Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 30, 2020 | |
Document Documentand Entity Information [Abstract] | ||
Security Exchange Name | NASDAQ | |
Entity Tax Identification Number | 23-1184320 | |
Entity File Number | 1-13283 | |
Entity Address, Address Line One | 16285 PARK TEN PLACE, SUITE 500 | |
Entity Address, City or Town | HOUSTON | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77084 | |
City Area Code | 713 | |
Local Phone Number | 722-6500 | |
Entity Incorporation, State or Country Code | VA | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Title of 12(b) Security | Common Stock, $0.01 Par Value | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Sep. 30, 2020 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | PVAC | |
Entity Registrant Name | PENN VIRGINIA CORP | |
Entity Central Index Key | 0000077159 | |
Current Fiscal Year End Date | --12-31 | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 15,200,435 | |
Entity Emerging Growth Company | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues | ||||
Gain on sales of assets, net | $ 0 | $ 77 | $ 14 | $ 118 |
Total revenues | 69,411 | 119,304 | 206,272 | 347,299 |
Operating expenses | ||||
Lease operating | 8,275 | 11,868 | 27,901 | 33,234 |
Gathering, processing and transportation | 5,760 | 6,600 | 16,797 | 16,937 |
Production and ad valorem taxes | 4,368 | 7,401 | 13,152 | 20,672 |
General and administrative | 8,585 | 6,876 | 23,801 | 20,173 |
Asset Impairment Charges | 235,989 | 0 | 271,498 | 0 |
Depreciation, depletion and amortization | 37,038 | 46,519 | 114,891 | 129,687 |
Total operating expenses | 300,015 | 79,264 | 468,040 | 220,703 |
Operating income (loss) | (230,604) | 40,040 | (261,768) | 126,596 |
Other income (expense) | ||||
Interest expense | (7,497) | (8,736) | (24,213) | (27,270) |
Derivatives | (6,891) | 24,248 | 109,879 | (30,166) |
Other, net | 21 | (248) | (42) | (134) |
Income (loss) before income taxes | (244,971) | 55,304 | (176,144) | 69,026 |
Income tax benefit (expense) | 1,558 | (942) | 1,110 | (1,736) |
Net income (loss) attributable to common shareholders | $ (243,413) | $ 54,362 | $ (175,034) | $ 67,290 |
Net income (loss) per share: | ||||
Basic (in dollars per share) | $ (16.03) | $ 3.60 | $ (11.54) | $ 4.45 |
Diluted (in dollars per share) | $ (16.03) | $ 3.59 | $ (11.54) | $ 4.44 |
Weighted average shares outstanding – basic (in shares) | 15,183 | 15,110 | 15,168 | 15,105 |
Weighted average shares outstanding – diluted (in shares) | 15,183 | 15,160 | 15,168 | 15,165 |
Oil and Gas, Exploration and Production [Member] | ||||
Revenues | ||||
Revenues | $ 63,227 | $ 110,618 | $ 190,732 | $ 319,461 |
Oil and Condensate [Member] | ||||
Revenues | ||||
Revenues | 2,824 | 3,546 | 6,295 | 12,596 |
Natural Gas, Production [Member] | ||||
Revenues | ||||
Revenues | 2,563 | 4,215 | 7,273 | 13,782 |
Product and Service, Other [Member] | ||||
Revenues | ||||
Revenues | $ 797 | $ 848 | $ 1,958 | $ 1,342 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (243,413) | $ 54,362 | $ (175,034) | $ 67,290 |
Other comprehensive loss: | ||||
Change in pension and postretirement obligations, net of tax of $0 and $0 in 2016 | (2) | 0 | (4) | (2) |
Total Other Comprehensive Income (Loss), Net of Tax | (2) | 0 | (4) | (2) |
Comprehensive income (loss) | $ (243,415) | $ 54,362 | $ (175,038) | $ 67,288 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 20,516 | $ 7,798 |
Accounts receivable, net of allowance for credit losses | 26,030 | 70,716 |
Derivative Asset, Current | 50,414 | 4,131 |
Income Taxes Receivable, Current | 0 | 1,236 |
Other current assets | 12,836 | 4,458 |
Total current assets | 109,796 | 88,339 |
Property and equipment, net (full cost method) | 835,500 | 1,120,425 |
Derivative Asset, Noncurrent | 2,619 | 2,750 |
Other assets | 5,259 | 6,724 |
Total assets | 953,174 | 1,218,238 |
Current liabilities | ||
Accounts payable and accrued liabilities | 48,345 | 105,824 |
Derivative liabilities | 22,861 | 23,450 |
Total current liabilities | 71,206 | 129,274 |
Other liabilities | 8,443 | 8,382 |
Deferred income taxes | 1,393 | 1,424 |
Derivative liabilities | 5,542 | 3,385 |
Long-term debt, net | 518,858 | 555,028 |
Commitments and contingencies (Note 12) | ||
Shareholders’ equity: | ||
Preferred stock of $0.01 par value – 5,000,000 shares authorized; none issued | 0 | 0 |
Common stock of $0.01 par value – 45,000,000 shares authorized; 15,200,435 and 15,135,598 shares issued as of September 30, 2020 and December 31, 2019, respectively | 152 | 151 |
Paid-in capital | 202,766 | 200,666 |
Retained earnings | 144,877 | 319,987 |
Accumulated other comprehensive loss | (63) | (59) |
Total shareholders’ equity | 347,732 | 520,745 |
Total liabilities and shareholders’ equity | $ 953,174 | $ 1,218,238 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 45,000,000 | 45,000,000 |
Common stock, shares, issued (in shares) | 15,200,435 | 15,135,598 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities | ||
Net Cash Provided by (Used in) Operating Activities | $ 189,723 | $ 244,213 |
Net income (loss) | (175,034) | 67,290 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation, depletion and amortization | 114,891 | 129,687 |
Asset Impairment Charges | 271,498 | 0 |
Derivative contracts: | ||
Net (gains) losses | (109,879) | 30,166 |
Cash settlements and premiums received (paid), net | (65,295) | 4,330 |
Deferred income tax expense (benefit) | (31) | 2,972 |
Gain (Loss) on Disposition of Other Assets | (14) | (118) |
Noncash Interest Expense | 3,336 | 2,544 |
Share-based compensation | 2,582 | 3,101 |
Other, net | 23 | 39 |
Changes in operating assets and liabilities, net | 17,056 | 12,862 |
Cash flows from investing activities | ||
Payments to Acquire Businesses, Net of Cash Acquired | 0 | 5,956 |
Capital expenditures | (139,010) | (291,733) |
Proceeds from sales of assets, net | 83 | 215 |
Net cash used in investing activities | (138,927) | (297,474) |
Cash flows from financing activities | ||
Proceeds from credit facility borrowings | 51,000 | 62,400 |
Repayment of credit facility borrowings | (89,000) | (13,000) |
Debt issuance costs paid | (78) | (2,616) |
Net cash provided by (used in) financing activities | (38,078) | 46,784 |
Net increase (decrease) in cash and cash equivalents | 12,718 | (6,477) |
Cash and cash equivalents – beginning of period | 7,798 | 17,864 |
Cash and cash equivalents – end of period | 20,516 | 11,387 |
Cash paid for: | ||
Interest, net of amounts capitalized | 20,959 | 24,721 |
Income Taxes Paid, Net | (2,471) | 0 |
Reorganization items, net | 0 | 79 |
Non-cash investing and financing activities: | ||
Changes in accounts receivable related to acquisitions | 0 | (152) |
Changes in accrued liabilities related to acquisitions | 0 | (504) |
Changes in other liabilities for asset retirement obligations related to acquisitions | 0 | 83 |
Changes in accrued liabilities related to capital expenditures | $ (30,579) | $ 2,672 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of OperationsPenn Virginia Corporation (together with its consolidated subsidiaries, unless the context otherwise requires, “Penn Virginia,” the “Company,” “we,” “us” or “our”) is an independent oil and gas company focused on the onshore exploration, development and production of oil, natural gas liquids (“NGLs”) and natural gas. Our current operations consist of drilling unconventional horizontal development wells and operating our producing wells in the Eagle Ford Shale (the “Eagle Ford”) in Gonzales, Lavaca, Fayette and DeWitt Counties in South Texas. We operate in and report our financial results and disclosures as one segment, which is the exploration, development and production of crude oil, NGLs and natural gas. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Acquisitions [Abstract] | |
Acquisitions | AcquisitionsEagle Ford Working Interests In 2019, we acquired working interests in certain properties for which we are the operator from our joint venture partners therein for cash consideration of approximately $6.5 million. Funding for this acquisition was provided by borrowings under the Credit Facility. |
Accounts Receivable and Revenue
Accounts Receivable and Revenues from Contracts with Customers | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure | Accounts Receivable and Revenues from Contracts with Customers Accounts Receivable and Major Customers The following table summarizes our accounts receivable by type as of the dates presented: September 30, December 31, 2020 2019 Customers $ 24,443 $ 63,165 Joint interest partners 1,741 6,929 Other — 674 26,184 70,768 Less: Allowance for credit losses (154) (52) $ 26,030 $ 70,716 For the nine months ended September 30, 2020, three customers accounted for $113.4 million, or approximately 56%, of our consolidated product revenues. The revenues generated from these customers during the nine months ended September 30, 2020, were $46.0 million, $40.4 million and $27.0 million, or 23%, 20% and 13% of the consolidated total, respectively. As of September 30, 2020 and December 31, 2019, $17.9 million and $34.6 million, or approximately 73% and 55%, respectively, of our consolidated accounts receivable from customers was related to these customers. For the nine months ended September 30, 2019, four customers accounted for $261.4 million, or approximately 76%, of our consolidated product revenues. No significant uncertainties exist related to the collectability of amounts owed to us by any of these customers. As of September 30, 2020 and December 31, 2019, the allowance for credit losses is entirely attributable to receivables from joint interest partners. Credit Losses and Allowance for Credit Losses Adoption of ASU 2016–13 Effective January 1, 2020, we adopted ASU 2016–13 and have applied the guidance therein to our portfolio of accounts receivable including those from our customers and our joint interest partners. We have adopted ASU 2016–13 using the modified retrospective method resulting in an adjustment of less than $0.1 million to the beginning balance of retained earnings and a corresponding increase to the allowance for credit losses as of January 1, 2020. Accounting Policies for Credit Losses We monitor and assess our portfolio of accounts receivable, including those from our customers, our joint interest partners and others, when applicable, for credit losses on a monthly basis as we originate the underlying financial assets. Our review process and related internal controls take into appropriate consideration (i) past events and historical experience with the identified portfolio segments, (ii) current economic and related conditions within the broad energy industry as well as those factors with broader applicability and (iii) reasonable supportable forecasts consistent with other estimates that are inherent in our financial statements. In order to facilitate our processes for the review and assessment of credit losses, we have identified the following portfolio segments which are described below: (i) customers for our commodity production and (ii) joint interest partners which are further stratified into the following sub-segments: (a) mutual operators which includes joint interest partners with whom we are a non-operating joint interest partner in properties for which they are the operator, (b) large partners consisting of those legal entities that maintain a working interest of at least 10 percent in properties for which we are the operator and (c) all others which includes legal entities that maintain working interests of less than 10 percent in properties for which we are the operator as well as legal entities with whom we no longer have an active joint interest relationship, but continue to have transactions, including joint venture audit settlements, that from time-to-time give rise to the origination of new accounts receivable. Customers . We sell our commodity products to approximately 20 customers. A substantial majority of these customers are large, internationally recognized refiners and marketers in the case of our crude oil sales and large domestic processors and interstate pipelines with respect to our NGL and natural gas sales. As noted in our disclosures regarding major customers above, a significant portion of our outstanding customer accounts receivable are concentrated within a group of up to five customers at any given time. Due primarily to the historical market efficiencies and generally timely settlements associated with commodity sale transactions for crude oil, NGLs and natural gas, we have assessed this portfolio segment at zero risk for credit loss upon the adoption of ASU 2016–13 and for each of the nine months included in the period ended September 30, 2020. Historically, we have never experienced a credit loss with such customers including the periods during the 2008-2009 financial crisis and the more recent periods of significant commodity price declines. While we believe that the receivables that originated in September 2020 will be fully collected despite the ongoing uncertainty associated with the COVID-19 pandemic and the related global energy market disruptions, future originations of customer receivables will continue to be assessed with a greater emphasis on current economic conditions and reasonable supportable forecasts. Mutual Operators . As of September 30, 2020, we had mutual joint interest partner relationships with three upstream producers that also operate properties within the Eagle Ford for which we have non-operated working interests. Historically we have had full and timely collection experiences with these entities and we ourselves are timely with respect to our payments to them of joint venture costs. Upon adoption of ASU 2016–13, we had assessed this portfolio segment at zero risk for credit loss; however, in light of the potential for liquidity concerns due to current economic conditions in the near-term, we have assessed receivables originating in 2020 with a five percent risk. Large Partners . As of September 30, 2020, four legal entities had working interests of 10 percent or greater in properties that we operate. These entities are primarily passive investors. Historically we have had full and timely collection experiences with these entities. Upon adoption of ASU 2016–13, we had assessed this portfolio segment at a risk of one percent for credit loss; however, in light of the potential for liquidity concerns due to current economic conditions in the near-term, we have increased the assessed receivables originating in 2020 to a two percent risk. All Others . As of September 30, 2020, approximately 30 legal entities had working interests of less than 10 percent in properties that we operate. Historically, this is the only portfolio segment with whom we have experienced credit losses. Generally, this group includes passive investors and smaller producers that may not have the wherewithal or alternative sources of liquidity to settle their obligations to us in the event of individual challenges unique to smaller entities as well as adverse economic conditions in general. Upon adoption of ASU 2016–13, we had assessed this portfolio segment at a risk of five percent for credit loss; however, in light of the potential for liquidity concerns due to current economic conditions in the near-term, we have increased the assessed receivables originated in 2020 to a 10 percent risk. As of September 30, 2020, approximately $0.2 million of accounts receivables attributable to this portfolio segment was past due, or over 60 days. Supplemental Disclosures The following table summarizes the activity in our allowance for credit losses, by portfolio segment, for the nine months ended September 30, 2020: Joint Interest Partners Customers Mutual Operators Large Partners All Others Total Balance at beginning of period $ — $ — $ — $ 52 $ 52 Adjustment upon adoption — — 60 16 76 Provision for expected credit losses — 5 7 14 26 Write-offs and recoveries — — — — — Balance at end of period $ — $ 5 $ 67 $ 82 $ 154 |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure | Derivative Instruments We utilize derivative instruments, typically swaps, put options and call options which are placed with financial institutions that we believe are acceptable credit risks, to mitigate our financial exposure to commodity price volatility associated with anticipated sales of our future production and volatility in interest rates attributable to our variable rate debt instruments. Our derivative instruments are not formally designated as hedges in the context of GAAP. While the use of derivative instruments limits the risk of adverse commodity price and interest rate movements, such use may also limit the beneficial impact of future product revenues and interest expense from favorable commodity price and interest rate movements. From time to time, we may enter into incremental derivative contracts in order to increase the notional volume of production we are hedging, restructure existing derivative contracts or enter into other derivative contracts resulting in modification to the terms of existing contracts. In accordance with our internal policies, we do not utilize derivative instruments for speculative purposes. Commodity Derivatives The following is a general description of the commodity derivative instruments we have employed: Swaps . A swap contract is an agreement between two parties pursuant to which the parties exchange payments at specified dates on the basis of a specified notional amount, or the swap price, with the payments calculated by reference to specified commodities or indexes. The counterparty to a swap contract is required to make a payment to us based on the amount of the swap price in excess of the settlement price multiplied by the notional volume if the settlement price for any settlement period is below the swap price for such contract. We are required to make a payment to the counterparty based on the amount of the settlement price in excess of the swap price multiplied by the notional volume if the settlement price for any settlement period is above the swap price for such contract. Put Options . A put option has a defined strike, or floor price. We have entered into put option contracts in the roles of buyer and seller depending upon our particular hedging objective. The buyer of the put option pays the seller a premium to enter into the contract. When the settlement price is below the floor price, the seller pays the buyer an amount equal to the difference between the settlement price and the strike price multiplied by the notional volume. When the settlement price is above the floor price, the put option expires worthless. Certain of our purchased put options have deferred premiums. For the deferred premium puts, we agree to pay a premium to the counterparty at the time of settlement. Call Options . A call option has a defined strike, or ceiling price. We have entered into call option contracts in the roles of buyer and seller depending upon our particular hedging objective. The buyer of the call option pays the seller a premium to enter into the call option. When the settlement price is above the ceiling price, the seller pays the buyer an amount equal to the difference between the settlement price and the strike price multiplied by the notional volume. When the settlement price is below the ceiling price, the call option expires worthless. We typically combine swaps, purchased put options, purchased call options, sold put options and sold call options in order to achieve various hedging objectives. Certain of these objectives result in combinations that operate as collars which include purchased put options and sold call options, three-way collars which include purchased put options, sold put options and sold call options, and enhanced swaps, which include either sold put options or sold call options with the associated premiums rolled into an enhanced fixed price swap, among others. We determine the fair values of our commodity derivative instruments using industry-standard models that consider various assumptions, including current market value and contractual prices for the underlying instruments, implied volatilities, time value and nonperformance risk. For the current market prices, we use third-party quoted forward prices, as applicable, for NYMEX West Texas Intermediate (“NYMEX WTI”), Magellan East Houston (“MEH”) crude oil and NYMEX Henry Hub (“NYMEX HH”) natural gas closing prices as of the end of the reporting period. Nonperformance risk is incorporated by utilizing discount rates adjusted for the credit risk of our counterparties if the derivative is in an asset position, and our own credit risk if the derivative is in a liability position. The following table sets forth our commodity derivative positions, presented on a net basis by period of maturity, as of September 30, 2020: 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 NYMEX WTI Crude Swaps Average Volume Per Day (barrels) 10,174 3,333 3,297 Weighted Average Swap Price ($/barrel) $ 57.59 $ 55.89 $ 55.89 NYMEX WTI Purchased Puts/Sold Calls Average Volume Per Day (barrels) 2,000 6,667 6,593 4,891 4,891 Weighted Average Purchased Put Price ($/barrel) $ 48.00 $ 44.50 $ 44.50 $ 40.67 $ 40.67 Weighted Average Sold Call ($/barrel) $ 57.10 $ 53.53 $ 53.53 $ 53.50 $ 53.50 NYMEX WTI Sold Puts Average Volume Per Day (barrels) 3,783 11,667 11,538 4,891 4,891 Weighted Average Sold Put Price ($/barrel) $ 43.55 $ 36.93 $ 36.93 $ 35.00 $ 35.00 MEH-WTI Basis Swaps Average Volume Per Day (barrels) 6,348 Weighted Average Fixed Basis Price ($/barrel) $ 1.31 NYMEX WTI Crude CMA Roll Basis Swaps Average Volume Per Day (barrels) 2,174 Weighted Average Swap Price ($/barrel) $ (0.42) NYMEX HH Purchased Puts/Sold Calls Average Volume Per Day (MMBtus) 12,804 10,000 9,890 9,783 9,783 Weighted Average Purchased Put ($/MMBtu) $ 2.00 $ 2.61 $ 2.61 $ 2.61 $ 2.61 Weighted Average Sold Call ($/MMBtu) $ 2.21 $ 3.12 $ 3.12 $ 3.12 $ 3.12 NYMEX HH Sold Puts Average Volume Per Day (MMBtus) 6,667 6,593 6,522 6,522 Weighted Average Sold Put Price ($/MMBtus) $ 2.00 $ 2.00 $ 2.00 $ 2.00 As of September 30, 2020, we were unhedged with respect to NGL production. Interest Rate Derivatives We have entered into a series of interest rate swap contracts (the “Interest Rate Swaps”) to establish fixed interest rates on a portion of our variable interest rate indebtedness under the Credit Facility and the Second Lien Facility. The notional amount of the Interest Rate Swaps totals $300 million, with us paying a weighted average fixed rate of 1.36% on the notional amount, and the counterparties paying a variable rate equal to LIBOR through May 2022. Financial Statement Impact of Derivatives The impact of our derivative activities on income is included in the “Derivatives” caption on our Condensed Consolidated Statements of Operations. The effects of derivative gains and (losses) and cash settlements are reported as adjustments to reconcile net income to net cash provided by operating activities. These items are recorded in the “Derivative contracts” section of our Condensed Consolidated Statements of Cash Flows under “Net (gains) losses” and “Cash settlements, net.” The following table summarizes the effects of our derivative activities for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Interest rate swap gains (losses) recognized in the Consolidated Statements of Operations $ 32 $ — $ (7,527) $ — Commodity gains (losses) recognized in the Consolidated Statements of Operations (6,923) 24,248 117,406 (30,166) $ (6,891) $ 24,248 $ 109,879 $ (30,166) Interest rate cash settlements recognized in the Consolidated Statements of Cash Flows $ (919) $ — $ (1,287) $ — Commodity cash settlements and premiums received (paid) recognized in the Consolidated Statements of Cash Flows 7,337 (423) 66,582 (4,330) $ 6,418 $ (423) $ 65,295 $ (4,330) The following table summarizes the fair values of our derivative instruments presented on a gross basis, as well as the locations of these instruments on our Condensed Consolidated Balance Sheets as of the dates presented: September 30, 2020 December 31, 2019 Derivative Derivative Derivative Derivative Type Balance Sheet Location Assets Liabilities Assets Liabilities Interest rate contracts Derivative assets/liabilities - current $ — $ 3,601 $ — $ — Commodity contracts Derivative assets/liabilities – current 50,414 19,260 4,131 23,450 Interest rate contracts Derivative assets/liabilities - noncurrent — 2,639 — — Commodity contracts Derivative assets/liabilities – noncurrent 2,619 2,903 2,750 3,385 $ 53,033 $ 28,403 $ 6,881 $ 26,835 As of September 30, 2020, we reported net commodity derivative assets of $30.9 million and net Interest Rate Swap liabilities of $6.2 million. The contracts associated with these positions are with seven counterparties for commodity derivatives and four counterparties for Interest Rate Swaps, all of which are investment grade financial institutions and are participants in the Credit Facility. This concentration may impact our overall credit risk in that these counterparties may be similarly affected by changes in economic or other conditions. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure | Property and Equipment The following table summarizes our property and equipment as of the dates presented: September 30, December 31, 2020 2019 Oil and gas properties: Proved $ 1,509,097 $ 1,409,219 Unproved 52,910 53,200 Total oil and gas properties 1,562,007 1,462,419 Other property and equipment 27,495 25,915 Total properties and equipment 1,589,502 1,488,334 Accumulated depreciation, depletion and amortization (754,002) (367,909) $ 835,500 $ 1,120,425 Unproved property costs of $52.9 million and $53.2 million have been excluded from amortization as of September 30, 2020 and December 31, 2019, respectively. We transferred $4.5 million and $0.2 million of undeveloped leasehold costs associated with acreage unlikely to be drilled or associated with proved undeveloped reserves, including capitalized interest, from unproved properties to the full cost pool during the nine months ended September 30, 2020 and 2019, respectively. We capitalized internal costs of $1.3 million and $3.2 million and interest of $2.1 million and $3.2 million during the nine months ended September 30, 2020 and 2019, respectively, in accordance with our accounting policies. Average depreciation, depletion and amortization per barrel of oil equivalent of proved oil and gas properties was $16.63 and $17.47 for the nine months ended September 30, 2020 and 2019, respectively. At the end of each quarterly reporting period, the unamortized cost of our oil and gas properties, net of deferred income taxes, is limited to the sum of the estimated discounted future net revenues from proved properties adjusted for costs excluded from amortization and related income taxes (the “Ceiling Test”). As of September 30, 2020, the carrying value of our proved oil and gas properties exceeded the limit determined by the Ceiling Test by $236.0 million. Accordingly, we recorded an impairment of our oil and gas properties by this amount in the three months ended September 30, 2020 and, when combined with the $35.5 million recorded in the second quarter, $271.5 million in the nine months ended September 30, 2020. Because the Ceiling Test utilizes commodity prices based on a trailing twelve month average, it does not, as of September 30, 2020, fully reflect the substantial decline in commodity prices due to the economic impact of the COVID-19 pandemic and the ongoing disruption in global energy markets. Accordingly, we may incur additional impairments during the fourth quarter of 2020 and into the first quarter of 2021. |
Long-Term Debt
Long-Term Debt | 9 Months Ended | |
Sep. 30, 2020 | ||
Debt Disclosure [Abstract] | ||
Long-Term Debt | Long-Term Debt The following table summarizes our debt obligations as of the dates presented: September 30, 2020 December 31, 2019 Principal Unamortized Discount and Deferred Issuance Costs 1, 2 Principal Unamortized Discount and Deferred Issuance Costs 1, 2 Credit facility $ 324,400 $ 362,400 Second lien term loan 200,000 $ 5,542 200,000 $ 7,372 Totals 524,400 $ 5,542 562,400 $ 7,372 Less: Unamortized discount 2 (1,814) (2,415) Less: Unamortized deferred issuance costs 1, 2 (3,728) (4,957) Long-term debt, net $ 518,858 $ 555,028 _______________________ 1 Excludes issuance costs of the Credit Facility, which represent costs attributable to the access to credit over its contractual term, that have been presented as a component of Other assets (see Note 10) and are being amortized over the term of the Credit Facility using the straight-line method. 2 Discount and issuance costs of the Second Lien Facility are being amortized over the term of the underlying loan using the effective-interest method. Credit Facility In April 2020, we entered into the Borrowing Base Redetermination Agreement and Amendment No. 7 to Credit Agreement (the “Seventh Amendment”). The Seventh Amendment, which became effective on April 30, 2020, provides a $1.0 billion revolving commitment and initially provided for a $400 million borrowing base, including a $25 million sublimit for the issuance of letters of credit. The borrowing base decreased to $375 million in accordance with the terms of the Seventh Amendment effective July 1, 2020 and, effective October 1, 2020, availability under the Credit Facility is further limited to a maximum of $350 million until the next redetermination of the borrowing base. During the nine months ended September 30, 2020, we incurred and capitalized approximately $0.1 million of issue and other costs associated with the Seventh Amendment and wrote-off $0.9 million of previously capitalized issue costs due to the decrease in the borrowing base associated with the Seventh Amendment. Availability under the Credit Facility may not exceed the lesser of the aggregate commitments or the borrowing base, provided that effective October 1, 2020, availability under the Credit Facility is limited to a maximum of $350 million. The borrowing base under the Credit Facility is redetermined semi-annually, generally in the Spring and Fall of each year. The Fall 2020 borrowing base redetermination is in process. Additionally, we and the Credit Facility lenders may, upon request, initiate a redetermination at any time during the six-month period between scheduled redeterminations. The Credit Facility is available to us for general corporate purposes, including working capital. We had $0.4 million in letters of credit outstanding as of September 30, 2020 and December 31, 2019. The Credit Facility is scheduled to mature in May 2024; provided that on June 30, 2022, unless we have either extended the maturity date of the Second Lien Facility described below to a date that is at least 91 days after May 7, 2024 or have repaid our Second Lien Facility in full, the maturity date of the Credit Facility will be June 30, 2022. The outstanding borrowings under the Credit Facility bear interest at a rate equal to, at our option, either (a) a customary reference rate plus an applicable margin ranging from 1.50% to 2.50%, determined based on the utilization level under the Credit Facility or (b) a Eurodollar rate, including LIBOR through 2021, plus an applicable margin ranging from 2.50% to 3.50%, determined based on the utilization level under the Credit Facility. Interest on reference rate borrowings is payable quarterly in arrears and is computed on the basis of a year of 365/366 days, and interest on Eurodollar borrowings is payable every one three The Credit Facility is guaranteed by us and all of our subsidiaries (the “Guarantor Subsidiaries”). The guarantees under the Credit Facility are full and unconditional and joint and several. Substantially all of our consolidated assets are held by the Guarantor Subsidiaries. There are no significant restrictions on our ability or any of the Guarantor Subsidiaries to obtain funds through dividends, advances or loans. The obligations under the Credit Facility are secured by a first priority lien on substantially all of our assets. The Credit Facility requires us to maintain (1) a minimum current ratio (as defined in the Credit Facility, which considers the unused portion of the total commitment as a current asset), measured as of the last day of each fiscal quarter of 1.00 to 1.00 and (2) a maximum leverage ratio (consolidated indebtedness to adjusted earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses, both as defined in the Credit Facility), measured as of the last day of each fiscal quarter of 3.50 to 1.00. The Credit Facility also contains customary affirmative and negative covenants, including as to compliance with laws (including environmental laws, ERISA and anti-corruption laws), maintenance of required insurance, delivery of quarterly and annual financial statements, oil and gas engineering reports and budgets, weekly cash balance reports, maintenance and operation of property (including oil and gas properties), restrictions on the incurrence of liens and indebtedness, merger, consolidation or sale of assets, payment of dividends, and transactions with affiliates and other customary covenants. In addition, the Credit Facility contains certain anti-cash hoarding provisions, including the requirement to repay outstanding loans and cash collateralize outstanding letters of credit on a weekly basis in the amount of any cash on the balance sheet (subject to certain exceptions) in excess of $25 million. The Credit Facility contains events of default and remedies. If we do not comply with the financial and other covenants in the Credit Facility, the lenders may, subject to customary cure rights, require immediate payment of all amounts outstanding under the Credit Facility. As of September 30, 2020, and through the date upon which the Condensed Consolidated Financial Statements were issued, we were in compliance with all of the covenants under the Credit Facility. Second Lien Facility On September 29, 2017, we entered into the Second Lien Facility. We received net proceeds of $187.8 million from the Second Lien Facility net of an original issue discount (“OID”) of $4.0 million and issue costs of $8.2 million. The proceeds from the Second Lien Facility were used to fund a significant acquisition and related fees and expenses. The maturity date under the Second Lien Facility is currently September 29, 2022. In connection with the anticipated closing of the Transactions, the maturity of the Second Lien Facility will be extended to September 2024 (see the discussion in Note 2 for further detail with respect to the amendment to the Second Lien Facility dated November 2, 2020). The outstanding borrowings under the Second Lien Facility bear interest at a rate equal to, at our option, either (a) a customary reference rate based on the prime rate plus an applicable margin of 6.00% or (b) a customary LIBOR rate, with a floor of 1.00%, plus an applicable margin of 7.00%. As of September 30, 2020, the actual interest rate of outstanding borrowings under the Second Lien Facility was 8.00%. Amounts under the Second Lien Facility were borrowed at a price of 98% with an initial interest rate of 8.34%, resulting in an effective interest rate of 9.89%. Interest on reference rate borrowings is payable quarterly in arrears and is computed on the basis of a year of 365/366 days, and interest on eurocurrency borrowings is payable every one or three months (including in three-month intervals if we select a six-month interest period), at our election and is computed on the basis of a 360-day year. We have the right, to the extent permitted under the Credit Facility and an intercreditor agreement between the lenders under the Credit Facility and the lenders under the Second Lien Facility, to prepay loans under the Second Lien Facility at any time, subject to customary “breakage” costs with respect to eurocurrency loans. The Second Lien Facility is collateralized by substantially all of the Company’s and its subsidiaries’ assets with lien priority subordinated to the liens securing the Credit Facility. The obligations under the Second Lien Facility are guaranteed by us and the Guarantor Subsidiaries. The Second Lien Facility has no financial covenants, but contains customary affirmative and negative covenants, including as to compliance with laws (including environmental laws, ERISA and anti-corruption laws), maintenance of required insurance, delivery of quarterly and annual financial statements, oil and gas engineering reports and budgets, maintenance and operation of property (including oil and gas properties), restrictions on the incurrence of liens and indebtedness, merger, consolidation or sale of assets, payment of dividends and transactions with affiliates and other customary covenants. As illustrated in the table above, the OID and issue costs of the Second Lien Facility are presented as reductions to the outstanding term loans. These costs are subject to amortization using the interest method over the five-year term of the Second Lien Facility. | [1] |
[1] | ssuance costs of the Credit Facility, which represent costs attributable to the access to credit over its contractual term, that have been presented as a component of Other assets (see Note 10) and are being amortized over the term of the Credit Facility using the straight-line method. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We recognized a federal and state income tax expense for the nine months ended September 30, 2020 at the blended rate of 21.6%. The federal and state tax expense was offset by an adjustment to the valuation allowance against our net deferred tax assets resulting in an effective tax rate of 0.6%, which is fully attributable to the State of Texas. The provision also reflects a reclassification of $1.2 million from deferred tax assets for our remaining refundable AMT credit carryforwards which were accelerated due to certain income tax provisions provided in the CARES Act. In June 2020, we received a refund of $2.5 million for the aforementioned AMT credit carryforwards. Our net deferred income tax liability balance of $1.4 million as of September 30, 2020 is fully attributable to the State of Texas and primarily related to property and equipment. We recognized a federal and state income tax benefit for the nine months ended September 30, 2019 at the blended rate of 21.6%; however, the feder al and state tax expense was offset by an adjustment to the valuation allowance against our net deferred tax assets resulting in an effective tax rate of 2.5% which related to Texas deferred tax expense. We had no liability for unrecognized tax benefits as of September 30, 2020. There were no interest and penalty charges recognized during the periods ended September 30, 2020 and 2019. Tax years from 2015 forward remain open to examination by the major taxing jurisdictions to which the Company is subject; however, net operating losses originating in prior years are subject to examination when utilized. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases Lease Arrangements and Supplemental Disclosures We generally have lease arrangements for office facilities and certain office equipment, certain field equipment including compressors, drilling rigs, crude oil storage tank capacity, land easements and similar arrangements for rights-of-way and certain gas gathering and gas lift assets. Our short-term leases included in the disclosures below are primarily comprised of our contractual arrangements with certain vendors for operated drilling rigs, crude oil storage tank capacity and our field compressors. Our primary variable lease was represented by our field gas gathering and gas lift agreement with a midstream service provider and the lease payments are charged on a volumetric basis at a contractual fixed rate. The following table summarizes the components of our total lease cost for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Operating lease cost $ 215 $ 208 $ 645 $ 565 Short-term lease cost 2,675 9,969 18,566 33,024 Variable lease cost 5,754 6,777 16,401 17,420 Less: Amounts charged as drilling costs 1 (1,978) (9,224) (16,309) (30,865) Total lease cost recognized in the Condensed Consolidated Statement of Operations 2 $ 6,666 $ 7,730 $ 19,303 $ 20,144 ___________________ 1 Represents the combined gross amounts incurred and (i) capitalized as drilling costs for our working interest share and (ii) billed to joint interest partners for their working interest share for short-term leases of operated drilling rigs. 2 Includes $3.0 million and $3.9 million and $8.6 million and $8.9 million recognized in Gathering, processing and transportation expense (“GPT”), $3.5 million and $3.6 million and $10.1 million and $10.7 million recognized in Lease operating expense (“LOE”) for the three and nine months ended September 30, 2020 and 2019, respectively, and $0.2 million and $0.6 million recognized in G&A for each of the three and nine months ended September 30, 2020 and 2019, respectively. The following table summarizes supplemental cash flow information related to leases for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 236 $ 221 $ 707 $ 442 ROU assets obtained in exchange for lease obligations: Operating leases 1 $ 82 $ — $ 388 $ 3,325 ___________________ 1 Includes $2.5 million recognized upon the adoption of Accounting Standards Codification Topic 842 (“ASC842”) in 2019. The following table summarizes supplemental balance sheet information related to leases as of the dates presented: September 30, December 31, 2020 2019 ROU assets – operating leases $ 2,625 $ 2,740 Current operating lease obligations $ 953 $ 847 Noncurrent operating lease obligations 1,948 2,232 Total operating lease obligations $ 2,901 $ 3,079 Weighted-average remaining lease term – operating leases 3.3 years 4.1 years Weighted-average discount rate – operating leases 3.25 % 5.97 % Remaining maturities of operating lease obligations as of September 30, 2020: 2020 $ 236 2021 936 2022 874 2023 872 2024 and thereafter 145 Total undiscounted lease payments 3,063 Less: imputed interest (162) Total operating lease obligations $ 2,901 |
Supplemental Balance Sheet Deta
Supplemental Balance Sheet Detail | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Balance Sheet Detail | Supplemental Balance Sheet Detail The following table summarizes components of selected balance sheet accounts as of the dates presented: September 30, December 31, 2020 2019 Other current assets: Tubular inventory and well materials 1 $ 6,430 $ 2,989 Prepaid expenses 1 6,406 1,469 $ 12,836 $ 4,458 Other assets: Deferred issuance costs of the Credit Facility, net of amortization $ 2,524 $ 3,952 Right-of-use assets – operating leases 2,625 2,740 Other 110 32 $ 5,259 $ 6,724 Accounts payable and accrued liabilities: Trade accounts payable $ 3,522 $ 30,098 Drilling costs 4,651 18,832 Royalties 27,936 44,537 Production, ad valorem and other taxes 5,352 3,244 Compensation 3,877 5,272 Interest 647 730 Current operating lease obligations 953 847 Other 1,407 2,264 $ 48,345 $ 105,824 Other liabilities: Asset retirement obligations $ 5,321 $ 4,934 Noncurrent operating lease obligations 1,948 2,232 Defined benefit pension obligations 785 873 Postretirement health care benefit obligations 389 343 $ 8,443 $ 8,382 _______________________ 1 The balances as of September 30, 2020 include $3.9 million for the purchase of certain tubular and well materials and $3.6 million for the prepayment of drilling and completion services in advance of the restart of drilling projects beginning in October 2020 as well as $0.8 million of capitalized costs associated with crude oil in storage. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We apply the authoritative accounting provisions included in GAAP for measuring the fair value of both our financial and nonfinancial assets and liabilities. Fair value is an exit price representing the expected amount we would receive upon the sale of an asset or that we would expect to pay to transfer a liability in an orderly transaction with market participants at the measurement date. Our financial instruments that are subject to fair value disclosure consist of cash and cash equivalents, accounts receivable, accounts payable, derivatives and our Credit Facility and Second Lien Facility borrowings. As of September 30, 2020, the carrying values of all of these financial instruments approximated fair value. Recurring Fair Value Measurements Certain financial assets and liabilities are measured at fair value on a recurring basis on our Condensed Consolidated Balance Sheets. The following tables summarize the valuation of those assets and (liabilities) as of the dates presented: As of September 30, 2020 Fair Value Fair Value Measurement Classification Description Measurement Level 1 Level 2 Level 3 Assets: Interest rate swap assets – current $ — $ — $ — $ — Interest rate swap assets – noncurrent $ — $ — $ — $ — Commodity derivative assets – current $ 50,414 $ — $ 50,414 $ — Commodity derivative assets – noncurrent $ 2,619 $ — $ 2,619 $ — Liabilities: Interest rate swap liabilities – current $ (3,601) $ — $ (3,601) $ — Interest rate swap liabilities – noncurrent $ (2,639) $ — $ (2,639) $ — Commodity derivative liabilities – current $ (19,260) $ — $ (19,260) $ — Commodity derivative liabilities – noncurrent $ (2,903) $ — $ (2,903) $ — As of December 31, 2019 Fair Value Fair Value Measurement Classification Description Measurement Level 1 Level 2 Level 3 Assets: Commodity derivative assets – current $ 4,131 $ — $ 4,131 $ — Commodity derivative assets – noncurrent $ 2,750 $ — $ 2,750 $ — Liabilities: Commodity derivative liabilities – current $ (23,450) $ — $ (23,450) $ — Commodity derivative liabilities – noncurrent $ (3,385) $ — $ (3,385) $ — Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one level of the fair value hierarchy to another level. In such instances, the transfer is deemed to have occurred at the beginning of the quarterly period in which the event or change in circumstances that caused the transfer occurred. There were no transfers during the nine months ended September 30, 2020 and 2019. We used the following methods and assumptions to estimate fair values for the financial assets and liabilities described below: • Commodity derivatives : We determine the fair values of our commodity derivative instruments using industry-standard models that consider various assumptions including current market and contractual prices for the underlying instruments, implied volatilities, time value and non-performance risk. For the current market prices, we use third-party quoted forward prices, as applicable, for NYMEX WTI, MEH crude oil and NYMEX HH natural gas closing prices as of the end of the reporting periods. Each of these is a Level 2 input. • Interest rate swaps : We determine the fair values of our interest rate swaps using an income approach valuation technique that connects future cash flows to a single discounted value. We estimate the fair value of the swaps based on published interest rate yield curves as of the date of the estimate. Each of these is a Level 2 input. Non-Recurring Fair Value Measurements The most significant non-recurring fair value measurements utilized in the preparation of our Condensed Consolidated Financial Statements are those attributable to the initial determination of AROs associated with the ongoing development of new oil and gas properties. The determination of the fair value of AROs is based upon regional market and facility specific information. The amount of an ARO and the costs capitalized represent the estimated future cost to satisfy the abandonment obligation using current prices that are escalated by an assumed inflation factor after discounting the future cost back to the date that the abandonment obligation was incurred using a rate commensurate with the risk, which approximates our cost of funds. Because these significant fair value inputs are typically not observable, we have categorized the initial estimates as Level 3 inputs. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Drilling and Completion Commitments In the first half of 2020, we released our contracted drilling rigs in connection with the suspension of our drilling program. Costs of $2.0 million associated with temporary stand-by status and the demobilization of the rigs in connection with their release were capitalized to our full cost pool. Beginning in September 2020, we entered into drilling contracts on pad-to-pad bases pursuant to which we intend to drill at least two pads in the fourth quarter 2020. We prepaid $1.0 million in costs in connection with such agreements. In August 2020, we terminated an agreement for certain frac services and related materials that was in effect for calendar year 2020. In September 2020, we prepaid $2.0 million to an alternative frac service provider in connection with the restart of our limited drilling and completion program beginning in October 2020. Crude Oil Storage In the first half of 2020, we secured crude oil storage capacity with Nuevo Dos Gathering and Transportation, LLC (“Nuevo G&T”) for up to 70,000 barrels through October 2020 as a supplement (“Nuevo supplemental capacity”) to our current dedicated capacity of approximately 180,000 barrels of tank shell capacity at Nuevo G&T ’ s central delivery point facility in Lavaca County, Texas. The total remaining obligation under the Nuevo supplemental capacity was less than $0.1 million as of September 30, 2020. In April 2020, we secured additional crude oil storage capacity for up to approximately 90,000 barrels with a downstream interstate pipeline at their facility in DeWitt County, Texas, for an initial term of up to six months beginning in May 2020. The total remaining obligation under this agreement is less than $0.1 million as of September 30, 2020. As amended or otherwise extended prior to September 2020, this agreement and the Nuevo supplemental capacity agreement will continue on a month-to-month basis thereafter, for less than $0.1 million per month, and can be terminated by either party with 45 days’ notice. Costs associated with these agreements are in the form of monthly fixed rate short-term leases and are charged as incurred on a monthly basis to GPT. Gathering and Intermediate Transportation Commitments We have long-term agreements with Nuevo G&T and Nuevo Dos Marketing, LLC (“Nuevo Marketing” and together with Nuevo G&T, collectively “Nuevo”) to provide gathering and intermediate pipeline transportation services for a substantial portion of our crude oil and condensate production in as well as volume capacity support for certain downstream interstate pipeline transportation. Nuevo is obligated to gather and transport our crude oil and condensate from within a dedicated area in the Eagle Ford via a gathering system and intermediate takeaway pipeline connecting to a downstream interstate pipeline operated by a third party through 2041. We have a minimum volume commitment (“MVC”) of 8,000 gross barrels of oil per day to Nuevo through 2031 under the gathering agreement. We are obligated to deliver the first 20,000 gross barrels of oil per day produced from Gonzales, Lavaca, Fayette and DeWitt Counties, Texas. Under a marketing agreement, we have a commitment to sell 8,000 barrels per day of crude oil (gross) to Nuevo, or to any third party, utilizing Nuevo Marketing’s capacity on a downstream interstate pipeline through 2026. Under each of the agreements with Nuevo, credits for deliveries of volumes in excess of the volume commitment may be applied to any deficiency arising in the succeeding 12-month period. Excluding the application of existing credits that we have earned during the preceding 12-month period ended September 30, 2020 for deliveries of volumes in excess of the volume commitment, and the potential impact of the effects of price escalation from commodity price changes, if any, the minimum fee requirements attributable to the MVC under the gathering and transportation agreement are as follows: $3.2 million for the remainder of 2020, $13.0 million per year for 2021 through 2025, $7.4 million for 2026, $3.8 million per year for 2027 through 2030 and $2.2 million for 2031. Legal, Environmental Compliance and Other Claims We are involved, from time to time, in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, our management believes that these claims will not have a material effect on our financial position, results of operations or cash flows. As of September 30, 2020, we had AROs of approximately $5.3 million attributable to the plugging of abandoned wells. As of September 30, 2020, we had an estimated reserve of approximately $0.1 million for certain claims made against us regarding previously divested operations included in “Accounts payable and accrued liabilities.” |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity The following tables summarize the components of our shareholders ’ equity and the changes therein as of and for the quarterly periods in 2020 and 2019. Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders’ Equity Balance as of December 31, 2019 $ 151 $ 200,666 $ 319,987 $ (59) $ 520,745 Net income — — 163,094 — 163,094 Cumulative effect of change in accounting principle 1 — — (76) — (76) All other changes 2 1 556 — (1) 556 Balance as of March 31, 2020 $ 152 $ 201,222 $ 483,005 $ (60) $ 684,319 Net loss — — (94,715) — (94,715) All other changes 2 — 936 — (1) 935 Balance as of June 30, 2020 $ 152 $ 202,158 $ 388,290 $ (61) $ 590,539 Net loss — — (243,413) — (243,413) All other changes 2 — 608 — (2) 606 Balance as of September 30, 2020 $ 152 $ 202,766 $ 144,877 $ (63) $ 347,732 _______________________ 1 Attributable to the adoption of ASU 2016–13 as of January 1, 2020 (see Note 4). 2 Includes equity-classified share-based compensation of $2.6 million during the nine months ended September 30, 2020. During the nine months ended September 30, 2020, 45,435 and 19,402 shares of common stock were issued in connection with the vesting of certain time-vested restricted stock units (“RSUs”) and performance restricted stock units (“PRSUs”), net of shares withheld for income taxes. Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income Total Shareholders’ Equity Balance as of December 31, 2018 $ 151 $ 197,630 $ 249,492 $ 82 $ 447,355 Net loss — — (38,697) — (38,697) Cumulative effect of change in accounting principle 1 — — (94) — (94) All other changes 2 — 381 — (1) 380 Balance as of March 31, 2019 $ 151 $ 198,011 $ 210,701 $ 81 $ 408,944 Net income — — 51,625 — 51,625 All other changes 2 — 986 — (1) 985 Balance as of June 30, 2019 $ 151 $ 198,997 $ 262,326 $ 80 $ 461,554 Net income — — 54,362 — 54,362 All other changes 2 — 742 — — 742 Balance as of September 30, 2019 $ 151 $ 199,739 $ 316,688 $ 80 $ 516,658 _______________________ 1 Attributable to the adoption of ASC Topic 842 as of January 1, 2019 (see Note 9). |
Share-Based Compensation and Ot
Share-Based Compensation and Other Benefit Plans | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement | Share-Based Compensation and Other Benefit Plans Share-Based Compensation We recognize share-based compensation expense related to our share-based compensation plans as a component of G&A expenses in our Condensed Consolidated Statements of Operations. We reserved a total of 1,424,600 shares of common stock for issuance under the Penn Virginia Corporation Management Incentive Plan (the “Plan”) for share-based compensation awards. A total of 584,497 RSUs and 201,491 PRSUs have been granted to employees and directors under the Plan through September 30, 2020. Additionally, in the third quarter of 2020, 57,500 RSUs and 57,500 PRSUs were issued outside the Plan to Mr. Henke as an inducement award upon his appointment as our President and CEO. As of September 30, 2020, a total of 319,280 RSUs and 186,595 PRSUs are unvested and outstanding. We recognized $0.8 million and $2.6 million of expense attributable to the RSUs and PRSUs for the three and nine months ended September 30, 2020, respectively and $1.0 million and $3.1 million for the three and nine months ended September 30, 2019, respectively. A total of 281,382 RSUs were granted during the nine months ended September 30, 2020 with an average grant-date fair value of $4.49. A total of 9,707 RSUs were granted during the nine months ended September 30, 2019 with an average grant-date fair value of $30.65. The RSUs are being charged to expense on a straight-line basis over a range of less than one During the nine months ended September 30, 2020, 145,399 PRSUs were granted. No PRSUs were granted during the nine months ended September 30, 2019. PRSUs were granted collectively in two to three separate tranches with individual three-year performance periods beginning in January 2017, 2018 and 2019, respectively for the pre-2019 grants. For the 2019 and March 2020 grants, the performance period is 2020 through 2022. The performance period for Mr. Henke’s August 2021 PRSU inducement grant is 2021 through 2023. Vesting of the PRSUs can range from zero to 200 percent of the original grant based on the performance of our common stock relative to an industry index or, for the 2019 and 2020 grants, a defined peer group. Due to their market condition, the PRSUs are being charged to expense using graded vesting over a maximum of five years. The fair value of each PRSU award was estimated on their applicable grant date using a Monte Carlo simulation with a range of $47.70 to $65.28 per PRSU for the 2017 grants, $34.02 per PRSU for the 2019 grants and $2.40 to $16.02 per PRSU for the 2020 grants. In the nine months ended September 30, 2020, 19,402 shares were issued upon settlement of PRSUs, net of shares withheld for income taxes. The ranges for the assumptions used in the Monte Carlo model for the PRSUs granted during 2020, 2019 and 2017 are presented as follows: 2020 2019 2017 Expected volatility 101.32% to 117.71% 49.9 % 59.63% to 62.18% Dividend yield 0.0 % 0.0 % 0.0 % Risk-free interest rate 0.18% to 0.51% 1.66 % 1.44% to 1.51% Other Benefit Plans We maintain the Penn Virginia Corporation and Affiliated Companies Employees 401(k) Plan (the “401(k) Plan”), a defined contribution plan, which covers substantially all of our employees. We recognized $0.1 million and $0.5 million of expense attributable to the 401(k) Plan for the three and nine months ended September 30, 2020, respectively, and $0.2 million and $0.5 million for the three and nine months ended September 30, 2019, respectively. The charges for the 401(k) Plan are recorded as a component of G&A expenses in our Condensed Consolidated Statements of Operation. We maintain unqualified legacy defined benefit pension and defined benefit postretirement plans that cover a limited number of former employees, all of whom retired prior to 2000. The combined expense recognized with respect to these plans was less than $0.1 million for each of the three and nine months ended September 30, 2020 and 2019. The charges for these plans are recorded as a component of “Other income (expense)” in our Condensed Consolidated Statements of Operation. |
Interest Expense
Interest Expense | 9 Months Ended |
Sep. 30, 2020 | |
Interest Expense [Abstract] | |
Interest Income and Interest Expense Disclosure | Interest Expense The following table summarizes the components of interest expense for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Interest on borrowings and related fees $ 7,375 $ 8,945 $ 22,944 $ 27,960 Accretion of original issue discount 1 205 188 602 551 Amortization of debt issuance costs 2 594 608 2,734 1,993 Capitalized interest (677) (1,005) (2,067) (3,234) $ 7,497 $ 8,736 $ 24,213 $ 27,270 ___________________ 1 Attributable to the Second Lien Facility (see Note 7). 2 Includes $0.9 million of accelerated amortization in the nine months ended September 30, 2020 attributable to the reduction in the borrowing base associated with the Seventh Amendment. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The following table provides a reconciliation of the components used in the calculation of basic and diluted earnings per share for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net income (loss) – basic and diluted $ (243,413) $ 54,362 $ (175,034) $ 67,290 Weighted-average shares – basic 15,183 15,110 15,168 15,105 Effect of dilutive securities — 50 — 60 Weighted-average shares – diluted 1 15,183 15,160 15,168 15,165 ___________________ 1 For the three and nine months ended September 30, 2020, approximately 0.2 million and 0.1 million potentially dilutive securities, respectively, represented by RSUs and PRSUs, had the effect of being anti-dilutive and were excluded from the calculation of diluted earnings per share. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Schedule of Policies [Line Items] | |
Basis of Presentation | Basis of Presentation Our unaudited Condensed Consolidated Financial Statements include the accounts of Penn Virginia and all of our subsidiaries. Intercompany balances and transactions have been eliminated. Our Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Preparation of these statements involves the use of estimates and judgments where appropriate. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of our Condensed Consolidated Financial Statements, have been included. Our Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes included in our Annual Report on Form 10-K for the year ended December 31, 2019. Operating results for the nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. Adoption of Recently Issued Accounting Pronouncements Effective January 1, 2020, we adopted and began applying the relevant guidance provided in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) 2016–13, Measurement of Credit Losses on Financial Instruments (“ASU 2016–13”). We adopted ASU 2016–13 using the optional transition approach with a charge to the beginning balance of retained earnings as of January 1, 2020 (see Note 4 for the impact and disclosures associated with the adoption of ASU 2016–13). Comparative periods and related disclosures have not been restated for the application of ASU 2016–13. Risks and Uncertainties As an oil and gas exploration and development company, we are exposed to a number of risks and uncertainties that are inherent to our industry. In addition to such industry-specific risks, the global public health crisis associated with the novel coronavirus (“COVID-19”) has, and is anticipated to continue to have, an adverse effect on global economic activity for the immediate future and has resulted in travel restrictions, business closures, limitations to person-to-person contact and the institution of quarantining and other restrictions on movement in many communities. The slowdown in global economic activity attributable to COVID-19 has resulted in a dramatic decline in the demand for energy, which directly impacts our industry and the Company. In addition, global crude oil prices experienced a collapse starting in early March 2020 as a direct result of disagreements between the Organization of the Petroleum Exporting Countries (“OPEC”) and Russia (together with OPEC, collectively “OPEC+”) with respect to production curtailments. Production curtailment allocations were ultimately agreed to by OPEC+ in the second quarter of 2020 and while these curtailment efforts have generally held through the third quarter of 2020 leading to a modest recovery in prices from their historic lows at the height of the COVID-19 pandemic, the group is scheduled to formally meet again at the end of November 2020 to assess the circumstances heading into 2021. Despite a significant decline in drilling by U.S. producers that began in mid-March 2020, domestic supply and demand imbalances continue to create operational stress with respect to capacity limitations associated with storage, pipeline and refining infrastructure, particularly within the Gulf Coast region. Limited progress in containing the COVID-19 pandemic domestically, including the effects of recent spikes in many regions of the United States, including Texas, has hampered economic recovery. Furthermore, government stimulus and economic relief efforts are uncertain and additional economic support may be required in order to stabilize and enhance current domestic economic activity levels. These efforts are further impacted by election year uncertainties and related political conflicts. The combined effect of these global and domestic factors is anticipated to have a continuing adverse impact on the industry in general and our operations specifically. During 2020, we initiated several actions to mitigate the anticipated adverse economic conditions for the immediate future and to support our financial position and liquidity. The more significant actions that we took during that time included: (i) temporarily suspending our drilling program from April through September 2020, (ii) curtailing production through selected well shut-ins for a period of several weeks in April and May, (iii) securing crude oil storage capacity (see Note 12) in order to maintain a reasonable level of production to (a) allow for the continued marketing of NGLs and natural gas rather than delaying revenues through additional shut-ins and (b) capitalize on potential increases in commodity prices, (iv) substantially expanding the scope and range of our commodity derivatives portfolio (see Note 5), (v) utilizing certain provisions of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) and related regulations, the most significant of which resulted in the receipt in June 2020 of an accelerated refund of our remaining refundable alternative minimum tax (“AMT”) credit carryforwards in the amount of $2.5 million and (vi) elimination of annual cost-of-living and similar adjustments to our salaries and wages for 2020, and in July 2020, a limited reduction-in-force (“RIF”). We incurred and paid employee termination and severance benefits of approximately $0.2 million in connection with the limited RIF and those costs have been included in G&A. Executive Transition In August 2020, we appointed Darrin Henke our new president and chief executive officer, or CEO, and director following the retirement of John Brooks. We incurred incremental G&A costs of approximately $1.2 million, in connection with Mr. Henke’s appointment and Mr. Brooks’ separation. Going Concern Presumption Our unaudited Condensed Consolidated Financial Statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and other commitments in the normal course of business. Subsequent Events On November 2, 2020, we entered into the following agreements in connection with the previously announced strategic transaction between the Company and certain affiliates of Juniper Capital Advisors, L.P. (“Juniper”): • a Contribution Agreement (the “Contribution Agreement”), among the Company, a newly formed subsidiary of the Company (the “Partnership”), and an affiliate of Juniper (“Purchaser”), pursuant to which, among other things, upon the satisfaction of the terms and conditions set forth therein, (i) the Company will contribute to the Partnership all of its equity interests in Penn Virginia Holding Corp., a Delaware corporation, that will be converted into a limited liability company prior to the closing date of the Transactions (as defined below) (the “Closing Date”), in exchange for a number of newly issued common units representing limited partner interests of the Partnership (the “Common Units”) equal to the number of shares of the Company’s common stock outstanding as of the Closing Date and (ii) Purchaser will contribute to the Partnership, as a capital contribution, $150 million in exchange for 17,142,857 newly issued Common Units. In addition, the Company will issue to Purchaser 171,429 shares of newly designated Series A Preferred Stock, par value $0.01, of the Company (the “Preferred Stock”) (which Preferred Stock will be a non-economic voting interest), at a price equal to the par value of the shares acquired (such transactions contemplated by the Contribution Agreement, the “Equity Transaction”); and • an Asset Contribution Agreement (the “Asset Agreement”), by and among Rocky Creek Resources, LLC, an affiliate of Juniper (“Rocky Creek”), the Company and the Partnership, pursuant to which the Company will purchase certain oil and gas leasehold and other real and personal property interests in Lavaca County, Texas and Fayette County, Texas and assume certain liabilities from Rocky Creek, in exchange for 4,959,000 newly issued Common Units at a price per unit of $7.74, or $38,382,660 in the aggregate, subject to adjustment as set forth therein. In addition Rocky Creek will acquire 49,590 shares of Preferred Stock at a price equal to the par value of the shares acquired (such transactions contemplated by the Asset Agreement, the “Asset Transaction” and together with the Equity Transaction, the “Transactions”). After completion of the Transactions, Juniper is expected to own approximately 59 percent of Penn Virginia’s equity. As part of the transaction, Juniper will be restricted from selling any of its equity securities in Penn Virginia for six months following the closing of the transaction. We expect to use $50.0 million of the cash proceeds to pay down and restructure our $200 million Second Lien Credit Agreement dated as of September 29, 2017 (the “Second Lien Facility”), with the balance of the cash proceeds used to significantly reduce the amount outstanding under our credit agreement (the “Credit Facility”) and to pay transaction fees and expenses. Following the closing, Edward Geiser, Juniper’s Managing Partner, will serve as Penn Virginia’s Chairman of the Board, and Juniper will appoint four additional members to the Board. Darrin Henke and the other members of our senior management are expected to continue in their roles, and the Company’s current directors, including Mr. Henke, will remain on the Board immediately following the closing. On November 2, 2020, we also entered into an amendment to the Second Lien Facility. Upon the consummation of the Transactions and the satisfaction of certain other conditions precedent, including the prepayment of $50 million of outstanding advances under the Second Lien Facility and the prepayment of $100 million of outstanding loans under the Credit Facility (less all applicable costs, fees and expenses in connection with the Transactions and the Second Lien Facility and Credit Facility), the amendment provides that, among other things, the Second Lien Facility will be automatically amended to (1) extend the maturity date of the Second Lien Facility to September 29, 2024 (the “Maturity Date”), (2) increase the margin applicable to advances under the Second Lien Facility; (3) impose certain limitations on capital expenditures, acquisitions and investments if the Asset Coverage Ratio (as defined therein) at the end of any fiscal quarter is less than 1.25 to 1.00 and (4) require maximum and, in certain circumstances as described therein, minimum hedging arrangements. In addition, upon the consummation of the Transactions and the satisfaction of certain other conditions precedent, the guarantee of the Company will be released and the Partnership will become a guarantor. Upon the effective date of the amendment, we will be required to make quarterly amortization payments equal to $1,875,000, and outstanding borrowings under the Second Lien Facility will bear interest at a rate equal to, at the option of the borrower, either (a) customary reference rate based on the prime rate plus an applicable margin of 8.25% or (b) a customary London interbank offered rate (“LIBOR”) plus an applicable margin of 7.25%; provided that the applicable margin will increase to 9.25% and 8.25% respectively during any quarter in which the quarterly amortization payment is not made. The Transactions are expected to close in the first quarter of 2021, subject to the satisfaction of customary closing conditions, including obtaining the requisite shareholder and regulatory approvals as well as approval under the Credit Facility. Each of the Contribution Agreement and Asset Agreement contain certain termination rights. The Contribution Agreement provides that, upon termination of the Contribution Agreement under certain circumstances, we would be required to pay Purchaser a termination fee equal to $7,500,000 or reimburse Purchaser for certain expenses. The Asset Agreement provides that, upon termination of the Asset Agreement under certain circumstances, we would be required to pay Rocky Creek a termination fee equal to $1,919,133 or reimburse Rocky Creek for certain expenses. In the event the Company is required to reimburse either the Purchaser’s or Rocky Creek’s expenses, the expense reimbursement under the Asset Agreement and Contribution Agreement will not exceed $2,826,000 in aggregate. During the third quarter of 2020, we incurred certain professional fees and consulting costs of approximately $0.5 million in connection with the Transactions which were recognized in G&A. Management has evaluated all of our activities through the issuance date of our Condensed Consolidated Financial Statements and has concluded that, other than the aforementioned Transactions, no subsequent events have occurred that would require recognition in our Condensed Consolidated Financial Statements or disclosure in the Notes thereto. |
New Accounting Pronouncements | Adoption of Recently Issued Accounting Pronouncements Effective January 1, 2020, we adopted and began applying the relevant guidance provided in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) 2016–13, Measurement of Credit Losses on Financial Instruments (“ASU 2016–13”). We adopted ASU 2016–13 using the optional transition approach with a charge to the beginning balance of retained earnings as of January 1, 2020 (see Note 4 for the impact and disclosures associated with the adoption of ASU 2016–13). Comparative periods and related disclosures have not been restated for the application of ASU 2016–13. |
Fair Value Measurements | We apply the authoritative accounting provisions included in GAAP for measuring the fair value of both our financial and nonfinancial assets and liabilities. Fair value is an exit price representing the expected amount we would receive upon the sale of an asset or that we would expect to pay to transfer a liability in an orderly transaction with market participants at the measurement date. Our financial instruments that are subject to fair value disclosure consist of cash and cash equivalents, accounts receivable, accounts payable, derivatives and our Credit Facility and Second Lien Facility borrowings. As of September 30, 2020, the carrying values of all of these financial instruments approximated fair value. |
Fair Value, Measurements, Nonrecurring | |
Schedule of Policies [Line Items] | |
Fair Value Measurements | Non-Recurring Fair Value Measurements The most significant non-recurring fair value measurements utilized in the preparation of our Condensed Consolidated Financial Statements are those attributable to the initial determination of AROs associated with the ongoing development of new oil and gas properties. The determination of the fair value of AROs is based upon regional market and facility specific information. The amount of an ARO and the costs capitalized represent the estimated future cost to satisfy the abandonment obligation using current prices that are escalated by an assumed inflation factor after discounting the future cost back to the date that the abandonment obligation was incurred using a rate commensurate with the risk, which approximates our cost of funds. Because these significant fair value inputs are typically not observable, we have categorized the initial estimates as Level 3 inputs. |
Accounts Receivable and Reven_2
Accounts Receivable and Revenues from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Summary of Accounts Receivable | The following table summarizes our accounts receivable by type as of the dates presented: September 30, December 31, 2020 2019 Customers $ 24,443 $ 63,165 Joint interest partners 1,741 6,929 Other — 674 26,184 70,768 Less: Allowance for credit losses (154) (52) $ 26,030 $ 70,716 |
Financing Receivable, Allowance for Credit Loss | The following table summarizes the activity in our allowance for credit losses, by portfolio segment, for the nine months ended September 30, 2020: Joint Interest Partners Customers Mutual Operators Large Partners All Others Total Balance at beginning of period $ — $ — $ — $ 52 $ 52 Adjustment upon adoption — — 60 16 76 Provision for expected credit losses — 5 7 14 26 Write-offs and recoveries — — — — — Balance at end of period $ — $ 5 $ 67 $ 82 $ 154 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity Derivative Positions | The following table sets forth our commodity derivative positions, presented on a net basis by period of maturity, as of September 30, 2020: 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 NYMEX WTI Crude Swaps Average Volume Per Day (barrels) 10,174 3,333 3,297 Weighted Average Swap Price ($/barrel) $ 57.59 $ 55.89 $ 55.89 NYMEX WTI Purchased Puts/Sold Calls Average Volume Per Day (barrels) 2,000 6,667 6,593 4,891 4,891 Weighted Average Purchased Put Price ($/barrel) $ 48.00 $ 44.50 $ 44.50 $ 40.67 $ 40.67 Weighted Average Sold Call ($/barrel) $ 57.10 $ 53.53 $ 53.53 $ 53.50 $ 53.50 NYMEX WTI Sold Puts Average Volume Per Day (barrels) 3,783 11,667 11,538 4,891 4,891 Weighted Average Sold Put Price ($/barrel) $ 43.55 $ 36.93 $ 36.93 $ 35.00 $ 35.00 MEH-WTI Basis Swaps Average Volume Per Day (barrels) 6,348 Weighted Average Fixed Basis Price ($/barrel) $ 1.31 NYMEX WTI Crude CMA Roll Basis Swaps Average Volume Per Day (barrels) 2,174 Weighted Average Swap Price ($/barrel) $ (0.42) NYMEX HH Purchased Puts/Sold Calls Average Volume Per Day (MMBtus) 12,804 10,000 9,890 9,783 9,783 Weighted Average Purchased Put ($/MMBtu) $ 2.00 $ 2.61 $ 2.61 $ 2.61 $ 2.61 Weighted Average Sold Call ($/MMBtu) $ 2.21 $ 3.12 $ 3.12 $ 3.12 $ 3.12 NYMEX HH Sold Puts Average Volume Per Day (MMBtus) 6,667 6,593 6,522 6,522 Weighted Average Sold Put Price ($/MMBtus) $ 2.00 $ 2.00 $ 2.00 $ 2.00 |
Impact of Derivative Activities on Condensed Consolidated Statements of Income | The impact of our derivative activities on income is included in the “Derivatives” caption on our Condensed Consolidated Statements of Operations. The effects of derivative gains and (losses) and cash settlements are reported as adjustments to reconcile net income to net cash provided by operating activities. These items are recorded in the “Derivative contracts” section of our Condensed Consolidated Statements of Cash Flows under “Net (gains) losses” and “Cash settlements, net.” The following table summarizes the effects of our derivative activities for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Interest rate swap gains (losses) recognized in the Consolidated Statements of Operations $ 32 $ — $ (7,527) $ — Commodity gains (losses) recognized in the Consolidated Statements of Operations (6,923) 24,248 117,406 (30,166) $ (6,891) $ 24,248 $ 109,879 $ (30,166) Interest rate cash settlements recognized in the Consolidated Statements of Cash Flows $ (919) $ — $ (1,287) $ — Commodity cash settlements and premiums received (paid) recognized in the Consolidated Statements of Cash Flows 7,337 (423) 66,582 (4,330) $ 6,418 $ (423) $ 65,295 $ (4,330) |
Fair Value of Derivative Instruments on Condensed Consolidated Balance Sheets | The following table summarizes the fair values of our derivative instruments presented on a gross basis, as well as the locations of these instruments on our Condensed Consolidated Balance Sheets as of the dates presented: September 30, 2020 December 31, 2019 Derivative Derivative Derivative Derivative Type Balance Sheet Location Assets Liabilities Assets Liabilities Interest rate contracts Derivative assets/liabilities - current $ — $ 3,601 $ — $ — Commodity contracts Derivative assets/liabilities – current 50,414 19,260 4,131 23,450 Interest rate contracts Derivative assets/liabilities - noncurrent — 2,639 — — Commodity contracts Derivative assets/liabilities – noncurrent 2,619 2,903 2,750 3,385 $ 53,033 $ 28,403 $ 6,881 $ 26,835 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | The following table summarizes our property and equipment as of the dates presented: September 30, December 31, 2020 2019 Oil and gas properties: Proved $ 1,509,097 $ 1,409,219 Unproved 52,910 53,200 Total oil and gas properties 1,562,007 1,462,419 Other property and equipment 27,495 25,915 Total properties and equipment 1,589,502 1,488,334 Accumulated depreciation, depletion and amortization (754,002) (367,909) $ 835,500 $ 1,120,425 |
Long-Term Debt Long-Term Debt (
Long-Term Debt Long-Term Debt (Tables) | 9 Months Ended | |
Sep. 30, 2020 | ||
Debt Disclosure [Abstract] | ||
Schedule of Long-term Debt Instruments | The following table summarizes our debt obligations as of the dates presented: September 30, 2020 December 31, 2019 Principal Unamortized Discount and Deferred Issuance Costs 1, 2 Principal Unamortized Discount and Deferred Issuance Costs 1, 2 Credit facility $ 324,400 $ 362,400 Second lien term loan 200,000 $ 5,542 200,000 $ 7,372 Totals 524,400 $ 5,542 562,400 $ 7,372 Less: Unamortized discount 2 (1,814) (2,415) Less: Unamortized deferred issuance costs 1, 2 (3,728) (4,957) Long-term debt, net $ 518,858 $ 555,028 _______________________ 1 Excludes issuance costs of the Credit Facility, which represent costs attributable to the access to credit over its contractual term, that have been presented as a component of Other assets (see Note 10) and are being amortized over the term of the Credit Facility using the straight-line method. | [1] |
[1] | ssuance costs of the Credit Facility, which represent costs attributable to the access to credit over its contractual term, that have been presented as a component of Other assets (see Note 10) and are being amortized over the term of the Credit Facility using the straight-line method. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Lease, Cost | The following table summarizes the components of our total lease cost for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Operating lease cost $ 215 $ 208 $ 645 $ 565 Short-term lease cost 2,675 9,969 18,566 33,024 Variable lease cost 5,754 6,777 16,401 17,420 Less: Amounts charged as drilling costs 1 (1,978) (9,224) (16,309) (30,865) Total lease cost recognized in the Condensed Consolidated Statement of Operations 2 $ 6,666 $ 7,730 $ 19,303 $ 20,144 ___________________ 1 Represents the combined gross amounts incurred and (i) capitalized as drilling costs for our working interest share and (ii) billed to joint interest partners for their working interest share for short-term leases of operated drilling rigs. 2 Includes $3.0 million and $3.9 million and $8.6 million and $8.9 million recognized in Gathering, processing and transportation expense (“GPT”), $3.5 million and $3.6 million and $10.1 million and $10.7 million recognized in Lease operating expense (“LOE”) for the three and nine months ended September 30, 2020 and 2019, respectively, and $0.2 million and $0.6 million recognized in G&A for each of the three and nine months ended September 30, 2020 and 2019, respectively. |
Schedule of Supplemental Cash Flow Information Related to Leases | The following table summarizes supplemental cash flow information related to leases for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 236 $ 221 $ 707 $ 442 ROU assets obtained in exchange for lease obligations: Operating leases 1 $ 82 $ — $ 388 $ 3,325 ___________________ 1 Includes $2.5 million recognized upon the adoption of Accounting Standards Codification Topic 842 (“ASC842”) in 2019. |
Schedule of Supplemental Balance Sheet Information Related to Leases | The following table summarizes supplemental balance sheet information related to leases as of the dates presented: September 30, December 31, 2020 2019 ROU assets – operating leases $ 2,625 $ 2,740 Current operating lease obligations $ 953 $ 847 Noncurrent operating lease obligations 1,948 2,232 Total operating lease obligations $ 2,901 $ 3,079 Weighted-average remaining lease term – operating leases 3.3 years 4.1 years Weighted-average discount rate – operating leases 3.25 % 5.97 % Remaining maturities of operating lease obligations as of September 30, 2020: 2020 $ 236 2021 936 2022 874 2023 872 2024 and thereafter 145 Total undiscounted lease payments 3,063 Less: imputed interest (162) Total operating lease obligations $ 2,901 |
Supplemental Balance Sheet De_2
Supplemental Balance Sheet Detail (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Components of Selected Balance Sheet Accounts | The following table summarizes components of selected balance sheet accounts as of the dates presented: September 30, December 31, 2020 2019 Other current assets: Tubular inventory and well materials 1 $ 6,430 $ 2,989 Prepaid expenses 1 6,406 1,469 $ 12,836 $ 4,458 Other assets: Deferred issuance costs of the Credit Facility, net of amortization $ 2,524 $ 3,952 Right-of-use assets – operating leases 2,625 2,740 Other 110 32 $ 5,259 $ 6,724 Accounts payable and accrued liabilities: Trade accounts payable $ 3,522 $ 30,098 Drilling costs 4,651 18,832 Royalties 27,936 44,537 Production, ad valorem and other taxes 5,352 3,244 Compensation 3,877 5,272 Interest 647 730 Current operating lease obligations 953 847 Other 1,407 2,264 $ 48,345 $ 105,824 Other liabilities: Asset retirement obligations $ 5,321 $ 4,934 Noncurrent operating lease obligations 1,948 2,232 Defined benefit pension obligations 785 873 Postretirement health care benefit obligations 389 343 $ 8,443 $ 8,382 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables summarize the valuation of those assets and (liabilities) as of the dates presented: As of September 30, 2020 Fair Value Fair Value Measurement Classification Description Measurement Level 1 Level 2 Level 3 Assets: Interest rate swap assets – current $ — $ — $ — $ — Interest rate swap assets – noncurrent $ — $ — $ — $ — Commodity derivative assets – current $ 50,414 $ — $ 50,414 $ — Commodity derivative assets – noncurrent $ 2,619 $ — $ 2,619 $ — Liabilities: Interest rate swap liabilities – current $ (3,601) $ — $ (3,601) $ — Interest rate swap liabilities – noncurrent $ (2,639) $ — $ (2,639) $ — Commodity derivative liabilities – current $ (19,260) $ — $ (19,260) $ — Commodity derivative liabilities – noncurrent $ (2,903) $ — $ (2,903) $ — As of December 31, 2019 Fair Value Fair Value Measurement Classification Description Measurement Level 1 Level 2 Level 3 Assets: Commodity derivative assets – current $ 4,131 $ — $ 4,131 $ — Commodity derivative assets – noncurrent $ 2,750 $ — $ 2,750 $ — Liabilities: Commodity derivative liabilities – current $ (23,450) $ — $ (23,450) $ — Commodity derivative liabilities – noncurrent $ (3,385) $ — $ (3,385) $ — |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended | |
Sep. 30, 2020 | ||
Equity [Abstract] | ||
Schedule of Stockholders Equity | The following tables summarize the components of our shareholders ’ equity and the changes therein as of and for the quarterly periods in 2020 and 2019. Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders’ Equity Balance as of December 31, 2019 $ 151 $ 200,666 $ 319,987 $ (59) $ 520,745 Net income — — 163,094 — 163,094 Cumulative effect of change in accounting principle 1 — — (76) — (76) All other changes 2 1 556 — (1) 556 Balance as of March 31, 2020 $ 152 $ 201,222 $ 483,005 $ (60) $ 684,319 Net loss — — (94,715) — (94,715) All other changes 2 — 936 — (1) 935 Balance as of June 30, 2020 $ 152 $ 202,158 $ 388,290 $ (61) $ 590,539 Net loss — — (243,413) — (243,413) All other changes 2 — 608 — (2) 606 Balance as of September 30, 2020 $ 152 $ 202,766 $ 144,877 $ (63) $ 347,732 _______________________ 1 Attributable to the adoption of ASU 2016–13 as of January 1, 2020 (see Note 4). 2 Includes equity-classified share-based compensation of $2.6 million during the nine months ended September 30, 2020. During the nine months ended September 30, 2020, 45,435 and 19,402 shares of common stock were issued in connection with the vesting of certain time-vested restricted stock units (“RSUs”) and performance restricted stock units (“PRSUs”), net of shares withheld for income taxes. Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income Total Shareholders’ Equity Balance as of December 31, 2018 $ 151 $ 197,630 $ 249,492 $ 82 $ 447,355 Net loss — — (38,697) — (38,697) Cumulative effect of change in accounting principle 1 — — (94) — (94) All other changes 2 — 381 — (1) 380 Balance as of March 31, 2019 $ 151 $ 198,011 $ 210,701 $ 81 $ 408,944 Net income — — 51,625 — 51,625 All other changes 2 — 986 — (1) 985 Balance as of June 30, 2019 $ 151 $ 198,997 $ 262,326 $ 80 $ 461,554 Net income — — 54,362 — 54,362 All other changes 2 — 742 — — 742 Balance as of September 30, 2019 $ 151 $ 199,739 $ 316,688 $ 80 $ 516,658 _______________________ 1 Attributable to the adoption of ASC Topic 842 as of January 1, 2019 (see Note 9). | [1] |
[1] | to the adoption of ASU 2016–13 as of January 1, 2020 (see Note 4). |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Valuation Assumptions | The ranges for the assumptions used in the Monte Carlo model for the PRSUs granted during 2020, 2019 and 2017 are presented as follows: 2020 2019 2017 Expected volatility 101.32% to 117.71% 49.9 % 59.63% to 62.18% Dividend yield 0.0 % 0.0 % 0.0 % Risk-free interest rate 0.18% to 0.51% 1.66 % 1.44% to 1.51% |
Interest Expense (Tables)
Interest Expense (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Interest Expense [Abstract] | |
Interest Expense Net Disclosure | The following table summarizes the components of interest expense for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Interest on borrowings and related fees $ 7,375 $ 8,945 $ 22,944 $ 27,960 Accretion of original issue discount 1 205 188 602 551 Amortization of debt issuance costs 2 594 608 2,734 1,993 Capitalized interest (677) (1,005) (2,067) (3,234) $ 7,497 $ 8,736 $ 24,213 $ 27,270 ___________________ 1 Attributable to the Second Lien Facility (see Note 7). 2 Includes $0.9 million of accelerated amortization in the nine months ended September 30, 2020 attributable to the reduction in the borrowing base associated with the Seventh Amendment. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Components of Calculation of Basic and Diluted Earnings Per Share | The following table provides a reconciliation of the components used in the calculation of basic and diluted earnings per share for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net income (loss) – basic and diluted $ (243,413) $ 54,362 $ (175,034) $ 67,290 Weighted-average shares – basic 15,183 15,110 15,168 15,105 Effect of dilutive securities — 50 — 60 Weighted-average shares – diluted 1 15,183 15,160 15,168 15,165 ___________________ 1 For the three and nine months ended September 30, 2020, approximately 0.2 million and 0.1 million potentially dilutive securities, respectively, represented by RSUs and PRSUs, had the effect of being anti-dilutive and were excluded from the calculation of diluted earnings per share. |
Basis of Presentation (Details)
Basis of Presentation (Details) | Nov. 02, 2020USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Subsequent Event [Line Items] | ||||
Proceeds from Income Tax Refunds | $ 2,500,000 | |||
Severance Costs | 200,000 | |||
Executive Transition Costs | 1,200,000 | |||
Second Lien Facility | $ 200,000,000 | $ 200,000,000 | $ 200,000,000 | |
Strategic transaction - Professional and consulting fees | $ 500,000 | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Strategic transaction cash | $ 150,000,000 | |||
Percentage of ownership after transaction | 59.00% | |||
Strategic transaction cash-Pay down 2nd Lien | $ 50,000,000 | |||
Strategic transaction cash-Pay down Credit Facility | $ 100,000,000 | |||
Asset Coverage Ratio | 1.25 | |||
Amortization Payment | $ 1,875,000 | |||
Interest rate option two, applicable margin rate | 8.25% | |||
Interest rate option one, applicable margin rate over Adjusted LIBOR | 7.25% | |||
Debt Instrument Interest Additional Interest Above L I B O R Rate-Qtrly Amort Not Paid | 8.25% | |||
Applicable Margin Rate-Qtrly Amort Not Paid | 9.25% | |||
Contribution Agreement Termination Fee | $ 7,500,000 | |||
Asset Agreement Termination Fee | 1,919,133 | |||
Termination Expense Reimbursement | $ 2,826,000 | |||
Contribution Agreement - Preferred Stock | shares | 171,429 | |||
Contribution Agreement - Preferred Stock Par Value | $ / shares | $ 0.01 | |||
Asset Contribution Agreement - Common Shares | shares | 4,959,000 | |||
Asset Contribution Agreement - Common Stock Share Price | $ / shares | $ 7.74 | |||
Asset Contribution Agreement - Common Stock Share Value | $ 38,382,660 | |||
Asset Contribution Agreement - Preferred Stock | shares | 49,590 | |||
Contribution Agreement - Common Shares | shares | 17,142,857 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Working Interests Acquisition [Member] | |
Business Acquisition [Line Items] | |
Cash Paid on Date of Acquisition | $ 6,500 |
Accounts Receivable and Reven_3
Accounts Receivable and Revenues from Contracts with Customers - Summary of Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Customers | $ 24,443 | $ 63,165 |
Joint interest partners | 1,741 | 6,929 |
Other | 0 | 674 |
Accounts Receivable, Gross, Current, Total | 26,184 | 70,768 |
Less: Allowance for credit losses | (154) | (52) |
Accounts receivable, net of allowance for doubtful accounts | $ 26,030 | $ 70,716 |
Accounts Receivable and Reven_4
Accounts Receivable and Revenues from Contracts with Customers - Additional Information (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020USD ($)Customer | Sep. 30, 2019USD ($)Customer | Dec. 31, 2019USD ($) | Jan. 01, 2020USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Retained earnings | $ 144,877 | $ 319,987 | ||
Accounts Receivable, Allowance for Credit Loss | 154 | 52 | ||
Accounts Receivable, Credit Loss Expense (Reversal) | 26 | |||
Accounts Receivable, Allowance for Credit Loss, Writeoff | $ 0 | |||
Name of Major Customer [Domain] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Commodity Products, Number of Customers | Customer | 20 | |||
Financing Receivable, Credit Risk Percentage | 0.00% | |||
Accounts Receivable, Allowance for Credit Loss | $ 0 | 0 | ||
Accounts Receivable, Credit Loss Expense (Reversal) | 0 | |||
Accounts Receivable, Allowance for Credit Loss, Writeoff | $ 0 | |||
Joint Interest Partners, Mutual Operators [Domain] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Commodity Products, Number of Customers | Customer | 3 | |||
Financing Receivable, Credit Risk Percentage | 5.00% | 0.00% | ||
Accounts Receivable, Allowance for Credit Loss | $ 5 | 0 | ||
Accounts Receivable, Credit Loss Expense (Reversal) | 5 | |||
Accounts Receivable, Allowance for Credit Loss, Writeoff | $ 0 | |||
Joint Interest Partners, Large Partners [Domain] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Commodity Products, Number of Customers | Customer | 4 | |||
Financing Receivable, Credit Risk Percentage | 2.00% | 1.00% | ||
Accounts Receivable, Allowance for Credit Loss | $ 67 | 0 | ||
Accounts Receivable, Credit Loss Expense (Reversal) | 7 | |||
Accounts Receivable, Allowance for Credit Loss, Writeoff | $ 0 | |||
Joint Interest Partners, All Others [Domain] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Commodity Products, Number of Customers | Customer | 30 | |||
Financing Receivable, Credit Risk Percentage | 10.00% | 5.00% | ||
Financing Receivable, Past Due | $ 200 | |||
Accounts Receivable, Allowance for Credit Loss | 82 | $ 52 | ||
Accounts Receivable, Credit Loss Expense (Reversal) | 14 | |||
Accounts Receivable, Allowance for Credit Loss, Writeoff | 0 | |||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts Receivable, Allowance for Credit Loss | $ 76 | |||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Name of Major Customer [Domain] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts Receivable, Allowance for Credit Loss | 0 | |||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Joint Interest Partners, Mutual Operators [Domain] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts Receivable, Allowance for Credit Loss | 0 | |||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Joint Interest Partners, Large Partners [Domain] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts Receivable, Allowance for Credit Loss | 60 | |||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Joint Interest Partners, All Others [Domain] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts Receivable, Allowance for Credit Loss | $ 16 | |||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-13 [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Retained earnings | $ 100 | |||
Accounts Receivable | Credit Concentration Risk | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Concentration risk, percentage | 73.00% | 55.00% | ||
Accounts receivable, major customers | $ 17,900 | $ 34,600 | ||
Accounts Receivable | Customer Concentration Risk [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Number of major customers | Customer | 3 | 4 | ||
Revenues, major customers | $ (113,400) | $ (261,400) | ||
Concentration risk, percentage | 56.00% | 76.00% | ||
Accounts Receivable | Customer Concentration Risk [Member] | Major Customer 1 | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues, major customers | $ (46,000) | |||
Concentration risk, percentage | 23.00% | |||
Accounts Receivable | Customer Concentration Risk [Member] | Major Customer 2 | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues, major customers | $ (40,400) | |||
Concentration risk, percentage | 20.00% | |||
Accounts Receivable | Customer Concentration Risk [Member] | Major Customer 3 | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues, major customers | $ (27,000) | |||
Concentration risk, percentage | 13.00% |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Detail) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($)Customer | Dec. 31, 2019USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Derivative assets | $ 28,403 | $ 26,835 |
Derivative Asset | 53,033 | $ 6,881 |
Interest Rate Swap | ||
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Derivative assets | $ 6,200 | |
Number of derivative counterparties | Customer | 4 | |
Derivative, Notional Amount | $ 300,000 | |
Derivative, Average Fixed Interest Rate | 136.00% | |
Commodity contracts | ||
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Number of derivative counterparties | Customer | 7 | |
Derivative Asset | $ 30,900 | |
Commodity contracts | Crude Oil | ||
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Third-party quoted forward prices | NYMEX WTI | |
Commodity contracts | MEH [Domain] | ||
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Third-party quoted forward prices | MEH | |
Commodity contracts | Natural Gas [Member] | ||
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Third-party quoted forward prices | NYMEX HH |
Commodity Derivative Positions
Commodity Derivative Positions (Detail) | Sep. 30, 2020bbl$ / bbl |
Crude Oil | Swap | Fourth Quarter 2020 [Member] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Swap Type, Average Fixed Price | 57.59 |
Derivative, Nonmonetary Notional Amount | bbl | 10,174 |
Crude Oil | Swap | First Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Swap Type, Average Fixed Price | 55.89 |
Derivative, Nonmonetary Notional Amount | bbl | 3,333 |
Crude Oil | Swap | Second Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Swap Type, Average Fixed Price | 55.89 |
Derivative, Nonmonetary Notional Amount | bbl | 3,297 |
Crude Oil | 2-Way Collars [Domain] | Fourth Quarter 2020 [Member] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Average Floor Price | 48 |
Derivative, Average Cap Price | 57.10 |
Derivative, Nonmonetary Notional Amount | bbl | 2,000 |
Crude Oil | 2-Way Collars [Domain] | First Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Average Floor Price | 44.50 |
Derivative, Average Cap Price | 53.53 |
Derivative, Nonmonetary Notional Amount | bbl | 6,667 |
Crude Oil | 2-Way Collars [Domain] | Second Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Average Floor Price | 44.50 |
Derivative, Average Cap Price | 53.53 |
Derivative, Nonmonetary Notional Amount | bbl | 6,593 |
Crude Oil | 2-Way Collars [Domain] | Third Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Average Floor Price | 40.67 |
Derivative, Average Cap Price | 53.50 |
Derivative, Nonmonetary Notional Amount | bbl | 4,891 |
Crude Oil | 2-Way Collars [Domain] | Fourth Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Average Floor Price | 40.67 |
Derivative, Average Cap Price | 53.50 |
Derivative, Nonmonetary Notional Amount | bbl | 4,891 |
Crude Oil | Put Option | Fourth Quarter 2020 [Member] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Swap Type, Average Fixed Price | 43.55 |
Derivative, Nonmonetary Notional Amount | bbl | 3,783 |
Crude Oil | Put Option | First Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Swap Type, Average Fixed Price | 36.93 |
Derivative, Nonmonetary Notional Amount | bbl | 11,667 |
Crude Oil | Put Option | Second Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Swap Type, Average Fixed Price | 36.93 |
Derivative, Nonmonetary Notional Amount | bbl | 11,538 |
Crude Oil | Put Option | Third Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Swap Type, Average Fixed Price | 35 |
Derivative, Nonmonetary Notional Amount | bbl | 4,891 |
Crude Oil | Put Option | Fourth Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Swap Type, Average Fixed Price | 35 |
Derivative, Nonmonetary Notional Amount | bbl | 4,891 |
Crude Oil | Basis Swap [Domain] | Fourth Quarter 2020 [Member] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Swap Type, Average Fixed Price | 1.31 |
Derivative, Nonmonetary Notional Amount | bbl | 6,348 |
Crude Oil | CMA Roll Basis Swap [Domain] | Fourth Quarter 2020 [Member] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, CMA Roll Basis Swap, Price | (0.42) |
Derivative, Nonmonetary Notional Amount | bbl | 2,174 |
Natural Gas [Member] | 2-Way Collars [Domain] | Fourth Quarter 2020 [Member] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Average Floor Price | 2 |
Derivative, Average Cap Price | 2.21 |
Derivative, Nonmonetary Notional Amount | bbl | 12,804 |
Natural Gas [Member] | 2-Way Collars [Domain] | First Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Average Floor Price | 2.61 |
Derivative, Average Cap Price | 3.12 |
Derivative, Nonmonetary Notional Amount | bbl | 10,000 |
Natural Gas [Member] | 2-Way Collars [Domain] | Second Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Average Floor Price | 2.61 |
Derivative, Average Cap Price | 3.12 |
Derivative, Nonmonetary Notional Amount | bbl | 9,890 |
Natural Gas [Member] | 2-Way Collars [Domain] | Third Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Average Floor Price | 2.61 |
Derivative, Average Cap Price | 3.12 |
Derivative, Nonmonetary Notional Amount | bbl | 9,783 |
Natural Gas [Member] | 2-Way Collars [Domain] | Fourth Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Average Floor Price | 2.61 |
Derivative, Average Cap Price | 3.12 |
Derivative, Nonmonetary Notional Amount | bbl | 9,783 |
Natural Gas [Member] | Put Option | First Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Swap Type, Average Fixed Price | 2 |
Derivative, Nonmonetary Notional Amount | bbl | 6,667 |
Natural Gas [Member] | Put Option | Second Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Swap Type, Average Fixed Price | 2 |
Derivative, Nonmonetary Notional Amount | bbl | 6,593 |
Natural Gas [Member] | Put Option | Third Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Swap Type, Average Fixed Price | 2 |
Derivative, Nonmonetary Notional Amount | bbl | 6,522 |
Natural Gas [Member] | Put Option | Fourth Quarter 2021 [Domain] | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Derivative, Swap Type, Average Fixed Price | 2 |
Derivative, Nonmonetary Notional Amount | bbl | 6,522 |
Impact of Derivative Activities
Impact of Derivative Activities on Condensed Consolidated Statements of Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivatives | $ (6,891) | $ 24,248 | $ 109,879 | $ (30,166) |
Gain (Loss) on Interest Rate Derivative Instruments Not Designated as Hedging Instruments | 32 | 0 | (7,527) | 0 |
Gain (Loss) on Commodity Derivative Instruments | (6,923) | 24,248 | 117,406 | (30,166) |
Cash Settlements Interest Rate Swap Operating Activities | (919) | 0 | (1,287) | 0 |
Cash Settlements Commodity Operating Activities | 7,337 | (423) | 66,582 | (4,330) |
Cash settlements and premiums received (paid), net | $ 6,418 | $ (423) | $ 65,295 | $ (4,330) |
Fair Value of Derivative Instru
Fair Value of Derivative Instruments on Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current | $ 50,414 | $ 4,131 |
Derivative liabilities | 22,861 | 23,450 |
Derivative Asset, Noncurrent | 2,619 | 2,750 |
Derivative Liability, Noncurrent | 5,542 | 3,385 |
Derivative Liability | 28,403 | 26,835 |
Derivative Asset | 53,033 | 6,881 |
Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset | 30,900 | |
Commodity contracts | Current Derivative Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current | 50,414 | 4,131 |
Derivative liabilities | 19,260 | 23,450 |
Commodity contracts | Noncurrent Derivative Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Noncurrent | 2,619 | 2,750 |
Derivative Liability, Noncurrent | 2,903 | 3,385 |
Interest Rate Swap | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability | 6,200 | |
Interest Rate Swap | Current Derivative Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current | 0 | 0 |
Derivative liabilities | 3,601 | 0 |
Interest Rate Swap | Noncurrent Derivative Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Noncurrent | 0 | 0 |
Derivative Liability, Noncurrent | 2,639 | 0 |
Fair Value, Measurements, Recurring | Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current | 50,414 | 4,131 |
Derivative liabilities | 19,260 | (23,450) |
Derivative Asset, Noncurrent | 2,619 | 2,750 |
Derivative Liability, Noncurrent | 2,903 | $ 3,385 |
Fair Value, Measurements, Recurring | Interest Rate Swap | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current | 0 | |
Derivative liabilities | 3,601 | |
Derivative Asset, Noncurrent | 0 | |
Derivative Liability, Noncurrent | $ 2,639 |
Summary of Property and Equipme
Summary of Property and Equipment (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($)$ / bbl | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($)$ / bbl | Sep. 30, 2020USD ($)$ / bbl | Sep. 30, 2019USD ($)$ / bbl | Dec. 31, 2019USD ($) | |
Property, Plant and Equipment [Abstract] | ||||||
Asset Impairment Charges | $ 235,989 | $ 35,500 | $ 0 | $ 271,498 | $ 0 | |
Proved Oil and Gas Property, Full Cost Method | 1,509,097 | 1,509,097 | $ 1,409,219 | |||
Unproved Oil and Gas Property, Full Cost Method | 52,910 | 52,910 | 53,200 | |||
Oil and Gas Property, Full Cost Method, Gross | 1,562,007 | 1,562,007 | 1,462,419 | |||
Total properties and equipment | 1,589,502 | 1,589,502 | 1,488,334 | |||
Other property and equipment | 27,495 | 27,495 | 25,915 | |||
Accumulated depreciation, depletion and amortization | (754,002) | (754,002) | (367,909) | |||
Property and equipment, net (successful efforts method) | 835,500 | 835,500 | 1,120,425 | |||
Interest Costs Capitalized | 2,100 | 3,200 | ||||
Unproved Oil and Gas Property excluded | 52,900 | 52,900 | $ 53,200 | |||
Undeveloped Leasehold Costs Transferred | 4,500 | 200 | ||||
Capitalized Costs, Proved Properties | $ 1,300 | $ 3,200 | $ 1,300 | $ 3,200 | ||
Amortization Expense Per Physical Unit of Production | $ / bbl | 16.63 | 17.47 | 16.63 | 17.47 |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 29, 2017 | |
Debt Instrument [Line Items] | ||||
Revolving credit facility | $ 324,400 | $ 362,400 | ||
Second Lien Facility | 200,000 | 200,000 | ||
Long-term Debt | 524,400 | 562,400 | ||
Debt Instrument, Unamortized Discount | (1,814) | (2,415) | $ (4,000) | |
Unamortized Debt Issuance Expense | (3,728) | (4,957) | $ (8,200) | |
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 518,858 | 555,028 | ||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | [1],[2] | $ 5,542 | $ 7,372 | |
[1] | Discount and issuance costs of the Second Lien Facility are being amortized over the term of the underlying loan using the effective-interest method | |||
[2] | ssuance costs of the Credit Facility, which represent costs attributable to the access to credit over its contractual term, that have been presented as a component of Other assets (see Note 10) and are being amortized over the term of the Credit Facility using the straight-line method. |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) | Nov. 02, 2020 | Apr. 30, 2020 | Sep. 30, 2020 | Oct. 01, 2020 | Jul. 01, 2020 | May 01, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Sep. 29, 2017 |
Debt Disclosure [Line Items] | |||||||||
Debt Issuance Costs, Line of Credit Arrangements, Gross | $ 100,000 | ||||||||
Accelerated Deferred Debt Issuance Cost | 900,000 | ||||||||
Letters of credit outstanding | $ 400,000 | $ 400,000 | |||||||
Current Ratio | 1 | ||||||||
Debt To E B I T D Ratio Maximum | 3.50 | ||||||||
Anti-hording provision, Max cash | $ 25,000,000 | ||||||||
Second Lien Facility | $ 200,000,000 | 200,000,000 | |||||||
Proceeds from Debt, Net of Issuance Costs | 187,800,000 | ||||||||
Debt Instrument, Unamortized Discount | 1,814,000 | 2,415,000 | $ 4,000,000 | ||||||
Unamortized Debt Issuance Expense | $ 3,728,000 | $ 4,957,000 | $ 8,200,000 | ||||||
Debt Instrument, Discounted Percentage | 98.00% | ||||||||
Revolving Credit Facility | |||||||||
Debt Disclosure [Line Items] | |||||||||
Commitment fee | 0.50% | ||||||||
Subsequent Event [Member] | |||||||||
Debt Disclosure [Line Items] | |||||||||
Interest rate option one, applicable margin rate over Adjusted LIBOR | 7.25% | ||||||||
Interest rate option two, applicable margin rate | 8.25% | ||||||||
Minimum [Member] | Revolving Credit Facility | |||||||||
Debt Disclosure [Line Items] | |||||||||
Interest rate | 1.50% | ||||||||
Minimum [Member] | LIBOR | Revolving Credit Facility | |||||||||
Debt Disclosure [Line Items] | |||||||||
Applicable margin | 2.50% | ||||||||
Maximum [Member] | Revolving Credit Facility | |||||||||
Debt Disclosure [Line Items] | |||||||||
Interest rate | 2.50% | ||||||||
Maximum [Member] | LIBOR | Revolving Credit Facility | |||||||||
Debt Disclosure [Line Items] | |||||||||
Applicable margin | 3.50% | ||||||||
Revolving Credit Facility | |||||||||
Debt Disclosure [Line Items] | |||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000,000,000 | ||||||||
Line of Credit Facility, Current Borrowing Capacity | 400,000,000 | $ 375,000,000 | $ 350,000,000 | ||||||
Interest Rate at Period End | 3.41% | ||||||||
Revolving Credit Facility | Subsequent Event [Member] | |||||||||
Debt Disclosure [Line Items] | |||||||||
Line of Credit Facility, Current Borrowing Capacity | $ 350,000,000 | ||||||||
Revolving Credit Facility | Interest Payable One [Member] | |||||||||
Debt Disclosure [Line Items] | |||||||||
Debt Instrument, Interest Payable Period | 1 month | ||||||||
Revolving Credit Facility | Interest Payable Two [Member] | |||||||||
Debt Disclosure [Line Items] | |||||||||
Debt Instrument, Interest Payable Period | 3 months | ||||||||
Revolving Credit Facility | Interest Payable Three [Member] | |||||||||
Debt Disclosure [Line Items] | |||||||||
Debt Instrument, Interest Payable Period | 6 months | ||||||||
Line of Credit [Member] | Letter of Credit | |||||||||
Debt Disclosure [Line Items] | |||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 25,000,000 | ||||||||
Second Lien Facility [Member] | |||||||||
Debt Disclosure [Line Items] | |||||||||
Interest rate option one, applicable margin rate over Adjusted LIBOR | 7.00% | ||||||||
Interest rate option two, applicable margin rate | 6.00% | ||||||||
Second Lien Facility, Initial Interest Rate | 8.00% | 8.34% | |||||||
Second Lien Facility, Effective Interest Rate | 9.89% | ||||||||
Debt Instrument, Term | 5 years | ||||||||
Debt Instrument, Interest Rate Floor | 1.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Proceeds from Income Tax Refunds | $ 2,500,000 | |
Blended tax rate (as a percent) | 21.60% | |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 0.60% | 2.50% |
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | $ 1,200,000 | |
Deferred Tax Liabilities, Tax Deferred Income | 1,400,000 | |
Federal statutory income tax rate (as a percent) | 21.60% | |
Unrecognized Tax Benefits | 0 | |
Income Tax Examination, Penalties and Interest Expense | $ 0 | $ 0 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | ||
Lessee, Lease, Description [Line Items] | ||||||||
Operating Lease, Right-of-Use Asset | $ 2,625 | $ 2,625 | $ 2,740 | |||||
Operating Lease, Payments | 236 | $ 221 | 707 | $ 442 | ||||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 2,500 | 82 | 0 | 388 | 3,325 | |||
Operating Lease, Liability, Current | 953 | 953 | 953 | 953 | 847 | |||
Noncurrent operating lease obligations | 1,948 | 1,948 | 2,232 | |||||
Operating Lease, Liability | $ 2,901 | $ 2,901 | $ 3,079 | |||||
Operating Lease, Weighted Average Remaining Lease Term | 3 years 3 months 18 days | 3 years 3 months 18 days | 4 years 1 month 6 days | |||||
Operating Lease, Weighted Average Discount Rate, Percent | 3.25% | 3.25% | 5.97% | |||||
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | $ 236 | $ 236 | ||||||
Lessee, Operating Lease, Liability, to be Paid, Year One | 936 | 936 | ||||||
Lessee, Operating Lease, Liability, Payments, Due Year Two | 874 | 874 | ||||||
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 145 | 145 | ||||||
Lessee, Operating Lease, Liability, Payments, Due | 3,063 | 3,063 | ||||||
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (162) | (162) | ||||||
Operating Lease, Cost | 215 | 208 | 645 | 565 | ||||
Short-term Lease, Cost | 2,675 | 9,969 | 18,566 | 33,024 | ||||
Variable Lease, Cost | 5,754 | 6,777 | 16,401 | 17,420 | ||||
Amounts charged as dilling costs | (1,978) | (9,224) | (16,309) | [1] | (30,865) | [1] | ||
Lease, Cost | 6,666 | 7,730 | 19,303 | [2] | 20,144 | [2] | ||
Lessee, Operating Lease, Liability, to be Paid, Year Three | 872 | 872 | ||||||
Estimated Litigation Liability, Current | 100 | 100 | ||||||
Natural Gas, Gathering, Transportation, Marketing and Processing [Member] | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Lease, Cost | 3,000 | 8,600 | 3,900 | 8,900 | ||||
Operating Expense [Member] | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Lease, Cost | 3,500 | $ 10,100 | 3,600 | 10,700 | ||||
General and Administrative Expense [Member] | ||||||||
Lessee, Lease, Description [Line Items] | ||||||||
Lease, Cost | $ 200 | $ 200 | $ 600 | |||||
[1] | 1 Represents the combined gross amounts incurred and (i) capitalized as drilling costs for our working interest share and (ii) billed to joint interest partners for their working interest share for short-term leases of operated drilling rigs. | |||||||
[2] | 2 Includes $3.0 million and $3.9 million and $8.6 million and $8.9 million recognized in Gathering, processing and transportation expense (“GPT”), $3.5 million and $3.6 million and $10.1 million and $10.7 million recognized in Lease operating expense (“LOE”) for the three and nine months ended September 30, 2020 and 2019, respectively, and $0.2 million and $0.6 million recognized in G&A for each of the three and nine months ended September 30, 2020 and 2019, respectively. |
Supplemental Balance Sheet (Det
Supplemental Balance Sheet (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | |
Other current assets: | |||
Capitalized Costs - Crude Oil in Storage | $ 800 | ||
Tubular and Well Materials Purchase | 3,900 | ||
Drilling and Completion Prepayment | 3,600 | ||
Tubular inventory and well materials 1 | 6,430 | $ 2,989 | |
Prepaid expenses 1 | 6,406 | 1,469 | |
Other Assets, Current | 12,836 | 4,458 | |
Other assets: | |||
Deferred issuance costs of the Revolver | 2,524 | 3,952 | |
Operating Lease, Right-of-Use Asset | 2,625 | 2,740 | |
Other | 110 | 32 | |
Other assets | 5,259 | 6,724 | |
Accounts payable and accrued liabilities: | |||
Trade accounts payable | 3,522 | 30,098 | |
Drilling costs | 4,651 | 18,832 | |
Royalties | 27,936 | 44,537 | |
Production, ad valorem and other taxes | 5,352 | 3,244 | |
Compensation | 3,877 | 5,272 | |
Interest | 647 | 730 | |
Operating Lease, Liability, Current | 953 | 847 | $ 953 |
Other | 1,407 | 2,264 | |
Accounts payable and accrued liabilities | 48,345 | 105,824 | |
Other liabilities: | |||
Asset retirement obligations | 5,321 | 4,934 | |
Noncurrent operating lease obligations | 1,948 | 2,232 | |
Defined benefit pension obligations | 785 | 873 | |
Postretirement health care benefit obligations | 389 | 343 | |
Other liabilities | $ 8,443 | $ 8,382 |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Current | $ 50,414 | $ 4,131 |
Derivative Asset, Noncurrent | 2,619 | 2,750 |
Liabilities: | ||
Commodity derivative liabilities – current | (22,861) | (23,450) |
Derivative Liability, Noncurrent | $ (5,542) | (3,385) |
Fair Value Measurements | We apply the authoritative accounting provisions included in GAAP for measuring the fair value of both our financial and nonfinancial assets and liabilities. Fair value is an exit price representing the expected amount we would receive upon the sale of an asset or that we would expect to pay to transfer a liability in an orderly transaction with market participants at the measurement date. Our financial instruments that are subject to fair value disclosure consist of cash and cash equivalents, accounts receivable, accounts payable, derivatives and our Credit Facility and Second Lien Facility borrowings. As of September 30, 2020, the carrying values of all of these financial instruments approximated fair value. | |
Fair Value, Measurements, Recurring | Commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Current | $ 50,414 | 4,131 |
Derivative Asset, Noncurrent | 2,619 | 2,750 |
Liabilities: | ||
Commodity derivative liabilities – current | (19,260) | 23,450 |
Derivative Liability, Noncurrent | (2,903) | (3,385) |
Fair Value, Measurements, Recurring | Commodity contracts | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Current | 0 | 0 |
Derivative Asset, Noncurrent | 0 | 0 |
Liabilities: | ||
Commodity derivative liabilities – current | 0 | 0 |
Derivative Liability, Noncurrent | 0 | 0 |
Fair Value, Measurements, Recurring | Commodity contracts | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Current | 50,414 | 4,131 |
Derivative Asset, Noncurrent | 2,619 | 2,750 |
Liabilities: | ||
Commodity derivative liabilities – current | (19,260) | 23,450 |
Derivative Liability, Noncurrent | (2,903) | (3,385) |
Fair Value, Measurements, Recurring | Commodity contracts | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Current | 0 | 0 |
Derivative Asset, Noncurrent | 0 | 0 |
Liabilities: | ||
Commodity derivative liabilities – current | 0 | 0 |
Derivative Liability, Noncurrent | 0 | $ 0 |
Fair Value, Measurements, Recurring | Interest Rate Swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Current | 0 | |
Derivative Asset, Noncurrent | 0 | |
Liabilities: | ||
Commodity derivative liabilities – current | (3,601) | |
Derivative Liability, Noncurrent | (2,639) | |
Fair Value, Measurements, Recurring | Interest Rate Swap | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Current | 0 | |
Derivative Asset, Noncurrent | 0 | |
Fair Value, Measurements, Recurring | Interest Rate Swap | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Current | 0 | |
Derivative Asset, Noncurrent | 0 | |
Liabilities: | ||
Commodity derivative liabilities – current | (3,601) | |
Derivative Liability, Noncurrent | (2,639) | |
Fair Value, Measurements, Recurring | Interest Rate Swap | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Current | 0 | |
Derivative Asset, Noncurrent | $ 0 | |
Crude Oil | Commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Third-party quoted forward prices | NYMEX WTI | |
MEH [Domain] | Commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Third-party quoted forward prices | MEH | |
Natural Gas [Member] | Commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Third-party quoted forward prices | NYMEX HH |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Oct. 31, 2020bbl | Apr. 30, 2020bbl | Sep. 30, 2020USD ($)bbl | Oct. 01, 2020USD ($) | |
Commitments and Contingencies Disclosure [Line Items] | ||||
Number of barrels | bbl | 8,000 | |||
Asset Retirement Obligation | $ 5,300 | |||
Demobilization of Rigs | 2,000 | |||
Rig Prepayment | 1,000 | |||
Frac Service Prepayment | 2,000 | |||
Estimated Litigation Liability, Current | $ 100 | |||
Gonzales, Lavaca and Fayette Counties, Texas | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Number of barrels | bbl | 20,000 | |||
Crude Oil Storage Capacity | Nuevo G&T | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Number of barrels | bbl | 180,000 | |||
Remaining obligation under agreement | $ 100 | |||
Crude Oil Storage Capacity | Nuevo G&T | Forecast [Member] | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Number of barrels | bbl | 70,000 | |||
Crude Oil Gathering And Transportation Services | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Contractual Obligation, Remainder of 2020 | 3,200 | |||
Contractual Obligation, Due 2021 through 2025 | 13,000 | |||
Contractual Obligation, Due 2026 | 7,400 | |||
Contractual Obligation, Due 2027 through 2030 | 3,800 | |||
Contractual Obligation, Due 2031 | 2,200 | |||
Crude Oil Storage Capacity with Downstream Interstate Pipeline | Nuevo G&T | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Number of barrels | bbl | 90,000 | |||
Remaining obligation under agreement | $ 100 | |||
Crude Oil Storage Capacity with Downstream Interstate Pipeline | Nuevo G&T | Forecast [Member] | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Remaining obligation under agreement | $ 100 |
Shareholders' Equity Rollforwar
Shareholders' Equity Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
As of beginning balance | $ 590,539 | $ 684,319 | $ 520,745 | $ 461,554 | $ 408,944 | $ 447,355 | $ 520,745 | $ 447,355 | |||
Net income (loss) | (243,413) | (94,715) | 163,094 | 54,362 | 51,625 | (38,697) | (175,034) | 67,290 | |||
All Other Changes | 606 | 935 | 556 | 742 | 985 | 380 | [1] | ||||
As of ending balance | 347,732 | 590,539 | 684,319 | 516,658 | 461,554 | 408,944 | 347,732 | 516,658 | |||
Share-based compensation | 800 | 1,000 | 2,582 | 3,101 | |||||||
Accounting Standards Update 2016-13 [Member] | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
As of beginning balance | [2] | (76) | |||||||||
As of ending balance | [2] | (76) | |||||||||
Accounting Standards Update 2016-02 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
As of beginning balance | [3] | (94) | |||||||||
As of ending balance | [3] | (94) | |||||||||
Accumulated Other Comprehensive Loss | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
As of beginning balance | (61) | (60) | (59) | 80 | 81 | 82 | (59) | 82 | |||
All Other Changes | (2) | (1) | (1) | (1) | (1) | ||||||
As of ending balance | (63) | (61) | (60) | 80 | 80 | 81 | (63) | 80 | |||
Retained Earnings | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
As of beginning balance | 388,290 | 483,005 | 319,987 | 262,326 | 210,701 | 249,492 | 319,987 | 249,492 | |||
Net income (loss) | (243,413) | (94,715) | 163,094 | 54,362 | 51,625 | (38,697) | |||||
All Other Changes | 0 | 0 | |||||||||
As of ending balance | 144,877 | 388,290 | 483,005 | 316,688 | 262,326 | 210,701 | 144,877 | 316,688 | |||
Retained Earnings | Accounting Standards Update 2016-13 [Member] | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
As of beginning balance | [2] | (76) | |||||||||
As of ending balance | [2] | (76) | |||||||||
Retained Earnings | Accounting Standards Update 2016-02 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
As of beginning balance | [3] | (94) | |||||||||
As of ending balance | [3] | (94) | |||||||||
Common Stock | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
As of beginning balance | 152 | 152 | 151 | 151 | 151 | 151 | 151 | 151 | |||
All Other Changes | 1 | 0 | |||||||||
As of ending balance | 152 | 152 | 152 | 151 | 151 | 151 | 152 | 151 | |||
Paid-in Capital | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
As of beginning balance | 202,158 | 201,222 | 200,666 | 198,997 | 198,011 | 197,630 | 200,666 | 197,630 | |||
All Other Changes | 608 | 936 | 556 | [4] | 742 | 986 | 381 | [1] | |||
As of ending balance | $ 202,766 | $ 202,158 | $ 201,222 | $ 199,739 | $ 198,997 | $ 198,011 | $ 202,766 | $ 199,739 | |||
[1] | Includes equity-classified share-based compensation of $3.1 million during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, 42,534 shares of common stock were issued in connection with the vesting of certain RSUs, net of shares withheld for income taxes. | ||||||||||
[2] | to the adoption of ASU 2016–13 as of January 1, 2020 (see Note 4). | ||||||||||
[3] | 1 | ||||||||||
[4] | Includes equity-classified share-based compensation of $2.6 million during the nine months ended September 30, 2020. During the nine months ended September 30, 2020, 45,435 and 19,402 shares of common stock were issued in connection with the vesting of certain time-vested restricted stock units (“RSUs”) and performance restricted stock units (“PRSUs”), net of shares withheld for income taxes. |
Share-Based Compensation and _2
Share-Based Compensation and Other Benefit Plans - Summary of Share-Based Compensation Expense (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jan. 31, 2017tranche | Sep. 30, 2020USD ($)shares | Sep. 30, 2019USD ($)shares | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2017$ / shares | Dec. 31, 2019 | Dec. 31, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||
Share-based compensation | $ | $ 800 | $ 1,000 | $ 2,582 | $ 3,101 | ||||
Defined Contribution Plan, Cost | $ | 100 | 200 | 500 | 500 | ||||
Other Pension, Postretirement and Supplemental Plans [Member] | ||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||
Pension and Other Postretirement Benefits Cost (Reversal of Cost) | $ | $ 100 | $ 100 | $ 100 | $ 100 | ||||
Time Vested Restricted Stock Units - Employees [Member] | ||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 281,382 | 281,382 | ||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 584,497 | 9,707 | 584,497 | 9,707 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 4.49 | $ 30.65 | ||||||
Shares, Issued | 45,435 | 42,534 | 45,435 | 42,534 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 319,280 | 319,280 | ||||||
Restricted Stock Units (RSUs) [Member] | Share-based Payment Arrangement, Employee [Member] | ||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 57,500 | 57,500 | ||||||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | ||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||
Share-based Compensation Arrangements By Share-based Payment Award, Award Amortization Period | 1 year | |||||||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | ||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||
Share-based Compensation Arrangements By Share-based Payment Award, Award Amortization Period | 5 years | |||||||
Performance Shares [Member] | ||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 145,399 | 0 | 145,399 | 0 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 49.90% | |||||||
Share-based Compensation Arrangements By Share-based Payment Award, Award Amortization Period | 5 years | |||||||
Shares, Issued | 19,402 | 19,402 | ||||||
Share-based Compensation Arrangements By Share-based Payment Award, Performance Period | 5 years | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | 0.00% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 201,491 | 201,491 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum | 0.18% | 1.66% | 1.44% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum | 0.51% | 1.51% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 186,595 | 186,595 | ||||||
Performance Shares [Member] | Share-based Payment Arrangement, Employee [Member] | ||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 57,500 | 57,500 | ||||||
Performance Shares [Member] | Minimum [Member] | ||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 101.32% | 59.63% | ||||||
Share-based Compensation Arrangements By Share-based Payment Award, Number Of Award Tranches | tranche | 2 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares, Expected to Vest, Percentage | 0.00% | |||||||
Performance Shares [Member] | Maximum [Member] | ||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 117.71% | 62.18% | ||||||
Share-based Compensation Arrangements By Share-based Payment Award, Number Of Award Tranches | tranche | 3 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares, Expected to Vest, Percentage | 200.00% | |||||||
Performance Shares [Member] | Year 1 [Member] | ||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 34.02 | |||||||
Performance Shares [Member] | Year 1 [Member] | Minimum [Member] | ||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 2.40 | $ 47.70 | ||||||
Performance Shares [Member] | Year 1 [Member] | Maximum [Member] | ||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 16.02 | $ 65.28 | ||||||
Employees and Directors [Member] | ||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,424,600 | 1,424,600 |
Interest Expense Components of
Interest Expense Components of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Interest Expense [Abstract] | |||||
Interest Expense, Borrowings | $ 7,375 | $ 8,945 | $ 22,944 | $ 27,960 | |
Amortization of Debt Discount (Premium) | [1] | 205 | 188 | 602 | 551 |
Amortization of Debt Issuance Costs | 594 | 608 | 2,734 | 1,993 | |
Interest Paid, Capitalized, Investing Activities | (677) | (1,005) | (2,067) | (3,234) | |
Interest Expense | 7,497 | 8,736 | 24,213 | 27,270 | |
Accelerated Deferred Debt Issuance Cost | 900 | ||||
Share-based compensation | $ 800 | $ 1,000 | $ 2,582 | $ 3,101 | |
[1] | Attributable to the Second Lien Facility (see Note 7). |
Components of Calculation of Ba
Components of Calculation of Basic and Diluted Earnings Per Share (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 200 | 100 | ||||||
Net income (loss) | $ (243,413) | $ (94,715) | $ 163,094 | $ 54,362 | $ 51,625 | $ (38,697) | $ (175,034) | $ 67,290 |
Weighted-average shares – basic | 15,183 | 15,110 | 15,168 | 15,105 | ||||
Effect of dilutive securities | 0 | 50 | 0 | 60 | ||||
Weighted-average shares – diluted | 15,183 | 15,160 | 15,168 | 15,165 |