Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 12, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Carbon Energy Corp | |
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 | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 7,700,619 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 4,477 | $ 1,650 |
Accounts receivable: | ||
Revenue | 7,002 | 2,206 |
Trade receivable | 1,562 | |
Joint interest billings and other | 349 | |
Insurance receivable (Note 2) | 871 | 802 |
Due from related parties | 1,272 | 2,075 |
Commodity derivative asset | 215 | |
Prepaid expense, deposits and other current assets | 2,051 | 783 |
Total current assets | 17,235 | 8,080 |
Oil and gas properties, full cost method of accounting: | ||
Proved, net | 128,093 | 34,178 |
Unproved | 3,616 | 1,947 |
Other property and equipment, net | 1,989 | 737 |
Total property and equipment, net | 133,698 | 36,862 |
Investments in affiliates (Note 6) | 13,459 | 14,267 |
Other non-current assets | 3,200 | 800 |
Total assets | 167,592 | 60,009 |
Current liabilities: | ||
Accounts payable and accrued liabilities (Note 11) | 14,378 | 11,218 |
Firm transportation contract obligations (Note 14) | 52 | 127 |
Commodity derivative liability (Note 13) | 6,502 | |
Total current liabilities | 20,932 | 11,345 |
Non-current liabilities: | ||
Firm transportation contract obligations (Note 14) | 115 | 134 |
Production and property taxes payable | 849 | 520 |
Warrant liability (Note 12) | 2,017 | |
Asset retirement obligations (Note 5) | 10,935 | 7,357 |
Credit facility (Note 7) | 26,141 | 22,140 |
Long-term debt | 65 | |
Credit facility-related party (Note 7) | 49,995 | |
Commodity derivative liability (Note 13) | 4,299 | |
Total non-current liabilities | 92,399 | 32,168 |
Commitments (Note 14) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; authorized 1,000,000 shares, 50,000 shares issued and outstanding at September 30, 2018 and no shares issued and outstanding at December 31, 2017 | 1 | |
Common stock, $0.01 par value; authorized 35,000,000 shares, 7,700,619 and 6,005,633 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 77 | 60 |
Additional paid-in capital | 75,858 | 58,813 |
Accumulated deficit | (45,863) | (44,218) |
Total Carbon stockholders' equity | 30,073 | 14,655 |
Non-controlling interests | 24,188 | 1,841 |
Total stockholders' equity | 54,261 | 16,496 |
Total liabilities and stockholders' equity | $ 167,592 | $ 60,009 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Balance Sheets [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 50,000 | |
Preferred stock, shares outstanding | 50,000 | |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 35,000,000 | 35,000,000 |
Common stock, shares issued | 7,700,619 | 6,005,633 |
Common stock, shares outstanding | 7,700,619 | 6,005,633 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue: | ||||
Natural gas sales | $ 4,372 | $ 3,689 | $ 11,835 | $ 11,706 |
Natural gas liquid sales | 406 | 1,119 | ||
Oil sales | 11,850 | 997 | 22,924 | 3,189 |
Commodity derivative gain (loss) | (3,902) | (499) | (10,550) | 2,642 |
Other income | 16 | 8 | 35 | 28 |
Total revenue | 12,742 | 4,195 | 25,363 | 17,565 |
Expenses: | ||||
Lease operating expenses | 4,767 | 1,605 | 10,824 | 4,311 |
Transportation and gathering costs | 1,433 | 556 | 3,786 | 1,571 |
Production and property taxes | 743 | 331 | 1,792 | 1,186 |
General and administrative | 3,517 | 2,129 | 9,007 | 5,623 |
General and administrative - related party reimbursement | (1,170) | (423) | (3,383) | (723) |
Depreciation, depletion and amortization | 2,731 | 613 | 6,202 | 1,847 |
Accretion of asset retirement obligations | 206 | 77 | 510 | 232 |
Total expenses | 12,227 | 4,888 | 28,738 | 14,047 |
Operating (loss) income | 515 | (693) | (3,375) | 3,518 |
Other income and (expense): | ||||
Interest expense | (1,127) | (279) | (3,331) | (801) |
Warrant derivative gain | 811 | 225 | 2,494 | |
Equity investment loss | 157 | (285) | 6,511 | (285) |
Total other (expense) income | (970) | 247 | 3,405 | 1,408 |
(Loss) income before income taxes | (455) | (446) | 30 | 4,926 |
Provision for income taxes | ||||
Net (loss) income before non-controlling interests | (455) | (446) | 30 | 4,926 |
Net (loss) income attributable to non-controlling interests | 270 | 16 | (2,234) | 92 |
Net (loss) income attributable to controlling interest | $ (725) | $ (462) | $ 2,264 | $ 4,834 |
Net income (loss) per common share: | ||||
Basic | $ (0.09) | $ (0.08) | $ 0.30 | $ 0.87 |
Diluted | $ (0.10) | $ (0.08) | $ 0.10 | $ 0.36 |
Weighted average common shares outstanding: | ||||
Basic | 7,701 | 5,628 | 7,466 | 5,579 |
Diluted | 7,701 | 5,628 | 7,466 | 6,486 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands | Total | Common Stock | Preferred Stock | Additional paid in capital | Non- controlling interest | Accumulated Deficit |
Balances at Dec. 31, 2017 | $ 16,496 | $ 60 | $ 58,813 | $ 1,841 | $ (44,218) | |
Balances, shares at Dec. 31, 2017 | 6,006 | |||||
Stock based compensation | 672 | 672 | ||||
Stock based compensation, shares | ||||||
Vested restricted stock | $ 1 | (1) | ||||
Vested restricted stock, shares | 59 | |||||
Vested performance units | $ 1 | (1) | ||||
Vested performance units, shares | 108 | |||||
Preferred share issuance | 5,000 | $ 1 | 4,999 | |||
Preferred share issuance, shares | 50 | |||||
Beneficial conversion feature | 1,125 | (1,125) | ||||
Deemed dividend | 147 | (147) | ||||
CCC warrant exercise - share issuance | 24,793 | $ 15 | 8,312 | 16,466 | ||
CCC warrant exercise - share issuance, shares | 1,528 | |||||
CCC warrant exercise - liability extinguishment | 1,792 | 1,792 | ||||
Non-controlling interest contributions, net | 5,478 | 5,478 | ||||
Net income (loss) | 30 | (2,234) | 2,264 | |||
Balances at Sep. 30, 2018 | $ 54,261 | $ 77 | $ 1 | $ 75,858 | $ 21,551 | $ (43,226) |
Balances, shares at Sep. 30, 2018 | 7,701 | 50 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 30 | $ 4,926 |
Items not involving cash: | ||
Depreciation, depletion and amortization | 6,202 | 1,847 |
Accretion of asset retirement obligations | 510 | 232 |
Unrealized commodity derivative loss (gain) | 8,381 | (2,179) |
Warrant derivative gain | (225) | (2,494) |
Stock-based compensation expense | 672 | 752 |
Equity investment income | (6,511) | 315 |
Amortization of debt issuance costs | 468 | 131 |
Other | (108) | |
Net change in: | ||
Accounts receivable | (2,975) | 863 |
Prepaid expenses, deposits and other current assets | 456 | (280) |
Accounts payable, accrued liabilities, firm transportation contract obligations, and other long-term obligations | (1,945) | (1,425) |
Other non-current assets | (1,751) | |
Net cash provided by operating activities | 3,312 | 2,580 |
Cash flows from investing activities: | ||
Development and acquisition of properties and equipment | (44,681) | (1,268) |
Proceeds from sale of oil and gas properties and other assets | 16 | |
Other long-term assets | 275 | (56) |
Investment in affiliates | (6,798) | |
Net cash used in investing activities | (44,406) | (8,106) |
Cash flows from financing activities: | ||
Proceeds from credit facility | 34,529 | 7,210 |
Proceeds from preferred shares | 5,000 | |
Payments on credit facility | (14) | (1,300) |
Payments of debt issuance costs | (586) | (59) |
Contributions from non-controlling interests | 5,000 | |
Distributions to non-controlling interests | (8) | (64) |
Net cash provided by (used in) financing activities | 43,921 | 5,787 |
Net increase in cash and cash equivalents | 2,827 | 261 |
Cash and cash equivalents, beginning of period | 1,650 | 858 |
Cash and cash equivalents, end of period | $ 4,477 | $ 1,119 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2018 | |
Organization [Abstract] | |
Organization | Note 1 - Organization we us Company Carbon” Appalachian and Illinois Basin Operations Nytis LLC conducts operations for Carbon and Carbon Appalachia as illustrated in the following diagram. Ventura Basin Operations |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements 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 the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments considered necessary to present fairly our financial position as of September 30, 2018, and our results of operations and cash flows for the three and nine months ended September 30, 2018 and 2017. Operating results for the three and nine months ended September 30, 2018, 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, seasonality, and other factors. The unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q should be read in conjunction with our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2017. Except as disclosed herein, there have been no material changes to the information disclosed in the notes to the consolidated financial statements included in our 2017 Annual Report on Form 10-K. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Carbon, Carbon California, 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. Carbon owns 53.9% of Carbon California and Prudential owns 46.1% voting and profits interest in Carbon California. Nytis LLC also holds an interest in 64 oil and gas partnerships. For the 47 partnerships where we have a controlling interest, the partnerships are consolidated. In these instances, we reflect the non-controlling ownership interest in partnerships and subsidiaries as non-controlling interests on our unaudited consolidated statements of operations, non-controlling ownership interests in the net assets of the partnerships as non-controlling interests within stockholders’ equity on our unaudited consolidated balance sheets. All significant intercompany accounts and transactions have been eliminated. In accordance with established practice in the oil and gas industry our unaudited condensed consolidated financial statements also include our pro-rata share of assets, liabilities, income, lease operating costs and general and administrative expenses of the oil and gas partnerships in which we have a non-controlling interest. Non majority interest owned investments that do not meet the criteria for pro-rata consolidation are accounted for using the equity method when we have the ability to significantly influence the operating decisions of the investee. When we do 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 unaudited condensed consolidated financial statements. Effective February 1, 2018, Yorktown exercised the California Warrant, which resulted in us acquiring Yorktown’s ownership interest in Carbon California in exchange for shares of our common stock. On May 1, 2018, Carbon California closed the Seneca Acquisition. Following the exercise of the California Warrant by Yorktown and the Seneca Acquisition, we own 53.9%, of the voting and profits interests, and Prudential owns 46.1%. Insurance Receivable Insurance receivable is comprised of insurance claims for the loss of property as a result of wildfires that impacted Carbon California in December 2017. The Company filed claims with its insurance provider and is in receipt of a portion of partial funds associated with the claims as of September 30, 2018. Therefore, the Company has determined the receivable is collectible and is included in insurance receivable on the unaudited consolidated balance sheets. As of September 30, 2018, the Company has an insurance receivable of $871,000 and collected $2.7 million from the previously submitted claims. Long-term Assets Long-term assets are comprised of (i) debt issuance costs, (ii) bonds, and (iii) deferred registration fees associated with a registration statement for a possible equity offering of the Company’s Common Stock. We have recorded debt issuance costs and amortize the balance over the life of the loan. As of September 30, 2018, we have within non-current assets approximately $1.7 million of deferred financing costs associated with our credit facility and with Carbon California’s Senior Revolving Notes (note 7). As of September 30, 2018, we have incurred approximately $1.9 million for outside professional services in conjunction with the preparation of the completion of a registration statement associated with the possible offering. We will continue to accumulate deferred financing costs until the completion of the registration statement and a successful equity offering is commenced which at that time will be recognized as a financing charge and applied against the equity component of the transaction. If the raise is unsuccessful, the amount will be expensed in the current period. 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 nine months ended September 30, 2018, the Company did not recognize a ceiling test impairment as the Company’s full cost pool did not exceed the ceiling limitations. For the three months ended September 30, 2017, the Company did not recognize a ceiling test impairment as the Company’s full cost pool did not exceed the ceiling limitations. 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 we have 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 do 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 we hold 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 can exert significant influence or control (e.g., through our 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. Equity method investments will increase or decrease by our share of the affiliate’s profits or losses and such profits or losses are recognized in our unaudited consolidated statements of operations. For our equity method investment in Carbon Appalachia, we use the hypothetical liquidation at book value method to recognize our share of the affiliate’s profits or losses. We review 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 Management Reimbursements In our role as manager of Carbon California and Carbon Appalachia, we received reimbursements for the provision of management from Carbon Appalachia of approximately $744,000 and $2.3 million for the three and nine months ended September 30, 2018, and $50,000 for the one month ended January 31, 2018, from Carbon California. These reimbursements are included in general and administrative - related party reimbursement on our unaudited consolidated statements of operations. Effective February 1, 2018, the management reimbursement received from Carbon California is eliminated at consolidation. This elimination was $650,000 for the period February 1, 2018 through September 30, 2018. In addition to the management reimbursements, approximately $376,000 and $1.1 million in general and administrative expenses were reimbursed for the three and nine months ended September 30, 2018, from Carbon Appalachia, and $14,000 for the one month ended January 31, 2018, from Carbon California. General and administrative expenses reimbursed by Carbon California and eliminated upon consolidation were approximately $42,000 for the period February 1, 2018, through September 30, 2018. Operating Reimbursements In our role as operator of Carbon Appalachia, we receive reimbursements of operating expenses. These expenses are recorded directly to receivable - related party on our unaudited consolidated balance sheets and are therefore not included in our operating expenses on our unaudited consolidated statements of operations. Carbon California Credit Facilities The credit facilities of Carbon California, including the Senior Revolving Notes, Carbon California Notes and Carbon California 2018 Subordinated Notes (all defined below), are held by Prudential Legacy Insurance Company of New Jersey and Prudential Insurance Company of America or its affiliates (“Prudential”). See note 7. Preferred Stock In April 2018, we issued 50,000 shares of Preferred Stock to Yorktown in conjunction with our Seneca Acquisition. See note 9. Old Ironsides Membership Interest Purchase Agreement On May 4, 2018, we entered into a Membership Interest Purchase Agreement with Old Ironsides to acquire all of Old Ironsides’ membership interests of Carbon Appalachia. Following the closing of the transaction we will own 100% of the issued and outstanding ownership in Carbon Appalachia and Carbon Appalachia will become a wholly-owned subsidiary of ours. See note 6. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to makes estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. There have been no changes in our critical accounting estimates from those that were disclosed in the 2017 Annual Report on Form 10-K. Actual results could differ from these estimates. Earnings (Loss) Per Common Share Basic earnings per common share is computed by dividing the net income (loss) attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. The shares of restricted stock granted to our officers, directors and employees are included in the computation of basic net income per share only after the shares become fully vested. Diluted earnings per common share includes both the vested and unvested shares of restricted. We issued 50,000 shares of Series B Convertible Preferred Stock, par value $0.01 per share (the “Preferred Stock”), and the difference between the carrying amount of the Preferred Stock in equity and the fair value of the Preferred Stock) is treated as a dividend for purposes of calculating earnings per common share. The Preferred Stock deemed dividend could potentially dilute basic earnings per common share in the future. In periods when we report a net loss, all shares of restricted stock are excluded from the calculation of diluted weighted average shares outstanding because of its anti-dilutive effect on loss per share. As a result, all restricted stock is excluded from the calculation of diluted earnings per common share for the three months ended September 30, 2018. Potentially dilutive securities (restricted stock awards) included in the calculation of diluted earnings per share totaled 315,040 for the three months ended September 30, 2018. Potentially dilutive securities that are anti-dilutive totaled 315,040 for the three months ended September 30, 2018 and 901,109 for the three months ended September 30, 2017. The dilutive units did not have a material impact on our earnings per common share calculations for any of the periods presented. The following table sets forth the calculation of basic and diluted income per share: Three months ended Nine months ended (in thousands except per share amounts) 2018 2017 2018 2017 Net income (loss) attributable to controlling interest $ (725 ) $ (462 ) $ 2,264 $ 4,834 Less: warrant derivative gain - - (225 ) (2,494 ) Less: deemed dividend for convertible preferred shares (77 ) - (147 ) - Less: beneficial conversion feature - - (1,125 ) - Diluted net (loss) income $ (802 ) $ (462 ) $ 767 $ 2,340 Basic weighted-average common shares outstanding during the period 7,701 5,628 7,466 5,579 Add dilutive effects of warrants and non-vested shares of restricted stock - - 315 907 Diluted weighted-average common shares outstanding during the period 7,701 5,628 7,781 6,486 Basic net (loss) income per common share $ (0.09 ) $ (0.08 ) $ 0.30 $ 0.87 Diluted net (loss) income per common share $ (0.10 ) $ (0.08 ) $ 0.10 $ 0.36 Recently Adopted Accounting Pronouncement In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “ Leases There were various updates recently issued by the FASB, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on our reported financial position, results of operations, or cash flows. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 9 Months Ended |
Sep. 30, 2018 | |
Acquisitions and Divestitures [Abstract] | |
Acquisitions and Divestitures | Note 3 - Acquisitions and Divestitures Acquisition of Majority Control of Carbon California Carbon California was formed in 2016 by us and entities managed by Yorktown and Prudential to acquire oil and gas producing assets in the Ventura Basin of California. In connection with the entry into the limited liability company agreement of Carbon California, we received Class B Units and issued to Yorktown the California Warrant exercisable for shares of our common stock. The exercise price for the California Warrant was payable exclusively with Class A Units of Carbon California held by Yorktown and the number of shares of our common stock for which the California Warrant was exercisable was determined, as of the time of exercise, by dividing (a) the aggregate unreturned capital of Yorktown’s Class A Units of Carbon California by (b) the exercise price. The California Warrant had a term of seven years and included certain standard registration rights with respect to the shares of our common stock issuable upon exercise of the California Warrant. The issuance of the Class B Units and the California Warrant were in contemplation of each other (note 6), and under non-monetary related party guidance, we accounted for the California Warrant, at issuance, based on the fair value of the California Warrant as of the date of grant (February 15, 2017) and recorded a long-term warrant liability with an associated offset to Additional Paid in Capital (“APIC”). Future changes to the fair value of the California Warrant were recognized in earnings. We accounted for the fair value of the Class B Units at their estimated fair value at the date of grant, which became our investment in Carbon California with an offsetting entry to Additional Paid In Capital (“APIC”). Additionally, we accounted for our 17.81% profits interest in Carbon California as an equity method investment until January 31, 2018. On February 1, 2018, Yorktown exercised the California Warrant resulting in the issuance of 1,527,778 shares of our common stock in exchange for Yorktown’s Class A Units of Carbon California representing approximately 46.96% of the outstanding Class A Units of Carbon California (a profits interest of approximately 38.59%). After giving effect to the exercise on February 1, 2018, we owned 56.4% of the voting and profits interests of Carbon California. On May 1, 2018, Carbon California closed the Seneca Acquisition. Following the exercise of the California Warrant by Yorktown and the Seneca Acquisition, we own 53.9% of the voting and profits interests, and Prudential owns 46.1% voting and profits interest in Carbon California. The exercise of the California Warrant and the acquisition of the additional ownership interest is accounted for as a step acquisition in which we obtained control in accordance with ASC 805, Business Combinations Amount Fair value of Carbon common shares transferred as consideration $ 8,326 Fair value of NCI 16,466 Fair value of previously held interest 7,244 Fair value of business acquired $ 32,036 Assets acquired and liabilities assumed are as follows: Amount Cash $ 275 Accounts receivable: Joint interest billings and other 690 Receivable - related party 1,610 Prepaid expense, deposits, and other current assets 1,723 Oil and gas properties: Proved 56,477 Unproved 1,495 Other property and equipment, net 877 Other long-term assets 475 Accounts payable and accrued liabilities (6,054 ) Commodity derivative liability - short-term (916 ) Commodity derivative liability - long-term (1,729 ) Asset retirement obligations - short-term (384 ) Asset retirement obligations - long-term (2,537 ) Subordinated Notes, related party, net (8,874 ) Senior Revolving Notes, related party (11,000 ) Notes payable (92 ) Total net assets acquired $ 32,036 The preliminary fair value of the assets acquired and liabilities assumed were determined using various valuation techniques, including an income approach. On the date of the acquisition, we derecognized our equity investment in Carbon California and recognized a gain of approximately $5.4 million based on the fair value of our previously held interest compared to its carrying value. For assets and liabilities accounted for as business combinations, including the Carbon California acquisition, to determine the fair value of the assets acquired, the Company primarily used the income approach and made market assumptions as to projections of estimated quantities of oil and natural gas reserves, future production rates, future commodity prices including price differentials as of the date of closing, future operating and development costs, a market participant weighted average cost of capital, and the condition of vehicles and equipment. The determination of the fair value of the accounts payable and accrued liabilities assumed required significant judgement, including estimates relating to production assets . Seneca Acquisition In October 2017, Carbon California signed a Purchase and Sale Agreement with Seneca Resources (“ Seneca Utilizing the assistance of third-party valuation specialists, we considered various factors in our estimate of fair value of the acquired assets including (i) reserves, (ii) production rates, (iii) future operating and development costs, (iv) future commodity prices, including price differentials, (v) future cash flows, and (vi) working conditions and expected lives of vehicles and equipment. We determined that substantially all of the fair value of the assets acquired related to proved oil and gas properties and, as such the Seneca Acquisition does not meet the definition of a business. Therefore, we have accounted for the transaction as an asset acquisition and allocated the purchase price based on the relative fair value of the assets acquired. The fair value of the production assets were determined using the income approach using Level 3 inputs according to the ASC 820, Fair Value Identifiable assets acquired: Proved oil and gas properties $ 37,386 Unproved oil and gas properties 100 Other property and equipment 545 Intangible assets 300 Total identified assets $ 38,331 Consolidation of Carbon California and Seneca Acquisition Unaudited Pro Forma Results of Operations Below are unaudited consolidated results of operations for the three and nine months ended September 30, 2018 and 2017, as though the Carbon California Acquisition and the Seneca Acquisition had been completed as of January 1, 2017. The Carbon California Acquisition closed February 1, 2018, and the Seneca Acquisition closed May 1, 2018, and accordingly, our unaudited consolidated statements of operations for the year ended September 30, 2018, includes the Carbon California Acquisition results of operations for the period February 1, 2018 through September 30, 2018, inclusive of the Seneca Acquisition results of operations for the period May 1, 2018 through September 30, 2018. Unaudited Pro Forma Unaudited Pro Forma (in thousands, except per share amounts) 2018 2017 2018 2017 Revenue $ 12,742 $ 11,227 $ 33,256 $ 35,122 Net (loss) income before non-controlling interests (455 ) (1,518 ) 5,232 13,969 Net (loss) income attributable to non-controlling interests 270 16 (2,334 ) 92 Net (loss) income attributable to controlling interests $ (725 ) $ (1,534 ) $ 7,566 $ 13,877 Net income per share (basic) $ (0.09 ) $ (0.27 ) $ 1.00 $ 2.49 Net income per share (diluted) $ (0.10 ) $ (0.27 ) $ .96 $ 2.14 Liberty Acquisition On July 11, 2018, we completed an acquisition of 54 operated oil and gas wells covering approximately 55,000 gross acres (22,000 net) and the associated mineral interests in the Appalachian Basin for a purchase price of $3.0 million, subject to customary and standard purchase price adjustments (the “ Liberty Acquisition |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Property and Equipment [Abstract] | |
Property and Equipment | Note 4 - Property and Equipment Net property and equipment as of September 30, 2018 and December 31, 2017, consists of the following: (in thousands) September 30, December 31, Oil and gas properties: Proved oil and gas properties $ 215,620 $ 114,893 Unproved properties not subject to depletion 3,616 1,947 Accumulated depreciation, depletion, amortization and impairment (87,527 ) (80,715 ) Net oil and gas properties 131,709 36,125 Furniture and fixtures, computer hardware and software, and other equipment 3,783 1,758 Accumulated depreciation and amortization (1,794 ) (1,021 ) Net other property and equipment 1,989 737 Total net property and equipment $ 133,698 $ 36,862 We had approximately $3.6 million and $1.9 million, at September 30, 2018 and December 31, 2017, respectively, of unproved oil and gas properties not subject to depletion. At September 30, 2018 and December 31, 2017, our unproved properties consist principally of leasehold acquisition costs in the following areas: (in thousands) September 30, December 31, Ventura Basin $ 1,595 $ - Illinois Basin: Indiana 432 432 Illinois 142 136 Appalachian Basin: Kentucky 952 915 Ohio 66 66 West Virginia 429 398 Total unproved properties not subject to depletion $ 3,616 $ 1,947 During the three and nine months ended September 30, 2018 and 2017, there were no expiring leasehold costs that were reclassified into proved property. The excluded properties are assessed for impairment at least annually. Subject to industry conditions, evaluations of most of these properties and the inclusion of their costs in amortized capital costs is expected to be completed within five years. We capitalized overhead applicable to acquisition, development and exploration activities of approximately $106,000 and $306,000 for the three and nine months ended September 30, 2018, respectively. For the three and nine months ended September 30, 2017, we capitalized overhead applicable to acquisition, development, and exploration activities of approximately $47,000 and $178,000, respectively. Depletion expense related to oil and gas properties for the three and nine months ended September 30, 2018 was approximately $2.4 million, or $1.01 per Mcfe, and $5.6 million, or $0.88 per Mcfe, respectively. For the three and nine months ended September 30, 2017, depletion expense was approximately $521,000, or $0.38 per Mcfe, and $1.6 million, or $0.40 per Mcfe, respectively. |
Asset Retirement Obligation
Asset Retirement Obligation | 9 Months Ended |
Sep. 30, 2018 | |
Asset Retirement Obligation [Abstract] | |
Asset Retirement Obligation | Note 5 - Asset Retirement Obligation Our 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 or acquired, 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 acquired 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 (see note 12). The following table is a reconciliation of the ARO: Nine Months Ended (in thousands) 2018 2017 Balance at beginning of period $ 7,737 $ 5,120 Accretion expense 510 232 Additions from Carbon California Company, LLC 2,921 - Additions from Seneca Acquisition 639 - Additions from Liberty Acquisition 30 - Additions during period - 5 Obligations on sale of oil & gas properties - (93 ) 11,837 5,264 Less: ARO recognized as a current liability (902 ) (144 ) Balance at end of period $ 10,935 $ 5,120 |
Investments in Affiliates
Investments in Affiliates | 9 Months Ended |
Sep. 30, 2018 | |
Investments in Affiliates [Abstract] | |
Investments in Affiliates | Note 6 - Investments in Affiliates Carbon California Carbon California was formed in 2016 by us and entities controlled by, Yorktown and Prudential to acquire producing assets in the Ventura Basin in California. On February 15, 2017, we, Yorktown and Prudential entered into a limited liability company agreement (the “Carbon California LLC Agreement”) of Carbon California, a Delaware limited liability company. Prior to February 1, 2018, we held 17.81% of the voting and profits interests, Yorktown held 38.59% of the voting and profits interests and Prudential held 43.59% of the voting and profits interests in Carbon California. On February 1, 2018, Yorktown exercised the California Warrant, pursuant to which Yorktown obtained additional shares of common stock in us in exchange for the transfer and assignment by Yorktown of all its rights in Carbon California. Following the exercise of the California Warrant by Yorktown, we owned 56.4% of the voting and profits interests, and Prudential held the remainder of the interests, in Carbon California. On May 1, 2018, Carbon California closed the Seneca Acquisition. Following the exercise of the California Warrant by Yorktown and the Seneca Acquisition, we own 53.9% of the voting and profits interests, and Prudential owns 46.1% voting and profits interest in Carbon California. On February 15, 2017, Carbon California (i) issued and sold Class A Units to Yorktown and Prudential for an aggregate cash consideration of $22.0 million, (ii) entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with Prudential Legacy Insurance Company of New Jersey and Prudential Insurance Company of America for the issuance and sale of up to $25.0 million of Senior Secured Revolving Notes (the “Senior Revolving Notes”) due February 15, 2022 and (iii) entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Prudential for the issuance and sale of $10.0 million of Senior Subordinated Notes (the “Subordinated Notes”) due February 15, 2024. We are not a guarantor of the Senior Revolving Notes or the Subordinate Notes. The closing of the Note Purchase Agreement and the Securities Purchase Agreement on February 15, 2017, resulted in the sale and issuance by Carbon California of (i) Senior Revolving Notes in the principal amount of $10.0 million and (ii) Subordinated Notes in the original principal amount of $10.0 million. The maximum principal amount available under the Senior Revolving Notes is based upon the borrowing base attributable to Carbon California’s proved oil and gas reserves which is to be determined at least semi-annually. As of September 30, 2018, the borrowing base was $41.0 million, of which $38.5 million was outstanding. 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 were used to fund field development projects, to fund a future complementary acquisition and for general working capital purposes of Carbon California. For the period February 15, 2017 (inception) through January 31, 2018, based on our 17.8% interest in Carbon California, our ability to appoint a member to the board of directors and our role of manager of Carbon California, we accounted for our investment in Carbon California under the equity method of accounting as we believed we exerted significant influence. We used the Hypothetical Liquidation at Book Value Method (“HLBV”) to determine our share of profits or losses in Carbon California and adjusted the carrying value of our investment accordingly. The HLBV is a balance-sheet approach that calculates the amount each member of Carbon California would have received 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 B Units and any remaining proceeds are then distributed to members holding Class A Units. For the period February 15, 2017 (inception) through January 31, 2018, Carbon California incurred a net loss of which our share (as a holder of Class B Units for that period) was zero. In connection with our entry into the Carbon California LLC Agreement, we received the aforementioned Class B Units and issued to Yorktown the California Warrant. The exercise price for the California Warrant was payable exclusively with Class A Units of Carbon California held by Yorktown and the number of shares of our common stock for which the California Warrant was exercisable was determined, as of the time of exercise, by dividing (a) the aggregate unreturned capital of Yorktown’s Class A Units of Carbon California by (b) the exercise price. The California Warrant had a term of seven years and included certain standard registration rights with respect to the shares of our common stock issuable upon exercise of the California Warrant. On February 1, 2018, Yorktown exercised the California Warrant. As a result of the warrant exercise, Carbon holds 11,000 Class A Units of Carbon California and all of the Class B units, resulting in an aggregate Sharing Percentage of 56.4%. Effective February 1, 2018, the Company consolidates Carbon California in its unaudited condensed consolidated financial statements. On May 1, 2018, Carbon California entered into an agreement with Prudential Capital Energy Partners, L.P. for the issuance and sale of $3.0 million of unsecured notes due February 15, 2024, bearing interest of 12% per annum (the “Carbon California 2018 Subordinated Notes”). Prudential received 585 Class A Units, representing an approximately 2% additional sharing percentage, for the issuance of the Carbon California 2018 Subordinated Notes. Carbon California valued this unit issuance based on the relative fair value by valuing the units at $1,000 per unit and aggregating the amount with the outstanding Carbon California 2018 Subordinated Notes of $3.0 million. The Company then allocated the non-cash value of the units of approximately $490,000, which was recorded as a discount to the Carbon California 2018 Subordinated Notes. As of September 30, 2018, Carbon California had an outstanding discount of $454,000 associated with these notes, which is presented net of the Carbon California 2018 Subordinated Notes within Credit facility-related party on the unaudited consolidated balance sheets. As a result of these transactions, we have at September 30, 2018, an aggregate Sharing Percentage of 53.9%. Carbon Appalachia Carbon Appalachia was formed in 2016 by us, Yorktown and entities controlled by Old Ironsides Energy LLC (“Old Ironsides”) to acquire producing assets in the Appalachian Basin in Kentucky, Tennessee, Virginia and West Virginia. Outlined below is a summary of (i) our contributions, (ii) our resulting percentage of Class A unit ownership and (iii) our overall resulting Sharing Percentage of Carbon Appalachia after giving effect to the Class C Unit ownership. Holders of units within each class of units participate in profit or losses and distributions according to their proportionate share of each class of units (“Sharing Percentage”). Each contribution and its use are described in summary following the table. Date Capital Resulting Class A Resulting April 2017 $0.24 million 2.00 % 2.98 % August 2017 $3.71 million 15.20 % 16.04 % September 2017 $2.92 million 18.55 % 19.37 % November 2017 Warrant exercise 26.50 % 27.24 % On April 3, 2017, we, Yorktown and Old Ironsides, entered in to a limited liability company agreement (the “Carbon Appalachia LLC Agreement”), with an initial equity commitment of $100.0 million, of which $37.0 million has been contributed as of September 30, 2018. Pursuant to the Carbon Appalachia LLC Agreement, we acquired a 2.0% interest in Carbon Appalachia for $240,000 of Class A Units associated with our initial equity commitment of $2.0 million. We also have the ability to earn up to an additional 14.7% 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, we 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 our 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. We, through our subsidiary, Nytis LLC, will retain a 25% working interest in the properties. There was no activity associated with these properties in 2017 nor during the first nine months of 2018. The CAE Credit Facility borrowing base was adjusted for acquisitions completed in 2017. Most recently, on April 30, 2018, the CAE Credit Facility was amended, which increased the borrowing base to $70.0 million with redeterminations as of April 1 and October 1 each year. As of September 30, 2018, there was approximately $38.0 million outstanding under the CAE Credit Facility. The CAE Credit Facility is guaranteed by each of CAE’s existing and future direct or indirect subsidiaries (subject to certain exceptions). CAE’s obligations and those of CAE’s subsidiary guarantors under the CAE Credit Facility are secured by essentially all of CAE’s tangible and intangible personal and real property (subject to certain exclusions). Interest is payable quarterly and accrues on borrowings under the CAE Credit Facility at a rate per annum equal to either (i) the base rate plus an applicable margin between 0.00% and 1.00% or (ii) the Adjusted LIBOR rate plus an applicable margin between 3.00% and 4.00% at our option. The actual margin percentage is dependent on the CAE Credit Facility utilization percentage. CAE is obligated to pay certain fees and expenses in connection with the CAE Credit Facility, including a commitment fee for any unused amounts of 0.50%. The CAE Credit Facility contains affirmative and negative covenants that, among other things, limit CAE’s ability to (i) 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 our affiliates; (viii) enter into sales-leaseback transactions; (ix) make optional or voluntary payments of debt; (x) change the nature of our business; (xi) change our 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 basket amounts and acceptable transaction levels. In addition, the CAE Credit Facility requires CAE’s compliance, on a consolidated basis, with (i) a maximum Debt/EBITDA ratio of 3.5 to 1.0 and (ii) a minimum current ratio of 1.0 to 1.0. CAE may at any time repay the loans under the CAE Credit Facility, in whole or in part, without penalty. CAE must pay down borrowings under the CAE Credit Facility or provide mortgages of additional oil and natural gas properties to the extent that outstanding loans and letters of credit exceed the borrowing base. In connection with our entry into the Carbon Appalachia LLC Agreement, and Carbon Appalachia engaging in certain transactions during 2017, we received the aforementioned Class B Units and issued to Yorktown a warrant to purchase approximately 408,000 shares of our common stock at an exercise price of $7.20 per share (the “Appalachia Warrant”). The Appalachia Warrant was payable exclusively with Class A Units of Carbon Appalachia held by Yorktown and the number of shares of our common stock for which the Appalachia Warrant was exercisable was determined, as of the time of exercise, by dividing (a) the aggregate unreturned capital of Yorktown’s Class A Units of Carbon Appalachia plus a required 10% internal rate of return by (b) the exercise price. On November 1, 2017, Yorktown exercised the Appalachia Warrant, resulting in the issuance of approximately 432,000 shares of our common stock in exchange for Class A Units representing approximately 7.95% of then outstanding Class A Units of Carbon Appalachia. We accounted for the exercise through extinguishment of the warrant liability associated with the Appalachia Warrant of approximately $1.9 million and the receipt of Yorktown’s Class A Units as an increase to investment in affiliates in the amount of approximately $2.9 million. After giving effect to the exercise, we own 26.5% of Carbon Appalachia’s outstanding Class A Units along with 100% of its Class C Units. The issuance of the Class B Units and the Appalachia Warrant were in contemplation of each other, and under non-monetary related party guidance, we accounted for the Appalachia Warrant, at issuance, based on the fair value of the Appalachia Warrant as of the date of grant (April 3, 2017) and recorded a warrant liability with an associated offset to APIC. Future changes to the fair value of the Appalachia Warrant were recognized in earnings. We accounted for the fair value of the Class B Units at their estimated fair value at the date of grant, which became our investment in Carbon Appalachia with an offsetting entry to APIC. As of the grant date of the Appalachia Warrant, we estimated that the fair market value of the Appalachia Warrant was approximately $1.3 million, and the fair value of the Class B Units was approximately $924,000. The difference in the fair value of the Appalachia Warrant from the grant date though its exercise on November 1, 2017, was approximately $619,000 and was recognized in warrant derivative gain in our consolidated statements of operations for the year ended December 31, 2017. Based on our 27.24% combined Class A and Class C interest (and our ability as of September 30, 2018 to earn up to an additional 14.7%) in Carbon Appalachia, our ability to appoint a member to the board of directors and our role of manager of Carbon Appalachia, we are accounting for our investment in Carbon Appalachia under the equity method of accounting as we believe we exert significant influence. We use the HLBV to determine our share of profits or losses in Carbon Appalachia and adjust the carrying value of our investment accordingly. Our investment in Carbon Appalachia is represented by our Class A and C interests, which we acquired by contributing approximately $6.9 million in cash and unevaluated property. In the event of liquidation of Carbon Appalachia, available proceeds are first distributed to members holding Class C Units then to holders of Class A 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 three and nine months ended September 30, 2018, Carbon Appalachia earned net income, of which our share is approximately $139,000 and $1.1 million, respectively. The ability of Carbon Appalachia to make distributions to its owners, including us, is dependent upon the terms of its credit facility, which currently prohibit distributions unless agreed to by the lender. As of September 30, 2018, Carbon Appalachia is in compliance with all CAE Credit Facility covenants. The following table sets forth selected historical unaudited consolidated statements of operations and production data for Carbon Appalachia. (in thousands) As of Current assets $ 22,478 Total oil and gas properties, net $ 81,833 Total other property and equipment, net $ 15,880 Other long-term assets $ 1,302 Current liabilities $ 15,313 Non-current liabilities $ 61,234 Total members’ equity $ 44,946 Three months Three months (in thousands) September 30, September 30, Revenues $ 18,058 $ 1,348 Operating expenses 16,686 2,691 Income (loss) from operations 1,372 (1,344 ) Net income (loss) $ 537 $ (1,546 ) Nine months April 3, (in thousands) September 30, September 30, Revenues $ 62,480 $ 2,905 Operating expenses 56,441 4,449 Income (loss) from operations 6,039 (1,544 ) Net income (loss) $ 4,017 $ (1,874 ) Old Ironsides Membership Interest Purchase Agreement The MIPA contains termination rights for us and Old Ironsides, including, among others, if the closing of the transaction has not occurred on or before November 30, 2018. The MIPA may also be terminated by mutual written consent of us and Old Ironsides. On November 6 , Investments in Affiliates During the three and nine months ended September 30, 2018, we recorded total equity method income of approximately $83,000 and $1.0 million, respectively. For the nine months ended September 30, 2017, we recorded total equity method income of approximately $32,000. On February 1, 2018, as a result of the Carbon California Acquisition, we derecognized our equity investment in Carbon California and recognized a gain of approximately $5.4 million based on the fair value of our previously held interest compared to its carrying value. |
Credit Facilities
Credit Facilities | 9 Months Ended |
Sep. 30, 2018 | |
Credit Facilities [Abstract] | |
Credit Facilities | Note 7 - Credit Facilities Our Credit Facility In 2016, we 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. In July 2018, the borrowing base was increased from $25.0 to $28.0 million, of which approximately $26.1 million was outstanding as of September 30, 2018. Our effective interest rate as of September 30, 2018 was 7.52%. The credit facility is guaranteed by each of our existing and future subsidiaries (subject to certain exceptions). Our obligations and those of our subsidiary guarantors under the credit facility are secured by essentially all of our tangible and intangible personal and real property (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 our option. The actual margin percentage is dependent on the credit facility utilization percentage. We are 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 affirmative and negative covenants that, among other things, limit our ability to (i) 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 our affiliates; (viii) enter into sales-leaseback transactions; (ix) make optional or voluntary payments of debt; (x) change the nature of our business; (xi) change our 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 basket amounts and acceptable transaction levels. In addition, the credit facility requires our compliance, on a consolidated basis, with (i) a maximum Debt/EBITDA ratio of 3.5 to 1.0 and (ii) a minimum current ratio of 1.0 to 1.0. On March 27, 2018, the credit facility was amended to revise the calculation of the Leverage Ratio from a Debt/EBITDA ratio to a Net Debt/Adjusted EBITDA ratio, reset the testing period used in the determination of Adjusted EBITDA, eliminated the minimum current ratio and substituted alternative liquidity requirements, including maximum allowed current liabilities in relation to current assets, a minimum cash balance requirement of $750,000 and maximum aged trade payable requirements. As of September 30, 2018, we were in compliance with our financial covenants. We may at any time repay the loans under the credit facility, in whole or in part, without penalty. We 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, we entered into derivative contracts with fixed pricing for a certain percentage of our production. We are a party to an ISDA Master Agreement with BP Energy Company that established 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. Carbon California – Credit Facilities Effective as of February 1, 2018, our ownership in Carbon California increased to 56.4% due to the exercise of the California Warrant. As a result of this transaction, we consolidate Carbon California for financial reporting purposes. On May 1, 2018, Carbon California closed the Seneca Acquisition. Following the exercise of the California Warrant by Yorktown and the Seneca Acquisition, we own 53.9% of the voting and profits interests, and Prudential owns 46.1% voting and profit interest in Carbon California. The table below summarizes the outstanding notes payable for Carbon California as of September 30, 2018 (in thousands): Senior Revolving Notes, related party, due February 15, 2022 $ 38,500 Subordinated Notes, related party, due February 15, 2024 13,000 Long-term debt 65 Total gross notes payable 51,565 Less: Deferred notes costs (220 ) Less: Notes discount (1,284 ) Total net notes payable $ 50,061 Carbon California-Senior Revolving Notes, Related Party On February 15, 2017, Carbon California entered into the Note Purchase Agreement with Prudential Legacy Insurance Company of New Jersey and Prudential Insurance Company of America for the issuance and sale of the Senior Revolving Notes due February 15, 2022. We are not a guarantor of the Senior Revolving Notes. The closing of the Note Purchase Agreement on February 15, 2017, resulted in the sale and issuance by Carbon California of Senior Revolving Notes in the principal amount of $10.0 million. The maximum principal amount available under the Senior Revolving Notes is based upon the borrowing base attributable to Carbon California’s proved oil and gas reserves which is to be determined at least semi-annually. As of September 30, 2018, the borrowing base was $41.0 million, of which $38.5 million was outstanding. Carbon California may elect to incur interest at either (i) 5.0% plus the London interbank offered rate (“LIBOR”) or (ii) 4.00% plus Prime Rate (which is defined as the interest rate published daily by JPMorgan Chase Bank, N.A.). As of September 30, 2018, the effective borrowing rate for the Senior Revolving Notes was 8.14%. In addition, the Senior Revolving Notes include a commitment fee for any unused amounts at 0.50% as well as an annual administrative fee of $75,000, payable on February 15 each year. The Senior Revolving Notes are secured by all the assets of Carbon California. The Senior Revolving Notes require Carbon California, as of January 1 and July 1 of each year, to hedge its anticipated proved developed production at such time for year one, two and three at a rate of 75%, 65% and 50%, respectively. Carbon California may make principal payments in minimum installments of $500,000. Distributions to equity members are generally restricted. Carbon California incurred fees directly associated with the issuance of the Senior Revolving Notes and amortizes these fees over the life of the Senior Revolving Notes. The current portion of these fees are included in prepaid expense and deposits and the long-term portion is included in other long-term assets for a combined value of $898,000. During the three and nine months ended September 30, 2018, Carbon California amortized fees of $57,000 and $134,000, respectively. For the three and nine months ended September 30, 2017, Carbon California amortized $29,000 and $72,000, respectively. The Note Purchase Agreement requires Carbon California to maintain certain financial and non-financial covenants which include the following ratios: total leverage ratio, senior leverage ratio, interest coverage ratio, current ratio, and other qualitative covenants as defined in the Note Purchase Agreement. As of September 30, 2018, Carbon California was in compliance with its financial covenants. 2017 Carbon California-Subordinated Notes On February 15, 2017, Carbon California entered into the Securities Purchase Agreement with Prudential Capital Energy Partners, L.P. for the issuance and sale of the Subordinated Notes due February 15, 2024, bearing interest of 12% per annum. We are not a guarantor of the Subordinated Notes. The closing of the Securities Purchase Agreement on February 15, 2017, resulted in the sale and issuance by Carbon California of Subordinated Notes in the original principal amount of $10.0 million. Prudential received an additional 1,425 Class A Units, representing 5% of total sharing percentage, for the issuance of the Subordinated Notes. Carbon California valued this unit issuance based on the relative fair value by valuing the units at $1,000 per unit and aggregating the amount with the outstanding Subordinated Notes of $10.0 million. The Company then allocated the non-cash value of the units of approximately $1.3 million, which was recorded as a discount to the Subordinated Notes. As of September 30, 2018, Carbon California has an outstanding discount of $830,000, which is presented net of the Subordinated Notes within Credit facility-related party on the unaudited consolidated balance sheets. The Subordinated Notes require Carbon California, as of January 1 and July 1 of each year, to hedge its anticipated production at such time for year one, two and three at a rate of 67.5%, 58.5% and 45%, respectively. The Securities Purchase Agreement requires Carbon California to maintain certain financial and non-financial covenants, which include the following ratios: total leverage ratio, senior leverage ratio, interest coverage ratio, asset coverage ratio, current ratio, and other qualitative covenants as defined in the Securities Purchase Agreement. As of September 30, 2018, Carbon California was in compliance with its financial covenants. Carbon California-2018 Subordinated Notes On May 1, 2018, Carbon California entered into an agreement with Prudential for the issuance and sale of the Carbon California 2018 Subordinated Notes. Prudential received 585 Class A Units, representing an approximate 2% additional sharing percentage, for the issuance of the Carbon California 2018 Subordinated Notes. Carbon California valued this unit issuance based on the relative fair value by valuing the units at $1,000 per unit and aggregating the amount with the outstanding Carbon California 2018 Subordinated Notes of $3.0 million. The Company then allocated the non-cash value of the units of approximately $490,000, which was recorded as a discount to the Carbon California 2018 Subordinated Notes. As of September 30, 2018, Carbon California had an outstanding discount of $454,000 associated with these notes, which is presented net of the Carbon California 2018 Subordinated Notes within Credit facility-related party on the unaudited consolidated balance sheets. During the three and nine months ended September 30, 2018, Carbon California amortized $97,000 and $236,000, respectively. The Carbon California 2018 Subordinated Notes require Carbon California, as of January 1 and July 1 of each year, to hedge its anticipated production at such time for year one, two and three at a rate of 67.5%, 58.5% and 45%, respectively. Prepayment of the Subordinated Notes is available after February 15, 2019. Prepayment is allowed at 100%, subject to a 3.0% fee of outstanding principal. Prepayment is not subject to a prepayment fee after February 17, 2020. Distributions to equity members are generally restricted. The Carbon California 2018 Subordinated Notes agreement requires Carbon California to maintain certain financial and non-financial covenants, which include the following ratios: total leverage ratio, senior leverage ratio, interest coverage ratio, asset coverage ratio, current ratio, and other qualitative covenants as defined in the Carbon California 2018 Subordinated Notes. As of September 30, 2018, Carbon California was in compliance with its financial covenants. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | Note 8 - Income Taxes We recognize 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. We have 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 September 30, 2018, we have established a full valuation allowance against the balance of net deferred tax assets. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | Note 9 - Stockholders’ Equity Authorized and Issued Capital Stock Effective March 15, 2017, and pursuant to a reverse stock split approved by the stockholders 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 September 30, 2018, we had 35.0 million shares of common stock authorized with a par value of $0.01 per share, of which approximately 7.7 million were issued and outstanding, and 1.0 million shares of preferred stock authorized with a par value of $0.01 per share. On April 6, 2018, the Company entered into a preferred stock purchase agreement with Yorktown for a private placement of 50,000 shares of the Preferred Stock for $5.0 million. During the nine months ended September 30, 2018, the increase in our issued and outstanding common stock is primarily due to (a) Yorktown’s exercise of the California Warrant (see note 3), resulting in the issuance of approximately 1.5 million shares of our common stock in exchange for Class A Units in Carbon California representing approximately 46.96% of the then outstanding Class A Units, in addition to (b) restricted stock and restricted performance units that vested during the year. Carbon Stock Incentive Plans We have two stock plans, the Carbon 2011 Stock Incentive Plan and the Carbon 2015 Stock Incentive Plan (collectively the “Carbon Plans”). The Carbon Plans were approved by our shareholders and in the aggregate provide for the issuance of approximately 1.1 million shares of common stock to our officers, directors, employees or consultants eligible to receive the awards under the Carbon Plans. The Carbon Plans provide for the granting of incentive stock options, non-qualified stock options, restricted stock awards, performance awards and phantom stock awards, or a combination of the foregoing, as to employees, officers, directors or consultants, provided that only employees may be granted incentive stock options and directors may only be granted restricted stock awards and phantom stock awards. Restricted Stock As of September 30, 2018, approximately 649,000 shares of restricted stock have been granted under the terms of the Carbon Plans. Restricted stock awards for employees vest ratably over a three-year service period or cliff vest at the end of a three-year service period. For non-employee directors, the awards vest upon the earlier of a change in control of us or the date their membership on the Board of Directors is terminated other than for cause. We recognize compensation expense for these restricted stock grants based on the 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). For restricted stock granted between 2014 and 2017, we recognized compensation expense based on the grant date fair value of the shares, utilizing an enterprise value approach, using valuation metrics primarily based on multiples of cash flow from operations, production and reserves. For restricted stock and performance units granted in 2013 and 2018, we utilized the closing price of our stock on the date of grant to recognize compensation expense. During the nine months ended September 30, 2018, approximately 59,000 restricted stock units vested. Compensation costs recognized for these restricted stock grants were approximately $189,000 and $537,000 for the three and nine months ended September 30, 2018, respectively. For the three and nine months ended September 30, 2017, we recognized compensation expense of approximately $160,000 and $513,000, respectively. As of September 30, 2018, there was approximately $1.6 million unrecognized compensation costs related to these restricted stock grants which we expect to be recognized over the next 6.5 years. In 2018 we utilized the traded value of our common stock on the date of grant instead of the enterprise value to record compensation expense related to new equity grants. Due to the price received for our Preferred Stock, we believe the closing price of our common stock is now a better representation of the fair value of our common stock, instead of the enterprise value used to record compensation expense related to new equity grants. Restricted Performance Units As of September 30, 2018, approximately 597,000 shares of performance units have been granted under the terms of the Carbon Plans. Performance units represent a contractual right to receive one share of our 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 as well as, in some cases, continued service requirements. We account for the performance units granted during 2014 through 2018 at their fair value determined at the date of grant, which were $11.80, $8.00, $5.40, $7.20 and $9.80 per share, respectively. The final measurement of compensation cost will be based on the number of performance units that ultimately vest. At September 30, 2018, we estimated that none of the performance units granted in 2016-2018 would vest, and, accordingly, no compensation cost has been recorded for these performance units. During 2016, we estimated that it was probable that the performance units granted in 2014 and 2015 would vest and therefore compensation costs of approximately $135,000 and $239,000 related to these performance units were recognized for the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, compensation costs related to the performance units granted in 2014 and 2015 have been fully recognized. As of September 30, 2018, if change in control and other performance provisions pursuant to the terms and conditions of these award agreements are met in full, the estimated unrecognized compensation cost related to the performance units granted in 2012 and 2016 through 2018 would be approximately $3.3 million. Preferred Stock Series B Convertible Preferred Stock – Related Party In connection with the closing of the Seneca Acquisition, we raised $5.0 million through the issuance of 50,000 shares of Preferred Stock to Yorktown. The Preferred Stock converts into common stock at the election of the holder or will automatically convert into shares of our common stock upon completion of a qualifying equity financing event. The number of shares of common stock issuable upon conversion is dependent upon the price per share of common stock issued in connection with any such qualifying equity financing but has a floor conversion price equal to $8.00 per share. The conversion ratio at which the Preferred Stock will convert into common stock is equal to an amount per share of $100 plus all accrued but unpaid dividends payable in respect thereof divided by the greater of (i) $8.00 per share or (ii) the price that is 15% less than the lowest price per share of shares sold to the public in the next equity financing. Using the floor of $8.00 per share would yield 12.5 shares of common stock for every unit of Preferred Stock. The conversion price will be proportionately increased or decreased to reflect changes to the outstanding shares of common stock, such as the result of a combination, reclassification, subdivision, stock split, stock dividend or other similar transaction involving the common stock. Additionally, after the third anniversary of the issuance of the Preferred Stock, we have the option to redeem the shares for cash. The Preferred Stock accrues cash dividends at a rate of six percent (6%) of the initial issue price of $100 per share per annum. The holders of the Preferred Stock are entitled to the same number of votes of common stock that such share of Preferred Stock would represent on an as converted basis. The holders of the Preferred Stock receive liquidation preference based on the initial issue price of $100 per share plus any accrued dividends over common stock holders and the holders of any junior ranking stock. As of September 30, 2018, we accrued $147,000 of dividends. We apply the guidance in ASC 480 “ Distinguishing Liabilities from Equity We have evaluated the Preferred Stock in accordance with ASC 815, “ Derivatives and Hedging Debt |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 10 - Revenue Recognition Revenue from Contracts with Customers We recognize revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration we expect to receive in exchange for those products. Revenues from contracts with customers are recorded on the unaudited consolidated statements of operations based on the type of product being sold. Performance Obligations and Significant Judgments We sell oil and natural gas products in the United States through a single reportable segment. We primarily sell products within two regions of the United States: Appalachia and Illinois Basins and the Ventura Basin. We enter into contracts that generally include one type of distinct product in variable quantities and priced based on a specific index related to the type of product. Most of our contract pricing provisions are tied to a market index, with certain adjustments based on, among other factors, whether a well delivers to a gathering or transmission line, quality of the oil or natural gas, and prevailing supply and demand conditions. Transfer of control drives the presentation of transportation and gathering costs within the accompanying unaudited consolidated statements of operations. Transportation and gathering costs incurred prior to control transfer are recorded within the transportation and gathering expense line item on the accompanying unaudited consolidated statements of operations, while transportation and gathering costs incurred subsequent to control transfer are recognized as a reduction to the related revenue. A portion of our product sales are short-term in nature. For those contracts, we use the practical expedient in ASC 606-10-50-14 exempting us from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. For our product sales that have a contract term greater than one year, we have utilized the practical expedient in ASC 606-10-50-14(a) which states we are not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to an unsatisfied performance obligation. Under these sales contracts, each unit of product represents a separate performance obligation; therefore, future volumes are unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. We have no unsatisfied performance obligations at the end of each reporting period. We do not believe that significant judgments are required with respect to the determination of the transaction price, including any variable consideration identified. There is a low level of uncertainty due to the precision of measurement and use of index-based pricing with predictable differentials. Additionally, any variable consideration identified is not constrained. Disaggregation of Revenues In the following tables, revenue for the three and nine months ended September 30, 2018, is disaggregated by primary region within the United States and major product line. As noted above, we operate as one reportable segment. For the three months ended September 30, 2018: (in thousands) Type Appalachia and Illinois Basin Ventura Basin Total Natural gas sales $ 3,856 $ 516 $ 4,372 Natural gas liquids sales - 406 406 Oil sales 3,327 8,524 11,850 Total natural gas, natural gas liquids, and oil revenue $ 7,185 $ 9,444 $ 16,629 For the nine months ended September 30, 2018: (in thousands) Type Appalachia and Illinois Basin Ventura Basin Total Natural gas sales $ 10,776 $ 1,059 $ 11,835 Natural gas liquids sales - 1,119 1,119 Oil sales 5,952 16,972 22,924 Total natural gas, natural gas liquids, and oil revenue $ 16,728 $ 19,150 $ 35,878 Contract Balances Under our product sales contracts, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our product sales contracts do not typically give rise to contract assets or liabilities under ASC 606. Prior Period Performance Obligations We record revenue in the month production is delivered to the purchaser, but settlement statements may not be received until 30 to 90 days after the month of production. As such, we estimate the production delivered and the related pricing. Any differences between our initial estimates and actuals are recorded in the month payment is received from the customer. These differences have not historically been material. For the three and nine months ended September 30, 2018, revenue recognized in the reporting period related to prior period performance obligations is immaterial. The estimated revenue is recorded within Accounts receivable - Revenue on the unaudited consolidated balance sheets. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Accounts Payable and Accrued Liabilities | Note 11 - Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consist of the following: September 30, December 31, Accounts payable $ 3,923 $ 3,274 Oil and gas revenue suspense 2,111 1,776 Gathering and transportation payables 817 497 Production taxes payable 375 214 Drilling advances received from joint venture partner 295 245 Accrued lease operating expenses 946 684 Accrued ad valorem taxes-current 1,704 1,054 Accrued general and administrative expenses 1,085 2,473 Accrued asset retirement obligation-current 902 380 Accrued interest 633 247 Accrued environmental liability 728 - Other liabilities 859 374 Total accounts payable and accrued liabilities $ 14,378 $ 11,218 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 12 - 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 us. Unobservable inputs are inputs that reflect our assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in 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. Our policy is to recognize transfers in and/or out of fair value hierarchy as of the end of the reporting period for which the event or change in circumstances caused the transfer. We have consistently applied the valuation techniques discussed below for all periods presented. The following table presents our financial assets and liabilities that were accounted for at fair value on a recurring basis by level within the fair value hierarchy: Fair Value Measurements Using (in thousands) Level 1 Level 2 Level 3 Total September 30, 2018 Liabilities Commodity derivatives $ - $ 10,801 $ - $ 10,801 December 31, 2017 Asset: Commodity derivatives $ - $ 225 $ - $ 225 Liabilities Warrant derivative liability $ - $ - $ 2,017 $ 2,017 Commodity Derivative As of September 30, 2018, our commodity derivative financial instruments are comprised of natural gas and oil swaps and costless collars. The fair values of these agreements are determined under an income valuation technique. The valuation model requires a variety of inputs, including contractual terms, published forward prices, volatilities for options and discount rates, as appropriate. Our estimates of fair value of derivatives include consideration of the counterparty’s credit worthiness, our credit worthiness and the time value of money. The consideration of these factors results 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, our derivative instruments are included within the Level 2 fair value hierarchy. The counterparty for all our outstanding commodity derivative financial instruments as of September 30, 2018, is BP Energy Company. Warrant Derivative A third-party valuation specialist was utilized to determine the fair value our California Warrant. The warrant was designated as Level 3. We review the valuations, including the related model inputs and assumptions, and analyze changes in fair value measurements between periods. We corroborate such inputs, calculations and fair value changes using various methodologies, and review unobservable inputs for reasonableness utilizing relevant information from other published sources. We 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 we will receive Class A Units in Carbon California in the event the holder exercises the California Warrant, we also considered the fair value of the Class A Units in its valuation. We utilized the same measurement as of December 31, 2017 for January 31, 2018, using a Monte Carlo valuation model which utilized unobservable inputs including the percentage return on our shares at various timelines, the percentage return on the privately-held Carbon California Class A Units at various timelines, an exercise price of $7.20, volatility rate of 45%, a risk-free rate of 2.1% and an estimated remaining term of 6.4 years. As of December 31, 2017, the fair value of the California Warrant was approximately $2.0 million. On February 1, 2018, Yorktown exercised the California Warrant, resulting in the issuance of 1,527,778 shares of our common stock. In exchange, we received Yorktown’s Class A Units of Carbon California representing approximately 46.96% of the outstanding Class A Units of Carbon California and a profits interest of approximately 38.59%. The following table summarizes the changes in fair value of our financial instruments classified as Level 3 in the fair value hierarchy: (in thousands) Total Balance, December 31, 2017 $ 2,017 Warrant derivative gain for the period January 1- January 31, 2018 (225 ) CCC Warrant Exercise - liability extinguishment (1,792 ) Balance, September 30, 2018 $ - Assets and Liabilities Measured and Recorded at Fair Value on a Non-Recurring Basis The fair value of each of the following assets and 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. We use 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 nine months ended September 30, 2018 and 2017, we recorded approximately $4.1 million and $5,000, in additions to asset retirement obligations, respectively. Additions during the nine months ended September 30, 2018, primarily related to the Carbon California Acquisition. See note 3 for additional information. The exercise of the California Warrant and the acquisition of the additional ownership interest in Carbon California on February 1, 2018, is accounted for as a step acquisition in which we obtained control in accordance with ASC 805, Business Combinations We assume, at times, certain firm transportation contracts as part of our acquisitions of oil and natural gas properties. The fair value of the firm transportation obligations was determined based upon the contractual obligations assumed by us and discounted based upon our effective borrowing rate. These contractual obligations are being amortized monthly as we pay these firm transportation obligations in the future. Asset Retirement Obligation The fair value of our asset retirement obligation liability is recorded in the period in which it is incurred or assumed by taking into account the cost of abandoning oil and gas wells ranging from $15,000 to $45,000, which is based on industry expectations for similar work; the estimated timing of reclamation ranging from one to 75 years based on estimates from reserve engineers; an inflation rate of 1.92%; and a credit adjusted risk-free rate of 7.24%, which takes into account our credit risk and the time value of money. Given the unobservable nature of the inputs, the initial measurement of the asset retirement obligation liability is deemed to use Level 3 inputs (see note 3). During the nine months ended September 30, 2018, we recorded additions to asset retirement obligations of approximately $4.1 million, primarily due to the Carbon California Acquisition. Carbon California estimates 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. Carbon California’s asset retirement obligation was calculated by taking into account the cost of abandoning oil and gas wells based on industry expectations for similar work, the economic lives of its properties between 1-49 years; an inflation rate between 2.01% and 2.03%; and a credit adjusted risk-free rate between 8.09% and 15.5%. Class B Units We received Class B Units from Carbon California and Carbon Appalachia as part of the entry into the Carbon California LLC and Carbon Appalachia LLC agreements. We estimated the fair value of the Class B units, in each case, by utilizing the assistance of third-party valuation specialists. The fair values were based upon enterprise values derived from inputs including estimated future production rates, future commodity prices including price differentials as of the dates of closing, future operating and development costs and comparable market participants. |
Physical Delivery Contracts and
Physical Delivery Contracts and Gas Derivatives | 9 Months Ended |
Sep. 30, 2018 | |
Physical Delivery Contracts and Gas Derivatives [Abstract] | |
Physical Delivery Contracts and Gas Derivatives | Note 13 - Physical Delivery Contracts and Gas Derivatives We historically have used commodity-based derivative contracts to manage exposures to commodity price on certain of our oil and natural gas production. We do not hold or issue derivative financial instruments for speculative or trading purposes. We also have entered into fixed price 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 condensed consolidated financial statements. Pursuant to the terms of our credit facility, the Note Purchase Agreements and the Securities Purchase Agreement, we have entered into swap and collar derivative agreements to hedge certain of our oil and natural gas production through 2021. As of September 30, 2018, these derivative agreements consisted of the following: Our Physical Delivery Contracts and Oil and Gas Derivatives Natural Gas Swaps Natural Gas Collars Oil Swaps Weighted Weighted Weighted Average Average Price Average Year MMBtu Price (a) MMBtu Range (a) Bbl Price (b) 2018 870,000 $ 3.00 - - 23,000 $ 55.09 2019 2,596,000 $ 2.86 204,000 $2.60-$2.80 61,900 $ 56.05 2020 1,018,000 $2.50-$2.70 21,000 $ 60.72 (a) NYMEX Henry Hub Natural Gas futures contract for the respective period. (b) NYMEX Light Sweet Crude West Texas Intermediate futures contract for the respective period. Carbon California Physical Delivery Contracts and Oil and Gas Derivatives Natural Gas Swaps Natural Gas Collars Oil Swaps Weighted Weighted Weighted Weighted Average Average Price WTI Average Brent Average Year MMBtu Price (a) MMBtu Range (a) Bbl Price (b) Bbl Price (c) 2018 90,000 $ 3.03 - - 48,628 $ 53.06 62,792 $ 66.46 2019 - $ - 360,000 $2.60-$3.03 139,797 $ 51.96 141,786 $ 66.58 2020 - $ - - - 73,147 $ 50.12 139,682 $ 65.71 2021 - $ - - - $ - 86,341 $ 67.12 (a) NYMEX Henry Hub Natural Gas futures contract for the respective period. (b) NYMEX Light Sweet Crude West Texas Intermediate futures contract for the respective period. (c) Brent future and NYMEX contracts for the respective period. For our swap instruments, we receive a fixed price for the hedged commodity and pay 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. Costless collars are designed to establish floor and ceiling prices on anticipated future oil and gas production. The ceiling establishes a maximum price that we will receive for the volumes under contract, while the floor establishes a minimum price. The following table summarizes the fair value of the derivatives recorded in the unaudited consolidated balance sheets (see note 12). These derivative instruments are not designated as cash flow hedging instruments for accounting purposes: (in thousands) September 30, December 31, Commodity derivative contracts: Commodity derivative asset $ - $ 215 Other long-term assets $ - $ 10 Commodity derivative liabilities $ 6,502 $ - Commodity derivative liabilities, non-current $ 4,299 $ - The table below summarizes the commodity settlements and unrealized gains and losses related to our derivative instruments. These commodity settlements and unrealized gains and losses are recorded and included in commodity derivative gain or loss in the accompanying unaudited consolidated statements of operations. For the three months ended For the nine months ended (in thousands) 2018 2017 2018 2017 Commodity derivative contracts: Settlement (loss) gain $ (1,108 ) $ 345 $ (2,169 ) $ 463 Unrealized (loss) gain (2,794 ) (844 ) (8,381 ) 2,179 Total settlement and unrealized (loss) gain, net $ (3,902 ) $ (499 ) $ (10,550 ) $ 2,642 Commodity derivative settlement gains and losses are included in cash flows from operating activities in our unaudited consolidated statements of cash flows. The counterparty in all our derivative instruments is BP Energy Company. We and Carbon California have entered into International Swaps and Derivatives Association (“ISDA”) Master Agreements with BP Energy Company that establish standard terms for the derivative contracts and inter-creditor agreements whereby any credit exposure related to the derivative contracts entered into by us and BP Energy Company is secured by the collateral and backed by the guarantees supporting the credit facility. We and Carbon California net our derivative instrument fair value amounts executed with BP Energy Company pursuant to ISDA master agreements, which provide 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 sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the unaudited consolidated balance sheets as of September 30, 2018. Net Gross Recognized Recognized Gross Fair Value Assets/ Amounts Assets/ Balance Sheet Classification Liabilities Offset Liabilities Commodity derivative assets: Commodity derivative $ 334 $ (334 ) $ - Other long-term assets 248 (248 ) - Total derivative assets $ 582 $ (582 ) $ - Commodity derivative liabilities: Commodity derivative $ (6,836 ) $ 334 $ (6,502 ) Commodity derivative: non-current (4,547 ) 248 (4,299 ) Total derivative liabilities $ (11,383 ) $ 582 $ (10,801 ) The following table summarizes the location and fair value amounts of all derivative instruments in the consolidated balance sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the consolidated balance sheets as of December 31, 2017. Net Gross Recognized Recognized Gross Fair Value Assets/ Amounts Assets/ Balance Sheet Classification Liabilities Offset Liabilities Commodity derivative assets: Commodity derivative $ 624 $ (409 ) $ 215 Other long-term assets 250 (240 ) 10 Total derivative assets $ 874 $ (649 ) $ 225 Commodity derivative liabilities: Commodity derivative $ (409 ) $ 409 $ - Commodity derivative: non-current (240 ) 240 - Total derivative liabilities $ (649 ) $ 649 $ - Due to the volatility of oil and natural gas prices, the estimated fair values of our derivatives are subject to large fluctuations from period to period. |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitment and Contingencies [Abstract] | |
Commitment and Contingencies | Note 14 – Commitment and Contingencies We have entered into employment agreements with certain of our executives and officers. The term of the agreements generally ranges from one to two years and provides 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. We have entered into long-term firm transportation contracts to ensure the transport for certain of our gas production to purchasers. Firm transportation volumes and the related demand charges for the remaining term of these contracts at September 30, 2018 are summarized in the table below. Period Dekatherms per day Demand Charges October 2018 - March 2020 3,230 $ 0.20 - $0.62 April 2020 - May 2020 2,150 $ 0.20 June 2020 - May 2036 1,000 $ 0.20 A liability of approximately $166,000 related to firm transportation contracts assumed in the EXCO Acquisition in 2016, is reflected on our unaudited consolidated balance sheets as of September 30, 2018. The fair value of these firm transportation obligations was determined based upon the contractual obligations assumed upon acquisition by us and discounted based upon our effective borrowing rate. These contractual obligations are being amortized monthly as they become due. Capital Commitment In our participation as a Class A member of Carbon Appalachia we made a capital commitment of $23.6 million, of which we have contributed $6.9 million as of September 30, 2018. As of September 30, 2018, we had no capital commitments associated with Carbon California. Contingency During March 2018, we became aware through our internal control system that one of our field employees had been misappropriating funds from our suspended revenue accounts over a period of several years. Upon the discovery of the misappropriation, we terminated the employee and engaged an external forensic specialist to lead an investigation to determine the extent of the misappropriation and the impact on our financial statements. The investigation determined that the employee’s ability to misappropriate funds from the suspense accounts was eliminated in 2017 when we instituted our current revenue accounting practices and internal controls. We have recorded a provision at September 30, 2018, to reflect the estimated loss of suspended revenue. We have determined that this event constituted a significant deficiency. |
Supplemental Cash Flow Disclosu
Supplemental Cash Flow Disclosure | 9 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flow Disclosure [Abstract] | |
Supplemental Cash Flow Disclosure | Note 15 - Supplemental Cash Flow Disclosure Supplemental cash flow disclosures are presented below: Nine Months Ended (in thousands) 2018 2017 Cash paid during the period for: Interest $ 2,770 $ 645 Non-cash transactions: Increase in asset retirement obligations $ 3,590 $ 5 Decrease in accounts payable and accrued liabilities included in oil and gas properties $ (491 ) $ (12 ) Non-cash acquisition of Carbon California interests (see note 3) $ (18,906 ) $ - Carbon California Acquisition on February 1, 2018 (see note 3) $ 17,114 $ - Obligations assumed with Seneca asset purchase (see note 2) $ 330 $ - Accrued dividend for convertible preferred stock (see note 9) $ 148 $ - Beneficial conversion feature for convertible preferred stock (see note 9) $ 1,125 $ - Issuance of warrants for investment in affiliates $ - $ 7,094 Exercise of warrant derivative (see note 3) $ (1,792 ) $ - |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements 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 the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments considered necessary to present fairly our financial position as of September 30, 2018, and our results of operations and cash flows for the three and nine months ended September 30, 2018 and 2017. Operating results for the three and nine months ended September 30, 2018, 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, seasonality, and other factors. The unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q should be read in conjunction with our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2017. Except as disclosed herein, there have been no material changes to the information disclosed in the notes to the consolidated financial statements included in our 2017 Annual Report on Form 10-K. |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Carbon, Carbon California, 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. Carbon owns 53.9% of Carbon California and Prudential owns 46.1% voting and profits interest in Carbon California. Nytis LLC also holds an interest in 64 oil and gas partnerships. For the 47 partnerships where we have a controlling interest, the partnerships are consolidated. In these instances, we reflect the non-controlling ownership interest in partnerships and subsidiaries as non-controlling interests on our unaudited consolidated statements of operations, non-controlling ownership interests in the net assets of the partnerships as non-controlling interests within stockholders’ equity on our unaudited consolidated balance sheets. All significant intercompany accounts and transactions have been eliminated. In accordance with established practice in the oil and gas industry our unaudited condensed consolidated financial statements also include our pro-rata share of assets, liabilities, income, lease operating costs and general and administrative expenses of the oil and gas partnerships in which we have a non-controlling interest. Non majority interest owned investments that do not meet the criteria for pro-rata consolidation are accounted for using the equity method when we have the ability to significantly influence the operating decisions of the investee. When we do 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 unaudited condensed consolidated financial statements. Effective February 1, 2018, Yorktown exercised the California Warrant, which resulted in us acquiring Yorktown’s ownership interest in Carbon California in exchange for shares of our common stock. On May 1, 2018, Carbon California closed the Seneca Acquisition. Following the exercise of the California Warrant by Yorktown and the Seneca Acquisition, we own 53.9%, of the voting and profits interests, and Prudential owns 46.1%. |
Insurance Receivable | Insurance Receivable Insurance receivable is comprised of insurance claims for the loss of property as a result of wildfires that impacted Carbon California in December 2017. The Company filed claims with its insurance provider and is in receipt of a portion of partial funds associated with the claims as of September 30, 2018. Therefore, the Company has determined the receivable is collectible and is included in insurance receivable on the unaudited consolidated balance sheets. As of September 30, 2018, the Company has an insurance receivable of $871,000 and collected $2.7 million from the previously submitted claims. |
Long-term Assets | Long-term Assets Long-term assets are comprised of (i) debt issuance costs, (ii) bonds, and (iii) deferred registration fees associated with a registration statement for a possible equity offering of the Company’s Common Stock. We have recorded debt issuance costs and amortize the balance over the life of the loan. As of September 30, 2018, we have within non-current assets approximately $1.7 million of deferred financing costs associated with our credit facility and with Carbon California’s Senior Revolving Notes (note 7). As of September 30, 2018, we have incurred approximately $1.9 million for outside professional services in conjunction with the preparation of the completion of a registration statement associated with the possible offering. We will continue to accumulate deferred financing costs until the completion of the registration statement and a successful equity offering is commenced which at that time will be recognized as a financing charge and applied against the equity component of the transaction. If the raise is unsuccessful, the amount will be expensed in the current period. |
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 nine months ended September 30, 2018, the Company did not recognize a ceiling test impairment as the Company’s full cost pool did not exceed the ceiling limitations. For the three months ended September 30, 2017, the Company did not recognize a ceiling test impairment as the Company’s full cost pool did not exceed the ceiling limitations. |
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 we have 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 do 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 we hold 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 can exert significant influence or control (e.g., through our 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. Equity method investments will increase or decrease by our share of the affiliate’s profits or losses and such profits or losses are recognized in our unaudited consolidated statements of operations. For our equity method investment in Carbon Appalachia, we use the hypothetical liquidation at book value method to recognize our share of the affiliate’s profits or losses. We review 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 Management Reimbursements In our role as manager of Carbon California and Carbon Appalachia, we received reimbursements for the provision of management from Carbon Appalachia of approximately $744,000 and $2.3 million for the three and nine months ended September 30, 2018, and $50,000 for the one month ended January 31, 2018, from Carbon California. These reimbursements are included in general and administrative - related party reimbursement on our unaudited consolidated statements of operations. Effective February 1, 2018, the management reimbursement received from Carbon California is eliminated at consolidation. This elimination was $650,000 for the period February 1, 2018 through September 30, 2018. In addition to the management reimbursements, approximately $376,000 and $1.1 million in general and administrative expenses were reimbursed for the three and nine months ended September 30, 2018, from Carbon Appalachia, and $14,000 for the one month ended January 31, 2018, from Carbon California. General and administrative expenses reimbursed by Carbon California and eliminated upon consolidation were approximately $42,000 for the period February 1, 2018, through September 30, 2018. Operating Reimbursements In our role as operator of Carbon Appalachia, we receive reimbursements of operating expenses. These expenses are recorded directly to receivable - related party on our unaudited consolidated balance sheets and are therefore not included in our operating expenses on our unaudited consolidated statements of operations. Carbon California Credit Facilities The credit facilities of Carbon California, including the Senior Revolving Notes, Carbon California Notes and Carbon California 2018 Subordinated Notes (all defined below), are held by Prudential Legacy Insurance Company of New Jersey and Prudential Insurance Company of America or its affiliates (“Prudential”). See note 7. Preferred Stock In April 2018, we issued 50,000 shares of Preferred Stock to Yorktown in conjunction with our Seneca Acquisition. See note 9. Old Ironsides Membership Interest Purchase Agreement On May 4, 2018, we entered into a Membership Interest Purchase Agreement with Old Ironsides to acquire all of Old Ironsides’ membership interests of Carbon Appalachia. Following the closing of the transaction we will own 100% of the issued and outstanding ownership in Carbon Appalachia and Carbon Appalachia will become a wholly-owned subsidiary of ours. See note 6. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to makes estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. There have been no changes in our critical accounting estimates from those that were disclosed in the 2017 Annual Report on Form 10-K. Actual results could differ from these estimates. |
Earnings (Loss) Per Common Share | Earnings (Loss) Per Common Share Basic earnings per common share is computed by dividing the net income (loss) attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. The shares of restricted stock granted to our officers, directors and employees are included in the computation of basic net income per share only after the shares become fully vested. Diluted earnings per common share includes both the vested and unvested shares of restricted. We issued 50,000 shares of Series B Convertible Preferred Stock, par value $0.01 per share (the “Preferred Stock”), and the difference between the carrying amount of the Preferred Stock in equity and the fair value of the Preferred Stock) is treated as a dividend for purposes of calculating earnings per common share. The Preferred Stock deemed dividend could potentially dilute basic earnings per common share in the future. In periods when we report a net loss, all shares of restricted stock are excluded from the calculation of diluted weighted average shares outstanding because of its anti-dilutive effect on loss per share. As a result, all restricted stock is excluded from the calculation of diluted earnings per common share for the three months ended September 30, 2018. Potentially dilutive securities (restricted stock awards) included in the calculation of diluted earnings per share totaled 315,040 for the three months ended September 30, 2018. Potentially dilutive securities that are anti-dilutive totaled 315,040 for the three months ended September 30, 2018 and 901,109 for the three months ended September 30, 2017. The dilutive units did not have a material impact on our earnings per common share calculations for any of the periods presented. The following table sets forth the calculation of basic and diluted income per share: Three months ended Nine months ended (in thousands except per share amounts) 2018 2017 2018 2017 Net income (loss) attributable to controlling interest $ (725 ) $ (462 ) $ 2,264 $ 4,834 Less: warrant derivative gain - - (225 ) (2,494 ) Less: deemed dividend for convertible preferred shares (77 ) - (147 ) - Less: beneficial conversion feature - - (1,125 ) - Diluted net (loss) income $ (802 ) $ (462 ) $ 767 $ 2,340 Basic weighted-average common shares outstanding during the period 7,701 5,628 7,466 5,579 Add dilutive effects of warrants and non-vested shares of restricted stock - - 315 907 Diluted weighted-average common shares outstanding during the period 7,701 5,628 7,781 6,486 Basic net (loss) income per common share $ (0.09 ) $ (0.08 ) $ 0.30 $ 0.87 Diluted net (loss) income per common share $ (0.10 ) $ (0.08 ) $ 0.10 $ 0.36 |
Recently Adopted Accounting Pronouncement | Recently Adopted Accounting Pronouncement In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “ Leases There were various updates recently issued by the FASB, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on our reported financial position, results of operations, or cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of basic and diluted income (loss) per share | Three months ended Nine months ended (in thousands except per share amounts) 2018 2017 2018 2017 Net income (loss) attributable to controlling interest $ (725 ) $ (462 ) $ 2,264 $ 4,834 Less: warrant derivative gain - - (225 ) (2,494 ) Less: deemed dividend for convertible preferred shares (77 ) - (147 ) - Less: beneficial conversion feature - - (1,125 ) - Diluted net (loss) income $ (802 ) $ (462 ) $ 767 $ 2,340 Basic weighted-average common shares outstanding during the period 7,701 5,628 7,466 5,579 Add dilutive effects of warrants and non-vested shares of restricted stock - - 315 907 Diluted weighted-average common shares outstanding during the period 7,701 5,628 7,781 6,486 Basic net (loss) income per common share $ (0.09 ) $ (0.08 ) $ 0.30 $ 0.87 Diluted net (loss) income per common share $ (0.10 ) $ (0.08 ) $ 0.10 $ 0.36 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |
Schedule of fair value of business acquired | Amount Fair value of Carbon common shares transferred as consideration $ 8,326 Fair value of NCI 16,466 Fair value of previously held interest 7,244 Fair value of business acquired $ 32,036 |
Schedule of assets acquired and liabilities assumed | Amount Cash $ 275 Accounts receivable: Joint interest billings and other 690 Receivable - related party 1,610 Prepaid expense, deposits, and other current assets 1,723 Oil and gas properties: Proved 56,477 Unproved 1,495 Other property and equipment, net 877 Other long-term assets 475 Accounts payable and accrued liabilities (6,054 ) Commodity derivative liability - short-term (916 ) Commodity derivative liability - long-term (1,729 ) Asset retirement obligations - short-term (384 ) Asset retirement obligations - long-term (2,537 ) Subordinated Notes, related party, net (8,874 ) Senior Revolving Notes, related party (11,000 ) Notes payable (92 ) Total net assets acquired $ 32,036 |
Schedule of unaudited pro-forma consolidated results | Unaudited Pro Forma Unaudited Pro Forma (in thousands, except per share amounts) 2018 2017 2018 2017 Revenue $ 12,742 $ 11,227 $ 33,256 $ 35,122 Net (loss) income before non-controlling interests (455 ) (1,518 ) 5,232 13,969 Net (loss) income attributable to non-controlling interests 270 16 (2,334 ) 92 Net (loss) income attributable to controlling interests $ (725 ) $ (1,534 ) $ 7,566 $ 13,877 Net income per share (basic) $ (0.09 ) $ (0.27 ) $ 1.00 $ 2.49 Net income per share (diluted) $ (0.10 ) $ (0.27 ) $ .96 $ 2.14 |
Seneca Acquisition [Member] | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |
Schedule of assets acquired and liabilities assumed | Identifiable assets acquired: Proved oil and gas properties $ 37,386 Unproved oil and gas properties 100 Other property and equipment 545 Intangible assets 300 Total identified assets $ 38,331 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property and Equipment [Abstract] | |
Schedule of net property and equipment | (in thousands) September 30, December 31, Oil and gas properties: Proved oil and gas properties $ 215,620 $ 114,893 Unproved properties not subject to depletion 3,616 1,947 Accumulated depreciation, depletion, amortization and impairment (87,527 ) (80,715 ) Net oil and gas properties 131,709 36,125 Furniture and fixtures, computer hardware and software, and other equipment 3,783 1,758 Accumulated depreciation and amortization (1,794 ) (1,021 ) Net other property and equipment 1,989 737 Total net property and equipment $ 133,698 $ 36,862 |
Schedule of unproved oil and gas properties | (in thousands) September 30, December 31, Ventura Basin $ 1,595 $ - Illinois Basin: Indiana 432 432 Illinois 142 136 Appalachian Basin: Kentucky 952 915 Ohio 66 66 West Virginia 429 398 Total unproved properties not subject to depletion $ 3,616 $ 1,947 |
Asset Retirement Obligation (Ta
Asset Retirement Obligation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Asset Retirement Obligation [Abstract] | |
Summary of reconciliation of the ARO | Nine Months Ended (in thousands) 2018 2017 Balance at beginning of period $ 7,737 $ 5,120 Accretion expense 510 232 Additions from Carbon California Company, LLC 2,921 - Additions from Seneca Acquisition 639 - Additions from Liberty Acquisition 30 - Additions during period - 5 Obligations on sale of oil & gas properties - (93 ) 11,837 5,264 Less: ARO recognized as a current liability (902 ) (144 ) Balance at end of period $ 10,935 $ 5,120 |
Investments in Affiliates (Tabl
Investments in Affiliates (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Schedule of Equity Method Investments [Line Items] | |
Schedule of company's contributions | Date Capital Resulting Class A Resulting April 2017 $0.24 million 2.00 % 2.98 % August 2017 $3.71 million 15.20 % 16.04 % September 2017 $2.92 million 18.55 % 19.37 % November 2017 Warrant exercise 26.50 % 27.24 % |
Schedule of selected historical unaudited financial data for Carbon Appalachia | (in thousands) As of Current assets $ 22,478 Total oil and gas properties, net $ 81,833 Total other property and equipment, net $ 15,880 Other long-term assets $ 1,302 Current liabilities $ 15,313 Non-current liabilities $ 61,234 Total members’ equity $ 44,946 Three months Three months (in thousands) September 30, September 30, Revenues $ 18,058 $ 1,348 Operating expenses 16,686 2,691 Income (loss) from operations 1,372 (1,344 ) Net income (loss) $ 537 $ (1,546 ) Nine months April 3, (in thousands) September 30, September 30, Revenues $ 62,480 $ 2,905 Operating expenses 56,441 4,449 Income (loss) from operations 6,039 (1,544 ) Net income (loss) $ 4,017 $ (1,874 ) |
Credit Facilities (Tables)
Credit Facilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Credit Facilities [Abstract] | |
Schedule of notes payable outstanding | Senior Revolving Notes, related party, due February 15, 2022 $ 38,500 Subordinated Notes, related party, due February 15, 2024 13,000 Long-term debt 65 Total gross notes payable 51,565 Less: Deferred notes costs (220 ) Less: Notes discount (1,284 ) Total net notes payable $ 50,061 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition [Abstract] | |
Schedule of disaggregation of revenue | For the three months ended September 30, 2018: (in thousands) Type Appalachia and Illinois Basin Ventura Basin Total Natural gas sales $ 3,856 $ 516 $ 4,372 Natural gas liquids sales - 406 406 Oil sales 3,327 8,524 11,850 Total natural gas, natural gas liquids, and oil revenue $ 7,185 $ 9,444 $ 16,629 For the nine months ended September 30, 2018: (in thousands) Type Appalachia and Illinois Basin Ventura Basin Total Natural gas sales $ 10,776 $ 1,059 $ 11,835 Natural gas liquids sales - 1,119 1,119 Oil sales 5,952 16,972 22,924 Total natural gas, natural gas liquids, and oil revenue $ 16,728 $ 19,150 $ 35,878 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Summary of accounts payable and accrued liabilities | September 30, December 31, Accounts payable $ 3,923 $ 3,274 Oil and gas revenue suspense 2,111 1,776 Gathering and transportation payables 817 497 Production taxes payable 375 214 Drilling advances received from joint venture partner 295 245 Accrued lease operating expenses 946 684 Accrued ad valorem taxes-current 1,704 1,054 Accrued general and administrative expenses 1,085 2,473 Accrued asset retirement obligation-current 902 380 Accrued interest 633 247 Accrued environmental liability 728 - Other liabilities 859 374 Total accounts payable and accrued liabilities $ 14,378 $ 11,218 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Measurements [Abstract] | |
Summary of financial assets and liabilities at fair value | Fair Value Measurements Using (in thousands) Level 1 Level 2 Level 3 Total September 30, 2018 Liabilities Commodity derivatives $ - $ 10,801 $ - $ 10,801 December 31, 2017 Asset: Commodity derivatives $ - $ 225 $ - $ 225 Liabilities Warrant derivative liability $ - $ - $ 2,017 $ 2,017 |
Summary of changes in fair value of financial instruments | (in thousands) Total Balance, December 31, 2017 $ 2,017 Warrant derivative gain for the period January 1- January 31, 2018 (225 ) CCC Warrant Exercise - liability extinguishment (1,792 ) Balance, September 30, 2018 $ - |
Physical Delivery Contracts a_2
Physical Delivery Contracts and Gas Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivatives, Fair Value [Line Items] | |
Schedule of swap derivative agreements | Natural Gas Swaps Natural Gas Collars Oil Swaps Weighted Weighted Weighted Average Average Price Average Year MMBtu Price (a) MMBtu Range (a) Bbl Price (b) 2018 870,000 $ 3.00 - - 23,000 $ 55.09 2019 2,596,000 $ 2.86 204,000 $2.60-$2.80 61,900 $ 56.05 2020 1,018,000 $2.50-$2.70 21,000 $ 60.72 (a) NYMEX Henry Hub Natural Gas futures contract for the respective period. (b) NYMEX Light Sweet Crude West Texas Intermediate futures contract for the respective period. |
Schedule of fair value of the derivatives recorded | (in thousands) September 30, December 31, Commodity derivative contracts: Commodity derivative asset $ - $ 215 Other long-term assets $ - $ 10 Commodity derivative liabilities $ 6,502 $ - Commodity derivative liabilities, non-current $ 4,299 $ - |
Schedule of realized and unrealized gains and losses | For the three months ended For the nine months ended (in thousands) 2018 2017 2018 2017 Commodity derivative contracts: Settlement (loss) gain $ (1,108 ) $ 345 $ (2,169 ) $ 463 Unrealized (loss) gain (2,794 ) (844 ) (8,381 ) 2,179 Total settlement and unrealized (loss) gain, net $ (3,902 ) $ (499 ) $ (10,550 ) $ 2,642 |
Schedule of fair value amounts of all derivative instruments assets and liabilities | The following table summarizes the location and fair value amounts of all derivative instruments in the unaudited consolidated balance sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the unaudited consolidated balance sheets as of September 30, 2018. Net Gross Recognized Recognized Gross Fair Value Assets/ Amounts Assets/ Balance Sheet Classification Liabilities Offset Liabilities Commodity derivative assets: Commodity derivative $ 334 $ (334 ) $ - Other long-term assets 248 (248 ) - Total derivative assets $ 582 $ (582 ) $ - Commodity derivative liabilities: Commodity derivative $ (6,836 ) $ 334 $ (6,502 ) Commodity derivative: non-current (4,547 ) 248 (4,299 ) Total derivative liabilities $ (11,383 ) $ 582 $ (10,801 ) The following table summarizes the location and fair value amounts of all derivative instruments in the consolidated balance sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the consolidated balance sheets as of December 31, 2017. Net Gross Recognized Recognized Gross Fair Value Assets/ Amounts Assets/ Balance Sheet Classification Liabilities Offset Liabilities Commodity derivative assets: Commodity derivative $ 624 $ (409 ) $ 215 Other long-term assets 250 (240 ) 10 Total derivative assets $ 874 $ (649 ) $ 225 Commodity derivative liabilities: Commodity derivative $ (409 ) $ 409 $ - Commodity derivative: non-current (240 ) 240 - Total derivative liabilities $ (649 ) $ 649 $ - |
Carbon California [Member] | |
Derivatives, Fair Value [Line Items] | |
Schedule of swap derivative agreements | Natural Gas Swaps Natural Gas Collars Oil Swaps Weighted Weighted Weighted Weighted Average Average Price WTI Average Brent Average Year MMBtu Price (a) MMBtu Range (a) Bbl Price (b) Bbl Price (c) 2018 90,000 $ 3.03 - - 48,628 $ 53.06 62,792 $ 66.46 2019 - $ - 360,000 $2.60-$3.03 139,797 $ 51.96 141,786 $ 66.58 2020 - $ - - - 73,147 $ 50.12 139,682 $ 65.71 2021 - $ - - - $ - 86,341 $ 67.12 (a) NYMEX Henry Hub Natural Gas futures contract for the respective period. (b) NYMEX Light Sweet Crude West Texas Intermediate futures contract for the respective period. (c) Brent future and NYMEX contracts for the respective period. |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitment and Contingencies [Abstract] | |
Summary of firm transportation volumes and related demand charges | Period Dekatherms per day Demand Charges October 2018 - March 2020 3,230 $ 0.20 - $0.62 April 2020 - May 2020 2,150 $ 0.20 June 2020 - May 2036 1,000 $ 0.20 |
Supplemental Cash Flow Disclo_2
Supplemental Cash Flow Disclosure (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flow Disclosure [Abstract] | |
Schedule of supplemental cash flow disclosures | Nine Months Ended (in thousands) 2018 2017 Cash paid during the period for: Interest $ 2,770 $ 645 Non-cash transactions: Increase in asset retirement obligations $ 3,590 $ 5 Decrease in accounts payable and accrued liabilities included in oil and gas properties $ (491 ) $ (12 ) Non-cash acquisition of Carbon California interests (see note 3) $ (18,906 ) $ - Carbon California Acquisition on February 1, 2018 (see note 3) $ 17,114 $ - Obligations assumed with Seneca asset purchase (see note 2) $ 330 $ - Accrued dividend for convertible preferred stock (see note 9) $ 148 $ - Beneficial conversion feature for convertible preferred stock (see note 9) $ 1,125 $ - Issuance of warrants for investment in affiliates $ - $ 7,094 Exercise of warrant derivative (see note 3) $ (1,792 ) $ - |
Organization (Details)
Organization (Details) - $ / shares | May 01, 2018 | Feb. 01, 2018 |
California Warrant [Member] | ||
Organization (Textual) | ||
Divestitures, description | On February 1, 2018, an entity managed by Yorktown Partners, LLC ("Yorktown") exercised a warrant it held to purchase shares of our common stock at an exercise price of $7.20 per share (the "California Warrant"), resulting in the issuance of 1,527,778 shares of our common stock. In exchange, we received Yorktown's Class A Units of Carbon California representing approximately 46.96% of the then outstanding Class A Units of Carbon California (a profits interest of approximately 38.59%). | |
Carbon California [Member] | ||
Organization (Textual) | ||
Warrant exercise price | $ 7.20 | |
Divestitures, description | Carbon California closed the Seneca Acquisition. Following the exercise of the California Warrant by Yorktown and the Seneca Acquisition, we own 53.9% of the voting and profits interests and Prudential owns 46.1% voting and profits interest in Carbon California. | |
Profits interest | 53.90% | 38.59% |
Voting percentage | 53.90% | 56.40% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | ||||
Net income (loss) attributable to controlling interest | $ (725) | $ (462) | $ 2,264 | $ 4,834 |
Less: warrant derivative gain | (811) | (225) | (2,494) | |
Less: deemed dividend for convertible preferred shares | (77) | (147) | ||
Less: beneficial conversion feature | (1,125) | |||
Diluted net (loss) income | $ (802) | $ (462) | $ 767 | $ 2,340 |
Basic weighted-average common shares outstanding during the period | 7,701 | 5,628 | 7,466 | 5,579 |
Add dilutive effects of warrants and non-vested shares of restricted stock | 315 | 907 | ||
Diluted weighted-average common shares outstanding during the period | 7,701 | 5,628 | 7,466 | 6,486 |
Basic net (loss) income per common share | $ (0.09) | $ (0.08) | $ 0.30 | $ 0.87 |
Diluted net (loss) income per common share | $ (0.10) | $ (0.08) | $ 0.10 | $ 0.36 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Textual) | May 01, 2018 | Feb. 01, 2018 | May 04, 2018 | Jan. 31, 2018USD ($) | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2017shares | Sep. 30, 2018USD ($)Partnership$ / sharesshares | Apr. 30, 2018shares | Dec. 31, 2017$ / sharesshares |
Summary of Significant Accounting Policies (Textual) | |||||||||
Number of consolidated partnerships | Partnership | 47 | ||||||||
Cost method investments, additional information | The cost method of accounting is generally used for investments in affiliates in which we have 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 do not have significant influence. | ||||||||
Equity method investment, additional information | If we hold 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 can exert significant influence or control (e.g., through our 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. Equity method investments will increase or decrease by our share of the affiliate's profits or losses and such profits or losses are recognized in our unaudited consolidated statements of operations. For our equity method investment in Carbon Appalachia, we use the hypothetical liquidation at book value method to recognize our share of the affiliate's profits or losses. | ||||||||
Acquire ownership interest, description | Yorktown exercised the California Warrant, which resulted in us acquiring Yorktown's ownership interest in Carbon California in exchange for shares of our common stock. On May 1, 2018, Carbon California closed the Seneca Acquisition. Following the exercise of the California Warrant by Yorktown and the Seneca Acquisition, we own 53.9%, of the voting and profits interests, and Prudential owns 46.1%. | ||||||||
Management reimbursements elimination, description | This elimination was $650,000 for the period February 1, 2018 through September 30, 2018. | ||||||||
Deferred financing costs | $ 1,700,000 | $ 1,700,000 | |||||||
Outside professional services | $ 1,900,000 | ||||||||
Preferred stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Preferred stock, shares issued | shares | 50,000 | 50,000 | |||||||
Insurance receivable | $ 871,000 | $ 871,000 | |||||||
Insurance collected from previously submitted claims | $ 2,700,000 | ||||||||
Stock Options [Member] | |||||||||
Summary of Significant Accounting Policies (Textual) | |||||||||
Anti-dilutive earnings per shares | shares | 315,040 | 901,109 | |||||||
Restricted Stock [Member] | |||||||||
Summary of Significant Accounting Policies (Textual) | |||||||||
Anti-dilutive earnings per shares | shares | 315,040 | ||||||||
Nytis LLC [Member] | |||||||||
Summary of Significant Accounting Policies (Textual) | |||||||||
Percentage of ownership interest in the subsidiary | 99.00% | ||||||||
Number of consolidated partnerships | Partnership | 64 | ||||||||
Nytis USA [Member] | |||||||||
Summary of Significant Accounting Policies (Textual) | |||||||||
Percentage of ownership interest in the subsidiary | 100.00% | ||||||||
Carbon California [Member] | |||||||||
Summary of Significant Accounting Policies (Textual) | |||||||||
Percentage of ownership interest in the subsidiary | 100.00% | 53.92% | |||||||
Management reimbursements general and administrative expenses | $ 14,000 | $ 376,000 | $ 1,100,000 | ||||||
Management provision reimbursements | $ 50,000 | $ 744,000 | $ 2,300,000 | ||||||
Management reimbursements elimination, description | General and administrative expenses reimbursed by Carbon California and eliminated in consolidation were approximately $42,000 for the period February 1, 2018, through September 30, 2018. | ||||||||
Percentage of voting and profits interest | 46.10% | ||||||||
Carbon Appalachia [Member] | |||||||||
Summary of Significant Accounting Policies (Textual) | |||||||||
Percentage of ownership interest in the subsidiary | 100.00% | ||||||||
Yorktown [Member] | |||||||||
Summary of Significant Accounting Policies (Textual) | |||||||||
Preferred stock, shares issued | shares | 50,000 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures (Details) $ in Thousands | Feb. 15, 2017USD ($) |
Acquisitions and Divestitures [Abstract] | |
Fair value of Carbon common shares transferred as consideration | $ 8,326 |
Fair value of NCI | 16,466 |
Fair value of previously held interest | 7,244 |
Fair value of business acquired | $ 32,036 |
Acquisitions and Divestitures_3
Acquisitions and Divestitures (Details 1) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Feb. 15, 2017 |
Oil and gas properties: | |||
Commodity derivative liability - short-term | $ 6,502 | ||
Commodity derivative liability - long-term | 4,299 | ||
Asset retirement obligations - short-term | $ 902 | $ 380 | |
Total net assets acquired | $ 32,036 | ||
Carbon California [Member] | |||
Acquisitions And Divestitures [Line Items] | |||
Cash | 275 | ||
Accounts receivable: | |||
Joint interest billings and other | 690 | ||
Receivable - related party | 1,610 | ||
Prepaid expense, deposits, and other current assets | 1,723 | ||
Oil and gas properties: | |||
Proved | 56,477 | ||
Unproved | 1,495 | ||
Other property and equipment, net | 877 | ||
Other long-term assets | 475 | ||
Accounts payable and accrued liabilities | (6,054) | ||
Commodity derivative liability - short-term | (916) | ||
Commodity derivative liability - long-term | (1,729) | ||
Asset retirement obligations - short-term | (384) | ||
Asset retirement obligations - long-term | (2,537) | ||
Subordinated Notes, related party, net | (8,874) | ||
Senior Revolving Notes, related party | (11,000) | ||
Notes payable | (92) | ||
Total net assets acquired | $ 32,036 |
Acquisitions and Divestitures_4
Acquisitions and Divestitures (Details 2) $ in Thousands | Sep. 30, 2018USD ($) |
Identifiable assets acquired: | |
Proved oil and gas properties | $ 37,386 |
Unproved oil and gas properties | 100 |
Other property and equipment | 545 |
Intangible assets | 300 |
Total identified assets | $ 38,331 |
Acquisitions and Divestitures_5
Acquisitions and Divestitures (Details 3) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Acquisitions and Divestitures [Abstract] | ||||
Revenue | $ 12,742 | $ 11,227 | $ 33,256 | $ 35,122 |
Net (loss) income before non-controlling interests | (455) | (1,518) | 5,232 | 13,969 |
Net (loss) income attributable to non-controlling interests | 270 | 16 | (2,234) | 92 |
Net (loss) income attributable to controlling interests | $ (725) | $ (1,534) | $ 7,566 | $ 13,877 |
Net income per share (basic) | $ (0.09) | $ (0.27) | $ 1 | $ 2.49 |
Net income per share (diluted) | $ (0.10) | $ (0.27) | $ 0.96 | $ 2.14 |
Acquisitions and Divestitures_6
Acquisitions and Divestitures (Details Textual) $ in Thousands | Jul. 11, 2018 | May 01, 2018 | Feb. 01, 2018 | Oct. 31, 2017USD ($)Acres | Sep. 30, 2018USD ($) | Feb. 15, 2017USD ($) |
Acquisitions and Divestitures (Textual) | ||||||
Purchase price of acquired assets | $ 38,331 | |||||
Carbon California [Member] | ||||||
Acquisitions and Divestitures (Textual) | ||||||
Profits interest | 53.90% | 38.59% | ||||
Recognized gain based on fair value | $ 5,400 | |||||
Qualifies as a business combination, description | We recognized 100% of the identifiable assets acquired, liabilities assumed and the non-controlling interest at their respective fair value as of the date of the acquisition. We exchanged 1,527,778 common shares at a fair value of approximately $8.3 million ($5.45 per share), for 11,000 Class A Units of Carbon California, representing a 38.59% profits ownership interest in Carbon California. | |||||
Percentage of profits interest | 56.40% | 17.81% | ||||
Acquisitions issuance shares, description | On February 1, 2018, Yorktown exercised the California Warrant resulting in the issuance of 1,527,778 shares of our common stock in exchange for Yorktown’s Class A Units of Carbon California representing approximately 46.96% of the outstanding Class A Units of Carbon California (a profits interest of approximately 38.59%). After giving effect to the exercise on February 1, 2018, we owned 56.4% of the voting and profits interests of Carbon California. | |||||
Percentage of voting and profits interest | 46.10% | |||||
Purchase Agreement [Member] | ||||||
Acquisitions and Divestitures (Textual) | ||||||
Purchase price of acquired assets | $ 1,500 | |||||
Seneca Acquisition [Member] | ||||||
Acquisitions and Divestitures (Textual) | ||||||
Transaction and due diligence costs | $ 318 | |||||
Non-operated oil wells covering, gross acres | Acres | 5,700 | |||||
Non-operated oil wells covering, net | Acres | 5,500 | |||||
Purchase price | $ 43,000 | |||||
Description of seneca acquisition | We contributed approximately $5.0 million to Carbon California to fund our portion of the purchase price, through the $5.0 Preferred Stock issuance. Prudential also contributed $5.0 million to fund its share of the equity portion of the purchase price. Carbon California funded the remaining purchase price from cash, increased borrowings under the Senior Revolving Notes and $3.0 million in proceeds from the issuance of Senior Subordinated Notes. | |||||
Assumed liabilities | $ 330 | |||||
ARO [Member] | Seneca Acquisition [Member] | ||||||
Acquisitions and Divestitures (Textual) | ||||||
Assumed liabilities | $ 639 | |||||
Liberty Energy, LLC [Member] | ||||||
Acquisitions and Divestitures (Textual) | ||||||
Description of liberty acquisition | We completed an acquisition of 54 operated oil and gas wells covering approximately 55,000 gross acres (22,000 net) and the associated mineral interests in the Appalachian Basin for a purchase price of $3.0 million, subject to customary and standard purchase price adjustments (the "Liberty Acquisition"). The Liberty Acquisition increased our ownership in the acquired wells from 60% to 100%. The Liberty Acquisition was funded through borrowings under our Credit Facility. The Liberty Acquisition is accounted for as a non-significant asset acquisition. |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Oil and gas properties: | ||
Accumulated depreciation, depletion, amortization and impairment | $ (87,527) | $ (80,715) |
Net oil and gas properties | 131,709 | 36,125 |
Furniture and fixtures, computer hardware and software, and other equipment | 3,783 | 1,758 |
Accumulated depreciation and amortization | (1,794) | (1,021) |
Net other property and equipment | 1,989 | 737 |
Total net property and equipment | 133,698 | 36,862 |
Proved oil and gas properties [Member] | ||
Oil and gas properties: | ||
Oil and gas properties, gross | 215,620 | 114,893 |
Unproved properties not subject to depletion [Member] | ||
Oil and gas properties: | ||
Oil and gas properties, gross | $ 3,616 | $ 1,947 |
Property and Equipment (Detai_2
Property and Equipment (Details 1) - Unproved properties not subject to depletion [Member] - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | ||
Oil and gas properties, gross | $ 3,616 | $ 1,947 |
Ventura Basin [Member] | ||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | ||
Oil and gas properties, gross | 1,595 | |
Indiana [Member] | ||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | ||
Oil and gas properties, gross | 432 | 432 |
Illinois [Member] | ||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | ||
Oil and gas properties, gross | 142 | 136 |
Kentucky [Member] | ||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | ||
Oil and gas properties, gross | 952 | 915 |
Ohio [Member] | ||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | ||
Oil and gas properties, gross | 66 | 66 |
West Virginia [Member] | ||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | ||
Oil and gas properties, gross | $ 429 | $ 398 |
Property and Equipment (Detai_3
Property and Equipment (Details Textual) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($)USD_Bbl | Sep. 30, 2017USD ($)USD_Bbl | Sep. 30, 2018USD ($)USD_Bbl | Sep. 30, 2017USD ($)USD_Bbl | Dec. 31, 2017USD ($) | |
Property and Equipment (Textual) | |||||
Capitalized overhead | $ 106,000 | $ 47,000 | $ 306,000 | $ 178,000 | |
Depletion expense related to oil and gas properties | $ 2,400,000 | $ 521,000 | $ 5,600,000 | $ 1,600,000 | |
Depletion expense related to oil and gas properties (in dollars per Mcfe) | USD_Bbl | 1.01 | 0.38 | 0.88 | 0.40 | |
Unproved properties not subject to depletion [Member] | |||||
Property and Equipment (Textual) | |||||
Depletion expense related to oil and gas properties | $ 3,600,000 | $ 1,900,000 |
Asset Retirement Obligation (De
Asset Retirement Obligation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Asset Retirement Obligation [Abstract] | ||||
Balance at beginning of period | $ 7,357 | $ 5,120 | ||
Accretion expense | $ 206 | $ 77 | 510 | 232 |
Additions from Carbon California Company, LLC | 2,921 | |||
Additions from Seneca Acquisition | 639 | |||
Additions From Liberty Acquisition | 30 | |||
Additions during period | 5 | |||
Obligations on sale of oil & gas properties | (93) | |||
Total | 11,837 | 5,264 | ||
Less: ARO recognized as a current liability | (902) | (144) | ||
Balance at end of period | $ 10,935 | $ 5,120 | $ 10,935 | $ 5,120 |
Investments in Affiliates (Deta
Investments in Affiliates (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
April 2017 [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Capital Contribution | $ 240 |
Resulting Class A Units (%) | 2.00% |
Resulting Sharing % | 2.98% |
August 2017 [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Capital Contribution | $ 3,710 |
Resulting Class A Units (%) | 15.20% |
Resulting Sharing % | 16.04% |
September 2017 [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Capital Contribution | $ 2,920 |
Resulting Class A Units (%) | 18.55% |
Resulting Sharing % | 19.37% |
November 2017 [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Capital Contribution | Warrant exercise |
Resulting Class A Units (%) | 26.50% |
Resulting Sharing % | 27.24% |
Investments in Affiliates (De_2
Investments in Affiliates (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||||||
Current assets | $ 17,235 | $ 17,235 | $ 8,080 | |||
Total oil and gas properties, net | 133,698 | 133,698 | 36,862 | |||
Current liabilities | 20,932 | 20,932 | 11,345 | |||
Non-current liabilities | 92,399 | 92,399 | 32,168 | |||
Total members' equity | 30,073 | 30,073 | $ 14,655 | |||
Revenues | 12,742 | $ 4,195 | 25,363 | $ 17,565 | ||
Operating expenses | 515 | (693) | (3,375) | 3,518 | ||
Net income (loss) | (725) | (462) | 2,264 | $ 4,834 | ||
Carbon Appalachia [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Current assets | 22,478 | 22,478 | ||||
Total oil and gas properties, net | 81,833 | 81,833 | ||||
Total other property and equipment, net | 15,880 | 15,880 | ||||
Other long-term assets | 1,302 | 1,302 | ||||
Current liabilities | 15,313 | 15,313 | ||||
Non-current liabilities | 61,234 | 61,234 | ||||
Total members' equity | 44,946 | 44,946 | ||||
Revenues | 18,058 | 1,348 | $ 2,905 | 62,480 | ||
Operating expenses | 16,686 | 2,691 | 4,449 | 56,441 | ||
Income (loss) from operations | 1,372 | (1,344) | (1,544) | 6,039 | ||
Net income (loss) | $ 537 | $ (1,546) | $ (1,874) | $ 4,017 |
Investments in Affiliates (De_3
Investments in Affiliates (Details Textual) - USD ($) $ in Thousands | May 01, 2018 | Feb. 01, 2018 | Feb. 15, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 31, 2018 |
Investments in Affiliates (Textual) | ||||||||
Other income | $ 16 | $ 8 | $ 35 | $ 28 | ||||
Aggregate sharing, percentage | 53.90% | |||||||
Total equity method income | $ 6,511 | $ (315) | ||||||
Yorktown [Member] | California Warrant [Member] | ||||||||
Investments in Affiliates (Textual) | ||||||||
Warrant exercised shares | 11,000 | |||||||
Aggregate sharing, percentage | 56.40% | |||||||
Carbon California [Member] | ||||||||
Investments in Affiliates (Textual) | ||||||||
Voting and profits interests, percentage | 53.90% | 17.81% | 46.10% | |||||
Business acquisitions, description | (i) issued and sold Class A Units to Yorktown and Prudential for an aggregate cash consideration of $22.0 million, (ii) entered into a Note Purchase Agreement (the "Note Purchase Agreement") with Prudential Legacy Insurance Company of New Jersey and Prudential Insurance Company of America for the issuance and sale of up to $25.0 million of Senior Secured Revolving Notes (the "Senior Revolving Notes") due February 15, 2022 and (iii) entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with Prudential for the issuance and sale of $10.0 million of Senior Subordinated Notes (the "Subordinated Notes") due February 15, 2024. We are not a guarantor of the Senior Revolving Notes or the Subordinate Notes. | |||||||
Percentage of interest | 17.80% | |||||||
Unsecured notes | $ 3,000 | |||||||
Unsecured notes due date | Feb. 15, 2024 | |||||||
Bearing interest of per annum | 12.00% | |||||||
Subordinated notes | Class A Units, representing an approximately 2% additional sharing percentage, for the issuance of the Carbon California 2018 Subordinated Notes. Carbon California valued this unit issuance based on the relative fair value by valuing the units at $1,000 per unit and aggregating the amount with the outstanding Carbon California 2018 Subordinated Notes of $3.0 million. The Company then allocated the non-cash value of the units of approximately $490,000, which was recorded as a discount to the Carbon California 2018 Subordinated Notes. As of September 30, 2018, Carbon California had an outstanding discount of $454,000 associated with these notes. | |||||||
Borrowing base amount | 41,000 | $ 41,000 | ||||||
Borrowing base outstanding amount | $ 38,500 | $ 38,500 | ||||||
Carbon California [Member] | California Warrant [Member] | ||||||||
Investments in Affiliates (Textual) | ||||||||
Voting and profits interests, percentage | 56.40% | |||||||
Carbon California [Member] | Note Purchase Agreement and the Securities Purchase Agreement [Member] | ||||||||
Investments in Affiliates (Textual) | ||||||||
Business acquisitions, description | (i) Senior Revolving Notes in the principal amount of $10.0 million and (ii) Subordinated Notes in the original principal amount of $10.0 million. | |||||||
Carbon California [Member] | Yorktown [Member] | ||||||||
Investments in Affiliates (Textual) | ||||||||
Voting and profits interests, percentage | 38.59% | |||||||
Carbon California [Member] | Prudential [Member] | ||||||||
Investments in Affiliates (Textual) | ||||||||
Voting and profits interests, percentage | 43.59% |
Investments in Affiliates (De_4
Investments in Affiliates (Details Textual 1) - USD ($) | Nov. 01, 2017 | Feb. 15, 2017 | May 04, 2018 | Apr. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | May 01, 2018 | Feb. 01, 2018 | Jan. 31, 2018 | Apr. 03, 2017 |
Investments in Affiliates (Textual) | |||||||||||||
Revolving credit facility, description | Interest is payable quarterly and accrues on borrowings under the CAE Credit Facility at a rate per annum equal to either (i) the base rate plus an applicable margin between 0.00% and 1.00% or (ii) the Adjusted LIBOR rate plus an applicable margin between 3.00% and 4.00% at our option. The actual margin percentage is dependent on the CAE Credit Facility utilization percentage. CAE is obligated to pay certain fees and expenses in connection with the CAE Credit Facility, including a commitment fee for any unused amounts of 0.50%.The CAE Credit Facility contains affirmative and negative covenants that, among other things, limit CAE's ability to (i) 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 our affiliates; (viii) enter into sales-leaseback transactions; (ix) make optional or voluntary payments of debt; (x) change the nature of our business; (xi) change our 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 basket amounts and acceptable transaction levels. In addition, the CAE Credit Facility requires CAE's compliance, on a consolidated basis, with (i) a maximum Debt/EBITDA ratio of 3.5 to 1.0 and (ii) a minimum current ratio of 1.0 to 1.0. | ||||||||||||
Outstanding under the credit facility | $ 38,000,000 | ||||||||||||
Earned net gain | $ 157,000 | $ (285,000) | 6,511,000 | $ (285,000) | |||||||||
Investments in affiliates | 13,459,000 | 13,459,000 | $ 14,267,000 | ||||||||||
Total equity method income | $ 83,000 | $ 1,000,000 | |||||||||||
Carbon Appalachia LLC Agreement [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Warrant exercise price | $ 7.20 | $ 7.20 | |||||||||||
Warrant issuance | 408,000 | 408,000 | |||||||||||
Yorktown [Member] | Class A Units [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Fair value of warrant | $ 1,900,000 | ||||||||||||
Investments in affiliates | $ 2,900,000 | ||||||||||||
Carbon Appalachia [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Equity commitment | $ 37,000,000 | $ 37,000,000 | |||||||||||
Ownership interest, percentage | 100.00% | ||||||||||||
Percentage of interest | 75.00% | ||||||||||||
Business acquisitions, description | On May 4, 2018, we entered into a Membership Interest Purchase Agreement (the "MIPA") with Old Ironsides. Old Ironsides owns 73.5%, and we own 26.5%, of the issued and outstanding Class A Units of Carbon Appalachia. We also own all of the Class B and Class C units of Carbon Appalachia. Pursuant to the MIPA, we may acquire all of Old Ironsides' membership interests of Carbon Appalachia. Subject to the terms and conditions of the MIPA, we will pay Old Ironsides, approximately $58.0 million at closing, subject to adjustment, in accordance with the MIPA. The MIPA is contingent upon the issuance of common equity of the Company. We have filed a registration statement. | ||||||||||||
Revolving credit facility, description | Carbon Tennessee Company, LLC ("CAE"), a subsidiary of Carbon Appalachia, entered into a 4-year $100.0 million (with $1.5 million sublimit for letters of credit) senior secured asset-based revolving credit facility with Legacy Texas Financial Group, Inc. ("LegacyTexas Bank") with an initial borrowing base of $10.0 million (the "CAE Credit Facility"). | ||||||||||||
Earned net gain | $ 139,000 | $ 1,100,000 | |||||||||||
Payment subject to adjustment amount | $ 58,000,000 | ||||||||||||
Carbon Appalachia [Member] | Senior Revolving Notes [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Revolving credit facility, description | CAE Credit Facility was amended, which increased the borrowing base to $70.0 million with redeterminations as of April 1 and October 1 each year. | ||||||||||||
Carbon Appalachia [Member] | Drilling [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Percentage of interest | 100.00% | ||||||||||||
Carbon Appalachia [Member] | Class A Units [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Ownership interest, percentage | 7.95% | ||||||||||||
Carbon Appalachia [Member] | Class B Units [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Ownership interest, percentage | 26.50% | ||||||||||||
Carbon Appalachia [Member] | Class C Units [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Ownership interest, percentage | 100.00% | ||||||||||||
Carbon Appalachia [Member] | Nytis LLC [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Percentage of interest | 25.00% | ||||||||||||
Carbon Appalachia [Member] | Carbon Appalachia LLC Agreement [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Equity commitment | $ 2,000,000 | ||||||||||||
Percentage of interest | 14.70% | 14.70% | |||||||||||
Carbon Appalachia [Member] | Carbon Appalachia LLC Agreement [Member] | Warrant [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Fair value of warrant | $ 1,300,000 | $ 619,000 | |||||||||||
Carbon Appalachia [Member] | Carbon Appalachia LLC Agreement [Member] | Class A Units [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Equity commitment | $ 240,000 | ||||||||||||
Acquired interest | 2.00% | ||||||||||||
Ownership interest, percentage | 27.24% | 27.24% | |||||||||||
Percentage of interest | 10.00% | 10.00% | |||||||||||
Investment in cash and unevaluated property | $ 6,900,000 | $ 6,900,000 | |||||||||||
Carbon Appalachia [Member] | Carbon Appalachia LLC Agreement [Member] | Class B Units [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Ownership interest, percentage | 14.70% | ||||||||||||
Fair value of warrant | $ 924,000 | ||||||||||||
Carbon Appalachia [Member] | Carbon Appalachia LLC Agreement [Member] | Class C Units [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Acquired interest | 1.00% | ||||||||||||
Ownership interest, percentage | 27.24% | 27.24% | |||||||||||
Percentage of interest | 10.00% | 10.00% | |||||||||||
Investment in cash and unevaluated property | $ 6,900,000 | $ 6,900,000 | |||||||||||
Carbon Appalachia [Member] | Yorktown [Member] | Warrant [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Warrant issuance | 432,000 | ||||||||||||
Carbon Appalachia [Member] | Yorktown and Old Ironsides Energy, LLC [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Equity commitment | $ 100,000,000 | ||||||||||||
Carbon California [Member] | |||||||||||||
Investments in Affiliates (Textual) | |||||||||||||
Ownership interest, percentage | 53.90% | 38.59% | |||||||||||
Percentage of interest | 17.80% | ||||||||||||
Business acquisitions, description | (i) issued and sold Class A Units to Yorktown and Prudential for an aggregate cash consideration of $22.0 million, (ii) entered into a Note Purchase Agreement (the "Note Purchase Agreement") with Prudential Legacy Insurance Company of New Jersey and Prudential Insurance Company of America for the issuance and sale of up to $25.0 million of Senior Secured Revolving Notes (the "Senior Revolving Notes") due February 15, 2022 and (iii) entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with Prudential for the issuance and sale of $10.0 million of Senior Subordinated Notes (the "Subordinated Notes") due February 15, 2024. We are not a guarantor of the Senior Revolving Notes or the Subordinate Notes. | ||||||||||||
Warrant exercise price | $ 7.20 | ||||||||||||
Earned net gain | 5,400,000 | ||||||||||||
Total equity method income | $ 32,000 |
Credit Facilities (Details)
Credit Facilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Line Of Credit Facility [Line Items] | ||
Long-term debt | $ 65 | |
Carbon California [Member] | ||
Line Of Credit Facility [Line Items] | ||
Senior Revolving Notes, related party, due February 15, 2022 | 38,500 | |
Subordinated Notes, related party, due February 15, 2024 | 13,000 | |
Long-term debt | 65 | |
Total gross notes payable | 51,565 | |
Less: Deferred notes costs | (220) | |
Less: Notes discount | (1,284) | |
Total net notes payable | $ 50,061 |
Credit Facilities (Details Text
Credit Facilities (Details Textual) | May 01, 2018 | May 01, 2018USD ($) | Feb. 15, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Jul. 31, 2018USD ($) | Feb. 01, 2018 |
Credit Facilities (Textual) | ||||||||||
Covenant description | A minimum cash balance requirement of $750,000. | |||||||||
Senior secured asset-based revolving credit facility | $ 34,529,000 | $ 7,210,000 | ||||||||
Effective borrowing rate (as a percent) | 7.52% | 7.52% | ||||||||
Carbon California [Member] | ||||||||||
Credit Facilities (Textual) | ||||||||||
Effective borrowing rate (as a percent) | 56.40% | |||||||||
Business acquisitions, description | (i) issued and sold Class A Units to Yorktown and Prudential for an aggregate cash consideration of $22.0 million, (ii) entered into a Note Purchase Agreement (the "Note Purchase Agreement") with Prudential Legacy Insurance Company of New Jersey and Prudential Insurance Company of America for the issuance and sale of up to $25.0 million of Senior Secured Revolving Notes (the "Senior Revolving Notes") due February 15, 2022 and (iii) entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with Prudential for the issuance and sale of $10.0 million of Senior Subordinated Notes (the "Subordinated Notes") due February 15, 2024. We are not a guarantor of the Senior Revolving Notes or the Subordinate Notes. | |||||||||
Unsecured notes due date | Feb. 15, 2024 | |||||||||
Outstanding discount amount of notes | $ 1,284,000 | $ 1,284,000 | ||||||||
Voting percentage | 53.90% | 53.90% | 56.40% | |||||||
Revolving Notes in the principal amount | $ 10,000,000 | |||||||||
Description of voting rights | The exercise of the California Warrant by Yorktown and the Seneca Acquisition, we own 53.9%, of the voting and profits interests, and Prudential owns 46.1%. | |||||||||
Carbon California- Senior Revolving Notes, Related Party [Member] | ||||||||||
Credit Facilities (Textual) | ||||||||||
Borrowing base amount | 41,000,000 | 41,000,000 | ||||||||
Line of credit facility maximum borrowing capacity | 38,500,000 | $ 38,500,000 | ||||||||
Variable interest rate basis, description | (i) 5.0% plus the London interbank offered rate ("LIBOR") or (ii) 4.00% plus Prime Rate (which is defined as the interest rate published daily by JPMorgan Chase Bank, N.A.). As of September 30, 2018, the effective borrowing rate for the Senior Revolving Notes was 8.14%. In addition, the Senior Revolving Notes include a commitment fee for any unused amounts at 0.50% as well as an annual administrative fee of $75,000, payable on February 15 each year. | |||||||||
Other long-term assets value | 898,000 | $ 898,000 | ||||||||
Amortized interest expense | 57,000 | $ 29,000 | $ 134,000 | $ 72,000 | ||||||
Business acquisitions, description | Prudential Legacy Insurance Company of New Jersey and Prudential Insurance Company of America for the issuance and sale of the Senior Revolving Notes due February 15, 2022. We are not a guarantor of the Senior Revolving Notes. The closing of the Note Purchase Agreement on February 15, 2017, resulted in the sale and issuance by Carbon California of Senior Revolving Notes in the principal amount of $10.0 million. The maximum principal amount available under the Senior Revolving Notes is based upon the borrowing base attributable to Carbon California's proved oil and gas reserves which is to be determined at least semi-annually. As of September 30, 2018, the borrowing base was $41.0 million, of which $38.5 million was outstanding. | |||||||||
Description of the revolver requirements | The Senior Revolving Notes require Carbon California, as of January 1 and July 1 of each year, to hedge its anticipated proved developed production at such time for year one, two and three at a rate of 75%, 65% and 50%, respectively. Carbon California may make principal payments in minimum installments of $500,000. Distributions to equity members are generally restricted. | |||||||||
Revolving Notes in the principal amount | $ 10,000,000 | |||||||||
Carbon California Notes [Member] | ||||||||||
Credit Facilities (Textual) | ||||||||||
Effective borrowing rate (as a percent) | 12.00% | |||||||||
Description of the revolver requirements | The Subordinated Notes require Carbon California, as of January 1 and July 1 of each year, to hedge its anticipated production at such time for year one, two and three at a rate of 67.5%, 58.5% and 45%, respectively. | |||||||||
Amount of unsecured notes issuance | $ 3,000,000 | $ 10,000,000 | ||||||||
Unsecured notes due date | Feb. 15, 2024 | Feb. 15, 2024 | ||||||||
Description of notes prepayment terms | Prepayment of the Subordinated Notes is available after February 15, 2019. Prepayment is allowed at 100%, subject to a 3.0% fee of outstanding principal. Prepayment is not subject to a prepayment fee after February 17, 2020. | |||||||||
Outstanding discount amount of notes | 830,000 | $ 830,000 | ||||||||
Notes issuance additional, description | Prudential received an additional 1,425 Class A Units, representing 5% of total sharing percentage, for the issuance of the Subordinated Notes. Carbon California valued this unit issuance based on the relative fair value by valuing the units at $1,000 per unit and aggregating the amount with the outstanding Subordinated Notes of $10.0 million. The Company then allocated the non-cash value of the units of approximately $1.3 million, which was recorded as a discount to the Subordinated Notes. | |||||||||
Carbon California-2018 Subordinated Notes [Member] | ||||||||||
Credit Facilities (Textual) | ||||||||||
Effective borrowing rate (as a percent) | 12.00% | 12.00% | ||||||||
Description of the revolver requirements | The Carbon California 2018 Subordinated Notes require Carbon California, as of January 1 and July 1 of each year, to hedge its anticipated production at such time for year one, two and three at a rate of 67.5%, 58.5% and 45%, respectively. | |||||||||
Amount of unsecured notes issuance | $ 3,000,000 | |||||||||
Description of notes prepayment terms | Prepayment of the Subordinated Notes is available after February 15, 2019. Prepayment is allowed at 100%, subject to a 3.0% fee of outstanding principal. Prepayment is not subject to a prepayment fee after February 17, 2020. Distributions to equity members are generally restricted. | |||||||||
Outstanding discount amount of notes | 454,000 | $ 454,000 | ||||||||
Notes issuance additional, description | Prudential received 585 Class A Units, representing an approximate 2% additional sharing percentage, for the issuance of the Carbon California 2018 Subordinated Notes. Carbon California valued this unit issuance based on the relative fair value by valuing the units at $1,000 per unit and aggregating the amount with the outstanding Carbon California 2018 Subordinated Notes of $3.0 million. The Company then allocated the non-cash value of the units of approximately $490,000, which was recorded as a discount to the Carbon California 2018 Subordinated Notes. As of September 30, 2018, Carbon California had an outstanding discount of $454,000 associated with these notes, which is presented net of the Carbon California 2018 Subordinated Notes within Credit facility-related party on the unaudited consolidated balance sheets. During the three and nine months ended September 30, 2018, Carbon California amortized $97,000 and $236,000, respectively. | |||||||||
LegacyTexas Bank [Member] | ||||||||||
Credit Facilities (Textual) | ||||||||||
Senior secured asset-based revolving credit facility | $ 100,000,000 | |||||||||
Bank credit facility, terms | 4 years | |||||||||
Minimum [Member] | ||||||||||
Credit Facilities (Textual) | ||||||||||
Line of credit facility maximum borrowing capacity | $ 25,000,000 | |||||||||
Maximum [Member] | ||||||||||
Credit Facilities (Textual) | ||||||||||
Line of credit facility maximum borrowing capacity | $ 28,000,000 | |||||||||
Line of Credit [Member] | ||||||||||
Credit Facilities (Textual) | ||||||||||
Line of credit facility maximum borrowing capacity | 100,000,000 | $ 100,000,000 | ||||||||
Variable interest rate basis, description | (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 our option. The actual margin percentage is dependent on the credit facility utilization percentage. We are obligated to pay certain fees and expenses in connection with the credit facility, including a commitment fee for any unused amounts of 0.50%. | |||||||||
Initial borrowing | 17,000,000 | $ 17,000,000 | ||||||||
Letters of credit | $ 500,000 | 500,000 | ||||||||
Credit facility drawn amount | $ 26,100,000 | |||||||||
Line of Credit [Member] | Minimum [Member] | ||||||||||
Credit Facilities (Textual) | ||||||||||
Funded debt ratio required to be maintained | 1 | |||||||||
Current ratio required to be maintained | 1 | |||||||||
Line of Credit [Member] | Maximum [Member] | ||||||||||
Credit Facilities (Textual) | ||||||||||
Funded debt ratio required to be maintained | 3.5 | |||||||||
Current ratio required to be maintained | 1 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Apr. 06, 2018 | Mar. 15, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2012 |
Stockholders' Equity (Textual) | |||||||||||
Exercise price | $ 100 | ||||||||||
Grant date fair value | $ 9.80 | $ 7.20 | $ 5.40 | $ 8 | $ 11.80 | ||||||
Number of shares issued | 50,000 | 50,000 | |||||||||
Proceeds from issuance of preferred stock | $ 5,000,000 | ||||||||||
Conversion of common stock, description | The number of shares of common stock issuable upon conversion is dependent upon the price per share of common stock issued in connection with any such qualifying equity financing but has a floor conversion price equal to $8.00 per share. The conversion ratio at which the Preferred Stock will convert into common stock is equal to an amount per share of $100 plus all accrued but unpaid dividends payable in respect thereof divided by the greater of (i) $8.00 per share or (ii) the price that is 15% less than the lowest price per share of shares sold to the public in the next equity financing. Using the floor of $8.00 per share would yield 12.5 shares of common stock for every unit of Preferred Stock. | ||||||||||
Beneficial conversion feature | $ 1,125,000 | ||||||||||
Accrued dividends | $ 147,000 | $ 147,000 | |||||||||
Beneficial conversion feature, description | We recorded the BCF as a reduction of retained earnings and an increase to APIC of $1.1 million, which is based on the difference between the floor price of $8.00 and our stock price as of the commitment date multiplied by the number of shares to be issued. | ||||||||||
Common stock, shares authorized | 35,000,000 | 35,000,000 | 35,000,000 | ||||||||
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Common stock, shares issued | 7,700,619 | 7,700,619 | 6,005,633 | ||||||||
Common stock, shares outstanding | 7,700,619 | 7,700,619 | 6,005,633 | ||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||
Preferred stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Series B Convertible Preferred Stock [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Accrue cash dividends rate | 6.00% | ||||||||||
Accrued dividends | $ 100 | $ 100 | |||||||||
Series B Shares [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Accrue cash dividends rate | 6.00% | ||||||||||
Stockholders and Board of Directors [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Reverse stock split, description | A reverse stock split approved by the stockholders 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. | ||||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Unrecognized compensation cost | 1,600,000 | 1,600,000 | |||||||||
Compensation costs for restricted stock grants | 189,000 | $ 160,000 | $ 537,000 | 513,000 | |||||||
Expected period of recognition of unrecognized compensation costs | 6 years 6 months | ||||||||||
Restricted Stock [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Number of shares of unvested restricted stock granted | 649,000 | ||||||||||
Restricted stock vested shares | 59,000 | ||||||||||
Restricted Performance Units [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Unrecognized compensation cost | $ 3,300,000 | $ 3,300,000 | $ 3,300,000 | $ 3,300,000 | |||||||
Compensation cost recognized | $ 135,000 | $ 239,000 | |||||||||
Number of shares granted | 597,000 | ||||||||||
Carbon Stock Incentive Plans [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Number of shares issued | 1,100,000 | 1,100,000 | |||||||||
Carbon Stock Incentive Plans [Member] | Officers, Directors, Employees or Consultants [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Stock incentive plan, common stock shares authorized | 1,100,000 | 1,100,000 | |||||||||
Issued Capital Stock [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Common stock, shares authorized | 35,000,000 | 35,000,000 | |||||||||
Common stock, par value | $ 0.01 | $ 0.01 | |||||||||
Common stock, shares issued | 7,700,000 | 7,700,000 | |||||||||
Common stock, shares outstanding | 7,700,000 | 7,700,000 | |||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |||||||||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||||||||
Description of increase in our issued and outstanding common stock | The increase in our issued and outstanding common stock is primarily due to (a) Yorktown's exercise of the California Warrant (see note 3), resulting in the issuance of approximately 1.5 million shares of our common stock in exchange for Class A Units in Carbon California representing approximately 46.96% of the then outstanding Class A Units, in addition to (b) restricted stock and restricted performance units that vested during the year. | ||||||||||
Issued Capital Stock [Member] | Private Placement [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Preferred stock purchase agreement shares | 50,000 | ||||||||||
Preferred stock purchase agreement value | $ 5,000,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Natural gas sales | $ 4,372 | $ 3,689 | $ 11,835 | $ 11,706 |
Natural gas liquids sales | 406 | 1,119 | ||
Oil sales | 11,850 | $ 997 | 22,924 | $ 3,189 |
Total natural gas, natural gas liquids, and oil revenue | 16,629 | 35,878 | ||
Appalachia and Illinois Basin [Member] | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Natural gas sales | 3,856 | 10,776 | ||
Natural gas liquids sales | ||||
Oil sales | 3,327 | 5,952 | ||
Total natural gas, natural gas liquids, and oil revenue | 7,185 | 16,728 | ||
Ventura Basin [Member] | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Natural gas sales | 516 | 1,059 | ||
Natural gas liquids sales | 406 | 1,119 | ||
Oil sales | 8,524 | 16,972 | ||
Total natural gas, natural gas liquids, and oil revenue | $ 9,444 | $ 19,150 |
Revenue Recognition (Details Te
Revenue Recognition (Details Textual) | 9 Months Ended |
Sep. 30, 2018Segments | |
Revenue Recognition (Textual) | |
Number of reportable segment | 1 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts payable | $ 3,923 | $ 3,274 |
Oil and gas revenue suspense | 2,111 | 1,776 |
Gathering and transportation payables | 817 | 497 |
Production taxes payable | 375 | 214 |
Drilling advances received from joint venture partner | 295 | 245 |
Accrued lease operating expenses | 946 | 684 |
Accrued ad valorem taxes-current | 1,704 | 1,054 |
Accrued general and administrative expenses | 1,085 | 2,473 |
Accrued asset retirement obligation-current | 902 | 380 |
Accrued interest | 633 | 247 |
Accrued environmental liability | 728 | |
Other liabilities | 859 | 374 |
Total accounts payable and accrued liabilities | $ 14,378 | $ 11,218 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Asset: | ||
Commodity derivatives | $ 225 | |
Liabilities | ||
Warrant derivative liability | 2,017 | |
Liabilities | ||
Commodity derivatives | $ 10,801 | |
Fair Value Measurements [Member] | Level 1 [Member] | ||
Asset: | ||
Commodity derivatives | ||
Liabilities | ||
Warrant derivative liability | ||
Liabilities | ||
Commodity derivatives | ||
Fair Value Measurements [Member] | Level 2 [Member] | ||
Asset: | ||
Commodity derivatives | 225 | |
Liabilities | ||
Warrant derivative liability | ||
Liabilities | ||
Commodity derivatives | 10,801 | |
Fair Value Measurements [Member] | Level 3 [Member] | ||
Asset: | ||
Commodity derivatives | ||
Liabilities | ||
Warrant derivative liability | $ 2,017 | |
Liabilities | ||
Commodity derivatives |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details 1) - Level 3 [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items] | |
Balance, December 31, 2017 | $ 2,017 |
Warrant derivative gain for the period January 1- January 31, 2018 | (225) |
CCC Warrant Exercise - liability extinguishment | (1,792) |
Balance, September 30, 2018 |
Fair Value Measurements (Deta_3
Fair Value Measurements (Details Textual) - USD ($) | Feb. 01, 2018 | Feb. 15, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Fair Value Measurements (Textual) | |||||
Asset retirement obligation | $ 4,100,000 | ||||
Asset retirement obligation, description | The estimated timing of reclamation ranging from one to 75 years based on estimates from reserve engineers; an inflation rate of 1.92%; and a credit adjusted risk-free rate of 7.24%, which takes into account our credit risk and the time value of money. | ||||
California Warrant [Member] | |||||
Fair Value Measurements (Textual) | |||||
Divestitures, description | On February 1, 2018, an entity managed by Yorktown Partners, LLC ("Yorktown") exercised a warrant it held to purchase shares of our common stock at an exercise price of $7.20 per share (the "California Warrant"), resulting in the issuance of 1,527,778 shares of our common stock. In exchange, we received Yorktown's Class A Units of Carbon California representing approximately 46.96% of the then outstanding Class A Units of Carbon California (a profits interest of approximately 38.59%). | ||||
Carbon California [Member] | Maximum [Member] | |||||
Fair Value Measurements (Textual) | |||||
Risk-free rate | 15.50% | ||||
Term | 49 years | ||||
Inflation rate | 2.03% | ||||
Carbon California [Member] | Minimum [Member] | |||||
Fair Value Measurements (Textual) | |||||
Risk-free rate | 8.09% | ||||
Term | 1 year | ||||
Inflation rate | 2.01% | ||||
Class A Units [Member] | California Warrant [Member] | Maximum [Member] | |||||
Fair Value Measurements (Textual) | |||||
Fair value of warrant | $ 45,000 | ||||
Class A Units [Member] | California Warrant [Member] | Minimum [Member] | |||||
Fair Value Measurements (Textual) | |||||
Fair value of warrant | 15,000 | ||||
Level 3 [Member] | |||||
Fair Value Measurements (Textual) | |||||
Asset retirement obligation | $ 4,100,000 | $ 5,000 | |||
Level 3 [Member] | California Warrant [Member] | |||||
Fair Value Measurements (Textual) | |||||
Fair value of warrant | $ 5,800,000 | ||||
Volatility rate | 41.80% | ||||
Risk-free rate | 2.30% | ||||
Exercise price | $ 7.20 | ||||
Term | 7 years | ||||
Level 3 [Member] | Class A Units [Member] | California Warrant [Member] | |||||
Fair Value Measurements (Textual) | |||||
Fair value of warrant | $ 2,000,000 | ||||
Volatility rate | 45.00% | ||||
Risk-free rate | 2.10% | ||||
Exercise price | $ 7.20 | ||||
Term | 6 years 4 months 24 days |
Physical Delivery Contracts a_3
Physical Delivery Contracts and Gas Derivatives (Details) | Sep. 30, 2018USD_BblUSD-MMBtu$ / shares | |
2018 [Member] | Natural Gas Swaps [Member] | ||
Derivative agreements details: | ||
Quantity | USD-MMBtu | 870,000 | |
Weighted Average Price | $ 3 | [1] |
2018 [Member] | Natural Gas Collars [Member] | ||
Derivative agreements details: | ||
Quantity | USD-MMBtu | ||
Weighted Average Price | [1] | |
2018 [Member] | Oil Swaps [Member] | ||
Derivative agreements details: | ||
Quantity | USD_Bbl | 23,000 | |
Weighted Average Price | $ 55.09 | [2] |
2018 [Member] | Carbon California [Member] | Natural Gas Swaps [Member] | ||
Derivative agreements details: | ||
Quantity | USD-MMBtu | 90,000 | |
Weighted Average Price | $ 3.03 | [1] |
2018 [Member] | Carbon California [Member] | Natural Gas Collars [Member] | ||
Derivative agreements details: | ||
Quantity | USD-MMBtu | ||
Weighted Average Price | [1] | |
2018 [Member] | Carbon California [Member] | Oil Swaps [Member] | WTI Bbl [Member] | ||
Derivative agreements details: | ||
Quantity | USD_Bbl | 48,628 | |
Weighted Average Price | $ 53.06 | [2] |
2018 [Member] | Carbon California [Member] | Oil Swaps [Member] | Brent Bbl [Member] | ||
Derivative agreements details: | ||
Quantity | USD_Bbl | 62,792 | |
Weighted Average Price | $ 66.46 | [3] |
2019 [Member] | Natural Gas Swaps [Member] | ||
Derivative agreements details: | ||
Quantity | USD-MMBtu | 2,596,000 | |
Weighted Average Price | $ 2.86 | [1] |
2019 [Member] | Natural Gas Collars [Member] | ||
Derivative agreements details: | ||
Quantity | USD-MMBtu | 204,000 | |
2019 [Member] | Natural Gas Collars [Member] | Minimum [Member] | ||
Derivative agreements details: | ||
Weighted Average Price | $ 2.60 | [1] |
2019 [Member] | Natural Gas Collars [Member] | Maximum [Member] | ||
Derivative agreements details: | ||
Weighted Average Price | $ 2.80 | [1] |
2019 [Member] | Oil Swaps [Member] | ||
Derivative agreements details: | ||
Quantity | USD_Bbl | 61,900 | |
Weighted Average Price | $ 56.05 | [2] |
2019 [Member] | Carbon California [Member] | Natural Gas Swaps [Member] | ||
Derivative agreements details: | ||
Quantity | USD-MMBtu | ||
Weighted Average Price | [1] | |
2019 [Member] | Carbon California [Member] | Natural Gas Collars [Member] | ||
Derivative agreements details: | ||
Quantity | USD-MMBtu | 360,000 | |
2019 [Member] | Carbon California [Member] | Natural Gas Collars [Member] | Minimum [Member] | ||
Derivative agreements details: | ||
Weighted Average Price | $ 2.60 | [1] |
2019 [Member] | Carbon California [Member] | Natural Gas Collars [Member] | Maximum [Member] | ||
Derivative agreements details: | ||
Weighted Average Price | $ 3.03 | [1] |
2019 [Member] | Carbon California [Member] | Oil Swaps [Member] | WTI Bbl [Member] | ||
Derivative agreements details: | ||
Quantity | USD_Bbl | 139,797 | |
Weighted Average Price | $ 51.96 | [2] |
2019 [Member] | Carbon California [Member] | Oil Swaps [Member] | Brent Bbl [Member] | ||
Derivative agreements details: | ||
Quantity | USD_Bbl | 141,786 | |
Weighted Average Price | $ 66.58 | [3] |
2020 [Member] | Natural Gas Collars [Member] | ||
Derivative agreements details: | ||
Quantity | USD-MMBtu | 1,018,000 | |
2020 [Member] | Natural Gas Collars [Member] | Minimum [Member] | ||
Derivative agreements details: | ||
Weighted Average Price | $ 2.50 | [1] |
2020 [Member] | Natural Gas Collars [Member] | Maximum [Member] | ||
Derivative agreements details: | ||
Weighted Average Price | $ 2.70 | [1] |
2020 [Member] | Oil Swaps [Member] | ||
Derivative agreements details: | ||
Quantity | USD_Bbl | 21,000 | |
Weighted Average Price | $ 60.72 | [2] |
2020 [Member] | Carbon California [Member] | Natural Gas Swaps [Member] | ||
Derivative agreements details: | ||
Quantity | USD-MMBtu | ||
Weighted Average Price | [1] | |
2020 [Member] | Carbon California [Member] | Natural Gas Collars [Member] | ||
Derivative agreements details: | ||
Quantity | USD-MMBtu | ||
Weighted Average Price | [1] | |
2020 [Member] | Carbon California [Member] | Oil Swaps [Member] | WTI Bbl [Member] | ||
Derivative agreements details: | ||
Quantity | USD_Bbl | 73,147 | |
Weighted Average Price | $ 50.12 | [2] |
2020 [Member] | Carbon California [Member] | Oil Swaps [Member] | Brent Bbl [Member] | ||
Derivative agreements details: | ||
Quantity | USD_Bbl | 139,682 | |
Weighted Average Price | $ 65.71 | [3] |
2021 [Member] | Carbon California [Member] | Natural Gas Swaps [Member] | ||
Derivative agreements details: | ||
Quantity | USD-MMBtu | ||
Weighted Average Price | [1] | |
2021 [Member] | Carbon California [Member] | Natural Gas Collars [Member] | ||
Derivative agreements details: | ||
Quantity | USD-MMBtu | ||
Weighted Average Price | [1] | |
2021 [Member] | Carbon California [Member] | Oil Swaps [Member] | WTI Bbl [Member] | ||
Derivative agreements details: | ||
Quantity | USD_Bbl | ||
Weighted Average Price | [2] | |
2021 [Member] | Carbon California [Member] | Oil Swaps [Member] | Brent Bbl [Member] | ||
Derivative agreements details: | ||
Quantity | USD_Bbl | 86,341 | |
Weighted Average Price | $ 67.12 | [3] |
[1] | NYMEX Henry Hub Natural Gas futures contract for the respective period. | |
[2] | NYMEX Light Sweet Crude West Texas Intermediate futures contract for the respective period. | |
[3] | Brent future and NYMEX contracts for the respective period. |
Physical Delivery Contracts a_4
Physical Delivery Contracts and Gas Derivatives (Details 1) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Commodity derivative contracts: | ||
Commodity derivative asset | $ 215 | |
Other long-term assets | 10 | |
Commodity derivative liabilities | 6,502 | |
Commodity derivative liabilities, non-current | $ 4,299 |
Physical Delivery Contracts a_5
Physical Delivery Contracts and Gas Derivatives (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Commodity derivative contracts: | ||||
Settlement (loss) gain | $ (1,108) | $ 345 | $ (2,169) | $ 463 |
Unrealized (loss) gain | (2,794) | (844) | (8,381) | 2,179 |
Total settlement and unrealized (loss) gain, net | $ (3,902) | $ (499) | $ (10,550) | $ 2,642 |
Physical Delivery Contracts a_6
Physical Delivery Contracts and Gas Derivatives (Details 3) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Commodity derivative assets: | ||
Commodity derivative asset | $ 215 | |
Other long-term assets | 10 | |
Total derivative assets | 225 | |
Commodity derivative liabilities: | ||
Commodity derivative liability (Note 13) | 6,502 | |
Commodity derivative liability | 4,299 | |
Total derivative liabilities | 10,801 | |
Gross Recognized Assets/Liabilities [Member] | ||
Commodity derivative assets: | ||
Commodity derivative asset | 334 | 624 |
Other long-term assets | 248 | 250 |
Total derivative assets | 582 | 874 |
Commodity derivative liabilities: | ||
Commodity derivative liability (Note 13) | (6,836) | (409) |
Commodity derivative liability | (4,547) | (240) |
Total derivative liabilities | (11,383) | (649) |
Gross Amounts Offset [Member] | ||
Commodity derivative assets: | ||
Commodity derivative asset | (334) | (409) |
Other long-term assets | (248) | (240) |
Total derivative assets | (582) | (649) |
Commodity derivative liabilities: | ||
Commodity derivative liability (Note 13) | 334 | 409 |
Commodity derivative liability | 248 | 240 |
Total derivative liabilities | 582 | 649 |
Net Recognized Fair Value Assets/Liabilities [Member] | ||
Commodity derivative assets: | ||
Commodity derivative asset | 215 | |
Other long-term assets | 10 | |
Total derivative assets | 225 | |
Commodity derivative liabilities: | ||
Commodity derivative liability (Note 13) | (6,502) | |
Commodity derivative liability | (4,299) | |
Total derivative liabilities | $ (10,801) |
Commitment and Contingencies (D
Commitment and Contingencies (Details) | 9 Months Ended |
Sep. 30, 2018USD_BblPartnership | |
October 2018 - March 2020 [Member] | |
Other Commitments [Line Items] | |
Capacity levels (Dekatherms per day) | Partnership | 3,230 |
October 2018 - March 2020 [Member] | Minimum [Member] | |
Other Commitments [Line Items] | |
Demand Charges (in dollars per dekatherm) | 0.20 |
October 2018 - March 2020 [Member] | Maximum [Member] | |
Other Commitments [Line Items] | |
Demand Charges (in dollars per dekatherm) | 0.62 |
April 2020 - May 2020 [Member] | |
Other Commitments [Line Items] | |
Capacity levels (Dekatherms per day) | Partnership | 2,150 |
Demand Charges (in dollars per dekatherm) | 0.20 |
June 2020 - May 2036 [Member] | |
Other Commitments [Line Items] | |
Capacity levels (Dekatherms per day) | Partnership | 1,000 |
Demand Charges (in dollars per dekatherm) | 0.20 |
Commitment and Contingencies _2
Commitment and Contingencies (Details Textual) | Sep. 30, 2018USD ($) |
Commitment and Contingencies (Textual) | |
Liability related to firm transportation contracts assumed | $ 166,000 |
Capital commitment | 6,900,000 |
Class A [Member] | |
Commitment and Contingencies (Textual) | |
Capital commitment | $ 23,600,000 |
Supplemental Cash Flow Disclo_3
Supplemental Cash Flow Disclosure (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash paid during the period for: | ||
Interest | $ 2,770 | $ 645 |
Non-cash transactions: | ||
Increase in asset retirement obligations | 3,590 | 5 |
Decrease in accounts payable and accrued liabilities included in oil and gas properties | (491) | (12) |
Non-cash acquisition of Carbon California interests (see note 3) | (18,906) | |
Carbon California Acquisition on February 1, 2018 (see note 3) | 17,114 | |
Obligations assumed with Seneca asset purchase (see note 2) | 330 | |
Accrued dividend for convertible preferred stock (see note 9) | 148 | |
Beneficial conversion feature for convertible preferred stock (see note 9) | 1,125 | |
Issuance of warrants for investment in affiliates | 7,094 | |
Exercise of warrant derivative (see note 3) | $ (1,792) |