Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 30, 2016 | |
Document And Company Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | DNR | |
Current Fiscal Year End Date | --12-31 | |
Entity Registrant Name | Denbury Resources Inc. | |
Entity Central Index Key | 945,764 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 350,593,956 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 8,252 | $ 2,812 |
Accrued production receivable | 95,934 | 100,413 |
Trade and other receivables, net | 87,228 | 87,924 |
Derivative assets | 72,798 | 142,846 |
Other current assets | 8,763 | 10,005 |
Total current assets | 272,975 | 344,000 |
Oil and natural gas properties (using full cost accounting) | ||
Proved properties | 10,296,792 | 10,245,195 |
Unevaluated properties | 902,990 | 894,948 |
CO2 properties | 1,186,607 | 1,187,458 |
Pipelines and plants | 2,293,102 | 2,293,219 |
Other property and equipment | 405,039 | 408,194 |
Less accumulated depletion, depreciation, amortization and impairment | (9,982,733) | (9,653,205) |
Net property and equipment | 5,101,797 | 5,375,809 |
Other assets | 163,775 | 166,555 |
Total assets | 5,538,547 | 5,886,364 |
Current liabilities | ||
Accounts payable and accrued liabilities | 186,715 | 253,197 |
Oil and gas production payable | 79,765 | 87,337 |
Derivative liabilities | 25,005 | 0 |
Current maturities of long-term debt | 32,917 | 32,481 |
Total current liabilities | 324,402 | 373,015 |
Long-term liabilities | ||
Long-term debt, net of current portion | 3,222,497 | 3,245,114 |
Asset retirement obligations | 142,101 | 138,919 |
Deferred tax liabilities, net | 742,148 | 837,263 |
Other liabilities | 26,121 | 27,484 |
Total long-term liabilities | $ 4,132,867 | $ 4,248,780 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity | ||
Preferred stock, $.001 par value, 25,000,000 shares authorized, none issued and outstanding | $ 0 | $ 0 |
Common stock, $.001 par value, 600,000,000 shares authorized; 354,340,533 and 354,541,626 shares issued, respectively | 354 | 355 |
Paid-in capital in excess of par | 2,356,069 | 2,353,134 |
Accumulated deficit | (1,228,039) | (1,042,882) |
Treasury stock, at cost, 3,734,768 and 3,124,311 shares, respectively | (47,106) | (46,038) |
Total stockholders' equity | 1,081,278 | 1,264,569 |
Total liabilities and stockholders' equity | $ 5,538,547 | $ 5,886,364 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Stockholders' equity | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 354,340,533 | 354,541,626 |
Treasury stock, shares | 3,734,768 | 3,124,311 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues and other income | ||
Oil, natural gas, and related product sales | $ 187,803 | $ 297,470 |
CO2 sales and transportation fees | 6,272 | 6,972 |
Interest income and other income | 769 | 3,207 |
Total revenues and other income | 194,844 | 307,649 |
Expenses | ||
Lease operating expenses | 102,447 | 141,084 |
Marketing and plant operating expenses | 13,194 | 11,685 |
CO2 discovery and operating expenses | 607 | 947 |
Taxes other than income | 20,092 | 26,679 |
General and administrative expenses | 33,901 | 46,280 |
Interest, net of amounts capitalized of $5,780 and $8,409, respectively | 42,171 | 40,099 |
Depletion, depreciation, and amortization | 77,366 | 149,958 |
Commodity derivatives expense (income) | 22,826 | (83,076) |
Gain on debt extinguishment | (94,991) | 0 |
Write-down of oil and natural gas properties | 256,000 | 146,200 |
Other expenses | 1,544 | 0 |
Total expenses | 475,157 | 479,856 |
Loss before income taxes | (280,313) | (172,207) |
Income tax benefit | (95,120) | (64,461) |
Net loss | $ (185,193) | $ (107,746) |
Net loss per common share | ||
Basic | $ (0.53) | $ (0.31) |
Diluted | (0.53) | (0.31) |
Dividends declared per common share | $ 0 | $ 0.0625 |
Weighted average common shares outstanding | ||
Basic | 347,235 | 350,688 |
Diluted | 347,235 | 350,688 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Expenses | ||
Capitalized interest | $ 5,780 | $ 8,409 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (185,193) | $ (107,746) |
Other comprehensive income, net of income tax: | ||
Interest rate lock derivative contracts reclassified to income, net of tax of $0 and $11, respectively | 0 | 17 |
Total other comprehensive income | 0 | 17 |
Comprehensive loss | $ (185,193) | $ (107,729) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Comprehensive Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Other comprehensive income, net of income tax: | ||
Tax for interest rate lock derivative contracts reclassified to income | $ 0 | $ 11 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (185,193) | $ (107,746) |
Adjustments to reconcile net loss to cash flows from operating activities | ||
Depletion, depreciation, and amortization | 77,366 | 149,958 |
Write-down of oil and natural gas properties | 256,000 | 146,200 |
Deferred income taxes | (95,115) | (66,036) |
Stock-based compensation | 859 | 7,849 |
Commodity derivatives expense (income) | 22,826 | (83,076) |
Receipt on settlements of commodity derivatives | 72,227 | 148,465 |
Gain on debt extinguishment | (94,991) | 0 |
Amortization of debt issuance costs and discounts | 3,306 | 2,221 |
Other, net | (416) | (2,359) |
Changes in assets and liabilities, net of effects from acquisitions | ||
Accrued production receivable | 4,479 | 33,636 |
Trade and other receivables | 812 | 16,828 |
Other current and long-term assets | 1,437 | (6,136) |
Accounts payable and accrued liabilities | (53,548) | (83,248) |
Oil and natural gas production payable | (7,572) | (17,716) |
Other liabilities | (448) | (1,076) |
Net cash provided by operating activities | 2,029 | 137,764 |
Cash flows from investing activities | ||
Oil and natural gas capital expenditures | (65,692) | (162,192) |
CO2 capital expenditures | (315) | (14,855) |
Pipelines and plants capital expenditures | (635) | (12,455) |
Other | (312) | (3,076) |
Net cash used in investing activities | (66,954) | (192,578) |
Cash flows from financing activities | ||
Bank repayments | (696,000) | (595,000) |
Bank borrowings | 831,000 | 665,000 |
Repurchases of senior subordinated notes | (55,521) | 0 |
Cash dividends paid | (387) | (22,068) |
Other | (8,727) | (10,250) |
Net cash provided by financing activities | 70,365 | 37,682 |
Net increase (decrease) in cash and cash equivalents | 5,440 | (17,132) |
Cash and cash equivalents at beginning of period | 2,812 | 23,153 |
Cash and cash equivalents at end of period | $ 8,252 | $ 6,021 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Note 1. Basis of Presentation Organization and Nature of Operations Denbury Resources Inc., a Delaware corporation, is an independent oil and natural gas company with operations focused in two key operating areas: the Gulf Coast and Rocky Mountain regions. Our goal is to increase the value of our properties through a combination of exploitation, drilling and proven engineering extraction practices, with the most significant emphasis relating to CO 2 enhanced oil recovery operations. Interim Financial Statements The accompanying unaudited condensed consolidated financial statements of Denbury Resources Inc. and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These financial statements and the notes thereto should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2015 (the “Form 10-K”). Unless indicated otherwise or the context requires, the terms “we,” “our,” “us,” “Company” or “Denbury,” refer to Denbury Resources Inc. and its subsidiaries. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end, and the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the year. In management’s opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of our consolidated financial position as of March 31, 2016 , our consolidated results of operations for the three months ended March 31, 2016 and 2015 , and our consolidated cash flows for the three months ended March 31, 2016 and 2015 . Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. On the Unaudited Condensed Consolidated Balance Sheets, beginning “Other current assets,” “Deferred tax liabilities, net,” “Paid-in capital in excess of par” and “Accumulated deficit” have been adjusted for changes related to (1) the accounting for excess tax benefits and forfeitures associated with share-based payment transactions, (2) debt issuance costs associated with our senior subordinated notes have been reclassified from “Other assets” to “Long-term debt, net of current portion” and (3) deferred tax assets have been reclassified from “Deferred tax assets, net” to “Deferred tax liabilities, net.” Such reclassifications were made as a result of our adoption of new accounting pronouncements described in Recent Accounting Pronouncements – Recently Adopted below and had no impact on our previously reported net income or cash flows. Net Loss per Common Share Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is calculated in the same manner, but includes the impact of potentially dilutive securities. Potentially dilutive securities consist of stock options, stock appreciation rights (“SARs”), nonvested restricted stock and nonvested performance-based equity awards. For the three months ended March 31, 2016 and 2015 , there were no adjustments to net loss for purposes of calculating basic and diluted net loss per common share . The following is a reconciliation of the weighted average shares used in the basic and diluted net loss per common share calculations for the periods indicated: Three Months Ended March 31, In thousands 2016 2015 Basic weighted average common shares outstanding 347,235 350,688 Potentially dilutive securities Restricted stock, stock options, SARs and performance-based equity awards — — Diluted weighted average common shares outstanding 347,235 350,688 Basic weighted average common shares exclude shares of nonvested restricted stock. As these restricted shares vest, they will be included in the shares outstanding used to calculate basic net loss per common share (although time-vesting restricted stock is issued and outstanding upon grant). The following securities could potentially dilute earnings per share in the future, but were excluded from the computation of diluted net loss per share, as their effect would have been antidilutive: Three Months Ended March 31, In thousands 2016 2015 Stock options and SARs 7,412 10,507 Restricted stock and performance-based equity awards 5,097 2,948 Write-Down of Oil and Natural Gas Properties The net capitalized costs of oil and natural gas properties are limited to the lower of unamortized cost or the cost center ceiling. The cost center ceiling is defined as (1) the present value of estimated future net revenues from proved oil and natural gas reserves before future abandonment costs (discounted at 10%), based on the average first-day-of-the-month oil and natural gas price for each month during a 12-month rolling period prior to the end of a particular reporting period; plus (2) the cost of properties not being amortized; plus (3) the lower of cost or estimated fair value of unproved properties included in the costs being amortized, if any; less (4) related income tax effects. Our future net revenues from proved oil and natural gas reserves are not reduced for development costs related to the cost of drilling for and developing CO 2 reserves nor those related to the cost of constructing CO 2 pipelines, as those costs have previously been incurred by the Company. Therefore, we include in the ceiling test, as a reduction of future net revenues, that portion of our capitalized CO 2 costs related to CO 2 reserves and CO 2 pipelines that we estimate will be consumed in the process of producing our proved oil and natural gas reserves. The fair value of our oil and natural gas derivative contracts is not included in the ceiling test, as we do not designate these contracts as hedge instruments for accounting purposes. The cost center ceiling test is prepared quarterly. As a result of the precipitous and continuing decline in NYMEX oil prices since the fourth quarter of 2014, the rolling first-day-of-the-month average oil price for the preceding 12 months, after adjustments for market differentials by field, has fallen throughout 2015 and the first quarter of 2016, from $79.55 per Bbl for the first quarter of 2015 to $44.03 per Bbl for the first quarter of 2016. In addition, the first-day-of-the-month average natural gas price for the preceding 12 months, after adjustments for market differentials by field, was $3.95 per Mcf for the first quarter of 2015 and $2.22 per Mcf for the first quarter of 2016. These falling prices have led to our recognizing full cost pool ceiling test write-downs of $256.0 million and $146.2 million during the three months ended March 31, 2016 and March 31, 2015, respectively. Recent Accounting Pronouncements Recently Adopted Stock Compensation. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). ASU 2016-09 simplifies the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, and early adoption is permitted. The standard contains various amendments, each requiring a specific method of adoption, and designates whether each amendment should be adopted using a retrospective, modified retrospective, or prospective transition method. Effective January 1, 2016, we adopted ASU 2016-09. The amendments within ASU 2016-09 related to the timing of when excess tax benefits are recognized and accounting for forfeitures were adopted using a modified retrospective method. In accordance with this method, we recorded a cumulative-effect adjustment in our Unaudited Condensed Consolidated Balance Sheet as of December 31, 2015, relating to the timing of recognition of excess tax benefits, representing a $15.7 million reduction to beginning “Accumulated deficit” with the offset to “Deferred tax liabilities, net” ( $14.8 million ) and “Other current assets” ( $0.8 million ). We also recorded a cumulative-effect adjustment in our Unaudited Condensed Consolidated Balance Sheet as of December 31, 2015, to reflect actual forfeitures versus the previously-estimated forfeiture rate, representing a $0.4 million reduction to beginning “Accumulated deficit” with the offset to “Paid-in capital in excess of par.” The amendments within ASU 2016-09 related to the recognition of excess tax benefits and tax shortfalls in the income statement and presentation of excess tax benefits on the statement of cash flows were adopted prospectively, with no adjustments made to prior periods. Income Taxes. In November 2015, the FASB issued ASU 2015-17, Income Taxes (“ASU 2015-17”). ASU 2015-17 simplifies the presentation of deferred income taxes and requires deferred tax assets and liabilities to be classified as noncurrent in the balance sheet. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, and early adoption is permitted. Entities can transition to the standard either retrospectively to each period presented or prospectively. Effective January 1, 2016, we adopted ASU 2015-17, which has been applied retrospectively for all comparative periods presented. Accordingly, current deferred tax assets of $1.5 million have been reclassified from “Deferred tax assets, net” to “Deferred tax liabilities, net” in our Unaudited Condensed Consolidated Balance Sheet as of December 31, 2015. The adoption of ASU 2015-17 did not have an impact on our consolidated results of operations or cash flows. Debt Issuance Costs. In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented as a direct reduction of the carrying amount of that debt in the balance sheet, consistent with the presentation of debt discounts. The amendments in this ASU are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Entities are required to apply the guidance on a retrospective basis to each period presented as a change in accounting principle. In August 2015, the FASB issued ASU 2015-15, Interest – Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-15”) which amends ASU 2015-03 to clarify the presentation and subsequent measurement of debt issuance costs associated with line of credit arrangements, such that entities may continue to apply current practice. Effective January 1, 2016, we adopted ASU 2015-03 and ASU 2015-15, which have been applied retrospectively for all comparative periods presented. Accordingly, debt issuance costs associated with our senior subordinated notes of $32.8 million have been reclassified from “Other assets” to “Long-term debt, net of current portion” in our Unaudited Condensed Consolidated Balance Sheet as of December 31, 2015. The adoption of ASU 2015-03 and ASU 2015-15 did not have an impact on our consolidated results of operations or cash flows. Not Yet Adopted Leases. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 amends the guidance for lease accounting to require lease assets and liabilities to be recognized on the balance sheet, along with additional disclosures regarding key leasing arrangements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, and early adoption is permitted. Entities must adopt the standard using a modified retrospective transition and apply the guidance to the earliest comparative period presented, with certain practical expedients that entities may elect to apply. Management is currently assessing the impact the adoption of ASU 2016-02 will have on our consolidated financial statements. Revenue Recognition. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (“ASU 2015-14”) which amends ASU 2014-09 and delays the effective date for public companies, such that the amendments in the ASU are effective for reporting periods beginning after December 15, 2017, and early adoption will be permitted for periods beginning after December 15, 2016. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (“ASU 2016-08”) which clarifies the implementation guidance on principal versus agent considerations. Entities can transition to the standard either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Management is currently assessing the impact the adoption of ASU 2014-09, ASU 2015-14 and ASU 2016-08 will have on our consolidated financial statements. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 2. Long-Term Debt The following long-term debt and capital lease obligations were outstanding as of the dates indicated: March 31, December 31, In thousands 2016 2015 Senior Secured Bank Credit Agreement $ 310,000 $ 175,000 6⅜% Senior Subordinated Notes due 2021 396,000 400,000 5½% Senior Subordinated Notes due 2022 1,207,745 1,250,000 4⅝% Senior Subordinated Notes due 2023 1,094,000 1,200,000 Other Subordinated Notes, including premium of $6 and $7, respectively 2,256 2,257 Pipeline financings 209,399 211,766 Capital lease obligations 65,817 71,324 Total 3,285,217 3,310,347 Issuance costs on senior subordinated notes (29,803 ) (32,752 ) Total, net of debt issuance costs on senior subordinated notes 3,255,414 3,277,595 Less: current obligations (32,917 ) (32,481 ) Long-term debt and capital lease obligations $ 3,222,497 $ 3,245,114 The ultimate parent company in our corporate structure, Denbury Resources Inc. (“DRI”), is the sole issuer of all of our outstanding senior subordinated notes. DRI has no independent assets or operations. Each of the subsidiary guarantors of such notes is 100% owned, directly or indirectly, by DRI, and the guarantees of the notes are full and unconditional and joint and several; any subsidiaries of DRI that are not subsidiary guarantors of such notes are minor subsidiaries. Senior Secured Bank Credit Facility In December 2014 , we entered into an Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and other lenders party thereto (the “Bank Credit Agreement”). The Bank Credit Agreement is a senior secured revolving credit facility with a maturity date of December 9, 2019. As of April 18, 2016, in connection with our May 2016 borrowing base redetermination requirement, we have reduced our borrowing base and lender commitments to $1.05 billion , with the next such redetermination scheduled for November 2016. In order to provide more flexibility in managing our balance sheet, the credit extended by our lenders, and continuing compliance with maintenance financial covenants in this low oil price environment, we have entered into three amendments to the Bank Credit Agreement between May 2015 and April 2016 that have modified the Bank Credit Agreement as follows: • for 2016 and 2017, the maximum permitted ratio of consolidated total net debt to consolidated EBITDAX covenant has been suspended and replaced by a maximum permitted ratio of consolidated senior secured debt to consolidated EBITDAX covenant of 3.0 to 1.0 (currently, only debt under our Bank Credit Agreement is considered consolidated senior secured debt for purposes of this ratio); • for 2016 and 2017, a new covenant has been added to require a minimum permitted ratio of consolidated EBITDAX to consolidated interest charges of 1.25 to 1.0; • beginning in the first quarter of 2018, the ratio of consolidated total net debt to consolidated EBITDAX covenant will be reinstated, utilizing an annualized EBITDAX amount for the first quarter of 2018 and building to a trailing four quarters by the end of 2018, with the maximum permitted ratios being 6.0 to 1.0 for the first quarter ending March 31, 2018, 5.5 to 1.0 for the second quarter ending June 30, 2018, and 5.0 to 1.0 for the third and fourth quarters ending September 30 and December 31, 2018, and returning to 4.25 to 1.0 for the first quarter ending March 31, 2019; • allows for the incurrence of up to $1.0 billion of junior lien debt (subject to customary requirements); • limits unrestricted cash and cash equivalents to $225 million if more than $250 million of borrowings are outstanding under the Bank Credit Agreement; and • limits the amount spent on repurchases of our senior subordinated notes to $225 million . Additionally, such amendments provide for the following changes to the Bank Credit Agreement: (1) increases the applicable margin for ABR Loans and LIBOR Loans by 75 basis points such that the margin for ABR Loans now ranges from 1% to 2% per annum and the margin for LIBOR Loans now ranges from 2% to 3% per annum, (2) increases the commitment fee rate to 0.50% , and (3) provides for semi-annual scheduled redeterminations of the borrowing base in May and November of each year. As of March 31, 2016, we were in compliance with all debt covenants under the Bank Credit Agreement. The weighted average interest rate on borrowings outstanding as of March 31, 2016 , under the Bank Credit Agreement was 2.4% . The above description of our Bank Credit Agreement financial covenants and the changes provided for within the three amendments are qualified by the express language and defined terms contained in the Bank Credit Agreement, the First Amendment to the Bank Credit Agreement dated May 4, 2015, the Second Amendment to the Bank Credit Agreement dated February 17, 2016, and the Third Amendment to the Bank Credit Agreement dated April 18, 2016, each of which are filed as exhibits to our periodic reports filed with the SEC. 2016 Repurchases of Senior Subordinated Notes During February and March 2016, we repurchased a total of $4.0 million in aggregate principal amount of our 6⅜% Senior Subordinated Notes due 2021 (the “2021 Notes”), $42.3 million in aggregate principal amount of our 5½% Senior Subordinated Notes due 2022 (the “2022 Notes”), and $106.0 million in aggregate principal amount of our 4⅝% Senior Subordinated Notes due 2023 (the “2023 Notes”) in open-market transactions for a total purchase price of $55.5 million , excluding accrued interest. In connection with these transactions, we recognized a $95.0 million gain on extinguishment, net of unamortized debt issuance costs written off. As of May 4, 2016, an additional $169.5 million may be spent on senior subordinated notes repurchases under the Bank Credit Agreement. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure | Note 3. Income Taxes We evaluate our estimated annual effective income tax rate based on current and forecasted business results and enacted tax laws on a quarterly basis and apply this tax rate to our ordinary income or loss to calculate our estimated tax liability or benefit. As of March 31, 2016 , we had $34.5 million of deferred tax assets associated with State of Louisiana net operating losses. As the result of a new tax law enacted in the State of Louisiana effective June 30, 2015, which limits a company’s utilization of certain deductions, including our net operating loss carryforwards, we recognized tax valuation allowances totaling $33.6 million during 2015 and an additional $0.9 million during the first quarter of 2016 to reduce the carrying value of our deferred tax assets. The valuation allowances will remain until the realization of future deferred tax benefits are more likely than not to become utilized. As of March 31, 2016 , we had an unrecognized tax benefit of $5.4 million related to an uncertain tax position. The unrecognized tax benefit was recorded during the fourth quarter of 2015 as a direct reduction of the associated deferred tax asset and, if recognized, would not materially affect our annual effective tax rate. The tax benefit from an uncertain tax position will only be recognized if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based upon the technical merits of the position. We currently do not expect a material change to the uncertain tax position within the next 12 months. Our policy is to recognize penalties and interest related to uncertain tax positions in income tax expense; however, no such amounts were accrued related to the uncertain tax position as of March 31, 2016. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Note 4. Stockholders’ Equity Dividends During the first three quarters of 2015, the Company’s Board of Directors declared quarterly cash dividends of $0.0625 per common share, with dividends totaling $22.1 million paid to stockholders during the three months ended March 31, 2015. In September 2015, in light of the continuing low oil price environment and our desire to maintain our financial strength and flexibility, the Company’s Board of Directors suspended our quarterly cash dividend. |
Commodity Derivative Contracts
Commodity Derivative Contracts | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity Derivative Contracts | Note 5. Commodity Derivative Contracts We do not apply hedge accounting treatment to our oil and natural gas derivative contracts; therefore, the changes in the fair values of these instruments are recognized in income in the period of change. These fair value changes, along with the settlements of expired contracts, are shown under “Commodity derivatives expense (income)” in our Unaudited Condensed Consolidated Statements of Operations. Historically, we have entered into various oil and natural gas derivative contracts to provide an economic hedge of our exposure to commodity price risk associated with anticipated future oil and natural gas production and to provide more certainty to our future cash flows. We do not hold or issue derivative financial instruments for trading purposes. Generally, these contracts have consisted of various combinations of price floors, collars, three-way collars, fixed-price swaps and fixed-price swaps enhanced with a sold put. The production that we hedge has varied from year to year depending on our levels of debt, financial strength and expectation of future commodity prices. We manage and control market and counterparty credit risk through established internal control procedures that are reviewed on an ongoing basis. We attempt to minimize credit risk exposure to counterparties through formal credit policies, monitoring procedures and diversification, and all of our commodity derivative contracts are with parties that are lenders under our Bank Credit Agreement (or affiliates of such lenders). As of March 31, 2016 , all of our outstanding derivative contracts were subject to enforceable master netting arrangements whereby payables on those contracts can be offset against receivables from separate derivative contracts with the same counterparty. It is our policy to classify derivative assets and liabilities on a gross basis on our balance sheets, even if the contracts are subject to enforceable master netting arrangements. The following table summarizes our commodity derivative contracts as of March 31, 2016 , none of which are classified as hedging instruments in accordance with the Financial Accounting Standards Board Codification (“FASC”) Derivatives and Hedging topic: Months Index Price Volume (Barrels per day) Contract Prices ($/Bbl) Range (1) Weighted Average Price Swap Sold Put Floor Ceiling Oil Contracts: 2016 Enhanced Swaps (2) Apr – June NYMEX 2,000 $ 90.35 – 90.35 $ 90.35 $ 68.00 $ — $ — Apr – June LLS 6,000 93.30 – 93.50 93.38 70.00 — — 2016 Fixed-Price Swaps Apr – June NYMEX 11,500 $ 60.30 – 63.75 $ 61.84 $ — $ — $ — Apr – June LLS 3,500 64.20 – 66.15 64.99 — — — July – Sept NYMEX 16,500 36.25 – 40.65 38.24 — — — July – Sept LLS 7,000 37.24 – 42.15 39.61 — — — Oct – Dec NYMEX 23,000 36.25 – 40.00 37.97 — — — Oct – Dec LLS 7,000 37.24 – 41.00 39.16 — — — 2016 Three-Way Collars (3) Apr – June NYMEX 2,000 $ 85.00 – 95.50 $ — $ 68.00 $ 85.00 $ 95.50 Apr – June LLS 2,000 88.00 – 98.25 — 70.00 88.00 98.25 2016 Collars Apr – June NYMEX 5,000 $ 55.00 – 72.25 $ — $ — $ 55.00 $ 71.01 Apr – June LLS 2,000 58.00 – 73.00 — — 58.00 73.00 July – Sept NYMEX 4,500 55.00 – 72.65 — — 55.00 71.22 July – Sept LLS 3,000 58.00 – 74.30 — — 58.00 73.85 2017 Fixed-Price Swaps Jan – Mar NYMEX 20,000 $ 41.15 – 44.35 $ 42.39 $ — $ — $ — Jan – Mar LLS 9,000 42.35 – 45.60 43.51 — — — (1) Ranges presented for fixed-price swaps and enhanced swaps represent the lowest and highest fixed prices of all open contracts for the period presented. For collars and three-way collars, ranges represent the lowest floor price and highest ceiling price for all open contracts for the period presented. (2) An enhanced swap is a fixed-price swap contract combined with a sold put feature (at a lower price) with the same counterparty. The value associated with the sold put is used to increase or enhance the fixed price of the swap. At the contract settlement date, (1) if the index price is higher than the swap price, we pay the counterparty the difference between the index price and swap price for the contracted volumes, (2) if the index price is lower than the swap price but at or above the sold put price, the counterparty pays us the difference between the index price and the swap price for the contracted volumes and (3) if the index price is lower than the sold put price, the counterparty pays us the difference between the swap price and the sold put price for the contracted volumes. (3) A three-way collar is a costless collar contract combined with a sold put feature (at a lower price) with the same counterparty. The value received for the sold put is used to enhance the contracted floor and ceiling price of the related collar. At the contract settlement date, (1) if the index price is higher than the ceiling price, we pay the counterparty the difference between the index price and ceiling price for the contracted volumes, (2) if the index price is between the floor and ceiling price, no settlements occur, (3) if the index price is lower than the floor price but at or above the sold put price, the counterparty pays us the difference between the index price and the floor price for the contracted volumes and (4) if the index price is lower than the sold put price, the counterparty pays us the difference between the floor price and the sold put price for the contracted volumes. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 6. Fair Value Measurements The FASC Fair Value Measurement topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (often referred to as the “exit price”). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. We primarily apply the income approach for recurring fair value measurements and endeavor to utilize the best available information. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. We are able to classify fair value balances based on the observability of those inputs. The FASC establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities as of the reporting date. • Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. Instruments in this category include non-exchange-traded oil derivatives that are based on NYMEX pricing and fixed-price swaps that are based on regional pricing other than NYMEX (e.g., Light Louisiana Sweet). The fixed-price swap features of our enhanced swaps are valued using a discounted cash flow model based upon forward commodity price curves. Our costless collars and the sold put features of our enhanced oil swaps and three-way collars are valued using the Black-Scholes model, an industry standard option valuation model that takes into account inputs such as contractual prices for the underlying instruments, maturity, quoted forward prices for commodities, interest rates, volatility factors and credit worthiness, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. • Level 3 – Pricing inputs include significant inputs that are generally less observable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. At March 31, 2016 , instruments in this category include non-exchange-traded enhanced swaps, costless collars and three-way collars that are based on regional pricing other than NYMEX (e.g., Light Louisiana Sweet). The valuation models utilized for enhanced swaps, costless collars and three-way collars are consistent with the methodologies described above; however, the implied volatilities utilized in the valuation of Level 3 instruments are developed using a benchmark, which is considered a significant unobservable input. An increase or decrease of 100 basis points in the implied volatility inputs utilized in our fair value measurement would result in a change of approximately $14 thousand in the fair value of these instruments as of March 31, 2016 . We adjust the valuations from the valuation model for nonperformance risk, using our estimate of the counterparty’s credit quality for asset positions and our credit quality for liability positions. We use multiple sources of third-party credit data in determining counterparty nonperformance risk, including credit default swaps. The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that were accounted for at fair value on a recurring basis as of the periods indicated: Fair Value Measurements Using: In thousands Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total March 31, 2016 Assets Oil derivative contracts – current $ — $ 49,758 $ 23,040 $ 72,798 Total Assets $ — $ 49,758 $ 23,040 $ 72,798 Liabilities Oil derivative contracts – current $ — $ 25,005 $ — $ 25,005 Total Liabilities $ — $ 25,005 $ — $ 25,005 December 31, 2015 Assets Oil derivative contracts – current $ — $ 90,012 $ 52,834 $ 142,846 Total Assets $ — $ 90,012 $ 52,834 $ 142,846 Since we do not apply hedge accounting for our commodity derivative contracts, any gains and losses on our assets and liabilities are included in “Commodity derivatives expense (income)” in the accompanying Unaudited Condensed Consolidated Statements of Operations. Level 3 Fair Value Measurements The following table summarizes the changes in the fair value of our Level 3 assets and liabilities for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, In thousands 2016 2015 Fair value of Level 3 instruments, beginning of period $ 52,834 $ 188,446 Fair value adjustments on commodity derivatives 281 25,085 Payment (receipts) on settlements of commodity derivatives (30,075 ) (48,516 ) Fair value of Level 3 instruments, end of period $ 23,040 $ 165,015 The amount of total gains for the period included in earnings attributable to the change in unrealized gains relating to assets still held at the reporting date $ 133 $ 23,099 We utilize an income approach to value our Level 3 enhanced swaps, costless collars and three-way collars. We obtain and ensure the appropriateness of the significant inputs to the calculation, including contractual prices for the underlying instruments, maturity, forward prices for commodities, interest rates, volatility factors and credit worthiness, and the fair value estimate is prepared and reviewed on a quarterly basis. The following table details fair value inputs related to implied volatilities utilized in the valuation of our Level 3 oil derivative contracts: Fair Value at Valuation Technique Unobservable Input Volatility Range Oil derivative contracts $ 23,040 Discounted cash flow / Black-Scholes Volatility of Light Louisiana Sweet for settlement periods beginning after March 31, 2016 26.9% – 38.0% Other Fair Value Measurements The carrying value of our loans under our Bank Credit Agreement approximate fair value, as they are subject to short-term floating interest rates that approximate the rates available to us for those periods. We use a market approach to determine fair value of our fixed-rate long-term debt using observable market data. The fair values of our senior subordinated notes are based on quoted market prices. The estimated fair value of our debt as of March 31, 2016 and December 31, 2015 , excluding pipeline financing and capital lease obligations, was $1,487.4 million and $1,119.0 million , respectively. We have other financial instruments consisting primarily of cash, cash equivalents, short-term receivables and payables that approximate fair value due to the nature of the instrument and the relatively short maturities. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7. Commitments and Contingencies We are involved in various lawsuits, claims and regulatory proceedings incidental to our businesses. We are also subject to audits for various taxes (income, sales and use, and severance) in the various states in which we operate, and from time to time receive assessments for potential taxes that we may owe. While we currently believe that the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material adverse effect on our financial position, results of operations or cash flows, litigation is subject to inherent uncertainties. Although a single or multiple adverse rulings or settlements could possibly have a material adverse effect on our finances, we only accrue for losses from litigation and claims if we determine that a loss is probable and the amount can be reasonably estimated. NGS Sub Corp., Evolution, et al v. Denbury Onshore, LLC In March 2015, Evolution Petroleum Corporation (together with its subsidiaries, “Evolution”), the parent of the entity which sold Denbury Onshore, LLC (“Denbury Onshore”), a subsidiary of Denbury Resources Inc. (“DRI” and together with Denbury Onshore, “Denbury”), its original interest in Delhi Field, filed an amended petition in a lawsuit which has been pending in the 133 rd Judicial District Court in Houston, Harris County, Texas since December 2013. Originally, that lawsuit involved ongoing disputes between Denbury and Evolution regarding the terms of the purchase documents under which Denbury Onshore bought its original Delhi Field interest, including disputes regarding allocation of costs in determining “payout” as defined in the agreements, and the extent and terms of assignment of reversionary interests in the unit back to Evolution following payout, along with related contractual terms. The amended petition added allegations of negligence and gross negligence against Denbury in connection with the June 2013 Delhi Field release of well fluids, and for the first time Evolution estimated its damages attributable to its allegations in the case as exceeding $200 million . The amended petition also added a claim for unspecified punitive damages. In Denbury’s answer and counterclaim, we have denied Evolution’s claims, alleged breach of contract by Evolution for failing to convey the full interest for which we paid and for violating our preferential purchase rights, and asked for a declaratory judgment as to various purchase document terms, including those pertaining to the determination of payout, the assignment of provisions of the documents, and cost sharing. Denbury has also filed a Motion for Summary Judgment seeking dismissal of Evolution’s tort claims for negligence and gross negligence. Discovery is ongoing in the case, and the case is currently set for trial in July 2016. We believe that Evolution’s claims and requests for damages in this matter are without merit and we intend to vigorously pursue our requested relief under the purchase documents. |
Additional Balance Sheet Detail
Additional Balance Sheet Details | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure Text Block [Abstract] | |
Additional Balance Sheet Details | Note 8. Additional Balance Sheet Details Accounts Payable and Accrued Liabilities March 31, December 31, In thousands 2016 2015 Accrued interest $ 44,201 $ 48,908 Accounts payable 32,688 30,477 Accrued lease operating expenses 30,169 37,549 Taxes payable 17,717 32,438 Accrued compensation 14,403 46,780 Accrued exploration and development costs 13,500 20,892 Other 34,037 36,153 Total $ 186,715 $ 253,197 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 9. Subsequent Event During the first week of May 2016, we entered into privately negotiated exchange agreements to exchange $922.5 million in aggregate principal amount of our outstanding 2021 Notes, 2022 Notes and 2023 Notes for $531.2 million in aggregate principal amount of new 9% Senior Secured Second Lien Notes due 2021 and 36.9 million shares of Denbury common stock. The transactions are currently expected to close May 10, 2016, subject to customary closing conditions. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations Denbury Resources Inc., a Delaware corporation, is an independent oil and natural gas company with operations focused in two key operating areas: the Gulf Coast and Rocky Mountain regions. Our goal is to increase the value of our properties through a combination of exploitation, drilling and proven engineering extraction practices, with the most significant emphasis relating to CO 2 enhanced oil recovery operations. |
Interim Financial Statements - Basis of Accounting, Policy | Interim Financial Statements The accompanying unaudited condensed consolidated financial statements of Denbury Resources Inc. and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These financial statements and the notes thereto should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2015 (the “Form 10-K”). Unless indicated otherwise or the context requires, the terms “we,” “our,” “us,” “Company” or “Denbury,” refer to Denbury Resources Inc. and its subsidiaries. |
Interim Financial Statements - Use of Estimates | Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end, and the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the year. In management’s opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of our consolidated financial position as of March 31, 2016 , our consolidated results of operations for the three months ended March 31, 2016 and 2015 , and our consolidated cash flows for the three months ended March 31, 2016 and 2015 . |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. On the Unaudited Condensed Consolidated Balance Sheets, beginning “Other current assets,” “Deferred tax liabilities, net,” “Paid-in capital in excess of par” and “Accumulated deficit” have been adjusted for changes related to (1) the accounting for excess tax benefits and forfeitures associated with share-based payment transactions, (2) debt issuance costs associated with our senior subordinated notes have been reclassified from “Other assets” to “Long-term debt, net of current portion” and (3) deferred tax assets have been reclassified from “Deferred tax assets, net” to “Deferred tax liabilities, net.” Such reclassifications were made as a result of our adoption of new accounting pronouncements described in Recent Accounting Pronouncements – Recently Adopted below and had no impact on our previously reported net income or cash flows. |
Net Loss per Common Share | Net Loss per Common Share Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is calculated in the same manner, but includes the impact of potentially dilutive securities. Potentially dilutive securities consist of stock options, stock appreciation rights (“SARs”), nonvested restricted stock and nonvested performance-based equity awards. For the three months ended March 31, 2016 and 2015 , there were no adjustments to net loss for purposes of calculating basic and diluted net loss per common share . The following is a reconciliation of the weighted average shares used in the basic and diluted net loss per common share calculations for the periods indicated: Three Months Ended March 31, In thousands 2016 2015 Basic weighted average common shares outstanding 347,235 350,688 Potentially dilutive securities Restricted stock, stock options, SARs and performance-based equity awards — — Diluted weighted average common shares outstanding 347,235 350,688 Basic weighted average common shares exclude shares of nonvested restricted stock. As these restricted shares vest, they will be included in the shares outstanding used to calculate basic net loss per common share (although time-vesting restricted stock is issued and outstanding upon grant). The following securities could potentially dilute earnings per share in the future, but were excluded from the computation of diluted net loss per share, as their effect would have been antidilutive: Three Months Ended March 31, In thousands 2016 2015 Stock options and SARs 7,412 10,507 Restricted stock and performance-based equity awards 5,097 2,948 |
Oil and Natural Gas Properties Policy | Write-Down of Oil and Natural Gas Properties The net capitalized costs of oil and natural gas properties are limited to the lower of unamortized cost or the cost center ceiling. The cost center ceiling is defined as (1) the present value of estimated future net revenues from proved oil and natural gas reserves before future abandonment costs (discounted at 10%), based on the average first-day-of-the-month oil and natural gas price for each month during a 12-month rolling period prior to the end of a particular reporting period; plus (2) the cost of properties not being amortized; plus (3) the lower of cost or estimated fair value of unproved properties included in the costs being amortized, if any; less (4) related income tax effects. Our future net revenues from proved oil and natural gas reserves are not reduced for development costs related to the cost of drilling for and developing CO 2 reserves nor those related to the cost of constructing CO 2 pipelines, as those costs have previously been incurred by the Company. Therefore, we include in the ceiling test, as a reduction of future net revenues, that portion of our capitalized CO 2 costs related to CO 2 reserves and CO 2 pipelines that we estimate will be consumed in the process of producing our proved oil and natural gas reserves. The fair value of our oil and natural gas derivative contracts is not included in the ceiling test, as we do not designate these contracts as hedge instruments for accounting purposes. The cost center ceiling test is prepared quarterly. As a result of the precipitous and continuing decline in NYMEX oil prices since the fourth quarter of 2014, the rolling first-day-of-the-month average oil price for the preceding 12 months, after adjustments for market differentials by field, has fallen throughout 2015 and the first quarter of 2016, from $79.55 per Bbl for the first quarter of 2015 to $44.03 per Bbl for the first quarter of 2016. In addition, the first-day-of-the-month average natural gas price for the preceding 12 months, after adjustments for market differentials by field, was $3.95 per Mcf for the first quarter of 2015 and $2.22 per Mcf for the first quarter of 2016. These falling prices have led to our recognizing full cost pool ceiling test write-downs of $256.0 million and $146.2 million during the three months ended March 31, 2016 and March 31, 2015, respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Stock Compensation. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). ASU 2016-09 simplifies the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, and early adoption is permitted. The standard contains various amendments, each requiring a specific method of adoption, and designates whether each amendment should be adopted using a retrospective, modified retrospective, or prospective transition method. Effective January 1, 2016, we adopted ASU 2016-09. The amendments within ASU 2016-09 related to the timing of when excess tax benefits are recognized and accounting for forfeitures were adopted using a modified retrospective method. In accordance with this method, we recorded a cumulative-effect adjustment in our Unaudited Condensed Consolidated Balance Sheet as of December 31, 2015, relating to the timing of recognition of excess tax benefits, representing a $15.7 million reduction to beginning “Accumulated deficit” with the offset to “Deferred tax liabilities, net” ( $14.8 million ) and “Other current assets” ( $0.8 million ). We also recorded a cumulative-effect adjustment in our Unaudited Condensed Consolidated Balance Sheet as of December 31, 2015, to reflect actual forfeitures versus the previously-estimated forfeiture rate, representing a $0.4 million reduction to beginning “Accumulated deficit” with the offset to “Paid-in capital in excess of par.” The amendments within ASU 2016-09 related to the recognition of excess tax benefits and tax shortfalls in the income statement and presentation of excess tax benefits on the statement of cash flows were adopted prospectively, with no adjustments made to prior periods. Income Taxes. In November 2015, the FASB issued ASU 2015-17, Income Taxes (“ASU 2015-17”). ASU 2015-17 simplifies the presentation of deferred income taxes and requires deferred tax assets and liabilities to be classified as noncurrent in the balance sheet. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, and early adoption is permitted. Entities can transition to the standard either retrospectively to each period presented or prospectively. Effective January 1, 2016, we adopted ASU 2015-17, which has been applied retrospectively for all comparative periods presented. Accordingly, current deferred tax assets of $1.5 million have been reclassified from “Deferred tax assets, net” to “Deferred tax liabilities, net” in our Unaudited Condensed Consolidated Balance Sheet as of December 31, 2015. The adoption of ASU 2015-17 did not have an impact on our consolidated results of operations or cash flows. Debt Issuance Costs. In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented as a direct reduction of the carrying amount of that debt in the balance sheet, consistent with the presentation of debt discounts. The amendments in this ASU are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Entities are required to apply the guidance on a retrospective basis to each period presented as a change in accounting principle. In August 2015, the FASB issued ASU 2015-15, Interest – Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-15”) which amends ASU 2015-03 to clarify the presentation and subsequent measurement of debt issuance costs associated with line of credit arrangements, such that entities may continue to apply current practice. Effective January 1, 2016, we adopted ASU 2015-03 and ASU 2015-15, which have been applied retrospectively for all comparative periods presented. Accordingly, debt issuance costs associated with our senior subordinated notes of $32.8 million have been reclassified from “Other assets” to “Long-term debt, net of current portion” in our Unaudited Condensed Consolidated Balance Sheet as of December 31, 2015. The adoption of ASU 2015-03 and ASU 2015-15 did not have an impact on our consolidated results of operations or cash flows. Not Yet Adopted Leases. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 amends the guidance for lease accounting to require lease assets and liabilities to be recognized on the balance sheet, along with additional disclosures regarding key leasing arrangements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, and early adoption is permitted. Entities must adopt the standard using a modified retrospective transition and apply the guidance to the earliest comparative period presented, with certain practical expedients that entities may elect to apply. Management is currently assessing the impact the adoption of ASU 2016-02 will have on our consolidated financial statements. Revenue Recognition. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (“ASU 2015-14”) which amends ASU 2014-09 and delays the effective date for public companies, such that the amendments in the ASU are effective for reporting periods beginning after December 15, 2017, and early adoption will be permitted for periods beginning after December 15, 2016. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (“ASU 2016-08”) which clarifies the implementation guidance on principal versus agent considerations. Entities can transition to the standard either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Management is currently assessing the impact the adoption of ASU 2014-09, ASU 2015-14 and ASU 2016-08 will have on our consolidated financial statements. |
Commodity Derivative Contracts | We do not apply hedge accounting treatment to our oil and natural gas derivative contracts; therefore, the changes in the fair values of these instruments are recognized in income in the period of change. These fair value changes, along with the settlements of expired contracts, are shown under “Commodity derivatives expense (income)” in our Unaudited Condensed Consolidated Statements of Operations. Historically, we have entered into various oil and natural gas derivative contracts to provide an economic hedge of our exposure to commodity price risk associated with anticipated future oil and natural gas production and to provide more certainty to our future cash flows. We do not hold or issue derivative financial instruments for trading purposes. Generally, these contracts have consisted of various combinations of price floors, collars, three-way collars, fixed-price swaps and fixed-price swaps enhanced with a sold put. The production that we hedge has varied from year to year depending on our levels of debt, financial strength and expectation of future commodity prices. We manage and control market and counterparty credit risk through established internal control procedures that are reviewed on an ongoing basis. We attempt to minimize credit risk exposure to counterparties through formal credit policies, monitoring procedures and diversification, and all of our commodity derivative contracts are with parties that are lenders under our Bank Credit Agreement (or affiliates of such lenders). As of March 31, 2016 , all of our outstanding derivative contracts were subject to enforceable master netting arrangements whereby payables on those contracts can be offset against receivables from separate derivative contracts with the same counterparty. It is our policy to classify derivative assets and liabilities on a gross basis on our balance sheets, even if the contracts are subject to enforceable master netting arrangements. |
Fair Value Measurements | The FASC Fair Value Measurement topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (often referred to as the “exit price”). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. We primarily apply the income approach for recurring fair value measurements and endeavor to utilize the best available information. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. We are able to classify fair value balances based on the observability of those inputs. The FASC establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities as of the reporting date. • Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. Instruments in this category include non-exchange-traded oil derivatives that are based on NYMEX pricing and fixed-price swaps that are based on regional pricing other than NYMEX (e.g., Light Louisiana Sweet). The fixed-price swap features of our enhanced swaps are valued using a discounted cash flow model based upon forward commodity price curves. Our costless collars and the sold put features of our enhanced oil swaps and three-way collars are valued using the Black-Scholes model, an industry standard option valuation model that takes into account inputs such as contractual prices for the underlying instruments, maturity, quoted forward prices for commodities, interest rates, volatility factors and credit worthiness, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. • Level 3 – Pricing inputs include significant inputs that are generally less observable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. At March 31, 2016 , instruments in this category include non-exchange-traded enhanced swaps, costless collars and three-way collars that are based on regional pricing other than NYMEX (e.g., Light Louisiana Sweet). The valuation models utilized for enhanced swaps, costless collars and three-way collars are consistent with the methodologies described above; however, the implied volatilities utilized in the valuation of Level 3 instruments are developed using a benchmark, which is considered a significant unobservable input. An increase or decrease of 100 basis points in the implied volatility inputs utilized in our fair value measurement would result in a change of approximately $14 thousand in the fair value of these instruments as of March 31, 2016 . We adjust the valuations from the valuation model for nonperformance risk, using our estimate of the counterparty’s credit quality for asset positions and our credit quality for liability positions. We use multiple sources of third-party credit data in determining counterparty nonperformance risk, including credit default swaps. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Weighted average shares used in the basic and diluted net income (loss) per common share | The following is a reconciliation of the weighted average shares used in the basic and diluted net loss per common share calculations for the periods indicated: Three Months Ended March 31, In thousands 2016 2015 Basic weighted average common shares outstanding 347,235 350,688 Potentially dilutive securities Restricted stock, stock options, SARs and performance-based equity awards — — Diluted weighted average common shares outstanding 347,235 350,688 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following securities could potentially dilute earnings per share in the future, but were excluded from the computation of diluted net loss per share, as their effect would have been antidilutive: Three Months Ended March 31, In thousands 2016 2015 Stock options and SARs 7,412 10,507 Restricted stock and performance-based equity awards 5,097 2,948 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Components of Long-Term Debt | The following long-term debt and capital lease obligations were outstanding as of the dates indicated: March 31, December 31, In thousands 2016 2015 Senior Secured Bank Credit Agreement $ 310,000 $ 175,000 6⅜% Senior Subordinated Notes due 2021 396,000 400,000 5½% Senior Subordinated Notes due 2022 1,207,745 1,250,000 4⅝% Senior Subordinated Notes due 2023 1,094,000 1,200,000 Other Subordinated Notes, including premium of $6 and $7, respectively 2,256 2,257 Pipeline financings 209,399 211,766 Capital lease obligations 65,817 71,324 Total 3,285,217 3,310,347 Issuance costs on senior subordinated notes (29,803 ) (32,752 ) Total, net of debt issuance costs on senior subordinated notes 3,255,414 3,277,595 Less: current obligations (32,917 ) (32,481 ) Long-term debt and capital lease obligations $ 3,222,497 $ 3,245,114 |
Commodity Derivative Contracts
Commodity Derivative Contracts (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity derivative contracts not classified as hedging instruments | The following table summarizes our commodity derivative contracts as of March 31, 2016 , none of which are classified as hedging instruments in accordance with the Financial Accounting Standards Board Codification (“FASC”) Derivatives and Hedging topic: Months Index Price Volume (Barrels per day) Contract Prices ($/Bbl) Range (1) Weighted Average Price Swap Sold Put Floor Ceiling Oil Contracts: 2016 Enhanced Swaps (2) Apr – June NYMEX 2,000 $ 90.35 – 90.35 $ 90.35 $ 68.00 $ — $ — Apr – June LLS 6,000 93.30 – 93.50 93.38 70.00 — — 2016 Fixed-Price Swaps Apr – June NYMEX 11,500 $ 60.30 – 63.75 $ 61.84 $ — $ — $ — Apr – June LLS 3,500 64.20 – 66.15 64.99 — — — July – Sept NYMEX 16,500 36.25 – 40.65 38.24 — — — July – Sept LLS 7,000 37.24 – 42.15 39.61 — — — Oct – Dec NYMEX 23,000 36.25 – 40.00 37.97 — — — Oct – Dec LLS 7,000 37.24 – 41.00 39.16 — — — 2016 Three-Way Collars (3) Apr – June NYMEX 2,000 $ 85.00 – 95.50 $ — $ 68.00 $ 85.00 $ 95.50 Apr – June LLS 2,000 88.00 – 98.25 — 70.00 88.00 98.25 2016 Collars Apr – June NYMEX 5,000 $ 55.00 – 72.25 $ — $ — $ 55.00 $ 71.01 Apr – June LLS 2,000 58.00 – 73.00 — — 58.00 73.00 July – Sept NYMEX 4,500 55.00 – 72.65 — — 55.00 71.22 July – Sept LLS 3,000 58.00 – 74.30 — — 58.00 73.85 2017 Fixed-Price Swaps Jan – Mar NYMEX 20,000 $ 41.15 – 44.35 $ 42.39 $ — $ — $ — Jan – Mar LLS 9,000 42.35 – 45.60 43.51 — — — (1) Ranges presented for fixed-price swaps and enhanced swaps represent the lowest and highest fixed prices of all open contracts for the period presented. For collars and three-way collars, ranges represent the lowest floor price and highest ceiling price for all open contracts for the period presented. (2) An enhanced swap is a fixed-price swap contract combined with a sold put feature (at a lower price) with the same counterparty. The value associated with the sold put is used to increase or enhance the fixed price of the swap. At the contract settlement date, (1) if the index price is higher than the swap price, we pay the counterparty the difference between the index price and swap price for the contracted volumes, (2) if the index price is lower than the swap price but at or above the sold put price, the counterparty pays us the difference between the index price and the swap price for the contracted volumes and (3) if the index price is lower than the sold put price, the counterparty pays us the difference between the swap price and the sold put price for the contracted volumes. (3) A three-way collar is a costless collar contract combined with a sold put feature (at a lower price) with the same counterparty. The value received for the sold put is used to enhance the contracted floor and ceiling price of the related collar. At the contract settlement date, (1) if the index price is higher than the ceiling price, we pay the counterparty the difference between the index price and ceiling price for the contracted volumes, (2) if the index price is between the floor and ceiling price, no settlements occur, (3) if the index price is lower than the floor price but at or above the sold put price, the counterparty pays us the difference between the index price and the floor price for the contracted volumes and (4) if the index price is lower than the sold put price, the counterparty pays us the difference between the floor price and the sold put price for the contracted volumes. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value hierarchy of financial assets and liabilities | The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that were accounted for at fair value on a recurring basis as of the periods indicated: Fair Value Measurements Using: In thousands Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total March 31, 2016 Assets Oil derivative contracts – current $ — $ 49,758 $ 23,040 $ 72,798 Total Assets $ — $ 49,758 $ 23,040 $ 72,798 Liabilities Oil derivative contracts – current $ — $ 25,005 $ — $ 25,005 Total Liabilities $ — $ 25,005 $ — $ 25,005 December 31, 2015 Assets Oil derivative contracts – current $ — $ 90,012 $ 52,834 $ 142,846 Total Assets $ — $ 90,012 $ 52,834 $ 142,846 |
Changes in fair value of Level 3 assets and liabilities | The following table summarizes the changes in the fair value of our Level 3 assets and liabilities for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, In thousands 2016 2015 Fair value of Level 3 instruments, beginning of period $ 52,834 $ 188,446 Fair value adjustments on commodity derivatives 281 25,085 Payment (receipts) on settlements of commodity derivatives (30,075 ) (48,516 ) Fair value of Level 3 instruments, end of period $ 23,040 $ 165,015 The amount of total gains for the period included in earnings attributable to the change in unrealized gains relating to assets still held at the reporting date $ 133 $ 23,099 |
Quantitative valuation techniques for assets and liabilities measured on a recurring basis (Level 3) | The following table details fair value inputs related to implied volatilities utilized in the valuation of our Level 3 oil derivative contracts: Fair Value at Valuation Technique Unobservable Input Volatility Range Oil derivative contracts $ 23,040 Discounted cash flow / Black-Scholes Volatility of Light Louisiana Sweet for settlement periods beginning after March 31, 2016 26.9% – 38.0% |
Additional Balance Sheet Deta23
Additional Balance Sheet Details (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Table Text Block [Abstract] | |
Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities March 31, December 31, In thousands 2016 2015 Accrued interest $ 44,201 $ 48,908 Accounts payable 32,688 30,477 Accrued lease operating expenses 30,169 37,549 Taxes payable 17,717 32,438 Accrued compensation 14,403 46,780 Accrued exploration and development costs 13,500 20,892 Other 34,037 36,153 Total $ 186,715 $ 253,197 |
Basis of Presentation (Reconcil
Basis of Presentation (Reconciliation of Weighted Average Shares Table) (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Weighted average shares used in the basic and diluted net income per common share | ||
Basic weighted average common shares outstanding | 347,235 | 350,688 |
Potentially dilutive securities | ||
Restricted stock, stock options, SARs and performance-based equity awards | 0 | 0 |
Diluted weighted average common shares outstanding | 347,235 | 350,688 |
Basis of Presentation (Antidilu
Basis of Presentation (Antidilutive Securities) (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Stock Options and SARs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 7,412 | 10,507 |
Restricted stock and performance-based equity awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 5,097 | 2,948 |
Basis of Presentation (Details
Basis of Presentation (Details Textuals) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016USD ($)$ / Mcf$ / Barrel | Mar. 31, 2015USD ($)$ / Mcf$ / Barrel | |
Accounting Policies [Abstract] | ||
Write-down of oil and natural gas properties | $ | $ 256,000 | $ 146,200 |
Oil | ||
Average Sales Price and Production Costs Per Unit of Production [Line Items] | ||
Oil and Natural Gas Prices | $ / Barrel | 44.03 | 79.55 |
Natural Gas | ||
Average Sales Price and Production Costs Per Unit of Production [Line Items] | ||
Oil and Natural Gas Prices | $ / Mcf | 2.22 | 3.95 |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Details Textuals 2) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Accounting Changes and Error Corrections [Abstract] | ||
Current deferred tax assets, Net | $ 1,500 | |
Issuance costs on senior subordinated notes | $ 29,803 | 32,752 |
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Accumulated deficit | (1,228,039) | (1,042,882) |
Other Assets, Current | 8,763 | 10,005 |
Additional Paid in Capital | $ 2,356,069 | 2,353,134 |
ASU 2016-09 Cumulative Effect Adjustment for Timing of Recognition of Excess Tax Benefits [Member] | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Accumulated deficit | 15,700 | |
Deferred Tax Liabilities, Net | 14,800 | |
Other Assets, Current | 800 | |
ASU 2016-09 Cumulative Effect of Actual Forfeiture Rate [Member] | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Additional Paid in Capital | $ 400 |
Long-Term Debt (Components of L
Long-Term Debt (Components of Long-Term Debt) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Senior Secured Bank Credit Agreement | $ 310,000 | $ 175,000 |
Pipeline financings | 209,399 | 211,766 |
Capital lease obligations | 65,817 | 71,324 |
Total | 3,285,217 | 3,310,347 |
Issuance costs on senior subordinated notes | (29,803) | (32,752) |
Total, net of debt issuance costs on senior subordinated notes | 3,255,414 | 3,277,595 |
Less current obligations | (32,917) | (32,481) |
Long-term debt and capital lease obligations | 3,222,497 | 3,245,114 |
6 3/8% Senior Subordinated Notes due 2021 | ||
Debt Instrument [Line Items] | ||
Senior Subordinated Notes | $ 396,000 | 400,000 |
Debt Instrument, Interest Rate, Stated Percentage | 6.375% | |
5 1/2% Senior Subordinated Notes due 2022 | ||
Debt Instrument [Line Items] | ||
Senior Subordinated Notes | $ 1,207,745 | 1,250,000 |
Debt Instrument, Interest Rate, Stated Percentage | 5.50% | |
4 5/8% Senior Subordinated Notes due 2023 | ||
Debt Instrument [Line Items] | ||
Senior Subordinated Notes | $ 1,094,000 | 1,200,000 |
Debt Instrument, Interest Rate, Stated Percentage | 4.625% | |
Other Subordinated Notes | ||
Debt Instrument [Line Items] | ||
Senior Subordinated Notes | $ 2,256 | 2,257 |
Including premium of | $ 6 | $ 7 |
Long-Term Debt (Details Textual
Long-Term Debt (Details Textuals) | Feb. 17, 2016USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | May. 04, 2016USD ($) | Apr. 18, 2016USD ($) |
Long Term Debt (Textuals) [Abstract] | |||||
Interest in guarantor subsidiaries | 100.00% | ||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Weighted average interest rate on Bank Credit Facility | 2.40% | ||||
Senior Notes [Abstract] | |||||
Gains (Losses) on Extinguishment of Debt | $ 94,991,000 | $ 0 | |||
Debt Instrument, Repurchase Amount | $ 55,500,000 | ||||
Year 2,016 | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Senior Secured Debt to EBITDAX | 3 | ||||
EBITDAX to Consolidated Interest | 1.25 | ||||
Year 2,017 | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Senior Secured Debt to EBITDAX | 3 | ||||
EBITDAX to Consolidated Interest | 1.25 | ||||
Q1 | Year 2018 | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Total Net Debt to EBITDAX Requirement | 6 | ||||
Q1 | Year 2019 | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Total Net Debt to EBITDAX Requirement | 4.25 | ||||
Q2 | Year 2018 | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Total Net Debt to EBITDAX Requirement | 5.5 | ||||
Q3 | Year 2018 | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Total Net Debt to EBITDAX Requirement | 5 | ||||
Q4 | Year 2018 | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Total Net Debt to EBITDAX Requirement | 5 | ||||
Line of Credit | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.50% | ||||
5 1/2% Senior Subordinated Notes due 2022 | |||||
Senior Notes [Abstract] | |||||
Debt Instrument, Repurchased Face Amount | $ 42,300,000 | ||||
6 3/8% Senior Subordinated Notes due 2021 | |||||
Senior Notes [Abstract] | |||||
Debt Instrument, Repurchased Face Amount | 4,000,000 | ||||
4 5/8% Senior Subordinated Notes due 2023 | |||||
Senior Notes [Abstract] | |||||
Debt Instrument, Repurchased Face Amount | $ 106,000,000 | ||||
Subsequent Event | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Line of Credit, Borrowing Base | $ 1,050,000,000 | ||||
Line of Credit Facility, Current Borrowing Capacity | 1,050,000,000 | ||||
Maximum amount of junior lien debt permitted | $ 1,000,000,000 | ||||
Senior Notes [Abstract] | |||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 169,500,000 | ||||
Cash and Cash Equivalents [Member] | Line of Credit | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Credit Facility Covenants | $ 225,000,000 | ||||
Maximum Outstanding Credit Facility Balance [Member] | Line of Credit | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Credit Facility Covenants | 250,000,000 | ||||
Senior Subordinated Notes [Member] | Line of Credit | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Credit Facility Covenants | $ 225,000,000 | ||||
Base Rate [Member] | Line of Credit | Minimum | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Interest Rate Margins on Bank Credit Facility | 1.00% | ||||
Base Rate [Member] | Line of Credit | Maximum | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Interest Rate Margins on Bank Credit Facility | 2.00% | ||||
London Interbank Offered Rate (LIBOR) [Member] | Line of Credit | Minimum | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Interest Rate Margins on Bank Credit Facility | 2.00% | ||||
London Interbank Offered Rate (LIBOR) [Member] | Line of Credit | Maximum | |||||
Senior Secured Bank Credit Facility [Abstract] | |||||
Interest Rate Margins on Bank Credit Facility | 3.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Deferred Tax Assets, Valuation Allowance | $ 0.9 | $ 33.6 |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 34.5 | |
Unrecognized Tax Benefits | $ 5.4 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textuals) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | |
Stockholders' Equity Note [Abstract] | ||||
Dividends declared per common share | $ 0 | $ 0.0625 | $ 0.0625 | $ 0.0625 |
Cash dividend payment | $ 387 | $ 22,068 |
Commodity Derivative Contract32
Commodity Derivative Contracts (Details) | Mar. 31, 2016bbl / d$ / Barrel |
Enhanced Swaps | Year 2016 | Q2 | NYMEX | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 2,000 |
Weighted average swap price | 90.35 |
Weighted average sold put price | 68 |
Enhanced Swaps | Year 2016 | Q2 | NYMEX | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 90.35 |
Enhanced Swaps | Year 2016 | Q2 | NYMEX | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 90.35 |
Enhanced Swaps | Year 2016 | Q2 | LLS | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 6,000 |
Weighted average swap price | 93.38 |
Weighted average sold put price | 70 |
Enhanced Swaps | Year 2016 | Q2 | LLS | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 93.30 |
Enhanced Swaps | Year 2016 | Q2 | LLS | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 93.50 |
Swap | Year 2016 | Q2 | NYMEX | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 11,500 |
Weighted average swap price | 61.84 |
Swap | Year 2016 | Q2 | NYMEX | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 60.30 |
Swap | Year 2016 | Q2 | NYMEX | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 63.75 |
Swap | Year 2016 | Q2 | LLS | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 3,500 |
Weighted average swap price | 64.99 |
Swap | Year 2016 | Q2 | LLS | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 64.20 |
Swap | Year 2016 | Q2 | LLS | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 66.15 |
Swap | Year 2016 | Q3 | NYMEX | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 16,500 |
Weighted average swap price | 38.24 |
Swap | Year 2016 | Q3 | NYMEX | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 36.25 |
Swap | Year 2016 | Q3 | NYMEX | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 40.65 |
Swap | Year 2016 | Q3 | LLS | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 7,000 |
Weighted average swap price | 39.61 |
Swap | Year 2016 | Q3 | LLS | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 37.24 |
Swap | Year 2016 | Q3 | LLS | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 42.15 |
Swap | Year 2016 | Q4 | NYMEX | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 23,000 |
Weighted average swap price | 37.97 |
Swap | Year 2016 | Q4 | NYMEX | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 36.25 |
Swap | Year 2016 | Q4 | NYMEX | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 40 |
Swap | Year 2016 | Q4 | LLS | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 7,000 |
Weighted average swap price | 39.16 |
Swap | Year 2016 | Q4 | LLS | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 37.24 |
Swap | Year 2016 | Q4 | LLS | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 41 |
Swap | Year 2017 | Q1 | NYMEX | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 20,000 |
Weighted average swap price | 42.39 |
Swap | Year 2017 | Q1 | NYMEX | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 41.15 |
Swap | Year 2017 | Q1 | NYMEX | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 44.35 |
Swap | Year 2017 | Q1 | LLS | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 9,000 |
Weighted average swap price | 43.51 |
Swap | Year 2017 | Q1 | LLS | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 42.35 |
Swap | Year 2017 | Q1 | LLS | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 45.60 |
Three-way Collar | Year 2016 | Q2 | NYMEX | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 2,000 |
Derivative, Floor Price | 85 |
Derivative, Cap Price | 95.50 |
Weighted average sold put price | 68 |
Weighted average floor price | 85 |
Weighted average ceiling price | 95.50 |
Three-way Collar | Year 2016 | Q2 | LLS | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 2,000 |
Derivative, Floor Price | 88 |
Derivative, Cap Price | 98.25 |
Weighted average sold put price | 70 |
Weighted average floor price | 88 |
Weighted average ceiling price | 98.25 |
Collar | Year 2016 | Q2 | NYMEX | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 5,000 |
Derivative, Floor Price | 55 |
Derivative, Cap Price | 72.25 |
Weighted average floor price | 55 |
Weighted average ceiling price | 71.01 |
Collar | Year 2016 | Q2 | LLS | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 2,000 |
Derivative, Floor Price | 58 |
Derivative, Cap Price | 73 |
Weighted average floor price | 58 |
Weighted average ceiling price | 73 |
Collar | Year 2016 | Q3 | NYMEX | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 4,500 |
Derivative, Floor Price | 55 |
Derivative, Cap Price | 72.65 |
Weighted average floor price | 55 |
Weighted average ceiling price | 71.22 |
Collar | Year 2016 | Q3 | LLS | |
Derivative [Line Items] | |
Volume per Day | bbl / d | 3,000 |
Derivative, Floor Price | 58 |
Derivative, Cap Price | 74.30 |
Weighted average floor price | 58 |
Weighted average ceiling price | 73.85 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value Hierarchy Table) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Oil derivative contracts - current asset | $ 72,798 | $ 142,846 |
Total Assets | 72,798 | 142,846 |
Oil derivative contracts - current liability | 25,005 | 0 |
Total Liabilities | 25,005 | |
Quoted Prices in Active Markets (Level 1) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Oil derivative contracts - current asset | 0 | 0 |
Total Assets | 0 | 0 |
Oil derivative contracts - current liability | 0 | |
Total Liabilities | 0 | |
Significant Other Observable Inputs (Level 2) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Oil derivative contracts - current asset | 49,758 | 90,012 |
Total Assets | 49,758 | 90,012 |
Oil derivative contracts - current liability | 25,005 | |
Total Liabilities | 25,005 | |
Significant Unobservable Inputs (Level 3) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Oil derivative contracts - current asset | 23,040 | 52,834 |
Total Assets | 23,040 | $ 52,834 |
Oil derivative contracts - current liability | 0 | |
Total Liabilities | $ 0 |
Fair Value Measurements (Level
Fair Value Measurements (Level 3 Fair Value Measurements) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Fair value of Level 3 instruments, beginning of period | $ 52,834 | $ 188,446 |
Fair value adjustments on commodity derivatives | 281 | 25,085 |
Payment (receipts) on settlements of commodity derivatives | (30,075) | (48,516) |
Fair value of Level 3 instruments, end of period | 23,040 | 165,015 |
The amount of total gains for the period included in earnings attributable to the change in unrealized gains relating to assets still held at the reporting date | $ 133 | $ 23,099 |
Fair Value Measurements (Leve35
Fair Value Measurements (Level 3 Valuation Techniques) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs | $ 23,040 | $ 52,834 | $ 165,015 | $ 188,446 |
Income Approach Valuation Technique | ||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs | $ 23,040 | |||
Income Approach Valuation Technique | Minimum | ||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||
Expected Volatility Range | 26.90% | |||
Income Approach Valuation Technique | Maximum | ||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||
Expected Volatility Range | 38.00% |
Fair Value Measurements (Detail
Fair Value Measurements (Details Textuals) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Sensitivity Analysis of Fair Value, Impact of 100 Basis Point Increase or Decrease in Level 3 Inputs | $ 14 | |
Debt, Fair Value | $ 1,487,400 | $ 1,119,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 13 Months Ended |
Mar. 31, 2016USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Loss Contingency, Damages Sought, Value | $ 200 |
Additional Balance Sheet Deta38
Additional Balance Sheet Details (Accounts Payable and Accrued Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Accrued interest | $ 44,201 | $ 48,908 |
Accounts payable | 32,688 | 30,477 |
Accrued lease operating expenses | 30,169 | 37,549 |
Taxes payable | 17,717 | 32,438 |
Accrued compensation | 14,403 | 46,780 |
Accrued exploration and development costs | 13,500 | 20,892 |
Other | 34,037 | 36,153 |
Total | $ 186,715 | $ 253,197 |
Subsequent Event (Details Textu
Subsequent Event (Details Textuals) - Subsequent Event shares in Millions, $ in Millions | May. 06, 2016USD ($)Rateshares |
Subsequent Event [Line Items] | |
Debt Conversion, Original Debt, Amount | $ 922.5 |
Debt Conversion, Converted Instrument, Amount | $ 531.2 |
Debt Conversion, Converted Instrument, Rate | Rate | 9.00% |
Debt Conversion, Converted Instrument, Shares Issued | shares | 36.9 |