Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 01, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | TALO | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NYSE | |
Entity Registrant Name | Talos Energy Inc. | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 001-38497 | |
Entity Tax Identification Number | 82-3532642 | |
Entity Address, Address Line One | 333 Clay Street | |
Entity Address, Address Line Two | Suite 3300 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77002 | |
City Area Code | 713 | |
Local Phone Number | 328-3000 | |
Entity Central Index Key | 0001724965 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 54,196,984 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 90,682 | $ 139,914 |
Restricted cash | 1,248 | |
Accounts receivable | ||
Trade, net | 108,354 | 103,025 |
Joint interest, net | 17,562 | 20,244 |
Other | 31,768 | 19,686 |
Assets from price risk management activities | 43,058 | 75,473 |
Prepaid assets | 39,378 | 38,911 |
Income tax receivable | 10,701 | |
Other current assets | 1,952 | 7,644 |
Total current assets | 332,754 | 416,846 |
Property and equipment: | ||
Proved properties | 4,012,100 | 3,629,430 |
Unproved properties, not subject to amortization | 178,174 | 108,209 |
Other property and equipment | 28,690 | 33,191 |
Total property and equipment | 4,218,964 | 3,770,830 |
Accumulated depreciation, depletion and amortization | (1,967,610) | (1,719,609) |
Total property and equipment, net | 2,251,354 | 2,051,221 |
Other long-term assets: | ||
Assets from price risk management activities | 7,820 | |
Other well equipment inventory | 9,251 | 9,224 |
Operating lease assets | 8,082 | |
Other assets | 2,624 | 2,695 |
Total assets | 2,611,885 | 2,479,986 |
Current liabilities: | ||
Accounts payable | 95,737 | 51,019 |
Accrued liabilities | 169,152 | 188,650 |
Accrued royalties | 37,763 | 38,520 |
Current portion of long-term debt | 443 | |
Current portion of asset retirement obligations | 63,404 | 68,965 |
Liabilities from price risk management activities | 3,832 | 550 |
Accrued interest payable | 21,058 | 10,200 |
Current portion of operating lease liabilities | 1,416 | |
Other current liabilities | 18,993 | 22,071 |
Total current liabilities | 411,355 | 380,418 |
Long-term liabilities: | ||
Long-term debt, net of discount and deferred financing costs | 697,192 | 654,861 |
Asset retirement obligations | 321,808 | 313,852 |
Liabilities from price risk management activities | 750 | |
Operating lease liabilities | 17,249 | |
Other long-term liabilities | 88,707 | 123,359 |
Total liabilities | 1,537,061 | 1,472,490 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 30,000,000 shares authorized; no shares issued or outstanding as of September 30, 2019 and December 31, 2018 | ||
Common stock $0.01 par value; 270,000,000 shares authorized; 54,196,145 and 54,155,768 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 542 | 542 |
Additional paid-in capital | 1,342,993 | 1,334,090 |
Accumulated deficit | (268,711) | (327,136) |
Total stockholders' equity | 1,074,824 | 1,007,496 |
Total liabilities and stockholders' equity | $ 2,611,885 | $ 2,479,986 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 30,000,000 | 30,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 270,000,000 | 270,000,000 |
Common stock, shares issued | 54,196,145 | 54,155,768 |
Common stock, shares outstanding | 54,196,145 | 54,155,768 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues and other: | ||||
Total revenue | $ 228,857 | $ 282,868 | $ 694,380 | $ 632,624 |
Operating expenses: | ||||
Workover and maintenance expense | 14,210 | 25,084 | 49,525 | 49,703 |
Depreciation, depletion and amortization | 88,125 | 87,808 | 248,518 | 204,574 |
Write-down of oil and natural gas properties | 1,417 | 13,778 | ||
Accretion expense | 7,316 | 10,162 | 26,868 | 24,414 |
General and administrative expense | 17,321 | 21,660 | 53,795 | 61,120 |
Total operating expenses | 175,974 | 191,507 | 528,256 | 453,468 |
Operating income | 52,883 | 91,361 | 166,124 | 179,156 |
Interest expense | (23,123) | (24,837) | (73,273) | (66,257) |
Price risk management activities income (expense) | 43,760 | (53,330) | (35,829) | (196,482) |
Other income (expense) | 567 | (85) | 1,831 | (1,163) |
Income (loss) before income taxes | 74,087 | 13,109 | 58,853 | (84,746) |
Income tax expense | (790) | (428) | ||
Net income (loss) | $ 73,297 | $ 13,109 | $ 58,425 | $ (84,746) |
Net income (loss) per common share: | ||||
Basic | $ 1.35 | $ 0.24 | $ 1.08 | $ (1.96) |
Diluted | $ 1.35 | $ 0.24 | $ 1.07 | $ (1.96) |
Weighted average common shares outstanding: | ||||
Basic | 54,200 | 54,156 | 54,178 | 43,329 |
Diluted | 54,430 | 54,164 | 54,364 | 43,329 |
Oil and Gas Properties | ||||
Operating expenses: | ||||
Direct lease operating expense | $ 43,439 | $ 42,090 | $ 122,243 | $ 101,065 |
Insurance | 4,167 | 4,125 | 12,462 | 11,059 |
Production taxes | (21) | 578 | 1,067 | 1,533 |
Total lease operating expense | 47,585 | 46,793 | 135,772 | 113,657 |
Oil Revenue | ||||
Revenues and other: | ||||
Revenue | 211,899 | 248,100 | 624,486 | 555,954 |
Natural Gas Revenue | ||||
Revenues and other: | ||||
Revenue | 12,545 | 20,193 | 41,738 | 49,364 |
NGL Revenue | ||||
Revenues and other: | ||||
Revenue | 3,384 | $ 14,575 | 15,095 | $ 27,306 |
Other | ||||
Revenues and other: | ||||
Revenue | $ 1,029 | $ 13,061 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Balance at Dec. 31, 2017 | $ (54,087) | $ 312 | $ 493,952 | $ (548,351) |
Balance, shares at Dec. 31, 2017 | 31,244,085 | |||
Cumulative effect adjustment | (325) | (325) | ||
Sponsor Debt Exchange | 102,000 | $ 29 | 101,971 | |
Sponsor Debt Exchange, Shares | 2,874,049 | |||
Stone Combination | 731,964 | $ 201 | 731,763 | |
Stone Combination, Shares | 20,037,634 | |||
Equity based compensation | 4,958 | 4,958 | ||
Net income (loss) | (84,746) | (84,746) | ||
Balance at Sep. 30, 2018 | 699,764 | $ 542 | 1,332,644 | (633,422) |
Balance, shares at Sep. 30, 2018 | 54,155,768 | |||
Balance at Jun. 30, 2018 | 685,845 | $ 542 | 1,331,834 | (646,531) |
Balance, shares at Jun. 30, 2018 | 54,155,768 | |||
Equity based compensation | 810 | 810 | ||
Net income (loss) | 13,109 | 13,109 | ||
Balance at Sep. 30, 2018 | 699,764 | $ 542 | 1,332,644 | (633,422) |
Balance, shares at Sep. 30, 2018 | 54,155,768 | |||
Balance at Dec. 31, 2018 | $ 1,007,496 | $ 542 | 1,334,090 | (327,136) |
Balance, shares at Dec. 31, 2018 | 54,155,768 | 54,155,768 | ||
Equity based compensation | $ 9,229 | 9,229 | ||
Equity based compensation, Shares | 52,574 | |||
Shares withheld for taxes on equity transactions | (326) | (326) | ||
Shares withheld for taxes on equity transactions, Shares | (12,197) | |||
Net income (loss) | 58,425 | 58,425 | ||
Balance at Sep. 30, 2019 | $ 1,074,824 | $ 542 | 1,342,993 | (268,711) |
Balance, shares at Sep. 30, 2019 | 54,196,145 | 54,196,145 | ||
Balance at Jun. 30, 2019 | $ 998,041 | $ 542 | 1,339,507 | (342,008) |
Balance, shares at Jun. 30, 2019 | 54,191,693 | |||
Equity based compensation | 3,529 | 3,529 | ||
Equity based compensation, Shares | 6,527 | |||
Shares withheld for taxes on equity transactions | (43) | (43) | ||
Shares withheld for taxes on equity transactions, Shares | (2,075) | |||
Net income (loss) | 73,297 | 73,297 | ||
Balance at Sep. 30, 2019 | $ 1,074,824 | $ 542 | $ 1,342,993 | $ (268,711) |
Balance, shares at Sep. 30, 2019 | 54,196,145 | 54,196,145 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 58,425 | $ (84,746) |
Adjustments to reconcile net loss to net cash provided by operating activities | ||
Depreciation, depletion, amortization and accretion expense | 275,386 | 228,988 |
Write-down of oil and natural gas properties | 13,778 | |
Amortization of deferred financing costs and original issue discount | 3,723 | 3,589 |
Equity based compensation, net of amounts capitalized | 5,164 | 2,129 |
Price risk management activities expense | 35,829 | 196,482 |
Net cash paid on settled derivative instruments | (7,202) | (94,802) |
Settlement of asset retirement obligations | (54,406) | (85,674) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (14,729) | (4,460) |
Other current assets | 11,384 | (14,524) |
Accounts payable | 32,541 | (54,029) |
Other current liabilities | (26,753) | 40,410 |
Other non-current assets and liabilities, net | (727) | 10,324 |
Net cash provided by operating activities | 332,413 | 143,687 |
Cash flows from investing activities: | ||
Exploration, development and other capital expenditures | (372,920) | (174,349) |
Cash (paid for) acquired in acquisitions | (32,916) | 278,409 |
Proceeds from sale of other property and equipment | 5,369 | |
Net cash provided by (used in) investing activities | (400,467) | 104,060 |
Cash flows from financing activities: | ||
Redemption of Senior Notes and other long-term debt | (10,567) | (25,151) |
Proceeds from Bank Credit Facility | 75,000 | 319,000 |
Repayment of Bank Credit Facility | (25,000) | (54,000) |
Deferred financing costs | (1,268) | (16,990) |
Other deferred payments | (9,921) | |
Payments of finance lease | (10,344) | (9,874) |
Employee stock transactions | (326) | |
Net cash provided by (used in) financing activities | 17,574 | (190,015) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (50,480) | 57,732 |
Cash, cash equivalents and restricted cash: | ||
Balance, beginning of period | 141,162 | 33,433 |
Balance, end of period | 90,682 | 91,165 |
Supplemental Non-Cash Transactions: | ||
Capital expenditures included in accounts payable and accrued liabilities | 24,622 | 36,775 |
Supplemental Cash Flow Information: | ||
Interest paid, net of amounts capitalized | $ 36,011 | 27,307 |
LLC Bank Credit Facility | ||
Cash flows from financing activities: | ||
Repayment of Bank Credit Facility | $ (403,000) |
Formation and Basis of Presenta
Formation and Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Formation and Basis of Presentation | Note 1 — Formation and Basis of Presentation Formation and Nature of Business Talos Energy Inc. (“Talos,” the “Company,” “we,” “us” or “our”) is a technically driven independent exploration and production company focused on safely and efficiently maximizing cash flows and long-term value through our operations in the United States (“U.S.”) Gulf of Mexico and offshore Mexico. As one of the largest public independent producers in the U.S. Gulf of Mexico, we leverage decades of geology, geophysics and offshore operational expertise in acquisition, exploration, exploitation and development of deep and shallow water assets in key geological trends that are present in many offshore basins around the world. Our activities offshore Mexico provide high impact exploration opportunities in an oil rich emerging basin. Talos was formed in connection with the business combination between Talos Energy LLC and Stone Energy Corporation (“Stone”) that occurred on May 10, 2018, pursuant to which Talos Energy LLC and Stone became indirect wholly-owned subsidiaries of Talos Energy Inc. Talos Energy LLC Talos Energy LLC was formed in 2011 and commenced commercial operations on February 6, 2013. Prior to February 6, 2013, Talos Energy LLC incurred certain general and administrative expenses associated with the start-up of its operations. On February 3, 2012, Talos Energy LLC completed a transaction with certain funds and other alternative investment vehicles managed by Apollo Management VII, L.P. and Apollo Commodities Management, L.P., with respect to Series I (“Apollo Funds”), and entities controlled by or affiliated with Riverstone Energy Partners V, L.P. (“Riverstone Funds”) and members of management pursuant to which Talos Energy LLC received a private equity capital commitment. Stone Combination On May 10, 2018 (the “Closing Date”), the Company consummated the transactions contemplated by that certain Transaction Agreement dated as of November 21, 2017 (the “Transaction Agreement”), pursuant to which, among other items, each of Stone, Talos Production LLC and Talos Energy LLC became wholly-owned subsidiaries of the Company (the “Stone Combination”). Concurrently with the consummation of the Transaction Agreement, the Company consummated the transactions contemplated by that certain Exchange Agreement, dated as of November 21, 2017 (the “Exchange Agreement”) pursuant to which (i) the Apollo Funds and Riverstone Funds contributed $102.0 million in aggregate principal amount of 9.75% Senior Notes due 2022 issued by Talos Production LLC and Talos Production Finance, Inc. (together, “Talos Issuers”) to the Company in exchange for an aggregate of 2,874,049 shares of Talos common stock; (ii) the holders of second lien bridge loans (“11.00% Bridge Loans”) exchanged such 11.00% Bridge Loans for $172.0 million aggregate principal amount of 11.00% Second-Priority Senior Secured Notes due 2022 of the Talos Issuers (“11.00% Senior Secured Notes”) and (iii) certain holders of 7.50% Senior Secured Notes due 2022 issued by Stone (“7.50% Stone Senior Notes”) exchanged such notes for $137.4 million aggregate principal amount of 11.00% Senior Secured Notes. Prior to the Closing Date, the Company did not conduct any material activities other than those incident to its formation and the matters contemplated by the Transaction Agreement. See Note 2 – Acquisitions Substantially concurrently therewith, the Company consummated an exchange offer and consent solicitation, pursuant to which other holders of the 7.50% Stone Senior Notes exchanged their 7.50% Stone Senior Notes for 11.00% Senior Secured Notes and a cash payment. Approximately $81.5 million in aggregate principal amount of the 7.50% Stone Senior Notes were validly tendered, and approximately $6.1 million in aggregate principal amount of 7.50% Stone Senior Notes remained outstanding as of the Closing Date. Basis of Presentation and Consolidation The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, certain information and disclosures normally included in complete financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, these financial statements include all adjustments, which unless otherwise disclosed, are of a normal recurring nature, necessary for a fair presentation of the financial position, results of operations, cash flows and changes in equity for the periods presented. The results for interim periods are not necessarily indicative of results for the entire year. The Company has evaluated subsequent events through the date the condensed consolidated financial statements were issued. The unaudited financial statements and related notes included in this Quarterly Report on Form 10-Q (this “Quarterly Report”) should be read in conjunction with the Company’s audited Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (our “2018 Annual Report”). Talos Energy LLC was considered the accounting acquirer in the Stone Combination under GAAP. Accordingly, the historical financial and operating data of Talos Energy Inc., which covers periods prior to the Closing Date, reflects the assets, liabilities and results of operations of Talos Energy LLC and does not reflect the assets, liabilities and results of operations of Stone. For the periods prior to May 10, 2018, the Company retrospectively adjusted its Statements of Changes in Stockholders’ Equity and the weighted average shares used in determining earnings per share to reflect the number of shares Talos Energy LLC received in the Stone Combination. Beginning on May 10, 2018, common stock is presented to reflect the legal capital of Talos Energy Inc. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, the reported amounts of revenues and expenses during the reporting periods and the reported amounts of proved oil and natural gas reserves. Actual results could differ from those estimates. The Company has one reportable segment, exploration and production of oil and natural gas. Substantially all of the Company’s proved reserves and production sales are related to the Company’s operations in the U.S. Unless otherwise indicated or the context otherwise requires, references in this Quarterly Report to “Talos,” the “Company,” “we,” “us” or “our” refer to Talos Energy Inc. and its wholly-owned subsidiaries. Recently Adopted Accounting Standards Leases. In February 2016, the Financial Accounting Standards Board issued Accounting Standards Codification 2016-02, Leases (“Topic 842”) requiring an entity to recognize a right-of-use asset representing the right to use an underlying asset for the lease term and a lease liability representing the obligation associated with future lease payments for virtually all leases. The pattern of expense recognition in the income statement is dependent on lease classification as finance or operating. A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment (an identified asset) for a period of time in exchange for consideration. However, Topic 842 does not apply to leases of mineral rights. On January 1, 2019, the Company adopted Topic 842, using the modified retrospective approach, which does not require an adjustment to comparative-period financial statements. As such, results for reporting periods beginning January 1, 2019 are presented in accordance with Topic 842, while prior period amounts are reported in accordance with previous lease accounting treatment. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other items, allowed Talos not to reassess whether expired or existing contracts, including land easements, contain a lease or reassess the classification and indirect costs associated with existing or expired leases. On the January 1, 2019 adoption date, the Company recorded a right-of-use asset of approximately $7.3 million and corresponding lease liability of $16.9 million representing the present value of its future operating lease payments. Upon the adoption of Topic 842, lease incentives are presented as a reduction to the right-of-use asset resulting in the difference between the right-of-use asset and lease liability. Adoption of this standard did not require an adjustment to retained earnings and did not impact the condensed consolidated statements of operations, condensed consolidated statements of cash flows or condensed consolidated statements of changes in stockholders’ equity. See Note 4 – Leases |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Note 2 — Acquisitions Asset Acquisitions Each of the acquisitions below qualified as an asset acquisition that requires, among other items, that the cost of the assets acquired and liabilities assumed be recognized on the balance sheet by allocating the asset cost on a relative fair value basis. The fair value measurements of the oil and natural gas properties acquired and asset retirement obligations assumed were derived utilizing an income approach and based, in part, on significant inputs not observable in the market. These inputs represent Level 3 measurements in the fair value hierarchy and include, but are not limited to, estimates of reserves, future operating and development costs, future commodity prices, estimated future cash flows and appropriate discount rates. These inputs required significant judgments and estimates by the Company’s management at the time of the valuation. Transaction costs incurred on an asset acquisition are capitalized as a component of the assets acquired and any contingent consideration is recognized as the contingency is resolved. Acquisition of Gunflint Field On January 11, 2019, the Company completed the acquisition of an approximate 9.6% non-operated working interest in the Gunflint Field located in the Mississippi Canyon area (the “Gunflint Acquisition”) from Samson Offshore Mapleleaf, LLC for $29.6 million ($27.9 million after customary purchase price adjustments). The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed, based on their relative fair values, on January 11, 2019 (in thousands): Property and equipment $ 28,912 Asset retirement obligations (996 ) Allocated purchase price $ 27,916 Acquisition of Whistler Energy II, LLC On August 31, 2018, the Company completed the acquisition of all the issued and outstanding membership interests of Whistler Energy II, LLC (“Whistler”) from Whistler Energy II Holdco, LLC, an affiliate of Apollo Funds (the “Whistler Acquisition”), for $52.6 million ($14.8 million, net of $37.8 million of cash acquired). The $37.8 million of cash acquired consists of $30.8 million of cash collateral posted by Whistler and released by third party surety companies at closing and $7.0 million of cash on hand for working capital purposes. Through the acquisition, the Company acquired and assumed all of Whistler’s oil and natural gas assets and the associated asset retirement obligations for interests located in Green Canyon Block 18, Green Canyon Block 60 and Ewing Bank Blocks 944 and 988, including a fixed production platform on Green Canyon Block 18. The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed, based on their relative fair values, on August 31, 2018 (in thousands): Current assets (1) $ 45,337 Property and equipment 35,344 Other long-term assets 66 Current liabilities (4,261 ) Other long-term liabilities (23,862 ) Allocated purchase price $ 52,624 (1) Business Combinations Acquisitions qualifying as a business combination are accounted for under the acquisition method of accounting, which requires, among other items, that assets acquired and liabilities assumed be recognized on the condensed consolidated balance sheet at their fair values as of the acquisition date. The fair value measurements of the oil and natural gas properties acquired and asset retirement obligations assumed were derived utilizing an income approach and based, in part, on significant inputs not observable in the market. These inputs represent Level 3 measurements in the fair value hierarchy and include, but are not limited to, estimates of reserves, future operating and development costs, future commodity prices, estimated future cash flows and appropriate discount rates. These inputs required significant judgments and estimates at the time of the valuation. Combination between Talos Energy LLC and Stone Energy Corporation On May 10, 2018, the Company consummated the transactions contemplated by the Transaction Agreement and the Exchange Agreement, pursuant to which, among other things, Talos Energy LLC and Stone became wholly-owned subsidiaries of the Company. The combination was executed as an all-stock transaction whereby the former stakeholders of Talos Energy LLC held approximately 63% of the Company’s outstanding common stock and the former stockholders of Stone held approximately 37% of the Company’s outstanding common stock as of the Closing Date. The purchase price of $732.0 million is based on the closing price of Stone common stock and common warrants immediately prior to closing. The following table summarizes the purchase price (in thousands, except per share data): Stone common stock - issued and outstanding as of May 9, 2018 20,038 Stone common stock price $ 35.49 Common stock value $ 711,149 Stone common stock warrants - issued and outstanding as of May 9, 2018 3,528 Stone common stock warrants price $ 5.90 Common stock warrants value $ 20,815 Total purchase price $ 731,964 The following table presents the final allocation of the purchase price to the assets acquired and liabilities assumed, based on their fair values on May 10, 2018 (in thousands): Current assets (1) $ 372,963 Property and equipment 886,406 Other long-term assets 19,494 Current liabilities (132,846 ) Long-term debt (235,416 ) Other long-term liabilities (178,637 ) Allocated purchase price $ 731,964 (1) The following table presents revenue and net income attributable to the assets acquired in the Stone Combination for the three and nine months ended September 30, 2019 and 2018: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Revenue $ 97,213 $ 134,989 $ 313,335 $ 204,298 Net income $ 40,775 $ 75,968 $ 147,186 $ 120,390 Pro Forma Financial Information (Unaudited) The following supplemental pro forma information (in thousands, except per common share amounts), presents the condensed consolidated statements of operations for the three and nine months ended September 30, 2018 as if the Stone Combination had occurred on January 1, 2018. The unaudited pro forma information was derived from historical combined statements of operations of the Company and Stone and adjusted to include (i) depletion and accretion expense applied to the adjusted basis of the oil and natural gas properties acquired, (ii) interest expense to reflect the debt transactions contemplated by the Exchange Agreement and (iii) general and administrative expense adjusted for transaction related costs incurred. This information does not purport to be indicative of results of operations that would have occurred had the Stone Combination occurred on January 1, 2018, nor is such information indicative of any expected future results of operations. Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Revenue $ 282,868 $ 754,520 Net income (loss) $ 20,566 $ (30,645 ) Basic net income (loss) per common share $ 0.38 $ (0.71 ) Diluted net income (loss) per common share $ 0.38 $ (0.71 ) |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Oil And Gas Property [Abstract] | |
Property, Plant and Equipment | Note 3 — Property, Plant and Equipment Proved Properties. The Company’s interests in proved oil and natural gas properties are located in the U.S., primarily in the Gulf of Mexico deep and shallow waters. The Company follows the full cost method of accounting for its oil and natural gas exploration and development activities. At September 30, 2019, the Company’s ceiling test computation of its U.S. oil and natural gas properties was based on SEC pricing of $63.88 per Bbl of oil, $2.81 per Mcf of natural gas and $24.26 per Bbl of NGLs. During the three and nine months ended September 30, 2019 and 2018, the Company’s ceiling test computation did not result in a write-down of its U.S. oil and natural gas properties. Unproved Properties. Unproved capitalized costs of oil and natural gas properties excluded from amortization relate to unevaluated properties associated with acquisitions, leases awarded in the U.S. Gulf of Mexico federal lease sales, certain geological and geophysical costs, costs associated with certain exploratory wells in progress and capitalized interest. Unproved properties also include costs associated with the two blocks (Block 2 and Block 7) awarded on September 4, 2015 to the Company together with Sierra Oil & Gas S. de R.L de C.V. (“Sierra”) and Premier Oil Plc (“Premier” and collectively, the “Consortium”), located in the shallow waters off the coast of Mexico’s Veracruz and Tabasco states, by the National Hydrocarbons Commission (“CNH”), Mexico’s upstream regulator. On September 4, 2019, the CNH granted a two-year extension under the Consortium’s production sharing contract for Block 7. During any period in which unproved properties are assessed as proved or impaired, the associated costs are transferred to the full cost pool and are subject to amortization. In September 2018, the Company entered into a transaction (the “Hokchi Cross Assignment”) with Hokchi Energy, S.A. de C.V. (“Hokchi”), a subsidiary of Pan American Energy LLC (“PAE”), to cross assign 25% participation interests (“PI”) in each of Block 2 and Block 31. The Company’s assignment of a 25% PI in Block 2 to Hokchi closed on December 21, 2018, and Hokchi’s assignment to the Company closed on May 22, 2019. In addition, Premier exercised its option to reduce its PI in Block 2 to zero and assigned a 5% PI to each of Sierra and Talos. Following the completion of the Hokchi Cross Assignment, Talos owns a 25% PI in each of Block 2 and Block 31, and Hokchi is the operator of the blocks. As a result of the Company’s evaluation of unproved property located in Block 2 offshore Mexico, specifically future exploratory drilling opportunities, results from exploratory wells drilled and the Block 2 production sharing contract’s expiration date, the Company recorded a $1.4 million and $13.8 million non-cash impairment expense for the three and nine months ended September 30, 2019, respectively, presented as “Write-down of oil and natural gas properties” on the condensed consolidated statements of operations. Capitalized Overhead. General and administrative expense in the Company’s financial statements is reflected net of capitalized overhead. The Company capitalizes overhead costs directly related to exploration, acquisition and development activities. Capitalized overhead for the three and nine months ended September 30, 2019 was $7.4 million and $21.4 million, respectively. Capitalized overhead for the three and nine months ended September 30, 2018 was $8.7 million and $16.2 million, respectively. Asset Retirement Obligations. The discounted asset retirement obligations included “Current portion of asset retirement obligations” and “Asset retirement obligations” on the condensed consolidated balance sheets and the changes to that liability during the nine months ended September 30, 2019 were as follows (in thousands): Asset retirement obligations at December 31, 2018 $ 382,817 Fair value of asset retirement obligations assumed 5,047 Obligations settled (54,406 ) Fair value of asset retirement obligations divested (5,450 ) Accretion expense 26,868 Obligations incurred 4,111 Changes in estimate 26,225 Asset retirement obligations at September 30, 2019 $ 385,212 Less: Current portion 63,404 Long-term portion $ 321,808 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Note 4 — Leases The Company enters into service contracts and other contractual arrangements for the use of office space, drilling, completion and abandonment equipment (e.g., drilling rigs), production related equipment (e.g., compressors) and other equipment from third-party lessors to support its operations. The Company’s leasing activities as a lessor are negligible. At inception, contracts are reviewed to determine whether the agreement contains a lease. Contracts are considered a lease when the arrangement either explicitly or implicitly conveys the right to control the use of the identified property, plant or equipment for a period of time in exchange for consideration. In order to obtain control, the lessee must obtain substantially all of the economic benefits for the use of the identified asset and have the right to direct the use of the identified asset. To the extent an arrangement is determined to include a lease, it is classified as either an operating or a finance lease, which dictates the pattern of expense recognition in the income statement. The Company has elected to not apply the recognition requirements of Topic 842 to leases with durations of twelve months or less (i.e. short-term). Upon commencement of a lease, a right-of-use asset and corresponding lease liability are recorded on the consolidated balance sheet for all leases, regardless of classification. The right-of-use asset is initially measured as the lease liability adjusted for any payments made prior to commencement, including any initial direct costs incurred and incentives received. Lease liabilities are initially measured at the present value of future minimum lease payments, excluding variable lease payments, over the lease term. Variable lease payments include changes in index rates, mobilization and demobilization costs related to oil and natural gas equipment and certain reimbursable costs associated with office and building leases that are recognized when incurred. The discount rate used to determine present value is the rate implicit in the lease unless the rate cannot be determined, in which case the incremental borrowing rate is used. The incremental borrowing rate reflects the estimated rate of interest the Company would pay to borrow over a similar term an amount equal to the lease payments on a collateralized basis in a similar economic environment. The Company has elected to account for lease and non-lease components in its contracts as a single lease component for all asset classes. Lease agreements may include options to renew the lease, terminate the lease or purchase the underlying asset. The Company determines the lease term at lease commencement date as the non-cancelable period of the lease, including options to extend or terminate the lease when such an option is reasonably certain to be exercised. Factors used to assess reasonable certainty of rights to extend or terminate a lease include current and forecasted drillings plans, anticipated changes in development strategies, historical practice in extending similar contracts and current market conditions. On August 2, 2016, the Company executed a seven-year lease agreement for the use of the Helix Producer 1 (“HP-I”), a dynamically positioned floating production facility that interconnects with the Phoenix Field through a production buoy. Under the terms of the agreement, the Company agreed to pay a $49.0 million annual fixed demand charge for each of the first two years and $45.0 million for each of the five years thereafter. Prior to implementation, the HP-I lease was accounted for as a capital lease under previous lease accounting treatments. The Company initially recorded a capital lease asset and liability of $124.3 million on its consolidated balance sheet at lease inception. As the HP-I is utilized in the Company’s oil and natural gas development activities, the capital lease asset was included within proved property and depleted as part of the full cost pool. As of December 31, 2018, the balance of the capital lease obligation on the consolidated balance sheet was $93.6 million, of which $14.1 million is included in other current liabilities and $79.5 million is included in other long-term liabilities. Upon adoption of Topic 842, the HP-I capital lease was classified as a finance lease resulting in no change to the amounts recognized on the condensed consolidated balance sheet. The Company has operating leases expiring at various dates, principally for office space, drilling rigs, compressors and other equipment necessary to support the Company’s operations. Operating leases are reflected as operating lease assets, current portion of operating lease liabilities and operating lease liabilities on the condensed consolidated balance sheet. The Company’s operating lease liabilities recognized on the balance sheet as of September 30, 2019 was $18.7 million. Costs associated with the Company’s operating leases are either expensed or capitalized depending on how the underlying asset is utilized. Presented below are disclosures required by Topic 842. The amounts disclosed herein primarily represent costs associated with properties operated by the Company that are presented on a gross basis and do not reflect the Company’s net proportionate share of such amounts. A portion of these costs have been or will be billed to other working interest owners. The Company’s share of these costs is included in property and equipment, lease operating expense or general and administrative expense, as applicable. The components of lease costs were as follows (in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Finance lease cost - interest on lease liabilities (1) $ 4,728 $ 14,589 Operating lease cost, excluding short-term leases (2) 822 2,348 Short-term lease cost (3) 17,658 81,897 Variable lease cost (4) 3 8 Total lease cost $ 23,211 $ 98,842 (1) The HP-I is utilized in the Company’s oil and natural gas development activities and the right-of-use asset was capitalized and included in proved property and depleted as part of the full cost pool. Once items are included in the full cost pool, they are indistinguishable from other proved properties. The capitalized costs within the full cost pool are amortized over the life of the total proved reserved using the unit-of-production method, computed quarterly. (2) Operating lease cost reflect a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. (3) Short-term lease costs are reported at gross amounts and primarily represent costs incurred for drilling rigs, most of which are short-term contracts not recognized as a right-of-use asset and lease liability on the balance sheet. (4) Variable lease costs primarily represent differences between minimum payment obligations and actual operating charges incurred by the Company related to its long-term leases. The present value of the fixed lease payments recorded as the Company’s right-of-use asset and liability, adjusted for initial direct costs and incentives are as follows (in thousands): September 30, 2019 Operating leases: Operating lease assets $ 8,082 Current portion of operating leases $ 1,416 Operating lease liabilities 17,249 Total operating lease liabilities $ 18,665 Finance leases: Proved property (1) $ 124,299 Other current liabilities $ 16,578 Other long-term liabilities 66,746 Total finance lease liabilities $ 83,324 (1) The HP-I is utilized in the Company’s oil and natural gas development activities and the right-of-use asset was capitalized and included in proved property and depleted as part of the full cost pool. Once items are included in the full cost pool, they are indistinguishable from other proved properties. The capitalized costs within the full cost pool are amortized over the life of the total proved reserves using the unit-of-production method, computed quarterly. Minimum future commitments by year for the Company’s leases as of September 30, 2019 are presented in the table below (in thousands). Such commitments are reflected at undiscounted values and are reconciled to the discounted present value recognized on the balance sheet. Operating Leases Finance Leases 2019 (excluding the nine months ended September 30, 2019) $ 453 $ 8,314 2020 2,746 33,257 2021 4,079 33,257 2022 4,302 33,257 2023 4,237 13,858 Thereafter 19,105 — Total lease payments $ 34,922 $ 121,943 Imputed interest (16,257 ) (38,619 ) Total $ 18,665 $ 83,324 September 30, 2019 Weighted average remaining lease term: Operating leases 9 years Finance leases 4 years Weighted average discount rate: Operating leases 10.2 % Finance leases 21.9 % The table below presents the supplemental cash flow information related to leases for the nine months ended September 30, 2019 (in thousands): Operating cash outflow from finance leases $ 14,589 Financing cash outflow from finance leases $ 10,344 Operating cash outflow from operating leases $ 1,358 Right-of-use assets obtained in exchange for new finance lease liabilities $ — Right-of-use assets obtained in exchange for new operating lease liabilities $ 2,225 |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Financial Instruments [Abstract] | |
Financial Instruments | Note 5 — Financial Instruments The following table presents the carrying amounts and estimated fair values of financial instruments (in thousands): September 30, 2019 December 31, 2018 Carrying Amount Fair Value Carrying Amount Fair Value 11.00% Second-Priority Senior Secured Notes – due April 2022 (1) $ 383,186 $ 398,685 $ 381,229 $ 362,168 7.50% Senior Secured Notes – due May 2022 $ 6,060 $ 5,272 $ 6,060 $ 5,151 Bank Credit Facility – due May 2022 (1) $ 307,946 $ 315,000 $ 257,448 $ 265,000 Oil and Natural Gas Derivatives $ 46,296 $ 46,296 $ 74,923 $ 74,923 (1) As of September 30, 2019 and December 31, 2018, the carrying amounts of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate their fair values due to the short-term nature of these instruments. 11.00% Second-Priority Senior Secured Notes – due April 2022. The $390.9 million aggregate principal amount of 11.00% Senior Secured Notes are reported on the condensed consolidated balance sheet as of September 30, 2019 at their carrying value, net of original issue discount and deferred financing costs (see Note 6 – Debt ). The fair value of the 11.00% Senior Secured Notes are estimated (representing a Level 1 fair value measurement) using quoted secondary market trading prices. 7.50% Senior Secured Notes – due May 2022 . The $6.1 million aggregate principal amount of 7.50% Stone Senior Notes are reported on the condensed consolidated balance sheet as of September 30, 2019 at their carrying value (see Note 6 – Debt ). The fair value of the 7.50% Stone Senior Notes are estimated (representing a Level 1 fair value measurement) using quoted secondary market trading prices. Bank Credit Facility – due May 2022 . In May 2018, in conjunction with the Stone Combination, the Company and Talos Production LLC, our wholly-owned subsidiary, executed a new bank credit facility with an initial borrowing base of $600.0 million (the “Bank Credit Facility”) which is reported on the condensed consolidated balance sheet as of September 30, 2019 at its carrying value net of deferred financing costs (see Note 6 – Debt ). The fair value of the Bank Credit Facility is estimated based on the outstanding borrowings under the Bank Credit Facility since it is secured by the Company’s reserves and the interest rates are variable and reflective of market rates (representing a Level 2 fair value measurement). Oil and natural gas derivatives . The Company attempts to mitigate a portion of its commodity price risk and stabilize cash flows associated with sales of oil and natural gas production through the use of oil and natural gas swaps and costless collars. Swaps are contracts where the Company either receives or pays depending on whether the oil or natural gas floating market price is above or below the contracted fixed price. Costless collars consist of a purchased put option and a sold call option with no net premiums paid to or received from counterparties. Collar contracts typically require payments by the Company if the NYMEX average closing price is above the ceiling price or payments to the Company if the NYMEX average closing price is below the floor price. The Company has elected not to designate any of its derivative contracts for hedge accounting. Accordingly, commodity derivatives are recorded on the condensed consolidated balance sheets at fair value with settlements of such contracts, and changes in the unrealized fair value, recorded as “Price risk management activities income (expense)” on the condensed consolidated statements of operations in each period. The following table presents the impact that derivatives, not qualifying as hedging instruments, had on the Company’s condensed consolidated statements of operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net cash received (paid) on settled derivative instruments $ 5,360 $ (40,746 ) $ (7,202 ) $ (94,802 ) Unrealized gain (loss) 38,400 (12,584 ) (28,627 ) (101,680 ) Price risk management activities income (expense) $ 43,760 $ (53,330 ) $ (35,829 ) $ (196,482 ) The following table reflects the contracted volumes and weighted average prices the Company will receive under its derivative contracts as of September 30, 2019: Production Period Instrument Type Average Daily Volumes Weighted Average Swap Price Weighted Average Put Price Weighted Average Call Price Crude Oil – WTI: (Bbls) (per Bbl) (per Bbl) (per Bbl) Oct 2019 - Dec 2019 Swap 29,468 $ 56.04 $ — $ — Jan 2020 - Dec 2020 Swap 13,492 $ 56.13 $ — $ — Jan 2020 - Dec 2020 Costless collars 7,481 $ — $ 55.00 $ 64.23 Natural Gas – Henry Hub NYMEX: (MMBtu) (per MMBtu) (per MMBtu) (per MMBtu) Oct 2019 - Dec 2019 Swap 37,475 $ 2.92 $ — $ — Jan 2020 - Dec 2020 Swap 16,216 $ 2.78 $ — $ — The Company’s commodity derivative instruments are measured at fair value based on third-party industry-standard models using various inputs substantially observable in active markets, including forward oil and natural gas price curves, and are therefore classified as Level 2 in the required fair value hierarchy for the periods presented. The following tables provide additional information related to financial instruments measured at fair value on a recurring basis (in thousands): September 30, 2019 Level 1 Level 2 Level 3 Total Assets: Oil and natural gas derivatives $ — $ 50,878 $ — $ 50,878 Liabilities: Oil and natural gas derivatives — (4,582 ) — (4,582 ) Total net asset $ — $ 46,296 $ — $ 46,296 December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Oil and natural gas derivatives $ — $ 75,473 $ — $ 75,473 Liabilities: Oil and natural gas derivatives — (550 ) — (550 ) Total net asset $ — $ 74,923 $ — $ 74,923 Financial Statement Presentation . Derivatives are classified as either current or non-current assets or liabilities based on their anticipated settlement dates. Although the Company has master netting arrangements with its counterparties, the Company presents its derivative financial instruments on a gross basis on its condensed consolidated balance sheets. The following table presents the fair value of derivative financial instruments at September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Assets Liabilities Assets Liabilities Oil and natural gas derivatives: Current $ 43,058 $ 3,832 $ 75,473 $ 550 Non-current 7,820 750 — — Total $ 50,878 $ 4,582 $ 75,473 $ 550 Credit Risk . The Company is subject to the risk of loss on its financial instruments as a result of nonperformance by counterparties pursuant to the terms of their contractual obligations. The Company entered into International Swaps and Derivative Association agreements with counterparties to mitigate this risk. The Company also maintains credit policies with regard to its counterparties to minimize overall credit risk. The Company’s assets and liabilities from commodity price risk management activities at September 30, 2019 represent derivative instruments from twelve counterparties; all of which are registered swap dealers that have an “investment grade” (minimum Standard & Poor’s rating of BBB- or better) credit rating, and ten of which are parties under the Company’s Bank Credit Facility. The Company enters into derivatives directly with these counterparties and, subject to the terms of the Company’s Bank Credit Facility, is not required to post collateral or other securities for credit risk in relation to the derivative activities. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Note 6 — Debt A summary of the detail comprising the Company’s debt and the related book values for the respective periods presented is as follows (in thousands): Description September 30, 2019 December 31, 2018 11.00% Second-Priority Senior Secured Notes – due April 2022 $ 390,868 $ 390,868 7.50% Senior Secured Notes – due May 2022 6,060 6,060 Bank Credit Facility – due May 2022 315,000 265,000 4.20% Building Loan – due November 2030 — 10,567 Total debt, before discount and deferred financing cost 711,928 672,495 Discount and deferred financing cost (14,736 ) (17,191 ) Total debt, net of discount and deferred financing cost $ 697,192 $ 655,304 Less: current portion of long-term debt — (443 ) Long-term debt, net of discount and deferred financing costs $ 697,192 $ 654,861 11.00% Second-Priority Senior Secured Notes – due April 2022 . The 11.00% Senior Secured Notes were issued pursuant to an indenture dated May 10, 2018. The 11.00% Senior Secured Notes mature April 3, 2022 and have interest payable semi-annually each April 15 and October 15. Prior to May 10, 2020, the Company may, at its option, redeem all or a portion of the 11.00% Senior Secured Notes at 105.5% of the principal amount plus accrued and unpaid interest. Thereafter, the Company may redeem all or a portion of the 11.00% Senior Secured Notes at redemption prices decreasing annually from 102.75% to 100.0% plus accrued and unpaid interest. The indenture governing the 11.00% Senior Secured Notes applies certain limitations on the Company’s ability and the ability of its subsidiaries to, among other things, (i) incur additional indebtedness or issue certain preferred shares; (ii) pay dividends and make certain other restricted payments; (iii) create restrictions on the payment of dividends or other distributions to the Company from its restricted subsidiaries; (iv) create liens on certain assets to secure debt; (v) make certain investments; (vi) engage in sales of assets and subsidiary stock; (vii) transfer all or substantially all of its assets or enter into merger or consolidation transactions; and (viii) engage in transactions with affiliates. The 11.00% Senior Secured Notes contain customary quarterly and annual reporting, financial and administrative covenants. The Company was in compliance with all debt covenants at September 30, 2019. 7.50% Senior Secured Notes – due May 2022 . The 7.50% Stone Senior Notes represent the remaining $6.1 million of long-term debt assumed in the Stone Combination that were not exchanged for 11.00% Senior Secured Notes and thus remain outstanding. As a result, substantially all of the restrictive covenants relating to the 7.50% Stone Senior Notes have been removed and collateral securing the 7.50% Stone Senior Notes has been released. The 7.50% Stone Senior Notes mature May 31, 2022 and have interest payable semi-annually each May 31 and November 30. Prior to May 31, 2020, the Company may, at its option, redeem all or a portion of the 7.50% Stone Senior Notes at 100% of the principal amount plus accrued and unpaid interest and a make-whole premium. Thereafter, the Company may redeem all or a portion of the 7.50% Stone Senior Notes at redemption prices decreasing annually from 105.625% to 100.0% plus accrued and unpaid interest. Bank Credit Facility – due May 2022. The Company and Talos Production LLC, our wholly-owned subsidiary, executed the Bank Credit Facility in conjunction with the Stone Combination with a syndicate of financial institutions, with an initial borrowing base of $600.0 million. The Bank Credit Facility matures on May 10, 2022, provided that the Bank Credit Facility mandates a springing maturity that is 120 days prior to May 10, 2022, if greater than $25.0 million of the 11.00% Senior Secured Notes or any permitted refinancing indebtedness in resect thereof is outstanding on such date. The Bank Credit Facility bears interest based on the borrowing base usage, at the applicable London InterBank Offered Rate, plus applicable margins ranging from 2.75% to 3.75% or an alternate base rate, based on the federal funds effective rate plus applicable margins ranging from 1.75% to 2.75%. In addition, the Company is obligated to pay a commitment fee of 0.50% on the unfunded portion of the commitments under the Bank Credit Facility. The Bank Credit Facility has certain debt covenants, the most restrictive of which is that the Company must maintain a total debt to EBITDAX Ratio (as defined in the Bank Credit Facility) of no greater than 3.00 to 1.00 each quarter. The Company must also maintain a current ratio no less than 1.00 to 1.00 each quarter. According to the Bank Credit Facility, undrawn commitments are included in current assets in the current ratio calculation. The Bank Credit Facility is secured by substantially all of the oil and natural gas assets of the Company. The Bank Credit Facility is fully and unconditionally guaranteed by the Company and certain of its wholly-owned subsidiaries. The Bank Credit Facility provides for determination of the borrowing base based on the Company’s proved producing reserves and a portion of its proved undeveloped reserves. The borrowing base is redetermined by the lenders at least semi-annually during the second quarter and fourth quarter. On July 3, 2019, the Company and Talos Production LLC entered into a Joinder, First Amendment to Credit Agreement, and Borrowing Base Reaffirmation Agreement in which, (a) the $850.0 million borrowing base was reaffirmed, (b) the commitments were increased from $600.0 million to $850.0 million, (c) three additional financial institutions were joined as lenders to the syndicate and (d) certain other amendments were made to the Bank Credit Facility as more particularly described therein. The Company’s scheduled redetermination meeting was held October 30, 2019, with results expected in November 2019. As of September 30, 2019, the Company’s borrowing base and commitments were $ 850.0 million Building Loan – due November 2030 . In connection with the Stone Combination, the Company assumed Stone’s 4.20% term loan maturing on November 20, 2030 (the “Building Loan”). The Building Loan bears interest at a rate of 4.20% per annum and is to be repaid in 180 equal monthly installments of approximately $0.1 million. During June 2019, the Company repaid and discharged $10.4 million aggregate remaining principal, plus accrued interest, of the Building Loan using proceeds from the sale of an office building in Lafayette acquired in the Stone Combination and cash on hand. As of September 30, 2019, there is no outstanding balance under the Building Loan. |
Employee Benefits Plans and Sha
Employee Benefits Plans and Share-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Employee Benefits Plans and Share-Based Compensation | Note 7 — Employee Benefits Plans and Share-Based Compensation Stone Severance Plans The Company maintained the Stone Energy Corporation Executive Severance Plan and Stone Energy Corporation Employee Severance Plan, each a legacy plan of Talos Petroleum LLC (f/k/a Stone Energy Corporation). The plans provided for the payment of severance benefits to certain individuals who, prior to the Stone Combination, were executive officers or employees of Talos Petroleum LLC, in each case upon an involuntary termination within twelve months of the Closing Date. For the three and nine months ended September 30, 2019, the Company incurred nil nil Talos Energy Inc. Long Term Incentive Plan Under the Talos Energy Inc. Long Term Incentive Plan (the “LTIP”), the Company may issue, subject to board approval, grants of options, stock appreciation rights, restricted stock, restricted stock units, stock awards, dividend equivalents, other stock-based awards, cash awards, substitute awards or any combination of the foregoing to employees, directors and consultants. The LTIP authorizes the Company to grant awards of up to 5,415,576 shares of the Company’s common stock. Restricted Stock Units . During the nine months ended September 30, 2019, the Company granted 732,771 restricted stock units (“RSUs”) under the LTIP to employees and non-employees. Restricted Stock Units Weighted Average Grant Date Fair Value Unvested RSUs at December 31, 2018 138,704 $ 33.85 Granted 732,771 $ 24.39 Vested (68,992 ) $ 33.72 Forfeited (48,518 ) $ 25.43 Unvested RSUs at September 30, 2019 753,965 $ 25.21 Performance Stock Units . During the nine months ended September 30, 2019, the Company granted 218,060 performance stock units (“PSUs”) under the LTIP to employees. The following table summarizes PSU activity for the nine months ended September 30, 2019: Performance Share Units Weighted Average Grant Date Fair Value Unvested PSUs at December 31, 2018 231,542 $ 44.47 Granted 218,060 $ 33.96 Vested — $ — Forfeited (26,358 ) $ 39.72 Unvested PSUs at September 30, 2019 423,244 $ 39.35 The grant date fair value of the PSUs granted during the nine months ended September 30, 2019, calculated using a Monte Carlo simulation, was $7.4 million. The following table summarizes the assumptions used to calculate the grant date fair value of the PSUs granted in the nine months ended September 30, 2019: Grant Date March 5, 2019 May 16, 2019 Number of simulations 100,000 100,000 Expected term (in years) 2.8 2.6 Expected volatility 46.9 % 44.8 % Risk-free interest rate 2.5 % 2.1 % Dividend yield — % — % Share-based Compensation Expense, net. Share-based compensation expense is reflected as “General administrative expense,” net amounts capitalized to oil and natural gas properties in the consolidated statement of operations. Because of the non-cash nature of share-based compensation, the expensed portion of share-based compensation is added back to net income in arriving at net cash used in or provided by operating activities in the condensed consolidated statement of cash flows. The following table summarizes the stock-based compensation expense for the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Share based compensation $ 3,591 $ 923 $ 9,568 $ 5,081 Capitalization (1,647 ) (353 ) (4,404 ) (2,952 ) Share based compensation, net capitalization $ 1,944 $ 570 $ 5,164 $ 2,129 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8 — Income Taxes Prior to the Stone Combination, Talos Energy LLC was a partnership for U.S. federal income tax purposes and was not subject to U.S. federal income tax or state income tax (in most states) at the entity level. As such, Talos Energy LLC did not recognize U.S. federal income tax expense or state income tax expense in most states. Talos Energy LLC’s operations in the shallow waters off the coast of Mexico were conducted under a different legal form and are subject to foreign income taxes. For the three months ended September 30, 2019, the Company recognized income tax expense of $0.8 million for an effective tax rate of 1.0%. The difference between the Company’s effective tax rate of 1.0% and federal statutory income tax rate of 21% is primarily due to a reduction to the Company’s valuation allowance. For the three months ended September 30, 2018, the Company’s effective tax rate of 0% differed from the federal statutory rate of 21% because the Company recorded a valuation allowance against its deferred tax assets. For the nine months ended September 30, 2019, the Company recognized an income tax expense of $0.4 million for an effective tax rate of 0.7%. The difference between the Company’s effective tax rate of 0.7% and federal statutory income tax rate of 21% is primarily due to a reduction to the Company’s valuation allowance. For the nine months ended September 30, 2018, the Company’s effective tax rate of 0% differed from the federal statutory rate of 21% because the Company recorded a valuation allowance against its deferred tax assets. The Company evaluates and updates the estimated annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws. Consequently, based upon the mix and timing of the Company’s actual earnings compared to annual projections, the effective tax rate may vary quarterly and may make quarterly comparisons not meaningful. The quarterly income tax provision is generally comprised of tax expense on income or benefit on loss at the most recent estima ted annual effective tax rate. The tax effect of discrete items is recognized in the period in which they occur at the applicable statutory rate. Deferred income tax assets and liabilities are recorded related to net operating losses and temporary differences between the book and tax basis of assets and liabilities expected to produce deductions and income in the future. The realization of deferred tax assets depends on recognition of sufficient future taxable income in specific tax jurisdictions in which those temporary differences or net operating losses are deductible. When assessing the need for a valuation allowance on deferred tax assets, the Company considers whether it is more likely than not that some portion or all of them will not be realized. As September 30, 2019, the Company had a valuation allowance related to federal, state and foreign deferred tax assets. |
Income (Loss) Per Share
Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | Note 9 — Income (Loss) Per Share Basic earnings per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Except when the effect would be antidilutive, diluted earnings per share include the impact of RSUs, PSUs and outstanding warrants. The following table presents the computation of basic and diluted earnings per share for Talos Energy Inc. (in thousands, except for per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net income (loss) $ 73,297 $ 13,109 $ 58,425 $ (84,746 ) Weighted average common shares outstanding — basic 54,200 54,156 54,178 43,329 Dilutive effect of securities 230 8 186 — Weighted average common shares outstanding — diluted 54,430 54,164 54,364 43,329 Net income (loss) per common share: Basic $ 1.35 $ 0.24 $ 1.08 $ (1.96 ) Diluted $ 1.35 $ 0.24 $ 1.07 $ (1.96 ) Anti-dilutive potentially issuable securities excluded from diluted common shares 4,250 3,538 4,282 3,891 For the periods prior to May 10, 2018, the Company retrospectively adjusted the weighted average shares used in determining earnings per share to reflect the number of shares Talos Energy LLC received in the Stone Combination. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10 — Related Party Transactions Whistler Acquisition . On August 31, 2018, the Company acquired certain properties from Whistler Energy II Holdco, LLC, an affiliate of the Apollo Funds, for $52.6 million ($14.8 million net of $37.8 million of cash acquired). Included in current assets acquired as of September 30, 2019 is $1.1 million in receivables from an affiliate of the Apollo Funds to reimburse the Company for certain payments made post-closing. See additional details in Note 2 – Acquisitions. Equity Registration Rights Agreement . On the Closing Date, the Company entered into a Registration Rights Agreement (the “Equity Registration Rights Agreement”) with certain Apollo Funds and Riverstone Funds, certain funds controlled by Franklin Advisers, Inc. (“Franklin”) and certain clients of MacKay Shields LLC (“MacKay Shields”) relating to the registered resale of the Company’s common stock owned by such parties as of Closing. The Company will bear all of the expenses incurred in connection with any offer and sale, while the Apollo Funds, Riverstone Funds, Franklin and MacKay Shields will be responsible for paying underwriting fees, discounts and commissions or similar charges. Pursuant to the Equity Registration Rights Agreement, on June 4, 2019, the Company filed a registration statement on Form S-3 with the SEC registering the offering of shares of the Company’s common stock by the selling stockholders named therein, which was declared effective by the SEC on June 12, 2019. Fees incurred by the Company in conjunction with the Equity Registration Rights Agreement were nil and $0.7 million for the three and nine months ended September 30, 2019, respectively Legal Fees. The Company has engaged the law firm Vinson & Elkins L.L.P. to provide legal services. An immediate family member of William S. Moss III, our Executive Vice President and General Counsel and one of the Company’s executive officers, is a partner at Vinson & Elkins L.L.P. For the three and nine months ended September 30, 2019, we incurred fees of approximately $ 0.3 approximately $5.0 million and $5.3 million, respectively. Service Fee Agreement. Talos Energy LLC entered into service fee agreements with Apollo Funds and Riverstone Funds for the provision of certain management consulting and advisory services. Under each agreement, the Company paid a fee equal to the higher of (i) a certain percentage of earnings before interest, income taxes, depletion, depreciation and amortization and (ii) a fixed fee payable quarterly, provided, however, such fees did not exceed in each case $0.5 million, in aggregate, for any calendar year. For the three and nine months ended September 30, 2019, the Company did not incur expenses for these services. For the three and nine months ended September 30, 2018, the Company incurred approximately nil and $0.5 million, respectively. These fees are recognized in “General and administrative expense” on the condensed consolidated statements of operations. In connection with the Stone Combination, the service fee agreements were terminated |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 — Commitments and Contingencies Performance Obligations Regulations with respect to offshore operations govern, among other things, engineering and construction specifications for production facilities, safety procedures, plugging and abandonment of wells, removal of facilities and to guarantee the execution of the minimum work program under the Mexico production sharing contracts. As of September 30, 2019, the Company had secured performance bonds totaling approximately $637.3 million. As of September 30, 2019, the Company had $13.6 million in letters of credit issued under its Bank Credit Facility. Legal Proceedings The Company is named as a party in certain lawsuits and regulatory proceedings arising in the ordinary course of business. The Company does not expect that these matters, individually or in the aggregate, will have a material adverse effect on its financial condition. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 9 Months Ended |
Sep. 30, 2019 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Financial Information | Note 12 — Condensed Consolidating Financial Information The Company owns no operating assets, has no operations independent of its subsidiaries and owns 100% of the Talos Issuers. The Talos Issuers issued 11.00% Senior Secured Notes on May 10, 2018, which are fully and unconditionally guaranteed, jointly and severally, by the Company and certain of its 100% owned subsidiaries (“Guarantors”) on a senior secured basis. Certain of the Company’s subsidiaries, which are accounted for on a consolidated basis, do not guarantee the 11.00% Senior Secured Notes (“Non-Guarantors”). The following condensed consolidating financial information presents the financial information of the Company on an unconsolidated stand-alone basis and its combined subsidiary issuers, combined guarantor and combined non-guarantor subsidiaries as of and for the periods indicated. As described in Note 1 – Formation and Basis of Presentation TALOS ENERGY INC. CONDENSED CONSOLIDATING BALANCE SHEET AS OF SEPTEMBER 30, 2019 (In thousands) (Unaudited) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 80,621 $ 3,301 $ 6,760 $ — $ 90,682 Restricted cash — — — — — — Accounts receivable, net Trade, net — — 108,354 — — 108,354 Joint interest, net — — 17,124 438 — 17,562 Other — 1,347 9,156 21,265 — 31,768 Assets from price risk management activities — 43,058 — — — 43,058 Prepaid assets — 1,993 37,358 27 — 39,378 Income tax receivable — — — — — — Other current assets — — 1,952 — — 1,952 Total current assets — 127,019 177,245 28,490 — 332,754 Property and equipment: Proved properties — — 4,012,100 — — 4,012,100 Unproved properties, not subject to amortization — — 72,342 105,832 — 178,174 Other property and equipment — 21,999 6,484 207 — 28,690 Total property and equipment — 21,999 4,090,926 106,039 — 4,218,964 Accumulated depreciation, depletion and amortization — (10,302 ) (1,957,269 ) (39 ) — (1,967,610 ) Total property and equipment, net — 11,697 2,133,657 106,000 — 2,251,354 Other long-term assets: Assets from price risk management activities — 7,820 — — — 7,820 Other well equipment inventory — — 9,251 — — 9,251 Leased assets — 3,162 3,412 1,508 — 8,082 Investments in subsidiaries 1,078,993 1,663,746 — — (2,742,739 ) — Other assets 54 364 2,140 66 — 2,624 Total assets $ 1,079,047 $ 1,813,808 $ 2,325,705 $ 136,064 $ (2,742,739 ) $ 2,611,885 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 279 $ 2,758 $ 89,617 $ 3,083 $ — $ 95,737 Accrued liabilities — 1,787 143,112 24,253 — 169,152 Accrued royalties — — 37,763 — — 37,763 Current portion of long-term debt — — — — — — Current portion of asset retirement obligations — — 63,404 — — 63,404 Liabilities from price risk management activities — 3,832 — — — 3,832 Accrued interest payable — 20,906 152 — — 21,058 Leases liabilities — 70 798 548 — 1,416 Other current liabilities — — 18,993 — — 18,993 Total current liabilities 279 29,353 353,839 27,884 — 411,355 Long-term debt, net of discount and deferred financing costs — 691,132 6,060 — — 697,192 Asset retirement obligations — — 321,808 — — 321,808 Liabilities from price risk management activities — 750 — — — 750 Long-term leased liabilities — 13,580 2,629 1,040 — 17,249 Other long-term liabilities 3,944 — 84,620 143 — 88,707 Total liabilities 4,223 734,815 768,956 29,067 — 1,537,061 Commitments and Contingencies (Note 11) Stockholders' equity 1,074,824 1,078,993 1,556,749 106,997 (2,742,739 ) 1,074,824 Total liabilities and stockholders' equity $ 1,079,047 $ 1,813,808 $ 2,325,705 $ 136,064 $ (2,742,739 ) $ 2,611,885 TALOS ENERGY INC. CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2018 (In thousands) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 13,541 $ 100,801 $ 25,572 $ — $ 139,914 Restricted cash — — 1,248 — — 1,248 Accounts receivable, net Trade, net — — 103,025 — — 103,025 Joint interest, net — — 15,870 4,374 — 20,244 Other — 3,100 9,566 7,020 — 19,686 Assets from price risk management activities — 75,473 — — — 75,473 Prepaid assets — 1,225 37,639 47 — 38,911 Income tax receivable — — 10,701 — — 10,701 Other current assets — — 7,644 — — 7,644 Total current assets — 93,339 286,494 37,013 — 416,846 Property and equipment: Proved properties — — 3,629,430 — — 3,629,430 Unproved properties, not subject to amortization — — 63,104 45,105 — 108,209 Other property and equipment — 20,670 12,440 81 — 33,191 Total property and equipment — 20,670 3,704,974 45,186 — 3,770,830 Accumulated depreciation, depletion and amortization — (8,310 ) (1,711,288 ) (11 ) — (1,719,609 ) Total property and equipment, net — 12,360 1,993,686 45,175 — 2,051,221 Other long-term assets: Other well equipment inventory — — 9,224 — — 9,224 Investments in subsidiaries 1,011,359 1,560,922 — — (2,572,281 ) — Other assets — 364 2,258 73 — 2,695 Total assets $ 1,011,359 $ 1,666,985 $ 2,291,662 $ 82,261 $ (2,572,281 ) $ 2,479,986 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 144 $ 1,242 $ 42,736 $ 6,897 $ — $ 51,019 Accrued liabilities — 4,995 159,491 24,164 — 188,650 Accrued royalties — — 38,520 — — 38,520 Current portion of long-term debt — — 443 — — 443 Current portion of asset retirement obligations — — 68,965 — — 68,965 Liabilities from price risk management activities — 550 — — — 550 Accrued interest payable — 10,162 38 — — 10,200 Other current liabilities — — 22,071 — — 22,071 Total current liabilities 144 16,949 332,264 31,061 — 380,418 Long-term debt, net of discount and deferred financing costs — 638,677 16,184 — — 654,861 Asset retirement obligations — — 313,852 — — 313,852 Other long-term liabilities 3,719 — 119,432 208 — 123,359 Total liabilities 3,863 655,626 781,732 31,269 — 1,472,490 Commitments and Contingencies (Note 11) Stockholders' equity 1,007,496 1,011,359 1,509,930 50,992 (2,572,281 ) 1,007,496 Total liabilities and stockholders' equity $ 1,011,359 $ 1,666,985 $ 2,291,662 $ 82,261 $ (2,572,281 ) $ 2,479,986 TALOS ENERGY INC. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019 (In thousands) (Unaudited) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated Revenues: Oil revenue $ — $ — $ 211,690 $ 209 $ — $ 211,899 Natural gas revenue — — 12,545 — — 12,545 NGL revenue — — 3,384 — — 3,384 Other revenue — — 1,029 — — 1,029 Total revenue — — 228,648 209 — 228,857 Operating expenses: — — — — — — Direct lease operating expense — — 43,439 — — 43,439 Insurance — — 4,167 — — 4,167 Production taxes — — (21 ) — — (21 ) Total lease operating expense — — 47,585 — — 47,585 Workover and maintenance expense — — 14,210 — — 14,210 Depreciation, depletion and amortization — 678 87,435 12 — 88,125 Write-down of oil and natural gas properties — — — 1,417 — 1,417 Accretion expense — — 7,316 — — 7,316 General and administrative expense 307 4,803 12,030 181 — 17,321 Total operating expenses 307 5,481 168,576 1,610 — 175,974 Operating income (loss) (307 ) (5,481 ) 60,072 (1,401 ) — 52,883 Interest expense — (16,734 ) (6,191 ) (198 ) — (23,123 ) Price risk management activities income — 43,760 — — — 43,760 Other income — 491 6 70 — 567 Income tax (expense) benefit (780 ) — 4 (14 ) — (790 ) Equity earnings (loss) from subsidiaries 74,384 52,348 — — (126,732 ) — Net income (loss) $ 73,297 $ 74,384 $ 53,891 $ (1,543 ) $ (126,732 ) $ 73,297 TALOS ENERGY INC. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 (In thousands) (Unaudited) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated Revenues: Oil revenue $ — $ — $ 624,277 $ 209 $ — $ 624,486 Natural gas revenue — — 41,738 — — 41,738 NGL revenue — — 15,095 — — 15,095 Other revenue 13,061 13,061 Total revenue — — 694,171 209 — 694,380 Operating expenses: Direct lease operating expense — — 122,243 — — 122,243 Insurance — — 12,462 — — 12,462 Production taxes — — 1,067 — — 1,067 Total lease operating expense — — 135,772 — — 135,772 Workover and maintenance expense — — 49,525 — — 49,525 Depreciation, depletion and amortization — 1,992 246,499 27 — 248,518 Write-down of oil and natural gas properties — — — 13,778 — 13,778 Accretion expense — — 26,868 — — 26,868 General and administrative expense 692 21,035 31,439 629 — 53,795 Total operating expenses 692 23,027 490,103 14,434 — 528,256 Operating income (loss) (692 ) (23,027 ) 204,068 (14,225 ) — 166,124 Interest expense — (50,326 ) (22,428 ) (519 ) — (73,273 ) Price risk management activities expense — (35,829 ) — — — (35,829 ) Other income (expense) — 678 1,242 (89 ) — 1,831 Income tax expense (130 ) — (292 ) (6 ) — (428 ) Equity earnings (loss) from subsidiaries 59,247 167,751 — — (226,998 ) — Net income (loss) $ 58,425 $ 59,247 $ 182,590 $ (14,839 ) $ (226,998 ) $ 58,425 TALOS ENERGY INC. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018 (In thousands) (Unaudited) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated Revenues: Oil revenue $ — $ — $ 248,100 $ — $ — $ 248,100 Natural gas revenue — — 20,193 — — 20,193 NGL revenue — — 14,575 — — 14,575 Total revenue — — 282,868 — — 282,868 Operating expenses: Direct lease operating expense — — 42,090 — — 42,090 Insurance — — 4,125 — — 4,125 Production taxes — — 578 — — 578 Total lease operating expense — — 46,793 — — 46,793 Workover and maintenance expense — — 25,084 — — 25,084 Depreciation, depletion and amortization — 455 87,352 1 — 87,808 Accretion expense — — 10,162 — — 10,162 General and administrative expense — 12,942 8,274 444 — 21,660 Total operating expenses — 13,397 177,665 445 — 191,507 Operating income (loss) — (13,397 ) 105,203 (445 ) — 91,361 Interest expense — (15,580 ) (8,797 ) (460 ) — (24,837 ) Price risk management activities expense — (47,656 ) (5,674 ) — — (53,330 ) Other income (expense) — (356 ) 310 (39 ) — (85 ) Equity earnings from subsidiaries 13,109 90,098 — — (103,207 ) — Net income (loss) $ 13,109 $ 13,109 $ 91,042 $ (944 ) $ (103,207 ) $ 13,109 TALOS ENERGY INC. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 (In thousands) (Unaudited) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated Revenues: Oil revenue $ — $ — $ 555,954 $ — $ — $ 555,954 Natural gas revenue — — 49,364 — — 49,364 NGL revenue — — 27,306 — — 27,306 Total revenue — — 632,624 — — 632,624 Operating expenses: Direct lease operating expense — — 101,065 — — 101,065 Insurance — — 11,059 — — 11,059 Production taxes — — 1,533 — — 1,533 Total lease operating expense — — 113,657 — — 113,657 Workover and maintenance expense — — 49,703 — — 49,703 Depreciation, depletion and amortization — 1,180 203,391 3 — 204,574 Accretion expense — — 24,414 — — 24,414 General and administrative expense — 31,340 28,841 939 — 61,120 Total operating expenses — 32,520 420,006 942 — 453,468 Operating income (loss) — (32,520 ) 212,618 (942 ) — 179,156 Interest expense — (42,207 ) (22,754 ) (1,296 ) — (66,257 ) Price risk management activities expense — (186,873 ) (9,609 ) — — (196,482 ) Other income (expense) — (1,564 ) 395 6 — (1,163 ) Equity earnings (loss) from subsidiaries (84,746 ) 178,418 — — (93,672 ) — Net income (loss) $ (84,746 ) $ (84,746 ) $ 180,650 $ (2,232 ) $ (93,672 ) $ (84,746 ) TALOS ENERGY INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 (In thousands) (Unaudited) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated Cash flows from operating activities: Net cash provided by (used in) operating activities $ (558 ) $ (64,050 ) $ 412,445 $ (15,424 ) $ — $ 332,413 Cash flows from investing activities: Exploration, development, and other capital expenditures — (1,577 ) (301,603 ) (69,740 ) — (372,920 ) Cash paid for in acquisitions — — (32,916 ) — — (32,916 ) Proceeds from sales of property 5,369 5,369 Investments in subsidiaries — (1,119,219 ) — — 1,119,219 — Distributions from subsidiaries — 1,203,194 — — (1,203,194 ) — Net cash provided by (used in) investing activities — 82,398 (329,150 ) (69,740 ) (83,975 ) (400,467 ) Cash flows from financing activities: Redemption of Senior Notes and other long-term debt — — (10,567 ) — — (10,567 ) Proceeds from Bank Credit Facility — 75,000 — — — 75,000 Repayment of Bank Credit Facility — (25,000 ) — — — (25,000 ) Deferred financing costs — (1,268 ) — — — (1,268 ) Other deferred payments — — (9,921 ) — — (9,921 ) Payments of capital lease — — (10,344 ) — — (10,344 ) Capital contributions 558 — 1,051,661 67,000 (1,119,219 ) — Employee stock transaction — — (326 ) — — (326 ) Distributions to subsidiary issuer — — (1,202,546 ) (648 ) 1,203,194 — Net cash provided by (used in) financing activities 558 48,732 (182,043 ) 66,352 83,975 17,574 Net increase (decrease) in cash, cash equivalents and restricted cash — 67,080 (98,748 ) (18,812 ) — (50,480 ) Cash, cash equivalents and restricted cash: Balance, beginning of period — 13,541 102,049 25,572 — 141,162 Balance, end of period $ — $ 80,621 $ 3,301 $ 6,760 $ — $ 90,682 TALOS ENERGY INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 (In thousands) (Unaudited) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated Cash flows from operating activities: Net cash provided by (used in) operating activities $ — $ (126,105 ) $ 269,841 $ (49 ) $ — $ 143,687 Cash flows from investing activities: Exploration, development, and other capital expenditures — (12,966 ) (159,368 ) (2,015 ) — (174,349 ) Cash acquired in acquisitions — — 278,409 — — 278,409 Investments in subsidiaries — (778,148 ) — — 778,148 — Distributions from subsidiaries — 1,097,505 (9 ) — (1,097,496 ) — Net cash provided by (used in) investing activities — 306,391 119,032 (2,015 ) (319,348 ) 104,060 Cash flows from financing activities: Redemption of Senior Notes and other long-term debt — (24,977 ) (174 ) — — (25,151 ) Proceeds from Bank Credit Facility — 319,000 — — — 319,000 Repayment of Bank Credit Facility — (54,000 ) — — — (54,000 ) Repayment of LLC Credit Facility — (403,000 ) — — — (403,000 ) Deferred financing costs — (16,990 ) — — — (16,990 ) Payments of capital lease — — (9,874 ) — — (9,874 ) Capital contributions — — 770,436 7,712 (778,148 ) — Distributions to subsidiaries — — (1,095,165 ) (2,331 ) 1,097,496 — Net cash provided by (used in) financing activities — (179,967 ) (334,777 ) 5,381 319,348 (190,015 ) Net increase in cash, cash equivalents and restricted cash — 319 54,096 3,317 — 57,732 Cash, cash equivalents and restricted cash: Balance, beginning of period — 22,315 9,048 2,070 — 33,433 Balance, end of period $ — $ 22,634 $ 63,144 $ 5,387 $ — $ 91,165 |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Formation and Nature of Business | Formation and Nature of Business Talos Energy Inc. (“Talos,” the “Company,” “we,” “us” or “our”) is a technically driven independent exploration and production company focused on safely and efficiently maximizing cash flows and long-term value through our operations in the United States (“U.S.”) Gulf of Mexico and offshore Mexico. As one of the largest public independent producers in the U.S. Gulf of Mexico, we leverage decades of geology, geophysics and offshore operational expertise in acquisition, exploration, exploitation and development of deep and shallow water assets in key geological trends that are present in many offshore basins around the world. Our activities offshore Mexico provide high impact exploration opportunities in an oil rich emerging basin. Talos was formed in connection with the business combination between Talos Energy LLC and Stone Energy Corporation (“Stone”) that occurred on May 10, 2018, pursuant to which Talos Energy LLC and Stone became indirect wholly-owned subsidiaries of Talos Energy Inc. |
Talos Energy LLC | Talos Energy LLC Talos Energy LLC was formed in 2011 and commenced commercial operations on February 6, 2013. Prior to February 6, 2013, Talos Energy LLC incurred certain general and administrative expenses associated with the start-up of its operations. On February 3, 2012, Talos Energy LLC completed a transaction with certain funds and other alternative investment vehicles managed by Apollo Management VII, L.P. and Apollo Commodities Management, L.P., with respect to Series I (“Apollo Funds”), and entities controlled by or affiliated with Riverstone Energy Partners V, L.P. (“Riverstone Funds”) and members of management pursuant to which Talos Energy LLC received a private equity capital commitment. |
Stone Combination | Stone Combination On May 10, 2018 (the “Closing Date”), the Company consummated the transactions contemplated by that certain Transaction Agreement dated as of November 21, 2017 (the “Transaction Agreement”), pursuant to which, among other items, each of Stone, Talos Production LLC and Talos Energy LLC became wholly-owned subsidiaries of the Company (the “Stone Combination”). Concurrently with the consummation of the Transaction Agreement, the Company consummated the transactions contemplated by that certain Exchange Agreement, dated as of November 21, 2017 (the “Exchange Agreement”) pursuant to which (i) the Apollo Funds and Riverstone Funds contributed $102.0 million in aggregate principal amount of 9.75% Senior Notes due 2022 issued by Talos Production LLC and Talos Production Finance, Inc. (together, “Talos Issuers”) to the Company in exchange for an aggregate of 2,874,049 shares of Talos common stock; (ii) the holders of second lien bridge loans (“11.00% Bridge Loans”) exchanged such 11.00% Bridge Loans for $172.0 million aggregate principal amount of 11.00% Second-Priority Senior Secured Notes due 2022 of the Talos Issuers (“11.00% Senior Secured Notes”) and (iii) certain holders of 7.50% Senior Secured Notes due 2022 issued by Stone (“7.50% Stone Senior Notes”) exchanged such notes for $137.4 million aggregate principal amount of 11.00% Senior Secured Notes. Prior to the Closing Date, the Company did not conduct any material activities other than those incident to its formation and the matters contemplated by the Transaction Agreement. See Note 2 – Acquisitions Substantially concurrently therewith, the Company consummated an exchange offer and consent solicitation, pursuant to which other holders of the 7.50% Stone Senior Notes exchanged their 7.50% Stone Senior Notes for 11.00% Senior Secured Notes and a cash payment. Approximately $81.5 million in aggregate principal amount of the 7.50% Stone Senior Notes were validly tendered, and approximately $6.1 million in aggregate principal amount of 7.50% Stone Senior Notes remained outstanding as of the Closing Date. |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, certain information and disclosures normally included in complete financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, these financial statements include all adjustments, which unless otherwise disclosed, are of a normal recurring nature, necessary for a fair presentation of the financial position, results of operations, cash flows and changes in equity for the periods presented. The results for interim periods are not necessarily indicative of results for the entire year. The Company has evaluated subsequent events through the date the condensed consolidated financial statements were issued. The unaudited financial statements and related notes included in this Quarterly Report on Form 10-Q (this “Quarterly Report”) should be read in conjunction with the Company’s audited Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (our “2018 Annual Report”). Talos Energy LLC was considered the accounting acquirer in the Stone Combination under GAAP. Accordingly, the historical financial and operating data of Talos Energy Inc., which covers periods prior to the Closing Date, reflects the assets, liabilities and results of operations of Talos Energy LLC and does not reflect the assets, liabilities and results of operations of Stone. For the periods prior to May 10, 2018, the Company retrospectively adjusted its Statements of Changes in Stockholders’ Equity and the weighted average shares used in determining earnings per share to reflect the number of shares Talos Energy LLC received in the Stone Combination. Beginning on May 10, 2018, common stock is presented to reflect the legal capital of Talos Energy Inc. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, the reported amounts of revenues and expenses during the reporting periods and the reported amounts of proved oil and natural gas reserves. Actual results could differ from those estimates. The Company has one reportable segment, exploration and production of oil and natural gas. Substantially all of the Company’s proved reserves and production sales are related to the Company’s operations in the U.S. Unless otherwise indicated or the context otherwise requires, references in this Quarterly Report to “Talos,” the “Company,” “we,” “us” or “our” refer to Talos Energy Inc. and its wholly-owned subsidiaries. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Leases. In February 2016, the Financial Accounting Standards Board issued Accounting Standards Codification 2016-02, Leases (“Topic 842”) requiring an entity to recognize a right-of-use asset representing the right to use an underlying asset for the lease term and a lease liability representing the obligation associated with future lease payments for virtually all leases. The pattern of expense recognition in the income statement is dependent on lease classification as finance or operating. A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment (an identified asset) for a period of time in exchange for consideration. However, Topic 842 does not apply to leases of mineral rights. On January 1, 2019, the Company adopted Topic 842, using the modified retrospective approach, which does not require an adjustment to comparative-period financial statements. As such, results for reporting periods beginning January 1, 2019 are presented in accordance with Topic 842, while prior period amounts are reported in accordance with previous lease accounting treatment. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other items, allowed Talos not to reassess whether expired or existing contracts, including land easements, contain a lease or reassess the classification and indirect costs associated with existing or expired leases. On the January 1, 2019 adoption date, the Company recorded a right-of-use asset of approximately $7.3 million and corresponding lease liability of $16.9 million representing the present value of its future operating lease payments. Upon the adoption of Topic 842, lease incentives are presented as a reduction to the right-of-use asset resulting in the difference between the right-of-use asset and lease liability. Adoption of this standard did not require an adjustment to retained earnings and did not impact the condensed consolidated statements of operations, condensed consolidated statements of cash flows or condensed consolidated statements of changes in stockholders’ equity. See Note 4 – Leases |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Revenue and Net Income Attributable to Assets Acquired | The following table presents revenue and net income attributable to the assets acquired in the Stone Combination for the three and nine months ended September 30, 2019 and 2018: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Revenue $ 97,213 $ 134,989 $ 313,335 $ 204,298 Net income $ 40,775 $ 75,968 $ 147,186 $ 120,390 |
Gunflint Acquisition | |
Summary of Allocation of Purchase Price to Assets Acquired and Liabilities Assumed | The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed, based on their relative fair values, on January 11, 2019 (in thousands): Property and equipment $ 28,912 Asset retirement obligations (996 ) Allocated purchase price $ 27,916 |
Whistler Energy II, LLC | |
Summary of Allocation of Purchase Price to Assets Acquired and Liabilities Assumed | The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed, based on their relative fair values, on August 31, 2018 (in thousands): Current assets (1) $ 45,337 Property and equipment 35,344 Other long-term assets 66 Current liabilities (4,261 ) Other long-term liabilities (23,862 ) Allocated purchase price $ 52,624 (1) |
Stone Energy Corporation | |
Summary of Allocation of Purchase Price to Assets Acquired and Liabilities Assumed | The following table presents the final allocation of the purchase price to the assets acquired and liabilities assumed, based on their fair values on May 10, 2018 (in thousands): Current assets (1) $ 372,963 Property and equipment 886,406 Other long-term assets 19,494 Current liabilities (132,846 ) Long-term debt (235,416 ) Other long-term liabilities (178,637 ) Allocated purchase price $ 731,964 (1) |
Summary of Purchase Price | The following table summarizes the purchase price (in thousands, except per share data): Stone common stock - issued and outstanding as of May 9, 2018 20,038 Stone common stock price $ 35.49 Common stock value $ 711,149 Stone common stock warrants - issued and outstanding as of May 9, 2018 3,528 Stone common stock warrants price $ 5.90 Common stock warrants value $ 20,815 Total purchase price $ 731,964 |
Supplemental Proforma Information | The following supplemental pro forma information (in thousands, except per common share amounts), presents the condensed consolidated statements of operations for the three and nine months ended September 30, 2018 as if the Stone Combination had occurred on January 1, 2018. The unaudited pro forma information was derived from historical combined statements of operations of the Company and Stone and adjusted to include (i) depletion and accretion expense applied to the adjusted basis of the oil and natural gas properties acquired, (ii) interest expense to reflect the debt transactions contemplated by the Exchange Agreement and (iii) general and administrative expense adjusted for transaction related costs incurred. This information does not purport to be indicative of results of operations that would have occurred had the Stone Combination occurred on January 1, 2018, nor is such information indicative of any expected future results of operations. Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Revenue $ 282,868 $ 754,520 Net income (loss) $ 20,566 $ (30,645 ) Basic net income (loss) per common share $ 0.38 $ (0.71 ) Diluted net income (loss) per common share $ 0.38 $ (0.71 ) |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Oil And Gas Property [Abstract] | |
Schedule of Asset Retirement Obligations | Asset Retirement Obligations. The discounted asset retirement obligations included “Current portion of asset retirement obligations” and “Asset retirement obligations” on the condensed consolidated balance sheets and the changes to that liability during the nine months ended September 30, 2019 were as follows (in thousands): Asset retirement obligations at December 31, 2018 $ 382,817 Fair value of asset retirement obligations assumed 5,047 Obligations settled (54,406 ) Fair value of asset retirement obligations divested (5,450 ) Accretion expense 26,868 Obligations incurred 4,111 Changes in estimate 26,225 Asset retirement obligations at September 30, 2019 $ 385,212 Less: Current portion 63,404 Long-term portion $ 321,808 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Components of Lease Costs | The components of lease costs were as follows (in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Finance lease cost - interest on lease liabilities (1) $ 4,728 $ 14,589 Operating lease cost, excluding short-term leases (2) 822 2,348 Short-term lease cost (3) 17,658 81,897 Variable lease cost (4) 3 8 Total lease cost $ 23,211 $ 98,842 (1) The HP-I is utilized in the Company’s oil and natural gas development activities and the right-of-use asset was capitalized and included in proved property and depleted as part of the full cost pool. Once items are included in the full cost pool, they are indistinguishable from other proved properties. The capitalized costs within the full cost pool are amortized over the life of the total proved reserved using the unit-of-production method, computed quarterly. (2) Operating lease cost reflect a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. (3) Short-term lease costs are reported at gross amounts and primarily represent costs incurred for drilling rigs, most of which are short-term contracts not recognized as a right-of-use asset and lease liability on the balance sheet. (4) Variable lease costs primarily represent differences between minimum payment obligations and actual operating charges incurred by the Company related to its long-term leases. |
Schedule of Right-of-Use Asset and Liability, Adjusted for Initial Direct Costs and Incentives | The present value of the fixed lease payments recorded as the Company’s right-of-use asset and liability, adjusted for initial direct costs and incentives are as follows (in thousands): September 30, 2019 Operating leases: Operating lease assets $ 8,082 Current portion of operating leases $ 1,416 Operating lease liabilities 17,249 Total operating lease liabilities $ 18,665 Finance leases: Proved property (1) $ 124,299 Other current liabilities $ 16,578 Other long-term liabilities 66,746 Total finance lease liabilities $ 83,324 (1) The HP-I is utilized in the Company’s oil and natural gas development activities and the right-of-use asset was capitalized and included in proved property and depleted as part of the full cost pool. Once items are included in the full cost pool, they are indistinguishable from other proved properties. The capitalized costs within the full cost pool are amortized over the life of the total proved reserves using the unit-of-production method, computed quarterly. |
Minimum Future Commitments by leases | Minimum future commitments by year for the Company’s leases as of September 30, 2019 are presented in the table below (in thousands). Such commitments are reflected at undiscounted values and are reconciled to the discounted present value recognized on the balance sheet. Operating Leases Finance Leases 2019 (excluding the nine months ended September 30, 2019) $ 453 $ 8,314 2020 2,746 33,257 2021 4,079 33,257 2022 4,302 33,257 2023 4,237 13,858 Thereafter 19,105 — Total lease payments $ 34,922 $ 121,943 Imputed interest (16,257 ) (38,619 ) Total $ 18,665 $ 83,324 |
Schedule of Weighted Average Remaining Lease Term and Discount Rate | September 30, 2019 Weighted average remaining lease term: Operating leases 9 years Finance leases 4 years Weighted average discount rate: Operating leases 10.2 % Finance leases 21.9 % |
Supplemental Cash Flow Information Related to Leases | The table below presents the supplemental cash flow information related to leases for the nine months ended September 30, 2019 (in thousands): Operating cash outflow from finance leases $ 14,589 Financing cash outflow from finance leases $ 10,344 Operating cash outflow from operating leases $ 1,358 Right-of-use assets obtained in exchange for new finance lease liabilities $ — Right-of-use assets obtained in exchange for new operating lease liabilities $ 2,225 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Financial Instruments [Abstract] | |
Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments | The following table presents the carrying amounts and estimated fair values of financial instruments (in thousands): September 30, 2019 December 31, 2018 Carrying Amount Fair Value Carrying Amount Fair Value 11.00% Second-Priority Senior Secured Notes – due April 2022 (1) $ 383,186 $ 398,685 $ 381,229 $ 362,168 7.50% Senior Secured Notes – due May 2022 $ 6,060 $ 5,272 $ 6,060 $ 5,151 Bank Credit Facility – due May 2022 (1) $ 307,946 $ 315,000 $ 257,448 $ 265,000 Oil and Natural Gas Derivatives $ 46,296 $ 46,296 $ 74,923 $ 74,923 (1) |
Schedule of Impact that Derivatives not Qualifying as Hedging Instruments in Condensed Consolidated Statements of Operations | The following table presents the impact that derivatives, not qualifying as hedging instruments, had on the Company’s condensed consolidated statements of operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net cash received (paid) on settled derivative instruments $ 5,360 $ (40,746 ) $ (7,202 ) $ (94,802 ) Unrealized gain (loss) 38,400 (12,584 ) (28,627 ) (101,680 ) Price risk management activities income (expense) $ 43,760 $ (53,330 ) $ (35,829 ) $ (196,482 ) |
Schedule of Contracted Volumes and Weighted Average Prices and will Receive Under Derivative Contracts | The following table reflects the contracted volumes and weighted average prices the Company will receive under its derivative contracts as of September 30, 2019: Production Period Instrument Type Average Daily Volumes Weighted Average Swap Price Weighted Average Put Price Weighted Average Call Price Crude Oil – WTI: (Bbls) (per Bbl) (per Bbl) (per Bbl) Oct 2019 - Dec 2019 Swap 29,468 $ 56.04 $ — $ — Jan 2020 - Dec 2020 Swap 13,492 $ 56.13 $ — $ — Jan 2020 - Dec 2020 Costless collars 7,481 $ — $ 55.00 $ 64.23 Natural Gas – Henry Hub NYMEX: (MMBtu) (per MMBtu) (per MMBtu) (per MMBtu) Oct 2019 - Dec 2019 Swap 37,475 $ 2.92 $ — $ — Jan 2020 - Dec 2020 Swap 16,216 $ 2.78 $ — $ — |
Summary of Additional Information Related to Financial Instruments Measured at Fair Value on Recurring Basis | The Company’s commodity derivative instruments are measured at fair value based on third-party industry-standard models using various inputs substantially observable in active markets, including forward oil and natural gas price curves, and are therefore classified as Level 2 in the required fair value hierarchy for the periods presented. The following tables provide additional information related to financial instruments measured at fair value on a recurring basis (in thousands): September 30, 2019 Level 1 Level 2 Level 3 Total Assets: Oil and natural gas derivatives $ — $ 50,878 $ — $ 50,878 Liabilities: Oil and natural gas derivatives — (4,582 ) — (4,582 ) Total net asset $ — $ 46,296 $ — $ 46,296 December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Oil and natural gas derivatives $ — $ 75,473 $ — $ 75,473 Liabilities: Oil and natural gas derivatives — (550 ) — (550 ) Total net asset $ — $ 74,923 $ — $ 74,923 |
Schedule of Fair Value of Derivative Financial Instruments | The following table presents the fair value of derivative financial instruments at September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Assets Liabilities Assets Liabilities Oil and natural gas derivatives: Current $ 43,058 $ 3,832 $ 75,473 $ 550 Non-current 7,820 750 — — Total $ 50,878 $ 4,582 $ 75,473 $ 550 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Detail Comprising Debt and Related Book Values | A summary of the detail comprising the Company’s debt and the related book values for the respective periods presented is as follows (in thousands): Description September 30, 2019 December 31, 2018 11.00% Second-Priority Senior Secured Notes – due April 2022 $ 390,868 $ 390,868 7.50% Senior Secured Notes – due May 2022 6,060 6,060 Bank Credit Facility – due May 2022 315,000 265,000 4.20% Building Loan – due November 2030 — 10,567 Total debt, before discount and deferred financing cost 711,928 672,495 Discount and deferred financing cost (14,736 ) (17,191 ) Total debt, net of discount and deferred financing cost $ 697,192 $ 655,304 Less: current portion of long-term debt — (443 ) Long-term debt, net of discount and deferred financing costs $ 697,192 $ 654,861 |
Employee Benefits Plans and S_2
Employee Benefits Plans and Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Restricted Stock Units Activity | The following table summarizes RSU activity for the nine months ended September 30, 2019: Restricted Stock Units Weighted Average Grant Date Fair Value Unvested RSUs at December 31, 2018 138,704 $ 33.85 Granted 732,771 $ 24.39 Vested (68,992 ) $ 33.72 Forfeited (48,518 ) $ 25.43 Unvested RSUs at September 30, 2019 753,965 $ 25.21 |
Summary of Performance Stock Units Activity | The following table summarizes PSU activity for the nine months ended September 30, 2019: Performance Share Units Weighted Average Grant Date Fair Value Unvested PSUs at December 31, 2018 231,542 $ 44.47 Granted 218,060 $ 33.96 Vested — $ — Forfeited (26,358 ) $ 39.72 Unvested PSUs at September 30, 2019 423,244 $ 39.35 |
Summary of Assumptions Used to Calculate the Grant Date Fair Value of PSUs Granted | The following table summarizes the assumptions used to calculate the grant date fair value of the PSUs granted in the nine months ended September 30, 2019: Grant Date March 5, 2019 May 16, 2019 Number of simulations 100,000 100,000 Expected term (in years) 2.8 2.6 Expected volatility 46.9 % 44.8 % Risk-free interest rate 2.5 % 2.1 % Dividend yield — % — % |
Summary of Share Based Compensation Expense | The following table summarizes the stock-based compensation expense for the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Share based compensation $ 3,591 $ 923 $ 9,568 $ 5,081 Capitalization (1,647 ) (353 ) (4,404 ) (2,952 ) Share based compensation, net capitalization $ 1,944 $ 570 $ 5,164 $ 2,129 |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic and Diluted Earning Per Share | The following table presents the computation of basic and diluted earnings per share for Talos Energy Inc. (in thousands, except for per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net income (loss) $ 73,297 $ 13,109 $ 58,425 $ (84,746 ) Weighted average common shares outstanding — basic 54,200 54,156 54,178 43,329 Dilutive effect of securities 230 8 186 — Weighted average common shares outstanding — diluted 54,430 54,164 54,364 43,329 Net income (loss) per common share: Basic $ 1.35 $ 0.24 $ 1.08 $ (1.96 ) Diluted $ 1.35 $ 0.24 $ 1.07 $ (1.96 ) Anti-dilutive potentially issuable securities excluded from diluted common shares 4,250 3,538 4,282 3,891 |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Summary of Condensed Consolidating Financial Information | The following condensed consolidating financial information presents the financial information of the Company on an unconsolidated stand-alone basis and its combined subsidiary issuers, combined guarantor and combined non-guarantor subsidiaries as of and for the periods indicated. As described in Note 1 – Formation and Basis of Presentation TALOS ENERGY INC. CONDENSED CONSOLIDATING BALANCE SHEET AS OF SEPTEMBER 30, 2019 (In thousands) (Unaudited) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 80,621 $ 3,301 $ 6,760 $ — $ 90,682 Restricted cash — — — — — — Accounts receivable, net Trade, net — — 108,354 — — 108,354 Joint interest, net — — 17,124 438 — 17,562 Other — 1,347 9,156 21,265 — 31,768 Assets from price risk management activities — 43,058 — — — 43,058 Prepaid assets — 1,993 37,358 27 — 39,378 Income tax receivable — — — — — — Other current assets — — 1,952 — — 1,952 Total current assets — 127,019 177,245 28,490 — 332,754 Property and equipment: Proved properties — — 4,012,100 — — 4,012,100 Unproved properties, not subject to amortization — — 72,342 105,832 — 178,174 Other property and equipment — 21,999 6,484 207 — 28,690 Total property and equipment — 21,999 4,090,926 106,039 — 4,218,964 Accumulated depreciation, depletion and amortization — (10,302 ) (1,957,269 ) (39 ) — (1,967,610 ) Total property and equipment, net — 11,697 2,133,657 106,000 — 2,251,354 Other long-term assets: Assets from price risk management activities — 7,820 — — — 7,820 Other well equipment inventory — — 9,251 — — 9,251 Leased assets — 3,162 3,412 1,508 — 8,082 Investments in subsidiaries 1,078,993 1,663,746 — — (2,742,739 ) — Other assets 54 364 2,140 66 — 2,624 Total assets $ 1,079,047 $ 1,813,808 $ 2,325,705 $ 136,064 $ (2,742,739 ) $ 2,611,885 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 279 $ 2,758 $ 89,617 $ 3,083 $ — $ 95,737 Accrued liabilities — 1,787 143,112 24,253 — 169,152 Accrued royalties — — 37,763 — — 37,763 Current portion of long-term debt — — — — — — Current portion of asset retirement obligations — — 63,404 — — 63,404 Liabilities from price risk management activities — 3,832 — — — 3,832 Accrued interest payable — 20,906 152 — — 21,058 Leases liabilities — 70 798 548 — 1,416 Other current liabilities — — 18,993 — — 18,993 Total current liabilities 279 29,353 353,839 27,884 — 411,355 Long-term debt, net of discount and deferred financing costs — 691,132 6,060 — — 697,192 Asset retirement obligations — — 321,808 — — 321,808 Liabilities from price risk management activities — 750 — — — 750 Long-term leased liabilities — 13,580 2,629 1,040 — 17,249 Other long-term liabilities 3,944 — 84,620 143 — 88,707 Total liabilities 4,223 734,815 768,956 29,067 — 1,537,061 Commitments and Contingencies (Note 11) Stockholders' equity 1,074,824 1,078,993 1,556,749 106,997 (2,742,739 ) 1,074,824 Total liabilities and stockholders' equity $ 1,079,047 $ 1,813,808 $ 2,325,705 $ 136,064 $ (2,742,739 ) $ 2,611,885 TALOS ENERGY INC. CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2018 (In thousands) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 13,541 $ 100,801 $ 25,572 $ — $ 139,914 Restricted cash — — 1,248 — — 1,248 Accounts receivable, net Trade, net — — 103,025 — — 103,025 Joint interest, net — — 15,870 4,374 — 20,244 Other — 3,100 9,566 7,020 — 19,686 Assets from price risk management activities — 75,473 — — — 75,473 Prepaid assets — 1,225 37,639 47 — 38,911 Income tax receivable — — 10,701 — — 10,701 Other current assets — — 7,644 — — 7,644 Total current assets — 93,339 286,494 37,013 — 416,846 Property and equipment: Proved properties — — 3,629,430 — — 3,629,430 Unproved properties, not subject to amortization — — 63,104 45,105 — 108,209 Other property and equipment — 20,670 12,440 81 — 33,191 Total property and equipment — 20,670 3,704,974 45,186 — 3,770,830 Accumulated depreciation, depletion and amortization — (8,310 ) (1,711,288 ) (11 ) — (1,719,609 ) Total property and equipment, net — 12,360 1,993,686 45,175 — 2,051,221 Other long-term assets: Other well equipment inventory — — 9,224 — — 9,224 Investments in subsidiaries 1,011,359 1,560,922 — — (2,572,281 ) — Other assets — 364 2,258 73 — 2,695 Total assets $ 1,011,359 $ 1,666,985 $ 2,291,662 $ 82,261 $ (2,572,281 ) $ 2,479,986 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 144 $ 1,242 $ 42,736 $ 6,897 $ — $ 51,019 Accrued liabilities — 4,995 159,491 24,164 — 188,650 Accrued royalties — — 38,520 — — 38,520 Current portion of long-term debt — — 443 — — 443 Current portion of asset retirement obligations — — 68,965 — — 68,965 Liabilities from price risk management activities — 550 — — — 550 Accrued interest payable — 10,162 38 — — 10,200 Other current liabilities — — 22,071 — — 22,071 Total current liabilities 144 16,949 332,264 31,061 — 380,418 Long-term debt, net of discount and deferred financing costs — 638,677 16,184 — — 654,861 Asset retirement obligations — — 313,852 — — 313,852 Other long-term liabilities 3,719 — 119,432 208 — 123,359 Total liabilities 3,863 655,626 781,732 31,269 — 1,472,490 Commitments and Contingencies (Note 11) Stockholders' equity 1,007,496 1,011,359 1,509,930 50,992 (2,572,281 ) 1,007,496 Total liabilities and stockholders' equity $ 1,011,359 $ 1,666,985 $ 2,291,662 $ 82,261 $ (2,572,281 ) $ 2,479,986 TALOS ENERGY INC. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019 (In thousands) (Unaudited) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated Revenues: Oil revenue $ — $ — $ 211,690 $ 209 $ — $ 211,899 Natural gas revenue — — 12,545 — — 12,545 NGL revenue — — 3,384 — — 3,384 Other revenue — — 1,029 — — 1,029 Total revenue — — 228,648 209 — 228,857 Operating expenses: — — — — — — Direct lease operating expense — — 43,439 — — 43,439 Insurance — — 4,167 — — 4,167 Production taxes — — (21 ) — — (21 ) Total lease operating expense — — 47,585 — — 47,585 Workover and maintenance expense — — 14,210 — — 14,210 Depreciation, depletion and amortization — 678 87,435 12 — 88,125 Write-down of oil and natural gas properties — — — 1,417 — 1,417 Accretion expense — — 7,316 — — 7,316 General and administrative expense 307 4,803 12,030 181 — 17,321 Total operating expenses 307 5,481 168,576 1,610 — 175,974 Operating income (loss) (307 ) (5,481 ) 60,072 (1,401 ) — 52,883 Interest expense — (16,734 ) (6,191 ) (198 ) — (23,123 ) Price risk management activities income — 43,760 — — — 43,760 Other income — 491 6 70 — 567 Income tax (expense) benefit (780 ) — 4 (14 ) — (790 ) Equity earnings (loss) from subsidiaries 74,384 52,348 — — (126,732 ) — Net income (loss) $ 73,297 $ 74,384 $ 53,891 $ (1,543 ) $ (126,732 ) $ 73,297 TALOS ENERGY INC. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 (In thousands) (Unaudited) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated Revenues: Oil revenue $ — $ — $ 624,277 $ 209 $ — $ 624,486 Natural gas revenue — — 41,738 — — 41,738 NGL revenue — — 15,095 — — 15,095 Other revenue 13,061 13,061 Total revenue — — 694,171 209 — 694,380 Operating expenses: Direct lease operating expense — — 122,243 — — 122,243 Insurance — — 12,462 — — 12,462 Production taxes — — 1,067 — — 1,067 Total lease operating expense — — 135,772 — — 135,772 Workover and maintenance expense — — 49,525 — — 49,525 Depreciation, depletion and amortization — 1,992 246,499 27 — 248,518 Write-down of oil and natural gas properties — — — 13,778 — 13,778 Accretion expense — — 26,868 — — 26,868 General and administrative expense 692 21,035 31,439 629 — 53,795 Total operating expenses 692 23,027 490,103 14,434 — 528,256 Operating income (loss) (692 ) (23,027 ) 204,068 (14,225 ) — 166,124 Interest expense — (50,326 ) (22,428 ) (519 ) — (73,273 ) Price risk management activities expense — (35,829 ) — — — (35,829 ) Other income (expense) — 678 1,242 (89 ) — 1,831 Income tax expense (130 ) — (292 ) (6 ) — (428 ) Equity earnings (loss) from subsidiaries 59,247 167,751 — — (226,998 ) — Net income (loss) $ 58,425 $ 59,247 $ 182,590 $ (14,839 ) $ (226,998 ) $ 58,425 TALOS ENERGY INC. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018 (In thousands) (Unaudited) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated Revenues: Oil revenue $ — $ — $ 248,100 $ — $ — $ 248,100 Natural gas revenue — — 20,193 — — 20,193 NGL revenue — — 14,575 — — 14,575 Total revenue — — 282,868 — — 282,868 Operating expenses: Direct lease operating expense — — 42,090 — — 42,090 Insurance — — 4,125 — — 4,125 Production taxes — — 578 — — 578 Total lease operating expense — — 46,793 — — 46,793 Workover and maintenance expense — — 25,084 — — 25,084 Depreciation, depletion and amortization — 455 87,352 1 — 87,808 Accretion expense — — 10,162 — — 10,162 General and administrative expense — 12,942 8,274 444 — 21,660 Total operating expenses — 13,397 177,665 445 — 191,507 Operating income (loss) — (13,397 ) 105,203 (445 ) — 91,361 Interest expense — (15,580 ) (8,797 ) (460 ) — (24,837 ) Price risk management activities expense — (47,656 ) (5,674 ) — — (53,330 ) Other income (expense) — (356 ) 310 (39 ) — (85 ) Equity earnings from subsidiaries 13,109 90,098 — — (103,207 ) — Net income (loss) $ 13,109 $ 13,109 $ 91,042 $ (944 ) $ (103,207 ) $ 13,109 TALOS ENERGY INC. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 (In thousands) (Unaudited) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated Revenues: Oil revenue $ — $ — $ 555,954 $ — $ — $ 555,954 Natural gas revenue — — 49,364 — — 49,364 NGL revenue — — 27,306 — — 27,306 Total revenue — — 632,624 — — 632,624 Operating expenses: Direct lease operating expense — — 101,065 — — 101,065 Insurance — — 11,059 — — 11,059 Production taxes — — 1,533 — — 1,533 Total lease operating expense — — 113,657 — — 113,657 Workover and maintenance expense — — 49,703 — — 49,703 Depreciation, depletion and amortization — 1,180 203,391 3 — 204,574 Accretion expense — — 24,414 — — 24,414 General and administrative expense — 31,340 28,841 939 — 61,120 Total operating expenses — 32,520 420,006 942 — 453,468 Operating income (loss) — (32,520 ) 212,618 (942 ) — 179,156 Interest expense — (42,207 ) (22,754 ) (1,296 ) — (66,257 ) Price risk management activities expense — (186,873 ) (9,609 ) — — (196,482 ) Other income (expense) — (1,564 ) 395 6 — (1,163 ) Equity earnings (loss) from subsidiaries (84,746 ) 178,418 — — (93,672 ) — Net income (loss) $ (84,746 ) $ (84,746 ) $ 180,650 $ (2,232 ) $ (93,672 ) $ (84,746 ) TALOS ENERGY INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 (In thousands) (Unaudited) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated Cash flows from operating activities: Net cash provided by (used in) operating activities $ (558 ) $ (64,050 ) $ 412,445 $ (15,424 ) $ — $ 332,413 Cash flows from investing activities: Exploration, development, and other capital expenditures — (1,577 ) (301,603 ) (69,740 ) — (372,920 ) Cash paid for in acquisitions — — (32,916 ) — — (32,916 ) Proceeds from sales of property 5,369 5,369 Investments in subsidiaries — (1,119,219 ) — — 1,119,219 — Distributions from subsidiaries — 1,203,194 — — (1,203,194 ) — Net cash provided by (used in) investing activities — 82,398 (329,150 ) (69,740 ) (83,975 ) (400,467 ) Cash flows from financing activities: Redemption of Senior Notes and other long-term debt — — (10,567 ) — — (10,567 ) Proceeds from Bank Credit Facility — 75,000 — — — 75,000 Repayment of Bank Credit Facility — (25,000 ) — — — (25,000 ) Deferred financing costs — (1,268 ) — — — (1,268 ) Other deferred payments — — (9,921 ) — — (9,921 ) Payments of capital lease — — (10,344 ) — — (10,344 ) Capital contributions 558 — 1,051,661 67,000 (1,119,219 ) — Employee stock transaction — — (326 ) — — (326 ) Distributions to subsidiary issuer — — (1,202,546 ) (648 ) 1,203,194 — Net cash provided by (used in) financing activities 558 48,732 (182,043 ) 66,352 83,975 17,574 Net increase (decrease) in cash, cash equivalents and restricted cash — 67,080 (98,748 ) (18,812 ) — (50,480 ) Cash, cash equivalents and restricted cash: Balance, beginning of period — 13,541 102,049 25,572 — 141,162 Balance, end of period $ — $ 80,621 $ 3,301 $ 6,760 $ — $ 90,682 TALOS ENERGY INC. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 (In thousands) (Unaudited) Talos Talos Issuers Guarantors Non- Guarantors Elimination Consolidated Cash flows from operating activities: Net cash provided by (used in) operating activities $ — $ (126,105 ) $ 269,841 $ (49 ) $ — $ 143,687 Cash flows from investing activities: Exploration, development, and other capital expenditures — (12,966 ) (159,368 ) (2,015 ) — (174,349 ) Cash acquired in acquisitions — — 278,409 — — 278,409 Investments in subsidiaries — (778,148 ) — — 778,148 — Distributions from subsidiaries — 1,097,505 (9 ) — (1,097,496 ) — Net cash provided by (used in) investing activities — 306,391 119,032 (2,015 ) (319,348 ) 104,060 Cash flows from financing activities: Redemption of Senior Notes and other long-term debt — (24,977 ) (174 ) — — (25,151 ) Proceeds from Bank Credit Facility — 319,000 — — — 319,000 Repayment of Bank Credit Facility — (54,000 ) — — — (54,000 ) Repayment of LLC Credit Facility — (403,000 ) — — — (403,000 ) Deferred financing costs — (16,990 ) — — — (16,990 ) Payments of capital lease — — (9,874 ) — — (9,874 ) Capital contributions — — 770,436 7,712 (778,148 ) — Distributions to subsidiaries — — (1,095,165 ) (2,331 ) 1,097,496 — Net cash provided by (used in) financing activities — (179,967 ) (334,777 ) 5,381 319,348 (190,015 ) Net increase in cash, cash equivalents and restricted cash — 319 54,096 3,317 — 57,732 Cash, cash equivalents and restricted cash: Balance, beginning of period — 22,315 9,048 2,070 — 33,433 Balance, end of period $ — $ 22,634 $ 63,144 $ 5,387 $ — $ 91,165 |
Formation and Basis of Presen_2
Formation and Basis of Presentation - Additional Information (Details) $ in Thousands | Nov. 21, 2017USD ($)shares | Sep. 30, 2019USD ($)Segment | Dec. 31, 2018USD ($) | Jan. 01, 2019USD ($) | May 10, 2018USD ($) |
Basis Of Presentation And Schedule Of Accounting Policy [Line Items] | |||||
Senior notes, outstading amount | $ 711,928 | $ 672,495 | |||
Number of reportable segment | Segment | 1 | ||||
Operating lease right-of-use asset | $ 8,082 | $ 7,300 | |||
Operating lease liability | $ 18,665 | $ 16,900 | |||
11.00% Second-Priority Senior Secured Notes – due April 2022 | |||||
Basis Of Presentation And Schedule Of Accounting Policy [Line Items] | |||||
Debt instrument interest rate | 11.00% | 11.00% | |||
Senior notes, maturity date | Apr. 3, 2022 | Apr. 3, 2022 | |||
Senior Notes | 9.75% Senior Notes | |||||
Basis Of Presentation And Schedule Of Accounting Policy [Line Items] | |||||
Proceeds from issuance of senior notes | $ 102,000 | ||||
Debt instrument interest rate | 9.75% | ||||
Shares issued on exchange agreement | shares | 2,874,049 | ||||
Senior Notes | 9.75% Senior Notes – due July 2022 | |||||
Basis Of Presentation And Schedule Of Accounting Policy [Line Items] | |||||
Senior notes, maturity date | Jul. 31, 2022 | ||||
Senior Notes | 11.00% Second-Priority Senior Secured Notes – due April 2022 | |||||
Basis Of Presentation And Schedule Of Accounting Policy [Line Items] | |||||
Debt instrument interest rate | 11.00% | 11.00% | |||
Senior notes, maturity date | Apr. 3, 2022 | ||||
Senior notes, outstading amount | $ 390,868 | $ 390,868 | |||
Debt instrument interest rate exchanged percentage | 11.00% | ||||
Senior Notes | 7.50% Senior Secured Notes due 2022 | |||||
Basis Of Presentation And Schedule Of Accounting Policy [Line Items] | |||||
Debt instrument interest rate | 7.50% | ||||
Proceeds from Issuance of senior secured notes in exchange of 11% senior secured notes | $ 137,400 | ||||
Senior notes, principal amount | $ 81,500 | ||||
Senior notes, outstading amount | $ 6,100 | ||||
Bridge Loans | 11.00% Bridge Loans | |||||
Basis Of Presentation And Schedule Of Accounting Policy [Line Items] | |||||
Debt instrument interest rate | 11.00% | ||||
Proceeds from issuance of bridge loans in exchange of 11% senior secured notes | $ 172,000 | ||||
Stone Energy Corporation | |||||
Basis Of Presentation And Schedule Of Accounting Policy [Line Items] | |||||
Closing date of merger agreement | May 10, 2018 | ||||
Stone Energy Corporation | 11.00% Second-Priority Senior Secured Notes – due April 2022 | |||||
Basis Of Presentation And Schedule Of Accounting Policy [Line Items] | |||||
Debt instrument interest rate | 11.00% | ||||
Senior notes, maturity date | Apr. 3, 2022 | ||||
Senior notes, principal amount | $ 390,900 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) $ in Thousands | Jan. 11, 2019 | Aug. 31, 2018 | May 10, 2018 |
Stone Energy Corporation Stockholders | Talos Energy Inc. | |||
Business Acquisition [Line Items] | |||
Percentage of voting interest acquired | 37.00% | ||
Talos Energy LLC Stakeholders | Talos Energy Inc. | |||
Business Acquisition [Line Items] | |||
Percentage of voting interest acquired | 63.00% | ||
Gunflint Acquisition | |||
Business Acquisition [Line Items] | |||
Percentage of voting interest acquired | 9.60% | ||
Purchase price | $ 29,600 | ||
Customary purchase price adjustments | $ 27,900 | ||
Whistler Energy II, LLC | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 52,600 | ||
Business acquisition purchase price net | 14,800 | ||
Available cash acquired | 37,800 | ||
Business combination cash collateral | 30,800 | ||
Business combination cash on hand for working capital | $ 7,000 | ||
Stone Energy Corporation | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 731,964 |
Acquisitions - Summary of Alloc
Acquisitions - Summary of Allocation of Purchase Price to Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jan. 11, 2019 | Aug. 31, 2018 | May 10, 2018 |
Gunflint Acquisition | |||
Business Acquisition [Line Items] | |||
Property and equipment | $ 28,912 | ||
Asset retirement obligations | (996) | ||
Allocated purchase price | $ 27,916 | ||
Whistler Energy II, LLC | |||
Business Acquisition [Line Items] | |||
Current assets | $ 45,337 | ||
Property and equipment | 35,344 | ||
Other long-term assets | 66 | ||
Current liabilities | (4,261) | ||
Other long-term liabilities | (23,862) | ||
Allocated purchase price | $ 52,624 | ||
Stone Energy Corporation | |||
Business Acquisition [Line Items] | |||
Current assets | $ 372,963 | ||
Property and equipment | 886,406 | ||
Other long-term assets | 19,494 | ||
Current liabilities | (132,846) | ||
Long-term debt | (235,416) | ||
Other long-term liabilities | (178,637) | ||
Allocated purchase price | $ 731,964 |
Acquisitions - Summary of All_2
Acquisitions - Summary of Allocation of Purchase Price to Assets Acquired and Liabilities Assumed (Parenthetical) (Details) - USD ($) $ in Millions | Aug. 31, 2018 | May 10, 2018 |
Whistler Energy II, LLC | ||
Business Acquisition [Line Items] | ||
Cash acquired | $ 37.8 | |
Whistler Energy II, LLC | Trade Accounts Receivable | ||
Business Acquisition [Line Items] | ||
Primary fair values of receivables acquired | $ 3.2 | |
Stone Energy Corporation | ||
Business Acquisition [Line Items] | ||
Cash acquired | $ 293 | |
Stone Energy Corporation | Trade Accounts Receivable | ||
Business Acquisition [Line Items] | ||
Primary fair values of receivables acquired | 43.3 | |
Stone Energy Corporation | Joint Interest Receivables | ||
Business Acquisition [Line Items] | ||
Primary fair values of receivables acquired | $ 3.5 |
Acquisitions - Summary of Purch
Acquisitions - Summary of Purchase Price (Details) - USD ($) $ / shares in Units, $ in Thousands | May 10, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | May 09, 2018 |
Business Acquisition [Line Items] | ||||
Common stock value | $ 542 | $ 542 | ||
Stone Energy Corporation | ||||
Business Acquisition [Line Items] | ||||
Stone common stock - issued and outstanding as of May 9, 2018 | 20,038,000 | |||
Stone common stock price | $ 35.49 | |||
Common stock value | $ 711,149 | |||
Stone common stock warrants - issued and outstanding as of May 9, 2018 | 3,528,000 | |||
Stone common stock warrants price | $ 5.90 | |||
Common stock warrants value | $ 20,815 | |||
Total purchase price | $ 731,964 |
Acquisitions - Summary of Reven
Acquisitions - Summary of Revenue and Net Income Attributable to Assets Acquired (Details) - Stone Energy Corporation - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Business Acquisition [Line Items] | ||||
Revenue | $ 97,213 | $ 134,989 | $ 313,335 | $ 204,298 |
Net income | $ 40,775 | $ 75,968 | $ 147,186 | $ 120,390 |
Acquisitions - Summary of Suppl
Acquisitions - Summary of Supplemental Proforma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Business Acquisition Pro Forma Information [Abstract] | ||
Revenue | $ 282,868 | $ 754,520 |
Net income (loss) | $ 20,566 | $ (30,645) |
Basic net income (loss) per common share | $ 0.38 | $ (0.71) |
Diluted net income (loss) per common share | $ 0.38 | $ (0.71) |
Property, Plant and Equipment -
Property, Plant and Equipment - Additional Information (Details) | Sep. 04, 2019 | May 22, 2019 | Dec. 21, 2018 | Sep. 30, 2018 | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)$ / bbl$ / Mcf | Sep. 30, 2018USD ($) | Sep. 04, 2015LeaseBlock |
Property, Plant and Equipment [Line Items] | |||||||||
Write-down of oil and natural gas properties | $ 1,417,000 | $ 13,778,000 | |||||||
Unproved properties, number of lease blocks awarded | LeaseBlock | 2 | ||||||||
Unproved properties, number of extension year | 2 years | ||||||||
Capitalized overhead costs | 7,400,000 | $ 8,700,000 | 21,400,000 | $ 16,200,000 | |||||
Block 2 | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Write-down of oil and natural gas properties | 1,400,000 | $ 13,800,000 | |||||||
Participating interest percentage | 25.00% | 5.00% | |||||||
Reduction in participating interests percentage upon option exercise | 0.00% | ||||||||
Block 31 | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Participating interest percentage | 25.00% | ||||||||
Hokchi Cross Assignment | Block 2 | Hokchi | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Participating interest percentage | 25.00% | 25.00% | |||||||
Hokchi Cross Assignment | Block 31 | Hokchi | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Participating interest percentage | 25.00% | ||||||||
US | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Unweighted average first day of month commodity price for crude oil for prior twelve months | $ / bbl | 63.88 | ||||||||
Unweighted average first day of month commodity price for natural gas for prior twelve months | $ / Mcf | 2.81 | ||||||||
Unweighted average first day of month commodity price for natural gas liquids for prior twelve months | $ / bbl | 24.26 | ||||||||
Write-down of oil and natural gas properties | $ 0 | $ 0 | $ 0 | $ 0 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Schedule of Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Oil And Gas Property [Abstract] | |||||
Asset retirement obligations | $ 382,817 | ||||
Fair value of asset retirement obligations assumed | 5,047 | ||||
Obligations settled | (54,406) | ||||
Fair value of asset retirement obligations divested | (5,450) | ||||
Accretion expense | $ 7,316 | $ 10,162 | 26,868 | $ 24,414 | |
Obligations incurred | 4,111 | ||||
Changes in estimate | 26,225 | ||||
Asset retirement obligations | 385,212 | 385,212 | |||
Current portion of asset retirement obligations | 63,404 | 63,404 | $ 68,965 | ||
Long-term portion | $ 321,808 | $ 321,808 | $ 313,852 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Aug. 02, 2016 |
Leases [Line Items] | ||||
Capital lease obligations | $ 93,600 | $ 124,300 | ||
Operating lease liability | $ 18,665 | $ 16,900 | ||
Other Current Liabilities | ||||
Leases [Line Items] | ||||
Capital lease obligations | 14,100 | |||
Other Long-term Liabilities | ||||
Leases [Line Items] | ||||
Capital lease obligations | $ 79,500 | |||
Seven Year Lease Agreement | ||||
Leases [Line Items] | ||||
Lease agreement term | 7 years | |||
Agreed to pay annual fixed demand charge, year one | $ 49,000 | |||
Agreed to pay annual fixed demand charge, year two | 49,000 | |||
Agreed to pay annual fixed demand charge, year five and thereafter | $ 45,000 |
Leases - Components of Lease Co
Leases - Components of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | ||
Leases [Abstract] | |||
Finance lease cost - interest on lease liabilities | [1] | $ 4,728 | $ 14,589 |
Operating lease cost, excluding short-term leases | [2] | 822 | 2,348 |
Short-term lease cost | [3] | 17,658 | 81,897 |
Variable lease cost | [4] | 3 | 8 |
Total lease cost | $ 23,211 | $ 98,842 | |
[1] | The HP-I is utilized in the Company’s oil and natural gas development activities and the right-of-use asset was capitalized and included in proved property and depleted as part of the full cost pool. Once items are included in the full cost pool, they are indistinguishable from other proved properties. The capitalized costs within the full cost pool are amortized over the life of the total proved reserved using the unit-of-production method, computed quarterly. | ||
[2] | Operating lease cost reflect a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. | ||
[3] | Short-term lease costs are reported at gross amounts and primarily represent costs incurred for drilling rigs, most of which are short-term contracts not recognized as a right-of-use asset and lease liability on the balance sheet. | ||
[4] | Variable lease costs primarily represent differences between minimum payment obligations and actual operating charges incurred by the Company related to its long-term leases. |
Leases - Schedule of Right-of-U
Leases - Schedule of Right-of-Use Asset and Liability, Adjusted for Initial Direct Costs and Incentives (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | |
Operating leases: | |||
Operating lease assets | $ 8,082 | $ 7,300 | |
Current portion of operating leases | $ 1,416 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OperatingLeaseLiabilityCurrent | ||
Operating lease liabilities | $ 17,249 | ||
Total operating lease liabilities | 18,665 | $ 16,900 | |
Finance leases: | |||
Proved property | [1] | 124,299 | |
Other current liabilities | $ 16,578 | ||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | ||
Other long-term liabilities | $ 66,746 | ||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | ||
Total finance lease liabilities | $ 83,324 | ||
[1] | The HP-I is utilized in the Company’s oil and natural gas development activities and the right-of-use asset was capitalized and included in proved property and depleted as part of the full cost pool. Once items are included in the full cost pool, they are indistinguishable from other proved properties. The capitalized costs within the full cost pool are amortized over the life of the total proved reserves using the unit-of-production method, computed quarterly. |
Leases - Minimum Future Commitm
Leases - Minimum Future Commitments by leases (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Operating Leases, 2019 (excluding the nine months ended September 30, 2019) | $ 453 | |
Operating Leases, 2020 | 2,746 | |
Operating Leases, 2021 | 4,079 | |
Operating Leases, 2022 | 4,302 | |
Operating Leases, 2023 | 4,237 | |
Operating Leases, Thereafter | 19,105 | |
Operating Leases, Total lease payments | 34,922 | |
Operating Leases, Imputed interest | (16,257) | |
Operating Leases | 18,665 | $ 16,900 |
Finance Leases, 2019 (excluding the nine months ended September 30, 2019) | 8,314 | |
Finance Leases, 2020 | 33,257 | |
Finance Leases, 2021 | 33,257 | |
Finance Leases, 2022 | 33,257 | |
Finance Leases, 2023 | 13,858 | |
Finance Leases, Total lease payments | 121,943 | |
Finance Leases, Imputed interest | (38,619) | |
Finance Leases | $ 83,324 |
Leases - Schedule of Weighted A
Leases - Schedule of Weighted Average Remaining Lease Term and Discount Rate (Details) | Sep. 30, 2019 |
Weighted average remaining lease term: | |
Operating leases | 9 years |
Finance leases | 4 years |
Weighted average discount rate: | |
Operating leases | 10.20% |
Finance leases | 21.90% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Paid For Amounts Included In Measurement Of Lease Liabilities [Abstract] | ||
Operating cash outflow from finance leases | $ 14,589 | |
Financing cash outflow from finance leases | 10,344 | $ 9,874 |
Operating cash outflow from operating leases | 1,358 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 2,225 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | |
Oil and Natural Gas Derivatives | |||
Debt Instrument [Line Items] | |||
Carrying Amount | $ 46,296 | $ 74,923 | |
Fair Value | 46,296 | 74,923 | |
11.00% Second-Priority Senior Secured Notes – due April 2022 | |||
Debt Instrument [Line Items] | |||
Carrying Amount | [1] | 383,186 | 381,229 |
Fair Value | [1] | 398,685 | 362,168 |
7.50% Senior Secured Notes – due May 2022 | |||
Debt Instrument [Line Items] | |||
Carrying Amount | 6,060 | 6,060 | |
Fair Value | 5,272 | 5,151 | |
Bank Credit Facility – due May 2022 | |||
Debt Instrument [Line Items] | |||
Carrying Amount | [1] | 307,946 | 257,448 |
Fair Value | [1] | $ 315,000 | $ 265,000 |
[1] |
Financial Instruments - Sched_2
Financial Instruments - Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments (Parenthetical) (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Bank Credit Facility – due May 2022 | ||
Debt Instrument [Line Items] | ||
Senior notes, maturity date | May 10, 2022 | May 10, 2022 |
11.00% Second-Priority Senior Secured Notes – due April 2022 | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 11.00% | 11.00% |
Senior notes, maturity date | Apr. 3, 2022 | Apr. 3, 2022 |
7.50% Senior Secured Notes – due May 2022 | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 7.50% | 7.50% |
Senior notes, maturity date | May 31, 2022 | May 31, 2022 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019USD ($)counterparty | Dec. 31, 2018 | May 31, 2018USD ($) | May 10, 2018USD ($) | |
Investment Grade Credit Rating | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Number of counterparties | counterparty | 12 | |||
11.00% Second-Priority Senior Secured Notes – due April 2022 | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Debt instrument interest rate | 11.00% | 11.00% | ||
Senior notes, maturity date | Apr. 3, 2022 | Apr. 3, 2022 | ||
7.50% Senior Secured Notes – due May 2022 | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Debt instrument interest rate | 7.50% | 7.50% | ||
Senior notes, maturity date | May 31, 2022 | May 31, 2022 | ||
Senior notes, principal amount | $ 6,100,000 | |||
New Bank Credit Facility | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Senior notes, maturity date | May 10, 2022 | |||
Credit facility, maximum borrowing capacity | $ 600,000,000 | |||
Number of counterparties | counterparty | 10 | |||
Stone Energy Corporation | 11.00% Second-Priority Senior Secured Notes – due April 2022 | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Debt instrument interest rate | 11.00% | |||
Senior notes, maturity date | Apr. 3, 2022 | |||
Senior notes, principal amount | $ 390,900,000 | |||
Stone Energy Corporation | 7.50% Senior Secured Notes – due May 2022 | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Debt instrument interest rate | 7.50% | |||
Senior notes, maturity date | May 31, 2022 | |||
Senior notes, principal amount | $ 6,100,000 |
Financial Instruments - Sched_3
Financial Instruments - Schedule of Impact that Derivatives not Qualifying as Hedging Instruments in Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||||
Net cash received (paid) on settled derivative instruments | $ 5,360 | $ (40,746) | $ (7,202) | $ (94,802) |
Unrealized gain (loss) | 38,400 | (12,584) | (28,627) | (101,680) |
Price risk management activities income (expense) | $ 43,760 | $ (53,330) | $ (35,829) | $ (196,482) |
Financial Instruments - Sched_4
Financial Instruments - Schedule of Contracted Volumes and Weighted Average Prices and will Receive Under Derivative Contracts (Details) | 9 Months Ended |
Sep. 30, 2019MMBTU$ / bbl$ / MMBTUbbl | |
October 2019 - December 2019 | NYMEX | Henry Hub | Swap | |
Derivative [Line Items] | |
Instrument Type | Swap |
Average Daily Volumes | MMBTU | 37,475 |
Weighted Average Swap Price | $ / MMBTU | 2.92 |
January 2020 - December 2020 | NYMEX | Henry Hub | Swap | |
Derivative [Line Items] | |
Instrument Type | Swap |
Average Daily Volumes | MMBTU | 16,216 |
Weighted Average Swap Price | $ / MMBTU | 2.78 |
Crude Oil | WTI | October 2019 - December 2019 | Swap | |
Derivative [Line Items] | |
Instrument Type | Swap |
Average Daily Volumes | bbl | 29,468 |
Weighted Average Swap Price | 56.04 |
Crude Oil | WTI | January 2020 - December 2020 | Swap | |
Derivative [Line Items] | |
Instrument Type | Swap |
Average Daily Volumes | bbl | 13,492 |
Weighted Average Swap Price | 56.13 |
Crude Oil | WTI | January 2020 - December 2020 | Costless Collars | |
Derivative [Line Items] | |
Instrument Type | Costless collars |
Average Daily Volumes | bbl | 7,481 |
Weighted Average Put Price | 55 |
Weighted Average Call Price | 64.23 |
Financial Instruments - Summary
Financial Instruments - Summary of Additional Information Related to Financial Instruments Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Oil And Natural Gas Swaps | ||
Liabilities: | ||
Total net asset | $ 46,296 | $ 74,923 |
Fair Value on Recurring Basis | ||
Liabilities: | ||
Total net asset | 46,296 | 74,923 |
Fair Value on Recurring Basis | Oil And Natural Gas Swaps | ||
Assets: | ||
Oil and natural gas derivatives | 50,878 | 75,473 |
Liabilities: | ||
Oil and natural gas derivatives | (4,582) | (550) |
Fair Value on Recurring Basis | Level 2 | ||
Liabilities: | ||
Total net asset | 46,296 | 74,923 |
Fair Value on Recurring Basis | Level 2 | Oil And Natural Gas Swaps | ||
Assets: | ||
Oil and natural gas derivatives | 50,878 | 75,473 |
Liabilities: | ||
Oil and natural gas derivatives | $ (4,582) | $ (550) |
Financial Instruments - Sched_5
Financial Instruments - Schedule of Fair Value of Derivative Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Price Risk Derivatives [Line Items] | ||
Current, Assets | $ 43,058 | $ 75,473 |
Non-current, Assets | 7,820 | |
Current, Liabilities | 3,832 | 550 |
Non-current, Liabilities | 750 | |
Oil and Natural Gas Derivatives | ||
Price Risk Derivatives [Line Items] | ||
Current, Assets | 43,058 | 75,473 |
Non-current, Assets | 7,820 | |
Assets | 50,878 | 75,473 |
Current, Liabilities | 3,832 | 550 |
Non-current, Liabilities | 750 | |
Liabilities | $ 4,582 | $ 550 |
Debt - Summary of Detail Compri
Debt - Summary of Detail Comprising Debt and Related Book Values (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Total debt, before discount and deferred financing cost | $ 711,928,000 | $ 672,495,000 |
Discount and deferred financing cost | (14,736,000) | (17,191,000) |
Total debt, net of discount and deferred financing cost | 697,192,000 | 655,304,000 |
Less: current portion of long-term debt | (443,000) | |
Long-term debt, net of discount and deferred financing costs | 697,192,000 | 654,861,000 |
4.20% Building Loan - due November 2030 | ||
Debt Instrument [Line Items] | ||
Total debt, before discount and deferred financing cost | 0 | |
Senior Notes | 11.00% Second-Priority Senior Secured Notes – due April 2022 | ||
Debt Instrument [Line Items] | ||
Total debt, before discount and deferred financing cost | 390,868,000 | 390,868,000 |
Senior Notes | 7.50% Senior Secured Notes – due May 2022 | ||
Debt Instrument [Line Items] | ||
Total debt, before discount and deferred financing cost | 6,060,000 | 6,060,000 |
Bank Credit Facility | Bank Credit Facility – due May 2022 | ||
Debt Instrument [Line Items] | ||
Total debt, before discount and deferred financing cost | $ 315,000,000 | 265,000,000 |
Building Loan | 4.20% Building Loan - due November 2030 | ||
Debt Instrument [Line Items] | ||
Total debt, before discount and deferred financing cost | $ 10,567,000 |
Debt - Summary of Detail Comp_2
Debt - Summary of Detail Comprising Debt and Related Book Values (Parenthetical) (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | Nov. 21, 2017 | |
11.00% Second-Priority Senior Secured Notes – due April 2022 | |||
Debt Instrument [Line Items] | |||
Debt instrument interest rate | 11.00% | 11.00% | |
Senior notes, maturity date | Apr. 3, 2022 | Apr. 3, 2022 | |
7.50% Senior Secured Notes – due May 2022 | |||
Debt Instrument [Line Items] | |||
Debt instrument interest rate | 7.50% | 7.50% | |
Senior notes, maturity date | May 31, 2022 | May 31, 2022 | |
Bank Credit Facility – due May 2022 | |||
Debt Instrument [Line Items] | |||
Debt instrument interest rate | 11.00% | ||
Senior notes, maturity date | May 10, 2022 | ||
4.20% Building Loan - due November 2030 | |||
Debt Instrument [Line Items] | |||
Debt instrument interest rate | 4.20% | ||
Senior notes, maturity date | Nov. 20, 2030 | ||
Senior Notes | 11.00% Second-Priority Senior Secured Notes – due April 2022 | |||
Debt Instrument [Line Items] | |||
Debt instrument interest rate | 11.00% | 11.00% | |
Senior notes, maturity date | Apr. 3, 2022 | ||
Senior Notes | 7.50% Senior Secured Notes – due May 2022 | |||
Debt Instrument [Line Items] | |||
Debt instrument interest rate | 7.50% | ||
Senior notes, maturity date | May 31, 2022 | ||
Bank Credit Facility | Bank Credit Facility – due May 2022 | |||
Debt Instrument [Line Items] | |||
Senior notes, maturity date | May 10, 2022 | ||
Building Loan | 4.20% Building Loan - due November 2030 | |||
Debt Instrument [Line Items] | |||
Debt instrument interest rate | 4.20% | ||
Senior notes, maturity date | Nov. 30, 2030 |
Debt - Additional information (
Debt - Additional information (Details) | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Jul. 03, 2019USD ($)Lender | Jul. 02, 2019USD ($) | May 10, 2018USD ($) | Nov. 21, 2017 | |
Debt Instrument [Line Items] | ||||||
Debt instrument redemption, description | The indenture governing the 11.00% Senior Secured Notes applies certain limitations on the Company’s ability and the ability of its subsidiaries to, among other things, (i) incur additional indebtedness or issue certain preferred shares; (ii) pay dividends and make certain other restricted payments; (iii) create restrictions on the payment of dividends or other distributions to the Company from its restricted subsidiaries; (iv) create liens on certain assets to secure debt; (v) make certain investments; (vi) engage in sales of assets and subsidiary stock; (vii) transfer all or substantially all of its assets or enter into merger or consolidation transactions; and (viii) engage in transactions with affiliates. The 11.00% Senior Secured Notes contain customary quarterly and annual reporting, financial and administrative covenants. The Company was in compliance with all debt covenants at September 30, 2019. | |||||
Debt amount outstanding | $ 711,928,000 | $ 672,495,000 | ||||
11.00% Second-Priority Senior Secured Notes – due April 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument maturity date | Apr. 3, 2022 | Apr. 3, 2022 | ||||
Debt instrument, interest rate, stated percentage | 11.00% | 11.00% | ||||
7.50% Senior Secured Notes – due May 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument maturity date | May 31, 2022 | May 31, 2022 | ||||
Debt instrument frequency of periodic payment | semi-annually | |||||
Debt instrument payment terms | semi-annually each May 31 and November 30 | |||||
Debt instrument, face amount | $ 6,100,000 | |||||
Debt instrument, interest rate, stated percentage | 7.50% | 7.50% | ||||
7.50% Senior Secured Notes – due May 2022 | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, redemption price, percentage | 105.625% | |||||
7.50% Senior Secured Notes – due May 2022 | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, redemption price, percentage | 100.00% | |||||
Bank Credit Facility – due May 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument maturity date | May 10, 2022 | |||||
Debt instrument, face amount | $ 25,000,000 | |||||
Debt instrument, interest rate, stated percentage | 11.00% | |||||
Credit facility, maximum borrowing capacity | $ 850,000,000 | $ 850,000,000 | $ 600,000,000 | |||
Bank credit facility, description | The Bank Credit Facility matures on May 10, 2022, provided that the Bank Credit Facility mandates a springing maturity that is 120 days prior to May 10, 2022, if greater than $25.0 million of the 11.00% Senior Secured Notes or any permitted refinancing indebtedness in resect thereof is outstanding on such date. | |||||
Debt instrument springing maturity period | 120 days | |||||
Commitment fee percentage | 0.50% | |||||
Line of credit facility current commitment | $ 850,000,000 | $ 850,000,000 | $ 600,000,000 | |||
Number of additional lenders | Lender | 3 | |||||
Undrawn commitment under credit facility | 521,400,000 | |||||
Letters of credit outstanding amount | 13,600,000 | |||||
Line of credit outstanding amount | 315,000,000 | |||||
Bank Credit Facility – due May 2022 | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility, maximum borrowing capacity | $ 200,000,000 | |||||
Bank Credit Facility – due May 2022 | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Debt covenant current ratio | 100.00% | |||||
Bank Credit Facility – due May 2022 | Maximum | London Interbank Offered Rate | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 3.75% | |||||
Bank Credit Facility – due May 2022 | Maximum | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 2.75% | |||||
Bank Credit Facility – due May 2022 | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Debt covenant current ratio | 300.00% | |||||
Bank Credit Facility – due May 2022 | Minimum | London Interbank Offered Rate | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 2.75% | |||||
Bank Credit Facility – due May 2022 | Minimum | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |||||
4.20% Building Loan - due November 2030 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument maturity date | Nov. 20, 2030 | |||||
Debt instrument frequency of periodic payment | 180 equal monthly installments | |||||
Debt instrument, interest rate, stated percentage | 4.20% | |||||
Debt instrument, periodic payment | $ 100,000 | |||||
Repayment and discharge of aggregate remaining principal plus accrued interest | 10,400 | |||||
Debt amount outstanding | $ 0 | |||||
Senior Notes | 11.00% Second-Priority Senior Secured Notes – due April 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, redemption price, percentage | 105.50% | |||||
Debt instrument maturity date | Apr. 3, 2022 | |||||
Debt instrument frequency of periodic payment | semi-annually | |||||
Debt instrument payment terms | semi-annually each April 15 and October 15 | |||||
Debt instrument, interest rate, stated percentage | 11.00% | 11.00% | ||||
Debt amount outstanding | $ 390,868,000 | $ 390,868,000 | ||||
Senior Notes | 11.00% Second-Priority Senior Secured Notes – due April 2022 | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, redemption price, percentage | 102.75% | |||||
Senior Notes | 11.00% Second-Priority Senior Secured Notes – due April 2022 | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, redemption price, percentage | 100.00% | |||||
Senior Notes | 7.50% Senior Secured Notes – due May 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument maturity date | May 31, 2022 | |||||
Debt instrument, interest rate, stated percentage | 7.50% | |||||
Debt amount outstanding | $ 6,060,000 | $ 6,060,000 |
Employee Benefits Plans and S_3
Employee Benefits Plans and Share Based Compensation - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restricted Stock Units | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share based compensation grants | 732,771 | |||
Performance Stock Units | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share based compensation grants | 218,060 | |||
Share-based compensation grant date fair value | $ 7,400,000 | $ 7,400,000 | ||
Severance Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Termination period | 12 months | |||
Outstanding obligations related to plans | 0 | $ 0 | ||
Plan terminated month and year | 2019-07 | |||
Severance Plan | General and Administrative Expense | Stone Energy Corporation | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Severance expenses | $ 200,000 | $ 7,500,000 | ||
Long Term Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-Based Compensation authorized to grant | 5,415,576 | 5,415,576 | ||
Long Term Incentive Plan | Restricted Stock Units | Employees and Non-Employees | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share based compensation grants | 732,771 | |||
Long Term Incentive Plan | Performance Stock Units | Employees | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share based compensation grants | 218,060 |
Employee Benefits Plans and S_4
Employee Benefits Plans and Share-Based Compensation - Schedule of Restricted Stock and Performance Share Units Activity (Details) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Restricted Stock Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unvested restricted stock units and award begining of the period | shares | 138,704 |
Unvested restricted stock units and award, granted | shares | 732,771 |
Unvested restricted stock units and award, vested | shares | (68,992) |
Unvested restricted stock units and award, forfeited | shares | (48,518) |
Unvested restricted stock units and award, end of the period | shares | 753,965 |
Unvested weighted average grant date fair value, begining of the period | $ / shares | $ 33.85 |
Unvested weighted average grant date fair value, granted | $ / shares | 24.39 |
Unvested weighted average grant date fair value, vested | $ / shares | 33.72 |
Unvested weighted average grant date fair value, forfeited | $ / shares | 25.43 |
Unvested weighted average grante date fair value, end of the period | $ / shares | $ 25.21 |
Performance Stock Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unvested restricted stock units and award begining of the period | shares | 231,542 |
Unvested restricted stock units and award, granted | shares | 218,060 |
Unvested restricted stock units and award, forfeited | shares | (26,358) |
Unvested restricted stock units and award, end of the period | shares | 423,244 |
Unvested weighted average grant date fair value, begining of the period | $ / shares | $ 44.47 |
Unvested weighted average grant date fair value, granted | $ / shares | 33.96 |
Unvested weighted average grant date fair value, forfeited | $ / shares | 39.72 |
Unvested weighted average grante date fair value, end of the period | $ / shares | $ 39.35 |
Employee Benefits Plans and S_5
Employee Benefits Plans and Share-Based Compensation - Summary of Assumptions Used to Calculate the Grant Date Fair Value (Details) - Performance Stock Units - Simulation | May 16, 2019 | Mar. 05, 2019 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of simulations | 100,000 | 100,000 |
Expected term (in years) | 2 years 7 months 6 days | 2 years 9 months 18 days |
Expected volatility | 44.80% | 46.90% |
Risk-free interest rate | 2.10% | 2.50% |
Employee Benefits Plans and S_6
Employee Benefits Plans and Share Based Compensation - Summary of Share Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||
Share based compensation | $ 3,591 | $ 923 | $ 9,568 | $ 5,081 |
Capitalization | (1,647) | (353) | (4,404) | (2,952) |
Share based compensation, net capitalization | $ 1,944 | $ 570 | $ 5,164 | $ 2,129 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 790 | $ 428 | ||
Effective tax rate | 1.00% | 0.00% | 0.70% | 0.00% |
Federal statutory rate | 21.00% | 21.00% | 21.00% | 21.00% |
Income (Loss) Per Share - Summa
Income (Loss) Per Share - Summary of Computation of Basic and Diluted Earning Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ 73,297 | $ 13,109 | $ 58,425 | $ (84,746) |
Weighted average common shares outstanding — basic | 54,200 | 54,156 | 54,178 | 43,329 |
Dilutive effect of securities | 230 | 8 | 186 | |
Weighted average common shares outstanding — diluted | 54,430 | 54,164 | 54,364 | 43,329 |
Basic | $ 1.35 | $ 0.24 | $ 1.08 | $ (1.96) |
Diluted | $ 1.35 | $ 0.24 | $ 1.07 | $ (1.96) |
Anti-dilutive potentially issuable securities excluded from diluted common shares | 4,250 | 3,538 | 4,282 | 3,891 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | Aug. 31, 2018 | Aug. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Related Party Transaction [Line Items] | ||||||
Net of cash acquired | $ 32,916,000 | $ (278,409,000) | ||||
Equity Registration Rights Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Fees incurred in conjunction with agreement | 700,000 | |||||
Vinson & Elkins L.L.P. | ||||||
Related Party Transaction [Line Items] | ||||||
Legal fees incurred | $ 300,000 | $ 5,000,000 | 1,900,000 | 5,300,000 | ||
Legal fees payable | 600,000 | 600,000 | ||||
Apollo and Riverstone Funds | Service Fee Agreement | Shareholder Service | ||||||
Related Party Transaction [Line Items] | ||||||
Service fee | 0 | $ 500,000 | ||||
Apollo and Riverstone Funds | Service Fee Agreement | Shareholder Service | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Service fee | 500,000 | |||||
Whistler Energy II, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Available cash acquired | $ 37,800,000 | |||||
Whistler Energy II, LLC | Apollo Funds | Whistler Energy II Holdco, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Business acquisition, date of acquisition agreement | Aug. 31, 2018 | |||||
Cash acquired | $ 52,600,000 | |||||
Net of cash acquired | 14,800,000 | |||||
Available cash acquired | $ 37,800,000 | |||||
Primary fair values of receivables acquired | $ 1,100,000 | $ 1,100,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | Sep. 30, 2019USD ($) |
Bank Credit Facility | Letter of Credit | |
Loss Contingencies [Line Items] | |
Credit facility | $ 13.6 |
Production Sharing Contracts | Mexico | |
Loss Contingencies [Line Items] | |
Performance obligations | $ 637.3 |
Condensed Consolidating Finan_3
Condensed Consolidating Financial Information - Additional Information (Details) | 9 Months Ended | |
Sep. 30, 2019 | May 10, 2018 | |
Percentage of equity interest | 100.00% | |
11.00% Second-Priority Senior Secured Notes | ||
Debt instrument interest rate | 11.00% |
Condensed Consolidating Finan_4
Condensed Consolidating Financial Information - Summary of Condensed Consolidating Financial Position (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||||||
Cash and cash equivalents | $ 90,682 | $ 139,914 | ||||
Restricted cash | 1,248 | |||||
Accounts receivable, net | ||||||
Trade, net | 108,354 | 103,025 | ||||
Joint interest, net | 17,562 | 20,244 | ||||
Other | 31,768 | 19,686 | ||||
Assets from price risk management activities | 43,058 | 75,473 | ||||
Prepaid assets | 39,378 | 38,911 | ||||
Income tax receivable | 10,701 | |||||
Other current assets | 1,952 | 7,644 | ||||
Total current assets | 332,754 | 416,846 | ||||
Property and equipment: | ||||||
Proved properties | 4,012,100 | 3,629,430 | ||||
Unproved properties, not subject to amortization | 178,174 | 108,209 | ||||
Other property and equipment | 28,690 | 33,191 | ||||
Total property and equipment | 4,218,964 | 3,770,830 | ||||
Accumulated depreciation, depletion and amortization | (1,967,610) | (1,719,609) | ||||
Total property and equipment, net | 2,251,354 | 2,051,221 | ||||
Other long-term assets: | ||||||
Assets from price risk management activities | 7,820 | |||||
Other well equipment inventory | 9,251 | 9,224 | ||||
Leased assets | 8,082 | |||||
Other assets | 2,624 | 2,695 | ||||
Total assets | 2,611,885 | 2,479,986 | ||||
Current liabilities: | ||||||
Accounts payable | 95,737 | 51,019 | ||||
Accrued liabilities | 169,152 | 188,650 | ||||
Accrued royalties | 37,763 | 38,520 | ||||
Current portion of long-term debt | 443 | |||||
Current portion of asset retirement obligations | 63,404 | 68,965 | ||||
Liabilities from price risk management activities | 3,832 | 550 | ||||
Accrued interest payable | 21,058 | 10,200 | ||||
Leases liabilities | 1,416 | |||||
Other current liabilities | 18,993 | 22,071 | ||||
Total current liabilities | 411,355 | 380,418 | ||||
Long-term debt, net of discount and deferred financing costs | 697,192 | 654,861 | ||||
Asset retirement obligations | 321,808 | 313,852 | ||||
Liabilities from price risk management activities | 750 | |||||
Long-term leased liabilities | 17,249 | |||||
Other long-term liabilities | 88,707 | 123,359 | ||||
Total liabilities | 1,537,061 | 1,472,490 | ||||
Commitments and Contingencies | ||||||
Stockholders' equity | 1,074,824 | $ 998,041 | 1,007,496 | $ 699,764 | $ 685,845 | $ (54,087) |
Total liabilities and stockholders' equity | 2,611,885 | 2,479,986 | ||||
Talos | ||||||
Other long-term assets: | ||||||
Investments in subsidiaries | 1,078,993 | 1,011,359 | ||||
Other assets | 54 | |||||
Total assets | 1,079,047 | 1,011,359 | ||||
Current liabilities: | ||||||
Accounts payable | 279 | 144 | ||||
Total current liabilities | 279 | 144 | ||||
Other long-term liabilities | 3,944 | 3,719 | ||||
Total liabilities | 4,223 | 3,863 | ||||
Commitments and Contingencies | ||||||
Stockholders' equity | 1,074,824 | 1,007,496 | ||||
Total liabilities and stockholders' equity | 1,079,047 | 1,011,359 | ||||
Talos Issuers | ||||||
Current assets: | ||||||
Cash and cash equivalents | 80,621 | 13,541 | ||||
Accounts receivable, net | ||||||
Other | 1,347 | 3,100 | ||||
Assets from price risk management activities | 43,058 | 75,473 | ||||
Prepaid assets | 1,993 | 1,225 | ||||
Total current assets | 127,019 | 93,339 | ||||
Property and equipment: | ||||||
Other property and equipment | 21,999 | 20,670 | ||||
Total property and equipment | 21,999 | 20,670 | ||||
Accumulated depreciation, depletion and amortization | (10,302) | (8,310) | ||||
Total property and equipment, net | 11,697 | 12,360 | ||||
Other long-term assets: | ||||||
Assets from price risk management activities | 7,820 | |||||
Leased assets | 3,162 | |||||
Investments in subsidiaries | 1,663,746 | 1,560,922 | ||||
Other assets | 364 | 364 | ||||
Total assets | 1,813,808 | 1,666,985 | ||||
Current liabilities: | ||||||
Accounts payable | 2,758 | 1,242 | ||||
Accrued liabilities | 1,787 | 4,995 | ||||
Liabilities from price risk management activities | 3,832 | 550 | ||||
Accrued interest payable | 20,906 | 10,162 | ||||
Leases liabilities | 70 | |||||
Total current liabilities | 29,353 | 16,949 | ||||
Long-term debt, net of discount and deferred financing costs | 691,132 | 638,677 | ||||
Liabilities from price risk management activities | 750 | |||||
Long-term leased liabilities | 13,580 | |||||
Total liabilities | 734,815 | 655,626 | ||||
Commitments and Contingencies | ||||||
Stockholders' equity | 1,078,993 | 1,011,359 | ||||
Total liabilities and stockholders' equity | 1,813,808 | 1,666,985 | ||||
Guarantors | ||||||
Current assets: | ||||||
Cash and cash equivalents | 3,301 | 100,801 | ||||
Restricted cash | 1,248 | |||||
Accounts receivable, net | ||||||
Trade, net | 108,354 | 103,025 | ||||
Joint interest, net | 17,124 | 15,870 | ||||
Other | 9,156 | 9,566 | ||||
Prepaid assets | 37,358 | 37,639 | ||||
Income tax receivable | 10,701 | |||||
Other current assets | 1,952 | 7,644 | ||||
Total current assets | 177,245 | 286,494 | ||||
Property and equipment: | ||||||
Proved properties | 4,012,100 | 3,629,430 | ||||
Unproved properties, not subject to amortization | 72,342 | 63,104 | ||||
Other property and equipment | 6,484 | 12,440 | ||||
Total property and equipment | 4,090,926 | 3,704,974 | ||||
Accumulated depreciation, depletion and amortization | (1,957,269) | (1,711,288) | ||||
Total property and equipment, net | 2,133,657 | 1,993,686 | ||||
Other long-term assets: | ||||||
Other well equipment inventory | 9,251 | 9,224 | ||||
Leased assets | 3,412 | |||||
Other assets | 2,140 | 2,258 | ||||
Total assets | 2,325,705 | 2,291,662 | ||||
Current liabilities: | ||||||
Accounts payable | 89,617 | 42,736 | ||||
Accrued liabilities | 143,112 | 159,491 | ||||
Accrued royalties | 37,763 | 38,520 | ||||
Current portion of long-term debt | 443 | |||||
Current portion of asset retirement obligations | 63,404 | 68,965 | ||||
Accrued interest payable | 152 | 38 | ||||
Leases liabilities | 798 | |||||
Other current liabilities | 18,993 | 22,071 | ||||
Total current liabilities | 353,839 | 332,264 | ||||
Long-term debt, net of discount and deferred financing costs | 6,060 | 16,184 | ||||
Asset retirement obligations | 321,808 | 313,852 | ||||
Long-term leased liabilities | 2,629 | |||||
Other long-term liabilities | 84,620 | 119,432 | ||||
Total liabilities | 768,956 | 781,732 | ||||
Commitments and Contingencies | ||||||
Stockholders' equity | 1,556,749 | 1,509,930 | ||||
Total liabilities and stockholders' equity | 2,325,705 | 2,291,662 | ||||
Non-Guarantors | ||||||
Current assets: | ||||||
Cash and cash equivalents | 6,760 | 25,572 | ||||
Accounts receivable, net | ||||||
Joint interest, net | 438 | 4,374 | ||||
Other | 21,265 | 7,020 | ||||
Prepaid assets | 27 | 47 | ||||
Total current assets | 28,490 | 37,013 | ||||
Property and equipment: | ||||||
Unproved properties, not subject to amortization | 105,832 | 45,105 | ||||
Other property and equipment | 207 | 81 | ||||
Total property and equipment | 106,039 | 45,186 | ||||
Accumulated depreciation, depletion and amortization | (39) | (11) | ||||
Total property and equipment, net | 106,000 | 45,175 | ||||
Other long-term assets: | ||||||
Leased assets | 1,508 | |||||
Other assets | 66 | 73 | ||||
Total assets | 136,064 | 82,261 | ||||
Current liabilities: | ||||||
Accounts payable | 3,083 | 6,897 | ||||
Accrued liabilities | 24,253 | 24,164 | ||||
Leases liabilities | 548 | |||||
Total current liabilities | 27,884 | 31,061 | ||||
Long-term leased liabilities | 1,040 | |||||
Other long-term liabilities | 143 | 208 | ||||
Total liabilities | 29,067 | 31,269 | ||||
Commitments and Contingencies | ||||||
Stockholders' equity | 106,997 | 50,992 | ||||
Total liabilities and stockholders' equity | 136,064 | 82,261 | ||||
Elimination | ||||||
Other long-term assets: | ||||||
Investments in subsidiaries | (2,742,739) | (2,572,281) | ||||
Total assets | (2,742,739) | (2,572,281) | ||||
Current liabilities: | ||||||
Commitments and Contingencies | ||||||
Stockholders' equity | (2,742,739) | (2,572,281) | ||||
Total liabilities and stockholders' equity | $ (2,742,739) | $ (2,572,281) |
Condensed Consolidating Finan_5
Condensed Consolidating Financial Information - Summary of Condensed Consolidating Results Of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Total revenue | $ 228,857 | $ 282,868 | $ 694,380 | $ 632,624 |
Operating expenses: | ||||
Workover and maintenance expense | 14,210 | 25,084 | 49,525 | 49,703 |
Depreciation, depletion and amortization | 88,125 | 87,808 | 248,518 | 204,574 |
Write-down of oil and natural gas properties | 1,417 | 13,778 | ||
Accretion expense | 7,316 | 10,162 | 26,868 | 24,414 |
General and administrative expense | 17,321 | 21,660 | 53,795 | 61,120 |
Total operating expenses | 175,974 | 191,507 | 528,256 | 453,468 |
Operating income | 52,883 | 91,361 | 166,124 | 179,156 |
Interest expense | (23,123) | (24,837) | (73,273) | (66,257) |
Price risk management activities income (expense) | 43,760 | (53,330) | (35,829) | (196,482) |
Other income (expense) | 567 | (85) | 1,831 | (1,163) |
Income tax (expense) benefit | (790) | (428) | ||
Net income (loss) | 73,297 | 13,109 | 58,425 | (84,746) |
Oil and Gas Properties | ||||
Operating expenses: | ||||
Direct lease operating expense | 43,439 | 42,090 | 122,243 | 101,065 |
Insurance | 4,167 | 4,125 | 12,462 | 11,059 |
Production taxes | (21) | 578 | 1,067 | 1,533 |
Total lease operating expense | 47,585 | 46,793 | 135,772 | 113,657 |
Talos | ||||
Operating expenses: | ||||
General and administrative expense | 307 | 692 | ||
Total operating expenses | 307 | 692 | ||
Operating income | (307) | (692) | ||
Income tax (expense) benefit | (780) | (130) | ||
Equity earnings (loss) from subsidiaries | 74,384 | 13,109 | 59,247 | (84,746) |
Net income (loss) | 73,297 | 13,109 | 58,425 | (84,746) |
Talos Issuers | ||||
Operating expenses: | ||||
Depreciation, depletion and amortization | 678 | 455 | 1,992 | 1,180 |
General and administrative expense | 4,803 | 12,942 | 21,035 | 31,340 |
Total operating expenses | 5,481 | 13,397 | 23,027 | 32,520 |
Operating income | (5,481) | (13,397) | (23,027) | (32,520) |
Interest expense | (16,734) | (15,580) | (50,326) | (42,207) |
Price risk management activities income (expense) | 43,760 | (47,656) | (35,829) | (186,873) |
Other income (expense) | 491 | (356) | 678 | (1,564) |
Equity earnings (loss) from subsidiaries | 52,348 | 90,098 | 167,751 | 178,418 |
Net income (loss) | 74,384 | 13,109 | 59,247 | (84,746) |
Guarantors | ||||
Revenues: | ||||
Total revenue | 228,648 | 282,868 | 694,171 | 632,624 |
Operating expenses: | ||||
Workover and maintenance expense | 14,210 | 25,084 | 49,525 | 49,703 |
Depreciation, depletion and amortization | 87,435 | 87,352 | 246,499 | 203,391 |
Accretion expense | 7,316 | 10,162 | 26,868 | 24,414 |
General and administrative expense | 12,030 | 8,274 | 31,439 | 28,841 |
Total operating expenses | 168,576 | 177,665 | 490,103 | 420,006 |
Operating income | 60,072 | 105,203 | 204,068 | 212,618 |
Interest expense | (6,191) | (8,797) | (22,428) | (22,754) |
Price risk management activities income (expense) | (5,674) | (9,609) | ||
Other income (expense) | 6 | 310 | 1,242 | 395 |
Income tax (expense) benefit | 4 | (292) | ||
Net income (loss) | 53,891 | 91,042 | 182,590 | 180,650 |
Guarantors | Oil and Gas Properties | ||||
Operating expenses: | ||||
Direct lease operating expense | 43,439 | 42,090 | 122,243 | 101,065 |
Insurance | 4,167 | 4,125 | 12,462 | 11,059 |
Production taxes | (21) | 578 | 1,067 | 1,533 |
Total lease operating expense | 47,585 | 46,793 | 135,772 | 113,657 |
Non-Guarantors | ||||
Revenues: | ||||
Total revenue | 209 | 209 | ||
Operating expenses: | ||||
Depreciation, depletion and amortization | 12 | 1 | 27 | 3 |
Write-down of oil and natural gas properties | 1,417 | 13,778 | ||
General and administrative expense | 181 | 444 | 629 | 939 |
Total operating expenses | 1,610 | 445 | 14,434 | 942 |
Operating income | (1,401) | (445) | (14,225) | (942) |
Interest expense | (198) | (460) | (519) | (1,296) |
Other income (expense) | 70 | (39) | (89) | 6 |
Income tax (expense) benefit | (14) | (6) | ||
Net income (loss) | (1,543) | (944) | (14,839) | (2,232) |
Elimination | ||||
Operating expenses: | ||||
Equity earnings (loss) from subsidiaries | (126,732) | (103,207) | (226,998) | (93,672) |
Net income (loss) | (126,732) | (103,207) | (226,998) | (93,672) |
Oil Revenue | ||||
Revenues: | ||||
Revenue | 211,899 | 248,100 | 624,486 | 555,954 |
Oil Revenue | Guarantors | ||||
Revenues: | ||||
Revenue | 211,690 | 248,100 | 624,277 | 555,954 |
Oil Revenue | Non-Guarantors | ||||
Revenues: | ||||
Revenue | 209 | 209 | ||
Natural Gas Revenue | ||||
Revenues: | ||||
Revenue | 12,545 | 20,193 | 41,738 | 49,364 |
Natural Gas Revenue | Guarantors | ||||
Revenues: | ||||
Revenue | 12,545 | 20,193 | 41,738 | 49,364 |
NGL Revenue | ||||
Revenues: | ||||
Revenue | 3,384 | 14,575 | 15,095 | 27,306 |
NGL Revenue | Guarantors | ||||
Revenues: | ||||
Revenue | 3,384 | $ 14,575 | 15,095 | $ 27,306 |
Other Revenue | ||||
Revenues: | ||||
Revenue | 1,029 | 13,061 | ||
Other Revenue | Guarantors | ||||
Revenues: | ||||
Revenue | $ 1,029 | $ 13,061 |
Condensed Consolidating Finan_6
Condensed Consolidating Financial Information - Summary of Condensed Consolidating Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net cash provided by (used in) operating activities | $ 332,413 | $ 143,687 |
Cash flows from investing activities: | ||
Exploration, development, and other capital expenditures | (372,920) | (174,349) |
Cash (paid for) acquired in acquisitions | (32,916) | 278,409 |
Proceeds from sale of other property and equipment | 5,369 | |
Net cash provided by (used in) investing activities | (400,467) | 104,060 |
Cash flows from financing activities: | ||
Redemption of Senior Notes and other long-term debt | (10,567) | (25,151) |
Proceeds from Bank Credit Facility | 75,000 | 319,000 |
Repayment of Bank Credit Facility | (25,000) | (54,000) |
Deferred financing costs | (1,268) | (16,990) |
Other deferred payments | (9,921) | |
Payments of capital lease | (10,344) | (9,874) |
Employee stock transactions | (326) | |
Net cash provided by (used in) financing activities | 17,574 | (190,015) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (50,480) | 57,732 |
Cash, cash equivalents and restricted cash: | ||
Balance, beginning of period | 141,162 | 33,433 |
Balance, end of period | 90,682 | 91,165 |
LLC Bank Credit Facility | ||
Cash flows from financing activities: | ||
Repayment of Bank Credit Facility | (403,000) | |
Talos | ||
Cash flows from operating activities: | ||
Net cash provided by (used in) operating activities | (558) | |
Cash flows from financing activities: | ||
Capital contributions | 558 | |
Net cash provided by (used in) financing activities | 558 | |
Talos Issuers | ||
Cash flows from operating activities: | ||
Net cash provided by (used in) operating activities | (64,050) | (126,105) |
Cash flows from investing activities: | ||
Exploration, development, and other capital expenditures | (1,577) | (12,966) |
Investments in subsidiaries | (1,119,219) | (778,148) |
Distributions from subsidiaries | 1,203,194 | 1,097,505 |
Net cash provided by (used in) investing activities | 82,398 | 306,391 |
Cash flows from financing activities: | ||
Redemption of Senior Notes and other long-term debt | (24,977) | |
Proceeds from Bank Credit Facility | 75,000 | 319,000 |
Repayment of Bank Credit Facility | (25,000) | (54,000) |
Deferred financing costs | (1,268) | (16,990) |
Net cash provided by (used in) financing activities | 48,732 | (179,967) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 67,080 | 319 |
Cash, cash equivalents and restricted cash: | ||
Balance, beginning of period | 13,541 | 22,315 |
Balance, end of period | 80,621 | 22,634 |
Talos Issuers | LLC Bank Credit Facility | ||
Cash flows from financing activities: | ||
Repayment of Bank Credit Facility | (403,000) | |
Guarantors | ||
Cash flows from operating activities: | ||
Net cash provided by (used in) operating activities | 412,445 | 269,841 |
Cash flows from investing activities: | ||
Exploration, development, and other capital expenditures | (301,603) | (159,368) |
Cash (paid for) acquired in acquisitions | (32,916) | 278,409 |
Proceeds from sale of other property and equipment | 5,369 | |
Distributions from subsidiaries | (9) | |
Net cash provided by (used in) investing activities | (329,150) | 119,032 |
Cash flows from financing activities: | ||
Redemption of Senior Notes and other long-term debt | (10,567) | (174) |
Other deferred payments | (9,921) | |
Payments of capital lease | (10,344) | (9,874) |
Capital contributions | 1,051,661 | 770,436 |
Employee stock transactions | (326) | |
Distributions to subsidiary issuer | (1,202,546) | (1,095,165) |
Net cash provided by (used in) financing activities | (182,043) | (334,777) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (98,748) | 54,096 |
Cash, cash equivalents and restricted cash: | ||
Balance, beginning of period | 102,049 | 9,048 |
Balance, end of period | 3,301 | 63,144 |
Non-Guarantors | ||
Cash flows from operating activities: | ||
Net cash provided by (used in) operating activities | (15,424) | (49) |
Cash flows from investing activities: | ||
Exploration, development, and other capital expenditures | (69,740) | (2,015) |
Net cash provided by (used in) investing activities | (69,740) | (2,015) |
Cash flows from financing activities: | ||
Capital contributions | 67,000 | 7,712 |
Distributions to subsidiary issuer | (648) | (2,331) |
Net cash provided by (used in) financing activities | 66,352 | 5,381 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (18,812) | 3,317 |
Cash, cash equivalents and restricted cash: | ||
Balance, beginning of period | 25,572 | 2,070 |
Balance, end of period | 6,760 | 5,387 |
Elimination | ||
Cash flows from investing activities: | ||
Investments in subsidiaries | 1,119,219 | 778,148 |
Distributions from subsidiaries | (1,203,194) | (1,097,496) |
Net cash provided by (used in) investing activities | (83,975) | (319,348) |
Cash flows from financing activities: | ||
Capital contributions | (1,119,219) | (778,148) |
Distributions to subsidiary issuer | 1,203,194 | 1,097,496 |
Net cash provided by (used in) financing activities | $ 83,975 | $ 319,348 |