Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 10, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Carbon Natural Gas Co | |
Entity Central Index Key | 86,264 | |
Trading Symbol | CRBO | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 5,627,589 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 1,014 | $ 858 |
Accounts receivable: | ||
Revenue | 2,510 | 2,369 |
Trade receivables | 621 | 330 |
Receivable - related party | 79 | |
Other | 79 | 1,921 |
Commodity derivative asset | 604 | |
Prepaid expense, deposits and other current assets | 680 | 305 |
Total current assets | 5,587 | 5,783 |
Oil and gas properties, full cost method of accounting; | ||
Proved, net | 32,643 | 33,212 |
Unproved | 1,917 | 1,999 |
Other property and equipment, net | 766 | 325 |
Total property and equipment, net | 35,326 | 35,536 |
Investments in affiliates (note 5) | 8,003 | 668 |
Other long-term assets | 1,308 | 725 |
Total assets | 50,224 | 42,712 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 8,210 | 9,121 |
Firm transportation contract obligations (note 12) | 343 | 561 |
Commodity derivative liability | 1,341 | |
Total current liabilities | 8,553 | 11,023 |
Non-current liabilities: | ||
Firm transportation contract obligations (note 12) | 198 | 261 |
Commodity derivative liability | 591 | |
Ad valorem taxes payable | 595 | 628 |
Warrant derivative liability | 5,410 | |
Asset retirement obligations (note 2) | 5,097 | 5,120 |
Notes payable (note 6) | 15,530 | 16,230 |
Total non-current liabilities | 26,830 | 22,716 |
Commitments (note 12) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; authorized 1,000,000 shares, no shares issued and outstanding at June 30, 2017 and December 31, 2016 | ||
Common stock, $0.01 par value; authorized 200,000,000 shares, 5,627,589 and 5,482,673 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 56 | 55 |
Additional paid-in capital | 58,126 | 57,588 |
Accumulated deficit | (45,239) | (50,535) |
Total Carbon stockholders' equity | 12,943 | 7,108 |
Non-controlling interests | 1,898 | 1,865 |
Total stockholders' equity | 14,841 | 8,973 |
Total liabilities and stockholders' equity | $ 50,224 | $ 42,712 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Balance Sheets [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 5,627,589 | 5,482,673 |
Common stock, shares outstanding | 5,627,589 | 5,482,673 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenue: | ||||
Natural gas sales | $ 4,023 | $ 961 | $ 8,017 | $ 2,053 |
Oil sales | 1,146 | 808 | 2,192 | 1,436 |
Commodity derivative gain (loss) | 998 | (774) | 3,141 | (634) |
Other income | 10 | 20 | 1 | |
Total revenue | 6,177 | 995 | 13,370 | 2,856 |
Expenses: | ||||
Lease operating expenses | 1,501 | 653 | 2,706 | 1,242 |
Transportation costs | 525 | 385 | 1,015 | 758 |
Production and property taxes | 443 | 124 | 855 | 259 |
General and administrative | 1,748 | 1,552 | 3,494 | 3,075 |
General and administrative - related party reimbursement | (225) | (300) | ||
Depreciation, depletion and amortization | 662 | 436 | 1,234 | 938 |
Accretion of asset retirement obligations | 78 | 35 | 155 | 70 |
Impairment of oil and gas properties | 409 | 4,299 | ||
Total expenses | 4,732 | 3,594 | 9,159 | 10,641 |
Operating income (loss) | 1,445 | (2,599) | 4,211 | (7,785) |
Other income and (expense): | ||||
Interest expense | (254) | (46) | (522) | (103) |
Warrant derivative gain | 853 | 1,683 | ||
Equity investment income (loss) | (7) | (6) | (6) | |
Other | 17 | 17 | ||
Total other income (expense) | 592 | (35) | 1,161 | (92) |
Income (loss) before income taxes | 2,037 | (2,634) | 5,372 | (7,877) |
Provision for income taxes | ||||
Net income (loss) before non-controlling interests | 2,037 | (2,634) | 5,372 | (7,877) |
Net income (loss) attributable to non-controlling interests | 33 | (116) | 76 | (432) |
Net income (loss) attributable to controlling interest | $ 2,004 | $ (2,518) | $ 5,296 | $ (7,445) |
Net income (loss) per common share: | ||||
Basic | $ 0.36 | $ (0.46) | $ 0.95 | $ (1.37) |
Diluted | $ 0.17 | $ (0.46) | $ 0.56 | $ (1.37) |
Weighted average common shares outstanding: | ||||
Basic | 5,620 | 5,498 | 5,554 | 5,429 |
Diluted | 6,588 | 5,498 | 6,458 | 5,429 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - 6 months ended Jun. 30, 2017 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Non-Controlling Interests | Accumulated Deficit |
Beginning balances at Dec. 31, 2016 | $ 8,973 | $ 55 | $ 57,588 | $ 1,865 | $ (50,535) |
Beginning balances, (in shares) at Dec. 31, 2016 | 5,483 | ||||
Stock-based compensation | 539 | 539 | |||
Restricted stock vested | |||||
Restricted stock vested, shares | 65 | ||||
Performance units vested | $ 1 | (1) | |||
Performance units vested, shares | 80 | ||||
Non-controlling interest distributions, net | (43) | (43) | |||
Net loss | 5,372 | 76 | 5,296 | ||
Ending balances at Jun. 30, 2017 | $ 14,841 | $ 56 | $ 58,126 | $ 1,898 | $ (45,239) |
Ending balances, (in shares) at Jun. 30, 2017 | 5,628 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 5,372 | $ (7,877) |
Items not involving cash: | ||
Depreciation, depletion and amortization | 1,234 | 938 |
Accretion of asset retirement obligations | 155 | 70 |
Impairment of oil and gas properties | 4,299 | |
Unrealized commodity derivative (gain) loss | (3,023) | 966 |
Warrant derivative unrealized (gain) | (1,683) | |
Stock-based compensation expense | 539 | 663 |
Investment in affiliates (gain) loss | 6 | |
Other | (72) | (7) |
Net change in: | ||
Accounts receivable | 1,331 | 341 |
Prepaid expenses, deposits and other current assets | (375) | 22 |
Accounts payable, accrued liabilities and firm transportation contract obligations | (1,142) | (56) |
Net cash provided by (used in) operating activities | 2,336 | (635) |
Cash flows from investing activities: | ||
Development and acquisition of properties and equipment | (1,182) | (233) |
Proceeds from sale of oil and gas properties and other assets | 8 | |
Other long-term assets | (15) | 49 |
Investment in affiliates | (240) | 275 |
Net cash provided by (used in) investing activities | (1,437) | 99 |
Cash flows from financing activities: | ||
Proceeds from notes payable | 600 | 700 |
Payments on notes payable | (1,300) | (200) |
Distributions to non-controlling interests | (43) | (3) |
Net cash (used in) provided by financing activities | (743) | 497 |
Net increase (decrease) in cash and cash equivalents | 156 | (39) |
Cash and cash equivalents, beginning of period | 858 | 305 |
Cash and cash equivalents, end of period | $ 1,014 | $ 266 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2017 | |
Organization [Abstract] | |
Organization | Note 1 – Organization The Company’s business is comprised of the assets and properties of Carbon Natural Gas Company and its subsidiaries as well as its equity investments in Carbon Appalachian Company, LLC (“Carbon Appalachia”) and Carbon California Company, LLC (“Carbon California”). Appalachian and Illinois Basin Operations In the Appalachian and Illinois Basins, Nytis Exploration Company, LLC (“Nytis LLC”) conducts operations for the Company and Carbon Appalachia. California Operations In California, Carbon California Operating Company, LLC (“CCOC”), conducts Carbon California’s operations. Collectively, Carbon Natural Gas Company, CCOC, Nytis Exploration (USA) Inc. (“Nytis USA”) and Nytis LLC are referred to as the Company. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited Consolidated Financial Statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly the Company’s financial position as of June 30, 2017 and the Company’s results of operations and cash flows for the three and six months ended June 30, 2017 and 2016. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the full year because of the impact of fluctuations in prices received for oil and natural gas, natural production declines, the uncertainty of exploration and development drilling results and other factors. For a more complete understanding of the Company’s operations, financial position and accounting policies, the unaudited Consolidated Financial Statements and the notes thereto should be read in conjunction with the Company’s audited Consolidated Financial Statements for the year ended December 31, 2016 filed on Form 10-K with the Securities and Exchange Commission (“SEC”). In the course of preparing the unaudited Consolidated Financial Statements, management makes various assumptions, judgments and estimates to determine the reported amount of assets, liabilities, revenue and expenses and in the disclosures of commitments and contingencies. Changes in these assumptions, judgments and estimates will occur as a result of the passage of time and the occurrence of future events and accordingly, actual results could differ from amounts initially established. Principles of Consolidation The Consolidated Financial Statements include the accounts of Carbon, CCOC, Nytis USA and its consolidated subsidiary, Nytis LLC. Carbon owns 100% of Nytis USA and CCOC. Nytis USA owns approximately 99% of Nytis LLC. Nytis LLC also holds an interest in various oil and gas partnerships. For partnerships where the Company has a controlling interest, the partnerships are consolidated. The Company is currently consolidating on a pro-rata basis 46 partnerships. In these instances, the Company reflects the non-controlling ownership interest in partnerships and subsidiaries as non-controlling interests on its Consolidated Statements of Operations and reflects the non-controlling ownership interests in the net assets of the partnerships as non-controlling interests within stockholders’ equity on its Consolidated Balance Sheets. All significant intercompany accounts and transactions have been eliminated. In accordance with established practice in the oil and gas industry, the Company’s unaudited Consolidated Financial Statements also include its pro-rata share of assets, liabilities, income, lease operating costs and general and administrative expenses of the oil and gas partnerships in which the Company has a non-controlling interest. Non-majority owned investments that do not meet the criteria for pro-rata consolidation are accounted for using the equity method when the Company has the ability to significantly influence the operating decisions of the investee. When the Company does not have the ability to significantly influence the operating decisions of an investee, the cost method is used. All transactions, if any, with investees have been eliminated in the accompanying Consolidated Financial Statements. Accounting for Oil and Gas Operations The Company uses the full cost method of accounting for oil and gas properties. Accordingly, all costs incidental to the acquisition, exploration and development of oil and gas properties, including costs of undeveloped leasehold, dry holes and leasehold equipment, are capitalized. Overhead costs incurred that are directly identified with acquisition, exploration and development activities undertaken by the Company for its own account, and which are not related to production, general corporate overhead or similar activities, are also capitalized. Unproved properties are excluded from amortized capitalized costs until it is determined if proved reserves can be assigned to such properties. The Company assesses its unproved properties for impairment at least annually. Significant unproved properties are assessed individually. Capitalized costs are depleted by an equivalent unit-of-production method, converting oil to gas at the ratio of one barrel of oil to six thousand cubic feet of natural gas. Depletion is calculated using capitalized costs, including estimated asset retirement costs, plus the estimated future expenditures (based on current costs) to be incurred in developing proved reserves, net of estimated salvage values. No gain or loss is recognized upon disposal of oil and gas properties unless such disposal significantly alters the relationship between capitalized costs and proved reserves. All costs related to production activities, including work-over costs incurred solely to maintain or increase levels of production from an existing completion interval, are charged to expense as incurred. The Company performs a ceiling test quarterly. The full cost ceiling test is a limitation on capitalized costs prescribed by SEC Regulation S-X Rule 4-10. The ceiling test is not a fair value based measurement, rather it is a standardized mathematical calculation. The ceiling test provides that capitalized costs less related accumulated depletion and deferred income taxes may not exceed the sum of (1) the present value of future net revenue from estimated production of proved oil and gas reserves using the un-weighted arithmetic average of the first-day-of-the month price for the previous twelve month period, excluding the future cash outflows associated with settling asset retirement obligations that have been accrued on the balance sheet, at a discount factor of 10%; plus (2) the cost of properties not being amortized, if any; plus (3) the lower of cost or estimated fair value of unproved properties included in the costs being amortized, if any; less (4) income tax effects related to differences in the book and tax basis of oil and gas properties. Should the net capitalized costs exceed the sum of the components noted above, a ceiling test write-down would be recognized to the extent of the excess capitalized costs. Such impairments are permanent and cannot be recovered in future periods even if the sum of the components noted above exceeds the capitalized costs in future periods. For the three and six months ended June 30, 2017, the Company did not recognize a ceiling test impairment as the Company’s full cost pool did not exceed the ceiling limitation. For the three and six months ended June 30, 2016, the Company recognized a ceiling test impairment of approximately $409,000 and $4.3 million, respectively, as the Company’s full cost pool exceeded its ceiling limitations. Future declines in oil and natural gas prices, and increases in future operating expenses and future development costs could result in additional impairments of our oil and gas properties in future periods. Impairment charges are a non-cash charge and accordingly, do not affect cash flow, but adversely affect our net income and stockholders’ equity. Investments in Affiliates Investments in non-consolidated affiliates are accounted for under either the cost or equity method of accounting, as appropriate. The cost method of accounting is generally used for investments in affiliates in which the Company has less than 20% of the voting interests of a corporate affiliate or less than a 3% to 5% interest of a partnership or limited liability company and does not have significant influence. Investments in non-consolidated affiliates, accounted for using the cost method of accounting, are recorded at cost and impairment assessments for each investment are made annually to determine if a decline in the fair value of the investment, other than temporary, has occurred. A permanent impairment is recognized if a decline in the fair value occurs. If the Company holds between 20% and 50% of the voting interest in non-consolidated corporate affiliates or generally greater than a 3% to 5% interest of a partnership or limited liability company and exerts significant influence or control (e.g., through its influence with a seat on the board of directors or management of operations), the equity method of accounting is generally used to account for the investment. The Company’s investment in affiliates that is accounted for using the equity method of accounting, increases or decreases by the Company’s share of the affiliate’s profits or losses and such profits or losses are recognized in the Company’s Consolidated Statements of Operations. For its equity method investments in Carbon Appalachia and Carbon California, the Company uses the hypothetical liquidation at book value method to recognize its share of the affiliate’s profits or losses. The Company reviews equity method investments for impairment whenever events or changes in circumstances indicate that an other than temporary decline in value has occurred. Related Party Transactions On February 15, 2017, the Company entered into a limited liability company agreement of Carbon California. Pursuant to the limited liability agreement, Carbon California reimbursed the Company for (i) due diligence costs incurred on behalf of Carbon California, (ii) transaction-related costs and (iii) $225,000 for the period February 15, 2017 through June 30, 2017, in connection with its role as manager of Carbon California. See Note 5 for additional information. On April 3, 2017, the Company entered into the limited liability company agreement of Carbon Appalachia. Pursuant to the limited liability agreement, Carbon Appalachia reimbursed the Company for (i) due diligence costs incurred on behalf of Carbon Appalachia, (ii) transaction-related costs and (iii) $75,000 for the period April 3, 2017 through June 30, 2017, in connection with its role as manager of Carbon Appalachia. See Note 5 for additional information. Warrant Derivative Liability The Company issued warrants related to its investments in Carbon California and Carbon Appalachia. The Company accounts for these warrants in accordance with guidance contained in ASC 815, Derivatives and Hedging Asset Retirement Obligations The Company’s asset retirement obligations (“ARO”) relate to future costs associated with the plugging and abandonment of oil and gas wells, removal of equipment and facilities from leased acreage and returning such land to its original condition. The fair value of a liability for an ARO is recorded in the period in which it is incurred and the cost of such liability is recorded as an increase in the carrying amount of the related long-lived asset by the same amount. The liability is accreted each period and the capitalized cost is depleted on a units-of-production basis as part of the full cost pool. Revisions to estimated AROs result in adjustments to the related capitalized asset and corresponding liability. The estimated ARO liability is based on estimated economic lives, estimates as to the cost to abandon the wells in the future, and federal and state regulatory requirements. The liability is discounted using a credit-adjusted risk-free rate estimated at the time the liability is incurred or increased as a result of a reassessment of expected cash flows and assumptions inherent in the estimation of the liability. Upward revisions to the liability could occur due to changes in estimated abandonment costs or well economic lives, or if federal or state regulators enact new requirements regarding the abandonment of wells. AROs are valued utilizing Level 3 fair value measurement inputs. The following table is a reconciliation of the ARO for the six months ended June 30, 2017 and 2016: (in thousands) Six Months Ended June 30, 2017 2016 Balance at beginning of period $ 5,120 $ 3,095 Accretion expense 155 70 Additions during period 5 5 5,280 3,170 Less: ARO recognized as a current liability (183 ) - Balance at end of period $ 5,097 $ 3,170 Earnings (Loss) Per Common Share Basic earnings or loss per common share is computed by dividing the net income or loss attributable to common shareholders for the period by the weighted average number of common shares outstanding during the period. The shares of restricted common stock granted to certain officers, directors and employees of the Company are included in the computation of basic net income or loss per share only after the shares become fully vested. Diluted earnings per common share includes both the vested and unvested shares of restricted stock and the potential dilution that could occur upon exercise of warrants to acquire common stock, computed using the treasury stock method, which assumes that the increase in the number of shares is reduced by the number of shares which could have been repurchased by the Company with the proceeds from the exercise of warrants (which were assumed to have been made at the average market price of the common shares during the reporting period). The following table sets forth the calculation of basic and diluted income (loss) per share: in thousands except per share amounts Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Basic Earnings (Loss) per Share Net income (loss) available to common shareholders, basic $ 2,004 $ (2,518 ) $ 5,296 $ (7,445 ) Weighted average shares outstanding, basic 5,620 5,498 5,554 5,429 Net income (loss) per common share, basic $ 0.36 $ (0.46 ) $ 0.95 (1.37 ) Diluted Earnings (Loss) per Share Net income (loss) available to common shareholders, basic $ 2,004 $ (2,518 ) $ 5,296 $ (7,445 ) Less: decrease in fair value of warrant (853 ) - (1,684 ) - Adjusted net income (loss) available to common shareholders, diluted $ 1,151 $ (2,518 ) $ 3,612 $ (7,445 ) Weighted average shares outstanding, basic 5,620 5,498 5,554 5,429 Add: dilutive effects of warrant and nonvested shares of restricted stock 968 - 904 - Weighted-average shares outstanding, diluted 6,588 5,498 6,458 5,429 Net income (loss) per common share, diluted $ 0.17 $ (0.46 ) $ 0.56 $ (1.37 ) For the three months ended June 30, 2017, the Company had net income and the diluted net income per share calculation for that period includes the dilutive effect of approximately 284,000 non-vested shares of restricted stock and approximately 684,000 in-the-money warrants. In addition, approximately 13,000 out-of-the-money warrants and approximately 276,000 restricted performance units, subject to future contingencies, are excluded from the basic and diluted loss per share calculations. For the six months ended June 30, 2017, the Company had net income and the diluted net income per share calculation for that period includes the dilutive effect of approximately 284,000 non-vested shares of restricted stock and approximately 620,000 in-the-money warrants. In addition, approximately 13,000 out-of-the-money warrants and approximately 276,000 restricted performance units, subject to future contingencies, are excluded from the basic and diluted loss per share calculations. For the three and six months ended June 30, 2016, the Company had a net loss and therefore, the diluted net loss per share calculation excluded the anti-dilutive effect of approximately 13,000 warrants and approximately 246,000 non-vested shares of restricted stock in each period. In addition, approximately 298,000 restricted performance units, in each period, subject to future contingencies were excluded from the basic and diluted loss per share calculations. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and disclosure of contingent assets and liabilities. Significant items subject to such estimates and assumptions include the carrying value of oil and gas properties, the estimate of proved oil and gas reserve volumes and the related depletion and present value of estimated future net cash flows and the ceiling test applied to capitalized oil and gas properties, determining the amounts recorded for deferred income taxes, stock-based compensation, fair value of commodity derivative instruments, fair value of warrants, equity method investments, fair value of assets acquired qualifying as business contributions and asset retirement obligations. Actual results could differ from those estimates and assumptions used, and the use of such estimates may result in volatility within the Company’s financial statements. Adopted and Recently Issued Accounting Pronouncements In February 2016, the FASB issued Accounting Standard Update (“ASU”) No. 2016-02, Leases In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business, |
Acquisitions and Divestitures
Acquisitions and Divestitures | 6 Months Ended |
Jun. 30, 2017 | |
Acquisitions and Divestitures [Abstract] | |
Acquisitions and Divestitures | Note 3 – Acquisitions and Divestitures In October 2016, Nytis LLC completed an acquisition (the “EXCO Acquisition”) consisting of producing natural gas wells and natural gas gathering facilities located in the Company’s Appalachian Basin operating area. The natural gas gathering facilities are primarily used to gather the Company’s natural gas production. The acquisition was pursuant to a purchase and sale agreement, effective October 1, 2016 (the “EXCO Purchase Agreement”) by and among EXCO Production Company (WV), LLC, BG Production Company (WV), LLC and EXCO Resources (PA) LLC (collectively, the “Sellers”) and Nytis LLC, as the buyer. The purchase price of the acquired assets pursuant to the EXCO Purchase Agreement was $9.0 million subject to customary closing adjustments plus certain assumed obligations. The EXCO Acquisition provided the Company with proved developed reserves, production and operating cash flow in a location where the Company has similar assets. EXCO Acquisition Unaudited Pro Forma Results of Operations Below are consolidated results of operations for the six months ended June 30, 2017 and 2016 as though the EXCO Acquisition had been completed as of January 1, 2016. The EXCO Acquisition closed October 3, 2016, and accordingly, the Company’s consolidated statement of operations for the six months ended June 30, 2017 includes the results of operations for the six months ended June 30, 2017 of the EXCO properties acquired. Unaudited Pro Forma Consolidated Results For Six Months Ended (in thousands, except per share amounts) 2017 2016 Revenue $ 13,370 $ 6,348 Net income (loss) before non-controlling interests 5,372 (3,560 ) Net income (loss) attributable to non-controlling interests 76 (432 ) Net income (loss) attributable to controlling interests 5,296 (3,128 ) Net income (loss) income per share (basic) 0.95 (0.58 ) Net income (loss) income per share (diluted) 0.82 (0.58 ) |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2017 | |
Property and Equipment [Abstract] | |
Property and Equipment | Note 4 – Property and Equipment Net property and equipment as of June 30, 2017 and December 31, 2016 consists of the following: (in thousands) June 30, December 31, 2016 Oil and gas properties: Proved oil and gas properties $ 112,273 $ 111,771 Unproved properties not subject to depletion 1,917 1,999 Accumulated depreciation, depletion, amortization and impairment (79,630 ) (78,559 ) Net oil and gas properties 34,560 35,211 Furniture and fixtures, computer hardware and software, and other equipment 1,563 990 Accumulated depreciation and amortization (797 ) (665 ) Net other property and equipment 766 325 Total net property and equipment $ 35,326 $ 35,536 As of June 30, 2017 and December 31, 2016, the Company had approximately $1.9 million and $2.0 million, respectively, of unproved oil and gas properties not subject to depletion. The costs not subject to depletion relate to unproved properties that are excluded from amortized capital costs until it is determined if proved reserves can be assigned to such properties. The excluded properties are assessed for impairment at least annually. Subject to industry conditions, evaluation of most of these properties and the inclusion of their costs in amortized capital costs is expected to be completed within five years. During the six months ended June 30, 2017 and 2016, the Company capitalized general and administrative expenses applicable to development and exploration activities of approximately $131,000 and $289,000, respectively. Depletion expense related to oil and gas properties for the three and six months ended June 30, 2017 was approximately $539,000, or $0.40 per Mcfe, and $1.1 million, or $0.41 per Mcfe, respectively. For the three and six months ended June 30, 2016, depletion expense was approximately $407,000, or $0.65 per Mcfe, and $879,000, or $0.72 per Mcfe, respectively. Depreciation and amortization expense related to furniture and fixtures, computer hardware and software and other equipment for the three months ended June 30, 2017 and 2016 was approximately $123,000 and $29,000, respectively and for the six months ended June 30, 2017 and 2016 was approximately $163,000 and $59,000, respectively. |
Investments in Affiliates
Investments in Affiliates | 6 Months Ended |
Jun. 30, 2017 | |
Investments in Affiliates [Abstract] | |
Investments in Affiliates | Note 5– Investments in Affiliates Crawford County Gas Gathering Company The Company has a 50% interest in Crawford County Gas Gathering Company, LLC (“CCGGC”) which owns and operates pipelines and related gathering and treatment facilities. The Company’s gas production located in Illinois is gathered by CCGGC’s gathering facilities. The Company’s investment in CCGGC is accounted for under the equity method of accounting, and its share of income or loss is recognized. During the six months ended June 30, 2017 and 2016, the Company recorded equity method income of approximately $7,000 and equity method loss of approximately $6,000, respectively, related to this investment. In addition, during the first quarter of 2016, the Company received a cash distribution of $275,000 from CCGGC. Carbon California On February 15, 2017, the Company entered into a limited liability company agreement (the “Carbon California LLC Agreement”) of Carbon California, a Delaware limited liability company established by the Company. Pursuant to the Carbon California LLC Agreement, Carbon acquired a 17.8% interest in Carbon California represented by Class B Units. The Class B Units were acquired for no cash consideration. No further equity commitments have been made or are required by the Company under the Carbon California LLC Agreement; however, should the Company choose not to participate in future equity calls, its interest would be diluted. On February 15, 2017, Carbon California (i) issued and sold Class A Units to two institutional investors for an aggregate cash consideration of $22.0 million, (ii) entered into a Note Purchase Agreement (the “Note Purchase Agreement” “Senior Revolving Notes” Securities Purchase Agreement” “Subordinated Notes” Net proceeds from the offering transaction were used by Carbon California to complete the acquisitions of oil and gas assets in the Ventura Basin of California, which acquisitions also closed on February 15, 2017. The remainder of the net proceeds are being used to fund field development projects and to fund future complementary acquisitions and for general working capital purposes of Carbon California. In connection with the Company entering into the Carbon California LLC Agreement described above and Carbon California engaging in the transactions also described above, the Company issued to an affiliate of one of the institutional investors which purchased Class A Units of Carbon California (which is also an affiliate of the Company’s largest stockholders), a warrant to purchase approximately 1.5 million shares of the Company’s common stock at an exercise price of $7.20 per share (the “California Warrant”). The exercise price for the California Warrant is payable exclusively with Class A Units of Carbon California held by this investor and the number of shares of the Company’s common stock for which the California Warrant is exercisable is determined, as of the time of exercise, by dividing (a) the aggregate unreturned capital of the warrantholder’s Class A Units of Carbon California by (b) the exercise price. The California Warrant has a term of seven years and includes certain standard registration rights with respect to the shares of the Company’s common stock issuable upon exercise of the California Warrant. If exercised, the California Warrant provides Carbon an opportunity to increase its ownership stake in Carbon California without requiring the payment of cash. Based on its 17.8% interest in Carbon California, its ability to appoint a member to the board of directors and its role of manager of Carbon California, the Company is accounting for its investment in Carbon California under the equity method of accounting as it believes it can exert significant influence. The Company uses the hypothetical liquidation at book value method (“HLBV”) to determine its share of profits or losses in Carbon California and adjusts the carrying value of its investment accordingly. The HLBV is a balance-sheet oriented approach that calculates the amount each member of Carbon California would receive if Carbon California were liquidated at book value at the end of each measurement period. The change in the allocated amount to each member during the period represents the income or loss allocated to that member. In the event of liquidation of Carbon California, to the extent that Carbon California has net income, available proceeds are first distributed to members holding Class A and Class B units and any remaining proceeds are then distributed to members holding Class A units, of which the Company holds none. For the three months ended June 30, 2017, and for the period of February 15, 2017 through June 30, 2017, Carbon California incurred a net loss. Should Carbon California report income, the Company will not record income (or losses) until the Company’s share of such income equals the amount of its share of losses not previously reported. While income may be recorded in future periods, the ability of Carbon California to make distributions to its owners, including us, is dependent upon the terms of its credit facilities, which currently prohibit distributions unless agreed to by the lender. The Company accounted for the California Warrant, at issuance, as the initial investment in Carbon California and a liability based on the fair value of the California Warrant as of the date of grant (February 15, 2017). Future changes to the fair value of the California Warrant are recognized in earnings. As of grant date of the California Warrant, the Company estimated that the fair market value of the California Warrant was approximately $5.8 million and recorded that amount to its investment in Carbon California and a long-term liability. As of June 30, 2017, the Company estimated that the fair value of the California Warrant was approximately $4.3 million. The difference in the fair value of the California Warrant from the grant date though June 30, 2017 was approximately $1.5 million and approximately $680,000 and $1.5 million was recognized in other income in the Company’s Consolidated Statements of Operations for the three and six months ended June 30, 2017, respectively. See Note 10 for additional information. Carbon Appalachia On April 3, 2017, the Company finalized a limited liability company agreement (the “Carbon Appalachia LLC Agreement”) and the initial funding of Carbon Appalachian Company, LLC (“Carbon Appalachia”). Carbon Appalachian was formed by Carbon and two institutional investors to acquire producing assets in Southern Appalachia and has an initial equity commitment of $100.0 million, of which $12.0 million has been contributed as of June 30, 2017. Pursuant to the Carbon Appalachia LLC Agreement, Carbon acquired a 2.0% interest in Carbon Appalachia for $240,000 represented by Class A Units associated with its total equity commitment of $2.0 million. Carbon also has the ability to earn up to an additional 20.0% of Carbon Appalachia distributions (represented by Class B Units) after certain return thresholds to the holders of Class A Units are met. The Class B Units were acquired for no cash consideration. In addition, Carbon acquired a 1.0% interest represented by Class C Units which were obtained in connection with the contribution to Carbon Appalachia of a portion of its working interest in undeveloped properties in Tennessee. If Carbon Appalachia agrees to drill horizontal Chattanooga Shale wells on these properties, it will pay 100% of the cost of drilling and completion of the first 20 wells to earn a 75% working interest in such properties. Carbon, through its subsidiary, Nytis LLC, will retain a 25% working interest in the properties. In connection with and concurrently with the closing of the acquisition described below, Carbon Appalachia Enterprises, LLC, formerly known as Carbon Tennessee Company, LLC (“Carbon Appalachia Enterprises”), an indirect subsidiary of Carbon Appalachia, entered into a 4-year $100.0 million senior secured asset-based revolving credit facility with LegacyTexas Bank with an initial borrowing base of $10.0 million. Borrowings under the credit facility, along with the initial equity contributions made to Carbon Appalachia, were used to complete the acquisition of natural gas producing properties and related facilities located predominantly in Tennessee (the “Acquisition”). The purchase price was $20.0 million, subject to normal and customary pre and post-closing adjustments, and Carbon Appalachia Enterprises used $8.5 million drawn from the credit facility toward the purchase price. In connection with the Company entering into the Carbon Appalachia LLC Agreement described above and Carbon Appalachia Enterprises engaging in the Acquisition, the Company issued to an affiliate of one of the institutional investors which purchased Class A Units of Carbon Appalachia (which is also an affiliate of the Company’s largest stockholders), a warrant to purchase approximately 408,000 shares of the Company’s common stock at an exercise price of $7.20 per share (the “Appalachia Warrant”). The exercise price for the Appalachia Warrant is payable exclusively with Class A Units of Carbon Appalachia held by this investor and the number of shares of the Company common stock for which the Appalachia Warrant is exercisable is determined, as of the time of exercise, by dividing (a) the aggregate unreturned capital of the warrantholder’s Class A Units of Carbon Appalachia plus a 10% internal rate of return by (b) the exercise price. The Appalachia Warrant has a term of seven years and includes certain standard registration rights with respect to the shares of Carbon’s common stock issuable upon exercise of the Appalachia Warrant. If exercised, the Appalachia Warrant provides Carbon an opportunity to increase its ownership stake in Carbon Appalachia without requiring the payment of cash. Based on its 3.0% combined Class A and Class C interest (and its ability to earn up to an additional 20.0%) in Carbon Appalachia, its ability to appoint a member to the board of directors and its role of manager of Carbon Appalachia, the Company is accounting for its investment in Carbon Appalachia under the equity method of accounting as it believes it can exert significant influence. The Company uses the HLBV to determine its share of profits or losses in Carbon Appalachia and adjusts the carrying value of its investment accordingly. The Company’s investment in Carbon Appalachia is represented by its Class A and C interests, which it acquired by contributing $240,000 in cash and unevaluated property. In the event of liquidation of Carbon Appalachia, available proceeds are first distributed to members holding Class A and Class C Units until their contributed capital is recovered with an internal rate of return of 10%. Any additional distributions would then be shared between holders of Class A, Class B and Class C Units. For the period of April 3, 2017 through June 30, 2017, Carbon Appalachia incurred a net loss, of which the Company’s share is approximately $7,000. While income may be recorded in future periods, the ability of Carbon Appalachia to make distributions to its owners, including us, is dependent upon the terms of its credit facilities, which currently prohibit distributions unless agreed to by the lender. The Company accounted for the Appalachia Warrant, at issuance, as an investment in Carbon Appalachia and a liability based on the fair value of the Appalachia Warrant as of the date of grant (April 3, 2017). Future changes to the fair value of the Appalachia Warrant are recognized in earnings. As of grant date of the Appalachia Warrant, the Company estimated that the fair value of the Appalachia Warrant was approximately $1.3 million and recorded that amount to its investment in Carbon Appalachia and a long-term liability. As of June 30, 2017, the Company estimated that the fair value of the Appalachia Warrant was approximately $1.1 million. The difference in the fair value of the Appalachia Warrant from the grant date though June 30, 2017 was approximately $174,000 and was recognized in other income in the Company’s Consolidated Statements of Operations for the three and six months ended June 30, 2017. See Note 10 for additional information. |
Bank Credit Facility
Bank Credit Facility | 6 Months Ended |
Jun. 30, 2017 | |
Bank Credit Facility [Abstract] | |
Bank Credit Facility | Note 6 – Bank Credit Facility In 2016, Carbon entered into a 4-year $100.0 million senior secured asset-based revolving credit facility with LegacyTexas Bank. LegacyTexas Bank is the initial lender and acts as administrative agent. The credit facility has a maximum availability of $100.0 million (with a $500,000 sublimit for letters of credit), which availability is subject to the amount of the borrowing base. The initial borrowing base established under the credit facility was $17.0 million. The borrowing base is subject to semi-annual redeterminations in March and September commencing March 2017. On March 30, 2017, the borrowing base was increased to $23.0 million. The credit facility is guaranteed by each existing and future direct or indirect subsidiary of Carbon (subject to certain exceptions). The obligations of Carbon and the subsidiary guarantors under the credit facility are secured by essentially all tangible and intangible personal and real property of the Company (subject to certain exclusions). Interest is payable quarterly and accrues on borrowings under the credit facility at a rate per annum equal to either (i) the base rate plus an applicable margin between 0.50% and 1.50% or (ii) the Adjusted LIBOR rate plus an applicable margin between 3.50% and 4.50% at Carbon’s option. The actual margin percentage is dependent on the credit facility utilization percentage. Carbon is obligated to pay certain fees and expenses in connection with the credit facility, including a commitment fee for any unused amounts of 0.50%. The credit facility contains certain affirmative and negative covenants that, among other things, limit the Company’s ability to (1) incur additional debt; (ii) incur additional liens; (iii) sell, transfer or dispose of assets; (iv) merge or consolidate, wind-up, dissolve or liquidate; (v) make dividends and distributions on, or repurchases of, equity; (vi) make certain investments; (vii) enter into certain transactions with its affiliates; (viii) enter into sales-leaseback transaction; (ix) make optional or voluntary payment of debt; (x) change the nature of its business; (xi) change its fiscal year to make changes to the accounting treatment or reporting practices; (xii) amend constituent documents; and (xiii) enter into certain hedging transactions. The affirmative and negative covenants are subject to various exceptions, including certain basket amounts and acceptable transaction levels. In addition, the credit facility requires Carbon’s compliance, on a consolidated basis, with (i) maximum funded Debt/EBITDA ratio of 3.5 to 1.0 and (ii) a minimum current ratio of 1.0 to 1.0, commencing with the quarter ended March 31, 2017. The Company was in compliance with the financial covenants associated with the credit facility as of June 30, 2017. Carbon may at any time repay the loans under the credit facility, in whole or in part, without penalty. Carbon must pay down borrowings under the credit facility or provide mortgages of additional oil and natural gas properties to the extent that outstanding loan and letters of credit exceed the borrowing base. As required under the terms of the credit facility, the Company entered into derivative contracts at fixed pricing for a certain percentage of its production. The Company is party to an ISDA Master Agreement with BP Energy Company that establishes standard terms for the derivative contracts and an inter-creditor agreement with LegacyTexas Bank and BP Energy Company whereby any credit exposure related to the derivative contracts entered into by the Company and BP Energy Company is secured by the collateral and backed by the guarantees supporting the credit facility. As of June 30, 2017, there were approximately $15.5 million in outstanding borrowings and approximately $7.5 million of additional borrowing capacity available under the credit facility. The Company’s effective borrowing rate at June 30, 2017 was approximately 5.40%. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | Note 7 – Income Taxes The Company recognizes deferred income tax assets and liabilities for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Company has net operating loss carryforwards available in certain jurisdictions to reduce future taxable income. Future tax benefits for net operating loss carryforwards are recognized to the extent that realization of these benefits is considered more likely than not. To the extent that available evidence raises doubt about the realization of a deferred income tax asset, a valuation allowance is established. At June 30, 2017, the Company has established a full valuation allowance against the balance of net deferred tax assets. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | Note 8 – Stockholders’ Equity Authorized and Issued Capital Stock Effective March 15, 2017 and pursuant to a reverse stock split approved by the shareholders and Board of Directors, each 20 shares of issued and outstanding common stock became one share of common stock and no fractional shares were issued. References to the number of shares and price per share give retroactive effect to the reverse stock split for all periods presented. As of June 30, 2017, the Company had 200,000,000 shares of common stock authorized with a par value of $0.01 per share, of which approximately 5.6 million were issued and outstanding and 1,000,000 shares of preferred stock authorized with a par value of $0.01 per share, none of which were issued and outstanding. During the first six months of 2017, the increase in the Company’s issued and outstanding common stock was a result of restricted stock and performance units that vested during the period. Equity Plans Prior to Merger Pursuant to the merger of Nytis USA with and into the Company in 2011, all options, warrants and restricted stock were adjusted to reflect the conversion ratio used in the merger. As of June 30, 2017, the Company has approximately 13,000 warrants outstanding and exercisable related to these plans. Nytis USA Restricted Stock Plan As of June 30, 2017, all restricted stock issued under the Nytis USA Restricted Stock Plan (“Nytis USA Plan”) have vested. The Company accounted for these grants at their intrinsic value. From the date of grant through March 31, 2013, the Company estimated that none of these shares would vest and accordingly, no compensation cost had been recorded through March 31, 2013. In June 2013, the vesting terms of these restricted stock grants were modified so that 25% of the shares would vest on the first of January from 2014 through 2017. As such, the Company recognized compensation expense for those restricted stock grants based on the fair value of the shares on the date the vesting terms were modified. Compensation expense recognized for those restricted stock grants was approximately $84,000 and approximately $168,000 for the three and six months ended June 30, 2016, respectively. No compensation expense was recognized for those restricted stock grants for the three and six months ended June 30, 2017. As of December 31, 2016, compensation costs relative to those restricted stock grants were fully recognized. Carbon Stock Incentive Plans The Company has two stock plans, the Carbon 2011 and 2015 Stock Incentive Plans (collectively the “Carbon Plans”). The Carbon Plans were approved by the shareholders of the Company and in the aggregate provide for the issuance of approximately 1.1 million shares of common stock to Carbon officers, directors, employees or consultants eligible to receive these awards under the Carbon Plans. The Carbon Plans provide for granting Director Stock Awards to non-employee directors and for granting Incentive Stock Options, Non-qualified Stock Options, Restricted Stock Awards, Performance Awards and Phantom Stock Awards, or a combination of the foregoing, as is best suited to the circumstances of the particular employee, officer, director or consultant. Restricted Stock During the six months ended June 30, 2017, approximately 81,000 shares of restricted stock were granted under the terms of the Carbon Plan in addition to 462,000 shares granted during previous years. For employees, these restricted stock awards either vest ratably over a three-year service period or cliff vest after a three-year service period. For non-employee directors, the awards vest upon the earlier of a change in control of the Company or the date their membership on the Board of Directors is terminated other than for cause. The Company recognizes compensation expense for these restricted stock grants based on the estimated grant date fair value of the shares, amortized ratably over three years for employee awards (based on the required service period for vesting) and seven years for non-employee director awards (based on a market survey of the average tenure of directors among U.S. public companies). As of June 30, 2017, approximately 258,000 of these restricted stock grants have vested. Compensation costs recognized for these restricted stock grants were approximately $166,000 and $167,000 for the three months ended June 30, 2017 and 2016, respectively, and $354,000 and $368,000 for the six months ended June 30, 2017 and 2016, respectively. As of June 30, 2017, there was approximately $1.5 million of unrecognized compensation costs related to these restricted stock grants. This cost is expected to be recognized over the next 6.8 years. Performance Units During the six months ended June 30, 2017, approximately 60,000 shares of performance units were granted under the terms of the Carbon plans in addition to approximately 401,000 shares granted during previous years. The performance units represent a contractual right to receive one share of the Company’s common stock subject to the terms and conditions of the agreements including the achievement of certain performance measures relative to a defined peer group or the growth of certain performance measures over a defined period of time for the Company as well as the lapse of forfeiture restrictions pursuant to the terms and conditions of the agreements, including for certain of the grants, the requirement of continuous employment by the grantee prior to a change in control of the Company. Based on the relative achievement of performance, approximately 276,000 restricted performance units are outstanding as of June 30, 2017. The Company accounts for the performance units granted during 2012 and 2014 through 2017 at their fair value determined at the date of grant. The final measurement of compensation cost will be based on the number of performance units that ultimately vest. At June 30, 2017, the Company estimated that none of the performance units granted in 2012 and 2016 through 2017 would vest due to change in control and other performance provisions and accordingly, no compensation cost has been recorded for these performance units. At September 30, 2016, the Company estimated that it was probable that certain of the performance units granted in 2014 and 2015 would vest. Compensation costs of approximately $53,000 and $185,000 related to these performance units were recognized for the three and six months ended June 30, 2017, respectively. No compensation expense was recognized for these performance units for the three and six months ended June 30, 2016. As of June 30, 2017, if change in control and other performance provisions pursuant to the terms and conditions of these agreements are met in full, the estimated unrecognized compensation cost related to the performance units granted in 2012 and 2014 through 2017 would be approximately $2.5 million. The performance units granted in 2013 contain specific vesting provisions, no change in control provisions nor any performance conditions other than stock price performance. Due to different earning requirements compared to the performance units granted in 2012 and 2014 through 2017, the Company recognized compensation expense for the performance units granted in 2013 based on the grant date fair value of the performance units, amortized ratably over three years (the performance period). The fair value of the performance units granted in 2013 was estimated using a Monte Carlo simulation (“MCS”) valuation model using the following key assumptions: no expected dividends, volatility of our stock and those of defined peer companies used to determine our performance relative to the defined peer group, a risk-free interest rate and an expected life of three years. Compensation costs recognized for these performance unit grants were approximately $41,000 and $127,000 for the three and six months ended June 30, 2016, respectively. As of June 30, 2016, compensation costs relative to these performance units had been fully recognized. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 6 Months Ended |
Jun. 30, 2017 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Accounts Payable and Accrued Liabilities | Note 9 – Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities at June 30, 2017 and December 31, 2016 consist of the following: (in thousands) June 30, December 31, Accounts payable $ 1,809 $ 2,315 Oil and gas revenue payable to oil and gas property owners 1,770 1,415 Gathering and transportation payables 430 468 Production taxes payable 238 113 Drilling advances received from joint venture partner 778 955 Accrued drilling costs - 4 Accrued lease operating costs 272 282 Accrued ad valorem taxes 1,522 1,552 Accrued general and administrative expenses 864 1,572 Accrued interest 185 184 Other liabilities 342 261 Total accounts payable and accrued liabilities $ 8,210 $ 9,121 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 10 – Fair Value Measurements Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: Level 1: Quoted prices are available in active markets for identical assets or liabilities; Level 2: Quoted prices in active markets for similar assets or liabilities that are observable for the asset or liability; or Level 3: Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s policy is to recognize transfers in and/or out of the fair value hierarchy as of the end of the reporting period for which the event or change in circumstances caused the transfer. The Company has consistently applied the valuation techniques discussed below for all periods presented. Assets Measured and Recorded at Fair Value on a Recurring Basis The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2017 and December 31, 2016 by level within the fair value hierarchy: (in thousands) Fair Value Measurements Using Level 1 Level 2 Level 3 Total June 30, 2017 Assets: Commodity derivatives $ - $ 1,091 $ - $ 1,091 Liabilities: Warrant derivatives $ - $ - $ 5,410 $ 5,410 December 31, 2016 Liabilities: Commodity derivatives $ - $ 1,932 $ - $ 1,932 Level 2 Fair Value Measurements As of June 30, 2017, the Company’s commodity derivative financial instruments are comprised of eight natural gas and nine oil swap agreements. The fair values of these agreements are determined under an income valuation technique. The valuation requires a variety of inputs, including contractual terms, published forward prices, volatilities for options, and discount rates, as appropriate. The Company’s estimates of fair value of derivatives include consideration of the counterparty’s credit worthiness, the Company’s credit worthiness and the time value of money. The consideration of these factors resulted in an estimated exit-price for each derivative asset or liability under a market place participant’s view. All the significant inputs are observable, either directly or indirectly; therefore, the Company’s derivative instruments are included within the Level 2 fair value hierarchy. The counterparty for all the Company’s commodity financial instruments as of June 30, 2017 is BP Energy Company. Level 3 Fair Value Measurements A third-party valuation specialist is utilized to determine the fair value of the Company’s California Warrant and Appalachia Warrant. These warrants are designated as Level 3. The Company reviews these valuations, including the related model inputs and assumptions, and analyzes changes in fair value measurements between periods. The Company corroborates such inputs, calculations and fair value changes using various methodologies, and reviews unobservable inputs for reasonableness utilizing relevant information from other published sources. Due to the limited trading volume of the Company’s shares, adjustments are made to the per share value. The Company estimated the fair value of the California Warrant on February 15, 2017, the grant date of the warrant, to be approximately $5.8 million, using a call option pricing model with the following assumptions: a seven-year term, exercise price of $7.20, volatility rate of 41.8% and a risk-free rate of 2.3%. As the Company will receive Class A units in Carbon California in the event the holder exercises the California Warrant, the Company also considered the fair value of the Class A units in its valuation. The Company remeasured the California Warrant as of June 30, 2017, using the same call option pricing model, using the following assumptions: a term of 6.6 years, exercise price of $7.20, volatility rate of 44.5% and a risk-free rate of 2.0%. As of June 30, 2017, the fair value of the California Warrant was approximately $4.3 million. The Company estimated the fair value of the Appalachia Warrant on April 3, 2017, the grant date of the warrant, to be approximately $1.3 million, using a call option pricing model with the following assumptions: a seven-year term, exercise price of $7.20, volatility rate of 39.3% and a risk-free rate of 2.1%. As the Company will receive Class A units in Carbon Appalachia in the event the holder exercises the Appalachia Warrant, the Company also considered the fair value of the Class A units in its valuation. The Company remeasured the Appalachia Warrant as of June 30, 2017, using the same call option pricing model, using the following assumptions: a term of 6.8 years, exercise price of $7.20, volatility rate of 44.5% and a risk-free rate of 2.0%. As of June 30, 2017, the fair value of the Appalachia Warrant was approximately $1.1 million. Assets Measured and Recorded at Fair Value on a Non-Recurring Basis The fair value of the following liabilities measured and recorded at fair value on a non-recurring basis are based on unobservable pricing inputs and therefore, are included within the Level 3 fair value hierarchy. The Company uses the income valuation technique to estimate the fair value of asset retirement obligations using the amounts and timing of expected future dismantlement costs, credit-adjusted risk-free rates and time value of money. During the six months ended June 30, 2017 and 2016, the Company recorded additions to asset retirement obligations of approximately $5,000 in each period. See Note 2 for additional information. |
Physical Delivery Contracts and
Physical Delivery Contracts and Gas Derivatives | 6 Months Ended |
Jun. 30, 2017 | |
Physical Delivery Contracts and Gas Derivatives [Abstract] | |
Physical Delivery Contracts and Gas Derivatives | Note 11 – Physical Delivery Contracts and Gas Derivatives The Company has historically used commodity-based derivative contracts to manage exposures to commodity price on certain of its oil and natural gas production. The Company does not hold or issue derivative financial instruments for speculative or trading purposes. The Company also enters into, on occasion, oil and natural gas physical delivery contracts to effectively provide commodity price hedges. Because these contracts are not expected to be net cash settled, they are considered to be normal sales contracts and not derivatives. Therefore, these contracts are not recorded at fair value in the unaudited Consolidated Financial Statements. Pursuant to the terms of the Company’s credit facility with LegacyTexas Bank, the Company has entered into swap derivative agreements to hedge certain of its oil and natural gas production for 2017 through 2019. As of June 30, 2017, these derivative agreements consisted of the following: Natural Gas Oil Weighted Weighted Average Average Year MMBtu Price (a) Bbl Price (b) 2017 1,680,000 $ 3.30 35,000 $ 52.98 2018 3,120,000 $ 3.01 48,000 $ 54.11 2019 1,320,000 $ 2.85 36,000 $ 54.90 (a) NYMEX Henry Hub Natural Gas futures contract for the respective delivery month. (b) NYMEX Light Sweet Crude West Texas Intermediate futures contract for the respective delivery month For its swap instruments, the Company receives a fixed price for the hedged commodity and pays a floating price to the counterparty. The fixed-price payment and the floating-price payment are netted, resulting in a net amount due to or from the counterparty. The following table summarizes the fair value of the derivatives recorded in the unaudited Consolidated Balance Sheets. These derivative instruments are not designated as cash flow hedging instruments for accounting purposes: (in thousands) June 30, December 31, Commodity derivative contracts: Current assets $ 604 $ - Non-current assets $ 487 $ - Current liabilities $ - $ 1,341 Non-current liabilities $ - $ 591 The table below summarizes the commodity settlements and unrealized gains and losses related to the Company’s derivative instruments for the three and six months ended June 30, 2017 and 2016. These commodity derivative settlements and unrealized gains and losses are recorded and included in commodity derivative income or loss in the accompanying Consolidated Statements of Operations. (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Commodity derivative contracts: Settlement (losses) gains $ 142 $ 130 $ 118 $ 332 Unrealized gains (losses) 856 (904 ) 3,023 (966 ) Total settlement and unrealized gains (losses), net $ 998 $ (774 ) $ 3,141 $ (634 ) Commodity derivative settlement gains and losses are included in cash flows from operating activities in the Company’s unaudited Consolidated Statements of Cash Flows. The counterparty in all the Company’s derivative instruments is BP Energy Company. The Company has entered into an ISDA Master Agreement with BP Energy Company that establishes standard terms for the derivative contracts and an inter-creditor agreement with LegacyTexas Bank and BP Energy Company whereby any credit exposure related to the derivative contracts entered into by the Company and BP Energy Company is secured by the collateral and backed by the guarantees supporting the credit facility. The Company nets its derivative instrument fair value amounts executed with is its counterparty pursuant to an ISDA master agreement, which provides for the net settlement over the term of the contracts and in the event of default or termination of the contracts. The following table summarizes the location and fair value amounts of all derivative instruments in the unaudited Consolidated Balance Sheet, as well as the gross recognized derivative assets, liabilities and amounts offset in the unaudited Consolidated Balance Sheet as of June 30, 2017. Net Gross Recognized Recognized Gross Fair Value Assets/ Amounts Assets/ Balance Sheet Classification Liabilities Offset Liabilities Commodity derivative assets: Current assets $ 844 $ (240 ) $ 604 Other long-term assets 593 (106 ) 487 Total derivative assets $ 1,437 $ (346 ) $ 1,091 Commodity derivative liabilities: Current liability $ 240 $ (240 ) $ - Non-current liabilities 106 (106 ) - Total derivative liabilities $ 346 $ (346 ) $ - Due to the volatility of oil and natural gas prices, the estimated fair values of the Company’s derivatives are subject to large fluctuations from period to period. |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2017 | |
Commitments [Abstract] | |
Commitments | Note 12 – Commitments The Company has entered into employment agreements with certain executives and officers of the Company. The term of the agreements generally range from one to two years and provide for renewal provisions in one year increments thereafter. The agreements provide for, among other items, severance and continuation of benefit payments upon termination of employment or certain change of control events. The Company has entered into long-term firm transportation contracts to ensure the transport for certain of its gas production to purchasers. Firm transportation volumes and the related demand charges for the remaining term of these contracts at June 30, 2017 are summarized in the table below. Period Dekatherms per day Demand Charges Jul 2017 - Apr 2018 5,530 $0.20 - $0.65 May 2018 - May 2020 3,230 $0.20 - $0.62 Apr 2020 – May 2020 2,150 $ 0.20 Jun 2020 – May 2036 1,000 $ 0.20 A liability of approximately $541,000 related to firm transportation contracts assumed in asset acquisitions, which represents the remaining commitment, is reflected on the Company’s unaudited Consolidated Balance Sheet as of June 30, 2017. The fair value of these firm transportation obligations was determined based upon the contractual obligations assumed by the Company and discounted based upon the Company’s effective borrowing rate. These contractual obligations are being amortized on a monthly basis as the Company pays these firm transportation obligations. In its participation as a member of Carbon Appalachia, the Company has made a capital commitment of $2.0 million, of which it has contributed $240,000 as of June 30, 2017. |
Supplemental Cash Flow Disclosu
Supplemental Cash Flow Disclosure | 6 Months Ended |
Jun. 30, 2017 | |
Supplemental Cash Flow Disclosure [Abstract] | |
Supplemental Cash Flow Disclosure | Note 13 – Supplemental Cash Flow Disclosure Supplemental cash flow disclosures for the six months ended June 30, 2017 and 2016 are presented below: Six Months Ended June 30, (in thousands) 2017 2016 Cash paid during the period for: Interest $ 433 $ 110 Non-cash transactions: Increase in net asset retirement obligations $ 5 $ 5 Decrease in accounts payable and accrued liabilities included in oil and gas properties $ (79 ) $ (59 ) Issuance of warrants for investment in affiliates $ 7,094 $ - |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 – Subsequent Events In July 2017, the Company increased its outstanding borrowings under its credit facility with LegacyTexas Bank and contributed approximately $3.7 million to Carbon Appalachia. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited Consolidated Financial Statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly the Company’s financial position as of June 30, 2017 and the Company’s results of operations and cash flows for the three and six months ended June 30, 2017 and 2016. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the full year because of the impact of fluctuations in prices received for oil and natural gas, natural production declines, the uncertainty of exploration and development drilling results and other factors. For a more complete understanding of the Company’s operations, financial position and accounting policies, the unaudited Consolidated Financial Statements and the notes thereto should be read in conjunction with the Company’s audited Consolidated Financial Statements for the year ended December 31, 2016 filed on Form 10-K with the Securities and Exchange Commission (“SEC”). In the course of preparing the unaudited Consolidated Financial Statements, management makes various assumptions, judgments and estimates to determine the reported amount of assets, liabilities, revenue and expenses and in the disclosures of commitments and contingencies. Changes in these assumptions, judgments and estimates will occur as a result of the passage of time and the occurrence of future events and accordingly, actual results could differ from amounts initially established. |
Principles of Consolidation | Principles of Consolidation The Consolidated Financial Statements include the accounts of Carbon, CCOC, Nytis USA and its consolidated subsidiary, Nytis LLC. Carbon owns 100% of Nytis USA and CCOC. Nytis USA owns approximately 99% of Nytis LLC. Nytis LLC also holds an interest in various oil and gas partnerships. For partnerships where the Company has a controlling interest, the partnerships are consolidated. The Company is currently consolidating on a pro-rata basis 46 partnerships. In these instances, the Company reflects the non-controlling ownership interest in partnerships and subsidiaries as non-controlling interests on its Consolidated Statements of Operations and reflects the non-controlling ownership interests in the net assets of the partnerships as non-controlling interests within stockholders’ equity on its Consolidated Balance Sheets. All significant intercompany accounts and transactions have been eliminated. In accordance with established practice in the oil and gas industry, the Company’s unaudited Consolidated Financial Statements also include its pro-rata share of assets, liabilities, income, lease operating costs and general and administrative expenses of the oil and gas partnerships in which the Company has a non-controlling interest. Non-majority owned investments that do not meet the criteria for pro-rata consolidation are accounted for using the equity method when the Company has the ability to significantly influence the operating decisions of the investee. When the Company does not have the ability to significantly influence the operating decisions of an investee, the cost method is used. All transactions, if any, with investees have been eliminated in the accompanying Consolidated Financial Statements. |
Accounting for Oil and Gas Operations | Accounting for Oil and Gas Operations The Company uses the full cost method of accounting for oil and gas properties. Accordingly, all costs incidental to the acquisition, exploration and development of oil and gas properties, including costs of undeveloped leasehold, dry holes and leasehold equipment, are capitalized. Overhead costs incurred that are directly identified with acquisition, exploration and development activities undertaken by the Company for its own account, and which are not related to production, general corporate overhead or similar activities, are also capitalized. Unproved properties are excluded from amortized capitalized costs until it is determined if proved reserves can be assigned to such properties. The Company assesses its unproved properties for impairment at least annually. Significant unproved properties are assessed individually. Capitalized costs are depleted by an equivalent unit-of-production method, converting oil to gas at the ratio of one barrel of oil to six thousand cubic feet of natural gas. Depletion is calculated using capitalized costs, including estimated asset retirement costs, plus the estimated future expenditures (based on current costs) to be incurred in developing proved reserves, net of estimated salvage values. No gain or loss is recognized upon disposal of oil and gas properties unless such disposal significantly alters the relationship between capitalized costs and proved reserves. All costs related to production activities, including work-over costs incurred solely to maintain or increase levels of production from an existing completion interval, are charged to expense as incurred. The Company performs a ceiling test quarterly. The full cost ceiling test is a limitation on capitalized costs prescribed by SEC Regulation S-X Rule 4-10. The ceiling test is not a fair value based measurement, rather it is a standardized mathematical calculation. The ceiling test provides that capitalized costs less related accumulated depletion and deferred income taxes may not exceed the sum of (1) the present value of future net revenue from estimated production of proved oil and gas reserves using the un-weighted arithmetic average of the first-day-of-the month price for the previous twelve month period, excluding the future cash outflows associated with settling asset retirement obligations that have been accrued on the balance sheet, at a discount factor of 10%; plus (2) the cost of properties not being amortized, if any; plus (3) the lower of cost or estimated fair value of unproved properties included in the costs being amortized, if any; less (4) income tax effects related to differences in the book and tax basis of oil and gas properties. Should the net capitalized costs exceed the sum of the components noted above, a ceiling test write-down would be recognized to the extent of the excess capitalized costs. Such impairments are permanent and cannot be recovered in future periods even if the sum of the components noted above exceeds the capitalized costs in future periods. For the three and six months ended June 30, 2017, the Company did not recognize a ceiling test impairment as the Company’s full cost pool did not exceed the ceiling limitation. For the three and six months ended June 30, 2016, the Company recognized a ceiling test impairment of approximately $409,000 and $4.3 million, respectively, as the Company’s full cost pool exceeded its ceiling limitations. Future declines in oil and natural gas prices, and increases in future operating expenses and future development costs could result in additional impairments of our oil and gas properties in future periods. Impairment charges are a non-cash charge and accordingly, do not affect cash flow, but adversely affect our net income and stockholders’ equity. |
Investments in Affiliates | Investments in Affiliates Investments in non-consolidated affiliates are accounted for under either the cost or equity method of accounting, as appropriate. The cost method of accounting is generally used for investments in affiliates in which the Company has less than 20% of the voting interests of a corporate affiliate or less than a 3% to 5% interest of a partnership or limited liability company and does not have significant influence. Investments in non-consolidated affiliates, accounted for using the cost method of accounting, are recorded at cost and impairment assessments for each investment are made annually to determine if a decline in the fair value of the investment, other than temporary, has occurred. A permanent impairment is recognized if a decline in the fair value occurs. If the Company holds between 20% and 50% of the voting interest in non-consolidated corporate affiliates or generally greater than a 3% to 5% interest of a partnership or limited liability company and exerts significant influence or control (e.g., through its influence with a seat on the board of directors or management of operations), the equity method of accounting is generally used to account for the investment. The Company’s investment in affiliates that is accounted for using the equity method of accounting, increases or decreases by the Company’s share of the affiliate’s profits or losses and such profits or losses are recognized in the Company’s Consolidated Statements of Operations. For its equity method investments in Carbon Appalachia and Carbon California, the Company uses the hypothetical liquidation at book value method to recognize its share of the affiliate’s profits or losses. The Company reviews equity method investments for impairment whenever events or changes in circumstances indicate that an other than temporary decline in value has occurred. |
Related Party Transactions | Related Party Transactions On February 15, 2017, the Company entered into a limited liability company agreement of Carbon California. Pursuant to the limited liability agreement, Carbon California reimbursed the Company for (i) due diligence costs incurred on behalf of Carbon California, (ii) transaction-related costs and (iii) $225,000 for the period February 15, 2017 through June 30, 2017, in connection with its role as manager of Carbon California. See Note 5 for additional information. On April 3, 2017, the Company entered into the limited liability company agreement of Carbon Appalachia. Pursuant to the limited liability agreement, Carbon Appalachia reimbursed the Company for (i) due diligence costs incurred on behalf of Carbon Appalachia, (ii) transaction-related costs and (iii) $75,000 for the period April 3, 2017 through June 30, 2017, in connection with its role as manager of Carbon Appalachia. See Note 5 for additional information. |
Warrant Derivative Liability | Warrant Derivative Liability The Company issued warrants related to its investments in Carbon California and Carbon Appalachia. The Company accounts for these warrants in accordance with guidance contained in ASC 815, Derivatives and Hedging |
Asset Retirement Obligations | Asset Retirement Obligations The Company’s asset retirement obligations (“ARO”) relate to future costs associated with the plugging and abandonment of oil and gas wells, removal of equipment and facilities from leased acreage and returning such land to its original condition. The fair value of a liability for an ARO is recorded in the period in which it is incurred and the cost of such liability is recorded as an increase in the carrying amount of the related long-lived asset by the same amount. The liability is accreted each period and the capitalized cost is depleted on a units-of-production basis as part of the full cost pool. Revisions to estimated AROs result in adjustments to the related capitalized asset and corresponding liability. The estimated ARO liability is based on estimated economic lives, estimates as to the cost to abandon the wells in the future, and federal and state regulatory requirements. The liability is discounted using a credit-adjusted risk-free rate estimated at the time the liability is incurred or increased as a result of a reassessment of expected cash flows and assumptions inherent in the estimation of the liability. Upward revisions to the liability could occur due to changes in estimated abandonment costs or well economic lives, or if federal or state regulators enact new requirements regarding the abandonment of wells. AROs are valued utilizing Level 3 fair value measurement inputs. The following table is a reconciliation of the ARO for the six months ended June 30, 2017 and 2016: (in thousands) Six Months Ended June 30, 2017 2016 Balance at beginning of period $ 5,120 $ 3,095 Accretion expense 155 70 Additions during period 5 5 5,280 3,170 Less: ARO recognized as a current liability (183 ) - Balance at end of period $ 5,097 $ 3,170 |
Earnings (Loss) Per Common Share | Earnings (Loss) Per Common Share Basic earnings or loss per common share is computed by dividing the net income or loss attributable to common shareholders for the period by the weighted average number of common shares outstanding during the period. The shares of restricted common stock granted to certain officers, directors and employees of the Company are included in the computation of basic net income or loss per share only after the shares become fully vested. Diluted earnings per common share includes both the vested and unvested shares of restricted stock and the potential dilution that could occur upon exercise of warrants to acquire common stock, computed using the treasury stock method, which assumes that the increase in the number of shares is reduced by the number of shares which could have been repurchased by the Company with the proceeds from the exercise of warrants (which were assumed to have been made at the average market price of the common shares during the reporting period). The following table sets forth the calculation of basic and diluted income (loss) per share: in thousands except per share amounts Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Basic Earnings (Loss) per Share Net income (loss) available to common shareholders, basic $ 2,004 $ (2,518 ) $ 5,296 $ (7,445 ) Weighted average shares outstanding, basic 5,620 5,498 5,554 5,429 Net income (loss) per common share, basic $ 0.36 $ (0.46 ) $ 0.95 (1.37 ) Diluted Earnings (Loss) per Share Net income (loss) available to common shareholders, basic $ 2,004 $ (2,518 ) $ 5,296 $ (7,445 ) Less: decrease in fair value of warrant (853 ) - (1,684 ) - Adjusted net income (loss) available to common shareholders, diluted $ 1,151 $ (2,518 ) $ 3,612 $ (7,445 ) Weighted average shares outstanding, basic 5,620 5,498 5,554 5,429 Add: dilutive effects of warrant and nonvested shares of restricted stock 968 - 904 - Weighted-average shares outstanding, diluted 6,588 5,498 6,458 5,429 Net income (loss) per common share, diluted $ 0.17 $ (0.46 ) $ 0.56 $ (1.37 ) For the three months ended June 30, 2017, the Company had net income and the diluted net income per share calculation for that period includes the dilutive effect of approximately 284,000 non-vested shares of restricted stock and approximately 684,000 in-the-money warrants. In addition, approximately 13,000 out-of-the-money warrants and approximately 276,000 restricted performance units, subject to future contingencies, are excluded from the basic and diluted loss per share calculations. For the six months ended June 30, 2017, the Company had net income and the diluted net income per share calculation for that period includes the dilutive effect of approximately 284,000 non-vested shares of restricted stock and approximately 620,000 in-the-money warrants. In addition, approximately 13,000 out-of-the-money warrants and approximately 276,000 restricted performance units, subject to future contingencies, are excluded from the basic and diluted loss per share calculations. For the three and six months ended June 30, 2016, the Company had a net loss and therefore, the diluted net loss per share calculation excluded the anti-dilutive effect of approximately 13,000 warrants and approximately 246,000 non-vested shares of restricted stock in each period. In addition, approximately 298,000 restricted performance units, in each period, subject to future contingencies were excluded from the basic and diluted loss per share calculations. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and disclosure of contingent assets and liabilities. Significant items subject to such estimates and assumptions include the carrying value of oil and gas properties, the estimate of proved oil and gas reserve volumes and the related depletion and present value of estimated future net cash flows and the ceiling test applied to capitalized oil and gas properties, determining the amounts recorded for deferred income taxes, stock-based compensation, fair value of commodity derivative instruments, fair value of warrants, equity method investments, fair value of assets acquired qualifying as business contributions and asset retirement obligations. Actual results could differ from those estimates and assumptions used, and the use of such estimates may result in volatility within the Company’s financial statements. |
Adopted and Recently Issued Accounting Pronouncements | Adopted and Recently Issued Accounting Pronouncements In February 2016, the FASB issued Accounting Standard Update (“ASU”) No. 2016-02, Leases In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business, |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of reconciliation of the ARO | (in thousands) Six Months Ended June 30, 2017 2016 Balance at beginning of period $ 5,120 $ 3,095 Accretion expense 155 70 Additions during period 5 5 5,280 3,170 Less: ARO recognized as a current liability (183 ) - Balance at end of period $ 5,097 $ 3,170 |
Schedule of basic and diluted income (loss) per share | in thousands except per share amounts Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Basic Earnings (Loss) per Share Net income (loss) available to common shareholders, basic $ 2,004 $ (2,518 ) $ 5,296 $ (7,445 ) Weighted average shares outstanding, basic 5,620 5,498 5,554 5,429 Net income (loss) per common share, basic $ 0.36 $ (0.46 ) $ 0.95 (1.37 ) Diluted Earnings (Loss) per Share Net income (loss) available to common shareholders, basic $ 2,004 $ (2,518 ) $ 5,296 $ (7,445 ) Less: decrease in fair value of warrant (853 ) - (1,684 ) - Adjusted net income (loss) available to common shareholders, diluted $ 1,151 $ (2,518 ) $ 3,612 $ (7,445 ) Weighted average shares outstanding, basic 5,620 5,498 5,554 5,429 Add: dilutive effects of warrant and nonvested shares of restricted stock 968 - 904 - Weighted-average shares outstanding, diluted 6,588 5,498 6,458 5,429 Net income (loss) per common share, diluted $ 0.17 $ (0.46 ) $ 0.56 $ (1.37 ) |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Acquisitions and Divestitures [Abstract] | |
Schedule on EXCO acquisition unaudited Pro Forma results of operations | Unaudited Pro Forma Consolidated Results For Six Months Ended (in thousands, except per share amounts) 2017 2016 Revenue $ 13,370 $ 6,348 Net income (loss) before non-controlling interests 5,372 (3,560 ) Net income (loss) attributable to non-controlling interests 76 (432 ) Net income (loss) attributable to controlling interests 5,296 (3,128 ) Net income (loss) income per share (basic) 0.95 (0.58 ) Net income (loss) income per share (diluted) 0.82 (0.58 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property and Equipment [Abstract] | |
Summary of net property and equipment | (in thousands) June 30, December 31, 2016 Oil and gas properties: Proved oil and gas properties $ 112,273 $ 111,771 Unproved properties not subject to depletion 1,917 1,999 Accumulated depreciation, depletion, amortization and impairment (79,630 ) (78,559 ) Net oil and gas properties 34,560 35,211 Furniture and fixtures, computer hardware and software, and other equipment 1,563 990 Accumulated depreciation and amortization (797 ) (665 ) Net other property and equipment 766 325 Total net property and equipment $ 35,326 $ 35,536 |
Accounts Payable and Accrued 25
Accounts Payable and Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Summary of accounts payable and accrued liabilities | (in thousands) June 30, December 31, Accounts payable $ 1,809 $ 2,315 Oil and gas revenue payable to oil and gas property owners 1,770 1,415 Gathering and transportation payables 430 468 Production taxes payable 238 113 Drilling advances received from joint venture partner 778 955 Accrued drilling costs - 4 Accrued lease operating costs 272 282 Accrued ad valorem taxes 1,522 1,552 Accrued general and administrative expenses 864 1,572 Accrued interest 185 184 Other liabilities 342 261 Total accounts payable and accrued liabilities $ 8,210 $ 9,121 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Measurements [Abstract] | |
Summary of financial assets and liabilities at fair value | (in thousands) Fair Value Measurements Using Level 1 Level 2 Level 3 Total June 30, 2017 Assets: Commodity derivatives $ - $ 1,091 $ - $ 1,091 Liabilities: Warrant derivatives $ - $ - $ 5,410 $ 5,410 December 31, 2016 Liabilities: Commodity derivatives $ - $ 1,932 $ - $ 1,932 |
Physical Delivery Contracts a27
Physical Delivery Contracts and Gas Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Physical Delivery Contracts and Gas Derivatives [Abstract] | |
Schedule of swap derivative agreements | Natural Gas Oil Weighted Weighted Average Average Year MMBtu Price (a) Bbl Price (b) 2017 1,680,000 $ 3.30 35,000 $ 52.98 2018 3,120,000 $ 3.01 48,000 $ 54.11 2019 1,320,000 $ 2.85 36,000 $ 54.90 (a) NYMEX Henry Hub Natural Gas futures contract for the respective delivery month. (b) NYMEX Light Sweet Crude West Texas Intermediate futures contract for the respective delivery month |
Schedule of fair value of the derivatives recorded | (in thousands) June 30, December 31, Commodity derivative contracts: Current assets $ 604 $ - Non-current assets $ 487 $ - Current liabilities $ - $ 1,341 Non-current liabilities $ - $ 591 |
Schedule of realized and unrealized gains and losses | (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Commodity derivative contracts: Settlement (losses) gains $ 142 $ 130 $ 118 $ 332 Unrealized gains (losses) 856 (904 ) 3,023 (966 ) Total settlement and unrealized gains (losses), net $ 998 $ (774 ) $ 3,141 $ (634 ) |
Schedule of fair value amounts of all derivative instruments assets and liabilities | Net Gross Recognized Recognized Gross Fair Value Assets/ Amounts Assets/ Balance Sheet Classification Liabilities Offset Liabilities Commodity derivative assets: Current assets $ 844 $ (240 ) $ 604 Other long-term assets 593 (106 ) 487 Total derivative assets $ 1,437 $ (346 ) $ 1,091 Commodity derivative liabilities: Current liability $ 240 $ (240 ) $ - Non-current liabilities 106 (106 ) - Total derivative liabilities $ 346 $ (346 ) $ - |
Commitments (Tables)
Commitments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Commitments [Abstract] | |
Summary of firm transportation volumes and related demand charges | Period Dekatherms per day Demand Charges Jul 2017 - Apr 2018 5,530 $0.20 - $0.65 May 2018 - May 2020 3,230 $0.20 - $0.62 Apr 2020 – May 2020 2,150 $ 0.20 Jun 2020 – May 2036 1,000 $ 0.20 |
Supplemental Cash Flow Disclo29
Supplemental Cash Flow Disclosure (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Supplemental Cash Flow Disclosure [Abstract] | |
Summary of supplemental cash flow disclosures | Six Months Ended June 30, (in thousands) 2017 2016 Cash paid during the period for: Interest $ 433 $ 110 Non-cash transactions: Increase in net asset retirement obligations $ 5 $ 5 Decrease in accounts payable and accrued liabilities included in oil and gas properties $ (79 ) $ (59 ) Issuance of warrants for investment in affiliates $ 7,094 $ - |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Summary of reconciliation of the ARO | ||
Balance at beginning of period | $ 5,120 | $ 3,095 |
Accretion expense | 155 | 70 |
Additions during period | 5 | 5 |
Reconciliation of the ARO, gross | 5,280 | 3,170 |
Less: ARO recognized as a current liability | (183) | |
Balance at end of period | $ 5,097 | $ 3,170 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details 1) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Basic Earnings (Loss) per Share | ||||
Net income (loss) available to common shareholders, basic | $ 2,004 | $ (2,518) | $ 5,296 | $ (7,445) |
Weighted average shares outstanding, basic | 5,620 | 5,498 | 5,554 | 5,429 |
Net income (loss) per common share, basic | $ 0.36 | $ (0.46) | $ 0.95 | $ (1.37) |
Diluted Earnings (Loss) per Share | ||||
Net income (loss) available to common shareholders, basic | $ 2,004 | $ (2,518) | $ 5,296 | $ (7,445) |
Less: decrease in fair value of warrant | (853) | (1,684) | ||
Adjusted net income (loss) available to common shareholders, diluted | $ 1,151 | $ (2,518) | $ 3,612 | $ (7,445) |
Weighted average shares outstanding, basic | 5,620 | 5,498 | 5,554 | 5,429 |
Add: dilutive effects of warrant and nonvested shares of restricted stock | 968 | 5,498 | 904 | |
Weighted-average shares outstanding, diluted | 6,588 | 5,498 | 6,458 | 5,429 |
Net income (loss) per common share, diluted | $ 0.17 | $ (0.46) | $ 0.56 | $ (1.37) |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Details Textual) | Apr. 03, 2017 | Feb. 15, 2017 | Jun. 30, 2017USD ($)shares | Jun. 30, 2016USD ($)shares | Jun. 30, 2017USD ($)Partnershipshares | Jun. 30, 2016USD ($)shares |
Summary of Significant Accounting Policies (Textual) | ||||||
Ceiling test impairment cost | $ | $ 409,000 | $ 4,300,000 | ||||
Number of consolidated partnerships | Partnership | 46 | |||||
Cost method investments, additional information | The Company has less than 20% of the voting interests of a corporate affiliate or less than a 3% to 5% interest of a partnership or limited liability company and does not have significant influence. | |||||
Equity method investment, additional information | If the Company holds between 20% and 50% of the voting interest in non-consolidated corporate affiliates or greater than a 3% to 5% interest of a partnership or limited liability company and exercises significant influence or control, the equity method of accounting is used to account for the investment. | |||||
Liability agreement reimbursed, description | The Company for (i) due diligence costs incurred on behalf of Carbon Appalachia, (ii) transaction-related costs and (iii) $75,000 for the period April 3, 2017 through June 30, 2017, in connection with its role as manager of Carbon Appalachia. | The Company for (i) due diligence costs incurred on behalf of Carbon California, (ii) transaction-related costs and (iii) $225,000 for the period February 15, 2017 through June 30, 2017, in connection with its role as manager of Carbon California. See Note 5 for additional information. | ||||
Changes in fair value of warrants | $ | $ 853,000 | $ 1.7 | ||||
Warrant [Member] | ||||||
Summary of Significant Accounting Policies (Textual) | ||||||
Anti-dilutive earnings per shares | 13,000 | |||||
Non-vested shares of restricted stock | 684,000 | |||||
Restricted Stock [Member] | ||||||
Summary of Significant Accounting Policies (Textual) | ||||||
Anti-dilutive earnings per shares | 284,000 | 13,000 | 284,000 | 284,000 | ||
Non-vested shares of restricted stock | 620,000 | 246,000,000,000 | 620,000 | |||
Restricted Performance Units [Member] | ||||||
Summary of Significant Accounting Policies (Textual) | ||||||
Anti-dilutive earnings per shares | 13,000 | 298,000 | 13,000 | |||
Common stock equivalent restricted to future contingencies | 276,000 | 276,000 | 276,000 | |||
Nytis LLC [Member] | ||||||
Summary of Significant Accounting Policies (Textual) | ||||||
Percentage of ownership interest in the subsidiary | 99.00% | |||||
Nytis USA [Member] | ||||||
Summary of Significant Accounting Policies (Textual) | ||||||
Percentage of ownership interest in the subsidiary | 100.00% |
Acquisitions and Divestitures33
Acquisitions and Divestitures (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Acquisitions and Divestitures [Abstract] | ||||
Revenue | $ 13,370 | $ 6,348 | ||
Net income (loss) before non-controlling interests | 5,372 | (3,560) | ||
Net income (loss) attributable to non-controlling interests | $ 33 | $ (116) | 76 | (432) |
Net income (loss) attributable to controlling interests | $ 5,296 | $ (3,128) | ||
Net income (loss) income per share (basic) | $ 0.95 | $ (0.58) | ||
Net income (loss) income per share (diluted) | $ 0.82 | $ (0.58) |
Acquisitions and Divestitures34
Acquisitions and Divestitures (Details Textual) $ in Millions | Oct. 01, 2016USD ($) |
Purchase Agreement [Member] | |
Acquisitions and Divestitures (Textual) | |
Purchase price of acquired assets | $ 9 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Oil and gas properties: | ||
Accumulated depreciation, depletion, amortization and impairment | $ (79,630) | $ (78,559) |
Net oil and gas properties | 34,560 | 35,211 |
Furniture and fixtures, computer hardware and software, and other equipment | 1,563 | 990 |
Accumulated depreciation and amortization | (797) | (665) |
Net other property and equipment | 766 | 325 |
Total net property and equipment | 35,326 | 35,536 |
Proved oil and gas properties [Member] | ||
Oil and gas properties: | ||
Oil and gas properties | 112,273 | 111,771 |
Unproved properties not subject to depletion [Member] | ||
Oil and gas properties: | ||
Oil and gas properties | $ 1,917 | $ 1,999 |
Property and Equipment (Detai36
Property and Equipment (Details Textual) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017USD ($)Per_Mcfe | Jun. 30, 2016USD ($)Per_Mcfe | Jun. 30, 2017USD ($)Per_Mcfe | Jun. 30, 2016USD ($)Per_Mcfe | Dec. 31, 2016USD ($) | |
Property and Equipment (Textual) | |||||
Capitalized general and administrative expenses | $ 131,000 | $ 289,000 | |||
Depletion expense related to oil and gas properties | $ 539,000 | $ 407,000 | $ 1,100,000 | $ 879,000 | |
Depletion expense related to oil and gas properties (in dollars per Mcfe) | Per_Mcfe | 0.40 | 0.65 | 0.41 | 0.72 | |
Depreciation and amortization expense | $ 123,000 | $ 29,000 | $ 163,000 | $ 59,000 | |
Amortized capital cost, description | Within five years. | ||||
Unproved properties not subject to depletion [Member] | |||||
Property and Equipment (Textual) | |||||
Depletion expense related to unproved oil and gas properties | $ 1,900,000 | $ 2,000,000 |
Investments in Affiliates (Deta
Investments in Affiliates (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Feb. 15, 2017 | Jun. 30, 2017USD ($)$ / shares | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2016USD ($) | Apr. 03, 2017USD ($)Well | |
Investments in Affiliates (Textual) | |||||||
Ownership interest percentage | 50.00% | 50.00% | |||||
Equity investment income (loss) | $ (7,000) | $ (6,000) | $ (6,000) | ||||
Received cash distributions | $ 275,000 | ||||||
Fair value of warrant | (853,000) | (1,684,000) | |||||
Percentage of interest | 75.00% | ||||||
Other income | $ 10,000 | $ 20,000 | $ 1,000 | ||||
Drilling [Member] | |||||||
Investments in Affiliates (Textual) | |||||||
Percentage of interest | 100.00% | ||||||
California Warrant [Member] | |||||||
Investments in Affiliates (Textual) | |||||||
Acquired interest | 17.80% | ||||||
Business acquisitions description | Carbon California (i) issued and sold Class A Units to two institutional investors for an aggregate cash consideration of $22.0 million, (ii) entered into a Note Purchase Agreement (the “Note Purchase Agreement” “Senior Revolving Notes” Securities Purchase Agreement” “Subordinated Notes” | ||||||
Warrant to purchase common stock | shares | 1,500,000 | ||||||
Warrant exercise price | $ / shares | $ 7.20 | $ 7.20 | |||||
Estimated fair market value of warrant | $ 4,300,000 | $ 4,300,000 | |||||
Fair value of warrant | 1,500,000 | ||||||
Percentage of interest | 17.80% | ||||||
Other income | 680,000 | $ 1,500,000 | |||||
Carbon Appalachia [Member] | |||||||
Investments in Affiliates (Textual) | |||||||
Equity investment income (loss) | $ 7,000 | ||||||
Acquired interest | 2.00% | ||||||
Senior secured asset | $ 2,000,000 | ||||||
Warrant to purchase common stock | shares | 408,000 | ||||||
Warrant exercise price | $ / shares | $ 7.20 | $ 7.20 | |||||
Estimated fair market value of warrant | $ 1,300,000 | $ 1,300,000 | |||||
Fair value of warrant | 174,000 | ||||||
Equity commitment | $ 12 | $ 12 | $ 100,000,000 | ||||
Number of wells | Well | 20 | ||||||
Percentage of interest | 10.00% | 10.00% | 20.00% | ||||
Credit facility purchase price | $ 8,500,000 | ||||||
Initial borrowing | $ 10,000,000 | ||||||
Carbon Appalachia [Member] | Class B Units [Member] | |||||||
Investments in Affiliates (Textual) | |||||||
Ownership interest percentage | 20.00% | ||||||
Carbon Appalachia [Member] | Class C Units [Member] | |||||||
Investments in Affiliates (Textual) | |||||||
Ownership interest percentage | 3.00% | 3.00% | 1.00% | ||||
Carbon Appalachia [Member] | Class A Units [Member] | |||||||
Investments in Affiliates (Textual) | |||||||
Ownership interest percentage | 3.00% | 3.00% | |||||
Equity commitment | $ 240,000 | $ 240,000 | |||||
Nytis LLC [Member] | |||||||
Investments in Affiliates (Textual) | |||||||
Percentage of interest | 25.00% | ||||||
Warrant [Member] | |||||||
Investments in Affiliates (Textual) | |||||||
Estimated fair market value of warrant | 5,800,000 | 5,800,000 | |||||
Warrant [Member] | Carbon Appalachia [Member] | |||||||
Investments in Affiliates (Textual) | |||||||
Estimated fair market value of warrant | $ 1,100,000 | $ 1,100,000 |
Bank Credit Facility (Details)
Bank Credit Facility (Details) | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2017 | Jun. 30, 2017USD ($) | Mar. 30, 2017USD ($) | |
Bank Credit Facility (Textual) | |||
Outstanding borrowings | $ 15,500,000 | ||
Additional borrowing capacity available | $ 7,500,000 | ||
Effective borrowing rate (as a percent) | 5.40% | ||
Line of Credit [Member] | |||
Bank Credit Facility (Textual) | |||
Revolving credit facility, description | In 2016, Carbon entered into a 4-year $100.0 million senior secured asset-based revolving credit facility with LegacyTexas Bank. LegacyTexas Bank is the initial lender and acts as administrative agent. | ||
Line of credit facility maximum borrowing capacity | $ 100,000,000 | $ 23,000,000 | |
Submit letters of credit | 500,000 | ||
Initial borrowing | $ 17,000,000 | ||
Variable interest rate basis | (i) the base rate plus an applicable margin between 0.50% and 1.50% or (ii) the Adjusted LIBOR rate plus an applicable margin between 3.50% and 4.50% at Carbon's option. The actual margin percentage is dependent on the credit facility utilization percentage. Carbon is obligated to pay certain fees and expenses in connection with the credit facility, including a commitment fee for any unused amounts of 0.50%. | ||
Percentage of commitment fee | 0.50% | ||
Line of Credit [Member] | Minimum [Member] | |||
Bank Credit Facility (Textual) | |||
LIBOR rate percentage | 0.50% | ||
Funded debt ratio required to be maintained | 1 | ||
Current ratio required to be maintained | 1 | ||
Line of Credit [Member] | Maximum [Member] | |||
Bank Credit Facility (Textual) | |||
LIBOR rate percentage | 1.50% | ||
Funded debt ratio required to be maintained | 3.5 | ||
Current ratio required to be maintained | 1 | ||
Line of Credit [Member] | LIBOR [Member] | Minimum [Member] | |||
Bank Credit Facility (Textual) | |||
LIBOR rate percentage | 3.50% | ||
Line of Credit [Member] | LIBOR [Member] | Maximum [Member] | |||
Bank Credit Facility (Textual) | |||
LIBOR rate percentage | 4.50% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Mar. 15, 2017 | Jun. 30, 2013 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2012 |
Stockholders' Equity (Textual) | |||||||||
Reverse stock split, description | Reverse stock split approved by the shareholders and Board of Directors, each 20 shares of issued and outstanding common stock became one share of common stock and no fractional shares were issued. | ||||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Common stock, shares issued | 5,627,589 | 5,627,589 | 5,482,673 | ||||||
Common stock, shares outstanding | 5,627,589 | 5,627,589 | 5,482,673 | ||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | ||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Preferred stock, shares issued | |||||||||
Preferred stock, shares outstanding | |||||||||
Warrants outstanding and exercisable | $ 13,000 | $ 13,000 | |||||||
Compensation expense for restricted stock grants | $ 84,000 | $ 168,000 | |||||||
Restricted stock grants | 81,000 | ||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||
Stockholders' Equity (Textual) | |||||||||
Compensation expense for restricted stock grants | 166,000 | 167,000 | $ 354,000 | 368,000 | |||||
Expected period of recognition of unrecognized compensation costs | 6 years 9 months 18 days | ||||||||
Restricted Stock [Member] | |||||||||
Stockholders' Equity (Textual) | |||||||||
Restricted stock grants | 258,000 | ||||||||
Unrecognized compensation cost | $ 1,500,000 | $ 1,500,000 | |||||||
Restricted stock awards vest period | 3 years | ||||||||
Restricted Stock [Member] | Officer [Member] | |||||||||
Stockholders' Equity (Textual) | |||||||||
Stock incentive plan, common stock shares authorized | 1,100,000 | 1,100,000 | |||||||
Restricted Performance Units [Member] | |||||||||
Stockholders' Equity (Textual) | |||||||||
Compensation expense for restricted stock grants | $ 127,000 | ||||||||
Restricted stock grants | 60,000 | 401,000 | |||||||
Unrecognized compensation cost | $ 2,500,000 | $ 2,500,000 | $ 2,500,000 | ||||||
Number of shares outstanding | 276,000 | 276,000 | |||||||
Compensation cost recognized | $ 53,000 | $ 41,000 | $ 185,000 | ||||||
Expected term | 3 years | ||||||||
Nytis USA Restricted Stock Plan [Member] | |||||||||
Stockholders' Equity (Textual) | |||||||||
Vesting terms of restricted stock | The vesting terms of these restricted stock grants were modified so that 25% of the shares would vest on the first of January from 2014 through 2017. | ||||||||
Vesting, percentage | 25.00% | ||||||||
Carbon Stock Incentive Plans [Member] | |||||||||
Stockholders' Equity (Textual) | |||||||||
Restricted stock grants | 462,000 |
Accounts Payable and Accrued 40
Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts payable | $ 1,809 | $ 2,315 |
Oil and gas revenue payable to oil and gas property owners | 1,770 | 1,415 |
Gathering and transportation payables | 430 | 468 |
Production taxes payable | 238 | 113 |
Drilling advances received from joint venture partner | 778 | 955 |
Accrued drilling costs | 4 | |
Accrued lease operating costs | 272 | 282 |
Accrued ad valorem taxes | 1,522 | 1,552 |
Accrued general and administrative expenses | 864 | 1,572 |
Accrued interest | 185 | 184 |
Other liabilities | 342 | 261 |
Total accounts payable and accrued liabilities | $ 8,210 | $ 9,121 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Commodity derivatives | $ 1,091 | |
Liabilities: | ||
Commodity derivatives | $ 1,932 | |
Warrant derivatives | 5,410 | |
Recurring basis [Member] | Level 1 [Member] | ||
Assets: | ||
Commodity derivatives | ||
Liabilities: | ||
Commodity derivatives | ||
Warrant derivatives | ||
Recurring basis [Member] | Level 2 [Member] | ||
Assets: | ||
Commodity derivatives | 1,091 | |
Liabilities: | ||
Commodity derivatives | 1,932 | |
Warrant derivatives | ||
Recurring basis [Member] | Level 3 [Member] | ||
Assets: | ||
Commodity derivatives | ||
Liabilities: | ||
Commodity derivatives | ||
Warrant derivatives | $ 5,410 |
Fair Value Measurements (Deta42
Fair Value Measurements (Details Textual) - USD ($) | Apr. 03, 2017 | Feb. 15, 2017 | Jun. 30, 2017 | Jun. 30, 2016 |
Fair Value Measurements (Textual) | ||||
Asset retirement obligation | $ 5,000 | $ 5,000 | ||
Carbon Appalachia [Member] | Level 3 [Member] | ||||
Fair Value Measurements (Textual) | ||||
Fair value of warrant | $ 1,300,000 | $ 1,100,000 | ||
Exercise price | $ 7.20 | $ 7.20 | ||
Volatility rate | 39.30% | 44.50% | ||
Risk free rate | 2.10% | 2.00% | ||
Term | 7 years | 6 years 9 months 18 days | ||
California Warrant [Member] | Level 3 [Member] | ||||
Fair Value Measurements (Textual) | ||||
Fair value of warrant | $ 5,800,000 | $ 4,300,000 | ||
Exercise price | $ 7.20 | $ 7.20 | ||
Volatility rate | 41.80% | 44.50% | ||
Risk free rate | 2.30% | 2.00% | ||
Term | 7 years | 6 years 7 months 6 days |
Physical Delivery Contracts a43
Physical Delivery Contracts and Gas Derivatives (Details) | Jun. 30, 2017USD_MMBtuUSD_Bbl$ / shares | |
2017 [Member] | Natural Gas [Member] | ||
Derivative Instrument Detail [Abstract] | ||
Quantity | USD_MMBtu | 1,680,000 | |
Weighted Average Price | $ 3.30 | [1] |
2017 [Member] | Oil [Member] | ||
Derivative Instrument Detail [Abstract] | ||
Quantity | USD_Bbl | 35,000 | |
Weighted Average Price | $ 52.98 | [2] |
2018 [Member] | Natural Gas [Member] | ||
Derivative Instrument Detail [Abstract] | ||
Quantity | USD_MMBtu | 3,120,000 | |
Weighted Average Price | $ 3.01 | [1] |
2018 [Member] | Oil [Member] | ||
Derivative Instrument Detail [Abstract] | ||
Quantity | USD_Bbl | 48,000 | |
Weighted Average Price | $ 54.11 | [2] |
2019 [Member] | Natural Gas [Member] | ||
Derivative Instrument Detail [Abstract] | ||
Quantity | USD_MMBtu | 1,320,000 | |
Weighted Average Price | $ 2.85 | [1] |
2019 [Member] | Oil [Member] | ||
Derivative Instrument Detail [Abstract] | ||
Quantity | USD_Bbl | 36,000 | |
Weighted Average Price | $ 54.90 | [2] |
[1] | NYMEX Henry Hub Natural Gas futures contract for the respective delivery month. | |
[2] | NYMEX Light Sweet Crude West Texas Intermediate futures contract for the respective delivery month |
Physical Delivery Contracts a44
Physical Delivery Contracts and Gas Derivatives (Details 1) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Commodity derivative contracts: | ||
Current assets | $ 604 | |
Non-current assets | 487 | |
Current liabilities | 1,341 | |
Non-current liabilities | $ 591 |
Physical Delivery Contracts a45
Physical Delivery Contracts and Gas Derivatives (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Commodity derivative contracts: | ||||
Unrealized gains (losses) | $ 3,023 | $ (966) | ||
Commodity derivative contracts [Member] | ||||
Commodity derivative contracts: | ||||
Settlement (losses) gains | $ 142 | $ 130 | 118 | 332 |
Unrealized gains (losses) | 856 | (904) | 3,023 | (996) |
Total settlement and unrealized gains (losses), net | $ 998 | $ (774) | $ 3,141 | $ (634) |
Physical Delivery Contracts a46
Physical Delivery Contracts and Gas Derivatives (Details 3) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Commodity derivative assets: | ||
Current assets | $ 604 | |
Other long-term assets | 487 | |
Total derivative assets | 1,091 | |
Commodity derivative liabilities: | ||
Current liability | 1,341 | |
Non-current liabilities | 591 | |
Total derivative liabilities | $ 1,932 | |
Gross Recognized Assets/Liabilities [Member] | ||
Commodity derivative assets: | ||
Current assets | 844 | |
Other long-term assets | 593 | |
Total derivative assets | 1,437 | |
Commodity derivative liabilities: | ||
Current liability | 240 | |
Non-current liabilities | 106 | |
Total derivative liabilities | 346 | |
Gross Amounts Offset [Member] | ||
Commodity derivative assets: | ||
Current assets | (240) | |
Other long-term assets | (106) | |
Total derivative assets | (346) | |
Commodity derivative liabilities: | ||
Current liability | (240) | |
Non-current liabilities | (106) | |
Total derivative liabilities | (346) | |
Net Recognized Fair Value Assets/Liabilities [Member] | ||
Commodity derivative assets: | ||
Current assets | 604 | |
Other long-term assets | 487 | |
Total derivative assets | 1,091 | |
Commodity derivative liabilities: | ||
Current liability | ||
Non-current liabilities | ||
Total derivative liabilities |
Commitments (Details)
Commitments (Details) | 6 Months Ended |
Jun. 30, 2017Per_McfePartnership | |
Jul 2017 - Apr 2018 [Member] | |
Other Commitments [Line Items] | |
Capacity levels (Dekatherms per day) | Partnership | 5,530 |
Jul 2017 - Apr 2018 [Member] | Minimum [Member] | |
Other Commitments [Line Items] | |
Demand charges (in dollars per dekatherm) | 0.20 |
Jul 2017 - Apr 2018 [Member] | Maximum [Member] | |
Other Commitments [Line Items] | |
Demand charges (in dollars per dekatherm) | 0.65 |
May 2018 - May 2020 [Member] | |
Other Commitments [Line Items] | |
Capacity levels (Dekatherms per day) | Partnership | 3,230 |
May 2018 - May 2020 [Member] | Minimum [Member] | |
Other Commitments [Line Items] | |
Demand charges (in dollars per dekatherm) | 0.20 |
May 2018 - May 2020 [Member] | Maximum [Member] | |
Other Commitments [Line Items] | |
Demand charges (in dollars per dekatherm) | 0.62 |
Apr 2020 - May 2020 [Member] | |
Other Commitments [Line Items] | |
Capacity levels (Dekatherms per day) | Partnership | 2,150 |
Demand charges (in dollars per dekatherm) | 0.20 |
Jun 2020 - May 2036 [Member] | |
Other Commitments [Line Items] | |
Capacity levels (Dekatherms per day) | Partnership | 1,000 |
Demand charges (in dollars per dekatherm) | 0.20 |
Commitments (Details Textual)
Commitments (Details Textual) | Jun. 30, 2017USD ($) |
Commitments (Textual) | |
Liability related to firm transportation contracts assumed | $ 541,000 |
Capital commitment | 240,000 |
Carbon Appalachia [Member] | |
Commitments (Textual) | |
Capital commitment | $ 2,000,000 |
Supplemental Cash Flow Disclo49
Supplemental Cash Flow Disclosure (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash paid during the period for: | ||
Interest | $ 433 | $ 110 |
Non-cash transactions: | ||
Increase in net asset retirement obligations | 5 | 5 |
Decrease in accounts payable and accrued liabilities included in oil and gas properties | (79) | (59) |
Issuance of warrants for investment in affiliates | $ 7,094 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended |
Jul. 31, 2017 | Jun. 30, 2017 | |
Subsequent Event (Textual) | ||
Outstanding borrowings | $ 15.5 | |
Subsequent Event [Member] | Carbon Appalachia [Member] | ||
Subsequent Event (Textual) | ||
Outstanding borrowings | $ 3.7 |