Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 28, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Registrant Name | 'Diamondback Energy, Inc. | ' |
Entity Central Index Key | '0001539838 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 47,067,116 |
Consolidated_Balance_Sheet_Una
Consolidated Balance Sheet (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $53,100 | $26,358 |
Accounts receivable: | ' | ' |
Joint interest and other | 9,020 | 5,959 |
Oil and natural gas sales | 21,141 | 8,081 |
Related party | 1,121 | 772 |
Inventories | 6,228 | 6,195 |
Deferred income taxes | 423 | 1,857 |
Derivative instruments | 223 | 0 |
Prepaid expenses and other | 659 | 1,053 |
Total current assets | 91,915 | 50,275 |
Property and equipment | ' | ' |
Oil and natural gas properties, based on the full cost method of accounting ($424,556,000 and $121,245,000 excluded from amortization at September 30, 2013 and December 31, 2012, respectively) | 1,540,598 | 697,742 |
Other property and equipment | 9,168 | 2,337 |
Accumulated depletion, depreciation, amortization and impairment | -188,645 | -145,837 |
Property and equipment, net of accumulated depreciation, depletion, amortization and impairment | 1,361,121 | 554,242 |
Derivative instruments-long term | 527 | 0 |
Other assets | 12,333 | 2,184 |
Total assets | 1,465,896 | 606,701 |
Current liabilities: | ' | ' |
Accounts payable trade | 24,012 | 12,141 |
Accounts payable-related party | 271 | 18,813 |
Accrued capital expenditures | 55,190 | 29,397 |
Other accrued liabilities | 21,040 | 10,649 |
Revenues and royalties payable | 6,860 | 3,270 |
Derivative instruments | 1,933 | 4,817 |
Note payable-short term | 145 | 145 |
Total current liabilities | 109,451 | 79,232 |
Long-term debt | 450,085 | 193 |
Derivative instruments-long term | 0 | 388 |
Asset retirement obligations-long term | 2,878 | 2,125 |
Deferred income taxes-noncurrent | 80,544 | 62,695 |
Total liabilities | 642,958 | 144,633 |
Contingencies (Note 13) | ' | ' |
Stockholders’ equity: | ' | ' |
Common stock, $0.01 par value, 100,000,000 shares authorized, 47,021,035 issued and outstanding at September 30, 2013; 36,986,532 issued and outstanding at December 31, 2012 | 470 | 370 |
Additional paid-in capital | 840,079 | 513,772 |
Accumulated deficit | -17,611 | -52,074 |
Total stockholders’ equity | 822,938 | 462,068 |
Total liabilities and stockholders’ equity | $1,465,896 | $606,701 |
Consolidated_Balance_Sheet_Una1
Consolidated Balance Sheet (Unaudited) (Parentheticals) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Oil and natural gas properties, amortization excluded | $424,556 | $121,245 |
Common Stock, Par Value | $0.01 | $0.01 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 47,021,035 | 36,986,532 |
Common Stock, Shares, Outstanding | 47,021,035 | 36,986,532 |
Combined_Consolidated_Statemen
Combined Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues: | ' | ' | ' | ' |
Oil sales | $53,086 | $14,530 | $119,373 | $43,542 |
Natural gas sales | 859 | 208 | 2,586 | 605 |
Natural gas sales - related party | 704 | 370 | 1,796 | 631 |
Natural gas liquid sales | 1,970 | 671 | 5,441 | 2,246 |
Natural gas liquid sales - related party | 1,172 | 1,035 | 2,898 | 2,171 |
Total revenues | 57,791 | 16,814 | 132,094 | 49,195 |
Costs and expenses: | ' | ' | ' | ' |
Lease operating expenses | 4,718 | 3,242 | 14,527 | 8,667 |
Lease operating expenses - related party | 246 | 267 | 840 | 841 |
Production and ad valorem taxes | 3,420 | 1,194 | 7,970 | 2,992 |
Production and ad valorem taxes - related party | 133 | 99 | 325 | 199 |
Gathering and transportation | 69 | 9 | 175 | 61 |
Gathering and transportation - related party | 192 | 109 | 466 | 203 |
Depreciation, depletion and amortization | 17,423 | 6,136 | 42,976 | 16,552 |
General and administrative expenses | 1,810 | 1,323 | 6,350 | 2,803 |
General and administrative expenses - related party | 311 | 327 | 863 | 1,684 |
Asset retirement obligation accretion expense | 46 | 22 | 134 | 63 |
Total costs and expenses | 28,368 | 12,728 | 74,626 | 34,065 |
Income from operations | 29,423 | 4,086 | 57,468 | 15,130 |
Other income (expense) | ' | ' | ' | ' |
Interest income | 1 | 1 | 1 | 3 |
Interest expense | -1,089 | -1,130 | -2,109 | -3,184 |
Other income - related party | 270 | 643 | 1,047 | 1,654 |
Gain (loss) on derivative instruments, net | -4,910 | -3,148 | -1,881 | 2,017 |
Loss from equity investment | 0 | 0 | 0 | -67 |
Total other income (expense), net | -5,728 | -3,634 | -2,942 | 423 |
Income before income taxes | 23,695 | 452 | 54,526 | 15,553 |
Provision for income taxes | ' | ' | ' | ' |
Deferred income tax provision | 9,099 | 0 | 20,063 | 0 |
Net income | 14,596 | 452 | 34,463 | 15,553 |
Earnings per common share | ' | ' | ' | ' |
Basic (in dollars per share) | $0.33 | ' | $0.85 | ' |
Diluted (in dollars per share) | $0.33 | ' | $0.85 | ' |
Weighted average common shares outstanding | ' | ' | ' | ' |
Basic (in shares) | 44,385,107 | ' | 40,308,989 | ' |
Diluted (in shares) | 44,697,609 | ' | 40,523,764 | ' |
Pro forma information | ' | ' | ' | ' |
Income before income taxes, as reported | 23,695 | 452 | 54,526 | 15,553 |
Pro forma provision for income taxes | ' | 161 | ' | 5,545 |
Pro forma net income | ' | $291 | ' | $10,008 |
Pro forma earnings per common share - basic and diluted | ' | $0.02 | ' | $0.68 |
Pro forma weighted average common shares outstanding - basic and diluted | ' | 14,697,496 | ' | 14,697,496 |
Combined_Consolidated_Statemen1
Combined Consolidated Statement of Stockholders' Equity (Unaudited) (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital | Accumulated Deficit |
In Thousands, except Share data, unless otherwise specified | ||||
Balance at beginning of period at Dec. 31, 2012 | $462,068 | $370 | $513,772 | ($52,074) |
Balance at beginning of period, shares at Dec. 31, 2012 | 36,986,532 | 36,986,532 | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' |
Stock-based compensation | 1,845 | ' | 1,845 | ' |
Common shares issued in public offering, net of offering costs | 321,946 | 98 | 321,848 | ' |
Common shares issued in public offering, net of offering costs, shares | ' | 9,775,000 | ' | ' |
Exercise of stock options and vesting of restricted stock units | 2,616 | 2 | 2,614 | ' |
Exercise of stock options and awards of restricted stock, shares | ' | 259,503 | ' | ' |
Net income | 34,463 | ' | ' | 34,463 |
Balance at end of period at Sep. 30, 2013 | $822,938 | $470 | $840,079 | ($17,611) |
Balance at end of period, shares at Sep. 30, 2013 | 47,021,035 | 47,021,035 | ' | ' |
Combined_Consolidated_Statemen2
Combined Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' |
Net income | $34,463 | $15,553 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Provision for deferred income taxes | 20,063 | 0 |
Asset retirement obligation accretion expense | 134 | 63 |
Depreciation, depletion, and amortization | 42,976 | 16,552 |
Amortization of debt issuance costs | 526 | 347 |
Change in fair value of derivative instruments | -3,733 | -2,017 |
Loss from equity investment | 0 | 67 |
Equity based compensation expense | 1,426 | 873 |
Gain on sale of assets | -31 | -26 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -13,262 | -4,256 |
Accounts receivable-related party | -350 | 5,061 |
Inventories | 309 | -44 |
Prepaid expenses and other | -1,376 | 1 |
Accounts payable and accrued liabilities | 7,324 | 2,145 |
Accounts payable and accrued liabilities-related party | -82 | 2,289 |
Revenues and royalties payable | 3,260 | -740 |
Revenues and royalties payable-related party | 0 | -2,404 |
Net cash provided by operating activities | 91,647 | 33,464 |
Cash flows from investing activities: | ' | ' |
Additions to oil and natural gas properties-related party | -188,201 | -73,237 |
Additions to oil and natural gas properties-related party | -11,594 | -8,264 |
Acquisition of Gulfport properties | -18,550 | 0 |
Acquisition of mineral interests | -440,000 | 0 |
Acquisition of leasehold interests | -166,635 | 0 |
Purchase of other property and equipment | -4,965 | -778 |
Proceeds from sale of property and equipment | 62 | 26 |
Settlement of non-hedge derivative instruments | -289 | -7,025 |
Receipt on derivative margins | 0 | 2,325 |
Net cash used in investing activities | -830,172 | -86,953 |
Cash flows from financing activities: | ' | ' |
Proceeds from borrowings on credit facility | 49,000 | 15,000 |
Repayment on credit facility | -49,000 | 0 |
Proceeds from senior notes | 450,000 | 0 |
Proceeds from note payable - related party | 0 | 30,045 |
Debt issuance costs | -9,524 | -72 |
Public offering costs | -505 | -1,009 |
Proceeds from public offering | 322,680 | 0 |
Exercise of stock options | 2,616 | 0 |
Contributions by members | 0 | 4,008 |
Net cash provided by financing activities | 765,267 | 47,972 |
Net increase (decrease) in cash and cash equivalents | 26,742 | -5,517 |
Cash and cash equivalents at beginning of period | 26,358 | 6,959 |
Cash and cash equivalents at end of period | 53,100 | 1,442 |
Supplemental disclosure of cash flow information: | ' | ' |
Interest paid, net of capitalized interest | 383 | 2,778 |
Supplemental disclosure of non-cash transactions: | ' | ' |
Asset retirement obligation incurred | 162 | 145 |
Asset retirement obligation acquired | 471 | 0 |
Distribution of equity method investments | 0 | 10,504 |
Note payable exchanged for equipment | $0 | $411 |
Description_of_the_Business_an
Description of the Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Description of the Business and Basis of Presentation | ' |
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | |
Organization and Description of the Business | |
Diamondback Energy, Inc. (“Diamondback” or the “Company”) together with its subsidiaries, is an independent oil and gas company currently focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. Diamondback was incorporated in Delaware on December 30, 2011, and did not conduct any material business operations until October 11, 2012 when Diamondback merged with its parent entity, Diamondback Energy LLC, with Diamondback continuing as the surviving entity (the “Merger”). Prior to the Merger, Diamondback Energy LLC was a holding company and did not conduct any material business operations other than its ownership of Diamondback’s common stock and the membership interests in Diamondback O&G LLC (formerly known as Windsor Permian LLC, or “Windsor Permian”). As a result of the Merger, Windsor Permian became a wholly-owned subsidiary of Diamondback. Also on October 11, 2012, Wexford Capital LP (“Wexford”), our equity sponsor, caused all of the outstanding equity interests in Windsor UT LLC (“Windsor UT”) to be contributed to Windsor Permian prior to the Merger in a transaction referred to as the “Windsor UT Contribution”. The Windsor UT Contribution was treated as a combination of entities under common control with assets and liabilities transferred at their carrying amounts in a manner similar to a pooling of interests. We refer to the historical results of Windsor Permian and Windsor UT prior to October 11, 2012 as our “Predecessors”. | |
Immediately after the Merger on October 11, 2012, Diamondback acquired from Gulfport Energy Corporation (“Gulfport”) all of its oil and natural gas interests in the Permian Basin (the “Gulfport properties”) in exchange for shares of Diamondback common stock and a promissory note in a transaction referred to as the “Gulfport transaction”. The Gulfport transaction was treated as a business combination accounted for under the acquisition method of accounting with the identifiable assets and liabilities recognized at fair value on the date of transfer. See Note 3—Acquisitions for information regarding the acquisition. | |
On October 17, 2012, the Company completed its initial public offering (“IPO”) of 14,375,000 shares of common stock, which included 1,875,000 shares of common stock issued pursuant to an option to purchase additional shares granted to the underwriters. The stock was sold to the public at $17.50 per share and the Company received net proceeds of approximately $234.1 million from the sale of these shares of common stock, net of offering expenses and underwriting discounts and commissions. | |
In the first quarter of 2013, Windsor UT merged with and into Windsor Permian and Windsor Permian, the surviving entity in the merger, was renamed Diamondback O&G LLC (“Diamondback O&G”). | |
On May 21, 2013, the Company completed an underwritten primary public offering of 5,175,000 shares of common stock, which included 675,000 shares of common stock issued pursuant to an option to purchase additional shares granted to the underwriters. The stock was sold to the public at $29.25 per share and the Company received net proceeds of approximately $144.4 million from the sale of these shares of common stock, net of offering expenses and underwriting discounts and commissions. | |
On June 24, 2013, Gulfport and certain entities controlled by Wexford completed an underwritten secondary public offering of 6,000,000 shares of the Company’s common stock and, on July 5, 2013, the underwriters purchased an additional 869,222 shares of the Company’s common stock from these selling stockholders pursuant to an option to purchase such additional shares granted to the underwriters. The shares were sold to the public at $34.75 per share and the selling stockholders received all proceeds from this offering. | |
In August 2013, the Company completed an underwritten public offering of 4,600,000 shares of common stock, which included 600,000 shares of common stock issued pursuant to an option to purchase additional shares granted to the underwriters. The stock was sold the public at $40.25 per share and the Company received net proceeds of approximately $177.5 million from the sale of these shares of common stock, net of offering expenses and underwriting discounts and commissions. | |
In September 2013, we completed an offering of $450.0 million principal amount of our 7.625% Senior Notes due 2021. See Note 7 below. | |
Basis of Presentation | |
These financial statements have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). They reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for interim periods, on a basis consistent with the annual audited financial statements. All such adjustments are of a normal recurring nature. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted pursuant to such rules and regulations, although the Company believes the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10–Q should be read in conjunction with the Company’s most recent Annual Report on Form 10–K for the fiscal year ended December 31, 2012, which contains a summary of the Company’s significant accounting policies and other disclosures. | |
Transfers of a business between entities under common control are accounted for as if the transfer occurred at the beginning of the period, and prior years are retrospectively adjusted to furnish comparative information. As discussed above, the Windsor UT Contribution was accounted for as a transaction between entities under common control. Thus, the accompanying combined consolidated financial statements and related notes of the Company have been retrospectively adjusted to include the historical results of Windsor UT at historical carrying values and its operations prior to October 11, 2012, the effective date of the Windsor UT Contribution. The accompanying financial statements and related notes presented herein represent the combined results of operations and cash flows of our Predecessors through October 11, 2012, and the Company and its wholly-owned subsidiaries consolidated financial position, results of operations, cash flows and equity subsequent to October 11, 2012. All intercompany balances and transactions are eliminated in consolidation. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Use of Estimates | |
Certain amounts included in or affecting the Company’s combined consolidated financial statements and related disclosures must be estimated by management, requiring certain assumptions to be made with respect to values or conditions that cannot be known with certainty at the time the combined consolidated financial statements are prepared. These estimates and assumptions affect the amounts the Company reports for assets and liabilities and the Company’s disclosure of contingent assets and liabilities at the date of the combined consolidated financial statements. Actual results could differ from those estimates. | |
The Company evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods the Company considers reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from the Company’s estimates. Any effects on the Company’s business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Significant items subject to such estimates and assumptions include estimates of proved oil and natural gas reserves and related present value estimates of future net cash flows therefrom, the carrying value of oil and natural gas properties, asset retirement obligations, the fair value determination of acquired assets and liabilities, stock-based compensation, fair value estimates of commodity derivatives and estimates of income taxes. | |
Reclassifications | |
The Company has reclassified certain prior year amounts to conform with the current year’s presentation. The Company has reclassified ad valorem taxes from lease operating expenses to production and ad valorem taxes. | |
Unaudited Pro Forma Income Taxes | |
Diamondback was formed as a holding company on December 30, 2011, and did not conduct any material business operations prior to the Merger. Diamondback is a C-Corporation under the Internal Revenue Code and is subject to income taxes. The Company computed a pro forma income tax provision as if the Company and our Predecessors were subject to income taxes since December 31, 2011. The pro forma tax provision has been calculated at a rate based upon a federal corporate level tax rate and a state tax rate, net of federal benefit, incorporating permanent differences. | |
Unaudited Pro Forma Earnings per Share | |
The Company’s pro forma basic earnings per share amounts have been computed based on the weighted-average number of shares of common stock outstanding for the period, as if the common shares issued upon the Merger were outstanding for the entire year. Diluted earnings per share reflects the potential dilution, using the treasury stock method, which assumes that options were exercised and restricted stock awards and units were fully vested. During periods in which the Company realizes a net loss, options and restricted stock awards would not be dilutive to net loss per share and conversion into common stock is assumed not to occur. | |
Debt Issuance Costs | |
Costs incurred of $10.3 million upon the issuance of the 7.625% Senior Notes due 2021 were capitalized and are being amortized over the term of the Senior Notes using the effective interest method. The Company includes unamortized costs in other assets in its consolidated balance sheets. |
Acquisitions
Acquisitions | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Business Combinations [Abstract] | ' | |||||||||
Acquisitions | ' | |||||||||
ACQUISITIONS | ||||||||||
2013 Activity | ||||||||||
In September 2013, the Company completed two separate acquisitions of additional leasehold interests in the Permian Basin from unrelated third party sellers for an aggregate purchase price of $165.0 million, subject to certain adjustments. The first of these acquisitions closed on September 4, 2013 when the Company acquired certain assets located in northwestern Martin County, Texas, consisting of a 100% working interest (80% net revenue interest) in 4,506 gross and net acres, with 18 gross and net producing vertical wells and one well waiting on completion, an estimated 1,199 MBOE of proved developed reserves (including 88 MBOE attributable to one PDNP well) as of September 1, 2013 and 457 gross (365 net) BOE per day of production during July 2013. The second of these acquisitions closed on September 26, 2013, when the Company acquired certain assets located primarily in southwestern Dawson County, Texas, consisting of a 70% working interest (54% net revenue interest) in 9,390 gross (6,638 net) acres, with 32 gross (23 net) producing vertical wells, an estimated 907 MBOE of proved developed reserves (including 45 MBOE attributable to one PDNP well) as of September 1, 2013 and 777 gross (417 net) BOE per day of production during June 2013. These acquisitions were funded with a portion of the net proceeds from the August 2013 equity offering discussed in Note 1 above. | ||||||||||
On September 19, 2013, the Company completed the acquisition of the mineral interests underlying approximately 15,000 gross (12,500 net) acres in Midland County, Texas in the Permian Basin. The mineral interests entitle the Company to receive an average 19.5% royalty interest on all production from this acreage with no additional future capital or operating expense required. The $440.0 million purchase price was funded with the net proceeds of the Company’s offering of Senior Notes discussed in Note 7 below. | ||||||||||
2012 Activity | ||||||||||
On October 11, 2012, the Company completed the acquisition of Gulfport’s oil and natural gas interests in the Permian Basin. The following unaudited summary pro forma combined consolidated statement of operations data of Diamondback for the three months and nine months ended September 30, 2012 has been prepared to give effect to the acquisition as if it had occurred on January 1, 2011. The pro forma data are not necessarily indicative of financial results that would have been attained had the acquisition occurred on January 1, 2011. The pro forma data also necessarily exclude various operation expenses related to the Gulfport properties and the financial statements should not be viewed as indicative of operations in future periods. | ||||||||||
Three Months Ended | Nine Months Ended | |||||||||
30-Sep-12 | 30-Sep-12 | |||||||||
(Pro Forma) | (Pro Forma) | |||||||||
Pro forma total revenues | $ | 23,839,000 | $ | 70,411,000 | ||||||
Pro forma income from operations | 5,564,000 | 21,255,000 | ||||||||
Pro forma net income | 1,930,000 | (1) | 21,678,000 | (1) | ||||||
(1) This amount does not include a pro forma income tax provision relating to becoming subject to income taxes as a result of the Merger. |
Property_and_Equipment
Property and Equipment | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property and Equipment | ' | ||||||||
PROPERTY AND EQUIPMENT | |||||||||
Property and equipment includes the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Oil and natural gas properties: | |||||||||
Subject to depletion | $ | 1,116,042,000 | $ | 576,497,000 | |||||
Not subject to depletion-acquisition costs | |||||||||
Incurred in 2013 | 315,331,000 | — | |||||||
Incurred in 2012 | 106,269,000 | 117,395,000 | |||||||
Incurred in 2011 | 1,598,000 | 1,670,000 | |||||||
Incurred in 2010 | 1,358,000 | 1,647,000 | |||||||
Incurred in 2009 | — | 533,000 | |||||||
Total not subject to depletion | 424,556,000 | 121,245,000 | |||||||
Gross oil and natural gas properties | 1,540,598,000 | 697,742,000 | |||||||
Less accumulated depreciation, depletion, amortization and impairment | (187,427,000 | ) | (145,102,000 | ) | |||||
Oil and natural gas properties, net | 1,353,171,000 | 552,640,000 | |||||||
Other property and equipment | 9,168,000 | 2,337,000 | |||||||
Less accumulated depreciation | (1,218,000 | ) | (735,000 | ) | |||||
Other property and equipment, net | 7,950,000 | 1,602,000 | |||||||
Property and equipment, net of accumulated depreciation, depletion, amortization and impairment | $ | 1,361,121,000 | $ | 554,242,000 | |||||
The average depletion rate per barrel equivalent unit of production was $25.24 and $24.76 for the three months and nine months ended September 30, 2013, respectively, and $24.43 and $23.96 for the three months and nine months ended September 30, 2012, respectively. Internal costs capitalized to the full cost pool represent management’s estimate of costs incurred directly related to exploration and development activities such as geological and other administrative costs associated with overseeing the exploration and development activities. All internal costs not directly associated with exploration and development activities were charged to expense as they were incurred. Capitalized internal costs were approximately $1,038,000 and $2,678,000 for the three months and nine months ended September 30, 2013, respectively, and $1,068,000 and $2,843,000 for the three months and nine months ended September 30, 2012, respectively. Costs associated with unevaluated properties are excluded from the full cost pool until the Company has made a determination as to the existence of proved reserves. The inclusion of the Company’s unevaluated costs into the amortization base is expected to be completed within three to five years. |
Asset_Retirement_Obligation
Asset Retirement Obligation | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Asset Retirement Obligation [Abstract] | ' | |||||||
Asset Retirement Obligation | ' | |||||||
ASSET RETIREMENT OBLIGATIONS | ||||||||
The following table describes the changes to the Company’s asset retirement obligation liability for the following periods: | ||||||||
Nine Months Ended | ||||||||
September 30, | ||||||||
2013 | 2012 | |||||||
Asset retirement obligation, beginning of period | $ | 2,145,000 | $ | 1,104,000 | ||||
Additional liability incurred | 162,000 | 145,000 | ||||||
Liabilities acquired | 471,000 | — | ||||||
Liabilities settled | (14,000 | ) | — | |||||
Accretion expense | 134,000 | 63,000 | ||||||
Asset retirement obligation, end of period | 2,898,000 | 1,312,000 | ||||||
Less current portion | 20,000 | 19,000 | ||||||
Asset retirement obligations - long-term | $ | 2,878,000 | $ | 1,293,000 | ||||
The Company’s asset retirement obligations primarily relate to the future plugging and abandonment of wells and related facilities. The Company estimates the future plugging and abandonment costs of wells, the ultimate productive life of the properties, a risk-adjusted discount rate and an inflation factor in order to determine the current present value of this obligation. To the extent future revisions to these assumptions impact the present value of the existing asset retirement obligation liability, a corresponding adjustment is made to the oil and natural gas property balance. |
Equity_Method_Investments
Equity Method Investments | 9 Months Ended |
Sep. 30, 2013 | |
Equity Method Investments and Joint Ventures [Abstract] | ' |
Equity Method Investments | ' |
EQUITY METHOD INVESTMENTS | |
Bison Drilling and Field Services LLC | |
On November 15, 2010, the Company formed a wholly owned subsidiary, Bison Drilling and Field Services LLC (“Bison”), formerly known as Windsor Drilling LLC. In addition, on March 2, 2010, the Company formed a wholly owned subsidiary, West Texas Field Services LLC, which, on January 1, 2011, contributed all of its assets and liabilities to Bison and West Texas Field Services LLC was subsequently dissolved on June 12, 2012. Bison owns and operates drilling rigs and various oil and natural gas well servicing equipment. | |
Beginning on March 31, 2011, various related party investors contributed capital to Bison diluting the Company’s ownership interest. As of June 15, 2012, the Company distributed its remaining 22% interest in Bison to an entity which is controlled and managed by Wexford. As the transaction was between entities under common control, the Company recognized the distribution of $6,437,000 as an equity transaction. Bison continues to be a related party with the Company. | |
Muskie Holdings LLC | |
During 2011, the Company paid approximately $4,200,000 for land and various other capital items related to the land. On October 7, 2011, the Company contributed these assets to a newly formed entity, Muskie Holdings LLC (“Muskie”), a Delaware limited liability company now known as Muskie Proppant LLC, for a 48.6% equity interest. Through additional contributions to Muskie from a related party and various Wexford portfolio companies, the Company’s interest in Muskie decreased to 33% as of June 15, 2012. Muskie generated a loss during the period from January 1, 2012 through June 15, 2012 and the Company recorded its share of this loss. | |
As of June 15, 2012, the Company distributed its remaining interest in Muskie to an entity which is controlled and managed by Wexford. As the transaction was between entities under common control, the Company recognized the distribution of $4,067,000 as an equity transaction. Muskie continues to be a related party with the Company. |
Debt
Debt | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Debt Disclosure [Abstract] | ' | |||
Debt | ' | |||
DEBT | ||||
Senior Notes | ||||
On September 18, 2013, the Company completed an offering of $450.0 million in aggregate principal amount of 7.625% senior unsecured notes due 2021 (the “Senior Notes”). The Senior Notes bear interest at the rate of 7.625% per annum, payable semi-annually, in arrears on April 1 and October 1 of each year, commencing on April 1, 2014 and will mature on October 1, 2021. The Senior Notes are fully and unconditionally guaranteed by the Company’s subsidiaries. The net proceeds from the Senior Notes were used to fund the acquisition of mineral interests underlying approximately 15,000 gross (12,500 net) acres in Midland County, Texas in the Permian Basin. | ||||
The Senior Notes were issued under, and are governed by, an indenture among the Company, the subsidiary guarantors party thereto and Wells Fargo Bank, N.A., as the trustee (the “Indenture”). The Indenture contains certain covenants that, subject to certain exceptions and qualifications, among other things, limit the Company’s ability and the ability of the restricted subsidiaries to incur or guarantee additional indebtedness, make certain investments, declare or pay dividends or make other distributions on, or redeem or repurchase, capital stock, prepay subordinated indebtedness, sell assets including capital stock of subsidiaries, agree to payment restrictions affecting the Company’s restricted subsidiaries, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets, enter into transactions with affiliates, incur liens, engage in business other than the oil and gas business and designate certain of the Company’s subsidiaries as unrestricted subsidiaries. If the Company experiences certain kinds of changes of control or if it sells certain of its assets, holders of the Senior Notes may have the right to require the Company to repurchase their Senior Notes. | ||||
The Company will have the option to redeem the Senior Notes, in whole or in part, at any time on or after October 1, 2016 at the redemption prices (expressed as percentages of principal amount) of 105.719% for the 12-month period beginning on October 1, 2016, 103.813% for the 12-month period beginning on October 1, 2017, 101.906% for the 12-month period beginning on October 1, 2018 and 100.000% beginning on October 1, 2019 and at any time thereafter with any accrued and unpaid interest to, but not including, the date of redemption. In addition, prior to October 1, 2016, the Company may redeem all or a part of the Senior Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, plus a “make-whole” premium at the redemption date. Furthermore, before October 1, 2016, the Company may, at any time or from time to time, redeem up to 35% of the aggregate principal amount of the Senior Notes with the net cash proceeds of certain equity offerings at a redemption price of 107.625% of the principal amount of the Senior Notes being redeemed plus any accrued and unpaid interest to the date of redemption, if at least 65% of the aggregate principal amount of the Senior Notes originally issued under the Indenture remains outstanding immediately after such redemption and the redemption occurs within 120 days of the closing date of such equity offering. | ||||
In connection with the issuance of the Senior Notes, the Company and the subsidiary guarantors entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the initial purchasers on September 18, 2013, pursuant to which the Company and the subsidiary guarantors have agreed to file a registration statement with respect to an offer to exchange the Senior Notes for a new issue of substantially identical debt securities registered under the Securities Act. Under the Registration Rights Agreement, the Company also agreed to use its commercially reasonable efforts to cause the exchange offer registration statement to become effective within 360 days after the issue date of the Senior Notes and to consummate the exchange offer 30 days after effectiveness. The Company may be required to file a shelf registration statement to cover resales of the Senior Notes under certain circumstances. If the Company fails to satisfy certain of its obligations under the Registration Rights Agreement, the Company agreed to pay additional interest to the holders of the Senior Notes as specified in the Registration Rights Agreement. | ||||
Credit Facility-Wells Fargo Bank | ||||
On October 15, 2010, the Company entered into a secured revolving credit agreement with BNP Paribas, or BNP, as the administrative agent, sole book runner and lead arranger. On May 10, 2012, the revolving credit agreement was amended to provide for the resignation of BNP, and the appointment of Wells Fargo Bank, National Association, as administrative agent for the lenders. The credit agreement was amended and restated as of July 24, 2012 and again as of November 1, 2013. The credit agreement, as so amended and restated, provides for a revolving credit facility in the maximum amount of $600 million, subject to scheduled semi-annual and other elective collateral borrowing base redeterminations based on the Company’s oil and natural gas reserves and other factors (the “borrowing base”). The borrowing base is scheduled to be re-determined semi-annually with effective dates of April 1st and October 1st. In addition, the Company may request up to three additional redeterminations of the borrowing base during any 12-month period. As of November 1, 2013, the borrowing base was set at $225.0 million. | ||||
The outstanding borrowings under the credit agreement bear interest at a rate elected by the Company that is based on the prime rate or LIBOR plus margins ranging from 0.50% for prime-based loans and 1.50% for LIBOR loans to 1.50% for prime-based loans and 2.50% for LIBOR loans, in each case depending on the amount of the loan outstanding in relation to the borrowing base. The Company is obligated to pay a quarterly commitment fee ranging from 0.375% to 0.500% per year on the unused portion of the borrowing base, which fee is also dependent on the amount of the loan outstanding in relation to the borrowing base. Loan principal may be optionally repaid from time to time without premium or penalty (other than customary LIBOR breakage), and is required to be paid (a) if the loan amount exceeds the borrowing base, whether due to a borrowing base redetermination or otherwise (in some cases subject to a cure period) and (b) at the maturity date of November 1, 2018. The loan is secured by substantially all of the assets of the Company and its subsidiaries. | ||||
The credit agreement contains various affirmative, negative and financial maintenance covenants. These covenants, among other things, limit additional indebtedness, additional liens, sales of assets, mergers and consolidations, dividends and distributions, transactions with affiliates and entering into certain swap agreements and require the maintenance of the financial ratios described below. | ||||
Financial Covenant | Required Ratio | |||
Ratio of total debt to EBITDAX | Not greater than 4.0 to 1.0 | |||
Ratio of current assets to liabilities, as defined in the credit agreement | Not less than 1.0 to 1.0 | |||
EBITDAX will be annualized beginning with the quarter ended September 30, 2013 and ending with the quarter ending March 31, 2014. | ||||
The covenant prohibiting additional indebtedness allows for the issuance of unsecured debt of up to $750 million in the form of senior or senior subordinated notes and, in connection with any such issuance, the reduction of the borrowing base by 25% of the stated principal amount of each such issuance. A borrowing base reduction in connection with such issuance may require a portion of the outstanding principal of the loan to be repaid. As of November 1, 2013, the Company had $450 million of senior unsecured notes outstanding. | ||||
As of September 30, 2013, the Company was in compliance with all financial covenants under its revolving credit facility, as then in effect. The lenders may accelerate all of the indebtedness under the Company’s revolving credit facility upon the occurrence and during the continuance of any event of default. The credit agreement contains customary events of default, including non-payment, breach of covenants, materially incorrect representations, cross-default, bankruptcy and change of control. There are no cure periods for events of default due to non-payment of principal and breaches of negative and financial covenants, but non-payment of interest and breaches of certain affirmative covenants are subject to customary cure periods. | ||||
Note Payable | ||||
The Company entered into an installment payment contract with EMC Corporation for the purchase of computer equipment. The contract is payable in equal installments over a period of 36 months. As of September 30, 2013 and December 31, 2012, the Company had amounts outstanding under this note of $230,000 and $338,000, respectively. | ||||
Subordinated Note | ||||
Effective May 14, 2012, the Company issued a subordinated note to an affiliate of Wexford pursuant to which, as amended, the Wexford affiliate could, from time to time, advance up to an aggregate of $45.0 million. These advances were solely at the lender’s discretion and neither Wexford nor any of its affiliates had any commitment or obligation to provide further capital support to the Company. The note bore interest at a rate equal to LIBOR plus 0.28% or 8% per annum, whichever was lower. Interest was due quarterly in arrears beginning on July 1, 2012. Interest payments were payable in kind by adding such amounts to the principal balance of the note. The unpaid principal balance and all accrued interest on the note was due and payable in full on January 31, 2015 or the earlier completion of an initial public offering. Any indebtedness evidenced by this note was subordinate in the right of payment to any indebtedness outstanding under the Company’s revolving credit facility. Prior to the completion of the IPO, there was $30.1 million in aggregate principal and interest outstanding under this note. In connection with the IPO, the Company repaid all outstanding borrowings under the subordinated note and the subordinated note was canceled. |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||
Earnings Per Share | ' | |||||||||||
EARNINGS PER SHARE & PRO FORMA EARNINGS PER SHARE | ||||||||||||
Earnings Per Share | ||||||||||||
The Company’s basic earnings per share amounts have been computed based on the weighted-average number of shares of common stock outstanding for the period. A reconciliation of the components of basic and diluted earnings per common share is presented in the table below: | ||||||||||||
Three Months Ended September 30, 2013 | ||||||||||||
Per | ||||||||||||
Income | Shares | Share | ||||||||||
Basic: | ||||||||||||
Net income attributable to common stock | $ | 14,596,000 | 44,385,107 | $ | 0.33 | |||||||
Effect of Dilutive Securities: | ||||||||||||
Dilutive effect of potential common shares issuable | $ | — | 312,502 | |||||||||
Diluted: | ||||||||||||
Net income attributable to common stock | $ | 14,596,000 | 44,697,609 | $ | 0.33 | |||||||
Nine Months Ended September 30, 2013 | ||||||||||||
Per | ||||||||||||
Income | Shares | Share | ||||||||||
Basic: | ||||||||||||
Net income attributable to common stock | $ | 34,463,000 | 40,308,989 | $ | 0.85 | |||||||
Effect of Dilutive Securities: | ||||||||||||
Dilutive effect of potential common shares issuable | $ | — | 214,775 | |||||||||
Diluted: | ||||||||||||
Net income attributable to common stock | $ | 34,463,000 | 40,523,764 | $ | 0.85 | |||||||
Pro Forma Earnings Per Share | ||||||||||||
The Company’s pro forma basic earnings per share amounts have been computed based on the weighted-average number of shares of common stock outstanding for the period, as if the common shares issued upon the Merger were outstanding for the entire year. A reconciliation of the components of pro forma basic and diluted earnings per common share is presented in the table below: | ||||||||||||
Three Months Ended September 30, 2012 | ||||||||||||
Per | ||||||||||||
Income | Shares | Share | ||||||||||
Basic: | ||||||||||||
Pro forma net income attributable to common stock | $ | 291,000 | 14,697,496 | $ | 0.02 | |||||||
Effect of Dilutive Securities: | ||||||||||||
Dilutive effect of potential common shares issuable | $ | — | — | |||||||||
Diluted: | ||||||||||||
Pro forma net income attributable to common stock | $ | 291,000 | 14,697,496 | $ | 0.02 | |||||||
Nine Months Ended September 30, 2012 | ||||||||||||
Per | ||||||||||||
Income | Shares | Share | ||||||||||
Basic: | ||||||||||||
Pro forma net income attributable to common stock | $ | 10,008,000 | 14,697,496 | $ | 0.68 | |||||||
Effect of Dilutive Securities: | ||||||||||||
Dilutive effect of potential common shares issuable | $ | — | — | |||||||||
Diluted: | ||||||||||||
Pro forma net income attributable to common stock | $ | 10,008,000 | 14,697,496 | $ | 0.68 | |||||||
Stock_and_Equity_Based_Compens
Stock and Equity Based Compensation | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||
Stock and Equity Based Compensation | ' | |||||||||||||
STOCK AND EQUITY BASED COMPENSATION | ||||||||||||||
For the three months and nine months ended September 30, 2013, the Company incurred $749,000 and $2,105,000, respectively, of stock based compensation, of which the Company capitalized $259,000 and $679,000, respectively, pursuant to the full cost method of accounting for oil and natural gas properties. For the three months and nine months ended September 30, 2012, the Company incurred $291,000 and $873,000, respectively, of equity based compensation, of which the Company capitalized $115,000 and $338,000, respectively, pursuant to the full cost method of accounting for oil and natural gas properties. | ||||||||||||||
The following table presents the Company’s stock option activity under the 2012 Plan for the nine months ended September 30, 2013. | ||||||||||||||
Weighted Average | ||||||||||||||
Exercise | Remaining | Intrinsic | ||||||||||||
Options | Price | Term | Value | |||||||||||
(In years) | ||||||||||||||
Outstanding at December 31, 2012 | 850,000 | $ | 17.5 | |||||||||||
Granted | 63,000 | $ | 22.72 | |||||||||||
Exercised | (149,500 | ) | $ | 17.5 | ||||||||||
Expired/Forfeited | — | $ | — | |||||||||||
Outstanding at September 30, 2013 | 763,500 | $ | 17.93 | 3.03 | $ | 18,865,000 | ||||||||
Vested and Expected to vest at September 30, 2013 | 763,500 | $ | 17.93 | 3.03 | $ | 18,865,000 | ||||||||
Exercisable at September 30, 2013 | 263,000 | $ | 17.5 | 2.71 | $ | 6,612,000 | ||||||||
As of September 30, 2013, the unrecognized compensation cost related to unvested stock options was $2,079,000. Such cost is expected to be recognized over a weighted-average period of 2.0 years. | ||||||||||||||
The following table presents the Company’s restricted stock awards and units activity under the 2012 Plan for the nine months ended September 30, 2013. | ||||||||||||||
Weighted Average | ||||||||||||||
Restricted Stock | Grant-Date | |||||||||||||
Awards & Units | Fair Value | |||||||||||||
Unvested at December 31, 2012 | 206,507 | $ | 17.5 | |||||||||||
Granted | 11,099 | $ | 41.66 | |||||||||||
Vested | (58,923 | ) | $ | 18.23 | ||||||||||
Forfeited | (4,444 | ) | $ | 17.5 | ||||||||||
Unvested at September 30, 2013 | 154,239 | $ | 18.96 | |||||||||||
As of September 30, 2013, the Company’s unrecognized compensation cost related to unvested restricted stock awards and units was $2,578,000. Such cost is expected to be recognized over a weighted-average period of 1.7 years. |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
RELATED PARTY TRANSACTIONS | |
Administrative Services | |
An entity under common management provided technical, administrative and payroll services to the Company under a shared services agreement which began March 1, 2008. Through December 31, 2011, amounts charged to the Company included those costs directly attributable to the Company as well as indirect costs allocated to the Company. The reimbursement amount for indirect costs is determined by the affiliate’s management based on estimates of time devoted to the Company. The initial term of this shared service agreement was two years. Since the expiration of such two-year period on March 1, 2010, the agreement by its terms, continued on a month-to-month basis. For the three months and nine months ended September 30, 2013, the Company incurred total costs of $70,000 and $179,000, respectively. For the three months and nine months ended September 30, 2012, the Company incurred total costs of $235,000 and $4,357,000, respectively. Costs incurred unrelated to drilling activities are expensed and costs incurred in the acquisition, exploration and development of proved oil and natural gas properties have been capitalized. The expensed costs were partially offset in general and administrative expenses by overhead reimbursements of $620,000 and $1,772,000 for the three months and nine months ended September 30, 2012, respectively. As of September 30, 2013 and December 31, 2012, the Company owed the administrative services affiliate $1,000 and $13,000, respectively. These amounts are included in accounts payable-related party in the accompanying consolidated balance sheets. | |
Effective January 1, 2012, the Company entered into an additional shared services agreement with this entity. Under this agreement, the Company provides this entity and, at its request, certain affiliates, with consulting, technical and administrative services. The initial term of the additional shared services agreement is two years. Upon expiration of the initial term the agreement will continue on a month-to-month basis until canceled by either party upon thirty days prior written notice. Costs that are attributable to and billed to other affiliates are reported as other income-related party. For the three months and nine months ended September 30, 2013, the affiliate reimbursed the Company $270,000 and $1,047,000, respectively, and for the three months and nine months ended September 30, 2012, the affiliate reimbursed the Company $643,000 and $1,654,000, respectively for services under the shared services agreement. As of September 30, 2013 and December 31, 2012, the affiliate owed the Company no amounts and $1,000, respectively. These amounts are included in accounts receivable-related party in the accompanying consolidated balance sheets. | |
Operating Services | |
The Company is the operator of substantially all of its properties. As operator of these properties, the Company is responsible for the daily operations, monthly operation billings and monthly revenue disbursements for the properties. | |
As of September 30, 2013 and December 31, 2012, amounts due from an affiliate (a greater than 10% stockholder) related to joint interest billings and included in accounts receivable-related party in the accompanying consolidated balance sheets were $134,000 and $742,000, respectively. | |
Drilling Services | |
Bison has performed drilling and field services for the Company under master drilling and field service agreements. Under the Company’s most recent master drilling agreement with Bison, effective as of January 1, 2013, Bison committed to accept orders from the Company for the use of at least two of its rigs. At September 30, 2013, Bison was providing drilling services to the Company using one of its rigs. This master drilling agreement is terminable by either party on 30 days prior written notice, although neither party will be relieved of its respective obligations arising from a drilling contract being performed prior to the termination of the master drilling agreement. The Company owed Bison $270,000 as of September 30, 2013 and $120,000 as of December 31, 2012. | |
Effective September 9, 2013, the Company entered into a master service agreement with Panther Drilling Systems LLC (“Panther Drilling”), an entity controlled by Wexford, Panther Drilling provides directional drilling and other services. This master service agreement is terminable by either party on 30 days prior written notice, although neither party will be relieved of its respective obligations arising from work performed prior to the termination of the master service agreement. In the third quarter 2013, the Company began using Panther Drilling’s directional drilling services. The amount incurred in the third quarter for services performed by Panther Drilling was not material. | |
Coronado Midstream | |
The Company is party to a gas purchase agreement, dated May 1, 2009, as amended, with Coronado Midstream LLC (“Coronado Midstream”), formerly known as MidMar Gas LLC, an entity affiliated with Wexford that owns a gas gathering system and processing plant in the Permian Basin. Under this agreement, Coronado Midstream is obligated to purchase from the Company, and the Company is obligated to sell to Coronado Midstream, all of the gas conforming to certain quality specifications produced from certain of the Company’s Permian Basin acreage. Following the expiration of the initial ten year term, the agreement will continue on a year-to-year basis until terminated by either party on 30 days’ written notice. Under the gas purchase agreement, Coronado Midstream is obligated to pay the Company 87% of the net revenue received by Coronado Midstream for all components of the Company’s dedicated gas, including the liquid hydrocarbons, and the sale of residue gas, in each case extracted, recovered or otherwise processed at Coronado Midstream’s gas processing plant, and 94.56% of the net revenue received by Coronado Midstream from the sale of such gas components and residue gas, extracted, recovered or otherwise processed at Chevron’s Headlee plant. The Company recognized revenues from Coronado Midstream of $1,877,000 and $4,694,000 for the three months and nine months ended September 30, 2013, respectively, and $1,404,000 and $2,801,000 for the three months and nine months ended September 30, 2012, respectively. As of September 30, 2013 and December 31, 2012, Coronado Midstream owed the Company $987,000 and $6,000, respectively, for the Company’s portion of the net proceeds from the sale of gas, gas products and residue gas. | |
Sand Supply | |
Muskie, an entity affiliated with Wexford, holds certain rights in a lease covering land in Wisconsin for mining oil and natural gas fracture grade sand. The Company began purchasing sand from Muskie in March 2013. The Company incurred costs of zero and $234,000 for the three months and nine months ended September 30, 2013. As of September 30, 2013, the Company did not owe Muskie any amounts. | |
Midland Lease | |
Effective May 15, 2011, the Company occupied corporate office space in Midland, Texas under a lease with a five-year term. The office space is owned by an entity controlled by an affiliate of Wexford. The Company paid $49,000 and $131,000 for the three months and nine months ended September 30, 2013, respectively, and $46,000 and $117,000, for the three months and nine months ended September 30, 2012, respectively, under this lease. In the second and third quarters of 2013, the Company amended this agreement to increase the size of the leased premises. The monthly rent under the lease increased from $13,000 to $15,000 beginning on August 1, 2013 and will increase to $25,000 beginning on October 1, 2013. The monthly rent will increase approximately 4% annually on June 1 of each year during the remainder of the lease term. | |
Oklahoma City Lease | |
Effective January 1, 2012, the Company occupied corporate office space in Oklahoma City, Oklahoma under a lease with a 67 month term. The office space is owned by an entity controlled by an affiliate of Wexford. The Company paid $67,000 and $178,000 for the three months and nine months ended September 30, 2013, respectively, and $60,000 and $267,000 for the three months and nine months ended September 30, 2012, respectively, under this lease. Effective April 1, 2013, we amended this lease to increase the size of the leased premises, at which time our monthly base rent increased to $19,000 for the remainder of the lease term. The Company is also responsible for paying a portion of specified costs, fees and expenses associated with the operation of the premises. | |
Advisory Services Agreement & Professional Services from Wexford | |
The Company entered into an advisory services agreement (the “Advisory Services Agreement”) with Wexford, dated as of October 11, 2012, under which Wexford provides the Company with general financial and strategic advisory services related to the business in return for an annual fee of $500,000, plus reasonable out-of-pocket expenses. The Advisory Services Agreement has a term of two years commencing on October 18, 2012, and will continue for additional one-year periods unless terminated in writing by either party at least ten days prior to the expiration of the then current term. It may be terminated at any time by either party upon 30 days prior written notice. In the event the Company terminates such agreement, it is obligated to pay all amounts due through the remaining term. In addition, the Company agreed to pay Wexford to-be-negotiated market-based fees approved by the Company’s independent directors for such services as may be provided by Wexford at the Company’s request in connection with future acquisitions and divestitures, financings or other transactions in which the Company may be involved. The services provided by Wexford under the Advisory Services Agreement do not extend to the Company’s day-to-day business or operations. The Company has agreed to indemnify Wexford and its affiliates from any and all losses arising out of or in connection with the Advisory Services Agreement except for losses resulting from Wexford’s or its affiliates’ gross negligence or willful misconduct. The Company incurred total costs of $125,000 and $375,000 for the three months and nine months ended September 30, 2013, respectively, under the Advisory Services Agreement. Wexford provides certain professional services to the Company, for which the Company incurred total costs of $25,000 and $119,000 for the three months and nine months ended September 30, 2012, respectively. As of September 30, 2013 and December 31, 2012, the Company owed Wexford no amounts and $113,000, respectively. These amounts are included in accounts payable-related party in the accompanying consolidated balance sheets. | |
Secondary Offering Costs | |
On June 24, 2013, Gulfport and certain entities controlled by Wexford completed an underwritten secondary public offering of 6,000,000 shares of the Company’s common stock and, on July 5, 2013, the underwriters purchased an additional 869,222 shares of the Company’s common stock from these selling stockholders pursuant to an option to purchase such additional shares granted to the underwriters. The shares were sold to the public at $34.75 per share and the selling stockholders received all proceeds from this offering. The Company incurred costs of approximately $185,000 related to the secondary public offering. |
Derivatives
Derivatives | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||||||||
Derivatives | ' | ||||||||||||||||
DERIVATIVES | |||||||||||||||||
All derivative financial instruments are recorded at fair value. The Company has not designated its derivative instruments as hedges for accounting purposes and, as a result, marks its derivative instruments to fair value and recognizes the realized and unrealized changes in fair value in the combined consolidated statements of operations under the caption “Gain (loss) on derivative instruments, net.” | |||||||||||||||||
The Company has used price swap contracts to reduce price volatility associated with certain of its oil sales. With respect to the Company’s fixed price swap contracts, the counterparty is required to make a payment to the Company if the settlement price for any settlement period is less than the swap price, and the Company is required to make a payment to the counterparty if the settlement price for any settlement period is greater than the swap price. The Company’s derivative contracts are based upon reported settlement prices on commodity exchanges, with crude oil derivative settlements based on New York Mercantile Exchange West Texas Intermediate pricing, Argus Louisiana light sweet pricing or Inter–Continental Exchange (“ICE”) pricing for Brent crude oil. The counterparties to the Company’s derivative contracts are BNP Paribas and Wells Fargo Bank, N.A., who the Company believes are acceptable credit risks. | |||||||||||||||||
As of September 30, 2013, the Company had open crude oil derivative positions with respect to future production as set forth in the tables below. When aggregating multiple contracts, the weighted average contract price is disclosed. | |||||||||||||||||
Crude Oil—NYMEX West Texas Intermediate Fixed Price Swap | |||||||||||||||||
Production Period | Volume (Bbls) | Fixed Swap Price | |||||||||||||||
October–December 2013 | 92,000 | $ | 80.55 | ||||||||||||||
Crude Oil—Argus Louisiana Light Sweet Fixed Price Swap | |||||||||||||||||
Production Period | Volume (Bbls) | Fixed Swap Price | |||||||||||||||
October - December 2013 | 92,000 | $ | 100.2 | ||||||||||||||
January - December 2014 | 515,000 | 100.76 | |||||||||||||||
Jan-15 | 31,000 | 101 | |||||||||||||||
Crude Oil—ICE Brent Fixed Price Swap | |||||||||||||||||
Production Period | Volume (Bbls) | Fixed Swap Price | |||||||||||||||
October–December 2013 | 92,000 | $ | 109.7 | ||||||||||||||
January–April 2014 | 120,000 | 109.7 | |||||||||||||||
Balance sheet offsetting of derivative assets and liabilities | |||||||||||||||||
The fair value of swaps is generally determined using established index prices and other sources which are based upon, among other things, futures prices and time to maturity. These fair values are recorded by netting asset and liability positions that are with the same counterparty and are subject to contractual terms which provide for net settlement. | |||||||||||||||||
The following tables present the gross amounts of recognized derivative assets and liabilities, the amounts offset under master netting arrangements with counterparties and the resulting net amounts presented in the Company’s consolidated balance sheets as of September 30, 2013 and December 31, 2012. | |||||||||||||||||
September 30, 2013 | |||||||||||||||||
Gross Amounts of Recognized Assets | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts of Assets Presented in the Consolidated Balance Sheet | |||||||||||||||
Derivative assets | $ | 1,513,000 | $ | (763,000 | ) | $ | 750,000 | ||||||||||
Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | |||||||||||||||
Derivative liabilities | $ | 1,933,000 | $ | — | $ | 1,933,000 | |||||||||||
December 31, 2012 | |||||||||||||||||
Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | |||||||||||||||
Derivative liabilities | $ | 5,205,000 | $ | — | $ | 5,205,000 | |||||||||||
The net amounts are classified as current or noncurrent based on their anticipated settlement dates. The net fair value of the Company’s derivative assets and liabilities and their locations on the consolidated balance sheet are as follows: | |||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Current Assets: Derivative instruments | $ | 223,000 | $ | — | |||||||||||||
Noncurrent Assets: Derivative instruments | 527,000 | — | |||||||||||||||
Total Assets | $ | 750,000 | $ | — | |||||||||||||
Current Liabilities: Derivative instruments | $ | 1,933,000 | $ | 4,817,000 | |||||||||||||
Noncurrent Liabilities: Derivative instruments | — | 388,000 | |||||||||||||||
Total Liabilities | $ | 1,933,000 | $ | 5,205,000 | |||||||||||||
None of the Company’s derivatives have been designated as hedges. As such, all changes in fair value are immediately recognized in earnings. The following table summarizes the gains and losses on derivative instruments included in the combined consolidated statements of operations: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Non-cash gain (loss) on open non-hedge derivative instruments | $ | (1,695,000 | ) | $ | (2,252,000 | ) | $ | 3,733,000 | $ | 6,386,000 | |||||||
Loss on settlement of non-hedge derivative instruments | (3,215,000 | ) | (896,000 | ) | (5,614,000 | ) | (4,369,000 | ) | |||||||||
Gain (loss) on derivative instruments | $ | (4,910,000 | ) | $ | (3,148,000 | ) | $ | (1,881,000 | ) | $ | 2,017,000 | ||||||
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||
Fair Value Measurements | ' | |||||||||||||||||
FAIR VALUE MEASUREMENTS | ||||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. | ||||||||||||||||||
The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The Company’s assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. The Company uses appropriate valuation techniques based on available inputs to measure the fair values of its assets and liabilities. | ||||||||||||||||||
Level 1 - Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date. | ||||||||||||||||||
Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. | ||||||||||||||||||
Level 3 - Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management’s best estimate of fair value. | ||||||||||||||||||
Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. | ||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||||||||||||||||||
Certain assets and liabilities are reported at fair value on a recurring basis, including the Company’s derivative instruments. The fair values of the Company’s fixed price crude oil swaps are measured internally using established commodity futures price strips for the underlying commodity provided by a reputable third party, the contracted notional volumes, and time to maturity. These valuations are Level 2 inputs. | ||||||||||||||||||
The following table provides fair value measurement information for financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012. | ||||||||||||||||||
Fair value measurements at September 30, 2013 using: | ||||||||||||||||||
Quoted Prices in Active Markets Level 1 | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||||
Level 2 | Level 3 | |||||||||||||||||
Assets: | ||||||||||||||||||
Fixed price swaps | $ | — | $ | 750,000 | $ | — | $ | 750,000 | ||||||||||
Liabilities: | ||||||||||||||||||
Fixed price swaps | — | 1,933,000 | — | 1,933,000 | ||||||||||||||
Fair value measurements at December 31, 2012 using: | ||||||||||||||||||
Quoted Prices in Active Markets Level 1 | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||||
Level 2 | Level 3 | |||||||||||||||||
Liabilities: | ||||||||||||||||||
Fixed price swaps | $ | — | $ | 5,205,000 | $ | — | $ | 5,205,000 | ||||||||||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | ||||||||||||||||||
The following table provides the fair value of financial instruments that are not recorded at fair value in the combined consolidated financial statements. | ||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||
Carrying | Carrying | |||||||||||||||||
Amount | Fair Value | Amount | Fair Value | |||||||||||||||
Debt: | ||||||||||||||||||
7.625% Senior Notes due 2021 | $ | 450,000,000 | $ | 460,406,000 | $ | — | $ | — | ||||||||||
Note payable | 230,000 | 219,000 | 338,000 | 305,000 | ||||||||||||||
The fair value of the Senior Notes was determined using the September 30, 2013 quoted market price, a Level 1 classification in the fair value hierarchy. The fair value of the note payable is determined using internal discounted cash flow calculations based on the interest rate and payment terms of the note payable. The fair value of the note payable is classified as Level 3 in the fair value hierarchy. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Contingencies | ' |
CONTINGENCIES | |
In September 2010, Windsor Permian (now known as Diamondback O&G LLC) purchased certain property in Goodhue County, Minnesota, that was prospective for hydraulic fracturing grade sand. Prior to the purchase, the prior owners of the property had entered into a Mineral Development Agreement with the plaintiff and the Company purchased the property subject to that agreement. Windsor Permian subsequently contributed the property to Muskie. In an amended complaint filed in November 2012 by the plaintiff against the prior owners of the property, Windsor Permian and certain affiliates of Windsor Permian in the first judicial district court in Goodhue County, Minnesota, the plaintiff seeks damages from the Company and the other defendants alleging, among other things, interference with contractual relationship, interference with prospective advantage and unjust enrichment. In an order filed on May 24, 2013, the judge denied certain motions made by the defendants and set a trial date to determine liability, with a damage phase of the matter to commence on a later date if there is a determination of liability. Following a trial on the liability phase on June 21, 2013, the jury determined that the defendants intentionally interfered with plaintiff’s contract but that the interference did not cause the plaintiff to be unable to acquire mining permits prior to the enactment of the moratorium by Goodhue County. The damage phase is expected to be set for trial in 2014 following additional discovery and the filing of motions. The Company believes these claims are without merit and will continue to vigorously defend this action. While management has determined that the possibility of loss is remote, litigation is inherently uncertain and management cannot determine the amount of loss, if any, that may result. | |
The Company could be subject to various possible loss contingencies which arise primarily from interpretation of federal and state laws and regulations affecting the natural gas and crude oil industry. Such contingencies include differing interpretations as to the prices at which natural gas and crude oil sales may be made, the prices at which royalty owners may be paid for production from their leases, environmental issues and other matters. Management believes it has complied with the various laws and regulations, administrative rulings and interpretations. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
SUBSEQUENT EVENTS | |
On November 1, 2013, the Company entered into an amended and restated credit agreement with Wells Fargo Bank, National Association, as administrative agent for the lenders, and certain lenders party hereto. For a description of this amended and restated credit facility, see Note 7 — “Debt – Credit Facility – Wells Fargo Bank.” |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
These financial statements have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). They reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for interim periods, on a basis consistent with the annual audited financial statements. All such adjustments are of a normal recurring nature. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted pursuant to such rules and regulations, although the Company believes the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10–Q should be read in conjunction with the Company’s most recent Annual Report on Form 10–K for the fiscal year ended December 31, 2012, which contains a summary of the Company’s significant accounting policies and other disclosures. | |
Transfers of a business between entities under common control are accounted for as if the transfer occurred at the beginning of the period, and prior years are retrospectively adjusted to furnish comparative information. As discussed above, the Windsor UT Contribution was accounted for as a transaction between entities under common control. Thus, the accompanying combined consolidated financial statements and related notes of the Company have been retrospectively adjusted to include the historical results of Windsor UT at historical carrying values and its operations prior to October 11, 2012, the effective date of the Windsor UT Contribution. The accompanying financial statements and related notes presented herein represent the combined results of operations and cash flows of our Predecessors through October 11, 2012, and the Company and its wholly-owned subsidiaries consolidated financial position, results of operations, cash flows and equity subsequent to October 11, 2012. All intercompany balances and transactions are eliminated in consolidation. | |
Use of Estimates | ' |
Use of Estimates | |
Certain amounts included in or affecting the Company’s combined consolidated financial statements and related disclosures must be estimated by management, requiring certain assumptions to be made with respect to values or conditions that cannot be known with certainty at the time the combined consolidated financial statements are prepared. These estimates and assumptions affect the amounts the Company reports for assets and liabilities and the Company’s disclosure of contingent assets and liabilities at the date of the combined consolidated financial statements. Actual results could differ from those estimates. | |
The Company evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods the Company considers reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from the Company’s estimates. Any effects on the Company’s business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Significant items subject to such estimates and assumptions include estimates of proved oil and natural gas reserves and related present value estimates of future net cash flows therefrom, the carrying value of oil and natural gas properties, asset retirement obligations, the fair value determination of acquired assets and liabilities, stock-based compensation, fair value estimates of commodity derivatives and estimates of income taxes. | |
Fair Value Measurements | ' |
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. | |
The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The Company’s assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. The Company uses appropriate valuation techniques based on available inputs to measure the fair values of its assets and liabilities. | |
Level 1 - Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date. | |
Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. | |
Level 3 - Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management’s best estimate of fair value. | |
Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. | |
Debt issue costs | ' |
Debt Issuance Costs | |
Costs incurred of $10.3 million upon the issuance of the 7.625% Senior Notes due 2021 were capitalized and are being amortized over the term of the Senior Notes using the effective interest method. The Company includes unamortized costs in other assets in its consolidated balance sheets. |
Acquisitions_Tables
Acquisitions (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Business Combinations [Abstract] | ' | |||||||||
Schedule of business acquisition pro forma | ' | |||||||||
The following unaudited summary pro forma combined consolidated statement of operations data of Diamondback for the three months and nine months ended September 30, 2012 has been prepared to give effect to the acquisition as if it had occurred on January 1, 2011. The pro forma data are not necessarily indicative of financial results that would have been attained had the acquisition occurred on January 1, 2011. The pro forma data also necessarily exclude various operation expenses related to the Gulfport properties and the financial statements should not be viewed as indicative of operations in future periods. | ||||||||||
Three Months Ended | Nine Months Ended | |||||||||
30-Sep-12 | 30-Sep-12 | |||||||||
(Pro Forma) | (Pro Forma) | |||||||||
Pro forma total revenues | $ | 23,839,000 | $ | 70,411,000 | ||||||
Pro forma income from operations | 5,564,000 | 21,255,000 | ||||||||
Pro forma net income | 1,930,000 | (1) | 21,678,000 | (1) | ||||||
(1) This amount does not include a pro forma income tax provision relating to becoming subject to income taxes as a result of the Merger. |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property and Equipment | ' | ||||||||
Property and equipment includes the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Oil and natural gas properties: | |||||||||
Subject to depletion | $ | 1,116,042,000 | $ | 576,497,000 | |||||
Not subject to depletion-acquisition costs | |||||||||
Incurred in 2013 | 315,331,000 | — | |||||||
Incurred in 2012 | 106,269,000 | 117,395,000 | |||||||
Incurred in 2011 | 1,598,000 | 1,670,000 | |||||||
Incurred in 2010 | 1,358,000 | 1,647,000 | |||||||
Incurred in 2009 | — | 533,000 | |||||||
Total not subject to depletion | 424,556,000 | 121,245,000 | |||||||
Gross oil and natural gas properties | 1,540,598,000 | 697,742,000 | |||||||
Less accumulated depreciation, depletion, amortization and impairment | (187,427,000 | ) | (145,102,000 | ) | |||||
Oil and natural gas properties, net | 1,353,171,000 | 552,640,000 | |||||||
Other property and equipment | 9,168,000 | 2,337,000 | |||||||
Less accumulated depreciation | (1,218,000 | ) | (735,000 | ) | |||||
Other property and equipment, net | 7,950,000 | 1,602,000 | |||||||
Property and equipment, net of accumulated depreciation, depletion, amortization and impairment | $ | 1,361,121,000 | $ | 554,242,000 | |||||
Asset_Retirement_Obligation_Ta
Asset Retirement Obligation (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Asset Retirement Obligation [Abstract] | ' | |||||||
Asset Retirement Obligation | ' | |||||||
The following table describes the changes to the Company’s asset retirement obligation liability for the following periods: | ||||||||
Nine Months Ended | ||||||||
September 30, | ||||||||
2013 | 2012 | |||||||
Asset retirement obligation, beginning of period | $ | 2,145,000 | $ | 1,104,000 | ||||
Additional liability incurred | 162,000 | 145,000 | ||||||
Liabilities acquired | 471,000 | — | ||||||
Liabilities settled | (14,000 | ) | — | |||||
Accretion expense | 134,000 | 63,000 | ||||||
Asset retirement obligation, end of period | 2,898,000 | 1,312,000 | ||||||
Less current portion | 20,000 | 19,000 | ||||||
Asset retirement obligations - long-term | $ | 2,878,000 | $ | 1,293,000 | ||||
Debt_Tables
Debt (Tables) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Debt Disclosure [Abstract] | ' | |||
Financial Covenants | ' | |||
Financial Covenant | Required Ratio | |||
Ratio of total debt to EBITDAX | Not greater than 4.0 to 1.0 | |||
Ratio of current assets to liabilities, as defined in the credit agreement | Not less than 1.0 to 1.0 | |||
EBITDAX will be annualized beginning with the quarter ended September 30, 2013 and ending with the quarter ending March 31, 2014. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||
Schedule of reconciliation of basic and diluted net income per share | ' | |||||||||||
A reconciliation of the components of pro forma basic and diluted earnings per common share is presented in the table below: | ||||||||||||
Three Months Ended September 30, 2012 | ||||||||||||
Per | ||||||||||||
Income | Shares | Share | ||||||||||
Basic: | ||||||||||||
Pro forma net income attributable to common stock | $ | 291,000 | 14,697,496 | $ | 0.02 | |||||||
Effect of Dilutive Securities: | ||||||||||||
Dilutive effect of potential common shares issuable | $ | — | — | |||||||||
Diluted: | ||||||||||||
Pro forma net income attributable to common stock | $ | 291,000 | 14,697,496 | $ | 0.02 | |||||||
Nine Months Ended September 30, 2012 | ||||||||||||
Per | ||||||||||||
Income | Shares | Share | ||||||||||
Basic: | ||||||||||||
Pro forma net income attributable to common stock | $ | 10,008,000 | 14,697,496 | $ | 0.68 | |||||||
Effect of Dilutive Securities: | ||||||||||||
Dilutive effect of potential common shares issuable | $ | — | — | |||||||||
Diluted: | ||||||||||||
Pro forma net income attributable to common stock | $ | 10,008,000 | 14,697,496 | $ | 0.68 | |||||||
A reconciliation of the components of basic and diluted earnings per common share is presented in the table below: | ||||||||||||
Three Months Ended September 30, 2013 | ||||||||||||
Per | ||||||||||||
Income | Shares | Share | ||||||||||
Basic: | ||||||||||||
Net income attributable to common stock | $ | 14,596,000 | 44,385,107 | $ | 0.33 | |||||||
Effect of Dilutive Securities: | ||||||||||||
Dilutive effect of potential common shares issuable | $ | — | 312,502 | |||||||||
Diluted: | ||||||||||||
Net income attributable to common stock | $ | 14,596,000 | 44,697,609 | $ | 0.33 | |||||||
Nine Months Ended September 30, 2013 | ||||||||||||
Per | ||||||||||||
Income | Shares | Share | ||||||||||
Basic: | ||||||||||||
Net income attributable to common stock | $ | 34,463,000 | 40,308,989 | $ | 0.85 | |||||||
Effect of Dilutive Securities: | ||||||||||||
Dilutive effect of potential common shares issuable | $ | — | 214,775 | |||||||||
Diluted: | ||||||||||||
Net income attributable to common stock | $ | 34,463,000 | 40,523,764 | $ | 0.85 | |||||||
Stock_and_Equity_Based_Compens1
Stock and Equity Based Compensation (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||
Schedule of stock option activity | ' | |||||||||||||
The following table presents the Company’s stock option activity under the 2012 Plan for the nine months ended September 30, 2013. | ||||||||||||||
Weighted Average | ||||||||||||||
Exercise | Remaining | Intrinsic | ||||||||||||
Options | Price | Term | Value | |||||||||||
(In years) | ||||||||||||||
Outstanding at December 31, 2012 | 850,000 | $ | 17.5 | |||||||||||
Granted | 63,000 | $ | 22.72 | |||||||||||
Exercised | (149,500 | ) | $ | 17.5 | ||||||||||
Expired/Forfeited | — | $ | — | |||||||||||
Outstanding at September 30, 2013 | 763,500 | $ | 17.93 | 3.03 | $ | 18,865,000 | ||||||||
Vested and Expected to vest at September 30, 2013 | 763,500 | $ | 17.93 | 3.03 | $ | 18,865,000 | ||||||||
Exercisable at September 30, 2013 | 263,000 | $ | 17.5 | 2.71 | $ | 6,612,000 | ||||||||
Summary of restricted stock awards and units | ' | |||||||||||||
The following table presents the Company’s restricted stock awards and units activity under the 2012 Plan for the nine months ended September 30, 2013. | ||||||||||||||
Weighted Average | ||||||||||||||
Restricted Stock | Grant-Date | |||||||||||||
Awards & Units | Fair Value | |||||||||||||
Unvested at December 31, 2012 | 206,507 | $ | 17.5 | |||||||||||
Granted | 11,099 | $ | 41.66 | |||||||||||
Vested | (58,923 | ) | $ | 18.23 | ||||||||||
Forfeited | (4,444 | ) | $ | 17.5 | ||||||||||
Unvested at September 30, 2013 | 154,239 | $ | 18.96 | |||||||||||
Derivatives_Tables
Derivatives (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||||||||
Schedule of derivative instruments | ' | ||||||||||||||||
As of September 30, 2013, the Company had open crude oil derivative positions with respect to future production as set forth in the tables below. When aggregating multiple contracts, the weighted average contract price is disclosed. | |||||||||||||||||
Crude Oil—NYMEX West Texas Intermediate Fixed Price Swap | |||||||||||||||||
Production Period | Volume (Bbls) | Fixed Swap Price | |||||||||||||||
October–December 2013 | 92,000 | $ | 80.55 | ||||||||||||||
Crude Oil—Argus Louisiana Light Sweet Fixed Price Swap | |||||||||||||||||
Production Period | Volume (Bbls) | Fixed Swap Price | |||||||||||||||
October - December 2013 | 92,000 | $ | 100.2 | ||||||||||||||
January - December 2014 | 515,000 | 100.76 | |||||||||||||||
Jan-15 | 31,000 | 101 | |||||||||||||||
Crude Oil—ICE Brent Fixed Price Swap | |||||||||||||||||
Production Period | Volume (Bbls) | Fixed Swap Price | |||||||||||||||
October–December 2013 | 92,000 | $ | 109.7 | ||||||||||||||
January–April 2014 | 120,000 | 109.7 | |||||||||||||||
Schedule of netting offsets of derivative assets and liabilities | ' | ||||||||||||||||
The following tables present the gross amounts of recognized derivative assets and liabilities, the amounts offset under master netting arrangements with counterparties and the resulting net amounts presented in the Company’s consolidated balance sheets as of September 30, 2013 and December 31, 2012. | |||||||||||||||||
September 30, 2013 | |||||||||||||||||
Gross Amounts of Recognized Assets | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts of Assets Presented in the Consolidated Balance Sheet | |||||||||||||||
Derivative assets | $ | 1,513,000 | $ | (763,000 | ) | $ | 750,000 | ||||||||||
Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | |||||||||||||||
Derivative liabilities | $ | 1,933,000 | $ | — | $ | 1,933,000 | |||||||||||
December 31, 2012 | |||||||||||||||||
Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | |||||||||||||||
Derivative liabilities | $ | 5,205,000 | $ | — | $ | 5,205,000 | |||||||||||
Schedule of derivative instruments included in the consolidated balance sheet | ' | ||||||||||||||||
The net fair value of the Company’s derivative assets and liabilities and their locations on the consolidated balance sheet are as follows: | |||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Current Assets: Derivative instruments | $ | 223,000 | $ | — | |||||||||||||
Noncurrent Assets: Derivative instruments | 527,000 | — | |||||||||||||||
Total Assets | $ | 750,000 | $ | — | |||||||||||||
Current Liabilities: Derivative instruments | $ | 1,933,000 | $ | 4,817,000 | |||||||||||||
Noncurrent Liabilities: Derivative instruments | — | 388,000 | |||||||||||||||
Total Liabilities | $ | 1,933,000 | $ | 5,205,000 | |||||||||||||
Summary of derivative contract gains and losses included in the consolidated statements of operations | ' | ||||||||||||||||
The following table summarizes the gains and losses on derivative instruments included in the combined consolidated statements of operations: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Non-cash gain (loss) on open non-hedge derivative instruments | $ | (1,695,000 | ) | $ | (2,252,000 | ) | $ | 3,733,000 | $ | 6,386,000 | |||||||
Loss on settlement of non-hedge derivative instruments | (3,215,000 | ) | (896,000 | ) | (5,614,000 | ) | (4,369,000 | ) | |||||||||
Gain (loss) on derivative instruments | $ | (4,910,000 | ) | $ | (3,148,000 | ) | $ | (1,881,000 | ) | $ | 2,017,000 | ||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||
Fair value measurement information for financial instruments measured on a recurring basis | ' | |||||||||||||||||
The following table provides fair value measurement information for financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012. | ||||||||||||||||||
Fair value measurements at September 30, 2013 using: | ||||||||||||||||||
Quoted Prices in Active Markets Level 1 | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||||
Level 2 | Level 3 | |||||||||||||||||
Assets: | ||||||||||||||||||
Fixed price swaps | $ | — | $ | 750,000 | $ | — | $ | 750,000 | ||||||||||
Liabilities: | ||||||||||||||||||
Fixed price swaps | — | 1,933,000 | — | 1,933,000 | ||||||||||||||
Fair value measurements at December 31, 2012 using: | ||||||||||||||||||
Quoted Prices in Active Markets Level 1 | Significant Other Observable Inputs | Significant Unobservable Inputs | Total | |||||||||||||||
Level 2 | Level 3 | |||||||||||||||||
Liabilities: | ||||||||||||||||||
Fixed price swaps | $ | — | $ | 5,205,000 | $ | — | $ | 5,205,000 | ||||||||||
Fair value measurement information for financial instruments measured on a nonrecurring basis | ' | |||||||||||||||||
The following table provides the fair value of financial instruments that are not recorded at fair value in the combined consolidated financial statements. | ||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||
Carrying | Carrying | |||||||||||||||||
Amount | Fair Value | Amount | Fair Value | |||||||||||||||
Debt: | ||||||||||||||||||
7.625% Senior Notes due 2021 | $ | 450,000,000 | $ | 460,406,000 | $ | — | $ | — | ||||||||||
Note payable | 230,000 | 219,000 | 338,000 | 305,000 | ||||||||||||||
Description_of_the_Business_an1
Description of the Business and Basis of Presentation (Details) (USD $) | 0 Months Ended | 1 Months Ended | ||||||
Jul. 05, 2013 | Jun. 24, 2013 | Jul. 05, 2013 | 22-May-13 | Oct. 17, 2012 | Aug. 31, 2013 | Sep. 30, 2013 | Sep. 18, 2013 | |
Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Senior Unsecured Notes due 2021 [Member] | Senior Unsecured Notes due 2021 [Member] | |
Senior Notes [Member] | Senior Notes [Member] | |||||||
Initial Public Offering [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued upon public offering | ' | ' | ' | 5,175,000 | 14,375,000 | 4,600,000 | ' | ' |
Common stock issued pursuant to underwriters over allotment option | ' | ' | ' | 675,000 | 1,875,000 | 600,000 | ' | ' |
Stock price per share at public offering | ' | ' | ' | $29.25 | $17.50 | $40.25 | ' | ' |
Net proceeds received from public offerring | ' | ' | ' | $144,400,000 | $234,100,000 | $177,500,000 | ' | ' |
Shares sold in secondary public offering | ' | 6,000,000 | ' | ' | ' | ' | ' | ' |
Shares sold by existing stockholders | 869,222 | ' | ' | ' | ' | ' | ' | ' |
Stock price per share, selling stockholders | ' | ' | $34.75 | ' | ' | ' | ' | ' |
Aggregate principal amount | ' | ' | ' | ' | ' | ' | ' | $450,000,000 |
Stated interest rate | ' | ' | ' | ' | ' | ' | 7.63% | 7.63% |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (Senior Unsecured Notes due 2021 [Member], Senior Notes [Member], USD $) | Sep. 30, 2013 | Sep. 18, 2013 |
In Millions, unless otherwise specified | ||
Senior Unsecured Notes due 2021 [Member] | Senior Notes [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Capitalized financing costs | $10.30 | ' |
Stated interest rate | 7.63% | 7.63% |
Acquisitions_Details
Acquisitions (Details) (USD $) | 9 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 18, 2013 | Sep. 30, 2013 | Sep. 04, 2013 | Jul. 31, 2013 | Sep. 02, 2013 | Sep. 26, 2013 | Jun. 30, 2013 | Sep. 02, 2013 | Sep. 19, 2013 |
acre | Permian Basin [Member] | Martin County, Texas [Member] | Martin County, Texas [Member] | Martin County, Texas [Member] | Dawson County, Texas [Member] | Dawson County, Texas [Member] | Dawson County, Texas [Member] | Midland County, Texas [Member] | |||
leasehold_interest | well | Boe | well | well | Boe | MBoe | acre | ||||
acre | MBoe | acre | well | ||||||||
MBoe | |||||||||||
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of leasehold interest acquisitions | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' |
Payments to acquire leasehold interests | $166,635 | $0 | ' | $165,000 | ' | ' | ' | ' | ' | ' | ' |
Percent of working interest | ' | ' | ' | ' | 100.00% | ' | ' | 70.00% | ' | ' | ' |
Percent of net revenue interest | ' | ' | ' | ' | 80.00% | ' | ' | 54.00% | ' | ' | ' |
Acres of oil and gas property, gross | ' | ' | 15,000 | ' | 4,506 | ' | ' | 9,390 | ' | ' | 15,000 |
Acres of oil and gas property, net | ' | ' | 12,500 | ' | 4,506 | ' | ' | 6,638 | ' | ' | 12,500 |
Vertical wells, gross | ' | ' | ' | ' | 18 | ' | ' | 32 | ' | ' | ' |
Vertical wells, net | ' | ' | ' | ' | 18 | ' | ' | 23 | ' | ' | ' |
Proved developed reserves (energy) | ' | ' | ' | ' | ' | ' | 1,199 | ' | ' | 907 | ' |
Proved developed non-producing reserves (energy) | ' | ' | ' | ' | ' | ' | 88 | ' | ' | 45 | ' |
Vertical PDNP wells | ' | ' | ' | ' | ' | ' | 1 | ' | ' | 1 | ' |
BOE per day of prodction, gross | ' | ' | ' | ' | ' | 457 | ' | ' | 777 | ' | ' |
BOE per day of production, net | ' | ' | ' | ' | ' | 365 | ' | ' | 417 | ' | ' |
Percent of royalty interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% |
Payments to acquire mineral interests | $440,000 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | $440,000 |
Acquisitions_Summary_Pro_Forma
Acquisitions - Summary Pro Forma Combined Statement of Operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2012 | ||
Business Combinations [Abstract] | ' | ' | ||
Pro forma total revenues | $23,839 | $70,411 | ||
Pro forma income from operations | 5,564 | 21,255 | ||
Pro forma net income | $1,930 | [1] | $21,678 | [1] |
[1] | This amount does not include a pro forma income tax provision relating to becoming subject to income taxes as a result of the Merger. |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Property, Plant and Equipment | ' | ' | ' | ' | ' |
Subject to depletion | $1,116,042 | ' | $1,116,042 | ' | $576,497 |
Oil and Natural Gas Properties: | ' | ' | ' | ' | ' |
Not subject to depletion-acquisition costs | 424,556 | ' | 424,556 | ' | 121,245 |
Gross oil and natural gas properties | 1,540,598 | ' | 1,540,598 | ' | 697,742 |
Less accumulated depreciation, depletion, amortization and impairment | -187,427 | ' | -187,427 | ' | -145,102 |
Net oil and natural gas properties capitalized | 1,353,171 | ' | 1,353,171 | ' | 552,640 |
Other property and equipment | 9,168 | ' | 9,168 | ' | 2,337 |
Less accumulated depreciation | -188,645 | ' | -188,645 | ' | -145,837 |
Other property and equipment, net | 7,950 | ' | 7,950 | ' | 1,602 |
Property and equipment, net of accumulated depreciation, depletion, amortization and impairment | 1,361,121 | ' | 1,361,121 | ' | 554,242 |
Average depletetion rate per barrel equivalent unit of production | 25.24 | 24.43 | 24.76 | 23.96 | ' |
Capitalized general and administrative costs | 1,038 | 1,068 | 2,678 | 2,843 | ' |
Other property and equipment | ' | ' | ' | ' | ' |
Oil and Natural Gas Properties: | ' | ' | ' | ' | ' |
Less accumulated depreciation | -1,218 | ' | -1,218 | ' | -735 |
Incurred in 2013 | ' | ' | ' | ' | ' |
Oil and Natural Gas Properties: | ' | ' | ' | ' | ' |
Not subject to depletion-acquisition costs | 315,331 | ' | 315,331 | ' | 0 |
Incurred in 2012 | ' | ' | ' | ' | ' |
Oil and Natural Gas Properties: | ' | ' | ' | ' | ' |
Not subject to depletion-acquisition costs | 106,269 | ' | 106,269 | ' | 117,395 |
Incurred in 2011 | ' | ' | ' | ' | ' |
Oil and Natural Gas Properties: | ' | ' | ' | ' | ' |
Not subject to depletion-acquisition costs | 1,598 | ' | 1,598 | ' | 1,670 |
Incurred in 2010 | ' | ' | ' | ' | ' |
Oil and Natural Gas Properties: | ' | ' | ' | ' | ' |
Not subject to depletion-acquisition costs | 1,358 | ' | 1,358 | ' | 1,647 |
Incurred in 2009 | ' | ' | ' | ' | ' |
Oil and Natural Gas Properties: | ' | ' | ' | ' | ' |
Not subject to depletion-acquisition costs | $0 | ' | $0 | ' | $533 |
Minimum | ' | ' | ' | ' | ' |
Oil and Natural Gas Properties: | ' | ' | ' | ' | ' |
Number of years until unevaluated propertes are included in full cost pool | ' | ' | '3 years | ' | ' |
Maximum | ' | ' | ' | ' | ' |
Oil and Natural Gas Properties: | ' | ' | ' | ' | ' |
Number of years until unevaluated propertes are included in full cost pool | ' | ' | '5 years | ' | ' |
Asset_Retirement_Obligation_De
Asset Retirement Obligation (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Changes in ARO liability | ' | ' | ' | ' | ' |
Asset retirement obligation, beginning of period | ' | ' | $2,145 | $1,104 | ' |
Additional liability incurred | ' | ' | 162 | 145 | ' |
Liabilities acquired | ' | ' | 471 | 0 | ' |
Liabilities settled | ' | ' | -14 | 0 | ' |
Accretion expense | 46 | 22 | 134 | 63 | ' |
Asset retirement obligation, end of period | 2,898 | 1,312 | 2,898 | 1,312 | ' |
Less current portion | 20 | 19 | 20 | 19 | ' |
Asset retirement obligations - long-term | $2,878 | $1,293 | $2,878 | $1,293 | $2,125 |
Equity_Method_Investments_Deta
Equity Method Investments (Details) (USD $) | 0 Months Ended | |
In Thousands, unless otherwise specified | Jun. 15, 2012 | Oct. 07, 2011 |
Bison Drilling | ' | ' |
Schedule of Equity Method Investments | ' | ' |
Ownership interest | 22.00% | ' |
Distribution of equity method investment between entities under common control | $6,437 | ' |
Muskie Holdings | ' | ' |
Schedule of Equity Method Investments | ' | ' |
Ownership interest | 33.00% | 48.60% |
Distribution of equity method investment between entities under common control | 4,067 | ' |
Amount paid for land and the value of property contributed | ' | $4,200 |
Debt_Senior_Notes_Details
Debt - Senior Notes (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 18, 2013 | |
Debt Instrument [Line Items] | ' | ' |
Acres of oil and gas property, gross | ' | 15,000 |
Acres of oil and gas property, net | ' | 12,500 |
Senior Notes [Member] | Senior Unsecured Notes due 2021 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Aggregate principal amount | ' | $450,000,000 |
Stated interest rate | 7.63% | 7.63% |
Number of days registration statement becomes effective after issue date of Senior Notes | '360 days | ' |
Number of days to consummate the exchange after effectiveness | '30 days | ' |
Senior Notes [Member] | Senior Unsecured Notes due 2021 [Member] | 12-month period beginning October 1, 2016 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Redemption price, expressed as percentage of principal amount | 105.72% | ' |
Senior Notes [Member] | Senior Unsecured Notes due 2021 [Member] | 12-month period beginning October 1, 2017 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Redemption price, expressed as percentage of principal amount | 103.81% | ' |
Senior Notes [Member] | Senior Unsecured Notes due 2021 [Member] | 12-month period beginning October 1, 2018 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Redemption price, expressed as percentage of principal amount | 101.91% | ' |
Senior Notes [Member] | Senior Unsecured Notes due 2021 [Member] | 12-month period beginning October 1, 2019 and thereafter | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Redemption price, expressed as percentage of principal amount | 100.00% | ' |
Make-whole premium option [Member] | Senior Notes [Member] | Senior Unsecured Notes due 2021 [Member] | Period prior to October 1, 2016 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Redemption price, expressed as percentage of principal amount | 100.00% | ' |
Net cash proceeds of certain equity offerings [Member] | Senior Notes [Member] | Senior Unsecured Notes due 2021 [Member] | Period prior to October 1, 2016 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Redemption price, expressed as percentage of principal amount | 107.63% | ' |
Maximum percent of aggregrate principal amount redeemable | 35.00% | ' |
Minimum required prinicpal amount to remain outstanding subsequent to redemption | 65.00% | ' |
Number of days within closing date redemption can occur | '120 days | ' |
Debt_Line_of_Credit_Facility_D
Debt - Line of Credit Facility (Details) (USD $) | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | ||||||
Sep. 30, 2013 | Nov. 02, 2013 | Nov. 02, 2013 | Nov. 02, 2013 | Sep. 30, 2013 | Nov. 02, 2013 | Nov. 02, 2013 | Nov. 02, 2013 | Nov. 02, 2013 | Nov. 02, 2013 | |
redetermindation | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Prime rate [Member] | Prime rate [Member] | LIBOR [Member] | LIBOR [Member] | |
Minimum | Maximum | Line of Credit | Senior Notes [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |||
Line of Credit | Line of Credit | Line of Credit | Line of Credit | |||||||
Minimum | Maximum | Minimum | Maximum | |||||||
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | $600,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
The Company may request additional redeterminations | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of Redeterminations | '12 months | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current borrowing base | ' | 225,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Description of variable rate basis | ' | ' | ' | ' | 'prime rate or LIBOR | ' | ' | ' | ' | ' |
Basis spread on variable rate | ' | ' | ' | ' | ' | ' | 0.50% | 1.50% | 1.50% | 2.50% |
Quarterly commitment fee percentage based on unused porttion of borrowing base | ' | ' | 0.38% | 0.50% | ' | ' | ' | ' | ' | ' |
Maximum amount of unsecured debt | ' | 750,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Reduction of borrowing base | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Debt outstanding | ' | ' | ' | ' | ' | $450,000,000 | ' | ' | ' | ' |
Debt_Financial_Covenant_Table_
Debt - Financial Covenant Table (Details) | Sep. 30, 2013 |
Maximum | ' |
Line of Credit Facility [Line Items] | ' |
Ratio of total debt to EBITDAX | 4 |
Minimum | ' |
Line of Credit Facility [Line Items] | ' |
Ratio of current assets to liabilities, as defined in the credit agreement | 1 |
Debt_Note_Payable_Details
Debt - Note Payable (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | Note Payable | ||
Debt Instrument [Line Items] | ' | ' | ' |
Installment payment contract period | ' | ' | '36 months |
Note payable outstanding | $230 | $338 | ' |
Debt_Subordinated_Note_Details
Debt - Subordinated Note (Details) (Affiliated Entity, Subordinated Debt, USD $) | 0 Months Ended | |
In Millions, unless otherwise specified | 14-May-12 | Sep. 30, 2012 |
Affiliated Entity | Subordinated Debt | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Maximum principal amount of debt | $45 | ' |
Description of variable rate basis | 'LIBOR | ' |
Basis spread on variable rate | 0.28% | ' |
Stated interest rate | 8.00% | ' |
Aggregate principal amount outstanding | ' | $30.10 |
Earnings_Per_Share_Earnings_Pe
Earnings Per Share - Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Basic: | ' | ' | ' | ' |
Net income attributable to common stock, basic | $14,596 | ' | $34,463 | ' |
Net income attributable to common stock, basic (in shares) | 44,385,107 | ' | 40,308,989 | ' |
Net income attributable to common stock, basic, (in dollars per share) | $0.33 | ' | $0.85 | ' |
Effect of Dilutive Securities: | ' | ' | ' | ' |
Dilutive effect of potential common shares issuable | 0 | 0 | 0 | 0 |
Dilutive effect of potential common shares issuable (in shares) | 312,502 | 0 | 214,775 | 0 |
Diluted: | ' | ' | ' | ' |
Net income attributable to common stock, diluted | $14,596 | ' | $34,463 | ' |
Net income attributable to common stock, diluted (in shares) | 44,697,609 | ' | 40,523,764 | ' |
Net income attributable to common stock, diluted (in dollars per share) | $0.33 | ' | $0.85 | ' |
Earnings_Per_Share_Pro_Forma_E
Earnings Per Share - Pro Forma Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Basic: | ' | ' | ' | ' |
Pro forma net income attributable to common stock, basic | ' | $291 | ' | $10,008 |
Pro forma net income attributable to common stock (in shares) | ' | 14,697,496 | ' | 14,697,496 |
Pro forma net income attributable to common stock (in dollars per share) | ' | $0.02 | ' | $0.68 |
Effect of Dilutive Securities: | ' | ' | ' | ' |
Dilutive effect of potential common shares issuable | 0 | 0 | 0 | 0 |
Dilutive effect of potential common shares issuable (in shares) | 312,502 | 0 | 214,775 | 0 |
Diluted: | ' | ' | ' | ' |
Pro forma net income attributable to common stock, diluted | ' | $291 | ' | $10,008 |
Pro forma net income attributable to common stock, diluted (in shares) | ' | 14,697,496 | ' | 14,697,496 |
Pro forma net income attributable to common stock, diluted (in dollars per share) | ' | $0.02 | ' | $0.68 |
Stock_and_Equity_Based_Compens2
Stock and Equity Based Compensation - Stock and Equity Based Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' | ' |
Stock and equity based compensation | $749 | $291 | $2,105 | $873 |
Capitalized stock and equity based compensation | $259 | $115 | $679 | $338 |
Stock_and_Equity_Based_Compens3
Stock and Equity Based Compensation - Summary of Company's Outstanding Stock Options (Details) (Stock Options, USD $) | 9 Months Ended |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 |
Stock Options | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' |
Options, Outstanding at beginning of period | 850,000 |
Options granted | 63,000 |
Option exercised | -149,500 |
Options expired/forfeited | 0 |
Options, Outstanding at end of period | 763,500 |
Number of Options, Vested and Expected to Vest, Outstanding at period end | 763,500 |
Options Exercisable at end of period | 263,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ' |
Outstanding Options at beginning of period, weighted average exercise price | $17.50 |
Options Granted, Weighted Average Exercise Price | $22.72 |
Options Exercised, Weighted Average Exercise Price | $17.50 |
Options Expired/Forfeited, Weighted Average Exercise Price | $0 |
Outstanding Options at end of period, weighted average exercise price | $17.93 |
Weighted average exercise price of Options, Vested and Expected to Vest, Outstanding at period end | $17.93 |
Options exercisable at end of period, Weighted Average Exercise Price | $17.50 |
Options outstanding, weighted average remaining contractual term at end of period | '3 years 0 months 10 days |
Remaining Term of Options Outstanding, Vested and Expected to Vest at period end | '3 years 0 months 10 days |
Stock options are excericasble from the date of grant | '2 years 8 months 15 days |
Options outstanding at the end of period, Intrinsic Value | $18,865 |
Intrinsic Value of Options Outstanding at end of period, Vested and Expected to Vest | 18,865 |
Options Exercisable at end of period, Intrinsic Value | 6,612 |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized [Abstract] | ' |
Unrecognized compensation cost related to unvested stock options | $2,079 |
Unrecognized compensation cost, period of recognition | '2 years 0 months 5 days |
Stock_and_Equity_Based_Compens4
Stock and Equity Based Compensation - Restricted Stock Awards and Units (Details) (2012 Plan, Restricted Stock Units (RSUs), USD $) | 9 Months Ended |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 |
2012 Plan | Restricted Stock Units (RSUs) | ' |
Restricted Stock Awards & Units | ' |
Unvested at Beginning of period | 206,507 |
Granted | 11,099 |
Vested | -58,923 |
Forfeited | -4,444 |
Unvested at end of period | 154,239 |
Weighted Average Grant-Date Fair Value | ' |
Unvested at beginning of period | $17.50 |
Granted | $41.66 |
Vested | $18.23 |
Forfeited | $17.50 |
Unvested at end of period | $18.96 |
Unrecognized compensation cost related to unvested restricted stock awards and units | $2,578 |
Unrecognized compensation cost, period of recognition | '1 year 8 months 1 day |
Related_Party_Transactions_Adm
Related Party Transactions - Administrative Services (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Jan. 02, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Related Party Transaction | ' | ' | ' | ' | ' | ' |
Accounts payable-related party | ' | $271 | ' | $271 | ' | $18,813 |
Subsidiary of Common Parent | ' | ' | ' | ' | ' | ' |
Related Party Transaction | ' | ' | ' | ' | ' | ' |
Initial term of the additional shared services agreement | ' | ' | ' | '2 years | ' | ' |
Related party incurred costs | ' | 70 | 235 | 179 | 4,357 | ' |
Expense costs partially offset in general administraticve expenses by overhead reimbursements | ' | ' | 620 | ' | 1,772 | ' |
Accounts payable-related party | ' | 1 | ' | 1 | ' | 13 |
Affiliated Entity | ' | ' | ' | ' | ' | ' |
Related Party Transaction | ' | ' | ' | ' | ' | ' |
Initial term of the additional shared services agreement | '2 years | ' | ' | ' | ' | ' |
Agreement termination, written notice period | '30 days | ' | ' | ' | ' | ' |
Reimbursement from affiliate | ' | 270 | 643 | 1,047 | 1,654 | ' |
Amount owed by affiliate | ' | $0 | ' | $0 | ' | $1 |
Related_Party_Transactions_Ope
Related Party Transactions - Operating Services (Details) (Affiliated Entity, USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Affiliated Entity | ' | ' |
Related Party Transaction | ' | ' |
Amounts due from affiliates related to joint interest billings and included in accounts receivable-related party | $134 | $742 |
Related_Party_Transactions_Dri
Related Party Transactions - Drilling Services (Details) (USD $) | 0 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 02, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 |
Affiliated Entity | Affiliated Entity | Affiliated Entity, Bison | Affiliated Entity, Bison | |
drilling_rig | drilling_rig | |||
Related Party Transaction | ' | ' | ' | ' |
Number of drilling rigs committed to use during the period | ' | 2 | ' | ' |
Number of drilling rigs | ' | ' | 1 | ' |
Agreement termination, written notice period | '30 days | ' | '30 days | ' |
Amount owed to related party | ' | ' | $270 | $120 |
Related_Party_Transactions_Cor
Related Party Transactions - Coronado Midstream (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | 1-May-09 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Related Party Transaction | ' | ' | ' | ' | ' | ' |
Natural gas revenue from related party | ' | $1,172 | $1,035 | $2,898 | $2,171 | ' |
Affiliated Entity, Coronado Midstream | ' | ' | ' | ' | ' | ' |
Related Party Transaction | ' | ' | ' | ' | ' | ' |
Initial term of the additional shared services agreement | '10 years | ' | ' | ' | ' | ' |
Agreement termination, written notice period | '30 days | ' | ' | ' | ' | ' |
Natural gas revenue from related party | ' | 1,877 | 1,404 | 4,694 | 2,801 | ' |
Amount owed from related party from the sale of gas, gas products and residue gas | ' | $987 | ' | $987 | ' | $6 |
Affiliated Entity, Coronado Midstream | Coronado Midstream Plant | ' | ' | ' | ' | ' | ' |
Related Party Transaction | ' | ' | ' | ' | ' | ' |
Percent of natural gas revenue from related party | ' | 87.00% | ' | 87.00% | ' | ' |
Affiliated Entity, Coronado Midstream | Chevron Headlee Plant | ' | ' | ' | ' | ' | ' |
Related Party Transaction | ' | ' | ' | ' | ' | ' |
Percent of natural gas revenue from related party | ' | 94.56% | ' | 94.56% | ' | ' |
Related_Party_Transactions_San
Related Party Transactions - Sand Supply (Details) (Muskie [Member], USD $) | 3 Months Ended | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Muskie [Member] | ' | ' |
Related Party Transaction | ' | ' |
Related party incurred costs | $0 | $234 |
Related_Party_Transactions_Mid
Related Party Transactions - Midland Lease (Details) (Affiliated Entity, Midland Lease, USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | 15-May-11 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Related Party Transaction | ' | ' | ' | ' | ' |
Term of lease from related party | '5 years | ' | ' | ' | ' |
Office rent to affiliate | ' | $49 | $46 | $131 | $117 |
Monthly rent | ' | ' | ' | 13 | ' |
Annual monthly rent increase | ' | 4.00% | ' | 4.00% | ' |
August [Member] | ' | ' | ' | ' | ' |
Related Party Transaction | ' | ' | ' | ' | ' |
Monthly rent | ' | ' | ' | 15 | ' |
October [Member] | ' | ' | ' | ' | ' |
Related Party Transaction | ' | ' | ' | ' | ' |
Monthly rent | ' | ' | ' | $25 | ' |
Related_Party_Transactions_Okl
Related Party Transactions - Oklahoma City Lease (Details) (Affiliated Entity, Oklahoma City Lease, USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 02, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Affiliated Entity, Oklahoma City Lease | ' | ' | ' | ' | ' |
Related Party Transaction | ' | ' | ' | ' | ' |
Term of lease from related party | '67 months | ' | ' | ' | ' |
Office rent to affiliate | ' | $67 | $60 | $178 | $267 |
Monthly base rent | ' | $19 | ' | $19 | ' |
Related_Party_Transactions_Adv
Related Party Transactions - Advisory Services Agreement & Professional Services from Wexford (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Oct. 11, 2012 | Oct. 11, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Affiliated Entity, Wexford | Controlling Entity | Controlling Entity | Controlling Entity | Controlling Entity | Controlling Entity | ||
Related Party Transaction | ' | ' | ' | ' | ' | ' | ' |
Advisory Services Agreement, Annual Fee | $500 | ' | ' | ' | ' | ' | ' |
Term of advisory services agreement | '2 years | ' | ' | ' | ' | ' | ' |
Agreement termination, written notice period | ' | '30 days | ' | ' | ' | ' | ' |
Related party incurred costs | ' | ' | 125 | 25 | 375 | 119 | ' |
Amount owed to related party | ' | ' | $0 | ' | $0 | ' | $113 |
Related_Party_Transactions_Sec
Related Party Transactions - Secondary Offering Costs (Details) (USD $) | 0 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jul. 05, 2013 | Jun. 24, 2013 | Jul. 05, 2013 |
Wexford and Gulfport Affiliates [Member] | ' | ' | ' |
Related Party Transaction | ' | ' | ' |
Related party incurred costs | ' | ' | $185 |
Common Stock [Member] | ' | ' | ' |
Related Party Transaction | ' | ' | ' |
Shares sold in secondary public offering | ' | 6,000,000 | ' |
Shares sold by existing stockholders | 869,222 | ' | ' |
Stock price per share, selling stockholders | ' | ' | $34.75 |
Derivatives_Open_Derivative_Po
Derivatives - Open Derivative Positions (Details) (Crude Oil [Member], Swap [Member]) | Sep. 30, 2013 |
bbl | |
NYMEX West Texas Intermediate [Member] | October–December 2013 | ' |
Derivative [Line Items] | ' |
Volume (Bbls) | 92,000 |
Fixed Swap Price | 80.55 |
Argus Louisiana Light Sweet [Member] | October–December 2013 | ' |
Derivative [Line Items] | ' |
Volume (Bbls) | 92,000 |
Fixed Swap Price | 100.2 |
Argus Louisiana Light Sweet [Member] | January - December 2014 | ' |
Derivative [Line Items] | ' |
Volume (Bbls) | 515,000 |
Fixed Swap Price | 100.76 |
Argus Louisiana Light Sweet [Member] | January 2015 [Member] | ' |
Derivative [Line Items] | ' |
Volume (Bbls) | 31,000 |
Fixed Swap Price | 101 |
ICE Brent [Member] | October–December 2013 | ' |
Derivative [Line Items] | ' |
Volume (Bbls) | 92,000 |
Fixed Swap Price | 109.7 |
ICE Brent [Member] | January–April 2014 | ' |
Derivative [Line Items] | ' |
Volume (Bbls) | 120,000 |
Fixed Swap Price | 109.7 |
Derivatives_Offsetting_Derivat
Derivatives - Offsetting Derivative Instruments (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ' |
Gross Amounts of Recognized Assets | $1,513 | ' |
Gross Amounts Offset in the Consolidated Balance Sheet | -763 | ' |
Net Amounts of Assets Presented in the Consolidated Balance Sheet | 750 | ' |
Gross Amounts of Recognized Liabilities | 1,933 | 5,205 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | $1,933 | $5,205 |
Derivatives_Balance_Sheet_Loca
Derivatives - Balance Sheet Location (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ' |
Current Assets: Derivative instruments | $223 | $0 |
Noncurrent Assets: Derivative instruments | 527 | 0 |
Total Assets | 750 | 0 |
Current Liabilities: Derivative instruments | 1,933 | 4,817 |
Noncurrent Liabilities: Derivative instruments | 0 | 388 |
Total Liabilities | $1,933 | $5,205 |
Derivatives_Gains_and_Losses_o
Derivatives - Gains and Losses on Derivative Instruments Included in Statement of Operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ' | ' | ' |
Unrealized gain (loss) on open non-hedge derivative instruments | ($1,695) | ($2,252) | $3,733 | $6,386 |
Loss on settlement of non-hedge derivative instruments | -3,215 | -896 | -5,614 | -4,369 |
Gain (loss) on derivative instruments | ($4,910) | ($3,148) | ($1,881) | $2,017 |
Fair_Value_Measurements_Recurr
Fair Value Measurements - Recurring Measurements (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets: | ' | ' |
Derivative Assets | $750 | $0 |
Liabilities: | ' | ' |
Derivative liabilities | 1,933 | 5,205 |
Recurring [Member] | Quoted Prices in Active Markets Level 1 | ' | ' |
Assets: | ' | ' |
Derivative Assets | 0 | ' |
Liabilities: | ' | ' |
Derivative liabilities | 0 | 0 |
Recurring [Member] | Significant Other Observable Inputs Level 2 | ' | ' |
Assets: | ' | ' |
Derivative Assets | 750 | ' |
Liabilities: | ' | ' |
Derivative liabilities | 1,933 | 5,205 |
Recurring [Member] | Significant Unobservable Inputs Level 3 | ' | ' |
Assets: | ' | ' |
Derivative Assets | 0 | ' |
Liabilities: | ' | ' |
Derivative liabilities | 0 | 0 |
Recurring [Member] | Total | ' | ' |
Assets: | ' | ' |
Derivative Assets | 750 | ' |
Liabilities: | ' | ' |
Derivative liabilities | $1,933 | $5,205 |
Fair_Value_Measurements_Nonrec
Fair Value Measurements - Nonrecurring Measurements (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 18, 2013 |
In Thousands, unless otherwise specified | Carrying Amount | Carrying Amount | Fair Value | Fair Value | Senior Notes [Member] | Senior Notes [Member] |
Nonrecurring | Nonrecurring | Nonrecurring | Nonrecurring | Senior Unsecured Notes due 2021 [Member] | Senior Unsecured Notes due 2021 [Member] | |
Fair value of assets and liabilities measured on a recurring and nonrecurring basis | ' | ' | ' | ' | ' | ' |
7.625% Senior Notes due 2021 | $450,000 | $0 | $460,406 | $0 | ' | ' |
Note payable | $230 | $338 | $219 | $305 | ' | ' |
Stated interest rate | ' | ' | ' | ' | 7.63% | 7.63% |