Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2015 | Nov. 06, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 | |
Current Fiscal Year End Date | --06-30 | |
Entity Central Index Key | 61,398 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Registrant Name | MAGELLAN PETROLEUM CORP /DE/ | |
Entity Common Stock Shares Outstanding | 5,702,532 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 658 | $ 1,051 |
Securities available-for-sale | 1,901 | 4,230 |
Accounts receivable — trade | 331 | 420 |
Accounts receivable — working interest partners and other | 234 | 130 |
Inventories | 578 | 651 |
Prepaid and other assets | 2,120 | 2,100 |
Total current assets | 5,822 | 8,582 |
PROPERTY AND EQUIPMENT, NET (SUCCESSFUL EFFORTS METHOD): | ||
Proved oil and gas properties | 20,851 | 20,857 |
Less accumulated depletion, depreciation, and amortization | (4,481) | (4,355) |
Unproved oil and gas properties | 700 | 709 |
Wells in progress | 19,951 | 19,660 |
Land, buildings, and equipment (net of accumulated depreciation of $711 and $682 as of September 30, 2015, and June 30, 2015, respectively) | 172 | 202 |
Net property and equipment | 37,193 | 37,073 |
OTHER NON-CURRENT ASSETS: | ||
Goodwill | 500 | 500 |
Other long term assets | 565 | 545 |
Total other non-current assets | 1,065 | 1,045 |
Total assets | 44,080 | 46,700 |
CURRENT LIABILITIES: | ||
Accounts payable | 3,364 | 2,534 |
Accrued and other liabilities | 2,682 | 2,120 |
Short-term note payable | 108 | 0 |
Total current liabilities | 6,154 | 4,654 |
LONG TERM LIABILITIES: | ||
Notes payable | 5,500 | 5,500 |
Asset retirement obligations | 2,689 | 2,647 |
Other long term liabilities | 98 | 98 |
Total long term liabilities | $ 8,287 | $ 8,245 |
COMMITMENTS AND CONTINGENCIES (Note 14) | ||
PREFERRED STOCK (Note 9): | ||
Total preferred stock | $ 26,302 | $ 25,850 |
EQUITY: | ||
Common stock (par value $0.01 per share): Authorized 300,000,000 shares, issued, 6,911,921 and 6,917,027 as of September 30, 2015, and June 30, 2015, respectively | 69 | 69 |
Treasury stock (at cost): 1,209,389 and 1,209,389 shares as of September 30, 2015, and June 30, 2015, respectively | (9,806) | (9,806) |
Capital in excess of par value | 93,478 | 93,386 |
Accumulated deficit | (84,509) | (81,006) |
Accumulated other comprehensive income | 4,111 | 5,302 |
Total equity attributable to Magellan Petroleum Corporation | 3,343 | 7,945 |
Non-controlling interest in subsidiary | (6) | 6 |
Total equity | 3,337 | 7,951 |
Total liabilities, preferred stock and equity | 44,080 | 46,700 |
Series A Convertible Preferred Stock [Member] | ||
PREFERRED STOCK (Note 9): | ||
Total preferred stock | $ 26,302 | $ 25,850 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 |
Accumulated depreciation | $ 711 | $ 682 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common Stock, shares, outstanding | 6,911,921 | 6,917,027 |
Common stock, shares, issued | 6,911,921 | 6,917,027 |
Treasury stock, shares | 1,209,389 | 1,209,389 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 28,000,000 | 28,000,000 |
Preferred stock, shares issued | 21,533,044 | 21,162,697 |
Preferred stock, shares outstanding | 21,533,044 | 21,162,697 |
Preferred stock, liquidation preference | $ 28,933 | $ 28,435 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||
REVENUE FROM OIL PRODUCTION | $ 649 | $ 1,590 |
OPERATING EXPENSES: | ||
Lease operating | 985 | 1,214 |
Depletion, depreciation, amortization, and accretion | 198 | 255 |
Exploration | 247 | 422 |
General and administrative | 1,978 | 2,389 |
Total operating expenses | 3,408 | 4,280 |
Loss from operations | (2,759) | (2,690) |
OTHER INCOME (EXPENSE): | ||
Net interest expense | (67) | 0 |
Loss on investment in securities | (261) | 0 |
Other income (expense) | 24 | 63 |
Total other income (expense) | (304) | 63 |
Loss before tax | (3,063) | (2,627) |
Income tax expense | 0 | 0 |
Net loss | (3,063) | (2,627) |
Net loss attributable to non-controlling interest in subsidiary | 12 | 0 |
Net loss attributable to Magellan Petroleum Corporation | (3,051) | (2,627) |
Preferred stock dividends | (452) | (430) |
Net loss attributable to common stockholders | $ (3,503) | $ (3,057) |
Loss per common share (Note 11): | ||
Weighted average number of basic shares outstanding | 5,702,780 | 5,706,860 |
Weighted average number of diluted shares outstanding | 5,702,780 | 5,706,860 |
Basic and diluted loss per common share: | ||
Net loss attributable to Magellan Petroleum Corporation, including preferred stock dividends (usd per share) | $ (0.61) | $ (0.54) |
Net loss attributable to common stockholders (usd per share) | $ (0.61) | $ (0.54) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (3,063) | $ (2,627) |
Other comprehensive loss, net of tax: | ||
Foreign currency translation loss | (372) | (1,216) |
Unrealized holding loss on securities available-for-sale | (819) | (1,225) |
Other comprehensive loss, net of tax | (1,191) | (2,441) |
Comprehensive loss | $ (4,254) | $ (5,068) |
Condensed Consildated Statement
Condensed Consildated Statement of Stockholders' Equity (Unaudited) - 3 months ended Sep. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Capital in Excess of Par Value | Accumulated Deficit | Accumulated Other Comprehensive Loss | Non-controlling Interest |
Beginning balance at Jun. 30, 2015 | $ 7,951 | $ 69 | $ (9,806) | $ 93,386 | $ (81,006) | $ 5,302 | $ 6 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (3,063) | (3,051) | (12) | ||||
Other comprehensive loss, net of tax | (1,191) | (1,191) | |||||
Stock and stock based compensation | 108 | 108 | |||||
Net shares repurchased for employee tax costs upon vesting of restricted stock | (10) | (10) | |||||
Payment of cash in lieu of issuance of fractional shares in one share for eight shares reverse stock split | (6) | (6) | |||||
Preferred stock dividend | (452) | (452) | |||||
Ending balance at Sep. 30, 2015 | $ 3,337 | $ 69 | $ (9,806) | $ 93,478 | $ (84,509) | $ 4,111 | $ (6) |
Condensed Consildated Statemen7
Condensed Consildated Statement of Stockholders' Equity (Unaudited) (Parenthetical) | Jul. 10, 2015 | Sep. 30, 2015 |
Statement of Stockholders' Equity [Abstract] | ||
Reverse stock split | 0.125 | 0.125 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (3,063) | $ (2,627) |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Foreign transaction loss | 145 | 0 |
Depletion, depreciation, amortization, and accretion | 198 | 255 |
Accretion expense of contingent consideration payable | 0 | 36 |
Allowance for doubtful accounts | 59 | 0 |
Inventory book to physical adjustment | 55 | 0 |
Loss on investment in securities | 261 | 0 |
Stock compensation expense | 108 | 44 |
Severance and retention benefit costs | 440 | 475 |
Net changes in operating assets and liabilities: | ||
Accounts receivable | 53 | 135 |
Inventories | 6 | (89) |
Prepayments and other current assets | (21) | 83 |
Accounts payable and accrued liabilities | 759 | (410) |
Net cash used in operating activities | (1,000) | (2,098) |
INVESTING ACTIVITIES: | ||
Additions to property and equipment | (123) | (2,849) |
Proceeds from sale of investment securities | 836 | 0 |
Net cash provided by (used in) investing activities | 713 | (2,849) |
FINANCING ACTIVITIES: | ||
Purchase of common stock | (10) | (104) |
Proceeds from issuance of common stock, net | 0 | 149 |
Payment of cash in lieu of issuance of fractional shares in one share for eight shares reverse stock split | (6) | 0 |
Payment of preferred stock dividend | 0 | (429) |
Deferred financing costs, net | (20) | 0 |
Short term debt issuances | 108 | 0 |
Net cash provided by (used in) financing activities | 72 | (384) |
Effect of exchange rate changes on cash and cash equivalents | (178) | (318) |
Net decrease in cash and cash equivalents | (393) | (5,649) |
Cash and cash equivalents at beginning of period | 1,051 | 16,422 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 658 | 10,773 |
Supplemental schedule of non-cash activities: | ||
Unrealized holding loss and foreign currency translation loss on securities available-for-sale | (1,049) | (2,074) |
Change in accounts payable and accrued liabilities related to property and equipment | (192) | 308 |
Accrued preferred stock dividends | 0 | 430 |
Preferred stock dividends paid in kind | 452 | 0 |
Increase in both accrued or other liabilities and prepaid or other assets related to Sopak | $ 27 | $ 26 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis Of Presentation | Note 1 - Basis of Presentation Description of Operations Magellan Petroleum Corporation (the "Company" or "Magellan" or "MPC" or "we") is an independent oil and gas exploration and production company focused on the development of CO 2 -enhanced oil recovery ("CO 2 -EOR") projects in the Rocky Mountain region. Historically active internationally, Magellan also owns significant exploration acreage in the Weald Basin, onshore UK, and an exploration block, NT/P82, in the Bonaparte Basin, offshore Northern Territory, Australia, which the Company currently plans to farmout. The Company conducts its operations through three wholly owned subsidiaries corresponding to the geographical areas in which the Company operates: Nautilus Poplar LLC ("NP") in the US, Magellan Petroleum (UK) Limited ("MPUK") in the UK, and Magellan Petroleum Australia Pty Ltd ("MPA") in Australia. Our strategy is to enhance shareholder value by maximizing the value of our existing assets. Our portfolio of operations includes several early stage oil and gas exploration and development projects, the successful development of which requires significant capital, as well as significant engineering and management resources. We were founded in 1957 and incorporated in Delaware in 1967. The Company's common stock has been trading on NASDAQ since 1972 under the ticker symbol "MPET". Our principal executive offices are located at 1775 Sherman Street, Suite 1950, Denver, Colorado 80203, and our phone number is (720) 484-2400. Going Concern The Company has incurred losses from operations for the three months ended September 30, 2015 , of $2.8 million . In addition, during the three months ended September 30, 2015 working capital has decreased from $3.9 million at June 30, 2015 , to negative $332 thousand at September 30, 2015 , and the Company's cash balance has decreased to $658 thousand as of September 30, 2015 . The Company continues to experience liquidity constraints and has begun selling certain of its non-core assets to fund its operations. However, proceeds from these asset sales may not provide sufficient liquidity to fund operations for the next twelve months. These factors raise substantial doubt about the Company's ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might result from the outcome of this uncertainty. As part of the Company's current strategic alternatives review process discussed below, the Company is currently looking for potential merger candidates that may offer improved liquidity and the ability to raise additional capital. The Company is focused on maintaining production while efficiently reducing its operating and general and administrative costs. Special Committee of the Board of Directors On June 5, 2015 , the Board of Directors of the Company approved the formation of a special committee of the Board of Directors ("the "Special Committee") to i) engage in a strategic alternatives review process and ii) amend compensation arrangements of executives and employees for the purpose of retention and alignment of interests with the interests of the common stockholders during such strategic alternatives review process. Principles of Consolidation and Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Magellan and its wholly owned subsidiaries, NP, MPUK, and MPA, and have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X published by the US Securities and Exchange Commission (the "SEC"). Accordingly, these interim unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete annual period financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. All intercompany transactions have been eliminated. Operating results for the three months ended September 30, 2015 , are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2016 . This report should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2015 (the "2015 Form 10-K"). All amounts presented are in US dollars, unless otherwise noted. Amounts expressed in Australian currency are indicated as "AUD." Certain amounts in our prior period financial statements have been reclassified to conform to the current period presentation. During the year ended June 30, 2015, the Company formed a majority owned subsidiary, Utah CO2 LLC, a Delaware limited liability company ("Utah CO2"), through which the Company purchased an option to acquire CO 2 at Farnham Dome in Utah. The Company owns a controlling 51% of the equity in Utah CO2 and consolidates this entity in the accompanying consolidated financial statements. The remaining 49% is owned by two separate third parties. Another third-party owns a 10% economic participation interest in the Company's 51% equity interest in Utah CO2, which participation interest does not bear any governance rights over the Company's investment in Utah CO2. The non-controlling interest reported in the accompanying consolidated financial statements relates to the non-controlling interest in this entity, including the participation interest. As of September 30, 2015 , the Company owned a 7.5% interest in Central Petroleum Limited (ASX:CTP) ("Central"), a Brisbane-based exploration and production company traded on the Australian Securities Exchange. The Company accounts for this investment as securities available-for-sale in the accompanying consolidated financial statements. Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of oil and gas reserves, assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses, including stock-based compensation expense, during the reporting periods. Actual results could differ from those estimates. Foreign Currency Translation The functional currency of our foreign subsidiaries is their local currency. Assets and liabilities of foreign subsidiaries are translated to US dollars at period-end exchange rates, and our unaudited condensed consolidated statements of operations and cash flows are translated at average exchange rates during the reporting periods. Resulting translation adjustments are recorded in accumulated other comprehensive income, a separate component of stockholders' equity. A component of accumulated other comprehensive income will be released into income when the Company executes a partial or complete sale of an investment in a foreign subsidiary or a group of assets of a foreign subsidiary considered a business and/or when the Company no longer holds a controlling financial interest in a foreign subsidiary or group of assets of a foreign subsidiary considered a business. Transactions denominated in currencies other than the local currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in foreign currency transaction gains and losses that are reflected in results of operations as unrealized (based on period end translation) or realized (upon settlement of the transactions) and reported under general and administrative expenses in the consolidated statements of operations. During the year ended June 30, 2015, the Company made a determination that it was no longer permanently invested in its foreign subsidiaries because (i) the Company has begun an effort to repay its intercompany balances through the repatriation of cash from these subsidiaries and (ii) the Company is increasingly focusing on its US operations. As such, the Company recorded on its statement of operations for the year ended June 30, 2015, an expense reclassification from accumulated other comprehensive loss arising from foreign currency exchange losses on its intercompany account balances. For the three months ended September 30, 2015 , the Company has continued to record foreign currency exchange gains and losses arising from its intercompany account balances in its condensed consolidated statement of operations. Securities available-for-sale Securities available-for-sale are comprised of investments in publicly traded securities and are carried at quoted market prices. Unrealized gains and losses are excluded from earnings and recorded as a component of accumulated other comprehensive loss in stockholders' equity, net of deferred income taxes. The Company recognizes gains or losses when securities are sold. On a quarterly basis, we perform an assessment to determine whether there have been any events or economic circumstances to indicate that a security with an unrealized loss has suffered an other-than-temporary impairment. The Company conducted this analysis as of September 30, 2015 , and determined that unrealized losses on its investment in Central during the three months ended September 30, 2015 were not of the nature of an other-than-temporary impairment, primarily due to certain announcements by Central regarding the achievement of certain strategic objectives, and the recovery of the market price of Central stock as of the date of the filing of this report to a level above its carrying value. Refer to Note 3 - Securities Available-for-Sale for further information. Oil and Gas Exploration and Production Activities The Company follows the successful efforts method of accounting for its oil and gas exploration and production activities. Under this method, all property acquisition costs, and costs of exploratory and development wells are capitalized until a determination is made that the well has found proved reserves or is deemed noncommercial. If an exploratory well is deemed to be noncommercial, the well costs are charged to exploration expense as dry hole costs. Exploration expenses include dry hole costs, geological, and geophysical expenses. Non-commercial development well costs are charged to impairment expense if circumstances indicate that a decline in the recoverability of the carrying value may have occurred. The Company records its proportionate share in joint venture operations in the respective classifications of assets, liabilities, and expenses. The cost of CO 2 injection is capitalized until a production response is seen as a result of the injection and it is determined that the well has found proved reserves. After oil production from the well begins, CO 2 injection costs are expensed as incurred. Depreciation, depletion, and amortization ("DD&A") of capitalized costs related to proved oil and gas properties is calculated on a property-by-property basis using the units-of-production method based upon proved reserves. The computation of DD&A takes into consideration restoration, dismantlement, and abandonment costs as well as the anticipated proceeds from salvaging equipment. The sale of a partial interest in a proved oil and gas property is accounted for as normal retirement, and no gain or loss is recognized as long as the treatment does not significantly affect the units-of-production depletion rate. A gain or loss is recognized for all other sales of producing properties. Impairment of Long-Lived Assets The Company reviews the carrying amount of its oil and gas properties and unproved leaseholds for impairment whenever events and or changes in circumstances indicate that a decline in the recoverability of their carrying value may have occurred. The Company estimates the expected undiscounted future cash flows of its oil and gas properties and compares such undiscounted future cash flows to the carrying amount of the oil and gas properties to determine if the carrying amount is recoverable. If the carrying amount exceeds the estimated undiscounted future cash flows, the Company will adjust the carrying amount of the oil and gas properties to fair value. The factors used to determine fair value include, but are not limited to, recent sales prices of comparable properties, the present value of estimated future cash flows, net of estimated operating and development costs, using estimates of reserves, future commodity pricing, future production estimates, anticipated capital expenditures, and various discount rates commensurate with the risk and current market conditions associated with realizing the expected cash flows projected. There were no significant changes in circumstances during the quarter ended September 30, 2015 , that would indicate that the oil and gas properties carrying values were further impaired. Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of the assets acquired net of the fair value of liabilities assumed in an acquisition. GAAP requires goodwill to be evaluated on an annual basis for impairment, or more frequently if events occur or circumstances change that could potentially result in impairment. For the three months ended September 30, 2015 , there were no significant changes in events or circumstances that suggested further potential impairment of the Company's goodwill balances at September 30, 2015 . Asset Retirement Obligations The Company recognizes an estimated liability for future costs associated with the plugging and abandonment of its oil and gas properties. A liability for the fair value of an asset retirement obligation and corresponding increase in the carrying value of the related long-lived asset are recorded at the time a well is acquired or the liability to plug is legally incurred. The increase in carrying value is included in proved oil and gas properties in the accompanying condensed consolidated balance sheets. The Company depletes the amount added to proved oil and gas property costs, net of estimated salvage values, and recognizes expense in connection with the accretion of the discounted liability over the remaining estimated economic lives of the respective oil and gas properties. Revenue Recognition The Company derives revenue primarily from the sale of produced oil. Oil revenues are recognized when production is sold to a purchaser at a fixed or determinable price, when delivery has occurred and title has transferred, and collection of the revenue is probable. Major Customers The Company's consolidated oil production revenue is derived from its NP segment and was generated from a single customer for the three months ended September 30, 2015 and 2014 . Stock Based Compensation Stock option grants may contain time based, market based, or performance based vesting provisions. Time based options ("TBOs") are expensed on a straight-line basis over the vesting period. Market based options ("MBOs") are expensed on a straight-line basis over the derived service period, even if the market condition is not achieved. Performance based options ("PBOs") are amortized on a straight-line basis between the date upon which the achievement of the relevant performance condition is deemed probable and the date the performance condition is expected to be achieved. Management re-assesses whether achievement of performance conditions is probable at the end of each reporting period. If changes in the estimated outcome of the performance conditions affect the quantity of the awards expected to vest, the cumulative effect of the change is recognized in the period of change. The fair value of the stock options is determined on the grant date and is affected by our stock price and other assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the term of the awards, risk free interest rates, expected dividends, and the expected option exercise term. The Company estimates the fair value of PBOs and time based stock options using the Black-Scholes-Merton pricing model. The simplified method is used to estimate the expected term of stock options due to a lack of related historical data regarding exercise, cancellation, and forfeiture. For MBOs, the fair value is estimated using Monte Carlo simulation techniques. Accumulated Other Comprehensive Loss Comprehensive loss is presented net of applicable income taxes in the accompanying condensed consolidated balance sheets and statements of stockholders' equity and comprehensive loss. Other comprehensive loss is comprised of revenues, expenses, gains, and losses that under GAAP are reported as separate components of stockholders' equity instead of net loss. Loss per Common Share Income and losses per common share are based upon the weighted average number of common and common equivalent shares outstanding during the period. The effects of potentially dilutive securities in the determinations of diluted earnings per share are the dilutive effect of stock options, non-vested restricted stock, and the shares of Series A Preferred Stock. The potentially dilutive impact of stock options is determined using the treasury stock method. The potentially dilutive impact of the shares of Series A Preferred Stock is determined using the if-converted method. In applying the if-converted method, conversion is not assumed for purposes of computing dilutive shares if the effect would be anti-dilutive. The Series A Preferred Stock is convertible at a rate of one common share for one preferred share, multiplied by an applicable conversion ratio. We did not include any stock options, nor common stock issuable upon the conversion of the Series A Preferred Stock in the calculation of diluted loss per share during each of the three months ended September 30, 2015 , and 2014 , as their effect would have been antidilutive. Segment Information As of June 30, 2015 , the Company determined, based on the criteria of ASC Topic 280, that it operates in three segments, NP, MPUK, and MPA, as well as a head office, Magellan ("Corporate"), which is treated as a cost center. As of September 30, 2015 , these three operating segments met the minimum quantitative threshold to qualify for separate segment reporting. The Company's chief operating decision maker is J. Thomas Wilson (President and CEO of the Company), who reviews the results and manages operations of the Company in the three reporting segments of NP, MPUK, and MPA, as well as Corporate. The presentation of all segment information herein reflects the manner in which the Company's management monitors performance and allocates resources. For information pertaining to our reporting segments, see Note 12 - Segment Information , and Part II, Item 8 of our 2015 Form 10-K . Recently Issued Accounting Standards In August 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-15, which amends presentation and disclosure requirements outlined in ASU 2015-03 (discussed below) by clarifying guidance for debt issuance costs related to line of credit arrangements, providing that the SEC would not object to presentation of debt issuance costs related to a line of credit arrangement as an asset, and amortizing them ratably over the term of the line of credit arrangement. The Company does not expect adoption of ASU 2015-15 to have a material effect on its condensed consolidated financial statements. In August 2015, the FASB issued ASU No. 2015-14, which defers the effective date of ASU 2014-09 (discussed below) by one year, and would allow entities the option to early adopt the new revenue standard as of the original effective date. In July 2015, the FASB issued ASU No. 2015-11, which requires that inventory that is measured using first-in, first-out or average cost method be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The standard will be effective for the first interim period within the Company's fiscal year beginning after December 15, 2016 and is required to be adopted prospectively; early adoption is permitted. The Company does not expect the adoption of this accounting standard to have a significant impact on its condensed consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, which requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability, similar to the presentation of debt discounts. Prior to the issuance of ASU 2015-03, debt issuance costs were required to be presented as deferred charge assets, separate from the related debt liability. ASU 2015-03 does not change the recognition and measurement requirements for debt issuance costs. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015, and early adoption is permitted. At September 30, 2015, adoption of this standard would have resulted in a reclassification from other long term assets to note payable of $71 thousand on the Company's accompanying condensed consolidated balance sheet. In August 2014, the FASB issued ASU No. 2014-15, which provides guidance on management’s responsibility to evaluate whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for fiscal years ending after December 15, 2016, and annual and interim periods thereafter. The Company is evaluating the impact of the adoption of this standard on its condensed consolidated financial statements. In June 2014, the FASB issued ASU No. 2014-12, which requires a reporting entity to treat a performance target included within a share-based payment award that affects vesting and that could be achieved after the requisite service period as a performance condition. It is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. ASU 2014-12 may be adopted either prospectively for share-based payment awards granted or modified on or after the effective date, or retrospectively, using a modified retrospective approach. The modified retrospective approach would apply to share-based payment awards outstanding as of the beginning of the earliest annual period presented in the financial statements on adoption, and to all new or modified awards thereafter. The Company has chosen to early adopt this standard retrospectively to July 1, 2013, which adoption did not impact the Company's consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, which establishes a comprehensive new revenue recognition standard designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In doing so, companies may need to use more judgment and make more estimates than under current revenue recognition guidance. The ASU allows for the use of either the full or modified retrospective transition method, and the standard, as amended by ASU 2015-14 discussed above, will be effective for us in the first quarter of our fiscal year 2019; unless early adopted in the prior fiscal year as permitted under the amendment. The Company is currently evaluating the timing of adoption, which transition approach to use and the impact of the adoption of this standard on its consolidated financial statements. |
Sale of Amadeus Basin Assets
Sale of Amadeus Basin Assets | 3 Months Ended |
Sep. 30, 2015 | |
Extractive Industries [Abstract] | |
Sale of Amadeus Basin Assets | Note 2 - Sale of Amadeus Basin Assets On March 31, 2014 (the "Central Closing Date"), pursuant to the Share Sale and Purchase Deed dated February 17, 2014 (the "Sale Deed"), the Company sold its Amadeus Basin assets, the Palm Valley and Dingo gas fields ("Palm Valley" and "Dingo," respectively), to Central through the sale of the Company's wholly owned subsidiary, Magellan Petroleum (N.T.) Pty. Ltd ("MPNT"), to Central's wholly owned subsidiary Central Petroleum PV Pty. Ltd ("Central PV"). In exchange for the assets, Central paid to Magellan (i) AUD $20 million , (ii) customary purchase price adjustments amounting to AUD $800 thousand ; and (iii) 39.5 million newly issued shares of Central stock (ASX: CTP), equivalent to an ownership interest in Central of approximately 11% . The Sale Deed also provides that the Company is entitled to receive 25% of the revenues generated at the Palm Valley gas field from gas sales when the volume-weighted gas price realized at Palm Valley exceeds AUD $5.00 /Gigajoule ("GJ") and AUD $6.00 /GJ for the first 10 years following the Central Closing Date and for the following 5 years , respectively, with such prices to be escalated in accordance with the Australian CPI. Between the third and fifth anniversaries of the Central Closing Date, inclusive, the Company may seek from Central a one-time payment (the "Bonus Discharge Amount") corresponding to the present value, assuming an annual discount rate of 10% , of any expected remaining bonus payments in exchange for foregoing future bonus payments. If the Company receives the Bonus Discharge Amount, bonus payments and the Bonus Discharge Amount together may not exceed AUD $7 million . The Company also retained its rights to receive any and all bonuses (the "Mereenie Bonus") payable by Santos Ltd ("Santos") and contingent upon production at the Mereenie oil and gas field achieving certain threshold levels. The Mereenie Bonus was established in 2011 pursuant to the terms of the asset swap agreement between the Company and Santos for the sale of the Company's interest in Mereenie to Santos and the Company's purchase of the interests of Santos in the Palm Valley and Dingo gas fields. |
Securities Available-for-Sale
Securities Available-for-Sale | 3 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Securities Available-for-Sale | Note 3 - Securities Available-for-Sale The following table presents the amortized cost, gross unrealized gains, gross unrealized losses, and fair market value of available-for-sale equity securities, nearly all of which are attributable to the Company's investment in Central stock, as follows: September 30, 2015 Amortized cost Gross unrealized gains Gross unrealized losses Fair value (In thousands) Equity securities $ 2,950 $ — $ (1,049 ) $ 1,901 June 30, 2015 Amortized cost Gross unrealized gains Gross unrealized losses Fair value (In thousands) Equity securities $ 4,230 $ — $ — $ 4,230 During the three months ended September 30, 2015 , the Company began selling part of its investment in Central due to the Company's liquidity constraints and financing needs. The realized price at which the Company sold shares of its investment in Central was lower than the Company's amortized cost, on a per share basis, of its investment. Consequently, the Company determined that unrealized losses incurred through June 30, 2015 related to its investment in Central were other-than-temporary, and recognized an impairment loss in the amount of $14.9 million as of June 30, 2015 . As of September 30, 2015 , the Company again analyzed its investment in Central for further impairment, and concluded that no further impairment was necessary. |
Debt
Debt | 3 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Note 4 - Debt Notes Payable . On September 17, 2014 , the Company, through its wholly owned subsidiary NP, entered into a senior secured revolving loan facility (the "Revolving Loan Facility") with West Texas State Bank ("WTSB"). The Revolving Loan Facility had a floating interest rate based on the prime rate with a floor rate of 3.25% , with interest payable quarterly, a maturity of September 30, 2015 , and a total available borrowing limit of $8.0 million , of which $5.5 million was drawn as of June 30, 2015 , when the Company entered into an amendment to the Revolving Loan Facility whereby the Revolving Loan Facility was converted into a single term loan (the "Term Loan"). The maturity of the Term Loan was extended to June 30, 2020 and bears interest at the prime rate plus 1.50% with an interest rate floor of 4.75% . The Term Loan is secured by substantially all of NP's assets and a guarantee of Magellan secured by a pledge of its membership interest in NP. During the first twelve months of the Term Loan, only monthly interest payments are payable. Principal is amortized over its remaining four year term. Under the terms of the Term Loan, Magellan and NP are subject to certain restrictive covenants customary in similar loan agreements. At September 30, 2015 , the Company was in compliance with all such covenants. On September 17, 2015, the Company entered into a Premium Finance Agreement (the "Premium Note") to finance its insurance premiums in connection with its annual property and casualty insurance renewal. The Premium Note has a principal amount of $108 thousand , bears interest at 6.50% and has an amortization term of nine months . Principal and interest payments of $12 thousand are due monthly October 2015 through June 2016. |
Asset Retirement Obligations
Asset Retirement Obligations | 3 Months Ended |
Sep. 30, 2015 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Note 5 - Asset Retirement Obligations The estimated valuation of asset retirement obligations ("AROs") is based on the Company's historical experience and management's best estimate of plugging and abandonment costs by field. Assumptions and judgments made by management when assessing an ARO include: (i) the existence of a legal obligation; (ii) estimated probabilities, amounts, and timing of settlements; (iii) the credit-adjusted risk-free rate to be used; and (iv) inflation rates. Accretion expense is recorded under depletion, depreciation, amortization, and accretion in the unaudited condensed consolidated statements of operations. If the recorded value of ARO requires revision, the revision is recorded to both the ARO and the asset retirement capitalized cost. The following table summarizes the ARO activity for the three months ended September 30, 2015 : Total (In thousands) Fiscal year opening balance $ 2,647 Accretion expense 42 Effect of exchange rate changes — Balance at September 30, 2015 2,689 Less current asset retirement obligation — Long term asset retirement obligation $ 2,689 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 6 - Fair Value Measurements The Company follows authoritative guidance related to fair value measurement and disclosure, which establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement using market participant assumptions at the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows: • Level 1: Quoted prices in active markets for identical assets. • Level 2: Significant other observable inputs – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, either directly or indirectly, for substantially the full term of the financial instrument. • Level 3: Significant unobservable inputs. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and the consideration of factors specific to the asset or liability. The Company's policy is to recognize transfers in or out of a fair value hierarchy as of the end of the reporting period for which the event or change in circumstances caused the transfer. The Company has consistently applied the valuation techniques discussed above for all periods presented. During the three months ended September 30, 2015 , and 2014 , there were no transfers in or out of Level 1, Level 2, or Level 3. Assets and liabilities measured on a recurring basis The Company's financial instruments exposed to concentrations of credit risk primarily consist of cash and cash equivalents. The carrying values for cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, and current portion of notes payable reflect these items' cost, which approximates fair value based on the timing of the anticipated cash flows and current market conditions. The recorded value of the Term Loan (see Note 4 - Debt ) approximates fair value due to the variable interest rate structure of the note. Items required to be measured at fair value on a recurring basis by the Company include securities available-for-sale and contingent consideration payable (as discussed further below). Within the valuation hierarchy, the Company measures the fair value of securities available-for-sale using Level 1 inputs, and the fair value of contingent consideration payable using Level 3 inputs. As of September 30, 2015 , and June 30, 2015 , the fair value of securities available-for-sale was $1.9 million and $4.2 million , respectively. As of both September 30, 2015 , and June 30, 2015 , the fair value of contingent consideration payable was $0 . The following table presents items required to be measured at fair value on a recurring basis as of the periods presented: September 30, 2015 Level 1 Level 2 Level 3 Total (In thousands) Assets: Securities available-for-sale $ 1,901 $ — $ — $ 1,901 Liabilities: Contingent consideration payable (1) $ — $ — $ — $ — June 30, 2015 Level 1 Level 2 Level 3 Total (In thousands) Assets: Securities available-for-sale $ 4,230 $ — $ — $ 4,230 Liabilities: Contingent consideration payable (1) $ — $ — $ — $ — (1) See Note 14 - Commitments and Contingencies , below for additional information about this item. The contingent consideration payable as discussed in Note 14 - Commitments and Contingencies - Contingent production payments is a potential standalone liability that is measured at fair value on a recurring basis for which there is no available quoted market price, principal market, or market participants. The inputs for this instrument are unobservable and therefore classified as Level 3 inputs. The calculation of this liability is a significant management estimate and uses drilling and production projections based in part on the Company's reserve report for NP to estimate future production bonus payments and a discount rate that is reflective of the Company's credit adjusted borrowing rate. Inputs are reviewed by management on an annual basis or more frequently as deemed appropriate, and the potential liability is estimated by converting estimated future production bonus payments to a single net present value using a discounted cash flow model. Payments of future production bonuses are sensitive to Poplar's 60 days rolling gross production average. The contingent consideration payable would increase with significant production increases and/or a reduction in the discount rate. The Company has previously recorded a liability and resulting accretion expense for the estimated fair value of the contingent consideration payable. The Company undertook a review of its planned drilling program at Poplar with respect to its undeveloped resource locations as of June 30, 2015 , and determined, in light of the then current oil price environment and liquidity situation, to defer this drilling program for an indefinite period. Without this drilling program and the production volumes anticipated therefrom, the Company does not currently anticipate that the conditions for the payment of the contingent consideration will be met in the foreseeable future. As such, the Company has not recorded any contingent consideration payable as of June 30, 2015 , or September 30, 2015 , in the accompanying condensed consolidated financial statements. See Note 14 - Commitments and Contingencies , below for additional information about this item. Adjustments to the fair value of the contingent consideration payable are recorded in the unaudited condensed consolidated statements of operations under other (expense) income. Assets and liabilities measured on a nonrecurring basis The Company also utilizes fair value to perform an impairment test on its oil and gas properties annually or whenever events and circumstances indicate that a decline in the recoverability of their carrying value may have occurred. Fair value is estimated using expected discounted future cash flows from oil and gas properties. The inputs used to determine such fair value are primarily based upon internally developed cash flow models and are also classified within Level 3. For the three months ended September 30, 2015 , the Company reviewed its proved oil and gas properties for a possible further impairment since June 30, 2015 and concluded that no further impairment had occurred as of September 30, 2015 . |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7 - Income Taxes The Company has estimated the applicable effective tax rate expected for the full fiscal year. The Company's effective tax rate used to estimate income taxes on a current year-to-date basis for the three months ended September 30, 2015 , and 2014 , is 0% and 0% , respectively. Deferred tax assets ("DTAs") are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities and for operating losses and foreign tax credit carry forwards. During the three months ended March 31, 2015, the Company made a determination that it was no longer permanently invested in its foreign subsidiaries. As of September 30, 2015 , the Company has an overall deferred tax asset net of a deferred tax liability related to the basis difference in its foreign subsidiaries. A valuation allowance reduces DTAs to the estimated realizable value, which is the amount of DTAs management believes is "more-likely-than-not" to be realized in future periods. We review our DTAs and valuation allowance on a quarterly basis. As part of our review, we consider positive and negative evidence, including cumulative results in recent years. Consistent with the position at June 30, 2015 , the Company maintains a full valuation allowance recorded against all DTAs. The Company therefore had no recorded DTAs as of September 30, 2015 . We anticipate that we will continue to record a valuation allowance against our DTAs in all jurisdictions of the Company until such time as we are able to determine that it is "more-likely-than-not" that those DTAs will be realized. During the year ended June 30, 2014, the Company utilized all of its available net operating loss carryforwards from the state of Montana. As a result, the Company is subject to taxation in the state of Montana based upon its apportioned income to that state, calculated using a waters edge methodology. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 8 - Stock Based Compensation The 2012 Stock Incentive Plan On January 16, 2013, the Company's shareholders approved the Magellan Petroleum Corporation 2012 Omnibus Incentive Compensation Plan (the "2012 Stock Incentive Plan"). The 2012 Stock Incentive Plan replaced the Company's 1998 Stock Incentive Plan (the "1998 Stock Plan"). The 2012 Stock Incentive Plan provides for the granting of stock options, stock appreciation rights, restricted stock and/or restricted stock units, performance shares and/or performance units, incentive awards, cash awards, and other stock based awards to selected employees, including officers, directors, and consultants of the Company (or subsidiaries of the Company). The stated maximum number of shares of the Company's common stock authorized for awards under the 2012 Stock Incentive Plan is 625,000 shares plus the remaining number of shares under the 1998 Stock Plan immediately before the effective date of the 2012 Stock Incentive Plan, which was 36,054 as of January 15, 2013. The number of aggregate shares available for issuance will be reduced by 1 share for each share granted in the form of a stock option or stock appreciation right and 2 shares for each share granted in the form of any award that is not a stock option or stock appreciation right that is settled in stock. The maximum aggregate annual number of options or stock appreciation rights that may be granted to one participant is 125,000 , and the maximum annual number of performance shares, performance units, restricted stock, or restricted stock units that may be granted to any one participant is 62,500 . The maximum term of the 2012 Stock Incentive Plan is ten years. In October 2014, pursuant to an Options and Stock Purchase Agreement, the Company repurchased 189,062 options from a former executive, which options were previously granted under the Company's 1998 Stock Plan. Pursuant to the terms of the 2012 Stock Incentive Plan, the unissued shares underlying these unexercised options were added to the shares available for issuance under the 2012 Stock Incentive Plan. Stock Option Grants Under the 2012 Stock Incentive Plan, stock option grants may contain vesting provisions such that options are TBOs, PBOs, or MBOs. During each of the three months ended September 30, 2015 , and September 30, 2014 , the Company granted no stock options. Exercises During the three months ended September 30, 2015 , no stock options were exercised. During the three months ended September 30, 2014 , 36,067 stock options were exercised, resulting in the issuance of 28,154 shares of common stock, which number is net of shares withheld to satisfy employee tax and exercise price obligations. Forfeitures / Cancellations During the three months ended September 30, 2015 , 6,250 stock options were forfeited or canceled. The forfeiture of unvested options during the three months ended September 30, 2015 resulted in the reversal of previously recorded compensation expense of $30 thousand , which was recorded as an offset to general and administrative expense in the accompanying unaudited condensed consolidated statement of operations. During the three months ended September 30, 2014 , 144,010 stock options were canceled or forfeited. Expirations During the three months ended September 30, 2015 , 33,333 stock options expired without exercise. During the prior year period, no stock options expired. As of September 30, 2015 , a total of 332,028 MBOs and PBOs had not vested, and 175,703 options, including forfeited or canceled options, remained available for future issuance under the 2012 Stock Incentive Plan. Stock options outstanding have expiration dates ranging from October 31, 2015, to January 12, 2025. The following table summarizes the stock option activity for the three months ended September 30, 2015 : Number of Shares WAEPS (1) Fiscal year opening balance 1,032,334 $11.15 Granted — $0.00 Exercised — $0.00 Forfeited/canceled (6,250 ) $8.40 Expired (33,333 ) $8.96 Balance at September 30, 2015 992,751 $11.25 Weighted average remaining contractual term 5.47 years (1) Weighted average exercise price per share. Stock Compensation Expense The Company recorded $108 thousand and $44 thousand of related stock compensation expense for the three months ended September 30, 2015 and 2014 , respectively. Stock compensation expense is included in general and administrative expense in the unaudited condensed consolidated statements of operations. The $108 thousand of stock compensation expense for the three months ended September 30, 2015 consisted of expense amortization related to prior period awards of $138 thousand , partially offset by forfeitures as described above. As of September 30, 2015 , and 2014 , the unrecorded expected future compensation expense related to stock option awards was $796 thousand and $757 thousand , respectively. Stock Awards The Company's director compensation policy is designed to provide the Company's non-employee directors with a portion of their annual base Board service compensation in the form of equity with a value equal to $35,000 , with the determination of the exact number of shares to be made on July 1st, or on the date of the subsequent annual stockholders' meeting (the "Stock Award"). In either case, the number of shares to be awarded is determined using the fair value of the shares as of July 1. In addition, there is an annual cash award alternative to the annual Stock Award whereby a non-employee Director may elect to receive $35,000 in cash to exercise previously awarded options to acquire Common Stock, the exercise price of which is at least equal in value to the Common Stock eligible for receipt by the Director pursuant to the Stock Award (with the difference in value of the options and $35,000 to be paid in cash, referred to as the Make-Up Payment). On July 3, 2015, the Special Committee determined that the director's annual stock award would be deferred and revisited in a few months after the strategic alternatives review process has advanced further and liquidity issues have been addressed. As of September 30, 2015 , the Company had not made the Stock Award payment that is to be determined as of July 1, but has accrued a total of $175,000 , representing the $35,000 equity value of the Stock Award to each non-employee director. On July 1, 2014, the Company issued a total of 12,041 shares of its Common Stock to non-employee directors and one board-observer pursuant to this policy and the 2012 Stock Incentive Plan. Pursuant to the compensation policy, one director elected to apply his annual compensation to the exercise of a portion of his previously awarded and vested options in lieu of receiving a share award, resulting in the issuance of an additional 2,734 shares upon exercise. |
Preferred Stock
Preferred Stock | 3 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Preferred Stock | Note 9 - Preferred Stock Series A Convertible Preferred Stock Financing On May 10, 2013 , the Company entered into a Series A Convertible Preferred Stock Purchase Agreement (the "Series A Purchase Agreement") with One Stone Holdings II LP ("One Stone"), an affiliate of One Stone Energy Partners, L.P. Pursuant to the terms of the Series A Purchase Agreement, on May 17, 2013 (the "Closing Date"), the Company issued to One Stone 19,239,734 shares of Series A Convertible Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock"), at a purchase price of approximately $1.22149381 per share (the "Purchase Price"), for aggregate proceeds of approximately $23.5 million . Subject to certain conditions, each share of Series A Preferred Stock and any related unpaid accumulated dividends are convertible into one share of the Company's Common Stock, par value $0.01 per share, at an initial conversion price equal to the Purchase Price. As a result of the one share for eight shares reverse split of the Company's Common Stock effective July 10, 2015, the conversion price was adjusted to reflect the ratio of pre-split common shares outstanding to post-split common shares outstanding multiplied by the Purchase Price, or $9.77586545 per share (the "Adjusted Conversion Price"). Please refer to Note 10 - Preferred Stock of the Notes to the Consolidated Financial Statements in the Company's 2015 Form 10-K for further information regarding key terms and registration rights applicable to the Company's Series A Preferred Stock. The Company has analyzed the embedded features of the Series A Preferred Stock and has determined that none of the embedded features is required under US GAAP to be bifurcated from the Series A Preferred Stock and accounted for separately as a derivative. The Company recorded the transaction by recognizing the fair value of the Series A Preferred Stock at the time of issuance in the amount of $23.5 million . The Company will accrete the Series A Preferred Stock to the redemption value if events or circumstances indicate that redemption is probable. No accretion was recorded during the three months ended September 30, 2015 , nor during the year ended June 30, 2015 . On August 3, 2015 , via the First Amendment to the Series A Convertible Preferred Stock Purchase Agreement (the "Series A First Amendment"), Magellan and One Stone agreed to amend and extend the standstill provisions of the Series A Purchase Agreement to December 31, 2015 . In addition to extending the terms of the prior standstill, One Stone agreed to be prohibited from i) depositing any securities of the Company in trust or subjecting them to any voting agreement or arrangement and ii) requesting the Company to modify or waive any provision of the standstill covenants. Certain definitions were also updated in the Series A First Amendment. For the three months ended September 30, 2015 and 2014 , the Company recorded preferred stock dividends of $452 thousand and $430 thousand , respectively, related to the Series A Preferred Stock. The preferred stock dividends for the three months ended September 30, 2015 , were paid in kind. Accordingly, the value of these dividends of $452 thousand was recorded and added to the preferred stock balance on the Company's balance sheet at September 30, 2015 . The activity related to the Series A Preferred Stock for the three months ended September 30, 2015 , and the fiscal year ended June 30, 2015 , is as follows: THREE MONTHS ENDED FISCAL YEAR ENDED September 30, 2015 June 30, 2015 Number of shares Amount Number of shares Amount (In thousands, except share amounts) Fiscal year opening balance 21,162,697 $ 25,850 20,089,436 $ 24,539 Current year PIK dividend shares issued 370,347 452 1,073,261 1,311 Balance at end of period 21,533,044 $ 26,302 21,162,697 $ 25,850 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | Note 10 - Stockholders' Equity Treasury Stock On July 10, 2015, to effect the one share for eight shares reverse split of the Company's common stock, the Company paid cash in lieu of issuance of fractional shares totaling 2,284 post-split shares. The shares underlying the payment of cash in lieu were immediately canceled. On July 1, 2015, upon the vesting of 12,500 shares of restricted stock previously granted to executives of the Company and pursuant to the tax withholding provisions of the Company's restricted stock award agreements, the Company withheld on a cashless basis 2,822 shares to settle withholding taxes. The withheld shares were immediately canceled. On October 10, 2014, Magellan repurchased 31,250 shares from William H. Hastings, a former Company executive, pursuant to an Options and Stock Purchase Agreement. See Note 8 - Stock Based Compensation for further details. On July 1, 2014 , upon the vesting of 18,750 shares of restricted stock previously granted to executives of the Company and pursuant to the tax withholding provisions of the Company's restricted stock award agreements, the Company withheld on a cashless basis 5,981 shares to settle withholding taxes. The withheld shares were immediately canceled. All repurchased shares of Common Stock currently being held in treasury are being held at cost, including any direct costs of repurchase. The following table summarizes the Company's treasury stock activity as follows: THREE MONTHS ENDED FISCAL YEAR ENDED September 30, 2015 June 30, 2015 Number of shares Amount Number of shares Amount (In thousands, except share amounts) Fiscal year opening balance 1,209,389 $ 9,806 1,178,139 $ 9,344 Shares repurchased from former executive — — 31,250 462 Net shares repurchased for employee tax and option exercise price obligations related to the vesting of restricted stock and the exercise of employee stock options 2,822 10 5,981 104 Net shares repurchased to eliminate fractional shares in July 10, 2015 one share for eight shares reverse stock split 2,284 6 — — Cancellation of shares repurchased (5,106 ) (16 ) (5,981 ) (104 ) Balance at end of period 1,209,389 $ 9,806 1,209,389 $ 9,806 |
Loss Per Common Share
Loss Per Common Share | 3 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Loss Per Common Share | Note 11 - Loss Per Common Share The following table summarizes the computation of basic and diluted loss per share: THREE MONTHS ENDED September 30, 2015 2014 (In thousands, except share and per share amounts) Net loss $ (3,063 ) $ (2,627 ) Preferred stock dividend (452 ) (430 ) Net loss, including preferred stock dividends (3,515 ) (3,057 ) Net loss attributable to non-controlling interest in subsidiary 12 — Net loss attributable to common stockholders $ (3,503 ) $ (3,057 ) Basic weighted average shares outstanding 5,702,780 5,706,860 Add: dilutive effects of in-the-money stock options — — Diluted weighted average common shares outstanding 5,702,780 5,706,860 Basic loss per common share: Net loss attributable to Magellan Petroleum Corporation, including preferred stock dividends $(0.61) $(0.54) Net loss attributable to common stockholders $(0.61) $(0.54) Diluted loss per common share: Net loss attributable to Magellan Petroleum Corporation, including preferred stock dividends $(0.61) $(0.54) Net loss attributable to common stockholders $(0.61) $(0.54) There is no dilutive effect on loss per share in periods with net losses. Stock options or shares of Common Stock issuable upon the conversion of the Series A Preferred Stock were not considered in the calculations of diluted weighted average common shares outstanding as they would be antidilutive. Potentially dilutive securities excluded from the calculation of diluted shares outstanding in periods with net losses are as follows: THREE MONTHS ENDED September 30, 2015 2014 In-the-money stock options — 368,078 Common shares issuable upon conversion of Series A Preferred Stock 2,690,553 2,510,174 Total 2,690,553 2,878,252 |
Segment Information
Segment Information | 3 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Note 12 - Segment Information The Company conducts its operations through three wholly owned subsidiaries: NP, which operates in the US; MPUK, which includes our operations in the UK; and MPA, which includes our operations in Australia. Oversight for these subsidiaries is provided by Corporate, which is treated as a cost center. THREE MONTHS ENDED September 30, 2015 2014 (In thousands) Revenue from oil production: NP $ 649 $ 1,590 Net (loss) income: NP $ (804 ) $ 113 MPUK (187 ) (432 ) MPA (397 ) (635 ) Corporate (1,680 ) (1,673 ) Inter-segment elimination 5 — Consolidated net loss $ (3,063 ) $ (2,627 ) September 30, 2015 June 30, 2015 (In thousands) Total assets: NP $ 36,931 $ 37,130 MPUK 2,012 2,373 MPA 2,426 4,593 Corporate 79,596 79,474 Inter-segment elimination (1) (76,885 ) (76,870 ) Total assets $ 44,080 $ 46,700 (1) Asset inter-segment eliminations are primarily derived from investments in subsidiaries. |
Oil and Gas Activities
Oil and Gas Activities | 3 Months Ended |
Sep. 30, 2015 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
Oil and Gas Activities | Note 13 - Oil and Gas Activities The following table presents the capitalized costs under the successful efforts method for oil and gas properties as of: September 30, June 30, (In thousands) Proved oil and gas properties: United States $ 20,851 $ 20,857 Less accumulated depletion, depreciation, and amortization (4,481 ) (4,355 ) Total net proved oil and gas properties $ 16,370 $ 16,502 Unproved oil and gas properties: United States $ 468 $ 468 United Kingdom 232 241 Australia — — Total unproved oil and gas properties $ 700 $ 709 Wells in Progress: United States $ 18,880 $ 18,560 United Kingdom 1,071 1,100 Total wells in progress $ 19,951 $ 19,660 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14 - Commitments and Contingencies Refer to Note 14 - Commitments and Contingencies of the Notes to the Consolidated Financial Statements in our 2015 Form 10-K for information on all commitments. Contingent production payments. In September 2011 , the Company entered into a Purchase and Sale Agreement (the "Nautilus PSA") among the Company and the non-controlling interest owners of NP for the Company's acquisition of the sellers' interests in NP. The Nautilus PSA provides for potential future contingent production payments, payable by the Company in cash to the sellers, of up to a total of $5.0 million if certain increased average daily production rates for the underlying properties are achieved. J. Thomas Wilson, a director and executive officer of the Company, has an approximately 52% interest in such contingent payments. See Note 6 - Fair Value Measurements above for information regarding the estimated discounted fair value of the future contingent consideration payable related to the Nautilus PSA. Sopak Collateral Agreement. On January 14, 2013, the Company entered into a Collateral Purchase Agreement (the "Collateral Agreement") with Sopak AG, a Swiss subsidiary of Glencore International plc ("Sopak"), pursuant to which the Company agreed to purchase: (i) 1,158,080 shares of the Company's Common Stock and (ii) a warrant granting Sopak the right to purchase from the Company an additional 543,478 shares of Common Stock. The Collateral Agreement was subsequently amended on January 15, 2013, and completed on January 16, 2013. The Company has estimated that there is the potential for a statutory liability of approximately $1.7 million and $1.7 million as of September 30, 2015 , and June 30, 2015 , respectively, related to US Federal tax withholdings and related penalties and interest related to the Collateral Agreement. As a result, we have recorded a total liability of $1.7 million and $1.7 million as of September 30, 2015 , and June 30, 2015 , respectively, under accrued and other liabilities in the unaudited condensed consolidated balance sheets included in this report. The Company has a legally enforceable right to collect from Sopak any amounts owed to the IRS as a result of the Collateral Agreement. As a result, we have recorded a corresponding receivable of $1.7 million and $1.7 million as of September 30, 2015 , and June 30, 2015 , respectively, under prepaid and other assets in the unaudited condensed consolidated balance sheets. Celtique Litigation. On March 3, 2015, MPUK received a claim form and particulars of claim that was issued in the High Court of Justice, Queen’s Bench Division, Commercial Court in London, England on February 26, 2015, pursuant to which Celtique Energie Weald Limited ("Celtique") as the claimant seeks, among other things, a declaration that MPUK’s 50% equal co-ownership rights with Celtique in PEDLs 231, 234 (within which license area the Broadford Bridge-1 well site is located), and 243 in the central Weald Basin in the UK have been forfeited to Celtique, and payment of £1.5 million (equivalent to $2.3 million as of September 30, 2015 ) for the outstanding cash calls related to the Broadford Bridge-1 well along with interest on that amount at 5% above base rate until payment (the "Celtique Claim"). On March 24, 2015 Celtique filed for summary judgment on the Celtique Claim. On April 1, 2015, MPUK filed a defense and counterclaim asserting, among other things, that the cash calls by Celtique are not valid due to the failure of Celtique as operator of the PEDLs to comply with the contractual accounting procedures, adhere to an agreed-upon drilling schedule and otherwise properly execute the parties’ development plans, and seeking to recover damages from Celtique as a result of Celtique’s unilateral actions following the purported forfeiture of the PEDL interests. On June 15, 2015, Celtique’s application for summary judgment was heard and dismissed on the basis that MPUK had a real prospect of successfully defending against the Celtique Claim. Celtique was ordered to pay MPUK’s costs of responding to the application, assessed at £60,000 (equivalent to $94 thousand as of June 30, 2015), which was paid by Celtique on June 29, 2015. MPUK believes that it has strong defenses and intends to vigorously contest the Celtique Claim. However, due to the early stage of this matter and the uncertainty and risks inherent in litigation, the Company cannot predict an ultimate outcome. As such, a meaningful estimate of a reasonably possible loss, if any, or range of reasonably possible losses, if any, cannot be made as of the date of these consolidated financial statements. The Company has approximately $919 thousand in capitalized costs related to these licenses included in the accompanying consolidated balance sheet. Utah CO2 Option. In May 2015, in accordance with an option agreement between Magellan, Utah CO2, and Savoy Energy, LLC ("Savoy"), Utah CO2 exercised the CO 2 purchase option available under the Utah CO2 Option Agreement. Exercise of the CO 2 purchase option allows Utah CO2 to negotiate in good faith and enter into a purchase agreement for CO 2 with Savoy, the key terms of which should be consistent with the terms detailed in the Utah CO2 Option Agreement , which included a fifty year term, an attractive CO 2 price per mcf, the exclusive access to CO 2 volumes recoverable from Farnham Dome for CO 2 -EOR projects in Utah, and no CO 2 purchase obligations for the first three years. NT/P82 Seismic Survey. In June 2015, the Australian Commonwealth-Northern Territory Offshore Petroleum Joint Authority and the National Offshore Petroleum Titles Administrator ("NOPTA") approved a variation in MPA's work program commitments under the NT/P82 permit in the Bonaparte basin. In addition to retaining the requirement for geotechnical studies to be completed on or before May 12, 2015, at an estimated cost of AUD $500 thousand , the new work program commitment replaced the commitment to drill an exploration well on or before May 12, 2016, carrying an estimated cost of AUD $25 million , with the requirement to complete a minimum of 600 km 2 3-D seismic survey on or before May 12, 2016, the cost of which seismic survey is estimated at AUD $16 million . NOPTA also advised that a suspension and extension of the work requirement for the permit years ending May 12, 2015, and 2016, may be considered, and any renewal application will be expected to include plans for drilling of an exploratory well. Engagement of RFC Ambrian as financial advisor for farmout of NT/P82. In July 2015 , the Company engaged RFC Ambrian as its financial advisor to run a formal bid process for the farm-out of its 100% operating interest in the NT/P82 permit in the Bonaparte basin, offshore Australia, to fund future exploration costs and recover back-costs incurred. The terms of the engagement include cash payments of $20 thousand and $80 thousand for the two initial stages of the engagement through a written offer, and a success fee upon completion of a legally binding agreement ranging from $250 thousand to 5% of the farm-out value of the agreement to the Company. Petrie Engagement. In June 2015, the Special Committee engaged Petrie Partners, LLC ("Petrie") to act as its financial advisor (the "Petrie Engagement"). Under the terms of the Petrie Engagement, the Company has agreed to pay Petrie certain fees contingent upon the successful closing of certain transactions ranging from $0 to 3% of the value of such transaction, together with reimbursement of expenses. The Petrie Engagement may be terminated by either party with 5 days written notice. Poplar CO 2 -EOR Pilot Bonus . Mi3 Petroleum Engineering ("Mi3") is a Golden, Colorado, based petroleum engineering firm that advises the Company with respect to its CO 2 -EOR activities, including the Company's CO 2 -EOR pilot at Poplar (See Note 15 - Related Party Transactions ). Pursuant to the terms of a master services contract, as amended on November 4, 2015, Mi3 is entitled to a payment in the amount of $100 thousand , contingent upon the completion of a transaction resulting in the sale of Poplar to a third party, in addition to a fixed payment for certain services provided. |
Related Parties Transactions
Related Parties Transactions | 3 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 15 - Related Party Transactions Devizes International Consulting Limited . A director of Celtique, with which the Company co-owns equally several licenses in the UK, is also the sole owner of Devizes International Consulting Limited ("Devizes"). Devizes performs consulting related services to MPUK. The Company recorded $25 thousand and $81 thousand of consulting fees related to Devizes during the three months ended September 30, 2015 , and 2014 , respectively. Mervyn Cowie . Mervyn Cowie, a former employee of the Company's MPA subsidiary, currently serves both as a director of MPA and its subsidiaries and as a consultant to MPA. Since December 1, 2014, the recurring monthly fee payable to Mr. Cowie for his consulting services amounts to AUD $5,400 . Mi3 Petroleum Engineering . In association with its purchase of an option to acquire CO 2 from Farnham Dome, on August 14, 2014, the Company formed a subsidiary, Utah CO2. On December 1, 2014, two other non-controlling interest owners became members of Utah CO2, one of which is Mi4 Oil and Gas LLC ("Mi4"), a Colorado limited liability company majority owned by Mi3. Mi3 performs ongoing consulting work for both Utah CO2 and other Magellan entities. During the three months ended September 30, 2015 , the Company recorded $123 thousand of consolidated expense related to fees payable to Mi3 for services for the CO 2 -EOR Pilot. Mi3 was not a related party to the Company prior to December 1, 2014. |
Employee Retention and Severanc
Employee Retention and Severance Costs | 3 Months Ended |
Sep. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Employee Retention and Severance Costs | Note 16 - Employee Retention and Severance Costs The Company is required to record charges for one-time employee severance benefits and other associated costs as incurred. Incentive Agreements with Chief Financial Officer On October 12, 2015, the Company entered into a series of new incentive compensation agreements with Antoine J. Lafargue, the Company's Chief Financial Officer (the "CFO Incentive Agreements"). The CFO Incentive Agreements include i) amendments to the provisions for severance payments available to the CFO under his existing employment agreement dated October 31, 2014 (pursuant to an amendment of such employment agreement), to include provisions for the payment of up to two years' salary as severance in the event that the CFO’s employment with the Company is terminated under certain circumstances within a period ending ten months after the date on which a qualifying transaction (as generally defined below) occurs, capped at $600 thousand ; ii) a restricted stock award agreement whereby a restricted stock grant was made to the CFO on October 12, 2015 totaling 62,500 shares of common stock that are to vest immediately prior to the completion of a qualifying transaction; iii) a potential cash award pursuant to a transaction incentive agreement, which cash award is contingent upon the completion of a qualifying transaction and would range from $0 to $1 million based on the market value of the Company's common stock reflected in the qualifying transaction, with the amount of cash award to be equal to $2,750 for each one cent of market value per share of the Company’s common stock reflected in the qualifying transaction above a minimum market value threshold of $1.60 per share; iv) a phantom stock award, also pursuant to the transaction incentive agreement, with payment contingent upon completion of a qualifying transaction and to be based on the value of 62,500 notional shares; and v) an override bonus agreement which provides for a potential bonus outside of the Company’s 2012 Omnibus Incentive Compensation Plan that would double the amounts payable under the awards available under ii, iii, and iv, above, in certain circumstances. For purposes of the CFO Incentive Agreements, a qualifying transaction is generally defined to mean an acquisition of more than 50% of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, or the sale or other disposition of greater than 95% of the value of the gross assets of the Company, in either case occurring prior to December 31, 2017. No accrual has been made in the accompanying condensed consolidated financial statements for the CFO Incentive Agreements as amounts were contingent on the occurrence of future events and service. The Company does not consider the future events to meet the definition of "probable" due to the nature of the events being contingent upon third parties outside of the Company's control. Employee Retention Cash Bonus Plan On June 5, 2015, the Compensation, Nominating and Governance Committee of the Board of Directors of the Company and the Board of Directors of the Company approved a cash bonus plan for the Company's non-executive officer employees for the purpose of retention of certain key accounting, human resource, and administrative employees through certain key milestone events (the "Employee Retention Cash Bonus Plan"). The terms of the Employee Retention Cash Bonus Plan specify payment of retention bonuses for such employees upon the achievement of the milestones, which are i) the filing of the Company's annual report on Form 10-K for the year ended June 30, 2015 (which occurred in October, 2015), and ii) the completion of a strategic transaction. The maximum bonus payable to the employees under each of the milestones is as follows: i) $168 thousand , and ii) $286 thousand , respectively. As of September 30, 2015 , the Company has recorded an accrual in the amount of $440 thousand in the accompanying consolidated financial statements for the Employee Retention Cash Bonus Plan. Severance and Termination Benefit Payments On August 31, 2014, the Company provided a notice of termination to the only remaining employee of its MPA subsidiary. As a result, during the three months ended September 30, 2014 , the Company expensed and paid total employee-related severance costs of $475 thousand . |
Subsequent Events
Subsequent Events | 3 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 17 - Subsequent Events Incentive Agreements with Chief Financial Officer On October 12, 2015, the Company entered into a series of new incentive compensation agreements with Antoine J. Lafargue, the Company's Chief Financial Officer. Refer to Note 16 - Employee Retention and Severance Costs for further details. Partial Sale of Central Investment Beginning in July 2015, and through November 6, 2015 , the Company has sold 12.9 million shares of Central in the open market and generated approximately AUD $1.5 million (USD $1.1 million ) of proceeds. As of November 6, 2015 , the Company continues to own approximately 26.6 million shares of Central, which at the closing per share market price as of November 6, 2015 of AUD $0.240 and foreign exchange rate of 0.71 , represented approximately $4.6 million of potential liquidity. NASDAQ Listing Requirements On November 5, 2015, the Company received a letter from The NASDAQ Stock Market LLC ("NASDAQ") indicating that, based upon the closing bid price of the Company's common stock for the previous 30 consecutive business days, the common stock did not meet the minimum bid price of $1.00 per share required for continued listing on The NASDAQ Capital Market pursuant to NASDAQ Marketplace Rule 5550(a)(2). The letter also indicates that the Company will be provided with a compliance period of 180 calendar days, or until May 3, 2016, in which to regain compliance, pursuant to NASDAQ Marketplace Rule 5810(c)(3)(A). The letter further indicates that if, at any time during the 180-day compliance period, the closing bid price of the Common Stock is at least $1.00 for a minimum of ten consecutive business days, NASDAQ will provide the Company with written confirmation that it has achieved compliance with the minimum bid price requirement. The Company intends to continue to monitor the bid price levels for the Common Stock, and will consider appropriate alternatives to achieve compliance within the 180-day compliance period. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Magellan and its wholly owned subsidiaries, NP, MPUK, and MPA, and have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X published by the US Securities and Exchange Commission (the "SEC"). Accordingly, these interim unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete annual period financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. All intercompany transactions have been eliminated. Operating results for the three months ended September 30, 2015 , are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2016 . This report should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2015 (the "2015 Form 10-K"). All amounts presented are in US dollars, unless otherwise noted. Amounts expressed in Australian currency are indicated as "AUD." Certain amounts in our prior period financial statements have been reclassified to conform to the current period presentation. During the year ended June 30, 2015, the Company formed a majority owned subsidiary, Utah CO2 LLC, a Delaware limited liability company ("Utah CO2"), through which the Company purchased an option to acquire CO 2 at Farnham Dome in Utah. The Company owns a controlling 51% of the equity in Utah CO2 and consolidates this entity in the accompanying consolidated financial statements. The remaining 49% is owned by two separate third parties. Another third-party owns a 10% economic participation interest in the Company's 51% equity interest in Utah CO2, which participation interest does not bear any governance rights over the Company's investment in Utah CO2. The non-controlling interest reported in the accompanying consolidated financial statements relates to the non-controlling interest in this entity, including the participation interest. As of September 30, 2015 , the Company owned a 7.5% interest in Central Petroleum Limited (ASX:CTP) ("Central"), a Brisbane-based exploration and production company traded on the Australian Securities Exchange. The Company accounts for this investment as securities available-for-sale in the accompanying consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of oil and gas reserves, assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses, including stock-based compensation expense, during the reporting periods. Actual results could differ from those estimates. |
Foreign Currency Translation | Foreign Currency Translation The functional currency of our foreign subsidiaries is their local currency. Assets and liabilities of foreign subsidiaries are translated to US dollars at period-end exchange rates, and our unaudited condensed consolidated statements of operations and cash flows are translated at average exchange rates during the reporting periods. Resulting translation adjustments are recorded in accumulated other comprehensive income, a separate component of stockholders' equity. A component of accumulated other comprehensive income will be released into income when the Company executes a partial or complete sale of an investment in a foreign subsidiary or a group of assets of a foreign subsidiary considered a business and/or when the Company no longer holds a controlling financial interest in a foreign subsidiary or group of assets of a foreign subsidiary considered a business. Transactions denominated in currencies other than the local currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in foreign currency transaction gains and losses that are reflected in results of operations as unrealized (based on period end translation) or realized (upon settlement of the transactions) and reported under general and administrative expenses in the consolidated statements of operations. During the year ended June 30, 2015, the Company made a determination that it was no longer permanently invested in its foreign subsidiaries because (i) the Company has begun an effort to repay its intercompany balances through the repatriation of cash from these subsidiaries and (ii) the Company is increasingly focusing on its US operations. As such, the Company recorded on its statement of operations for the year ended June 30, 2015, an expense reclassification from accumulated other comprehensive loss arising from foreign currency exchange losses on its intercompany account balances. For the three months ended September 30, 2015 , the Company has continued to record foreign currency exchange gains and losses arising from its intercompany account balances in its condensed consolidated statement of operations. |
Securities available-for-sale | Securities available-for-sale Securities available-for-sale are comprised of investments in publicly traded securities and are carried at quoted market prices. Unrealized gains and losses are excluded from earnings and recorded as a component of accumulated other comprehensive loss in stockholders' equity, net of deferred income taxes. The Company recognizes gains or losses when securities are sold. On a quarterly basis, we perform an assessment to determine whether there have been any events or economic circumstances to indicate that a security with an unrealized loss has suffered an other-than-temporary impairment. The Company conducted this analysis as of September 30, 2015 , and determined that unrealized losses on its investment in Central during the three months ended September 30, 2015 were not of the nature of an other-than-temporary impairment, primarily due to certain announcements by Central regarding the achievement of certain strategic objectives, and the recovery of the market price of Central stock as of the date of the filing of this report to a level above its carrying value. Refer to Note 3 - Securities Available-for-Sale for further information. |
Oil and Gas Exploration and Production Activities and Impairment of Long-Lived Assets | Oil and Gas Exploration and Production Activities The Company follows the successful efforts method of accounting for its oil and gas exploration and production activities. Under this method, all property acquisition costs, and costs of exploratory and development wells are capitalized until a determination is made that the well has found proved reserves or is deemed noncommercial. If an exploratory well is deemed to be noncommercial, the well costs are charged to exploration expense as dry hole costs. Exploration expenses include dry hole costs, geological, and geophysical expenses. Non-commercial development well costs are charged to impairment expense if circumstances indicate that a decline in the recoverability of the carrying value may have occurred. The Company records its proportionate share in joint venture operations in the respective classifications of assets, liabilities, and expenses. The cost of CO 2 injection is capitalized until a production response is seen as a result of the injection and it is determined that the well has found proved reserves. After oil production from the well begins, CO 2 injection costs are expensed as incurred. Depreciation, depletion, and amortization ("DD&A") of capitalized costs related to proved oil and gas properties is calculated on a property-by-property basis using the units-of-production method based upon proved reserves. The computation of DD&A takes into consideration restoration, dismantlement, and abandonment costs as well as the anticipated proceeds from salvaging equipment. The sale of a partial interest in a proved oil and gas property is accounted for as normal retirement, and no gain or loss is recognized as long as the treatment does not significantly affect the units-of-production depletion rate. A gain or loss is recognized for all other sales of producing properties. Impairment of Long-Lived Assets The Company reviews the carrying amount of its oil and gas properties and unproved leaseholds for impairment whenever events and or changes in circumstances indicate that a decline in the recoverability of their carrying value may have occurred. The Company estimates the expected undiscounted future cash flows of its oil and gas properties and compares such undiscounted future cash flows to the carrying amount of the oil and gas properties to determine if the carrying amount is recoverable. If the carrying amount exceeds the estimated undiscounted future cash flows, the Company will adjust the carrying amount of the oil and gas properties to fair value. The factors used to determine fair value include, but are not limited to, recent sales prices of comparable properties, the present value of estimated future cash flows, net of estimated operating and development costs, using estimates of reserves, future commodity pricing, future production estimates, anticipated capital expenditures, and various discount rates commensurate with the risk and current market conditions associated with realizing the expected cash flows projected. There were no significant changes in circumstances during the quarter ended September 30, 2015 , that would indicate that the oil and gas properties carrying values were further impaired. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of the assets acquired net of the fair value of liabilities assumed in an acquisition. GAAP requires goodwill to be evaluated on an annual basis for impairment, or more frequently if events occur or circumstances change that could potentially result in impairment. For the three months ended September 30, 2015 , there were no significant changes in events or circumstances that suggested further potential impairment of the Company's goodwill balances at September 30, 2015 . |
Asset Retirement Obligations | Asset Retirement Obligations The Company recognizes an estimated liability for future costs associated with the plugging and abandonment of its oil and gas properties. A liability for the fair value of an asset retirement obligation and corresponding increase in the carrying value of the related long-lived asset are recorded at the time a well is acquired or the liability to plug is legally incurred. The increase in carrying value is included in proved oil and gas properties in the accompanying condensed consolidated balance sheets. The Company depletes the amount added to proved oil and gas property costs, net of estimated salvage values, and recognizes expense in connection with the accretion of the discounted liability over the remaining estimated economic lives of the respective oil and gas properties. |
Revenue Recognition | Revenue Recognition The Company derives revenue primarily from the sale of produced oil. Oil revenues are recognized when production is sold to a purchaser at a fixed or determinable price, when delivery has occurred and title has transferred, and collection of the revenue is probable. |
Major Customers | Major Customers The Company's consolidated oil production revenue is derived from its NP segment and was generated from a single customer for the three months ended September 30, 2015 and 2014 . |
Stock Based Compensation | Stock Based Compensation Stock option grants may contain time based, market based, or performance based vesting provisions. Time based options ("TBOs") are expensed on a straight-line basis over the vesting period. Market based options ("MBOs") are expensed on a straight-line basis over the derived service period, even if the market condition is not achieved. Performance based options ("PBOs") are amortized on a straight-line basis between the date upon which the achievement of the relevant performance condition is deemed probable and the date the performance condition is expected to be achieved. Management re-assesses whether achievement of performance conditions is probable at the end of each reporting period. If changes in the estimated outcome of the performance conditions affect the quantity of the awards expected to vest, the cumulative effect of the change is recognized in the period of change. The fair value of the stock options is determined on the grant date and is affected by our stock price and other assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the term of the awards, risk free interest rates, expected dividends, and the expected option exercise term. The Company estimates the fair value of PBOs and time based stock options using the Black-Scholes-Merton pricing model. The simplified method is used to estimate the expected term of stock options due to a lack of related historical data regarding exercise, cancellation, and forfeiture. For MBOs, the fair value is estimated using Monte Carlo simulation techniques. |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Comprehensive loss is presented net of applicable income taxes in the accompanying condensed consolidated balance sheets and statements of stockholders' equity and comprehensive loss. Other comprehensive loss is comprised of revenues, expenses, gains, and losses that under GAAP are reported as separate components of stockholders' equity instead of net loss. |
Loss per Common Share | Loss per Common Share Income and losses per common share are based upon the weighted average number of common and common equivalent shares outstanding during the period. The effects of potentially dilutive securities in the determinations of diluted earnings per share are the dilutive effect of stock options, non-vested restricted stock, and the shares of Series A Preferred Stock. The potentially dilutive impact of stock options is determined using the treasury stock method. The potentially dilutive impact of the shares of Series A Preferred Stock is determined using the if-converted method. In applying the if-converted method, conversion is not assumed for purposes of computing dilutive shares if the effect would be anti-dilutive. The Series A Preferred Stock is convertible at a rate of one common share for one preferred share, multiplied by an applicable conversion ratio. We did not include any stock options, nor common stock issuable upon the conversion of the Series A Preferred Stock in the calculation of diluted loss per share during each of the three months ended September 30, 2015 , and 2014 , as their effect would have been antidilutive. |
Segment Information | Segment Information As of June 30, 2015 , the Company determined, based on the criteria of ASC Topic 280, that it operates in three segments, NP, MPUK, and MPA, as well as a head office, Magellan ("Corporate"), which is treated as a cost center. As of September 30, 2015 , these three operating segments met the minimum quantitative threshold to qualify for separate segment reporting. The Company's chief operating decision maker is J. Thomas Wilson (President and CEO of the Company), who reviews the results and manages operations of the Company in the three reporting segments of NP, MPUK, and MPA, as well as Corporate. The presentation of all segment information herein reflects the manner in which the Company's management monitors performance and allocates resources. For information pertaining to our reporting segments, see Note 12 - Segment Information , and Part II, Item 8 of our 2015 Form 10-K . |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In August 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-15, which amends presentation and disclosure requirements outlined in ASU 2015-03 (discussed below) by clarifying guidance for debt issuance costs related to line of credit arrangements, providing that the SEC would not object to presentation of debt issuance costs related to a line of credit arrangement as an asset, and amortizing them ratably over the term of the line of credit arrangement. The Company does not expect adoption of ASU 2015-15 to have a material effect on its condensed consolidated financial statements. In August 2015, the FASB issued ASU No. 2015-14, which defers the effective date of ASU 2014-09 (discussed below) by one year, and would allow entities the option to early adopt the new revenue standard as of the original effective date. In July 2015, the FASB issued ASU No. 2015-11, which requires that inventory that is measured using first-in, first-out or average cost method be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The standard will be effective for the first interim period within the Company's fiscal year beginning after December 15, 2016 and is required to be adopted prospectively; early adoption is permitted. The Company does not expect the adoption of this accounting standard to have a significant impact on its condensed consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, which requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability, similar to the presentation of debt discounts. Prior to the issuance of ASU 2015-03, debt issuance costs were required to be presented as deferred charge assets, separate from the related debt liability. ASU 2015-03 does not change the recognition and measurement requirements for debt issuance costs. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015, and early adoption is permitted. At September 30, 2015, adoption of this standard would have resulted in a reclassification from other long term assets to note payable of $71 thousand on the Company's accompanying condensed consolidated balance sheet. In August 2014, the FASB issued ASU No. 2014-15, which provides guidance on management’s responsibility to evaluate whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for fiscal years ending after December 15, 2016, and annual and interim periods thereafter. The Company is evaluating the impact of the adoption of this standard on its condensed consolidated financial statements. In June 2014, the FASB issued ASU No. 2014-12, which requires a reporting entity to treat a performance target included within a share-based payment award that affects vesting and that could be achieved after the requisite service period as a performance condition. It is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. ASU 2014-12 may be adopted either prospectively for share-based payment awards granted or modified on or after the effective date, or retrospectively, using a modified retrospective approach. The modified retrospective approach would apply to share-based payment awards outstanding as of the beginning of the earliest annual period presented in the financial statements on adoption, and to all new or modified awards thereafter. The Company has chosen to early adopt this standard retrospectively to July 1, 2013, which adoption did not impact the Company's consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, which establishes a comprehensive new revenue recognition standard designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In doing so, companies may need to use more judgment and make more estimates than under current revenue recognition guidance. The ASU allows for the use of either the full or modified retrospective transition method, and the standard, as amended by ASU 2015-14 discussed above, will be effective for us in the first quarter of our fiscal year 2019; unless early adopted in the prior fiscal year as permitted under the amendment. The Company is currently evaluating the timing of adoption, which transition approach to use and the impact of the adoption of this standard on its consolidated financial statements. |
Securities Available-for-Sale (
Securities Available-for-Sale (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-sale Securities | The following table presents the amortized cost, gross unrealized gains, gross unrealized losses, and fair market value of available-for-sale equity securities, nearly all of which are attributable to the Company's investment in Central stock, as follows: September 30, 2015 Amortized cost Gross unrealized gains Gross unrealized losses Fair value (In thousands) Equity securities $ 2,950 $ — $ (1,049 ) $ 1,901 June 30, 2015 Amortized cost Gross unrealized gains Gross unrealized losses Fair value (In thousands) Equity securities $ 4,230 $ — $ — $ 4,230 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations Roll-Forward | The following table summarizes the ARO activity for the three months ended September 30, 2015 : Total (In thousands) Fiscal year opening balance $ 2,647 Accretion expense 42 Effect of exchange rate changes — Balance at September 30, 2015 2,689 Less current asset retirement obligation — Long term asset retirement obligation $ 2,689 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of recurring assets and liabilities | The following table presents items required to be measured at fair value on a recurring basis as of the periods presented: September 30, 2015 Level 1 Level 2 Level 3 Total (In thousands) Assets: Securities available-for-sale $ 1,901 $ — $ — $ 1,901 Liabilities: Contingent consideration payable (1) $ — $ — $ — $ — June 30, 2015 Level 1 Level 2 Level 3 Total (In thousands) Assets: Securities available-for-sale $ 4,230 $ — $ — $ 4,230 Liabilities: Contingent consideration payable (1) $ — $ — $ — $ — (1) See Note 14 - Commitments and Contingencies , below for additional information about this item. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option Activity | The following table summarizes the stock option activity for the three months ended September 30, 2015 : Number of Shares WAEPS (1) Fiscal year opening balance 1,032,334 $11.15 Granted — $0.00 Exercised — $0.00 Forfeited/canceled (6,250 ) $8.40 Expired (33,333 ) $8.96 Balance at September 30, 2015 992,751 $11.25 Weighted average remaining contractual term 5.47 years (1) Weighted average exercise price per share |
Preferred Stock (Tables)
Preferred Stock (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Schedule of Preferred Stock Activity | The activity related to the Series A Preferred Stock for the three months ended September 30, 2015 , and the fiscal year ended June 30, 2015 , is as follows: THREE MONTHS ENDED FISCAL YEAR ENDED September 30, 2015 June 30, 2015 Number of shares Amount Number of shares Amount (In thousands, except share amounts) Fiscal year opening balance 21,162,697 $ 25,850 20,089,436 $ 24,539 Current year PIK dividend shares issued 370,347 452 1,073,261 1,311 Balance at end of period 21,533,044 $ 26,302 21,162,697 $ 25,850 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Treasury Stock Activity | The following table summarizes the Company's treasury stock activity as follows: THREE MONTHS ENDED FISCAL YEAR ENDED September 30, 2015 June 30, 2015 Number of shares Amount Number of shares Amount (In thousands, except share amounts) Fiscal year opening balance 1,209,389 $ 9,806 1,178,139 $ 9,344 Shares repurchased from former executive — — 31,250 462 Net shares repurchased for employee tax and option exercise price obligations related to the vesting of restricted stock and the exercise of employee stock options 2,822 10 5,981 104 Net shares repurchased to eliminate fractional shares in July 10, 2015 one share for eight shares reverse stock split 2,284 6 — — Cancellation of shares repurchased (5,106 ) (16 ) (5,981 ) (104 ) Balance at end of period 1,209,389 $ 9,806 1,209,389 $ 9,806 |
Loss Per Common Share (Tables)
Loss Per Common Share (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table summarizes the computation of basic and diluted loss per share: THREE MONTHS ENDED September 30, 2015 2014 (In thousands, except share and per share amounts) Net loss $ (3,063 ) $ (2,627 ) Preferred stock dividend (452 ) (430 ) Net loss, including preferred stock dividends (3,515 ) (3,057 ) Net loss attributable to non-controlling interest in subsidiary 12 — Net loss attributable to common stockholders $ (3,503 ) $ (3,057 ) Basic weighted average shares outstanding 5,702,780 5,706,860 Add: dilutive effects of in-the-money stock options — — Diluted weighted average common shares outstanding 5,702,780 5,706,860 Basic loss per common share: Net loss attributable to Magellan Petroleum Corporation, including preferred stock dividends $(0.61) $(0.54) Net loss attributable to common stockholders $(0.61) $(0.54) Diluted loss per common share: Net loss attributable to Magellan Petroleum Corporation, including preferred stock dividends $(0.61) $(0.54) Net loss attributable to common stockholders $(0.61) $(0.54) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Potentially dilutive securities excluded from the calculation of diluted shares outstanding in periods with net losses are as follows: THREE MONTHS ENDED September 30, 2015 2014 In-the-money stock options — 368,078 Common shares issuable upon conversion of Series A Preferred Stock 2,690,553 2,510,174 Total 2,690,553 2,878,252 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The Company conducts its operations through three wholly owned subsidiaries: NP, which operates in the US; MPUK, which includes our operations in the UK; and MPA, which includes our operations in Australia. Oversight for these subsidiaries is provided by Corporate, which is treated as a cost center. THREE MONTHS ENDED September 30, 2015 2014 (In thousands) Revenue from oil production: NP $ 649 $ 1,590 Net (loss) income: NP $ (804 ) $ 113 MPUK (187 ) (432 ) MPA (397 ) (635 ) Corporate (1,680 ) (1,673 ) Inter-segment elimination 5 — Consolidated net loss $ (3,063 ) $ (2,627 ) September 30, 2015 June 30, 2015 (In thousands) Total assets: NP $ 36,931 $ 37,130 MPUK 2,012 2,373 MPA 2,426 4,593 Corporate 79,596 79,474 Inter-segment elimination (1) (76,885 ) (76,870 ) Total assets $ 44,080 $ 46,700 (1) Asset inter-segment eliminations are primarily derived from investments in subsidiaries. |
Oil and Gas Activities (Tables)
Oil and Gas Activities (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
Cost Incurred in Oil and Gas Property Acquisition, Exploration, and Development Activities Disclosure | The following table presents the capitalized costs under the successful efforts method for oil and gas properties as of: September 30, June 30, (In thousands) Proved oil and gas properties: United States $ 20,851 $ 20,857 Less accumulated depletion, depreciation, and amortization (4,481 ) (4,355 ) Total net proved oil and gas properties $ 16,370 $ 16,502 Unproved oil and gas properties: United States $ 468 $ 468 United Kingdom 232 241 Australia — — Total unproved oil and gas properties $ 700 $ 709 Wells in Progress: United States $ 18,880 $ 18,560 United Kingdom 1,071 1,100 Total wells in progress $ 19,951 $ 19,660 |
Basis of Presentation (Details)
Basis of Presentation (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2015USD ($)segmentshares | Sep. 30, 2014USD ($) | Jun. 30, 2015USD ($)segment | Jun. 30, 2014USD ($) | Mar. 31, 2014 | |
Schedule of Equity Method Investments [Line Items] | |||||
Number of operating segments | segment | 3 | ||||
Net loss from operations | $ 2,759 | $ 2,690 | |||
Working capital | (332) | $ 3,900 | |||
Cash and cash equivalents | $ 658 | $ 10,773 | $ 1,051 | $ 16,422 | |
Number of reportable segments | segment | 3 | 3 | |||
Shares issued upon conversion | shares | 1 | ||||
Other long term assets | $ (1,065) | $ (1,045) | |||
Utah CO2 LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Majority interest percentage | 51.00% | ||||
Central Petroleum Limited | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 7.50% | 11.00% | |||
Two separate third parties | Utah CO2 LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 49.00% | ||||
Third party owner | Utah CO2 LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 10.00% | ||||
Adjustments for New Accounting Principle, Early Adoption | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Other long term assets | $ 71 | ||||
Notes payable | $ 71 |
Sale of Amadeus Basin Assets (D
Sale of Amadeus Basin Assets (Details) | Mar. 31, 2014AUDshares | Sep. 30, 2015AUDAUD / Gigajoule |
Central Petroleum Limited | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Ownership percentage | 11.00% | 7.50% |
Amadeus Basin | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Amount paid in exchange for assets | AUD 20,000,000 | |
Customary purchase price adjustments | AUD 800,000 | |
Discount rate | 10.00% | |
Amadeus Basin | Maximum | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Bonus discharge amount | AUD 7,000,000 | |
Amadeus Basin | Palm Valley | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Royalty rate | 25.00% | |
AUD/Gigajoule gas price trigger for first ten years | AUD / Gigajoule | 5 | |
AUD/Gigajoule gas price trigger for following five years | AUD / Gigajoule | 6 | |
Royalty rate term, following 5 years | 10 years | |
Royalty rate term, first 10 years | 5 years | |
Amadeus Basin | Central Petroleum Limited | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Shares issued during period for acquisitions | shares | 39,500,000 |
Securities Available-for-Sale38
Securities Available-for-Sale (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2015 | Sep. 30, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 4,230 | $ 2,950 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | (1,049) |
Fair value | 4,230 | $ 1,901 |
Central Petroleum Limited | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Impairment on AFS securities | $ 14,900 |
Debt (Details)
Debt (Details) - USD ($) | Sep. 17, 2015 | Jun. 30, 2015 | Sep. 17, 2014 |
Premium Note | |||
Debt Instrument [Line Items] | |||
Interest payment | $ 12,000 | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 8,000,000 | ||
Outstanding principal | $ 5,500,000 | ||
Prime Rate | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Variable rate floor | 3.25% | ||
Line of Credit | Term Loan | |||
Debt Instrument [Line Items] | |||
Amortization period of principal | 4 years | ||
Line of Credit | Prime Rate | Term Loan | |||
Debt Instrument [Line Items] | |||
Variable rate floor | 4.75% | ||
Basis spread on variable rate | 1.50% | ||
Note Payable | Premium Note | |||
Debt Instrument [Line Items] | |||
Amortization period of principal | 9 months | ||
Principal amount | $ 108,000 | ||
Interest rate | 6.50% | ||
Principal payment | $ 12,000 |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Fiscal year opening balance | $ 2,647 | ||
Accretion expense | 42 | ||
Effect of exchange rate changes | 0 | ||
Ending balance | $ 2,647 | $ 2,689 | $ 2,647 |
Less current asset retirement obligation | 0 | ||
Long term asset retirement obligation | $ 2,689 | $ 2,647 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets and Liabilities Carried at Fair Value by Classification Level in Valuation Hierarchy) (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2015 | Jun. 30, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available-for-sale | $ 1,901,000 | $ 4,230,000 |
Rolling gross production average | 60 days | |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available-for-sale | $ 1,901,000 | |
Contingent consideration payable | 4,230,000 | |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available-for-sale | 1,901,000 | 4,230,000 |
Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable | $ 0 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 0.00% | 0.00% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 01, 2015 | Oct. 10, 2014 | Jul. 01, 2014 | Oct. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Jan. 16, 2013 | Jan. 15, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of stock options exercised | 0 | 36,067 | ||||||
Issuance of common stock (in shares) | 28,154 | |||||||
Number of stock options forfeited/canceled | 6,250 | 144,010 | ||||||
Stock issued, in shares | 0 | |||||||
Expired (in shares) | 33,333 | 0 | ||||||
Exercise price of options (in dollars per share) | $ 0 | |||||||
Employee Stock Option | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expense (reversal of expense) | $ (30) | |||||||
Unrecorded expected future compensation expense related to stock option awards | $ 796 | $ 757 | ||||||
Employee Stock Option | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Maximum number of shares allowed to be issued each year | 125,000 | |||||||
RSUs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Maximum number of shares allowed to be issued each year | 62,500 | |||||||
2012 Stock Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares authorized | 625,000 | |||||||
Expiration term | 10 years | |||||||
1998 Stock Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares authorized | 36,054 | |||||||
1998 Stock Incentive Plan | Employee Stock Option | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Market based and performance based shares available for future issuance | 175,703 | |||||||
1998 Stock Incentive Plan | MBOs and PBOs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Nonvested options outstanding (in shares) | 332,028 | |||||||
Former executive | 1998 Stock Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares repurchased during period | 31,250 | 189,062 | ||||||
Non-employee Directors | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of stock options exercised | 2,734 | |||||||
Cash award alternative | $ 35 | |||||||
Accrual of non-employee service based compensation | $ 175 | |||||||
Non-employee Directors | Employee Stock Option | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expense (reversal of expense) | $ 35 | |||||||
Non-employee Directors | Common Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Grants in period | 12,041 | |||||||
Selling, General and Administrative Expense | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expense (reversal of expense) | 108 | $ 44 | ||||||
Selling, General and Administrative Expense | Prior Period Awards | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation expense (reversal of expense) | $ 138 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Option Activity) (Details) - $ / shares | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Number of Shares | ||
Balance at beginning of year (in shares) | 1,032,334 | |
Granted (in shares) | 0 | |
Exercised (in shares) | 0 | (36,067) |
Forfeited/canceled (in shares) | (6,250) | (144,010) |
Expired (in shares) | (33,333) | 0 |
Options outstanding at year end (in shares) | 992,751 | |
Weighted average remaining contractual term | 5 years 5 months 19 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Weighted Average Exercise Price per Share, Balance at beginning of year (in dollars per share) | $ 11.15 | |
Weighted Average Exercise Price per Share, Granted (in dollars per share) | 0 | |
Weighted Average Exercise Price per Share, Exercised (in dollars per share) | 0 | |
Weighted Average Exercise Price Per Share, Forfeited (in dollars per share) | 8.40 | |
Weighted Average Exercise Price Per Share, Expired (in dollars per share) | 8.96 | |
Weighted Average Exercise Price per Share, Options outstanding at year end (in dollars per share) | $ 11.25 |
Preferred Stock (Details)
Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | May. 10, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Jul. 10, 2015 |
Class of Stock [Line Items] | |||||
Shares issued upon conversion | 1 | ||||
Preferred stock dividend | $ 452 | ||||
Preferred stock dividends paid in kind | 452 | $ 0 | |||
Series A Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Issuance of Series A Preferred Stock | 19,239,734 | ||||
Preferred stock, par value (in dollars per share) | $ 0.01 | ||||
Purchase price (in dollars per share) | $ 1.22149381 | ||||
Shares issued upon conversion | 1 | ||||
Shares issued upon conversion, adjust conversion price (in dollars per share) | $ 9.77586545 | ||||
Proceeds fro issuance of preferred stock | $ 23,500 | ||||
Preferred stock dividend | 452 | $ 430 | |||
Preferred stock dividends paid in kind | $ 452 | $ 1,311 |
Preferred Stock (Roll-Forward)
Preferred Stock (Roll-Forward) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | |
Amount | |||
Fiscal year opening balance | $ 25,850 | ||
Current year PIK dividend shares issued | 452 | $ 0 | |
Balance at end of period | $ 26,302 | ||
Series A Preferred Stock | |||
Number of shares | |||
Fiscal year opening balance | 21,162,697 | 20,089,436 | |
Current year PIK dividend shares issued | 370,347 | 1,073,261 | |
Balance at end of period | 21,533,044 | 20,089,436 | |
Amount | |||
Fiscal year opening balance | $ 25,850 | $ 24,539 | |
Current year PIK dividend shares issued | $ 452 | $ 1,311 | |
Balance at end of period | $ 24,539 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ in Thousands | Jul. 10, 2015shares | Jul. 01, 2015USD ($)shares | Oct. 10, 2014shares | Jul. 01, 2014USD ($)shares | Oct. 31, 2014shares | Sep. 30, 2015USD ($)shares | Jun. 30, 2015USD ($)shares | Jun. 30, 2014USD ($)shares |
Class of Stock [Line Items] | ||||||||
Reverse stock split | 0.125 | 0.125 | ||||||
Treasury Stock [Roll Forward] | ||||||||
Fiscal year opening balance (in shares) | 1,209,389 | 1,178,139 | 1,209,389 | 1,178,139 | ||||
Shares repurchased from former executive (in shares) | 0 | 31,250 | ||||||
Net shares repurchased for employee tax and option exercise price obligations related to the vesting of restricted stock and the exercise of employee stock options (in shares) | 2,822 | 5,981 | ||||||
Net shares repurchased to eliminate fractional shares in July 10, 2015 one share for eight shares reverse stock split (in shares) | 2,284 | 0 | ||||||
Cancellation of shares repurchased (in shares) | (5,106) | (5,981) | ||||||
Balance at end of period (in shares) | 1,209,389 | 1,209,389 | 1,178,139 | |||||
Fiscal year opening balance | $ | $ 9,806 | $ 9,344 | $ 9,806 | $ 9,344 | ||||
Shares repurchased from former executive | $ | 0 | 462 | ||||||
Net shares repurchased for employee tax and option exercise price obligations related to the vesting of restricted stock and the exercise of employee stock options | $ | 10 | $ 104 | ||||||
Net shares repurchased to eliminate fractional shares in July 10, 2015 one share for eight shares reverse stock split | $ | 6 | 0 | ||||||
Cancellation of shares repurchased | $ | (16) | (104) | ||||||
Balance at end of period | $ | $ 9,806 | $ 9,806 | $ 9,344 | |||||
RSUs | ||||||||
Treasury Stock [Roll Forward] | ||||||||
Net shares repurchased for employee tax and option exercise price obligations related to the vesting of restricted stock and the exercise of employee stock options (in shares) | 2,284 | |||||||
Restricted Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Vested restricted stock award (in shares) | 12,500 | 18,750 | ||||||
Treasury Stock [Roll Forward] | ||||||||
Net shares repurchased for employee tax and option exercise price obligations related to the vesting of restricted stock and the exercise of employee stock options (in shares) | 2,822 | 5,981 | ||||||
1998 Stock Incentive Plan | Former executive | ||||||||
Class of Stock [Line Items] | ||||||||
Stock Repurchased During Period, Shares | 31,250 | 189,062 |
Loss Per Common Share (Details)
Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (3,063) | $ (2,627) |
Preferred stock dividends | (452) | (430) |
Net loss, including preferred stock dividends | (3,515) | (3,057) |
Net loss attributable to non-controlling interest in subsidiary | 12 | 0 |
Net loss attributable to common stockholders | $ (3,503) | $ (3,057) |
Basic weighted average shares outstanding | 5,702,780 | 5,706,860 |
Add: dilutive effects of in-the-money stock options | 0 | 0 |
Diluted weighted average common shares outstanding | 5,702,780 | 5,706,860 |
Basic loss per common share: | ||
Net Loss attributable to Magellan Petroleum Corporation (in dollars per share) | $ (0.61) | $ (0.54) |
Net loss attributable to common stockholders (in dollars per share) | (0.61) | (0.54) |
Diluted loss per common share: | ||
Net Loss attributable to Magellan Petroleum Corporation (in dollars per share) | (0.61) | (0.54) |
Net loss attributable to common stockholders (in dollars per share) | $ (0.61) | $ (0.54) |
Loss Per Common Share (Schedule
Loss Per Common Share (Schedule of Antidilutive Securities) (Details) - shares | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 2,690,553 | 2,878,252 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 0 | 368,078 |
Convertible Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 2,690,553 | 2,510,174 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) | Jun. 30, 2015USD ($)segment | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 3 | 3 | |
Loss from continuing operations | $ (3,063) | $ (2,627) | |
Consolidated net loss from continuing operations | (3,063) | (2,627) | |
Total assets | 44,080 | $ 46,700 | |
Nautilus Poplar, LLC (NP) | |||
Segment Reporting Information [Line Items] | |||
Revenue from oil production | 649 | 1,590 | |
Loss from continuing operations | (804) | 113 | |
Total assets | 36,931 | 37,130 | |
Magellan Petroleum UK (MPUK) | |||
Segment Reporting Information [Line Items] | |||
Loss from continuing operations | (187) | (432) | |
Total assets | 2,012 | 2,373 | |
Magellan Petroleum Australia (MPA) | |||
Segment Reporting Information [Line Items] | |||
Loss from continuing operations | (397) | (635) | |
Total assets | 2,426 | 4,593 | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Loss from continuing operations | (1,680) | (1,673) | |
Total assets | 79,596 | 79,474 | |
Inter-segment Elimination | |||
Segment Reporting Information [Line Items] | |||
Loss from continuing operations | 5 | $ 0 | |
Total assets | $ (76,885) | $ (76,870) |
Oil and Gas Activities (Details
Oil and Gas Activities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 |
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items] | ||
Proved oil and gas properties | $ 20,851 | $ 20,857 |
Unproved oil and gas properties | 700 | 709 |
Wells in progress | 19,951 | 19,660 |
United States | ||
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items] | ||
Proved oil and gas properties | 20,851 | 20,857 |
Less accumulated depletion, depreciation, and amortization | (4,481) | (4,355) |
Total net proved oil and gas properties | 16,370 | 16,502 |
Unproved oil and gas properties | 468 | 468 |
Wells in progress | 18,880 | 18,560 |
United Kingdom | ||
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items] | ||
Unproved oil and gas properties | 232 | 241 |
Wells in progress | 1,071 | 1,100 |
Australia | ||
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items] | ||
Unproved oil and gas properties | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) £ in Thousands, AUD in Thousands | Jan. 14, 2013shares | Jul. 31, 2015USD ($) | Jun. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015GBP (£) | Jun. 30, 2015USD ($) | Jun. 30, 2015GBP (£) | Nov. 04, 2015USD ($) | Jun. 30, 2015AUD | Sep. 30, 2011USD ($) |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Percent of interest in contingent payments | 52.00% | |||||||||
Accrued income taxes | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | |||||||
Nautilus Purchase and Sale Agreement (PSA) | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Future contingent production payments payable | $ 5,000,000 | |||||||||
Sopak Collateral Agreement | Common Stock | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Number of shares available for purchase | shares | 1,158,080 | |||||||||
Sopak Collateral Agreement | Warrant | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Number of shares available for purchase | shares | 543,478 | |||||||||
Petrie Partners, LLC | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Contingent financial adviser fees | $ 0 | |||||||||
Contingent financial adviser fees, percentage of transaction | 3.00% | 3.00% | 3.00% | |||||||
MI3 | Subsequent Event | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Contingent bonuses payable | $ 100,000 | |||||||||
NT/P82 Seismic Survey, Geotechnical Studies | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Estimated costs for other commitments | AUD | AUD 500 | |||||||||
NT/P82 Seismic Survey, Drilling of Exploration Well | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Estimated costs for other commitments | AUD | 25,000 | |||||||||
NT/P82 Seismic Survey, Completion of Seismic Survey | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Estimated costs for other commitments | AUD | AUD 16,000 | |||||||||
Engagement of RFC Ambrian as financial advisor for farmout of NT/P82 | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Cash payment to financial adviser, payment one | $ 20,000 | |||||||||
Cash payments to financial adviser, payment two | 80,000 | |||||||||
Contingent financial adviser fees | $ 250,000 | |||||||||
Contingent financial adviser fees, percentage of transaction | 5.00% | |||||||||
Magellan Petroleum UK (MPUK) | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Ownership percentage | 50.00% | |||||||||
Celtique Claim | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Payment sought by plaintiff | $ 2,300,000 | £ 1,500 | ||||||||
Percentage above base rate payment | 5.00% | |||||||||
Closing costs paid by plaintiff | $ 94,000 | £ 60 | ||||||||
Capitalized costs related to petroleum license | $ 919,000 |
Related Parties Transactions (D
Related Parties Transactions (Details) $ in Thousands | 3 Months Ended | 4 Months Ended | |
Sep. 30, 2015USD ($)owner | Sep. 30, 2014USD ($) | Mar. 31, 2015AUD | |
Devizes International Consulting Limited | Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Amount of transaction | $ 25 | $ 81 | |
MPA | Compensation Arrangement | Director | |||
Related Party Transaction [Line Items] | |||
Amount of transaction | AUD | AUD 5,400 | ||
MI3 | Compensation Arrangement | Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Amount of transaction | $ 123 | ||
Utah CO2 LLC | MI4 Oil and Gas LLC | |||
Related Party Transaction [Line Items] | |||
Number of noncontrolling interest owners | owner | 1 |
Employee Retention and Severa54
Employee Retention and Severance Costs (Details) - USD ($) | Oct. 12, 2015 | Sep. 30, 2015 | Jun. 05, 2015 |
General and Administrative Expense | Employee Severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 475,000 | ||
CFO Incentive Agreements | Subsequent Event | |||
Restructuring Cost and Reserve [Line Items] | |||
Salary cap under incentive plan | $ 600,000 | ||
Former executive | Restricted Stock | CFO Incentive Agreements | Subsequent Event | |||
Restructuring Cost and Reserve [Line Items] | |||
Shares granted under plan | 62,500 | ||
Former executive | Phantom Stock | CFO Incentive Agreements | Subsequent Event | |||
Restructuring Cost and Reserve [Line Items] | |||
Shares granted under plan | 62,500 | ||
Employees | Employee Retention Cash Bonus Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrual of bonuses | $ 440,000 | ||
Common Stock | CFO Incentive Agreements | Subsequent Event | |||
Restructuring Cost and Reserve [Line Items] | |||
Minimum market value threshold (in dollars per share) | $ 1.60 | ||
Minimum | Common Stock | CFO Incentive Agreements | Subsequent Event | |||
Restructuring Cost and Reserve [Line Items] | |||
Market value of stock tied to contingent cash payment | $ 0 | ||
Maximum | Common Stock | CFO Incentive Agreements | Subsequent Event | |||
Restructuring Cost and Reserve [Line Items] | |||
Market value of stock tied to contingent cash payment | 1,000,000 | ||
Cash award for each market share | $ 2,750 | ||
Bonus Contingent Upon Filing of 10K | Employees | Employee Retention Cash Bonus Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Deferred bonuses contingent upon milestones | $ 168,000 | ||
Bonus Contingent Upon Closing Date of Strategic Transaction | Employees | Employee Retention Cash Bonus Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Deferred bonuses contingent upon milestones | $ 286,000 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, shares in Millions, AUD in Millions, $ in Millions | Nov. 06, 2015USD ($)$ / shares$ / AUDshares | Nov. 06, 2015AUD | Sep. 30, 2015$ / shares | Jun. 30, 2015$ / shares |
Subsequent Event [Line Items] | ||||
Current share price (in dollars per share) | $ 0.01 | $ 0.01 | ||
Central Petroleum Limited | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Investment owned, number of shares | shares | 12.9 | |||
Current share price (in dollars per share) | $ 0.240 | |||
Foreign exchange rate | $ / AUD | 0.71 | |||
Potential liquidity | $ | $ 4.6 | |||
Central Petroleum Limited | Amadeus Basin | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Proceeds from sale of shares | $ 1.1 | AUD 1.5 |