Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 01, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Laredo Petroleum, Inc. | |
Entity Central Index Key | 1,528,129 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 240,124,869 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 |
Consolidated balance sheets
Consolidated balance sheets - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 19,309 | $ 31,154 |
Accounts receivable, net | 88,543 | 87,699 |
Derivatives | 88,965 | 198,805 |
Other current assets | 14,445 | 14,574 |
Total current assets | 211,262 | 332,232 |
Oil and natural gas properties, full cost method: | ||
Evaluated properties | 5,309,151 | 5,103,635 |
Unevaluated properties not being depleted | 114,507 | 140,299 |
Less accumulated depletion and impairment | (4,448,482) | (4,218,942) |
Oil and natural gas properties, net | 975,176 | 1,024,992 |
Midstream service assets, net | 128,052 | 131,725 |
Other fixed assets, net | 40,951 | 43,538 |
Property and equipment, net | 1,144,179 | 1,200,255 |
Derivatives | 32,680 | 77,443 |
Investment in equity method investee | 213,616 | 192,524 |
Other assets, net | 8,414 | 10,833 |
Total assets | 1,610,151 | 1,813,287 |
Current liabilities: | ||
Accounts payable | 14,500 | 14,181 |
Undistributed revenue and royalties | 25,452 | 34,540 |
Accrued capital expenditures | 39,860 | 61,872 |
Derivatives | 1,480 | 0 |
Other current liabilities | 72,520 | 106,222 |
Total current liabilities | 153,812 | 216,815 |
Long-term debt, net | 1,392,877 | 1,416,226 |
Derivatives | 3,740 | 0 |
Asset retirement obligations | 46,716 | 44,759 |
Other noncurrent liabilities | 3,844 | 4,040 |
Total liabilities | 1,600,989 | 1,681,840 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value, 50,000,000 shares authorized and zero issued as of June 30, 2016 and December 31, 2015 | 0 | 0 |
Common stock, $0.01 par value, 450,000,000 shares authorized and 227,197,566 and 213,808,003 issued and outstanding as of June 30, 2016 and December 31, 2015, respectively | 2,272 | 2,138 |
Additional paid-in capital | 2,216,036 | 2,086,652 |
Accumulated deficit | (2,209,146) | (1,957,343) |
Total stockholders’ equity | 9,162 | 131,447 |
Total liabilities and stockholders’ equity | $ 1,610,151 | $ 1,813,287 |
Consolidated balance sheets (Pa
Consolidated balance sheets (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock issued (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 450,000,000 | 450,000,000 |
Common stock issued (in shares) | 227,197,566 | 213,808,003 |
Common stock outstanding (in shares) | 227,197,566 | 213,808,003 |
Consolidated statements of oper
Consolidated statements of operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |||||
Revenues: | ||||||||
Oil, NGL and natural gas sales | $ 102,526 | $ 125,554 | $ 175,668 | $ 243,672 | ||||
Midstream service revenues | 1,632 | 1,726 | 3,433 | 3,035 | ||||
Sales of purchased oil | 42,615 | 55,051 | 74,229 | 86,318 | ||||
Total revenues | 146,773 | 182,331 | 253,330 | 333,025 | ||||
Costs and expenses: | ||||||||
Lease operating expenses | 19,225 | 29,206 | 39,743 | 61,586 | ||||
Production and ad valorem taxes | 7,982 | 9,500 | 14,417 | 18,586 | ||||
Midstream service expenses | 1,178 | 1,597 | 1,787 | 3,171 | ||||
Minimum volume commitments | 0 | 3,579 | 0 | 5,235 | ||||
Costs of purchased oil | 44,012 | 54,417 | 76,958 | 85,617 | ||||
General and administrative | 20,502 | [1] | 23,208 | [1] | 39,953 | [2] | 45,063 | [2] |
Restructuring expenses | 0 | 0 | 0 | 6,042 | ||||
Accretion of asset retirement obligations | 860 | 593 | 1,704 | 1,172 | ||||
Depletion, depreciation and amortization | 34,177 | [3] | 72,112 | [3] | 75,655 | [4] | 144,054 | [4] |
Impairment expense | 963 | 489,599 | 162,027 | 490,477 | ||||
Total costs and expenses | 128,899 | 683,811 | 412,244 | 861,003 | ||||
Operating income (loss) | 17,874 | (501,480) | (158,914) | (527,978) | ||||
Non-operating income (expense): | ||||||||
Loss on derivatives, net | (68,518) | (63,899) | (50,633) | (744) | ||||
Income from equity method investee | 3,696 | 2,914 | 5,994 | 2,481 | ||||
Interest expense | (23,512) | [5] | (23,970) | [5] | (47,217) | [6] | (56,384) | [6] |
Interest and other income | 11 | 173 | 110 | 296 | ||||
Loss on early redemption of debt | 0 | (31,537) | [7] | 0 | (31,537) | [8] | ||
Write-off of debt issuance costs | (842) | 0 | (842) | 0 | ||||
Loss on disposal of assets, net | (141) | (1,081) | (301) | (1,843) | ||||
Non-operating expense, net | (89,306) | (117,400) | (92,889) | (87,731) | ||||
Loss before income taxes | (71,432) | (618,880) | (251,803) | (615,709) | ||||
Income tax benefit: | ||||||||
Deferred | 0 | 221,846 | 0 | 218,203 | ||||
Total income tax benefit | 0 | 221,846 | 0 | 218,203 | ||||
Net loss | $ (71,432) | $ (397,034) | $ (251,803) | $ (397,506) | ||||
Net loss per common share: | ||||||||
Basic (in dollars per share) | $ (0.33) | $ (1.88) | $ (1.17) | $ (2.13) | ||||
Diluted (in dollars per share) | $ (0.33) | $ (1.88) | $ (1.17) | $ (2.13) | ||||
Weighted-average common shares outstanding: | ||||||||
Basic (in shares) | 217,564 | 211,078 | 214,562 | 186,886 | ||||
Diluted (in shares) | 217,564 | 211,078 | 214,562 | 186,886 | ||||
[1] | General and administrative expense was allocated based on the number of employees in the respective segment as of June 30, 2016 and 2015. Certain components of general and administrative expense, primarily payroll, deferred compensation and vehicle expenses, were not allocated but were actual expenses for each segment. Land and geology expenses were not allocated to the midstream and marketing segment. | |||||||
[2] | General and administrative expense was allocated based on the number of employees in the respective segment as of June 30, 2016 and 2015. Certain components of general and administrative expense, primarily payroll, deferred compensation and vehicle expenses, were not allocated but were actual expenses for each segment. Land and geology expenses were not allocated to the midstream and marketing segment. | |||||||
[3] | Depletion, depreciation and amortization were actual expenses for each segment with the exception of the allocation of depreciation of other fixed assets, which is based on the number of employees in the respective segment as of June 30, 2016 and 2015. | |||||||
[4] | Depletion, depreciation and amortization were actual expenses for each segment with the exception of the allocation of depreciation of other fixed assets, which is based on the number of employees in the respective segment as of June 30, 2016 and 2015. | |||||||
[5] | Interest expense was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2016 and 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2016 and 2015. | |||||||
[6] | Interest expense was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2016 and 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2016 and 2015. | |||||||
[7] | Loss on early redemption of debt was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2015. | |||||||
[8] | Loss on early redemption of debt was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2015. |
Consolidated statement of stock
Consolidated statement of stockholders' equity - 6 months ended Jun. 30, 2016 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional paid-in capital | Treasury Stock (at cost) | Accumulated deficit |
Balance, beginning of period at Dec. 31, 2015 | $ 131,447 | $ 2,138 | $ 2,086,652 | $ 0 | $ (1,957,343) |
Balance, beginning of period (in shares) at Dec. 31, 2015 | 213,808 | 0 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Restricted stock awards | $ 30 | (30) | |||
Restricted stock awards (in shares) | 2,968 | ||||
Restricted stock forfeitures | $ (2) | 2 | |||
Restricted stock forfeitures (in shares) | (221) | ||||
Vested restricted stock exchanged for tax withholding | (1,541) | $ (1,541) | |||
Vested restricted stock exchanged for tax withholding (in shares) | 288 | ||||
Retirement of treasury stock | $ (3) | (1,538) | $ 1,541 | ||
Retirement of treasury stock (in shares) | (288) | (288) | |||
Exercise of employee stock options | 67 | 67 | |||
Exercise of employee stock options (in shares) | 6 | ||||
Equity issuance, net of offering costs | 119,310 | $ 109 | 119,201 | ||
Equity issuance, net of offering costs (in shares) | 10,925 | ||||
Stock-based compensation | 11,682 | 11,682 | |||
Net loss | (251,803) | (251,803) | |||
Balance, end of period at Jun. 30, 2016 | $ 9,162 | $ 2,272 | $ 2,216,036 | $ 0 | $ (2,209,146) |
Balance, end of period (in shares) at Jun. 30, 2016 | 227,198 | 0 |
Consolidated statements of cash
Consolidated statements of cash flows - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | ||
Cash flows from operating activities: | |||
Net loss | $ (251,803) | $ (397,506) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Deferred income tax benefit | 0 | (218,203) | |
Depletion, depreciation and amortization | 75,655 | 144,054 | |
Impairment expense | 162,027 | 490,477 | |
Loss on early redemption of debt | 0 | 31,537 | [1] |
Non-cash stock-based compensation, net of amounts capitalized | 9,911 | 11,056 | |
Loss on derivatives, net | 50,633 | 744 | |
Cash settlements received for matured derivatives, net | 113,319 | 109,737 | |
Cash settlements received for early terminations of derivatives, net | 80,000 | 0 | |
Change in net present value of deferred premiums paid for derivatives | 133 | 88 | |
Cash premiums paid for derivatives | (84,263) | (2,670) | |
Amortization of debt issuance costs | 2,187 | 2,501 | |
Write-off of debt issuance costs | 842 | 0 | |
Income from equity method investee | (5,994) | (2,481) | |
Cash settlement of performance unit awards | (6,394) | (2,738) | |
Other, net | 2,009 | 3,012 | |
(Increase) decrease in accounts receivable | (844) | 16,586 | |
Increase in other assets | (117) | (9,097) | |
Increase (decrease) in accounts payable | 319 | (15,744) | |
Decrease in undistributed revenues and royalties | (9,088) | (20,699) | |
Increase (decrease) in other accrued liabilities | 295 | (28,341) | |
(Decrease) increase in other noncurrent liabilities | (196) | 318 | |
Increase in fair value of performance unit awards | 0 | 1,674 | |
Net cash provided by operating activities | 138,631 | 114,305 | |
Capital expenditures: | |||
Oil and natural gas properties | (197,042) | (374,508) | |
Midstream service assets | (3,425) | (34,137) | |
Other fixed assets | (832) | (6,541) | |
Investment in equity method investee | (42,681) | (14,495) | |
Proceeds from dispositions of capital assets, net of costs | 350 | 35 | |
Net cash used in investing activities | (243,630) | (429,646) | |
Cash flows from financing activities: | |||
Borrowings on Senior Secured Credit Facility | 120,000 | 300,000 | |
Payments on Senior Secured Credit Facility | (144,682) | (475,000) | |
Issuance of March 2023 Notes | 0 | 350,000 | |
Redemption of January 2019 Notes | 0 | (576,200) | |
Proceeds from issuance of common stock, net of offering costs | 119,310 | 754,163 | |
Purchase of treasury stock | (1,541) | (2,591) | |
Proceeds from exercise of employee stock options | 67 | 0 | |
Payments for debt issuance costs | 0 | (6,759) | |
Net cash provided by financing activities | 93,154 | 343,613 | |
Net (decrease) increase in cash and cash equivalents | (11,845) | 28,272 | |
Cash and cash equivalents at beginning of period | 31,154 | 29,321 | |
Cash and cash equivalents at end of period | $ 19,309 | $ 57,593 | |
[1] | Loss on early redemption of debt was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2015. |
Organization
Organization | 6 Months Ended |
Jun. 30, 2016 | |
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, and the transportation of oil and natural gas from such 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" refers to Laredo, LMS and GCM 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: (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 Laredo's exploration and production segment and third parties with products and services that need to be delivered by midstream infrastructure, including oil and natural gas gathering services as well as rig fuel, natural gas lift and water delivery and takeaway in and around Laredo's primary production corridors. |
Basis of presentation and signi
Basis of presentation and significant accounting policies | 6 Months Ended |
Jun. 30, 2016 | |
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 accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). All material intercompany transactions and account balances have been eliminated in the consolidation of accounts. The Company 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 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, 2015 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 June 30, 2016 , results of operations for the three and six months ended June 30, 2016 and 2015 and cash flows for the six months ended June 30, 2016 and 2015 . 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 2015 Annual Report. b. 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 derivatives, deferred premiums and performance unit awards. As fair value is a market-based measurement, it is determined based on the assumptions that would be used by market participants. 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. c. Reclassifications Certain amounts in the accompanying unaudited consolidated financial statements have been reclassified to conform to the 2016 presentation. These reclassifications had no impact to previously reported net loss, stockholders' equity or cash flows. d. Accounts receivable The Company sells produced oil, NGL and natural gas and purchased oil to various customers and participates with other parties in the development and operation of oil and natural gas properties. 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. Joint interest operations 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 some or all of 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 consisted of the following components for the periods presented: (in thousands) June 30, 2016 December 31, 2015 Oil, NGL and natural gas sales $ 42,629 $ 25,582 Joint operations, net (1) 18,425 21,375 Sales of purchased oil and other products 15,000 11,775 Matured derivatives 12,223 27,469 Other 266 1,498 Total $ 88,543 $ 87,699 ______________________________________________________________________________ (1) Accounts receivable for joint operations are presented net of an allowance for doubtful accounts of $0.2 million as of both June 30, 2016 and December 31, 2015 . e. Derivatives The Company uses derivatives to reduce exposure to fluctuations in the prices of oil, NGL 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 in the form of puts, swaps, collars and, in prior periods, basis swaps. Derivatives are recorded at fair value and are presented on a net basis 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 Note 9 for discussion regarding the fair value of the Company's derivatives. 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 Notes 8 and 9 for discussion regarding the Company's derivatives. f. Property and equipment The following table sets forth the Company's property and equipment as of the periods presented: (in thousands) June 30, 2016 December 31, 2015 Evaluated oil and natural gas properties $ 5,309,151 $ 5,103,635 Less accumulated depletion and impairment (4,448,482 ) (4,218,942 ) Evaluated oil and natural gas properties, net 860,669 884,693 Unevaluated properties not being depleted 114,507 140,299 Midstream service assets 148,227 147,811 Less accumulated depreciation (20,175 ) (16,086 ) Midstream service assets, net 128,052 131,725 Depreciable other fixed assets 46,255 46,799 Less accumulated depreciation and amortization (20,218 ) (18,169 ) Depreciable other fixed assets, net 26,037 28,630 Land 14,914 14,908 Total property and equipment, net $ 1,144,179 $ 1,200,255 For the three months ended June 30, 2016 and 2015 , depletion expense was $7.06 per barrel of oil equivalent ("BOE") sold and $16.19 per BOE sold, respectively. For the six months ended June 30, 2016 and 2015 , depletion expense was $8.01 per BOE sold and $16.13 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, NGL and natural gas are capitalized and depleted 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 depleted 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, NGL 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 revenues from proved oil and natural gas properties discounted at 10% . Per the SEC guidelines, 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 before differentials ("Benchmark Prices"). The Benchmark Prices are then adjusted for quality, transportation fees, geographical differentials, marketing bonuses or deductions and other factors affecting the price received at the wellhead ("Realized Prices"). The Realized Prices are utilized to calculate the discounted future net revenues in the full cost ceiling calculation. In the event the unamortized cost of evaluated oil and natural gas properties being depleted 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. The following table presents the Benchmark Prices, Realized Prices and the corresponding non-cash full cost ceiling impairments recorded as of the periods presented: For the quarters ended June 30, 2016 March 31, 2016 December 31, 2015 September 30, 2015 June 30, 2015 Benchmark Prices Oil ($/Bbl) $ 39.63 $ 42.77 $ 46.79 $ 55.73 $ 68.17 NGL ($/Bbl) $ 17.08 $ 17.51 $ 18.75 $ 21.87 $ 26.73 Natural gas ($/MMBtu) $ 2.17 $ 2.31 $ 2.47 $ 2.89 $ 3.22 Realized Prices Oil ($/Bbl) $ 37.96 $ 41.33 $ 45.58 $ 54.28 $ 66.68 NGL ($/Bbl) $ 10.80 $ 11.25 $ 12.50 $ 15.25 $ 19.56 Natural gas ($/Mcf) $ 1.64 $ 1.75 $ 1.89 $ 2.30 $ 2.62 Non-cash full cost ceiling impairment (in thousands) $ — $ 161,064 $ 975,011 $ 906,420 $ 488,046 Full cost ceiling impairment expense is included in the "Impairment expense" line item in the unaudited consolidated statements of operations and in the financial information provided for the Company's exploration and production segment presented in Note 16. g. Long-lived assets and inventory 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 inventory used in developing oil and natural gas properties and midstream service assets are carried at the lower of cost or market ("LCM") with cost determined using the weighted-average cost method and are included in "Other current assets" and "Other assets, net" on the unaudited consolidated balance sheets. The market price for materials and supplies is determined utilizing a replacement cost approach (Level 2). Beginning at March 31, 2016, frac pit water inventory used in developing oil and natural gas properties is carried at LCM with cost determined using the weighted-average cost method and is included in "Other current assets" on the unaudited consolidated balance sheets. The market price for frac pit water inventory is determined utilizing a replacement cost approach. The minimum volume of product in a pipeline system that 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. 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). The following table presents inventory impairments recorded as of the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Inventory impairments: Materials and supplies (1) $ 963 $ 1,553 $ 963 $ 2,320 Line-fill (2) — — — 111 Total inventory impairments $ 963 $ 1,553 $ 963 $ 2,431 ______________________________________________________________________________ (1) Included in "Impairment expense" in the unaudited consolidated statements of operations and in "Impairment expense" for the Company's exploration and production segment presented in Note 16. (2) Included in "Impairment expense" in the unaudited consolidated statements of operations and in "Impairment expense" for the Company's midstream and marketing segment presented in Note 16. h. Debt issuance costs Debt issuance fees, which are recorded 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 $6.8 million of debt issuance costs during the six months ended June 30, 2015 mainly as a result of the issuance of the March 2023 Notes (as defined below). No debt issuance costs were capitalized in the six months ended June 30, 2016 . The Company had total debt issuance costs of $20.9 million and $23.9 million , net of accumulated amortization of $19.2 million and $17.0 million , as of June 30, 2016 and December 31, 2015 , respectively. The Company wrote-off approximately $0.8 million of debt issuance costs during the six months ended June 30, 2016 as a result of changes in the borrowing base and aggregate elected commitment of the Senior Secured Credit Facility, which are included in the unaudited consolidated statements of operations in the "Write-off of debt issuance costs" line item. During the six months ended June 30, 2015 , the Company wrote-off approximately $6.6 million of debt issuance costs as a result of the early redemption of the January 2019 Notes (as defined below), which are included in the unaudited consolidated statements of operations in the "Loss on early redemption of debt" line item. Unamortized debt issuance costs related to the Company's senior unsecured notes are presented in "Long-term debt, net" on the Company's unaudited consolidated balance sheets. Unamortized debt issuance costs related to the Senior Secured Credit Facility are presented in "Other assets, net" on the Company's unaudited consolidated balance sheets. See Note 5.g for additional discussion of debt issuance costs. Future amortization expense of debt issuance costs as of the period presented is as follows: (in thousands) June 30, 2016 Remaining 2016 $ 2,092 2017 4,238 2018 4,068 2019 2,915 2020 3,005 Thereafter 4,585 Total $ 20,903 i. Other current assets and liabilities Other current assets consist of the following components for the periods presented: (in thousands) June 30, 2016 December 31, 2015 Inventory (1) $ 6,986 $ 6,974 Prepaid expenses and other 7,459 7,600 Total other current assets $ 14,445 $ 14,574 ______________________________________________________________________________ (1) See Note 2.g for discussion of inventory held by the Company. Other current liabilities consist of the following components for the periods presented: (in thousands) June 30, 2016 December 31, 2015 Accrued interest payable $ 24,161 $ 24,208 Costs of purchased oil payable 15,629 12,189 Lease operating expense payable 11,570 13,205 Accrued compensation and benefits 8,720 14,342 Capital contribution payable to equity method investee (1) — 27,583 Other accrued liabilities 12,440 14,695 Total other current liabilities $ 72,520 $ 106,222 ______________________________________________________________________________ (1) See Notes 14 and 15 for additional discussion regarding our equity method investee. j. 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 service 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, (iii) estimated removal and/or remediation costs for midstream service assets, (iv) estimated remaining life of midstream service 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 assets and perform other remediation of the sites where such pipeline 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 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) Six months ended June 30, 2016 Year ended December 31, 2015 Liability at beginning of period $ 46,306 $ 32,198 Liabilities added due to acquisitions, drilling, midstream service asset construction and other 253 2,236 Accretion expense 1,704 2,423 Liabilities settled upon plugging and abandonment (526 ) (146 ) Liabilities removed due to sale of property — (2,005 ) Revision of estimates (1) — 11,600 Liability at end of period $ 47,737 $ 46,306 _____________________________________________________________________________ (1) The revision of estimates that occurred during the year ended December 31, 2015 is mainly related to a change in the estimated remaining life per well due to the decline in commodity prices. k. Fair value measurements The carrying amounts reported in the unaudited consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, undistributed revenue and royalties, accrued capital expenditures and other accrued assets and liabilities approximate their fair values. See Note 5.f for fair value disclosures related to the Company's debt obligations. The Company carries its derivatives at fair value. See Note 9 for details regarding the fair value of the Company's derivatives. l. 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. m. Compensation awards Stock-based compensation expense, net of amounts capitalized, is included in "General and administrative" in the unaudited consolidated statements of operations over the awards' vesting periods and is based on the awards' 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, in prior periods, the 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. n. 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 June 30, 2016 or December 31, 2015 . o. Non-cash investing and supplemental cash flow information The following presents the non-cash investing and supplemental cash flow information for the periods presented: Six months ended June 30, (in thousands) 2016 2015 Non-cash investing information: Change in accrued capital expenditures $ (22,012 ) $ (53,209 ) Change in accrued capital contribution to equity method investee (1) $ (27,583 ) $ 27,917 Capitalized asset retirement cost $ 253 $ 1,402 Supplemental cash flow information: Capitalized interest $ 115 $ 178 ______________________________________________________________________________ (1) See Notes 14 and 15 for additional discussion regarding our equity method investee. |
Equity offerings
Equity offerings | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Equity Offerings | Equity offerings On May 16, 2016, the Company completed the sale of 10,925,000 shares of Laredo's common stock (the "May 2016 Equity Offering") for net proceeds of $119.3 million , after underwriting discounts, commissions and offering expenses. See Note 19.e for discussion regarding the completion of an equity offering subsequent to June 30, 2016. On March 5, 2015, the Company completed the sale of 69,000,000 shares of Laredo's common stock (the "March 2015 Equity Offering") for 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. |
Divestiture
Divestiture | 6 Months Ended |
Jun. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestiture | Divestiture a. 2015 Divestiture of non-strategic assets On September 15, 2015, the Company completed the sale of non-strategic and primarily non-operated properties and associated production totaling 6,060 net acres and 123 producing properties in the Midland Basin to a third-party buyer for a purchase price of $65.5 million . After transaction costs reflecting an economic effective date of July 1, 2015, the net proceeds were $64.8 million , net of working capital adjustments and post-closing adjustments. The purchase price, excluding post-closing adjustments, was allocated to oil and natural gas properties pursuant to the rules governing full cost accounting. Effective at closing, the operations and cash flows of these properties were eliminated from the ongoing operations of the Company, and the Company has no continuing involvement in the properties. This divestiture does not represent a strategic shift and will not have a major effect on the Company's operations or financial results. The following table presents revenues and expenses of the oil and natural gas properties sold included in the accompanying unaudited consolidated statements of operations for the periods presented: (in thousands) Three months ended June 30, 2015 Six months ended June 30, 2015 Oil, NGL and natural gas sales $ 1,970 $ 4,048 Expenses (1) 2,098 4,710 _____________________________________________________________________________ (1) Expenses include (i) lease operating expense, (ii) production and ad valorem tax expense, (iii) accretion expense and (iv) depletion expense. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2016 | |
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"). The March 2023 Notes will mature on March 15, 2023 and bear an interest rate of 6 1/4% per annum, 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 applicable indenture, designation of a subsidiary guarantor as a non-guarantor restricted subsidiary or as an unrestricted subsidiary in accordance with the applicable indenture, release from guarantee under the Senior Secured Credit Facility, or liquidation or dissolution (collectively, the "Releases"). b. 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. c. 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. d. 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. On April 6, 2015 (the "Redemption Date"), utilizing a portion of the proceeds from the March 2015 Equity Offering and the March 2023 Notes offering, the entire $550.0 million outstanding principal amount of the 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 the Redemption Date. The Company recognized a loss on extinguishment of $31.5 million related to the difference between the redemption price and the net carrying amount of the extinguished January 2019 Notes. e. Senior Secured Credit Facility As of June 30, 2016 , 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 and an aggregate elected commitment of $815.0 million with $110.3 million outstanding and was subject to an interest rate of 2.00% . It contains both financial and non-financial covenants, all of which the Company was in compliance with as of June 30, 2016 . 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 June 30, 2016 or 2015 . See Note 19.a for discussion of additional borrowings and payments on the Senior Secured Credit Facility subsequent to June 30, 2016 . f. 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: June 30, 2016 December 31, 2015 (in thousands) Long-term Fair value Long-term Fair value January 2022 Notes $ 450,000 $ 426,564 $ 450,000 $ 388,301 May 2022 Notes 500,000 501,250 500,000 460,000 March 2023 Notes 350,000 349,965 350,000 301,000 Senior Secured Credit Facility 110,318 110,261 135,000 134,993 Total value of debt $ 1,410,318 $ 1,388,040 $ 1,435,000 $ 1,284,294 The fair values of the debt outstanding on the January 2022 Notes, May 2022 Notes and the March 2023 Notes were determined using the June 30, 2016 and December 31, 2015 quoted market price (Level 1) for each respective instrument. The fair values of the outstanding debt on the Senior Secured Credit Facility as of June 30, 2016 and December 31, 2015 were estimated utilizing pricing models for similar instruments (Level 2). See Note 9 for information about fair value hierarchy levels. g. Debt issuance costs The following table summarizes the net presentation of the Company's long-term debt and debt issuance cost on the unaudited consolidated balance sheets for the periods presented: June 30, 2016 December 31, 2015 (in thousands) Long-term debt Debt issuance costs, net Long-term debt, net Long-term debt Debt issuance costs, net Long-term debt, net January 2022 Notes $ 450,000 $ (5,451 ) $ 444,549 $ 450,000 $ (5,939 ) $ 444,061 May 2022 Notes 500,000 (6,624 ) 493,376 500,000 (7,066 ) 492,934 March 2023 Notes 350,000 (5,366 ) 344,634 350,000 (5,769 ) 344,231 Senior Secured Credit Facility (1) 110,318 — 110,318 135,000 — 135,000 Total $ 1,410,318 $ (17,441 ) $ 1,392,877 $ 1,435,000 $ (18,774 ) $ 1,416,226 ______________________________________________________________________________ (1) Debt issuance costs related to our Senior Secured Credit Facility are recorded in "Other assets, net" on the unaudited consolidated balance sheets. |
Employee compensation
Employee compensation | 6 Months Ended |
Jun. 30, 2016 | |
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. In the second quarter of 2016, shareholders approved an increase in the maximum number of shares of the Company's common stock issuable under the LTIP from 10,000,000 shares to 24,350,000 shares (the "Amendment"). 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 in prior periods, its performance unit awards were 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 for reasons other than death or disability, 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. Historically, restricted stock awards granted to officers and employees vest in a variety of vesting schedules including (i) 33% , 33% and 34% per year beginning on the first anniversary date of the grant, (ii) 50% in year two and 50% in year three, (iii) fully on the first anniversary of the grant date and (iv) 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 six months ended June 30, 2016 : (in thousands, except for weighted-average grant date fair values) Restricted stock awards Weighted-average Outstanding as of December 31, 2015 2,539 $ 15.26 Granted 2,968 $ 12.27 Forfeited (221 ) $ 15.16 Vested (1) (1,124 ) $ 16.06 Outstanding as of June 30, 2016 4,162 $ 12.92 ______________________________________________________________________________ (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 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 June 30, 2016 , unrecognized stock-based compensation related to the restricted stock awards expected to vest was $44.3 million . Such cost is expected to be recognized over a weighted-average period of 2.26 years . b. 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 six months ended June 30, 2016 : (in thousands, except for weighted-average price and contractual term) Restricted stock option awards Weighted-average Weighted-average Outstanding as of December 31, 2015 1,778 $ 17.86 7.91 Granted 1,016 $ 4.18 Exercised (6 ) $ 11.93 Expired or canceled (35 ) $ 22.40 Forfeited (229 ) $ 13.62 Outstanding as of June 30, 2016 2,524 $ 12.69 8.06 Vested and exercisable at end of period (1) 916 $ 19.49 6.41 Expected to vest at end of period (2) 1,600 $ 8.75 9.02 _____________________________________________________________________________ (1) The vested and exercisable options as of June 30, 2016 had no aggregate intrinsic value. (2) The restricted stock options expected to vest as of June 30, 2016 had $6.1 million aggregate intrinsic value. The Company utilizes the Black-Scholes option pricing model to determine the fair value of restricted stock option awards and recognizes 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 June 30, 2016 , unrecognized stock-based compensation related to restricted stock option awards expected to vest was $13.5 million . Such cost is expected to be recognized over a weighted-average period of 2.55 years . The assumptions used to estimate the fair value of the 22,324 restricted stock options granted on April 1, 2016 and the 994,022 restricted stock options granted on May 25, 2016 are as follows: April 1, 2016 May 25, 2016 Risk-free interest rate (1) 1.44 % 1.58 % Expected option life (2) 6.25 years 6.25 years Expected volatility (3) 61.34 % 61.94 % Fair value per stock option $ 4.44 $ 9.75 (1) United States Treasury yields as of the grant date were utilized for the risk-free interest rate assumption, correlating 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 historical 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 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. c. Performance share awards The performance share awards granted to management in the second quarter of 2016 (the "2016 Performance Share Awards"), 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 to determine the grant date fair value of these awards. The Company has determined these 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 1,742,469 outstanding 2016 Performance Share Awards have a performance period of January 1, 2016 to December 31, 2018, and any shares earned under such awards are expected to be issued in the first quarter of 2019 if the performance criteria are met. The 475,518 outstanding 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. The 210,126 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. The following table reflects the performance share award activity for the six months ended June 30, 2016 : (in thousands, except for weighted-average grant date fair values) Performance share awards Weighted-average (per award) Outstanding as of December 31, 2015 874 $ 20.06 Granted 1,801 $ 17.71 Forfeited (247 ) $ 19.69 Vested — $ — Outstanding as of June 30, 2016 2,428 $ 18.36 As of June 30, 2016 , unrecognized stock-based compensation related to the performance share awards was $35.3 million . Such cost is expected to be recognized over a weighted-average period of 2.47 years . The assumptions used to estimate the fair value of the 32,495 performance share awards granted on April 1, 2016 and the 1,768,297 performance share awards granted on May 25, 2016 are as follows: April 1, 2016 May 25, 2016 Risk-free rate (1) 0.87 % 1.02 % Dividend yield — % — % Expected volatility (2) 71.54 % 74.73 % Laredo stock closing price on grant date $ 7.71 $ 12.36 Fair value per performance share $ 9.83 $ 17.86 ______________________________________________________________________________ (1) The risk-free rate was derived using a term-matched zero-coupon yield derived from the Treasury Constant Maturities yield curve on the grant date. (2) The Company utilized its own historical volatility over a lookback period equal to the length of the remaining performance period from the grant date in order to develop the expected volatility. d. Stock-based compensation award expense The following has been recorded to stock-based compensation expense for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Restricted stock award compensation $ 4,692 $ 4,520 $ 8,460 $ 7,458 Restricted stock option award compensation 777 1,279 1,401 1,949 Restricted performance share award compensation 1,593 1,378 1,821 2,273 Total stock-based compensation, gross 7,062 7,177 11,682 11,680 Less amounts capitalized in oil and natural gas properties (989 ) (909 ) (1,771 ) (624 ) Total stock-based compensation, net of amounts capitalized $ 6,073 $ 6,268 $ 9,911 $ 11,056 e. 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") were subject to a combination of market and service vesting criteria. These awards were accounted for as liability awards as they were settled in cash at the end of the requisite service period based on the achievement of certain performance criteria. The 44,481 settled 2013 Performance Unit Awards had a performance period of January 1, 2013 to December 31, 2015 and, as their performance criteria were satisfied, they were paid at $143.75 per unit during the first quarter of 2016. The 27,381 settled 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 $100.00 per unit during the first quarter of 2015. For the three and six months ended June 30, 2015, compensation expense for the 2013 Performance Unit Awards is included in "General and administrative" in the Company's unaudited consolidated statements of operations, and as of December 31, 2015, the corresponding liability is included in "Other current liabilities" on the unaudited consolidated balance sheets. Due to the quarterly re-measurement of the fair value of the 2013 Performance Unit Awards as of June 30, 2015 , compensation expense for the three and six months ended June 30, 2015 was $0.7 million and $1.7 million , respectively. |
Income taxes
Income taxes | 6 Months Ended |
Jun. 30, 2016 | |
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. 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 as of June 30, 2016 or December 31, 2015 . The Company is subject to federal and state income taxes and the Texas franchise tax. Income tax benefit for the periods presented consisted of the following: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Current taxes $ — $ — $ — $ — Deferred taxes — 221,846 — 218,203 Income tax benefit $ — $ 221,846 $ — $ 218,203 Income tax benefit 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 June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Income tax benefit computed by applying the statutory rate $ 25,001 $ 216,608 $ 88,131 $ 215,498 State income tax and change in valuation allowance (541 ) 5,776 187 5,867 Non-deductible stock-based compensation — (15 ) — (106 ) Stock-based compensation tax deficiency (190 ) (381 ) (4,012 ) (2,838 ) Increase in deferred tax valuation allowance (24,323 ) (11 ) (84,218 ) (16 ) Other items 53 (131 ) (88 ) (202 ) Income tax benefit $ — $ 221,846 $ — $ 218,203 For the three and six months ended June 30, 2016, the effective tax rate was not meaningful due to the valuation allowance recorded. For the three and six months ended June 30, 2015, the effective tax rate was 36% and 35% , respectively. The Company's effective tax rate is affected by changes in valuation allowances, recurring permanent differences and by discrete items that may occur in any given year, but are not consistent from year to year. A valuation allowance is established to reduce deferred tax assets if it is determined that 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. During the year ended December 31, 2015 and the six months ended June 30, 2016, in evaluating whether it was more likely than not that the Company's net deferred tax assets were realizable through future net income, management considered all available positive and negative evidence, including (i) its earnings history, (ii) its ability to recover net operating loss carry-forwards, (iii) the existence of significant proved oil, NGL and natural gas reserves, (iv) its ability to use tax planning strategies, (v) its current price protection utilizing oil and natural gas hedges, (vi) its future revenue and operating cost projections and (vii) the current market prices for oil, NGL and natural gas. Based on all the evidence available, during the year ended December 31, 2015, management determined it was more likely than not that the net deferred tax assets were not realizable, and therefore recorded a valuation allowance of $ 676.0 million . During the six months ended June 30, 2016 , an additional valuation allowance of $ 83.7 million was recorded. The impact of significant discrete items is separately recognized in the quarter in which the discrete items 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 grant date. 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 at 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 and six months ended June 30, 2016 and 2015 , certain shares related to restricted stock awards vested at times when the Company's stock price was lower than the fair value of those shares at the time of the grant. As a result, the income tax deduction related to such shares is less than the expense previously recognized for book purposes. During the three and six months ended June 30, 2016 , certain stock options were exercised. No stock options were exercised during the three and six months ended June 30, 2015. The income tax deduction related to the intrinsic value of the options was less than the expense previously recognized for book purposes. In accordance with GAAP, such shortfalls reduce additional paid-in capital to the extent windfall tax benefits have been previously recognized. However, the Company has not previously recognized any windfall tax benefits. Therefore, 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 June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Vesting of restricted stock $ (182 ) $ (388 ) $ (4,057 ) $ (2,889 ) Exercise of restricted stock options (10 ) — (10 ) — Tax expense due to shortfalls $ (192 ) $ (388 ) $ (4,067 ) $ (2,889 ) Significant components of the Company's net deferred tax asset for the periods presented are as follows: (in thousands) June 30, 2016 December 31, 2015 Oil and natural gas properties, midstream service assets and other fixed assets $ 282,612 $ 306,997 Net operating loss carry-forward 528,625 479,022 Derivatives (41,577 ) (98,675 ) Stock-based compensation 9,340 11,597 Equity method investee (25,612 ) (31,711 ) Accrued bonus 2,544 4,763 Capitalized interest 2,173 2,525 Other 2,901 2,820 Net deferred tax asset before valuation allowance 761,006 677,338 Valuation allowance (761,006 ) (677,338 ) Net deferred tax asset $ — $ — The Company had federal net operating loss carry-forwards totaling $1.5 billion and state of Oklahoma net operating loss carry-forwards totaling $41.0 million as of June 30, 2016 . These carry-forwards begin expiring in 2026. Additionally, these 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 June 30, 2016 , 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's income tax returns for the years 2012 through 2015 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 | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives a. Derivatives The Company engages in derivative transactions such as puts, swaps, collars and, in prior periods, basis swaps to hedge price risks due to unfavorable changes in oil and natural gas prices related to its production. As of June 30, 2016 , the Company had 25 open derivative contracts with financial institutions that extend from July 2016 to December 2018. None of these contracts were designated as hedges for accounting purposes. The contracts are recorded at fair value on the unaudited consolidated balance sheets and gains and losses are recognized in current period earnings. Gains and losses on derivatives are reported on the unaudited consolidated statements of operations on the "Gain (loss) on derivatives, net" line item. 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. 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 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. In the prior year, the oil basis swap transactions had an established fixed basis differential. The Company's oil basis swaps' differential was between the West Texas Intermediate-Argus Americas Crude (Midland) ("WTI Midland") index crude oil price and the West Texas Intermediate NYMEX ("WTI NYMEX") index crude oil price. When the WTI NYMEX price less the fixed basis differential was greater than the actual WTI Midland price, the difference multiplied by the hedged contract volume was paid to the Company by the counterparty. When the WTI NYMEX price less the fixed basis differential was less than the actual WTI Midland price, the difference multiplied by the hedged contract volume was paid by the Company to the counterparty. During the six months ended June 30, 2016 , the Company successfully completed a hedge restructuring by early terminating the floors of certain derivative contract collars that resulted in a termination amount of $80 million , which was settled in full by applying the proceeds to prepay the premiums on two new derivatives entered into during the restructuring. During the six months ended June 30, 2016 , the following derivatives were terminated: Aggregate volumes Floor price Contract period Oil (volumes in Bbl): Put portion of the associated collars 2,263,000 $ 80.00 January 2017 - December 2017 During the six months ended June 30, 2016 , the following derivatives were entered into: Aggregate volumes Floor price Ceiling price Contract period Oil (volumes in Bbl): Put (1) 2,263,000 $ 60.00 $ — January 2017 - December 2017 Put (2) 2,098,750 $ 60.00 $ — January 2017 - December 2018 Put (3) 600,000 $ 40.00 $ — May 2016 - December 2016 Swap 1,095,000 $ 52.12 $ — January 2018 - December 2018 Natural gas (volumes in MMBtu): (4) Put 8,040,000 $ 2.50 $ — January 2017 - December 2017 Put 8,220,000 $ 2.50 $ — January 2018 - December 2018 Collar 5,256,000 $ 2.50 $ 3.05 January 2017 - December 2017 Collar 4,635,500 $ 2.50 $ 3.60 January 2018 - December 2018 _____________________________________________________________________________ (1) As part of the Company's hedge restructuring, this put replaced the early terminated put portion of the restructured derivative contract collars. A premium of $40.0 million was paid at contract inception. (2) As part of the Company's hedge restructuring, a premium of $40.0 million was paid at contract inception. (3) There are $1.2 million in deferred premiums associated with this contract. (4) There are $5.1 million in deferred premiums associated with these contracts. The following represents cash settlements received for derivatives, net for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Cash settlements received for matured derivatives, net $ 47,382 $ 46,596 $ 113,319 $ 109,737 Cash settlements received for early terminations of derivatives, net (1) — — 80,000 — Cash settlements received for derivatives, net $ 47,382 $ 46,596 $ 193,319 $ 109,737 _____________________________________________________________________________ (1) The settlements amount for the six months ended June 30, 2016 includes $4.0 million in deferred premiums which were settled net with the early terminated contracts from which they derive. The following table summarizes open positions as of June 30, 2016 , and represents, as of such date, derivatives in place through December 2018 on annual production volumes: Remaining year 2016 Year 2017 Year Oil positions: (1) Puts: Hedged volume (Bbl) 1,098,000 1,049,375 1,049,375 Weighted-average price ($/Bbl) $ 42.95 $ 60.00 $ 60.00 Swaps: Hedged volume (Bbl) 791,200 — 1,095,000 Weighted-average price ($/Bbl) $ 84.82 $ — $ 52.12 Collars: Hedged volume (Bbl) 1,833,500 2,628,000 — Weighted-average floor price ($/Bbl) $ 73.98 $ 60.00 $ — Weighted-average ceiling price ($/Bbl) $ 89.62 $ 97.22 $ — Totals: Total volume hedged with floor price (Bbl) 3,722,700 3,677,375 2,144,375 Weighted-average floor price ($/Bbl) $ 67.13 $ 60.00 $ 55.98 Total volume hedged with ceiling price (Bbl) 2,624,700 2,628,000 1,095,000 Weighted-average ceiling price ($/Bbl) $ 88.18 $ 97.22 $ 52.12 Natural gas positions: (2) Puts: Hedged volume (MMBtu) — 8,040,000 8,220,000 Weighted-average price ($/MMBtu) $ — $ 2.50 $ 2.50 Collars: Hedged volume (MMBtu) 9,384,000 10,731,000 4,635,500 Weighted-average floor price ($/MMBtu) $ 3.00 $ 2.76 $ 2.50 Weighted-average ceiling price ($/MMBtu) $ 5.60 $ 3.53 $ 3.60 Totals: Total volume hedged with floor price (MMBtu) 9,384,000 18,771,000 12,855,500 Weighted-average floor price ($/MMBtu) $ 3.00 $ 2.65 $ 2.50 Total volume hedged with ceiling price (MMBtu) 9,384,000 10,731,000 4,635,500 Weighted-average ceiling price ($/MMBtu) $ 5.60 $ 3.53 $ 3.60 _______________________________________________________________________________ (1) Oil derivatives are settled based on the average of the daily settlement prices for the First Nearby Month of the WTI NYMEX Light Sweet Crude Oil Futures Contract for each NYMEX Trading Day during each month. (2) 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 derivatives are subject to counterparty netting under agreements governing such derivatives. The Company's oil and natural gas 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 | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Fair value measurements The Company accounts for its oil and natural gas 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 or six months ended June 30, 2016 or 2015 . 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 as of the periods presented: (in thousands) Level 1 Level 2 Level 3 Total gross fair value Amounts offset Net fair value presented on the As of June 30, 2016: Assets Current: Oil derivatives $ — $ 93,057 $ — $ 93,057 $ (515 ) $ 92,542 Natural gas derivatives — 3,458 — 3,458 (1,165 ) 2,293 Oil deferred premiums — — — — (5,467 ) (5,467 ) Natural gas deferred premiums — — — — (403 ) (403 ) Noncurrent: Oil derivatives $ — $ 33,181 $ — $ 33,181 $ — $ 33,181 Natural gas derivatives — 2,724 — 2,724 (2,724 ) — Oil deferred premiums — — — — (501 ) (501 ) Natural gas deferred premiums — — — — — — Liabilities Current: Oil derivatives $ — $ — $ — $ — $ 515 $ 515 Natural gas derivatives — (739 ) — (739 ) 1,165 426 Oil deferred premiums — — (6,784 ) (6,784 ) 5,467 (1,317 ) Natural gas deferred premiums — — (1,507 ) (1,507 ) 403 (1,104 ) Noncurrent: Oil derivatives $ — $ (1,820 ) $ — $ (1,820 ) $ — $ (1,820 ) Natural gas derivatives — (774 ) — (774 ) 2,724 1,950 Oil deferred premiums — — (501 ) (501 ) 501 — Natural gas deferred premiums — — (3,870 ) (3,870 ) — (3,870 ) Net derivative position $ — $ 129,087 $ (12,662 ) $ 116,425 $ — $ 116,425 (in thousands) Level 1 Level 2 Level 3 Total gross fair value Amounts offset Net fair value presented on the unaudited consolidated balance sheets As of December 31, 2015: Assets Current: Oil derivatives $ — $ 194,940 $ — $ 194,940 $ — $ 194,940 Natural gas derivatives — 13,166 — 13,166 — 13,166 Oil deferred premiums — — — — (9,301 ) (9,301 ) Natural gas deferred premiums — — — — — — Noncurrent: Oil derivatives $ — $ 80,302 $ — $ 80,302 $ — $ 80,302 Natural gas derivatives — 2,459 — 2,459 — 2,459 Oil deferred premiums — — — — (4,877 ) (4,877 ) Natural gas deferred premiums — — — — (441 ) (441 ) Liabilities Current: Oil derivatives $ — $ — $ — $ — $ — $ — Natural gas derivatives — — — — — — Oil deferred premiums — — (9,301 ) (9,301 ) 9,301 — Natural gas deferred premiums — — — — — — Noncurrent: Oil derivatives $ — $ — $ — $ — $ — $ — Natural gas derivatives — — — — — — Oil deferred premiums — — (4,877 ) (4,877 ) 4,877 — Natural gas deferred premiums — — (441 ) (441 ) 441 — Net derivative position $ — $ 290,867 $ (14,619 ) $ 276,248 $ — $ 276,248 These items are included as "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 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 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 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 for the calendar years presented: (in thousands) June 30, 2016 Remaining 2016 $ 5,407 2017 5,354 2018 2,100 Total $ 12,861 A summary of the changes in assets classified as Level 3 measurements for the periods presented are as follows: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Balance of Level 3 at beginning of period $ (13,054 ) $ (8,882 ) $ (14,619 ) $ (9,285 ) Change in net present value of deferred premiums for derivatives (61 ) (45 ) (133 ) (88 ) Total purchases and settlements: Purchases (1,960 ) (4,409 ) (6,072 ) (5,384 ) Settlements (1) 2,413 1,249 8,162 2,670 Balance of Level 3 at end of period $ (12,662 ) $ (12,087 ) $ (12,662 ) $ (12,087 ) _____________________________________________________________________________ (1) The amount for the six months ended June 30, 2016 includes $3.9 million which represents the present value of deferred premiums settled in the Company's restructuring upon their early termination. b. Fair value measurement on a nonrecurring basis The Company accounts for the impairment of long-lived assets and inventory, 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 and inventory are classified as Level 3, based on the use of internally developed cash flow models. See Note 2.g for discussion regarding the Company's impairment of (i) materials and supplies for the three months ended June 30, 2016 and the three and six months ended June 30, 2015 and (ii) line-fill for the six months ended June 30, 2015 . The accounting policies for impairment of oil and natural gas properties are discussed in Note 2.f. 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. See Note 2.f for discussion regarding the prices used in the calculation of discounted cash flows and the Company's first-quarter 2016 and second-quarter 2015 full cost ceiling impairments. |
Net loss per share
Net loss per share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Net 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 and six months ended June 30, 2016 and 2015, 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 June 30, Six months ended June 30, (in thousands, except for per share data) 2016 2015 2016 2015 Net loss (numerator): Net loss—basic and diluted $ (71,432 ) $ (397,034 ) $ (251,803 ) $ (397,506 ) Weighted-average common shares outstanding (denominator): Basic 217,564 211,078 214,562 186,886 Diluted 217,564 211,078 214,562 186,886 Net loss per share: Basic $ (0.33 ) $ (1.88 ) $ (1.17 ) $ (2.13 ) Diluted $ (0.33 ) $ (1.88 ) $ (1.17 ) $ (2.13 ) |
Credit risk
Credit risk | 6 Months Ended |
Jun. 30, 2016 | |
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. The Company's sales of purchased oil are made to one customer. 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 2.e, 8 and 9 for additional information regarding the Company's derivatives. |
Commitments and contingencies
Commitments and contingencies | 6 Months Ended |
Jun. 30, 2016 | |
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 contract The Company has committed to several drilling contracts with a third party to facilitate the Company's drilling plans. One of these contracts is for a term of multiple months and contains an early termination clause that requires the Company to potentially pay penalties to the third party should the Company cease drilling efforts. This penalty would negatively impact the Company's financial statements upon early contract termination. The future commitment of $3.0 million as of June 30, 2016 is not recorded in the accompanying unaudited consolidated balance sheets. Management does not currently anticipate the early termination of this contract in 2016. c. Firm sale and transportation commitments The Company has committed to deliver for sale or transportation fixed volumes of product under certain contractual arrangements that specify the delivery of a fixed and determinable quantity. If not fulfilled, the Company is subject to minimal volume penalties. These commitments are normal and customary for the Company's business. Future commitments of $400.2 million as of June 30, 2016 are not recorded in the accompanying unaudited consolidated balance sheets. The Company's production has been equivalent or greater than its delivery commitments during the most recent year, and management expects such production will continue to exceed the Company's future commitments. However, in certain instances, the Company has used spot market purchases to meet its commitments in certain locations or due to favorable pricing. Management anticipates continuing this practice in the future. Also, if production is not sufficient to satisfy the Company's delivery commitments, the Company can and may use spot market purchases to fulfill the commitments. d. 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. e. Other commitments See Notes 2.i, 15.a and 19.b for the amount of and discussion regarding the commitments to the Company's non-consolidated variable interest entity ("VIE"). |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | 2015 Restructuring Following the fourth-quarter 2014 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 from 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 RIF was communicated to employees on January 20, 2015 and was generally effective immediately. The Company's compensation committee approved the RIF and the related severance package. The Company incurred $6.0 million in expenses during the six months ended June 30, 2015 related to the RIF. There were no comparative amounts recorded in the six months ended June 30, 2016 . |
Variable interest entity
Variable interest entity | 6 Months Ended |
Jun. 30, 2016 | |
Equity Method Investments and Joint Ventures [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. LMS contributed $16.0 million and $42.7 million during the three and six months ended June 30, 2016 , respectively, and $14.5 million during the six months ended June 30, 2015, to Medallion Gathering & Processing, LLC, a Texas limited liability company formed on October 12, 2012, and its wholly-owned subsidiaries (together "Medallion"). See Note 19.b for discussion regarding a contribution made to Medallion subsequent to June 30, 2016. LMS holds 49% of Medallion's ownership units. Medallion was established for the purpose of developing midstream solutions and providing midstream infrastructure to bring 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 reflected in the unaudited consolidated statements of operations as "Income from equity method investee" and the carrying amount reflected in the unaudited consolidated balance sheets as "Investment in equity method investee." During the six months ended June 30, 2016 and 2015, Medallion continued expansion activities on existing portions of its pipeline infrastructure in order to gather and transport additional third-party oil production. During the three months ended June 30, 2015, Medallion began recognizing revenue due to its main pipeline becoming fully operational. See Note 15.a for discussion of items included in the Company's unaudited consolidated financial statements related to Medallion. During the three months ended June 30, 2015, the Company negotiated a buyout of a minimum volume commitment to Medallion, which was related to natural gas gathering infrastructure Medallion constructed on acreage that the Company does not plan to develop. The portion of the buyout that was related to the Company's minimum volume commitment for future periods was $3.0 million and is included in the unaudited consolidated statements of operations in the line item "Minimum volume commitments" for the period in which the buyout was settled. |
Related Parties
Related Parties | 6 Months Ended |
Jun. 30, 2016 | |
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 June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Midstream service revenues $ — $ 390 $ — $ 487 Minimum volume commitments — 3,579 — 5,235 Interest and other income — — — 108 The following table summarizes items included in the unaudited consolidated balance sheets related to Medallion as of the dates presented: (in thousands) June 30, 2016 December 31, 2015 Accounts receivable, net $ — $ 1,163 Other assets, net (1) 1,025 1,025 Other current liabilities (2) 102 27,583 ______________________________________________________________________________ (1) Amounts included in "Other assets, net" above represent LMS owned line-fill in Medallion's pipeline. (2) Amounts included in "Other current liabilities" above represent LMS' accrued line-fill purchase in Medallion's pipeline as of June 30, 2016 and capital contribution payable to Medallion as of December 31, 2015. b. Targa Resources Corp. The Company has a gathering and processing arrangement with affiliates of Targa Resources Corp. ("Targa"). One of Laredo's directors was on the board of directors of Targa until May 18, 2015. The following table summarizes the oil, NGL and natural gas sales and midstream service revenues received from Targa included in the unaudited consolidated statements of operations for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Oil, NGL and natural gas sales $ 18,112 $ 34,012 $ 35,917 $ 53,643 Midstream service revenues 102 — 237 — The following table summarizes the amounts included in accounts receivable, net from Targa in the unaudited consolidated balance sheets as of the dates presented: (in thousands) June 30, 2016 December 31, 2015 Accounts receivable, net $ 9,337 $ 6,097 c. Archrock Partners, L.P. The Company has a compression arrangement with affiliates of Archrock Partners, L.P., formerly Exterran Partners L.P. ("Archrock"). One of Laredo's directors is on the board of directors of Archrock GP LLC, an affiliate of Archrock. The following table summarizes the lease operating expenses related to Archrock included in the unaudited consolidated statements of operations for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Lease operating expenses $ 526 $ 391 $ 1,001 $ 776 The following table summarizes the capital expenditures related to Archrock included in the unaudited consolidated statements of cash flows for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Capital expenditures: Midstream service assets $ — $ 18 $ 20 $ 64 The following table summarizes the amounts included in accounts payable from Archrock in the unaudited consolidated balance sheets as of the dates presented: (in thousands) June 30, 2016 December 31, 2015 Accounts payable $ — $ 13 d. Helmerich & Payne, Inc. The Company has had drilling contracts with Helmerich & Payne, Inc. ("H&P"). Laredo's Chairman and Chief Executive Officer is on the board of directors of H&P. The following table summarizes the capitalized oil and natural gas properties related to H&P included in the unaudited consolidated statements of cash flows for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Capital expenditures: Oil and natural gas properties $ — $ 177 $ — $ 2,434 |
Segments
Segments | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segments | Segments The Company operates in two business segments: (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 Laredo's exploration and production segment and third parties with products and services that need to be delivered by midstream infrastructure, including oil and natural gas gathering services as well as rig fuel, natural gas lift and water delivery and takeaway in and around Laredo's primary production corridors. The following table presents selected financial information, for the periods presented, regarding the Company's operating segments on a stand-alone basis and the consolidation and elimination entries necessary to arrive at the information for the Company on a consolidated basis: (in thousands) Exploration and production Midstream and marketing Eliminations Consolidated company Three months ended June 30, 2016: Oil, NGL and natural gas sales $ 102,526 $ — $ — $ 102,526 Midstream service revenues — 11,138 (9,506 ) 1,632 Sales of purchased oil — 42,615 — 42,615 Total revenues 102,526 53,753 (9,506 ) 146,773 Lease operating expenses, including production tax 29,793 — (2,586 ) 27,207 Midstream service expenses — 6,572 (5,394 ) 1,178 Costs of purchased oil — 44,012 — 44,012 General and administrative (1) 18,818 1,684 — 20,502 Depletion, depreciation and amortization (2) 31,969 2,208 — 34,177 Impairment expense 963 — — 963 Other operating costs and expenses (3) 806 54 — 860 Operating income (loss) $ 20,177 $ (777 ) $ (1,526 ) $ 17,874 Other financial information: Income from equity method investee $ — $ 3,696 $ — $ 3,696 Interest expense (4) $ (22,050 ) $ (1,462 ) $ — $ (23,512 ) Capital expenditures $ (92,089 ) $ (1,488 ) $ — $ (93,577 ) Gross property and equipment (6) $ 5,484,416 $ 366,858 $ (4,604 ) $ 5,846,670 Three months ended June 30, 2015: Oil, NGL and natural gas sales $ 125,679 $ 221 $ (346 ) $ 125,554 Midstream service revenues — 4,362 (2,636 ) 1,726 Sales of purchased oil — 55,051 — 55,051 Total revenues 125,679 59,634 (2,982 ) 182,331 Lease operating expenses, including production tax 41,423 — (2,717 ) 38,706 Midstream service expenses, including minimum volume commitments 4,399 998 (221 ) 5,176 Costs of purchased oil — 54,417 — 54,417 General and administrative (1) 21,347 1,861 — 23,208 Depletion, depreciation and amortization (2) 69,987 2,125 — 72,112 Impairment expense 489,599 — — 489,599 Other operating costs and expenses (3) 548 45 — 593 Operating income (loss) $ (501,624 ) $ 188 $ (44 ) $ (501,480 ) Other financial information: Income from equity method investee $ — $ 2,914 $ — $ 2,914 Interest expense (4) $ (22,845 ) $ (1,125 ) $ — $ (23,970 ) Loss on early redemption of debt (5) $ (30,056 ) $ (1,481 ) $ — $ (31,537 ) Capital expenditures $ (133,259 ) $ (13,841 ) $ — $ (147,100 ) Gross property and equipment (6) $ 5,170,912 $ 257,073 $ (365 ) $ 5,427,620 _______________________________________________________________________________ (1) General and administrative expense was allocated based on the number of employees in the respective segment as of June 30, 2016 and 2015. Certain components of general and administrative expense, primarily payroll, deferred compensation and vehicle expenses, were not allocated but were actual expenses for each segment. Land and geology expenses were not allocated to the midstream and marketing segment. (2) Depletion, depreciation and amortization were actual expenses for each segment with the exception of the allocation of depreciation of other fixed assets, which is based on the number of employees in the respective segment as of June 30, 2016 and 2015. (3) Other operating costs and expenses consist of accretion of asset retirement obligations. These are actual costs and expenses and were not allocated. (4) Interest expense was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2016 and 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2016 and 2015. (5) Loss on early redemption of debt was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2015 . (6) Gross property and equipment for the midstream and marketing segment includes investment in equity method investee totaling $213.6 million and $103.2 million as of June 30, 2016 and 2015 , respectively. Other fixed assets were allocated based on the number of employees in the respective segment as of June 30, 2016 and 2015 . (in thousands) Exploration and production Midstream and marketing Eliminations Consolidated company Six months ended June 30, 2016: Oil, NGL and natural gas sales $ 175,668 $ — $ — $ 175,668 Midstream service revenues — 22,405 (18,972 ) 3,433 Sales of purchased oil — 74,229 — 74,229 Total revenues 175,668 96,634 (18,972 ) 253,330 Lease operating expenses, including production tax 59,157 — (4,997 ) 54,160 Midstream service expenses — 13,081 (11,294 ) 1,787 Costs of purchased oil — 76,958 — 76,958 General and administrative (1) 36,497 3,456 — 39,953 Depletion, depreciation and amortization (2) 71,261 4,394 — 75,655 Impairment expense 162,027 — — 162,027 Other operating costs and expenses (3) 1,598 106 — 1,704 Operating loss $ (154,872 ) $ (1,361 ) $ (2,681 ) $ (158,914 ) Other financial information: Income from equity method investee $ — $ 5,994 $ — $ 5,994 Interest expense (4) $ (44,353 ) $ (2,864 ) $ — $ (47,217 ) Capital expenditures $ (197,874 ) $ (3,425 ) $ — $ (201,299 ) Gross property and equipment (6) $ 5,484,416 $ 366,858 $ (4,604 ) $ 5,846,670 Six months ended June 30, 2015: Oil, NGL and natural gas sales $ 243,890 $ 333 $ (551 ) $ 243,672 Midstream service revenues — 8,045 (5,010 ) 3,035 Sales of purchased oil — 86,318 — 86,318 Total revenues 243,890 94,696 (5,561 ) 333,025 Lease operating expenses, including production tax 85,268 — (5,096 ) 80,172 Midstream service expenses, including minimum volume commitments 4,399 4,340 (333 ) 8,406 Costs of purchased oil — 85,617 — 85,617 General and administrative (1) 41,125 3,938 — 45,063 Depletion, depreciation and amortization (2) 140,244 3,810 — 144,054 Impairment expense 490,366 111 — 490,477 Other operating costs and expenses (3) 6,972 242 — 7,214 Operating loss $ (524,484 ) $ (3,362 ) $ (132 ) $ (527,978 ) Other financial information: Income from equity method investee $ — $ 2,481 $ — $ 2,481 Interest expense (4) $ (53,932 ) $ (2,452 ) $ — $ (56,384 ) Loss on early redemption of debt (5) $ (30,056 ) $ (1,481 ) $ — $ (31,537 ) Capital expenditures $ (380,872 ) $ (34,314 ) $ — $ (415,186 ) Gross property and equipment (6) $ 5,170,912 $ 257,073 $ (365 ) $ 5,427,620 _______________________________________________________________________________ (1) General and administrative expense was allocated based on the number of employees in the respective segment as of June 30, 2016 and 2015. Certain components of general and administrative expense, primarily payroll, deferred compensation and vehicle expenses, were not allocated but were actual expenses for each segment. Land and geology expenses were not allocated to the midstream and marketing segment. (2) Depletion, depreciation and amortization were actual expenses for each segment with the exception of the allocation of depreciation of other fixed assets, which is based on the number of employees in the respective segment as of June 30, 2016 and 2015. (3) Other operating costs and expenses consist of accretion of asset retirement obligations for the six months ended June 30, 2016 and 2015 and restructuring expense for the six months ended June 30, 2015 . These are actual costs and expenses and were not allocated. (4) Interest expense was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2016 and 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2016 and 2015. (5) Loss on early redemption of debt was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2015 . (6) Gross property and equipment for the midstream and marketing segment includes investment in equity method investee totaling $213.6 million and $103.2 million as of June 30, 2016 and 2015 , respectively. Other fixed assets were allocated based on the number of employees in the respective segment as of June 30, 2016 and 2015 . |
Subsidiary guarantors
Subsidiary guarantors | 6 Months Ended |
Jun. 30, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Subsidiary guarantors | Subsidiary guarantors The Guarantors have fully and unconditionally guaranteed the January 2022 Notes, the May 2022 Notes, the March 2023 Notes and the Senior Secured Credit Facility (and had guaranteed the January 2019 Notes until the Redemption Date), 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 June 30, 2016 and December 31, 2015 , unaudited condensed consolidating statements of operations for the three and six months ended June 30, 2016 and 2015 and unaudited condensed consolidating statements of cash flows for the six months ended June 30, 2016 and 2015 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. During the six months ended June 30, 2016 , certain assets were transferred from LMS to Laredo at historical cost. See Note 5.d for a discussion of the early redemption of the January 2019 Notes. Condensed consolidating balance sheet June 30, 2016 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Accounts receivable, net $ 73,429 $ 15,114 $ — $ 88,543 Other current assets 120,982 1,737 — 122,719 Total oil and natural gas properties, net 970,445 9,335 (4,604 ) 975,176 Total midstream service assets, net — 128,052 — 128,052 Total other fixed assets, net 40,701 250 — 40,951 Investment in subsidiaries and equity method investee 348,623 213,616 (348,623 ) 213,616 Total other long-term assets 37,526 3,568 — 41,094 Total assets $ 1,591,706 $ 371,672 $ (353,227 ) $ 1,610,151 Accounts payable $ 12,934 $ 1,566 $ — $ 14,500 Other current liabilities 120,756 18,556 — 139,312 Long-term debt, net 1,392,877 — — 1,392,877 Other long-term liabilities 51,373 2,927 — 54,300 Stockholders' equity 13,766 348,623 (353,227 ) 9,162 Total liabilities and stockholders' equity $ 1,591,706 $ 371,672 $ (353,227 ) $ 1,610,151 Condensed consolidating balance sheet December 31, 2015 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Accounts receivable, net $ 74,613 $ 13,086 $ — $ 87,699 Other current assets 244,477 56 — 244,533 Total oil and natural gas properties, net 1,017,565 9,350 (1,923 ) 1,024,992 Total midstream service assets, net — 131,725 — 131,725 Total other fixed assets, net 43,210 328 — 43,538 Investment in subsidiaries and equity method investee 301,891 192,524 (301,891 ) 192,524 Total other long-term assets 84,360 3,916 — 88,276 Total assets $ 1,766,116 $ 350,985 $ (303,814 ) $ 1,813,287 Accounts payable $ 12,203 $ 1,978 $ — $ 14,181 Other current liabilities 158,283 44,351 — 202,634 Long-term debt, net 1,416,226 — — 1,416,226 Other long-term liabilities 46,034 2,765 — 48,799 Stockholders' equity 133,370 301,891 (303,814 ) 131,447 Total liabilities and stockholders' equity $ 1,766,116 $ 350,985 $ (303,814 ) $ 1,813,287 Condensed consolidating statement of operations For the three months ended June 30, 2016 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Total revenues $ 102,511 $ 53,768 $ (9,506 ) $ 146,773 Total costs and expenses 84,137 52,742 (7,980 ) 128,899 Operating income 18,374 1,026 (1,526 ) 17,874 Interest expense and other, net (23,501 ) — — (23,501 ) Other non-operating income (expense) (64,779 ) 3,692 (4,718 ) (65,805 ) Income (loss) before income tax (69,906 ) 4,718 (6,244 ) (71,432 ) Income tax — — — — Net income (loss) $ (69,906 ) $ 4,718 $ (6,244 ) $ (71,432 ) Condensed consolidating statement of operations For the six months ended June 30, 2016 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Total revenues $ 175,633 $ 96,669 $ (18,972 ) $ 253,330 Total costs and expenses 334,201 94,334 (16,291 ) 412,244 Operating income (loss) (158,568 ) 2,335 (2,681 ) (158,914 ) Interest expense and other, net (47,107 ) — — (47,107 ) Other non-operating income (expense) (43,447 ) 5,983 (8,318 ) (45,782 ) Income (loss) before income tax (249,122 ) 8,318 (10,999 ) (251,803 ) Income tax — — — — Net income (loss) $ (249,122 ) $ 8,318 $ (10,999 ) $ (251,803 ) Condensed consolidating statement of operations For the three months ended June 30, 2015 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Total revenues $ 125,687 $ 59,626 $ (2,982 ) $ 182,331 Total costs and expenses 629,359 57,390 (2,938 ) 683,811 Operating income (loss) (503,672 ) 2,236 (44 ) (501,480 ) Interest expense and other, net (23,797 ) — — (23,797 ) Other non-operating income (expense) (91,367 ) 2,914 (5,150 ) (93,603 ) Income (loss) before income tax (618,836 ) 5,150 (5,194 ) (618,880 ) Deferred income tax benefit 221,846 — — 221,846 Net income (loss) $ (396,990 ) $ 5,150 $ (5,194 ) $ (397,034 ) Condensed consolidating statement of operations For the six months ended June 30, 2015 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Total revenues $ 243,833 $ 94,753 $ (5,561 ) $ 333,025 Total costs and expenses 772,667 93,765 (5,429 ) 861,003 Operating income (loss) (528,834 ) 988 (132 ) (527,978 ) Interest expense and other, net (56,088 ) — — (56,088 ) Other non-operating income (expense) (30,655 ) 2,481 (3,469 ) (31,643 ) Income (loss) before income tax (615,577 ) 3,469 (3,601 ) (615,709 ) Deferred income tax benefit 218,203 — — 218,203 Net income (loss) $ (397,374 ) $ 3,469 $ (3,601 ) $ (397,506 ) Condensed consolidating statement of cash flows For the six months ended June 30, 2016 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Net cash flows provided by operating activities $ 139,610 $ 7,339 $ (8,318 ) $ 138,631 Change in investment between affiliates (47,069 ) 38,751 8,318 — Capital expenditures and other (197,540 ) (46,090 ) — (243,630 ) Net cash flows provided by financing activities 93,154 — — 93,154 Net decrease in cash and cash equivalents (11,845 ) — — (11,845 ) Cash and cash equivalents at beginning of period 31,153 1 — 31,154 Cash and cash equivalents at end of period $ 19,308 $ 1 $ — $ 19,309 Condensed consolidating statement of cash flows For the six months ended June 30, 2015 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Net cash flows provided by (used in) operating activities $ 136,092 $ (18,318 ) $ (3,469 ) $ 114,305 Change in investment between affiliates (70,472 ) 67,003 3,469 — Capital expenditures and other (380,961 ) (48,685 ) — (429,646 ) Net cash flows provided by financing activities 343,613 — — 343,613 Net increase in cash and cash equivalents 28,272 — — 28,272 Cash and cash equivalents at beginning of period 29,320 1 — 29,321 Cash and cash equivalents at end of period $ 57,592 $ 1 $ — $ 57,593 |
Recent accounting pronouncement
Recent accounting pronouncements | 6 Months Ended |
Jun. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent accounting pronouncements | Recent accounting pronouncements In March, April and May 2016, the Financial Accounting Standards Board ("FASB"), issued new guidance in Topic 606, Revenue from Contracts with Customers, to address the following potential implementation issues of the new revenue standard: (a) to clarify the implementation guidance on principal versus agent considerations, (b) to clarify the identification of performance obligations and the licensing implementation guidance and (c) to address certain issues in the guidance on assessing collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. The effective date and transition requirements for the amendments in these updates are the same as the effective date and transition requirements for the guidance issued in May 2014 and August 2015 to Topic 606. These updates are effective for annual reporting periods beginning after December 15, 2017, 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. In March 2016, the FASB issued new guidance in Topic 323, Investments—Equity Method and Joint Ventures, to eliminate the requirement to retroactively adopt the equity method of accounting when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence. The amendments in this update are effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The amendments in this update should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Early application of the amendments in this update is permitted. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements upon adoption of this standard. In March 2016, the FASB issued new guidance in Topic 718, Compensation—Stock Compensation, which seeks to simplify the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The amendments in this update are effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the applicable amendments in the same period. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements upon adoption of this standard. In February 2016, the FASB issued new guidance in Topic 842, Leases. The core principle of the new guidance is that a lessee should recognize the assets and liabilities that arise from leases in the statement of financial position. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. When measuring assets and liabilities arising from a lease, a lessee (and a lessor) should include payments to be made in optional periods only if the lessee is reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease. Similarly, optional payments to purchase the underlying asset should be included in the measurement of lease assets and lease liabilities only if the lessee is reasonably certain to exercise that purchase option. Reasonably certain is a high threshold that is consistent with and intended to be applied in the same way as the reasonably assured threshold in the previous leases guidance. In addition, also consistent with the previous leases guidance, a lessee (and a lessor) should exclude most variable lease payments in measuring lease assets and lease liabilities, other than those that depend on an index or a rate or are in substance fixed payments. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP. There continues to be a differentiation between finance leases and operating leases. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application of the amendments in this update is permitted. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements upon adoption of this standard. In July 2015, the FASB issued new guidance in Topic 330, Inventory, which seeks to simplify the measurement of inventory. The amendments in this update apply to inventory that is measured using all methods excluding last-in, first-out and the retail inventory method. The main substantive provision of this guidance is for an entity to change the subsequent measurement of inventory, within the scope of this guidance, from LCM to the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The amendments in this update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within those fiscal years and should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements upon adoption of this standard. In April 2015, the FASB issued new guidance in Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software. The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer's accounting for service contracts. In addition, the guidance in this update supersedes paragraph 350-40-25-16. The amendments in this update are effective for annual periods beginning after December 15, 2015, including interim periods within those annual periods and should be applied prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. The Company elected to adopt this guidance in the first quarter of 2016 on a prospective basis, and the adoption did not have an effect on its 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, 2017, 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 | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events a. Senior Secured Credit Facility On July 12, 2016, the Company borrowed $94.7 million on the Senior Secured Credit Facility, after which the outstanding balance under the Senior Secured Credit Facility was $205.0 million . On July 19, 2016, the Company completed the July 2016 Equity Offering (as defined below) and applied the net proceeds to the outstanding balance under the Senior Secured Credit Facility, reducing the balance to $ 70.0 million . b. Medallion contribution Subsequent to June 30, 2016, the Company approved, and on July 29, 2016 contributed, $16.0 million to fund continued expansion activities on existing portions of Medallion's pipeline infrastructure in order to gather additional third-party production. See Note 14 for additional discussion regarding Medallion and see Note 15.a for discussion of items included in the Company's unaudited consolidated financial statements related to Medallion. c. New derivative contracts Subsequent to June 30, 2016 , the Company entered into the following new derivative contracts: Aggregate volumes Price Contract period Oil (volumes in Bbl): (1) Swap 1,003,750 $ 51.90 January 2017 - December 2017 Swap 1,003,750 $ 51.17 January 2017 - December 2017 NGL (volumes in Bbl): Swap (2) 444,000 $ 11.24 January 2017 - December 2017 Swap (3) 375,000 $ 22.26 January 2017 - December 2017 _____________________________________________________________ (1) The associated derivatives will be settled based on the WTI NYMEX index oil price. (2) The associated derivative will be settled based on the Mont Belvieu Purity Ethane-OPIS price. (3) The associated derivative will be settled based on the Mont Belvieu Propane (TET)-OPIS price. d. Acquisition of proved and unproved oil and natural gas properties Subsequent to June 30, 2016 , the Company entered into an agreement to acquire approximately 9,200 net acres of additional leasehold interests in western Glasscock and Reagan counties within the Company's core development area (which includes production of approximately 300 net BOE/D from existing vertical wells) for an aggregate purchase price of $125.0 million . On July 13 and July 18, 2016, the Company closed portions of this acquisition for approximately $92.7 million and $1.65 million , respectively. The closings on the remaining interests, which are subject to certain preferential purchase rights and consents, are expected to occur as such rights and consents are satisfied or obtained during the third and fourth quarters of 2016. e. July equity offering On July 19, 2016, the Company completed the sale of 13,000,000 shares of Laredo's common stock (the "July 2016 Equity Offering") for net proceeds of approximately $136.3 million , after underwriting discounts, commissions and offering expenses. The Company used the net proceeds from the July 2016 Equity Offering to repay borrowings under its Senior Secured Credit Facility as discussed above in Note 19.a. The Company granted the underwriters a 30-day option to purchase up to an additional 1,950,000 shares of Laredo's common stock on the same terms. On August 4, 2016, the underwriters provided notice of the full exercise of the option. The sale of the additional 1,950,000 shares of Laredo’s common stock pursuant to the option is expected to close on August 9, 2016 and will result in net proceeds to the Company of approximately $20.5 million , after underwriting discounts, commissions and offering expenses. |
Supplementary information
Supplementary information | 6 Months Ended |
Jun. 30, 2016 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
Supplementary information | Supplementary information Costs incurred in oil, NGL and natural gas property acquisition, exploration and development activities Costs incurred in the acquisition, exploration and development of oil, NGL and natural gas assets are presented below: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Property acquisition costs: — Evaluated $ — $ — $ — $ — Unevaluated — — — — Exploration 19,769 3,841 27,032 8,354 Development costs (1) 70,806 110,518 152,692 317,190 Total costs incurred $ 90,575 $ 114,359 $ 179,724 $ 325,544 ____________________________________________________________________________ (1) The costs incurred for oil, NGL and natural gas development activities include $0.1 million and $0.5 million in asset retirement obligations for the three months ended June 30, 2016 and 2015 , respectively, and $0.2 million and $1.0 million for the six months ended June 30, 2016 and 2015 , respectively. |
Basis of presentation and sig27
Basis of presentation and significant accounting policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
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 accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). All material intercompany transactions and account balances have been eliminated in the consolidation of accounts. The Company 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 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, 2015 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 June 30, 2016 , results of operations for the three and six months ended June 30, 2016 and 2015 and cash flows for the six months ended June 30, 2016 and 2015 . 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 2015 Annual Report. |
Use of estimates in the preparation of interim unaudited 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 derivatives, deferred premiums and performance unit awards. As fair value is a market-based measurement, it is determined based on the assumptions that would be used by market participants. 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 2016 presentation. These reclassifications had no impact to previously reported net loss, stockholders' equity or cash flows. |
Accounts receivable | Accounts receivable The Company sells produced oil, NGL and natural gas and purchased oil to various customers and participates with other parties in the development and operation of oil and natural gas properties. 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. Joint interest operations 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 some or all of 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, NGL 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 in the form of puts, swaps, collars and, in prior periods, basis swaps. Derivatives are recorded at fair value and are presented on a net basis 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 Note 9 for discussion regarding the fair value of the Company's derivatives. 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 Notes 8 and 9 for discussion regarding the Company's derivatives. |
Full cost method of accounting | 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, NGL and natural gas are capitalized and depleted 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 depleted 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, NGL 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 revenues from proved oil and natural gas properties discounted at 10% . |
Debt issuance costs | Debt issuance costs Debt issuance fees, which are recorded 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 service 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, (iii) estimated removal and/or remediation costs for midstream service assets, (iv) estimated remaining life of midstream service 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 assets and perform other remediation of the sites where such pipeline 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 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, accounts payable, undistributed revenue and royalties, accrued capital expenditures and other accrued assets and liabilities approximate their fair values. Fair value measurements The Company accounts for its oil and natural gas 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 and inventory, 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 and inventory are classified as Level 3, based on the use of internally developed cash flow models. |
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. |
Compensation awards | Compensation awards Stock-based compensation expense, net of amounts capitalized, is included in "General and administrative" in the unaudited consolidated statements of operations over the awards' vesting periods and is based on the awards' 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, in prior periods, the 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. 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 in prior periods, its performance unit awards were 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. |
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. |
Long-lived assets | 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 and line-fill | Materials and supplies inventory used in developing oil and natural gas properties and midstream service assets are carried at the lower of cost or market ("LCM") with cost determined using the weighted-average cost method and are included in "Other current assets" and "Other assets, net" on the unaudited consolidated balance sheets. The market price for materials and supplies is determined utilizing a replacement cost approach (Level 2). Beginning at March 31, 2016, frac pit water inventory used in developing oil and natural gas properties is carried at LCM with cost determined using the weighted-average cost method and is included in "Other current assets" on the unaudited consolidated balance sheets. The market price for frac pit water inventory is determined utilizing a replacement cost approach. The minimum volume of product in a pipeline system that 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. 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). |
Income taxes | The impact of significant discrete items is separately recognized in the quarter in which the discrete items 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 grant date. 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 at 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. 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. 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. The Company's sales of purchased oil are made to one customer. 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. |
Net 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. |
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 sig28
Basis of presentation and significant accounting policies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of components of accounts receivable | Accounts receivable consisted of the following components for the periods presented: (in thousands) June 30, 2016 December 31, 2015 Oil, NGL and natural gas sales $ 42,629 $ 25,582 Joint operations, net (1) 18,425 21,375 Sales of purchased oil and other products 15,000 11,775 Matured derivatives 12,223 27,469 Other 266 1,498 Total $ 88,543 $ 87,699 ______________________________________________________________________________ (1) Accounts receivable for joint operations are presented net of an allowance for doubtful accounts of $0.2 million as of both June 30, 2016 and December 31, 2015 . |
Schedule of property and equipment | The following table sets forth the Company's property and equipment as of the periods presented: (in thousands) June 30, 2016 December 31, 2015 Evaluated oil and natural gas properties $ 5,309,151 $ 5,103,635 Less accumulated depletion and impairment (4,448,482 ) (4,218,942 ) Evaluated oil and natural gas properties, net 860,669 884,693 Unevaluated properties not being depleted 114,507 140,299 Midstream service assets 148,227 147,811 Less accumulated depreciation (20,175 ) (16,086 ) Midstream service assets, net 128,052 131,725 Depreciable other fixed assets 46,255 46,799 Less accumulated depreciation and amortization (20,218 ) (18,169 ) Depreciable other fixed assets, net 26,037 28,630 Land 14,914 14,908 Total property and equipment, net $ 1,144,179 $ 1,200,255 |
Benchmark Prices, Realized Prices and the corresponding non-cash full cost ceiling impairments | The following table presents the Benchmark Prices, Realized Prices and the corresponding non-cash full cost ceiling impairments recorded as of the periods presented: For the quarters ended June 30, 2016 March 31, 2016 December 31, 2015 September 30, 2015 June 30, 2015 Benchmark Prices Oil ($/Bbl) $ 39.63 $ 42.77 $ 46.79 $ 55.73 $ 68.17 NGL ($/Bbl) $ 17.08 $ 17.51 $ 18.75 $ 21.87 $ 26.73 Natural gas ($/MMBtu) $ 2.17 $ 2.31 $ 2.47 $ 2.89 $ 3.22 Realized Prices Oil ($/Bbl) $ 37.96 $ 41.33 $ 45.58 $ 54.28 $ 66.68 NGL ($/Bbl) $ 10.80 $ 11.25 $ 12.50 $ 15.25 $ 19.56 Natural gas ($/Mcf) $ 1.64 $ 1.75 $ 1.89 $ 2.30 $ 2.62 Non-cash full cost ceiling impairment (in thousands) $ — $ 161,064 $ 975,011 $ 906,420 $ 488,046 |
Impairments | The following table presents inventory impairments recorded as of the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Inventory impairments: Materials and supplies (1) $ 963 $ 1,553 $ 963 $ 2,320 Line-fill (2) — — — 111 Total inventory impairments $ 963 $ 1,553 $ 963 $ 2,431 ______________________________________________________________________________ (1) Included in "Impairment expense" in the unaudited consolidated statements of operations and in "Impairment expense" for the Company's exploration and production segment presented in Note 16. (2) Included in "Impairment expense" in the unaudited consolidated statements of operations and in "Impairment expense" for the Company's midstream and marketing segment presented in Note 16. |
Schedule of future amortization expense of deferred debt issuance costs | Future amortization expense of debt issuance costs as of the period presented is as follows: (in thousands) June 30, 2016 Remaining 2016 $ 2,092 2017 4,238 2018 4,068 2019 2,915 2020 3,005 Thereafter 4,585 Total $ 20,903 |
Schedule of other current assets | Other current assets consist of the following components for the periods presented: (in thousands) June 30, 2016 December 31, 2015 Inventory (1) $ 6,986 $ 6,974 Prepaid expenses and other 7,459 7,600 Total other current assets $ 14,445 $ 14,574 ______________________________________________________________________________ (1) See Note 2.g for discussion of inventory held by the Company. |
Schedule of other current liabilities | Other current liabilities consist of the following components for the periods presented: (in thousands) June 30, 2016 December 31, 2015 Accrued interest payable $ 24,161 $ 24,208 Costs of purchased oil payable 15,629 12,189 Lease operating expense payable 11,570 13,205 Accrued compensation and benefits 8,720 14,342 Capital contribution payable to equity method investee (1) — 27,583 Other accrued liabilities 12,440 14,695 Total other current liabilities $ 72,520 $ 106,222 ______________________________________________________________________________ (1) See Notes 14 and 15 for additional discussion regarding our equity method investee. |
Schedule of reconciliation of asset retirement obligation liability | The following reconciles the Company's asset retirement obligation liability for the periods presented: (in thousands) Six months ended June 30, 2016 Year ended December 31, 2015 Liability at beginning of period $ 46,306 $ 32,198 Liabilities added due to acquisitions, drilling, midstream service asset construction and other 253 2,236 Accretion expense 1,704 2,423 Liabilities settled upon plugging and abandonment (526 ) (146 ) Liabilities removed due to sale of property — (2,005 ) Revision of estimates (1) — 11,600 Liability at end of period $ 47,737 $ 46,306 _____________________________________________________________________________ (1) The revision of estimates that occurred during the year ended December 31, 2015 is mainly related to a change in the estimated remaining life per well due to the decline in commodity prices. |
Schedule of non-cash investing and supplemental cash flow information | The following presents the non-cash investing and supplemental cash flow information for the periods presented: Six months ended June 30, (in thousands) 2016 2015 Non-cash investing information: Change in accrued capital expenditures $ (22,012 ) $ (53,209 ) Change in accrued capital contribution to equity method investee (1) $ (27,583 ) $ 27,917 Capitalized asset retirement cost $ 253 $ 1,402 Supplemental cash flow information: Capitalized interest $ 115 $ 178 ______________________________________________________________________________ (1) See Notes 14 and 15 for additional discussion regarding our equity method investee. |
Divestiture (Tables)
Divestiture (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of revenues and expenses for discontinued operations | The following table presents revenues and expenses of the oil and natural gas properties sold included in the accompanying unaudited consolidated statements of operations for the periods presented: (in thousands) Three months ended June 30, 2015 Six months ended June 30, 2015 Oil, NGL and natural gas sales $ 1,970 $ 4,048 Expenses (1) 2,098 4,710 _____________________________________________________________________________ (1) Expenses include (i) lease operating expense, (ii) production and ad valorem tax expense, (iii) accretion expense and (iv) depletion expense. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
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: June 30, 2016 December 31, 2015 (in thousands) Long-term Fair value Long-term Fair value January 2022 Notes $ 450,000 $ 426,564 $ 450,000 $ 388,301 May 2022 Notes 500,000 501,250 500,000 460,000 March 2023 Notes 350,000 349,965 350,000 301,000 Senior Secured Credit Facility 110,318 110,261 135,000 134,993 Total value of debt $ 1,410,318 $ 1,388,040 $ 1,435,000 $ 1,284,294 |
Schedule of debt | The following table summarizes the net presentation of the Company's long-term debt and debt issuance cost on the unaudited consolidated balance sheets for the periods presented: June 30, 2016 December 31, 2015 (in thousands) Long-term debt Debt issuance costs, net Long-term debt, net Long-term debt Debt issuance costs, net Long-term debt, net January 2022 Notes $ 450,000 $ (5,451 ) $ 444,549 $ 450,000 $ (5,939 ) $ 444,061 May 2022 Notes 500,000 (6,624 ) 493,376 500,000 (7,066 ) 492,934 March 2023 Notes 350,000 (5,366 ) 344,634 350,000 (5,769 ) 344,231 Senior Secured Credit Facility (1) 110,318 — 110,318 135,000 — 135,000 Total $ 1,410,318 $ (17,441 ) $ 1,392,877 $ 1,435,000 $ (18,774 ) $ 1,416,226 ______________________________________________________________________________ (1) Debt issuance costs related to our Senior Secured Credit Facility are recorded in "Other assets, net" on the unaudited consolidated balance sheets. |
Employee compensation (Tables)
Employee compensation (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The assumptions used to estimate the fair value of the 22,324 restricted stock options granted on April 1, 2016 and the 994,022 restricted stock options granted on May 25, 2016 are as follows: April 1, 2016 May 25, 2016 Risk-free interest rate (1) 1.44 % 1.58 % Expected option life (2) 6.25 years 6.25 years Expected volatility (3) 61.34 % 61.94 % Fair value per stock option $ 4.44 $ 9.75 (1) United States Treasury yields as of the grant date were utilized for the risk-free interest rate assumption, correlating 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 historical volatility in order to develop the expected volatility. |
Schedule Share-based Compensation, Performance Shares Award Unvested Activity | The following table reflects the performance share award activity for the six months ended June 30, 2016 : (in thousands, except for weighted-average grant date fair values) Performance share awards Weighted-average (per award) Outstanding as of December 31, 2015 874 $ 20.06 Granted 1,801 $ 17.71 Forfeited (247 ) $ 19.69 Vested — $ — Outstanding as of June 30, 2016 2,428 $ 18.36 |
Schedule of stock option award activity | The following table reflects the stock option award activity for the six months ended June 30, 2016 : (in thousands, except for weighted-average price and contractual term) Restricted stock option awards Weighted-average Weighted-average Outstanding as of December 31, 2015 1,778 $ 17.86 7.91 Granted 1,016 $ 4.18 Exercised (6 ) $ 11.93 Expired or canceled (35 ) $ 22.40 Forfeited (229 ) $ 13.62 Outstanding as of June 30, 2016 2,524 $ 12.69 8.06 Vested and exercisable at end of period (1) 916 $ 19.49 6.41 Expected to vest at end of period (2) 1,600 $ 8.75 9.02 _____________________________________________________________________________ (1) The vested and exercisable options as of June 30, 2016 had no aggregate intrinsic value. (2) The restricted stock options expected to vest as of June 30, 2016 had $6.1 million aggregate intrinsic value. |
Schedule of Nonvested Share Activity | The following table reflects the outstanding restricted stock awards for the six months ended June 30, 2016 : (in thousands, except for weighted-average grant date fair values) Restricted stock awards Weighted-average Outstanding as of December 31, 2015 2,539 $ 15.26 Granted 2,968 $ 12.27 Forfeited (221 ) $ 15.16 Vested (1) (1,124 ) $ 16.06 Outstanding as of June 30, 2016 4,162 $ 12.92 ______________________________________________________________________________ (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 stock awards. |
Schedule Of Share Based Compensation 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 Less than one — % — % One 25 % 25 % Two 25 % 50 % Three 25 % 75 % Four 25 % 100 % |
Schedule of stock-based compensation expense | The following has been recorded to stock-based compensation expense for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Restricted stock award compensation $ 4,692 $ 4,520 $ 8,460 $ 7,458 Restricted stock option award compensation 777 1,279 1,401 1,949 Restricted performance share award compensation 1,593 1,378 1,821 2,273 Total stock-based compensation, gross 7,062 7,177 11,682 11,680 Less amounts capitalized in oil and natural gas properties (989 ) (909 ) (1,771 ) (624 ) Total stock-based compensation, net of amounts capitalized $ 6,073 $ 6,268 $ 9,911 $ 11,056 |
Performance Share Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share-based Payment Award, Equity Instruments Other Than Options, Valuation Assumptions | The assumptions used to estimate the fair value of the 32,495 performance share awards granted on April 1, 2016 and the 1,768,297 performance share awards granted on May 25, 2016 are as follows: April 1, 2016 May 25, 2016 Risk-free rate (1) 0.87 % 1.02 % Dividend yield — % — % Expected volatility (2) 71.54 % 74.73 % Laredo stock closing price on grant date $ 7.71 $ 12.36 Fair value per performance share $ 9.83 $ 17.86 ______________________________________________________________________________ (1) The risk-free rate was derived using a term-matched zero-coupon yield derived from the Treasury Constant Maturities yield curve on the grant date. (2) The Company utilized its own historical volatility over a lookback period equal to the length of the remaining performance period from the grant date in order to develop the expected volatility. |
Income taxes (Tables)
Income taxes (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax benefit | The Company is subject to federal and state income taxes and the Texas franchise tax. Income tax benefit for the periods presented consisted of the following: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Current taxes $ — $ — $ — $ — Deferred taxes — 221,846 — 218,203 Income tax benefit $ — $ 221,846 $ — $ 218,203 |
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 benefit 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 June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Income tax benefit computed by applying the statutory rate $ 25,001 $ 216,608 $ 88,131 $ 215,498 State income tax and change in valuation allowance (541 ) 5,776 187 5,867 Non-deductible stock-based compensation — (15 ) — (106 ) Stock-based compensation tax deficiency (190 ) (381 ) (4,012 ) (2,838 ) Increase in deferred tax valuation allowance (24,323 ) (11 ) (84,218 ) (16 ) Other items 53 (131 ) (88 ) (202 ) Income tax benefit $ — $ 221,846 $ — $ 218,203 |
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 June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Vesting of restricted stock $ (182 ) $ (388 ) $ (4,057 ) $ (2,889 ) Exercise of restricted stock options (10 ) — (10 ) — Tax expense due to shortfalls $ (192 ) $ (388 ) $ (4,067 ) $ (2,889 ) |
Schedule of significant components of deferred tax assets and liabilities | Significant components of the Company's net deferred tax asset for the periods presented are as follows: (in thousands) June 30, 2016 December 31, 2015 Oil and natural gas properties, midstream service assets and other fixed assets $ 282,612 $ 306,997 Net operating loss carry-forward 528,625 479,022 Derivatives (41,577 ) (98,675 ) Stock-based compensation 9,340 11,597 Equity method investee (25,612 ) (31,711 ) Accrued bonus 2,544 4,763 Capitalized interest 2,173 2,525 Other 2,901 2,820 Net deferred tax asset before valuation allowance 761,006 677,338 Valuation allowance (761,006 ) (677,338 ) Net deferred tax asset $ — $ — |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | During the six months ended June 30, 2016 , the following derivatives were terminated: Aggregate volumes Floor price Contract period Oil (volumes in Bbl): Put portion of the associated collars 2,263,000 $ 80.00 January 2017 - December 2017 During the six months ended June 30, 2016 , the following derivatives were entered into: Aggregate volumes Floor price Ceiling price Contract period Oil (volumes in Bbl): Put (1) 2,263,000 $ 60.00 $ — January 2017 - December 2017 Put (2) 2,098,750 $ 60.00 $ — January 2017 - December 2018 Put (3) 600,000 $ 40.00 $ — May 2016 - December 2016 Swap 1,095,000 $ 52.12 $ — January 2018 - December 2018 Natural gas (volumes in MMBtu): (4) Put 8,040,000 $ 2.50 $ — January 2017 - December 2017 Put 8,220,000 $ 2.50 $ — January 2018 - December 2018 Collar 5,256,000 $ 2.50 $ 3.05 January 2017 - December 2017 Collar 4,635,500 $ 2.50 $ 3.60 January 2018 - December 2018 _____________________________________________________________________________ (1) As part of the Company's hedge restructuring, this put replaced the early terminated put portion of the restructured derivative contract collars. A premium of $40.0 million was paid at contract inception. (2) As part of the Company's hedge restructuring, a premium of $40.0 million was paid at contract inception. (3) There are $1.2 million in deferred premiums associated with this contract. (4) There are $5.1 million in deferred premiums associated with these contracts. Subsequent to June 30, 2016 , the Company entered into the following new derivative contracts: Aggregate volumes Price Contract period Oil (volumes in Bbl): (1) Swap 1,003,750 $ 51.90 January 2017 - December 2017 Swap 1,003,750 $ 51.17 January 2017 - December 2017 NGL (volumes in Bbl): Swap (2) 444,000 $ 11.24 January 2017 - December 2017 Swap (3) 375,000 $ 22.26 January 2017 - December 2017 _____________________________________________________________ (1) The associated derivatives will be settled based on the WTI NYMEX index oil price. (2) The associated derivative will be settled based on the Mont Belvieu Purity Ethane-OPIS price. (3) The associated derivative will be settled based on the Mont Belvieu Propane (TET)-OPIS price. |
Schedule of gains and losses on derivative instruments | The following represents cash settlements received for derivatives, net for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Cash settlements received for matured derivatives, net $ 47,382 $ 46,596 $ 113,319 $ 109,737 Cash settlements received for early terminations of derivatives, net (1) — — 80,000 — Cash settlements received for derivatives, net $ 47,382 $ 46,596 $ 193,319 $ 109,737 _____________________________________________________________________________ (1) The settlements amount for the six months ended June 30, 2016 includes $4.0 million in deferred premiums which were settled net with the early terminated contracts from which they derive. |
Summary of open positions and derivatives in place | The following table summarizes open positions as of June 30, 2016 , and represents, as of such date, derivatives in place through December 2018 on annual production volumes: Remaining year 2016 Year 2017 Year Oil positions: (1) Puts: Hedged volume (Bbl) 1,098,000 1,049,375 1,049,375 Weighted-average price ($/Bbl) $ 42.95 $ 60.00 $ 60.00 Swaps: Hedged volume (Bbl) 791,200 — 1,095,000 Weighted-average price ($/Bbl) $ 84.82 $ — $ 52.12 Collars: Hedged volume (Bbl) 1,833,500 2,628,000 — Weighted-average floor price ($/Bbl) $ 73.98 $ 60.00 $ — Weighted-average ceiling price ($/Bbl) $ 89.62 $ 97.22 $ — Totals: Total volume hedged with floor price (Bbl) 3,722,700 3,677,375 2,144,375 Weighted-average floor price ($/Bbl) $ 67.13 $ 60.00 $ 55.98 Total volume hedged with ceiling price (Bbl) 2,624,700 2,628,000 1,095,000 Weighted-average ceiling price ($/Bbl) $ 88.18 $ 97.22 $ 52.12 Natural gas positions: (2) Puts: Hedged volume (MMBtu) — 8,040,000 8,220,000 Weighted-average price ($/MMBtu) $ — $ 2.50 $ 2.50 Collars: Hedged volume (MMBtu) 9,384,000 10,731,000 4,635,500 Weighted-average floor price ($/MMBtu) $ 3.00 $ 2.76 $ 2.50 Weighted-average ceiling price ($/MMBtu) $ 5.60 $ 3.53 $ 3.60 Totals: Total volume hedged with floor price (MMBtu) 9,384,000 18,771,000 12,855,500 Weighted-average floor price ($/MMBtu) $ 3.00 $ 2.65 $ 2.50 Total volume hedged with ceiling price (MMBtu) 9,384,000 10,731,000 4,635,500 Weighted-average ceiling price ($/MMBtu) $ 5.60 $ 3.53 $ 3.60 _______________________________________________________________________________ (1) Oil derivatives are settled based on the average of the daily settlement prices for the First Nearby Month of the WTI NYMEX Light Sweet Crude Oil Futures Contract for each NYMEX Trading Day during each month. (2) 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) | 6 Months Ended |
Jun. 30, 2016 | |
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 as of the periods presented: (in thousands) Level 1 Level 2 Level 3 Total gross fair value Amounts offset Net fair value presented on the As of June 30, 2016: Assets Current: Oil derivatives $ — $ 93,057 $ — $ 93,057 $ (515 ) $ 92,542 Natural gas derivatives — 3,458 — 3,458 (1,165 ) 2,293 Oil deferred premiums — — — — (5,467 ) (5,467 ) Natural gas deferred premiums — — — — (403 ) (403 ) Noncurrent: Oil derivatives $ — $ 33,181 $ — $ 33,181 $ — $ 33,181 Natural gas derivatives — 2,724 — 2,724 (2,724 ) — Oil deferred premiums — — — — (501 ) (501 ) Natural gas deferred premiums — — — — — — Liabilities Current: Oil derivatives $ — $ — $ — $ — $ 515 $ 515 Natural gas derivatives — (739 ) — (739 ) 1,165 426 Oil deferred premiums — — (6,784 ) (6,784 ) 5,467 (1,317 ) Natural gas deferred premiums — — (1,507 ) (1,507 ) 403 (1,104 ) Noncurrent: Oil derivatives $ — $ (1,820 ) $ — $ (1,820 ) $ — $ (1,820 ) Natural gas derivatives — (774 ) — (774 ) 2,724 1,950 Oil deferred premiums — — (501 ) (501 ) 501 — Natural gas deferred premiums — — (3,870 ) (3,870 ) — (3,870 ) Net derivative position $ — $ 129,087 $ (12,662 ) $ 116,425 $ — $ 116,425 (in thousands) Level 1 Level 2 Level 3 Total gross fair value Amounts offset Net fair value presented on the unaudited consolidated balance sheets As of December 31, 2015: Assets Current: Oil derivatives $ — $ 194,940 $ — $ 194,940 $ — $ 194,940 Natural gas derivatives — 13,166 — 13,166 — 13,166 Oil deferred premiums — — — — (9,301 ) (9,301 ) Natural gas deferred premiums — — — — — — Noncurrent: Oil derivatives $ — $ 80,302 $ — $ 80,302 $ — $ 80,302 Natural gas derivatives — 2,459 — 2,459 — 2,459 Oil deferred premiums — — — — (4,877 ) (4,877 ) Natural gas deferred premiums — — — — (441 ) (441 ) Liabilities Current: Oil derivatives $ — $ — $ — $ — $ — $ — Natural gas derivatives — — — — — — Oil deferred premiums — — (9,301 ) (9,301 ) 9,301 — Natural gas deferred premiums — — — — — — Noncurrent: Oil derivatives $ — $ — $ — $ — $ — $ — Natural gas derivatives — — — — — — Oil deferred premiums — — (4,877 ) (4,877 ) 4,877 — Natural gas deferred premiums — — (441 ) (441 ) 441 — Net derivative position $ — $ 290,867 $ (14,619 ) $ 276,248 $ — $ 276,248 |
Actual cash payments required for deferred premium contracts | The following table presents actual cash payments required for deferred premiums for the calendar years presented: (in thousands) June 30, 2016 Remaining 2016 $ 5,407 2017 5,354 2018 2,100 Total $ 12,861 |
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 June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Balance of Level 3 at beginning of period $ (13,054 ) $ (8,882 ) $ (14,619 ) $ (9,285 ) Change in net present value of deferred premiums for derivatives (61 ) (45 ) (133 ) (88 ) Total purchases and settlements: Purchases (1,960 ) (4,409 ) (6,072 ) (5,384 ) Settlements (1) 2,413 1,249 8,162 2,670 Balance of Level 3 at end of period $ (12,662 ) $ (12,087 ) $ (12,662 ) $ (12,087 ) _____________________________________________________________________________ (1) The amount for the six months ended June 30, 2016 includes $3.9 million which represents the present value of deferred premiums settled in the Company's restructuring upon their early termination. |
Net loss per share (Tables)
Net loss per share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
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 June 30, Six months ended June 30, (in thousands, except for per share data) 2016 2015 2016 2015 Net loss (numerator): Net loss—basic and diluted $ (71,432 ) $ (397,034 ) $ (251,803 ) $ (397,506 ) Weighted-average common shares outstanding (denominator): Basic 217,564 211,078 214,562 186,886 Diluted 217,564 211,078 214,562 186,886 Net loss per share: Basic $ (0.33 ) $ (1.88 ) $ (1.17 ) $ (2.13 ) Diluted $ (0.33 ) $ (1.88 ) $ (1.17 ) $ (2.13 ) |
Related Parties (Tables)
Related Parties (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
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 June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Midstream service revenues $ — $ 390 $ — $ 487 Minimum volume commitments — 3,579 — 5,235 Interest and other income — — — 108 The following table summarizes items included in the unaudited consolidated balance sheets related to Medallion as of the dates presented: (in thousands) June 30, 2016 December 31, 2015 Accounts receivable, net $ — $ 1,163 Other assets, net (1) 1,025 1,025 Other current liabilities (2) 102 27,583 ______________________________________________________________________________ (1) Amounts included in "Other assets, net" above represent LMS owned line-fill in Medallion's pipeline. (2) Amounts included in "Other current liabilities" above represent LMS' accrued line-fill purchase in Medallion's pipeline as of June 30, 2016 and capital contribution payable to Medallion as of December 31, 2015. The following table summarizes the capitalized oil and natural gas properties related to H&P included in the unaudited consolidated statements of cash flows for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Capital expenditures: Oil and natural gas properties $ — $ 177 $ — $ 2,434 The following table summarizes the oil, NGL and natural gas sales and midstream service revenues received from Targa included in the unaudited consolidated statements of operations for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Oil, NGL and natural gas sales $ 18,112 $ 34,012 $ 35,917 $ 53,643 Midstream service revenues 102 — 237 — The following table summarizes the amounts included in accounts receivable, net from Targa in the unaudited consolidated balance sheets as of the dates presented: (in thousands) June 30, 2016 December 31, 2015 Accounts receivable, net $ 9,337 $ 6,097 The following table summarizes the lease operating expenses related to Archrock included in the unaudited consolidated statements of operations for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Lease operating expenses $ 526 $ 391 $ 1,001 $ 776 The following table summarizes the capital expenditures related to Archrock included in the unaudited consolidated statements of cash flows for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Capital expenditures: Midstream service assets $ — $ 18 $ 20 $ 64 The following table summarizes the amounts included in accounts payable from Archrock in the unaudited consolidated balance sheets as of the dates presented: (in thousands) June 30, 2016 December 31, 2015 Accounts payable $ — $ 13 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | The following table presents selected financial information, for the periods presented, regarding the Company's operating segments on a stand-alone basis and the consolidation and elimination entries necessary to arrive at the information for the Company on a consolidated basis: (in thousands) Exploration and production Midstream and marketing Eliminations Consolidated company Three months ended June 30, 2016: Oil, NGL and natural gas sales $ 102,526 $ — $ — $ 102,526 Midstream service revenues — 11,138 (9,506 ) 1,632 Sales of purchased oil — 42,615 — 42,615 Total revenues 102,526 53,753 (9,506 ) 146,773 Lease operating expenses, including production tax 29,793 — (2,586 ) 27,207 Midstream service expenses — 6,572 (5,394 ) 1,178 Costs of purchased oil — 44,012 — 44,012 General and administrative (1) 18,818 1,684 — 20,502 Depletion, depreciation and amortization (2) 31,969 2,208 — 34,177 Impairment expense 963 — — 963 Other operating costs and expenses (3) 806 54 — 860 Operating income (loss) $ 20,177 $ (777 ) $ (1,526 ) $ 17,874 Other financial information: Income from equity method investee $ — $ 3,696 $ — $ 3,696 Interest expense (4) $ (22,050 ) $ (1,462 ) $ — $ (23,512 ) Capital expenditures $ (92,089 ) $ (1,488 ) $ — $ (93,577 ) Gross property and equipment (6) $ 5,484,416 $ 366,858 $ (4,604 ) $ 5,846,670 Three months ended June 30, 2015: Oil, NGL and natural gas sales $ 125,679 $ 221 $ (346 ) $ 125,554 Midstream service revenues — 4,362 (2,636 ) 1,726 Sales of purchased oil — 55,051 — 55,051 Total revenues 125,679 59,634 (2,982 ) 182,331 Lease operating expenses, including production tax 41,423 — (2,717 ) 38,706 Midstream service expenses, including minimum volume commitments 4,399 998 (221 ) 5,176 Costs of purchased oil — 54,417 — 54,417 General and administrative (1) 21,347 1,861 — 23,208 Depletion, depreciation and amortization (2) 69,987 2,125 — 72,112 Impairment expense 489,599 — — 489,599 Other operating costs and expenses (3) 548 45 — 593 Operating income (loss) $ (501,624 ) $ 188 $ (44 ) $ (501,480 ) Other financial information: Income from equity method investee $ — $ 2,914 $ — $ 2,914 Interest expense (4) $ (22,845 ) $ (1,125 ) $ — $ (23,970 ) Loss on early redemption of debt (5) $ (30,056 ) $ (1,481 ) $ — $ (31,537 ) Capital expenditures $ (133,259 ) $ (13,841 ) $ — $ (147,100 ) Gross property and equipment (6) $ 5,170,912 $ 257,073 $ (365 ) $ 5,427,620 _______________________________________________________________________________ (1) General and administrative expense was allocated based on the number of employees in the respective segment as of June 30, 2016 and 2015. Certain components of general and administrative expense, primarily payroll, deferred compensation and vehicle expenses, were not allocated but were actual expenses for each segment. Land and geology expenses were not allocated to the midstream and marketing segment. (2) Depletion, depreciation and amortization were actual expenses for each segment with the exception of the allocation of depreciation of other fixed assets, which is based on the number of employees in the respective segment as of June 30, 2016 and 2015. (3) Other operating costs and expenses consist of accretion of asset retirement obligations. These are actual costs and expenses and were not allocated. (4) Interest expense was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2016 and 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2016 and 2015. (5) Loss on early redemption of debt was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2015 . (6) Gross property and equipment for the midstream and marketing segment includes investment in equity method investee totaling $213.6 million and $103.2 million as of June 30, 2016 and 2015 , respectively. Other fixed assets were allocated based on the number of employees in the respective segment as of June 30, 2016 and 2015 . (in thousands) Exploration and production Midstream and marketing Eliminations Consolidated company Six months ended June 30, 2016: Oil, NGL and natural gas sales $ 175,668 $ — $ — $ 175,668 Midstream service revenues — 22,405 (18,972 ) 3,433 Sales of purchased oil — 74,229 — 74,229 Total revenues 175,668 96,634 (18,972 ) 253,330 Lease operating expenses, including production tax 59,157 — (4,997 ) 54,160 Midstream service expenses — 13,081 (11,294 ) 1,787 Costs of purchased oil — 76,958 — 76,958 General and administrative (1) 36,497 3,456 — 39,953 Depletion, depreciation and amortization (2) 71,261 4,394 — 75,655 Impairment expense 162,027 — — 162,027 Other operating costs and expenses (3) 1,598 106 — 1,704 Operating loss $ (154,872 ) $ (1,361 ) $ (2,681 ) $ (158,914 ) Other financial information: Income from equity method investee $ — $ 5,994 $ — $ 5,994 Interest expense (4) $ (44,353 ) $ (2,864 ) $ — $ (47,217 ) Capital expenditures $ (197,874 ) $ (3,425 ) $ — $ (201,299 ) Gross property and equipment (6) $ 5,484,416 $ 366,858 $ (4,604 ) $ 5,846,670 Six months ended June 30, 2015: Oil, NGL and natural gas sales $ 243,890 $ 333 $ (551 ) $ 243,672 Midstream service revenues — 8,045 (5,010 ) 3,035 Sales of purchased oil — 86,318 — 86,318 Total revenues 243,890 94,696 (5,561 ) 333,025 Lease operating expenses, including production tax 85,268 — (5,096 ) 80,172 Midstream service expenses, including minimum volume commitments 4,399 4,340 (333 ) 8,406 Costs of purchased oil — 85,617 — 85,617 General and administrative (1) 41,125 3,938 — 45,063 Depletion, depreciation and amortization (2) 140,244 3,810 — 144,054 Impairment expense 490,366 111 — 490,477 Other operating costs and expenses (3) 6,972 242 — 7,214 Operating loss $ (524,484 ) $ (3,362 ) $ (132 ) $ (527,978 ) Other financial information: Income from equity method investee $ — $ 2,481 $ — $ 2,481 Interest expense (4) $ (53,932 ) $ (2,452 ) $ — $ (56,384 ) Loss on early redemption of debt (5) $ (30,056 ) $ (1,481 ) $ — $ (31,537 ) Capital expenditures $ (380,872 ) $ (34,314 ) $ — $ (415,186 ) Gross property and equipment (6) $ 5,170,912 $ 257,073 $ (365 ) $ 5,427,620 _______________________________________________________________________________ (1) General and administrative expense was allocated based on the number of employees in the respective segment as of June 30, 2016 and 2015. Certain components of general and administrative expense, primarily payroll, deferred compensation and vehicle expenses, were not allocated but were actual expenses for each segment. Land and geology expenses were not allocated to the midstream and marketing segment. (2) Depletion, depreciation and amortization were actual expenses for each segment with the exception of the allocation of depreciation of other fixed assets, which is based on the number of employees in the respective segment as of June 30, 2016 and 2015. (3) Other operating costs and expenses consist of accretion of asset retirement obligations for the six months ended June 30, 2016 and 2015 and restructuring expense for the six months ended June 30, 2015 . These are actual costs and expenses and were not allocated. (4) Interest expense was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2016 and 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2016 and 2015. (5) Loss on early redemption of debt was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2015 . (6) Gross property and equipment for the midstream and marketing segment includes investment in equity method investee totaling $213.6 million and $103.2 million as of June 30, 2016 and 2015 , respectively. Other fixed assets were allocated based on the number of employees in the respective segment as of June 30, 2016 and 2015 . |
Subsidiary guarantors (Tables)
Subsidiary guarantors (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Schedule of condensed consolidating balance sheet | Condensed consolidating balance sheet June 30, 2016 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Accounts receivable, net $ 73,429 $ 15,114 $ — $ 88,543 Other current assets 120,982 1,737 — 122,719 Total oil and natural gas properties, net 970,445 9,335 (4,604 ) 975,176 Total midstream service assets, net — 128,052 — 128,052 Total other fixed assets, net 40,701 250 — 40,951 Investment in subsidiaries and equity method investee 348,623 213,616 (348,623 ) 213,616 Total other long-term assets 37,526 3,568 — 41,094 Total assets $ 1,591,706 $ 371,672 $ (353,227 ) $ 1,610,151 Accounts payable $ 12,934 $ 1,566 $ — $ 14,500 Other current liabilities 120,756 18,556 — 139,312 Long-term debt, net 1,392,877 — — 1,392,877 Other long-term liabilities 51,373 2,927 — 54,300 Stockholders' equity 13,766 348,623 (353,227 ) 9,162 Total liabilities and stockholders' equity $ 1,591,706 $ 371,672 $ (353,227 ) $ 1,610,151 Condensed consolidating balance sheet December 31, 2015 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Accounts receivable, net $ 74,613 $ 13,086 $ — $ 87,699 Other current assets 244,477 56 — 244,533 Total oil and natural gas properties, net 1,017,565 9,350 (1,923 ) 1,024,992 Total midstream service assets, net — 131,725 — 131,725 Total other fixed assets, net 43,210 328 — 43,538 Investment in subsidiaries and equity method investee 301,891 192,524 (301,891 ) 192,524 Total other long-term assets 84,360 3,916 — 88,276 Total assets $ 1,766,116 $ 350,985 $ (303,814 ) $ 1,813,287 Accounts payable $ 12,203 $ 1,978 $ — $ 14,181 Other current liabilities 158,283 44,351 — 202,634 Long-term debt, net 1,416,226 — — 1,416,226 Other long-term liabilities 46,034 2,765 — 48,799 Stockholders' equity 133,370 301,891 (303,814 ) 131,447 Total liabilities and stockholders' equity $ 1,766,116 $ 350,985 $ (303,814 ) $ 1,813,287 |
Schedule of condensed consolidating statement of operations | Condensed consolidating statement of operations For the three months ended June 30, 2016 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Total revenues $ 102,511 $ 53,768 $ (9,506 ) $ 146,773 Total costs and expenses 84,137 52,742 (7,980 ) 128,899 Operating income 18,374 1,026 (1,526 ) 17,874 Interest expense and other, net (23,501 ) — — (23,501 ) Other non-operating income (expense) (64,779 ) 3,692 (4,718 ) (65,805 ) Income (loss) before income tax (69,906 ) 4,718 (6,244 ) (71,432 ) Income tax — — — — Net income (loss) $ (69,906 ) $ 4,718 $ (6,244 ) $ (71,432 ) Condensed consolidating statement of operations For the six months ended June 30, 2016 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Total revenues $ 175,633 $ 96,669 $ (18,972 ) $ 253,330 Total costs and expenses 334,201 94,334 (16,291 ) 412,244 Operating income (loss) (158,568 ) 2,335 (2,681 ) (158,914 ) Interest expense and other, net (47,107 ) — — (47,107 ) Other non-operating income (expense) (43,447 ) 5,983 (8,318 ) (45,782 ) Income (loss) before income tax (249,122 ) 8,318 (10,999 ) (251,803 ) Income tax — — — — Net income (loss) $ (249,122 ) $ 8,318 $ (10,999 ) $ (251,803 ) Condensed consolidating statement of operations For the three months ended June 30, 2015 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Total revenues $ 125,687 $ 59,626 $ (2,982 ) $ 182,331 Total costs and expenses 629,359 57,390 (2,938 ) 683,811 Operating income (loss) (503,672 ) 2,236 (44 ) (501,480 ) Interest expense and other, net (23,797 ) — — (23,797 ) Other non-operating income (expense) (91,367 ) 2,914 (5,150 ) (93,603 ) Income (loss) before income tax (618,836 ) 5,150 (5,194 ) (618,880 ) Deferred income tax benefit 221,846 — — 221,846 Net income (loss) $ (396,990 ) $ 5,150 $ (5,194 ) $ (397,034 ) Condensed consolidating statement of operations For the six months ended June 30, 2015 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Total revenues $ 243,833 $ 94,753 $ (5,561 ) $ 333,025 Total costs and expenses 772,667 93,765 (5,429 ) 861,003 Operating income (loss) (528,834 ) 988 (132 ) (527,978 ) Interest expense and other, net (56,088 ) — — (56,088 ) Other non-operating income (expense) (30,655 ) 2,481 (3,469 ) (31,643 ) Income (loss) before income tax (615,577 ) 3,469 (3,601 ) (615,709 ) Deferred income tax benefit 218,203 — — 218,203 Net income (loss) $ (397,374 ) $ 3,469 $ (3,601 ) $ (397,506 ) |
Schedule of condensed consolidating statement of cash flows | Condensed consolidating statement of cash flows For the six months ended June 30, 2016 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Net cash flows provided by operating activities $ 139,610 $ 7,339 $ (8,318 ) $ 138,631 Change in investment between affiliates (47,069 ) 38,751 8,318 — Capital expenditures and other (197,540 ) (46,090 ) — (243,630 ) Net cash flows provided by financing activities 93,154 — — 93,154 Net decrease in cash and cash equivalents (11,845 ) — — (11,845 ) Cash and cash equivalents at beginning of period 31,153 1 — 31,154 Cash and cash equivalents at end of period $ 19,308 $ 1 $ — $ 19,309 Condensed consolidating statement of cash flows For the six months ended June 30, 2015 (Unaudited) (in thousands) Laredo Subsidiary Intercompany Consolidated Net cash flows provided by (used in) operating activities $ 136,092 $ (18,318 ) $ (3,469 ) $ 114,305 Change in investment between affiliates (70,472 ) 67,003 3,469 — Capital expenditures and other (380,961 ) (48,685 ) — (429,646 ) Net cash flows provided by financing activities 343,613 — — 343,613 Net increase in cash and cash equivalents 28,272 — — 28,272 Cash and cash equivalents at beginning of period 29,320 1 — 29,321 Cash and cash equivalents at end of period $ 57,592 $ 1 $ — $ 57,593 |
Subsequent Event (Tables)
Subsequent Event (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Schedule of Derivative Instruments | During the six months ended June 30, 2016 , the following derivatives were terminated: Aggregate volumes Floor price Contract period Oil (volumes in Bbl): Put portion of the associated collars 2,263,000 $ 80.00 January 2017 - December 2017 During the six months ended June 30, 2016 , the following derivatives were entered into: Aggregate volumes Floor price Ceiling price Contract period Oil (volumes in Bbl): Put (1) 2,263,000 $ 60.00 $ — January 2017 - December 2017 Put (2) 2,098,750 $ 60.00 $ — January 2017 - December 2018 Put (3) 600,000 $ 40.00 $ — May 2016 - December 2016 Swap 1,095,000 $ 52.12 $ — January 2018 - December 2018 Natural gas (volumes in MMBtu): (4) Put 8,040,000 $ 2.50 $ — January 2017 - December 2017 Put 8,220,000 $ 2.50 $ — January 2018 - December 2018 Collar 5,256,000 $ 2.50 $ 3.05 January 2017 - December 2017 Collar 4,635,500 $ 2.50 $ 3.60 January 2018 - December 2018 _____________________________________________________________________________ (1) As part of the Company's hedge restructuring, this put replaced the early terminated put portion of the restructured derivative contract collars. A premium of $40.0 million was paid at contract inception. (2) As part of the Company's hedge restructuring, a premium of $40.0 million was paid at contract inception. (3) There are $1.2 million in deferred premiums associated with this contract. (4) There are $5.1 million in deferred premiums associated with these contracts. Subsequent to June 30, 2016 , the Company entered into the following new derivative contracts: Aggregate volumes Price Contract period Oil (volumes in Bbl): (1) Swap 1,003,750 $ 51.90 January 2017 - December 2017 Swap 1,003,750 $ 51.17 January 2017 - December 2017 NGL (volumes in Bbl): Swap (2) 444,000 $ 11.24 January 2017 - December 2017 Swap (3) 375,000 $ 22.26 January 2017 - December 2017 _____________________________________________________________ (1) The associated derivatives will be settled based on the WTI NYMEX index oil price. (2) The associated derivative will be settled based on the Mont Belvieu Purity Ethane-OPIS price. (3) The associated derivative will be settled based on the Mont Belvieu Propane (TET)-OPIS price. |
Supplementary information (Tabl
Supplementary information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
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, NGL and natural gas assets are presented below: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Property acquisition costs: — Evaluated $ — $ — $ — $ — Unevaluated — — — — Exploration 19,769 3,841 27,032 8,354 Development costs (1) 70,806 110,518 152,692 317,190 Total costs incurred $ 90,575 $ 114,359 $ 179,724 $ 325,544 ____________________________________________________________________________ (1) The costs incurred for oil, NGL and natural gas development activities include $0.1 million and $0.5 million in asset retirement obligations for the three months ended June 30, 2016 and 2015 , respectively, and $0.2 million and $1.0 million for the six months ended June 30, 2016 and 2015 , respectively. |
Organization (Details)
Organization (Details) | 6 Months Ended |
Jun. 30, 2016segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 2 |
Basis of presentation and sig42
Basis of presentation and significant accounting policies - Accounts receivable (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016 | Dec. 31, 2015 | ||
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 | $ 42,629 | $ 25,582 | |
Joint operations, net | [1] | 18,425 | 21,375 |
Sales of purchased oil and other products | 15,000 | 11,775 | |
Matured derivatives | 12,223 | 27,469 | |
Other | 266 | 1,498 | |
Total | 88,543 | 87,699 | |
Allowance for doubtful accounts of accounts receivable for joint operations | $ (200) | $ (200) | |
[1] | Accounts receivable for joint operations are presented net of an allowance for doubtful accounts of $0.2 million as of both June 30, 2016 and December 31, 2015. |
Basis of presentation and sig43
Basis of presentation and significant accounting policies - Property and equipment (Details) $ in Thousands | Jun. 30, 2016USD ($)$ / bbl$ / MMBTU | Mar. 31, 2016$ / bbl$ / MMBTU | Dec. 31, 2015USD ($)$ / bbl$ / MMBTU | Sep. 30, 2015$ / bbl$ / MMBTU | Jun. 30, 2015$ / bbl$ / MMBTU | Jun. 30, 2016USD ($)$ / Boe | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($)$ / Boe | Jun. 30, 2016USD ($)$ / Boe | Jun. 30, 2015$ / Boe |
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||||||||
Evaluated oil and natural gas properties | $ 5,309,151 | $ 5,103,635 | $ 5,309,151 | $ 5,103,635 | $ 5,309,151 | |||||||
Less accumulated depletion and impairment | (4,448,482) | (4,218,942) | (4,448,482) | (4,218,942) | (4,448,482) | |||||||
Evaluated oil and natural gas properties, net | 860,669 | 884,693 | 860,669 | 884,693 | 860,669 | |||||||
Unevaluated properties not being depleted | 114,507 | 140,299 | 114,507 | 140,299 | 114,507 | |||||||
Total property and equipment, net | $ 1,144,179 | $ 1,200,255 | $ 1,144,179 | 1,200,255 | $ 1,144,179 | |||||||
Depletion expense in dollars per BOE | $ / Boe | 7.06 | 16.19 | 8.01 | 16.13 | ||||||||
Discount rate full cost ceiling (percent) | 10.00% | |||||||||||
Non-cash full cost ceiling impairment (in thousands) | $ 0 | $ 161,064 | 975,011 | $ 906,420 | $ 488,046 | |||||||
Crude Oil | ||||||||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||||||||
Benchmark Prices (in dollars per Bbl and MMBtu) | $ / bbl | 39.63 | 42.77 | 46.79 | 55.73 | 68.17 | |||||||
Realized Prices (in dollars per Bbl and Mcf) | $ / bbl | 37.96 | 41.33 | 45.58 | 54.28 | 66.68 | |||||||
Natural Gas Liquids | ||||||||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||||||||
Benchmark Prices (in dollars per Bbl and MMBtu) | $ / bbl | 17.08 | 17.51 | 18.75 | 21.87 | 26.73 | |||||||
Realized Prices (in dollars per Bbl and Mcf) | $ / bbl | 10.80 | 11.25 | 12.50 | 15.25 | 19.56 | |||||||
Natural Gas | ||||||||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||||||||
Benchmark Prices (in dollars per Bbl and MMBtu) | $ / MMBTU | 2.17 | 2.31 | 2.47 | 2.89 | 3.22 | |||||||
Realized Prices (in dollars per Bbl and Mcf) | $ / MMBTU | 1.64 | 1.75 | 1.89 | 2.30 | 2.62 | |||||||
Midstream Service Assets | ||||||||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||||||||
Midstream service assets | $ 148,227 | $ 147,811 | 148,227 | 147,811 | $ 148,227 | |||||||
Less accumulated depreciation and amortization | (20,175) | (16,086) | (20,175) | (16,086) | (20,175) | |||||||
Total property and equipment, net | 128,052 | 131,725 | 128,052 | 131,725 | 128,052 | |||||||
Other fixed assets | ||||||||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||||||||
Other fixed assets | 46,255 | 46,799 | 46,255 | 46,799 | 46,255 | |||||||
Less accumulated depreciation and amortization | (20,218) | (18,169) | (20,218) | (18,169) | (20,218) | |||||||
Total property and equipment, net | 26,037 | 28,630 | 26,037 | 28,630 | 26,037 | |||||||
Land | ||||||||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||||||||
Other fixed assets | $ 14,914 | $ 14,908 | $ 14,914 | $ 14,908 | $ 14,914 |
Basis of presentation and sig44
Basis of presentation and significant accounting policies - Long-lived assets and inventory (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment expense | $ 963 | $ 489,599 | $ 162,027 | $ 490,477 | |
Level 2 | Fair Value, Measurements, Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment expense | 963 | 1,553 | 963 | 2,431 | |
Materials and Supplies | Level 2 | Fair Value, Measurements, Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment expense | [1] | 963 | 1,553 | 963 | 2,320 |
Line-fill | Level 2 | Fair Value, Measurements, Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment expense | [2] | $ 0 | $ 0 | $ 0 | $ 111 |
[1] | Included in "Impairment expense" in the unaudited consolidated statements of operations and in "Impairment expense" for the Company's exploration and production segment presented in Note 16. | ||||
[2] | Included in "Impairment expense" in the unaudited consolidated statements of operations and in "Impairment expense" for the Company's midstream and marketing segment presented in Note 16. |
Basis of presentation and sig45
Basis of presentation and significant accounting policies - Debt issuance costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||||
Payments for debt issuance costs | $ 0 | $ 6,759 | |||
Total debt issuance costs | $ (20,903) | (20,903) | $ (23,900) | ||
Accumulated amortization | 19,200 | 19,200 | 17,000 | ||
Write-off of debt issuance costs | 842 | $ 0 | 842 | 0 | |
Remaining 2,016 | 2,092 | 2,092 | |||
2,017 | 4,238 | 4,238 | |||
2,018 | 4,068 | 4,068 | |||
2,019 | 2,915 | 2,915 | |||
2,020 | 3,005 | 3,005 | |||
Thereafter | 4,585 | 4,585 | |||
Total | $ (20,903) | $ (20,903) | $ (23,900) | ||
Senior Notes | January 2019 Notes Issued January 2011 | |||||
Debt Instrument [Line Items] | |||||
Write-off of debt issuance costs | $ 6,600 |
Basis of presentation and sig46
Basis of presentation and significant accounting policies - Other current assets and liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | |
Total other current assets | |||
Inventory | [1] | $ 6,986 | $ 6,974 |
Prepaid expenses and other | 7,459 | 7,600 | |
Total other current assets | 14,445 | 14,574 | |
Total other current liabilities | |||
Accrued interest payable | 24,161 | 24,208 | |
Costs of purchased oil payable | 15,629 | 12,189 | |
Lease operating expense payable | 11,570 | 13,205 | |
Accrued compensation and benefits | 8,720 | 14,342 | |
Capital contribution payable to equity method investee | [2] | 0 | 27,583 |
Other accrued liabilities | 12,440 | 14,695 | |
Total other current liabilities | $ 72,520 | $ 106,222 | |
[1] | See Note 2.g for discussion of inventory held by the Company. | ||
[2] | (1)See Notes 14 and 15 for additional discussion regarding our equity method investee. |
Basis of presentation and sig47
Basis of presentation and significant accounting policies - Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | ||
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||||||
Liability at beginning of period | $ 46,306 | $ 32,198 | $ 32,198 | |||
Liabilities added due to acquisitions, drilling, midstream service asset construction and other | 253 | 2,236 | ||||
Accretion expense | $ 860 | $ 593 | 1,704 | $ 1,172 | 2,423 | |
Liabilities settled upon plugging and abandonment | (526) | (146) | ||||
Liabilities removed due to sale of property | 0 | (2,005) | ||||
Revision of estimates | [1] | 0 | 11,600 | |||
Liability at end of period | $ 47,737 | $ 47,737 | $ 46,306 | |||
[1] | The revision of estimates that occurred during the year ended December 31, 2015 is mainly related to a change in the estimated remaining life per well due to the decline in commodity prices. |
Basis of presentation and sig48
Basis of presentation and significant accounting policies - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | ||
Non-cash investing information: | |||
Change in accrued capital expenditures | $ (22,012) | $ (53,209) | |
Change in accrued capital contribution to equity method investee | [1] | (27,583) | 27,917 |
Capitalized asset retirement cost | 253 | 1,402 | |
Supplemental cash flow information: | |||
Capitalized interest | $ 115 | $ 178 | |
[1] | See Notes 14 and 15 for additional discussion regarding our equity method investee. |
Equity offerings (Details)
Equity offerings (Details) - USD ($) $ in Thousands | May 16, 2016 | Mar. 05, 2015 | Jun. 30, 2016 | Jun. 30, 2015 |
Class of Stock [Line Items] | ||||
Proceeds from issuance of common stock, net of offering costs | $ 119,300 | $ 754,200 | $ 119,310 | $ 754,163 |
Common Stock | ||||
Class of Stock [Line Items] | ||||
Equity issuance, net of offering costs (in shares) | 10,925,000 | 69,000,000 | ||
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% |
Divestitures (Details)
Divestitures (Details) - Non-strategic Assets $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Sep. 15, 2015USD ($)aproperty | ||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Oil, NGL and natural gas sales | $ 1,970 | $ 4,048 | ||
Expenses | [1] | $ 2,098 | $ 4,710 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Area of land (in acres) | a | 6,060 | |||
Number of properties | property | 123 | |||
Discontinued operation, sale price | $ 65,500 | |||
Discontinued operation, consideration | $ 64,800 | |||
[1] | Expenses include (i) lease operating expense, (ii) production and ad valorem tax expense, (iii) accretion expense and (iv) depletion expense. |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Apr. 06, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | [1] | Jun. 30, 2016 | Jun. 30, 2015 | [2] | Dec. 31, 2015 | Mar. 31, 2015 | Mar. 18, 2015 | Jan. 23, 2014 | Apr. 27, 2012 | Oct. 19, 2011 | Jan. 20, 2011 | |
Debt Instrument [Line Items] | |||||||||||||||
Face amount of debt | $ 1,410,318,000 | $ 1,410,318,000 | $ 1,435,000,000 | ||||||||||||
Loss on early redemption of debt | 0 | $ 31,537,000 | 0 | $ 31,537,000 | |||||||||||
Senior Notes | March 2023 Notes | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate (as a percent) | 6.25% | ||||||||||||||
Face amount of debt | 350,000,000 | 350,000,000 | 350,000,000 | $ 350,000,000 | |||||||||||
Senior Notes | January 2022 Notes | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate (as a percent) | 5.625% | ||||||||||||||
Face amount of debt | 450,000,000 | 450,000,000 | 450,000,000 | $ 450,000,000 | |||||||||||
Senior Notes | May 2022 Notes | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate (as a percent) | 7.375% | ||||||||||||||
Face amount of debt | 500,000,000 | 500,000,000 | 500,000,000 | $ 500,000,000 | |||||||||||
Senior Notes | January 2019 Notes Issued January 2011 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate (as a percent) | 9.50% | ||||||||||||||
Face amount of debt | $ 350,000,000 | ||||||||||||||
Senior Notes | January 2019 Notes Issued October 2011 | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate (as a percent) | 9.50% | ||||||||||||||
Face amount of debt | $ 200,000,000 | ||||||||||||||
Senior Notes | January 2019 Notes | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Repurchased face amount | $ 550,000,000 | ||||||||||||||
Debt instrument, redemption price percentage | 104.75% | ||||||||||||||
Loss on early redemption of debt | $ 31,500,000 | ||||||||||||||
Line of Credit | Senior Secured Credit Facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Maximum borrowing capacity | 2,000,000,000 | 2,000,000,000 | |||||||||||||
Face amount of debt | [3] | 110,318,000 | 110,318,000 | $ 135,000,000 | |||||||||||
Current borrowing capacity | 815,000,000 | 815,000,000 | |||||||||||||
Outstanding amount | 110,300,000 | $ 110,300,000 | |||||||||||||
Credit facility, Interest rate in period (as a percent) | 2.00% | ||||||||||||||
Aggregate elected commitment | 815,000,000 | $ 815,000,000 | |||||||||||||
Letter of Credit | Senior Secured Credit Facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Maximum borrowing capacity | 20,000,000 | 20,000,000 | |||||||||||||
Letters of credit outstanding | $ 0 | $ 0 | $ 0 | ||||||||||||
Minimum | Line of Credit | Senior Secured Credit Facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.375% | ||||||||||||||
Maximum | Line of Credit | Senior Secured Credit Facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.50% | ||||||||||||||
[1] | Loss on early redemption of debt was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2015. | ||||||||||||||
[2] | Loss on early redemption of debt was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2015. | ||||||||||||||
[3] | Debt issuance costs related to our Senior Secured Credit Facility are recorded in "Other assets, net" on the unaudited consolidated balance sheets. |
Debt - Fair value of debt (Deta
Debt - Fair value of debt (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Carrying value | ||
Fair value of debt | ||
Debt | $ 1,410,318 | $ 1,435,000 |
Carrying value | Senior Notes | January 2022 Notes | ||
Fair value of debt | ||
Debt | 450,000 | 450,000 |
Carrying value | Senior Notes | May 2022 Notes | ||
Fair value of debt | ||
Debt | 500,000 | 500,000 |
Carrying value | Senior Notes | March 2023 Notes | ||
Fair value of debt | ||
Debt | 350,000 | 350,000 |
Carrying value | Senior Secured Credit Facility | Line of Credit | ||
Fair value of debt | ||
Debt | 110,318 | 135,000 |
Fair value | ||
Fair value of debt | ||
Debt | 1,388,040 | 1,284,294 |
Fair value | Senior Notes | January 2022 Notes | ||
Fair value of debt | ||
Debt | 426,564 | 388,301 |
Fair value | Senior Notes | May 2022 Notes | ||
Fair value of debt | ||
Debt | 501,250 | 460,000 |
Fair value | Senior Notes | March 2023 Notes | ||
Fair value of debt | ||
Debt | 349,965 | 301,000 |
Fair value | Senior Secured Credit Facility | Line of Credit | ||
Fair value of debt | ||
Debt | $ 110,261 | $ 134,993 |
Debt - Debt issuance costs (Det
Debt - Debt issuance costs (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Mar. 18, 2015 | Jan. 23, 2014 | Apr. 27, 2012 | |
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 1,410,318,000 | $ 1,435,000,000 | ||||
Debt issuance costs, net | (17,441,000) | (18,774,000) | ||||
Long-term debt, net | 1,392,877,000 | 1,416,226,000 | ||||
Senior Notes | January 2022 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | 450,000,000 | 450,000,000 | $ 450,000,000 | |||
Debt issuance costs, net | (5,451,000) | (5,939,000) | ||||
Long-term debt, net | 444,549,000 | 444,061,000 | ||||
Senior Notes | May 2022 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | 500,000,000 | 500,000,000 | $ 500,000,000 | |||
Debt issuance costs, net | (6,624,000) | (7,066,000) | ||||
Long-term debt, net | 493,376,000 | 492,934,000 | ||||
Senior Notes | March 2023 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | 350,000,000 | 350,000,000 | $ 350,000,000 | |||
Debt issuance costs, net | (5,366,000) | (5,769,000) | ||||
Long-term debt, net | 344,634,000 | 344,231,000 | ||||
Senior Secured Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | [1] | 110,318,000 | 135,000,000 | |||
Debt issuance costs, net | [1] | 0 | 0 | |||
Long-term debt, net | [1] | $ 110,318,000 | $ 135,000,000 | |||
[1] | Debt issuance costs related to our Senior Secured Credit Facility are recorded in "Other assets, net" on the unaudited consolidated balance sheets. |
Employee compensation - Employe
Employee compensation - Employee compensation and Restricted stock awards - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2016 | Mar. 31, 2016 | |
Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation not yet recognized | $ 44.3 | |
Stock-based compensation not yet recognized, period for recognition (in years) | 2 years 3 months 4 days | |
Restricted Stock Awards | One Year From Grant Date | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 100.00% | |
Restricted Stock Awards | One Year From Grant Date | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 33.00% | |
Restricted Stock Awards | Two Years From Grant Date | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 33.00% | |
Restricted Stock Awards | Three Years From Grant Date | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 34.00% | |
Restricted Stock Awards | Vesting In Two Years | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 50.00% | |
Restricted Stock Awards | Vesting In Three Years | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 50.00% | |
Restricted Stock Awards | Three Years From Grant Date | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 100.00% | |
Long-Term Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for issuance | 24,350,000 | 10,000,000 |
Employee compensation - Restric
Employee compensation - Restricted Stock Awards - outstanding restricted stock awards (Details) - Restricted Stock Awards shares in Thousands | 6 Months Ended | |
Jun. 30, 2016$ / sharesshares | ||
Restricted stock awards | ||
Outstanding at the beginning of the period (in shares) | shares | 2,539 | |
Granted (in shares) | shares | 2,968 | |
Forfeited (in shares) | shares | (221) | |
Vested (in shares) | shares | (1,124) | [1] |
Outstanding at the end of the period (in shares) | shares | 4,162 | |
Weighted-average grant date fair value (per award) | ||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 15.26 | |
Granted (in dollars per share) | $ / shares | 12.27 | |
Forfeited (in dollars per share) | $ / shares | 15.16 | |
Vested (in dollars per share) | $ / shares | 16.06 | [1] |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 12.92 | |
[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 stock awards. |
Employee compensation - Restr56
Employee compensation - Restricted Stock Option Awards - Narrative (Details) (Details) - Restricted Stock Option Awards $ in Millions | May 25, 2016shares | Apr. 01, 2016shares | Jun. 30, 2016USD ($)anniversaryinstallmentshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Requisite service period of the awards | 4 years | ||
Share-based compensation, not yet recognized, stock options | $ | $ 13.5 | ||
Stock-based compensation not yet recognized, period for recognition (in years) | 2 years 6 months 18 days | ||
Granted (in shares) | 1,016,000 | ||
Share-based compensation, expiration period | 10 years | ||
Expiration period, termination caused by death | 1 year | ||
Expiration period, termination without cause | 90 days | ||
Long-Term Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of installments over which awards vest and are exercisable | installment | 4 | ||
Number of anniversaries over which awards vest and are exercisable | anniversary | 4 | ||
April 1, 2016 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 22,324 | ||
May 25, 2016 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 994,022 |
Employee compensation - Restr57
Employee compensation - Restricted Stock Option Awards - stock option award activity (Details) - Restricted Stock Option Awards - USD ($) $ / shares in Units, shares in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | ||
Restricted stock option awards | |||
Outstanding at the beginning of the period (in shares) | 1,778 | ||
Granted (in shares) | 1,016 | ||
Exercised (in shares) | (6) | ||
Expired or canceled (in shares) | (35) | ||
Forfeited (in shares) | (229) | ||
Outstanding at the end of the period (in shares) | 2,524 | 1,778 | |
Vested and exercisable at end of period (in shares) | [1] | 916 | |
Expected to vest at end of period (in shares) | [2] | 1,600 | |
Weighted-average price (per option) | |||
Outstanding at the beginning of the period (in dollars per share) | $ 17.86 | ||
Granted (in dollars per share) | 4.18 | ||
Exercised (in dollars per share) | 11.93 | ||
Expired or cancelled (in dollars per share) | 22.40 | ||
Forfeited (in dollars per share) | 13.62 | ||
Outstanding at end of the period (in dollars per share) | 12.69 | $ 17.86 | |
Vested and exercisable at end of period (in dollars per share) | [1] | 19.49 | |
Expected to vest at end of period (in dollars per share) | [2] | $ 8.75 | |
Weighted-average remaining contractual term (years) | |||
Outstanding at the beginning of the period | 8 years 22 days | 7 years 10 months 28 days | |
Outstanding at the end of the period | 8 years 22 days | 7 years 10 months 28 days | |
Vested and exercisable at the end of the period | [1] | 6 years 4 months 28 days | |
Expected to vest at end of period | [2] | 9 years 7 days | |
Aggregate intrinsic value of vested and exercisable options | $ 0 | ||
Aggregate intrinsic value of expected to vest options | $ 6,100,000 | ||
[1] | The vested and exercisable options as of June 30, 2016 had no aggregate intrinsic value. | ||
[2] | The restricted stock options expected to vest as of June 30, 2016 had $6.1 million aggregate intrinsic value. |
Employee compensation - Restr58
Employee compensation - Restricted stock option awards assumptions used to estimate the fair value (Details) - Restricted Stock Option Awards - $ / shares | May 25, 2016 | Apr. 01, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | [1] | 1.58% | 1.44% |
Expected option life | [2] | 6 years 3 months | 6 years 3 months |
Expected volatility | [3] | 61.94% | 61.34% |
Fair value per stock option | $ 9.75 | $ 4.44 | |
[1] | United States Treasury yields as of the grant date were utilized for the risk-free interest rate assumption, correlating 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 historical volatility in order to develop the expected volatility. |
Employee compensation - Restr59
Employee compensation - Restricted Stock Option Awards - percentage of options exercisable (Details) - Restricted Stock Option Awards | 6 Months Ended |
Jun. 30, 2016 | |
Less than one | |
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 | |
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 | |
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 | |
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 | |
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 - Perform
Employee compensation - Performance Share Awards - Narrative (Details) - Performance Share Awards - USD ($) $ in Millions | May 25, 2016 | Apr. 01, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Requisite service period of the awards | 3 years | |||
Outstanding shares | 2,428,000 | 874,000 | ||
Granted (in shares) | 1,801,000 | |||
Stock-based compensation not yet recognized | $ 35.3 | |||
Stock-based compensation not yet recognized, period for recognition | 2 years 5 months 19 days | |||
April 1, 2016 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 32,495 | |||
May 25, 2016 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 1,768,297 | |||
2016 Performance Share Awards | April 1, 2016 and May 25, 2016 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding shares | 1,742,469 | |||
2015 Performance Share Awards | February 27, 2015 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding shares | 475,518 | |||
2014 Performance Share Awards | February 27, 2014 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding shares | 210,126 |
Employee compensation - Perfo61
Employee compensation - Performance Share Awards - award activity (Details) - Performance Share Awards - $ / shares shares in Thousands | May 25, 2016 | Apr. 01, 2016 | Jun. 30, 2016 | |
Performance share awards | ||||
Outstanding at the beginning of the period (in shares) | 874 | |||
Granted (in shares) | 1,801 | |||
Forfeited (in shares) | (247) | |||
Vested (in shares) | 0 | |||
Outstanding at the end of the period (in shares) | 2,428 | |||
Weighted-average grant date fair value (per award) | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 20.06 | |||
Granted (in dollars per share) | $ 17.86 | $ 9.83 | 17.71 | |
Forfeited (in dollars per share) | 19.69 | |||
Vested (in dollars per share) | [1] | 0 | ||
Outstanding at the end of the period (in dollars per share) | $ 18.36 | |||
[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 stock awards. |
Employee compensation - Perfo62
Employee compensation - Performance share awards assumptions used to estimate the fair value (Details) - Performance Share Awards - $ / shares | May 25, 2016 | Apr. 01, 2016 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate | [1] | 1.02% | 0.87% | |
Dividend yield | 0.00% | 0.00% | ||
Expected volatility | [2] | 74.73% | 71.54% | |
Share Price | $ 12.36 | $ 7.71 | ||
Granted (in dollars per share) | $ 17.86 | $ 9.83 | $ 17.71 | |
[1] | The risk-free rate was derived using a term-matched zero-coupon yield derived from the Treasury Constant Maturities yield curve on the grant date. | |||
[2] | The Company utilized its own historical volatility over a lookback period equal to the length of the remaining performance period from the grant date in order to develop the expected volatility. |
Employee compensation - Stock-b
Employee compensation - Stock-based Compensation Award Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation, gross | $ 7,062 | $ 7,177 | $ 11,682 | $ 11,680 |
Less amounts capitalized in oil and natural gas properties | (989) | (909) | (1,771) | (624) |
Total stock-based compensation, net of amounts capitalized | 6,073 | 6,268 | 9,911 | 11,056 |
Restricted Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation, gross | 4,692 | 4,520 | 8,460 | 7,458 |
Restricted Stock Option Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation, gross | 777 | 1,279 | 1,401 | 1,949 |
Restricted Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation, gross | $ 1,593 | $ 1,378 | $ 1,821 | $ 2,273 |
Employee compensation - Perfo64
Employee compensation - Performance unit awards - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Net stock-based compensation expense | $ 6,073 | $ 6,268 | $ 9,911 | $ 11,056 | ||
Performance Unit Awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Equity instruments other than options, cash paid per unit (in dollars per share) | $ 143.75 | $ 100 | ||||
Net stock-based compensation expense | $ 700 | $ 1,700 | ||||
February 15, 2013 | Performance Unit Awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vested (in shares) | 44,481 | |||||
February 3, 2012 | Performance Unit Awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vested (in shares) | 27,381 |
Income taxes - Current and defe
Income taxes - Current and deferred income tax benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Current taxes | $ 0 | $ 0 | $ 0 | $ 0 |
Deferred taxes | 0 | 221,846 | 0 | 218,203 |
Income tax benefit | $ 0 | $ 221,846 | $ 0 | $ 218,203 |
Income taxes - Reconciliation o
Income taxes - Reconciliation of income tax benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Effective Income Tax Rate Reconciliation, Percent | 36.00% | 35.00% | ||
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||||
Income tax benefit computed by applying the statutory rate | $ 25,001 | $ 216,608 | $ 88,131 | $ 215,498 |
State income tax and change in valuation allowance | (541) | 5,776 | 187 | 5,867 |
Non-deductible stock-based compensation | 0 | (15) | 0 | (106) |
Stock-based compensation tax deficiency | (190) | (381) | (4,012) | (2,838) |
Increase in deferred tax valuation allowance | (24,323) | (11) | (84,218) | (16) |
Other items | 53 | (131) | (88) | (202) |
Income tax benefit | $ 0 | $ 221,846 | $ 0 | $ 218,203 |
Income taxes - Tax impact of sh
Income taxes - Tax impact of shortfalls (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Deferred income tax stock-based compensation tax deficiency | $ (192) | $ (388) | $ (4,067) | $ (2,889) |
Restricted Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Deferred income tax stock-based compensation tax deficiency | (182) | (388) | (4,057) | (2,889) |
Restricted Stock Option Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Deferred income tax stock-based compensation tax deficiency | $ (10) | $ 0 | $ (10) | $ 0 |
Income taxes - Deferred tax ass
Income taxes - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Significant components of deferred tax assets (liabilities) | ||
Oil and natural gas properties, midstream service assets and other fixed assets | $ 282,612 | $ 306,997 |
Net operating loss carry-forward | 528,625 | 479,022 |
Derivatives | (41,577) | (98,675) |
Stock-based compensation | 9,340 | 11,597 |
Equity method investee | (25,612) | (31,711) |
Accrued bonus | 2,544 | 4,763 |
Capitalized interest | 2,173 | 2,525 |
Other | 2,901 | 2,820 |
Net deferred tax asset before valuation allowance | 761,006 | 677,338 |
Valuation allowance | (761,006) | (677,338) |
Net deferred tax asset | $ 0 | $ 0 |
Income taxes - Additional Infor
Income taxes - Additional Information (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Potential adjustments to additional paid in capital for income tax benefit from share-based compensation | $ 4,500,000 | ||
Operating loss carry-forward | |||
Deferred tax assets, valuation allowance | 761,006,000 | $ 677,338,000 | |
Unrecognized tax benefits | $ 0 | 0 | |
Effective income tax rate, federal (percent) | 35.00% | 35.00% | |
Valuation allowance adjustment | $ 83,700,000 | $ 676,000,000 | |
Internal Revenue Service (IRS) | Federal | |||
Operating loss carry-forward | |||
Operating Loss Carryforwards | 1,500,000,000 | ||
State of Oklahoma | State | |||
Operating loss carry-forward | |||
Operating Loss Carryforwards | $ 41,000,000 |
Derivatives - Commodity Derivat
Derivatives - Commodity Derivatives (Details) - Derivatives not designated as hedges $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016USD ($)contract | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)contract | Jun. 30, 2015USD ($) | ||
Derivative [Line Items] | |||||
Number of open derivative contracts | contract | 25 | 25 | |||
Crude Oil | |||||
Derivative [Line Items] | |||||
Number of restructuring derivatives | contract | 2 | ||||
Commodity derivatives | |||||
Derivative [Line Items] | |||||
Termination amount | $ | [1] | $ 0 | $ 0 | $ 80,000 | $ 0 |
Commodity derivatives | Crude Oil | |||||
Derivative [Line Items] | |||||
Termination amount | $ | $ 80,000 | ||||
[1] | The settlements amount for the six months ended June 30, 2016 includes $4.0 million in deferred premiums which were settled net with the early terminated contracts from which they derive. |
Derivatives - Commodity deriv71
Derivatives - Commodity derivative contracts' collar floors terminated (Details) - January 2017 - December 2017 - Derivatives not designated as hedges - Early Contract Termination - Crude Oil | Jun. 30, 2016bbl$ / bbl |
Derivative [Line Items] | |
Aggregate volumes (Bbl) | bbl | 2,263,000 |
Floor Price (dollars per Bbl) | $ / bbl | 80 |
Derivatives - Commodity deriv72
Derivatives - Commodity derivative contracts' collar floors entered into (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016USD ($)bblMMBTU$ / bbl$ / MMBTU | Jun. 30, 2015USD ($) | ||
Derivative [Line Items] | |||
Cash premiums paid for derivatives | $ | $ 84,263 | $ 2,670 | |
Put Option January 2017 to December 2017 | Crude Oil | |||
Derivative [Line Items] | |||
Aggregate volumes (Bbl and MMBtu) | bbl | [1] | 2,263,000 | |
Floor Price (dollars per Bbl and MMBtu) | $ / bbl | [1] | 60 | |
Cash premiums paid for derivatives | $ | $ 40,000 | ||
Put Option January 2017 to December 2017 | Natural Gas | |||
Derivative [Line Items] | |||
Aggregate volumes (Bbl and MMBtu) | MMBTU | [2] | 8,040,000 | |
Floor Price (dollars per Bbl and MMBtu) | [2] | 2.50 | |
Put Option January 2017 to December 2018 | Crude Oil | |||
Derivative [Line Items] | |||
Aggregate volumes (Bbl and MMBtu) | bbl | [3] | 2,098,750 | |
Floor Price (dollars per Bbl and MMBtu) | $ / bbl | [3] | 60 | |
Cash premiums paid for derivatives | $ | $ 40,000 | ||
Put Option May 2016 to December 2016 | Crude Oil | |||
Derivative [Line Items] | |||
Aggregate volumes (Bbl and MMBtu) | bbl | [4] | 600,000 | |
Floor Price (dollars per Bbl and MMBtu) | $ / bbl | [4] | 40 | |
Derivative, deferred premium | $ | $ 1,200 | ||
Swap January 2018 to December 2018 | Crude Oil | |||
Derivative [Line Items] | |||
Aggregate volumes (Bbl and MMBtu) | bbl | 1,095,000 | ||
Floor Price (dollars per Bbl and MMBtu) | $ / bbl | 52.12 | ||
Put Option January 2018 to December 2018 | Natural Gas | |||
Derivative [Line Items] | |||
Aggregate volumes (Bbl and MMBtu) | MMBTU | [2] | 8,220,000 | |
Floor Price (dollars per Bbl and MMBtu) | [2] | 2.50 | |
Collar January 2017 - December 2017 | Natural Gas | |||
Derivative [Line Items] | |||
Aggregate volumes (Bbl and MMBtu) | MMBTU | [2] | 5,256,000 | |
Floor Price (dollars per Bbl and MMBtu) | [2] | 2.50 | |
Ceiling price (dollars per MMBtu) | [2] | 3.05 | |
Collar January 2018 - December 2018 | Natural Gas | |||
Derivative [Line Items] | |||
Aggregate volumes (Bbl and MMBtu) | MMBTU | [2] | 4,635,500 | |
Floor Price (dollars per Bbl and MMBtu) | [2] | 2.50 | |
Ceiling price (dollars per MMBtu) | [2] | 3.60 | |
Put Option and Collars January 2017 and 2018 to December 2017 and 2018 | Natural Gas | |||
Derivative [Line Items] | |||
Derivative, deferred premium | $ | $ 5,100 | ||
[1] | As part of the Company's hedge restructuring, this put replaced the early terminated put portion of the restructured derivative contract collars. A premium of $40.0 million was paid at contract inception. | ||
[2] | There are $5.1 million in deferred premiums associated with these contracts. | ||
[3] | As part of the Company's hedge restructuring, a premium of $40.0 million was paid at contract inception. | ||
[4] | There are $1.2 million in deferred premiums associated with this contract. |
Derivatives - Gain (loss) on de
Derivatives - Gain (loss) on derivatives (Details) - Derivatives not designated as hedges - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Commodity derivatives | |||||
Derivative financial instruments | |||||
Cash settlements received for matured derivatives, net | $ 47,382 | $ 46,596 | $ 113,319 | $ 109,737 | |
Cash settlements received for early terminations of derivatives, net | [1] | 0 | 0 | 80,000 | 0 |
Deferred premium | 4,000 | ||||
Derivative | |||||
Derivative financial instruments | |||||
Cash settlements received for derivatives, net | $ 47,382 | $ 46,596 | $ 193,319 | $ 109,737 | |
[1] | The settlements amount for the six months ended June 30, 2016 includes $4.0 million in deferred premiums which were settled net with the early terminated contracts from which they derive. |
Derivatives - Derivative positi
Derivatives - Derivative positions (Details) - Derivatives not designated as hedges | 6 Months Ended |
Jun. 30, 2016MMBTU$ / bbl$ / MMBTUbbl | |
Puts 2016 | Crude Oil | Puts | |
Derivative [Line Items] | |
Hedged Volume (Bbl) | bbl | 1,098,000 |
Weighted-average price (Bbl/MMbtu) | 42.95 |
Puts 2016 | Natural Gas | Puts | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | $ / MMBTU | 0 |
Hedged Volume (MMbtu) | MMBTU | 0 |
Puts 2017 | Crude Oil | Puts | |
Derivative [Line Items] | |
Hedged Volume (Bbl) | bbl | 1,049,375 |
Weighted-average price (Bbl/MMbtu) | 60 |
Puts 2017 | Natural Gas | Puts | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | $ / MMBTU | 2.50 |
Hedged Volume (MMbtu) | MMBTU | 8,040,000 |
Puts 2018 | Crude Oil | Puts | |
Derivative [Line Items] | |
Hedged Volume (Bbl) | bbl | 1,049,375 |
Weighted-average price (Bbl/MMbtu) | 60 |
Puts 2018 | Natural Gas | Puts | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | $ / MMBTU | 2.50 |
Hedged Volume (MMbtu) | MMBTU | 8,220,000 |
Swaps 2016 | Crude Oil | Swaps | |
Derivative [Line Items] | |
Hedged Volume (Bbl) | bbl | 791,200 |
Weighted-average price (Bbl/MMbtu) | 84.82 |
Swaps 2018 | Crude Oil | Swaps | |
Derivative [Line Items] | |
Hedged Volume (Bbl) | bbl | 1,095,000 |
Weighted-average price (Bbl/MMbtu) | 52.12 |
Collars 2016 | Crude Oil | Collars | |
Derivative [Line Items] | |
Hedged Volume (Bbl) | bbl | 1,833,500 |
Collars 2016 | Natural Gas | Collars | |
Derivative [Line Items] | |
Hedged Volume (MMbtu) | MMBTU | 9,384,000 |
Collars 2016 | Floor | Crude Oil | Collars | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | 73.98 |
Collars 2016 | Floor | Natural Gas | Collars | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | $ / MMBTU | 3 |
Collars 2016 | Ceiling | Crude Oil | Collars | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | 89.62 |
Collars 2016 | Ceiling | Natural Gas | Collars | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | $ / MMBTU | 5.60 |
Collars 2017 | Crude Oil | Collars | |
Derivative [Line Items] | |
Hedged Volume (Bbl) | bbl | 2,628,000 |
Collars 2017 | Natural Gas | Collars | |
Derivative [Line Items] | |
Hedged Volume (MMbtu) | MMBTU | 10,731,000 |
Collars 2017 | Floor | Crude Oil | Collars | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | 60 |
Collars 2017 | Floor | Natural Gas | Collars | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | $ / MMBTU | 2.76 |
Collars 2017 | Ceiling | Crude Oil | Collars | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | 97.22 |
Collars 2017 | Ceiling | Natural Gas | Collars | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | $ / MMBTU | 3.53 |
Collars 2018 | Crude Oil | Collars | |
Derivative [Line Items] | |
Hedged Volume (Bbl) | bbl | 0 |
Collars 2018 | Natural Gas | Collars | |
Derivative [Line Items] | |
Hedged Volume (MMbtu) | MMBTU | 4,635,500 |
Collars 2018 | Floor | Crude Oil | Collars | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | 0 |
Collars 2018 | Floor | Natural Gas | Collars | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | $ / MMBTU | 2.50 |
Collars 2018 | Ceiling | Crude Oil | Collars | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | 0 |
Collars 2018 | Ceiling | Natural Gas | Collars | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | $ / MMBTU | 3.60 |
Total Commodity Derivatives 2016 | Floor | Crude Oil | |
Derivative [Line Items] | |
Hedged Volume (Bbl) | bbl | 3,722,700 |
Weighted-average price (Bbl/MMbtu) | 67.13 |
Total Commodity Derivatives 2016 | Floor | Natural Gas | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | $ / MMBTU | 3 |
Hedged Volume (MMbtu) | MMBTU | 9,384,000 |
Total Commodity Derivatives 2016 | Ceiling | Crude Oil | |
Derivative [Line Items] | |
Hedged Volume (Bbl) | bbl | 2,624,700 |
Weighted-average price (Bbl/MMbtu) | 88.18 |
Total Commodity Derivatives 2016 | Ceiling | Natural Gas | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | $ / MMBTU | 5.60 |
Hedged Volume (MMbtu) | MMBTU | 9,384,000 |
Total Commodity Derivatives 2017 | Floor | Crude Oil | |
Derivative [Line Items] | |
Hedged Volume (Bbl) | bbl | 3,677,375 |
Weighted-average price (Bbl/MMbtu) | 60 |
Total Commodity Derivatives 2017 | Floor | Natural Gas | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | $ / MMBTU | 2.65 |
Hedged Volume (MMbtu) | MMBTU | 18,771,000 |
Total Commodity Derivatives 2017 | Ceiling | Crude Oil | |
Derivative [Line Items] | |
Hedged Volume (Bbl) | bbl | 2,628,000 |
Weighted-average price (Bbl/MMbtu) | 97.22 |
Total Commodity Derivatives 2017 | Ceiling | Natural Gas | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | $ / MMBTU | 3.53 |
Hedged Volume (MMbtu) | MMBTU | 10,731,000 |
Total Commodity Derivatives 2018 | Floor | Crude Oil | |
Derivative [Line Items] | |
Hedged Volume (Bbl) | bbl | 2,144,375 |
Weighted-average price (Bbl/MMbtu) | 55.98 |
Total Commodity Derivatives 2018 | Floor | Natural Gas | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | $ / MMBTU | 2.50 |
Hedged Volume (MMbtu) | MMBTU | 12,855,500 |
Total Commodity Derivatives 2018 | Ceiling | Crude Oil | |
Derivative [Line Items] | |
Hedged Volume (Bbl) | bbl | 1,095,000 |
Weighted-average price (Bbl/MMbtu) | 52.12 |
Total Commodity Derivatives 2018 | Ceiling | Natural Gas | |
Derivative [Line Items] | |
Weighted-average price (Bbl/MMbtu) | $ / MMBTU | 3.60 |
Hedged Volume (MMbtu) | MMBTU | 4,635,500 |
Fair value measurements - Fair
Fair value measurements - Fair value hierarchy (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Assets, Fair Value Disclosure [Abstract] | ||
Derivative asset, current | $ 88,965 | $ 198,805 |
Derivative asset, noncurrent | 32,680 | 77,443 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liability, current | (1,480) | 0 |
Derivative liability, noncurrent | (3,740) | 0 |
Recurring | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Net derivative position | 116,425 | 276,248 |
Recurring | Crude Oil | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative asset, current | 92,542 | 194,940 |
Derivative asset, noncurrent | 33,181 | 80,302 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liability, current | 515 | 0 |
Derivative liability, noncurrent | (1,820) | 0 |
Recurring | Crude Oil | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative asset, current | (5,467) | (9,301) |
Derivative asset, noncurrent | (501) | (4,877) |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liability, current | (1,317) | 0 |
Derivative liability, noncurrent | 0 | 0 |
Recurring | Natural Gas | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative asset, current | 2,293 | 13,166 |
Derivative asset, noncurrent | 0 | 2,459 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liability, current | 426 | 0 |
Derivative liability, noncurrent | 1,950 | 0 |
Recurring | Natural Gas | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative asset, current | (403) | 0 |
Derivative asset, noncurrent | 0 | (441) |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liability, current | (1,104) | 0 |
Derivative liability, noncurrent | (3,870) | 0 |
Recurring | Current Assets | Crude Oil | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Amounts offset | (515) | 0 |
Recurring | Current Assets | Crude Oil | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Amounts offset | (5,467) | (9,301) |
Recurring | Current Assets | Natural Gas | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Amounts offset | (1,165) | 0 |
Recurring | Current Assets | Natural Gas | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Amounts offset | (403) | 0 |
Recurring | Noncurrent Assets | Crude Oil | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Amounts offset | 0 | 0 |
Recurring | Noncurrent Assets | Crude Oil | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Amounts offset | (501) | (4,877) |
Recurring | Noncurrent Assets | Natural Gas | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Amounts offset | (2,724) | 0 |
Recurring | Noncurrent Assets | Natural Gas | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Amounts offset | 0 | (441) |
Recurring | Current Liabilities | Crude Oil | Oil derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Amount offset | 515 | 0 |
Recurring | Current Liabilities | Crude Oil | Oil deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Amount offset | 5,467 | 9,301 |
Recurring | Current Liabilities | Natural Gas | Natural gas derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Amount offset | 1,165 | 0 |
Recurring | Current Liabilities | Natural Gas | Natural gas deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Amount offset | 403 | 0 |
Recurring | Noncurrent Liabilities | Crude Oil | Oil derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Amount offset | 0 | 0 |
Recurring | Noncurrent Liabilities | Crude Oil | Oil deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Amount offset | 501 | 4,877 |
Recurring | Noncurrent Liabilities | Natural Gas | Natural gas derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Amount offset | 2,724 | 0 |
Recurring | Noncurrent Liabilities | Natural Gas | Natural gas deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Amount offset | 0 | 441 |
Recurring | Fair value | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Net derivative position | 116,425 | 276,248 |
Recurring | Fair value | Current Assets | Crude Oil | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 93,057 | 194,940 |
Recurring | Fair value | Current Assets | Crude Oil | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Fair value | Current Assets | Natural Gas | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 3,458 | 13,166 |
Recurring | Fair value | Current Assets | Natural Gas | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Fair value | Noncurrent Assets | Crude Oil | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 33,181 | 80,302 |
Recurring | Fair value | Noncurrent Assets | Crude Oil | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Fair value | Noncurrent Assets | Natural Gas | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 2,724 | 2,459 |
Recurring | Fair value | Noncurrent Assets | Natural Gas | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Fair value | Current Liabilities | Crude Oil | Oil derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Fair value | Current Liabilities | Crude Oil | Oil deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | (6,784) | (9,301) |
Recurring | Fair value | Current Liabilities | Natural Gas | Natural gas derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | (739) | 0 |
Recurring | Fair value | Current Liabilities | Natural Gas | Natural gas deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | (1,507) | 0 |
Recurring | Fair value | Noncurrent Liabilities | Crude Oil | Oil derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | (1,820) | 0 |
Recurring | Fair value | Noncurrent Liabilities | Crude Oil | Oil deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | (501) | (4,877) |
Recurring | Fair value | Noncurrent Liabilities | Natural Gas | Natural gas derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | (774) | 0 |
Recurring | Fair value | Noncurrent Liabilities | Natural Gas | Natural gas deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | (3,870) | (441) |
Recurring | Level 1 | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Net derivative position | 0 | 0 |
Recurring | Level 1 | Current Assets | Crude Oil | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 1 | Current Assets | Crude Oil | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 1 | Current Assets | Natural Gas | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 1 | Current Assets | Natural Gas | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 1 | Noncurrent Assets | Crude Oil | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 1 | Noncurrent Assets | Crude Oil | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 1 | Noncurrent Assets | Natural Gas | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 1 | Noncurrent Assets | Natural Gas | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 1 | Current Liabilities | Crude Oil | Oil derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 1 | Current Liabilities | Crude Oil | Oil deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 1 | Current Liabilities | Natural Gas | Natural gas derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 1 | Current Liabilities | Natural Gas | Natural gas deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 1 | Noncurrent Liabilities | Crude Oil | Oil derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 1 | Noncurrent Liabilities | Crude Oil | Oil deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 1 | Noncurrent Liabilities | Natural Gas | Natural gas derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 1 | Noncurrent Liabilities | Natural Gas | Natural gas deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 2 | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Net derivative position | 129,087 | 290,867 |
Recurring | Level 2 | Current Assets | Crude Oil | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 93,057 | 194,940 |
Recurring | Level 2 | Current Assets | Crude Oil | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 2 | Current Assets | Natural Gas | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 3,458 | 13,166 |
Recurring | Level 2 | Current Assets | Natural Gas | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 2 | Noncurrent Assets | Crude Oil | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 33,181 | 80,302 |
Recurring | Level 2 | Noncurrent Assets | Crude Oil | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 2 | Noncurrent Assets | Natural Gas | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 2,724 | 2,459 |
Recurring | Level 2 | Noncurrent Assets | Natural Gas | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 2 | Current Liabilities | Crude Oil | Oil derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 2 | Current Liabilities | Crude Oil | Oil deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 2 | Current Liabilities | Natural Gas | Natural gas derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | (739) | 0 |
Recurring | Level 2 | Current Liabilities | Natural Gas | Natural gas deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 2 | Noncurrent Liabilities | Crude Oil | Oil derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | (1,820) | 0 |
Recurring | Level 2 | Noncurrent Liabilities | Crude Oil | Oil deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 2 | Noncurrent Liabilities | Natural Gas | Natural gas derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | (774) | 0 |
Recurring | Level 2 | Noncurrent Liabilities | Natural Gas | Natural gas deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 3 | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Net derivative position | (12,662) | (14,619) |
Recurring | Level 3 | Current Assets | Crude Oil | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 3 | Current Assets | Crude Oil | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 3 | Current Assets | Natural Gas | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 3 | Current Assets | Natural Gas | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 3 | Noncurrent Assets | Crude Oil | Oil derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 3 | Noncurrent Assets | Crude Oil | Oil deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 3 | Noncurrent Assets | Natural Gas | Natural gas derivatives | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 3 | Noncurrent Assets | Natural Gas | Natural gas deferred premiums | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative assets before netting | 0 | 0 |
Recurring | Level 3 | Current Liabilities | Crude Oil | Oil derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 3 | Current Liabilities | Crude Oil | Oil deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | (6,784) | (9,301) |
Recurring | Level 3 | Current Liabilities | Natural Gas | Natural gas derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 3 | Current Liabilities | Natural Gas | Natural gas deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | (1,507) | 0 |
Recurring | Level 3 | Noncurrent Liabilities | Crude Oil | Oil derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 3 | Noncurrent Liabilities | Crude Oil | Oil deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | (501) | (4,877) |
Recurring | Level 3 | Noncurrent Liabilities | Natural Gas | Natural gas derivatives | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | 0 | 0 |
Recurring | Level 3 | Noncurrent Liabilities | Natural Gas | Natural gas deferred premiums | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities before netting | $ (3,870) | $ (441) |
Fair value measurements - Narra
Fair value measurements - Narrative (Details) - Recurring - Level 3 - Commodity derivatives | 6 Months Ended |
Jun. 30, 2016 | |
Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Discount rate (as a percent) | 1.69% |
Maximum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Discount rate (as a percent) | 3.56% |
Fair value measurements - Cash
Fair value measurements - Cash payments required for deferred premium contracts (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Fair Value Disclosures [Abstract] | |
Remaining 2,016 | $ 5,407 |
2,017 | 5,354 |
2,018 | 2,100 |
Total | $ 12,861 |
Fair value measurements - Summa
Fair value measurements - Summary of changes in assets (liabilities) classified as Level 3 (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |||
Changes in assets classified as Level 3 measurements | ||||||
Change in net present value of deferred premiums for derivatives | $ 133 | $ 88 | ||||
Deferred Premiums | ||||||
Changes in assets classified as Level 3 measurements | ||||||
Balance of Level 3 at beginning of period | $ (13,054) | $ (8,882) | (14,619) | (9,285) | ||
Change in net present value of deferred premiums for derivatives | (61) | (45) | (133) | (88) | ||
Purchases | (1,960) | (4,409) | (6,072) | (5,384) | ||
Settlements | 2,413 | 1,249 | 8,162 | [1] | 2,670 | |
Balance of Level 3 at end of period | $ (12,662) | $ (12,087) | (12,662) | $ (12,087) | ||
Restructuring Upon Early Termination | Deferred Premiums | ||||||
Changes in assets classified as Level 3 measurements | ||||||
Settlements | [1] | $ 3,900 | ||||
[1] | The amount for the six months ended June 30, 2016 includes $3.9 million which represents the present value of deferred premiums settled in the Company's restructuring upon their early termination. |
Net loss per share (Details)
Net loss per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | ||||
Net loss—basic and diluted | $ (71,432) | $ (397,034) | $ (251,803) | $ (397,506) |
Weighted-average common shares outstanding-basic (in shares) | 217,564 | 211,078 | 214,562 | 186,886 |
Weighted-average common shares outstanding-diluted (in shares) | 217,564 | 211,078 | 214,562 | 186,886 |
Net loss per share-basic (in dollars per share) | $ (0.33) | $ (1.88) | $ (1.17) | $ (2.13) |
Net loss per share-diluted (in dollars per share) | $ (0.33) | $ (1.88) | $ (1.17) | $ (2.13) |
Commitments and contingencies (
Commitments and contingencies (Details) $ in Millions | Jun. 30, 2016USD ($) |
Drilling Contracts | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Future commitments | $ 3 |
Firm Sale And Transportation Commitments | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Future commitments | $ 400.2 |
Restructuring (Details)
Restructuring (Details) $ in Thousands | Jan. 20, 2015employee | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring expenses | $ | $ 0 | $ 0 | $ 0 | $ 6,042 | |
Reduction in Force (RIF) | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring expenses | $ | $ 0 | $ 6,000 | |||
Workforce Reduction | Reduction in Force (RIF) | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected number of positions eliminated | employee | 75 | ||||
Contract Termination | Reduction in Force (RIF) | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected number of positions eliminated | employee | 24 |
Variable interest entity (Detai
Variable interest entity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Schedule of Equity Method Investments [Line Items] | ||||
Contributions to equity method investee | $ 42,681 | $ 14,495 | ||
Minimum volume commitments | $ 0 | $ 3,579 | 0 | 5,235 |
Medallion Gathering And Processing LLC | Variable Interest Entity, Not Primary Beneficiary | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Contributions to equity method investee | $ 16,000 | $ 42,700 | $ 14,500 | |
Ownership percentage | 49.00% | 49.00% | ||
Equity method investment ownership percentage held by investment partner | 51.00% | 51.00% | ||
Voting percentage required for key decisions | 75.00% | |||
Minimum volume commitments | $ 3,000 |
Related Parties - Consolidated
Related Parties - Consolidated Statement of Operations related to Medallion (Details) - Equity Method Investee - Medallion Gathering And Processing LLC - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Midstream service revenues | ||||
Related Party Transaction [Line Items] | ||||
Related party revenues | $ 0 | $ 390 | $ 0 | $ 487 |
Minimum volume commitments | ||||
Related Party Transaction [Line Items] | ||||
Lease operating expenses | 0 | 3,579 | 0 | 5,235 |
Interest and other income | ||||
Related Party Transaction [Line Items] | ||||
Related party revenues | $ 0 | $ 0 | $ 0 | $ 108 |
Related Parties - Balance Sheet
Related Parties - Balance Sheet related to Medallion (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||
Accounts receivable, net | $ 88,543 | $ 87,699 | |
Equity Method Investee | Medallion Gathering And Processing LLC | |||
Related Party Transaction [Line Items] | |||
Accounts receivable, net | 0 | 1,163 | |
Equity Method Investee | Medallion Gathering And Processing LLC | Other assets, net | |||
Related Party Transaction [Line Items] | |||
Related party assets and liabilities | [1] | 1,025 | 1,025 |
Equity Method Investee | Medallion Gathering And Processing LLC | Other current liabilities | |||
Related Party Transaction [Line Items] | |||
Related party assets and liabilities | [2] | $ (102) | $ (27,583) |
[1] | (1)Amounts included in "Other assets, net" above represent LMS owned line-fill in Medallion's pipeline. | ||
[2] | (2)Amounts included in "Other current liabilities" above represent LMS' accrued line-fill purchase in Medallion's pipeline as of June 30, 2016 and capital contribution payable to Medallion as of December 31, 2015. |
Related Parties - Consolidate85
Related Parties - Consolidated Statement of Operations related to Targa Resources (Details) - Affiliated Entity - Targa Resources Corp. - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Oil, NGL and natural gas sales | ||||
Related Party Transaction [Line Items] | ||||
Related party revenues | $ 18,112 | $ 34,012 | $ 35,917 | $ 53,643 |
Midstream service revenues | ||||
Related Party Transaction [Line Items] | ||||
Related party revenues | $ 102 | $ 0 | $ 237 | $ 0 |
Related Parties - Balance She86
Related Parties - Balance Sheet related to Targa Resources (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Affiliated Entity | Targa Resources Corp. | ||
Related Party Transaction [Line Items] | ||
Accounts receivable, net | $ 9,337 | $ 6,097 |
Related Parties - Archrock Part
Related Parties - Archrock Partners, L.P. (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||||
Midstream service assets | $ 3,425 | $ 34,137 | |||
Archrock Partners, L.P. | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Accounts payable | $ 0 | 0 | $ 13 | ||
Archrock Partners, L.P. | Affiliated Entity | Lease Operating Expenses | |||||
Related Party Transaction [Line Items] | |||||
Lease operating expenses | 526 | $ 391 | 1,001 | 776 | |
Archrock Partners, L.P. | Affiliated Entity | Midstream Service Assets Capital Expenditures | |||||
Related Party Transaction [Line Items] | |||||
Midstream service assets | $ 0 | $ 18 | $ 20 | $ 64 |
Related Parties - Helmerich & P
Related Parties - Helmerich & Payne, Inc. (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Related Party Transaction [Line Items] | ||||
Oil and natural gas properties | $ 197,042 | $ 374,508 | ||
Helmerich & Payne, Inc. | Affiliated Entity | Oil and Natural Gas Capital Expenditures | ||||
Related Party Transaction [Line Items] | ||||
Oil and natural gas properties | $ 0 | $ 177 | $ 0 | $ 2,434 |
Segments - Selected financial i
Segments - Selected financial information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||||||
Segment Reporting Information [Line Items] | |||||||||
Oil, NGL and natural gas sales | $ 102,526 | $ 125,554 | $ 175,668 | $ 243,672 | |||||
Midstream service revenues | 1,632 | 1,726 | 3,433 | 3,035 | |||||
Sales of purchased oil | 42,615 | 55,051 | 74,229 | 86,318 | |||||
Total revenues | 146,773 | 182,331 | 253,330 | 333,025 | |||||
Lease operating expenses, including production tax | 27,207 | 38,706 | 54,160 | 80,172 | |||||
Midstream service expenses | 1,178 | 5,176 | 1,787 | 8,406 | |||||
Costs of purchased oil | 44,012 | 54,417 | 76,958 | 85,617 | |||||
General and administrative | 20,502 | [1] | 23,208 | [1] | 39,953 | [2] | 45,063 | [2] | |
Depletion, depreciation and amortization | 34,177 | [3] | 72,112 | [3] | 75,655 | [4] | 144,054 | [4] | |
Impairment expense | 963 | 489,599 | 162,027 | 490,477 | |||||
Other operating costs and expenses | 860 | [5] | 593 | [5] | 1,704 | [6] | 7,214 | [6] | |
Operating income (loss) | 17,874 | (501,480) | (158,914) | (527,978) | |||||
Income from equity method investee | 3,696 | 2,914 | 5,994 | 2,481 | |||||
Interest expense | (23,512) | [7] | (23,970) | [7] | (47,217) | [8] | (56,384) | [8] | |
Loss on early redemption of debt | 0 | (31,537) | [9] | 0 | (31,537) | [10] | |||
Capital expenditures | (93,577) | (147,100) | (201,299) | (415,186) | |||||
Gross property and equipment | [11],[12] | 5,846,670 | 5,427,620 | 5,846,670 | 5,427,620 | ||||
Operating Segments | Exploration and production | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Oil, NGL and natural gas sales | 102,526 | 125,679 | 175,668 | 243,890 | |||||
Midstream service revenues | 0 | 0 | 0 | 0 | |||||
Sales of purchased oil | 0 | 0 | 0 | 0 | |||||
Total revenues | 102,526 | 125,679 | 175,668 | 243,890 | |||||
Lease operating expenses, including production tax | 29,793 | 41,423 | 59,157 | 85,268 | |||||
Midstream service expenses | 0 | 4,399 | 0 | 4,399 | |||||
Costs of purchased oil | 0 | 0 | 0 | 0 | |||||
General and administrative | 18,818 | [1] | 21,347 | [1] | 36,497 | [2] | 41,125 | [2] | |
Depletion, depreciation and amortization | 31,969 | [3] | 69,987 | [3] | 71,261 | [4] | 140,244 | [4] | |
Impairment expense | 963 | 489,599 | 162,027 | 490,366 | |||||
Other operating costs and expenses | 806 | [5] | 548 | [5] | 1,598 | [6] | 6,972 | [6] | |
Operating income (loss) | 20,177 | (501,624) | (154,872) | (524,484) | |||||
Income from equity method investee | 0 | 0 | 0 | 0 | |||||
Interest expense | (22,050) | [7] | (22,845) | [7] | (44,353) | [8] | (53,932) | [8] | |
Loss on early redemption of debt | (30,056) | [9] | (30,056) | [10] | |||||
Capital expenditures | (92,089) | (133,259) | (197,874) | (380,872) | |||||
Gross property and equipment | [11],[12] | 5,484,416 | 5,170,912 | 5,484,416 | 5,170,912 | ||||
Operating Segments | Midstream and marketing | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Oil, NGL and natural gas sales | 0 | 221 | 0 | 333 | |||||
Midstream service revenues | 11,138 | 4,362 | 22,405 | 8,045 | |||||
Sales of purchased oil | 42,615 | 55,051 | 74,229 | 86,318 | |||||
Total revenues | 53,753 | 59,634 | 96,634 | 94,696 | |||||
Lease operating expenses, including production tax | 0 | 0 | 0 | 0 | |||||
Midstream service expenses | 6,572 | 998 | 13,081 | 4,340 | |||||
Costs of purchased oil | 44,012 | 54,417 | 76,958 | 85,617 | |||||
General and administrative | 1,684 | [1] | 1,861 | [1] | 3,456 | [2] | 3,938 | [2] | |
Depletion, depreciation and amortization | 2,208 | [3] | 2,125 | [3] | 4,394 | [4] | 3,810 | [4] | |
Impairment expense | 0 | 0 | 0 | 111 | |||||
Other operating costs and expenses | 54 | [5] | 45 | [5] | 106 | [6] | 242 | [6] | |
Operating income (loss) | (777) | 188 | (1,361) | (3,362) | |||||
Income from equity method investee | 3,696 | 2,914 | 5,994 | 2,481 | |||||
Interest expense | (1,462) | [7] | (1,125) | [7] | (2,864) | [8] | (2,452) | [8] | |
Loss on early redemption of debt | (1,481) | [9] | (1,481) | [10] | |||||
Capital expenditures | (1,488) | (13,841) | (3,425) | (34,314) | |||||
Gross property and equipment | [11],[12] | 366,858 | 257,073 | 366,858 | 257,073 | ||||
Eliminations | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Oil, NGL and natural gas sales | 0 | (346) | 0 | (551) | |||||
Midstream service revenues | (9,506) | (2,636) | (18,972) | (5,010) | |||||
Sales of purchased oil | 0 | 0 | 0 | 0 | |||||
Total revenues | (9,506) | (2,982) | (18,972) | (5,561) | |||||
Lease operating expenses, including production tax | (2,586) | (2,717) | (4,997) | (5,096) | |||||
Midstream service expenses | (5,394) | (221) | (11,294) | (333) | |||||
Costs of purchased oil | 0 | 0 | 0 | 0 | |||||
General and administrative | 0 | [1] | 0 | [1] | 0 | [2] | 0 | [2] | |
Depletion, depreciation and amortization | 0 | [3] | 0 | [3] | 0 | [4] | 0 | [4] | |
Impairment expense | 0 | 0 | 0 | 0 | |||||
Other operating costs and expenses | 0 | [5] | 0 | [5] | 0 | [6] | 0 | [6] | |
Operating income (loss) | (1,526) | (44) | (2,681) | (132) | |||||
Income from equity method investee | 0 | 0 | 0 | 0 | |||||
Interest expense | 0 | [7] | 0 | [7] | 0 | [8] | 0 | [8] | |
Loss on early redemption of debt | 0 | [9] | 0 | [10] | |||||
Capital expenditures | 0 | 0 | 0 | 0 | |||||
Gross property and equipment | [11],[12] | $ (4,604) | $ (365) | $ (4,604) | $ (365) | ||||
[1] | General and administrative expense was allocated based on the number of employees in the respective segment as of June 30, 2016 and 2015. Certain components of general and administrative expense, primarily payroll, deferred compensation and vehicle expenses, were not allocated but were actual expenses for each segment. Land and geology expenses were not allocated to the midstream and marketing segment. | ||||||||
[2] | General and administrative expense was allocated based on the number of employees in the respective segment as of June 30, 2016 and 2015. Certain components of general and administrative expense, primarily payroll, deferred compensation and vehicle expenses, were not allocated but were actual expenses for each segment. Land and geology expenses were not allocated to the midstream and marketing segment. | ||||||||
[3] | Depletion, depreciation and amortization were actual expenses for each segment with the exception of the allocation of depreciation of other fixed assets, which is based on the number of employees in the respective segment as of June 30, 2016 and 2015. | ||||||||
[4] | Depletion, depreciation and amortization were actual expenses for each segment with the exception of the allocation of depreciation of other fixed assets, which is based on the number of employees in the respective segment as of June 30, 2016 and 2015. | ||||||||
[5] | Other operating costs and expenses consist of accretion of asset retirement obligations. These are actual costs and expenses and were not allocated. | ||||||||
[6] | Other operating costs and expenses consist of accretion of asset retirement obligations for the six months ended June 30, 2016 and 2015 and restructuring expense for the six months ended June 30, 2015. These are actual costs and expenses and were not allocated. | ||||||||
[7] | Interest expense was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2016 and 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2016 and 2015. | ||||||||
[8] | Interest expense was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2016 and 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2016 and 2015. | ||||||||
[9] | Loss on early redemption of debt was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2015. | ||||||||
[10] | Loss on early redemption of debt was allocated to the exploration and production segment based on gross property and equipment as of June 30, 2015 and allocated to the midstream and marketing segment based on gross property and equipment and life-to-date contributions to the Company's equity method investee as of June 30, 2015. | ||||||||
[11] | Gross property and equipment for the midstream and marketing segment includes investment in equity method investee totaling $213.6 million and $103.2 million as of June 30, 2016 and 2015, respectively. Other fixed assets were allocated based on the number of employees in the respective segment as of June 30, 2016 and 2015. | ||||||||
[12] | Gross property and equipment for the midstream and marketing segment includes investment in equity method investee totaling $213.6 million and $103.2 million as of June 30, 2016 and 2015, respectively. Other fixed assets were allocated based on the number of employees in the respective segment as of June 30, 2016 and 2015. |
Segments - Additional Informati
Segments - Additional Information (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016USD ($)segment | Dec. 31, 2015USD ($) | Jun. 30, 2015USD ($) | |
Segment Reporting [Abstract] | |||
Number of operating segments | segment | 2 | ||
Investment in equity method investee | $ | $ 213,616 | $ 192,524 | $ 103,200 |
Subsidiary guarantors - Condens
Subsidiary guarantors - Condensed consolidating balance sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Subsidiary guarantees | ||
Accounts receivable, net | $ 88,543 | $ 87,699 |
Other current assets | 122,719 | 244,533 |
Total oil and natural gas properties, net | 975,176 | 1,024,992 |
Total midstream service assets, net | 128,052 | 131,725 |
Total other fixed assets, net | 40,951 | 43,538 |
Investment in subsidiaries and equity method investee | 213,616 | 192,524 |
Total other long-term assets | 41,094 | 88,276 |
Total assets | 1,610,151 | 1,813,287 |
Accounts payable | 14,500 | 14,181 |
Other current liabilities | 139,312 | 202,634 |
Long-term debt, net | 1,392,877 | 1,416,226 |
Other long-term liabilities | 54,300 | 48,799 |
Stockholders' equity | 9,162 | 131,447 |
Total liabilities and stockholders’ equity | 1,610,151 | 1,813,287 |
Intercompany eliminations | ||
Subsidiary guarantees | ||
Accounts receivable, net | 0 | 0 |
Other current assets | 0 | 0 |
Total oil and natural gas properties, net | (4,604) | (1,923) |
Total midstream service assets, net | 0 | 0 |
Total other fixed assets, net | 0 | 0 |
Investment in subsidiaries and equity method investee | (348,623) | (301,891) |
Total other long-term assets | 0 | 0 |
Total assets | (353,227) | (303,814) |
Accounts payable | 0 | 0 |
Other current liabilities | 0 | 0 |
Long-term debt, net | 0 | 0 |
Other long-term liabilities | 0 | 0 |
Stockholders' equity | (353,227) | (303,814) |
Total liabilities and stockholders’ equity | (353,227) | (303,814) |
Laredo | Reportable Legal Entities | ||
Subsidiary guarantees | ||
Accounts receivable, net | 73,429 | 74,613 |
Other current assets | 120,982 | 244,477 |
Total oil and natural gas properties, net | 970,445 | 1,017,565 |
Total midstream service assets, net | 0 | 0 |
Total other fixed assets, net | 40,701 | 43,210 |
Investment in subsidiaries and equity method investee | 348,623 | 301,891 |
Total other long-term assets | 37,526 | 84,360 |
Total assets | 1,591,706 | 1,766,116 |
Accounts payable | 12,934 | 12,203 |
Other current liabilities | 120,756 | 158,283 |
Long-term debt, net | 1,392,877 | 1,416,226 |
Other long-term liabilities | 51,373 | 46,034 |
Stockholders' equity | 13,766 | 133,370 |
Total liabilities and stockholders’ equity | 1,591,706 | 1,766,116 |
Subsidiary Guarantors | Reportable Legal Entities | ||
Subsidiary guarantees | ||
Accounts receivable, net | 15,114 | 13,086 |
Other current assets | 1,737 | 56 |
Total oil and natural gas properties, net | 9,335 | 9,350 |
Total midstream service assets, net | 128,052 | 131,725 |
Total other fixed assets, net | 250 | 328 |
Investment in subsidiaries and equity method investee | 213,616 | 192,524 |
Total other long-term assets | 3,568 | 3,916 |
Total assets | 371,672 | 350,985 |
Accounts payable | 1,566 | 1,978 |
Other current liabilities | 18,556 | 44,351 |
Long-term debt, net | 0 | 0 |
Other long-term liabilities | 2,927 | 2,765 |
Stockholders' equity | 348,623 | 301,891 |
Total liabilities and stockholders’ equity | $ 371,672 | $ 350,985 |
Subsidiary guarantors - Conde92
Subsidiary guarantors - Condensed consolidating statement of operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Subsidiary guarantees | ||||
Total revenues | $ 146,773 | $ 182,331 | $ 253,330 | $ 333,025 |
Total costs and expenses | 128,899 | 683,811 | 412,244 | 861,003 |
Operating income (loss) | 17,874 | (501,480) | (158,914) | (527,978) |
Interest expense and other, net | (23,501) | (23,797) | (47,107) | (56,088) |
Other non-operating income (expense) | (65,805) | (93,603) | (45,782) | (31,643) |
Loss before income taxes | (71,432) | (618,880) | (251,803) | (615,709) |
Deferred income tax (expense) benefit | 0 | 221,846 | 0 | 218,203 |
Net loss | (71,432) | (397,034) | (251,803) | (397,506) |
Intercompany eliminations | ||||
Subsidiary guarantees | ||||
Total revenues | (9,506) | (2,982) | (18,972) | (5,561) |
Total costs and expenses | (7,980) | (2,938) | (16,291) | (5,429) |
Operating income (loss) | (1,526) | (44) | (2,681) | (132) |
Interest expense and other, net | 0 | 0 | 0 | 0 |
Other non-operating income (expense) | (4,718) | (5,150) | (8,318) | (3,469) |
Loss before income taxes | (6,244) | (5,194) | (10,999) | (3,601) |
Deferred income tax (expense) benefit | 0 | 0 | 0 | 0 |
Net loss | (6,244) | (5,194) | (10,999) | (3,601) |
Laredo | Reportable Legal Entities | ||||
Subsidiary guarantees | ||||
Total revenues | 102,511 | 125,687 | 175,633 | 243,833 |
Total costs and expenses | 84,137 | 629,359 | 334,201 | 772,667 |
Operating income (loss) | 18,374 | (503,672) | (158,568) | (528,834) |
Interest expense and other, net | (23,501) | (23,797) | (47,107) | (56,088) |
Other non-operating income (expense) | (64,779) | (91,367) | (43,447) | (30,655) |
Loss before income taxes | (69,906) | (618,836) | (249,122) | (615,577) |
Deferred income tax (expense) benefit | 0 | 221,846 | 0 | 218,203 |
Net loss | (69,906) | (396,990) | (249,122) | (397,374) |
Subsidiary Guarantors | Reportable Legal Entities | ||||
Subsidiary guarantees | ||||
Total revenues | 53,768 | 59,626 | 96,669 | 94,753 |
Total costs and expenses | 52,742 | 57,390 | 94,334 | 93,765 |
Operating income (loss) | 1,026 | 2,236 | 2,335 | 988 |
Interest expense and other, net | 0 | 0 | 0 | 0 |
Other non-operating income (expense) | 3,692 | 2,914 | 5,983 | 2,481 |
Loss before income taxes | 4,718 | 5,150 | 8,318 | 3,469 |
Deferred income tax (expense) benefit | 0 | 0 | 0 | 0 |
Net loss | $ 4,718 | $ 5,150 | $ 8,318 | $ 3,469 |
Subsidiary guarantors - Conde93
Subsidiary guarantors - Condensed consolidating statement of cash flows (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Subsidiary guarantees | ||
Net cash flows provided by operating activities | $ 138,631 | $ 114,305 |
Change in investment between affiliates | 0 | 0 |
Capital expenditures and other | (243,630) | (429,646) |
Net cash flows provided by financing activities | 93,154 | 343,613 |
Net (decrease) increase in cash and cash equivalents | (11,845) | 28,272 |
Cash and cash equivalents at beginning of period | 31,154 | 29,321 |
Cash and cash equivalents at end of period | 19,309 | 57,593 |
Intercompany eliminations | ||
Subsidiary guarantees | ||
Net cash flows provided by operating activities | (8,318) | (3,469) |
Change in investment between affiliates | 8,318 | 3,469 |
Capital expenditures and other | 0 | 0 |
Net cash flows provided by financing activities | 0 | 0 |
Net (decrease) 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 |
Laredo | Reportable Legal Entities | ||
Subsidiary guarantees | ||
Net cash flows provided by operating activities | 139,610 | 136,092 |
Change in investment between affiliates | (47,069) | (70,472) |
Capital expenditures and other | (197,540) | (380,961) |
Net cash flows provided by financing activities | 93,154 | 343,613 |
Net (decrease) increase in cash and cash equivalents | (11,845) | 28,272 |
Cash and cash equivalents at beginning of period | 31,153 | 29,320 |
Cash and cash equivalents at end of period | 19,308 | 57,592 |
Subsidiary Guarantors | Reportable Legal Entities | ||
Subsidiary guarantees | ||
Net cash flows provided by operating activities | 7,339 | (18,318) |
Change in investment between affiliates | 38,751 | 67,003 |
Capital expenditures and other | (46,090) | (48,685) |
Net cash flows provided by financing activities | 0 | 0 |
Net (decrease) increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 1 | 1 |
Cash and cash equivalents at end of period | $ 1 | $ 1 |
Subsequent Events (Details)
Subsequent Events (Details) | Aug. 09, 2016USD ($)shares | Jul. 29, 2016USD ($) | Jul. 19, 2016USD ($)shares | Jul. 18, 2016USD ($) | Jul. 13, 2016USD ($) | Jul. 12, 2016USD ($) | May 16, 2016USD ($)shares | Mar. 05, 2015USD ($)shares | Aug. 04, 2016abbl | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) |
Subsequent Event [Line Items] | ||||||||||||
Investment in equity method investee | $ 42,681,000 | $ 14,495,000 | ||||||||||
Proceeds from issuance of common stock, net of offering costs | $ 119,300,000 | $ 754,200,000 | $ 119,310,000 | $ 754,163,000 | ||||||||
Subsequent Event | Leasehold Interests Acquired In Western Glasscock And Reagan Counties [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Area of land (in acres) | a | 9,200 | |||||||||||
Number Of Barrels Of Oil Produced | bbl | 300 | |||||||||||
Subsequent Event | Leasehold Interests | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Payments | $ 1,650,000 | $ 92,700,000 | ||||||||||
Subsequent Event | Senior Secured Credit Facility | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Amount borrowed | $ 94,700,000 | |||||||||||
Outstanding amount | $ 70,000,000 | $ 205,000,000 | ||||||||||
Subsequent Event | Medallion Gathering And Processing LLC | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Investment in equity method investee | $ 16,000,000 | |||||||||||
Common Stock | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Equity issuance, net of offering costs (in shares) | shares | 10,925,000 | 69,000,000 | ||||||||||
Common Stock | Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Equity issuance, net of offering costs (in shares) | shares | 13,000,000 | |||||||||||
Proceeds from issuance of common stock, net of offering costs | $ 136,300,000 | |||||||||||
Stock authorized for purchase | shares | 1,950,000 | |||||||||||
Scenario, Forecast | Subsequent Event | Leasehold Interests | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Payments | $ 125,000,000 | |||||||||||
Scenario, Forecast | Common Stock | Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Equity issuance, net of offering costs (in shares) | shares | 1,950,000 | |||||||||||
Proceeds from issuance of common stock, net of offering costs | $ 20,500,000 |
Subsequent events - New Commodi
Subsequent events - New Commodity Derivatives Contract (Details) - January 2017 - December 2017 - Swaps - Subsequent Event | Aug. 04, 2016bbl$ / bbl | |
Crude Oil | ||
Subsequent Event [Line Items] | ||
Aggregate volumes (Bbl) | bbl | 1,003,750 | [1] |
Floor price | $ / bbl | 51.90 | [1] |
Natural Gas Liquids | ||
Subsequent Event [Line Items] | ||
Aggregate volumes (Bbl) | bbl | 444,000 | [2] |
Floor price | $ / bbl | 11.24 | [2] |
Crude Oil | ||
Subsequent Event [Line Items] | ||
Aggregate volumes (Bbl) | bbl | 1,003,750 | [1] |
Floor price | $ / bbl | 51.17 | [1] |
Natural Gas Liquids | ||
Subsequent Event [Line Items] | ||
Aggregate volumes (Bbl) | bbl | 375,000 | [3] |
Floor price | $ / bbl | 22.26 | [3] |
[1] | The associated derivatives will be settled based on the WTI NYMEX index oil price. | |
[2] | The associated derivative will be settled based on the Mont Belvieu Purity Ethane-OPIS price. | |
[3] | The associated derivative will be settled based on the Mont Belvieu Propane (TET)-OPIS price. |
Supplementary information (Deta
Supplementary information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Property acquisition costs: | |||||
Evaluated | $ 0 | $ 0 | $ 0 | $ 0 | |
Unevaluated | 0 | 0 | 0 | 0 | |
Exploration | 19,769 | 3,841 | 27,032 | 8,354 | |
Development costs | [1] | 70,806 | 110,518 | 152,692 | 317,190 |
Total costs incurred | 90,575 | 114,359 | 179,724 | 325,544 | |
Asset Retirement Obligations | |||||
Property acquisition costs: | |||||
Total costs incurred | $ 100 | $ 500 | $ 200 | $ 1,000 | |
[1] | (1)The costs incurred for oil, NGL and natural gas development activities include $0.1 million and $0.5 million in asset retirement obligations for the three months ended June 30, 2016 and 2015, respectively, and $0.2 million and $1.0 million for the six months ended June 30, 2016 and 2015, respectively. |