ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Virginia | 23-1184320 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Large accelerated filer | o | Accelerated filer | ý |
Non-accelerated filer | o | Smaller reporting company | o |
Part I - Financial Information | ||
Item | Page | |
1. | Financial Statements: | |
Condensed Consolidated Statements of Operations for the Periods Ended March 31, 2016 and 2015 | ||
Condensed Consolidated Statements of Comprehensive Income for the Periods Ended March 31, 2016 and 2015 | ||
Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015 | ||
Condensed Consolidated Statements of Cash Flows for the Periods Ended March 31, 2016 and 2015 | ||
Notes to Condensed Consolidated Financial Statements: | ||
1. Nature of Operations | ||
2. Basis of Presentation | ||
3. Acquisitions and Divestitures | ||
4. Accounts Receivable and Major Customers | ||
5. Derivative Instruments | ||
6. Property and Equipment | ||
7. Debt Obligations | ||
8. Income Taxes | ||
9. Firm Transportation Obligation | ||
10. Additional Balance Sheet Detail | ||
11. Fair Value Measurements | ||
12. Commitments and Contingencies | ||
13. Shareholders’ Equity | ||
14. Share-Based Compensation and Other Benefit Plans | ||
15. Interest Expense | ||
16. Earnings per Share | ||
Forward-Looking Statements | ||
2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations: | |
Overview and Executive Summary | ||
Key Developments | ||
Financial Condition | ||
Results of Operations | ||
Critical Accounting Estimates | ||
3. | Quantitative and Qualitative Disclosures About Market Risk | |
4. | Controls and Procedures | |
Part II - Other Information | ||
1. | Legal Proceedings | |
1A. | Risk Factors | |
6. | Exhibits | |
Signatures |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Revenues | |||||||
Crude oil | $ | 25,966 | $ | 59,168 | |||
Natural gas liquids (NGLs) | 1,953 | 5,396 | |||||
Natural gas | 2,402 | 8,571 | |||||
Loss on sales of property and equipment, net | (153 | ) | (91 | ) | |||
Other, net | 329 | 1,483 | |||||
Total revenues | 30,497 | 74,527 | |||||
Operating expenses | |||||||
Lease operating | 6,192 | 11,569 | |||||
Gathering, processing and transportation | 3,818 | 7,498 | |||||
Production and ad valorem taxes | 753 | 4,689 | |||||
General and administrative | 17,102 | 11,970 | |||||
Exploration | 1,327 | 5,887 | |||||
Depreciation, depletion and amortization | 13,812 | 90,790 | |||||
Total operating expenses | 43,004 | 132,403 | |||||
Operating loss | (12,507 | ) | (57,876 | ) | |||
Other income (expense) | |||||||
Interest expense | (24,434 | ) | (22,013 | ) | |||
Derivatives | 4,492 | 22,867 | |||||
Other | (1,024 | ) | (2 | ) | |||
Loss before income taxes | (33,473 | ) | (57,024 | ) | |||
Income tax expense | — | (141 | ) | ||||
Net loss | (33,473 | ) | (57,165 | ) | |||
Preferred stock dividends | (3,152 | ) | (6,067 | ) | |||
Net loss attributable to common shareholders | $ | (36,625 | ) | $ | (63,232 | ) | |
Net loss per share: | |||||||
Basic | $ | (0.43 | ) | $ | (0.88 | ) | |
Diluted | $ | (0.43 | ) | $ | (0.88 | ) | |
Weighted average shares outstanding – basic | 85,941 | 71,820 | |||||
Weighted average shares outstanding – diluted | 85,941 | 71,820 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Net loss | $ | (33,473 | ) | $ | (57,165 | ) | |
Other comprehensive loss: | |||||||
Change in pension and postretirement obligations, net of tax of $0 in 2016 and $(6) in 2015 | (27 | ) | (11 | ) | |||
(27 | ) | (11 | ) | ||||
Comprehensive loss | $ | (33,500 | ) | $ | (57,176 | ) |
As of | |||||||
March 31, | December 31, | ||||||
2016 | 2015 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 26,532 | $ | 11,955 | |||
Accounts receivable, net of allowance for doubtful accounts | 43,837 | 47,965 | |||||
Derivative assets | 49,030 | 97,956 | |||||
Other current assets | 4,495 | 7,104 | |||||
Total current assets | 123,894 | 164,980 | |||||
Property and equipment, net (successful efforts method) | 334,506 | 344,395 | |||||
Other assets | 8,103 | 8,350 | |||||
Total assets | $ | 466,503 | $ | 517,725 | |||
Liabilities and Shareholders’ Deficit | |||||||
Current liabilities | |||||||
Accounts payable and accrued liabilities | $ | 110,353 | $ | 103,525 | |||
Debt obligations, net of unamortized issuance costs | 1,202,492 | 1,224,383 | |||||
Total current liabilities | 1,312,845 | 1,327,908 | |||||
Other liabilities | 102,880 | 104,938 | |||||
Commitments and contingencies (Note 12) | |||||||
Shareholders’ deficit: | |||||||
Preferred stock of $100 par value – 100,000 shares authorized; Series A – 3,864 and 3,915 shares issued as of March 31, 2016 and December 31, 2015, respectively, and Series B – 17,152 and 27,551issued as of March 31, 2016 and December 31, 2015, each with a redemption value of $10,000 per share | 2,102 | 3,146 | |||||
Common stock of $0.01 par value – 228,000,000 shares authorized; 87,008,148 and 81,252,676 shares issued as of March 31, 2016 and December 31, 2015, respectively | 685 | 628 | |||||
Paid-in capital | 1,211,474 | 1,211,088 | |||||
Accumulated deficit | (2,163,744 | ) | (2,130,271 | ) | |||
Deferred compensation obligation | 3,440 | 3,440 | |||||
Accumulated other comprehensive income | 395 | 422 | |||||
Treasury stock – 455,689 and 455,689 shares of common stock, at cost, as of March 31, 2016 and December 31, 2015, respectively | (3,574 | ) | (3,574 | ) | |||
Total shareholders’ deficit | (949,222 | ) | (915,121 | ) | |||
Total liabilities and shareholders’ deficit | $ | 466,503 | $ | 517,725 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (33,473 | ) | $ | (57,165 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 13,812 | 90,790 | |||||
Accretion of firm transportation obligation | 175 | 212 | |||||
Derivative contracts: | |||||||
Net gains | (4,492 | ) | (22,867 | ) | |||
Cash settlements, net | 30,559 | 37,492 | |||||
Deferred income tax expense | — | 141 | |||||
Loss on sales of assets, net | 153 | 91 | |||||
Non-cash exploration expense | 856 | 1,983 | |||||
Non-cash interest expense | 1,269 | 1,104 | |||||
Share-based compensation (equity-classified) | (602 | ) | 990 | ||||
Other, net | (4 | ) | 9 | ||||
Changes in operating assets and liabilities, net | 20,278 | (7,228 | ) | ||||
Net cash provided by operating activities | 28,531 | 45,552 | |||||
Cash flows from investing activities | |||||||
Capital expenditures – property and equipment | (14,005 | ) | (168,994 | ) | |||
Proceeds from sales of assets, net | 126 | 116 | |||||
Net cash used in investing activities | (13,879 | ) | (168,878 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from revolving credit facility borrowings | — | 127,000 | |||||
Repayment of revolving credit facility borrowings | (75 | ) | — | ||||
Dividends paid on preferred stock | — | (6,067 | ) | ||||
Net cash (used in) provided by financing activities | (75 | ) | 120,933 | ||||
Net increase (decrease) in cash and cash equivalents | 14,577 | (2,393 | ) | ||||
Cash and cash equivalents – beginning of period | 11,955 | 6,252 | |||||
Cash and cash equivalents – end of period | $ | 26,532 | $ | 3,859 | |||
Supplemental disclosures: | |||||||
Cash paid for: | |||||||
Interest | $ | 735 | $ | 732 | |||
Income taxes paid (refunds received) | $ | (35 | ) | $ | — | ||
Non-cash investing and financing activities: | |||||||
Changes in accrued liabilities related to capital expenditures | $ | (9,697 | ) | $ | (21,539 | ) | |
Derivatives settled to reduce outstanding debt | $ | 22,860 | $ | — |
1. | Nature of Operations |
2. | Basis of Presentation |
3. | Acquisitions and Divestitures |
As of | |||||||
March 31, | December 31, | ||||||
2016 | 2015 | ||||||
Customers | $ | 20,167 | $ | 23,481 | |||
Joint interest partners | 18,907 | 18,381 | |||||
Other | 6,381 | 7,658 | |||||
45,455 | 49,520 | ||||||
Less: Allowance for doubtful accounts | (1,618 | ) | (1,555 | ) | |||
$ | 43,837 | $ | 47,965 |
5. | Derivative Instruments |
Average | ||||||||||||||||||
Volume Per | Weighted Average Price | Fair Value | ||||||||||||||||
Instrument | Day | Floor/Swap | Ceiling | Asset | Liability | |||||||||||||
Crude Oil: | (barrels) | ($/barrel) | ||||||||||||||||
Second quarter 2016 | Swaps | 4,000 | $ | 81.45 | $ | 15,107 | $ | — | ||||||||||
Third quarter 2016 | Swaps | 4,000 | $ | 81.45 | 14,478 | — | ||||||||||||
Fourth quarter 2016 | Swaps | 4,000 | $ | 81.45 | 14,052 | — | ||||||||||||
Settlements pending | 5,393 | — |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Cash settlements and gains (losses): | |||||||
Cash received for: | |||||||
Commodity contract settlements | $ | 30,559 | $ | 37,492 | |||
Losses attributable to: | |||||||
Commodity contracts | (26,067 | ) | (14,625 | ) | |||
$ | 4,492 | $ | 22,867 |
Fair Values as of | |||||||||||||||||
March 31, 2016 | December 31, 2015 | ||||||||||||||||
Derivative | Derivative | Derivative | Derivative | ||||||||||||||
Type | Balance Sheet Location | Assets | Liabilities | Assets | Liabilities | ||||||||||||
Commodity contracts | Derivative assets/liabilities – current | $ | 49,030 | $ | — | $ | 97,956 | $ | — |
6. | Property and Equipment |
As of | |||||||
March 31, | December 31, | ||||||
2016 | 2015 | ||||||
Oil and gas properties: | |||||||
Proved | $ | 2,682,932 | $ | 2,678,415 | |||
Unproved | 6,037 | 6,881 | |||||
Total oil and gas properties | 2,688,969 | 2,685,296 | |||||
Other property and equipment | 31,563 | 31,365 | |||||
Total properties and equipment | 2,720,532 | 2,716,661 | |||||
Accumulated depreciation, depletion and amortization | (2,386,026 | ) | (2,372,266 | ) | |||
$ | 334,506 | $ | 344,395 |
7. | Debt Obligations |
As of | |||||||||||||||
March 31, 2016 | December 31, 2015 | ||||||||||||||
Principal | Unamortized Issuance Costs | Principal | Unamortized Issuance Costs | ||||||||||||
Revolving credit facility 1 | $ | 147,065 | $ | 170,000 | |||||||||||
Senior notes due 2019 | 300,000 | $ | 3,076 | 300,000 | $ | 3,295 | |||||||||
Senior notes due 2020 | 775,000 | 16,497 | 775,000 | 17,322 | |||||||||||
Totals | 1,222,065 | $ | 19,573 | 1,245,000 | $ | 20,617 | |||||||||
Less: Unamortized issuance costs | (19,573 | ) | (20,617 | ) | |||||||||||
Debt obligations, net of unamortized issuance costs | $ | 1,202,492 | $ | 1,224,383 |
8. | Income Taxes |
9. | Firm Transportation Obligation |
As of | |||||||
March 31, | December 31, | ||||||
2016 | 2015 | ||||||
Balance at beginning of period | $ | 13,461 | $ | 14,790 | |||
Accretion | 175 | 942 | |||||
Cash payments, net | (527 | ) | (2,271 | ) | |||
Balance at end of period | $ | 13,109 | $ | 13,461 |
10. | Additional Balance Sheet Detail |
As of | |||||||
March 31, | December 31, | ||||||
2016 | 2015 | ||||||
Other current assets: | |||||||
Tubular inventory and well materials | $ | 2,214 | $ | 2,878 | |||
Prepaid expenses | 2,274 | 4,184 | |||||
Other | 7 | 42 | |||||
$ | 4,495 | $ | 7,104 | ||||
Other assets: | |||||||
Assets of supplemental employee retirement plan (“SERP”) | $ | 4,154 | $ | 4,123 | |||
Deferred issuance costs of the Revolver | 1,347 | 1,572 | |||||
Other | 2,602 | 2,655 | |||||
$ | 8,103 | $ | 8,350 | ||||
Accounts payable and accrued liabilities: | |||||||
Trade accounts payable | $ | 17,847 | $ | 11,603 | |||
Drilling costs | 3,086 | 12,074 | |||||
Royalties and revenue – related | 31,063 | 39,119 | |||||
Compensation – related | 9,925 | 9,904 | |||||
Interest | 38,102 | 15,531 | |||||
Other | 10,330 | 15,294 | |||||
$ | 110,353 | $ | 103,525 | ||||
Other liabilities: | |||||||
Deferred gains on sales of assets | $ | 81,831 | $ | 82,943 | |||
Firm transportation obligation | 10,361 | 10,705 | |||||
Asset retirement obligations (“AROs”) | 2,677 | 2,621 | |||||
Defined benefit pension obligations | 1,100 | 1,129 | |||||
Postretirement health care benefit obligations | 755 | 731 | |||||
Compensation – related | 714 | 1,447 | |||||
Deferred compensation – SERP obligations and other | 4,521 | 4,434 | |||||
Other | 921 | 928 | |||||
$ | 102,880 | $ | 104,938 |
11. | Fair Value Measurements |
As of | |||||||||||||||
March 31, 2016 | December 31, 2015 | ||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||
Senior Notes due 2019 | $ | 58,020 | $ | 300,000 | $ | 40,830 | $ | 300,000 | |||||||
Senior Notes due 2020 | 139,268 | 775,000 | 125,473 | 775,000 | |||||||||||
$ | 197,288 | $ | 1,075,000 | $ | 166,303 | $ | 1,075,000 |
As of March 31, 2016 | ||||||||||||||||
Fair Value | Fair Value Measurement Classification | |||||||||||||||
Description | Measurement | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | ||||||||||||||||
Commodity derivative assets – current | $ | 49,030 | $ | — | $ | 49,030 | $ | — | ||||||||
Assets of SERP | 4,154 | 4,154 | — | — | ||||||||||||
Liabilities: | ||||||||||||||||
Deferred compensation – SERP obligations | (4,155 | ) | (4,155 | ) | — | — |
As of December 31, 2015 | ||||||||||||||||
Fair Value | Fair Value Measurement Classification | |||||||||||||||
Description | Measurement | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | ||||||||||||||||
Commodity derivative assets – current | $ | 97,956 | $ | — | $ | 97,956 | $ | — | ||||||||
Assets of SERP | 4,123 | 4,123 | — | — | ||||||||||||
Liabilities: | ||||||||||||||||
Deferred compensation – SERP obligations | (4,125 | ) | (4,125 | ) | — | — |
• | Commodity derivatives: We determine the fair values of our commodity derivative instruments based on discounted cash flows derived from third-party quoted forward prices for West Texas Intermediate crude oil and NYMEX Henry Hub gas closing prices as of the end of the reporting periods. We generally use the income approach, using valuation techniques that convert future cash flows to a single discounted value. Each of these is a level 2 input. |
• | Assets of SERP: We hold various publicly traded equity securities in a Rabbi Trust as assets for funding certain deferred compensation obligations. The fair values are based on quoted market prices, which are level 1 inputs. |
• | Deferred compensation – SERP obligations: Certain of our deferred compensation obligations are ultimately to be settled in cash based on the underlying fair value of certain assets, including those held in the Rabbi Trust. The fair values are based on quoted market prices, which are level 1 inputs. |
12. | Commitments and Contingencies |
13. | Shareholders’ Equity |
As of | As of | ||||||||||||||||||
December 31, | Dividends | All Other | March 31, | ||||||||||||||||
2015 | Net Loss | Declared | Changes 1 | 2016 | |||||||||||||||
Preferred stock 2 | $ | 3,146 | $ | — | $ | — | $ | (1,044 | ) | $ | 2,102 | ||||||||
Common stock 2 | 628 | — | — | 57 | 685 | ||||||||||||||
Paid-in capital 2 | 1,211,088 | — | — | 386 | 1,211,474 | ||||||||||||||
Accumulated deficit | (2,130,271 | ) | (33,473 | ) | — | — | (2,163,744 | ) | |||||||||||
Deferred compensation obligation | 3,440 | — | — | — | 3,440 | ||||||||||||||
Accumulated other comprehensive income 3 | 422 | — | — | (27 | ) | 395 | |||||||||||||
Treasury stock | (3,574 | ) | — | — | — | (3,574 | ) | ||||||||||||
$ | (915,121 | ) | $ | (33,473 | ) | $ | — | $ | (628 | ) | $ | (949,222 | ) | ||||||
As of | As of | ||||||||||||||||||
December 31, | Dividends | All Other | March 31, | ||||||||||||||||
2014 | Net Income | Declared 4 | Changes 1 | 2015 | |||||||||||||||
Preferred stock | $ | 4,044 | $ | — | $ | — | $ | — | $ | 4,044 | |||||||||
Common stock | 529 | — | — | — | 529 | ||||||||||||||
Paid-in capital | 1,206,305 | — | — | 989 | 1,207,294 | ||||||||||||||
Accumulated deficit | (535,176 | ) | (57,165 | ) | (6,067 | ) | — | (598,408 | ) | ||||||||||
Deferred compensation obligation | 3,211 | — | — | 56 | 3,267 | ||||||||||||||
Accumulated other comprehensive income 3 | 249 | — | — | (11 | ) | 238 | |||||||||||||
Treasury stock | (3,345 | ) | — | — | (55 | ) | (3,400 | ) | |||||||||||
$ | 675,817 | $ | (57,165 | ) | $ | (6,067 | ) | $ | 979 | $ | 613,564 |
14. | Share-Based Compensation and Other Benefit Plans |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Equity-classified awards: | |||||||
Stock option awards | $ | (303 | ) | $ | 393 | ||
Common, deferred and restricted stock and stock unit awards | (299 | ) | 597 | ||||
(602 | ) | 990 | |||||
Liability-classified awards | (7 | ) | 379 | ||||
$ | (609 | ) | $ | 1,369 |
15. | Interest Expense |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Interest on borrowings and related fees | $ | 23,305 | $ | 22,808 | |||
Amortization of debt issuance costs | 1,269 | 1,104 | |||||
Capitalized interest | (140 | ) | (1,899 | ) | |||
$ | 24,434 | $ | 22,013 |
16. | Earnings per Share |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Net loss | $ | (33,473 | ) | $ | (57,165 | ) | |
Less: Preferred stock dividends 1 | (3,152 | ) | (6,067 | ) | |||
Net loss attributable to common shareholders – basic and diluted | $ | (36,625 | ) | $ | (63,232 | ) | |
Weighted-average shares – basic | 85,941 | 71,820 | |||||
Effect of dilutive securities 2 | — | — | |||||
Weighted-average shares – diluted | 85,941 | 71,820 |
• | our ability to maintain adequate financial liquidity and to access adequate levels of capital on reasonable terms; |
• | our ability to continue as a going concern; |
• | our ability to refinance our debt obligations; |
• | compliance with debt covenants; |
• | reductions in the borrowing base under our revolving credit facility, or the Revolver; |
• | our ability to continue to borrow under the Revolver; |
• | the volatility of commodity prices for oil, natural gas liquids, or NGLs, and natural gas; |
• | our ability to develop, explore for, acquire and replace oil and natural gas reserves and sustain production; |
• | our ability to generate profits or achieve targeted reserves in our development and exploratory drilling and well operations; |
• | any impairments, write-downs or write-offs of our reserves or assets; |
• | the resumption of our drilling program; |
• | the projected demand for and supply of oil, NGLs and natural gas; |
• | our ability to contract for drilling rigs, supplies and services at reasonable costs; |
• | our ability to obtain adequate pipeline transportation capacity for our oil and gas production at reasonable cost and to sell the production at, or at reasonable discounts to, market prices; |
• | the uncertainties inherent in projecting future rates of production for our wells and the extent to which actual production differs from estimated proved oil and natural gas reserves; |
• | drilling and operating risks; |
• | our ability to compete effectively against other oil and gas companies; |
• | our ability to successfully monetize select assets and repay our debt; |
• | leasehold terms expiring before production can be established; |
• | environmental obligations, costs and liabilities that are not covered by an effective indemnity or insurance; |
• | the timing of receipt of necessary regulatory permits; |
• | the effect of commodity and financial derivative arrangements; |
• | the occurrence of unusual weather or operating conditions, including force majeure events; |
• | our ability to retain or attract senior management and key technical employees; |
• | counterparty risk related to the ability of these parties to meet their future obligations; |
• | compliance with and changes in governmental regulations or enforcement practices, especially with respect to environmental, health and safety matters; |
• | physical, electronic and cybersecurity breaches; |
• | uncertainties relating to general domestic and international economic and political conditions; and |
• | other factors set forth in our periodic filings with the Securities and Exchange Commission, including the risks set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2015 and Item 1A of Part II of this Quarterly Report on Form 10-Q. |
Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2016 | 2015 | ||||||||||
Total production (MBOE) | 1,394 | 2,225 | |||||||||
Average daily production (BOEPD) | 15,323 | 24,721 | |||||||||
Crude oil and NGL production (MBbl) | 1,187 | 1,734 | |||||||||
Crude oil and NGL production as a percent of total | 85 | % | 78 | % | |||||||
Product revenues, as reported | $ | 30,321 | $ | 73,135 | |||||||
Product revenues, as adjusted for derivatives | $ | 60,880 | $ | 110,627 | |||||||
Crude oil and NGL revenues as a percent of total, as reported | 92 | % | 88 | % | |||||||
Realized prices: | |||||||||||
Crude oil ($/Bbl) | $ | 26.69 | $ | 44.26 | |||||||
NGL ($/Bbl) | $ | 9.14 | $ | 13.60 | |||||||
Natural gas ($/Mcf) | $ | 1.93 | $ | 2.91 | |||||||
Aggregate ($/BOE) | $ | 21.75 | $ | 32.87 | |||||||
Operating costs ($/BOE): | |||||||||||
Lease operating | $ | 4.44 | $ | 5.20 | |||||||
Gathering, processing and transportation | 2.74 | 3.37 | |||||||||
Production and ad valorem taxes | 0.54 | 2.11 | |||||||||
General and administrative 1 | 4.02 | 4.75 | |||||||||
Total operating costs | $ | 11.74 | $ | 15.43 | |||||||
Depreciation, depletion and amortization ($/BOE) | $ | 9.91 | $ | 40.79 | |||||||
Cash provided by operating activities | $ | 28,531 | $ | 45,552 | |||||||
Cash paid for capital expenditures | $ | 14,005 | $ | 168,994 | |||||||
Cash and cash equivalents at end of period | $ | 26,532 | $ | 3,859 | |||||||
Principal amount of debt obligations outstanding at end of period | $ | 1,222,065 | $ | 1,237,000 | |||||||
Credit available under revolving credit facility at end of period 2 | $ | — | $ | 286,196 | |||||||
Net development wells drilled and completed | 2.3 | 14.1 |
Borrowings Outstanding | ||||||||||
Weighted- Average | Maximum | Weighted- Average Rate | ||||||||
Three months ended March 31, 2016 | $ | 165,885 | $ | 170,000 | 3.0650 | % |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2016 | 2015 | Variance | |||||||||
Cash flows from operating activities | |||||||||||
Operating cash flows, net | $ | (10,391 | ) | $ | 18,913 | $ | (29,304 | ) | |||
Working capital changes (excluding income taxes and restructuring costs paid), net | 21,567 | (5,898 | ) | 27,465 | |||||||
Commodity derivative settlements received (paid), net: | |||||||||||
Crude oil | 30,559 | 36,811 | (6,252 | ) | |||||||
Natural gas | — | 681 | (681 | ) | |||||||
Income taxes received | 35 | — | 35 | ||||||||
Drilling rig termination charges paid | — | (4,376 | ) | 4,376 | |||||||
Strategic and financial advisory costs paid | (12,350 | ) | — | (12,350 | ) | ||||||
Restructuring and exit costs paid | (889 | ) | (579 | ) | (310 | ) | |||||
Net cash provided by operating activities | 28,531 | 45,552 | (17,021 | ) | |||||||
Cash flows from investing activities | |||||||||||
Capital expenditures – property and equipment | (14,005 | ) | (168,994 | ) | 154,989 | ||||||
Proceeds from sales of assets, net | 126 | 116 | 10 | ||||||||
Net cash used in investing activities | (13,879 | ) | (168,878 | ) | 154,999 | ||||||
Cash flows from financing activities | |||||||||||
(Repayments) proceeds from revolving credit facility borrowings, net | (75 | ) | 127,000 | (127,075 | ) | ||||||
Dividends paid on preferred stock | — | (6,067 | ) | 6,067 | |||||||
Net cash (used in) provided by financing activities | (75 | ) | 120,933 | (121,008 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | $ | 14,577 | $ | (2,393 | ) | $ | 16,970 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Oil and gas: | |||||||
Drilling and completion | $ | 4,008 | $ | 134,140 | |||
Lease acquisitions and other land-related costs 1 | 205 | 8,804 | |||||
Pipeline, gathering facilities and other equipment | 318 | 2,868 | |||||
Geological, geophysical (seismic) and delay rental costs | (19 | ) | 279 | ||||
4,512 | 146,091 | ||||||
Other – Corporate | — | 384 | |||||
Total capital program costs | $ | 4,512 | $ | 146,475 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Total capital program costs | $ | 4,512 | $ | 146,475 | |||
Decrease in accrued capitalized costs | 9,697 | 21,359 | |||||
Less: | |||||||
Exploration costs charged to operations: | |||||||
Geological, geophysical (seismic) and delay rental costs | 19 | (279 | ) | ||||
Transfers from tubular inventory and well materials | (505 | ) | (2,542 | ) | |||
Add: | |||||||
Tubular inventory and well materials purchased in advance of drilling | 142 | 2,082 | |||||
Capitalized interest | 140 | 1,899 | |||||
Total cash paid for capital expenditures | $ | 14,005 | $ | 168,994 |
March 31, | December 31, | ||||||
2016 | 2015 | ||||||
Revolving credit facility | $ | 147,065 | $ | 170,000 | |||
Senior notes due 2019 | 300,000 | 300,000 | |||||
Senior notes due 2020 | 775,000 | 775,000 | |||||
Total debt | 1,222,065 | 1,245,000 | |||||
Shareholders’ equity 1 | (949,222 | ) | (915,121 | ) | |||
$ | 272,843 | $ | 329,879 | ||||
Debt as a % of total capitalization | 448 | % | 377 | % |
• | Total debt to EBITDAX, each as defined in the Revolver, for any four consecutive quarters may not exceed 4.75 to 1.0 for periods through March 31, 2016, 5.25 to 1.0 for periods through June 30, 2016, 5.50 to 1.0 for periods through December 31, 2016, 4.50 to 1.0 for periods through March 31, 2017 and 4.0 to 1.0 through maturity in September 2017. EBITDAX, which is a non-GAAP measure, generally means net income plus interest expense, taxes, depreciation, depletion and amortization expenses, exploration expenses, impairments and other non-cash charges or losses. |
• | Credit exposure to EBITDAX for any four consecutive quarters may not exceed 2.75 to 1.0 for periods ending after March 31, 2015 through March 31, 2017. Credit exposure consists of all outstanding borrowing under the Revolver plus any outstanding letters of credits. |
• | The current ratio, as of the last day of any quarter, may not be less than 1.0 to 1.0. The current ratio is generally the ratio of current assets to current liabilities. Current assets and current liabilities attributable to derivative instruments are excluded. In addition, current assets include the amount of any unused commitment under the Revolver. |
Required | Actual | |||
Description of Covenant | Covenant | Results | ||
Total debt to EBITDAX | < 4.75 to 1 | 5.3 to 1 | ||
Credit exposure to EBITDAX | < 2.75 to 1 | 0.7 to 1 | ||
Current ratio | > 1.00 to 1 | 0.1 to 1 | ||
Interest coverage | > 2.25 to 1 | 2.2 to 1 |
Total Production | Average Daily Production | ||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||
March 31, | 2016 vs. | March 31, | 2016 vs. | ||||||||||||||
2016 | 2015 | 2015 | 2016 | 2015 | 2015 | ||||||||||||
(Total volume) | (Volume per day) | ||||||||||||||||
Crude oil (MBbl and Bbl per day) | 973 | 1,337 | (364 | ) | 10,691 | 14,855 | (4,164 | ) | |||||||||
NGLs (MBbl and Bbl per day) | 214 | 397 | (183 | ) | 2,347 | 4,409 | (2,061 | ) | |||||||||
Natural gas (MMcf and MMcf per day) | 1,247 | 2,947 | (1,700 | ) | 14 | 33 | (19 | ) | |||||||||
Total (MBOE and BOE per day) | 1,394 | 2,225 | (830 | ) | 15,323 | 24,720 | (9,398 | ) | |||||||||
% Change | (37 | )% | |||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||
March 31, | 2016 vs. | March 31, | 2016 vs. | ||||||||||||||
2016 | 2015 | 2015 | 2016 | 2015 | 2015 | ||||||||||||
(MBOE) | (BOE per day) | ||||||||||||||||
South Texas 1 | 1,291 | 1,925 | (634 | ) | 14,188 | 21,390 | (7,202 | ) | |||||||||
Mid-Continent and other 2 | 103 | 126 | (23 | ) | 1,134 | 1,405 | (271 | ) | |||||||||
Divested properties 3 | — | 173 | (173 | ) | — | 1,925 | (1,925 | ) | |||||||||
1,394 | 2,225 | (830 | ) | 15,323 | 24,720 | (9,398 | ) |
1 | The 2015 period includes total production and average daily production of approximately 37 MBOE (409 BOEPD) attributable to non-core Eagle Ford properties that we sold in October 2015. |
2 | The 2015 period includes total production and average daily production of approximately 9 MBOE (98 BOEPD) attributable to certain Mid-Continent properties that we sold in October 2015. Also includes total production and average daily production of approximately 5 MBOE (53 BOEPD) and 6 MBOE (63 BOEPD) for the three months ended March 31, 2016 and 2015 attributable to our three active Marcellus Shale wells. |
3 | The 2015 period includes total production and average daily production of approximately 173 MBOE (1,925 BOEPD) attributable to our former East Texas assets that were sold in August 2015. |
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
March 31, | 2016 vs. | March 31, | 2016 vs. | ||||||||||||||||||||
2016 | 2015 | 2015 | 2016 | 2015 | 2015 | ||||||||||||||||||
($ per Unit of volume) | |||||||||||||||||||||||
Crude oil (Total revenue and $ per barrel) | $ | 25,966 | $ | 59,168 | $ | (33,202 | ) | $ | 26.69 | $ | 44.26 | $ | (17.57 | ) | |||||||||
NGLs (Total revenue and $ per barrel) | 1,953 | 5,396 | (3,443 | ) | 9.14 | 13.60 | (4.46 | ) | |||||||||||||||
Natural gas (Total revenue and $ per Mcf)) | 2,402 | 8,571 | (6,169 | ) | 1.93 | 2.91 | (0.98 | ) | |||||||||||||||
Total (Total revenue and $ per BOE) | $ | 30,321 | $ | 73,135 | $ | (42,814 | ) | $ | 21.75 | $ | 32.87 | $ | (11.12 | ) | |||||||||
% Change | (59 | )% | |||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
March 31, | 2016 vs. | March 31, | 2016 vs. | ||||||||||||||||||||
2016 | 2015 | 2015 | 2016 | 2015 | 2015 | ||||||||||||||||||
($ per BOE) | |||||||||||||||||||||||
South Texas 1 | $ | 28,755 | $ | 66,865 | $ | (38,110 | ) | $ | 22.27 | $ | 34.73 | $ | (12.46 | ) | |||||||||
Mid-Continent and other 2 | 1,566 | 2,948 | (1,382 | ) | 15.17 | 23.30 | (8.13 | ) | |||||||||||||||
Divested properties 3 | — | 3,322 | (3,322 | ) | — | 19.17 | (19.17 | ) | |||||||||||||||
$ | 30,321 | $ | 73,135 | $ | (42,814 | ) | $ | 21.75 | $ | 32.87 | $ | (11.12 | ) |
1 | The 2015 period includes revenues of $1.6 million attributable to non-core Eagle Ford properties that we sold in October 2015. |
2 | The 2015 period includes revenues of $0.2 million attributable to certain Mid-Continent properties that we sold in October 2015 as well as revenues of less than $0.1 million and $0.1 million attributable to the Marcellus Shale for the three months ended March 31, 2016 and 2015. |
3 | The 2015 period includes revenues of $3.3 million attributable to our former East Texas assets that were sold in August 2015. |
Three Months Ended 2016 vs. 2015 | |||||||||||||||||
Revenue Variance Due to | |||||||||||||||||
Volume | Price | Total | |||||||||||||||
Crude oil | $ | (16,110 | ) | $ | (17,092 | ) | $ | (33,202 | ) | ||||||||
NGL | (2,491 | ) | (952 | ) | (3,443 | ) | |||||||||||
Natural gas | (4,943 | ) | (1,226 | ) | (6,169 | ) | |||||||||||
$ | (23,544 | ) | $ | (19,270 | ) | $ | (42,814 | ) |
Three Months Ended | |||||||||||||||||
March 31, | 2016 vs. | ||||||||||||||||
2016 | 2015 | 2015 | |||||||||||||||
Favorable (unfavorable) | |||||||||||||||||
Crude oil revenues as reported | $ | 25,966 | $ | 59,168 | $ | (33,202 | ) | ||||||||||
Derivative settlements, net | 30,559 | 36,811 | (6,252 | ) | |||||||||||||
$ | 56,525 | $ | 95,979 | $ | (39,454 | ) | |||||||||||
Crude oil prices per Bbl, as reported | $ | 26.69 | $ | 44.26 | $ | (17.57 | ) | ||||||||||
Derivative settlements per Bbl | 31.41 | 27.53 | 3.88 | ||||||||||||||
$ | 58.10 | $ | 71.79 | $ | (13.69 | ) | |||||||||||
Natural gas revenues as reported | $ | 2,402 | $ | 8,571 | $ | (6,169 | ) | ||||||||||
Derivative settlements, net | — | 681 | (681 | ) | |||||||||||||
$ | 2,402 | $ | 9,252 | $ | (6,850 | ) | |||||||||||
Natural gas prices per Mcf, as reported | $ | 1.93 | $ | 2.91 | $ | (0.98 | ) | ||||||||||
Derivative settlements per Mcf | — | 0.23 | (0.23 | ) | |||||||||||||
$ | 1.93 | $ | 3.14 | $ | (1.21 | ) |
Three Months Ended | |||||||||||||||||
March 31, | 2016 vs. | ||||||||||||||||
2016 | 2015 | 2015 | |||||||||||||||
Favorable (unfavorable) | |||||||||||||||||
Lease operating | $ | 6,192 | $ | 11,569 | $ | 5,377 | |||||||||||
Per unit of production ($/BOE) | 4.44 | 5.20 | $ | 0.76 | |||||||||||||
% Change per unit of production | 15 | % |
Three Months Ended | |||||||||||||||||
March 31, | 2016 vs. | ||||||||||||||||
2016 | 2015 | 2015 | |||||||||||||||
Favorable (unfavorable) | |||||||||||||||||
Gathering, processing and transportation | $ | 3,818 | $ | 7,498 | $ | 3,680 | |||||||||||
Per unit of production ($/BOE) | $ | 2.74 | $ | 3.37 | $ | 0.63 | |||||||||||
% Change per unit of production | 19 | % |
Three Months Ended | |||||||||||||||||
March 31, | 2016 vs. | ||||||||||||||||
2016 | 2015 | 2015 | |||||||||||||||
Favorable (unfavorable) | |||||||||||||||||
Production and ad valorem taxes | |||||||||||||||||
Production/severance taxes | $ | 196 | $ | 3,246 | $ | 3,050 | |||||||||||
Ad valorem taxes | 557 | 1,443 | 886 | ||||||||||||||
$ | 753 | $ | 4,689 | $ | 3,936 | ||||||||||||
Per unit production ($/BOE) | $ | 0.54 | $ | 2.11 | $ | 1.57 | |||||||||||
% Change per unit of production | 74 | % | |||||||||||||||
Production/severance tax rate as a percent of product revenue | 0.6 | % | 4.4 | % |
Three Months Ended | |||||||||||||||
March 31, | 2016 vs. | ||||||||||||||
2016 | 2015 | 2015 | |||||||||||||
Favorable (unfavorable) | |||||||||||||||
Recurring general and administrative expenses | $ | 5,600 | $ | 10,565 | $ | 4,965 | |||||||||
Share-based compensation (liability-classified) | (7 | ) | 379 | 386 | |||||||||||
Share-based compensation (equity-classified) | (602 | ) | 990 | 1,592 | |||||||||||
Significant special charges: | |||||||||||||||
Strategic and financial advisory costs | 11,063 | 47 | (11,016 | ) | |||||||||||
Restructuring expenses | 748 | (11 | ) | (759 | ) | ||||||||||
Total general and administrative expenses | $ | 16,802 | $ | 11,970 | $ | (4,832 | ) | ||||||||
Per unit of production ($/BOE) | $ | 12.05 | $ | 5.38 | $ | (6.67 | ) | ||||||||
% Change per unit of production | (124 | )% | |||||||||||||
Per unit of production excluding equity-classified and liability-classified share-based compensation expense ($/BOE) | $ | 12.49 | $ | 4.76 | $ | (7.73 | ) | ||||||||
Per unit of production excluding all share-based compensation and other significant special charges identified above ($/BOE) | $ | 4.02 | $ | 4.75 | $ | 0.73 |
Three Months Ended | |||||||||||||||||
March 31, | 2016 vs. | ||||||||||||||||
2016 | 2015 | 2015 | |||||||||||||||
Favorable (unfavorable) | |||||||||||||||||
Unproved leasehold amortization | $ | 856 | $ | 1,983 | $ | 1,127 | |||||||||||
Drilling rig termination charges | 490 | 3,625 | 3,135 | ||||||||||||||
Geological and geophysical (seismic) costs | 33 | 287 | 254 | ||||||||||||||
Other, primarily delay rentals | (52 | ) | (8 | ) | 44 | ||||||||||||
$ | 1,327 | $ | 5,887 | $ | 4,560 |
Three Months Ended | |||||||||||||||||
March 31, | 2016 vs. | ||||||||||||||||
2016 | 2015 | 2015 | |||||||||||||||
Favorable (unfavorable) | |||||||||||||||||
DD&A expense | $ | 13,812 | $ | 90,760 | $ | 76,948 | |||||||||||
DD&A rate ($/BOE) | $ | 9.91 | $ | 40.79 | $ | 30.88 | |||||||||||
Production | Rates | Total | |||||||||||||||
DD&A variance due to: | $ | 33,897 | $ | 43,051 | $ | 76,948 |
Three Months Ended | |||||||||||||||||
March 31, | 2016 vs. | ||||||||||||||||
2016 | 2015 | 2015 | |||||||||||||||
Favorable (unfavorable) | |||||||||||||||||
Interest on borrowings and related fees | $ | 23,305 | $ | 22,808 | $ | (497 | ) | ||||||||||
Amortization of debt issuance costs | 1,269 | 1,104 | (165 | ) | |||||||||||||
Capitalized interest | (140 | ) | (1,899 | ) | (1,759 | ) | |||||||||||
$ | 24,434 | $ | 22,013 | $ | (2,421 | ) | |||||||||||
Weighted-average debt outstanding | $ | 1,241,070 | $ | 1,190,304 | |||||||||||||
Weighted average interest rate | 7.51 | % | 7.66 | % |
Three Months Ended | |||||||||||||||||
March 31, | 2016 vs. | ||||||||||||||||
2016 | 2015 | 2015 | |||||||||||||||
Favorable (unfavorable) | |||||||||||||||||
Oil and gas derivatives settled | $ | 30,559 | $ | 37,492 | $ | (6,933 | ) | ||||||||||
Oil and gas derivatives gain (loss) | (26,067 | ) | (14,625 | ) | (11,442 | ) | |||||||||||
$ | 4,492 | $ | 22,867 | $ | (18,375 | ) |
Three Months Ended | |||||||||||||||||
March 31, | 2016 vs. | ||||||||||||||||
2016 | 2015 | 2015 | |||||||||||||||
Favorable (unfavorable) | |||||||||||||||||
Income tax expense | $ | — | $ | 141 | $ | (141 | ) | ||||||||||
Effective tax rate | — | % | 0.2 | % |
Average | ||||||||||||||||||
Volume Per | Weighted Average Price | Fair Value | ||||||||||||||||
Instrument | Day | Floor/Swap | Ceiling | Asset | Liability | |||||||||||||
Crude Oil: | (barrels) | ($/barrel) | ||||||||||||||||
Second quarter 2016 | Swaps | 4,000 | $ | 81.45 | $ | 15,107 | $ | — | ||||||||||
Third quarter 2016 | Swaps | 4,000 | $ | 81.45 | 14,478 | — | ||||||||||||
Fourth quarter 2016 | Swaps | 4,000 | $ | 81.45 | 14,052 | — | ||||||||||||
Settlements pending | 5,393 | — |
Change of $10.00 per Bbl of Crude Oil or $1.00 per MMBtu of Natural Gas ($ in millions) | |||||||
Increase | Decrease | ||||||
Effect on the fair value of crude oil derivatives 1 | $ | (14.2 | ) | $ | 14.4 | ||
Effect on the remainder of 2016 operating income, excluding crude oil derivatives 2 | $ | 18.7 | $ | (18.7 | ) | ||
Effect on the remainder of 2016 operating income, excluding natural gas derivatives 2 | $ | 2.7 | $ | (2.7 | ) |
1 | Based on derivatives outstanding as of March 31, 2016. |
2 | Based on a forecast which assumes no drilling during the remainder of 2016. These sensitivities are subject to significant change. |
Item 1 | Legal Proceedings |
Item 1A | Risk Factors |
Item 6 | Exhibits |
(10.1) | Tenth Amendment, dated as of January 8, 2016, among Penn Virginia Holding Corp., as borrower, Penn Virginia Corporation, as parent, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on January 11, 2016). |
(10.2) | Eleventh Amendment to the Credit Agreement, dated as of March 15, 2016, among Penn Virginia Holding Corp., as borrower, Penn Virginia Corporation, as parent, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.1.11 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015). |
(12.1) | Statement of Computation of Ratio of Earnings to Fixed Charges and Preferred Dividends Calculation. |
(31.1) | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
(31.2) | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
(32.1) | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
(32.2) | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
(101.INS) | XBRL Instance Document |
(101.SCH) | XBRL Taxonomy Extension Schema Document |
(101.CAL) | XBRL Taxonomy Extension Calculation Linkbase Document |
(101.DEF) | XBRL Taxonomy Extension Definition Linkbase Document |
(101.LAB) | XBRL Taxonomy Extension Label Linkbase Document |
(101.PRE) | XBRL Taxonomy Extension Presentation Linkbase Document |
PENN VIRGINIA CORPORATION | ||
By: | /s/ STEVEN A. HARTMAN | |
Steven A. Hartman | ||
Senior Vice President and Chief Financial Officer | ||
April 29, 2016 | By: | /s/ JOAN C. SONNEN |
Joan C. Sonnen | ||
Vice President, Chief Accounting Officer and Controller | ||
(Principal Accounting Officer) |
Three Months March 31, | Year Ended December 31, | ||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Earnings: | |||||||||||||||||||||||
Loss from continuing operations before income taxes | $ | (33,473 | ) | $ | (1,588,332 | ) | $ | (541,270 | ) | $ | (220,766 | ) | $ | (173,291 | ) | $ | (221,070 | ) | |||||
Fixed charges | 28,135 | 122,505 | 121,608 | 97,903 | 66,616 | 62,002 | |||||||||||||||||
Capitalized interest | (140 | ) | (6,288 | ) | (7,232 | ) | (5,266 | ) | (803 | ) | (1,983 | ) | |||||||||||
Preferred stock dividend requirements | (3,152 | ) | (22,866 | ) | (22,661 | ) | (10,647 | ) | (2,793 | ) | — | ||||||||||||
$ | (8,630 | ) | $ | (1,494,981 | ) | $ | (449,555 | ) | $ | (138,776 | ) | $ | (110,271 | ) | $ | (161,051 | ) | ||||||
Fixed charges: | |||||||||||||||||||||||
Interest expense | $ | 24,434 | $ | 90,951 | $ | 88,831 | $ | 78,841 | $ | 59,339 | $ | 56,216 | |||||||||||
Capitalized interest | 140 | 6,288 | 7,232 | 5,266 | 803 | 1,983 | |||||||||||||||||
Rent factor | 409 | 2,400 | 2,884 | 3,149 | 3,681 | 3,803 | |||||||||||||||||
Preferred stock dividend requirements | 3,152 | 22,866 | 22,661 | 10,647 | 2,793 | — | |||||||||||||||||
$ | 28,135 | $ | 122,505 | $ | 121,608 | $ | 97,903 | $ | 66,616 | $ | 62,002 | ||||||||||||
Ratio of earnings to fixed charges and preferred stock dividends 1 | — | — | — | — | — | — | |||||||||||||||||
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and |
(d) | Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
/s/ EDWARD B. CLOUES, II | |
Edward B. Cloues, II | |
Chairman of the Board and Chief Executive Officer |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and |
(d) | Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
/s/ STEVEN A. HARTMAN | |
Steven A. Hartman | |
Senior Vice President and Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ EDWARD B. CLOUES, II | |
Edward B. Cloues, II | |
Chairman of the Board and Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ STEVEN A. HARTMAN | |
Steven A. Hartman | |
Senior Vice President and Chief Financial Officer |
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Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Apr. 25, 2016 |
|
Document Documentand Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | PVAH | |
Entity Registrant Name | PENN VIRGINIA CORP | |
Entity Central Index Key | 0000077159 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 88,217,880 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|||
Revenues | ||||
Crude oil | $ 25,966 | $ 59,168 | ||
Natural gas liquids (NGLs) | 1,953 | 5,396 | ||
Natural gas | 2,402 | 8,571 | ||
Gain (loss) on sales of property and equipment, net | (153) | (91) | ||
Other, net | 329 | 1,483 | ||
Total revenues | 30,497 | 74,527 | ||
Operating expenses | ||||
Lease operating | 6,192 | 11,569 | ||
Gathering, processing and transportation | 3,818 | 7,498 | ||
Production and ad valorem taxes | 753 | 4,689 | ||
General and administrative | 17,102 | 11,970 | ||
Exploration | 1,327 | 5,887 | ||
Depreciation, depletion and amortization | 13,812 | 90,790 | ||
Total operating expenses | 43,004 | 132,403 | ||
Operating loss | (12,507) | (57,876) | ||
Other income (expense) | ||||
Interest expense | (24,434) | (22,013) | ||
Derivatives | 4,492 | 22,867 | ||
Other | (1,024) | (2) | ||
Loss before income taxes | (33,473) | (57,024) | ||
Income tax expense | 0 | (141) | ||
Net loss | (33,473) | (57,165) | ||
Preferred stock dividends | [1] | (3,152) | (6,067) | |
Net loss attributable to common shareholders | $ (36,625) | $ (63,232) | ||
Net loss per share: | ||||
Basic (in dollars per share) | $ (0.43) | $ (0.88) | ||
Diluted (in dollars per share) | $ (0.43) | $ (0.88) | ||
Weighted average shares outstanding – basic | 85,941 | 71,820 | ||
Weighted average shares outstanding – diluted | 85,941 | 71,820 | ||
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
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Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (33,473) | $ (57,165) |
Other comprehensive loss: | ||
Change in pension and postretirement obligations, net of tax of $0 in 2016 and $(6) in 2015 | (27) | (11) |
Total Other Comprehensive Income (Loss), Net of Tax | (27) | (11) |
Comprehensive loss | $ (33,500) | $ (57,176) |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
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Statement of Comprehensive Income [Abstract] | ||
Change in pension and postretirement obligations, net of tax | $ 0 | $ (6) |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2016 |
Dec. 31, 2015 |
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Schedule of Stockholders' Equity [Line Items] | ||
Preferred stock, par value | $ 100 | $ 100 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, redemption value per share (in dollars per share) | $ 10,000 | $ 10,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 228,000,000 | 228,000,000 |
Common stock, shares issued | 73,297,205 | 81,252,676 |
Treasury stock, shares | 455,689 | 455,689 |
Series A Preferred Stock | ||
Schedule of Stockholders' Equity [Line Items] | ||
Preferred stock, issued | 3,864 | 3,915 |
Series B Preferred Stock | ||
Schedule of Stockholders' Equity [Line Items] | ||
Preferred stock, issued | 17,152 | 27,551 |
Organization |
3 Months Ended |
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Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Organization | Nature of Operations Penn Virginia Corporation (together with its consolidated subsidiaries unless the context otherwise requires, “Penn Virginia,” the “Company,” “we,” “us” or “our”) is an independent oil and gas company engaged in the onshore exploration, development and production of oil, natural gas liquids (“NGLs”) and natural gas. Our current operations consist primarily of operating our producing wells in the Eagle Ford Shale (the “Eagle Ford”) in South Texas. Our operations are substantially concentrated with over 90 percent of our production, revenues and capital expenditures being attributable to this region. We also have less significant operations in Oklahoma, primarily in the Granite Wash. |
Basis of Presentation |
3 Months Ended |
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Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Our unaudited Condensed Consolidated Financial Statements include the accounts of Penn Virginia and all of our subsidiaries. Intercompany balances and transactions have been eliminated. Our Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Preparation of these statements involves the use of estimates and judgments where appropriate. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of our Condensed Consolidated Financial Statements have been included. Our Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes included in our Annual Report on Form 10-K for the year ended December 31, 2015. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. Certain amounts for the corresponding 2015 periods have been reclassified to conform to the current year presentation. These reclassifications have no impact on our previously reported results of operations, balance sheets or cash flows. Going Concern Presumption Our unaudited Condensed Consolidated Financial Statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and other commitments in the normal course of business. Our primary sources of liquidity have historically included cash from operating activities, borrowings under our revolving credit agreement (the “Revolver”), proceeds from sales of assets and, from time to time, proceeds from capital market transactions, including the offering of debt and equity securities. Our cash flows from operating activities are subject to significant volatility due to changes in commodity prices for our crude oil, NGL and natural gas products, as well as variations in our production. Due primarily to the substantial decline in commodity prices over the last twelve months, our liquidity has been significantly negatively impacted. We have incurred net losses in each of the three years ended December 31, 2015, and reported a net loss attributable to common shareholders of $33.5 million for the three months ended March 31, 2016. Further, based on our current operating forecast and capital structure, we do not believe we will be able to comply with all of the financial covenants under the Revolver during the next twelve months. We are also dependent on restructuring our debt or obtaining additional debt and/or equity financing to continue our planned principal business operations. These factors raise substantial doubt about our ability to continue as a “going concern.” As of March 31, 2016 and through the date upon which the Consolidated Financial Statements were issued, we were not in compliance with certain covenants under the Revolver (see Note 7). In addition, we were required to deliver audited, consolidated financial statements without a “going concern” or like qualification or exception. The audit report prepared by our registered independent public accountants with respect to the financial statements in the Annual Report on Form 10-K for the year ended December 31, 2015 included an explanatory paragraph expressing substantial doubt as to our ability to continue as a “going concern.” As a result of these factors, we are in default under the Revolver. Pursuant to an amendment to the Revolver (see Note 7), we received an agreement from our lenders that these defaults will not become events of default until May 10, 2016, if certain conditions have been satisfied. Based on the foregoing and our current circumstances and general financial condition, it is highly likely that we will seek protection under Chapter 11 of the United States Bankruptcy Code (“Chapter 11”) in an effort to accomplish a court-supervised comprehensive restructuring of our balance sheet. Management’s Plans As of March 31, 2016, the total outstanding principal amount of our debt obligations was approximately $1.2 billion. We are continuing to actively explore and evaluate various strategic alternatives to reduce the level of our debt obligations and lower our future cash interest obligations. In January 2016, we retained Kirkland & Ellis LLP (“K&E”), Jefferies LLC (“Jefferies”) and Alvarez & Marsal North America, LLC (“A&M”), as well as other consultants and legal and tax advisers, to provide strategic advice generally and to act as our advisers in that regard. The timing and outcome of these efforts is highly uncertain. One or more of these alternatives could potentially be consummated without the consent of any one or more of our current security holders and, if consummated, could be dilutive to the holders of our outstanding equity securities and adversely affect the trading prices and values of our current debt and equity securities or, if we were to seek protection under Chapter 11, could cause the shares of our common stock to be canceled, with limited recovery, if any. We are actively working to address these matters; however, there can be no assurance that our efforts will be successful or completed on commercially acceptable terms. Our Condensed Consolidated Financial Statements do not include any adjustments that may result from a potential Chapter 11 filing or from uncertainty surrounding our ability to continue as a going concern. We incurred a total of $11.1 million in professional fees during the three months ended March 31, 2016 in connection with our ongoing negotiations with our creditors to refinance the Company. The total includes $7.8 million for our advisers and $3.3 million incurred by our banks and unsecured noteholders for which we are responsible. These costs are included as a component of our general and administrative expenses. In an ongoing effort to reduce our administrative cost burden, we reduced our total employee headcount by 10 employees in February 2016. We incurred costs for severance and termination benefits in the amount of $0.8 million in connection with the release of these employees. These costs are included as a component of our general and administrative expenses. We paid a total of $0.4 million of these charges in cash during the three months ended March 31, 2016 leaving $0.4 million outstanding as of March 31, 2016. This amount is included in the Accounts payable and accrued liabilities caption on our Condensed Consolidated Balance Sheet. New Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016–09, Improvements to Employee Share-based Payment Accounting (“ASU 2016–09”), which simplifies the accounting for share-based compensation. The areas for simplification that are applicable to publicly held companies are as follows: (1) Accounting for Income Taxes, (2) Classification of Excess Tax Benefits on the Statement of Cash Flows, (3) Forfeitures, (4) Minimum Statutory Tax Withholding Requirements and (5) Classification of Employee Taxes Paid on the Statement of Cash Flows when an employer withholds shares for tax-withholding purposes. The effective date of ASU 2016–09 is January 1, 2017, with early adoption permitted. We are evaluating the effect that ASU 2016–09 will have on our Consolidated Financial Statements and related disclosures. In February 2016, the FASB issued ASU 2016–02, Leases (“ASU 2016–02”), which will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with terms of more than twelve months. Consistent with current U.S. GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. ASU 2016–02 also will require disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases. The effective date of ASU 2016–02 is January 1, 2019, with early adoption permitted. We are evaluating the effect that ASU 2016–02 will have on our Consolidated Financial Statements and related disclosures. In May 2014, the FASB issued ASU 2014–09, Revenues from Contracts with Customers (“ASU 2014–09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014–09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective on January 1, 2018. The standard permits the use of either the retrospective or cumulative effect transition method upon adoption. We are evaluating the effect that ASU 2014–09 will have on our Consolidated Financial Statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of ASU 2014–09 on our ongoing financial reporting. Subsequent Events Management has evaluated all activities of the Company through the date upon which our Condensed Consolidated Financial Statements were issued and has concluded that, except for the termination of certain derivative instruments in order to pay down a portion of the Revolver (see Notes 5 and 7) and our election not to pay interest due on our senior notes (see Note 7), no subsequent events have occurred that would require recognition in our Condensed Consolidated Financial Statements or disclosure in the Notes to Condensed Consolidated Financial Statements. |
Acquisitions and Divestivures |
3 Months Ended |
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Mar. 31, 2016 | |
Acquisitions and Divestitures [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions Undeveloped Eagle Ford Acreage In August 2014, we acquired undeveloped acreage in the Eagle Ford in Lavaca County, Texas for a purchase price of $45.6 million, of which $34.9 million was paid at closing and the balance of $10.7 million will be paid over three years as a drilling carry. We anticipate that we will incur an obligation for $1.9 million under the drilling carry commitment by June 2016. Divestitures South Texas Oil Gathering System Construction Rights and Natural Gas Gathering and Gas Lift Assets In July 2014, we sold the rights to construct a crude oil gathering and intermediate transportation system in South Texas to Republic Midstream, LLC (“Republic”) and in January 2014, we sold our South Texas natural gas gathering and gas lift assets to American Midstream Partners, LP (“AMID”). Concurrent with these sales, we entered into long-term agreements with Republic and AMID to provide us crude oil gathering and intermediate transportation services and natural gas gathering, compression and gas lift services, respectively, for a substantial portion of our future South Texas production. We realized significant gains and recognized a substantial portion thereof upon the closing of these transactions in 2014. With respect to the Republic transaction, $75.7 million of the total gain was deferred and is being recognized over a twenty-five year period which began in March 2016. We amortized $0.1 million of the deferred gain during the three months ended March 31, 2016. As of March 31, 2016, $3.0 million of the remaining deferred gain is included as a component of Accounts payable and accrued expenses and $72.6 million, representing the remaining noncurrent portion, is included as a component of Other liabilities on our Condensed Consolidated Balance Sheets. With respect to the AMID transaction, $10.6 million of the total gain was deferred and is being recognized over a twenty-five year period which began in January 2014. We amortized $0.1 million of the deferred gain during each of the three months ended March 31, 2016 and 2015. As of March 31, 2016, $0.4 million of the remaining deferred gain was included as a component of Accounts payable and accrued expenses and $9.3 million, representing the noncurrent portion, was included as a component of Other liabilities on our Condensed Consolidated Balance Sheets. |
Accounts Receivable and Major Customers |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable and Major Customers | Accounts Receivable and Major Customers The following table summarizes our accounts receivable by type as of the dates presented:
For the three months ended March 31, 2016, two customers accounted for $26.5 million, or approximately 88%, of our consolidated product revenues. The revenues generated from these customers during the three months ended March 31, 2016 were $13.9 million and $12.6 million, or 46% and 42% of the consolidated total, respectively. As of March 31, 2016, $5.9 million, or approximately 29%, of our consolidated accounts receivable from customers was related to these customers. For the three months ended March 31, 2015, three customers accounted for $47.9 million, or approximately 66%, of our consolidated product revenues. The revenues generated from these customers during the three months ended March 31, 2015 were $28.0 million, $12.0 million, and $7.9 million, or approximately 38%, 17% and 11% of the consolidated total, respectively. As of December 31, 2015, $21.1 million, or approximately 90%, of our consolidated accounts receivable from customers was related to these customers. No significant uncertainties exist related to the collectability of amounts owed to us by any of these customers. |
Derivative Instruments |
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Derivative Instruments | Derivative Instruments We utilize derivative instruments to mitigate our financial exposure to crude oil and natural gas price volatility. Our derivative instruments are not formally designated as hedges in the context of U.S. GAAP. Commodity Derivatives We utilize collars and swaps, which are placed with financial institutions that we believe are acceptable credit risks, to hedge against the variability in cash flows associated with anticipated sales of our future oil and gas production. While the use of derivative instruments limits the risk of adverse price movements, such use may also limit future revenues from favorable price movements. The counterparty to a collar or swap contract is required to make a payment to us if the settlement price for any settlement period is below the floor or swap price for such contract. We are required to make a payment to the counterparty if the settlement price for any settlement period is above the ceiling or swap price for such contract. Neither party is required to make a payment to the other party if the settlement price for any settlement period is equal to or greater than the floor price and equal to or less than the ceiling price for such contract. We determine the fair values of our commodity derivative instruments based on discounted cash flows derived from third-party quoted forward prices for NYMEX Henry Hub gas and West Texas Intermediate crude oil closing prices as of the end of the reporting period. The discounted cash flows utilize discount rates adjusted for the credit risk of our counterparties if the derivative is in an asset position and our own credit risk if the derivative is in a liability position. In March 2016, we terminated two derivative contracts for $22.9 million of proceeds that were used to reduce amounts outstanding under the Revolver. In connection with these transactions, the counterparties to the derivative contracts, which are also affiliates of participant banks in the Revolver, transferred the cash proceeds from the transactions directly to the administrative agent under the Revolver in order to reduce the amount outstanding thereunder. Accordingly, the transactions have been presented as non-cash financing activities on our Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2016. During April 2016, we terminated two additional derivative contracts for total proceeds of $22.6 million and applied $16.6 million to further reduce amounts outstanding under the Revolver in a manner similar to the March transactions (see Note 7). The following table sets forth our commodity derivative positions as of March 31, 2016:
Subsequent to the aforementioned April termination transactions, we have remaining hedged positions covering approximately 2,000 barrels of oil per day at a weighted-average price of $77.70 per barrel for the remainder of 2016. Our natural gas hedges expired in 2015 and we anticipate remaining unhedged with respect to natural gas production for the remainder of 2016. Financial Statement Impact of Derivatives The impact of our derivative activities on income is included in the Derivatives caption on our Condensed Consolidated Statements of Operations. The following table summarizes the effects of our derivative activities for the periods presented:
The effects of derivative gains and (losses) and cash settlements (except for those cash settlements attributable to the aforementioned termination transactions) are reported as adjustments to reconcile net income (loss) to net cash provided by operating activities. These items are recorded in the Derivative contracts section of our Condensed Consolidated Statements of Cash Flows under the Net (gains) losses and Cash settlements, net captions. The following table summarizes the fair values of our derivative instruments, as well as the locations of these instruments on our Condensed Consolidated Balance Sheets as of the dates presented:
As of March 31, 2016, we reported a commodity derivative asset of $49.0 million. The contracts associated with this position are with three counterparties, all of which are investment grade financial institutions. This concentration may impact our overall credit risk, either positively or negatively, in that these counterparties may be similarly affected by changes in economic or other conditions. We have neither paid to, nor received from, our counterparties any cash collateral in connection with our derivative positions. No significant uncertainties exist related to the collectability of amounts that may be owed to us by these counterparties. |
Property and Equipment |
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Property and Equipment | Property and Equipment The following table summarizes our property and equipment as of the dates presented:
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Long-Term Debt |
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Long-Term Debt | Debt Obligations The following table summarizes our debt obligations as of the dates presented:
_______________________ 1 Issuance costs attributable to the Revolver, which represent costs attributable to the access to credit over the Revolver’s contractual term, are presented as a component of Other assets (see Note 10). Revolving Credit Facility In January 2016, the Revolver was amended to (i) allow us to convert to or continue LIBOR loans without having to make a solvency representation and (ii) increase our mortgage requirement from 80 percent to 100 percent (subject to certain exceptions) of our proved reserves. On March 15, 2016, we entered into the Eleventh Amendment (the “Eleventh Amendment”) to the Revolver, which provided (i) for an extension before certain events of default under the Revolver will occur, (ii) for an initial reduction in commitments to $171.8 million and (iii) that the borrowing base under the Revolver is not subject to scheduled redetermination until May 15, 2016. Specifically, the extension period with respect to events of default was through 12:01 am on April 12, 2016, which was further extended through 12:01 am on May 10, 2016, as certain conditions were satisfied. The extension period can be terminated early upon certain triggering events. The key conditions to the first extension (April 12, 2016) and entry into the Eleventh Amendment were: (i) termination of certain hedge agreements and application of the proceeds against the loans (which resulted in a further reduction in our lenders’ commitments), (ii) entry into control agreements over deposit accounts, subject to customary exceptions, (iii) payment of adviser fees and (iv) agreement to certain changes to the Revolver, including increasing the interest rate by 1.00%, tightening certain restrictive covenants and agreeing that monthly hedge settlements will be applied against the loans. The key conditions to the second extension (May 10, 2016) were: (i) termination of certain additional hedges and application of a portion of the proceeds against the loans (which resulted in a further reduction in our lenders’ commitments) and (ii) no notification by the representative of the ad hoc committee of unsecured noteholders that they do not support such extension. In connection with the first and second extensions, we terminated certain derivative contracts representing hedges and proceeds of $22.9 million and $16.6 million were applied to reduce the amounts outstanding under the Revolver in March 2016 and April 2016, respectively. Pursuant to the Eleventh Amendment, as of March 31, 2016, the commitments under the Revolver were reduced to $148.9 million. As a result of the April hedge termination transaction referenced above, the total commitment was further reduced to $126.9 million, which is equal to our currently outstanding loans ($125.0 million) and issued letters of credit ($1.9 million). Because we do not have any unused commitment capacity, we are not able to draw on the Revolver to pay our second quarter interest payments on our senior notes or for any other purpose. Moreover, our lenders may in the future exercise their right to redetermine our borrowing base under the Revolver. If our borrowing base is redetermined below the amount of our outstanding borrowings, a deficiency will result, and any deficiency must be repaid within 60 days. Borrowings under the Revolver bear interest, at our option, at either (i) a rate derived from the London Interbank Offered Rate, as adjusted for statutory reserve requirements for Eurocurrency liabilities (“Adjusted LIBOR”), plus an applicable margin (ranging from 2.500% to 3.500%) or (ii) the greater of (a) the prime rate, (b) the federal funds effective rate plus 0.5% or (c) the one-month Adjusted LIBOR plus 1.0% (clauses (a), (b) and (c) (the “Base Rate”)), and, in each case, plus an applicable margin (ranging from 1.500% to 2.500%). The applicable margin is determined based on the ratio of our outstanding borrowings to the available Revolver capacity. As of March 31, 2016, the actual interest rate on the outstanding borrowings under the Revolver was 4.125% which is derived from an Adjusted LIBOR rate of 0.625% plus an applicable margin of 3.5000%. Commitment fees are charged at 0.375% to 0.500% on the undrawn portion of the Revolver depending on our ratio of outstanding borrowings to the available Revolver capacity. As of March 31, 2016, commitment fees were charged at a rate of 0.500%. The Revolver is guaranteed by the Company and all of our material subsidiaries (the “Guarantor Subsidiaries”). The obligations under the Revolver are secured by a first priority lien on substantially all of our proved oil and gas reserves and a pledge of the equity interests in the Guarantor Subsidiaries. The Revolver includes current ratio, leverage ratio and credit exposure financial covenants. Under the current ratio covenant, the ratio of current assets to current liabilities as of the last day of any fiscal quarter may not be less than 1.0 to 1.0. Current assets and current liabilities attributable to derivative instruments are excluded. In addition, current assets include the amount of any unused commitment under the Revolver. Under the leverage ratio covenant, the ratio of total debt to EBITDAX, for any four consecutive quarters may not exceed 4.75 to 1.0 through March 31, 2016; 5.25 to 1.0 through June 30, 2016; 5.50 to 1.0 through December 31, 2016; 4.50 to 1.0 through March 31, 2017; and 4.0 to 1.0 through maturity in September 2017. Furthermore, we are precluded from the payment of cash dividends on our outstanding convertible preferred stock if the leverage ratio for the preceding four quarters exceeds 5.0 to 1.0. Pursuant to the Eleventh Amendment, we are precluded from paying dividends on our outstanding convertible preferred stock and common stock. Under the credit exposure covenant, the ratio of credit exposure to EBITDAX for any four consecutive quarters ending on or prior to March 31, 2017 may not exceed 2.75 to 1.0. Credit exposure consists of all outstanding borrowings under the Revolver, including any outstanding letters of credit. As of March 31, 2016 and through the date upon which the Consolidated Financial Statements were issued, we were not in compliance with the current ratio covenant or the leverage ratio covenant under the Revolver. Due primarily to substantial doubt with respect to our ability to continue as a going concern, our registered independent public accountants have expressed an opinion with a going concern explanatory paragraph on our consolidated audited financial statements for the year ended December 31, 2015. A going concern explanatory paragraph represents a violation of one of our non-financial affirmative covenants under the Revolver, which is characterized as a default, thereby making the outstanding borrowings under the Revolver subject to acceleration. Accordingly, the amounts outstanding under the Revolver were reclassified to current at December 31, 2015 and remain as such as of March 31, 2016. These defaults, however, are currently subject to the extension provided by the Eleventh Amendment, as described above. Due to various cross-default provisions under the indentures governing our senior notes, our senior notes are also classified as current liabilities as of March 31, 2016. 2019 Senior Notes Our 7.25% Senior Notes due 2019 (the “2019 Senior Notes”), which were issued at par in April 2011, bear interest at an annual rate of 7.25% payable on April 15 and October 15 of each year. We may redeem all or part of the 2019 Senior Notes at a redemption price of 103.625% of the principal amount reducing to 100% in April 2017 and thereafter. The 2019 Senior Notes are senior to our existing and future subordinated indebtedness and are effectively subordinated to our secured indebtedness, including the Revolver, to the extent of the collateral securing that indebtedness. The obligations under the 2019 Senior Notes are fully and unconditionally guaranteed by the Guarantor Subsidiaries. Additionally, the 2019 Senior Notes contain certain cross-default provisions, which could result in an event of default under the notes if the lenders under the Revolver accelerate the Revolver obligations. Such an event of default, if it occurs, would permit the noteholders to accelerate the 2019 Senior Notes. We elected not to make the $10.9 million interest payment on the 2019 Senior Notes due April 15, 2016. If we do not make such interest payment by May 15, 2016, there will be an event of default pursuant to the indenture governing the 2019 Senior Notes. 2020 Senior Notes Our 8.50% Senior Notes due 2020 (the “2020 Senior Notes”), which were issued at par in April 2013, bear interest at an annual rate of 8.50% payable on May 1 and November 1 of each year. Beginning in May 2017, we may redeem all or part of the 2020 Senior Notes at a redemption price of 104.250% of the principal amount reducing to 100% in May 2019 and thereafter. The 2020 Senior Notes are senior to our existing and future subordinated indebtedness and are effectively subordinated to our secured indebtedness, including the Revolver, to the extent of the collateral securing that indebtedness. The obligations under the 2020 Senior Notes are fully and unconditionally guaranteed by the Guarantor Subsidiaries. Additionally, the 2020 Senior Notes contain certain cross-default provisions, which could result in an event of default under the notes if the lenders under the Revolver accelerate the Revolver obligations. Such an event of default, if it occurs, would permit the noteholders to accelerate the 2020 Senior Notes. We do not expect to make the scheduled $32.9 million interest payment on the 2020 Senior Notes that is due on May 1, 2016. Guarantees The guarantees under the Revolver and the 2019 Senior Notes and 2020 Senior Notes are full and unconditional and joint and several. Substantially all of our consolidated assets are held by the Guarantor Subsidiaries. The parent company and its non-guarantor subsidiaries have no material independent assets or operations. There are no significant restrictions on the ability of the parent company or any of the Guarantor Subsidiaries to obtain funds through dividends, advances or loans. |
Income Taxes |
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Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes We recognized a federal income tax benefit for the three months ended March 31, 2016 at the statutory rate of 35%; however, the federal tax benefit was fully offset by a valuation allowance against our net deferred tax assets. We considered both the positive and negative evidence in determining that it was more likely than not that some portion or all of our deferred tax assets will not be realized, primarily as a result of recent cumulative losses. We recognized a minimal state deferred income tax expense for the three months ended March 31, 2015 at an effective rate of 0.2%. We received a state income tax refund of less than $0.1 million during the three months ended March 31, 2016. |
Firm Transportation Obligation |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Exit Activities | Firm Transportation Obligation We have a contractual obligation for certain firm transportation capacity in the Appalachian region that expires in 2022 and, as a result of the sale of our natural gas assets in West Virginia, Kentucky and Virginia in 2012, we no longer have production to satisfy this commitment. While we sell our unused firm transportation to the extent possible, we recognized an obligation in 2012 representing the liability for estimated discounted future net cash outflows over the remaining term of the contract. The following table reconciles the obligation as of the dates presented:
The accretion of the obligation, net of any recoveries from periodic sales of our contractual capacity, is charged as an offset to Other revenue. As of March 31, 2016, $2.7 million of the obligation is classified as current and is included in the Accounts payable and accrued liabilities caption while the remaining $10.4 million is classified as noncurrent and is included in the Other liabilities caption on our Condensed Consolidated Balance Sheets. |
Additional Balance Sheet Detail |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Balance Sheet Detail | Additional Balance Sheet Detail The following table summarizes components of selected balance sheet accounts as of the dates presented:
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Fair Value Measurements |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements We apply the authoritative accounting provisions for measuring fair value of both our financial and nonfinancial assets and liabilities. Fair value is an exit price representing the expected amount we would receive upon the sale of an asset or that we would expect to pay to transfer a liability in an orderly transaction with market participants at the measurement date. Our financial instruments that are subject to fair value disclosure consist of cash and cash equivalents, accounts receivable, accounts payable, derivatives and long-term debt. As of March 31, 2016, the carrying values of all of these financial instruments, except the portion of our debt obligations with fixed interest rates, approximated fair value. The following table summarizes the fair value of our debt obligations with fixed interest rates, which is estimated based on the published market prices for these financial liabilities, as of the dates presented:
Recurring Fair Value Measurements Certain financial assets and liabilities are measured at fair value on a recurring basis in our Condensed Consolidated Balance Sheets. The following tables summarize the valuation of those assets and liabilities as of the dates presented:
Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one level of the fair value hierarchy to another level. In such instances, the transfer is deemed to have occurred at the beginning of the quarterly period in which the event or change in circumstances that caused the transfer occurred. There were no transfers during the three months ended March 31, 2016 and 2015. We used the following methods and assumptions to estimate fair values for the financial assets and liabilities described below:
Non-Recurring Fair Value Measurements The most significant non-recurring fair value measurements utilized in the preparation of our Condensed Consolidated Financial Statements are those attributable to the recognition and measurement of net assets acquired, the recognition and measurement of asset impairments and the initial determination of AROs. The factors used to determine fair value for purposes of recognizing and measuring net assets acquired and asset impairments include, but are not limited to, estimates of proved and probable reserves, future commodity prices, indicative sales prices for properties, the timing of future production and capital expenditures and a discount rate commensurate with the risk reflective of the lives remaining for the respective oil and gas properties. Because these significant fair value inputs are typically not observable, we have categorized the amounts as level 3 inputs. The determination of the fair value of AROs is based upon regional market and facility specific information. The amount of an ARO and the costs capitalized represent the estimated future cost to satisfy the abandonment obligation using current prices that are escalated by an assumed inflation factor after discounting the future cost back to the date that the abandonment obligation was incurred using a rate commensurate with the risk, which approximates our cost of funds. Because these significant fair value inputs are typically not observable, we have categorized the initial estimates as level 3 inputs. |
Commitments and Contingencies |
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Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Drilling and Completion Commitments In March 2016, we terminated our one remaining drilling rig contract and incurred $0.4 million in early termination charges. In September 2015, we renegotiated an existing commitment to purchase certain coiled tubing services at a lower rate and extended the term to June 30, 2016. The minimum commitment remaining under this agreement was $0.6 million as of March 31, 2016. The coiled tubing services agreement includes an early termination provision that would require us to pay penalties equal to the remaining minimum commitment if we terminate the agreement prior to the end of its scheduled term. Firm Transportation Commitments We have entered into a contract for firm transportation capacity rights for specified daily volumes on a pipeline system with a remaining term of 13 years. The contract requires us to pay transportation demand charges regardless of the amount of pipeline capacity we use. The minimum commitment under this agreement is $0.8 million for the remaining three quarters of 2016 and approximately $1.1 million per year through 2028. We may sell excess capacity to third parties at our discretion. Gathering and Intermediate Transportation Commitments We have a long-term agreement for natural gas gathering, compression and gas lift services for a substantial portion of our natural gas production in the South Texas region through 2039. The agreement requires us to make certain minimum payments regardless of the volume of natural gas production until December 2016. The minimum fee requirement under this agreement is $3.8 million for the remaining three quarters of 2016. We also have long-term agreements for gathering and intermediate pipeline transportation services for a substantial portion of our crude oil and condensate production in the South Texas region through 2041. These agreements require us to commit certain minimum volumes of crude oil production for the first ten years of the agreements’ terms, resulting in minimum fee requirements of approximately $12.3 million on an annual basis. Drilling Carry In connection with our August 2014 acquisition of undeveloped acreage in the Eagle Ford in Lavaca County, Texas, we committed to providing a drilling carry in the amount of $10.7 million to support development of this acreage through July 2017. If we have not incurred the full balance of the drilling carry by certain dates in 2016 and 2017, we will be required to make a cash payment to the seller to satisfy any shortfall. We anticipate that we will incur a $1.9 million obligation pursuant to this commitment in June 2016. Legal and Regulatory We are involved, from time to time, in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, our management believes that these claims will not have a material effect on our financial position, results of operations or cash flows. During 2010, we established a $0.9 million reserve for a litigation matter that remained outstanding as of March 31, 2016. As of March 31, 2016, we also had AROs of approximately $2.7 million attributable to the plugging of abandoned wells. |
Shareholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Equity The following tables summarize the components of our shareholders’ equity (deficit) and the changes therein as of and for the three months ended March 31, 2016 and 2015:
_______________________ 1 Includes equity-classified share-based compensation of $(602) and $990 for the three months ended March 31, 2016 and 2015, respectively. 2 A total of 52 shares, or 5,159 depositary shares, of our Series A 6% Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”) were converted into 85,982 shares of our common stock during the three months ended March 31, 2016. A total of 9,188 shares, or 918,800 depositary shares, of our Series B 6% Convertible Perpetual Preferred Stock (the “Series B Preferred Stock”) were converted into 5,009,017 shares of our common stock during the three months ended March 31, 2016. No Series A Preferred Stock or Series B Preferred Stock was converted during the three months ended March 31, 2015. 3 Accumulated other comprehensive income (“AOCI”) is entirely attributable to our defined benefit pension and postretirement health care plans. The changes in the balance of AOCI for the three months ended March 31, 2016 and 2015 represent reclassifications from AOCI to net periodic benefit expense, a component of General and administrative expenses, of $(27) and $(17) and are presented above net of taxes of $0 and $(6), respectively. 4 Includes dividends declared of $150.00 per share on the Series A Preferred Stock for the three months ended March 31, 2015, and $150.00 per share on the Series B Preferred Stock for the three months ended March 31, 2015. In September 2015, we announced a suspension of quarterly dividends on the Series A Preferred Stock and Series B Preferred Stock for the quarter ended September 30, 2015. The suspension was extended through March 31, 2016. Pursuant to the Eleventh Amendment, we are precluded from making dividend payments on our Series A and Series B Preferred Stock. Our articles of incorporation provide that any unpaid dividends will accumulate. While the accumulation does not result in presentation of a liability on the balance sheet, the accumulated dividends are deducted from our net income (or added to our net loss) in the determination of income (loss) attributable to common shareholders and the corresponding computation of earnings (loss) per share. As of March 31, 2016, we had accumulated a total of $13.8 million in unpaid preferred stock dividends, including $2.2 million attributable to the Series A Preferred Stock and $11.6 million attributable to the Series B Preferred Stock. If we do not pay dividends on our Series A Preferred Stock and Series B Preferred Stock for six quarterly periods, whether consecutive or non-consecutive, the holders of the shares of both series of preferred stock, voting together as a single class, will have the right to elect two additional directors to serve on our board of directors until all accumulated and unpaid dividends are paid in full. |
Share-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation and Other Benefit Plans The Penn Virginia Corporation 2013 Amended and Restated Long-Term Incentive Plan (the “LTI Plan”) permits the grant of incentive and nonqualified stock options, common stock, deferred common stock units, restricted stock and restricted stock units to our employees and directors. We recognize compensation expense related to the LTI Plan in the General and administrative caption on our Condensed Consolidated Statements of Operations. With the exception of performance-based restricted stock units (“PBRSUs”), all of the awards issued under the LTI Plan are classified as equity instruments because they result in the issuance of common stock on the date of grant, upon exercise or are otherwise payable in common stock upon vesting, as applicable. The compensation cost attributable to these awards is measured at the grant date and recognized over the applicable vesting period as a non-cash item of expense. Because the PBRSUs are payable in cash, they are considered liability-classified awards and are included in the Accounts payable and accrued liabilities (current portion) and Other liabilities (noncurrent portion) captions on our Condensed Consolidated Balance Sheets. Compensation cost associated with the PBRSUs is measured at the end of each reporting period and recognized based on the period of time that has elapsed during each of the individual performance periods. The following table summarizes our share-based compensation expense recognized for the periods presented:
As of March 31, 2016, we had $7.1 million of PBRSUs included in the Accounts payable and accrued liabilities caption on our Condensed Consolidated Balance Sheet. These awards are scheduled to settle in May 2016. As of March 31, 2016, an amount less than $0.1 million representing the fair value of unvested PBRSUs is included in the Other liabilities caption. We maintain the Penn Virginia Corporation and Affiliated Companies Employees 401(k) Plan (the “401(k) Plan”), a defined contribution plan, which covers substantially all of our employees. We recognized $0.2 million and $0.4 million of expense attributable the 401(k) Plan for the three months ended March 31, 2016 and 2015. We maintain unqualified legacy defined benefit pension and defined benefit postretirement plans which cover a limited population of former employees that retired prior to 2000. The combined expense recognized with respect to these plans was less than $0.1 million for each of the three months ended March 31, 2016 and 2015. |
Interest Expense |
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Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Expense | Interest Expense The following table summarizes the components of interest expense for the periods presented:
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Earnings per Share |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | Earnings per Share The following table provides a reconciliation of the components used in the calculation of basic and diluted earnings per share for the periods presented:
_______________________ 1 Preferred stock dividends were excluded from the computation of diluted earnings per share for the three months ended March 31, 2016 and 2015, as the assumed conversion of the outstanding preferred stock would have been anti-dilutive. 2 For the three months ended March 31, 2016 and 2015, approximately 27.6 million and 31.3 million, respectively, of potentially dilutive securities, including the Series A Preferred Stock and Series B Preferred Stock, stock options and restricted stock units, had the effect of being anti-dilutive and were excluded from the calculation of diluted earnings per common share. |
Basis of Presentation (Policies) |
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Mar. 31, 2016 | |||||||||||||
Schedule of Policies [Line Items] | |||||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016–09, Improvements to Employee Share-based Payment Accounting (“ASU 2016–09”), which simplifies the accounting for share-based compensation. The areas for simplification that are applicable to publicly held companies are as follows: (1) Accounting for Income Taxes, (2) Classification of Excess Tax Benefits on the Statement of Cash Flows, (3) Forfeitures, (4) Minimum Statutory Tax Withholding Requirements and (5) Classification of Employee Taxes Paid on the Statement of Cash Flows when an employer withholds shares for tax-withholding purposes. The effective date of ASU 2016–09 is January 1, 2017, with early adoption permitted. We are evaluating the effect that ASU 2016–09 will have on our Consolidated Financial Statements and related disclosures. In February 2016, the FASB issued ASU 2016–02, Leases (“ASU 2016–02”), which will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with terms of more than twelve months. Consistent with current U.S. GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. ASU 2016–02 also will require disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases. The effective date of ASU 2016–02 is January 1, 2019, with early adoption permitted. We are evaluating the effect that ASU 2016–02 will have on our Consolidated Financial Statements and related disclosures. In May 2014, the FASB issued ASU 2014–09, Revenues from Contracts with Customers (“ASU 2014–09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014–09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective on January 1, 2018. The standard permits the use of either the retrospective or cumulative effect transition method upon adoption. We are evaluating the effect that ASU 2014–09 will have on our Consolidated Financial Statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of ASU 2014–09 on our ongoing financial reporting. |
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Basis of Presentation | Basis of Presentation Our unaudited Condensed Consolidated Financial Statements include the accounts of Penn Virginia and all of our subsidiaries. Intercompany balances and transactions have been eliminated. Our Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Preparation of these statements involves the use of estimates and judgments where appropriate. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of our Condensed Consolidated Financial Statements have been included. Our Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes included in our Annual Report on Form 10-K for the year ended December 31, 2015. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. Certain amounts for the corresponding 2015 periods have been reclassified to conform to the current year presentation. These reclassifications have no impact on our previously reported results of operations, balance sheets or cash flows. Going Concern Presumption Our unaudited Condensed Consolidated Financial Statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and other commitments in the normal course of business. Our primary sources of liquidity have historically included cash from operating activities, borrowings under our revolving credit agreement (the “Revolver”), proceeds from sales of assets and, from time to time, proceeds from capital market transactions, including the offering of debt and equity securities. Our cash flows from operating activities are subject to significant volatility due to changes in commodity prices for our crude oil, NGL and natural gas products, as well as variations in our production. Due primarily to the substantial decline in commodity prices over the last twelve months, our liquidity has been significantly negatively impacted. We have incurred net losses in each of the three years ended December 31, 2015, and reported a net loss attributable to common shareholders of $33.5 million for the three months ended March 31, 2016. Further, based on our current operating forecast and capital structure, we do not believe we will be able to comply with all of the financial covenants under the Revolver during the next twelve months. We are also dependent on restructuring our debt or obtaining additional debt and/or equity financing to continue our planned principal business operations. These factors raise substantial doubt about our ability to continue as a “going concern.” As of March 31, 2016 and through the date upon which the Consolidated Financial Statements were issued, we were not in compliance with certain covenants under the Revolver (see Note 7). In addition, we were required to deliver audited, consolidated financial statements without a “going concern” or like qualification or exception. The audit report prepared by our registered independent public accountants with respect to the financial statements in the Annual Report on Form 10-K for the year ended December 31, 2015 included an explanatory paragraph expressing substantial doubt as to our ability to continue as a “going concern.” As a result of these factors, we are in default under the Revolver. Pursuant to an amendment to the Revolver (see Note 7), we received an agreement from our lenders that these defaults will not become events of default until May 10, 2016, if certain conditions have been satisfied. Based on the foregoing and our current circumstances and general financial condition, it is highly likely that we will seek protection under Chapter 11 of the United States Bankruptcy Code (“Chapter 11”) in an effort to accomplish a court-supervised comprehensive restructuring of our balance sheet. Management’s Plans As of March 31, 2016, the total outstanding principal amount of our debt obligations was approximately $1.2 billion. We are continuing to actively explore and evaluate various strategic alternatives to reduce the level of our debt obligations and lower our future cash interest obligations. In January 2016, we retained Kirkland & Ellis LLP (“K&E”), Jefferies LLC (“Jefferies”) and Alvarez & Marsal North America, LLC (“A&M”), as well as other consultants and legal and tax advisers, to provide strategic advice generally and to act as our advisers in that regard. The timing and outcome of these efforts is highly uncertain. One or more of these alternatives could potentially be consummated without the consent of any one or more of our current security holders and, if consummated, could be dilutive to the holders of our outstanding equity securities and adversely affect the trading prices and values of our current debt and equity securities or, if we were to seek protection under Chapter 11, could cause the shares of our common stock to be canceled, with limited recovery, if any. We are actively working to address these matters; however, there can be no assurance that our efforts will be successful or completed on commercially acceptable terms. Our Condensed Consolidated Financial Statements do not include any adjustments that may result from a potential Chapter 11 filing or from uncertainty surrounding our ability to continue as a going concern. We incurred a total of $11.1 million in professional fees during the three months ended March 31, 2016 in connection with our ongoing negotiations with our creditors to refinance the Company. The total includes $7.8 million for our advisers and $3.3 million incurred by our banks and unsecured noteholders for which we are responsible. These costs are included as a component of our general and administrative expenses. In an ongoing effort to reduce our administrative cost burden, we reduced our total employee headcount by 10 employees in February 2016. We incurred costs for severance and termination benefits in the amount of $0.8 million in connection with the release of these employees. These costs are included as a component of our general and administrative expenses. We paid a total of $0.4 million of these charges in cash during the three months ended March 31, 2016 leaving $0.4 million outstanding as of March 31, 2016. This amount is included in the Accounts payable and accrued liabilities caption on our Condensed Consolidated Balance Sheet. New Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016–09, Improvements to Employee Share-based Payment Accounting (“ASU 2016–09”), which simplifies the accounting for share-based compensation. The areas for simplification that are applicable to publicly held companies are as follows: (1) Accounting for Income Taxes, (2) Classification of Excess Tax Benefits on the Statement of Cash Flows, (3) Forfeitures, (4) Minimum Statutory Tax Withholding Requirements and (5) Classification of Employee Taxes Paid on the Statement of Cash Flows when an employer withholds shares for tax-withholding purposes. The effective date of ASU 2016–09 is January 1, 2017, with early adoption permitted. We are evaluating the effect that ASU 2016–09 will have on our Consolidated Financial Statements and related disclosures. In February 2016, the FASB issued ASU 2016–02, Leases (“ASU 2016–02”), which will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with terms of more than twelve months. Consistent with current U.S. GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. ASU 2016–02 also will require disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases. The effective date of ASU 2016–02 is January 1, 2019, with early adoption permitted. We are evaluating the effect that ASU 2016–02 will have on our Consolidated Financial Statements and related disclosures. In May 2014, the FASB issued ASU 2014–09, Revenues from Contracts with Customers (“ASU 2014–09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014–09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective on January 1, 2018. The standard permits the use of either the retrospective or cumulative effect transition method upon adoption. We are evaluating the effect that ASU 2014–09 will have on our Consolidated Financial Statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of ASU 2014–09 on our ongoing financial reporting. Subsequent Events Management has evaluated all activities of the Company through the date upon which our Condensed Consolidated Financial Statements were issued and has concluded that, except for the termination of certain derivative instruments in order to pay down a portion of the Revolver (see Notes 5 and 7) and our election not to pay interest due on our senior notes (see Note 7), no subsequent events have occurred that would require recognition in our Condensed Consolidated Financial Statements or disclosure in the Notes to Condensed Consolidated Financial Statements. |
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Fair Value Measurements | We apply the authoritative accounting provisions for measuring fair value of both our financial and nonfinancial assets and liabilities. Fair value is an exit price representing the expected amount we would receive upon the sale of an asset or that we would expect to pay to transfer a liability in an orderly transaction with market participants at the measurement date. |
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Fair Value, Measurements, Recurring | |||||||||||||
Schedule of Policies [Line Items] | |||||||||||||
Fair Value Measurements | We used the following methods and assumptions to estimate fair values for the financial assets and liabilities described below:
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Fair Value, Measurements, Nonrecurring | |||||||||||||
Schedule of Policies [Line Items] | |||||||||||||
Fair Value Measurements | Non-Recurring Fair Value Measurements The most significant non-recurring fair value measurements utilized in the preparation of our Condensed Consolidated Financial Statements are those attributable to the recognition and measurement of net assets acquired, the recognition and measurement of asset impairments and the initial determination of AROs. The factors used to determine fair value for purposes of recognizing and measuring net assets acquired and asset impairments include, but are not limited to, estimates of proved and probable reserves, future commodity prices, indicative sales prices for properties, the timing of future production and capital expenditures and a discount rate commensurate with the risk reflective of the lives remaining for the respective oil and gas properties. Because these significant fair value inputs are typically not observable, we have categorized the amounts as level 3 inputs. The determination of the fair value of AROs is based upon regional market and facility specific information. The amount of an ARO and the costs capitalized represent the estimated future cost to satisfy the abandonment obligation using current prices that are escalated by an assumed inflation factor after discounting the future cost back to the date that the abandonment obligation was incurred using a rate commensurate with the risk, which approximates our cost of funds. Because these significant fair value inputs are typically not observable, we have categorized the initial estimates as level 3 inputs. |
Accounts Receivable and Major Customers (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Accounts Receivable | The following table summarizes our accounts receivable by type as of the dates presented:
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Derivative Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commodity Derivative Positions | The following table sets forth our commodity derivative positions as of March 31, 2016:
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Impact of Derivative Activities on Condensed Consolidated Statements of Income | The impact of our derivative activities on income is included in the Derivatives caption on our Condensed Consolidated Statements of Operations. The following table summarizes the effects of our derivative activities for the periods presented:
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Fair Value of Derivative Instruments on Condensed Consolidated Balance Sheets | The following table summarizes the fair values of our derivative instruments, as well as the locations of these instruments on our Condensed Consolidated Balance Sheets as of the dates presented:
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Property and Equipment (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Property and Equipment | The following table summarizes our property and equipment as of the dates presented:
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Long-Term Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Amount of Components of Long-term Debt | The following table summarizes our debt obligations as of the dates presented:
_______________________ 1 Issuance costs attributable to the Revolver, which represent costs attributable to the access to credit over the Revolver’s contractual term, are presented as a component of Other assets (see Note 10). |
Firm Transportation Obligation (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restructuring Related Obligations | The following table reconciles the obligation as of the dates presented:
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Additional Balance Sheet Detail (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Selected Balance Sheet Accounts | The following table summarizes components of selected balance sheet accounts as of the dates presented:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Summary of Long-Term Debt with Fixed Interest Rates | The following table summarizes the fair value of our debt obligations with fixed interest rates, which is estimated based on the published market prices for these financial liabilities, as of the dates presented:
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Assets and Liabilities Measured at Fair Value on Recurring Basis |
The following tables summarize the valuation of those assets and liabilities as of the dates presented:
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Shareholders' Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders Equity [Table Text Block] | The following tables summarize the components of our shareholders’ equity (deficit) and the changes therein as of and for the three months ended March 31, 2016 and 2015:
_______________________ 1 Includes equity-classified share-based compensation of $(602) and $990 for the three months ended March 31, 2016 and 2015, respectively. 2 A total of 52 shares, or 5,159 depositary shares, of our Series A 6% Convertible Perpetual Preferred Stock (the “Series A Preferred Stock”) were converted into 85,982 shares of our common stock during the three months ended March 31, 2016. A total of 9,188 shares, or 918,800 depositary shares, of our Series B 6% Convertible Perpetual Preferred Stock (the “Series B Preferred Stock”) were converted into 5,009,017 shares of our common stock during the three months ended March 31, 2016. No Series A Preferred Stock or Series B Preferred Stock was converted during the three months ended March 31, 2015. 3 Accumulated other comprehensive income (“AOCI”) is entirely attributable to our defined benefit pension and postretirement health care plans. The changes in the balance of AOCI for the three months ended March 31, 2016 and 2015 represent reclassifications from AOCI to net periodic benefit expense, a component of General and administrative expenses, of $(27) and $(17) and are presented above net of taxes of $0 and $(6), respectively. 4 Includes dividends declared of $150.00 per share on the Series A Preferred Stock for the three months ended March 31, 2015, and $150.00 per share on the Series B Preferred Stock for the three months ended March 31, 2015. |
Share-Based Compensation (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Share-Based Compensation Expense | The following table summarizes our share-based compensation expense recognized for the periods presented:
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Interest Expense (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Expense Net Disclosure | The following table summarizes the components of interest expense for the periods presented:
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Earnings per Share (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Calculation of Basic and Diluted Earnings Per Share | The following table provides a reconciliation of the components used in the calculation of basic and diluted earnings per share for the periods presented:
_______________________ 1 Preferred stock dividends were excluded from the computation of diluted earnings per share for the three months ended March 31, 2016 and 2015, as the assumed conversion of the outstanding preferred stock would have been anti-dilutive. 2 For the three months ended March 31, 2016 and 2015, approximately 27.6 million and 31.3 million, respectively, of potentially dilutive securities, including the Series A Preferred Stock and Series B Preferred Stock, stock options and restricted stock units, had the effect of being anti-dilutive and were excluded from the calculation of diluted earnings per common share. |
Basis of Presentation (Details) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016
USD ($)
|
Mar. 31, 2015
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Accounting Policies [Abstract] | |||
Net loss attributable to common shareholders | $ (36,625,000) | $ (63,232,000) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net Income (Loss) Attributable to Noncontrolling Interest | 33,500,000 | ||
Long-term Debt | $ 1,222,065,000 | $ 1,245,000,000 | |
Restructuring and Related Cost, Number of Positions Eliminated | 10 | ||
Severance and Termination Benefits | $ 0.8 | ||
General and Administrative Expense [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Restructuring and Related Cost, Professional Fees | 11,100,000 | ||
Restructuring and Related Cost, Advisory Fees | 7,800,000 | ||
Restructuring and Related Cost, Bank and Unsecured Noteholders | 3,300,000 | ||
Severance and Termination Benefits | 400,000 | ||
Accounts Payable and Accrued Liabilities | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Severance and Termination Benefits | $ 400,000 |
Acquisitions and Divestitures - Additional Information (Detail) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jul. 31, 2014 |
Mar. 31, 2016 |
Sep. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2014 |
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Eagle Ford Shale, Lavaca County | |||||
Divestitures [Line Items] | |||||
Payments to Acquire Businesses, Gross | $ 45.6 | ||||
Payments to Acquire Oil and Gas Property | $ 34.9 | ||||
Business Combination, Consideration Transferred, Liabilities Incurred | $ 10.7 | ||||
Contractual Obligation | $ 1.9 | ||||
South Texas Oil Gathering Sys. Development Rights | |||||
Divestitures [Line Items] | |||||
Sale Leaseback Transaction, Deferred Gain, Gross | $ 75.7 | ||||
Period over which deferred gain is being recognized | 25 years | ||||
Balance of deferred gain recognized in period | 0.1 | ||||
Deferred gain on sale of assets, current component | 3.0 | ||||
Deferred gain on sale of assets, noncurrent component | 72.6 | ||||
South Texas Natural Gas Gathering Assets | |||||
Divestitures [Line Items] | |||||
Gain on Sale of Oil and Gas Property | $ 10.6 | ||||
Period over which deferred gain is being recognized | 25 years | ||||
Balance of deferred gain recognized in period | 0.1 | ||||
Deferred gain on sale of assets, current component | 0.4 | ||||
Deferred gain on sale of assets, noncurrent component | $ 9.3 |
Summary of Accounts Receivable (Detail) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Receivables [Abstract] | ||
Customers | $ 20,167 | $ 23,481 |
Joint interest partners | 18,907 | 18,381 |
Other | 6,381 | 7,658 |
Accounts Receivable, Gross, Current, Total | 45,455 | 49,520 |
Less: Allowance for doubtful accounts | (1,618) | (1,555) |
Accounts receivable, net of allowance for doubtful accounts | $ 43,837 | $ 47,965 |
Accounts Receivable and Major Customers - Additional Information (Detail) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016
USD ($)
|
Mar. 31, 2015
USD ($)
Customer
|
Dec. 31, 2015
USD ($)
|
|
Sales Revenue | Customer Concentration Risk | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of major customers | Customer | 3 | ||
Revenues, major customers | $ 26.5 | $ 47.9 | |
Concentration risk, percentage | 88.00% | 66.00% | |
Sales Revenue | Customer Concentration Risk | Major Customer 1 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Revenues, major customers | $ 13.9 | $ 28.0 | |
Concentration risk, percentage | 46.00% | 38.00% | |
Sales Revenue | Customer Concentration Risk | Major Customer 2 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Revenues, major customers | $ 12.6 | $ 12.0 | |
Concentration risk, percentage | 42.00% | 17.00% | |
Sales Revenue | Customer Concentration Risk | Major Customer 3 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Revenues, major customers | $ 7.9 | ||
Concentration risk, percentage | 11.00% | ||
Accounts Receivable | Credit Concentration Risk | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Concentration risk, percentage | 29.00% | 90.00% | |
Accounts receivable, major customers | $ 5.9 | $ 21.1 |
Derivative Instruments - Additional Information (Detail) $ in Thousands |
1 Months Ended | 3 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2016
USD ($)
|
Mar. 31, 2016
USD ($)
Entity
|
Mar. 31, 2015
USD ($)
|
Apr. 12, 2016 |
|
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||||
Number of derivative counterparties | 2 | |||
Derivatives Settled to Pay Down Revolver | $ 22,860 | $ 0 | ||
Commodity contracts | ||||
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||||
Derivative assets | $ 49,000 | |||
Number of derivative counterparties | Entity | 3 | |||
Commodity contracts | Natural Gas | ||||
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||||
Third-party quoted forward prices | NYMEX Henry Hub gas | |||
Commodity contracts | Crude Oil | ||||
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||||
Third-party quoted forward prices | West Texas Intermediate crude oil | |||
Subsequent Event [Member] | ||||
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||||
Number of derivative counterparties | 2 | |||
Derivatives Settled, Subsequent Event | $ 22,600 | |||
Derivatives Settled to Pay Down Revolver, Subsequent Event | $ 16,600 |
Commodity Derivative Positions (Detail) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
bbl
$ / bbl
| |
Settlements to be received in subsequent period | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Fair Value Asset | $ 5,393 |
Fair Value Liability | $ 0 |
Crude Oil | Second quarter 2016 | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Instrument | Swaps |
Notional Volume, per day | bbl | 4,000 |
Derivative, Swap Type, Average Fixed Price | $ / bbl | 81.45 |
Fair Value Asset | $ 15,107 |
Fair Value Liability | $ 0 |
Crude Oil | Third quarter 2016 | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Instrument | Swaps |
Notional Volume, per day | bbl | 4,000 |
Derivative, Swap Type, Average Fixed Price | $ / bbl | 81.45 |
Fair Value Asset | $ 14,478 |
Fair Value Liability | $ 0 |
Crude Oil | Fourth quarter 2016 | |
Derivative Instruments Related to Oil and Gas Production [Line Items] | |
Instrument | Swaps |
Notional Volume, per day | bbl | 4,000 |
Derivative, Swap Type, Average Fixed Price | $ / bbl | 81.45 |
Fair Value Asset | $ 14,052 |
Fair Value Liability | $ 0 |
Impact of Derivative Activities on Condensed Consolidated Statements of Income (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivatives | $ 4,492 | $ 22,867 |
Commodity contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, Cash Received on Hedge | 30,559 | 37,492 |
Unrealized gains (losses) | $ (26,067) | $ (14,625) |
Fair Value of Derivative Instruments on Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Derivative assets, current | $ 49,030 | $ 97,956 |
Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 49,000 | |
Commodity contracts | Derivative assets/liabilities - current | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, current | 49,030 | 97,956 |
Derivative liabilities, current | $ 0 | $ 0 |
Summary of Property and Equipment (Detail) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Oil and gas properties: | ||
Proved | $ 2,682,932 | $ 2,678,415 |
Unproved | 6,037 | 6,881 |
Total oil and gas properties | 2,688,969 | 2,685,296 |
Other property and equipment | 31,563 | 31,365 |
Total properties and equipment | 2,720,532 | 2,716,661 |
Accumulated depreciation, depletion and amortization | (2,386,026) | (2,372,266) |
Property and equipment, net (successful efforts method) | $ 334,506 | $ 344,395 |
Summary of Long-Term Debt (Detail) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 170,000 | |
Long-term Debt | $ 1,222,065 | 1,245,000 |
Unamortized issuance costs | (19,573) | (20,617) |
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 1,202,492 | 1,224,383 |
Long-term Debt, Current Maturities | (1,202,492) | (1,224,383) |
7.25% Senior Notes due 2019 | ||
Debt Instrument [Line Items] | ||
Senior notes | 300,000 | 300,000 |
Unamortized issuance costs | (3,076) | (3,295) |
8.50% Senior Notes due 2020 | ||
Debt Instrument [Line Items] | ||
Senior notes | 775,000 | 775,000 |
Unamortized issuance costs | $ (16,497) | $ (17,322) |
Long-Term Debt - Additional Information (Detail) - USD ($) |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2016 |
Jan. 31, 2016 |
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
May. 01, 2016 |
Apr. 15, 2016 |
Apr. 12, 2016 |
Mar. 15, 2016 |
|
Debt Disclosure [Line Items] | |||||||||
Line of Credit Facility, Asset Restrictions | 1 | 0.8 | |||||||
Applicable Margin Rate Increase | 1.00% | ||||||||
Derivatives Settled to Pay Down Revolver | $ 22,860,000 | $ 0 | |||||||
Revolving Credit Facility | |||||||||
Debt Disclosure [Line Items] | |||||||||
Borrowing base and revolving commitment | $ 148,869,000 | $ 171,800,000 | |||||||
Debt Instrument, Description of Variable Rate Basis | one-month Adjusted LIBOR | ||||||||
Interest rate option two, base rate over one-month Adjusted LIBOR | 1.00% | ||||||||
Interest rate option two, applicable margin rate | 3.50% | ||||||||
Commitment Fee Percentage at Period End | 0.50% | ||||||||
Interest Rate at Period End | 4.125% | ||||||||
Interest Rate at Period End, LIBOR component | 0.625% | ||||||||
Revolving Credit Facility | Minimum | |||||||||
Debt Disclosure [Line Items] | |||||||||
Interest rate option one, applicable margin rate over Adjusted LIBOR | 2.50% | ||||||||
Interest rate option two, applicable margin rate | 1.50% | ||||||||
Commitment fees for undrawn credit facility | 0.375% | ||||||||
Covenant requirement - Current ratio | 1.0 | ||||||||
Revolving Credit Facility | Maximum | |||||||||
Debt Disclosure [Line Items] | |||||||||
Interest rate option one, applicable margin rate over Adjusted LIBOR | 3.50% | ||||||||
Interest rate option two, applicable margin rate | 2.50% | ||||||||
Commitment fees for undrawn credit facility | 0.50% | ||||||||
Revolving Credit Facility | Through March 31, 2016 | |||||||||
Debt Disclosure [Line Items] | |||||||||
Covenant requirement - Debt to EBITDAX ratio | 4.75 | ||||||||
Revolving Credit Facility | Through June 30, 2016 (TTM) | |||||||||
Debt Disclosure [Line Items] | |||||||||
Covenant requirement - Debt to EBITDAX ratio | 5.25 | ||||||||
Revolving Credit Facility | Through December 31, 2016 (TTM) | |||||||||
Debt Disclosure [Line Items] | |||||||||
Covenant requirement - Debt to EBITDAX ratio | 5.50 | ||||||||
Revolving Credit Facility | Through March 31, 2017 (TTM) | |||||||||
Debt Disclosure [Line Items] | |||||||||
Covenant requirement - Debt to EBITDAX ratio | 4.50 | ||||||||
Revolving Credit Facility | Through maturity in September 2017 (TTM) | |||||||||
Debt Disclosure [Line Items] | |||||||||
Covenant requirement - Debt to EBITDAX ratio | 4.0 | ||||||||
Debt to EBITDAX Ratio that precludes the payment of cash dividends on preferred stock | 5.0 | ||||||||
Line of Credit [Member] | Maximum | |||||||||
Debt Disclosure [Line Items] | |||||||||
Available borrowing capacity | $ 147,065,000 | ||||||||
Line of Credit [Member] | Through March 31, 2017 (TTM) | |||||||||
Debt Disclosure [Line Items] | |||||||||
Covenant requirement - Senior Secured Debt to EBITDAX ratio | 2.75 | ||||||||
7.25% Senior Notes due 2019 | |||||||||
Debt Disclosure [Line Items] | |||||||||
Senior Notes, Noncurrent | $ 300,000,000 | $ 300,000,000 | |||||||
Annual interest rate | 7.25% | ||||||||
7.25% Senior Notes due 2019 | Through March 31, 2016 | |||||||||
Debt Disclosure [Line Items] | |||||||||
Redemption option, percent of principal | 103.625% | ||||||||
7.25% Senior Notes due 2019 | Through December 31, 2016 (TTM) | |||||||||
Debt Disclosure [Line Items] | |||||||||
Redemption option, percent of principal | 100.00% | ||||||||
8.50% Senior Notes due 2020 | |||||||||
Debt Disclosure [Line Items] | |||||||||
Senior Notes, Noncurrent | $ 775,000,000 | $ 775,000,000 | |||||||
Annual interest rate | 8.50% | ||||||||
Subsequent Event [Member] | |||||||||
Debt Disclosure [Line Items] | |||||||||
Derivatives Settled to Pay Down Revolver, Subsequent Event | $ 16,600,000 | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity, Subsequent Event | $ 125,000,000 | ||||||||
Subsequent Event [Member] | Line of Credit [Member] | |||||||||
Debt Disclosure [Line Items] | |||||||||
Line of Credit Facility, Borrowing Capacity at Subsequent Period | 126,900,000 | ||||||||
Subsequent Event [Member] | Line of Credit [Member] | Letter of Credit | |||||||||
Debt Disclosure [Line Items] | |||||||||
Line of Credit Facility, Maximum Borrowing Capacity, Subsequent Event | $ 1,900,000 | ||||||||
Scenario, Forecast [Member] | 7.25% Senior Notes due 2019 | |||||||||
Debt Disclosure [Line Items] | |||||||||
Debt Instrument, Periodic Payment, Interest | $ 10,900,000 | ||||||||
Scenario, Forecast [Member] | 8.50% Senior Notes due 2020 | |||||||||
Debt Disclosure [Line Items] | |||||||||
Debt Instrument, Periodic Payment, Interest | $ 32,900,000 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Income Tax Disclosure [Abstract] | ||
Federal statutory income tax rate | 35.00% | |
Effective Income Tax Rate Reconciliation, Percent | 0.20% | |
Income taxes paid | $ 0.1 |
Firm Transportation Obligation - Additional Information (Detail) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Firm Transportation Obligation [Line Items] | ||
Balance of obligation, noncurrent | $ 10,361 | $ 10,705 |
Accounts Payable and Accrued Liabilities | ||
Firm Transportation Obligation [Line Items] | ||
Balance of obligation, current | 2,700 | |
Other Noncurrent Liabilities | ||
Firm Transportation Obligation [Line Items] | ||
Balance of obligation, noncurrent | $ 10,400 |
Summary of Firm Transportation Obligation (Detail) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Firm Transportation Obligation [Roll Forward] | |||
Balance at beginning of period | $ 13,461 | $ 14,790 | $ 14,790 |
Accretion | 175 | 212 | 942 |
Cash payments, net | (527) | $ (2,271) | |
Balance at end of period | $ 13,109 | $ 13,461 |
Components of Selected Balance Sheet Accounts (Detail) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Other current assets: | ||
Tubular inventory and well materials | $ 2,214 | $ 2,878 |
Prepaid expenses | 2,274 | 4,184 |
Other Assets, Miscellaneous, Current | 7 | 42 |
Other Assets, Current | 4,495 | 7,104 |
Other assets: | ||
Assets of supplemental employee retirement plan (“SERP”) | 4,154 | 4,123 |
Deferred issuance costs of the Revolver | 1,347 | 1,572 |
Other | 2,602 | 2,655 |
Other assets | 8,103 | 8,350 |
Accounts payable and accrued liabilities: | ||
Trade accounts payable | 17,847 | 11,603 |
Drilling costs | 3,086 | 12,074 |
Royalties and revenue – related | 31,063 | 39,119 |
Compensation – related | 9,925 | 9,904 |
Interest | 38,102 | 15,531 |
Other | 10,330 | 15,294 |
Accounts payable and accrued liabilities | 110,353 | 103,525 |
Other liabilities: | ||
Deferred gains on sale of assets | 81,831 | 82,943 |
Firm transportation obligation | 10,361 | 10,705 |
Asset retirement obligations (“AROs”) | 2,677 | 2,621 |
Defined benefit pension obligations | 1,100 | 1,129 |
Postretirement health care benefit obligations | 755 | 731 |
Compensation-related | 714 | 1,447 |
Deferred compensation – SERP obligations and other | 4,521 | 4,434 |
Other | 921 | 928 |
Other liabilities | $ 102,880 | $ 104,938 |
Fair Value Summary of Long-Term Debt with Fixed Interest Rates (Detail) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt with fixed interest rates | $ 197,288 | $ 166,303 |
Fair Value | 7.25% Senior Notes due 2019 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt with fixed interest rates | 58,020 | 40,830 |
Fair Value | 8.50% Senior Notes due 2020 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt with fixed interest rates | 139,268 | 125,473 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt with fixed interest rates | 1,075,000 | 1,075,000 |
Carrying Value | 7.25% Senior Notes due 2019 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt with fixed interest rates | 300,000 | 300,000 |
Carrying Value | 8.50% Senior Notes due 2020 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt with fixed interest rates | $ 775,000 | $ 775,000 |
Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Assets: | ||
Commodity derivative assets – current | $ 49,030 | $ 97,956 |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Assets of SERP | 4,154 | 4,123 |
Liabilities: | ||
Deferred compensation – SERP obligations | (4,155) | (4,125) |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Assets of SERP | 4,154 | 4,123 |
Liabilities: | ||
Deferred compensation – SERP obligations | (4,155) | (4,125) |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Assets of SERP | 0 | 0 |
Liabilities: | ||
Deferred compensation – SERP obligations | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Assets of SERP | 0 | 0 |
Liabilities: | ||
Deferred compensation – SERP obligations | 0 | 0 |
Fair Value, Measurements, Recurring | Commodity contracts | ||
Assets: | ||
Commodity derivative assets – current | 49,030 | 97,956 |
Fair Value, Measurements, Recurring | Commodity contracts | Level 1 | ||
Assets: | ||
Commodity derivative assets – current | 0 | 0 |
Fair Value, Measurements, Recurring | Commodity contracts | Level 2 | ||
Assets: | ||
Commodity derivative assets – current | 49,030 | 97,956 |
Fair Value, Measurements, Recurring | Commodity contracts | Level 3 | ||
Assets: | ||
Commodity derivative assets – current | $ 0 | $ 0 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) |
1 Months Ended | 3 Months Ended | 12 Months Ended |
---|---|---|---|
Aug. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2010 |
|
Commitments and Contingencies Disclosure [Line Items] | |||
Asset retirement obligations | $ 2,700,000 | ||
Legal Reserve | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Reserve established for contingency matters | $ 900,000 | ||
Contract Drilling | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Contractual Obligation, Early Termination Fee | 400,000 | ||
Contractual Obligation | $ 600,000 | ||
Firm Transportation | Maximum | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Contract term | 13 years | ||
Coil Tubing Services [Member] | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Contractual obligation, balance of 2015 | $ 800,000 | ||
Contractual obligation, annual | 1,100,000 | ||
Gas Gathering And Compression Services | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Contractual obligation, balance of 2015 | 3,800,000 | ||
Crude Oil Gathering And Transportation Services | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Contractual obligation, annual | 12,300,000 | ||
Drilling Carry | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Contractual Obligation | $ 10,700,000 | ||
Scenario, Forecast [Member] | Drilling Carry | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Contractual Obligation Payment | $ 1.9 |
Shareholders' Equity Rollforward (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|||||||||||
Schedule of Stockholders' Equity [Line Items] | ||||||||||||
Share-based compensation | $ (602) | [1] | $ 990 | |||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 85,982 | 5,009,017 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
As of beginning balance | $ (915,121) | $ 675,817 | ||||||||||
Net loss | (33,473) | (57,165) | ||||||||||
Dividends Declared | [2] | 0 | ||||||||||
Dividends Declared | (6,067) | |||||||||||
All Other Changes | [1] | (628) | 979 | |||||||||
As of ending balance | (949,222) | 613,564 | ||||||||||
Preferred stock dividends | [3] | (3,152) | (6,067) | |||||||||
Preferred stock | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
As of beginning balance | 3,146 | 4,044 | ||||||||||
All Other Changes | [1] | (1,044) | 0 | |||||||||
As of ending balance | 2,102 | 4,044 | ||||||||||
Common stock | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
As of beginning balance | 628 | 529 | ||||||||||
All Other Changes | [1] | 57 | 0 | |||||||||
As of ending balance | 685 | 529 | ||||||||||
Paid-in capital | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
As of beginning balance | 1,211,088 | 1,206,305 | ||||||||||
All Other Changes | [1] | 386 | 989 | |||||||||
As of ending balance | 1,211,474 | 1,207,294 | ||||||||||
Accumulated deficit | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
As of beginning balance | (2,130,271) | (535,176) | ||||||||||
Net loss | (33,473) | |||||||||||
All Other Changes | [1] | 0 | ||||||||||
As of ending balance | (2,163,744) | (598,408) | ||||||||||
Preferred stock dividends | [2] | 0 | (6,067) | |||||||||
Deferred compensation obligation | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
As of beginning balance | 3,440 | 3,211 | ||||||||||
All Other Changes | [1] | 0 | 56 | |||||||||
As of ending balance | 3,440 | 3,267 | ||||||||||
Accumulated other comprehensive income | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
As of beginning balance | [4] | 422 | 249 | |||||||||
All Other Changes | [4] | (27) | (11) | |||||||||
As of ending balance | [4] | 395 | 238 | |||||||||
Treasury stock | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
As of beginning balance | (3,574) | (3,345) | ||||||||||
All Other Changes | [1] | 0 | (55) | |||||||||
As of ending balance | $ (3,574) | $ (3,400) | ||||||||||
Series A Preferred Stock | ||||||||||||
Schedule of Stockholders' Equity [Line Items] | ||||||||||||
Preferred stock dividends (in dollars per share) | $ 150.00 | |||||||||||
Series B Preferred Stock | ||||||||||||
Schedule of Stockholders' Equity [Line Items] | ||||||||||||
Preferred stock dividends (in dollars per share) | $ 150.00 | |||||||||||
Convertible Preferred Stock | ||||||||||||
Schedule of Stockholders' Equity [Line Items] | ||||||||||||
Conversion of Stock, Shares Converted | 52 | 9,188 | ||||||||||
|
Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
||||
Class of Stock [Line Items] | ||||||
Stockholders' Equity, Other | [1] | $ 628 | $ (979) | |||
Share-based compensation (equity-classified) | $ (602) | [1] | $ 990 | |||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 85,982 | 5,009,017 | ||||
Other Comprehensive loss, pension and postretirements obligations, before tax | $ (27) | $ (17) | ||||
Change in pension and postretirement obligations, net of tax | 0 | $ (6) | ||||
Preferred Stock, Amount of Preferred Dividends in Arrears | $ 13,800 | |||||
Common stock, shares authorized | 228,000,000 | 228,000,000 | ||||
Series A Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock, Shares Issued | 3,864 | 3,915 | ||||
Preferred stock dividends (in dollars per share) | $ 150.00 | |||||
Preferred Stock, Amount of Preferred Dividends in Arrears | $ 2,200 | |||||
Series B Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock, Shares Issued | 17,152 | 27,551 | ||||
Preferred stock dividends (in dollars per share) | $ 150.00 | |||||
Preferred Stock, Amount of Preferred Dividends in Arrears | $ 11,600 | |||||
Convertible Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Conversion of Stock, Shares Converted | 52 | 9,188 | ||||
Depositary Shares | ||||||
Class of Stock [Line Items] | ||||||
Conversion of Stock, Shares Converted | 5,159 | 918,800 | ||||
|
Summary of Share-Based Compensation Expense (Detail) - USD ($) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Stock option awards | $ (303) | $ 393 | |||
Common, deferred, restricted and restricted unit awards | (299) | 597 | |||
Share-based compensation | (602) | [1] | 990 | ||
Allocated Share-based Compensation Expense | (609) | 1,369 | |||
Defined Contribution Plan, Cost Recognized | 200 | 400 | |||
Equity-classified awards: | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Share-based compensation | (602) | 990 | |||
Liability-classified awards | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Share-based compensation | (7) | 379 | |||
Accounts Payable and Accrued Liabilities | Performance Shares [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Deferred Compensation Share-based Arrangements, Liability, Current | 7,100 | ||||
Other Liabilities [Member] | Performance Shares [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Deferred Compensation Share-based Arrangements, Liability, Current | 100 | ||||
Other Pension Plan, Postretirement or Supplemental Plans [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Pension and Other Postretirement Benefit Expense | $ 100 | $ 100 | |||
|
Components of Interest Expense (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Banking and Thrift [Abstract] | ||
Interest on borrowings and related fees | $ 23,305 | $ 22,808 |
Amortization of debt issuance costs | 1,269 | 1,104 |
Capitalized interest | (140) | (1,899) |
Interest expense | $ 24,434 | $ 22,013 |
Components of Calculation of Basic and Diluted Earnings Per Share (Detail) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
||||||
Earnings Per Share [Abstract] | |||||||
Net loss | $ (33,473) | $ (57,165) | |||||
Less: Preferred stock dividends | [1] | (3,152) | (6,067) | ||||
Net income (loss) attributable to common shareholders, Basic | (36,625) | (63,232) | |||||
Net loss attributable to common shareholders, Diluted | $ (36,625) | $ (63,232) | |||||
Weighted-average shares – basic | 85,941 | 71,820 | |||||
Effect of dilutive securities | [2] | 0 | 0 | ||||
Weighted-average shares – diluted | 85,941 | 71,820 | |||||
Potentially dilutive securities with the effect of being anti-dilutive excluded from the calculation of diluted earnings per common share | 27,600 | 31,300 | |||||
|
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