Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 12, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | CRK | |
Entity Registrant Name | COMSTOCK RESOURCES INC | |
Entity Central Index Key | 0000023194 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-03262 | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 94-1667468 | |
Entity Address, Address Line One | 5300 Town and Country Blvd. | |
Entity Address, Address Line Two | Suite 500 | |
Entity Address, City or Town | Frisco | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75034 | |
City Area Code | 972 | |
Local Phone Number | 668-8800 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 190,017,482 | |
Title of 12(b) Security | Common Stock, par value $0.50 (per share) | |
Security Exchange Name | NYSE |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and Cash Equivalents | $ 53,243 | $ 23,193 |
Accounts Receivable: | ||
Oil and gas sales | 97,750 | 87,611 |
Joint interest operations | 23,282 | 9,175 |
From affiliates | 13,635 | |
Derivative Financial Instruments | 62,277 | 15,401 |
Income Taxes Receivable | 5,109 | 10,218 |
Other Current Assets | 13,102 | 13,829 |
Total current assets | 268,398 | 159,427 |
Oil and gas properties, successful efforts method: | ||
Proved | 3,863,841 | 1,682,164 |
Unproved | 421,239 | 191,929 |
Other | 6,768 | 4,442 |
Accumulated depreciation, depletion and amortization | (374,838) | (210,556) |
Net property and equipment | 3,917,010 | 1,667,979 |
Goodwill | 335,897 | 350,214 |
Income Taxes Receivable | 5,109 | 10,218 |
Derivative Financial Instruments | 21,983 | |
Operating Lease Right-of-Use Assets | 3,909 | |
Other Assets | 3 | 2 |
Total Assets | 4,552,309 | 2,187,840 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accounts Payable | 231,707 | 138,767 |
Accrued Expenses | 155,756 | 68,086 |
Operating Leases | 1,997 | |
Total current liabilities | 389,460 | 206,853 |
Long-term Debt | 2,508,074 | 1,244,363 |
Deferred Income Taxes | 188,218 | 161,917 |
Long-term Operating Leases | 1,912 | |
Reserve for Future Abandonment Costs | 11,095 | 5,136 |
Other Noncurrent Liabilities | 8,352 | |
Total liabilities | 3,107,111 | 1,618,269 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Common stock — $0.50 par, 400,000,000 and 155,000,000 shares authorized, 185,524,301 and 105,871,064 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 92,762 | 52,936 |
Additional paid-in capital | 879,669 | 452,513 |
Accumulated earnings | 97,767 | 64,122 |
Total stockholders' equity | 1,070,198 | 569,571 |
Total liabilities and stockholders' equity | 4,552,309 | $ 2,187,840 |
Series A 10% Convertible Preferred Stock | ||
Mezzanine Equity: | ||
Preferred Stock | 200,000 | |
Series B 10% Convertible Preferred Stock | ||
Mezzanine Equity: | ||
Preferred Stock | $ 175,000 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Preferred stock, shares authorized | 5,000,000 | |
Preferred stock, shares issued | 385,000 | |
Preferred stock, shares outstanding | 385,000 | |
Common stock, par value | $ 0.50 | $ 0.50 |
Common stock, shares authorized | 400,000,000 | 155,000,000 |
Common stock, shares issued | 185,524,301 | 105,871,064 |
Common stock, shares outstanding | 185,524,301 | 105,871,064 |
Series A 10% Convertible Preferred Stock | ||
Preferred stock, shares issued | 210,000 | |
Preferred stock, shares outstanding | 210,000 | |
Preferred stock, dividend rate | 10.00% | |
Series B 10% Convertible Preferred Stock | ||
Preferred stock, shares issued | 175,000 | |
Preferred stock, shares outstanding | 175,000 | |
Preferred stock, dividend rate | 10.00% |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended |
Aug. 13, 2018 | Sep. 30, 2018 | Sep. 30, 2019 | Aug. 13, 2018 | Sep. 30, 2019 | |
Revenues: | |||||
Total oil and gas sales | $ 32,588 | $ 70,123 | $ 224,444 | $ 166,630 | $ 479,441 |
Operating expenses: | |||||
Production taxes | 707 | 4,051 | 6,966 | 3,659 | 18,732 |
Gathering and transportation | 3,109 | 3,450 | 23,414 | 11,841 | 41,346 |
Lease operating | 3,418 | 7,016 | 29,111 | 21,139 | 58,448 |
Exploration | 241 | 241 | |||
Depreciation, depletion and amortization | 14,082 | 17,820 | 80,247 | 68,032 | 164,684 |
General and administrative | 3,044 | 3,303 | 8,105 | 15,699 | 22,760 |
Loss (gain) on sale of oil and gas properties | (98) | 35,438 | 25 | ||
Total operating expenses | 24,360 | 35,542 | 148,084 | 155,808 | 306,236 |
Operating income | 8,228 | 34,581 | 76,360 | 10,822 | 173,205 |
Other income (expenses): | |||||
Gain (loss) from derivative financial instruments | (83) | (2,015) | 24,858 | 881 | 31,945 |
Other income | 284 | 42 | 92 | 677 | 340 |
Transaction costs | (2,549) | (39,657) | (2,866) | (41,100) | |
Interest expense | (22,140) | (14,845) | (51,015) | (101,203) | (107,434) |
Total other income (expenses) | (24,488) | (16,818) | (65,722) | (102,511) | (116,249) |
Income (loss) before income taxes | (16,260) | 17,763 | 10,638 | (91,689) | 56,956 |
Provision for income taxes | (605) | (3,940) | (3,847) | (1,065) | (15,183) |
Net income (loss) | (16,865) | 13,823 | 6,791 | (92,754) | 41,773 |
Preferred stock dividends | (8,128) | (8,128) | |||
Net income (loss) available to common stockholders | $ (16,865) | $ 13,823 | $ (1,337) | $ (92,754) | $ 33,645 |
Net income (loss) per share: | |||||
Basic and diluted | $ (1.09) | $ 0.13 | $ (0.01) | $ (6.08) | $ 0.26 |
Weighted average shares outstanding: | |||||
Basic | 15,468 | 105,448 | 171,487 | 15,262 | 127,709 |
Diluted | 15,468 | 105,463 | 171,487 | 15,262 | 127,709 |
Natural Gas Sales | |||||
Revenues: | |||||
Total oil and gas sales | $ 32,089 | $ 36,393 | $ 193,506 | $ 147,897 | $ 375,589 |
Oil Sales | |||||
Revenues: | |||||
Total oil and gas sales | $ 499 | $ 33,730 | $ 30,938 | $ 18,733 | $ 103,852 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Common Stock Warrants | Additional Paid-in Capital | Accumulated Earnings (Deficit) |
Beginning Balance at Dec. 31, 2017 | $ (369,272) | $ 7,714 | $ 3,557 | $ 546,696 | $ (927,239) |
Beginning Balance, Shares at Dec. 31, 2017 | 15,428,000 | ||||
Stock-based compensation | 1,601 | $ 261 | 1,340 | ||
Stock-based compensation, Shares | 523,000 | ||||
Income tax withholdings related to equity awards | (365) | $ (26) | (339) | ||
Income tax withholdings related to equity awards, Shares | (53,000) | ||||
Common stock warrants exercised | $ 130 | (2,228) | 2,098 | ||
Common stock warrants exercised, Shares | 260,000 | ||||
Net income (loss) | (41,886) | (41,886) | |||
Ending Balance at Mar. 31, 2018 | (409,922) | $ 8,079 | 1,329 | 549,795 | (969,125) |
Ending Balance, Shares at Mar. 31, 2018 | 16,158,000 | ||||
Beginning Balance at Dec. 31, 2017 | (369,272) | $ 7,714 | 3,557 | 546,696 | (927,239) |
Beginning Balance, Shares at Dec. 31, 2017 | 15,428,000 | ||||
Net income (loss) | (92,754) | ||||
Ending Balance at Aug. 13, 2018 | (458,454) | $ 8,189 | 310 | 553,040 | (1,019,993) |
Ending Balance, Shares at Aug. 13, 2018 | 16,379,000 | ||||
Beginning Balance at Dec. 31, 2017 | $ (369,272) | $ 7,714 | 3,557 | 546,696 | (927,239) |
Beginning Balance, Shares at Dec. 31, 2017 | 15,428,000 | ||||
Common stock warrants exercised, Shares | 246,793 | ||||
Ending Balance at Sep. 30, 2018 | $ 521,111 | $ 52,940 | 454,348 | 13,823 | |
Ending Balance, Shares at Sep. 30, 2018 | 105,879,000 | ||||
Beginning Balance at Mar. 31, 2018 | (409,922) | $ 8,079 | 1,329 | 549,795 | (969,125) |
Beginning Balance, Shares at Mar. 31, 2018 | 16,158,000 | ||||
Stock-based compensation | 1,508 | 1,508 | |||
Income tax withholdings related to equity awards | (4) | (4) | |||
Common stock warrants exercised | $ 52 | (888) | 836 | ||
Common stock warrants exercised, Shares | 103,000 | ||||
Net income (loss) | (34,003) | (34,003) | |||
Ending Balance at Jun. 30, 2018 | (442,421) | $ 8,131 | 441 | 552,135 | (1,003,128) |
Ending Balance, Shares at Jun. 30, 2018 | 16,261,000 | ||||
Stock-based compensation | 803 | $ 50 | 753 | ||
Stock-based compensation, Shares | 100,000 | ||||
Common stock warrants exercised | $ 7 | (131) | 124 | ||
Common stock warrants exercised, Shares | 16,000 | ||||
Common stock issued for debt conversions | 29 | $ 1 | 28 | ||
Common stock issued for debt conversion, Shares | 2,000 | ||||
Net income (loss) | (16,865) | (16,865) | |||
Ending Balance at Aug. 13, 2018 | (458,454) | $ 8,189 | 310 | 553,040 | (1,019,993) |
Ending Balance, Shares at Aug. 13, 2018 | 16,379,000 | ||||
Beginning Balance at Jun. 30, 2018 | (442,421) | $ 8,131 | 441 | 552,135 | (1,003,128) |
Beginning Balance, Shares at Jun. 30, 2018 | 16,261,000 | ||||
Ending Balance at Sep. 30, 2018 | 521,111 | $ 52,940 | 454,348 | 13,823 | |
Ending Balance, Shares at Sep. 30, 2018 | 105,879,000 | ||||
Successor common stock, Value | 140,531 | $ 8,189 | 310 | 132,032 | |
Successor common stock, Shares | 16,379,000 | ||||
Beginning Balance at Aug. 13, 2018 | (458,454) | $ 8,189 | 310 | 553,040 | (1,019,993) |
Beginning Balance, Shares at Aug. 13, 2018 | 16,379,000 | ||||
Vesting of equity awards | 8,826 | $ 514 | 8,312 | ||
Vesting of equity awards, Shares | 1,029,000 | ||||
Stock-based compensation | 329 | $ 211 | 118 | ||
Stock-based compensation, Shares | 423,000 | ||||
Income tax withholdings related to equity awards | (4,695) | $ (272) | (4,423) | ||
Income tax withholdings related to equity awards, Shares | (547,000) | ||||
Jones contribution | 362,692 | $ 44,286 | 318,406 | ||
Jones contribution, Shares | 88,571,000 | ||||
Stock issuance costs | (395) | (395) | |||
Common stock warrants exercised and expired | $ 12 | $ (310) | 298 | ||
Common stock warrants exercised and expired, Shares | 24,000 | ||||
Net income (loss) | 13,823 | 13,823 | |||
Ending Balance at Sep. 30, 2018 | 521,111 | $ 52,940 | 454,348 | 13,823 | |
Ending Balance, Shares at Sep. 30, 2018 | 105,879,000 | ||||
Beginning Balance at Dec. 31, 2018 | 569,571 | $ 52,936 | 452,513 | 64,122 | |
Beginning Balance, Shares at Dec. 31, 2018 | 105,871,000 | ||||
Stock-based compensation | 648 | $ (2) | 650 | ||
Stock-based compensation, Shares | (3,000) | ||||
Net income (loss) | 13,575 | 13,575 | |||
Ending Balance at Mar. 31, 2019 | 583,794 | $ 52,934 | 453,163 | 77,697 | |
Ending Balance, Shares at Mar. 31, 2019 | 105,868,000 | ||||
Beginning Balance at Dec. 31, 2018 | 569,571 | $ 52,936 | 452,513 | 64,122 | |
Beginning Balance, Shares at Dec. 31, 2018 | 105,871,000 | ||||
Net income (loss) | 41,773 | ||||
Ending Balance at Sep. 30, 2019 | 1,070,198 | $ 92,762 | 879,669 | 97,767 | |
Ending Balance, Shares at Sep. 30, 2019 | 185,524,000 | ||||
Beginning Balance at Mar. 31, 2019 | 583,794 | $ 52,934 | 453,163 | 77,697 | |
Beginning Balance, Shares at Mar. 31, 2019 | 105,868,000 | ||||
Stock-based compensation | 623 | $ 37 | 586 | ||
Stock-based compensation, Shares | 74,000 | ||||
Net income (loss) | 21,407 | 21,407 | |||
Ending Balance at Jun. 30, 2019 | 605,824 | $ 52,971 | 453,749 | 99,104 | |
Ending Balance, Shares at Jun. 30, 2019 | 105,942,000 | ||||
Issuance of stock | 467,808 | $ 39,416 | 428,392 | ||
Issuance of stock, Shares | 78,833,000 | ||||
Stock-based compensation | 1,088 | $ 391 | 697 | ||
Stock-based compensation, Shares | 780,000 | ||||
Income tax withholdings related to equity awards | (167) | $ (16) | (151) | ||
Income tax withholdings related to equity awards, Shares | (31,000) | ||||
Jones contribution adjustment | (1,969) | (1,969) | |||
Equity issuance costs | (1,049) | (1,049) | |||
Net income (loss) | 6,791 | 6,791 | |||
Payment of preferred dividends | (8,128) | (8,128) | |||
Ending Balance at Sep. 30, 2019 | $ 1,070,198 | $ 92,762 | $ 879,669 | $ 97,767 | |
Ending Balance, Shares at Sep. 30, 2019 | 185,524,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 2 Months Ended | 7 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Aug. 13, 2018 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 13,823 | $ (92,754) | $ 41,773 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Deferred income taxes | 3,883 | 1,052 | 15,205 |
Loss (gain) on sale of oil and gas properties | (98) | 35,438 | 25 |
Depreciation, depletion and amortization | 17,820 | 68,032 | 164,684 |
(Gain) loss on derivative financial instruments | 2,015 | (881) | (31,945) |
Cash settlements of derivative financial instruments | 191 | 2,842 | 33,382 |
Amortization of debt discount and issuance costs | 822 | 29,457 | 9,206 |
Interest paid in-kind | 25,004 | ||
Stock-based compensation | 329 | 3,912 | 2,359 |
Decrease (increase) in accounts receivable | (44,884) | 2,834 | 48,404 |
Decrease (increase) in other current assets | (1,326) | 337 | 7,137 |
(Decrease) increase in accounts payable and accrued expenses | 11,034 | 10,462 | (7,424) |
Net cash provided by operating activities | 3,609 | 85,735 | 282,806 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Capital expenditures | (59,017) | (150,106) | (308,742) |
Acquisition of Covey Park Energy LLC, net of cash acquired | (693,869) | ||
Prepaid drilling costs | (4,768) | (3,692) | 9,319 |
Proceeds from sale of oil and gas properties | 13,739 | 103,593 | 390 |
Net cash used for investing activities | (50,046) | (50,205) | (992,902) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Borrowings under bank credit facility | 450,000 | 865,577 | 887,000 |
Repayments | (1,291,352) | (49,679) | (72,000) |
Repayments of Covey Park Energy LLC outstanding borrowings and preferred equity | (533,390) | ||
Issuance of common stock | 300,000 | ||
Issuance of Series B Convertible Preferred Stock | 175,000 | ||
Preferred stock dividends paid | (8,128) | ||
Jones contribution | 36,365 | ||
Debt and stock issuance costs | (6,288) | (18,127) | (8,169) |
Income taxes related to equity awards | (4,695) | (369) | (167) |
Net cash provided by (used in) financing activities | (815,970) | 797,402 | 740,146 |
Net increase (decrease) in cash and cash equivalents | (862,407) | 832,932 | 30,050 |
Cash and cash equivalents, beginning of period | 894,187 | 61,255 | 23,193 |
Cash and cash equivalents, end of period | $ 31,780 | $ 894,187 | $ 53,243 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Basis of Presentation These unaudited consolidated financial statements include the accounts of Comstock Resources, Inc. and its wholly-owned subsidiaries (collectively, "Comstock" or the "Company"). The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to those rules and regulations, although Comstock believes that the disclosures made are adequate to make the information presented not misleading. These unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in Comstock's Annual Report on Form 10-K for the year ended December 31, 2018. The results of operations for the period through September 30, 2019 are not necessarily an indication of the results expected for the full year. Jones Contribution On August 14, 2018, Arkoma Drilling, L.P. and Williston Drilling, L.P. (collectively, the "Jones Partnerships") contributed certain oil and gas properties in North Dakota and Montana (the "Bakken Shale Properties") in exchange for 88,571,429 newly issued shares of common stock representing 84% of the Company's then outstanding common stock (the "Jones Contribution"). The Jones Partnerships are wholly owned and controlled by Dallas businessman Jerry Jones and his children (collectively, the "Jones Group"). The Company assessed the Bakken Shale Properties to determine whether they met the definition of a business under US generally accepted accounting principles, determining that they did not meet the definition of a business. As a result, the Jones Contribution was not accounted for as a business combination. Upon the issuance of the shares of Comstock common stock, the Jones Group obtained control over Comstock through their ownership of the Jones Partnerships. Through the Jones Partnerships, the Jones Group owns a majority of the voting common stock as well as the ability to control the composition of the majority of the board of directors of Comstock. As a result of the change of control that occurred upon the issuance of the common stock, the Jones Group controls Comstock and, thereby, continues to control the Bakken Shale Properties. Accordingly, the basis of the Bakken Shale Properties recognized by Comstock was the historical basis of the Jones Group. The historical cost basis of the Bakken Shale Properties contributed was $397.6 million, which was comprised of $554.3 million of capitalized costs less $156.7 million of accumulated depletion, depreciation and amortization. The change in control of Comstock resulted in a new basis for Comstock as the Company elected to apply pushdown accounting pursuant to ASC 805, Business Combinations. The new basis was pushed down to Comstock for financial reporting purposes, resulting in Comstock's assets, liabilities and equity accounts being recognized at fair value upon the closing of the Jones Contribution. References to "Successor" or "Successor Company" relate to the financial position and results of operations of the Company subsequent to August 13, 2018. Reference to "Predecessor" or "Predecessor Company" relate to the financial position and results of operations of the Company on or prior to August 13, 2018. The Company's consolidated financial statements and related footnotes are presented with a black line division which delineates the lack of comparability between amounts presented after August 13, 2018 and dates prior thereto. The following table represents the allocation of fair value related to the assets acquired and the liabilities assumed after giving consideration for final purchase accounting adjustments based on the fair value of Comstock: (In thousands) Fair Value of Comstock's Common Stock $ 149,357 Fair Value of Liabilities Assumed – Current Liabilities 180,452 Long-Term Debt 2,059,560 Deferred Income Taxes 49,391 Reserve for Future Abandonment Costs 4,440 Net Liabilities Assumed 2,293,843 Fair Value of Assets Acquired – Current Assets 936,026 Oil and Gas Properties 1,147,749 Other Property & Equipment 4,440 Income Taxes Receivable 19,086 Other Assets 2 Total Assets 2,107,303 Goodwill $ 335,897 The goodwill that was recognized was primarily attributable to the excess of the fair value of Comstock's common stock over the identifiable assets acquired net of liabilities assumed, measured in accordance with generally accepted accounting principles in the United States. The fair value of oil and gas properties, a Level 3 measurement, was determined using discounted cash flow valuation methodology. Key inputs to the valuation included average oil prices of $79.72 per barrel, average natural gas prices of $3.87 per thousand cubic feet and discount factors of 10% - 25%. The combination of the Bakken Shale Properties with Comstock's Haynesville shale properties results in a Company with adequate resources and liquidity to fully exploit its Haynesville/Bossier shale asset base and to continue to expand its opportunity set with future acquisitions and leasing activity in the basin. During the quarter ended September 30, 2019, the Company finalized the deferred income taxes that were related to the Jones Contribution. Deferred income taxes and goodwill were reduced by $14.3 million in the final valuation. Covey Park Acquisition On July 16, 2019, Comstock acquired Covey Park Energy LLC ("Covey Park") for total consideration of $700.0 million of cash, the issuance of Series A Convertible Preferred Stock with a redemption value of $210.0 million, and the issuance of 28,833,000 shares of common stock (the "Covey Park Acquisition"). In addition to the consideration paid, Comstock assumed $625.0 million of Covey Park's 7.5% senior notes, repaid $380.0 million of Covey Park's then outstanding borrowings under its bank credit facility and redeemed all of Covey Park's preferred equity for $153.4 million. Based on the fair value of the preferred stock issued and the closing price of the Company's common stock of $5.82 per share on July 16, 2019, the transaction was valued at approximately $2.2 billion. Covey Park's operations are focused primarily in the Haynesville / Bossier shale in East Texas and North Louisiana. Funding for the Covey Park Acquisition was provided by the sale of 50.0 million newly issued shares of common stock for $300.0 million and 175,000 shares of newly issued Series B Convertible Preferred Stock for $175.0 million to the Company's majority stockholder and by borrowings under Comstock's amended and restated bank credit facility and cash on hand. In connection with the Covey Park Acquisition, Comstock incurred $41.1 million of advisory and legal fees and other acquisition-related costs. These acquisition costs are included in transaction costs in the Company's consolidated statements of operations. The transaction has been accounted for as a business combination, using the acquisition method. Certain information to finalize the purchase price is not yet available, including the final tax return of Covey Park. The Company expects to complete the purchase price allocation within the twelve month period following the acquisition date, during which time the value of the net assets and liabilities acquired may be revised as appropriate. The following table presents the Company's preliminary purchase price allocation of the assets acquired and liabilities assumed based on their fair values as of the acquisition date: (In thousands) Consideration: Cash Paid $ 700,000 Fair Value of Common Stock Issued 167,808 Fair Value of Series A Preferred Stock Issued 200,000 Total Consideration 1,067,808 Liabilities Assumed: Accounts Payable and Accrued Liabilities 129,622 Derivative Financial Instruments 388 Other Current Liabilities 9,930 Long Term Debt 826,625 Covey Park Preferred Equity 153,390 Non-current Derivative Financial Instruments 186 Asset Retirement Obligations 5,374 Deferred Income Taxes 23,466 Other Non-current Liabilities 9,893 Liabilities Assumed 1,158,874 Total Consideration and Liabilities Assumed $ 2,226,682 Assets Acquired: Cash and Cash Equivalents $ 6,131 Accounts Receivable 86,285 Current Derivative Financial Instruments 51,004 Other Current Assets 5,511 Proved Oil and Natural Gas Properties 1,818,413 Unproved Oil and Natural Gas Properties 237,210 Other Property, Plant and Equipment 2,262 Non-current Derivative Financial Instruments 19,866 Total Assets Acquired $ 2,226,682 The Series A Convertible Preferred Stock was issued with a face value of $210.0 million. Management retained a third-party valuation firm to assess the fair value of the preferred stock. A yield methodology using Level 2 inputs of the Company's publicly traded debt, including the assumption of Covey Park's 7.5% senior notes, resulted in a fair value of $200.0 million. The fair values determined for accounts receivable, accounts payable, accrued drilling costs and other current liabilities were equivalent to the carrying value due to their short-term nature. The fair value of the proved and unproved oil and natural gas properties was derived from estimated future discounted net cash flows, a Level 3 measurement, based on existing production curves and timing of development of those properties. The key factors used in deriving the estimated future cash flows include estimated recoverable reserves, production rates, future operating and development costs, and future commodity prices. Key inputs to the valuation included average oil prices of $74.80 per barrel and average natural gas prices of $3.32 per Mcf utilizing a combination of third-party price estimates and management price forecasts as of the acquisition date. The resulting estimated future cash flows from the acquired assets were discounted at rates ranging from 10% - 25% depending on risk characteristics of reserve categories acquired. Management utilized the assistance of an independent reserve firm and internal resources to estimate the fair value of the oil and natural gas properties. The fair value measurements of long-term debt were estimated based on market prices and represent Level 2 inputs. The fair value measurements of derivative instruments assumed were determined based on fair value measurements consistent with managements valuation methodologies including implied market volatility, contract terms and prices and discount factors as of the close date. These inputs represent Level 2 inputs. The fair values of commodity derivative instruments in an asset position include a measure of counterparty nonperformance risk and the derivative instruments in a liability position include a measure of the Company's own nonperformance risk, each based on the current published credit default swap rates. The fair value of the asset retirement obligations of $5.4 million is included in the oil and natural gas properties with the corresponding liability in the table above. The fair value was based on a discounted cash flow model that included assumptions of current abandonment costs, inflation rates, discount rates and timing of actual abandonment and restoration activities. Due to the inputs and significant assumptions associated with the estimation of asset retirement obligations, the estimates made by management represent Level 3 inputs. The Covey Park Acquisition qualified as a tax free merger whereby the Company acquired carryover tax basis in Covey Park's assets and liabilities, adjusted for differences between the purchase price allocated to the assets acquired and liabilities assumed based on the fair value and the carryover tax basis. The Company's results of operations from the closing date on July 16, 2019 through September 30, 2019 include approximately $117.2 million of operating revenues and approximately $20.6 million of operating income, excluding general and administrative and interest expenses, attributable to the Covey Park assets. Pro forma Results The pro forma condensed combined financial information for the three and nine months ended September 30, 2019 gives effect to the Covey Park Acquisition as if the acquisition had occurred on January 1, 2019. The pro forma condensed combined financial information for the three and nine months ended September 30, 2018 give effect to the Covey Park Acquisition and the Jones Contribution as if the transactions had occurred on January 1, 2018. The unaudited pro forma information reflects adjustments for the issuance of the Company's common stock and preferred stock, debt incurred in connection with the transaction, impact of the fair value of properties acquired and related depletion other adjustments the Company believes are reasonable for the pro forma presentation. In addition, the pro forma earnings exclude acquisition-related costs. The unaudited pro forma results do not reflect any cost savings or other synergies that may arise in the future. Pro Forma Pro Forma Pro Forma Pro Forma (In thousands, except per share amount) Revenues $ 247,192 $ 293,266 $ 858,042 $ 790,653 Net income $ 36,755 $ 54,242 $ 201,338 $ 92,037 Net income per share: Basic $ 0.15 $ 0.24 $ 0.93 $ 0.34 Diluted $ 0.13 $ 0.19 $ 0.72 $ 0.33 Subsequent Event On November 1, 2019, the Company acquired a privately-held limited liability company which owns oil and gas properties in North Louisiana that are prospective for Haynesville and Bossier shale development in exchange for 4,500,000 newly issued shares of common stock. The properties acquired were producing 12 million cubic feet of natural gas and include approximately 3,000 net acres with 12.7 net future drilling locations. Property and Equipment The Company follows the successful efforts method of accounting for its oil and natural gas properties. Costs incurred to acquire oil and gas leasehold are capitalized. In April 2018, Comstock completed the sale of its producing Eagle Ford shale oil and gas properties in McMullen, LaSalle, Frio, Atascosa, Wilson, and Karnes counties, Texas for $106.4 million. During the three and nine months ended September 30, 2018, the Company recognized a loss on sale of oil and gas properties of $35.4 million to reduce the carrying value of these assets held for sale to their fair value less costs to sell. Results of operations for properties that were sold in 2018 were as follows: Predecessor For the Period from July 1, 2018 through August 13, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Total oil and gas sales $ — $ 17,747 Total operating expenses (1) — (6,134 ) Operating income $ — $ 11,613 (1) Includes direct operating expenses, depreciation, depletion and amortization and exploration expense and excludes interest and general and administrative expense. No depreciation, depletion and amortization expense has been provided for subsequent to the date the assets were designated as held for sale. The Company assesses the need for an impairment of the capitalized costs for its proved oil and gas properties on a property basis. No impairments were recognized to adjust the carrying value of the Company's proved oil and gas properties during any of the periods presented. Unproved oil and gas properties are also periodically assessed and any impairment in value is charged to expense. The costs of unproved properties are transferred to oil and gas properties and amortized on an equivalent unit-of-production basis as wells are drilled on these properties. The Company determines the fair values of its oil and gas properties using a discounted cash flow model and proved and risk-adjusted probable oil and natural gas reserves. Undrilled acreage can also be valued based on sales transactions in comparable areas. Significant Level 3 assumptions associated with the calculation of discounted future cash flows included in the cash flow model include management's outlook for oil and natural gas prices, production costs, capital expenditures, and future production as well as estimated proved oil and gas reserves and risk-adjusted probable oil and natural gas reserves. Management's oil and natural gas price outlook is developed based on third-party longer-term price forecasts as of each measurement date. The expected future net cash flows are discounted using an appropriate discount rate in determining a property's fair value. It is reasonably possible that the Company's estimates of undiscounted future net cash flows attributable to its oil and gas properties may change in the future. The primary factors that may affect estimates of future cash flows include future adjustments, both positive and negative, to proved and appropriate risk-adjusted probable oil and gas reserves, results of future drilling activities, future prices for oil and natural gas, and increases or decreases in production and capital costs. As a result of these changes, there may be future impairments in the carrying values of these or other properties. Goodwill The Company had goodwill of $350.2 million as of December 31, 2018 that was recorded in connection with the Jones Contribution. Goodwill represents the excess of purchase price over fair value of net tangible and identifiable intangible assets. The Company is not required to amortize goodwill as a charge to earnings; however, the Company is required to conduct a review of goodwill annually and whenever indications of impairment exist. During the three months ended September 30, 2019, the Company finalized the valuation of the Company's assets and liabilities in connection with the Jones Contribution, which reduced goodwill to $335.9 million as of September 30, 2019. Leases On January 1, 2019, the Company adopted Financial Accounting Standards Board Accounting Standards Codification 842, Leases Comstock adopted this standard using the modified retrospective method of adoption, and it applied ASC 842 only to contracts that were not completed as of January 1, 2019. Upon adoption, there were no adjustments to the opening balance of stockholders' equity. In adopting ASC 842, the Company utilized certain practical expedients available under ASC 842, including election to not apply the recognition requirements to short term leases (defined as leases with an initial lease term of twelve months or less which do not contain a purchase option), election to not separate lease and non-lease components, and election to not reassess certain land easements in existence prior to January 1, 2019. Upon adoption of ASC 842, the Company recognized right-of-use lease assets of $5.2 million related to its corporate office lease, certain office equipment and leased vehicles used in oil and gas operations with corresponding short-term and long-term liabilities of $2.0 million and $3.2 million, respectively. The beginning value of the lease assets and liabilities was determined based upon discounted future minimum cash flows contained within each of the respective contracts. The Company utilized a discount rate of 5.0% in computing these discounted net future cash flows. Recognition of these assets and liabilities was not material to the Company's consolidated balance sheet. Adoption of ASC 842 did not impact our consolidated statements of operations, cash flows or stockholders' equity. The Company determines if contracts contain a lease at inception of the contract. To the extent that contract terms representing a lease are identified, leases are identified as being either an operating lease or a finance-type lease. Comstock currently has no finance-type leases. Right-of-use lease assets representing the Company's right to use an underlying asset for the lease term and the related lease liabilities represent our obligation to make lease payments under the terms of the contracts. Short-term leases that have an initial term of one year or less are not capitalized; however, amounts paid for those leases are included as part of its lease cost disclosures. Short-term lease costs exclude expenses related to leases with a lease term of one month or less. Leases applicable to our oil or natural gas operations that include the right to explore for and develop oil and natural gas reserves and the related rights to use the land associated with those leases, are not within the scope of ASC 842. Comstock contracts for a variety of equipment used in its oil and natural gas exploration and development operations. Contract terms for this equipment vary broadly, including the contract duration, pricing, scope of services included along with the equipment, cancellation terms, and rights of substitution, among others. In applying the accounting guidance within ASC 842, the Company has determined that its corporate office lease, certain office equipment, its vehicles leased for use in operations, and its drilling rigs meet the criteria of an operating lease which require recognition upon adoption of ASC 842. The Company's drilling operations routinely change due to changes in commodity prices, demand for oil and natural gas, and the overall operating and economic environment. Comstock accordingly manages the terms of its contracts for drilling rigs so as to allow for maximum flexibility in responding to these changing conditions. The Company's rig contracts are presently either for periods of less than one year, or they are on terms that provide for cancellation with thirty days advance notice without a specified expiration date. The Company has elected to apply the practical expedient available under ASC 842 for short-term leases and not recognize right-of-use lease assets for these rig contracts. The costs associated with drilling rig operations are accounted for under the successful efforts method, which generally require that these costs be capitalized as part of our proved oil and natural gas properties on our balance sheet unless they are incurred on exploration wells that are unsuccessful, in which case they are charged to exploration expense. Lease costs recognized during the three months and nine months ended September 30, 2019 were as follows: Successor Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 (In thousands) Operating lease cost included in general and administrative expense $ 411 $ 1,234 Operating lease cost included in lease operating expense 99 291 Short-term lease cost (drilling rig costs included in proved oil and gas properties) 19,304 39,487 $ 19,814 $ 41,012 Cash payments for operating leases associated with right-of-use assets included in cash provided by operating activities were $0.5 million and $1.5 million for the three months and nine months ended September 30, 2019, respectively. As of September 30, 2019, Comstock had the following liabilities under contracts that contain operating leases: (In thousands) October 1, 2019 to December 31, 2019 $ 1,997 2020 1,740 2021 390 Total lease payments 4,127 Imputed interest (218 ) Total lease liability $ 3,909 The weighted average term of these operating leases was 2.2 years and the weighted average rate used in lease computations was 5.0%. As of September 30, 2019, the Company also had expected future payments for contracted drilling services through April 2020 of $30.6 million. Accrued Expenses Accrued expenses at September 30, 2019 and December 31, 2018 consisted of the following: Successor As of As of (In thousands) Accrued drilling costs $ 64,838 $ 17,920 Accrued interest payable 30,681 35,461 Accrued transportation costs 18,686 4,632 Accrued transaction costs 15,475 — Accrued lease operating expenses 13,577 2,130 Accrued employee compensation 8,476 6,045 Other 4,023 1,898 $ 155,756 $ 68,086 Reserve for Future Abandonment Costs Comstock's asset retirement obligations relate to future plugging and abandonment expenses on its oil and gas properties and related facilities disposal. The following table summarizes the changes in Comstock's total estimated liability for such obligations during the periods presented: Successor Predecessor Nine Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Future abandonment costs — beginning of period $ 5,136 $ 4,683 $ 10,407 Wells acquired 5,374 45 346 New wells drilled 256 10 17 Accretion expense 369 — — Liabilities settled and assets disposed of (40 ) — (87 ) Future abandonment costs — end of period $ 11,095 $ 4,738 $ 10,683 Derivative Financial Instruments and Hedging Activities All of the Company's derivative financial instruments are used for risk management purposes and, by policy, none are held for trading or speculative purposes. Comstock minimizes credit risk to counterparties of its derivative financial instruments through formal credit policies, monitoring procedures, and diversification. The Company is not required to provide any credit support to its counterparties other than cross collateralization with the assets securing its bank credit facility. None of the Company's derivative financial instruments involve payment or receipt of premiums. The Company classifies the fair value amounts of derivative financial instruments as net current or noncurrent assets or liabilities, whichever the case may be, by commodity contract. All of Comstock's natural gas derivative financial instruments are tied to the Henry Hub-NYMEX price index and all of its crude oil derivative financial instruments are tied to the WTI-NYMEX index price. Basis swaps are tied to Henry Hub. The Company had the following outstanding commodity-based derivative financial instruments, excluding basis swaps which are discussed separately below, at September 30, 2019: Future Production Period Three Months Year Ending Year Ending Year Ending Total Natural Gas Swap Contracts: Volume (MMbtu) 41,818,281 99,144,209 20,908,140 10,950,000 172,820,630 Average Price per MMbtu $2.85 $2.81 $2.87 $2.81 $2.83 Natural Gas 2-Way Collar Contracts: Volume (MMbtu) 9,916,000 16,350,000 — — 26,266,000 Price per MMbtu Average Ceiling $3.52 $3.46 — — $3.48 Average Floor $2.39 $2.47 — — $2.44 Natural Gas 3-Way Collar Contracts: Volume (MMbtu) 12,880,000 26,510,000 — — 39,390,000 Price per MMbtu Average Ceiling $3.08 $2.99 — — $3.02 Average Floor $2.79 $2.65 — — $2.69 Average Put $2.41 $2.33 — — $2.36 Crude Oil Collar Contracts: Volume (Barrels) 284,200 1,125,100 — — 1,409,300 Price per Barrel — — Average Ceiling $65.63 $65.33 — — $65.39 Average Floor $45.00 $48.48 — — $47.78 In addition to the swaps and collars above, at September 30, 2019, the Company had basis swap contracts that lock-in the differential between NYMEX Henry Hub and certain physical pricing indices. These contracts settle monthly through December 2022 and include a total volume of 53,030,000 MMbtu. The fair value of these contracts was a net asset of $3.2 million at September 30, 2019. None of the Company's derivative contracts were designated as cash flow hedges. The aggregate fair value of the Company's derivative instruments reported in the accompanying consolidated balance sheets by type, including the classification between assets and liabilities, consists of the following: Type Consolidated Balance Sheet Location Fair Value (in thousands) Successor Fair Value of Derivative Instruments as of September 30, 2019 Assets : Natural gas price derivatives Derivative Financial Instruments – current $ 60,002 Oil price derivatives Derivative Financial Instruments – current 2,275 $ 62,277 Natural gas price derivatives Derivative Financial Instruments – long-term $ 21,118 Oil price derivatives Derivative Financial Instruments – long-term 865 $ 21,983 Successor Fair Value of Derivative Instruments as of December 31, 2018 Assets: Natural gas price derivatives Derivative Financial Instruments – current $ 6,096 Oil price derivatives Derivative Financial Instruments – current 9,305 $ 15,401 The Company recognized cash settlements and changes in the fair value of its derivative financial instruments as a single component of other income (expenses). Gains and losses Successor Predecessor Successor Predecessor Gain/(Loss) Recognized in Earnings on Derivatives Three Months Ended For the Period from August 14, 2018 through September 30, 2018 For the Period from July 1, 2018 through August 13, 2018 Nine Months Ended For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Swaps $ 19,398 $ (166 ) $ (6 ) $ 29,856 $ (166 ) $ 1,267 Collars 5,460 (1,849 ) (77 ) 2,089 (1,849 ) (386 ) $ 24,858 $ (2,015 ) $ (83 ) $ 31,945 $ (2,015 ) $ 881 Subsequent to September 30, 2019, the Company entered into natural gas swap contracts covering 80,000 MMbtu per day for calendar 2020 with a weighted average price of $2.54 per MMbtu. These contracts contain a one-time option for the counterparty to extend the period to calendar 2021 in October 2020. The Company also entered into additional natural gas swap contracts covering 20,000 MMbtu per day for calendar 2020 at $2.50 per MMbtu. Stock-Based Compensation Comstock accounts for employee stock-based compensation under the fair value method. Compensation cost is measured at the grant date based on the fair value of the award and is recognized over the award vesting period and included in The Company recognized $0.3 million of stock-based compensation expense within general and administrative expenses related to awards of restricted stock and PSUs to its employees and directors during the Successor period August 14, 2018 through September 30, 2018 and $0.8 million during the Predecessor period July 1 through August 13, 2018 and $3.9 million during the Predecessor period January 1, 2018 through August 13, 2018. During the period July 1, 2018 through August 13, 2018, the Predecessor Company granted 100,226 shares of restricted stock with a grant date fair value of $0.9 million, or $8.73 per share, to its independent directors. The change of control that occurred due to the Jones Contribution resulting in the vesting of all then outstanding restricted stock grants of 904,181 shares. During the Successor period August 14, 2018 through September 30, 2018, the Company granted 422,545 shares of restricted stock with a grant date fair value of $3.7 million, or $8.70 per share, to its employees. During the three months and nine months ended September 30, 2019 the Company granted 789,044 and 874,661 shares of restricted stock, respectively, with a grant date fair value of $4.3 million and $4.7 million, respectively, at a per share value of $5.51 per share and $5.40 per share, respectively, to its employees and directors. As of September 30, 2019, Comstock had 1,131,918 shares of unvested restricted stock outstanding at a weighted average grant date fair value of $6.15 per share. Total unrecognized compensation cost related to unvested restricted stock grants of $6.5 million as of September 30, 2019 is expected to be recognized over a period of 2.4 years. As of September 30, 2019, Comstock had 942,795 PSUs outstanding at a weighted average grant date fair value of $9.60 per unit. During the three and nine months ended September 30, 2019, the Company issued 618,672 PSUs with a grant date fair value of $7.85 per unit. The number of shares of common stock to be issued related to the PSUs is based on the Company's stock price performance as compared to its peers which could result in the issuance of anywhere from zero to 1,885,590 shares of common stock. Total unrecognized compensation cost related to these grants of $7.3 million as of September 30, 2019 is expected to be recognized over a period of 2.5 years. Revenue Recognition Comstock produces oil and natural gas and reports revenues separately for each of these two primary products in its statements of operations. Revenues are recognized upon the transfer of produced volumes to the Company's customers, who take control of the volumes and receive all the benefits of ownership upon delivery at designated sales points. Payment is reasonably assured upon delivery of production. All sales are subject to contracts that have commercial substance, contain specific pricing terms, and define the enforceable rights and obligations of both parties. These contracts typically provide for cash settlement within 25 days following each production month and are cancellable upon 30 days' notice by either party. Prices for sales of oil and natural gas are generally based upon terms that are common in the oil and gas industry, includin |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | (2) LONG-TERM DEBT – At September 30, 2019, long-term debt was comprised of the following: (In thousands) Bank Credit Facility: Principal $ 1,265,000 7½% Senior Notes due 2025: Principal 625,000 Discount, net of amortization (174,297 ) 9¾% Senior Notes due 2026: Principal $ 850,000 Discount, net of amortization (30,723 ) Debt issuance costs, net of amortization (26,906 ) $ 2,508,074 In connection with the Jones Contribution, the Company completed a series of refinancing transactions to retire all of its then-outstanding senior secured and unsecured notes. On August 3, 2018, the Company issued $850.0 million of new senior notes for proceeds of $815.9 million. Interest on the notes is payable on February 15 and August 15 at an annual rate of 9¾% and the notes mature on August 15, 2026. As a part of the Covey Park Acquisition, the Company assumed Covey Park's $625.0 million 7½% senior notes that were outstanding. The fair market value of the notes at the closing was $446.6 million. Interest on the assumed notes is payable on May 15 and November 15 at an annual rate of 7½% and these notes mature on May 15, 2025. On August 14, 2018, the Company entered into a bank credit facility with Bank of Montreal, as administrative agent, and the participating banks. Concurrent with the closing of the Covey Park Acquisition, the Company amended and restated the bank credit facility and extended the maturity to July 16, 2024. The credit facility is subject to a borrowing base, which is $1,575.0 million and is re-determined on a semi-annual basis and upon the occurrence of certain other events. The initial committed borrowing base was $1,500.0 million, of which $1,265.0 million of borrowings were outstanding as of September 30, 2019. Borrowings under the bank credit facility are secured by substantially all of the assets of the Company and its subsidiaries and bear interest at the Company's option, at either LIBOR plus 1.75% to 2.75% or a base rate plus 0.75% to 1.75%, in each case depending on the utilization of the borrowing base. The Company also pays a commitment fee of 0.375% to 0.5% on the unused borrowing base. The bank credit facility places certain restrictions upon the Company's and its restricted subsidiaries' ability to, among other things, incur additional indebtedness, pay cash dividends, repurchase common stock, make certain loans, investments and divestitures and redeem the senior notes. The only financial covenants are the maintenance of a leverage ratio of less than 4.0 to 1.0 and an adjusted current ratio of at least 1.0 to 1.0. The financial covenants are determined starting with the financial results for the three months ended December 31, 2019. The Company was in compliance with the covenants as of September 30, 2019. |
Preferred Stock
Preferred Stock | 9 Months Ended |
Sep. 30, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Preferred Stock | (3) PREFERRED STOCK – In connection with the Covey Park Acquisition, the Company issued 210,000 shares of Series A Convertible Preferred Stock with a face value of $210.0 million and a fair value of $200.0 million as part of the consideration for the acquisition and sold 175,000 shares of Series B Convertible Preferred Stock for $175.0 million to its majority stockholder. Holders of the newly issued convertible preferred stock are entitled to receive quarterly dividends at a rate of 10% per annum, which are paid in arrears. At any time after July 16, 2020, each holder may convert any or all shares of preferred stock into shares of the Company's common stock at the then prevailing conversion rate. The conversion price of the preferred stock is $4.00 per share of common stock, subject to adjustment pursuant to customary anti-dilution provisions. The Company has the right to redeem the preferred stock at any time at face value plus accrued dividends. The Series A Convertible Preferred Stock and Series B Convertible Preferred Stock are classified as mezzanine equity based on the majority stockholder's ability to control the terms of conversion to common stock. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | (4) STOCKHOLDERS' EQUITY – On July 16, 2019, the Company amended its Seconded Amended and Restated Articles of Incorporation to increase its authorized capital to 405,000,000 shares, of which 400,000,000 shares are common stock, $0.50 par value per share and 5,000,000 are preferred stock, $10.00 par value per share. Warrants for 246,793 shares of common stock were exercised during the nine months ended September 30 , 2018 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (5) Commitments and Contingencies – From time to time, Comstock is involved in certain litigation that arises in the normal course of its operations. The Company records a loss contingency for these matters when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company does not believe the resolution of any of these matters will have a material effect on the Company's financial position or results of operations. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (6) RELATED PARTY TRANSACTIONS – In February 2019, Comstock sold certain leases covering 1,464 undeveloped net acres in Caddo Parish, Louisiana for $5.9 million to a partnership owned by the Company's majority stockholder. The proceeds from the sale were used to fund the purchase of a like number of net acres from a third party for $5.9 million. The acreage acquired was in part the acreage sold to the partnership or acreage in the same area. The purchase price paid per net acre was determined by the price paid by the Company to the third party. Comstock is also operating the drilling of six wells in South Texas that the Company does not have an interest in for another partnership owned by its majority stockholder. As operator, Comstock charges the partnerships for the costs incurred to drill and operate the wells as well as customary drilling and operating overhead fees that it charges other working interest owners. Comstock received $12.1 million and $13.7 million from the partnerships related to these wells for the three months and nine months ended September 30, 2019, respectively, and had a $13.6 million receivable from the partnerships at September 30, 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These unaudited consolidated financial statements include the accounts of Comstock Resources, Inc. and its wholly-owned subsidiaries (collectively, "Comstock" or the "Company"). The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to those rules and regulations, although Comstock believes that the disclosures made are adequate to make the information presented not misleading. These unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in Comstock's Annual Report on Form 10-K for the year ended December 31, 2018. The results of operations for the period through September 30, 2019 are not necessarily an indication of the results expected for the full year. Jones Contribution On August 14, 2018, Arkoma Drilling, L.P. and Williston Drilling, L.P. (collectively, the "Jones Partnerships") contributed certain oil and gas properties in North Dakota and Montana (the "Bakken Shale Properties") in exchange for 88,571,429 newly issued shares of common stock representing 84% of the Company's then outstanding common stock (the "Jones Contribution"). The Jones Partnerships are wholly owned and controlled by Dallas businessman Jerry Jones and his children (collectively, the "Jones Group"). The Company assessed the Bakken Shale Properties to determine whether they met the definition of a business under US generally accepted accounting principles, determining that they did not meet the definition of a business. As a result, the Jones Contribution was not accounted for as a business combination. Upon the issuance of the shares of Comstock common stock, the Jones Group obtained control over Comstock through their ownership of the Jones Partnerships. Through the Jones Partnerships, the Jones Group owns a majority of the voting common stock as well as the ability to control the composition of the majority of the board of directors of Comstock. As a result of the change of control that occurred upon the issuance of the common stock, the Jones Group controls Comstock and, thereby, continues to control the Bakken Shale Properties. Accordingly, the basis of the Bakken Shale Properties recognized by Comstock was the historical basis of the Jones Group. The historical cost basis of the Bakken Shale Properties contributed was $397.6 million, which was comprised of $554.3 million of capitalized costs less $156.7 million of accumulated depletion, depreciation and amortization. The change in control of Comstock resulted in a new basis for Comstock as the Company elected to apply pushdown accounting pursuant to ASC 805, Business Combinations. The new basis was pushed down to Comstock for financial reporting purposes, resulting in Comstock's assets, liabilities and equity accounts being recognized at fair value upon the closing of the Jones Contribution. References to "Successor" or "Successor Company" relate to the financial position and results of operations of the Company subsequent to August 13, 2018. Reference to "Predecessor" or "Predecessor Company" relate to the financial position and results of operations of the Company on or prior to August 13, 2018. The Company's consolidated financial statements and related footnotes are presented with a black line division which delineates the lack of comparability between amounts presented after August 13, 2018 and dates prior thereto. The following table represents the allocation of fair value related to the assets acquired and the liabilities assumed after giving consideration for final purchase accounting adjustments based on the fair value of Comstock: (In thousands) Fair Value of Comstock's Common Stock $ 149,357 Fair Value of Liabilities Assumed – Current Liabilities 180,452 Long-Term Debt 2,059,560 Deferred Income Taxes 49,391 Reserve for Future Abandonment Costs 4,440 Net Liabilities Assumed 2,293,843 Fair Value of Assets Acquired – Current Assets 936,026 Oil and Gas Properties 1,147,749 Other Property & Equipment 4,440 Income Taxes Receivable 19,086 Other Assets 2 Total Assets 2,107,303 Goodwill $ 335,897 The goodwill that was recognized was primarily attributable to the excess of the fair value of Comstock's common stock over the identifiable assets acquired net of liabilities assumed, measured in accordance with generally accepted accounting principles in the United States. The fair value of oil and gas properties, a Level 3 measurement, was determined using discounted cash flow valuation methodology. Key inputs to the valuation included average oil prices of $79.72 per barrel, average natural gas prices of $3.87 per thousand cubic feet and discount factors of 10% - 25%. The combination of the Bakken Shale Properties with Comstock's Haynesville shale properties results in a Company with adequate resources and liquidity to fully exploit its Haynesville/Bossier shale asset base and to continue to expand its opportunity set with future acquisitions and leasing activity in the basin. During the quarter ended September 30, 2019, the Company finalized the deferred income taxes that were related to the Jones Contribution. Deferred income taxes and goodwill were reduced by $14.3 million in the final valuation. Covey Park Acquisition On July 16, 2019, Comstock acquired Covey Park Energy LLC ("Covey Park") for total consideration of $700.0 million of cash, the issuance of Series A Convertible Preferred Stock with a redemption value of $210.0 million, and the issuance of 28,833,000 shares of common stock (the "Covey Park Acquisition"). In addition to the consideration paid, Comstock assumed $625.0 million of Covey Park's 7.5% senior notes, repaid $380.0 million of Covey Park's then outstanding borrowings under its bank credit facility and redeemed all of Covey Park's preferred equity for $153.4 million. Based on the fair value of the preferred stock issued and the closing price of the Company's common stock of $5.82 per share on July 16, 2019, the transaction was valued at approximately $2.2 billion. Covey Park's operations are focused primarily in the Haynesville / Bossier shale in East Texas and North Louisiana. Funding for the Covey Park Acquisition was provided by the sale of 50.0 million newly issued shares of common stock for $300.0 million and 175,000 shares of newly issued Series B Convertible Preferred Stock for $175.0 million to the Company's majority stockholder and by borrowings under Comstock's amended and restated bank credit facility and cash on hand. In connection with the Covey Park Acquisition, Comstock incurred $41.1 million of advisory and legal fees and other acquisition-related costs. These acquisition costs are included in transaction costs in the Company's consolidated statements of operations. The transaction has been accounted for as a business combination, using the acquisition method. Certain information to finalize the purchase price is not yet available, including the final tax return of Covey Park. The Company expects to complete the purchase price allocation within the twelve month period following the acquisition date, during which time the value of the net assets and liabilities acquired may be revised as appropriate. The following table presents the Company's preliminary purchase price allocation of the assets acquired and liabilities assumed based on their fair values as of the acquisition date: (In thousands) Consideration: Cash Paid $ 700,000 Fair Value of Common Stock Issued 167,808 Fair Value of Series A Preferred Stock Issued 200,000 Total Consideration 1,067,808 Liabilities Assumed: Accounts Payable and Accrued Liabilities 129,622 Derivative Financial Instruments 388 Other Current Liabilities 9,930 Long Term Debt 826,625 Covey Park Preferred Equity 153,390 Non-current Derivative Financial Instruments 186 Asset Retirement Obligations 5,374 Deferred Income Taxes 23,466 Other Non-current Liabilities 9,893 Liabilities Assumed 1,158,874 Total Consideration and Liabilities Assumed $ 2,226,682 Assets Acquired: Cash and Cash Equivalents $ 6,131 Accounts Receivable 86,285 Current Derivative Financial Instruments 51,004 Other Current Assets 5,511 Proved Oil and Natural Gas Properties 1,818,413 Unproved Oil and Natural Gas Properties 237,210 Other Property, Plant and Equipment 2,262 Non-current Derivative Financial Instruments 19,866 Total Assets Acquired $ 2,226,682 The Series A Convertible Preferred Stock was issued with a face value of $210.0 million. Management retained a third-party valuation firm to assess the fair value of the preferred stock. A yield methodology using Level 2 inputs of the Company's publicly traded debt, including the assumption of Covey Park's 7.5% senior notes, resulted in a fair value of $200.0 million. The fair values determined for accounts receivable, accounts payable, accrued drilling costs and other current liabilities were equivalent to the carrying value due to their short-term nature. The fair value of the proved and unproved oil and natural gas properties was derived from estimated future discounted net cash flows, a Level 3 measurement, based on existing production curves and timing of development of those properties. The key factors used in deriving the estimated future cash flows include estimated recoverable reserves, production rates, future operating and development costs, and future commodity prices. Key inputs to the valuation included average oil prices of $74.80 per barrel and average natural gas prices of $3.32 per Mcf utilizing a combination of third-party price estimates and management price forecasts as of the acquisition date. The resulting estimated future cash flows from the acquired assets were discounted at rates ranging from 10% - 25% depending on risk characteristics of reserve categories acquired. Management utilized the assistance of an independent reserve firm and internal resources to estimate the fair value of the oil and natural gas properties. The fair value measurements of long-term debt were estimated based on market prices and represent Level 2 inputs. The fair value measurements of derivative instruments assumed were determined based on fair value measurements consistent with managements valuation methodologies including implied market volatility, contract terms and prices and discount factors as of the close date. These inputs represent Level 2 inputs. The fair values of commodity derivative instruments in an asset position include a measure of counterparty nonperformance risk and the derivative instruments in a liability position include a measure of the Company's own nonperformance risk, each based on the current published credit default swap rates. The fair value of the asset retirement obligations of $5.4 million is included in the oil and natural gas properties with the corresponding liability in the table above. The fair value was based on a discounted cash flow model that included assumptions of current abandonment costs, inflation rates, discount rates and timing of actual abandonment and restoration activities. Due to the inputs and significant assumptions associated with the estimation of asset retirement obligations, the estimates made by management represent Level 3 inputs. The Covey Park Acquisition qualified as a tax free merger whereby the Company acquired carryover tax basis in Covey Park's assets and liabilities, adjusted for differences between the purchase price allocated to the assets acquired and liabilities assumed based on the fair value and the carryover tax basis. The Company's results of operations from the closing date on July 16, 2019 through September 30, 2019 include approximately $117.2 million of operating revenues and approximately $20.6 million of operating income, excluding general and administrative and interest expenses, attributable to the Covey Park assets. Pro forma Results The pro forma condensed combined financial information for the three and nine months ended September 30, 2019 gives effect to the Covey Park Acquisition as if the acquisition had occurred on January 1, 2019. The pro forma condensed combined financial information for the three and nine months ended September 30, 2018 give effect to the Covey Park Acquisition and the Jones Contribution as if the transactions had occurred on January 1, 2018. The unaudited pro forma information reflects adjustments for the issuance of the Company's common stock and preferred stock, debt incurred in connection with the transaction, impact of the fair value of properties acquired and related depletion other adjustments the Company believes are reasonable for the pro forma presentation. In addition, the pro forma earnings exclude acquisition-related costs. The unaudited pro forma results do not reflect any cost savings or other synergies that may arise in the future. Pro Forma Pro Forma Pro Forma Pro Forma (In thousands, except per share amount) Revenues $ 247,192 $ 293,266 $ 858,042 $ 790,653 Net income $ 36,755 $ 54,242 $ 201,338 $ 92,037 Net income per share: Basic $ 0.15 $ 0.24 $ 0.93 $ 0.34 Diluted $ 0.13 $ 0.19 $ 0.72 $ 0.33 Subsequent Event On November 1, 2019, the Company acquired a privately-held limited liability company which owns oil and gas properties in North Louisiana that are prospective for Haynesville and Bossier shale development in exchange for 4,500,000 newly issued shares of common stock. The properties acquired were producing 12 million cubic feet of natural gas and include approximately 3,000 net acres with 12.7 net future drilling locations. |
Property and Equipment | Property and Equipment The Company follows the successful efforts method of accounting for its oil and natural gas properties. Costs incurred to acquire oil and gas leasehold are capitalized. In April 2018, Comstock completed the sale of its producing Eagle Ford shale oil and gas properties in McMullen, LaSalle, Frio, Atascosa, Wilson, and Karnes counties, Texas for $106.4 million. During the three and nine months ended September 30, 2018, the Company recognized a loss on sale of oil and gas properties of $35.4 million to reduce the carrying value of these assets held for sale to their fair value less costs to sell. Results of operations for properties that were sold in 2018 were as follows: Predecessor For the Period from July 1, 2018 through August 13, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Total oil and gas sales $ — $ 17,747 Total operating expenses (1) — (6,134 ) Operating income $ — $ 11,613 (1) Includes direct operating expenses, depreciation, depletion and amortization and exploration expense and excludes interest and general and administrative expense. No depreciation, depletion and amortization expense has been provided for subsequent to the date the assets were designated as held for sale. The Company assesses the need for an impairment of the capitalized costs for its proved oil and gas properties on a property basis. No impairments were recognized to adjust the carrying value of the Company's proved oil and gas properties during any of the periods presented. Unproved oil and gas properties are also periodically assessed and any impairment in value is charged to expense. The costs of unproved properties are transferred to oil and gas properties and amortized on an equivalent unit-of-production basis as wells are drilled on these properties. The Company determines the fair values of its oil and gas properties using a discounted cash flow model and proved and risk-adjusted probable oil and natural gas reserves. Undrilled acreage can also be valued based on sales transactions in comparable areas. Significant Level 3 assumptions associated with the calculation of discounted future cash flows included in the cash flow model include management's outlook for oil and natural gas prices, production costs, capital expenditures, and future production as well as estimated proved oil and gas reserves and risk-adjusted probable oil and natural gas reserves. Management's oil and natural gas price outlook is developed based on third-party longer-term price forecasts as of each measurement date. The expected future net cash flows are discounted using an appropriate discount rate in determining a property's fair value. It is reasonably possible that the Company's estimates of undiscounted future net cash flows attributable to its oil and gas properties may change in the future. The primary factors that may affect estimates of future cash flows include future adjustments, both positive and negative, to proved and appropriate risk-adjusted probable oil and gas reserves, results of future drilling activities, future prices for oil and natural gas, and increases or decreases in production and capital costs. As a result of these changes, there may be future impairments in the carrying values of these or other properties. |
Goodwill | Goodwill The Company had goodwill of $350.2 million as of December 31, 2018 that was recorded in connection with the Jones Contribution. Goodwill represents the excess of purchase price over fair value of net tangible and identifiable intangible assets. The Company is not required to amortize goodwill as a charge to earnings; however, the Company is required to conduct a review of goodwill annually and whenever indications of impairment exist. During the three months ended September 30, 2019, the Company finalized the valuation of the Company's assets and liabilities in connection with the Jones Contribution, which reduced goodwill to $335.9 million as of September 30, 2019. |
Leases | Leases On January 1, 2019, the Company adopted Financial Accounting Standards Board Accounting Standards Codification 842, Leases Comstock adopted this standard using the modified retrospective method of adoption, and it applied ASC 842 only to contracts that were not completed as of January 1, 2019. Upon adoption, there were no adjustments to the opening balance of stockholders' equity. In adopting ASC 842, the Company utilized certain practical expedients available under ASC 842, including election to not apply the recognition requirements to short term leases (defined as leases with an initial lease term of twelve months or less which do not contain a purchase option), election to not separate lease and non-lease components, and election to not reassess certain land easements in existence prior to January 1, 2019. Upon adoption of ASC 842, the Company recognized right-of-use lease assets of $5.2 million related to its corporate office lease, certain office equipment and leased vehicles used in oil and gas operations with corresponding short-term and long-term liabilities of $2.0 million and $3.2 million, respectively. The beginning value of the lease assets and liabilities was determined based upon discounted future minimum cash flows contained within each of the respective contracts. The Company utilized a discount rate of 5.0% in computing these discounted net future cash flows. Recognition of these assets and liabilities was not material to the Company's consolidated balance sheet. Adoption of ASC 842 did not impact our consolidated statements of operations, cash flows or stockholders' equity. The Company determines if contracts contain a lease at inception of the contract. To the extent that contract terms representing a lease are identified, leases are identified as being either an operating lease or a finance-type lease. Comstock currently has no finance-type leases. Right-of-use lease assets representing the Company's right to use an underlying asset for the lease term and the related lease liabilities represent our obligation to make lease payments under the terms of the contracts. Short-term leases that have an initial term of one year or less are not capitalized; however, amounts paid for those leases are included as part of its lease cost disclosures. Short-term lease costs exclude expenses related to leases with a lease term of one month or less. Leases applicable to our oil or natural gas operations that include the right to explore for and develop oil and natural gas reserves and the related rights to use the land associated with those leases, are not within the scope of ASC 842. Comstock contracts for a variety of equipment used in its oil and natural gas exploration and development operations. Contract terms for this equipment vary broadly, including the contract duration, pricing, scope of services included along with the equipment, cancellation terms, and rights of substitution, among others. In applying the accounting guidance within ASC 842, the Company has determined that its corporate office lease, certain office equipment, its vehicles leased for use in operations, and its drilling rigs meet the criteria of an operating lease which require recognition upon adoption of ASC 842. The Company's drilling operations routinely change due to changes in commodity prices, demand for oil and natural gas, and the overall operating and economic environment. Comstock accordingly manages the terms of its contracts for drilling rigs so as to allow for maximum flexibility in responding to these changing conditions. The Company's rig contracts are presently either for periods of less than one year, or they are on terms that provide for cancellation with thirty days advance notice without a specified expiration date. The Company has elected to apply the practical expedient available under ASC 842 for short-term leases and not recognize right-of-use lease assets for these rig contracts. The costs associated with drilling rig operations are accounted for under the successful efforts method, which generally require that these costs be capitalized as part of our proved oil and natural gas properties on our balance sheet unless they are incurred on exploration wells that are unsuccessful, in which case they are charged to exploration expense. Lease costs recognized during the three months and nine months ended September 30, 2019 were as follows: Successor Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 (In thousands) Operating lease cost included in general and administrative expense $ 411 $ 1,234 Operating lease cost included in lease operating expense 99 291 Short-term lease cost (drilling rig costs included in proved oil and gas properties) 19,304 39,487 $ 19,814 $ 41,012 Cash payments for operating leases associated with right-of-use assets included in cash provided by operating activities were $0.5 million and $1.5 million for the three months and nine months ended September 30, 2019, respectively. As of September 30, 2019, Comstock had the following liabilities under contracts that contain operating leases: (In thousands) October 1, 2019 to December 31, 2019 $ 1,997 2020 1,740 2021 390 Total lease payments 4,127 Imputed interest (218 ) Total lease liability $ 3,909 The weighted average term of these operating leases was 2.2 years and the weighted average rate used in lease computations was 5.0%. As of September 30, 2019, the Company also had expected future payments for contracted drilling services through April 2020 of $30.6 million. |
Accrued Expenses | Accrued Expenses Accrued expenses at September 30, 2019 and December 31, 2018 consisted of the following: Successor As of As of (In thousands) Accrued drilling costs $ 64,838 $ 17,920 Accrued interest payable 30,681 35,461 Accrued transportation costs 18,686 4,632 Accrued transaction costs 15,475 — Accrued lease operating expenses 13,577 2,130 Accrued employee compensation 8,476 6,045 Other 4,023 1,898 $ 155,756 $ 68,086 |
Reserve for Future Abandonment Costs | Reserve for Future Abandonment Costs Comstock's asset retirement obligations relate to future plugging and abandonment expenses on its oil and gas properties and related facilities disposal. The following table summarizes the changes in Comstock's total estimated liability for such obligations during the periods presented: Successor Predecessor Nine Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Future abandonment costs — beginning of period $ 5,136 $ 4,683 $ 10,407 Wells acquired 5,374 45 346 New wells drilled 256 10 17 Accretion expense 369 — — Liabilities settled and assets disposed of (40 ) — (87 ) Future abandonment costs — end of period $ 11,095 $ 4,738 $ 10,683 |
Derivative Financial Instruments and Hedging Activites | Derivative Financial Instruments and Hedging Activities All of the Company's derivative financial instruments are used for risk management purposes and, by policy, none are held for trading or speculative purposes. Comstock minimizes credit risk to counterparties of its derivative financial instruments through formal credit policies, monitoring procedures, and diversification. The Company is not required to provide any credit support to its counterparties other than cross collateralization with the assets securing its bank credit facility. None of the Company's derivative financial instruments involve payment or receipt of premiums. The Company classifies the fair value amounts of derivative financial instruments as net current or noncurrent assets or liabilities, whichever the case may be, by commodity contract. All of Comstock's natural gas derivative financial instruments are tied to the Henry Hub-NYMEX price index and all of its crude oil derivative financial instruments are tied to the WTI-NYMEX index price. Basis swaps are tied to Henry Hub. The Company had the following outstanding commodity-based derivative financial instruments, excluding basis swaps which are discussed separately below, at September 30, 2019: Future Production Period Three Months Year Ending Year Ending Year Ending Total Natural Gas Swap Contracts: Volume (MMbtu) 41,818,281 99,144,209 20,908,140 10,950,000 172,820,630 Average Price per MMbtu $2.85 $2.81 $2.87 $2.81 $2.83 Natural Gas 2-Way Collar Contracts: Volume (MMbtu) 9,916,000 16,350,000 — — 26,266,000 Price per MMbtu Average Ceiling $3.52 $3.46 — — $3.48 Average Floor $2.39 $2.47 — — $2.44 Natural Gas 3-Way Collar Contracts: Volume (MMbtu) 12,880,000 26,510,000 — — 39,390,000 Price per MMbtu Average Ceiling $3.08 $2.99 — — $3.02 Average Floor $2.79 $2.65 — — $2.69 Average Put $2.41 $2.33 — — $2.36 Crude Oil Collar Contracts: Volume (Barrels) 284,200 1,125,100 — — 1,409,300 Price per Barrel — — Average Ceiling $65.63 $65.33 — — $65.39 Average Floor $45.00 $48.48 — — $47.78 In addition to the swaps and collars above, at September 30, 2019, the Company had basis swap contracts that lock-in the differential between NYMEX Henry Hub and certain physical pricing indices. These contracts settle monthly through December 2022 and include a total volume of 53,030,000 MMbtu. The fair value of these contracts was a net asset of $3.2 million at September 30, 2019. None of the Company's derivative contracts were designated as cash flow hedges. The aggregate fair value of the Company's derivative instruments reported in the accompanying consolidated balance sheets by type, including the classification between assets and liabilities, consists of the following: Type Consolidated Balance Sheet Location Fair Value (in thousands) Successor Fair Value of Derivative Instruments as of September 30, 2019 Assets : Natural gas price derivatives Derivative Financial Instruments – current $ 60,002 Oil price derivatives Derivative Financial Instruments – current 2,275 $ 62,277 Natural gas price derivatives Derivative Financial Instruments – long-term $ 21,118 Oil price derivatives Derivative Financial Instruments – long-term 865 $ 21,983 Successor Fair Value of Derivative Instruments as of December 31, 2018 Assets: Natural gas price derivatives Derivative Financial Instruments – current $ 6,096 Oil price derivatives Derivative Financial Instruments – current 9,305 $ 15,401 The Company recognized cash settlements and changes in the fair value of its derivative financial instruments as a single component of other income (expenses). Gains and losses Successor Predecessor Successor Predecessor Gain/(Loss) Recognized in Earnings on Derivatives Three Months Ended For the Period from August 14, 2018 through September 30, 2018 For the Period from July 1, 2018 through August 13, 2018 Nine Months Ended For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Swaps $ 19,398 $ (166 ) $ (6 ) $ 29,856 $ (166 ) $ 1,267 Collars 5,460 (1,849 ) (77 ) 2,089 (1,849 ) (386 ) $ 24,858 $ (2,015 ) $ (83 ) $ 31,945 $ (2,015 ) $ 881 Subsequent to September 30, 2019, the Company entered into natural gas swap contracts covering 80,000 MMbtu per day for calendar 2020 with a weighted average price of $2.54 per MMbtu. These contracts contain a one-time option for the counterparty to extend the period to calendar 2021 in October 2020. The Company also entered into additional natural gas swap contracts covering 20,000 MMbtu per day for calendar 2020 at $2.50 per MMbtu. |
Stock-Based Compensation | Stock-Based Compensation Comstock accounts for employee stock-based compensation under the fair value method. Compensation cost is measured at the grant date based on the fair value of the award and is recognized over the award vesting period and included in The Company recognized $0.3 million of stock-based compensation expense within general and administrative expenses related to awards of restricted stock and PSUs to its employees and directors during the Successor period August 14, 2018 through September 30, 2018 and $0.8 million during the Predecessor period July 1 through August 13, 2018 and $3.9 million during the Predecessor period January 1, 2018 through August 13, 2018. During the period July 1, 2018 through August 13, 2018, the Predecessor Company granted 100,226 shares of restricted stock with a grant date fair value of $0.9 million, or $8.73 per share, to its independent directors. The change of control that occurred due to the Jones Contribution resulting in the vesting of all then outstanding restricted stock grants of 904,181 shares. During the Successor period August 14, 2018 through September 30, 2018, the Company granted 422,545 shares of restricted stock with a grant date fair value of $3.7 million, or $8.70 per share, to its employees. During the three months and nine months ended September 30, 2019 the Company granted 789,044 and 874,661 shares of restricted stock, respectively, with a grant date fair value of $4.3 million and $4.7 million, respectively, at a per share value of $5.51 per share and $5.40 per share, respectively, to its employees and directors. As of September 30, 2019, Comstock had 1,131,918 shares of unvested restricted stock outstanding at a weighted average grant date fair value of $6.15 per share. Total unrecognized compensation cost related to unvested restricted stock grants of $6.5 million as of September 30, 2019 is expected to be recognized over a period of 2.4 years. As of September 30, 2019, Comstock had 942,795 PSUs outstanding at a weighted average grant date fair value of $9.60 per unit. During the three and nine months ended September 30, 2019, the Company issued 618,672 PSUs with a grant date fair value of $7.85 per unit. The number of shares of common stock to be issued related to the PSUs is based on the Company's stock price performance as compared to its peers which could result in the issuance of anywhere from zero to 1,885,590 shares of common stock. Total unrecognized compensation cost related to these grants of $7.3 million as of September 30, 2019 is expected to be recognized over a period of 2.5 years. |
Revenue Recognition | Revenue Recognition Comstock produces oil and natural gas and reports revenues separately for each of these two primary products in its statements of operations. Revenues are recognized upon the transfer of produced volumes to the Company's customers, who take control of the volumes and receive all the benefits of ownership upon delivery at designated sales points. Payment is reasonably assured upon delivery of production. All sales are subject to contracts that have commercial substance, contain specific pricing terms, and define the enforceable rights and obligations of both parties. These contracts typically provide for cash settlement within 25 days following each production month and are cancellable upon 30 days' notice by either party. Prices for sales of oil and natural gas are generally based upon terms that are common in the oil and gas industry, including index or spot prices, location and quality differentials, as well as market supply and demand conditions. As a result, prices for oil and natural gas routinely fluctuate based on changes in these factors. Each unit of production (barrel of crude oil and thousand cubic feet of natural gas) represents a separate performance obligation under the Company's contracts since each unit has economic benefit on its own and each is priced separately according to the terms of the contracts. Comstock has elected to exclude all taxes from the measurement of transaction prices, and its revenues are reported net of royalties and exclude revenue interests owned by others because the Company acts as an agent when selling crude oil and natural gas, on behalf of royalty owners and working interest owners. Revenue is recorded in the month of production based on an estimate of the Company's share of volumes produced and prices realized. The Company recognizes any differences between estimates and actual amounts received in the month when payment is received. Historically, differences between estimated revenues and actual revenue received have not been significant. The amount of oil or natural gas sold may differ from the amount to which the Company is entitled based on its revenue interests in the properties. The Company did not have any significant imbalance positions at September 30, 2019. Sales of oil and natural gas generally occur at or near the wellhead. When sales of oil and gas occur at locations other than the wellhead, the Company accounts for costs incurred to transport the production to the delivery point as gathering and transportation expenses. The Company recognized accounts receivable of $97.8 million as of September 30, 2019 from customers for contracts where performance obligations have been satisfied and an unconditional right to consideration exists. |
Income Taxes | Income Taxes Deferred income taxes are provided to reflect the future tax consequences or benefits of differences between the tax basis of assets and liabilities and their reported amounts in the financial statements using enacted tax rates. In recording deferred income tax assets, the Company considers whether it is more likely than not that its deferred income tax assets will be realized in the future. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those deferred income tax assets would be deductible. The Company believes that after considering all the available objective evidence, historical and prospective, with greater weight given to historical evidence, management is not able to determine that it is more likely than not that all of its deferred tax assets will be realized. As a result, the Company established valuation allowances for its deferred tax assets and U.S. federal and state net operating loss carryforwards that are not expected to be utilized due to the uncertainty of generating taxable income prior to the expiration of the carryforward periods. The Company will continue to assess the valuation allowances against deferred tax assets considering all available information obtained in future periods. The following is an analysis of the consolidated income tax provision: Transition Period Transition Period Successor Successor Predecessor Successor Successor Predecessor Three Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from July 1, 2018 through August 13, 2018 Nine Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Current - State $ 72 $ 57 $ (22 ) $ (22 ) $ 57 $ 13 - Federal — — — — — — Deferred - State 591 20 (309 ) 1,246 20 (1,360 ) - Federal 3,184 3,863 936 13,959 3,863 2,412 $ 3,847 $ 3,940 $ 605 $ 15,183 $ 3,940 $ 1,065 The difference between the federal statutory rate of 21% and the effective tax rate is due to the following: Three Months ended September 30, Nine Months ended September 30, Transition Period Transition Period Successor Successor Predecessor Successor Successor Predecessor 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from July 1, 2018 through August 13, 2018 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Tax at statutory rate 21.0 % 21.0 % 21.0 % 21.0 % 21.0 % 21.0 % Tax effect of: State income taxes, net of federal benefit (1.8 ) 2.0 4.5 — 2.0 3.9 Valuation allowance on deferred tax assets 4.5 (0.6 ) (21.1 ) 2.3 (0.6 ) (24.1 ) Transaction costs 8.6 — — 1.9 — — Nondeductible stock-based compensation 1.2 (0.2 ) (0.7 ) 1.5 (0.2 ) (0.7 ) Other 2.7 — (7.4 ) — — (1.3 ) Effective tax rate 36.2 % 22.2 % (3.7 )% 26.7 % 22.2 % (1.2 )% The Tax Cuts and Jobs Act, which was enacted on December 22, 2017, reduced the corporate income tax rate effective January 1, 2018 from 35% to 21%. Among the other significant tax law changes that potentially affect the Company are the elimination of the corporate alternative minimum tax ("AMT"), changes that require operating losses incurred in 2018 and beyond be carried forward indefinitely with no carryback up to 80% of taxable income in a given year, and limitations on the deduction for interest expense incurred in 2018 or later for amounts in excess of 30% of its adjusted taxable income (defined as taxable income before interest and net operating losses) for the taxable year. The Company completed its accounting for the tax effects of enactment of the Tax Cuts and Jobs Act as of December 31, 2018. The Tax Cuts and Jobs Act repealed the AMT for tax years beginning on or after January 1, 2018 and provides that existing AMT credit carryforwards can be utilized to offset federal taxes for any taxable year. In addition, 50% of any unused AMT credit carryforwards can be refunded during tax years 2018 through 2020. During the current quarter, the Company received a $10.2 million refund for unused AMT credit carryforwards. The Company had $10.2 million of unused credit carryforwards at September 30, 2019. The shares of common stock issued as a result of the Jones Contribution triggered an ownership change under Section 382 of the Internal Revenue Code. As a result, Comstock's ability to use net operating losses ("NOLs") to reduce taxable income is generally limited to an annual amount based on the fair market value of its stock immediately prior to the ownership change multiplied by the long-term tax-exempt interest rate. The Company's NOLs are estimated to be limited to $3.3 million a year as a result of this limitation. In addition to this limitation, IRC Section 382 provides that a corporation with a net unrealized built-in gain immediately before an ownership change may increase its limitation by the amount of recognized built-in gain recognized during a recognition period, which is generally the five-year period immediately following an ownership change. Based on the fair market value of the Company's common stock immediately prior to the ownership change, Comstock believes that it has a net unrealized built-in gain which will increase the Section 382 limitation during the five-year recognition period from 2018 to 2023. NOLs that exceed the Section 382 limitation in any year continue to be allowed as carry forwards until they expire and can be used to offset taxable income for years within the carryover period subject to the limitation in each year. NOLs incurred prior to 2018 generally have a 20-year life until they expire. NOLs generated in 2018 and after would be carried forward indefinitely. Comstock's use of new NOLs arising after the date of an ownership change would not be affected by the 382 limitation. If the Company does not generate a sufficient level of taxable income prior to the expiration of the pre-2018 NOL carry forward periods, then it will lose the ability to apply those NOLs as offsets to future taxable income. The common stock issued in connection with the Covey Park Acquisition did not trigger an ownership change under Section 382. The Company's federal income tax returns for the years subsequent to December 31, 2015 remain subject to examination. The Company's income tax returns in major state income tax jurisdictions remain subject to examination for various periods subsequent to December 31, 2012. The Company currently believes that all other significant filing positions are highly certain and that all of its other significant income tax positions and deductions would be sustained under audit or the final resolution would not have a material effect on the consolidated financial statements. Therefore, the Company has not established any significant reserves for uncertain tax positions. |
Fair Value Measurements | Fair Value Measurements The Company holds or has held certain financial assets and liabilities that are required to be measured at fair value. These include cash and cash equivalents held in bank accounts and derivative financial instruments in the form of oil and natural gas price swap agreements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level hierarchy is followed for disclosure to show the extent and level of judgment used to estimate fair value measurements: Level 1 — Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date. Level 2 — Inputs used to measure fair value, other than quoted prices included in Level 1, are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument. Level 3 — Inputs used to measure fair value are unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management's estimates of market participant assumptions. The Company's oil and natural gas price swap agreements and its natural gas price collars were not traded on a public exchange, and their value is determined utilizing a discounted cash flow model based on inputs that are readily available in public markets and, accordingly, the valuation of these swap agreements, is categorized as a Level 2 measurement. There are no financial assets or liabilities accounted for at fair value as of September 30, 2019 that are a Level 3 measurement. Fair Values – Reported The following presents the carrying amounts and the fair values of the Company’s financial instruments as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value Assets: Commodity swaps, options and basis swaps (a) $ 84,260 $ 84,260 $ 15,401 $ 15,401 (Liabilities): Bank credit facility (b) (1,265,000 ) (1,265,000 ) (450,000 ) (450,000 ) 7.50% senior notes due 2025 (c) (450,703 ) (503,125 ) — — 9.75% senior notes due 2026 (c) (819,277 ) (709,750 ) (817,066 ) (720,375 ) (a) The Company's oil and nature gas swaps, options and basis swaps agreements and its natural gas price collars are classified as Level 2 and measured at fair value using a market approach using third party pricing services and other active markets or broker quotes that are readily available in the public markets and, accordingly, the valuation of these swap agreements, is categorized as a Level 2 measurement. (b) The book value of our floating rate debt outstanding approximates fair value because of its floating rate structure. (c) The fair value of the Company's fixed rate debt was based on quoted prices as of September 30, 2019, a Level 2 measurement. |
Earnings Per Share | Earnings Per Share Unvested share-based payment awards containing nonforfeitable rights to dividends are considered to be participating securities and included in the computation of basic and diluted earnings per share pursuant to the two-class method. PSUs represent the right to receive a number of shares of the Company's common stock that may range from zero to up to two times the number of PSUs granted on the award date based on the achievement of certain performance measures during a performance period. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, which would be issuable at the end of the respective period, assuming that date was the end of the contingency period. The treasury stock method is used to measure the dilutive effect of PSUs. The shares that would have been issuable upon exercise of the conversion rights contains in the Predecessor Company's convertible debt are based on the if-converted method for computing potentially dilutive shares of common stock that could be issued upon conversion. None of the Company's participating securities participate in losses and as such are excluded from the computation of basic earnings per share during periods of net losses. Basic and diluted income (loss) per share were determined as follows: Successor Successor Predecessor Three Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from July 1, 2018 through August 13, 2018 Loss Shares Per Share Income Shares Per Share Loss Shares Per Share (In thousands, except per share amounts) Net income (loss) attributable to common stock $ (1,337 ) $ 13,823 $ (16,865 ) Income allocable to unvested restricted shares — (51 ) — Basic income (loss) attributable to common stock (1,337 ) 171,487 $ (0.01 ) 13,772 105,448 $ 0.13 (16,865 ) 15,468 $ (1.09 ) Dilutive effect of performance share units — — — 15 — — Diluted income (loss) attributable to common stock $ (1,337 ) 171,487 $ (0.01 ) $ 13,772 105,463 $ 0.13 $ (16,865 ) 15,468 $ (1.09 ) Successor Successor Predecessor Nine Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 Income Shares Per Share Income Shares Per Share Loss Shares Per Share (In thousands, except per share amounts) Net income (loss) attributable to common stock $ 33,645 $ 13,823 $ (92,754 ) Income allocable to unvested restricted shares (141 ) (51 ) — Basic income (loss) attributable to common stock 33,504 127,709 $ 0.26 13,772 105,448 $ 0.13 (92,754 ) 15,262 $ (6.08 ) Dilutive effect of performance share units — — — 15 — — Diluted income (loss) attributable to common stock $ 33,504 127,709 $ 0.26 $ 13,772 105,463 $ 0.13 $ (92,754 ) 15,262 $ (6.08 ) Basic and diluted per share amounts are the same for the three months ended September 30, 2019 due to the net loss in that period. Basic and diluted shares for the nine months ended September 30, 2019 are the same as there was no impact from the unvested restricted shares. The impact from the convertible preferred stock was anti-dilutive for the three and nine months ended September 30. At September 30, 2019 and December 31, 2018, 1,131,918 and 414,545 shares of restricted stock, respectively, are included in common stock outstanding as such shares have a non-forfeitable right to participate in any dividends that might be declared and have the right to vote on matters submitted to the Company's stockholders. Weighted average shares of unvested restricted stock outstanding were as follows: Successor Successor Predecessor Successor Successor Predecessor Three Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from July 1, 2018 through August 13, 2018 Nine Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Unvested restricted stock 758 396 813 539 396 839 The dilutive effect of preferred stock is computed using the if-converted method as if conversion of the preferred shares had been outstanding throughout the three months and nine months ended September 30, 2019. For the three and nine months ended September 30, 2019, the preferred stock was antidilutive. The preferred stock can be converted to common stock any time after July 16, 2020 at a conversion price of $4.00 per share, for a total of 96,250,000 shares of common stock. All unvested PSUs, warrants exercisable into common stock and contingently issuable shares related to the convertible debt that would be dilutive in the computation of earnings per share were as follows: Successor Successor Predecessor Successor Successor Predecessor Three Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from July 1, 2018 through August 13, 2018 Nine Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands except per share/unit data) Weighted average PSUs 862 315 514 513 315 476 Weighted average grant date fair value $ 9.60 $ 12.93 $ 13.83 $ 9.60 $ 12.93 $ 13.83 Weighted average warrants for common — 15 42 — 15 142 Weighted average exercise price per share $ — $ 0.01 $ 0.01 $ — $ 0.01 $ 0.01 Weighted average contingently convertible shares — — 40,631 — — 39,819 Weighted average conversion price per $ — $ — $ 12.32 $ — $ — $ 12.32 All warrants, PSUs and potentially dilutive shares from conversion of senior notes in the three months ended September 30, 2018 were anti-dilutive and excluded from the computation of loss per share. PSUs were dilutive in the predecessor period from August 14, 2018 through September 30, 2018 and are included in the computation of diluted earnings per share. |
Supplementary Information With Respect to the Consolidated Statements of Cash Flows | Supplementary Information With Respect to the Consolidated Statements of Cash Flows Successor Successor Predecessor Nine Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Cash payments for: Interest $ 110,820 $ 1,999 $ 36,187 Income taxes $ 2 $ — $ 2 Non-cash investing activities include: Increase in accrued capital expenditures $ 46,918 $ 16,192 $ 12,937 Non-cash investing activities related to the Covey Park Acquisition include: Issuance of common stock $ 167,808 $ — $ — Issuance of Series A Convertible Preferred Stock $ 200,000 $ — $ — Assumed 7½% senior notes $ 446,625 $ — $ — Acquired working capital $ 41,624 $ — $ — Interest paid in-kind related to the predecessor Company's convertible notes was $25.0 million during the period January 1, 2018 through August 13, 2018. In connection with the Covey Park Acquisition, the Company issued 28.8 million shares of common stock and 210,000 shares of Series A Convertible Preferred with a redemption value of $210.0 million and a fair value of $200.0 million as non-cash consideration. In addition, the Company assumed Covey Park's $625.0 million 7½% senior notes that were outstanding at closing. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (ASU 2017-04) "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." ASU 2017-04 eliminates step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. ASU 2017-04 is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019 and early adoption is permitted The Company will assess the impact of ASU 2017-04 on its financial statements when it performs impairment assessments following adoption of this standard. The Company has elected to not early adopt ASU 2017-04. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Estimated Fair Value of Assets and Liabilities and Resulting Goodwill of Jones Contribution | The following table represents the allocation of fair value related to the assets acquired and the liabilities assumed after giving consideration for final purchase accounting adjustments based on the fair value of Comstock: (In thousands) Fair Value of Comstock's Common Stock $ 149,357 Fair Value of Liabilities Assumed – Current Liabilities 180,452 Long-Term Debt 2,059,560 Deferred Income Taxes 49,391 Reserve for Future Abandonment Costs 4,440 Net Liabilities Assumed 2,293,843 Fair Value of Assets Acquired – Current Assets 936,026 Oil and Gas Properties 1,147,749 Other Property & Equipment 4,440 Income Taxes Receivable 19,086 Other Assets 2 Total Assets 2,107,303 Goodwill $ 335,897 |
Summary of Preliminary Purchase Price Allocation of the Assets Acquired and Liabilities Assumed Based on their Fair Values | The following table presents the Company's preliminary purchase price allocation of the assets acquired and liabilities assumed based on their fair values as of the acquisition date: (In thousands) Consideration: Cash Paid $ 700,000 Fair Value of Common Stock Issued 167,808 Fair Value of Series A Preferred Stock Issued 200,000 Total Consideration 1,067,808 Liabilities Assumed: Accounts Payable and Accrued Liabilities 129,622 Derivative Financial Instruments 388 Other Current Liabilities 9,930 Long Term Debt 826,625 Covey Park Preferred Equity 153,390 Non-current Derivative Financial Instruments 186 Asset Retirement Obligations 5,374 Deferred Income Taxes 23,466 Other Non-current Liabilities 9,893 Liabilities Assumed 1,158,874 Total Consideration and Liabilities Assumed $ 2,226,682 Assets Acquired: Cash and Cash Equivalents $ 6,131 Accounts Receivable 86,285 Current Derivative Financial Instruments 51,004 Other Current Assets 5,511 Proved Oil and Natural Gas Properties 1,818,413 Unproved Oil and Natural Gas Properties 237,210 Other Property, Plant and Equipment 2,262 Non-current Derivative Financial Instruments 19,866 Total Assets Acquired $ 2,226,682 |
Summary of Unaudited Pro Forma Financial Information | In addition, the pro forma earnings exclude acquisition-related costs. The unaudited pro forma results do not reflect any cost savings or other synergies that may arise in the future. Pro Forma Pro Forma Pro Forma Pro Forma (In thousands, except per share amount) Revenues $ 247,192 $ 293,266 $ 858,042 $ 790,653 Net income $ 36,755 $ 54,242 $ 201,338 $ 92,037 Net income per share: Basic $ 0.15 $ 0.24 $ 0.93 $ 0.34 Diluted $ 0.13 $ 0.19 $ 0.72 $ 0.33 |
Results of Operations for Properties | Results of operations for properties that were sold in 2018 were as follows: Predecessor For the Period from July 1, 2018 through August 13, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Total oil and gas sales $ — $ 17,747 Total operating expenses (1) — (6,134 ) Operating income $ — $ 11,613 (1) Includes direct operating expenses, depreciation, depletion and amortization and exploration expense and excludes interest and general and administrative expense. No depreciation, depletion and amortization expense has been provided for subsequent to the date the assets were designated as held for sale. |
Summary of Lease Cost Recognized | Lease costs recognized during the three months and nine months ended September 30, 2019 were as follows: Successor Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 (In thousands) Operating lease cost included in general and administrative expense $ 411 $ 1,234 Operating lease cost included in lease operating expense 99 291 Short-term lease cost (drilling rig costs included in proved oil and gas properties) 19,304 39,487 $ 19,814 $ 41,012 |
Summary of Liabilities Under Contract Contain Operating Leases | As of September 30, 2019, Comstock had the following liabilities under contracts that contain operating leases: (In thousands) October 1, 2019 to December 31, 2019 $ 1,997 2020 1,740 2021 390 Total lease payments 4,127 Imputed interest (218 ) Total lease liability $ 3,909 |
Summary of Accrued Expenses | Accrued expenses at September 30, 2019 and December 31, 2018 consisted of the following: Successor As of As of (In thousands) Accrued drilling costs $ 64,838 $ 17,920 Accrued interest payable 30,681 35,461 Accrued transportation costs 18,686 4,632 Accrued transaction costs 15,475 — Accrued lease operating expenses 13,577 2,130 Accrued employee compensation 8,476 6,045 Other 4,023 1,898 $ 155,756 $ 68,086 |
Summary of Changes in Reserve for Future Abandonment Costs | The following table summarizes the changes in Comstock's total estimated liability for such obligations during the periods presented: Successor Predecessor Nine Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Future abandonment costs — beginning of period $ 5,136 $ 4,683 $ 10,407 Wells acquired 5,374 45 346 New wells drilled 256 10 17 Accretion expense 369 — — Liabilities settled and assets disposed of (40 ) — (87 ) Future abandonment costs — end of period $ 11,095 $ 4,738 $ 10,683 |
Schedule of Gas Derivative Contracts Volume and Prices | The Company had the following outstanding commodity-based derivative financial instruments, excluding basis swaps which are discussed separately below, at September 30, 2019: Future Production Period Three Months Year Ending Year Ending Year Ending Total Natural Gas Swap Contracts: Volume (MMbtu) 41,818,281 99,144,209 20,908,140 10,950,000 172,820,630 Average Price per MMbtu $2.85 $2.81 $2.87 $2.81 $2.83 Natural Gas 2-Way Collar Contracts: Volume (MMbtu) 9,916,000 16,350,000 — — 26,266,000 Price per MMbtu Average Ceiling $3.52 $3.46 — — $3.48 Average Floor $2.39 $2.47 — — $2.44 Natural Gas 3-Way Collar Contracts: Volume (MMbtu) 12,880,000 26,510,000 — — 39,390,000 Price per MMbtu Average Ceiling $3.08 $2.99 — — $3.02 Average Floor $2.79 $2.65 — — $2.69 Average Put $2.41 $2.33 — — $2.36 Crude Oil Collar Contracts: Volume (Barrels) 284,200 1,125,100 — — 1,409,300 Price per Barrel — — Average Ceiling $65.63 $65.33 — — $65.39 Average Floor $45.00 $48.48 — — $47.78 In addition to the swaps and collars above, at September 30, 2019, the Company had basis swap contracts that lock-in the differential between NYMEX Henry Hub and certain physical pricing indices. These contracts settle monthly through December 2022 and include a total volume of 53,030,000 MMbtu. The fair value of these contracts was a net asset of $3.2 million at September 30, 2019. |
Schedule of Derivative Instruments | None of the Company's derivative contracts were designated as cash flow hedges. The aggregate fair value of the Company's derivative instruments reported in the accompanying consolidated balance sheets by type, including the classification between assets and liabilities, consists of the following: Type Consolidated Balance Sheet Location Fair Value (in thousands) Successor Fair Value of Derivative Instruments as of September 30, 2019 Assets : Natural gas price derivatives Derivative Financial Instruments – current $ 60,002 Oil price derivatives Derivative Financial Instruments – current 2,275 $ 62,277 Natural gas price derivatives Derivative Financial Instruments – long-term $ 21,118 Oil price derivatives Derivative Financial Instruments – long-term 865 $ 21,983 Successor Fair Value of Derivative Instruments as of December 31, 2018 Assets: Natural gas price derivatives Derivative Financial Instruments – current $ 6,096 Oil price derivatives Derivative Financial Instruments – current 9,305 $ 15,401 |
Schedule of Gains and Losses from Derivative Financial Instruments | Gains and losses Successor Predecessor Successor Predecessor Gain/(Loss) Recognized in Earnings on Derivatives Three Months Ended For the Period from August 14, 2018 through September 30, 2018 For the Period from July 1, 2018 through August 13, 2018 Nine Months Ended For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Swaps $ 19,398 $ (166 ) $ (6 ) $ 29,856 $ (166 ) $ 1,267 Collars 5,460 (1,849 ) (77 ) 2,089 (1,849 ) (386 ) $ 24,858 $ (2,015 ) $ (83 ) $ 31,945 $ (2,015 ) $ 881 |
Consolidated Income Tax Provision | The following is an analysis of the consolidated income tax provision: Transition Period Transition Period Successor Successor Predecessor Successor Successor Predecessor Three Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from July 1, 2018 through August 13, 2018 Nine Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Current - State $ 72 $ 57 $ (22 ) $ (22 ) $ 57 $ 13 - Federal — — — — — — Deferred - State 591 20 (309 ) 1,246 20 (1,360 ) - Federal 3,184 3,863 936 13,959 3,863 2,412 $ 3,847 $ 3,940 $ 605 $ 15,183 $ 3,940 $ 1,065 |
Difference Between Federal Statutory Rate and Effective Tax Rate | The difference between the federal statutory rate of 21% and the effective tax rate is due to the following: Three Months ended September 30, Nine Months ended September 30, Transition Period Transition Period Successor Successor Predecessor Successor Successor Predecessor 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from July 1, 2018 through August 13, 2018 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Tax at statutory rate 21.0 % 21.0 % 21.0 % 21.0 % 21.0 % 21.0 % Tax effect of: State income taxes, net of federal benefit (1.8 ) 2.0 4.5 — 2.0 3.9 Valuation allowance on deferred tax assets 4.5 (0.6 ) (21.1 ) 2.3 (0.6 ) (24.1 ) Transaction costs 8.6 — — 1.9 — — Nondeductible stock-based compensation 1.2 (0.2 ) (0.7 ) 1.5 (0.2 ) (0.7 ) Other 2.7 — (7.4 ) — — (1.3 ) Effective tax rate 36.2 % 22.2 % (3.7 )% 26.7 % 22.2 % (1.2 )% |
Summary of Carrying Amounts and Fair Values of Financial Instruments | The following presents the carrying amounts and the fair values of the Company’s financial instruments as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value Assets: Commodity swaps, options and basis swaps (a) $ 84,260 $ 84,260 $ 15,401 $ 15,401 (Liabilities): Bank credit facility (b) (1,265,000 ) (1,265,000 ) (450,000 ) (450,000 ) 7.50% senior notes due 2025 (c) (450,703 ) (503,125 ) — — 9.75% senior notes due 2026 (c) (819,277 ) (709,750 ) (817,066 ) (720,375 ) (a) The Company's oil and nature gas swaps, options and basis swaps agreements and its natural gas price collars are classified as Level 2 and measured at fair value using a market approach using third party pricing services and other active markets or broker quotes that are readily available in the public markets and, accordingly, the valuation of these swap agreements, is categorized as a Level 2 measurement. (b) The book value of our floating rate debt outstanding approximates fair value because of its floating rate structure. (c) The fair value of the Company's fixed rate debt was based on quoted prices as of September 30, 2019, a Level 2 measurement. |
Basic and Diluted Income (Loss) Per Share | Basic and diluted income (loss) per share were determined as follows: Successor Successor Predecessor Three Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from July 1, 2018 through August 13, 2018 Loss Shares Per Share Income Shares Per Share Loss Shares Per Share (In thousands, except per share amounts) Net income (loss) attributable to common stock $ (1,337 ) $ 13,823 $ (16,865 ) Income allocable to unvested restricted shares — (51 ) — Basic income (loss) attributable to common stock (1,337 ) 171,487 $ (0.01 ) 13,772 105,448 $ 0.13 (16,865 ) 15,468 $ (1.09 ) Dilutive effect of performance share units — — — 15 — — Diluted income (loss) attributable to common stock $ (1,337 ) 171,487 $ (0.01 ) $ 13,772 105,463 $ 0.13 $ (16,865 ) 15,468 $ (1.09 ) Successor Successor Predecessor Nine Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 Income Shares Per Share Income Shares Per Share Loss Shares Per Share (In thousands, except per share amounts) Net income (loss) attributable to common stock $ 33,645 $ 13,823 $ (92,754 ) Income allocable to unvested restricted shares (141 ) (51 ) — Basic income (loss) attributable to common stock 33,504 127,709 $ 0.26 13,772 105,448 $ 0.13 (92,754 ) 15,262 $ (6.08 ) Dilutive effect of performance share units — — — 15 — — Diluted income (loss) attributable to common stock $ 33,504 127,709 $ 0.26 $ 13,772 105,463 $ 0.13 $ (92,754 ) 15,262 $ (6.08 ) |
Weighted Average Shares of Unvested Restricted Stock | Weighted average shares of unvested restricted stock outstanding were as follows: Successor Successor Predecessor Successor Successor Predecessor Three Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from July 1, 2018 through August 13, 2018 Nine Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Unvested restricted stock 758 396 813 539 396 839 |
Common Stock and Convertible Stock Dilutive in Computation of Earning Per Share | The dilutive effect of preferred stock is computed using the if-converted method as if conversion of the preferred shares had been outstanding throughout the three months and nine months ended September 30, 2019. For the three and nine months ended September 30, 2019, the preferred stock was antidilutive. The preferred stock can be converted to common stock any time after July 16, 2020 at a conversion price of $4.00 per share, for a total of 96,250,000 shares of common stock. All unvested PSUs, warrants exercisable into common stock and contingently issuable shares related to the convertible debt that would be dilutive in the computation of earnings per share were as follows: Successor Successor Predecessor Successor Successor Predecessor Three Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from July 1, 2018 through August 13, 2018 Nine Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands except per share/unit data) Weighted average PSUs 862 315 514 513 315 476 Weighted average grant date fair value $ 9.60 $ 12.93 $ 13.83 $ 9.60 $ 12.93 $ 13.83 Weighted average warrants for common — 15 42 — 15 142 Weighted average exercise price per share $ — $ 0.01 $ 0.01 $ — $ 0.01 $ 0.01 Weighted average contingently convertible shares — — 40,631 — — 39,819 Weighted average conversion price per $ — $ — $ 12.32 $ — $ — $ 12.32 |
Supplementary Information of Consolidated Statements of Cash Flows | Successor Successor Predecessor Nine Months Ended September 30, 2019 For the Period from August 14, 2018 through September 30, 2018 For the Period from January 1, 2018 through August 13, 2018 (In thousands) Cash payments for: Interest $ 110,820 $ 1,999 $ 36,187 Income taxes $ 2 $ — $ 2 Non-cash investing activities include: Increase in accrued capital expenditures $ 46,918 $ 16,192 $ 12,937 Non-cash investing activities related to the Covey Park Acquisition include: Issuance of common stock $ 167,808 $ — $ — Issuance of Series A Convertible Preferred Stock $ 200,000 $ — $ — Assumed 7½% senior notes $ 446,625 $ — $ — Acquired working capital $ 41,624 $ — $ — |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-term Debt | At September 30, 2019, long-term debt was comprised of the following: (In thousands) Bank Credit Facility: Principal $ 1,265,000 7½% Senior Notes due 2025: Principal 625,000 Discount, net of amortization (174,297 ) 9¾% Senior Notes due 2026: Principal $ 850,000 Discount, net of amortization (30,723 ) Debt issuance costs, net of amortization (26,906 ) $ 2,508,074 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information 1 (Detail) | Nov. 01, 2019LocationMMcfashares | Jul. 16, 2019USD ($)$ / shares$ / bbl$ / Mcfshares | Aug. 14, 2018USD ($)$ / bbl$ / Mcfshares | Aug. 13, 2018USD ($) | Apr. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($) | Aug. 13, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Jones contribution transaction, ownership percentage | 84.00% | ||||||||||||
Jones contribution transaction, Shares issued | shares | 88,571,429 | ||||||||||||
Management's oil price outlook | $ / bbl | 74.80 | ||||||||||||
Management's gas price outlook | $ / Mcf | 3.32 | ||||||||||||
Annual minimum discount rate | 10.00% | ||||||||||||
Annual maximum discount rate | 25.00% | ||||||||||||
Decrease in deferred income taxes and goodwill | $ 14,300,000 | ||||||||||||
Merger value | $ 2,107,303,000 | ||||||||||||
Debt assumed in merger | $ 446,625,000 | ||||||||||||
Repayments of outstanding borrowings | $ 1,291,352,000 | $ 49,679,000 | 72,000,000 | ||||||||||
Value of common stock shares issued | $ 92,762,000 | 92,762,000 | 92,762,000 | $ 52,936,000 | |||||||||
Acquisition related fees | $ 2,549,000 | 39,657,000 | 2,866,000 | 41,100,000 | |||||||||
Purchase price allocation period | 12 months | ||||||||||||
Operating revenues | 32,588,000 | 70,123,000 | 224,444,000 | 166,630,000 | 479,441,000 | ||||||||
Operating income | $ 8,228,000 | 34,581,000 | 76,360,000 | 10,822,000 | 173,205,000 | ||||||||
Loss on sale of oil and gas properties | $ (98,000) | $ 35,438,000 | 25,000 | ||||||||||
Impairment of oil and gas properties | 0 | $ 0 | 0 | $ 0 | |||||||||
Goodwill | 335,897,000 | 335,897,000 | 335,897,000 | 335,897,000 | $ 350,214,000 | ||||||||
Cash flow hedges derivative instruments | 0 | $ 0 | 0 | ||||||||||
South Texas Sold Properties | |||||||||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Gross proceeds from sale of oil and gas properties | $ 106,400,000 | ||||||||||||
Common Stock | |||||||||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Shares issued to shareholder | shares | 78,833,000 | ||||||||||||
Shares issued as consideration | shares | 28,800,000 | ||||||||||||
Affiliates Controlled By Majority Shareholder Jerry Jones | Common Stock | |||||||||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Shares issued to shareholder | shares | 50,000,000 | ||||||||||||
Value of common stock shares issued | $ 300,000,000 | ||||||||||||
Convertible Series A Preferred Stock | |||||||||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Temporary equity stock issued during period value new issues | 210,000,000 | ||||||||||||
Fair value of preferred stock | 200,000,000 | $ 200,000,000 | $ 200,000,000 | ||||||||||
Series B 10% Convertible Preferred Stock | Affiliates Controlled By Majority Shareholder Jerry Jones | |||||||||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Temporary equity stock issued during period value new issues | $ 175,000,000 | ||||||||||||
Temporary equity stock issued during period shares new issues | shares | 175,000 | ||||||||||||
Covey Park Acquisition | |||||||||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Cash received by equity owners of acquiree | $ 700,000,000 | ||||||||||||
Merger value | 2,226,682,000 | ||||||||||||
Repayments of outstanding borrowings | 380,000,000 | ||||||||||||
Preferred equity redeemed in merger | 153,400,000 | ||||||||||||
Acquisition related fees | 41,100,000 | ||||||||||||
Fair value of asset retirement obligations | 5,374,000 | ||||||||||||
Operating revenues | 117,200,000 | ||||||||||||
Operating income | $ 20,600,000 | ||||||||||||
Covey Park Acquisition | Convertible Series A Preferred Stock | |||||||||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Temporary equity stock issued during period value new issues | $ 210,000,000 | ||||||||||||
Interest rate on debt instrument | 7.50% | 7.50% | 7.50% | ||||||||||
Covey Park Acquisition | Common Stock | |||||||||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Shares issued to shareholder | shares | 28,833,000 | ||||||||||||
Share issue price | $ / shares | $ 5.82 | ||||||||||||
Covey Park Acquisition | 7.5% Senior Notes | |||||||||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Debt assumed in merger | $ 625,000,000 | ||||||||||||
Interest rate on debt instrument | 7.50% | ||||||||||||
North Louisiana Property Acquisition | Subsequent Event | |||||||||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Shares issued as consideration | shares | 4,500,000 | ||||||||||||
Business combination acquired properties produced natural gas | MMcf | 12 | ||||||||||||
Business combination producing net acres | a | 3,000 | ||||||||||||
Business combination drilling locations net | Location | 12.7 | ||||||||||||
Bakken Shale Properties | |||||||||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Oil and gas property cost basis | 397,600,000 | ||||||||||||
Oil and gas property capitalized costs | 554,300,000 | ||||||||||||
Oil and gas property accumulated depletion, depreciation and amortization | $ 156,700,000 | ||||||||||||
Goodwill Oil and Gas Property Valuation | |||||||||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Management's oil price outlook | $ / bbl | 79.72 | ||||||||||||
Management's gas price outlook | $ / Mcf | 3.87 | ||||||||||||
Annual minimum discount rate | 10.00% | ||||||||||||
Annual maximum discount rate | 25.00% | ||||||||||||
Oil and Gas Properties | Covey Park Acquisition | |||||||||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Fair value of asset retirement obligations | $ 5,400,000 | ||||||||||||
South Texas Asset Held for Sale | |||||||||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Loss on sale of oil and gas properties | $ 35,400,000 | $ 35,400,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Allocation Fair Value of Assets Acquired and Liabilities Assumed After Giving Consideration For Final Purchase Accounting Adjustments Based on Fair Value (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Aug. 14, 2018 |
Jones Contribution And Refinancing Plans [Abstract] | |||
Fair Value of Comstock's Common Stock | $ 149,357 | ||
Fair Value of Liabilities Assumed – | |||
Current Liabilities | 180,452 | ||
Long-Term Debt | 2,059,560 | ||
Deferred Income Taxes | 49,391 | ||
Reserve for Future Abandonment Costs | 4,440 | ||
Net Liabilities Assumed | 2,293,843 | ||
Fair Value of Assets Acquired – | |||
Current Assets | 936,026 | ||
Oil and Gas Properties | 1,147,749 | ||
Other Property & Equipment | 4,440 | ||
Income Taxes Receivable | 19,086 | ||
Other Assets | 2 | ||
Total Assets | 2,107,303 | ||
Goodwill | $ 335,897 | $ 350,214 | $ 335,897 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Preliminary Purchase Price Allocation of the Assets Acquired and Liabilities Assumed Based on their Fair Values (Details) - USD ($) $ in Thousands | Jul. 16, 2019 | Aug. 14, 2018 |
Liabilities Assumed: | ||
Deferred Income Taxes | $ 49,391 | |
Net Liabilities Assumed | 2,293,843 | |
Assets Acquired: | ||
Total Assets | $ 2,107,303 | |
Covey Park Equity Owners | ||
Consideration: | ||
Cash Paid | $ 700,000 | |
Total Consideration | 1,067,808 | |
Liabilities Assumed: | ||
Accounts Payable and Accrued Liabilities | 129,622 | |
Derivative Financial Instruments | 388 | |
Other Current Liabilities | 9,930 | |
Long Term Debt | 826,625 | |
Covey Park Preferred Equity | 153,390 | |
Non-current Derivative Financial Instruments | 186 | |
Asset Retirement Obligations | 5,374 | |
Deferred Income Taxes | 23,466 | |
Other Non-current Liabilities | 9,893 | |
Net Liabilities Assumed | 1,158,874 | |
Total Consideration and Liabilities Assumed | 2,226,682 | |
Assets Acquired: | ||
Cash and Cash Equivalents | 6,131 | |
Accounts Receivable | 86,285 | |
Current Derivative Financial Instruments | 51,004 | |
Other Current Assets | 5,511 | |
Proved Oil and Natural Gas Properties | 1,818,413 | |
Unproved Oil and Natural Gas Properties | 237,210 | |
Other Property, Plant and Equipment | 2,262 | |
Non-current Derivative Financial Instruments | 19,866 | |
Total Assets | 2,226,682 | |
Covey Park Equity Owners | Series A 10% Convertible Preferred Stock | ||
Consideration: | ||
Fair Value of Stock Issued | 200,000 | |
Covey Park Equity Owners | Common Stock | ||
Consideration: | ||
Fair Value of Stock Issued | $ 167,808 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Unaudited Pro Forma Financial Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | ||||||
Aug. 13, 2018 | Sep. 30, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Aug. 13, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Total oil and gas sales | $ 32,588 | $ 70,123 | $ 224,444 | $ 166,630 | $ 479,441 | ||||||
Net income (loss) | $ (16,865) | $ 13,823 | $ 6,791 | $ 21,407 | $ 13,575 | $ (34,003) | $ (41,886) | $ (92,754) | $ 41,773 | ||
Net income per share: | |||||||||||
Basic | $ 0.13 | $ (0.01) | $ 0.26 | ||||||||
Diluted | $ 0.13 | $ (0.01) | $ 0.26 | ||||||||
Pro Forma | |||||||||||
Total oil and gas sales | $ 247,192 | $ 293,266 | $ 858,042 | $ 790,653 | |||||||
Net income (loss) | $ 36,755 | $ 54,242 | $ 201,338 | $ 92,037 | |||||||
Net income per share: | |||||||||||
Basic | $ 0.15 | $ 0.24 | $ 0.93 | $ 0.34 | |||||||
Diluted | $ 0.13 | $ 0.19 | $ 0.72 | $ 0.33 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Results of Operations for Properties (Detail) $ in Thousands | 7 Months Ended | |
Aug. 13, 2018USD ($) | ||
Disclosure Summary Of Significant Accounting Policies Results Of Operations For Properties Detail [Abstract] | ||
Total oil and gas sales | $ 17,747 | |
Total operating expenses | (6,134) | [1] |
Operating income | $ 11,613 | |
[1] | Includes direct operating expenses, depreciation, depletion and amortization and exploration expense and excludes interest and general and administrative expense. No depreciation, depletion and amortization expense has been provided for subsequent to the date the assets were designated as held for sale. |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Leases - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Jan. 01, 2019 | |
Operations And Summary Of Significant Accounting Policies [Line Items] | |||
Operating Lease Right-of-Use Assets | $ 3,909 | $ 3,909 | |
Operating lease liabilities, short term | 1,997 | 1,997 | |
Operating lease liabilities, long term | $ 1,912 | $ 1,912 | |
Operating lease utilized discount rate | 5.00% | 5.00% | |
Prior advance notice period for cancellation of rig contracts | 30 days | ||
Cash payments for operating leases associated with right-of-use assets | $ 500 | $ 1,500 | |
Operating lease, weighted average remaining lease term | 2 years 2 months 12 days | 2 years 2 months 12 days | |
Operating lease, weighted average discount rate, percent | 5.00% | 5.00% | |
Expected future payments for contracted drilling services | $ 30,600 | $ 30,600 | |
Contract term related to drilling services | through April 2020 | ||
ASU 842 | |||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||
Operating Lease Right-of-Use Assets | $ 5,200 | ||
Operating lease liabilities, short term | 2,000 | ||
Operating lease liabilities, long term | $ 3,200 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Summary of Lease Cost Recognized (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Operations And Summary Of Significant Accounting Policies [Line Items] | ||
Operating lease cost | $ 19,814 | $ 41,012 |
General and Administrative Expense | ||
Operations And Summary Of Significant Accounting Policies [Line Items] | ||
Operating lease cost | 411 | 1,234 |
Lease Operating Expense | ||
Operations And Summary Of Significant Accounting Policies [Line Items] | ||
Operating lease cost | 99 | 291 |
Short-term Drilling Rig Costs Included in Proved Oil and Gas Properties | ||
Operations And Summary Of Significant Accounting Policies [Line Items] | ||
Operating lease cost | $ 19,304 | $ 39,487 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Summary of Liabilities Under Contract Contain Operating Leases (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Operating leases | |
October 1, 2019 to December 31, 2019 | $ 1,997 |
2020 | 1,740 |
2021 | 390 |
Total lease payments | 4,127 |
Imputed interest | (218) |
Total lease liability | $ 3,909 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Summary of Accrued Expenses (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accrued Liabilities, Current [Abstract] | ||
Accrued drilling costs | $ 64,838 | $ 17,920 |
Accrued interest payable | 30,681 | 35,461 |
Accrued transportation costs | 18,686 | 4,632 |
Accrued transaction costs | 15,475 | |
Accrued lease operating expenses | 13,577 | 2,130 |
Accrued employee compensation | 8,476 | 6,045 |
Other | 4,023 | 1,898 |
Total accrued expenses | $ 155,756 | $ 68,086 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Summary of Changes in Reserve for Future Abandonment Costs (Detail) - USD ($) $ in Thousands | 2 Months Ended | 7 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Aug. 13, 2018 | Sep. 30, 2019 | |
Asset Retirement Obligations Noncurrent [Abstract] | |||
Future abandonment costs — beginning of period | $ 4,683 | $ 5,136 | |
Wells acquired | 45 | 5,374 | |
New wells drilled | 10 | 256 | |
Accretion expense | 369 | ||
Liabilities settled and assets disposed of | (40) | ||
Future abandonment costs — end of period | 4,738 | $ 4,683 | $ 11,095 |
Predecessor | |||
Asset Retirement Obligations Noncurrent [Abstract] | |||
Future abandonment costs — beginning of period | $ 10,683 | 10,407 | |
Wells acquired | 346 | ||
New wells drilled | 17 | ||
Liabilities settled and assets disposed of | (87) | ||
Future abandonment costs — end of period | $ 10,683 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Schedule of Derivative Contracts Volume and Prices (Detail) | Sep. 30, 2019MMBTUbbl$ / bbl$ / MMBTU |
Natural Gas Derivatives | |
Derivative [Line Items] | |
Volume | MMBTU | 172,820,630 |
Average price | 2.83 |
Natural Gas Derivatives | Swap Contracts for Q4 | |
Derivative [Line Items] | |
Volume | MMBTU | 41,818,281 |
Average price | 2.85 |
Natural Gas Derivatives | Swap Contracts for 2021 | |
Derivative [Line Items] | |
Volume | MMBTU | 20,908,140 |
Average price | 2.87 |
Natural Gas Derivatives | Swap Contracts for 2020 | |
Derivative [Line Items] | |
Volume | MMBTU | 99,144,209 |
Average price | 2.81 |
Natural Gas Derivatives | Swap Contracts for 2022 | |
Derivative [Line Items] | |
Volume | MMBTU | 10,950,000 |
Average price | 2.81 |
Natural Gas 3-Way Collar Contracts, in MMBTU | |
Derivative [Line Items] | |
Volume | MMBTU | 39,390,000 |
Ceiling, Average price | 3.02 |
Floor, Average price | 2.69 |
Put, Average price | 2.36 |
Natural Gas 3-Way Collar Contracts, in MMBTU | Swap Contracts for Q4 | |
Derivative [Line Items] | |
Volume | MMBTU | 12,880,000 |
Ceiling, Average price | 3.08 |
Floor, Average price | 2.79 |
Put, Average price | 2.41 |
Natural Gas 3-Way Collar Contracts, in MMBTU | Swap Contracts for 2020 | |
Derivative [Line Items] | |
Volume | MMBTU | 26,510,000 |
Ceiling, Average price | 2.99 |
Floor, Average price | 2.65 |
Put, Average price | 2.33 |
Natural Gas 2-Way Collar Contracts | |
Derivative [Line Items] | |
Volume | MMBTU | 26,266,000 |
Ceiling, Average price | 3.48 |
Floor, Average price | 2.44 |
Natural Gas 2-Way Collar Contracts | Collar Contracts for Q4 | |
Derivative [Line Items] | |
Volume | MMBTU | 9,916,000 |
Ceiling, Average price | 3.52 |
Floor, Average price | 2.39 |
Natural Gas 2-Way Collar Contracts | Collar Contracts for 2020 | |
Derivative [Line Items] | |
Volume | MMBTU | 16,350,000 |
Ceiling, Average price | 3.46 |
Floor, Average price | 2.47 |
Crude Oil Contracts, in Barrels | |
Derivative [Line Items] | |
Volume | bbl | 1,409,300 |
Ceiling, Average price | $ / bbl | 65.39 |
Floor, Average price | $ / bbl | 47.78 |
Crude Oil Contracts, in Barrels | Collar Contracts for Q4 | |
Derivative [Line Items] | |
Volume | bbl | 284,200 |
Ceiling, Average price | $ / bbl | 65.63 |
Floor, Average price | $ / bbl | 45 |
Crude Oil Contracts, in Barrels | Collar Contracts for 2020 | |
Derivative [Line Items] | |
Volume | bbl | 1,125,100 |
Ceiling, Average price | $ / bbl | 65.33 |
Floor, Average price | $ / bbl | 48.48 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Additional Information 2 (Detail) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | ||
Oct. 31, 2019MMBTU_per_day$ / MMBTU | Aug. 13, 2018USD ($)$ / sharesshares | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2019USD ($)MMBTUUnit$ / shares$ / EquityUnitshares | Aug. 13, 2018USD ($)shares | Sep. 30, 2019USD ($)MMBTUUnitProduct$ / shares$ / EquityUnitshares | Dec. 31, 2018USD ($)shares | |
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||
Stock-based compensation expense recognized | $ 329 | $ 3,912 | $ 2,359 | ||||
Number of primary products | Product | 2 | ||||||
Contract cash settlement max days | 25 days | ||||||
Contract cancellable notice term | 30 days | ||||||
Accounts Receivable related to satisfied performance obligations and unconditional right to consideration | $ 97,750 | $ 97,750 | $ 87,611 | ||||
Restricted Stock | |||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||
Number of shares, granted | shares | 100,226 | 422,545 | 789,044 | 874,661 | |||
Restricted stock grant date fair value | $ 900 | $ 3,700 | $ 4,300 | $ 4,700 | |||
Grant date fair value per share | $ / shares | $ 8.73 | $ 8.70 | $ 5.51 | $ 5.40 | |||
Shares of unvested restricted stock outstanding | shares | 904,181 | 1,131,918 | 904,181 | 1,131,918 | 414,545 | ||
Weighted average grant date fair value of stock grants per share | $ / shares | $ 6.15 | $ 6.15 | |||||
Unrecognized compensation cost related to unvested restricted stock | $ 6,500 | $ 6,500 | |||||
Period in which compensation cost expected to be recognized | 2 years 4 months 24 days | ||||||
Potential Performance Shares (PSU) | |||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||
Period in which compensation cost expected to be recognized | 2 years 6 months | ||||||
Number of performance stock units ("PSUs") outstanding | Unit | 942,795 | 942,795 | |||||
Weighted average grant date fair value of PSUs per unit | $ / EquityUnit | 9.60 | 9.60 | |||||
Number of units, granted | Unit | 618,672 | 618,672 | |||||
Grant date fair value per unit | $ / EquityUnit | 7.85 | 7.85 | |||||
Minimum final number of shares of common stock issuable based on performance multiplier | shares | 0 | ||||||
Maximum final number of shares of common stock issuable based on performance multiplier | shares | 1,885,590 | ||||||
Unrecognized expense, performance share units | $ 7,300 | ||||||
General and Administrative Expense | |||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||
Stock-based compensation expense recognized | $ 800 | $ 300 | $ 1,100 | $ 3,900 | $ 2,400 | ||
Basis Swap Contracts | |||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||
Volume | MMBTU | 53,030,000 | 53,030,000 | |||||
Fair value of derivative contract | $ 3,200 | $ 3,200 | |||||
Derivative contract term | 2022-12 | ||||||
Subsequent Event | Natural Gas Swap Contracts | |||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||
Volume | MMBTU_per_day | 80,000 | ||||||
Weighted average price | $ / MMBTU | 2.54 | ||||||
Natural gas hedge position term year | 2020 | ||||||
Natural gas hedge position extendable term year | 2021 | ||||||
Subsequent Event | Additional Natural Gas Swap Contracts | |||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||
Volume | MMBTU_per_day | 20,000 | ||||||
Weighted average price | $ / MMBTU | 2.50 | ||||||
Natural gas hedge position term year | 2020 |
Summary of Significant Accou_16
Summary of Significant Accounting Policies - Schedule of Derivative Instruments (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Assets, Fair Value | $ 62,277 | $ 15,401 |
Assets, Fair Value | 21,983 | |
Derivative Financial Instruments – current | ||
Derivative [Line Items] | ||
Assets, Fair Value | 62,277 | 15,401 |
Derivative Financial Instruments – current | Natural Gas Price Derivatives | ||
Derivative [Line Items] | ||
Assets, Fair Value | 60,002 | 6,096 |
Derivative Financial Instruments – current | Oil Price Derivatives | ||
Derivative [Line Items] | ||
Assets, Fair Value | 2,275 | $ 9,305 |
Derivative Financial Instruments – long-term | ||
Derivative [Line Items] | ||
Assets, Fair Value | 21,983 | |
Derivative Financial Instruments – long-term | Natural Gas Price Derivatives | ||
Derivative [Line Items] | ||
Assets, Fair Value | 21,118 | |
Derivative Financial Instruments – long-term | Oil Price Derivatives | ||
Derivative [Line Items] | ||
Assets, Fair Value | $ 865 |
Summary of Significant Accou_17
Summary of Significant Accounting Policies - Schedule of Gains and Losses from Derivative Financial Instruments (Detail) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended |
Aug. 13, 2018 | Sep. 30, 2018 | Sep. 30, 2019 | Aug. 13, 2018 | Sep. 30, 2019 | |
Derivative [Line Items] | |||||
Gain (loss) from derivative financial instruments | $ (83) | $ (2,015) | $ 24,858 | $ 881 | $ 31,945 |
Gain (Loss) from Derivative Financial Instruments | |||||
Derivative [Line Items] | |||||
Gain (loss) from derivative financial instruments | (83) | (2,015) | 24,858 | 881 | 31,945 |
Gain (Loss) from Derivative Financial Instruments | Swap Contracts | |||||
Derivative [Line Items] | |||||
Gain (loss) from derivative financial instruments | (6) | (166) | 19,398 | 1,267 | 29,856 |
Gain (Loss) from Derivative Financial Instruments | Collar Contracts | |||||
Derivative [Line Items] | |||||
Gain (loss) from derivative financial instruments | $ (77) | $ (1,849) | $ 5,460 | $ (386) | $ 2,089 |
Summary of Significant Accou_18
Summary of Significant Accounting Policies - Consolidated Income Tax Provision (Detail) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended |
Aug. 13, 2018 | Sep. 30, 2018 | Sep. 30, 2019 | Aug. 13, 2018 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Current - State | $ (22) | $ 57 | $ 72 | $ 13 | $ (22) |
Deferred - State | (309) | 20 | 591 | (1,360) | 1,246 |
Deferred - Federal | 936 | 3,863 | 3,184 | 2,412 | 13,959 |
Total | $ 605 | $ 3,940 | $ 3,847 | $ 1,065 | $ 15,183 |
Summary of Significant Accou_19
Summary of Significant Accounting Policies - Additional Information 3 (Detail) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended |
Aug. 13, 2018 | Sep. 30, 2018 | Sep. 30, 2019 | Aug. 13, 2018 | Sep. 30, 2019 | Dec. 31, 2017 | |
Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Federal statutory rate | 21.00% | 21.00% | 21.00% | 21.00% | 21.00% | 35.00% |
Operating losses carryforward indefinitely with no carryback as percentage of taxable income | 80.00% | |||||
Interest expense threshold percentage of adjusted taxable income beyond which interest expense is deductible | 30.00% | |||||
Refundable unused AMT credit carryforward, Percentage | 50.00% | |||||
Refundable unused alternative minimum tax credit carryforward years | 2018 through 2020 | |||||
Unused AMT credit carryforwards | $ 10,200,000 | $ 10,200,000 | ||||
Refund of unused AMT credit carryforwards | 10,200,000 | |||||
Net operating loss limitation | $ 3,300,000 | |||||
Period of increase in net operating loss limitation | 5 years | |||||
Section 382 limitation recognition period | 2018 to 2023 | |||||
Net operating loss expiration period | 20 years | |||||
Fair Value, Measurements, Recurring | Level 3 | ||||||
Operations And Summary Of Significant Accounting Policies [Line Items] | ||||||
Financial assets | 0 | $ 0 | ||||
Financial liabilities | $ 0 | $ 0 |
Summary of Significant Accou_20
Summary of Significant Accounting Policies - Difference Between Federal Statutory Rate and Effective Tax Rate (Detail) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended |
Aug. 13, 2018 | Sep. 30, 2018 | Sep. 30, 2019 | Aug. 13, 2018 | Sep. 30, 2019 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||||||
Tax at statutory rate | 21.00% | 21.00% | 21.00% | 21.00% | 21.00% | 35.00% |
Tax effect of: | ||||||
State income taxes, net of federal benefit | 4.50% | 2.00% | (1.80%) | 3.90% | ||
Valuation allowance on deferred tax assets | (21.10%) | (0.60%) | 4.50% | (24.10%) | 2.30% | |
Transaction costs | 8.60% | 1.90% | ||||
Nondeductible stock-based compensation | (0.70%) | (0.20%) | 1.20% | (0.70%) | 1.50% | |
Other | (7.40%) | 2.70% | (1.30%) | |||
Effective tax rate | (3.70%) | 22.20% | 36.20% | (1.20%) | 26.70% |
Summary of Significant Accou_21
Summary of Significant Accounting Policies - Summary of Carrying Amounts and Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Derivative Financial Instruments | $ 62,277 | $ 15,401 |
Bank Credit Facility | ||
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Long-term debt, Carrying Value | (1,265,000) | (450,000) |
Long-term debt, Fair Value | (1,265,000) | (450,000) |
Level 2 | 7.50% Senior Notes due 2025 | Long Term Debt | ||
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Long-term debt, Carrying Value | (450,703) | |
Long-term debt, Fair Value | (503,125) | |
Level 2 | 9.75% Senior Notes due 2026 | Long Term Debt | ||
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Long-term debt, Carrying Value | (819,277) | (817,066) |
Long-term debt, Fair Value | (709,750) | (720,375) |
Commodity Swaps, Options and Basis Swaps | Level 2 | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Derivative Financial Instruments | 84,260 | 15,401 |
Derivative financial asset, Fair value | $ 84,260 | $ 15,401 |
Summary of Significant Accou_22
Summary of Significant Accounting Policies - Summary of Carrying Amounts and Fair Values of Financial Instruments (Parenthetical) (Detail) - Long Term Debt | Sep. 30, 2019 |
7.50% Senior Notes due 2025 | |
Fair Value Option Quantitative Disclosures [Line Items] | |
Interest rate on debt instrument | 7.50% |
9.75% Senior Notes due 2026 | |
Fair Value Option Quantitative Disclosures [Line Items] | |
Interest rate on debt instrument | 9.75% |
Summary of Significant Accou_23
Summary of Significant Accounting Policies - Additional Information 4 (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jul. 16, 2019 | Aug. 13, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Performance multiplier, minimum | 0.00% | ||||
Performance multiplier, maximum | 200.00% | ||||
Participating securities that share in losses | 0 | 0 | |||
Earliest conversion date for convertible preferred stock | Jul. 16, 2020 | ||||
Preferred stock, conversion price per share | $ 4 | $ 4 | |||
Total common shares if Convertible preferred stock is converted | 96,250,000 | ||||
Interest paid in-kind | $ 25,004 | ||||
Debt assumed in merger | $ 446,625 | ||||
7½% Senior Notes due 2025 | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Interest rate on debt instrument | 7.50% | ||||
Covey Park Equity Owners | 7½% Senior Notes due 2025 | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Debt assumed in merger | $ 625,000 | ||||
Interest rate on debt instrument | 7.50% | ||||
Series A Convertible Preferred Stock | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Number of shares issued as non-cash consideration | 210,000 | ||||
Redemption value of shares | $ 210,000 | ||||
Fair Value of Shares Issued | $ 200,000 | ||||
Common Stock | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Number of shares issued as non-cash consideration | 28,800,000 | ||||
Convertible Notes | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Interest paid in-kind | $ 25,000 | ||||
Restricted Stock | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Shares of unvested restricted stock outstanding | 904,181 | 1,131,918 | 414,545 |
Summary of Significant Accou_24
Summary of Significant Accounting Policies - Basic and Diluted Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended |
Aug. 13, 2018 | Sep. 30, 2018 | Sep. 30, 2019 | Aug. 13, 2018 | Sep. 30, 2019 | |
Earnings Per Share [Line Items] | |||||
Net income (loss) attributable to common stock | $ (16,865) | $ 13,823 | $ (1,337) | $ (92,754) | $ 33,645 |
Income allocable to unvested restricted shares | (51) | (141) | |||
Basic income (loss) attributable to common stock | 13,772 | (1,337) | 33,504 | ||
Diluted income (loss) attributable to common stock | $ 13,772 | $ (1,337) | $ 33,504 | ||
Basic income (loss) attributable to common stock, Shares | 15,468 | 105,448 | 171,487 | 15,262 | 127,709 |
Dilutive effect of performance share units | 15 | ||||
Diluted income (loss) attributable to common stock, Shares | 15,468 | 105,463 | 171,487 | 15,262 | 127,709 |
Basic income (loss) attributable to common stock, Per Share | $ 0.13 | $ (0.01) | $ 0.26 | ||
Diluted income (loss) attributable to common stock, Per Share | $ 0.13 | $ (0.01) | $ 0.26 | ||
Predecessor | |||||
Earnings Per Share [Line Items] | |||||
Net income (loss) attributable to common stock | $ (16,865) | $ (92,754) | |||
Basic income (loss) attributable to common stock | (16,865) | (92,754) | |||
Diluted income (loss) attributable to common stock | $ (16,865) | $ (92,754) | |||
Basic income (loss) attributable to common stock, Shares | 15,468 | 15,262 | |||
Diluted income (loss) attributable to common stock, Shares | 15,468 | 15,262 | |||
Basic income (loss) attributable to common stock, Per Share | $ (1.09) | $ (6.08) | |||
Diluted income (loss) attributable to common stock, Per Share | $ (1.09) | $ (6.08) |
Summary of Significant Accou_25
Summary of Significant Accounting Policies - Weighted Average Shares of Unvested Restricted Stock (Detail) - shares shares in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended |
Aug. 13, 2018 | Sep. 30, 2018 | Sep. 30, 2019 | Aug. 13, 2018 | Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||||
Unvested restricted stock | 813 | 396 | 758 | 839 | 539 |
Summary of Significant Accou_26
Summary of Significant Accounting Policies - Common Stock and Convertible Stock Dilutive in Computation of Earning Per Share (Detail) shares in Thousands, EquityUnit in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended |
Aug. 13, 2018EquityUnit$ / sharesshares | Sep. 30, 2018EquityUnit$ / sharesshares | Sep. 30, 2019EquityUnit$ / shares | Aug. 13, 2018EquityUnit$ / sharesshares | Sep. 30, 2019EquityUnit$ / shares | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||
Weighted average PSUs | EquityUnit | 315 | 862 | 513 | ||
Weighted average grant date fair value per unit | 12.93 | 9.60 | 9.60 | ||
Weighted average warrants for common stock | shares | 15 | ||||
Predecessor | |||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||
Weighted average PSUs | EquityUnit | 514 | 476 | |||
Weighted average grant date fair value per unit | 13.83 | 13.83 | |||
Weighted average warrants for common stock | shares | 42 | 142 | |||
Weighted average contingently convertible shares | shares | 40,631 | 39,819 | |||
Warrants for Common Stock | |||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||
Weighted average exercise price per share | $ 0.01 | ||||
Warrants for Common Stock | Predecessor | |||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||
Weighted average exercise price per share | $ 0.01 | $ 0.01 | |||
Contingently Convertible Shares | Predecessor | |||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||
Weighted average exercise price per share | $ 12.32 | $ 12.32 |
Summary of Significant Accou_27
Summary of Significant Accounting Policies - Supplementary Information of Consolidated Statements of Cash Flows (Detail) - USD ($) $ in Thousands | 2 Months Ended | 7 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Aug. 13, 2018 | Sep. 30, 2019 | |
Cash payments for: | |||
Interest | $ 1,999 | $ 110,820 | |
Income taxes | 2 | ||
Non-cash investing activities include: | |||
Increase in accrued capital expenditures | $ 16,192 | 46,918 | |
Non-cash investing activities related to the Covey Park Acquisition include: | |||
Debt assumed in merger | 446,625 | ||
Acquired working capital | 41,624 | ||
Common Stock | |||
Non-cash investing activities related to the Covey Park Acquisition include: | |||
Issuance of stock | 167,808 | ||
Predecessor | |||
Cash payments for: | |||
Interest | $ 36,187 | ||
Income taxes | 2 | ||
Non-cash investing activities include: | |||
Increase in accrued capital expenditures | $ 12,937 | ||
Series A 10% Convertible Preferred Stock | |||
Non-cash investing activities related to the Covey Park Acquisition include: | |||
Issuance of stock | $ 200,000 |
Long-Term Debt - Long-term Debt
Long-Term Debt - Long-term Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Aug. 03, 2018 |
Debt Instrument [Line Items] | |||
Debt issuance costs, net of amortization | $ (26,906) | ||
Long-term Debt | 2,508,074 | $ 1,244,363 | |
Bank Credit Facility | |||
Debt Instrument [Line Items] | |||
Principal | 1,265,000 | ||
7½% Senior Notes due 2025 | |||
Debt Instrument [Line Items] | |||
Principal | 625,000 | ||
Discount, net of amortization | (174,297) | ||
9¾% Senior Notes due 2026 | |||
Debt Instrument [Line Items] | |||
Principal | 850,000 | $ 850,000 | |
Discount, net of amortization | $ (30,723) |
Long-Term Debt - Long-term De_2
Long-Term Debt - Long-term Debt (Parenthetical) (Detail) | Sep. 30, 2019 | Aug. 03, 2018 |
7½% Senior Notes due 2025 | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument | 7.50% | |
9¾% Senior Notes due 2026 | ||
Debt Instrument [Line Items] | ||
Interest rate on debt instrument | 9.75% | 9.75% |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Detail) - USD ($) $ in Thousands | Jul. 16, 2019 | Aug. 03, 2018 | Jun. 30, 2019 | Sep. 30, 2019 |
9¾% Senior Notes due 2026 | ||||
Debt Instrument [Line Items] | ||||
Interest payment terms | payable on February 15 and August 15 at an annual rate of 9¾% | |||
Maturity of senior notes | Aug. 15, 2026 | |||
Principal amount of notes issued | $ 850,000 | $ 850,000 | ||
Proceeds of issued senior notes | $ 815,900 | |||
Interest rate on debt instrument | 9.75% | 9.75% | ||
7½% Senior Notes due 2025 | ||||
Debt Instrument [Line Items] | ||||
Principal amount of notes issued | $ 625,000 | |||
Interest rate on debt instrument | 7.50% | |||
7½% Senior Notes due 2025 | Covey Park Equity Owners | ||||
Debt Instrument [Line Items] | ||||
Interest payment terms | payable on May 15 and November 15 at an annual rate of 7½% | |||
Maturity of senior notes | May 15, 2025 | |||
Interest rate on debt instrument | 7.50% | |||
Debt assumed in merger | $ 625,000 | |||
Fair value of notes | $ 446,600 |
Long-Term Debt - Additional I_2
Long-Term Debt - Additional Information 1 (Detail) - Bank Credit Facility - USD ($) $ in Millions | Jul. 16, 2019 | Aug. 14, 2018 | Dec. 31, 2019 | Sep. 30, 2019 |
Debt Instrument [Line Items] | ||||
Maturity of credit facility | Jul. 16, 2024 | |||
Bank credit facility | $ 1,575 | |||
Committed borrowing base | $ 1,500 | |||
Borrowings outstanding | $ 1,265 | |||
Scenario Forecast | ||||
Debt Instrument [Line Items] | ||||
Leverage ratio | 400.00% | |||
Current ratio | 100.00% | |||
Minimum | ||||
Debt Instrument [Line Items] | ||||
Commitment fee on unused borrowing base | 0.375% | |||
Maximum | ||||
Debt Instrument [Line Items] | ||||
Commitment fee on unused borrowing base | 0.50% | |||
LIBOR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Spread rate for interest rate on credit facility | 1.75% | |||
LIBOR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Spread rate for interest rate on credit facility | 2.75% | |||
Base Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Spread rate for interest rate on credit facility | 0.75% | |||
Base Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Spread rate for interest rate on credit facility | 1.75% |
Preferred Stock - Additional In
Preferred Stock - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jul. 16, 2019 | Sep. 30, 2019 |
Temporary Equity [Line Items] | ||
Issuance of Series B Convertible Preferred Stock | $ 175,000 | |
Preferred stock, conversion price per share | $ 4 | $ 4 |
Series A 10% Convertible Preferred Stock | ||
Temporary Equity [Line Items] | ||
Convertible preferred stock issued/ sold | 210,000 | |
Face value of convertible preferred stock issued | $ 210,000 | |
Fair value of convertible preferred stock issued | $ 200,000 | |
Preferred stock, quarterly dividends rate | 10.00% | |
Series B 10% Convertible Preferred Stock | ||
Temporary Equity [Line Items] | ||
Convertible preferred stock issued/ sold | 175,000 | |
Issuance of Series B Convertible Preferred Stock | $ 175,000 | |
Preferred stock, quarterly dividends rate | 10.00% | 10.00% |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - $ / shares | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2019 | Jul. 16, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||||
Authorized capital stock | 405,000,000 | |||
Common stock, shares authorized | 400,000,000 | 400,000,000 | 155,000,000 | |
Common stock, par value | $ 0.50 | $ 0.50 | $ 0.50 | |
Preferred stock, authorized capital stock | 5,000,000 | 5,000,000 | ||
Preferred stock, par value | $ 10 | |||
Common stock warrants exercised, Shares | 246,793 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Feb. 28, 2019USD ($)aWell | Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Related Party Transactions | |||
Payment received from affiliates | $ 12,100 | $ 13,700 | |
Wells to be drilled for affiliate | Well | 6 | ||
Accounts receivable from affiliates | $ 13,635 | $ 13,635 | |
Arkoma Drilling II, L.P | Caddo Parish, Louisiana | |||
Related Party Transactions | |||
Sale of leases covering undeveloped net acres | a | 1,464 | ||
Payments for acreage acquisition | $ 5,900 | ||
Proceeds from sale of oil and gas leases to affiliates | $ 5,900 |