Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document And Company Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | DNR | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0000945764 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Registrant Name | Denbury Resources Inc. | |
Entity Common Stock, Shares Outstanding | 461,224,639 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | |
Current assets | |||
Cash and cash equivalents | $ 5,749 | $ 38,560 | |
Accrued production receivable | 147,379 | 125,788 | |
Trade and other receivables, net | 28,624 | 26,970 | |
Derivative assets | 14,012 | 93,080 | |
Other current assets | 10,282 | 11,896 | |
Total current assets | 206,046 | 296,294 | |
Oil and natural gas properties (using full cost accounting) | |||
Proved properties | 11,140,781 | 11,072,209 | |
Unevaluated properties | 1,003,669 | 996,700 | |
CO2 properties | 1,196,868 | 1,196,795 | |
Pipelines and plants | 2,304,745 | 2,302,817 | |
Other property and equipment | 233,277 | 250,279 | |
Less accumulated depletion, depreciation, amortization and impairment | (11,537,622) | (11,500,190) | |
Net property and equipment | 4,341,718 | 4,318,610 | |
Operating lease right-of-use assets | 37,913 | 0 | |
Derivative assets | 2,022 | 4,195 | |
Other assets | 103,463 | 104,123 | |
Total assets | 4,691,162 | 4,723,222 | |
Current liabilities | |||
Accounts payable and accrued liabilities | 147,324 | 198,380 | |
Oil and gas production payable | 65,893 | 61,288 | |
Derivative liabilities | 10,037 | 0 | |
Current maturities of long-term debt (including future interest payable of $102,667 and $85,303, respectively - see Note 4) | [1] | 120,258 | 105,125 |
Operating lease liabilities | 7,070 | 0 | |
Total current liabilities | 350,582 | 364,793 | |
Long-term liabilities | |||
Long-term debt, net of current portion (including future interest payable of $147,550 and $164,914, respectively - see Note 4) | 2,643,307 | 2,664,211 | |
Asset retirement obligations | 178,428 | 174,470 | |
Derivative liabilities | 306 | 0 | |
Deferred tax liabilities, net | 300,280 | 309,758 | |
Operating lease liabilities | 47,056 | 0 | |
Other liabilities | 51,883 | 68,213 | |
Total long-term liabilities | 3,221,260 | 3,216,652 | |
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; 463,728,262 and 462,355,725 shares issued, respectively | 464 | 462 | |
Paid-in capital in excess of par | 2,689,517 | 2,685,211 | |
Accumulated deficit | (1,558,786) | (1,533,112) | |
Treasury stock, at cost, 2,473,243 and 1,941,749 shares, respectively | (11,875) | (10,784) | |
Total stockholders' equity | 1,119,320 | 1,141,777 | |
Total liabilities and stockholders' equity | $ 4,691,162 | $ 4,723,222 | |
[1] | Future interest payable represents most of the interest due over the terms of our 9% Senior Secured Second Lien Notes due 2021 (the “2021 Senior Secured Notes”) and 9¼% Senior Secured Second Lien Notes due 2022 (the “2022 Senior Secured Notes”) and has been accounted for as debt in accordance with FASC 470-60, Troubled Debt Restructuring by Debtors. Our current maturities of long-term debt as of March 31, 2019 include $102.7 million of future interest payable related to the 2021 Senior Secured Notes and 2022 Senior Secured Notes that is due within the next twelve months. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||
Future interest payable - current | [1] | $ 120,258 | $ 105,125 |
Future interest payable - long-term | $ 2,643,307 | $ 2,664,211 | |
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 | 463,728,262 | 462,355,725 | |
Treasury stock, shares | 2,473,243 | 1,941,749 | |
Future interest payable on senior secured notes | |||
Debt Instrument [Line Items] | |||
Future interest payable - current | $ 102,667 | $ 85,303 | |
Future interest payable - long-term | $ 147,550 | $ 164,914 | |
[1] | Future interest payable represents most of the interest due over the terms of our 9% Senior Secured Second Lien Notes due 2021 (the “2021 Senior Secured Notes”) and 9¼% Senior Secured Second Lien Notes due 2022 (the “2022 Senior Secured Notes”) and has been accounted for as debt in accordance with FASC 470-60, Troubled Debt Restructuring by Debtors. Our current maturities of long-term debt as of March 31, 2019 include $102.7 million of future interest payable related to the 2021 Senior Secured Notes and 2022 Senior Secured Notes that is due within the next twelve months. |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues and other income | $ 305,452 | $ 353,234 |
Expenses | ||
Taxes other than income | 23,785 | 27,319 |
General and administrative expenses | 18,925 | 20,232 |
Interest, net of amounts capitalized of $10,534 and $8,452, respectively | 17,398 | 17,239 |
Depletion, depreciation, and amortization | 57,297 | 52,451 |
Commodity derivatives expense | 83,377 | 48,825 |
Other expenses | 3,079 | 2,328 |
Total expenses | 341,885 | 299,636 |
Income (loss) before income taxes | (36,433) | 53,598 |
Income tax provision (benefit) | (10,759) | 14,020 |
Net income (loss) | $ (25,674) | $ 39,578 |
Net income (loss) per common share | ||
Basic | $ (0.06) | $ 0.10 |
Diluted | $ (0.06) | $ 0.09 |
Weighted average common shares outstanding | ||
Basic | 451,720 | 392,742 |
Diluted | 451,720 | 451,543 |
Other income | ||
Revenues and other income | $ 2,305 | $ 5,661 |
Marketing and plant operating expenses | ||
Operating expenses | 12,045 | 12,424 |
Oil, natural gas, and related product sales | ||
Revenues and other income | 294,577 | 340,021 |
Operating expenses | 125,423 | 118,356 |
CO2 | ||
Revenues and other income | 8,570 | 7,552 |
Operating expenses | $ 556 | $ 462 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Expenses | ||
Capitalized interest | $ 10,534 | $ 8,452 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities | ||
Net income (loss) | $ (25,674) | $ 39,578 |
Adjustments to reconcile net income (loss) to cash flows from operating activities | ||
Depletion, depreciation, and amortization | 57,297 | 52,451 |
Deferred income taxes | (9,478) | 15,052 |
Stock-based compensation | 3,263 | 2,592 |
Commodity derivatives expense | 83,377 | 48,825 |
Receipt (payment) on settlements of commodity derivatives | 8,206 | (33,357) |
Debt issuance costs and discounts | 1,263 | 1,137 |
Other, net | 908 | (838) |
Changes in assets and liabilities, net of effects from acquisitions | ||
Accrued production receivable | (21,591) | (11,510) |
Trade and other receivables | 1,024 | 348 |
Other current and long-term assets | (387) | (1,886) |
Accounts payable and accrued liabilities | (35,966) | (19,817) |
Oil and natural gas production payable | 4,605 | (673) |
Other liabilities | (2,481) | (275) |
Net cash provided by operating activities | 64,366 | 91,627 |
Cash flows from investing activities | ||
Oil and natural gas capital expenditures | (86,986) | (56,669) |
Pipelines and plants capital expenditures | (1,682) | (156) |
Net proceeds from sales of oil and natural gas properties and equipment | 104 | 1,522 |
Other | (3,237) | 3,927 |
Net cash used in investing activities | (91,801) | (51,376) |
Cash flows from financing activities | ||
Bank repayments | (103,000) | (571,653) |
Bank borrowings | 103,000 | 546,653 |
Pipeline financing and capital lease debt repayments | (4,108) | (6,287) |
Other | (1,099) | (9,291) |
Net cash used in financing activities | (5,207) | (40,578) |
Net decrease in cash, cash equivalents, and restricted cash | (32,642) | (327) |
Cash, cash equivalents, and restricted cash at beginning of period | 54,949 | 15,992 |
Cash, cash equivalents, and restricted cash at end of period | $ 22,307 | $ 15,665 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock ($.001 Par Value) | Paid-In Capital in Excess of Par | Retained Earnings (Accumulated Deficit) | Treasury Stock (at cost) |
Beginning balance, shares at Dec. 31, 2017 | 402,549,346 | 457,041 | |||
Beginning balance at Dec. 31, 2017 | $ 648,165 | $ 403 | $ 2,507,828 | $ (1,855,810) | $ (4,256) |
Issued or purchased pursuant to stock compensation plans, shares | 378,595 | ||||
Stock-based compensation, value | 3,303 | 3,303 | |||
Tax withholding - stock compensation, shares | 330,826 | ||||
Tax withholding - stock compensation, value | (828) | $ (828) | |||
Net income (loss) | 39,578 | ||||
Ending balance, shares at Mar. 31, 2018 | 402,927,941 | 787,867 | |||
Ending balance at Mar. 31, 2018 | $ 690,218 | $ 403 | 2,511,131 | (1,816,232) | $ (5,084) |
Beginning balance, shares at Dec. 31, 2018 | 462,355,725 | 462,355,725 | 1,941,749 | ||
Beginning balance at Dec. 31, 2018 | $ 1,141,777 | $ 462 | 2,685,211 | (1,533,112) | $ (10,784) |
Issued or purchased pursuant to stock compensation plans, shares | 1,331,050 | ||||
Issued or purchased pursuant to stock compensation plans, value | 2 | $ 2 | 0 | ||
Issued pursuant to directors' compensation plan, shares | 41,487 | ||||
Stock-based compensation, value | 4,306 | 4,306 | |||
Tax withholding - stock compensation, shares | 531,494 | ||||
Tax withholding - stock compensation, value | (1,091) | $ (1,091) | |||
Net income (loss) | $ (25,674) | (25,674) | |||
Ending balance, shares at Mar. 31, 2019 | 463,728,262 | 463,728,262 | 2,473,243 | ||
Ending balance at Mar. 31, 2019 | $ 1,119,320 | $ 464 | $ 2,689,517 | $ (1,558,786) | $ (11,875) |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018 (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, 2019 , our consolidated results of operations for the three months ended March 31, 2019 and 2018 , our consolidated cash flows for the three months ended March 31, 2019 and 2018 , and our consolidated statements of changes in stockholders’ equity for the three months ended March 31, 2019 and 2018 . Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on our reported net income, current assets, total assets, current liabilities, total liabilities or stockholders’ equity. Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported within the Unaudited Condensed Consolidated Balance Sheets to “Cash, cash equivalents, and restricted cash at end of period” as reported within the Unaudited Condensed Consolidated Statements of Cash Flows: In thousands March 31, 2019 December 31, 2018 Cash and cash equivalents $ 5,749 $ 38,560 Restricted cash included in other assets 16,558 16,389 Total cash, cash equivalents, and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows $ 22,307 $ 54,949 Amounts included in restricted cash included in “Other assets” in the accompanying Unaudited Condensed Consolidated Balance Sheets represent escrow accounts that are legally restricted for certain of our asset retirement obligations. Our prior-year quarterly report on Form 10-Q for the period ended March 31, 2018, filed with the SEC on May 10, 2018 previously disclosed balances of certain U.S. Treasury Notes of $24.6 million and $25.2 million as of January 1, 2018 and March 31, 2018, respectively, that should have been excluded from “Cash, cash equivalents, and restricted cash” on the Consolidated Statements of Cash Flows. Accordingly, “Cash, cash equivalents, and restricted cash” as of January 1, 2018 and March 31, 2018, originally reported as $40.6 million and $40.9 million , respectively, should have been reported as $16.0 million and $15.7 million , respectively. In addition, changes in the U.S. Treasury Notes of $0.6 million during the three months ended March 31, 2018 should have been included in net cash used in investing activities. Accordingly, net cash used in investing activities for the three months ended March 31, 2018, originally reported as $50.8 million , should have been $51.4 million . These revisions had no impact on the Company’s financial condition or results of operations for the periods presented. Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is calculated in the same manner, but includes the impact of potentially dilutive securities. Potentially dilutive securities consist of nonvested restricted stock, nonvested performance-based equity awards, and shares into which our previously-outstanding convertible senior notes were convertible. The following table sets forth the reconciliations of net income (loss) and weighted average shares used for purposes of calculating the basic and diluted net income (loss) per common share for the periods indicated: Three Months Ended March 31, In thousands 2019 2018 Numerator Net income (loss) – basic $ (25,674 ) $ 39,578 Effect of potentially dilutive securities Interest on convertible senior notes — 501 Net income (loss) – diluted $ (25,674 ) $ 40,079 Denominator Weighted average common shares outstanding – basic 451,720 392,742 Effect of potentially dilutive securities Restricted stock and performance-based equity awards — 5,169 Convertible senior notes — 53,632 Weighted average common shares outstanding – diluted 451,720 451,543 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 income (loss) per common share (although time-vesting restricted stock is issued and outstanding upon grant). For purposes of calculating diluted weighted average common shares during the three months ended March 31, 2018 , the nonvested restricted stock and performance-based equity awards are included in the computation using the treasury stock method, with the deemed proceeds equal to the average unrecognized compensation during the period, and for the shares underlying the previously-outstanding convertible senior notes as if the convertible senior notes were converted at the beginning of the 2018 period. In April and May 2018, all outstanding convertible senior notes converted into shares of Denbury common stock, resulting in the issuance of 55.2 million shares of our common stock upon conversion. The following securities could potentially dilute earnings per share in the future, but were excluded from the computation of diluted net income (loss) per share, as their effect would have been antidilutive: Three Months Ended March 31, In thousands 2019 2018 Stock appreciation rights 2,091 2,954 Restricted stock and performance-based equity awards 8,350 431 Recent Accounting Pronouncements Recently Adopted Leases. Effective January 1, 2019, we adopted Accounting Standards Update (“ASU”) 2016-02, Leases (“ASU 2016-02”), and ASU 2018-01, Leases (Topic 842) – Land Easement Practical Expedient for Transition to Topic 842 , using the modified retrospective method with an application date of January 1, 2019. ASU 2016-02 does not apply to mineral leases or leases that convey the right to explore for or use the land on which oil, natural gas, and similar natural resources are contained. We elected the practical expedients provided in the new ASUs that allow historical lease classification of existing leases, allow entities to recognize leases with terms of one year or less in their statement of operations, allow lease and non-lease components to be combined, and carry forward our accounting treatment for existing land easement agreements. The adoption of the new standards resulted in the recognition of $39.1 million of lease assets and $55.8 million of lease liabilities ( $16.7 million of which related to previously-existing lease obligations) as of January 1, 2019, in our Unaudited Condensed Consolidated Balance Sheets, but did not materially impact our results of operations and had no impact on our cash flows. The additional lease assets and liabilities recorded on our balance sheets primarily related to our operating leases for office space, as the accounting for our financing leases and pipeline financings was relatively unchanged. Not Yet Adopted Fair Value Measurement. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurements (“ASU 2018-13”). ASU 2018-13 adds, modifies, or removes certain disclosure requirements for recurring and nonrecurring fair value measurements based on the FASB’s consideration of costs and benefits. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and early adoption is permitted. Entities must adopt the amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty prospectively, and all other amendments should be applied retrospectively to all periods presented. The adoption of ASU 2018-13 is currently not expected to have a material effect on our consolidated financial statements, but may require enhanced footnote disclosures. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 2. Revenue Recognition We record revenue in accordance with Financial Accounting Standards Board Codification (“FASC”) Topic 606, Revenue from Contracts with Customers . The core principle of FASC Topic 606 is that an entity should recognize revenue for the transfer of goods or services equal to the amount of consideration that it expects to be entitled to receive for those goods or services. Once we have delivered the volume of commodity to the delivery point and the customer takes delivery and possession, we are entitled to payment and we invoice the customer for such delivered production. Payment under most oil and CO 2 contracts is made within a month following product delivery and for natural gas and NGL contracts is generally made within two months following delivery. Timing of revenue recognition may differ from the timing of invoicing to customers; however, as the right to consideration after delivery is unconditional based on only the passage of time before payment of the consideration is due, upon delivery we record a receivable in “Accrued production receivable” in our Unaudited Condensed Consolidated Balance Sheets, which was $147.4 million and $125.8 million as of March 31, 2019 and December 31, 2018 , respectively. Disaggregation of Revenue The following table summarizes our revenues by product type for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, In thousands 2019 2018 Oil sales $ 291,965 $ 337,406 Natural gas sales 2,612 2,615 CO 2 sales and transportation fees 8,570 7,552 Total revenues $ 303,147 $ 347,573 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 3. Leases We evaluate contracts for leasing arrangements at inception. We lease office space, equipment, and vehicles that have non-cancelable lease terms. Leases with a term of 12 months or less are not recorded on our balance sheet. The table below reflects our operating lease assets and liabilities, which primarily consists of our office leases, and finance lease assets and liabilities: March 31, In thousands 2019 Operating leases Operating lease right-of-use assets $ 37,913 Operating lease liabilities - current $ 7,070 Operating lease liabilities - long-term 47,056 Total operating lease liabilities $ 54,126 Finance leases Other property and equipment $ 12,352 Accumulated depreciation (10,491 ) Other property and equipment, net $ 1,861 Current maturities of long-term debt $ 1,671 Long-term debt, net of current portion 348 Total finance lease liabilities $ 2,019 The majority of our leases contain renewal options, typically exercisable at our sole discretion. We record right-of-use assets and liabilities based on the present value of lease payments over the initial lease term, unless the option to extend the lease is reasonably certain, and utilize our incremental borrowing rate based on information available at the lease commencement date. The following weighted average remaining lease terms and discount rates related to our outstanding leases: March 31, 2019 Weighted Average Remaining Lease Term Operating leases 6.3 years Finance leases 1.2 years Weighted Average Discount Rate Operating leases 6.8 % Finance leases 2.5 % Lease costs for operating leases or leases with a term of 12 months or less are recognized on a straight-line basis over the lease term. For finance leases, interest on the lease liability and the amortization of the right-of-use asset are recognized separately, with the depreciable life reflective of the expected lease term. We have subleased part of the office space included in our operating leases for which we receive rental payments. The following table summarizes the components of lease costs and sublease income: Three Months Ended March 31, In thousands Income Statement Presentation 2019 Operating lease cost General and administrative expenses $ 2,415 Finance lease cost Amortization of right-of-use assets Depletion, depreciation, and amortization $ 870 Interest on lease liabilities Interest expense 30 Total finance lease cost $ 900 Sublease income General and administrative expenses $ 1,036 Our statement of cash flows included the following activity related to our operating and finance leases: Three Months Ended March 31, In thousands 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 2,893 Operating cash flows from interest on finance leases 30 Financing cash flows from finance leases 935 Right-of-use assets obtained in exchange for lease obligations Operating leases 277 Finance leases — The following table summarizes by year the maturities of our lease liabilities as of March 31, 2019 : Operating Finance In thousands Leases Leases 2019 $ 8,009 $ 1,276 2020 9,874 775 2021 10,043 — 2022 10,260 — 2023 10,300 — Thereafter 18,454 — Total minimum lease payments 66,940 2,051 Less: Amount representing interest (12,814 ) (32 ) Present value of minimum lease payments $ 54,126 $ 2,019 The following table summarizes by year the remaining non-cancelable future payments under our leases, as accounted for under previous accounting guidance under FASC Topic 840, Leases , as of December 31, 2018: Operating In thousands Leases 2019 $ 10,690 2020 9,776 2021 10,007 2022 10,223 2023 10,262 Thereafter 18,169 Total minimum lease payments $ 69,127 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 4. Long-Term Debt The table below reflects long-term debt and capital lease obligations outstanding as of the dates indicated: March 31, December 31, In thousands 2019 2018 Senior Secured Bank Credit Agreement $ — $ — 9% Senior Secured Second Lien Notes due 2021 614,919 614,919 9¼% Senior Secured Second Lien Notes due 2022 455,668 455,668 7½% Senior Secured Second Lien Notes due 2024 450,000 450,000 6⅜% Senior Subordinated Notes due 2021 203,545 203,545 5½% Senior Subordinated Notes due 2022 314,662 314,662 4⅝% Senior Subordinated Notes due 2023 307,978 307,978 Pipeline financings 176,900 180,073 Capital lease obligations 2,019 5,362 Total debt principal balance 2,525,691 2,532,207 Future interest payable (1) 250,217 250,218 Debt issuance costs (12,343 ) (13,089 ) Total debt, net of debt issuance costs 2,763,565 2,769,336 Less: current maturities of long-term debt (1) (120,258 ) (105,125 ) Long-term debt and capital lease obligations $ 2,643,307 $ 2,664,211 (1) Future interest payable represents most of the interest due over the terms of our 9% Senior Secured Second Lien Notes due 2021 (the “2021 Senior Secured Notes”) and 9¼% Senior Secured Second Lien Notes due 2022 (the “2022 Senior Secured Notes”) and has been accounted for as debt in accordance with FASC 470-60, Troubled Debt Restructuring by Debtors . Our current maturities of long-term debt as of March 31, 2019 include $102.7 million of future interest payable related to the 2021 Senior Secured Notes and 2022 Senior Secured Notes that is due within the next twelve months. The ultimate parent company in our corporate structure, Denbury Resources Inc. (“DRI”), is the sole issuer of all of our outstanding senior secured and 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 (as amended, the “Bank Credit Agreement”), which has been amended periodically since that time. The Bank Credit Agreement is a senior secured revolving credit facility with a maturity date of December 9, 2021, provided that the maturity date may occur earlier (between February 2021 and August 2021) if the 2021 Senior Secured Notes due in May 2021 or 6⅜% Senior Subordinated Notes due in August 2021, respectively, are not repaid or refinanced by each of their respective maturity dates. As part of our spring 2019 semiannual redetermination, the borrowing base and lender commitments for our Bank Credit Agreement were reaffirmed at $615 million , with the next such redetermination being scheduled for November 2019. If our outstanding debt under the Bank Credit Agreement were to ever exceed the borrowing base, we would be required to repay the excess amount over a period not to exceed six months. We incur a commitment fee of 0.50% on the undrawn portion of the aggregate lender commitments under the Bank Credit Agreement. The Bank Credit Agreement contains certain financial performance covenants through the maturity of the facility, including the following: • A Consolidated Total Debt to Consolidated EBITDAX covenant, with such ratio not to exceed 5.25 to 1.0 through December 31, 2020, and 4.50 to 1.0 thereafter; • A consolidated senior secured debt to consolidated EBITDAX covenant, with such ratio not to exceed 2.5 to 1.0. Only debt under our Bank Credit Agreement is considered consolidated senior secured debt for purposes of this ratio; • A minimum permitted ratio of consolidated EBITDAX to consolidated interest charges of 1.25 to 1.0; and • A requirement to maintain a current ratio of 1.0 to 1.0. As of March 31, 2019 , we had no outstanding borrowings, and were in compliance with all debt covenants, under the Bank Credit Agreement. The above description of our Bank Credit Agreement is qualified by the express language and defined terms contained in the Bank Credit Agreement and the amendments thereto, each of which are filed as exhibits to our periodic reports filed with the SEC. |
Commodity Derivative Contracts
Commodity Derivative Contracts | 3 Months Ended |
Mar. 31, 2019 | |
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” 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, fixed-price swaps enhanced with a sold put, and basis swaps. 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, 2019 , 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, 2019 , none of which are classified as hedging instruments in accordance with the 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: 2019 Fixed-Price Swaps Apr – June NYMEX 3,500 $ 59.00 – 59.10 $ 59.05 $ — $ — $ — Apr – Dec Argus LLS 13,000 60.00 – 74.90 64.69 — — — 2019 Three-Way Collars (2) Apr – June NYMEX 18,500 $ 55.00 – 75.45 $ — $ 48.84 $ 56.84 $ 69.94 Apr – June Argus LLS 5,500 62.00 – 86.00 — 54.73 63.09 79.93 July – Dec NYMEX 22,000 55.00 – 75.45 — 48.55 56.55 69.17 July – Dec Argus LLS 5,500 62.00 – 86.00 — 54.73 63.09 79.93 2020 Fixed-Price Swaps Jan – Dec Argus LLS 2,000 $ 60.72 – 61.05 $ 60.89 $ — $ — $ — 2020 Three-Way Collars (2) Jan – June NYMEX 8,000 $ 57.50 – 82.65 $ — $ 49.21 $ 58.86 $ 66.69 Jan – June Argus LLS 3,000 62.50 – 87.10 — 53.83 63.83 73.93 July – Dec NYMEX 6,000 58.25 – 82.65 — 49.59 59.13 67.47 July – Dec Argus LLS 1,000 65.00 – 87.10 — 55.00 65.00 86.80 (1) Ranges presented for fixed-price swaps represent the lowest and highest fixed prices of all open contracts for the period presented. For three-way collars, ranges represent the lowest floor price and highest ceiling price for all open contracts for the period presented. (2) 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, 2019 | |
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). Our costless collars and the sold put features of our 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. As of March 31, 2019 , instruments in this category include non-exchange-traded three-way collars that are based on regional pricing other than NYMEX (e.g., Light Louisiana Sweet). The valuation models utilized for 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 $100 thousand in the fair value of these instruments as of March 31, 2019 . 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, 2019 Assets Oil derivative contracts – current $ — $ 11,259 $ 2,753 $ 14,012 Oil derivative contracts – long-term — 987 1,035 2,022 Total Assets $ — $ 12,246 $ 3,788 $ 16,034 Liabilities Oil derivative contracts – current $ — $ (9,965 ) $ (72 ) $ (10,037 ) Oil derivative contracts – long-term — (276 ) (30 ) (306 ) Total Liabilities $ — $ (10,241 ) $ (102 ) $ (10,343 ) December 31, 2018 Assets Oil derivative contracts – current $ — $ 81,621 $ 11,459 $ 93,080 Oil derivative contracts – long-term — 2,030 2,165 4,195 Total Assets $ — $ 83,651 $ 13,624 $ 97,275 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” 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, 2019 and 2018 : Three Months Ended March 31, In thousands 2019 2018 Fair value of Level 3 instruments, beginning of period $ 13,624 $ — Fair value losses on commodity derivatives (9,047 ) — Receipts on settlements of commodity derivatives (891 ) — Fair value of Level 3 instruments, end of period $ 3,686 $ — The amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to assets or liabilities still held at the reporting date $ (6,481 ) $ — We utilize an income approach to value our Level 3 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 $ 3,686 Discounted cash flow / Black-Scholes Volatility of Light Louisiana Sweet for settlement periods beginning after March 31, 2019 12.3% – 30.5% 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 the fair value of our fixed-rate long-term debt using observable market data. The fair values of our senior secured second lien notes and senior subordinated notes are based on quoted market prices, which are considered Level 1 measurements under the fair value hierarchy. The estimated fair value of the principal amount of our debt as of March 31, 2019 and December 31, 2018 , excluding pipeline financing and capital lease obligations, was $1,990.0 million and $1,886.1 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, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7. Commitments and Contingencies Litigation 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. We accrue for losses from litigation and claims if we determine that a loss is probable and the amount can be reasonably estimated. Riley Ridge Helium Supply Contract Claim As part of our 2010 and 2011 acquisitions of the Riley Ridge Unit and associated gas processing facility that was under construction, the Company assumed a 20 -year helium supply contract under which we agreed to supply the helium separated from the full well stream by operation of the gas processing facility to a third-party purchaser, APMTG Helium, LLC (“APMTG”). The helium supply contract provides for the delivery of a minimum contracted quantity of helium, with liquidated damages payable if specified quantities of helium are not supplied in accordance with the terms of the contract. The liquidated damages are specified in the contract at up to $8.0 million per contract year and are capped at an aggregate of $46.0 million over the term of the contract. As the gas processing facility has been shut-in since mid-2014 due to significant technical issues, we have not been able to supply helium under the helium supply contract. In a case filed in November 2014 in the Ninth Judicial District Court of Sublette County, Wyoming, APMTG claimed multiple years of liquidated damages for non-delivery of volumes of helium specified under the helium supply contract. The Company claimed that its contractual obligations were excused by virtue of events that fall within the force majeure provisions in the helium supply contract. On March 11, 2019, the trial court entered a final judgment that a force majeure condition did exist, but the Company’s performance was excused by the force majeure provisions of the contract for only a 35-day period in 2014, and as a result the Company should pay APMTG liquidated damages and interest thereon for those time periods from contract commencement to the close of evidence (November 29, 2017) when the Company’s performance was not excused as provided in the contract. The Company’s position continues to be that its contractual obligations have been and continue to be excused by events that fall within the force majeure provisions in the helium supply contract. On April 5, 2019, the Company filed a motion for amendment of judgment with the trial court requesting that the trial court amend certain of its findings of fact and conclusions of law with respect to the Company’s claims that a force majeure event excused the Company’s performance for a specified period of time after contract commencement. The Company intends to continue to vigorously defend its position and pursue all of its rights, including its right to appeal any portion of the trial court’s ruling to the Wyoming Supreme Court, the timing and results of which cannot be predicted at this time. Subject to the Company’s motion for amendment of judgment, and absent reversal of the trial court’s factual or legal conclusions on appeal (the timing of which is currently unpredictable), the Company anticipates total liquidated damages would equal the $46.0 million aggregate cap under the helium supply contract (including $14.2 million of liquidated damages for the contract years ending July 31, 2018 and July 31, 2019) plus $3.8 million of associated costs through March 31, 2019, for a total of $49.8 million , which the Company has included in “Other liabilities” in our Unaudited Condensed Consolidated Balance Sheets as of March 31, 2019. |
Additional Balance Sheet Detail
Additional Balance Sheet Details | 3 Months Ended |
Mar. 31, 2019 | |
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 2019 2018 Accounts payable $ 31,014 $ 28,177 Accrued lease operating expenses 27,274 32,287 Accrued compensation 24,221 42,881 Accrued interest 24,080 31,391 Taxes payable 10,792 18,897 Accrued exploration and development costs 8,295 19,519 Other 21,648 25,228 Total $ 147,324 $ 198,380 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018 (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, 2019 , our consolidated results of operations for the three months ended March 31, 2019 and 2018 , our consolidated cash flows for the three months ended March 31, 2019 and 2018 , and our consolidated statements of changes in stockholders’ equity for the three months ended March 31, 2019 and 2018 . |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on our reported net income, current assets, total assets, current liabilities, total liabilities or stockholders’ equity. |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported within the Unaudited Condensed Consolidated Balance Sheets to “Cash, cash equivalents, and restricted cash at end of period” as reported within the Unaudited Condensed Consolidated Statements of Cash Flows: In thousands March 31, 2019 December 31, 2018 Cash and cash equivalents $ 5,749 $ 38,560 Restricted cash included in other assets 16,558 16,389 Total cash, cash equivalents, and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows $ 22,307 $ 54,949 Amounts included in restricted cash included in “Other assets” in the accompanying Unaudited Condensed Consolidated Balance Sheets represent escrow accounts that are legally restricted for certain of our asset retirement obligations. |
Net Income per Common Share | Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is calculated in the same manner, but includes the impact of potentially dilutive securities. Potentially dilutive securities consist of nonvested restricted stock, nonvested performance-based equity awards, and shares into which our previously-outstanding convertible senior notes were convertible. The following table sets forth the reconciliations of net income (loss) and weighted average shares used for purposes of calculating the basic and diluted net income (loss) per common share for the periods indicated: Three Months Ended March 31, In thousands 2019 2018 Numerator Net income (loss) – basic $ (25,674 ) $ 39,578 Effect of potentially dilutive securities Interest on convertible senior notes — 501 Net income (loss) – diluted $ (25,674 ) $ 40,079 Denominator Weighted average common shares outstanding – basic 451,720 392,742 Effect of potentially dilutive securities Restricted stock and performance-based equity awards — 5,169 Convertible senior notes — 53,632 Weighted average common shares outstanding – diluted 451,720 451,543 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 income (loss) per common share (although time-vesting restricted stock is issued and outstanding upon grant). For purposes of calculating diluted weighted average common shares during the three months ended March 31, 2018 , the nonvested restricted stock and performance-based equity awards are included in the computation using the treasury stock method, with the deemed proceeds equal to the average unrecognized compensation during the period, and for the shares underlying the previously-outstanding convertible senior notes as if the convertible senior notes were converted at the beginning of the 2018 period. In April and May 2018, all outstanding convertible senior notes converted into shares of Denbury common stock, resulting in the issuance of 55.2 million shares of our common stock upon conversion. The following securities could potentially dilute earnings per share in the future, but were excluded from the computation of diluted net income (loss) per share, as their effect would have been antidilutive: Three Months Ended March 31, In thousands 2019 2018 Stock appreciation rights 2,091 2,954 Restricted stock and performance-based equity awards 8,350 431 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Leases. Effective January 1, 2019, we adopted Accounting Standards Update (“ASU”) 2016-02, Leases (“ASU 2016-02”), and ASU 2018-01, Leases (Topic 842) – Land Easement Practical Expedient for Transition to Topic 842 , using the modified retrospective method with an application date of January 1, 2019. ASU 2016-02 does not apply to mineral leases or leases that convey the right to explore for or use the land on which oil, natural gas, and similar natural resources are contained. We elected the practical expedients provided in the new ASUs that allow historical lease classification of existing leases, allow entities to recognize leases with terms of one year or less in their statement of operations, allow lease and non-lease components to be combined, and carry forward our accounting treatment for existing land easement agreements. The adoption of the new standards resulted in the recognition of $39.1 million of lease assets and $55.8 million of lease liabilities ( $16.7 million of which related to previously-existing lease obligations) as of January 1, 2019, in our Unaudited Condensed Consolidated Balance Sheets, but did not materially impact our results of operations and had no impact on our cash flows. The additional lease assets and liabilities recorded on our balance sheets primarily related to our operating leases for office space, as the accounting for our financing leases and pipeline financings was relatively unchanged. Not Yet Adopted Fair Value Measurement. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurements (“ASU 2018-13”). ASU 2018-13 adds, modifies, or removes certain disclosure requirements for recurring and nonrecurring fair value measurements based on the FASB’s consideration of costs and benefits. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and early adoption is permitted. Entities must adopt the amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty prospectively, and all other amendments should be applied retrospectively to all periods presented. The adoption of ASU 2018-13 is currently not expected to have a material effect on our consolidated financial statements, but may require enhanced footnote disclosures. |
Revenue Recognition | We record revenue in accordance with Financial Accounting Standards Board Codification (“FASC”) Topic 606, Revenue from Contracts with Customers . The core principle of FASC Topic 606 is that an entity should recognize revenue for the transfer of goods or services equal to the amount of consideration that it expects to be entitled to receive for those goods or services. Once we have delivered the volume of commodity to the delivery point and the customer takes delivery and possession, we are entitled to payment and we invoice the customer for such delivered production. Payment under most oil and CO 2 contracts is made within a month following product delivery and for natural gas and NGL contracts is generally made within two months following delivery. Timing of revenue recognition may differ from the timing of invoicing to customers; however, as the right to consideration after delivery is unconditional based on only the passage of time before payment of the consideration is due, upon delivery we record a receivable in “Accrued production receivable” in our Unaudited Condensed Consolidated Balance Sheets, which was $147.4 million and $125.8 million as of March 31, 2019 and December 31, 2018 , respectively. |
Leases | We evaluate contracts for leasing arrangements at inception. We lease office space, equipment, and vehicles that have non-cancelable lease terms. Leases with a term of 12 months or less are not recorded on our balance sheet. Lease costs for operating leases or leases with a term of 12 months or less are recognized on a straight-line basis over the lease term. For finance leases, interest on the lease liability and the amortization of the right-of-use asset are recognized separately, with the depreciable life reflective of the expected lease term. We have subleased part of the office space included in our operating leases for which we receive rental payments. The majority of our leases contain renewal options, typically exercisable at our sole discretion. We record right-of-use assets and liabilities based on the present value of lease payments over the initial lease term, unless the option to extend the lease is reasonably certain, and utilize our incremental borrowing rate based on information available at the lease commencement date. |
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” 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, fixed-price swaps enhanced with a sold put, and basis swaps. 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, 2019 , 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). Our costless collars and the sold put features of our 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. As of March 31, 2019 , instruments in this category include non-exchange-traded three-way collars that are based on regional pricing other than NYMEX (e.g., Light Louisiana Sweet). The valuation models utilized for 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 $100 thousand in the fair value of these instruments as of March 31, 2019 . 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, 2019 | |
Accounting Policies [Abstract] | |
Schedule of cash, cash equivalents, and restricted cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported within the Unaudited Condensed Consolidated Balance Sheets to “Cash, cash equivalents, and restricted cash at end of period” as reported within the Unaudited Condensed Consolidated Statements of Cash Flows: In thousands March 31, 2019 December 31, 2018 Cash and cash equivalents $ 5,749 $ 38,560 Restricted cash included in other assets 16,558 16,389 Total cash, cash equivalents, and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows $ 22,307 $ 54,949 |
Schedule of earnings per share, basic and diluted reconciliation | The following table sets forth the reconciliations of net income (loss) and weighted average shares used for purposes of calculating the basic and diluted net income (loss) per common share for the periods indicated: Three Months Ended March 31, In thousands 2019 2018 Numerator Net income (loss) – basic $ (25,674 ) $ 39,578 Effect of potentially dilutive securities Interest on convertible senior notes — 501 Net income (loss) – diluted $ (25,674 ) $ 40,079 Denominator Weighted average common shares outstanding – basic 451,720 392,742 Effect of potentially dilutive securities Restricted stock and performance-based equity awards — 5,169 Convertible senior notes — 53,632 Weighted average common shares outstanding – diluted 451,720 451,543 |
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 income (loss) per share, as their effect would have been antidilutive: Three Months Ended March 31, In thousands 2019 2018 Stock appreciation rights 2,091 2,954 Restricted stock and performance-based equity awards 8,350 431 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes our revenues by product type for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, In thousands 2019 2018 Oil sales $ 291,965 $ 337,406 Natural gas sales 2,612 2,615 CO 2 sales and transportation fees 8,570 7,552 Total revenues $ 303,147 $ 347,573 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Lease Assets and Liabilities | The table below reflects our operating lease assets and liabilities, which primarily consists of our office leases, and finance lease assets and liabilities: March 31, In thousands 2019 Operating leases Operating lease right-of-use assets $ 37,913 Operating lease liabilities - current $ 7,070 Operating lease liabilities - long-term 47,056 Total operating lease liabilities $ 54,126 Finance leases Other property and equipment $ 12,352 Accumulated depreciation (10,491 ) Other property and equipment, net $ 1,861 Current maturities of long-term debt $ 1,671 Long-term debt, net of current portion 348 Total finance lease liabilities $ 2,019 |
Schedule of Weighted Average Lease Terms and Discount Rates | The following weighted average remaining lease terms and discount rates related to our outstanding leases: March 31, 2019 Weighted Average Remaining Lease Term Operating leases 6.3 years Finance leases 1.2 years Weighted Average Discount Rate Operating leases 6.8 % Finance leases 2.5 % |
Schedule of Lease Costs | The following table summarizes the components of lease costs and sublease income: Three Months Ended March 31, In thousands Income Statement Presentation 2019 Operating lease cost General and administrative expenses $ 2,415 Finance lease cost Amortization of right-of-use assets Depletion, depreciation, and amortization $ 870 Interest on lease liabilities Interest expense 30 Total finance lease cost $ 900 Sublease income General and administrative expenses $ 1,036 |
Supplemental Cash Flow Information Related to Leases | Our statement of cash flows included the following activity related to our operating and finance leases: Three Months Ended March 31, In thousands 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 2,893 Operating cash flows from interest on finance leases 30 Financing cash flows from finance leases 935 Right-of-use assets obtained in exchange for lease obligations Operating leases 277 Finance leases — |
Schedule of Maturities of Operating and Finance Lease Liabilities | The following table summarizes by year the maturities of our lease liabilities as of March 31, 2019 : Operating Finance In thousands Leases Leases 2019 $ 8,009 $ 1,276 2020 9,874 775 2021 10,043 — 2022 10,260 — 2023 10,300 — Thereafter 18,454 — Total minimum lease payments 66,940 2,051 Less: Amount representing interest (12,814 ) (32 ) Present value of minimum lease payments $ 54,126 $ 2,019 |
Schedule of operating long-term commitments which require future minimum lease payments | The following table summarizes by year the remaining non-cancelable future payments under our leases, as accounted for under previous accounting guidance under FASC Topic 840, Leases , as of December 31, 2018: Operating In thousands Leases 2019 $ 10,690 2020 9,776 2021 10,007 2022 10,223 2023 10,262 Thereafter 18,169 Total minimum lease payments $ 69,127 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Components of Long-Term Debt | The table below reflects long-term debt and capital lease obligations outstanding as of the dates indicated: March 31, December 31, In thousands 2019 2018 Senior Secured Bank Credit Agreement $ — $ — 9% Senior Secured Second Lien Notes due 2021 614,919 614,919 9¼% Senior Secured Second Lien Notes due 2022 455,668 455,668 7½% Senior Secured Second Lien Notes due 2024 450,000 450,000 6⅜% Senior Subordinated Notes due 2021 203,545 203,545 5½% Senior Subordinated Notes due 2022 314,662 314,662 4⅝% Senior Subordinated Notes due 2023 307,978 307,978 Pipeline financings 176,900 180,073 Capital lease obligations 2,019 5,362 Total debt principal balance 2,525,691 2,532,207 Future interest payable (1) 250,217 250,218 Debt issuance costs (12,343 ) (13,089 ) Total debt, net of debt issuance costs 2,763,565 2,769,336 Less: current maturities of long-term debt (1) (120,258 ) (105,125 ) Long-term debt and capital lease obligations $ 2,643,307 $ 2,664,211 (1) Future interest payable represents most of the interest due over the terms of our 9% Senior Secured Second Lien Notes due 2021 (the “2021 Senior Secured Notes”) and 9¼% Senior Secured Second Lien Notes due 2022 (the “2022 Senior Secured Notes”) and has been accounted for as debt in accordance with FASC 470-60, Troubled Debt Restructuring by Debtors . Our current maturities of long-term debt as of March 31, 2019 include $102.7 million of future interest payable related to the 2021 Senior Secured Notes and 2022 Senior Secured Notes that is due within the next twelve months. |
Commodity Derivative Contracts
Commodity Derivative Contracts (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity derivative contracts not classified as hedging instruments | The following table summarizes our commodity derivative contracts as of March 31, 2019 , none of which are classified as hedging instruments in accordance with the FASC Derivatives and Hedging topic: Months Index Price Volume (Barrels per day) Contract Prices ($/Bbl) Range (1) Weighted Average Price Swap Sold Put Floor Ceiling Oil Contracts: 2019 Fixed-Price Swaps Apr – June NYMEX 3,500 $ 59.00 – 59.10 $ 59.05 $ — $ — $ — Apr – Dec Argus LLS 13,000 60.00 – 74.90 64.69 — — — 2019 Three-Way Collars (2) Apr – June NYMEX 18,500 $ 55.00 – 75.45 $ — $ 48.84 $ 56.84 $ 69.94 Apr – June Argus LLS 5,500 62.00 – 86.00 — 54.73 63.09 79.93 July – Dec NYMEX 22,000 55.00 – 75.45 — 48.55 56.55 69.17 July – Dec Argus LLS 5,500 62.00 – 86.00 — 54.73 63.09 79.93 2020 Fixed-Price Swaps Jan – Dec Argus LLS 2,000 $ 60.72 – 61.05 $ 60.89 $ — $ — $ — 2020 Three-Way Collars (2) Jan – June NYMEX 8,000 $ 57.50 – 82.65 $ — $ 49.21 $ 58.86 $ 66.69 Jan – June Argus LLS 3,000 62.50 – 87.10 — 53.83 63.83 73.93 July – Dec NYMEX 6,000 58.25 – 82.65 — 49.59 59.13 67.47 July – Dec Argus LLS 1,000 65.00 – 87.10 — 55.00 65.00 86.80 (1) Ranges presented for fixed-price swaps represent the lowest and highest fixed prices of all open contracts for the period presented. For three-way collars, ranges represent the lowest floor price and highest ceiling price for all open contracts for the period presented. (2) 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, 2019 | |
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, 2019 Assets Oil derivative contracts – current $ — $ 11,259 $ 2,753 $ 14,012 Oil derivative contracts – long-term — 987 1,035 2,022 Total Assets $ — $ 12,246 $ 3,788 $ 16,034 Liabilities Oil derivative contracts – current $ — $ (9,965 ) $ (72 ) $ (10,037 ) Oil derivative contracts – long-term — (276 ) (30 ) (306 ) Total Liabilities $ — $ (10,241 ) $ (102 ) $ (10,343 ) December 31, 2018 Assets Oil derivative contracts – current $ — $ 81,621 $ 11,459 $ 93,080 Oil derivative contracts – long-term — 2,030 2,165 4,195 Total Assets $ — $ 83,651 $ 13,624 $ 97,275 |
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, 2019 and 2018 : Three Months Ended March 31, In thousands 2019 2018 Fair value of Level 3 instruments, beginning of period $ 13,624 $ — Fair value losses on commodity derivatives (9,047 ) — Receipts on settlements of commodity derivatives (891 ) — Fair value of Level 3 instruments, end of period $ 3,686 $ — The amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to assets or liabilities still held at the reporting date $ (6,481 ) $ — |
Qualitative 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 $ 3,686 Discounted cash flow / Black-Scholes Volatility of Light Louisiana Sweet for settlement periods beginning after March 31, 2019 12.3% – 30.5% |
Additional Balance Sheet Deta_2
Additional Balance Sheet Details (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Table Text Block [Abstract] | |
Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities March 31, December 31, In thousands 2019 2018 Accounts payable $ 31,014 $ 28,177 Accrued lease operating expenses 27,274 32,287 Accrued compensation 24,221 42,881 Accrued interest 24,080 31,391 Taxes payable 10,792 18,897 Accrued exploration and development costs 8,295 19,519 Other 21,648 25,228 Total $ 147,324 $ 198,380 |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Cash, Cash Equivalents, and Restricted Cash) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |||||
Cash and cash equivalents | $ 5,749 | $ 38,560 | |||
Restricted cash included in other assets | 16,558 | 16,389 | |||
Total cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statement of cash flows | $ 22,307 | $ 54,949 | $ 15,665 | $ 16,000 | $ 15,992 |
Basis of Presentation (Reconcil
Basis of Presentation (Reconciliation of Weighted Average Shares Table) (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator | ||
Net income (loss) - basic | $ (25,674) | $ 39,578 |
Interest on convertible senior notes | 0 | 501 |
Net income (loss) - diluted | $ (25,674) | $ 40,079 |
Denominator | ||
Weighted average common shares outstanding - basic | 451,720 | 392,742 |
Restricted stock and performance-based equity awards | 0 | 5,169 |
Convertible senior notes | 0 | 53,632 |
Weighted average common shares outstanding - diluted | 451,720 | 451,543 |
Basis of Presentation (Antidilu
Basis of Presentation (Antidilutive Securities) (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock appreciation rights | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,091 | 2,954 |
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 | 8,350 | 431 |
Basis of Presentation (Details
Basis of Presentation (Details Textuals) - USD ($) $ in Thousands, shares in Millions | 2 Months Ended | 3 Months Ended | ||||
May 31, 2018 | Mar. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||||||
Restricted cash | $ 16,558 | $ 16,389 | ||||
Debt Conversion, Converted Instrument, Shares Issued | 55.2 | |||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 15,665 | $ 22,307 | $ 54,949 | $ 16,000 | $ 15,992 | |
Net Cash Used in Investing Activities | 51,400 | |||||
Previously Reported | ||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 40,900 | 40,600 | ||||
Net Cash Used in Investing Activities | 50,800 | |||||
Adjustments | ||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 25,200 | $ 24,600 | ||||
Net Cash Used in Investing Activities | $ 600 |
Basis of Presentation (Effect o
Basis of Presentation (Effect of the Adoption of ASC Topic 842 Leases) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Lease Assets and Liabilities [Line Items] | |||
Operating Lease, Liability | $ 54,126 | $ 55,800 | |
Operating Lease, Right-of-Use Asset | $ 37,913 | 39,100 | $ 0 |
Pre-Existing Lease Liability [Member] | |||
Lease Assets and Liabilities [Line Items] | |||
Operating Lease, Liability | $ 16,700 |
Revenue Recognition (Disaggrega
Revenue Recognition (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenues and other income | $ 303,147 | $ 347,573 |
Oil sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues and other income | 291,965 | 337,406 |
Natural gas sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues and other income | 2,612 | 2,615 |
CO2 sales and transportation fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues and other income | $ 8,570 | $ 7,552 |
Revenue Recognition (Details Te
Revenue Recognition (Details Textuals) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Accrued production receivable | $ 147,379 | $ 125,788 |
Leases (Supplemental Balance Sh
Leases (Supplemental Balance Sheet Information Related To Leases) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Operating Leases | |||
Operating lease right-of-use assets | $ 37,913 | $ 39,100 | $ 0 |
Operating lease liabilities - current | 7,070 | 0 | |
Operating lease liabilities - long-term | 47,056 | $ 0 | |
Total operating lease liabilities | 54,126 | $ 55,800 | |
Finance leases | |||
Other property and equipment | 12,352 | ||
Accumulated depreciation | (10,491) | ||
Other property and equipment | 1,861 | ||
Current maturities of long-term debt | 1,671 | ||
Long-term debt, net of current portion | 348 | ||
Total finance lease liabilities | $ 2,019 |
Leases (Lease Term and Discount
Leases (Lease Term and Discount Rate) (Details) | Mar. 31, 2019 |
Weighted Average Remaining Lease Term | |
Operating leases | 6 years 3 months |
Finance leases | 1 year 2 months |
Weighted Average Discount Rate | |
Operating leases | 6.80% |
Finance leases | 2.50% |
Leases (Lease Operating Costs)
Leases (Lease Operating Costs) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 2,415 |
Finance lease cost | |
Amortization of right-of-use assets | 870 |
Interest on lease liabilities | 30 |
Total finance lease cost | 900 |
Sublease income | $ 1,036 |
Leases (Supplemental Cash Flow
Leases (Supplemental Cash Flow Information Related to Leases) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities | |
Operating cash flows from operating leases | $ 2,893 |
Operating cash flows from interest on finance leases | 30 |
Financing cash flows from finance leases | 935 |
Right-of-use assets obtained in exchange for lease obligations | |
Operating leases | 277 |
Finance leases | $ 0 |
Leases (Maturities Of Lease Lia
Leases (Maturities Of Lease Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 |
Operating Leases | ||
2019 | $ 8,009 | |
2020 | 9,874 | |
2021 | 10,043 | |
2022 | 10,260 | |
2023 | 10,300 | |
Thereafter | 18,454 | |
Total minimum lease payments | 66,940 | |
Less: Amount representing interest | (12,814) | |
Present value of minimum lease payments | 54,126 | $ 55,800 |
Finance Leases | ||
2019 | 1,276 | |
2020 | 775 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 0 | |
Total minimum lease payments | 2,051 | |
Less: Amount representing interest | (32) | |
Present value of minimum lease payments | $ 2,019 |
Leases (Prior Year-End Schedule
Leases (Prior Year-End Schedule of Future Operating Lease Payments) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 10,690 |
2020 | 9,776 |
2021 | 10,007 |
2022 | 10,223 |
2023 | 10,262 |
Thereafter | 18,169 |
Total minimum lease payments | $ 69,127 |
Long-Term Debt (Components of L
Long-Term Debt (Components of Long-Term Debt) (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||
Senior Secured Bank Credit Agreement | $ 0 | $ 0 | |
Pipeline financings | 176,900,000 | 180,073,000 | |
Capital lease obligations | 2,019,000 | 5,362,000 | |
Total debt principal balance | 2,525,691,000 | 2,532,207,000 | |
Future interest payable | [1] | 250,217,000 | 250,218,000 |
Debt issuance costs | (12,343,000) | (13,089,000) | |
Total debt, net of debt issuance costs | 2,763,565,000 | 2,769,336,000 | |
Less: current maturities of long-term debt | [1] | (120,258,000) | (105,125,000) |
Long-term Debt and Capital Lease Obligations | 2,643,307,000 | 2,664,211,000 | |
9% Senior Secured Second Lien Notes due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | $ 614,919,000 | 614,919,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | ||
9 1/4% Senior Secured Second Lien Notes due 2022 | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | $ 455,668,000 | 455,668,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 9.25% | ||
7 1/2% Senior Secured Second Lien Notes due 2024 | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | $ 450,000,000 | 450,000,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 7.50% | ||
6 3/8% Senior Subordinated Notes due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | $ 203,545,000 | 203,545,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 6.375% | ||
5 1/2% Senior Subordinated Notes due 2022 | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | $ 314,662,000 | 314,662,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 5.50% | ||
4 5/8% Senior Subordinated Notes due 2023 | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | $ 307,978,000 | 307,978,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 4.625% | ||
Future interest payable on senior secured notes | |||
Debt Instrument [Line Items] | |||
Less: current maturities of long-term debt | $ (102,667,000) | (85,303,000) | |
Long-term Debt and Capital Lease Obligations | $ 147,550,000 | $ 164,914,000 | |
[1] | Future interest payable represents most of the interest due over the terms of our 9% Senior Secured Second Lien Notes due 2021 (the “2021 Senior Secured Notes”) and 9¼% Senior Secured Second Lien Notes due 2022 (the “2022 Senior Secured Notes”) and has been accounted for as debt in accordance with FASC 470-60, Troubled Debt Restructuring by Debtors. Our current maturities of long-term debt as of March 31, 2019 include $102.7 million of future interest payable related to the 2021 Senior Secured Notes and 2022 Senior Secured Notes that is due within the next twelve months. |
Long-Term Debt (Details Textual
Long-Term Debt (Details Textuals) | 3 Months Ended | |
Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Debt Disclosure [Abstract] | ||
Interest in guarantor subsidiaries | 100.00% | |
Borrowing base | $ 615,000,000 | |
Lender commitments | $ 615,000,000 | |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.50% | |
Senior Secured Debt to Consolidated EBITDAX | 2.5 | |
Consolidated EBITDAX to Consolidated Interest Charges | 1.25 | |
Current Ratio Requirement | 1 | |
Senior Secured Bank Credit Agreement | $ 0 | $ 0 |
Year 2019 | ||
Senior Secured Bank Credit Facility [Abstract] | ||
Total Debt to Consolidated EBITDAX | 5.25 | |
Year 2020 | ||
Senior Secured Bank Credit Facility [Abstract] | ||
Total Debt to Consolidated EBITDAX | 5.25 | |
Year 2021 | Q1 | ||
Senior Secured Bank Credit Facility [Abstract] | ||
Total Debt to Consolidated EBITDAX | 4.50 | |
Year 2021 | Q2 | ||
Senior Secured Bank Credit Facility [Abstract] | ||
Total Debt to Consolidated EBITDAX | 4.5 | |
Year 2021 | Q3 | ||
Senior Secured Bank Credit Facility [Abstract] | ||
Total Debt to Consolidated EBITDAX | 4.5 |
Commodity Derivative Contract_2
Commodity Derivative Contracts (Commodity Derivatives Outstanding Table) (Details) | Mar. 31, 2019bbl / d$ / Barrel |
Swap | Year 2019 | Q2 | NYMEX | |
Derivative [Line Items] | |
Volume per day | bbl / d | 3,500 |
Weighted average swap price | 59.05 |
Swap | Year 2019 | Q2 | NYMEX | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 59 |
Swap | Year 2019 | Q2 | NYMEX | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 59.10 |
Swap | Year 2019 | Q2-Q4 | LLS | |
Derivative [Line Items] | |
Volume per day | bbl / d | 13,000 |
Weighted average swap price | 64.69 |
Swap | Year 2019 | Q2-Q4 | LLS | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 60 |
Swap | Year 2019 | Q2-Q4 | LLS | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 74.90 |
Swap | Year 2020 | LLS | |
Derivative [Line Items] | |
Volume per day | bbl / d | 2,000 |
Weighted average swap price | 60.89 |
Swap | Year 2020 | LLS | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 60.72 |
Swap | Year 2020 | LLS | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 61.05 |
Three-way Collar | Year 2019 | Q2 | NYMEX | |
Derivative [Line Items] | |
Volume per day | bbl / d | 18,500 |
Weighted average sold put price | 48.84 |
Weighted average floor price | 56.84 |
Weighted average ceiling price | 69.94 |
Three-way Collar | Year 2019 | Q2 | NYMEX | Minimum | |
Derivative [Line Items] | |
Derivative, Floor Price | 55 |
Three-way Collar | Year 2019 | Q2 | NYMEX | Maximum | |
Derivative [Line Items] | |
Derivative, Cap Price | 75.45 |
Three-way Collar | Year 2019 | Q2 | LLS | |
Derivative [Line Items] | |
Volume per day | bbl / d | 5,500 |
Weighted average sold put price | 54.73 |
Weighted average floor price | 63.09 |
Weighted average ceiling price | 79.93 |
Three-way Collar | Year 2019 | Q2 | LLS | Minimum | |
Derivative [Line Items] | |
Derivative, Floor Price | 62 |
Three-way Collar | Year 2019 | Q2 | LLS | Maximum | |
Derivative [Line Items] | |
Derivative, Cap Price | 86 |
Three-way Collar | Year 2019 | Q3-Q4 | NYMEX | |
Derivative [Line Items] | |
Volume per day | bbl / d | 22,000 |
Weighted average sold put price | 48.55 |
Weighted average floor price | 56.55 |
Weighted average ceiling price | 69.17 |
Three-way Collar | Year 2019 | Q3-Q4 | NYMEX | Minimum | |
Derivative [Line Items] | |
Derivative, Floor Price | 55 |
Three-way Collar | Year 2019 | Q3-Q4 | NYMEX | Maximum | |
Derivative [Line Items] | |
Derivative, Cap Price | 75.45 |
Three-way Collar | Year 2019 | Q3-Q4 | LLS | |
Derivative [Line Items] | |
Volume per day | bbl / d | 5,500 |
Weighted average sold put price | 54.73 |
Weighted average floor price | 63.09 |
Weighted average ceiling price | 79.93 |
Three-way Collar | Year 2019 | Q3-Q4 | LLS | Minimum | |
Derivative [Line Items] | |
Derivative, Floor Price | 62 |
Three-way Collar | Year 2019 | Q3-Q4 | LLS | Maximum | |
Derivative [Line Items] | |
Derivative, Cap Price | 86 |
Three-way Collar | Year 2020 | Q1-Q2 | NYMEX | |
Derivative [Line Items] | |
Volume per day | bbl / d | 8,000 |
Weighted average sold put price | 49.21 |
Weighted average floor price | 58.86 |
Weighted average ceiling price | 66.69 |
Three-way Collar | Year 2020 | Q1-Q2 | NYMEX | Minimum | |
Derivative [Line Items] | |
Derivative, Floor Price | 57.50 |
Three-way Collar | Year 2020 | Q1-Q2 | NYMEX | Maximum | |
Derivative [Line Items] | |
Derivative, Cap Price | 82.65 |
Three-way Collar | Year 2020 | Q1-Q2 | LLS | |
Derivative [Line Items] | |
Volume per day | bbl / d | 3,000 |
Weighted average sold put price | 53.83 |
Weighted average floor price | 63.83 |
Weighted average ceiling price | 73.93 |
Three-way Collar | Year 2020 | Q1-Q2 | LLS | Minimum | |
Derivative [Line Items] | |
Derivative, Floor Price | 62.50 |
Three-way Collar | Year 2020 | Q1-Q2 | LLS | Maximum | |
Derivative [Line Items] | |
Derivative, Cap Price | 87.10 |
Three-way Collar | Year 2020 | Q3-Q4 | NYMEX | |
Derivative [Line Items] | |
Volume per day | bbl / d | 6,000 |
Weighted average sold put price | 49.59 |
Weighted average floor price | 59.13 |
Weighted average ceiling price | 67.47 |
Three-way Collar | Year 2020 | Q3-Q4 | NYMEX | Minimum | |
Derivative [Line Items] | |
Derivative, Floor Price | 58.25 |
Three-way Collar | Year 2020 | Q3-Q4 | NYMEX | Maximum | |
Derivative [Line Items] | |
Derivative, Cap Price | 82.65 |
Three-way Collar | Year 2020 | Q3-Q4 | LLS | |
Derivative [Line Items] | |
Volume per day | bbl / d | 1,000 |
Weighted average sold put price | 55 |
Weighted average floor price | 65 |
Weighted average ceiling price | 86.80 |
Three-way Collar | Year 2020 | Q3-Q4 | LLS | Minimum | |
Derivative [Line Items] | |
Derivative, Floor Price | 65 |
Three-way Collar | Year 2020 | Q3-Q4 | LLS | Maximum | |
Derivative [Line Items] | |
Derivative, Cap Price | 87.10 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value Hierarchy Table) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Oil derivative contracts - current assets | $ 14,012 | $ 93,080 |
Oil derivative contracts - long-term assets | 2,022 | 4,195 |
Total Assets | 16,034 | 97,275 |
Oil derivative contracts - current liabilities | (10,037) | 0 |
Oil derivative contracts - long-term liabilities | (306) | 0 |
Total Liabilities | (10,343) | |
Quoted Prices in Active Markets (Level 1) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Oil derivative contracts - current assets | 0 | 0 |
Oil derivative contracts - long-term assets | 0 | 0 |
Total Assets | 0 | 0 |
Oil derivative contracts - current liabilities | 0 | |
Oil derivative contracts - long-term liabilities | 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 assets | 11,259 | 81,621 |
Oil derivative contracts - long-term assets | 987 | 2,030 |
Total Assets | 12,246 | 83,651 |
Oil derivative contracts - current liabilities | (9,965) | |
Oil derivative contracts - long-term liabilities | (276) | |
Total Liabilities | (10,241) | |
Significant Unobservable Inputs (Level 3) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Oil derivative contracts - current assets | 2,753 | 11,459 |
Oil derivative contracts - long-term assets | 1,035 | 2,165 |
Total Assets | 3,788 | $ 13,624 |
Oil derivative contracts - current liabilities | (72) | |
Oil derivative contracts - long-term liabilities | (30) | |
Total Liabilities | $ (102) |
Fair Value Measurements (Level
Fair Value Measurements (Level 3 Fair Value Measurements) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Fair Value, Net Derivative Asset Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Fair value of Level 3 instruments, beginning of period | $ 13,624 | $ 0 |
Fair value losses on commodity derivatives | (9,047) | 0 |
Receipts on settlements of commodity derivatives | (891) | 0 |
Fair value of Level 3 instruments, end of period | 3,686 | 0 |
The amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to assets or liabilities still held at the reporting date | $ (6,481) | $ 0 |
Fair Value Measurements (Leve_2
Fair Value Measurements (Level 3 Valuation Techniques) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value Measurements, Recurring and nonrecurring, Valuation Techniques [Line Items] | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs | $ 3,686 | $ 13,624 | $ 0 | $ 0 |
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 | $ 3,686 | |||
Income Approach Valuation Technique | Minimum | ||||
Fair Value Measurements, Recurring and nonrecurring, Valuation Techniques [Line Items] | ||||
Expected Volatility Range | 12.30% | |||
Income Approach Valuation Technique | Maximum | ||||
Fair Value Measurements, Recurring and nonrecurring, Valuation Techniques [Line Items] | ||||
Expected Volatility Range | 30.50% |
Fair Value Measurements (Detail
Fair Value Measurements (Details Textuals) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Sensitivity Analysis of Fair Value, Impact of 100 Basis Point Increase or Decrease in Level 3 Inputs | $ 100 | |
Debt, Fair Value | $ 1,990,000 | $ 1,886,100 |
Commitments and Contingencies (
Commitments and Contingencies (Helium Supply Arrangement) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Term of long term supply arrangement | 20 years |
Maximum annual payment in event of shortfall | $ 8 |
Maximum payment in event of shortfall | $ 46 |
Commitments and Contingencies_2
Commitments and Contingencies (Loss Contingencies) (Details) $ in Millions | Mar. 31, 2019USD ($) |
Loss Contingencies [Line Items] | |
Estimated Litigation Liability | $ 49.8 |
Total liquidated damages | |
Loss Contingencies [Line Items] | |
Estimated Litigation Liability | 46 |
Other costs associated with the settlement | |
Loss Contingencies [Line Items] | |
Estimated Litigation Liability | 3.8 |
Liquidated damages for contract years ending July 31, 2018 and July 31, 2019 | |
Loss Contingencies [Line Items] | |
Estimated Litigation Liability | $ 14.2 |
Additional Balance Sheet Deta_3
Additional Balance Sheet Details (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts payable | $ 31,014 | $ 28,177 |
Accrued lease operating expenses | 27,274 | 32,287 |
Accrued compensation | 24,221 | 42,881 |
Accrued interest | 24,080 | 31,391 |
Taxes payable | 10,792 | 18,897 |
Accrued exploration and development costs | 8,295 | 19,519 |
Other | 21,648 | 25,228 |
Total | $ 147,324 | $ 198,380 |