Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 07, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
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 | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 190,354,945 | |
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 | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and Cash Equivalents | $ 15,527 | $ 18,532 |
Accounts Receivable: | ||
Oil and gas sales | 83,594 | 120,111 |
Joint interest operations | 16,706 | 24,761 |
From affiliates | 25,744 | 35,469 |
Derivative Financial Instruments | 101,821 | 75,304 |
Income Taxes Receivable | 10,218 | 5,109 |
Other Current Assets | 14,227 | 10,399 |
Total current assets | 267,837 | 289,685 |
Oil and natural gas properties, successful efforts method: | ||
Proved | 4,234,229 | 4,077,513 |
Unproved | 384,654 | 410,897 |
Other | 6,821 | 6,866 |
Accumulated depreciation, depletion and amortization | (596,591) | (486,473) |
Net property and equipment | 4,029,113 | 4,008,803 |
Goodwill | 335,897 | 335,897 |
Income Taxes Receivable | 5,109 | |
Derivative Financial Instruments | 6,835 | 13,888 |
Operating Lease Right-of-Use Assets | 3,828 | 3,509 |
Other Assets | 231 | 231 |
Total Assets | 4,643,741 | 4,657,122 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accounts Payable | 215,338 | 252,994 |
Accrued Expenses | 107,081 | 137,166 |
Operating Leases | 2,157 | 1,994 |
Derivative Financial Instruments | 3,043 | 222 |
Total current liabilities | 327,619 | 392,376 |
Long-term Debt | 2,507,284 | 2,500,132 |
Deferred Income Taxes | 223,104 | 211,772 |
Derivative Financial Instruments | 4,380 | 4,220 |
Long-term Operating Leases | 1,671 | 1,515 |
Reserve for Future Abandonment Costs | 18,613 | 18,151 |
Other Non-current Liabilities | 4,594 | 6,351 |
Total liabilities | 3,087,265 | 3,134,517 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Common stock—$0.50 par, 400,000,000 shares authorized, 189,980,509 and 190,006,776 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 94,990 | 95,003 |
Additional paid-in capital | 910,851 | 909,423 |
Accumulated earnings | 168,552 | 138,596 |
Total stockholders' equity | 1,174,393 | 1,143,022 |
Total liabilities and stockholders' equity | 4,643,741 | 4,657,122 |
Series A 10% Convertible Preferred Stock | ||
Mezzanine Equity: | ||
Preferred Stock | 207,083 | 204,583 |
Series B 10% Convertible Preferred Stock | ||
Mezzanine Equity: | ||
Preferred Stock | $ 175,000 | $ 175,000 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 385,000 | 385,000 |
Preferred stock, shares outstanding | 385,000 | 385,000 |
Common stock, par value | $ 0.50 | $ 0.50 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 189,980,509 | 190,006,776 |
Common stock, shares outstanding | 189,980,509 | 190,006,776 |
Series A 10% Convertible Preferred Stock | ||
Preferred stock, shares issued | 210,000 | 210,000 |
Preferred stock, shares outstanding | 210,000 | 210,000 |
Preferred stock, dividend rate | 10.00% | 10.00% |
Series B 10% Convertible Preferred Stock | ||
Preferred stock, shares issued | 175,000 | 175,000 |
Preferred stock, shares outstanding | 175,000 | 175,000 |
Preferred stock, dividend rate | 10.00% | 10.00% |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Total oil and gas sales | $ 225,878 | $ 126,881 |
Operating expenses: | ||
Production taxes | 5,567 | 5,939 |
Gathering and transportation | 28,411 | 7,430 |
Lease operating | 28,712 | 14,885 |
Depreciation, depletion and amortization | 110,425 | 37,590 |
General and administrative | 8,719 | 7,814 |
Exploration | 27 | |
Gain on sale of oil and gas properties | (1) | |
Total operating expenses | 181,861 | 73,657 |
Operating income | 44,017 | 53,224 |
Other income (expenses): | ||
Gain (loss) from derivative financial instruments | 61,899 | (7,657) |
Other income | 313 | 93 |
Interest expense | (52,810) | (27,851) |
Total other income (expenses) | 9,402 | (35,415) |
Income before income taxes | 53,419 | 17,809 |
Provision for income taxes | (11,391) | (4,234) |
Net income | 42,028 | 13,575 |
Preferred stock dividends and accretion | (12,072) | |
Net income available to common stockholders | $ 29,956 | $ 13,575 |
Net income per share: | ||
Basic | $ 0.16 | $ 0.13 |
Diluted | $ 0.15 | $ 0.13 |
Weighted average shares outstanding: | ||
Basic | 188,916 | 105,457 |
Diluted | 285,166 | 105,457 |
Natural Gas Sales | ||
Revenues: | ||
Total oil and gas sales | $ 207,239 | $ 90,132 |
Oil Sales | ||
Revenues: | ||
Total oil and gas sales | $ 18,639 | $ 36,749 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Earnings |
Beginning Balance at Dec. 31, 2018 | $ 569,571 | $ 52,936 | $ 452,513 | $ 64,122 |
Beginning Balance, Shares at Dec. 31, 2018 | 105,871 | |||
Stock-based compensation | 648 | $ (2) | 650 | |
Stock-based compensation, Shares | (3) | |||
Net income | 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 | |||
Beginning Balance at Dec. 31, 2019 | 1,143,022 | $ 95,003 | 909,423 | 138,596 |
Beginning Balance, Shares at Dec. 31, 2019 | 190,007 | |||
Stock-based compensation | 1,430 | $ (12) | 1,442 | |
Stock-based compensation, Shares | (24) | |||
Income tax withholdings related to equity awards | (15) | $ (1) | (14) | |
Income tax withholdings related to equity awards, Shares | (2) | |||
Net income | 42,028 | 42,028 | ||
Preferred dividend accretion | (2,500) | (2,500) | ||
Payment of preferred dividends | (9,572) | (9,572) | ||
Ending Balance at Mar. 31, 2020 | $ 1,174,393 | $ 94,990 | $ 910,851 | $ 168,552 |
Ending Balance, Shares at Mar. 31, 2020 | 189,981 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 42,028 | $ 13,575 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Deferred and non-current income taxes | 11,330 | 4,352 |
Exploration | 27 | |
Gain on sale of oil and gas properties | (1) | |
Depreciation, depletion and amortization | 110,425 | 37,590 |
Loss (gain) on derivative financial instruments | (61,899) | 7,657 |
Cash settlements of derivative financial instruments | 45,416 | 5,388 |
Amortization of debt discount, premium and issuance costs | 7,199 | 1,574 |
Stock-based compensation | 1,430 | 648 |
Decrease in accounts receivable | 54,297 | 10,783 |
Decrease (increase) in other current assets | (3,828) | 1,577 |
Decrease in accounts payable and accrued expenses | (56,306) | (8,428) |
Net cash provided by operating activities | 150,119 | 74,715 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (143,490) | (94,939) |
Advance payments for drilling costs | 6,030 | |
Proceeds from sales of oil and gas properties | 415 | |
Net cash used for investing activities | (143,490) | (88,494) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings | 57,000 | 45,000 |
Payments to retire debt | (57,000) | (25,000) |
Preferred stock dividends paid | (9,572) | |
Debt and equity issuance costs | (47) | (90) |
Income tax withholdings related to equity awards | (15) | |
Net cash provided by (used for) financing activities | (9,634) | 19,910 |
Net increase (decrease) in cash and cash equivalents | (3,005) | 6,131 |
Cash and cash equivalents, beginning of the year | 18,532 | 23,193 |
Cash and cash equivalents, end of the year | $ 15,527 | $ 29,324 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
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"). In management's opinion, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of Comstock as of March 31, 2020, and the related results of operations and cash flows for the periods being presented. Net income and comprehensive income are the same in all periods presented. All adjustments are of a normal recurring nature unless otherwise disclosed. 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, 2019. The results of operations for the period through March 31, 2020 are not necessarily an indication of the results expected for the full year. 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 North Louisiana and East Texas. 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 bank credit facility and cash on hand. In connection with the Covey Park Acquisition, Comstock incurred $41.0 million of advisory and legal fees and other acquisition-related costs during the year ended December 31, 2019. These acquisition costs were included in transaction costs in the Company's consolidated statements of operations. The operations of Covey Park are included in the financial results for the three months ended March 31, 2020. The following pro forma condensed combined financial information for the three months ended March 31, 2019 gives effect to the Covey Park Acquisition as if the acquisition had occurred on January 1, 2019. 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 on depletion and 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 Three Months Ended March 31, 2019 (In thousands, except per share amount) Revenues: $ 315,303 Net Income $ 62,077 Net income per share: Basic $ 0.28 Diluted $ 0.22 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. 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. Exploratory drilling costs are initially capitalized as unproved property but charged to expense if and when the well is determined not to have found commercial quantities of proved oil and gas reserves. Exploratory drilling costs are evaluated within a one-year period after the completion of drilling. 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 $335.9 million as of March 31, 2020 that was recorded in 2018. Goodwill represents the excess of value of the Company over fair value of net tangible and identifiable intangible assets at the time of the change in control, which occurred on August 14, 2018. The Company is not required to amortize goodwill as a charge to earnings; however, the Company is required to conduct an annual review of goodwill for impairment. The Company performs annual assessment of goodwill on October 1 st Leases The Company has right-of-use lease assets of $3.8 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 $2.1 million and $1.7 million, respectively. The value of the lease assets and liabilities are determined based upon discounted future minimum cash flows contained within each of the respective contracts. 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. 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. 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. Accordingly, the Company has elected not to 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 ended March 31, 2020 were as follows: Three Months Ended March 31, 2020 (In thousands) Operating lease cost included in general and administrative expense $ 411 Operating lease cost included in lease operating expense 137 Short-term lease cost (drilling rig costs included in proved oil and gas properties) 12,309 $ 12,857 Cash payments for operating leases associated with right-of-use assets included in cash provided by operating activities were $0.5 million for the three months ended March 31, 2020. As of March 31, 2020, Comstock had the following liabilities under contracts that contain operating leases: (In thousands) April 1 to December 31, 2020 $ 2,293 2021 1,518 2022 196 Total lease payments 4,007 Imputed interest (179 ) Total lease liability $ 3,828 The weighted average term of these operating leases was 1.8 years and the weighted average rate used in lease computations was 4.8%. As of March 31, 2020, the Company also had expected future payments for contracted drilling services of $4.4 million. Accrued Expenses Accrued expenses at March 31, 2020 and December 31, 2019 consisted of the following: As of March 31, 2020 As of December 31, 2019 (In thousands) Accrued interest payable $ 29,906 $ 39,501 Accrued drilling costs 29,003 42,193 Accrued transportation costs 26,359 26,907 Accrued transaction costs 6,690 10,830 Accrued employee compensation 4,562 8,653 Accrued lease operating expenses 6,200 4,990 Other 4,361 4,092 $ 107,081 $ 137,166 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: Three Months Ended March 31, 2020 2019 (In thousands) Reserve for future abandonment costs at beginning of period $ 18,151 $ 5,136 New wells placed on production 186 40 Liabilities settled and assets disposed of (11 ) (29 ) Accretion expense 287 96 Reserve for future abandonment costs at end of period $ 18,613 $ 5,243 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 March 31, 2020: Future Production Period Nine Months Ending December 31, 2020 Year Ending December 31, 2021 Total Natural Gas Swap Contracts: Volume (MMBtu) 78,222,890 62,883,140 141,106,030 Average Price per MMBtu $2.73 $2.57 $2.66 Natural Gas 2-Way Collar Contracts: Volume (MMBtu) 7,200,000 — 7,200,000 Price per MMBtu: Average Ceiling $2.92 — $2.92 Average Floor $2.41 — $2.41 Natural Gas 3-Way Collar Contracts: Volume (MMBtu) 13,750,000 — 13,750,000 Price per MMBtu: Average Ceiling $2.99 — $2.99 Average Floor $2.63 — $2.63 Average Put $2.32 — $2.32 Natural Gas Swaptions Contracts: Volume (MMBtu) 57,750,000 (a) 23,650,000 (b) 81,400,000 Average Price per MMBtu $2.52 $2.52 $2.52 Crude Oil Collar Contracts: Volume (Barrels) 820,600 — 820,600 Price per Barrel: Average Ceiling $64.13 — $64.13 Average Floor $49.51 — $49.51 (a) The counterparty has the right to extend hedged volumes of 71,250,000 MMBtu of swaptions placed in 2020 into 2021 (b) The counterparty has the right to extend hedged volumes of 49,200,000 MMBtu of swaptions placed in 2020 and 2021 into 2022 at an average price $2.51 per MMBtu. In addition to the swaps, collars and swaptions above, at March 31, 2020, 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 42,050,000 MMBtu. The fair value of these contracts was a net asset of $1.9 million at March 31, 2020. 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 March 31, 2020 December 31, 2019 (in thousands) Fair Value of Derivative Instruments Asset Derivatives: Natural gas price derivatives Derivative Financial Instruments – current $ 85,349 $ 75,123 Oil price derivatives Derivative Financial Instruments – current 16,472 181 $ 101,821 $ 75,304 Natural gas price derivatives Derivative Financial Instruments – long-term $ 6,835 $ 13,888 Liability Derivatives: Natural gas price derivatives Derivative Financial Instruments – current $ 3,043 $ 222 Natural gas price derivatives Derivative Financial Instruments – long-term $ 4,380 $ 4,220 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 Gain/(Loss) Recognized in Three Months Ended March 31, Earnings on Derivatives 2020 2019 (In thousands) Swaps $ 22,147 $ 3,157 Collars 24,087 (10,814 ) Swaptions 15,665 — $ 61,899 $ (7,657 ) Subsequent to March 31, 2020, the Company entered into additional natural gas swap contracts for 2,300,000 MMBtu for the fourth quarter of 2020 with a weighted average price of $2.60 per MMBtu, 56,100,000 MMBtu for 2021 with a weighted average price of $2.54 per MMBtu and 10,950,000 MMBtu in 2022 with a weighted average price of $2.53 per MMBtu. The Company also entered into natural gas collars covering 4,600,000 MMBtu for the fourth quarter of 2020 with an average ceiling price of $3.01 per MMBtu and an average floor price of $2.50 per MMBtu and 54,750,000 MMBtu in 2021 with an average ceiling price of $2.94 per MMBtu and an average floor price of $2.43 per MMBtu. Comstock entered into interest rate swap agreements to fix LIBOR at 0.33% for $500.0 million of amounts outstanding under the bank credit facility from April 2020 through April 2023. 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 general and administrative expenses for awards of restricted stock and performance stock units ("PSUs") to the Company's employees and directors. The Company recognized $1.4 million and $0.6 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 three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, Comstock had 1,060,248 shares of unvested restricted stock outstanding at a weighted average grant date fair value of $6.10 per share. Total unrecognized compensation cost related to unvested restricted stock grants of $4.6 million as of March 31, 2020 is expected to be recognized over a period of 2.0 years. As of March 31, 2020, Comstock had 904,400 PSUs outstanding at a weighted average grant date fair value of $9.58 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 1,808,800 shares of common stock. Total unrecognized compensation cost related to these grants of $5.6 million as of March 31, 2020 is expected to be recognized over a period of 2.1 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, 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 March 31, 2020. 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 $83.6 million as of March 31, 2020 from customers for contracts where performance obligations have been satisfied and an unconditional right to consideration exists. Credit Losses On January 1, 2020, the Company adopted Financial Accounting Standards Board Accounting Standards Codification 326, Credit Losses In adopting ASC 326, the Company determined The Company performs quarterly impairment analysis using the 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: Three Months Ended March 31, 2020 2019 (In thousands) Current - Federal $ — $ — Current - State 61 (118 ) Deferred - Federal 11,503 3,942 Deferred - State (173 ) 410 $ 11,391 $ 4,234 The difference between the federal statutory rate of 21% and the effective tax rate is due to the following: Three Months Ended March 31, 2020 2019 Tax at statutory rate 21.0% 21.0% Tax effect of: Valuation allowance on deferred tax assets (0.5 ) 1.5 State income taxes, net of federal benefit 0.3 0.7 Nondeductible stock-based compensation 0.5 0.6 Effective tax rate 21.3 % 23.8 % 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 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. The Company’s swaption agreements are measured at fair value using a third-party pricing service, categorized as a Level 3 measurement. The Company had no derivative instruments classified as Level 3 as of March 31, 2019. The following is a reconciliation of the beginning and ending balances for derivative instruments classified as Level 3 in the fair value hierarchy: Three Months Ended March 31, 2020 (In thousands) Balance at beginning of year $ 4,351 Total gain included in earnings 15,665 Settlements, net (7,328 ) Balance at end of period $ 12,688 Fair Values – Reported The following presents the carrying amounts and the fair values of the Company’s financial instruments as of March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Assets: (In thousands) Commodity-based derivatives (a)(b) $ 108,656 $ 108,656 $ 89,192 $ 89,192 Liabilities: Commodity-based derivatives (a)(b) 7,423 7,423 4,442 4,442 Bank credit facility (c) 1,250,000 1,250,000 1,250,000 1,250,000 7.5% senior notes due 2025 (d) 461,023 362,500 455,768 534,375 9.75% senior notes due 2026 (d) 820,854 569,500 820,057 765,000 _____________ (a) The Company ' (b) As of March 31, 2020, a portion of our natural gas derivatives contain swaptions where the counterparty has the right, but not the obligation, to extend terms of an existing swap on predetermined dates. Due to subjectivity of the inputs used to value the counterparty rights in swaptions, these rights are classified as Level 3 in the fair value hierarchy. (c) The carrying value of our floating rate debt outstanding approximates fair value because of its floating rate structure. (d) The fair value of the Company ' 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. The Series A and Series B Convertible Preferred Stock issued in connection with the Covey Park Acquisition will become convertible into in the aggregate 96,250,000 shares of common stock beginning on July 16, 2020 at a conversion price of $4.00 per share. The dilutive effect of preferred stock is computed using the if-converted method as if conversion of the preferred shares had occurred at the earlier of the date of issuance or the beginning of the period. For the three months ended March 31, 2020, the preferred stock was dilutive. Basic and diluted income per share were determined as follows: Three Months Ended March 31, 2020 2019 Income Shares Per Share Income Shares Per Share (In thousands, except per share amounts) Net income attributable to common stock $ 29,956 $ 13,575 Income allocable to unvested restricted shares (37 ) (53 ) Basic income attributable to common stock 29,919 188,916 $ 0.16 13,522 105,457 $ 0.13 Effect of Dilutive Securities: Preferred stock $ 12,072 96,250 — — Diluted income attributable to common stock $ 41,991 285,166 $ 0.15 $ 13,522 105,457 $ 0.13 At March 31, 2020 and December 31, 2019, 1,060,248 and 1,092,309 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: Three Months Ended March 31, 2020 2019 (in thousands) Unvested restricted stock 1,085 414 Weighted average unearned PSUs outstanding were as follows: Three Months Ended March 31, 2020 2019 (In thousands, except per share/unit amounts) Weighted average PSUs 927 335 Weighted average grant date fair value per unit $ 9.58 $ 12.93 The PSUs were anti-dilutive in the three months ended March 31, 2020 and 2019. Supplementary Information With Respect to the Consolidated Statements of Cash Flows Cash payments made for interest, income taxes and the change in non-cash investing activities related to accrued capital expenditures for the three months ended March 31, 2020 and 2019, respectively, were as follows: Three Months Ended March 31, 2020 2019 (In thousands) Cash payments for: Interest payments $ 55,207 $ 50,329 Income tax payments — — Non-cash investing activities include: Decrease in accrued capital expenditures $ 13,190 $ 2,463 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. We did not early adopt ASU 2017-04 and will implement ASU 2017-04 when we perform our annual impairment assessments following adoption of this standard in 2020. We do not expect the adoption to have a significant effect on our results of operations, liquidity or financial position. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | (2) LONG-TERM DEBT – At March 31, 2020, long-term debt was comprised of the following: (In thousands) 7½% Senior Notes due 2025: Principal 625,000 Discount, net of amortization (163,977 ) 9¾% Senior Notes due 2026: Principal 850,000 Discount, net of amortization (29,146 ) Bank Credit Facility: Principal 1,250,000 Debt issuance costs, net of amortization (24,593 ) $ 2,507,284 As of March 31, 2020, the Company has a revolving bank credit facility with $1.5 billion committed borrowing base which is re-determined on a semi-annual basis and upon the occurrence of certain other events which matures on July 16, 2024. The borrowing base was re-determined in May 2020 at $1.4 billion. Borrowings under the bank credit facility are secured by substantially all of the assets of the Company and its subsidiaries. Beginning in May, amounts outstanding bear interest at the Company's option, at either LIBOR plus 2.25% to 3.25% or a base rate plus 1.25% to 2.25%, 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 portion of the 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 Company was in compliance with the covenants as of March 31, 2020. |
Preferred Stock
Preferred Stock | 3 Months Ended |
Mar. 31, 2020 | |
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, or an aggregate of 96,250,000 shares of the Company’s 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. The difference in the fair value of the Series A Convertible Preferred Stock and the redemption value is being accreted to the redemption value of $210.0 million over a one year period to reflect the value of the preferred stock on July 16, 2020, when the preferred shares become convertible. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (4) Commitments and Contingencies – The Company has entered into natural gas transportation contracts which expire beginning February 2021 and extend through October 2031. Commitments under these contracts are $10.9 million for the remainder of 2020, $15.1 million for 2021, $24.8 million per year for 2022 through 2023, $24.9 million for 2024 and $169.6 million for the remaining term of the contracts. The Company has drilling rig contracts and completion service contracts. Terms of drilling contracts vary from well to well, or are for periods of less than one year. The service contracts are generally cancellable with 30 to 60 days ' From time to time, the Company 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 these matters will have a material effect on the Company's financial position, results of operations or cash flows and no material amounts are accrued relative to these matters at March 31, 2020 or 2019. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 5) RELATED PARTY TRANSACTIONS – Comstock operates wells for partnerships owned by the Company's 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 $46.7 million and $0.7 million from the partnerships related to these wells for the three months ended March 31, 2020 and March 31, 2019, respectively. Comstock had a $25.7 million receivable from the partnerships at March 31, 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
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"). In management's opinion, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of Comstock as of March 31, 2020, and the related results of operations and cash flows for the periods being presented. Net income and comprehensive income are the same in all periods presented. All adjustments are of a normal recurring nature unless otherwise disclosed. 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, 2019. The results of operations for the period through March 31, 2020 are not necessarily an indication of the results expected for the full year. 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 North Louisiana and East Texas. 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 bank credit facility and cash on hand. In connection with the Covey Park Acquisition, Comstock incurred $41.0 million of advisory and legal fees and other acquisition-related costs during the year ended December 31, 2019. These acquisition costs were included in transaction costs in the Company's consolidated statements of operations. The operations of Covey Park are included in the financial results for the three months ended March 31, 2020. The following pro forma condensed combined financial information for the three months ended March 31, 2019 gives effect to the Covey Park Acquisition as if the acquisition had occurred on January 1, 2019. 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 on depletion and 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 Three Months Ended March 31, 2019 (In thousands, except per share amount) Revenues: $ 315,303 Net Income $ 62,077 Net income per share: Basic $ 0.28 Diluted $ 0.22 |
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. 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. Exploratory drilling costs are initially capitalized as unproved property but charged to expense if and when the well is determined not to have found commercial quantities of proved oil and gas reserves. Exploratory drilling costs are evaluated within a one-year period after the completion of drilling. 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 $335.9 million as of March 31, 2020 that was recorded in 2018. Goodwill represents the excess of value of the Company over fair value of net tangible and identifiable intangible assets at the time of the change in control, which occurred on August 14, 2018. The Company is not required to amortize goodwill as a charge to earnings; however, the Company is required to conduct an annual review of goodwill for impairment. The Company performs annual assessment of goodwill on October 1 st |
Leases | Leases The Company has right-of-use lease assets of $3.8 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 $2.1 million and $1.7 million, respectively. The value of the lease assets and liabilities are determined based upon discounted future minimum cash flows contained within each of the respective contracts. 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. 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. 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. Accordingly, the Company has elected not to 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 ended March 31, 2020 were as follows: Three Months Ended March 31, 2020 (In thousands) Operating lease cost included in general and administrative expense $ 411 Operating lease cost included in lease operating expense 137 Short-term lease cost (drilling rig costs included in proved oil and gas properties) 12,309 $ 12,857 Cash payments for operating leases associated with right-of-use assets included in cash provided by operating activities were $0.5 million for the three months ended March 31, 2020. As of March 31, 2020, Comstock had the following liabilities under contracts that contain operating leases: (In thousands) April 1 to December 31, 2020 $ 2,293 2021 1,518 2022 196 Total lease payments 4,007 Imputed interest (179 ) Total lease liability $ 3,828 The weighted average term of these operating leases was 1.8 years and the weighted average rate used in lease computations was 4.8%. As of March 31, 2020, the Company also had expected future payments for contracted drilling services of $4.4 million. |
Accrued Expenses | Accrued Expenses Accrued expenses at March 31, 2020 and December 31, 2019 consisted of the following: As of March 31, 2020 As of December 31, 2019 (In thousands) Accrued interest payable $ 29,906 $ 39,501 Accrued drilling costs 29,003 42,193 Accrued transportation costs 26,359 26,907 Accrued transaction costs 6,690 10,830 Accrued employee compensation 4,562 8,653 Accrued lease operating expenses 6,200 4,990 Other 4,361 4,092 $ 107,081 $ 137,166 |
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: Three Months Ended March 31, 2020 2019 (In thousands) Reserve for future abandonment costs at beginning of period $ 18,151 $ 5,136 New wells placed on production 186 40 Liabilities settled and assets disposed of (11 ) (29 ) Accretion expense 287 96 Reserve for future abandonment costs at end of period $ 18,613 $ 5,243 |
Derivative Financial Instruments and Hedging Activities | 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 March 31, 2020: Future Production Period Nine Months Ending December 31, 2020 Year Ending December 31, 2021 Total Natural Gas Swap Contracts: Volume (MMBtu) 78,222,890 62,883,140 141,106,030 Average Price per MMBtu $2.73 $2.57 $2.66 Natural Gas 2-Way Collar Contracts: Volume (MMBtu) 7,200,000 — 7,200,000 Price per MMBtu: Average Ceiling $2.92 — $2.92 Average Floor $2.41 — $2.41 Natural Gas 3-Way Collar Contracts: Volume (MMBtu) 13,750,000 — 13,750,000 Price per MMBtu: Average Ceiling $2.99 — $2.99 Average Floor $2.63 — $2.63 Average Put $2.32 — $2.32 Natural Gas Swaptions Contracts: Volume (MMBtu) 57,750,000 (a) 23,650,000 (b) 81,400,000 Average Price per MMBtu $2.52 $2.52 $2.52 Crude Oil Collar Contracts: Volume (Barrels) 820,600 — 820,600 Price per Barrel: Average Ceiling $64.13 — $64.13 Average Floor $49.51 — $49.51 (a) The counterparty has the right to extend hedged volumes of 71,250,000 MMBtu of swaptions placed in 2020 into 2021 (b) The counterparty has the right to extend hedged volumes of 49,200,000 MMBtu of swaptions placed in 2020 and 2021 into 2022 at an average price $2.51 per MMBtu. In addition to the swaps, collars and swaptions above, at March 31, 2020, 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 42,050,000 MMBtu. The fair value of these contracts was a net asset of $1.9 million at March 31, 2020. 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 March 31, 2020 December 31, 2019 (in thousands) Fair Value of Derivative Instruments Asset Derivatives: Natural gas price derivatives Derivative Financial Instruments – current $ 85,349 $ 75,123 Oil price derivatives Derivative Financial Instruments – current 16,472 181 $ 101,821 $ 75,304 Natural gas price derivatives Derivative Financial Instruments – long-term $ 6,835 $ 13,888 Liability Derivatives: Natural gas price derivatives Derivative Financial Instruments – current $ 3,043 $ 222 Natural gas price derivatives Derivative Financial Instruments – long-term $ 4,380 $ 4,220 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 Gain/(Loss) Recognized in Three Months Ended March 31, Earnings on Derivatives 2020 2019 (In thousands) Swaps $ 22,147 $ 3,157 Collars 24,087 (10,814 ) Swaptions 15,665 — $ 61,899 $ (7,657 ) Subsequent to March 31, 2020, the Company entered into additional natural gas swap contracts for 2,300,000 MMBtu for the fourth quarter of 2020 with a weighted average price of $2.60 per MMBtu, 56,100,000 MMBtu for 2021 with a weighted average price of $2.54 per MMBtu and 10,950,000 MMBtu in 2022 with a weighted average price of $2.53 per MMBtu. The Company also entered into natural gas collars covering 4,600,000 MMBtu for the fourth quarter of 2020 with an average ceiling price of $3.01 per MMBtu and an average floor price of $2.50 per MMBtu and 54,750,000 MMBtu in 2021 with an average ceiling price of $2.94 per MMBtu and an average floor price of $2.43 per MMBtu. Comstock entered into interest rate swap agreements to fix LIBOR at 0.33% for $500.0 million of amounts outstanding under the bank credit facility from April 2020 through April 2023. |
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 general and administrative expenses for awards of restricted stock and performance stock units ("PSUs") to the Company's employees and directors. The Company recognized $1.4 million and $0.6 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 three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, Comstock had 1,060,248 shares of unvested restricted stock outstanding at a weighted average grant date fair value of $6.10 per share. Total unrecognized compensation cost related to unvested restricted stock grants of $4.6 million as of March 31, 2020 is expected to be recognized over a period of 2.0 years. As of March 31, 2020, Comstock had 904,400 PSUs outstanding at a weighted average grant date fair value of $9.58 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 1,808,800 shares of common stock. Total unrecognized compensation cost related to these grants of $5.6 million as of March 31, 2020 is expected to be recognized over a period of 2.1 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 March 31, 2020. 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 $83.6 million as of March 31, 2020 from customers for contracts where performance obligations have been satisfied and an unconditional right to consideration exists. |
Credit Losses | Credit Losses On January 1, 2020, the Company adopted Financial Accounting Standards Board Accounting Standards Codification 326, Credit Losses In adopting ASC 326, the Company determined The Company performs quarterly impairment analysis using the |
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: Three Months Ended March 31, 2020 2019 (In thousands) Current - Federal $ — $ — Current - State 61 (118 ) Deferred - Federal 11,503 3,942 Deferred - State (173 ) 410 $ 11,391 $ 4,234 The difference between the federal statutory rate of 21% and the effective tax rate is due to the following: Three Months Ended March 31, 2020 2019 Tax at statutory rate 21.0% 21.0% Tax effect of: Valuation allowance on deferred tax assets (0.5 ) 1.5 State income taxes, net of federal benefit 0.3 0.7 Nondeductible stock-based compensation 0.5 0.6 Effective tax rate 21.3 % 23.8 % 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. The Company’s swaption agreements are measured at fair value using a third-party pricing service, categorized as a Level 3 measurement. The Company had no derivative instruments classified as Level 3 as of March 31, 2019. The following is a reconciliation of the beginning and ending balances for derivative instruments classified as Level 3 in the fair value hierarchy: Three Months Ended March 31, 2020 (In thousands) Balance at beginning of year $ 4,351 Total gain included in earnings 15,665 Settlements, net (7,328 ) Balance at end of period $ 12,688 Fair Values – Reported The following presents the carrying amounts and the fair values of the Company’s financial instruments as of March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Assets: (In thousands) Commodity-based derivatives (a)(b) $ 108,656 $ 108,656 $ 89,192 $ 89,192 Liabilities: Commodity-based derivatives (a)(b) 7,423 7,423 4,442 4,442 Bank credit facility (c) 1,250,000 1,250,000 1,250,000 1,250,000 7.5% senior notes due 2025 (d) 461,023 362,500 455,768 534,375 9.75% senior notes due 2026 (d) 820,854 569,500 820,057 765,000 _____________ (a) The Company ' (b) As of March 31, 2020, a portion of our natural gas derivatives contain swaptions where the counterparty has the right, but not the obligation, to extend terms of an existing swap on predetermined dates. Due to subjectivity of the inputs used to value the counterparty rights in swaptions, these rights are classified as Level 3 in the fair value hierarchy. (c) The carrying value of our floating rate debt outstanding approximates fair value because of its floating rate structure. (d) The fair value of the Company ' |
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. The Series A and Series B Convertible Preferred Stock issued in connection with the Covey Park Acquisition will become convertible into in the aggregate 96,250,000 shares of common stock beginning on July 16, 2020 at a conversion price of $4.00 per share. The dilutive effect of preferred stock is computed using the if-converted method as if conversion of the preferred shares had occurred at the earlier of the date of issuance or the beginning of the period. For the three months ended March 31, 2020, the preferred stock was dilutive. Basic and diluted income per share were determined as follows: Three Months Ended March 31, 2020 2019 Income Shares Per Share Income Shares Per Share (In thousands, except per share amounts) Net income attributable to common stock $ 29,956 $ 13,575 Income allocable to unvested restricted shares (37 ) (53 ) Basic income attributable to common stock 29,919 188,916 $ 0.16 13,522 105,457 $ 0.13 Effect of Dilutive Securities: Preferred stock $ 12,072 96,250 — — Diluted income attributable to common stock $ 41,991 285,166 $ 0.15 $ 13,522 105,457 $ 0.13 At March 31, 2020 and December 31, 2019, 1,060,248 and 1,092,309 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: Three Months Ended March 31, 2020 2019 (in thousands) Unvested restricted stock 1,085 414 Weighted average unearned PSUs outstanding were as follows: Three Months Ended March 31, 2020 2019 (In thousands, except per share/unit amounts) Weighted average PSUs 927 335 Weighted average grant date fair value per unit $ 9.58 $ 12.93 The PSUs were anti-dilutive in the three months ended March 31, 2020 and 2019. |
Supplementary Information With Respect to the Consolidated Statements of Cash Flows | Supplementary Information With Respect to the Consolidated Statements of Cash Flows Cash payments made for interest, income taxes and the change in non-cash investing activities related to accrued capital expenditures for the three months ended March 31, 2020 and 2019, respectively, were as follows: Three Months Ended March 31, 2020 2019 (In thousands) Cash payments for: Interest payments $ 55,207 $ 50,329 Income tax payments — — Non-cash investing activities include: Decrease in accrued capital expenditures $ 13,190 $ 2,463 |
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. We did not early adopt ASU 2017-04 and will implement ASU 2017-04 when we perform our annual impairment assessments following adoption of this standard in 2020. We do not expect the adoption to have a significant effect on our results of operations, liquidity or financial position. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Unaudited Pro Forma Financial Information | Pro Forma Three Months Ended March 31, 2019 (In thousands, except per share amount) Revenues: $ 315,303 Net Income $ 62,077 Net income per share: Basic $ 0.28 Diluted $ 0.22 |
Summary of Lease Cost Recognized | Lease costs recognized during the three months ended March 31, 2020 were as follows: Three Months Ended March 31, 2020 (In thousands) Operating lease cost included in general and administrative expense $ 411 Operating lease cost included in lease operating expense 137 Short-term lease cost (drilling rig costs included in proved oil and gas properties) 12,309 $ 12,857 |
Summary of Liabilities Under Contract Contain Operating Leases | As of March 31, 2020, Comstock had the following liabilities under contracts that contain operating leases: (In thousands) April 1 to December 31, 2020 $ 2,293 2021 1,518 2022 196 Total lease payments 4,007 Imputed interest (179 ) Total lease liability $ 3,828 |
Summary of Accrued Expenses | Accrued expenses at March 31, 2020 and December 31, 2019 consisted of the following: As of March 31, 2020 As of December 31, 2019 (In thousands) Accrued interest payable $ 29,906 $ 39,501 Accrued drilling costs 29,003 42,193 Accrued transportation costs 26,359 26,907 Accrued transaction costs 6,690 10,830 Accrued employee compensation 4,562 8,653 Accrued lease operating expenses 6,200 4,990 Other 4,361 4,092 $ 107,081 $ 137,166 |
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: Three Months Ended March 31, 2020 2019 (In thousands) Reserve for future abandonment costs at beginning of period $ 18,151 $ 5,136 New wells placed on production 186 40 Liabilities settled and assets disposed of (11 ) (29 ) Accretion expense 287 96 Reserve for future abandonment costs at end of period $ 18,613 $ 5,243 |
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 March 31, 2020: Future Production Period Nine Months Ending December 31, 2020 Year Ending December 31, 2021 Total Natural Gas Swap Contracts: Volume (MMBtu) 78,222,890 62,883,140 141,106,030 Average Price per MMBtu $2.73 $2.57 $2.66 Natural Gas 2-Way Collar Contracts: Volume (MMBtu) 7,200,000 — 7,200,000 Price per MMBtu: Average Ceiling $2.92 — $2.92 Average Floor $2.41 — $2.41 Natural Gas 3-Way Collar Contracts: Volume (MMBtu) 13,750,000 — 13,750,000 Price per MMBtu: Average Ceiling $2.99 — $2.99 Average Floor $2.63 — $2.63 Average Put $2.32 — $2.32 Natural Gas Swaptions Contracts: Volume (MMBtu) 57,750,000 (a) 23,650,000 (b) 81,400,000 Average Price per MMBtu $2.52 $2.52 $2.52 Crude Oil Collar Contracts: Volume (Barrels) 820,600 — 820,600 Price per Barrel: Average Ceiling $64.13 — $64.13 Average Floor $49.51 — $49.51 (a) The counterparty has the right to extend hedged volumes of 71,250,000 MMBtu of swaptions placed in 2020 into 2021 (b) The counterparty has the right to extend hedged volumes of 49,200,000 MMBtu of swaptions placed in 2020 and 2021 into 2022 at an average price $2.51 per MMBtu. |
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 March 31, 2020 December 31, 2019 (in thousands) Fair Value of Derivative Instruments Asset Derivatives: Natural gas price derivatives Derivative Financial Instruments – current $ 85,349 $ 75,123 Oil price derivatives Derivative Financial Instruments – current 16,472 181 $ 101,821 $ 75,304 Natural gas price derivatives Derivative Financial Instruments – long-term $ 6,835 $ 13,888 Liability Derivatives: Natural gas price derivatives Derivative Financial Instruments – current $ 3,043 $ 222 Natural gas price derivatives Derivative Financial Instruments – long-term $ 4,380 $ 4,220 |
Schedule of Gains and Losses from Derivative Financial Instruments | 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 Gain/(Loss) Recognized in Three Months Ended March 31, Earnings on Derivatives 2020 2019 (In thousands) Swaps $ 22,147 $ 3,157 Collars 24,087 (10,814 ) Swaptions 15,665 — $ 61,899 $ (7,657 ) |
Consolidated Income Tax Provision | The following is an analysis of the consolidated income tax provision: Three Months Ended March 31, 2020 2019 (In thousands) Current - Federal $ — $ — Current - State 61 (118 ) Deferred - Federal 11,503 3,942 Deferred - State (173 ) 410 $ 11,391 $ 4,234 |
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 March 31, 2020 2019 Tax at statutory rate 21.0% 21.0% Tax effect of: Valuation allowance on deferred tax assets (0.5 ) 1.5 State income taxes, net of federal benefit 0.3 0.7 Nondeductible stock-based compensation 0.5 0.6 Effective tax rate 21.3 % 23.8 % |
Reconciliation of Beginning and Ending Balances for Derivative Instruments | The Company had no derivative instruments classified as Level 3 as of March 31, 2019. The following is a reconciliation of the beginning and ending balances for derivative instruments classified as Level 3 in the fair value hierarchy: Three Months Ended March 31, 2020 (In thousands) Balance at beginning of year $ 4,351 Total gain included in earnings 15,665 Settlements, net (7,328 ) Balance at end of period $ 12,688 |
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 March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Assets: (In thousands) Commodity-based derivatives (a)(b) $ 108,656 $ 108,656 $ 89,192 $ 89,192 Liabilities: Commodity-based derivatives (a)(b) 7,423 7,423 4,442 4,442 Bank credit facility (c) 1,250,000 1,250,000 1,250,000 1,250,000 7.5% senior notes due 2025 (d) 461,023 362,500 455,768 534,375 9.75% senior notes due 2026 (d) 820,854 569,500 820,057 765,000 _____________ (a) The Company ' (b) As of March 31, 2020, a portion of our natural gas derivatives contain swaptions where the counterparty has the right, but not the obligation, to extend terms of an existing swap on predetermined dates. Due to subjectivity of the inputs used to value the counterparty rights in swaptions, these rights are classified as Level 3 in the fair value hierarchy. (c) The carrying value of our floating rate debt outstanding approximates fair value because of its floating rate structure. (d) The fair value of the Company ' |
Basic and Diluted Income Per Share | Basic and diluted income per share were determined as follows: Three Months Ended March 31, 2020 2019 Income Shares Per Share Income Shares Per Share (In thousands, except per share amounts) Net income attributable to common stock $ 29,956 $ 13,575 Income allocable to unvested restricted shares (37 ) (53 ) Basic income attributable to common stock 29,919 188,916 $ 0.16 13,522 105,457 $ 0.13 Effect of Dilutive Securities: Preferred stock $ 12,072 96,250 — — Diluted income attributable to common stock $ 41,991 285,166 $ 0.15 $ 13,522 105,457 $ 0.13 |
Weighted Average Shares of Unvested Restricted Stock | Weighted average shares of unvested restricted stock outstanding were as follows: Three Months Ended March 31, 2020 2019 (in thousands) Unvested restricted stock 1,085 414 |
Common Stock and Convertible Stock Dilutive in Weighted average unearned PSUs outstanding | Weighted average unearned PSUs outstanding were as follows: Three Months Ended March 31, 2020 2019 (In thousands, except per share/unit amounts) Weighted average PSUs 927 335 Weighted average grant date fair value per unit $ 9.58 $ 12.93 |
Cash Payments Made for Interest and Income Taxes | Cash payments made for interest, income taxes and the change in non-cash investing activities related to accrued capital expenditures for the three months ended March 31, 2020 and 2019, respectively, were as follows: Three Months Ended March 31, 2020 2019 (In thousands) Cash payments for: Interest payments $ 55,207 $ 50,329 Income tax payments — — Non-cash investing activities include: Decrease in accrued capital expenditures $ 13,190 $ 2,463 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-term Debt | At March 31, 2020, long-term debt was comprised of the following: (In thousands) 7½% Senior Notes due 2025: Principal 625,000 Discount, net of amortization (163,977 ) 9¾% Senior Notes due 2026: Principal 850,000 Discount, net of amortization (29,146 ) Bank Credit Facility: Principal 1,250,000 Debt issuance costs, net of amortization (24,593 ) $ 2,507,284 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information 1 (Detail) - USD ($) | Jul. 16, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Repayments of outstanding borrowings | $ 57,000,000 | $ 25,000,000 | |||
Value of common stock shares issued | 94,990,000 | $ 95,003,000 | |||
Impairment of oil and gas properties | 0 | $ 0 | |||
Goodwill | $ 335,897,000 | 335,897,000 | $ 335,900,000 | ||
Affiliates Controlled By Majority Shareholder Jerry Jones | Common Stock | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued to shareholder | 50,000,000 | ||||
Value of common stock shares issued | $ 300,000,000 | ||||
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 | 175,000 | ||||
Covey Park Acquisition | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Cash received by equity owners of acquire | $ 700,000,000 | ||||
Merger value | 2,200,000,000 | ||||
Repayments of outstanding borrowings | 380,000,000 | ||||
Preferred equity redeemed in merger | 153,400,000 | ||||
Acquisition related fees | $ 41,000,000 | ||||
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 | ||||
Covey Park Acquisition | Common Stock | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued to shareholder | 28,833,000 | ||||
Share issue price | $ 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% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Unaudited Pro Forma Financial Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Total oil and gas sales | $ 225,878 | $ 126,881 |
Net income | $ 42,028 | $ 13,575 |
Net income per share: | ||
Basic | $ 0.16 | $ 0.13 |
Diluted | $ 0.15 | $ 0.13 |
Pro Forma | ||
Total oil and gas sales | $ 315,303 | |
Net income | $ 62,077 | |
Net income per share: | ||
Basic | $ 0.28 | |
Diluted | $ 0.22 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Leases - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Operations And Summary Of Significant Accounting Policies [Line Items] | ||
Operating lease, right-of-use assets | $ 3,828 | $ 3,509 |
Operating lease liabilities, short term | 2,157 | 1,994 |
Operating lease liabilities, long term | $ 1,671 | $ 1,515 |
Prior advance notice period for cancellation of rig contracts | 30 days | |
Cash payments for operating leases associated with right-of-use assets | $ 500 | |
Operating lease, weighted average remaining lease term | 1 year 9 months 18 days | |
Operating lease, weighted average discount rate, percent | 4.80% | |
Expected future payments for contracted drilling services | $ 4,400 | |
ASU 842 | ||
Operations And Summary Of Significant Accounting Policies [Line Items] | ||
Operating lease, right-of-use assets | 3,800 | |
Operating lease liabilities, short term | 2,100 | |
Operating lease liabilities, long term | $ 1,700 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Lease Cost Recognized (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Operations And Summary Of Significant Accounting Policies [Line Items] | |
Operating lease cost | $ 12,857 |
General and Administrative Expense | |
Operations And Summary Of Significant Accounting Policies [Line Items] | |
Operating lease cost | 411 |
Lease Operating Expense | |
Operations And Summary Of Significant Accounting Policies [Line Items] | |
Operating lease cost | 137 |
Short-term Drilling Rig Costs Included in Proved Oil and Gas Properties | |
Operations And Summary Of Significant Accounting Policies [Line Items] | |
Operating lease cost | $ 12,309 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Summary of Liabilities Under Contract Contain Operating Leases (Detail) $ in Thousands | Mar. 31, 2020USD ($) |
Operating leases | |
April 1 to December 31, 2020 | $ 2,293 |
2021 | 1,518 |
2022 | 196 |
Total lease payments | 4,007 |
Imputed interest | (179) |
Total lease liability | $ 3,828 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Summary of Accrued Expenses (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued Liabilities, Current [Abstract] | ||
Accrued interest payable | $ 29,906 | $ 39,501 |
Accrued drilling costs | 29,003 | 42,193 |
Accrued transportation costs | 26,359 | 26,907 |
Accrued transaction costs | 6,690 | 10,830 |
Accrued employee compensation | 4,562 | 8,653 |
Accrued lease operating expenses | 6,200 | 4,990 |
Other | 4,361 | 4,092 |
Total accrued expenses | $ 107,081 | $ 137,166 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Summary of Changes in Reserve for Future Abandonment Costs (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Asset Retirement Obligations Noncurrent [Abstract] | ||
Reserve for future abandonment costs at beginning of period | $ 18,151 | $ 5,136 |
New wells placed on production | 186 | 40 |
Liabilities settled and assets disposed of | (11) | (29) |
Accretion expense | 287 | 96 |
Reserve for future abandonment costs at end of period | $ 18,613 | $ 5,243 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Schedule of Derivative Contracts Volume and Prices (Detail) | Mar. 31, 2020MMBTUbbl$ / MMBTU$ / bbl |
Natural Gas Derivatives | |
Derivative [Line Items] | |
Volume | MMBTU | 141,106,030 |
Average price | 2.66 |
Natural Gas Derivatives | Swap Contracts for Q2,Q3 and Q4 | |
Derivative [Line Items] | |
Volume | MMBTU | 78,222,890 |
Average price | 2.73 |
Natural Gas Derivatives | Swap Contracts for 2021 | |
Derivative [Line Items] | |
Volume | MMBTU | 62,883,140 |
Average price | 2.57 |
Natural Gas 3-Way Collar Contracts, in MMBTU | |
Derivative [Line Items] | |
Volume | MMBTU | 13,750,000 |
Ceiling, Average price | 2.99 |
Floor, Average price | 2.63 |
Put, Average price | 2.32 |
Natural Gas 3-Way Collar Contracts, in MMBTU | Swap Contracts for Q2,Q3 and Q4 | |
Derivative [Line Items] | |
Volume | MMBTU | 13,750,000 |
Ceiling, Average price | 2.99 |
Floor, Average price | 2.63 |
Put, Average price | 2.32 |
Natural Gas Swaptions Contracts | |
Derivative [Line Items] | |
Volume | MMBTU | 81,400,000 |
Average price | 2.52 |
Natural Gas Swaptions Contracts | Swap Contracts for Q2,Q3 and Q4 | |
Derivative [Line Items] | |
Volume | MMBTU | 57,750,000 |
Average price | 2.52 |
Natural Gas Swaptions Contracts | Swap Contracts for 2021 | |
Derivative [Line Items] | |
Volume | MMBTU | 23,650,000 |
Average price | 2.52 |
Natural Gas 2-Way Collar Contracts | |
Derivative [Line Items] | |
Volume | MMBTU | 7,200,000 |
Ceiling, Average price | 2.92 |
Floor, Average price | 2.41 |
Natural Gas 2-Way Collar Contracts | Collar Contracts for Q2,Q3 and Q4 | |
Derivative [Line Items] | |
Volume | MMBTU | 7,200,000 |
Ceiling, Average price | 2.92 |
Floor, Average price | 2.41 |
Crude Oil Contracts, in Barrels | |
Derivative [Line Items] | |
Volume | bbl | 820,600 |
Ceiling, Average price | $ / bbl | 64.13 |
Floor, Average price | $ / bbl | 49.51 |
Crude Oil Contracts, in Barrels | Collar Contracts for Q2,Q3 and Q4 | |
Derivative [Line Items] | |
Volume | bbl | 820,600 |
Ceiling, Average price | $ / bbl | 64.13 |
Floor, Average price | $ / bbl | 49.51 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Schedule of Derivative Contracts Volume and Prices (Parenthetical) (Detail) - Natural Gas Swaptions Contracts | Mar. 31, 2020MMBTU$ / MMBTU |
Derivative [Line Items] | |
Extendable hedge volumes | MMBTU | 81,400,000 |
Average price | $ / MMBTU | 2.52 |
2020 Swaption Contracts Extendable into 2021 | |
Derivative [Line Items] | |
Extendable hedge volumes | MMBTU | 71,250,000 |
Average price | $ / MMBTU | 2.52 |
2020 and 2021 Swaption Contracts Extendable into 2022 | |
Derivative [Line Items] | |
Extendable hedge volumes | MMBTU | 49,200,000 |
Average price | $ / MMBTU | 2.51 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Additional Information 2 (Detail) | May 11, 2020USD ($)MMBTU$ / MMBTU | Mar. 31, 2020USD ($)MMBTUUnitProduct$ / shares$ / MMBTU$ / EquityUnitshares | Mar. 31, 2019USD ($) | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($)shares |
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Derivative contracts settlement frequency | monthly | ||||
Cash flow hedges derivative instruments | $ | $ 0 | ||||
Stock-based compensation expense recognized | $ | $ 1,430,000 | $ 648,000 | |||
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 | $ | $ 83,594,000 | $ 120,111,000 | |||
ASC 326 | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Cumulative-effect adjustment | $ | $ 0 | ||||
Restricted Stock | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Shares of unvested restricted stock outstanding | shares | 1,060,248 | 1,092,309 | |||
Weighted average grant date fair value of stock grants per share | $ / shares | $ 6.10 | ||||
Unrecognized compensation cost related to unvested restricted stock | $ | $ 4,600,000 | ||||
Period in which compensation cost expected to be recognized | 2 years | ||||
Potential Performance Shares (PSU) | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Period in which compensation cost expected to be recognized | 2 years 1 month 6 days | ||||
Number of performance stock units ("PSUs") outstanding | Unit | 904,400 | ||||
Weighted average grant date fair value of PSUs per unit | $ / EquityUnit | 9.58 | ||||
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 | 1,808,800 | ||||
Unrecognized expense, performance share units | $ | $ 5,600,000 | ||||
General and Administrative Expense | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Stock-based compensation expense recognized | $ | $ 1,400,000 | $ 600,000 | |||
Natural Gas Contract | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Volume | MMBTU | 141,106,030 | ||||
Average price | $ / MMBTU | 2.66 | ||||
Basis Swap Contracts | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Volume | MMBTU | 42,050,000 | ||||
Fair value of derivative net asset | $ | $ 1,900,000 | ||||
Derivative contracts settlement, month and year | 2022-12 | ||||
Swap Contracts for 2021 | Natural Gas Contract | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Volume | MMBTU | 62,883,140 | ||||
Average price | $ / MMBTU | 2.57 | ||||
Swap Contracts for 2022 | Natural Gas Contract | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Volume | MMBTU | 10,950,000 | ||||
Average price | $ / MMBTU | 2.53 | ||||
Subsequent Event | Swap Contracts for Q4 | Natural Gas Contract | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Volume | MMBTU | 2,300,000 | ||||
Average price | $ / MMBTU | 2.60 | ||||
Subsequent Event | Swap Contracts for Q4 | Natural Gas Collars Contract | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Volume | MMBTU | 4,600,000 | ||||
Ceiling, Average price | $ / MMBTU | 3.01 | ||||
Floor, Average price | $ / MMBTU | 2.50 | ||||
Subsequent Event | Swap Contracts for 2021 | Natural Gas Contract | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Volume | MMBTU | 56,100,000 | ||||
Average price | $ / MMBTU | 2.54 | ||||
Subsequent Event | Swap Contracts for 2021 | Natural Gas Collars Contract | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Volume | MMBTU | 54,750,000 | ||||
Ceiling, Average price | $ / MMBTU | 2.94 | ||||
Floor, Average price | $ / MMBTU | 2.43 | ||||
Subsequent Event | Interest Rate Swap Contracts | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Outstanding under the bank credit facility | $ | $ 500,000,000 | ||||
Subsequent Event | Interest Rate Swap Contracts | LIBOR | |||||
Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Outstanding bank credit facility percentage | 0.33% |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Schedule of Derivative Instruments (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Derivative [Line Items] | ||
Assets, Fair Value | $ 101,821 | $ 75,304 |
Assets, Fair Value | 6,835 | 13,888 |
Liability, Fair Value | 3,043 | 222 |
Liability, Fair Value | 4,380 | 4,220 |
Derivative Financial Instruments – current | ||
Derivative [Line Items] | ||
Assets, Fair Value | 101,821 | 75,304 |
Natural Gas Derivatives | Derivative Financial Instruments – current | ||
Derivative [Line Items] | ||
Assets, Fair Value | 85,349 | 75,123 |
Liability, Fair Value | 3,043 | 222 |
Natural Gas Derivatives | Derivative Financial Instruments – long-term | ||
Derivative [Line Items] | ||
Assets, Fair Value | 6,835 | 13,888 |
Liability, Fair Value | 4,380 | 4,220 |
Oil Price Derivatives | Derivative Financial Instruments – current | ||
Derivative [Line Items] | ||
Assets, Fair Value | $ 16,472 | $ 181 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Schedule of Gains and Losses from Derivative Financial Instruments (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative [Line Items] | ||
Gain (loss) from derivative financial instruments | $ 61,899 | $ (7,657) |
Gain (Loss) from Derivative Financial Instruments | ||
Derivative [Line Items] | ||
Gain (loss) from derivative financial instruments | 61,899 | (7,657) |
Gain (Loss) from Derivative Financial Instruments | Swap Contracts | ||
Derivative [Line Items] | ||
Gain (loss) from derivative financial instruments | 22,147 | 3,157 |
Gain (Loss) from Derivative Financial Instruments | Collar Contracts | ||
Derivative [Line Items] | ||
Gain (loss) from derivative financial instruments | 24,087 | $ (10,814) |
Gain (Loss) from Derivative Financial Instruments | Swaption Contracts | ||
Derivative [Line Items] | ||
Gain (loss) from derivative financial instruments | $ 15,665 |
Summary of Significant Accou_16
Summary of Significant Accounting Policies - Consolidated Income Tax Provision (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Current - State | $ 61 | $ (118) |
Deferred - Federal | 11,503 | 3,942 |
Deferred - State | (173) | 410 |
Total | $ 11,391 | $ 4,234 |
Summary of Significant Accou_17
Summary of Significant Accounting Policies - Additional Information 3 (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Federal statutory rate | 21.00% | 21.00% | |
Derivative instruments | $ 12,688,000 | $ 0 | $ 4,351,000 |
Summary of Significant Accou_18
Summary of Significant Accounting Policies - Difference Between Federal Statutory Rate and Effective Tax Rate (Detail) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Tax at statutory rate | 21.00% | 21.00% |
Tax effect of: | ||
Valuation allowance on deferred tax assets | (0.50%) | 1.50% |
State income taxes, net of federal benefit | 0.30% | 0.70% |
Nondeductible stock-based compensation | 0.50% | 0.60% |
Effective tax rate | 21.30% | 23.80% |
Summary of Significant Accou_19
Summary of Significant Accounting Policies - Reconciliation of Beginning and Ending Balances for Derivative Instruments (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Accounting Policies [Abstract] | |
Balance at beginning of year | $ 4,351 |
Total gain included in earnings | 15,665 |
Settlements, net | (7,328) |
Balance at end of period | $ 12,688 |
Summary of Significant Accou_20
Summary of Significant Accounting Policies - Summary of Carrying Amounts and Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Derivative Financial Instruments | $ 101,821 | $ 75,304 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Derivative Financial Instruments | 3,043 | 222 |
Bank Credit Facility | ||
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Long-term debt, Carrying Value | 1,250,000 | 1,250,000 |
Long-term debt, Fair Value | 1,250,000 | 1,250,000 |
Level 1 | 7.5% Senior Notes due 2025 | Long Term Debt | ||
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Long-term debt, Carrying Value | 461,023 | 455,768 |
Long-term debt, Fair Value | 362,500 | 534,375 |
Level 1 | 9.75% Senior Notes due 2026 | Long Term Debt | ||
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Long-term debt, Carrying Value | 820,854 | 820,057 |
Long-term debt, Fair Value | 569,500 | 765,000 |
Commodity-Based Derivatives | Level 2 and Level 3 | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||
Derivative Financial Instruments | 108,656 | 89,192 |
Derivative financial asset, Fair value | 108,656 | 89,192 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | ||
Derivative Financial Instruments | 7,423 | 4,442 |
Derivative financial liabilities, Fair value | $ 7,423 | $ 4,442 |
Summary of Significant Accou_21
Summary of Significant Accounting Policies - Summary of Carrying Amounts and Fair Values of Financial Instruments (Parenthetical) (Detail) - Long Term Debt | Mar. 31, 2020 |
7.5% 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_22
Summary of Significant Accounting Policies - Additional Information 4 (Detail) - $ / shares | Jul. 16, 2020 | Jul. 16, 2019 | Mar. 31, 2020 | Dec. 31, 2019 |
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 | |||
Aggregate common stock upon conversion | 96,250,000 | |||
Preferred stock, conversion price per share | $ 4 | $ 4 | ||
Earliest conversion date for convertible preferred stock | Jul. 16, 2020 | |||
Restricted Stock | ||||
Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Shares of unvested restricted stock outstanding | 1,060,248 | 1,092,309 | ||
Series A and Series B Convertible Preferred Stock | Scenario Forecast | ||||
Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Aggregate common stock upon conversion | 96,250,000 |
Summary of Significant Accou_23
Summary of Significant Accounting Policies - Basic and Diluted Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net income attributable to common stock | $ 29,956 | $ 13,575 |
Income allocable to unvested restricted shares | $ (37) | $ (53) |
Basic income attributable to common stock, Per Share | $ 0.16 | $ 0.13 |
Diluted income attributable to common stock, Per Share | $ 0.15 | $ 0.13 |
Basic income attributable to common stock | $ 29,919 | $ 13,522 |
Effect of dilutive securities: preferred stock | 12,072 | |
Diluted income attributable to common stock | $ 41,991 | $ 13,522 |
Basic | 188,916 | 105,457 |
Preferred stock | 96,250 | |
Diluted income attributable to common stock | 285,166 | 105,457 |
Summary of Significant Accou_24
Summary of Significant Accounting Policies - Weighted Average Shares of Unvested Restricted Stock (Detail) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Unvested restricted stock | 1,085 | 414 |
Summary of Significant Accou_25
Summary of Significant Accounting Policies - Common Stock and Convertible Stock Dilutive in Weighted average unearned PSUs outstanding (Detail) EquityUnit in Thousands | 3 Months Ended | |
Mar. 31, 2020EquityUnit$ / EquityUnit | Mar. 31, 2019EquityUnit$ / EquityUnit | |
Earnings Per Share [Abstract] | ||
Weighted average PSUs | EquityUnit | 927 | 335 |
Weighted average grant date fair value per unit | $ / EquityUnit | 9.58 | 12.93 |
Summary of Significant Accou_26
Summary of Significant Accounting Policies - Supplementary Information of Consolidated Statements of Cash Flows (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash payments for: | ||
Interest payments | $ 55,207 | $ 50,329 |
Non-cash investing activities include: | ||
Decrease in accrued capital expenditures | $ 13,190 | $ 2,463 |
Long-Term Debt - Long-term Debt
Long-Term Debt - Long-term Debt (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Debt issuance costs, net of amortization | $ (24,593) | |
Long-term Debt | 2,507,284 | $ 2,500,132 |
Bank Credit Facility | ||
Debt Instrument [Line Items] | ||
Principal | 1,250,000 | |
7½% Senior Notes due 2025 | ||
Debt Instrument [Line Items] | ||
Principal | 625,000 | |
Discount, net of amortization | (163,977) | |
9.75% Senior Notes due 2026 | ||
Debt Instrument [Line Items] | ||
Principal | 850,000 | |
Discount, net of amortization | $ (29,146) |
Long-Term Debt - Long-term De_2
Long-Term Debt - Long-term Debt (Parenthetical) (Detail) | Mar. 31, 2020 |
7½% Senior Notes due 2025 | |
Debt Instrument [Line Items] | |
Interest rate on debt instrument | 7.50% |
9.75% Senior Notes due 2026 | |
Debt Instrument [Line Items] | |
Interest rate on debt instrument | 9.75% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - Bank Credit Facility - USD ($) $ in Billions | Mar. 31, 2020 | May 06, 2020 |
Debt Instrument [Line Items] | ||
Leverage ratio | 400.00% | |
Current ratio | 100.00% | |
Maturity of credit facility | Jul. 16, 2024 | |
Bank credit facility | $ 1.5 | |
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 | 2.25% | |
LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Spread rate for interest rate on credit facility | 3.25% | |
Base Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Spread rate for interest rate on credit facility | 1.25% | |
Base Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Spread rate for interest rate on credit facility | 2.25% | |
Subsequent Event | ||
Debt Instrument [Line Items] | ||
Bank credit facility | $ 1.4 |
Preferred Stock - Additional In
Preferred Stock - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Jul. 16, 2020 | Jul. 16, 2019 | Mar. 31, 2020 | Dec. 31, 2019 |
Temporary Equity [Line Items] | ||||
Conversion price per share | $ 4 | $ 4 | ||
Aggregate common stock upon conversion | 96,250,000 | |||
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 | |||
Fair value of convertible preferred stock issued | $ 200 | |||
Preferred stock, quarterly dividends rate | 10.00% | 10.00% | ||
Series A 10% Convertible Preferred Stock | Scenario Forecast | ||||
Temporary Equity [Line Items] | ||||
Accretion to redemption value of convertible preferred stock issued | $ 210 | |||
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 | |||
Preferred stock, quarterly dividends rate | 10.00% | 10.00% | 10.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Commitments And Contingencies [Line Items] | |
Natural gas transportation and treating agreements | February 2021 and extend through October 2031 |
Natural gas transportation contracts, for the remainder of 2020 | $ 10.9 |
Natural gas transportation contracts, 2021 | 15.1 |
Natural gas transportation contracts, 2022 | 24.8 |
Natural gas transportation contracts, 2023 | 24.8 |
Natural gas transportation contracts, 2024 | 24.9 |
Natural gas transportation contracts, remaining terms | $ 169.6 |
Contract cancellable term related to drilling services | 30 to 60 days' |
Commitments for contracted drilling services | $ 4.4 |
Maximum | |
Commitments And Contingencies [Line Items] | |
Contract term related to drilling services | one year |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |||
Payment received from affiliates | $ 46,700 | $ 700 | |
Accounts receivable from affiliates | $ 25,744 | $ 35,469 |