these unaudited consolidated financial statements. As a result of the sale of the Pipeline Assets, a gain of $3.2 million was recognized in the consolidated statements of operations for the year ended December 31, 2013 in the line item "Loss on disposal of assets, net." | |||||
The following represents operating results from discontinued operations for the period presented: | |||||
(in thousands) | Three months ended March 31, 2013 | ||||
Revenues: | |||||
Transportation and treating | $ | 1,832 | |||
Total revenues from discontinued operations | 1,832 | ||||
Cost and expenses: | |||||
Transportation and treating | 536 | ||||
Drilling and production | 244 | ||||
Depletion, depreciation and amortization | 627 | ||||
Total costs and expenses from discontinued operations | 1,407 | ||||
Income from discontinued operations before income tax | 425 | ||||
Income tax expense | (153 | ) | |||
Income from discontinued operations | $ | 272 | |||
Debt
Debt | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||
Debt | ' | ||||||||||||||||
Debt | |||||||||||||||||
1. Interest expense | |||||||||||||||||
The following amounts have been incurred and charged to interest expense for the periods presented: | |||||||||||||||||
Three months ended March 31, | |||||||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||||||
Cash payments for interest | $ | 26,849 | $ | 27,744 | |||||||||||||
Amortization of deferred loan costs and other adjustments | 1,129 | 1,304 | |||||||||||||||
Change in accrued interest | 1,008 | (3,604 | ) | ||||||||||||||
Interest costs incurred | 28,986 | 25,444 | |||||||||||||||
Less capitalized interest | — | (95 | ) | ||||||||||||||
Total interest expense | $ | 28,986 | $ | 25,349 | |||||||||||||
2. January 2022 Notes | |||||||||||||||||
On January 23, 2014, the Company completed an offering of $450.0 million in aggregate principal amount of 5 5/8% senior unsecured notes due 2022 (the "January 2022 Notes"), and entered into an Indenture (the "Indenture") among Laredo, Laredo Midstream as guarantor and Wells Fargo Bank, National Association, as trustee. The January 2022 Notes will mature on January 15, 2022 with interest accruing at a rate of 5 5/8% per annum and payable semi-annually in cash in arrears on January 15 and July 15 of each year, commencing July 15, 2014. The January 2022 Notes are guaranteed on a senior unsecured basis by Laredo Midstream and certain of the Company’s future restricted subsidiaries. | |||||||||||||||||
The January 2022 Notes were issued pursuant to the Indenture in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The January 2022 Notes were offered and sold only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to persons outside the United States pursuant to Regulation S under the Securities Act. The Company received net proceeds of $442.2 million from the offering, after deducting the initial purchasers’ discount and the estimated outstanding offering expenses. The Company will use the net proceeds of the offering for general working capital purposes. | |||||||||||||||||
The Company may redeem, at its option, all or part of the January 2022 Notes at any time on and after January 15, 2017, at the applicable redemption price plus accrued and unpaid interest to the date of redemption. In addition, the Company may redeem, at its option, all or part of the January 2022 Notes at any time prior to January 15, 2017 at a redemption price equal to 100% of the principal amount of the January 2022 Notes redeemed plus the applicable premium and accrued and unpaid interest and additional interest, if any, to the date of redemption. Further, before January 15, 2017, the Company may on one or more occasions redeem up to 35% of the aggregate principal amount of the January 2022 Notes in an amount not exceeding the net proceeds from one or more private or public equity offerings at a redemption price of 105.625% of the principal amount of the January 2022 Notes, plus accrued and unpaid interest to the date of redemption, if at least 65% of the aggregate principal amount of the January 2022 Notes remains outstanding immediately after such redemption and the redemption occurs within 180 days of the closing date of each such equity offering. If a change of control occurs prior to January 15, 2015, the Company may redeem all, but not less than all, of the January 2022 Notes at a redemption price equal to 110% of the principal amount of the January 2022 Notes plus any accrued and unpaid interest to the date of redemption. | |||||||||||||||||
In connection with the closing of the offering of the January 2022 Notes, the Company entered into a registration rights agreement with the several initial purchasers named in the registration rights agreement, pursuant to which the Company filed a registration statement with the Securities Exchange Commission ("SEC") that became effective with respect to an offer to exchange the January 2022 Notes for substantially identical notes (other than with respect to restrictions on transfer or any increase in annual interest rate) that are registered under the Securities Act. The offer to exchange the January 2022 Notes for substantially identical notes registered under the Securities Act commenced on April 22, 2014 and is scheduled to expire on May 21, 2014, unless extended. There is no guarantee the Company will be successful in exchanging any or all of the January 2022 Notes. | |||||||||||||||||
3. May 2022 Notes | |||||||||||||||||
On April 27, 2012, the Company completed an offering of $500.0 million in aggregate principal amount of 7 3/8% senior unsecured notes due 2022 (the "May 2022 Notes"). The May 2022 Notes will mature on May 1, 2022 and bear an interest rate of 7 3/8% per annum, payable semi-annually, in cash in arrears on May 1 and November 1 of each year, commencing November 1, 2012. The May 2022 Notes are fully and unconditionally guaranteed on a senior unsecured basis by Laredo Midstream. | |||||||||||||||||
4. 2019 Notes | |||||||||||||||||
On January 20, 2011, the Company completed an offering of $350.0 million 9 1/2% senior unsecured notes due 2019 (the "January Notes") and on October 19, 2011, the Company completed an offering of an additional $200.0 million 9 1/2% senior unsecured notes due 2019 (the "October Notes" and together with the January Notes, the "2019 Notes"). The 2019 Notes will mature on February 15, 2019 and bear an interest rate of 9 1/2% per annum, payable semi-annually, in cash in arrears on February 15 and August 15 of each year. The 2019 Notes are fully and unconditionally guaranteed on a senior unsecured basis by Laredo Midstream. | |||||||||||||||||
5. Senior Secured Credit Facility | |||||||||||||||||
As of March 31, 2014, the Fourth Amended and Restated Credit Agreement (as amended, the "Senior Secured Credit Facility") had a maturity date of November 4, 2018 and a borrowing base and aggregate elected commitment of $812.5 million with no amounts outstanding. It contains both financial and non-financial covenants, all of which the Company was in compliance with as of March 31, 2014. Laredo is required to pay an annual commitment fee on the unused portion of the financial institutions' commitment of 0.375% to 0.5%, based on the ratio of outstanding revolving credit to the total commitment under the Senior Secured Credit Facility. Additionally, the Senior Secured Credit Facility provides for the issuance of letters of credit, limited to the lesser of total capacity or $20.0 million. | |||||||||||||||||
Subsequent to March 31, 2014, the Company entered into an amendment to the Senior Secured Credit Facility. See Note O.1 for additional information. | |||||||||||||||||
6. Fair value of debt | |||||||||||||||||
The Company has not elected to account for its debt instruments at fair value. The following table presents the carrying amount and fair value of the Company’s debt instruments for the periods presented: | |||||||||||||||||
31-Mar-14 | December 31, 2013 | ||||||||||||||||
(in thousands) | Carrying | Fair | Carrying | Fair | |||||||||||||
value | value | value | value | ||||||||||||||
2019 Notes(1) | $ | 551,479 | $ | 612,278 | $ | 551,538 | $ | 615,313 | |||||||||
January 2022 Notes | 450,000 | 456,471 | — | — | |||||||||||||
May 2022 Notes | 500,000 | 556,250 | 500,000 | 549,375 | |||||||||||||
Total value of debt | $ | 1,501,479 | $ | 1,624,999 | $ | 1,051,538 | $ | 1,164,688 | |||||||||
______________________________________________________________________________ | |||||||||||||||||
-1 | The carrying value of the 2019 Notes includes the October Notes unamortized bond premium of $1.5 million at each of March 31, 2014 and December 31, 2013. | ||||||||||||||||
The fair values of the debt outstanding on the 2019 Notes, the January 2022 Notes and the May 2022 Notes were determined using the March 31, 2014 and December 31, 2013 quoted market price (Level 1), respectively. See Note H for information about fair value hierarchy levels. |
Employee_compensation
Employee compensation | 3 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||
Employee Compensation | ' | ||||||||||
Employee compensation | |||||||||||
The Company has a Long-Term Incentive Plan (the "LTIP"), which provides for the granting of incentive awards in the form of restricted stock awards, restricted stock options awards and other awards. The LTIP provides for the issuance of 10.0 million shares. | |||||||||||
The Company recognizes the fair value of stock-based compensation to employees and directors over the requisite service period as a charge against earnings, net of amounts capitalized. The Company's stock-based compensation awards are accounted for as equity instruments. Stock-based compensation is included in "General and administrative" in the unaudited consolidated statements of operations. During the three months ended March 31, 2014, the Company began capitalizing a portion of stock-based compensation for employees who are directly involved in the acquisition, exploration and development of our properties into the full-cost pool. Capitalized stock-based compensation is included as an addition to "Oil and natural gas properties" in the unaudited consolidated balance sheets. | |||||||||||
1. Restricted stock awards | |||||||||||
All restricted stock awards are treated as issued and outstanding in the accompanying unaudited consolidated financial statements. If an employee terminates employment prior to the restriction lapse date, the awarded shares are forfeited and canceled and are no longer considered issued and outstanding. If the employee's termination of employment is by reason of death or disability then all of the holder's restricted stock will automatically vest. Restricted stock awards granted to officers and employees vest in a variety of vesting schedules including (i) 20% at the grant date and then vest 20% annually thereafter; (ii) 33%, 33% and 34% per year beginning on the first anniversary date of the grant; (iii) 50% in year two and 50% in year three; (iv) fully on the first anniversary date of the grant and (v) fully on the third anniversary date of the grant. Restricted stock awards granted to non-employee directors vest fully on the first anniversary date of the grant. | |||||||||||
The following table reflects the outstanding restricted stock awards for the three months ended March 31, 2014: | |||||||||||
(in thousands, except for weighted-average grant date fair values) | Restricted | Weighted-average | |||||||||
stock | grant date | ||||||||||
awards | fair value | ||||||||||
Outstanding at December 31, 2013 | 1,799 | $ | 19.17 | ||||||||
Granted | 1,068 | $ | 25.63 | ||||||||
Forfeited | (21 | ) | $ | 22.75 | |||||||
Vested(1) | (402 | ) | $ | 17.9 | |||||||
Outstanding at March 31, 2014 | 2,444 | $ | 22.19 | ||||||||
______________________________________________________________________________ | |||||||||||
-1 | The vesting of certain restricted stock grants could result in federal and state income tax expense or benefits related to the difference between the market price of the common stock at the date of vesting and the date of grant. For the three months ended March 31, 2014, the Company's recognized income tax expense related to the vesting of restricted stock was immaterial. The Company recognized income tax expense of $0.3 million during the three months ended March 31, 2013 related to restricted stock, which were recorded as adjustments to deferred income taxes. | ||||||||||
The Company utilizes the closing stock price on the date of grant to determine the fair value of service vesting restricted stock awards. As of March 31, 2014, unrecognized stock-based compensation related to the restricted stock awards was $43.6 million. Such cost is expected to be recognized over a weighted-average period of 2.09 years. | |||||||||||
2. Restricted stock option awards | |||||||||||
Restricted stock options granted under the LTIP vest and are exercisable in four equal installments on each of the first four anniversaries of the date of the grant. The following table reflects the stock option award activity for the three months ended March 31, 2014: | |||||||||||
(in thousands, except for weighted-average exercise price and contractual term) | Restricted | Weighted-average | Weighted-average | ||||||||
stock option | exercise price | remaining contractual term | |||||||||
awards | (per option) | (years) | |||||||||
Outstanding at December 31, 2013 | 1,229 | $ | 19.32 | 8.82 | |||||||
Granted | 336 | $ | 25.6 | 9.91 | |||||||
Exercised(1) | (80 | ) | $ | 19.92 | 8.49 | ||||||
Expired or canceled | — | $ | — | — | |||||||
Forfeited | (12 | ) | $ | 19.61 | — | ||||||
Outstanding at March 31, 2014 | 1,473 | $ | 20.72 | 8.89 | |||||||
Vested and exercisable at end of period(2) | 367 | $ | 20.36 | 8.42 | |||||||
Vested, exercisable, and expected to vest at end of period(3) | 1,440 | $ | 20.71 | 8.88 | |||||||
_____________________________________________________________________________ | |||||||||||
-1 | The exercise of stock options could result in federal and state income tax expense or benefits related to the difference between the fair value of the stock option at the date of grant and the intrinsic value of the stock option when exercised. The Company recognized income tax expense of $0.1 million during the three months ended March 31, 2014 related to stock options, which were recorded as adjustments to deferred income taxes. No stock options were exercised during the three months ended March 31, 2013. | ||||||||||
-2 | The aggregate intrinsic value of vested and exercisable options at March 31, 2014 was $2.0 million. | ||||||||||
-3 | The aggregate intrinsic value of vested, exercisable and expected to vest options at March 31, 2014 was $7.4 million. | ||||||||||
The Company utilized the Black-Scholes option pricing model to determine the fair value of restricted stock options and is recognizing the associated expense on a straight-line basis over the four-year requisite service period of the awards. Determining the fair value of equity-based awards requires judgment, including estimating the expected term that stock options will be outstanding prior to exercise and the associated volatility. As of March 31, 2014 unrecognized stock-based compensation related to the restricted option awards was $11.7 million. Such cost is expected to be recognized over a weighted-average period of 3.04 years. | |||||||||||
The assumptions used to estimate the fair value of restricted stock options granted on February 27, 2014 are as follows: | |||||||||||
Risk-free interest rate(1) | 1.88 | % | |||||||||
Expected option life(2) | 6.25 years | ||||||||||
Expected volatility(3) | 53.21 | % | |||||||||
Fair value per stock option | $ | 13.41 | |||||||||
______________________________________________________________________________ | |||||||||||
-1 | U.S. Treasury yields as of the grant date were utilized for the risk-free interest rate assumption, matching the treasury yield terms to the expected life of the option. | ||||||||||
-2 | As the Company had limited exercise history at the time of valuation relating to terminations and modifications, expected option life assumptions were developed using the simplified method in accordance with GAAP. | ||||||||||
-3 | The Company utilized a peer historical look-back, which was weighted with the Company’s own volatility, in order to develop the expected volatility. | ||||||||||
In accordance with the LTIP and stock option agreement, the options granted will become exercisable in accordance with the following schedule based upon the number of full years of the optionee's continuous employment or service with the Company, following the date of grant: | |||||||||||
Full years of continuous employment | Incremental percentage of | Cumulative percentage of | |||||||||
option exercisable | option exercisable | ||||||||||
Less than one | — | % | — | % | |||||||
One | 25 | % | 25 | % | |||||||
Two | 25 | % | 50 | % | |||||||
Three | 25 | % | 75 | % | |||||||
Four | 25 | % | 100 | % | |||||||
No shares of common stock may be purchased unless the optionee has remained in the continuous employment of the Company through a year from the grant date. Unless terminated sooner, the option will expire if and to the extent it is not exercised within 10 years from the grant date. The unvested portion of a stock option award shall expire upon termination of employment, and the vested portion of a stock option award shall remain exercisable for (i) one year following termination of employment by reason of the holder's death or disability, but not later than the expiration of the option period, or (ii) 90 days following termination of employment for any reason other than the holder's death or disability, and other than the holder's termination of employment for cause. Both the unvested and the vested but unexercised portion of a stock option award shall expire upon the termination of the option holder's employment or service by the Company for cause. | |||||||||||
3. Performance share awards | |||||||||||
The Company performance share awards issued to management on February 27, 2014 ("2014 performance share awards") are subject to a combination of market and service vesting criteria. A Monte Carlo simulation prepared by an independent third party was utilized in order to determine the fair value of these awards at the date of grant. The Company has determined the performance share awards are equity awards and is recognizing the associated expense on a straight-line basis over the three-year requisite service period of the awards. These awards will be settled in stock at the end of the requisite service period based on the achievement of certain performance criteria. | |||||||||||
The 2014 performance share awards have a performance period of January 1, 2014 to December 31, 2016 and are expected to be issued in the first quarter of 2017 if the performance criteria is met. During the three months ended March 31, 2014, 271,667 performance shares were awarded and all remain outstanding at March 31, 2014. As of March 31, 2014, unrecognized stock-based compensation related to the performance share awards was $7.3 million. Such cost is expected to be recognized over a weighted-average period of 2.91 years. | |||||||||||
The assumptions used to estimate the fair value of the performance share awards granted on February 27, 2014 are as follows: | |||||||||||
Risk-free rate(1) | 0.63 | % | |||||||||
Dividend yield | — | % | |||||||||
Expected volatility(2) | 38.21 | % | |||||||||
Laredo closing price as of February 27, 2014 | $ | 25.6 | |||||||||
Fair value per performance share | $ | 28.56 | |||||||||
______________________________________________________________________________ | |||||||||||
-1 | The risk-free rate was derived using a zero-coupon yield derived from the Treasury Constant Maturities yield curve on the grant date. | ||||||||||
-2 | The Company utilized a peer historical look-back, weighted with the Company's own volatility, to develop the expected volatility. | ||||||||||
4. Stock-based compensation award expense | |||||||||||
The following has been recorded to stock-based compensation expense for the periods presented: | |||||||||||
Three months ended March 31, | |||||||||||
(in thousands) | 2014 | 2013 | |||||||||
Restricted stock award compensation | $ | 4,232 | $ | 2,826 | |||||||
Restricted stock option award compensation | 795 | 391 | |||||||||
Restricted performance share unit award compensation | 220 | — | |||||||||
Total stock-based compensation | 5,247 | 3,217 | |||||||||
Less amounts capitalized in oil and natural gas properties | (918 | ) | — | ||||||||
Net stock-based compensation expense | $ | 4,329 | $ | 3,217 | |||||||
5. Performance unit awards | |||||||||||
The performance unit awards issued to management on February 15, 2013 ("2013 performance unit awards") and on February 3, 2012 ("2012 performance unit awards") are subject to a combination of market and service vesting criteria. A Monte Carlo simulation prepared by an independent third party is utilized in order to determine the fair value of these awards at the date of grant and to re-measure the fair value at the end of each reporting period until settlement in accordance with GAAP. The volatility criteria utilized in the Monte Carlo simulation is based on the volatility of the Company and the volatilities of a group of peer companies that have been determined to be most representative of the Company’s expected volatility. These awards are accounted for as liability awards as they will be settled in cash at the end of the requisite service period based on the achievement of certain performance criteria. The liability and related compensation expense for each period for these awards is recognized by dividing the fair value of the total liability by the requisite service period and recording the pro rata share for the period for which service has already been provided. As there are inherent uncertainties related to these factors and the Company’s judgment in applying them to the fair value determinations, there is risk that the recorded performance unit compensation may not accurately reflect the amount ultimately earned by the members of management. | |||||||||||
The 44,481 outstanding 2013 performance unit awards have a performance period of January 1, 2013 to December 31, 2015 and are expected to be paid in the first quarter of 2016 if the performance criteria are met. The 27,381 outstanding 2012 performance units have a performance period of January 1, 2012 to December 31, 2014 and are expected to be paid in the first quarter of 2015 if the performance criteria are met. | |||||||||||
Compensation expense for these awards amounted to $0.1 million for the three months ended March 31, 2014 and 2013 and is recognized in "General and administrative" in the Company’s unaudited consolidated statements of operations, and the corresponding liabilities are included in "Other current liabilities" and "Other noncurrent liabilities" in the unaudited consolidated balance sheets. |
Income_taxes
Income taxes | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Income taxes | ' | ||||||||
Income taxes | |||||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating losses and tax credit carry-forwards. Under this method, deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established to reduce deferred tax assets if it is determined it is more likely than not that the related tax benefit will not be realized. On a quarterly basis, management evaluates the need for and adequacy of valuation allowances based on the expected realizability of the deferred tax assets and adjusts the amount of such allowances, if necessary. | |||||||||
The Company evaluates uncertain tax positions for recognition and measurement in the consolidated financial statements. To recognize a tax position, the Company determines whether it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation, based on the technical merits of the position. A tax position that meets the more-likely-than-not threshold is measured to determine the amount of benefit to be recognized in the consolidated financial statements. The amount of tax benefit recognized with respect to any tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon settlement. The Company has no unrecognized tax benefits related to uncertain tax positions in the consolidated financial statements at March 31, 2014 or December 31, 2013. | |||||||||
The Company is subject to corporate income taxes and the Texas franchise tax. Income tax expense attributable to income (loss) from continuing operations for the periods presented consisted of the following: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Current taxes | $ | — | $ | — | |||||
Deferred taxes | (107 | ) | (1,110 | ) | |||||
Income tax expense | $ | (107 | ) | $ | (1,110 | ) | |||
The following presents the comprehensive provision for income taxes for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Comprehensive provision for income taxes allocable to: | |||||||||
Continuing operations | $ | (107 | ) | $ | (1,110 | ) | |||
Discontinued operations | — | (153 | ) | ||||||
Comprehensive provision for income taxes | $ | (107 | ) | $ | (1,263 | ) | |||
Income tax expense attributable to income (loss) from continuing operations before income taxes differed from amounts computed by applying the applicable federal income tax rate of 35% to pre-tax earnings as a result of the following: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Income tax benefit (expense) computed by applying the statutory rate | $ | 37 | $ | (764 | ) | ||||
State income tax, net of federal tax benefit and increase in valuation allowance | 1,287 | (21 | ) | ||||||
Non-deductible stock-based compensation | (116 | ) | (175 | ) | |||||
Stock-based compensation tax deficiency | (141 | ) | (291 | ) | |||||
Change in deferred tax valuation allowance | (1,078 | ) | (9 | ) | |||||
Other items | (96 | ) | 150 | ||||||
Income tax expense | $ | (107 | ) | $ | (1,110 | ) | |||
For the three months ended March 31, 2014 and 2013, the effective rate on income (loss) from continuing operations before income taxes was not meaningful due to the significant effect of discrete items on a relatively small loss from continuing operations. The Company's effective tax rate is affected by recurring permanent differences and by discrete items that may occur in any given year, but are not consistent from year to year. | |||||||||
The impact of significant discrete items is separately recognized in the quarter in which they occur. During the three months ended March 31, 2014 and 2013, certain shares related to restricted stock awards vested at times when the Company's stock price was lower than the fair value of those shares at the time of grant. As a result, the income tax deduction related to such shares is less than the expense previously recognized for book purposes. During the three months ended March 31, 2014, certain restricted stock options were exercised. The income tax deduction related to the options intrinsic value was less than the expense previously recognized for book purposes. In accordance with GAAP, such shortfalls reduce additional paid-in capital to the extent windfall tax benefits have been previously recognized. However, the Company has not previously recognized any windfall tax benefits. Therefore, the tax impact of these shortfalls totaling $0.1 million and $0.3 million for the three months ended March 31, 2014 and 2013, respectively, is included in income tax expense attributable to continuing operations for the period. | |||||||||
Significant components of the Company’s deferred tax liabilities for the periods presented are as follows: | |||||||||
(in thousands) | 31-Mar-14 | December 31, 2013 | |||||||
Net operating loss carry-forward | $ | 287,796 | $ | 284,890 | |||||
Oil and natural gas properties and equipment | (314,097 | ) | (278,735 | ) | |||||
Derivatives | 8,819 | (30,859 | ) | ||||||
Stock-based compensation | 5,583 | 6,578 | |||||||
Accrued bonus | 188 | 3,740 | |||||||
Capitalized interest | 2,271 | 2,099 | |||||||
Other | (2,089 | ) | (240 | ) | |||||
Gross deferred tax liability | (11,529 | ) | (12,527 | ) | |||||
Valuation allowance | (1,237 | ) | (132 | ) | |||||
Net deferred tax liability | $ | (12,766 | ) | $ | (12,659 | ) | |||
Net deferred tax assets and liabilities were classified in the unaudited consolidated balance sheets as follows for the periods presented: | |||||||||
(in thousands) | 31-Mar-14 | December 31, 2013 | |||||||
Deferred tax asset | $ | 1,075 | $ | 3,634 | |||||
Deferred tax liability | (13,841 | ) | (16,293 | ) | |||||
Net deferred tax liability | $ | (12,766 | ) | $ | (12,659 | ) | |||
The Company had federal net operating loss carry-forwards totaling $813.7 million and state of Oklahoma net operating loss carry-forwards totaling $106.7 million as of March 31, 2014. These carry-forwards begin expiring in 2026. As of March 31, 2014, the Company believes the federal and state of Oklahoma net operating loss carry-forwards are fully realizable. The Company considered all available evidence, both positive and negative in determining whether, based on the weight of that evidence, a valuation allowance was needed on either the federal or Oklahoma net operating loss carry-forwards. Such consideration included estimated future projected earnings based on existing reserves and projected future cash flows from its oil and natural gas reserves (including the timing of those cash flows), the reversal of deferred tax liabilities recorded as of March 31, 2014, the Company’s ability to capitalize intangible drilling costs, rather than expensing these costs in order to prevent an operating loss carry-forward from expiring unused, and future projections of Oklahoma sourced income. | |||||||||
The Company's federal and state operating loss carry-forwards include windfall tax deductions from vestings of certain restricted stock awards and stock option exercises that were not recorded in the Company's income tax provision. The amount of windfall tax benefit recognized in additional paid-in capital is limited to the amount of benefit realized currently in income taxes payable. As of March 31, 2014, the Company had suspended additional paid-in capital credits of $3.2 million related to windfall tax deductions. Upon realization of the net operating loss carry-forwards from such windfall tax deductions, the Company would record a benefit of up to $3.2 million in additional paid-in capital. | |||||||||
The Company maintains a valuation allowance to reduce certain deferred tax assets to amounts that are more likely than not to be realized. As of March 31, 2014, a full valuation allowance of $1.2 million was recorded against the deferred tax asset related to the Company’s charitable contribution carry-forward of $3.5 million. | |||||||||
The Company's income tax returns for the years 2010 through 2013 remain open and subject to examination by federal tax authorities and/or the tax authorities in Oklahoma, Texas and Louisiana which are the jurisdictions where the Company has or had operations. Additionally, the statute of limitations for examination of federal net operating loss carry-forwards typically does not begin to run until the year the attribute is utilized in a tax return. The Company's 2011 federal income tax return is currently under examination. |
Derivatives
Derivatives | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||||
Derivatives | ' | ||||||||||||
Derivatives | |||||||||||||
1. Commodity derivatives | |||||||||||||
The Company engages in derivative transactions such as collars, swaps, puts and basis swaps to hedge price risks due to unfavorable changes in oil and natural gas prices related to its oil and natural gas production. As of March 31, 2014, the Company had 37 open derivative contracts with financial institutions which extend from April 2014 to December 2016. None of these contracts were designated as hedges for accounting purposes. The contracts are recorded at fair value on the balance sheet and gains and losses are recognized in current period earnings. Gains and losses on derivatives are reported on the unaudited consolidated statements of operations in the respective "Loss on derivatives" amounts. | |||||||||||||
Each collar transaction has an established price floor and ceiling. When the settlement price is below the price floor established by these collars, the Company receives an amount from its counterparty equal to the difference between the settlement price and the price floor multiplied by the hedged contract volume. When the settlement price is above the price ceiling established by these collars, the Company pays its counterparty an amount equal to the difference between the settlement price and the price ceiling multiplied by the hedged contract volume. | |||||||||||||
Each swap transaction has an established fixed price. When the settlement price is below the fixed price, the counterparty pays the Company an amount equal to the difference between the settlement price and the fixed price multiplied by the hedged contract volume. When the settlement price is above the fixed price, the Company pays its counterparty an amount equal to the difference between the settlement price and the fixed price multiplied by the hedged contract volume. | |||||||||||||
Each put transaction has an established floor price. The Company pays the counterparty a premium in order to enter into the put transaction. When the settlement price is below the floor price, the counterparty pays the Company an amount equal to the difference between the settlement price and the fixed price multiplied by the hedged contract volume. When the settlement price is above the floor price, the put option expires. | |||||||||||||
The oil basis swap transaction has an established fixed basis differential. The Company's oil basis swap differential is between the West Texas Intermediate Midland Argus ("Midland Argus") index crude oil price and the West Texas Intermediate Argus Cushing ("WTI Argus") index crude oil price. When the WTI Argus price less the fixed basis differential is greater than the actual Midland Argus price, the difference multiplied by the hedged contract volume is paid to the Company by the counterparty. When the WTI Argus price less the fixed basis differential is less than the actual Midland Argus price, the difference multiplied by the hedged contract volume is paid by the Company to the counterparty. | |||||||||||||
During the three months ended March 31, 2014, the Company entered into additional commodity contracts to hedge a portion of its estimated future production. The following table summarizes information about these additional commodity derivative contracts: | |||||||||||||
Aggregate | Swap | Contract period | |||||||||||
volumes | price | ||||||||||||
Natural gas (volumes in MMBtu): | |||||||||||||
Swap(1) | 3,060,000 | $ | 4.32 | March 2014 - December 2014 | |||||||||
Swap(1) | 2,448,000 | $ | 4.32 | March 2014 - December 2014 | |||||||||
______________________________________________________________________________ | |||||||||||||
(1) These natural gas derivatives are settled based on the Inside FERC West Texas Waha index price for the calculation period. | |||||||||||||
During the three months ended March 31, 2014, the Company unwound a physical commodity contract and the associated oil basis swap financial derivative contract which hedged the differential between the Light Louisiana Sweet Argus and the Brent International Petroleum Exchange index oil prices. Prior to its unwind, the physical commodity contract qualified to be scoped out of mark-to-market accounting in accordance with the normal purchase and normal sale scope exemption. Once modified to settle financially in the unwind agreement, the contract ceased to qualify for the normal purchase and normal sale scope exemption, therefore requiring it to be marked-to-market. The Company received net proceeds of $76.7 million from the early termination of these contracts. The Company agreed to settle the contracts early due to the counterparty's decision to exit the physical commodity trading business. | |||||||||||||
The following table summarizes open positions as of March 31, 2014, and represents, as of such date, derivatives in place through December 2016, on annual production volumes: | |||||||||||||
Remaining Year | Year | Year | |||||||||||
2014 | 2015 | 2016 | |||||||||||
Oil positions: | |||||||||||||
Puts: | |||||||||||||
Hedged volume (Bbl) | 405,000 | 456,000 | — | ||||||||||
Weighted-average price ($/Bbl) | $ | 75 | $ | 75 | $ | — | |||||||
Swaps: | |||||||||||||
Hedged volume (Bbl) | 1,622,497 | — | — | ||||||||||
Weighted-average price ($/Bbl) | $ | 94.44 | $ | — | $ | — | |||||||
Collars: | |||||||||||||
Hedged volume (Bbl) | 2,209,500 | 6,557,020 | 1,860,000 | ||||||||||
Weighted-average floor price ($/Bbl) | $ | 86.42 | $ | 79.81 | $ | 80 | |||||||
Weighted-average ceiling price ($/Bbl) | $ | 104.89 | $ | 95.4 | $ | 91.37 | |||||||
Basis swaps: | |||||||||||||
Hedged volume(1) (Bbl) | 1,650,000 | — | — | ||||||||||
Weighted-average price(1) ($/Bbl) | $ | (1.00 | ) | $ | — | $ | — | ||||||
Natural gas positions: | |||||||||||||
Swaps: | |||||||||||||
Hedged volume (MMBtu) | 4,950,000 | — | — | ||||||||||
Weighted-average price ($/MMBtu) | $ | 4.32 | $ | — | $ | — | |||||||
Collars: | |||||||||||||
Hedged volume (MMBtu) | 7,200,000 | 8,160,000 | — | ||||||||||
Weighted-average floor price ($/MMBtu) | $ | 3 | $ | 3 | $ | — | |||||||
Weighted-average ceiling price ($/MMBtu) | $ | 5.5 | $ | 6 | $ | — | |||||||
_______________________________________________________________________________ | |||||||||||||
-1 | The associated oil basis swap derivative is settled based on the differential between the WTI Argus index oil price and the Midland Argus oil futures. | ||||||||||||
The following represents cash settlements (paid) received for matured derivatives for the periods presented: | |||||||||||||
Three months ended March 31, | |||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||
Commodity derivatives (paid) received | $ | (1,431 | ) | $ | 3,777 | ||||||||
Interest rate derivatives paid | — | (101 | ) | ||||||||||
Cash settlements (paid) received for matured derivatives, net | $ | (1,431 | ) | $ | 3,676 | ||||||||
2. Interest rate derivatives | |||||||||||||
The Company is exposed to market risk for changes in interest rates related to any drawn amount on its Senior Secured Credit Facility. In prior periods, interest rate derivative agreements were used to manage a portion of the exposure related to changing interest rates by converting floating-rate debt to fixed-rate debt. If the London Interbank Offered Rate ("LIBOR") was lower than the fixed rate in the contract, the Company was required to pay the counterparties the difference, and conversely, the counterparties were required to pay the Company if LIBOR was higher than the fixed rate in the contract. The Company did not designate the interest rate derivatives as cash flow hedges; therefore, the changes in fair value of these instruments were recorded in current earnings. The Company had one interest rate swap and one interest rate cap outstanding for a notional amount of $100.0 million with fixed pay rates of 1.11% and 3.00%, respectively, until their expiration in September 2013. No interest rate derivatives were in place as of March 31, 2014. | |||||||||||||
3. Balance sheet presentation | |||||||||||||
The Company’s oil and natural gas commodity derivatives and interest rate derivatives are presented on a net basis in "Derivatives" on the unaudited consolidated balance sheets. | |||||||||||||
The following summarizes the fair value of derivatives outstanding on a gross basis as of: | |||||||||||||
(in thousands) | 31-Mar-14 | December 31, 2013 | |||||||||||
Assets: | |||||||||||||
Commodity derivatives: | |||||||||||||
Oil derivatives | $ | 38,699 | $ | 140,496 | |||||||||
Natural gas derivatives | 479 | 657 | |||||||||||
Total assets | $ | 39,178 | $ | 141,153 | |||||||||
Liabilities: | |||||||||||||
Commodity derivatives: | |||||||||||||
Oil derivatives(1) | $ | 58,984 | $ | 56,818 | |||||||||
Natural gas derivatives(2) | 2,584 | 2,278 | |||||||||||
Total liabilities | $ | 61,568 | $ | 59,096 | |||||||||
Net derivative position | $ | (22,390 | ) | $ | 82,057 | ||||||||
______________________________________________________________________________ | |||||||||||||
-1 | The oil derivatives fair value includes a deferred premium liability of $9.4 million and $11.1 million as of March 31, 2014 and December 31, 2013, respectively. | ||||||||||||
-2 | The natural gas derivatives fair value includes a deferred premium liability of $1.4 million and $1.6 million as of March 31, 2014 and December 31, 2013, respectively. | ||||||||||||
By using derivatives to hedge exposures to changes in commodity prices and interest rates, the Company exposes itself to credit risk and market risk. Market risk is the exposure to changes in the market price of oil and natural gas, which are subject to fluctuations from a variety of factors, including changes in supply and demand. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, thereby creating credit risk. The Company’s counterparties are participants in the Senior Secured Credit Facility which is secured by the Company’s oil and natural gas reserves; therefore, the Company is not required to post any collateral. The Company does not require collateral from its counterparties. The Company minimizes the credit risk in derivatives by: (i) limiting its exposure to any single counterparty; (ii) entering into derivatives only with counterparties that are also lenders in the Senior Secured Credit Facility and meet the Company’s minimum credit quality standard, or have a guarantee from an affiliate that meets the Company’s minimum credit quality standard; and (iii) monitoring the creditworthiness of the Company’s counterparties on an ongoing basis. In accordance with the Company’s standard practice, its commodity and interest rate derivatives are subject to counterparty netting under agreements governing such derivatives and, therefore, the risk of such loss is somewhat mitigated as of March 31, 2014. |
Fair_value_measurements
Fair value measurements | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair value measurements | ' | ||||||||||||||||
Fair value measurements | |||||||||||||||||
The Company accounts for its oil and natural gas commodity derivatives and, in prior periods, its interest rate derivatives at fair value. The fair value of derivatives is determined utilizing pricing models for similar instruments. The models use a variety of techniques to arrive at fair value, including quotes and pricing analysis. Inputs to the pricing models include publicly available prices and forward curves generated from a compilation of data gathered from third parties. | |||||||||||||||||
The Company has categorized its assets and liabilities measured at fair value, based on the priority of inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). | |||||||||||||||||
Assets and liabilities recorded at fair value on the unaudited consolidated balance sheets are categorized based on inputs to the valuation techniques as follows: | |||||||||||||||||
Level 1— | Assets and liabilities recorded at fair value for which values are based on unadjusted quoted prices for identical assets or liabilities in an active market that management has the ability to access. 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— | Assets and liabilities recorded at fair value for which values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the assets or liabilities. Substantially all of these inputs are observable in the marketplace throughout the full term of the price risk management instrument and can be derived from observable data or supported by observable levels at which transactions are executed in the marketplace. | ||||||||||||||||
Level 3— | Assets and liabilities recorded at fair value for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Unobservable inputs are not corroborated by market data. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability. | ||||||||||||||||
When the inputs used to measure fair value fall within different levels of the hierarchy in a liquid environment, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company conducts a review of fair value hierarchy classifications on an annual basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Transfers between fair value hierarchy levels are recognized and reported in the period in which the transfer occurred. No transfers between fair value hierarchy levels occurred during the three months ended March 31, 2014 or 2013. | |||||||||||||||||
1. Fair value measurement on a recurring basis | |||||||||||||||||
The following presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis for the periods presented: | |||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total fair | |||||||||||||
value | |||||||||||||||||
As of March 31, 2014: | |||||||||||||||||
Commodity derivatives | $ | — | $ | (11,600 | ) | $ | — | $ | (11,600 | ) | |||||||
Deferred premiums | — | — | (10,790 | ) | (10,790 | ) | |||||||||||
Total | $ | — | $ | (11,600 | ) | $ | (10,790 | ) | $ | (22,390 | ) | ||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total fair | |||||||||||||
value | |||||||||||||||||
As of December 31, 2013: | |||||||||||||||||
Commodity derivatives | $ | — | $ | 94,741 | $ | — | $ | 94,741 | |||||||||
Deferred premiums | — | — | (12,684 | ) | (12,684 | ) | |||||||||||
Total | $ | — | $ | 94,741 | $ | (12,684 | ) | $ | 82,057 | ||||||||
These items are included in "Derivatives" on the unaudited consolidated balance sheets. Significant Level 2 assumptions associated with the calculation of discounted cash flows used in the mark-to-market analysis of commodity derivatives include the NYMEX natural gas and oil prices, appropriate risk adjusted discount rates and other relevant data. Significant Level 2 assumptions associated with the calculation of discounted cash flows used in the mark-to-market analysis of interest rate swaps include the interest rate curves, appropriate risk adjusted discount rates and other relevant data. | |||||||||||||||||
The Company’s deferred premiums associated with its commodity derivative contracts are categorized as Level 3, as the Company utilizes a net present value calculation to determine the valuation. They are considered to be measured on a recurring basis as the derivative contracts they derive from are measured on a recurring basis. As commodity derivative contracts containing deferred premiums are entered into, the Company discounts the associated deferred premium to its net present value at the contract trade date, using the Senior Secured Credit Facility rate at the trade date (historical input rates range from 2.00% to 3.56%), and then records the change in net present value to interest expense over the period from trade until the final settlement date at the end of the contract. After this initial valuation, the net present value of each deferred premium is not adjusted; therefore, significant increases (decreases) in the Senior Secured Credit Facility rate would result in a significantly lower (higher) fair value measurement for each new contract entered into which contained a deferred premium; however, the valuation for the deferred premiums already recorded would remain unaffected. While the Company believes the sources utilized to arrive at the fair value estimates are reliable, different sources or methods could have yielded different fair value estimates; therefore, on a quarterly basis, the valuation is compared to counterparty valuations and a third-party valuation of the deferred premiums for reasonableness. | |||||||||||||||||
The following table presents actual cash payments required for deferred premium contracts in place as of March 31, 2014, and for the calendar years following: | |||||||||||||||||
(in thousands) | |||||||||||||||||
Remaining 2014 | $ | 5,460 | |||||||||||||||
2015 | 5,166 | ||||||||||||||||
2016 | 358 | ||||||||||||||||
Total | $ | 10,984 | |||||||||||||||
A summary of the changes in assets classified as Level 3 measurements for the periods presented are as follows: | |||||||||||||||||
Three months ended March 31, | |||||||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||||||
Balance of Level 3 at beginning of period | $ | (12,684 | ) | $ | (24,709 | ) | |||||||||||
Change in net present value of deferred premiums for derivatives | (65 | ) | (151 | ) | |||||||||||||
Settlements | 1,959 | 2,422 | |||||||||||||||
Balance of Level 3 at end of period | $ | (10,790 | ) | $ | (22,438 | ) | |||||||||||
2. Fair value measurement on a nonrecurring basis | |||||||||||||||||
The Company accounts for the impairment of long-lived assets, if any, at fair value on a nonrecurring basis. For purposes of fair value measurement, it was determined that the impairment of long-lived assets is classified as Level 3, based on the use of internally developed cash flow models. No impairments of long-lived assets were recorded in the three months ended March 31, 2014 or 2013. | |||||||||||||||||
The accounting policies for impairment of oil and natural gas properties are discussed in the audited consolidated financial statements and notes thereto included in the 2013 Annual Report. Significant inputs included in the calculation of discounted cash flows used in the impairment analysis include the Company’s estimate of operating and development costs, anticipated production of proved reserves and other relevant data. |
Credit_risk
Credit risk | 3 Months Ended |
Mar. 31, 2014 | |
Risks and Uncertainties [Abstract] | ' |
Credit risk | ' |
Credit risk | |
The Company’s oil and natural gas sales are to a variety of purchasers, including intrastate and interstate pipelines or their marketing affiliates and independent marketing companies. The Company’s joint operations accounts receivable are from a number of oil and natural gas companies, partnerships, individuals and others who own interests in the properties operated by the Company. Management believes that any credit risk imposed by a concentration in the oil and natural gas industry is offset by the creditworthiness of the Company’s customer base and industry partners. The Company routinely assesses the recoverability of all material trade and other receivables to determine collectability. | |
The Company uses derivatives to hedge its exposure to oil and natural gas price volatility and, in the past, its exposure to interest rate risk associated with the Senior Secured Credit Facility. These transactions expose the Company to potential credit risk from its counterparties. In accordance with the Company’s standard practice, its derivatives are subject to counterparty netting under agreements governing such derivatives; therefore, the credit risk associated with its derivative counterparties is somewhat mitigated. See Note G for additional information regarding the Company’s derivatives. |
Commitments_and_contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and contingencies | ' |
Commitments and contingencies | |
1. Litigation | |
The Company may be involved in legal proceedings or may be subject to industry rulings that could bring rise to claims in the ordinary course of business. The Company has concluded that the likelihood is remote that the ultimate resolution of any pending litigation or pending claims will be material or have a material adverse effect on the Company’s business, financial position, results of operations or liquidity. | |
2. Drilling contracts | |
The Company has committed to several short-term drilling contracts with various third parties in order to complete its various drilling projects. The contracts contain an early termination clause that requires the Company to pay significant penalties to the third party should the Company cease drilling efforts. These penalties would negatively impact the Company’s financial statements upon contract termination. Future commitments are $31.1 million as of March 31, 2014 and are not recorded in the accompanying unaudited consolidated balance sheets. Management does not anticipate canceling any drilling contracts or discontinuing drilling efforts in 2014. | |
3. Federal and state regulations | |
Oil and natural gas exploration, production and related operations are subject to extensive federal and state laws, rules and regulations. Failure to comply with these laws, rules and regulations can result in substantial penalties. The regulatory burden on the oil and natural gas industry increases the cost of doing business and affects profitability. The Company believes that it is in compliance with currently applicable federal and state regulations related to oil and natural gas exploration and production, and that compliance with the current regulations will not have a material adverse impact on the financial position or results of operations of the Company. Because these rules and regulations are frequently amended or reinterpreted, the Company is unable to predict the future cost or impact of complying with these regulations. |
Net_income_loss_per_share
Net income (loss) per share | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Net income (loss) per share | ' | ||||||||
Net income (loss) per share | |||||||||
Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares outstanding for the period. Diluted net income (loss) per share reflects the potential dilution of non-vested restricted stock awards, 2014 performance share awards and outstanding restricted stock options. For the three months ended March 31, 2014, all of these potentially dilutive items were anti-dilutive due to the Company's net loss and, therefore, were excluded from the calculation of diluted net loss per share. | |||||||||
The effect of the Company's outstanding options that were granted in February 2012 to purchase 431,086 shares of common stock at $24.11 per share were excluded from the calculation of diluted net income per share for the three months ended March 31, 2013 because the exercise price of those options was greater than the average market price during the period, and, therefore, the inclusion of these outstanding options would have been anti-dilutive. The effect of the Company's outstanding options that were granted in February 2013 to purchase 989,456 shares of common stock at $17.34 per share were excluded from the calculation of diluted net income per share for the three months ended March 31, 2013, because, utilizing the treasury method, the sum of the assumed proceeds exceeds the average stock price during the period and, therefore, the inclusion of these outstanding options would have been anti-dilutive. | |||||||||
The following is the calculation of basic and diluted weighted-average shares outstanding and net income (loss) per share for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands, except for per share data) | 2014 | 2013 | |||||||
Net income (loss) (numerator): | |||||||||
Income (loss) from continuing operations—basic and diluted | $ | (213 | ) | $ | 1,137 | ||||
Income from discontinued operations, net of tax—basic and diluted | — | 272 | |||||||
Net income (loss)—basic and diluted | $ | (213 | ) | $ | 1,409 | ||||
Weighted-average shares (denominator): | |||||||||
Weighted-average shares—basic | 141,067 | 127,200 | |||||||
Non-vested restricted stock | — | 1,651 | |||||||
Weighted-average shares—diluted | 141,067 | 128,851 | |||||||
Net income (loss) per share: | |||||||||
Basic: | |||||||||
Income (loss) from continuing operations | $ | — | $ | 0.01 | |||||
Income from discontinued operations, net of tax | — | — | |||||||
Net income (loss) per share | $ | — | $ | 0.01 | |||||
Diluted: | |||||||||
Income (loss) from continuing operations | $ | — | $ | 0.01 | |||||
Income from discontinued operations, net of tax | — | — | |||||||
Net income (loss) per share | $ | — | $ | 0.01 | |||||
Variable_interest_entity
Variable interest entity | 3 Months Ended |
Mar. 31, 2014 | |
Variable Interest Entity [Abstract] | ' |
Variable Interest Entity | ' |
Variable interest entity | |
An entity is referred to as a variable interest entity ("VIE") pursuant to accounting guidance for consolidation if it possesses one of the following criteria: (i) it is thinly capitalized, (ii) the residual equity holders do not control the entity, (iii) the equity holders are shielded from the economic losses, (iv) the equity holders do not participate fully in the entity's residual economics, or (v) the entity was established with non-substantive voting interests. In order to determine if a VIE should be consolidated, an entity must determine if it is the primary beneficiary of the VIE. The primary beneficiary of a VIE is that variable interest holder possessing a controlling financial interest through: (i) its power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) its obligation to absorb losses or its right to receive benefits from the VIE that could potentially be significant to the VIE. In order to determine whether the Company owns a variable interest in a VIE, a qualitative analysis is performed of the entity’s design, organizational structure, primary decision makers and relevant agreements. The Company continually monitors its VIE exposure to determine if any events have occurred that could cause the primary beneficiary to change. | |
During the three months ended March 31, 2014 and 2013, Laredo Midstream contributed $11.3 million and $0.9 million, respectively, to Medallion Gathering & Processing, LLC ("Medallion"), a Texas limited liability company. Laredo Midstream holds 49% of Medallion ownership units. Medallion, which was formed on October 31, 2012 and its wholly owned subsidiary, Medallion Pipeline Company, LLC ("MPC"), a Texas limited liability company formed on September 9, 2013, were established for the purpose of developing midstream solutions and providing midstream infrastructure to bring discovered oil and natural gas to market. Laredo Midstream and the other 51% interest-holder have agreed that the voting rights of Medallion, the profit and loss sharing, and the additional capital contribution requirements shall be equal to the ownership unit percentage held. Additionally, Medallion requires a super-majority vote of 75% for all key operating and business decisions. The Company has determined that Medallion is a VIE. However, Laredo Midstream is not considered to be the primary beneficiary of the VIE because Laredo Midstream does not have the power to direct the activities that most significantly affect Medallion's economic performance. As such, Medallion is accounted for under the equity method of accounting with the Company's proportionate share of net loss reflected in the unaudited consolidated statements of operations as "Income (loss) from equity method investee" and the carrying amount reflected on the unaudited consolidated balance sheets as "Investment in equity method investee." | |
As of March 31, 2014, Laredo Midstream has a remaining commitment to contribute an additional $14.4 million to Medallion in 2014 towards the construction of a pipeline by MPC. The Company has recorded a capital contribution payable of $8.2 million related to the first quarter cash requirements of the project and a payable of $1.4 million related to its minimum volume commitment to Medallion, which is reported on the unaudited consolidated balance sheet as "Accrued payable - affiliates." The corresponding expense is reported on the unaudited consolidated statements of operations in the "Transportation and treating - affiliates" line item. |
Recently_issued_accounting_sta
Recently issued accounting standards | 3 Months Ended |
Mar. 31, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
Recently issued accounting standards | ' |
Recent accounting pronouncements | |
In July 2013, the Financial Accounting Standards Board ("FASB") issued guidance on the presentation of an unrecognized tax benefit when a net operating loss carry-forward, a similar tax loss or a tax credit carry-forward exists. The guidance requires an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carry-forward, a similar tax loss or a tax credit carry-forward except when (i) a net operating loss carry-forward, a similar tax loss or a tax credit carry-forward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or (ii) the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose. In those situations the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The Company adopted this guidance on January 1, 2014, and the adoption of this guidance did not have an effect on its consolidated financial statements. |
Subsidiary_guarantees
Subsidiary guarantees | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ' | ||||||||||||||||
Subsidiary guarantees | ' | ||||||||||||||||
Subsidiary guarantees | |||||||||||||||||
Laredo Midstream has fully and unconditionally guaranteed the 2019 Notes, the January 2022 Notes, the May 2022 Notes and the Senior Secured Credit Facility. In accordance with practices accepted by the SEC, Laredo has prepared condensed consolidating financial statements in order to quantify the assets, results of operations and cash flows of Laredo Midstream as a subsidiary guarantor. The following unaudited condensed consolidating balance sheets as of March 31, 2014 and December 31, 2013, and unaudited condensed consolidating statements of operations and unaudited condensed consolidating statements of cash flows for the three months ended March 31, 2014 and 2013, present financial information for Laredo on a stand-alone basis (carrying any investment in subsidiaries under the equity method), financial information for Laredo Midstream on a stand-alone basis (carrying any investment in subsidiaries under the equity method), and the consolidation and elimination entries necessary to arrive at the information for the Company on a condensed consolidated basis. Deferred income taxes for Laredo Midstream are recorded on Laredo's statements of financial position, statements of operations and statements of cash flows as it is a disregarded entity for income tax purposes. Laredo and Laredo Midstream are not restricted from making distributions to each other. | |||||||||||||||||
Condensed consolidating balance sheet | |||||||||||||||||
31-Mar-14 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Laredo Midstream | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Accounts receivable | $ | 85,030 | $ | 37 | $ | (4,130 | ) | $ | 80,937 | ||||||||
Other current assets | 569,854 | — | — | 569,854 | |||||||||||||
Total oil and natural gas properties, net | 2,291,481 | — | — | 2,291,481 | |||||||||||||
Total pipeline and gathering assets, net | — | 54,383 | — | 54,383 | |||||||||||||
Total other fixed assets, net | 28,914 | — | — | 28,914 | |||||||||||||
Investment in subsidiaries and equity method investee | 57,036 | 22,803 | (57,036 | ) | 22,803 | ||||||||||||
Total other long-term assets | 33,210 | — | — | 33,210 | |||||||||||||
Total assets | $ | 3,065,525 | $ | 77,223 | $ | (61,166 | ) | $ | 3,081,582 | ||||||||
Accounts payable | $ | 8,001 | $ | 4,130 | $ | (4,130 | ) | $ | 8,001 | ||||||||
Other current liabilities | 235,484 | 16,057 | — | 251,541 | |||||||||||||
Other long-term liabilities | 44,960 | — | — | 44,960 | |||||||||||||
Long-term debt | 1,501,479 | — | — | 1,501,479 | |||||||||||||
Stockholders’ equity | 1,275,601 | 57,036 | (57,036 | ) | 1,275,601 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 3,065,525 | $ | 77,223 | $ | (61,166 | ) | $ | 3,081,582 | ||||||||
Condensed consolidating balance sheet | |||||||||||||||||
31-Dec-13 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Laredo Midstream | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Accounts receivable | $ | 77,318 | $ | — | $ | — | $ | 77,318 | |||||||||
Other current assets | 230,291 | — | — | 230,291 | |||||||||||||
Total oil and natural gas properties, net | 2,135,348 | — | — | 2,135,348 | |||||||||||||
Total pipeline and gathering assets, net | — | 41,498 | — | 41,498 | |||||||||||||
Total other fixed assets, net | 27,478 | — | — | 27,478 | |||||||||||||
Investment in subsidiaries and equity method investee | 36,666 | 5,913 | (36,666 | ) | 5,913 | ||||||||||||
Total other long-term assets | 105,914 | — | — | 105,914 | |||||||||||||
Total assets | $ | 2,613,015 | $ | 47,411 | $ | (36,666 | ) | $ | 2,623,760 | ||||||||
Accounts payable | $ | 12,216 | $ | 3,786 | $ | — | $ | 16,002 | |||||||||
Other current liabilities | 231,008 | 6,959 | — | 237,967 | |||||||||||||
Other long-term liabilities | 45,997 | — | — | 45,997 | |||||||||||||
Long-term debt | 1,051,538 | — | — | 1,051,538 | |||||||||||||
Stockholders’ equity | 1,272,256 | 36,666 | (36,666 | ) | 1,272,256 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 2,613,015 | $ | 47,411 | $ | (36,666 | ) | $ | 2,623,760 | ||||||||
Condensed consolidating statement of operations | |||||||||||||||||
For the three months ended March 31, 2014 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Laredo Midstream | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Total operating revenues | $ | 173,214 | $ | 1,030 | $ | (934 | ) | $ | 173,310 | ||||||||
Total operating costs and expenses | 112,510 | 1,696 | (934 | ) | 113,272 | ||||||||||||
Income (loss) from operations | 60,704 | (666 | ) | — | 60,038 | ||||||||||||
Interest expense, net | (28,903 | ) | — | — | (28,903 | ) | |||||||||||
Other, net | (31,907 | ) | (33 | ) | 699 | (31,241 | ) | ||||||||||
Loss from continuing operations before income tax | (106 | ) | (699 | ) | 699 | (106 | ) | ||||||||||
Income tax expense | (107 | ) | — | — | (107 | ) | |||||||||||
Loss from continuing operations | (213 | ) | (699 | ) | 699 | (213 | ) | ||||||||||
Net loss | $ | (213 | ) | $ | (699 | ) | $ | 699 | $ | (213 | ) | ||||||
Condensed consolidating statement of operations | |||||||||||||||||
For the three months ended March 31, 2013 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Laredo Midstream | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Total operating revenues | $ | 163,669 | $ | 2,646 | $ | (2,610 | ) | $ | 163,705 | ||||||||
Total operating costs and expenses | 120,831 | 979 | (2,610 | ) | 119,200 | ||||||||||||
Income from operations | 42,838 | 1,667 | — | 44,505 | |||||||||||||
Interest expense, net | (25,334 | ) | — | — | (25,334 | ) | |||||||||||
Other, net | (13,960 | ) | (64 | ) | (2,900 | ) | (16,924 | ) | |||||||||
Income from continuing operations before income tax | 3,544 | 1,603 | (2,900 | ) | 2,247 | ||||||||||||
Income tax expense | (1,110 | ) | — | — | (1,110 | ) | |||||||||||
Income from continuing operations | 2,434 | 1,603 | (2,900 | ) | 1,137 | ||||||||||||
Income (loss) from discontinued operations, net of tax | (1,025 | ) | 1,297 | — | 272 | ||||||||||||
Net income | $ | 1,409 | $ | 2,900 | $ | (2,900 | ) | $ | 1,409 | ||||||||
Condensed consolidating statement of cash flows | |||||||||||||||||
For the three months ended March 31, 2014 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Laredo Midstream | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Net cash flows provided by operating activities | $ | 126,666 | $ | 752 | $ | 699 | $ | 128,117 | |||||||||
Net cash flows used in investing activities | (217,815 | ) | (752 | ) | (699 | ) | (219,266 | ) | |||||||||
Net cash flows provided by financing activities | 440,515 | — | — | 440,515 | |||||||||||||
Net increase in cash and cash equivalents | 349,366 | — | — | 349,366 | |||||||||||||
Cash and cash equivalents at beginning of period | 198,153 | — | — | 198,153 | |||||||||||||
Cash and cash equivalents at end of period | $ | 547,519 | $ | — | $ | — | $ | 547,519 | |||||||||
Condensed consolidating statement of cash flows | |||||||||||||||||
For the three months ended March 31, 2013 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Laredo Midstream | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Net cash flows provided by operating activities | $ | 62,345 | $ | 3,615 | $ | (2,900 | ) | $ | 63,060 | ||||||||
Net cash flows used in investing activities | (198,670 | ) | (3,615 | ) | 2,900 | (199,385 | ) | ||||||||||
Net cash flows provided by financing activities | 134,125 | — | — | 134,125 | |||||||||||||
Net decrease in cash and cash equivalents | (2,200 | ) | — | — | (2,200 | ) | |||||||||||
Cash and cash equivalents at beginning of period | 33,224 | — | — | 33,224 | |||||||||||||
Cash and cash equivalents at end of period | $ | 31,024 | $ | — | $ | — | $ | 31,024 | |||||||||
Subsequent_events
Subsequent events | 3 Months Ended | |||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||
Subsequent Events [Abstract] | ' | |||||||||||||||||
Subsequent events | ' | |||||||||||||||||
Subsequent events | ||||||||||||||||||
1. Amendment to the Senior Secured Credit Facility | ||||||||||||||||||
On May 8, 2014, the Company entered into the Second Amendment to the Senior Secured Credit Facility, pursuant to which, among other things, the borrowing base was increased to $1.0 billion with an aggregate elected commitment amount of $825.0 million. | ||||||||||||||||||
2. New derivative contracts | ||||||||||||||||||
Subsequent to March 31, 2014, the Company entered into the following new commodity contracts: | ||||||||||||||||||
Aggregate | Swap | Floor price | Ceiling price | Contract period | ||||||||||||||
volumes | price | |||||||||||||||||
Oil (volumes in Bbl): | ||||||||||||||||||
Swap | 933,300 | $ | 84.8 | $ | — | $ | — | January 2016 - December 2016 | ||||||||||
Swap | 640,500 | $ | 84.85 | $ | — | $ | — | January 2016 - December 2016 | ||||||||||
Natural gas (volumes in MMBtu): | ||||||||||||||||||
Collar(1) | 3,797,500 | $ | — | $ | 4 | $ | 5.5 | May 2014 - December 2014 | ||||||||||
Collar(1) | 20,440,000 | $ | — | $ | 3 | $ | 5.95 | January 2015 - December 2015 | ||||||||||
Collar(1) | 18,666,000 | $ | — | $ | 3 | $ | 5.6 | January 2016 - December 2016 | ||||||||||
_____________________________________________________________ | ||||||||||||||||||
(1) These natural gas derivatives are settled based on the Inside FERC West Texas Waha index price for the calculation period. |
Supplementary_information
Supplementary information | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Supplemental Information Disclosure Abstract | ' | ||||||||
Supplementary information | ' | ||||||||
Supplementary information | |||||||||
Costs incurred in oil and natural gas property acquisition, exploration and development activities | |||||||||
Costs incurred in the acquisition, exploration and development of oil and natural gas assets are presented below for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Property acquisition costs: | |||||||||
Proved | $ | 25 | $ | — | |||||
Unproved | 7,280 | — | |||||||
Exploration | 8,499 | 8,761 | |||||||
Development costs(1) | 188,313 | 157,316 | |||||||
Total costs incurred | $ | 204,117 | $ | 166,077 | |||||
____________________________________________________________________________ | |||||||||
-1 | The costs incurred for oil and natural gas development activities include $0.6 million in asset retirement obligations for the three months ended March 31, 2014 and 2013. |
Basis_of_presentation_and_sign1
Basis of presentation and significant accounting policies (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of presentation | ' |
Basis of presentation | |
The accompanying unaudited consolidated financial statements were derived from the historical accounting records of the Company and reflect the historical financial position, results of operations and cash flows for the periods described herein. The Company uses the equity method of accounting to record its net interests when the Company holds 20% to 50% of the voting rights and/or has the ability to exercise significant influence but does not control the entity. Under the equity method, the Company's proportionate share of net income (loss) is included in the unaudited consolidated statements of operations. See Note L for additional discussion of the Company's equity method investment. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). All material intercompany transactions and account balances have been eliminated in the consolidation of accounts. The Company operates oil and natural gas properties as one business segment, which explores for, develops and produces oil and natural gas. Unless otherwise indicated, the information in these notes relate to the Company’s continuing operations. | |
The accompanying consolidated financial statements have not been audited by the Company’s independent registered public accounting firm, except that the consolidated balance sheet at December 31, 2013 is derived from audited consolidated financial statements. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all necessary adjustments to present fairly the Company’s financial position as of March 31, 2014 and the results of operations and cash flows for the three months ended March 31, 2014 and 2013. | |
Certain disclosures have been condensed or omitted from these unaudited consolidated financial statements. Accordingly, these unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Laredo’s Annual Report on Form 10-K for the year ended December 31, 2013 (the "2013 Annual Report"). | |
Use of estimates in the preparation of interim consolidated financial statements | ' |
Use of estimates in the preparation of interim unaudited consolidated financial statements | |
The preparation of the accompanying unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates are reasonable, actual results could differ from these estimates. The interim results reflected in the unaudited consolidated financial statements are not necessarily indicative of the results that may be expected for other interim periods or for the full year. | |
Significant estimates include, but are not limited to, (i) estimates of the Company’s reserves of oil and natural gas, (ii) future cash flows from oil and natural gas properties, (iii) depletion, depreciation and amortization, (iv) asset retirement obligations, (v) stock-based compensation, (vi) deferred income taxes, (vii) fair value of assets acquired and liabilities assumed in an acquisition and (viii) fair values of commodity derivatives, interest rate derivatives, commodity deferred premiums, performance share awards and performance unit awards. As fair value is a market-based measurement, it is determined based on the assumptions that market participants would use. These estimates and assumptions are based on management’s best judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Such estimates and assumptions are adjusted when facts and circumstances dictate. Illiquid credit markets and volatile equity and energy markets have combined to increase the uncertainty inherent in such estimates and assumptions. Management believes its estimates and assumptions to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual values and results could differ from these estimates. Any changes in estimates resulting from future changes in the economic environment will be reflected in the financial statements in future periods. | |
Treasury stock | ' |
Treasury stock | |
The Company acquires treasury stock, which is recorded at cost, to satisfy tax withholding obligations for Laredo's employees that arise upon the lapse of restrictions on restricted stock or for other reasons. Upon acquisition, this treasury stock is retired. | |
Accounts receivable | ' |
Accounts receivable | |
The Company sells oil and natural gas to various customers and participates with other parties in the drilling, completion and operation of oil and natural gas wells. Joint interest and oil and natural gas sales receivables related to these operations are generally unsecured. Accounts receivable for joint interest billings are recorded as amounts billed to customers less an allowance for doubtful accounts. | |
Amounts are considered past due after 30 days. The Company determines joint interest operations accounts receivable allowances based on management’s assessment of the creditworthiness of the joint interest owners. Additionally, as the operator in the majority of its wells, the Company has the ability to realize the receivables through netting of anticipated future production revenues. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses, current receivables aging, and existing industry and economic data. The Company reviews its allowance for doubtful accounts quarterly. Past due balances greater than 90 days and over a specified amount are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is remote. | |
Derivative financial instruments | ' |
Derivatives | |
The Company uses derivatives to reduce exposure to fluctuations in the prices of oil and natural gas. By removing a significant portion of the price volatility associated with future production, the Company expects to mitigate, but not eliminate, the potential effects of variability in cash flows from operations due to fluctuations in commodity prices. These transactions are primarily in the form of collars, swaps, puts and basis swaps. In addition, in prior periods the Company entered into derivative contracts in the form of interest rate derivatives to minimize the effects of fluctuations in interest rates. | |
Derivatives are recorded at fair value and are included on the unaudited consolidated balance sheets as assets or liabilities. The Company netted the fair value of derivatives by counterparty in the accompanying unaudited consolidated balance sheets where the right of offset exists. The Company determines the fair value of its derivatives by utilizing pricing models for substantially similar instruments. Inputs to the pricing models include publicly available prices and forward price curves generated from a compilation of data gathered from third parties. | |
The Company’s derivatives were not designated as hedges for accounting purposes for any of the periods presented. Accordingly, the changes in fair value are recognized in the unaudited consolidated statements of operations in the period of change. Gains and losses on derivatives are included in cash flows from operating activities (see Note G). | |
Deferred loan costs | ' |
Deferred loan costs | |
Loan origination fees, which are stated at cost, net of amortization, are amortized over the life of the respective debt agreements utilizing the effective interest and straight-line methods. | |
Asset retirement obligations | ' |
Asset retirement obligations associated with the retirement of tangible long-lived assets are recognized as a liability in the period in which they are incurred and become determinable. The associated asset retirement costs are part of the carrying amount of the long-lived asset. Subsequently, the asset retirement cost included in the carrying amount of the related long-lived asset is charged to expense through the depletion of the asset. Changes in the liability due to the passage of time are recognized as an increase in the carrying amount of the liability and as corresponding accretion expense. | |
The fair value of additions to the asset retirement obligation liability is measured using valuation techniques consistent with the income approach, which converts future cash flows into a single discounted amount. Significant inputs to the valuation include: (i) estimated plug and abandonment cost per well based on Company experience; (ii) estimated remaining life per well based on the reserve life per well; (iii) future inflation factors; and (iv) the Company's average credit adjusted risk free rate. Inherent in the fair value calculation of asset retirement obligations are numerous assumptions and judgments including, in addition to those noted above, the ultimate settlement of these amounts, the ultimate timing of such settlement, and changes in legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the fair value of the existing asset retirement obligation liability, a corresponding adjustment will be made to the asset balance. | |
The Company is obligated by contractual and regulatory requirements to remove certain pipeline and gas gathering assets and perform other remediation of the sites where such pipeline and gas gathering assets are located upon the retirement of those assets. However, the fair value of the asset retirement obligation cannot currently be reasonably estimated because the settlement dates are indeterminate. The Company will record an asset retirement obligation for pipeline and gas gathering assets in the periods in which settlement dates become reasonably determinable. | |
Fair value measurements | ' |
Fair value measurements | |
The carrying amounts reported in the unaudited consolidated balance sheets for cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable, undistributed revenue and royalties and other accrued liabilities approximate their fair values. See Note D for fair value disclosures related to the Company’s debt obligations. The Company carries its derivatives at fair value. See Note G and Note H for details regarding the fair value of the Company’s derivatives. | |
Compensation awards | ' |
Compensation awards | |
For stock-based compensation awards, compensation expense is recognized in "General and administrative" in the Company’s unaudited consolidated statements of operations over the awards’ vesting periods based on their grant date fair value. The Company utilizes the closing stock price on the date of grant, less an expected forfeiture rate, to determine the fair value of service vesting restricted stock awards and a Black-Scholes pricing model to determine the fair values of service vesting restricted stock option awards. The Company utilizes a Monte Carlo simulation prepared by an independent third party to determine the fair values of the performance share awards and performance unit awards. During the three months ended March 31, 2014, the Company began capitalizing a portion of stock-based compensation for employees who are directly involved in the acquisition, exploration and development of our properties into the full-cost pool. Capitalized stock-based compensation is included as an addition to "Oil and natural gas properties" in the unaudited consolidated balance sheets. See Note E for further discussion of the restricted stock awards, restricted stock option awards, performance share awards and performance unit awards. | |
Environmental | ' |
Environmental | |
The Company is subject to extensive federal, state and local environmental laws and regulations. These laws, among other things, regulate the discharge of materials into the environment and may require the Company to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites. All environmental expenditures, including expenditures that relate to an existing condition caused by past operations and that have no future economic benefits, are expensed in the period in which they occur. Liabilities for expenditures of a non-capital nature are recorded when environmental assessment or remediation is probable and the costs can be reasonably estimated. Such liabilities are generally undiscounted unless the timing of cash payments is fixed and readily determinable. Management believes no materially significant liabilities of this nature existed as of March 31, 2014 or December 31, 2013. | |
Employee compensation | ' |
The Company recognizes the fair value of stock-based compensation to employees and directors over the requisite service period as a charge against earnings, net of amounts capitalized. The Company's stock-based compensation awards are accounted for as equity instruments. Stock-based compensation is included in "General and administrative" in the unaudited consolidated statements of operations. | |
Income Taxes | ' |
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating losses and tax credit carry-forwards. Under this method, deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established to reduce deferred tax assets if it is determined it is more likely than not that the related tax benefit will not be realized. On a quarterly basis, management evaluates the need for and adequacy of valuation allowances based on the expected realizability of the deferred tax assets and adjusts the amount of such allowances, if necessary. | |
The Company evaluates uncertain tax positions for recognition and measurement in the consolidated financial statements. To recognize a tax position, the Company determines whether it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation, based on the technical merits of the position. A tax position that meets the more-likely-than-not threshold is measured to determine the amount of benefit to be recognized in the consolidated financial statements. The amount of tax benefit recognized with respect to any tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon settlement. | |
Variable Interest Entity | ' |
Variable interest entity | |
An entity is referred to as a variable interest entity ("VIE") pursuant to accounting guidance for consolidation if it possesses one of the following criteria: (i) it is thinly capitalized, (ii) the residual equity holders do not control the entity, (iii) the equity holders are shielded from the economic losses, (iv) the equity holders do not participate fully in the entity's residual economics, or (v) the entity was established with non-substantive voting interests. In order to determine if a VIE should be consolidated, an entity must determine if it is the primary beneficiary of the VIE. The primary beneficiary of a VIE is that variable interest holder possessing a controlling financial interest through: (i) its power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) its obligation to absorb losses or its right to receive benefits from the VIE that could potentially be significant to the VIE. In order to determine whether the Company owns a variable interest in a VIE, a qualitative analysis is performed of the entity’s design, organizational structure, primary decision makers and relevant agreements. The Company continually monitors its VIE exposure to determine if any events have occurred that could cause the primary beneficiary to change. |
Basis_of_presentation_and_sign2
Basis of presentation and significant accounting policies (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Schedule of components of accounts receivable | ' | ||||||||
Accounts receivable consist of the following components for the periods presented: | |||||||||
(in thousands) | 31-Mar-14 | 31-Dec-13 | |||||||
Oil and natural gas sales | $ | 58,086 | $ | 57,647 | |||||
Joint operations, net(1) | 20,773 | 16,629 | |||||||
Other | 2,078 | 3,042 | |||||||
Total | $ | 80,937 | $ | 77,318 | |||||
______________________________________________________________________________ | |||||||||
-1 | Accounts receivable for joint operations are presented net of an allowance for doubtful accounts of $0.7 million as of each of March 31, 2014 and December 31, 2013. | ||||||||
Schedule of property and equityment | ' | ||||||||
The following table sets forth the Company’s property and equipment for the periods presented: | |||||||||
(in thousands) | 31-Mar-14 | 31-Dec-13 | |||||||
Proved oil and natural gas properties | $ | 3,432,647 | $ | 3,276,578 | |||||
Less accumulated depletion and impairment | 1,397,058 | 1,349,315 | |||||||
Proved oil and natural gas properties, net | 2,035,589 | 1,927,263 | |||||||
Unproved properties not being amortized | 255,892 | 208,085 | |||||||
Pipeline and gathering assets | 57,726 | 44,255 | |||||||
Less accumulated depreciation | 3,343 | 2,757 | |||||||
Pipeline and gas gathering assets, net | 54,383 | 41,498 | |||||||
Other fixed assets | 42,936 | 40,281 | |||||||
Less accumulated depreciation and amortization | 14,022 | 12,803 | |||||||
Other fixed assets, net | 28,914 | 27,478 | |||||||
Total property and equipment, net | $ | 2,374,778 | $ | 2,204,324 | |||||
Schedule of future amortization expense of deferred loan costs | ' | ||||||||
Future amortization expense of deferred loan costs as of March 31, 2014 is as follows: | |||||||||
(in thousands) | |||||||||
Remaining 2014 | $ | 3,927 | |||||||
2015 | 5,289 | ||||||||
2016 | 5,355 | ||||||||
2017 | 5,427 | ||||||||
2018 | 5,219 | ||||||||
Thereafter | 7,181 | ||||||||
Total | $ | 32,398 | |||||||
Schedule of components of other current liabilities | ' | ||||||||
Other current liabilities consist of the following components for the periods presented: | |||||||||
(in thousands) | 31-Mar-14 | 31-Dec-13 | |||||||
Accrued interest payable | $ | 26,893 | $ | 25,885 | |||||
Lease operating expense payable | 12,159 | 10,637 | |||||||
Accrued compensation and benefits | 6,147 | 16,711 | |||||||
Performance unit awards | 2,487 | — | |||||||
Prepaid drilling liability | 802 | 1,393 | |||||||
Asset retirement obligations | 264 | 265 | |||||||
Other accrued liabilities | 10,614 | 17,340 | |||||||
Total other current liabilities | $ | 59,366 | $ | 72,231 | |||||
Schedule of reconciliation of asset retirement obligations liability | ' | ||||||||
The following reconciles the Company’s asset retirement obligation liability for continuing and discontinued operations for the periods presented: | |||||||||
(in thousands) | Three months ended March 31, 2014 | Year ended December 31, 2013 | |||||||
Liability at beginning of period | $ | 21,743 | $ | 21,505 | |||||
Liabilities added due to acquisitions, drilling and other | 576 | 2,709 | |||||||
Accretion expense | 415 | 1,475 | |||||||
Liabilities settled upon plugging and abandonment | (1 | ) | (226 | ) | |||||
Liabilities removed due to Anadarko Basin Sale | — | (7,801 | ) | ||||||
Revision of estimates | — | 4,081 | |||||||
Liability at end of period | $ | 22,733 | $ | 21,743 | |||||
Supplemental cash flow disclosure information and non-cash investing and financing infromation | ' | ||||||||
The following table summarizes the supplemental disclosure of cash flow information for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Cash paid for interest, net of $0 and $95 of capitalized interest, respectively | $ | 26,849 | $ | 27,649 | |||||
The following presents the supplemental disclosure of non-cash investing and financing information for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Change in accrued capital expenditures | $ | 10,622 | $ | (22,680 | ) | ||||
Capitalized asset retirement cost | $ | 576 | $ | 615 | |||||
Capitalized stock-based compensation | $ | 918 | $ | — | |||||
Acquisition_and_divestiture_Ta
Acquisition and divestiture (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Acquisition and Divestitures [Abstract] | ' | ||||
Operating results from discontinued operations | ' | ||||
following represents operating results from discontinued operations for the period presented: | |||||
(in thousands) | Three months ended March 31, 2013 | ||||
Revenues: | |||||
Transportation and treating | $ | 1,832 | |||
Total revenues from discontinued operations | 1,832 | ||||
Cost and expenses: | |||||
Transportation and treating | 536 | ||||
Drilling and production | 244 | ||||
Depletion, depreciation and amortization | 627 | ||||
Total costs and expenses from discontinued operations | 1,407 | ||||
Income from discontinued operations before income tax | 425 | ||||
Income tax expense | (153 | ) | |||
Income from discontinued operations | $ | 272 | |||
The following table presents revenues and operating expenses of the oil and natural gas properties that are a component of the Anadarko Basin Sale included in the accompanying unaudited consolidated statements of operations for the period presented: | |||||
(in thousands) | Three months ended March 31, 2013 | ||||
Revenues | $ | 23,602 | |||
Expenses(1) | 20,919 | ||||
_________________________________________________________________________ | |||||
-1 | Expenses include lease operating expense, production and ad valorem tax expense, accretion expense and depletion, depreciation and amortization expense. |
Debt_Tables
Debt (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||
Schedule of amounts incurred and charged to interest expenses | ' | ||||||||||||||||
The following amounts have been incurred and charged to interest expense for the periods presented: | |||||||||||||||||
Three months ended March 31, | |||||||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||||||
Cash payments for interest | $ | 26,849 | $ | 27,744 | |||||||||||||
Amortization of deferred loan costs and other adjustments | 1,129 | 1,304 | |||||||||||||||
Change in accrued interest | 1,008 | (3,604 | ) | ||||||||||||||
Interest costs incurred | 28,986 | 25,444 | |||||||||||||||
Less capitalized interest | — | (95 | ) | ||||||||||||||
Total interest expense | $ | 28,986 | $ | 25,349 | |||||||||||||
Schedule of carrying amount and fair value of debt instruments | ' | ||||||||||||||||
The following table presents the carrying amount and fair value of the Company’s debt instruments for the periods presented: | |||||||||||||||||
31-Mar-14 | December 31, 2013 | ||||||||||||||||
(in thousands) | Carrying | Fair | Carrying | Fair | |||||||||||||
value | value | value | value | ||||||||||||||
2019 Notes(1) | $ | 551,479 | $ | 612,278 | $ | 551,538 | $ | 615,313 | |||||||||
January 2022 Notes | 450,000 | 456,471 | — | — | |||||||||||||
May 2022 Notes | 500,000 | 556,250 | 500,000 | 549,375 | |||||||||||||
Total value of debt | $ | 1,501,479 | $ | 1,624,999 | $ | 1,051,538 | $ | 1,164,688 | |||||||||
______________________________________________________________________________ | |||||||||||||||||
-1 | The carrying value of the 2019 Notes includes the October Notes unamortized bond premium of $1.5 million at each of March 31, 2014 and December 31, 2013. |
Employee_compensation_Tables
Employee compensation (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2014 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block] | ' | ||||||||||
The following has been recorded to stock-based compensation expense for the periods presented: | |||||||||||
Three months ended March 31, | |||||||||||
(in thousands) | 2014 | 2013 | |||||||||
Restricted stock award compensation | $ | 4,232 | $ | 2,826 | |||||||
Restricted stock option award compensation | 795 | 391 | |||||||||
Restricted performance share unit award compensation | 220 | — | |||||||||
Total stock-based compensation | 5,247 | 3,217 | |||||||||
Less amounts capitalized in oil and natural gas properties | (918 | ) | — | ||||||||
Net stock-based compensation expense | $ | 4,329 | $ | 3,217 | |||||||
Schedule of outstanding restricted stock awards | ' | ||||||||||
The following table reflects the outstanding restricted stock awards for the three months ended March 31, 2014: | |||||||||||
(in thousands, except for weighted-average grant date fair values) | Restricted | Weighted-average | |||||||||
stock | grant date | ||||||||||
awards | fair value | ||||||||||
Outstanding at December 31, 2013 | 1,799 | $ | 19.17 | ||||||||
Granted | 1,068 | $ | 25.63 | ||||||||
Forfeited | (21 | ) | $ | 22.75 | |||||||
Vested(1) | (402 | ) | $ | 17.9 | |||||||
Outstanding at March 31, 2014 | 2,444 | $ | 22.19 | ||||||||
______________________________________________________________________________ | |||||||||||
-1 | The vesting of certain restricted stock grants could result in federal and state income tax expense or benefits related to the difference between the market price of the common stock at the date of vesting and the date of grant. For the three months ended March 31, 2014, the Company's recognized income tax expense related to the vesting of restricted stock was immaterial. The Company recognized income tax expense of $0.3 million during the three months ended March 31, 2013 related to restricted stock, which were recorded as adjustments to deferred income taxes. | ||||||||||
Schedule of stock option award activity | ' | ||||||||||
The following table reflects the stock option award activity for the three months ended March 31, 2014: | |||||||||||
(in thousands, except for weighted-average exercise price and contractual term) | Restricted | Weighted-average | Weighted-average | ||||||||
stock option | exercise price | remaining contractual term | |||||||||
awards | (per option) | (years) | |||||||||
Outstanding at December 31, 2013 | 1,229 | $ | 19.32 | 8.82 | |||||||
Granted | 336 | $ | 25.6 | 9.91 | |||||||
Exercised(1) | (80 | ) | $ | 19.92 | 8.49 | ||||||
Expired or canceled | — | $ | — | — | |||||||
Forfeited | (12 | ) | $ | 19.61 | — | ||||||
Outstanding at March 31, 2014 | 1,473 | $ | 20.72 | 8.89 | |||||||
Vested and exercisable at end of period(2) | 367 | $ | 20.36 | 8.42 | |||||||
Vested, exercisable, and expected to vest at end of period(3) | 1,440 | $ | 20.71 | 8.88 | |||||||
_____________________________________________________________________________ | |||||||||||
-1 | The exercise of stock options could result in federal and state income tax expense or benefits related to the difference between the fair value of the stock option at the date of grant and the intrinsic value of the stock option when exercised. The Company recognized income tax expense of $0.1 million during the three months ended March 31, 2014 related to stock options, which were recorded as adjustments to deferred income taxes. No stock options were exercised during the three months ended March 31, 2013. | ||||||||||
-2 | The aggregate intrinsic value of vested and exercisable options at March 31, 2014 was $2.0 million. | ||||||||||
-3 | The aggregate intrinsic value of vested, exercisable and expected to vest options at March 31, 2014 was $7.4 million | ||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | ' | ||||||||||
The assumptions used to estimate the fair value of restricted stock options granted on February 27, 2014 are as follows: | |||||||||||
Risk-free interest rate(1) | 1.88 | % | |||||||||
Expected option life(2) | 6.25 years | ||||||||||
Expected volatility(3) | 53.21 | % | |||||||||
Fair value per stock option | $ | 13.41 | |||||||||
______________________________________________________________________________ | |||||||||||
-1 | U.S. Treasury yields as of the grant date were utilized for the risk-free interest rate assumption, matching the treasury yield terms to the expected life of the option. | ||||||||||
-2 | As the Company had limited exercise history at the time of valuation relating to terminations and modifications, expected option life assumptions were developed using the simplified method in accordance with GAAP. | ||||||||||
-3 | The Company utilized a peer historical look-back, which was weighted with the Company’s own volatility, in order to develop the expected volatility. | ||||||||||
Share Based Compensation Schedule Of Vesting Rights Options | ' | ||||||||||
In accordance with the LTIP and stock option agreement, the options granted will become exercisable in accordance with the following schedule based upon the number of full years of the optionee's continuous employment or service with the Company, following the date of grant: | |||||||||||
Full years of continuous employment | Incremental percentage of | Cumulative percentage of | |||||||||
option exercisable | option exercisable | ||||||||||
Less than one | — | % | — | % | |||||||
One | 25 | % | 25 | % | |||||||
Two | 25 | % | 50 | % | |||||||
Three | 25 | % | 75 | % | |||||||
Four | 25 | % | 100 | % | |||||||
Performance Shares | ' | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||
Schedule of assumptions used to estimate the fair value of options granted | ' | ||||||||||
The assumptions used to estimate the fair value of the performance share awards granted on February 27, 2014 are as follows: | |||||||||||
Risk-free rate(1) | 0.63 | % | |||||||||
Dividend yield | — | % | |||||||||
Expected volatility(2) | 38.21 | % | |||||||||
Laredo closing price as of February 27, 2014 | $ | 25.6 | |||||||||
Fair value per performance share | $ | 28.56 | |||||||||
______________________________________________________________________________ | |||||||||||
-1 | The risk-free rate was derived using a zero-coupon yield derived from the Treasury Constant Maturities yield curve on the grant date. | ||||||||||
-2 | The Company utilized a peer historical look-back, weighted with the Company's own volatility, to develop the expected volatility. |
Income_taxes_Tables
Income taxes (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Schedule of income tax (benefit) expense | ' | ||||||||
The Company is subject to corporate income taxes and the Texas franchise tax. Income tax expense attributable to income (loss) from continuing operations for the periods presented consisted of the following: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Current taxes | $ | — | $ | — | |||||
Deferred taxes | (107 | ) | (1,110 | ) | |||||
Income tax expense | $ | (107 | ) | $ | (1,110 | ) | |||
Schedule of comprehensive provision for income tax | ' | ||||||||
The following presents the comprehensive provision for income taxes for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Comprehensive provision for income taxes allocable to: | |||||||||
Continuing operations | $ | (107 | ) | $ | (1,110 | ) | |||
Discontinued operations | — | (153 | ) | ||||||
Comprehensive provision for income taxes | $ | (107 | ) | $ | (1,263 | ) | |||
Schedule of reconciliation of income tax expense computed by applying the federal income tax rate of 35% to pre-tax income from operations | ' | ||||||||
Income tax expense attributable to income (loss) from continuing operations before income taxes differed from amounts computed by applying the applicable federal income tax rate of 35% to pre-tax earnings as a result of the following: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Income tax benefit (expense) computed by applying the statutory rate | $ | 37 | $ | (764 | ) | ||||
State income tax, net of federal tax benefit and increase in valuation allowance | 1,287 | (21 | ) | ||||||
Non-deductible stock-based compensation | (116 | ) | (175 | ) | |||||
Stock-based compensation tax deficiency | (141 | ) | (291 | ) | |||||
Change in deferred tax valuation allowance | (1,078 | ) | (9 | ) | |||||
Other items | (96 | ) | 150 | ||||||
Income tax expense | $ | (107 | ) | $ | (1,110 | ) | |||
Schedule of significant components of deferred tax assets and liabilities | ' | ||||||||
Significant components of the Company’s deferred tax liabilities for the periods presented are as follows: | |||||||||
(in thousands) | 31-Mar-14 | December 31, 2013 | |||||||
Net operating loss carry-forward | $ | 287,796 | $ | 284,890 | |||||
Oil and natural gas properties and equipment | (314,097 | ) | (278,735 | ) | |||||
Derivatives | 8,819 | (30,859 | ) | ||||||
Stock-based compensation | 5,583 | 6,578 | |||||||
Accrued bonus | 188 | 3,740 | |||||||
Capitalized interest | 2,271 | 2,099 | |||||||
Other | (2,089 | ) | (240 | ) | |||||
Gross deferred tax liability | (11,529 | ) | (12,527 | ) | |||||
Valuation allowance | (1,237 | ) | (132 | ) | |||||
Net deferred tax liability | $ | (12,766 | ) | $ | (12,659 | ) | |||
Schedule of net deferred tax assets and liabilities as classified in the consolidated balance sheets | ' | ||||||||
Net deferred tax assets and liabilities were classified in the unaudited consolidated balance sheets as follows for the periods presented: | |||||||||
(in thousands) | 31-Mar-14 | December 31, 2013 | |||||||
Deferred tax asset | $ | 1,075 | $ | 3,634 | |||||
Deferred tax liability | (13,841 | ) | (16,293 | ) | |||||
Net deferred tax liability | $ | (12,766 | ) | $ | (12,659 | ) |
Derivatives_Tables
Derivatives (Tables) | 3 Months Ended | |||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||||
Summary of information of additional commodity derivative contracts | ' | |||||||||||||||||
The following table summarizes information about these additional commodity derivative contracts: | ||||||||||||||||||
Aggregate | Swap | Contract period | ||||||||||||||||
volumes | price | |||||||||||||||||
Natural gas (volumes in MMBtu): | ||||||||||||||||||
Swap(1) | 3,060,000 | $ | 4.32 | March 2014 - December 2014 | ||||||||||||||
Swap(1) | 2,448,000 | $ | 4.32 | March 2014 - December 2014 | ||||||||||||||
______________________________________________________________________________ | ||||||||||||||||||
(1) These natural gas derivatives are settled based on the Inside FERC West Texas Waha index price for the calculation period. | ||||||||||||||||||
Subsequent to March 31, 2014, the Company entered into the following new commodity contracts: | ||||||||||||||||||
Aggregate | Swap | Floor price | Ceiling price | Contract period | ||||||||||||||
volumes | price | |||||||||||||||||
Oil (volumes in Bbl): | ||||||||||||||||||
Swap | 933,300 | $ | 84.8 | $ | — | $ | — | January 2016 - December 2016 | ||||||||||
Swap | 640,500 | $ | 84.85 | $ | — | $ | — | January 2016 - December 2016 | ||||||||||
Natural gas (volumes in MMBtu): | ||||||||||||||||||
Collar(1) | 3,797,500 | $ | — | $ | 4 | $ | 5.5 | May 2014 - December 2014 | ||||||||||
Collar(1) | 20,440,000 | $ | — | $ | 3 | $ | 5.95 | January 2015 - December 2015 | ||||||||||
Collar(1) | 18,666,000 | $ | — | $ | 3 | $ | 5.6 | January 2016 - December 2016 | ||||||||||
_____________________________________________________________ | ||||||||||||||||||
(1) These natural gas derivatives are settled based on the Inside FERC West Texas Waha index price for the calculation period. | ||||||||||||||||||
Summary of open positions and derivatives in place | ' | |||||||||||||||||
The following table summarizes open positions as of March 31, 2014, and represents, as of such date, derivatives in place through December 2016, on annual production volumes: | ||||||||||||||||||
Remaining Year | Year | Year | ||||||||||||||||
2014 | 2015 | 2016 | ||||||||||||||||
Oil positions: | ||||||||||||||||||
Puts: | ||||||||||||||||||
Hedged volume (Bbl) | 405,000 | 456,000 | — | |||||||||||||||
Weighted-average price ($/Bbl) | $ | 75 | $ | 75 | $ | — | ||||||||||||
Swaps: | ||||||||||||||||||
Hedged volume (Bbl) | 1,622,497 | — | — | |||||||||||||||
Weighted-average price ($/Bbl) | $ | 94.44 | $ | — | $ | — | ||||||||||||
Collars: | ||||||||||||||||||
Hedged volume (Bbl) | 2,209,500 | 6,557,020 | 1,860,000 | |||||||||||||||
Weighted-average floor price ($/Bbl) | $ | 86.42 | $ | 79.81 | $ | 80 | ||||||||||||
Weighted-average ceiling price ($/Bbl) | $ | 104.89 | $ | 95.4 | $ | 91.37 | ||||||||||||
Basis swaps: | ||||||||||||||||||
Hedged volume(1) (Bbl) | 1,650,000 | — | — | |||||||||||||||
Weighted-average price(1) ($/Bbl) | $ | (1.00 | ) | $ | — | $ | — | |||||||||||
Natural gas positions: | ||||||||||||||||||
Swaps: | ||||||||||||||||||
Hedged volume (MMBtu) | 4,950,000 | — | — | |||||||||||||||
Weighted-average price ($/MMBtu) | $ | 4.32 | $ | — | $ | — | ||||||||||||
Collars: | ||||||||||||||||||
Hedged volume (MMBtu) | 7,200,000 | 8,160,000 | — | |||||||||||||||
Weighted-average floor price ($/MMBtu) | $ | 3 | $ | 3 | $ | — | ||||||||||||
Weighted-average ceiling price ($/MMBtu) | $ | 5.5 | $ | 6 | $ | — | ||||||||||||
_______________________________________________________________________________ | ||||||||||||||||||
-1 | The associated oil basis swap derivative is settled based on the differential between the WTI Argus index oil price and the Midland Argus oil futures. | |||||||||||||||||
Schedule of gains and losses on derivative instruments | ' | |||||||||||||||||
The following represents cash settlements (paid) received for matured derivatives for the periods presented: | ||||||||||||||||||
Three months ended March 31, | ||||||||||||||||||
(in thousands) | 2014 | 2013 | ||||||||||||||||
Commodity derivatives (paid) received | $ | (1,431 | ) | $ | 3,777 | |||||||||||||
Interest rate derivatives paid | — | (101 | ) | |||||||||||||||
Cash settlements (paid) received for matured derivatives, net | $ | (1,431 | ) | $ | 3,676 | |||||||||||||
Summary of derivatives outstanding on a gross basis | ' | |||||||||||||||||
The following summarizes the fair value of derivatives outstanding on a gross basis as of: | ||||||||||||||||||
(in thousands) | 31-Mar-14 | December 31, 2013 | ||||||||||||||||
Assets: | ||||||||||||||||||
Commodity derivatives: | ||||||||||||||||||
Oil derivatives | $ | 38,699 | $ | 140,496 | ||||||||||||||
Natural gas derivatives | 479 | 657 | ||||||||||||||||
Total assets | $ | 39,178 | $ | 141,153 | ||||||||||||||
Liabilities: | ||||||||||||||||||
Commodity derivatives: | ||||||||||||||||||
Oil derivatives(1) | $ | 58,984 | $ | 56,818 | ||||||||||||||
Natural gas derivatives(2) | 2,584 | 2,278 | ||||||||||||||||
Total liabilities | $ | 61,568 | $ | 59,096 | ||||||||||||||
Net derivative position | $ | (22,390 | ) | $ | 82,057 | |||||||||||||
______________________________________________________________________________ | ||||||||||||||||||
-1 | The oil derivatives fair value includes a deferred premium liability of $9.4 million and $11.1 million as of March 31, 2014 and December 31, 2013, respectively. | |||||||||||||||||
-2 | The natural gas derivatives fair value includes a deferred premium liability of $1.4 million and $1.6 million as of March 31, 2014 and December 31, 2013, respectively. |
Fair_value_measurements_Tables
Fair value measurements (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Schedule of fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | ' | ||||||||||||||||
The following presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis for the periods presented: | |||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total fair | |||||||||||||
value | |||||||||||||||||
As of March 31, 2014: | |||||||||||||||||
Commodity derivatives | $ | — | $ | (11,600 | ) | $ | — | $ | (11,600 | ) | |||||||
Deferred premiums | — | — | (10,790 | ) | (10,790 | ) | |||||||||||
Total | $ | — | $ | (11,600 | ) | $ | (10,790 | ) | $ | (22,390 | ) | ||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total fair | |||||||||||||
value | |||||||||||||||||
As of December 31, 2013: | |||||||||||||||||
Commodity derivatives | $ | — | $ | 94,741 | $ | — | $ | 94,741 | |||||||||
Deferred premiums | — | — | (12,684 | ) | (12,684 | ) | |||||||||||
Total | $ | — | $ | 94,741 | $ | (12,684 | ) | $ | 82,057 | ||||||||
Actual cash payments required for deferred premium contracts | ' | ||||||||||||||||
The following table presents actual cash payments required for deferred premium contracts in place as of March 31, 2014, and for the calendar years following: | |||||||||||||||||
(in thousands) | |||||||||||||||||
Remaining 2014 | $ | 5,460 | |||||||||||||||
2015 | 5,166 | ||||||||||||||||
2016 | 358 | ||||||||||||||||
Total | $ | 10,984 | |||||||||||||||
Summary of changes in assets classified as Level 3 measurements | ' | ||||||||||||||||
A summary of the changes in assets classified as Level 3 measurements for the periods presented are as follows: | |||||||||||||||||
Three months ended March 31, | |||||||||||||||||
(in thousands) | 2014 | 2013 | |||||||||||||||
Balance of Level 3 at beginning of period | $ | (12,684 | ) | $ | (24,709 | ) | |||||||||||
Change in net present value of deferred premiums for derivatives | (65 | ) | (151 | ) | |||||||||||||
Settlements | 1,959 | 2,422 | |||||||||||||||
Balance of Level 3 at end of period | $ | (10,790 | ) | $ | (22,438 | ) |
Net_income_loss_per_share_Tabl
Net income (loss) per share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Schedule of calculation of basic and diluted weighted average shares outstanding and net income per share | ' | ||||||||
The following is the calculation of basic and diluted weighted-average shares outstanding and net income (loss) per share for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands, except for per share data) | 2014 | 2013 | |||||||
Net income (loss) (numerator): | |||||||||
Income (loss) from continuing operations—basic and diluted | $ | (213 | ) | $ | 1,137 | ||||
Income from discontinued operations, net of tax—basic and diluted | — | 272 | |||||||
Net income (loss)—basic and diluted | $ | (213 | ) | $ | 1,409 | ||||
Weighted-average shares (denominator): | |||||||||
Weighted-average shares—basic | 141,067 | 127,200 | |||||||
Non-vested restricted stock | — | 1,651 | |||||||
Weighted-average shares—diluted | 141,067 | 128,851 | |||||||
Net income (loss) per share: | |||||||||
Basic: | |||||||||
Income (loss) from continuing operations | $ | — | $ | 0.01 | |||||
Income from discontinued operations, net of tax | — | — | |||||||
Net income (loss) per share | $ | — | $ | 0.01 | |||||
Diluted: | |||||||||
Income (loss) from continuing operations | $ | — | $ | 0.01 | |||||
Income from discontinued operations, net of tax | — | — | |||||||
Net income (loss) per share | $ | — | $ | 0.01 | |||||
Subsidiary_guarantees_Tables
Subsidiary guarantees (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ' | ||||||||||||||||
Schedule of condensed consolidating balance sheet | ' | ||||||||||||||||
Condensed consolidating balance sheet | |||||||||||||||||
31-Mar-14 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Laredo Midstream | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Accounts receivable | $ | 85,030 | $ | 37 | $ | (4,130 | ) | $ | 80,937 | ||||||||
Other current assets | 569,854 | — | — | 569,854 | |||||||||||||
Total oil and natural gas properties, net | 2,291,481 | — | — | 2,291,481 | |||||||||||||
Total pipeline and gathering assets, net | — | 54,383 | — | 54,383 | |||||||||||||
Total other fixed assets, net | 28,914 | — | — | 28,914 | |||||||||||||
Investment in subsidiaries and equity method investee | 57,036 | 22,803 | (57,036 | ) | 22,803 | ||||||||||||
Total other long-term assets | 33,210 | — | — | 33,210 | |||||||||||||
Total assets | $ | 3,065,525 | $ | 77,223 | $ | (61,166 | ) | $ | 3,081,582 | ||||||||
Accounts payable | $ | 8,001 | $ | 4,130 | $ | (4,130 | ) | $ | 8,001 | ||||||||
Other current liabilities | 235,484 | 16,057 | — | 251,541 | |||||||||||||
Other long-term liabilities | 44,960 | — | — | 44,960 | |||||||||||||
Long-term debt | 1,501,479 | — | — | 1,501,479 | |||||||||||||
Stockholders’ equity | 1,275,601 | 57,036 | (57,036 | ) | 1,275,601 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 3,065,525 | $ | 77,223 | $ | (61,166 | ) | $ | 3,081,582 | ||||||||
Condensed consolidating balance sheet | |||||||||||||||||
31-Dec-13 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Laredo Midstream | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Accounts receivable | $ | 77,318 | $ | — | $ | — | $ | 77,318 | |||||||||
Other current assets | 230,291 | — | — | 230,291 | |||||||||||||
Total oil and natural gas properties, net | 2,135,348 | — | — | 2,135,348 | |||||||||||||
Total pipeline and gathering assets, net | — | 41,498 | — | 41,498 | |||||||||||||
Total other fixed assets, net | 27,478 | — | — | 27,478 | |||||||||||||
Investment in subsidiaries and equity method investee | 36,666 | 5,913 | (36,666 | ) | 5,913 | ||||||||||||
Total other long-term assets | 105,914 | — | — | 105,914 | |||||||||||||
Total assets | $ | 2,613,015 | $ | 47,411 | $ | (36,666 | ) | $ | 2,623,760 | ||||||||
Accounts payable | $ | 12,216 | $ | 3,786 | $ | — | $ | 16,002 | |||||||||
Other current liabilities | 231,008 | 6,959 | — | 237,967 | |||||||||||||
Other long-term liabilities | 45,997 | — | — | 45,997 | |||||||||||||
Long-term debt | 1,051,538 | — | — | 1,051,538 | |||||||||||||
Stockholders’ equity | 1,272,256 | 36,666 | (36,666 | ) | 1,272,256 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 2,613,015 | $ | 47,411 | $ | (36,666 | ) | $ | 2,623,760 | ||||||||
Schedule of condensed consolidating statement of operations | ' | ||||||||||||||||
Condensed consolidating statement of operations | |||||||||||||||||
For the three months ended March 31, 2014 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Laredo Midstream | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Total operating revenues | $ | 173,214 | $ | 1,030 | $ | (934 | ) | $ | 173,310 | ||||||||
Total operating costs and expenses | 112,510 | 1,696 | (934 | ) | 113,272 | ||||||||||||
Income (loss) from operations | 60,704 | (666 | ) | — | 60,038 | ||||||||||||
Interest expense, net | (28,903 | ) | — | — | (28,903 | ) | |||||||||||
Other, net | (31,907 | ) | (33 | ) | 699 | (31,241 | ) | ||||||||||
Loss from continuing operations before income tax | (106 | ) | (699 | ) | 699 | (106 | ) | ||||||||||
Income tax expense | (107 | ) | — | — | (107 | ) | |||||||||||
Loss from continuing operations | (213 | ) | (699 | ) | 699 | (213 | ) | ||||||||||
Net loss | $ | (213 | ) | $ | (699 | ) | $ | 699 | $ | (213 | ) | ||||||
Condensed consolidating statement of operations | |||||||||||||||||
For the three months ended March 31, 2013 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Laredo Midstream | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Total operating revenues | $ | 163,669 | $ | 2,646 | $ | (2,610 | ) | $ | 163,705 | ||||||||
Total operating costs and expenses | 120,831 | 979 | (2,610 | ) | 119,200 | ||||||||||||
Income from operations | 42,838 | 1,667 | — | 44,505 | |||||||||||||
Interest expense, net | (25,334 | ) | — | — | (25,334 | ) | |||||||||||
Other, net | (13,960 | ) | (64 | ) | (2,900 | ) | (16,924 | ) | |||||||||
Income from continuing operations before income tax | 3,544 | 1,603 | (2,900 | ) | 2,247 | ||||||||||||
Income tax expense | (1,110 | ) | — | — | (1,110 | ) | |||||||||||
Income from continuing operations | 2,434 | 1,603 | (2,900 | ) | 1,137 | ||||||||||||
Income (loss) from discontinued operations, net of tax | (1,025 | ) | 1,297 | — | 272 | ||||||||||||
Net income | $ | 1,409 | $ | 2,900 | $ | (2,900 | ) | $ | 1,409 | ||||||||
Schedule of condensed consolidating statement of cash flows | ' | ||||||||||||||||
Condensed consolidating statement of cash flows | |||||||||||||||||
For the three months ended March 31, 2014 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Laredo Midstream | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Net cash flows provided by operating activities | $ | 126,666 | $ | 752 | $ | 699 | $ | 128,117 | |||||||||
Net cash flows used in investing activities | (217,815 | ) | (752 | ) | (699 | ) | (219,266 | ) | |||||||||
Net cash flows provided by financing activities | 440,515 | — | — | 440,515 | |||||||||||||
Net increase in cash and cash equivalents | 349,366 | — | — | 349,366 | |||||||||||||
Cash and cash equivalents at beginning of period | 198,153 | — | — | 198,153 | |||||||||||||
Cash and cash equivalents at end of period | $ | 547,519 | $ | — | $ | — | $ | 547,519 | |||||||||
Condensed consolidating statement of cash flows | |||||||||||||||||
For the three months ended March 31, 2013 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Laredo Midstream | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Net cash flows provided by operating activities | $ | 62,345 | $ | 3,615 | $ | (2,900 | ) | $ | 63,060 | ||||||||
Net cash flows used in investing activities | (198,670 | ) | (3,615 | ) | 2,900 | (199,385 | ) | ||||||||||
Net cash flows provided by financing activities | 134,125 | — | — | 134,125 | |||||||||||||
Net decrease in cash and cash equivalents | (2,200 | ) | — | — | (2,200 | ) | |||||||||||
Cash and cash equivalents at beginning of period | 33,224 | — | — | 33,224 | |||||||||||||
Cash and cash equivalents at end of period | $ | 31,024 | $ | — | $ | — | $ | 31,024 | |||||||||
Subsequent_events_Tables
Subsequent events (Tables) | 3 Months Ended | |||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||
Subsequent Events [Abstract] | ' | |||||||||||||||||
Schedule of Commodity Contracts | ' | |||||||||||||||||
The following table summarizes information about these additional commodity derivative contracts: | ||||||||||||||||||
Aggregate | Swap | Contract period | ||||||||||||||||
volumes | price | |||||||||||||||||
Natural gas (volumes in MMBtu): | ||||||||||||||||||
Swap(1) | 3,060,000 | $ | 4.32 | March 2014 - December 2014 | ||||||||||||||
Swap(1) | 2,448,000 | $ | 4.32 | March 2014 - December 2014 | ||||||||||||||
______________________________________________________________________________ | ||||||||||||||||||
(1) These natural gas derivatives are settled based on the Inside FERC West Texas Waha index price for the calculation period. | ||||||||||||||||||
Subsequent to March 31, 2014, the Company entered into the following new commodity contracts: | ||||||||||||||||||
Aggregate | Swap | Floor price | Ceiling price | Contract period | ||||||||||||||
volumes | price | |||||||||||||||||
Oil (volumes in Bbl): | ||||||||||||||||||
Swap | 933,300 | $ | 84.8 | $ | — | $ | — | January 2016 - December 2016 | ||||||||||
Swap | 640,500 | $ | 84.85 | $ | — | $ | — | January 2016 - December 2016 | ||||||||||
Natural gas (volumes in MMBtu): | ||||||||||||||||||
Collar(1) | 3,797,500 | $ | — | $ | 4 | $ | 5.5 | May 2014 - December 2014 | ||||||||||
Collar(1) | 20,440,000 | $ | — | $ | 3 | $ | 5.95 | January 2015 - December 2015 | ||||||||||
Collar(1) | 18,666,000 | $ | — | $ | 3 | $ | 5.6 | January 2016 - December 2016 | ||||||||||
_____________________________________________________________ | ||||||||||||||||||
(1) These natural gas derivatives are settled based on the Inside FERC West Texas Waha index price for the calculation period. |
Supplementary_information_Tabl
Supplementary information (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Supplemental Information Disclosure Abstract | ' | ||||||||
Schedule of costs incurred in the development of oil and natural gas properties | ' | ||||||||
Costs incurred in the acquisition, exploration and development of oil and natural gas assets are presented below for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2014 | 2013 | |||||||
Property acquisition costs: | |||||||||
Proved | $ | 25 | $ | — | |||||
Unproved | 7,280 | — | |||||||
Exploration | 8,499 | 8,761 | |||||||
Development costs(1) | 188,313 | 157,316 | |||||||
Total costs incurred | $ | 204,117 | $ | 166,077 | |||||
____________________________________________________________________________ | |||||||||
-1 | The costs incurred for oil and natural gas development activities include $0.6 million in asset retirement obligations for the three months ended March 31, 2014 and 2013 |
Basis_of_presentation_and_sign3
Basis of presentation and significant accounting policies - Current assets and liabilities (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2014 | Dec. 31, 2013 | |||
segment | ||||
Basis of presentation | ' | ' | ||
Number of operating segments | 1 | ' | ||
Accounts receivable | ' | ' | ||
Term of accounts receivable to be considered as past due (in days) | '30 days | ' | ||
Term of past due balances to be reviewed individually for collectability (in days) | '90 days | ' | ||
Oil and natural gas sales | $58,086,000 | $57,647,000 | ||
Joint operations, net | 20,773,000 | [1] | 16,629,000 | [1] |
Other | 2,078,000 | 3,042,000 | ||
Total | 80,937,000 | 77,318,000 | ||
Allowance for doubtful accounts of accounts receivable for joint operations | 700,000 | 700,000 | ||
Other current liabilities | ' | ' | ||
Accrued interest payable | 26,893,000 | 25,885,000 | ||
Lease operating expense payable | 12,159,000 | 10,637,000 | ||
Accrued compensation and benefits | 6,147,000 | 16,711,000 | ||
Performance unit awards | 2,487,000 | 0 | ||
Prepaid drilling liability | 802,000 | 1,393,000 | ||
Asset retirement obligations | 264,000 | 265,000 | ||
Other accrued liabilities | 10,614,000 | 17,340,000 | ||
Total other current liabilities | $59,366,000 | $72,231,000 | ||
[1] | Accounts receivable for joint operations are presented net of an allowance for doubtful accounts of $0.7 million as of each of March 31, 2014 and December 31, 2013. |
Basis_of_presentation_and_sign4
Basis of presentation and significant accounting policies - Property and equipment (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Proved oil and natural gas properties | $3,432,647 | ' | $3,276,578 |
Less accumulated depletion and impairment | 1,397,058 | ' | 1,349,315 |
Proved oil and natural gas properties, net | 2,035,589 | ' | 1,927,263 |
Unproved properties not being amortized | 255,892 | ' | 208,085 |
Pipeline and gathering assets | 57,726 | ' | 44,255 |
Net property and equipment | 2,374,778 | ' | 2,204,324 |
Other fixed assets | 42,936 | ' | 40,281 |
Depletion expense in dollars per BOE | 19.61 | 20.25 | ' |
Pipeline and gas gathering assets | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Less accumulated depreciation and amortization | 3,343 | ' | 2,757 |
Net property and equipment | 54,383 | ' | 41,498 |
Other fixed assets | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Less accumulated depreciation and amortization | 14,022 | ' | 12,803 |
Net property and equipment | $28,914 | ' | $27,478 |
Basis_of_presentation_and_sign5
Basis of presentation and significant accounting policies - Deferred loan costs and asset retirement obligations (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Deferred loan costs | ' | ' | ' |
Capitalization of deferred loan costs | $7,796,000 | $0 | ' |
Deferred loan costs, net | 32,398,000 | ' | 25,933,000 |
Accumulated amortization | 15,400,000 | ' | 14,200,000 |
Write-off of deferred loan costs | 124,000 | 0 | ' |
Future amortization expense of deferred loan costs | ' | ' | ' |
Remaining 2014 | 3,927,000 | ' | ' |
2015 | 5,289,000 | ' | ' |
2016 | 5,355,000 | ' | ' |
2017 | 5,427,000 | ' | ' |
2018 | 5,219,000 | ' | ' |
Thereafter | 7,181,000 | ' | ' |
Total | 32,398,000 | ' | 25,933,000 |
Reconciliation of asset retirement obligations liability | ' | ' | ' |
Liability at beginning of year | 21,743,000 | 21,505,000 | 21,505,000 |
Liabilities added due to acquisitions, drilling and other | 576,000 | ' | 2,709,000 |
Accretion expense | -415,000 | -394,000 | -1,475,000 |
Liabilities settled upon plugging and abandonment | -1,000 | ' | -226,000 |
Liabilities removed due to Anadarko Basin Sale | 0 | ' | -7,801,000 |
Revision of estimates | 0 | ' | 4,081,000 |
Liability at end of year | $22,733,000 | ' | $21,743,000 |
Basis_of_presentation_and_sign6
Basis of presentation and significant accounting policies - Supplemental cash flow information (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Accounting Policies [Abstract] | ' | ' |
Cash paid for interest, net of $0 and $95 of capitalized interest, respectively | $26,849 | $27,649 |
Capitalized interest | 0 | 95 |
Change in accrued capital expenditures | 10,622 | -22,680 |
Capitalized asset retirement cost | 576 | 615 |
Capitalized stock-based compensation | $918 | $0 |
Acquisition_and_divestiture_Ac
Acquisition and divestiture Acquisition (Details) (Proved and Unproved Oil and Natural Gas Properties in Glasscock County Texas, USD $) | 0 Months Ended |
In Millions, unless otherwise specified | Feb. 25, 2014 |
acre | |
Proved and Unproved Oil and Natural Gas Properties in Glasscock County Texas | ' |
Business Acquisition [Line Items] | ' |
Area of Land | 278 |
Business Combination, Consideration Transferred | $7.30 |
Acquisition_and_divestiture_Di
Acquisition and divestiture Divestitures- Anadarko Basin Sale (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | |
Aug. 01, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | |
Revenues | ' | $1,832,000 | ' | |
Andarko Basin [Member] | ' | ' | ' | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | |
Proceeds From Divestiture of Business, Net of Transaction Costs | 428,300,000 | ' | ' | |
Revenues | ' | 23,602,000 | ' | |
Expenses | ' | 20,919,000 | [1] | ' |
Gain on disposition of assets | ' | ' | 3,200,000 | |
EnerVest [Member] | Andarko Basin [Member] | ' | ' | ' | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | |
Proceeds from Divestiture of Businesses | 400,000,000 | ' | ' | |
Other Third Parties [Member] | Andarko Basin [Member] | ' | ' | ' | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | |
Proceeds from Divestiture of Businesses | 38,000,000 | ' | ' | |
Oil and Gas Properties [Member] | Andarko Basin [Member] | ' | ' | ' | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | |
Proceeds from Divestiture of Businesses | $388,000,000 | ' | ' | |
[1] | Expenses include lease operating expense, production and ad valorem tax expense, accretion expense and depletion, depreciation and amortization expense. |
Acquisition_and_divestiture_Di1
Acquisition and divestiture Divestitures (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenues: | ' | ' |
Transportation and treating | ' | $1,832 |
Total revenues from discontinued operations | ' | 1,832 |
Cost and expenses: | ' | ' |
Transportation and treating | ' | 536 |
Drilling and production | ' | 244 |
Depletion, depreciation and amortization | ' | 627 |
Total costs and expenses from discontinued operations | ' | 1,407 |
Income from discontinued operations before income tax | ' | 425 |
Discontinued operations | 0 | -153 |
Income from discontinued operations | $0 | $272 |
Debt_Interest_expense_and_deta
Debt - Interest expense and details of debt outstanding (Details) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 3 Months Ended | |||||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Apr. 27, 2012 | Oct. 31, 2011 | Oct. 19, 2011 | Jan. 20, 2011 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | |
Senior Secured Credit Facility | May 2022 Notes | October 2019 Notes | October 2019 Notes | January 2019 Notes | Letter of Credit | Minimum | Maximum | |||
Line of Credit | Line of Credit | |||||||||
Debt Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash payments for interest | $26,849,000 | $27,744,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of deferred loan costs | 1,129,000 | 1,304,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of deferred loan costs and other adjustments | 65,000 | 151,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Change in accrued interest | 1,008,000 | -3,604,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Interest costs incurred | 28,986,000 | 25,444,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Less capitalized interest | 0 | -95,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Total interest expense | 28,986,000 | 25,349,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt issued | ' | ' | ' | 500,000,000 | 200,000,000 | ' | 350,000,000 | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | 7.38% | ' | 9.50% | 9.50% | ' | ' | ' |
Borrowing capacity | ' | ' | 812,500,000 | ' | ' | ' | ' | 20,000,000 | ' | ' |
Outstanding amount | ' | ' | $0 | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, unused capacity, commitment fee percentage | ' | ' | ' | ' | ' | ' | ' | ' | 0.38% | 0.50% |
Debt_January_2022_Notes_Detail
Debt -January 2022 Notes (Details) (Senior Notes, January 2022 Notes, USD $) | 0 Months Ended |
In Millions, unless otherwise specified | Jan. 23, 2014 |
Debt Instrument [Line Items] | ' |
Face amount of debt | $450 |
Interest rate (as a percent) | 5.63% |
Net proceeds from offering | $442.20 |
Prior to January 15, 2015 | ' |
Debt Instrument [Line Items] | ' |
Redemption price of debt instrument (as a percent) | 100.00% |
Debt instrument redemption price percentage of principal amount that can be redeemed by equity offering | 35.00% |
Debt instrument redeemed by equity offering redemption price (percentage) | 105.63% |
Debt instrument redemption principal amount outstanding threshold (percentage) | 65.00% |
Debt instrument redemption principal amount outstanding threshold (in days) | '180 days |
Prior to January 15, 2017 | ' |
Debt Instrument [Line Items] | ' |
Redemption price of debt instrument (as a percent) | 110.00% |
Debt_Fair_value_of_debt_Detail
Debt - Fair value of debt (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Carrying value | ' | ' | ||
Fair value of debt | ' | ' | ||
Debt | $1,501,479 | $1,051,538 | ||
Fair value | ' | ' | ||
Fair value of debt | ' | ' | ||
Debt | 1,624,999 | 1,164,688 | ||
2019 Notes | Carrying value | ' | ' | ||
Fair value of debt | ' | ' | ||
Debt | 551,479 | [1] | 551,538 | [1] |
2019 Notes | Fair value | ' | ' | ||
Fair value of debt | ' | ' | ||
Debt | 612,278 | [1] | 615,313 | [1] |
October 2019 Notes | ' | ' | ||
Fair value of debt | ' | ' | ||
Unamortized bond premium | 1,500 | 1,500 | ||
May 2022 Notes | Carrying value | ' | ' | ||
Fair value of debt | ' | ' | ||
Debt | 500,000 | 500,000 | ||
May 2022 Notes | Fair value | ' | ' | ||
Fair value of debt | ' | ' | ||
Debt | 556,250 | 549,375 | ||
Senior Notes | January 2022 Notes | Carrying value | ' | ' | ||
Fair value of debt | ' | ' | ||
Debt | 450,000 | 0 | ||
Senior Notes | January 2022 Notes | Fair value | ' | ' | ||
Fair value of debt | ' | ' | ||
Debt | $456,471 | $0 | ||
[1] | The carrying value of the 2019 Notes includes the October Notes unamortized bond premium of $1.5 million at each of March 31, 2014 and December 31, 2013. |
Employee_compensation_Details
Employee compensation (Details) (USD $) | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | |
Long-Term Incentive Plan | Performance Shares | Restricted Stock Awards | Restricted Stock Awards | Restricted Stock Awards | Restricted stock option awards | Performance Shares | Performance Shares | Termination Caused By Death | Termination Without Cause | 15-Feb-13 | 3-Feb-12 | Vesting In Two Years | Vesting In Three Years | |||
Long-Term Incentive Plan | Restricted stock option awards | Restricted stock option awards | Performance Shares | Performance Shares | Restricted Stock Awards | Restricted Stock Awards | ||||||||||
installment | ||||||||||||||||
anniversary | ||||||||||||||||
Equity and stock-based compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares available for issuance | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of awards vesting at the grant date | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of awards vesting annually after the grant date | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of awards vesting on the first anniversary date of the grant | ' | ' | ' | ' | 33.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of awards vesting on the second anniversary date of the grant | ' | ' | ' | ' | 33.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of awards vesting on the third anniversary date of the grant | ' | ' | ' | ' | 34.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | 50.00% |
Stock-based compensation not yet recognized | ' | ' | ' | $7,300,000 | $43,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation note yet recognized, period for recognition | ' | ' | ' | '2 years 10 months 28 days | '2 years 1 month 2 days | ' | ' | '3 years 0 months 15 days | '2 years 10 months 28 days | ' | ' | ' | ' | ' | ' | ' |
Number of installments over which awards vest and are exercisable | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of anniversaries over which awards vest and are exercisable | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Requisite service period of the awards | ' | ' | ' | ' | ' | ' | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation, not yet recognized, stock options | ' | ' | ' | ' | ' | ' | ' | 11,700,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation, expiration period | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation, vested awards, expiration period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | '90 days | ' | ' | ' | ' |
Outstanding shares | ' | ' | ' | 271,667 | 2,444,000 | 1,799,000 | ' | ' | 271,667 | ' | ' | ' | 44,481 | 27,381 | ' | ' |
Net stock-based compensation expense | $4,329,000 | $3,217,000 | ' | ' | ' | ' | ' | ' | $100,000 | $100,000 | ' | ' | ' | ' | ' | ' |
Employee_compensation_Restrict
Employee compensation Restricted Stock Option Awards (Details 1) (Restricted Stock Awards, USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2014 | |
Restricted Stock Awards | ' | |
Restricted stock awards | ' | |
Outstanding at the beginning of the period (in shares) | 1,799,000 | |
Granted (in shares) | 1,068,000 | |
Forfeited (in shares) | -21,000 | |
Vested (in shares) | -402,000 | [1] |
Outstanding at the end of the period (in shares) | 2,444,000 | |
Weighted-average grant date fair value | ' | |
Outstanding at the beginning of the period (in dollars per share) | $19.17 | |
Fair value per performance share | $25.63 | |
Forfeited (in dollars per share) | $22.75 | |
Vested (in dollars per share) | $17.90 | [1] |
Outstanding at the end of the period (in dollars per share) | $22.19 | |
Income tax expense | $0.30 | |
[1] | The vesting of certain restricted stock grants could result in federal and state income tax expense or benefits related to the difference between the market price of the common stock at the date of vesting and the date of grant. For the three months ended March 31, 2014, the Company's recognized income tax expense related to the vesting of restricted stock was immaterial. The Company recognized income tax expense of $0.3 million during the three months ended March 31, 2013 related to restricted stock, which were recorded as adjustments to deferred income taxes. |
Employee_compensation_Restrict1
Employee compensation Restricted Stock Option Awards (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||
In Millions, except Share data in Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | ||
Weighted-average contractual term | ' | ' | ' | ||
Tax deficiency related to vested stock awards | $0.10 | 0.3 | ' | ||
Restricted stock option awards | ' | ' | ' | ||
Restricted stock option awards | ' | ' | ' | ||
Outstanding at the beginning of the period (in shares) | 1,229 | ' | ' | ||
Granted (in shares) | 336 | ' | ' | ||
Exercised (in shares) | -80 | [1] | 0 | [1] | ' |
Expired or canceled (in shares) | 0 | ' | ' | ||
Forfeited (in shares) | -12 | ' | ' | ||
Outstanding at the end of the period (in shares) | 1,473 | ' | 1,229 | ||
Vested and exercisable at end of period (in shares) | 367 | ' | ' | ||
Vested, exercisable, and expected to vest at end of period (in shares) | 1,440 | ' | ' | ||
Weighted-average exercise price (per option) | ' | ' | ' | ||
Outstanding at the beginning of the period (in dollars per share) | $19.32 | ' | ' | ||
Granted (in dollars per share) | $25.60 | ' | ' | ||
Exercised (in dollars per share) | $19.92 | [1] | ' | ' | |
Expired or cancelled (in dollars per share) | $0 | ' | ' | ||
Forfeited (in dollars per share) | $19.61 | ' | ' | ||
Outstanding at end of the period (in dollars per share) | $20.72 | ' | $19.32 | ||
Exercisable, weighted average exercise price (in dollars per share) | $20.36 | ' | ' | ||
Vested, exercisable, and expected to vest at end of period, weighted average exercise price (in dollars per share) | $20.71 | ' | ' | ||
Weighted-average contractual term | ' | ' | ' | ||
Outstanding at the beginning of the period | '8 years 10 months 21 days | ' | '8 years 9 months 26 days | ||
Granted | '9 years 10 months 28 days | ' | ' | ||
Exercised | '8 years 5 months 27 days | [1] | ' | ' | |
Outstanding at the end of the period | '8 years 10 months 21 days | ' | '8 years 9 months 26 days | ||
Vested and exercisable at the end of the period | '8 years 5 months 1 day | ' | ' | ||
Vested, exercisable, and expected to vest at end of period | '8 years 10 months 17 days | ' | ' | ||
Tax deficiency related to vested stock awards | 0.1 | ' | ' | ||
Aggregate intrinsic value of vested and exercisable options | 2 | ' | ' | ||
Aggregate intrinsic value of vested, exercisable and expected to vest options | $7.40 | ' | ' | ||
[1] | The exercise of stock options could result in federal and state income tax expense or benefits related to the difference between the fair value of the stock option at the date of grant and the intrinsic value of the stock option when exercised. The Company recognized income tax expense of $0.1 million during the three months ended March 31, 2014 related to stock options, which were recorded as adjustments to deferred income taxes. |
Employee_compensation_Restrict2
Employee compensation Restricted Stock Option Awards (Details 3) (Restricted stock option awards, USD $) | 3 Months Ended | |
Mar. 31, 2014 | ||
Restricted stock option awards | ' | |
Assumptions used to estimate the fair value of options granted | ' | |
Risk-free interest rate (as a percent) | 1.88% | [1] |
Expected option life | '6 years 3 months | [2] |
Expected volatility (as a percent) | 53.21% | [3] |
Fair value per option (in dollars per share) | $13.41 | |
[1] | U.S. Treasury yields as of the grant date were utilized for the risk-free interest rate assumption, matching the treasury yield terms to the expected life of the option. | |
[2] | As the Company had limited exercise history at the time of valuation relating to terminations and modifications, expected option life assumptions were developed using the simplified method in accordance with GAAP. | |
[3] | The Company utilized a peer historical look-back, which was weighted with the Company’s own volatility, in order to develop the expected volatility. |
Employee_compensation_Restrict3
Employee compensation Restricted Stock Option Awards (Details 4) (Restricted stock option awards) | 12 Months Ended |
Dec. 31, 2013 | |
Less than one year of continuous employment | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Incremental percentage of option exercisable | 0.00% |
Cumulative percentage of option exercisable | 0.00% |
One year of continuous employment | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Incremental percentage of option exercisable | 25.00% |
Cumulative percentage of option exercisable | 25.00% |
Two years of continuous employment | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Incremental percentage of option exercisable | 25.00% |
Cumulative percentage of option exercisable | 50.00% |
Three years of continuous employment | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Incremental percentage of option exercisable | 25.00% |
Cumulative percentage of option exercisable | 75.00% |
Four years of continuous employment | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Incremental percentage of option exercisable | 25.00% |
Cumulative percentage of option exercisable | 100.00% |
Employee_compensation_Performa
Employee compensation Performance Share Awards (Details) (Performance Shares, USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Feb. 27, 2014 | ||
Performance Shares | ' | ' | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | |
Risk-free interest rate (as a percent) | 0.63% | [1] | ' |
Dividend yield | 0.00% | ' | |
Expected volatility (as a percent) | 38.21% | [2] | ' |
Laredo closing price as of February 27, 2014 | ' | $25.60 | |
Fair value per performance share | $28.56 | ' | |
[1] | The risk-free rate was derived using a zero-coupon yield derived from the Treasury Constant Maturities yield curve on the grant date. | ||
[2] | The Company utilized a peer historical look-back, weighted with the Company's own volatility, to develop the expected volatility. |
Employee_compensation_Stockbas
Employee compensation Stock-based Compensation Award Expense (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Total stock-based compensation | $5,247 | $3,217 |
Less amounts capitalized in oil and natural gas properties | -918 | 0 |
Net stock-based compensation expense | 4,329 | 3,217 |
Restricted Stock Awards | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Total stock-based compensation | 4,232 | 2,826 |
Restricted stock option awards | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Total stock-based compensation | 795 | 391 |
Restricted Performance Shares | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Total stock-based compensation | $220 | $0 |
Income_taxes_Details
Income taxes (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Income Tax Disclosure [Abstract] | ' | ' |
Current taxes | $0 | $0 |
Deferred | -107 | -1,110 |
Total income tax expense | ($107) | ($1,110) |
Income_taxes_Income_taxes_Deta
Income taxes Income taxes -(Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Income Tax Disclosure [Abstract] | ' | ' |
Continuing operations | ($107) | ($1,110) |
Discontinued operations | 0 | -153 |
Comprehensive provision for income taxes | ($107) | ($1,263) |
Income_taxes_Income_taxes_Deta1
Income taxes Income taxes -(Details 3) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Income Tax Disclosure [Abstract] | ' | ' |
Income tax benefit (expense) computed by applying the statutory rate | $37 | ($764) |
State income tax, net of federal tax benefit and increase in valuation allowance | 1,287 | -21 |
Non-deductible stock-based compensation | -116 | -175 |
Stock-based compensation tax deficiency | -141 | -291 |
Change in deferred tax valuation allowance | -1,078 | -9 |
Other items | -96 | 150 |
Total income tax expense | ($107) | ($1,110) |
Income_taxes_Details_4
Income taxes -(Details 4) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Significant components of deferred tax assets | ' | ' |
Net operating loss carry-forward | $287,796 | $284,890 |
Oil and natural gas properties and equipment | -314,097 | -278,735 |
Derivatives | 8,819 | -30,859 |
Stock-based compensation | 5,583 | 6,578 |
Accrued bonus | 188 | 3,740 |
Capitalized interest | 2,271 | 2,099 |
Other | -2,089 | -240 |
Gross deferred tax liability | -11,529 | -12,527 |
Valuation allowance | -1,237 | -132 |
Net deferred tax liability | -12,766 | -12,659 |
Net deferred tax assets and liabilities | ' | ' |
Deferred tax asset | 1,075 | 3,634 |
Deferred tax liability | -13,841 | -16,293 |
Net deferred tax liability | ($12,766) | ($12,659) |
Income_taxes_Additional_Inform
Income taxes - Additional Information (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Operating loss carry-forward | ' | ' | ' |
Unrecognized Tax Benefits | $0 | ' | ' |
Effective income tax rate (as a percent) | 35.00% | ' | ' |
Tax deficiency related to vested stock awards | 100,000 | 300,000 | ' |
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation, Potential Amount | 3,200,000 | ' | ' |
Deferred Tax Assets, Valuation Allowance | 1,237,000 | ' | 132,000 |
Federal | ' | ' | ' |
Operating loss carry-forward | ' | ' | ' |
Net operating loss carry-forwards | 813,700,000 | ' | ' |
State | ' | ' | ' |
Operating loss carry-forward | ' | ' | ' |
Net operating loss carry-forwards | 106,700,000 | ' | ' |
Charitable Contribution Carryforward | ' | ' | ' |
Operating loss carry-forward | ' | ' | ' |
Net operating loss carry-forwards | 3,500,000 | ' | ' |
Deferred Tax Assets, Valuation Allowance | $1,200,000 | ' | ' |
Derivatives_Derivative_positio
Derivatives - Derivative positions (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | |
Derivative financial instruments | ' | ' | |
Cash settlements received for early terminations of derivatives, net | $76,660 | $0 | |
Derivatives not designated as hedges | ' | ' | |
Derivative financial instruments | ' | ' | |
Number of open derivative contracts | 37 | ' | |
Puts | Oil derivatives | Remaining Year 2014 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (Bbls) | 405,000 | ' | |
Weighted average price (in dollars per Bbl/MMBtu) | 75 | ' | |
Puts | Oil derivatives | January 2015 - December 2015 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (Bbls) | 456,000 | ' | |
Weighted average price (in dollars per Bbl/MMBtu) | 75 | ' | |
Puts | Oil derivatives | January 2016 - December 2016 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (Bbls) | 0 | ' | |
Weighted average price (in dollars per Bbl/MMBtu) | 0 | ' | |
Swaps | Oil derivatives | Remaining Year 2014 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (Bbls) | 1,622,497 | ' | |
Weighted average price (in dollars per Bbl/MMBtu) | 94.44 | ' | |
Swaps | Oil derivatives | January 2015 - December 2015 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (Bbls) | ' | ' | |
Weighted average price (in dollars per Bbl/MMBtu) | ' | ' | |
Swaps | Oil derivatives | January 2016 - December 2016 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (Bbls) | ' | ' | |
Weighted average price (in dollars per Bbl/MMBtu) | ' | ' | |
Swaps | Natural gas derivatives | Remaining Year 2014 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (Bbls) | 4,950,000 | ' | |
Weighted average price (in dollars per Bbl/MMBtu) | 4.32 | ' | |
Swaps | Natural gas derivatives | January 2015 - December 2015 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (Bbls) | ' | ' | |
Weighted average price (in dollars per Bbl/MMBtu) | ' | ' | |
Swaps | Natural gas derivatives | January 2016 - December 2016 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (Bbls) | ' | ' | |
Weighted average price (in dollars per Bbl/MMBtu) | ' | ' | |
Swaps | Natural gas derivatives | Swap One | March 2014 - December 2014 | ' | ' | |
Derivative financial instruments | ' | ' | |
Aggregate volumes (in Bbls/MMBtu) | 3,060,000 | [1] | ' |
Swap price | 4.32 | [1] | ' |
Swaps | Natural gas derivatives | Swap Two | March 2014 - December 2014 | ' | ' | |
Derivative financial instruments | ' | ' | |
Aggregate volumes (in Bbls/MMBtu) | 2,448,000 | [1] | ' |
Swap price | 4.315 | [1] | ' |
Basis Swaps | Oil derivatives | Remaining Year 2014 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (Bbls) | 1,650,000 | [2] | ' |
Weighted average price (in dollars per Bbl/MMBtu) | -1 | [2] | ' |
Basis Swaps | Oil derivatives | January 2015 - December 2015 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (Bbls) | 0 | [2] | ' |
Weighted average price (in dollars per Bbl/MMBtu) | ' | [2] | ' |
Basis Swaps | Oil derivatives | January 2016 - December 2016 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (Bbls) | 0 | [2] | ' |
Weighted average price (in dollars per Bbl/MMBtu) | ' | [2] | ' |
Collars | Oil derivatives | Remaining Year 2014 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (Bbls) | 2,209,500 | ' | |
Weighted average floor price (in dollars per Bbl/MMBtu) | 86.42 | ' | |
Weighted average ceiling price (in dollars per Bbl/MMBtu) | 104.89 | ' | |
Collars | Oil derivatives | January 2015 - December 2015 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (Bbls) | 6,557,020 | ' | |
Weighted average floor price (in dollars per Bbl/MMBtu) | 79.81 | ' | |
Weighted average ceiling price (in dollars per Bbl/MMBtu) | 95.4 | ' | |
Collars | Oil derivatives | January 2016 - December 2016 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (Bbls) | 1,860,000 | ' | |
Weighted average floor price (in dollars per Bbl/MMBtu) | 80 | ' | |
Weighted average ceiling price (in dollars per Bbl/MMBtu) | 91.37 | ' | |
Collars | Natural gas derivatives | Remaining Year 2014 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (MMBtu) | 7,200,000 | ' | |
Weighted average floor price (in dollars per Bbl/MMBtu) | 3 | ' | |
Weighted average ceiling price (in dollars per Bbl/MMBtu) | 5.5 | ' | |
Collars | Natural gas derivatives | January 2015 - December 2015 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (MMBtu) | 8,160,000 | ' | |
Weighted average floor price (in dollars per Bbl/MMBtu) | 3 | ' | |
Weighted average ceiling price (in dollars per Bbl/MMBtu) | 6 | ' | |
Collars | Natural gas derivatives | January 2016 - December 2016 | ' | ' | |
Open positions | ' | ' | |
Hedged volume (MMBtu) | 0 | ' | |
Weighted average floor price (in dollars per Bbl/MMBtu) | 0 | ' | |
Weighted average ceiling price (in dollars per Bbl/MMBtu) | 0 | ' | |
[1] | (1) These natural gas derivatives are settled based on the Inside FERC West Texas Waha index price for the calculation period. | ||
[2] | The associated oil basis swap derivative is settled based on the differential between the WTI Argus index oil price and the Midland Argus oil futures. |
Derivatives_Gain_loss_on_deriv
Derivatives - Gain (loss) on derivatives (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Derivative financial instruments | ' | ' |
Change in net present value of deferred premiums paid for derivatives | $76,660,000 | $0 |
Cash settlements (paid) received for matured derivatives, net | -1,431,000 | 3,676,000 |
Derivatives not designated as hedges | ' | ' |
Derivative financial instruments | ' | ' |
Cash settlements (paid) received for matured derivatives, net | -1,431,000 | 3,676,000 |
Number of open derivative contracts | 37 | ' |
Interest Rate Swap | ' | ' |
Derivative financial instruments | ' | ' |
Number of Interest Rate Derivatives Held | 1 | ' |
Derivative, Fixed Interest Rate | 1.11% | ' |
Interest Rate Cap | ' | ' |
Derivative financial instruments | ' | ' |
Number of Interest Rate Derivatives Held | 1 | ' |
Derivative, Fixed Interest Rate | 3.00% | ' |
Commodity derivatives | Derivatives not designated as hedges | ' | ' |
Derivative financial instruments | ' | ' |
Cash settlements (paid) received for matured derivatives, net | -1,431,000 | 3,777,000 |
Interest rate derivatives | ' | ' |
Derivative financial instruments | ' | ' |
Derivative, Notional Amount | 100,000,000 | ' |
Number of open derivative contracts | 0 | ' |
Interest rate derivatives | Derivatives not designated as hedges | ' | ' |
Derivative financial instruments | ' | ' |
Cash settlements (paid) received for matured derivatives, net | $0 | ($101,000) |
Derivatives_Balance_sheet_pres
Derivatives - Balance sheet presentation (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | ||
Oil derivatives | ' | ' | ||
Fair value of derivatives outstanding on gross basis | ' | ' | ||
Deferred premium liability | $9,400,000 | $11,100,000 | ||
Natural gas derivatives | ' | ' | ||
Fair value of derivatives outstanding on gross basis | ' | ' | ||
Deferred premium liability | 1,400,000 | 1,600,000 | ||
Derivatives not designated as hedges | ' | ' | ||
Fair value of derivatives outstanding on gross basis | ' | ' | ||
Fair value, derivative assets | 39,178,000 | 141,153,000 | ||
Fair value, derivative liabilities | 61,568,000 | 59,096,000 | ||
Net derivative position | -22,390,000 | 82,057,000 | ||
Derivatives not designated as hedges | Oil derivatives | ' | ' | ||
Fair value of derivatives outstanding on gross basis | ' | ' | ||
Fair value, derivative assets | 38,699,000 | 140,496,000 | ||
Fair value, derivative liabilities | 58,984,000 | [1] | 56,818,000 | [1] |
Derivatives not designated as hedges | Natural gas derivatives | ' | ' | ||
Fair value of derivatives outstanding on gross basis | ' | ' | ||
Fair value, derivative assets | 479,000 | 657,000 | ||
Fair value, derivative liabilities | $2,584,000 | [2] | $2,278,000 | [2] |
[1] | The oil derivatives fair value includes a deferred premium liability of $9.4 million and $11.1 million as of March 31, 2014 and December 31, 2013, respectively. | |||
[2] | The natural gas derivatives fair value includes a deferred premium liability of $1.4 million and $1.6 million as of March 31, 2014 and December 31, 2013, respectively. |
Fair_value_measurements_Fair_v
Fair value measurements - Fair value hierarchy (Details) (USD $) | 3 Months Ended | |||||||||||||||||||||||||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 |
Deferred premiums | Deferred premiums | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | |
Minimum | Maximum | Level 1 | Level 1 | Level 1 | Level 1 | Level 1 | Level 1 | Level 2 | Level 2 | Level 2 | Level 2 | Level 2 | Level 2 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Total fair value | Total fair value | Total fair value | Total fair value | Total fair value | Total fair value | |
Commodity derivatives | Commodity derivatives | Deferred premiums | Deferred premiums | Commodity derivatives | Commodity derivatives | Deferred premiums | Deferred premiums | Commodity derivatives | Commodity derivatives | Deferred premiums | Deferred premiums | Commodity derivatives | Commodity derivatives | Deferred premiums | Deferred premiums | |||||||||||
Fair value measurement on a recurring basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivatives | ' | ' | $0 | $0 | $0 | $0 | $0 | $0 | ($11,600) | $94,741 | ($11,600) | $94,741 | $0 | $0 | ($10,790) | ($12,684) | $0 | $0 | ($10,790) | ($12,684) | ($22,390) | $82,057 | ($11,600) | $94,741 | ($10,790) | ($12,684) |
Discount rate used to discount deferred premium to net present value at contract trade date (as a percent) | 2.00% | 3.56% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_value_measurements_Cash_p
Fair value measurements - Cash payments required for deferred premium contracts (Details) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Fair Value Disclosures [Abstract] | ' |
Remaining 2014 | $5,460 |
2015 | 5,166 |
2016 | 358 |
Total | $10,984 |
Fair_value_measurements_Summar
Fair value measurements - Summary of changes in assets classified as Level 3 (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Changes in assets classified as Level 3 measurements | ' | ' | ||
Amortization of deferred premiums | ($65) | ($151) | ||
Derivative option contracts | ' | ' | ||
Changes in assets classified as Level 3 measurements | ' | ' | ||
Balance of Level 3 at the beginning of the period | -12,684 | -24,709 | ||
Amortization of deferred premiums | -65 | -151 | ||
Settlements | 1,959 | [1] | 2,422 | [1] |
Balance of Level 3 at the end of the period | ($10,790) | ($22,438) | ||
[1] | Three months ended March 31,(in thousands) 2014 2013Balance of Level 3 at beginning of period $(12,684) $(24,709)Change in net present value of deferred premiums for derivatives (65) (151)Settlements 1,959 2,422Balance of Level 3 at end of period $(10,790) $(22,438) |
Commitments_and_contingencies_
Commitments and contingencies (Details) (Drilling Contracts, USD $) | Mar. 31, 2014 |
In Millions, unless otherwise specified | |
Drilling Contracts | ' |
Other Commitments [Line Items] | ' |
Purchase commitment | $31.10 |
Net_income_loss_per_share_Deta
Net income (loss) per share (Details) (USD $) | 3 Months Ended |
Mar. 31, 2013 | |
February 2012 Awards | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' |
Options, weighted average exercise price | 24.11 |
February 2012 Awards | Stock Options | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' |
Antidilutive securities excluded from computation of net income per share | 431,086 |
February 2013 Awards | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' |
Options, weighted average exercise price | 17.34 |
February 2013 Awards | Stock Options | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' |
Antidilutive securities excluded from computation of net income per share | 989,456 |
Net_income_loss_per_share_Deta1
Net income (loss) per share - (Details 2) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Net income (loss) (numerator): | ' | ' |
Income (loss) from continuing operations—basic and diluted | ($213) | $1,137 |
Income from discontinued operations, net of tax—basic and diluted | 0 | 272 |
Net income (loss)—basic and diluted | ($213) | $1,409 |
Weighted average shares (denominator): | ' | ' |
Weighted average shares-basic (in shares) | 141,067 | 127,200 |
Non-vested restricted stock (in shares) | 0 | 1,651 |
Weighted average shares-diluted (in shares) | 141,067 | 128,851 |
Net income (loss) per share: | ' | ' |
Income (loss) from continuing operations, per basic share | $0 | $0.01 |
Income from discontinued operations, net of tax, per basic share | $0 | $0 |
Basic (in dollars per share) | $0 | $0.01 |
Income from continuing operations, per diluted share | $0 | $0.01 |
Income from discontinued operations, net of tax, per diluted share | $0 | $0 |
Diluted (in dollars per share) | $0 | $0.01 |
Variable_interest_entity_Detai
Variable interest entity (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Variable Interest Entity [Line Items] | ' | ' |
Investment in equity method investee | $11,300,000 | $938,000 |
Medallion Gathering And Processing LLC | Variable Interest Entity, Not Primary Beneficiary | ' | ' |
Variable Interest Entity [Line Items] | ' | ' |
Investment in equity method investee | 11,300,000 | 900,000 |
Ownership percentage | 49.00% | ' |
Equity Method Investment Ownership Percentage Held By Investment Partner | 51.00% | ' |
Voting percentage required for key decisions | 75.00% | ' |
Payments to Acquire Equity Method Investments In Next Twelve Months | 14,400,000 | ' |
Due to Related Parties, Capital Contribution Payable | 8,200,000 | ' |
Due To Related Parties, Minimum Volume Commitment Payable | $1,400,000 | ' |
Subsidiary_guarantees_Condense
Subsidiary guarantees - Condensed consolidating balance sheet (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Subsidiary guarantees | ' | ' |
Accounts receivable | $80,937 | $77,318 |
Other current assets | 569,854 | 230,291 |
Total oil and natural gas properties, net | 2,291,481 | 2,135,348 |
Total pipeline and gathering assets, net | 54,383 | 41,498 |
Total other fixed assets, net | 28,914 | 27,478 |
Investment in subsidiaries and equity method investee | 22,803 | 5,913 |
Total other long-term assets | 33,210 | 105,914 |
Total assets | 3,081,582 | 2,623,760 |
Accounts payable | 8,001 | 16,002 |
Other current liabilities | 251,541 | 237,967 |
Other long-term liabilities | 44,960 | 45,997 |
Long-term debt | 1,501,479 | 1,051,538 |
Stockholders’ equity | 1,275,601 | 1,272,256 |
Total liabilities and stockholders’ equity | 3,081,582 | 2,623,760 |
Laredo | ' | ' |
Subsidiary guarantees | ' | ' |
Accounts receivable | 85,030 | 77,318 |
Other current assets | 569,854 | 230,291 |
Total oil and natural gas properties, net | 2,291,481 | 2,135,348 |
Total pipeline and gathering assets, net | 0 | 0 |
Total other fixed assets, net | 28,914 | 27,478 |
Investment in subsidiaries and equity method investee | 57,036 | 36,666 |
Total other long-term assets | 33,210 | 105,914 |
Total assets | 3,065,525 | 2,613,015 |
Accounts payable | 8,001 | 12,216 |
Other current liabilities | 235,484 | 231,008 |
Other long-term liabilities | 44,960 | 45,997 |
Long-term debt | 1,501,479 | 1,051,538 |
Stockholders’ equity | 1,275,601 | 1,272,256 |
Total liabilities and stockholders’ equity | 3,065,525 | 2,613,015 |
Subsidiary Guarantors | ' | ' |
Subsidiary guarantees | ' | ' |
Accounts receivable | 37 | 0 |
Other current assets | 0 | 0 |
Total oil and natural gas properties, net | 0 | 0 |
Total pipeline and gathering assets, net | 54,383 | 41,498 |
Total other fixed assets, net | 0 | 0 |
Investment in subsidiaries and equity method investee | 22,803 | 5,913 |
Total other long-term assets | 0 | 0 |
Total assets | 77,223 | 47,411 |
Accounts payable | 4,130 | 3,786 |
Other current liabilities | 16,057 | 6,959 |
Other long-term liabilities | 0 | 0 |
Long-term debt | 0 | 0 |
Stockholders’ equity | 57,036 | 36,666 |
Total liabilities and stockholders’ equity | 77,223 | 47,411 |
Intercompany eliminations | ' | ' |
Subsidiary guarantees | ' | ' |
Accounts receivable | -4,130 | 0 |
Other current assets | 0 | 0 |
Total oil and natural gas properties, net | 0 | 0 |
Total pipeline and gathering assets, net | 0 | 0 |
Total other fixed assets, net | 0 | 0 |
Investment in subsidiaries and equity method investee | -57,036 | -36,666 |
Total other long-term assets | 0 | 0 |
Total assets | -61,166 | -36,666 |
Accounts payable | -4,130 | 0 |
Other current liabilities | 0 | 0 |
Other long-term liabilities | 0 | 0 |
Long-term debt | 0 | 0 |
Stockholders’ equity | -57,036 | -36,666 |
Total liabilities and stockholders’ equity | ($61,166) | ($36,666) |
Subsidiary_guarantees_Condense1
Subsidiary guarantees - Condensed consolidating statement of operations (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Subsidiary guarantees | ' | ' |
Total operating revenues | $173,310 | $163,705 |
Total operating costs and expenses | 113,272 | 119,200 |
Income (loss) from operations | 60,038 | 44,505 |
Interest expense, net | -28,903 | -25,334 |
Other, net | -31,241 | -16,924 |
Loss from continuing operations before income tax | -106 | 2,247 |
Income tax expense | -107 | -1,110 |
Loss from continuing operations | -213 | 1,137 |
Income from discontinued operations, net of tax | 0 | 272 |
Net income (loss) | -213 | 1,409 |
Laredo | ' | ' |
Subsidiary guarantees | ' | ' |
Total operating revenues | 173,214 | 163,669 |
Total operating costs and expenses | 112,510 | 120,831 |
Income (loss) from operations | 60,704 | 42,838 |
Interest expense, net | -28,903 | -25,334 |
Other, net | -31,907 | -13,960 |
Loss from continuing operations before income tax | -106 | 3,544 |
Income tax expense | -107 | -1,110 |
Loss from continuing operations | -213 | 2,434 |
Income from discontinued operations, net of tax | ' | -1,025 |
Net income (loss) | -213 | 1,409 |
Subsidiary Guarantors | ' | ' |
Subsidiary guarantees | ' | ' |
Total operating revenues | 1,030 | 2,646 |
Total operating costs and expenses | 1,696 | 979 |
Income (loss) from operations | -666 | 1,667 |
Interest expense, net | 0 | 0 |
Other, net | -33 | -64 |
Loss from continuing operations before income tax | -699 | 1,603 |
Income tax expense | 0 | 0 |
Loss from continuing operations | -699 | 1,603 |
Income from discontinued operations, net of tax | ' | 1,297 |
Net income (loss) | -699 | 2,900 |
Intercompany eliminations | ' | ' |
Subsidiary guarantees | ' | ' |
Total operating revenues | -934 | -2,610 |
Total operating costs and expenses | -934 | -2,610 |
Income (loss) from operations | 0 | 0 |
Interest expense, net | 0 | 0 |
Other, net | 699 | -2,900 |
Loss from continuing operations before income tax | 699 | -2,900 |
Income tax expense | 0 | 0 |
Loss from continuing operations | 699 | -2,900 |
Income from discontinued operations, net of tax | ' | 0 |
Net income (loss) | $699 | ($2,900) |
Subsidiary_guarantees_Condense2
Subsidiary guarantees - Condensed consolidating statement of cash flows (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Subsidiary guarantees | ' | ' |
Net cash flows provided by operating activities | $128,117 | $63,060 |
Net cash flows used in investing activities | -219,266 | -199,385 |
Net cash flows provided by financing activities | 440,515 | 134,125 |
Net increase in cash and cash equivalents | 349,366 | -2,200 |
Cash and cash equivalents at beginning of period | 198,153 | 33,224 |
Cash and cash equivalents at end of period | 547,519 | 31,024 |
Laredo | ' | ' |
Subsidiary guarantees | ' | ' |
Net cash flows provided by operating activities | 126,666 | 62,345 |
Net cash flows used in investing activities | -217,815 | -198,670 |
Net cash flows provided by financing activities | 440,515 | 134,125 |
Net increase in cash and cash equivalents | 349,366 | -2,200 |
Cash and cash equivalents at beginning of period | 198,153 | 33,224 |
Cash and cash equivalents at end of period | 547,519 | 31,024 |
Subsidiary Guarantors | ' | ' |
Subsidiary guarantees | ' | ' |
Net cash flows provided by operating activities | 752 | 3,615 |
Net cash flows used in investing activities | -752 | -3,615 |
Net cash flows provided by financing activities | 0 | 0 |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
Intercompany eliminations | ' | ' |
Subsidiary guarantees | ' | ' |
Net cash flows provided by operating activities | 699 | -2,900 |
Net cash flows used in investing activities | -699 | 2,900 |
Net cash flows provided by financing activities | 0 | 0 |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | $0 | $0 |
Subsequent_events_Details
Subsequent events (Details) (USD $) | 3 Months Ended | 3 Months Ended | ||||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | 8-May-14 | Mar. 31, 2014 | Mar. 31, 2013 | |
Senior Secured Credit Facility | Senior Secured Credit Facility | Medallion Gathering And Processing LLC | Medallion Gathering And Processing LLC | |||
Subsequent Event | Variable Interest Entity, Not Primary Beneficiary | Variable Interest Entity, Not Primary Beneficiary | ||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' |
Payments to Acquire Equity Method Investments | $11,300,000 | $938,000 | ' | ' | $11,300,000 | $900,000 |
Due to Related Parties, Capital Contribution Payable | ' | ' | ' | ' | 8,200,000 | ' |
Borrowing capacity | ' | ' | 812,500,000 | 1,000,000,000 | ' | ' |
Aggregate elected commitment amount | ' | ' | ' | $825,000,000 | ' | ' |
Subsequent_events_New_derivati
Subsequent events - New derivative contracts (Details) (Subsequent Event) | 8-May-14 | |
bbl | ||
Swap 2 January 2016 - December 2016 | Swaps | ' | |
Subsequent Event [Line Items] | ' | |
Aggregate volumes (in Bbls/MMBtu) | 933,300 | |
Swap price | 84.8 | |
Floor price | 0 | |
Ceiling price | 0 | |
Swap 1 January 2016 - December 2016 | Swaps | ' | |
Subsequent Event [Line Items] | ' | |
Aggregate volumes (in Bbls/MMBtu) | 640,500 | |
Swap price | 84.85 | |
Floor price | 0 | |
Ceiling price | 0 | |
Collar May 2014 - December 2014 | Collars | ' | |
Subsequent Event [Line Items] | ' | |
Aggregate volumes (in Bbls/MMBtu) | 3,797,500 | [1] |
Swap price | 0 | [1] |
Floor price | 4 | [1] |
Ceiling price | 5.5 | [1] |
Collar January 2015 - December 2015 | Collars | ' | |
Subsequent Event [Line Items] | ' | |
Aggregate volumes (in Bbls/MMBtu) | 20,440,000 | [1] |
Swap price | 0 | [1] |
Floor price | 3 | [1] |
Ceiling price | 5.95 | [1] |
Collar January 2016 - December 2016 | Collars | ' | |
Subsequent Event [Line Items] | ' | |
Aggregate volumes (in Bbls/MMBtu) | 18,666,000 | [1] |
Swap price | 0 | [1] |
Floor price | 3 | [1] |
Ceiling price | 5.6 | [1] |
[1] | These natural gas derivatives are settled based on the Inside FERC West Texas Waha index price for the calculation period. |
Supplementary_information_Deta
Supplementary information (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | |||
Property acquisition costs: | ' | ' | ||
Proved | $25,000 | $0 | ||
Unproved | 7,280,000 | 0 | ||
Exploration | 8,499,000 | 8,761,000 | ||
Development costs | 188,313,000 | [1] | 157,316,000 | [1] |
Total costs incurred | 204,117,000 | 166,077,000 | ||
Asset retirement obligations included in development costs | $600,000 | $600,000 | ||
[1] | The costs incurred for oil and natural gas development activities include $0.6 million in asset retirement obligations for the three months ended March 31, 2014 and 2013 |