Document and Entity Information
Document and Entity Information Document Document - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 18, 2016 | |
Entity Information [Line Items] | ||
Entity Registrant Name | PDC ENERGY, INC. | |
Entity Central Index Key | 77,877 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 47,154,493 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 109,099 | $ 850 |
Cash and Cash Equivalents, at Carrying Value | 109,099 | 850 |
Accounts receivable, net | 107,350 | 104,274 |
Fair value of derivatives | 98,839 | 221,659 |
Prepaid expenses and other current assets | 3,847 | 5,266 |
Total current assets | 319,135 | 332,049 |
Properties and equipment, net | 1,930,595 | 1,940,552 |
Fair value of derivatives | 12,745 | 44,387 |
Other assets | 9,195 | 53,555 |
Total Assets | 2,271,670 | 2,370,543 |
Current liabilities: | ||
Accounts payable | 64,234 | 92,613 |
Production tax liability | 19,261 | 26,524 |
Fair value of derivatives | 22,824 | 1,595 |
Funds held for distribution | 49,965 | 29,894 |
Current portion of long-term debt | 0 | 112,940 |
Accrued interest payable | 8,557 | 9,057 |
Other accrued expenses | 22,358 | 28,709 |
Total current liabilities | 187,199 | 301,332 |
Long-term debt | 492,997 | 529,437 |
Deferred income taxes | 41,133 | 143,452 |
Asset retirement obligation | 81,583 | 84,032 |
Fair value of derivatives | 26,830 | 695 |
Other liabilities | 17,363 | 24,398 |
Total liabilities | 847,105 | 1,083,346 |
Commitments and contingent liabilities | ||
Shareholders' Equity: | ||
Preferred shares - par value $0.01 per share, 50,000,000 shares authorized,none issued | 0 | 0 |
Common shares - par value $0.01 per share, 150,000,000 authorized, 46,210,022 and 40,174,776 issued as of March 31, 2016 and December 31, 2015, respectively | 472 | 402 |
Additional paid-in capital | 1,211,876 | 907,382 |
Retained earnings | 213,442 | 380,422 |
Treasury shares - at cost, 20,836 and 20,220 as of March 31, 2016 and December 31, 2015, respectively | (1,225) | (1,009) |
Total shareholders' equity | 1,424,565 | 1,287,197 |
Total Liabilities and Shareholders' Equity | $ 2,271,670 | $ 2,370,543 |
Balance Sheet Parenthetical (Pa
Balance Sheet Parenthetical (Parentheticals) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 0 | 40,174,776 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Treasury shares, at cost | 0 | 20,220 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues: | ||||
Crude oil, natural gas and NGL sales | $ 110,841 | $ 96,928 | $ 186,208 | $ 171,037 |
Sales from natural gas marketing | 1,879 | 2,523 | 4,050 | 5,756 |
Commodity price risk management gain (loss), net | (92,801) | (49,041) | (81,745) | 17,621 |
Well operations, pipeline income and other | 178 | 550 | 2,415 | 1,178 |
Total revenues | 20,097 | 50,960 | 110,928 | 195,592 |
Costs, expenses and other: | ||||
Production costs | 13,675 | 12,639 | 29,005 | 28,924 |
Production taxes | 6,043 | 3,837 | 10,114 | 7,730 |
Transportation, gathering and processing expenses | 4,465 | 1,308 | 8,506 | 2,646 |
Cost of natural gas marketing | 2,125 | 2,836 | 4,703 | 6,094 |
Exploration expense | 237 | 275 | 447 | 560 |
Impairment of crude oil and natural gas properties | 4,170 | 4,404 | 5,171 | 7,176 |
General and administrative expense | 23,579 | 20,728 | 46,358 | 41,773 |
Depreciation, depletion and amortization | 107,014 | 70,106 | 204,402 | 125,926 |
Allowance for uncollectible notes receivable | 0 | 0 | 44,738 | 0 |
Accretion of asset retirement obligation | 1,811 | 1,588 | 3,623 | 3,148 |
(Gain) loss on sale of properties and equipment | 260 | (207) | 176 | (228) |
Total cost, expenses and other | 163,379 | 117,514 | 357,243 | 223,749 |
Income (loss) from operations | (143,282) | (66,554) | (246,315) | (28,157) |
Interest expense | (10,672) | (11,567) | (22,566) | (23,292) |
Interest income | 177 | 1,135 | 1,735 | 2,248 |
Income (loss) before income taxes | (153,777) | (76,986) | (267,146) | (49,201) |
Provision for income taxes | 58,327 | 30,116 | 100,166 | 19,393 |
Net income (loss) | $ (95,450) | $ (46,870) | $ (166,980) | $ (29,808) |
Earnings per share: | ||||
Basic | $ (2.04) | $ (1.17) | $ (3.78) | $ (0.78) |
Diluted | $ (2.04) | $ (1.17) | $ (3.78) | $ (0.78) |
Weighted-average common shares outstanding | ||||
Basic | 46,742 | 40,035 | 44,175 | 38,202 |
Diluted | 46,742 | 40,035 | 44,175 | 38,202 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | $ (166,980) | $ (29,808) |
Net income (loss) | (166,980) | (29,808) |
Adjustments to net income (loss) to reconcile to net cash provided by operating activities: | ||
Net change in fair value of unsettled derivatives | 201,825 | 76,869 |
Depreciation, depletion and amortization | 204,402 | 125,926 |
Allowance for uncollectible notes receivable | 44,738 | 0 |
Impairment of crude oil and natural gas properties | 5,171 | 7,176 |
Accretion of asset retirement obligation | 3,623 | 3,148 |
Stock-based compensation | 11,126 | 9,465 |
Gain (loss) on sale of properties and equipment | 176 | (228) |
Amortization of debt discount and issuance costs | 3,077 | 3,521 |
Deferred income taxes | (102,319) | (22,630) |
Non-cash interest income | (1,194) | (2,247) |
Other | (93) | (402) |
Changes in assets and liabilities | (5,754) | (24,333) |
Net cash from operating activities | 197,798 | 146,457 |
Cash flows from investing activities: | ||
Capital expenditures | (235,707) | (358,135) |
Proceeds from sale of properties and equipment | 4,903 | 243 |
Net cash from investing activities | (230,804) | (357,892) |
Cash flows from financing activities: | ||
Proceeds from revolving credit facility | 85,000 | 272,000 |
Repayment of revolving credit facility | (122,000) | (275,000) |
Redemption of convertible notes | (115,000) | 0 |
Proceeds from sale of common stock, net of issuance costs | 296,575 | 202,851 |
Other | (3,320) | (3,106) |
Net cash from financing activities | 141,255 | 196,745 |
Net change in cash and cash equivalents | 108,249 | (14,690) |
Cash and cash equivalents, beginning of period | 850 | 16,066 |
Cash and cash equivalents, end of period | 109,099 | 1,376 |
Cash payments (receipts) for: | ||
Interest, net of capitalized interest | 22,462 | 22,828 |
Income taxes | 167 | 9,936 |
Non-cash investing and financing activities: | ||
Change in accounts payable related to purchases of properties and equipment | (28,999) | (41,490) |
Change in asset retirement obligation, with a corresponding change to natural gas and crude oil properties, net of disposals | 843 | 1,395 |
Purchase of properties and equipment under capital leases | $ 1,074 | $ 950 |
NATURE OF OPERATIONS AND BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2016 | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION [Abstract] | |
Nature of Operations | NATURE OF OPERATIONS AND BASIS OF PRESENTATION PDC Energy, Inc. (the "Company," "we," "us," or "our") is a domestic independent exploration and production company that produces, develops, acquires and explores for crude oil, natural gas and NGLs, with primary operations in the Wattenberg Field in Colorado and the Utica Shale in southeastern Ohio. Our operations in the Wattenberg Field are focused in the horizontal Niobrara and Codell plays and our Ohio operations are focused in the Utica Shale play. As of June 30, 2016 , we owned an interest in approximately 3,000 gross wells. We are engaged in two business segments: Oil and Gas Exploration and Production and Gas Marketing. The accompanying unaudited condensed consolidated financial statements include the accounts of PDC, our wholly-owned subsidiary Riley Natural Gas ("RNG") and our proportionate share of our four affiliated partnerships. Pursuant to the proportionate consolidation method, our accompanying condensed consolidated financial statements include our pro rata share of assets, liabilities, revenues and expenses of the entities which we proportionately consolidate. All material intercompany accounts and transactions have been eliminated in consolidation. In our opinion, the accompanying condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary for a fair statement of our financial statements for interim periods in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, pursuant to such rules and regulations, certain notes and other financial information included in audited financial statements have been condensed or omitted. The December 31, 2015 condensed consolidated balance sheet data was derived from audited statements, but does not include disclosures required by U.S. GAAP. The information presented in this Quarterly Report on Form 10-Q should be read in conjunction with our audited consolidated financial statements and notes thereto included in our 2015 Form 10-K. Our results of operations and cash flows for the three and six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the full year or any other future period. |
Recent Accounting Standards
Recent Accounting Standards | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board ("FASB") and the International Accounting Standards Board issued their converged standard on revenue recognition that provides a single, comprehensive model that entities will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The standard outlines a five-step approach to apply the underlying principle: (1) identify the contract with the customer, (2) identify the separate performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to separate performance obligations and (5) recognize revenue when (or as) each performance obligation is satisfied. In March 2016, the FASB issued an update to the standard intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations when recognizing revenue. The revenue standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The revenue standard can be adopted under the full retrospective method or simplified transition method. Entities are permitted to adopt the revenue standard early, beginning with annual reporting periods after December 15, 2016. We are currently evaluating the impact these changes may have on our condensed consolidated financial statements. In August 2014, the FASB issued a new standard related to the disclosure of uncertainties about an entity's ability to continue as a going concern. The new standard requires management to assess an entity's ability to continue as a going concern at the end of every reporting period and to provide related footnote disclosures in certain circumstances. The new standard will be effective for all entities in the first annual period ending after December 15, 2016, with early adoption permitted. We expect to adopt this standard in the fourth quarter of 2016. Adoption of this standard is not expected to have a significant impact on our condensed consolidated financial statements. In February 2016, the FASB issued an accounting update aimed at increasing the transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about related leasing arrangements. For leases with terms of more than 12 months, the accounting update requires lessees to recognize an asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the lease asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend upon the classification of the lease as either a finance or operating lease. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted, and is to be applied as of the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact these changes may have on our condensed consolidated financial statements. In March 2016, the FASB issued an accounting update on stock-based compensation intended to simplify several aspects of the accounting for employee share-based payment award transactions. Areas of simplification include income tax consequences, classification of the awards as either equity or liabilities and the classification on the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. We expect to adopt this standard in the fourth quarter of 2016. Adoption of this standard is not expected to have a significant impact on our condensed consolidated financial statements. |
Fair Value Measurements and Dis
Fair Value Measurements and Disclosures | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Measurement Inputs, Disclosure | FAIR VALUE OF FINANCIAL INSTRUMENTS Determination of Fair Value Our fair value measurements are estimated pursuant to a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date, giving the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. The lowest level input that is significant to a fair value measurement in its entirety determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability, and may affect the valuation of the assets and liabilities and their placement within the fair value hierarchy levels. The three levels of inputs that may be used to measure fair value are defined as: Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived from observable market data by correlation or other means. Level 3 – Unobservable inputs for the asset or liability, including situations where there is little, if any, market activity. Derivative Financial Instruments We measure the fair value of our derivative instruments based upon a pricing model that utilizes market-based inputs, including, but not limited to, the contractual price of the underlying position, current market prices, crude oil and natural gas forward curves, discount rates such as the LIBOR curve for a similar duration of each outstanding position, volatility factors and nonperformance risk. Nonperformance risk considers the effect of our credit standing on the fair value of derivative liabilities and the effect of our counterparties' credit standings on the fair value of derivative assets. Both inputs to the model are based on published credit default swap rates and the duration of each outstanding derivative position. We validate our fair value measurement through the review of counterparty statements and other supporting documentation, the determination that the source of the inputs is valid, the corroboration of the original source of inputs through access to multiple quotes, if available, or other information and monitoring changes in valuation methods and assumptions. While we use common industry practices to develop our valuation techniques and believe our valuation method is appropriate and consistent with those used by other market participants, changes in our pricing methodologies or the underlying assumptions could result in significantly different fair values. Our fixed-price swaps, basis swaps and physical purchases are included in Level 2 and our collars and physical sales are included in Level 3. The following table presents, for each applicable level within the fair value hierarchy, our derivative assets and liabilities, including both current and non-current portions, measured at fair value on a recurring basis: June 30, 2016 December 31, 2015 Significant Other Significant Total Significant Other Significant Total (in thousands) Assets: Commodity-based derivative contracts $ 74,823 $ 36,761 $ 111,584 $ 174,657 $ 91,288 $ 265,945 Basis protection derivative contracts — — — 101 — 101 Total assets 74,823 36,761 111,584 174,758 91,288 266,046 Liabilities: Commodity-based derivative contracts 38,518 9,476 47,994 738 — 738 Basis protection derivative contracts 1,660 — 1,660 1,552 — 1,552 Total liabilities 40,178 9,476 49,654 2,290 — 2,290 Net asset $ 34,645 $ 27,285 $ 61,930 $ 172,468 $ 91,288 $ 263,756 The following table presents a reconciliation of our Level 3 assets measured at fair value: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (in thousands) Fair value, net asset beginning of period $ 73,105 $ 74,817 $ 91,288 $ 62,356 Changes in fair value included in statement of operations line item: Commodity price risk management gain (loss), net (26,422 ) (10,749 ) (20,257 ) 4,440 Sales from natural gas marketing — (1 ) (20 ) — Settlements included in statement of operations line items: Commodity price risk management gain (loss), net (19,398 ) (5,809 ) (43,656 ) (8,534 ) Sales from natural gas marketing — (3 ) (70 ) (7 ) Fair value, net asset end of period $ 27,285 $ 58,255 $ 27,285 $ 58,255 Net change in fair value of unsettled derivatives included in statement of operations line item: Commodity price risk management gain (loss), net $ (18,210 ) $ (10,056 ) $ (13,105 ) $ 3,629 The significant unobservable input used in the fair value measurement of our derivative contracts is the implied volatility curve, which is provided by a third-party vendor. A significant increase or decrease in the implied volatility, in isolation, would have a directionally similar effect resulting in a significantly higher or lower fair value measurement of our Level 3 derivative contracts. There has been no change in the methodology we apply to measure the fair value of our Level 3 derivative contracts during the periods covered by this report. Non-Derivative Financial Assets and Liabilities The carrying value of the financial instruments included in current assets and current liabilities approximate fair value due to the short-term maturities of these instruments. We utilize fair value on a nonrecurring basis to review our crude oil and natural gas properties for possible impairment when events and circumstances indicate a possible decline in the recoverability of the carrying value of such properties. The fair value of the properties is determined based upon estimated future discounted cash flow, a Level 3 input, using estimated production and prices at which we reasonably expect the crude oil and natural gas will be sold. The liability associated with our non-qualified deferred compensation plan for non-employee directors may be settled in cash or shares of our common stock. The carrying value of this obligation is based on the quoted market price of our common stock, which is a Level 1 input. The liability related to this plan, which was included in other liabilities on the condensed consolidated balance sheets, was immaterial as of June 30, 2016 and December 31, 2015 . The portion of our long-term debt related to our revolving credit facility approximates fair value due to the variable nature of related interest rates. We have not elected to account for the portion of our debt related to our senior notes under the fair value option; however, as of June 30, 2016 , we estimate the fair value of the portion of our long-term debt related to our 7.75% senior notes due 2022 to be $521.3 million , or 104.3% of par value. We determined these valuations based upon measurements of trading activity and broker and/or dealer quotes, respectively, which are published market prices, and therefore are Level 2 inputs. The carrying value of our capital lease obligations approximates fair value due to the variable nature of the imputed interest rates and the duration of the related vehicle lease. Concentration of Risk Derivative Counterparties. Our derivative arrangements expose us to credit risk of nonperformance by our counterparties. We primarily use financial institutions who are also lenders under our revolving credit facility as counterparties to our derivative contracts. To date, we have had no counterparty default losses relating to our derivative arrangements. We have evaluated the credit risk of our derivative assets from our counterparties using relevant credit market default rates, giving consideration to amounts outstanding for each counterparty and the duration of each outstanding derivative position. Based on our evaluation, we have determined that the potential impact of nonperformance of our counterparties on the fair value of our derivative instruments was not significant at June 30, 2016 , taking into account the estimated likelihood of nonperformance. The following table presents the counterparties that expose us to credit risk as of June 30, 2016 with regard to our derivative assets: Counterparty Name Fair Value of (in thousands) Canadian Imperial Bank of Commerce (1) $ 33,559 JP Morgan Chase Bank, N.A (1) 29,011 Bank of Nova Scotia (1) 22,676 Wells Fargo Bank, N.A. (1) 13,351 NATIXIS (1) 10,418 Other lenders in our revolving credit facility 2,329 Various (2) 240 Total $ 111,584 __________ (1) Major lender in our revolving credit facility. See Note 7, Long-Term Debt. (2) Represents a total of six counterparties. Notes Receivable. The following table presents information regarding a note receivable outstanding as of June 30, 2016 : Amount (in thousands) Note receivable: Principal outstanding, December 31, 2015 $ 43,069 Paid-in-kind interest 969 Principal outstanding, June 30, 2016 44,038 Allowance for uncollectible notes receivable (44,038 ) Note receivable, net $ — In October 2014, we sold our entire 50% ownership interest in PDCM to an unrelated third-party. As part of the consideration, we received a promissory note (the “Note”) for a principal sum of $39.0 million , bearing interest at varying rates beginning at 8% , and increasing annually. Pursuant to the Note agreement, interest is payable quarterly, in arrears, commencing in December 2014 and continuing on the last business day of each fiscal quarter thereafter. At the option of the issuer of the Note, an unrelated third-party, interest can be paid-in-kind (the “PIK Interest”) and any such PIK Interest will be added to the outstanding principal amount of the Note. As of June 30, 2016 , the issuer of the Note had elected the PIK Interest option. The principal and any unpaid interest is due and payable in full in September 2020 and can be prepaid in whole or in part at any time without premium or penalty. If an event of default occurs under the Note agreement, the Note must be repaid prior to maturity. The Note is secured by a pledge of stock in certain subsidiaries of the unrelated third-party, debt securities and other assets. On a quarterly basis, we examine the Note for evidence of impairment, evaluating factors such as the creditworthiness of the issuer of the Note and the value of the underlying assets that secure the Note. We performed our quarterly evaluation and cash flow analysis as of March 31, 2016 and, based upon the unaudited year-end financial statements and reserve report of the issuer of the Note received by us in late March 2016 and existing market conditions, determined that collection of the Note and PIK Interest was not reasonably assured. As a result, we recognized a provision and recorded an allowance for uncollectible notes receivable for the $44.0 million outstanding balance as of March 31, 2016, which was included in the condensed consolidated balance sheet line item other assets. Under the effective interest method, we recognized $1.2 million of interest income related to the Note for the three months ended March 31, 2016, of which $1.0 million was PIK Interest, and we recognized $1.1 million and $2.2 million of interest income related to the Note for the three and six months ended June 30, 2015, respectively, of which $0.8 million and $1.6 million , respectively, was PIK Interest. Additionally, we recorded a $0.7 million provision and allowance for uncollectible notes receivable to impair a promissory note related to a previous divestiture as collection of the promissory note is not reasonably assured based on the analysis we performed as of March 31, 2016. As of June 30, 2016 , there has been no change to our assessment of the collectibility of the notes or related interest since March 31, 2016. Commencing in the second quarter of 2016, we have ceased recognizing interest income on the notes and are accounting for the notes under the cash basis method. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments Not Designated as Hedging Instruments [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | DERIVATIVE FINANCIAL INSTRUMENTS Our results of operations and operating cash flows are affected by changes in market prices for crude oil, natural gas and NGLs. To manage a portion of our exposure to price volatility from producing crude oil and natural gas, we utilize the following economic hedging strategies for each of our business segments. • For crude oil and natural gas sales, we enter into derivative contracts to protect against price declines in future periods. While we structure these derivatives to reduce our exposure to changes in price associated with the derivative commodity, they also limit the benefit we might otherwise have received from price increases in the physical market; and • For natural gas marketing, we enter into fixed-price physical purchase and sale agreements that qualify as derivative contracts. In order to offset the fixed-price physical derivatives in our natural gas marketing, we enter into financial derivative instruments that have the effect of locking in the prices we will receive or pay for the same volumes and period, offsetting the physical derivative. We believe our derivative instruments continue to be effective in achieving the risk management objectives for which they were intended. As of June 30, 2016 , we had derivative instruments, which were comprised of collars, fixed-price swaps, basis protection swaps and physical sales and purchases, in place for a portion of our anticipated production through 2018 for a total of 71,560 BBtu of natural gas and 9,214 MBbls of crude oil. The majority of our derivative contracts are entered into at no cost to us as we hedge our anticipated production at the then-prevailing commodity market prices. We have not elected to designate any of our derivative instruments as hedges, and therefore do not qualify for use of hedge accounting. Accordingly, changes in the fair value of our derivative instruments are recorded in the statements of operations. Changes in the fair value of derivative instruments related to our Oil and Gas Exploration and Production segment are recorded in commodity price risk management, net. Changes in the fair value of derivative instruments related to our Gas Marketing segment are recorded in sales from and cost of natural gas marketing. The following table presents the balance sheet location and fair value amounts of our derivative instruments on the condensed consolidated balance sheets: Fair Value Derivative instruments: Balance sheet line item June 30, 2016 December 31, 2015 (in thousands) Derivative assets: Current Commodity contracts Related to crude oil and natural gas sales Fair value of derivatives $ 98,526 $ 221,161 Related to natural gas marketing Fair value of derivatives 313 441 Basis protection contracts Related to crude oil and natural gas sales Fair value of derivatives — 57 98,839 221,659 Non-current Commodity contracts Related to crude oil and natural gas sales Fair value of derivatives 12,673 44,292 Related to natural gas marketing Fair value of derivatives 72 51 Basis protection contracts Related to crude oil and natural gas sales Fair value of derivatives — 44 12,745 44,387 Total derivative assets $ 111,584 $ 266,046 Derivative liabilities: Current Commodity contracts Related to crude oil and natural gas sales Fair value of derivatives $ 21,179 $ — Related to natural gas marketing Fair value of derivatives 251 417 Basis protection contracts Related to crude oil and natural gas sales Fair value of derivatives 1,394 1,178 22,824 1,595 Non-current Commodity contracts Related to crude oil and natural gas sales Fair value of derivatives 26,509 275 Related to natural gas marketing Fair value of derivatives 54 46 Basis protection contracts Related to crude oil and natural gas sales Fair value of derivatives 267 374 26,830 695 Total derivative liabilities $ 49,654 $ 2,290 The following table presents the impact of our derivative instruments on our condensed consolidated statements of operations: Three Months Ended June 30, Six Months Ended June 30, Condensed consolidated statement of operations line item 2016 2015 2016 2015 (in thousands) Commodity price risk management gain (loss), net Net settlements $ 53,301 $ 44,049 $ 120,132 $ 94,461 Net change in fair value of unsettled derivatives (146,102 ) (93,090 ) (201,877 ) (76,840 ) Total commodity price risk management gain (loss), net $ (92,801 ) $ (49,041 ) $ (81,745 ) $ 17,621 Sales from natural gas marketing Net settlements $ 53 $ 165 $ 298 $ 396 Net change in fair value of unsettled derivatives (299 ) (124 ) (519 ) (293 ) Total sales from natural gas marketing $ (246 ) $ 41 $ (221 ) $ 103 Cost of natural gas marketing Net settlements $ (49 ) $ (157 ) $ (277 ) $ (375 ) Net change in fair value of unsettled derivatives 346 115 571 264 Total cost of natural gas marketing $ 297 $ (42 ) $ 294 $ (111 ) All of our financial derivative agreements contain master netting provisions that provide for the net settlement of all contracts through a single payment in the event of early termination. Our fixed-price physical purchase and sale agreements that qualify as derivative contracts are not subject to master netting provisions and are not significant. We have elected not to offset the fair value positions recorded on our condensed consolidated balance sheets. The following table reflects the impact of netting agreements on gross derivative assets and liabilities: As of June 30, 2016 Derivative instruments, recorded in condensed consolidated balance sheet, gross Effect of master netting agreements Derivative instruments, net (in thousands) Asset derivatives: Derivative instruments, at fair value $ 111,584 $ (30,404 ) $ 81,180 Liability derivatives: Derivative instruments, at fair value $ 49,654 $ (30,404 ) $ 19,250 As of December 31, 2015 Derivative instruments, recorded in condensed consolidated balance sheet, gross Effect of master netting agreements Derivative instruments, net (in thousands) Asset derivatives: Derivative instruments, at fair value $ 266,046 $ (1,921 ) $ 264,125 Liability derivatives: Derivative instruments, at fair value $ 2,290 $ (1,921 ) $ 369 |
Properties and Equipment
Properties and Equipment | 6 Months Ended |
Jun. 30, 2016 | |
Oil and Gas Property [Abstract] | |
Property, Plant and Equipment Disclosure | PROPERTIES AND EQUIPMENT The following table presents the components of properties and equipment, net of accumulated depreciation, depletion and amortization ("DD&A"): June 30, 2016 December 31, 2015 (in thousands) Properties and equipment, net: Crude oil and natural gas properties Proved $ 3,067,916 $ 2,881,189 Unproved 61,202 60,498 Total crude oil and natural gas properties 3,129,118 2,941,687 Equipment and other 31,566 30,098 Land and buildings 9,040 12,667 Construction in progress 117,190 113,115 Properties and equipment, at cost 3,286,914 3,097,567 Accumulated DD&A (1,356,319 ) (1,157,015 ) Properties and equipment, net $ 1,930,595 $ 1,940,552 The following table presents impairment charges recorded for crude oil and natural gas properties: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (in thousands) Impairment of proved and unproved properties $ 1,084 $ 1,631 $ 2,053 $ 1,919 Amortization of individually insignificant unproved properties 54 2,773 86 5,257 Impairment of crude oil and natural gas properties 1,138 4,404 2,139 7,176 Land and buildings 3,032 — 3,032 — Impairment of properties and equipment $ 4,170 $ 4,404 $ 5,171 $ 7,176 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure | INCOME TAXES We evaluate and update our estimated annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws. Consequently, based upon the mix and timing of our actual earnings compared to annual projections, our effective tax rate may vary quarterly and may make quarterly comparisons not meaningful. A tax expense or benefit unrelated to the current year income or loss is recognized in its entirety as a discrete item of tax in the period identified. The quarterly income tax provision is generally comprised of tax expense on income or benefit on loss at the most recent estimated annual effective tax rate, adjusted for the effect of discrete items. The effective tax rate for the three and six months ended June 30, 2016 was a 37.9% and 37.5% benefit on loss compared to a 39.1% and 39.4% benefit on loss for the three and six months ended June 30, 2015 . The effective tax rate for the three and six months ended June 30, 2016 is based upon a full year forecasted tax benefit on loss and is greater than the statutory federal tax rate, primarily due to state taxes and percentage depletion, partially offset by nondeductible officers’ compensation and nondeductible lobbying expenses. The effective tax rate for the three and six months ended June 30, 2015 differs from the statutory rate primarily due to state taxes and nondeductible officers' compensation, partially offset by percentage depletion and domestic production deduction. There were no significant discrete items recorded during the three and six months ended June 30, 2016 or June 30, 2015 . As of June 30, 2016 , there is no liability for unrecognized tax benefits. As of the date of this report, we are current with our income tax filings in all applicable state jurisdictions and are not currently under any state income tax examinations. We continue to voluntarily participate in the Internal Revenue Service's ("IRS") Compliance Assurance Program for the 2015 and 2016 tax years. With respect to the 2014 tax year, we have agreed to a post filing adjustment with the IRS which resulted in an immaterial tax payment for the 2014 tax year. The IRS has fully accepted the 2014 federal return, as adjusted. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-term Debt | LONG-TERM DEBT Long-term debt consisted of the following as of: June 30, 2016 December 31, 2015 (in thousands) Senior notes: 3.25% Convertible senior notes due 2016: Principal amount $ — $ 115,000 Unamortized discount — (1,852 ) Unamortized debt issuance costs — (208 ) 3.25% Convertible senior notes due 2016, net of discount and unamortized debt issuance costs — 112,940 7.75% Senior notes due 2022: Principal amount 500,000 500,000 Unamortized debt issuance costs (7,003 ) (7,563 ) 7.75% Senior notes due 2022, net of unamortized debt issuance costs 492,997 492,437 Total senior notes 492,997 605,377 Revolving credit facility — 37,000 Total debt, net of discount and unamortized debt issuance costs 492,997 642,377 Less current portion of long-term debt — 112,940 Long-term debt $ 492,997 $ 529,437 Senior Notes 3.25% Convertible Senior Notes Due 2016 . In November 2010 , we issued $115 million aggregate principal amount of 3.25% convertible senior notes due 2016 (the "Convertible Notes") in a private placement to qualified institutional buyers. The maturity for the payment of principal was May 15, 2016 . At December 31, 2015, our indebtedness included the Convertible Notes. Upon settlement in May 2016, we paid the aggregate principal amount of the Convertible Notes, plus cash for fractional shares, totaling approximately $115.0 million , utilizing proceeds from our March 2016 equity offering. Additionally, we issued 792,406 shares of common stock for the $47.9 million excess conversion value. See Note 11, Common Stock, for more information. 7.75% Senior Notes Due 2022. In October 2012 , we issued $500 million aggregate principal amount of 7.75% senior notes due October 15, 2022 (the “2022 Senior Notes”) in a private placement to qualified institutional buyers. The 2022 Senior Notes accrue interest from the date of issuance and interest is payable semi-annually in arrears on April 15 and October 15 . The indenture governing the 2022 Senior Notes contains customary restrictive incurrence covenants. Capitalized debt issuance costs are being amortized as interest expense over the life of the 2022 Senior Notes using the effective interest method. As of June 30, 2016 , we were in compliance with all covenants related to the 2022 Senior Notes and expect to remain in compliance throughout the next 12-month period. Credit Facility Revolving Credit Facility . We are party to a Third Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A. as administrative agent, and other lenders party thereto (sometimes referred to as the "revolving credit facility"). The revolving credit facility matures in May 2020 and is available for working capital requirements, capital expenditures, acquisitions, general corporate purposes and to support letters of credit. The revolving credit facility provides for a maximum of $1 billion in allowable borrowing capacity, subject to the borrowing base. In May 2016, we completed the semi-annual redetermination of our revolving credit facility by the lenders, which resulted in the reaffirmation of our borrowing base at $700 million ; however, we have elected to maintain the aggregate commitment at $450 million . The borrowing base is based on, among other things, the loan value assigned to the proved reserves attributable to our crude oil and natural gas interests, excluding proved reserves attributable to our affiliated partnerships. The borrowing base is subject to a semi-annual size redetermination based upon quantification of our reserves at June 30 and December 31, and is also subject to a redetermination upon the occurrence of certain events. The revolving credit facility is secured by a pledge of mortgages of certain producing crude oil and natural gas properties. Our affiliated partnerships are not guarantors of our obligations under the revolving credit facility. We had no outstanding balance on our revolving credit facility as of June 30, 2016 , compared to $37.0 million outstanding as of December 31, 2015 . The weighted-average interest rate on the outstanding balance on our revolving credit facility, exclusive of fees on the unused commitment and the letter of credit noted below, was 2.6% per annum as of December 31, 2015 . As of June 30, 2016 , RNG had an irrevocable standby letter of credit of approximately $11.7 million in favor of a third-party transportation service provider to secure firm transportation of the natural gas produced by third-party producers for whom we market production in the Appalachian Basin. The letter of credit currently expires in September 2016 and is automatically extended annually in accordance with the letter of credit's terms and conditions. The letter of credit reduces the amount of available funds under our revolving credit facility by an amount equal to the letter of credit. As of June 30, 2016 , the available funds under our revolving credit facility, including the reduction for the $11.7 million letter of credit, was $438.3 million . In addition to our currently elected commitment of $450 million , we have an additional $250 million of borrowing base availability under the revolving credit facility, subject to certain terms and conditions of the agreement. The revolving credit facility contains covenants customary for agreements of this type, with the most restrictive being certain financial tests on a quarterly basis. The financial tests, as defined per the revolving credit facility, include requirements to: (a) maintain a minimum current ratio of 1.00 to 1.00 and (b) not exceed a maximum leverage ratio of 4.25 to 1.00. As of June 30, 2016 , we were in compliance with all the revolving credit facility covenants and expect to remain in compliance throughout the next 12-month period. |
Capital Leases (Notes)
Capital Leases (Notes) | 6 Months Ended |
Jun. 30, 2016 | |
Capital Leased Assets [Line Items] | |
Capital Leases in Financial Statements of Lessee Disclosure [Text Block] | CAPITAL LEASES We periodically enter into non-cancelable lease agreements for vehicles utilized by our operations and field personnel. These leases are being accounted for as capital leases, as the present value of minimum monthly lease payments, including the residual value guarantee, exceeds 90% of the fair value of the leased vehicles at inception of the lease. The following table presents leased vehicles under capital leases as of June 30, 2016 : Amount (in thousands) Vehicles $ 2,674 Accumulated depreciation (464 ) $ 2,210 Future minimum lease payments by year and in the aggregate, under non-cancelable capital leases with terms of one year or more, consist of the following: For the Twelve Months Ending June 30, Amount (in thousands) 2017 $ 820 2018 1,075 2019 734 2,629 Less executory cost (105 ) Less amount representing interest (305 ) Present value of minimum lease payments $ 2,219 Short-term capital lease obligations $ 606 Long-term capital lease obligations 1,613 $ 2,219 Short-term capital lease obligations are included in other accrued expenses on the condensed consolidated balance sheets. Long-term capital lease obligations are included in other liabilities on the condensed consolidated balance sheets. |
Asset Retirement Obligations
Asset Retirement Obligations | 6 Months Ended |
Jun. 30, 2016 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligation Disclosure | ASSET RETIREMENT OBLIGATIONS The following table presents the changes in carrying amounts of the asset retirement obligations associated with our working interests in crude oil and natural gas properties: Amount (in thousands) Balance at beginning of period, January 1, 2016 $ 89,492 Obligations incurred with development activities 843 Accretion expense 3,623 Obligations discharged with disposal of properties and asset retirements (5,475 ) Balance end of period, June 30, 2016 88,483 Less current portion (6,900 ) Long-term portion $ 81,583 Our estimated asset retirement obligation liability is based on historical experience in plugging and abandoning wells, estimated economic lives and estimated plugging and abandonment cost considering federal and state regulatory requirements in effect. The liability is discounted using the credit-adjusted risk-free rate estimated at the time the liability is incurred or revised. In 2016, the credit-adjusted risk-free rates used to discount our plugging and abandonment liabilities ranged from 7.6% to 8.0%. In periods subsequent to initial measurement of the liability, we must recognize period-to-period changes in the liability resulting from the passage of time, revisions to either the amount of the original estimate of undiscounted cash flows or changes in inflation factors and changes to our credit-adjusted risk-free rate as market conditions warrant. Short-term asset retirement obligations are included in other accrued expenses on the condensed consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure | COMMITMENTS AND CONTINGENCIES Firm Transportation, Processing and Sales Agreements. We enter into contracts that provide firm transportation, sales and processing agreements on pipeline systems through which we transport or sell crude oil and natural gas. Satisfaction of the volume requirements includes volumes produced by us, purchased from third parties and produced by our affiliated partnerships and other third-party working interest owners. We record in our financial statements only our share of costs based upon our working interest in the wells. These contracts require us to pay these transportation and processing charges whether or not the required volumes are delivered. As natural gas prices continue to remain depressed, certain third-party producers under our Gas Marketing segment have begun and continue to experience financial distress, which has led to certain contractual defaults and litigation; however, to date, we have had no material counterparty default losses. As of June 30, 2016 , we have recorded an allowance for doubtful accounts of approximately $0.9 million . We have initiated several legal actions for breach of contract, collection, and related claims against certain third-party producers that are delinquent in their payment obligations, which have to date resulted in one default judgment. There have been no collections received to date and and some of the third-party producers have shut-in their wells. A group of independent West Virginia natural gas producers has filed, but not served on RNG, a complaint in Marshall County, West Virginia, naming Dominion Transmission, Inc. (“Dominion”), certain entities affiliated with Dominion, and RNG as defendants, alleging various contractual, fiduciary and related claims against the defendants, all of which are associated with firm transportation contracts entered into by plaintiffs and relating to pipelines owned and operated by Dominion and its affiliates. RNG is aware of this lawsuit filing but has not received formal service of process which commences the litigation against RNG. Furthermore, at this time, RNG is unable to estimate any potential damages associated with the claims, but believes the complaint is without merit and intends to vigorously pursue its defenses. The following table presents gross volume information related to our long-term firm transportation, sales and processing agreements for pipeline capacity: For the Twelve Months Ending June 30, Area 2017 2018 2019 2020 2021 and Total Expiration Natural gas (MMcf) Gas Marketing segment 7,117 7,117 7,117 7,136 15,138 43,625 August 31, 2022 Utica Shale 2,738 2,738 2,738 2,745 8,444 19,403 July 22, 2023 Total 9,855 9,855 9,855 9,881 23,582 63,028 Crude oil (MBbls) Wattenberg Field 2,413 2,413 2,413 2,421 — 9,660 June 30, 2020 Dollar commitment (in thousands) $ 17,573 $ 16,536 $ 16,324 $ 16,369 $ 9,052 $ 75,854 Litigation. The Company is involved in various legal proceedings that it considers normal to its business. The Company reviews the status of these proceedings on an ongoing basis and, from time to time, may settle or otherwise resolve these matters on terms and conditions that management believes are in the best interests of the Company. There is no assurance that settlements can be reached on acceptable terms or that adverse judgments, if any, in the remaining litigation will not exceed the amounts reserved. Although the results cannot be known with certainty, we currently believe that the ultimate results of such proceedings will not have a material adverse effect on our financial position, results of operations or liquidity. Environmental. Due to the nature of the natural gas and oil industry, we are exposed to environmental risks. We have various policies and procedures to minimize and mitigate the risks from environmental contamination. We conduct periodic reviews and simulated drills to identify changes in our environmental risk profile. Liabilities are recorded when environmental damages resulting from past events that require remediation are probable to require remediation and the costs can be reasonably estimated. As of June 30, 2016 and December 31, 2015 , we had accrued environmental liabilities in the amount of $4.0 million and $4.1 million , respectively, included in other accrued expenses on the condensed consolidated balance sheets. We are not aware of any environmental claims existing as of June 30, 2016 which have not been provided for or would otherwise have a material impact on our financial statements; however, there can be no assurance that current regulatory requirements will not change or that unknown past non-compliance with environmental laws will not be discovered on our properties. In August 2015, we received a Clean Air Act Section 114 Information Request (the "Information Request") from the U.S. Environmental Protection Agency ("EPA"). The Information Request sought, among other things, information related to the design, operation, and maintenance of our production facilities in the Denver-Julesburg Basin of Colorado. The Information Request focused on historical operation and design information for 46 of our production facilities and asks that we conduct sampling and analyses at the identified 46 facilities. We responded to the Information Request in January 2016. We continue to meet with the EPA and provide additional information, but cannot predict the outcome of this matter at this time. In addition, in December 2015, we received a Compliance Advisory pursuant to C.R.S. § 25-7-115(2) from the Colorado Department of Public Health and Environment's Air Quality Control Commission's Air Pollution Control Division alleging that we failed to design, operate, and maintain certain condensate collection, storage, processing and handling operations to minimize leakage of volatile organic compounds to the maximum extent possible at 65 facilities consistent with applicable standards under Colorado law. We are in the process of responding to the advisory, and working with the agency on specific response processes, but cannot predict the outcome of this matter at this time. Employment Agreements with Executive Officers . Each of our senior executive officers may be entitled to a severance payment and certain other benefits upon the termination of the officer's employment pursuant to the officer's employment agreement and/or the Company's executive severance compensation plan. The nature and amount of such benefits would vary based upon, among other things, whether the termination followed a change of control of the Company. |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | COMMON STOCK Sale of Equity Securities In March 2016, we completed a public offering of 5,922,500 shares of our common stock, par value $0.01 per share, at a price to us of $50.11 per share. Net proceeds of the offering were $296.6 million , after deducting offering expenses and underwriting discounts, of which $59,225 is included in common shares-par value and $296.5 million is included in additional paid-in capital ("APIC") on the June 30, 2016 condensed consolidated balance sheet. The shares were issued pursuant to an effective shelf registration statement on Form S-3 filed with the SEC in March 2015. Upon maturity of our Convertible Notes in May 2016, we paid the aggregate principal amount, plus cash for fractional shares, totaling approximately $115.0 million , utilizing proceeds from the offering. Additionally, we issued 792,406 shares of common stock for the premium in excess of the conversion price of $42.40 per share. In March 2015, we completed a public offering of 4,002,000 shares of our common stock, par value $0.01 per share, at a price to us of $50.73 per share. Net proceeds of the offering were $202.9 million , after deducting offering expenses and underwriting discounts, of which $40,020 is included in common shares-par value and $202.8 million is included in APIC on the condensed consolidated balance sheets. The shares were issued pursuant to the effective shelf registration statement on Form S-3 filed with the SEC in March 2015. Stock-Based Compensation Plans The following table provides a summary of the impact of our outstanding stock-based compensation plans on the results of operations for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (in thousands) Stock-based compensation expense $ 6,444 $ 5,097 $ 11,126 $ 9,465 Income tax benefit (2,452 ) (1,936 ) (4,233 ) (3,595 ) Net stock-based compensation expense $ 3,992 $ 3,161 $ 6,893 $ 5,870 Stock Appreciation Rights ("SARs") The SARs vest ratably over a three-year period and may be exercised at any point after vesting through ten years from the date of issuance. Pursuant to the terms of the awards, upon exercise, the executive officers will receive, in shares of common stock, the excess of the market price of the award on the date of exercise over the market price of the award on the date of issuance. In January 2016 , the Compensation Committee awarded 58,709 SARs to our executive officers. The fair value of each SAR award was estimated on the date of grant using a Black-Scholes pricing model using the following assumptions: Six Months Ended June 30, 2016 2015 Expected term of award 6.0 years 5.2 years Risk-free interest rate 1.8 % 1.4 % Expected volatility 54.5 % 58.0 % Weighted-average grant date fair value per share $ 26.96 $ 22.23 The expected term of the award was estimated using historical stock option exercise behavior data. The risk-free interest rate was based on the U.S. Treasury yields approximating the expected life of the award in effect at the time of grant. Expected volatilities were based on our historical volatility. We do not expect to pay or declare dividends in the foreseeable future. The following table presents the changes in our SARs for all periods presented: Six Months Ended June 30, 2016 2015 Number of Weighted-Average Average Remaining Contractual Aggregate Intrinsic (in thousands) Number of Weighted-Average Average Remaining Contractual (in years) Aggregate Intrinsic (in thousands) Outstanding beginning of year, January 1, 326,453 $ 38.99 279,011 $ 38.77 Awarded 58,709 51.63 68,274 39.63 Exercised (114,853 ) 38.71 $ 2,488 — — Outstanding at June 30, 270,309 41.86 7.4 4,258 347,285 38.94 7.8 $ 5,107 Vested and expected to vest at June 30, 263,546 41.70 7.4 4,193 339,980 38.88 7.7 5,019 Exercisable at June 30, 162,895 38.31 6.4 3,144 191,149 35.68 6.9 3,433 Total compensation cost related to SARs granted, net of estimated forfeitures, and not yet recognized in our condensed consolidated statement of operations as of June 30, 2016 was $2.0 million . The cost is expected to be recognized over a weighted-average period of 2.1 years. Restricted Stock Awards Time-Based Awards. The fair value of the time-based restricted shares is amortized ratably over the requisite service period, primarily three years. The time-based shares generally vest ratably on each anniversary following the grant date provided that a participant is continuously employed. In January 2016 , the Compensation Committee awarded to our executive officers a total of 61,634 time-based restricted shares that vest ratably over a three -year period ending in January 2019. The following table presents the changes in non-vested time-based awards to all employees, including executive officers, for the six months ended June 30, 2016 : Shares Weighted-Average Non-vested at December 31, 2015 525,081 $ 50.23 Granted 267,379 57.11 Vested (233,269 ) 49.74 Forfeited (12,306 ) 55.27 Non-vested at June 30, 2016 546,885 53.69 The following table presents the weighted-average grant date fair value per share and related information as of/for the periods presented: As of/for the Six Months Ended June 30, 2016 2015 (in thousands, except per share data) Total intrinsic value of time-based awards vested $ 13,314 $ 10,126 Total intrinsic value of time-based awards non-vested 31,506 34,556 Market price per common share as of June 30, 57.61 53.64 Weighted-average grant date fair value per share 57.11 48.54 Total compensation cost related to non-vested time-based awards, net of estimated forfeitures, and not yet recognized in our condensed consolidated statements of operations as of June 30, 2016 was $21.7 million . This cost is expected to be recognized over a weighted-average period of 2.1 years. Market-Based Awards. The fair value of the market-based restricted shares is amortized ratably over the requisite service period, primarily three years. The market-based shares vest if the participant is continuously employed throughout the performance period and the market-based performance measure is achieved, with a maximum vesting period of three years. All compensation cost related to the market-based awards will be recognized if the requisite service period is fulfilled, even if the market condition is not achieved. In January 2016 , the Compensation Committee awarded a total of 24,280 market-based restricted shares to our executive officers. In addition to continuous employment, the vesting of these shares is contingent on the Company's total shareholder return ("TSR"), which is essentially the Company’s stock price change including any dividends, as compared to the TSR of a group of peer companies. The shares are measured over a three-year period ending on December 31, 2018 and can result in a payout between 0% and 200% of the total shares awarded. The weighted-average grant date fair value per market-based share for these awards was computed using the Monte Carlo pricing model using the following assumptions: Six Months Ended June 30, 2016 2015 Expected term of award 3 years 3 years Risk-free interest rate 1.2 % 0.9 % Expected volatility 52.3 % 53.0 % Weighted-average grant date fair value per share $ 72.54 $ 66.16 The expected term of the awards was based on the requisite service period. The risk-free interest rate was based on the U.S. Treasury yields in effect at the time of grant and extrapolated to approximate the life of the award. The expected volatility was based on our historical volatility. The following table presents the change in non-vested market-based awards during the six months ended June 30, 2016 : Shares Weighted-Average Non-vested at December 31, 2015 71,549 $ 63.60 Granted 24,280 72.54 Vested (11,283 ) 98.50 Non-vested at June 30, 2016 84,546 61.51 The following table presents the weighted-average grant date fair value per share and related information as of/for the periods presented: As of/for the Six Months Ended June 30, 2016 2015 (in thousands, except per share data) Total intrinsic value of market-based awards vested $ 1,174 $ — Total intrinsic value of market-based awards non-vested 4,871 6,068 Market price per common share as of June 30, 57.61 53.64 Weighted-average grant date fair value per share 72.54 66.16 Total compensation cost related to non-vested market-based awards, net of estimated forfeitures, and not yet recognized in our condensed consolidated statements of operations as of June 30, 2016 was $2.2 million . This cost is expected to be recognized over a weighted-average period of 2.0 years. |
Earnings per share
Earnings per share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic earnings per share is computed by dividing net earnings by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is similarly computed, except that the denominator includes the effect, using the treasury stock method, of unvested restricted stock, outstanding SARs, stock options, Convertible Notes and shares held pursuant to our non-employee director deferred compensation plan, if including such potential shares of common stock is dilutive. The following table presents a reconciliation of the weighted-average diluted shares outstanding: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (in thousands) Weighted-average common shares outstanding - basic 46,742 40,035 44,175 38,202 Weighted-average common shares and equivalents outstanding - diluted 46,742 40,035 44,175 38,202 We reported a net loss for the three and six months ended June 30, 2016 and 2015, respectively. As a result, our basic and diluted weighted-average common shares outstanding were the same because the effect of the common share equivalents was anti-dilutive. The following table presents the weighted-average common share equivalents excluded from the calculation of diluted earnings per share due to their anti-dilutive effect: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (in thousands) Weighted-average common share equivalents excluded from diluted earnings per share due to their anti-dilutive effect: Restricted stock 768 871 745 832 Convertible notes 358 677 478 523 Other equity-based awards 103 118 105 99 Total anti-dilutive common share equivalents 1,229 1,666 1,328 1,454 In November 2010, we issued our Convertible Notes, which gave the holders the right to convert the aggregate principal amount into 2.7 million shares of our common stock at a conversion price of $42.40 per share. The Convertible Notes matured in May 2016. See Note 7, Long-Term Debt, for additional information. Prior to maturity, the Convertible Notes were included in the diluted earnings per share calculation using the treasury stock method if the average market share price exceeded the $42.40 conversion price during the period presented. Shares issuable upon conversion of the Convertible Notes were excluded from the diluted earnings per share calculation for the three and six months ended June 30, 2016 and 2015 as the effect would be anti-dilutive to our earnings per share. |
Business Segments
Business Segments | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure | BUSINESS SEGMENTS We separate our operating activities into two segments: Oil and Gas Exploration and Production and Gas Marketing. All material inter-company accounts and transactions between segments have been eliminated. Oil and Gas Exploration and Production. Our Oil and Gas Exploration and Production segment includes all of our crude oil and natural gas properties. The segment represents revenues and expenses from the production and sale of crude oil, natural gas and NGLs. Segment revenue includes crude oil, natural gas and NGLs sales, commodity price risk management, net and well operation and pipeline income. Segment income (loss) consists of segment revenue less production cost, exploration expense, impairment of properties and equipment, direct general and administrative expense and depreciation, depletion and amortization expense. Gas Marketing. Our Gas Marketing segment purchases, aggregates and resells natural gas produced by unrelated third-parties. Segment income (loss) primarily represents sales from natural gas marketing and direct interest income, less costs of natural gas marketing and direct general and administrative expense. Unallocated Amounts. Unallocated income includes unallocated other revenue, less corporate general and administrative expense, corporate DD&A expense, interest income and interest expense. Unallocated assets include assets utilized for corporate general and administrative purposes, as well as assets not specifically included in our two business segments. The following tables present our segment information: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (in thousands) Segment revenues: Oil and gas exploration and production $ 18,218 $ 48,437 $ 106,878 $ 189,836 Gas marketing 1,879 2,523 4,050 5,756 Total revenues $ 20,097 $ 50,960 $ 110,928 $ 195,592 Segment income (loss) before income taxes: Oil and gas exploration and production $ (118,508 ) $ (44,364 ) $ (152,541 ) $ 16,161 Gas marketing (246 ) (313 ) (653 ) (338 ) Unallocated (35,023 ) (32,309 ) (113,952 ) (65,024 ) Loss before income taxes $ (153,777 ) $ (76,986 ) $ (267,146 ) $ (49,201 ) June 30, 2016 December 31, 2015 (in thousands) Segment assets: Oil and gas exploration and production $ 2,244,799 $ 2,294,288 Gas marketing 4,117 4,217 Unallocated 22,754 72,038 Total assets $ 2,271,670 $ 2,370,543 |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Consolidation, Policy | The accompanying unaudited condensed consolidated financial statements include the accounts of PDC, our wholly-owned subsidiary Riley Natural Gas ("RNG") and our proportionate share of our four affiliated partnerships. Pursuant to the proportionate consolidation method, our accompanying condensed consolidated financial statements include our pro rata share of assets, liabilities, revenues and expenses of the entities which we proportionately consolidate. All material intercompany accounts and transactions have been eliminated in consolidation. |
Basis of Accounting, Policy | In our opinion, the accompanying condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary for a fair statement of our financial statements for interim periods in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, pursuant to such rules and regulations, certain notes and other financial information included in audited financial statements have been condensed or omitted. The December 31, 2015 condensed consolidated balance sheet data was derived from audited statements, but does not include disclosures required by U.S. GAAP. The information presented in this Quarterly Report on Form 10-Q should be read in conjunction with our audited consolidated financial statements and notes thereto included in our 2015 Form 10-K. Our results of operations and cash flows for the three and six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the full year or any other future period |
Reclassification, Policy | . |
Recently Issued Accounting Policy [Policy Text Block] | Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board ("FASB") and the International Accounting Standards Board issued their converged standard on revenue recognition that provides a single, comprehensive model that entities will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The standard outlines a five-step approach to apply the underlying principle: (1) identify the contract with the customer, (2) identify the separate performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to separate performance obligations and (5) recognize revenue when (or as) each performance obligation is satisfied. In March 2016, the FASB issued an update to the standard intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations when recognizing revenue. The revenue standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The revenue standard can be adopted under the full retrospective method or simplified transition method. Entities are permitted to adopt the revenue standard early, beginning with annual reporting periods after December 15, 2016. We are currently evaluating the impact these changes may have on our condensed consolidated financial statements. In August 2014, the FASB issued a new standard related to the disclosure of uncertainties about an entity's ability to continue as a going concern. The new standard requires management to assess an entity's ability to continue as a going concern at the end of every reporting period and to provide related footnote disclosures in certain circumstances. The new standard will be effective for all entities in the first annual period ending after December 15, 2016, with early adoption permitted. We expect to adopt this standard in the fourth quarter of 2016. Adoption of this standard is not expected to have a significant impact on our condensed consolidated financial statements. In February 2016, the FASB issued an accounting update aimed at increasing the transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about related leasing arrangements. For leases with terms of more than 12 months, the accounting update requires lessees to recognize an asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the lease asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend upon the classification of the lease as either a finance or operating lease. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted, and is to be applied as of the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact these changes may have on our condensed consolidated financial statements. In March 2016, the FASB issued an accounting update on stock-based compensation intended to simplify several aspects of the accounting for employee share-based payment award transactions. Areas of simplification include income tax consequences, classification of the awards as either equity or liabilities and the classification on the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. We expect to adopt this standard in the fourth quarter of 2016. Adoption of this standard is not expected to have a significant impact on our condensed consolidated financial statements. |
Earnings Per Share, Policy | Basic earnings per share is computed by dividing net earnings by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is similarly computed, except that the denominator includes the effect, using the treasury stock method, of unvested restricted stock, outstanding SARs, stock options, Convertible Notes and shares held pursuant to our non-employee director deferred compensation plan, if including such potential shares of common stock is dilutive. |
Fair Value Measurements and D20
Fair Value Measurements and Disclosures (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Our fixed-price swaps, basis swaps and physical purchases are included in Level 2 and our collars and physical sales are included in Level 3. The following table presents, for each applicable level within the fair value hierarchy, our derivative assets and liabilities, including both current and non-current portions, measured at fair value on a recurring basis: June 30, 2016 December 31, 2015 Significant Other Significant Total Significant Other Significant Total (in thousands) Assets: Commodity-based derivative contracts $ 74,823 $ 36,761 $ 111,584 $ 174,657 $ 91,288 $ 265,945 Basis protection derivative contracts — — — 101 — 101 Total assets 74,823 36,761 111,584 174,758 91,288 266,046 Liabilities: Commodity-based derivative contracts 38,518 9,476 47,994 738 — 738 Basis protection derivative contracts 1,660 — 1,660 1,552 — 1,552 Total liabilities 40,178 9,476 49,654 2,290 — 2,290 Net asset $ 34,645 $ 27,285 $ 61,930 $ 172,468 $ 91,288 $ 263,756 |
Fair Value Assets and Liabilities Unobservable Input Reconciliation | The following table presents a reconciliation of our Level 3 assets measured at fair value: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (in thousands) Fair value, net asset beginning of period $ 73,105 $ 74,817 $ 91,288 $ 62,356 Changes in fair value included in statement of operations line item: Commodity price risk management gain (loss), net (26,422 ) (10,749 ) (20,257 ) 4,440 Sales from natural gas marketing — (1 ) (20 ) — Settlements included in statement of operations line items: Commodity price risk management gain (loss), net (19,398 ) (5,809 ) (43,656 ) (8,534 ) Sales from natural gas marketing — (3 ) (70 ) (7 ) Fair value, net asset end of period $ 27,285 $ 58,255 $ 27,285 $ 58,255 Net change in fair value of unsettled derivatives included in statement of operations line item: Commodity price risk management gain (loss), net $ (18,210 ) $ (10,056 ) $ (13,105 ) $ 3,629 |
Concentration of Risk | The following table presents the counterparties that expose us to credit risk as of June 30, 2016 with regard to our derivative assets: Counterparty Name Fair Value of (in thousands) Canadian Imperial Bank of Commerce (1) $ 33,559 JP Morgan Chase Bank, N.A (1) 29,011 Bank of Nova Scotia (1) 22,676 Wells Fargo Bank, N.A. (1) 13,351 NATIXIS (1) 10,418 Other lenders in our revolving credit facility 2,329 Various (2) 240 Total $ 111,584 __________ (1) Major lender in our revolving credit facility. See Note 7, Long-Term Debt. (2) Represents a total of six counterparties. |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | The following table presents information regarding a note receivable outstanding as of June 30, 2016 : Amount (in thousands) Note receivable: Principal outstanding, December 31, 2015 $ 43,069 Paid-in-kind interest 969 Principal outstanding, June 30, 2016 44,038 Allowance for uncollectible notes receivable (44,038 ) Note receivable, net $ — |
Derivative Financial Instrume21
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments Not Designated as Hedging Instruments [Abstract] | |
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block] | The following table presents the balance sheet location and fair value amounts of our derivative instruments on the condensed consolidated balance sheets: Fair Value Derivative instruments: Balance sheet line item June 30, 2016 December 31, 2015 (in thousands) Derivative assets: Current Commodity contracts Related to crude oil and natural gas sales Fair value of derivatives $ 98,526 $ 221,161 Related to natural gas marketing Fair value of derivatives 313 441 Basis protection contracts Related to crude oil and natural gas sales Fair value of derivatives — 57 98,839 221,659 Non-current Commodity contracts Related to crude oil and natural gas sales Fair value of derivatives 12,673 44,292 Related to natural gas marketing Fair value of derivatives 72 51 Basis protection contracts Related to crude oil and natural gas sales Fair value of derivatives — 44 12,745 44,387 Total derivative assets $ 111,584 $ 266,046 Derivative liabilities: Current Commodity contracts Related to crude oil and natural gas sales Fair value of derivatives $ 21,179 $ — Related to natural gas marketing Fair value of derivatives 251 417 Basis protection contracts Related to crude oil and natural gas sales Fair value of derivatives 1,394 1,178 22,824 1,595 Non-current Commodity contracts Related to crude oil and natural gas sales Fair value of derivatives 26,509 275 Related to natural gas marketing Fair value of derivatives 54 46 Basis protection contracts Related to crude oil and natural gas sales Fair value of derivatives 267 374 26,830 695 Total derivative liabilities $ 49,654 $ 2,290 The following table presents the impact of our derivative instruments on our condensed consolidated statements of operations: Three Months Ended June 30, Six Months Ended June 30, Condensed consolidated statement of operations line item 2016 2015 2016 2015 (in thousands) Commodity price risk management gain (loss), net Net settlements $ 53,301 $ 44,049 $ 120,132 $ 94,461 Net change in fair value of unsettled derivatives (146,102 ) (93,090 ) (201,877 ) (76,840 ) Total commodity price risk management gain (loss), net $ (92,801 ) $ (49,041 ) $ (81,745 ) $ 17,621 Sales from natural gas marketing Net settlements $ 53 $ 165 $ 298 $ 396 Net change in fair value of unsettled derivatives (299 ) (124 ) (519 ) (293 ) Total sales from natural gas marketing $ (246 ) $ 41 $ (221 ) $ 103 Cost of natural gas marketing Net settlements $ (49 ) $ (157 ) $ (277 ) $ (375 ) Net change in fair value of unsettled derivatives 346 115 571 264 Total cost of natural gas marketing $ 297 $ (42 ) $ 294 $ (111 ) All of our financial derivative agreements contain master netting provisions that provide for the net settlement of all contracts through a single payment in the event of early termination. Our fixed-price physical purchase and sale agreements that qualify as derivative contracts are not subject to master netting provisions and are not significant. We have elected not to offset the fair value positions recorded on our condensed consolidated balance sheets. The following table reflects the impact of netting agreements on gross derivative assets and liabilities: As of June 30, 2016 Derivative instruments, recorded in condensed consolidated balance sheet, gross Effect of master netting agreements Derivative instruments, net (in thousands) Asset derivatives: Derivative instruments, at fair value $ 111,584 $ (30,404 ) $ 81,180 Liability derivatives: Derivative instruments, at fair value $ 49,654 $ (30,404 ) $ 19,250 As of December 31, 2015 Derivative instruments, recorded in condensed consolidated balance sheet, gross Effect of master netting agreements Derivative instruments, net (in thousands) Asset derivatives: Derivative instruments, at fair value $ 266,046 $ (1,921 ) $ 264,125 Liability derivatives: Derivative instruments, at fair value $ 2,290 $ (1,921 ) $ 369 |
Properties and Equipment (Table
Properties and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Oil and Gas Property [Abstract] | |
Property, Plant and Equipment | The following table presents the components of properties and equipment, net of accumulated depreciation, depletion and amortization ("DD&A"): June 30, 2016 December 31, 2015 (in thousands) Properties and equipment, net: Crude oil and natural gas properties Proved $ 3,067,916 $ 2,881,189 Unproved 61,202 60,498 Total crude oil and natural gas properties 3,129,118 2,941,687 Equipment and other 31,566 30,098 Land and buildings 9,040 12,667 Construction in progress 117,190 113,115 Properties and equipment, at cost 3,286,914 3,097,567 Accumulated DD&A (1,356,319 ) (1,157,015 ) Properties and equipment, net $ 1,930,595 $ 1,940,552 |
Impairment of natural gas and crude oil properties | The following table presents impairment charges recorded for crude oil and natural gas properties: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (in thousands) Impairment of proved and unproved properties $ 1,084 $ 1,631 $ 2,053 $ 1,919 Amortization of individually insignificant unproved properties 54 2,773 86 5,257 Impairment of crude oil and natural gas properties 1,138 4,404 2,139 7,176 Land and buildings 3,032 — 3,032 — Impairment of properties and equipment $ 4,170 $ 4,404 $ 5,171 $ 7,176 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consisted of the following as of: June 30, 2016 December 31, 2015 (in thousands) Senior notes: 3.25% Convertible senior notes due 2016: Principal amount $ — $ 115,000 Unamortized discount — (1,852 ) Unamortized debt issuance costs — (208 ) 3.25% Convertible senior notes due 2016, net of discount and unamortized debt issuance costs — 112,940 7.75% Senior notes due 2022: Principal amount 500,000 500,000 Unamortized debt issuance costs (7,003 ) (7,563 ) 7.75% Senior notes due 2022, net of unamortized debt issuance costs 492,997 492,437 Total senior notes 492,997 605,377 Revolving credit facility — 37,000 Total debt, net of discount and unamortized debt issuance costs 492,997 642,377 Less current portion of long-term debt — 112,940 Long-term debt $ 492,997 $ 529,437 |
Capital Leases (Tables)
Capital Leases (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Capital Leases [Abstract] | |
Schedule of Capital Leased Assets [Table Text Block] | The following table presents leased vehicles under capital leases as of June 30, 2016 : Amount (in thousands) Vehicles $ 2,674 Accumulated depreciation (464 ) $ 2,210 |
Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] | Future minimum lease payments by year and in the aggregate, under non-cancelable capital leases with terms of one year or more, consist of the following: For the Twelve Months Ending June 30, Amount (in thousands) 2017 $ 820 2018 1,075 2019 734 2,629 Less executory cost (105 ) Less amount representing interest (305 ) Present value of minimum lease payments $ 2,219 Short-term capital lease obligations $ 606 Long-term capital lease obligations 1,613 $ 2,219 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Change in Asset Retirement Obligation | The following table presents the changes in carrying amounts of the asset retirement obligations associated with our working interests in crude oil and natural gas properties: Amount (in thousands) Balance at beginning of period, January 1, 2016 $ 89,492 Obligations incurred with development activities 843 Accretion expense 3,623 Obligations discharged with disposal of properties and asset retirements (5,475 ) Balance end of period, June 30, 2016 88,483 Less current portion (6,900 ) Long-term portion $ 81,583 |
Commitments and Contingencies C
Commitments and Contingencies Commitments and Contigencies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Supply Commitment | : For the Twelve Months Ending June 30, Area 2017 2018 2019 2020 2021 and Total Expiration Natural gas (MMcf) Gas Marketing segment 7,117 7,117 7,117 7,136 15,138 43,625 August 31, 2022 Utica Shale 2,738 2,738 2,738 2,745 8,444 19,403 July 22, 2023 Total 9,855 9,855 9,855 9,881 23,582 63,028 Crude oil (MBbls) Wattenberg Field 2,413 2,413 2,413 2,421 — 9,660 June 30, 2020 Dollar commitment (in thousands) $ 17,573 $ 16,536 $ 16,324 $ 16,369 $ 9,052 $ 75,854 |
Common Stock (Tables)
Common Stock (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan | The following table provides a summary of the impact of our outstanding stock-based compensation plans on the results of operations for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (in thousands) Stock-based compensation expense $ 6,444 $ 5,097 $ 11,126 $ 9,465 Income tax benefit (2,452 ) (1,936 ) (4,233 ) (3,595 ) Net stock-based compensation expense $ 3,992 $ 3,161 $ 6,893 $ 5,870 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | In January 2016 , the Compensation Committee awarded 58,709 SARs to our executive officers. The fair value of each SAR award was estimated on the date of grant using a Black-Scholes pricing model using the following assumptions: Six Months Ended June 30, 2016 2015 Expected term of award 6.0 years 5.2 years Risk-free interest rate 1.8 % 1.4 % Expected volatility 54.5 % 58.0 % Weighted-average grant date fair value per share $ 26.96 $ 22.23 |
Schedule of Share-based Compensation, Stock Appreciation Rights Award Activity | The following table presents the changes in our SARs for all periods presented: Six Months Ended June 30, 2016 2015 Number of Weighted-Average Average Remaining Contractual Aggregate Intrinsic (in thousands) Number of Weighted-Average Average Remaining Contractual (in years) Aggregate Intrinsic (in thousands) Outstanding beginning of year, January 1, 326,453 $ 38.99 279,011 $ 38.77 Awarded 58,709 51.63 68,274 39.63 Exercised (114,853 ) 38.71 $ 2,488 — — Outstanding at June 30, 270,309 41.86 7.4 4,258 347,285 38.94 7.8 $ 5,107 Vested and expected to vest at June 30, 263,546 41.70 7.4 4,193 339,980 38.88 7.7 5,019 Exercisable at June 30, 162,895 38.31 6.4 3,144 191,149 35.68 6.9 3,433 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The following table presents the changes in non-vested time-based awards to all employees, including executive officers, for the six months ended June 30, 2016 : Shares Weighted-Average Non-vested at December 31, 2015 525,081 $ 50.23 Granted 267,379 57.11 Vested (233,269 ) 49.74 Forfeited (12,306 ) 55.27 Non-vested at June 30, 2016 546,885 53.69 The following table presents the weighted-average grant date fair value per share and related information as of/for the periods presented: As of/for the Six Months Ended June 30, 2016 2015 (in thousands, except per share data) Total intrinsic value of time-based awards vested $ 13,314 $ 10,126 Total intrinsic value of time-based awards non-vested 31,506 34,556 Market price per common share as of June 30, 57.61 53.64 Weighted-average grant date fair value per share 57.11 48.54 |
Restricted Stock Awards, Market-Based, Valuation assumptions | In January 2016 , the Compensation Committee awarded a total of 24,280 market-based restricted shares to our executive officers. In addition to continuous employment, the vesting of these shares is contingent on the Company's total shareholder return ("TSR"), which is essentially the Company’s stock price change including any dividends, as compared to the TSR of a group of peer companies. The shares are measured over a three-year period ending on December 31, 2018 and can result in a payout between 0% and 200% of the total shares awarded. The weighted-average grant date fair value per market-based share for these awards was computed using the Monte Carlo pricing model using the following assumptions: Six Months Ended June 30, 2016 2015 Expected term of award 3 years 3 years Risk-free interest rate 1.2 % 0.9 % Expected volatility 52.3 % 53.0 % Weighted-average grant date fair value per share $ 72.54 $ 66.16 |
Schedule of Nonvested Performance-based Units Activity | The following table presents the change in non-vested market-based awards during the six months ended June 30, 2016 : Shares Weighted-Average Non-vested at December 31, 2015 71,549 $ 63.60 Granted 24,280 72.54 Vested (11,283 ) 98.50 Non-vested at June 30, 2016 84,546 61.51 The following table presents the weighted-average grant date fair value per share and related information as of/for the periods presented: As of/for the Six Months Ended June 30, 2016 2015 (in thousands, except per share data) Total intrinsic value of market-based awards vested $ 1,174 $ — Total intrinsic value of market-based awards non-vested 4,871 6,068 Market price per common share as of June 30, 57.61 53.64 Weighted-average grant date fair value per share 72.54 66.16 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Reconciliation | The following table presents a reconciliation of the weighted-average diluted shares outstanding: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (in thousands) Weighted-average common shares outstanding - basic 46,742 40,035 44,175 38,202 Weighted-average common shares and equivalents outstanding - diluted 46,742 40,035 44,175 38,202 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents the weighted-average common share equivalents excluded from the calculation of diluted earnings per share due to their anti-dilutive effect: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (in thousands) Weighted-average common share equivalents excluded from diluted earnings per share due to their anti-dilutive effect: Restricted stock 768 871 745 832 Convertible notes 358 677 478 523 Other equity-based awards 103 118 105 99 Total anti-dilutive common share equivalents 1,229 1,666 1,328 1,454 |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The following tables present our segment information: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (in thousands) Segment revenues: Oil and gas exploration and production $ 18,218 $ 48,437 $ 106,878 $ 189,836 Gas marketing 1,879 2,523 4,050 5,756 Total revenues $ 20,097 $ 50,960 $ 110,928 $ 195,592 Segment income (loss) before income taxes: Oil and gas exploration and production $ (118,508 ) $ (44,364 ) $ (152,541 ) $ 16,161 Gas marketing (246 ) (313 ) (653 ) (338 ) Unallocated (35,023 ) (32,309 ) (113,952 ) (65,024 ) Loss before income taxes $ (153,777 ) $ (76,986 ) $ (267,146 ) $ (49,201 ) June 30, 2016 December 31, 2015 (in thousands) Segment assets: Oil and gas exploration and production $ 2,244,799 $ 2,294,288 Gas marketing 4,117 4,217 Unallocated 22,754 72,038 Total assets $ 2,271,670 $ 2,370,543 |
Nature of Operations and Basi30
Nature of Operations and Basis of Presentation Additional Information (Details) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Oil and gas producing wells, gross | 3,000 |
Number of Operating Segments | 2 |
Fair Value Measurements and D31
Fair Value Measurements and Disclosures (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Fair Value | Significant Other Observable Inputs (Level 2) | ||
Assets and Liabilities at Fair Value | ||
Commodity-based derivative - assets | $ 74,823 | $ 174,657 |
Basis protection derivative - assets | 0 | 101 |
Total assets | 74,823 | 174,758 |
Commodity-based derivative - liabilities | 38,518 | 738 |
Basis protection derivative - liabilities | 1,660 | 1,552 |
Total liabilities | 40,178 | 2,290 |
Net asset (fair value) | 34,645 | 172,468 |
Fair Value | Significant Unobservable Inputs (Level 3) | ||
Assets and Liabilities at Fair Value | ||
Commodity-based derivative - assets | 36,761 | 91,288 |
Basis protection derivative - assets | 0 | 0 |
Total assets | 36,761 | 91,288 |
Commodity-based derivative - liabilities | 9,476 | 0 |
Basis protection derivative - liabilities | 0 | 0 |
Total liabilities | 9,476 | 0 |
Net asset (fair value) | 27,285 | 91,288 |
Fair Value | Total | ||
Assets and Liabilities at Fair Value | ||
Commodity-based derivative - assets | 111,584 | 265,945 |
Basis protection derivative - assets | 0 | 101 |
Total assets | 111,584 | 266,046 |
Commodity-based derivative - liabilities | 47,994 | 738 |
Basis protection derivative - liabilities | 1,660 | 1,552 |
Total liabilities | 49,654 | 2,290 |
Net asset (fair value) | $ 61,930 | $ 263,756 |
3.25% Convertible Senior Notes due 2016 | ||
Assets and Liabilities at Fair Value | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | |
7.75% Senior Notes due 2022 | ||
Assets and Liabilities at Fair Value | ||
Debt Instrument, Interest Rate, Stated Percentage | 7.75% | |
7.75% senior notes fair value | $ 521,300 | |
7.75% senior notes fair value as percentage of par | 104.30% |
Reconciliation of Level 3 Fair
Reconciliation of Level 3 Fair Value Measurements (Details) - Derivative Financial Instrument Net Assets - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Roll-forward of Level 3 Assets | ||||
Fair Value, net assets, beginning of period | $ 73,105 | $ 74,817 | $ 91,288 | $ 62,356 |
Fair Value, net assets, end of period | 27,285 | 58,255 | 27,285 | 58,255 |
Commodity Price Risk Management (loss), net | ||||
Roll-forward of Level 3 Assets | ||||
Changes in fair value included in statement of operations line item: | (26,422) | (10,749) | (20,257) | 4,440 |
Settlements included in statement of operations line items: | (19,398) | (5,809) | (43,656) | (8,534) |
Net change in fair value of unsettled derivatives included in statement of operations line item | (18,210) | (10,056) | (13,105) | 3,629 |
Sales From Natural Gas Marketing | ||||
Roll-forward of Level 3 Assets | ||||
Changes in fair value included in statement of operations line item: | 0 | (1) | (20) | 0 |
Settlements included in statement of operations line items: | $ 0 | $ (3) | $ (70) | $ (7) |
Fair Value Measurements and D33
Fair Value Measurements and Disclosures Concentration of Risk (Details) $ in Thousands | Jun. 30, 2016USD ($) | |
Concentration Risk [Line Items] | ||
Fair Value of Derivative Assets | $ 111,584 | |
JPMorgan Chase Bank [Member] | ||
Concentration Risk [Line Items] | ||
Fair Value of Derivative Assets | 29,011 | [1] |
Canadian Imperial Bank of Commerce [Member] | ||
Concentration Risk [Line Items] | ||
Fair Value of Derivative Assets | 33,559 | [1] |
Bank of Nova Scotia [Member] | ||
Concentration Risk [Line Items] | ||
Fair Value of Derivative Assets | 22,676 | [1] |
Wells Fargo Bank [Member] | ||
Concentration Risk [Line Items] | ||
Fair Value of Derivative Assets | 13,351 | [1] |
Natixis [Member] | ||
Concentration Risk [Line Items] | ||
Fair Value of Derivative Assets | 10,418 | [1] |
Other Lenders in Our Credit Facility [Member] | ||
Concentration Risk [Line Items] | ||
Fair Value of Derivative Assets | 2,329 | |
Various [Member] | ||
Concentration Risk [Line Items] | ||
Fair Value of Derivative Assets | $ 240 | [2] |
[1] | Major lender in our revolving credit facility. See Note 7, Long-Term Debt. | |
[2] | Represents a total of six counterparties. |
Fair Value Measurements and D34
Fair Value Measurements and Disclosures Notes Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Oct. 14, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Paid-in-kind interest income | $ (1,194) | $ (2,247) | |||
Notes Receivable | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Note Receivable - Principal Outstanding | 44,038 | $ 43,069 | $ 39,000 | ||
Allowance for Uncollectible Notes Receivable | (44,038) | ||||
Note Receivable, net | 0 | ||||
Note receivable interest income | $ 1,100 | 1,200 | 2,200 | ||
Paid-in-kind interest income | $ 800 | $ 969 | $ 1,600 |
Derivative Financial Instrume35
Derivative Financial Instruments Additional Information (Details) MMBTU in Thousands | Jun. 30, 2016MMBTUMBbls |
Derivatives in Place for Anticipated Production | |
Anticipated natural gas production hedged (MMBtu) | MMBTU | 71,560 |
Anticipated crude oil production hedged (MBbls) | MBbls | 9,214 |
Fair Value of Derivative and Ba
Fair Value of Derivative and Balance Sheet Location (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Derivatives, Fair Value | ||
Derivative Asset, Fair Value, Gross Asset | $ 111,584 | $ 266,046 |
Derivative Liability, Fair Value, Gross Liability | 49,654 | 2,290 |
Current Assets | ||
Derivatives, Fair Value | ||
Derivative Asset, Fair Value, Gross Asset | 98,839 | 221,659 |
Non Current Assets | ||
Derivatives, Fair Value | ||
Derivative Asset, Fair Value, Gross Asset | 12,745 | 44,387 |
Current Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liability, Fair Value, Gross Liability | 22,824 | 1,595 |
Non Current Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liability, Fair Value, Gross Liability | 26,830 | 695 |
Commodity Contracts Related to Natural Gas and Crude Oil Sales | Current Assets | ||
Derivatives, Fair Value | ||
Fair Value of Derivatives | 98,526 | 221,161 |
Commodity Contracts Related to Natural Gas and Crude Oil Sales | Non Current Assets | ||
Derivatives, Fair Value | ||
Fair Value of Derivatives | 12,673 | 44,292 |
Commodity Contracts Related to Natural Gas and Crude Oil Sales | Current Liabilities | ||
Derivatives, Fair Value | ||
Fair Value of Derivatives | 21,179 | 0 |
Commodity Contracts Related to Natural Gas and Crude Oil Sales | Non Current Liabilities | ||
Derivatives, Fair Value | ||
Fair Value of Derivatives | 26,509 | 275 |
Commodity Contracts Related to Natural Gas Marketing | Current Assets | ||
Derivatives, Fair Value | ||
Fair Value of Derivatives | 313 | 441 |
Commodity Contracts Related to Natural Gas Marketing | Non Current Assets | ||
Derivatives, Fair Value | ||
Fair Value of Derivatives | 72 | 51 |
Commodity Contracts Related to Natural Gas Marketing | Current Liabilities | ||
Derivatives, Fair Value | ||
Fair Value of Derivatives | 251 | 417 |
Commodity Contracts Related to Natural Gas Marketing | Non Current Liabilities | ||
Derivatives, Fair Value | ||
Fair Value of Derivatives | 54 | 46 |
Basis Protection Contracts Related to Natural Gas and Crude Oil Sales | Current Assets | ||
Derivatives, Fair Value | ||
Fair Value of Derivatives | 0 | 57 |
Basis Protection Contracts Related to Natural Gas and Crude Oil Sales | Non Current Assets | ||
Derivatives, Fair Value | ||
Fair Value of Derivatives | 0 | 44 |
Basis Protection Contracts Related to Natural Gas and Crude Oil Sales | Current Liabilities | ||
Derivatives, Fair Value | ||
Fair Value of Derivatives | 1,394 | 1,178 |
Basis Protection Contracts Related to Natural Gas and Crude Oil Sales | Non Current Liabilities | ||
Derivatives, Fair Value | ||
Fair Value of Derivatives | $ 267 | $ 374 |
Impact of Derivative Instrument
Impact of Derivative Instruments on Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Commodity Price Risk Management (loss), net | ||||
Derivative [Line Items] | ||||
Net settlements | $ 53,301 | $ 44,049 | $ 120,132 | $ 94,461 |
Net change in fair value of unsettled derivatives | (146,102) | (93,090) | (201,877) | (76,840) |
Total commodity price risk management gain (loss), net | (92,801) | (49,041) | (81,745) | 17,621 |
Sales From Natural Gas Marketing | ||||
Derivative [Line Items] | ||||
Net settlements | 53 | 165 | 298 | 396 |
Net change in fair value of unsettled derivatives | (299) | (124) | (519) | (293) |
Total commodity price risk management gain (loss), net | (246) | 41 | (221) | 103 |
Cost of Natural Gas Marketing | ||||
Derivative [Line Items] | ||||
Net settlements | (49) | (157) | (277) | (375) |
Net change in fair value of unsettled derivatives | 346 | 115 | 571 | 264 |
Total commodity price risk management gain (loss), net | $ 297 | $ (42) | $ 294 | $ (111) |
Derivative Financial Instrume38
Derivative Financial Instruments Impact of Netting Agreements (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Derivative Asset: | ||
Derivative assets, gross | $ 111,584 | $ 266,046 |
Effect of master netting agreements | (30,404) | (1,921) |
Derivative asset, net | 81,180 | 264,125 |
Derivative Liability: | ||
Derivative liability, gross | 49,654 | 2,290 |
Effect of master netting agreements | (30,404) | (1,921) |
Derivative liability, net | $ 19,250 | $ 369 |
Properties and Equipment (Detai
Properties and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment | ||
Proved Natural Gas and Crude Oil Properties | $ 3,067,916 | $ 2,881,189 |
Unproved Natural Gas and Crude Oil Properties | 61,202 | 60,498 |
Total Natural Gas and Crude Oil Properties | 3,129,118 | 2,941,687 |
Equipment and other | 31,566 | 30,098 |
Land and Buildings | 9,040 | 12,667 |
Construction in Progress | 117,190 | 113,115 |
Properties and equipment, at cost | 3,286,914 | 3,097,567 |
Accumulated DD&A | (1,356,319) | (1,157,015) |
Property, Plant and Equipment, Net | $ 1,930,595 | $ 1,940,552 |
Impairment of Natural Gas and C
Impairment of Natural Gas and Crude Oil Properties (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Impairment of natural gas and crude oil properties [Line Items] | ||||
Impairment of proved properties | $ 1,084 | $ 1,631 | $ 2,053 | $ 1,919 |
Amortization of Individually Insignificant Unproved Properties | 54 | 2,773 | 86 | 5,257 |
Impairment of Oil and Gas Properties | 1,138 | 4,404 | 2,139 | 7,176 |
Land and buildings | 3,032 | 0 | 3,032 | 0 |
Impairment of properties and equipment | $ 4,170 | $ 4,404 | $ 5,171 | $ 7,176 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Effective Income Tax Rate, Continuing Operations | 37.90% | 39.10% | 37.50% | 39.40% |
Schedule of Long-Term Debt (Det
Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Instrument | ||
Total senior notes | $ 492,997 | $ 605,377 |
Total debt, net of discount and unamortized debt issuance costs | 492,997 | 642,377 |
Less current portion of long-term debt | 0 | 112,940 |
Long-term debt | 492,997 | 529,437 |
3.25% Convertible Senior Notes due 2016 | ||
Debt Instrument | ||
Principal amount | 0 | 115,000 |
Unamortized Discount | 0 | 1,852 |
Unamortized Debt Issuance Expense | 0 | 208 |
3.25% Convertible senior notes due 2016, net of discount | 0 | 112,940 |
7.75% Senior Notes due 2022 | ||
Debt Instrument | ||
Unamortized Debt Issuance Expense | 7,003 | 7,563 |
Principal amount | 500,000 | 500,000 |
7.75% Senior notes due 2022, net of unamortized debt issuance costs | 492,997 | 492,437 |
Revolving Credit Facility | ||
Debt Instrument | ||
Revolving credit facility | $ 0 | $ 37,000 |
Long-Term Debt Additional Infor
Long-Term Debt Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 15, 2022 | May 21, 2020 | May 16, 2016 | May 15, 2016 | Oct. 03, 2012 | Nov. 15, 2010 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 |
Debt Instrument | |||||||||
Cash repayment of convertible notes | $ 115,000 | $ 0 | |||||||
3.25% Convertible Senior Notes due 2016 | |||||||||
Debt Instrument | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | ||||||||
3.25% Convertible Note, Conversion Price | $ 42.40 | ||||||||
Debt Instrument, Issuance Date | Nov. 15, 2010 | ||||||||
Debt Instrument, Maturity Date | May 15, 2016 | ||||||||
7.75% Senior Notes due 2022 | |||||||||
Debt Instrument | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.75% | ||||||||
Debt Instrument, Issuance Date | Oct. 3, 2012 | ||||||||
Debt Instrument, Maturity Date | Oct. 15, 2022 | ||||||||
Revolving Credit Facility | |||||||||
Debt Instrument | |||||||||
Line of Credit Facility, Maximum Borrowing Capacity ($) | $ 1,000,000 | ||||||||
Line of Credit Facility, Current Borrowing Capacity ($) | 450,000 | ||||||||
Line of Credit Facility, Increase (Decrease), Net | $ 250,000 | ||||||||
Line of Credit Facility, Expiration Date | May 21, 2020 | ||||||||
Debt Instrument, Covenant Description | The revolving credit facility contains covenants customary for agreements of this type, with the most restrictive being certain financial tests on a quarterly basis. The financial tests, as defined per the revolving credit facility, include requirements to: (a) maintain a minimum current ratio of 1.00 to 1.00 and (b) not exceed a maximum leverage ratio of 4.25 to 1.00. | ||||||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 438,300 | ||||||||
RNG Credit Facility [Member] | |||||||||
Debt Instrument | |||||||||
PDC Irrevocable Standby Letter of Credit ($) | $ 11,700 | ||||||||
First Payment | 7.75% Senior Notes due 2022 | |||||||||
Debt Instrument | |||||||||
Debt Instrument, Frequency of Periodic Payment | April 15 | ||||||||
Second Payment | 7.75% Senior Notes due 2022 | |||||||||
Debt Instrument | |||||||||
Debt Instrument, Frequency of Periodic Payment | October 15 | ||||||||
Revolving Credit Facility | |||||||||
Debt Instrument | |||||||||
Long-term Line of Credit | $ 0 | $ 37,000 | |||||||
Weighted Average Interest Rate | 2.60% | ||||||||
Maximum Borrowing Base [Member] | Revolving Credit Facility | |||||||||
Debt Instrument | |||||||||
Line of Credit Facility, Current Borrowing Capacity ($) | $ 700,000 | ||||||||
3.25% Convertible Senior Notes due 2016 | |||||||||
Debt Instrument | |||||||||
Cash repayment of convertible notes | $ 115,000 | ||||||||
Shares issued upon maturity of convertible notes | 792,406 | ||||||||
3.25% Convertible Note, Conversion Price | $ 42.40 |
Capital Leases (Details)
Capital Leases (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Capital Leased Assets [Line Items] | |
Vehicles | $ 2,674 |
Accumulated Depreciation | (464) |
Capital Leased Assets, Net | $ 2,210 |
Capital Leases Minimum Lease Pa
Capital Leases Minimum Lease Payments (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Capital Leased Assets [Line Items] | |
Future Minimum Payments | $ 2,629 |
Executory Costs | (105) |
Amount representing interest | (305) |
Present Value of Net Minimum Payments | 2,219 |
Short-term Capital Lease Obligations | 606 |
Long-Term Capital Lease Obligations | 1,613 |
Total Capital Lease Obligations | 2,219 |
2,017 | |
Capital Leased Assets [Line Items] | |
Future Minimum Payments | 820 |
2,018 | |
Capital Leased Assets [Line Items] | |
Future Minimum Payments | 1,075 |
2,019 | |
Capital Leased Assets [Line Items] | |
Future Minimum Payments | $ 734 |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Asset Retirement Obligation, Roll Forward Analysis | |||||
Balance at beginning of period, January 1, 2016 | $ 89,492 | ||||
Obligations incurred with development activities | 843 | ||||
Accretion expense | $ 1,811 | $ 1,588 | 3,623 | $ 3,148 | |
Obligations discharged asset retirements | (5,475) | ||||
Balance end of period, June 30, 2016 | 88,483 | 88,483 | |||
Less current portion | 6,900 | 6,900 | |||
Long-term portion | $ 81,583 | $ 81,583 | $ 84,032 |
Commitments and Contingencies47
Commitments and Contingencies Commitments and Contigencies (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($)MMcfMBbls | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 63,028 |
Dollar Commitment ($ in thousands) | $ | $ 75,854 |
Appalachiain Basin | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 43,625 |
Utica Shale | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 19,403 |
Wattenberg Field | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | MBbls | 9,660 |
First Year Commitment [Member] | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 9,855 |
Dollar Commitment ($ in thousands) | $ | $ 17,573 |
First Year Commitment [Member] | Appalachiain Basin | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 7,117 |
First Year Commitment [Member] | Utica Shale | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 2,738 |
First Year Commitment [Member] | Wattenberg Field | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | MBbls | 2,413 |
Second Year Commitment [Member] | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 9,855 |
Dollar Commitment ($ in thousands) | $ | $ 16,536 |
Second Year Commitment [Member] | Appalachiain Basin | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 7,117 |
Second Year Commitment [Member] | Utica Shale | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 2,738 |
Second Year Commitment [Member] | Wattenberg Field | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | MBbls | 2,413 |
Third Year Commitment [Member] | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 9,855 |
Dollar Commitment ($ in thousands) | $ | $ 16,324 |
Third Year Commitment [Member] | Appalachiain Basin | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 7,117 |
Third Year Commitment [Member] | Utica Shale | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 2,738 |
Third Year Commitment [Member] | Wattenberg Field | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | MBbls | 2,413 |
Fourth Year Commitment [Member] | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 9,881 |
Dollar Commitment ($ in thousands) | $ | $ 16,369 |
Fourth Year Commitment [Member] | Appalachiain Basin | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 7,136 |
Fourth Year Commitment [Member] | Utica Shale | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 2,745 |
Fourth Year Commitment [Member] | Wattenberg Field | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | MBbls | 2,421 |
commitments 5 years and beyond [Member] | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 23,582 |
Dollar Commitment ($ in thousands) | $ | $ 9,052 |
commitments 5 years and beyond [Member] | Appalachiain Basin | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 15,138 |
commitments 5 years and beyond [Member] | Utica Shale | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | 8,444 |
commitments 5 years and beyond [Member] | Wattenberg Field | |
Supply Commitment | |
Oil and Gas Delivery Commitments Volumes (MMcf) | MBbls | 0 |
Supply Contract Expiration Date [Member] | Appalachiain Basin | |
Supply Commitment | |
Supply Commitments Contract Expiration Date | Aug. 31, 2022 |
Supply Contract Expiration Date [Member] | Utica Shale | |
Supply Commitment | |
Supply Commitments Contract Expiration Date | Jul. 22, 2023 |
Supply Contract Expiration Date [Member] | Wattenberg Field | |
Supply Commitment | |
Supply Commitments Contract Expiration Date | Jun. 30, 2020 |
Commitments and Contingencies A
Commitments and Contingencies Additional information (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Loss Contingencies [Line Items] | ||
Accrued Environmental Liabilities | $ 4 | $ 4.1 |
Gas Marketing Segment [Member] | ||
Loss Contingencies [Line Items] | ||
Allowance for Doubtful Accounts Receivable | $ 0.9 |
Common Stock Sale of Common Sto
Common Stock Sale of Common Stock (Details) - USD ($) | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Mar. 31, 2015 | |
Class of Stock [Line Items] | ||||
Common stock, par value | $ 0.01 | $ 0.01 | ||
Proceeds from Issuance of Common Stock | $ 296,575,000 | $ 202,851,000 | ||
Common shares - par value | 472,000 | $ 402,000 | ||
Additional paid-in capital | 1,211,876,000 | $ 907,382,000 | ||
Repayments of Convertible Debt | $ 115,000,000 | $ 0 | ||
March 2016 Common Stock Issuance | ||||
Class of Stock [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | 5,922,500 | |||
Common stock, par value | $ 0.01 | |||
Sale of Stock, Price Per Share | $ 50.11 | |||
Proceeds from Issuance of Common Stock | $ 296,600,000 | |||
Common shares - par value | 59,225 | |||
Additional paid-in capital | $ 296,500,000 | |||
March 2015 Common Stock Issuance | ||||
Class of Stock [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | 4,002,000 | |||
Common stock, par value | $ 0.01 | |||
Sale of Stock, Price Per Share | $ 50.73 | |||
Proceeds from Issuance of Common Stock | $ 202,900,000 | |||
Common shares - par value | $ 40,020 | |||
Additional paid-in capital | $ 202,800,000 |
Share Based Compensation Summar
Share Based Compensation Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Stock-based compensation expense | $ 6,444 | $ 5,097 | $ 11,126 | $ 9,465 |
Income tax benefit | (2,452) | (1,936) | (4,233) | (3,595) |
Net stock-based compensation expense | $ 3,992 | $ 3,161 | $ 6,893 | $ 5,870 |
SARs Fair Value Assumptions (De
SARs Fair Value Assumptions (Details) - Stock Appreciation Rights (SARs) - $ / shares | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Expected term of award | 6 years | 5 years 2 months 14 days |
Risk-free interest rate | 1.80% | 1.40% |
Expected Volatility | 54.50% | 58.00% |
Granted | $ 26.96 | $ 22.23 |
Schedule of Changes in SARs (De
Schedule of Changes in SARs (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | The SARs vest ratably over a three-year period and may be exercised at any point after vesting through ten years from the date of issuance. Pursuant to the terms of the awards, upon exercise, the executive officers will receive, in shares of common stock, the excess of the market price of the award on the date of exercise over the market price of the award on the date of issuance. | |||
Stock Appreciation Rights (SARs) | ||||
Number of SARs | ||||
Outstanding beginning of year, January 1, | 326,453 | 279,011 | ||
Awarded | 58,709 | 68,274 | ||
Outstanding at June 30, | 270,309 | 347,285 | ||
Vested and expected to vest at June 30, | 263,546 | 339,980 | ||
Exercisable at June 30, | 162,895 | 191,149 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | ||||
Outstanding beginning of year, January 1, | $ 38.99 | $ 38.77 | ||
Awarded | 51.63 | 39.63 | ||
Outstanding at June 30, | $ 41.86 | $ 38.94 | ||
Vested and expected to vest at June 30, | $ 41.70 | $ 38.88 | ||
Exercisable at June 30, | $ 38.31 | $ 35.68 | ||
Weighted-Average Remaining Contractual Term (in years) | ||||
Outstanding at June 30, | 7 years 5 months 9 days | 7 years 9 months 18 days | ||
Vested and expected to vest at June 30, | 7 years 4 months 23 days | 7 years 8 months 12 days | ||
Exercisable at June 30, | 6 years 5 months | 6 years 10 months 24 days | ||
Share based compesation aggregate intrinsic value | ||||
Outstanding beginning of year, January 1, | $ 4,258 | $ 5,107 | $ 4,258 | $ 5,107 |
Outstanding at June 30, | $ 4,258 | $ 5,107 | ||
Vested and expected to vest at June 30, | 4,193 | 5,019 | ||
Exercisable at June 30, | 3,144 | $ 3,433 | ||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 2,000 | |||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 2 years 27 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised | (114,853) | 0 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 38.71 | $ 0 | ||
Share based exercised awards intrinsic value | $ 2,488 |
Schedule of Changes in Restrict
Schedule of Changes in Restricted Stock - TIme Based Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | The SARs vest ratably over a three-year period and may be exercised at any point after vesting through ten years from the date of issuance. Pursuant to the terms of the awards, upon exercise, the executive officers will receive, in shares of common stock, the excess of the market price of the award on the date of exercise over the market price of the award on the date of issuance. | |
Restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | The fair value of the time-based restricted shares is amortized ratably over the requisite service period, primarily three years. The time-based shares generally vest ratably on each anniversary following the grant date provided that a participant is continuously employed. | |
Time based shares granted to executives | 61,634 | |
Number of Shares | ||
Outstanding beginning of year, January 1, | 525,081 | |
Granted | 267,379 | |
Vested | (233,269) | |
Outstanding at June 30, | 546,885 | |
Weighted-Average Grant-Date Fair Value | ||
Outstanding at beginning of year, January 1, | $ 50.23 | |
Granted | 57.11 | $ 48.54 |
Vested | 49.74 | |
Outstanding at June 30, | $ 53.69 | |
Total intrinsic value of time based awards vested | $ 13,314 | $ 10,126 |
Total intrinsic value of time-based awards non-vested | $ 31,506 | $ 34,556 |
Market price per common share as of June 30, | $ 57.61 | $ 53.64 |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 21,700 | |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 2 years 1 month 5 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (12,306) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 55.27 |
Restricted Stock - Market Based
Restricted Stock - Market Based Awards Fair Value Assumptions (Details) - Restricted Stock - Market Based Awards - $ / shares | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Expected term of award | 3 years | 3 years |
Risk-free interest rate | 1.20% | 0.90% |
Expected Volatility | 52.30% | 53.00% |
Granted | $ 72.54 | $ 66.16 |
Schedule of Changes in Restri55
Schedule of Changes in Restricted Stock - Market Based Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | The SARs vest ratably over a three-year period and may be exercised at any point after vesting through ten years from the date of issuance. Pursuant to the terms of the awards, upon exercise, the executive officers will receive, in shares of common stock, the excess of the market price of the award on the date of exercise over the market price of the award on the date of issuance. | |
Restricted Stock - Market Based Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 1,174 | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | The fair value of the market-based restricted shares is amortized ratably over the requisite service period, primarily three years. The market-based shares vest if the participant is continuously employed throughout the performance period and the market-based performance measure is achieved, with a maximum vesting period of three years. All compensation cost related to the market-based awards will be recognized if the requisite service period is fulfilled, even if the market condition is not achieved. | |
Time based shares granted to executives | 24,280 | |
Number of Shares | ||
Outstanding beginning of year, January 1, | 71,549 | |
Granted | 24,280 | |
Vested | (11,283) | |
Outstanding at June 30, | 84,546 | |
Weighted-Average Grant-Date Fair Value | ||
Outstanding at beginning of year, January 1, | $ 63.60 | |
Granted | 72.54 | $ 66.16 |
Vested | 98.50 | |
Outstanding at June 30, | $ 61.51 | |
Total intrinsic value of market-based awards non-vested | $ 4,871 | $ 6,068 |
Market price per common share as of June 30, | $ 57.61 | $ 53.64 |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 2,200 | |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 2 years 16 days |
Earnings Per Share (Details)
Earnings Per Share (Details) shares in Thousands | Nov. 15, 2010shares$ / shares | Jun. 30, 2016shares | Jun. 30, 2015shares | Jun. 30, 2016shares | Jun. 30, 2015shares |
Reconciliation of Weighted-Average Diluted Shares Outstanding | |||||
Weighted average common shares outstanding - basic | 46,742 | 40,035 | 44,175 | 38,202 | |
Weighted Average Number of Shares Outstanding - Diluted | 46,742 | 40,035 | 44,175 | 38,202 | |
Anti-dilutive Effect | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,229 | 1,666 | 1,328 | 1,454 | |
Restricted stock | |||||
Anti-dilutive Effect | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 768 | 871 | 745 | 832 | |
Convertible senior note | |||||
Anti-dilutive Effect | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 358 | 677 | 478 | 523 | |
Other equity-based awards | |||||
Anti-dilutive Effect | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 103 | 118 | |||
Stock Appreciation Rights [Member] | |||||
Anti-dilutive Effect | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 105 | 99 | |||
3.25% Convertible Senior Notes due 2016 | |||||
Convertible Senior Note Due 2016 | |||||
3.25% Convertible Note, Shares To Be Received Upon Conversion (in thousands) | 2,700 | ||||
3.25% Convertible Note, Conversion Price | $ / shares | $ 42.40 |
Business segments (Details)
Business segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | |
Segment Reporting Information: | ||||||
Revenues | $ 20,097 | $ 50,960 | $ 110,928 | $ 195,592 | $ 195,592 | |
Segment income (loss) before income taxes | (153,777) | (76,986) | (267,146) | $ (49,201) | (49,201) | |
Total Assets | 2,271,670 | 2,271,670 | $ 2,370,543 | |||
Oil and gas exploration and production segment | ||||||
Segment Reporting Information: | ||||||
Revenues | 18,218 | 48,437 | 106,878 | 189,836 | ||
Segment income (loss) before income taxes | (118,508) | (44,364) | (152,541) | 16,161 | ||
Total Assets | 2,244,799 | 2,244,799 | 2,294,288 | |||
Gas marketing segment | ||||||
Segment Reporting Information: | ||||||
Revenues | 1,879 | 2,523 | 4,050 | 5,756 | ||
Segment income (loss) before income taxes | (246) | (313) | (653) | (338) | ||
Total Assets | 4,117 | 4,117 | 4,217 | |||
Corporate and other segment | ||||||
Segment Reporting Information: | ||||||
Segment income (loss) before income taxes | (35,023) | $ (32,309) | (113,952) | $ (65,024) | ||
Total Assets | $ 22,754 | $ 22,754 | $ 72,038 |