Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 |
Significant Accounting Policies | |
Basis of Presentation | |
Basis of Presentation |
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). All significant intercompany transactions and balances have been eliminated in consolidation. The financial statements reported for December 31, 2014 and 2013 and the results of the operations and the cash flows for each of the three years in the period ended December 31, 2014 include the Company and all of its subsidiaries. |
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Segment Information | |
Segment Information |
The Company operates in one industry segment, which is the exploration, development and production of oil and natural gas, and all of its operations are conducted in one geographic area of the United States. |
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Use of Estimates | |
Use of Estimates |
In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Changes in estimates are recorded prospectively. |
Significant assumptions are required in the valuation of proved oil and natural gas reserves, which affect the Company's estimates of depletion expense, impairment, and the allocation of value in our business combinations. Significant assumptions are also required in the Company's estimates of the net gain or loss on commodity derivative assets and liabilities, fair value associated with business combinations, and asset retirement obligations ("ARO"). |
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Financial Instruments | |
Financial Instruments |
Cash, accounts receivable and accounts payable are recorded at cost. The fair value of accounts receivable and accounts payable are not materially different from their carrying amounts because of the short-term nature of these instruments. The carrying value of the outstanding balance under the Company's Revolver (as defined in Note 6) represents fair value because the Revolver has variable interest rates, which are reflective of the Company's credit risk. The Company's senior notes have a fixed interest rate and are reported at historical value as of the initial measurement date when issued and their fair value is discussed in Note 4. Derivative instruments are recorded at fair value, as discussed below. |
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Cash | |
Cash |
Cash and cash equivalents include highly liquid investments with a maturity of three months or less. At times, the amount of cash on deposit in financial institutions exceeds federally insured limits. Management monitors the soundness of the financial institutions and believes the Company's risk is not significant. |
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Accounts Receivable | |
Accounts Receivable |
Accounts receivable—Oil and gas sales consist of uncollateralized accrued revenues due under normal trade terms, generally requiring payment within 30 to 60 days of production. Accounts receivable—Joint interest owners consist of uncollateralized joint interest owner obligations due within 30 days of the invoice date. Accounts receivable—Other consists at December 31, 2014 of derivative positions not settled as of the balance sheet date and severance tax refunds due from state agencies and at December 31, 2013 of the adjustments to the purchase price of the Sabine properties purchased in December 2013 and severance tax refunds due from state agencies. No interest is charged on past-due balances. The Company routinely assesses the recoverability of all material trade, joint interest and other receivables to determine their collectability, and reduces the carrying amounts by a valuation allowance that reflects management's best estimate of the amounts that may not be collected. As of December 31, 2014 and 2013, the Company did not have significant allowances for doubtful accounts. |
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Concentration of Risk | |
Concentration of Risk |
Substantially all of the Company's accounts receivable are related to the oil and gas industry. This concentration of entities may affect the Company's overall credit risk in that these entities may be affected similarly by changes in economic and other conditions, including declines in commodity prices. As of December 31, 2014, 70% of Accounts receivable—Oil and gas sales are due from 5 purchasers and 67% of Accounts receivable—Joint interest owners are due from 5 working interest owners. As of December 31, 2013, 79% of Accounts receivable—Oil and gas sales were due from 8 purchasers, and 77% of 2013 Accounts receivable—Joint interest owners were due from 5 working interest owners. If any or all of these significant counterparties were to fail to pay amounts due to the Company, the Company's financial position and results of operations could be materially and adversely affected. |
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Dependence on Major Customers | |
Dependence on Major Customers |
The Company maintains a portfolio of crude oil and natural gas marketing contracts with large, established refiners and oil and gas purchasers. During the year ended December 31, 2014, the largest purchasers were Valero Energy Corp. ("Valero"), NGL Energy Partners LP, PVR Midstream LLC ("PVR Midstream"), Plains Marketing LP ("Plains Marketing"), and Monarch Natural Gas LLC which accounted for approximately 22%, 12%, 12%, 10% and 10% of consolidated oil and gas sales, respectively. During the year ended December 31, 2013, the largest purchasers were PVR Midstream, Unimark LLC, Mercuria Energy Group Ltd. ("Mercuria"), Valero, and Plains Marketing, which accounted for approximately 15%, 13%, 13%, 13% and 6% of consolidated oil and gas sales, respectively. During the year ended December 31, 2012, the largest purchasers were Unimark LLC, Mercuria, PVR Midstream, and Plains Marketing, which accounted for approximately 24%, 18%, 18% and 15% of consolidated oil and gas sales, respectively. |
Management believes that there are alternative purchasers and that it may be necessary to establish relationships with such new purchasers. However, there can be no assurance that the Company can establish such relationships and that those relationships will result in an increased number of purchasers. Although the Company is exposed to a concentration of credit risk, management believes that all of the Company's purchasers are credit worthy. |
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Dependence on Suppliers | |
Dependence on Suppliers |
The Company's industry is cyclical, and from time to time, there can be an imbalance between the supply of and demand for drilling rigs, equipment, services, supplies and qualified personnel. During periods of oversupply, there can be financial pressure on suppliers. If the financial pressure leads to work interruptions or stoppages, the Company could be materially and adversely affected. Management believes that there are adequate alternative providers of drilling and completion services although it may become necessary to establish relationships with new contractors. However, there can be no assurance that the Company can establish such relationships and that those relationships will result in increased availability of drilling rigs or other services, or that they could be obtained on the same terms. |
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Oil and Gas Properties | |
Oil and Gas Properties |
The Company accounts for its oil and natural gas exploration and production activities under the successful efforts method of accounting. Oil and gas properties consisted of the following at December 31, 2014 and 2013: |
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(in thousands of dollars) | | 2014 | | 2013 | |
Mineral interests in properties | | | | | | | |
Unproved | | $ | 94,526 | | $ | 99,134 | |
Proved | | | 1,001,194 | | | 958,816 | |
Wells and equipment and related facilities | | | 1,094,202 | | | 609,748 | |
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| | | 2,189,922 | | | 1,667,698 | |
Less: Accumulated depletion and impairment | | | (551,062 | ) | | (370,470 | ) |
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Net oil and gas properties | | $ | 1,638,860 | | $ | 1,297,228 | |
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Costs to acquire mineral interests in oil and natural gas properties are capitalized. Costs to drill and equip development wells and the related asset retirement costs are capitalized. The costs to drill and equip exploratory wells are capitalized pending determination of whether the Company has discovered proved commercial reserves. If proved commercial reserves are not discovered, such drilling costs are charged to expense. In some circumstances, it may be uncertain whether proved commercial reserves have been found when drilling has been completed. Such exploratory well drilling costs may continue to be capitalized if the anticipated reserve quantity is sufficient to justify its completion as a producing well and sufficient progress in assessing the reserves and the economic and operating viability of the project is being made. As of December 31, 2014 and 2013, we had no material capitalized costs associated with exploratory wells. |
The Company capitalizes interest on expenditures for significant exploration and development projects that last more than six months while activities are in progress to bring the assets to their intended use. The Company capitalized less than $0.1 million in interest costs during 2014 for one project. No interest costs were capitalized in 2013. Costs incurred to maintain wells and related equipment are charged to expense as incurred. |
On the sale or retirement of a proved field, the cost and related accumulated depletion, depreciation and amortization are eliminated from the field accounts, and the resultant gain or loss is recognized. |
Capitalized amounts attributable to proved oil and gas properties are depleted by the unit-of-production method over proved reserves, using the unit conversion ratio of six thousand cubic feet of gas to one barrel of oil equivalent. Depletion of the costs of wells and related equipment and facilities, including capitalized asset retirement costs, net of salvage values, is computed using proved developed reserves. The reserve base used to calculate depreciation, depletion, and amortization for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. Depletion of oil and gas properties amounted to $180.6 million, $113.3 million and $79.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
The Company reviews its proved oil and natural gas properties, including related wells and equipment, for impairment by comparing expected undiscounted future cash flows at a producing field level to the net capitalized cost of the asset. If the future undiscounted cash flows, based on the Company's estimate of future commodity prices, operating costs, and production, are lower than the net capitalized cost, the capitalized cost is reduced to fair value. Fair value is calculated by discounting the future cash flows at an appropriate risk-adjusted discount rate. Due to the significant assumptions associated with the inputs and calculations described, the fair value of oil and gas properties used in estimating impairment represents a nonrecurring Level 3 measurement. No impairments of proved properties were recorded in 2014 or 2013. The Company incurred impairment charges of $18.8 million related to its proved oil and natural gas properties and equipment in 2012. |
The Company evaluates its unproved properties for impairment on a property-by-property basis. The Company's unproved property consists of acquisition costs related to its undeveloped acreage. The Company reviews the unproved property for indicators of impairment based on the Company's current exploration plans with consideration given to results of any drilling and seismic activity during the period and known information regarding exploration and development activity by other companies on adjacent blocks. The Company incurred no impairment charges related to its unproved properties in 2014 or 2012. In the fourth quarter of 2013, the Company recorded an impairment charge of $14.4 million related to its unproved Southridge properties in the Arkoma basin. As the Company did not drill the required number of wells by October 31, 2013 necessary to keep its joint development agreement with Southridge in effect, the Company lost its right to the undeveloped acreage. Impairment of oil and gas properties charges are recorded on the Consolidated Statement of Operations. |
On the sale of an entire interest in an unproved property, gain or loss on the sale is recognized, taking into consideration the amount of any recorded impairment if the property had been assessed individually. If a partial interest in an unproved property is sold, the amount received is treated as a reduction of the cost of the interest retained. |
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Other Property, Plant and Equipment | |
Other Property, Plant and Equipment |
Other property, plant and equipment consisted of the following at December 31, 2014 and 2013: |
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(in thousands of dollars) | | 2014 | | 2013 | |
Leasehold improvements | | $ | 1,218 | | $ | 1,060 | |
Furniture, fixtures, computers and software | | | 3,727 | | | 2,491 | |
Vehicles | | | 988 | | | 835 | |
Aircraft | | | 910 | | | 910 | |
Other | | | 219 | | | 134 | |
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| | | 7,062 | | | 5,430 | |
Less: Accumulated depreciation and amortization | | | (3,014 | ) | | (1,986 | ) |
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Net other property, plant and equipment | | $ | 4,048 | | $ | 3,444 | |
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Other property, plant and equipment is depreciated on a straight-line basis over the estimated useful lives of the property, plant and equipment, which range from three years to ten years. Depreciation and amortization of other property, plant and equipment amounted to $1.1 million, $0.8 million and $0.8 million during the years ended December 31, 2014, 2013 and 2012, respectively. |
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Oil and Gas Sales Payable | |
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Oil and Gas Sales Payable |
Oil and gas sales payable represents amounts collected from purchasers for oil and gas sales, which are due to other revenue interest owners. Generally, the Company is required to remit amounts due under these liabilities within 60 days of receipt. |
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Commodity Derivatives | |
Commodity Derivatives |
The Company records its commodity derivative instruments on the Consolidated Balance Sheet as either an asset or liability measured at its fair value. Changes in the derivative's fair value are recognized currently in earnings, unless specific hedge accounting criteria are met. During the years ended December 31, 2014, 2013 and 2012, the Company elected not to designate any of its commodity price risk management activities as cash flow or fair value hedges. The changes in the fair values of outstanding financial instruments are recognized as gains or losses in the period of change. |
Although the Company does not designate its commodity derivative instruments as cash-flow hedges, management uses those instruments to reduce the Company's exposure to fluctuations in commodity prices related to its natural gas and oil production. Net gains and losses, at fair value, are included on the Consolidated Balance Sheet as current or noncurrent assets or liabilities based on the anticipated timing of cash settlements under the related contracts. Changes in the fair value of commodity derivative contracts are recorded in earnings as they occur and are included in other income (expense) on the Consolidated Statement of Operations. See Note 4, "Fair Value Measurement," for disclosure about the fair values of commodity derivative instruments. |
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Asset Retirement Obligations | |
Asset Retirement Obligations |
The Company's asset retirement obligations ("ARO") consist of future plugging and abandonment expenses on oil and natural gas properties. The Company estimates an ARO for each well in the period in which it is incurred based on estimated present value of plugging and abandonment costs, increased by an inflation factor to the estimated date that the well would be plugged. The resulting liability is recorded by increasing the carrying amount of the related long- lived asset. The liability is then accreted to its then-present value each period and the capitalized cost is depleted over the useful life of the related asset. If the liability is settled for an amount other than the recorded amount, a gain or loss is recognized. The ARO is classified as current or noncurrent based on the expect timing of payments. A summary of the Company's ARO for the years ended December 31, 2014 and 2013 is as follows: |
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(in thousands of dollars) | | 2014 | | 2013 | |
ARO liability at beginning of year | | $ | 10,963 | | $ | 9,506 | |
Liabilities incurred(1) | | | 1,995 | | | 1,515 | |
Accretion of discount | | | 770 | | | 608 | |
Liabilities settled due to sale of related properties | | | (109 | ) | | (271 | ) |
Liabilities settled due to plugging and abandonment | | | (55 | ) | | (702 | ) |
Change in estimate | | | 46 | | | 307 | |
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ARO liability at end of year | | | 13,610 | | | 10,963 | |
Less: Current portion of ARO at end of year | | | (3,074 | | | (2,590 | |
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Total long-term ARO at end of year | | $ | 10,536 | | $ | 8,373 | |
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-1 | Includes $824 related to wells acquired in 2013 (see Note 3, "Acquisition of Properties"). | | | | | | |
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Revenue Recognition | Revenue Recognition |
Revenues from the sale of crude oil, natural gas, and natural gas liquids are recognized when the product is delivered at a fixed or determinable price, title has transferred, collectability is reasonably assured and evidenced by a contract. The Company follows the "sales method" of accounting for its oil and natural gas revenue, so it recognizes revenue on all crude oil, natural gas, and natural gas liquids sold to purchasers. A receivable or liability is recognized only to the extent that the Company has an imbalance on a specific property greater than the expected remaining proved reserves. |
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Production Costs | |
Production Costs |
Production costs, including compressor rental, pumpers' salaries, saltwater disposal, ad valorem taxes, insurance, repairs and maintenance, expensed workovers and other operating expenses are expensed as incurred and included in lease operating expense on the Consolidated Statement of Operations. |
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Exploration Expenses | |
Exploration Expenses |
Exploration expenses include dry hole costs, lease extensions, delay rentals and geological and geophysical costs. |
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Income Taxes | |
Income Taxes |
Following its IPO on July 29, 2013, the Company began recording a federal and state income tax liability associated with its status as a corporation. No provision for federal income taxes was recorded prior to the IPO because the taxable income or loss was includable in the income tax returns of the individual partners and members. The Company is also subject to state income taxes. The State of Texas includes in its tax system a franchise tax applicable to the Company and an accrual for franchise taxes is included in the financial statements when appropriate. |
Income taxes are accounted for under the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which differences are expected to be recovered or settled pursuant to the provisions of ASC 740—Income Taxes. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. |
The Company records a valuation allowance if it is deemed more likely than not that all or a portion of its deferred income tax assets will not be realized. In addition, income tax rules and regulations are subject to interpretation and the application of those rules and regulations require judgment by the Company and may be challenged by the taxation authorities. The Company follows ASC 740-10-25, which requires the use of a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return and disclosures regarding uncertainties in income tax positions. Only tax positions that meet the more likely than not recognition threshold are recognized. The Company's policy is to include any interest and penalties recorded on uncertain tax positions as a component of income tax expense. The Company's unrecognized tax benefits or related interest and penalties are immaterial. |
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Liability under Tax Receivable Agreement | |
Liability under Tax Receivable Agreement |
In connection with the IPO, the Company entered into a Tax Receivable Agreement (the "TRA") which obligated the Company to make payments to certain current and former owners equal to 85% of the applicable cash savings that the Company realizes as a result of tax attributes arising from exchanges of JEH Units and JEI Class B shares held by those owners for Class A shares of JEI common stock. The Company will retain the benefit of the remaining 15% of these tax savings. |
As a result of exchanges made through December 31, 2014, the Company has accrued future tax benefits of $0.9 million and has recorded this amount as a deferred tax asset on its consolidated balance sheet. As of December 31, 2014, the Company has recorded a liability of $0.8 million associated with its future TRA obligation. The actual amount and timing of payments made under the TRA will depend upon a number of factors, including the amount and timing of taxable income generated in the future, changes in future tax rates, the use of loss carryovers, and the portion of the Company's payments under the TRA constituting imputed interest. To the extent the Company does not realize all of the tax benefits in future years or in the event of a change in future tax rates, this liability may change. |
As of December 31, 2014, the Company has made no payments under the TRA and does not anticipate making a material payment under the TRA in 2015. |
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Comprehensive Income | |
Comprehensive Income |
The Company has no elements of comprehensive income other than net income. |
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Statement of Cash Flows | |
Statement of Cash Flows |
The Company presents its cash flows using the indirect method. |
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Related Party Transactions | |
Related Party Transactions |
In the years ended December 31, 2013 and 2012, the Company paid an annual administration fee to Metalmark of $0.7 million. This amount was charged to expense. As a result of the IPO, this fee is no longer payable to Metalmark. |
On May 7, 2013, the Company entered into a natural gas sale and purchase agreement with Monarch Natural Gas, LLC, ("Monarch"), under which Monarch has the first right to gather the natural gas the Company produces from dedicated properties, process the NGLs from this natural gas production and market the processed natural gas and extracted NGLs. Under the Monarch agreement, the Company is paid a specified percentage of the value of the NGLs extracted and sold by Monarch, based on a set liquids recovery percentage, and the amount received from the sale of the residue gas, after deducting a fixed volume for fuel, lost and unaccounted for gas. The Company produced approximately 1.4 MMBoe of natural gas and NGLs for the year ended December 31, 2014 and 0.8 MMBoe of natural gas and NGLs for the year ended December 31, 2013, from the properties that became subject to the Monarch agreement. The initial term of the agreement runs for 10 years from the effective date of September 1, 2013. |
At the time the Company entered into the agreement, Metalmark Capital owned approximately 81% of the outstanding equity interests of Monarch. In addition, Metalmark Capital beneficially owns in excess of five percent of the Company's outstanding equity interests and two of our directors, Howard I. Hoffen and Gregory D. Myers, are managing directors of Metalmark Capital. In connection with the Company's entering into the Monarch agreement, Monarch issued to JEH equity interests in Monarch having a deemed value of $15 million. JEH assigned $2.4 million of the Monarch equity interests to Jonny Jones, the Company's chief executive officer and chairman of the board, and reserved $2.6 million of the Monarch equity interests to a benefit plan established for certain of the Company's officers, including Mike McConnell, Robert Brooks and Eric Niccum. The remaining $10 million of Monarch equity was distributed to certain of the pre-IPO owners, which include Metalmark Capital, Wells Fargo, the Jones family entities, and certain of the Company's officers and directors, including Jonny Jones, Mike McConnell and Eric Niccum. |
In September 2014, the Company signed a 10-year oil gathering and transportation agreement with Monarch Oil Pipeline LLC, pursuant to which Monarch Oil Pipeline, LLC will build, at its expense, a new oil gathering system and connect to dedicated Company leases in Texas. At the time the Company entered into the agreement, Metalmark Capital owned the majority of the outstanding equity interests of Monarch Oil Pipeline, LLC and/or its parent. The system is expected to begin service during the second quarter of 2015 and provide connectivity to both a regional refinery market as well as the Cushing market hub. The Company has reserved capacity of up to 12,000 barrels per day on the system with the potential to increase throughput at a future date. |
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Stock Compensation | |
Stock Compensation |
JEH implemented a management incentive plan effective January 1, 2010, that provided awards of membership interests in JEH to members of senior management ("management units"). The management unit grants awarded prior to the initial filing of the IPO registration statement in March 2013 had a dual vesting schedule and were fully vested as of December 31, 2014. Grants awarded after the initial IPO registration statement generally have a single vesting structure of five equal annual installments and were valued at the IPO price, adjusted for equivalent shares. Both the vested and unvested management units were converted into JEH Units and shares of Class B common stock at the IPO date. At December 31, 2014, there were 274,385 unvested JEH Units and shares of Class B common stock that will become convertible into a like number of shares of Class A common stock upon vesting. |
Under the Jones Energy, Inc. 2013 Omnibus Incentive Plan, established in conjunction with the Company's IPO, the Company reserved 3,850,000 shares of Class A common stock for director and employee stock-based compensation awards. |
During 2014, the Company granted performance unit and restricted stock unit awards to certain officers and employees under the Jones Energy, Inc. 2013 Omnibus Incentive Plan. The fair value of the performance units was based on the grant date fair value (using a Monte Carlo simulation model) and is expensed on a straight-line basis over the applicable three-year performance period. The number of shares of Class A common stock issuable upon vesting of the performance unit awards ranges from zero to 200% based on the Company's total shareholder return relative to an industry peer group over the applicable three-year performance period. The fair value of the restricted stock unit awards was based on the value of the Company's Class A common stock on the date of grant and is expensed on a straight-line basis over the applicable three-year vesting period. |
In September 2014 and 2013, the Company granted each of the outside members of the Board of Directors 5,486 and 6,645 shares, respectively, of restricted Class A common stock under the Jones Energy, Inc. 2013 Omnibus Incentive Plan. The fair value of the restricted stock grants was based on the value of the Company's Class A common stock on the date of grant and is expensed on a straight-line basis over the one-year vesting period. |
Refer to Note 7, "Stock-based Compensation," for additional information regarding director and employee stock-based compensation awards |
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Business Combinations | |
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Business Combinations |
For acquisitions of working interests that are accounted for as business combinations, the results of operations are included in the Consolidated Statement of Operations from the date of acquisition. Purchase prices are allocated to assets acquired based on their estimated fair values at the time of acquisition. Fair value is the price that would be received to sell an asset or would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the assumptions of market participants and not those of the reporting entity. Therefore, entity-specific intentions do not impact the measurement of fair value. The fair value of oil and natural gas properties is determined using a risk-adjusted after-tax discounted cash flow analysis based upon significant inputs including: 1) oil and gas prices, 2) projections of estimated quantities of oil and natural gas reserves, including those classified as proved, probable and possible, 3) projections of future rates of production, 4) timing and amount of future development and operating costs, 5) projected reserve recovery factors, and 6) weighted average cost of capital. |
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Recent Accounting Pronouncements | |
Recent Accounting Pronouncements |
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers," which creates a new topic in the Accounting Standards Codification ("ASC"), topic 606, "Revenue from Contracts with Customers." This ASU sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity will be required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. Additional disclosures will be required to describe the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and may be applied on either a full or modified retrospective basis. Early adoption is not permitted. We do not expect the adoption of these provisions to have a significant impact on the Company's consolidated financial statements. However, we will continue to assess the anticipated impact as further implementation guidance is released from the FASB. |
In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern." This ASU requires management to evaluate whether there are conditions or events that raise substantial doubt about an entity's ability to continue as a "going concern" and to provide disclosures when certain criteria are met. Substantial doubt exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted. We do not expect the adoption of these disclosures to have a significant impact on the Company's consolidated financial statements. |
In January 2015, the FASB issued Accounting Standards Update No. 2015-01, Income Statement—Extraordinary and Unusual Items ("ASU 2015-01"). ASU 2015-01 removes the concept of extraordinary items from GAAP. Under existing guidance, an entity is required to separately disclose extraordinary items, net of tax, in the income statement after income from continuing operations if an event or transaction is of an unusual nature and occurs infrequently. This separate, net-of-tax presentation will no longer be allowed. ASU 2015-01 is effective for interim and annual reporting periods beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on its financial position, cash flows or results of operations. |
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