Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 03, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Extraction Oil & Gas, Inc. | |
Entity Central Index Key | 1,655,020 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Entity Current Reporting Status | Yes | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 175,479,079 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 68,249,000 | $ 6,768,000 |
Accounts receivable | ||
Trade | 42,118,000 | 46,047,000 |
Oil, natural gas and NGL sales | 93,367,000 | 93,301,000 |
Inventory and prepaid expenses | 24,308,000 | 13,017,000 |
Commodity derivative asset | 15,313,000 | 4,132,000 |
Total Current Assets | 243,355,000 | 163,265,000 |
Property and Equipment (successful efforts method), at cost: | ||
Proved oil and gas properties | 3,564,549,000 | 3,011,526,000 |
Unproved oil and gas properties | 684,375,000 | 686,968,000 |
Wells in progress | 113,019,000 | 127,418,000 |
Less: accumulated depletion, depreciation and amortization | (908,169,000) | (709,662,000) |
Net oil and gas properties | 3,453,774,000 | 3,116,250,000 |
Gathering Systems And Facilities, Successful Effort Method, Net | 26,417,000 | 4,889,000 |
Other property and equipment, net of accumulated depreciation | 30,186,000 | 32,429,000 |
Net Property and Equipment | 3,510,377,000 | 3,153,568,000 |
Non-Current Assets: | ||
Commodity derivative asset | 266,000 | 0 |
Goodwill and other intangible assets, net of accumulated amortization | 55,757,000 | 55,453,000 |
Other non-current assets | 14,305,000 | 12,383,000 |
Total Non-Current Assets | 70,328,000 | 67,836,000 |
Total Assets | 3,824,060,000 | 3,384,669,000 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 252,051,000 | 211,581,000 |
Revenue payable | 87,943,000 | 52,805,000 |
Production taxes payable | 63,236,000 | 37,444,000 |
Commodity derivative liability | 153,567,000 | 67,428,000 |
Accrued interest payable | 22,411,000 | 23,807,000 |
Asset retirement obligations | 12,792,000 | 6,873,000 |
Total Current Liabilities | 592,000,000 | 399,938,000 |
Long-term Line of Credit, Noncurrent | 190,000,000 | 90,000,000 |
Non-Current Liabilities: | ||
Senior Notes, net of unamortized debt issuance costs | 1,131,579,000 | 933,361,000 |
Production taxes payable | 51,931,000 | 57,982,000 |
Commodity derivative liability | 6,245,000 | 17,274,000 |
Other non-current liabilities | 7,858,000 | 5,973,000 |
Asset retirement obligations | 56,838,000 | 62,667,000 |
Deferred tax liability | 32,426,000 | 42,326,000 |
Total Non-Current Liabilities | 1,476,877,000 | 1,209,583,000 |
Total Liabilities | 2,068,877,000 | 1,609,521,000 |
Commitments and Contingencies—Note 11 | ||
Series A Convertible Preferred Stock, $0.01 par value; 50,000,000 shares authorized; 185,280 issued and outstanding | 161,298,000 | 158,383,000 |
Stockholders' Equity: | ||
Common stock, $0.01 par value; 900,000,000 shares authorized; 175,797,671 and 172,059,814 issued and outstanding | 1,718,000 | 1,718,000 |
Additional paid-in capital | 2,137,371,000 | 2,114,795,000 |
Treasury stock, at cost, 331,305 and 165,385 shares | (4,414,000) | (2,105,000) |
Accumulated deficit | (540,790,000) | (497,643,000) |
Total Stockholders' Equity | 1,593,885,000 | 1,616,765,000 |
Total Liabilities and Stockholders' Equity | $ 3,824,060,000 | $ 3,384,669,000 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Series A Convertible Preferred Stock | ||
Convertible Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Convertible Preferred Stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Convertible Preferred Stock, shares issued (in shares) | 185,280 | 185,280 |
Convertible Preferred Stock, shares outstanding (in shares) | 185,280 | 185,280 |
Common stock, par value and other disclosures | ||
Common stock, Par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 900,000,000 | 900,000,000 |
Common Stock, shares issued (in shares) | 171,893,157 | 171,834,605 |
Common Stock, shares outstanding (in shares) | 171,893,157 | 171,834,605 |
Treasury stock (in shares) | 165,385 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues: | ||||
Oil sales | $ 213,481 | $ 85,394 | $ 393,744 | $ 137,522 |
Natural gas sales | 19,807 | 18,526 | 43,888 | 38,423 |
NGL sales | 26,908 | 15,846 | 52,779 | 33,460 |
Total Revenues | 260,196 | 119,766 | 490,411 | 209,405 |
Operating Expenses: | ||||
Lease operating expenses | 20,774 | 14,125 | 41,477 | 26,161 |
Gas Gathering, Transportation, Marketing and Processing Costs | 9,959 | 10,040 | 17,498 | 20,327 |
Production taxes | 24,389 | 10,511 | 44,712 | 16,964 |
Exploration expenses | 3,021 | 6,438 | 10,288 | 17,250 |
Depletion, depreciation, amortization and accretion | 106,774 | 68,610 | 202,981 | 119,263 |
Impairment of long lived assets | 128 | 0 | 128 | 675 |
(Gain) loss on sale of property and equipment | (59,902) | 0 | (59,902) | 451 |
Acquisition transaction expenses | 0 | 0 | 0 | 68 |
General and administrative expenses | 34,231 | 23,487 | 65,200 | 49,175 |
Total Operating Expenses | 139,374 | 133,211 | 322,382 | 250,334 |
Operating Income (Loss) | 120,822 | (13,445) | 168,029 | (40,929) |
Other Income (Expense): | ||||
Commodity derivatives gain (loss) | (89,511) | 33,876 | (139,839) | 84,298 |
Interest expense | (19,202) | (9,021) | (82,504) | (18,681) |
Other income | 939 | 250 | 1,267 | 818 |
Total Other Income (Expense) | (107,774) | 25,105 | (221,076) | 66,435 |
Income (Loss) Before Income Taxes | 13,048 | 11,660 | (53,047) | 25,506 |
Income tax (expense) benefit | (4,200) | (4,420) | 9,900 | (9,550) |
Net Loss | $ 8,848 | $ 7,240 | $ (43,147) | $ 15,956 |
Earnings Per Common Share | ||||
Basic and diluted (in dollars per share) | $ 0.03 | $ 0.02 | $ (0.29) | $ 0.05 |
Weighted Average Common Shares Outstanding | ||||
Basic and diluted (in shares) | 175,762,000 | 171,835,000 | 174,992,000 | 171,835,000 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS' AND STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2018 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid in Capital | Retained Deficit | Treasury Stock, Common [Member] |
Stock Issued During Period, Shares, Share-based Compensation, Gross | 2,794 | ||||
Balance at beginning of period (in units or shares) at Dec. 31, 2017 | 172,060 | 165 | |||
Balance at beginning of period at Dec. 31, 2017 | $ 1,616,765 | $ 1,718 | $ 2,114,795 | $ (497,643) | $ (2,105) |
CHANGES IN MEMBERS' AND STOCKHOLDERS' EQUITY | |||||
Stock-based compensation | 33,464 | 33,464 | |||
Series A Preferred Stock dividends | (5,443) | (5,443) | |||
Accretion of beneficial conversion feature on Series A Preferred Stock | $ (2,914) | (2,914) | |||
Treasury Stock, Shares, Acquired | 166 | ||||
Treasury Stock, Value, Acquired, Cost Method | $ (2,309) | ||||
Restricted Stock, Shares Issued Net of Shares for Tax Withholdings | 944 | ||||
Payments Related to Tax Withholding for Share-based Compensation | $ (2,531) | ||||
Net loss | (43,147) | (43,147) | |||
Balance at end of period (in units or shares) at Jun. 30, 2018 | 175,798 | 331 | |||
Balance at end of period at Jun. 30, 2018 | $ 1,593,885 | $ 1,718 | $ 2,137,371 | $ (540,790) | $ (4,414) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 68,249 | $ 97,089 |
Cash flows from operating activities: | ||
Net loss | (43,147) | 15,956 |
Reconciliation of net income (loss) to net cash provided by operating activities: | ||
Depletion, depreciation, amortization and accretion | 202,981 | 119,263 |
Abandonment and impairment of unproved properties | 5,922 | 4,560 |
Impairment of long lived assets | 128 | 675 |
(Gain) loss on sale of property and equipment | (59,902) | 451 |
Amortization of debt issuance costs | 11,368 | 1,712 |
Deferred rent | 280 | (156) |
Commodity derivatives (gain) loss | 139,839 | (84,298) |
Settlements on commodity derivatives | (54,279) | (13,240) |
Premiums paid on commodity derivatives | (17,271) | 0 |
Deferred income tax expense (benefit) | (9,900) | 9,550 |
Stock-based compensation | 33,464 | 28,597 |
Equity in earnings of unconsolidated affiliate | (1,043) | 10 |
Proceeds from Equity Method Investment, Distribution | 626 | 0 |
Debt Instrument, Make Whole Provision, Operating Activities | 35,600 | 0 |
Changes in current assets and liabilities: | ||
Accounts receivable—trade | 5,101 | (618) |
Accounts receivable—oil, natural gas and NGL sales | (66) | (10,977) |
Inventory and prepaid expenses | (812) | (103) |
Accounts payable and accrued liabilities | (10,248) | (3,186) |
Revenue payable | 35,138 | 1,336 |
Production taxes payable | 19,741 | (3,109) |
Accrued interest payable | (1,396) | 356 |
Asset retirement expenditures | (5,034) | (952) |
Net cash provided by operating activities | 287,090 | 65,827 |
Cash flows from investing activities: | ||
Oil and gas property additions | (519,154) | (572,105) |
Acquired oil and gas properties | 0 | (17,225) |
Sale of property and equipment | 72,345 | 2,000 |
Payments To Acquire Gathering Systems And Facilities | (16,055) | 0 |
Other property and equipment additions | (2,712) | (5,790) |
Proceeds from Equity Method Investment, Distribution, Return of Capital | (293) | 0 |
Net cash used in investing activities | (465,869) | (593,120) |
Cash flows from financing activities: | ||
Borrowings under credit facility | 430,000 | 0 |
Repayments of Lines of Credit | (330,000) | 0 |
Proceeds from Issuance of Senior Long-term Debt | 739,664 | 0 |
Make-whole premium paid on 2021 Senior Notes | (35,600) | 0 |
Treasury Stock, Value, Acquired, Cost Method | (2,309) | 0 |
Payments Related to Tax Withholding for Share-based Compensation | (2,531) | 0 |
Dividends on Series A Preferred Stock | (5,443) | (4,958) |
Early Repayment of Subordinated Debt | 550,000 | 0 |
Debt issuance costs | (3,055) | (109) |
Equity issuance costs | (466) | (1,487) |
Net cash provided by (used in) financing activities | 240,260 | (6,554) |
Increase (decrease) in cash, cash equivalents and restricted cash | 61,481 | (533,847) |
Cash, cash equivalents and restricted cash at end of the period | 68,249 | 88,689 |
Supplemental cash flow information: | ||
Property and equipment included in accounts payable and accrued liabilities | 197,577 | 134,483 |
Cash paid for interest | 41,607 | 22,256 |
Payment for Debt Extinguishment or Debt Prepayment Cost | 35,329 | 0 |
Promissory Notes Issued to Officers | (35,329) | 0 |
Accretion of beneficial conversion feature of Series A Preferred Stock | 2,914 | 2,627 |
Noncash or Part Noncash Acquisition, Investments Acquired | 0 | 8,191 |
Increase in dividend payable | $ 0 | $ 485 |
Business and Organization
Business and Organization | 6 Months Ended |
Jun. 30, 2018 | |
Limited Liability Company or Limited Partnership, Business Organization and Operations [Abstract] | |
Business and Organization | Business and Organization Extraction Oil & Gas, Inc. (the “Company” or “Extraction”) is an independent oil and gas company focused on the acquisition, development and production of oil, natural gas and NGL reserves in the Rocky Mountain region, primarily in the Wattenberg Field of the Denver-Julesburg Basin (the “DJ Basin”) of Colorado. The Company and its subsidiaries are focused on the acquisition, development and production of oil, natural gas and NGL reserves in the Rocky Mountain region, as well as the design and support of midstream assets to gather and process crude oil and gas production focused in the DJ Basin of Colorado. Extraction is a public company listed for trading on the NASDAQ Global Select Market under the symbol "XOG". On July 3, 2018, Elevation Midstream, LLC (“Elevation”), a Delaware limited liability company and subsidiary of the Company, entered into a securities purchase agreement (the “Securities Purchase Agreement”) with a third party (the "Purchaser"), pursuant to which Elevation agreed to sell 150,000 Preferred Units (the “Elevation Preferred Units”) of Elevation at a price of $990 per Elevation Preferred Unit with an aggregate liquidation preference of $150.0 million (the “Private Placement”), in a transaction exempt from the registration requirements under the Securities Act of 1933, as amended (the “Securities Act”). The Private Placement closed on July 3, 2018 (the “Closing Date”) and resulted in net proceeds of approximately $141.9 million , $25.4 million of which was a reimbursement for previously incurred midstream capital expenditures and general and administrative expenses. These Preferred Units are non-recourse to Extraction. During the twenty-eight months following the Closing Date (the “Commitment Period”), subject to the satisfaction of certain financial and operational metrics and certain other customary closing conditions, Elevation has the right to require the Purchaser to purchase additional Elevation Preferred Units on the terms set forth in the Securities Purchase Agreement. Elevation may require the Purchaser to purchase additional Elevation Preferred Units, in increments of at least $25.0 million , up to an aggregate amount of $350.0 million . During the Commitment Period, Elevation is required to pay the Purchaser a quarterly commitment fee payable in cash or in kind of 1.0% per annum on any undrawn amounts of such additional $350.0 million commitment. The Elevation Preferred Units will entitle the Purchaser to receive quarterly dividends at a rate of 8.0% per annum (the “Dividend”). In respect of quarters ending prior to and including June 30, 2020, the Dividend is payable in cash or in kind at the election of Elevation. After June 30, 2020, the Dividend is payable solely in cash. |
Basis of Presentation, Signific
Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements | Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of the Company, including its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The financial statements included herein were prepared from the records of the Company in accordance with generally accepted accounting principles in the United States (“GAAP”) and the Securities and Exchange Commission rules and regulation for interim financial reporting. In the opinion of management, all adjustments, consisting primarily of normal recurring accruals that are considered necessary for a fair statement of the condensed consolidated financial information, have been included. However, operating results for the period presented are not necessarily indicative of the results that may be expected for a full year. Interim condensed consolidated financial statements and the year-end balance sheet do not include all of the information and notes required by GAAP for audited annual consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes included in the Company’s Annual Report. Significant Accounting Policies The significant accounting policies followed by the Company are set forth in Note 2 to the Company’s consolidated financial statements in its Annual Report, and are supplemented by the notes to the unaudited condensed consolidated financial statements in this report. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report. Recent Accounting Pronouncements In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, which provides clarification and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718 Compensation - Stock Compensation, to a change to the terms or conditions of a share-based payment award. For public entities, the new guidance was effective for fiscal years beginning after December 15, 2017, including interim reporting periods within that reporting period. The Company adopted this ASU on January 1, 2018 and the adoption of this ASU did not have a material impact on the consolidated financial statements and related disclosures. In February 2017, the FASB issued ASU No. 2017-05, which provided clarification regarding the guidance on accounting for the derecognition of nonfinancial assets. For public entities, the new guidance was effective for fiscal years beginning after December 15, 2017, including interim reporting periods within that fiscal year. The Company adopted this ASU on January 1, 2018 and the adoption of this ASU did not have a material impact on the consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. For public entities, the new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim and annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of adopting this ASU, however it is not expected to have a significant effect on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-01, which clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. For public entities, the new guidance was effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU on January 1, 2018 and the adoption of this ASU did not have a material impact on the consolidated financial statements and related disclosures; however, this standard may result in more transactions being accounted for as asset acquisitions rather than business combinations. In November 2016, the FASB issued ASU No. 2016-18, which intends to clarify how entities should present restricted cash and restricted cash equivalents in the statement of cash flows. This amendment was effective retrospectively for reporting periods beginning after December 15, 2017. The Company adopted this ASU on January 1, 2018 and the retrospective adoption increased the Company's beginning and ending cash balances within the statement of cash flows for the three months ended March 31, 2017. The adoption had no other material impact on the cash flow statement and had no impact on the Company's results of operations or financial position. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the consolidated statement of cash flows: As of June 30, December 31, June 30, December 31, 2018 2017 2017 2016 Cash and cash equivalents $ 68,249 $ 6,768 $ 88,689 $ 588,736 Restricted cash included in cash held in escrow — — 8,400 42,200 $ 68,249 $ 6,768 $ 97,089 $ 630,936 In August 2016, the FASB issued ASU No. 2016-15, which addresses eight specific cash flow issues, including presentation of debt prepayments or debt extinguishment costs, with the objective of reducing the existing diversity in practice. For public entities, the new guidance was effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU on January 1, 2018, which requires current period make-whole premiums to be presented in financing activities in the statement of cash flows and prior period debt prepayment costs to be reclassified from operating activities to financing activities in the statement of cash flows; however, there will be no impact to the total change in cash and cash equivalents from period to period. In February 2016, the FASB issued ASU No. 2016-02, which requires lessee recognition on the balance sheet of a right of use asset and a lease liability, initially measured at the present value of the lease payments. It further requires recognition in the income statement of a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight line basis. Finally, it requires classification of all cash payments within operating activities in the statements of cash flows. It is effective for fiscal years commencing after December 15, 2018 and early adoption is permitted. The FASB subsequently issued ASU No. 2017-13, ASU No. 2018-01, ASU No. 2018-10 and ASU No. 2018-11, which provided additional implementation guidance. The Company is currently evaluating the impact this ASU will have on the consolidated financial statements and related disclosures. As a part of the assessment work to-date, the Company has engaged an external consulting firm, is evaluating agreements under this ASU, and is assessing the completeness of the lease population. In May 2014, the FASB issued ASU No. 2014-09, which establishes a comprehensive new revenue recognition model, referred to as ASC 606 - Revenue from Contracts with Customers, designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. The ASU allows for the use of either the full or modified retrospective transition method. In August 2015, the FASB issued ASU No. 2015-14, which deferred ASU No. 2014-09 for one year, and was effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The FASB subsequently issued ASU No. 2016-08, ASU No. 2016-10, ASU No. 2016-11, ASU No. 2016-12, ASU No. 2016-20, ASU No. 2017-13 and ASU No. 2017-14, which provided additional implementation guidance. Refer to —Adoption of ASC 606 for more information. Adoption of ASC 606 On January 1, 2018, the Company adopted ASC 606 - Revenue from Contracts with Customers ("ASC 606"). The Company adopted ASC 606 using the modified retrospective method to apply the new standard to all new contracts entered into on or after January 1, 2018 and all existing contracts for which all (or substantially all) of the revenue has not been recognized under legacy revenue guidance. ASC 606 supersedes previous revenue recognition requirements in ASC 605 and includes a five-step revenue recognition model to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The impact of adoption in the current period results are as follows (in thousands): For the Three Months Ended For the Six Months Ended Under ASC 606 Under ASC 605 Change Under ASC 606 Under ASC 605 Change Revenues: Oil sales $ 213,481 $ 213,481 $ — $ 393,744 $ 393,744 $ — Natural gas sales 19,807 27,603 (7,796 ) 43,888 54,944 (11,056 ) NGL sales 26,908 38,646 (11,738 ) 52,779 69,401 (16,622 ) Total Revenues 260,196 279,730 (19,534 ) 490,411 518,089 (27,678 ) Operating Expenses: Transportation and gathering $ 9,959 $ 29,493 $ (19,534 ) $ 17,498 $ 45,176 $ (27,678 ) Net Income (Loss) $ 8,848 $ 8,848 $ — $ (43,147 ) $ (43,147 ) $ — Changes to sales of natural gas and NGL, and transportation and gathering expenses are due to the conclusion that certain midstream processing entities are the Company's customer in natural gas processing and marketing agreements in accordance with the five-step process in ASC 606. This is a change from previous conclusions reached for these agreements utilizing the principal versus agent indicators under ASC 605 where the Company determined it was the principal, the midstream processor was the agent and the third-party end user was its customer. As a result, the Company modified its presentation of revenues and operating expenses for these agreements. Revenues related to these agreements are now presented on a net basis for proceeds expected to be received from the midstream processing entity. Transportation and gathering expense related to other agreements incurred prior to the transfer of control to the customer at the tailgate of the natural gas processing facilities will continue to be presented as transportation and gathering expense. Revenues from Contracts with Customers Sales of oil, natural gas and NGL are recognized at the point control of the commodity is transferred to the customer and collectability is reasonably assured. The majority of the Company's contracts' pricing provisions are tied to a commodity market index, with certain adjustments based on, among other factors, whether a well delivers to a gathering or transmission line, quality of the oil or natural gas, and prevailing supply and demand conditions. As a result, the price of the oil, natural gas and NGL fluctuates to remain competitive with the other available oil, natural gas and NGL supplies. Oil Sales Under the Company's crude purchase and marketing contracts, the Company generally sells oil production at the wellhead and collects an agreed-upon index price, net of pricing differentials. In this scenario, the Company recognizes revenue when control transfers to the purchaser at the wellhead at the net price received. The Company utilizes the sales method to account for producer imbalances, which continues to be applicable under ASC 606. As of June 30, 2018 , the Company has an oil imbalance of 159 MBbl, which the Company intends to settle with the counterparty in crude oil barrels. Natural Gas and NGL Sales Under the Company's natural gas processing contracts, the Company delivers natural gas to a midstream processing entity at the wellhead or the inlet of the midstream processing entity's system. The midstream processing entity gathers and processes the natural gas and remits proceeds to the Company for the resulting sales of NGL and residue gas. In these scenarios, we evaluate whether we are the principal or the agent in the transaction, and the point at which control of the hydrocarbons transfer to the customer. For those contracts where the Company has concluded the midstream processing entity is the Company's agent and the third-party end user is its customer (generally the Company's fixed-fee gathering and processing agreements), the Company recognizes revenue on a gross basis, with transportation and gathering expense presented as an operating expense in the consolidated statements of operations. Alternatively, for those contracts where the Company has concluded the midstream processing entity is its customer and controls the hydrocarbons (generally the Company's percentage of proceeds gathering and processing agreements), the Company recognizes natural gas and NGL revenues based on the net amount of the proceeds received from the midstream processing company. In certain natural gas processing agreements, the Company may elect to take its residue gas and/or NGL in-kind at the tailgate of the midstream entity's processing plant and subsequently market the product. Through the marketing process, the Company delivers product to the third-party purchaser at a contractually agreed-upon delivery point and receives a specified index price from the purchaser. In this scenario, the Company recognizes revenue when the control transfers to the purchaser at the delivery point based on the index price received from the purchaser. The gathering and processing expense attributable to the gas processing contracts, as well as any transportation expense incurred to deliver the product to the purchaser, are presented as transportation and gathering expense in the consolidated statements of operations. Performance Obligations A significant number of the Company's product sales are short-term in nature with a contract term of one year or less. For those contracts, the Company has utilized the practical expedient in ASC 606-10-50-14 exempting the Company from disclosure of the transaction price of a contract that has an original expected duration of one year or less. For the Company's product sales that have a contract term greater than one year, the Company has utilized the practical expedient in ASC 606-10-50-14(a), which states the Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these sales contracts, each unit of product generally represents a separate performance obligation; therefore future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. The Company records revenue on its oil, natural gas and NGL sales at the time production is delivered to the purchaser. However, settlement statements for certain oil, natural gas and NGL sales may not be received for 30 to 90 days after the date production is delivered, and as a result, the Company is required to estimate the amount of production delivered to the customer and the net commodity price that will be received for the sale of these commodity products. The Company records the differences between the revenue estimated and the actual amounts received for product sales in the month that payment is received from the customer. The Company has internal controls over its revenue estimation process and related accruals, and any identified differences between its revenue estimates and actual revenue received historically have not been significant. For the period from January 1, 2018 to June 30, 2018, revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material. Contract Balances Under the Company's various sales contracts, the Company invoices customers once its performance obligations have been satisfied, at which point payment is unconditional. Accordingly, the Company's product sales contracts do not give rise to contract assets or liabilities under ASC 606. The following table presents the Company's revenues disaggregated by revenue source. Transportation and gathering costs in the following table are not all of the transportation and gathering expenses that the Company incurs, only the expenses that are netted against revenues pursuant to ASC 606. Prior period amounts have not been adjusted under the modified retrospective method. For the Three Months For the Six Months 2018 2017 2018 2017 Revenues: Oil sales $ 213,481 $ 85,394 $ 393,744 $ 137,522 Natural gas sales 27,603 18,526 54,944 38,423 NGL sales 38,646 15,846 69,401 33,460 Transportation and gathering included in revenues (19,534 ) — (27,678 ) — Total Revenues $ 260,196 $ 119,766 $ 490,411 $ 209,405 Other than as disclosed above or in the Company’s Annual Report, there are no other accounting standards applicable to the Company that would have a material effect on the Company’s consolidated financial statements and related disclosures that have been issued but not yet adopted by the Company through the date of this filing. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions and Divestitures August 2018 Divestiture On August 3, 2018, Elevation received $83.6 million upon the sale of assets of DJ Holdings, LLC, a subsidiary of Discovery Midstream Partners, LP, of which Elevation held a 10% membership interest. The Company acquired its interest in exchange for the contribution of nonfinancial assets. April 2018 Divestitures In April 2018, the Company completed various sales of its interests in approximately 15,100 net acres of leasehold and primarily non-producing properties for aggregate sales proceeds of approximately $72.3 million , subject to customary purchase price adjustments, and recognized a gain of $59.9 million for the three and six months ended June 30, 2018 . April 2018 Acquisition On April 19, 2018, the Company acquired an unaffiliated oil and gas company's interest in approximately 1,000 net acres of non-producing leasehold primarily located in Arapahoe County, Colorado, (the "April 2018 Acquisition"). Upon closing the seller received approximately $9.4 million in cash. This transaction has been accounted for as an asset acquisition. The acquisition provided new development opportunities in the Core DJ Basin. January 2018 Acquisition On January 8, 2018, the Company acquired an unaffiliated oil and gas company's interest in approximately 1,200 net acres of non-producing leasehold located in Arapahoe County, Colorado, (the "January 2018 Acquisition"). Upon closing the seller received approximately $11.6 million in cash. This transaction has been accounted for as an asset acquisition. The acquisition provided new development opportunities in the Core DJ Basin. November 2017 Acquisition On November 15, 2017, the Company acquired an unaffiliated oil and gas company's interest in approximately 36,600 net acres of leasehold and primarily non-producing properties located in Arapahoe County, Colorado, (the "November 2017 Acquisition"). Upon closing the seller received $214.3 million in cash, subject to customary purchase price adjustments. The Company also paid $12.2 million for the final settlement payment in April 2018 in conjunction with the November 2017 Acquisition. This transaction has been accounted for as an asset acquisition. The acquisition provided new development opportunities in the Core DJ Basin. July 2017 Acquisition On July 7, 2017, the Company acquired an unaffiliated oil and gas company’s interests in approximately 12,500 net acres of leasehold, and primarily non-producing properties and producing properties located primarily in Adams County, Colorado, along with various other related rights, permits, contracts, equipment, rights of way, gathering systems and other assets (the "July 2017 Acquisition"). Upon closing the seller received total consideration of $84.0 million in cash, subject to customary purchase price adjustments. The effective date for the July 2017 Acquisition is July 1, 2017. This transaction has been accounted for as an asset acquisition. The acquisition provided new development opportunities in the Core DJ Basin. June 2017 Acquisition On June 8, 2017, the Company acquired an unaffiliated oil and gas company’s interests in approximately 160 net acres of leasehold and related producing properties located in Weld County, Colorado (the “June 2017 Acquisition”). The Company paid approximately $13.4 million in cash consideration in connection with the closing of the June 2017 Acquisition. The effective date for the acquisition was January 1, 2017, with purchase price adjustments calculated as of the closing date of June 8, 2017. The acquisition increased the Company's interest in existing operated wells. The acquired producing properties contributed $ 0.8 million and $1.8 million of revenue and $0.7 million and $1.3 million of earnings, respectively, for three and six months ended June 30, 2018 . The acquired producing properties contributed de minimis revenue and earnings for the three and six months ended June 30, 2017. No significant transaction costs related to the acquisition were incurred for the three and six months ended June 30, 2018 and 2017 . The June 2017 Acquisition was accounted for using the acquisition method under ASC 805, Business Combinations , which requires the acquired assets and liabilities to be recorded at fair value as of the acquisition date of June 8, 2017. In August 2017, the Company completed the transaction’s post-closing settlement. The following table summarizes the purchase price and the final allocation of the fair values of assets acquired and liabilities assumed (in thousands): Purchase Price June 8, 2017 Consideration given Cash $ 13,395 Total consideration given $ 13,395 Allocation of Purchase Price Proved oil and gas properties $ 13,495 Total fair value of oil and gas properties acquired $ 13,495 Asset retirement obligations $ (100 ) Fair value of net assets acquired $ 13,395 Pro Forma Financial Information (Unaudited) For the three and six months ended June 30, 2017 , the following pro forma financial information represents the combined results for the Company and the properties acquired in the June 2017 Acquisition as if the acquisition had occurred on January 1, 2017. The June 2017 Acquisition has no impact on the historical results of the Company for the three and six months ended June 30, 2018 . For purposes of pro forma financial information, it was assumed that the June 2017 Acquisition was funded through cash. For the three and six months ended June 30, 2017 , the pro forma financial information includes effects of adjustments for DD&A expense of $1.6 million and income tax expense of $0.6 million . The following pro forma results (in thousands, except per share data) do not include any cost savings or other synergies that may result from the acquisition or any estimated costs that have been or will be incurred by the Company to integrate the properties acquired. Asset acquisitions are not included in pro forma financial information, as it is not required. The pro forma results are not necessarily indicative of what actually would have occurred if the acquisition had been completed as of the beginning of the period, nor are they necessarily indicative of future results. For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2017 Revenues $ 121,930 $ 211,569 Operating expenses $ 135,090 $ 252,213 Net income $ 7,417 $ 16,133 Income per common share, basic and diluted $ 0.02 $ 0.05 |
Long Term Debt
Long Term Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Instrument [Line Items] | |
Long-Term Debt | Long‑Term Debt As of the dates indicated, the Company’s long‑term debt consisted of the following (in thousands): June 30, December 31, Credit facility due August 16, 2022 (or an earlier time as set forth in the credit facility) $ 190,000 $ 90,000 2021 Senior Notes due July 15, 2021 — 550,000 2024 Senior Notes due May 15, 2024 400,000 400,000 2026 Senior Notes due February 1, 2026 750,000 — Unamortized debt issuance costs on Senior Notes (18,421 ) (16,639 ) Total long-term debt 1,321,579 1,023,361 Less: current portion of long-term debt — — Total long-term debt, net of current portion $ 1,321,579 $ 1,023,361 Credit Facility In August 2017, the Company entered into an amendment and restatement of its existing credit facility (prior to amendment and restatement, the "Prior Credit Facility"), to provide aggregate commitments of $1.5 billion with a syndicate of banks, which is subject to a borrowing base. The credit facility matures on the earlier of (a) August 16, 2022, (b) April 15, 2021, if (and only if) (i) the Series A Preferred Stock of the Company (the "Series A Preferred Stock") have not been converted into common equity or redeemed prior to April 15, 2021, and (ii) prior to April 15, 2021, the maturity date of the Series A Preferred Stock has not been extended to a date that is no earlier than six months after August 16, 2022 or (c) the earlier termination in whole of the commitments. No principal payments are generally required until the credit agreement matures or in the event that the borrowing base falls below the outstanding balance. In January 2018, the Company amended its revolving credit facility to (i) increase the borrowing base from $525.0 million to $750.0 million , subject to the current elected commitments of $650.0 million , (ii) increase the maximum amount for the letter of credit issued in favor of a purchaser of its crude oil from $25.0 million to $35.0 million , and (iii) amend certain provisions of the credit agreement, including the commitments and allocations of each lender. In connection with the 2026 Senior Notes Offering (as defined below), the borrowing base was automatically reduced to $700.0 million ; however, the current elected commitments remained at $650.0 million . In February 2018, the Company entered into a consent agreement and amended its revolving credit facility to (i) provide for consent by the lenders to (a) the designation of Elevation Midstream, LLC as an unrestricted subsidiary and (b) the transfer of certain assets by the Company and one of the guarantors to such unrestricted subsidiary; and (ii) amend certain provisions of the credit agreement, including the incurrence of indebtedness covenant to permit certain indebtedness in connection with certain transportation service agreements with such unrestricted subsidiary. In May 2018, the Company amended its revolving credit facility to (i) increase the borrowing base from $700.0 million to $800.0 million , subject to current elected commitments of $650.0 million and (ii) reduce each of the applicable interest rate margins for borrowings by 0.50%. As of June 30, 2018 , the credit facility was subject to a borrowing base of $800.0 million , subject to current elected commitments of $650.0 million . As of June 30, 2018 and, with respect to the Prior Credit Facility, December 31, 2017 , the Company had outstanding borrowings of $190.0 million and $90.0 million , respectively. As of June 30, 2018 and, with respect to the Prior Credit Facility, December 31, 2017 , the Company had standby letters of credit of $35.7 million and $25.7 million , respectively. At June 30, 2018 , the undrawn balance under the credit facility was $460.0 million . As of the date of this filing, the Company has $265.0 million borrowings outstanding under the credit facility. The amount available to be borrowed under the Company's revolving credit facility is subject to a borrowing base that is redetermined semiannually on each May 1 and November 1, and will depend on the volumes of the Company's proved oil and gas reserves and estimated cash flows from these reserves and other information deemed relevant by the administrative agent under the Company's revolving credit facility. Interest on the credit facility is payable at one of the following two variable rates as selected by the Company: a base rate based on the Prime Rate or the Eurodollar rate, based on LIBOR. Either rate is adjusted upward by an applicable margin, based on the utilization percentage of the facility as outlined in the pricing grid below. Additionally, the credit facility provides for a commitment fee of 0.375% to 0.50% , depending on borrowing base usage. The grid below shows the Base Rate Margin and Eurodollar Margin depending on the applicable Borrowing Base Utilization Percentage (as defined in the credit facility) as of the date of this filing: Borrowing Base Utilization Grid Borrowing Base Utilization Percentage Utilization Eurodollar Margin Base Rate Margin Commitment Fee Rate Level 1 < 25% 1.50 % 0.50 % 0.375 % Level 2 ≥ 25% < 50% 1.75 % 0.75 % 0.375 % Level 3 ≥ 50% < 75% 2.00 % 1.00 % 0.500 % Level 4 ≥ 75% < 90% 2.25 % 1.25 % 0.500 % Level 5 ≥ 90% 2.50 % 1.50 % 0.500 % The credit facility contains representations, warranties, covenants, conditions and defaults customary for transactions of this type, including but not limited to: (i) limitations on liens and incurrence of debt covenants; (ii) limitations on dividends, distributions, redemptions and restricted payments covenants; (iii) limitations on investments, loans and advances covenants; and (iv) limitations on the sale of property, mergers, consolidations and other similar transactions covenants. Additionally, the credit facility limits the Company entering into hedges in excess of 85% of its anticipated production volumes. The credit facility also contains financial covenants requiring the Company to comply with a current ratio of its consolidated current assets (includes availability under the revolving credit facility and unrestricted cash and excludes derivative assets) to its consolidated current liabilities (excludes obligations under the revolving credit facility, senior notes and certain derivative liabilities), of not less than 1.0 to 1.0 and to maintain, on the last day of each quarter, a ratio of consolidated debt less cash balances to its consolidated EBITDAX (EBITDAX is defined as net income adjusted for certain cash and non-cash items including DD&A, exploration expense, gains/losses on derivative instruments, amortization of certain debt issuance costs, non-cash compensation expense, interest expense and prepayment premiums on extinguishment of debt) for the four fiscal quarter period most recently ended, of not greater than 4.0 : 1.0 . The Company was in compliance with all financial covenants under the credit facility as of June 30, 2018 and through the filing of this report. Any borrowings under the credit facility are collateralized by substantially all of the assets of the Company and certain of its subsidiaries, including oil and gas properties, personal property and the equity interests of those subsidiaries. The Company has entered into oil and natural gas hedging transactions with several counterparties that are also lenders under the credit facility. The Company’s obligations under these hedging contracts are secured by the collateral securing the credit facility. 2021 Senior Notes In July 2016, the Company issued at par $550.0 million principal amount of 7.875% Senior Notes due July 15, 2021 (the “2021 Senior Notes” and the offering, the “2021 Senior Notes Offering”). The 2021 Senior Notes bore an annual interest rate of 7.875% . The interest on the 2021 Senior Notes was payable on January 15 and July 15 of each year commencing on January 15, 2017. The Company received net proceeds of approximately $537.2 million after deducting discounts and fees. Concurrent with the 2026 Senior Notes Offering (as defined below), the Company commenced a cash tender offer to purchase any and all of its 2021 Senior Notes. On January 24, 2018, the Company received approximately $500.6 million aggregate principal amount of the 2021 Senior Notes which were validly tendered (and not validly withdrawn). As a result, on January 25, 2018, the Company made a cash payment of approximately $534.2 million , which includes a principal of approximately $500.6 million , a make-whole premium of approximately $32.6 million and accrued and unpaid interest of approximately $1.0 million . On February 17, 2018, the Company redeemed approximately $49.4 million aggregate principal amount of the 2021 Senior Notes that remained outstanding after the Tender Offer and made a cash payment of approximately $52.7 million to the remaining holders of the 2021 Senior Notes, which included a make-whole premium of $3.0 million and accrued and unpaid interest of approximately $0.3 million . 2024 Senior Notes In August 2017, the Company issued at par $400.0 million principal amount of 7.375% Senior Notes due May 15, 2024 (the “2024 Senior Notes” and the offering, the “2024 Senior Notes Offering”). The 2024 Senior Notes bear an annual interest rate of 7.375% . The interest on the 2024 Senior Notes is payable on May 15 and November 15 of each year which commenced on November 15, 2017. The Company received net proceeds of approximately $392.6 million after deducting fees. The Company's 2024 Senior Notes are its senior unsecured obligations and rank equally in right of payment with all of its other senior indebtedness and senior to any of its subordinated indebtedness. The Company's 2024 Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of the Company's current subsidiaries and by certain future restricted subsidiaries that guarantees its indebtedness under a credit facility (the “2024 Senior Note Guarantors”). The notes are effectively subordinated to all of the Company's secured indebtedness (including all borrowings and other obligations under its revolving credit facility) to the extent of the value of the collateral securing such indebtedness, and structurally subordinated in right of payment to all existing and future indebtedness and other liabilities (including trade payables) of any of its future subsidiaries that do not guarantee the notes. The 2024 Senior Notes also contain affirmative and negative covenants that, among other things, limit the Company's and the Guarantors' ability to make investments; declare or pay any dividend or make any other payment to holders of the Company’s or any of its Guarantors’ equity interests; repurchase or redeem any equity interests of the Company; repurchase or redeem subordinated indebtedness; incur additional indebtedness or issue preferred stock; create liens; sell assets; enter into agreements that restrict dividends or other payments by restricted subsidiaries; consolidate, merge or transfer all or substantially all of the assets of the Company; engage in transactions with the Company's affiliates; engage in any business other than the oil and gas business; and create unrestricted subsidiaries. The indenture governing the 2024 Senior Notes (the “2024 Senior Notes Indenture”) also contains customary events of default. Upon the occurrence of events of default arising from certain events of bankruptcy or insolvency, the 2024 Senior Notes shall become due and payable immediately without any declaration or other act of the trustee or the holders of the 2024 Senior Notes. Upon the occurrence of certain other events of default, the trustee or the holders of at least 25% in aggregate principal amount of the then outstanding 2024 Senior Notes may declare all outstanding 2024 Senior Notes to be due and payable immediately. 2026 Senior Notes In January 2018, the Company issued at par $750.0 million principal amount of 5.625% Senior Notes due February 1, 2026 (the “2026 Senior Notes” and the offering, the “2026 Senior Notes Offering”). The 2026 Senior Notes bear an annual interest rate of 5.625% . The interest on the 2026 Senior Notes is payable on February 1 and August 1 of each year commencing on August 1, 2018. The Company received net proceeds of approximately $737.9 million million after deducting fees. The Company used $534.2 million of the net proceeds from the 2026 Senior Notes Offering to fund the tender offer for its 2021 Senior Notes, $52.7 million to redeem any 2021 Senior Notes not tendered and the remainder for general corporate purposes. The Company's 2026 Senior Notes are the Company's senior unsecured obligations and rank equally in right of payment with all of the Company's other senior indebtedness and senior to any of the Company's subordinated indebtedness. The Company's 2026 Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of the Company's current subsidiaries and by certain future restricted subsidiaries that guarantee the Company's indebtedness under a credit facility. The 2026 Senior Notes are effectively subordinated to all of the Company's secured indebtedness (including all borrowings and other obligations under the Company's revolving credit facility) to the extent of the value of the collateral securing such indebtedness, and structurally subordinated in right of payment to all existing and future indebtedness and other liabilities (including trade payables) of certain of the Company's future restricted subsidiaries that do not guarantee the 2026 Senior Notes. The 2026 Senior Notes also contain affirmative and negative covenants that, among other things, limit the Company’s and the Guarantors’ ability to make investments; declare or pay any dividend or make any other payment to holders of the Company’s or any of its Guarantors’ equity interests; repurchase or redeem any equity interests of the Company; repurchase or redeem subordinated indebtedness; incur additional indebtedness or issue preferred stock; create liens; sell assets; enter into agreements that restrict dividends or other payments by restricted subsidiaries; consolidate, merge or transfer all or substantially all of the assets of the Company; engage in transactions with the Company’s affiliates; engage in any business other than the oil and gas business; and create unrestricted subsidiaries. The indenture governing the 2026 Senior Notes (the “2026 Senior Notes Indenture”) also contains customary events of default. Upon the occurrence of events of default arising from certain events of bankruptcy or insolvency, the 2026 Senior Notes shall become due and payable immediately without any declaration or other act of the trustee or the holders of the 2026 Senior Notes. Upon the occurrence of certain other events of default, the trustee or the holders of at least 25% in aggregate principal amount of the then outstanding 2026 Senior Notes may declare all outstanding 2026 Senior Notes to be due and payable immediately. Debt Issuance Costs As of June 30, 2018 , the Company had debt issuance costs, net of accumulated amortization, of $4.1 million related to its credit facility which has been reflected on the Company’s balance sheet within the line item other non‑current assets. As of June 30, 2018 , the Company had debt issuance costs, net of accumulated amortization, of $18.4 million related to its 2024 and 2026 Senior Notes (collectively, the "Senior Notes") which has been reflected on the Company's consolidated balance sheet within the line item Senior Notes, net of unamortized debt issuance costs. Debt issuance costs include origination, legal, engineering and other fees incurred in connection with the Company’s credit facility and Senior Notes. For the three and six months ended June 30, 2018 , the Company recorded amortization expense related to debt issuance costs of $0.9 million and $11.4 million , respectively, as compared to $0.9 million and $1.7 million for the three and six months ended June 30, 2017 , respectively. Debt issuance costs for the six months ended June 30, 2018 include $9.4 million of acceleration of amortization expense upon the repayment of the Company's 2021 Senior Notes. The repayment of the Company's 2021 Senior Notes had no impact to amortization expense for the three months ended June 30, 2018 . Interest Incurred on Long‑Term Debt For the three and six months ended June 30, 2018 , the Company incurred interest expense on long‑term debt of $20.4 million and $40.2 million , respectively, as compared to $11.3 million and $22.6 million for the three and six months ended June 30, 2017 , respectively. For the three and six months ended June 30, 2018 , the Company capitalized interest expense on long term debt of $2.1 million and $4.7 million , respectively, as compared to $3.2 million and $5.6 million for the three and six months ended June 30, 2017 , respectively, which has been reflected in the Company’s condensed consolidated financial statements. Also included in interest expense for the six months ended June 30, 2018 is a make-whole premium of $35.6 million related to the Company's repayment of its 2021 Senior Notes in January and February 2018. The repayment of the Company's 2021 Senior Notes had no impact to interest expense for the three months ended June 30, 2018 . |
Commodity Derivative Instrument
Commodity Derivative Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity Derivative Instruments | Commodity Derivative Instruments The Company has entered into commodity derivative instruments, as described below. The Company has utilized swaps, put options and call options to reduce the effect of price changes on a portion of the Company’s future oil and natural gas production. A swap has an established fixed price. When the settlement price is below the fixed price, the counterparty pays the Company an amount equal to the difference between the settlement price and the fixed price multiplied by the hedged contract volume. When the settlement price is above the fixed price, the Company pays its counterparty an amount equal to the difference between the settlement price and the fixed price multiplied by the hedged contract volume. A put option has an established floor price. The buyer of the put option pays the seller a premium to enter into the put option. When the settlement price is below the floor price, the seller pays the buyer an amount equal to the difference between the settlement price and the strike price multiplied by the hedged contract volume. When the settlement price is above the floor price, the put option expires worthless. Some of the Company’s purchased put options have deferred premiums. For the deferred premium puts, the Company agrees to pay a premium to the counterparty at the time of settlement. A call option has an established ceiling price. The buyer of the call option pays the seller a premium to enter into the call option. When the settlement price is above the ceiling price, the seller pays the buyer an amount equal to the difference between the settlement price and the strike price multiplied by the hedged contract volume. When the settlement price is below the ceiling price, the call option expires worthless. The Company combines swaps, purchased put options, purchased call options, sold put options and sold call options in order to achieve various hedging strategies. Some examples of the Company’s hedging strategies are collars which include purchased put options and sold call options, three-way collars which include purchased put options, sold put options and sold call options, and enhanced swaps, which include either sold put options or sold call options with the associated premiums rolled into an enhanced fixed price swap. The objective of the Company’s use of commodity derivative instruments is to achieve more predictable cash flows in an environment of volatile oil and gas prices and to manage its exposure to commodity price risk. While the use of these commodity derivative instruments limits the downside risk of adverse price movements, such use may also limit the Company’s ability to benefit from favorable price movements. The Company may, from time to time, add incremental derivatives to hedge additional production, restructure existing derivative contracts or enter into new transactions to modify the terms of current contracts in order to realize the current value of the Company’s existing positions. The Company does not enter into derivative contracts for speculative purposes. The use of derivatives involves the risk that the counterparties to such instruments will be unable to meet the financial terms of such contracts. The Company’s derivative contracts are currently with twelve counterparties. The Company has netting arrangements with the counterparties that provide for the offset of payables against receivables from separate derivative arrangements with the counterparties in the event of contract termination. The derivative contracts may be terminated by a non-defaulting party in the event of default by one of the parties to the agreement. There are no credit risk related contingent features or circumstances in which the features could be triggered in derivative instruments that are in a net liability position at the end of the reporting period. The Company’s commodity derivative contracts as of June 30, 2018 are summarized below: 2018 2019 NYMEX WTI Crude Swaps: Notional volume (Bbl) 2,100,000 — Weighted average fixed price ($/Bbl) $ 52.91 $ — NYMEX WTI Crude Purchased Puts: Notional volume (Bbl) 4,500,000 8,700,000 Weighted average purchased put price ($/Bbl) $ 49.81 $ 51.19 NYMEX WTI Crude Sold Calls: Notional volume (Bbl) 4,500,000 8,700,000 Weighted average sold call price ($/Bbl) $ 58.33 $ 64.37 NYMEX WTI Crude Sold Puts: Notional volume (Bbl) 6,600,000 8,700,000 Weighted average sold put price ($/Bbl) $ 40.00 $ 41.69 NYMEX HH Natural Gas Swaps: Notional volume (MMBtu) 19,800,000 12,000,000 Weighted average fixed price ($/MMBtu) $ 3.03 $ 2.79 NYMEX HH Natural Gas Purchased Puts: Notional volume (MMBtu) 1,200,000 — Weighted average purchased put price ($/MMBtu) $ 3.00 $ — NYMEX HH Natural Gas Sold Calls: Notional volume (MMBtu) 1,200,000 — Weighted average sold call price ($/MMBtu) $ 3.15 $ — CIG Basis Gas Swaps: Notional volume (MMBtu) 21,460,000 6,000,000 Weighted average fixed basis price ($/MMBtu) $ (0.68 ) $ (0.78 ) The following tables detail the fair value of the Company’s derivative instruments, including the gross amounts and adjustments made to net the derivative instruments for the presentation in the condensed consolidated balance sheets (in thousands): As of June 30, 2018 Location on Balance Sheet Gross Amounts of Recognized Assets and Liabilities Gross Amounts Offsets in the Balance Sheet (1) Net Amounts of Assets and Liabilities Presented in the Balance Sheet Gross Amounts not Offset in the Balance Sheet (2) Net Amounts (3) Current assets $ 86,397 $ (71,084 ) $ 15,313 $ (1,389 ) $ 14,190 Non-current assets $ 15,084 $ (14,818 ) $ 266 $ — $ — Current liabilities $ (224,651 ) $ 71,084 $ (153,567 ) $ 1,389 $ (158,423 ) Non-current liabilities $ (21,063 ) $ 14,818 $ (6,245 ) $ — $ — As of December 31, 2017 Location on Balance Sheet Gross Amounts of Recognized Assets and Liabilities Gross Amounts Offsets in the Balance Sheet (1) Net Amounts of Assets and Liabilities Presented in the Balance Sheet Gross Amounts not Offset in the Balance Sheet (2) Net Amounts (3) Current assets $ 22,118 $ (17,986 ) $ 4,132 $ — $ 4,132 Non-current assets $ 13,686 $ (13,686 ) $ — $ — $ — Current liabilities $ (85,414 ) $ 17,986 $ (67,428 ) $ — $ (84,702 ) Non-current liabilities $ (30,960 ) $ 13,686 $ (17,274 ) $ — $ — (1) Agreements are in place with all of the Company’s financial trading counterparties that allow for the financial right of offset for derivative assets and derivative liabilities at settlement or in the event of a default under the agreements. (2) Netting for balance sheet presentation is performed by current and non‑current classification. This adjustment represents amounts subject to an enforceable master netting arrangement, which are not netted on the condensed consolidated balance sheets. There are no amounts of related financial collateral received or pledged. (3) Net amounts are not split by current and non‑current. All counterparties in a net asset position are shown in the current asset line item and all counterparties in a net liability position are shown in the current liability line item. The table below sets forth the commodity derivatives gain (loss) for the three and six months ended June 30, 2018 and 2017 (in thousands). Commodity derivatives gain (loss) is included under the other income (expense) line item in the condensed consolidated statements of operations. For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Commodity derivatives gain (loss) $ (89,511 ) $ 33,876 $ (139,839 ) $ 84,298 |
Asset Retirement Obligations
Asset Retirement Obligations | 6 Months Ended |
Jun. 30, 2018 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations The Company follows accounting for asset retirement obligations in accordance with ASC 410, Asset Retirement and Environmental Obligations , which requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it was incurred if a reasonable estimate of fair value could be made. The Company’s asset retirement obligations primarily represent the estimated present value of the amounts expected to be incurred to plug, abandon and remediate producing and shut‑in wells at the end of their productive lives in accordance with applicable local, state and federal laws, and applicable lease terms. The Company determines the estimated fair value of its asset retirement obligations by calculating the present value of estimated cash flows related to plugging and abandonment liabilities. The significant inputs used to calculate such liabilities include estimates of costs to be incurred; the Company’s credit adjusted discount rates, inflation rates and estimated dates of abandonment. The asset retirement liability is accreted to its present value each period and the capitalized asset retirement costs are depleted with proved oil and gas properties using the unit of production method. The following table summarizes the activities of the Company’s asset retirement obligations for the period indicated (in thousands): For the Six Months Ended June 30, 2018 For the Year Ended December 31, 2017 Balance beginning of period $ 69,540 $ 56,108 Liabilities incurred or acquired 1,066 9,802 Liabilities settled (5,178 ) (4,169 ) Revisions in estimated cash flows 1,438 2,630 Accretion expense 2,764 5,169 Balance end of period $ 69,630 $ 69,540 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC 820, Fair Value Measurement and Disclosure , establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: • Level 1: Quoted prices are available in active markets for identical assets or liabilities; • Level 2: Quoted prices in active markets for similar assets and liabilities that are observable for the asset or liability; • Level 3: Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations. The financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of 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. There were no transfers between levels during any periods presented below. The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2018 and December 31, 2017 by level within the fair value hierarchy (in thousands): Fair Value Measurements at Level 1 Level 2 Level 3 Total Financial Assets: Commodity derivative assets $ — $ 15,579 $ — $ 15,579 Financial Liabilities: Commodity derivative liabilities $ — $ 159,812 $ — $ 159,812 Fair Value Measurements at Level 1 Level 2 Level 3 Total Financial Assets: Commodity derivative assets $ — $ 4,132 $ — $ 4,132 Financial Liabilities: Commodity derivative liabilities $ — $ 84,702 $ — $ 84,702 The following methods and assumptions were used to estimate the fair value of the assets and liabilities in the table above: Commodity Derivative Instruments The Company determines its estimate of the fair value of derivative instruments using a market based approach that takes into account several factors, including quoted market prices in active markets, implied market volatility factors, quotes from third parties, the credit rating of each counterparty and the Company’s own credit rating. In consideration of counterparty credit risk, the Company assessed the possibility of whether each counterparty to the derivative would default by failing to make any contractually required payments. Additionally, the Company considers that it is of substantial credit quality and has the financial resources and willingness to meet its potential repayment obligations associated with the derivative transactions. Derivative instruments utilized by the Company consist of swaps, put options and call options. The oil and natural gas derivative markets are highly active. Although the Company’s derivative instruments are valued using public indices, the instruments themselves are traded with third party counterparties and are not openly traded on an exchange. As such, the Company has classified these instruments as Level 2. Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, commodity derivative instruments (discussed above) and long-term debt. The carrying values of cash and cash equivalents, accounts receivable and accounts payable are representative of their fair values due to their short-term maturities. The carrying amount of the Company’s credit facility approximated fair value as it bears interest at variable rates over the term of the loan. The fair values of the 2021 Senior Notes, 2024 Senior Notes and 2026 Senior Notes were derived from available market data. As such, the Company has classified the 2021 Senior Notes, 2024 Senior Notes and 2026 Senior Notes as Level 2. Please refer to Note 4 - Long‑Term Debt for further information. The Company’s policy is to recognize transfers between levels at the end of the period. This disclosure (in thousands) does not impact the Company’s financial position, results of operations or cash flows. At June 30, 2018 At December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Credit Facility $ 190,000 $ 190,000 $ 90,000 $ 90,000 2021 Senior Notes (1) $ — $ — $ 540,382 $ 583,000 2024 Senior Notes (2) $ 393,414 $ 419,000 $ 392,979 $ 427,000 2026 Senior Notes (3) $ 738,165 $ 725,625 $ — $ — (1) The carrying amount of the 2021 Senior Notes includes unamortized debt issuance costs of $9.6 million as of December 31, 2017 . There were no unamortized debt issuance costs as of June 30, 2018 . (2) The carrying amount of the 2024 Senior Notes includes unamortized debt issuance costs of $6.6 million and $7.0 million as of June 30, 2018 and December 31, 2017 , respectively. (3) The carrying amount of the 2026 Senior Notes includes unamortized debt issuance costs of $11.8 million as of June 30, 2018 . There were no unamortized debt issuance costs as of December 31, 2017. Non‑Recurring Fair Value Measurements The Company applies the provisions of the fair value measurement standard on a non-recurring basis to its non-financial assets and liabilities, including proved property and goodwill. These assets and liabilities are not measured at fair value on a recurring basis, but are subject to fair value adjustments when facts and circumstances arise that indicate a need for remeasurement. The Company utilizes fair value on a non-recurring basis to review its proved oil and gas properties for potential impairment when events and circumstances indicate a possible decline in the recoverability of the carrying value of such property. The Company uses an income approach analysis based on the net discounted future cash flows of producing property. The future cash flows are based on Management’s estimates for the future. Unobservable inputs include estimates of oil and gas production, as the case may be, from the Company’s reserve reports, commodity prices based on the sales contract terms and forward price curves, operating and development costs and a discount rate based on a market-based weighted average cost of capital (all of which are Level 3 inputs within the fair value hierarchy). No impairment expense was recognized for the three and six months ended June 30, 2018 and 2017 on proved oil and gas properties. The Company applies the provisions of ASC 350, Intangibles-Goodwill and Other . Goodwill represents the excess of the purchase price over the estimated value of the net assets acquired in business combinations. The Company tests goodwill for impairment annually on September 30, or whenever other circumstances or events indicate that the carrying amount of goodwill may not be recoverable. The goodwill test is performed at the reporting unit level, which represents the Company’s oil and gas operations in its core DJ Basin field. If indicators of impairment are determined to exist, an impairment charge is recognized if the carrying value of goodwill exceeds its implied fair value. Any sharp prolonged decreases in the prices of oil and natural gas as well as continued declines in the quoted market price of the Company’s common shares could change the estimates of the fair value of the reporting unit and could result in an impairment charge. The Company performed an assessment as of September 30, 2017, which concluded the fair value of the reporting unit was greater than its carrying amount. The Company performed a qualitative assessment as of June 30, 2018 , which concluded the fair value of the reporting unit was greater than its carrying amount. The Company’s other non-recurring fair value measurements include the purchase price allocations for the fair value of assets and liabilities acquired through business combinations, please refer to Note 3 — Acquisitions and Divestitures . The fair value of assets and liabilities acquired through business combinations is calculated using a discounted cash flow approach using level 3 inputs. Cash flow estimates require forecasts and assumptions for many years into the future for a variety of factors, including risk-adjusted oil and gas reserves, commodity prices, development costs and operating costs, based on market participant assumptions. The fair value of assets or liabilities associated with purchase price allocations is on a non-recurring basis and is not measured in periods after initial recognition. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company computes an estimated annual effective rate each quarter based on the current and forecasted operating results. The income tax expense or benefit associated with the interim period is computed using the most recent estimated annual effective rate applied to the year-to-date ordinary income or loss, plus the tax effect of any significant discrete or infrequently occurring items recorded during the interim period. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income (loss) for the year, projections of the proportion of income earned and taxed in various jurisdictions, permanent differences and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained and additional information becomes known or as the tax environment changes. The effective combined U.S. federal and state income tax rate for the six months ended June 30, 2018 was 18.7% . During the six months ended June 30, 2018 , the Company recognized income tax benefit of $9.9 million . The effective rate for the six months ended June 30, 2018 differs from the statutory U.S. federal income tax rate of 21.0% primarily due to state income taxes and estimated permanent differences. Included as a discrete item during the six months ended June 30, 2018 is the tax deficiency related to equity compensation in excess of compensation recognized for financial reporting. The Company anticipates the potential for increased periodic volatility in future effective tax rates from the impact of stock-based compensation tax deductions as they are treated as discrete tax items. On December 22, 2017, the Tax Cut and Jobs Act (the "TCJA") was enacted, making significant changes to the Internal Revenue Code. The Company calculated its best estimate of the impact of the TCJA in its December 31, 2017 income tax provision in accordance with its understanding of the TCJA and guidance available as of the date of this filing. The Company will continue to assess the income tax effects of the TCJA during 2018. The Company anticipates completing the analysis of the impacts of the TCJA within the one year measurement period provided for under the Security and Exchange Commission's Staff Accounting Bulletin No. 118. During the six months ended June 30, 2018 , the Company made a reasonable estimate and recorded an additional provisional deferred tax asset related to stock-based compensation. There were no additional estimates associated with the TCJA included in the income tax benefit for six months ended June 30, 2018 . |
Unit and Stock-Based Compensati
Unit and Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Unit and Stock-Based Compensation | Stock‑Based Compensation Extraction Long Term Incentive Plan In October 2016, the Company’s board of directors adopted the Extraction Oil & Gas, Inc. 2016 Long Term Incentive Plan (the “2016 Plan” or “LTIP”), pursuant to which employees, consultants and directors of the Company and its affiliates performing services for the Company are eligible to receive awards. The 2016 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, dividend equivalents, other stock-based awards, substitute awards, annual incentive awards and performance awards intended to align the interests of participants with those of stockholders. The Company reserved 20.2 million shares of common stock for issuance pursuant to awards under the LTIP. Extraction has granted awards under the LTIP to certain directors, officers and employees, including stock options, restricted stock units and performance stock awards. Restricted Stock Units Restricted stock units granted under the LTIP (“RSUs”) generally vest over either a one or three year service period, with 100% vesting in year one or 25% , 25% and 50% of the units vesting in year one , two and three , respectively. Grant date fair value was determined based on the value of Extraction’s common stock on the date of issuance. The Company assumed a forfeiture rate of zero as part of the grant date estimate of compensation cost. As of January 1, 2017, the Company elected to account for stock-based compensation forfeitures as they occur, as a result of the adoption of ASU No. 2016-09. The Company recorded $7.5 million and $13.6 million of stock-based compensation costs related to RSUs for the three and six months ended June 30, 2018 , respectively, as compared to $7.8 million and $15.8 million for the three and six months ended June 30, 2017 , respectively. These costs were included in the condensed consolidated statements of operations within the general and administrative expenses line item. As of June 30, 2018 , there was $45.6 million of total unrecognized compensation cost related to the unvested RSUs granted to certain directors, officers and employees that is expected to be recognized over a weighted average period of 1.8 years . The following table summarizes the RSU activity from January 1, 2018 through June 30, 2018 and provides information for RSUs outstanding at the dates indicated. Number of Shares Weighted Average Grant Date Fair Value Non-vested RSUs at January 1, 2018 2,906,473 $ 19.51 Granted 1,099,468 $ 12.82 Forfeited (41,425) $ 16.12 Vested (218,013) $ 15.90 Non-vested RSUs at June 30, 2018 3,746,503 $ 17.78 Stock Options Expense on the stock options is recognized on a straight-line basis over the service period of the award less awards forfeited. The fair value of the stock options were measured at the grant date using the Black-Scholes valuation model. The Company utilizes the "simplified" method to estimate the expected term of the stock options granted as there is limited historical exercise data available in estimating the expected term of the stock options. Expected volatility is based on the volatility of the historical stock prices of the Company’s peer group. The risk-free rates are based on the yields of U.S. Treasury instruments with comparable terms. A dividend yield and forfeiture rate of zero were assumed. Stock options granted under the LTIP vest ratably over three years and are exercisable immediately upon vesting through the tenth anniversary of the grant date. To fulfill options exercised, the Company will issue new shares. The Company recorded $3.8 million and $7.5 million of stock-based compensation costs related to the stock options for the three and six months ended June 30, 2018 , respectively, as compared to $3.3 million and $6.6 million for the three and six months ended June 30, 2017 , respectively. These costs were included in the condensed consolidated statements of operations within the general and administrative expenses line item. As of June 30, 2018 , there was $19.7 million of unrecognized compensation cost related to the stock options that is expected to be recognized over a weighted average period of 1.3 years . The following table summarizes the stock option activity from January 1, 2018 through June 30, 2018 and provides information for stock options outstanding at the dates indicated. Number of Options Weighted Average Exercise Price Non-vested Stock Options at January 1, 2018 3,496,290 $ 18.50 Granted — $ — Forfeited — $ — Vested — $ — Non-vested Stock Options at June 30, 2018 3,496,290 $ 18.50 Performance Stock Awards The Company granted performance stock awards ("PSAs") to certain executives under the LTIP in October 2017 and March 2018. The number of shares of the Company's common stock that may be issued to settle PSAs ranges from zero to one times the number of PSAs awarded. Generally, the shares issued for PSAs are determined based on the satisfaction of a time-based vesting schedule and a weighting of one or more of the following: i) absolute total stockholder return ("ATSR"), ii) relative total stockholder return ("RTSR"), as compared to the Company's peer group and iii) cash return on capital invested ("CROCI") measured over a three year period and vest in their entirety at the end of the three-year measurement period. Any PSAs that have not vested at the end of the applicable measurement period are forfeited. The vesting criterion that is associated with the ATSR and RTSR is based on a comparison of the Company's shareholder return for the measurement period compared to that of a group of peer companies for the same measurement period. As the ATSR and RTSR vesting criteria are linked to the Company's share price, they each are considered a market condition for purposes of calculating the grant-date fair value of the awards. The vesting criterion that is associated with the CROCI is considered a performance condition for purposes of calculating the grant-date fair value of the awards. The fair value of the PSAs was measured at the grant date with a stochastic process method using a Monte Carlo simulation. A stochastic process is a mathematically defined equation that can create a series of outcomes over time. Those outcomes are not deterministic in nature, which means that by iterating the equations multiple times, different results will be obtained for those iterations. In the case of the Company's PSAs, the Company cannot predict with certainty the path its stock price or the stock prices of its peer will take over the performance period. By using a stochastic simulation, the Company can create multiple prospective stock pathways, statistically analyze these simulations, and ultimately make inferences regarding the most likely path the stock price will take. As such, because future stock prices are stochastic, or probabilistic with some direction in nature, the stochastic method, specifically the Monte Carlo Model, is deemed an appropriate method by which to determine the fair value of the PSAs. Significant assumptions used in this simulation include the Company's expected volatility, risk-free interest rate based on U.S. Treasury yield curve rates with maturities consistent with the measurement period as well as the volatilities for each of the Company's peers. The Company recorded $1.5 million and $2.6 million of stock-based compensation costs related to PSAs for the three and six months ended June 30, 2018 , respectively. The Company did not record any stock-based compensation related to PSAs for the three and six months ended June 30, 2017 . These costs were included in the condensed consolidated statements of operations within the general and administrative expenses line item. The outstanding and unvested shares were included in the condensed consolidated statement of stockholders' equity within the stock-based compensation line item. As of June 30, 2018 , there was $12.3 million of total unrecognized compensation cost related to the unvested PSAs granted to certain executives that is expected to be recognized over a weighted average period of 2.2 years . The following table summarizes the PSA activity from January 1, 2018 through June 30, 2018 and provides information for PSAs outstanding at the dates indicated. Number of Shares (1) Weighted Average Grant Date Fair Value Non-vested PSAs at January 1, 2018 832,163 $ 8.85 Granted 1,961,920 $ 9.06 Forfeited — $ — Vested — $ — Non-vested PSAs at June 30, 2018 2,794,083 $ 9.00 (1) The number of awards assumes that the associated maximum vesting condition is met at the target amount. The final number of shares of the Company's common stock issued may vary depending on the performance multiplier, which ranges from zero to one, depending on the level of satisfaction of the vesting condition. Incentive Restricted Stock Units Officers of the Company contributed 2.7 million shares of common stock to Extraction Employee Incentive, LLC (“Employee Incentive”), which is owned solely by certain officers of the Company. Employee Incentive issued restricted stock units (“Incentive RSUs”) to certain employees. Incentive RSUs vested over a three year service period, with 25% , 25% and 50% of the units vesting in year one , two and three , respectively. On July 17, 2017, the partners of Employee Incentive amended the vesting schedule in which 25% vested immediately and the remaining Incentive RSUs vest 25% , 25% and 25% each six months thereafter, over the remaining 18 month service period. Grant date fair value was determined based on the value of Extraction’s common stock on the date of issuance. The Company assumed a forfeiture rate of zero as part of the grant date estimate of compensation cost. As of January 1, 2017, the Company elected to account for stock-based compensation forfeitures as they occur, as a result of the adoption of ASU No. 2016-09. As the vesting of any Incentive RSUs will be satisfied with shares of common stock that are already issued and outstanding, the Incentive RSUs do not have any impact on the Company’s diluted earnings per share calculation. The Company recorded $4.9 million and $9.8 million of stock-based compensation costs related to Incentive RSUs for the three and six months ended June 30, 2018 , respectively. The Company recorded $1.8 million and $6.2 million of stock-based compensation costs related to Incentive RSUs for the three and six months ended June 30, 2017 . These costs were included in the condensed consolidated statements of operations within the general and administrative expenses line item. As of June 30, 2018 , there was $10.7 million of total unrecognized compensation cost related to the unvested Incentive RSUs granted to certain employees that is expected to be recognized over a weighted average period of 0.5 years . The following table summarizes the Incentive RSU activity from January 1, 2018 through June 30, 2018 and provides information for Incentive RSUs outstanding at the dates indicated. Number of Shares Weighted Average Grant Date Fair Value Non-vested Incentive RSUs at January 1, 2018 1,496,175 $ 20.45 Granted — $ — Forfeited (37,350) $ 20.45 Vested (498,725) $ 20.45 Non-vested Incentive RSUs at June 30, 2018 960,100 $ 20.45 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) per Share | Earnings (Loss) Per Share Basic earnings per share (“EPS”) includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS reflects the potential dilution of securities that could share in the earnings of the Company. The Company uses the “if-converted” method to determine potential dilutive effects of the Company’s outstanding Series A Preferred Stock (the “Series A Preferred Stock”) and the treasury method to determine the potential dilutive effects of outstanding restricted stock awards and stock options. The basic weighted average shares outstanding calculation is based on the actual days in which the shares were outstanding for the three and six months ended June 30, 2018 and 2017 . The components of basic and diluted EPS were as follows (in thousands, except per share data): For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Basic and Diluted Income (Loss) Per Share Net Income (Loss) $ 8,848 $ 7,240 $ (43,147 ) $ 15,956 Less: Adjustment to reflect Series A Preferred Stock dividend (2,721 ) (2,722 ) (5,443 ) (5,443 ) Less: Adjustment to reflect accretion of Series A Preferred Stock discount (1,476 ) (1,331 ) (2,914 ) (2,627 ) Adjusted net income (loss) available to common shareholders, basic and diluted $ 4,651 $ 3,187 $ (51,504 ) $ 7,886 Denominator: Weighted average common shares outstanding, basic and diluted (1) (2) 175,762 171,835 174,992 171,835 Income (Loss) Per Common Share Basic and diluted $ 0.03 $ 0.02 $ (0.29 ) $ 0.05 (1) For the three months ended June 30, 2018, 413,154 dilutive restricted stock awards were excluded from the calculation above, as the impact of these awards were inconsequential to dilutive weighted average shares outstanding and dilutive EPS. Additionally, 5,244,428 common shares for stock options were excluded as they were out-of-the-money and 11,472,445 common shares associated with the assumed conversion of Series A Preferred Stock were excluded, as they would have had an anti-dilutive effect on EPS. For the six months ended June 30, 2018, 8,990,931 potentially dilutive shares were not included in the calculation above, as they would have had an anti-dilutive effect on EPS, including restricted stock awards and stock options outstanding. Additionally, 11,472,445 common shares associated with the assumed conversion of Series A Preferred Stock were also excluded. (2) For the three months ended June 30, 2017 , 8,571,683 potentially dilutive shares were not included in the calculation above, as they had an anti-dilutive effect on EPS, including restricted stock awards and stock options outstanding. Additionally, 11,472,445 common shares associated with the assumed conversion of Series A Preferred Stock were also excluded. For the six months ended June 30, 2017, 359,338 dilutive restricted stock awards were excluded from the calculation above, as the impact of these awards were inconsequential to dilutive weighted average shares outstanding and dilutive EPS. Additionally, 4,500,000 common shares for stock options were excluded as they were out-of-the-money and 11,472,445 common shares associated with the assumed conversion of Series A Preferred Stock were excluded, as they would have had an anti-dilutive effect on EPS. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases The Company leases two office spaces in Denver, Colorado, two office spaces in Greeley, Colorado and one office space in Houston, Texas under separate operating lease agreements. The Denver, Colorado leases expire on February 29, 2020 and May 31, 2026, respectively. The Greeley and Houston leases expire on August 31, 2019, June 30, 2019 and January 31, 2022, respectively. Total rental commitments under non‑cancelable leases for office space were $34.4 million at June 30, 2018 . The future minimum lease payments under these non‑cancelable leases are as follows: $1.6 million in 2018 , $3.5 million in 2019 , $3.4 million in 2020 , $3.4 million in 2021 , $3.4 million in 2022 and $19.1 million thereafter. Rent expense was $0.9 million and $1.7 million for the three and six months ended June 30, 2018 , respectively, as compared to $0.6 million and $1.2 million for the three and six months ended June 30, 2017 , respectively. On June 4, 2015, the Company subleased the remaining term of one of its Denver office leases that expires February 29, 2020. The sublease will decrease the Company’s future lease payments by $0.4 million . Drilling Rigs As of June 30, 2018 , the Company was subject to commitments on three drilling rigs. In the event of early termination of these contracts, the Company would be obligated to pay an aggregate amount of approximately $9.3 million as of June 30, 2018 , as required under the terms of the contracts. Delivery Commitments As of June 30, 2018 , the Company’s oil marketer was subject to a firm transportation agreement that commenced in November 2016 and has a ten -year term with a monthly minimum delivery commitment of 45,000 Bbl/d in year one, 55,800 Bbl/d in year two, 61,800 Bbl/d in years three through seven and 58,000 Bbl/d in years eight through ten. In May 2017, the Company amended its agreement with its oil marketer that requires it to sell all of its crude oil from an area of mutual interest in exchange for a make-whole provision that allows the Company to satisfy any minimum volume commitment deficiencies incurred by its oil marketer with future barrels of crude oil in excess of their minimum volume commitment through October 31, 2018. In December 2017, the Company extended the term of this agreement through October 31, 2019 and has posted a letter of credit in the amount of $35.0 million. The Company evaluates its contracts for loss contingencies and accrues for such losses, if the loss can be reasonably estimated and deemed probable. The Company also has two long-term crude oil gathering commitments with an unconsolidated subsidiary, in which the Company has a minority ownership interest. The first agreement commenced in November 2016 and has a term of ten years for an average of 9,167 Bbl/d in year one, 17,967 Bbl/d in year two, 18,800 Bbl/d for years three through five and 10,000 Bbl/d for years six through ten. The second agreement will commence in or around July 2019 and has a term of ten years for an average of 8,000 Bbl/d in year one, 20,000 Bbl/d in year two, 35,000 Bbl/d in year three, 40,000 Bbl/d in years four through eight, 30,000 Bbl/d in year nine and 25,000 Bbl/d in year ten. The aggregate amount of estimated remaining payments under these agreements is $991.4 million . In collaboration with several other producers and a midstream provider, on December 15, 2016 and August 7, 2017, the Company agreed to participate in expansions of natural gas gathering and processing capacity in the DJ Basin. The plan includes two new processing plants as well as the expansion of related gathering systems. The first plant commenced operations in August 2018 and the second plant is expected to be completed by mid-2019, although the exact start-up date is undetermined at this time. The Company’s share of these commitments will require 51.5 and 20.6 MMcf per day, respectively, to be delivered after the plants' in-service dates for a period of seven years thereafter. The Company may be required to pay a shortfall fee for any volumes under these commitments. These contractual obligations can be reduced by the Company’s proportionate share of the collective volumes delivered to the plants by other third party incremental volumes available to the midstream provider at the new facilities that are in excess of the total commitments. The Company is also required for the first three years of each contract to guarantee a certain target profit margin on these volumes sold. Under its current drilling plans, the Company expects to meet these volume commitments. Acquisition of Undeveloped Leasehold Acreage The Company was party to an agreement during 2017 with an unrelated third party for which it has paid $247.6 million through June 30, 2018 to complete its leasing program of approximately 38,800 net acres of undeveloped leasehold. General The Company is subject to contingent liabilities with respect to existing or potential claims, lawsuits, and other proceedings, including those involving environmental, tax and other matters, certain of which are discussed more specifically below. The Company accrues liabilities when it is probable that future costs will be incurred and such costs can be reasonably estimated. Such accruals are based on developments to date and the Company’s estimates of the outcomes of these matters and its experience in contesting, litigating and settling other matters. As the scope of the liabilities becomes better defined, there will be changes in the estimates of future costs, which management currently believes will not have a material effect on the Company’s financial position, results of operations or cash flows. As is customary in the oil and gas industry, the Company may at times have commitments in place to reserve or earn certain acreage positions or wells. If the Company does not meet such commitments, the acreage positions or wells may be lost or the Company may be required to pay damages if certain performance conditions are not met. Legal Matters From time to time, the Company is party to ongoing legal proceedings in the ordinary course of business. While the outcome of these proceedings cannot be predicted with certainty, the Company does not believe the results of these proceedings, individually or in the aggregate, will have a material adverse effect on the Company's business, financial condition, results of operations or liquidity. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Office Lease with Related Affiliate In April 2016, the Company subleased office space to Star Peak Capital, LLC, of which a member of the board of directors is an owner, for $1,400 per month. The sublease commenced on May 1, 2016 and expires on February 28, 2020. 2021 Senior Notes Several lenders of the 2021 Senior Notes are also 5% stockholders of the Company. As of the initial issuance in July 2016 of the $550.0 million principal amount on the 2021 Senior Notes, such stockholders held $63.5 million . 2024 Senior Notes Several lenders of the 2024 Senior Notes are also 5% stockholders of the Company. As of the initial issuance in August 2017 of the $400.0 million principal amount on the 2024 Senior Notes, such stockholders held $54.9 million . 2026 Senior Notes Several lenders of the 2026 Senior Notes are also 5% stockholders of the Company. As of the initial issuance in January 2018 of the $750.0 million principal amount on the 2026 Senior Notes, such stockholders held $56.2 million . Series A Preferred Stock Several holders of the Series A Preferred Stock are also 5% stockholders of the Company. As of the initial issuance in October 2016 of the $185.3 million of Series A Preferred Stock, such stockholders held $105.0 million . |
Basis of Presentation, Signif19
Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of the Company, including its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The financial statements included herein were prepared from the records of the Company in accordance with generally accepted accounting principles in the United States (“GAAP”) and the Securities and Exchange Commission rules and regulation for interim financial reporting. In the opinion of management, all adjustments, consisting primarily of normal recurring accruals that are considered necessary for a fair statement of the condensed consolidated financial information, have been included. However, operating results for the period presented are not necessarily indicative of the results that may be expected for a full year. Interim condensed consolidated financial statements and the year-end balance sheet do not include all of the information and notes required by GAAP for audited annual consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes included in the Company’s Annual Report. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, which provides clarification and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718 Compensation - Stock Compensation, to a change to the terms or conditions of a share-based payment award. For public entities, the new guidance was effective for fiscal years beginning after December 15, 2017, including interim reporting periods within that reporting period. The Company adopted this ASU on January 1, 2018 and the adoption of this ASU did not have a material impact on the consolidated financial statements and related disclosures. In February 2017, the FASB issued ASU No. 2017-05, which provided clarification regarding the guidance on accounting for the derecognition of nonfinancial assets. For public entities, the new guidance was effective for fiscal years beginning after December 15, 2017, including interim reporting periods within that fiscal year. The Company adopted this ASU on January 1, 2018 and the adoption of this ASU did not have a material impact on the consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. For public entities, the new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim and annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of adopting this ASU, however it is not expected to have a significant effect on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-01, which clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. For public entities, the new guidance was effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU on January 1, 2018 and the adoption of this ASU did not have a material impact on the consolidated financial statements and related disclosures; however, this standard may result in more transactions being accounted for as asset acquisitions rather than business combinations. In November 2016, the FASB issued ASU No. 2016-18, which intends to clarify how entities should present restricted cash and restricted cash equivalents in the statement of cash flows. This amendment was effective retrospectively for reporting periods beginning after December 15, 2017. The Company adopted this ASU on January 1, 2018 and the retrospective adoption increased the Company's beginning and ending cash balances within the statement of cash flows for the three months ended March 31, 2017. The adoption had no other material impact on the cash flow statement and had no impact on the Company's results of operations or financial position. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the consolidated statement of cash flows: As of June 30, December 31, June 30, December 31, 2018 2017 2017 2016 Cash and cash equivalents $ 68,249 $ 6,768 $ 88,689 $ 588,736 Restricted cash included in cash held in escrow — — 8,400 42,200 $ 68,249 $ 6,768 $ 97,089 $ 630,936 In August 2016, the FASB issued ASU No. 2016-15, which addresses eight specific cash flow issues, including presentation of debt prepayments or debt extinguishment costs, with the objective of reducing the existing diversity in practice. For public entities, the new guidance was effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU on January 1, 2018, which requires current period make-whole premiums to be presented in financing activities in the statement of cash flows and prior period debt prepayment costs to be reclassified from operating activities to financing activities in the statement of cash flows; however, there will be no impact to the total change in cash and cash equivalents from period to period. In February 2016, the FASB issued ASU No. 2016-02, which requires lessee recognition on the balance sheet of a right of use asset and a lease liability, initially measured at the present value of the lease payments. It further requires recognition in the income statement of a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight line basis. Finally, it requires classification of all cash payments within operating activities in the statements of cash flows. It is effective for fiscal years commencing after December 15, 2018 and early adoption is permitted. The FASB subsequently issued ASU No. 2017-13, ASU No. 2018-01, ASU No. 2018-10 and ASU No. 2018-11, which provided additional implementation guidance. The Company is currently evaluating the impact this ASU will have on the consolidated financial statements and related disclosures. As a part of the assessment work to-date, the Company has engaged an external consulting firm, is evaluating agreements under this ASU, and is assessing the completeness of the lease population. In May 2014, the FASB issued ASU No. 2014-09, which establishes a comprehensive new revenue recognition model, referred to as ASC 606 - Revenue from Contracts with Customers, designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. The ASU allows for the use of either the full or modified retrospective transition method. In August 2015, the FASB issued ASU No. 2015-14, which deferred ASU No. 2014-09 for one year, and was effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The FASB subsequently issued ASU No. 2016-08, ASU No. 2016-10, ASU No. 2016-11, ASU No. 2016-12, ASU No. 2016-20, ASU No. 2017-13 and ASU No. 2017-14, which provided additional implementation guidance. Refer to —Adoption of ASC 606 for more information. |
Basis of Presentation, Signif20
Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Restrictions on Cash and Cash Equivalents [Table Text Block] | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the consolidated statement of cash flows: As of June 30, December 31, June 30, December 31, 2018 2017 2017 2016 Cash and cash equivalents $ 68,249 $ 6,768 $ 88,689 $ 588,736 Restricted cash included in cash held in escrow — — 8,400 42,200 $ 68,249 $ 6,768 $ 97,089 $ 630,936 |
Schedule of Cash and Cash Equivalents [Table Text Block] | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the consolidated statement of cash flows: As of June 30, December 31, June 30, December 31, 2018 2017 2017 2016 Cash and cash equivalents $ 68,249 $ 6,768 $ 88,689 $ 588,736 Restricted cash included in cash held in escrow — — 8,400 42,200 $ 68,249 $ 6,768 $ 97,089 $ 630,936 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | The impact of adoption in the current period results are as follows (in thousands): For the Three Months Ended For the Six Months Ended Under ASC 606 Under ASC 605 Change Under ASC 606 Under ASC 605 Change Revenues: Oil sales $ 213,481 $ 213,481 $ — $ 393,744 $ 393,744 $ — Natural gas sales 19,807 27,603 (7,796 ) 43,888 54,944 (11,056 ) NGL sales 26,908 38,646 (11,738 ) 52,779 69,401 (16,622 ) Total Revenues 260,196 279,730 (19,534 ) 490,411 518,089 (27,678 ) Operating Expenses: Transportation and gathering $ 9,959 $ 29,493 $ (19,534 ) $ 17,498 $ 45,176 $ (27,678 ) Net Income (Loss) $ 8,848 $ 8,848 $ — $ (43,147 ) $ (43,147 ) $ — |
Disaggregation of Revenue [Table Text Block] | The following table presents the Company's revenues disaggregated by revenue source. Transportation and gathering costs in the following table are not all of the transportation and gathering expenses that the Company incurs, only the expenses that are netted against revenues pursuant to ASC 606. Prior period amounts have not been adjusted under the modified retrospective method. For the Three Months For the Six Months 2018 2017 2018 2017 Revenues: Oil sales $ 213,481 $ 85,394 $ 393,744 $ 137,522 Natural gas sales 27,603 18,526 54,944 38,423 NGL sales 38,646 15,846 69,401 33,460 Transportation and gathering included in revenues (19,534 ) — (27,678 ) — Total Revenues $ 260,196 $ 119,766 $ 490,411 $ 209,405 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Acquisitions | |
Schedule of Pro Forma Financial Information | The following pro forma results (in thousands, except per share data) do not include any cost savings or other synergies that may result from the acquisition or any estimated costs that have been or will be incurred by the Company to integrate the properties acquired. Asset acquisitions are not included in pro forma financial information, as it is not required. The pro forma results are not necessarily indicative of what actually would have occurred if the acquisition had been completed as of the beginning of the period, nor are they necessarily indicative of future results. For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2017 Revenues $ 121,930 $ 211,569 Operating expenses $ 135,090 $ 252,213 Net income $ 7,417 $ 16,133 Income per common share, basic and diluted $ 0.02 $ 0.05 |
June 2017 Acquisition | |
Acquisitions | |
Schedule summarizing the purchase price and allocation of fair value of assets acquired and liabilities assumed | Purchase Price June 8, 2017 Consideration given Cash $ 13,395 Total consideration given $ 13,395 Allocation of Purchase Price Proved oil and gas properties $ 13,495 Total fair value of oil and gas properties acquired $ 13,495 Asset retirement obligations $ (100 ) Fair value of net assets acquired $ 13,395 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Instrument [Line Items] | |
Schedule of long-term debt | As of the dates indicated, the Company’s long‑term debt consisted of the following (in thousands): June 30, December 31, Credit facility due August 16, 2022 (or an earlier time as set forth in the credit facility) $ 190,000 $ 90,000 2021 Senior Notes due July 15, 2021 — 550,000 2024 Senior Notes due May 15, 2024 400,000 400,000 2026 Senior Notes due February 1, 2026 750,000 — Unamortized debt issuance costs on Senior Notes (18,421 ) (16,639 ) Total long-term debt 1,321,579 1,023,361 Less: current portion of long-term debt — — Total long-term debt, net of current portion $ 1,321,579 $ 1,023,361 |
Schedule of Borrowing Base Utilization Grid | The grid below shows the Base Rate Margin and Eurodollar Margin depending on the applicable Borrowing Base Utilization Percentage (as defined in the credit facility) as of the date of this filing: Borrowing Base Utilization Grid Borrowing Base Utilization Percentage Utilization Eurodollar Margin Base Rate Margin Commitment Fee Rate Level 1 < 25% 1.50 % 0.50 % 0.375 % Level 2 ≥ 25% < 50% 1.75 % 0.75 % 0.375 % Level 3 ≥ 50% < 75% 2.00 % 1.00 % 0.500 % Level 4 ≥ 75% < 90% 2.25 % 1.25 % 0.500 % Level 5 ≥ 90% 2.50 % 1.50 % 0.500 % |
Commodity Derivative Instrume23
Commodity Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of commodity derivative contracts | The Company’s commodity derivative contracts as of June 30, 2018 are summarized below: 2018 2019 NYMEX WTI Crude Swaps: Notional volume (Bbl) 2,100,000 — Weighted average fixed price ($/Bbl) $ 52.91 $ — NYMEX WTI Crude Purchased Puts: Notional volume (Bbl) 4,500,000 8,700,000 Weighted average purchased put price ($/Bbl) $ 49.81 $ 51.19 NYMEX WTI Crude Sold Calls: Notional volume (Bbl) 4,500,000 8,700,000 Weighted average sold call price ($/Bbl) $ 58.33 $ 64.37 NYMEX WTI Crude Sold Puts: Notional volume (Bbl) 6,600,000 8,700,000 Weighted average sold put price ($/Bbl) $ 40.00 $ 41.69 NYMEX HH Natural Gas Swaps: Notional volume (MMBtu) 19,800,000 12,000,000 Weighted average fixed price ($/MMBtu) $ 3.03 $ 2.79 NYMEX HH Natural Gas Purchased Puts: Notional volume (MMBtu) 1,200,000 — Weighted average purchased put price ($/MMBtu) $ 3.00 $ — NYMEX HH Natural Gas Sold Calls: Notional volume (MMBtu) 1,200,000 — Weighted average sold call price ($/MMBtu) $ 3.15 $ — CIG Basis Gas Swaps: Notional volume (MMBtu) 21,460,000 6,000,000 Weighted average fixed basis price ($/MMBtu) $ (0.68 ) $ (0.78 ) |
Schedule of fair value of derivative instruments in statement of financial position | The following tables detail the fair value of the Company’s derivative instruments, including the gross amounts and adjustments made to net the derivative instruments for the presentation in the condensed consolidated balance sheets (in thousands): As of June 30, 2018 Location on Balance Sheet Gross Amounts of Recognized Assets and Liabilities Gross Amounts Offsets in the Balance Sheet (1) Net Amounts of Assets and Liabilities Presented in the Balance Sheet Gross Amounts not Offset in the Balance Sheet (2) Net Amounts (3) Current assets $ 86,397 $ (71,084 ) $ 15,313 $ (1,389 ) $ 14,190 Non-current assets $ 15,084 $ (14,818 ) $ 266 $ — $ — Current liabilities $ (224,651 ) $ 71,084 $ (153,567 ) $ 1,389 $ (158,423 ) Non-current liabilities $ (21,063 ) $ 14,818 $ (6,245 ) $ — $ — As of December 31, 2017 Location on Balance Sheet Gross Amounts of Recognized Assets and Liabilities Gross Amounts Offsets in the Balance Sheet (1) Net Amounts of Assets and Liabilities Presented in the Balance Sheet Gross Amounts not Offset in the Balance Sheet (2) Net Amounts (3) Current assets $ 22,118 $ (17,986 ) $ 4,132 $ — $ 4,132 Non-current assets $ 13,686 $ (13,686 ) $ — $ — $ — Current liabilities $ (85,414 ) $ 17,986 $ (67,428 ) $ — $ (84,702 ) Non-current liabilities $ (30,960 ) $ 13,686 $ (17,274 ) $ — $ — (1) Agreements are in place with all of the Company’s financial trading counterparties that allow for the financial right of offset for derivative assets and derivative liabilities at settlement or in the event of a default under the agreements. (2) Netting for balance sheet presentation is performed by current and non‑current classification. This adjustment represents amounts subject to an enforceable master netting arrangement, which are not netted on the condensed consolidated balance sheets. There are no amounts of related financial collateral received or pledged. (3) Net amounts are not split by current and non‑current. All counterparties in a net asset position are shown in the current asset line item and all counterparties in a net liability position are shown in the current liability line item. |
Schedule of commodity derivatives gain (loss) included in other income (expense) | The table below sets forth the commodity derivatives gain (loss) for the three and six months ended June 30, 2018 and 2017 (in thousands). Commodity derivatives gain (loss) is included under the other income (expense) line item in the condensed consolidated statements of operations. For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Commodity derivatives gain (loss) $ (89,511 ) $ 33,876 $ (139,839 ) $ 84,298 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule summarizing activities of asset retirement obligaions | The following table summarizes the activities of the Company’s asset retirement obligations for the period indicated (in thousands): For the Six Months Ended June 30, 2018 For the Year Ended December 31, 2017 Balance beginning of period $ 69,540 $ 56,108 Liabilities incurred or acquired 1,066 9,802 Liabilities settled (5,178 ) (4,169 ) Revisions in estimated cash flows 1,438 2,630 Accretion expense 2,764 5,169 Balance end of period $ 69,630 $ 69,540 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities accounted for at fair value on a recurring basis | The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2018 and December 31, 2017 by level within the fair value hierarchy (in thousands): Fair Value Measurements at Level 1 Level 2 Level 3 Total Financial Assets: Commodity derivative assets $ — $ 15,579 $ — $ 15,579 Financial Liabilities: Commodity derivative liabilities $ — $ 159,812 $ — $ 159,812 Fair Value Measurements at Level 1 Level 2 Level 3 Total Financial Assets: Commodity derivative assets $ — $ 4,132 $ — $ 4,132 Financial Liabilities: Commodity derivative liabilities $ — $ 84,702 $ — $ 84,702 |
Schedule of fair value of financial instruments | At June 30, 2018 At December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Credit Facility $ 190,000 $ 190,000 $ 90,000 $ 90,000 2021 Senior Notes (1) $ — $ — $ 540,382 $ 583,000 2024 Senior Notes (2) $ 393,414 $ 419,000 $ 392,979 $ 427,000 2026 Senior Notes (3) $ 738,165 $ 725,625 $ — $ — (1) The carrying amount of the 2021 Senior Notes includes unamortized debt issuance costs of $9.6 million as of December 31, 2017 . There were no unamortized debt issuance costs as of June 30, 2018 . |
Unit and Stock-Based Compensa26
Unit and Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Unit and Stock-Based Compensation | |
Schedule summarizing stock option activity | The following table summarizes the stock option activity from January 1, 2018 through June 30, 2018 and provides information for stock options outstanding at the dates indicated. Number of Options Weighted Average Exercise Price Non-vested Stock Options at January 1, 2018 3,496,290 $ 18.50 Granted — $ — Forfeited — $ — Vested — $ — Non-vested Stock Options at June 30, 2018 3,496,290 $ 18.50 |
Schedule of non-vested restricted award activity | The following table summarizes the PSA activity from January 1, 2018 through June 30, 2018 and provides information for PSAs outstanding at the dates indicated. Number of Shares (1) Weighted Average Grant Date Fair Value Non-vested PSAs at January 1, 2018 832,163 $ 8.85 Granted 1,961,920 $ 9.06 Forfeited — $ — Vested — $ — Non-vested PSAs at June 30, 2018 2,794,083 $ 9.00 |
Incentive RSUs | |
Unit and Stock-Based Compensation | |
Schedule of non-vested restricted award activity | The following table summarizes the Incentive RSU activity from January 1, 2018 through June 30, 2018 and provides information for Incentive RSUs outstanding at the dates indicated. Number of Shares Weighted Average Grant Date Fair Value Non-vested Incentive RSUs at January 1, 2018 1,496,175 $ 20.45 Granted — $ — Forfeited (37,350) $ 20.45 Vested (498,725) $ 20.45 Non-vested Incentive RSUs at June 30, 2018 960,100 $ 20.45 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | The components of basic and diluted EPS were as follows (in thousands, except per share data): For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Basic and Diluted Income (Loss) Per Share Net Income (Loss) $ 8,848 $ 7,240 $ (43,147 ) $ 15,956 Less: Adjustment to reflect Series A Preferred Stock dividend (2,721 ) (2,722 ) (5,443 ) (5,443 ) Less: Adjustment to reflect accretion of Series A Preferred Stock discount (1,476 ) (1,331 ) (2,914 ) (2,627 ) Adjusted net income (loss) available to common shareholders, basic and diluted $ 4,651 $ 3,187 $ (51,504 ) $ 7,886 Denominator: Weighted average common shares outstanding, basic and diluted (1) (2) 175,762 171,835 174,992 171,835 Income (Loss) Per Common Share Basic and diluted $ 0.03 $ 0.02 $ (0.29 ) $ 0.05 (1) For the three months ended June 30, 2018, 413,154 dilutive restricted stock awards were excluded from the calculation above, as the impact of these awards were inconsequential to dilutive weighted average shares outstanding and dilutive EPS. Additionally, 5,244,428 common shares for stock options were excluded as they were out-of-the-money and 11,472,445 common shares associated with the assumed conversion of Series A Preferred Stock were excluded, as they would have had an anti-dilutive effect on EPS. For the six months ended June 30, 2018, 8,990,931 potentially dilutive shares were not included in the calculation above, as they would have had an anti-dilutive effect on EPS, including restricted stock awards and stock options outstanding. Additionally, 11,472,445 common shares associated with the assumed conversion of Series A Preferred Stock were also excluded. |
Business and Organization Eleva
Business and Organization Elevation Securities Purchase Agreement (Details) - Subsequent Event - USD ($) $ / shares in Units, $ in Millions | 28 Months Ended | |
Nov. 03, 2020 | Jul. 03, 2018 | |
Subsequent Event [Line Items] | ||
Elevation Preferred Units | 150,000 | |
Elevation Price Per Unit | $ 990 | |
Elevation Private Placement | $ 150 | |
Elevation Private Placement, Net Proceeds | 141.9 | |
Elevation Proceeds, Reimbursement | 25.4 | |
Elevation Private Placement Commitment Period | 28 months | |
Elevation Incremental Commitment Increase | 25 | |
Elevation Additional Preferred Unit Purchase | $ 350 | |
Elevation Quarterly Commitment Fee | 1.00% | |
Elevation Quarterly Preferred Unit Dividend Rate | 8.00% |
Basis of Presentation, Signif29
Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements - Schedule of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 68,249 | $ 6,768 | $ 88,689 | $ 588,736 |
Schedule of Cash and Cash Equivalents [Table Text Block] | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the consolidated statement of cash flows: As of June 30, December 31, June 30, December 31, 2018 2017 2017 2016 Cash and cash equivalents $ 68,249 $ 6,768 $ 88,689 $ 588,736 Restricted cash included in cash held in escrow — — 8,400 42,200 $ 68,249 $ 6,768 $ 97,089 $ 630,936 | |||
Restricted Cash and Cash Equivalents | $ 0 | 0 | 8,400 | 42,200 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 68,249 | $ 6,768 | $ 97,089 | $ 630,936 |
Basis of Presentation, Signif30
Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements - Schedule of Changes Due to Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | $ 260,196 | $ 119,766 | $ 490,411 | $ 209,405 |
Net loss | 8,848 | 7,240 | (43,147) | 15,956 |
Under ASC 605 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 279,730 | 518,089 | ||
Net loss | 8,848 | (43,147) | ||
Accounting Standards Update 2014-09 | Change | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | (19,534) | (27,678) | ||
Net loss | 0 | 0 | ||
Oil sales | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 213,481 | 85,394 | 393,744 | 137,522 |
Oil sales | Under ASC 605 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 213,481 | 393,744 | ||
Oil sales | Accounting Standards Update 2014-09 | Change | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 0 | 0 | ||
Natural gas sales | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 27,603 | 18,526 | 54,944 | 38,423 |
Natural gas sales | Under ASC 605 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 27,603 | 54,944 | ||
Natural gas sales | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 19,807 | 43,888 | ||
Natural gas sales | Accounting Standards Update 2014-09 | Change | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | (7,796) | (11,056) | ||
NGL sales | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 38,646 | 15,846 | 69,401 | 33,460 |
NGL sales | Under ASC 605 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 38,646 | 69,401 | ||
NGL sales | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 26,908 | 52,779 | ||
NGL sales | Accounting Standards Update 2014-09 | Change | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | (11,738) | (16,622) | ||
Transportation and gathering | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Transportation and gathering | 9,959 | $ 0 | 17,498 | $ 0 |
Transportation and gathering | Under ASC 605 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Transportation and gathering | 29,493 | 45,176 | ||
Transportation and gathering | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Transportation and gathering | (19,534) | (27,678) | ||
Transportation and gathering | Accounting Standards Update 2014-09 | Change | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Transportation and gathering | $ (19,534) | $ (27,678) |
Basis of Presentation, Signif31
Basis of Presentation, Significant Accounting Policies and Recent Accounting Pronouncements - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | $ 260,196 | $ 119,766 | $ 490,411 | $ 209,405 |
Oil sales | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 213,481 | 85,394 | 393,744 | 137,522 |
Natural gas sales | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 27,603 | 18,526 | 54,944 | 38,423 |
NGL sales | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 38,646 | 15,846 | 69,401 | 33,460 |
Transportation and gathering included in revenues | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Transportation and gathering included in revenues | 9,959 | $ 0 | 17,498 | $ 0 |
Accounting Standards Update 2014-09 | Natural gas sales | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 19,807 | 43,888 | ||
Accounting Standards Update 2014-09 | NGL sales | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenues | 26,908 | 52,779 | ||
Accounting Standards Update 2014-09 | Transportation and gathering included in revenues | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Transportation and gathering included in revenues | $ (19,534) | $ (27,678) |
Acquisitions - July 2017 Acquis
Acquisitions - July 2017 Acquisition (Details) $ in Millions | Apr. 19, 2018USD ($) | Jan. 08, 2018USD ($) | Nov. 15, 2017USD ($) | Jul. 07, 2017USD ($)a |
Acquisitions | ||||
Purchase price | $ 9.4 | $ 11.6 | $ 214.3 | |
July 2017 Acquisition | ||||
Acquisitions | ||||
Acres acquired or to be acquired | a | 12,500 | |||
Purchase price | $ 84 |
Acquisitions - June 2017 Acquis
Acquisitions - June 2017 Acquisition (Details) a in Thousands, $ in Thousands | Apr. 19, 2018USD ($) | Jan. 08, 2018USD ($) | Nov. 15, 2017USD ($) | Jun. 08, 2017USD ($)a | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) |
Acquisitions | ||||||||
Total consideration given | $ 9,400 | $ 11,600 | $ 214,300 | |||||
Earnings | $ 8,848 | $ 7,240 | $ (43,147) | $ 15,956 | ||||
Acquisition transaction expenses | 0 | $ 0 | 0 | $ 68 | ||||
June 2017 Acquisition | ||||||||
Acquisitions | ||||||||
Acres acquired | a | 0 | |||||||
Total consideration given | $ 13,395 | |||||||
Cash | 13,395 | |||||||
Revenues | 800 | 1,800 | ||||||
Earnings | $ 700 | $ 1,300 | ||||||
Proved oil and gas properties | 13,495 | |||||||
Total fair value of oil and gas properties acquired | 13,495 | |||||||
Asset retirement obligations | (100) | |||||||
Fair value of net assets acquired | $ 13,395 |
Acquisitions - November 2016 Ac
Acquisitions - November 2016 Acquisition (Details) - USD ($) $ in Millions | Apr. 19, 2018 | Jan. 08, 2018 | Nov. 15, 2017 |
Acquisitions | |||
Purchase price | $ 9.4 | $ 11.6 | $ 214.3 |
Acquisitions - October 2016 Acq
Acquisitions - October 2016 Acquisition (Details) - USD ($) | Apr. 19, 2018 | Jan. 08, 2018 | Nov. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Aug. 07, 2018 | Dec. 31, 2017 |
Acquisitions | |||||||||
Acquisition transaction expenses | $ 0 | $ 0 | $ 0 | $ 68,000 | |||||
Consideration given | |||||||||
Total consideration given | $ 9,400,000 | $ 11,600,000 | $ 214,300,000 | ||||||
Other information | |||||||||
Long-term Line of Credit, Noncurrent | 190,000,000 | 190,000,000 | $ 265,000,000 | $ 90,000,000 | |||||
Credit Facility | |||||||||
Other information | |||||||||
Long-term Line of Credit, Noncurrent | $ 190,000,000 | $ 190,000,000 | $ 90,000,000 |
Acquisitions - August 2016 Acqu
Acquisitions - August 2016 Acquisition (Details) - USD ($) $ in Thousands | Apr. 19, 2018 | Jan. 08, 2018 | Nov. 15, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Acquisitions | |||||||
Acquisition transaction expenses | $ 0 | $ 0 | $ 0 | $ 68 | |||
Consideration given | |||||||
Total consideration given | $ 9,400 | $ 11,600 | $ 214,300 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Pro Forma Financial Information | ||||
Depletion, depreciation, amortization and accretion | $ 106,774 | $ 68,610 | $ 202,981 | $ 119,263 |
Income tax expense (in dollars) | $ 4,200 | $ 4,420 | (9,900) | $ 9,550 |
Earnings per common share, basic and diluted (usd per share) | $ 0.02 | $ 0.05 | ||
June 2017 Acquisition | Adjustment To Depletion Depreciation Amortization And Accretion Expense [Member] | ||||
Pro Forma Financial Information | ||||
Depletion, depreciation, amortization and accretion | 1,600 | |||
June 2017 Acquisition | Adjustment for effect of income taxes | ||||
Pro Forma Financial Information | ||||
Income tax expense (in dollars) | $ 600 | |||
October 2016 Acquisition | ||||
Pro Forma Financial Information | ||||
Revenues | $ 121,930 | $ 211,569 | ||
Operating expenses | 135,090 | 252,213 | ||
Net income | $ 7,417 | $ 16,133 |
Acquisitions - Acquisitions and
Acquisitions - Acquisitions and Divestitures (Details) $ in Thousands | Apr. 19, 2018USD ($)a | Jan. 08, 2018USD ($)a | Nov. 15, 2017USD ($)a | Apr. 30, 2018USD ($)a | Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) |
Acquisitions | |||||||
Acres of Real Estate Sold | a | 15,100 | ||||||
Sale of property and equipment | $ 72,300 | $ 72,345 | $ 2,000 | ||||
Gain (Loss) on Disposition of Oil and Gas Property | $ 59,900 | ||||||
Acres Of Real Estate Purchased | a | 1,000 | 1,200 | 36,600 | ||||
Total consideration given | $ 9,400 | $ 11,600 | $ 214,300 | ||||
Business Acquisition, Transaction Costs | $ 12,200 |
Acquisitions Divestiture - Elev
Acquisitions Divestiture - Elevation Midstream Equity Method Investment (Details) $ in Millions | Aug. 03, 2018USD ($) |
Subsequent Event [Line Items] | |
Proceeds from Divestiture of Interest in Subsidiaries and Affiliates | $ 83.6 |
Equity Method Investment, Ownership Percentage | 10.00% |
Long Term Debt - Components (De
Long Term Debt - Components (Details) - USD ($) | Aug. 07, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Long-Term Debt | |||
Line of credit, amount outstanding | $ 265,000,000 | $ 190,000,000 | $ 90,000,000 |
Unamortized debt issuance costs on Senior Notes | (18,421,000) | (16,639,000) | |
Total long-term debt | 1,321,579,000 | 1,023,361,000 | |
Less: current portion of long-term debt | 0 | 0 | |
Total long-term debt, net of current portion | 1,321,579,000 | 1,023,361,000 | |
Credit Facility | |||
Long-Term Debt | |||
Line of credit, amount outstanding | 190,000,000 | 90,000,000 | |
Senior Notes due 2021 | |||
Long-Term Debt | |||
Debt outstanding | 0 | 550,000,000 | |
Second Lien Notes and Senior Notes | |||
Long-Term Debt | |||
Debt outstanding | 400,000,000 | 400,000,000 | |
Senior Notes due 2026 | |||
Long-Term Debt | |||
Debt outstanding | 750,000,000 | $ 0 | |
5% Holdings' Members | Related Party Debt Transaction | Senior Notes due 2021 | |||
Long-Term Debt | |||
Debt outstanding | 63,500,000 | ||
5% Holdings' Members | Related Party Debt Transaction | Senior Notes due 2024 | |||
Long-Term Debt | |||
Debt outstanding | 54,900,000 | ||
5% Holdings' Members | Related Party Debt Transaction | Senior Notes due 2026 | |||
Long-Term Debt | |||
Debt outstanding | $ 56,200,000 |
Long Term Debt - Credit Facilit
Long Term Debt - Credit Facility (Details) | 6 Months Ended | |||
Jun. 30, 2018USD ($)factorperiod | Aug. 07, 2018USD ($) | Jan. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Long-Term Debt | ||||
Total commitments | $ 1,500,000,000 | |||
Line of Credit Facility, Maximum Borrowing Capacity | 800,000,000 | $ 700,000,000 | ||
Borrowing base | 650,000,000 | |||
Line of credit, amount outstanding | 190,000,000 | $ 265,000,000 | $ 90,000,000 | |
Available credit under the facility | $ 460,000,000 | |||
Variable interest rate terms and debt covenant ratios | ||||
Number of quarters used for calculation of Net Debt to EBITDAX | period | 4 | |||
Minimum | ||||
Variable interest rate terms and debt covenant ratios | ||||
Commitment fee, percent | 0.375% | |||
Debt Covenant, Current ratio | 1 | |||
Maximum | ||||
Variable interest rate terms and debt covenant ratios | ||||
Commitment fee, percent | 0.50% | |||
Hedging limit percentage | 85.00% | |||
Debt Covenant, Net Debt to EBITDAX ratio | 4 | |||
Borrowing Base, Utilization Level 1 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Borrowing base utilization percentage, maximum | 25.00% | |||
Borrowing Base, Utilization Level 2 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Borrowing base utilization percentage, minimum | 25.00% | |||
Borrowing base utilization percentage, maximum | 50.00% | |||
Borrowing Base, Utilization Level 3 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Borrowing base utilization percentage, minimum | 50.00% | |||
Borrowing base utilization percentage, maximum | 75.00% | |||
Borrowing Base, Utilization Level 4 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Borrowing base utilization percentage, minimum | 75.00% | |||
Borrowing base utilization percentage, maximum | 90.00% | |||
Borrowing Base, Utilization Level 5 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Borrowing base utilization percentage, maximum | 90.00% | |||
Quarter ending March 31, 2018 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Annualized EBITDAX multiplier | factor | 1.333 | |||
Revolving Credit Facility [Member] | ||||
Long-Term Debt | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 750,000,000 | 525,000,000 | ||
Standby Letters of Credit | ||||
Long-Term Debt | ||||
Letters of credit outstanding | $ 35,700,000 | 25,700,000 | ||
Credit Facility | ||||
Long-Term Debt | ||||
Line of credit, amount outstanding | $ 190,000,000 | 90,000,000 | ||
Credit Facility | Borrowing Base, Utilization Level 1 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Commitment fee, percent | 0.375% | |||
Credit Facility | Borrowing Base, Utilization Level 2 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Commitment fee, percent | 0.375% | |||
Credit Facility | Borrowing Base, Utilization Level 3 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Commitment fee, percent | 0.50% | |||
Credit Facility | Borrowing Base, Utilization Level 4 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Commitment fee, percent | 0.50% | |||
Credit Facility | Borrowing Base, Utilization Level 5 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Commitment fee, percent | 0.50% | |||
Credit Facility | LIBOR | Borrowing Base, Utilization Level 1 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Margin rate, percent | 1.50% | |||
Credit Facility | LIBOR | Borrowing Base, Utilization Level 2 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Margin rate, percent | 1.75% | |||
Credit Facility | LIBOR | Borrowing Base, Utilization Level 3 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Margin rate, percent | 2.00% | |||
Credit Facility | LIBOR | Borrowing Base, Utilization Level 4 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Margin rate, percent | 2.25% | |||
Credit Facility | LIBOR | Borrowing Base, Utilization Level 5 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Margin rate, percent | 2.50% | |||
Credit Facility | Base Rate | Borrowing Base, Utilization Level 1 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Margin rate, percent | 0.50% | |||
Credit Facility | Base Rate | Borrowing Base, Utilization Level 2 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Margin rate, percent | 0.75% | |||
Credit Facility | Base Rate | Borrowing Base, Utilization Level 3 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Margin rate, percent | 1.00% | |||
Credit Facility | Base Rate | Borrowing Base, Utilization Level 4 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Margin rate, percent | 1.25% | |||
Credit Facility | Base Rate | Borrowing Base, Utilization Level 5 | ||||
Variable interest rate terms and debt covenant ratios | ||||
Margin rate, percent | 1.50% | |||
Letter of Credit [Member] | Revolving Credit Facility [Member] | ||||
Long-Term Debt | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 35,000,000 | $ 25,000,000 |
Long Term Debt - Senior Notes (
Long Term Debt - Senior Notes (Details) - USD ($) | Feb. 17, 2018 | Jan. 25, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2016 | Mar. 31, 2018 | Jun. 30, 2018 |
Long-Term Debt | |||||||
Face amount of debt | $ 750,000,000 | ||||||
Senior Notes due 2021 | |||||||
Long-Term Debt | |||||||
Face amount of debt | $ 550,000,000 | 550,000,000 | |||||
Interest rate percentage | 7.875% | ||||||
Proceeds from debt, net of discounts and issuance costs | $ 537,200,000 | ||||||
Repayments of Debt, Principal | $ 500,600,000 | ||||||
Repayments of Debt | $ 52,700,000 | 534,200,000 | |||||
Debt Instrument, Make Whole Provision | 3,000,000 | 32,600,000 | $ 35,600,000 | ||||
Interest Expense, Debt | 300,000 | $ 1,000,000 | |||||
Debt Instrument, Redemption Amount | $ 49,400,000 | ||||||
Senior Notes due 2024 | |||||||
Long-Term Debt | |||||||
Face amount of debt | $ 400,000,000 | ||||||
Interest rate percentage | 7.375% | ||||||
Proceeds from debt, net of discounts and issuance costs | $ 392,600,000 | ||||||
Immediate Due and Payable clause, percentage of holdings | 25.00% | ||||||
Senior Notes due 2026 | |||||||
Long-Term Debt | |||||||
Face amount of debt | $ 750,000,000 | ||||||
Interest rate percentage | 5.625% | ||||||
Proceeds from debt, net of discounts and issuance costs | $ 737,900,000 |
Long Term Debt - Debt Discount,
Long Term Debt - Debt Discount, Issuance Costs, Interest (Details) - USD ($) | Feb. 17, 2018 | Jan. 25, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Long-Term Debt | |||||||
Amortization of debt issuance costs | $ 0 | $ 0 | |||||
Interest Incurred On Long Term Debt | |||||||
Interest expense | 20,400,000 | $ 11,300,000 | 40,200,000 | $ 22,600,000 | |||
Interest costs capitalized | 2,100,000 | 3,200,000 | 4,700,000 | 5,600,000 | |||
Payment for Debt Extinguishment or Debt Prepayment Cost | 35,329,000 | 0 | |||||
Credit Facility | Other non-current assets | |||||||
Long-Term Debt | |||||||
Accumulated amortization, debt issuance costs | 4,100,000 | 4,100,000 | |||||
Debt issuance costs | 18,400,000 | 18,400,000 | |||||
Senior Notes due 2021 | |||||||
Long-Term Debt | |||||||
Amortization of Debt Issuance Costs, Accelerated Amount | 9,400,000 | ||||||
Interest Incurred On Long Term Debt | |||||||
Debt Instrument, Make Whole Provision | $ 3,000,000 | $ 32,600,000 | $ 35,600,000 | ||||
Second Lien Notes | |||||||
Long-Term Debt | |||||||
Amortization of debt discount | $ 900,000 | $ 900,000 | $ 11,400,000 | $ 1,700,000 |
Commodity Derivative Instrume44
Commodity Derivative Instruments - Summary of Contracts (Details) | 6 Months Ended |
Jun. 30, 2018USD ($)MMBTUcontract$ / bbl$ / MMBTUbbl | |
Commodity derivative contracts | |
Number of counterparties | contract | 12 |
Derivative instruments in a net liability position with credit-risk-related contingent features | $ | $ 0 |
Crude | Swaps, 2018 | |
Summary of commodity derivative contracts | |
Notional volume (in barrels) | bbl | 2,100,000 |
Weighted average fixed price, Swaps (in $/Bbl or$/MMBtu) | $ / bbl | 52.91 |
Crude | Swap, 2019 | |
Summary of commodity derivative contracts | |
Notional volume (in barrels) | bbl | 0 |
Weighted average fixed price, Swaps (in $/Bbl or$/MMBtu) | $ / bbl | 0 |
Crude | Calls, 2018 | Sold | |
Summary of commodity derivative contracts | |
Notional volume (in barrels) | bbl | 4,500,000 |
Weighted average fixed price, Calls (in $/BBl or $/MMBtu) | $ / bbl | 49.81 |
Crude | Calls, 2019 | Sold | |
Summary of commodity derivative contracts | |
Notional volume (in barrels) | bbl | 8,700,000 |
Weighted average fixed price, Calls (in $/BBl or $/MMBtu) | $ / bbl | 51.19 |
Crude | Puts, 2018 | Purchased | |
Summary of commodity derivative contracts | |
Notional volume (in barrels) | bbl | 4,500,000 |
Weighted average put price (in $/Bbl or $/MMBtu) | $ / bbl | 58.33 |
Crude | Put Option2019 [Member] | Purchased | |
Summary of commodity derivative contracts | |
Notional volume (in barrels) | bbl | 8,700,000 |
Weighted average put price (in $/Bbl or $/MMBtu) | $ / bbl | 64.37 |
Natural Gas | Swaps, 2018 | |
Summary of commodity derivative contracts | |
Notional volume (in MMBtu) | 6,600,000 |
Weighted average fixed price, Swaps (in $/Bbl or$/MMBtu) | $ / bbl | 40 |
Natural Gas | Swaps, 2018 | Purchased | |
Summary of commodity derivative contracts | |
Notional volume (in MMBtu) | 19,800,000 |
Weighted average fixed price, Swaps (in $/Bbl or$/MMBtu) | $ / MMBTU | 3.03 |
Natural Gas | Swap, 2019 | |
Summary of commodity derivative contracts | |
Notional volume (in MMBtu) | 8,700,000 |
Weighted average fixed price, Swaps (in $/Bbl or$/MMBtu) | $ / bbl | 41.69 |
Natural Gas | Swap, 2019 | Purchased | |
Summary of commodity derivative contracts | |
Notional volume (in MMBtu) | 12,000,000 |
Weighted average fixed price, Swaps (in $/Bbl or$/MMBtu) | $ / MMBTU | 2.79 |
Natural Gas | Calls, 2018 | Sold | |
Summary of commodity derivative contracts | |
Notional volume (in MMBtu) | 1,200,000 |
Weighted average fixed price, Calls (in $/BBl or $/MMBtu) | $ / MMBTU | 3.15 |
Natural Gas | Calls, 2019 | Sold | |
Summary of commodity derivative contracts | |
Notional volume (in MMBtu) | 0 |
Weighted average fixed price, Calls (in $/BBl or $/MMBtu) | $ / MMBTU | 0 |
Natural Gas | Puts, 2018 | Purchased | |
Summary of commodity derivative contracts | |
Notional volume (in MMBtu) | 1,200,000 |
Weighted average fixed price, Calls (in $/BBl or $/MMBtu) | $ / MMBTU | 3 |
Natural Gas | Put Option2019 [Member] | Purchased | |
Summary of commodity derivative contracts | |
Notional volume (in MMBtu) | 0 |
Weighted average fixed price, Calls (in $/BBl or $/MMBtu) | $ / MMBTU | 0 |
Natural Gas | Basis Swaps, 2018 | |
Summary of commodity derivative contracts | |
Notional volume (in MMBtu) | 21,460,000 |
Weighted average fixed basis price ($/MMBtu) | $ / MMBTU | (0.68) |
Natural Gas | Basis Swap, 2019 | |
Summary of commodity derivative contracts | |
Notional volume (in MMBtu) | 6,000,000 |
Weighted average fixed basis price ($/MMBtu) | $ / MMBTU | (0.78) |
Commodity Derivative Instrume45
Commodity Derivative Instruments - Gross and Net Fair Value (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Gross amounts and adjustments made for net derivative assets | ||
Gross Amounts of Recognized Assets | $ 86,397,000 | $ 22,118,000 |
Gross Amounts Offset in the Balance Sheet | (71,084,000) | (17,986,000) |
Net Amounts of Assets Presented in the Balance Sheet | 15,313,000 | 4,132,000 |
Gross Amounts not Offset in the Balance Sheet | (1,389,000) | 0 |
Net Amounts | 14,190,000 | 4,132,000 |
Non-current assets | ||
Gross amounts and adjustments made for net derivative assets | ||
Gross Amounts of Recognized Assets | 15,084,000 | 13,686,000 |
Gross Amounts Offset in the Balance Sheet | (14,818,000) | (13,686,000) |
Net Amounts of Assets Presented in the Balance Sheet | 266,000 | 0 |
Gross Amounts not Offset in the Balance Sheet | 0 | 0 |
Net Amounts | 0 | 0 |
Financial collateral | ||
Financial collateral received | 0 | 0 |
Financial collateral pledged | 0 | 0 |
Current liabilities | ||
Gross amounts and adjustments made for net derivative liabilities | ||
Gross Amounts of Recognized Liabilities | (224,651,000) | (85,414,000) |
Gross Amounts Offset in the Balance Sheet | 71,084,000 | 17,986,000 |
Net Amounts of Liabilities Presented in the Balance Sheet | (153,567,000) | (67,428,000) |
Gross Amounts not Offset in the Balance Sheet | 1,389,000 | 0 |
Net Amounts | (158,423,000) | (84,702,000) |
Non-current liabilities | ||
Gross amounts and adjustments made for net derivative liabilities | ||
Gross Amounts of Recognized Liabilities | (21,063,000) | (30,960,000) |
Gross Amounts Offset in the Balance Sheet | 14,818,000 | 13,686,000 |
Net Amounts of Liabilities Presented in the Balance Sheet | (6,245,000) | (17,274,000) |
Gross Amounts not Offset in the Balance Sheet | 0 | 0 |
Net Amounts | $ 0 | $ 0 |
Commodity Derivative Instrume46
Commodity Derivative Instruments - Gain (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income (loss) on derivatives | ||||
Commodity derivatives gain (loss) | $ (89,511) | $ 33,876 | $ (139,839) | $ 84,298 |
Other income (expense) | ||||
Income (loss) on derivatives | ||||
Gain (Loss) on Price Risk Derivatives, Net | $ (89,511) | $ 33,876 | $ (139,839) | $ 84,298 |
Asset Retirement Obligations -
Asset Retirement Obligations - Summary (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2016 | |
Asset retirement obligations | ||
Balance beginning of period | $ 69,540 | |
Liabilities incurred or acquired | 1,066 | $ 9,802 |
Liabilities settled | (5,178) | (4,169) |
Revisions in estimated cash flows | 1,438 | 2,630 |
Accretion expense | 2,764 | 5,169 |
Balance end of period | $ 69,630 | $ 56,108 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | |
Fair Value Measurements | ||||||
Impairment of Oil and Gas Properties | $ 0 | $ 0 | $ 0 | $ 0 | ||
Asset transfers out of Level 2 into Level 1 | 0 | 0 | $ 0 | |||
Asset transfers into (out of) Level 3 | 0 | $ 0 | ||||
Liability transfers out of Level 1 into Level 2 | 0 | 0 | 0 | |||
Liability transfers out of Level 2 into Level 1 | 0 | 0 | 0 | |||
Liability transfers into (out of) Level 3 | 0 | $ 0 | ||||
Recurring | ||||||
Financial Assets: | ||||||
Commodity derivative assets | 15,579,000 | 15,579,000 | 4,132,000 | |||
Financial Liabilities: | ||||||
Commodity derivative liabilities | 159,812,000 | 159,812,000 | 84,702,000 | |||
Recurring | Level 1 | ||||||
Financial Assets: | ||||||
Commodity derivative assets | 0 | 0 | 0 | |||
Financial Liabilities: | ||||||
Commodity derivative liabilities | 0 | 0 | 0 | |||
Recurring | Level 2 | ||||||
Financial Assets: | ||||||
Commodity derivative assets | 15,579,000 | 15,579,000 | 4,132,000 | |||
Financial Liabilities: | ||||||
Commodity derivative liabilities | 159,812,000 | 159,812,000 | 84,702,000 | |||
Recurring | Level 3 | ||||||
Financial Assets: | ||||||
Commodity derivative assets | 0 | 0 | 0 | |||
Financial Liabilities: | ||||||
Commodity derivative liabilities | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value of Financial Instruments | ||
Unamortized debt discount and debt issuance costs | $ 18,421 | $ 16,639 |
Carrying Amount | Senior Notes due 2021 | ||
Fair Value of Financial Instruments | ||
Long-term debt | 0 | 540,382 |
Unamortized debt discount and debt issuance costs | 0 | 9,600 |
Carrying Amount | Senior Notes due 2024 | ||
Fair Value of Financial Instruments | ||
Long-term debt | 393,414 | 392,979 |
Unamortized debt discount and debt issuance costs | 6,600 | 7,000 |
Carrying Amount | Senior Notes due 2026 | ||
Fair Value of Financial Instruments | ||
Long-term debt | 738,165 | 0 |
Unamortized debt discount and debt issuance costs | 11,800 | 0 |
Fair value | Level 2 | Senior Notes due 2021 | ||
Fair Value of Financial Instruments | ||
Long-term debt | 0 | 583,000 |
Fair value | Level 2 | Senior Notes due 2024 | ||
Fair Value of Financial Instruments | ||
Long-term debt | 419,000 | 427,000 |
Fair value | Level 2 | Senior Notes due 2026 | ||
Fair Value of Financial Instruments | ||
Long-term debt | 725,625 | 0 |
Line of Credit | Carrying Amount | ||
Fair Value of Financial Instruments | ||
Long-term debt | 190,000 | 90,000 |
Line of Credit | Fair value | Level 2 | ||
Fair Value of Financial Instruments | ||
Long-term debt | $ 190,000 | $ 90,000 |
Fair Value Measurements - Nonre
Fair Value Measurements - Nonrecurring (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | ||||
Impairment of Oil and Gas Properties | $ 0 | $ 0 | $ 0 | $ 0 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Taxes | ||||
Effective combined U.S. federal and state income tax rate | 18.70% | |||
Income tax expense (in dollars) | $ 4,200 | $ 4,420 | $ (9,900) | $ 9,550 |
Statutory U.S. federal income tax rate | 21.00% |
Unit and Stock-Based Compensa52
Unit and Stock-Based Compensation - Long Term Incentive Plan (Details) shares in Millions | Oct. 31, 2016shares |
2016 Long Term Incentive Plan | |
Share-based compensation | |
Shares reserved for issuance | 20.2 |
Unit and Stock-Based Compensa53
Unit and Stock-Based Compensation - Long Term Incentive Plan Options (Details) - 2016 Long Term Incentive Plan - Stock Options - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Assumptions used for the Black-Scholes valuation model | ||||
Dividend yield (as a percent) | 0.00% | |||
Forfeiture rate (as a percent) | 0.00% | |||
Vesting period, in years | 3 years | |||
Compensation costs | ||||
Share-based compensation expense | $ 3.8 | $ 3.3 | $ 7.5 | $ 6.6 |
Unrecognized compensation costs | $ 19.7 | $ 19.7 | ||
Weighted-average period for recognition, unvested awards | 1 year 3 months 18 days | |||
Number of Shares | ||||
Granted (in shares) | 0 | |||
Forfeited (in shares) | 0 | |||
Vested (in shares) | 0 | |||
Non-vested Stock Options at end of period (in shares) | 3,496,290 | 3,496,290 | ||
Weighted Average Exercise Price (in dollars per share) | ||||
Granted (in dollars per share) | $ 0 | |||
Forfeited (in dollars per share) | 0 | |||
Vested (in dollars per share) | 0 | |||
Non-vested Stock Options at end of period (in dollars per share) | $ 18.50 | $ 18.50 |
Unit and Stock-Based Compensa54
Unit and Stock-Based Compensation - Long Term Incentive Plan RSUs (Details) - 2016 Long Term Incentive Plan - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stock Options | ||||
Restricted Stock Units ("RSUs") | ||||
Vesting period, in years | 3 years | |||
Forfeiture rate (as a percent) | 0.00% | |||
Compensation costs | ||||
Share-based compensation expense | $ 3.8 | $ 3.3 | $ 7.5 | $ 6.6 |
Weighted-average period for recognition, unvested awards | 1 year 3 months 18 days | |||
RSUs | ||||
Restricted Stock Units ("RSUs") | ||||
Forfeiture rate (as a percent) | 0.00% | |||
Compensation costs | ||||
Share-based compensation expense | 7.5 | $ 7.8 | $ 13.6 | $ 15.8 |
Unrecognized compensation cost | $ 45.6 | $ 45.6 | ||
Weighted-average period for recognition, unvested awards | 1 year 9 months 18 days | |||
RSUs - One Year Vesting | ||||
Restricted Stock Units ("RSUs") | ||||
Vesting period, in years | 1 year | |||
Vesting Period One | RSUs - One Year Vesting | ||||
Restricted Stock Units ("RSUs") | ||||
Vesting percentage | 100.00% | |||
Vesting Period One | RSUs - Three Year Vesting | ||||
Restricted Stock Units ("RSUs") | ||||
Vesting period, in years | 1 year | |||
Vesting percentage | 25.00% | |||
Vesting Period Two | RSUs - Three Year Vesting | ||||
Restricted Stock Units ("RSUs") | ||||
Vesting period, in years | 2 years | |||
Vesting percentage | 25.00% | |||
Vesting Period Three | RSUs - Three Year Vesting | ||||
Restricted Stock Units ("RSUs") | ||||
Vesting period, in years | 3 years | |||
Vesting percentage | 50.00% |
Unit and Stock-Based Compensa55
Unit and Stock-Based Compensation - Long Term Incentive Plan RSUs Rollforward (Details) - 2016 Long Term Incentive Plan | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
RSUs | |
Number of Shares | |
Non-vested units at beginning of period (in shares) | shares | 2,906,473 |
Granted (in shares) | shares | 1,099,468 |
Forfeited (in shares) | shares | (41,425) |
Vested (in shares) | shares | (218,013) |
Non-vested units at end of period (in shares) | shares | 3,746,503 |
Weighted Average Grant Date Fair Value | |
Non-vested units at beginning of period (in dollars per share) | $ / shares | $ 19.51 |
Granted (in dollars per share) | $ / shares | 12.82 |
Forfeited (in dollars per share) | $ / shares | 16.12 |
Vested (in dollars per share) | $ / shares | 15.90 |
Non-vested units at end of period (in dollars per share) | $ / shares | $ 17.78 |
Performance Stock Awards | |
Number of Shares | |
Non-vested units at beginning of period (in shares) | shares | 832,163 |
Granted (in shares) | shares | 1,961,920 |
Forfeited (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Non-vested units at end of period (in shares) | shares | 2,794,083 |
Weighted Average Grant Date Fair Value | |
Non-vested units at beginning of period (in dollars per share) | $ / shares | $ 8.85 |
Granted (in dollars per share) | $ / shares | 9.06 |
Forfeited (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0 |
Non-vested units at end of period (in dollars per share) | $ / shares | $ 9 |
Unit and Stock-Based Compensa56
Unit and Stock-Based Compensation - Incentive Restricted Stock Units (Details) - USD ($) $ in Thousands, shares in Millions | Jul. 17, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Compensation costs | |||||
Unit-based compensation | $ 33,464 | $ 28,597 | |||
Employee Incentive | Incentive RSUs | Vesting Period One | |||||
Incentive Units | |||||
Service vesting period, in years | 3 years | ||||
Vesting percentage | 25.00% | 25.00% | |||
Employee Incentive | Incentive RSUs | Vesting Period Two | |||||
Incentive Units | |||||
Vesting percentage | 25.00% | 25.00% | |||
Employee Incentive | Incentive RSUs | Vesting Period Three | |||||
Incentive Units | |||||
Vesting percentage | 25.00% | 50.00% | |||
Employee Incentive | Incentive RSUs | Vesting Period Four | |||||
Incentive Units | |||||
Vesting percentage | 25.00% | ||||
Employee Incentive | Incentive RSUs | |||||
Compensation costs | |||||
Unit-based compensation | $ 4,900 | $ 1,800 | $ 9,800 | $ 6,200 | |
Unrecognized compensation cost | 10,700 | $ 10,700 | |||
Weighted-average period for recognition, unvested awards | 6 months | ||||
Employee Incentive | Incentive RSUs | Vesting Period One | |||||
Incentive Units | |||||
Vesting period, in years | 1 year | ||||
Employee Incentive | Incentive RSUs | Vesting Period Two | |||||
Incentive Units | |||||
Vesting period, in years | 6 months | 2 years | |||
Employee Incentive | Incentive RSUs | Vesting Period Three | |||||
Incentive Units | |||||
Vesting period, in years | 12 months | 3 years | |||
Employee Incentive | Incentive RSUs | Vesting Period Four | |||||
Incentive Units | |||||
Vesting period, in years | 18 months | ||||
Officers | Employee Incentive | Employee Incentive | Common Stock | |||||
Incentive Units | |||||
Shares contributed to Extraction Employee Incentive, LLC | 2.7 | ||||
2016 Long Term Incentive Plan | RSUs | |||||
Incentive Units | |||||
Forfeiture rate (as a percent) | 0.00% | ||||
Compensation costs | |||||
Unrecognized compensation cost | $ 45,600 | $ 45,600 | |||
Weighted-average period for recognition, unvested awards | 1 year 9 months 18 days |
Unit and Stock-Based Compensa57
Unit and Stock-Based Compensation - Incentive Restricted Stock Units Rollforward (Details) - Incentive RSUs | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of Shares | |
Non-vested units at beginning of period (in shares) | shares | 1,496,175 |
Granted (in shares) | shares | 0 |
Forfeited (in shares) | shares | (37,350) |
Vested (in shares) | shares | (498,725) |
Non-vested units at end of period (in shares) | shares | 960,100 |
Weighted Average Grant Date Fair Value | |
Non-vested units at beginning of period (in dollars per share) | $ / shares | $ 20.45 |
Granted (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 20.45 |
Vested (in dollars per share) | $ / shares | 20.45 |
Non-vested units at end of period (in dollars per share) | $ / shares | $ 20.45 |
Unit and Stock-Based Compensa58
Unit and Stock-Based Compensation Unit and Stock-Based Compensation - Performance Stock Awards (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 33,464 | $ 28,597 | |
Performance Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 1,500 | 2,600 | |
Unrecognized compensation cost | $ 12,300 | $ 12,300 | |
Weighted-average period for recognition, unvested awards | 2 years 2 months 12 days |
Earnings (Loss) Per Share - Com
Earnings (Loss) Per Share - Components (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Basic and Diluted EPS (in thousands, except per share data) | ||||
Net loss | $ 8,848 | $ 7,240 | $ (43,147) | $ 15,956 |
Less: Adjustment to reflect Series A Preferred Stock dividend | (2,721) | (2,722) | (5,443) | (5,443) |
Less: Adjustment to reflect Series A Preferred Stock dividend | (1,476) | (1,331) | (2,914) | (2,627) |
Adjusted net income (loss) available to common shareholders, basic and diluted | $ 4,651 | $ 3,187 | $ (51,504) | $ 7,886 |
Denominator | ||||
Weighted average common shares outstanding, basic and diluted | 175,762,000 | 171,835,000 | 174,992,000 | 171,835,000 |
Earnings Per Common Share | ||||
Basic and diluted (in dollars per share) | $ 0.03 | $ 0.02 | $ (0.29) | $ 0.05 |
Earnings (Loss) Per Share - Exc
Earnings (Loss) Per Share - Excluded and Antidilutive Securities (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Out-of-the-money stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Securities excluded from diluted EPS calculation (in shares) | 5,244,428 | 4,500,000 | ||
RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Securities excluded from diluted EPS calculation (in shares) | 413,154 | 359,338 | ||
Series A Convertible Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Securities excluded from diluted EPS calculation (in shares) | 11,472,445 | 11,472,445 | 11,472,445 | |
Stock Compensation Plan [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Securities excluded from diluted EPS calculation (in shares) | 8,571,683 |
Commitments and Contingencies -
Commitments and Contingencies - Leases (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($)office | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)office | Jun. 30, 2017USD ($) | Jun. 04, 2015office | |
Office Space Leases | |||||
Future minimum lease payments | |||||
Total rental commitments under non cancelable leases | $ 34.4 | $ 34.4 | |||
2,017 | 1.6 | 1.6 | |||
2,018 | 3.5 | 3.5 | |||
2,019 | 3.4 | 3.4 | |||
2,020 | 3.4 | 3.4 | |||
2,021 | 3.4 | 3.4 | |||
Thereafter | 19.1 | 19.1 | |||
Rent expense | $ 0.9 | $ 0.6 | $ 1.7 | $ 1.2 | |
Office Space Leases | Denver, Colorado | |||||
Leases | |||||
Number of office spaces under lease | office | 2 | 2 | |||
Office Space Leases | Greeley, Colorado | |||||
Leases | |||||
Number of office spaces under lease | office | 2 | 2 | |||
Office Space Leases | Houston, Texas | |||||
Leases | |||||
Number of office spaces under lease | office | 1 | 1 | |||
Subleases | Denver, Colorado | |||||
Leases | |||||
Number of office spaces under lease | office | 1 | ||||
Future minimum lease payments | |||||
Sublease rental, future lease payments | $ 0.4 | $ 0.4 |
Commitments and Contingencies62
Commitments and Contingencies - Drilling Rigs (Details) - Drilling Rig Commitments $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($)well | |
Drilling Rigs | |
Number of drilling rigs | well | 3 |
Early termination obligation | $ | $ 9.3 |
Commitments and Contingencies63
Commitments and Contingencies - Commitments (Details) $ in Millions | Jul. 07, 2017MMcf | Dec. 15, 2016MMcf | Jun. 30, 2018USD ($)bbl / dcontract | Aug. 07, 2017processing_plant |
Delivery and Gathering commitments | ||||
Aggregate estimated payments due | $ | $ 991.4 | |||
Long Term Crude Oil Delivery Commitment, November 2016, Ten Year Term | Minimum | ||||
Delivery and Gathering commitments | ||||
Delivery commitment, in barrels per day (Bpd), year one | 45,000 | |||
Delivery commitment, in barrels per day (Bpd), year two | 55,800 | |||
Delivery commitment, in barrels per day (Bpd), years three through seven | 61,800 | |||
Delivery commitment, in barrels per day (Bpd), years eight through ten | 58,000 | |||
Long Term Crude Oil Gathering Commitment | ||||
Delivery and Gathering commitments | ||||
Term of commitment | 10 years | |||
Number of commitments | contract | 2 | |||
Long Term Crude Oil Gathering Commitment | Average | ||||
Delivery and Gathering commitments | ||||
Gathering commitment, in barrels per day (Bpd), year one | 9,167 | |||
Gathering commitment, in barrels per day (Bpd), year two | 17,967 | |||
Gathering commitment, in barrels per day (Bpd), years three through five | 18,800 | |||
Gathering commitment, in barrels per day (Bpd), years six through ten | 10,000 | |||
Long Term Crude Oil Gathering Commitment Two | ||||
Delivery and Gathering commitments | ||||
Term of commitment | 10 years | |||
Long Term Crude Oil Gathering Commitment Two | Average | ||||
Delivery and Gathering commitments | ||||
Gathering commitment, in barrels per day (Bpd), year one | 8,000 | |||
Gathering commitment, in barrels per day (Bpd), year two | 20,000 | |||
Gathering commitment, in barrels per day (Bpd), year three | 35,000 | |||
Gathering commitment, in barrels per day (Bpd), year four through eight | 40,000 | |||
Gathering commitment, in barrels per day (Bpd), year nine | 30,000 | |||
Gathering commitment, in barrels per day (Bpd), year ten | 25,000 | |||
Natural Gas Gathering and Processing Expansion Commitment | ||||
Delivery and Gathering commitments | ||||
Term of commitment | 7 years | |||
Processing Plant, Number | processing_plant | 2 | |||
Delivery commitment, daily | MMcf | 20.6 | 51.5 | ||
Target profit margin period, in years | 3 years |
Commitments and Contingencies64
Commitments and Contingencies - Acquisition of Undeveloped Leasehold (Details) - Acquisition of Undeveloped Leasehold Acreage Commitments $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($)a | |
Acquisition of Undeveloped Leasehold Acreage Commitments | |
Payments for other commitments | $ | $ 247.6 |
Net acres of undeveloped leasehold | a | 38,800 |
Related Party Transactions - Du
Related Party Transactions - Due From Related Parties (Details) | 1 Months Ended |
Apr. 30, 2016USD ($) | |
Board member | Star Peak Capital Office Lease | |
Office Lease with Related Affiliate | |
Monthly rent | $ 1,400 |
Related Party Transactions - 66
Related Party Transactions - Due to Related Parties (Details) | Oct. 17, 2016USD ($) | Jun. 30, 2018USD ($)bbl / d | Jan. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jul. 31, 2016USD ($) |
Due to Related Party | |||||
Face amount of debt | $ 750,000,000 | ||||
Aggregate estimated payments due | $ 991,400,000 | ||||
Long Term Crude Oil Gathering Commitment | |||||
Due to Related Party | |||||
Term of commitment | 10 years | ||||
Long Term Crude Oil Gathering Commitment | Average | |||||
Due to Related Party | |||||
Gathering commitment, in barrels per day (Bpd), year one | bbl / d | 9,167 | ||||
Gathering commitment, in barrels per day (Bpd), year two | bbl / d | 17,967 | ||||
Gathering commitment, in barrels per day (Bpd), years three through five | bbl / d | 18,800 | ||||
Gathering commitment, in barrels per day (Bpd), years six through ten | bbl / d | 10,000 | ||||
Unconsolidated affiliate | Long Term Crude Oil Delivery Commitment, November 2016, Ten Year Term | |||||
Due to Related Party | |||||
Term of commitment | 10 years | ||||
Series A Convertible Preferred Stock | |||||
Due to Related Party | |||||
Issuance of stock | $ 185,300,000 | ||||
Series A Convertible Preferred Stock | Related Party Debt Transaction | 5% Holdings' Members | |||||
Due to Related Party | |||||
Debt outstanding | $ 105,000,000 | ||||
Senior Notes due 2021 | |||||
Due to Related Party | |||||
Face amount of debt | 550,000,000 | $ 550,000,000 | |||
Debt outstanding | 0 | $ 550,000,000 | |||
Senior Notes due 2021 | Related Party Debt Transaction | 5% Holdings' Members | |||||
Due to Related Party | |||||
Debt outstanding | 63,500,000 | ||||
Senior Notes due 2024 | |||||
Due to Related Party | |||||
Face amount of debt | 400,000,000 | ||||
Senior Notes due 2024 | Related Party Debt Transaction | 5% Holdings' Members | |||||
Due to Related Party | |||||
Debt outstanding | 54,900,000 | ||||
Senior Notes due 2026 | |||||
Due to Related Party | |||||
Face amount of debt | $ 750,000,000 | ||||
Debt outstanding | 750,000,000 | $ 0 | |||
Senior Notes due 2026 | Related Party Debt Transaction | 5% Holdings' Members | |||||
Due to Related Party | |||||
Debt outstanding | $ 56,200,000 |