Escalera Resources (ESCR) 10-Q 23 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 31, 2015
Document And Entity Information [Abstract]
Entity Registrant Name	Escalera Resources Co.
Entity Central Index Key	29,834
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		14,303,444
Entity Current Reporting Status	No

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 2,452	$ 5,933
Cash held in escrow	283	283
Accounts receivable, net	1,962	4,181
Assets from price risk management	6,738	3,546
Other current assets	1,053	2,131
Total current assets	12,488	16,074
Natural gas and oil properties and equipment, successful efforts method:
Developed properties	177,626	243,245
Wells in progress	2,653	4,039
Gas transportation pipeline	5,510	5,510
Undeveloped properties	1,647	1,967
Corporate and other assets	1,426	1,468
Total natural gas and oil properties and equipment, successful efforts method	188,862	256,229
Less accumulated depreciation, depletion and amortization	(122,446)	(149,573)
Net properties and equipment	66,416	106,656
Assets from price risk management	1,614	3,442
Other assets	2,432	1,707
TOTAL ASSETS	82,950	127,879
Current liabilities:
Accounts payable and accrued expenses	7,934	9,689
Accrued production taxes	2,409	2,418
Credit facility, current	36,886	47,515
Total current liabilities	47,229	59,622
Asset retirement obligation	7,915	8,853
Other long-term liabilities		526
Total liabilities	55,144	69,001
Preferred stock, $0.10 par value; 10,000,000 shares authorized; 1,610,000 shares issued and outstanding at September 30, 2015 and December 31, 2014	37,972	37,972
Stockholders' equity (deficit):
Common stock, $0.10 par value; 50,000,000 shares authorized; 14,295,944 issued and outstanding at September 30, 2015, and 14,266,453 issued and outstanding at December 31, 2014	1,430	1,427
Additional paid-in capital	43,564	43,200
Accumulated deficit	(55,160)	(23,721)
Total stockholders' (deficit) equity	(10,166)	20,906
TOTAL LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY	$ 82,950	$ 127,879

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Consolidated Balance Sheets
Preferred stock, par value	$ 0.10	$ 0.10
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	1,610,000	1,610,000
Preferred stock, shares outstanding	1,610,000	1,610,000
Common stock, par value	$ 0.10	$ 0.10
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	14,295,944	14,266,453
Common stock, shares outstanding	14,295,944	14,266,453

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenues:
Oil and gas sales	$ 2,471	$ 7,550	$ 10,190	$ 27,436
Transportation and gathering revenue	559	828	1,771	2,732
Price risk management activities	2,476	1,633	5,042	(1,634)
Other income	(404)	21	(89)	207
Total revenues	5,102	10,032	16,914	28,741
Costs and expenses:
Production costs	2,660	3,296	8,694	9,768
Production taxes	244	898	1,078	3,262
Exploration expenses including dry hole costs	11	28	60	84
Pipeline operating costs	469	958	1,926	3,268
Impairment and abandonment of equipment and properties	23	355	21,824	1,435
General and administrative	1,352	1,522	4,250	5,292
Depreciation, depletion and amortization	2,002	4,946	8,702	15,135
Total costs and expenses	6,761	12,003	46,534	38,244
Loss from operations	(1,659)	(1,971)	(29,620)	(9,503)
Interest expense, net	621	592	1,617	1,397
Provision for gas-to-liquids advance			202
Loss before income taxes	(2,280)	(2,563)	(31,439)	(10,900)
Deferred income tax benefit		42		911
NET LOSS	(2,280)	(2,521)	(31,439)	(9,989)
Preferred stock dividends (including undeclared and unpaid in 2015)	(930)	(930)	(2,792)	(2,792)
Net loss attributable to common stock	$ (3,210)	$ (3,451)	$ (34,231)	$ (12,781)
Net loss per common share:
Basic and diluted	$ (0.22)	$ (0.24)	$ (2.40)	$ (0.96)
Weighted average shares outstanding:
Basic and diluted	14,302,801	14,262,170	14,284,817	13,363,747

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net loss	$ (31,439)	$ (9,989)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion of asset retirement obligation	8,901	15,320
Amortization of loan fees		258
Impairment and abandonment of equipment and properties	21,824	1,435
Gain on settlement of asset retirement obligation		(80)
Gain on sale of corporate assets and non-producing properties		(94)
Settlement of asset retirement obligation	(62)	(344)
Settlement on price risk management	(129)
Benefit for deferred income taxes		(911)
Change in fair value of derivative contracts	(1,364)	1,305
Stock-based compensation expense	368	601
Loss on sale of producing property	135
Changes in current assets and liabilities:
Decrease in accounts receivable	1,910	503
Decrease (increase) in other current assets	18	(154)
(Decrease) increase in accounts payable and accrued expenses	(361)	422
Increase in accrued production taxes	399	1,282
NET CASH PROVIDED BY OPERATING ACTIVITIES	200	9,554
Cash flows from investing activities:
Sale of producing properties and equipment, undeveloped properties, and corporate assets, net	11,025	361
Payments to acquire and develop producing properties and equipment, net	(4,038)	(2,324)
Payments to acquire corporate and non-producing properties	(167)	(285)
Advance for gas-to-liquids plant initiative		(871)
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES	6,820	(3,119)
Cash flows from financing activities:
Net proceeds from sale of common stock		4,158
Dividends paid on preferred stock		(2,792)
Net repayments on credit facility	(10,500)	(2,435)
Payment of loan financing costs	2	(895)
Tax withholdings related to net share settlement of restricted stock awards	(3)	(44)
NET CASH USED IN FINANCING ACTIVITIES	(10,501)	(2,008)
Change in cash and cash equivalents	(3,481)	4,427
Cash and cash equivalents at beginning of period	5,933	2,799
CASH AND CASH EQUIVALENTS AT END OF PERIOD	2,452	7,226
Supplemental disclosure of cash and non-cash transactions:
Cash paid for interest	1,692	1,317
Interest capitalized	104	42
Additions to developed properties included in current liabilities	2,234	$ 3,424
Current assets transferred to purchaser in sale of producing properties	309
Liabilities assumed by purchaser in sale of producing properties	$ 1,285

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2015
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	1. Summary of Significant Accounting Policies Basis of presentation The accompanying unaudited interim consolidated financial statements and related notes were prepared by Escalera Resources Co. (“Escalera Resources” or the “Company”), in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and were prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in the annual audited consolidated financial statements have been condensed or omitted as allowed by such rules and regulations. These consolidated financial statements include all of the adjustments, which, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations. All such adjustments are of a normal recurring nature only. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year. The accounting policies followed by the Company are set forth in Note 1 to the Company’s consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2014, and are supplemented in the notes to this Quarterly Report on Form 10-Q. The unaudited interim consolidated financial statements presented herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on April 15, 2015 . Ability to Continue as a Going Concern The consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities and commitments in the normal course of business. The consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company’s long-term debt is reflected as a current liability on the consolidated balance sheets (see Note 4) as a result of several defaults under the Company’s credit facility that have occurred since the fourth quarter of 2014. As described further in Note 2 below, on November 5, 2015 the Company filed a voluntary petition (the “Bankruptcy Petition”) in the United States Bankruptcy Court for the District of Colorado (the “Bankruptcy Court”) seeking relief under the provisions of Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) . The Company’s filing of the Bankruptcy Petition constitutes an additional event of default under the Company’s credit facility. As noted below, the Company anticipates filing a plan of reorganization by November 24, 2015, however, there can be no assurance regarding the Company’s ability to successfully confirm and consummate a plan of reorganization, or any other alternative restructuring transactions, including a sale of all or substantially all of its assets that satisfies the conditions of the Bankruptcy Code and is authorized by the Bankruptcy Court. Principles of consolidation The unaudited interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Petrosearch Energy Corporation and Eastern Washakie Midstream LLC (“EWM”). The Company has an agreement with EWM under which the Company pays a fee to EWM to gather, compress and transport gas produced at the Catalina Unit, in the eastern Washakie Basin of Wyoming. This fee is eliminated in consolidation. Recent accounting pronouncements In August 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-15, “Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements”, which is effective beginning in the first quarter 2016, and will be applied retrospectively. ASU 2015-15 amends ASU 2015-03 as the previous standard did not address presentation or subsequent measurement of debt issuance costs related to line-of-credit agreements. The Company does not expect the adoptions of this ASU to have a material impact on its consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, "Simplifying the Measurement of Inventory”, which is effective beginning in the first quarter of 2017. ASU 2015-11 requires that inventory recorded using the first-in, first-out method be measured at the lower of cost or net realizable value, which is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company is currently evaluating the impact of ASU 2015-11 on its inventory valuation and results of operations.

Voluntary Reorganization under

Voluntary Reorganization under Chapter 11 Proceedings	9 Months Ended
	Sep. 30, 2015
Voluntary Reorganization under Chapter 11 Proceedings
Voluntary Reorganization under Chapter 11 Proceedings	2 . Voluntary Reorganization under Chapter 11 Proceedings On Novembe r 5, 2015, the Company filed a Bankruptcy Petition in the Bankruptcy Court seeking relief under the provisions of the Bankruptcy Code. The Company’s Chapter 11 case is being administered as In re Escalera Resources Co. , Case No. 15-22395-TBM (the “Bankruptcy Case”). The Company intends to continue to operate its business as “debtor-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Company will account for the bankruptcy in accordance with ASC 852, Reorganizations , starting with the quarterly period ending December 31, 2015. By certain “first day” motions filed in the Bankruptcy Case, the Company obtained Bankruptcy Court approval (on an interim basis) for the use of cash collateral, the payment of employee wages, health benefits and certain other employee obligations, and the payment of amounts due for certain joint-interest-billings. A final hearing on the motions to approve the use of cash collateral and to satisfy certain other obligations to certain third parties will be held on November 30, 2015. In connection with the Bankruptcy Case, the Company has an agreement for the use of cash collateral with the Company’s lenders. In accordance with the terms of this cash collateral agreement, the Company expects to file a plan of reorganization (the “Plan”) by November 24, 2015 based on the term sheet included with the cash collateral agreement (the “Term Sheet”). The Plan provides for the restructuring of the Company’s operations, debts and capital structure. Subject to certain exceptions, under the Bankruptcy Code, the filing of the Bankruptcy Petition automatically enjoined, or stayed, the continuation of most judicial or administrative proceedings or filing of other actions against the Company or its property to recover, collect or secure a claim arising prior to the date of the Bankruptcy Petition. Accordingly, although the filing of the Bankruptcy Petition triggered additional events of default on the Company’s debt obligations, the Company’s lenders and other creditors are stayed from taking any actions against the Company as a result of such defaults, subject to certain limited exceptions permitted by the Bankruptcy Code. Absent an order of the Bankruptcy Court, substantially all of the Company’s prepetition liabilities are subject to settlement under the Bankruptcy Code. For the duration of the Company’s Chapter 11 proceedings, the Company’s operations and ability to develop and execute its business plan are subject to the risks and uncertainties associated with the Chapter 11 process. As a result of these risks and uncertainties, the number of the Company’s outstanding shares and shareholders, assets, liabilities, officers and/or directors could be significantly different following the outcome of the Chapter 11 proceedings, and the description of the Company’s operations, properties and capital plans included in this quarterly report may not accurately reflect its operations, properties and capital plans following the Chapter 11 process. Among other things, the Term Sheet referenced above contemplates that all outstanding common and preferred stock will be cancelled and that the holders thereof will not have any interest in the Company under the contemplated plan of reorganization. Also, among other things and subject to certain exceptions, under the Bankruptcy Code, the Company may assume, assign, or reject certain executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a pre-petition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves the Company of performing its future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a pre-petition general unsecured claim for damages caused by such deemed breach. Counterparties to such rejected contracts or leases may assert unsecured claims in the Bankruptcy Court against the applicable Company’s estate for such damages. Generally, the assumption of an executory contract or unexpired lease requires the Company to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance. Accordingly, any description of an executory contract or unexpired lease with the Company in this quarterly r eport, including where applicable a quantification of the Company’s obligations under any such executory contract or unexpired lease with the Company is qualified by any overriding rejection rights the Company has under the Bankruptcy Code. Further, nothing herein is or shall be deemed an admission with respect to any claim amounts or calculations arising from the rejection of any executory contract or unexpired lease and the Company expressly preserves all of its rights with respect thereto. There can be no assurances regarding the Company’s ability to successfully develop, confirm and consummate one or more plans of reorganization or other alternative restructuring transactions, including a sale of all or substantially all of its assets that satisfies the conditions of the Bankruptcy Code and is authorized by the Bankruptcy Court.

Credit Facility

Credit Facility	9 Months Ended
	Sep. 30, 2015
Credit Facility.
Credit Facility	4. Credit Facility As of September 30, 2015, the Company had a credit agreement (the “Credit Agreement”) in place ( $33,500 borrowing base) with an outstanding balance of $36,886 , which resulted in a borrowing base deficiency of $3,386 . The Company has historically utilized its credit facilities to fund the development of the Catalina Unit and other non-operated projects in the Atlantic Rim, and development projects on the Pinedale Anticline in the Green River Basin of Wyoming. The Credit Agreement is collateralized by the Company’s natural gas and oil producing properties. Any balance outstanding under the original terms of the credit facility was due on August 29, 2017 , however, the C ompany is currently in default due to various events of default discussed below, including the Company’s Chapter 11 proceedings . Under the Credit Agreement, the Company is subject to both financial and non-financial covenants. The financial covenants, as defined in the Credit Agreement, include maintaining (i) a current ratio of 1.0 to 1.0; (ii) a ratio of earnings before interest, taxes, depreciation, depletion, amortization, exploration and other non-cash items (“EBITDAX”) to interest plus dividends of greater than 1.5 to 1.0; and (iii) a funded debt, less unencumbered cash, to EBITDAX ratio of less than 4.0 to 1.0. As of September 30 , 2015 , the Company was in violation of each of the aforementioned financial covenants and had also previously triggered two additional events of default, under the Credit Agreement: (1) the Company’s independent registered public accounting firm included a going concern explanatory paragraph in its audit opinion in our consolidated financial statements for the year ended December 31, 2014, and (2) the Company had not fully paid its ad valorem taxes assessed in 2014 (which were due in May 2015) for certain of its properties. The Company has shown the outstanding balance under the credit facility as a current liability on the consolidated balance sheets as of September 30, 2015 and December 31, 2014 as a result of these violations and the lender’s right to declare and event of default, terminate the remaining commitment and accelerate all principal and interest outstanding. As of September 30, 2015, borrowings under the credit facility incurred interest daily based on the Company’s interest rate election of either the Base Rate or LIBOR Rate. Under the Base Rate option, interest is calculated at an annual rate equal to the highest of (a) the base rate for Dollar loans for such day, Federal Funds rate for such day, plus 0.5% , or the LIBOR for such day plus (b) a margin ranging between 0.75% and 1.75% (annualized) depending on the level of funds borrowed. Under the LIBOR Rate option, interest is calculated at an annual rate equal to LIBOR, plus a margin ranging between 1.75% and 2.75% (annualized) depending on the level of funds borrowed. In addition to the standard interest charge, the Company is subject to an additional penalty rate of 2.0% (annualized) as a result of the aforementioned events of default. The average interest rate on the facility at September 30, 2015 was 5.35% . Under the Amendment, the Company may no longer elect the LIBOR Rate option. The interest will be converted to the Base Rate after the expiration of the current interest rate elections. For the three months ended September 30 , 2015 and 2014 , the Company incurred interest ex pense on its credit facilities of $563 a nd $ 6 ,603 , respectively, and for the nine months ended September 30, 2015 and 2014, $ 1,422 and $ 1,427 , respectively. Of the total interest incurred, the Company capitalized interest costs of $58 and $10 for the three months ended September 30, 2015 and 2014 , respectively, and $ 104 and $ 42 for the nine months ended September 30, 2015 and 2014, respectively. On November 5, 2015 the Company filed the Bankruptcy Petition. As described in Note 2 above, the Company had an agreement with its lenders for the use of cash collateral when the Bankruptcy Petition was filed, which, along with the Term Sheet, provides key terms for a plan of reorganization. This restructuring is ultimately dependent upon the Company’s ability to file, confirm and consummate a plan of reorganization with the Bankruptcy Court.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2015
Earnings Per Share
Earnings Per Share	3 . Earnings per share Basic earnings per share is calculated by dividing net income (loss) attributable to common stock by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share incorporates the treasury stock method to measure the dilutive impact of potential common stock equivalents by including the effect of outstanding vested and unvested stock options and unvested stock awards in the average number of shares of common stock outstanding during the period. Income (loss) attributable to common stock is calculated as net income (loss) less the cumulative dividends, including dividends in arrears, related to the Company’s Series A Preferred Stock, at a quarterly rate of $0.5781 per share. The Series A Preferred Stock dividends for the three and nine months ended September 30, 2015, which were undeclared and unpaid for both periods, totaled $930 and $2,792 , respectively. The Company declared and paid cash dividends of $930 and $2,792 for the three months and nine months ended September 30, 2014, respectively. The following is the calculation of basic and diluted weighted average shares outstanding and earnings per share of common stock for the periods indicated: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Net loss $ $ $ $ Preferred stock dividends (including undeclared and unpaid in 2015) Loss attributable to common stock $ $ $ $ Weighted average shares: Weighted average shares - basic Dilutive effect of stock options outstanding at the end of period — — — — Weighted average shares - fully diluted Net loss per share: Basic and diluted $ $ $ $ The following options and unvested restricted shares, which could be potentially dilutive in future periods, were not included in the computation of diluted net income per share because the effect would have been anti-dilutive for the periods indicated: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Anti-dilutive stock options and unvested stock awards

Derivative Instruments

Derivative Instruments	9 Months Ended
	Sep. 30, 2015
Derivative Instruments
Derivative Instruments	5. Derivative Instruments Commodity Contracts The Company’s primary market exposure is adverse fluctuations in the price of natural gas and, to a lesser extent, oil. The Company uses derivative instruments, primarily swaps and costless collars, to manage the price risk associated with its production, and the resulting impact on cash flow, net income and earnings per share. The Company does not use derivative instruments for speculative purposes. The extent of the Company’s risk management activities is controlled through policies and procedures that involve senior management and were approved by the Company’s board of directors (the “Board”). Senior management is responsible for proposing hedging recommendations, executing the approved hedging plan, overseeing the risk management process including methodologies used for valuation and risk measurement and presenting policy changes to the Board. The Board is responsible for approving risk management policies and for establishing the Company’s overall risk tolerance levels. The duration of the various derivative instruments depends on senior management’s view of market conditions, available contract prices and the Company’s operating strategy. As of September 30, 2015, in accordance with the Company’s current credit agreement, the Company has hedged at least 85% of its projected production through 2016 based on its third-party prepared reserve report at December 31, 2014. The Company accounts for its derivative instruments as mark-to-market derivative instruments. Under mark-to-market accounting, derivative instruments are recognized as either assets or liabilities at fair value on the Company’s consolidated balance sheets, and changes in fair value are recognized in the price risk management activities line on the consolidated statements of operations. Realized gains and losses resulting from the contract settlement of derivatives are also recorded in the price risk management activities line on the consolidated statements of operations. On the consolidated statements of cash flows, the cash flows from these instruments are classified as operating activities. Derivative instruments expose the Company to counterparty credit risk. The Company enters into these contracts with third parties and financial institutions that it considers to be creditworthy. In addition, the Company’s master netting agreements reduce credit risk by permitting the Company to net settle for transactions with the same counterparty. As with most derivative instruments, the Company’s derivative contracts contain provisions which may allow for another party to require security from the counterparty to ensure performance under the contract. The security may be in the form of, but not limited to, a letter of credit, security interest or a performance bond. As of September 30, 2015 , no party to any of the Company’s derivative contracts has required any form of security guarantee. The Company had the following commodity volumes under derivative contracts as of September 30, 2015 : Type of Contract Remaining Contractual Volume (Bbls) Term Price ($/Bbl) (1) Fixed price swap 10/15 -12/15 $ Total contracted oil volumes Type of Contract Remaining Contractual Volume (Mcf) Term Price ($/Mcf) (2) Three-way costless collar 10/15 -12/15 $ put (short) $ put (long) $ call (short) Total 2015 contracted volumes Fixed price swap 01/16 -12/16 $ Fixed price swap 01/16 -12/16 $ Total 2016 contracted volumes Total contracted natural gas volumes (1) New York Mercantile Exchange (“NYMEX”) Light Sweet Crude Oil (“WTI”). (2) NYMEX Henry Hub Natural Gas (“NG”). The table below contains a summary of all of the Company’s derivative positions reported on the consolidated balance sheet as of September 30, 2015 presented gross of any master netting arrangements: Balance Sheet Location As of September 30, 2015 As of December 31, 2014 Assets Commodity derivatives Assets from price risk management - current $ $ Assets from price risk management - long-term Total derivative assets $ $ T he before-tax effect of derivative instrum ents for the three and nine months ended September 30, 2015 and 2014 were as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Unrealized gain (loss) on commodity contracts (1) $ $ $ $ Realized gain (loss) on commodity contracts (1) Unrealized loss on interest rate swap (2) — — Realized loss on interest rate swap (2) — — Total activity for derivatives not designated as hedging instruments $ $ $ $ (1) Included in price risk management activities on the consolidated statements of operations. Price risk management activities totaled $2,476 and $1,633 for the three months ended September 30 , 2015 and 2014, and $5,042 and $(1,634) for the nine months ended September 30, 2015 and 2014, respectively. (2) Included in interest expense, net on the consolidated statements of operations. The Company has not entered into an interest rate swap agreement since its refinancing in August 2014. Refer to Note 6 for additional information regarding the valuation of the Company’s derivative instruments. Liquidation of Natural Gas and Oil Hedges In connection with the Company’s filing of the Bankruptcy Petition described above in Note 2, the Company has an agreement with the lenders under the Credit Agreement for the use of cash collateral. In connection with this agreement for the use of cash collateral, the Company liquidate d its 2016 natural gas hedges (total contracted volumes of 5,490,000 Mcf) on October 30, 2015 resulting in net cash proceeds of $8,047 . In connection with the sale of the Pinedale Anticline assets on July 31, 2015 (see Note 13), the Company liquidated a portion of its contracted oil volumes (3,000 Bbls) for cash proceeds of $129 , which was used to pay down its outstanding borrowings under the Credit Agreement .

Fair Value of Financial Instrum

Fair Value of Financial Instruments	9 Months Ended
	Sep. 30, 2015
Fair Value Measurements
Fair Value Measurements	6. Fair Value of Financial Instruments Assets and Liabilities Measured on a Recurring Basis The Company’s financial instruments, including cash and cash equivalents, accounts receivable and accounts payable are carried at cost, which approximates fair value due to the short-term maturity of these instruments. The recorded value of the Company’s credit facility also approximates fair value as it bears interest at a floating rate. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). A three-level valuation hierarchy has been established to allow readers to understand the transparency of inputs in the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: · Level 1—Quoted prices (unadjusted) for identical assets or liabilities in active markets. · Level 2—Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations whose inputs or significant value drivers are observable. · Level 3—Unobservable inputs that reflect the Company’s own assumptions. The following tables provides a summary of assets and liabilities measured at fair value on a recurring basis: Fair Value Measurements as of September 30, 2015 Level 1 Level 2 Level 3 Total Assets Derivative instruments - Commodity forward contracts $ — $ $ — $ Total assets at fair value $ — $ $ — $ Fair Value Measurements as of December 31, 2014 Level 1 Level 2 Level 3 Total Assets Derivative instruments - Commodity forward contracts $ — $ $ — $ Total assets at fair value $ — $ $ — $ The Company did not have any transfers of assets or liabilities between Level 1, Level 2 or Level 3 of the fair value measurement hierarchy during the three and nine months ended September 30 , 2015 . Derivative instruments The Company determines its estimates of the fair values of derivative instruments using a market approach based on several factors, including quoted prices in active markets, market-corroborated inputs, such as NYMEX forward-strip pricing, the credit rating of each counterparty, and the Company’s own credit rating. In consideration of counterparty credit risk, the Company assessed the possibility of whether each counterparty to the derivative would default by failing to make any contractually required payments. Additionally, when applicable the Company considers its own credit quality and financial resources and ability to meet its potential repayment obligations associated with the derivative transactions. At September 30, 2015 , the Company had various types of derivative instruments, which consists of swaps and costless collars. The natural gas and oil derivative markets are highly active. Although the Company’s economic hedges are valued using public indices, the instruments themselves are traded with third party counterparties and are not openly traded on an exchange. As such, the Company has classified these instruments as Level 2. Refer to Note 5 for additional information regarding the Company’s derivative instruments. Assets and liabilities measured on a non-recurring basis Proved oil and gas property costs are evaluated for impairment and reduced to fair value when there is an indication the carrying costs may not be recoverable. The fair value of impaired proved properties is determined based on quoted market prices in active markets, if available, or using Level 3 inputs and the income valuation technique, which converts future estimated cash flow amounts to a single present value amount, to measure the fair value of proved properties through an application of discount rates, price forecasts and operating and development cost assumptions selected by the Company’s management . As of September 30, 2015, there were no assets or liabilities measured at fair value on a non-recurring basis . Concentration of credit risk Financial instruments that potentially subject the Company to credit risk consist of accounts receivable and derivative financial instruments. Substantially all of the Company’s receivables are within the natural gas and oil industry, including those from a third party gas marketing company. Collectability is dependent upon the financial wherewithal of each counterparty as well as the general economic conditions of the industry. The receivables are not collateralized. The Company currently uses two counterparties for its derivative financial instruments. The Company continually reviews the credit worthiness of its counterparties, which are generally other energy companies or major financial institutions. In addition, the Company uses master netting agreements which allow the Company, in the event of default, to elect early termination of all contracts with the defaulting counterparty. If the Company chooses to elect early termination, all asset and liability positions with the defaulting counterparty would be “net settled” at the time of election. “Net settlement” refers to a process by which all transactions between counterparties are resolved into a single amount owed by one party to the other.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets	9 Months Ended
	Sep. 30, 2015
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets	7. Impairment of Long-Lived Assets The Company reviews the carrying values of its long-lived assets annually or whenever events or changes in circumstances indicate that such carrying values may not be recoverable. See Note 6 for discussion of the Company’s fair value methodology. Proved property impairment expense was $ 0 for both the three months ended September 30 , 2015 and 2014 , and $ 21,504 and $765 for the nine months ended September 30 , 2015 and 2014, respectively. The impairment expense recorded in the second quarter of 2015, included $21,030 of expense related to its Pinedale Anticline assets as a result of the sale of these assets on July 31, 2015 (see Note 13 for discussion of the Pinedale Anticline asset sale). The impairment was determined based on the net book value for the Pinedale Anticline assets, reduced by the expected net sale proceeds of the assets a fter the associated expected selling costs. The remaining impairment expense recognized during the first nine months of 2015 was primarily due to an increase in estimated field abandonment costs (and thus the associated asset carrying value) at the Company’s Main Fork Unit property. In 2014, the Company wrote-off a non-operated property in the Atlantic Rim, as production from the wells at this property had been limited and the operator began plugging and abandoning these wells . The Company also expensed $ 23 and $355 during the three months ended September 30, 2015 and 2014, respectively, and $320 and $670 during the nine months ended September 30, 2015 and 2014, respectively, related to expiring undeveloped acreage in Wyoming, as the Company determined that these leases would not be developed before their expiration.

Compensation Plans

Compensation Plans	9 Months Ended
	Sep. 30, 2015
Compensation Plans
Compensation Plans	8. Compensation Plans The Company recognized stock-based compensation expense totaling $82 and $368 for the three and nine months ended September 30, 2015, respectively, and $218 and $601 for the three and nine months ended September 30, 2014, respectively. Compensation expense related to stock options is calculated using the Black-Scholes valuation model. Expected volatilities are based on the historical volatility of the Company’s common stock over a period consistent with that of the expected terms of the options. The expected terms of the options are estimated based on factors such as vesting periods, contractual expiration dates, historical trends in the Company’s common stock price and historical exercise behavior. The risk-free rates for periods within the contractual life of the options are based on the yields of U.S. Treasury instruments with terms comparable to the estimated option terms. A summary of stock option activity under the Company’s various stock option plans as of September 30, 2015 and changes during the nine months ended September 30, 2015 is presented below: Weighted- Average Exercise Shares Price Options: Outstanding at January 1, 2015 $ Cancelled/expired $ Outstanding at September 30, 2015 $ Exercisable at September 30, 2015 $ The Company measures the fair value of stock awards based upon the fair market value of its common stock on the date of grant and recognizes the resulting compensation expense ratably over the associated service period, which is generally the vesting term of the stock awards. The Company recognizes the compensation expenses, net of an estimated forfeiture rate, for only those shares expected to vest. The Company typically estimates forfeiture rates based on historical experience, while also considering the duration of the vesting term of the award. Nonvested stock awards as of September 30, 2015 and changes during the nine months ended September 30, 2015 were as follows: Weighted- Average Grant Date Shares Fair Value Outstanding at January 1, 2015 $ Granted $ Vested $ Forfeited/returned $ Nonvested at September 30, 2015 $ In March 2014, the Company’s board of directors granted long-term incentive shares to its chief executive officer (“CEO”) in conjunction with his appointment as an officer. The Compensation Committee of the Board approved two restricted stock awards, under which the Company granted the CEO an aggregate of 528,634 shares of restricted stock, which are included in the table above. One -third of the shares awarded will vest at the end of three years if the CEO is continuously employed by the Company during such period, and the remaining two -thirds of the shares awarded will vest at the end of three years if the CEO is continuously employed by the Company during such period and certain performance goals related to reserve growth and the Company’s common stock price are achieved, as defined for purposes of the awards. The Company used a simplified binomial model to estimate the fair value of the performance and market based component of the award. The Company’s stock-bas ed compensation for the three and nine months ended September 30, 2015 includes approximately $56 and $170 , respectively, and $58 and $122 for the three and nine months ended September 30, 2014, respectively, related to these plans.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2015
Income Taxes
Income Taxes	9. Income Taxes The Company is required to record income tax expense for financial reporting purposes and apply an estimated effective tax rate for calculating income tax provisions for interim periods. The Company has not recorded any income tax expense/(benefit) for the three and nine months ended September 30, 2015 as a result of the Company recording a valuation allowance on its net deferred tax assets due to the uncertainty of the realization of these assets. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the use of such net operatin g losses are allowed . The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of September 30, 2015 , the Company made no provision for interest or penalties related to uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdiction and various states. There are currently no federal or state income tax examinations of the Company underway for these jurisdictions. Furthermore, the Company is no longer subject to U.S. federal income tax examinations by the Internal Revenue Service for tax years before 2012 and for state and local tax authorities for tax years before 201 1 .

Equity

Equity	9 Months Ended
	Sep. 30, 2015
Text Block [Abstract]
Equity	10. Equity Preferred stock In 2007, the stockholders of the Company approved an amendment to the Company’s Articles of Incorporation to provide for the issuance of 10,000,000 shares of preferred stock, and the Company subsequently completed a public offering of 1,610,000 shares of 9.25% Series A Cumulative Preferred Stock (the “Series A Preferred Stock”) at a price of $25.00 per share. Holders of the Series A Preferred Stock are entitled to receive, when and as declared by the Company’s Board of Directors, dividends at a rate of 9.25% per annum ( $2.3125 per annum per share)(the “Dividend Rate”). The Series A Preferred Stock does not have any stated maturity date and will not be subject to any sinking fund or mandatory redemption provisions except, under certain circumstances, upon a change of ownership or control. The Company may redeem the Series A Preferred Stock for cash at its option, in whole or from time to time in part, at a redemption price of $25.00 per share, plus accrued and unpaid dividends (whether or not earned or declared) to the redemption date. The shares of Series A Preferred Stock are classified outside of permanent equity on the consolidated balance sheets due to the change of control redemption provision applicable to such shares. Following a change of ownership or control of the Company by a person or entity in which the common stock of the Company is no longer traded on a national exchange, the Company will be required to redeem the Series A Preferred Stock within 90 days after the date on which the change of ownership or control occurred for cash. In the event of liquidation, the holders of the Series A Preferred Stock will have the right to receive $25.00 per share, plus all accrued and unpaid dividends, before any payments are made to the holders of the Company’s common stock. If the Company fails to pay cash dividends on the Series A Preferred Stock in full for any six quarterly dividend periods, whether consecutive or non-consecutive (a “Dividend Default”), then: (i) The dividend rate increases to the penalty rate of 12% per annum, commencing on the first day after the dividend payment date on which a Dividend Default occurs and for each subsequent dividend payment date thereafter until the second consecutive dividend payment date following such time as the Company has paid all accumulated accrued and unpaid dividends on the Series A Preferred Shares in full in cash, at which time the dividend rate will revert to the standard rate of 9.25% per annum. (ii) On the next dividend payment date following the dividend payment date on which a Dividend Default occurs, and continuing until the second consecutive dividend payment date following such time as the Company has paid all accumulated accrued and unpaid dividends on the Series A Preferred Shares in full in cash, the Company must pay all dividends on the Series A Preferred Shares, including all accumulated accrued and unpaid dividends, on each dividend payment date either in cash or, if not paid in cash by issuing to the holders thereof (A) if its common shares are then subject to a National Market Listing, as defined, fully-tradable, registered common shares with a value equal to the amount of dividends being paid, calculated based on the then current market value of the common shares, plus cash in lieu of any fractional common share; or (B) if the common shares are not then subject to a value equal to the amount of dividends being paid, calculated based on the stated $25.00 liquidation preference of the Series A Preferred Shares, plus cash in lieu of any fractional Series A Preferred Share (and dividends on any such Series A Preferred Shares upon issuance shall accrue at the penalty rate of 12% per annum and accumulate until such time as the dividend rate shall revert to the stated rate of 9.25% per annum). In 2015, the Board elected to suspend the Series A Preferred Stock dividend payment for the quarter ended March 31 , 2015 and to suspend the dividend indefinitely beginning with the quarter ended June 30, 2015. As of September 30, 2015, the total arrearage on the Company’s Series A Preferred Stock was $2,792 , or $1.1562 per share. Holders of the Series A Preferred Stock generally have limited voting rights. However, if a Dividend Default occurs, or if the Company fails to maintain a National Market Listing for the Series A Preferred Stock, the holders of the Series A Preferred Stock, voting separately as a class, will have the right to elect two directors to serve on the Board in addition to those directors then serving on the Board until such time as the National Market Listing is obtained or the dividend arrearage is eliminated. As a result of the Company’s Bankruptcy Case, the Series A Preferred Stock was delisted from Nasdaq in November 2015 and no longer met the National Market Listing requirement. The Company has a significant amount of indebtedness that is senior to its existing Series A Preferred Stock in its capital structure. As noted in Note 2 above, the Term Sheet contemplates that the Company’s Series A Preferred Stock will be cancelled and that the holders thereof will receive nothing in connection with the Company’s reorganization. Common Stock The Company has a significant amount of indebtedness , and its Series A Preferred Stock, that are both senior to its existing common stock in its capital structures As noted in Note 2 above, the Term Sheet contemplates that the Company’s common stock will be cancelled and that the holders thereof will receive nothing in connection with the Company’s reorganization and the holders in the shares receive nothing .

Termination of Contemplated Acq

Termination of Contemplated Acquisition of Atlantic Rim Assets	9 Months Ended
	Sep. 30, 2015
Termination of Contemplated Acquisition of Atlantic Rim Assets
Termination of Contemplated Acquisition of Atlantic Rim Assets	11. Termination of Contemplated Acquisition of Atlantic Rim Assets On June 16, 2015, the Company entered into Purchase and Sale Agreements (the “PSAs”) with Warren Resources, Inc. and its subsidiaries (collectively, the “Seller”), pursuant to which the Company had planned to acquire certain of the Seller’s interests primarily adjacent to the Company’s Catalina Unit. The transaction was subject to, among other things, the Company’s ability to obtain significant financing for the transaction and was to close before September 1, 2015. The Company was unable to obtain sufficient debt funding for the acquisition . The Company revised its offer for the properties on October 22, 2015, the Seller indicated that it would not accept the revised offer and negotiations were terminated .

Contingencies

Contingencies	9 Months Ended
	Sep. 30, 2015
Commitments and Contingencies
Contingencies	12. Contingencies Legal proceedings From time to time, the Company is involved in various legal proceedings, which are subject to the uncertainties inherent in any litigation, including the matters below. The Company is defending itself vigorously in all such matters, and while the ultimate outcome and impact of any proceeding cannot be predicted with certainty, management believes that the resolution of any proceeding will not have a material adverse effect on the Company’s financial condition or results of operations. Gas-to-liquids project In May 2014, the Company entered into a letter agreement (“Letter Agreement”) to jointly initiate the development, construction and operations of a gas-to-liquids ("GTL") plant to be located in Wyoming. Under the terms of the Letter Agreement, the Company advanced total of $1,362 , of which $202 was advanced during the first quarter of 2015. These funds were advanced on behalf of Wyoming GTL, LLC and its affiliate (collectively "WYGTL") to partially fund the feasibility studies and completion of the initial engineering and development plans for the GTL plant. In return, WYGTL assigned all development and engineering plans, contracts, rights, technical relationships, among other rights (collectively, the "Rights") to the Company. The Letter Agreement expired effective January 31, 2015, as the Company was unable to agree on terms for a definitive agreement with WYGTL, as contemplated by the Letter Agreement. In accordance with the provisions of the Letter Agreement, the Company requested WYGTL to repay to the Company the total amount advanced, or $1,362 . The Company filed a lawsuit in the State of Colorado on March 24, 2015, against WYGTL for breach of the Letter Agreement terms, seeking recovery of the total amount advanced under the Letter Agreement. On April 14, 2015, WYGTL filed a lawsuit against the Company in the U.S. District Court for Colorado, an action entitled Alan Eugene Humphrey and Wyoming GTL, LLC v. Escalera Resources Co., alleging the Company breached its contract with WYGTL, among other claims. The Company does not believe this case has merit and is defending the case vigorously. The Company subsequently filed counterclaims against WYGTL on May 5, 2015 in United States District Court seeking recovery of the total advances, and dismissed its original action filed in the State of Colorado. As the future collection of this receivable from WYGTL is uncertain, the Company recorded a provision to fully reserve for the amount advanced for this project during the first quarter of 2015, which totaled $202 . As a result of the Company’s Bankruptcy Case, the GTL related litigation has been stayed. Former employee lawsuits On January 29, 2015, two former employees each filed claims against the Company in the District Court of Harris, Texas, which generally assert breach of contract in connection with their termination from the Company (actions known as William A. Sidwell, III v. Escalera Resources Co. and Gregory Whiting v. Escalera Resources Co.). In April 2015, the Company filed certain counterclaims, including breach of fiduciary duty and business disparagement, against the former employees. A trial has been set for May 2016 in one of these suits. The Company does not believe the plaintiffs’ cases have merit and intends to vigorously defend the cases and pursue its counterclaims. As a result of the Company’s Bankruptcy Case, the former employee lawsuits have been stayed.

Divestitures

Divestitures	9 Months Ended
	Sep. 30, 2015
Divestitures
Divestitures	13. Divestitures On July 31, 2015, the Company completed the sale of its interests in the Mesa Units located on the Pinedale Anticline in southwestern Wyoming. The sale resulted from the Company’s efforts to reduce its debt levels, as agreed upon with the credit facility ’s lenders. The assets were sold for $12,000 , less closing adjustments, of which cash proceeds of $10,500 were repaid on the Company’s credit facility following the closing of the transaction. The effective date of the sale was April 1, 2015. The results of operations for the three and nine months ended September 30, 2015 reflect revenues and expenses related to these properties through July 31, 2015. Total producing assets of $48,101 , net of the previously recognized impairment, and accumulated depreciation, depletion and amortization of ($35,633) were previously reclassified to assets held for sale during the second quarter 2015.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2015
Subsequent Events [Abstract]
Subsequent Events	14. Subsequent Events See Note 2, “Voluntary Reorganization under Chapter 11 Proceedings” for information on the Company’s Voluntary Reorganization under Chapter 11 and proposed key terms for a plan of reorganization, Note 5, “Derivative Instruments” for information on the termination of the Company’s derivative contracts as a result of the Bankruptcy Petition, and Note 10, “Equity” for informat ion on the likely impact to the Company’s equity holders.

Summary of Significant Accoun20

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2015
Summary of Significant Accounting Policies
Basis of Presentation	Basis of presentation The accompanying unaudited interim consolidated financial statements and related notes were prepared by Escalera Resources Co. (“Escalera Resources” or the “Company”), in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and were prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in the annual audited consolidated financial statements have been condensed or omitted as allowed by such rules and regulations. These consolidated financial statements include all of the adjustments, which, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations. All such adjustments are of a normal recurring nature only. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year. The accounting policies followed by the Company are set forth in Note 1 to the Company’s consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2014, and are supplemented in the notes to this Quarterly Report on Form 10-Q. The unaudited interim consolidated financial statements presented herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on April 15, 2015
Ability to Continue as a Going Concern	Ability to Continue as a Going Concern The consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities and commitments in the normal course of business. The consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company’s long-term debt is reflected as a current liability on the consolidated balance sheets (see Note 4) as a result of several defaults under the Company’s credit facility that have occurred since the fourth quarter of 2014. As described further in Note 2 below, on November 5, 2015 the Company filed a voluntary petition (the “Bankruptcy Petition”) in the United States Bankruptcy Court for the District of Colorado (the “Bankruptcy Court”) seeking relief under the provisions of Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) . The Company’s filing of the Bankruptcy Petition constitutes an additional event of default under the Company’s credit facility. As noted below, the Company anticipates filing a plan of reorganization by November 24, 2015, however, there can be no assurance regarding the Company’s ability to successfully confirm and consummate a plan of reorganization, or any other alternative restructuring transactions, including a sale of all or substantially all of its assets that satisfies the conditions of the Bankruptcy Code and is authorized by the Bankruptcy Court.
Principles of Consolidation	Principles of consolidation The unaudited interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Petrosearch Energy Corporation and Eastern Washakie Midstream LLC (“EWM”). The Company has an agreement with EWM under which the Company pays a fee to EWM to gather, compress and transport gas produced at the Catalina Unit, in the eastern Washakie Basin of Wyoming. This fee is eliminated in consolidation.
Recent Accounting Pronouncements	Recent accounting pronouncements In August 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-15, “Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements”, which is effective beginning in the first quarter 2016, and will be applied retrospectively. ASU 2015-15 amends ASU 2015-03 as the previous standard did not address presentation or subsequent measurement of debt issuance costs related to line-of-credit agreements. The Company does not expect the adoptions of this ASU to have a material impact on its consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, "Simplifying the Measurement of Inventory”, which is effective beginning in the first quarter of 2017. ASU 2015-11 requires that inventory recorded using the first-in, first-out method be measured at the lower of cost or net realizable value, which is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company is currently evaluating the impact of ASU 2015-11 on its inventory valuation and results of operations.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2015
Earnings Per Share
Calculation of Basic and Diluted Weighted Average Shares Outstanding and Earnings Per Share of Common Stock	For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Net loss $ $ $ $ Preferred stock dividends (including undeclared and unpaid in 2015) Loss attributable to common stock $ $ $ $ Weighted average shares: Weighted average shares - basic Dilutive effect of stock options outstanding at the end of period — — — — Weighted average shares - fully diluted Net loss per share: Basic and diluted $ $ $ $
Effect of Anti-Dilutive Shares	For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Anti-dilutive stock options and unvested stock awards

Derivative Instruments (Tables)

Derivative Instruments (Tables)	9 Months Ended
	Sep. 30, 2015
Derivative Instruments
Commodity Volumes Under Derivative Contracts	Type of Contract Remaining Contractual Volume (Bbls) Term Price ($/Bbl) (1) Fixed price swap 10/15 -12/15 $ Total contracted oil volumes Type of Contract Remaining Contractual Volume (Mcf) Term Price ($/Mcf) (2) Three-way costless collar 10/15 -12/15 $ put (short) $ put (long) $ call (short) Total 2015 contracted volumes Fixed price swap 01/16 -12/16 $ Fixed price swap 01/16 -12/16 $ Total 2016 contracted volumes Total contracted natural gas volumes (1) New York Mercantile Exchange (“NYMEX”) Light Sweet Crude Oil (“WTI”). NYMEX Henry Hub Natural Gas (“NG”).
Summary of Derivatives on Consolidated Balance Sheet	Balance Sheet Location As of September 30, 2015 As of December 31, 2014 Assets Commodity derivatives Assets from price risk management - current $ $ Assets from price risk management - long-term Total derivative assets $ $
Before-tax Effect of Derivative Instruments Not Designated as Hedging Instruments on Consolidated Statements of Operations	For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Unrealized gain (loss) on commodity contracts (1) $ $ $ $ Realized gain (loss) on commodity contracts (1) Unrealized loss on interest rate swap (2) — — Realized loss on interest rate swap (2) — — Total activity for derivatives not designated as hedging instruments $ $ $ $ (1) Included in price risk management activities on the consolidated statements of operations. Price risk management activities totaled $2,476 and $1,633 for the three months ended September 30 , 2015 and 2014, and $5,042 and $(1,634) for the nine months ended September 30, 2015 and 2014, respectively. (2) Included in interest expense, net on the consolidated statements of operations. The Company has not entered into an interest rate swap agreement since its refinancing in August 2014.

Fair Value of Financial Instr23

Fair Value of Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2015
Fair Value Measurements
Summary of Fair Values of Assets and Liabilities on a Recurring Basis	Fair Value Measurements as of September 30, 2015 Level 1 Level 2 Level 3 Total Assets Derivative instruments - Commodity forward contracts $ — $ $ — $ Total assets at fair value $ — $ $ — $ Fair Value Measurements as of December 31, 2014 Level 1 Level 2 Level 3 Total Assets Derivative instruments - Commodity forward contracts $ — $ $ — $ Total assets at fair value $ — $ $ — $

Compensation Plans (Tables)

Compensation Plans (Tables)	9 Months Ended
	Sep. 30, 2015
Compensation Plans
Summary of option activity	Weighted- Average Exercise Shares Price Options: Outstanding at January 1, 2015 $ Cancelled/expired $ Outstanding at September 30, 2015 $ Exercisable at September 30, 2015 $
Summary of Nonvested Stock Awards	Weighted- Average Grant Date Shares Fair Value Outstanding at January 1, 2015 $ Granted $ Vested $ Forfeited/returned $ Nonvested at September 30, 2015 $

Summary of Significant Accoun25

Summary of Significant Accounting Policies (Details) $ in Thousands	Sep. 30, 2015USD ($)
Credit Facilities
Borrowing base deficiency	$ 3,386

Earnings Per Share (EPS) (Detai

Earnings Per Share (EPS) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net loss	$ (2,280)	$ (2,521)	$ (31,439)	$ (9,989)
Preferred stock dividends (including undeclared and unpaid in 2015)	(930)	(930)	(2,792)	(2,792)
Loss attributable to common stock	$ (3,210)	$ (3,451)	$ (34,231)	$ (12,781)
Weighted average shares outstanding:
Basic	14,302,801	14,262,170	14,284,817	13,363,747
Weighted average shares - fully diluted	14,302,801	14,262,170	14,284,817	13,363,747
Net loss per share:
Basic and diluted	$ (0.22)	$ (0.24)	$ (2.40)	$ (0.96)
Series A Cumulative Preferred Stock
Preferred stock dividends declared, per share			$ 0.5781
Unpaid dividend	$ 930		$ 2,792
Preferred stock dividends paid		$ 930		$ 2,792

Earnings Per Share (AntiDilutiv

Earnings Per Share (AntiDilutive) (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Effect of anti-dilutive shares
Anti-dilutive stock options and unvested stock awards	77,009	114,245	63,242	116,322

Credit Facility (Details)

Credit Facility (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)item	Sep. 30, 2014USD ($)
Credit Facility
Interest expense	$ 621	$ 592	$ 1,617	$ 1,397
Interest capitalized			104	42
Credit Facilities
Credit Facility
Amount available for borrowing	33,500		33,500
Credit facility outstanding amount	36,886		36,886
Borrowing base deficiency	$ 3,386		$ 3,386
Current ratio of the company			1
Ratio of EBITDAX			1.5
Funded debt to EBITDAX ratio			4
Number of default events | item			2
Penalty interest rate (as a percent)			2.00%
Average interest rate (as a percent)	5.35%		5.35%
Interest expense	$ 563	6,603	$ 1,422	1,427
Interest capitalized	$ 58	$ 10	$ 104	$ 42
Federal Funds Rate | Credit Facilities
Credit Facility
Margin on base interest rate (as a percent)			0.50%
Minimum | Base Rate LIBOR | Credit Facilities
Credit Facility
Margin on base interest rate (as a percent)			0.75%
Minimum | LIBOR | Credit Facilities
Credit Facility
Margin on base interest rate (as a percent)			1.75%
Maximum | Base Rate LIBOR | Credit Facilities
Credit Facility
Margin on base interest rate (as a percent)			1.75%
Maximum | LIBOR | Credit Facilities
Credit Facility
Margin on base interest rate (as a percent)			2.75%

Derivative Instruments (Volume)

Derivative Instruments (Volume) (Details)	9 Months Ended
	Sep. 30, 2015$ / bbl$ / McfMcfbbl
Derivative
Percentage of projected production hedged	85.00%
Energy derivative contract | NYMEX Light Sweet Crude Oil
Derivative
Remaining Contractual Volume | bbl	3,300
Energy derivative contract | NYMEX Light Sweet Crude Oil | Fixed Price Swap-91.44
Derivative
Remaining Contractual Volume | bbl	3,300
Contract price | $ / bbl	91.44
Energy derivative contract | Gas
Derivative
Remaining Contractual Volume	7,140,000
Energy derivative contract | Gas | Fixed Price Swap
Derivative
Remaining Contractual Volume	5,490,000
Energy derivative contract | Gas | Fixed Price Swap-4.07
Derivative
Remaining Contractual Volume	1,830,000
Contract price | $ / Mcf	4.07
Energy derivative contract | Gas | Fixed Price Swap-4.15
Derivative
Remaining Contractual Volume	3,660,000
Contract price | $ / Mcf	4.15
Energy derivative contract | Gas | Three way Costless Collar
Derivative
Remaining Contractual Volume	1,650,000
Energy derivative contract | Gas | Short | Put
Derivative
Contract price | $ / Mcf	3.25
Energy derivative contract | Gas | Short | Call
Derivative
Contract price | $ / Mcf	4.08
Energy derivative contract | Gas | Long | Put
Derivative
Contract price | $ / Mcf	3.85

Derivative Instruments (Balance

Derivative Instruments (BalanceSheet) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Assets
Total gross derivative assets	$ 8,352	$ 6,988
Energy derivative contract | Assets from price risk management - current
Assets
Gross derivative position, assets	6,738	3,546
Energy derivative contract | Assets from price risk management - long term
Assets
Gross derivative position, assets	$ 1,614	$ 3,442

Derivative Instruments (Income)

Derivative Instruments (Income) (Details) $ in Thousands		Oct. 30, 2015USD ($)Mcf	Jul. 31, 2015USD ($)bbl	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)
Before-tax effect of derivative instruments not designated as hedging instruments on the consolidated statements of operations
Total activity for derivatives not designated as hedging instruments				$ 2,476	$ 1,588	$ 5,042	$ (1,817)
Price risk management activities				2,476	1,633	5,042	(1,634)
Energy derivative contract
Before-tax effect of derivative instruments not designated as hedging instruments on the consolidated statements of operations
Price risk management activities				2,476	1,633	5,042	(1,634)
Energy derivative contract | Not Designated as Hedging Instrument
Before-tax effect of derivative instruments not designated as hedging instruments on the consolidated statements of operations
Unrealized gain (loss) on commodity contracts	[1]			1,181	175	1,364	(1,617)
Realized gain (loss) on commodity contracts	[1]			$ 1,295	1,458	$ 3,678	(17)
Interest Rate Swap | Not Designated as Hedging Instrument
Before-tax effect of derivative instruments not designated as hedging instruments on the consolidated statements of operations
Unrealized loss on interest rate swap	[2]				315		312
Realized loss on interest rate swap	[2]				$ (360)		$ (495)
Gas | Subsequent Event | Energy derivative contract
Before-tax effect of derivative instruments not designated as hedging instruments on the consolidated statements of operations
Volume sold | Mcf		5,490,000
Cash received on derivative sale		$ 8,047
NYMEX Light Sweet Crude Oil | Energy derivative contract
Before-tax effect of derivative instruments not designated as hedging instruments on the consolidated statements of operations
Volume sold | bbl			3,000
Cash received on derivative sale			$ 129
[1]	Included in price risk management activities on the consolidated statements of operations. Price risk management activities totaled $2,476 and $1,633 for the three months ended September 30, 2015 and
[2]	Included in interest expense, net on the consolidated statements of operations. The Company has not entered into an interest rate swap agreement since its refinancing in August 2014.

Fair Value of Financial Instr32

Fair Value of Financial Instruments (Details) $ in Thousands	Sep. 30, 2015USD ($)item	Dec. 31, 2014USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Number of counterparties for derivative financial instruments | item	2
Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets at fair value	$ 8,352	$ 6,988
Fair Value, Measurements, Recurring | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets at fair value	8,352	6,988
Commodity Forward Contracts | Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative instruments	8,352	6,988
Commodity Forward Contracts | Fair Value, Measurements, Recurring | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative instruments	$ 8,352	$ 6,988

Impairment of Long-Lived Asse33

Impairment of Long-Lived Assets (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Jul. 31, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Impaired Long-Lived Assets Held and Used [Line Items]
Impairment of proved properties		$ 0	$ 0	$ 21,504	$ 765
Impairment expense		23	355	21,824	1,435
Impairment of unproved properties		$ 23	$ 355	$ 320	$ 670
Disposed of by sale | Pinedale
Impaired Long-Lived Assets Held and Used [Line Items]
Impairment expense	$ 21,030

Compensation Plans (Options) (D

Compensation Plans (Options) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Stock-based compensation expense	$ 82	$ 218	$ 368	$ 601
Stock Options
Options, Number of shares
Outstanding, beginning balance (in shares)			369,543
Cancelled/expired (in shares)			(143,553)
Outstanding, ending balance (in shares)	225,990		225,990
Exercisable, ending balance (in shares)	76,787		76,787
Options, Weighted-Average Exercise Price
Outstanding, beginning balance (in dollars per share)			$ 2.36
Cancelled/expired (in dollars per share)			2.89
Outstanding, ending balance (in dollars per share)	$ 1.91		1.91
Exercisable, ending balance (in dollars per share)	$ 4.42		$ 4.42

Compensation Plans (ResStock) (

Compensation Plans (ResStock) (Details)	9 Months Ended
	Sep. 30, 2015$ / sharesshares
Nonvested stock awards, shares
Outstanding, beginning balance (in shares) | shares	814,121
Granted (in shares) | shares	40,385
Vested (in shares) | shares	(99,685)
Forfeited/returned (in shares) | shares	(85,481)
Nonvested, ending balance (in shares) | shares	669,340
Nonvested stock awards, per shares
Outstanding, beginning balance (in dollars per share)	$ 2.30
Granted (in dollars per share)	0.33
Vested (in dollars per share)	2.42
Forfeited/returned (in dollars per share)	2.55
Nonvested, ending balance (in dollars per share)	$ 2.13

Compensation Plans (LT Incent)

Compensation Plans (LT Incent) (Details) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Mar. 31, 2014itemshares	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)shares	Sep. 30, 2014USD ($)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted (in shares) | shares				40,385
Stock-based compensation expense		$ 82	$ 218	$ 368	$ 601
Restricted Stock | Long Term Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of plans | item	2
Granted (in shares) | shares	528,634
Stock-based compensation expense		$ 56	$ 58	$ 170	$ 122
Restricted Stock | Long Term Incentive Plan | Continuous Employment
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting rights (as a percent)	33.00%
Award vesting period	3 years
Restricted Stock | Long Term Incentive Plan | Increase in Company's Adjusted Net Asset Value
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting rights (as a percent)	67.00%
Award vesting period	3 years

Income Taxes (Details)

Income Taxes (Details) $ in Thousands	Sep. 30, 2015USD ($)
Uncertain tax positions
Provision for interest and penalties related to uncertain tax positions	$ 0

Equity (Details)

Equity (Details) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015USD ($)$ / sharesshares	Sep. 30, 2015USD ($)item$ / sharesshares	Dec. 31, 2014shares
Equity
Preferred stock, shares authorized	10,000,000	10,000,000	10,000,000
Preferred stock, shares issued	1,610,000	1,610,000	1,610,000
Series A Cumulative Preferred Stock
Equity
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	1,610,000	1,610,000
Price of Series A Preferred Stock | $ / shares	$ 25	$ 25
Percentage of Series A Cumulative Preferred Stock		9.25%
Preferred Stock, dividend rate | $ / shares		$ 2.3125
Redemption period		90 days
Number of quarters used to determine whether dividend penalty rate is used | item		6
Preferred stock dividend penalty rate		12.00%
Unpaid dividend | $	$ 930	$ 2,792
Total unpaid dividend (in dollars per share) | $ / shares		$ 1.1562
Number of directors allowed under default | item		2

Contingencies (Details)

Contingencies (Details) $ in Thousands	Jan. 29, 2015item	Mar. 31, 2015USD ($)	Sep. 30, 2015USD ($)
Loss Contingencies [Line Items]
Reserve expense for advance			$ 202
Breach of Contract
Loss Contingencies [Line Items]
Number of former employees | item	2
Wyoming GTL, LLC | Breach of Contract
Loss Contingencies [Line Items]
Total advance to affiliates			1,362
Advance to affiliates		$ 202
Total reserve			$ 1,362
Reserve expense for advance		$ 202

Divestitures (Details)

Divestitures (Details) - USD ($) $ in Thousands	Jul. 31, 2015	Sep. 30, 2015	Sep. 30, 2014
Divestitures
Repayments on credit facility		$ 10,500	$ 2,435
Disposed of by sale | Pinedale
Divestitures
Proceeds from the divestiture	$ 12,000
Oil and gas properties and equipment, successful efforts method
Developed properties	48,101
Accumulated depreciation, depletion and amortization	(35,633)
Credit Facilities | Disposed of by sale | Pinedale
Divestitures
Repayments on credit facility	$ 10,500