Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2013 | |
Entity Registrant Name | Jones Energy, Inc. |
Entity Central Index Key | 1573166 |
Document Type | 8-K |
Document Period End Date | 31-Dec-13 |
Amendment Flag | FALSE |
Current Fiscal Year End Date | -19 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||
Current assets | ||||
Cash | $23,820 | $23,726 | ||
Restricted Cash | 45 | |||
Accounts receivable, net | ||||
Oil and gas sales | 51,233 | 29,684 | ||
Joint interest owners | 42,481 | 21,876 | ||
Other | 1,459 | 4,590 | ||
Commodity derivative assets | 8,837 | 17,648 | ||
Other current assets | 2,392 | 1,088 | ||
Deferred tax assets | 12 | |||
Total current assets | 130,279 | 98,612 | ||
Oil and gas properties, net, at cost under the successful efforts method | 1,312,551 | 1,007,344 | ||
Other property, plant and equipment, net | 3,444 | 3,398 | ||
Commodity derivative assets | 25,398 | 25,199 | ||
Other assets | 15,006 | 16,133 | ||
Deferred tax assets | 1,301 | |||
Total assets | 1,487,979 | 1,150,686 | ||
Current liabilities | ||||
Trade accounts payable | 89,430 | 38,036 | ||
Oil and gas sales payable | 66,179 | 45,860 | ||
Accrued liabilities | 10,805 | 5,255 | ||
Commodity derivative liabilities | 10,664 | 4,035 | ||
Deferred tax liabilities | 61 | |||
Asset retirement obligations | 2,590 | 174 | ||
Total current liabilities | 179,668 | 93,421 | ||
Long-term debt | 658,000 | 610,000 | ||
Deferred revenue | 14,531 | |||
Commodity derivative liabilities | 190 | 7,657 | ||
Asset retirement obligations | 8,373 | 9,332 | ||
Deferred tax liabilities | 3,093 | 1,876 | ||
Total liabilities | 863,855 | 722,286 | ||
Commitments and contingencies (Note 10) | ||||
Stockholders' / members' equity | ||||
Members' equity | 428,400 | |||
Additional paid-in-capital | 173,169 | |||
Retained earnings (deficit) | -2,186 | |||
Stockholders' / members' equity | 171,033 | 428,400 | ||
Non-controlling interest | 453,091 | |||
Total stockholders' / members' equity | 624,124 | 428,400 | 345,909 | 284,449 |
Total liabilities and stockholders' / members' equity | 1,487,979 | 1,150,686 | ||
Class A common stock | ||||
Stockholders' / members' equity | ||||
Common stock | 13 | |||
Class B common stock | ||||
Stockholders' / members' equity | ||||
Common stock | $37 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 |
Class A common stock | |
Common Stock, par value (in dollars per share) | $0.00 |
Common Stock, shares issued | 12,526,580 |
Common Stock, shares outstanding | 12,526,580 |
Class B common stock | |
Common Stock, par value (in dollars per share) | $0.00 |
Common Stock, shares issued | 36,836,333 |
Common Stock, shares outstanding | 36,836,333 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating revenues | |||
Oil and gas sales | $258,063 | $148,967 | $167,261 |
Other revenues | 1,106 | 847 | 1,022 |
Total operating revenues | 259,169 | 149,814 | 168,283 |
Operating costs and expenses | |||
Lease operating | 27,781 | 23,097 | 21,548 |
Production taxes | 12,865 | 5,583 | 5,333 |
Exploration | 1,710 | 356 | 780 |
Depletion, depreciation and amortization | 114,136 | 80,709 | 68,906 |
Impairment of oil and gas properties | 14,415 | 18,821 | 31,970 |
Accretion of discount | 608 | 533 | 413 |
General and administrative (including non-cash compensation expense) | 31,902 | 15,875 | 16,679 |
Total operating expenses | 203,417 | 144,974 | 145,629 |
Operating income | 55,752 | 4,840 | 22,654 |
Other income (expense) | |||
Interest expense | -30,774 | -25,292 | -21,994 |
Net gain (loss) on commodity derivatives | -2,566 | 16,684 | 34,490 |
Gain on bargain purchase | 26,208 | ||
Gain (loss) on sales of assets | -78 | 1,162 | -859 |
Other income (expense), net | -33,418 | -7,446 | 37,845 |
Income (loss) before income tax | 22,334 | -2,606 | 60,499 |
Income tax provision | |||
Current | 85 | ||
Deferred | -156 | 473 | 173 |
Total income tax provision | -71 | 473 | 173 |
Net income (loss) | 22,405 | -3,079 | 60,326 |
Net income attributable to non-controlling interests | 24,591 | ||
Net income (loss) attributable to controlling interests | ($2,186) | ($3,079) | $60,326 |
Earnings per share: | |||
Basic and diluted (in dollars per share) | ($0.17) | ||
Weighted average shares outstanding: | |||
Basic and diluted (in shares) | 12,500 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes In Stockholders' / Members' Equity (USD $) | Total | Common Stock | Common Stock | Members' Equity | Additional Paid-in-Capital | Retained Deficit | Non-controlling interest |
In Thousands, unless otherwise specified | Class A common stock | Class B common stock | |||||
Balance at Dec. 31, 2010 | $284,449 | $284,449 | |||||
Increase (Decrease) Stockholders' / members' equity | |||||||
Stock-compensation expense | 1,134 | 1,134 | |||||
Net income (loss) | 60,326 | 60,326 | |||||
Balance at Dec. 31, 2011 | 345,909 | 345,909 | |||||
Increase (Decrease) Stockholders' / members' equity | |||||||
Issuance of Class C Preferred Units | 85,000 | 85,000 | |||||
Stock-compensation expense | 570 | 570 | |||||
Net income (loss) | -3,079 | -3,079 | |||||
Balance at Dec. 31, 2012 | 428,400 | 428,400 | |||||
Increase (Decrease) Stockholders' / members' equity | |||||||
Issuance of common stock | 50 | 13 | 37 | ||||
Issuance of common stock (in shares) | 12,500 | 36,836 | |||||
Proceeds from the sale of common stock | 172,431 | 172,431 | |||||
Reclassification of members' contributions | -464,037 | 464,037 | |||||
Stock-compensation expense | 10,838 | 10,100 | 738 | ||||
Distribution to members | -10,000 | -10,000 | |||||
Net income (loss) | 22,405 | 35,537 | -2,186 | -10,946 | |||
Balance at Dec. 31, 2013 | $624,124 | $13 | $37 | $173,169 | ($2,186) | $453,091 | |
Balance (in shares/units) at Dec. 31, 2013 | 12,500 | 36,836 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities | |||
Net income (loss) | $22,405 | ($3,079) | $60,326 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | |||
Exploration expense | 478 | ||
Depletion, depreciation, and amortization | 114,136 | 80,709 | 68,906 |
Impairment of oil and gas properties | 14,415 | 18,821 | 31,970 |
Accretion of discount | 608 | 533 | 413 |
Amortization of debt issuance costs | 2,677 | 3,544 | 2,940 |
Stock compensation expense | 10,838 | 570 | 1,134 |
Other non-cash compensation expense (Note 9) | 2,719 | ||
Amortization of deferred revenue | -469 | ||
Gain on commodity derivatives | 2,566 | -16,684 | -34,490 |
Gain on bargain purchase price | -26,208 | ||
(Gain) loss on sales of assets | 78 | -1,162 | 859 |
Deferred income tax provision | -156 | 473 | 173 |
Other - net | 79 | 129 | -59 |
Changes in assets and liabilities | |||
Accounts receivable | -41,481 | 11,568 | -32,593 |
Other assets | 163 | 1,873 | -3,360 |
Accounts payable and accrued liabilities | 35,318 | -12,745 | 49,728 |
Net cash provided by operations | 163,896 | 84,550 | 120,217 |
Cash flows from investing activities | |||
Additions to oil and gas properties | -197,618 | -125,493 | -157,046 |
Acquisition of properties | -193,496 | -249,007 | -168,480 |
Proceeds from sales of assets | 1,607 | 9,158 | 6,747 |
Acquisition of other property, plant and equipment | -1,634 | -969 | -1,735 |
Current period settlements of matured derivative contracts | 7,586 | 28,675 | 1,551 |
Change in restricted cash | -45 | ||
Net cash (used in) / provided by investing | -383,600 | -337,636 | -318,963 |
Cash flows from financing activities | |||
Proceeds from issuance of long-term debt | 220,000 | 233,243 | 316,500 |
Repayment under long-term debt | -172,000 | -38,243 | -126,500 |
Payment of debt issuance costs | -683 | -9,324 | -3,678 |
Issuance of preferred units | 85,000 | ||
Proceeds from sale of common stock, net of expenses of $15.1 million | 172,481 | ||
Net cash provided by financing | 219,798 | 270,676 | 186,322 |
Net increase (decrease) in cash | 94 | 17,590 | -12,424 |
Cash | |||
Beginning of period | 23,726 | 6,136 | 18,560 |
End of period | 23,820 | 23,726 | 6,136 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 25,414 | 20,759 | 18,151 |
Change in accrued additions to oil and gas properties | 41,945 | 3,355 | 26,774 |
Noncash acquisition of oil and gas properties | 2,918 | ||
Current additions to ARO | 1,516 | 662 | 4,077 |
Noncash distributions to members (Note 9) | $10,000 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Consolidated Statements of Cash Flows | |
Payment of stock issuance expenses | $15.10 |
Organization_and_Description_o
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2013 | |
Organization and Description of Business | |
Organization and Description of Business | 1. Organization and Description of Business |
Organization | |
Jones Energy, Inc. (the "Company") was formed in March 2013 as a Delaware corporation to become a publicly-traded entity and the holding company of Jones Energy Holdings, LLC ("JEH"). As the sole managing member of JEH, Jones Energy, Inc. is responsible for all operational, management and administrative decisions relating to JEH's business and consolidates the financial results of JEH and its subsidiaries. | |
JEH was formed as a Delaware limited liability company on December 16, 2009 through investments made by the Jones family and through private equity funds managed by Metalmark Capital and Wells Fargo Energy Capital. JEH acts as a holding company of operating subsidiaries that own and operate assets that are used in the exploration, development, production and acquisition of oil and natural gas properties. | |
Pursuant to the terms of a corporate reorganization that was completed in connection with the closing of Jones Energy, Inc.'s initial public offering ("IPO") on July 29, 2013, the pre-IPO owners of JEH converted their existing membership interests in JEH into JEH Units and amended the existing LLC agreement to, among other things, modify its equity capital to consist solely of JEH Units and to admit Jones Energy, Inc. as the sole managing member of JEH. Jones Energy, Inc.'s certificate of incorporation authorizes two classes of common stock, Class A common stock and Class B common stock. Only Class A common stock was offered to investors pursuant to the IPO. The Class B common stock is held by the pre-IPO owners of JEH and can be exchanged (together with a corresponding number of JEH Units) for shares of Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications and other similar transactions. The Class B common stock has no economic rights but entitles its holder to one vote on all matters to be voted on by the Company's stockholders generally. As a result of the IPO, the pre-IPO owners retained 74.7% of the total economic interest in JEH, but with no voting rights or management power over JEH, resulting in the Company reporting this ownership interest as a non-controlling interest. Prior to the IPO, JEH owned the controlling interest in the Company; hence all of the net income (loss) earned prior to the IPO date is reflected in the net income (loss) attributable to non-controlling interests on the Consolidated Statement of Operations for the year ended December 31, 2013. | |
Description of Business | |
The Company is engaged in the acquisition, exploration, and production of oil and natural gas properties in the mid-continent United States. The Company's assets are located within two distinct basins in the Texas Panhandle and Oklahoma, the Anadarko Basin and the Arkoma Basin, and are owned by JEH and its operating subsidiaries. The Company is headquartered in Austin, Texas. | |
Revision of Previously Issued Financial Statements | |
We identified an error in our previously issued financial statements which would have been material to our fourth quarter of 2013 if recorded as an out of period adjustment in such period. Therefore we have revised our Consolidated Statement of Operations for the years ended December 31, 2012 and 2011 to record $0.6 million and $0.8 million, respectively of additional interest expense on obligations that are unrelated to our credit agreements discussed in Note 6. As a result, net income decreased for the years ended December 31, 2012 and 2011 by $0.6 million and $0.8 million, respectively. The balance sheet impacts of the revision are increases in accrued liabilities and decreases in members' equity of $0.6 million and $1.4 million at December 31, 2011 and 2012, respectively. These revisions had no impact on our net cash provided by operations in our Consolidated Statement of Cash Flows. We have determined that these errors are not material to our consolidated financial statements for the years ended December 31, 2012 and 2011. | |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Significant Accounting Policies | ||||||||
Significant Accounting Policies | 2. Significant Accounting Policies | |||||||
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, 2013, 2012 and 2011, and the years then ended include the Company and all of its subsidiaries. | ||||||||
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. | ||||||||
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"). | ||||||||
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 values of outstanding balances under the Company's credit agreements represent fair value because the agreements have variable interest rates, which are reflective of the Company's credit risk. Derivative instruments are recorded at fair value, as discussed below. | ||||||||
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 negligible. | ||||||||
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 consist primarily of 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, 2013 and 2012, the Company did not have significant allowances for doubtful accounts. | ||||||||
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. As of December 31, 2013, 79% of Accounts receivable—Oil and gas sales are due from 8 purchasers and 77% of Accounts receivable—Joint interest owners are due from 5 working interest owners. As of December 31, 2012, 92% of Accounts receivable—Oil and gas sales were due from 8 purchasers, and 72% of 2012 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. | ||||||||
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, 2013, the largest purchasers were PVR Midstream, Unimark LLC, 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. During the year ended December 31, 2011, the largest purchasers were Plains Marketing, PVR Midstream, Unimark LLC, and Valero Marketing, which accounted for approximately 27%, 22%, 13% and 9% 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. | ||||||||
Dependence on Suppliers | ||||||||
The Company's industry is cyclical, and from time to time, there is a shortage of drilling rigs, equipment, services, supplies and qualified personnel. During these periods, the costs and delivery times of rigs, equipment, services and supplies are substantially greater. If the unavailability or high cost of drilling rigs, equipment, services, supplies or qualified personnel were particularly severe in its areas of operation, the Company could be materially and adversely affected. Management believes that there are potential alternative providers of drilling and completion services and that 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. | ||||||||
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, 2013 and 2012: | ||||||||
(in thousands of dollars) | 2013 | 2012 | ||||||
Mineral interests in properties | ||||||||
Unproved | $ | 114,457 | $ | 137,254 | ||||
Proved | 958,816 | 737,558 | ||||||
Wells and equipment and related facilities | 609,748 | 389,727 | ||||||
| | | | | | | | |
1,683,021 | 1,264,539 | |||||||
Less: Accumulated depletion and impairment | (370,470 | ) | (257,195 | ) | ||||
| | | | | | | | |
Net oil and gas properties | $ | 1,312,551 | $ | 1,007,344 | ||||
| | | | | | | | |
| | | | | | | | |
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. In 2013, we had no material capitalized costs associated with exploratory wells. As of December 31, 2012, there were no costs capitalized in connection with exploratory wells in progress. | ||||||||
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 did not capitalize any interest in 2013 as no projects lasted more than six months. During the year ended December 31, 2012, the Company capitalized $0.1 million in interest. 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 $113.3 million, $79.9 million and $68.2 million for the years ended December 31, 2013, 2012 and 2011, 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. The Company incurred impairment charges of $18.8 million and $19.8 million related to its proved oil and natural gas properties and equipment in 2012 and 2011, respectively. No impairments of proved properties were recorded in 2013. | ||||||||
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 activity by other companies on adjacent blocks. In the fourth quarter of 2013, the Company recorded an impairment charge of $14.4 million related to its unproved Southridge properties. 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. The Company incurred no impairment charges related to its unproved properties in 2012. In 2011, the Company incurred a $12.2 million impairment charge related to its unproven properties in fields which were not expected to produce natural gas with a sufficiently high liquid content reducing the economic return of those fields. These charges represent nonrecurring Level 3 measurements. 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. | ||||||||
Other Property, Plant and Equipment | ||||||||
Other property, plant and equipment consisted of the following at December 31, 2013 and 2012: | ||||||||
(in thousands of dollars) | 2013 | 2012 | ||||||
Leasehold improvements | $ | 1,060 | $ | 983 | ||||
Furniture, fixtures, computers and software | 2,491 | 2,204 | ||||||
Vehicles | 835 | 719 | ||||||
Aircraft | 910 | 1,295 | ||||||
Other | 134 | 134 | ||||||
| | | | | | | | |
5,430 | 5,335 | |||||||
Less: Accumulated depreciation and amortization | (1,986 | ) | (1,937 | ) | ||||
| | | | | | | | |
Net other property, plant and equipment | $ | 3,444 | $ | 3,398 | ||||
| | | | | | | | |
| | | | | | | | |
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 $0.8 million, $0.8 million and $0.7 million during the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||
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. | ||||||||
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, 2013, 2012 and 2011, 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 Jones 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. | ||||||||
Asset Retirement Obligations | ||||||||
The Company's asset retirement obligations 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, 2013 and 2012 is as follows: | ||||||||
(in thousands of dollars) | 2013 | 2012 | ||||||
ARO liability at beginning of year | $ | 9,506 | $ | 9,563 | ||||
Liabilities incurred(1) | 1,515 | 662 | ||||||
Accretion of discount | 608 | 596 | ||||||
Liabilities settled due to sale of related properties | (271 | ) | (927 | ) | ||||
Liabilities settled due to plugging and abandonment | (702 | ) | (388 | ) | ||||
Change in estimate | 307 | — | ||||||
| | | | | | | | |
ARO liability at end of year | 10,963 | 9,506 | ||||||
Less: Current portion of ARO at end of year | (2,590 | ) | (174 | ) | ||||
| | | | | | | | |
Total long-term ARO at end of year | $ | 8,373 | $ | 9,332 | ||||
| | | | | | | | |
| | | | | | | | |
-1 | ||||||||
Includes $824 related to wells acquired (see Note 3, "Acquisition of Properties"). | ||||||||
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. | ||||||||
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. | ||||||||
Exploration Expenses | ||||||||
Exploration expenses include dry hole costs, lease extensions, delay rentals and geological and geophysical costs. | ||||||||
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. | ||||||||
Tax Receivable Agreement | ||||||||
In conjunction with the IPO, the Company entered into a Tax Receivable Agreement ("TRA") with JEH and the pre-IPO owners. Upon any exchange of JEH—Units and Class B common stock of the Company held by JEH's pre-IPO owners for Class A common stock of the Company, the TRA provides for the payment by the Company, directly to such exchanging owners, of 85% of the amount of cash savings in income or franchise taxes that the Company realizes as a result of (i) the tax basis increases resulting from the exchange of JEH Units for shares of Class A common stock (or resulting from a sale of JEH Units for cash) and (ii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, any payments the Company makes under the TRA. The Company will retain the benefit of the remaining 15% of the cash savings. Liabilities under the TRA will be recognized upon the exchange of shares. As of December 31, 2013, there have been no exchanges and no liability is recorded on the Consolidated Balance Sheet. | ||||||||
Comprehensive Income | ||||||||
The Company has no elements of comprehensive income other than net income. | ||||||||
Statement of Cash Flows | ||||||||
The Company presents its cash flows using the indirect method. | ||||||||
Related Party Transactions | ||||||||
In the years ended December 31, 2013, 2012 and 2011, 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, or Monarch, under which Monarch has the first right to gather the natural gas the Company produces from the Chalker 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. For the year ended December 31, 2013, the Company produced approximately 0.8 MMBoe of natural gas and NGLs from the Chalker 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, Robert Brooks and Eric Niccum. | ||||||||
Stock Compensation | ||||||||
JEH implemented a management incentive plan effective January 1, 2010, that provided membership-interest awards in JEH to members of senior management ("management units"). The management unit grants awarded prior to the initial filing of the registration statement in March 2013 had a dual vesting schedule. Sixty percent of the units awarded vested in five equal annual installments, with the remaining 40% vesting upon a company restructuring event, including the IPO. All grants awarded after the initial registration statement 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, 2013, there were 457,150 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. As of December 31, 2013 no such awards had been issued or granted to any of the Company's employees. | ||||||||
On September 4, 2013, the Company granted each of the four outside members of the Board of Directors 6,645 shares 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 the management units and restricted stock awards. | ||||||||
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. | ||||||||
Recent Accounting Developments | ||||||||
The following recently issued accounting pronouncement has been adopted by the Company: | ||||||||
Offsetting Assets and Liabilities | ||||||||
In December 2011, the Financial Accounting Standards Board ("FASB"), issued authoritative guidance requiring entities to disclose both gross and net information about instruments and transactions eligible for offset arrangement. In January 2013, FASB issued an update to the previously issued guidance with the purpose of clarifying the scope of the disclosures about the offsetting assets and liabilities. The additional disclosures enable users of the financial statements to evaluate the effect or potential effect of netting arrangements on an entity's financial position. These disclosure requirements are effective for interim and annual periods beginning after January 1, 2013. The Company has provided all required disclosures for the periods presented as they pertain to its commodity derivative instruments (see Note 4, "Fair Value Measurement"). These disclosure requirements did not affect the Company's operating results, financial position, or cash flows. | ||||||||
Acquisition_of_Properties
Acquisition of Properties | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Acquisition of Properties | ||||||||
Acquisition of Properties | 3. Acquisition of Properties | |||||||
On December 18, 2013, JEH closed on the purchase of certain oil and natural gas properties located in Texas and western Oklahoma from Sabine Mid-Continent, LLC, for an adjusted purchase price of $193.5 million (referred to herein as the "Sabine acquisition" or "Sabine"), subject to customary closing adjustments. The acquired assets include both producing properties and undeveloped acreage. The purchase was financed with borrowings under the senior secured credit facility. The purchase price was allocated as follows: | ||||||||
(in thousands of dollars) | ||||||||
Oil and gas properties | ||||||||
Unproved | $ | 39,596 | ||||||
Proved | 154,724 | |||||||
Asset retirement obligations | (824 | ) | ||||||
| | | | | ||||
Total purchase price | $ | 193,496 | ||||||
| | | | | ||||
| | | | | ||||
This acquisition qualified as a business combination under ASC 805. The valuation to determine the fair value was principally based on the discounted cash flows of the producing and undeveloped properties, including projected drilling and equipment costs, recoverable reserves, production streams, future prices and operating costs, and risk-adjusted discount rates reflective of the current market. The determination of fair value is dependent on factors as of the acquisition date and the final adjustments to the purchase price, which when they occur, may result in an adjustment to the value of the acquired properties reflected in the consolidated financial statements. Any such adjustment may be material. | ||||||||
In connection with the closing, approximately $24 million of the purchase price was placed in an escrow account. This amount represented the allocated value of the Sabine properties that had unresolved title defects claimed by JEH. In the event one or more title defects are not cured by Sabine, the affected property will be reconveyed to Sabine and the Company will receive an amount of cash from the escrow account equal to the allocated value of the reconveyed property. A corresponding adjustment to the allocation of the Sabine purchase price will be made at such time. | ||||||||
The unaudited pro forma results presented below have been prepared to include the effect of the Sabine acquisition on our results of operations for the year ended December 31, 2013. The unaudited pro forma results do not purport to represent what our actual results of operations would have been if the acquisition had been completed on January 1, 2013 or to project our results of operations for any future date or period. | ||||||||
Year Ended | ||||||||
December 31, | ||||||||
Post Acquisition(1) | 2013 | |||||||
(in thousands of dollars) | Pro Forma | |||||||
(unaudited) | (unaudited) | |||||||
Total operating revenue | $ | 1,365 | $ | 308,773 | ||||
Total operating expenses | 291 | 229,648 | ||||||
Operating income | 1,074 | 79,125 | ||||||
Net income | 1,074 | 45,778 | ||||||
-1 | ||||||||
Represents revenues and expenses for the post acquisition period of December 18, 2013 to December 31, 2013 included in the Consolidated Statement of Operations. | ||||||||
On December 20, 2012, JEH acquired certain oil and natural gas properties located in Texas for a purchase price of $251.9 million (referred to herein as the "Chalker acquisition" or "Chalker"). The acquired assets included both producing properties and undeveloped acreage. The purchase was financed with additional equity capital and borrowings under the senior secured credit facility. In the second quarter of 2013, the Company made a final determination with the sellers as to the purchase price adjustments resulting in a final purchase price of $253.5 million. The final purchase price was allocated as follows: | ||||||||
(in thousands of dollars) | ||||||||
Oil and gas properties | ||||||||
Unproved | $ | 71,264 | ||||||
Proved | 182,493 | |||||||
Asset retirement obligations | (293 | ) | ||||||
| | | | | ||||
Total purchase price | $ | 253,464 | ||||||
| | | | | ||||
| | | | | ||||
This acquisition qualified as a business combination under ASC 805. The valuation to determine the fair value was principally based on the discounted cash flows of the producing and undeveloped properties, including projected drilling and equipment costs, recoverable reserves, production streams, future prices and operating costs, and risk-adjusted discount rates reflective of the current market. | ||||||||
The unaudited pro forma results presented below have been prepared to include the effect of the Chalker acquisition on our results of operations for the year ended December 31, 2012. The unaudited pro forma results do not purport to represent what our actual results of operations would have been if the acquisition had been completed on January 1, 2012 or to project our results of operations for any future date or period. | ||||||||
Year Ended | ||||||||
December 31, | ||||||||
2012 | ||||||||
(in thousands of dollars) | Pro Forma | |||||||
(unaudited) | ||||||||
Total operating revenue | $ | 194,685 | ||||||
Total operating expenses | 161,053 | |||||||
Operating income | 33,632 | |||||||
Net income | 25,713 | |||||||
On April 14, 2011, Jones Energy acquired certain oil and natural gas properties located in Oklahoma for a purchase price of $154.1 million. The acquisition included both producing and undeveloped properties. The purchase was financed with additional borrowings under the senior secured credit facility. The purchase price was allocated as follows: | ||||||||
(in thousands of dollars) | ||||||||
Oil and gas properties | $ | 154,225 | ||||||
Asset retirement obligations | (167 | ) | ||||||
| | | | | ||||
Total purchase price | $ | 154,058 | ||||||
| | | | | ||||
| | | | | ||||
This acquisition qualified as a business combination under ASC 805. The Company recorded a total fair value of $180.3 million ($154.1 million for producing properties and $26.2 million for undeveloped property). The total resulted in a bargain purchase gain of $26.2 million, which was recorded in the Consolidated Statement of Operations. The valuation to determine the fair value was principally based on the discounted cash flows of the both the producing and undeveloped properties, including projected drilling and equipment costs, recoverable reserves, production streams, future prices and operating costs, and risk-adjusted discount rates reflective of the current market. The recognized gain was the difference between the net fair value and the consideration paid the seller. | ||||||||
Management believes the bargain purchase gain resulted from the fact that the seller, who retained a 50% ownership interest in the undeveloped properties, benefitted from the Company's available liquidity that would enable accelerated development of the prospect. | ||||||||
The following income statement line items present the pro forma results as if these properties had been acquired on January 1, 2010: | ||||||||
Year Ended | ||||||||
December 31, | ||||||||
2011 | ||||||||
(in thousands of dollars) | Pro Forma | |||||||
(unaudited) | ||||||||
Total operating revenue | $ | 176,884 | ||||||
Total operating expenses | 150,197 | |||||||
Operating income | 26,687 | |||||||
Net income | 62,408 |
Fair_Value_Measurement
Fair Value Measurement | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Measurement | |||||||||||||||||
Fair Value Measurement | 4. Fair Value Measurement | ||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
The Company determines fair value amounts using available market information and appropriate valuation methodologies. 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. Considerable judgment is required in interpreting market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methods may have a material effect on the estimated fair value amounts. | |||||||||||||||||
The Company enters into a variety of derivative financial instruments, which may include over-the-counter instruments, such as natural gas, crude oil, and natural gas liquid contracts. The Company utilizes valuation techniques that maximize the use of observable inputs, where available. If listed market prices or quotes are not published, fair value is determined based upon a market quote, adjusted by other market-based or independently sourced market data, such as trading volume, historical commodity volatility, and counterparty-specific considerations. These adjustments may include amounts to reflect counterparty credit quality, the time value of money, and the liquidity of the market. | |||||||||||||||||
Counterparty credit valuation adjustments are necessary when the market price of an instrument is not indicative of the fair value as a result of the credit quality of the counterparty. Generally, market quotes assume that all counterparties have low default rates and equal credit quality. Therefore, an adjustment may be necessary to reflect the quality of a specific counterparty to determine the fair value of the instrument. The Company currently has all derivative positions placed and held by members of its lending group, which have strong credit quality. | |||||||||||||||||
Liquidity valuation adjustments are necessary when the Company is not able to observe a recent market price for financial instruments that trade in less active markets. Exchange traded contracts are valued at market value without making any additional valuation adjustments; therefore, no liquidity reserve is applied. | |||||||||||||||||
Valuation Hierarchy | |||||||||||||||||
Fair value measurements are grouped into a three-level valuation hierarchy. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument's categorization within the hierarchy is based upon the input that requires the highest degree of judgment in the determination of the instrument's fair value. The three levels are defined as follows: | |||||||||||||||||
Level 1 | Pricing inputs are based on published prices in active markets for identical assets or liabilities as of the reporting date. The Company does not classify any of its financial instruments in Level 1. | ||||||||||||||||
Level 2 | Pricing inputs include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, as of the reporting date. Contracts that are not traded on a recognized exchange or are tied to pricing transactions for which forward curve pricing is readily available are classified as Level 2 instruments. These include natural gas, crude oil and some natural gas liquids price swaps and natural gas basis swaps. | ||||||||||||||||
Level 3 | Pricing inputs include significant inputs that are generally unobservable from objective sources. The Company classifies natural gas liquid swaps and basis swaps for which future pricing is not readily available as Level 3. The Company obtains estimates from independent third parties for its open positions and subjects those to the credit adjustment criteria described above. | ||||||||||||||||
The financial instruments carried at fair value as of December 31, 2013 and 2012, by consolidated balance sheet caption and by valuation hierarchy, as described above are as follows: | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||
(in thousands of dollars) | (Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
Commodity Price Hedges | |||||||||||||||||
Current assets | $ | — | $ | 8,837 | $ | — | $ | 8,837 | |||||||||
Long-term assets | — | 25,967 | (569 | ) | 25,398 | ||||||||||||
Current liabilities | — | 10,188 | 476 | 10,664 | |||||||||||||
Long-term liabilities | — | — | 190 | 190 | |||||||||||||
December 31, 2012 | |||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||
(in thousands of dollars) | (Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
Commodity Price Hedges | |||||||||||||||||
Current assets | $ | — | $ | 17,648 | $ | — | $ | 17,648 | |||||||||
Long-term assets | — | 24,756 | 443 | 25,199 | |||||||||||||
Current liabilities | — | 2,992 | 1,043 | 4,035 | |||||||||||||
Long-term liabilities | — | 6,739 | 918 | 7,657 | |||||||||||||
The following table represents quantitative information about Level 3 inputs used in the fair value measurement of the Company's commodity derivative contracts as of December 31, 2013. | |||||||||||||||||
Quantitative Information About Level 3 Fair Value Measurements | |||||||||||||||||
Commodity Price Hedges | Fair Value | Valuation Technique | Unobservable Input | Range | |||||||||||||
Natural gas liquid swaps | $ | (1,235 | ) | Use a discounted cash flow approach using inputs including forward price statements from counterparties | Natural gas liquid futures | $9.24 - $83.06 per barrel | |||||||||||
Significant increases/decreases in natural gas liquid futures in isolation would result in a significantly lower/higher fair value measurement. The following table presents the changes in the Level 3 financial instruments for the years ended December 31, 2013 and 2012. Changes in fair value of Level 3 instruments represent changes in gains and losses for the periods that are reported in other income (expense). New contracts entered into during the year are generally entered into at no cost with changes in fair value from the date of agreement representing the entire fair value of the instrument. Transfers between levels are evaluated at the end of the reporting period. | |||||||||||||||||
(in thousands of dollars) | |||||||||||||||||
Balance at January 1, 2012, net | $ | (2,083 | ) | ||||||||||||||
Purchases | (2,352 | ) | |||||||||||||||
Settlements | — | ||||||||||||||||
Transfers to Level 2 | 2,370 | ||||||||||||||||
Transfers to Level 3 | 834 | ||||||||||||||||
Changes in fair value | (288 | ) | |||||||||||||||
| | | | | |||||||||||||
Balance at December 31, 2012, net | (1,519 | ) | |||||||||||||||
Purchases | (1,095 | ) | |||||||||||||||
Settlements | (210 | ) | |||||||||||||||
Transfers to Level 2 | (753 | ) | |||||||||||||||
Changes in fair value | 2,342 | ||||||||||||||||
| | | | | |||||||||||||
Balance at December 31, 2013, net | $ | (1,235 | ) | ||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Transfers from Level 3 to Level 2 represent all of the Company's natural gas basis swaps for which observable forward curve pricing information has become readily available. In 2012, transfers to Level 3 represented natural gas liquid swaps or basis swaps that were classified as Level 2 in 2011 but due to the unavailability of forward prices in 2012, were classified as Level 3 in 2012. The purchases represent natural gas liquid swaps that the Company entered into in 2013 that do not have observable forward curve pricing information. | |||||||||||||||||
Offsetting Assets and Liabilities | |||||||||||||||||
As of December 31, 2013, the counterparties to our commodity derivative contracts consisted of six financial institutions. All of our counterparties or their affiliates are also lenders under our credit facility. Therefore, we are not generally required to post additional collateral under our derivative agreements. | |||||||||||||||||
Our derivative agreements contain set-off provisions that state that in the event of default or early termination, any obligation owed by the defaulting party may be offset against any obligation owed to the defaulting party. | |||||||||||||||||
We adopted the guidance requiring disclosure of both gross and net information about financial instruments eligible for netting in the balance sheet under our derivative agreements. The following table presents information about our commodity derivative contracts that are netted on our Consolidated Balance Sheet as of December 31, 2013 and December 31, 2012: | |||||||||||||||||
(in thousands of dollars) | Gross Amounts | Gross | Net Amounts | Gross Amounts | Net Amount | ||||||||||||
of Recognized | Amounts | of Assets / | Not | ||||||||||||||
Assets / | Offset in the | Liabilities | Offset in the | ||||||||||||||
Liabilities | Balance | Presented in | Balance | ||||||||||||||
Sheet | the Balance | Sheet | |||||||||||||||
Sheet | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Commodity derivative contracts | |||||||||||||||||
Assets | $ | 38,071 | $ | (6,035 | ) | $ | 32,036 | $ | 2,199 | $ | 34,235 | ||||||
Liabilities | (14,347 | ) | 6,035 | (8,312 | ) | (2,542 | ) | (10,854 | ) | ||||||||
December 31, 2012 | |||||||||||||||||
Commodity derivative contracts | |||||||||||||||||
Assets | $ | 49,200 | $ | (7,831 | ) | $ | 41,369 | $ | 1,478 | $ | 42,847 | ||||||
Liabilities | (17,928 | ) | 7,831 | (10,097 | ) | (1,595 | ) | (11,692 | ) | ||||||||
Nonfinancial Assets and Liabilities | |||||||||||||||||
Assets and liabilities acquired in business combinations are recorded at their fair value on the date of acquisition. Significant Level 3 assumptions associated with the calculation of future cash flows used in the analysis of fair value of the oil and gas property acquired include the Company's estimate of future commodity prices, production costs, development expenditures, production, risk-adjusted discount rates, and other relevant data. Additionally, fair value is used to determine the inception value of the Company's AROs. The inputs used to determine such fair value are primarily based upon costs incurred historically for similar work, as well as estimates from independent third parties for costs that would be incurred to restore leased property to the contractually stipulated condition. Additions to the Company's ARO represent a nonrecurring Level 3 measurement. | |||||||||||||||||
The Company reviews its proved oil and gas properties for impairment purposes by comparing the expected undiscounted future cash flows at a producing field level to the unamortized capitalized cost of the asset. No significant impairment charges on the Company's proved properties were recorded during the year ended December 31, 2013. During 2012 and 2011, unamortized capitalized costs of certain properties were higher than their expected undiscounted future cash flows due primarily to downward reserve revisions, drilling of marginal or uneconomic wells, or development dry holes in certain producing fields. As a result, the Company recorded charges of $18.8 million and $19.8 million during the years ended December 31, 2012 and 2011, respectively. | |||||||||||||||||
Additionally, the Company reviews its unproved properties for indicators of impairment based on the Company's current exploration plans. In the fourth quarter of 2013, the Company recorded an impairment charge of $14.4 million related to the Southridge properties. 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 and associated reserves. The Company incurred no impairment charges related to its unproved properties in 2012. In 2011, the Company incurred a $12.2 million impairment charge related to its unproven properties in fields which were not expected to produce natural gas with a sufficiently high liquid content. With low natural gas prices during that period, the lack of natural gas liquids reduced the economic return of those fields and as a result, the Company had no intentions to continue development of those fields. | |||||||||||||||||
Impairment charges are recorded on the Consolidated Statement of Operations. Significant assumptions associated with the calculation of future cash flows used in the impairment analysis include the Company's estimate of future commodity prices, production costs, development expenditures, production, risk-adjusted discount rates, and other relevant data. As such, the fair value of oil and gas properties used in estimating impairment represents a nonrecurring Level 3 measurement. | |||||||||||||||||
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Derivative Instruments and Hedging Activities | ||||||||||||||
Derivative Instruments and Hedging Activities | 5. Derivative Instruments and Hedging Activities | |||||||||||||
The Company had various commodity derivatives in place to offset uncertain price fluctuations that could affect its future operations as of December 31, 2013 and 2012, as follows: | ||||||||||||||
Hedging Positions | ||||||||||||||
December 31, 2013 | ||||||||||||||
Low | High | Weighted | Final | |||||||||||
Average | Expiration | |||||||||||||
Oil swaps | Exercise price | $ | 81.7 | $ | 102.84 | $ | 89.03 | |||||||
Barrels per month | 29,000 | 161,613 | 96,149 | Dec-17 | ||||||||||
Natural gas swaps | Exercise price | $ | 3.88 | $ | 6.9 | $ | 4.26 | |||||||
mmbtu per month | 510,000 | 1,290,000 | 830,275 | Dec-17 | ||||||||||
Basis swaps | Contract differential | $ | (0.43 | ) | $ | (0.11 | ) | $ | (0.34 | ) | ||||
mmbtu per month | 320,000 | 690,000 | 467,037 | Mar-16 | ||||||||||
Natural gas liquids swaps | Exercise price | $ | 6.72 | $ | 95.24 | $ | 32.98 | |||||||
Barrels per month | 2,000 | 118,000 | 46,646 | Dec-17 | ||||||||||
December 31, 2012 | ||||||||||||||
Low | High | Weighted | Final | |||||||||||
Average | Expiration | |||||||||||||
Oil swaps | Exercise price | $ | 81 | $ | 104.45 | $ | 89.6 | |||||||
Barrels per month | 24,000 | 143,116 | 89,323 | Dec-17 | ||||||||||
Natural gas swaps | Exercise price | $ | 3.52 | $ | 6.9 | $ | 4.96 | |||||||
mmbtu per month | 430,000 | 1,110,000 | 767,053 | Dec-17 | ||||||||||
Basis swaps | Contract differential | $ | (0.65 | ) | $ | (0.03 | ) | $ | (0.31 | ) | ||||
mmbtu per month | 320,000 | 850,000 | 484,615 | Mar-16 | ||||||||||
Natural gas liquids swaps | Exercise price | $ | 6.72 | $ | 97.13 | $ | 33.81 | |||||||
Barrels per month | 2,000 | 144,973 | 55,616 | Dec-17 | ||||||||||
The Company recognized a net loss on derivative instruments of $2.6 million for the year ended December 31, 2013 and net gains of $16.7 million and $34.5 million for the years ended December 31, 2012 and 2011, respectively. | ||||||||||||||
LongTerm_Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2013 | |
Long-Term Debt | |
Long-Term Debt | 6. Long-Term Debt |
The Company entered into two credit agreements dated December 31, 2009, with Wells Fargo Bank N.A, the Senior Secured Revolving Credit Facility (the "Revolver") and the Second Lien Term Loan (the "Term Loan") which were subsequently amended on November 18, 2011, November 5, 2012, December 20, 2012, June 12, 2013, December 18, 2013 and January 29, 2014. In connection with the November 2012 amendment, the maturity date of the Revolver was extended to November 5, 2017 and the maturity date of the Term loan was extended to May 5, 2018. In connection with the June 2013 amendment, the borrowing base on the Revolver was increased to $500.0 million and subsequently increased to $575.0 million on December 18, 2013 in conjunction with the Sabine acquisition. The Company's oil and gas properties are pledged as collateral against these credit agreements. | |
Terms of the Revolver require the Company to pay interest on the loan on the earlier of the London InterBank Offered Rate (LIBOR) tranche maturity date or three months, with the entire principal and interest due on the loan maturity date. Borrowings may be drawn on the principal amount up to the maximum available credit amount. Interest on the Revolver is calculated at a base rate (LIBOR or prime), plus a margin of 0.50% to 2.50% based on the actual amount borrowed compared to the borrowing base amount and the base rate selected. For the year ended December 31, 2013, the average interest rate under the Revolver was 3.01% on an average outstanding balance of $384.9 million. For the year ended December 31, 2012, the average interest rate under the Revolver was 3.30% on an average outstanding balance of $306.8 million. | |
Terms of the Term Loan require the Company to pay interest on the loan every three months with the principal and interest due on the loan maturity date of May 5, 2018. Interest on the Term Loan is calculated at a base rate (LIBOR, prime, or federal funds), plus a margin of 6% to 7% based on the base rate selected. As of December 31, 2013, the average interest rate was 9.19% on an average outstanding balance of $160.0 million. As of December 31, 2012, the average interest rate was 9.16% on an average outstanding balance of $121.3 million. | |
Total interest and commitment fees under the two facilities were $27.0 million, $21.2 million and $18.2 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |
In connection with the IPO, the Company used the net proceeds to repay outstanding borrowings under the Revolver of $167.0 million. | |
The Revolver and Term Loans are categorized as Level 3 in the valuation hierarchy as the debt is not publicly traded and no observable market exists to determine the fair value; however, the carrying value of the Revolver and Term Loans approximate fair value, as they are subject to short-term floating interest rates that approximate the rates available to the Company for those periods. | |
The Revolver and Term Loans include covenants that require, among other things, restrictions on asset sales, distributions to members, and additional indebtedness, and the maintenance of certain financial ratios, including leverage, proven reserves to debt, and current ratio. The Company was in compliance with these covenants at December 31, 2013. | |
Stockbased_Compensation
Stock-based Compensation | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Stock-based Compensation | ||||||||
Stock-based Compensation | 7. Stock-based Compensation | |||||||
JEH granted membership-interest awards in JEH to members of senior management ("management units") under a management incentive plan prior to the IPO. These awards had various vesting schedules, and a portion of the management units vested in a lump sum at the IPO date. Both the vested and unvested management units were converted into JEH Units and shares of Class B common stock at the IPO date. As of December 31, 2013, there were 457,150 unvested JEH Units and shares of Class B common stock. The Units/shares will become convertible into a like number of shares of Class A common stock upon vesting. The following table summarizes information related to the Units/shares held by management: | ||||||||
JEH Units | Weighted Average | |||||||
Grant Date Fair Value | ||||||||
per Share | ||||||||
Unvested at January 1, 2013 | 710,767 | $ | 3.62 | |||||
Granted | 911,654 | $ | 15 | |||||
Forfeited | (167,239 | ) | $ | 3.62 | ||||
Vested | (998,032 | ) | $ | 9.96 | ||||
| | | | | | | | |
Unvested at December 31, 2013 | 457,150 | $ | 12.46 | |||||
| | | | | | | | |
| | | | | | | | |
Stock compensation expense associated with the management units for the years ended December 31, 2013, 2012 and 2011 was $10.7 million, $0.6 million and $1.1 million, respectively, and is included in general and administrative expenses on the Company's Consolidated Statement of Operations. | ||||||||
On September 4, 2013, the Company granted restricted stock awards to non-employee members of the Board of Directors. Each of the four directors was awarded 6,645 restricted shares of Class A common stock, contingent on the director serving as a director of the Company for a one-year service period from the date of grant. The fair value of the awards was based on the value of the Company's Class A common stock on the date of grant. The total value of the awards to the directors is as follows: | ||||||||
Restricted Stock Awards | Weighted Average | |||||||
Grant Date Fair Value | ||||||||
per Share | ||||||||
Unvested at January 1, 2013 | — | — | ||||||
Granted | 27 | $ | 15.05 | |||||
Forfeited | — | — | ||||||
Vested | — | — | ||||||
| | | | | | | | |
Unvested at December 31, 2013 | 27 | $ | 15.05 | |||||
| | | | | | | | |
| | | | | | | | |
Stock compensation expense associated with the Board of Directors awards for the year ended December 31, 2013 was $0.1 million and is included in general and administrative expenses on the Company's Consolidated Statement of Operations. | ||||||||
Earnings_per_Share
Earnings per Share | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Earnings per Share | |||||
Earnings per Share | 8. Earnings per Share | ||||
Basic earnings per share ("EPS") is computed by dividing net income (loss) attributable to controlling interests by the weighted-average number of shares of Class A common stock outstanding during the period. Class B common stock is not included in the calculation of earnings per share because they are not participating securities and have no economic interest in the Company. Diluted earnings per share takes into account the dilutive effect of potential common stock that could be issued by the Company in conjunction with stock awards that have been granted to directors and employees. On September 4, 2013 (the "grant date"), the Company granted to its directors restricted shares of Class A common stock, which vest on the first anniversary of the grant date. In accordance with ASC 260, Earnings Per Share, awards of nonvested shares shall be considered outstanding as of the grant date for purposes of computing diluted EPS even though their exercise is contingent upon vesting. For the year ended December 31, 2013, the directors' restricted shares of Class A common stock were excluded from the diluted calculation, as their inclusion would have been anti-dilutive as the Company was in a net loss position. The following is a calculation of the basic and diluted weighted-average number of shares of Class A common stock outstanding and EPS for the year ended December 31, 2013. Net income (loss) and the weighted average number of shares of Class A common stock outstanding is based on the actual days in which the shares were outstanding for the period from July 29, 2013, the closing date of the IPO, to December 31, 2013. | |||||
(in thousands, except per share data) | December 31, 2013 | ||||
Income (numerator): | |||||
Net income (loss) attributable to controlling interests | $ | (2,186 | ) | ||
Weighted-average shares (denominator): | |||||
Weighted-average number of shares of Class A common stock—basic and diluted | 12,500 | ||||
| | | | | |
Earnings (loss) per share: | |||||
Basic and diluted | $ | (0.17 | ) | ||
| | | | | |
| | | | | |
Anti-dilutive restricted shares of Class A common stock | 27 |
Monarch_Investment
Monarch Investment | 12 Months Ended |
Dec. 31, 2013 | |
Monarch Investment | |
Monarch Investment | 9. Monarch Investment |
On May 7, 2013, the Company entered into a marketing agreement with Monarch Natural Gas, LLC ("Monarch"), a company related through common ownership, for the sale to Monarch of natural gas produced from certain properties. In connection with that agreement, Monarch issued to the Company equity interests in its parent, Monarch Natural Gas Holdings, LLC, having an estimated fair value of $15.0 million. Contemporaneous with the execution of the marketing agreement and the issuance of the equity interests, the Company distributed 67% or $10 million of the Monarch equity interests to the Company's owners pro rata based on equity contributions and approximately 16% of the interests to a member of management. The remaining approximately 17% of the equity interests were reserved for distribution to management through an incentive plan. The Company recognized $0.3 million of compensation expense during the year ended December 31, 2013 in connection with the incentive plan. In addition, the Company recorded deferred revenue of $15.0 million which is being amortized on an estimated units-of-production basis commencing in September 2013, the first month of production sales to Monarch. The Company amortized $0.5 million of the deferred revenue balance during the year ended December 31, 2013 and is recorded in other revenues on the Company's Consolidated Statement of Operations. | |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | |||||
Commitments and Contingencies | 10. Commitments and Contingencies | ||||
Lease obligations | |||||
The Company leases approximately 31,000 square feet of office space in Austin, TX under an operating lease arrangement. Future minimum payments for noncancellable operating leases extending beyond one year at December 31, 2013 are as follows: | |||||
(in thousands of dollars) | |||||
Years Ending December 31, | |||||
2014 | $ | 586 | |||
2015 | 482 | ||||
2016 | 458 | ||||
2017 | 147 | ||||
Thereafter | — | ||||
| | | | | |
$ | 1,673 | ||||
| | | | | |
| | | | | |
Rent expense under operating leases was $0.8 million, $0.8 million and $0.7 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||
Litigation | |||||
The Company is subject to legal proceedings and claims that arise in the ordinary course of its business. The Company believes that the final disposition of such current matters will not have a material adverse effect on its financial position, results of operations, or liquidity. | |||||
Benefit_Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2013 | |
Benefit Plans | |
Benefit Plans | 11. Benefit Plans |
The Company established a 401(k) tax-deferred savings plan (the "Plan") for the benefit of employees. The Plan is a defined contribution plan and the Company may match a portion of employee contributions. For the years ended December 31, 2013 and 2012, $0.3 million and $0.2 million were contributed, respectively, to the Plan. | |
In 2013, the Company established a 409A tax-deferred savings plan for the benefit of key employees. This plan is a defined contribution plan, and the Company may match a portion of employee contributions. For the year ended December 31, 2013, the Company made a negligible contribution to this plan. | |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes | |||||||||||
Income Taxes | 12. Income Taxes | ||||||||||
Following its IPO, the Company began recording a federal and state income tax liability associated with its status as a corporation. Prior to the IPO, the Company only recorded a provision for Texas franchise tax as the Company's taxable income or loss was includable in the income tax returns of the individual partners and members. | |||||||||||
The Company will recognize a tax liability on its share of pre-tax book income, exclusive of the non-controlling interest. JEH is not subject to income tax at the federal level and only recognizes Texas franchise tax expense. The following table summarizes the tax provision for the years ended December 31, 2013, 2012 and 2011: | |||||||||||
Year Ended December 31, | |||||||||||
(in thousands of dollars) | 2013 | 2012 | 2011 | ||||||||
Current tax expense | |||||||||||
Federal | $ | 85 | $ | — | $ | — | |||||
State | — | — | — | ||||||||
| | | | | | | | | | | |
Total current expense | 85 | — | — | ||||||||
| | | | | | | | | | | |
Deferred tax expense (benefit) | |||||||||||
Federal | (1,260 | ) | — | — | |||||||
State | 1,104 | 473 | 173 | ||||||||
| | | | | | | | | | | |
Total deferred expense (benefit) | (156 | ) | 473 | 173 | |||||||
| | | | | | | | | | | |
Total tax expense (benefit) | (71 | ) | 473 | 173 | |||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Tax benefit attributable to controlling interests | (1,223 | ) | — | — | |||||||
Tax expense attributable to non-controlling interests | 1,152 | 473 | 173 | ||||||||
| | | | | | | | | | | |
Total tax expense (benefit) | $ | (71 | ) | $ | 473 | $ | 173 | ||||
| | | | | | | | | | | |
| | | | | | | | | | | |
For the years ended December 31, 2012 and 2011, the reported taxes relate solely to the Texas franchise tax liability of JEH. | |||||||||||
A reconciliation of the Company's provision for income taxes as reported and the amount computed by multiplying income before taxes, less non-controlling interest, by the U.S. federal statutory rate of 35%: | |||||||||||
(in thousands of dollars) | December 31, 2013 | ||||||||||
Provision calculated at federal statutory income tax rate: | |||||||||||
Net income before taxes | $ | 22,334 | |||||||||
Statutory rate | 35 | % | |||||||||
| | | | | |||||||
Income tax expense computed at statutory rate | 7,817 | ||||||||||
Less: Non-controlling interests | (9,009 | ) | |||||||||
| | | | | |||||||
Income tax benefit attributable to controlling interests | (1,192 | ) | |||||||||
State and local income taxes, net of federal benefit | (49 | ) | |||||||||
Other | 18 | ||||||||||
| | | | | |||||||
Tax benefit attributable to controlling interests | (1,223 | ) | |||||||||
Tax expense attributable to non-controlling interests | 1,152 | ||||||||||
| | | | | |||||||
Total income tax benefit | $ | (71 | ) | ||||||||
| | | | | |||||||
| | | | | |||||||
For the years ended December 31, 2012 and 2011, the calculation is not applicable as the Company was not subject to federal income taxes prior to the IPO. | |||||||||||
The Company is subject to federal, state and local income and franchise taxes. As such, deferred income taxes result from temporary differences between the carrying amounts of assets and liabilities of the Company for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are measured using enacted tax rates in effect in the years in which those temporary differences are expected to reverse. | |||||||||||
Significant components of the Company's deferred tax assets and deferred tax liabilities consisted of the following: | |||||||||||
As of December 31, | |||||||||||
(in thousands of dollars) | 2013 | 2012 | |||||||||
Deferred tax assets | |||||||||||
Investment in consolidated subsidiary JEH | $ | 526 | $ | — | |||||||
Net operating loss | 649 | — | |||||||||
Alternative minimum tax credits | 86 | — | |||||||||
State deferred tax asset | 52 | — | |||||||||
| | | | | | | | ||||
Total deferred tax assets | 1,313 | — | |||||||||
| | | | | | | | ||||
Deferred tax liabilities | |||||||||||
State deferred tax liability | 3,093 | 1,936 | |||||||||
| | | | | | | | ||||
Total deferred tax liabilities | 3,093 | 1,936 | |||||||||
| | | | | | | | ||||
Net deferred tax assets (liabilities) | (1,780 | ) | (1,936 | ) | |||||||
Valuation allowance | — | — | |||||||||
| | | | | | | | ||||
Net deferred tax assets (liabilities) | $ | (1,780 | ) | $ | (1,936 | ) | |||||
| | | | | | | | ||||
| | | | | | | | ||||
The Company has a federal net operating loss carry-forward totaling $1.8 million and state net operating loss carry-forward of $0.4 million, both expiring in 2033. No valuation allowance has been recorded as management believes that there is sufficient future taxable income to fully utilize its deferred tax assets. This future taxable income will arise from reversing temporary differences due to the excess of the book carrying value of oil and gas properties over their corresponding tax basis. The Company may elect to capitalize intangible drilling costs, rather than expensing these costs, in order to prevent an operating loss carry-forward from expiring unused. | |||||||||||
Separate federal and state income tax returns are filed for Jones Energy, Inc. and Jones Energy Holdings, LLC. JEH's Texas franchise tax returns are subject to audit for 2009, 2010, 2011, and 2012. The tax years 2010 through 2013 remain open to examination by the major taxing jurisdictions to which the Company is subject. The Company is not currently under audit in any other major taxing jurisdiction. | |||||||||||
Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement methodology for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As of December 31, 2013 and December 31, 2012 there was no material liability or expense for the periods then ended recorded for payments of interest and penalties associated with uncertain tax positions or material unrecognized tax positions and the Company's unrecognized tax benefits were not material. | |||||||||||
Subsidiary_Guarantors
Subsidiary Guarantors | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Subsidiary Guarantors | ||||||||||||||||||||
Subsidiary Guarantors | 13. Subsidiary Guarantors | |||||||||||||||||||
On April 1, 2014, JEH and its wholly-owned subsidiary, Jones Energy Finance Corp. (the “Issuers”), sold $500.0 million in aggregate principal amount of the Issuers’ 6.75% Senior Notes due 2022 (the “2022 Notes”). | ||||||||||||||||||||
The 2022 Notes are guaranteed on a senior unsecured basis by the Company and by all of JEH’s current subsidiaries (except Jones Energy Finance Corp. and two immaterial subsidiaries) and certain future subsidiaries, including any future subsidiaries that guarantee any indebtedness under the Company’s Revolver. Each subsidiary guarantor is 100% owned by JEH, and all guarantees are full, unconditional, and joint and several with all other subsidiary guarantees and the parent guarantee. Any subsidiaries of JEH other than the subsidiary guarantors and Jones Energy Finance Corp. are minor. | ||||||||||||||||||||
The Company is a holding company and has no independent assets or operations of its own. The Company is the sole managing member of JEH and is responsible for all operational, management and administrative decisions related to JEH’s business. In accordance with JEH’s limited liability company agreement, the Company may not be removed as the sole managing member of JEH. | ||||||||||||||||||||
The Company currently holds approximately 25.3% of the economic interest in JEH, with the remaining 74.7% economic interest held by a group of investors that owned interests in JEH prior to the Company’s IPO (the “Existing Owners”). The Existing Owners have no voting rights with respect to their economic interest in JEH. | ||||||||||||||||||||
The Company has two classes of common stock, Class A common stock, which was sold to investors in the IPO, and Class B common stock. Pursuant to the Company’s certificate of incorporation, each share of Class A common stock is entitled to one vote per share, and the shares of Class A common stock are entitled to 100% of the economic interests in the Company. Each share of Class B common stock has no economic rights in the Company, but entitles its holder to one vote on all matters to be voted on by the Company’s stockholders generally. | ||||||||||||||||||||
In connection with a reorganization that occurred immediately prior to the IPO, each Existing Owner was issued a number of shares of Class B common stock that is equal to the number of JEH Units that such Existing Owner holds. Holders of the Company’s Class A common stock and Class B common stock generally vote together as a single class on all matters presented to the Company’s stockholders for their vote or approval. Accordingly, the Existing Owners collectively have a number of votes in the Company equal to the aggregate number of JEH Units that they hold. | ||||||||||||||||||||
The Existing Owners have the right, pursuant to the terms of an Exchange Agreement by and among the Company, JEH and each of the Existing Owners, to exchange their JEH Units (together with a corresponding number of shares of Class B common stock) for shares of Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications and other similar transactions. As a result, the Company expects that over time the Company will have an increasing economic interest in JEH as Class B common stock and JEH Units are exchanged for Class A common stock. Moreover, any transfers of JEH Units outside of the Exchange Agreement (other than permitted transfers to affiliates) must be approved by the Company. The Company intends to retain full voting and management control over JEH. | ||||||||||||||||||||
Jones Energy, Inc. | ||||||||||||||||||||
Condensed Consolidating Statements of Operations | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
(in thousands of dollars) | JEI(Parent) | Issuers | Guarantor | Non-Guarantor | Eliminations | Consolidated | ||||||||||||||
Subsidiaries | Subsidiaries | |||||||||||||||||||
Operating revenues | ||||||||||||||||||||
Oil and gas sales | $ | — | $ | — | $ | 258,063 | $ | — | $ | — | $ | 258,063 | ||||||||
Other revenues | — | 469 | 637 | — | — | 1,106 | ||||||||||||||
Total operating revenues | — | 469 | 258,700 | — | — | 259,169 | ||||||||||||||
Operating costs and expenses | ||||||||||||||||||||
Lease operating | — | — | 27,781 | — | — | 27,781 | ||||||||||||||
Production taxes | — | — | 12,865 | — | — | 12,865 | ||||||||||||||
Exploration | — | — | 1,710 | — | — | 1,710 | ||||||||||||||
Depletion, depreciation and amortization | — | — | 114,046 | 90 | — | 114,136 | ||||||||||||||
Impairment of oil and gas properties | — | — | 14,415 | — | — | 14,415 | ||||||||||||||
Accretion of discount | — | — | 608 | — | — | 608 | ||||||||||||||
General and administrative (including non-cash compensation expense) | — | 4,154 | 27,490 | 258 | — | 31,902 | ||||||||||||||
Total operating expenses | — | 4,154 | 198,915 | 348 | — | 203,417 | ||||||||||||||
Operating income | — | (3,685 | ) | 59,785 | (348 | ) | — | 55,752 | ||||||||||||
Other income (expense) | ||||||||||||||||||||
Interest expense | — | (29,653 | ) | (1,121 | ) | — | — | (30,774 | ) | |||||||||||
Net gain (loss) on commodity derivatives | — | (2,566 | ) | — | — | — | (2,566 | ) | ||||||||||||
Gain (loss) on sales of assets | — | — | 41 | (119 | ) | — | (78 | ) | ||||||||||||
Other income (expense), net | — | (32,219 | ) | (1,080 | ) | (119 | ) | — | (33,418 | ) | ||||||||||
Income (loss) before income tax | — | (35,904 | ) | 58,705 | (467 | ) | — | 22,334 | ||||||||||||
Equity interest in Income | (3,400 | ) | — | — | — | 3,400 | — | |||||||||||||
Income tax provision (benefit) | ||||||||||||||||||||
Current | 85 | — | — | — | — | 85 | ||||||||||||||
Deferred | (1,299 | ) | 1,143 | — | — | — | (156 | ) | ||||||||||||
Total income tax provision (benefit) | (1,214 | ) | 1,143 | — | — | — | (71 | ) | ||||||||||||
Net income (loss) | $ | (2,186 | ) | $ | (37,047 | ) | $ | 58,705 | $ | (467 | ) | $ | 3,400 | $ | 22,405 | |||||
Net income (loss) attributable to non-controlling interests | — | — | — | — | $ | 24,591 | $ | 24,591 | ||||||||||||
Net income (loss) attributable to controlling interests | $ | (2,186 | ) | — | — | — | — | $ | (2,186 | ) | ||||||||||
Jones Energy, Inc. | ||||||||||||||||||||
Condensed Consolidating Statements of Operations | ||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
(in thousands of dollars) | JEI(Parent) | Issuers | Guarantor | Non-Guarantor | Eliminations | Consolidated | ||||||||||||||
Subsidiaries | Subsidiaries | |||||||||||||||||||
Operating revenues | ||||||||||||||||||||
Oil and gas sales | $ | — | $ | — | $ | 148,967 | $ | — | $ | — | $ | 148,967 | ||||||||
Other revenues | — | — | 847 | — | — | 847 | ||||||||||||||
Total operating revenues | — | — | 149,814 | — | — | 149,814 | ||||||||||||||
Operating costs and expenses | ||||||||||||||||||||
Lease operating | — | — | 23,097 | — | — | 23,097 | ||||||||||||||
Production taxes | — | — | 5,583 | — | — | 5,583 | ||||||||||||||
Exploration | — | — | 356 | — | — | 356 | ||||||||||||||
Depletion, depreciation and amortization | — | — | 80,554 | 155 | — | 80,709 | ||||||||||||||
Impairment of oil and gas properties | — | — | 18,821 | — | — | 18,821 | ||||||||||||||
Accretion of discount | — | — | 533 | — | — | 533 | ||||||||||||||
General and administrative (including non-cash compensation expense) | — | 2,589 | 12,562 | 724 | — | 15,875 | ||||||||||||||
Total operating expenses | — | 2,589 | 141,506 | 879 | — | 144,974 | ||||||||||||||
Operating income | — | (2,589 | ) | 8,308 | (879 | ) | — | 4,840 | ||||||||||||
Other income (expense) | ||||||||||||||||||||
Interest expense | — | (24,679 | ) | (613 | ) | — | — | (25,292 | ) | |||||||||||
Net gain (loss) on commodity derivatives | — | 16,684 | — | — | — | 16,684 | ||||||||||||||
Gain (loss) on sales of assets | — | — | 1,162 | — | — | 1,162 | ||||||||||||||
Other income (expense), net | — | (7,995 | ) | 549 | — | — | (7,446 | ) | ||||||||||||
Income (loss) before income tax | — | (10,584 | ) | 8,857 | (879 | ) | — | (2,606 | ) | |||||||||||
Income tax provision (benefit) | ||||||||||||||||||||
Current | — | — | — | — | — | — | ||||||||||||||
Deferred | — | 473 | — | — | — | 473 | ||||||||||||||
Total income tax provision (benefit) | — | 473 | — | — | — | 473 | ||||||||||||||
Net income (loss) | $ | — | $ | (11,057 | ) | $ | 8,857 | $ | (879 | ) | $ | — | $ | (3,079 | ) | |||||
Jones Energy, Inc | ||||||||||||||||||||
Condensed Consolidating Balance Sheet | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
(in thousands of dollars) | JEI(Parent) | Issuers | Guarantor | Non-Guarantor | Eliminations | Consolidated | ||||||||||||||
Subsidiaries | Subsidiaries | |||||||||||||||||||
Assets | ||||||||||||||||||||
Current assets | ||||||||||||||||||||
Cash | $ | 100 | $ | 6,000 | $ | 17,650 | $ | 70 | $ | — | $ | 23,820 | ||||||||
Restricted Cash | — | — | 45 | — | — | 45 | ||||||||||||||
Accounts receivable, net | ||||||||||||||||||||
Oil and gas sales | — | — | 51,233 | — | — | 51,233 | ||||||||||||||
Joint interest owners | — | — | 42,481 | — | — | 42,481 | ||||||||||||||
Other | — | — | 1,459 | — | — | 1,459 | ||||||||||||||
Commodity derivative assets | — | 8,837 | — | — | — | 8,837 | ||||||||||||||
Other current assets | — | 387 | 2,005 | — | — | 2,392 | ||||||||||||||
Deferred tax assets | — | 12 | — | — | — | 12 | ||||||||||||||
Intercompany receivable | 638 | 1,051,389 | — | (1,052,027 | ) | — | ||||||||||||||
Total current assets | 738 | 1,066,625 | 114,873 | 70 | (1,052,027 | ) | 130,279 | |||||||||||||
Oil and gas properties, net, at cost under the successful efforts method | — | — | 1,312,551 | — | — | 1,312,551 | ||||||||||||||
Other property, plant and equipment, net | — | — | 2,557 | 887 | — | 3,444 | ||||||||||||||
Commodity derivative assets | — | 25,398 | — | — | — | 25,398 | ||||||||||||||
Other assets | — | 14,072 | 934 | — | — | 15,006 | ||||||||||||||
Investment in Subsidiaries | 169,081 | — | — | — | (169,081 | ) | — | |||||||||||||
Deferred tax assets | 1,301 | — | — | — | — | 1,301 | ||||||||||||||
Total assets | $ | 171,120 | $ | 1,106,095 | $ | 1,430,915 | $ | 957 | $ | (1,221,108 | ) | $ | 1,487,979 | |||||||
Liabilities and Stockholders’ / Members’ Equity | ||||||||||||||||||||
Current liabilities | ||||||||||||||||||||
Trade accounts payable | $ | — | $ | 230 | $ | 89,200 | $ | — | $ | — | $ | 89,430 | ||||||||
Oil and gas sales payable | — | — | 66,179 | — | — | 66,179 | ||||||||||||||
Accrued liabilities | 87 | 1,642 | 9,076 | — | — | 10,805 | ||||||||||||||
Commodity derivative liabilities | — | 10,664 | — | — | — | 10,664 | ||||||||||||||
Deferred tax liabilities | — | — | — | — | — | — | ||||||||||||||
Asset retirement obligations | — | — | 2,590 | — | — | 2,590 | ||||||||||||||
Intercompany payable | — | 1,051,935 | 2,279 | (1,054,214 | ) | — | ||||||||||||||
Total current liabilities | 87 | 12,536 | 1,218,980 | 2,279 | (1,054,214 | ) | 179,668 | |||||||||||||
Long-term debt | — | 658,000 | — | — | — | 658,000 | ||||||||||||||
Deferred revenue | — | 14,531 | — | — | — | 14,531 | ||||||||||||||
Commodity derivative liabilities | — | 190 | — | — | — | 190 | ||||||||||||||
Asset retirement obligations | — | — | 8,373 | — | — | 8,373 | ||||||||||||||
Deferred tax liabilities | — | 3,093 | — | — | — | 3,093 | ||||||||||||||
Total liabilities | 87 | 688,350 | 1,227,353 | 2,279 | (1,054,214 | ) | 863,855 | |||||||||||||
Commitments and contingencies (Note 10) | ||||||||||||||||||||
Stockholders’ / members’ equity | ||||||||||||||||||||
Members’ equity | — | 417,745 | 203,562 | (1,322 | ) | (619,985 | ) | — | ||||||||||||
Class A common stock, $0.001 par value; 12,526,580 shares issued and outstanding | 13 | — | — | — | — | 13 | ||||||||||||||
Class B common stock, $0.001 par value; 36,836,333 shares issued and outstanding | 37 | — | — | — | — | 37 | ||||||||||||||
Additional paid-in-capital | 173,169 | — | — | — | — | 173,169 | ||||||||||||||
Retained earnings (deficit) | (2,186 | ) | — | — | — | — | (2,186 | ) | ||||||||||||
Stockholders’ / members’ equity | 171,033 | 417,745 | 203,562 | (1,322 | ) | (619,985 | ) | 171,033 | ||||||||||||
Non-controlling interest | — | — | — | — | 453,091 | 453,091 | ||||||||||||||
Total stockholders’ / members’ equity | 171,033 | 417,745 | 203,562 | (1,322 | ) | (166,894 | ) | 624,124 | ||||||||||||
Total liabilities and stockholders’ / members’ equity | $ | 171,120 | $ | 1,106,095 | $ | 1,430,915 | $ | 957 | $ | (1,221,108 | ) | $ | 1,487,979 | |||||||
Jones Energy, Inc | ||||||||||||||||||||
Condensed Consolidating Balance Sheet | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
(in thousands of dollars) | JEI(Parent) | Issuers | Guarantor | Non-Guarantor | Eliminations | Consolidated | ||||||||||||||
Subsidiaries | Subsidiaries | |||||||||||||||||||
Assets | ||||||||||||||||||||
Current assets | ||||||||||||||||||||
Cash | $ | — | $ | 5,056 | $ | 18,600 | $ | 70 | $ | — | $ | 23,726 | ||||||||
Restricted Cash | — | — | — | — | — | — | ||||||||||||||
Accounts receivable, net | ||||||||||||||||||||
Oil and gas sales | — | — | 29,684 | — | — | 29,684 | ||||||||||||||
Joint interest owners | — | — | 21,876 | — | — | 21,876 | ||||||||||||||
Other | — | 1,719 | 2,871 | — | — | 4,590 | ||||||||||||||
Commodity derivative assets | — | 17,648 | — | — | — | 17,648 | ||||||||||||||
Other current assets | — | — | 1,088 | — | — | 1,088 | ||||||||||||||
Deferred tax assets | — | — | — | — | — | — | ||||||||||||||
Intercompany receivable | — | 845,184 | — | — | (845,184 | ) | — | |||||||||||||
Total current assets | — | 869,607 | 74,119 | 70 | (845,184 | ) | 98,612 | |||||||||||||
Oil and gas properties, net, at cost | ||||||||||||||||||||
under the successful efforts method | — | — | 1,007,344 | — | — | 1,007,344 | ||||||||||||||
Other property, plant and equipment, net | — | — | 2,568 | 830 | — | 3,398 | ||||||||||||||
Commodity derivative assets | — | 25,199 | — | — | — | 25,199 | ||||||||||||||
Other assets | — | 13,446 | 2,687 | — | — | 16,133 | ||||||||||||||
Deferred tax assets | — | — | — | — | — | — | ||||||||||||||
Total assets | $ | — | $ | 908,252 | $ | 1,086,718 | $ | 900 | $ | (845,184 | ) | $ | 1,150,686 | |||||||
Liabilities and Stockholders’ / Members’ Equity | ||||||||||||||||||||
Current liabilities | ||||||||||||||||||||
Trade accounts payable | $ | — | $ | 116 | $ | 37,920 | $ | — | $ | — | $ | 38,036 | ||||||||
Oil and gas sales payable | — | — | 45,860 | — | — | 45,860 | ||||||||||||||
Accrued liabilities | — | 110 | 5,145 | — | — | 5,255 | ||||||||||||||
Commodity derivative liabilities | — | 4,035 | — | — | — | 4,035 | ||||||||||||||
Deferred tax liabilities | — | 61 | — | — | — | 61 | ||||||||||||||
Asset retirement obligations | — | — | 174 | — | — | 174 | ||||||||||||||
Intercompany payable | — | — | 843,430 | 1,754 | (845,184 | ) | — | |||||||||||||
Total current liabilities | — | 4,322 | 932,529 | 1,754 | (845,184 | ) | 93,421 | |||||||||||||
Long-term debt | — | 610,000 | — | — | — | 610,000 | ||||||||||||||
Deferred revenue | — | — | — | — | — | — | ||||||||||||||
Commodity derivative liabilities | — | 7,657 | — | — | — | 7,657 | ||||||||||||||
Asset retirement obligations | — | — | 9,332 | — | — | 9,332 | ||||||||||||||
Deferred tax liabilities | — | 1,876 | — | — | — | 1,876 | ||||||||||||||
Total liabilities | — | 623,855 | 941,861 | 1,754 | (845,184 | ) | 722,286 | |||||||||||||
Commitments and contingencies (Note 10) | ||||||||||||||||||||
Stockholders’ / members’ equity | ||||||||||||||||||||
Members’ equity | — | 284,397 | 144,857 | (854 | ) | — | 428,400 | |||||||||||||
Stockholders’ / members’ equity | — | 284,397 | 144,857 | (854 | ) | — | 428,400 | |||||||||||||
Total stockholders’ / members’ equity | — | 284,397 | 144,857 | (854 | ) | — | 428,400 | |||||||||||||
Total liabilities and stockholders’ / members’ equity | $ | — | $ | 908,252 | $ | 1,086,718 | $ | 900 | $ | (845,184 | ) | $ | 1,150,686 | |||||||
Jones Energy, Inc. | ||||||||||||||||||||
Consolidated Statements of Cash Flows | ||||||||||||||||||||
Years Ended December 31, 2013 | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
(in thousands of dollars) | JEI(Parent) | Issuers | Guarantor | Non-Guarantor | Eliminations | Consolidated | ||||||||||||||
Subsidiaries | Subsidiaries | |||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income (loss) | $ | (2,186 | ) | $ | (37,047 | ) | $ | 58,705 | $ | (467 | ) | $ | 3,400 | $ | 22,405 | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | 2,286 | (189,393 | ) | 331,265 | 733 | (3,400 | ) | 141,491 | ||||||||||||
Net cash (used in) / provided by operations | 100 | (226,440 | ) | 389,970 | 266 | — | 163,896 | |||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Investment in subsidiary | (172,481 | ) | 172,481 | — | ||||||||||||||||
Additions to oil and gas properties | — | — | (197,618 | ) | (197,618 | ) | ||||||||||||||
Acquisition of properties | — | — | (193,496 | ) | (193,496 | ) | ||||||||||||||
Proceeds from sales of assets | — | — | 963 | 644 | 1,607 | |||||||||||||||
Acquisition of other property, plant and equipment | — | — | (724 | ) | (910 | ) | (1,634 | ) | ||||||||||||
Current period settlements of matured derivative contracts | — | 7,586 | — | — | 7,586 | |||||||||||||||
Change in restricted cash | — | — | (45 | ) | — | (45 | ) | |||||||||||||
Net cash (used in) / provided by investing | (172,481 | ) | 7,586 | (390,920 | ) | (266 | ) | 172,481 | (383,600 | ) | ||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Proceeds from investment by JEI | 172,481 | (172,481 | ) | — | ||||||||||||||||
Proceeds from issuance of long-term debt | — | 220,000 | — | — | 220,000 | |||||||||||||||
Repayment under long-term debt | — | (172,000 | ) | — | — | (172,000 | ) | |||||||||||||
Payment of debt issuance costs | — | (683 | ) | — | — | (683 | ) | |||||||||||||
Proceeds from sale of common stock, net of expenses of $15.1 million | 172,481 | — | — | — | 172,481 | |||||||||||||||
Net cash (used in) provided by financing | 172,481 | 219,798 | — | — | (172,481 | ) | 219,798 | |||||||||||||
Net increase (decrease) in cash | 100 | 944 | (950 | ) | — | — | 94 | |||||||||||||
Cash | ||||||||||||||||||||
Beginning of period | — | 5,056 | 18,600 | 70 | — | 23,726 | ||||||||||||||
End of period | $ | 100 | $ | 6,000 | $ | 17,650 | $ | 70 | — | $ | 23,820 | |||||||||
Jones Energy, Inc. | ||||||||||||||||||||
Consolidated Statements of Cash Flows | ||||||||||||||||||||
Years Ended December 31, 2012 | ||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
(in thousands of dollars) | JEI(Parent) | Issuers | Guarantor | Non-Guarantor | Consolidated | |||||||||||||||
Subsidiaries | Subsidiaries | |||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income (loss) | $ | — | $ | (11,057 | ) | $ | 8,857 | $ | (879 | ) | $ | (3,079 | ) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | (283,848 | ) | 370,623 | 854 | 87,629 | |||||||||||||||
Net cash (used in) / provided by operations | — | (294,905 | ) | 379,480 | (25 | ) | 84,550 | |||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Additions to oil and gas properties | — | — | (125,493 | ) | — | (125,493 | ) | |||||||||||||
Acquisition of properties | — | — | (249,007 | ) | — | (249,007 | ) | |||||||||||||
Proceeds from sales of assets | — | — | 9,158 | — | 9,158 | |||||||||||||||
Acquisition of other property, plant and equipment | — | — | (969 | ) | — | (969 | ) | |||||||||||||
Current period settlements of matured derivative contracts | — | 28,675 | — | — | 28,675 | |||||||||||||||
Change in restricted cash | — | — | — | — | — | |||||||||||||||
Net cash (used in) / provided by investing | — | 28,675 | (366,311 | ) | — | (337,636 | ) | |||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Proceeds from issuance of long-term debt | — | 233,243 | — | — | 233,243 | |||||||||||||||
Repayment under long-term debt | — | (38,243 | ) | — | — | (38,243 | ) | |||||||||||||
Payment of debt issuance costs | — | (9,324 | ) | — | — | (9,324 | ) | |||||||||||||
Issuance of preferred units | — | 85,000 | — | — | 85,000 | |||||||||||||||
Net cash provided by financing | — | 270,676 | — | — | 270,676 | |||||||||||||||
Net increase (decrease) in cash | — | 4,446 | 13,169 | (25 | ) | 17,590 | ||||||||||||||
Cash | ||||||||||||||||||||
Beginning of period | — | 610 | 5,431 | 95 | 6,136 | |||||||||||||||
End of period | $ | — | $ | 5,056 | $ | 18,600 | $ | 70 | $ | 23,726 |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
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, 2013, 2012 and 2011, and the years then ended include the Company and all of its subsidiaries. | ||||||||
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. | ||||||||
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"). | ||||||||
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 values of outstanding balances under the Company's credit agreements represent fair value because the agreements have variable interest rates, which are reflective of the Company's credit risk. Derivative instruments are recorded at fair value, as discussed below. | ||||||||
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 negligible. | ||||||||
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 consist primarily of 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, 2013 and 2012, the Company did not have significant allowances for doubtful accounts. | ||||||||
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. As of December 31, 2013, 79% of Accounts receivable—Oil and gas sales are due from 8 purchasers and 77% of Accounts receivable—Joint interest owners are due from 5 working interest owners. As of December 31, 2012, 92% of Accounts receivable—Oil and gas sales were due from 8 purchasers, and 72% of 2012 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. | ||||||||
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, 2013, the largest purchasers were PVR Midstream, Unimark LLC, 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. During the year ended December 31, 2011, the largest purchasers were Plains Marketing, PVR Midstream, Unimark LLC, and Valero Marketing, which accounted for approximately 27%, 22%, 13% and 9% 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. | ||||||||
Dependence on Suppliers | Dependence on Suppliers | |||||||
The Company's industry is cyclical, and from time to time, there is a shortage of drilling rigs, equipment, services, supplies and qualified personnel. During these periods, the costs and delivery times of rigs, equipment, services and supplies are substantially greater. If the unavailability or high cost of drilling rigs, equipment, services, supplies or qualified personnel were particularly severe in its areas of operation, the Company could be materially and adversely affected. Management believes that there are potential alternative providers of drilling and completion services and that 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. | ||||||||
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, 2013 and 2012: | ||||||||
(in thousands of dollars) | 2013 | 2012 | ||||||
Mineral interests in properties | ||||||||
Unproved | $ | 114,457 | $ | 137,254 | ||||
Proved | 958,816 | 737,558 | ||||||
Wells and equipment and related facilities | 609,748 | 389,727 | ||||||
| | | | | | | | |
1,683,021 | 1,264,539 | |||||||
Less: Accumulated depletion and impairment | (370,470 | ) | (257,195 | ) | ||||
| | | | | | | | |
Net oil and gas properties | $ | 1,312,551 | $ | 1,007,344 | ||||
| | | | | | | | |
| | | | | | | | |
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. In 2013, we had no material capitalized costs associated with exploratory wells. As of December 31, 2012, there were no costs capitalized in connection with exploratory wells in progress. | ||||||||
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 did not capitalize any interest in 2013 as no projects lasted more than six months. During the year ended December 31, 2012, the Company capitalized $0.1 million in interest. 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 $113.3 million, $79.9 million and $68.2 million for the years ended December 31, 2013, 2012 and 2011, 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. The Company incurred impairment charges of $18.8 million and $19.8 million related to its proved oil and natural gas properties and equipment in 2012 and 2011, respectively. No impairments of proved properties were recorded in 2013. | ||||||||
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 activity by other companies on adjacent blocks. In the fourth quarter of 2013, the Company recorded an impairment charge of $14.4 million related to its unproved Southridge properties. 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. The Company incurred no impairment charges related to its unproved properties in 2012. In 2011, the Company incurred a $12.2 million impairment charge related to its unproven properties in fields which were not expected to produce natural gas with a sufficiently high liquid content reducing the economic return of those fields. These charges represent nonrecurring Level 3 measurements. 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. | ||||||||
Other Property, Plant and Equipment | Other Property, Plant and Equipment | |||||||
Other property, plant and equipment consisted of the following at December 31, 2013 and 2012: | ||||||||
(in thousands of dollars) | 2013 | 2012 | ||||||
Leasehold improvements | $ | 1,060 | $ | 983 | ||||
Furniture, fixtures, computers and software | 2,491 | 2,204 | ||||||
Vehicles | 835 | 719 | ||||||
Aircraft | 910 | 1,295 | ||||||
Other | 134 | 134 | ||||||
| | | | | | | | |
5,430 | 5,335 | |||||||
Less: Accumulated depreciation and amortization | (1,986 | ) | (1,937 | ) | ||||
| | | | | | | | |
Net other property, plant and equipment | $ | 3,444 | $ | 3,398 | ||||
| | | | | | | | |
| | | | | | | | |
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 $0.8 million, $0.8 million and $0.7 million during the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||
Oil and Gas Sales Payable | 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. | ||||||||
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, 2013, 2012 and 2011, 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 Jones 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. | ||||||||
Asset Retirement Obligations | Asset Retirement Obligations | |||||||
The Company's asset retirement obligations 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, 2013 and 2012 is as follows: | ||||||||
(in thousands of dollars) | 2013 | 2012 | ||||||
ARO liability at beginning of year | $ | 9,506 | $ | 9,563 | ||||
Liabilities incurred(1) | 1,515 | 662 | ||||||
Accretion of discount | 608 | 596 | ||||||
Liabilities settled due to sale of related properties | (271 | ) | (927 | ) | ||||
Liabilities settled due to plugging and abandonment | (702 | ) | (388 | ) | ||||
Change in estimate | 307 | — | ||||||
| | | | | | | | |
ARO liability at end of year | 10,963 | 9,506 | ||||||
Less: Current portion of ARO at end of year | (2,590 | ) | (174 | ) | ||||
| | | | | | | | |
Total long-term ARO at end of year | $ | 8,373 | $ | 9,332 | ||||
| | | | | | | | |
| | | | | | | | |
-1 | ||||||||
Includes $824 related to wells acquired (see Note 3, "Acquisition of Properties"). | ||||||||
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. | ||||||||
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. | ||||||||
Exploration Expenses | Exploration Expenses | |||||||
Exploration expenses include dry hole costs, lease extensions, delay rentals and geological and geophysical costs. | ||||||||
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. | ||||||||
Tax Receivable Agreement | Tax Receivable Agreement | |||||||
In conjunction with the IPO, the Company entered into a Tax Receivable Agreement ("TRA") with JEH and the pre-IPO owners. Upon any exchange of JEH—Units and Class B common stock of the Company held by JEH's pre-IPO owners for Class A common stock of the Company, the TRA provides for the payment by the Company, directly to such exchanging owners, of 85% of the amount of cash savings in income or franchise taxes that the Company realizes as a result of (i) the tax basis increases resulting from the exchange of JEH Units for shares of Class A common stock (or resulting from a sale of JEH Units for cash) and (ii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, any payments the Company makes under the TRA. The Company will retain the benefit of the remaining 15% of the cash savings. Liabilities under the TRA will be recognized upon the exchange of shares. As of December 31, 2013, there have been no exchanges and no liability is recorded on the Consolidated Balance Sheet. | ||||||||
Comprehensive Income | Comprehensive Income | |||||||
The Company has no elements of comprehensive income other than net income. | ||||||||
Statement of Cash Flows | Statement of Cash Flows | |||||||
The Company presents its cash flows using the indirect method. | ||||||||
Related Party Transactions | Related Party Transactions | |||||||
In the years ended December 31, 2013, 2012 and 2011, 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, or Monarch, under which Monarch has the first right to gather the natural gas the Company produces from the Chalker 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. For the year ended December 31, 2013, the Company produced approximately 0.8 MMBoe of natural gas and NGLs from the Chalker 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, Robert Brooks and Eric Niccum. | ||||||||
Stock Compensation | Stock Compensation | |||||||
JEH implemented a management incentive plan effective January 1, 2010, that provided membership-interest awards in JEH to members of senior management ("management units"). The management unit grants awarded prior to the initial filing of the registration statement in March 2013 had a dual vesting schedule. Sixty percent of the units awarded vested in five equal annual installments, with the remaining 40% vesting upon a company restructuring event, including the IPO. All grants awarded after the initial registration statement 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, 2013, there were 457,150 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. As of December 31, 2013 no such awards had been issued or granted to any of the Company's employees. | ||||||||
On September 4, 2013, the Company granted each of the four outside members of the Board of Directors 6,645 shares 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 the management units and restricted stock awards. | ||||||||
Business Combinations | 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. | ||||||||
Recent Accounting Developments | Recent Accounting Developments | |||||||
The following recently issued accounting pronouncement has been adopted by the Company: | ||||||||
Offsetting Assets and Liabilities | Offsetting Assets and Liabilities | |||||||
In December 2011, the Financial Accounting Standards Board ("FASB"), issued authoritative guidance requiring entities to disclose both gross and net information about instruments and transactions eligible for offset arrangement. In January 2013, FASB issued an update to the previously issued guidance with the purpose of clarifying the scope of the disclosures about the offsetting assets and liabilities. The additional disclosures enable users of the financial statements to evaluate the effect or potential effect of netting arrangements on an entity's financial position. These disclosure requirements are effective for interim and annual periods beginning after January 1, 2013. The Company has provided all required disclosures for the periods presented as they pertain to its commodity derivative instruments (see Note 4, "Fair Value Measurement"). These disclosure requirements did not affect the Company's operating results, financial position, or cash flows. | ||||||||
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Significant Accounting Policies | ||||||||
Schedule of oil and gas properties | ||||||||
(in thousands of dollars) | 2013 | 2012 | ||||||
Mineral interests in properties | ||||||||
Unproved | $ | 114,457 | $ | 137,254 | ||||
Proved | 958,816 | 737,558 | ||||||
Wells and equipment and related facilities | 609,748 | 389,727 | ||||||
| | | | | | | | |
1,683,021 | 1,264,539 | |||||||
Less: Accumulated depletion and impairment | (370,470 | ) | (257,195 | ) | ||||
| | | | | | | | |
Net oil and gas properties | $ | 1,312,551 | $ | 1,007,344 | ||||
| | | | | | | | |
| | | | | | | | |
Schedule of other property, plant and equipment | ||||||||
(in thousands of dollars) | 2013 | 2012 | ||||||
Leasehold improvements | $ | 1,060 | $ | 983 | ||||
Furniture, fixtures, computers and software | 2,491 | 2,204 | ||||||
Vehicles | 835 | 719 | ||||||
Aircraft | 910 | 1,295 | ||||||
Other | 134 | 134 | ||||||
| | | | | | | | |
5,430 | 5,335 | |||||||
Less: Accumulated depreciation and amortization | (1,986 | ) | (1,937 | ) | ||||
| | | | | | | | |
Net other property, plant and equipment | $ | 3,444 | $ | 3,398 | ||||
| | | | | | | | |
| | | | | | | | |
Summary of the Company's ARO | ||||||||
(in thousands of dollars) | 2013 | 2012 | ||||||
ARO liability at beginning of year | $ | 9,506 | $ | 9,563 | ||||
Liabilities incurred(1) | 1,515 | 662 | ||||||
Accretion of discount | 608 | 596 | ||||||
Liabilities settled due to sale of related properties | (271 | ) | (927 | ) | ||||
Liabilities settled due to plugging and abandonment | (702 | ) | (388 | ) | ||||
Change in estimate | 307 | — | ||||||
| | | | | | | | |
ARO liability at end of year | 10,963 | 9,506 | ||||||
Less: Current portion of ARO at end of year | (2,590 | ) | (174 | ) | ||||
| | | | | | | | |
Total long-term ARO at end of year | $ | 8,373 | $ | 9,332 | ||||
| | | | | | | | |
| | | | | | | | |
-1 | ||||||||
Includes $824 related to wells acquired (see Note 3, "Acquisition of Properties"). | ||||||||
Acquisition_of_Properties_Tabl
Acquisition of Properties (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Sabine acquisition | ||||||||
Acquisition of Properties | ||||||||
Schedule of purchase price allocation | ||||||||
(in thousands of dollars) | ||||||||
Oil and gas properties | ||||||||
Unproved | $ | 39,596 | ||||||
Proved | 154,724 | |||||||
Asset retirement obligations | (824 | ) | ||||||
| | | | | ||||
Total purchase price | $ | 193,496 | ||||||
| | | | | ||||
| | | | | ||||
Schedule of unaudited pro forma results of operations | ||||||||
Year Ended | ||||||||
December 31, | ||||||||
Post Acquisition(1) | 2013 | |||||||
(in thousands of dollars) | Pro Forma | |||||||
(unaudited) | (unaudited) | |||||||
Total operating revenue | $ | 1,365 | $ | 308,773 | ||||
Total operating expenses | 291 | 229,648 | ||||||
Operating income | 1,074 | 79,125 | ||||||
Net income | 1,074 | 45,778 | ||||||
-1 | ||||||||
Represents revenues and expenses for the post acquisition period of December 18, 2013 to December 31, 2013 included in the Consolidated Statement of Operations. | ||||||||
Chalker acquisition | ||||||||
Acquisition of Properties | ||||||||
Schedule of purchase price allocation | ||||||||
(in thousands of dollars) | ||||||||
Oil and gas properties | ||||||||
Unproved | $ | 71,264 | ||||||
Proved | 182,493 | |||||||
Asset retirement obligations | (293 | ) | ||||||
| | | | | ||||
Total purchase price | $ | 253,464 | ||||||
| | | | | ||||
| | | | | ||||
Schedule of unaudited pro forma results of operations | ||||||||
Year Ended | ||||||||
December 31, | ||||||||
2012 | ||||||||
(in thousands of dollars) | Pro Forma | |||||||
(unaudited) | ||||||||
Total operating revenue | $ | 194,685 | ||||||
Total operating expenses | 161,053 | |||||||
Operating income | 33,632 | |||||||
Net income | 25,713 | |||||||
Oil and natural gas properties located in Oklahoma | ||||||||
Acquisition of Properties | ||||||||
Schedule of purchase price allocation | ||||||||
(in thousands of dollars) | ||||||||
Oil and gas properties | $ | 154,225 | ||||||
Asset retirement obligations | (167 | ) | ||||||
| | | | | ||||
Total purchase price | $ | 154,058 | ||||||
| | | | | ||||
| | | | | ||||
Schedule of unaudited pro forma results of operations | ||||||||
Year Ended | ||||||||
December 31, | ||||||||
2011 | ||||||||
(in thousands of dollars) | Pro Forma | |||||||
(unaudited) | ||||||||
Total operating revenue | $ | 176,884 | ||||||
Total operating expenses | 150,197 | |||||||
Operating income | 26,687 | |||||||
Net income | 62,408 |
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Measurement | |||||||||||||||||
Schedule of financial instruments carried at fair value | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||
(in thousands of dollars) | (Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
Commodity Price Hedges | |||||||||||||||||
Current assets | $ | — | $ | 8,837 | $ | — | $ | 8,837 | |||||||||
Long-term assets | — | 25,967 | (569 | ) | 25,398 | ||||||||||||
Current liabilities | — | 10,188 | 476 | 10,664 | |||||||||||||
Long-term liabilities | — | — | 190 | 190 | |||||||||||||
December 31, 2012 | |||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||
(in thousands of dollars) | (Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
Commodity Price Hedges | |||||||||||||||||
Current assets | $ | — | $ | 17,648 | $ | — | $ | 17,648 | |||||||||
Long-term assets | — | 24,756 | 443 | 25,199 | |||||||||||||
Current liabilities | — | 2,992 | 1,043 | 4,035 | |||||||||||||
Long-term liabilities | — | 6,739 | 918 | 7,657 | |||||||||||||
Schedule of quantitative information about Level 3 inputs used in the fair value measurement | |||||||||||||||||
Quantitative Information About Level 3 Fair Value Measurements | |||||||||||||||||
Commodity Price Hedges | Fair Value | Valuation Technique | Unobservable Input | Range | |||||||||||||
Natural gas liquid swaps | $ | (1,235 | ) | Use a discounted cash flow approach using inputs including forward price statements from counterparties | Natural gas liquid futures | $9.24 - $83.06 per barrel | |||||||||||
Schedule of changes in fair value of Level 3 financial instruments | |||||||||||||||||
(in thousands of dollars) | |||||||||||||||||
Balance at January 1, 2012, net | $ | (2,083 | ) | ||||||||||||||
Purchases | (2,352 | ) | |||||||||||||||
Settlements | — | ||||||||||||||||
Transfers to Level 2 | 2,370 | ||||||||||||||||
Transfers to Level 3 | 834 | ||||||||||||||||
Changes in fair value | (288 | ) | |||||||||||||||
| | | | | |||||||||||||
Balance at December 31, 2012, net | (1,519 | ) | |||||||||||||||
Purchases | (1,095 | ) | |||||||||||||||
Settlements | (210 | ) | |||||||||||||||
Transfers to Level 2 | (753 | ) | |||||||||||||||
Changes in fair value | 2,342 | ||||||||||||||||
| | | | | |||||||||||||
Balance at December 31, 2013, net | $ | (1,235 | ) | ||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Schedule of commodity derivative contracts which are netted on Consolidated Balance Sheet | |||||||||||||||||
(in thousands of dollars) | Gross Amounts | Gross | Net Amounts | Gross Amounts | Net Amount | ||||||||||||
of Recognized | Amounts | of Assets / | Not | ||||||||||||||
Assets / | Offset in the | Liabilities | Offset in the | ||||||||||||||
Liabilities | Balance | Presented in | Balance | ||||||||||||||
Sheet | the Balance | Sheet | |||||||||||||||
Sheet | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Commodity derivative contracts | |||||||||||||||||
Assets | $ | 38,071 | $ | (6,035 | ) | $ | 32,036 | $ | 2,199 | $ | 34,235 | ||||||
Liabilities | (14,347 | ) | 6,035 | (8,312 | ) | (2,542 | ) | (10,854 | ) | ||||||||
December 31, 2012 | |||||||||||||||||
Commodity derivative contracts | |||||||||||||||||
Assets | $ | 49,200 | $ | (7,831 | ) | $ | 41,369 | $ | 1,478 | $ | 42,847 | ||||||
Liabilities | (17,928 | ) | 7,831 | (10,097 | ) | (1,595 | ) | (11,692 | ) |
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Derivative Instruments and Hedging Activities | ||||||||||||||
Schedule of various commodity derivatives in place to offset uncertain price fluctuations that could affect the entity's future operations | ||||||||||||||
December 31, 2013 | ||||||||||||||
Low | High | Weighted | Final | |||||||||||
Average | Expiration | |||||||||||||
Oil swaps | Exercise price | $ | 81.7 | $ | 102.84 | $ | 89.03 | |||||||
Barrels per month | 29,000 | 161,613 | 96,149 | Dec-17 | ||||||||||
Natural gas swaps | Exercise price | $ | 3.88 | $ | 6.9 | $ | 4.26 | |||||||
mmbtu per month | 510,000 | 1,290,000 | 830,275 | Dec-17 | ||||||||||
Basis swaps | Contract differential | $ | (0.43 | ) | $ | (0.11 | ) | $ | (0.34 | ) | ||||
mmbtu per month | 320,000 | 690,000 | 467,037 | Mar-16 | ||||||||||
Natural gas liquids swaps | Exercise price | $ | 6.72 | $ | 95.24 | $ | 32.98 | |||||||
Barrels per month | 2,000 | 118,000 | 46,646 | Dec-17 | ||||||||||
December 31, 2012 | ||||||||||||||
Low | High | Weighted | Final | |||||||||||
Average | Expiration | |||||||||||||
Oil swaps | Exercise price | $ | 81 | $ | 104.45 | $ | 89.6 | |||||||
Barrels per month | 24,000 | 143,116 | 89,323 | Dec-17 | ||||||||||
Natural gas swaps | Exercise price | $ | 3.52 | $ | 6.9 | $ | 4.96 | |||||||
mmbtu per month | 430,000 | 1,110,000 | 767,053 | Dec-17 | ||||||||||
Basis swaps | Contract differential | $ | (0.65 | ) | $ | (0.03 | ) | $ | (0.31 | ) | ||||
mmbtu per month | 320,000 | 850,000 | 484,615 | Mar-16 | ||||||||||
Natural gas liquids swaps | Exercise price | $ | 6.72 | $ | 97.13 | $ | 33.81 | |||||||
Barrels per month | 2,000 | 144,973 | 55,616 | Dec-17 |
Stockbased_Compensation_Tables
Stock-based Compensation (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Non-employee members of Board Of Directors | Restricted stock | ||||||||
Stock-based Compensation | ||||||||
Summary of information related to the Units/shares or awards | ||||||||
Restricted Stock Awards | Weighted Average | |||||||
Grant Date Fair Value | ||||||||
per Share | ||||||||
Unvested at January 1, 2013 | — | — | ||||||
Granted | 27 | $ | 15.05 | |||||
Forfeited | — | — | ||||||
Vested | — | — | ||||||
| | | | | | | | |
Unvested at December 31, 2013 | 27 | $ | 15.05 | |||||
| | | | | | | | |
| | | | | | | | |
Management incentive plan | Management units | Management | ||||||||
Stock-based Compensation | ||||||||
Summary of information related to the Units/shares or awards | ||||||||
JEH Units | Weighted Average | |||||||
Grant Date Fair Value | ||||||||
per Share | ||||||||
Unvested at January 1, 2013 | 710,767 | $ | 3.62 | |||||
Granted | 911,654 | $ | 15 | |||||
Forfeited | (167,239 | ) | $ | 3.62 | ||||
Vested | (998,032 | ) | $ | 9.96 | ||||
| | | | | | | | |
Unvested at December 31, 2013 | 457,150 | $ | 12.46 | |||||
| | | | | | | | |
| | | | | | | | |
Earnings_per_Share_Tables
Earnings per Share (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Earnings per Share | |||||
Schedule of calculation of the basic and diluted weighted-average shares and EPS | |||||
(in thousands, except per share data) | December 31, 2013 | ||||
Income (numerator): | |||||
Net income (loss) attributable to controlling interests | $ | (2,186 | ) | ||
Weighted-average shares (denominator): | |||||
Weighted-average number of shares of Class A common stock—basic and diluted | 12,500 | ||||
| | | | | |
Earnings (loss) per share: | |||||
Basic and diluted | $ | (0.17 | ) | ||
| | | | | |
| | | | | |
Anti-dilutive restricted shares of Class A common stock | 27 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | |||||
Schedule of future minimum payments for noncancellable operating leases extending beyond one year | |||||
(in thousands of dollars) | |||||
Years Ending December 31, | |||||
2014 | $ | 586 | |||
2015 | 482 | ||||
2016 | 458 | ||||
2017 | 147 | ||||
Thereafter | — | ||||
| | | | | |
$ | 1,673 | ||||
| | | | | |
| | | | | |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes | |||||||||||
Schedule of income tax provision | |||||||||||
Year Ended December 31, | |||||||||||
(in thousands of dollars) | 2013 | 2012 | 2011 | ||||||||
Current tax expense | |||||||||||
Federal | $ | 85 | $ | — | $ | — | |||||
State | — | — | — | ||||||||
| | | | | | | | | | | |
Total current expense | 85 | — | — | ||||||||
| | | | | | | | | | | |
Deferred tax expense (benefit) | |||||||||||
Federal | (1,260 | ) | — | — | |||||||
State | 1,104 | 473 | 173 | ||||||||
| | | | | | | | | | | |
Total deferred expense (benefit) | (156 | ) | 473 | 173 | |||||||
| | | | | | | | | | | |
Total tax expense (benefit) | (71 | ) | 473 | 173 | |||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Tax benefit attributable to controlling interests | (1,223 | ) | — | — | |||||||
Tax expense attributable to non-controlling interests | 1,152 | 473 | 173 | ||||||||
| | | | | | | | | | | |
Total tax expense (benefit) | $ | (71 | ) | $ | 473 | $ | 173 | ||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of reconciliation of the Company's provision for income taxes as reported and the amount computed by multiplying income before taxes, less non-controlling interest, by the U.S. federal statutory rate | |||||||||||
(in thousands of dollars) | December 31, 2013 | ||||||||||
Provision calculated at federal statutory income tax rate: | |||||||||||
Net income before taxes | $ | 22,334 | |||||||||
Statutory rate | 35 | % | |||||||||
| | | | | |||||||
Income tax expense computed at statutory rate | 7,817 | ||||||||||
Less: Non-controlling interests | (9,009 | ) | |||||||||
| | | | | |||||||
Income tax benefit attributable to controlling interests | (1,192 | ) | |||||||||
State and local income taxes, net of federal benefit | (49 | ) | |||||||||
Other | 18 | ||||||||||
| | | | | |||||||
Tax benefit attributable to controlling interests | (1,223 | ) | |||||||||
Tax expense attributable to non-controlling interests | 1,152 | ||||||||||
| | | | | |||||||
Total income tax benefit | $ | (71 | ) | ||||||||
| | | | | |||||||
| | | | | |||||||
Schedule of significant components of the Company's deferred tax assets and deferred tax liability | |||||||||||
As of December 31, | |||||||||||
(in thousands of dollars) | 2013 | 2012 | |||||||||
Deferred tax assets | |||||||||||
Investment in consolidated subsidiary JEH | $ | 526 | $ | — | |||||||
Net operating loss | 649 | — | |||||||||
Alternative minimum tax credits | 86 | — | |||||||||
State deferred tax asset | 52 | — | |||||||||
| | | | | | | | ||||
Total deferred tax assets | 1,313 | — | |||||||||
| | | | | | | | ||||
Deferred tax liabilities | |||||||||||
State deferred tax liability | 3,093 | 1,936 | |||||||||
| | | | | | | | ||||
Total deferred tax liabilities | 3,093 | 1,936 | |||||||||
| | | | | | | | ||||
Net deferred tax assets (liabilities) | (1,780 | ) | (1,936 | ) | |||||||
Valuation allowance | — | — | |||||||||
| | | | | | | | ||||
Net deferred tax assets (liabilities) | $ | (1,780 | ) | $ | (1,936 | ) | |||||
| | | | | | | | ||||
| | | | | | | | ||||
Subsidiary_Guarantors_Tables
Subsidiary Guarantors (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Subsidiary Guarantors | ||||||||||||||||||||
Condensed Consolidating Statements of Operations | Jones Energy, Inc. | |||||||||||||||||||
Condensed Consolidating Statements of Operations | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
(in thousands of dollars) | JEI(Parent) | Issuers | Guarantor | Non-Guarantor | Eliminations | Consolidated | ||||||||||||||
Subsidiaries | Subsidiaries | |||||||||||||||||||
Operating revenues | ||||||||||||||||||||
Oil and gas sales | $ | — | $ | — | $ | 258,063 | $ | — | $ | — | $ | 258,063 | ||||||||
Other revenues | — | 469 | 637 | — | — | 1,106 | ||||||||||||||
Total operating revenues | — | 469 | 258,700 | — | — | 259,169 | ||||||||||||||
Operating costs and expenses | ||||||||||||||||||||
Lease operating | — | — | 27,781 | — | — | 27,781 | ||||||||||||||
Production taxes | — | — | 12,865 | — | — | 12,865 | ||||||||||||||
Exploration | — | — | 1,710 | — | — | 1,710 | ||||||||||||||
Depletion, depreciation and amortization | — | — | 114,046 | 90 | — | 114,136 | ||||||||||||||
Impairment of oil and gas properties | — | — | 14,415 | — | — | 14,415 | ||||||||||||||
Accretion of discount | — | — | 608 | — | — | 608 | ||||||||||||||
General and administrative (including non-cash compensation expense) | — | 4,154 | 27,490 | 258 | — | 31,902 | ||||||||||||||
Total operating expenses | — | 4,154 | 198,915 | 348 | — | 203,417 | ||||||||||||||
Operating income | — | (3,685 | ) | 59,785 | (348 | ) | — | 55,752 | ||||||||||||
Other income (expense) | ||||||||||||||||||||
Interest expense | — | (29,653 | ) | (1,121 | ) | — | — | (30,774 | ) | |||||||||||
Net gain (loss) on commodity derivatives | — | (2,566 | ) | — | — | — | (2,566 | ) | ||||||||||||
Gain (loss) on sales of assets | — | — | 41 | (119 | ) | — | (78 | ) | ||||||||||||
Other income (expense), net | — | (32,219 | ) | (1,080 | ) | (119 | ) | — | (33,418 | ) | ||||||||||
Income (loss) before income tax | — | (35,904 | ) | 58,705 | (467 | ) | — | 22,334 | ||||||||||||
Equity interest in Income | (3,400 | ) | — | — | — | 3,400 | — | |||||||||||||
Income tax provision (benefit) | ||||||||||||||||||||
Current | 85 | — | — | — | — | 85 | ||||||||||||||
Deferred | (1,299 | ) | 1,143 | — | — | — | (156 | ) | ||||||||||||
Total income tax provision (benefit) | (1,214 | ) | 1,143 | — | — | — | (71 | ) | ||||||||||||
Net income (loss) | $ | (2,186 | ) | $ | (37,047 | ) | $ | 58,705 | $ | (467 | ) | $ | 3,400 | $ | 22,405 | |||||
Net income (loss) attributable to non-controlling interests | — | — | — | — | $ | 24,591 | $ | 24,591 | ||||||||||||
Net income (loss) attributable to controlling interests | $ | (2,186 | ) | — | — | — | — | $ | (2,186 | ) | ||||||||||
Jones Energy, Inc. | ||||||||||||||||||||
Condensed Consolidating Statements of Operations | ||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
(in thousands of dollars) | JEI(Parent) | Issuers | Guarantor | Non-Guarantor | Eliminations | Consolidated | ||||||||||||||
Subsidiaries | Subsidiaries | |||||||||||||||||||
Operating revenues | ||||||||||||||||||||
Oil and gas sales | $ | — | $ | — | $ | 148,967 | $ | — | $ | — | $ | 148,967 | ||||||||
Other revenues | — | — | 847 | — | — | 847 | ||||||||||||||
Total operating revenues | — | — | 149,814 | — | — | 149,814 | ||||||||||||||
Operating costs and expenses | ||||||||||||||||||||
Lease operating | — | — | 23,097 | — | — | 23,097 | ||||||||||||||
Production taxes | — | — | 5,583 | — | — | 5,583 | ||||||||||||||
Exploration | — | — | 356 | — | — | 356 | ||||||||||||||
Depletion, depreciation and amortization | — | — | 80,554 | 155 | — | 80,709 | ||||||||||||||
Impairment of oil and gas properties | — | — | 18,821 | — | — | 18,821 | ||||||||||||||
Accretion of discount | — | — | 533 | — | — | 533 | ||||||||||||||
General and administrative (including non-cash compensation expense) | — | 2,589 | 12,562 | 724 | — | 15,875 | ||||||||||||||
Total operating expenses | — | 2,589 | 141,506 | 879 | — | 144,974 | ||||||||||||||
Operating income | — | (2,589 | ) | 8,308 | (879 | ) | — | 4,840 | ||||||||||||
Other income (expense) | ||||||||||||||||||||
Interest expense | — | (24,679 | ) | (613 | ) | — | — | (25,292 | ) | |||||||||||
Net gain (loss) on commodity derivatives | — | 16,684 | — | — | — | 16,684 | ||||||||||||||
Gain (loss) on sales of assets | — | — | 1,162 | — | — | 1,162 | ||||||||||||||
Other income (expense), net | — | (7,995 | ) | 549 | — | — | (7,446 | ) | ||||||||||||
Income (loss) before income tax | — | (10,584 | ) | 8,857 | (879 | ) | — | (2,606 | ) | |||||||||||
Income tax provision (benefit) | ||||||||||||||||||||
Current | — | — | — | — | — | — | ||||||||||||||
Deferred | — | 473 | — | — | — | 473 | ||||||||||||||
Total income tax provision (benefit) | — | 473 | — | — | — | 473 | ||||||||||||||
Net income (loss) | $ | — | $ | (11,057 | ) | $ | 8,857 | $ | (879 | ) | $ | — | $ | (3,079 | ) | |||||
Condensed Consolidating Balance Sheet | Jones Energy, Inc | |||||||||||||||||||
Condensed Consolidating Balance Sheet | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
(in thousands of dollars) | JEI(Parent) | Issuers | Guarantor | Non-Guarantor | Eliminations | Consolidated | ||||||||||||||
Subsidiaries | Subsidiaries | |||||||||||||||||||
Assets | ||||||||||||||||||||
Current assets | ||||||||||||||||||||
Cash | $ | 100 | $ | 6,000 | $ | 17,650 | $ | 70 | $ | — | $ | 23,820 | ||||||||
Restricted Cash | — | — | 45 | — | — | 45 | ||||||||||||||
Accounts receivable, net | ||||||||||||||||||||
Oil and gas sales | — | — | 51,233 | — | — | 51,233 | ||||||||||||||
Joint interest owners | — | — | 42,481 | — | — | 42,481 | ||||||||||||||
Other | — | — | 1,459 | — | — | 1,459 | ||||||||||||||
Commodity derivative assets | — | 8,837 | — | — | — | 8,837 | ||||||||||||||
Other current assets | — | 387 | 2,005 | — | — | 2,392 | ||||||||||||||
Deferred tax assets | — | 12 | — | — | — | 12 | ||||||||||||||
Intercompany receivable | 638 | 1,051,389 | — | (1,052,027 | ) | — | ||||||||||||||
Total current assets | 738 | 1,066,625 | 114,873 | 70 | (1,052,027 | ) | 130,279 | |||||||||||||
Oil and gas properties, net, at cost under the successful efforts method | — | — | 1,312,551 | — | — | 1,312,551 | ||||||||||||||
Other property, plant and equipment, net | — | — | 2,557 | 887 | — | 3,444 | ||||||||||||||
Commodity derivative assets | — | 25,398 | — | — | — | 25,398 | ||||||||||||||
Other assets | — | 14,072 | 934 | — | — | 15,006 | ||||||||||||||
Investment in Subsidiaries | 169,081 | — | — | — | (169,081 | ) | — | |||||||||||||
Deferred tax assets | 1,301 | — | — | — | — | 1,301 | ||||||||||||||
Total assets | $ | 171,120 | $ | 1,106,095 | $ | 1,430,915 | $ | 957 | $ | (1,221,108 | ) | $ | 1,487,979 | |||||||
Liabilities and Stockholders’ / Members’ Equity | ||||||||||||||||||||
Current liabilities | ||||||||||||||||||||
Trade accounts payable | $ | — | $ | 230 | $ | 89,200 | $ | — | $ | — | $ | 89,430 | ||||||||
Oil and gas sales payable | — | — | 66,179 | — | — | 66,179 | ||||||||||||||
Accrued liabilities | 87 | 1,642 | 9,076 | — | — | 10,805 | ||||||||||||||
Commodity derivative liabilities | — | 10,664 | — | — | — | 10,664 | ||||||||||||||
Deferred tax liabilities | — | — | — | — | — | — | ||||||||||||||
Asset retirement obligations | — | — | 2,590 | — | — | 2,590 | ||||||||||||||
Intercompany payable | — | 1,051,935 | 2,279 | (1,054,214 | ) | — | ||||||||||||||
Total current liabilities | 87 | 12,536 | 1,218,980 | 2,279 | (1,054,214 | ) | 179,668 | |||||||||||||
Long-term debt | — | 658,000 | — | — | — | 658,000 | ||||||||||||||
Deferred revenue | — | 14,531 | — | — | — | 14,531 | ||||||||||||||
Commodity derivative liabilities | — | 190 | — | — | — | 190 | ||||||||||||||
Asset retirement obligations | — | — | 8,373 | — | — | 8,373 | ||||||||||||||
Deferred tax liabilities | — | 3,093 | — | — | — | 3,093 | ||||||||||||||
Total liabilities | 87 | 688,350 | 1,227,353 | 2,279 | (1,054,214 | ) | 863,855 | |||||||||||||
Commitments and contingencies (Note 10) | ||||||||||||||||||||
Stockholders’ / members’ equity | ||||||||||||||||||||
Members’ equity | — | 417,745 | 203,562 | (1,322 | ) | (619,985 | ) | — | ||||||||||||
Class A common stock, $0.001 par value; 12,526,580 shares issued and outstanding | 13 | — | — | — | — | 13 | ||||||||||||||
Class B common stock, $0.001 par value; 36,836,333 shares issued and outstanding | 37 | — | — | — | — | 37 | ||||||||||||||
Additional paid-in-capital | 173,169 | — | — | — | — | 173,169 | ||||||||||||||
Retained earnings (deficit) | (2,186 | ) | — | — | — | — | (2,186 | ) | ||||||||||||
Stockholders’ / members’ equity | 171,033 | 417,745 | 203,562 | (1,322 | ) | (619,985 | ) | 171,033 | ||||||||||||
Non-controlling interest | — | — | — | — | 453,091 | 453,091 | ||||||||||||||
Total stockholders’ / members’ equity | 171,033 | 417,745 | 203,562 | (1,322 | ) | (166,894 | ) | 624,124 | ||||||||||||
Total liabilities and stockholders’ / members’ equity | $ | 171,120 | $ | 1,106,095 | $ | 1,430,915 | $ | 957 | $ | (1,221,108 | ) | $ | 1,487,979 | |||||||
Jones Energy, Inc | ||||||||||||||||||||
Condensed Consolidating Balance Sheet | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
(in thousands of dollars) | JEI(Parent) | Issuers | Guarantor | Non-Guarantor | Eliminations | Consolidated | ||||||||||||||
Subsidiaries | Subsidiaries | |||||||||||||||||||
Assets | ||||||||||||||||||||
Current assets | ||||||||||||||||||||
Cash | $ | — | $ | 5,056 | $ | 18,600 | $ | 70 | $ | — | $ | 23,726 | ||||||||
Restricted Cash | — | — | — | — | — | — | ||||||||||||||
Accounts receivable, net | ||||||||||||||||||||
Oil and gas sales | — | — | 29,684 | — | — | 29,684 | ||||||||||||||
Joint interest owners | — | — | 21,876 | — | — | 21,876 | ||||||||||||||
Other | — | 1,719 | 2,871 | — | — | 4,590 | ||||||||||||||
Commodity derivative assets | — | 17,648 | — | — | — | 17,648 | ||||||||||||||
Other current assets | — | — | 1,088 | — | — | 1,088 | ||||||||||||||
Deferred tax assets | — | — | — | — | — | — | ||||||||||||||
Intercompany receivable | — | 845,184 | — | — | (845,184 | ) | — | |||||||||||||
Total current assets | — | 869,607 | 74,119 | 70 | (845,184 | ) | 98,612 | |||||||||||||
Oil and gas properties, net, at cost | ||||||||||||||||||||
under the successful efforts method | — | — | 1,007,344 | — | — | 1,007,344 | ||||||||||||||
Other property, plant and equipment, net | — | — | 2,568 | 830 | — | 3,398 | ||||||||||||||
Commodity derivative assets | — | 25,199 | — | — | — | 25,199 | ||||||||||||||
Other assets | — | 13,446 | 2,687 | — | — | 16,133 | ||||||||||||||
Deferred tax assets | — | — | — | — | — | — | ||||||||||||||
Total assets | $ | — | $ | 908,252 | $ | 1,086,718 | $ | 900 | $ | (845,184 | ) | $ | 1,150,686 | |||||||
Liabilities and Stockholders’ / Members’ Equity | ||||||||||||||||||||
Current liabilities | ||||||||||||||||||||
Trade accounts payable | $ | — | $ | 116 | $ | 37,920 | $ | — | $ | — | $ | 38,036 | ||||||||
Oil and gas sales payable | — | — | 45,860 | — | — | 45,860 | ||||||||||||||
Accrued liabilities | — | 110 | 5,145 | — | — | 5,255 | ||||||||||||||
Commodity derivative liabilities | — | 4,035 | — | — | — | 4,035 | ||||||||||||||
Deferred tax liabilities | — | 61 | — | — | — | 61 | ||||||||||||||
Asset retirement obligations | — | — | 174 | — | — | 174 | ||||||||||||||
Intercompany payable | — | — | 843,430 | 1,754 | (845,184 | ) | — | |||||||||||||
Total current liabilities | — | 4,322 | 932,529 | 1,754 | (845,184 | ) | 93,421 | |||||||||||||
Long-term debt | — | 610,000 | — | — | — | 610,000 | ||||||||||||||
Deferred revenue | — | — | — | — | — | — | ||||||||||||||
Commodity derivative liabilities | — | 7,657 | — | — | — | 7,657 | ||||||||||||||
Asset retirement obligations | — | — | 9,332 | — | — | 9,332 | ||||||||||||||
Deferred tax liabilities | — | 1,876 | — | — | — | 1,876 | ||||||||||||||
Total liabilities | — | 623,855 | 941,861 | 1,754 | (845,184 | ) | 722,286 | |||||||||||||
Commitments and contingencies (Note 10) | ||||||||||||||||||||
Stockholders’ / members’ equity | ||||||||||||||||||||
Members’ equity | — | 284,397 | 144,857 | (854 | ) | — | 428,400 | |||||||||||||
Stockholders’ / members’ equity | — | 284,397 | 144,857 | (854 | ) | — | 428,400 | |||||||||||||
Total stockholders’ / members’ equity | — | 284,397 | 144,857 | (854 | ) | — | 428,400 | |||||||||||||
Total liabilities and stockholders’ / members’ equity | $ | — | $ | 908,252 | $ | 1,086,718 | $ | 900 | $ | (845,184 | ) | $ | 1,150,686 | |||||||
Condensed Statements of Cash Flows | Jones Energy, Inc. | |||||||||||||||||||
Consolidated Statements of Cash Flows | ||||||||||||||||||||
Years Ended December 31, 2013 | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
(in thousands of dollars) | JEI(Parent) | Issuers | Guarantor | Non-Guarantor | Eliminations | Consolidated | ||||||||||||||
Subsidiaries | Subsidiaries | |||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income (loss) | $ | (2,186 | ) | $ | (37,047 | ) | $ | 58,705 | $ | (467 | ) | $ | 3,400 | $ | 22,405 | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | 2,286 | (189,393 | ) | 331,265 | 733 | (3,400 | ) | 141,491 | ||||||||||||
Net cash (used in) / provided by operations | 100 | (226,440 | ) | 389,970 | 266 | — | 163,896 | |||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Investment in subsidiary | (172,481 | ) | 172,481 | — | ||||||||||||||||
Additions to oil and gas properties | — | — | (197,618 | ) | (197,618 | ) | ||||||||||||||
Acquisition of properties | — | — | (193,496 | ) | (193,496 | ) | ||||||||||||||
Proceeds from sales of assets | — | — | 963 | 644 | 1,607 | |||||||||||||||
Acquisition of other property, plant and equipment | — | — | (724 | ) | (910 | ) | (1,634 | ) | ||||||||||||
Current period settlements of matured derivative contracts | — | 7,586 | — | — | 7,586 | |||||||||||||||
Change in restricted cash | — | — | (45 | ) | — | (45 | ) | |||||||||||||
Net cash (used in) / provided by investing | (172,481 | ) | 7,586 | (390,920 | ) | (266 | ) | 172,481 | (383,600 | ) | ||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Proceeds from investment by JEI | 172,481 | (172,481 | ) | — | ||||||||||||||||
Proceeds from issuance of long-term debt | — | 220,000 | — | — | 220,000 | |||||||||||||||
Repayment under long-term debt | — | (172,000 | ) | — | — | (172,000 | ) | |||||||||||||
Payment of debt issuance costs | — | (683 | ) | — | — | (683 | ) | |||||||||||||
Proceeds from sale of common stock, net of expenses of $15.1 million | 172,481 | — | — | — | 172,481 | |||||||||||||||
Net cash (used in) provided by financing | 172,481 | 219,798 | — | — | (172,481 | ) | 219,798 | |||||||||||||
Net increase (decrease) in cash | 100 | 944 | (950 | ) | — | — | 94 | |||||||||||||
Cash | ||||||||||||||||||||
Beginning of period | — | 5,056 | 18,600 | 70 | — | 23,726 | ||||||||||||||
End of period | $ | 100 | $ | 6,000 | $ | 17,650 | $ | 70 | — | $ | 23,820 | |||||||||
Jones Energy, Inc. | ||||||||||||||||||||
Consolidated Statements of Cash Flows | ||||||||||||||||||||
Years Ended December 31, 2012 | ||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
(in thousands of dollars) | JEI(Parent) | Issuers | Guarantor | Non-Guarantor | Consolidated | |||||||||||||||
Subsidiaries | Subsidiaries | |||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Net income (loss) | $ | — | $ | (11,057 | ) | $ | 8,857 | $ | (879 | ) | $ | (3,079 | ) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | (283,848 | ) | 370,623 | 854 | 87,629 | |||||||||||||||
Net cash (used in) / provided by operations | — | (294,905 | ) | 379,480 | (25 | ) | 84,550 | |||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Additions to oil and gas properties | — | — | (125,493 | ) | — | (125,493 | ) | |||||||||||||
Acquisition of properties | — | — | (249,007 | ) | — | (249,007 | ) | |||||||||||||
Proceeds from sales of assets | — | — | 9,158 | — | 9,158 | |||||||||||||||
Acquisition of other property, plant and equipment | — | — | (969 | ) | — | (969 | ) | |||||||||||||
Current period settlements of matured derivative contracts | — | 28,675 | — | — | 28,675 | |||||||||||||||
Change in restricted cash | — | — | — | — | — | |||||||||||||||
Net cash (used in) / provided by investing | — | 28,675 | (366,311 | ) | — | (337,636 | ) | |||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Proceeds from issuance of long-term debt | — | 233,243 | — | — | 233,243 | |||||||||||||||
Repayment under long-term debt | — | (38,243 | ) | — | — | (38,243 | ) | |||||||||||||
Payment of debt issuance costs | — | (9,324 | ) | — | — | (9,324 | ) | |||||||||||||
Issuance of preferred units | — | 85,000 | — | — | 85,000 | |||||||||||||||
Net cash provided by financing | — | 270,676 | — | — | 270,676 | |||||||||||||||
Net increase (decrease) in cash | — | 4,446 | 13,169 | (25 | ) | 17,590 | ||||||||||||||
Cash | ||||||||||||||||||||
Beginning of period | — | 610 | 5,431 | 95 | 6,136 | |||||||||||||||
End of period | $ | — | $ | 5,056 | $ | 18,600 | $ | 70 | $ | 23,726 |
Organization_and_Description_o1
Organization and Description of Business (Details) | 12 Months Ended | 0 Months Ended |
Dec. 31, 2013 | Jul. 29, 2013 | |
item | item | |
Organization and description of business | ||
Number of classes of common stock | 2 | |
Number of distinct basins where entity's assets are located | 2 | |
Pre-IPO owners of JEH | ||
Organization and description of business | ||
Exchange ratio | 1 | |
Number of votes for each holder of common stock | 1 | |
JEH | ||
Organization and description of business | ||
Economic interest (as a percent) | 74.70% |
Organization_and_Description_o2
Organization and Description of Business (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Interest expense | $30,774 | $25,292 | $21,994 |
Net income (loss) | 22,405 | -3,079 | 60,326 |
Accrued liabilities | 10,805 | 5,255 | |
Members' equity | 428,400 | ||
Adjustment | |||
Interest expense | 600 | 800 | |
Net income (loss) | -600 | -800 | |
Accrued liabilities | 600 | 800 | |
Members' equity | ($1,400) | ($600) |
Significant_Accounting_Policie3
Significant Accounting Policies (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
item | item | |
Segment Information | ||
Number of industry segments | 1 | |
Number of geographic areas in which the entity operates | 1 | |
Accounts Receivable | ||
Payment period of oil and gas sales, Minimum | 30 days | |
Payment period of oil and gas sales, Maximum | 60 days | |
Period within which joint interest owner obligations becomes due | 30 days | |
Interest charged on past-due balances | 0 | |
Accounts receivable - Oil and gas sales | Credit risk | ||
Concentration of Risk | ||
Concentration risk (as a percent) | 79.00% | 92.00% |
Number of customers | 8 | 8 |
Accounts receivable - Joint interest owners | Credit risk | ||
Concentration of Risk | ||
Concentration risk (as a percent) | 77.00% | 72.00% |
Number of customers | 5 | 5 |
Significant_Accounting_Policie4
Significant Accounting Policies (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
item | |||
Boe | |||
Mineral interests in properties | |||
Unproved | $114,457,000 | $137,254,000 | |
Proved | 958,816,000 | 737,558,000 | |
Wells and equipment and related facilities | 609,748,000 | 389,727,000 | |
Gross oil and gas properties | 1,683,021,000 | 1,264,539,000 | |
Less: Accumulated depletion and impairment | -370,470,000 | -257,195,000 | |
Net oil and gas properties | 1,312,551,000 | 1,007,344,000 | |
Costs capitalized in connection with exploratory wells in progress | 0 | 0 | |
Minimum project period for capitalization of interest on expenditures | 6 months | ||
Number of projects for which interest on expenditure is capitalized | 0 | ||
Amount of capitalized interest on expenditures | 100,000 | ||
Number of cubic feet of gas considered as numerator in calculation of unit conversion ratio | 6,000 | ||
Depletion of oil and gas properties | 113,300,000 | 79,900,000 | 68,200,000 |
Impairment charges of proved oil and natural gas properties and equipment | 0 | 18,800,000 | 19,800,000 |
Impairment charges related to unproved properties | $14,400,000 | $0 | $12,200,000 |
Oil and gas sales | PVR Midstream | |||
Dependence on Major Customers | |||
Concentration risk (as a percent) | 15.00% | 18.00% | 22.00% |
Oil and gas sales | Unimark LLC | |||
Dependence on Major Customers | |||
Concentration risk (as a percent) | 13.00% | 24.00% | 13.00% |
Oil and gas sales | Mercuria | |||
Dependence on Major Customers | |||
Concentration risk (as a percent) | 13.00% | 18.00% | |
Oil and gas sales | Valero Marketing | |||
Dependence on Major Customers | |||
Concentration risk (as a percent) | 13.00% | 9.00% | |
Oil and gas sales | Plains Marketing | |||
Dependence on Major Customers | |||
Concentration risk (as a percent) | 6.00% | 15.00% | 27.00% |
Significant_Accounting_Policie5
Significant Accounting Policies (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
item | |||
Other Property, Plant and Equipment | |||
Gross other property, plant and equipment | $5,430,000 | $5,335,000 | |
Less: Accumulated depreciation and amortization | -1,986,000 | -1,937,000 | |
Net other property, plant and equipment | 3,444,000 | 3,398,000 | |
Depreciation and amortization of other property, plant and equipment | 800,000 | 800,000 | 700,000 |
Oil and Gas Sales Payable | |||
Period of remittance for oil and gas sales payable | 60 days | ||
Asset Retirement Obligations | |||
ARO liability at beginning of year | 9,506,000 | 9,563,000 | |
Liabilities incurred | 1,516,000 | 662,000 | 4,077,000 |
Accretion of discount | 608,000 | 596,000 | |
Liabilities settled due to sale of related properties | -271,000 | -927,000 | |
Liabilities settled due to plugging and abandonment | -702,000 | -388,000 | |
Change in estimate | 307,000 | ||
ARO liability at end of year | 10,963,000 | 9,506,000 | 9,563,000 |
Less: Current portion of ARO at end of year | -2,590,000 | -174,000 | |
Total long-term ARO at end of year | 8,373,000 | 9,332,000 | |
Liabilities incurred related to wells acquired | 824,000 | ||
Tax Receivable Agreement | |||
Cash savings to be paid under tax receivable agreement with JEH and the pre-IPO owners (as a percent) | 85.00% | ||
Benefits of cash savings retained under tax receivable agreement (as a percent) | 15.00% | ||
Liabilities recorded | 0 | ||
Number of exchanges | 0 | ||
Minimum | |||
Other Property, Plant and Equipment | |||
Estimated useful lives | 3 years | ||
Maximum | |||
Other Property, Plant and Equipment | |||
Estimated useful lives | 10 years | ||
Leasehold improvements | |||
Other Property, Plant and Equipment | |||
Gross other property, plant and equipment | 1,060,000 | 983,000 | |
Furniture, fixtures, computers and software | |||
Other Property, Plant and Equipment | |||
Gross other property, plant and equipment | 2,491,000 | 2,204,000 | |
Vehicles | |||
Other Property, Plant and Equipment | |||
Gross other property, plant and equipment | 835,000 | 719,000 | |
Aircraft | |||
Other Property, Plant and Equipment | |||
Gross other property, plant and equipment | 910,000 | 1,295,000 | |
Other | |||
Other Property, Plant and Equipment | |||
Gross other property, plant and equipment | $134,000 | $134,000 |
Significant_Accounting_Policie6
Significant Accounting Policies (Details 4) (USD $) | 12 Months Ended | 0 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 01, 2013 | 7-May-13 |
MMBoe | |||||
Related Party Transactions | |||||
Production of natural gas and NGLs from the Chalker properties (in MMBoe) | 0.8 | ||||
Metalmark | |||||
Related Party Transactions | |||||
Annual administration fee | 0.7 | $0.70 | $0.70 | ||
Number of directors who are managing directors of the related party | 2 | ||||
Metalmark | Minimum | |||||
Related Party Transactions | |||||
Outstanding equity interests held by the related party (as a percent) | 5.00% | ||||
Monarch | |||||
Related Party Transactions | |||||
Initial term of the agreement | 10 years | ||||
Monarch | Metalmark | |||||
Related Party Transactions | |||||
Outstanding equity interests held (as a percent) | 81.00% | ||||
JEH | |||||
Related Party Transactions | |||||
Value of equity interests assigned to Jonny Jones | 2.4 | ||||
Value of equity interests reserved to a benefit plan established for certain of the entity's officers | 2.6 | ||||
Value of remaining equity interests distributed to certain of the pre-IPO owners | 10 | ||||
JEH | Monarch | |||||
Related Party Transactions | |||||
Deemed value of equity interests issued | $15 |
Significant_Accounting_Policie7
Significant Accounting Policies (Details 5) | 0 Months Ended | 12 Months Ended |
Sep. 04, 2013 | Dec. 31, 2013 | |
item | ||
Management incentive plan | JEH | Management units | Common Class B | ||
Stock Compensation | ||
Unvested units and shares | 457,150 | |
Management incentive plan | JEH | Management units | Dual vesting | ||
Stock Compensation | ||
Percentage of units vesting in equal annual installments | 60.00% | |
Vesting term | 5 years | |
Percentage of units vesting upon restructuring event | 40.00% | |
Management incentive plan | JEH | Management units | Single vesting | ||
Stock Compensation | ||
Vesting term | 5 years | |
2013 Omnibus Incentive Plan | Class A common stock | ||
Stock Compensation | ||
Shares reserved (in shares) | 3,850,000 | |
Awards granted (in shares) | 0 | |
2013 Omnibus Incentive Plan | Restricted stock | ||
Stock Compensation | ||
Vesting term | 1 year | |
Number of outside members of the Board of Directors to whom awards were granted | 4 | |
Awards granted, per outside member of the Board of Directors (in shares) | 6,645 |
Acquisition_of_Properties_Deta
Acquisition of Properties (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 18, 2013 | Dec. 31, 2013 | Dec. 20, 2012 | Apr. 14, 2011 | Dec. 31, 2010 | |
Oil and gas properties | ||||||||
Bargain purchase gain | $26,208,000 | |||||||
Post Acquisition | ||||||||
Total operating revenues | 259,169,000 | 149,814,000 | 168,283,000 | |||||
Total operating expenses | 203,417,000 | 144,974,000 | 145,629,000 | |||||
Operating income | 55,752,000 | 4,840,000 | 22,654,000 | |||||
Net income | -2,186,000 | -3,079,000 | 60,326,000 | |||||
Sabine acquisition | ||||||||
Acquisition of Properties | ||||||||
Initial purchase price | 193,500,000 | |||||||
Oil and gas properties | ||||||||
Unproved | 39,596,000 | |||||||
Proved | 154,724,000 | |||||||
Asset retirement obligations | -824,000 | |||||||
Total purchase price | 193,496,000 | |||||||
Purchase price placed in escrow account | 24,000,000 | |||||||
Post Acquisition | ||||||||
Total operating revenues | 1,365,000 | |||||||
Total operating expenses | 291,000 | |||||||
Operating income | 1,074,000 | |||||||
Net income | 1,074,000 | |||||||
Pro Forma | ||||||||
Total operating revenue | 308,773,000 | |||||||
Total operating expenses | 229,648,000 | |||||||
Operating income | 79,125,000 | |||||||
Net income | 45,778,000 | |||||||
Chalker acquisition | ||||||||
Acquisition of Properties | ||||||||
Initial purchase price | 251,900,000 | |||||||
Oil and gas properties | ||||||||
Unproved | 71,264,000 | |||||||
Proved | 182,493,000 | |||||||
Asset retirement obligations | -293,000 | |||||||
Total purchase price | 253,464,000 | |||||||
Post Acquisition | ||||||||
Net income | -2,501,000 | 61,130,000 | ||||||
Pro Forma | ||||||||
Total operating revenue | 194,685,000 | |||||||
Total operating expenses | 161,053,000 | |||||||
Operating income | 33,632,000 | |||||||
Net income | 25,713,000 | |||||||
Oil and natural gas properties located in Oklahoma | ||||||||
Acquisition of Properties | ||||||||
Initial purchase price | 154,100,000 | |||||||
Oil and gas properties | ||||||||
Unproved | 26,200,000 | |||||||
Proved | 154,100,000 | |||||||
Oil and gas properties | 154,225,000 | |||||||
Asset retirement obligations | -167,000 | |||||||
Total purchase price | 154,058,000 | |||||||
Total fair value | 180,300,000 | |||||||
Bargain purchase gain | 26,200,000 | |||||||
Ownership interest in the undeveloped properties (as a percent) | 50.00% | |||||||
Post Acquisition | ||||||||
Net income | 61,130,000 | 24,780,000 | ||||||
Pro Forma | ||||||||
Total operating revenue | 176,884,000 | |||||||
Total operating expenses | 150,197,000 | |||||||
Operating income | 26,687,000 | |||||||
Net income | $62,408,000 |
Fair_Value_Measurement_Details
Fair Value Measurement (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value Measurements | ||
Current assets | $8,837 | $17,648 |
Long-term assets | 25,398 | 25,199 |
Current liabilities | 10,664 | 4,035 |
Long-term liabilities | 190 | 7,657 |
Level 2 | Commodity Price Hedges | ||
Fair Value Measurements | ||
Current assets | 8,837 | 17,648 |
Long-term assets | 25,967 | 24,756 |
Current liabilities | 10,188 | 2,992 |
Long-term liabilities | 6,739 | |
Level 3 | Commodity Price Hedges | ||
Fair Value Measurements | ||
Long-term assets | -569 | 443 |
Current liabilities | 476 | 1,043 |
Long-term liabilities | 190 | 918 |
Total | Commodity Price Hedges | ||
Fair Value Measurements | ||
Current assets | 8,837 | 17,648 |
Long-term assets | 25,398 | 25,199 |
Current liabilities | 10,664 | 4,035 |
Long-term liabilities | $190 | $7,657 |
Fair_Value_Measurement_Details1
Fair Value Measurement (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Natural gas liquid | Swap | Minimum | ||
Quantitative Information About Level 3 Fair Value Measurements | ||
Swap price (in dollars per barrel/mmbtu) | 6.72 | 6.72 |
Natural gas liquid | Swap | Maximum | ||
Quantitative Information About Level 3 Fair Value Measurements | ||
Swap price (in dollars per barrel/mmbtu) | 95.24 | 97.13 |
Commodity derivatives | ||
Quantitative Information About Level 3 Fair Value Measurements | ||
Fair Value | $14,347 | $17,928 |
Discounted cash flow approach | Level 3 | Commodity derivatives | Natural gas liquid | Swap | ||
Quantitative Information About Level 3 Fair Value Measurements | ||
Fair Value | ($1,235) | |
Discounted cash flow approach | Level 3 | Commodity derivatives | Natural gas liquid | Swap | Minimum | ||
Quantitative Information About Level 3 Fair Value Measurements | ||
Swap price (in dollars per barrel/mmbtu) | 9.24 | |
Discounted cash flow approach | Level 3 | Commodity derivatives | Natural gas liquid | Swap | Maximum | ||
Quantitative Information About Level 3 Fair Value Measurements | ||
Swap price (in dollars per barrel/mmbtu) | 83.06 |
Fair_Value_Measurement_Details2
Fair Value Measurement (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
item | |||
Changes in fair value of Level 3 instruments | |||
Balance at the beginning of the period | ($1,519,000) | ($2,083,000) | |
Purchases | -1,095,000 | -2,352,000 | |
Settlements | -210,000 | ||
Transfer to Level 2 | -753,000 | 2,370,000 | |
Transfers to Level 3 | 834,000 | ||
Changes in fair value | 2,342,000 | -288,000 | |
Balance at the end of the period | -1,235,000 | -1,519,000 | -2,083,000 |
Offsetting Assets and Liabilities | |||
Number of counterparties to commodity derivative contracts | 6 | ||
Nonfinancial Assets and Liabilities | |||
Impairment of proved properties | 0 | 18,800,000 | 19,800,000 |
Impairment of unproved properties | 14,400,000 | 0 | 12,200,000 |
Commodity derivatives | |||
Assets | |||
Gross Amounts of Recognized Assets / Liabilities | 38,071,000 | 49,200,000 | |
Gross Amounts Offset in the Balance Sheet | -6,035,000 | -7,831,000 | |
Net Amounts of Assets Presented in the Balance Sheet | 32,036,000 | 41,369,000 | |
Gross Amounts Not Offset in the Balance Sheet | 2,199,000 | 1,478,000 | |
Net Amount | 34,235,000 | 42,847,000 | |
Liabilities | |||
Gross Amounts of Recognized Assets | -14,347,000 | -17,928,000 | |
Gross Amounts Offset in the Balance Sheet | 6,035,000 | 7,831,000 | |
Net Amounts of Assets Presented in the Balance Sheet | -8,312,000 | -10,097,000 | |
Gross Amounts Not Offset in the Balance Sheet | -2,542,000 | -1,595,000 | |
Net Amount | ($10,854,000) | ($11,692,000) |
Derivative_Instruments_and_Hed2
Derivative Instruments and Hedging Activities (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Basis swaps | Low | |||
Derivative instruments and hedging activities | |||
Nonmonetary notional amount | 320,000 | 320,000 | |
Contract differential (in dollars per mmbtu) | -0.43 | -0.65 | |
Basis swaps | High | |||
Derivative instruments and hedging activities | |||
Nonmonetary notional amount | 690,000 | 850,000 | |
Contract differential (in dollars per mmbtu) | -0.11 | -0.03 | |
Basis swaps | Weighted Average | |||
Derivative instruments and hedging activities | |||
Nonmonetary notional amount | 467,037 | 484,615 | |
Contract differential (in dollars per mmbtu) | -0.34 | -0.31 | |
Oil | Swaps | Low | |||
Derivative instruments and hedging activities | |||
Exercise price (in dollars per barrels) | 81.7 | 81 | |
Nonmonetary notional amount | 29,000 | 24,000 | |
Oil | Swaps | High | |||
Derivative instruments and hedging activities | |||
Exercise price (in dollars per barrels) | 102.84 | 104.45 | |
Nonmonetary notional amount | 161,613 | 143,116 | |
Oil | Swaps | Weighted Average | |||
Derivative instruments and hedging activities | |||
Exercise price (in dollars per barrels) | 89.03 | 89.6 | |
Nonmonetary notional amount | 96,149 | 89,323 | |
Natural gas | Swaps | Low | |||
Derivative instruments and hedging activities | |||
Exercise price (in dollars per mmbtu) | 3.88 | 3.52 | |
Nonmonetary notional amount | 510,000 | 430,000 | |
Natural gas | Swaps | High | |||
Derivative instruments and hedging activities | |||
Exercise price (in dollars per mmbtu) | 6.9 | 6.9 | |
Nonmonetary notional amount | 1,290,000 | 1,110,000 | |
Natural gas | Swaps | Weighted Average | |||
Derivative instruments and hedging activities | |||
Exercise price (in dollars per mmbtu) | 4.26 | 4.96 | |
Nonmonetary notional amount | 830,275 | 767,053 | |
Natural gas liquids | Swaps | Low | |||
Derivative instruments and hedging activities | |||
Exercise price (in dollars per barrels) | 6.72 | 6.72 | |
Nonmonetary notional amount | 2,000 | 2,000 | |
Natural gas liquids | Swaps | High | |||
Derivative instruments and hedging activities | |||
Exercise price (in dollars per barrels) | 95.24 | 97.13 | |
Nonmonetary notional amount | 118,000 | 144,973 | |
Natural gas liquids | Swaps | Weighted Average | |||
Derivative instruments and hedging activities | |||
Exercise price (in dollars per barrels) | 32.98 | 33.81 | |
Nonmonetary notional amount | 46,646 | 55,616 | |
Commodity derivatives | |||
Derivative instruments and hedging activities | |||
Net gains (Loss) recognized on derivative instruments | ($2.60) | $16.70 | $34.50 |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2009 | Dec. 19, 2013 | Jun. 12, 2013 |
item | item | |||||
Credit agreements | ||||||
Number of credit agreements | 2 | 2 | ||||
Total interest and commitment fees | $27 | $21.20 | $18.20 | |||
Revolver | ||||||
Credit agreements | ||||||
Borrowing base | 575 | 500 | ||||
Frequency of interest payments | 3 months | |||||
Average interest rates (as a percent) | 3.01% | 3.30% | ||||
Average outstanding balance | 384.9 | 306.8 | ||||
Repayment of borrowings | 167 | |||||
Revolver | Base rate | ||||||
Credit agreements | ||||||
Reference rate | base rate (LIBOR or prime) | |||||
Revolver | Base rate | Minimum | ||||||
Credit agreements | ||||||
Margin interest rate (as a percent) | 0.50% | |||||
Revolver | Base rate | Maximum | ||||||
Credit agreements | ||||||
Margin interest rate (as a percent) | 2.50% | |||||
Term Loan | ||||||
Credit agreements | ||||||
Frequency of interest payments | 3 months | |||||
Average outstanding balance | $160 | $121.30 | ||||
Average interest rate (as a percent) | 9.19% | 9.16% | ||||
Term Loan | Base rate | ||||||
Credit agreements | ||||||
Reference rate | base rate (LIBOR, prime, or federal funds) | |||||
Term Loan | Base rate | Minimum | ||||||
Credit agreements | ||||||
Margin interest rate (as a percent) | 6.00% | |||||
Term Loan | Base rate | Maximum | ||||||
Credit agreements | ||||||
Margin interest rate (as a percent) | 7.00% |
Stockbased_Compensation_Detail
Stock-based Compensation (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 04, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | ||||
Non-employee members of Board Of Directors | Restricted stock | ||||
Units/ Awards | ||||
Granted (in shares) | 27 | |||
Unvested at the end of the period (in shares) | 27 | |||
Weighted Average Grant Date Fair Value per Share | ||||
Granted (in dollars per share) | $15.05 | |||
Unvested at the end of the period (in dollars per share) | $15.05 | |||
Non-employee members of Board Of Directors | Class A common stock | Restricted stock | ||||
Weighted Average Grant Date Fair Value per Share | ||||
Number of non-employee members of the Board of Directors to whom awards were granted | 4 | |||
Awards granted to each non-employee director (in shares) | 6,645 | |||
Service period from date of grant | 1 year | |||
Non-employee members of Board Of Directors | General and administrative expenses | Restricted stock | ||||
Weighted Average Grant Date Fair Value per Share | ||||
Stock compensation expense | $0.10 | |||
Management incentive plan | Management units | JEH | Common Class B | ||||
Units/ Awards | ||||
Unvested at the end of the period (in shares) | 457,150 | |||
Management incentive plan | Management units | JEH | General and administrative expenses | ||||
Weighted Average Grant Date Fair Value per Share | ||||
Stock compensation expense | $10.70 | $0.60 | $1.10 | |
Management incentive plan | Management units | JEH | Management | ||||
Units/ Awards | ||||
Unvested at the beginning of the period (in shares) | 710,767 | |||
Granted (in shares) | 911,654 | |||
Forfeited (in shares) | -167,239 | |||
Vested (in shares) | -998,032 | |||
Unvested at the end of the period (in shares) | 457,150 | |||
Weighted Average Grant Date Fair Value per Share | ||||
Unvested at the beginning of the period (in dollars per share) | $3.62 | |||
Granted (in dollars per share) | $15 | |||
Forfeited (in dollars per share) | $3.62 | |||
Vested (in dollars per share) | $9.96 | |||
Unvested at the end of the period (in dollars per share) | $12.46 |
Earnings_per_Share_Details
Earnings per Share (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income (numerator): | |||
Net income (loss) applicable to controlling interests | ($2,186) | ($3,079) | $60,326 |
Weighted-average shares (denominator): | |||
Weighted-average number of shares of Class A common stock - basic and diluted | 12,500 | ||
Earnings (loss) per share: | |||
Basic and diluted (in dollars per share) | ($0.17) | ||
Anti-dilutive restricted shares of Class A common stock | 27 |
Monarch_Investment_Details
Monarch Investment (Details) (USD $) | 12 Months Ended | 0 Months Ended |
Dec. 31, 2013 | 7-May-13 | |
Monarch Investment | ||
Compensation expense recognized under management distributions and incentive plan | $2,719,000 | |
Deferred revenue recorded | 14,531,000 | |
Equity interests issued to the Company in connection with the marketing agreement | ||
Monarch Investment | ||
Compensation expense recognized under management distributions and incentive plan | 300,000 | |
Deferred revenue recorded | 15,000,000 | |
Equity interests issued to the Company in connection with the marketing agreement | Equity interests | Monarch Natural Gas Holdings, LLC | ||
Monarch Investment | ||
Equity interests distributed to the entity's owners (as a percent) | 67.00% | |
Equity interests distributed to the entity's owners | 10,000,000 | |
Equity interests distributed to a member of management (as a percent) | 16.00% | |
Equity interests reserved for distribution to management through incentive plan (as a percent) | 17.00% | |
Monarch | ||
Monarch Investment | ||
Amortization of deferred revenue | 500,000 | |
Monarch | Equity interests issued to the Company in connection with the marketing agreement | Equity interests | Monarch Natural Gas Holdings, LLC | ||
Monarch Investment | ||
Estimated fair value of equity interests issued to the entity | $15,000,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
sqft | |||
Commitments and Contingencies | |||
Leased area of office space in Austin, TX (in square feet) | 31,000 | ||
Future minimum payments for noncancellable operating leases | |||
2014 | $586,000 | ||
2015 | 482,000 | ||
2016 | 458,000 | ||
2017 | 147,000 | ||
Total | 1,673,000 | ||
Rent expense under operating leases | $800,000 | $800,000 | $700,000 |
Benefit_Plans_Details
Benefit Plans (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Benefit Plans | ||
Amount contributed to the Plan | $0.30 | $0.20 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Current tax expense | |||
Federal | $85,000 | ||
Total current expense | 85,000 | ||
Deferred tax expense (benefit) | |||
Federal | -1,260,000 | ||
State | 1,104,000 | 473,000 | 173,000 |
Total deferred expense (benefit) | -156,000 | 473,000 | 173,000 |
Total income tax provision | -71,000 | 473,000 | 173,000 |
Tax benefit attributable to controlling interests | -1,223,000 | ||
Tax expense attributable to non-controlling interests | 1,152,000 | 473,000 | 173,000 |
Provision calculated at federal statutory income tax rate: | |||
Net income before taxes | 22,334,000 | -2,606,000 | 60,499,000 |
Statutory rate (as a percent) | 35.00% | ||
Income tax expense computed at statutory rate | 7,817,000 | ||
Less: Noncontrolling interests | -9,009,000 | ||
Income tax benefit attributable to Jones Energy, Inc. | -1,192,000 | ||
State and local income taxes, net of federal benefit | -49,000 | ||
Other | 18,000 | ||
Tax benefit attributable to Jones Energy, Inc. | -1,223,000 | ||
Tax expense attributable to non-controlling interest | 1,152,000 | 473,000 | 173,000 |
Total income tax provision | -71,000 | 473,000 | 173,000 |
Deferred tax assets | |||
Investment in consolidated subsidiary JEH | 526,000 | ||
Net operating loss | 649,000 | ||
Alternative minimum tax credits | 86,000 | ||
State deferred tax asset | 52,000 | ||
Total deferred tax assets | 1,313,000 | ||
Deferred tax liabilities | |||
State deferred tax liability | 3,093,000 | 1,936,000 | |
Total deferred tax liabilities | 3,093,000 | 1,936,000 | |
Net deferred tax assets (liabilities) | -1,780,000 | -1,936,000 | |
Net deferred tax assets (liabilities) | -1,780,000 | -1,936,000 | |
Federal | |||
Operating loss carry-forward | |||
Net operating loss carry-forward | 1,800,000 | ||
State | |||
Operating loss carry-forward | |||
Net operating loss carry-forward | $400,000 |
Subsidiary_Guarantors_Details
Subsidiary Guarantors (Details) (Senior notes, 2022 Notes, Subsequent events, USD $) | Apr. 01, 2014 |
In Millions, unless otherwise specified | |
Senior notes | 2022 Notes | Subsequent events | |
Subsidiary Guarantors | |
Issuance of debt | $550 |
Stated interest rate (as a percent) | 6.75% |
Subsidiary_Guarantors_Details_
Subsidiary Guarantors (Details 2) | 5 Months Ended |
Dec. 31, 2013 | |
item | |
Subsidiary Guarantors | |
Classes of stock, number | 2 |
Class A common stock | |
Subsidiary Guarantors | |
Economic interests | 100.00% |
Votes per share entitled to stockholders | 1 |
Class B common stock | |
Subsidiary Guarantors | |
Economic interests | 0.00% |
Votes per share entitled to stockholders | 1 |
Issuers | |
Subsidiary Guarantors | |
Economic interest | 25.30% |
Existing Owners | Class A common stock | |
Subsidiary Guarantors | |
Ratio in which JEH Units and Class B common stock is exchanged for Class A common stock | 1 |
Issuers | Guarantor Subsidiaries | |
Subsidiary Guarantors | |
Ownership percentage in subsidiary guarantors | 100.00% |
Existing Owners | Issuers | |
Subsidiary Guarantors | |
Economic interest (as a percent) | 74.70% |
Subsidiary_Guarantors_Details_1
Subsidiary Guarantors (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating revenues | |||
Oil and gas sales | $258,063 | $148,967 | $167,261 |
Other revenues | 1,106 | 847 | 1,022 |
Total operating revenues | 259,169 | 149,814 | 168,283 |
Operating costs and expenses | |||
Lease operating | 27,781 | 23,097 | 21,548 |
Production taxes | 12,865 | 5,583 | 5,333 |
Exploration | 1,710 | 356 | 780 |
Depletion, depreciation and amortization | 114,136 | 80,709 | 68,906 |
Impairment of oil and gas properties | 14,415 | 18,821 | 31,970 |
Accretion of discount | 608 | 533 | 413 |
General and administrative (including non-cash compensation expense) | 31,902 | 15,875 | 16,679 |
Total operating expenses | 203,417 | 144,974 | 145,629 |
Operating income | 55,752 | 4,840 | 22,654 |
Other income (expense) | |||
Interest expense | -30,774 | -25,292 | -21,994 |
Net gain (loss) on commodity derivatives | -2,566 | 16,684 | 34,490 |
Gain on bargain purchase | 26,208 | ||
Gain (loss) on sales of assets | -78 | 1,162 | -859 |
Other income (expense), net | -33,418 | -7,446 | 37,845 |
Income (loss) before income tax | 22,334 | -2,606 | 60,499 |
Income tax provision | |||
Current | 85 | ||
Deferred | -156 | 473 | 173 |
Total income tax provision | -71 | 473 | 173 |
Net income (loss) | 22,405 | -3,079 | 60,326 |
Net income attributable to non-controlling interests | 24,591 | ||
Net income (loss) attributable to controlling interests | -2,186 | -3,079 | 60,326 |
Eliminations | |||
Other income (expense) | |||
Equity interest in Income | 3,400 | ||
Income tax provision | |||
Net income (loss) | 3,400 | ||
Net income attributable to non-controlling interests | 24,591 | ||
JEI (Parent) | |||
Other income (expense) | |||
Equity interest in Income | -3,400 | ||
Income tax provision | |||
Current | 85 | ||
Deferred | -1,299 | ||
Total income tax provision | -1,214 | ||
Net income (loss) | -2,186 | ||
Net income (loss) attributable to controlling interests | -2,186 | ||
Issuers | |||
Operating revenues | |||
Other revenues | 469 | ||
Total operating revenues | 469 | ||
Operating costs and expenses | |||
General and administrative (including non-cash compensation expense) | 4,154 | 2,589 | |
Total operating expenses | 4,154 | 2,589 | |
Operating income | -3,685 | -2,589 | |
Other income (expense) | |||
Interest expense | -29,653 | -24,679 | |
Net gain (loss) on commodity derivatives | -2,566 | 16,684 | |
Other income (expense), net | -32,219 | -7,995 | |
Income (loss) before income tax | -35,904 | -10,584 | |
Income tax provision | |||
Deferred | 1,143 | 473 | |
Total income tax provision | 1,143 | 473 | |
Net income (loss) | -37,047 | -11,057 | |
Net income (loss) attributable to controlling interests | -11,057 | ||
Guarantor Subsidiaries | |||
Operating revenues | |||
Oil and gas sales | 258,063 | 148,967 | |
Other revenues | 637 | 847 | |
Total operating revenues | 258,700 | 149,814 | |
Operating costs and expenses | |||
Lease operating | 27,781 | 23,097 | |
Production taxes | 12,865 | 5,583 | |
Exploration | 1,710 | 356 | |
Depletion, depreciation and amortization | 114,046 | 80,554 | |
Impairment of oil and gas properties | 14,415 | 18,821 | |
Accretion of discount | 608 | 533 | |
General and administrative (including non-cash compensation expense) | 27,490 | 12,562 | |
Total operating expenses | 198,915 | 141,506 | |
Operating income | 59,785 | 8,308 | |
Other income (expense) | |||
Interest expense | -1,121 | -613 | |
Gain (loss) on sales of assets | 41 | 1,162 | |
Other income (expense), net | -1,080 | 549 | |
Income (loss) before income tax | 58,705 | 8,857 | |
Income tax provision | |||
Net income (loss) | 58,705 | 8,857 | |
Net income (loss) attributable to controlling interests | 8,857 | ||
Non-Guarantor Subsidiaries | |||
Operating costs and expenses | |||
Depletion, depreciation and amortization | 90 | 155 | |
General and administrative (including non-cash compensation expense) | 258 | 724 | |
Total operating expenses | 348 | 879 | |
Operating income | -348 | -879 | |
Other income (expense) | |||
Gain (loss) on sales of assets | -119 | ||
Other income (expense), net | -119 | ||
Income (loss) before income tax | -467 | -879 | |
Income tax provision | |||
Net income (loss) | -467 | -879 | |
Net income (loss) attributable to controlling interests | ($879) |
Subsidiary_Guarantors_Details_2
Subsidiary Guarantors (Details 4) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, except Share data, unless otherwise specified | ||||
Current assets | ||||
Cash | $23,820 | $23,726 | ||
Restricted Cash | 45 | |||
Accounts receivable, net | ||||
Oil and gas sales | 51,233 | 29,684 | ||
Joint interest owners | 42,481 | 21,876 | ||
Other | 1,459 | 4,590 | ||
Commodity derivative assets | 8,837 | 17,648 | ||
Other current assets | 2,392 | 1,088 | ||
Deferred tax assets | 12 | |||
Total current assets | 130,279 | 98,612 | ||
Oil and gas properties, net, at cost under the successful efforts method | 1,312,551 | 1,007,344 | ||
Other property, plant and equipment, net | 3,444 | 3,398 | ||
Commodity derivative assets | 25,398 | 25,199 | ||
Other assets | 15,006 | 16,133 | ||
Deferred tax assets | 1,301 | |||
Total assets | 1,487,979 | 1,150,686 | ||
Current liabilities | ||||
Trade accounts payable | 89,430 | 38,036 | ||
Oil and gas sales payable | 66,179 | 45,860 | ||
Accrued liabilities | 10,805 | 5,255 | ||
Commodity derivative liabilities | 10,664 | 4,035 | ||
Deferred tax liabilities | 61 | |||
Asset retirement obligations | 2,590 | 174 | ||
Total current liabilities | 179,668 | 93,421 | ||
Long-term debt | 658,000 | 610,000 | ||
Deferred revenue | 14,531 | |||
Commodity derivative liabilities | 190 | 7,657 | ||
Asset retirement obligations | 8,373 | 9,332 | ||
Deferred tax liabilities | 3,093 | 1,876 | ||
Total liabilities | 863,855 | 722,286 | ||
Commitments and contingencies (Note 10) | ||||
Stockholders' / members' equity | ||||
Members' equity | 428,400 | |||
Additional paid-in-capital | 173,169 | |||
Retained earnings (deficit) | -2,186 | |||
Stockholders' / members' equity | 171,033 | 428,400 | ||
Non-controlling interest | 453,091 | |||
Total stockholders' / members' equity | 624,124 | 428,400 | 345,909 | 284,449 |
Total liabilities and stockholders' / members' equity | 1,487,979 | 1,150,686 | ||
Class A common stock | ||||
Stockholders' / members' equity | ||||
Common stock | 13 | |||
Common Stock, par value (in dollars per share) | $0.00 | |||
Common Stock, shares issued | 12,526,580 | |||
Common Stock, shares outstanding | 12,526,580 | |||
Class B common stock | ||||
Stockholders' / members' equity | ||||
Common stock | 37 | |||
Common Stock, par value (in dollars per share) | $0.00 | |||
Common Stock, shares issued | 36,836,333 | |||
Common Stock, shares outstanding | 36,836,333 | |||
Eliminations | ||||
Accounts receivable, net | ||||
Intercompany receivable | -1,052,027 | -845,184 | ||
Total current assets | -1,052,027 | -845,184 | ||
Investment in Subsidiaries | -169,081 | |||
Total assets | -1,221,108 | -845,184 | ||
Current liabilities | ||||
Intercompany payable | -1,054,214 | -845,184 | ||
Total current liabilities | -1,054,214 | -845,184 | ||
Total liabilities | -1,054,214 | -845,184 | ||
Commitments and contingencies (Note 10) | ||||
Stockholders' / members' equity | ||||
Members' equity | -619,985 | |||
Stockholders' / members' equity | -619,985 | |||
Non-controlling interest | 453,091 | |||
Total stockholders' / members' equity | -166,894 | |||
Total liabilities and stockholders' / members' equity | -1,221,108 | -845,184 | ||
JEI (Parent) | ||||
Current assets | ||||
Cash | 100 | |||
Accounts receivable, net | ||||
Intercompany receivable | 638 | |||
Total current assets | 738 | |||
Investment in Subsidiaries | 169,081 | |||
Deferred tax assets | 1,301 | |||
Total assets | 171,120 | |||
Current liabilities | ||||
Accrued liabilities | 87 | |||
Total current liabilities | 87 | |||
Total liabilities | 87 | |||
Commitments and contingencies (Note 10) | ||||
Stockholders' / members' equity | ||||
Additional paid-in-capital | 173,169 | |||
Retained earnings (deficit) | -2,186 | |||
Stockholders' / members' equity | 171,033 | |||
Total stockholders' / members' equity | 171,033 | |||
Total liabilities and stockholders' / members' equity | 171,120 | |||
JEI (Parent) | Class A common stock | ||||
Stockholders' / members' equity | ||||
Common stock | 13 | |||
Common Stock, par value (in dollars per share) | $0.00 | |||
Common Stock, shares issued | 12,526,580 | |||
Common Stock, shares outstanding | 12,526,580 | |||
JEI (Parent) | Class B common stock | ||||
Stockholders' / members' equity | ||||
Common stock | 37 | |||
Common Stock, par value (in dollars per share) | $0.00 | |||
Common Stock, shares issued | 36,836,333 | |||
Common Stock, shares outstanding | 36,836,333 | |||
Issuers | ||||
Current assets | ||||
Cash | 6,000 | 5,056 | ||
Accounts receivable, net | ||||
Other | 1,719 | |||
Commodity derivative assets | 8,837 | 17,648 | ||
Other current assets | 387 | |||
Deferred tax assets | 12 | |||
Intercompany receivable | 1,051,389 | 845,184 | ||
Total current assets | 1,066,625 | 869,607 | ||
Commodity derivative assets | 25,398 | 25,199 | ||
Other assets | 14,072 | 13,446 | ||
Total assets | 1,106,095 | 908,252 | ||
Current liabilities | ||||
Trade accounts payable | 230 | 116 | ||
Accrued liabilities | 1,642 | 110 | ||
Commodity derivative liabilities | 10,664 | 4,035 | ||
Deferred tax liabilities | 61 | |||
Total current liabilities | 12,536 | 4,322 | ||
Long-term debt | 658,000 | 610,000 | ||
Deferred revenue | 14,531 | |||
Commodity derivative liabilities | 190 | 7,657 | ||
Deferred tax liabilities | 3,093 | 1,876 | ||
Total liabilities | 688,350 | 623,855 | ||
Commitments and contingencies (Note 10) | ||||
Stockholders' / members' equity | ||||
Members' equity | 417,745 | 284,397 | ||
Stockholders' / members' equity | 417,745 | 284,397 | ||
Total stockholders' / members' equity | 417,745 | 284,397 | ||
Total liabilities and stockholders' / members' equity | 1,106,095 | 908,252 | ||
Guarantor Subsidiaries | ||||
Current assets | ||||
Cash | 17,650 | 18,600 | ||
Restricted Cash | 45 | |||
Accounts receivable, net | ||||
Oil and gas sales | 51,233 | 29,684 | ||
Joint interest owners | 42,481 | 21,876 | ||
Other | 1,459 | 2,871 | ||
Other current assets | 2,005 | |||
Deferred tax assets | 1,088 | |||
Total current assets | 114,873 | 74,119 | ||
Oil and gas properties, net, at cost under the successful efforts method | 1,312,551 | 1,007,344 | ||
Other property, plant and equipment, net | 2,557 | 2,568 | ||
Other assets | 934 | 2,687 | ||
Total assets | 1,430,915 | 1,086,718 | ||
Current liabilities | ||||
Trade accounts payable | 89,200 | 37,920 | ||
Oil and gas sales payable | 66,179 | 45,860 | ||
Accrued liabilities | 9,076 | 5,145 | ||
Asset retirement obligations | 2,590 | 174 | ||
Intercompany payable | 1,051,935 | 843,430 | ||
Total current liabilities | 1,218,980 | 932,529 | ||
Asset retirement obligations | 8,373 | 9,332 | ||
Total liabilities | 1,227,353 | 941,861 | ||
Commitments and contingencies (Note 10) | ||||
Stockholders' / members' equity | ||||
Members' equity | 203,562 | 144,857 | ||
Stockholders' / members' equity | 203,562 | 144,857 | ||
Total stockholders' / members' equity | 203,562 | 144,857 | ||
Total liabilities and stockholders' / members' equity | 1,430,915 | 1,086,718 | ||
Non-Guarantor Subsidiaries | ||||
Current assets | ||||
Cash | 70 | 70 | ||
Accounts receivable, net | ||||
Total current assets | 70 | 70 | ||
Other property, plant and equipment, net | 887 | 830 | ||
Total assets | 957 | 900 | ||
Current liabilities | ||||
Intercompany payable | 2,279 | 1,754 | ||
Total current liabilities | 2,279 | 1,754 | ||
Total liabilities | 2,279 | 1,754 | ||
Commitments and contingencies (Note 10) | ||||
Stockholders' / members' equity | ||||
Members' equity | -1,322 | -854 | ||
Stockholders' / members' equity | -1,322 | -854 | ||
Total stockholders' / members' equity | -1,322 | -854 | ||
Total liabilities and stockholders' / members' equity | $957 | $900 |
Subsidiary_Guarantors_Details_3
Subsidiary Guarantors (Details 5) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Cash flows from operating activities | |||
Net income (loss) | $22,405,000 | ($3,079,000) | $60,326,000 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | 141,491,000 | 87,629,000 | |
Net cash provided by operations | 163,896,000 | 84,550,000 | 120,217,000 |
Cash flows from investing activities | |||
Additions to oil and gas properties | -197,618,000 | -125,493,000 | -157,046,000 |
Acquisition of properties | -193,496,000 | -249,007,000 | -168,480,000 |
Proceeds from sales of assets | 1,607,000 | 9,158,000 | 6,747,000 |
Acquisition of other property, plant and equipment | -1,634,000 | -969,000 | -1,735,000 |
Current period settlements of matured derivative contracts | 7,586,000 | 28,675,000 | 1,551,000 |
Change in restricted cash | -45,000 | ||
Net cash (used in) / provided by investing | -383,600,000 | -337,636,000 | -318,963,000 |
Cash flows from financing activities | |||
Proceeds from issuance of long-term debt | 220,000,000 | 233,243,000 | 316,500,000 |
Repayment under long-term debt | -172,000,000 | -38,243,000 | -126,500,000 |
Payment of debt issuance costs | -683,000 | -9,324,000 | -3,678,000 |
Issuance of preferred units | 85,000,000 | ||
Proceeds from sale of common stock, net of expenses of $15.1 million | 172,481,000 | ||
Net cash provided by financing | 219,798,000 | 270,676,000 | 186,322,000 |
Net increase (decrease) in cash | 94,000 | 17,590,000 | -12,424,000 |
Cash | |||
Beginning of period | 23,726,000 | 6,136,000 | 18,560,000 |
End of period | 23,820,000 | 23,726,000 | 6,136,000 |
Payment of stock issuance expenses | 15,100,000 | ||
Eliminations | |||
Cash flows from operating activities | |||
Net income (loss) | 3,400,000 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | -3,400,000 | ||
Cash flows from investing activities | |||
Investment in subsidiary | 172,481,000 | ||
Net cash (used in) / provided by investing | 172,481,000 | ||
Cash flows from financing activities | |||
Proceeds from investment by JEI | -172,481,000 | ||
Net cash provided by financing | -172,481,000 | ||
JEI (Parent) | |||
Cash flows from operating activities | |||
Net income (loss) | -2,186,000 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | 2,286,000 | ||
Net cash provided by operations | 100,000 | ||
Cash flows from investing activities | |||
Investment in subsidiary | -172,481,000 | ||
Net cash (used in) / provided by investing | -172,481,000 | ||
Cash flows from financing activities | |||
Proceeds from sale of common stock, net of expenses of $15.1 million | 172,481,000 | ||
Net cash provided by financing | 172,481,000 | ||
Net increase (decrease) in cash | 100,000 | ||
Cash | |||
End of period | 100,000 | ||
Payment of stock issuance expenses | 15,100,000 | ||
Issuers | |||
Cash flows from operating activities | |||
Net income (loss) | -37,047,000 | -11,057,000 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | -189,393,000 | -283,848,000 | |
Net cash provided by operations | -226,440,000 | -294,905,000 | |
Cash flows from investing activities | |||
Current period settlements of matured derivative contracts | 7,586,000 | 28,675,000 | |
Net cash (used in) / provided by investing | 7,586,000 | 28,675,000 | |
Cash flows from financing activities | |||
Proceeds from investment by JEI | 172,481,000 | ||
Proceeds from issuance of long-term debt | 220,000,000 | 233,243,000 | |
Repayment under long-term debt | -172,000,000 | -38,243,000 | |
Payment of debt issuance costs | -683,000 | -9,324,000 | |
Issuance of preferred units | 85,000,000 | ||
Net cash provided by financing | 219,798,000 | 270,676,000 | |
Net increase (decrease) in cash | 944,000 | 4,446,000 | |
Cash | |||
Beginning of period | 5,056,000 | 610,000 | |
End of period | 6,000,000 | 5,056,000 | |
Guarantor Subsidiaries | |||
Cash flows from operating activities | |||
Net income (loss) | 58,705,000 | 8,857,000 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | 331,265,000 | 370,623,000 | |
Net cash provided by operations | 389,970,000 | 379,480,000 | |
Cash flows from investing activities | |||
Additions to oil and gas properties | -197,618,000 | -125,493,000 | |
Acquisition of properties | -193,496,000 | -249,007,000 | |
Proceeds from sales of assets | 963,000 | 9,158,000 | |
Acquisition of other property, plant and equipment | -724,000 | -969,000 | |
Change in restricted cash | -45,000 | ||
Net cash (used in) / provided by investing | -390,920,000 | -366,311,000 | |
Cash flows from financing activities | |||
Net increase (decrease) in cash | -950,000 | 13,169,000 | |
Cash | |||
Beginning of period | 18,600,000 | 5,431,000 | |
End of period | 17,650,000 | 18,600,000 | |
Non-Guarantor Subsidiaries | |||
Cash flows from operating activities | |||
Net income (loss) | -467,000 | -879,000 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | 733,000 | 854,000 | |
Net cash provided by operations | 266,000 | -25,000 | |
Cash flows from investing activities | |||
Acquisition of properties | 644,000 | ||
Acquisition of other property, plant and equipment | -910,000 | ||
Net cash (used in) / provided by investing | -266,000 | ||
Cash flows from financing activities | |||
Net increase (decrease) in cash | -25,000 | ||
Cash | |||
Beginning of period | 70,000 | 95,000 | |
End of period | $70,000 | $70,000 |