Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 20, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | CABOT OIL & GAS CORP | |
Entity Central Index Key | 858470 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | FALSE | |
Entity Common Stock, Shares Outstanding | 413,603,811 | |
Entity Current Reporting Status | Yes |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash and cash equivalents | $13,948 | $20,954 |
Accounts receivable, net | 185,281 | 239,009 |
Inventories | 14,087 | 14,026 |
Derivative instruments | 134,041 | 137,603 |
Other current assets | 2,046 | 1,855 |
Total current assets | 349,403 | 413,447 |
Properties and equipment, net (Successful efforts method) | 5,058,804 | 4,925,711 |
Equity method investments | 74,528 | 68,029 |
Other assets | 29,588 | 30,529 |
TOTAL ASSETS | 5,512,323 | 5,437,716 |
Current liabilities | ||
Accounts payable | 321,215 | 400,076 |
Accrued liabilities | 34,579 | 63,669 |
Income taxes payable | 7,808 | 0 |
Deferred income taxes | 39,144 | 35,273 |
Total current liabilities | 402,746 | 499,018 |
Postretirement benefits | 36,448 | 35,827 |
Long-term debt | 1,877,000 | 1,752,000 |
Deferred income taxes | 851,649 | 843,876 |
Asset retirement obligations | 130,541 | 124,655 |
Other liabilities | 38,408 | 39,607 |
Total liabilities | 3,336,792 | 3,294,983 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock: Authorized -- 960,000,000 shares of $0.10 par value in 2015 and 2014, respectively Issued-- 423,496,205 shares and 422,915,258 shares in 2015 and 2014, respectively | 42,350 | 42,292 |
Additional paid-in capital | 711,180 | 710,432 |
Retained earnings | 1,730,987 | 1,698,995 |
Accumulated other comprehensive income (loss) | -2,151 | -2,151 |
Less treasury stock, at cost: 9,892,680 shares in 2015 and 2014, respectively | -306,835 | -306,835 |
Total stockholders' equity | 2,175,531 | 2,142,733 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $5,512,323 | $5,437,716 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, authorized shares | 960,000,000 | 960,000,000 |
Common stock, par value (in dollars per share) | $0.10 | $0.10 |
Common stock, Issued shares | 423,496,205 | 422,915,258 |
Treasury stock, shares | 9,892,680 | 9,892,680 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
OPERATING REVENUES | ||
Natural gas | $360,191 | $432,809 |
Crude oil and condensate | 62,558 | 59,144 |
Gain (loss) on derivative instruments | 34,123 | 0 |
Brokered natural gas | 4,827 | 13,153 |
Other | 3,066 | 4,697 |
TOTAL OPERATING REVENUES | 464,765 | 509,803 |
OPERATING EXPENSES | ||
Direct operations | 36,017 | 35,834 |
Transportation and gathering | 121,235 | 77,765 |
Brokered natural gas | 3,739 | 11,860 |
Taxes other than income | 11,280 | 13,044 |
Exploration | 8,732 | 6,474 |
Depreciation, depletion and amortization | 175,497 | 147,418 |
General and administrative | 22,529 | 21,636 |
TOTAL OPERATING EXPENSES | 379,029 | 314,031 |
Earnings (loss) on equity method investments | 1,421 | 0 |
Gain (loss) on sale of assets | 138 | -1,285 |
INCOME FROM OPERATIONS | 87,295 | 194,487 |
Interest expense | 23,566 | 16,557 |
Income before income taxes | 63,729 | 177,930 |
Income tax expense | 23,474 | 70,899 |
NET INCOME | $40,255 | $107,031 |
Earnings per share | ||
Basic (in dollars per share) | $0.10 | $0.26 |
Diluted (in dollars per share) | $0.10 | $0.26 |
Weighted-average common shares outstanding | ||
Basic (in shares) | 413,344 | 416,900 |
Diluted (in shares) | 414,771 | 418,513 |
Dividends per common share (in dollars per share) | $0.02 | $0.02 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $40,255 | $107,031 | |
Other comprehensive income (loss), net of taxes: | |||
Reclassification adjustment for settled cash flow hedge contracts | 0 | 42,565 | [1] |
Changes in fair value of cash flow hedge contracts | 0 | -80,175 | [2] |
Total other comprehensive income (loss) | 0 | -37,610 | |
Comprehensive income (loss) | $40,255 | $69,421 | |
[1] | Net of income taxes of $(28,210) for the three months ended MarchB 31, 2014. | ||
[2] | Net of income taxes of $53,135 for the three months ended MarchB 31, 2014. |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | |
Reclassification adjustment for settled cash flow hedge contracts, income taxes | ($28,210) |
Changes in fair value of cash flow hedge contracts, income taxes | $53,135 |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $40,255 | $107,031 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation, depletion and amortization | 175,497 | 147,418 |
Deferred income tax expense | 15,081 | 57,603 |
(Gain) loss on sale of assets | -138 | 1,285 |
Exploration expense | 162 | 2,040 |
(Gain) loss on derivative instruments | 3,562 | 0 |
Amortization of debt issuance costs | 1,267 | 1,126 |
Stock-based compensation and other | 4,490 | 3,029 |
Changes in assets and liabilities: | ||
Accounts receivable, net | 49,615 | -23,418 |
Income taxes | 8,979 | -16,889 |
Inventories | -61 | 7,076 |
Other current assets | -192 | 1,170 |
Accounts payable and accrued liabilities | -29,629 | -16,089 |
Other assets and liabilities | 1,930 | 39 |
Stock-based compensation tax benefit | -3,437 | -16,043 |
Net cash provided by operating activities | 267,381 | 255,378 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | -395,242 | -338,701 |
Proceeds from sale of assets | 3,081 | 108 |
Restricted cash | 0 | 8,382 |
Investment in equity method investments | -5,078 | -5,937 |
Net cash used in investing activities | -397,239 | -336,148 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Borrowings from debt | 382,000 | 366,000 |
Repayments of debt | -257,000 | -291,000 |
Dividends paid | -8,263 | -8,332 |
Stock-based compensation tax benefit | 3,437 | 16,043 |
Other | 2,678 | 90 |
Net cash provided by financing activities | 122,852 | 82,801 |
Net (decrease) increase in cash and cash equivalents | -7,006 | 2,031 |
Cash and cash equivalents, beginning of period | 20,954 | 23,400 |
Cash and cash equivalents, end of period | $13,948 | $25,431 |
Financial_Statement_Presentati
Financial Statement Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial Statement Presentation | Financial Statement Presentation |
During interim periods, Cabot Oil & Gas Corporation (the Company) follows the same accounting policies disclosed in its Annual Report on Form 10-K for the year ended December 31, 2014 (Form 10-K) filed with the Securities and Exchange Commission (SEC). The interim financial statements should be read in conjunction with the notes to the consolidated financial statements and information presented in the Form 10-K. In management’s opinion, the accompanying interim condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary for a fair statement. The results for any interim period are not necessarily indicative of the expected results for the entire year. | |
Certain reclassifications have been made to prior year statements to conform with the current year presentation. These reclassifications have no impact on previously reported net income. | |
With respect to the unaudited financial information of the Company as of March 31, 2015 and for the three months ended March 31, 2015 and 2014, PricewaterhouseCoopers LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate report dated April 24, 2015 appearing herein states that they did not audit and they do not express an opinion on that unaudited financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their report on the unaudited financial information because that report is not a “report” or a “part” of a registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Act. | |
Recent Accounting Pronouncements | |
In March 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. The amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. The guidance is effective for interim periods and annual period beginning after December 15, 2015; however early adoption is permitted. The Company does not believe the adoption of this guidance will have a material impact on its financial position, results of operations or cash flows. | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as a new Topic, Accounting Standards Codification Topic 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU is effective beginning in fiscal year 2017 and can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. In April 2015, the FASB proposed to delay the effective date one year, beginning in fiscal year 2018. The proposal will be subject to the FASB’s due process requirement, which includes a period for public comments. The Company is currently evaluating the effect that adopting this guidance will have on its financial position, results of operations or cash flows. |
Properties_and_Equipment_Net
Properties and Equipment, Net | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Properties and Equipment, Net | Properties and Equipment, Net | ||||||||
Properties and equipment, net are comprised of the following: | |||||||||
(In thousands) | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
Proved oil and gas properties | $ | 8,291,686 | $ | 7,984,979 | |||||
Unproved oil and gas properties | 486,562 | 492,208 | |||||||
Gathering and pipeline systems | 241,458 | 241,272 | |||||||
Land, building and other equipment | 111,090 | 109,758 | |||||||
9,130,796 | 8,828,217 | ||||||||
Accumulated depreciation, depletion and amortization | (4,071,992 | ) | (3,902,506 | ) | |||||
$ | 5,058,804 | $ | 4,925,711 | ||||||
At March 31, 2015, the Company did not have any projects that had exploratory well costs that were capitalized for a period of greater than one year after drilling. |
Equity_Method_Investments
Equity Method Investments | 3 Months Ended |
Mar. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments |
During the three months ended March 31, 2015 and 2014, the Company made contributions of approximately $3.0 million and $5.8 million, respectively, to Constitution Pipeline Company, LLC and $2.1 million and $0.2 million, respectively, to Meade Pipeline Co LLC. There were no material earnings or losses associated with the Company's equity method investments during the three months ended March 31, 2015 and 2014. | |
For further information regarding the Company’s equity method investments, refer to Note 4 of the Notes to the Consolidated Financial Statements in the Form 10-K. |
Debt_and_Credit_Agreements
Debt and Credit Agreements | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Debt Disclosure [Abstract] | ||||||||||||
Debt and Credit Agreements | Debt and Credit Agreements | |||||||||||
The Company’s debt and credit agreements consisted of the following: | ||||||||||||
(In thousands) | March 31, | December 31, | ||||||||||
2015 | 2014 | |||||||||||
7.33% weighted-average fixed rate notes | $ | 20,000 | $ | 20,000 | ||||||||
6.51% weighted-average fixed rate notes | 425,000 | 425,000 | ||||||||||
9.78% fixed rate notes | 67,000 | 67,000 | ||||||||||
5.58% weighted-average fixed rate notes | 175,000 | 175,000 | ||||||||||
3.65% weighted-average fixed rate notes | 925,000 | 925,000 | ||||||||||
Revolving credit facility | 265,000 | 140,000 | ||||||||||
$ | 1,877,000 | $ | 1,752,000 | |||||||||
At March 31, 2015, the Company had $265.0 million of borrowings outstanding under its revolving credit facility at a weighted-average interest rate of 2.4% and had unused commitments of $1.1 billion. The Company’s weighted-average effective interest rate under the revolving credit facility for the three months ended March 31, 2015 and 2014 was approximately 2.6% and 2.3%, respectively. | ||||||||||||
The Company was in compliance with all restrictive financial covenants for both the revolving credit facility and fixed rate notes as of March 31, 2015. | ||||||||||||
Subsequent Event | ||||||||||||
Effective April 17, 2015, the Company amended its revolving credit facility to extend the maturity date from May 2017 to April 2020 and change the mechanism under which interest rate margins are determined for outstanding borrowings. The revolving credit facility, as amended, provides for an increase in the borrowing base from $3.1 billion to $3.4 billion and an increase in commitments from $1.4 billion to $1.8 billion. The amended credit facility also provides for an accordion feature, which allows the Company to increase the available credit line up to an additional $500 million if one or more of the existing or new banks agree to provide such increased amount. The borrowing base is redetermined annually under the terms of the revolving credit facility on April 1. In addition, either the Company or the banks may request an interim redetermination twice a year or in conjunction with certain acquisitions or sales of oil and gas properties. | ||||||||||||
Interest rates under the amended credit facility are based on Eurodollar (LIBOR) or alternate base rate (ABR) indications, plus a margin. The associated margins are based on the Company's leverage ratio as shown below: | ||||||||||||
Leverage Ratio(1) | ||||||||||||
<1.0x | ≥1.0x and <2.0x | ≥2.0x and <3.0x | ≥3.0x | |||||||||
Eurodollar loans | 1.5 | % | 1.75 | % | 2 | % | 2.25 | % | ||||
ABR loans | 0.5 | % | 0.75 | % | 1 | % | 1.25 | % | ||||
(1) The ratio of debt and other liabilities to Consolidated EBITDAX, as defined in the credit agreement. | ||||||||||||
Upon the Company achieving an investment grade rating from either Moody's or S&P, the associated margins will be adjusted and determined based on the Company's respective credit rating on a prospective basis. | ||||||||||||
The amended credit facility also provides for a commitment fee on the unused available balance at annual rates ranging from 0.30% to 0.50%. | ||||||||||||
The other terms and conditions of the amended facility are generally consistent with the terms and conditions of the revolving credit facility prior to its amendment as disclosed in Note 5 of the Notes to the Consolidated Financial Statements in the Form 10-K. |
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities | ||||||||||||||||||||||
The Company periodically enters into commodity derivatives to manage its exposure to price fluctuations on natural gas and crude oil production. The Company’s credit agreement restricts the ability of the Company to enter into commodity derivatives other than to hedge or mitigate risks to which the Company has actual or projected exposure or as permitted under the Company’s risk management policies and where such derivatives do not subject the Company to material speculative risks. All of the Company’s derivatives are used for risk management purposes and are not held for trading purposes. | |||||||||||||||||||||||
Through March 31, 2014, the Company elected to designate its commodity derivatives as cash flow hedges for accounting purposes. Effective April 1, 2014, the Company elected to discontinue hedge accounting for its commodity derivatives on a prospective basis. As a result of discontinuing hedge accounting, the unrealized loss included in accumulated other comprehensive income (loss) as of April 1, 2014 of $73.4 million ($44.2 million net of tax) was frozen and reclassified into natural gas and crude oil and condensate revenues in the Condensed Consolidated Statement of Operations throughout the remainder of 2014 as the underlying hedged transactions occurred. As of March 31, 2015 and December 31, 2014, there were no gains or losses deferred in accumulated other comprehensive income (loss) associated with the Company's commodity derivatives. | |||||||||||||||||||||||
As of March 31, 2015, the Company had the following outstanding commodity derivatives: | |||||||||||||||||||||||
Collars | Swaps | ||||||||||||||||||||||
Floor | Ceiling | ||||||||||||||||||||||
Type of Contract | Volume | Contract Period | Range | Weighted-Average | Range | Weighted- Average | Weighted- Average | ||||||||||||||||
Natural gas | 53.4 | Bcf | Apr. 2015 - Dec. 2015 | $3.86 - $3.91 | $ | 3.87 | $4.27 - $4.43 | $ | 4.35 | ||||||||||||||
Natural gas | 53.4 | Bcf | Apr. 2015 - Dec. 2015 | $ | 3.92 | ||||||||||||||||||
Natural gas | 31.2 | Bcf | Apr. 2015 - Oct. 2015 | $ | 3.36 | ||||||||||||||||||
In the table above, natural gas prices are stated per Mcf. | |||||||||||||||||||||||
Effect of Derivative Instruments on the Condensed Consolidated Balance Sheet | |||||||||||||||||||||||
Fair Values of Derivative Instruments | |||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||
(In thousands) | Balance Sheet Location | March 31, | December 31, | March 31, | December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
Commodity contracts | Derivative instruments (current assets) | $ | 134,041 | $ | 137,603 | $ | — | $ | — | ||||||||||||||
Offsetting of Derivative Assets and Liabilities in the Condensed Consolidated Balance Sheet | |||||||||||||||||||||||
(In thousands) | March 31, | December 31, | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Derivative Assets | |||||||||||||||||||||||
Gross amounts of recognized assets | $ | 134,041 | $ | 137,603 | |||||||||||||||||||
Gross amounts offset in the statement of financial position | — | — | |||||||||||||||||||||
Net amounts of assets presented in the statement of financial position | 134,041 | 137,603 | |||||||||||||||||||||
Gross amounts of financial instruments not offset in the statement of financial position | — | 2,338 | |||||||||||||||||||||
Net amount | $ | 134,041 | $ | 139,941 | |||||||||||||||||||
Effect of Derivative Instruments on Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||
The amount of gain (loss) recognized in accumulated other comprehensive income (loss) on derivatives (effective portion) is as follows: | |||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
(In thousands) | 2015 | 2014 | |||||||||||||||||||||
Commodity contracts | $ | — | $ | (133,310 | ) | ||||||||||||||||||
The amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (effective portion) is as follows: | |||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
(In thousands) | 2015 | 2014 | |||||||||||||||||||||
Natural gas revenues | $ | — | $ | (70,557 | ) | ||||||||||||||||||
Crude oil and condensate revenues | — | (218 | ) | ||||||||||||||||||||
$ | — | $ | (70,775 | ) | |||||||||||||||||||
Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations | |||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
(In thousands) | 2015 | 2014 | |||||||||||||||||||||
Derivatives Designated as Hedges | |||||||||||||||||||||||
Realized | |||||||||||||||||||||||
Natural gas | $ | — | $ | (70,557 | ) | ||||||||||||||||||
Crude oil and condensate | — | (218 | ) | ||||||||||||||||||||
$ | — | $ | (70,775 | ) | |||||||||||||||||||
Derivatives Not Designated as Hedges | |||||||||||||||||||||||
Realized | |||||||||||||||||||||||
Gain (loss) on derivative instruments | 37,685 | — | |||||||||||||||||||||
Unrealized | |||||||||||||||||||||||
Gain (loss) on derivative instruments | (3,562 | ) | — | ||||||||||||||||||||
$ | 34,123 | $ | — | ||||||||||||||||||||
$ | 34,123 | $ | (70,775 | ) | |||||||||||||||||||
For the three months ended March 31, 2014, there was no ineffectiveness recorded in the Condensed Consolidated Statement of Operations related to derivative instruments designated as cash flow hedges. | |||||||||||||||||||||||
Additional Disclosures about Derivative Instruments and Hedging Activities | |||||||||||||||||||||||
The use of derivative instruments involves the risk that the counterparties will be unable to meet their obligations under the agreements. The Company’s counterparties are primarily commercial banks and financial service institutions that management believes present minimal credit risk and its derivative contracts are with multiple counterparties to minimize its exposure to any individual counterparty. The Company performs both quantitative and qualitative assessments of these counterparties based on their credit ratings and credit default swap rates where applicable. The Company has not incurred any losses related to non-performance risk of its counterparties and does not anticipate any material impact on its financial results due to non-performance by third parties. | |||||||||||||||||||||||
Certain counterparties to the Company’s derivative instruments are also lenders under its revolving credit facility. The Company’s revolving credit facility and derivative instruments contain certain cross default and acceleration provisions that may require immediate payment of its derivative liabilities in certain situations. The Company also has netting arrangements with each of its counterparties that allow it to offset assets and liabilities from separate derivative contracts with that counterparty. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair Value Measurements | Fair Value Measurements | ||||||||||||||||
The Company follows the authoritative guidance for measuring fair value of assets and liabilities in its financial statements. For further information regarding the fair value hierarchy, refer to Note 1 of the Notes to the Consolidated Financial Statements in the Form 10-K. | |||||||||||||||||
Non-Financial Assets and Liabilities | |||||||||||||||||
The Company discloses or recognizes its non-financial assets and liabilities, such as impairments, at fair value on a nonrecurring basis. As none of the Company’s non-financial assets and liabilities were measured at fair value as of March 31, 2015 and 2014, additional disclosures were not required. | |||||||||||||||||
The estimated fair value of the Company’s asset retirement obligations at inception is determined by utilizing the income approach by applying a credit-adjusted risk-free rate, which takes into account the Company’s credit risk, the time value of money, and the current economic state, to the undiscounted expected abandonment cash flows. Given the unobservable nature of the inputs, the measurement of the asset retirement obligations was classified as Level 3 in the fair value hierarchy. | |||||||||||||||||
Financial Assets and Liabilities | |||||||||||||||||
The following fair value hierarchy table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis: | |||||||||||||||||
(In thousands) | Quoted Prices in | Significant Other | Significant | Balance at | |||||||||||||
Active Markets for | Observable Inputs | Unobservable Inputs | 31-Mar-15 | ||||||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||||||
(Level 1) | |||||||||||||||||
Assets | |||||||||||||||||
Deferred compensation plan | $ | 13,322 | $ | — | $ | — | $ | 13,322 | |||||||||
Derivative contracts | — | 50,716 | 83,325 | 134,041 | |||||||||||||
Total assets | $ | 13,322 | $ | 50,716 | $ | 83,325 | $ | 147,363 | |||||||||
Liabilities | |||||||||||||||||
Deferred compensation plan | $ | 29,096 | $ | — | $ | — | $ | 29,096 | |||||||||
Total liabilities | $ | 29,096 | $ | — | $ | — | $ | 29,096 | |||||||||
(In thousands) | Quoted Prices in | Significant Other | Significant | Balance at | |||||||||||||
Active Markets for | Observable Inputs | Unobservable Inputs | 31-Dec-14 | ||||||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||||||
(Level 1) | |||||||||||||||||
Assets | |||||||||||||||||
Deferred compensation plan | $ | 13,115 | $ | — | $ | — | $ | 13,115 | |||||||||
Derivative contracts | — | 51,645 | 85,958 | 137,603 | |||||||||||||
Total assets | $ | 13,115 | $ | 51,645 | $ | 85,958 | $ | 150,718 | |||||||||
Liabilities | |||||||||||||||||
Deferred compensation plan | $ | 28,932 | $ | — | $ | — | $ | 28,932 | |||||||||
Total liabilities | $ | 28,932 | $ | — | $ | — | $ | 28,932 | |||||||||
The Company’s investments associated with its deferred compensation plan consist of mutual funds and deferred shares of the Company’s common stock that are publicly traded and for which market prices are readily available. | |||||||||||||||||
The derivative instruments were measured based on quotes from the Company’s counterparties. Such quotes have been derived using an income approach that considers various inputs including current market and contractual prices for the underlying instruments, quoted forward commodity prices, basis differentials, volatility factors and interest rates, such as a LIBOR curve for a similar length of time as the derivative contract term as applicable. Estimates are verified using relevant NYMEX futures contracts and/or are compared to multiple quotes obtained from counterparties for reasonableness. The determination of the fair values presented above also incorporates a credit adjustment for non-performance risk. The Company measured the non-performance risk of its counterparties by reviewing credit default swap spreads for the various financial institutions with which it has derivative transactions, while non-performance risk of the Company is evaluated using a market credit spread provided by the Company’s bank. | |||||||||||||||||
The most significant unobservable inputs relative to the Company’s Level 3 derivative contracts are basis differentials and volatility factors. An increase (decrease) in these unobservable inputs would result in an increase (decrease) in fair value, respectively. The Company does not have access to the specific assumptions used in its counterparties’ valuation models. Consequently, additional disclosures regarding significant Level 3 unobservable inputs were not provided. | |||||||||||||||||
The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy: | |||||||||||||||||
Three Months Ended | |||||||||||||||||
March 31, | |||||||||||||||||
(In thousands) | 2015 | 2014 | |||||||||||||||
Balance at beginning of period | $ | 85,958 | $ | (3,910 | ) | ||||||||||||
Total gains (losses) (realized or unrealized): | |||||||||||||||||
Realized and unrealized gains (losses) included in earnings | 17,840 | (62,285 | ) | ||||||||||||||
Included in other comprehensive income | — | (56,458 | ) | ||||||||||||||
Settlements | (20,473 | ) | 62,285 | ||||||||||||||
Transfers in and/or out of Level 3 | — | — | |||||||||||||||
Balance at end of period | $ | 83,325 | $ | (60,368 | ) | ||||||||||||
Change in unrealized gains (losses) relating to assets and liabilities still held at the end of the period | $ | (2,633 | ) | $ | — | ||||||||||||
There were no transfers between Level 1 and Level 2 measurements for the three months ended March 31, 2015 and 2014. | |||||||||||||||||
Fair Value of Other Financial Instruments | |||||||||||||||||
The estimated fair value of financial instruments is the amount at which the instrument could be exchanged currently between willing parties. The carrying amount reported in the Condensed Consolidated Balance Sheet for cash and cash equivalents approximates fair value due to the short-term maturities of these instruments. Cash and cash equivalents are classified as Level 1 in the fair value hierarchy. | |||||||||||||||||
The Company uses available market data and valuation methodologies to estimate the fair value of debt. The fair value of debt is the estimated amount the Company would have to pay a third party to assume the debt, including a credit spread for the difference between the issue rate and the period end market rate. The credit spread is the Company’s default or repayment risk. The credit spread (premium or discount) is determined by comparing the Company’s fixed-rate notes and revolving credit facility to new issuances (secured and unsecured) and secondary trades of similar size and credit statistics for both public and private debt. The fair value of all fixed-rate notes and the revolving credit facility is based on interest rates currently available to the Company. The Company’s debt is valued using an income approach and classified as Level 3 in the fair value hierarchy. | |||||||||||||||||
The carrying amounts and fair values of debt are as follows: | |||||||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||
(In thousands) | Carrying | Estimated Fair | Carrying | Estimated Fair | |||||||||||||
Amount | Value | Amount | Value | ||||||||||||||
Debt | $ | 1,877,000 | $ | 1,976,946 | $ | 1,752,000 | $ | 1,850,867 | |||||||||
Asset_Retirement_Obligations
Asset Retirement Obligations | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Asset Retirement Obligation Disclosure [Abstract] | |||||
Asset Retirement Obligations | Asset Retirement Obligations | ||||
Activity related to the Company’s asset retirement obligations is as follows: | |||||
(In thousands) | Three Months Ended | ||||
March 31, 2015 | |||||
Balance at beginning of period | $ | 126,655 | |||
Liabilities incurred | 4,355 | ||||
Liabilities settled | (113 | ) | |||
Accretion expense | 1,644 | ||||
Balance at end of period | $ | 132,541 | |||
As of both March 31, 2015 and December 31, 2014, approximately $2.0 million is included in accrued liabilities in the Condensed Consolidated Balance Sheet, which represents the current portion of the Company’s asset retirement obligations. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies |
Contractual Obligations | |
The Company has various contractual obligations in the normal course of its operations. There have been no material changes to the Company’s contractual obligations described under “Transportation and Gathering Agreements”, “Drilling Rig Commitments” and “Lease Commitments” as disclosed in Note 9 in the Notes to Consolidated Financial Statements included in the Form 10-K. | |
Legal Matters | |
Enexco Litigation | |
In October 2010, the Company was sued in the Texas District Court in Shelby County, Texas by a group of plaintiffs led by Enexco, Inc. The plaintiffs alleged that the Company was negligent and grossly negligent in conducting drilling operations on a natural gas well in Shelby County, Texas in which the plaintiffs were drilling participants in 2009. The plaintiffs alleged that negligence in the Company’s drilling operations damaged not only that well, but also two nearby natural gas wells in which the plaintiffs owned interests. The plaintiffs sought damages for lost reserves of all three wells, costs of operations and associated facilities and attorneys’ fees, as well as exemplary damages based upon claims of gross negligence. The Company denied that its drilling operations were negligent and vigorously disputed both the merits of plaintiffs’ claims and their allegations of damages. | |
In April 2015, the Company and the plaintiffs reached a settlement resulting in a release of all claims with regards to this matter. The settlement amount was not material to the Company’s financial position, results of operations or cash flows. | |
Other | |
The Company is a defendant in various legal proceedings arising in the normal course of business. All known liabilities are accrued when management determines they are probable based on its best estimate of the potential loss. While the outcome and impact of these legal proceedings on the Company cannot be predicted with certainty, management believes that the resolution of these proceedings will not have a material effect on the Company’s financial position, results of operations or cash flows. | |
Contingency Reserves | |
When deemed necessary, the Company establishes reserves for certain legal proceedings. The establishment of a reserve is based on an estimation process that includes the advice of legal counsel and subjective judgment of management. While management believes these reserves to be adequate, it is reasonably possible that the Company could incur additional losses with respect to those matters in which reserves have been established. The Company believes that any such amount above the amounts accrued is not material to the Condensed Consolidated Financial Statements. Future changes in facts and circumstances not currently foreseeable could result in the actual liability exceeding the estimated ranges of loss and amounts accrued. |
Postretirement_Benefits
Postretirement Benefits | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||
Postretirement Benefits | Postretirement Benefits | ||||||||
The components of net periodic benefit costs, included in general and administrative expense in the Condensed Consolidated Statement of Operations, were as follows: | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
(In thousands) | 2015 | 2014 | |||||||
Service cost | $ | 428 | $ | 456 | |||||
Interest cost | 365 | 407 | |||||||
$ | 793 | $ | 863 | ||||||
Stockbased_Compensation
Stock-based Compensation | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||
Stock-based Compensation | Stock-based Compensation | |||||||
General | ||||||||
Stock-based compensation expense during the first three months of 2015 and 2014 was $5.9 million and $3.2 million, respectively, and is included in general and administrative expense in the Condensed Consolidated Statement of Operations. | ||||||||
During the first three months of 2015 and 2014, the Company realized a $3.4 million and $16.0 million tax benefit related to the federal tax deduction in excess of book compensation cost for employee stock-based compensation, respectively. The Company is able to recognize this tax benefit only to the extent it reduces the Company’s income taxes payable. | ||||||||
Refer to Note 13 of the Notes to the Consolidated Financial Statements in the Form 10-K for further description of the various types of stock-based compensation awards and the applicable award terms. | ||||||||
Restricted Stock Awards | ||||||||
During the first three months of 2015, 2,400 restricted stock awards were granted to employees with a grant date per share value of $27.53. The fair value of restricted stock grants is based on the closing stock price on the grant date. The Company used an annual forfeiture rate assumption of 5.0% for purposes of recognizing stock-based compensation expense for restricted stock awards. | ||||||||
Restricted Stock Units | ||||||||
During the first three months of 2015, 45,450 restricted stock units were granted to non-employee directors of the Company with a weighted-average grant date per unit value of $27.76. The fair value of these units is measured based on the closing stock price on grant date and compensation expense is recorded immediately. These units immediately vest and are issued when the director ceases to be a director of the Company. | ||||||||
Performance Share Awards | ||||||||
The performance period for the awards granted in 2015 commenced on January 1, 2015 and ends on December 31, 2017. The Company used an annual forfeiture rate assumption ranging from 0% to 5% for purposes of recognizing stock-based compensation expense for its performance share awards. | ||||||||
Performance Share Awards Based on Internal Performance Metrics | ||||||||
The fair value of performance award grants based on internal performance metrics is based on the closing stock price on the grant date and represents the right to receive up to 100% of the award in shares of common stock. | ||||||||
Employee Performance Share Awards. During the first three months of 2015, 349,780 Employee Performance Share Awards were granted at a grant date per share value of $27.71. The performance metrics are set by the Company’s compensation committee and are based on the Company’s average production, average finding costs and average reserve replacement over a three-year performance period. Based on the Company’s probability assessment at March 31, 2015, it is considered probable that the criteria for these awards will be met. | ||||||||
Hybrid Performance Share Awards. During the first three months of 2015, 194,947 Hybrid Performance Share Awards were granted at a grant date per share value of $27.71. The 2015 awards vest 25% on each of the first and second anniversary dates and 50% on the third anniversary, provided that the Company has $100 million or more of operating cash flow for the year preceding the vesting date, as set by the Company’s compensation committee. If the Company does not meet the performance metric for the applicable period, then the portion of the performance shares that would have been issued on that anniversary date will be forfeited. Based on the Company’s probability assessment at March 31, 2015, it is considered probable that the criteria for these awards will be met. | ||||||||
Performance Share Awards Based on Market Conditions | ||||||||
These awards have both an equity and liability component, with the right to receive up to the first 100% of the award in shares of common stock and the right to receive up to an additional 100% of the value of the award in excess of the equity component in cash. The equity portion of these awards is valued on the grant date and is not marked to market, while the liability portion of the awards is valued as of the end of each reporting period on a mark-to-market basis. The Company calculates the fair value of the equity and liability portions of the awards using a Monte Carlo simulation model. | ||||||||
TSR Performance Share Awards. During the first three months of 2015, 292,421 TSR Performance Share Awards were granted and are earned, or not earned, based on the comparative performance of the Company’s common stock measured against a predetermined group of companies in the Company’s peer group over a three-year performance period. | ||||||||
The following assumptions were used to determine the grant date fair value of the equity component (February 19, 2015) and the period-end fair value of the liability component of the TSR Performance Share Awards: | ||||||||
Grant Date | 31-Mar-15 | |||||||
Fair value per performance share award | $ | 19.29 | $10.37 - $14.21 | |||||
Assumptions: | ||||||||
Stock price volatility | 32.3 | % | 29.3% - 30.3% | |||||
Risk free rate of return | 1 | % | 0.2% - 0.8% | |||||
Expected dividend yield | 0.3 | % | 0.3 | % | ||||
Supplemental Employee Incentive Plan | ||||||||
The Company recognized stock-based compensation (benefit) expense of $(0.1) million and $1.5 million for the three months ended March 31, 2015 and 2014, respectively, related to the Company’s Supplemental Employee Incentive Plan, which is included in general and administrative expense in the Condensed Consolidated Statement of Operations. Refer to Note 13 of the Notes to the Consolidated Financial Statements in the Form 10-K for additional information on the provisions of the Plan. | ||||||||
The following assumptions were used to determine the period-end fair value of the Supplemental Employee Incentive Plan IV liability using a Monte Carlo simulation model: | ||||||||
March 31, | ||||||||
2015 | ||||||||
Stock price volatility | 31.3 | % | ||||||
Risk free rate of return | 0.7 | % | ||||||
Annual salary increase rate | 4 | % | ||||||
Annual turnover rate | 4.6 | % |
Earnings_per_Common_Share
Earnings per Common Share | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Earnings Per Share [Abstract] | |||||||
Earnings per Common Share | Earnings per Common Share | ||||||
Basic earnings per share (EPS) is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted EPS is similarly calculated except that the common shares outstanding for the period is increased using the treasury stock method to reflect the potential dilution that could occur if outstanding stock appreciation rights were exercised and stock awards were vested at the end of the applicable period. | |||||||
The following is a calculation of basic and diluted weighted-average shares outstanding: | |||||||
Three Months Ended | |||||||
March 31, | |||||||
(In thousands) | 2015 | 2014 | |||||
Weighted-average shares - basic | 413,344 | 416,900 | |||||
Dilution effect of stock appreciation rights and stock awards at end of period | 1,427 | 1,613 | |||||
Weighted-average shares - diluted | 414,771 | 418,513 | |||||
Weighted-average stock awards and shares excluded from diluted EPS due to the anti-dilutive effect | 401 | 272 | |||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Equity [Abstract] | |||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | ||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) into the Condensed Consolidated Statement of Operations were as follows: | |||||||||||
Three Months Ended | Affected Line Item in the Condensed | ||||||||||
March 31, | |||||||||||
(In thousands) | 2015 | 2014 | Consolidated Statement of Operations | ||||||||
Gain (Loss) on Cash Flow Hedges | |||||||||||
Commodity contracts | $ | — | $ | (70,557 | ) | Natural gas revenues | |||||
Commodity contracts | — | (218 | ) | Crude oil and condensate revenues | |||||||
— | (70,775 | ) | Total before tax | ||||||||
— | 28,210 | Tax benefit (expense) | |||||||||
Total reclassifications for the period | $ | — | $ | (42,565 | ) | Net of tax | |||||
ADDITIONAL_BALANCE_SHEET_INFOR
ADDITIONAL BALANCE SHEET INFORMATION | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||
ADDITIONAL BALANCE SHEET INFORMATION | ADDITIONAL BALANCE SHEET INFORMATION | ||||||||
Certain balance sheet amounts are comprised of the following: | |||||||||
(In thousands) | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
Accounts receivable, net | |||||||||
Trade accounts | $ | 182,863 | $ | 227,835 | |||||
Joint interest accounts | 2,016 | 2,245 | |||||||
Income taxes receivable | 2,441 | 3,612 | |||||||
Other accounts | (614 | ) | 6,515 | ||||||
186,706 | 240,207 | ||||||||
Allowance for doubtful accounts | (1,425 | ) | (1,198 | ) | |||||
$ | 185,281 | $ | 239,009 | ||||||
Inventories | |||||||||
Natural gas in storage | $ | 2,394 | $ | 3,281 | |||||
Tubular goods and well equipment | 11,535 | 10,675 | |||||||
Other accounts | 158 | 70 | |||||||
$ | 14,087 | $ | 14,026 | ||||||
Other assets | |||||||||
Deferred compensation plan | $ | 13,322 | $ | 13,115 | |||||
Debt issuance cost | 16,082 | 17,349 | |||||||
Other accounts | 184 | 65 | |||||||
$ | 29,588 | $ | 30,529 | ||||||
Accounts payable | |||||||||
Trade accounts | $ | 68,891 | $ | 54,949 | |||||
Natural gas purchases | 2,164 | 2,407 | |||||||
Royalty and other owners | 93,316 | 97,298 | |||||||
Accrued capital costs | 130,782 | 222,426 | |||||||
Taxes other than income | 20,464 | 16,806 | |||||||
Drilling advances | 87 | 88 | |||||||
Other accounts | 5,511 | 6,102 | |||||||
$ | 321,215 | $ | 400,076 | ||||||
Accrued liabilities | |||||||||
Employee benefits | $ | 10,819 | $ | 22,815 | |||||
Taxes other than income | 7,455 | 7,128 | |||||||
Interest payable | 13,755 | 30,677 | |||||||
Other accounts | 2,550 | 3,049 | |||||||
$ | 34,579 | $ | 63,669 | ||||||
Other liabilities | |||||||||
Deferred compensation plan | $ | 29,096 | $ | 28,932 | |||||
Other accounts | 9,312 | 10,675 | |||||||
$ | 38,408 | $ | 39,607 | ||||||
Financial_Statement_Presentati1
Financial Statement Presentation (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
In March 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. The amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. The guidance is effective for interim periods and annual period beginning after December 15, 2015; however early adoption is permitted. The Company does not believe the adoption of this guidance will have a material impact on its financial position, results of operations or cash flows. | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as a new Topic, Accounting Standards Codification Topic 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU is effective beginning in fiscal year 2017 and can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. In April 2015, the FASB proposed to delay the effective date one year, beginning in fiscal year 2018. The proposal will be subject to the FASB’s due process requirement, which includes a period for public comments. The Company is currently evaluating the effect that adopting this guidance will have on its financial position, results of operations or cash flows. |
Properties_and_Equipment_Net_T
Properties and Equipment, Net (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Schedule of properties and equipment, net | Properties and equipment, net are comprised of the following: | ||||||||
(In thousands) | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
Proved oil and gas properties | $ | 8,291,686 | $ | 7,984,979 | |||||
Unproved oil and gas properties | 486,562 | 492,208 | |||||||
Gathering and pipeline systems | 241,458 | 241,272 | |||||||
Land, building and other equipment | 111,090 | 109,758 | |||||||
9,130,796 | 8,828,217 | ||||||||
Accumulated depreciation, depletion and amortization | (4,071,992 | ) | (3,902,506 | ) | |||||
$ | 5,058,804 | $ | 4,925,711 | ||||||
Debt_and_Credit_Agreements_Tab
Debt and Credit Agreements (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Debt Disclosure [Abstract] | ||||||||||||
Debt and credit agreement components | The Company’s debt and credit agreements consisted of the following: | |||||||||||
(In thousands) | March 31, | December 31, | ||||||||||
2015 | 2014 | |||||||||||
7.33% weighted-average fixed rate notes | $ | 20,000 | $ | 20,000 | ||||||||
6.51% weighted-average fixed rate notes | 425,000 | 425,000 | ||||||||||
9.78% fixed rate notes | 67,000 | 67,000 | ||||||||||
5.58% weighted-average fixed rate notes | 175,000 | 175,000 | ||||||||||
3.65% weighted-average fixed rate notes | 925,000 | 925,000 | ||||||||||
Revolving credit facility | 265,000 | 140,000 | ||||||||||
$ | 1,877,000 | $ | 1,752,000 | |||||||||
Changes in basis spread on variable rate based on changes in leverage ratio | Interest rates under the amended credit facility are based on Eurodollar (LIBOR) or alternate base rate (ABR) indications, plus a margin. The associated margins are based on the Company's leverage ratio as shown below: | |||||||||||
Leverage Ratio(1) | ||||||||||||
<1.0x | ≥1.0x and <2.0x | ≥2.0x and <3.0x | ≥3.0x | |||||||||
Eurodollar loans | 1.5 | % | 1.75 | % | 2 | % | 2.25 | % | ||||
ABR loans | 0.5 | % | 0.75 | % | 1 | % | 1.25 | % | ||||
(1) The ratio of debt and other liabilities to Consolidated EBITDAX, as defined in the credit agreement. |
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||
Outstanding commodity derivatives | As of March 31, 2015, the Company had the following outstanding commodity derivatives: | ||||||||||||||||||||||
Collars | Swaps | ||||||||||||||||||||||
Floor | Ceiling | ||||||||||||||||||||||
Type of Contract | Volume | Contract Period | Range | Weighted-Average | Range | Weighted- Average | Weighted- Average | ||||||||||||||||
Natural gas | 53.4 | Bcf | Apr. 2015 - Dec. 2015 | $3.86 - $3.91 | $ | 3.87 | $4.27 - $4.43 | $ | 4.35 | ||||||||||||||
Natural gas | 53.4 | Bcf | Apr. 2015 - Dec. 2015 | $ | 3.92 | ||||||||||||||||||
Natural gas | 31.2 | Bcf | Apr. 2015 - Oct. 2015 | $ | 3.36 | ||||||||||||||||||
Effect of derivative instruments on the condensed consolidated balance sheet | Effect of Derivative Instruments on the Condensed Consolidated Balance Sheet | ||||||||||||||||||||||
Fair Values of Derivative Instruments | |||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||
(In thousands) | Balance Sheet Location | March 31, | December 31, | March 31, | December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
Commodity contracts | Derivative instruments (current assets) | $ | 134,041 | $ | 137,603 | $ | — | $ | — | ||||||||||||||
Schedule of offsetting of derivative assets and liabilities in the condensed consolidated balance sheet | Offsetting of Derivative Assets and Liabilities in the Condensed Consolidated Balance Sheet | ||||||||||||||||||||||
(In thousands) | March 31, | December 31, | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||
Derivative Assets | |||||||||||||||||||||||
Gross amounts of recognized assets | $ | 134,041 | $ | 137,603 | |||||||||||||||||||
Gross amounts offset in the statement of financial position | — | — | |||||||||||||||||||||
Net amounts of assets presented in the statement of financial position | 134,041 | 137,603 | |||||||||||||||||||||
Gross amounts of financial instruments not offset in the statement of financial position | — | 2,338 | |||||||||||||||||||||
Net amount | $ | 134,041 | $ | 139,941 | |||||||||||||||||||
Amount of gain (loss) recognized in accumulated other comprehensive income (loss) on derivatives | The amount of gain (loss) recognized in accumulated other comprehensive income (loss) on derivatives (effective portion) is as follows: | ||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
(In thousands) | 2015 | 2014 | |||||||||||||||||||||
Commodity contracts | $ | — | $ | (133,310 | ) | ||||||||||||||||||
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) | The amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (effective portion) is as follows: | ||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
(In thousands) | 2015 | 2014 | |||||||||||||||||||||
Natural gas revenues | $ | — | $ | (70,557 | ) | ||||||||||||||||||
Crude oil and condensate revenues | — | (218 | ) | ||||||||||||||||||||
$ | — | $ | (70,775 | ) | |||||||||||||||||||
Effect of derivatives not designated as hedging instruments on the condensed consolidated statement of operations | Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations | ||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
(In thousands) | 2015 | 2014 | |||||||||||||||||||||
Derivatives Designated as Hedges | |||||||||||||||||||||||
Realized | |||||||||||||||||||||||
Natural gas | $ | — | $ | (70,557 | ) | ||||||||||||||||||
Crude oil and condensate | — | (218 | ) | ||||||||||||||||||||
$ | — | $ | (70,775 | ) | |||||||||||||||||||
Derivatives Not Designated as Hedges | |||||||||||||||||||||||
Realized | |||||||||||||||||||||||
Gain (loss) on derivative instruments | 37,685 | — | |||||||||||||||||||||
Unrealized | |||||||||||||||||||||||
Gain (loss) on derivative instruments | (3,562 | ) | — | ||||||||||||||||||||
$ | 34,123 | $ | — | ||||||||||||||||||||
$ | 34,123 | $ | (70,775 | ) | |||||||||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis | The following fair value hierarchy table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis: | ||||||||||||||||
(In thousands) | Quoted Prices in | Significant Other | Significant | Balance at | |||||||||||||
Active Markets for | Observable Inputs | Unobservable Inputs | 31-Mar-15 | ||||||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||||||
(Level 1) | |||||||||||||||||
Assets | |||||||||||||||||
Deferred compensation plan | $ | 13,322 | $ | — | $ | — | $ | 13,322 | |||||||||
Derivative contracts | — | 50,716 | 83,325 | 134,041 | |||||||||||||
Total assets | $ | 13,322 | $ | 50,716 | $ | 83,325 | $ | 147,363 | |||||||||
Liabilities | |||||||||||||||||
Deferred compensation plan | $ | 29,096 | $ | — | $ | — | $ | 29,096 | |||||||||
Total liabilities | $ | 29,096 | $ | — | $ | — | $ | 29,096 | |||||||||
(In thousands) | Quoted Prices in | Significant Other | Significant | Balance at | |||||||||||||
Active Markets for | Observable Inputs | Unobservable Inputs | 31-Dec-14 | ||||||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||||||
(Level 1) | |||||||||||||||||
Assets | |||||||||||||||||
Deferred compensation plan | $ | 13,115 | $ | — | $ | — | $ | 13,115 | |||||||||
Derivative contracts | — | 51,645 | 85,958 | 137,603 | |||||||||||||
Total assets | $ | 13,115 | $ | 51,645 | $ | 85,958 | $ | 150,718 | |||||||||
Liabilities | |||||||||||||||||
Deferred compensation plan | $ | 28,932 | $ | — | $ | — | $ | 28,932 | |||||||||
Total liabilities | $ | 28,932 | $ | — | $ | — | $ | 28,932 | |||||||||
Fair value of net financial assets and liabilities classified as level 3 | The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy: | ||||||||||||||||
Three Months Ended | |||||||||||||||||
March 31, | |||||||||||||||||
(In thousands) | 2015 | 2014 | |||||||||||||||
Balance at beginning of period | $ | 85,958 | $ | (3,910 | ) | ||||||||||||
Total gains (losses) (realized or unrealized): | |||||||||||||||||
Realized and unrealized gains (losses) included in earnings | 17,840 | (62,285 | ) | ||||||||||||||
Included in other comprehensive income | — | (56,458 | ) | ||||||||||||||
Settlements | (20,473 | ) | 62,285 | ||||||||||||||
Transfers in and/or out of Level 3 | — | — | |||||||||||||||
Balance at end of period | $ | 83,325 | $ | (60,368 | ) | ||||||||||||
Change in unrealized gains (losses) relating to assets and liabilities still held at the end of the period | $ | (2,633 | ) | $ | — | ||||||||||||
Carrying amounts and fair values of long-term debt | The carrying amounts and fair values of debt are as follows: | ||||||||||||||||
31-Mar-15 | 31-Dec-14 | ||||||||||||||||
(In thousands) | Carrying | Estimated Fair | Carrying | Estimated Fair | |||||||||||||
Amount | Value | Amount | Value | ||||||||||||||
Debt | $ | 1,877,000 | $ | 1,976,946 | $ | 1,752,000 | $ | 1,850,867 | |||||||||
Asset_Retirement_Obligations_T
Asset Retirement Obligations (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Asset Retirement Obligation Disclosure [Abstract] | |||||
Activity Related to Asset Retirement Obligations | Activity related to the Company’s asset retirement obligations is as follows: | ||||
(In thousands) | Three Months Ended | ||||
March 31, 2015 | |||||
Balance at beginning of period | $ | 126,655 | |||
Liabilities incurred | 4,355 | ||||
Liabilities settled | (113 | ) | |||
Accretion expense | 1,644 | ||||
Balance at end of period | $ | 132,541 | |||
Postretirement_Benefits_Tables
Postretirement Benefits (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||
Components of net periodic benefit costs | The components of net periodic benefit costs, included in general and administrative expense in the Condensed Consolidated Statement of Operations, were as follows: | ||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
(In thousands) | 2015 | 2014 | |||||||
Service cost | $ | 428 | $ | 456 | |||||
Interest cost | 365 | 407 | |||||||
$ | 793 | $ | 863 | ||||||
Stockbased_Compensation_Tables
Stock-based Compensation (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Supplemental Employee Incentive Plan IV | ||||||||
Stock-Based Compensation arrangements | ||||||||
Schedule of Value per Share and Assumptions Used | The following assumptions were used to determine the period-end fair value of the Supplemental Employee Incentive Plan IV liability using a Monte Carlo simulation model: | |||||||
March 31, | ||||||||
2015 | ||||||||
Stock price volatility | 31.3 | % | ||||||
Risk free rate of return | 0.7 | % | ||||||
Annual salary increase rate | 4 | % | ||||||
Annual turnover rate | 4.6 | % | ||||||
TSR Performance Share Awards | ||||||||
Stock-Based Compensation arrangements | ||||||||
Schedule of Value per Share and Assumptions Used | The following assumptions were used to determine the grant date fair value of the equity component (February 19, 2015) and the period-end fair value of the liability component of the TSR Performance Share Awards: | |||||||
Grant Date | 31-Mar-15 | |||||||
Fair value per performance share award | $ | 19.29 | $10.37 - $14.21 | |||||
Assumptions: | ||||||||
Stock price volatility | 32.3 | % | 29.3% - 30.3% | |||||
Risk free rate of return | 1 | % | 0.2% - 0.8% | |||||
Expected dividend yield | 0.3 | % | 0.3 | % |
Earnings_per_Common_Share_Tabl
Earnings per Common Share (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Earnings Per Share [Abstract] | |||||||
Calculation of basic and diluted weighted-average shares outstanding | |||||||
Three Months Ended | |||||||
March 31, | |||||||
(In thousands) | 2015 | 2014 | |||||
Weighted-average shares - basic | 413,344 | 416,900 | |||||
Dilution effect of stock appreciation rights and stock awards at end of period | 1,427 | 1,613 | |||||
Weighted-average shares - diluted | 414,771 | 418,513 | |||||
Weighted-average stock awards and shares excluded from diluted EPS due to the anti-dilutive effect | 401 | 272 | |||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Equity [Abstract] | |||||||||||
Schedule of amount reclassified from accumulated other comprehensive income (loss) into the Condensed Consolidated Statement of Operations | Amounts reclassified from accumulated other comprehensive income (loss) into the Condensed Consolidated Statement of Operations were as follows: | ||||||||||
Three Months Ended | Affected Line Item in the Condensed | ||||||||||
March 31, | |||||||||||
(In thousands) | 2015 | 2014 | Consolidated Statement of Operations | ||||||||
Gain (Loss) on Cash Flow Hedges | |||||||||||
Commodity contracts | $ | — | $ | (70,557 | ) | Natural gas revenues | |||||
Commodity contracts | — | (218 | ) | Crude oil and condensate revenues | |||||||
— | (70,775 | ) | Total before tax | ||||||||
— | 28,210 | Tax benefit (expense) | |||||||||
Total reclassifications for the period | $ | — | $ | (42,565 | ) | Net of tax | |||||
ADDITIONAL_BALANCE_SHEET_INFOR1
ADDITIONAL BALANCE SHEET INFORMATION (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||
Additional Balance Sheet Information | Certain balance sheet amounts are comprised of the following: | ||||||||
(In thousands) | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
Accounts receivable, net | |||||||||
Trade accounts | $ | 182,863 | $ | 227,835 | |||||
Joint interest accounts | 2,016 | 2,245 | |||||||
Income taxes receivable | 2,441 | 3,612 | |||||||
Other accounts | (614 | ) | 6,515 | ||||||
186,706 | 240,207 | ||||||||
Allowance for doubtful accounts | (1,425 | ) | (1,198 | ) | |||||
$ | 185,281 | $ | 239,009 | ||||||
Inventories | |||||||||
Natural gas in storage | $ | 2,394 | $ | 3,281 | |||||
Tubular goods and well equipment | 11,535 | 10,675 | |||||||
Other accounts | 158 | 70 | |||||||
$ | 14,087 | $ | 14,026 | ||||||
Other assets | |||||||||
Deferred compensation plan | $ | 13,322 | $ | 13,115 | |||||
Debt issuance cost | 16,082 | 17,349 | |||||||
Other accounts | 184 | 65 | |||||||
$ | 29,588 | $ | 30,529 | ||||||
Accounts payable | |||||||||
Trade accounts | $ | 68,891 | $ | 54,949 | |||||
Natural gas purchases | 2,164 | 2,407 | |||||||
Royalty and other owners | 93,316 | 97,298 | |||||||
Accrued capital costs | 130,782 | 222,426 | |||||||
Taxes other than income | 20,464 | 16,806 | |||||||
Drilling advances | 87 | 88 | |||||||
Other accounts | 5,511 | 6,102 | |||||||
$ | 321,215 | $ | 400,076 | ||||||
Accrued liabilities | |||||||||
Employee benefits | $ | 10,819 | $ | 22,815 | |||||
Taxes other than income | 7,455 | 7,128 | |||||||
Interest payable | 13,755 | 30,677 | |||||||
Other accounts | 2,550 | 3,049 | |||||||
$ | 34,579 | $ | 63,669 | ||||||
Other liabilities | |||||||||
Deferred compensation plan | $ | 29,096 | $ | 28,932 | |||||
Other accounts | 9,312 | 10,675 | |||||||
$ | 38,408 | $ | 39,607 | ||||||
Properties_and_Equipment_Net_D
Properties and Equipment, Net (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Abstract] | ||
Proved oil and gas properties | $8,291,686 | $7,984,979 |
Unproved oil and gas properties | 486,562 | 492,208 |
Gathering and pipeline systems | 241,458 | 241,272 |
Land, building and other equipment | 111,090 | 109,758 |
Properties and equipment, gross, total | 9,130,796 | 8,828,217 |
Accumulated depreciation, depletion and amortization | -4,071,992 | -3,902,506 |
Properties and equipment, net | $5,058,804 | $4,925,711 |
Properties_and_Equipment_Net_D1
Properties and Equipment, Net (Details 2) | 3 Months Ended |
Mar. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Minimum term of capitalization of exploratory well costs | 1 year |
Equity_Method_Investments_Deta
Equity Method Investments (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Constitution Pipeline Company, LLC | ||
Equity Method Investment | ||
Contributions made to equity method investments | $3 | $5.80 |
Meade Pipeline Co LLC | ||
Equity Method Investment | ||
Contributions made to equity method investments | $2.10 | $0.20 |
Debt_and_Credit_Agreements_Det
Debt and Credit Agreements (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ||
Long-term debt | $1,877,000 | $1,752,000 |
7.33% weighted-average fixed rate notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | 20,000 | 20,000 |
6.51% weighted-average fixed rate notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | 425,000 | 425,000 |
9.78% fixed rate notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | 67,000 | 67,000 |
5.58% weighted-average fixed rate notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | 175,000 | 175,000 |
3.65% weighted-average fixed rate notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | 925,000 | 925,000 |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $265,000 | $140,000 |
Debit_and_Credit_Agreements_Ad
Debit and Credit Agreements (Additional Information) (Details) | Mar. 31, 2015 | Dec. 31, 2014 |
7.33% weighted-average fixed rate notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, weighted average interest rate | 7.33% | 7.33% |
6.51% weighted-average fixed rate notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, weighted average interest rate | 6.51% | 6.51% |
9.78% fixed rate notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate, stated percentage | 9.78% | 9.78% |
5.58% weighted-average fixed rate notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, weighted average interest rate | 5.58% | 5.58% |
3.65% weighted-average fixed rate notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, weighted average interest rate | 3.65% | 3.65% |
Debt_and_Credit_Agreements_Det1
Debt and Credit Agreements (Details 2) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Long-term debt | $1,877,000,000 | $1,752,000,000 | |
Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Long-term debt | 265,000,000 | 140,000,000 | |
Long-term debt, weighted average interest rate | 2.40% | ||
Availability under the credit facility | $1,100,000,000 | ||
Weighted-average effective interest rate | 2.60% | 2.30% |
Debt_and_Credit_Agreements_Det2
Debt and Credit Agreements (Details 3) (Revolving credit facility, USD $) | 0 Months Ended | ||
Apr. 17, 2015 | Mar. 31, 2015 | Apr. 16, 2015 | |
Debt Instrument [Line Items] | |||
Availability under the credit facility | $1,100,000,000 | ||
Subsequent event | |||
Debt Instrument [Line Items] | |||
Borrowing base | 3,400,000,000 | 3,100,000,000 | |
Availability under the credit facility | 1,800,000,000 | 1,400,000,000 | |
Subsequent event | Accordion Feature, Amended Facility | |||
Debt Instrument [Line Items] | |||
Borrowing base | 500,000,000 | ||
Minimum | Subsequent event | |||
Debt Instrument [Line Items] | |||
Commitment fee on the unused available balance | 0.30% | ||
Maximum | Subsequent event | |||
Debt Instrument [Line Items] | |||
Commitment fee on the unused available balance | 0.50% | ||
Eurodollar LIBOR | Subsequent event | |||
Debt Instrument [Line Items] | |||
Description of variable rate basis | Eurodollar (LIBOR) | ||
Alternate base rate (ABR) | Subsequent event | |||
Debt Instrument [Line Items] | |||
Description of variable rate basis | alternate base rate (ABR) | ||
Debt Instrument Leverage Ratio Less than 1.0x | Eurodollar LIBOR | Subsequent event | |||
Interest Rates Under Amended Credit Facility | |||
Basis spread on variable rate | 1.50% | ||
Debt Instrument Leverage Ratio Less than 1.0x | Alternate base rate (ABR) | Subsequent event | |||
Interest Rates Under Amended Credit Facility | |||
Basis spread on variable rate | 0.50% | ||
Debt Instrument Leverage Ratio Greater than or Equal to 1.0x but Less than 2.0x | Eurodollar LIBOR | Subsequent event | |||
Interest Rates Under Amended Credit Facility | |||
Basis spread on variable rate | 1.75% | ||
Debt Instrument Leverage Ratio Greater than or Equal to 1.0x but Less than 2.0x | Alternate base rate (ABR) | Subsequent event | |||
Interest Rates Under Amended Credit Facility | |||
Basis spread on variable rate | 0.75% | ||
Debt Instrument Leverage Ratio Greater than or Equal to 2.0x but Less 3.0x | Eurodollar LIBOR | Subsequent event | |||
Interest Rates Under Amended Credit Facility | |||
Basis spread on variable rate | 2.00% | ||
Debt Instrument Leverage Ratio Greater than or Equal to 2.0x but Less 3.0x | Alternate base rate (ABR) | Subsequent event | |||
Interest Rates Under Amended Credit Facility | |||
Basis spread on variable rate | 1.00% | ||
Debt Instrument Leverage Ratio Greater than or Equal to 3.0x | Eurodollar LIBOR | Subsequent event | |||
Interest Rates Under Amended Credit Facility | |||
Basis spread on variable rate | 2.25% | ||
Debt Instrument Leverage Ratio Greater than or Equal to 3.0x | Alternate base rate (ABR) | Subsequent event | |||
Interest Rates Under Amended Credit Facility | |||
Basis spread on variable rate | 1.25% |
Derivative_Instruments_and_Hed2
Derivative Instruments and Hedging Activities (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Apr. 01, 2014 |
Derivative disclosures | |||
Unrealized losses included in accumulated other comprehensive income and will reclassified into natural gas and crude oil revenues , pre-tax | $73,400,000 | ||
Unrealized losses included in accumulated other comprehensive income and will reclassified into natural gas and crude oil revenues , net of tax | $0 | $0 | $44,200,000 |
Derivatives Designated as Hedges | Natural Gas Collars with contract period of April 2015 - December 2015 | |||
Derivative disclosures | |||
Volume | 53,400 | ||
Derivatives Designated as Hedges | Natural Gas Collars with contract period of April 2015 - December 2015 | Minimum | |||
Derivative disclosures | |||
Collar Floor Price | 3.86 | ||
Collar Ceiling Price | 4.27 | ||
Derivatives Designated as Hedges | Natural Gas Collars with contract period of April 2015 - December 2015 | Maximum | |||
Derivative disclosures | |||
Collar Floor Price | 3.91 | ||
Collar Ceiling Price | 4.43 | ||
Derivatives Designated as Hedges | Natural Gas Collars with contract period of April 2015 - December 2015 | Weighted Average | |||
Derivative disclosures | |||
Collar Floor Price | 3.87 | ||
Collar Ceiling Price | 4.35 | ||
Derivatives Designated as Hedges | Natural Gas Swaps with contract period of April 2015 - December 2015 | |||
Derivative disclosures | |||
Volume | 53,400 | ||
Derivatives Designated as Hedges | Natural Gas Swaps with contract period of April 2015 - December 2015 | Weighted Average | |||
Derivative disclosures | |||
Swaps Weighted Average | 3.92 | ||
Derivatives Designated as Hedges | Natural Gas Swaps with contract period of April 2015 - October 2015 | |||
Derivative disclosures | |||
Volume | 31,200 | ||
Derivatives Designated as Hedges | Natural Gas Swaps with contract period of April 2015 - October 2015 | Weighted Average | |||
Derivative disclosures | |||
Swaps Weighted Average | 3.36 |
Derivative_Instruments_and_Hed3
Derivative Instruments and Hedging Activities (Details 2) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Effect of derivative instruments on the Consolidated Balance Sheet | ||
Fair values of derivative instruments | $134,041 | $137,603 |
Derivatives Not Designated as Hedges | Commodity contracts | Derivative instruments (current assets) | ||
Effect of derivative instruments on the Consolidated Balance Sheet | ||
Fair values of derivative instruments | $134,041 | $137,603 |
Derivative_Instruments_and_Hed4
Derivative Instruments and Hedging Activities (Details 3) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Derivative Assets | ||
Gross amounts of recognized assets | $134,041 | $137,603 |
Gross amounts offset in the statement of financial position | 0 | 0 |
Net amounts of assets presented in the statement of financial position | 134,041 | 137,603 |
Gross amounts of financial instruments not offset in the statement of financial position | 0 | 2,338 |
Net amount | $134,041 | $139,941 |
Derivative_Instruments_and_Hed5
Derivative Instruments and Hedging Activities (Details 4) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Derivative instruments and hedging activities | ||
Ineffectiveness related to derivative instruments | $0 | |
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (effective portion) | 0 | -70,775,000 |
Unrealized gain (loss) on derivative instruments | -3,562,000 | 0 |
Gain (loss) on derivative instruments | 34,123,000 | 0 |
Total | 34,123,000 | -70,775,000 |
Natural Gas Revenues | ||
Derivative instruments and hedging activities | ||
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (effective portion) | 0 | -70,557,000 |
Crude Oil and Condensate Revenues | ||
Derivative instruments and hedging activities | ||
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income (effective portion) | 0 | -218,000 |
Commodity contracts | ||
Derivative instruments and hedging activities | ||
Amount of gain (loss) recognized in other comprehensive income (loss) on derivative (effective portion) | 0 | -133,310,000 |
Derivatives Designated as Hedges | ||
Derivative instruments and hedging activities | ||
Realized gain (loss) on derivative instruments | 0 | -70,775,000 |
Derivatives Designated as Hedges | Natural Gas Revenues | ||
Derivative instruments and hedging activities | ||
Realized gain (loss) on derivative instruments | 0 | -70,557,000 |
Derivatives Designated as Hedges | Crude Oil and Condensate Revenues | ||
Derivative instruments and hedging activities | ||
Realized gain (loss) on derivative instruments | 0 | -218,000 |
Derivatives Not Designated as Hedges | ||
Derivative instruments and hedging activities | ||
Unrealized gain (loss) on derivative instruments | -3,562,000 | 0 |
Derivatives Not Designated as Hedges | Gain (loss) on derivative instruments | ||
Derivative instruments and hedging activities | ||
Realized gain (loss) on derivative instruments | $37,685,000 | $0 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Impaired_Asset_And_Liability | Impaired_Asset_And_Liability | ||
Assets | |||
Deferred compensation plan | $13,322 | $13,115 | |
Derivative contracts | 134,041 | 137,603 | |
Total assets | 147,363 | 150,718 | |
Liabilities | |||
Deferred compensation plan | 29,096 | 28,932 | |
Total liabilities | 29,096 | 28,932 | |
Number of non-financial assets and liabilities impaired | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring basis | |||
Assets | |||
Deferred compensation plan | 13,322 | 13,115 | |
Derivative contracts | 0 | 0 | |
Total assets | 13,322 | 13,115 | |
Liabilities | |||
Deferred compensation plan | 29,096 | 28,932 | |
Total liabilities | 29,096 | 28,932 | |
Significant Other Observable Inputs (Level 2) | Recurring basis | |||
Assets | |||
Deferred compensation plan | 0 | 0 | |
Derivative contracts | 50,716 | 51,645 | |
Total assets | 50,716 | 51,645 | |
Liabilities | |||
Deferred compensation plan | 0 | 0 | |
Total liabilities | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Recurring basis | |||
Assets | |||
Deferred compensation plan | 0 | 0 | |
Derivative contracts | 83,325 | 85,958 | |
Total assets | 83,325 | 85,958 | |
Liabilities | |||
Deferred compensation plan | 0 | 0 | |
Total liabilities | $0 | $0 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy | ||
Balance at beginning of period | $85,958 | ($3,910) |
Total gains (losses) (realized or unrealized): | ||
Realized and unrealized gains (losses) included in earnings | 17,840 | -62,285 |
Included in other comprehensive income | 0 | -56,458 |
Settlements | -20,473 | 62,285 |
Transfers in and/or out of Level 3 | 0 | 0 |
Balance at end of period | 83,325 | -60,368 |
Change in unrealized gains (losses) relating to assets and liabilities still held at the end of the period | ($2,633) | $0 |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details 3) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Fair value disclosures | ||
Long-term debt | $1,877,000 | $1,752,000 |
Carrying amount | ||
Fair value disclosures | ||
Long-term debt | 1,877,000 | 1,752,000 |
Estimated fair value | ||
Fair value disclosures | ||
Long-term debt | $1,976,946 | $1,850,867 |
Fair_Value_Measurements_Additi
Fair Value Measurements (Additional Information) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Fair Value Disclosures [Abstract] | ||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | $0 | $0 |
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | 0 | 0 |
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | 0 |
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount | $0 | $0 |
Asset_Retirement_Obligations_D
Asset Retirement Obligations (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Asset Retirement Obligation | ||
Balance at beginning of period | $126,655,000 | |
Liabilities incurred | 4,355,000 | |
Liabilities settled | -113,000 | |
Accretion expense | 1,644,000 | |
Balance at end of period | 132,541,000 | |
Current portion of asset retirement obligation | $2,000,000 | $2,000,000 |
Postretirement_Benefits_Detail
Postretirement Benefits (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Components of Net Periodic Benefit Cost | ||
Service cost | $428 | $456 |
Interest cost | 365 | 407 |
Net periodic benefit cost | $793 | $863 |
Stockbased_Compensation_Detail
Stock-based Compensation (Details) (USD $) | 3 Months Ended | 0 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Feb. 20, 2014 | |
Stock-based Compensation arrangements | |||
Stock based compensation expense | $5,900,000 | $3,200,000 | |
Tax benefits realized for stock-based compensation | 3,400,000 | 16,000,000 | |
Supplemental Employee Incentive Plan IV | |||
Stock-based Compensation arrangements | |||
Stock based compensation expense | -100,000 | 1,500,000 | |
Assumptions: | |||
Stock price volatility | 31.30% | ||
Risk free rate of return | 0.70% | ||
Annual salary increase rate | 4.00% | ||
Annual turnover rate | 4.60% | ||
Restricted Stock Awards | |||
Stock-based Compensation arrangements | |||
Granted (in shares) | 2,400 | ||
Granted (in dollars per share) | $27.53 | ||
Annual forfeiture rate assumption (as a percent) | 5.00% | ||
Restricted Stock Units | |||
Stock-based Compensation arrangements | |||
Granted (in shares) | 45,450 | ||
Granted (in dollars per share) | $27.76 | ||
Performance Share Awards | Minimum | |||
Stock-based Compensation arrangements | |||
Annual forfeiture rate assumption (as a percent) | 0.00% | ||
Performance Share Awards | Maximum | |||
Stock-based Compensation arrangements | |||
Annual forfeiture rate assumption (as a percent) | 5.00% | ||
Performance Share Awards Based on Internal Performance Metrics | Maximum | |||
Stock-based Compensation arrangements | |||
Right to receive additional shares (as a percent) | 100.00% | ||
Employee Performance Share Awards | |||
Stock-based Compensation arrangements | |||
Granted (in shares) | 349,780 | ||
Granted (in dollars per share) | $27.71 | ||
Number of years over which performance criteria is to be met | 3 years | ||
Hybrid Performance Share Awards | |||
Stock-based Compensation arrangements | |||
Granted (in shares) | 194,947 | ||
Granted (in dollars per share) | $27.71 | ||
Vesting rights | The 2015 awards vest 25% on each of the first and second anniversary dates and 50% on the third anniversary | ||
Minimum operating cash flow for the year preceding the performance period | $100,000,000 | ||
Hybrid Performance Share Awards | Hybrid performance share awards, percentage vesting on each of the first and second anniversary | |||
Stock-based Compensation arrangements | |||
Award vesting rights, percentage | 25.00% | ||
Hybrid Performance Share Awards | Hybrid performance share awards, percentage vesting on the third anniversary | |||
Stock-based Compensation arrangements | |||
Award vesting rights, percentage | 50.00% | ||
Performance Shares Based on Market Conditions | Maximum | |||
Stock-based Compensation arrangements | |||
Right to receive shares (as a percent) | 100.00% | ||
Right to receive an additional award in cash (as a percent) | 100.00% | ||
TSR Performance Share Awards | |||
Stock-based Compensation arrangements | |||
Granted (in shares) | 292,421 | ||
Performance period | 3 years | ||
Assumptions: | |||
Fair value per performance share award (in dollars per share) | $19.29 | ||
Stock price volatility | 32.30% | ||
Risk free rate of return | 1.00% | ||
Expected dividend yield | 0.30% | 0.30% | |
Stock price volatility, minimum | 29.30% | ||
Stock price volatility, maximum | 30.30% | ||
Risk free rate of return, minimum | 0.20% | ||
Risk free rate of return, maximum | 0.80% | ||
Fair value per performance share award, minimum (in dollars per share) | $10.37 | ||
Fair value per performance share award, maximum(in dollars per share) | $14.21 |
Earnings_per_Common_Share_Deta
Earnings per Common Share (Details) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Earnings Per Share [Abstract] | ||
Weighted-average shares - basic | 413,344 | 416,900 |
Dilution effect of stock appreciation rights and stock awards at end of period (in shares) | 1,427 | 1,613 |
Weighted-average shares - diluted | 414,771 | 418,513 |
Weighted-average stock awards and shares excluded from diluted EPS due to the anti-dilutive effect | 401 | 272 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Line items in income statement impacted by reclassifications out of accumulated other comprehensive income | ||
Natural gas revenues | $360,191 | $432,809 |
Crude oil and condensate revenues | 62,558 | 59,144 |
Income before income taxes | 63,729 | 177,930 |
Tax benefit (expense) | -23,474 | -70,899 |
Reclassifications to net income | 40,255 | 107,031 |
Amount reclassified from accumulated other comprehensive income | ||
Line items in income statement impacted by reclassifications out of accumulated other comprehensive income | ||
Income before income taxes | 0 | -70,775 |
Tax benefit (expense) | 0 | 28,210 |
Reclassifications to net income | 0 | -42,565 |
Gain (loss) on cash flow hedges | Amount reclassified from accumulated other comprehensive income | Commodity contracts | ||
Line items in income statement impacted by reclassifications out of accumulated other comprehensive income | ||
Natural gas revenues | 0 | -70,557 |
Crude oil and condensate revenues | $0 | ($218) |
ADDITIONAL_BALANCE_SHEET_INFOR2
ADDITIONAL BALANCE SHEET INFORMATION (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Accounts receivable, net | ||
Trade accounts | $182,863 | $227,835 |
Joint interest accounts | 2,016 | 2,245 |
Income taxes receivable | 2,441 | 3,612 |
Other accounts | -614 | 6,515 |
Accounts receivable, gross | 186,706 | 240,207 |
Allowance for doubtful accounts | -1,425 | -1,198 |
Accounts receivable, net | 185,281 | 239,009 |
Inventories | ||
Natural gas in storage | 2,394 | 3,281 |
Tubular goods and well equipment | 11,535 | 10,675 |
Other accounts | 158 | 70 |
Inventory, net | 14,087 | 14,026 |
Other assets | ||
Deferred compensation plan | 13,322 | 13,115 |
Debt issuance cost | 16,082 | 17,349 |
Other accounts | 184 | 65 |
Other assets | 29,588 | 30,529 |
Accounts payable | ||
Trade accounts | 68,891 | 54,949 |
Natural gas purchases | 2,164 | 2,407 |
Royalty and other owners | 93,316 | 97,298 |
Accrued capital costs | 130,782 | 222,426 |
Taxes other than income | 20,464 | 16,806 |
Drilling advances | 87 | 88 |
Other accounts | 5,511 | 6,102 |
Accounts payable current | 321,215 | 400,076 |
Accrued liabilities | ||
Employee benefits | 10,819 | 22,815 |
Taxes other than income | 7,455 | 7,128 |
Interest payable | 13,755 | 30,677 |
Other accounts | 2,550 | 3,049 |
Accrued liabilities | 34,579 | 63,669 |
Other liabilities | ||
Deferred compensation plan | 29,096 | 28,932 |
Other accounts | 9,312 | 10,675 |
Other liabilities | $38,408 | $39,607 |