Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Aug. 05, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ABRAXAS PETROLEUM CORP | |
Entity Central Index Key | 867,665 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 135,088,301 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 0 | $ 3,540 |
Accounts receivable: | ||
Joint owners | 2,038 | 1,552 |
Oil and gas production sales | 9,556 | 6,713 |
Other | 563 | 1,241 |
Total accounts receivable | 12,157 | 9,506 |
Derivative asset | 1,962 | 18,902 |
Other current assets | 757 | 726 |
Total current assets | 14,876 | 32,674 |
Oil and gas properties, full cost method of accounting: | ||
Proved | 797,673 | 787,683 |
Other property and equipment | 37,784 | 41,444 |
Total | 835,457 | 829,127 |
Less accumulated depreciation, depletion, and amortization | (690,135) | (604,289) |
Total property and equipment, net | 145,322 | 224,838 |
Deferred financing fees, net | 1,050 | 1,642 |
Derivative asset | 914 | 8,463 |
Other assets | 580 | 255 |
Total assets | 162,742 | 267,872 |
Current liabilities: | ||
Accounts payable | 22,068 | 24,825 |
Joint interest oil and gas production payable | 7,516 | 7,177 |
Accrued interest | 53 | 115 |
Other accrued expenses | 1,032 | 622 |
Derivative liability | 1,586 | 0 |
Current maturities of long-term debt | 1,313 | 2,330 |
Total current liabilities | 33,568 | 35,069 |
Long-term debt – less current maturities | 93,680 | 138,402 |
Other liabilities | 257 | 257 |
Derivative liability long-term | 3,638 | 0 |
Future site restoration | 8,577 | 9,679 |
Total liabilities | 139,720 | 183,407 |
Commitments and contingencies (Note 7) | ||
Stockholders’ Equity: | ||
Preferred stock, par value $0.01 per share – authorized 1,000,000 shares; -0- shares issued and outstanding | 0 | 0 |
Common stock, par value $0.01 per share, authorized 200,000,000 shares; 135,088,301 and 106,346,001 issued and outstanding, respectively | 1,351 | 1,063 |
Additional paid-in capital | 343,198 | 313,852 |
Accumulated deficit | (321,527) | (230,450) |
Total stockholders’ equity | 23,022 | 84,465 |
Total liabilities and stockholders’ equity | $ 162,742 | $ 267,872 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Stockholders’ Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 135,136,663 | 106,346,001 |
Common stock, shares outstanding (in shares) | 135,136,663 | 106,346,001 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues: | ||||
Oil and gas production revenues | $ 13,972 | $ 16,075 | $ 34,517 | $ 53,658 |
Other | 4 | 2 | 31 | 24 |
Total revenue | 13,976 | 16,077 | 34,548 | 53,682 |
Operating costs and expenses: | ||||
Lease operating | 4,599 | 5,236 | 13,609 | 17,806 |
Production taxes | 1,200 | 1,569 | 3,602 | 5,255 |
Rig expense | 192 | 0 | 534 | 0 |
Depreciation, depletion, and amortization | 6,371 | 10,165 | 17,932 | 31,044 |
Proved property impairment | 3,806 | 59,891 | 67,626 | 59,891 |
General and administrative (including stock-based compensation of $768, $835, $2,410 and $3,085, respectively) | 2,760 | 2,654 | 8,238 | 9,190 |
Operating expenses | 18,928 | 79,515 | 111,541 | 123,186 |
Operating (loss) income | (4,952) | (63,438) | (76,993) | (69,504) |
Other (income) expense: | ||||
Interest income | 0 | 0 | (1) | (1) |
Interest expense | 960 | 992 | 3,350 | 2,784 |
Amortization of deferred financing fees | 151 | 161 | 763 | 481 |
(Gain) loss on derivative contracts | (2,429) | (12,219) | 10,346 | (13,097) |
(Gain) on sale of assets | (374) | 0 | (374) | 0 |
Total other (income) expense | (1,692) | (11,066) | 14,084 | (9,833) |
(Loss) income from continuing operations before income tax | (3,260) | (52,372) | (91,077) | (59,671) |
Income tax (expense) benefit | 0 | 0 | 0 | 0 |
Net (loss) income from continuing operations | (3,260) | (52,372) | (91,077) | (59,671) |
Net loss from discontinued operations | 0 | 0 | 0 | (20) |
Net (loss) income | $ (3,260) | $ (52,372) | $ (91,077) | $ (59,691) |
Net (loss) income per common share - basic | ||||
Continuing operations (in dollars per share) | $ (0.02) | $ (0.50) | $ (0.77) | $ (0.57) |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 |
Total (in dollars per share) | (0.02) | (0.50) | (0.77) | (0.57) |
Net (loss) income per common share - diluted | ||||
Continuing operations (in dollars per share) | (0.02) | (0.50) | (0.77) | (0.57) |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 |
Total (in dollars per share) | $ (0.02) | $ (0.50) | $ (0.77) | $ (0.57) |
Denominator for basic earnings per share – weighted-average common shares outstanding (shares) | 133,546 | 104,614 | 118,274 | 104,561 |
Weighted Average Number of Shares Outstanding, Diluted | 133,546 | 104,614 | 118,274 | 104,561 |
CONSOLIDATED STATEMENTS OF OPE5
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Operating costs and expenses: | ||||
Stock-based compensation | $ 768 | $ 835 | $ 2,410 | $ 3,085 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating Activities | ||
Net (loss) income | $ (91,077) | $ (59,691) |
Net loss from discontinued operations | 0 | (20) |
Net (loss) from discontinued operations - net of tax | (91,077) | (59,671) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
(Gain) on sale of assets | (374) | 0 |
Change in derivative fair value | 10,346 | (13,097) |
Derivative contract settlements | 3,187 | 6,899 |
Monetization of derivative contracts | 14,370 | 4,610 |
Depreciation, depletion, and amortization | 17,932 | 31,044 |
Proved property impairment | 67,626 | 59,891 |
Amortization of deferred financing fees | 763 | 481 |
Accretion of future site restoration | 381 | 426 |
Stock-based compensation | 2,410 | 3,085 |
Non-cash director compensation | 40 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,651) | 9,592 |
Other assets | 1,454 | 1,819 |
Accounts payable and accrued expenses | (2,182) | (44,954) |
Net cash provided by continuing operations | 22,225 | 125 |
Net cash used in discontinued operations | 0 | (20) |
Net cash provided by operating activities | 22,225 | 105 |
Investing Activities | ||
Capital expenditures, including purchases and development of properties | (24,632) | (52,614) |
Proceeds from the sale of oil and gas properties | 13,571 | 138 |
Proceeds from the sale of non oil and gas assets | 4,022 | 0 |
Net cash used in investing activities | (7,039) | (52,476) |
Financing Activities | ||
Proceeds from long-term borrowings | 14,000 | 54,000 |
Payments on long-term borrowings | (59,739) | (5,498) |
Proceeds from issuance of common stock | 27,135 | 0 |
Deferred financing fees | (171) | (72) |
Exercise of stock options | 49 | 169 |
Net cash provided by continuing operations | (18,726) | 48,599 |
Decrease in cash and cash equivalents | (3,540) | (3,772) |
Cash and cash equivalents at beginning of period | 3,540 | 3,772 |
Cash and cash equivalents at end of period | 0 | |
Supplemental disclosure of cash flow information: | ||
Interest Paid | $ 3,395 | $ 2,756 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Significant Accounting Policies | Basis of Presentation The accounting policies followed by Abraxas Petroleum Corporation and its subsidiaries (the “Company”) are set forth in the notes to the Company’s audited consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on March 15, 2016. Such policies have been continued without change. Also, refer to the notes to those financial statements for additional details of the Company’s financial condition, results of operations, and cash flows. All material items included in those notes have not changed except as a result of normal transactions in the interim, or as disclosed within this report. The accompanying interim condensed consolidated financial statements have not been audited by our independent registered public accountants, and in the opinion of management, reflect all adjustments necessary for a fair presentation of the financial position and results of operations. Any and all adjustments are of a normal and recurring nature. Although management believes the unaudited interim related disclosures in these condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the SEC. The results of operations and the cash flows for the period ended September 30, 2016 are not necessarily indicative of the results to be expected for the full year. The condensed consolidated financial statements included herein should be read in conjunction with the consolidated audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Consolidation Principles The terms “Abraxas,” “Abraxas Petroleum,” “we,” “us,” “our” or the “Company” refer to Abraxas Petroleum Corporation and all of its subsidiaries, including Raven Drilling, LLC (“Raven Drilling”). Rig Accounting In accordance with SEC Regulation S-X, no income is to be recognized in connection with contractual drilling services performed in connection with properties in which the Company or its affiliates hold an ownership, or other economic interest. Any income not recognized as a result of this limitation is to be credited to the full cost pool and recognized through lower amortization as reserves are produced. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassification of Prior Period Balances Certain amounts in the prior period presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported net loss. New Accounting Standards and Disclosures In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The amended guidance addresses specific cash flow issues with the objective of reducing existing diversity in practice. The amendments in this update apply to all entities required to present a statement of cash flows. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. Amendments should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company has not yet determined what the effects of adopting this updated guidance will be on its statement of cash flows. In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-06, Derivatives and Hedging (Topic 815) : Contingent put and call options in debt instruments , which clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. The amendment will be effective prospectively for reporting periods beginning on or after December 31, 2016, and early adoption is permitted. The Company is currently assessing the impact of the ASU on the Company's condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606) : Principal Versus Agent Considerations (reporting revenue gross versus net), which clarifies the implementation guidance on principle versus agent considerations. The amendment will be effective prospectively for reporting periods beginning on or after December 31, 2017, and early adoption is not permitted. The Company is currently assessing the impact of the ASU on the Company's condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718) : Improvements to Employee Share-Based Payment Accounting, which includes provisions intended to simplify various aspects related to how share-based compensation payments are accounted for and presented in the financial statements. This amendment will be effective prospectively for reporting periods beginning on or after December 15, 2016, and early adoption is permitted. The Company is currently assessing the impact of the ASU on the Company's condensed consolidated financial statements. Stock-Based Compensation and Option Plans Stock Options The Company currently utilizes a standard option-pricing model (i.e., Black-Scholes) to measure the fair value of stock options granted to employees and directors. The following table summarizes the Company’s stock-based compensation expense related to stock options for the periods presented: Three Months Ended Nine Months Ended 2016 2015 2016 2015 $ 579 $ 463 $ 1,514 $ 1,917 The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2016 (shares in thousands): Number of Shares Weighted Average Option Exercise Price Per Share Weighted Average Grant Date Fair Value Per Share Outstanding, December 31, 2015 6,808 $ 2.89 $ 2.06 Granted 2,264 1.02 0.68 Exercised (50 ) 0.99 0.71 Cancelled/Forfeited (528 ) 2.82 1.93 Outstanding, September 30, 2016 8,494 $ 2.41 $ 1.71 Additional information related to stock options at September 30, 2016 and December 31, 2015 is as follows: As of September 30, 2016 , there was approximately $3.3 million of unamortized compensation expense related to outstanding stock options that will be recognized in 2016 through 2020. Restricted Stock Awards Restricted stock awards are awards of common stock that are subject to restrictions on transfer and to a risk of forfeiture if the awardee terminates employment with the Company prior to the lapse of the restrictions. The fair value of such stock was determined using the closing price on the grant date and compensation expense is recorded over the applicable vesting periods. The following table summarizes the Company’s restricted stock activity for the nine months ended September 30, 2016 : Number of Shares (thousands) Weighted Average Grant Date Fair Value Per Share Unvested, December 31, 2015 1,643 $ 3.44 Granted — — Vested/Released (42 ) 2.16 Forfeited (99 ) 3.63 Unvested, September 30, 2016 1,502 $ 3.47 The following table summarizes the Company’s stock-based compensation expense related to restricted stock for the periods presented: Three Months Ended Nine Months Ended 2016 2015 2016 2015 $ 189 $ 372 $ 896 $ 1,168 As of September 30, 2016 , there was approximately $2.2 million of unamortized compensation expense relating to outstanding restricted shares that will be recognized in 2016 through 2020. Oil and Gas Properties The Company follows the full cost method of accounting for oil and gas properties. Under this method, all direct costs and certain indirect costs associated with acquisition of properties and successful as well as unsuccessful exploration and development activities are capitalized. Depreciation, depletion, and amortization of capitalized oil and gas properties and estimated future development costs, excluding unproved properties, are based on the unit-of-production method based on proved reserves. Net capitalized costs of oil and gas properties, less related deferred taxes, are limited by country, to the lower of unamortized cost or the cost ceiling, defined as the sum of the present value of estimated future net revenues from proved reserves based on unescalated prices discounted at 10%, plus the cost of properties not being amortized, if any, plus the lower of cost or estimated fair value of unproved properties included in the costs being amortized, if any, less related income taxes. Costs in excess of the present value of estimated net revenue from proved reserves discounted at 10% are charged to proved property impairment expense. No gain or loss is recognized upon sale or disposition of oil and gas properties for full cost accounting companies with proceeds accounted for as an adjustment of capitalized cost. An exception to this rule occurs when the adjustment to the full cost pool results in a significant alteration of the relationship between capitalized cost and proved reserves. The Company applies the full cost ceiling test on a quarterly basis on the date of the latest balance sheet presented. At September 30, 2015 our net capitalized costs of oil and gas properties exceeded the present value of our estimated proved reserves by approximately $59.9 million , resulting in the recognition of an impairment for the three and nine months ended of $59.9 million . At September 30, 2016 , our net capitalized costs of oil and gas properties exceeded the cost ceiling of our estimated proved reserves by approximately $3.8 million , resulting in the recognition of a proved property impairment for the three and nine months then ended of $3.8 million and $67.6 million respectively. Impairment calculations did not consider the impact of our commodity derivative positions as generally accepted accounting principles only allow the inclusion of derivatives designated as cash flow hedges. Further write-downs in subsequent quarters are reasonably likely to occur if the trailing 12-month commodity prices continue to fall as compared to the commodity prices used in prior quarters. Restoration, Removal and Environmental Liabilities The Company is subject to extensive federal, state and local environmental laws and regulations. These laws regulate the discharge of materials into the environment and may require the Company to remove or mitigate the environmental effects of the disposal or release of petroleum substances at various sites. Environmental expenditures are expensed or capitalized depending on their future economic benefit. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefit are expensed. Liabilities for expenditures of a non-capital nature are recorded when environmental assessments and/or remediation is probable, and the costs can be reasonably estimated. Such liabilities are generally undiscounted unless the timing of cash payments for the liability or component is fixed or reliably determinable. The Company accounts for future site restoration obligations based on the guidance of ASC 410 which addresses accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. ASC 410 requires that the fair value of a liability for an asset's retirement obligation be recorded in the period in which it is incurred and the corresponding cost capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted to its then present value each period, and the capitalized cost is depreciated over the estimated useful life of the related asset. For all periods presented, we have included estimated future costs of abandonment and dismantlement in our full cost amortization base and amortize these costs as a component of our depletion expense in the accompanying condensed consolidated financial statements. The following table summarizes the Company’s future site restoration obligation transactions for the nine months ended September 30, 2016 and the year ended December 31, 2015: September 30, December 31, 2015 Beginning future site restoration obligation $ 9,679 $ 9,495 New wells placed on production and other 29 307 Deletions related to property disposals and plugging costs (1,427 ) (793 ) Accretion expense 381 565 Revisions and other (85 ) 105 Ending future site restoration obligation $ 8,577 $ 9,679 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company records income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the tax rates and laws expected to be in effect when the differences are expected to reverse. For the three and nine months ended September 30, 2016 , there was no income tax benefit due to the fact we are in a loss position and have recorded a full valuation allowance against our net deferred taxes. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of September 30, 2016 , the Company did not have any accrued interest or penalties related to uncertain tax positions. The tax years 2012 through 2015 remain open to examination by the tax jurisdictions to which the Company is subject. At December 31, 2015, the Company had, subject to the limitation discussed below, $201.9 million of net operating loss carryforwards for U.S. tax purposes. The loss carryforward will expire in varying amounts through 2035, if not utilized. Uncertainties exist as to the future utilization of the operating loss carryforwards therefore, we have established a valuation allowance of $103.7 million for deferred tax assets at December 31, 2015. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The following is a description of the Company’s debt as of September 30, 2016 and December 31, 2015, respectively: September 30, 2016 December 31, 2015 Senior secured credit facility $ 90,000 $ 134,000 Rig loan agreement 1,065 2,620 Real estate lien note 3,928 4,112 94,993 140,732 Less current maturities (1,313 ) (2,330 ) $ 93,680 $ 138,402 Credit Facility We have a senior secured credit facility with Société Générale, as administrative agent and issuing lender, and certain other lenders, which we refer to as the credit facility. As of September 30, 2016 , $90.0 million was outstanding under the credit facility. The credit facility has a maximum commitment of $300.0 million and availability is subject to a borrowing base. The borrowing base is determined semi-annually by the lenders based upon our reserve reports, one of which must be prepared by our independent petroleum engineers and one of which may be prepared internally. The amount of the borrowing base is calculated by the lenders based upon their valuation of our proved reserves securing the facility utilizing these reserve reports and their own internal decisions. In addition, the lenders, in their sole discretion, are able to make one additional borrowing base redetermination during any six-month period between scheduled redeterminations and we are able to request one redetermination during any six-month period between scheduled redeterminations. The borrowing base will be automatically reduced in connection with any sales of producing properties with a market value of 5% or more of our then-current borrowing base and in connection with any hedge termination which could reduce the collateral value by 5% or more. Our borrowing base can never exceed the $300.0 million maximum commitment amount. At September 30, 2016 , we had a borrowing base of $130.0 million , based on an amendment on April 22, 2016, which we refer to as the April 2016 Amendment. In accordance with the terms of the April 2016 Amendment, the borrowing base was automatically reduced to $120.0 million effective October 1, 2016. The borrowing base was further reduced to $115.0 million on October 31, 2016 in connection with the regularly scheduled redetermination, which we refer to as the Fall 2016 Redetermination. Outstanding amounts under the credit facility bear interest (x) at any time an event of default exists, at 3% per annum plus the amounts set forth below, (y) from April 1, 2016 to October 1, 2016 0.25% per annum plus the rates set forth below and (z) at all other times, at (a) the greater of (1) the reference rate announced from time to time by Société Générale, (2) the Federal Funds Rate plus 0.5% , and (3) a rate determined by Société Générale as the daily one-month LIBOR plus, in each case, (b) 0.75% - 1.75% , depending on the utilization of the borrowing base, or, if we elect, LIBOR plus, in each case, 1.75% - 2.75% depending on the utilization of the borrowing base. At September 30, 2016 , the interest rate on the credit facility was approximately 3.02% assuming LIBOR borrowings. Subject to earlier termination rights and events of default, the stated maturity date of the credit facility is June 30, 2018 . Interest is payable quarterly on reference rate advances and not less than quarterly on LIBOR advances. We are permitted to terminate the credit facility and are able, from time to time, to permanently reduce the lenders’ aggregate commitment under the credit facility in compliance with certain notice and dollar increment requirements. Each of our subsidiaries has guaranteed our obligations under the credit facility on a senior secured basis. Obligations under the credit facility are secured by a first priority perfected security interest, subject to certain permitted encumbrances, in all of our and our subsidiary guarantors’ material property and assets, other than Raven Drilling. In connection with the April 2016 Amendment, we also agreed to grant our lenders a security interest in our headquarters building (in addition to the lien granted to the lender under our building loan described below) and two ranches we own, none of which had previously secured our obligations under the credit facility. One of the ranches was sold in September 2016 in connection with the sale of our Portilla oil and gas properties. Under the credit facility, we are subject to customary covenants, including certain financial covenants and reporting requirements. We are required to maintain a current ratio, as of the last day of each quarter of not less than 1.00 to 1.00 and an interest coverage ratio of not less than 2.50 to 1.00. We are also required as of the last day of each quarter to maintain a total debt to EBITDAX ratio of not more than 4.00 to 1.00. The current ratio is defined as the ratio of consolidated current assets to consolidated current liabilities. For the purposes of this calculation, current assets include the portion of the borrowing base which is undrawn but excludes any cash deposited with a counter-party to a hedging arrangement and any assets representing a valuation account arising from the application of ASC 815 and ASC 410-20 and current liabilities exclude the current portion of long-term debt and any liabilities representing a valuation account arising from the application of ASC 815 and ASC 410-20. The interest coverage ratio is defined as the ratio of consolidated EBITDAX to consolidated interest expense for the four fiscal quarters ended on the calculation date. For the purposes of this calculation, EBITDAX is defined as the sum of consolidated net income plus interest expense, oil and gas exploration expenses, income, franchise or margin taxes, depreciation, amortization, depletion and other non-cash charges including non-cash charges resulting from the application of ASC 718, ASC 815 and ASC 410-20 plus all realized net cash proceeds arising from the settlement or monetization of any hedge contracts plus expenses incurred in connection with the negotiation, execution, delivery and performance of the credit facility plus expenses incurred in connection with any acquisition permitted under the credit facility plus expenses incurred in connection with any offering of senior unsecured notes, subordinated debt or equity plus up to $1.0 million of extraordinary expenses in any 12-month period plus extraordinary losses minus all non-cash items of income which were included in determining consolidated net loss, including all non-cash items resulting from the application of ASC 815 and ASC 410-20. Interest expense includes total interest, letter of credit fees and other fees and expenses incurred in connection with any debt. The total debt to EBITDAX ratio is defined as the ratio of total debt to consolidated EBITDAX for the four fiscal quarters ended on the calculation date. For the purposes of this calculation, total debt is the outstanding principal amount of debt, excluding debt associated with the office building, Raven Drilling’s rig loan and obligations with respect to surety bonds and derivative contracts . At September 30, 2016 , we were in compliance with all of our debt covenants. As of September 30, 2016 , the interest coverage ratio was 9.65 to 1.00, the total debt to EBITDAX ratio was 2.37 to 1.00, and our current ratio was 1.73 to 1.00. The credit facility contains a number of covenants that, among other things, restrict our ability to: • incur or guarantee additional indebtedness; • transfer or sell assets; • create liens on assets; • engage in transactions with affiliates other than on an “arm’s length” basis; • make any change in the principal nature of our business; and • permit a change of control. The April 2016 Amendment, also included certain additional covenants including: • 100% of the net proceeds from any sale of any of our properties occurring between April 1, 2016 and October 1, 2016 must be used to repay amounts outstanding under the credit facility; • 100% of the net proceeds from any terminations of derivative contracts must be used to repay amounts outstanding under the credit facility; • if the sum of our cash on hand plus liquid investments exceeds $10.0 million , then the amount in excess of $10.0 million must be used to pay amounts outstanding under the credit facility; and • granting the lenders a security interest in at least 90% of the PV-10 of our proven reserves. The credit facility also contains customary events of default, including nonpayment of principal or interest, violations of covenants, cross default and cross acceleration to certain other indebtedness, bankruptcy and material judgments and liabilities. Rig Loan Agreement On September 19, 2011, Raven Drilling entered into a rig loan agreement, secured by our Oilwell 2,000 HP diesel electric drilling rig (the “Collateral”). The original principal amount of the note was $7.0 million and bears interest at 4.26% . The note is payable in monthly interest and principal payments in the amount of $179,695 . Subject to earlier prepayment provisions and events of default, the stated maturity date of the note is February 14, 2017 . As of September 30, 2016 and December 31, 2015 , $1.1 million and $2.6 million , respectively, were outstanding under the rig loan agreement. The Company has guaranteed Raven Drilling’s obligations under the rig loan agreement and associated note. Obligations under the rig loan agreement are secured by a first priority perfected security interest, subject to certain permitted encumbrances, in the Collateral. Real Estate Lien Note We have a real estate lien note secured by a first lien deed of trust on the property and improvements which serves as our corporate headquarters. The note bears interest at a fixed rate of 4.25% and is payable in monthly installments of $ 34,354 . Beginning August 20, 2018, the interest rate will adjust to the bank's then current prime rate plus 1.00% with a maximum rate of 7.25% . The maturity date of the note is July 20, 2023 . As of September 30, 2016 and December 31, 2015 , $3.9 million and $4.1 million , respectively, were outstanding on the note. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (In thousands, except per share data) Numerator: Net loss from continuing operations $ (3,260 ) $ (52,372 ) $ (91,077 ) $ (59,671 ) Net loss from discontinued operations — — — (20 ) (3,260 ) (52,372 ) (91,077 ) (59,691 ) Denominator: Denominator for basic earnings per share – weighted-average common shares outstanding 133,546 104,614 118,274 104,561 Effect of dilutive securities: Stock options and restricted shares — — — — Denominator for diluted earnings per share – adjusted weighted-average shares and assumed exercise of options and restricted shares 133,546 104,614 118,274 104,561 Net loss per common share - basic Continuing operations $ (0.02 ) $ (0.50 ) $ (0.77 ) $ (0.57 ) Discontinued operations — — — — $ (0.02 ) $ (0.50 ) $ (0.77 ) $ (0.57 ) Net loss per common share - diluted Continuing operations $ (0.02 ) $ (0.50 ) $ (0.77 ) $ (0.57 ) Discontinued operations — — — — $ (0.02 ) $ (0.50 ) $ (0.77 ) $ (0.57 ) Basic earnings per share, excluding any dilutive effects of stock options and unvested restricted stock, is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted loss per share is computed similar to basic; however diluted loss per share reflects the assumed conversion of all potentially dilutive securities. For the three and nine months ended September 30, 2016 , 1,766 and 1,724 potential shares related to unvested restricted shares and options were excluded from the calculation of diluted loss per share since their inclusion would have been anti-dilutive due to losses incurred in the periods. |
Hedging Program and Derivatives
Hedging Program and Derivatives | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Hedging Program and Derivatives | Hedging Program and Derivatives The derivative contracts we utilize are based on index prices that may and often do differ from the actual oil and gas prices realized in our operations. Our derivative contracts do not qualify for hedge accounting; therefore, fluctuations in the market value of the derivative contracts are recognized in earnings during the current period. There are no netting agreements relating to these derivative contracts and there is no policy to offset. The following table sets forth the summary position of our derivative contracts as of September 30, 2016 : Fixed price swaps: Oil - WTI Contract Periods Daily Volume (Bbl) Swap Price (per Bbl) 2016 October - December 2,500 $ 43.25 2017 2,401 $ 54.53 2018 1,796 $ 47.48 Subsequent to September 30, 2016 , we entered into the following derivative contracts. Oil - WTI Contract Periods Daily Volume (Bbl) Swap Price (per Bbl) 2019 1,197 $ 54.54 The following table illustrates the impact of derivative contracts on the Company’s balance sheet: Fair Value of Derivative Contracts as of September 30, 2016 Asset Derivatives Liability Derivatives Derivatives not designated as hedging instruments Balance Sheet Location Fair Value Balance Sheet Location Fair Value Commodity price derivatives Derivatives – current $ 1,962 Derivatives – current $ 1,586 Commodity price derivatives Derivatives – long-term 914 Derivatives – long-term 3,638 $ 2,876 $ 5,224 Fair Value of Derivative Contracts as of December 31, 2015 Asset Derivatives Liability Derivatives Derivatives not designated as hedging instruments Balance Sheet Location Fair Value Balance Sheet Location Fair Value Commodity price derivatives Derivatives – current $ 18,902 Derivatives – current $ — Commodity price derivatives Derivatives – long-term 8,463 Derivatives – long-term — $ 27,365 $ — Gains and losses from derivative activities are reflected as “(Gain) loss on derivative contracts” in the accompanying Condensed Consolidated Statements of Operations. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | Financial Instruments Assets and liabilities measured at fair value are categorized into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels are defined as follows: • Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. • Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company is further required to assess the creditworthiness of the counter-party to the derivative contract. The results of the assessment of non-performance risk, based on the counter-party’s credit risk, could result in an adjustment of the carrying value of the derivative instrument. The following tables sets forth information about the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 , and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands): Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of September 30, 2016 Assets: NYMEX Fixed Price Derivative contracts $ — $ 2,876 $ — $ 2,876 Total Assets $ — $ 2,876 $ — $ 2,876 Liabilities: NYMEX Fixed Price Derivative contracts $ — $ 5,224 $ — $ 5,224 Total Liabilities $ — $ 5,224 $ — $ 5,224 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of December 31, 2015 Assets: NYMEX Fixed Price Derivative contracts $ — $ 21,731 $ — $ 21,731 NYMEX Collars — — 5,634 5,634 Total Assets $ — $ 21,731 $ 5,634 $ 27,365 The Company’s derivative contracts consisted of NYMEX-based fixed price swaps as of September 30, 2016 , and NYMEX-based fixed price swaps and three-way collar contracts as of December 31, 2015. Under fixed price swaps, we receive a fixed price for our production and pay a variable market price to the contract counter-party. Three-way collar contracts combine a long put, a short put and a short call. Under a collar, we pay the counterparty if the market price is above the ceiling price (short call) and the counterparty pays us if the market price is below the floor price (long put). The use of the long put combined with a short put allows us to sell a call at a higher price, thus establishing a higher ceiling and limits our exposure to future settlement payments while also restricting our downward risk to the difference between the long put and the short put if the price drops below the price of the short put. This allows us to settle our contracts for the market price plus the spread between the short put and the long put in a case where the market price has fallen below the short put fixed price. The NYMEX-based fixed price derivative contracts and three-way collars are indexed to NYMEX futures contracts, which are actively traded, for the underlying commodity and are commonly used in the energy industry. A number of financial institutions and large energy companies act as counter-parties to these type of derivative contracts. As the fair value of NYMEX-based fixed price swap contracts are based on a number of inputs, including contractual volumes and prices stated in each derivative contract, current and future NYMEX commodity prices, and quantitative models that are based upon readily observable market parameters that are actively quoted and can be validated through external sources, we have characterized these derivative contracts as Level 2. In order to verify the third party valuation, we enter the various inputs into a model and compare our results to the third party for reasonableness. The fair value of the collar instruments are based on inputs that are not as observable as the fixed price swaps. In addition to the actively quoted market price, variables such as time value, volatility and other unobservable inputs are used. Accordingly, these instruments have been classified as Level 3. The following is additional information for the Company's recurring fair value measurements using significant unobservable inputs (Level 3 inputs) for the nine months ended September 30, 2016 . Unobservable inputs at January 1, 2016 $ 5,634 Changes in market value (2,151 ) Settlements during the period (3,483 ) Unobservable inputs at September 30, 2016 $ — Nonrecurring Fair Value Measurements The Company records certain assets and liabilities at fair value related to certain nonfinancial assets and liabilities that may be acquired in a business combination and thereby measured at fair value and the initial recognition of future site restoration obligations for which fair value is used. The future site restoration obligation estimates are derived from historical costs as well as management’s expectation of future cost environments. As there is no corroborating market activity to support the assumptions used, the Company has designated these liabilities as Level 3. A reconciliation of the beginning and ending balances of the Company’s future site restoration is presented in Note 1. Other Financial Instruments The carrying amounts of our cash, cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term maturities and/or liquid nature of these assets and liabilities. The carrying value of our debt approximates fair value as the interest rates are market rates and this debt is considered Level 2. |
Contingencies - Litigation
Contingencies - Litigation | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, the Company is involved in litigation relating to claims arising out of its operations in the normal course of business. At September 30, 2016 , the Company was not involved in any legal proceedings that are expected, individually or in the aggregate, to have a material adverse effect on its financial position or results of operations. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Subsequent to September 30, 2016 our Borrowing Base was redetermined to $115.0 million . This Borrowing Base is fully conforming and represents a $5.0 million reduction from the Company’s previously fully conforming Borrowing Base of $120.0 million . All other terms of the borrowing base remain unchanged. In connection with the redetermination of the Borrowing Base, we entered into the following derivative contracts. Oil - WTI Contract Periods Daily Volume (Bbl) Swap Price (per Bbl) 2019 1,197 $ 54.54 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Consolidation Principles The terms “Abraxas,” “Abraxas Petroleum,” “we,” “us,” “our” or the “Company” refer to Abraxas Petroleum Corporation and all of its subsidiaries, including Raven Drilling, LLC (“Raven Drilling”). |
Rig Accounting | Rig Accounting In accordance with SEC Regulation S-X, no income is to be recognized in connection with contractual drilling services performed in connection with properties in which the Company or its affiliates hold an ownership, or other economic interest. Any income not recognized as a result of this limitation is to be credited to the full cost pool and recognized through lower amortization as reserves are produced. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Reclassifications of Prior Period Balances | Reclassification of Prior Period Balances Certain amounts in the prior period presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported net loss. |
New Accounting Standards and Disclosures | New Accounting Standards and Disclosures In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The amended guidance addresses specific cash flow issues with the objective of reducing existing diversity in practice. The amendments in this update apply to all entities required to present a statement of cash flows. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. Amendments should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company has not yet determined what the effects of adopting this updated guidance will be on its statement of cash flows. In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-06, Derivatives and Hedging (Topic 815) : Contingent put and call options in debt instruments , which clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. The amendment will be effective prospectively for reporting periods beginning on or after December 31, 2016, and early adoption is permitted. The Company is currently assessing the impact of the ASU on the Company's condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606) : Principal Versus Agent Considerations (reporting revenue gross versus net), which clarifies the implementation guidance on principle versus agent considerations. The amendment will be effective prospectively for reporting periods beginning on or after December 31, 2017, and early adoption is not permitted. The Company is currently assessing the impact of the ASU on the Company's condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718) : Improvements to Employee Share-Based Payment Accounting, which includes provisions intended to simplify various aspects related to how share-based compensation payments are accounted for and presented in the financial statements. This amendment will be effective prospectively for reporting periods beginning on or after December 15, 2016, and early adoption is permitted. The Company is currently assessing the impact of the ASU on the Company's condensed consolidated financial statements. |
Share-Based Payments | Stock Options The Company currently utilizes a standard option-pricing model (i.e., Black-Scholes) to measure the fair value of stock options granted to employees and directors. |
Restricted Stock Awards | Restricted Stock Awards Restricted stock awards are awards of common stock that are subject to restrictions on transfer and to a risk of forfeiture if the awardee terminates employment with the Company prior to the lapse of the restrictions. The fair value of such stock was determined using the closing price on the grant date and compensation expense is recorded over the applicable vesting periods. |
Estimates of Proved Oil and Gas Reserves | Oil and Gas Properties The Company follows the full cost method of accounting for oil and gas properties. Under this method, all direct costs and certain indirect costs associated with acquisition of properties and successful as well as unsuccessful exploration and development activities are capitalized. Depreciation, depletion, and amortization of capitalized oil and gas properties and estimated future development costs, excluding unproved properties, are based on the unit-of-production method based on proved reserves. Net capitalized costs of oil and gas properties, less related deferred taxes, are limited by country, to the lower of unamortized cost or the cost ceiling, defined as the sum of the present value of estimated future net revenues from proved reserves based on unescalated prices discounted at 10%, plus the cost of properties not being amortized, if any, plus the lower of cost or estimated fair value of unproved properties included in the costs being amortized, if any, less related income taxes. Costs in excess of the present value of estimated net revenue from proved reserves discounted at 10% are charged to proved property impairment expense. No gain or loss is recognized upon sale or disposition of oil and gas properties for full cost accounting companies with proceeds accounted for as an adjustment of capitalized cost. An exception to this rule occurs when the adjustment to the full cost pool results in a significant alteration of the relationship between capitalized cost and proved reserves. The Company applies the full cost ceiling test on a quarterly basis on the date of the latest balance sheet presented. At September 30, 2015 our net capitalized costs of oil and gas properties exceeded the present value of our estimated proved reserves by approximately $59.9 million , resulting in the recognition of an impairment for the three and nine months ended of $59.9 million . At September 30, 2016 , our net capitalized costs of oil and gas properties exceeded the cost ceiling of our estimated proved reserves by approximately $3.8 million , resulting in the recognition of a proved property impairment for the three and nine months then ended of $3.8 million and $67.6 million respectively. Impairment calculations did not consider the impact of our commodity derivative positions as generally accepted accounting principles only allow the inclusion of derivatives designated as cash flow hedges. Further write-downs in subsequent quarters are reasonably likely to occur if the trailing 12-month commodity prices continue to fall as compared to the commodity prices used in prior quarters. |
Restoration, Removal and Environmental Liabilities | Restoration, Removal and Environmental Liabilities The Company is subject to extensive federal, state and local environmental laws and regulations. These laws regulate the discharge of materials into the environment and may require the Company to remove or mitigate the environmental effects of the disposal or release of petroleum substances at various sites. Environmental expenditures are expensed or capitalized depending on their future economic benefit. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefit are expensed. Liabilities for expenditures of a non-capital nature are recorded when environmental assessments and/or remediation is probable, and the costs can be reasonably estimated. Such liabilities are generally undiscounted unless the timing of cash payments for the liability or component is fixed or reliably determinable. The Company accounts for future site restoration obligations based on the guidance of ASC 410 which addresses accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. ASC 410 requires that the fair value of a liability for an asset's retirement obligation be recorded in the period in which it is incurred and the corresponding cost capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted to its then present value each period, and the capitalized cost is depreciated over the estimated useful life of the related asset. For all periods presented, we have included estimated future costs of abandonment and dismantlement in our full cost amortization base and amortize these costs as a component of our depletion expense in the accompanying condensed consolidated financial statements. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Stock Options Activity and Related Compensation Expense | The following table summarizes the Company’s stock-based compensation expense related to stock options for the periods presented: Three Months Ended Nine Months Ended 2016 2015 2016 2015 $ 579 $ 463 $ 1,514 $ 1,917 The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2016 (shares in thousands): Number of Shares Weighted Average Option Exercise Price Per Share Weighted Average Grant Date Fair Value Per Share Outstanding, December 31, 2015 6,808 $ 2.89 $ 2.06 Granted 2,264 1.02 0.68 Exercised (50 ) 0.99 0.71 Cancelled/Forfeited (528 ) 2.82 1.93 Outstanding, September 30, 2016 8,494 $ 2.41 $ 1.71 Additional information related to stock options at September 30, 2016 and December 31, 2015 is as follows: |
Schedule of Unvested Restricted Stock Activity and Related Compensation Expense | The following table summarizes the Company’s restricted stock activity for the nine months ended September 30, 2016 : Number of Shares (thousands) Weighted Average Grant Date Fair Value Per Share Unvested, December 31, 2015 1,643 $ 3.44 Granted — — Vested/Released (42 ) 2.16 Forfeited (99 ) 3.63 Unvested, September 30, 2016 1,502 $ 3.47 The following table summarizes the Company’s stock-based compensation expense related to restricted stock for the periods presented: Three Months Ended Nine Months Ended 2016 2015 2016 2015 $ 189 $ 372 $ 896 $ 1,168 |
Asset Retirement Obligations | The following table summarizes the Company’s future site restoration obligation transactions for the nine months ended September 30, 2016 and the year ended December 31, 2015: September 30, December 31, 2015 Beginning future site restoration obligation $ 9,679 $ 9,495 New wells placed on production and other 29 307 Deletions related to property disposals and plugging costs (1,427 ) (793 ) Accretion expense 381 565 Revisions and other (85 ) 105 Ending future site restoration obligation $ 8,577 $ 9,679 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-term Debt | The following is a description of the Company’s debt as of September 30, 2016 and December 31, 2015, respectively: September 30, 2016 December 31, 2015 Senior secured credit facility $ 90,000 $ 134,000 Rig loan agreement 1,065 2,620 Real estate lien note 3,928 4,112 94,993 140,732 Less current maturities (1,313 ) (2,330 ) $ 93,680 $ 138,402 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income (Loss) Per Share | The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (In thousands, except per share data) Numerator: Net loss from continuing operations $ (3,260 ) $ (52,372 ) $ (91,077 ) $ (59,671 ) Net loss from discontinued operations — — — (20 ) (3,260 ) (52,372 ) (91,077 ) (59,691 ) Denominator: Denominator for basic earnings per share – weighted-average common shares outstanding 133,546 104,614 118,274 104,561 Effect of dilutive securities: Stock options and restricted shares — — — — Denominator for diluted earnings per share – adjusted weighted-average shares and assumed exercise of options and restricted shares 133,546 104,614 118,274 104,561 Net loss per common share - basic Continuing operations $ (0.02 ) $ (0.50 ) $ (0.77 ) $ (0.57 ) Discontinued operations — — — — $ (0.02 ) $ (0.50 ) $ (0.77 ) $ (0.57 ) Net loss per common share - diluted Continuing operations $ (0.02 ) $ (0.50 ) $ (0.77 ) $ (0.57 ) Discontinued operations — — — — $ (0.02 ) $ (0.50 ) $ (0.77 ) $ (0.57 ) |
Hedging Program and Derivativ19
Hedging Program and Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Contract Position | The following table sets forth the summary position of our derivative contracts as of September 30, 2016 : Fixed price swaps: Oil - WTI Contract Periods Daily Volume (Bbl) Swap Price (per Bbl) 2016 October - December 2,500 $ 43.25 2017 2,401 $ 54.53 2018 1,796 $ 47.48 Subsequent to September 30, 2016 , we entered into the following derivative contracts. Oil - WTI Contract Periods Daily Volume (Bbl) Swap Price (per Bbl) 2019 1,197 $ 54.54 |
Impact of Derivative Contracts on Balance Sheet | The following table illustrates the impact of derivative contracts on the Company’s balance sheet: Fair Value of Derivative Contracts as of September 30, 2016 Asset Derivatives Liability Derivatives Derivatives not designated as hedging instruments Balance Sheet Location Fair Value Balance Sheet Location Fair Value Commodity price derivatives Derivatives – current $ 1,962 Derivatives – current $ 1,586 Commodity price derivatives Derivatives – long-term 914 Derivatives – long-term 3,638 $ 2,876 $ 5,224 Fair Value of Derivative Contracts as of December 31, 2015 Asset Derivatives Liability Derivatives Derivatives not designated as hedging instruments Balance Sheet Location Fair Value Balance Sheet Location Fair Value Commodity price derivatives Derivatives – current $ 18,902 Derivatives – current $ — Commodity price derivatives Derivatives – long-term 8,463 Derivatives – long-term — $ 27,365 $ — |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value | The following tables sets forth information about the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 , and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands): Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of September 30, 2016 Assets: NYMEX Fixed Price Derivative contracts $ — $ 2,876 $ — $ 2,876 Total Assets $ — $ 2,876 $ — $ 2,876 Liabilities: NYMEX Fixed Price Derivative contracts $ — $ 5,224 $ — $ 5,224 Total Liabilities $ — $ 5,224 $ — $ 5,224 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of December 31, 2015 Assets: NYMEX Fixed Price Derivative contracts $ — $ 21,731 $ — $ 21,731 NYMEX Collars — — 5,634 5,634 Total Assets $ — $ 21,731 $ 5,634 $ 27,365 |
Schedule of Reciuring Fair Value Measurements Using Significant Unobservable Inputs | The following is additional information for the Company's recurring fair value measurements using significant unobservable inputs (Level 3 inputs) for the nine months ended September 30, 2016 . Unobservable inputs at January 1, 2016 $ 5,634 Changes in market value (2,151 ) Settlements during the period (3,483 ) Unobservable inputs at September 30, 2016 $ — |
Subsequent Events (Tables)
Subsequent Events (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Schedule of Price Risk Derivatives [Table Text Block] | In connection with the redetermination of the Borrowing Base, we entered into the following derivative contracts. Oil - WTI Contract Periods Daily Volume (Bbl) Swap Price (per Bbl) 2019 1,197 $ 54.54 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Share-Based Payments | |||||
Stock-based compensation expense | $ 768 | $ 835 | $ 2,410 | $ 3,085 | |
Proved property impairment | 3,806 | 59,891 | 67,626 | 59,891 | |
Entity's asset retirement obligation transactions [Roll Forward] | |||||
Beginning future site restoration obligation | 9,679 | 9,495 | $ 9,495 | ||
New wells placed on production and other | 29 | 307 | |||
Deletions related to property disposals and plugging costs | (1,427) | (793) | |||
Accretion expense | 381 | 426 | 565 | ||
Revisions and other | (85) | 105 | |||
Ending future site restoration obligation | $ 8,577 | $ 8,577 | $ 9,679 | ||
Employee Stock Option [Member] | |||||
Number of Shares (thousands) | |||||
Outstanding, December 31, 2015 | 6,808 | ||||
Granted | 2,264 | ||||
Exercised | (50) | ||||
Cancelled | (528) | ||||
Outstanding, September 30, 2016 | 8,494 | 8,494 | 6,808 | ||
Weighted Average Option Exercise Price Per Share | |||||
Outstanding, December 31, 2015 | $ 2.89 | ||||
Granted | 1.02 | ||||
Exercised | 0.99 | ||||
Cancelled | 2.82 | ||||
Outstanding, September 30, 2016 | $ 2.41 | 2.41 | $ 2.89 | ||
Weighted Average Grant Date Fair Value Per Share | |||||
Outstanding, December 31, 2015 | 2.06 | ||||
Granted | 0.68 | ||||
Exercised | 0.71 | ||||
Cancelled | 1.93 | ||||
Outstanding, September 30, 2016 | $ 1.71 | $ 1.71 | $ 2.06 | ||
Share-Based Payments | |||||
Options exercisable | 5,122 | 5,122 | 4,305 | ||
Stock-based compensation expense | $ 579 | 463 | $ 1,514 | 1,917 | |
Unamortized compensation cost expected to be recognized in 2016 through 2020 | $ 3,300 | $ 3,300 | |||
Restricted Stock [Member] | |||||
Number of Shares (thousands) | |||||
Unvested, December 31, 2015 | 1,643 | ||||
Granted | 0 | ||||
Vested/Released | (42) | ||||
Forfeited | (99) | ||||
Unvested, September 30, 2016 | 1,502 | 1,502 | 1,643 | ||
Weighted Average Grant Date Fair Value Per Share (in US$ per share) | |||||
Unvested, December 31, 2015 | $ 3.44 | ||||
Granted | 0 | ||||
Vested/Released | 2.16 | ||||
Forfeited | 3.63 | ||||
Unvested, September 30, 2016 | $ 3.47 | $ 3.47 | $ 3.44 | ||
Share-Based Payments | |||||
Stock-based compensation expense | $ 189 | $ 372 | $ 896 | $ 1,168 | |
Unamortized compensation cost expected to be recognized in 2016 through 2020 | $ 2,200 | $ 2,200 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||
Income tax (expense) benefit | $ 0 | $ 0 | $ 0 | $ 0 | |
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | $ 201,900 | ||||
Deferred Tax Assets, Valuation Allowance | $ 103,700 |
Long-Term Debt (Details)
Long-Term Debt (Details) | Apr. 01, 2016USD ($) | Sep. 30, 2016USD ($)hp | Sep. 30, 2016USD ($)reporthp | Oct. 31, 2016USD ($) | Oct. 01, 2016USD ($) | Dec. 31, 2015USD ($) |
Long-term debt [Abstract] | ||||||
Long-term debt | $ 94,993,000 | $ 94,993,000 | $ 140,732,000 | |||
Less current maturities | (1,313,000) | (1,313,000) | (2,330,000) | |||
Long-term debt – less current maturities | 93,680,000 | 93,680,000 | 138,402,000 | |||
Credit Facility [Abstract] | ||||||
Maximum borrowing capacity | 300,000,000 | 300,000,000 | ||||
Current borrowing base | 130,000,000 | $ 130,000,000 | ||||
Number of reserve reports prepared by independent petroleum engineers | report | 1 | |||||
Number of reserve report prepared internally | report | 1 | |||||
Financial Covenants, Minimum Current Ratio | 1 | |||||
Financial covenants, interest coverage ratio | 2.50 | |||||
Financial covenants, total debt To EBITDAX ratio | 4 | |||||
Interest Coverage Ratio | 9.65 | |||||
Total debt to ebitdax ratio | 2.37 | |||||
Current Ratio | 1.73 | |||||
Line of Credit, Covenant, Cash and Liquid Investments Triggering Credit Repayment | $ 10,000,000 | |||||
Senior Secured Credit Facility [Member] | ||||||
Long-term debt [Abstract] | ||||||
Long-term debt | $ 90,000,000 | $ 90,000,000 | 134,000,000 | |||
Credit Facility [Abstract] | ||||||
Market value of property (in hundredths) | 5.00% | |||||
Reduced collateral value (in hundredths) | 5.00% | |||||
Percentage added to variable rate (in hundredths) | 0.50% | |||||
Interest rate on credit facility (in hundredths) | 3.02% | 3.02% | ||||
Line of Credit, Minimum Default Interest Rate | 3.00% | 0.25% | ||||
Senior Secured Credit Facility [Member] | Minimum [Member] | ||||||
Credit Facility [Abstract] | ||||||
Percentage added to reference rate (in hundredths) | 0.75% | |||||
Percentage added to variable rate (in hundredths) | 1.75% | |||||
Senior Secured Credit Facility [Member] | Maximum [Member] | ||||||
Credit Facility [Abstract] | ||||||
Percentage added to reference rate (in hundredths) | 1.75% | |||||
Percentage added to variable rate (in hundredths) | 2.75% | |||||
Rig Loan Agreement [Member] | ||||||
Long-term debt [Abstract] | ||||||
Long-term debt | $ 1,065,000 | $ 1,065,000 | 2,620,000 | |||
Credit Facility [Abstract] | ||||||
Maturity date of debt instrument | Feb. 14, 2017 | |||||
Rig Loan Agreement [Abstract] | ||||||
Power of diesel electric drilling rig (in horsepower) | hp | 2,000 | 2,000 | ||||
Amount that can be borrowed under rig loan agreement | $ 7,000,000 | $ 7,000,000 | ||||
Interest rate on debt (in hundredths) | 4.26% | 4.26% | ||||
Real Estate Lien Note [Abstract] | ||||||
Monthly installments of principal and interest | $ 179,695 | |||||
Real Estate Lien Note [Member] | ||||||
Long-term debt [Abstract] | ||||||
Long-term debt | $ 3,928,000 | $ 3,928,000 | $ 4,112,000 | |||
Credit Facility [Abstract] | ||||||
Maturity date of debt instrument | Jul. 20, 2023 | |||||
Real Estate Lien Note [Abstract] | ||||||
Fixed interest rate on note (in hundredths) | 4.25% | 4.25% | ||||
Monthly installments of principal and interest | $ 34,354 | |||||
Interest rate adjustment over prime (in hundredths) | 1.00% | 1.00% | ||||
Real Estate Lien Note [Member] | Maximum [Member] | ||||||
Real Estate Lien Note [Abstract] | ||||||
Interest rate adjustment over prime (in hundredths) | 7.25% | 7.25% | ||||
Subsequent Event [Member] | ||||||
Credit Facility [Abstract] | ||||||
Current borrowing base | $ 115,000,000 | $ 120,000,000 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Numerator [Abstract] | ||||
Net (loss) income from continuing operations | $ (3,260) | $ (52,372) | $ (91,077) | $ (59,671) |
Net loss from discontinued operations | 0 | 0 | 0 | (20) |
Net (loss) income | $ (3,260) | $ (52,372) | $ (91,077) | $ (59,691) |
Denominator [Abstract] | ||||
Denominator for basic earnings per share – weighted-average common shares outstanding (shares) | 133,546,000 | 104,614,000 | 118,274,000 | 104,561,000 |
Effect of dilutive securities [Abstract] | ||||
Stock options, restricted shares and warrants (in shares) | 0 | 0 | 0 | 0 |
Dilutive potential common shares [Abstract] | ||||
Denominator for diluted earnings per share - adjusted weighted-average shares and assumed exercise of options, restricted shares and warrants (in shares) | 133,546,000 | 104,614,000 | 118,274,000 | 104,561,000 |
Earnings Per Share, Basic [Abstract] | ||||
Continuing operations (in dollars per share) | $ (0.02) | $ (0.50) | $ (0.77) | $ (0.57) |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 |
Total (in dollars per share) | (0.02) | (0.50) | (0.77) | (0.57) |
Earnings Per Share, Diluted [Abstract] | ||||
Continuing operations (in dollars per share) | (0.02) | (0.50) | (0.77) | (0.57) |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 |
Total (in dollars per share) | $ (0.02) | $ (0.50) | $ (0.77) | $ (0.57) |
Stock options excluded from the calculation of diluted income (loss) per share (in shares) | 1,766 | 1,724 |
Hedging Program and Derivativ26
Hedging Program and Derivatives (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Oct. 31, 2016bbl$ / bbl | Sep. 30, 2016USD ($)bbl$ / bbl | Dec. 31, 2015USD ($) | |
Impact of derivative contracts on balance sheet [Abstract] | |||
Derivative asset - current | $ 1,962 | $ 18,902 | |
Derivative asset - long-term | 914 | 8,463 | |
Derivative Assets | 2,876 | 27,365 | |
Derivative liability - current | 1,586 | 0 | |
Derivative liability - long-term | 3,638 | 0 | |
Derivative Liabilities | $ 5,224 | 0 | |
Oil - WTI [Member] | 2016 October - December | |||
Oil and Gas Delivery Commitments and Contracts [Line Items] | |||
Daily Volume | bbl | 2,500 | ||
Fixed price swap price | $ / bbl | 43.25 | ||
Oil - WTI [Member] | 2017 | |||
Oil and Gas Delivery Commitments and Contracts [Line Items] | |||
Daily Volume | bbl | 2,401 | ||
Fixed price swap price | $ / bbl | 54.53 | ||
Oil - WTI [Member] | 2017 | |||
Oil and Gas Delivery Commitments and Contracts [Line Items] | |||
Daily Volume | bbl | 1,796 | ||
Fixed price swap price | $ / bbl | 47.48 | ||
Derivative Asset - Current [Member] | Commodity Price Derivatives [Member] | |||
Impact of derivative contracts on balance sheet [Abstract] | |||
Derivative asset - current | $ 1,962 | 18,902 | |
Derivative Asset - Long-Term [Member] | Commodity Price Derivatives [Member] | |||
Impact of derivative contracts on balance sheet [Abstract] | |||
Derivative asset - long-term | 914 | 8,463 | |
Derivative Liability - Current [Member] | Commodity Price Derivatives [Member] | |||
Impact of derivative contracts on balance sheet [Abstract] | |||
Derivative liability - current | 1,586 | 0 | |
Derivative Liability - Long-Term [Member] | Commodity Price Derivatives [Member] | |||
Impact of derivative contracts on balance sheet [Abstract] | |||
Derivative liability - long-term | $ 3,638 | $ 0 | |
Subsequent Event [Member] | Oil - WTI [Member] | 2016 October - December | |||
Oil and Gas Delivery Commitments and Contracts [Line Items] | |||
Daily Volume | bbl | 1,197 | ||
Fixed price swap price | $ / bbl | 54.54 |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Assets [Abstract] | ||
NYMEX Fixed Price Derivative contracts | $ 2,876 | $ 27,365 |
Liabilities [Abstract] | ||
NYMEX Fixed Price Derivative contracts | 5,224 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Unobservable inputs at January 1, 2016 | 5,634 | |
Changes in market value | (2,151) | |
Settlements during the period | (3,483) | |
Unobservable inputs at September 30, 2016 | 0 | |
Recurring Basis [Member] | ||
Assets [Abstract] | ||
Total Assets | 2,876 | 27,365 |
Liabilities [Abstract] | ||
Total Liabilities | 5,224 | |
Recurring Basis [Member] | Fixed Price Derivative Contracts [Member] | ||
Assets [Abstract] | ||
NYMEX Fixed Price Derivative contracts | 2,876 | 21,731 |
Liabilities [Abstract] | ||
NYMEX Fixed Price Derivative contracts | 5,224 | |
Recurring Basis [Member] | Collars [Member] | ||
Assets [Abstract] | ||
NYMEX Fixed Price Derivative contracts | 5,634 | |
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets [Abstract] | ||
Total Assets | 0 | 0 |
Liabilities [Abstract] | ||
Total Liabilities | 0 | |
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fixed Price Derivative Contracts [Member] | ||
Assets [Abstract] | ||
NYMEX Fixed Price Derivative contracts | 0 | 0 |
Liabilities [Abstract] | ||
NYMEX Fixed Price Derivative contracts | 0 | |
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Collars [Member] | ||
Assets [Abstract] | ||
NYMEX Fixed Price Derivative contracts | 0 | |
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets [Abstract] | ||
Total Assets | 2,876 | 21,731 |
Liabilities [Abstract] | ||
Total Liabilities | 5,224 | |
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Fixed Price Derivative Contracts [Member] | ||
Assets [Abstract] | ||
NYMEX Fixed Price Derivative contracts | 2,876 | 21,731 |
Liabilities [Abstract] | ||
NYMEX Fixed Price Derivative contracts | 5,224 | |
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Collars [Member] | ||
Assets [Abstract] | ||
NYMEX Fixed Price Derivative contracts | 0 | |
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Assets [Abstract] | ||
Total Assets | 0 | 5,634 |
Liabilities [Abstract] | ||
Total Liabilities | 0 | |
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Fixed Price Derivative Contracts [Member] | ||
Assets [Abstract] | ||
NYMEX Fixed Price Derivative contracts | 0 | 0 |
Liabilities [Abstract] | ||
NYMEX Fixed Price Derivative contracts | $ 0 | |
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Collars [Member] | ||
Assets [Abstract] | ||
NYMEX Fixed Price Derivative contracts | $ 5,634 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 1 Months Ended | ||
Oct. 31, 2016 | Oct. 01, 2016 | Sep. 30, 2016 | |
Subsequent Event [Line Items] | |||
Current borrowing base | $ 130 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Current borrowing base | $ 115 | $ 120 | |
Decrease In borrowing base | $ 5 |