Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | May 07, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-37670 | |
Entity Registrant Name | Lonestar Resources US Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-0874035 | |
Entity Address, Address Line One | 111 Boland Street | |
Entity Address, Address Line Two | Suite 301 | |
Entity Address, City or Town | Fort Worth | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76107 | |
City Area Code | 817 | |
Local Phone Number | 921-1889 | |
Title of 12(b) Security | Common Stock, par value $0.001 | |
Trading Symbol | LONE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 10,097,281 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001661920 | |
Current Fiscal Year End Date | --12-31 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 19,494 | $ 17,474 |
Restricted cash | 2,157 | 8,972 |
Accounts receivable | ||
Oil, natural gas liquid and natural gas sales | 18,839 | 11,635 |
Joint interest owners and others, net | 2,053 | 4,076 |
Derivative financial instruments | 840 | 1,703 |
Prepaid expenses and other | 1,534 | 1,118 |
Total current assets | 44,917 | 44,978 |
Oil and gas properties, using the successful efforts method of accounting | ||
Proved properties | 327,096 | 314,685 |
Unproved properties | 34,145 | 34,929 |
Other property and equipment | 19,690 | 19,680 |
Less accumulated depreciation, depletion and amortization | (7,237) | (2,056) |
Property and equipment, net | 373,694 | 367,238 |
Accounts receivable | 6,200 | 6,053 |
Derivative financial instruments | 510 | 395 |
Other non-current assets | 4,444 | 4,651 |
Total assets | 429,765 | 423,315 |
Current liabilities | ||
Accounts payable | 16,801 | 7,651 |
Oil, natural gas liquid and natural gas sales payable | 15,180 | 18,760 |
Accrued liabilities | 7,763 | 15,983 |
Derivative financial instruments | 23,803 | 7,938 |
Current maturities of long-term debt | 20,000 | 20,000 |
Total current liabilities | 83,547 | 70,332 |
Long-term liabilities | ||
Long-term debt | 250,331 | 255,328 |
Asset retirement obligations | 4,190 | 4,573 |
Derivative financial instruments | 5,772 | 835 |
Total long-term liabilities | 260,293 | 260,736 |
Commitments and contingencies (Note 11) | ||
Stockholders' Equity | ||
Common stock, $0.001 par value, 100,000,000 shares authorized, 10,000,149 shares issued and outstanding | 10 | 10 |
Additional paid-in capital | 92,953 | 92,953 |
Accumulated deficit | (7,038) | (716) |
Total stockholders' equity | 85,925 | 92,247 |
Total liabilities and stockholders' equity | $ 429,765 | $ 423,315 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 10,000,149 | 10,000,149 |
Common stock, shares outstanding (in shares) | 10,000,149 | 10,000,149 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements Of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues | ||
Revenues | $ 39,816 | $ 37,009 |
Expenses | ||
Lease operating | 4,446 | 7,638 |
Production and ad valorem taxes | 2,421 | 2,369 |
Depreciation, depletion and amortization | 5,309 | 24,354 |
Impairment of oil and gas properties | 0 | 199,908 |
General and administrative | 3,977 | 2,881 |
Other | 10 | (223) |
Total expenses | 17,705 | 239,077 |
Income (loss) from operations | 22,111 | (202,068) |
Other (expense) income | ||
Interest expense | (4,106) | (11,610) |
Change in fair value of warrants | 0 | 363 |
(Loss) gain on derivative financial instruments | (24,167) | 101,169 |
Total other (expense) income | (28,273) | 89,922 |
Loss before income taxes | (6,162) | (112,146) |
Income tax (expense) benefit | (160) | 1,355 |
Net Loss | (6,322) | (110,791) |
Preferred stock dividends | 0 | (2,257) |
Net loss attributable to common stockholders | $ (6,322) | $ (113,048) |
Net loss per common share | ||
Basic (in dollars per share) | $ (0.63) | $ (4.52) |
Diluted (in dollars per share) | $ (0.63) | $ (4.52) |
Weighted average common shares outstanding | ||
Basic (in shares) | 10,000,149 | 25,003,977 |
Diluted (in shares) | 10,000,149 | 25,003,997 |
Oil sales | ||
Revenues | ||
Revenues | $ 27,872 | $ 29,990 |
Natural gas liquid sales | ||
Revenues | ||
Revenues | 4,297 | 2,599 |
Natural gas sales | ||
Revenues | ||
Revenues | 7,647 | 4,420 |
Gas gathering, processing and transportation | ||
Expenses | ||
Cost of goods and services sold | $ 1,542 | $ 2,150 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statement of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Class A Voting Common Stock | Series A-1 Preferred Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2019 | 24,945,594 | 100,328 | ||||
Beginning balance at Dec. 31, 2019 | $ 120,887 | $ 142,655 | $ 175,738 | $ (197,506) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Payment-in-kind dividends (in shares) | 2,257 | |||||
Stock-based compensation (in shares) | 308,435 | |||||
Stock-based compensation | 240 | 240 | ||||
Net income (loss) | (110,791) | (110,791) | ||||
Ending balance (in shares) at Mar. 31, 2020 | 25,254,029 | 102,585 | ||||
Ending balance at Mar. 31, 2020 | 10,336 | $ 142,655 | 175,978 | (308,297) | ||
Beginning balance (in shares) at Dec. 31, 2020 | 10,000,149 | |||||
Beginning balance at Dec. 31, 2020 | 92,247 | $ 10 | 92,953 | (716) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (6,322) | (6,322) | ||||
Ending balance (in shares) at Mar. 31, 2021 | 10,000,149 | |||||
Ending balance at Mar. 31, 2021 | $ 85,925 | $ 10 | $ 92,953 | $ (7,038) |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (6,322) | $ (110,791) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Accretion of asset retirement obligations | 115 | 86 |
Depreciation, depletion and amortization | 5,181 | 24,268 |
Stock-based compensation | 0 | (2,022) |
Deferred taxes | 0 | (1,376) |
Loss (gain) on derivative financial instruments | 24,662 | (101,169) |
Settlements of derivative financial instruments | (3,370) | 1,096 |
Impairment of oil and gas properties | 0 | 199,908 |
Gain on disposal of property and equipment | 0 | 83 |
Non-cash interest expense | 482 | 768 |
Change in fair value of warrants | 0 | (363) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (5,328) | 6,117 |
Prepaid expenses and other assets | (343) | (374) |
Accounts payable and accrued expenses | (13,194) | (2,396) |
Net cash provided by operating activities | 1,883 | 13,835 |
Cash flows from investing activities | ||
Acquisition of oil and gas properties | (1,215) | (816) |
Development of oil and gas properties | (389) | (34,753) |
Proceeds from sale of oil and gas properties | 0 | 317 |
Purchases of other property and equipment | (11) | (524) |
Net cash used in investing activities | (1,615) | (35,776) |
Cash flows from financing activities | ||
Proceeds from borrowings | 0 | 28,000 |
Payments on borrowings | (5,063) | (8,054) |
Net cash (used in) proved by financing activities | (5,063) | 19,946 |
Net decrease in cash, cash equivalents and restricted cash | (4,795) | (1,995) |
Cash, cash equivalents and restricted cash, beginning of the period | 26,446 | 3,137 |
Cash, cash equivalents and restricted cash, end of the period | 21,651 | 1,142 |
Supplemental information: | ||
Cash paid for interest | 3,648 | 3,957 |
Non-cash investing and financing activities: | ||
Change in asset retirement obligation | (382) | (253) |
Change in liabilities for capital expenditures | $ (14,305) | $ (1,040) |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Organization and Nature of Operations Lonestar Resources US Inc. (“Lonestar” or the “Company”) is an independent oil and natural gas company focused on the exploration, development and production of unconventional oil, natural gas liquids and natural gas in the Eagle Ford Shale play in South Texas. Interim Financial Statements The accompanying unaudited condensed consolidated financial statements (“Unaudited Condensed Consolidated Financial Statements”) of Lonestar Resources US Inc., and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. These financial statements and the notes thereto should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020 filed on March 31, 2021, as supplemented by our amendment on Form 10-K/A filed with the SEC on April 30, 2021 (the “Form 10-K”). Unless indicated otherwise or the context requires, the terms “we,” “our,” “us,” “Company” or “Lonestar,” refer to Lonestar Resources US Inc. and its subsidiaries. The results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the year. In management’s opinion, the accompanying Unaudited Condensed Consolidated Financial Statements include all adjustments of a normal recurring nature necessary for a fair statement of our consolidated financial position as of March 31, 2021 and our consolidated results of operations for the three months ended March 31, 2021 and March 31, 2020. Emergence from Voluntary Reorganization Under Chapter 11 of the Bankruptcy Code On September 30, 2020 (the “Petition Date”), Lonestar Resources US Inc. and 21 of its directly and indirectly owned subsidiaries (collectively, the “Debtors”), filed voluntary petitions (“Bankruptcy Petitions”) for relief under Chapter 11 (“Chapter 11”) of the U.S. Bankruptcy Code (“Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of Texas (“Bankruptcy Court”). The Debtors’ Chapter 11 cases were administered jointly under the caption In re Lonestar Resources US Inc., et al., Case No. 20-34805 (collectively, the “Chapter 11 Proceedings”). During the pendency of the Chapter 11 Proceedings, the Debtors in the Chapter 11 Proceedings, operated their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. On November 12, 2020, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the chapter 11 plan of reorganization (the “Plan”) and approving the Disclosure Statement. The Company emerged from bankruptcy and went effective with its Plan on November 30, 2020 (the “Effective Date”). In January 2021, the Successor’s (as defined below) new common stock commenced trading on the OTCQX Best Market under the ticker symbol “LONE”. Comparability of Financial Statements to Prior Periods The Company adopted and began applying the relevant guidance provided in GAAP with respect to the accounting and financial statement disclosures for entities that have emerged from bankruptcy proceedings (“Fresh Start Accounting”) on the Effective Date. Accordingly, the Company’s Unaudited Condensed Consolidated Financial Statements and Notes to Unaudited Condensed Consolidated Financial Statements after November 30, 2020, are not comparable to the Unaudited Condensed Consolidated Financial Statements and Notes to Unaudited Condensed Consolidated Financial Statements through that date. To facilitate financial statement presentations, we refer to the reorganized company in these Condensed Consolidated Financial Statements and Notes as the “Successor,” which is effectively a new reporting entity for financial reporting purposes, for periods subsequent to November 30, 2020, and the “Predecessor” for periods prior to and including November 30, 2020. In connection with our reorganization, the Company experienced a change in control as the outstanding common and preferred shares of the Predecessor were canceled and substantially all of the Successor’s new common stock was issued to the Predecessor’s bondholders. Furthermore, our Unaudited Condensed Consolidated Financial Statements and Notes to Unaudited Condensed Consolidated Financial Statements have been presented with a “black line” division to delineate, where applicable, the lack of comparability between the Predecessor and Successor. Accordingly, our results of operations, financial position and cash flows for the Successor periods are not comparable. Reclassifications Certain prior-period amounts have been reclassified to conform to the current period presentation. Such reclassifications had no impact on the Company’s reported total revenues, expenses, net loss, current assets, total assets, current liabilities, total liabilities or stockholders’ equity. Cash, Cash Equivalents and Restricted Cash The Company considers all highly-liquid investments to be cash equivalents if they have maturities of three months or less when purchased. The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within the Unaudited Condensed Consolidated Balance Sheets to “Cash, cash equivalents and restricted cash at the end of the period” as reported within the Unaudited Condensed Consolidated Statements of Cash Flows: Successor Predecessor In thousands March 31, 2021 March 31, 2020 Cash and cash equivalents $ 19,494 $ 1,142 Restricted cash, current 2,157 — Total cash, cash equivalents and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows $ 21,651 $ 1,142 Restricted cash, current in the table above represents funds reserved to cover the balance of the PPP (as defined below) loan until the Successor receives the final loan forgiveness determination from the Small Business Administration (“SBA”), in accordance with SBA guidance, or until the PPP loan is repaid. COVID-19 During the first quarter and through early-May 2021, the oil and natural gas industry has experienced continued improvement in commodity prices as compared to the same period in 2020, primarily resulting from (i) improvements in oil demand as the impact from COVID-19 has begun to abate and (ii) actions taken by the Organization of Petroleum Exporting Countries, Russia and certain other oil-exporting countries (“OPEC+”) to reduce the worldwide supply of oil through coordinated production cuts. As a result, West Texas Intermediate (“WTI”) oil prices have increased from $48.52 per barrel at December 31, 2020 to as high as $66.09 per barrel in early March 2021. Prices for natural gas and NGLs were also much higher during the first quarter and through early-May 2021 than they were for the same period in 2020. While oil prices have continued to improve in 2021, the general outlook for the oil and natural gas industry for the remainder of the year remains uncertain, and the Company can provide no assurances as to when or to what extent economic disruptions resulting from COVID-19 and the corresponding decreases in oil demand may impact the Company. CARES Act On March 27, 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) to provide certain taxpayer relief as a result of the COVID-19 pandemic. The CARES Act included several favorable provisions that impacted income taxes, primarily the modified rules on the deductibility of business interest expense for 2019 and 2020, a five-year carryback period for net operating losses generated after 2017 and before 2021, and the acceleration of refundable alternative minimum tax credits. The CARES Act did not materially impact the Predecessor’s or Successor’s effective tax rates for the three months ended March 31, 2020 and 2021, respectively. The Company applied for, and received, a loan under the Paycheck Protection Program (“PPP”) during the second quarter of 2020 in the amount of $2.2 million. The application for this loan required the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further required the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The receipt of this loan, and the forgiveness of the loan, is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness of such loan based on our future adherence to the forgiveness criteria. The PPP loan bears interest of 1% and, if not forgiven, has a maturity date of May 8, 2022. Prior to emergence from Chapter 11, the Predecessor applied for loan forgiveness and placed cash equal to the outstanding principal balance of the PPP loan in escrow pending the final forgiveness determination by the SBA, in accordance with SBA guidelines. To date, forgiveness has not been received. The PPP Loan is subject to any new guidance and new requirements released by the Department of the Treasury who has indicated that all companies that have received funds in excess of $2.0 million will be subject to a government (SBA) audit to further ensure PPP loans are limited to eligible borrowers in need. Impairment of Long-Lived Assets The carrying value of long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When it is determined that the estimated future net cash flows of an asset will not be sufficient to recover its carrying amount, an impairment loss must be recorded to reduce the carrying amount to its estimated fair value. Judgments and assumptions are inherent in management’s estimate of undiscounted future cash flows and an asset’s fair value. These judgments and assumptions include such matters as the estimation of oil and gas reserve quantities, risks associated with the different categories of oil and gas reserves, the timing of development and production, expected future commodity prices, capital expenditures, production costs, and appropriate discount rates. The Company evaluates impairment of proved and unproved oil and gas properties on a region basis. On this basis, certain regions may be impaired because they are not expected to recover their entire carrying value from future net cash flows. As a result of this evaluation, the Predecessor recorded impairment of oil and gas properties of $199.9 million for the three months ended March 31, 2020, of which $199.0 million was proved and $0.9 million was unproved. The impairment was the result of removing development of proved undeveloped reserves (“PUDs”) and probable reserves from future net cash flows as the Predecessor could not assure that they would be developed going forward in light of continued depressed commodity prices and uncertainty regarding the Predecessor’s liquidity situation at the time. Upon emergence from bankruptcy, the Company adopted fresh start accounting which resulted in its long-lived assets being recorded at their estimated fair value at the Effective Date. There were no material changes to the key cash flow assumptions and no triggering events since December 31, 2020; therefore, no impairment was identified in the first quarter of 2021. Net Loss per Common Share Prior to the Effective Date, the Predecessor company used the two-class method to compute earnings per common share as its Class A Participating Preferred Stock (the “Preferred Stock”) was considered a participating security. Under the two-class method, losses are allocated only to those securities that have a contractual obligation to share in the losses of the Company. The Preferred Stock was not obligated to absorb Company losses and accordingly was not allocated losses. Net income attributable to common stockholders is allocated between common stock and participating securities based on the weighted average number of common shares and participating securities outstanding for the period. Upon the Effective Date, the Preferred Stock was extinguished and the two-class method is no longer necessary to compute earnings per share for the Successor. Basic earnings per share is computed by dividing the allocated net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted earnings per share is computed similarly except that the denominator is increased to include dilutive potential common shares. Potential common shares for the Predecessor consisted of warrants, equity compensation awards and preferred stock, while potential common shares for the Successor consist of warrants. In certain circumstances adjustment to the numerator is also required for changes in income or loss resulting from the potential common shares. Basic weighted average common shares exclude shares of non-vested restricted stock. As these restricted shares vest, they will be included in the shares outstanding used to calculate basic earnings per share. For the periods presented, there were no differences between the basic and diluted weighted average common shares. The following securities were excluded from the computation of diluted net loss per share, as their effect would have been antidilutive: Successor Predecessor Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Preferred stock — 16,725,467 Warrants 1,111,110 760,000 Stock appreciation rights — 1,010,000 Restricted stock units — 1,925,366 Recent Accounting Pronouncements Income Taxes. In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The objective of ASU 2019-12 is to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and to provide more consistent application to improve the comparability of financial statements. The amendments in this ASU were effective starting January 1, 2021 for the Company. The adoption of the standard did not have an impact on the Company’s Unaudited Condensed Consolidated Financial Statements. Financial Instruments — Credit Losses. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, and requires the use of a new forward-looking expected loss model that will result in the earlier recognition of allowances for losses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022 for Smaller Reporting Companies, which the Company currently is classified as, and interim periods within those fiscal years, and early adoption is permitted. Entities must adopt the amendment using a modified retrospective approach to the first reporting period in which the guidance is effective. The adoption of ASU 2016-13 is currently not expected to have a material effect on the Company’s Unaudited Condensed Consolidated Financial Statements. Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions to ease financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) or another reference rate to alternative reference rates. The amendments in this ASU were effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. Currently, the Company’s Successor Credit Agreements (as defined below) are the Company’s only contracts that makes reference to a LIBOR rate and the agreements outline the specific procedures that will be undertaken once an appropriate alternative benchmark is identified. The Company does not expect this guidance to have a significant impact on its Unaudited Condensed Consolidated Financial Statements and related footnote disclosures. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Commodity Derivative Instruments Lonestar enters into certain commodity derivative instruments to mitigate commodity price risk associated with a portion of its future oil, NGL and natural gas production and related cash flows. The oil, NGL and natural gas revenues and cash flows are affected by changes in commodity product prices, which are volatile and cannot be accurately predicted. The objective for entering into these commodity derivatives is to protect the operating revenues and cash flows related to a portion of the future oil, NGL and natural gas sales from the risk of significant declines in commodity prices, which helps ensure the Company’s ability to fund the capital budget. Inherent in Lonestar’s fixed price contracts are certain business risks, including market risk and credit risk. Market risk is the risk that the price of oil and natural gas will change, either favorably or unfavorably, in response to changing market conditions. Credit risk is the risk of loss from non-performance by the Company’s counterparty to a contract. The Company does not currently require cash collateral from any of its counterparties nor does its counterparties require cash collateral from the Company. As of March 31, 2021, the Company had no open physical delivery obligations. The following table summarizes Lonestar’s commodity derivative contracts as of March 31, 2021: Contract Volumes Weighted Commodity Type Period Range (1) (Bbls/Mcf per day) Average Price Oil - WTI Swaps Apr - Dec 2021 $42.20 - $58.00 6,061 $ 45.55 Oil - WTI Swaps Jan - Dec 2022 $44.83 - $51.44 3,123 47.11 Oil - WTI Swaps Jan - Dec 2023 $52.00 - $52.15 1,000 52.10 Natural Gas - Henry Hub Swaps Apr - Dec 2021 $2.86 - $3.05 14,691 2.98 Natural Gas - Henry Hub Swaps Jan - Dec 2022 $2.70 - $3.14 6,233 2.77 (1) Ranges presented for fixed-price swaps and basis swaps represent the lowest and highest fixed prices of all open contracts for the period presented. During April 2021, the Company entered into additional WTI swaps of 92,000 barrels (500 barrels per day) at an average strike price of $61.48 for the period of July through December 2021. The Company also entered into additional WTI swaps of 132,000 barrels (362 barrels per day) at an average strike of $54.58 for the period of January through June 2023. As of March 31, 2021, all of the Company’s economic derivative hedge positions were with large financial institutions, which are not known to the Company to be in default on their derivative positions. The Company is exposed to credit risk to the extent of non-performance by the counterparties in the derivative contracts discussed above; however, the Company does not anticipate non-performance by such counterparties. None of the Company’s derivative instruments contain credit-risk related contingent features. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Disaggregation of Revenue Operating revenues are comprised of sales of crude oil, NGLs and natural gas. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied. The Company recognizes revenue when control has been transferred to the customer, generally at the time commodities reach an agreed-upon delivery point. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products and is generally based upon a negotiated formula, list or fixed price based on a market index. Typically, the Company sells its products directly to customers generally under agreements with payment terms less than 30 days. The following table summarizes our revenues by product type for the three months ended March 31, 2021 and 2020: In thousands Successor Predecessor Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Oil $ 27,872 $ 29,990 NGLs 4,297 2,599 Natural gas 7,647 4,420 Total revenues $ 39,816 $ 37,009 As of March 31, 2021 (Successor) and December 31, 2020 (Successor) the accounts receivable balance representing amounts due or billable under the terms of contracts with purchasers was $18.8 million and $11.6 million, respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value measurements are based upon inputs that market participants use in pricing an asset or liability, which are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. Under Accounting Standards Codification (“ASC”), ASC 820 prioritizes the inputs used in measuring fair value into the following fair value hierarchy: • Level 1 – Quoted prices for identical assets or liabilities in active markets. • Level 2 – Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs derived principally from or corroborated by observable market data by correlation or other means. • Level 3 – Unobservable inputs for the asset or liability. The fair value input hierarchy level to which an asset or liability measurement falls in its entirety is determined based on the lowest level input that is significant to the measurement in its entirety. The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, for each fair value hierarchy level: Fair Value Measurements Using In thousands Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs Total March 31, 2021 Assets Derivative financial instruments $ — $ 1,350 $ — $ 1,350 Liabilities: Derivative financial instruments — (29,575) — (29,575) Total $ — $ (28,225) $ — $ (28,225) December 31, 2020 Assets: Derivative financial instruments $ — $ 2,098 $ — $ 2,098 Liabilities: Derivative financial instruments — (8,773) — (8,773) Total $ — $ (6,675) $ — $ (6,675) Assets and liabilities measured at fair value on a nonrecurring basis Non-recurring fair value measurements include certain non-financial assets and liabilities as may be acquired in a business combination and thereby measured at fair value; impaired oil and natural gas property assessments; warrants issued in debt or equity offerings and the initial recognition of asset retirement obligations for which fair value is used. These estimates are derived from historical costs as well as management’s expectation of future cost environments. As there is no corroborating market activity to support the assumptions used, the Company has designated these estimates as Level 3. Other fair value measurements The book values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of these instruments. The carrying value of debt approximates fair value since it is subject to a short-term floating interest rate that approximates the rate available to the Company. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued LiabilitiesAccrued liabilities consisted of the following as of the dates indicated: In thousands March 31, 2021 December 31, 2020 Bonus payable $ 1,294 $ 1,363 Accrued well costs 3,584 1,752 Third-party payments for joint interest expenditures 669 5,178 Accrued professional fees (success fees) — 4,710 Other 2,216 2,980 Total accrued liabilities $ 7,763 $ 15,983 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The following long-term debt obligations were outstanding as of the dates indicated: In thousands March 31, 2021 December 31, 2020 Senior Secured Credit Facility $ 209,600 $ 209,600 Second-Out Term Loan 50,000 55,000 Mortgage debt 8,654 8,712 PPP loan 2,157 2,157 Other 233 261 Total 270,644 275,730 Less unamortized discount (313) (402) Total, net of unamortized discount 270,331 275,328 Less current obligations (20,000) (20,000) Long-term debt $ 250,331 $ 255,328 Successor Senior Secured Credit Agreements On the Effective Date, the Successor, through its subsidiary Lonestar Resources America Inc., entered into a new first-out senior secured revolving credit facility with Citibank, N.A., as administrative agent, and the other lenders from time to time party thereto (the “Successor Credit Facility”) and a second-out senior secured term loan credit facility (the “Successor Term Loan Facility” and, together with the Successor Credit Facility, the “Successor Credit Agreements”) by amending and restating the Company’s existing credit agreement (as so amended and restated, the “Predecessor Credit Facility”). The Successor Credit Facility provides for revolving loans in an aggregate amount of up to $225 million, subject to borrowing base capacity. Letters of credit are available up to the lesser of (a) $2.5 million and (b) the aggregate unused amount of commitments under the Successor Credit Facility then in effect. On the Effective Date, Lonestar Resources America Inc. borrowed $60.0 million in term loans under the Successor Term Loan Facility. The Successor Credit Agreements will mature on November 30, 2023. The term loans under the Successor Term Loan Facility amortize on a quarterly basis in an amount equal to $5.0 million, payable on the last day of March, June, September and December of each year. The Successor’s obligations under the Successor Credit Agreements are guaranteed by all of the Successor’s direct and indirect subsidiaries (subject to certain permitted exceptions) and will be secured by a lien on substantially all of the Successor’s, Lonestar Resources America Inc.’s and the guarantors’ assets (subject to certain exceptions). Borrowings and letters of credit under the Successor Credit Facility are limited by borrowing base calculations set forth therein. The initial borrowing base is $225 million, subject to redetermination. The borrowing base will be redetermined semiannually on or around May 1 and November 1 of each year, with one interim “wildcard” redetermination available between scheduled redeterminations. The first wildcard redetermination occurred on February 1, 2021, which reaffirmed the initial borrowing base of $225 million. The Successor Credit Agreements contain customary covenants, including, but not limited to, restrictions on the Successor’s ability and that of its subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, or enter into transactions with affiliates. The Successor Credit Facility contains certain financial performance covenants including the following: •A Consolidated Total Debt to Consolidated EBITDAX covenant, with such ratio not to exceed 3.5 times; and •A requirement to maintain a current ratio (i.e., Consolidated Current Assets to Consolidated Current Liabilities) of at least 0.95 times for the three months ended December 31, 2020 and 1.0 times each fiscal quarter thereafter. The current ratio excludes current derivative assets and liabilities, as well as the current amounts due under the Successor Term Loan Facility, from the ratio. Borrowings under the Successor Credit Agreements bear interest at a floating rate at the Successor’s option, which can be either an adjusted Eurodollar rate (the Adjusted LIBOR, subject to a 1% floor) plus an applicable margin of 4.50% per annum or a base rate determined under the Successor Credit Facility (the “ABR”, subject to a 2% floor) plus an applicable margin of 3.50% per annum. The weighted average interest rate on borrowings under the Successor Credit Agreements was 5.5% for the three months ended March 31, 2021. The undrawn portion of the aggregate lender commitments under the Successor Credit Facility is subject to a commitment fee of 1.0%. As of March 31, 2021, the Successor was in compliance with all debt covenants under the Successor Credit Facilities. Predecessor Senior Secured Bank Credit Facility From July 2015 through November 30, 2020, the Predecessor maintained a senior secured revolving credit facility with Citibank, N.A., as administrative agent, and other lenders party thereto. All of the Predecessor Credit Facility was refinanced by the Successor Credit Agreements on the Effective Date. Extinguishment of Predecessor 11.25% Senior Notes |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Registration Rights Agreement On the Effective Date, the Successor entered into a registration rights agreement (the “Registration Rights Agreement”) with certain parties who received certain shares of New Common Stock on the Effective Date (the “Holders”). The Registration Rights Agreement provides resale registration rights for the Holders’ registrable securities of the Successor. Pursuant to the Registration Rights Agreement, Holders have customary underwritten offering and piggyback registration rights, subject to the limitations set forth in the Registration Rights Agreement. Under their underwritten offering registration rights, Holders have the right to demand the Successor to effectuate the distribution of any or all of its Registrable Securities by means of an underwritten offering pursuant to an effective registration statement; provided, however, that the expected gross offering price is equal to or greater than $50.0 million in the aggregate. The Successor is not obligated to effect an underwritten demand notice upon certain circumstances, including within 180 days of closing an underwritten offering. Under their piggyback registration rights, if at any time the Successor proposes to undertake a registered offering of New Common Stock for its own account, the Successor must give at least five These registration rights are subject to certain conditions and limitations, including the right of the underwriters to limit the number of shares to be included in an offering and the Successor’s right to delay or withdraw a registration statement under certain circumstances. The Successor will generally pay all registration expenses in connection with its obligations under the Registration Rights Agreement, regardless of whether a registration statement is filed or becomes effective. The registration rights granted in the Registration Rights Agreement are subject to customary indemnification and contribution provisions, as well as customary restrictions such as blackout periods and, if an underwritten offering is contemplated, limitations on the number of shares to be included in the underwritten offering that may be imposed by the managing underwriter. Warrant Agreements On the Effective Date, pursuant to the terms of the Plan, the Successor entered into a Tranche 1 Warrant Agreement (the “Tranche 1 Warrant Agreement”) and issued warrants (the “Tranche 1 Warrants”) to holders of Allowed Prepetition RBL Claims (as defined in the Plan) or their permitted designees, as applicable, to purchase up to an aggregate of 555,555 shares of common stock in the Successor, par value $0.001 (the “New Common Stock”), at an exercise price of $0.001 per share of New Common Stock, subject to adjustment. The Tranche 1 Warrants may only be exercised at any time after the equity value of the Successor, as calculated pursuant to the Tranche 1 Warrant Agreement, shall have been greater than $100 million (“Valuation Condition”) and expire on November 30, 2023 (the “Expiration Date”). On the Effective Date, pursuant to the terms of the Plan, the Company entered into a Tranche 2 Warrant Agreement (the “Tranche 2 Warrant Agreement” and, together with the Tranche 1 Warrant Agreement, the “Warrant Agreements”) and issued warrants (the “Tranche 2 Warrants” and, together with the Tranche 1 Warrants, the “Warrants”) to holders of Allowed Prepetition RBL Claims or their permitted designees, as applicable, to purchase up to an aggregate of 555,555 shares of the New Common Stock, at an exercise price of $0.001 per share of New Common Stock, subject to adjustment. The Tranche 2 Warrants may be exercised after the first anniversary of the issuance of the Successor Term Loan Facility if it shall not have been paid in full and if, after the first anniversary date, the Valuation Condition has been met. The Tranche 2 Warrants expire upon the Expiration Date. All warrants are considered freestanding equity-classified instruments due to their detachable and separately exercisable features. Accordingly, the warrants are presented as a component of Stockholders’ Equity in accordance with ASC 815-40-25. |
Related Party Activities
Related Party Activities | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Activities | Related Party Activities New Tech Global Ventures, LLC, and New Tech Global Environmental, LLC, companies in which a director of the Predecessor owns a limited partnership interest, have provided field engineering staff and consultancy services for the Company since 2013. The total cost for such services was approximately $0.5 million for the three months ended March 31, 2020 (Predecessor). On the Effective Date, the director resigned from the Company’s Board. In February 2019, the Predecessor purchased a property adjacent to its corporate office for approximately $2.0 million. The transaction was funded with cash from operations. The seller of the property is indebted to certain trusts established in favor of the children of one of the Predecessor’s directors, whom resigned on the Effective Date from the Company’s Board. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lonestar currently has one drilling rig under contract, which commenced on February 1, 2021. The contract provides for a drilling rate of $16,000 per day, and originally was set to expire 90 days after the commencement date. In April 2021, the contract term was extended to provide for drilling three additional wells, which will commence after the original termination date. From time to time, Lonestar is subject to legal proceedings and claims that arise in the ordinary course of business. Like other crude oil and gas producers and marketers, the Company’s operations are subject to extensive and rapidly changing federal and state environmental, health and safety, and other laws and regulations governing air emissions, wastewater discharges and solid and hazardous waste management activities. The Company is not aware of any pending or overtly threatened legal action against it that could have a material impact on its business. Gonzales County AMI In February 2020, the Predecessor announced that it had entered into a Joint Development Agreement (the “JDA”) in Gonzales County with one of the largest producers in the Eagle Ford which encompass an Area of Mutual Interest (the “AMI”) totaling approximately 15,000 acres. The agreement calls for Lonestar to operate a minimum of three to four Eagle Ford Shale wells annually on behalf of the two companies through 2022 that are intended to hold-by-production approximately 6,000 gross acres within the AMI. The agreement gives Lonestar’s partner the option to participate in each well with a 50% working interest or to participate via a carried working interest that ranges from approximately 9 to 17%, depending on location. The JDA continued to the Successor upon emergence from bankruptcy. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events 2021 Management Incentive Plan In connection with our emergence from bankruptcy, the Plan provided for the adoption of a management incentive plan. The Lonestar Resources US Inc. 2021 Management Incentive Plan (the “MIP”) became effective on April 13, 2021. The MIP reserved 966,184 shares of the Company’s common stock for awards to officers, other employees and directors. The MIP provides for, among other things, the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, dividend equivalents, other stock-based awards, cash awards, or any combination of the foregoing. On April 13, 2021 board of directors approved and ratified the MIP, with initial awards covering approximately 712,019 shares of common stock granted during April 2021. As of May 7, 2021, 254,164 thousand shares were available for future grants under the MIP, all of which could be issued in the form of restricted stock units. The Company’s incentive compensation program is administered by the Compensation Committee of our Board of Directors. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interim Financial Statements | Interim Financial Statements The accompanying unaudited condensed consolidated financial statements (“Unaudited Condensed Consolidated Financial Statements”) of Lonestar Resources US Inc., and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. These financial statements and the notes thereto should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020 filed on March 31, 2021, as supplemented by our amendment on Form 10-K/A filed with the SEC on April 30, 2021 (the “Form 10-K”). Unless indicated otherwise or the context requires, the terms “we,” “our,” “us,” “Company” or “Lonestar,” refer to Lonestar Resources US Inc. and its subsidiaries. The results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the year. In management’s opinion, the accompanying Unaudited Condensed Consolidated Financial Statements include all adjustments of a normal recurring nature necessary for a fair statement of our consolidated financial position as of March 31, 2021 and our consolidated results of operations for the three months ended March 31, 2021 and March 31, 2020. |
Reclassifications | Reclassifications Certain prior-period amounts have been reclassified to conform to the current period presentation. Such reclassifications had no impact on the Company’s reported total revenues, expenses, net loss, current assets, total assets, current liabilities, total liabilities or stockholders’ equity. |
Cash and Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted CashThe Company considers all highly-liquid investments to be cash equivalents if they have maturities of three months or less when purchased. |
Impairment Long-Lived Assets | Impairment of Long-Lived Assets The carrying value of long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When it is determined that the estimated future net cash flows of an asset will not be sufficient to recover its carrying amount, an impairment loss must be recorded to reduce the carrying amount to its estimated fair value. Judgments and assumptions are inherent in management’s estimate of undiscounted future cash flows and an asset’s fair value. These judgments and assumptions include such matters as the estimation of oil and gas reserve quantities, risks associated with the different categories of oil and gas reserves, the timing of development and production, expected future commodity prices, capital expenditures, production costs, and appropriate discount rates. The Company evaluates impairment of proved and unproved oil and gas properties on a region basis. On this basis, certain regions may be impaired because they are not expected to recover their entire carrying value from future net cash flows. As a result of this evaluation, the Predecessor recorded impairment of oil and gas properties of $199.9 million for the three months ended March 31, 2020, of which $199.0 million was proved and $0.9 million was unproved. The impairment was the result of removing development of proved undeveloped reserves (“PUDs”) and probable reserves from future net cash flows as the Predecessor could not assure that they would be developed going forward in light of continued depressed commodity prices and uncertainty regarding the Predecessor’s liquidity situation at the time. Upon emergence from bankruptcy, the Company adopted fresh start accounting which resulted in its long-lived assets being recorded at their estimated fair value at the Effective Date. There were no material changes to the key cash flow assumptions and no triggering events since December 31, 2020; therefore, no impairment was identified in the first quarter of 2021. |
Net Income (Loss) per Common Share | Net Loss per Common Share Prior to the Effective Date, the Predecessor company used the two-class method to compute earnings per common share as its Class A Participating Preferred Stock (the “Preferred Stock”) was considered a participating security. Under the two-class method, losses are allocated only to those securities that have a contractual obligation to share in the losses of the Company. The Preferred Stock was not obligated to absorb Company losses and accordingly was not allocated losses. Net income attributable to common stockholders is allocated between common stock and participating securities based on the weighted average number of common shares and participating securities outstanding for the period. Upon the Effective Date, the Preferred Stock was extinguished and the two-class method is no longer necessary to compute earnings per share for the Successor. Basic earnings per share is computed by dividing the allocated net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted earnings per share is computed similarly except that the denominator is increased to include dilutive potential common shares. Potential common shares for the Predecessor consisted of warrants, equity compensation awards and preferred stock, while potential common shares for the Successor consist of warrants. In certain circumstances adjustment to the numerator is also required for changes in income or loss resulting from the potential common shares. Basic weighted average common shares exclude shares of non-vested restricted stock. As these restricted shares vest, they will be included in the shares outstanding used to calculate basic earnings per share. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Income Taxes. In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The objective of ASU 2019-12 is to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and to provide more consistent application to improve the comparability of financial statements. The amendments in this ASU were effective starting January 1, 2021 for the Company. The adoption of the standard did not have an impact on the Company’s Unaudited Condensed Consolidated Financial Statements. Financial Instruments — Credit Losses. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, and requires the use of a new forward-looking expected loss model that will result in the earlier recognition of allowances for losses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022 for Smaller Reporting Companies, which the Company currently is classified as, and interim periods within those fiscal years, and early adoption is permitted. Entities must adopt the amendment using a modified retrospective approach to the first reporting period in which the guidance is effective. The adoption of ASU 2016-13 is currently not expected to have a material effect on the Company’s Unaudited Condensed Consolidated Financial Statements. Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions to ease financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) or another reference rate to alternative reference rates. The amendments in this ASU were effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. Currently, the Company’s Successor Credit Agreements (as defined below) are the Company’s only contracts that makes reference to a LIBOR rate and the agreements outline the specific procedures that will be undertaken once an appropriate alternative benchmark is identified. The Company does not expect this guidance to have a significant impact on its Unaudited Condensed Consolidated Financial Statements and related footnote disclosures. |
Fair Value Measurements | Fair Value Measurements Fair value measurements are based upon inputs that market participants use in pricing an asset or liability, which are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. Under Accounting Standards Codification (“ASC”), ASC 820 prioritizes the inputs used in measuring fair value into the following fair value hierarchy: • Level 1 – Quoted prices for identical assets or liabilities in active markets. • Level 2 – Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs derived principally from or corroborated by observable market data by correlation or other means. • Level 3 |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within the Unaudited Condensed Consolidated Balance Sheets to “Cash, cash equivalents and restricted cash at the end of the period” as reported within the Unaudited Condensed Consolidated Statements of Cash Flows: Successor Predecessor In thousands March 31, 2021 March 31, 2020 Cash and cash equivalents $ 19,494 $ 1,142 Restricted cash, current 2,157 — Total cash, cash equivalents and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows $ 21,651 $ 1,142 |
Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within the Unaudited Condensed Consolidated Balance Sheets to “Cash, cash equivalents and restricted cash at the end of the period” as reported within the Unaudited Condensed Consolidated Statements of Cash Flows: Successor Predecessor In thousands March 31, 2021 March 31, 2020 Cash and cash equivalents $ 19,494 $ 1,142 Restricted cash, current 2,157 — Total cash, cash equivalents and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows $ 21,651 $ 1,142 |
Schedule of Potentially Dilute Earnings Per Share in Future Were Excluded in the Computation of Diluted Net (Loss) Income Per Share as They Were Anti-dilutive | The following securities were excluded from the computation of diluted net loss per share, as their effect would have been antidilutive: Successor Predecessor Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Preferred stock — 16,725,467 Warrants 1,111,110 760,000 Stock appreciation rights — 1,010,000 Restricted stock units — 1,925,366 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Commodity Derivative Contracts | The following table summarizes Lonestar’s commodity derivative contracts as of March 31, 2021: Contract Volumes Weighted Commodity Type Period Range (1) (Bbls/Mcf per day) Average Price Oil - WTI Swaps Apr - Dec 2021 $42.20 - $58.00 6,061 $ 45.55 Oil - WTI Swaps Jan - Dec 2022 $44.83 - $51.44 3,123 47.11 Oil - WTI Swaps Jan - Dec 2023 $52.00 - $52.15 1,000 52.10 Natural Gas - Henry Hub Swaps Apr - Dec 2021 $2.86 - $3.05 14,691 2.98 Natural Gas - Henry Hub Swaps Jan - Dec 2022 $2.70 - $3.14 6,233 2.77 (1) Ranges presented for fixed-price swaps and basis swaps represent the lowest and highest fixed prices of all open contracts for the period presented. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | The following table summarizes our revenues by product type for the three months ended March 31, 2021 and 2020: In thousands Successor Predecessor Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Oil $ 27,872 $ 29,990 NGLs 4,297 2,599 Natural gas 7,647 4,420 Total revenues $ 39,816 $ 37,009 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, for each fair value hierarchy level: Fair Value Measurements Using In thousands Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs Total March 31, 2021 Assets Derivative financial instruments $ — $ 1,350 $ — $ 1,350 Liabilities: Derivative financial instruments — (29,575) — (29,575) Total $ — $ (28,225) $ — $ (28,225) December 31, 2020 Assets: Derivative financial instruments $ — $ 2,098 $ — $ 2,098 Liabilities: Derivative financial instruments — (8,773) — (8,773) Total $ — $ (6,675) $ — $ (6,675) |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following as of the dates indicated: In thousands March 31, 2021 December 31, 2020 Bonus payable $ 1,294 $ 1,363 Accrued well costs 3,584 1,752 Third-party payments for joint interest expenditures 669 5,178 Accrued professional fees (success fees) — 4,710 Other 2,216 2,980 Total accrued liabilities $ 7,763 $ 15,983 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Outstanding | The following long-term debt obligations were outstanding as of the dates indicated: In thousands March 31, 2021 December 31, 2020 Senior Secured Credit Facility $ 209,600 $ 209,600 Second-Out Term Loan 50,000 55,000 Mortgage debt 8,654 8,712 PPP loan 2,157 2,157 Other 233 261 Total 270,644 275,730 Less unamortized discount (313) (402) Total, net of unamortized discount 270,331 275,328 Less current obligations (20,000) (20,000) Long-term debt $ 250,331 $ 255,328 |
Basis of Presentation - Cash, C
Basis of Presentation - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 19,494 | $ 17,474 | $ 1,142 | |
Restricted cash | 2,157 | 8,972 | 0 | |
Total cash, cash equivalents and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows | $ 21,651 | $ 26,446 | $ 1,142 | $ 3,137 |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Impairment of oil and gas properties | $ 0 | $ 199,908 | |
Coronavirus Aid, Relief and Economic Security Act | Unsecured Debt | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Proceeds from sssuance of unsecured debt | $ 2,200 | ||
Debt instrument interest rate (as a percent) | 1.00% | ||
Proved oil And gas properties | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Impairment of oil and gas properties | 199,000 | ||
Unproved oil and gas properties | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Impairment of oil and gas properties | $ 900 |
Basis of Presentation - Schedul
Basis of Presentation - Schedule of Potentially Dilute Earnings Per Share in Future Were Excluded in the Computation of Diluted Net (Loss) Income Per Share as They Were Anti-dilutive (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 16,725,467 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,111,110 | 760,000 |
Stock appreciation rights | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 1,010,000 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 1,925,366 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Schedule of Commodity Derivative Contracts (Details) | 3 Months Ended |
Mar. 31, 2021$ / bbl$ / MMBTUbblMcf | |
Oil - WTI Swaps April - December 2021 | |
Derivative [Line Items] | |
Total volume | bbl | 6,061 |
Weighted average price - swap | 45.55 |
Weighted average price - floor | 42.20 |
Weighted average price - ceiling | 58 |
Oil - WTI Swaps January - December 2022 | |
Derivative [Line Items] | |
Total volume | bbl | 3,123 |
Weighted average price - swap | 47.11 |
Weighted average price - floor | 44.83 |
Weighted average price - ceiling | 51.44 |
Oil - WTI Swaps January - December 2023 | |
Derivative [Line Items] | |
Total volume | bbl | 1,000 |
Weighted average price - swap | 52.10 |
Weighted average price - floor | 52 |
Weighted average price - ceiling | 52.15 |
Natural Gas - Henry Hub Swaps April - December 2021 | |
Derivative [Line Items] | |
Total volume | bbl | 14,691 |
Weighted average price - swap | 2.98 |
Weighted average price - floor | 2.86 |
Weighted average price - ceiling | 3.05 |
Natural Gas - Henry Hub Swaps January - December 2022 | |
Derivative [Line Items] | |
Total volume | Mcf | 6,233 |
Weighted average price - swap | 2.77 |
Weighted average price - floor | $ / MMBTU | 2.70 |
Weighted average price - ceiling | $ / MMBTU | 3.14 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Additional Information (Details) | 1 Months Ended | |
Apr. 30, 2021bbl$ / bbl | Mar. 31, 2021deliveryobligation | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Number of open physical obligations | deliveryobligation | 0 | |
Oil W T I Swaps July through December Two Thousand Twenty One | Subsequent Event | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Total volume | 92,000 | |
Derivative, Nonmonetary Notional Amount, Volume Daily Rate | 500 | |
Derivative, Average Price Risk Option Strike Price | $ / bbl | 61.48 | |
Oil W T I Swaps January through June Two Thousand Twenty Three | Subsequent Event | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Total volume | 132,000 | |
Derivative, Nonmonetary Notional Amount, Volume Daily Rate | 362 | |
Derivative, Average Price Risk Option Strike Price | $ / bbl | 54.58 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Disaggregation of Revenue [Abstract] | ||
Oil, natural gas liquid and natural gas sales | $ 18,839 | $ 11,635 |
Revenue Recognition - Revenue b
Revenue Recognition - Revenue by product type (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue from External Customer [Line Items] | ||
Revenues | $ 39,816 | $ 37,009 |
Oil sales | ||
Revenue from External Customer [Line Items] | ||
Revenues | 27,872 | 29,990 |
Natural gas liquid sales | ||
Revenue from External Customer [Line Items] | ||
Revenues | 4,297 | 2,599 |
Natural gas sales | ||
Revenue from External Customer [Line Items] | ||
Revenues | $ 7,647 | $ 4,420 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ (28,225) | $ (6,675) |
Derivative financial instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,350 | 2,098 |
Derivative financial instruments | (29,575) | (8,773) |
Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Derivative financial instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | (28,225) | (6,675) |
Significant Other Observable Inputs (Level 2) | Derivative financial instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,350 | 2,098 |
Derivative financial instruments | (29,575) | (8,773) |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Derivative financial instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Derivative financial instruments | $ 0 | $ 0 |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Bonus payable | $ 1,294 | $ 1,363 |
Accrued well costs | 3,584 | 1,752 |
Third-party payments for joint interest expenditures | 669 | 5,178 |
Accrued professional fees (success fees) | 0 | 4,710 |
Other | 2,216 | 2,980 |
Total accrued liabilities | $ 7,763 | $ 15,983 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt Outstanding (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 270,644 | $ 275,730 |
Less unamortized discount | (313) | (402) |
Total, net of unamortized discount | 270,331 | 275,328 |
Less current obligations | (20,000) | (20,000) |
Long-term debt | 250,331 | 255,328 |
Mortgages Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | 8,654 | 8,712 |
Notes Payable, Other Payables | ||
Debt Instrument [Line Items] | ||
Long-term debt | 233 | 261 |
Senior Secured Credit Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt | 209,600 | 209,600 |
Senior Secured Term Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | 50,000 | 55,000 |
Coronavirus Aid, Relief and Economic Security Act | Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 2,157 | $ 2,157 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | Nov. 30, 2020USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Successor Senior Secured Credit Facility | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 5.50% | ||
Commitment fee percentage | 1.00% | ||
Successor Senior Secured Credit Facility | LIBOR | |||
Debt Instrument [Line Items] | |||
Variable rate floor | 1.00% | ||
Variable rate | 4.50% | ||
Successor Senior Secured Credit Facility | Base Rate | |||
Debt Instrument [Line Items] | |||
Variable rate floor | 2.00% | ||
Variable rate | 3.50% | ||
Second-Out Senior Secured Term Loan | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 60,000,000 | ||
Line of Credit | Successor Senior Secured Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 225,000,000 | ||
Periodic payment, principal | $ 5,000,000 | ||
Maximum total debt to consolidated EBITDA | 3.5 | ||
Minimum current ratio | 1 | 0.95 | |
Line of Credit | Successor Senior Secured Credit Facility | Letter of Credit | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 2,500,000 | ||
Senior Notes | 11.25% Senior Notes | |||
Debt Instrument [Line Items] | |||
Debt instrument interest rate (as a percent) | 11.25% |
Stockholders_ Equity - Addition
Stockholders’ Equity - Additional Information (Details) - USD ($) | Nov. 30, 2020 | Mar. 31, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||
Registration rights minimum offering price trigger | $ 50,000,000 | ||
Registration rights threshold period | 180 days | ||
Registration rights notice period | 5 years | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Tranche 1 Warrants | |||
Class of Stock [Line Items] | |||
Warrants outstanding (in shares) | 555,555 | ||
Warrants exercise price per share (in dollars per share) | $ 0.001 | ||
Warrants valuation condiation minimum equity value | $ 100,000,000 | ||
Series A Preferred Stock | |||
Class of Stock [Line Items] | |||
Shares issued, price per share (in dollars per share) | $ 555,555 | ||
Preferred stock, increase in dividend rate for next succeeding dividend period | 0.10% |
Related Party Activities - Addi
Related Party Activities - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
Feb. 28, 2019 | Mar. 31, 2020 | |
New Tech Global Ventures LLC | ||
Related Party Transaction [Line Items] | ||
Cost of goods and services sold | $ 0.5 | |
Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Payments to acquire land | $ 2 |
Contingencies and Commitments -
Contingencies and Commitments - Additional Information (Details) a in Thousands, $ in Thousands | Feb. 01, 2021USD ($)rig | Feb. 29, 2020a |
One Of Largest Producers In The Eagle Ford | ||
Loss Contingencies [Line Items] | ||
Oil and gas agreement, area of mutual interest | 15 | |
Oil and gas agreement, hold-by-production area | 6 | |
Oil and gas agreement, working interest | 50.00% | |
One Of Largest Producers In The Eagle Ford | Minimum | ||
Loss Contingencies [Line Items] | ||
Oil and gas agreement, carried working interest | 9.00% | |
One Of Largest Producers In The Eagle Ford | Maximum | ||
Loss Contingencies [Line Items] | ||
Oil and gas agreement, carried working interest | 17.00% | |
Significant Contract | ||
Loss Contingencies [Line Items] | ||
Number of drilling rights under contract | rig | 1 | |
Aggregate drilling rate | $ | $ 16 | |
Contract expiration period | 90 days |
Subsequent Events Additional In
Subsequent Events Additional Information (Details) - Subsequent Event - Management Incentive Plan - shares | 1 Months Ended | ||
Apr. 30, 2021 | May 07, 2021 | Apr. 13, 2021 | |
Subsequent Event [Line Items] | |||
Number of shares available for grant (in shares) | 966,184 | ||
Number of shares granted in period (in shares) | 712,019 | ||
Restricted Stock Units (RSUs) | |||
Subsequent Event [Line Items] | |||
Number of shares available for grant (in shares) | 254,164 |