Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 05, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Midstates Petroleum Company, Inc. | |
Entity Central Index Key | 1,533,924 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 25,065,009 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 84,453 | $ 76,838 |
Accounts receivable: | ||
Oil and gas sales | 32,811 | 36,988 |
Joint interest billing | 5,290 | 4,281 |
Other | 2,559 | 2,456 |
Commodity derivative contracts | 4,054 | |
Other current assets | 3,796 | 3,326 |
Total current assets | 132,963 | 123,889 |
PROPERTY AND EQUIPMENT: | ||
Proved properties | 620,090 | 573,150 |
Unproved properties not being amortized | 52,611 | 65,080 |
Other property and equipment | 6,427 | 6,339 |
Less accumulated depreciation, depletion and amortization | (28,316) | (12,974) |
Net property and equipment | 650,812 | 631,595 |
OTHER NONCURRENT ASSETS | 5,563 | 5,455 |
TOTAL | 789,338 | 760,939 |
CURRENT LIABILITIES: | ||
Accounts payable | 8,914 | 2,521 |
Accrued liabilities | 53,131 | 53,731 |
Total current liabilities | 62,045 | 56,252 |
LONG-TERM LIABILITIES: | ||
Asset retirement obligations | 14,536 | 14,200 |
Long-term debt | 128,059 | 128,059 |
Other long-term liabilities | 609 | 614 |
Total long-term liabilities | 143,204 | 142,873 |
COMMITMENTS AND CONTINGENCIES (Note 13) | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued or outstanding at March 31, 2017 and December 31, 2016 | ||
Warrants 6,625,554,warrants outstanding at March 31, 2017 and December 31, 2016 | 37,329 | 37,329 |
Common stock, $0.01 par value, 250,000,000 shares authorized; 24,994,867 shares issued and outstanding at March 31, 2017 and December 31, 2016 | 250 | 250 |
Additional paid-in-capital | 518,095 | 514,305 |
Retained earnings | 28,415 | 9,930 |
Total stockholders' equity | 584,089 | 561,814 |
TOTAL | $ 789,338 | $ 760,939 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Warrants outstanding | 6,625,554 | 6,625,554 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 24,994,867 | 24,994,867 |
Common stock, shares outstanding | 24,994,867 | 24,994,867 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
REVENUES : | ||
Oil sales | $ 31,036 | |
Natural gas liquid sales | 11,194 | |
Natural gas sales | 17,098 | |
Gains on commodity derivative contracts - net | 4,865 | |
Other | 822 | |
Total revenues | 65,015 | |
EXPENSES : | ||
Lease operating and workover | 15,852 | |
Gathering and transportation | 3,687 | |
Severance and other taxes | 2,121 | |
Asset retirement accretion | 276 | |
Depreciation, depletion, and amortization | 15,342 | |
General and administrative | 8,275 | |
Total expenses | 45,553 | |
OPERATING INCOME (LOSS) | 19,462 | |
OTHER EXPENSE: | ||
Interest expense-net of amounts capitalized | (977) | |
Total other expense | (977) | |
INCOME (LOSS) BEFORE TAXES | 18,485 | |
Income tax (expense) benefit | 0 | |
NET INCOME (LOSS) | 18,485 | |
Successor participating securities-non-vested restricted stock | (546) | |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 17,939 | |
Basic and diluted net income (loss) per share attributable to common shareholders | $ 0.72 | |
Basic and diluted weighted average number of common shares outstanding (Note 12) | 25,012 | |
Predecessor | ||
REVENUES : | ||
Oil sales | $ 30,138 | |
Natural gas liquid sales | 7,063 | |
Natural gas sales | 13,942 | |
Other | 818 | |
Total revenues | 51,961 | |
EXPENSES : | ||
Lease operating and workover | 15,761 | |
Gathering and transportation | 4,421 | |
Severance and other taxes | 1,504 | |
Asset retirement accretion | 420 | |
Depreciation, depletion, and amortization | 24,835 | |
Impairment in carrying value of oil and gas properties | 127,734 | |
General and administrative | 11,288 | |
Debt restructuring costs and advisory fees | 1,117 | |
Total expenses | 187,080 | |
OPERATING INCOME (LOSS) | (135,119) | |
OTHER EXPENSE: | ||
Interest income | 57 | |
Interest expense-net of amounts capitalized | (44,212) | |
Total other expense | (44,155) | |
INCOME (LOSS) BEFORE TAXES | (179,274) | |
NET INCOME (LOSS) | (179,274) | |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (179,274) | |
Basic and diluted net income (loss) per share attributable to common shareholders | $ (16.88) | |
Basic and diluted weighted average number of common shares outstanding (Note 12) | 10,621 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY/(DEFICIT) - USD ($) $ in Thousands | Common Stock | Warrants | Treasury Stock | Additional Paid-in-Capital | Retained Earnings (Deficit) | Total |
Balance (Predecessor) at Dec. 31, 2015 | $ 110 | $ (3,081) | $ 888,247 | $ (2,211,342) | $ (1,326,066) | |
Increase (Decrease) in Stockholders' Equity | ||||||
Share-based compensation | Predecessor | (1) | 883 | 882 | |||
Acquisition of treasury stock | Predecessor | (52) | (52) | ||||
Net income | Predecessor | (179,274) | (179,274) | ||||
Balance (Predecessor) at Mar. 31, 2016 | 109 | $ (3,133) | 889,130 | (2,390,616) | (1,504,510) | |
Balance at Dec. 31, 2016 | 250 | $ 37,329 | 514,305 | 9,930 | 561,814 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Share-based compensation | 3,790 | 3,790 | ||||
Net income | 18,485 | 18,485 | ||||
Balance at Mar. 31, 2017 | $ 250 | $ 37,329 | $ 518,095 | $ 28,415 | $ 584,089 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 18,485 | ||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | |||
Gains on commodity derivative contracts - net | (4,865) | ||
Net cash received for commodity derivative contracts | 811 | ||
Asset retirement accretion | 276 | ||
Depreciation, depletion, and amortization | 15,342 | ||
Share-based compensation, net of amounts capitalized to oil and gas properties | 3,337 | ||
Amortization of deferred financing costs | 80 | ||
Change in operating assets and liabilities: | |||
Accounts receivable - oil and gas sales | 2,812 | ||
Accounts receivable - JIB and other | (842) | ||
Other current and noncurrent assets | (656) | ||
Accounts payable | 1,279 | ||
Accrued liabilities | (3,649) | ||
Other | (37) | ||
Net cash provided by operating activities | 32,373 | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Investment in property and equipment | (26,108) | ||
Proceeds from the sale of oil and gas equipment | 1,350 | ||
Net cash used in investing activities | (24,758) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 7,615 | ||
Cash and cash equivalents, beginning of period | 76,838 | ||
Cash and cash equivalents, end of period | 84,453 | $ 76,838 | |
SUPPLEMENTAL INFORMATION: | |||
Non-cash transactions - investments in property and equipment accrued - not paid | 17,440 | ||
Cash paid for interest, net of capitalized interest of $0.9 million for the three months ended March 31, 2017 (no capitalized interest for the three months ended March 31, 2016) | $ 937 | ||
Predecessor | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ (179,274) | ||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | |||
Asset retirement accretion | 420 | ||
Depreciation, depletion, and amortization | 24,835 | ||
Impairment in carrying value of oil and gas properties | 127,734 | ||
Share-based compensation, net of amounts capitalized to oil and gas properties | 685 | ||
Amortization of deferred financing costs | 1,551 | ||
Paid-in-kind interest expense | 2,648 | ||
Amortization of deferred gain on debt restructuring | (6,276) | ||
Operating lease abandonment | 3,310 | ||
Change in operating assets and liabilities: | |||
Accounts receivable - oil and gas sales | 3,457 | ||
Accounts receivable - JIB and other | 16,891 | ||
Other current and noncurrent assets | (3,764) | ||
Accounts payable | 267 | ||
Accrued liabilities | 37,627 | ||
Other | (256) | ||
Net cash provided by operating activities | 29,855 | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Investment in property and equipment | (58,654) | ||
Net cash used in investing activities | (58,654) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from revolving credit facility | 249,184 | ||
Acquisition of treasury stock | (52) | ||
Net cash provided by financing activities | 249,132 | ||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 220,333 | ||
Cash and cash equivalents, beginning of period | 81,093 | $ 81,093 | |
Cash and cash equivalents, end of period | 301,426 | ||
SUPPLEMENTAL INFORMATION: | |||
Non-cash transactions - investments in property and equipment accrued - not paid | 15,563 | ||
Cash paid for interest, net of capitalized interest of $0.9 million for the three months ended March 31, 2017 (no capitalized interest for the three months ended March 31, 2016) | $ 942 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Capitalized interest | $ 0.9 | |
Predecessor | ||
Capitalized interest | $ 0 |
Organization and Business
Organization and Business | 3 Months Ended |
Mar. 31, 2017 | |
Organization and Business | |
Organization and Business | 1. Organization and Business Midstates Petroleum Company, Inc. engages in the business of exploring and drilling for, and the production of, oil, natural gas liquids (“NGLs”) and natural gas in Oklahoma and Texas. Midstates Petroleum Company, Inc. was incorporated pursuant to the laws of the State of Delaware on October 25, 2011 to become a holding company for Midstates Petroleum Company LLC (“Midstates Sub”). The terms “Company,” “we,” “us,” “our,” and similar terms refer to Midstates Petroleum Company, Inc. and its subsidiary. The Company conducts oil and gas operations and owns and operates oil and natural gas properties in Oklahoma, Texas and Louisiana. The Company operates a significant portion of its oil and natural gas properties. The Company’s management evaluates performance based on one reportable segment as all of its operations are located in the United States and, therefore, it maintains one cost center. On April 30, 2016, the Company filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Company’s Chapter 11 cases (the “Chapter 11 Cases”) were jointly administered under the case styled In re Midstates Petroleum Company, Inc., et al., Case No. 16-32237 . On September 28, 2016, the Bankruptcy Court entered the Findings of Fact, Conclusions of Law, and Order Confirming Debtors’ First Amended Joint Chapter 11 Plan of Reorganization of Midstates Petroleum Company, Inc. and its Debtor Affiliate (the “Confirmation Order”), which approved and confirmed the First Amended Joint Chapter 11 Plan of Reorganization of Midstates Petroleum Company, Inc. and its Debtor Affiliate as filed on the same date (the “Plan”). On October 21, 2016 (the “Effective Date”), the Company satisfied the conditions to effectiveness set forth in the Confirmation Order and in the Plan, and, as a result, the Plan became effective in accordance with its terms and the Company emerged from the Chapter 11 Cases. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation These interim financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain disclosures have been condensed or omitted from these financial statements. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete consolidated financial statements, and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K as filed with the SEC on March 30, 2017. All intercompany transactions have been eliminated in consolidation. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial position as of, and the results of operations for, all periods presented. In preparing the accompanying unaudited condensed consolidated financial statements, management has made certain estimates and assumptions that affect reported amounts in the unaudited condensed consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 852, Reorganizations , the Company adopted fresh start accounting upon emergence from the Chapter 11 Cases resulting in the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh start accounting, as well as the effects of the implementation of the Plan, the Company’s consolidated financial statements on or after October 21, 2016, are not comparable with the consolidated financial statements prior to that date. References to “Successor Period” relate to the results of operations for the period January 1, 2017 through March 31, 2017 and references to “Predecessor Period” refer to the results of operations from January 1, 2016 through March 31, 2016. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers (Topic 606) ” (“ASU 2014-09”). ASU 2014-09 provides guidance concerning the recognition and measurement of revenue from contracts with customers. The objective of ASU 2014-09 is to increase the usefulness of information in the financial statements regarding the nature, timing and uncertainty of revenues. The Company plans to review contracts for each revenue stream identified within the Company’s business. Through this process, the Company will determine and document the expected changes in revenue recognition upon adoption of the revised guidance and then evaluate the potential information technology and internal control changes that will be required for adoption based on the findings from the Company’s contract review process. The Company will conduct the contract review process throughout 2017 and, as a result, areas of impact may be identified. The Company cannot reasonably quantify the impact of adoption at this time. The Company expects to complete the assessment of ASU 2014-09, including the transition method, in the latter half of 2017. In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. All leases create an asset and a liability for the lessee and therefore recognition of those lease assets and lease liabilities is required by ASU 2016-02. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the initial evaluation and planning stages for ASU 2016-02 and does not expect to move beyond this stage until completion of its evaluation of ASU 2014-09, which is expected to occur in the latter half of 2017. |
Fair Value Measurements of Fina
Fair Value Measurements of Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements of Financial Instruments | |
Fair Value Measurements of Financial Instruments | 3. Fair Value Measurements of Financial Instruments Assets and Liabilities Measured at Fair Value on a Recurring Basis Derivative Instruments Commodity derivative contracts reflected in the unaudited condensed consolidated balance sheets are recorded at estimated fair value. At March 31, 2017, all of the Company’s commodity derivative contracts were with two bank counterparties and were classified as Level 2 in the fair value input hierarchy. The fair value of the Company’s commodity derivatives are determined using industry-standard models that consider various assumptions including current market and contractual prices for the underlying instruments, implied volatility, time value, nonperformance risk, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the instrument and can be supported by observable data. Derivative instruments listed below are presented gross and include swaps and collars that are carried at fair value. The Company records the net change in the fair value of these positions in “Gains on commodity derivative contracts — net” in the Company’s unaudited condensed consolidated statements of operations. Fair Value Measurements at March 31, 2017 Significant Other Significant Quoted Prices in Active Observable Inputs Unobservable Inputs Total (in thousands) Derivative Assets: Commodity derivative oil swaps $ — $ $ — $ Commodity derivative gas swaps $ — $ $ — $ Commodity derivative oil collars $ — $ $ — $ Commodity derivative gas collars $ — $ $ — $ Total assets $ — $ $ — $ Derivative Liabilities: Commodity derivative oil swaps $ — $ — $ — $ — Commodity derivative gas swaps $ — $ ) $ — $ ) Commodity derivative oil collars $ — $ ) $ — $ ) Commodity derivative gas collars $ — $ ) $ — $ ) Total liabilities $ — $ ) $ — $ ) At December 31, 2016, the Company did not have any open commodity derivative contract positions. |
Risk Management and Derivative
Risk Management and Derivative Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Risk Management and Derivative Instruments | |
Risk Management and Derivative Instruments | 4. Risk Management and Derivative Instruments The Company’s production is exposed to fluctuations in crude oil, NGLs and natural gas prices. The Company believes it is prudent to manage the variability in cash flows by, at times, entering into derivative financial instruments to economically hedge a portion of its crude oil, NGLs and natural gas production. The Company utilizes various types of derivative financial instruments, including swaps and collars, to manage fluctuations in cash flows resulting from changes in commodity prices. · Swaps: The Company receives or pays a fixed price for the commodity and pays or receives a floating market price to the counterparty. The fixed-price payment and the floating-price payment are netted, resulting in a net amount due to or from the counterparty. · Collars: A collar contains a fixed floor price (put) and a fixed ceiling price (call). If the market price exceeds the call strike price or falls below the put strike price, the Company receives the fixed price and pays the market price. If the market price is between the call and the put strike price, no payments are due from either party. · Three-way collars: A three-way collar contains a fixed floor price (long put), fixed sub-floor price (short put), and a fixed ceiling price (short call). If the market price exceeds the ceiling strike price, the Company receives the ceiling strike price and pays the market price. If the market price is between the ceiling and the floor strike price, no payments are due from either party. If the market price is below the floor price but above the sub-floor price, the Company receives the floor strike price and pays the market price. If the market price is below the sub-floor price, the Company receives the market price plus the difference between the floor and the sub-floor strike prices and pays the market price. These derivative contracts are placed with major financial institutions that the Company believes are minimal credit risks. The oil, NGLs and natural gas reference prices upon which the commodity derivative contracts are based reflect various market indices that management believes have a high degree of historical correlation with actual prices received by the Company for its oil, NGLs and natural gas production. Inherent in the Company’s portfolio of commodity derivative contracts are certain business risks, including market risk and credit risk. Market risk is the risk that the price of the commodity will change, either favorably or unfavorably, in response to changing market conditions. Credit risk is the risk of loss from nonperformance by the Company’s counterparty to a contract. The Company does not require collateral from its counterparties but does attempt to minimize its credit risk associated with derivative instruments by entering into derivative instruments only with counterparties that are large financial institutions, which management believes present minimal credit risk. In addition, to mitigate its risk of loss due to default, the Company has entered into agreements with its counterparties on its derivative instruments that allow the Company to offset its asset position with its liability position in the event of default by the counterparty. Due to the netting arrangements, had the Company’s counterparties failed to perform under existing commodity derivative contracts, the maximum loss at March 31, 2017 would have been $4.1 million. Commodity Derivative Contracts During the three months ended March 31, 2017, the Company entered into various oil and natural gas derivative contracts that extend through March 2018, summarized as follows: Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended March 31, 2017 June 30, 2017 (1) September 30, 2017 (1) December 31, 2017 (1) March 31, 2018 (1) NYMEX WTI Fixed swaps Hedge position (Bbls) — Weighted average strike price $ $ $ $ $ — Collars Hedge position (Bbls) — Weighted average ceiling price $ $ $ $ $ — Weighted average floor price $ $ $ $ $ — Three way collars Hedge position (Bbls) — — Weighted average ceiling price $ — $ — $ $ $ Weighted average floor price $ — $ — $ $ $ Weighted average sub-floor price $ — $ — $ $ $ NYMEX HENRY HUB Fixed swaps Hedge position (MMBtu) — Weighted average strike price $ — $ $ $ $ Collars Hedge position (MMBtu) — — — — Weighted average ceiling price $ $ — $ — $ — $ — Weighted average floor price $ $ — $ — $ — $ — Three way collars Hedge position (MMBtu) — — — Weighted average ceiling price $ — $ — $ — $ $ Weighted average floor price $ — $ — $ — $ $ Weighted average sub-floor price $ — $ — $ — $ $ (1) Positions shown represent open commodity derivative contract positions as of March 31, 2017. The Company did not have any open commodity derivative contract positions as of December 31, 2016. Subsequent to March 31, 2017, the Company entered into various oil and natural gas derivative contracts that extend through September 2018, summarized as follows: Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended June 30, September 30, December 31, March 31, June 30, September 30, NYMEX WTI Fixed swaps Hedge position (Bbls) — — — — — — Weighted average strike price $ — $ — $ — $ — $ — $ — Collars Hedge position (Bbls) — — — — — — Weighted average ceiling price $ — $ — $ — $ — $ — $ — Weighted average floor price $ — $ — $ — $ — $ — $ — Three way collars Hedge position (Bbls) — — — Weighted average ceiling price $ — $ — $ — $ $ $ Weighted average floor price $ — $ — $ — $ $ $ Weighted average sub-floor price $ — $ — $ — $ $ $ NYMEX HENRY HUB Fixed swaps Hedge position (MMBtu) — — — — — — Weighted average strike price $ — $ — $ — $ — $ — $ — Collars Hedge position (MMBtu) — — — Weighted average ceiling price $ $ $ $ — $ — $ — Weighted average floor price $ $ $ $ — $ — $ — Three way collars Hedge position (MMBtu) — — — — — Weighted average ceiling price $ — $ — $ — $ $ — $ — Weighted average floor price $ — $ — $ — $ $ — $ — Weighted average sub-floor price $ — $ — $ — $ $ — $ — Balance Sheet Presentation The following table summarizes the net fair values of commodity derivative instruments by the appropriate balance sheet classification in the Company’s unaudited condensed consolidated balance sheets at March 31, 2017 (in thousands): Type Balance Sheet Location (1) March 31, 2017 Fixed swaps Derivative financial instruments – Current Assets $ Collars Derivative financial instruments – Current Assets Total derivative fair value at period end $ (1) The fair values of commodity derivative instruments reported in the Company’s unaudited condensed consolidated balance sheets are subject to netting arrangements and qualify for net presentation. The following table summarizes the location and fair value amounts of all commodity derivative instruments in the unaudited condensed consolidated balance sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the unaudited condensed consolidated balance sheets at March 31, 2017 (in thousands): March 31, 2017 Not Designated as Gross Recognized Gross Amounts Net Recognized ASC 815 Hedges Balance Sheet Location Classification Assets/Liabilities Offset Assets/Liabilities Derivative Assets: Commodity contracts Derivative financial instruments – current $ $ ) $ Commodity contracts Derivative financial instruments – noncurrent — — — $ $ ) $ Derivative Liabilities: Commodity contracts Derivative financial instruments – current $ ) $ $ — Commodity contracts Derivative financial instruments – noncurrent — — — $ ) $ $ — As of December 31, 2016, the Company did not have any commodity derivative contract positions. Gains/Losses on Commodity Derivative Contracts The Company does not designate its commodity derivative contracts as hedging instruments for financial reporting purposes. Accordingly, commodity derivative contracts are marked-to-market each quarter with the change in fair value during the periodic reporting period recognized currently as a gain or loss in “Gains on commodity derivative contracts—net” within revenues in the unaudited condensed consolidated statements of operations. The following table presents net cash received for commodity derivative contracts and unrealized net gains recorded by the Company related to the change in fair value of the derivative instruments in “Gains on commodity derivative contracts—net” for the periods presented (in thousands): For the Three Months Ended March 31, 2017 Net cash received for commodity derivative contracts $ Unrealized net gains Gains on commodity derivative contracts—net $ Cash settlements, as presented in the table above, represent realized gains related to the Company’s derivative instruments. In addition to cash settlements, the Company also recognizes fair value changes on its derivative instruments in each reporting period. The changes in fair value result from new positions and settlements that may occur during each reporting period, as well as the relationships between contract prices and the associated forward curves. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2017 | |
Property and Equipment | |
Property and Equipment | 5. Property and Equipment Property and equipment consisted of the following as of the dates presented: March 31, 2017 December 31, 2016 (in thousands) Oil and gas properties, on the basis of full-cost accounting: Proved properties $ $ Unproved properties Other property and equipment Less accumulated depreciation, depletion and amortization ) ) Net property and equipment $ $ Oil and Gas Properties The Company capitalizes internal costs directly related to exploration and development activities to oil and gas properties. During the three months ended March 31, 2017 and 2016, the Company capitalized the following (in thousands): Successor Predecessor Three Months Three Months March 31, 2017 March 31, 2016 Internal costs capitalized to oil and gas properties (1) $ $ (1) Inclusive of $0.7 million and $0.2 million of qualifying share-based compensation expense for the three months ended March 31, 2017 and 2016, respectively. The Company accounts for its oil and gas properties under the full cost method. Under the full cost method, proceeds realized from the sale or disposition of oil and gas properties are accounted for as a reduction to capitalized costs unless a significant portion of the Company’s reserve quantities are sold such that it results in a significant alteration of the relationship between capitalized costs and remaining proved reserves, in which case a gain or loss is generally recognized in income. During the three months ended March 31, 2017, the Company disposed of certain oil and gas equipment for cash proceeds of $1.4 million, which were reflected as reduction of oil and gas properties with no gain or loss recognized. The Company performs a full-cost ceiling test on a quarterly basis. The test establishes a limit (ceiling) on the book value of the Company’s oil and gas properties. The capitalized costs of oil and gas properties, net of accumulated depreciation, depletion, amortization and impairment (DD&A) and the related deferred income taxes, may not exceed this “ceiling.” The ceiling limitation is equal to the sum of: (i) the present value of estimated future net revenues from the projected production of proved oil and gas reserves, excluding future cash outflows associated with settling asset retirement obligations accrued on the balance sheet, calculated using the average oil and natural gas sales price received by the Company as of the first trading day of each month over the preceding twelve months (such prices held constant throughout the life of the properties) and a discount factor of 10%; (ii) the cost of unproved properties excluded from the costs being amortized; (iii) the lower of cost or estimated fair value of unproved properties included in the costs being amortized; and (iv) related income tax effects. If capitalized costs exceed this ceiling, the excess is charged to expense in the accompanying unaudited condensed consolidated statements of operations. The Company did not record an impairment of oil and gas properties during the Successor Period. During the Predecessor Period, capitalized costs exceeded the ceiling and the Company recorded an impairment of oil and gas properties of $127.7 million. This impairment was primarily the result of continued low commodity prices, which resulted in a decrease in the discounted present value of the Company’s proved oil and natural gas reserves. Depreciation, depletion and amortization is calculated using the Units of Production Method (“UOP”). The UOP calculation multiplies the percentage of total estimated proved reserves produced by the cost of those reserves. The result is to recognize expense at the same pace that the reservoirs are estimated to be depleting. The amortization base in the UOP calculation includes the sum of proved property costs net of accumulated depreciation, depletion, amortization and impairment, estimated future development costs (future costs to access and develop proved reserves) and asset retirement costs that are not already included in oil and gas property, less related salvage value. The following table presents depletion expense related to oil and gas properties for the three months ended March 31, 2017 and 2016, respectively: Successor Predecessor Successor Predecessor Three Months Three Months Three Months Three Months March 31, 2017 March 31, 2016 March 31, 2017 March 31, 2016 (in thousands) (in thousands) (per Boe) (per Boe) Depletion expense $ $ $ $ Depreciation on other property and equipment Depreciation, depletion, and amortization $ $ $ $ Oil and gas unproved properties include costs that are not being depleted or amortized. The Company excludes these costs until proved reserves are found, until it is determined that the costs are impaired or until major development projects are placed in service, at which time the costs are moved into oil and natural gas properties subject to amortization. All unproved property costs are reviewed at least annually to determine if impairment has occurred. In addition, impairment assessments are made for interim reporting periods if facts and circumstances exist that suggest impairment may have occurred. During any period in which impairment is indicated, the accumulated costs associated with the impaired property are transferred to proved properties and become part of our depletion base and subject to the full cost ceiling limitation. No impairment of unproved properties was recorded during the three months ended March 31, 2017 or the period October 21, 2016 through December 31, 2016. Unproved property was $52.6 million and $65.1 million at March 31, 2017 and December 31, 2016, respectively. Other Property and Equipment Other property and equipment consists of vehicles, furniture and fixtures, and computer hardware and software and are carried at cost. Depreciation is calculated principally using the straight-line method over the estimated useful lives of the assets, which range from five to seven years. Maintenance and repairs are charged to expense as incurred, while renewals and betterments are capitalized. |
Other Noncurrent Assets
Other Noncurrent Assets | 3 Months Ended |
Mar. 31, 2017 | |
Other Noncurrent Assets | |
Other Noncurrent Assets | 6. Other Noncurrent Assets The following table presents the components of other noncurrent assets as of the dates presented: March 31, 2017 December 31, 2016 (in thousands) Deferred financing costs associated with the Exit Facility $ $ Field equipment inventory Other Other noncurrent assets $ $ |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Accrued Liabilities | |
Accrued Liabilities | 7. Accrued Liabilities The following table presents the components of accrued liabilities as of the dates presented: March 31, 2017 December 31, 2016 (in thousands) Accrued oil and gas capital expenditures $ $ Accrued revenue and royalty distributions Accrued lease operating and workover expense Accrued interest Accrued taxes Compensation and benefit related accruals Other Accrued liabilities $ $ |
Asset Retirement Obligations
Asset Retirement Obligations | 3 Months Ended |
Mar. 31, 2017 | |
Asset Retirement Obligations | |
Asset Retirement Obligations | 8. Asset Retirement Obligations Asset Retirement Obligations (“AROs”) represent the estimated future abandonment costs of tangible assets, such as wells, service assets and other facilities. The estimated fair value of the ARO at inception is capitalized as part of the carrying amount of the related long-lived assets. The following table reflects the changes in the Company’s AROs for the periods presented (in thousands): Successor Predecessor Three Months Three Months March 31, 2017 March 31, 2016 Asset retirement obligations — beginning of period $ $ Liabilities incurred Revisions — — Liabilities settled ) ) Liabilities eliminated through asset sales — — Current period accretion expense Asset retirement obligations — end of period $ $ |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt | |
Debt | 9. Debt Exit Facility At March 31, 2017 and December 31, 2016, the Company maintained a reserves based credit facility with a borrowing base of $170.0 million (the “Exit Facility”). At March 31, 2017 and December 31, 2016, the Company had $128.1 million drawn on the Exit Facility and had outstanding letters of credit obligations totaling $1.9 million. The Exit Facility is not subject to a borrowing base redetermination until April 2018 (provided certain conditions are met) and unless the borrowing base is redetermined earlier, the amount available to be drawn under the Exit Facility is reduced by $40.0 million until that date, and thereafter, the Company must maintain liquidity (as defined therein) equal to at least 20.0% of the effective borrowing base. As a result, at March 31, 2017, the Company had no amount of availability on the Exit Facility. The Exit Facility matures on September 30, 2020 and borrowings thereunder are secured by (i) first-priority mortgages on at least 95% of the Company’s oil and gas properties, (ii) all other presently owned or after-acquired property (including but not limited to as-extracted collateral, accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property, real property and the proceeds of the foregoing) and (iii) a perfected pledge on all equity interests. The Exit Facility bears interest at LIBOR plus 4.50% per annum, subject to a 1.00% LIBOR floor. At March 31, 2017, the weighted average interest rate was 5.50%. Unamortized debt issuance costs of $1.1 million and $1.2 million associated with the Exit Facility are included in other noncurrent assets on the unaudited condensed consolidated balance sheets at March 31, 2017 and December 31, 2016, respectively. In addition to interest expense, the Exit Facility requires the payment of a commitment fee each quarter. The commitment fee is computed at the rate of 0.50% per annum based on the average daily amount by which the borrowing base exceeds outstanding borrowings during each quarter. In addition to the aforementioned liquidity covenant, the Exit Facility also contains various other financial covenants, including an EBITDA to interest expense coverage ratio limitation of not less than 3.00:1.00, a ratio limitation of Total Net Indebtedness (as defined in the Exit Facility) to EBITDA of not more than 2.25:1.00 through April 1, 2018 and not more than 3.00:1.00 thereafter, and a limitation on Capital Expenditures (as defined) of $81.0 million for the year ended December 31, 2017, $85.0 million for the year ended December 31, 2018 and $78.0 million for the year ended December 31, 2019. The Exit Facility is also subject to a variety of other terms and conditions including conditions precedent to funding, restrictions on the payment of dividends and various other covenants and representations and warranties. As of March 31, 2017, the Company was in compliance with its debt covenants. The Company believes the carrying amount of the Exit Facility at March 31, 2017 approximates its fair value (Level 2) due to the variable nature of the Exit Facility interest rate. |
Equity and Share-Based Compensa
Equity and Share-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Equity and Share-Based Compensation | |
Equity and Share-Based Compensation | 10. Equity and Share-Based Compensation Common Shares Share Activity The following table summarizes changes in the number of outstanding shares during the three months ended March 31, 2017: Common Treasury Share count as of December 31, 2016 — Common stock issued — — Acquisition of treasury stock — — Share count as of March 31, 2017 — (1) Treasury stock represents the net settlement on vesting of restricted stock necessary to satisfy the minimum statutory tax withholding requirements. Share-Based Compensation 2016 Long Term Incentive Plan On the Effective Date, the Company established the 2016 LTIP and filed a Form S-8 with the SEC, registering 3,513,950 shares for issuance under the terms of the 2016 LTIP to employees, directors and certain other persons (the “Award Shares”). The types of awards that may be granted under the 2016 LTIP include stock options, restricted stock units, restricted stock, performance awards and other forms of awards granted or denominated in shares of common stock of the reorganized Company, as well as certain cash-based awards (the “Awards”). The terms of each award are as determined by the Compensation Committee of the Board of Directors. Awards that expire, or are canceled, forfeited, exchanged, settled in cash or otherwise terminated, will again be available for future issuance under the 2016 LTIP. At March 31, 2017, 2,131,680 Award Shares remain available for issuance under the terms of the 2016 LTIP. Restricted Stock Units At March 31, 2017, the Company had 681,915 non-vested restricted stock units outstanding to employees and non-employee directors pursuant to the 2016 LTIP, excluding restricted stock units issued to non-employee directors containing a market condition, which are discussed below. Restricted stock units granted to employees under the 2016 LTIP vest ratably over a period of three years: one-sixth will vest on the six-month anniversary of the grant date, an additional one-sixth will vest on the twelve-month anniversary of the grant date, an additional one-third will vest on the twenty-four month anniversary of the grant date and the final one-third will vest on the thirty-six month anniversary of the grant date. Restricted stock units granted to non-employee directors vest on the first to occur of (i) December 31, 2017, (ii) the date the non-employee director ceases to be a director of the Board (other than for cause), (iii) the director’s death, (iv) the director’s disability or (v) a change in control of the Company. The fair value of restricted stock units was based on grant date fair value of the Company’s common stock. Compensation expense is recognized ratably over the requisite service period. The following table summarizes the Company’s non-vested restricted stock unit award activity for the three months ended March 31, 2017: Restricted Stock Weighted Average Non-vested shares outstanding at December 31, 2016 $ Granted $ Vested — $ — Forfeited ) $ Non-vested shares outstanding at March 31, 2017 $ Unrecognized expense as of March 31, 2017 for all outstanding restricted stock units under the 2016 LTIP Plan was $8.8 million and will be recognized over a weighted average period of 1.5 years. On April 21, 2017, 103,301 restricted stock units vested before consideration of minimum statutory tax withholding requirements. Stock Options At March 31, 2017, the Company had 624,059 non-vested options outstanding pursuant to the 2016 LTIP. Stock Option Awards granted under the 2016 LTIP vest ratably over a period of three years: one-sixth will vest on the six-month anniversary of the grant date, an additional one-sixth will vest on the twelve-month anniversary of the grant date, an additional one-third will vest on the twenty four-month anniversary of the grant date and the final one-third will vest on the thirty six-month anniversary of the grant date. Stock Option Awards expire 10 years from the grant date. The Company utilizes the Black-Scholes-Merton option pricing model to determine the fair value of stock option 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. The assumptions used to estimate the fair value of stock option awards issued during the three months ended March 31, 2017 are as follows: Awards Issued in Risk-free interest rate (1) % Dividend yield — Expected option life (2) Expected volatility (3) % Calculated fair value per stock option $ U.S. Treasury yields as of the grant date were utilized for the risk-free interest rate assumption, matching the treasury yield terms to the expected life of the option. As the Company had no exercise history associated with stock options at the Effective Date, expected option life assumptions were developed using the simplified method in accordance with US GAAP. As the Company had limited stock option history at March 31, 2017, it utilized six peer companies of comparable size and industry to estimate volatility utilizing a period that is commensurate with the expected option life. The Company weighted historical volatility and implied volatility 50/50 for those peer companies where both were available, with volatility ranging in the peer companies from 36.9% to 68.2%. The following table summarizes the Company’s 2016 LTIP non-vested stock option activity for the three months ended March 31, 2017: Options Range of Weighted Average Weighted Stock options outstanding at December 31, 2016 $ Granted $ $ Vested — $ — $ — — Forfeited ) $ — Stock options outstanding at March 31, 2017 $ Unrecognized expense as of March 31, 2017 for all outstanding stock options under the 2016 LTIP Plan was $4.5 million and will be recognized over a weighted average period of 1.5 years. On April 21, 2017, 103,301 stock options vested before consideration of minimum statutory tax withholding requirements. Non-Employee Director Restricted Stock Units Containing a Market Condition On November 23, 2016, the Company issued certain restricted stock units to non-employee directors that contain a market vesting condition. These restricted stock units will vest (i) on the first business day following the date on which the trailing 60-day average share price (including any dividends paid) of the Company’s common stock is equal to or greater than $30.00 or (ii) upon a change in control of the Company. Additionally, all unvested restricted stock units containing a market vesting condition will be immediately forfeited upon the first to occur of (i) the fifth (5th) anniversary of the grant date or (ii) any participant’s termination as a director for any reason (except for a termination as part of a change in control of the Company). These restricted stock awards are accounted for as liability awards under FASB ASC 718 as the awards allow for the withholding of taxes at the discretion of the non-employee director. The liability is re-measured, with a corresponding adjustment to earnings, at each fiscal quarter-end during the performance cycle. The liability and related compensation expense of these awards for each period is recognized by dividing the fair value of the total liability by the requisite service period and recording the pro rata share for the period for which service has already been provided. As there are inherent uncertainties related to these factors and the Company’s judgment in applying them to the fair value determinations, there is risk that the recorded compensation may not accurately reflect the amount ultimately earned by the non-employee directors. The restricted stock unit awards issued to non-employee directors containing a market condition has a derived service period of one year. At March 31, 2017 the Company recorded a $0.4 million liability included within accrued liabilities on the unaudited condensed consolidated balance sheets related to the market condition awards. The weighted-average fair value of the restricted stock units containing a market condition was $15.23 at March 31, 2017. As of March 31, 2017, unrecognized stock-based compensation related to market condition awards was $0.8 million and will be recognized over a weighted-average period of 0.6 years. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Taxes | |
Income Taxes | 11. Income Taxes For the three months ended March 31, 2017, we recorded no income tax expense or benefit. The significant difference between our effective tax rate and the federal statutory income tax rate of 35% is primarily due to the effect of changes in the Company’s valuation allowance. During the three months ended March 31, 2017, the Company’s valuation allowance decreased by $7.2 million from December 31, 2016, bringing the total valuation allowance to $153.6 million at March 31, 2017. A valuation allowance has been recorded as management does not believe that it is more-likely-than-not that its deferred tax assets are realizable. The Company expects to incur a tax loss in the current year due to the flexibility in deducting or capitalizing current year intangible drilling costs; thus no current income taxes are anticipated to be paid. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings (Loss) Per Share | |
Earnings (Loss) Per Share | 12. Earnings (Loss) Per Share Successor The following table provides a reconciliation of net income attributable to common shareholders and weighted average common shares outstanding for basic and diluted earnings per share for the Successor Period: Three Months Ended March 31, 2017 (in thousands, except per share Net Earnings: Net income $ Participating securities—non-vested restricted stock ) Basic and diluted earnings $ Common Shares: Common shares outstanding — basic (1) Dilutive effect of potential common shares — Common shares outstanding — diluted Net Earnings Per Share: Basic $ Diluted $ Antidilutive stock options (2) Antidilutive warrants (3) (1) Weighted-average common shares outstanding for basic and diluted earnings per share purposes includes 17,533 shares of common stock that, while not issued and outstanding at March 31, 2017, are required by the Plan to be issued. (2) Amount represents options to purchase common stock that are excluded from the diluted net earnings per share calculations because of their antidilutive effect. (3) Amount represents warrants to purchase common stock that are excluded from the diluted net earnings per share calculations because of their antidilutive effect. Predecessor The Company’s nonvested stock awards, which were granted as part of the 2012 LTIP, contained nonforfeitable rights to dividends and as such, were considered to be participating securities and are included in the computation of basic and diluted earnings per share, pursuant to the two-class method. The computation of diluted earnings per share attributable to common shareholders reflects the potential dilution that could occur if securities or other contracts to issue common shares that are dilutive were exercised or converted into common shares (or resulted in the issuance of common shares) and would then share in the earnings of the Company. During the periods in which the Company records a loss from continuing operations attributable to common shareholders, securities would not be dilutive to net loss per share and conversion into common shares is assumed to not occur. Diluted net earnings (loss) per share attributable to common shareholders is calculated under both the two-class method and the treasury stock method; the more dilutive of the two calculations is presented below. The following table provides a reconciliation of net income (loss) to preferred shareholders, common shareholders, and participating securities for purposes of computing net income (loss) per share for the three months ended March 31, 2016: Three Months Ended March 31, 2016 (in thousands, except per share Net loss $ ) Preferred Dividend — Net loss attributable to shareholders $ ) Weighted average shares outstanding Basic and diluted net loss per share $ |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies The Company is involved in various matters incidental to its operations and business that might give rise to a loss contingency. These matters may include legal and regulatory proceedings, commercial disputes, claims from royalty, working interest and surface owners, property damage and personal injury claims and environmental or other matters. In addition, the Company may be subject to customary audits by governmental authorities regarding the payment and reporting of various taxes, governmental royalties and fees as well as compliance with unclaimed property (escheatment) requirements and other laws. Further, other parties with an interest in wells operated by the Company have the ability under various contractual agreements to perform audits of its joint interest billing practices. The Company vigorously defends itself in these matters. If the Company determines that an unfavorable outcome or loss of a particular matter is probable and the amount of loss can be reasonably estimated, it accrues a liability for the contingent obligation. As new information becomes available or as a result of legal or administrative rulings in similar matters or a change in applicable law, the Company’s conclusions regarding the probability of outcomes and the amount of estimated loss, if any, may change. The impact of subsequent changes to the Company’s accruals could have a material effect on its results of operations. As of March 31, 2017 and December 31, 2016, the Company’s total accrual for all loss contingencies was $1.7 million and $1.1 million, respectively. In March 2017, the Company received approval of an insurance reimbursement claim for $1.9 million. As such, the Company included the insurance reimbursement as a reduction of lease operating expenses in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2017. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation These interim financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain disclosures have been condensed or omitted from these financial statements. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete consolidated financial statements, and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K as filed with the SEC on March 30, 2017. All intercompany transactions have been eliminated in consolidation. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial position as of, and the results of operations for, all periods presented. In preparing the accompanying unaudited condensed consolidated financial statements, management has made certain estimates and assumptions that affect reported amounts in the unaudited condensed consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 852, Reorganizations , the Company adopted fresh start accounting upon emergence from the Chapter 11 Cases resulting in the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh start accounting, as well as the effects of the implementation of the Plan, the Company’s consolidated financial statements on or after October 21, 2016, are not comparable with the consolidated financial statements prior to that date. References to “Successor Period” relate to the results of operations for the period January 1, 2017 through March 31, 2017 and references to “Predecessor Period” refer to the results of operations from January 1, 2016 through March 31, 2016. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers (Topic 606) ” (“ASU 2014-09”). ASU 2014-09 provides guidance concerning the recognition and measurement of revenue from contracts with customers. The objective of ASU 2014-09 is to increase the usefulness of information in the financial statements regarding the nature, timing and uncertainty of revenues. The Company plans to review contracts for each revenue stream identified within the Company’s business. Through this process, the Company will determine and document the expected changes in revenue recognition upon adoption of the revised guidance and then evaluate the potential information technology and internal control changes that will be required for adoption based on the findings from the Company’s contract review process. The Company will conduct the contract review process throughout 2017 and, as a result, areas of impact may be identified. The Company cannot reasonably quantify the impact of adoption at this time. The Company expects to complete the assessment of ASU 2014-09, including the transition method, in the latter half of 2017. In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. All leases create an asset and a liability for the lessee and therefore recognition of those lease assets and lease liabilities is required by ASU 2016-02. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the initial evaluation and planning stages for ASU 2016-02 and does not expect to move beyond this stage until completion of its evaluation of ASU 2014-09, which is expected to occur in the latter half of 2017. |
Fair Value Measurements of Fi22
Fair Value Measurements of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements of Financial Instruments | |
Schedule of derivative instruments measured at fair value | Fair Value Measurements at March 31, 2017 Significant Other Significant Quoted Prices in Active Observable Inputs Unobservable Inputs Total (in thousands) Derivative Assets: Commodity derivative oil swaps $ — $ $ — $ Commodity derivative gas swaps $ — $ $ — $ Commodity derivative oil collars $ — $ $ — $ Commodity derivative gas collars $ — $ $ — $ Total assets $ — $ $ — $ Derivative Liabilities: Commodity derivative oil swaps $ — $ — $ — $ — Commodity derivative gas swaps $ — $ ) $ — $ ) Commodity derivative oil collars $ — $ ) $ — $ ) Commodity derivative gas collars $ — $ ) $ — $ ) Total liabilities $ — $ ) $ — $ ) |
Risk Management and Derivativ23
Risk Management and Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Risk Management and Derivative Instruments | |
Schedule of commodity derivative contracts | During the three months ended March 31, 2017, the Company entered into various oil and natural gas derivative contracts that extend through March 2018, summarized as follows: Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended March 31, 2017 June 30, 2017 (1) September 30, 2017 (1) December 31, 2017 (1) March 31, 2018 (1) NYMEX WTI Fixed swaps Hedge position (Bbls) — Weighted average strike price $ $ $ $ $ — Collars Hedge position (Bbls) — Weighted average ceiling price $ $ $ $ $ — Weighted average floor price $ $ $ $ $ — Three way collars Hedge position (Bbls) — — Weighted average ceiling price $ — $ — $ $ $ Weighted average floor price $ — $ — $ $ $ Weighted average sub-floor price $ — $ — $ $ $ NYMEX HENRY HUB Fixed swaps Hedge position (MMBtu) — Weighted average strike price $ — $ $ $ $ Collars Hedge position (MMBtu) — — — — Weighted average ceiling price $ $ — $ — $ — $ — Weighted average floor price $ $ — $ — $ — $ — Three way collars Hedge position (MMBtu) — — — Weighted average ceiling price $ — $ — $ — $ $ Weighted average floor price $ — $ — $ — $ $ Weighted average sub-floor price $ — $ — $ — $ $ (1) Positions shown represent open commodity derivative contract positions as of March 31, 2017. The Company did not have any open commodity derivative contract positions as of December 31, 2016. Subsequent to March 31, 2017, the Company entered into various oil and natural gas derivative contracts that extend through September 2018, summarized as follows: Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended June 30, September 30, December 31, March 31, June 30, September 30, NYMEX WTI Fixed swaps Hedge position (Bbls) — — — — — — Weighted average strike price $ — $ — $ — $ — $ — $ — Collars Hedge position (Bbls) — — — — — — Weighted average ceiling price $ — $ — $ — $ — $ — $ — Weighted average floor price $ — $ — $ — $ — $ — $ — Three way collars Hedge position (Bbls) — — — Weighted average ceiling price $ — $ — $ — $ $ $ Weighted average floor price $ — $ — $ — $ $ $ Weighted average sub-floor price $ — $ — $ — $ $ $ NYMEX HENRY HUB Fixed swaps Hedge position (MMBtu) — — — — — — Weighted average strike price $ — $ — $ — $ — $ — $ — Collars Hedge position (MMBtu) — — — Weighted average ceiling price $ $ $ $ — $ — $ — Weighted average floor price $ $ $ $ — $ — $ — Three way collars Hedge position (MMBtu) — — — — — Weighted average ceiling price $ — $ — $ — $ $ — $ — Weighted average floor price $ — $ — $ — $ $ — $ — Weighted average sub-floor price $ — $ — $ — $ $ — $ — |
Schedule of fair value of commodity derivative instruments by balance sheet classification | The following table summarizes the net fair values of commodity derivative instruments by the appropriate balance sheet classification in the Company’s unaudited condensed consolidated balance sheets at March 31, 2017 (in thousands): Type Balance Sheet Location (1) March 31, 2017 Fixed swaps Derivative financial instruments – Current Assets $ Collars Derivative financial instruments – Current Assets Total derivative fair value at period end $ (1) The fair values of commodity derivative instruments reported in the Company’s unaudited condensed consolidated balance sheets are subject to netting arrangements and qualify for net presentation. |
Summary of location and fair values amounts of all commodity derivative instruments as well as the gross recognized derivative assets, liabilities and amounts offset in the unaudited condensed consolidated balance sheet | The following table summarizes the location and fair value amounts of all commodity derivative instruments in the unaudited condensed consolidated balance sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the unaudited condensed consolidated balance sheets at March 31, 2017 (in thousands): March 31, 2017 Not Designated as Gross Recognized Gross Amounts Net Recognized ASC 815 Hedges Balance Sheet Location Classification Assets/Liabilities Offset Assets/Liabilities Derivative Assets: Commodity contracts Derivative financial instruments – current $ $ ) $ Commodity contracts Derivative financial instruments – noncurrent — — — $ $ ) $ Derivative Liabilities: Commodity contracts Derivative financial instruments – current $ ) $ $ — Commodity contracts Derivative financial instruments – noncurrent — — — $ ) $ $ — |
Schedule of net cash received for commodity derivative contracts and unrealized net gains related to the change in fair value of derivative instruments - net for the periods | The following table presents net cash received for commodity derivative contracts and unrealized net gains recorded by the Company related to the change in fair value of the derivative instruments in “Gains on commodity derivative contracts—net” for the periods presented (in thousands): For the Three Months Ended March 31, 2017 Net cash received for commodity derivative contracts $ Unrealized net gains Gains on commodity derivative contracts—net $ |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property and Equipment | |
Schedule of property and equipment | March 31, 2017 December 31, 2016 (in thousands) Oil and gas properties, on the basis of full-cost accounting: Proved properties $ $ Unproved properties Other property and equipment Less accumulated depreciation, depletion and amortization ) ) Net property and equipment $ $ |
Schedule of internal costs capitalized | The Company capitalizes internal costs directly related to exploration and development activities to oil and gas properties. During the three months ended March 31, 2017 and 2016, the Company capitalized the following (in thousands): Successor Predecessor Three Months Three Months March 31, 2017 March 31, 2016 Internal costs capitalized to oil and gas properties (1) $ $ (1) Inclusive of $0.7 million and $0.2 million of qualifying share-based compensation expense for the three months ended March 31, 2017 and 2016, respectively. |
Schedule of depletion expense related to oil and gas properties | Successor Predecessor Successor Predecessor Three Months Three Months Three Months Three Months March 31, 2017 March 31, 2016 March 31, 2017 March 31, 2016 (in thousands) (in thousands) (per Boe) (per Boe) Depletion expense $ $ $ $ Depreciation on other property and equipment Depreciation, depletion, and amortization $ $ $ $ |
Other Noncurrent Assets (Tables
Other Noncurrent Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Other Noncurrent Assets | |
Schedule of the components of other noncurrent assets | March 31, 2017 December 31, 2016 (in thousands) Deferred financing costs associated with the Exit Facility $ $ Field equipment inventory Other Other noncurrent assets $ $ |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accrued Liabilities | |
Schedule of the components of accrued liabilities | March 31, 2017 December 31, 2016 (in thousands) Accrued oil and gas capital expenditures $ $ Accrued revenue and royalty distributions Accrued lease operating and workover expense Accrued interest Accrued taxes Compensation and benefit related accruals Other Accrued liabilities $ $ |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Asset Retirement Obligations | |
Schedule of changes in the Company's AROs | The following table reflects the changes in the Company’s AROs for the periods presented (in thousands): Successor Predecessor Three Months Three Months March 31, 2017 March 31, 2016 Asset retirement obligations — beginning of period $ $ Liabilities incurred Revisions — — Liabilities settled ) ) Liabilities eliminated through asset sales — — Current period accretion expense Asset retirement obligations — end of period $ $ |
Equity and Share-Based Compen28
Equity and Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity and Share-Based Compensation | |
Summary of changes in the number of outstanding shares | Common Treasury Share count as of December 31, 2016 — Common stock issued — — Acquisition of treasury stock — — Share count as of March 31, 2017 — (1) Treasury stock represents the net settlement on vesting of restricted stock necessary to satisfy the minimum statutory tax withholding requirements. |
Summary of non-vested restricted stock unit award activity | Restricted Stock Weighted Average Non-vested shares outstanding at December 31, 2016 $ Granted $ Vested — $ — Forfeited ) $ Non-vested shares outstanding at March 31, 2017 $ |
Schedule of assumptions used to estimate fair value of stock option awards | Awards Issued in Risk-free interest rate (1) % Dividend yield — Expected option life (2) Expected volatility (3) % Calculated fair value per stock option $ (1) (2) (3) |
Summary of non-vested stock option activity | Options Range of Weighted Average Weighted Stock options outstanding at December 31, 2016 $ Granted $ $ Vested — $ — $ — — Forfeited ) $ — Stock options outstanding at March 31, 2017 $ |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Schedule of reconciliation of net income attributable to common shareholders and weighted average common shares outstanding for basic and diluted earnings per share | Three Months Ended March 31, 2017 (in thousands, except per share Net Earnings: Net income $ Participating securities—non-vested restricted stock ) Basic and diluted earnings $ Common Shares: Common shares outstanding — basic (1) Dilutive effect of potential common shares — Common shares outstanding — diluted Net Earnings Per Share: Basic $ Diluted $ Antidilutive stock options (2) Antidilutive warrants (3) (1) Weighted-average common shares outstanding for basic and diluted earnings per share purposes includes 17,533 shares of common stock that, while not issued and outstanding at March 31, 2017, are required by the Plan to be issued. (2) Amount represents options to purchase common stock that are excluded from the diluted net earnings per share calculations because of their antidilutive effect. (3) Amount represents warrants to purchase common stock that are excluded from the diluted net earnings per share calculations because of their antidilutive effect. |
Predecessor | |
Schedule of reconciliation of net income (loss) to preferred shareholders, common shareholders, and participating securities for purposes of computing net income (loss) per share | Three Months Ended March 31, 2016 (in thousands, except per share Net loss $ ) Preferred Dividend — Net loss attributable to shareholders $ ) Weighted average shares outstanding Basic and diluted net loss per share $ |
Organization and Business (Deta
Organization and Business (Details) | 3 Months Ended |
Mar. 31, 2017segment | |
Organization and Business | |
Number of reportable segments | 1 |
Fair Value Measurements of Fi31
Fair Value Measurements of Financial Instruments (Details) $ in Thousands | Mar. 31, 2017USD ($)item |
Fair Value Measurements of Financial Instruments | |
Number of bank counterparties for company's commodity derivative contracts | item | 2 |
Recurring | Total | Commodity Derivatives | |
Derivative Assets: | |
Total assets | $ 5,246 |
Derivative Liabilities: | |
Gross Recognized Liabilities | (1,192) |
Recurring | Total | Commodity Derivatives | Swaps | Oil | |
Derivative Assets: | |
Total assets | 2,267 |
Recurring | Total | Commodity Derivatives | Swaps | Gas | |
Derivative Assets: | |
Total assets | 807 |
Derivative Liabilities: | |
Gross Recognized Liabilities | (64) |
Recurring | Total | Commodity Derivatives | Collars | Oil | |
Derivative Assets: | |
Total assets | 1,735 |
Derivative Liabilities: | |
Gross Recognized Liabilities | (771) |
Recurring | Total | Commodity Derivatives | Collars | Gas | |
Derivative Assets: | |
Total assets | 437 |
Derivative Liabilities: | |
Gross Recognized Liabilities | (357) |
Recurring | Significant Other Observable Inputs (Level 2) | Commodity Derivatives | |
Derivative Assets: | |
Total assets | 5,246 |
Derivative Liabilities: | |
Gross Recognized Liabilities | (1,192) |
Recurring | Significant Other Observable Inputs (Level 2) | Commodity Derivatives | Swaps | Oil | |
Derivative Assets: | |
Total assets | 2,267 |
Recurring | Significant Other Observable Inputs (Level 2) | Commodity Derivatives | Swaps | Gas | |
Derivative Assets: | |
Total assets | 807 |
Derivative Liabilities: | |
Gross Recognized Liabilities | (64) |
Recurring | Significant Other Observable Inputs (Level 2) | Commodity Derivatives | Collars | Oil | |
Derivative Assets: | |
Total assets | 1,735 |
Derivative Liabilities: | |
Gross Recognized Liabilities | (771) |
Recurring | Significant Other Observable Inputs (Level 2) | Commodity Derivatives | Collars | Gas | |
Derivative Assets: | |
Total assets | 437 |
Derivative Liabilities: | |
Gross Recognized Liabilities | $ (357) |
Risk Management and Derivativ32
Risk Management and Derivative Instruments - By Nature (Details) $ in Millions | Mar. 31, 2017USD ($) |
Not designated as Hedging Instrument | Commodity Derivatives | |
Risk Management and Derivative Instruments | |
Maximum loss exposure under commodity derivative contracts on failure of the entity's counterparty's performance | $ 4.1 |
Risk Management and Derivativ33
Risk Management and Derivative Instruments- Hedging (Details) - Designated as Hedging Instrument - NYMEX | 1 Months Ended | 3 Months Ended |
Apr. 30, 2017MMBTU$ / bbl$ / MMBTUbbl | Mar. 31, 2017MMBTU$ / bbl$ / MMBTUbbl | |
WTI | Swap Contract Quarter Ended March 31, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (Bbls) | bbl | 105,500 | |
Swap weighted average strike price | 55.17 | |
WTI | Swap Contract Quarter Ended June 30, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (Bbls) | bbl | 227,500 | |
Swap weighted average strike price | 55.12 | |
WTI | Swap Contract Quarter Ended September 30, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (Bbls) | bbl | 207,000 | |
Swap weighted average strike price | 55.29 | |
WTI | Swap Contract Quarter Ended December 31, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (Bbls) | bbl | 207,000 | |
Swap weighted average strike price | 55.29 | |
WTI | Collar Contract Quarter Ended March 31, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (Bbls) | bbl | 74,500 | |
Weighted average floor price | 50 | |
Weighted average ceiling price | 59.68 | |
WTI | Collar Contract Quarter Ended June 30, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (Bbls) | bbl | 136,500 | |
Weighted average floor price | 50 | |
Weighted average ceiling price | 59.73 | |
WTI | Collar Contract Quarter Ended September 30, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (Bbls) | bbl | 46,000 | |
Weighted average floor price | 50 | |
Weighted average ceiling price | 60 | |
WTI | Collar Contract Quarter Ended December 31, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (Bbls) | bbl | 46,000 | |
Weighted average floor price | 50 | |
Weighted average ceiling price | 60 | |
WTI | Three Way Collar Contract Quarter Ended September 30, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (Bbls) | bbl | 115,000 | |
Weighted average floor price | 50 | |
Weighted average ceiling price | 62.80 | |
Weighted average sub-floor price | 40 | |
WTI | Three Way Collar Contract Quarter Ended December 31, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (Bbls) | bbl | 115,000 | |
Weighted average floor price | 50 | |
Weighted average ceiling price | 62.80 | |
Weighted average sub-floor price | 40 | |
WTI | Three Way Collar Contract Quarter Ended March 31, 2018 | ||
Risk Management and Derivative Instruments | ||
Hedge position (Bbls) | bbl | 90,000 | 135,000 |
Weighted average floor price | 50 | 50 |
Weighted average ceiling price | 60.10 | 63.50 |
Weighted average sub-floor price | 40 | 40 |
WTI | Three Way Collar Contract Quarter Ended June 30, 2018 | ||
Risk Management and Derivative Instruments | ||
Hedge position (Bbls) | bbl | 182,000 | |
Weighted average floor price | 50 | |
Weighted average ceiling price | 60.65 | |
Weighted average sub-floor price | 40 | |
WTI | Three Way Collar Contract Quarter Ended September 30, 2018 | ||
Risk Management and Derivative Instruments | ||
Hedge position (Bbls) | bbl | 138,000 | |
Weighted average floor price | 50 | |
Weighted average ceiling price | 61 | |
Weighted average sub-floor price | 40 | |
HENRY HUB | Swap Contract Quarter Ended June 30, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (MMBtu) | MMBTU | 2,912,000 | |
Swap weighted average strike price | $ / MMBTU | 3.38 | |
HENRY HUB | Swap Contract Quarter Ended September 30, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (MMBtu) | MMBTU | 2,944,000 | |
Swap weighted average strike price | $ / MMBTU | 3.38 | |
HENRY HUB | Swap Contract Quarter Ended December 31, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (MMBtu) | MMBTU | 1,907,000 | |
Swap weighted average strike price | $ / MMBTU | 3.43 | |
HENRY HUB | Swap Contract Quarter Ended March 31, 2018 | ||
Risk Management and Derivative Instruments | ||
Hedge position (MMBtu) | MMBTU | 1,350,000 | |
Swap weighted average strike price | $ / MMBTU | 3.47 | |
HENRY HUB | Collar Contract Quarter Ended March 31, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (MMBtu) | MMBTU | 1,298,000 | |
Weighted average floor price | $ / MMBTU | 3.10 | |
Weighted average ceiling price | $ / MMBTU | 3.70 | |
HENRY HUB | Collar Contract Quarter Ended June 30, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (MMBtu) | MMBTU | 244,000 | |
Weighted average floor price | $ / MMBTU | 3.15 | |
Weighted average ceiling price | $ / MMBTU | 3.63 | |
HENRY HUB | Collar Contract Quarter Ended September 30, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (MMBtu) | MMBTU | 368,000 | |
Weighted average floor price | $ / MMBTU | 3.15 | |
Weighted average ceiling price | $ / MMBTU | 3.63 | |
HENRY HUB | Collar Contract Quarter Ended December 31, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (MMBtu) | MMBTU | 551,000 | |
Weighted average floor price | $ / MMBTU | 3.23 | |
Weighted average ceiling price | $ / MMBTU | 3.84 | |
HENRY HUB | Three Way Collar Contract Quarter Ended December 31, 2017 | ||
Risk Management and Derivative Instruments | ||
Hedge position (MMBtu) | MMBTU | 610,000 | |
Weighted average floor price | $ / MMBTU | 3.25 | |
Weighted average ceiling price | $ / MMBTU | 4.30 | |
Weighted average sub-floor price | $ / MMBTU | 2.50 | |
HENRY HUB | Three Way Collar Contract Quarter Ended March 31, 2018 | ||
Risk Management and Derivative Instruments | ||
Hedge position (MMBtu) | MMBTU | 630,000 | 900,000 |
Weighted average floor price | $ / MMBTU | 3.25 | 3.25 |
Weighted average ceiling price | $ / MMBTU | 4.50 | 4.30 |
Weighted average sub-floor price | $ / MMBTU | 2.50 | 2.50 |
Risk Management and Derivativ34
Risk Management and Derivative Instruments- Balance Sheet Presentation (Details) - Commodity Derivatives - Not designated as Hedging Instrument $ in Thousands | Mar. 31, 2017USD ($) |
Total derivative fair value at period end | $ 4,054 |
Derivative assets: | |
Gross Recognized Assets | 5,246 |
Gross Amounts Offset, Assets | (1,192) |
Net Recognized Fair Value Assets | 4,054 |
Derivative liabilities: | |
Gross Recognized Liabilities | 1,192 |
Gross Amounts Offset, Liabilities | 1,192 |
Swaps | |
Total derivative fair value at period end | 3,010 |
Collars | |
Total derivative fair value at period end | 1,044 |
Current Assets | |
Derivative assets: | |
Gross Recognized Assets | 5,246 |
Gross Amounts Offset, Assets | (1,192) |
Net Recognized Fair Value Assets | 4,054 |
Current Liabilities | |
Derivative liabilities: | |
Gross Recognized Liabilities | 1,192 |
Gross Amounts Offset, Liabilities | $ 1,192 |
Risk Management and Derivativ35
Risk Management and Derivative Instruments - Gain Loss (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Gains (losses) on Commodity Derivative Contracts | |
Net cash received for commodity derivative contracts | $ (811) |
Gains on commodity derivative contracts - net | 4,865 |
Not designated as Hedging Instrument | |
Gains (losses) on Commodity Derivative Contracts | |
Net cash received for commodity derivative contracts | 811 |
Unrealized net gains | 4,054 |
Gains on commodity derivative contracts - net | $ 4,865 |
Property and Equipment (Details
Property and Equipment (Details) $ in Thousands | 2 Months Ended | 3 Months Ended | |
Dec. 31, 2016USD ($) | Mar. 31, 2017USD ($)$ / Boe | Mar. 31, 2016USD ($)$ / Boe | |
Property and equipment | |||
Proved properties | $ 573,150 | $ 620,090 | |
Unproved properties | 65,080 | 52,611 | |
Other property and equipment | 6,339 | 6,427 | |
Less accumulated depreciation, depletion and amortization | (12,974) | (28,316) | |
Net property and equipment | 631,595 | 650,812 | |
Other information | |||
Proceeds from the sale of oil and gas equipment | 1,350 | ||
Depreciation, depletion, and amortization | 15,342 | ||
Oil and Gas Properties | |||
Other information | |||
Internal costs capitalized to oil and gas properties | 3,017 | ||
Capitalized qualifying share-based compensation expense | 700 | ||
Proceeds from the sale of oil and gas equipment | 1,400 | ||
Gain or loss recognized on disposal of certain oil and gas equipment | 0 | ||
Depletion expense | 14,753 | ||
Depreciation on other property and equipment | 589 | ||
Depreciation, depletion, and amortization | $ 15,342 | ||
Depletion expense (per Boe) | $ / Boe | 6.96 | ||
Depreciation on other property and equipment (per Boe) | $ / Boe | 0.28 | ||
Depreciation, depletion, and amortization (per Boe) | $ / Boe | 7.24 | ||
Impairment of unproved properties | $ 0 | $ 0 | |
Other Property and Equipment | Minimum | |||
Other information | |||
Estimated useful lives | 5 years | ||
Other Property and Equipment | Maximum | |||
Other information | |||
Estimated useful lives | 7 years | ||
Predecessor | |||
Other information | |||
Impairments of oil and gas properties | $ 127,734 | ||
Depreciation, depletion, and amortization | 24,835 | ||
Predecessor | Oil and Gas Properties | |||
Other information | |||
Internal costs capitalized to oil and gas properties | 1,270 | ||
Capitalized qualifying share-based compensation expense | 200 | ||
Impairments of oil and gas properties | 127,700 | ||
Depletion expense | 23,742 | ||
Depreciation on other property and equipment | 1,093 | ||
Depreciation, depletion, and amortization | $ 24,835 | ||
Depletion expense (per Boe) | $ / Boe | 8.15 | ||
Depreciation on other property and equipment (per Boe) | $ / Boe | 0.37 | ||
Depreciation, depletion, and amortization (per Boe) | $ / Boe | 8.52 |
Other Noncurrent Assets (Detail
Other Noncurrent Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Other Noncurrent Assets | ||
Deferred financing costs associated with the Exit Facility | $ 1,108 | $ 1,187 |
Field equipment inventory | 2,806 | 2,619 |
Other | 1,649 | 1,649 |
Other noncurrent assets | $ 5,563 | $ 5,455 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Accrued Liabilities | ||
Accrued oil and gas capital expenditures | $ 10,309 | $ 6,118 |
Accrued revenue and royalty distributions | 26,365 | 28,262 |
Accrued lease operating and workover expense | 8,395 | 8,932 |
Accrued interest | 214 | 254 |
Accrued taxes | 2,153 | 2,537 |
Compensation and benefit related accruals | 2,547 | 3,516 |
Other | 3,148 | 4,112 |
Accrued liabilities | $ 53,131 | $ 53,731 |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Changes in Company's asset retirement obligations | ||
Asset retirement obligations - beginning of period | $ 14,200 | |
Liabilities incurred | 90 | |
Liabilities settled | (30) | |
Current period accretion expense | 276 | |
Asset retirement obligations - end of period | $ 14,536 | |
Predecessor | ||
Changes in Company's asset retirement obligations | ||
Asset retirement obligations - beginning of period | $ 18,708 | |
Liabilities incurred | 481 | |
Liabilities settled | (173) | |
Current period accretion expense | 420 | |
Asset retirement obligations - end of period | $ 19,436 |
Debt (Details)
Debt (Details) - Exit Facility $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Debt | ||
Maximum borrowing capacity | $ 170 | $ 170 |
Proceeds from revolving credit facility | 128.1 | 128.1 |
Amount Of Reduction In Borrowing Base Under Exit Facility | 40 | |
Availability under the facility | $ 0 | |
Weighted-average interest rate (as a percent) | 5.50% | |
Unamortized debt issuance costs | $ 1.1 | 1.2 |
Commitment fee (as a percent) | 0.50 | |
Capital expenditure limitation for the year ended December 31, 2017 | $ 81 | |
Capital expenditure limitation for the year ended December 31, 2018 | 85 | |
Capital expenditure limitation for the year ended December 31, 2019 | $ 78 | |
LIBOR Loans | ||
Debt | ||
Interest rate added to base rate (as a percent) | 4.50% | |
LIBOR floor rate | 1.00% | |
Minimum | ||
Debt | ||
Liquidity of the Company (as a percent) | 20 | |
Percentage of first priority mortgages to secure the Company's oil and gas properties | 95.00% | |
Maximum | ||
Debt | ||
EBITDA to interest expense coverage ratio | 3 | |
Total net indebtedness to EBITDA | 2.25 | |
Total net indebtedness to EBITDA after April 1, 2018 | 3 | |
Senior Revolving Credit Facility, due 2018 | ||
Debt | ||
Outstanding letters of credit amount | $ 1.9 | $ 1.9 |
Equity and Share-Based Compen41
Equity and Share-Based Compensation - Common Shares (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Changes in number of shares outstanding | ||
Common stock, shares issued | 24,994,867 | 24,994,867 |
Common Stock | ||
Changes in number of shares outstanding | ||
Share count at the beginning of the period (in shares) | 24,994,867 | |
Common stock issued (in shares) | ||
Acquisition of treasury stock (in shares) | ||
Share count at the end of the period (in shares) | 24,994,867 | |
Treasury Stock | ||
Changes in number of shares outstanding | ||
Common stock issued (in shares) | ||
Acquisition of treasury stock (in shares) |
Equity and Share-Based Compen42
Equity and Share-Based Compensation - 2016 Long Term Incentive Plan (Details) - 2016 LTIP - shares | Mar. 31, 2017 | Oct. 21, 2016 |
Share-Based Compensation | ||
Number of shares available for future issuance | 3,513,950 | |
Number of shares authorized | 2,131,680 |
Equity and Share-Based Compen43
Equity and Share-Based Compensation - Restricted Stock Units (Details) - Restricted Stock Units - USD ($) $ / shares in Units, $ in Millions | Apr. 21, 2017 | Mar. 31, 2017 |
2016 LTIP | ||
Additional information | ||
Unrecognized expense for share-based compensation | $ 8.8 | |
Weighted-average period for over which unrecognized expense will be recognized | 1 year 6 months | |
Restricted stock units vesting after the period | 103,301 | |
2016 LTIP | Employees | ||
Share-Based Compensation | ||
Vesting period | 3 years | |
Predecessor | ||
Restricted Stock | ||
Non-vested shares outstanding at the beginning of the period (in shares) | 685,662 | |
Granted (in shares) | 4,000 | |
Forfeited (in shares) | (7,747) | |
Non-vested shares outstanding at the end of the period (in shares) | 681,915 | |
Weighted Average Grant Date Fair Value | ||
Non-vested shares outstanding at the beginning of the period (in dollars per share) | $ 19.66 | |
Granted (in dollars per share) | 19.08 | |
Forfeited (in dollars per share) | 19.66 | |
Non-vested shares outstanding at the end of the period (in dollars per share) | $ 19.66 | |
Awards vesting on the six-month anniversary of the Effective Date | 2016 LTIP | Employees | ||
Share-Based Compensation | ||
Percentage of awards vesting on each anniversary of the grant | 16.67% | |
Awards vesting on the twelve-month anniversary of the Effective Date | 2016 LTIP | Employees | ||
Share-Based Compensation | ||
Percentage of awards vesting on each anniversary of the grant | 16.67% | |
Awards vesting on the twenty four-month anniversary of the Effective Date | 2016 LTIP | Employees | ||
Share-Based Compensation | ||
Percentage of awards vesting on each anniversary of the grant | 33.33% | |
Awards vesting on the thirty six-month anniversary of the Effective Date | 2016 LTIP | Employees | ||
Share-Based Compensation | ||
Percentage of awards vesting on each anniversary of the grant | 33.33% |
Equity and Share-Based Compen44
Equity and Share-Based Compensation - Stock Options (Details) - Stock Options $ / shares in Units, $ in Millions | Apr. 21, 2017shares | Mar. 31, 2017USD ($)item$ / sharesshares | Dec. 31, 2016$ / sharesshares |
Assumptions used to estimate fair value of stock option awards | |||
Risk-free interest rate (as a percent) | 2.11% | ||
Expected option life (in years) | 5 years 11 months 16 days | ||
Expected volatility (as a percent) | 65.00% | ||
Calculated fair value per stock option (in dollars per share) | $ / shares | $ 11.43 | ||
Number of peer companies to estimate volatility | item | 6 | ||
Expected volatility rate, minimum (as a percent) | 36.90% | ||
Expected volatility rate, maximum (as a percent) | 68.20% | ||
2016 LTIP | |||
Share-Based Compensation | |||
Vesting period | 3 years | ||
Expiration period (in years) | 10 years | ||
Options | |||
Stock options outstanding at beginning of period (in shares) | shares | 627,806 | ||
Granted (in shares) | shares | 4,000 | ||
Vested (in shares) | shares | 103,301 | ||
Forfeited (in shares) | shares | (7,747) | ||
Stock options outstanding at end of period (in shares) | shares | 624,059 | 627,806 | |
Weighted Average Exercise Price | |||
Stock options outstanding at beginning of period (in dollars per share) | $ / shares | $ 19.66 | ||
Granted (in dollars per share) | $ / shares | 19.08 | ||
Forfeited (in dollars per share) | $ / shares | 19.66 | ||
Stock options outstanding at end of period (in dollars per share) | $ / shares | $ 19.66 | $ 19.66 | |
Weighted Average Remaining Contractual Term (Years) | |||
Granted (in years) | 10 years | ||
Stock options outstanding at end of period (in years) | 9 years 7 months 6 days | 9 years 7 months 6 days | |
Additional information | |||
Unrecognized expense for share-based compensation | $ | $ 4.5 | ||
Weighted-average period for over which unrecognized expense will be recognized | 1 year 6 months | ||
Awards vesting on the six-month anniversary of the Effective Date | 2016 LTIP | |||
Share-Based Compensation | |||
Percentage of awards vesting on each anniversary of the grant | 16.67% | ||
Awards vesting on the twelve-month anniversary of the Effective Date | 2016 LTIP | |||
Share-Based Compensation | |||
Percentage of awards vesting on each anniversary of the grant | 16.67% | ||
Awards vesting on the twenty four-month anniversary of the Effective Date | 2016 LTIP | |||
Share-Based Compensation | |||
Percentage of awards vesting on each anniversary of the grant | 33.33% | ||
Awards vesting on the thirty six-month anniversary of the Effective Date | 2016 LTIP | |||
Share-Based Compensation | |||
Percentage of awards vesting on each anniversary of the grant | 33.33% |
Equity and Share-Based Compen45
Equity and Share-Based Compensation - Non-Employee Director Restricted Stock Units Containing a Market Condition (Details) - Restricted Stock Units with Market Condition - Non-employee directors - USD ($) $ / shares in Units, $ in Millions | Nov. 23, 2016 | Mar. 31, 2017 |
Share-Based Compensation | ||
Trailing average share price period based on common stock (in days) | 60 days | |
Service period (in years) | 1 year | |
Calculated fair value per restricted stock unit (in dollars per share) | $ 15.23 | |
Unrecognized expense for share-based compensation | $ 0.8 | |
Weighted-average period for over which unrecognized expense will be recognized | 7 months 6 days | |
Accrued liabilities | ||
Share-Based Compensation | ||
Liability related to market condition awards | $ 0.4 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Income Taxes | |
Income tax expense or benefit | $ 0 |
Statutory rate | 35.00% |
Decrease in valuation allowance | $ 7.2 |
Valuation allowance | 153.6 |
Current income taxes | $ 0 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings (Loss) Per Share | ||
Net income (loss) | $ 18,485 | |
Participating securities - non-vested restricted stock | (546) | |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 17,939 | |
Weighted average shares outstanding | 25,012 | |
Basic and diluted net loss per share | $ 0.72 | |
Common shares outstanding - basic | 25,012 | |
Common shares outstanding - diluted | 25,012 | |
Basic (in dollars per share) | $ 0.72 | |
Diluted (in dollars per share) | $ 0.72 | |
Shares of common stock to be issued by required Plan | 17,533 | |
Stock Options | ||
Earnings (Loss) Per Share | ||
Antidilutive securities (in shares) | 627 | |
Warrants | ||
Earnings (Loss) Per Share | ||
Antidilutive securities (in shares) | 6,626 | |
Predecessor | ||
Earnings (Loss) Per Share | ||
Net income (loss) | $ (179,274) | |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (179,274) | |
Weighted average shares outstanding | 10,621 | |
Basic and diluted net loss per share | $ (16.88) |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Contractual Obligations | ||
Loss Contingency Accrual | $ 1.7 | $ 1.1 |
Insurance Claims | ||
Contractual Obligations | ||
Insurance reimbursement claim | $ 1.9 |