Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 28, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-14039 | |
Entity Registrant Name | Callon Petroleum Co | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 64-0844345 | |
Entity Address, Address Line One | One Briarlake Plaza | |
Entity Address, Address Line Two | 2000 W. Sam Houston Parkway S., Suite 2000 | |
Entity Address, City or Town | Houston, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77042 | |
City Area Code | (281) | |
Local Phone Number | 589-5200 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | CPE | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 61,869,812 | |
Entity Central Index Key | 0000928022 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 3,370 | $ 3,395 | |
Accounts receivable, net | 210,107 | 237,128 | |
Fair value of derivatives | 25,761 | 21,332 | |
Other current assets | 35,406 | 35,783 | |
Total current assets | 274,644 | 297,638 | |
Oil and natural gas properties, successful efforts accounting method: | |||
Proved properties, net | 4,999,527 | 4,851,529 | |
Unproved properties | 1,227,575 | 1,225,768 | |
Total oil and natural gas properties, net | 6,227,102 | 6,077,297 | |
Other property and equipment, net | 28,719 | 26,152 | |
Deferred income taxes | 45,669 | 0 | |
Deferred financing costs | 17,152 | 18,822 | |
Other assets, net | 58,379 | 68,560 | |
Total assets | 6,651,665 | 6,488,469 | |
Current liabilities: | |||
Accounts payable and accrued liabilities | 550,923 | 536,233 | |
Fair value of derivatives | 570 | 16,197 | |
Other current liabilities | 146,195 | 150,384 | |
Total current liabilities | 697,688 | 702,814 | |
Long-term debt | 2,204,514 | 2,241,295 | |
Asset retirement obligations | 55,023 | 53,892 | |
Fair value of derivatives | 6,594 | 13,415 | |
Other long-term liabilities | 38,088 | 51,272 | |
Total liabilities | 3,001,907 | 3,062,688 | |
Commitments and contingencies | |||
Stockholders’ equity: | |||
Common stock | 616 | 616 | |
Capital in excess of par value | 4,025,533 | 4,022,194 | |
Accumulated deficit | (376,391) | (597,029) | |
Total stockholders’ equity | 3,649,758 | 3,425,781 | [2] |
Total liabilities and stockholders’ equity | $ 6,651,665 | $ 6,488,469 | |
[1]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information.[2]Financial information for prior periods has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 130,000,000 | 130,000,000 |
Common stock, outstanding (in shares) | 61,625,170 | 61,621,518 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Operating Revenues: | |||
Total operating revenues | $ 560,046 | $ 777,218 | [1] |
Operating Expenses: | |||
Lease operating | 75,102 | 67,328 | [1] |
Production and ad valorem taxes | 32,721 | 37,678 | [1] |
Gathering, transportation and processing | 25,977 | 20,775 | [1] |
Exploration | 2,232 | 1,885 | [1] |
Depreciation, depletion and amortization | 125,965 | 113,643 | [1] |
General and administrative | 27,798 | 27,057 | [1] |
Merger, integration and transaction | 0 | 769 | [1] |
Total operating expenses | 375,856 | 380,406 | [1] |
Income From Operations | 184,190 | 396,812 | [1] |
Other (Income) Expenses: | |||
Interest expense | 46,306 | 47,096 | [1] |
(Gain) loss on derivative contracts | (25,645) | 358,300 | [1] |
Other (income) expense | (6,414) | (782) | [1] |
Total other (income) expense | 14,247 | 404,614 | [1] |
Income (Loss) Before Income Taxes | 169,943 | (7,802) | [1] |
Income tax benefit | 50,695 | 87 | [1] |
Net Income (Loss) | $ 220,638 | $ (7,715) | [1],[2] |
Net Income (Loss) Per Common Share: | |||
Basic (in dollars per share) | $ 3.58 | $ (0.13) | [1] |
Diluted (in dollars per share) | $ 3.57 | $ (0.13) | [1] |
Weighted Average Common Shares Outstanding: | |||
Basic (in shares) | 61,625 | 61,487 | [1] |
Diluted (in shares) | 61,874 | 61,487 | |
Oil | |||
Operating Revenues: | |||
Total operating revenues | $ 409,556 | $ 553,249 | [1] |
Natural gas | |||
Operating Revenues: | |||
Total operating revenues | 23,586 | 43,976 | [1] |
Natural gas liquids | |||
Operating Revenues: | |||
Total operating revenues | 43,370 | 67,618 | [1] |
Sales of purchased oil and gas | |||
Operating Revenues: | |||
Total operating revenues | 83,534 | 112,375 | [1] |
Operating Expenses: | |||
Cost of purchased oil and gas | $ 86,061 | $ 111,271 | [1] |
[1]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information.[2]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjusted Balance | Cumulative Effect, Period of Adoption, Adjustment | [1] | Common Stock | Common Stock Cumulative Effect, Period of Adoption, Adjustment | [1] | Capital in Excess of Par | Capital in Excess of Par Cumulative Effect, Period of Adoption, Adjustment | [1] | Accumulated deficit | Accumulated deficit Cumulative Effect, Period of Adoption, Adjusted Balance | Accumulated deficit Cumulative Effect, Period of Adoption, Adjustment | [1] | |||
Beginning balance (in shares) at Dec. 31, 2021 | 61,371,000 | 61,371,000 | |||||||||||||||
Beginning balance at Dec. 31, 2021 | $ 1,865,768 | $ 530,732 | $ 2,396,500 | $ 614 | $ 614 | $ 4,012,358 | $ 4,012,358 | $ (2,147,204) | $ 530,732 | $ (1,616,472) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Net income (loss) | (7,715) | [2],[3] | (7,715) | ||||||||||||||
Restricted stock units (in shares) | 6,000 | ||||||||||||||||
Restricted stock units | 2,790 | 2,790 | |||||||||||||||
Common stock issued for Primexx Acquisition (in shares) | 117,000 | ||||||||||||||||
Common stock issued for Primexx Acquisition | 6,295 | $ 1 | 6,294 | ||||||||||||||
Ending balance (in shares) at Mar. 31, 2022 | [1] | 61,494,000 | |||||||||||||||
Ending balance at Mar. 31, 2022 | [1] | $ 2,397,870 | $ 615 | 4,021,442 | (1,624,187) | ||||||||||||
Beginning balance (in shares) at Dec. 31, 2022 | 61,621,518 | 61,622,000 | [1] | ||||||||||||||
Beginning balance at Dec. 31, 2022 | [1] | $ 3,425,781 | [4] | $ 616 | 4,022,194 | (597,029) | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Net income (loss) | 220,638 | 220,638 | |||||||||||||||
Restricted stock units (in shares) | 3,000 | ||||||||||||||||
Restricted stock units | $ 3,339 | 3,339 | |||||||||||||||
Ending balance (in shares) at Mar. 31, 2023 | 61,625,170 | 61,625,000 | |||||||||||||||
Ending balance at Mar. 31, 2023 | $ 3,649,758 | $ 616 | $ 4,025,533 | $ (376,391) | |||||||||||||
[1]Financial information for prior periods has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information.[2]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information[3]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information.[4]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | [1] | |
Cash flows from operating activities: | |||
Net income (loss) | $ 220,638 | $ (7,715) | [2] |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation, depletion and amortization | 125,965 | 113,643 | |
Amortization of non-cash debt related items, net | 2,631 | 3,749 | |
Deferred income tax benefit | (51,977) | 0 | |
(Gain) loss on derivative contracts | (25,645) | 358,300 | |
Cash paid for commodity derivative settlements, net | (779) | (101,525) | |
Non-cash expense related to share-based awards | 1,881 | 6,043 | |
Other, net | (1,184) | 2,894 | |
Changes in current assets and liabilities: | |||
Accounts receivable | 24,019 | (109,830) | |
Other current assets | (1,618) | (4,180) | |
Accounts payable and accrued liabilities | (46,018) | (13,558) | |
Net cash provided by operating activities | 247,913 | 247,821 | |
Cash flows from investing activities: | |||
Capital expenditures | (204,900) | (168,270) | |
Acquisition of oil and gas properties | (5,991) | (9,168) | |
Proceeds from sales of assets | 2,054 | 4,484 | |
Cash paid for settlement of contingent consideration arrangement | 0 | (19,171) | |
Other, net | (1,072) | 3,635 | |
Net cash used in investing activities | (209,909) | (188,490) | |
Cash flows from financing activities: | |||
Borrowings on credit facility | 669,500 | 673,000 | |
Payments on credit facility | (707,200) | (746,000) | |
Payment of deferred financing costs | (42) | 0 | |
Other, net | (287) | 7,937 | |
Net cash used in financing activities | (38,029) | (65,063) | |
Net change in cash and cash equivalents | (25) | (5,732) | |
Balance, beginning of period | 3,395 | 9,882 | |
Balance, end of period | $ 3,370 | $ 4,150 | |
[1]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information[2]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of BusinessCallon Petroleum Company is an independent oil and natural gas company focused on the acquisition, exploration and development of high-quality assets in the leading oil plays of South and West Texas. 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.The Company’s activities are primarily focused on horizontal development in the Midland and Delaware Basins, both of which are part of the larger Permian Basin in West Texas, as well as the Eagle Ford in South Texas. The Company’s primary operations in the Permian reflect a high-return, oil-weighted drilling inventory with multiple prospective horizontal development intervals and are complemented by a well-established, cash flow-generating business in the Eagle Ford. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim consolidated financial statements include the accounts of the Company after elimination of intercompany transactions and balances. These financial statements have been prepared pursuant to the rules and regulations of the SEC and therefore do not include all disclosures required for financial statements prepared in conformity with GAAP. In the opinion of management, these financial statements reflect all normal, recurring adjustments and accruals considered necessary to present fairly, in all material respects, the Company’s interim financial position, results of operations and cash flows. However, the results of operations for the periods presented are not necessarily indicative of the results of operations that may be expected for the full year. Certain reclassifications have been made to prior period amounts to conform to the current period presentation. Such reclassifications did not have a material impact on prior period financial statements. Significant Accounting Policies The Company’s significant accounting policies are described in “Note 2 — Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in its 2022 Annual Report and are supplemented by the notes included in this Form 10-Q. The financial statements and related notes included in this Form 10-Q should be read in conjunction with the Company’s 2022 Annual Report. Recast Financial Information for Change in Accounting Principle In the first quarter of 2023, the Company voluntarily changed its method of accounting for its oil and gas exploration and development activities from the full cost method to the successful efforts method of accounting. Accordingly, the financial information for prior periods has been recast to reflect retrospective application of the successful efforts method, as prescribed by the FASB Accounting Standards Codification (“ASC”) 932 “Extractive Activities — Oil and Gas.” Although the full cost method of accounting continues to be an accepted alternative, the successful efforts method of accounting is the generally preferred method of the SEC and, because it is more widely used in the industry, the Company expects the change to improve the comparability of its financial statements to its peers. The Company also believes the successful efforts method provides a more representational depiction of assets and operating results and provides for its investments in oil and natural gas properties to be assessed for impairment in accordance with ASC Topic 360 “Property Plant and Equipment,” rather than valuations based on prices and costs prescribed under the full cost method as of the balance sheet date. As required by ASC 250 “Accounting Changes and Error Corrections”, the Company has presented the accumulated effect of the change in accounting principle as a change in the beginning balance of retained earnings (accumulated deficit) of the earliest period presented in the consolidated financial statements. For detailed information regarding the effects of the change to the successful efforts method, see “Note 3 — Change in Accounting Principle.” Oil and Gas Property Proved oil and gas properties. The Company follows the successful efforts method of accounting for its oil and gas properties. Under this method, drilling and completion costs, including lease and well equipment, intangible development costs, and operational support facilities in the field, associated with development wells are capitalized to proved oil and gas properties and are depleted on an asset group basis (properties aggregated based on geographical and geological characteristics) using the units-of-production method based on estimated proved developed oil and gas reserves. The calculation of depletion expense takes into consideration estimated asset retirement costs, net of estimated salvage values. Proved oil and gas properties are assessed for impairment on an asset group basis whenever events and circumstances indicate that there could be a possible decline in the recoverability of the net book value of such property. The Company estimates the expected future net cash flows of its proved oil and gas properties and compares these undiscounted cash flows to the net book value of the proved oil and gas properties to determine if the net book value is recoverable. If the net book value exceeds the estimated undiscounted future net cash flows, the Company will recognize an impairment to reduce the net book value of the proved oil and gas properties to fair value. The factors used to determine fair value include, but are not limited to, estimates of reserves, future commodity prices, future production estimates, estimated future development costs and operating costs, and discount rates, which are based on a weighted average cost of capital. There were no impairments of proved oil and gas properties for the three months ended March 31, 2023 or 2022. The partial sale of a proved property within an existing asset group is accounted for as a normal retirement and no net gain or loss on divestiture is recognized as long as the treatment does not significantly alter the units-of-production depletion rate. The sale of a partial interest in an individual proved property is accounted for as a recovery of cost. A net gain or loss on divestiture is recognized in the consolidated statements of operations for all other sales of proved properties. Unproved oil and gas properties. Unproved oil and gas properties consist of costs incurred in obtaining a mineral interest or a right in a property such as a lease, in addition to broker fees, recording fees and other similar costs. Leasehold costs are classified as unproved until proved reserves are discovered on or otherwise attributed to the property, at which time the related unproved oil and gas property costs are reclassified to proved oil and gas properties and depleted on an asset group basis using the units-of-production method based on estimated total proved oil and gas reserves. The Company evaluates significant unproved oil and gas property costs for impairment based on remaining lease term, drilling results, reservoir performance, seismic interpretation or changes in future plans to develop acreage. Unproved oil and gas properties that are not individually significant are aggregated by asset group, and the portion of such costs estimated to be nonproductive prior to lease expiration is amortized over the average holding period. The estimate of what could be nonproductive is based on the Company’s historical experience or other information, including current drilling plans and existing geological data. Impairment and amortization of unproved oil and gas properties are recognized as “Impairment of oil and gas properties” in the consolidated statements of operations. Exploratory. Exploratory costs, including personnel and other internal costs, geological and geophysical expenses and delay rentals for oil and gas leases, are expensed as incurred. Exploratory well costs are initially capitalized pending the determination of whether proved reserves have been discovered. If proved reserves are discovered, exploratory well costs are capitalized as proved oil and gas properties. If proved reserves are not found, exploratory well costs are expensed as dry holes. The application of the successful efforts method of accounting requires management’s judgment to determine the proper designation of wells as either development or exploratory, which will ultimately determine the proper accounting treatment of costs of dry holes. Capitalized interest. The Company capitalizes interest on expenditures made in connection with exploration and development projects that meet certain thresholds and are not subject to current amortization. For projects that meet these thresholds, interest is capitalized only for the period that activities are in process to bring the projects to their intended use. Capitalized interest cannot exceed interest expense for the period capitalized. During the three months ended March 31, 2023 and 2022, the Company did not have any projects that met the thresholds, therefore, had no capitalized interest. Subsequent Events The Company evaluates subsequent events through the date the financial statements are issued. See “Note 16 — Subsequent Events” for further discussion. |
Change in Accounting Principle
Change in Accounting Principle | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Change in Accounting Principle | Change in Accounting PrincipleIn the first quarter of 2023, the Company voluntarily changed its method of accounting for oil and natural gas exploration and development activities from the full cost method to the successful efforts method. Accordingly, financial information for prior periods has been recast to reflect retrospective application of the successful efforts method. In general, under successful efforts, exploration costs such as exploratory dry holes, exploratory geophysical and geological costs, delay rentals, unproved leasehold impairments and exploration overhead are expensed as incurred as opposed to being capitalized under the full cost method of accounting. The successful efforts method also provides for the assessment of potential proved oil and gas property impairments by comparing the net book value of proved oil and gas properties to associated estimated undiscounted future net cash flows. If the net book value exceeds the estimated undiscounted future net cash flows, an impairment is recorded to reduce the net book value to fair value. Under the full cost method of accounting, an impairment would be required if the net book value of oil and natural gas properties exceeds a full cost ceiling using an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months. In addition, gains or losses, if applicable, are recognized more frequently on the divestitures of oil and gas properties under the successful efforts method, as opposed to an adjustment to the net book value of the oil and gas properties under the full cost method. The following tables present the effects of the change to the successful efforts method in the consolidated balance sheets: As of March 31, 2023 Under Changes Under Successful Efforts (In thousands) Oil and natural gas properties: Proved properties $10,647,471 ($1,107,849) $9,539,622 Accumulated depreciation, depletion, amortization and impairments (6,464,299) 1,924,204 (4,540,095) Unproved properties 1,744,649 (517,074) 1,227,575 Total oil and gas properties, net 5,927,821 299,281 6,227,102 Deferred income taxes 72,323 (26,654) 45,669 Total assets $6,379,038 $272,627 $6,651,665 Stockholders’ equity: Accumulated deficit (649,018) 272,627 (376,391) Total stockholders' equity 3,377,131 272,627 3,649,758 Total liabilities and stockholders' equity $6,379,038 $272,627 $6,651,665 As of December 31, 2022 Under Changes Under Successful Efforts (In thousands) Oil and natural gas properties: Proved properties $10,367,478 ($1,099,343) $9,268,135 Accumulated depreciation, depletion, amortization and impairments (6,343,875) 1,927,269 (4,416,606) Unproved properties 1,711,306 (485,538) 1,225,768 Total oil and gas properties, net 5,734,909 342,388 6,077,297 Total assets $6,146,081 $342,388 $6,488,469 Deferred income taxes (1) 4,279 2,029 6,308 Stockholders’ equity: Accumulated deficit (937,388) 340,359 (597,029) Total stockholders' equity 3,085,422 340,359 3,425,781 Total liabilities and stockholders' equity $6,146,081 $342,388 $6,488,469 (1) Included in “Other long-term liabilities” in the consolidated balance sheets. The following tables present the effects of the change to the successful efforts method in the consolidated statements of operations: Three Months Ended March 31, 2023 Under Changes Under Successful Efforts (In thousands, except per share data) Operating Expenses: Exploration $— $2,232 $2,232 Depreciation, depletion and amortization 122,900 3,065 125,965 General and administrative 17,140 10,658 27,798 Income From Operations 200,145 (15,955) 184,190 Other Expenses: Interest expense 19,153 27,153 46,306 Income Before Income Taxes 213,050 (43,107) 169,943 Income tax benefit (expense) 75,320 (24,625) 50,695 Net Income $288,370 ($67,732) $220,638 Net Income Per Common Share: Basic $4.68 $3.58 Diluted $4.66 $3.57 Three Months Ended March 31, 2022 Under Changes Under Successful Efforts (In thousands, except per share data) Operating Expenses: Exploration $— $1,885 $1,885 Depreciation, depletion and amortization 102,979 10,664 113,643 General and administrative 17,121 9,936 27,057 Income From Operations 419,297 (22,485) 396,812 Other Expenses: Interest expense 21,558 25,538 47,096 Income (Loss) Before Income Taxes 40,221 (48,023) (7,802) Income tax benefit (expense) (484) 571 87 Net Income (Loss) $39,737 ($47,452) ($7,715) Net Income (Loss) Per Common Share: Basic $0.65 ($0.13) Diluted $0.64 ($0.13) The following tables present the effects of the change to the successful efforts method in the consolidated statements of cash flows: Three Months Ended March 31, 2023 Under Changes Under Successful Efforts (In thousands) Cash flows from operating activities: Net income $288,370 ($67,732) $220,638 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 122,900 3,065 125,965 Amortization of non-cash debt related items, net 1,088 1,543 2,631 Deferred income tax benefit (76,602) 24,625 (51,977) Non-cash expense related to share-based awards 757 1,124 1,881 Net cash provided by operating activities 285,288 (37,375) 247,913 Cash flows from investing activities: Capital expenditures (240,043) 35,143 (204,900) Acquisition of oil and gas properties (8,223) 2,232 (5,991) Net cash used in investing activities (247,284) 37,375 (209,909) Net change in cash and cash equivalents (25) — (25) Balance, beginning of period 3,395 — 3,395 Balance, end of period $3,370 $— $3,370 Three Months Ended March 31, 2022 Under Changes Under Successful Efforts (In thousands) Cash flows from operating activities: Net income (loss) $39,737 ($47,452) ($7,715) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 102,979 10,664 113,643 Amortization of non-cash debt related items, net 1,716 2,033 3,749 Non-cash expense related to share-based awards 4,166 1,877 6,043 Changes in current assets and liabilities: Accounts payable and accrued liabilities (12,987) (571) (13,558) Net cash provided by operating activities 281,270 (33,449) 247,821 Cash flows from investing activities: Capital expenditures (201,478) 33,208 (168,270) Acquisition of oil and gas properties (9,409) 241 (9,168) Net cash used in investing activities (221,939) 33,449 (188,490) Net change in cash and cash equivalents (5,732) — (5,732) Balance, beginning of period 9,882 — 9,882 Balance, end of period $4,150 $— $4,150 The following tables present the effects of the change to the successful efforts method in the consolidated statements of stockholders’ equity: As of March 31, 2023 Under Changes Under Successful Efforts (In thousands) Accumulated deficit ($649,018) $272,627 ($376,391) Total stockholders’ equity $3,377,131 $272,627 $3,649,758 As of December 31, 2022 Under Changes Under Successful Efforts (In thousands) Accumulated deficit ($937,388) $340,359 ($597,029) Total stockholders’ equity $3,085,422 $340,359 $3,425,781 |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Revenue from Contracts with Customers The Company recognizes oil, natural gas, and NGL production revenue at the point in time when control of the product transfers to the purchaser, which differs depending on the applicable contractual terms. Transfer of control also drives the presentation of gathering, transportation and processing expenses in the consolidated statements of operations. See “Note 3 — Revenue Recognition” of the Notes to Consolidated Financial Statements in the 2022 Annual Report for more information regarding the types of contracts under which oil, natural gas, and NGL production revenue is generated. Oil and Gas Purchase and Sale Arrangements The Company proactively evaluates development plans and looks to enter into pipeline transportation contracts to mitigate market exposures and help ensure certainty of flow for its oil and gas production, in some cases multiple years in advance of development. Additionally, as the Company looks to optimize its operations and reduce exposures, in certain instances, the Company purchases oil and gas from third parties which is utilized to fulfill portions of its pipeline commitments. Sales of purchased oil and gas represent revenues the Company receives from sales of commodities purchased from a third-party. The Company recognizes these revenues and the purchase of the third-party commodities, as well as any costs associated with the purchase, on a gross basis, as the Company acts as a principal in these transactions by assuming control of the purchased commodity before it is transferred to the customer. Accounts Receivable from Revenues from Contracts with Customers Net accounts receivable include amounts billed and currently due from revenues from contracts with customers of our oil and natural gas production, which had a balance at March 31, 2023 and December 31, 2022 of $153.4 million and $174.1 million, respectively, and are presented in “Accounts receivable, net” in the consolidated balance sheets. Prior Period Performance Obligations The Company records revenue in the month production is delivered to the purchaser. However, settlement statements for sales may not be received for 30 to 90 days after the date production is delivered, and as a result, the Company is required to estimate the amount of production delivered to the purchaser and the price that will be received for the sale of the product. The Company records the differences between estimates and the actual amounts received for product sales in the month that payment is received from the purchaser. The Company has existing internal controls for its revenue estimation process and related accruals, and any identified differences between its revenue estimates and actual revenue received historically have not been significant. |
Acquisitions_and Divestitures
Acquisitions and Divestitures | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures The Company did not have any material acquisitions or divestitures during the three months ended March 31, 2023 or 2022. |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net As of March 31, 2023 and December 31, 2022, total property and equipment, net consisted of the following: March 31, 2023 December 31, 2022* Oil and natural gas properties, successful efforts accounting method (In thousands) Proved properties $9,539,622 $9,268,135 Accumulated depreciation, depletion, amortization and impairments (4,540,095) (4,416,606) Proved properties, net 4,999,527 4,851,529 Unproved properties 1,227,575 1,225,768 Total oil and natural gas properties, net $6,227,102 $6,077,297 Other property and equipment $43,486 $40,530 Accumulated depreciation (14,767) (14,378) Other property and equipment, net $28,719 $26,152 * Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares outstanding for the periods presented. The calculation of diluted earnings per share includes the potential dilutive impact of non-vested restricted stock units outstanding during the periods presented, as calculated using the treasury stock method, unless their effect is anti-dilutive. For the three months ended March 31, 2022, the Company reported a net loss. As a result, the calculation of diluted weighted average common shares outstanding excluded all potentially dilutive common shares outstanding. The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended March 31, 2023 2022* (In thousands, except per share amounts) Net Income (Loss) $220,638 ($7,715) Basic weighted average common shares outstanding 61,625 61,487 Dilutive impact of restricted stock units 249 — Diluted weighted average common shares outstanding 61,874 61,487 Net Income (Loss) Per Common Share Basic $3.58 ($0.13) Diluted $3.57 ($0.13) Restricted stock units (1) 42 980 Warrants (1) 481 481 * Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. (1) Shares excluded from the diluted earnings per share calculation because their effect would be anti-dilutive. |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings The Company’s borrowings consisted of the following: March 31, 2023 December 31, 2022 (In thousands) 8.25% Senior Notes due 2025 $187,238 $187,238 6.375% Senior Notes due 2026 320,783 320,783 Senior Secured Revolving Credit Facility due 2027 465,300 503,000 8.0% Senior Notes due 2028 650,000 650,000 7.5% Senior Notes due 2030 600,000 600,000 Total principal outstanding 2,223,321 2,261,021 Unamortized premium on 8.25% Senior Notes 1,524 1,715 Unamortized deferred financing costs for Senior Notes (20,331) (21,441) Total carrying value of borrowings (1) $2,204,514 $2,241,295 (1) Excludes unamortized deferred financing costs related to the Company’s senior secured revolving credit facility of $17.2 million and $18.8 million as of March 31, 2023 and December 31, 2022, respectively, which are classified in “Deferred financing costs” in the consolidated balance sheets. Senior Secured Revolving Credit Facility The Company has a senior secured revolving credit facility with a syndicate of lenders (the “Credit Facility”) that, as of March 31, 2023, had a maximum credit amount of $5.0 billion, a borrowing base of $2.0 billion and an elected commitment amount of $1.5 billion, with borrowings outstanding of $465.3 million at a weighted-average interest rate of 6.87%, and letters of credit outstanding of $16.4 million. The credit agreement governing the Credit Facility (the “Credit Agreement”) provides for interest-only payments until October 19, 2027 when the Credit Agreement matures and any outstanding borrowings are due. Borrowings outstanding under the Credit Agreement bear interest at the Company’s option at either (i) a base rate for a base rate loan plus a margin between 0.75% to 1.75%, where the base rate is defined as the greatest of the prime rate, the federal funds rate plus 0.50%, and the SOFR plus 0.1% (“Adjusted SOFR”) for a one month period plus 1.00%, or (ii) an Adjusted SOFR plus a margin between 1.75% to 2.75%. The Company also incurs commitment fees at rates ranging between 0.375% to 0.500% on the unused portion of lender commitments, which are included in “Interest expense” in the consolidated statements of operations. The borrowing base under the Credit Agreement is subject to regular redeterminations in the spring and fall of each year, as well as special redeterminations described in the Credit Agreement, which in each case may reduce the amount of the borrowing base. On May 1, 20 23, as part of the Company’s spring 2023 redetermination, the borrowing base of $2.0 billion and elected commitment amount of $1.5 billion were reaffirmed. Covenants The Company’s Credit Facility and the indentures governing the 8.25% Senior Notes due 2025, the 6.375% Senior Notes due 2026, the 8.0% Senior Notes due 2028, and the 7.5% Senior Notes due 2030 (collectively, the “Senior Notes”) limit the Company and certain of its subsidiaries with respect to the amount of additional indebtedness, liens, dividends and other payments to shareholders, repurchases or redemptions of the Company’s common stock, redemptions of senior notes, investments, acquisitions, mergers, asset dispositions, transactions with affiliates, hedging transactions and other matters, along with maintenance of certain financial ratios. Under the Credit Agreement, the Company must maintain the following financial covenants determined as of the last day of the quarter: (1) a Leverage Ratio (as defined in the Credit Agreement) of no more than 3.50 to 1.00 and (2) a Current Ratio (as defined in the Credit Agreement) of not less than 1.00 to 1.00. The Company was in compliance with these covenants at March 31, 2023. The Credit Agreement and indentures are subject to customary events of default. If an event of default occurs and is continuing, the holders or lenders may elect to accelerate amounts due (except in the case of a bankruptcy event of default, in which case such amounts will automatically become due and payable). |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Objectives and Strategies for Using Derivative Instruments The Company is exposed to fluctuations in oil, natural gas and NGL 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, natural gas and NGL production. The Company utilizes a mix of collars, swaps, put and call options, and basis differential swaps 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 Company typically has numerous commodity derivative instruments outstanding with a counterparty that were executed at various dates, for various contract types, commodities and time periods. This often results in both commodity derivative asset and liability positions with that counterparty. The Company nets its commodity derivative instrument fair values executed with the same counterparty to a single asset or liability pursuant to International Swap Dealers Association Master Agreements, which provide for net settlement over the term of the contract and in the event of default or termination of the contract. 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. The Company strives to minimize its credit exposure to any individual counterparty and, as such, the Company has outstanding commodity derivative instruments with ten counterparties as of March 31, 2023. All of the counterparties to the Company’s commodity derivative instruments are also lenders under the Company’s Credit Facility. Therefore, each of the Company’s counterparties allow the Company to satisfy any need for margin obligations associated with commodity derivative instruments where the Company is in a net liability position with the collateral securing the Credit Facility, thus eliminating the need for independent collateral posting. Because each of the Company’s counterparties has an investment grade credit rating, the Company believes it does not have significant credit risk and accordingly does not currently require its counterparties to post collateral to support the net asset positions of its commodity derivative instruments. Although the Company does not currently anticipate nonperformance from its counterparties, it continually monitors the credit ratings of each counterparty. 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 10 — Fair Value Measurements” for further discussion. Financial Statement Presentation and Settlements The Company records its derivative instruments at fair value in the consolidated balance sheets and records changes in fair value, as well as settlements during the period, as “(Gain) loss on derivative contracts” in the consolidated statements of operations. The Company presents the fair value of derivative contracts on a net basis in the consolidated balance sheets as they are subject to master netting arrangements. The following presents the impact of this presentation to the Company’s recognized assets and liabilities for the periods indicated: As of March 31, 2023 Presented without As Presented with Effects of Netting Effects of Netting Effects of Netting (In thousands) Derivative Assets Fair value of derivatives - current $40,838 ($15,077) $25,761 Other assets, net $307 ($307) $— Derivative Liabilities Fair value of derivatives - current ($15,647) $15,077 ($570) Fair value of derivatives - non-current ($6,901) $307 ($6,594) As of December 31, 2022 Presented without As Presented with Effects of Netting Effects of Netting Effects of Netting (In thousands) Derivative Assets Fair value of derivatives - current $51,984 ($30,652) $21,332 Other assets, net $1,343 ($889) $454 Derivative Liabilities Fair value of derivatives - current ($46,849) $30,652 ($16,197) Fair value of derivatives - non-current ($14,304) $889 ($13,415) The components of “(Gain) loss on derivative contracts” are as follows for the respective periods: Three Months Ended March 31, 2023 2022 (In thousands) (Gain) loss on oil derivatives ($23,344) $325,348 (Gain) loss on natural gas derivatives (2,301) 28,181 Loss on NGL derivatives — 4,771 (Gain) loss on derivative contracts ($25,645) $358,300 The components of “Cash received (paid) for commodity derivative settlements, net” and “Cash received (paid) for settlements of contingent consideration arrangements, net” are as follows for the respective periods: Three Months Ended March 31, 2023 2022 (In thousands) Cash flows from operating activities Cash paid on oil derivatives ($7,398) ($95,353) Cash received (paid) on natural gas derivatives 6,619 (4,644) Cash paid on NGL derivatives — (1,528) Cash paid for commodity derivative settlements, net ($779) ($101,525) Cash received for settlements of contingent consideration arrangements, net (1) $— $6,492 Cash flows from investing activities Cash paid for settlement of contingent consideration arrangement (1) $— ($19,171) Cash flows from financing activities Cash received for settlement of contingent consideration arrangement (1) $— $8,512 (1) See “Note 8 — Derivative Instruments and Hedging Activities” of the Notes to Consolidated Financial Statements in our 2022 Annual Report for discussion of the Company’s contingent consideration arrangements. Derivative Positions Listed in the tables below are the outstanding oil and natural gas derivative contracts as of March 31, 2023: For the Remainder For the Full Year Oil Contracts (WTI) 2023 2024 Swap Contracts Total volume (Bbls) 866,500 — Weighted average price per Bbl $80.41 $— Collar Contracts (Three-Way Collars) Total volume (Bbls) 1,375,000 — Weighted average price per Bbl Ceiling (short call) $90.00 $— Floor (long put) $70.00 $— Floor (short put) $50.00 $— Collar Contracts (Two-Way Collars) Total volume (Bbls) 1,555,000 — Weighted average price per Bbl Ceiling (short call) $86.35 $— Floor (long put) $71.70 $— Short Call Swaption Contracts (1) Total volume (Bbls) — 1,830,000 Weighted average price per Bbl $— $80.30 (1) The 2024 short call swaption contracts have exercise expiration dates of December 29, 2023. For the Remainder For the Full Year Natural Gas Contracts (Henry Hub) 2023 2024 Swap Contracts Total volume (MMBtu) 5,520,000 — Weighted average price per MMBtu $3.70 $— Collar Contracts Total volume (MMBtu) 4,900,000 1,820,000 Weighted average price per MMBtu Ceiling (short call) $5.62 $6.00 Floor (long put) $3.56 $3.00 Natural Gas Contracts (Waha Basis Differential) Swap Contracts Total volume (MMBtu) 7,030,000 3,660,000 Weighted average price per MMBtu ($1.06) ($1.05) Natural Gas Contracts (HSC Basis Differential) Swap Contracts Total volume (MMBtu) 8,250,000 14,640,000 Weighted average price per MMBtu ($0.29) ($0.42) |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Accounting guidelines for measuring fair value establish a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value 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 – Observable inputs such as quoted prices in active markets at the measurement date for identical, unrestricted assets or liabilities. Level 2 – Other inputs that are observable directly or indirectly, such as quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 – Unobservable inputs for which there is little or no market data and for which the Company makes its own assumptions about how market participants would price the assets and liabilities. Fair Value of Financial Instruments Cash, Cash Equivalents, and Restricted Investments. The carrying amounts for these instruments approximate fair value due to the short-term nature or maturity of the instruments. Debt. The carrying amount of borrowings outstanding under the Credit Facility approximates fair value as the borrowings bear interest at variable rates and are reflective of market rates. The following table presents the principal amounts of the Senior Notes with the fair values measured using quoted secondary market trading prices which are designated as Level 2 within the valuation hierarchy. March 31, 2023 December 31, 2022 Principal Amount Fair Value Principal Amount Fair Value (In thousands) 8.25% Senior Notes $187,238 $186,459 $187,238 $186,719 6.375% Senior Notes 320,783 305,623 320,783 301,732 8.0% Senior Notes 650,000 644,111 650,000 616,935 7.5% Senior Notes 600,000 563,682 600,000 550,812 Total $1,758,021 $1,699,875 $1,758,021 $1,656,198 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 sheets. The following methods and assumptions were used to estimate fair value: Commodity Derivative Instruments. The fair value of commodity derivative instruments is derived using a third-party income approach valuation model that utilizes market-corroborated inputs that are observable over the term of the commodity derivative contract. The Company’s fair value calculations also incorporate an estimate of the counterparties’ default risk for commodity derivative assets and an estimate of the Company’s default risk for commodity derivative liabilities. As the inputs in the model are substantially observable over the term of the commodity derivative contract and as there is a wide availability of quoted market prices for similar commodity derivative contracts, the Company designates its commodity derivative instruments as Level 2 within the fair value hierarchy. See “Note 9 — Derivative Instruments and Hedging Activities” for further discussion. The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022: March 31, 2023 Level 1 Level 2 Level 3 (In thousands) Commodity derivative assets $— $25,761 $— Commodity derivative liabilities $— ($7,164) $— December 31, 2022 Level 1 Level 2 Level 3 (In thousands) Commodity derivative assets $— $21,786 $— Commodity derivative liabilities $— ($29,612) $— There were no transfers between any of the fair value levels during any period presented. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company provides for income taxes at the statutory rate of 21%. Reported income tax expense differs from the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income. These differences primarily relate to non-deductible executive compensation expenses, restricted stock unit windfalls, changes in valuation allowances, and state income taxes. For the three months ended March 31, 2023 and 2022, the Company’s effective income tax rates were approximately 30% and 1%, respectively. The primary differences between the effective tax rate and the statutory rate for the three months ended March 31, 2023 resulted from the release of the valuation allowance recorded against the Company’s net deferred tax assets as discussed further below. For the three months ended March 31, 2022, the effective tax rate differed from the statutory rate as a result of the valuation allowance that was in place and the effect of state income taxes. Deferred Tax Asset Valuation Allowance |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation RSU Equity Awards The following table summarizes activity for restricted stock units that may be settled in common stock (“RSU Equity Awards”) for the three months ended March 31, 2023: Three Months Ended March 31, 2023 RSU Equity Awards Weighted Average Grant Date Unvested, beginning of the period 800 $44.79 Granted 317 $34.02 Vested (6) $49.23 Forfeited (21) $43.81 Unvested, end of the period 1,090 $41.65 Grant activity for the three months ended March 31, 2023 primarily consisted of RSU Equity Awards granted to executives and employees as part of the annual grant of long-term equity incentive awards with a weighted-average grant date fair value of $34.02 . The aggregate fair value of RSU Equity Awards that vested during the three months ended March 31, 2023 was $0.2 million. As of March 31, 2023, unrecognized compensation costs related to unvested RSU Equity Awards were $30.2 million and will be recognized over a weighted average period of 2.1 years. Cash-Settled Awards As of March 31, 2023 and December 31, 2022, the Company had a total liability of $4.2 million and $6.5 million, respectively, which, as of December 31, 2022, consisted of restricted stock unit awards that may be settled in cash (“Cash-Settled RSU Awards”) and stock appreciation rights to be settled in cash (“Cash SARs” and, collectively with the Cash-Settled RSU Awards, the “Cash-Settled Awards”). As of March 31, 2023, there were no Cash-Settled RSU Awards outstanding. Share-Based Compensation Expense (Benefit), Net Share-based compensation expense associated with the RSU Equity Awards and the Cash-Settled Awards is included in “General and administrative” in the consolidated statements of operations. The following table presents share-based compensation expense (benefit), net for the periods indicated: Three Months Ended March 31, 2023 2022* (In thousands) RSU Equity Awards $3,626 $3,366 Cash-Settled Awards (1,745) 2,677 Total share-based compensation expense (benefit), net $1,881 $6,043 * Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Accounts Receivable, Net
Accounts Receivable, Net | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net March 31, 2023 December 31, 2022 (In thousands) Oil and natural gas receivables $153,362 $174,107 Joint interest receivables 22,575 16,778 Other receivables 36,204 48,277 Total 212,141 239,162 Allowance for credit losses (2,034) (2,034) Total accounts receivable, net $210,107 $237,128 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities March 31, 2023 December 31, 2022 (In thousands) Accounts payable $199,268 $191,133 Revenues and royalties payable 234,379 244,408 Accrued capital expenditures 85,540 58,395 Accrued interest 31,736 42,297 Total accounts payable and accrued liabilities $550,923 $536,233 |
Supplemental Cash Flow
Supplemental Cash Flow | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow | Supplemental Cash Flow Three Months Ended March 31, 2023 2022* (In thousands) Supplemental cash flow information: Interest paid $54,233 $54,930 Income taxes paid (1) — — Non-cash investing and financing activities: Change in accrued capital expenditures $67,460 ($8,897) Change in asset retirement costs 568 289 * Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. (1) The Company did not pay or receive a refund for any federal income tax for the periods presented above. For the three months ended March 31, 2023 and 2022, the Company received refunds of $0.2 million and $2.8 million, respectively, for state income taxes. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Credit Agreement Reaffirmation See “Note 8 — Borrowings” for discussion of the results of the Company’s spring 2023 borrowing base redetermination . Divestiture of Eagle Ford Properties On May 3, 2023, the Company entered into an agreement with Ridgemar Energy Operating, LLC (“Ridgemar”) for the sale of all its oil and gas properties in the Eagle Ford for cash consideration of $655.0 million, subject to customary purchase price adjustments, as well as contingent consideration where the Company could receive up to $45.0 million if the WTI price of oil exceeds certain thresholds in 2024. Upon signing, Ridgemar paid approximately $49.1 million as a deposit into third-party escrow accounts. The transaction is structured as the acquisition by Ridgemar of 100% of the limited liability company interests of the Company’s wholly owned subsidiary, Callon (Eagle Ford) LLC. Acquisition of Delaware Basin Properties On May 3, 2023, the Company entered into an agreement with Percussion Petroleum Operating,II, LLC (“Percussion”) for the purchase of its oil and gas properties in the Delaware Basin for cash consideration of $265.0 million and $210.0 million of shares of Company common stock. Additionally, the Company could have to pay up to $62.5 million of contingent consideration if the WTI price of oil exceeds certain thresholds in 2023, 2024, and 2025. Upon signing, the Company paid $36.0 million as a deposit into third-party escrow accounts. The transaction is structured as the acquisition by Callon Petroleum Operating Company of 100% of the limited liability company interests of Percussion’s wholly owned subsidiary, Percussion Petroleum Operating II, LLC. Closing of both transactions is expected to occur early in July 2023, subject to completion of various customary conditions. Approval of Share Repurchase Program On May 2, 2023, the board of directors (the “Board”) of the Company approved a share repurchase program (the “Share Repurchase Program”), pursuant to which the Company is authorized to repurchase up to $300.0 million of its outstanding common stock through the second quarter of 2025, contingent upon the consummation of the transactions described above. Repurchases under the Share Repurchase Program may be made, from time to time, in amounts and at prices the Company deems appropriate and will be subject to a variety of factors, including the market price of the Company’s common stock, general market and economic conditions and applicable legal requirements. The Share Repurchase Program may be suspended, modified or discontinued by the Board at any time without prior notice. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim consolidated financial statements include the accounts of the Company after elimination of intercompany transactions and balances. These financial statements have been prepared pursuant to the rules and regulations of the SEC and therefore do not include all disclosures required for financial statements prepared in conformity with GAAP. In the opinion of management, these financial statements reflect all normal, recurring adjustments and accruals considered necessary to present fairly, in all material respects, the Company’s interim financial position, results of operations and cash flows. However, the results of operations for the periods presented are not necessarily indicative of the results of operations that may be expected for the full year. Certain reclassifications have been made to prior period amounts to conform to the current period presentation. Such reclassifications did not have a material impact on prior period financial statements. Significant Accounting Policies The Company’s significant accounting policies are described in “Note 2 — Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in its 2022 Annual Report and are supplemented by the notes included in this Form 10-Q. The financial statements and related notes included in this Form 10-Q should be read in conjunction with the Company’s 2022 Annual Report. |
Oil and Gas Property | Oil and Gas Property Proved oil and gas properties. The Company follows the successful efforts method of accounting for its oil and gas properties. Under this method, drilling and completion costs, including lease and well equipment, intangible development costs, and operational support facilities in the field, associated with development wells are capitalized to proved oil and gas properties and are depleted on an asset group basis (properties aggregated based on geographical and geological characteristics) using the units-of-production method based on estimated proved developed oil and gas reserves. The calculation of depletion expense takes into consideration estimated asset retirement costs, net of estimated salvage values. Proved oil and gas properties are assessed for impairment on an asset group basis whenever events and circumstances indicate that there could be a possible decline in the recoverability of the net book value of such property. The Company estimates the expected future net cash flows of its proved oil and gas properties and compares these undiscounted cash flows to the net book value of the proved oil and gas properties to determine if the net book value is recoverable. If the net book value exceeds the estimated undiscounted future net cash flows, the Company will recognize an impairment to reduce the net book value of the proved oil and gas properties to fair value. The factors used to determine fair value include, but are not limited to, estimates of reserves, future commodity prices, future production estimates, estimated future development costs and operating costs, and discount rates, which are based on a weighted average cost of capital. There were no impairments of proved oil and gas properties for the three months ended March 31, 2023 or 2022. The partial sale of a proved property within an existing asset group is accounted for as a normal retirement and no net gain or loss on divestiture is recognized as long as the treatment does not significantly alter the units-of-production depletion rate. The sale of a partial interest in an individual proved property is accounted for as a recovery of cost. A net gain or loss on divestiture is recognized in the consolidated statements of operations for all other sales of proved properties. Unproved oil and gas properties. Unproved oil and gas properties consist of costs incurred in obtaining a mineral interest or a right in a property such as a lease, in addition to broker fees, recording fees and other similar costs. Leasehold costs are classified as unproved until proved reserves are discovered on or otherwise attributed to the property, at which time the related unproved oil and gas property costs are reclassified to proved oil and gas properties and depleted on an asset group basis using the units-of-production method based on estimated total proved oil and gas reserves. The Company evaluates significant unproved oil and gas property costs for impairment based on remaining lease term, drilling results, reservoir performance, seismic interpretation or changes in future plans to develop acreage. Unproved oil and gas properties that are not individually significant are aggregated by asset group, and the portion of such costs estimated to be nonproductive prior to lease expiration is amortized over the average holding period. The estimate of what could be nonproductive is based on the Company’s historical experience or other information, including current drilling plans and existing geological data. Impairment and amortization of unproved oil and gas properties are recognized as “Impairment of oil and gas properties” in the consolidated statements of operations. Exploratory. Exploratory costs, including personnel and other internal costs, geological and geophysical expenses and delay rentals for oil and gas leases, are expensed as incurred. Exploratory well costs are initially capitalized pending the determination of whether proved reserves have been discovered. If proved reserves are discovered, exploratory well costs are capitalized as proved oil and gas properties. If proved reserves are not found, exploratory well costs are expensed as dry holes. The application of the successful efforts method of accounting requires management’s judgment to determine the proper designation of wells as either development or exploratory, which will ultimately determine the proper accounting treatment of costs of dry holes. Capitalized interest. The Company capitalizes interest on expenditures made in connection with exploration and development projects that meet certain thresholds and are not subject to current amortization. For projects that meet these thresholds, interest is capitalized only for the period that activities are in process to bring the projects to their intended use. Capitalized interest cannot exceed interest expense for the period capitalized. During the three months ended March 31, 2023 and 2022, the Company did not have any projects that met the thresholds, therefore, had no capitalized interest. |
Subsequent Events | Subsequent EventsThe Company evaluates subsequent events through the date the financial statements are issued. See “Note 16 — Subsequent Events” for further discussion |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company recognizes oil, natural gas, and NGL production revenue at the point in time when control of the product transfers to the purchaser, which differs depending on the applicable contractual terms. Transfer of control also drives the presentation of gathering, transportation and processing expenses in the consolidated statements of operations. See “Note 3 — Revenue Recognition” of the Notes to Consolidated Financial Statements in the 2022 Annual Report for more information regarding the types of contracts under which oil, natural gas, and NGL production revenue is generated. Oil and Gas Purchase and Sale Arrangements The Company proactively evaluates development plans and looks to enter into pipeline transportation contracts to mitigate market exposures and help ensure certainty of flow for its oil and gas production, in some cases multiple years in advance of development. Additionally, as the Company looks to optimize its operations and reduce exposures, in certain instances, the Company purchases oil and gas from third parties which is utilized to fulfill portions of its pipeline commitments. Sales of purchased oil and gas represent revenues the Company receives from sales of commodities purchased from a third-party. The Company recognizes these revenues and the purchase of the third-party commodities, as well as any costs associated with the purchase, on a gross basis, as the Company acts as a principal in these transactions by assuming control of the purchased commodity before it is transferred to the customer. Accounts Receivable from Revenues from Contracts with Customers |
Change in Accounting Principle
Change in Accounting Principle (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Effects of the Change to the Successful Efforts Method | The following tables present the effects of the change to the successful efforts method in the consolidated balance sheets: As of March 31, 2023 Under Changes Under Successful Efforts (In thousands) Oil and natural gas properties: Proved properties $10,647,471 ($1,107,849) $9,539,622 Accumulated depreciation, depletion, amortization and impairments (6,464,299) 1,924,204 (4,540,095) Unproved properties 1,744,649 (517,074) 1,227,575 Total oil and gas properties, net 5,927,821 299,281 6,227,102 Deferred income taxes 72,323 (26,654) 45,669 Total assets $6,379,038 $272,627 $6,651,665 Stockholders’ equity: Accumulated deficit (649,018) 272,627 (376,391) Total stockholders' equity 3,377,131 272,627 3,649,758 Total liabilities and stockholders' equity $6,379,038 $272,627 $6,651,665 As of December 31, 2022 Under Changes Under Successful Efforts (In thousands) Oil and natural gas properties: Proved properties $10,367,478 ($1,099,343) $9,268,135 Accumulated depreciation, depletion, amortization and impairments (6,343,875) 1,927,269 (4,416,606) Unproved properties 1,711,306 (485,538) 1,225,768 Total oil and gas properties, net 5,734,909 342,388 6,077,297 Total assets $6,146,081 $342,388 $6,488,469 Deferred income taxes (1) 4,279 2,029 6,308 Stockholders’ equity: Accumulated deficit (937,388) 340,359 (597,029) Total stockholders' equity 3,085,422 340,359 3,425,781 Total liabilities and stockholders' equity $6,146,081 $342,388 $6,488,469 (1) Included in “Other long-term liabilities” in the consolidated balance sheets. The following tables present the effects of the change to the successful efforts method in the consolidated statements of operations: Three Months Ended March 31, 2023 Under Changes Under Successful Efforts (In thousands, except per share data) Operating Expenses: Exploration $— $2,232 $2,232 Depreciation, depletion and amortization 122,900 3,065 125,965 General and administrative 17,140 10,658 27,798 Income From Operations 200,145 (15,955) 184,190 Other Expenses: Interest expense 19,153 27,153 46,306 Income Before Income Taxes 213,050 (43,107) 169,943 Income tax benefit (expense) 75,320 (24,625) 50,695 Net Income $288,370 ($67,732) $220,638 Net Income Per Common Share: Basic $4.68 $3.58 Diluted $4.66 $3.57 Three Months Ended March 31, 2022 Under Changes Under Successful Efforts (In thousands, except per share data) Operating Expenses: Exploration $— $1,885 $1,885 Depreciation, depletion and amortization 102,979 10,664 113,643 General and administrative 17,121 9,936 27,057 Income From Operations 419,297 (22,485) 396,812 Other Expenses: Interest expense 21,558 25,538 47,096 Income (Loss) Before Income Taxes 40,221 (48,023) (7,802) Income tax benefit (expense) (484) 571 87 Net Income (Loss) $39,737 ($47,452) ($7,715) Net Income (Loss) Per Common Share: Basic $0.65 ($0.13) Diluted $0.64 ($0.13) The following tables present the effects of the change to the successful efforts method in the consolidated statements of cash flows: Three Months Ended March 31, 2023 Under Changes Under Successful Efforts (In thousands) Cash flows from operating activities: Net income $288,370 ($67,732) $220,638 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 122,900 3,065 125,965 Amortization of non-cash debt related items, net 1,088 1,543 2,631 Deferred income tax benefit (76,602) 24,625 (51,977) Non-cash expense related to share-based awards 757 1,124 1,881 Net cash provided by operating activities 285,288 (37,375) 247,913 Cash flows from investing activities: Capital expenditures (240,043) 35,143 (204,900) Acquisition of oil and gas properties (8,223) 2,232 (5,991) Net cash used in investing activities (247,284) 37,375 (209,909) Net change in cash and cash equivalents (25) — (25) Balance, beginning of period 3,395 — 3,395 Balance, end of period $3,370 $— $3,370 Three Months Ended March 31, 2022 Under Changes Under Successful Efforts (In thousands) Cash flows from operating activities: Net income (loss) $39,737 ($47,452) ($7,715) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 102,979 10,664 113,643 Amortization of non-cash debt related items, net 1,716 2,033 3,749 Non-cash expense related to share-based awards 4,166 1,877 6,043 Changes in current assets and liabilities: Accounts payable and accrued liabilities (12,987) (571) (13,558) Net cash provided by operating activities 281,270 (33,449) 247,821 Cash flows from investing activities: Capital expenditures (201,478) 33,208 (168,270) Acquisition of oil and gas properties (9,409) 241 (9,168) Net cash used in investing activities (221,939) 33,449 (188,490) Net change in cash and cash equivalents (5,732) — (5,732) Balance, beginning of period 9,882 — 9,882 Balance, end of period $4,150 $— $4,150 The following tables present the effects of the change to the successful efforts method in the consolidated statements of stockholders’ equity: As of March 31, 2023 Under Changes Under Successful Efforts (In thousands) Accumulated deficit ($649,018) $272,627 ($376,391) Total stockholders’ equity $3,377,131 $272,627 $3,649,758 As of December 31, 2022 Under Changes Under Successful Efforts (In thousands) Accumulated deficit ($937,388) $340,359 ($597,029) Total stockholders’ equity $3,085,422 $340,359 $3,425,781 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | As of March 31, 2023 and December 31, 2022, total property and equipment, net consisted of the following: March 31, 2023 December 31, 2022* Oil and natural gas properties, successful efforts accounting method (In thousands) Proved properties $9,539,622 $9,268,135 Accumulated depreciation, depletion, amortization and impairments (4,540,095) (4,416,606) Proved properties, net 4,999,527 4,851,529 Unproved properties 1,227,575 1,225,768 Total oil and natural gas properties, net $6,227,102 $6,077,297 Other property and equipment $43,486 $40,530 Accumulated depreciation (14,767) (14,378) Other property and equipment, net $28,719 $26,152 * Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended March 31, 2023 2022* (In thousands, except per share amounts) Net Income (Loss) $220,638 ($7,715) Basic weighted average common shares outstanding 61,625 61,487 Dilutive impact of restricted stock units 249 — Diluted weighted average common shares outstanding 61,874 61,487 Net Income (Loss) Per Common Share Basic $3.58 ($0.13) Diluted $3.57 ($0.13) Restricted stock units (1) 42 980 Warrants (1) 481 481 * Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. (1) 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, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings | The Company’s borrowings consisted of the following: March 31, 2023 December 31, 2022 (In thousands) 8.25% Senior Notes due 2025 $187,238 $187,238 6.375% Senior Notes due 2026 320,783 320,783 Senior Secured Revolving Credit Facility due 2027 465,300 503,000 8.0% Senior Notes due 2028 650,000 650,000 7.5% Senior Notes due 2030 600,000 600,000 Total principal outstanding 2,223,321 2,261,021 Unamortized premium on 8.25% Senior Notes 1,524 1,715 Unamortized deferred financing costs for Senior Notes (20,331) (21,441) Total carrying value of borrowings (1) $2,204,514 $2,241,295 (1) Excludes unamortized deferred financing costs related to the Company’s senior secured revolving credit facility of $17.2 million and $18.8 million as of March 31, 2023 and December 31, 2022, respectively, which are classified in “Deferred financing costs” in the consolidated balance sheets. |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Offsetting Assets | The following presents the impact of this presentation to the Company’s recognized assets and liabilities for the periods indicated: As of March 31, 2023 Presented without As Presented with Effects of Netting Effects of Netting Effects of Netting (In thousands) Derivative Assets Fair value of derivatives - current $40,838 ($15,077) $25,761 Other assets, net $307 ($307) $— Derivative Liabilities Fair value of derivatives - current ($15,647) $15,077 ($570) Fair value of derivatives - non-current ($6,901) $307 ($6,594) As of December 31, 2022 Presented without As Presented with Effects of Netting Effects of Netting Effects of Netting (In thousands) Derivative Assets Fair value of derivatives - current $51,984 ($30,652) $21,332 Other assets, net $1,343 ($889) $454 Derivative Liabilities Fair value of derivatives - current ($46,849) $30,652 ($16,197) Fair value of derivatives - non-current ($14,304) $889 ($13,415) |
Schedule of Offsetting Liabilities | The following presents the impact of this presentation to the Company’s recognized assets and liabilities for the periods indicated: As of March 31, 2023 Presented without As Presented with Effects of Netting Effects of Netting Effects of Netting (In thousands) Derivative Assets Fair value of derivatives - current $40,838 ($15,077) $25,761 Other assets, net $307 ($307) $— Derivative Liabilities Fair value of derivatives - current ($15,647) $15,077 ($570) Fair value of derivatives - non-current ($6,901) $307 ($6,594) As of December 31, 2022 Presented without As Presented with Effects of Netting Effects of Netting Effects of Netting (In thousands) Derivative Assets Fair value of derivatives - current $51,984 ($30,652) $21,332 Other assets, net $1,343 ($889) $454 Derivative Liabilities Fair value of derivatives - current ($46,849) $30,652 ($16,197) Fair value of derivatives - non-current ($14,304) $889 ($13,415) |
Schedule of Gain or Loss on Derivative Contracts | The components of “(Gain) loss on derivative contracts” are as follows for the respective periods: Three Months Ended March 31, 2023 2022 (In thousands) (Gain) loss on oil derivatives ($23,344) $325,348 (Gain) loss on natural gas derivatives (2,301) 28,181 Loss on NGL derivatives — 4,771 (Gain) loss on derivative contracts ($25,645) $358,300 |
Schedule of Derivative Instruments | The components of “Cash received (paid) for commodity derivative settlements, net” and “Cash received (paid) for settlements of contingent consideration arrangements, net” are as follows for the respective periods: Three Months Ended March 31, 2023 2022 (In thousands) Cash flows from operating activities Cash paid on oil derivatives ($7,398) ($95,353) Cash received (paid) on natural gas derivatives 6,619 (4,644) Cash paid on NGL derivatives — (1,528) Cash paid for commodity derivative settlements, net ($779) ($101,525) Cash received for settlements of contingent consideration arrangements, net (1) $— $6,492 Cash flows from investing activities Cash paid for settlement of contingent consideration arrangement (1) $— ($19,171) Cash flows from financing activities Cash received for settlement of contingent consideration arrangement (1) $— $8,512 (1) See “Note 8 — Derivative Instruments and Hedging Activities” of the Notes to Consolidated Financial Statements in our 2022 Annual Report for discussion of the Company’s contingent consideration arrangements. |
Schedule of Outstanding Oil and Natural Gas Derivative Contracts | Listed in the tables below are the outstanding oil and natural gas derivative contracts as of March 31, 2023: For the Remainder For the Full Year Oil Contracts (WTI) 2023 2024 Swap Contracts Total volume (Bbls) 866,500 — Weighted average price per Bbl $80.41 $— Collar Contracts (Three-Way Collars) Total volume (Bbls) 1,375,000 — Weighted average price per Bbl Ceiling (short call) $90.00 $— Floor (long put) $70.00 $— Floor (short put) $50.00 $— Collar Contracts (Two-Way Collars) Total volume (Bbls) 1,555,000 — Weighted average price per Bbl Ceiling (short call) $86.35 $— Floor (long put) $71.70 $— Short Call Swaption Contracts (1) Total volume (Bbls) — 1,830,000 Weighted average price per Bbl $— $80.30 (1) The 2024 short call swaption contracts have exercise expiration dates of December 29, 2023. For the Remainder For the Full Year Natural Gas Contracts (Henry Hub) 2023 2024 Swap Contracts Total volume (MMBtu) 5,520,000 — Weighted average price per MMBtu $3.70 $— Collar Contracts Total volume (MMBtu) 4,900,000 1,820,000 Weighted average price per MMBtu Ceiling (short call) $5.62 $6.00 Floor (long put) $3.56 $3.00 Natural Gas Contracts (Waha Basis Differential) Swap Contracts Total volume (MMBtu) 7,030,000 3,660,000 Weighted average price per MMBtu ($1.06) ($1.05) Natural Gas Contracts (HSC Basis Differential) Swap Contracts Total volume (MMBtu) 8,250,000 14,640,000 Weighted average price per MMBtu ($0.29) ($0.42) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Financial Instruments at Carrying and Fair Value | The carrying amount of borrowings outstanding under the Credit Facility approximates fair value as the borrowings bear interest at variable rates and are reflective of market rates. The following table presents the principal amounts of the Senior Notes with the fair values measured using quoted secondary market trading prices which are designated as Level 2 within the valuation hierarchy. March 31, 2023 December 31, 2022 Principal Amount Fair Value Principal Amount Fair Value (In thousands) 8.25% Senior Notes $187,238 $186,459 $187,238 $186,719 6.375% Senior Notes 320,783 305,623 320,783 301,732 8.0% Senior Notes 650,000 644,111 650,000 616,935 7.5% Senior Notes 600,000 563,682 600,000 550,812 Total $1,758,021 $1,699,875 $1,758,021 $1,656,198 |
Fair Value of Assets Measured on Recurring Basis | The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022: March 31, 2023 Level 1 Level 2 Level 3 (In thousands) Commodity derivative assets $— $25,761 $— Commodity derivative liabilities $— ($7,164) $— December 31, 2022 Level 1 Level 2 Level 3 (In thousands) Commodity derivative assets $— $21,786 $— Commodity derivative liabilities $— ($29,612) $— |
Fair Value of Liabilities Measured on Recurring Basis | The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022: March 31, 2023 Level 1 Level 2 Level 3 (In thousands) Commodity derivative assets $— $25,761 $— Commodity derivative liabilities $— ($7,164) $— December 31, 2022 Level 1 Level 2 Level 3 (In thousands) Commodity derivative assets $— $21,786 $— Commodity derivative liabilities $— ($29,612) $— |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Restricted Stock Unit Activity | The following table summarizes activity for restricted stock units that may be settled in common stock (“RSU Equity Awards”) for the three months ended March 31, 2023: Three Months Ended March 31, 2023 RSU Equity Awards Weighted Average Grant Date Unvested, beginning of the period 800 $44.79 Granted 317 $34.02 Vested (6) $49.23 Forfeited (21) $43.81 Unvested, end of the period 1,090 $41.65 |
Schedule of Share-based Compensation Expense | The following table presents share-based compensation expense (benefit), net for the periods indicated: Three Months Ended March 31, 2023 2022* (In thousands) RSU Equity Awards $3,626 $3,366 Cash-Settled Awards (1,745) 2,677 Total share-based compensation expense (benefit), net $1,881 $6,043 * Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, Net | March 31, 2023 December 31, 2022 (In thousands) Oil and natural gas receivables $153,362 $174,107 Joint interest receivables 22,575 16,778 Other receivables 36,204 48,277 Total 212,141 239,162 Allowance for credit losses (2,034) (2,034) Total accounts receivable, net $210,107 $237,128 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | March 31, 2023 December 31, 2022 (In thousands) Accounts payable $199,268 $191,133 Revenues and royalties payable 234,379 244,408 Accrued capital expenditures 85,540 58,395 Accrued interest 31,736 42,297 Total accounts payable and accrued liabilities $550,923 $536,233 |
Supplemental Cash Flow (Tables)
Supplemental Cash Flow (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Three Months Ended March 31, 2023 2022* (In thousands) Supplemental cash flow information: Interest paid $54,233 $54,930 Income taxes paid (1) — — Non-cash investing and financing activities: Change in accrued capital expenditures $67,460 ($8,897) Change in asset retirement costs 568 289 * Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. (1) The Company did not pay or receive a refund for any federal income tax for the periods presented above. For the three months ended March 31, 2023 and 2022, the Company received refunds of $0.2 million and $2.8 million, respectively, for state income taxes. |
Change in Accounting Principl_2
Change in Accounting Principle - Schedule of Effects of the Change to the Successful Efforts Method in the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | [2] | Dec. 31, 2021 | |
Oil and natural gas properties, successful efforts accounting method | ||||||
Accumulated depreciation, depletion, amortization and impairments | $ (4,540,095) | $ (4,416,606) | ||||
Unproved properties | 1,227,575 | 1,225,768 | [1] | |||
Total oil and natural gas properties, net | 6,227,102 | 6,077,297 | [1] | |||
Deferred income taxes | 45,669 | 0 | [1] | |||
Total assets | 6,651,665 | 6,488,469 | [1] | |||
Stockholders’ equity: | ||||||
Accumulated deficit | (376,391) | (597,029) | [1] | |||
Total stockholders’ equity | 3,649,758 | 3,425,781 | [1],[2] | $ 2,397,870 | $ 1,865,768 | |
Total liabilities and stockholders’ equity | 6,651,665 | 6,488,469 | [1] | |||
Proved properties | 9,539,622 | 9,268,135 | ||||
Other Noncurrent Liabilities | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Deferred tax liability | 6,308 | |||||
Under Full Cost | ||||||
Oil and natural gas properties, successful efforts accounting method | ||||||
Accumulated depreciation, depletion, amortization and impairments | (6,464,299) | (6,343,875) | ||||
Unproved properties | 1,744,649 | 1,711,306 | ||||
Total oil and natural gas properties, net | 5,927,821 | 5,734,909 | ||||
Deferred income taxes | 72,323 | |||||
Total assets | 6,379,038 | 6,146,081 | ||||
Stockholders’ equity: | ||||||
Accumulated deficit | (649,018) | (937,388) | ||||
Total stockholders’ equity | 3,377,131 | 3,085,422 | ||||
Total liabilities and stockholders’ equity | 6,379,038 | 6,146,081 | ||||
Proved properties | 10,647,471 | 10,367,478 | ||||
Under Full Cost | Other Noncurrent Liabilities | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Deferred tax liability | 4,279 | |||||
Changes | ||||||
Oil and natural gas properties, successful efforts accounting method | ||||||
Accumulated depreciation, depletion, amortization and impairments | 1,924,204 | 1,927,269 | ||||
Unproved properties | (517,074) | (485,538) | ||||
Total oil and natural gas properties, net | 299,281 | 342,388 | ||||
Deferred income taxes | (26,654) | |||||
Total assets | 272,627 | 342,388 | ||||
Stockholders’ equity: | ||||||
Accumulated deficit | 272,627 | 340,359 | ||||
Total stockholders’ equity | 272,627 | 340,359 | ||||
Total liabilities and stockholders’ equity | 272,627 | 342,388 | ||||
Proved properties | $ (1,107,849) | (1,099,343) | ||||
Changes | Other Noncurrent Liabilities | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Deferred tax liability | $ 2,029 | |||||
[1]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information.[2]Financial information for prior periods has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Change in Accounting Principl_3
Change in Accounting Principle - Schedule of Effects of the Change to the Successful Efforts Method in the Consolidated Statements of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Operating Expenses: | |||
Exploration | $ 2,232 | $ 1,885 | [1] |
Depreciation, depletion and amortization | 125,965 | 113,643 | [1] |
General and administrative | 27,798 | 27,057 | [1] |
Income From Operations | 184,190 | 396,812 | [1] |
Other Expenses: | |||
Interest expense | 46,306 | 47,096 | [1] |
Income (Loss) Before Income Taxes | 169,943 | (7,802) | [1] |
Income tax benefit (expense) | 50,695 | 87 | [1] |
Net Income (Loss) | $ 220,638 | $ (7,715) | [1],[2] |
Net Income Per Common Share: | |||
Basic (in dollars per share) | $ 3.58 | $ (0.13) | [1] |
Diluted (in dollars per share) | $ 3.57 | $ (0.13) | [1] |
Under Full Cost | |||
Operating Expenses: | |||
Exploration | $ 0 | $ 0 | |
Depreciation, depletion and amortization | 122,900 | 102,979 | |
General and administrative | 17,140 | 17,121 | |
Income From Operations | 200,145 | 419,297 | |
Other Expenses: | |||
Interest expense | 19,153 | 21,558 | |
Income (Loss) Before Income Taxes | 213,050 | 40,221 | |
Income tax benefit (expense) | 75,320 | (484) | |
Net Income (Loss) | $ 288,370 | $ 39,737 | |
Net Income Per Common Share: | |||
Basic (in dollars per share) | $ 4.68 | $ 0.65 | |
Diluted (in dollars per share) | $ 4.66 | $ 0.64 | |
Changes | |||
Operating Expenses: | |||
Exploration | $ 2,232 | $ 1,885 | |
Depreciation, depletion and amortization | 3,065 | 10,664 | |
General and administrative | 10,658 | 9,936 | |
Income From Operations | (15,955) | (22,485) | |
Other Expenses: | |||
Interest expense | 27,153 | 25,538 | |
Income (Loss) Before Income Taxes | (43,107) | (48,023) | |
Income tax benefit (expense) | (24,625) | 571 | |
Net Income (Loss) | $ (67,732) | $ (47,452) | |
[1]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information.[2]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information |
Change in Accounting Principl_4
Change in Accounting Principle - Schedule of Effects of the Change to the Successful Efforts Method in the Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Cash flows from operating activities: | |||
Net income (loss) | $ 220,638 | $ (7,715) | [1],[2] |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, depletion and amortization | 125,965 | 113,643 | [1] |
Amortization of non-cash debt related items, net | 2,631 | 3,749 | [1] |
Deferred income tax benefit | (51,977) | 0 | [1] |
Non-cash expense related to share-based awards | 1,881 | 6,043 | [1] |
Accounts payable and accrued liabilities | (46,018) | (13,558) | [1] |
Net cash provided by operating activities | 247,913 | 247,821 | [1] |
Cash flows from investing activities: | |||
Capital expenditures | (204,900) | (168,270) | [1] |
Acquisition of oil and gas properties | (5,991) | (9,168) | [1] |
Net cash used in investing activities | (209,909) | (188,490) | [1] |
Net change in cash and cash equivalents | (25) | (5,732) | [1] |
Balance, beginning of period | 3,395 | 9,882 | [1] |
Balance, end of period | 3,370 | 4,150 | [1] |
Under Full Cost | |||
Cash flows from operating activities: | |||
Net income (loss) | 288,370 | 39,737 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, depletion and amortization | 122,900 | 102,979 | |
Amortization of non-cash debt related items, net | 1,088 | 1,716 | |
Deferred income tax benefit | (76,602) | ||
Non-cash expense related to share-based awards | 757 | 4,166 | |
Accounts payable and accrued liabilities | (12,987) | ||
Net cash provided by operating activities | 285,288 | 281,270 | |
Cash flows from investing activities: | |||
Capital expenditures | (240,043) | (201,478) | |
Acquisition of oil and gas properties | (8,223) | (9,409) | |
Net cash used in investing activities | (247,284) | (221,939) | |
Net change in cash and cash equivalents | (25) | (5,732) | |
Balance, beginning of period | 3,395 | 9,882 | |
Balance, end of period | 3,370 | 4,150 | |
Changes | |||
Cash flows from operating activities: | |||
Net income (loss) | (67,732) | (47,452) | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, depletion and amortization | 3,065 | 10,664 | |
Amortization of non-cash debt related items, net | 1,543 | 2,033 | |
Deferred income tax benefit | 24,625 | ||
Non-cash expense related to share-based awards | 1,124 | 1,877 | |
Accounts payable and accrued liabilities | (571) | ||
Net cash provided by operating activities | (37,375) | (33,449) | |
Cash flows from investing activities: | |||
Capital expenditures | 35,143 | 33,208 | |
Acquisition of oil and gas properties | 2,232 | 241 | |
Net cash used in investing activities | 37,375 | 33,449 | |
Net change in cash and cash equivalents | 0 | 0 | |
Balance, beginning of period | 0 | 0 | |
Balance, end of period | $ 0 | $ 0 | |
[1]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information[2]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Change in Accounting Principl_5
Change in Accounting Principle - Schedule of Effects of the Change to the Successful Efforts Method in the Consolidated Statement of Statements of Stockholders' Equity (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | [2] | Dec. 31, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Accumulated deficit | $ (376,391) | $ (597,029) | [1] | |||
Total stockholders’ equity | 3,649,758 | 3,425,781 | [1],[2] | $ 2,397,870 | $ 1,865,768 | |
Under Full Cost | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Accumulated deficit | (649,018) | (937,388) | ||||
Total stockholders’ equity | 3,377,131 | 3,085,422 | ||||
Changes | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Accumulated deficit | 272,627 | 340,359 | ||||
Total stockholders’ equity | 272,627 | 340,359 | ||||
Accumulated deficit | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Accumulated deficit | (376,391) | (597,029) | ||||
Total stockholders’ equity | (376,391) | (597,029) | [2] | $ (1,624,187) | $ (2,147,204) | |
Accumulated deficit | Under Full Cost | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Accumulated deficit | (649,018) | (937,388) | ||||
Accumulated deficit | Changes | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Accumulated deficit | $ 272,627 | $ 340,359 | ||||
[1]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information.[2]Financial information for prior periods has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Accounts receivable | $ 212,141 | $ 239,162 |
Performance obligation, description of timing | The Company records revenue in the month production is delivered to the purchaser. However, settlement statements for sales may not be received for 30 to 90 days after the date production is delivered, and as a result, the Company is required to estimate the amount of production delivered to the purchaser and the price that will be received for the sale of the product. | |
Oil and Natural Gas | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Accounts receivable | $ 153,362 | $ 174,107 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | |
Oil and natural gas properties, successful efforts accounting method | |||
Proved properties | $ 9,539,622 | $ 9,268,135 | |
Accumulated depreciation, depletion, amortization and impairments | (4,540,095) | (4,416,606) | |
Proved properties, net | 4,999,527 | 4,851,529 | |
Unproved properties | 1,227,575 | 1,225,768 | |
Total oil and natural gas properties, net | 6,227,102 | 6,077,297 | |
Other property and equipment | 43,486 | 40,530 | |
Accumulated depreciation | (14,767) | (14,378) | |
Other property and equipment, net | $ 28,719 | $ 26,152 | [1] |
[1]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Earnings Per Share, Basic and Diluted [Line Items] | |||
Net Income (Loss) | $ 220,638 | $ (7,715) | [1],[2] |
Basic weighted average common shares outstanding (in shares) | 61,625 | 61,487 | [2] |
Diluted weighted average common shares outstanding (in shares) | 61,874 | 61,487 | |
Net Income (Loss) Per Common Share | |||
Basic (in dollars per share) | $ 3.58 | $ (0.13) | [2] |
Diluted (in dollars per share) | $ 3.57 | $ (0.13) | [2] |
Restricted Stock | |||
Earnings Per Share, Basic and Diluted [Line Items] | |||
Dilutive impact of restricted stock units and warrants (in shares) | 249 | 0 | |
Net Income (Loss) Per Common Share | |||
Shares excluded from the diluted earnings per share (in shares) | 42 | 980 | |
Warrants | |||
Net Income (Loss) Per Common Share | |||
Shares excluded from the diluted earnings per share (in shares) | 481 | 481 | |
[1]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information[2]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Borrowings - Schedule of Borrow
Borrowings - Schedule of Borrowings (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | |
Principal components: | |||
Total principal outstanding | $ 2,223,321 | $ 2,261,021 | |
Total carrying value of borrowings | 2,204,514 | 2,241,295 | [1] |
Deferred financing costs | 17,152 | 18,822 | [1] |
Secured debt | |||
Principal components: | |||
Unamortized deferred financing costs for Senior Notes | $ (20,331) | (21,441) | |
8.25% Senior Notes due 2025 | |||
Principal components: | |||
Debt instrument, interest rate, stated (as a percent) | 8.25% | ||
8.25% Senior Notes due 2025 | Unsecured debt | |||
Principal components: | |||
Total principal outstanding | $ 187,238 | 187,238 | |
Premium on senior unsecured notes, net of accumulated amortization | $ 1,524 | 1,715 | |
Debt instrument, interest rate, stated (as a percent) | 8.25% | ||
6.375% Senior Notes due 2026 | |||
Principal components: | |||
Debt instrument, interest rate, stated (as a percent) | 6.375% | ||
6.375% Senior Notes due 2026 | Unsecured debt | |||
Principal components: | |||
Total principal outstanding | $ 320,783 | 320,783 | |
Debt instrument, interest rate, stated (as a percent) | 6.375% | ||
Senior Secured Revolving Credit Facility due 2027 | Secured debt | |||
Principal components: | |||
Total principal outstanding | $ 465,300 | 503,000 | |
8.0% Senior Notes due 2028 | |||
Principal components: | |||
Total principal outstanding | $ 650,000 | 650,000 | |
8.0% Senior Notes due 2028 | Unsecured debt | |||
Principal components: | |||
Debt instrument, interest rate, stated (as a percent) | 8% | ||
7.5% Senior Notes due 2030 | |||
Principal components: | |||
Debt instrument, interest rate, stated (as a percent) | 7.50% | ||
7.5% Senior Notes due 2030 | Unsecured debt | |||
Principal components: | |||
Total principal outstanding | $ 600,000 | $ 600,000 | |
Debt instrument, interest rate, stated (as a percent) | 7.50% | ||
[1]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Borrowings - Senior Secured Rev
Borrowings - Senior Secured Revolving Credit Facility (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | May 01, 2023 | Dec. 31, 2022 | |
Line of Credit Facility [Line Items] | |||
Outstanding borrowings | $ 2,223,321,000 | $ 2,261,021,000 | |
Senior Secured Revolving Credit Facility due 2027 | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | 5,000,000,000 | ||
Credit facility borrowing base | 2,000,000,000 | ||
Elected commitment amount | $ 1,500,000,000 | ||
Interest rate at period end (as a percent) | 6.87% | ||
Letters of credit outstanding | $ 16,400,000 | ||
Senior Secured Revolving Credit Facility due 2027 | Subsequent Event | |||
Line of Credit Facility [Line Items] | |||
Credit facility borrowing base | $ 2,000,000,000 | ||
Senior Secured Revolving Credit Facility due 2027 | Secured debt | |||
Line of Credit Facility [Line Items] | |||
Outstanding borrowings | $ 465,300,000 | $ 503,000,000 | |
Senior Secured Revolving Credit Facility due 2027 | Federal Funds Rate | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, basis spread (as a percent) | 0.50% | ||
Senior Secured Revolving Credit Facility due 2027 | SOFR | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, basis spread (as a percent) | 0.10% | ||
Senior Secured Revolving Credit Facility due 2027 | Adjusted Base Rate | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, basis spread (as a percent) | 1% | ||
Senior Secured Revolving Credit Facility due 2027 | Minimum | |||
Line of Credit Facility [Line Items] | |||
Unused capacity, commitment fee (as a percent) | 0.375% | ||
Senior Secured Revolving Credit Facility due 2027 | Minimum | Base Rate | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, basis spread (as a percent) | 0.75% | ||
Senior Secured Revolving Credit Facility due 2027 | Minimum | SOFR | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, basis spread (as a percent) | 1.75% | ||
Senior Secured Revolving Credit Facility due 2027 | Maximum | |||
Line of Credit Facility [Line Items] | |||
Unused capacity, commitment fee (as a percent) | 0.50% | ||
Senior Secured Revolving Credit Facility due 2027 | Maximum | Base Rate | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, basis spread (as a percent) | 1.75% | ||
Senior Secured Revolving Credit Facility due 2027 | Maximum | SOFR | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, basis spread (as a percent) | 2.75% |
Borrowings - Covenants (Details
Borrowings - Covenants (Details) | Mar. 31, 2023 |
8.25% Senior Notes due 2025 | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate, stated (as a percent) | 8.25% |
8.25% Senior Notes due 2025 | Unsecured debt | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate, stated (as a percent) | 8.25% |
6.375% Senior Notes due 2026 | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate, stated (as a percent) | 6.375% |
6.375% Senior Notes due 2026 | Unsecured debt | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate, stated (as a percent) | 6.375% |
8.0% Senior Notes due 2028 | Unsecured debt | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate, stated (as a percent) | 8% |
7.5% Senior Notes due 2030 | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate, stated (as a percent) | 7.50% |
7.5% Senior Notes due 2030 | Unsecured debt | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate, stated (as a percent) | 7.50% |
Minimum | Senior Secured Revolving Credit Facility due 2027 | |
Debt Instrument [Line Items] | |
Leverage ratio | 100% |
Maximum | Senior Secured Revolving Credit Facility due 2027 | |
Debt Instrument [Line Items] | |
Leverage ratio | 350% |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Narrative (Details) | Mar. 31, 2023 counterparty |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Number of counterparties | 10 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Schedule of Derivative Instruments in Statement of Financial Position, Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | |
Offsetting Assets and Liabilities [Line Items] | |||
As Presented with Effects of Netting | $ 25,761 | $ 21,332 | [1] |
As Presented with Effects of Netting | (570) | (16,197) | [1] |
As Presented with Effects of Netting | $ (6,594) | $ (13,415) | [1] |
Derivative asset, noncurrent, statement of financial position [extensible enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent | |
Derivative liability, current, statement of financial position [extensible enumeration] | As Presented with Effects of Netting | As Presented with Effects of Netting | |
Derivative liability, noncurrent, statement of financial position [extensible enumeration] | As Presented with Effects of Netting | As Presented with Effects of Netting | |
Not Designated as Hedging Instrument | |||
Offsetting Assets and Liabilities [Line Items] | |||
As Presented with Effects of Netting | $ 25,761 | $ 21,332 | |
As Presented with Effects of Netting | 0 | 454 | |
As Presented with Effects of Netting | (570) | (16,197) | |
As Presented with Effects of Netting | (6,594) | (13,415) | |
Not Designated as Hedging Instrument | Derivative Asset, Current | |||
Offsetting Assets and Liabilities [Line Items] | |||
Presented without Effects of Netting | 40,838 | 51,984 | |
Effects of Netting | (15,077) | (30,652) | |
Not Designated as Hedging Instrument | Fair value of derivatives - Non-current | |||
Offsetting Assets and Liabilities [Line Items] | |||
Presented without Effects of Netting | 307 | 1,343 | |
Effects of Netting | (307) | (889) | |
Not Designated as Hedging Instrument | Derivative Liability, Current | |||
Offsetting Assets and Liabilities [Line Items] | |||
Presented without Effects of Netting | (15,647) | (46,849) | |
Effects of Netting | 15,077 | 30,652 | |
Not Designated as Hedging Instrument | Derivative Liability, Noncurrent | |||
Offsetting Assets and Liabilities [Line Items] | |||
Presented without Effects of Netting | (6,901) | (14,304) | |
Effects of Netting | $ 307 | $ 889 | |
[1]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Schedule of Gain or Loss on Derivative Contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Gain) loss on derivative contracts | $ 25,645 | $ (358,300) | [1] |
Not Designated as Hedging Instrument | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Gain) loss on derivative contracts | (25,645) | 358,300 | |
Not Designated as Hedging Instrument | (Gain) loss on oil derivatives | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Gain) loss on derivative contracts | (23,344) | 325,348 | |
Not Designated as Hedging Instrument | (Gain) loss on natural gas derivatives | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Gain) loss on derivative contracts | (2,301) | 28,181 | |
Not Designated as Hedging Instrument | Loss on NGL derivatives | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Gain) loss on derivative contracts | $ 0 | $ 4,771 | |
[1]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities - Schedule of Cash Paid (Received) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Cash flows from operating activities | |||
Cash paid for commodity derivative settlements, net | $ (779) | $ (101,525) | [1] |
Not Designated as Hedging Instrument | Loss on contingent consideration arrangements | |||
Cash flows from operating activities | |||
Cash received for settlements of contingent consideration arrangements, net | 0 | 6,492 | |
Cash flows from investing activities | |||
Cash paid for settlement of contingent consideration arrangement | 0 | (19,171) | |
Cash flows from financing activities | |||
Cash received for settlement of contingent consideration arrangement | 0 | 8,512 | |
Commodity - Oil | Not Designated as Hedging Instrument | |||
Cash flows from operating activities | |||
Cash paid for commodity derivative settlements, net | (7,398) | (95,353) | |
Natural gas | Not Designated as Hedging Instrument | |||
Cash flows from operating activities | |||
Cash paid for commodity derivative settlements, net | 6,619 | (4,644) | |
Natural gas liquids | Not Designated as Hedging Instrument | |||
Cash flows from operating activities | |||
Cash paid for commodity derivative settlements, net | $ 0 | $ (1,528) | |
[1]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information |
Derivative Instruments and He_7
Derivative Instruments and Hedging Activities - Schedule of Outstanding Oil and Natural Gas Derivative Contracts (Details) - Forecast - Not Designated as Hedging Instrument | 9 Months Ended | 12 Months Ended |
Dec. 31, 2023 MMBTU $ / barrel $ / MMBTU bbl | Dec. 31, 2024 MMBTU $ / MMBTU $ / barrel bbl | |
Commodity - Oil | ||
Derivative [Line Items] | ||
Total volume (MMBtu) | bbl | 866,500 | 0 |
Weighted average price (in dollars per share) | 80.41 | 0 |
Commodity - Oil | Call option | ||
Derivative [Line Items] | ||
Total volume (MMBtu) | bbl | 0 | 1,830,000 |
Weighted average price (in dollars per share) | 0 | 80.30 |
Commodity - Oil | Collar Contracts (Three-Way Collars) | ||
Derivative [Line Items] | ||
Total volume (MMBtu) | bbl | 1,375,000 | 0 |
Commodity - Oil | Collar Contracts (Three-Way Collars) | Call option | Short | ||
Derivative [Line Items] | ||
Weighted average price (in dollars per share) | 90 | 0 |
Commodity - Oil | Collar Contracts (Three-Way Collars) | Put option | Short | ||
Derivative [Line Items] | ||
Weighted average price (in dollars per share) | 50 | 0 |
Commodity - Oil | Collar Contracts (Three-Way Collars) | Put option | Long | ||
Derivative [Line Items] | ||
Weighted average price (in dollars per share) | 70 | 0 |
Commodity - Oil | Collar Contracts | ||
Derivative [Line Items] | ||
Total volume (MMBtu) | bbl | 1,555,000 | 0 |
Commodity - Oil | Collar Contracts | Call option | Short | ||
Derivative [Line Items] | ||
Weighted average price (in dollars per share) | 86.35 | 0 |
Commodity - Oil | Collar Contracts | Put option | Long | ||
Derivative [Line Items] | ||
Weighted average price (in dollars per share) | 71.70 | 0 |
Natural gas | ||
Derivative [Line Items] | ||
Total volume (MMBtu) | MMBTU | 5,520,000 | 0 |
Weighted average price per MMBtu (in dollars per MMBtu) | $ / MMBTU | 3.70 | 0 |
Natural gas | Collar Contracts | ||
Derivative [Line Items] | ||
Total volume (MMBtu) | MMBTU | 4,900,000 | 1,820,000 |
Natural gas | Collar Contracts | Call option | Short | ||
Derivative [Line Items] | ||
Weighted average price per MMBtu (in dollars per MMBtu) | $ / MMBTU | 5.62 | 6 |
Natural gas | Collar Contracts | Put option | Long | ||
Derivative [Line Items] | ||
Weighted average price per MMBtu (in dollars per MMBtu) | $ / MMBTU | 3.56 | 3 |
Natural gas | Natural Gas Contracts (Waha Basis Differential) | ||
Derivative [Line Items] | ||
Total volume (MMBtu) | MMBTU | 7,030,000 | 3,660,000 |
Weighted average price per MMBtu (in dollars per MMBtu) | $ / MMBTU | 1.06 | 1.05 |
Natural gas | Natural Gas Contracts (HSC Basis Differential) | ||
Derivative [Line Items] | ||
Total volume (MMBtu) | MMBTU | 8,250,000 | 14,640,000 |
Weighted average price per MMBtu (in dollars per MMBtu) | $ / MMBTU | 0.29 | 0.42 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Instruments at Carrying and Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
8.25% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, interest rate, stated (as a percent) | 8.25% | |
6.375% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, interest rate, stated (as a percent) | 6.375% | |
8.0% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, interest rate, stated (as a percent) | 8% | |
7.5% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, interest rate, stated (as a percent) | 7.50% | |
Unsecured debt | 8.25% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, interest rate, stated (as a percent) | 8.25% | |
Unsecured debt | 6.375% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, interest rate, stated (as a percent) | 6.375% | |
Unsecured debt | 7.5% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, interest rate, stated (as a percent) | 7.50% | |
Principal Amount | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total | $ 1,758,021 | $ 1,758,021 |
Principal Amount | Level 2 | Unsecured debt | 8.25% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior notes | 187,238 | 187,238 |
Principal Amount | Level 2 | Unsecured debt | 6.375% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior notes | 320,783 | 320,783 |
Principal Amount | Level 2 | Unsecured debt | 8.0% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior notes | 650,000 | 650,000 |
Principal Amount | Level 2 | Unsecured debt | 7.5% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior notes | 600,000 | 600,000 |
Fair Value | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total | 1,699,875 | 1,656,198 |
Fair Value | Level 2 | Unsecured debt | 8.25% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior notes | 186,459 | 186,719 |
Fair Value | Level 2 | Unsecured debt | 6.375% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior notes | 305,623 | 301,732 |
Fair Value | Level 2 | Unsecured debt | 8.0% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior notes | 644,111 | 616,935 |
Fair Value | Level 2 | Unsecured debt | 7.5% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior notes | $ 563,682 | $ 550,812 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Assets and Liabilities Measured on Recurring Basis (Details) - Recurring Basis - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Level 1 | ||
Derivative Asset [Abstract] | ||
Commodity derivative assets | $ 0 | $ 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Commodity derivative liabilities | 0 | 0 |
Level 2 | ||
Derivative Asset [Abstract] | ||
Commodity derivative assets | 25,761 | 21,786 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Commodity derivative liabilities | (7,164) | (29,612) |
Level 3 | ||
Derivative Asset [Abstract] | ||
Commodity derivative assets | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Commodity derivative liabilities | $ 0 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income taxes at statutory tax rate, percent | 21% | |
Effective income tax rate (in percent) | 30% | (1.00%) |
Deferred tax assets, valuation allowance | $ 52 |
Share-Based Compensation - RSU
Share-Based Compensation - RSU Equity Awards (Details) - RSU Equity Awards shares in Thousands | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
RSU Equity Awards | |
Unvested, beginning of the period (in shares) | shares | 800 |
Granted (in shares) | shares | 317 |
Vested (in shares) | shares | (6) |
Forfeited (in shares) | shares | (21) |
Unvested, end of the period (in shares) | shares | 1,090 |
Weighted Average Grant Date Fair Value | |
Unvested, beginning of the period (in dollars per share) | $ / shares | $ 44.79 |
Granted (in dollars per share) | $ / shares | 34.02 |
Vested (in dollars per share) | $ / shares | 49.23 |
Forfeited (in dollars per share) | $ / shares | 43.81 |
Unvested, end of the period (in dollars per share) | $ / shares | $ 41.65 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based payment arrangement, cash used to settle award | $ 4.2 | $ 6.5 |
RSU Equity Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in dollars per share) | $ 34.02 | |
Grant date fair value | $ 0.2 | |
Unrecognized compensation costs | $ 30.2 | |
Period for recognition (in years) | 2 years 1 month 6 days |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 1,881 | $ 6,043 |
RSU Equity Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 3,626 | 3,366 |
Cash-Settled Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ (1,745) | $ 2,677 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total | $ 212,141 | $ 239,162 | |
Allowance for credit losses | (2,034) | (2,034) | |
Total accounts receivable, net | 210,107 | 237,128 | [1] |
Joint interest receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total | 22,575 | 16,778 | |
Other receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total | 36,204 | 48,277 | |
Oil and natural gas receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total | $ 153,362 | $ 174,107 | |
[1]Financial information for the prior period has been recast to reflect retrospective application of the successful efforts method of accounting. See “Note 2 - Summary of Significant Accounting Policies” for additional information. |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 199,268 | $ 191,133 |
Revenues and royalties payable | 234,379 | 244,408 |
Accrued capital expenditures | 85,540 | 58,395 |
Accrued interest | 31,736 | 42,297 |
Total accounts payable and accrued liabilities | $ 550,923 | $ 536,233 |
Supplemental Cash Flow (Details
Supplemental Cash Flow (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Supplemental cash flow information: | ||
Interest paid | $ 54,233 | $ 54,930 |
Income taxes paid | 0 | 0 |
Non-cash investing and financing activities: | ||
Change in accrued capital expenditures | 67,460 | (8,897) |
Change in asset retirement costs | 568 | 289 |
Proceeds from income tax refunds | $ 200 | $ 2,800 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) shares in Millions | May 03, 2023 | May 02, 2023 |
Subsequent Event [Line Items] | ||
Stock repurchase program, authorized amount | $ 300,000,000 | |
Percussion Petroleum Operating, LLC | ||
Subsequent Event [Line Items] | ||
Escrow deposit | $ 36,000,000 | |
Percent of limited liability company interests acquired | 100% | |
Payments to acquire businesses, gross | $ 265,000,000 | |
Shares of common stock issued in acquisition (in shares) | 210 | |
Contingent consideration | $ 62,500,000 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Eagle Ford | ||
Subsequent Event [Line Items] | ||
Purchase price | 655,000,000 | |
Contingent consideration | 45,000,000 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Eagle Ford | Ridgemar Energy Operating, LLC | ||
Subsequent Event [Line Items] | ||
Escrow deposit | $ 49,100,000 | |
Percent of limited liability company interests acquired | 100% |