Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 13, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | MRD | |
Entity Registrant Name | MEMORIAL RESOURCE DEVELOPMENT CORP. | |
Entity Central Index Key | 1,599,222 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 206,038,313 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 10 | $ 0 |
Accounts receivable | 62,174 | 52,691 |
Short-term derivative instruments | 98,594 | 227,991 |
Other financial instruments (Note 6) | 27,253 | 46,106 |
Prepaid expenses and other current assets | 3,381 | 3,375 |
Assets of discontinued operation (Note 3) | 0 | 345,541 |
Total current assets | 191,412 | 675,704 |
Property and equipment, at cost: | ||
Oil and natural gas properties, successful efforts method (Note 2) | 2,409,611 | 2,160,008 |
Other | 12,256 | 22,822 |
Accumulated depreciation, depletion and impairment | (559,930) | (438,383) |
Property and equipment, net | 1,861,937 | 1,744,447 |
Long-term derivative instruments | 36,514 | 91,291 |
Other long-term assets | 10,833 | 4,976 |
Assets of discontinued operation (Note 3) | 0 | 2,566,431 |
Total assets | 2,100,696 | 5,082,849 |
Current liabilities: | ||
Accounts payable | 25,697 | 25,057 |
Accounts payable - affiliates | 8,062 | 5,016 |
Revenues payable | 34,117 | 34,026 |
Accrued liabilities (Note 2) | 72,064 | 68,876 |
Liabilities of discontinued operation (Note 3) | 0 | 91,779 |
Total current liabilities | 139,940 | 224,754 |
Noncurrent liabilities: | ||
Long-term debt | 1,103,902 | 1,012,064 |
Asset retirement obligations | 10,779 | 10,079 |
Deferred tax liabilities | 149,355 | 193,733 |
Other long-term liabilities | 3,083 | 7,195 |
Liabilities of discontinued operation (Note 3) | 0 | 2,167,103 |
Total liabilities | 1,407,059 | 3,614,928 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Preferred stock, $.01 par value: 50,000,000 shares authorized; no shares issued and outstanding | ||
Common stock, $.01 par value: 600,000,000 shares authorized; 206,038,313 shares issued and outstanding at June 30, 2016; 205,293,743 shares issued and outstanding at December 31, 2015 | 2,060 | 2,053 |
Additional paid-in capital | 1,627,780 | 1,560,949 |
Accumulated earnings (deficit) | (936,203) | (740,175) |
Total stockholders' equity | 693,637 | 822,827 |
Noncontrolling interests | 0 | 645,094 |
Total equity | 693,637 | 1,467,921 |
Total liabilities and equity | $ 2,100,696 | $ 5,082,849 |
UNAUDITED CONDENSED CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 206,038,313 | 205,293,743 |
Common stock, shares outstanding | 206,038,313 | 205,293,743 |
UNAUDITED CONDENSED STATEMENTS
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Revenues: | |||||
Oil & natural gas sales | $ 98,986 | $ 78,605 | $ 180,064 | $ 165,628 | |
Total revenues | 98,986 | 78,605 | 180,064 | 165,628 | |
Costs and expenses: | |||||
Lease operating | 8,189 | 3,854 | 14,903 | 9,076 | |
Gathering, processing, and transportation | 23,353 | 14,289 | 45,294 | 29,052 | |
Gathering, processing, and transportation - affiliate (Note 13) | 13,456 | 3,813 | 27,643 | 3,813 | |
Exploration | 4,612 | 2,230 | 7,058 | 2,956 | |
Taxes other than income | 2,991 | 3,140 | 5,855 | 5,915 | |
Depreciation, depletion, and amortization | 65,558 | 35,827 | 125,357 | 76,359 | |
Incentive unit compensation expense (benefit) (Note 12) | 74,329 | 16,116 | 52,569 | 26,340 | |
General and administrative | 24,021 | 10,323 | 35,154 | 23,299 | |
Accretion of asset retirement obligations | 156 | 93 | 295 | 216 | |
(Gain) loss on commodity derivative instruments | 90,617 | 30,463 | 54,175 | (77,727) | |
(Gain) loss on sale of properties | 50 | 50 | 50 | ||
Total costs and expenses | 307,282 | 120,198 | 368,353 | 99,349 | |
Operating income (loss) | (208,296) | (41,593) | (188,289) | 66,279 | |
Other income (expense): | |||||
Interest expense, net | (12,767) | (9,613) | (24,124) | (19,369) | |
Other, net | (112) | (52) | (108) | (101) | |
Total other income (expense) | (12,879) | (9,665) | (24,232) | (19,470) | |
Income (loss) before income taxes | (221,175) | (51,258) | (212,521) | 46,809 | |
Income tax benefit (expense) | 25,342 | 24,644 | 22,405 | (22,914) | |
Net income (loss) from continuing operations | (195,833) | (26,614) | (190,116) | 23,895 | |
Discontinued Operations: (Note 3) | |||||
Income (loss) before income taxes | (122,425) | (112,983) | (160,426) | (278,011) | |
Income tax benefit (expense) | (876) | (96) | 1,494 | ||
Net income (loss) from discontinued operations | (122,425) | (113,859) | (160,522) | (276,517) | |
Net income (loss) | (318,258) | (140,473) | (350,638) | (252,622) | |
Net income (loss) attributable to noncontrolling interest | (122,297) | (113,771) | (160,354) | (274,666) | |
Net income (loss) attributable to Memorial Resource Development Corp. | (195,961) | (26,702) | (190,284) | 22,044 | |
Net (income) allocated to participating restricted stockholders | (150) | ||||
Net (income) loss from discontinued operations | 128 | 88 | 168 | 227 | |
Net income (loss) from continuing operations available to common stockholders | $ (195,833) | $ (26,614) | $ (190,116) | $ 22,121 | |
Earnings per common share-basic: (Note 10) | |||||
Income (loss) from continuing operations | $ (0.96) | $ (0.14) | $ (0.93) | $ 0.12 | |
Income (loss) from discontinued operations | 0 | 0 | 0 | 0 | |
Net income (loss) | (0.96) | (0.14) | (0.93) | 0.12 | |
Earnings per common share-diluted: (Note 10) | |||||
Income (loss) from continuing operations | [1] | (0.96) | (0.14) | (0.93) | 0.12 |
Income (loss) from discontinued operations | [1] | 0 | 0 | 0 | 0 |
Net income (loss) | $ (0.96) | $ (0.14) | $ (0.93) | $ 0.12 | |
Weighted average common and common equivalent shares outstanding: | |||||
Basic | 203,948 | 189,628 | 203,807 | 190,163 | |
Diluted | 203,948 | 189,628 | 203,807 | 190,163 | |
[1] | The Company determines the more dilutive of either the two-class method or the treasury stock method for diluted EPS. The two-class method was more dilutive for each period presented. The incremental treasury stock method shares were excluded from the computation of diluted EPS because the inclusion of such shares would have been anti-dilutive. |
UNAUDITED CONDENSED STATEMENTS5
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (350,638) | $ (252,622) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
(Income) loss from discontinued operations | 160,522 | 276,517 |
Depreciation, depletion, and amortization | 125,357 | 76,359 |
(Gain) loss on derivatives | 54,175 | (77,727) |
Cash settlements (paid) received on expired derivative instruments | 130,000 | 70,288 |
Amortization of deferred financing costs | 1,560 | 1,333 |
Accretion of asset retirement obligations | 295 | 216 |
Amortization of equity awards | 13,673 | 3,443 |
(Gain) loss on sale of properties | 50 | 50 |
Non-cash compensation expense | 52,569 | 26,340 |
Deferred income tax expense (benefit) | (44,301) | 15,197 |
Exploration costs | 236 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (6,849) | 3,396 |
Prepaid expenses and other assets | (6,678) | 4,538 |
Payables and accrued liabilities | 23,691 | 37,537 |
Other | (1,715) | (1,166) |
Net cash provided by continuing operations | 151,947 | 183,699 |
Net cash provided by discontinued operations | 139,770 | 118,088 |
Net cash provided by operating activities | 291,717 | 301,787 |
Cash flows from investing activities: | ||
Additions to oil and gas properties | (265,532) | (207,103) |
Additions to other property and equipment | (438) | (3,309) |
Other financial instruments | 16,220 | 0 |
Proceeds from the sale of other property and equipment | 4,219 | 0 |
Proceeds from the sale of oil and natural gas properties | 0 | 13,612 |
Other | 24 | 0 |
Net cash used in continuing operations | (245,507) | (196,800) |
Net cash used in discontinued operations | (33,014) | (127,644) |
Net cash used in investing activities | (278,521) | (324,444) |
Cash flows from financing activities: | ||
Advances on revolving credit facilities | 229,000 | 181,000 |
Payments on revolving credit facilities | (138,000) | (199,000) |
Deferred financing costs | (38) | 0 |
Proceeds from sale of subsidiaries | 750 | 0 |
MRD equity repurchases | (5,748) | (51,197) |
Net cash used in continuing operations | 85,964 | (69,197) |
Net cash provided by (used in) discontinued operations | (86,365) | 90,597 |
Net cash provided by (used in) financing activities | (401) | 21,400 |
Net change in cash and cash equivalents | 12,795 | (1,257) |
Add: cash balance included in assets of discontinued operations at beginning of period | 2,175 | 2,594 |
Less: cash balance included in assets of discontinued operations at May 31, 2016 and June 30, 2015 | 4,701 | |
Cash and cash equivalents, beginning of period | 0 | 3,364 |
Cash and cash equivalents, end of period | $ 10 | $ 0 |
UNAUDITED CONDENSED STATEMENTS6
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED AND COMBINED EQUITY - USD ($) $ in Thousands | Total | MEMP [Member] | Common Stock [Member] | Additional paid in capital [Member] | Accumulated earnings (deficit) [Member] | Noncontrolling Interest [Member] | Noncontrolling Interest [Member]MEMP [Member] |
Total equity, beginning balance at Dec. 31, 2014 | $ 1,702,964 | $ 1,935 | $ 1,367,346 | $ (786,871) | |||
Noncontrolling interests, beginning balance at Dec. 31, 2014 | $ 1,120,554 | ||||||
Net income (loss) | (252,622) | 0 | 0 | 22,044 | (274,666) | ||
Share repurchase | (47,785) | $ (45,117) | (28) | 0 | (47,757) | 0 | $ (45,117) |
Restricted stock awards | 0 | 9 | (9) | 0 | 0 | ||
Amortization of restricted stock awards | 3,443 | 0 | 3,443 | 0 | 0 | ||
Contribution (distribution) related to MRD Holdco incentive units compensation expense (Note 12) | 26,340 | 0 | 26,340 | 0 | 0 | ||
Net equity deemed contribution (distribution) related to MEMP property exchange (Note 1) | 0 | 0 | (127,149) | 0 | 127,149 | ||
Deferred tax effect of MEMP property exchange (Note 15) | 28,020 | 0 | 28,020 | 0 | 0 | ||
Distributions | (92,477) | 0 | 0 | 0 | (92,477) | ||
Equity repurchases | (1,196) | (1) | 0 | (1,195) | 0 | ||
Amortization of MEMP equity awards | 4,906 | 0 | 0 | 0 | 4,906 | ||
Other | (17) | 0 | (47) | 0 | 30 | ||
Total equity, ending balance at Jun. 30, 2015 | 1,326,459 | 1,915 | 1,297,944 | (813,779) | |||
Noncontrolling interests, ending balance at Jun. 30, 2015 | 840,379 | ||||||
Total equity, beginning balance at Dec. 31, 2015 | 1,467,921 | 2,053 | 1,560,949 | (740,175) | |||
Noncontrolling interests, beginning balance at Dec. 31, 2015 | 645,094 | 645,094 | |||||
Total stockholders equity, beginning balance at Dec. 31, 2015 | 822,827 | ||||||
Net income (loss) | (350,638) | 0 | 0 | (190,284) | (160,354) | ||
Restricted stock awards | 0 | 11 | (11) | 0 | 0 | ||
Amortization of restricted stock awards | 13,673 | 0 | 13,673 | 0 | 0 | ||
Contribution (distribution) related to MRD Holdco incentive units compensation expense (Note 12) | 52,569 | 0 | 52,569 | 0 | 0 | ||
Distributions | (8,295) | 0 | 0 | 0 | (8,295) | ||
Equity repurchases | (5,748) | $ (90) | (4) | 0 | (5,744) | 0 | $ (90) |
Amortization of MEMP equity awards | 4,218 | 0 | 0 | 0 | 4,218 | ||
Adjustments from deconsolidation of subsidiaries (Note 9) | (480,165) | 0 | 0 | 0 | (480,165) | ||
Other | 192 | 0 | 600 | 0 | (408) | ||
Total equity, ending balance at Jun. 30, 2016 | 693,637 | $ 2,060 | $ 1,627,780 | $ (936,203) | |||
Noncontrolling interests, ending balance at Jun. 30, 2016 | 0 | $ 0 | |||||
Total stockholders equity, ending balance at Jun. 30, 2016 | $ 693,637 |
Background, Organization and Ba
Background, Organization and Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Background, Organization and Basis of Presentation | Note 1. Background, Organization and Basis of Presentation Overview Memorial Resource Development Corp. (the “Company”) is a publicly traded Delaware corporation, the common shares of which are listed on the NASDAQ Global Market (“NASDAQ”) under the symbol “MRD.” Unless the context requires otherwise, references to “we,” “us,” “our,” “MRD,” or “the Company” are intended to mean the business and operations of Memorial Resource Development Corp. and its consolidated subsidiaries. References to: (i) “Memorial Production Partners,” “MEMP” and “the Partnership” refer to Memorial Production Partners LP individually and collectively with its subsidiaries, as the context requires; (ii) “MEMP GP” refer to Memorial Production Partners GP LLC, the general partner of the Partnership; (iii) “MRD Holdco” refer to MRD Holdco LLC, a holding company controlled by the Funds (defined below) that, together as part of a group, owns a majority of our common stock; (iv) “the Funds” refer collectively to Natural Gas Partners VIII, L.P., Natural Gas Partners IX, L.P. and NGP IX Offshore Holdings, L.P., which collectively control MRD Holdco; and (v) “NGP” refer to Natural Gas Partners, a family of private equity investment funds organized to make direct equity investments in the energy industry, including the Funds. Basis of Presentation Our consolidated financial statements include our accounts and those of our subsidiaries in which we have a controlling interest. Under the amended consolidation guidance that we adopted on January 1, 2016 (see Note 2), a limited partnership is considered a variable interest entity (“VIE”) unless a single limited partner or a simple majority of all partners have substantive kick-out or participating rights. The Company determined that MEMP was a VIE and we were deemed the primary beneficiary. On June 1, 2016, we completed the sale of MEMP GP, Beta Operating Company, LLC (“Beta Operating”) and MEMP Services LLC (“Services”) (collectively, the “Disposition Entities”), to MEMP for $0.75 million in cash. This sale was a reconsideration event under the amended consolidation guidance which resulted in the deconsolidation of the Partnership. Our equity statement reflects a loss of $0.1 million related to the deconsolidation of the Disposition Entities and their subsidiaries. Our financial statements have been retrospectively revised to reflect the Disposition Entities and their subsidiaries as discontinued operations for all periods presented (see Note 3). After the completion of the sale, we have one reportable business segment, which is engaged in the acquisition, exploration and development of oil and natural gas properties. All material intercompany transactions and balances have been eliminated in preparation of our consolidated financial statements. Our results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of results expected for the full year. In our opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for fair presentation. Although we believe the disclosures in these financial statements are adequate and make the information presented not misleading, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Our equity statement reflects a $127.1 million equity transfer from stockholders’ equity to noncontrolling interest related to the acquisition by MEMP of certain assets from the Company in East Texas in February 2015 for certain properties in North Louisiana (the “Property Swap”). Proposed Merger with Range Resources Corporation On May 15, 2016, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Range Resources Corporation (“Range”), a Delaware corporation, and Medina Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Range (“Merger Sub”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth, the Merger Sub will be merged with and into the Company, with the Company continuing as the surviving entity and a wholly owned subsidiary of Range (“the Merger”). If the Merger is completed, each share of our common stock outstanding immediately before that time (including outstanding shares of our restricted common stock, all of which will become fully vested and unrestricted under the terms of the Merger Agreement) will automatically be converted into the right to receive 0.375 of a share of Range common stock, par value of $0.01 per share (“Range Common Stock”). The Merger is subject to customary closing conditions, including the approval by both Memorial and Range stockholders. We expect the closing of the Merger will occur late in the third quarter of 2016. In connection with the execution of the Merger Agreement, MRD Holdco, Jay Graham (our chief executive officer), Anthony Bahr and WHR Incentive LLC (a limited liability company controlled by Mr. Graham and Mr. Bahr) (collectively, the “Memorial Stockholders”) entered into a voting and support agreement with Range and have agreed to vote all of the shares held by them in favor of the approval and adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement, including the merger. As of June 30, 2016, the Memorial Stockholders hold and are entitled to vote in the aggregate approximately 47.7% of the issued and outstanding shares of our common stock entitled to vote at our special meeting. In addition, certain other stockholders of the Company who are not party to the voting and support agreement are party to an existing voting agreement, as discussed in our 2015 Form 10-K, pursuant to which those stockholders are required to vote all of the shares of our common stock that they own as directed by MRD Holdco. As of June 30, 2016, those additional stockholders hold and are entitled to vote in the aggregate approximately 2.7% of the outstanding shares of our common stock entitled to vote at our special meeting. Upon completion of the Merger, our common stock currently listed on the NASDAQ will cease to be listed for trading on the NASDAQ and will subsequently be deregistered under the Securities Exchange Act of 1934, as amended. Use of Estimates The preparation of the accompanying unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, oil and natural gas reserves; depreciation, depletion, and amortization of proved oil and natural gas properties; future cash flows from oil and natural gas properties; impairment of long-lived assets; realization of long-term prepaid processing fees; fair value of derivatives; fair value of equity compensation; fair values of assets acquired and liabilities assumed in business combinations, income taxes and asset retirement obligations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies A discussion of our critical accounting policies and estimates is included in our 2015 Form 10-K. Oil and Natural Gas Properties Oil and natural gas properties consisted of the following at the dates indicated (in thousands): June 30, December 31, 2016 2015 (In thousands) Proved oil and natural gas properties $ 1,984,500 $ 1,740,530 Support equipment and facilities 7,191 4,719 Unproved oil and natural gas properties 417,920 414,759 Total oil and natural gas properties $ 2,409,611 $ 2,160,008 At June 30, 2016 and December 31, 2015, we had $147.4 million and $174.0 million, respectively, capitalized in proved oil and natural gas properties related to wells in various stages of drilling and completion, which have been excluded from the depletion base. Accrued liabilities Current accrued liabilities consisted of the following at the dates indicated (in thousands): June 30, December 31, 2016 2015 Accrued capital expenditures $ 24,084 $ 40,197 Accrued interest payable 17,665 17,657 Accrued lease operating expense 1,414 2,031 Accrued general and administrative expenses 5,871 4,030 Accrued ad valorem taxes 1,619 157 Accrued current income taxes 20,007 1,911 Other miscellaneous, including operator advances 1,404 2,893 Total accrued liabilities $ 72,064 $ 68,876 Supplemental Cash Flow Information Supplemental cash flow from continuing operations for the periods presented (in thousands): For the Six Months Ended June 30, 2016 2015 Supplemental cash flows: Cash paid for interest, net of capitalized interest $ 22,418 $ 35,650 Cash paid for taxes 3,800 2,000 Noncash investing and financing activities: Increase (decrease) in capital expenditures in payables and accrued liabilities (16,113 ) 25,560 (Increase) decrease in accounts receivable related to other financial instruments 2,633 — Assumptions of asset retirement obligations related to properties acquired or drilled 530 — New Accounting Pronouncements Improvements to Employee Share-Based Payment Accounting . In March 2016, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update to simplify the guidance on employee share-based payment accounting. The update involves several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification in the statement of cash flows. Entities will no longer record excess tax benefits and certain tax deficiencies in additional paid-in capital (“APIC”). Instead, they will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement and the APIC pools will be eliminated. In addition, the new guidance eliminates the requirement that excess tax benefits be realized before companies can recognize them and requires companies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity. Furthermore, the new guidance will increase the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s statutory income tax withholding obligation. The new guidance requires a company to classify the cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation as a financing activity on the statement of cash flows. In addition, companies will now have to elect whether to account for forfeitures on share-based payments by: (i) recognizing forfeitures of awards as they occur or (ii) estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change, as is currently required. The new guidance is effective for reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted, but all of the guidance must be adopted in the same period. The Company is currently assessing the impact the adoption of this new guidance will have on our consolidated financial statements and related disclosures. For the amendments that change the recognition and measurement of share-based payment awards, the new guidance requires transition under a modified retrospective approach, with a cumulative-effect adjustment made to retained earnings as of the beginning of the fiscal period in which the guidance is adopted. Prospective application is required for the accounting for excess tax benefits and tax deficiencies. Entities should apply the new guidance retrospectively for all periods presented related to the classification of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirements. Entities may apply the presentation changes for excess tax benefits in the statement of cash flows either prospectively or retrospectively. Leases. In February 2016, the FASB issued a revision to its lease accounting guidance. The FASB retained a dual model, requiring leases to be classified as either direct financing or operating leases. The classification will be based on criteria that are similar to the current lease accounting treatment. The revised guidance requires lessees to recognize a right-of-use asset and lease liability for all leasing transactions regardless of classification. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The amendments are effective for financial statements issued for annual periods beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted for all entities as of the beginning of an interim or annual reporting period. The revised guidance must be adopted using a modified retrospective transition and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. The Company is currently evaluating the standard and the impact on the Company’s financial statements and related footnote disclosures. Amendments to Consolidation Analysis . In February 2015, the FASB issued an accounting standards update to improve consolidation guidance for certain types of legal entities. The guidance modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities, eliminates the presumption that a general partner should consolidate a limited partnership, affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships, and provides a scope exception from consolidation guidance for certain money market funds. We adopted this guidance on January 1, 2016 and determined that MEMP was a VIE for which the Company is the primary beneficiary for accounting purposes. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. On June 1, 2016, we completed the sale of the Disposition Entities to MEMP as discussed in Note 1, which triggered a reconsideration event under the guidance which resulted in the deconsolidation of the Partnership. Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations and cash flows. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2016 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Discontinued Operations | Note 3. Discontinued Operations As previously discussed in Note 1, we sold the Disposition Entities and their subsidiaries on June 1, 2016 to MEMP. Below is a reconciliation of carrying amounts of major classes of assets and liabilities included as part of discontinued operations as reflected on the balance sheet associated with this disposal transaction (in thousands): December 31, 2015 ASSETS Current assets: Cash and cash equivalents $ 2,175 Accounts receivable 61,404 Short-term derivative instruments 272,320 Prepaid expenses and other current assets 9,642 Total current assets 345,541 Property and equipment, net 1,946,937 Long-term derivative instruments 461,810 Restricted investments 152,631 Other long-term assets 5,053 Total assets $ 2,911,972 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 8,792 Accounts payable - affiliates 193 Revenues payable 27,021 Accrued liabilities 52,923 Short-term derivative instruments 2,850 Total current liabilities 91,779 Long-term debt 2,000,579 Asset retirement obligations 162,989 Long-term derivative instruments 1,441 Deferred tax liabilities 2,094 Total liabilities $ 2,258,882 Below is a reconciliation of major line items constituting pretax profit (loss) of discontinued operations to the after tax profit (loss) of discontinued operations that are presented in the statement of operations (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 Revenues: Oil & natural gas sales $ 43,806 $ 97,221 $ 104,429 $ 189,170 Other revenues 186 917 429 1,786 Total revenues 43,992 98,138 104,858 190,956 Costs and expenses: Lease operating 19,347 44,888 55,043 85,366 Gathering, processing, and transportation 6,166 9,548 15,375 18,214 Exploration 3 32 125 122 Taxes other than income 2,534 6,058 6,542 12,713 Depreciation, depletion, and amortization 29,954 46,286 74,383 97,552 Impairment of proved oil and natural gas properties — — 8,342 251,347 General and administrative (1) 9,092 14,377 22,616 28,888 Accretion of asset retirement obligations 1,828 1,686 4,535 3,320 (Gain) loss on commodity derivative instruments 104,365 61,403 52,620 (84,056 ) (Gain) loss on sale of properties — — (96 ) — Other, net — (943 ) 119 (943 ) Total costs and expenses 173,289 183,335 239,604 412,523 Operating income (loss) (129,297 ) (85,197 ) (134,746 ) (221,567 ) Other income (expense): Interest expense, net (19,142 ) (27,910 ) (51,694 ) (56,728 ) Other, net 26,014 124 26,014 284 Total other income (expense) 6,872 (27,786 ) (25,680 ) (56,444 ) Pretax profit (loss) of discontinued operations (122,425 ) (112,983 ) (160,426 ) (278,011 ) Income tax benefit (expense) — (876 ) (96 ) 1,494 Net income (loss) from discontinued operations $ (122,425 ) $ (113,859 ) $ (160,522 ) $ (276,517 ) (1) Included $4.4 million and $12.2 million, for the three and six months ended June 30, 2016; and $8.5 million and $17.0 million for the three and six months ended June 30, 2015 that was allocated to discontinued operations under an omnibus agreement. This omnibus agreement was terminated on June 1, 2016, and we entered into a transition services agreement (“TSA”) with MEMP to manage post-closing separation costs and activities through February 2017. At June 30, 2016, we owed MEMP approximately $1.9 million under the TSA. In connection with the sale of the Disposition Entities, we received $4.2 million from MEMP for the sale of furniture, fixtures, and other property and equipment. We also received an additional $5.4 million from MEMP related to both the settlement of a receivable that had been previously eliminated in consolidation and prepaid expenses. We paid MEMP approximately $1.9 million, which represented a settlement related to corporate office space. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Note 4. Acquisitions and Divestitures Transaction-related costs, which include costs associated with our proposed Merger with Range, are included in general and administrative expenses in the accompanying statements of operations for the periods indicated below (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 $ 6,179 $ 126 $ 6,209 $ 1,407 2016 Acquisitions and Divestitures There were no material acquisitions during the three and six months ended June 30, 2016. In addition, there were no material divestitures during the three and six months ended June 30, 2016, except for the Disposition Entities and their subsidiaries as discussed in Note 1. 2015 Acquisition and Divestitures On April 17, 2015, we sold certain oil and natural gas properties to a third party in Colorado and Wyoming for approximately $13.6 million (the “Rockies Divestiture”) and recorded a gain of less than $0.1 million related to the sale. On June 1, 2015, we entered into an oil and gas lease option agreement with a third party pursuant to which we have the right to obtain one or more oil and gas leases in North Louisiana. The option is exercisable through February 2017. The purchase price of this option was approximately $4.0 million. The purchase price has been capitalized as part of unproved properties and will be expensed if the option is not exercised. |
Fair Value Measurements of Fina
Fair Value Measurements of Financial Instruments | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements of Financial Instruments | Note 5. Fair Value Measurements of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a specified measurement date. Fair value estimates are based on either (i) actual market data or (ii) assumptions that other market participants would use in pricing an asset or liability, including estimates of risk. A three-tier hierarchy has been established that classifies fair value amounts recognized or disclosed in the financial statements. The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3). All of the derivative instruments reflected on the accompanying balance sheets were considered Level 2. The carrying values of accounts receivables, accounts payables (including accrued liabilities), restricted investments and amounts outstanding under long-term debt agreements with variable rates included in the accompanying balance sheets approximated fair value at June 30, 2016 and December 31, 2015. The fair value estimates are based upon observable market data and are classified within Level 2 of the fair value hierarchy. These assets and liabilities are not presented in the following tables. See Note 8 for the estimated fair value of our outstanding fixed-rate debt. Assets and Liabilities Measured at Fair Value on a Recurring Basis The fair market values of the derivative financial instruments reflected on the balance sheets as of June 30, 2016 and December 31, 2015 were based on estimated forward commodity prices (including nonperformance risk) and forward interest rate yield curves. Nonperformance risk is the risk that the obligation related to the derivative instrument will not be fulfilled. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement in its entirety. The significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following table presents the gross derivative assets and liabilities that are measured at fair value on a recurring basis at June 30, 2016 and December 31, 2015 for each of the fair value hierarchy levels: Fair Value Measurements at June 30, 2016 Using Quoted Prices in Significant Other Significant Active Observable Unobservable Market Inputs Inputs (Level 1) (Level 2) (Level 3) Fair Value (In thousands) Assets: Commodity derivatives $ — $ 135,658 $ — $ 135,658 Liabilities: Commodity derivatives $ — $ 550 $ — $ 550 Fair Value Measurements at December 31, 2015 Using Quoted Prices in Significant Other Significant Active Observable Unobservable Market Inputs Inputs (Level 1) (Level 2) (Level 3) Fair Value (In thousands) Assets: Commodity derivatives $ — $ 319,762 $ — $ 319,762 Liabilities: Commodity derivatives $ — $ 480 $ — $ 480 See Note 6 for additional information regarding our derivative instruments. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities are reported at fair value on a nonrecurring basis as reflected on the balance sheets. The following methods and assumptions are used to estimate the fair values: · The fair value of asset retirement obligations (“AROs”) is based on discounted cash flow projections using numerous estimates, assumptions, and judgments regarding factors such as the existence of a legal obligation for an ARO; amounts and timing of settlements; the credit-adjusted risk-free rate; and inflation rates. See Note 7 for a summary of changes in AROs. · If sufficient market data is not available, the determination of the fair values of proved and unproved properties acquired in transactions accounted for as business combinations are prepared by utilizing estimates of discounted cash flow projections. The factors to determine fair value include, but are not limited to, estimates of: (i) economic reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital. To compensate for the inherent risk of estimating and valuing unproved properties, the discounted future net revenues of probable and possible reserves are reduced by additional risk-weighting factors. The fair value of supporting equipment, such as plant assets, acquired in transactions accounted for as business combinations are commonly estimated using the depreciated replacement cost approach. · Proved oil and natural gas properties are reviewed for impairment when events and circumstances indicate a possible decline in the recoverability of the carrying value of such properties. The factors used to determine fair value include, but are not limited to, estimates of proved reserves, future commodity prices, the timing of future production and capital expenditures and a discount rate commensurate with the risk reflective of the lives remaining for the respective oil and natural gas properties. |
Risk Management and Derivative
Risk Management and Derivative and Other Financial Instruments | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Risk Management and Derivative and Other Financial Instruments | Note 6. Risk Management and Derivative and Other Financial Instruments Derivative and other financial instruments are utilized to manage exposure to commodity price and interest rate fluctuations and achieve a more predictable cash flow in connection with natural gas and oil sales from production and borrowing related activities. These instruments limit exposure to declines in prices or increases in interest rates, but also limit the benefits that would be realized if prices increase or interest rates decrease. Certain inherent business risks are associated with commodity and interest derivative contracts and other financial instruments, including market risk and credit risk. Market risk is the risk that the price of natural gas or oil will change, either favorably or unfavorably, in response to changing market conditions. Credit risk is the risk of loss from nonperformance by the counterparty to a contract. It is our policy to enter into derivative contracts, including interest rate swaps, and other financial instruments only with creditworthy counterparties, which generally are financial institutions, deemed by management as competent and competitive market makers. Some of the lenders, or certain of their affiliates, under our credit agreements are counterparties to our derivative contracts. While collateral is generally not required to be posted by counterparties, credit risk associated with derivative and other financial instruments is minimized by limiting exposure to any single counterparty and entering into derivative and other financial instruments only with counterparties that are large financial institutions, which management believes present minimal credit risk. Additionally, master netting agreements are used to mitigate risk of loss due to default with counterparties on derivative or other financial instruments. We have also entered into the International Swaps and Derivatives Association Master Agreements (“ISDA Agreements”) with each of our counterparties. The terms of the ISDA Agreements provide us and each of our counterparties with rights of set-off upon the occurrence of defined acts of default by either us or our counterparty to a derivative or other financial instrument, whereby the party not in default may set-off all liabilities owed to the defaulting party against all net derivative asset receivables from the defaulting party. At June 30, 2016, we had net derivative and other financial assets of $162.4 million. After taking into effect netting arrangements, we had counterparty exposure of $16.6 million related to derivative and other financial instruments of which all was with a single counterparty. Had all counterparties failed completely to perform according to the terms of their existing contracts, we would have the right to offset $145.8 million against amounts outstanding under our revolving credit facility at June 30, 2016. See Note 8 for additional information regarding our revolving credit facility. Commodity Derivatives and Other Financial Instruments We may use a combination of commodity derivatives and other financial instruments (e.g., floating-for-fixed swaps, put options, costless collars and basis swaps) to manage exposure to commodity price volatility. We recognize all derivative instruments at fair value; however, certain of our derivative instruments have a deferred premium. The deferred premium is factored into the fair value measurement and the Company agrees to defer the premium paid or received until the time of settlement. Cash settlements received on settled derivative positions during the six months ended June 30, 2016 is net of deferred premiums of $10.5 million. During the year ended December 31, 2015, we restructured our existing 2018 crude oil and natural gas hedges for crude oil and NGL swaps that will settle in 2016. Cash settlements of approximately $92.3 million from the terminated 2018 positions were received and applied as premiums for the new crude oil and NGL swaps. Certain contracts are classified as other financial instruments, which required bifurcation, based on the relationship between the fixed swap price and the market price at the restructure dates. Due to bifurcation, $27.3 million of the restructured contracts represents other financial assets at June 30, 2016. We enter into natural gas derivative contracts that are indexed to NYMEX-Henry Hub and regional indices such as TGT Z1 in proximity to our areas of production. We also enter into oil derivative contracts indexed primarily to NYMEX-WTI. Our NGL derivative contracts are primarily indexed to OPIS Mont Belvieu. At June 30, 2016, we had the following open commodity positions (excluding embedded derivatives): Remaining 2016 2017 Natural Gas Derivative Contracts: Fixed price swap contracts: Average Monthly Volume (MMBtu) 3,120,000 1,770,000 Weighted-average fixed price $ 4.06 $ 4.24 Collar contracts: Average Monthly Volume (MMBtu) 1,000,000 1,050,000 Weighted-average floor price $ 4.00 $ 4.00 Weighted-average ceiling price $ 4.71 $ 5.06 Purchased put option contracts: Average Monthly Volume (MMBtu) 6,700,000 5,350,000 Weighted-average strike price $ 3.54 $ 3.48 Weighted-average deferred premium $ (0.34 ) $ (0.32 ) TGT Z1 basis swaps: Average Monthly Volume (MMBtu) 1,120,000 200,000 Spread - Henry Hub $ (0.10 ) $ (0.08 ) Crude Oil Derivative Contracts: Fixed price swap contracts: Average Monthly Volume (Bbls) 32,833 28,000 Weighted-average fixed price $ 83.91 $ 84.70 Collar contracts: Average Monthly Volume (Bbls) 26,600 — Weighted-average floor price $ 80.00 $ — Weighted-average ceiling price $ 99.70 $ — NGL Derivative Contracts: Fixed price swap contracts: Average Monthly Volume (Bbls) 366,758 — Weighted-average fixed price $ 39.93 $ — At June 30, 2016, we had the following open embedded derivative positions: Remaining 2016 Oil Hybrid Contracts: Fixed price swap contracts: Average Monthly Volume (Bbls) 27,211 Weighted-average fixed price $ 46.50 Initial net investment price 62.29 Total contract swap price $ 108.79 NGL Hybrid Contracts: Fixed price swap contracts: Average Monthly Volume (Bbls) 111,175 Weighted-average fixed price $ 15.77 Initial net investment price 25.61 Total contract swap price $ 41.38 Balance Sheet Presentation The following table summarizes both: (i) the gross fair value of derivative instruments by the appropriate balance sheet classification even when the derivative instruments are subject to netting arrangements and qualify for net presentation in the balance sheet and (ii) the net recorded fair value as reflected on the balance sheet at June 30, 2016 and December 31, 2015. There was no cash collateral received or pledged associated with our derivative instruments since most of the counterparties, or certain of their affiliates, to our derivative contracts are lenders under our collective credit agreements. Asset Derivatives Liability Derivatives June 30, December 31, June 30, December 31, Type Balance Sheet Location 2016 2015 2016 2015 (In thousands) Commodity contracts Short-term derivative instruments $ 98,937 $ 228,349 $ 343 $ 358 Netting arrangements Short-term derivative instruments (343 ) (358 ) (343 ) (358 ) Net recorded fair value Short-term derivative instruments $ 98,594 $ 227,991 $ — $ — Commodity contracts Long-term derivative instruments $ 36,721 $ 91,413 $ 207 $ 122 Netting arrangements Long-term derivative instruments (207 ) (122 ) (207 ) (122 ) Net recorded fair value Long-term derivative instruments $ 36,514 $ 91,291 $ — $ — (Gains) Losses on Derivatives All gains and losses, including changes in the derivative instruments’ fair values, have been recorded in the accompanying statements of operations since derivative instruments are not designated as hedging instruments for accounting and financial reporting purposes. The following table details the gains and losses related to derivative instruments for the periods indicated (in thousands): For the Three Months Ended For the Six Months Ended Statements of June 30, June 30, Operations Location 2016 2015 2016 2015 Commodity derivative contracts (Gain) loss on commodity derivatives $ 90,617 $ 30,463 $ 54,175 $ (77,727 ) |
Asset Retirement Obligations
Asset Retirement Obligations | 6 Months Ended |
Jun. 30, 2016 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Note 7. Asset Retirement Obligations Asset retirement obligations primarily relate to our portion of future plugging and abandonment costs for wells and related facilities. The following table presents the changes in the asset retirement obligations for the six months ended June 30, 2016 (in thousands): Asset retirement obligations at beginning of period $ 10,079 Liabilities added from acquisitions or drilling 530 Revision of estimates (125 ) Accretion expense 295 Asset retirement obligations at end of period $ 10,779 |
Long Term Debt
Long Term Debt | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long Term Debt | Note 8. Long Term Debt The following table presents our consolidated debt obligations at the dates indicated: June 30, December 31, 2016 2015 (In thousands) $2.0 billion revolving credit facility, variable-rate, due June 2019 $ 514,000 $ 423,000 5.875% senior unsecured notes, due July 2022 ("Senior Notes") (1) (2) 600,000 600,000 Unamortized debt issuance costs (10,098 ) (10,936 ) Total long-term debt $ 1,103,902 $ 1,012,064 (1) The estimated fair value of this fixed-rate debt was $598.5 million and $525.0 million at June 30, 2016 and December 31, 2015, respectively. (2) The estimated fair value is based on quoted market prices and is classified as Level 2 within the fair value hierarchy. On May 31, 2016, we entered into a sixth amendment to our revolving credit facility to, among other things, permit the sale of MEMP GP, Beta Operating and Services to MEMP. Effective June 1, 2016, Beta Operating was automatically released as a guarantor and discharged from any and all obligations under or in connection with our revolving credit facility or other related loan documents. The liens on and security interests in the equity interests owned by us in each of MEMP GP, Beta Operating, and Services, and the mortgaged property owned by Beta Operating were automatically released. Senior Notes Effective June 1, 2016, the guarantor subsidiaries are 100% owned by the Company; the Company has no material assets or operations independent of the guarantor subsidiaries; and there are no significant restrictions upon the ability of the guarantor subsidiaries to distribute funds to the Company. Additionally, our Senior Notes are jointly and severally, fully and unconditional guaranteed (subject to customary release provisions) by the guarantor subsidiaries. Borrowing Base Credit facilities tied to borrowing base are common throughout the oil and gas industry. Our revolving credit facility borrowing base is subject to redetermination, on at least a semi-annual basis, primarily based on estimated proved reserves. The borrowing base for our credit facility was the following at the date indicated (in thousands): June 30, 2016 $2.0 billion revolving credit facility, variable-rate, due June 2019 $ 1,000,000 Weighted-Average Interest Rates The following table presents the weighted-average interest rates paid on our consolidated variable-rate debt obligations for the periods presented: For the Three Months Ended For the Six Months Ended Credit Facility June 30, June 30, 2016 2015 2016 2015 Revolving credit facility (1) 2.49 % 1.70 % 2.38 % 1.80 % (1) As noted in the 2015 10-K, the Applicable Margin (as defined in our revolving credit facility), or credit spread, varies based on the total commitment usage (which is the ratio of outstanding borrowings and letters of credit to the borrowing base then in effect). The Applicable Margin for the three months and six months ended for June 30, 2016 was 2.00% and 1.90%, respectively. The Applicable Margin for the three months and six months ended June 30, 2015, was 1.50% and 1.57%, respectively. Unamortized Deferred Financing Costs Unamortized deferred financing costs associated with our consolidated debt obligations were as follows at the dates indicated: June 30, December 31, 2016 2015 (In thousands) Revolving credit facility $ 4,292 $ 4,976 Senior Notes 10,098 10,936 Total unamortized deferred financing costs 14,390 15,912 |
Stockholders' Equity and Noncon
Stockholders' Equity and Noncontrolling Interests | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Equity and Noncontrolling Interests | Note 9. Stockholders’ Equity and Noncontrolling Interests Common Stock The Company's authorized capital stock includes 600,000,000 shares of common stock, $0.01 par value per share. The following is a summary of the changes in our common shares issued for the six months ended June 30, 2016: Balance December 31, 2015 205,293,743 Restricted common shares issued (Note 11) 1,117,606 Restricted common shares repurchased (1) (363,159 ) Restricted common shares forfeited (9,877 ) Balance June 30, 2016 206,038,313 (1) Restricted common shares are generally net-settled by shareholders to cover the required withholding tax upon vesting. Participants surrendered shares with value equivalent to the employee’s minimum statutory obligation for the applicable income and other employment taxes. Total payments remitted for the employees’ tax obligations to the appropriate taxing authorities were approximately $5.7 million. These net-settlements had the effect of shares repurchased by the Company as they reduced the number of shares that would have otherwise been outstanding as a result of the vesting and did not represent an expense to the Company. See Note 11 for additional information regarding restricted common shares. Restricted shares of common stock are considered issued and outstanding on the grant date of the restricted stock award. Share Repurchase Program The Company repurchased 2,764,887 shares of common stock under the December 2014 repurchase program for an aggregate price of $47.8 million through March 16, 2015, which exhausted the December 2014 repurchase program. We have retired all of the shares of common stock repurchased and the shares of common stock are no longer issued or outstanding . In April 2015, the board of directors (“Board”) of the Company authorized the repurchase of up to $50.0 million of the Company’s outstanding common stock from time to time on the open market, through block trades or otherwise. The Company was not obligated to repurchase any dollar amount or specific number of shares of its common stock under the program, which could have been suspended or discontinued at any time. The Company did not repurchase any shares of common stock under the April 2015 repurchase program. The April 2015 repurchase program expired in April 2016. Noncontrolling Interests Noncontrolling interests is the portion of equity ownership in the Company’s consolidated subsidiaries not attributable to the Company and primarily consisted of the equity interests held by: (i) the limited partners of MEMP prior to June 1, 2016 (see Note 1) and (ii) a third party investor in the San Pedro Bay Pipeline Company prior to November 3, 2015. Distributions paid to the limited partners of MEMP primarily represent the quarterly cash distributions paid to MEMP’s unitholders. Contributions received from limited partners of MEMP primarily represent net cash proceeds received from common unit offerings. These distributions and contributions are a component of net cash provided by discontinued operations from financing activities as presented on our cash flow statement. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Note 10. Earnings per Share The following sets forth the calculation of earnings (loss) per share, or EPS, for the periods indicated (in thousands, except per share amounts): For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 Numerator: Net income (loss) from continuing operations available to common stockholders $ (195,833 ) $ (26,614 ) $ (190,116 ) $ 22,121 Net income (loss) from discontinued operations available to common stockholders 128 88 168 227 Denominator: Weighted average common shares outstanding 203,948 189,628 203,807 190,163 Incremental treasury stock method shares (1) 310 364 39 329 Basic EPS from continuing operations $ (0.96 ) $ (0.14 ) $ (0.93 ) $ 0.12 Diluted EPS from continuing operations (1) $ (0.96 ) $ (0.14 ) $ (0.93 ) $ 0.12 Basic EPS from discontinued operations $ — $ — $ — $ — Diluted EPS from discontinued operations (1) $ — $ — $ — $ — (1) The Company determines the more dilutive of either the two-class method or the treasury stock method for diluted EPS. The two-class method was more dilutive for each period presented. The incremental treasury stock method shares were excluded from the computation of diluted EPS because the inclusion of such shares would have been anti-dilutive. |
Long-Term Incentive Plans
Long-Term Incentive Plans | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Long-Term Incentive Plans | Note 11. Long-Term Incentive Plans The following table summarizes information regarding restricted common share awards granted under the Memorial Resource Development Corp. 2014 Long-Term Incentive Plan (“LTIP”) for the periods presented: Number of Shares Weighted-Average Grant Date Fair Value per Share (1) Restricted common shares outstanding at December 31, 2015 1,668,845 $ 18.89 Granted (2) 1,117,606 $ 13.13 Forfeited (9,877 ) $ 18.84 Vested (1,145,885 ) $ 18.87 Restricted common shares outstanding at June 30, 2016 (3) 1,630,689 $ 14.96 (1) Determined by dividing the aggregate grant date fair value of awards issued. (2) The aggregate grant date fair value of restricted common share awards issued in 2016 was $14.7 million based on a grant date market price ranging from $13.08 to $15.58 per share. (3) Effective immediately prior to the effective time of the Merger, each outstanding share of our unvested restricted common stock will fully vest and any applicable restrictions will lapse and, at the effective time of the Merger, each such share will be treated as a share of our common stock, including with respect to the right to receive 0.375 of a fully vested share of Range Common Stock. The following table summarizes the amount of recognized compensation expense associated with these awards that are reflected in the accompanying statements of operations for the periods presented (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 $ 10,521 $ 1,957 $ 13,673 $ 3,443 The unrecognized compensation cost associated with restricted common share awards was $23.2 million at June 30, 2016. We expect to recognize the unrecognized compensation cost for these awards over a weighted-average period of 2.44 years. LTIP Modification. On March 9, 2016, certain employees were impacted by an involuntary termination which, upon the Board’s approval, accelerated the vesting schedule of unvested awards under the LTIP that otherwise would have been forfeited upon a voluntary termination. The acceleration of the LTIP vesting schedule represents an improbable-to-probable modification. The grant-date fair value compensation cost of approximately $0.5 million was reversed and the modified-date grant fair value compensation cost of $1.1 million was recognized. On June 1, 2016, with the completion of the sale of the Disposition Entities and their subsidiaries to MEMP as discussed in Note 1, we accelerated the vesting schedule of unvested awards under the LTIP for the employees that remained with the Disposition Entities and their subsidiaries. The grant-date fair value compensation cost of approximately $2.5 million was reversed and the modified-date grant fair value compensation cost of $9.8 million was recognized. |
Incentive Units
Incentive Units | 6 Months Ended |
Jun. 30, 2016 | |
Compensation Related Costs [Abstract] | |
Incentive Units | Note 12. Incentive Units MRD Holdco MRD Holdco’s governing documents authorize the issuance of 1,000 incentive units, of which 930 incentive units were granted in exchange for cancelled predecessor awards (the “Exchanged Incentive Units”). Subsequent to our initial public offering, MRD Holdco granted the remaining 70 incentive units to certain key employees (the “Subsequent Incentive Units”). We recognized compensation expense of $74.3 million and $52.6 million for the three and six months ended June 30, 2016, respectively, offset by a deemed capital contribution to MRD Holdco. The unrecognized compensation expense of approximately $6.2 million as of June 30, 2016 will be recognized over the remaining expected service period of 0.25 years. The fair value of the Exchanged Incentive Units and Subsequent Incentive Units will be remeasured on a quarterly basis until all payments have been made. The settlement obligation rests with MRD Holdco. Accordingly, no payments will ever be made by us related to these incentive units; however, adjustments to non-cash compensation expense will be allocated to us in future periods offset by deemed capital contributions or distributions. As such, these awards are not dilutive to our stockholders. The fair value of the incentive units was estimated using a Monte Carlo simulation valuation model with the following assumptions: Exchanged Incentive Units Subsequent Incentive Units Valuation date 6/30/2016 6/30/2016 Dividend yield 0 % 0 % Expected volatility 55.00 % 55.00 % Risk-free rate 0.26 % 0.26 % Expected life (years) 0.25 0.25 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 13. Related Party Transactions Amounts due to MRD Holdco and certain affiliates of NGP at June 30, 2016 and December 31, 2015 are presented as “Accounts payable – NGP Affiliated Companies During the three and six months ended June 30, 2016, we paid approximately $0.5 million and $3.8 million, respectively, to Cretic Energy Services, LLC, a NGP affiliated company, for services related to our drilling and completion activities. During the three and six months ended June 30, 2016, we paid approximately $1.1 million and $3.5 million, respectively, to Multi-Shot, LLC, a NGP affiliated company, for services related to our drilling and completion activities, of which less than $0.1 million was attributable to discontinued operations. During the three months ended June 30, 2016, we also paid a NGP affiliate company approximately $1.1 million for mineral interests located in North Louisiana. Related Party Agreements We and certain of our affiliates have entered into various documents and agreements. These agreements have been negotiated among affiliated parties and, consequently, are not the result of arm’s-length negotiations. Registration Rights Agreement and Voting Agreement A discussion of these agreements is included in our 2015 Form 10-K. Services Agreement A discussion of this agreement is included in our 2015 Form 10-K. The services agreement was terminated effective March 1, 2015. During the six months ended June 30, 2015, we recognized approximately $2.0 million of general and administrative expenses under this agreement. Midstream Agreements We have various midstream service agreements with affiliates of PennTex Midstream Partners, LP (“PennTex”), an affiliate of NGP, for the gathering, processing and transportation of natural gas and NGLs. Additionally, we entered into an area of mutual interest and exclusivity agreement (“AMI”) with PennTex pursuant to which PennTex has the exclusive right to provide midstream services to support our current and future production in North Louisiana on our operated acreage within such area (other than production subject to existing third-party commitments). A discussion of these agreements is included in our 2015 Form 10-K. Pursuant to the gas processing agreement, any deficiency payments made by the Company under this agreement will be treated as prepaid processing fees by PennTex (except for the June 2015 deficiency payment) because we may utilize these deficiency payments as credit for fees owed if we have delivered the total minimum volume commitment under the processing agreement within the initial term of the agreement We must pay a quarterly deficiency payment based on the firm-commitment fixed fee if the cumulative minimum volume commitment as of the end of such quarter exceeds the sum of (i) the cumulative volumes processed (or credited with respect to plant interruptions) under the processing agreement as of the end of such quarter plus (ii) volumes corresponding to deficiency payments incurred prior to such quarter. During the three and six months ended June 30, 2016, we incurred $3.2 million and All net costs associated with these agreements are reflected in the statement of operations in the “Gathering, processing, and transportation – affiliate” line. Classic Pipeline Gas Gathering Agreement & Water Disposal Agreement A discussion of these agreements is included in our 2015 Form 10-K. The amended gas gathering agreement was terminated in November 2015 in connection with a third party’s acquisition of Classic Pipeline and Gathering, LLC’s (“Classic Pipeline”) Joaquin gathering system. Additionally, Classic Pipeline assigned its salt water disposal system to MEMP in November 2015. For the three and six months ended June 30, 2015, MEMP incurred gathering and salt water disposal fees of approximately $1.1 million and $2.0 million, respectively, under these agreements. These fees are a component of net income (loss) from discontinued operations as presented on our statement of operations. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14. Commitments and Contingencies Litigation & Environmental As part of our normal business activities, we may be named as defendants in litigation and legal proceedings, including those arising from regulatory and environmental matters. Although we are insured against various risks to the extent we believe it is prudent, there is no assurance that the nature and amount of such insurance will be adequate, in every case, to indemnify us against liabilities arising from future legal proceedings. We are not aware of any litigation, pending or threatened, that we believe is reasonably likely to have a significant adverse effect on our financial position, results of operations or cash flows. Subsequent event. In July 2016, alleged stockholders (“Plaintiffs”) of the Company, filed two class action lawsuits against us and the members of our board of directors relating to the Merger. These lawsuits are styled (i) Roger Mariani v. Memorial Resource Development Corp., et al., Case No. 4:16-cv-2042, in the United States District Court for the Southern District of Texas, Houston Division; and (ii) , Case No. 4:16-cv-02183, in the United States District Court for the Southern District of Texas, Houston Division. The Morris action also names Range and Merger Sub as additional defendants. Plaintiffs allege that the joint proxy statement/prospectus filed in connection with the Merger omits allegedly material information concerning, in general and among other things, (i) the valuation analyses prepared by Barclays Capital Inc. (“Barclays”) and Morgan Stanley & Co. LLC (“Morgan Stanley”) in connection with their fairness opinions regarding the Merger, (ii) the financial projections utilized by Barclays and Morgan Stanley and (iii) the background of the Merger. Based on these allegations, Plaintiffs allege that (i) the defendants have violated Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder and (ii) members of our board of directors have violated Section 20(a) of the Exchange Act. Plaintiffs also allege, in general and among other things, that the terms of the Merger are (i) unfair to our stockholders and (ii) the result of an inadequate process. Based on these allegations, Plaintiffs seek to enjoin us from proceeding with or consummating the Merger. To the extent that the Merger is consummated before injunctive relief is granted, Plaintiffs seek to have the Merger rescinded. Plaintiffs also seek attorneys’ fees. Plaintiffs have not yet served the defendants, and our date to answer, move to dismiss, or otherwise respond to the lawsuit has not yet been set. We cannot predict the outcome of the lawsuits or any others that might be filed, nor can we predict the amount of time and expense that will be required to resolve the lawsuits. We intend to vigorously defend the lawsuits. There were no environmental reserves recorded on our balance sheet at June 30, 2016 and December 31, 2015 associated with continuing operations. Third Party Midstream Service Agreements (Gathering & Processing) The Company has an existing amended and restated midstream service agreement with ETC Field Services LLC (formerly known as Regency Field Services LLC) (“ETC”) for the gathering and processing of natural gas in North Louisiana as discussed in our 2015 Form 10-K. ETC is entitled to receive a payback demand fee from us and other third parties equal to 110% of certain infrastructure improvement costs. The payback demand fee is based upon actual volumes gathered, but not less than a specified monthly demand quantity. Until payout is achieved, there is also a monthly demand quantity associated with gathering and processing fees. We have the right to request that gas gathered by ETC be delivered to alternative delivery points for processing (e.g., PennTex). Under these circumstances, ETC assesses us a $0.25 per MMBtu gathering only fee to take gas off its system. Firm Gas Transportation Service Agreement The Company entered into a long-term firm transportation agreement with Regency Intrastate Gas LP (“RIGS”) to assure the delivery of its natural gas to market. This agreement’s primary term terminates on December 31, 2025, subject to one-year extensions at either party’s election. This commitment requires a minimum monthly reservation charge that escalates annually by two percent regardless of whether the contracted capacity is used or not. An overrun charge that also escalates annually by two percent applies to gas received in excess of the contracted capacity. In addition to the demand and overrun fees, RIGS retains 1.25% of gas received for fuel. The following table summarizes the reserved capacity and applicable fees associated with this agreement: Period Reserved Capacity (MMBtu/d) Reservation Demand Charge ($/MMBtu) Overrun Charge ($/MMBtu) January 1, 2016 to December 31, 2022 300,000 0.075 0.150 January 1, 2023 to December 31, 2025 200,000 0.075 0.150 In the future, additional receipt points may be developed. The following pricing grid, subject to annual escalation, would apply to gas received at any of these future receipt points. Reservation Demand Charge ($/MMBtu) Commodity Charge ($/MMBtu) Overrun Charge ($/MMBtu) Total gas receipts ≤ 0.075 0.075 n/a Total gas receipts > contracted reserved capacity n/a n/a 0.150 Sales Delivery Commitment Recently, the Company and a third party entered into a contract whereby the Company agreed to sell and deliver NGLs produced at gas processing plants owned and operated by PennTex. The NGLs are delivered to a pipeline owned by an affiliate of the third party. The initial term of the contract terminates on December 31, 2022, subject to one-year extensions at either party’s election. The price we receive is tied to published indices, net of transportation and fractionation deductions. Commencing April 1, 2016, through the end of the initial term of the agreement, the minimum sales volume commitment is 6,000 BPD. If we fail to deliver the minimum sales volume commitment, we will be required to pay a deficiency payment equal to transportation and fractionation deductions on undelivered volumes. Currently, transportation and fractionation deductions are approximately $4.39 per barrel. Related Party Agreements See Note 13 for additional information. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 15. Income Taxes The Company is a corporation subject to federal and state income taxes. The compensation expense associated with the incentive units of MRD Holdco (discussed in Note 12) creates a nondeductible permanent difference for income tax purposes. The Company’s income tax benefit from continuing operations for the three and six months ended June 30, 2016 was $25.3 million and $22.4 million, respectively, compared to $24.6 million of income tax benefit and $22.9 million of income tax expense for the three and six months ended June 30, 2015, respectively. The Company’s effective tax rate from continuing operations for the three and six months ended June 30, 2016 was 11.5% and 10.5%, respectively, compared to 48.1% and 49.0% for the three and six months ended June 30, 2015, respectively. The change in the effective tax rate from 2015 to 2016 was primarily due to a change in non-deductible incentive unit compensation as discussed in Note 12. The effective tax rate for the three and six months ended June 30, 2016 and 2015 differed from the statutory federal income tax rate primarily due to non-deductible incentive unit compensation expense, state income tax, net of federal benefit, and long-term incentive plan compensation expense. We reported no liability for unrecognized tax benefits as of June 30, 2016 and expect no significant change to the unrecognized tax benefits in the next twelve months. Consistent with establishing the deferred tax liability through stockholders’ equity in our initial public offering, we reversed a deferred tax liability of approximately $28.0 million through stockholders’ equity in 2015 attributable to the deferred tax effects of the Property Swap in 2015. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Overview | Overview Memorial Resource Development Corp. (the “Company”) is a publicly traded Delaware corporation, the common shares of which are listed on the NASDAQ Global Market (“NASDAQ”) under the symbol “MRD.” Unless the context requires otherwise, references to “we,” “us,” “our,” “MRD,” or “the Company” are intended to mean the business and operations of Memorial Resource Development Corp. and its consolidated subsidiaries. References to: (i) “Memorial Production Partners,” “MEMP” and “the Partnership” refer to Memorial Production Partners LP individually and collectively with its subsidiaries, as the context requires; (ii) “MEMP GP” refer to Memorial Production Partners GP LLC, the general partner of the Partnership; (iii) “MRD Holdco” refer to MRD Holdco LLC, a holding company controlled by the Funds (defined below) that, together as part of a group, owns a majority of our common stock; (iv) “the Funds” refer collectively to Natural Gas Partners VIII, L.P., Natural Gas Partners IX, L.P. and NGP IX Offshore Holdings, L.P., which collectively control MRD Holdco; and (v) “NGP” refer to Natural Gas Partners, a family of private equity investment funds organized to make direct equity investments in the energy industry, including the Funds. |
Basis of Presentation | Basis of Presentation Our consolidated financial statements include our accounts and those of our subsidiaries in which we have a controlling interest. Under the amended consolidation guidance that we adopted on January 1, 2016 (see Note 2), a limited partnership is considered a variable interest entity (“VIE”) unless a single limited partner or a simple majority of all partners have substantive kick-out or participating rights. The Company determined that MEMP was a VIE and we were deemed the primary beneficiary. On June 1, 2016, we completed the sale of MEMP GP, Beta Operating Company, LLC (“Beta Operating”) and MEMP Services LLC (“Services”) (collectively, the “Disposition Entities”), to MEMP for $0.75 million in cash. This sale was a reconsideration event under the amended consolidation guidance which resulted in the deconsolidation of the Partnership. Our equity statement reflects a loss of $0.1 million related to the deconsolidation of the Disposition Entities and their subsidiaries. Our financial statements have been retrospectively revised to reflect the Disposition Entities and their subsidiaries as discontinued operations for all periods presented (see Note 3). After the completion of the sale, we have one reportable business segment, which is engaged in the acquisition, exploration and development of oil and natural gas properties. All material intercompany transactions and balances have been eliminated in preparation of our consolidated financial statements. Our results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of results expected for the full year. In our opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for fair presentation. Although we believe the disclosures in these financial statements are adequate and make the information presented not misleading, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Our equity statement reflects a $127.1 million equity transfer from stockholders’ equity to noncontrolling interest related to the acquisition by MEMP of certain assets from the Company in East Texas in February 2015 for certain properties in North Louisiana (the “Property Swap”). |
Proposed Merger with Range Resources Corporation | Proposed Merger with Range Resources Corporation On May 15, 2016, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Range Resources Corporation (“Range”), a Delaware corporation, and Medina Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Range (“Merger Sub”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth, the Merger Sub will be merged with and into the Company, with the Company continuing as the surviving entity and a wholly owned subsidiary of Range (“the Merger”). If the Merger is completed, each share of our common stock outstanding immediately before that time (including outstanding shares of our restricted common stock, all of which will become fully vested and unrestricted under the terms of the Merger Agreement) will automatically be converted into the right to receive 0.375 of a share of Range common stock, par value of $0.01 per share (“Range Common Stock”). The Merger is subject to customary closing conditions, including the approval by both Memorial and Range stockholders. We expect the closing of the Merger will occur late in the third quarter of 2016. In connection with the execution of the Merger Agreement, MRD Holdco, Jay Graham (our chief executive officer), Anthony Bahr and WHR Incentive LLC (a limited liability company controlled by Mr. Graham and Mr. Bahr) (collectively, the “Memorial Stockholders”) entered into a voting and support agreement with Range and have agreed to vote all of the shares held by them in favor of the approval and adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement, including the merger. As of June 30, 2016, the Memorial Stockholders hold and are entitled to vote in the aggregate approximately 47.7% of the issued and outstanding shares of our common stock entitled to vote at our special meeting. In addition, certain other stockholders of the Company who are not party to the voting and support agreement are party to an existing voting agreement, as discussed in our 2015 Form 10-K, pursuant to which those stockholders are required to vote all of the shares of our common stock that they own as directed by MRD Holdco. As of June 30, 2016, those additional stockholders hold and are entitled to vote in the aggregate approximately 2.7% of the outstanding shares of our common stock entitled to vote at our special meeting. Upon completion of the Merger, our common stock currently listed on the NASDAQ will cease to be listed for trading on the NASDAQ and will subsequently be deregistered under the Securities Exchange Act of 1934, as amended. |
Use of Estimates | Use of Estimates The preparation of the accompanying unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, oil and natural gas reserves; depreciation, depletion, and amortization of proved oil and natural gas properties; future cash flows from oil and natural gas properties; impairment of long-lived assets; realization of long-term prepaid processing fees; fair value of derivatives; fair value of equity compensation; fair values of assets acquired and liabilities assumed in business combinations, income taxes and asset retirement obligations. |
Oil and Natural Gas Properties | Oil and Natural Gas Properties Oil and natural gas properties consisted of the following at the dates indicated (in thousands): June 30, December 31, 2016 2015 (In thousands) Proved oil and natural gas properties $ 1,984,500 $ 1,740,530 Support equipment and facilities 7,191 4,719 Unproved oil and natural gas properties 417,920 414,759 Total oil and natural gas properties $ 2,409,611 $ 2,160,008 At June 30, 2016 and December 31, 2015, we had $147.4 million and $174.0 million, respectively, capitalized in proved oil and natural gas properties related to wells in various stages of drilling and completion, which have been excluded from the depletion base. |
Accrued liabilities | Accrued liabilities Current accrued liabilities consisted of the following at the dates indicated (in thousands): June 30, December 31, 2016 2015 Accrued capital expenditures $ 24,084 $ 40,197 Accrued interest payable 17,665 17,657 Accrued lease operating expense 1,414 2,031 Accrued general and administrative expenses 5,871 4,030 Accrued ad valorem taxes 1,619 157 Accrued current income taxes 20,007 1,911 Other miscellaneous, including operator advances 1,404 2,893 Total accrued liabilities $ 72,064 $ 68,876 |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flow from continuing operations for the periods presented (in thousands): For the Six Months Ended June 30, 2016 2015 Supplemental cash flows: Cash paid for interest, net of capitalized interest $ 22,418 $ 35,650 Cash paid for taxes 3,800 2,000 Noncash investing and financing activities: Increase (decrease) in capital expenditures in payables and accrued liabilities (16,113 ) 25,560 (Increase) decrease in accounts receivable related to other financial instruments 2,633 — Assumptions of asset retirement obligations related to properties acquired or drilled 530 — |
New Accounting Pronouncements | New Accounting Pronouncements Improvements to Employee Share-Based Payment Accounting . In March 2016, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update to simplify the guidance on employee share-based payment accounting. The update involves several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification in the statement of cash flows. Entities will no longer record excess tax benefits and certain tax deficiencies in additional paid-in capital (“APIC”). Instead, they will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement and the APIC pools will be eliminated. In addition, the new guidance eliminates the requirement that excess tax benefits be realized before companies can recognize them and requires companies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity. Furthermore, the new guidance will increase the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s statutory income tax withholding obligation. The new guidance requires a company to classify the cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation as a financing activity on the statement of cash flows. In addition, companies will now have to elect whether to account for forfeitures on share-based payments by: (i) recognizing forfeitures of awards as they occur or (ii) estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change, as is currently required. The new guidance is effective for reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted, but all of the guidance must be adopted in the same period. The Company is currently assessing the impact the adoption of this new guidance will have on our consolidated financial statements and related disclosures. For the amendments that change the recognition and measurement of share-based payment awards, the new guidance requires transition under a modified retrospective approach, with a cumulative-effect adjustment made to retained earnings as of the beginning of the fiscal period in which the guidance is adopted. Prospective application is required for the accounting for excess tax benefits and tax deficiencies. Entities should apply the new guidance retrospectively for all periods presented related to the classification of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirements. Entities may apply the presentation changes for excess tax benefits in the statement of cash flows either prospectively or retrospectively. Leases. In February 2016, the FASB issued a revision to its lease accounting guidance. The FASB retained a dual model, requiring leases to be classified as either direct financing or operating leases. The classification will be based on criteria that are similar to the current lease accounting treatment. The revised guidance requires lessees to recognize a right-of-use asset and lease liability for all leasing transactions regardless of classification. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The amendments are effective for financial statements issued for annual periods beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted for all entities as of the beginning of an interim or annual reporting period. The revised guidance must be adopted using a modified retrospective transition and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. The Company is currently evaluating the standard and the impact on the Company’s financial statements and related footnote disclosures. Amendments to Consolidation Analysis . In February 2015, the FASB issued an accounting standards update to improve consolidation guidance for certain types of legal entities. The guidance modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities, eliminates the presumption that a general partner should consolidate a limited partnership, affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships, and provides a scope exception from consolidation guidance for certain money market funds. We adopted this guidance on January 1, 2016 and determined that MEMP was a VIE for which the Company is the primary beneficiary for accounting purposes. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. On June 1, 2016, we completed the sale of the Disposition Entities to MEMP as discussed in Note 1, which triggered a reconsideration event under the guidance which resulted in the deconsolidation of the Partnership. Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations and cash flows. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Oil and Natural Gas Properties | Oil and natural gas properties consisted of the following at the dates indicated (in thousands): June 30, December 31, 2016 2015 (In thousands) Proved oil and natural gas properties $ 1,984,500 $ 1,740,530 Support equipment and facilities 7,191 4,719 Unproved oil and natural gas properties 417,920 414,759 Total oil and natural gas properties $ 2,409,611 $ 2,160,008 |
Schedule of Accrued Liabilities | Current accrued liabilities consisted of the following at the dates indicated (in thousands): June 30, December 31, 2016 2015 Accrued capital expenditures $ 24,084 $ 40,197 Accrued interest payable 17,665 17,657 Accrued lease operating expense 1,414 2,031 Accrued general and administrative expenses 5,871 4,030 Accrued ad valorem taxes 1,619 157 Accrued current income taxes 20,007 1,911 Other miscellaneous, including operator advances 1,404 2,893 Total accrued liabilities $ 72,064 $ 68,876 |
Schedule of Supplemental Cash Flow from Continuing Operations | Supplemental cash flow from continuing operations for the periods presented (in thousands): For the Six Months Ended June 30, 2016 2015 Supplemental cash flows: Cash paid for interest, net of capitalized interest $ 22,418 $ 35,650 Cash paid for taxes 3,800 2,000 Noncash investing and financing activities: Increase (decrease) in capital expenditures in payables and accrued liabilities (16,113 ) 25,560 (Increase) decrease in accounts receivable related to other financial instruments 2,633 — Assumptions of asset retirement obligations related to properties acquired or drilled 530 — |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Schedule of Reconciliation of Carrying Amounts of Major Classes of Assets and Liabilities Included as Part of Discontinued Operations | Below is a reconciliation of carrying amounts of major classes of assets and liabilities included as part of discontinued operations as reflected on the balance sheet associated with this disposal transaction (in thousands): December 31, 2015 ASSETS Current assets: Cash and cash equivalents $ 2,175 Accounts receivable 61,404 Short-term derivative instruments 272,320 Prepaid expenses and other current assets 9,642 Total current assets 345,541 Property and equipment, net 1,946,937 Long-term derivative instruments 461,810 Restricted investments 152,631 Other long-term assets 5,053 Total assets $ 2,911,972 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 8,792 Accounts payable - affiliates 193 Revenues payable 27,021 Accrued liabilities 52,923 Short-term derivative instruments 2,850 Total current liabilities 91,779 Long-term debt 2,000,579 Asset retirement obligations 162,989 Long-term derivative instruments 1,441 Deferred tax liabilities 2,094 Total liabilities $ 2,258,882 |
Schedule of Reconciliation of Major Line Items Constituting Pretax Profit (Loss) of Discontinued Operations to After Tax Profit (Loss) of Discontinued Operations | Below is a reconciliation of major line items constituting pretax profit (loss) of discontinued operations to the after tax profit (loss) of discontinued operations that are presented in the statement of operations (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 Revenues: Oil & natural gas sales $ 43,806 $ 97,221 $ 104,429 $ 189,170 Other revenues 186 917 429 1,786 Total revenues 43,992 98,138 104,858 190,956 Costs and expenses: Lease operating 19,347 44,888 55,043 85,366 Gathering, processing, and transportation 6,166 9,548 15,375 18,214 Exploration 3 32 125 122 Taxes other than income 2,534 6,058 6,542 12,713 Depreciation, depletion, and amortization 29,954 46,286 74,383 97,552 Impairment of proved oil and natural gas properties — — 8,342 251,347 General and administrative (1) 9,092 14,377 22,616 28,888 Accretion of asset retirement obligations 1,828 1,686 4,535 3,320 (Gain) loss on commodity derivative instruments 104,365 61,403 52,620 (84,056 ) (Gain) loss on sale of properties — — (96 ) — Other, net — (943 ) 119 (943 ) Total costs and expenses 173,289 183,335 239,604 412,523 Operating income (loss) (129,297 ) (85,197 ) (134,746 ) (221,567 ) Other income (expense): Interest expense, net (19,142 ) (27,910 ) (51,694 ) (56,728 ) Other, net 26,014 124 26,014 284 Total other income (expense) 6,872 (27,786 ) (25,680 ) (56,444 ) Pretax profit (loss) of discontinued operations (122,425 ) (112,983 ) (160,426 ) (278,011 ) Income tax benefit (expense) — (876 ) (96 ) 1,494 Net income (loss) from discontinued operations $ (122,425 ) $ (113,859 ) $ (160,522 ) $ (276,517 ) (1) Included $4.4 million and $12.2 million, for the three and six months ended June 30, 2016; and $8.5 million and $17.0 million for the three and six months ended June 30, 2015 that was allocated to discontinued operations under an omnibus agreement. This omnibus agreement was terminated on June 1, 2016, and we entered into a transition services agreement (“TSA”) with MEMP to manage post-closing separation costs and activities through February 2017. At June 30, 2016, we owed MEMP approximately $1.9 million under the TSA. |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Transaction-Related Costs | Transaction-related costs, which include costs associated with our proposed Merger with Range, are included in general and administrative expenses in the accompanying statements of operations for the periods indicated below (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 $ 6,179 $ 126 $ 6,209 $ 1,407 |
Fair Value Measurements of Fi26
Fair Value Measurements of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the gross derivative assets and liabilities that are measured at fair value on a recurring basis at June 30, 2016 and December 31, 2015 for each of the fair value hierarchy levels: Fair Value Measurements at June 30, 2016 Using Quoted Prices in Significant Other Significant Active Observable Unobservable Market Inputs Inputs (Level 1) (Level 2) (Level 3) Fair Value (In thousands) Assets: Commodity derivatives $ — $ 135,658 $ — $ 135,658 Liabilities: Commodity derivatives $ — $ 550 $ — $ 550 Fair Value Measurements at December 31, 2015 Using Quoted Prices in Significant Other Significant Active Observable Unobservable Market Inputs Inputs (Level 1) (Level 2) (Level 3) Fair Value (In thousands) Assets: Commodity derivatives $ — $ 319,762 $ — $ 319,762 Liabilities: Commodity derivatives $ — $ 480 $ — $ 480 |
Risk Management and Derivativ27
Risk Management and Derivative and Other Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Schedule of Open Commodity Positions | At June 30, 2016, we had the following open commodity positions (excluding embedded derivatives): Remaining 2016 2017 Natural Gas Derivative Contracts: Fixed price swap contracts: Average Monthly Volume (MMBtu) 3,120,000 1,770,000 Weighted-average fixed price $ 4.06 $ 4.24 Collar contracts: Average Monthly Volume (MMBtu) 1,000,000 1,050,000 Weighted-average floor price $ 4.00 $ 4.00 Weighted-average ceiling price $ 4.71 $ 5.06 Purchased put option contracts: Average Monthly Volume (MMBtu) 6,700,000 5,350,000 Weighted-average strike price $ 3.54 $ 3.48 Weighted-average deferred premium $ (0.34 ) $ (0.32 ) TGT Z1 basis swaps: Average Monthly Volume (MMBtu) 1,120,000 200,000 Spread - Henry Hub $ (0.10 ) $ (0.08 ) Crude Oil Derivative Contracts: Fixed price swap contracts: Average Monthly Volume (Bbls) 32,833 28,000 Weighted-average fixed price $ 83.91 $ 84.70 Collar contracts: Average Monthly Volume (Bbls) 26,600 — Weighted-average floor price $ 80.00 $ — Weighted-average ceiling price $ 99.70 $ — NGL Derivative Contracts: Fixed price swap contracts: Average Monthly Volume (Bbls) 366,758 — Weighted-average fixed price $ 39.93 $ — At June 30, 2016, we had the following open embedded derivative positions: Remaining 2016 Oil Hybrid Contracts: Fixed price swap contracts: Average Monthly Volume (Bbls) 27,211 Weighted-average fixed price $ 46.50 Initial net investment price 62.29 Total contract swap price $ 108.79 NGL Hybrid Contracts: Fixed price swap contracts: Average Monthly Volume (Bbls) 111,175 Weighted-average fixed price $ 15.77 Initial net investment price 25.61 Total contract swap price $ 41.38 |
Summary of Gross Fair Value and Net Recorded Fair Value of Derivative Instruments by Appropriate Balance Sheet Classification | The following table summarizes both: (i) the gross fair value of derivative instruments by the appropriate balance sheet classification even when the derivative instruments are subject to netting arrangements and qualify for net presentation in the balance sheet and (ii) the net recorded fair value as reflected on the balance sheet at June 30, 2016 and December 31, 2015. There was no cash collateral received or pledged associated with our derivative instruments since most of the counterparties, or certain of their affiliates, to our derivative contracts are lenders under our collective credit agreements. Asset Derivatives Liability Derivatives June 30, December 31, June 30, December 31, Type Balance Sheet Location 2016 2015 2016 2015 (In thousands) Commodity contracts Short-term derivative instruments $ 98,937 $ 228,349 $ 343 $ 358 Netting arrangements Short-term derivative instruments (343 ) (358 ) (343 ) (358 ) Net recorded fair value Short-term derivative instruments $ 98,594 $ 227,991 $ — $ — Commodity contracts Long-term derivative instruments $ 36,721 $ 91,413 $ 207 $ 122 Netting arrangements Long-term derivative instruments (207 ) (122 ) (207 ) (122 ) Net recorded fair value Long-term derivative instruments $ 36,514 $ 91,291 $ — $ — |
Schedule of Gains and Losses Related to Derivative Instruments | The following table details the gains and losses related to derivative instruments for the periods indicated (in thousands): For the Three Months Ended For the Six Months Ended Statements of June 30, June 30, Operations Location 2016 2015 2016 2015 Commodity derivative contracts (Gain) loss on commodity derivatives $ 90,617 $ 30,463 $ 54,175 $ (77,727 ) |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Summary of Changes in Asset Retirement Obligations | The following table presents the changes in the asset retirement obligations for the six months ended June 30, 2016 (in thousands): Asset retirement obligations at beginning of period $ 10,079 Liabilities added from acquisitions or drilling 530 Revision of estimates (125 ) Accretion expense 295 Asset retirement obligations at end of period $ 10,779 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Consolidated Debt Obligations | The following table presents our consolidated debt obligations at the dates indicated: June 30, December 31, 2016 2015 (In thousands) $2.0 billion revolving credit facility, variable-rate, due June 2019 $ 514,000 $ 423,000 5.875% senior unsecured notes, due July 2022 ("Senior Notes") (1) (2) 600,000 600,000 Unamortized debt issuance costs (10,098 ) (10,936 ) Total long-term debt $ 1,103,902 $ 1,012,064 (1) The estimated fair value of this fixed-rate debt was $598.5 million and $525.0 million at June 30, 2016 and December 31, 2015, respectively. (2) The estimated fair value is based on quoted market prices and is classified as Level 2 within the fair value hierarchy. |
Borrowing Base Credit Facility | The borrowing base for our credit facility was the following at the date indicated (in thousands): June 30, 2016 $2.0 billion revolving credit facility, variable-rate, due June 2019 $ 1,000,000 |
Summary of Weighted-Average Interest Rates Paid On Variable-Rate Debt Obligations | Weighted-Average Interest Rates The following table presents the weighted-average interest rates paid on our consolidated variable-rate debt obligations for the periods presented: For the Three Months Ended For the Six Months Ended Credit Facility June 30, June 30, 2016 2015 2016 2015 Revolving credit facility (1) 2.49 % 1.70 % 2.38 % 1.80 % (1) As noted in the 2015 10-K, the Applicable Margin (as defined in our revolving credit facility), or credit spread, varies based on the total commitment usage (which is the ratio of outstanding borrowings and letters of credit to the borrowing base then in effect). The Applicable Margin for the three months and six months ended for June 30, 2016 was 2.00% and 1.90%, respectively. The Applicable Margin for the three months and six months ended June 30, 2015, was 1.50% and 1.57%, respectively. |
Summary of Unamortized Deferred Financing Costs Associated with Consolidated Debt Obligations | Unamortized deferred financing costs associated with our consolidated debt obligations were as follows at the dates indicated: June 30, December 31, 2016 2015 (In thousands) Revolving credit facility $ 4,292 $ 4,976 Senior Notes 10,098 10,936 Total unamortized deferred financing costs 14,390 15,912 |
Stockholders' Equity and Nonc30
Stockholders' Equity and Noncontrolling Interests (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Summary of Changes In Common Shares Issued | The Company's authorized capital stock includes 600,000,000 shares of common stock, $0.01 par value per share. The following is a summary of the changes in our common shares issued for the six months ended June 30, 2016: Balance December 31, 2015 205,293,743 Restricted common shares issued (Note 11) 1,117,606 Restricted common shares repurchased (1) (363,159 ) Restricted common shares forfeited (9,877 ) Balance June 30, 2016 206,038,313 (1) Restricted common shares are generally net-settled by shareholders to cover the required withholding tax upon vesting. Participants surrendered shares with value equivalent to the employee’s minimum statutory obligation for the applicable income and other employment taxes. Total payments remitted for the employees’ tax obligations to the appropriate taxing authorities were approximately $5.7 million. These net-settlements had the effect of shares repurchased by the Company as they reduced the number of shares that would have otherwise been outstanding as a result of the vesting and did not represent an expense to the Company. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Summary of Calculation of Earnings (Loss) Per Share, or EPS | The following sets forth the calculation of earnings (loss) per share, or EPS, for the periods indicated (in thousands, except per share amounts): For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 Numerator: Net income (loss) from continuing operations available to common stockholders $ (195,833 ) $ (26,614 ) $ (190,116 ) $ 22,121 Net income (loss) from discontinued operations available to common stockholders 128 88 168 227 Denominator: Weighted average common shares outstanding 203,948 189,628 203,807 190,163 Incremental treasury stock method shares (1) 310 364 39 329 Basic EPS from continuing operations $ (0.96 ) $ (0.14 ) $ (0.93 ) $ 0.12 Diluted EPS from continuing operations (1) $ (0.96 ) $ (0.14 ) $ (0.93 ) $ 0.12 Basic EPS from discontinued operations $ — $ — $ — $ — Diluted EPS from discontinued operations (1) $ — $ — $ — $ — (1) The Company determines the more dilutive of either the two-class method or the treasury stock method for diluted EPS. The two-class method was more dilutive for each period presented. The incremental treasury stock method shares were excluded from the computation of diluted EPS because the inclusion of such shares would have been anti-dilutive. |
Long-Term Incentive Plans (Tabl
Long-Term Incentive Plans (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Information Regarding Restricted Common Stock Awards | The following table summarizes information regarding restricted common share awards granted under the Memorial Resource Development Corp. 2014 Long-Term Incentive Plan (“LTIP”) for the periods presented: Number of Shares Weighted-Average Grant Date Fair Value per Share (1) Restricted common shares outstanding at December 31, 2015 1,668,845 $ 18.89 Granted (2) 1,117,606 $ 13.13 Forfeited (9,877 ) $ 18.84 Vested (1,145,885 ) $ 18.87 Restricted common shares outstanding at June 30, 2016 (3) 1,630,689 $ 14.96 (1) Determined by dividing the aggregate grant date fair value of awards issued. (2) The aggregate grant date fair value of restricted common share awards issued in 2016 was $14.7 million based on a grant date market price ranging from $13.08 to $15.58 per share. (3) Effective immediately prior to the effective time of the Merger, each outstanding share of our unvested restricted common stock will fully vest and any applicable restrictions will lapse and, at the effective time of the Merger, each such share will be treated as a share of our common stock, including with respect to the right to receive 0.375 of a fully vested share of Range Common Stock. |
Summary of Amount of Compensation Expense Recognized | The following table summarizes the amount of recognized compensation expense associated with these awards that are reflected in the accompanying statements of operations for the periods presented (in thousands): For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 $ 10,521 $ 1,957 $ 13,673 $ 3,443 |
Incentive Units (Tables)
Incentive Units (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Compensation Related Costs [Abstract] | |
Fair Value of Incentive Units Estimated | The fair value of the incentive units was estimated using a Monte Carlo simulation valuation model with the following assumptions: Exchanged Incentive Units Subsequent Incentive Units Valuation date 6/30/2016 6/30/2016 Dividend yield 0 % 0 % Expected volatility 55.00 % 55.00 % Risk-free rate 0.26 % 0.26 % Expected life (years) 0.25 0.25 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Reserved Capacity and Applicable Fees | The following table summarizes the reserved capacity and applicable fees associated with this agreement: Period Reserved Capacity (MMBtu/d) Reservation Demand Charge ($/MMBtu) Overrun Charge ($/MMBtu) January 1, 2016 to December 31, 2022 300,000 0.075 0.150 January 1, 2023 to December 31, 2025 200,000 0.075 0.150 |
Summary of Pricing Grid Subject to Annual Escalation for Gas Received | The following pricing grid, subject to annual escalation, would apply to gas received at any of these future receipt points. Reservation Demand Charge ($/MMBtu) Commodity Charge ($/MMBtu) Overrun Charge ($/MMBtu) Total gas receipts ≤ 0.075 0.075 n/a Total gas receipts > contracted reserved capacity n/a n/a 0.150 |
Background, Organization and 35
Background, Organization and Basis of Presentation - Additional Information (Detail) $ / shares in Units, $ in Thousands | Jun. 01, 2016USD ($) | Jun. 30, 2016Segment$ / shares | Feb. 28, 2015USD ($) | Jun. 30, 2016USD ($)$ / shares | Jun. 30, 2015USD ($) | May 15, 2016$ / shares | Dec. 31, 2015$ / shares |
Consolidation And Basis Of Presentation [Line Items] | |||||||
Proceeds from sale of subsidiaries | $ 750 | $ 0 | |||||
Number of reportable business segments | Segment | 1 | ||||||
Equity transfer from stockholders’ equity to noncontrolling interest | $ 127,100 | ||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Percentage of voting rights held by stockholders | 47.70% | 47.70% | |||||
Percentage of voting rights held by additional stockholders | 2.70% | 2.70% | |||||
Range Resources Corporation [Member] | Scenario Plan [Member] | |||||||
Consolidation And Basis Of Presentation [Line Items] | |||||||
Share exchange ratio due to merger | 0.375 | ||||||
Common stock, par value | $ / shares | $ 0.01 | ||||||
Disposition Entities [Member] | |||||||
Consolidation And Basis Of Presentation [Line Items] | |||||||
Proceeds from sale of subsidiaries | $ 750 | ||||||
Loss related deconsolidation | $ (100) |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Schedule of Oil and Natural Gas Properties (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Proved oil and natural gas properties | $ 1,984,500 | $ 1,740,530 |
Support equipment and facilities | 7,191 | 4,719 |
Unproved oil and natural gas properties | 417,920 | 414,759 |
Total oil and natural gas properties | $ 2,409,611 | $ 2,160,008 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Capitalized in proved oil and natural gas properties | $ 147.4 | $ 174 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Schedule of Accrued Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Accrued capital expenditures | $ 24,084 | $ 40,197 |
Accrued interest payable | 17,665 | 17,657 |
Accrued lease operating expense | 1,414 | 2,031 |
Accrued general and administrative expenses | 5,871 | 4,030 |
Accrued ad valorem taxes | 1,619 | 157 |
Accrued current income taxes | 20,007 | 1,911 |
Other miscellaneous, including operator advances | 1,404 | 2,893 |
Total accrued liabilities | $ 72,064 | $ 68,876 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Schedule of Supplemental Cash Flow from Continuing Operations (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Supplemental cash flows: | ||
Cash paid for interest, net of capitalized interest | $ 22,418 | $ 35,650 |
Cash paid for taxes | 3,800 | 2,000 |
Noncash investing and financing activities: | ||
Increase (decrease) in capital expenditures in payables and accrued liabilities | (16,113) | 25,560 |
(Increase) decrease in accounts receivable related to other financial instruments | 2,633 | 0 |
Assumptions of asset retirement obligations related to properties acquired or drilled | $ 530 | $ 0 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Reconciliation of Carrying Amounts of Major Classes of Assets and Liabilities Included as Part of Discontinued Operations (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | May 31, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | |||||
Cash and cash equivalents | $ 14,960 | $ 2,175 | $ 4,701 | $ 2,594 | |
Short-term derivative instruments | $ 98,594 | 227,991 | |||
Total current assets | 0 | 345,541 | |||
Long-term derivative instruments | 36,514 | 91,291 | |||
Current liabilities: | |||||
Accounts payable - affiliates | 8,062 | 5,016 | |||
Revenues payable | 34,117 | 34,026 | |||
Total current liabilities | 0 | 91,779 | |||
Long-term debt | 1,103,902 | 1,012,064 | |||
Asset retirement obligations | $ 10,779 | 10,079 | |||
Disposition Entities [Member] | Discontinued Operations [Member] | |||||
Current assets: | |||||
Cash and cash equivalents | 2,175 | ||||
Accounts receivable | 61,404 | ||||
Short-term derivative instruments | 272,320 | ||||
Prepaid expenses and other current assets | 9,642 | ||||
Total current assets | 345,541 | ||||
Property and equipment, net | 1,946,937 | ||||
Long-term derivative instruments | 461,810 | ||||
Restricted investments | 152,631 | ||||
Other long-term assets | 5,053 | ||||
Total assets | 2,911,972 | ||||
Current liabilities: | |||||
Accounts payable | 8,792 | ||||
Accounts payable - affiliates | 193 | ||||
Revenues payable | 27,021 | ||||
Accrued liabilities | 52,923 | ||||
Short-term derivative instruments | 2,850 | ||||
Total current liabilities | 91,779 | ||||
Long-term debt | 2,000,579 | ||||
Asset retirement obligations | 162,989 | ||||
Long-term derivative instruments | 1,441 | ||||
Deferred tax liabilities | 2,094 | ||||
Total liabilities | $ 2,258,882 |
Discontinued Operations - Sch41
Discontinued Operations - Schedule of Reconciliation of Major Line Items Constituting Pretax Profit (Loss) of Discontinued Operations to After Tax Profit (Loss) of Discontinued Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Revenues: | |||||
Oil & natural gas sales | $ 98,986 | $ 78,605 | $ 180,064 | $ 165,628 | |
Costs and expenses: | |||||
Lease operating | 8,189 | 3,854 | 14,903 | 9,076 | |
Gathering, processing, and transportation | 23,353 | 14,289 | 45,294 | 29,052 | |
Exploration | 4,612 | 2,230 | 7,058 | 2,956 | |
Taxes other than income | 2,991 | 3,140 | 5,855 | 5,915 | |
Accretion of asset retirement obligations | 156 | 93 | 295 | 216 | |
(Gain) loss on commodity derivative instruments | 90,617 | 30,463 | 54,175 | (77,727) | |
(Gain) loss on sale of properties | 50 | 50 | 50 | ||
Other income (expense): | |||||
Interest expense, net | (12,767) | (9,613) | (24,124) | (19,369) | |
Other, net | (112) | (52) | (108) | (101) | |
Total other income (expense) | (12,879) | (9,665) | (24,232) | (19,470) | |
Pretax profit (loss) of discontinued operations | (122,425) | (112,983) | (160,426) | (278,011) | |
Income tax benefit (expense) | (876) | (96) | 1,494 | ||
Net income (loss) from discontinued operations | (122,425) | (113,859) | (160,522) | (276,517) | |
Disposition Entities [Member] | Discontinued Operations [Member] | |||||
Revenues: | |||||
Oil & natural gas sales | 43,806 | 97,221 | 104,429 | 189,170 | |
Other revenues | 186 | 917 | 429 | 1,786 | |
Total revenues | 43,992 | 98,138 | 104,858 | 190,956 | |
Costs and expenses: | |||||
Lease operating | 19,347 | 44,888 | 55,043 | 85,366 | |
Gathering, processing, and transportation | 6,166 | 9,548 | 15,375 | 18,214 | |
Exploration | 3 | 32 | 125 | 122 | |
Taxes other than income | 2,534 | 6,058 | 6,542 | 12,713 | |
Depreciation, depletion, and amortization | 29,954 | 46,286 | 74,383 | 97,552 | |
Impairment of proved oil and natural gas properties | 0 | 0 | 8,342 | 251,347 | |
General and administrative | [1] | 9,092 | 14,377 | 22,616 | 28,888 |
Accretion of asset retirement obligations | 1,828 | 1,686 | 4,535 | 3,320 | |
(Gain) loss on commodity derivative instruments | 104,365 | 61,403 | 52,620 | (84,056) | |
(Gain) loss on sale of properties | 0 | 0 | (96) | 0 | |
Other, net | 0 | (943) | 119 | (943) | |
Total costs and expenses | 173,289 | 183,335 | 239,604 | 412,523 | |
Operating income (loss) | (129,297) | (85,197) | (134,746) | (221,567) | |
Other income (expense): | |||||
Interest expense, net | (19,142) | (27,910) | (51,694) | (56,728) | |
Other, net | 26,014 | 124 | 26,014 | 284 | |
Total other income (expense) | 6,872 | (27,786) | (25,680) | (56,444) | |
Pretax profit (loss) of discontinued operations | (122,425) | (112,983) | (160,426) | (278,011) | |
Income tax benefit (expense) | 0 | (876) | (96) | 1,494 | |
Net income (loss) from discontinued operations | $ (122,425) | $ (113,859) | $ (160,522) | $ (276,517) | |
[1] | (1) Included $4.4 million and $12.2 million, for the three and six months ended June 30, 2016; and $8.5 million and $17.0 million for the three and six months ended June 30, 2015 that was allocated to discontinued operations under an omnibus agreement. This omnibus agreement was terminated on June 1, 2016, and we entered into a transition services agreement (“TSA”) with MEMP to manage post-closing separation costs and activities through February 2017. At June 30, 2016, we owed MEMP approximately $1.9 million under the TSA. |
Discontinued Operations - Sch42
Discontinued Operations - Schedule of Reconciliation of Major Line Items Constituting Pretax Profit (Loss) of Discontinued Operations to After Tax Profit (Loss) of Discontinued Operations (Parenthetical) (Detail) - Disposition Entities [Member] - Discontinued Operations [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
General and administrative | [1] | $ 9,092 | $ 14,377 | $ 22,616 | $ 28,888 |
Omnibus Agreement [Member] | |||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
General and administrative | 4,400 | $ 8,500 | 12,200 | $ 17,000 | |
Transition Services Agreement [Member] | MEMP [Member] | |||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |||||
General and administrative expense payable | $ 1,900 | $ 1,900 | |||
[1] | (1) Included $4.4 million and $12.2 million, for the three and six months ended June 30, 2016; and $8.5 million and $17.0 million for the three and six months ended June 30, 2015 that was allocated to discontinued operations under an omnibus agreement. This omnibus agreement was terminated on June 1, 2016, and we entered into a transition services agreement (“TSA”) with MEMP to manage post-closing separation costs and activities through February 2017. At June 30, 2016, we owed MEMP approximately $1.9 million under the TSA. |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) - Discontinued Operations [Member] - MEMP [Member] $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |
Proceeds from sale of furniture, fixtures and other property and equipment | $ 4.2 |
Proceeds from settlement of receivable | 5.4 |
Payments for settlement related to corporate office space | $ 1.9 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Transaction Related Costs (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
General and administrative expense [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquisition related costs | $ 6,179 | $ 126 | $ 6,209 | $ 1,407 |
Acquisitions and Divestitures45
Acquisitions and Divestitures - Additional Information (Detail) $ in Thousands | Jun. 01, 2015USD ($) | Apr. 17, 2015USD ($) | Jun. 30, 2016AcquisitionDivestiture | Jun. 30, 2016USD ($)AcquisitionDivestiture | Jun. 30, 2015USD ($) |
Business Acquisition And Divestiture [Line Items] | |||||
Number of material acquisitions | Acquisition | 0 | 0 | |||
Number of divestitures | Divestiture | 0 | 0 | |||
Proceeds from sale of subsidiaries | $ 750 | $ 0 | |||
North Louisiana [Member] | |||||
Business Acquisition And Divestiture [Line Items] | |||||
Payments to acquire oil and gas properties and leases | $ 4,000 | ||||
Rockies Divestiture [Member] | |||||
Business Acquisition And Divestiture [Line Items] | |||||
Proceeds from sale of subsidiaries | $ 13,600 | ||||
Gain (loss) on sale of oil and gas properties | $ 100 |
Fair Value Measurements of Fi46
Fair Value Measurements of Financial Instruments - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements [Member] - Commodity derivatives [Member] - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Assets: | ||
Fair value of derivative asset | $ 135,658 | $ 319,762 |
Liabilities: | ||
Fair value of derivative liability | 550 | 480 |
Quoted Prices in Active Market (Level 1) [Member] | ||
Assets: | ||
Fair value of derivative asset | 0 | 0 |
Liabilities: | ||
Fair value of derivative liability | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets: | ||
Fair value of derivative asset | 135,658 | 319,762 |
Liabilities: | ||
Fair value of derivative liability | 550 | 480 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Assets: | ||
Fair value of derivative asset | 0 | 0 |
Liabilities: | ||
Fair value of derivative liability | $ 0 | $ 0 |
Risk Management and Derivativ47
Risk Management and Derivative and Other Financial Instruments - Additional Information (Detail) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||
Conditional rights of set-off under ISDA Master Agreement reduce the maximum amount of loss due to credit risk | $ 145,800,000 | |
Effect netting arrangements, counterparty exposure | 16,600,000 | |
Derivative asset | 162,400,000 | |
Deferred premiums | 10,500,000 | |
Cash settlement receipt | $ 92,300,000 | |
Other financial assets | 27,253,000 | $ 46,106,000 |
Cash collateral received or pledged | $ 0 |
Risk Management and Derivativ48
Risk Management and Derivative and Other Financial Instruments - Schedule of Open Commodity Positions Excluding Embedded Derivatives (Detail) | 6 Months Ended |
Jun. 30, 2016MMBTU$ / MMBTUbbl | |
Natural Gas Derivative Fixed Price Swap 2017 [Member] | |
Derivative [Line Items] | |
Average Monthly Volume (MMBtu) | MMBTU | 1,770,000 |
Weighted-average fixed price | 4.24 |
Natural Gas Derivative Collar 2017 [Member] | |
Derivative [Line Items] | |
Average Monthly Volume (MMBtu) | MMBTU | 1,050,000 |
Weighted-average floor price | 4 |
Weighted-average ceiling price | 5.06 |
Natural Gas Derivative Put Option 2017 [Member] | Purchased [Member] | |
Derivative [Line Items] | |
Average Monthly Volume (MMBtu) | MMBTU | 5,350,000 |
Weighted-average strike price | 3.48 |
Weighted-average deferred premium | (0.32) |
Natural Gas Derivative TGTZ1 Swap 2017 [Member] | |
Derivative [Line Items] | |
Average Monthly Volume (MMBtu) | MMBTU | 200,000 |
Natural Gas Derivative TGTZ1 Swap Henry Hub 2017 [Member] | |
Derivative [Line Items] | |
Spread | (0.08) |
Crude Oil Derivative Fixed Price Swap 2017 [Member] | |
Derivative [Line Items] | |
Weighted-average fixed price | 84.70 |
Average Monthly Volume (Bbls) | bbl | 28,000 |
Natural Gas Derivative Fixed Price Swap 2016 [Member] | |
Derivative [Line Items] | |
Average Monthly Volume (MMBtu) | MMBTU | 3,120,000 |
Weighted-average fixed price | 4.06 |
Natural Gas Derivative Collar 2016 [Member] | |
Derivative [Line Items] | |
Average Monthly Volume (MMBtu) | MMBTU | 1,000,000 |
Weighted-average floor price | 4 |
Weighted-average ceiling price | 4.71 |
Natural Gas Derivative Put Option 2016 [Member] | Purchased [Member] | |
Derivative [Line Items] | |
Average Monthly Volume (MMBtu) | MMBTU | 6,700,000 |
Weighted-average strike price | 3.54 |
Weighted-average deferred premium | (0.34) |
Natural Gas Derivative TGTZ1 Swap 2016 [Member] | |
Derivative [Line Items] | |
Average Monthly Volume (MMBtu) | MMBTU | 1,120,000 |
Natural Gas Derivative TGTZ1 Swap Henry Hub 2016 [Member] | |
Derivative [Line Items] | |
Spread | (0.10) |
Crude Oil Derivative Fixed Price Swap 2016 [Member] | |
Derivative [Line Items] | |
Weighted-average fixed price | 83.91 |
Average Monthly Volume (Bbls) | bbl | 32,833 |
Crude Oil Derivative Collar 2016 [Member] | |
Derivative [Line Items] | |
Weighted-average floor price | 80 |
Weighted-average ceiling price | 99.70 |
Average Monthly Volume (Bbls) | bbl | 26,600 |
NGL Derivative Fixed Price Swap 2016 [Member] | |
Derivative [Line Items] | |
Weighted-average fixed price | 39.93 |
Average Monthly Volume (Bbls) | bbl | 366,758 |
Risk Management and Derivativ49
Risk Management and Derivative and Other Financial Instruments - Schedule of Open Embedded Derivative Positions (Detail) - 2016 [Member] - Fixed price swap contracts [Member] | 6 Months Ended |
Jun. 30, 2016$ / bblbbl | |
Oil Hybrid Contracts [Member] | |
Derivative [Line Items] | |
Average Monthly Volume (Bbls) | bbl | 27,211 |
Weighted-average fixed price | 46.50 |
Initial net investment price | 62.29 |
Total contract swap price | 108.79 |
NGL Hybrid Contracts [Member] | |
Derivative [Line Items] | |
Average Monthly Volume (Bbls) | bbl | 111,175 |
Weighted-average fixed price | 15.77 |
Initial net investment price | 25.61 |
Total contract swap price | 41.38 |
Risk Management and Derivativ50
Risk Management and Derivative and Other Financial Instruments - Summary of Gross Fair Value and Net Recorded Fair Value of Derivative Instruments by Appropriate Balance Sheet Classification (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Derivative Instruments and Hedges, Assets [Abstract] | ||
Asset Derivatives, Net recorded fair value | $ 98,594 | $ 227,991 |
Asset Derivatives, Net recorded fair value | 36,514 | 91,291 |
Short-term derivative instruments [Member] | ||
Derivative Instruments and Hedges, Assets [Abstract] | ||
Asset Derivatives, Netting arrangements | (343) | (358) |
Liability Derivatives, Netting arrangements | (343) | (358) |
Liability Derivatives, Net recorded fair value | 0 | 0 |
Short-term derivative instruments [Member] | Commodity derivatives [Member] | ||
Derivative Instruments and Hedges, Assets [Abstract] | ||
Asset Derivatives, Gross fair value | 98,937 | 228,349 |
Liability Derivatives, Gross fair value | 343 | 358 |
Long-term derivative instruments [Member] | ||
Derivative Instruments and Hedges, Assets [Abstract] | ||
Asset Derivatives, Netting arrangements | (207) | (122) |
Liability Derivatives, Netting arrangements | (207) | (122) |
Liability Derivatives, Net recorded fair value | 0 | 0 |
Long-term derivative instruments [Member] | Commodity derivatives [Member] | ||
Derivative Instruments and Hedges, Assets [Abstract] | ||
Asset Derivatives, Gross fair value | 36,721 | 91,413 |
Liability Derivatives, Gross fair value | $ 207 | $ 122 |
Risk Management and Derivativ51
Risk Management and Derivative and Other Financial Instruments - Schedule of Gains and Losses Related to Derivative Instruments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Gain (Loss) on Derivative Instruments, Net, Pretax [Abstract] | ||||
(Gain) loss on commodity derivative instruments | $ 90,617 | $ 30,463 | $ 54,175 | $ (77,727) |
Commodity derivative contracts [Member] | ||||
Gain (Loss) on Derivative Instruments, Net, Pretax [Abstract] | ||||
(Gain) loss on commodity derivative instruments | $ 90,617 | $ 30,463 | $ 54,175 | $ (77,727) |
Asset Retirement Obligations -
Asset Retirement Obligations - Summary of Changes in Asset Retirement Obligations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||||
Asset retirement obligations at beginning of period | $ 10,079 | |||
Liabilities added from acquisitions or drilling | 530 | |||
Revision of estimates | (125) | |||
Accretion expense | $ 156 | $ 93 | 295 | $ 216 |
Asset retirement obligations at end of period | $ 10,779 | $ 10,779 |
Long Term Debt - Consolidated D
Long Term Debt - Consolidated Debt Obligations (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | $ (14,390) | $ (15,912) | |
Long-term debt | 1,103,902 | 1,012,064 | |
2.0 Billion Revolving Credit Facility Due June 2019 [Member] | |||
Debt Instrument [Line Items] | |||
Credit facility | 514,000 | 423,000 | |
Unamortized debt issuance costs | (4,292) | (4,976) | |
5.875% Senior Unsecured Notes Due July 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Senior Notes | [1],[2] | 600,000 | 600,000 |
Unamortized debt issuance costs | $ (10,098) | $ (10,936) | |
[1] | The estimated fair value is based on quoted market prices and is classified as Level 2 within the fair value hierarchy. | ||
[2] | The estimated fair value of this fixed-rate debt was $598.5 million and $525.0 million at June 30, 2016 and December 31, 2015, respectively. |
Long Term Debt - Consolidated54
Long Term Debt - Consolidated Debt Obligations (Parenthetical) (Detail) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
2.0 Billion Revolving Credit Facility Due June 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 2,000,000,000 | |
Maturity date | Jun. 18, 2019 | |
5.875% Senior Unsecured Notes Due July 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Maturity date | Jul. 1, 2022 | |
Debt interest rate | 5.875% | |
Estimated fair value of fixed rate debt | $ 598,500,000 | $ 525,000,000 |
Long Term Debt - Additional Inf
Long Term Debt - Additional Information (Detail) | Jun. 01, 2016 |
Guarantor Subsidiaries [Member] | Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Ownership percentage on guarantor subsidiaries | 100.00% |
Long Term Debt - Borrowing Base
Long Term Debt - Borrowing Base Credit Facility (Detail) | Jun. 30, 2016USD ($) |
2.0 Billion Revolving Credit Facility Due June 2019 [Member] | |
Line Of Credit Facility [Line Items] | |
Borrowing base | $ 1,000,000,000 |
Long Term Debt - Borrowing Ba57
Long Term Debt - Borrowing Base Credit Facility (Parenthetical) (Detail) | Jun. 30, 2016USD ($) |
2.0 Billion Revolving Credit Facility Due June 2019 [Member] | |
Line Of Credit Facility [Line Items] | |
Revolving credit facility | $ 2,000,000,000 |
Long Term Debt - Summary of Wei
Long Term Debt - Summary of Weighted-Average Interest Rates Paid On Variable-Rate Debt Obligations (Detail) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
2.0 Billion Revolving Credit Facility Due June 2019 [Member] | |||||
Line Of Credit Facility [Line Items] | |||||
Revolving credit facility, weighted-average interest rates | [1] | 2.49% | 1.70% | 2.38% | 1.80% |
[1] | As noted in the 2015 10-K, the Applicable Margin (as defined in our revolving credit facility), or credit spread, varies based on the total commitment usage (which is the ratio of outstanding borrowings and letters of credit to the borrowing base then in effect). The Applicable Margin for the three months and six months ended for June 30, 2016 was 2.00% and 1.90%, respectively. The Applicable Margin for the three months and six months ended June 30, 2015, was 1.50% and 1.57%, respectively. |
Long Term Debt - Summary of W59
Long Term Debt - Summary of Weighted-Average Interest Rates Paid On Variable-Rate Debt Obligations (Parenthetical) (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Debt Disclosure [Abstract] | ||||
Base rate borrowing percentage | 2.00% | 1.50% | 1.90% | 1.57% |
Long Term Debt - Summary of Una
Long Term Debt - Summary of Unamortized Deferred Financing Costs Associated with Consolidated Debt Obligations (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Unamortized deferred financing costs | $ 14,390 | $ 15,912 |
2.0 Billion Revolving Credit Facility Due June 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized deferred financing costs | 4,292 | 4,976 |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized deferred financing costs | $ 10,098 | $ 10,936 |
Stockholders' Equity and Nonc61
Stockholders' Equity and Noncontrolling Interests - Additional Information (Detail) - USD ($) | Mar. 16, 2015 | Apr. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 |
Statement Of Stockholders Equity [Abstract] | |||||
Common stock, shares authorized | 600,000,000 | 600,000,000 | |||
Common stock, par value | $ 0.01 | $ 0.01 | |||
Payments for repurchase of common stock | $ 47,800,000 | $ 47,785,000 | |||
Stock repurchased and retired during period, shares | 2,764,887 | 0 | |||
Stock repurchase program, authorized amount | $ 50,000,000 | ||||
Stock Repurchase Program Expiration Date | 2016-04 |
Stockholders' Equity and Nonc62
Stockholders' Equity and Noncontrolling Interests - Summary of Changes In Common Shares Issued (Detail) | 6 Months Ended |
Jun. 30, 2016shares | |
Class of Stock [Line Items] | |
Beginning Balance | 205,293,743 |
Ending Balance | 206,038,313 |
Common Stock [Member] | |
Class of Stock [Line Items] | |
Restricted common shares issued (Note 11) | 1,117,606 |
Restricted common shares repurchased | (363,159) |
Restricted common shares forfeited | (9,877) |
Stockholders' Equity and Nonc63
Stockholders' Equity and Noncontrolling Interests - Summary of Changes In Common Shares Issued (Parenthetical) (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Statement Of Stockholders Equity [Abstract] | |
Payments remitted for employees tax obligations | $ 5.7 |
Earnings per Share - Summary of
Earnings per Share - Summary of Calculation of Earnings (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Numerator: | |||||
Net income (loss) from continuing operations available to common stockholders | $ (195,833) | $ (26,614) | $ (190,116) | $ 22,121 | |
Net income (loss) from discontinued operations available to common stockholders | $ 128 | $ 88 | $ 168 | $ 227 | |
Denominator: | |||||
Weighted average common shares outstanding | 203,948 | 189,628 | 203,807 | 190,163 | |
Incremental treasury stock method shares | [1] | 310 | 364 | 39 | 329 |
Basic EPS from continuing operations | $ (0.96) | $ (0.14) | $ (0.93) | $ 0.12 | |
Diluted EPS from continuing operations | [1] | (0.96) | (0.14) | (0.93) | 0.12 |
Basic EPS from discontinued operations | 0 | 0 | 0 | 0 | |
Diluted EPS from discontinued operations | [1] | $ 0 | $ 0 | $ 0 | $ 0 |
[1] | The Company determines the more dilutive of either the two-class method or the treasury stock method for diluted EPS. The two-class method was more dilutive for each period presented. The incremental treasury stock method shares were excluded from the computation of diluted EPS because the inclusion of such shares would have been anti-dilutive. |
Long-Term Incentive Plans - Sum
Long-Term Incentive Plans - Summary of Information Regarding Restricted Common Unit Awards (Detail) - Restricted Stock [Member] | 6 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Restricted common shares outstanding, Number of Shares, Beginning Balance | shares | 1,668,845 |
Granted, Number of Shares | shares | 1,117,606 |
Forfeited, Number of Shares | shares | (9,877) |
Vested, Number of Shares | shares | (1,145,885) |
Restricted common shares outstanding, Number of Shares, Ending Balance | shares | 1,630,689 |
Restricted common shares outstanding, Weighted-Average Grant Date Fair Value Per Shares, Beginning Balance | $ / shares | $ 18.89 |
Granted, Weighted-Average Grant Date Fair Value Per Shares | $ / shares | 13.13 |
Forfeited, Weighted-Average Grant Date Fair Value Per Shares | $ / shares | 18.84 |
Vested, Weighted-Average Grant Date Fair Value Per Shares | $ / shares | 18.87 |
Restricted common shares outstanding, Weighted-Average Grant Date Fair Value Per Shares, Ending Balance | $ / shares | $ 14.96 |
Long-Term Incentive Plans - S66
Long-Term Incentive Plans - Summary of Information Regarding Restricted Common Unit Awards (Parenthetical) (Detail) - Restricted Stock [Member] $ / shares in Units, $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($)$ / shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Aggregate grant date fair value | $ | $ 14.7 |
Granted, Weighted-Average Grant Date Fair Value Per Shares | $ 13.13 |
Right to receive fully vested share of range common stock | 0.375 |
Minimum [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Granted, Weighted-Average Grant Date Fair Value Per Shares | $ 13.08 |
Maximum [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Granted, Weighted-Average Grant Date Fair Value Per Shares | $ 15.58 |
Long-Term Incentive Plans - S67
Long-Term Incentive Plans - Summary of Amount of Compensation Expense Recognized (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Restricted Stock [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Amortization of equity awards | $ 10,521 | $ 1,957 | $ 13,673 | $ 3,443 |
Long-Term Incentive Plans - Add
Long-Term Incentive Plans - Additional Information (Detail) - USD ($) $ in Millions | Jun. 01, 2016 | Mar. 09, 2016 | Jun. 30, 2016 |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Unrecognized compensation cost | $ 23.2 | ||
Unrecognized compensation cost weighted-average period | 2 years 5 months 9 days | ||
Fair value of compensation cost reversed | $ 2.5 | $ 0.5 | |
Fair value of compensation cost recognized on the date plan modification | $ 9.8 | $ 1.1 |
Incentive Units - Additional In
Incentive Units - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2016USD ($)shares | Jun. 30, 2016USD ($)shares | |
Equity Incentive Plan [Line Items] | ||
Remaining expected life | 2 years 5 months 9 days | |
MRD Holdco LLC [Member] | ||
Equity Incentive Plan [Line Items] | ||
The number of incentive units authorized by governing documents | 1,000 | 1,000 |
MRD Holdco LLC [Member] | Exchanged Incentive Units [Member] | ||
Equity Incentive Plan [Line Items] | ||
Incentive units granted in an exchange for cancelled predecessor awards | 930 | |
Compensation expense | $ | $ (74.3) | $ (52.6) |
Unrecognized compensation expense | $ | $ 6.2 | $ 6.2 |
Remaining expected life | 3 months | |
MRD Holdco LLC [Member] | Subsequent Incentive Units [Member] | ||
Equity Incentive Plan [Line Items] | ||
Subsequent incentive units | 70 | 70 |
Incentive Units - Fair Value of
Incentive Units - Fair Value of Incentive Units Estimated (Detail) | 6 Months Ended |
Jun. 30, 2016 | |
Exchanged Incentive Units [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Expected volatility | 55.00% |
Risk-free rate | 0.26% |
Expected life (years) | 3 months |
Subsequent Incentive Units [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Expected volatility | 55.00% |
Risk-free rate | 0.26% |
Expected life (years) | 3 months |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Related Party Transaction [Line Items] | ||||
General and administrative | $ 24,021,000 | $ 10,323,000 | $ 35,154,000 | $ 23,299,000 |
Gas Processing Agreement [Member] | ||||
Related Party Transaction [Line Items] | ||||
Deficiency payments | 3,200,000 | 6,500,000 | ||
Gas Processing Agreement [Member] | Other Long-term Assets [Member] | ||||
Related Party Transaction [Line Items] | ||||
Prepaid processing fees | 6,500,000 | 6,500,000 | ||
Cretic Energy Services, LLC [Member] | ||||
Related Party Transaction [Line Items] | ||||
Drilling and completion expenses | 500,000 | 3,800,000 | ||
Multi-Shot, LLC [Member] | ||||
Related Party Transaction [Line Items] | ||||
Drilling and completion expenses | 1,100,000 | 3,500,000 | ||
Multi-Shot, LLC [Member] | Discontinued Operations [Member] | Maximum [Member] | ||||
Related Party Transaction [Line Items] | ||||
Drilling and completion expenses | 100,000 | $ 100,000 | ||
Natural Gas Partners [Member] | North Louisiana [Member] | ||||
Related Party Transaction [Line Items] | ||||
Mineral interests payments | $ 1,100,000 | |||
WHR Management Company [Member] | ||||
Related Party Transaction [Line Items] | ||||
General and administrative | 2,000,000 | |||
Classic Operating And Classic Pipeline [Member] | Water Disposal Agreement [Member] | ||||
Related Party Transaction [Line Items] | ||||
Salt water disposal fees | $ 1,100,000 | $ 2,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 6 Months Ended | |
Jun. 30, 2016USD ($)bbl / d$ / MMBTU$ / bbl | Dec. 31, 2015USD ($) | |
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Environmental reserves liability | $ 0 | |
Agreement termination, date | Dec. 31, 2022 | |
Extension term of gas agreement | 1 year | |
Transportation and fractionation deductions | $ / bbl | 4.39 | |
Sales Delivery Commitment [Member] | April 1, 2016 to December 31, 2022 [Member] | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Minimum sales volume commitment | bbl / d | 6,000 | |
ETC Field Services LLC [Member] | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Payback demand fee received by the third party | 110.00% | |
Natural gas assesses per MMBtu | $ / MMBTU | 0.25 | |
Regency Intrastate Gas LP [Member] | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Agreement termination, date | Dec. 31, 2025 | |
Extension term of gas agreement | 1 year | |
Annual inflation escalator | 2.00% | |
Percentage of retained gas received for fuel | 1.25% | |
Annual inflation escalator for overrun | 2.00% | |
Continuing Operations [Member] | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Environmental reserves liability | $ 0 |
Commitments and Contingencies73
Commitments and Contingencies - Summary of Reserved Capacity and Applicable Fees (Detail) | 6 Months Ended |
Jun. 30, 2016MMBTU / d$ / MMBTU | |
January 1, 2016 to December 31, 2022 [Member] | Reserved Capacity | |
Other Commitments [Line Items] | |
Reserved Capacity | MMBTU / d | 300,000 |
January 1, 2016 to December 31, 2022 [Member] | Reservation Demand Charge | |
Other Commitments [Line Items] | |
Firm gas transportation service fees | 0.075 |
January 1, 2016 to December 31, 2022 [Member] | Overrun Charge | |
Other Commitments [Line Items] | |
Firm gas transportation service fees | 0.150 |
January 1, 2023 to December 31, 2025 [Member] | Reserved Capacity | |
Other Commitments [Line Items] | |
Reserved Capacity | MMBTU / d | 200,000 |
January 1, 2023 to December 31, 2025 [Member] | Reservation Demand Charge | |
Other Commitments [Line Items] | |
Firm gas transportation service fees | 0.075 |
January 1, 2023 to December 31, 2025 [Member] | Overrun Charge | |
Other Commitments [Line Items] | |
Firm gas transportation service fees | 0.150 |
Commitments and Contingencies74
Commitments and Contingencies - Summary of Pricing Grid Subject to Annual Escalation for Gas Received (Detail) | Jun. 30, 2016$ / MMBTU |
Total gas receipts ≤ contracted reserved capacity [Member] | Reservation Demand Charge | |
Other Commitments [Line Items] | |
Firm gas transportation service fees | 0.075 |
Total gas receipts ≤ contracted reserved capacity [Member] | Commodity Charge | |
Other Commitments [Line Items] | |
Firm gas transportation service fees | 0.075 |
Total gas receipts > contracted reserved capacity [Member] | Overrun Charge | |
Other Commitments [Line Items] | |
Firm gas transportation service fees | 0.150 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||
Effective tax rate | 11.50% | 48.10% | 10.50% | 49.00% | |
Income tax expense (benefit) | $ (25,342,000) | $ (24,644,000) | $ (22,405,000) | $ 22,914,000 | |
Unrecognized tax benefits | $ 0 | $ 0 | |||
Reversed deferred tax liability | $ 28,000,000 |