Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 28, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CALLON PETROLEUM CO | |
Entity Central Index Key | 928,022 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 201,061,366 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 35,273 | $ 652,993 |
Accounts receivable | 75,959 | 69,783 |
Fair value of derivatives | 3,093 | 103 |
Other current assets | 1,671 | 2,247 |
Total current assets | 115,996 | 725,126 |
Oil and natural gas properties, full-cost accounting method: | ||
Evaluated properties | 3,009,059 | 2,754,353 |
Less accumulated depreciation, depletion, amortization and impairment | (1,972,091) | (1,947,673) |
Net evaluated oil and natural gas properties | 1,036,968 | 806,680 |
Unevaluated property | 1,154,850 | 668,721 |
Total oil and natural gas properties | 2,191,818 | 1,475,401 |
Other property and equipment, net | 18,067 | 14,114 |
Restricted investments | 3,339 | 3,332 |
Deferred financing costs related to the senior secured revolving credit facility | 2,744 | 3,092 |
Fair value of derivatives | 2,939 | |
Acquisition deposit | 46,138 | |
Other assets, net | 676 | 384 |
Total assets | 2,335,579 | 2,267,587 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 131,252 | 95,577 |
Accrued interest | 12,114 | 6,057 |
Cash-settleable restricted stock unit awards | 4,025 | 8,919 |
Asset retirement obligations | 1,588 | 2,729 |
Fair value of derivatives | 6,430 | 18,268 |
Total current liabilities | 155,409 | 131,550 |
6.125% senior unsecured notes due 2024, net of unamortized deferred financing costs | 390,536 | 390,219 |
Asset retirement obligations | 4,652 | 3,932 |
Cash-settleable restricted stock unit awards | 4,108 | 8,071 |
Deferred tax liability | 556 | 90 |
Fair value of derivatives | 28 | |
Other long-term liabilities | 285 | 295 |
Total liabilities | 555,546 | 534,185 |
Commitments and Contingencies | ||
Stockholders' equity: | ||
Preferred stock, series A cumulative, $0.01 par value and $50.00 liquidation preference, 2,500,000 shares authorized: 1,458,948 and 1,458,948 shares outstanding, respectively | 15 | 15 |
Common stock, $0.01 par value, 300,000,000 and 300,000,000 shares authorized; 201,054,884 and 201,041,320 shares outstanding, respectively | 2,011 | 2,010 |
Capital in excess of par value | 2,173,243 | 2,171,514 |
Accumulated deficit | (395,236) | (440,137) |
Total stockholders' equity | 1,780,033 | 1,733,402 |
Total liabilities and stockholders' equity | $ 2,335,579 | $ 2,267,587 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares outstanding | 201,054,884 | 201,041,320 |
Series A Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, liquidation preference (in dollars per share) | $ 50 | $ 50 |
Preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Preferred stock, shares outstanding | 1,458,948 | 1,458,948 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Operating revenues: | ||
Total operating revenues | $ 81,363 | $ 30,698 |
Operating expenses: | ||
Lease operating expenses | 12,937 | 6,957 |
Production taxes | 5,904 | 2,220 |
Depreciation, depletion and amortization | 24,433 | 15,722 |
General and administrative | 5,206 | 5,562 |
Accretion expense | 184 | 180 |
Write-down of oil and natural gas properties | 34,776 | |
Acquisition expense | 450 | 48 |
Total operating expenses | 49,114 | 65,465 |
Income (loss) from operations | 32,249 | (34,767) |
Other (income) expenses: | ||
Interest expense, net of capitalized amounts | 665 | 5,491 |
(Gain) loss on derivative contracts | (15,303) | 932 |
Other income | (708) | (81) |
Total other (income) expense | (15,346) | 6,342 |
Income (loss) before income taxes | 47,595 | (41,109) |
Income tax expense | 466 | |
Net income (loss) | 47,129 | (41,109) |
Preferred stock dividends | (1,824) | (1,824) |
Income (loss) available to common stockholders | $ 45,305 | $ (42,933) |
Income (loss) per common share: | ||
Basic | $ 0.23 | $ (0.51) |
Diluted | $ 0.22 | $ (0.51) |
Shares used in computing income (loss) per common share: | ||
Basic | 201,054 | 83,582 |
Diluted | 201,740 | 83,582 |
Crude Oil [Member] | ||
Operating revenues: | ||
Total operating revenues | $ 72,008 | $ 27,443 |
Natural Gas And Natural Gas Liquids [Member] | ||
Operating revenues: | ||
Total operating revenues | $ 9,355 | $ 3,255 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 47,129 | $ (41,109) |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation, depletion and amortization | 24,932 | 16,129 |
Write-down of oil and natural gas properties | 34,776 | |
Accretion expense | 184 | 180 |
Amortization of non-cash debt related items | 665 | 781 |
Deferred income tax expense | 466 | |
Net (gain) loss on derivatives, net of settlements | (17,794) | 8,648 |
Non-cash expense related to equity share-based awards | 930 | 516 |
Change in the fair value of liability share-based awards | (291) | 709 |
Payments to settle asset retirement obligations | (765) | (161) |
Changes in current assets and liabilities: | ||
Accounts receivable | (4,066) | 5,941 |
Other current assets | 576 | 580 |
Current liabilities | 9,903 | (717) |
Change in other long-term liabilities | 11 | |
Change in other assets, net | (523) | (233) |
Payments to settle vested liability share-based awards | (8,662) | (9,807) |
Net cash provided by operating activities | 52,684 | 16,244 |
Cash flows from investing activities: | ||
Capital expenditures | (66,154) | (50,775) |
Acquisitions | (648,485) | (10,183) |
Acquisition deposit | 46,138 | |
Net cash used in investing activities | (668,501) | (60,958) |
Cash flows from financing activities: | ||
Borrowings on senior secured revolving credit facility | 45,000 | |
Payments on senior secured revolving credit facility | (85,000) | |
Issuance of common stock | 94,949 | |
Payment of preferred stock dividends | (1,824) | (1,824) |
Tax withholdings related to restricted stock units | (79) | (124) |
Net cash provided by (used in) financing activities | (1,903) | 53,001 |
Net change in cash and cash equivalents | (617,720) | 8,287 |
Balance, beginning of period | 652,993 | 1,224 |
Balance, end of period | $ 35,273 | $ 9,511 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Description of Business and Basis of Presentation [Abstract] | |
Description of Business and Basis of Presentation | Note 1 - Description of Business and Basis of Presentation Description of business Callon Petroleum Company is an independent oil and natural gas company established in 1950. The Company was incorporated under the laws of the state of Delaware in 1994 and succeeded to the business of a publicly traded limited partnership, a joint venture with a consortium of European investors and an independent energy company partially owned by a member of current management. As used herein, the “Company,” “Callon,” “we,” “us,” and “our” refer to Callon Petroleum Company and its predecessors and subsidiaries unless the context requires otherwise. Callon is focused on the acquisition, development, exploration and exploitation of unconventional onshore, oil and natural gas reserves in the Permian Basin in West Texas. The Company’s operations to date have been predominantly focused on horizontal drilling of several prospective intervals, including multiple levels of the Wolfcamp formation and, more recently, the Lower Spraberry shale in the Midland Basin. Callon has assembled a multi-year inventory of potential horizontal well locations and intends to add to this inventory through delineation drilling of emerging zones on its existing acreage and acquisition of additional locations through working interest acquisitions, acreage purchases, joint ventures and asset swaps. Basis of presentation Unless otherwise indicated, all dollar amounts included within the Footnotes to the Financial Statements are presented in thousands, except for per share and per unit data. The interim consolidated financial statements of the Company have been prepared in accordance with (1) GAAP, (2) the SEC’s instructions to Quarterly Report on Form 10-Q and (3) Rule 10-01 of Regulation S-X, and include the accounts of Callon Petroleum Company, and its subsidiary, Callon Petroleum Operating Company (“CPOC”). CPOC also has subsidiaries, namely Callon Offshore Production, Inc. and Mississippi Marketing, Inc. These interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The balance sheet at December 31, 2016 has been derived from the audited financial statements at that date. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ended December 31, 2017 . In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, including normal recurring adjustments and all intercompany account and transaction eliminations, necessary to present fairly the Company’s financial position, the results of its operations and its cash flows for the periods indicated. Certain prior year amounts may have been reclassified to conform to current year presentation. Recently adopted accounting policies In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The standard is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows, and will allow companies to estimate the number of stock awards expected to vest. The guidance in ASU 2016-09 is effective for public entities for annual reporting periods beginning after December 15, 2016, including interim periods therein. As of March 31, 2017, the Company adopted this ASU, which did not have a material impact on its financial statements. The Company has elected to no longer estimate forfeitures. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2017 | |
Acquisitions [Abstract] | |
Acquisitions | Note 2 - Acquisitions Acquisitions were accounted for under the acquisition method of accounting, which involves determining the fair value of the assets acquired and liabilities assumed under the income approach. 2017 acquisitions On February 13, 2017, the Company completed the acquisition of 29,175 gross ( 16,688 net) acres in the Delaware Basin, primarily located in Ward and Pecos Counties, Texas from American Resource Development, LLC, for total cash consideration of $632,947 , excluding customary purchase price adjustments (the “Ameredev Transaction”). The Company funded the cash purchase price with the net proceeds of an equity offering (see Note 9 for additional information regarding the equity offering). The Company acquired an 82% average working interest in the properties acquired in the Ameredev Transaction. In December 2016, in connection with the execution of the purchase and sale agreement for the Ameredev Transaction, the Company paid a deposit in the amount of $46,138 to a third party escrow agent, which was recorded as Acquisition deposit on the balance sheet as of December 31, 2016. The following table summarizes the estimated acquisition date fair values of the acquisition: Evaluated oil and natural gas properties $ 134,315 Unevaluated oil and natural gas properties 498,800 Asset retirement obligations (168) Net assets acquired $ 632,947 The preliminary purchase price allocation is subject to change based on numerous factors, including the final adjusted purchase price and the final estimated fair value of the assets acquired and liabilities assumed. Any such adjustments to the preliminary estimates of fair value could be material. 2016 acquisitions On October 20, 2016 , the Company completed the acquisition of 6,904 gross ( 5,952 net) acres in the Midland Basin, primarily located in Howard County, Texas from Plymouth Petroleum, LLC and additional sellers that exercised their “tag-along” sales rights, for total cash consideration of $339,687 , excluding customary purchase price adjustments (the “Plymouth Transaction”). The Company funded the cash purchase price with the net proceeds of an equity offering (see Note 9 for additional information regarding the equity offering). The Company acquired an 82% average working interest ( 62% average net revenue interest) in the properties acquired in the Plymouth Transaction. On May 26, 2016 , the Company completed the acquisition of 17,298 gross ( 14,089 net) acres in the Midland Basin, primarily located in Howard County, Texas from BSM Energy LP, Crux Energy LP and Zaniah Energy LP, for total cash consideration of $220,000 and 9,333,333 shares of common stock (at an assumed offering price of $11.74 per share, which is the last reported sale price of our common stock on the New York Stock Exchange on that date) for a total purchase price of $329,573 , excluding customary purchase price adjustments (the “Big Star Transaction”). The Company acquired an 81% average working interest ( 61% average net revenue interest) in the properties acquired in the Big Star Transaction. Unaudited pro forma financial statements The following unaudited summary pro forma financial information for the periods presented is for illustrative purposes only and does not purport to represent what the Company’s results of operations would have been if the Ameredev Transaction, Plymouth Transaction and Big Star Transaction had occurred as presented, or to project the Company’s results of operations for any future periods: Three Months Ended March 31, 2017 (a) 2016 (a) Revenues $ 84,416 $ 42,615 Income (loss) from operations 34,907 (35,451) Income (loss) available to common stockholders 47,963 (38,908) Net income (loss) per common share: Basic $ 0.24 $ (0.31) Diluted $ 0.24 $ (0.31) (a) The pro forma financial information was prepared assuming the Ameredev Transaction occurred as of January 1, 2016 and the Plymouth Transaction and Big Star Transaction occurred as of January 1, 2015. The pro forma adjustments are based on available information and certain assumptions that management believes are reasonable, including revenue, lease operating expenses, production taxes, depreciation, depletion and amortization expense, accretion expense, interest expense and capitalized interest. The properties associated with the Ameredev Transaction, Plymouth Transaction and Big Star Transaction have been comingled with our existing properties and it is impractical to provide the stand-alone operational results related to these properties. Subsequent event In April 2017, the Company entered into an agreement to acquire 7,031 gross ( 2,488 net) acres in the Delaware Basin, located near the acreage acquired in the Ameredev Transaction discussed above, for total cash consideration of $52,500 , excluding customary purchase price adjustments. The Company plans to fund the cash purchase price with its available cash and borrowings on our senior secured revolving credit f acility. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 3 - Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: (share amounts in thousands) Three Months Ended March 31, 2017 2016 Net income (loss) $ 47,129 $ (41,109) Preferred stock dividends (1,824) (1,824) Income (loss) available to common stockholders $ 45,305 $ (42,933) Weighted average shares outstanding 201,054 83,582 Dilutive impact of restricted stock 686 — Weighted average shares outstanding for diluted income (loss) per share 201,740 83,582 Basic income (loss) per share $ 0.23 $ (0.51) Diluted income (loss) per share $ 0.22 $ (0.51) Stock options (a) 15 15 Restricted stock (a) — 25 (a) Shares excluded from the diluted earnings per share calculation because their effect would be anti-dilutive . |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2017 | |
Borrowings [Abstract] | |
Borrowings | Note 4 - Borrowings The Company’s borrowings consisted of the following at: March 31, 2017 December 31, 2016 Principal components: Senior secured revolving credit facility $ — $ — 6.125% senior unsecured notes due 2024 400,000 400,000 Total principal outstanding 400,000 400,000 6.125% senior unsecured notes due 2024, unamortized deferred financing costs (9,464) (9,781) Total carrying value of borrowings $ 390,536 $ 390,219 Senior secured revolving credit facility (the “Credit Facility”) On March 11, 2014, the Company entered into the Fifth Amended and Restated Credit Agreement to the Credit Facility with a maturity date of March 11, 2019 . JPMorgan Chase Bank, N.A. is Administrative Agent, and participants include several institutional lenders. The total notional amount available under the Credit Facility is $500,000 . Amounts borrowed under the Credit Facility may not exceed the borrowing base, which is generally reviewed on a semi-annual basis. The Credit Facility is secured by first preferred mortgages covering the Company’s major producing properties. Effective November 21, 2016, the Company achieved an indication to increase the Credit Facility’s borrowing base to $500,000, but elected to maintain the borrowing base at $385,000. As of March 31, 2017 , the Company continued to maintain the Credit Facility’s borrowing base at $385,000 . As of March 31, 2017 , there was no balance outstanding on the Credit Facility. For the quarter ended March 31, 2017 , the Credit Facility had a weighted-average interest rate of 2 . 83% , calculated as the LIBOR plus a tiered rate ranging from 2.00% to 3.00% , which is determined based on utilization of the facility. In addition, the Credit Facility carries a commitment fee of 0.5% per annum, payable quarterly, on the unused portion of the borrowing base. 6.125% senior notes due 2024 (“6.125% Senior Notes”) On October 3, 2016, the Company issued $400,000 aggregate principal amount of 6.125% Senior Notes with a maturity date of October 1, 2024 and interest payable semi-annually beginning on April 1, 2017 . The net proceeds of the offering, after deducting initial purchasers’ discounts and estimated offering expenses, were approximately $391,270 . The 6.125% Senior Notes are guaranteed on a senior unsecured basis by the Company’s wholly-owned subsidiary, Callon Petroleum Operating Company, and may be guaranteed by certain future subsidiaries. The subsidiary guarantor is 100% owned, all of the guarantees are full and unconditional and joint and several, the parent company has no independent assets or operations and any subsidiaries of the parent company other than the subsidiary guarantor are minor. The Company may redeem the 6.125% Senior Notes in accordance with the following terms; (1) prior to October 1, 2019, a redemption of up to 35% of the principal in an amount not greater than the net proceeds from certain equity offerings, and within 180 days of the closing date of such equity offerings, at a redemption price of 106.125% of principal, plus accrued and unpaid interest, if any, to the date of the redemption, if at least 65% of the principal will remain outstanding after such redemption; (2) prior to October 1, 2019, a redemption of all or part of the principal at a price of 100% of principal of the amount redeemed, plus an applicable make-whole premium and accrued and unpaid interest, if any, to the date of the redemption; (3) a redemption, in whole or in part, at a redemption price, plus accrued and unpaid interest, if any, to the date of the redemption, (i) of 104.594% of principal if the redemption occurs on or after October 1, 2019, but before October 1, 2020, and (ii) of 103.063% of principal if the redemption occurs on or after October 1, 2020, but before October 1, 2021, and (iii) of 101.531% of principal if the redemption occurs on or after October 1, 2021, but before October 1, 2022, and (iv) of 100% of principal if the redemption occurs on or after October 1, 2022. Following a change of control, each holder of the 6.125% Senior Notes may require the Company to repurchase all or a portion of the 6.125% Senior Notes at a price of 101% of principal of the amount repurchased, plus accrued and unpaid interest, if any, to the date of repurchase. Restrictive covenants The Company’s Credit Facility and the indenture governing our 6.125% Senior Notes contain various covenants including restrictions on additional indebtedness, payment of cash dividends and maintenance of certain financial ratios. The Company was in compliance with these covenants at March 31, 2017 . |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities [Abstract] | |
Derivative Instruments and Hedging Activities | Note 5 - Derivative Instruments and Hedging Activities Objectives and strategies for using derivative instruments The Company is exposed to fluctuations in oil and natural gas prices received for its production. Consequently, the Company believes it is prudent to manage the variability in cash flows on a portion of its oil and natural gas production. The Company utilizes a mix of collars, swaps, put and call options and similar derivative financial instruments to manage fluctuations in cash flows resulting from changes in commodity prices. The Company does not use these instruments for speculative or trading purposes. Counterparty risk and offsetting The use of derivative instruments exposes the Company to the risk that a counterparty will be unable to meet its commitments. While the Company monitors counterparty creditworthiness on an ongoing basis, it cannot predict sudden changes in counterparties’ creditworthiness. In addition, even if such changes are not sudden, the Company may be limited in its ability to mitigate an increase in counterparty credit risk. Should one of these counterparties not perform, the Company may not realize the benefit of some of its derivative instruments under lower commodity prices while continuing to be obligated under higher commodity price contracts subject to any right of offset under the agreements. Counterparty credit risk is considered when determining the fair value of a derivative instrument; see Note 6 for additional information regarding fair value. The Company executes commodity derivative contracts under master agreements with netting provisions that provide for offsetting assets against liabilities. In general, if a party to a derivative transaction incurs an event of default, as defined in the applicable agreement, the other party will have the right to demand the posting of collateral, demand a cash payment transfer or terminate the arrangement. Financial statement presentation and settlements Settlements of the Company’s derivative instruments are based on the difference between the contract price or prices specified in the derivative instrument and a benchmark price, such as the NYMEX price. To determine the fair value of the Company’s derivative instruments, the Company utilizes present value methods that include assumptions about commodity prices based on those observed in underlying markets. See Note 6 for additional information regarding fair value. Deri vatives not designated as hedging instruments The C ompany records its derivative contracts at fair value in the consolidated balance sheets and records changes in fair value as a gain or loss on derivative contracts in the consolidated statements of operations. Cash settlements are also recorded as gain or loss on derivative contracts in the consolidated statements of operations. The following table reflects the fair value of the Company’s derivative instruments for the periods presented: Balance Sheet Presentation Asset Fair Value Liability Fair Value Net Derivative Fair Value Commodity Classification Line Description 03/31/2017 12/31/2016 03/31/2017 12/31/2016 03/31/2017 12/31/2016 Natural gas Current Fair value of derivatives $ — $ — $ (64) $ (593) $ (64) $ (593) Oil Current Fair value of derivatives 3,093 103 (6,366) (17,675) (3,273) (17,572) Oil Non-current Fair value of derivatives 2,939 — — (28) 2,939 (28) Totals $ 6,032 $ 103 $ (6,430) $ (18,296) $ (398) $ (18,193) As previously discussed, the Company’s derivative contracts are subject to master netting arrangements. The Company’s policy is to present the fair value of derivative contracts on a net basis in the consolidated balance sheet. The following presents the impact of this presentation to the Company’s recognized assets and liabilities for the periods indicated: March 31, 2017 Presented without As Presented with Effects of Netting Effects of Netting Effects of Netting Current assets: Fair value of derivatives $ 5,055 $ (1,962) $ 3,093 Long-term assets: Fair value of derivatives 2,939 — 2,939 Current liabilities: Fair value of derivatives $ (8,392) $ 1,962 $ (6,430) December 31, 2016 Presented without As Presented with Effects of Netting Effects of Netting Effects of Netting Current assets: Fair value of derivatives $ 1,836 $ (1,733) $ 103 Current liabilities: Fair value of derivatives $ (20,001) $ 1,733 $ (18,268) Long-term liabilities: Fair value of derivatives (28) — (28) For the periods indicated, the Company recorded the following related to its derivatives in the consolidated statement of operations as gain or loss on derivative contracts: Three Months Ended March 31, 2017 2016 Oil derivatives Net gain (loss) on settlements $ (2,524) $ 7,507 Net gain (loss) on fair value adjustments 17,266 (9,137) Total gain (loss) on oil derivatives $ 14,742 $ (1,630) Natural gas derivatives Net gain on settlements $ 33 $ 209 Net gain on fair value adjustments 528 489 Total gain on natural gas derivatives $ 561 $ 698 Total gain (loss) on oil & natural gas derivatives $ 15,303 $ (932) Derivative positions Listed in the tables below are the outstanding oil and natural gas derivative contracts as of March 31, 2017 : For the Remainder of For the Full Year of Oil contracts 2017 2018 Swap contracts combined with short puts (WTI, enhanced swaps) Total volume (MBbls) 550 — Weighted average price per Bbl Swap $ 44.50 $ — Short put option $ 30.00 $ — Deferred premium put option Total volume (MBbls) 250 — Premium per Bbl $ 2.05 $ — Weighted average price per Bbl Long put option $ 50.00 $ — Deferred premium put spread option Total volume (MBbls) 506 — Premium per Bbl $ 2.45 $ — Weighted average price per Bbl Long put option $ 50.00 $ — Short put option $ 40.00 $ — Collar contracts (WTI, two-way collars) Total volume (MBbls) 1,018 — Weighted average price per Bbl Ceiling (short call) $ 58.19 $ — Floor (long put) $ 47.50 $ — Call option contracts (short position) Total volume (MBbls) 505 — Weighted average price per Bbl Call strike price $ 50.00 $ — Swap contracts (Midland basis differential) Volume (MBbls) 1,650 2,008 Weighted average price per Bbl $ (0.52) $ (1.02) Collar contracts combined with short puts (WTI, three-way collars) Total volume (MBbls) — 2,738 Weighted average price per Bbl Ceiling (short call option) $ — $ 62.84 Floor (long put option) $ — $ 50.00 Short put option $ — $ 40.00 For the Remainder of For the Full Year of Natural gas contracts 2017 2018 Collar contracts combined with short puts (Henry Hub, three-way collars) Total volume (BBtu) 1,100 — Weighted average price per MMBtu Ceiling (short call option) $ 3.71 $ — Floor (long put option) $ 3.00 $ — Short put option $ 2.50 $ — Collar contracts (Henry Hub, two-way collars) Total volume (BBtu) 1,100 — Weighted average price per MMBtu Ceiling (short call option) $ 3.68 $ — Floor (long put option) $ 3.00 $ — Subsequent event The following derivative contracts were executed subsequent to March 31, 2017 : For the Remainder of For the Full Year of Gas contracts 2017 2018 Collar contracts (Henry Hub, two-way collars) Total volume (BBtu) 488 720 Weighted average price per MMBtu Ceiling (short call option) $ 3.84 $ 3.84 Floor (long put option) $ 3.40 $ 3.40 Swap contracts Total volume (BBtu) 736 — Weighted average price per MMBtu $ 3.39 $ — |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 6 - Fair Value Measurements The fair value hierarchy included in GAAP gives the highest priority to Level 1 inputs, which consist of unadjusted quoted prices for identical instruments in active markets. Level 2 inputs consist of quoted prices for similar instruments. Level 3 valuations are derived from inputs that are significant and unobservable, and these valuations have the lowest priority. Fair value of financial instruments Cash, cash equivalents, and restricted investments. The carrying amounts for these instruments approximated fair value due to the short-term nature or maturity of the instruments. Debt. The carrying amount of the Company’s floating-rate debt approximated fair value because the interest rates were variable and reflective of market rates. March 31, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value Credit Facility (a) $ — $ — $ — $ — 6.125% Senior Notes (b) 390,536 416,000 390,219 412,000 Total $ 390,536 $ 416,000 $ 390,219 $ 412,000 (a) Floating-rate debt. (b) The fair value was based upon Level 2 inputs. See Note 4 for additional information about the Company’s 6.125% Senior Notes . Assets and liabilities measured at fair value on a recurring basis Certain assets and liabilities are reported at fair value on a recurring basis in the consolidated balance sheet. The following methods and assumptions were used to estimate fair value: Commodity derivative instruments. The fair value of commodity derivative instruments is derived using an income approach valuation model that utilizes market-corroborated inputs that are observable over the term of the derivative contract. The Company’s fair value calculations also incorporate an estimate of the counterparties’ default risk for derivative assets and an estimate of the Company’s default risk for derivative liabilities. The Company believes that the majority of the inputs used to calculate the commodity derivative instruments fall within Level 2 of the fair value hierarchy based on the wide availability of quoted market prices for similar commodity derivative contracts. See Note 5 for additional information regarding the Company’s derivative instruments. The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis : March 31, 2017 Classification Level 1 Level 2 Level 3 Total Assets Derivative financial instruments Fair value of derivatives $ — $ 6,032 $ — $ 6,032 Liabilities Derivative financial instruments Fair value of derivatives — (6,430) — (6,430) Total net liabilities $ — $ (398) $ — $ (398) December 31, 2016 Classification Level 1 Level 2 Level 3 Total Assets Derivative financial instruments Fair value of derivatives $ — $ 103 $ — $ 103 Liabilities Derivative financial instruments Fair value of derivatives — (18,296) — (18,296) Total net liabilities $ — $ (18,193) $ — $ (18,193) Assets and l iabilities measured at fair value on a nonrecurring basis Acquisitions. The Company determines the fair value of the assets acquired and liabilities assumed using the income approach based on expected discounted future cash flows from estimated reserve quantities, costs to produce and develop reserves, and oil and natural gas forward prices. The future net revenues are discounted using a weighted average cost of capital. The discounted future net revenues of proved undeveloped and probable reserves are reduced by an additional reserve adjustment factor to compensate for the inherent risk of estimating the value of unevaluated properties. The fair value measurements were based on Level 2 and Level 3 inputs. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | Note 7 - Income Taxes The Company typically provides for income taxes at a statutory rate of 35 % adjusted for permanent differences expected to be realized, which primarily relate to non-deductible executive compensation expenses and state income taxes. As a result of the write-down of oil and natural gas properties in the latter part of 2015 and the first half of 2016, the Company has incurred a cumulative three year loss. Because of the impact the cumulative loss has on the determination of the recoverability of deferred tax assets through future earnings, the Company assessed the ability to realize its deferred tax assets based on the future reversals of existing deferred tax liabilities. Accordingly, the Company established a full valuation allowance for all of the deferred tax asset. The valuation allowance was $127,073 as of March 31, 2017 . The Company adopted a new accounting standard that simplified the accounting for stock-based compensation. As a result, the Company recorded a cumulative-effect adjustment to retained earnings as of January 1, 2017 for all windfall tax benefits that were not previously recognized because the related tax deduction had not reduced current taxes payable. Due to the Company's valuation allowance position, a cumulative-effect adjustment was recorded to retained earnings as of January 1, 2017, and therefore, the net effect of this new accounting standard was zero. See Note 1 for additional information about this new accounting standard. |
Asset Retirement Obligations
Asset Retirement Obligations | 3 Months Ended |
Mar. 31, 2017 | |
Asset Retirement Obligations [Abstract] | |
Asset Retirement Obligations | Note 8 - Asset Retirement Obligations The table below summarizes the activity for the Company’s asset retirement obligations: For the Three Months Ended March 31, 2017 Asset retirement obligations at January 1, 2017 $ 6,661 Accretion expense 184 Liabilities incurred 195 Liabilities settled (88) Revisions to estimate (712) Asset retirement obligations at end of period 6,240 Less: Current asset retirement obligations (1,588) Long-term asset retirement obligations at March 31, 2017 $ 4,652 Certain of the Company’s operating agreements require that assets be restricted for abandonment obligations. Amounts recorded in the Consolidated Balance Sheets at March 31, 2017 as long-term restricted investments were $3,339 . These assets, which primarily include short-term U.S. Government securities, are held in abandonment trusts dedicated to pay future abandonment costs for several of the Company’s oil and natural gas properties. |
Equity Transactions
Equity Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Equity Transactions [Abstract] | |
Equity Transactions | Note 9 - Equity Transactions 10% Series A Cumulative Preferred Stock (“Preferred Stock”) Holders of the Company’s Preferred Stock are entitled to receive, when, as and if declared by our Board of Directors, out of funds legally available for the payment of dividends, cumulative cash dividends at a rate of 10.0% per annum of the $50.00 liquidation preference per share (equivalent to $5.00 per annum per share). Dividends are payable quarterly in arrears on the last day of each March, June, September and December when, as and if declared by our Board of Directors. Preferred Stock dividends were $1,824 for the three months ended March 31, 2017 and 2016 . The Preferred Stock has no stated maturity and is not subject to any sinking fund or other mandatory redemption. On or after May 30, 2018, the Company may, at its option, redeem the Preferred Stock, in whole or in part, by paying $50.00 per share, plus any accrued and unpaid dividends to the redemption date. Following a change of control in which the Company or the acquirer no longer have a class of common securities listed on a national exchange, the Company will have the option to redeem the Preferred Stock, in whole but not in part for $50.00 per share in cash, plus accrued and unpaid dividends (whether or not declared), to the redemption date. If the Company does not exercise its option to redeem the Preferred Stock upon such change of control, the holders of the Preferred Stock have the option to convert the Preferred Stock into a number of shares of the Company’s common stock based on the value of the common stock on the date of the change of control as determined under the certificate of designations for the Preferred Stock. If the change of control occurred on March 31, 2017 , and the Company did not exercise its right to redeem the Preferred Stock, using the closing price of $ 13.16 as the value of a share of common stock, each share of Preferred Stock would be convertible into approximately 3.8 shares of common stock. If the Company exercises its redemption rights relating to shares of Preferred Stock, the holders of Preferred Stock will not have the conversion right described above. On February 4, 2016, the Company exchanged a total of 120,000 shares of Preferred Stock for 719,000 shares of common stock. As of March 31, 2017 , the Company had 1,458,948 shares of its Preferred Stock issued and outstanding. Common stock On December 19, 2016, the Company completed an underwritten public offering of 40,000,000 shares of its common stock for total estimated net proceeds (after the underwriter’s discounts and estimated offering expenses) of approximately $634,917 . Proceeds from the offering were used to substantially fund the Ameredev Transaction, described in Note 2 . On September 6, 2016, the Company completed an underwritten public offering of 29,900,000 shares of its common stock for total estimated net proceeds (after the underwriter’s discounts and estimated offering expenses) of approximately $421,864 . Proceeds from the offering were used to substantially fund the Plymouth Transaction, described in Note 2 . On May 26, 2016, the Company issued 9,333,333 shares of common stock to partially fund the Big Star Transaction, described in Note 2 , at an assumed offering price of $11.74 per share, which is the last reported sale price of our common stock on the New York Stock Exchange on that date. On April 25, 2016, the Company completed an underwritten public offering of 25,300,000 shares of its common stock for total net proceeds (after the underwriter’s discounts and commissions and estimated offering expenses) of approximately $205,869 . Proceeds from the offering were used to fund the Big Star Transaction, described in Note 2 , and other working interest acquisitions. On March 9, 2016, the Company completed an underwritten public offering of 15,250,000 shares of its common stock for total net proceeds (after the underwriting discounts and estimated offering costs) of approximately $94,948 . Proceeds from the offering were used to pay down the balance on the Company’s Credit Facility and for general corporate purposes. |
Other
Other | 3 Months Ended |
Mar. 31, 2017 | |
Other [Abstract] | |
Other | Note 10 - Other Operating leases As of March 31, 2017 , the Company had contracts for three horizontal drilling rigs (the “Cactus 1 Rig”, “Cactus 2 Rig” and “Cactus 3 Rig”). The contract terms, as amended through December 31, 2016, of the Cactus 1 Rig and Cactus 2 Rig will end in July 2018 and August 2018, respectively. The contract terms of the Cactus 3 Rig, that commenced drilling in mid-January 2017, will end in July 2017. The rig lease agreements include early termination provisions that obligate the Company to pay reduced minimum rentals for the remaining term of the agreement. These payments would be reduced assuming the lessor is able to re-charter the rig and staffing personnel to another lessee. Subsequent event In April 2017 the Company entered into a contract for a fourth horizontal drilling rig. The contract term will begin July 2017 through July 2019 with a day rate of $18,000 per day. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Unaudited Summary Pro Forma Financial Information | Three Months Ended March 31, 2017 (a) 2016 (a) Revenues $ 84,416 $ 42,615 Income (loss) from operations 34,907 (35,451) Income (loss) available to common stockholders 47,963 (38,908) Net income (loss) per common share: Basic $ 0.24 $ (0.31) Diluted $ 0.24 $ (0.31) (a) The pro forma financial information was prepared assuming the Ameredev Transaction occurred as of January 1, 2016 and the Plymouth Transaction and Big Star Transaction occurred as of January 1, 2015. |
Delaware Basin in Ward and Pecos Counties, Texas [Member] | Ameredev Transaction [Member] | |
Fair Value of Net Assets Acquired | Evaluated oil and natural gas properties $ 134,315 Unevaluated oil and natural gas properties 498,800 Asset retirement obligations (168) Net assets acquired $ 632,947 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | (share amounts in thousands) Three Months Ended March 31, 2017 2016 Net income (loss) $ 47,129 $ (41,109) Preferred stock dividends (1,824) (1,824) Income (loss) available to common stockholders $ 45,305 $ (42,933) Weighted average shares outstanding 201,054 83,582 Dilutive impact of restricted stock 686 — Weighted average shares outstanding for diluted income (loss) per share 201,740 83,582 Basic income (loss) per share $ 0.23 $ (0.51) Diluted income (loss) per share $ 0.22 $ (0.51) Stock options (a) 15 15 Restricted stock (a) — 25 Shares excluded from the diluted earnings per share calculation because their effect would be anti-dilutive . |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Borrowings [Abstract] | |
Schedule of Borrowings | March 31, 2017 December 31, 2016 Principal components: Senior secured revolving credit facility $ — $ — 6.125% senior unsecured notes due 2024 400,000 400,000 Total principal outstanding 400,000 400,000 6.125% senior unsecured notes due 2024, unamortized deferred financing costs (9,464) (9,781) Total carrying value of borrowings $ 390,536 $ 390,219 |
Derivative Instruments and He19
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities [Abstract] | |
Fair Value of Derivative Instruments | Balance Sheet Presentation Asset Fair Value Liability Fair Value Net Derivative Fair Value Commodity Classification Line Description 03/31/2017 12/31/2016 03/31/2017 12/31/2016 03/31/2017 12/31/2016 Natural gas Current Fair value of derivatives $ — $ — $ (64) $ (593) $ (64) $ (593) Oil Current Fair value of derivatives 3,093 103 (6,366) (17,675) (3,273) (17,572) Oil Non-current Fair value of derivatives 2,939 — — (28) 2,939 (28) Totals $ 6,032 $ 103 $ (6,430) $ (18,296) $ (398) $ (18,193) |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | March 31, 2017 Presented without As Presented with Effects of Netting Effects of Netting Effects of Netting Current assets: Fair value of derivatives $ 5,055 $ (1,962) $ 3,093 Long-term assets: Fair value of derivatives 2,939 — 2,939 Current liabilities: Fair value of derivatives $ (8,392) $ 1,962 $ (6,430) December 31, 2016 Presented without As Presented with Effects of Netting Effects of Netting Effects of Netting Current assets: Fair value of derivatives $ 1,836 $ (1,733) $ 103 Current liabilities: Fair value of derivatives $ (20,001) $ 1,733 $ (18,268) Long-term liabilities: Fair value of derivatives (28) — (28) |
Schedule of Gain or Loss on Derivative Contracts | Three Months Ended March 31, 2017 2016 Oil derivatives Net gain (loss) on settlements $ (2,524) $ 7,507 Net gain (loss) on fair value adjustments 17,266 (9,137) Total gain (loss) on oil derivatives $ 14,742 $ (1,630) Natural gas derivatives Net gain on settlements $ 33 $ 209 Net gain on fair value adjustments 528 489 Total gain on natural gas derivatives $ 561 $ 698 Total gain (loss) on oil & natural gas derivatives $ 15,303 $ (932) |
Schedule of Outstanding Oil and Natural Gas Derivative Contracts | For the Remainder of For the Full Year of Oil contracts 2017 2018 Swap contracts combined with short puts (WTI, enhanced swaps) Total volume (MBbls) 550 — Weighted average price per Bbl Swap $ 44.50 $ — Short put option $ 30.00 $ — Deferred premium put option Total volume (MBbls) 250 — Premium per Bbl $ 2.05 $ — Weighted average price per Bbl Long put option $ 50.00 $ — Deferred premium put spread option Total volume (MBbls) 506 — Premium per Bbl $ 2.45 $ — Weighted average price per Bbl Long put option $ 50.00 $ — Short put option $ 40.00 $ — Collar contracts (WTI, two-way collars) Total volume (MBbls) 1,018 — Weighted average price per Bbl Ceiling (short call) $ 58.19 $ — Floor (long put) $ 47.50 $ — Call option contracts (short position) Total volume (MBbls) 505 — Weighted average price per Bbl Call strike price $ 50.00 $ — Swap contracts (Midland basis differential) Volume (MBbls) 1,650 2,008 Weighted average price per Bbl $ (0.52) $ (1.02) Collar contracts combined with short puts (WTI, three-way collars) Total volume (MBbls) — 2,738 Weighted average price per Bbl Ceiling (short call option) $ — $ 62.84 Floor (long put option) $ — $ 50.00 Short put option $ — $ 40.00 For the Remainder of For the Full Year of Natural gas contracts 2017 2018 Collar contracts combined with short puts (Henry Hub, three-way collars) Total volume (BBtu) 1,100 — Weighted average price per MMBtu Ceiling (short call option) $ 3.71 $ — Floor (long put option) $ 3.00 $ — Short put option $ 2.50 $ — Collar contracts (Henry Hub, two-way collars) Total volume (BBtu) 1,100 — Weighted average price per MMBtu Ceiling (short call option) $ 3.68 $ — Floor (long put option) $ 3.00 $ — Subsequent event The following derivative contracts were executed subsequent to March 31, 2017 : For the Remainder of For the Full Year of Gas contracts 2017 2018 Collar contracts (Henry Hub, two-way collars) Total volume (BBtu) 488 720 Weighted average price per MMBtu Ceiling (short call option) $ 3.84 $ 3.84 Floor (long put option) $ 3.40 $ 3.40 Swap contracts Total volume (BBtu) 736 — Weighted average price per MMBtu $ 3.39 $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements [Abstract] | |
Summary of Financial Instruments at Carrying and Fair Value | March 31, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value Credit Facility (a) $ — $ — $ — $ — 6.125% Senior Notes (b) 390,536 416,000 390,219 412,000 Total $ 390,536 $ 416,000 $ 390,219 $ 412,000 (a) Floating-rate debt. (b) The fair value was based upon Level 2 inputs. See Note 4 for additional information about the Company’s 6.125% Senior Notes . |
Fair Value of Assets and Liabilities Measured on Recurring Basis | March 31, 2017 Classification Level 1 Level 2 Level 3 Total Assets Derivative financial instruments Fair value of derivatives $ — $ 6,032 $ — $ 6,032 Liabilities Derivative financial instruments Fair value of derivatives — (6,430) — (6,430) Total net liabilities $ — $ (398) $ — $ (398) December 31, 2016 Classification Level 1 Level 2 Level 3 Total Assets Derivative financial instruments Fair value of derivatives $ — $ 103 $ — $ 103 Liabilities Derivative financial instruments Fair value of derivatives — (18,296) — (18,296) Total net liabilities $ — $ (18,193) $ — $ (18,193) |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Asset Retirement Obligations [Abstract] | |
Summary of Activity of Asset Retirement Obligations | For the Three Months Ended March 31, 2017 Asset retirement obligations at January 1, 2017 $ 6,661 Accretion expense 184 Liabilities incurred 195 Liabilities settled (88) Revisions to estimate (712) Asset retirement obligations at end of period 6,240 Less: Current asset retirement obligations (1,588) Long-term asset retirement obligations at March 31, 2017 $ 4,652 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) $ / shares in Units, $ in Thousands | Feb. 13, 2017USD ($)a | Oct. 20, 2016USD ($)a | May 26, 2016USD ($)a$ / sharesshares | Apr. 30, 2017USD ($)a | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | |||||
Acquisition deposit | $ | $ 46,138 | ||||
Midland Basin in Howard County, Texas [Member] | October 20, 2016 Acquisitions [Member] | Plymouth Transaction [Member] | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ | $ 339,687 | ||||
Gas and oil area, developed and undeveloped, gross | 6,904 | ||||
Gas and oil area, developed and undeveloped, net | 5,952 | ||||
Working interest | 82.00% | ||||
Net revenue interest | 62.00% | ||||
Midland Basin in Howard County, Texas [Member] | May 26, 2016 Acquisitions [Member] | Big Star Transaction [Member] | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ | $ 220,000 | ||||
Aggregate purchase price | $ | $ 329,573 | ||||
Shares of common stock issued in acquisition | shares | 9,333,333 | ||||
Sales price of common stock | $ / shares | $ 11.74 | ||||
Gas and oil area, developed and undeveloped, gross | 17,298 | ||||
Gas and oil area, developed and undeveloped, net | 14,089 | ||||
Working interest | 81.00% | ||||
Net revenue interest | 61.00% | ||||
Delaware Basin [Member] | February 13, 2017 Acquisitions [Member] | Ameredev Transaction [Member] | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ | $ 632,947 | ||||
Aggregate purchase price | $ | $ 632,947 | ||||
Gas and oil area, developed and undeveloped, gross | 29,175 | ||||
Gas and oil area, developed and undeveloped, net | 16,688 | ||||
Working interest | 82.00% | ||||
Delaware Basin [Member] | April 2017 Acquisitions [Member] | Subsequent Event [Member] | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ | $ 52,500 | ||||
Gas and oil area, developed and undeveloped, gross | 7,031 | ||||
Gas and oil area, developed and undeveloped, net | 2,488 |
Acquisitions (Fair Value of Net
Acquisitions (Fair Value of Net Assets Acquired ) (Details) - Delaware Basin [Member] - Ameredev Transaction [Member] - February 13, 2017 Acquisitions [Member] $ in Thousands | Feb. 13, 2017USD ($) |
Business Acquisition [Line Items] | |
Asset retirement obligations | $ (168) |
Net assets acquired | 632,947 |
Evaluated Oil and Natural Gas Properties [Member] | |
Business Acquisition [Line Items] | |
Oil and natural gas properties | 134,315 |
Unevaluated Oil and Natural Gas Properties [Member] | |
Business Acquisition [Line Items] | |
Oil and natural gas properties | $ 498,800 |
Acquisitions (Unaudited Pro For
Acquisitions (Unaudited Pro Forma Financial Information) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Acquisitions [Abstract] | |||
Revenues | [1] | $ 84,416 | $ 42,615 |
Income (loss) from operations | [1] | 34,907 | (35,451) |
Income (loss) available to common stockholders | [1] | $ 47,963 | $ (38,908) |
Net income (loss) per common share Basic | [1] | $ 0.24 | $ (0.31) |
Net income (loss) per common share Diluted | [1] | $ 0.24 | $ (0.31) |
[1] | The pro forma financial information was prepared assuming the Ameredev Transaction occurred as of January 1, 2016 and the Plymouth Transaction and Big Star Transaction occurred as of January 1, 2015. |
Earnings Per Share (Computation
Earnings Per Share (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Earnings Per Share, Basic and Diluted | |||
Net income (loss) | $ 47,129 | $ (41,109) | |
Preferred stock dividends | (1,824) | (1,824) | |
Income (loss) available to common stockholders | $ 45,305 | $ (42,933) | |
Weighted average shares outstanding | 201,054 | 83,582 | |
Weighted average shares outstanding for diluted income (loss) per share | 201,740 | 83,582 | |
Basic income (loss) per share | $ 0.23 | $ (0.51) | |
Diluted income (loss) per share | $ 0.22 | $ (0.51) | |
Options [Member] | |||
Earnings Per Share, Basic and Diluted | |||
Excluded from the diluted EPS calculation because their effect would be anti-dilutive | [1] | 15 | 15 |
Restricted Stock [Member] | |||
Earnings Per Share, Basic and Diluted | |||
Dilutive impact | 686 | ||
Excluded from the diluted EPS calculation because their effect would be anti-dilutive | [1] | 25 | |
[1] | Shares excluded from the diluted earnings per share calculation because their effect would be anti-dilutive |
Borrowings (Credit Facility) (N
Borrowings (Credit Facility) (Narrative) (Details) - Senior Secured Revolving Credit Facility [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | $ 500,000 |
Credit facility borrowing base | $ 385,000 |
Credit facility maturity date | Mar. 11, 2019 |
Balance outstanding on credit facility | $ 0 |
Interest rate at period end (as a percent) | 2.83% |
Unused capacity, commitment fee (as a percent) | 0.50% |
Minimum [Member] | |
Line of Credit Facility [Line Items] | |
Debt instrument interest rate | 2.00% |
Maximum [Member] | |
Line of Credit Facility [Line Items] | |
Debt instrument interest rate | 3.00% |
Borrowings (6.125% senior notes
Borrowings (6.125% senior notes due 2024 (“6.125% Senior Notes”)) (Narrative) (Details) - USD ($) $ in Thousands | Oct. 03, 2016 | Mar. 31, 2017 |
Callon Petroleum Operating Company [Member] | ||
Debt Instrument [Line Items] | ||
Percentage of ownership in wholly-owned subsidiary | 100.00% | |
Change Of Control [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument redemption price percent | 101.00% | |
6.125% senior unsecured notes due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument aggregate principal amount | $ 400,000 | |
Debt instrument, interest rate, stated (as a percent) | 6.125% | |
Debt instrument maturity date | Oct. 1, 2024 | |
Debt instrument repayment beginning date | Apr. 1, 2017 | |
Net proceeds from issuance of senior unsecured notes | $ 391,270 | |
6.125% senior unsecured notes due 2024 [Member] | Prior to October 1, 2019, a Redemption of up to 35% of the Principal [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument redemption price percent | 106.125% | |
Number of days to closing date of equity offerings | 180 days | |
6.125% senior unsecured notes due 2024 [Member] | Prior to October 1, 2019, a Redemption of All or Part of the Principal [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument redemption price percent | 100.00% | |
6.125% senior unsecured notes due 2024 [Member] | On or After October 1, 2019, but Before October 1, 2020 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument redemption price percent | 104.594% | |
6.125% senior unsecured notes due 2024 [Member] | On or After October 1, 2020, but Before October 1, 2021 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument redemption price percent | 103.063% | |
6.125% senior unsecured notes due 2024 [Member] | On or After October 1, 2021, but Before October 1, 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument redemption price percent | 101.531% | |
6.125% senior unsecured notes due 2024 [Member] | On or After October 1, 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument redemption price percent | 100.00% | |
6.125% senior unsecured notes due 2024 [Member] | Maximum [Member] | Prior to October 1, 2019, a Redemption of up to 35% of the Principal [Member] | ||
Debt Instrument [Line Items] | ||
Redemption principal amount percentage | 35.00% | |
6.125% senior unsecured notes due 2024 [Member] | Minimum [Member] | Prior to October 1, 2019, a Redemption of up to 35% of the Principal [Member] | ||
Debt Instrument [Line Items] | ||
Redemption principal remaining amount percentage | 65.00% |
Borrowings (Schedule of Borrowi
Borrowings (Schedule of Borrowings) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Principal components: | ||
Total principal outstanding | $ 400,000 | $ 400,000 |
Total carrying value of borrowings | 390,536 | 390,219 |
6.125% senior unsecured notes due 2024 [Member] | ||
Principal components: | ||
Total principal outstanding | 400,000 | 400,000 |
Unamortized deferred financing costs | $ (9,464) | $ (9,781) |
Derivative Instruments and He29
Derivative Instruments and Hedging Activities (Fair Value of Derivative Instruments) (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Asset Fair Value | $ 6,032 | $ 103 |
Liability Fair Value | (6,430) | (18,296) |
Net Derivative Fair Value | (398) | (18,193) |
Non-current assets -Fair value of derivatives [Member] | Crude Oil [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Asset Fair Value | 2,939 | |
Non-current liabilities - Fair value of derivatives [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Liability Fair Value | (28) | |
Non-current liabilities - Fair value of derivatives [Member] | Crude Oil [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Liability Fair Value | (28) | |
Current assets - Fair value of derivatives [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Asset Fair Value | 3,093 | 103 |
Current assets - Fair value of derivatives [Member] | Crude Oil [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Asset Fair Value | 3,093 | 103 |
Current liabilities - Fair value of derivatives [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Liability Fair Value | (6,430) | (18,268) |
Current liabilities - Fair value of derivatives [Member] | Crude Oil [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Liability Fair Value | (6,366) | (17,675) |
Current liabilities - Fair value of derivatives [Member] | Natural Gas [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Liability Fair Value | (64) | (593) |
Balance Sheet Current [Member] | Crude Oil [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Net Derivative Fair Value | (3,273) | (17,572) |
Balance Sheet Current [Member] | Natural Gas [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Net Derivative Fair Value | (64) | (593) |
Balance Sheet Non Current [Member] | Crude Oil [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Net Derivative Fair Value | $ 2,939 | $ (28) |
Derivative Instruments and He30
Derivative Instruments and Hedging Activities (Schedule of Derivative Instruments in Statement of Financial Position, Fair Value) (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Offsetting Assets and Liabilities [Line Items] | ||
Derivative Assets | $ 6,032 | $ 103 |
Derivative Liabilities | (6,430) | (18,296) |
Current assets - Fair value of derivatives [Member] | ||
Offsetting Assets and Liabilities [Line Items] | ||
Derivative asset, fair value, gross asset | 5,055 | 1,836 |
Derivative asset, fair value, gross liability | (1,962) | (1,733) |
Derivative Assets | 3,093 | 103 |
Long-term assets: Fair value of derivatives [Member] | ||
Offsetting Assets and Liabilities [Line Items] | ||
Derivative asset, fair value, gross asset | 2,939 | |
Derivative Assets | 2,939 | |
Current liabilities - Fair value of derivatives [Member] | ||
Offsetting Assets and Liabilities [Line Items] | ||
Derivative liability, fair value, gross liability | (8,392) | (20,001) |
Derivative liability, fair value, gross asset | 1,962 | 1,733 |
Derivative Liabilities | $ (6,430) | (18,268) |
Non-current liabilities - Fair value of derivatives [Member] | ||
Offsetting Assets and Liabilities [Line Items] | ||
Derivative liability, fair value, gross liability | (28) | |
Derivative Liabilities | $ (28) |
Derivative Instruments and He31
Derivative Instruments and Hedging Activities (Schedule of Gain or Loss on Derivative Contracts) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net gain (loss) on fair value adjustments | $ 17,794 | $ (8,648) |
Total gain (loss) on derivative contracts | 15,303 | (932) |
Crude Oil [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net gain (loss) on settlements | (2,524) | 7,507 |
Net gain (loss) on fair value adjustments | 17,266 | (9,137) |
Total gain (loss) on derivative contracts | 14,742 | (1,630) |
Natural Gas [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net gain (loss) on settlements | 33 | 209 |
Net gain (loss) on fair value adjustments | 528 | 489 |
Total gain (loss) on derivative contracts | $ 561 | $ 698 |
Derivative Instruments and He32
Derivative Instruments and Hedging Activities (Schedule of Outstanding Oil and Natural Gas Derivative Contracts) (Details) - Not Designated as Hedging Instrument [Member] MMBTU in Thousands | 1 Months Ended | 3 Months Ended |
May 02, 2017MMBTU$ / MMBTU | Mar. 31, 2017MMBTU$ / MMBTU$ / bblMBbls | |
Crude Oil [Member] | Swap [Member] | ||
Derivative [Line Items] | ||
Total volume | MBbls | 550 | |
Swap Contracts Combined with Short Puts (WTI, Enhanced Swaps) for Full Year of 2017 [Member] | Crude Oil [Member] | Put Option [Member] | Short [Member] | ||
Derivative [Line Items] | ||
Strike price | 30 | |
Swap Contracts Combined with Short Puts (WTI, Enhanced Swaps) for Full Year of 2017 [Member] | Crude Oil [Member] | Swap [Member] | ||
Derivative [Line Items] | ||
Average swap price | 44.50 | |
Deferred Premium Put Option for Full Year of 2017 [Member] | Crude Oil [Member] | Put Option [Member] | ||
Derivative [Line Items] | ||
Total volume | MBbls | 250 | |
Average swap price | 2.05 | |
Deferred Premium Put Option for Full Year of 2017 [Member] | Crude Oil [Member] | Put Option [Member] | Long [Member] | ||
Derivative [Line Items] | ||
Strike price | 50 | |
Deferred Premium Put Spread Option for Full Year of 2017 [Member] | Crude Oil [Member] | ||
Derivative [Line Items] | ||
Total volume | MBbls | 506 | |
Average swap price | 2.45 | |
Deferred Premium Put Spread Option for Full Year of 2017 [Member] | Crude Oil [Member] | Put Option [Member] | Long [Member] | ||
Derivative [Line Items] | ||
Strike price | 50 | |
Deferred Premium Put Spread Option for Full Year of 2017 [Member] | Crude Oil [Member] | Put Option [Member] | Short [Member] | ||
Derivative [Line Items] | ||
Strike price | 40 | |
Collar Contracts (WTI, Two-Way Collars) for Full Year of 2017 [Member] | Crude Oil [Member] | Call Option [Member] | Short [Member] | ||
Derivative [Line Items] | ||
Total volume | MBbls | 1,018 | |
Strike price | 58.19 | |
Collar Contracts (WTI, Two-Way Collars) for Full Year of 2017 [Member] | Crude Oil [Member] | Put Option [Member] | Long [Member] | ||
Derivative [Line Items] | ||
Strike price | 47.50 | |
Call Option Contracts (Short Position) for Full Year of 2017 [Member] | Crude Oil [Member] | Call Option [Member] | ||
Derivative [Line Items] | ||
Strike price | 50 | |
Call Option Contracts (Short Position) for Full Year of 2017 [Member] | Crude Oil [Member] | Call Option [Member] | Short [Member] | ||
Derivative [Line Items] | ||
Total volume | MBbls | 505 | |
Swap Contracts Differentials (Midland Basis Differential) for Full Year of 2017 [Member] [Member] | Crude Oil [Member] | ||
Derivative [Line Items] | ||
Total volume | MBbls | 1,650 | |
Average swap price | (0.52) | |
Swap Contracts Differentials (Midland Basis Differential) for Full Year of 2018 [Member] [Member] | Crude Oil [Member] | ||
Derivative [Line Items] | ||
Total volume | MBbls | 2,008 | |
Average swap price | (1.02) | |
Collar Contracts Combined With Short Puts (Henry Hub Three-Way Collars) for Remainder of 2017 [Member] | Natural Gas [Member] | ||
Derivative [Line Items] | ||
Total volume | MMBTU | 1,100 | |
Collar Contracts Combined With Short Puts (Henry Hub Three-Way Collars) for Remainder of 2017 [Member] | Natural Gas [Member] | Call Option [Member] | Short [Member] | ||
Derivative [Line Items] | ||
Strike price | $ / MMBTU | 3.71 | |
Collar Contracts Combined With Short Puts (Henry Hub Three-Way Collars) for Remainder of 2017 [Member] | Natural Gas [Member] | Put Option [Member] | Long [Member] | ||
Derivative [Line Items] | ||
Strike price | $ / MMBTU | 3 | |
Collar Contracts Combined With Short Puts (Henry Hub Three-Way Collars) for Remainder of 2017 [Member] | Natural Gas [Member] | Put Option [Member] | Short [Member] | ||
Derivative [Line Items] | ||
Strike price | $ / MMBTU | 2.50 | |
Collar Contracts Combined with Short Puts (WTI, Three-Way Collars) for Full Year of 2018 [Member] | Crude Oil [Member] | ||
Derivative [Line Items] | ||
Total volume | MBbls | 2,738 | |
Collar Contracts Combined with Short Puts (WTI, Three-Way Collars) for Full Year of 2018 [Member] | Crude Oil [Member] | Call Option [Member] | Short [Member] | ||
Derivative [Line Items] | ||
Strike price | 62.84 | |
Collar Contracts Combined with Short Puts (WTI, Three-Way Collars) for Full Year of 2018 [Member] | Crude Oil [Member] | Put Option [Member] | Long [Member] | ||
Derivative [Line Items] | ||
Strike price | 50 | |
Collar Contracts Combined with Short Puts (WTI, Three-Way Collars) for Full Year of 2018 [Member] | Crude Oil [Member] | Put Option [Member] | Short [Member] | ||
Derivative [Line Items] | ||
Strike price | 40 | |
Collar Contracts (Henry Hub, Two-Way Collars) for Remainder of 2017 [Member] | Natural Gas [Member] | ||
Derivative [Line Items] | ||
Total volume | MMBTU | 1,100 | |
Collar Contracts (Henry Hub, Two-Way Collars) for Remainder of 2017 [Member] | Natural Gas [Member] | Subsequent Event [Member] | ||
Derivative [Line Items] | ||
Total volume | MMBTU | 488 | |
Collar Contracts (Henry Hub, Two-Way Collars) for Remainder of 2017 [Member] | Natural Gas [Member] | Call Option [Member] | Short [Member] | ||
Derivative [Line Items] | ||
Strike price | $ / MMBTU | 3.68 | |
Collar Contracts (Henry Hub, Two-Way Collars) for Remainder of 2017 [Member] | Natural Gas [Member] | Call Option [Member] | Short [Member] | Subsequent Event [Member] | ||
Derivative [Line Items] | ||
Strike price | $ / MMBTU | 3.84 | |
Collar Contracts (Henry Hub, Two-Way Collars) for Remainder of 2017 [Member] | Natural Gas [Member] | Put Option [Member] | Long [Member] | ||
Derivative [Line Items] | ||
Strike price | $ / MMBTU | 3 | |
Collar Contracts (Henry Hub, Two-Way Collars) for Remainder of 2017 [Member] | Natural Gas [Member] | Put Option [Member] | Long [Member] | Subsequent Event [Member] | ||
Derivative [Line Items] | ||
Strike price | $ / MMBTU | 3.40 | |
Collar Contracts (Henry Hub, Two-Way Collars) for Remainder of 2018 [Member] | Natural Gas [Member] | Subsequent Event [Member] | ||
Derivative [Line Items] | ||
Total volume | MMBTU | 720 | |
Collar Contracts (Henry Hub, Two-Way Collars) for Remainder of 2018 [Member] | Natural Gas [Member] | Call Option [Member] | Short [Member] | Subsequent Event [Member] | ||
Derivative [Line Items] | ||
Strike price | $ / MMBTU | 3.84 | |
Collar Contracts (Henry Hub, Two-Way Collars) for Remainder of 2018 [Member] | Natural Gas [Member] | Put Option [Member] | Long [Member] | Subsequent Event [Member] | ||
Derivative [Line Items] | ||
Strike price | $ / MMBTU | 3.40 | |
Swap Contracts for Remainder of 2017 [Member] | Natural Gas [Member] | Subsequent Event [Member] | ||
Derivative [Line Items] | ||
Total volume | MMBTU | 736 | |
Average swap price | $ / MMBTU | 3.39 |
Fair Value Measurements (Summar
Fair Value Measurements (Summary of Financial Instruments at Carrying and Fair Value) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | |
Carrying Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total | $ 390,536 | $ 390,219 | |
Fair Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total | 416,000 | 412,000 | |
6.125% senior unsecured notes due 2024 [Member] | Carrying Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
6.125% Senior Notes | [1] | 390,536 | 390,219 |
6.125% senior unsecured notes due 2024 [Member] | Fair Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
6.125% Senior Notes | [1] | $ 416,000 | $ 412,000 |
[1] | The fair value was based upon Level 2 inputs. See Note 4 for additional information about the Company's 6.125% Senior Notes. |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value of Assets and Liabilities Measured on Recurring Basis) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Derivative Assets | ||
Derivative Asset | $ 6,032 | $ 103 |
Derivative Liabilities | ||
Derivative Liabilities | (6,430) | (18,296) |
Total net liabilities | (398) | (18,193) |
Level 2 [Member] | ||
Derivative Assets | ||
Derivative Asset | 6,032 | 103 |
Derivative Liabilities | ||
Derivative Liabilities | (6,430) | (18,296) |
Total net liabilities | $ (398) | $ (18,193) |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Income Taxes [Abstract] | |
Statutory income tax rate, percent | 35.00% |
Deferred tax assets, valuation allowance | $ 127,073 |
Cummulative loss incurred, period | 3 years |
Asset Retirement Obligations (S
Asset Retirement Obligations (Summary of Activity of Asset Retirement Obligations) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||||
Asset retirement obligations at beginning of period | $ 6,661 | |||
Accretion expense | 184 | $ 180 | ||
Liabilities incurred | 195 | |||
Liabilities settled | (88) | |||
Revisions to estimate | (712) | |||
Asset retirement obligations at end of period | $ 6,661 | $ 6,240 | $ 6,661 | |
Less: Current asset retirement obligations | (1,588) | (2,729) | ||
Long-term asset retirement obligations at the end of the period | 4,652 | 3,932 | ||
Restricted Investments | ||||
Restricted investments | $ 3,339 | $ 3,332 |
Equity Transactions (Narrative)
Equity Transactions (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 19, 2016 | Sep. 06, 2016 | May 26, 2016 | Apr. 25, 2016 | Mar. 09, 2016 | Feb. 04, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Class of Stock [Line Items] | |||||||||
Preferred stock dividend | $ 1,824 | $ 1,824 | |||||||
Preferred stock redemption, description | The Preferred Stock has no stated maturity and is not subject to any sinking fund or other mandatory redemption. On or after May 30, 2018, the Company may, at its option, redeem the Preferred Stock, in whole or in part, by paying $50.00 per share, plus any accrued and unpaid dividends to the redemption date. | ||||||||
Proceeds from issuance of common stock | 94,949 | ||||||||
Series A Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock cumulative cash dividends rate | 10.00% | ||||||||
Preferred stock, liquidation preference (in dollars per share) | $ 50 | $ 50 | |||||||
Preferred stock, dividend rate | $ 5 | ||||||||
Preferred stock dividend | $ 1,824 | $ 1,824 | |||||||
Preferred stock, redemption price per share | $ 50 | ||||||||
Value of a share of common stock | $ 13.16 | ||||||||
Conversion ratio of preferred stock to common stock | 3.8 | ||||||||
Conversion of stock, shares converted | 120,000 | ||||||||
Preferred stock, shares outstanding | 1,458,948 | 1,458,948 | |||||||
Preferred stock, shares issued | 1,458,948 | ||||||||
Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Conversion of stock, shares issued | 719,000 | ||||||||
Shares of common stock issued in public offering | 40,000,000 | 29,900,000 | 25,300,000 | 15,250,000 | |||||
Proceeds from issuance of common stock | $ 634,917 | $ 421,864 | $ 205,869 | $ 94,948 | |||||
Common Stock | Big Star Transaction [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Shares of common stock issued in acquisition | 9,333,333 | ||||||||
Sales price of shares issued | $ 11.74 |
Other (Narrative) (Details)
Other (Narrative) (Details) - Horizontal Drilling Rig [Member] | 1 Months Ended | 3 Months Ended |
Apr. 30, 2017$ / d | Mar. 31, 2017contract | |
Operating Leases And Other Property Plant And Equipment [Line Items] | ||
Number of contracts | contract | 3 | |
Subsequent Event [Member] | ||
Operating Leases And Other Property Plant And Equipment [Line Items] | ||
Operating lease rate per day beginning July 2017 through July 2019 | $ / d | 18,000 |