Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 07, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 1-38668 | |
Entity Registrant Name | LEGACY RESERVES INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-4919553 | |
Entity Address, Address Line One | 303 W. Wall, Suite 1800 | |
Entity Address, City or Town | Midland | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 79701 | |
City Area Code | 432 | |
Local Phone Number | 689-5200 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 114,810,671 | |
Entity Central Index Key | 0001735828 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 1,110 | $ 1,098 |
Accounts receivable, net: | ||
Oil and natural gas | 50,750 | 56,615 |
Joint interest owners | 13,375 | 15,370 |
Other | 301 | 0 |
Fair value of derivatives (Notes 6 and 7) | 0 | 66,662 |
Prepaid expenses and other current assets (Note 1) | 15,640 | 11,347 |
Total current assets | 81,176 | 151,092 |
Oil and natural gas properties at cost: | ||
Proved properties using the successful efforts method of accounting | 3,517,153 | 3,471,456 |
Unproved properties | 19,824 | 19,863 |
Accumulated depletion, depreciation, amortization and impairment | (2,261,453) | (2,177,006) |
Total oil and natural gas properties, net | 1,275,524 | 1,314,313 |
Other property and equipment, net of accumulated depreciation and amortization of $12,611 and $11,971, respectively (Note 12) | 6,918 | 2,456 |
Fair value of derivatives (Notes 6 and 7) | 0 | 3,135 |
Other assets | 2,081 | 3,935 |
Total assets | 1,365,699 | 1,474,931 |
Current liabilities: | ||
Current debt, net (Notes 2 and 3) | 569,677 | 856,646 |
Accounts payable | 2,695 | 11,227 |
Accrued oil and natural gas liabilities (Note 1) | 58,790 | 98,886 |
Fair value of derivatives (Notes 6 and 7) | 0 | 0 |
Asset retirement obligation (Note 8) | 3,938 | 3,938 |
Other (Note 12) | 8,538 | 13,953 |
Total current liabilities | 643,638 | 984,650 |
Long-term liabilities: | ||
Long-term debt (Notes 2 and 3) | 0 | 432,923 |
Asset retirement obligation (Note 8) | 253,197 | 248,796 |
Fair value of derivatives (Notes 6 and 7) | 0 | 550 |
Other long-term liabilities (Note 12) | 3,193 | 643 |
Total long-term liabilities | 256,390 | 682,912 |
Liabilities subject to compromise | 787,204 | 0 |
Total liabilities | 1,687,232 | 1,667,562 |
Commitments and contingencies (Notes 5 and 12) | ||
Stockholders' equity (deficit): | ||
Common stock, $0.01 par value; 945,000,000 shares authorized, 114,810,671 and 109,442,278 shares outstanding at June 30, 2019 and December 31, 2018, respectively | 1,148 | 1,094 |
Additional paid-in capital | 36,689 | 24,752 |
Accumulated deficit | (359,370) | (218,477) |
Total stockholders' deficit | (321,533) | |
Total partners' deficit | (192,631) | |
Total liabilities and stockholders' deficit | $ 1,365,699 | $ 1,474,931 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Other property and equipment, net of accumulated depreciation and amortization of $12,611 and $11,971, respectively | $ 12,611 | $ 11,971 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 945,000,000 | 945,000,000 |
Common stock, shares, outstanding (in shares) | 114,810,671 | 109,442,278 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | ||||
Revenue | $ 117,779 | $ 139,281 | $ 236,276 | $ 276,760 |
Expenses: | ||||
Oil and natural gas production | 46,079 | 49,431 | 93,556 | 97,398 |
Production and other taxes | 6,381 | 7,658 | 12,530 | 14,984 |
General and administrative | 37,773 | 22,496 | 54,303 | 46,586 |
Depletion, depreciation, amortization and accretion | 41,868 | 38,139 | 84,417 | 74,686 |
Impairment of long-lived assets | 1,434 | 35,381 | 8,832 | 35,381 |
Gains on disposal of assets | (2,045) | (1,145) | (1,011) | (21,540) |
Total expenses | 131,490 | 151,960 | 252,627 | 247,495 |
Operating (loss) income | (13,711) | (12,679) | (16,351) | 29,265 |
Other income (expense): | ||||
Interest income | 14 | 3 | 20 | 15 |
Interest expense (Notes 2, 3, 5 and 6) | (52,933) | (28,589) | (90,052) | (55,957) |
Gain on extinguishment of debt (Note 3) | 0 | 0 | 13,105 | 51,693 |
Equity in income of equity method investees | 4 | 3 | 4 | 20 |
Net gains (losses) on commodity derivatives (Notes 6 and 7) | 5,713 | (9,315) | (45,747) | (11,019) |
Reorganization items, net (Note 2) | (1,960) | 0 | (1,960) | 0 |
Other | 103 | (2) | (167) | 273 |
Income (Loss) before income taxes | (62,770) | (50,579) | (141,148) | 14,290 |
Income tax expense | 0 | (130) | 0 | (617) |
Net (Loss) Income | $ (62,770) | $ (50,709) | $ (141,148) | $ 13,673 |
Loss per share - basic & diluted (in dollars per share) | $ (0.55) | $ (0.49) | $ (1.25) | $ 0.13 |
Weighted average number of shares / units used in computing net loss per share / unit | ||||
Basic (in shares) | 114,811 | 104,369 | 113,028 | 104,183 |
Diluted (in shares) | 114,811 | 104,369 | 113,028 | 105,077 |
Oil Sales | ||||
Revenues: | ||||
Revenue | $ 88,375 | $ 99,799 | $ 166,136 | $ 193,210 |
Natural Gas Liquids Sales | ||||
Revenues: | ||||
Revenue | 3,994 | 5,735 | 8,509 | 13,131 |
Natural Gas Sales | ||||
Revenues: | ||||
Revenue | $ 25,410 | $ 33,747 | $ 61,631 | $ 70,419 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Deficit/Partners' Deficit - USD ($) $ in Thousands | Total | Preferred EquitySeries A Preferred Equity | Preferred EquitySeries B Preferred Equity | Incentive Distribution Equity | Partners' DeficitLimited Partner | Partners' DeficitGeneral Partner | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Non-employee directors | Non-employee directorsPartners' DeficitLimited Partner |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | $ 64,382 | $ 64,367 | $ 15 | ||||||||
Partners' equity, beginning balance (in units) at Dec. 31, 2017 | 2,300,000 | 7,200,000 | 100,000 | 72,595,000 | |||||||
Partners' equity, beginning balance at Dec. 31, 2017 | (271,687) | $ 55,192 | $ 174,261 | $ 30,814 | $ (531,794) | (160) | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||
Unit-based compensation | 263 | $ 263 | |||||||||
Vesting of restricted and phantom units (in units) | 264,000 | ||||||||||
Units issued (in units) | 3,800,000 | ||||||||||
Units issued | 5,928 | $ 5,928 | |||||||||
Net income (loss) | 64,382 | $ 64,367 | 15 | ||||||||
Partners' equity, ending balance (in units) at Mar. 31, 2018 | 2,300,000 | 7,200,000 | 100,000 | 76,659,000 | |||||||
Partners' equity, ending balance at Mar. 31, 2018 | (201,114) | $ 55,192 | $ 174,261 | $ 30,814 | $ (461,236) | (145) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | 13,673 | ||||||||||
Partners' equity, beginning balance (in units) at Dec. 31, 2017 | 2,300,000 | 7,200,000 | 100,000 | 72,595,000 | |||||||
Partners' equity, beginning balance at Dec. 31, 2017 | (271,687) | $ 55,192 | $ 174,261 | $ 30,814 | $ (531,794) | (160) | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||
Net income (loss) | 13,673 | ||||||||||
Partners' equity, ending balance (in units) at Jun. 30, 2018 | 2,300,000 | 7,200,000 | 100,000 | 76,794,000 | |||||||
Partners' equity, ending balance at Jun. 30, 2018 | (250,985) | $ 55,192 | $ 174,261 | $ 30,814 | $ (511,095) | (157) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | (50,709) | $ (50,697) | (12) | ||||||||
Partners' equity, beginning balance (in units) at Mar. 31, 2018 | 2,300,000 | 7,200,000 | 100,000 | 76,659,000 | |||||||
Partners' equity, beginning balance at Mar. 31, 2018 | (201,114) | $ 55,192 | $ 174,261 | $ 30,814 | $ (461,236) | (145) | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||
Unit-based compensation (in units) | 60,000 | ||||||||||
Unit-based compensation | 316 | $ 316 | $ 522 | $ 522 | |||||||
Vesting of restricted and phantom units (in units) | 75,000 | ||||||||||
Units issued (in units) | 0 | ||||||||||
Units issued | 0 | $ 0 | |||||||||
Net income (loss) | (50,709) | $ (50,697) | (12) | ||||||||
Partners' equity, ending balance (in units) at Jun. 30, 2018 | 2,300,000 | 7,200,000 | 100,000 | 76,794,000 | |||||||
Partners' equity, ending balance at Jun. 30, 2018 | (250,985) | $ 55,192 | $ 174,261 | $ 30,814 | $ (511,095) | $ (157) | |||||
Shareholders' equity, beginning balance (in shares) at Dec. 31, 2018 | 109,442,000 | ||||||||||
Shareholders equity, beginning balance at Dec. 31, 2018 | (192,631) | $ 1,094 | $ 24,752 | $ (218,477) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Stock-based compensation | 4,156 | 4,156 | |||||||||
Debt exchange (in shares) | 5,368,000 | ||||||||||
Debt exchange | 3,717 | $ 54 | 3,663 | ||||||||
Net income (loss) | (78,378) | (78,378) | |||||||||
Shareholders' equity, ending balance (in shares) at Mar. 31, 2019 | 114,810,000 | ||||||||||
Shareholders' equity, ending balance at Mar. 31, 2019 | (262,881) | $ 1,148 | 32,571 | (296,600) | |||||||
Partners' equity, beginning balance at Dec. 31, 2018 | (192,631) | ||||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||
Net income (loss) | (78,378) | (78,378) | |||||||||
Shareholders' equity, beginning balance (in shares) at Dec. 31, 2018 | 109,442,000 | ||||||||||
Shareholders equity, beginning balance at Dec. 31, 2018 | (192,631) | $ 1,094 | 24,752 | (218,477) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Stock-based compensation | 4,118 | ||||||||||
Net income (loss) | (141,148) | ||||||||||
Shareholders' equity, ending balance (in shares) at Jun. 30, 2019 | 114,810,000 | ||||||||||
Shareholders' equity, ending balance at Jun. 30, 2019 | (321,533) | $ 1,148 | 36,689 | (359,370) | |||||||
Partners' equity, beginning balance at Dec. 31, 2018 | (192,631) | ||||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||
Net income (loss) | (141,148) | ||||||||||
Shareholders' equity, beginning balance (in shares) at Mar. 31, 2019 | 114,810,000 | ||||||||||
Shareholders equity, beginning balance at Mar. 31, 2019 | (262,881) | $ 1,148 | 32,571 | (296,600) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Stock-based compensation | 4,118 | ||||||||||
Net income (loss) | (62,770) | (62,770) | |||||||||
Shareholders' equity, ending balance (in shares) at Jun. 30, 2019 | 114,810,000 | ||||||||||
Shareholders' equity, ending balance at Jun. 30, 2019 | (321,533) | $ 1,148 | $ 36,689 | (359,370) | |||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||
Net income (loss) | $ (62,770) | $ (62,770) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | |||
Cash flows from operating activities: | ||||
Net income (loss) | $ (141,148) | $ 13,673 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||
Depletion, depreciation, amortization and accretion | 84,417 | 74,686 | ||
Amortization of debt discount and issuance costs | 28,775 | 10,752 | ||
Gain on extinguishment of debt | (13,105) | (51,693) | ||
Impairment of long-lived assets | 8,832 | 35,381 | ||
Loss on derivatives | 47,790 | 10,052 | ||
Distribution from equity method investee | 652 | 0 | ||
Stock/unit-based compensation | 8,274 | 24,994 | ||
Gains on disposal of assets | (1,011) | (21,540) | ||
Changes in assets and liabilities: | ||||
Decrease in accounts receivable, oil and natural gas | 5,865 | 5,079 | ||
Decrease in accounts receivable, joint interest owners | 2,005 | 10,905 | ||
Increase in accounts receivable, other | (311) | (4) | ||
Increase in other assets | (4,228) | (880) | ||
Decrease in accounts payable | (8,254) | (6,467) | ||
(Decrease) increase in accrued oil and natural gas liabilities | (8,053) | 12,035 | ||
Increase (Decrease) in other liabilities | 26,866 | (1,989) | ||
Total adjustments | 178,514 | 101,311 | ||
Net cash provided by operating activities | 37,366 | 114,984 | ||
Cash flows from investing activities: | ||||
Investment in oil and natural gas properties | (81,166) | (118,324) | ||
Proceeds associated with sale of assets | 2,361 | 29,235 | ||
Investment in other equipment | (4,750) | (130) | ||
Net cash settlements (paid) received on commodity derivatives | 21,458 | (5,209) | ||
Net cash used in investing activities | (62,097) | (94,428) | ||
Cash flows from financing activities: | ||||
Proceeds from long-term debt | 108,677 | 382,626 | ||
Payments of long-term debt | (80,000) | (375,384) | ||
Payments of debt issuance costs | (3,073) | (23,096) | ||
Net cash provided by (used in) financing activities | 25,604 | (15,854) | ||
Net increase in cash and cash equivalents | 873 | 4,702 | ||
Cash, beginning of period | 4,361 | [1] | 4,450 | |
Cash, end of period | [1] | 5,234 | 9,152 | |
Non-cash investing and financing activities: | ||||
Asset retirement obligation costs and liabilities | 30 | 39 | ||
Asset retirement obligations associated with properties sold | (243) | (16,107) | ||
Asset retirement obligations associate with property acquisitions | 0 | 156 | ||
Units issued in exchange for Standstill Agreement | 0 | 5,928 | ||
Change in accrued capital expenditures | (32,043) | 25,733 | ||
Debt exchange | 3,717 | 0 | ||
Restricted cash | $ 4,100 | $ 3,200 | ||
[1] | Inclusive of $4.1 million and $3.2 million of restricted cash as of June 30, 2019 and 2018. See "—Footnote 1—Summary of Significant Accounting Policies" for further discussion |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (a) Organization, Basis of Presentation and Description of Business Unless the context requires otherwise or unless otherwise noted, all references to “Legacy Reserves,” “Legacy Inc.,” “Legacy,” the “Company,” “we,” “us,” “our” or like terms are to Legacy Reserves Inc. and its subsidiaries for the periods after September 19, 2018, the date the Corporate Reorganization was consummated (as defined below). For the periods prior to September 20, 2018, unless the context requires otherwise or unless otherwise noted, all references to “Legacy Reserves,” “Legacy LP,” “Legacy,” the “Company,” “we,” “us,” “our” or like terms are to Legacy Reserves LP and its subsidiaries. Legacy is an independent energy company engaged in the development, production and acquisition of oil and natural gas properties in the United States. Its current operations are focused on the horizontal development of unconventional plays in the Permian Basin and the cost-efficient management of shallow-decline oil and natural gas wells in the Permian Basin, East Texas, Rocky Mountain and Mid-Continent regions. The accompanying financial statements have been prepared on the accrual basis of accounting whereby revenues are recognized when earned, and expenses are recognized when incurred. These condensed consolidated financial statements as of June 30, 2019 and for the three and six months ended June 30, 2019 and 2018 are unaudited. In the opinion of management, such financial statements include the adjustments and accruals, all of which are of a normal recurring nature, that are necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Legacy's Annual Report on Form 10-K for the year ended December 31, 2018. (b) Voluntary Reorganization Under Chapter 11 As discussed further in Note 2, on June 18, 2019 (the “Petition Date”), the Company and certain of its subsidiaries (collectively with the Company, the “Debtors”), filed voluntary petitions (the “Bankruptcy Petitions”) for relief under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). During the pendency of the Chapter 11 proceedings, the Debtors will operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. The condensed consolidated financial statements have been prepared as if the Company is a going concern and reflect the application of Accounting Standards Codification 852 “Reorganizations” (“ASC 852”). ASC 852 requires that the financial statements, for periods subsequent to the Chapter 11 filing, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that are realized or incurred in the bankruptcy proceedings are recorded in “reorganization items, net” on the Company’s condensed consolidated statements of operations. In addition, prepetition unsecured and under-secured obligations that may be impacted by the bankruptcy reorganization process have been classified as “liabilities subject to compromise” on the Company’s condensed consolidated balance sheet at June 30, 2019. These liabilities are reported at the amounts expected to be allowed as claims by the Bankruptcy Court, although they may be settled for less. The accompanying condensed consolidated financial statements do not purport to reflect or provide for the consequences of the Chapter 11 proceedings. In particular, the condensed consolidated financial statements do not purport to show: (i) the realizable value of assets on a liquidation basis or their availability to satisfy liabilities; (ii) the amount of prepetition liabilities that may be allowed for claims or contingencies, or the status and priority thereof; (iii) the effect on stockholders' deficit/partners’ deficit accounts of any changes that may be made to the Company’s capitalization; or (iv) the effect on operations of any changes that may be made to the Company’s business. While operating as debtor-in-possession under Chapter 11 of the Bankruptcy Code, the Company may sell or otherwise dispose of or liquidate assets or settle liabilities in amounts other than those reflected on its condensed consolidated financial statements, subject to the approval of the Bankruptcy Court or otherwise as permitted in the ordinary course of business. Further, a plan of reorganization could materially change the amounts and classifications on the Company’s historical condensed consolidated financial statements. (c) Accrued Oil and Natural Gas Liabilities Below are the components of accrued oil and natural gas liabilities as of June 30, 2019 and December 31, 2018: June 30, 2019 December 31, 2018 (In thousands) Accrued lease operating expense $ 19,726 $ 22,750 Accrued capital expenditutres 9,184 41,227 Revenue payable to joint interest owners 18,050 24,690 Accrued ad valorem tax 7,363 5,255 Other 4,467 4,964 $ 58,790 $ 98,886 (d) Restricted Cash Restricted cash on our Consolidated Balance Sheet as of June 30, 2019 and December 31, 2018 is $4.1 million and $3.3 million respectively, and is included in the "Prepaid expenses and other current assets" line. The restricted cash amounts represent various deposits to secure the performance of contracts, surety bonds and other obligations incurred in the ordinary course of business. Legacy adopted Accounting Standards Update ("ASU") No. 2016-18, "Restricted Cash" as of January 1, 2018. (e) Recent Accounting Pronouncements None. (f) Income Taxes Legacy’s provision for income taxes for the three and six months ended June 30, 2019 and 2018 is based on the estimated annual effective tax rate plus discrete items. The effective income tax rates were 0.00% and 0.26% for the three months ended June 30, 2019 and 2018, respectively. The effective income tax rates were 0.00% and 4.30% for the six months ended June 30, 2019 and 2018, respectively. Effective September 20, 2018, pursuant to the Merger Agreement, Legacy Inc. became subject to federal and state income taxes. Prior to consummation of the Corporate Reorganization, Legacy LP was treated as a partnership for federal and state income tax purposes, in which the taxable income or loss was passed through to its unitholders. With the exception of the state of Texas and certain subsidiaries, Legacy LP did not directly pay federal and state income taxes and recognition was not given to federal and state income taxes for its operations. On December 22, 2017, Public Law No. 115-97, commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law. The provisions of the Tax Act that impact Legacy include, but are not limited to, (1) reducing the U.S. federal corporate income tax rate from 35% to 21%, (2) full expensing of certain qualified property acquired after September 27, 2017, (3) limitations on the maximum deduction for net operating loss (NOL) as well as indefinite life carryforwards for tax years beginning after December 31, 2017 and (4) limitations on the maximum deduction for net business interest expense in tax years beginning after December 31, 2017. Legacy has previously recorded all amounts for the income effects of the Tax Act as of December 31, 2017. All of Legacy's income is sourced within the United States. (g) Leases The new standard was effective for us in the first quarter of 2019, and we adopted the new standard using a modified retrospective approach, with the date of initial application on January 1, 2019. Consequently, upon transition, we recognized an ROU asset and a lease liability, with the cumulative-effect of adoption in retained earnings as of January 1, 2019. We further utilized the package of practical expedients at transition to not reassess the following: • Whether any expired or existing contracts were or contained leases; • The lease classification for any expired or existing leases; and • Initial direct costs for any existing leases. In addition, we elected the practical expedient to not assess whether existing or expired land easements that were not previously accounted for as leases under superseded guidance are or contain a lease under the new leases guidance. We determine if an arrangement is a lease at inception of the arrangement. To the extent that we determine an arrangement represents a lease, we classify that lease as an operating lease or a finance lease. We capitalize operating and finance leases on our consolidated balance sheets through a right-of-use (“ROU”) asset and a corresponding lease liability. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating leases are included in other property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. Operating lease ROU assets and liabilities are recognized at the commencement date of an arrangement based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any lease payments made to the lessor prior to lease commencement, less any lease incentives, and initial direct costs incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Finance leases are included in other property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. Finance lease ROU assets (that is, amounts capitalized in other property and equipment) and liabilities are recognized at the commencement date of an arrangement based on the present value of lease payments over the lease term. The finance lease ROU asset also includes any lease payments made to the lessor prior to lease commencement, less any lease incentives, and initial direct costs incurred. We generally amortize that ROU asset on a straight-line basis, while interest on the lease liability is calculated using the effective interest method. Lease expense recognized under our finance leases is, therefore, comprised of amortization on the finance lease ROU asset and interest on the finance lease liability. Nature of Leases In support of our operations, we lease certain corporate office space, field offices, compressors, drilling rigs, other production equipment, fleet vehicles and storage space under cancelable and non-cancelable contracts. A more detailed description of our material lease types is included below. Corporate and Field Offices We enter into long-term contracts to lease corporate and field office space in support of company operations. These contracts are generally structured with an initial non-cancelable term of two ten Compressors We rent compressors from third parties in order to facilitate the downstream movement of our production to market. Our compressor arrangements are typically structured with a non-cancelable primary term of one to twenty four months and often continue thereafter on a month-to-month basis subject to termination by either party with thirty days’ notice. We have concluded that our compressor rental agreements represent operating leases with a lease term that equals the primary non-cancelable contract term. Upon completion of the primary term, both parties have substantive rights to terminate the lease without incurring a significant penalty. As a result, enforceable rights and obligations do not exist under the rental agreement subsequent to the primary term. To the extent that our compressor rental arrangements have a primary term of twelve months or less, we have elected to apply the practical expedient for short-term leases. For those short-term compressor contracts, we do not apply the lease recognition requirements, and we recognize lease payments related to these arrangements in profit or loss on a straight-line basis over the lease term. Refer to “Practical Expedients & Accounting Policy Elections” below for additional detail. Drilling Rigs We enter into daywork contracts for drilling rigs with third party service contractors to support the development and exploitation of undeveloped reserves and acreage. Our drilling rig arrangements are typically structured with a term that is in effect until drilling operations are completed on a contractually specified well or well pad. Upon mutual agreement with the contractor, we typically have the option to extend the contract term for additional wells or well pads by providing thirty days’ notice prior to the end of the original contract term. We have concluded that our drilling rig arrangements represent short-term operating leases with a lease term that equals the period of time required to complete drilling operations on the contractually specified well or well pad (that is, generally one to a few months from commencement of drilling). We do not include the option to extend the drilling rig contract in the lease term due to the continuously evolving nature of our drilling schedules, which requires significant flexibility in the structure of the term of these arrangements, and the potential volatility in commodity prices in an annual period. We have further elected to apply the practical expedient for short-term leases to our drilling rig leases. Accordingly, we do not apply the lease recognition requirements to our drilling rig contracts, and we recognize lease payments related to these arrangements in capital expenditures on a straight-line basis over the lease term. Refer to “Practical Expedients & Accounting Policy Elections” below for additional detail. Other Production Equipment We rent other production equipment, primarily electric submersible pumps, from third party vendors to be used in our production operations. These arrangements are typically structured with a non-cancelable term of 1 to 3 months and often continue thereafter on a month-to-month basis subject to termination by either party with thirty days’ notice. We have concluded that we are not reasonably certain of executing the month-to-month renewal options beyond a twelve month period based on the historical term for which we have used other production equipment, and, therefore, our other equipment agreements represent operating leases with a lease term up to twelve months. We have further elected to apply the practical expedient for short-term leases to our other production equipment contracts. Accordingly, we do not apply the lease recognition requirements to these contracts, and we recognize lease payments related to these arrangements in profit or loss on a straight-line basis over the lease term. Refer to “Practical Expedients & Accounting Policy Elections” below for additional detail. Fleet Vehicles We execute fleet vehicle leases with a third party vendor in support of our day-to-day drilling and production operations. Our vehicle leases are typically structured with a term of 18 to 48 months. We have concluded that the majority of our vehicle leases represent operating leases. Significant Judgments Discount Rate Our leases typically do not provide an implicit rate, and thus, we are required to use our incremental borrowing rate in determining the present value of lease payments based on the information available at commencement date. Our incremental borrowing rate reflects the rate of interest that we would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In order to determine our incremental borrowing rate, we utilized our current credit rating as well as best available market data, which includes public bond information for publicly traded upstream energy companies with similar credit ratings, to estimate our unsecured borrowing rate and applied adjustments to that rate to account for the effect of collateral. Legacy has determined the discount rate as of January 1, 2019 using end of day December 31, 2018 market data. This discount rate was used in the transition to ASC 842 as well as all new leases executed within 2019. Legacy intends to update the discount rate annually thereafter on January 1 to be used for all new leases within the year (for example, the discount rate will be updated as of January 1, 2020 to be applied to all new leases in 2020). In the event a material lease is executed within a fiscal year or there have been material changes in the market that would impact Legacy’s discount rate, Legacy will evaluate whether an intra-year update of the discount rate is required. Variable Lease Cost Practical Expedients & Accounting Policy Elections Certain of our lease agreements include lease and non-lease components. For all current asset classes with multiple component types, we have utilized the practical expedient that exempts us from separating lease components from non-lease components. Accordingly, we account for the lease and non-lease components in an arrangement as a single lease component. |
Chapter 11 Proceedings, Ability
Chapter 11 Proceedings, Ability to Continue as a Going Concern and Covenant Violations | 6 Months Ended |
Jun. 30, 2019 | |
Reorganizations [Abstract] | |
Chapter 11 Proceedings, Ability to Continue as a Going Concern and Covenant Violations | Chapter 11 Proceedings, Ability to Continue as a Going Concern and Covenant Violations Chapter 11 Proceedings On the Petition Date, the Debtors filed Bankruptcy Petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Debtors’ Chapter 11 cases are being administered jointly under the caption In re Legacy Reserves Inc. et al. (the “Chapter 11 cases” or “Chapter 11 proceedings”). The Debtors are operating their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. Subject to certain exceptions under the Bankruptcy Code, the filing of the Bankruptcy Petitions automatically enjoined or stayed the continuation of any judicial or administrative proceedings or other actions against the Debtors or their property to recover, collect or secure a claim arising or that could have arisen prior to the filing of the Bankruptcy Petitions. The Bankruptcy Court has granted certain relief requested by the Debtors enabling the Company to conduct its business activities in the ordinary course, including, among other things and subject to the terms and conditions of such orders, authorizing us to pay employee wages and benefits, to pay certain taxes and governmental fees and charges, to continue to operate our cash management system in the ordinary course, to secure debtor-in-possession financing, to remit funds we hold from time to time for the benefit of third parties (such as royalty owners), and to pay the prepetition claims of certain of our vendors that hold liens under applicable non-bankruptcy law. For goods and services provided following the Petition Date, the Company intends to pay vendors in full in the ordinary course of business. In connection with the Chapter 11 cases, Legacy LP entered into a senior secured superpriority debtor-in-possession credit agreement, dated as of June 21, 2019, among itself as debtor, debtor-in-possession and borrower, the other loan parties party thereto, as debtors, debtors-in-possession and guarantors, Wells Fargo Bank, National Association, as administrative agent and collateral agent, and the other lenders party thereto (the “DIP Credit Agreement”). See Note 3 for a discussion of the DIP Credit Agreement. Restructuring Support Agreement On June 10, 2019, the Debtors entered into a restructuring support and lock-up agreement (the “Restructuring Support Agreement”) with (i) the lenders (the “Supporting Term Lenders”) under the Term Loan Credit Agreement dated as of October 25, 2016 among Legacy LP, as borrower, the guarantors party thereto, Cortland Capital Market Services LLC, as administrative agent, and the lenders party thereto (as amended, the “Term Loan Credit Agreement”) and (ii) certain lenders (the “Supporting RBL Lenders” and, together with the Supporting Term Lenders, the “Supporting Lenders”) under the Third Amended and Restated Credit Agreement dated as of April 1, 2014 among Legacy LP, as borrower, the guarantors party thereto, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto (as amended, the “Credit Agreement”). Subsequent to entering into the Restructuring Support Agreement, on June 13, 2019, the Company entered into the First Amended and Restated Restructuring Support and Lock-Up Agreement (together with all exhibits and schedules thereto, including the term sheet attached as Exhibit A thereto, the “Amended Restructuring Support Agreement”) with (i) the Supporting Term Lenders, (ii) the Supporting RBL Lenders and (iii) certain (a) holders of 6.625% Senior Notes due 2021 (the “2021 Note Holders”) issued under the indenture dated as of May 28, 2013, by and among Legacy LP, Legacy Reserves Finance Corporation, the guarantors party thereto and Wilmington Trust, National Association (as successor to Wells Fargo Bank, National Association), as indenture trustee (as supplemented, the “2021 Notes Indenture”), (b) holders of 8% Senior Notes due 2020 (the “2020 Note Holders”) issued under the indenture dated as of December 4, 2012, by and among Legacy LP, Legacy Reserves Finance Corporation, the guarantors party thereto and Wilmington Trust, National Association (as successor to Wells Fargo Bank, National Association), as indenture trustee (as supplemented, the “2020 Notes Indenture”) and (c) holders of 8% Convertible Senior Notes due 2023 (together with the 2021 Note Holders and the 2020 Note Holders, the “Supporting Noteholders,” and the Supporting Lenders and the Supporting Noteholders, collectively, the “Supporting Creditors”) issued under the indenture dated as of September 20, 2018, by and among Legacy LP, Legacy Reserves Finance Corporation, the guarantors party thereto and Wilmington Trust, National Association, as indenture trustee and conversion agent (as supplemented, the “2023 Notes Indenture”). The Amended Restructuring Support Agreement contemplates, among other things, that the Company will: (i) file the Chapter 11 proceedings to effect a restructuring transaction through a pre-negotiated Chapter 11 plan of reorganization (the “Plan”) to be filed with the Bankruptcy Court; (ii) enter into the DIP Credit Agreement; (iii) consummate certain equity investments through a rights offering and committed equity backstops; and (iv) enter into a new senior-secured revolving asset-based lending credit facility in a maximum amount of $500 million (the “Exit Facility”) funded by certain of the lenders under the Credit Agreement. The Amended Restructuring Support Agreement contains certain covenants on the part of each of the Company and the Supporting Creditors, including that the Supporting Creditors vote in favor of the Plan and otherwise use good faith efforts to negotiate, execute and implement the restructuring transactions contemplated by the Amended Restructuring Support Agreement and the Plan. Additionally, the Amended Restructuring Support Agreement provides for certain conditions to the obligations of the parties and for termination upon the occurrence of certain events, including without limitation, the failure to achieve certain milestones and certain breaches and/or other actions by the parties under the Amended Restructuring Support Agreement. Proposed Plan of Reorganization In order to successfully emerge from Chapter 11, the Debtors will need to obtain confirmation from the Bankruptcy Court of a Plan that satisfies the requirements of the Bankruptcy Code. The Amended Restructuring Support Agreement contemplates that a Plan supported by the Supporting Creditors (the “Supporting Creditors Plan”) will be filed with the Bankruptcy Court, provided, however, if the Supporting Noteholders terminate the Amended Restructuring Support Agreement in accordance with the terms of the Amended Restructuring Support Agreement (a “Noteholder Termination”), a Plan, supported by only the Supporting Lenders (the “Supporting Lenders Plan”) will be filed with the Bankruptcy Court. On August 2, 2019, the Debtors filed the Supporting Creditors Plan, which is subject to approval by the Bankruptcy Court. The Supporting Creditors Plan provides for the following, among other things: • all holders of claims arising under the DIP Facility (as defined below) will receive, in full satisfaction of their respective claims: (i) if the Exit Facility is consummated, (a) on account of claims under the New Money Facility (as defined below), payment in full in cash, (b) on account of claims under the Refinancing Facility (as defined below), distribution of cash and commitments under the Exit Facility; or (ii) if the Exit Facility is not consummated, payment in full in cash; • all holders of claims arising under the Credit Agreement will receive, in full satisfaction of their respective claims, (i) if the Exit Facility is consummated, distribution of their pro rata share of commitments under the Exit Facility in exchange for the claims arising under the Credit Agreement or (ii) if the Exit Facility is not consummated, payment in full in cash; • all holders of claims arising under the Term Loan Credit Agreement will receive their pro rata share of approximately 51.40%, subject to increase, of the new common stock (the “New Common Stock”) to be issued by Legacy, as reorganized pursuant to and under the Plan (“Reorganized Legacy"); • holders of claims arising under the 2020 Notes Indenture, the 2021 Notes Indenture and the 2023 Notes Indenture (the “Noteholders”) will receive their respective pro rata share of (i) 2.50% of the New Common Stock, subject to decrease, (ii) subscription rights to participate in a $66.50 million rights offering (the “Supporting Creditor Plan Rights Offering”), which can be exercised to the extent that such Noteholders are “accredited investors” as defined under Regulation D promulgated under the Securities Act of 1933, as amended (“Securities Act”), and (iii) a share premium of 1.50% of the New Common Stock, available to accredited investors that participate in the Supporting Creditor Plan Rights Offering and non-accredited investors; • all existing equity interests in the Company will receive no recovery under the Plan and will be extinguished; • a $189.8 million committed equity investment by the Supporting Term Lenders; • at the option of the Supporting Term Lenders, an offering of up to $125.0 million of New Common Stock to third parties, the Supporting Term Lenders or the Noteholders; and • the establishment of a customary management incentive plan at Reorganized Legacy under which 10% of the New Common Stock will be reserved for grants made from time to time to employees of Reorganized Legacy. If a Noteholder Termination occurs, the Supporting Lenders Plan would provide for the following, among other things: • all holders of claims arising under the DIP Facility will receive, in full satisfaction of their respective claims: (i) if the Exit Facility is consummated, (a) on account of claims under the New Money Facility, payment in full in cash, (b) on account of claims under the Refinancing Facility, distribution of cash and commitments under the Exit Facility; or (ii) if the Exit Facility is not consummated, payment in full in cash; • all holders of claims arising under the Prepetition RBL Credit Agreement will receive, in full satisfaction of their respective claims, (i) if the Exit Facility is consummated, distribution of their pro rata share of commitments under the Exit Facility in exchange for the claims arising under the Prepetition RBL Credit Agreement or (ii) if the Exit Facility is not consummated, payment in full in cash; • all holders of claims arising under the Prepetition Term Loan Credit Agreement will receive their pro rata share of 98.00% of the New Common Stock, subject to dilution by the Supporting Lenders Plan Rights Offering and committed equity investment; • the Noteholders will receive their respective pro rata share of (i) 2.00% of the New Common Stock and (ii) subscription rights to participate in a $100.0 million rights offering (the “Supporting Lenders Plan Rights Offering” and, together with the Supporting Creditors Plan Rights Offering, the “Rights Offering”) to the extent that such Noteholders are “accredited investors” as defined under Regulation D promulgated under the Securities Act; • all existing equity interests in the Company will receive no recovery under the Plan and will be extinguished; • a $200.0 million committed equity investment by the Supporting Term Lenders; and • the establishment of a customary management incentive plan at Reorganized Legacy under which 10% of the New Common Stock will be reserved for grants made from time to time to management employees of Reorganized Legacy. Magnitude of Potential Claims On July 15, 2019, the Debtors filed with the Bankruptcy Court schedules and statements setting forth, among other things, the assets and liabilities of the Debtors, subject to the assumptions filed in connection therewith. The schedules and statements may be subject to further amendment or modification after filing. Holders of prepetition claims will be required to file proofs of claims by the applicable deadline for filing certain proofs of claims in the Debtors’ Chapter 11 cases. The Bankruptcy Court has not yet confirmed the claims deadlines. Differences between amounts scheduled by the Debtors and claims by creditors will be investigated and resolved in connection with the claims resolution process. Liabilities Subject to Compromise The Company’s condensed consolidated balance sheet includes amounts classified as “liabilities subject to compromise,” which represent prepetition liabilities that have been allowed, or that the Company anticipates will be allowed, as claims in its Chapter 11 cases. The amounts represent the Company’s current estimate of known or potential obligations to be resolved in connection with the Chapter 11 proceedings. The differences between the liabilities the Company has estimated and the claims filed, or to be filed, will be investigated and resolved in connection with the claims resolution process. The Company will continue to evaluate these liabilities throughout the Chapter 11 process and adjust amounts as necessary. Such adjustments may be material. The following table summarizes the components of liabilities subject to compromise included on the condensed consolidated balance sheet: June 30, 2019 (In thousands) Debt, net $ 757,449 Accrued interest payable 29,478 Accounts payable 277 Liabilities subject to compromise $ 787,204 The Company has discontinued recording interest on debt classified as liabilities subject to compromise on the Petition Date. Contractual interest on liabilities subject to compromise not reflected in the consolidated statements of operations was approximately $2.7 million, representing interest expense from the Petition Date through June 30, 2019. Reorganization Items, Net The Company has incurred and is expected to continue to incur significant costs associated with the reorganization. These costs, which are expensed as incurred, are expected to significantly affect the Company’s results of operations. Reorganization items represent costs and income directly associated with the Chapter 11 proceedings since the Petition Date, and also include adjustments to reflect the carrying value of certain liabilities subject to compromise at their estimated allowed claim amounts, as such adjustments are determined. The following table summarizes the components of reorganization items included on the condensed consolidated statements of operations: Three Months and Six Months Ended June 30, 2019 (In thousands) Professional advisory fees $ 1,960 Reorganization, items net $ 1,960 Appointment of Unsecured Creditors Committee On July 3, 2019, the United States Trustee appointed the official committee for unsecured creditors (the “Creditors Committee”). The Creditors Committee and its legal representatives have a right to be heard on all matters affecting unsecured creditors that come before the Bankruptcy Court with respect to the Debtors. Ability to Continue as a Going Concern The Condensed Consolidated Financial Statements included in this quarterly report on Form 10-Q have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Condensed Consolidated Financial Statements do not reflect any adjustments that might result from the outcome of the Chapter 11 proceedings. We have significant indebtedness and our level of indebtedness has adversely impacted and is continuing to adversely impact our financial condition. Our financial condition including operating results, the defaults under our debt agreements and the risks and uncertainties associated with the Chapter 11 proceedings raise doubt as to the Company’s ability to continue as a going concern. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s filing of the Chapter 11 proceedings resulted in the acceleration of the Debtors’ obligations under the Term Loan Credit Agreement and the indentures governing the Senior Notes (as defined below). Additionally, other events of default under the Company's debt agreements, including cross-defaults, are present, including violations of certain financial ratio covenants, the failure to make principal and interest payments on certain of the Company’s indebtedness, as well as the receipt of a going concern explanatory paragraph from the Company’s independent registered public accounting firm on the Company’s consolidated financial statements for the year ended December 31, 2018. Under the Bankruptcy Code, the creditors under these debt agreements are stayed from taking any action against the Company as a result of an event of default. Debt consists of the following as of June 30, 2019 and December 31, 2018: June 30, December 31, 2019 2018 (In thousands) Current debt Credit Facility due 2019 $ 475,500 $ 541,000 Second Lien Term Loans due 2020 — 338,626 Debtor in Possession (DIP) 94,177 — Unamortized debt issuance costs — (17,332) Unamortized discount on Second Lien Term Loans — (5,648) Total current debt, net $ 569,677 856,646 Second Lien Term Loans due 2020 339,812 — 8% Senior Notes due 2020 208,885 208,885 6.625% Senior Notes due 2021 129,529 131,279 8% Convertible Senior Notes due 2023 107,527 128,103 Unamortized debt issuance costs (24,930) (31,517) Unamortized discount on Senior Notes (3,374) (3,827) Total $ 757,449 $ 432,923 Less liabilities subject to compromise (757,449) — Total long-term debt, net $ — $ 432,923 Total debt $ 569,677 $ 1,289,569 DIP Credit Agreement In connection with the Chapter 11 cases, Legacy LP entered into the DIP Credit Agreement, which provides for, among other things, the following: • senior secured superpriority debtor-in-possession credit agreement in an aggregate principal amount of up to $350.0 million (the “DIP Facility”), consisting of (i) a new money revolving loan facility in an aggregate amount of up to $100.0 million (the “New Money Facility”), $35.0 million of which is available on an interim basis and which includes a sub-facility of up to $1.0 million for the issuance of letters of credit, and (ii) a refinancing term loan in the amount of $250.0 million (the “Refinancing Facility”); • borrowings under the (i) New Money Facility bear interest, at the option of the Company, at a rate per annum equal to the alternate base rate (the “ABR”) plus 4.25% or LIBOR plus 5.25% and (ii) the Refinancing Facility bear interest at a rate per annum equal to the ABR plus 3.50%; • the Company is required to pay an unused commitment fee equal to 1.00% per annum to the lenders under the New Money Facility in respect of the unused commitments thereunder; • the maturity of the DIP Facility to be the earliest to occur of (i) eight months after the petition date, (ii) upon the Bankruptcy Court’s approval of a plan of reorganization and the Company’s exit from Chapter 11, (iii) upon the sale of substantially all of the equity or assets of the Company and (iv) the termination of the DIP Facility during the continuation of an event of default under the DIP Credit Agreement or otherwise pursuant to the terms of the DIP Credit Agreement or by order of the Bankruptcy Court; • proceeds of the DIP Credit Agreement may be used for (i) transaction costs, fees and expenses, (ii) working capital and general corporate purposes in accordance with a budget approved by the lenders, (iii) bankruptcy-related costs and expenses (including restructuring fees and adequate protection payments) and (iv) in the case of the Refinancing Facility, to refinance amounts existing under the Company’s existing credit agreements; • the obligations under the DIP Credit Agreement are secured by a first priority lien on substantially all of the assets of the Company, subject to limited exceptions provided for in the DIP Motion; • the DIP Credit Agreement provides for certain customary covenants applicable to the Company, including covenants requiring delivery of a rolling 13-week operating budget and cash flow forecast, together with a variance report setting forth material variances from the budget; and • the DIP Credit Agreement provides for certain customary events of default, including the failure to achieve certain milestones set forth in the DIP Credit Agreement. As of August 7, 2019, the Company had no money drawn under the New Money Facility leaving $100 million of availability under the New Money Facility and $250 million drawn under the Refinancing Facility at a weighted-average interest rate of 10.38%, leaving no availability under the Refinancing Facility. Credit Facility On April 1, 2014, Legacy LP entered into the Credit Agreement. On March 21, 2019, Legacy entered into the Twelfth Amendment to the Credit Agreement which, among other things, extended the maturity of the Credit Agreement from April 1, 2019 to May 31, 2019. Legacy's obligations under the Credit Agreement are secured by mortgages on over 95% of the total value of its oil and natural gas properties as well as a pledge of all of its ownership interests in its operating subsidiaries and Legacy's ownership interests in the General Partner. Concurrently with the Corporate Reorganization, the General Partner and Legacy Inc. provided guarantees of Legacy LP's obligations under the Credit Agreement. The amount available for borrowing at any one time is limited to the borrowing base and contains a $2 million sub-limit for letters of credit. The borrowing base was reaffirmed at $575 million as part of the Twelfth Amendment. Under the terms of the Credit Agreement, the borrowing base was reduced to $570 million on May 22, 2019. Prior to the Corporate Reorganization, the Credit Agreement contained a covenant that prohibited Legacy from paying distributions to its limited partners, including holders of its preferred units, if (i) Total Debt to EBITDA for the four fiscal quarters ending on the last day of the fiscal quarter immediately preceding the date of determination for which financial statements were available was greater than 4.00 to 1.00 or (ii) Legacy had unused lender commitments of less than or equal to 15% of the total lender commitments then in effect. Following the consummation of the Corporate Reorganization, the Credit Agreement contains a covenant that prohibits Legacy from paying dividends to its stockholders, if (i) Total Debt to EBITDA for the four fiscal quarters ending on the last day of the fiscal quarter immediately preceding the date of determination for which financial statements are available is greater than 3.00 to 1.00 or (ii) Legacy has unused lender commitments of less than or equal to 20% of the total lender commitments then in effect. The Credit Agreement also contains covenants that, among other things, require us to maintain specified ratios or conditions as follows: • as of any day, first lien debt to EBITDA for the four fiscal quarters ending on the last day of the fiscal quarter immediately preceding the date of determination for which financial statements are available to not be greater than 2.50 to 1.00; • as of the last day of any fiscal quarter, secured debt to EBITDA as of the last day of any fiscal quarter for the four fiscal quarters then ending of not more than 4.5 to 1.0; • as of the last day of any fiscal quarter, total EBITDA over the last four quarters to total interest expense over the last four quarters to be greater than 2.0 to 1.0; • consolidated current assets, as of the last day of the most recent quarter and including the unused amount of the total commitments, to consolidated current liabilities as of the last day of the most recent quarter of not less than 1.0 to 1.0, excluding non-cash assets and liabilities under FASB Accounting Standards Codification 815, which includes the current portion of oil, natural gas and interest rate derivatives; and • as of the last day of any fiscal quarter, the ratio of (a) the sum of (i) the net present value using NYMEX forward pricing, discounted at 10 percent per annum, of Legacy’s proved developed producing oil and gas properties as reflected in the most recent reserve report delivered either July 1 or December 31 of each year, as the case may be (giving pro forma effect to material acquisitions or dispositions since the date of such reports) (“PDP PV-10”), (ii) the net mark to market value of Legacy’s commodity derivative agreements and (iii) Legacy’s cash and cash equivalents, in each case as of such date to (b) Secured Debt as of such day to be equal to or less than 1.00 to 1.00. All capitalized terms not defined in the foregoing description have the meaning assigned to them in the Credit Agreement. The Credit Agreement matured on May 31, 2019. As of June 30, 2019, Legacy had approximately $475.5 million drawn under the Credit Agreement at a weighted-average interest rate of 9.63%, leaving no availability under the Credit Agreement. For the six-month period ended June 30, 2019, Legacy paid in cash $21.9 million of interest expense on the Credit Agreement. Second Lien Term Loan Credit Agreement On October 25, 2016, Legacy entered into the Term Loan Credit Agreement, providing for term loans up to an aggregate principal amount of $300.0 million (the “Second Lien Term Loans”). On March 21, 2019, Legacy entered into the Seventh Amendment to the Term Loan Credit Agreement (as defined below). The Second Lien Term Loans under the Term Loan Credit Agreement are issued with an upfront fee of 2% and bear interest at a rate of 12.00% per annum payable quarterly in cash. Effective March 21, 2019, the Seventh Amendment to the Term Loan Credit Agreement provides an increase of 2.25% to the interest rate paid on all term loans. GSO Capital Partners L.P. (“GSO”) and certain funds and accounts managed, advised or sub-advised, by GSO are the initial lenders thereunder. The Term Loan Credit Agreement matures on August 31, 2021; provided that, if on July 1, 2020, Legacy has greater than or equal to a face amount of $15.0 million of Senior Notes that were outstanding on the date the Term Loan Credit Agreement was entered into or any other senior notes with a maturity date that is earlier than August 31, 2021, the Term Loan Credit Agreement will mature on August 1, 2020. The Second Lien Term Loans are secured on a second lien priority basis by the same collateral that secures Legacy's Credit Agreement and are unconditionally guaranteed on a joint and several basis by the same wholly owned subsidiaries of Legacy that are guarantors under the Credit Agreement. In addition, upon consummation of the Corporate Reorganization, the General Partner and Legacy Inc. became guarantors. As of June 30, 2019, Legacy had approximately $339.8 million drawn under the Term Loan Credit Agreement. On December 31, 2017, Legacy entered into the Third Amendment to the Term Loan Credit Agreement among Legacy, as borrower, Cortland, as administrative agent and second lien collateral agent, and the lenders party thereto, including GSO and certain funds and accounts managed, advised or sub-advised by GSO, which, among other things, increased the maximum amount available for borrowing under the Second Lien Term Loans to $400.0 million, extended the availability of undrawn principal ($60.2 million of availability as of June 30, 2019) to October 25, 2019 and relaxed the asset coverage ratio to 0.85 to 1.00 until the fiscal quarter ended December 31, 2018. Prior to the Corporate Reorganization, the Term Loan Credit Agreement contained a covenant that prohibited Legacy from paying distributions to its limited partners, including holders of its preferred units, if (i) Total Debt to EBITDA for the four fiscal quarters ending on the last day of the fiscal quarter immediately preceding the date of determination for which financial statements were available was greater than 4.00 to 1.00 or (ii) Legacy had unused lender commitments of less than or equal to 15% of the total lender commitments then in effect. Following consummation of the Corporate Reorganization, the Term Loan Credit Agreement contains a covenant that prohibits Legacy from paying dividends to the stockholders, if (i) Total Debt to EBITDA for the four fiscal quarters ending on the last day of the fiscal quarter immediately preceding the date of determination for which financial statements are available is greater than 3.00 to 1.00 or (ii) Legacy has unused lender commitments of less than or equal to 20% of the total lender commitments then in effect. The Term Loan Credit Agreement also contains covenants that, among other things, requires Legacy to: • not permit, as of the last day of any fiscal quarter, the ratio of the sum of (i) the net present value using NYMEX forward pricing of Legacy’s PDP PV-10, (ii) the net mark to market value of Legacy’s commodity derivative agreements and (iii) Legacy’s cash and cash equivalents to Secured Debt to be less than 0.85 to 1.00 until the fiscal quarter ended December 31, 2018 and 1.00 to 1.00 thereafter; and • not permit, as of the last day of any fiscal quarter, Legacy’s ratio of Secured Debt as of such day to EBITDA for the four fiscal quarters then ending to be greater than 4.50 to 1.00. All capitalized terms used but not defined in the foregoing description have the meaning assigned to them in the Term Loan Credit Agreement. 8% Senior Notes Due 2020 ("2020 Senior Notes") On December 4, 2012, Legacy and its 100% owned subsidiary Legacy Reserves Finance Corporation (together, the "Issuers") completed a private placement offering to eligible purchasers of an aggregate principal amount of $300 million of its 2020 Senior Notes, which were subsequently registered through a public exchange offer that closed on January 8, 2014. The 2020 Senior Notes were issued at 97.848% of par. Legacy has the option to redeem the 2020 Senior Notes, in whole or in part, at any time at the specified redemption prices set forth below together with any accrued and unpaid interest, if any, to the date of redemption. Legacy may be required to offer to repurchase the 2020 Senior Notes at a purchase price of 101% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, in the event of a change of control as defined by the indenture. Legacy and Legacy Reserves Finance Corporation's obligations under the 2020 Senior Notes are guaranteed by its 100% owned subsidiaries Legacy Reserves Operating GP LLC, Legacy Reserves Operating LP, Legacy Reserves Services LLC., Legacy Reserves Energy Services LLC, Legacy Reserves Marketing LLC., Dew Gathering LLC and Pinnacle Gas Treating LLC, which constitute all of Legacy's wholly-owned subsidiaries other than Legacy Reserves Finance Corporation. In the future, the guarantees may be released or terminated under the following circumstances: (i) in connection with any sale or other disposition of all or substantially all of the properties of the guarantor; (ii) in connection with any sale or other disposition of sufficient capital stock of the guarantor so that it no longer qualifies as Legacy's Restricted Subsidiary (as defined in the indenture); (iii) if designated to be an unrestricted subsidiary; (iv) upon legal defeasance, covenant defeasance or satisfaction and discharge of the indenture; (v) upon the liquidation or dissolution of the guarantor provided no default or event of default has occurred or is occurring; (vi) at such time the guarantor does not have outstanding guarantees of its, or any other guarantor's, other debt; or (vii) upon merging into, or transferring all of its properties to Legacy or another guarantor and ceasing to exist. Refer to "Note 13 - Guarantors -" for further details on Legacy's guarantors. The indenture governing the 2020 Senior Notes (as supplemented, the "2020 Notes Indenture") limits Legacy's ability and the ability of certain of its subsidiaries to (i) sell assets; (ii) pay distributions or dividends on, repurchase or redeem equity interests or purchase or redeem Legacy's subordinated debt, provided that such subsidiaries may pay dividends to the holders of their equity interests (including Legacy) and Legacy may pay distributions to the holders of its equity interests subject to the absence of certain defaults, the satisfaction of a fixed charge coverage ratio test and certain other conditions; (iii) make certain investments; (iv) incur or guarantee additional indebtedness or issue preferred securities; (v) create or incur certain liens; (vi) enter into agreements that restrict distributions or other payments from certain of its subsidiaries to Legacy; (vii) consolidate, merge or transfer all or substantially all of Legacy's assets; (viii) engage in certain transactions with affiliates; (ix) create unrestricted subsidiaries; and (x) engage in certain business activities. These covenants are subject to a number of important exceptions and qualifications. If at any time when the 2020 Senior Notes are rated investment grade by each of Moody's Investors Service, Inc. and Standard & Poor's Ratings Services and no Default (as defined in the indenture) has occurred and is continuing, many of such covenants will terminate and Legacy and its subsidiaries will cease to be subject to such covenants. The 2020 Notes Indenture also includes customary events of default. Legacy is in compliance with all financial and other covenants of the 2020 Senior Notes. However, if the lenders under Legacy's Credit Agreement or Term Loan Credit Agreement were to accelerate the indebtedness under Legacy’s Credit Agreement or Term Loan Credit Agreement as a result of a default, such acceleration could cause a cross-default of all of the 2020 Senior Notes and permit the holders of such notes to accelerate the maturities of such indebtedness. In connection with the exchange of approximately $21.0 million aggregate principal amount of 2020 Senior Notes for the same aggregate principal of the 2023 Convertible Notes and the issuance of 105,020 shares of Common Stock in September 2018, Legacy recognized a $1.4 million gain on extinguishment of debt, which consisted of the difference between (1) the face amount of the exchanged 2020 Senior Notes repurchased net of the unamortized portion of both the original issuer's discount and issuance costs and (2) the fair value of the new 2023 Convertible Notes. During the year ended December 31, 2018, Legacy exchanged 1,000,000 shares of Common Stock for $3.1 million of face amount of its outstanding 2020 Senior Notes. Legacy treated the exchange as an extinguishment of debt. Accordingly, Legacy recognized a gain for the difference between (1) the face amount of the 2020 Senior Notes repurchased net of the unamortized portion of both the original issuer's discount and issuance costs and (2) the fair value of the units issued in the exchange based on the closing price on the date of exchange. During the year ended December 31, 2016, Legacy repurchased a face amount of $52.0 million of its 2020 Senior Notes on the open market. Legacy treated these repurchases as an extinguishment of debt. Accordingly, Legacy recognized a gain for the difference between (1) the face amount of the 2020 Senior Notes repurchased net of the unamortized portion of both the original issuer's discount and issuance costs and (2) the repurchase price. On June 1, 2016, Legacy exchanged 2,719,124 units representing limited partner interests in the Partnership for $15.0 million of face amount of its outstanding 2020 Senior Notes. Legacy treated this exchange as an extinguishment of debt. Accordingly, Legacy recognized a gain for the difference between (1) the face amount of the 2020 Senior Notes repurchased net of the unamortized portion of both the original issuer's discount and issuance costs and (2) the fair value of the units issued in the exchange based on the closing price on June 1, 2016. Interest is payable on June 1 and December 1 of each year. Legacy failed to make an interest payment of approximately $8.4 million due June 1, 2019, on the 8% Senior Notes due 2020. As of June 30, 2019, there was $208.9 million of 2020 Senior Notes outstanding. 6.625% Senior Notes Due 2021 ("2021 Senior Notes") On May 28, 2013, the Issuers completed a private placement offering to eligible purchasers of an aggregate principal amount of $250 million of its 2021 Senior Notes, which were subsequently registered through a public exchange offer that closed on March 18, 2014. The 2021 Senior Notes were issued at 98.405% of par. On May 13, 2014, the Issuers completed a private placement offering to eligible purchasers of an aggregate principal amount of an additional $300 million of the 2021 Senior Notes, which were subsequently registered through a public exchange offer that closed on February 10, 2015. These 2021 Senior Notes were issued at 99.0% of par. The terms of the 2021 Senior Notes, including the Guarantors, are substantially identical to the terms of the 2020 Senior Notes with the exception of the interest rate and redemption provisions noted below. Legacy will have the option to redeem the 2021 Senior Notes, in whole or in part, at the specified redemption prices set forth below together with any accrued and unpaid interest, if any, to the date of redemption. Legacy may be required to offer to repurchase the 2021 Senior Notes at a purchase price of 101% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, in the event of a change of control as defined by the indenture, as supplemented. Legacy is in compliance with all financial and other covenants of the 2021 Senior Notes. However, if the lenders under Legacy's Current Credit Agreement were to accelerate the indebtedness under Legacy's Current Credit Agreement as a result of a default, such acceleration could cause a cross-default of all of the 2021 Senior Notes and permit the holders of such notes to accelerate the maturities of such indebtedness. On April 2, 2018, following receipt of the requisite consents of the holders of the 2021 Senior Notes, Legacy entered into the Second Supplemental Indenture (the “2021 Notes Supplemental Indenture”) to the initial indenture governing the 2021 Notes (the "2021 Notes Indenture"). On December 31, 2017, Legacy entered into a definitive agreement with certain funds managed by Fir Tree Partners pursuant to which Legacy acquired $187.0 million of the 6.625% Notes for a price of approximately $132 million inclusive of accrued but unpaid interest with a settlement date of January 5, 2018. Legacy treated these repurchases for accounting purposes as an extinguishment of debt. Additionally, Legacy recognized a gain for the difference between (1) the face amount of the 2021 Senior Notes repurchased net of the unamortized portion of both the original issuer's discount and issuance costs and (2) the repurchase price. During the year ended December 31, 2016, Legacy repurchased a face amount of $117.3 million of its 2021 Senior Notes on the open market. Legacy treated these repurchases as an extinguishment of debt. Accordingly, Legacy recognized a gain for the difference between (1) the face amount of the 2021 Senior Notes repurchased net of the unamortized portion of both the original issuer's discount and issuance costs and (2) the repurchase price. Interest is payable on June 1 and December 1 of each year. Legacy failed to make an interest payment of approximately $4.3 million due June 1, 2019, on the 6.625% Senior Notes due 2021. As of June 30, 2019, there was $129.5 million of 2021 Senior Notes outstanding. 8% Convertible Senior Notes Due 2023 ("2023 Convertible Notes") On September 20, 2018, the Issuers, completed private exchanges with certain holders of senior notes, pursuant to which the Issuers exchanged (i) $21.0 million aggregate principal amount of 2020 Senior Notes for $21.0 million aggregate principal amount of 2023 Convertible Notes and 105,020 shares of common stock and (ii) $109.0 million aggregate principal amount of 2021 Senior Notes for $109.0 million aggregate principal amount of 2023 Convertible Notes. The 2023 Convertible Notes were issued pursuant to an Indenture, dated as of September 20, 2018 (the “2023 Convertible Note Indenture”). Upon issuance, Legacy separately accounted for the liability and equity components in accordance with Accounting Standards Codification 470-20. The initial fair value of the 2023 Convertible Notes in its entirety (inclusive of the equity component related to the conversion option) was estimated using observable inputs such as trades that occurred on the day of the transaction. The liability component was recorded at the estimated fair value of a similar debt instrument without the conversion feature. The difference between the aggregate principal amount of the 2023 Convertible Notes and the fair value of the liability component was recorded as a debt discount and is being amortized to interest expense over the term of the notes using the effective interest method. The fair value of the liability component of the 2023 Convertible Notes was estimated at $101 million, resulting in a debt discount of $29 million. The equity component, representing the value of the conversion option, was computed by deducting the fair value of the liability component from the initial fair value of the 2023 Convertible Notes. The equity component was recorded in additional paid-in capital within stockholders’ equity and will not be remeasured as long as it continues to meet the conditions for equity classification. The 2023 Convertible Notes mature on September 20, 2023, unless earlier repurchased or redeemed by the Issuers or converted. The 2023 Convertible Notes are subject to redemption for cash, in whole or in part, at the Issuers’ option at a redemption price equal to 100% of the 2023 Convertible Notes to be redeemed, plus any accrued and unpaid interest. In addition, the Issuers are required to make an offer to holders of the 2023 Convertible Notes upon a change of control at a price equal to 101%, plus any accrued and unpaid interest, and an offer to holders of the 2023 Convertible Notes upon consummation by the Issuers or any restricted subsidiaries of certain asset sales at a price equal to 100%, plus any accrued and unpaid interest. The 2023 Convertible Notes are convertible into shares of common stock at an initial conversion rate of 166.6667 shares per $1,000 principal amount of 2023 Convertible Notes, which is equal to an initial conversion price of $6.00 per share of common stock (the "Conversion Price"). The 2023 Convertible Notes are convertible, at the option of the holders, into shares of common stock at any time from the date of issuance up until the close of business on the earlier of (i) the business day prior to the date of a mandatory conversion notice, (ii) with respect to a 2023 Convertible Note called for redemption, the business day immediately preceding the redemption date or (iii) the business day immediately preceding the maturity date. In addition, if a holder exercises its right to convert on or prior to September 19, 2019, such holder will receive an early conversion payment, in cash, per $1,000 principal amount as follows: Early Conversion Date Early Conversion Payment December 1, 2018 through May 31, 2019 $64.22 June 1, 2019 through September 19, 2019 $24.22 Subject to compliance with certain conditions, the Issuers have the right to mandatorily convert all of the 2023 Convertible Notes if the volume weighted average price of the common stock equals or exceeds the conversion price for at least 20 trading days (whether or not consecutive) during any period of 30 consecutive trading days commencing on or after the initial issuance date. The 2023 Convertible Notes are guaranteed by Legacy Inc., the General Partner, Legacy Reserves Operating GP LLC, Legacy Reserves Operating LP, Legacy Reserves Services LLC, Legacy Reserves Energy Services LLC, Legacy Reserves Marketing LLC, Dew Gathering LLC and Pinnacle Gas Treating LLC. The terms of the 2023 Convertible Notes, including the Guarantors, are substantially identical to the terms of the 2020 Senior Notes and 2021 Senior Notes with the exception of the interest rate, conversion and redemption provisions noted above. As of June 30, 2019, $107.5 million of 2023 Convertible Notes were outstanding. Interest is payable on June 1 and December 1 of each year. Legacy failed to make an interest payment of approximately $4.3 million due June 1, 2019, on the 8% Senior Notes due 2023. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Oil, NGL and natural gas sales revenues are generally recognized at the point in time that control of the product is transferred to the customer and collectability is reasonably assured. This generally occurs when oil or natural gas has been delivered to a pipeline or truck. A more detailed summary of the sale of each product type is included below. Oil Sales Legacy's oil sales contracts are generally structured such that Legacy sells its oil production to the purchaser at a contractually specified delivery point at or near the wellhead. The crude oil production is priced on the delivery date based upon prevailing index prices less certain deductions related to oil quality and physical location. Legacy recognizes revenue when control transfers to the purchaser upon delivery at the net price received from purchaser. NGL and Natural Gas Sales Under Legacy's gas processing contracts, Legacy delivers wet gas to a midstream processing entity at the wellhead or the inlet of the midstream processing entity’s system. The midstream processing entity processes the natural gas and remits proceeds to Legacy for the resulting sales of NGLs and residue gas. In these scenarios, Legacy evaluates whether it is the principal or the agent in the transaction. In virtually all of Legacy's gas processing contracts, Legacy has concluded that it is the agent, and the midstream processing entity is Legacy's customer. Accordingly, Legacy recognizes revenue upon delivery based on the net amount of the proceeds received from the midstream processing entity. Proceeds are generally tied to the prevailing index prices for residue gas and NGLs less deductions for gathering, processing, transportation and other expenses. Under Legacy's dry gas sales that do not require processing, Legacy sells its natural gas production to third party purchasers at a contractually specified delivery point at or near the wellhead. Pricing provisions are tied to a market index, with certain deductions based on, among other factors, whether a well delivers to a gathering or transmission line, quality of natural gas, and prevailing supply and demand conditions, so that the price of the natural gas fluctuates to remain competitive with other available natural gas supplies. Legacy recognizes revenue upon delivery of the natural gas to third party purchasers based on the relevant index price net of deductions. Imbalances Natural gas imbalances occur when Legacy sells more or less than its entitled ownership percentage of total natural gas production. Any amount received in excess of its share is treated as a liability. If Legacy receives less than its entitled share, the underproduction is recorded as a receivable. Legacy did not have any significant natural gas imbalance positions as of June 30, 2019 and December 31, 2018. Disaggregation of Revenue Legacy has identified three material revenue streams in its business: oil sales, NGL sales, and natural gas sales. Revenue attributable to each of Legacy's identified revenue streams is disaggregated in the table below. Three Months Ended Six Months Ended June 30, 2019 2019 (In thousands) Revenues: Oil sales $ 88,375 $ 166,136 Natural gas liquids (NGL) sales 3,994 8,509 Natural gas sales 25,410 61,631 Total revenues $ 117,779 $ 236,276 Significant Judgments Principal versus agent Legacy engages in various types of transactions in which midstream entities process its gas and subsequently market resulting NGLs and residue gas to third-party customers on Legacy's behalf, such as Legacy's percentage-of-proceeds and gas purchase contracts. These types of transactions require judgment to determine whether Legacy is the principal or the agent in the contract and, as a result, whether revenues are recorded gross or net. Transaction price allocated to remaining performance obligations A significant number of Legacy's product sales are short-term in nature with a contract term of one year or less. For those contracts, Legacy has utilized the practical expedient in ASC 606 that exempts it from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. For Legacy's product sales that have a contract term greater than one year, Legacy has utilized the practical expedient in ASC 606 that states that it is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these sales contracts, each unit of product represents a separate performance obligation; therefore future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. Contract balances Under Legacy's product sales contracts, it is entitled to payment from purchasers once its performance obligations have been satisfied upon delivery of the product, at which point payment is unconditional, and record invoiced amounts as “Accounts receivable - oil and natural gas” in its consolidated balance sheet. To the extent actual volumes and prices of oil and natural gas are unavailable for a given reporting period because of timing or information not received from third parties, the expected sales volumes and prices for those properties are estimated and also recorded as “Accounts receivable - oil and natural gas” in the accompanying consolidated balance sheets. In this scenario, payment is also unconditional, as Legacy has satisfied its performance obligations through delivery of the relevant product. As a result, Legacy has concluded that its product sales do not give rise to contract assets or liabilities under ASC 606. Prior-period performance obligations Legacy records revenue in the month production is delivered to the purchaser. However, settlement statements for certain oil, natural gas and NGL sales may not be received for 30 to 60 days after the month of production, and as a result, Legacy is required to estimate the amount of production that was delivered to the midstream purchaser and the price that will be received for the sale of the product. Additionally, to the extent actual volumes and prices of oil are unavailable for a given reporting period because of timing or information not received from third party purchasers, the expected sales volumes and prices for those barrels of oil are also estimated. Legacy records the differences between its estimates and the actual amounts received for product sales in the month that payment is received from the purchaser. Legacy has existing internal controls in place for its estimation process, and any identified differences between its revenue estimates and actual revenue received historically have not been significant. For the |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, Legacy is a party to various legal proceedings arising in the ordinary course of business. While the outcome of lawsuits cannot be predicted with certainty, Legacy is not currently a party to any proceeding that it believes could have a potential material adverse effect on its financial condition, results of operations or cash flows. Legacy is subject to numerous laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. To the extent laws are enacted or other governmental action is taken that restricts drilling or imposes environmental protection requirements that result in increased costs to the oil and natural gas industry in general, the business and prospects of Legacy could be adversely affected. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Legacy considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that Legacy values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange traded derivatives such as over-the-counter commodity price swaps and collars and interest rate swaps as well as long-term incentive plan liabilities calculated using the Black-Scholes model to estimate the fair value as of the measurement date. Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). Legacy’s valuation models are primarily industry standard models that consider various inputs including: (a) quoted forward prices for commodities, (b) time value, and (c) current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Level 3 instruments currently are limited to Midland-Cushing crude oil differential swaps. Although Legacy utilizes third party broker quotes to assess the reasonableness of its prices and valuation techniques, Legacy does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 2. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Legacy’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Fair Value on a Recurring Basis As required by the Twelth Amendment to the Credit Agreement, all of Legacy’s derivative positions were unwound on May 28, 2019. The following tables sets forth by level within the fair value hierarchy Legacy's Financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2018: December 31, 2018 Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets (In thousands) Assets: Current Commodity derivatives $ — $ 69,288 $ — $ 69,288 $ (4,670) $ 64,618 Interest rate derivatives — 2,044 — 2,044 — 2,044 Noncurrent Commodity derivatives — 3,473 — 3,473 (338) 3,135 Interest rate derivatives — — — — — — Liabilities: Current Commodity derivatives — (4,670) — (4,670) 4,670 — Noncurrent Commodity derivatives — (888) — (888) 338 (550) Net fair value instruments $ — $ 69,247 $ — $ 69,247 $ — $ 69,247 Legacy estimates the fair values of the commodity derivatives based on published forward commodity price curves for the underlying commodities as of the date of the estimate for those commodities for which published forward pricing is readily available. For those commodity derivatives for which forward commodity price curves are not readily available, Legacy estimates, with the assistance of third-party pricing experts, the forward curves as of the date of the estimate. Legacy validates the data provided by third parties by understanding the pricing models used, obtaining market values from other pricing sources, analyzing pricing data in certain situations and confirming, where applicable, that those securities trade in active markets. Legacy estimates the option value of puts and calls combined into hedges, including three-way collars and enhanced swaps, using an option pricing model which takes into account market volatility, market prices, contract parameters and discount rates based on published London interbank offered rates ("LIBOR") and interest rate swaps. Due to the lack of an active market for periods beyond one-month from the balance sheet date for its oil price differential swaps, Legacy has reviewed historical differential prices and known economic influences to estimate a reasonable forward curve of future pricing scenarios based upon these factors. In order to estimate the fair value of our interest rate swaps, Legacy uses a yield curve based on money market rates and interest rate swaps, extrapolates a forecast of future interest rates, estimates each future cash flow, derives discount factors to value the fixed and floating rate cash flows of each swap, and then discounts to present value all known (fixed) and forecasted (floating) swap cash flows. Curve building and discounting techniques used to establish the theoretical market value of interest bearing securities are based on readily available money market rates and interest swap market data. The determination of the fair values above incorporates various factors including the impact of our non-performance risk and the credit standing of the counterparties involved in Legacy’s derivative contracts. The risk of nonperformance by Legacy’s counterparties is mitigated by the fact that most of our current counterparties (or their affiliates) are also current or former bank lenders under the Legacy’s revolving credit facility. In addition, Legacy routinely monitors the creditworthiness of its counterparties. As the factors described above are based on significant assumptions made by management, these assumptions are the most sensitive to change. The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy: Significant Unobservable Inputs (Level 3) Three Months Ended Six Months Ended 2019 2018 2019 2018 (In thousands) Beginning balance $ — $ 9,909 $ — $ (5,088) Total gains — 26,356 — 40,416 Settlements, net — (4,649) — (3,712) Ending balance $ — $ 31,616 $ — $ 31,616 Gains (losses) included in earnings relating to derivatives still held as of June 30, 2019 and 2018 $ — $ 23,158 $ — $ 34,232 During periods of market disruption, including periods of volatile oil and natural gas prices, rapid credit contraction or illiquidity, it may be difficult to value certain of Legacy's derivative instruments if trading becomes less frequent and/or market data becomes less observable. There may be certain asset classes that were previously in active markets with observable data that become illiquid due to changes in the financial environment. In such cases, more derivative instruments may fall to Level 3 and thus require more subjectivity and management judgment. As such, valuations may include inputs and assumptions that are less observable or require greater estimation as well as valuation methods which are more sophisticated or require greater estimation thereby resulting in valuations with less certainty. Further, rapidly changing commodity and unprecedented credit and equity market conditions could materially impact the valuation of derivative instruments as reported within Legacy's consolidated financial statements and the period-to-period changes in value could vary significantly. Decreases in value may have a material adverse effect on Legacy's results of operations or financial condition. Fair Value on a Non-Recurring Basis Nonfinancial assets and liabilities measured at fair value on a non-recurring basis include certain nonfinancial assets and liabilities as may be acquired in a business combination and thereby measured at fair value; measurements of oil and natural gas property impairments; and the initial recognition of asset retirement obligations ("ARO") for which fair value is used. These ARO estimates are derived from historical costs as well as management’s expectation of future cost environments. As there is no corroborating market activity to support the assumptions used, Legacy has designated these liabilities as Level 3. A reconciliation of the beginning and ending balances of Legacy’s asset retirement obligation is presented in Note 8. Nonrecurring fair value measurements of proved oil and natural gas properties during the six months ended June 30, 2019 consist of adjustments of the carrying value oil and natural gas properties to their fair value of $5.4 million. Legacy incurred impairment charges of $8.8 million as oil and natural gas properties with a net cost basis of $14.3 million were written down to their fair value of $5.4 million. Legacy periodically reviews oil and natural gas properties for impairment when facts and circumstances indicate that their carrying value may not be recoverable. In order to determine whether the carrying value of an asset is recoverable, Legacy compares net capitalized costs of proved oil and natural gas properties to estimated undiscounted future net cash flows using management’s expectations of future oil and natural gas prices. These future price scenarios reflect Legacy’s estimation of future price volatility. If the net capitalized cost exceeds the undiscounted future net cash flows, Legacy writes the net cost basis down to the discounted future net cash flows, which is management's estimate of fair value. Significant inputs used to determine the fair value include estimates of: (i) reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital rate. The underlying commodity prices embedded in the Company's estimated cash flows are the product of a process that begins with NYMEX forward curve pricing, adjusted for estimated location and quality differentials, as well as other factors that Legacy's management believes will impact realizable prices. The inputs used by management for the fair value measurements utilized in this review include significant unobservable inputs, and therefore, the fair value measurements employed are classified as Level 3 for these types of assets. The carrying amount of the revolving debt of $475.5 million as of June 30, 2019 approximates fair value because Legacy's current borrowing rate does not materially differ from market rates for similar bank borrowings. Legacy has classified the revolving debt as a Level 2 item within the fair value hierarchy. The carrying amount of the second lien term loan debt under Legacy’s Second Lien Term Loan Credit Agreement approximates fair value because Legacy’s current borrowing rate does not materially differ from market rates for similar borrowings. Legacy has classified the Second Lien Term Loans as a Level 2 item within the fair value hierarchy. As of June 30, 2019, the fair values of the 2020 Senior Notes, the 2021 Senior Notes and the 2023 Convertible Notes were $9.8 million, $5.9 million and $3.8 million, respectively. As these valuations are based on unadjusted quoted prices in an active market, the fair values are classified as Level 1 items within the fair value hierarchy. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Commodity derivative transactions Due to the volatility of oil and natural gas prices, Legacy periodically enters into price-risk management transactions (e.g., swaps, enhanced swaps or collars) for a portion of its oil and natural gas production to achieve a more predictable cash flow, as well as to reduce exposure from price fluctuations. While the use of these arrangements limits Legacy’s ability to benefit from increases in the prices of oil and natural gas, it also reduces Legacy’s potential exposure to adverse price movements. Legacy’s arrangements, to the extent it enters into any, apply to only a portion of its production, provide only partial price protection against declines in oil and natural gas prices and limit Legacy’s potential gains from future increases in prices. None of these instruments are used for trading or speculative purposes. These derivative instruments are intended to mitigate a portion of Legacy’s price-risk and may be considered hedges for economic purposes, but Legacy has chosen not to designate them as cash flow hedges for accounting purposes. Therefore, all derivative instruments are recorded on the balance sheet at fair value with changes in fair value being recorded in current period earnings. By using derivative instruments to mitigate exposures to changes in commodity prices, Legacy exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes Legacy, which creates credit risk. Legacy minimizes the credit or repayment risk in derivative instruments by entering into transactions with high-quality counterparties. The following table sets forth a reconciliation of the changes in fair value of Legacy's commodity derivatives for the three and six months ended June 30, 2019 and 2018: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (In thousands) Beginning fair value of commodity derivatives $ 6,166 $ 7,409 $ 67,205 $ 6,318 Total gain (loss) - oil derivatives 7,971 (7,082) (41,600) (7,824) Total gain (loss) - natural gas derivatives (2,258) (2,233) (4,147) (3,195) Crude oil derivative cash settlements paid (received) (900) 6,309 (7,945) 11,203 Natural gas derivative cash settlements paid (received) (10,979) (3,895) (13,513) (5,994) Ending fair value of commodity derivatives $ — $ 508 $ — $ 508 As of June 30, 2019, Legacy had no commodity derivatives. Interest rate derivative transactions Due to the volatility of interest rates, Legacy periodically enters into interest rate risk management transactions in the form of interest rate swaps for a portion of its outstanding debt balance. These transactions allow Legacy to reduce exposure to interest rate fluctuations. While the use of these arrangements limits Legacy’s ability to benefit from decreases in interest rates, it also reduces Legacy’s potential exposure to increases in interest rates. Legacy’s arrangements, to the extent it enters into any, apply to only a portion of its outstanding debt balance, provide only partial protection against interest rate increases and limit Legacy’s potential savings from future interest rate declines. It is never management’s intention to hold or issue derivative instruments for speculative trading purposes. Conditions sometimes arise where actual borrowings are less than notional amounts hedged, which has, and could result in overhedged amounts. Legacy does not designate these derivatives as cash flow hedges, even though they reduce its exposure to changes in interest rates. Therefore, the mark-to-market of these instruments is recorded in current earnings as a component of interest expense. The total impact on interest expense from the mark-to-market and settlements was as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (In thousands) Beginning fair value of interest rate swaps $ 1,335 $ 2,983 $ 2,044 $ 2,117 Total gain on interest rate swaps (39) 372 (119) 1,315 Cash settlements received (1,296) (271) (1,925) (348) Ending fair value of interest rate swaps $ — $ 3,084 $ — $ 3,084 |
Asset Retirement Obligation
Asset Retirement Obligation | 6 Months Ended |
Jun. 30, 2019 | |
Asset Retirement Obligation [Abstract] | |
Asset Retirement Obligation | Asset Retirement Obligation An asset retirement obligation (“ARO”) associated with the retirement of a tangible long-lived asset is recognized as a liability in the period in which it is incurred and becomes determinable. When liabilities for dismantlement and abandonment costs, excluding salvage values, are initially recorded, the carrying amount of the related oil and natural gas properties is increased. The fair value of the additions to the ARO asset and liability is estimated using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation include estimates of: (i) plug and abandon costs per well based on existing regulatory requirements; (ii) remaining life per well; (iii) future inflation factors; and (iv) a credit-adjusted risk-free interest rate. These inputs require significant judgments and estimates by Legacy's management at the time of the valuation and are the most sensitive and subject to change. Accretion of the liability is recognized each period using the interest method of allocation, and the capitalized cost is depleted using the units of production method. Should either the estimated life or the estimated abandonment costs of a property change materially upon Legacy’s periodic review, a new calculation is performed using the same methodology of taking the abandonment cost and inflating it forward to its abandonment date and then discounting it back to the present using Legacy’s credit-adjusted-risk-free rate. The carrying value of the ARO is adjusted to the newly calculated value, with a corresponding offsetting adjustment to the asset retirement cost. When obligations are relieved by sale of the property or plugging and abandoning the well, the related liability and asset costs are removed from Legacy's balance sheet. Any difference in the cost to plug and the related liability is recorded as a gain or loss on Legacy's statement of operations in the disposal of assets line item. The following table reflects the changes in the ARO during the six months ended June 30, 2019 and year ended December 31, 2018: June 30, 2019 December 31, 2018 (In thousands) Asset retirement obligation - beginning of period $ 252,734 $ 274,686 Liabilities incurred with properties acquired — 226 Liabilities incurred with properties drilled 30 65 Liabilities settled during the period (1,828) (2,258) Liabilities associated with properties sold (243) (27,673) Current period accretion 6,442 12,568 Current period revisions to previous estimates — (4,880) Asset retirement obligation - end of period $ 257,135 $ 252,734 |
Stockholders' Deficit_Partners'
Stockholders' Deficit/Partners' Deficit | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Deficit/Partners' Deficit | Stockholders' Deficit / Partners' Deficit Preferred Units On September 20, 2018, in connection with the Corporate Reorganization, all of Legacy LP's 8% Series A Fixed-to-Floating Cumulative Redeemable Perpetual Preferred Units and 8.000% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units outstanding were converted into shares of common stock. Incentive Distribution Units On September 20, 2018, all of Legacy LP's Incentive Distribution Units outstanding were canceled in connection with the Corporate Reorganization. Loss per share / unit The following table sets forth the computation of basic and diluted income per share / unit: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 (In thousands) Net Income (loss) (62,770) $ (50,709) $ (141,148) $ 13,673 Net income attributable to unitholders (62,770) (50,709) (141,148) 13,673 Weighted average number of shares / units outstanding - basic 114,811 104,369 113,028 104,183 Effect of dilutive securities: Restricted shares — — — 894 Weighted average number of shares / units outstanding - diluted 114,811 104,369 113,028 105,077 Basic and Diluted (loss) income per share / units $ (0.55) $ (0.49) $ (1.25) $ 0.13 For the six months ended June 30, 2019, 7,694,651 restricted stock units were excluded from the calculation of diluted loss per share due to their anti-dilutive effect. For the three and six months ended June 30, 2018, 135,430 restricted units and 1,424,114 phantom units were excluded from the calculation of diluted loss per share due to their anti-dilutive effect. As of June 30, 2019, 17,921,170 shares related to 2023 Convertible Notes were excluded from the calculation of diluted earnings per share due to their anti-dilutive effect. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Legacy LP Long-Term Incentive Plan On March 15, 2006, a Long-Term Incentive Plan (as amended, “Legacy LP LTIP”) for Legacy was created and Legacy adopted the Legacy LP LTIP for its employees, consultants and directors, its affiliates and its general partner. The awards under the long-term incentive plan may include unit grants, restricted units, phantom units, unit options and unit appreciation rights (“UARs”). The Legacy LP LTIP permits the grant of awards that may be made or settled in units up to an aggregate of 5,000,000 units. As of June 30, 2018, grants of awards net of forfeitures and, in the case of phantom units, historical exercises covering 3,459,197 units had been made, comprised of 266,014 unit option awards, 988,207 restricted unit awards, 1,424,114 phantom unit awards and 780,862 unit awards. Pursuant to the terms of the Corporate Reorganization, the Legacy LP LTIP was terminated. Unit Appreciation Rights Legacy LP previously issued UARs under the Legacy LP LTIP to employees. A unit appreciation right is a notional unit that entitles the holder, upon vesting, to receive cash valued at the difference between the closing price of units on the exercise date and the exercise price, as determined on the date of grant. Because these awards were settled in cash, Legacy accounted for the UARs by utilizing the liability method. For the six-months ended June 30, 2018, Legacy recorded $1.5 million of compensation expense due to the change in liability from December 31, 2017 and 2016, respectively, based on its use of the Black-Scholes model to estimate the June 30, 2018 fair value of these UARs. Legacy LP did not issue UARs to employees during the year ended December 31, 2018 or the six-month period ended June 30, 2019. All outstanding UARs vested on September 20, 2018 in connection with the Corporate Reorganization and were subsequently exercised or forfeited. Phantom Units Legacy LP previously issued phantom units under the Legacy LP LTIP to executive officers. A phantom unit is a notional unit that entitles the holder, upon vesting, to receive either one Partnership unit for each phantom unit or the cash equivalent of a Partnership unit, as stipulated by the form of the grant. Legacy accounted for the phantom units settled in Partnership units by utilizing the equity method. Legacy accounted for the phantom units settled in cash by utilizing the liability method. On September 20, 2018, in connection with the Corporate Reorganization, 391,674 Phantom units that settle in cash and 1,032,440 phantom units that settle in units vested. Compensation expense related to the phantom units was $23.2 million for the six months ended June 30, 2018. All phantom units vested on September 20, 2018 in connection with the Corporate Reorganization. Restricted Units Legacy LP previously issued restricted units to certain employees and members of management. All restricted units vested on September 20, 2018 in connection with the Corporate Reorganization. Compensation expense related to restricted units was $0.4 million for the six months ended June 30, 2018. Board Units On May 15, 2018, Legacy granted and issued 6,010 units to four non-employee directors who serve on the Board of Directors of Legacy and 12,450 units to two non-employee directors of Legacy LP who, after the corporate reorganization, do not serve on the Board of Directors of Legacy Inc. The value of each unit was $8.69 at the time of issuance. Legacy Reserves Inc. 2018 Omnibus Incentive Plan On September 19, 2018, the Legacy Inc. 2018 Omnibus Incentive Plan (the "Legacy Inc. LTIP") was approved by the former unitholders of Legacy LP in connection with the Corporate Reorganization for it and its affiliates' employees, consultants and directors. The Legacy Inc. LTIP provides for up to 10,500,000 shares (the "Share Reserve") to be used for awards, and that the Share Reserve will increase proportionately by 10% of all shares of common stock issued by Legacy Inc. after the effective date of the Legacy Inc. LTIP and before the first anniversary of the effective date. The awards under the Legacy Inc. LTIP may include stock grants, restricted stock, restricted stock units ("RSUs") and stock options. As of June 30, 2019, grants of awards net of forfeitures covering 7,727,221 shares had been made, compromised of 7,694,651 restricted stock units and 32,570 stock awards. Restricted Stock Units During the six months ended June 30, 2019, Legacy issued an aggregate 516,594 RSUs to executive and non-executive employees. The RSUs vest over a three The following table summarizes the status of RSU activity since January 1, 2019: Number of Restricted Stock Units Grant Date Fair Value Outstanding at January 1, 2019 7,302,809 $ 4.88 Granted 516,594 $ 1.32 Cancelled/Forfeited (124,752) $ 4.23 Outstanding at June 30, 2019 7,694,651 $ 4.65 As of June 30, 2019, there was a total of $23.3 million of unrecognized compensation expense related to the unvested portion of these RSUs. At June 30, 2019, this cost was expected to be recognized over a weighted-average period of 2.73 years. Pursuant to the provisions of ASC 718, Legacy’s issued shares, as reflected in the accompanying consolidated balance sheet at June 30, 2019, do not include 7,694,651 shares related to unvested RSUs. Board Shares On September 25, 2018, Legacy granted and issued 5,030 shares to four non-employee directors who serve on the Board of Directors of Legacy in accordance with Legacy's director compensation policy. The value of each share was $4.97 at the time of issuance. On October 16, 2018, Legacy granted and issued 12,450 shares to one non-employee director who serves on the Board of Directors of Legacy in accordance with Legacy's director compensation policy. The value of each share was $5.02 at the time of issuance. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Effective September 20, 2018, pursuant to the Merger Agreement, Legacy Inc. became subject to federal and state income taxes. Prior to consummation of the Corporate Reorganization, Legacy LP was treated as a partnership for federal and state income tax purposes, in which the taxable income or loss was passed through to its unitholders. Legacy LP was subject to Texas margin tax. In addition, certain of Legacy LP’s subsidiaries were c-corporations subject to federal and state income taxes. Therefore, with the exception of the state of Texas and certain subsidiaries, Legacy LP did not directly pay federal and state income taxes and recognition was not given to federal and state income taxes for its operations. On December 22, 2017, Public Law No. 115-97, commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law. The provisions of the Tax Act that impact us include, but are not limited to, (1) reducing the U.S. federal corporate income tax rate from 35% to 21%, (2) temporary bonus depreciation that will allow for full expensing of certain qualified property acquired after September 27, 2017, (3) limitations on the maximum deduction for net operating loss (NOL) carryforwards generated in tax years beginning after December 31, 2017, to 80 percent of a taxpayer’s taxable income and (4) limitations on the maximum deduction for net business interest expense in tax years beginning after December 31, 2017, to 30% of the taxpayer’s adjusted taxable income. We have previously reported preliminary amounts for the income effects of the Tax Act for Legacy as of December 31, 2017. For the six months ended June 30, 2019 and 2018 we recorded income/(loss) before income taxes of $(141,148) and $14,290 respectively. All of Legacy's income is sourced within the United States. The effective combined U.S. federal and state income tax rates were 0.00% and 4.30% for the six months ended June 30, 2019 and 2018, respectively. During the six months ended June 30, 2019, the Legacy Inc. has recorded a full valuation allowance against its deferred tax position. A valuation allowance has been recorded as management does not believe that it is more-likely-than-not that its deferred tax assets will be realized. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases As previously described in Note 1 – Summary of Significant Accounting Policies, we lease certain office space, office equipment, production field offices, compressors, drilling rigs, vehicles and other production equipment under cancellable and non-cancelable leases to support our operations. The components of our total lease cost were as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2019 (In thousands) Operating lease cost $800 $1,636 Finance lease cost: Amortization of right-of-use assets 57 61 Interest on lease liabilities 48 52 Total finance lease costs 105 113 Short-term lease cost $3,210 $6,885 Total $4,115 $8,634 Supplemental cash flow information related to our leases is included in the table below: Three Months Ended Six Months Ended June 30, June 30, 2019 2019 (In thousands) Cash paid for amounts included in lease liabilities: Operating cash flows from operating leases $ 4,010 $ 8,521 Operating cash flows from finance leases 105 113 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 11 $ 9,044 Finance leases 910 2,011 Supplemental balance sheet information related to our leases is included in the table below: Six Months Ended June 30, 2019 (In thousands) Operating Leases Operating lease right-of-use assets $ 3,360 Other current liabilities (1,131) Other long-term liabilities (2,477) Total operating lease liabilities $ (3,608) Finance Leases Other property and equipment 1,005 Accumulated depreciation and amortization (83) Other property and equipment, net $ 922 Other current liabilities (875) Other long-term liabilities (69) Total finance lease liabilities $ (944) Our weighted average remaining lease term and weighted average discount rate by lease classification were as follows: Six Months Ended June 30, 2019 Weighted Average Remaining Lease Term (Years) Operating leases 1.73 Finance leases 2.59 Weighted Average Discount Rate Operating leases 24.41 % Finance leases 24.41 % Our lease liabilities with enforceable contract terms that are greater than one year mature as follows: Operating Leases Finance Leases (in thousands) Year 1 $ 2,867 $ 519 Year 2 1,123 480 Year 3 291 245 Year 4 199 42 Year 5 67 — Thereafter — — Total lease payments $ 4,547 $ 1,286 Less imputed interest (939) (342) Total $ 3,608 $ 944 |
Leases | Leases As previously described in Note 1 – Summary of Significant Accounting Policies, we lease certain office space, office equipment, production field offices, compressors, drilling rigs, vehicles and other production equipment under cancellable and non-cancelable leases to support our operations. The components of our total lease cost were as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2019 (In thousands) Operating lease cost $800 $1,636 Finance lease cost: Amortization of right-of-use assets 57 61 Interest on lease liabilities 48 52 Total finance lease costs 105 113 Short-term lease cost $3,210 $6,885 Total $4,115 $8,634 Supplemental cash flow information related to our leases is included in the table below: Three Months Ended Six Months Ended June 30, June 30, 2019 2019 (In thousands) Cash paid for amounts included in lease liabilities: Operating cash flows from operating leases $ 4,010 $ 8,521 Operating cash flows from finance leases 105 113 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 11 $ 9,044 Finance leases 910 2,011 Supplemental balance sheet information related to our leases is included in the table below: Six Months Ended June 30, 2019 (In thousands) Operating Leases Operating lease right-of-use assets $ 3,360 Other current liabilities (1,131) Other long-term liabilities (2,477) Total operating lease liabilities $ (3,608) Finance Leases Other property and equipment 1,005 Accumulated depreciation and amortization (83) Other property and equipment, net $ 922 Other current liabilities (875) Other long-term liabilities (69) Total finance lease liabilities $ (944) Our weighted average remaining lease term and weighted average discount rate by lease classification were as follows: Six Months Ended June 30, 2019 Weighted Average Remaining Lease Term (Years) Operating leases 1.73 Finance leases 2.59 Weighted Average Discount Rate Operating leases 24.41 % Finance leases 24.41 % Our lease liabilities with enforceable contract terms that are greater than one year mature as follows: Operating Leases Finance Leases (in thousands) Year 1 $ 2,867 $ 519 Year 2 1,123 480 Year 3 291 245 Year 4 199 42 Year 5 67 — Thereafter — — Total lease payments $ 4,547 $ 1,286 Less imputed interest (939) (342) Total $ 3,608 $ 944 |
Guarantors
Guarantors | 6 Months Ended |
Jun. 30, 2019 | |
Guarantees [Abstract] | |
Guarantors | GuarantorsLegacy LP's 2020 Senior Notes were issued in a private offering on December 4, 2012 and were subsequently registered through a public exchange offer that closed on January 8, 2014. Legacy LP's 2021 Senior Notes were issued in two separate private offerings on May 28, 2013 and May 8, 2014. $250 million aggregate principal amount of our 2021 Senior Notes were subsequently registered through a public exchange offer that closed on March 18, 2014. The remaining $300 million of aggregate principal amount of Legacy's 2021 Senior Notes were subsequently registered through a public exchange offer that closed on February 10, 2015. Legacy LP's 2023 Convertible Notes were issued in exchange for portions of the 2020 Senior Notes and 2021 Senior Notes on September 20, 2018. The 2020 Senior Notes, the 2021 Senior Notes and the 2023 Convertible Notes are guaranteed by Legacy LP's 100% owned subsidiaries Legacy Reserves Operating GP LLC, Legacy Reserves Operating LP, Legacy Reserves Services LLC, Legacy Reserves Energy Services LLC, Legacy Reserves Marketing LLC, Dew Gathering LLC and Pinnacle Gas Treating LLC, which constitute all of Legacy's wholly-owned subsidiaries other than Legacy Reserves Finance Corporation, and certain other future subsidiaries (the “Guarantors”, together with any future 100% owned subsidiaries that guarantee the Partnership's 2020 Senior Notes, 2021 Senior Notes and the 2023 Convertible Notes, the “Subsidiaries”) as well as Legacy Inc. and the General Partner, as parent guarantors (the "Parent Guarantors"). The Subsidiaries are 100% owned, directly or indirectly, by the Partnership and the guarantees by the Subsidiaries are full and unconditional, except for customary release provisions described in “—Footnote 3—Debt.” Legacy LP is 100% owned, directly or indirectly, by the Parent Guarantors and the guarantees by the Parent Guarantors are full and unconditional, except for customary release provisions described in “—Footnote 3—Debt.” Legacy LP has no assets or operations independent of the Subsidiaries, and there are no significant restrictions upon the ability of the Subsidiaries to distribute funds to the Partnership. The guarantees constitute joint and several obligations of the Guarantors and Parent Guarantors. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsNone. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | Organization, Basis of Presentation and Description of Business Unless the context requires otherwise or unless otherwise noted, all references to “Legacy Reserves,” “Legacy Inc.,” “Legacy,” the “Company,” “we,” “us,” “our” or like terms are to Legacy Reserves Inc. and its subsidiaries for the periods after September 19, 2018, the date the Corporate Reorganization was consummated (as defined below). For the periods prior to September 20, 2018, unless the context requires otherwise or unless otherwise noted, all references to “Legacy Reserves,” “Legacy LP,” “Legacy,” the “Company,” “we,” “us,” “our” or like terms are to Legacy Reserves LP and its subsidiaries. Legacy is an independent energy company engaged in the development, production and acquisition of oil and natural gas properties in the United States. Its current operations are focused on the horizontal development of unconventional plays in the Permian Basin and the cost-efficient management of shallow-decline oil and natural gas wells in the Permian Basin, East Texas, Rocky Mountain and Mid-Continent regions. The accompanying financial statements have been prepared on the accrual basis of accounting whereby revenues are recognized when earned, and expenses are recognized when incurred. These condensed consolidated financial statements as of June 30, 2019 and for the three and six months ended June 30, 2019 and 2018 are unaudited. In the opinion of management, such financial statements include the adjustments and accruals, all of which are of a normal recurring nature, that are necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Legacy's Annual Report on Form 10-K for the year ended December 31, 2018. |
Going Concern | Voluntary Reorganization Under Chapter 11 As discussed further in Note 2, on June 18, 2019 (the “Petition Date”), the Company and certain of its subsidiaries (collectively with the Company, the “Debtors”), filed voluntary petitions (the “Bankruptcy Petitions”) for relief under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). During the pendency of the Chapter 11 proceedings, the Debtors will operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. The condensed consolidated financial statements have been prepared as if the Company is a going concern and reflect the application of Accounting Standards Codification 852 “Reorganizations” (“ASC 852”). ASC 852 requires that the financial statements, for periods subsequent to the Chapter 11 filing, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that are realized or incurred in the bankruptcy proceedings are recorded in “reorganization items, net” on the Company’s condensed consolidated statements of operations. In addition, prepetition unsecured and under-secured obligations that may be impacted by the bankruptcy reorganization process have been classified as “liabilities subject to compromise” on the Company’s condensed consolidated balance sheet at June 30, 2019. These liabilities are reported at the amounts expected to be allowed as claims by the Bankruptcy Court, although they may be settled for less. The accompanying condensed consolidated financial statements do not purport to reflect or provide for the consequences of the Chapter 11 proceedings. In particular, the condensed consolidated financial statements do not purport to show: (i) the realizable value of assets on a liquidation basis or their availability to satisfy liabilities; (ii) the amount of prepetition liabilities that may be allowed for claims or contingencies, or the status and priority thereof; (iii) the effect on stockholders' deficit/partners’ deficit accounts of any changes that may be made to the Company’s capitalization; or (iv) the effect on operations of any changes that may be made to the Company’s business. While operating as debtor-in-possession under Chapter 11 of the Bankruptcy Code, the Company may sell or otherwise dispose of or liquidate assets or settle liabilities in amounts other than those reflected on its condensed consolidated financial statements, subject to the approval of the Bankruptcy Court or otherwise |
Restricted Cash | Restricted CashRestricted cash on our Consolidated Balance Sheet as of June 30, 2019 and December 31, 2018 is $4.1 million and $3.3 million respectively, and is included in the "Prepaid expenses and other current assets" line. The restricted cash amounts represent various deposits to secure the performance of contracts, surety bonds and other obligations incurred in the ordinary course of business. Legacy adopted Accounting Standards Update ("ASU") No. 2016-18, "Restricted Cash" as of January 1, 2018. |
Income Taxes | (f) Income Taxes Legacy’s provision for income taxes for the three and six months ended June 30, 2019 and 2018 is based on the estimated annual effective tax rate plus discrete items. The effective income tax rates were 0.00% and 0.26% for the three months ended June 30, 2019 and 2018, respectively. The effective income tax rates were 0.00% and 4.30% for the six months ended June 30, 2019 and 2018, respectively. Effective September 20, 2018, pursuant to the Merger Agreement, Legacy Inc. became subject to federal and state income taxes. Prior to consummation of the Corporate Reorganization, Legacy LP was treated as a partnership for federal and state income tax purposes, in which the taxable income or loss was passed through to its unitholders. With the exception of the state of Texas and certain subsidiaries, Legacy LP did not directly pay federal and state income taxes and recognition was not given to federal and state income taxes for its operations. On December 22, 2017, Public Law No. 115-97, commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law. The provisions of the Tax Act that impact Legacy include, but are not limited to, (1) reducing the U.S. federal corporate income tax rate from 35% to 21%, (2) full expensing of certain qualified property acquired after September 27, 2017, (3) limitations on the maximum deduction for net operating loss (NOL) as well as indefinite life carryforwards for tax years beginning after December 31, 2017 and (4) limitations on the maximum deduction for net business interest expense in tax years beginning after December 31, 2017. Legacy has previously recorded all amounts for the income effects of the Tax Act as of December 31, 2017. |
Leases | (g) Leases The new standard was effective for us in the first quarter of 2019, and we adopted the new standard using a modified retrospective approach, with the date of initial application on January 1, 2019. Consequently, upon transition, we recognized an ROU asset and a lease liability, with the cumulative-effect of adoption in retained earnings as of January 1, 2019. We further utilized the package of practical expedients at transition to not reassess the following: • Whether any expired or existing contracts were or contained leases; • The lease classification for any expired or existing leases; and • Initial direct costs for any existing leases. In addition, we elected the practical expedient to not assess whether existing or expired land easements that were not previously accounted for as leases under superseded guidance are or contain a lease under the new leases guidance. We determine if an arrangement is a lease at inception of the arrangement. To the extent that we determine an arrangement represents a lease, we classify that lease as an operating lease or a finance lease. We capitalize operating and finance leases on our consolidated balance sheets through a right-of-use (“ROU”) asset and a corresponding lease liability. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating leases are included in other property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. Operating lease ROU assets and liabilities are recognized at the commencement date of an arrangement based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any lease payments made to the lessor prior to lease commencement, less any lease incentives, and initial direct costs incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Finance leases are included in other property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. Finance lease ROU assets (that is, amounts capitalized in other property and equipment) and liabilities are recognized at the commencement date of an arrangement based on the present value of lease payments over the lease term. The finance lease ROU asset also includes any lease payments made to the lessor prior to lease commencement, less any lease incentives, and initial direct costs incurred. We generally amortize that ROU asset on a straight-line basis, while interest on the lease liability is calculated using the effective interest method. Lease expense recognized under our finance leases is, therefore, comprised of amortization on the finance lease ROU asset and interest on the finance lease liability. Nature of Leases In support of our operations, we lease certain corporate office space, field offices, compressors, drilling rigs, other production equipment, fleet vehicles and storage space under cancelable and non-cancelable contracts. A more detailed description of our material lease types is included below. Corporate and Field Offices We enter into long-term contracts to lease corporate and field office space in support of company operations. These contracts are generally structured with an initial non-cancelable term of two ten Compressors We rent compressors from third parties in order to facilitate the downstream movement of our production to market. Our compressor arrangements are typically structured with a non-cancelable primary term of one to twenty four months and often continue thereafter on a month-to-month basis subject to termination by either party with thirty days’ notice. We have concluded that our compressor rental agreements represent operating leases with a lease term that equals the primary non-cancelable contract term. Upon completion of the primary term, both parties have substantive rights to terminate the lease without incurring a significant penalty. As a result, enforceable rights and obligations do not exist under the rental agreement subsequent to the primary term. To the extent that our compressor rental arrangements have a primary term of twelve months or less, we have elected to apply the practical expedient for short-term leases. For those short-term compressor contracts, we do not apply the lease recognition requirements, and we recognize lease payments related to these arrangements in profit or loss on a straight-line basis over the lease term. Refer to “Practical Expedients & Accounting Policy Elections” below for additional detail. Drilling Rigs We enter into daywork contracts for drilling rigs with third party service contractors to support the development and exploitation of undeveloped reserves and acreage. Our drilling rig arrangements are typically structured with a term that is in effect until drilling operations are completed on a contractually specified well or well pad. Upon mutual agreement with the contractor, we typically have the option to extend the contract term for additional wells or well pads by providing thirty days’ notice prior to the end of the original contract term. We have concluded that our drilling rig arrangements represent short-term operating leases with a lease term that equals the period of time required to complete drilling operations on the contractually specified well or well pad (that is, generally one to a few months from commencement of drilling). We do not include the option to extend the drilling rig contract in the lease term due to the continuously evolving nature of our drilling schedules, which requires significant flexibility in the structure of the term of these arrangements, and the potential volatility in commodity prices in an annual period. We have further elected to apply the practical expedient for short-term leases to our drilling rig leases. Accordingly, we do not apply the lease recognition requirements to our drilling rig contracts, and we recognize lease payments related to these arrangements in capital expenditures on a straight-line basis over the lease term. Refer to “Practical Expedients & Accounting Policy Elections” below for additional detail. Other Production Equipment We rent other production equipment, primarily electric submersible pumps, from third party vendors to be used in our production operations. These arrangements are typically structured with a non-cancelable term of 1 to 3 months and often continue thereafter on a month-to-month basis subject to termination by either party with thirty days’ notice. We have concluded that we are not reasonably certain of executing the month-to-month renewal options beyond a twelve month period based on the historical term for which we have used other production equipment, and, therefore, our other equipment agreements represent operating leases with a lease term up to twelve months. We have further elected to apply the practical expedient for short-term leases to our other production equipment contracts. Accordingly, we do not apply the lease recognition requirements to these contracts, and we recognize lease payments related to these arrangements in profit or loss on a straight-line basis over the lease term. Refer to “Practical Expedients & Accounting Policy Elections” below for additional detail. Fleet Vehicles We execute fleet vehicle leases with a third party vendor in support of our day-to-day drilling and production operations. Our vehicle leases are typically structured with a term of 18 to 48 months. We have concluded that the majority of our vehicle leases represent operating leases. Significant Judgments Discount Rate Our leases typically do not provide an implicit rate, and thus, we are required to use our incremental borrowing rate in determining the present value of lease payments based on the information available at commencement date. Our incremental borrowing rate reflects the rate of interest that we would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In order to determine our incremental borrowing rate, we utilized our current credit rating as well as best available market data, which includes public bond information for publicly traded upstream energy companies with similar credit ratings, to estimate our unsecured borrowing rate and applied adjustments to that rate to account for the effect of collateral. Legacy has determined the discount rate as of January 1, 2019 using end of day December 31, 2018 market data. This discount rate was used in the transition to ASC 842 as well as all new leases executed within 2019. Legacy intends to update the discount rate annually thereafter on January 1 to be used for all new leases within the year (for example, the discount rate will be updated as of January 1, 2020 to be applied to all new leases in 2020). In the event a material lease is executed within a fiscal year or there have been material changes in the market that would impact Legacy’s discount rate, Legacy will evaluate whether an intra-year update of the discount rate is required. Variable Lease Cost Practical Expedients & Accounting Policy Elections Certain of our lease agreements include lease and non-lease components. For all current asset classes with multiple component types, we have utilized the practical expedient that exempts us from separating lease components from non-lease components. Accordingly, we account for the lease and non-lease components in an arrangement as a single lease component. |
Revenue Recognition | Oil, NGL and natural gas sales revenues are generally recognized at the point in time that control of the product is transferred to the customer and collectability is reasonably assured. This generally occurs when oil or natural gas has been delivered to a pipeline or truck. A more detailed summary of the sale of each product type is included below. Oil Sales Legacy's oil sales contracts are generally structured such that Legacy sells its oil production to the purchaser at a contractually specified delivery point at or near the wellhead. The crude oil production is priced on the delivery date based upon prevailing index prices less certain deductions related to oil quality and physical location. Legacy recognizes revenue when control transfers to the purchaser upon delivery at the net price received from purchaser. NGL and Natural Gas Sales Under Legacy's gas processing contracts, Legacy delivers wet gas to a midstream processing entity at the wellhead or the inlet of the midstream processing entity’s system. The midstream processing entity processes the natural gas and remits proceeds to Legacy for the resulting sales of NGLs and residue gas. In these scenarios, Legacy evaluates whether it is the principal or the agent in the transaction. In virtually all of Legacy's gas processing contracts, Legacy has concluded that it is the agent, and the midstream processing entity is Legacy's customer. Accordingly, Legacy recognizes revenue upon delivery based on the net amount of the proceeds received from the midstream processing entity. Proceeds are generally tied to the prevailing index prices for residue gas and NGLs less deductions for gathering, processing, transportation and other expenses. Under Legacy's dry gas sales that do not require processing, Legacy sells its natural gas production to third party purchasers at a contractually specified delivery point at or near the wellhead. Pricing provisions are tied to a market index, with certain deductions based on, among other factors, whether a well delivers to a gathering or transmission line, quality of natural gas, and prevailing supply and demand conditions, so that the price of the natural gas fluctuates to remain competitive with other available natural gas supplies. Legacy recognizes revenue upon delivery of the natural gas to third party purchasers based on the relevant index price net of deductions. Imbalances Natural gas imbalances occur when Legacy sells more or less than its entitled ownership percentage of total natural gas production. Any amount received in excess of its share is treated as a liability. If Legacy receives less than its entitled share, the underproduction is recorded as a receivable. Legacy did not have any significant natural gas imbalance positions as of June 30, 2019 and December 31, 2018. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of components of accrued oil and natural gas liabilities | Below are the components of accrued oil and natural gas liabilities as of June 30, 2019 and December 31, 2018: June 30, 2019 December 31, 2018 (In thousands) Accrued lease operating expense $ 19,726 $ 22,750 Accrued capital expenditutres 9,184 41,227 Revenue payable to joint interest owners 18,050 24,690 Accrued ad valorem tax 7,363 5,255 Other 4,467 4,964 $ 58,790 $ 98,886 |
Chapter 11 Proceedings, Abili_2
Chapter 11 Proceedings, Ability to Continue as a Going Concern and Covenant Violations (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Reorganizations [Abstract] | |
Condensed Balance Sheet | The following table summarizes the components of liabilities subject to compromise included on the condensed consolidated balance sheet: June 30, 2019 (In thousands) Debt, net $ 757,449 Accrued interest payable 29,478 Accounts payable 277 Liabilities subject to compromise $ 787,204 The Company has discontinued recording interest on debt classified as liabilities subject to compromise on the Petition Date. Contractual interest on liabilities subject to compromise not reflected in the consolidated statements of operations was approximately $2.7 million, representing interest expense from the Petition Date through June 30, 2019. |
Condensed Income Statement | The following table summarizes the components of reorganization items included on the condensed consolidated statements of operations: Three Months and Six Months Ended June 30, 2019 (In thousands) Professional advisory fees $ 1,960 Reorganization, items net $ 1,960 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Debt consists of the following as of June 30, 2019 and December 31, 2018: June 30, December 31, 2019 2018 (In thousands) Current debt Credit Facility due 2019 $ 475,500 $ 541,000 Second Lien Term Loans due 2020 — 338,626 Debtor in Possession (DIP) 94,177 — Unamortized debt issuance costs — (17,332) Unamortized discount on Second Lien Term Loans — (5,648) Total current debt, net $ 569,677 856,646 Second Lien Term Loans due 2020 339,812 — 8% Senior Notes due 2020 208,885 208,885 6.625% Senior Notes due 2021 129,529 131,279 8% Convertible Senior Notes due 2023 107,527 128,103 Unamortized debt issuance costs (24,930) (31,517) Unamortized discount on Senior Notes (3,374) (3,827) Total $ 757,449 $ 432,923 Less liabilities subject to compromise (757,449) — Total long-term debt, net $ — $ 432,923 Total debt $ 569,677 $ 1,289,569 |
Convertible debt | In addition, if a holder exercises its right to convert on or prior to September 19, 2019, such holder will receive an early conversion payment, in cash, per $1,000 principal amount as follows: Early Conversion Date Early Conversion Payment December 1, 2018 through May 31, 2019 $64.22 June 1, 2019 through September 19, 2019 $24.22 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | Legacy has identified three material revenue streams in its business: oil sales, NGL sales, and natural gas sales. Revenue attributable to each of Legacy's identified revenue streams is disaggregated in the table below. Three Months Ended Six Months Ended June 30, 2019 2019 (In thousands) Revenues: Oil sales $ 88,375 $ 166,136 Natural gas liquids (NGL) sales 3,994 8,509 Natural gas sales 25,410 61,631 Total revenues $ 117,779 $ 236,276 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | The following tables sets forth by level within the fair value hierarchy Legacy's Financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2018: December 31, 2018 Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets (In thousands) Assets: Current Commodity derivatives $ — $ 69,288 $ — $ 69,288 $ (4,670) $ 64,618 Interest rate derivatives — 2,044 — 2,044 — 2,044 Noncurrent Commodity derivatives — 3,473 — 3,473 (338) 3,135 Interest rate derivatives — — — — — — Liabilities: Current Commodity derivatives — (4,670) — (4,670) 4,670 — Noncurrent Commodity derivatives — (888) — (888) 338 (550) Net fair value instruments $ — $ 69,247 $ — $ 69,247 $ — $ 69,247 |
Reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 | The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy: Significant Unobservable Inputs (Level 3) Three Months Ended Six Months Ended 2019 2018 2019 2018 (In thousands) Beginning balance $ — $ 9,909 $ — $ (5,088) Total gains — 26,356 — 40,416 Settlements, net — (4,649) — (3,712) Ending balance $ — $ 31,616 $ — $ 31,616 Gains (losses) included in earnings relating to derivatives still held as of June 30, 2019 and 2018 $ — $ 23,158 $ — $ 34,232 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of reconciliation of the changes in fair value of Legacy's commodity derivatives | The following table sets forth a reconciliation of the changes in fair value of Legacy's commodity derivatives for the three and six months ended June 30, 2019 and 2018: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (In thousands) Beginning fair value of commodity derivatives $ 6,166 $ 7,409 $ 67,205 $ 6,318 Total gain (loss) - oil derivatives 7,971 (7,082) (41,600) (7,824) Total gain (loss) - natural gas derivatives (2,258) (2,233) (4,147) (3,195) Crude oil derivative cash settlements paid (received) (900) 6,309 (7,945) 11,203 Natural gas derivative cash settlements paid (received) (10,979) (3,895) (13,513) (5,994) Ending fair value of commodity derivatives $ — $ 508 $ — $ 508 |
Schedule of total impact on interest expense from the mark-to-market and settlements | The total impact on interest expense from the mark-to-market and settlements was as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (In thousands) Beginning fair value of interest rate swaps $ 1,335 $ 2,983 $ 2,044 $ 2,117 Total gain on interest rate swaps (39) 372 (119) 1,315 Cash settlements received (1,296) (271) (1,925) (348) Ending fair value of interest rate swaps $ — $ 3,084 $ — $ 3,084 |
Asset Retirement Obligation (Ta
Asset Retirement Obligation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Asset Retirement Obligation [Abstract] | |
Schedule of asset retirement obligations | The following table reflects the changes in the ARO during the six months ended June 30, 2019 and year ended December 31, 2018: June 30, 2019 December 31, 2018 (In thousands) Asset retirement obligation - beginning of period $ 252,734 $ 274,686 Liabilities incurred with properties acquired — 226 Liabilities incurred with properties drilled 30 65 Liabilities settled during the period (1,828) (2,258) Liabilities associated with properties sold (243) (27,673) Current period accretion 6,442 12,568 Current period revisions to previous estimates — (4,880) Asset retirement obligation - end of period $ 257,135 $ 252,734 |
Stockholders' Deficit_Partner_2
Stockholders' Deficit/Partners' Deficit (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Schedule of computation of basic and diluted income (loss) per unit | The following table sets forth the computation of basic and diluted income per share / unit: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 (In thousands) Net Income (loss) (62,770) $ (50,709) $ (141,148) $ 13,673 Net income attributable to unitholders (62,770) (50,709) (141,148) 13,673 Weighted average number of shares / units outstanding - basic 114,811 104,369 113,028 104,183 Effect of dilutive securities: Restricted shares — — — 894 Weighted average number of shares / units outstanding - diluted 114,811 104,369 113,028 105,077 Basic and Diluted (loss) income per share / units $ (0.55) $ (0.49) $ (1.25) $ 0.13 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of RSU activity | The following table summarizes the status of RSU activity since January 1, 2019: Number of Restricted Stock Units Grant Date Fair Value Outstanding at January 1, 2019 7,302,809 $ 4.88 Granted 516,594 $ 1.32 Cancelled/Forfeited (124,752) $ 4.23 Outstanding at June 30, 2019 7,694,651 $ 4.65 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lease, cost | The components of our total lease cost were as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2019 (In thousands) Operating lease cost $800 $1,636 Finance lease cost: Amortization of right-of-use assets 57 61 Interest on lease liabilities 48 52 Total finance lease costs 105 113 Short-term lease cost $3,210 $6,885 Total $4,115 $8,634 Supplemental cash flow information related to our leases is included in the table below: Three Months Ended Six Months Ended June 30, June 30, 2019 2019 (In thousands) Cash paid for amounts included in lease liabilities: Operating cash flows from operating leases $ 4,010 $ 8,521 Operating cash flows from finance leases 105 113 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 11 $ 9,044 Finance leases 910 2,011 |
Assets and liabilities, lessee | Supplemental balance sheet information related to our leases is included in the table below: Six Months Ended June 30, 2019 (In thousands) Operating Leases Operating lease right-of-use assets $ 3,360 Other current liabilities (1,131) Other long-term liabilities (2,477) Total operating lease liabilities $ (3,608) Finance Leases Other property and equipment 1,005 Accumulated depreciation and amortization (83) Other property and equipment, net $ 922 Other current liabilities (875) Other long-term liabilities (69) Total finance lease liabilities $ (944) Our weighted average remaining lease term and weighted average discount rate by lease classification were as follows: Six Months Ended June 30, 2019 Weighted Average Remaining Lease Term (Years) Operating leases 1.73 Finance leases 2.59 Weighted Average Discount Rate Operating leases 24.41 % Finance leases 24.41 % |
Lessee, operating lease, liability, maturity | Our lease liabilities with enforceable contract terms that are greater than one year mature as follows: Operating Leases Finance Leases (in thousands) Year 1 $ 2,867 $ 519 Year 2 1,123 480 Year 3 291 245 Year 4 199 42 Year 5 67 — Thereafter — — Total lease payments $ 4,547 $ 1,286 Less imputed interest (939) (342) Total $ 3,608 $ 944 |
Finance lease, liability, maturity | Our lease liabilities with enforceable contract terms that are greater than one year mature as follows: Operating Leases Finance Leases (in thousands) Year 1 $ 2,867 $ 519 Year 2 1,123 480 Year 3 291 245 Year 4 199 42 Year 5 67 — Thereafter — — Total lease payments $ 4,547 $ 1,286 Less imputed interest (939) (342) Total $ 3,608 $ 944 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Accrued Oil and Natural Gas Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued capital expenditures | $ 19,726 | $ 22,750 |
Accrued lease operating expense | 9,184 | 41,227 |
Revenue payable to joint interest owners | 18,050 | 24,690 |
Accrued ad valorem tax | 7,363 | 5,255 |
Other | 4,467 | 4,964 |
Accrued oil and natural gas liabilities | $ 58,790 | $ 98,886 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | Apr. 01, 2014 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Lessee, Lease, Description [Line Items] | ||||||
Restricted cash | $ 4.1 | $ 3.2 | $ 4.1 | $ 3.2 | $ 3.3 | |
Effective income tax rate | 0.00% | 0.26% | 0.00% | 4.30% | ||
Minimum | Equipment | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Lessee, operating lease, term of contract | 1 month | 1 month | ||||
Minimum | Vehicles | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Lessee, operating lease, term of contract | 18 months | 18 months | ||||
Maximum | Equipment | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Lessee, operating lease, term of contract | 3 months | 3 months | ||||
Maximum | Vehicles | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Lessee, operating lease, term of contract | 48 months | 48 months | ||||
Revolving Credit Facility | Minimum | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Debt instrument, term | 2 years | |||||
Revolving Credit Facility | Maximum | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Debt instrument, term | 10 years |
Chapter 11 Proceedings, Abili_3
Chapter 11 Proceedings, Ability to Continue as a Going Concern and Covenant Violations - Components of Liabilities Subject to Compromise - Narrative (Details) - USD ($) | Aug. 02, 2019 | Jun. 30, 2019 |
Debt Instrument [Line Items] | ||
Liabilities subject to compromise, contractual interest on liabilities | $ 2,700,000 | |
6.625% Senior Notes due 2021 | Senior notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 6.625% | |
8% Senior Notes due 2020 | Senior notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 8.00% | |
8% Notes Due 2023 | Senior notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 8.00% | |
Revolving Credit Facility | Exit facility | Secured debt | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 500,000,000 | |
Supporting creditors plan | Subsequent Event | ||
Debt Instrument [Line Items] | ||
Pro rata share percentage to be issued | 51.40% | |
Pro rata share percentage due to holders of claims | 2.50% | |
Plan of reorganization, equity securities issued or to be issued, value | $ 66,500,000 | |
Share premium percentage of common stock | 1.50% | |
Committed equity investment | $ 189,800,000 | |
Sale of stock, number of shares issuable in transaction | $ 125,000,000 | |
Supporting lenders plan | Subsequent Event | ||
Debt Instrument [Line Items] | ||
Pro rata share percentage to be issued | 98.00% | |
Pro rata share percentage due to holders of claims | 2.00% | |
Plan of reorganization, equity securities issued or to be issued, value | $ 100,000,000 | |
Committed equity investment | $ 200,000,000 |
Chapter 11 Proceedings, Abili_4
Chapter 11 Proceedings, Ability to Continue as a Going Concern and Covenant Violations - Components of Liabilities Subject to Compromise (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Reorganizations [Abstract] | ||
Debt, net | $ 757,449 | $ 0 |
Accrued interest payable | 29,478 | |
Accounts payable | 277 | |
Liabilities subject to compromise | $ 787,204 | $ 0 |
Chapter 11 Proceedings, Abili_5
Chapter 11 Proceedings, Ability to Continue as a Going Concern and Covenant Violations - Components of Reorganization Items Included on the Condensed Consolidated Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Reorganizations [Abstract] | ||||
Professional advisory fees | $ 1,960 | $ 1,960 | ||
Reorganization, items net | $ 1,960 | $ 0 | $ 1,960 | $ 0 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Debt issuance costs, current, net | $ 0 | $ (17,332) | |
Total current debt, net | 569,677 | 856,646 | |
Long-term debt, gross | 757,449 | 432,923 | |
Unamortized discount on Second Lien Term Loans and Senior Notes | (24,930) | (31,517) | |
Unamortized debt issuance costs | (3,374) | (3,827) | |
Less liabilities subject to compromise | (757,449) | 0 | |
Total long-term debt, net | 0 | 432,923 | |
Total debt, net | 569,677 | 1,289,569 | |
Second Lien Term Loan Due in 2020 | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross, current | 0 | 338,626 | |
Unamortized discount, current | 0 | (5,648) | |
Long-term debt, gross | $ 339,812 | $ 0 | |
Senior notes | 8% Senior Notes due 2020 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 8.00% | ||
Long-term debt, gross | $ 208,885 | 208,885 | |
Senior notes | 6.625% Senior Notes due 2021 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 6.625% | ||
Long-term debt, gross | $ 129,529 | 131,279 | |
Senior notes | 8% Notes Due 2023 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 8.00% | ||
Long-term debt, gross | $ 107,527 | 128,103 | |
Line of Credit | DIP Credit Agreement | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross, current | 94,177 | 0 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross, current | 475,500 | ||
Revolving Credit Facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross, current | $ 475,500 | $ 541,000 |
Debt - DIP Credit Agreement (De
Debt - DIP Credit Agreement (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | Apr. 01, 2014 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Revolving long-term debt | $ 475,500,000 | ||
Long-term debt, gross, current | $ 475,500,000 | ||
Interest rate at period end | 9.63% | ||
Letter of Credit | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 2,000,000 | ||
Line of Credit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross, current | $ 475,500,000 | $ 541,000,000 | |
Line of Credit | DIP Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 350,000,000 | ||
Long-term debt, gross, current | 94,177,000 | $ 0 | |
Line of Credit | DIP Credit Agreement | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 100,000,000 | ||
Unused capacity, commitment fee percentage | 1.00% | ||
Revolving long-term debt | $ 0 | ||
Unused borrowing capacity | 100,000,000 | ||
Line of Credit | DIP Credit Agreement | Interim Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 35,000,000 | ||
Line of Credit | DIP Credit Agreement | Letter of Credit | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 1,000,000 | ||
Line of Credit | DIP Credit Agreement | Alternate base rate | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 4.25% | ||
Line of Credit | DIP Credit Agreement | London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5.25% | ||
Refinancing Term Loan | DIP Credit Agreement | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Remaining borrowing capacity | $ 0 | ||
Maximum borrowing capacity | $ 250,000,000 | ||
Stated interest rate | 3.50% | ||
Long-term debt, gross, current | $ 250,000,000 | ||
Interest rate at period end | 10.38% |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) | 6 Months Ended | |||||||
Jun. 30, 2019USD ($) | May 22, 2019USD ($) | Dec. 31, 2018 | Oct. 01, 2018 | Sep. 20, 2018 | Oct. 05, 2017USD ($) | Jul. 01, 2017 | Apr. 01, 2014USD ($) | |
Revolving Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Minimum percent of total property value securing credit agreement | 95.00% | |||||||
Borrowing base | $ 570,000,000 | $ 575,000,000 | ||||||
Ratio of indebtedness to earnings before interest, taxes, depreciation and amortization required for distributions, maximum | 3 | 4 | ||||||
Debt instrument, covenant, lender commitment, maximum | 20.00% | 15.00% | ||||||
Ratio of indebtedness to earnings before interest, taxes, depreciation and amortization, maximum | 4.5 | 2.50 | ||||||
Ratio of EBITDA to interest expense, minimum | 2 | |||||||
Ratio of current assets to current liabilities, minimum | 1 | |||||||
Net present value of proved oil and gas properties, discount rate | 10.00% | |||||||
Minimum required cash and cash equivalents to secured debt ratio | 1 | |||||||
Long-term debt, gross, current | $ 475,500,000 | |||||||
Interest rate at period end | 9.63% | |||||||
Interest paid | $ 21,900,000 | |||||||
Letter of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 2,000,000 |
Debt - Second Lien Term Loan Cr
Debt - Second Lien Term Loan Credit Agreement (Details) | Mar. 21, 2019 | Jul. 01, 2020USD ($) | Jun. 30, 2019USD ($) | Jan. 01, 2019 | Dec. 31, 2018USD ($) | Sep. 20, 2018 | Oct. 25, 2016USD ($) |
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 757,449,000 | $ 432,923,000 | |||||
Second Lien Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross, current | $ 339,800,000 | ||||||
Debt instrument, covenant, lender commitment, maximum | 20.00% | 15.00% | |||||
Second Lien Term Loan | $300 Million Term Loan at 12% | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 400,000,000 | $ 300,000,000 | |||||
Long-term debt, upfront fee | 2.00% | ||||||
Stated interest rate | 12.00% | ||||||
Unused borrowing capacity | $ 60,200,000 | ||||||
Minimum required cash and cash equivalents to secured debt ratio | 1 | 0.85 | 0.85 | ||||
Ratio of indebtedness to earnings before interest, taxes, depreciation and amortization required for distributions, maximum | 3 | 4 | |||||
Ratio of secured debt to EBITDA | 4.50 | ||||||
Scenario, Forecast | Senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 15,000,000 | ||||||
Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross, current | $ 475,500,000 | ||||||
Minimum required cash and cash equivalents to secured debt ratio | 1 | ||||||
Ratio of indebtedness to earnings before interest, taxes, depreciation and amortization required for distributions, maximum | 3 | 4 | |||||
Debt instrument, covenant, lender commitment, maximum | 20.00% | 15.00% | |||||
Revolving Credit Facility | Twelfth Amendment Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate, increase (decrease) | 2.25% |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) | Apr. 01, 2019USD ($) | Sep. 20, 2018USD ($)shares | Dec. 31, 2017USD ($) | Jun. 01, 2016shares | Dec. 04, 2012USD ($) | Sep. 30, 2018USD ($)shares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)d$ / sharesshares | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($)shares | Dec. 31, 2016USD ($) | May 13, 2014USD ($) | May 28, 2013USD ($) |
Debt Instrument [Line Items] | ||||||||||||||
Gain on extinguishment of debt (Note 3) | $ 0 | $ 0 | $ 13,105,000 | $ 51,693,000 | ||||||||||
Long-term debt, gross | $ 757,449,000 | 757,449,000 | $ 432,923,000 | |||||||||||
Payments of long-term debt | $ 80,000,000 | $ 375,384,000 | ||||||||||||
Common stock, shares, outstanding (in shares) | shares | 114,810,671 | 114,810,671 | 109,442,278 | |||||||||||
Threshold consecutive trading days | d | 30 | |||||||||||||
8% Senior Notes due 2020 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt conversion, converted instrument, shares issued (in shares) | shares | 1,000,000 | |||||||||||||
8% Notes Due 2023 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Common stock shares issued (in shares) | shares | 105,020 | |||||||||||||
Common stock, shares, outstanding (in shares) | shares | 105,020 | |||||||||||||
Senior notes | 8% Senior Notes due 2020 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stated interest rate | 8.00% | 8.00% | ||||||||||||
Aggregate principal amount | $ 300,000,000 | $ 21,000,000 | $ 3,100,000 | |||||||||||
Issuance percent of par | 97.848% | |||||||||||||
Gain on extinguishment of debt (Note 3) | $ 1,400,000 | |||||||||||||
Face amount repurchased | $ 52,000,000 | |||||||||||||
Debt extinguished | $ 15,000,000 | |||||||||||||
Interest payable | $ 8,400,000 | $ 8,400,000 | ||||||||||||
Long-term debt, gross | $ 208,885,000 | $ 208,885,000 | 208,885,000 | |||||||||||
Senior notes | 8% Senior Notes due 2020 | Change in Control | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Redemption price percentage | 101.00% | |||||||||||||
Senior notes | 6.625% Senior Notes due 2021 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stated interest rate | 6.625% | 6.625% | ||||||||||||
Aggregate principal amount | $ 300,000,000 | $ 250,000,000 | ||||||||||||
Issuance percent of par | 99.00% | 98.405% | ||||||||||||
Face amount repurchased | $ 187,000,000 | $ 117,300,000 | ||||||||||||
Interest payable | $ 4,300,000 | $ 4,300,000 | ||||||||||||
Long-term debt, gross | $ 129,529,000 | $ 129,529,000 | 131,279,000 | |||||||||||
Payments of long-term debt | $ 132,000,000 | |||||||||||||
Senior notes | 6.625% Senior Notes due 2021 | Change in Control | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Redemption price percentage | 101.00% | |||||||||||||
Senior notes | 8% Notes Due 2023, Tranche 1 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | $ 21,000,000 | |||||||||||||
Senior notes | 8% Notes Due 2023, Tranche 2 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | 109,000,000 | |||||||||||||
Senior notes | 8% Notes Due 2023 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stated interest rate | 8.00% | 8.00% | ||||||||||||
Redemption price percentage | 100.00% | |||||||||||||
Interest payable | $ 4,300,000 | $ 4,300,000 | ||||||||||||
Long-term debt, gross | $ 107,527,000 | $ 107,527,000 | $ 128,103,000 | |||||||||||
Fair value of the liability component | 101,000,000 | |||||||||||||
Debt discount | 29,000,000 | |||||||||||||
Conversion ratio | 166.6667 | |||||||||||||
Conversion price (in usd per share) | $ / shares | $ 6 | $ 6 | ||||||||||||
Threshold trading days | d | 20 | |||||||||||||
Senior notes | 8% Notes Due 2023 | Change in Control | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Redemption price percentage | 101.00% | |||||||||||||
Legacy Reserves Finance Corporation | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Ownership interest | 100.00% | 100.00% | ||||||||||||
Limited Partner | Partners' Deficit | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Units issued in exchange for Standstill Agreement (in units) | shares | 2,719,124 | |||||||||||||
Senior notes | 8% Notes Due 2020, Tranche 1 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Extinguishment of debt | 21,000,000 | |||||||||||||
Senior notes | 6.625% Percent Notes Due 2021, Tranche 2 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Extinguishment of debt | $ 109,000,000 | |||||||||||||
Debt Instrument, Redemption, Period One | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Conversion price (in usd per share) | $ / shares | 64.22 | $ 64.22 | ||||||||||||
Debt Instrument, Redemption, Period Two | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Conversion price (in usd per share) | $ / shares | $ 24.22 | $ 24.22 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 117,779 | $ 139,281 | $ 236,276 | $ 276,760 |
Oil Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 88,375 | 99,799 | 166,136 | 193,210 |
Natural Gas Liquids Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,994 | 5,735 | 8,509 | 13,131 |
Natural Gas Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 25,410 | $ 33,747 | $ 61,631 | $ 70,419 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Officer | 6 Months Ended |
Jun. 30, 2019 | |
Loss Contingencies [Line Items] | |
Employment agreements with officers, severance pay consideration period, minimum | 12 months |
Employment agreements with officers, severance pay consideration period, maximum | 36 months |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Net fair value instruments | $ 69,247 | ||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Net fair value instruments | 0 | ||||
Significant Other Observable Inputs (Level 2) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Net fair value instruments | 69,247 | ||||
Significant Unobservable Inputs (Level 3) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Net fair value instruments | 0 | ||||
Reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 | |||||
Beginning balance | $ 0 | $ 9,909 | $ 0 | $ (5,088) | |
Total gains (losses) | 0 | 26,356 | 0 | 40,416 | |
Settlements, net | 0 | (4,649) | 0 | (3,712) | |
Ending balance | 0 | 31,616 | 0 | 31,616 | |
Significant Unobservable Inputs (Level 3) | Derivative assets | |||||
Reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 | |||||
Gains (losses) included in earnings relating to derivatives still held as of March 31, 2019 and 2018 | $ 0 | $ 23,158 | $ 0 | $ 34,232 | |
Derivatives Asset Current | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 69,288 | ||||
Derivative asset, gross amounts offset | (4,670) | ||||
Derivative asset, total | 64,618 | ||||
Derivatives Asset Current | Interest rate contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 2,044 | ||||
Derivative asset, gross amounts offset | 0 | ||||
Derivative asset, total | 2,044 | ||||
Derivatives Asset Current | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 0 | ||||
Derivatives Asset Current | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 0 | ||||
Derivatives Asset Current | Significant Other Observable Inputs (Level 2) | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 69,288 | ||||
Derivatives Asset Current | Significant Other Observable Inputs (Level 2) | Interest rate contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 2,044 | ||||
Derivatives Asset Current | Significant Unobservable Inputs (Level 3) | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 0 | ||||
Derivatives Asset Current | Significant Unobservable Inputs (Level 3) | Interest rate contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 0 | ||||
Derivatives Asset Noncurrent | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 3,473 | ||||
Derivative asset, gross amounts offset | (338) | ||||
Derivative asset, total | 3,135 | ||||
Derivatives Asset Noncurrent | Interest rate contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 0 | ||||
Derivative asset, gross amounts offset | 0 | ||||
Derivative asset, total | 0 | ||||
Derivatives Asset Noncurrent | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 0 | ||||
Derivatives Asset Noncurrent | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 0 | ||||
Derivatives Asset Noncurrent | Significant Other Observable Inputs (Level 2) | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 3,473 | ||||
Derivatives Asset Noncurrent | Significant Other Observable Inputs (Level 2) | Interest rate contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 0 | ||||
Derivatives Asset Noncurrent | Significant Unobservable Inputs (Level 3) | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 0 | ||||
Derivatives Asset Noncurrent | Significant Unobservable Inputs (Level 3) | Interest rate contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative asset, gross | 0 | ||||
Derivatives Liability Current | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative liability, fair value, gross liability | (4,670) | ||||
Derivative liability, gross amounts offset | 4,670 | ||||
Derivative liability | 0 | ||||
Derivatives Liability Current | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative liability, fair value, gross liability | 0 | ||||
Derivatives Liability Current | Significant Other Observable Inputs (Level 2) | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative liability, fair value, gross liability | (4,670) | ||||
Derivatives Liability Current | Significant Unobservable Inputs (Level 3) | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative liability, fair value, gross liability | 0 | ||||
Derivatives Liability Noncurrent | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative liability, fair value, gross liability | (888) | ||||
Derivative liability, gross amounts offset | 338 | ||||
Derivative liability | (550) | ||||
Derivatives Liability Noncurrent | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative liability, fair value, gross liability | 0 | ||||
Derivatives Liability Noncurrent | Significant Other Observable Inputs (Level 2) | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative liability, fair value, gross liability | (888) | ||||
Derivatives Liability Noncurrent | Significant Unobservable Inputs (Level 3) | Commodity derivatives | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative liability, fair value, gross liability | $ 0 |
Fair Value Measurements - Nonre
Fair Value Measurements - Nonrecurring (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Impairment of oil and gas properties | $ 8.8 |
Revolving Credit Facility | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Revolving long-term debt | 475.5 |
8% Senior Notes due 2020 | Senior notes | Quoted Prices in Active Markets for Identical Assets (Level 1) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value of notes payable | 9.8 |
6.625% Senior Notes due 2021 | Senior notes | Quoted Prices in Active Markets for Identical Assets (Level 1) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value of notes payable | 5.9 |
8% Notes Due 2023 | Senior notes | Quoted Prices in Active Markets for Identical Assets (Level 1) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value of notes payable | 3.8 |
Oil and Gas Properties | Significant Unobservable Inputs (Level 3) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Property, plant and equipment, gross | 14.3 |
Oil and Gas Properties | Nonrecurring | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Property, plant, and equipment, fair value disclosure | $ 5.4 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Commodity Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Realized and Unrealized Gains (Losses) Related to Derivatives [Roll Forward] | ||||
Total gain (loss) on derivatives | $ (47,790) | $ (10,052) | ||
Derivative cash settlements paid (received) | (21,458) | 5,209 | ||
Not designated as hedging instrument | Commodity contract | ||||
Realized and Unrealized Gains (Losses) Related to Derivatives [Roll Forward] | ||||
Beginning fair value of derivatives | $ 6,166 | $ 7,409 | 67,205 | 6,318 |
Ending fair value of derivatives | 0 | 508 | 0 | 508 |
Not designated as hedging instrument | Commodity contract | Oil | ||||
Realized and Unrealized Gains (Losses) Related to Derivatives [Roll Forward] | ||||
Total gain (loss) on derivatives | 7,971 | (7,082) | (41,600) | (7,824) |
Derivative cash settlements paid (received) | (900) | 6,309 | (7,945) | 11,203 |
Not designated as hedging instrument | Commodity contract | Natural gas | ||||
Realized and Unrealized Gains (Losses) Related to Derivatives [Roll Forward] | ||||
Total gain (loss) on derivatives | (2,258) | (2,233) | (4,147) | (3,195) |
Derivative cash settlements paid (received) | $ (10,979) | $ (3,895) | $ (13,513) | $ (5,994) |
Derivative Financial Instrume_4
Derivative Financial Instruments - Schedule of Derivatives, Gain (Loss) on Derivative Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Realized and Unrealized Gains (Losses) Related to Derivatives [Roll Forward] | ||||
Cash settlements received | $ (21,458) | $ 5,209 | ||
Interest rate swaps | Not designated as hedging instrument | ||||
Realized and Unrealized Gains (Losses) Related to Derivatives [Roll Forward] | ||||
Beginning fair value of derivatives | $ 1,335 | $ 2,983 | 2,044 | 2,117 |
Cash settlements received | (1,296) | (271) | (1,925) | (348) |
Ending fair value of derivatives | 0 | 3,084 | 0 | 3,084 |
Interest rate swaps | Not designated as hedging instrument | Interest expense | ||||
Realized and Unrealized Gains (Losses) Related to Derivatives [Roll Forward] | ||||
Total gain on interest rate swaps | $ (39) | $ 372 | $ (119) | $ 1,315 |
Asset Retirement Obligation (De
Asset Retirement Obligation (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Changes in the ARO | ||
Asset retirement obligation - beginning of period | $ 252,734 | $ 274,686 |
Liabilities incurred with properties acquired | 0 | 226 |
Liabilities incurred with properties drilled | 30 | 65 |
Liabilities settled during the period | (1,828) | (2,258) |
Liabilities associated with properties sold | (243) | (27,673) |
Current period accretion | 6,442 | 12,568 |
Current period revisions to previous estimates | 0 | (4,880) |
Asset retirement obligation - end of period | $ 257,135 | $ 252,734 |
Stockholders' Deficit_Partner_3
Stockholders' Deficit/Partners' Deficit - Income (loss) per unit (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Equity [Abstract] | ||||||
Net income (loss) | $ (62,770) | $ (78,378) | $ (50,709) | $ 64,382 | $ (141,148) | $ 13,673 |
Net income attributable to unitholders | $ (62,770) | $ (50,709) | $ (141,148) | $ 13,673 | ||
Weighted average number of units outstanding (in shares) | 114,811,000 | 104,369,000 | 113,028,000 | 104,183,000 | ||
Effect of dilutive securities: | ||||||
Restricted and phantom units (in shares) | 0 | 0 | 0 | 894,000 | ||
Weighted average units and potential units outstanding (in shares) | 114,811,000 | 104,369,000 | 113,028,000 | 105,077,000 | ||
Loss per share - basic & diluted (in dollars per share) | $ (0.55) | $ (0.49) | $ (1.25) | $ 0.13 | ||
Restricted stock units (RSUs) | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive restricted units excluded from computation of EPS (in shares) | 135,430 | 7,694,651 | 135,430 | |||
Phantom share units (PSUs) | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive restricted units excluded from computation of EPS (in shares) | 1,424,114 | 1,424,114 | ||||
Convertible Debt Securities | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive restricted units excluded from computation of EPS (in shares) | 17,921,170 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | Oct. 16, 2018director$ / sharesshares | Sep. 25, 2018director$ / sharesshares | Sep. 20, 2018shares | May 15, 2018director$ / sharesshares | Jun. 30, 2019USD ($)shares | Jun. 30, 2018USD ($)shares | Dec. 31, 2018shares | Sep. 19, 2018shares | Mar. 15, 2006shares |
Long term incentive plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Units authorized for issuance (in shares) | 5,000,000 | ||||||||
Cumulative number of instruments granted (in shares) | 3,459,197 | ||||||||
Omnibus Incentive Plan, 2018 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Units authorized for issuance (in shares) | 10,500,000 | ||||||||
Percentage increase in plan for shares issued | 0.10 | ||||||||
Grants in period, net of forfeitures (in shares) | 7,727,221 | ||||||||
Grants of award net forfeitures (in shares) | 32,570 | ||||||||
Non-employee directors | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Individuals eligible for plan | director | 1 | 4 | |||||||
Grants of award net forfeitures (in shares) | 12,450 | 5,030 | |||||||
Employee Stock Option | Long term incentive plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Cumulative number of instruments granted (in shares) | 266,014 | ||||||||
Restricted stock units (RSUs) | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation expense | $ | $ 8.3 | ||||||||
Non-option equity instruments, outstanding (in shares) | 7,694,651 | 7,302,809 | |||||||
Award vesting period | 3 years | ||||||||
Unrecognized compensation costs | $ | $ 23.3 | ||||||||
Unrecognized compensation costs, period of recognition | 2 years 8 months 23 days | ||||||||
Restricted stock units (RSUs) | Long term incentive plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Cumulative number of instruments granted (in shares) | 988,207 | ||||||||
Restricted stock units (RSUs) | Omnibus Incentive Plan, 2018 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Non-option equity instruments, outstanding (in shares) | 7,694,651 | ||||||||
Restricted stock units (RSUs) | Executive officers | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock issued to executive employees (in shares) | 516,594 | ||||||||
Phantom share units (PSUs) | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation expense | $ | $ 23.2 | ||||||||
Partnership unit conversion ratio | 1 | ||||||||
Phantom units settled in cash (in shares) | 391,674 | ||||||||
Phantom units that settle in units vested (in shares) | 1,032,440 | ||||||||
Phantom share units (PSUs) | Long term incentive plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Cumulative number of instruments granted (in shares) | 1,424,114 | ||||||||
Unrestricted units | Long term incentive plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Cumulative number of instruments granted (in shares) | 780,862 | ||||||||
Unrestricted units | Non-employee directors | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (in shares) | 6,010 | ||||||||
Individuals eligible for plan | director | 4 | ||||||||
Value of each unit at issuance (in dollars per share) | $ / shares | $ 8.69 | ||||||||
Value of each share at issuance (in dollars per share) | $ / shares | $ 5.02 | $ 4.97 | |||||||
Unrestricted units | Director 2 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Individuals eligible for plan | director | 2 | ||||||||
Stock Appreciation Rights (SARs) | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation expense | $ | $ 1.5 | ||||||||
Restricted Stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation expense | $ | $ 0.4 |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU Activity (Details) - Restricted stock units (RSUs) | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Number of Restricted Stock Units | |
Outstanding, beginning balance (in shares) | shares | 7,302,809 |
Granted (in shares) | shares | 516,594 |
Cancelled/forfeited (in shares) | shares | (124,752) |
Outstanding, ending balance (in shares) | shares | 7,694,651 |
Grant Date Fair Value | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 4.88 |
Granted (in dollars per share) | $ / shares | 1.32 |
Cancelled/forfeited (in dollars per share) | $ / shares | 4.23 |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 4.65 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income (loss) before income taxes | $ (62,770) | $ (50,579) | $ (141,148) | $ 14,290 |
Effective income tax rate reconciliation, federal and state income taxes, percent | 0.00% | 4.30% |
Leases - Components of Total Le
Leases - Components of Total Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 800 | $ 1,636 |
Finance lease cost: | ||
Amortization of right-of-use assets | 57 | 61 |
Interest on lease liabilities | 48 | 52 |
Total finance lease costs | 105 | 113 |
Short-term lease cost | 3,210 | 6,885 |
Total | $ 4,115 | $ 8,634 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flows Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Cash paid for amounts included in lease liabilities: | ||
Operating cash flows from operating leases | $ 4,010 | $ 8,521 |
Operating cash flows from finance leases | 105 | 113 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | 11 | 9,044 |
Finance leases | $ 910 | $ 2,011 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
Operating lease right-of-use assets | $ 3,360 |
Other current liabilities | (1,131) |
Other long-term liabilities | (2,477) |
Total operating lease liabilities | (3,608) |
Finance Leases | |
Other property and equipment | 1,005 |
Accumulated depreciation and amortization | (83) |
Other property and equipment, net | 922 |
Other current liabilities | (875) |
Other long-term liabilities | (69) |
Total finance lease liabilities | $ (944) |
Leases - Weighted Average Remai
Leases - Weighted Average Remaining Lease Term and Weighted Average Discount Rate (Details) | Jun. 30, 2019 |
Weighted Average Remaining Lease Term (Years) | |
Operating leases | 1 year 8 months 23 days |
Finance leases | 2 years 7 months 2 days |
Weighted Average Discount Rate | |
Operating leases | 24.41% |
Finance leases | 24.41% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
Year 1 | $ 2,867 |
Year 2 | 1,123 |
Year 3 | 291 |
Year 4 | 199 |
Year 5 | 67 |
Thereafter | 0 |
Total lease payments | 4,547 |
Less imputed interest | (939) |
Total | 3,608 |
Finance Leases | |
Year 1 | 519 |
Year 2 | 480 |
Year 3 | 245 |
Year 4 | 42 |
Year 5 | 0 |
Thereafter | 0 |
Total lease payments | 1,286 |
Less imputed interest | (342) |
Total | $ 944 |
Guarantors (Details)
Guarantors (Details) - Senior notes | 11 Months Ended | |||
May 08, 2014offering | Jun. 30, 2019 | May 13, 2014USD ($) | May 28, 2013USD ($) | |
Debt Instrument [Line Items] | ||||
Number of private offerings | offering | 2 | |||
Percent of subsidiaries owned | 100.00% | |||
6.625% Senior Notes due 2021 | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ | $ 300,000,000 | $ 250,000,000 |
Uncategorized Items - lgcy-2019
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 255,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 255,000 |