Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 4-May-15 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Laredo Petroleum, Inc. | |
Entity Central Index Key | 1528129 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 213,878,297 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | Yes |
Consolidated_balance_sheets
Consolidated balance sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $569,093 | $29,321 |
Accounts receivable, net | 110,003 | 126,929 |
Derivatives | 195,078 | 194,601 |
Other current assets | 27,430 | 14,402 |
Total current assets | 901,604 | 365,253 |
Oil and natural gas properties, full cost method: | ||
Evaluated properties | 4,692,853 | 4,446,781 |
Unevaluated properties not being amortized | 307,845 | 342,731 |
Midstream service assets | 139,224 | 117,052 |
Other fixed assets | 60,901 | 56,165 |
Total property and equipment | 5,200,823 | 4,962,729 |
Less accumulated depletion, depreciation, amortization and impairment | -1,680,364 | -1,608,647 |
Net property and equipment | 3,520,459 | 3,354,082 |
Derivatives | 118,587 | 117,788 |
Debt issuance costs, net | 33,513 | 28,463 |
Investment in equity method investee | 72,350 | 58,288 |
Other assets, net | 8,510 | 8,675 |
Total assets | 4,655,023 | 3,932,549 |
Current liabilities: | ||
Accounts payable | 30,410 | 39,008 |
Short-term debt | 551,230 | 0 |
Undistributed revenue and royalties | 46,216 | 65,438 |
Accrued capital expenditures | 118,175 | 148,241 |
Deferred income taxes | 73,753 | 71,191 |
Derivatives | 0 | 115 |
Other current liabilities | 73,048 | 101,032 |
Total current liabilities | 892,832 | 425,025 |
Long-term debt | 1,300,000 | 1,801,295 |
Deferred income taxes | 106,835 | 105,754 |
Asset retirement obligations | 32,136 | 31,042 |
Other noncurrent liabilities | 4,108 | 6,232 |
Total liabilities | 2,335,911 | 2,369,348 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 50,000,000 shares authorized and zero issued at March 31, 2015 and December 31, 2014 | 0 | 0 |
Common stock, $0.01 par value, 450,000,000 shares authorized, and 213,883,270 and 143,686,491 issued, at March 31, 2015 and December 31, 2014, respectively | 2,139 | 1,437 |
Additional paid-in capital | 2,064,852 | 1,309,171 |
Retained earnings | 252,121 | 252,593 |
Total stockholders' equity | 2,319,112 | 1,563,201 |
Total liabilities and stockholders' equity | $4,655,023 | $3,932,549 |
Consolidated_balance_sheets_Pa
Consolidated balance sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | 213,883,270 | 143,686,491 |
Consolidated_statements_of_ope
Consolidated statements of operations (USD $) | 3 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Revenues: | ||||
Oil, NGL and natural gas sales | $118,118 | $173,214 | ||
Midstream service revenues | 1,309 | 96 | ||
Sales of purchased oil | 31,267 | 0 | ||
Total revenues | 150,694 | 173,310 | ||
Costs and expenses: | ||||
Lease operating expenses | 32,380 | 21,785 | ||
Midstream service expenses | 1,574 | 845 | ||
Production and ad valorem taxes | 9,086 | 12,450 | ||
Minimum volume commitments | 1,656 | 516 | ||
Costs of purchased oil | 31,200 | 0 | ||
General and administrative | 21,855 | [1] | 27,654 | [1] |
Restructuring expenses | 6,042 | 0 | ||
Accretion of asset retirement obligations | 579 | 415 | ||
Depletion, depreciation and amortization | 71,942 | [2] | 49,607 | [2] |
Impairment expense | 878 | 0 | ||
Total costs and expenses | 177,192 | 113,272 | ||
Operating income (loss) | -26,498 | 60,038 | ||
Non-operating income (expense): | ||||
Gain (loss) on derivatives, net | 63,155 | -31,112 | ||
Income (loss) from equity method investee | -433 | 16 | ||
Interest expense | -32,414 | [3] | -28,986 | [3] |
Interest and other income | 123 | 83 | ||
Write-off of debt issuance costs | 0 | -124 | ||
Loss on disposal of assets, net | -762 | -21 | ||
Non-operating income (expense), net | 29,669 | -60,144 | ||
Income (loss) before income taxes | 3,171 | -106 | ||
Income tax expense: | ||||
Deferred | -3,643 | -107 | ||
Total income tax expense | -3,643 | -107 | ||
Net loss | ($472) | ($213) | ||
Net income (loss), basic (in dollars per share) | $0 | $0 | ||
Net income (loss), diluted (in dollars per share) | $0 | $0 | ||
Weighted-average common shares outstanding: | ||||
Weighted average shares-basic (in shares) | 162,426 | [4] | 141,067 | [4] |
Weighted average shares-diluted (in shares) | 162,426 | [4] | 141,067 | [4] |
[1] | General and administrative costs were allocated based on the number of employees in the respective segment as of March 31, 2015 and 2014, respectively. However, the payroll and deferred compensation costs component of general and administrative for each segment is based on actual costs for the three months ended March 31, 2015. | |||
[2] | Depletion, depreciation and amortization for other fixed assets related to office furnishings were allocated based on the number of employees in the respective segment as of March 31, 2015 and 2014, respectively. | |||
[3] | Interest expense is allocated based on gross property and equipment and total contributions to the Company's equity method investee as of March 31, 2015 and 2014, respectively. | |||
[4] | For the three months ended MarchB 31, 2015, weighted-average common shares outstanding used in the computation of basic and diluted net loss per share attributable to stockholders has been computed taking into account the March 2015 Equity Offering. |
Consolidated_statement_of_stoc
Consolidated statement of stockholders' equity (USD $) | Total | Common Stock | Additional paid-in capital | Treasury Stock (at cost) | Retained earnings |
In Thousands, except Share data, unless otherwise specified | |||||
Balance, beginning of period at Dec. 31, 2014 | $1,563,201 | $1,437 | $1,309,171 | $0 | $252,593 |
Balance, beginning of period (in shares) at Dec. 31, 2014 | 143,686,000 | 0 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Restricted stock awards | 18 | -18 | |||
Restricted stock awards (in shares) | 1,749,000 | ||||
Restricted stock forfeitures | -4 | 4 | |||
Restricted stock forfeitures (in shares) | -368,000 | ||||
Vested restricted stock exchanged for tax withholding | -2,283 | -2,283 | |||
Vested restricted stock exchanged for tax withholding (in shares) | 184,000 | ||||
Retirement of treasury stock | -2 | -2,281 | 2,283 | ||
Retirement of treasury stock (in shares) | -184,000 | -184,000 | |||
Equity issuance, net of offering costs | 754,163 | 690 | 753,473 | ||
Equity issuance, net of offering costs (in shares) | 69,000,000 | ||||
Stock-based compensation | 4,503 | 4,503 | |||
Net loss | -472 | -472 | |||
Balance, end of period (in shares) | 213,883,000 | 0 | |||
Balance, end of period at Mar. 31, 2015 | $2,319,112 | $2,139 | $2,064,852 | $0 | $252,121 |
Consolidated_statements_of_cas
Consolidated statements of cash flows (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Cash flows from operating activities: | ||||
Net loss | ($472) | ($213) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Deferred income tax expense | 3,643 | 107 | ||
Depletion, depreciation and amortization | 71,942 | [1] | 49,607 | [1] |
Impairment expense | 878 | 0 | ||
Non-cash stock-based compensation, net of amounts capitalized | 4,788 | 4,329 | ||
Accretion of asset retirement obligations | 579 | 415 | ||
(Gain) loss on derivatives, net | -63,155 | 31,112 | ||
Cash settlements received (paid) for matured derivatives, net | 63,141 | -1,431 | ||
Cash settlements received for early terminations of derivatives, net | 0 | 76,660 | ||
Change in net present value of deferred premiums paid for derivatives | 43 | 65 | ||
Cash premiums paid for derivatives | -1,421 | -1,959 | ||
Amortization of debt issuance costs | 1,377 | 1,207 | ||
Write-off of debt issuance costs | 0 | 124 | ||
Cash settlement of performance unit awards | -2,738 | 0 | ||
Other | 1,163 | -47 | ||
Decrease (increase) in accounts receivable | 16,926 | -3,619 | ||
Increase in other assets | -14,478 | -4,616 | ||
Decrease in accounts payable | -8,598 | -8,001 | ||
Decrease in undistributed revenues and royalties | -19,222 | -1,052 | ||
Decrease in other accrued liabilities | -28,714 | -14,893 | ||
Increase in other noncurrent liabilities | 187 | 224 | ||
Increase in fair value of performance unit awards | 996 | 98 | ||
Net cash provided by operating activities | 26,865 | 128,117 | ||
Capital expenditures: | ||||
Acquisition of mineral interests | 0 | -7,305 | ||
Oil and natural gas properties | -243,733 | -187,040 | ||
Midstream service assets | -20,434 | -10,520 | ||
Other fixed assets | -3,919 | -3,369 | ||
Investment in equity method investee | -14,495 | -11,300 | ||
Proceeds from dispositions of capital assets, net of costs | 35 | 268 | ||
Net cash used in investing activities | -282,546 | -219,266 | ||
Cash flows from financing activities: | ||||
Borrowings on Senior Secured Credit Facility | 175,000 | 0 | ||
Payments on Senior Secured Credit Facility | -475,000 | 0 | ||
Proceeds from issuance of common stock, net of offering costs | 754,163 | 0 | ||
Purchase of treasury stock | -2,283 | -3,274 | ||
Proceeds from exercise of employee stock options | 0 | 1,585 | ||
Payments for debt issuance costs | -6,427 | -7,796 | ||
Net cash provided by financing activities | 795,453 | 440,515 | ||
Net increase in cash and cash equivalents | 539,772 | 349,366 | ||
Cash and cash equivalents at beginning of period | 29,321 | 198,153 | ||
Cash and cash equivalents at end of period | 569,093 | 547,519 | ||
March 2023 Notes | ||||
Cash flows from financing activities: | ||||
Issuance of Notes | 350,000 | 0 | ||
January 2022 Notes | ||||
Cash flows from financing activities: | ||||
Issuance of Notes | $0 | $450,000 | ||
[1] | Depletion, depreciation and amortization for other fixed assets related to office furnishings were allocated based on the number of employees in the respective segment as of March 31, 2015 and 2014, respectively. |
Organization
Organization | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization |
Laredo Petroleum, Inc. ("Laredo"), together with its subsidiaries, Laredo Midstream Services, LLC ("LMS") and Garden City Minerals, LLC ("GCM"), is an independent energy company focused on the acquisition, exploration and development of oil and natural gas properties primarily in the Permian Basin in West Texas. LMS and GCM (together, the "Guarantors") guarantee all of Laredo's debt instruments. | |
In these notes, the "Company," (i) when used in the present tense, prospectively or from October 24, 2014 to March 31, 2015, refers to Laredo, LMS and GCM collectively, unless the context indicates otherwise or (ii) when used for historical periods from December 31, 2013 to October 23, 2014, refers to Laredo and LMS collectively, unless the context indicates otherwise. All amounts, dollars and percentages presented in these unaudited consolidated financial statements and the related notes are rounded and therefore approximate. | |
The Company operates in two business segments, which are (i) exploration and production and (ii) midstream and marketing. The exploration and production segment is engaged in the acquisition, exploration and development of oil and natural gas properties primarily in the Permian Basin in West Texas. The midstream and marketing segment provides the exploration and production segment and certain third parties with (i) any products and services that need to be delivered by infrastructure, including oil and natural gas gathering services as well as rig fuel, natural gas lift and water in the primary drilling corridors and (ii) takeaway optionality in the field and firm service commitments to maximize oil, natural gas liquids ("NGL") and natural gas revenues. |
Basis_of_presentation_and_sign
Basis of presentation and significant accounting policies | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Basis of presentation and significant accounting policies | Basis of presentation and significant accounting policies | ||||||||
a. 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 the investee's net income (loss) is included in the unaudited consolidated statements of operations. See Note 14 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 accompanying consolidated financial statements have not been audited by the Company's independent registered public accounting firm, except that the consolidated balance sheet as of December 31, 2014 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, 2015 and the results of operations and cash flows for the three months ended March 31, 2015 and 2014. | |||||||||
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 the 2014 Annual Report. | |||||||||
. 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. 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, NGL 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 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. | |||||||||
Reclassifications | |||||||||
Certain amounts in the accompanying unaudited consolidated financial statements have been reclassified to conform to the 2015 presentation. These reclassifications had no impact to previously reported total assets, total liabilities, net income or loss, stockholders' equity or cash flows. | |||||||||
. Treasury stock | |||||||||
Laredo's employees may elect to have the Company withhold shares of stock to satisfy their tax withholding obligations that arise upon the lapse of restrictions on their stock awards. Such treasury stock is recorded at cost and retired upon acquisition. | |||||||||
. Accounts receivable | |||||||||
The Company sells oil, NGL and natural gas to various customers and participates with other parties in the drilling, completion and operation of oil and natural gas wells. The Company's accounts receivable 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 of 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 amounts 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-15 | 31-Dec-14 | |||||||
Oil, NGL and natural gas sales | $ | 44,859 | $ | 57,070 | |||||
Joint operations, net(1) | 25,752 | 33,808 | |||||||
Matured derivatives | 20,829 | 16,098 | |||||||
Purchased oil and other product sales | 17,963 | 18,917 | |||||||
Other | 600 | 1,036 | |||||||
Total | $ | 110,003 | $ | 126,929 | |||||
______________________________________________________________________________ | |||||||||
-1 | Accounts receivable for joint operations are presented net of an allowance for doubtful accounts of $0.1 million and $0.8 million as of March 31, 2015 and December 31, 2014, respectively. | ||||||||
. 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. | |||||||||
Derivatives are recorded at fair value and are included net on the unaudited consolidated balance sheets as assets or liabilities. The Company nets the fair value of derivatives by counterparty 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 (see Notes 8 and 9). | |||||||||
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 8). | |||||||||
. Property and equipment | |||||||||
The following table sets forth the Company's property and equipment for the periods presented: | |||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | |||||||
Evaluated oil and natural gas properties | $ | 4,692,853 | $ | 4,446,781 | |||||
Less accumulated depletion and impairment | (1,654,807 | ) | (1,586,237 | ) | |||||
Evaluated oil and natural gas properties, net | 3,038,046 | 2,860,544 | |||||||
Unevaluated properties not being amortized | 307,845 | 342,731 | |||||||
Midstream service assets | 139,224 | 117,052 | |||||||
Less accumulated depreciation | (10,214 | ) | (8,590 | ) | |||||
Midstream service assets, net | 129,010 | 108,462 | |||||||
Depreciable other fixed assets | 47,289 | 42,933 | |||||||
Less accumulated depreciation and amortization | (15,343 | ) | (13,820 | ) | |||||
Depreciable other fixed assets, net | 31,946 | 29,113 | |||||||
Land | 13,612 | 13,232 | |||||||
Total property and equipment, net | $ | 3,520,459 | $ | 3,354,082 | |||||
For the three months ended March 31, 2015 and 2014, depletion expense was $16.08 per barrel of oil equivalent ("BOE") sold and $19.61 per BOE sold, respectively. | |||||||||
The Company uses the full cost method of accounting for its oil and natural gas properties. Under this method, all acquisition, exploration and development costs, including certain related employee costs, incurred for the purpose of finding oil and natural gas are capitalized and amortized on a composite unit of production method based on proved oil, NGL and natural gas reserves. Such amounts include the cost of drilling and equipping productive wells, dry hole costs, lease acquisition costs, delay rentals and other costs related to such activities. Costs, including related employee costs, associated with production and general corporate activities are expensed in the period incurred. Sales of oil and natural gas properties, whether or not being amortized currently, are accounted for as adjustments of capitalized costs, with no gain or loss recognized, unless such adjustments would significantly alter the relationship between capitalized costs and proved reserves of oil and natural gas. | |||||||||
The Company excludes the costs directly associated with acquisition and evaluation of unevaluated properties from the depletion calculation until it is determined whether or not proved reserves can be assigned to the properties. The Company capitalizes a portion of its interest costs on its unevaluated properties. Capitalized interest becomes a part of the cost of the unevaluated properties and is subject to depletion when proved reserves can be assigned to the associated properties. All items classified as unevaluated property are assessed on a quarterly basis for possible impairment or reduction in value. The assessment includes consideration of the following factors, among others: intent to drill, remaining lease term, geological and geophysical evaluations, drilling results and activity, the assignment of evaluated reserves, and the economic viability of development if proved reserves are assigned. During any period in which these factors indicate an impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and are then subject to depletion. | |||||||||
The full cost ceiling is based principally on the estimated future net cash flows from proved oil and natural gas properties discounted at 10%. Full cost companies are required to use the unweighted arithmetic average first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period, unless prices were defined by contractual arrangements, to calculate the discounted future revenues. In the event the unamortized cost of evaluated oil and natural gas properties being amortized exceeds the full cost ceiling, as defined by the SEC, the excess is charged to expense in the period such excess occurs. Once incurred, a write-down of oil and natural gas properties is not reversible. | |||||||||
. Debt issuance costs | |||||||||
Debt issuance 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 $6.4 million of debt issuance costs during the three months ended March 31, 2015 as a result of the issuance of the March 2023 Notes (as defined below). The Company capitalized $7.8 million of debt issuance costs during the three months ended March 31, 2014 as a result of the issuance of the January 2022 Notes (as defined below). The Company had total debt issuance costs of $33.5 million and $28.5 million, net of accumulated amortization of $20.7 million and $19.4 million, as of March 31, 2015 and December 31, 2014, 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 of debt issuance costs during the three months ended March 31, 2014. No debt issuance costs were written-off during the three months ended March 31, 2015. See Notes 5.a, 5.b and 5.e for definition of and information regarding the March 2023 Notes, January 2022 Notes and the Senior Secured Credit Facility, respectively. | |||||||||
Future amortization expense of debt issuance costs as of March 31, 2015 is as follows: | |||||||||
(in thousands) | |||||||||
Remaining 2015 | $ | 4,587 | |||||||
2016 | 6,165 | ||||||||
2017 | 6,236 | ||||||||
2018 | 6,026 | ||||||||
2019 | 2,913 | ||||||||
Thereafter | 7,586 | ||||||||
Total | $ | 33,513 | |||||||
. Other current assets and liabilities | |||||||||
Other current assets consist of the following components for the periods presented: | |||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | |||||||
Prepaid expenses | $ | 18,043 | $ | 6,451 | |||||
Materials and supplies inventory and other | 9,387 | 7,951 | |||||||
Total other current assets | $ | 27,430 | $ | 14,402 | |||||
Other current liabilities consist of the following components for the periods presented: | |||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | |||||||
Accrued interest payable | $ | 27,969 | $ | 37,689 | |||||
Lease operating expense payable | 17,121 | 11,963 | |||||||
Other accrued liabilities | 27,958 | 51,380 | |||||||
Total other current liabilities | $ | 73,048 | $ | 101,032 | |||||
. 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 depletion, or for midstream asset retirement cost through depreciation, of the associated 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) estimated removal and/or remediation costs for midstream assets, (iv) estimated remaining life of midstream assets, (v) future inflation factors and (vi) 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 the periods presented: | |||||||||
(in thousands) | Three months ended March 31, 2015 | Year ended December 31, 2014 | |||||||
Liability at beginning of period | $ | 32,198 | $ | 21,743 | |||||
Liabilities added due to acquisitions, drilling, midstream service asset construction and other | 515 | 6,370 | |||||||
Accretion expense | 579 | 1,787 | |||||||
Liabilities settled upon plugging and abandonment | (188 | ) | (450 | ) | |||||
Revision of estimates | — | 2,748 | |||||||
Liability at end of period | $ | 33,104 | $ | 32,198 | |||||
. 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 assets and liabilities approximate their fair values. See Note 5 for fair value disclosures related to the Company's debt obligations. The Company carries its derivatives at fair value. See Notes 8 and 9 for details regarding the fair value of the Company's derivatives. | |||||||||
. Compensation awards | |||||||||
Stock-based compensation expense is included in "General and administrative" in the Company's unaudited consolidated statements of operations over the awards' vesting periods and is based on their grant date fair value. The Company utilizes the closing stock price on the grant date, 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. The Company capitalizes a portion of stock-based compensation for employees who are directly involved in the acquisition, exploration and development of its oil and gas 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 6 for further discussion regarding the restricted stock awards, restricted stock option awards, performance share awards and performance unit awards. | |||||||||
. 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. Environmental expenditures are expensed in the period incurred. 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, 2015 or December 31, 2014. | |||||||||
. Non-cash investing and supplemental cash flow information | |||||||||
The following presents the non-cash investing and supplemental cash flow information for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2015 | 2014 | |||||||
Non-cash investing information: | |||||||||
Change in accrued capital expenditures | $ | (30,066 | ) | $ | 10,622 | ||||
Change in accrued capital contribution to equity method investee | $ | — | $ | 5,574 | |||||
Capitalized asset retirement cost | $ | 515 | $ | 576 | |||||
Supplemental cash flow information: | |||||||||
Capitalized interest | $ | 98 | $ | — | |||||
Equity_Offering
Equity Offering | 3 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
Equity Offering | Equity offering |
On March 5, 2015, the Company completed the sale of 69,000,000 shares of Laredo's common stock at a price to the public of $11.05 per share (the "March 2015 Equity Offering"). The Company received net proceeds of $754.2 million, after underwriting discounts, commissions and offering expenses. Entities affiliated with Warburg Pincus LLC ("Warburg Pincus") purchased 29,800,000 shares in the March 2015 Equity Offering, following which Warburg Pincus owned 41.0% of Laredo's common stock. There were no comparative offerings of the Company's stock during the three months ended March 31, 2014. |
Acquisitions_Notes
Acquisitions (Notes) | 3 Months Ended |
Mar. 31, 2015 | |
Acquisition and Divestitures [Abstract] | |
Acquisitions | Acquisitions |
a. 2014 acquisition of leasehold interests | |
On August 28, 2014, the Company completed a material acquisition of leasehold interests totaling 8,156 net acres in the Midland Basin, primarily within the Company's core development area, for $192.5 million. The acquisition was accounted for as an acquisition of assets. | |
b. 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. These mineral interests entitle the Company to receive royalty interests on all production from this acreage with no additional future capital or operating expenses required. As such, the purchase was accounted for as an acquisition of assets. | |
c. 2014 acquisitions of evaluated and unevaluated oil and natural gas properties | |
The Company accounts for acquisitions of evaluated and unevaluated oil and natural gas properties under the acquisition method of accounting. Accordingly, the Company conducts assessments of net assets acquired and recognizes amounts for identifiable assets acquired and liabilities assumed at the estimated acquisition date fair values, while transaction and integration costs associated with the acquisitions are expensed as incurred. | |
The Company makes various assumptions in estimating the fair values of assets acquired and liabilities assumed. The most significant assumptions relate to the estimated fair values of evaluated and unevaluated oil and natural gas properties. The fair values of these properties are measured using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation include estimates of: (i) reserves, (ii) future operating and development costs, (iii) future commodity prices and (iv) a market-based weighted-average cost of capital rate. The market-based weighted-average cost of capital rate is subject to additional project-specific risk factors. To compensate for the inherent risk of estimating the value of the unevaluated properties, the discounted future net revenues of probable and possible reserves are reduced by additional risk-weighting factors. | |
On June 11, 2014, the Company completed the acquisition of evaluated and unevaluated oil and natural gas properties, totaling 460 net acres, located in Reagan County, Texas for $4.7 million, net of closing adjustments. On June 23, 2014, the Company completed the acquisition of evaluated and unevaluated oil and natural gas properties, totaling 24 net acres, located in Glasscock County, Texas for $1.8 million. The results of operations prior to June 2014 do not include results from these acquisitions. |
Debt
Debt | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||
Debt | Debt | ||||||||||||||||
a. March 2023 Notes | |||||||||||||||||
On March 18, 2015, the Company completed an offering of $350.0 million in aggregate principal amount of 6 1/4% senior unsecured notes due 2023 (the "March 2023 Notes"), and entered into an Indenture (the "Base Indenture"), as supplemented by the Supplemental Indenture (the "Supplemental Indenture" and, together with the Base Indenture, the "Indenture"), among Laredo, LMS and GCM, as guarantors, and Wells Fargo Bank, National Association, as trustee. The March 2023 Notes will mature on March 15, 2023 with interest accruing at a rate of 6 1/4% per annum and payable semi-annually in cash in arrears on March 15 and September 15 of each year, commencing September 15, 2015. The March 2023 Notes are fully and unconditionally guaranteed on a senior unsecured basis by LMS, GCM and certain of the Company's future restricted subsidiaries, subject to certain automatic customary releases, including the sale, disposition, or transfer of all of the capital stock or of all or substantially all of the assets of a subsidiary guarantor to one or more persons that are not the Company or a restricted subsidiary, exercise of legal defeasance or covenant defeasance options or satisfaction and discharge of the Indenture, designation of a subsidiary guarantor as a non-guarantor restricted subsidiary or as an unrestricted subsidiary in accordance with the Indenture, release from guarantee under the Senior Secured Credit Facility, or liquidation or dissolution (collectively, the "Releases"). | |||||||||||||||||
The March 2023 Notes were offered and sold pursuant to a prospectus supplement dated March 4, 2015 and the base prospectus dated March 22, 2013, relating to the Company's effective shelf registration statement on Form S-3 (File No. 333-187479). The Company received net proceeds of $343.6 million from the offering, after deducting the initial purchasers' discount and the estimated outstanding offering expenses. In April 2015, the Company used the proceeds of the offering to fund a portion of the Company's redemption of the January 2019 Notes (defined below). See Note 19.a for additional discussion of this early redemption. | |||||||||||||||||
The Company may redeem, at its option, all or part of the March 2023 Notes at any time on or after March 15, 2018, at the applicable redemption price plus accrued and unpaid interest to, but not including, the date of redemption. Further, before March 15, 2018, the Company may on one or more occasions redeem up to 35% of the aggregate principal amount of the March 2023 Notes in an amount not exceeding the net proceeds from one or more private or public equity offerings at a redemption price of 106.25% of the principal amount of the March 2023 Notes, plus accrued and unpaid interest to the date of redemption, if at least 65% of the aggregate principal amount of the March 2023 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 March 15, 2016, the Company may redeem all, but not less than all, of the March 2023 Notes at a redemption price equal to 110% of the principal amount of the March 2023 Notes plus any accrued and unpaid interest to, but not including, the date of redemption. | |||||||||||||||||
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"). The January 2022 Notes will mature on January 15, 2022 and bear an interest rate of 5 5/8% per annum, 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 fully and unconditionally guaranteed on a senior unsecured basis by LMS, GCM and certain of the Company's future restricted subsidiaries, subject to certain Releases. | |||||||||||||||||
. 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 LMS, GCM and certain of the Company's future restricted subsidiaries, subject to certain Releases. | |||||||||||||||||
. January 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 "January 2019 Notes"). The January 2019 Notes were due to mature on February 15, 2019 and bore 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 January 2019 Notes were fully and unconditionally guaranteed on a senior unsecured basis by LMS, GCM and certain of the Company's future restricted subsidiaries, subject to certain Releases. | |||||||||||||||||
Utilizing proceeds from the March 2023 Notes and the March 2015 Equity Offering, the Company redeemed the January 2019 Notes in full on April 6, 2015. As such, the Company classified the January 2019 Notes as "Short-term debt" in the March 31, 2015 unaudited consolidated balance sheet. See Note 19.a for discussion of the early redemption of the January 2019 Notes. | |||||||||||||||||
. Senior Secured Credit Facility | |||||||||||||||||
As of March 31, 2015, the Fourth Amended and Restated Credit Agreement (as amended, the "Senior Secured Credit Facility"), which matures on November 4, 2018, had a maximum credit amount of $2.0 billion, a borrowing base of $1.15 billion and an aggregate elected commitment of $900.0 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, 2015. 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. No letters of credit were outstanding as of March 31, 2015 or 2014. | |||||||||||||||||
Subsequent to March 31, 2015, the Company made borrowings on the Senior Secured Credit Facility and the borrowing base and the aggregate elected commitment amounts were increased. See Note 19.b for additional information. | |||||||||||||||||
. 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 values of the Company's debt for the periods presented: | |||||||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||
(in thousands) | Carrying | Fair | Carrying | Fair | |||||||||||||
value | value | value | value | ||||||||||||||
January 2019 Notes(1) | $ | 551,230 | $ | 576,653 | $ | 551,295 | $ | 550,000 | |||||||||
January 2022 Notes | 450,000 | 436,500 | 450,000 | 396,014 | |||||||||||||
May 2022 Notes | 500,000 | 519,375 | 500,000 | 467,529 | |||||||||||||
March 2023 Notes | 350,000 | 350,875 | — | — | |||||||||||||
Senior Secured Credit Facility | — | — | 300,000 | 300,279 | |||||||||||||
Total value of debt | $ | 1,851,230 | $ | 1,883,403 | $ | 1,801,295 | $ | 1,713,822 | |||||||||
______________________________________________________________________________ | |||||||||||||||||
-1 | The carrying value of the January 2019 Notes includes the October Notes unamortized bond premium of $1.2 million and $1.3 million as of March 31, 2015 and December 31, 2014, respectively. | ||||||||||||||||
The fair values of the debt outstanding on the January 2019 Notes, the January 2022 Notes, May 2022 Notes and the March 2023 Notes were determined using the March 31, 2015 and December 31, 2014 quoted market price (Level 1) for each respective instrument. The fair value of the outstanding debt on the Senior Secured Credit Facility as of December 31, 2014 was estimated utilizing pricing models for similar instruments (Level 2). See Note 9 for information about fair value hierarchy levels. |
Employee_compensation
Employee compensation | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
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 option awards, performance share awards, performance unit 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 awards expected to vest 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 and its performance unit awards are accounted for as liability awards. Stock-based compensation is included in "General and administrative" in the unaudited consolidated statements of operations. The Company capitalizes a portion of stock-based compensation for employees who are directly involved in the acquisition, exploration and development of oil and natural gas 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. | |||||||||||
a. Restricted stock awards | |||||||||||
All restricted stock awards are treated as issued and outstanding in the accompanying unaudited consolidated financial statements. Per the award agreement terms, 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, 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 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 of the grant date and (v) fully on the third anniversary of the grant date. Restricted stock awards granted to non-employee directors vest fully on the first anniversary of the grant date. | |||||||||||
The following table reflects the outstanding restricted stock awards for the three months ended March 31, 2015: | |||||||||||
(in thousands, except for weighted-average grant date fair values) | Restricted | Weighted-average | |||||||||
stock | grant date | ||||||||||
awards | fair value (per award) | ||||||||||
Outstanding at December 31, 2014 | 2,205 | $ | 22.63 | ||||||||
Granted | 1,749 | $ | 11.9 | ||||||||
Forfeited | (368 | ) | $ | 22.86 | |||||||
Vested(1) | (718 | ) | $ | 22.27 | |||||||
Outstanding at March 31, 2015 | 2,868 | $ | 16.14 | ||||||||
______________________________________________________________________________ | |||||||||||
-1 | The vesting of certain restricted stock awards could result in federal and state income tax expense or benefit related to the difference between the market price of the common stock at the date of vesting and the date of grant. See Note 7 for additional discussion regarding the tax impact of vested restricted stock awards. | ||||||||||
The Company utilizes the closing stock price on the grant date to determine the fair value of service vesting restricted stock awards. As of March 31, 2015, unrecognized stock-based compensation related to the restricted stock awards was $36.9 million. Such cost is expected to be recognized over a weighted-average period of 2.29 years. | |||||||||||
. Restricted stock option awards | |||||||||||
Restricted stock option awards granted under the LTIP vest and are exercisable in four equal installments on each of the four anniversaries of the grant date. The following table reflects the stock option award activity for the three months ended March 31, 2015: | |||||||||||
(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, 2014 | 1,367 | $ | 20.76 | 8.17 | |||||||
Granted | 632 | $ | 11.93 | 9.91 | |||||||
Exercised(1) | — | $ | — | — | |||||||
Expired or canceled | (7 | ) | $ | 21.46 | — | ||||||
Forfeited | (114 | ) | $ | 18.03 | — | ||||||
Outstanding at March 31, 2015 | 1,878 | $ | 17.95 | 8.6 | |||||||
Vested and exercisable at end of period(2) | 617 | $ | 20.67 | 7.68 | |||||||
Vested, exercisable, and expected to vest at end of period(3) | 1,837 | $ | 17.98 | 8.59 | |||||||
_____________________________________________________________________________ | |||||||||||
-1 | The exercise of stock option awards could result in federal and state income tax expense or benefit related to the difference between the fair value of the stock option award at the date of grant and the intrinsic value of the stock option award when exercised. See Note 7 for additional discussion regarding the tax impact of exercised stock option awards. | ||||||||||
-2 | The vested and exercisable options at March 31, 2015 had no aggregate intrinsic value. | ||||||||||
-3 | The aggregate intrinsic value of vested, exercisable and expected to vest options at March 31, 2015 was $0.7 million. | ||||||||||
The Company utilizes the Black-Scholes option pricing model to determine the fair value of restricted stock option awards 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 option awards will be outstanding prior to exercise and the associated volatility. As of March 31, 2015, unrecognized stock-based compensation related to the restricted stock option awards was $10.3 million. Such cost is expected to be recognized over a weighted-average period of 3.05 years. | |||||||||||
The assumptions used to estimate the fair value of restricted stock options granted on February 27, 2015 are as follows: | |||||||||||
Risk-free interest rate(1) | 1.7 | % | |||||||||
Expected option life(2) | 6.25 years | ||||||||||
Expected volatility(3) | 52.59 | % | |||||||||
Fair value per stock option | $ | 6.15 | |||||||||
______________________________________________________________________________ | |||||||||||
-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 its 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 continuous employment with the Company for one 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. | |||||||||||
. Performance share awards | |||||||||||
The performance share awards granted to management on February 27, 2015 (the "2015 Performance Share Awards") and on February 27, 2014 (the "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 grant date fair value of these awards. The Company has determined the 2014 Performance Share Awards and the 2015 Performance Share Awards are equity awards and recognizes the associated expense on a straight-line basis over the three-year requisite service period of the awards. These awards will be settled, if at all, in stock at the end of the requisite service period based on the achievement of certain performance criteria. | |||||||||||
The 2015 Performance Share Awards have a performance period of January 1, 2015 to December 31, 2017 and any shares earned under such awards are expected to be issued in the first quarter of 2018 if the performance criteria are met. During the three months ended March 31, 2015, 602,501 2015 Performance Share Awards were granted and all remain outstanding at March 31, 2015. The 271,667 outstanding 2014 Performance Share Awards have a performance period of January 1, 2014 to December 31, 2016 and any shares earned under such awards are expected to be issued in the first quarter of 2017 if the performance criteria are met. | |||||||||||
As of March 31, 2015, unrecognized stock-based compensation related to the 2015 Performance Share Awards and the 2014 Performance Share Awards was $14.0 million. Such cost is expected to be recognized over a weighted-average period of 2.60 years. | |||||||||||
The assumptions used to estimate the fair value of the 2015 Performance Share Awards granted on February 27, 2015 are as follows: | |||||||||||
Risk-free rate(1) | 0.95 | % | |||||||||
Dividend yield | — | % | |||||||||
Expected volatility(2) | 53.78 | % | |||||||||
Laredo stock closing price as of February 27, 2015 | $ | 11.93 | |||||||||
Fair value per performance share | $ | 16.23 | |||||||||
______________________________________________________________________________ | |||||||||||
-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. | ||||||||||
. 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) | 2015 | 2014 | |||||||||
Restricted stock award compensation, net of amounts capitalized | $ | 3,280 | $ | 3,486 | |||||||
Restricted stock option award compensation, net of amounts capitalized | 673 | 628 | |||||||||
Restricted performance share award compensation, net of amounts capitalized | 835 | 215 | |||||||||
Total stock-based compensation, net of amounts capitalized | $ | 4,788 | $ | 4,329 | |||||||
. Performance unit awards | |||||||||||
The performance unit awards issued to management on February 15, 2013 (the "2013 Performance Unit Awards") and on February 3, 2012 (the "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 to determine the fair values of these awards at the grant date and to re-measure the fair values 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's stock price and the stock price volatilities of a group of peer companies defined in each award agreement. 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 of these awards for each period 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 Unit Awards had a performance period of January 1, 2012 to December 31, 2014 and, as their performance criteria were satisfied, they were paid at $100 per unit during the three months ended March 31, 2015. | |||||||||||
Compensation expense for the 2012 Performance Unit Awards and the 2013 Performance Unit Awards is included 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. Due to the quarterly re-measurement of the fair value of the 2013 Performance Unit Awards as of March 31, 2015, compensation expense for the three months ended March 31, 2015 was $1.0 million. Compensation expense related to the 2012 Performance Unit Awards and the 2013 Performance Unit Awards amounted to $0.1 million for the three months ended March 31, 2014. |
Income_taxes
Income taxes | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
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 (loss) 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 unaudited 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 unaudited 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 percent likely of being realized upon settlement. The Company had no unrecognized tax benefits related to uncertain tax positions in the unaudited consolidated financial statements at March 31, 2015 or December 31, 2014. | |||||||||
The Company is subject to corporate income taxes and the Texas franchise tax. Income tax expense for the periods presented consisted of the following: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2015 | 2014 | |||||||
Current taxes | $ | — | $ | — | |||||
Deferred taxes | (3,643 | ) | (107 | ) | |||||
Income tax expense | $ | (3,643 | ) | $ | (107 | ) | |||
Income tax expense 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) | 2015 | 2014 | |||||||
Income tax expense computed by applying the statutory rate | $ | (1,110 | ) | $ | 37 | ||||
State income tax, net of federal tax benefit and increase in valuation allowance | 91 | 1,287 | |||||||
Non-deductible stock-based compensation | (91 | ) | (116 | ) | |||||
Stock-based compensation tax deficiency | (2,457 | ) | (141 | ) | |||||
Change in deferred tax valuation allowance | (5 | ) | (1,078 | ) | |||||
Other items | (71 | ) | (96 | ) | |||||
Income tax expense | $ | (3,643 | ) | $ | (107 | ) | |||
For the three months ended March 31, 2015 and 2014, the effective tax rate on income (loss) before income taxes was not meaningful due to the significant effect of discrete items on a relatively small amount of income (loss). 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. The vesting of certain restricted stock awards 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. The exercise of stock option awards could result in federal and state income tax expense or benefits related to the difference between the fair value of the stock option on the grant date and the intrinsic value of the stock option when exercised. The tax impact resulting from vestings of restricted stock awards and exercise of option awards are discrete items. During the three months ended March 31, 2015 and 2014, 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 on the grant date. 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, for which the related income tax deduction was less than the expense previously recognized for book purposes. There were no stock options exercised during the three months ended March 31, 2015. 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, such shortfalls are included in income tax expense. | |||||||||
The following table presents the tax impact of these shortfalls for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2015 | 2014 | |||||||
Vesting of restricted stock | $ | (2,501 | ) | $ | (1 | ) | |||
Exercise of restricted stock options | — | (142 | ) | ||||||
Tax expense due to shortfalls | $ | (2,501 | ) | $ | (143 | ) | |||
Significant components of the Company's net deferred tax liability for the periods presented are as follows: | |||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | |||||||
Oil and natural gas properties, midstream service assets and other fixed assets | $ | (456,797 | ) | $ | (424,712 | ) | |||
Net operating loss carry-forward | 388,163 | 353,724 | |||||||
Derivatives | (117,565 | ) | (121,365 | ) | |||||
Stock-based compensation | 6,892 | 10,718 | |||||||
Accrued bonus | 656 | 3,256 | |||||||
Capitalized interest | 3,126 | 3,049 | |||||||
Other | (3,759 | ) | (316 | ) | |||||
Gross deferred tax liability | (179,284 | ) | (175,646 | ) | |||||
Valuation allowance | (1,304 | ) | (1,299 | ) | |||||
Net deferred tax liability | $ | (180,588 | ) | $ | (176,945 | ) | |||
Deferred tax assets and liabilities were classified in the unaudited consolidated balance sheets as follows for the periods presented: | |||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | |||||||
Deferred tax asset | $ | — | $ | — | |||||
Deferred tax liability | (180,588 | ) | (176,945 | ) | |||||
Deferred tax liability | $ | (180,588 | ) | $ | (176,945 | ) | |||
The Company had federal net operating loss carry-forwards totaling $1.1 billion and state of Oklahoma net operating loss carry-forwards totaling $81.8 million as of March 31, 2015. These carry-forwards begin expiring in 2026. As of March 31, 2015, the Company believes the federal and the 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 the 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, 2015, 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, 2015, the Company had suspended additional paid-in capital credits of $4.5 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 $4.5 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, 2015, a full valuation allowance of $1.3 million was recorded against the deferred tax asset related to the Company's charitable contribution carry-forward of $3.6 million. | |||||||||
The Company's income tax returns for the years 2012 through 2014 remain open and subject to examination by federal tax authorities and/or the tax authorities in Oklahoma and Texas 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. |
Derivatives
Derivatives | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||
Derivatives | Derivatives | ||||||||||||
a. 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 production. As of March 31, 2015, the Company had 34 open derivative contracts with financial institutions that extend from April 2015 to December 2017. 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 "Gain (loss) on derivatives, net" line item. | |||||||||||||
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 its counterparty a premium, which can be deferred until settlement, 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 transactions have an established fixed basis differential. The Company's oil basis swaps' differential is between the West Texas Intermediate-Argus Americas Crude (Midland) ("WTI Midland") index crude oil price and the WTI NYMEX (defined below) index crude oil price. When the WTI NYMEX price less the fixed basis differential is greater than the actual WTI Midland price, the difference multiplied by the hedged contract volume is paid to the Company by the counterparty. When the WTI NYMEX price less the fixed basis differential is less than the actual WTI Midland price, the difference multiplied by the hedged contract volume is paid by the Company to the counterparty. | |||||||||||||
During the first quarter of 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 represents cash settlements received for derivatives for the periods presented: | |||||||||||||
Three months ended March 31, | |||||||||||||
(in thousands) | 2015 | 2014 | |||||||||||
Cash settlements received (paid) for matured commodity derivatives | $ | 63,141 | $ | (1,431 | ) | ||||||||
Early terminations of commodity derivatives received | — | 76,660 | |||||||||||
Cash settlements received for derivatives, net | $ | 63,141 | $ | 75,229 | |||||||||
The following table summarizes open positions as of March 31, 2015, and represents, as of such date, derivatives in place through December 2017 on annual production volumes: | |||||||||||||
Remaining Year | Year | Year | |||||||||||
2015 | 2016 | 2017 | |||||||||||
Oil positions:(1) | |||||||||||||
Puts: | |||||||||||||
Hedged volume (Bbl) | 342,000 | — | — | ||||||||||
Weighted-average price ($/Bbl) | $ | 75 | $ | — | $ | — | |||||||
Swaps: | |||||||||||||
Hedged volume (Bbl) | 504,000 | 1,573,800 | — | ||||||||||
Weighted-average price ($/Bbl) | $ | 96.56 | $ | 84.82 | $ | — | |||||||
Collars: | |||||||||||||
Hedged volume (Bbl) | 4,922,140 | 2,556,000 | 2,628,000 | ||||||||||
Weighted-average floor price ($/Bbl) | $ | 79.81 | $ | 80 | $ | 77.22 | |||||||
Weighted-average ceiling price ($/Bbl) | $ | 95.4 | $ | 93.77 | $ | 97.22 | |||||||
Totals: | |||||||||||||
Total volume hedged with ceiling price (Bbl) | 5,426,140 | 4,129,800 | 2,628,000 | ||||||||||
Weighted-average ceiling price ($/Bbl) | $ | 95.51 | $ | 90.36 | $ | 97.22 | |||||||
Total volume hedge with floor price (Bbl) | 5,768,140 | 4,129,800 | 2,628,000 | ||||||||||
Weighted-average floor price ($/Bbl) | $ | 80.99 | $ | 81.84 | $ | 77.22 | |||||||
Basis swaps:(2) | |||||||||||||
Hedged volume (Bbl) | 2,750,000 | — | — | ||||||||||
Weighted-average price ($/Bbl) | $ | (1.95 | ) | $ | — | $ | — | ||||||
Natural gas positions:(3) | |||||||||||||
Collars: | |||||||||||||
Hedged volume (MMBtu) | 21,520,000 | 18,666,000 | — | ||||||||||
Weighted-average floor price ($/MMBtu) | $ | 3 | $ | 3 | $ | — | |||||||
Weighted-average ceiling price ($/MMBtu) | $ | 5.96 | $ | 5.6 | $ | — | |||||||
_______________________________________________________________________________ | |||||||||||||
-1 | Oil derivatives are settled based on the average of the daily settlement prices for the First Nearby Month of the West Texas Intermediate NYMEX Light Sweet Crude Oil Futures Contract for each NYMEX Trading Day during each month ("WTI NYMEX"). | ||||||||||||
-2 | The associated oil basis swaps are settled on the differential between the WTI Midland and the WTI NYMEX index oil prices. | ||||||||||||
-3 | Natural gas derivatives are settled based on the Inside FERC index price for West Texas Waha for the calculation period. | ||||||||||||
b. Balance sheet presentation | |||||||||||||
In accordance with the Company's standard practice, its commodity derivatives are subject to counterparty netting under agreements governing such derivatives. The Company's oil and natural gas commodity derivatives are presented on a net basis as "Derivatives" on the unaudited consolidated balance sheets. See Note 9.a for a summary of the fair value of derivatives on a gross basis. | |||||||||||||
By using derivatives to hedge exposures to changes in commodity prices, the Company exposes itself to credit risk and market risk. For the Company, 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 derivative 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 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. |
Fair_value_measurements
Fair value measurements | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||
Fair value measurements | Fair value measurements | ||||||||||||||||||||||||
The Company accounts for its oil and natural gas commodity 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, 2015 or 2014. | |||||||||||||||||||||||||
a. Fair value measurement on a recurring basis | |||||||||||||||||||||||||
The following tables summarize the Company's fair value hierarchy by commodity on a gross basis and the net presentation on the unaudited consolidated balance sheets for derivative assets and liabilities measured at fair value on a recurring basis for the periods presented: | |||||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total gross fair value | Amounts offset | Net fair value presented on the consolidated balance sheets | |||||||||||||||||||
As of March 31, 2015: | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Current: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | 190,569 | $ | — | $ | 190,569 | $ | (3,238 | ) | $ | 187,331 | ||||||||||||
Natural gas derivatives | — | 11,815 | — | 11,815 | — | 11,815 | |||||||||||||||||||
Oil deferred premiums | — | — | — | — | (3,545 | ) | (3,545 | ) | |||||||||||||||||
Natural gas deferred premiums | — | — | — | — | (523 | ) | (523 | ) | |||||||||||||||||
Noncurrent: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | 118,663 | $ | — | $ | 118,663 | $ | — | $ | 118,663 | |||||||||||||
Natural gas derivatives | — | 4,738 | — | 4,738 | — | 4,738 | |||||||||||||||||||
Oil deferred premiums | — | — | — | — | (4,814 | ) | (4,814 | ) | |||||||||||||||||
Natural gas deferred premiums | — | — | — | — | — | — | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||||
Current: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | (3,238 | ) | $ | — | $ | (3,238 | ) | $ | 3,238 | $ | — | |||||||||||
Natural gas derivatives | — | — | — | — | — | — | |||||||||||||||||||
Oil deferred premiums | — | — | (3,545 | ) | (3,545 | ) | 3,545 | — | |||||||||||||||||
Natural gas deferred premiums | — | — | (523 | ) | (523 | ) | 523 | — | |||||||||||||||||
Noncurrent: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Natural gas derivatives | — | — | — | — | — | — | |||||||||||||||||||
Oil deferred premiums | — | — | (4,814 | ) | (4,814 | ) | 4,814 | — | |||||||||||||||||
Natural gas deferred premiums | — | — | — | — | — | — | |||||||||||||||||||
Net derivative position | $ | — | $ | 322,547 | $ | (8,882 | ) | $ | 313,665 | $ | — | $ | 313,665 | ||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total gross fair value | Amounts offset | Net fair value presented on the consolidated balance sheets | |||||||||||||||||||
As of December 31, 2014: | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Current: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | 190,303 | $ | — | $ | 190,303 | $ | — | $ | 190,303 | |||||||||||||
Natural gas derivatives | — | 9,647 | — | 9,647 | — | 9,647 | |||||||||||||||||||
Oil deferred premiums | — | — | — | — | (4,653 | ) | (4,653 | ) | |||||||||||||||||
Natural gas deferred premiums | — | — | — | — | (696 | ) | (696 | ) | |||||||||||||||||
Noncurrent: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | 117,963 | $ | — | $ | 117,963 | $ | — | $ | 117,963 | |||||||||||||
Natural gas derivatives | — | 3,646 | — | 3,646 | — | 3,646 | |||||||||||||||||||
Oil deferred premiums | — | — | — | — | (3,821 | ) | (3,821 | ) | |||||||||||||||||
Natural gas deferred premiums | — | — | — | — | — | — | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||||
Current: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Natural gas derivatives | — | — | — | — | — | — | |||||||||||||||||||
Oil deferred premiums | — | — | (4,768 | ) | (4,768 | ) | 4,653 | (115 | ) | ||||||||||||||||
Natural gas deferred premiums | — | — | (696 | ) | (696 | ) | 696 | — | |||||||||||||||||
Noncurrent: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Natural gas derivatives | — | — | — | — | — | — | |||||||||||||||||||
Oil deferred premiums | — | — | (3,821 | ) | (3,821 | ) | 3,821 | — | |||||||||||||||||
Natural gas deferred premiums | — | — | — | — | — | — | |||||||||||||||||||
Net derivative position | $ | — | $ | 321,559 | $ | (9,285 | ) | $ | 312,274 | $ | — | $ | 312,274 | ||||||||||||
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 each derivative contract's corresponding commodity index price, 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 1.69% 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 that 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 premiums as of March 31, 2015, and for the calendar years following: | |||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
Remaining 2015 | $ | 3,746 | |||||||||||||||||||||||
2016 | 358 | ||||||||||||||||||||||||
2017 | 4,585 | ||||||||||||||||||||||||
2018 | 426 | ||||||||||||||||||||||||
Total | $ | 9,115 | |||||||||||||||||||||||
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) | 2015 | 2014 | |||||||||||||||||||||||
Balance of Level 3 at beginning of period | $ | (9,285 | ) | $ | (12,684 | ) | |||||||||||||||||||
Change in net present value of deferred premiums for derivatives | (43 | ) | (65 | ) | |||||||||||||||||||||
Total purchases and settlements: | |||||||||||||||||||||||||
Purchases | (975 | ) | — | ||||||||||||||||||||||
Settlements | 1,421 | 1,959 | |||||||||||||||||||||||
Balance of Level 3 at end of period | $ | (8,882 | ) | $ | (10,790 | ) | |||||||||||||||||||
b. 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. See Note 2.n for discussion of the Company's impairment of materials and supplies and line-fill for the three months ended March 31, 2015. | |||||||||||||||||||||||||
The accounting policies for impairment of oil and natural gas properties are discussed in Note 2.g. 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 evaluated reserves and other relevant data. |
Credit_risk
Credit risk | 3 Months Ended |
Mar. 31, 2015 | |
Risks and Uncertainties [Abstract] | |
Credit risk | Credit risk |
The Company's oil, NGL and natural gas sales are made 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 oil and natural gas 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. 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 Notes 8 and 9 for additional information regarding the Company's derivatives. |
Commitments_and_contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies |
a. Litigation | |
From time to time the Company is involved in legal proceedings and/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. | |
b. Drilling contracts | |
The Company has committed to drilling contracts with various third parties to complete its various drilling projects. The contracts contain early termination clauses that require the Company to potentially pay penalties to the third parties should the Company cease drilling efforts. These penalties would negatively impact the Company's financial statements upon early contract termination, especially if a significant number of such contracts were terminated early in their respective terms. In the fourth quarter of 2014, the Company announced a reduced 2015 capital expenditure budget compared to 2014. As a result, the Company began releasing rigs as drilling contracts came close to expiration and incurred charges of $0.5 million in the fourth quarter of 2014. No comparable amounts were recorded in the three months ended March 31, 2015 or 2014. Future commitments of $33.7 million as of March 31, 2015 are not recorded in the accompanying unaudited consolidated balance sheets. Management does not currently anticipate the early termination of any existing contracts in 2015 that would result in a substantial penalty. | |
c. 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. These rules and regulations are frequently amended or reinterpreted; therefore, the Company is unable to predict the future cost or impact of complying with these regulations. | |
d. Other commitments | |
See Note 14 for discussion regarding the commitments to the Company's non-consolidated variable interest entity ("VIE"). |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring |
Following the recent drop in oil prices, in an effort to reduce costs and to better position the Company for ongoing efficient growth, on January 20, 2015, the Company executed a company-wide restructuring and reduction in force (the "RIF") that included (i) the relocation of certain employees in the Company's Dallas, Texas area office to the Company's other existing offices in Tulsa, Oklahoma and Midland, Texas; (ii) closing the Company's Dallas, Texas area office; (iii) a workforce reduction of approximately 75 employees and (iv) the release of 24 contract personnel. The reduction in workforce was communicated to employees on January 20, 2015 and was generally effective immediately. The relocation of Company employees is expected to be completed by June 1, 2015. The Company's compensation committee approved the RIF and the severance package offered in connection with the RIF. The Company incurred expenses of $6.0 million during the three months ended March 31, 2015 related to the RIF. As of March 31, 2015, no additional RIF expenses are expected to be incurred. |
Net_income_loss_per_share
Net income (loss) per share | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Net income (loss) per share | Net loss per share | ||||||||
Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share reflects the potential dilution of non-vested restricted stock awards, performance share awards and outstanding restricted stock options. For the three months ended March 31, 2015 and 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 following is the calculation of basic and diluted weighted-average common shares outstanding and net loss per share for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands, except for per share data) | 2015 | 2014 | |||||||
Net loss (numerator): | |||||||||
Net loss—basic and diluted | $ | (472 | ) | $ | (213 | ) | |||
Weighted-average common shares outstanding (denominator)(1): | |||||||||
Basic | 162,426 | 141,067 | |||||||
Diluted | 162,426 | 141,067 | |||||||
Net loss per share: | |||||||||
Basic | $ | — | $ | — | |||||
Diluted | $ | — | $ | — | |||||
______________________________________________________________________________ | |||||||||
-1 | For the three months ended March 31, 2015, weighted-average common shares outstanding used in the computation of basic and diluted net loss per share attributable to stockholders has been computed taking into account the March 2015 Equity Offering. |
Variable_interest_entity
Variable interest entity | 3 Months Ended |
Mar. 31, 2015 | |
Variable Interest Entity [Abstract] | |
Variable Interest Entity | Variable interest entity |
An entity is referred to as a 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, 2015 and 2014, LMS contributed $14.5 million and $11.3 million, respectively, to Medallion Gathering & Processing, LLC, a Texas limited liability company formed on October 12, 2012, and its wholly-owned subsidiaries (together "Medallion"). LMS holds 49% of Medallion ownership units. Medallion was established for the purpose of developing midstream solutions and providing midstream infrastructure to bring discovered oil, NGL and natural gas to market. LMS 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, LMS is not considered to be the primary beneficiary of the VIE because LMS 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 Medallion's net income (loss) reflected in the unaudited consolidated statements of operations as "Income (loss) from equity method investee" and the carrying amount reflected in the unaudited consolidated balance sheets as "Investment in equity method investee." | |
During the three months ended March 31, 2015, Medallion continued construction of its pipeline infrastructure, including a lateral extension in Reagan County, Texas from its Reagan Station to its Santa Rita Station, in order to gather third-party production. As of March 31, 2015, LMS has committed to fund an estimated $3.9 million to Medallion. See Note 15.a for a discussion of items included in the unaudited consolidated financial statements related to Medallion. |
Related_Parties
Related Parties | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Related Party Transactions [Abstract] | |||||||||
Related Parties | Related Parties | ||||||||
a. Medallion | |||||||||
The following table summarizes items included in the unaudited consolidated statements of operations related to Medallion for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2015 | 2014 | |||||||
Midstream service revenues | $ | 97 | $ | — | |||||
Minimum volume commitments | 1,656 | 516 | |||||||
Interest and other income | 108 | — | |||||||
The following table summarizes items included in the unaudited consolidated balance sheets related to Medallion for the periods presented: | |||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | |||||||
Accounts receivable, net | $ | 97 | $ | — | |||||
Other assets, net | 1,209 | 1,110 | |||||||
Other current liabilities | 4,264 | 3,443 | |||||||
b. Targa Resources Corp. | |||||||||
The Company has a gathering and processing arrangement with affiliates of Targa Resources Corp. ("Targa"). One of Laredo's directors is on the board of directors of Targa. | |||||||||
The following table summarizes the net oil, NGL and natural gas sales (oil, NGL and natural gas sales less production taxes) received from Targa and included in the unaudited consolidated statements of operations for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2015 | 2014 | |||||||
Oil, NGL and natural gas sales | $ | 19,631 | $ | 22,479 | |||||
The following table summarizes the amounts included in oil, NGL and natural gas sales receivable from Targa in the unaudited consolidated balance sheets for the periods presented: | |||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | |||||||
Accounts receivable, net | $ | 6,088 | $ | 12,869 | |||||
Segments
Segments | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Segments | Segments | ||||||||||||||||
Beginning in 2015, the Company is presenting financial results by segment to highlight the growing value of its midstream and marketing segment and its interest in Medallion, as Medallion's third-party revenues increase. | |||||||||||||||||
The Company operates in two business segments, which are (i) exploration and production and (ii) midstream and marketing. The exploration and production segment is engaged in the acquisition, exploration and development of oil and natural gas properties. The midstream and marketing segment provides the exploration and production segment and certain third parties with (i) any products and services that need to be delivered by infrastructure, including oil and natural gas gathering services as well as rig fuel, natural gas lift and water in the primary drilling corridors and (ii) takeaway optionality in the field and firm service commitments to maximize oil, NGL and natural gas revenues. | |||||||||||||||||
The following tables present selected financial information regarding the Company's operating segments for the periods presented: | |||||||||||||||||
(in thousands) | Exploration and production | Midstream and marketing | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Three months ended March 31, 2015 | |||||||||||||||||
Oil, NGL and natural gas sales | $ | 118,211 | $ | 112 | $ | (205 | ) | $ | 118,118 | ||||||||
Midstream service revenues | — | 3,683 | (2,374 | ) | 1,309 | ||||||||||||
Sales of purchased oil | — | 31,267 | — | 31,267 | |||||||||||||
Total revenues | 118,211 | 35,062 | (2,579 | ) | 150,694 | ||||||||||||
Lease operating expenses, including production tax | 43,845 | — | (2,379 | ) | 41,466 | ||||||||||||
Midstream service expenses | — | 3,342 | (112 | ) | 3,230 | ||||||||||||
Costs of purchased oil | — | 31,200 | — | 31,200 | |||||||||||||
General and administrative(1) | 19,778 | 2,077 | — | 21,855 | |||||||||||||
Depletion, depreciation and amortization(2) | 70,257 | 1,685 | — | 71,942 | |||||||||||||
Other operating costs and expenses(3) | 7,191 | 308 | — | 7,499 | |||||||||||||
Operating loss | $ | (22,860 | ) | $ | (3,550 | ) | $ | (88 | ) | $ | (26,498 | ) | |||||
Other financial information: | |||||||||||||||||
Loss from equity method investee | $ | — | $ | (433 | ) | $ | — | $ | (433 | ) | |||||||
Interest expense(4) | $ | (31,087 | ) | $ | (1,327 | ) | $ | — | $ | (32,414 | ) | ||||||
Capital expenditures(5) | $ | 247,613 | $ | 20,473 | $ | — | $ | 268,086 | |||||||||
Gross property and equipment(6) | $ | 5,057,149 | $ | 216,345 | $ | (321 | ) | $ | 5,273,173 | ||||||||
Three months ended March 31, 2014 | |||||||||||||||||
Oil, NGL and natural gas sales | $ | 173,214 | $ | — | $ | — | $ | 173,214 | |||||||||
Midstream service revenues | — | 1,030 | (934 | ) | 96 | ||||||||||||
Total revenues | 173,214 | 1,030 | (934 | ) | 173,310 | ||||||||||||
Lease operating expenses, including production tax | 35,169 | — | (934 | ) | 34,235 | ||||||||||||
Midstream service expenses | — | 1,361 | — | 1,361 | |||||||||||||
General and administrative(1) | 26,316 | 1,338 | — | 27,654 | |||||||||||||
Depletion, depreciation and amortization(2) | 48,968 | 639 | — | 49,607 | |||||||||||||
Other operating costs and expenses(3) | 415 | — | — | 415 | |||||||||||||
Operating income (loss) | $ | 62,346 | $ | (2,308 | ) | $ | — | $ | 60,038 | ||||||||
Other financial information: | |||||||||||||||||
Income from equity method investee | $ | — | $ | 16 | $ | — | $ | 16 | |||||||||
Interest expense(4) | $ | (28,374 | ) | $ | (612 | ) | $ | — | $ | (28,986 | ) | ||||||
Capital expenditures(5) | $ | 190,409 | $ | 10,520 | $ | — | $ | 200,929 | |||||||||
Gross property and equipment(6) | $ | 3,729,711 | $ | 82,293 | $ | — | $ | 3,812,004 | |||||||||
_______________________________________________________________________________ | |||||||||||||||||
-1 | General and administrative costs were allocated based on the number of employees in the respective segment as of March 31, 2015 and 2014, respectively. However, the payroll and deferred compensation costs component of general and administrative for each segment is based on actual costs for the three months ended March 31, 2015. | ||||||||||||||||
-2 | Depletion, depreciation and amortization for other fixed assets related to office furnishings were allocated based on the number of employees in the respective segment as of March 31, 2015 and 2014, respectively. | ||||||||||||||||
-3 | Includes the following expenses: restructuring expense, accretion of asset retirement obligations and impairments for the three months ended March 31, 2015 and 2014. These expenses are based on actual costs for the three months ended March 31, 2015 and 2014. | ||||||||||||||||
-4 | Interest expense is allocated based on gross property and equipment and total contributions to the Company's equity method investee as of March 31, 2015 and 2014, respectively. | ||||||||||||||||
-5 | Capital expenditures excludes acquisition of mineral interests for the three months ended March 31, 2014. | ||||||||||||||||
-6 | Gross property and equipment includes investment in equity method investee totaling $72.4 million and $22.8 million for the three months ended March 31, 2015 and 2014, respectively. Other fixed assets related to office furnishings were allocated based on the number of employees in the respective segment on March 31, 2015 and 2014, respectively. |
Subsidiary_guarantees
Subsidiary guarantees | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||
Subsidiary guarantees | Subsidiary guarantees | ||||||||||||||||
Laredo and the Guarantors have fully and unconditionally guaranteed the January 2019 Notes, the January 2022 Notes, the May 2022 Notes, the March 2023 Notes and the Senior Secured Credit Facility, subject to the Releases. In accordance with practices accepted by the SEC, Laredo has prepared condensed consolidating financial statements to quantify the assets, results of operations and cash flows of such subsidiaries as subsidiary guarantors. The following unaudited condensed consolidating balance sheets as of March 31, 2015 and December 31, 2014, unaudited condensed consolidating statements of operations and unaudited condensed consolidating statements of cash flows for the three months ended March 31, 2015 and 2014 present financial information for Laredo on a stand-alone basis (carrying any investment in subsidiaries under the equity method), financial information for the subsidiary guarantors 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 LMS and for GCM are recorded on Laredo's statements of financial position, statements of operations and statements of cash flows as they are disregarded entities for income tax purposes. Laredo and the Guarantors are not restricted from making intercompany distributions to each other. See Note 19.a for a discussion of the early redemption of the January 2019 Notes. | |||||||||||||||||
Condensed consolidating balance sheet | |||||||||||||||||
March 31, 2015 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Subsidiary Guarantors | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Accounts receivable, net | $ | 91,902 | $ | 18,101 | $ | — | $ | 110,003 | |||||||||
Other current assets | 781,157 | 10,444 | — | 791,601 | |||||||||||||
Total oil and natural gas properties, net | 3,338,965 | 7,247 | (321 | ) | 3,345,891 | ||||||||||||
Total midstream service assets, net | — | 129,010 | — | 129,010 | |||||||||||||
Total other fixed assets, net | 45,243 | 315 | — | 45,558 | |||||||||||||
Investment in subsidiaries and equity method investee | 222,981 | 72,350 | (222,981 | ) | 72,350 | ||||||||||||
Total other long-term assets | 156,275 | 4,335 | — | 160,610 | |||||||||||||
Total assets | $ | 4,636,523 | $ | 241,802 | $ | (223,302 | ) | $ | 4,655,023 | ||||||||
Accounts payable | $ | 29,126 | $ | 1,284 | $ | — | $ | 30,410 | |||||||||
Other current liabilities | 847,151 | 15,271 | — | 862,422 | |||||||||||||
Long-term debt | 1,300,000 | — | — | 1,300,000 | |||||||||||||
Other long-term liabilities | 140,813 | 2,266 | — | 143,079 | |||||||||||||
Stockholders' equity | 2,319,433 | 222,981 | (223,302 | ) | 2,319,112 | ||||||||||||
Total liabilities and stockholders' equity | $ | 4,636,523 | $ | 241,802 | $ | (223,302 | ) | $ | 4,655,023 | ||||||||
Condensed consolidating balance sheet | |||||||||||||||||
December 31, 2014 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Subsidiary Guarantors | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Accounts receivable, net | $ | 107,860 | $ | 19,069 | $ | — | $ | 126,929 | |||||||||
Other current assets | 238,300 | 24 | — | 238,324 | |||||||||||||
Total oil and natural gas properties, net | 3,196,231 | 7,277 | (233 | ) | 3,203,275 | ||||||||||||
Total midstream service assets, net | — | 108,462 | — | 108,462 | |||||||||||||
Total other fixed assets, net | 42,046 | 299 | — | 42,345 | |||||||||||||
Investment in subsidiaries and equity method investee | 163,349 | 58,288 | (163,349 | ) | 58,288 | ||||||||||||
Total other long-term assets | 150,430 | 4,496 | — | 154,926 | |||||||||||||
Total assets | $ | 3,898,216 | $ | 197,915 | $ | (163,582 | ) | $ | 3,932,549 | ||||||||
Accounts payable | $ | 38,453 | $ | 555 | $ | — | $ | 39,008 | |||||||||
Other current liabilities | 354,217 | 31,800 | — | 386,017 | |||||||||||||
Long-term debt | 1,801,295 | — | — | 1,801,295 | |||||||||||||
Other long-term liabilities | 140,817 | 2,211 | — | 143,028 | |||||||||||||
Stockholders' equity | 1,563,434 | 163,349 | (163,582 | ) | 1,563,201 | ||||||||||||
Total liabilities and stockholders' equity | $ | 3,898,216 | $ | 197,915 | $ | (163,582 | ) | $ | 3,932,549 | ||||||||
Condensed consolidating statement of operations | |||||||||||||||||
For the three months ended March 31, 2015 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Subsidiary Guarantors | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Total operating revenues | $ | 118,146 | $ | 35,127 | $ | (2,579 | ) | $ | 150,694 | ||||||||
Total operating costs and expenses | 143,308 | 36,375 | (2,491 | ) | 177,192 | ||||||||||||
Operating loss | (25,162 | ) | (1,248 | ) | (88 | ) | (26,498 | ) | |||||||||
Interest expense and other, net | (32,291 | ) | — | — | (32,291 | ) | |||||||||||
Other non-operating income (expense) | 60,712 | (433 | ) | 1,681 | 61,960 | ||||||||||||
Income (loss) before income tax | 3,259 | (1,681 | ) | 1,593 | 3,171 | ||||||||||||
Deferred income tax expense | (3,643 | ) | — | — | (3,643 | ) | |||||||||||
Net loss | $ | (384 | ) | $ | (1,681 | ) | $ | 1,593 | $ | (472 | ) | ||||||
Condensed consolidating statement of operations | |||||||||||||||||
For the three months ended March 31, 2014 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Subsidiary Guarantors | 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 | ||||||||||||
Operating income (loss) | 60,704 | (666 | ) | — | 60,038 | ||||||||||||
Interest expense and other, net | (28,903 | ) | — | — | (28,903 | ) | |||||||||||
Other non-operating income (expense) | (31,907 | ) | (33 | ) | 699 | (31,241 | ) | ||||||||||
Loss before income tax | (106 | ) | (699 | ) | 699 | (106 | ) | ||||||||||
Deferred income tax expense | (107 | ) | — | — | (107 | ) | |||||||||||
Net loss | $ | (213 | ) | $ | (699 | ) | $ | 699 | $ | (213 | ) | ||||||
Condensed consolidating statement of cash flows | |||||||||||||||||
For the three months ended March 31, 2015 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Subsidiary Guarantors | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Net cash flows provided by (used in) operating activities | $ | 51,531 | $ | (26,347 | ) | $ | 1,681 | $ | 26,865 | ||||||||
Change in investments between affiliates | (59,634 | ) | 61,315 | (1,681 | ) | — | |||||||||||
Capital expenditures and other | (247,578 | ) | (34,968 | ) | — | (282,546 | ) | ||||||||||
Net cash flows provided by financing activities | 795,453 | — | — | 795,453 | |||||||||||||
Net increase in cash and cash equivalents | 539,772 | — | — | 539,772 | |||||||||||||
Cash and cash equivalents at beginning of period | 29,320 | 1 | — | 29,321 | |||||||||||||
Cash and cash equivalents at end of period | $ | 569,092 | $ | 1 | $ | — | $ | 569,093 | |||||||||
Condensed consolidating statement of cash flows | |||||||||||||||||
For the three months ended March 31, 2014 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Subsidiary Guarantors | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Net cash flows provided by operating activities | $ | 126,666 | $ | 752 | $ | 699 | $ | 128,117 | |||||||||
Change in investments between affiliates | (20,370 | ) | 21,069 | (699 | ) | — | |||||||||||
Capital expenditures and other | (197,445 | ) | (21,821 | ) | — | (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 | |||||||||
Recently_issued_accounting_sta
Recently issued accounting standards | 3 Months Ended |
Mar. 31, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently issued accounting standards | Recent accounting pronouncements |
In April 2015, the Financial Accounting Standards Board ("FASB") issued new guidance in Subtopic 835-30, Interest-Imputation of Interest which seeks to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in an entity's balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this guidance. Entities should apply the amendments on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. The guidance is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early adoption is permitted. The Company early-adopted this standard on April 1, 2015 and will apply the provisions in its second-quarter unaudited consolidated financial statements. | |
In May 2014, the FASB issued a comprehensive new revenue recognition standard that supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and industry-specific guidance in Subtopic 932-605, Extractive Activities—Oil and Gas—Revenue Recognition. The core principle of the new guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for transferring those goods or services. The new standard also requires significantly expanded disclosure regarding the qualitative and quantitative information of an entity's nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The standard creates a five-step model that requires companies to exercise judgment when considering the terms of a contract and all relevant facts and circumstances. The standard allows for several transition methods: (a) a full retrospective adoption in which the standard is applied to all of the periods presented, or (b) a modified retrospective adoption in which the standard is applied only to the most current period presented in the financial statements, including additional disclosures of the standard's application impact to individual financial statement line items. This standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements upon adoption of this standard. |
Subsequent_events
Subsequent events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events |
a. Redemption of the January 2019 Notes | |
On April 6, 2015 (the "Redemption Date"), the entire $550.0 million outstanding principal amount of the Company's January 2019 Notes was redeemed at a redemption price of 104.750% of the principal amount of the January 2019 Notes, plus accrued and unpaid interest up to, but not including, the Redemption Date. On the Redemption Date, the Company recognized a loss on extinguishment of $38.9 million, related to the difference between the redemption price and the net carrying amount of the extinguished January 2019 Notes. | |
b. Senior Secured Credit Facility | |
On April 6 and April 30, 2015, the Company borrowed $50.0 million and $10.0 million, respectively, on the Senior Secured Credit Facility. The outstanding balance under the Senior Secured Credit Facility was $60.0 million at May 6, 2015. | |
On May 4, 2015, the Company entered into the Third Amendment to the Senior Secured Credit Facility, pursuant to which, among other things, the borrowing base and aggregate elected commitment amounts increased to $1.25 billion and $1.0 billion, respectively. | |
c. Potential transaction | |
The Company had previously announced that it was evaluating various financing sources and had ongoing discussions regarding a drilling fund opportunity involving a portion of its northern Permian-Garden City properties as well as additional operational locations in its southern area. Although the Company received significant interest, it has not reached terms that it believes would be beneficial to its stockholders. Further pursuit of a drilling fund or joint development opportunity may occur, but there can be no assurance of any discussions or transactions of this nature. | |
As the Company pursues reserves and production growth in the Permian Basin, it will continue to consider and monitor which financing alternatives, including debt and equity capital resources, joint ventures, drilling funds and asset sales, are available to meet additional or accelerated future planned capital expenditures. There can be no assurance that any transaction will be completed. |
Supplementary_information
Supplementary information | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Oil and Gas Exploration and Production Industries Disclosures [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) | 2015 | 2014 | |||||||
Property acquisition costs: | |||||||||
Evaluated | $ | — | $ | 25 | |||||
Unevaluated | — | 7,280 | |||||||
Exploration | 4,513 | 8,499 | |||||||
Development costs(1) | 206,672 | 188,313 | |||||||
Total costs incurred | $ | 211,185 | $ | 204,117 | |||||
____________________________________________________________________________ | |||||||||
-1 | The costs incurred for oil and natural gas development activities include $0.5 million and $0.6 million in asset retirement obligations for the three months ended March 31, 2015 and 2014, respectively. |
Basis_of_presentation_and_sign1
Basis of presentation and significant accounting policies (Policies) | 3 Months Ended | |
Mar. 31, 2015 | ||
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 the investee's net income (loss) is included in the unaudited consolidated statements of operations. See Note 14 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 accompanying consolidated financial statements have not been audited by the Company's independent registered public accounting firm, except that the consolidated balance sheet as of December 31, 2014 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, 2015 and the results of operations and cash flows for the three months ended March 31, 2015 and 2014. | ||
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 the 2014 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. 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, NGL 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 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. | ||
Reclassifications | Reclassifications | |
Certain amounts in the accompanying unaudited consolidated financial statements have been reclassified to conform to the 2015 presentation. These reclassifications had no impact to previously reported total assets, total liabilities, net income or loss, stockholders' equity or cash flows. | ||
Treasury stock | Treasury stock | |
Laredo's employees may elect to have the Company withhold shares of stock to satisfy their tax withholding obligations that arise upon the lapse of restrictions on their stock awards. Such treasury stock is recorded at cost and retired upon acquisition. | ||
Accounts receivable | Accounts receivable | |
The Company sells oil, NGL and natural gas to various customers and participates with other parties in the drilling, completion and operation of oil and natural gas wells. The Company's accounts receivable 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 of 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 amounts 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. | ||
Derivatives | 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. | ||
Derivatives are recorded at fair value and are included net on the unaudited consolidated balance sheets as assets or liabilities. The Company nets the fair value of derivatives by counterparty 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 (see Notes 8 and 9). | ||
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 8). | ||
Deferred loan costs | Debt issuance costs | |
Debt issuance 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 | |
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 depletion, or for midstream asset retirement cost through depreciation, of the associated 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) estimated removal and/or remediation costs for midstream assets, (iv) estimated remaining life of midstream assets, (v) future inflation factors and (vi) 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 assets and liabilities approximate their fair values. See Note 5 for fair value disclosures related to the Company's debt obligations. The Company carries its derivatives at fair value. See Notes 8 and 9 for details regarding the fair value of the Company's derivatives. | ||
Fair value measurements | ||
The Company accounts for its oil and natural gas commodity 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. | ||
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. | ||
Compensation awards | Compensation awards | |
Stock-based compensation expense is included in "General and administrative" in the Company's unaudited consolidated statements of operations over the awards' vesting periods and is based on their grant date fair value. The Company utilizes the closing stock price on the grant date, 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. The Company capitalizes a portion of stock-based compensation for employees who are directly involved in the acquisition, exploration and development of its oil and gas 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 6 for further discussion regarding 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. Environmental expenditures are expensed in the period incurred. 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, 2015 or December 31, 2014. | ||
Long-lived assets, materials and supplies and line-fill | Long-lived assets, materials and supplies and line-fill | |
Impairment losses are recorded on property and equipment used in operations and other long-lived assets when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. Impairment is measured based on the excess of the carrying amount over the fair value of the asset. | ||
Materials and supplies are comprised of equipment used in developing oil and natural gas properties and are included in "Other current assets" and "Other assets, net" on the unaudited consolidated balance sheets. They are carried at the lower of cost or market ("LCM"). The market price for materials and supplies is determined utilizing the Company's recent prices paid to acquire materials. During the three months ended March 31, 2015, the Company reduced materials and supplies by $0.8 million in order to reflect the balance at LCM. The adjustment is included in "Impairment expense" in the unaudited consolidated statements of operations and in "Other operating costs and expenses" for the Company's exploration and production segment presented in Note 16. The Company determined an LCM adjustment was not necessary for materials and supplies during the three months ended March 31, 2014. | ||
Minimum volumes of product in a pipeline system which enables the system to operate is known as line-fill, and is generally not available to be withdrawn from the pipeline system until the expiration of the transportation contract. Beginning in the fourth quarter of 2014, the Company owns oil line-fill in third-party pipelines, which is accounted for at LCM with cost determined using the weighted-average cost method, and is included in "Other assets, net" on the unaudited consolidated balance sheets. The LCM adjustment is determined utilizing a quoted market price adjusted for regional price differentials (Level 2). For the three months ended March 31, 2015, the Company recorded an LCM adjustment of $0.1 million related to its line-fill, which is included in "Impairment expense" in the unaudited consolidated statements of operations and as "Other operating costs and expenses" for the Company's midstream and marketing segment presented in Note 16. | ||
Employee compensation | The Company recognizes the fair value of stock-based compensation awards expected to vest 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 and its performance unit awards are accounted for as liability awards. Stock-based compensation is included in "General and administrative" in the unaudited consolidated statements of operations. The Company capitalizes a portion of stock-based compensation for employees who are directly involved in the acquisition, exploration and development of oil and natural gas 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. | |
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 (loss) 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 unaudited 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 unaudited 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 percent likely of being realized upon settlement. | ||
Credit risk | Credit risk | |
The Company's oil, NGL and natural gas sales are made 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 oil and natural gas 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. 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. | ||
Earnings Per Share | Net loss per share | |
Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share reflects the potential dilution of non-vested restricted stock awards, performance share awards and outstanding restricted stock options. | ||
Variable Interest Entity | Variable interest entity | |
An entity is referred to as a 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, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Schedule of components of accounts receivable | Accounts receivable consist of the following components for the periods presented: | ||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | |||||||
Oil, NGL and natural gas sales | $ | 44,859 | $ | 57,070 | |||||
Joint operations, net(1) | 25,752 | 33,808 | |||||||
Matured derivatives | 20,829 | 16,098 | |||||||
Purchased oil and other product sales | 17,963 | 18,917 | |||||||
Other | 600 | 1,036 | |||||||
Total | $ | 110,003 | $ | 126,929 | |||||
______________________________________________________________________________ | |||||||||
-1 | Accounts receivable for joint operations are presented net of an allowance for doubtful accounts of $0.1 million and $0.8 million as of March 31, 2015 and December 31, 2014, respectively. | ||||||||
Schedule of property and equipment | The following table sets forth the Company's property and equipment for the periods presented: | ||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | |||||||
Evaluated oil and natural gas properties | $ | 4,692,853 | $ | 4,446,781 | |||||
Less accumulated depletion and impairment | (1,654,807 | ) | (1,586,237 | ) | |||||
Evaluated oil and natural gas properties, net | 3,038,046 | 2,860,544 | |||||||
Unevaluated properties not being amortized | 307,845 | 342,731 | |||||||
Midstream service assets | 139,224 | 117,052 | |||||||
Less accumulated depreciation | (10,214 | ) | (8,590 | ) | |||||
Midstream service assets, net | 129,010 | 108,462 | |||||||
Depreciable other fixed assets | 47,289 | 42,933 | |||||||
Less accumulated depreciation and amortization | (15,343 | ) | (13,820 | ) | |||||
Depreciable other fixed assets, net | 31,946 | 29,113 | |||||||
Land | 13,612 | 13,232 | |||||||
Total property and equipment, net | $ | 3,520,459 | $ | 3,354,082 | |||||
Schedule of future amortization expense of deferred loan costs | Future amortization expense of debt issuance costs as of March 31, 2015 is as follows: | ||||||||
(in thousands) | |||||||||
Remaining 2015 | $ | 4,587 | |||||||
2016 | 6,165 | ||||||||
2017 | 6,236 | ||||||||
2018 | 6,026 | ||||||||
2019 | 2,913 | ||||||||
Thereafter | 7,586 | ||||||||
Total | $ | 33,513 | |||||||
Schedule of other current assets | Other current assets consist of the following components for the periods presented: | ||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | |||||||
Prepaid expenses | $ | 18,043 | $ | 6,451 | |||||
Materials and supplies inventory and other | 9,387 | 7,951 | |||||||
Total other current assets | $ | 27,430 | $ | 14,402 | |||||
Other Current Liabilities | Other current liabilities consist of the following components for the periods presented: | ||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | |||||||
Accrued interest payable | $ | 27,969 | $ | 37,689 | |||||
Lease operating expense payable | 17,121 | 11,963 | |||||||
Other accrued liabilities | 27,958 | 51,380 | |||||||
Total other current liabilities | $ | 73,048 | $ | 101,032 | |||||
Schedule of reconciliation of asset retirement obligations liability | The following reconciles the Company's asset retirement obligation liability for the periods presented: | ||||||||
(in thousands) | Three months ended March 31, 2015 | Year ended December 31, 2014 | |||||||
Liability at beginning of period | $ | 32,198 | $ | 21,743 | |||||
Liabilities added due to acquisitions, drilling, midstream service asset construction and other | 515 | 6,370 | |||||||
Accretion expense | 579 | 1,787 | |||||||
Liabilities settled upon plugging and abandonment | (188 | ) | (450 | ) | |||||
Revision of estimates | — | 2,748 | |||||||
Liability at end of period | $ | 33,104 | $ | 32,198 | |||||
Supplemental cash flow disclosure information and non-cash investing and financing information | The following presents the non-cash investing and supplemental cash flow information for the periods presented: | ||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2015 | 2014 | |||||||
Non-cash investing information: | |||||||||
Change in accrued capital expenditures | $ | (30,066 | ) | $ | 10,622 | ||||
Change in accrued capital contribution to equity method investee | $ | — | $ | 5,574 | |||||
Capitalized asset retirement cost | $ | 515 | $ | 576 | |||||
Supplemental cash flow information: | |||||||||
Capitalized interest | $ | 98 | $ | — | |||||
Debt_Tables
Debt (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||
Schedule of carrying amount and fair value of debt instruments | The following table presents the carrying amount and fair values of the Company's debt for the periods presented: | ||||||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||
(in thousands) | Carrying | Fair | Carrying | Fair | |||||||||||||
value | value | value | value | ||||||||||||||
January 2019 Notes(1) | $ | 551,230 | $ | 576,653 | $ | 551,295 | $ | 550,000 | |||||||||
January 2022 Notes | 450,000 | 436,500 | 450,000 | 396,014 | |||||||||||||
May 2022 Notes | 500,000 | 519,375 | 500,000 | 467,529 | |||||||||||||
March 2023 Notes | 350,000 | 350,875 | — | — | |||||||||||||
Senior Secured Credit Facility | — | — | 300,000 | 300,279 | |||||||||||||
Total value of debt | $ | 1,851,230 | $ | 1,883,403 | $ | 1,801,295 | $ | 1,713,822 | |||||||||
______________________________________________________________________________ | |||||||||||||||||
-1 | The carrying value of the January 2019 Notes includes the October Notes unamortized bond premium of $1.2 million and $1.3 million as of March 31, 2015 and December 31, 2014, respectively. |
Employee_compensation_Tables
Employee compensation (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Schedule of outstanding restricted stock awards | The following table reflects the outstanding restricted stock awards for the three months ended March 31, 2015: | ||||||||||
(in thousands, except for weighted-average grant date fair values) | Restricted | Weighted-average | |||||||||
stock | grant date | ||||||||||
awards | fair value (per award) | ||||||||||
Outstanding at December 31, 2014 | 2,205 | $ | 22.63 | ||||||||
Granted | 1,749 | $ | 11.9 | ||||||||
Forfeited | (368 | ) | $ | 22.86 | |||||||
Vested(1) | (718 | ) | $ | 22.27 | |||||||
Outstanding at March 31, 2015 | 2,868 | $ | 16.14 | ||||||||
______________________________________________________________________________ | |||||||||||
-1 | The vesting of certain restricted stock awards could result in federal and state income tax expense or benefit related to the difference between the market price of the common stock at the date of vesting and the date of grant. See Note 7 for additional discussion regarding the tax impact of vested restricted stock awards. | ||||||||||
Schedule of stock option award activity | The following table reflects the stock option award activity for the three months ended March 31, 2015: | ||||||||||
(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, 2014 | 1,367 | $ | 20.76 | 8.17 | |||||||
Granted | 632 | $ | 11.93 | 9.91 | |||||||
Exercised(1) | — | $ | — | — | |||||||
Expired or canceled | (7 | ) | $ | 21.46 | — | ||||||
Forfeited | (114 | ) | $ | 18.03 | — | ||||||
Outstanding at March 31, 2015 | 1,878 | $ | 17.95 | 8.6 | |||||||
Vested and exercisable at end of period(2) | 617 | $ | 20.67 | 7.68 | |||||||
Vested, exercisable, and expected to vest at end of period(3) | 1,837 | $ | 17.98 | 8.59 | |||||||
_____________________________________________________________________________ | |||||||||||
-1 | The exercise of stock option awards could result in federal and state income tax expense or benefit related to the difference between the fair value of the stock option award at the date of grant and the intrinsic value of the stock option award when exercised. See Note 7 for additional discussion regarding the tax impact of exercised stock option awards. | ||||||||||
-2 | The vested and exercisable options at March 31, 2015 had no aggregate intrinsic value. | ||||||||||
-3 | The aggregate intrinsic value of vested, exercisable and expected to vest options at March 31, 2015 was $0.7 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, 2015 are as follows: | ||||||||||
Risk-free interest rate(1) | 1.7 | % | |||||||||
Expected option life(2) | 6.25 years | ||||||||||
Expected volatility(3) | 52.59 | % | |||||||||
Fair value per stock option | $ | 6.15 | |||||||||
______________________________________________________________________________ | |||||||||||
-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 its 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 | % | |||||||
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) | 2015 | 2014 | |||||||||
Restricted stock award compensation, net of amounts capitalized | $ | 3,280 | $ | 3,486 | |||||||
Restricted stock option award compensation, net of amounts capitalized | 673 | 628 | |||||||||
Restricted performance share award compensation, net of amounts capitalized | 835 | 215 | |||||||||
Total stock-based compensation, net of amounts capitalized | $ | 4,788 | $ | 4,329 | |||||||
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 | |||||||||||
Risk-free rate(1) | 0.95 | % | |||||||||
Dividend yield | — | % | |||||||||
Expected volatility(2) | 53.78 | % | |||||||||
Laredo stock closing price as of February 27, 2015 | $ | 11.93 | |||||||||
Fair value per performance share | $ | 16.23 | |||||||||
______________________________________________________________________________ | |||||||||||
-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, 2015 | |||||||||
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 for the periods presented consisted of the following: | ||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2015 | 2014 | |||||||
Current taxes | $ | — | $ | — | |||||
Deferred taxes | (3,643 | ) | (107 | ) | |||||
Income tax expense | $ | (3,643 | ) | $ | (107 | ) | |||
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 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) | 2015 | 2014 | |||||||
Income tax expense computed by applying the statutory rate | $ | (1,110 | ) | $ | 37 | ||||
State income tax, net of federal tax benefit and increase in valuation allowance | 91 | 1,287 | |||||||
Non-deductible stock-based compensation | (91 | ) | (116 | ) | |||||
Stock-based compensation tax deficiency | (2,457 | ) | (141 | ) | |||||
Change in deferred tax valuation allowance | (5 | ) | (1,078 | ) | |||||
Other items | (71 | ) | (96 | ) | |||||
Income tax expense | $ | (3,643 | ) | $ | (107 | ) | |||
Schedule of Income Tax Deficiency from Share-based Compensation | The following table presents the tax impact of these shortfalls for the periods presented: | ||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2015 | 2014 | |||||||
Vesting of restricted stock | $ | (2,501 | ) | $ | (1 | ) | |||
Exercise of restricted stock options | — | (142 | ) | ||||||
Tax expense due to shortfalls | $ | (2,501 | ) | $ | (143 | ) | |||
Schedule of significant components of deferred tax assets and liabilities | Significant components of the Company's net deferred tax liability for the periods presented are as follows: | ||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | |||||||
Oil and natural gas properties, midstream service assets and other fixed assets | $ | (456,797 | ) | $ | (424,712 | ) | |||
Net operating loss carry-forward | 388,163 | 353,724 | |||||||
Derivatives | (117,565 | ) | (121,365 | ) | |||||
Stock-based compensation | 6,892 | 10,718 | |||||||
Accrued bonus | 656 | 3,256 | |||||||
Capitalized interest | 3,126 | 3,049 | |||||||
Other | (3,759 | ) | (316 | ) | |||||
Gross deferred tax liability | (179,284 | ) | (175,646 | ) | |||||
Valuation allowance | (1,304 | ) | (1,299 | ) | |||||
Net deferred tax liability | $ | (180,588 | ) | $ | (176,945 | ) | |||
Schedule of net deferred tax assets and liabilities as classified in the consolidated balance sheets | Deferred tax assets and liabilities were classified in the unaudited consolidated balance sheets as follows for the periods presented: | ||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | |||||||
Deferred tax asset | $ | — | $ | — | |||||
Deferred tax liability | (180,588 | ) | (176,945 | ) | |||||
Deferred tax liability | $ | (180,588 | ) | $ | (176,945 | ) |
Derivatives_Tables
Derivatives (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||
Schedule of gains and losses on derivative instruments | The following represents cash settlements received for derivatives for the periods presented: | ||||||||||||
Three months ended March 31, | |||||||||||||
(in thousands) | 2015 | 2014 | |||||||||||
Cash settlements received (paid) for matured commodity derivatives | $ | 63,141 | $ | (1,431 | ) | ||||||||
Early terminations of commodity derivatives received | — | 76,660 | |||||||||||
Cash settlements received for derivatives, net | $ | 63,141 | $ | 75,229 | |||||||||
Summary of open positions and derivatives in place | The following table summarizes open positions as of March 31, 2015, and represents, as of such date, derivatives in place through December 2017 on annual production volumes: | ||||||||||||
Remaining Year | Year | Year | |||||||||||
2015 | 2016 | 2017 | |||||||||||
Oil positions:(1) | |||||||||||||
Puts: | |||||||||||||
Hedged volume (Bbl) | 342,000 | — | — | ||||||||||
Weighted-average price ($/Bbl) | $ | 75 | $ | — | $ | — | |||||||
Swaps: | |||||||||||||
Hedged volume (Bbl) | 504,000 | 1,573,800 | — | ||||||||||
Weighted-average price ($/Bbl) | $ | 96.56 | $ | 84.82 | $ | — | |||||||
Collars: | |||||||||||||
Hedged volume (Bbl) | 4,922,140 | 2,556,000 | 2,628,000 | ||||||||||
Weighted-average floor price ($/Bbl) | $ | 79.81 | $ | 80 | $ | 77.22 | |||||||
Weighted-average ceiling price ($/Bbl) | $ | 95.4 | $ | 93.77 | $ | 97.22 | |||||||
Totals: | |||||||||||||
Total volume hedged with ceiling price (Bbl) | 5,426,140 | 4,129,800 | 2,628,000 | ||||||||||
Weighted-average ceiling price ($/Bbl) | $ | 95.51 | $ | 90.36 | $ | 97.22 | |||||||
Total volume hedge with floor price (Bbl) | 5,768,140 | 4,129,800 | 2,628,000 | ||||||||||
Weighted-average floor price ($/Bbl) | $ | 80.99 | $ | 81.84 | $ | 77.22 | |||||||
Basis swaps:(2) | |||||||||||||
Hedged volume (Bbl) | 2,750,000 | — | — | ||||||||||
Weighted-average price ($/Bbl) | $ | (1.95 | ) | $ | — | $ | — | ||||||
Natural gas positions:(3) | |||||||||||||
Collars: | |||||||||||||
Hedged volume (MMBtu) | 21,520,000 | 18,666,000 | — | ||||||||||
Weighted-average floor price ($/MMBtu) | $ | 3 | $ | 3 | $ | — | |||||||
Weighted-average ceiling price ($/MMBtu) | $ | 5.96 | $ | 5.6 | $ | — | |||||||
_______________________________________________________________________________ | |||||||||||||
-1 | Oil derivatives are settled based on the average of the daily settlement prices for the First Nearby Month of the West Texas Intermediate NYMEX Light Sweet Crude Oil Futures Contract for each NYMEX Trading Day during each month ("WTI NYMEX"). | ||||||||||||
-2 | The associated oil basis swaps are settled on the differential between the WTI Midland and the WTI NYMEX index oil prices. | ||||||||||||
-3 | Natural gas derivatives are settled based on the Inside FERC index price for West Texas Waha for the calculation period. |
Fair_value_measurements_Tables
Fair value measurements (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||
Schedule of fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | The following tables summarize the Company's fair value hierarchy by commodity on a gross basis and the net presentation on the unaudited consolidated balance sheets for derivative assets and liabilities measured at fair value on a recurring basis for the periods presented: | ||||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total gross fair value | Amounts offset | Net fair value presented on the consolidated balance sheets | |||||||||||||||||||
As of March 31, 2015: | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Current: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | 190,569 | $ | — | $ | 190,569 | $ | (3,238 | ) | $ | 187,331 | ||||||||||||
Natural gas derivatives | — | 11,815 | — | 11,815 | — | 11,815 | |||||||||||||||||||
Oil deferred premiums | — | — | — | — | (3,545 | ) | (3,545 | ) | |||||||||||||||||
Natural gas deferred premiums | — | — | — | — | (523 | ) | (523 | ) | |||||||||||||||||
Noncurrent: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | 118,663 | $ | — | $ | 118,663 | $ | — | $ | 118,663 | |||||||||||||
Natural gas derivatives | — | 4,738 | — | 4,738 | — | 4,738 | |||||||||||||||||||
Oil deferred premiums | — | — | — | — | (4,814 | ) | (4,814 | ) | |||||||||||||||||
Natural gas deferred premiums | — | — | — | — | — | — | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||||
Current: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | (3,238 | ) | $ | — | $ | (3,238 | ) | $ | 3,238 | $ | — | |||||||||||
Natural gas derivatives | — | — | — | — | — | — | |||||||||||||||||||
Oil deferred premiums | — | — | (3,545 | ) | (3,545 | ) | 3,545 | — | |||||||||||||||||
Natural gas deferred premiums | — | — | (523 | ) | (523 | ) | 523 | — | |||||||||||||||||
Noncurrent: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Natural gas derivatives | — | — | — | — | — | — | |||||||||||||||||||
Oil deferred premiums | — | — | (4,814 | ) | (4,814 | ) | 4,814 | — | |||||||||||||||||
Natural gas deferred premiums | — | — | — | — | — | — | |||||||||||||||||||
Net derivative position | $ | — | $ | 322,547 | $ | (8,882 | ) | $ | 313,665 | $ | — | $ | 313,665 | ||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total gross fair value | Amounts offset | Net fair value presented on the consolidated balance sheets | |||||||||||||||||||
As of December 31, 2014: | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Current: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | 190,303 | $ | — | $ | 190,303 | $ | — | $ | 190,303 | |||||||||||||
Natural gas derivatives | — | 9,647 | — | 9,647 | — | 9,647 | |||||||||||||||||||
Oil deferred premiums | — | — | — | — | (4,653 | ) | (4,653 | ) | |||||||||||||||||
Natural gas deferred premiums | — | — | — | — | (696 | ) | (696 | ) | |||||||||||||||||
Noncurrent: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | 117,963 | $ | — | $ | 117,963 | $ | — | $ | 117,963 | |||||||||||||
Natural gas derivatives | — | 3,646 | — | 3,646 | — | 3,646 | |||||||||||||||||||
Oil deferred premiums | — | — | — | — | (3,821 | ) | (3,821 | ) | |||||||||||||||||
Natural gas deferred premiums | — | — | — | — | — | — | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||||
Current: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Natural gas derivatives | — | — | — | — | — | — | |||||||||||||||||||
Oil deferred premiums | — | — | (4,768 | ) | (4,768 | ) | 4,653 | (115 | ) | ||||||||||||||||
Natural gas deferred premiums | — | — | (696 | ) | (696 | ) | 696 | — | |||||||||||||||||
Noncurrent: | |||||||||||||||||||||||||
Oil derivatives | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Natural gas derivatives | — | — | — | — | — | — | |||||||||||||||||||
Oil deferred premiums | — | — | (3,821 | ) | (3,821 | ) | 3,821 | — | |||||||||||||||||
Natural gas deferred premiums | — | — | — | — | — | — | |||||||||||||||||||
Net derivative position | $ | — | $ | 321,559 | $ | (9,285 | ) | $ | 312,274 | $ | — | $ | 312,274 | ||||||||||||
Actual cash payments required for deferred premium contracts | The following table presents actual cash payments required for deferred premiums as of March 31, 2015, and for the calendar years following: | ||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
Remaining 2015 | $ | 3,746 | |||||||||||||||||||||||
2016 | 358 | ||||||||||||||||||||||||
2017 | 4,585 | ||||||||||||||||||||||||
2018 | 426 | ||||||||||||||||||||||||
Total | $ | 9,115 | |||||||||||||||||||||||
Summary of changes in assets (liability) 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) | 2015 | 2014 | |||||||||||||||||||||||
Balance of Level 3 at beginning of period | $ | (9,285 | ) | $ | (12,684 | ) | |||||||||||||||||||
Change in net present value of deferred premiums for derivatives | (43 | ) | (65 | ) | |||||||||||||||||||||
Total purchases and settlements: | |||||||||||||||||||||||||
Purchases | (975 | ) | — | ||||||||||||||||||||||
Settlements | 1,421 | 1,959 | |||||||||||||||||||||||
Balance of Level 3 at end of period | $ | (8,882 | ) | $ | (10,790 | ) | |||||||||||||||||||
Net_income_loss_per_share_Tabl
Net income (loss) per share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
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 common shares outstanding and net loss per share for the periods presented: | ||||||||
Three months ended March 31, | |||||||||
(in thousands, except for per share data) | 2015 | 2014 | |||||||
Net loss (numerator): | |||||||||
Net loss—basic and diluted | $ | (472 | ) | $ | (213 | ) | |||
Weighted-average common shares outstanding (denominator)(1): | |||||||||
Basic | 162,426 | 141,067 | |||||||
Diluted | 162,426 | 141,067 | |||||||
Net loss per share: | |||||||||
Basic | $ | — | $ | — | |||||
Diluted | $ | — | $ | — | |||||
______________________________________________________________________________ | |||||||||
-1 | For the three months ended March 31, 2015, weighted-average common shares outstanding used in the computation of basic and diluted net loss per share attributable to stockholders has been computed taking into account the March 2015 Equity Offering. |
Related_Parties_Tables
Related Parties (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Related Party Transactions [Abstract] | |||||||||
Schedule of Related Party Transactions | The following table summarizes items included in the unaudited consolidated statements of operations related to Medallion for the periods presented: | ||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2015 | 2014 | |||||||
Midstream service revenues | $ | 97 | $ | — | |||||
Minimum volume commitments | 1,656 | 516 | |||||||
Interest and other income | 108 | — | |||||||
The following table summarizes items included in the unaudited consolidated balance sheets related to Medallion for the periods presented: | |||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | |||||||
Accounts receivable, net | $ | 97 | $ | — | |||||
Other assets, net | 1,209 | 1,110 | |||||||
Other current liabilities | 4,264 | 3,443 | |||||||
The following table summarizes the net oil, NGL and natural gas sales (oil, NGL and natural gas sales less production taxes) received from Targa and included in the unaudited consolidated statements of operations for the periods presented: | |||||||||
Three months ended March 31, | |||||||||
(in thousands) | 2015 | 2014 | |||||||
Oil, NGL and natural gas sales | $ | 19,631 | $ | 22,479 | |||||
The following table summarizes the amounts included in oil, NGL and natural gas sales receivable from Targa in the unaudited consolidated balance sheets for the periods presented: | |||||||||
(in thousands) | 31-Mar-15 | 31-Dec-14 | |||||||
Accounts receivable, net | $ | 6,088 | $ | 12,869 | |||||
Segments_Tables
Segments (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The following tables present selected financial information regarding the Company's operating segments for the periods presented: | ||||||||||||||||
(in thousands) | Exploration and production | Midstream and marketing | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Three months ended March 31, 2015 | |||||||||||||||||
Oil, NGL and natural gas sales | $ | 118,211 | $ | 112 | $ | (205 | ) | $ | 118,118 | ||||||||
Midstream service revenues | — | 3,683 | (2,374 | ) | 1,309 | ||||||||||||
Sales of purchased oil | — | 31,267 | — | 31,267 | |||||||||||||
Total revenues | 118,211 | 35,062 | (2,579 | ) | 150,694 | ||||||||||||
Lease operating expenses, including production tax | 43,845 | — | (2,379 | ) | 41,466 | ||||||||||||
Midstream service expenses | — | 3,342 | (112 | ) | 3,230 | ||||||||||||
Costs of purchased oil | — | 31,200 | — | 31,200 | |||||||||||||
General and administrative(1) | 19,778 | 2,077 | — | 21,855 | |||||||||||||
Depletion, depreciation and amortization(2) | 70,257 | 1,685 | — | 71,942 | |||||||||||||
Other operating costs and expenses(3) | 7,191 | 308 | — | 7,499 | |||||||||||||
Operating loss | $ | (22,860 | ) | $ | (3,550 | ) | $ | (88 | ) | $ | (26,498 | ) | |||||
Other financial information: | |||||||||||||||||
Loss from equity method investee | $ | — | $ | (433 | ) | $ | — | $ | (433 | ) | |||||||
Interest expense(4) | $ | (31,087 | ) | $ | (1,327 | ) | $ | — | $ | (32,414 | ) | ||||||
Capital expenditures(5) | $ | 247,613 | $ | 20,473 | $ | — | $ | 268,086 | |||||||||
Gross property and equipment(6) | $ | 5,057,149 | $ | 216,345 | $ | (321 | ) | $ | 5,273,173 | ||||||||
Three months ended March 31, 2014 | |||||||||||||||||
Oil, NGL and natural gas sales | $ | 173,214 | $ | — | $ | — | $ | 173,214 | |||||||||
Midstream service revenues | — | 1,030 | (934 | ) | 96 | ||||||||||||
Total revenues | 173,214 | 1,030 | (934 | ) | 173,310 | ||||||||||||
Lease operating expenses, including production tax | 35,169 | — | (934 | ) | 34,235 | ||||||||||||
Midstream service expenses | — | 1,361 | — | 1,361 | |||||||||||||
General and administrative(1) | 26,316 | 1,338 | — | 27,654 | |||||||||||||
Depletion, depreciation and amortization(2) | 48,968 | 639 | — | 49,607 | |||||||||||||
Other operating costs and expenses(3) | 415 | — | — | 415 | |||||||||||||
Operating income (loss) | $ | 62,346 | $ | (2,308 | ) | $ | — | $ | 60,038 | ||||||||
Other financial information: | |||||||||||||||||
Income from equity method investee | $ | — | $ | 16 | $ | — | $ | 16 | |||||||||
Interest expense(4) | $ | (28,374 | ) | $ | (612 | ) | $ | — | $ | (28,986 | ) | ||||||
Capital expenditures(5) | $ | 190,409 | $ | 10,520 | $ | — | $ | 200,929 | |||||||||
Gross property and equipment(6) | $ | 3,729,711 | $ | 82,293 | $ | — | $ | 3,812,004 | |||||||||
_______________________________________________________________________________ | |||||||||||||||||
-1 | General and administrative costs were allocated based on the number of employees in the respective segment as of March 31, 2015 and 2014, respectively. However, the payroll and deferred compensation costs component of general and administrative for each segment is based on actual costs for the three months ended March 31, 2015. | ||||||||||||||||
-2 | Depletion, depreciation and amortization for other fixed assets related to office furnishings were allocated based on the number of employees in the respective segment as of March 31, 2015 and 2014, respectively. | ||||||||||||||||
-3 | Includes the following expenses: restructuring expense, accretion of asset retirement obligations and impairments for the three months ended March 31, 2015 and 2014. These expenses are based on actual costs for the three months ended March 31, 2015 and 2014. | ||||||||||||||||
-4 | Interest expense is allocated based on gross property and equipment and total contributions to the Company's equity method investee as of March 31, 2015 and 2014, respectively. | ||||||||||||||||
-5 | Capital expenditures excludes acquisition of mineral interests for the three months ended March 31, 2014. | ||||||||||||||||
-6 | Gross property and equipment includes investment in equity method investee totaling $72.4 million and $22.8 million for the three months ended March 31, 2015 and 2014, respectively. Other fixed assets related to office furnishings were allocated based on the number of employees in the respective segment on March 31, 2015 and 2014, respectively. |
Subsidiary_guarantees_Tables
Subsidiary guarantees (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||
Schedule of condensed consolidating balance sheet | Condensed consolidating balance sheet | ||||||||||||||||
March 31, 2015 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Subsidiary Guarantors | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Accounts receivable, net | $ | 91,902 | $ | 18,101 | $ | — | $ | 110,003 | |||||||||
Other current assets | 781,157 | 10,444 | — | 791,601 | |||||||||||||
Total oil and natural gas properties, net | 3,338,965 | 7,247 | (321 | ) | 3,345,891 | ||||||||||||
Total midstream service assets, net | — | 129,010 | — | 129,010 | |||||||||||||
Total other fixed assets, net | 45,243 | 315 | — | 45,558 | |||||||||||||
Investment in subsidiaries and equity method investee | 222,981 | 72,350 | (222,981 | ) | 72,350 | ||||||||||||
Total other long-term assets | 156,275 | 4,335 | — | 160,610 | |||||||||||||
Total assets | $ | 4,636,523 | $ | 241,802 | $ | (223,302 | ) | $ | 4,655,023 | ||||||||
Accounts payable | $ | 29,126 | $ | 1,284 | $ | — | $ | 30,410 | |||||||||
Other current liabilities | 847,151 | 15,271 | — | 862,422 | |||||||||||||
Long-term debt | 1,300,000 | — | — | 1,300,000 | |||||||||||||
Other long-term liabilities | 140,813 | 2,266 | — | 143,079 | |||||||||||||
Stockholders' equity | 2,319,433 | 222,981 | (223,302 | ) | 2,319,112 | ||||||||||||
Total liabilities and stockholders' equity | $ | 4,636,523 | $ | 241,802 | $ | (223,302 | ) | $ | 4,655,023 | ||||||||
Condensed consolidating balance sheet | |||||||||||||||||
December 31, 2014 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Subsidiary Guarantors | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Accounts receivable, net | $ | 107,860 | $ | 19,069 | $ | — | $ | 126,929 | |||||||||
Other current assets | 238,300 | 24 | — | 238,324 | |||||||||||||
Total oil and natural gas properties, net | 3,196,231 | 7,277 | (233 | ) | 3,203,275 | ||||||||||||
Total midstream service assets, net | — | 108,462 | — | 108,462 | |||||||||||||
Total other fixed assets, net | 42,046 | 299 | — | 42,345 | |||||||||||||
Investment in subsidiaries and equity method investee | 163,349 | 58,288 | (163,349 | ) | 58,288 | ||||||||||||
Total other long-term assets | 150,430 | 4,496 | — | 154,926 | |||||||||||||
Total assets | $ | 3,898,216 | $ | 197,915 | $ | (163,582 | ) | $ | 3,932,549 | ||||||||
Accounts payable | $ | 38,453 | $ | 555 | $ | — | $ | 39,008 | |||||||||
Other current liabilities | 354,217 | 31,800 | — | 386,017 | |||||||||||||
Long-term debt | 1,801,295 | — | — | 1,801,295 | |||||||||||||
Other long-term liabilities | 140,817 | 2,211 | — | 143,028 | |||||||||||||
Stockholders' equity | 1,563,434 | 163,349 | (163,582 | ) | 1,563,201 | ||||||||||||
Total liabilities and stockholders' equity | $ | 3,898,216 | $ | 197,915 | $ | (163,582 | ) | $ | 3,932,549 | ||||||||
Schedule of condensed consolidating statement of operations | Condensed consolidating statement of operations | ||||||||||||||||
For the three months ended March 31, 2015 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Subsidiary Guarantors | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Total operating revenues | $ | 118,146 | $ | 35,127 | $ | (2,579 | ) | $ | 150,694 | ||||||||
Total operating costs and expenses | 143,308 | 36,375 | (2,491 | ) | 177,192 | ||||||||||||
Operating loss | (25,162 | ) | (1,248 | ) | (88 | ) | (26,498 | ) | |||||||||
Interest expense and other, net | (32,291 | ) | — | — | (32,291 | ) | |||||||||||
Other non-operating income (expense) | 60,712 | (433 | ) | 1,681 | 61,960 | ||||||||||||
Income (loss) before income tax | 3,259 | (1,681 | ) | 1,593 | 3,171 | ||||||||||||
Deferred income tax expense | (3,643 | ) | — | — | (3,643 | ) | |||||||||||
Net loss | $ | (384 | ) | $ | (1,681 | ) | $ | 1,593 | $ | (472 | ) | ||||||
Condensed consolidating statement of operations | |||||||||||||||||
For the three months ended March 31, 2014 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Subsidiary Guarantors | 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 | ||||||||||||
Operating income (loss) | 60,704 | (666 | ) | — | 60,038 | ||||||||||||
Interest expense and other, net | (28,903 | ) | — | — | (28,903 | ) | |||||||||||
Other non-operating income (expense) | (31,907 | ) | (33 | ) | 699 | (31,241 | ) | ||||||||||
Loss before income tax | (106 | ) | (699 | ) | 699 | (106 | ) | ||||||||||
Deferred income tax expense | (107 | ) | — | — | (107 | ) | |||||||||||
Net loss | $ | (213 | ) | $ | (699 | ) | $ | 699 | $ | (213 | ) | ||||||
Schedule of condensed consolidating statement of cash flows | Condensed consolidating statement of cash flows | ||||||||||||||||
For the three months ended March 31, 2015 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Subsidiary Guarantors | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Net cash flows provided by (used in) operating activities | $ | 51,531 | $ | (26,347 | ) | $ | 1,681 | $ | 26,865 | ||||||||
Change in investments between affiliates | (59,634 | ) | 61,315 | (1,681 | ) | — | |||||||||||
Capital expenditures and other | (247,578 | ) | (34,968 | ) | — | (282,546 | ) | ||||||||||
Net cash flows provided by financing activities | 795,453 | — | — | 795,453 | |||||||||||||
Net increase in cash and cash equivalents | 539,772 | — | — | 539,772 | |||||||||||||
Cash and cash equivalents at beginning of period | 29,320 | 1 | — | 29,321 | |||||||||||||
Cash and cash equivalents at end of period | $ | 569,092 | $ | 1 | $ | — | $ | 569,093 | |||||||||
Condensed consolidating statement of cash flows | |||||||||||||||||
For the three months ended March 31, 2014 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | Laredo | Subsidiary Guarantors | Intercompany | Consolidated | |||||||||||||
eliminations | company | ||||||||||||||||
Net cash flows provided by operating activities | $ | 126,666 | $ | 752 | $ | 699 | $ | 128,117 | |||||||||
Change in investments between affiliates | (20,370 | ) | 21,069 | (699 | ) | — | |||||||||||
Capital expenditures and other | (197,445 | ) | (21,821 | ) | — | (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 | |||||||||
Supplementary_information_Tabl
Supplementary information (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Oil and Gas Exploration and Production Industries Disclosures [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) | 2015 | 2014 | |||||||
Property acquisition costs: | |||||||||
Evaluated | $ | — | $ | 25 | |||||
Unevaluated | — | 7,280 | |||||||
Exploration | 4,513 | 8,499 | |||||||
Development costs(1) | 206,672 | 188,313 | |||||||
Total costs incurred | $ | 211,185 | $ | 204,117 | |||||
____________________________________________________________________________ | |||||||||
-1 | The costs incurred for oil and natural gas development activities include $0.5 million and $0.6 million in asset retirement obligations for the three months ended March 31, 2015 and 2014, respectively. |
Organization_Details
Organization (Details) | 3 Months Ended |
Mar. 31, 2015 | |
segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 2 |
Basis_of_presentation_and_sign3
Basis of presentation and significant accounting policies - Current assets and liabilities (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Dec. 31, 2014 | |||
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, NGL and natural gas sales | $44,859,000 | $57,070,000 | ||
Joint operations, net | 25,752,000 | [1] | 33,808,000 | [1] |
Matured derivatives | 20,829,000 | 16,098,000 | ||
Purchased oil and other product sales | 17,963,000 | 18,917,000 | ||
Other | 600,000 | 1,036,000 | ||
Total | 110,003,000 | 126,929,000 | ||
Allowance for doubtful accounts of accounts receivable for joint operations | 100,000 | 800,000 | ||
Other current assets | ||||
Prepaid expenses | 18,043,000 | 6,451,000 | ||
Materials and supplies inventory and other | 9,387,000 | 7,951,000 | ||
Total other current assets | 27,430,000 | 14,402,000 | ||
Other current liabilities | ||||
Accrued interest payable | 27,969,000 | 37,689,000 | ||
Lease operating expense payable | 17,121,000 | 11,963,000 | ||
Other accrued liabilities | 27,958,000 | 51,380,000 | ||
Total other current liabilities | $73,048,000 | $101,032,000 | ||
[1] | Accounts receivable for joint operations are presented net of an allowance for doubtful accounts of $0.1 million and $0.8 million as of MarchB 31, 2015 and DecemberB 31, 2014, respectively. |
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, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | |||
Evaluated oil and natural gas properties | $4,692,853 | $4,446,781 | |
Less accumulated depletion and impairment | -1,654,807 | -1,586,237 | |
Evaluated oil and natural gas properties, net | 3,038,046 | 2,860,544 | |
Unevaluated properties not being amortized | 307,845 | 342,731 | |
Midstream service assets | 139,224 | 117,052 | |
Other fixed assets | 60,901 | 56,165 | |
Total property and equipment, net | 3,520,459 | 3,354,082 | |
Depletion expense in dollars per BOE | 16.08 | 19.61 | |
Well Services and Midstream Assets | |||
Property, Plant and Equipment [Line Items] | |||
Midstream service assets | 139,224 | 117,052 | |
Less accumulated depreciation and amortization | -10,214 | -8,590 | |
Total property and equipment, net | 129,010 | 108,462 | |
Other fixed assets | |||
Property, Plant and Equipment [Line Items] | |||
Other fixed assets | 47,289 | 42,933 | |
Less accumulated depreciation and amortization | -15,343 | -13,820 | |
Total property and equipment, net | 31,946 | 29,113 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Other fixed assets | $13,612 | $13,232 |
Basis_of_presentation_and_sign5
Basis of presentation and significant accounting policies Debt issuance costs and asset retirement obligations (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Debt issuance costs | |||
Capitalization of debt issuance costs | $6,427,000 | $7,796,000 | |
Debt issuance costs, net | 33,513,000 | 28,463,000 | |
Accumulated amortization | 20,700,000 | 19,400,000 | |
Write-off of debt issuance costs | 0 | 124,000 | |
Future amortization expense of debt issuance costs | |||
Remaining 2015 | 4,587,000 | ||
2016 | 6,165,000 | ||
2017 | 6,236,000 | ||
2018 | 6,026,000 | ||
2019 | 2,913,000 | ||
Thereafter | 7,586,000 | ||
Total | 33,513,000 | 28,463,000 | |
Reconciliation of asset retirement obligations liability | |||
Liability at beginning of period | 32,198,000 | 21,743,000 | 21,743,000 |
Liabilities added due to acquisitions, drilling, midstream service asset construction and other | 515,000 | 6,370,000 | |
Accretion expense | 579,000 | 415,000 | 1,787,000 |
Liabilities settled upon plugging and abandonment | -188,000 | -450,000 | |
Revision of estimates | 0 | 2,748,000 | |
Liability at end of period | $33,104,000 | $32,198,000 |
Basis_of_presentation_and_sign6
Basis of presentation and significant accounting policies - Long-lived assets, materials and supplies and line-fill (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Impairment expense | $878 | $0 |
Fair Value, Measurements, Nonrecurring | Level 2 | Materials and Supplies | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Impairment expense | 800 | |
Fair Value, Measurements, Nonrecurring | Level 2 | Line-fill | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Impairment expense | $100 |
Basis_of_presentation_and_sign7
Basis of presentation and significant accounting policies - Supplemental cash flow information (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Accounting Policies [Abstract] | ||
Change in accrued capital expenditures | ($30,066) | $10,622 |
Change in accrued capital contribution to equity method investee | 0 | 5,574 |
Capitalized asset retirement cost | 515 | 576 |
Capitalized interest | $98 | $0 |
Equity_Offering_Details
Equity Offering (Details) (USD $) | 3 Months Ended | 0 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 05, 2015 |
Class of Stock [Line Items] | |||
Proceeds from issuance of common stock, net of offering costs | $754,163 | $0 | |
Common Stock | |||
Class of Stock [Line Items] | |||
Equity issuance, net of offering costs (in shares) | 0 | 69,000,000 | |
Share price | $11.05 | ||
Proceeds from issuance of common stock, net of offering costs | $754,200 | ||
Common Stock | Warburg Pincus LLC | |||
Class of Stock [Line Items] | |||
Equity issuance, net of offering costs (in shares) | 29,800,000 | ||
Ownership percentage held by largest equity investor (percentage) | 41.00% |
Acquisitions_Acquisition_Detai
Acquisitions Acquisition (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||||
Mar. 31, 2015 | Mar. 31, 2014 | Aug. 28, 2014 | Jun. 23, 2014 | Feb. 25, 2014 | Jun. 11, 2014 | |
acre | ||||||
Significant Acquisitions and Disposals [Line Items] | ||||||
Acquisition of mineral interests | $0 | $7,305,000 | ||||
Midland Basin | ||||||
Significant Acquisitions and Disposals [Line Items] | ||||||
Area of Land | 8,156 | |||||
Payments to Acquire Property, Plant, and Equipment | 192,500,000 | |||||
Proved and Unproved Oil and Natural Gas Properties in Glasscock County Texas | ||||||
Significant Acquisitions and Disposals [Line Items] | ||||||
Area of Land | 24 | 278 | ||||
Acquisition of mineral interests | 7,300,000 | |||||
Acquisition of oil and natural gas properties | 1,800,000 | |||||
Proved and Unproved Oil and Natural Gas Properties in Reagan County Texas | ||||||
Significant Acquisitions and Disposals [Line Items] | ||||||
Area of Land | 460 | |||||
Acquisition of oil and natural gas properties | $4,700,000 |
Debt_March_2023_Notes_Details
Debt -March 2023 Notes (Details) (Senior Notes, March 2023 Notes, USD $) | 0 Months Ended | |
Mar. 18, 2015 | Mar. 18, 2015 | |
Debt Instrument [Line Items] | ||
Face amount of debt | $350,000,000 | $350,000,000 |
Interest rate (as a percent) | 6.25% | 6.25% |
Net proceeds from offering | $343,600,000 | |
Prior to March 15, 2016 | ||
Debt Instrument [Line Items] | ||
Debt instrument, redemption period, start date | 18-Mar-15 | |
Debt instrument, redemption period, end date | 15-Mar-16 | |
Debt instrument, redemption price percentage | 110.00% | |
Prior to March 15, 2018 | ||
Debt Instrument [Line Items] | ||
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) | 106.25% | |
Debt instrument redemption principal amount outstanding threshold (percentage) | 65.00% | |
Debt instrument redemption principal amount outstanding threshold (in days) | 180 days | |
Debt instrument, redemption period, start date | 18-Mar-15 | |
Debt instrument, redemption period, end date | 15-Mar-18 |
Debt_Details_of_debt_outstandi
Debt - Details of debt outstanding (Details) (USD $) | 3 Months Ended | |||||
Mar. 31, 2015 | Jan. 23, 2014 | Apr. 27, 2012 | Jan. 20, 2011 | Oct. 19, 2011 | Mar. 31, 2014 | |
January 2022 Notes | ||||||
Debt | ||||||
Debt issued | $450,000,000 | |||||
May 2022 Notes | ||||||
Debt | ||||||
Debt issued | 500,000,000 | |||||
Interest rate (as a percent) | 7.38% | |||||
January 2019 Notes Issued January 2011 | ||||||
Debt | ||||||
Debt issued | 350,000,000 | |||||
Interest rate (as a percent) | 9.50% | |||||
January 2019 Notes Issued October 2011 | ||||||
Debt | ||||||
Debt issued | 200,000,000 | |||||
Interest rate (as a percent) | 9.50% | |||||
Senior Secured Credit Facility | ||||||
Debt | ||||||
Borrowing capacity | 2,000,000,000 | |||||
Borrowing capacity | 1,150,000,000 | |||||
Line of Credit Facility, Aggregate Elected Commitment | 900,000,000 | |||||
Outstanding amount | 0 | |||||
Letter of Credit | ||||||
Debt | ||||||
Borrowing capacity | 20,000,000 | |||||
Outstanding amount | 0 | $0 | ||||
Minimum | Senior Secured Credit Facility | ||||||
Debt | ||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.38% | |||||
Maximum | Senior Secured Credit Facility | ||||||
Debt | ||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.50% | |||||
Senior Notes | January 2022 Notes | ||||||
Debt | ||||||
Interest rate (as a percent) | 5.63% |
Debt_Fair_value_of_debt_Detail
Debt - Fair value of debt (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
Carrying value | ||||
Fair value of debt | ||||
Debt | $1,851,230,000 | $1,801,295,000 | ||
Fair value | ||||
Fair value of debt | ||||
Debt | 1,883,403,000 | 1,713,822,000 | ||
January 2019 Notes Issued October 2011 | ||||
Fair value of debt | ||||
Unamortized bond premium | 1,200,000 | 1,300,000 | ||
Senior Notes | January 2019 Notes | Carrying value | ||||
Fair value of debt | ||||
Debt | 551,230,000 | [1] | 551,295,000 | [1] |
Senior Notes | January 2019 Notes | Fair value | ||||
Fair value of debt | ||||
Debt | 576,653,000 | [1] | 550,000,000 | [1] |
Senior Notes | January 2022 Notes | Carrying value | ||||
Fair value of debt | ||||
Debt | 450,000,000 | 450,000,000 | ||
Senior Notes | January 2022 Notes | Fair value | ||||
Fair value of debt | ||||
Debt | 436,500,000 | 396,014,000 | ||
Senior Notes | May 2022 Notes | Carrying value | ||||
Fair value of debt | ||||
Debt | 500,000,000 | 500,000,000 | ||
Senior Notes | May 2022 Notes | Fair value | ||||
Fair value of debt | ||||
Debt | 519,375,000 | 467,529,000 | ||
Senior Notes | March 2023 Notes | Carrying value | ||||
Fair value of debt | ||||
Debt | 350,000,000 | 0 | ||
Senior Notes | March 2023 Notes | Fair value | ||||
Fair value of debt | ||||
Debt | 350,875,000 | 0 | ||
Senior Secured Credit Facility | Carrying value | ||||
Fair value of debt | ||||
Debt | 0 | 300,000,000 | ||
Senior Secured Credit Facility | Fair value | ||||
Fair value of debt | ||||
Debt | $0 | $300,279,000 | ||
[1] | The carrying value of the January 2019 Notes includes the October Notes unamortized bond premium of $1.2 million and $1.3 million as of MarchB 31, 2015 and DecemberB 31, 2014, respectively. |
Employee_compensation_Details
Employee compensation (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Equity and stock-based compensation | |||
Net stock-based compensation expense | $4,788,000 | $4,329,000 | |
Long-Term Incentive Plan | |||
Equity and stock-based compensation | |||
Shares available for issuance | 10,000,000 | ||
Restricted Stock Awards | |||
Equity and stock-based compensation | |||
Stock-based compensation not yet recognized | 36,900,000 | ||
Stock-based compensation not yet recognized, period for recognition | 2 years 3 months 14 days | ||
Outstanding shares | 2,868,000 | 2,205,000 | |
Net stock-based compensation expense | 3,280,000 | 3,486,000 | |
Employee Stock Option | |||
Equity and stock-based compensation | |||
Stock-based compensation not yet recognized, period for recognition | 3 years 18 days | ||
Requisite service period of the awards | 4 years | ||
Share-based compensation, not yet recognized, stock options | 10,300,000 | ||
Share-based compensation, expiration period | 10 years | ||
Share-based compensation arrangement by share based payment award, vested awards, expiration period, termination caused by death | 1 year | ||
Share-based compensation arrangement by share based payment award, vested awards, expiration period, termination without cause | 90 days | ||
Net stock-based compensation expense | 673,000 | 628,000 | |
Employee Stock Option | Long-Term Incentive Plan | |||
Equity and stock-based compensation | |||
Number of installments over which awards vest and are exercisable | 4 | ||
Number of anniversaries over which awards vest and are exercisable | 4 | ||
Performance Unit Awards | |||
Equity and stock-based compensation | |||
Equity instruments other than options, cash paid per unit | $100 | ||
Net stock-based compensation expense | $1,000,000 | $100,000 | |
Reorganization Grant Date | Restricted Stock Awards | |||
Equity and stock-based compensation | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 20.00% | ||
Annually After Reorganization Grant Date | Restricted Stock Awards | |||
Equity and stock-based compensation | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 20.00% | ||
One Year From Grant Date | Restricted Stock Awards | Long-Term Incentive Plan | |||
Equity and stock-based compensation | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 33.00% | ||
Two Years From Grant Date | Restricted Stock Awards | Long-Term Incentive Plan | |||
Equity and stock-based compensation | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 33.00% | ||
Three Years From Grant Date | Restricted Stock Awards | Long-Term Incentive Plan | |||
Equity and stock-based compensation | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 34.00% | ||
Vesting In Two Years | Restricted Stock Awards | |||
Equity and stock-based compensation | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 50.00% | ||
Vesting In Three Years | Restricted Stock Awards | |||
Equity and stock-based compensation | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 50.00% | ||
One Year From Grant Date | Restricted Stock Awards | |||
Equity and stock-based compensation | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 100.00% | ||
Three Years From Grant Date | Restricted Stock Awards | |||
Equity and stock-based compensation | |||
Share-based compensation arrangement by share-based payment award, award vesting rights (percentage) | 100.00% | ||
February 15, 2013 | Performance Unit Awards | |||
Equity and stock-based compensation | |||
Outstanding shares | 44,481 | ||
February 3, 2012 | Performance Unit Awards | |||
Equity and stock-based compensation | |||
Outstanding shares | 27,381 |
Employee_compensation_Restrict
Employee compensation Restricted Stock Option Awards (Details 1) (Restricted Stock Awards, USD $) | 3 Months Ended | |
Mar. 31, 2015 | ||
Restricted Stock Awards | ||
Restricted stock awards | ||
Outstanding at the beginning of the period (in shares) | 2,205,000 | |
Granted (in shares) | 1,749,000 | |
Forfeited (in shares) | -368,000 | |
Vested (in shares) | -718,000 | [1] |
Outstanding at the end of the period (in shares) | 2,868,000 | |
Weighted-average grant date fair value (per award) | ||
Outstanding at the beginning of the period (in dollars per share) | $22.63 | |
Granted (in dollars per share) | $11.90 | |
Forfeited (in dollars per share) | $22.86 | |
Vested (in dollars per share) | $22.27 | [1] |
Outstanding at the end of the period (in dollars per share) | $16.14 | |
[1] | The vesting of certain restricted stock awards could result in federal and state income tax expense or benefit related to the difference between the market price of the common stock at the date of vesting and the date of grant. See Note 7 for additional discussion regarding the tax impact of vested restricted stock awards. |
Employee_compensation_Restrict1
Employee compensation Restricted Stock Option Awards (Details 2) (Employee Stock Option, USD $) | 3 Months Ended | 12 Months Ended | |
Share data in Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | |
Employee Stock Option | |||
Restricted stock option awards | |||
Outstanding at the beginning of the period (in shares) | 1,367 | ||
Granted (in shares) | 632 | ||
Exercised (in shares) | 0 | [1] | |
Expired or canceled (in shares) | -7 | ||
Forfeited (in shares) | -114 | ||
Outstanding at the end of the period (in shares) | 1,878 | 1,367 | |
Vested and exercisable at end of period (in shares) | 617 | [2] | |
Vested, exercisable, and expected to vest at end of period (in shares) | 1,837 | [3] | |
Weighted-average exercise price (per option) | |||
Outstanding at the beginning of the period (in dollars per share) | $20.76 | ||
Granted (in dollars per share) | $11.93 | ||
Exercised (in dollars per share) | $0 | [1] | |
Expired or cancelled (in dollars per share) | $21.46 | ||
Forfeited (in dollars per share) | $18.03 | ||
Outstanding at end of the period (in dollars per share) | $17.95 | $20.76 | |
Exercisable, weighted average exercise price (in dollars per share) | $20.67 | [2] | |
Vested, exercisable, and expected to vest at end of period, weighted average exercise price (in dollars per share) | $17.98 | [3] | |
Weighted-average remaining contractual term (years) | |||
Outstanding at the beginning of the period | 8 years 7 months 5 days | 8 years 1 month 30 days | |
Granted | 9 years 10 months 27 days | ||
Outstanding at the end of the period | 8 years 7 months 5 days | 8 years 1 month 30 days | |
Vested and exercisable at the end of the period | 7 years 8 months 5 days | [2] | |
Vested, exercisable, and expected to vest at end of period | 8 years 7 months 1 day | [3] | |
Aggregate intrinsic value of vested and exercisable options | $0 | ||
Aggregate intrinsic value of vested, exercisable and expected to vest options | $700,000 | ||
[1] | The exercise of stock option awards could result in federal and state income tax expense or benefit related to the difference between the fair value of the stock option award at the date of grant and the intrinsic value of the stock option award when exercised. See Note 7 for additional discussion regarding the tax impact of exercised stock option awards. | ||
[2] | The vested and exercisable options at MarchB 31, 2015 had no aggregate intrinsic value. | ||
[3] | The aggregate intrinsic value of vested, exercisable and expected to vest options at MarchB 31, 2015 was $0.7 million. |
Employee_compensation_Restrict2
Employee compensation Restricted Stock Option Awards (Details 3) (Employee Stock Option, USD $) | 0 Months Ended | |
Feb. 27, 2015 | ||
Employee Stock Option | ||
Assumptions used to estimate the fair value of options granted | ||
Risk-free interest rate (as a percent) | 1.70% | [1] |
Expected option life (in years) | 6 years 3 months | [2] |
Expected volatility (as a percent) | 52.59% | [3] |
Fair value per option (in dollars per share) | $6.15 | |
[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 its own volatility in order to develop the expected volatility. |
Employee_compensation_Restrict3
Employee compensation Restricted Stock Option Awards (Details 4) (Employee Stock Option) | 3 Months Ended |
Mar. 31, 2015 | |
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 $) | 0 Months Ended | 3 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Feb. 27, 2015 | Feb. 27, 2014 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate (as a percent) | 0.95% | [1] | ||
Dividend yield | 0.00% | |||
Expected volatility (as a percent) | 53.78% | [2] | ||
Laredo stock closing price as of February 27, 2015 | $11.93 | |||
Fair value per performance share | $16.23 | |||
February 2015 Performance Share Awards | February 27, 2015 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Requisite service period of the awards | 3 years | |||
Outstanding shares | 602,501 | |||
February 2014 Performance Share Awards | February 27, 2014 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Requisite service period of the awards | 3 years | |||
Outstanding shares | 271,667 | |||
February 2014 and February 2015 Performance Share Awards | February 27 2014 and February 27, 2015 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation not yet recognized | $14 | |||
Stock-based compensation not yet recognized, period for recognition | 2 years 7 months 5 days | |||
[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, 2015 | Mar. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation, net of amounts capitalized | $4,788 | $4,329 |
Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation, net of amounts capitalized | 3,280 | 3,486 |
Restricted stock option awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation, net of amounts capitalized | 673 | 628 |
Restricted Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation, net of amounts capitalized | $835 | $215 |
Income_taxes_Details
Income taxes (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Current taxes | $0 | $0 |
Deferred taxes | -3,643 | -107 |
Total income tax expense | ($3,643) | ($107) |
Income_taxes_Income_taxes_Deta
Income taxes Income taxes -(Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Income tax expense computed by applying the statutory rate | ($1,110) | $37 |
State income tax, net of federal tax benefit and increase in valuation allowance | 91 | 1,287 |
Non-deductible stock-based compensation | -91 | -116 |
Stock-based compensation tax deficiency | -2,457 | -141 |
Change in deferred tax valuation allowance | -5 | -1,078 |
Other items | -71 | -96 |
Total income tax expense | ($3,643) | ($107) |
Income_taxes_Income_taxes_Deta1
Income taxes Income taxes -(Details 3) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Deferred income tax stock-based compensation tax deficiency | ($2,501) | ($143) |
Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Deferred income tax stock-based compensation tax deficiency | -2,501 | -1 |
Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Deferred income tax stock-based compensation tax deficiency | $0 | ($142) |
Income_taxes_Details_4
Income taxes - (Details 4) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Significant components of deferred tax assets | ||
Oil and natural gas properties, midstream service assets and other fixed assets | $388,163 | $353,724 |
Net operating loss carry-forward | -456,797 | -424,712 |
Derivatives | -117,565 | -121,365 |
Stock-based compensation | 6,892 | 10,718 |
Accrued bonus | 656 | 3,256 |
Capitalized interest | 3,126 | 3,049 |
Other | -3,759 | -316 |
Gross deferred tax liability | -179,284 | -175,646 |
Valuation allowance | -1,304 | -1,299 |
Net deferred tax liability | -180,588 | -176,945 |
Net deferred tax assets and liabilities | ||
Deferred tax asset | 0 | 0 |
Deferred tax liability | -180,588 | -176,945 |
Deferred tax liability | ($180,588) | ($176,945) |
Income_taxes_Additional_Inform
Income taxes - Additional Information (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Operating loss carry-forward | |||
Unrecognized Tax Benefits | $0 | $0 | |
Effective income tax rate (as a percent) | 35.00% | ||
Deferred income tax stock-based compensation tax deficiency | -2,501,000 | -143,000 | |
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation, Potential Amount | 4,500,000 | ||
Deferred tax assets, valuation allowance | 1,304,000 | 1,299,000 | |
Federal | |||
Operating loss carry-forward | |||
Net operating loss carry-forwards | 1,100,000,000 | ||
State | |||
Operating loss carry-forward | |||
Net operating loss carry-forwards | 81,800,000 | ||
Charitable Contribution Carryforward | |||
Operating loss carry-forward | |||
Net operating loss carry-forwards | 3,600,000 | ||
Deferred tax assets, valuation allowance | 1,300,000 | ||
Employee Stock Option | |||
Operating loss carry-forward | |||
Deferred income tax stock-based compensation tax deficiency | $0 | ($142,000) |
Derivatives_Gain_loss_on_deriv
Derivatives - Gain (loss) on derivatives (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Derivative financial instruments | ||
Cash settlements received (paid) for matured commodity derivatives | $63,141 | ($1,431) |
Early terminations of commodity derivatives received | 0 | 76,660 |
Derivatives not designated as hedges | ||
Derivative financial instruments | ||
Cash settlements received for derivatives, net | 63,141 | 75,229 |
Commodity derivatives | Derivatives not designated as hedges | ||
Derivative financial instruments | ||
Cash settlements received (paid) for matured commodity derivatives | 63,141 | -1,431 |
Early terminations of commodity derivatives received | $0 | $76,660 |
Derivatives_Derivative_positio
Derivatives - Derivative positions (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | |
Derivative financial instruments | |||
Cash settlements received for early terminations of derivatives, net | $0 | $76,660 | |
Derivatives not designated as hedges | |||
Derivative financial instruments | |||
Number of open derivative contracts | 34 | ||
Crude Oil | Derivatives not designated as hedges | |||
Open positions | |||
Weighted-average floor price ($/bbl and $/MMbtu), Remaining Year 2015 | 80.99 | ||
Weighted-average floor price ($/bbl and $/MMbtu), Year 2016 | 81.84 | ||
Weighted-average floor price ($/bbl and $/MMbtu), Year 2017 | 77.22 | ||
Weighted-average ceiling price ($/bbl and $/MMbtu), Remaining Year 2015 | 95.51 | ||
Weighted-average ceiling price ($/bbl and $/MMbtu), Year 2016 | 90.36 | ||
Weighted-average ceiling price ($/bbl and $/MMbtu), Year 2017 | 97.22 | ||
Total volume hedged with ceiling price (Bbl) - Remaining Year 2015 | 5,426,140 | ||
Total volume hedged with ceiling price (Bbl) - Year 2016 | 4,129,800 | ||
Total volume hedged with ceiling price (Bbl) - Year 2017 | 2,628,000 | ||
Total volume hedged with floor price (Bbl) - Remaining Year 2015 | 5,768,140 | ||
Total volume hedged with floor price (Bbl) - Year 2016 | 4,129,800 | ||
Total volume hedged with floor price (Bbl) - Year 2017 | 2,628,000 | ||
Crude Oil | Derivatives not designated as hedges | Puts | |||
Open positions | |||
Hedged Volume (Bbl), Remaining Year 2015 | 342,000 | [1] | |
Hedged Volume (Bbl), Year 2016 | 0 | [1] | |
Hedged Volume (Bbl), Year 2017 | 0 | [1] | |
Weighted-average price ($/bbl), Remaining Year 2015 | 75 | [1] | |
Weighted-average price ($/bbl), Year 2016 | 0 | [1] | |
Weighted-average price ($/bbl), Year 2017 | 0 | [1] | |
Crude Oil | Derivatives not designated as hedges | Swaps | |||
Open positions | |||
Hedged Volume (Bbl), Remaining Year 2015 | 504,000 | [1] | |
Hedged Volume (Bbl), Year 2016 | 1,573,800 | [1] | |
Weighted-average price ($/bbl), Remaining Year 2015 | 96.56 | [1] | |
Weighted-average price ($/bbl), Year 2016 | 84.82 | [1] | |
Crude Oil | Derivatives not designated as hedges | Collars | |||
Open positions | |||
Hedged Volume (Bbl), Remaining Year 2015 | 4,922,140 | [1] | |
Hedged Volume (Bbl), Year 2016 | 2,556,000 | [1] | |
Hedged Volume (Bbl), Year 2017 | 2,628,000 | [1] | |
Weighted-average floor price ($/bbl and $/MMbtu), Remaining Year 2015 | 79.81 | [1] | |
Weighted-average floor price ($/bbl and $/MMbtu), Year 2016 | 80 | [1] | |
Weighted-average floor price ($/bbl and $/MMbtu), Year 2017 | 77.22 | [1] | |
Weighted-average ceiling price ($/bbl and $/MMbtu), Remaining Year 2015 | 95.4 | [1] | |
Weighted-average ceiling price ($/bbl and $/MMbtu), Year 2016 | 93.77 | [1] | |
Weighted-average ceiling price ($/bbl and $/MMbtu), Year 2017 | 97.22 | [1] | |
Crude Oil | Derivatives not designated as hedges | Oil Basis Swaps | |||
Open positions | |||
Hedged Volume (Bbl), Remaining Year 2015 | 2,750,000 | [2] | |
Hedged Volume (Bbl), Year 2016 | 0 | [2] | |
Hedged Volume (Bbl), Year 2017 | 0 | [2] | |
Weighted-average price ($/bbl), Remaining Year 2015 | -1.95 | [2] | |
Natural Gas | Derivatives not designated as hedges | Collars | |||
Open positions | |||
Hedged volume (MMBtu), Remaining Year 2015 | 21,520,000 | [3] | |
Hedged volume (MMBtu), Year 2016 | 18,666,000 | [3] | |
Hedged volume (MMBtu), Year 2017 | 0 | [3] | |
Weighted-average floor price ($/bbl and $/MMbtu), Remaining Year 2015 | 3 | [3] | |
Weighted-average floor price ($/bbl and $/MMbtu), Year 2016 | 3 | [3] | |
Weighted-average floor price ($/bbl and $/MMbtu), Year 2017 | 0 | [3] | |
Weighted-average ceiling price ($/bbl and $/MMbtu), Remaining Year 2015 | 5.96 | [3] | |
Weighted-average ceiling price ($/bbl and $/MMbtu), Year 2016 | 5.6 | [3] | |
Weighted-average ceiling price ($/bbl and $/MMbtu), Year 2017 | 0 | [3] | |
[1] | Oil derivatives are settled based on the average of the daily settlement prices for the First Nearby Month of the West Texas Intermediate NYMEX Light Sweet Crude Oil Futures Contract for each NYMEX Trading Day during each month ("WTI NYMEX"). | ||
[2] | The associated oil basis swaps are settled on the differential between the WTI Midland and the WTI NYMEX index oil prices. | ||
[3] | Natural gas derivatives are settled based on the Inside FERC index price for West Texas Waha for the calculation period. |
Fair_value_measurements_Fair_v
Fair value measurements - Fair value hierarchy (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative asset, current | $195,078 | $194,601 |
Derivative asset, noncurrent | 118,587 | 117,788 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liability, current | 0 | -115 |
Crude Oil | Recurring | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Amounts offset, current | -3,238 | 0 |
Derivative asset, current | 187,331 | 190,303 |
Amount offset, current | 0 | 0 |
Derivative asset, noncurrent | 118,663 | 117,963 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Amount offset, current | 3,238 | 0 |
Derivative liability, current | 0 | 0 |
Amount offset, noncurrent | 0 | 0 |
Derivative liability, noncurrent | 0 | 0 |
Crude Oil | Recurring | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Amounts offset, current | -3,545 | -4,653 |
Derivative asset, current | -3,545 | -4,653 |
Amount offset, current | -4,814 | -3,821 |
Derivative asset, noncurrent | -4,814 | -3,821 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Amount offset, current | 3,545 | 4,653 |
Derivative liability, current | 0 | -115 |
Amount offset, noncurrent | 4,814 | 3,821 |
Derivative liability, noncurrent | 0 | 0 |
Crude Oil | Recurring | Level 1 | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 0 | 0 |
Derivative assets before netting, noncurrent | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | 0 | 0 |
Derivative liabilities before netting, noncurrent | 0 | 0 |
Crude Oil | Recurring | Level 1 | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 0 | 0 |
Derivative assets before netting, noncurrent | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | 0 | 0 |
Derivative liabilities before netting, noncurrent | 0 | 0 |
Crude Oil | Recurring | Level 2 | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 190,569 | 190,303 |
Derivative assets before netting, noncurrent | 118,663 | 117,963 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | -3,238 | 0 |
Derivative liabilities before netting, noncurrent | 0 | 0 |
Crude Oil | Recurring | Level 2 | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 0 | 0 |
Derivative assets before netting, noncurrent | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | 0 | 0 |
Derivative liabilities before netting, noncurrent | 0 | 0 |
Crude Oil | Recurring | Level 3 | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 0 | 0 |
Derivative assets before netting, noncurrent | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | 0 | 0 |
Derivative liabilities before netting, noncurrent | 0 | 0 |
Crude Oil | Recurring | Level 3 | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 0 | 0 |
Derivative assets before netting, noncurrent | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | -3,545 | -4,768 |
Derivative liabilities before netting, noncurrent | -4,814 | -3,821 |
Natural Gas | Recurring | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative, Fair Value, Net | 313,665 | 312,274 |
Natural Gas | Recurring | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Amounts offset, current | 0 | 0 |
Derivative asset, current | 11,815 | 9,647 |
Amount offset, current | 0 | 0 |
Derivative asset, noncurrent | 4,738 | 3,646 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Amount offset, current | 0 | 0 |
Derivative liability, current | 0 | 0 |
Amount offset, noncurrent | 0 | 0 |
Derivative liability, noncurrent | 0 | 0 |
Natural Gas | Recurring | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Amounts offset, current | -523 | -696 |
Derivative asset, current | -523 | -696 |
Amount offset, current | 0 | 0 |
Derivative asset, noncurrent | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Amount offset, current | 523 | 696 |
Derivative liability, current | 0 | 0 |
Amount offset, noncurrent | 0 | 0 |
Derivative liability, noncurrent | 0 | 0 |
Natural Gas | Recurring | Level 1 | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative, Fair Value, Net | 0 | 0 |
Natural Gas | Recurring | Level 1 | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 0 | 0 |
Derivative assets before netting, noncurrent | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | 0 | 0 |
Derivative liabilities before netting, noncurrent | 0 | 0 |
Natural Gas | Recurring | Level 1 | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 0 | 0 |
Derivative assets before netting, noncurrent | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | 0 | 0 |
Derivative liabilities before netting, noncurrent | 0 | 0 |
Natural Gas | Recurring | Level 2 | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative, Fair Value, Net | 322,547 | 321,559 |
Natural Gas | Recurring | Level 2 | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 11,815 | 9,647 |
Derivative assets before netting, noncurrent | 4,738 | 3,646 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | 0 | 0 |
Derivative liabilities before netting, noncurrent | 0 | 0 |
Natural Gas | Recurring | Level 2 | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 0 | 0 |
Derivative assets before netting, noncurrent | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | 0 | 0 |
Derivative liabilities before netting, noncurrent | 0 | 0 |
Natural Gas | Recurring | Level 3 | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative, Fair Value, Net | -8,882 | -9,285 |
Natural Gas | Recurring | Level 3 | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 0 | 0 |
Derivative assets before netting, noncurrent | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | 0 | 0 |
Derivative liabilities before netting, noncurrent | 0 | 0 |
Natural Gas | Recurring | Level 3 | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 0 | 0 |
Derivative assets before netting, noncurrent | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | -523 | -696 |
Derivative liabilities before netting, noncurrent | 0 | 0 |
Fair value | Crude Oil | Recurring | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 190,569 | 190,303 |
Derivative assets before netting, noncurrent | 118,663 | 117,963 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | -3,238 | 0 |
Derivative liabilities before netting, noncurrent | 0 | 0 |
Fair value | Crude Oil | Recurring | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 0 | 0 |
Derivative assets before netting, noncurrent | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | -3,545 | -4,768 |
Derivative liabilities before netting, noncurrent | -4,814 | -3,821 |
Fair value | Natural Gas | Recurring | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative, Fair Value, Net | 313,665 | 312,274 |
Fair value | Natural Gas | Recurring | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 11,815 | 9,647 |
Derivative assets before netting, noncurrent | 4,738 | 3,646 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | 0 | 0 |
Derivative liabilities before netting, noncurrent | 0 | 0 |
Fair value | Natural Gas | Recurring | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting, current | 0 | 0 |
Derivative assets before netting, noncurrent | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting, current | -523 | -696 |
Derivative liabilities before netting, noncurrent | $0 | $0 |
Fair_value_measurements_Cash_p
Fair value measurements - Cash payments required for deferred premium contracts (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Fair Value Disclosures [Abstract] | |
Remaining 2015 | $3,746 |
2016 | 358 |
2017 | 4,585 |
2018 | 426 |
Total | $9,115 |
Fair_value_measurements_Summar
Fair value measurements - Summary of changes in assets (liabilities) classified as Level 3 (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Changes in assets classified as Level 3 measurements | ||
Change in net present value of deferred premiums for derivatives | $43 | $65 |
Deferred Premiums | ||
Changes in assets classified as Level 3 measurements | ||
Balance of Level 3 at beginning of period | -9,285 | -12,684 |
Change in net present value of deferred premiums for derivatives | -43 | -65 |
Purchases | -975 | 0 |
Settlements | 1,421 | 1,959 |
Balance of Level 3 at end of period | ($8,882) | ($10,790) |
Fair_value_measurements_Narrat
Fair value measurements -Narrative (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Discount rate | 1.69% |
Maximum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Discount rate | 3.56% |
Commitments_and_contingencies_
Commitments and contingencies (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |||
Well service expense | $0 | $500,000 | $0 |
Drilling Contracts | |||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||
Future commitments | $33,700,000 |
Restructuring_Details
Restructuring (Details) (USD $) | 3 Months Ended | 0 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Jan. 20, 2015 | |
employee | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | $6,042,000 | $0 | |
Reduction in Force (RIF) | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected number of positions eliminated | 75 | ||
Expected number of consultant positions eliminated | 24 | ||
Restructuring expenses | 6,000,000 | ||
Expected cost remaining | $0 |
Net_income_loss_per_share_Deta
Net income (loss) per share (Details) (USD $) | 3 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Earnings Per Share [Abstract] | ||||
Net loss | ($472) | ($213) | ||
Weighted average shares-basic (in shares) | 162,426 | [1] | 141,067 | [1] |
Weighted average shares-diluted (in shares) | 162,426 | [1] | 141,067 | [1] |
Net income (loss), basic (in dollars per share) | $0 | $0 | ||
Net income (loss), diluted (in dollars per share) | $0 | $0 | ||
[1] | For the three months ended MarchB 31, 2015, weighted-average common shares outstanding used in the computation of basic and diluted net loss per share attributable to stockholders has been computed taking into account the March 2015 Equity Offering. |
Variable_interest_entity_Detai
Variable interest entity (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Schedule of Equity Method Investments [Line Items] | ||
Investment in equity method investee | $14,495,000 | $11,300,000 |
Medallion Gathering And Processing LLC | Variable Interest Entity, Not Primary Beneficiary | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in equity method investee | 14,500,000 | 11,300,000 |
Ownership percentage | 49.00% | |
Equity method investment ownership percentage held by investment partner | 51.00% | |
Voting percentage required for key decisions | 75.00% | |
Medallion Gathering And Processing LLC | Variable Interest Entity, Not Primary Beneficiary | Financing Commitments | ||
Schedule of Equity Method Investments [Line Items] | ||
Other commitment | $3,900,000 |
Related_Parties_Consolidated_S
Related Parties - Consolidated Statement of Operations related to Medallion(Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Related Party Transaction [Line Items] | ||
Midstream service revenues | $1,309 | $96 |
Minimum volume commitments | 1,656 | 516 |
Interest and other income | 123 | 83 |
Medallion Gathering And Processing LLC | ||
Related Party Transaction [Line Items] | ||
Midstream service revenues | 97 | 0 |
Minimum volume commitments | 1,656 | 516 |
Interest and other income | $108 | $0 |
Related_Parties_Balance_Sheet_
Related Parties - Balance Sheet related to Medallion (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Related Party Transaction [Line Items] | ||
Accounts receivable, net | $110,003 | $126,929 |
Other assets, net | 8,510 | 8,675 |
Other current liabilities | 73,048 | 101,032 |
Medallion Gathering And Processing LLC | ||
Related Party Transaction [Line Items] | ||
Accounts receivable, net | 97 | 0 |
Other assets, net | 1,209 | 1,110 |
Other current liabilities | $4,264 | $3,443 |
Related_Parties_Consolidated_S1
Related Parties - Consolidated Statement of Operations related to Targa Resources (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Related Party Transaction [Line Items] | ||
Oil, NGL and natural gas sales | $118,118 | $173,214 |
Targa Resources Corp. | ||
Related Party Transaction [Line Items] | ||
Oil, NGL and natural gas sales | $19,631 | $22,479 |
Related_Parties_Balance_Sheet_1
Related Parties - Balance Sheet related to Targa Resources (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Related Party Transaction [Line Items] | ||
Accounts receivable, net | $110,003 | $126,929 |
Targa Resources Corp. | ||
Related Party Transaction [Line Items] | ||
Accounts receivable, net | $6,088 | $12,869 |
Segments_Details
Segments (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Segment Reporting Information [Line Items] | ||||
Oil, NGL and natural gas sales | $118,118 | $173,214 | ||
Midstream service revenues | 1,309 | 96 | ||
Sales of purchased oil | 31,267 | 0 | ||
Total revenues | 150,694 | 173,310 | ||
Lease operating expenses, including production tax | 41,466 | 34,235 | ||
Midstream service expenses | 3,230 | 1,361 | ||
Costs of purchased oil | 31,200 | 0 | ||
General and administrative | 21,855 | [1] | 27,654 | [1] |
Depletion, depreciation and amortization | 71,942 | [2] | 49,607 | [2] |
Other operating costs and expenses | 7,499 | [3] | 415 | [3] |
Operating income (loss) | -26,498 | 60,038 | ||
Income (loss) from equity method investee | -433 | 16 | ||
Interest expense | -32,414 | [4] | -28,986 | [4] |
Capital expenditures | 268,086 | [5] | 200,929 | [5] |
Gross property and equipment | 5,273,173 | [6] | 3,812,004 | [6] |
Exploration and production | ||||
Segment Reporting Information [Line Items] | ||||
Oil, NGL and natural gas sales | 118,211 | 173,214 | ||
Midstream service revenues | 0 | 0 | ||
Sales of purchased oil | 0 | |||
Total revenues | 118,211 | 173,214 | ||
Lease operating expenses, including production tax | 43,845 | 35,169 | ||
Midstream service expenses | 0 | 0 | ||
Costs of purchased oil | 0 | |||
General and administrative | 19,778 | [1] | 26,316 | [1] |
Depletion, depreciation and amortization | 70,257 | [2] | 48,968 | [2] |
Other operating costs and expenses | 7,191 | [3] | 415 | [3] |
Operating income (loss) | -22,860 | 62,346 | ||
Income (loss) from equity method investee | 0 | 0 | ||
Interest expense | -31,087 | [4] | -28,374 | [4] |
Capital expenditures | 247,613 | [5] | 190,409 | [5] |
Gross property and equipment | 5,057,149 | [6] | 3,729,711 | [6] |
Midstream and marketing | ||||
Segment Reporting Information [Line Items] | ||||
Oil, NGL and natural gas sales | 112 | 0 | ||
Midstream service revenues | 3,683 | 1,030 | ||
Sales of purchased oil | 31,267 | |||
Total revenues | 35,062 | 1,030 | ||
Lease operating expenses, including production tax | 0 | 0 | ||
Midstream service expenses | 3,342 | 1,361 | ||
Costs of purchased oil | 31,200 | |||
General and administrative | 2,077 | [1] | 1,338 | [1] |
Depletion, depreciation and amortization | 1,685 | [2] | 639 | [2] |
Other operating costs and expenses | 308 | [3] | 0 | [3] |
Operating income (loss) | -3,550 | -2,308 | ||
Income (loss) from equity method investee | -433 | 16 | ||
Interest expense | -1,327 | [4] | -612 | [4] |
Capital expenditures | 20,473 | [5] | 10,520 | [5] |
Gross property and equipment | 216,345 | [6] | 82,293 | [6] |
Intercompany eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Oil, NGL and natural gas sales | -205 | 0 | ||
Midstream service revenues | -2,374 | -934 | ||
Sales of purchased oil | 0 | |||
Total revenues | -2,579 | -934 | ||
Lease operating expenses, including production tax | -2,379 | -934 | ||
Midstream service expenses | -112 | 0 | ||
Costs of purchased oil | 0 | |||
General and administrative | 0 | [1] | 0 | [1] |
Depletion, depreciation and amortization | 0 | [2] | 0 | [2] |
Other operating costs and expenses | 0 | [3] | 0 | [3] |
Operating income (loss) | -88 | 0 | ||
Income (loss) from equity method investee | 0 | 0 | ||
Interest expense | 0 | [4] | 0 | [4] |
Capital expenditures | 0 | [5] | 0 | [5] |
Gross property and equipment | ($321) | [6] | $0 | [6] |
[1] | General and administrative costs were allocated based on the number of employees in the respective segment as of March 31, 2015 and 2014, respectively. However, the payroll and deferred compensation costs component of general and administrative for each segment is based on actual costs for the three months ended March 31, 2015. | |||
[2] | Depletion, depreciation and amortization for other fixed assets related to office furnishings were allocated based on the number of employees in the respective segment as of March 31, 2015 and 2014, respectively. | |||
[3] | Includes the following expenses: restructuring expense, accretion of asset retirement obligations and impairments for the three months ended March 31, 2015 and 2014. These expenses are based on actual costs for the three months ended March 31, 2015 and 2014. | |||
[4] | Interest expense is allocated based on gross property and equipment and total contributions to the Company's equity method investee as of March 31, 2015 and 2014, respectively. | |||
[5] | Capital expenditures excludes acquisition of mineral interests for the three months ended March 31, 2014. | |||
[6] | Gross property and equipment includes investment in equity method investee totaling $72.4 million and $22.8 million for the three months ended March 31, 2015 and 2014, respectively. Other fixed assets related to office furnishings were allocated based on the number of employees in the respective segment on March 31, 2015 and 2014, respectively. |
Segments_Additional_Informatio
Segments -Additional Information (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
segment | |||
Segment Reporting [Abstract] | |||
Number of operating segments | 2 | ||
Investment in equity method investee | $72,350 | $58,288 | $22,800 |
Subsidiary_guarantees_Condense
Subsidiary guarantees - Condensed consolidating balance sheet (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Subsidiary guarantees | ||
Accounts receivable, net | $110,003 | $126,929 |
Other current assets | 791,601 | 238,324 |
Total oil and natural gas properties, net | 3,345,891 | 3,203,275 |
Total midstream service assets, net | 129,010 | 108,462 |
Total other fixed assets, net | 45,558 | 42,345 |
Investment in subsidiaries and equity method investee | 72,350 | 58,288 |
Total other long-term assets | 160,610 | 154,926 |
Total assets | 4,655,023 | 3,932,549 |
Accounts payable | 30,410 | 39,008 |
Other current liabilities | 862,422 | 386,017 |
Long-term debt | 1,300,000 | 1,801,295 |
Other long-term liabilities | 143,079 | 143,028 |
Stockholders' equity | 2,319,112 | 1,563,201 |
Total liabilities and stockholders' equity | 4,655,023 | 3,932,549 |
Intercompany eliminations | ||
Subsidiary guarantees | ||
Accounts receivable, net | 0 | 0 |
Other current assets | 0 | 0 |
Total oil and natural gas properties, net | -321 | -233 |
Total midstream service assets, net | 0 | 0 |
Total other fixed assets, net | 0 | 0 |
Investment in subsidiaries and equity method investee | -222,981 | -163,349 |
Total other long-term assets | 0 | 0 |
Total assets | -223,302 | -163,582 |
Accounts payable | 0 | 0 |
Other current liabilities | 0 | 0 |
Long-term debt | 0 | 0 |
Other long-term liabilities | 0 | 0 |
Stockholders' equity | -223,302 | -163,582 |
Total liabilities and stockholders' equity | -223,302 | -163,582 |
Laredo | Reportable Legal Entities | ||
Subsidiary guarantees | ||
Accounts receivable, net | 91,902 | 107,860 |
Other current assets | 781,157 | 238,300 |
Total oil and natural gas properties, net | 3,338,965 | 3,196,231 |
Total midstream service assets, net | 0 | 0 |
Total other fixed assets, net | 45,243 | 42,046 |
Investment in subsidiaries and equity method investee | 222,981 | 163,349 |
Total other long-term assets | 156,275 | 150,430 |
Total assets | 4,636,523 | 3,898,216 |
Accounts payable | 29,126 | 38,453 |
Other current liabilities | 847,151 | 354,217 |
Long-term debt | 1,300,000 | 1,801,295 |
Other long-term liabilities | 140,813 | 140,817 |
Stockholders' equity | 2,319,433 | 1,563,434 |
Total liabilities and stockholders' equity | 4,636,523 | 3,898,216 |
Subsidiary Guarantors | Reportable Legal Entities | ||
Subsidiary guarantees | ||
Accounts receivable, net | 18,101 | 19,069 |
Other current assets | 10,444 | 24 |
Total oil and natural gas properties, net | 7,247 | 7,277 |
Total midstream service assets, net | 129,010 | 108,462 |
Total other fixed assets, net | 315 | 299 |
Investment in subsidiaries and equity method investee | 72,350 | 58,288 |
Total other long-term assets | 4,335 | 4,496 |
Total assets | 241,802 | 197,915 |
Accounts payable | 1,284 | 555 |
Other current liabilities | 15,271 | 31,800 |
Long-term debt | 0 | 0 |
Other long-term liabilities | 2,266 | 2,211 |
Stockholders' equity | 222,981 | 163,349 |
Total liabilities and stockholders' equity | $241,802 | $197,915 |
Subsidiary_guarantees_Condense1
Subsidiary guarantees - Condensed consolidating statement of operations (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Subsidiary guarantees | ||
Total operating revenues | $150,694 | $173,310 |
Total operating costs and expenses | 177,192 | 113,272 |
Operating loss | -26,498 | 60,038 |
Interest expense and other, net | -32,291 | -28,903 |
Other non-operating income (expense) | 61,960 | -31,241 |
Income (loss) before income taxes | 3,171 | -106 |
Deferred income tax expense | -3,643 | -107 |
Net loss | -472 | -213 |
Reportable Legal Entities | Laredo | ||
Subsidiary guarantees | ||
Total operating revenues | 118,146 | 173,214 |
Total operating costs and expenses | 143,308 | 112,510 |
Operating loss | -25,162 | 60,704 |
Interest expense and other, net | -32,291 | -28,903 |
Other non-operating income (expense) | 60,712 | -31,907 |
Income (loss) before income taxes | 3,259 | -106 |
Deferred income tax expense | -3,643 | -107 |
Net loss | -384 | -213 |
Reportable Legal Entities | Subsidiary Guarantors | ||
Subsidiary guarantees | ||
Total operating revenues | 35,127 | 1,030 |
Total operating costs and expenses | 36,375 | 1,696 |
Operating loss | -1,248 | -666 |
Interest expense and other, net | 0 | 0 |
Other non-operating income (expense) | -433 | -33 |
Income (loss) before income taxes | -1,681 | -699 |
Deferred income tax expense | 0 | 0 |
Net loss | -1,681 | -699 |
Intercompany eliminations | ||
Subsidiary guarantees | ||
Total operating revenues | -2,579 | -934 |
Total operating costs and expenses | -2,491 | -934 |
Operating loss | -88 | 0 |
Interest expense and other, net | 0 | 0 |
Other non-operating income (expense) | 1,681 | 699 |
Income (loss) before income taxes | 1,593 | 699 |
Deferred income tax expense | 0 | 0 |
Net loss | $1,593 | $699 |
Subsidiary_guarantees_Condense2
Subsidiary guarantees - Condensed consolidating statement of cash flows (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Subsidiary guarantees | ||
Net cash flows provided by (used in) operating activities | $26,865 | $128,117 |
Change in investments between affiliates | 0 | 0 |
Capital expenditures and other | -282,546 | -219,266 |
Net cash flows provided by financing activities | 795,453 | 440,515 |
Net increase in cash and cash equivalents | 539,772 | 349,366 |
Cash and cash equivalents at beginning of period | 29,321 | 198,153 |
Cash and cash equivalents at end of period | 569,093 | 547,519 |
Reportable Legal Entities | Laredo | ||
Subsidiary guarantees | ||
Net cash flows provided by (used in) operating activities | 51,531 | 126,666 |
Change in investments between affiliates | -59,634 | -20,370 |
Capital expenditures and other | -247,578 | -197,445 |
Net cash flows provided by financing activities | 795,453 | 440,515 |
Net increase in cash and cash equivalents | 539,772 | 349,366 |
Cash and cash equivalents at beginning of period | 29,320 | 198,153 |
Cash and cash equivalents at end of period | 569,092 | 547,519 |
Reportable Legal Entities | Subsidiary Guarantors | ||
Subsidiary guarantees | ||
Net cash flows provided by (used in) operating activities | -26,347 | 752 |
Change in investments between affiliates | 61,315 | 21,069 |
Capital expenditures and other | -34,968 | -21,821 |
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 | 1 | 0 |
Cash and cash equivalents at end of period | 1 | 0 |
Intercompany eliminations | ||
Subsidiary guarantees | ||
Net cash flows provided by (used in) operating activities | 1,681 | 699 |
Change in investments between affiliates | -1,681 | -699 |
Capital expenditures and other | 0 | 0 |
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_Subsequent_E
Subsequent events Subsequent Events (Details) (USD $) | 0 Months Ended | ||||
Apr. 30, 2015 | Apr. 06, 2015 | Mar. 31, 2015 | 6-May-15 | 4-May-15 | |
Senior Secured Credit Facility | |||||
Subsequent Event [Line Items] | |||||
Outstanding amount | $0 | ||||
Borrowing capacity | 1,150,000,000 | ||||
Line of Credit Facility, Aggregate Elected Commitment | 900,000,000 | ||||
Senior Secured Credit Facility | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Proceeds from issuance of long-term debt | 10,000,000 | 50,000,000 | |||
Outstanding amount | 60,000,000 | ||||
Borrowing capacity | 1,250,000,000 | ||||
Line of Credit Facility, Aggregate Elected Commitment | 1,000,000,000 | ||||
Senior Notes | January 2019 Notes | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Repurchased face amount | 550,000,000 | ||||
Debt instrument, redemption price percentage | 104.75% | ||||
Gains (losses) on extinguishment of debt | ($38,900,000) |
Supplementary_information_Deta
Supplementary information (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | |||
Property acquisition costs: | ||||
Proved | $0 | $25,000 | ||
Unproved | 0 | 7,280,000 | ||
Exploration | 4,513,000 | 8,499,000 | ||
Development costs | 206,672,000 | [1] | 188,313,000 | [1] |
Total costs incurred | 211,185,000 | 204,117,000 | ||
Asset retirement obligations included in development costs | $500,000 | $600,000 | ||
[1] | The costs incurred for oil and natural gas development activities include $0.5 million and $0.6 million in asset retirement obligations for the three months ended MarchB 31, 2015 and 2014, respectively. |