x | 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 |
DELAWARE | 72-1440714 | |
(State of Incorporation) | (I.R.S. Employer Identification No.) |
400 E. Kaliste Saloom Rd., Suite 6000 Lafayette, Louisiana | 70508 | |
(Address of principal executive offices) | (Zip code) |
Large accelerated filer | ¨ | Accelerated filer | ¨ |
Non-accelerated filer | ¨ | Smaller reporting company | x |
Emerging growth company | ¨ |
Page No. | |
Part I. Financial Information | |
Item 1. Financial Statements | |
September 30, 2018 | December 31, 2017 | ||||||
(unaudited) | (Note 1) | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 25,500 | $ | 15,655 | |||
Revenue receivable | 6,814 | 15,340 | |||||
Joint interest billing receivable | 2,520 | 6,597 | |||||
Other receivable | 2,447 | 7,750 | |||||
Derivative asset | — | 1,174 | |||||
Deposit for surety bonds | 12,438 | 8,300 | |||||
Other current assets | 2,249 | 2,125 | |||||
Total current assets | 51,968 | 56,941 | |||||
Property and equipment: | |||||||
Oil and gas properties: | |||||||
Oil and gas properties, full cost method | 1,354,593 | 1,369,861 | |||||
Unevaluated oil and gas properties | 18,947 | 21,854 | |||||
Accumulated depreciation, depletion and amortization | (1,296,992 | ) | (1,285,660 | ) | |||
Oil and gas properties, net | 76,548 | 106,055 | |||||
Other property and equipment | 9,280 | 9,353 | |||||
Accumulated depreciation of other property and equipment | (9,003 | ) | (8,843 | ) | |||
Total property and equipment | 76,825 | 106,565 | |||||
Other assets | 1,645 | 792 | |||||
Total assets | $ | 130,438 | $ | 164,298 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable to vendors | $ | 2,959 | $ | 32,148 | |||
Advances from co-owners | 463 | 1,730 | |||||
Oil and gas revenue payable | 8,576 | 19,344 | |||||
Accrued interest | 18,196 | 1,724 | |||||
Asset retirement obligation | 459 | 687 | |||||
Derivative liability | — | 731 | |||||
Other accrued liabilities | 7,310 | 6,476 | |||||
Total current liabilities | 37,963 | 62,840 | |||||
Multi-draw Term Loan | 49,716 | 27,963 | |||||
10% Senior Secured Notes due 2021 | 9,707 | 9,821 | |||||
10% Senior Secured PIK Notes due 2021 | 274,621 | 271,577 | |||||
Asset retirement obligation | 2,337 | 30,623 | |||||
Preferred stock dividend payable | 14,133 | 10,278 | |||||
Other long-term liabilities | 526 | 131 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $.001 par value; authorized 5,000 shares; issued and outstanding 1,495 shares | 1 | 1 | |||||
Common stock, $.001 par value; authorized 150,000 shares; issued and outstanding 25,587 and 25,521 shares, respectively | 26 | 26 | |||||
Paid-in capital | 314,154 | 313,244 | |||||
Accumulated other comprehensive income (loss) | (401 | ) | 278 | ||||
Accumulated deficit | (572,345 | ) | (562,484 | ) | |||
Total stockholders’ equity | (258,565 | ) | (248,935 | ) | |||
Total liabilities and stockholders’ equity | $ | 130,438 | $ | 164,298 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues: | |||||||||||||||
Oil and gas sales | $ | 20,886 | $ | 28,184 | $ | 67,310 | $ | 73,207 | |||||||
Expenses: | |||||||||||||||
Lease operating expenses | 4,368 | 8,863 | 16,380 | 23,052 | |||||||||||
Production taxes | 890 | 1,112 | 2,451 | 1,990 | |||||||||||
Depreciation, depletion and amortization | 5,486 | 8,795 | 18,014 | 21,753 | |||||||||||
General and administrative | 4,780 | 3,341 | 12,084 | 10,808 | |||||||||||
Accretion of asset retirement obligation | 42 | 571 | 282 | 1,671 | |||||||||||
Interest expense | 9,371 | 7,371 | 24,488 | 21,776 | |||||||||||
24,937 | 30,053 | 73,699 | 81,050 | ||||||||||||
Other income: | |||||||||||||||
Other income (expense) | 394 | (16 | ) | 585 | 36 | ||||||||||
Loss from operations | (3,657 | ) | (1,885 | ) | (5,804 | ) | (7,807 | ) | |||||||
Income tax expense (benefit) | 38 | (84 | ) | 144 | (274 | ) | |||||||||
Net loss | (3,695 | ) | (1,801 | ) | (5,948 | ) | (7,533 | ) | |||||||
Preferred stock dividend | 1,284 | 1,284 | 3,854 | 3,854 | |||||||||||
Loss available to common stockholders | $ | (4,979 | ) | $ | (3,085 | ) | $ | (9,802 | ) | $ | (11,387 | ) | |||
Loss per common share: | |||||||||||||||
Basic | |||||||||||||||
Net loss per share | $ | (0.19 | ) | $ | (0.15 | ) | $ | (0.38 | ) | $ | (0.54 | ) | |||
Diluted | |||||||||||||||
Net loss per share | $ | (0.19 | ) | $ | (0.15 | ) | $ | (0.38 | ) | $ | (0.54 | ) | |||
Weighted average number of common shares: | |||||||||||||||
Basic | 25,587 | 21,230 | 25,565 | 21,222 | |||||||||||
Diluted | 25,587 | 21,230 | 25,565 | 21,222 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net loss | $ | (3,695 | ) | $ | (1,801 | ) | $ | (5,948 | ) | $ | (7,533 | ) | |||
Change in fair value of derivative instruments, accounted for as hedges, net of income tax expense (benefit) of $0, ($10), ($106) and $179, respectively | 401 | (17 | ) | (679 | ) | 5,053 | |||||||||
Comprehensive loss | $ | (3,294 | ) | $ | (1,818 | ) | $ | (6,627 | ) | $ | (2,480 | ) |
Nine Months Ended | |||||||
September 30, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (5,948 | ) | $ | (7,533 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Deferred tax expense (benefit) | 144 | (274 | ) | ||||
Depreciation, depletion and amortization | 18,014 | 21,753 | |||||
Accretion of asset retirement obligation | 282 | 1,671 | |||||
Share-based compensation expense | 852 | 1,181 | |||||
Amortization costs and other | 900 | 561 | |||||
Non-cash interest expense on PIK Notes | 2,961 | 16,973 | |||||
Payments to settle asset retirement obligations | (503 | ) | (2,277 | ) | |||
Changes in working capital accounts: | |||||||
Revenue receivable | 8,526 | 198 | |||||
Joint interest billing receivable | 4,834 | 1,935 | |||||
Accounts payable and accrued liabilities | (21,651 | ) | 2,292 | ||||
Advances from co-owners | (1,267 | ) | 424 | ||||
Deposit for surety bonds | (4,400 | ) | — | ||||
Other | (879 | ) | (1,576 | ) | |||
Net cash provided by operating activities | 1,865 | 35,328 | |||||
Cash flows used in investing activities: | |||||||
Investment in oil and gas properties | (14,727 | ) | (44,941 | ) | |||
Investment in other property and equipment | 30 | (52 | ) | ||||
Sale of oil and gas properties | (2,328 | ) | 2,207 | ||||
Sale of unevaluated oil and gas properties | 5,303 | — | |||||
Net cash used in investing activities | (11,722 | ) | (42,786 | ) | |||
Cash flows provided by (used in) financing activities: | |||||||
Net proceeds from share based compensation | 43 | 16 | |||||
Deferred financing costs | (330 | ) | (156 | ) | |||
Redemption of 2017 Notes | — | (22,650 | ) | ||||
Costs incurred to redeem 2021 Notes | (11 | ) | — | ||||
Proceeds from borrowings | 52,500 | 20,000 | |||||
Repayment of borrowings | (32,500 | ) | — | ||||
Net cash provided by (used in) financing activities | 19,702 | (2,790 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 9,845 | (10,248 | ) | ||||
Cash and cash equivalents, beginning of period | 15,655 | 28,312 | |||||
Cash and cash equivalents, end of period | $ | 25,500 | $ | 18,064 | |||
Supplemental disclosure of cash flow information: | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 4,283 | $ | 5,717 | |||
Income taxes | $ | 38 | $ | (95 | ) |
• | Existing common stock and preferred stock of the Company would be extinguished, and existing equity holders would not receive or retain any distribution, property or other value on account of or consideration in respect of their equity interests. |
• | Holders of claims (the “First Lien Claims”) arising on account of the Multidraw Term Loan Agreement will be allowed in the aggregate amount of $50,000,000, plus any accrued and unpaid interest and expenses. Each holder of First Lien Claims will receive cash equal to the amount of its claim from funds available pursuant to the Exit Facility in an aggregate amount of $50 million on the terms and conditions described in the Restructuring Support Agreement (the “Exit Facility”). |
• | Holders of claims relating to the 2021 Notes (the “Second Lien Notes Claims”) will be allowed in the aggregate amount of $9,427,000, plus any accrued and unpaid interest thereon payable through the Petition Date. Each holder of Second Lien Notes will receive (i) its pro rata share of 100% of the common stock in the reorganized Company (the “New Equity”) on account of such Second Lien Notes Claims, subject to (x) dilution from the issuance of New Equity in connection with the long-term management incentive plan for the reorganized Debtors (the “Management Incentive Plan”) and (y) the New Equity payable to the parties backstopping the Exit Facility (the “Put Option Premium”), and (ii) its pro rata share of $80 million in 10% Secured PIK Notes due 2023 (the “New 2023 PIK Notes”) issued by the reorganized Company pursuant to the indenture dated as of the date the Plan is declared effective (the “Effective Date”); such pro rata share of the New Equity and the New 2023 PIK Notes calculated by including the $275,045,768 (plus any accrued and unpaid interest) of Second Lien PIK Notes Claims as claims that will share pro rata in 100% of the New Equity, subject to (x) dilution from the issuance of New Equity in connection with the Management Incentive Plan and (y) the Put Option Premium. |
• | Holders of claims relating to the 2021 PIK Notes (the “Second Lien PIK Notes Claims”) will be allowed in the aggregate amount of $275,045,768, plus any accrued and unpaid interest thereon payable through the Petition Date. Each holder of Second Lien PIK Notes will receive (i) its pro rata share of 100% of the New Equity on |
• | Holders of allowed priority claims (other than a priority tax claim or administrative claim) will receive either: (i) payment in full, in cash, equal to the full allowed amount of such claim or (ii) such other treatment as may otherwise be agreed to by such holder, the Debtors, and the Requisite Creditors (as defined the Restructuring Support Agreement). |
• | Holders of secured claims (other than a secured tax claim, First Lien Claim, or Second Lien Notes Claim) will receive, at the Debtors’ election, either: (i) cash equal to the full allowed amount of such claim, (ii) reinstatement of such holder’s claim, (iii) the return or abandonment of the collateral securing such claim to such holder, or (iv) such other treatment as may otherwise be agreed to by such holder, the Debtors and the Requisite Creditors. |
• | Holders of secured tax claims will receive, at the Debtor’s election, either (i) cash equal to the full amount of its claim, (ii) reinstatement of such holder’s priority tax claim, (iii) the return or abandonment of the collateral securing such claim to such holder, or (iv) such other treatment as may otherwise be agreed to by such Holder, the Debtors and the Requisite Creditors. |
• | Holders of general unsecured claims will receive their pro rata share of $400,000 (less the reasonable out of pocket expenses of the claims administrator), except to the extent that the holder of an allowed general unsecured claim agrees to a less favorable treatment, in full and final satisfaction, compromise, settlement, release or discharge of each allowed general unsecured claim. |
• | Any claim against a Debtor subject to mandatory subordination pursuant to section 510(b) of the Bankruptcy Code (“Section 510(b) Claim”), if any, shall be discharged, canceled, released, and extinguished and shall be of no further force or effect, and holders of Section 510(b) Claims shall not receive any distribution on account of such Section 510(b) Claims. |
• | Intercompany claims shall be reinstated or, at the Debtors’ option, cancelled. No distribution shall be made on account of any intercompany claims other than in the ordinary course of business of the Debtors, as applicable. |
• | Intercompany interests shall be reinstated or, at the Debtors’ option, cancelled. No distribution shall be made on account of any Intercompany Interests. |
For the Three Months Ended September 30, 2018 | Loss (Numerator) | Shares (Denominator) | Per Share Amount | |||||||
BASIC EPS | ||||||||||
Net loss available to common stockholders | $ | (4,979 | ) | 25,587 | $ | (0.19 | ) | |||
Stock options | — | — | ||||||||
Attributable to participating securities | — | — | ||||||||
DILUTED EPS | $ | (4,979 | ) | 25,587 | $ | (0.19 | ) | |||
For the Nine Months Ended September 30, 2018 | Loss (Numerator) | Shares (Denominator) | Per Share Amount | |||||||
BASIC EPS | ||||||||||
Net loss available to common stockholders | $ | (9,802 | ) | 25,565 | $ | (0.38 | ) | |||
Stock options | — | — | ||||||||
Attributable to participating securities | — | — | ||||||||
DILUTED EPS | $ | (9,802 | ) | 25,565 | $ | (0.38 | ) | |||
For the Three Months Ended September 30, 2017 | Loss (Numerator) | Shares (Denominator) | Per Share Amount | |||||||
BASIC EPS | ||||||||||
Net loss available to common stockholders | $ | (3,085 | ) | 21,230 | $ | (0.15 | ) | |||
Stock options | — | — | ||||||||
Attributable to participating securities | — | — | ||||||||
DILUTED EPS | $ | (3,085 | ) | 21,230 | $ | (0.15 | ) | |||
For the Nine Months Ended September 30, 2017 | Loss (Numerator) | Shares (Denominator) | Per Share Amount | |||||||
BASIC EPS | ||||||||||
Net loss available to common stockholders | $ | (11,387 | ) | 21,222 | $ | (0.54 | ) | |||
Stock options | — | — | ||||||||
Attributable to participating securities | — | — | ||||||||
DILUTED EPS | $ | (11,387 | ) | 21,222 | $ | (0.54 | ) |
September 30, 2018 | December 31, 2017 | ||||||||||||||||||
2021 Notes | 2021 PIK Notes | Term Loans | 2021 Notes | 2021 PIK Notes | Term Loans | ||||||||||||||
Face Value | $ | 9,427 | $ | 275,046 | $ | 50,000 | $ | 9,427 | $ | 263,202 | $ | 30,000 | |||||||
Unamortized Deferred Financing Costs | (193 | ) | — | (284 | ) | (212 | ) | — | (2,037 | ) | |||||||||
Excess (Shortfall) Carrying Value | 473 | (425 | ) | — | 606 | (508 | ) | — | |||||||||||
Accrued PIK Interest | — | — | — | — | 8,883 | — | |||||||||||||
Carrying Value | $ | 9,707 | $ | 274,621 | $ | 49,716 | $ | 9,821 | $ | 271,577 | $ | 27,963 |
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Asset retirement obligation, beginning of period | $ | 31,310 | $ | 36,610 | |||
Liabilities incurred | 7 | 574 | |||||
Liabilities settled | (503 | ) | (2,486 | ) | |||
Accretion expense | 282 | 1,671 | |||||
Revisions in estimates | (66 | ) | (161 | ) | |||
Divestiture of oil and gas properties | (28,234 | ) | (248 | ) | |||
Asset retirement obligation, end of period | 2,796 | 35,960 | |||||
Less: current portion of asset retirement obligation | (459 | ) | (1,630 | ) | |||
Long-term asset retirement obligation | $ | 2,337 | $ | 34,330 |
Commodity Derivatives | ||||
Period | Balance Sheet Location | Fair Value | ||
September 30, 2018 | Derivative liability | $ | — | |
December 31, 2017 | Derivative asset | $ | 1,174 | |
December 31, 2017 | Derivative liability | $ | (731 | ) |
Instrument | Amount of Gain Recognized in Other Comprehensive Income | Location of Gain Reclassified into Income | Amount of Gain (Loss) Reclassified into Oil and Gas Sales | ||||||
Commodity Derivatives - September 30, 2018 | $ | — | Oil and gas sales | $ | (401 | ) | |||
Commodity Derivatives - September 30, 2017 | $ | 591 | Oil and gas sales | $ | 618 |
Instrument | Amount of Gain (Loss) Recognized in Other Comprehensive Income | Location of Gain Reclassified into Income | Amount of Gain (Loss) Reclassified into Oil and Gas Sales | ||||||
Commodity Derivatives - September 30, 2018 | $ | (990 | ) | Oil and gas sales | $ | (222 | ) | ||
Commodity Derivatives - September 30, 2017 | $ | 5,636 | Oil and gas sales | $ | 404 |
• | Level 1: valuations consist of unadjusted quoted prices in active markets for identical assets and liabilities and has the highest priority; |
• | Level 2: valuations rely on quoted prices in markets that are not active or observable inputs over the full term of the asset or liability; |
• | Level 3: valuations are based on prices or third party or internal valuation models that require inputs that are significant to the fair value measurement and are less observable and thus have the lowest priority. |
Fair Value Measurements Using | |||||||||||
Instrument | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||
Commodity Derivatives: | |||||||||||
September 30, 2018 | $ | — | $ | — | $ | — | |||||
December 31, 2017 | $ | — | $ | 443 | $ | — |
September 30, 2018 | December 31, 2017 | ||||||||||||||||||
Fair Value | Face Value | Carrying Value | Fair Value | Face Value | Carrying Value | ||||||||||||||
2021 Notes | $ | 4,155 | $ | 9,427 | $ | 9,707 | $ | 7,306 | $ | 9,427 | $ | 9,821 | |||||||
2021 PIK Notes | 121,240 | 275,046 | 274,621 | 198,717 | 263,202 | 271,577 | |||||||||||||
$ | 125,395 | $ | 284,473 | $ | 284,328 | $ | 206,023 | $ | 272,629 | $ | 281,398 |
Gains and Losses on Cash Flow Hedges | Change in Valuation Allowance | Total | |||||||||
Balance as of June 30, 2018 | $ | (610 | ) | $ | (192 | ) | $ | (802 | ) | ||
Amounts reclassified from accumulated other comprehensive loss: | |||||||||||
Oil and gas sales | 401 | — | 401 | ||||||||
Income tax effect | (96 | ) | 96 | — | |||||||
Net of tax | 305 | 96 | 401 | ||||||||
Net other comprehensive income | 305 | 96 | 401 | ||||||||
Balance as of September 30, 2018 | $ | (305 | ) | $ | (96 | ) | $ | (401 | ) |
Gains and Losses on Cash Flow Hedges | Change in Valuation Allowance | Total | |||||||||
Balance as of December 31, 2017 | $ | 278 | $ | — | $ | 278 | |||||
Other comprehensive income before reclassifications: | |||||||||||
Change in fair value of cash flow derivatives | (990 | ) | — | (990 | ) | ||||||
Income tax effect | 238 | (238 | ) | — | |||||||
Net of tax | (752 | ) | (238 | ) | (990 | ) | |||||
Amounts reclassified from accumulated other comprehensive income: | |||||||||||
Oil and gas sales | 222 | — | 222 | ||||||||
Income tax effect | (53 | ) | 142 | 89 | |||||||
Net of tax | 169 | 142 | 311 | ||||||||
Net other comprehensive loss | (583 | ) | (96 | ) | (679 | ) | |||||
Balance as of September 30, 2018 | $ | (305 | ) | $ | (96 | ) | $ | (401 | ) |
Gains and Losses on Cash Flow Hedges | Change in Valuation Allowance | Total | |||||||||
Balance as of June 30, 2017 | $ | 320 | $ | — | $ | 320 | |||||
Other comprehensive income before reclassifications: | |||||||||||
Change in fair value of derivatives | 591 | — | 591 | ||||||||
Income tax effect | (220 | ) | — | (220 | ) | ||||||
Net of tax | 371 | — | 371 | ||||||||
Amounts reclassified from accumulated other comprehensive income: | |||||||||||
Oil and gas sales | (618 | ) | — | (618 | ) | ||||||
Income tax effect | 230 | — | 230 | ||||||||
Net of tax | (388 | ) | — | (388 | ) | ||||||
Net other comprehensive loss | (17 | ) | — | (17 | ) | ||||||
Balance as of September 30, 2017 | $ | 303 | $ | — | $ | 303 |
Gains and Losses on Cash Flow Hedges | Change in Valuation Allowance | Total | |||||||||
Balance as of December 31, 2016 | $ | (2,983 | ) | $ | (1,767 | ) | $ | (4,750 | ) | ||
Other comprehensive income before reclassifications: | |||||||||||
Change in fair value of derivatives | 5,636 | — | 5,636 | ||||||||
Income tax effect | (2,096 | ) | 1,767 | (329 | ) | ||||||
Net of tax | 3,540 | 1,767 | 5,307 | ||||||||
Amounts reclassified from accumulated other comprehensive income: | |||||||||||
Oil and gas sales | (404 | ) | — | (404 | ) | ||||||
Income tax effect | 150 | — | 150 | ||||||||
Net of tax | (254 | ) | — | (254 | ) | ||||||
Net other comprehensive loss | 3,286 | 1,767 | 5,053 | ||||||||
Balance as of September 30, 2017 | $ | 303 | $ | — | $ | 303 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Oil production | $ | 5,211 | $ | 7,107 | $ | 17,138 | $ | 21,278 | |||||||
Natural gas production | 11,344 | 16,428 | 38,054 | 40,841 | |||||||||||
Natural gas liquids production | 4,331 | 4,649 | 12,118 | 11,088 | |||||||||||
Total | $ | 20,886 | $ | 28,184 | $ | 67,310 | $ | 73,207 |
• | Completed the sale of our Oklahoma assets for $292.6 million; |
• | Completed two debt exchanges in 2016 to extend maturities on a significant portion of debt and to reduce cash interest expense until August 2018; |
• | Reduced total debt 21% from $425 million at December 31, 2014 to $334 million at September 30, 2018; |
• | Entered into a new $50 million term loan agreement maturing in 2020; |
• | Sold our Gulf of Mexico assets resulting in the extinguishment of $28.2 million of discounted asset retirement obligations from our balance sheet and the expected refund of $12.4 million of cash collateral ($8.3 million of which was received during October 2018) used to secure our offshore bonding; and |
• | Reduced capital spending in 2018. |
• | Existing common stock and preferred stock of the Company would be extinguished, and existing equity holders would not receive or retain any distribution, property or other value on account of or consideration in respect of their equity interests. |
• | Holders of claims (the “First Lien Claims”) arising on account of the Multidraw Term Loan Agreement will be allowed in the aggregate amount of $50,000,000, plus any accrued and unpaid interest and expenses. Each holder of First Lien Claims will receive cash equal to the amount of its claim from funds available pursuant to the Exit Facility in an aggregate amount of $50 million on the terms and conditions described in the Restructuring Support Agreement (the “Exit Facility”). |
• | Holders of claims relating to the 2021 Notes (the “Second Lien Notes Claims”) will be allowed in the aggregate amount of $9,427,000, plus any accrued and unpaid interest thereon payable through the Petition Date. Each holder of Second Lien Notes will receive (i) its pro rata share of 100% of the common stock in the reorganized Company (the “New Equity”) on account of such Second Lien Notes Claims, subject to (x) dilution from the issuance of New Equity in connection with the long-term management incentive plan for the reorganized Debtors (the “Management Incentive Plan”) and (y) the New Equity payable to the parties backstopping the Exit Facility (the “Put Option Premium”), and (ii) its pro rata share of $80 million in 10% Secured PIK Notes due 2023 (the “New 2023 PIK Notes”) issued by the reorganized Company pursuant to the indenture dated as of the date the Plan is declared effective (the “Effective Date”); such pro rata share of the New Equity and the New 2023 PIK Notes calculated by including the $275,045,768 (plus any accrued and unpaid interest) of Second Lien PIK Notes Claims as claims that will share pro rata in 100% of the New Equity, subject to (x) dilution from the issuance of New Equity in connection with the Management Incentive Plan and (y) the Put Option Premium. |
• | Holders of claims relating to the 2021 PIK Notes (the “Second Lien PIK Notes Claims”) will be allowed in the aggregate amount of $275,045,768, plus any accrued and unpaid interest thereon payable through the Petition Date. Each holder of Second Lien PIK Notes will receive (i) its pro rata share of 100% of the New Equity on account of such Second Lien PIK Notes Claims, subject to (x) dilution from the issuance of New Equity in connection with the Management Incentive Plan and (y) the Put Option Premium, and (ii) its pro rata share of $80 million in New 2023 PIK Notes; such pro rata share of the New Equity and the New 2023 PIK Notes calculated by including the $9,427,000 (plus any accrued and unpaid interest) of Second Lien Notes Claims as claims that will share pro rata in 100% of the New Equity, subject to |
• | Holders of allowed priority claims (other than a priority tax claim or administrative claim) will receive either: (i) payment in full, in cash, equal to the full allowed amount of such claim or (ii) such other treatment as may otherwise be agreed to by such holder, the Debtors, and the Requisite Creditors (as defined the Restructuring Support Agreement). |
• | Holders of secured claims (other than a secured tax claim, First Lien Claim, or Second Lien Notes Claim) will receive, at the Debtors’ election, either: (i) cash equal to the full allowed amount of such claim, (ii) reinstatement of such holder’s claim, (iii) the return or abandonment of the collateral securing such claim to such holder, or (iv) such other treatment as may otherwise be agreed to by such holder, the Debtors and the Requisite Creditors. |
• | Holders of secured tax claims will receive, at the Debtor’s election, either (i) cash equal to the full amount of its claim, (ii) reinstatement of such holder’s priority tax claim, (iii) the return or abandonment of the collateral securing such claim to such holder, or (iv) such other treatment as may otherwise be agreed to by such Holder, the Debtors and the Requisite Creditors. |
• | Holders of general unsecured claims will receive their pro rata share of $400,000 (less the reasonable out of pocket expenses of the claims administrator), except to the extent that the holder of an allowed general unsecured claim agrees to a less favorable treatment, in full and final satisfaction, compromise, settlement, release or discharge of each allowed general unsecured claim. |
• | Any claim against a Debtor subject to mandatory subordination pursuant to section 510(b) of the Bankruptcy Code (“Section 510(b) Claim”), if any, shall be discharged, canceled, released, and extinguished and shall be of no further force or effect, and holders of Section 510(b) Claims shall not receive any distribution on account of such Section 510(b) Claims. |
• | Intercompany claims shall be reinstated or, at the Debtors’ option, canceled. No distribution shall be made on account of any intercompany claims other than in the ordinary course of business of the Debtors, as applicable. |
• | Intercompany interests shall be reinstated or, at the Debtors’ option, canceled. No distribution shall be made on account of any Intercompany Interests. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Production: | |||||||||||||||
Oil (Bbls) | 75,497 | 142,830 | 260,551 | 423,231 | |||||||||||
Gas (Mcf) | 3,838,232 | 5,336,119 | 12,628,882 | 13,218,475 | |||||||||||
Ngl (Mcfe) | 802,733 | 1,283,900 | 2,600,987 | 3,268,206 | |||||||||||
Total Production (Mcfe) | 5,093,947 | 7,476,999 | 16,793,175 | 19,026,067 | |||||||||||
Sales: | |||||||||||||||
Total oil sales | $ | 5,210,740 | $ | 7,106,913 | $ | 17,138,048 | $ | 21,277,840 | |||||||
Total gas sales | 11,344,263 | 16,427,965 | 38,053,519 | 40,841,252 | |||||||||||
Total ngl sales | 4,330,514 | 4,649,157 | 12,118,068 | 11,087,868 | |||||||||||
Total oil, gas, and ngl sales | $ | 20,885,517 | $ | 28,184,035 | $ | 67,309,635 | $ | 73,206,960 | |||||||
Average sales prices: | |||||||||||||||
Oil (per Bbl) | $ | 69.02 | $ | 49.76 | $ | 65.78 | $ | 50.27 | |||||||
Gas (per Mcf) | 2.96 | 3.08 | 3.01 | 3.09 | |||||||||||
Ngl (per Mcfe) | 5.39 | 3.62 | 4.66 | 3.39 | |||||||||||
Per Mcfe | 4.10 | 3.77 | 4.01 | 3.85 |
Three months ended September 30, 2017 | Percent of Total Company | Nine months ended September 30, 2017 | Percent of Total Company | ||||||||||
Production: | |||||||||||||
Oil (Bbls) | 65,384 | 46 | % | 220,629 | 52 | % | |||||||
Gas (Mcf) | 1,242,503 | 23 | % | 2,853,696 | 22 | % | |||||||
Ngl (Mcfe) | 182,442 | 14 | % | 359,536 | 11 | % | |||||||
Total Production (Mcfe) | 1,817,249 | 24 | % | 4,537,006 | 24 | % | |||||||
Sales: | |||||||||||||
Total oil sales | $ | 3,203,725 | 45 | % | $ | 11,063,523 | 52 | % | |||||
Total gas sales | 3,661,289 | 22 | % | 8,697,533 | 21 | % | |||||||
Total ngl sales | 667,854 | 14 | % | 1,250,432 | 11 | % | |||||||
Total oil and gas sales | $ | 7,532,868 | 27 | % | $ | 21,011,488 | 29 | % |
September 30, 2018 | December 31, 2017 | ||||||||||||||||||
2021 Notes | 2021 PIK Notes | Term Loans | 2021 Notes | 2021 PIK Notes | Term Loans | ||||||||||||||
Face Value | $ | 9,427 | $ | 275,046 | $ | 50,000 | $ | 9,427 | $ | 263,202 | $ | 30,000 | |||||||
Unamortized Deferred Financing Costs | (193 | ) | — | (284 | ) | (212 | ) | — | (2,037 | ) | |||||||||
Excess (Shortfall) Carrying Value | 473 | (425 | ) | — | 606 | (508 | ) | — | |||||||||||
Accrued PIK Interest | — | — | — | — | 8,883 | — | |||||||||||||
Carrying Value | $ | 9,707 | $ | 274,621 | $ | 49,716 | $ | 9,821 | $ | 271,577 | $ | 27,963 |
i. | that the Company’s disclosure controls and procedures are designed to ensure (a) that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (b) that such information is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure; and |
ii. | that the Company's disclosure controls and procedures are effective. |
• | our ability to execute, confirm and consummate the Plan or another plan of reorganization with respect to the Chapter 11 proceedings or other alternative restructuring transaction; |
• | our ability to comply with the terms of the Restructuring Support Agreement, including the milestones therein: |
• | the high costs of bankruptcy proceedings and related fees; |
• | our ability to obtain sufficient financing to allow us to emerge from bankruptcy and execute our business plan post-emergence; |
• | our ability to maintain our relationships with our suppliers, service providers, customers, employees, and other third parties; |
• | our ability to maintain contracts that are critical to our operations; |
• | our ability to execute our business plan in the current depressed commodity price environment; |
• | our ability to attract, motivate and retain key employees; |
• | the ability of third parties to seek and obtain court approval to terminate contracts and other agreements with us; |
• | the ability of third parties to seek and obtain court approval to convert the Chapter 11 proceedings to a Chapter 7 proceeding; and |
• | the actions and decisions of our creditors and other third parties who have interests in our Chapter 11 proceedings that may be inconsistent with our plans. |
PETROQUEST ENERGY, INC. | ||
Date: | November 13, 2018 | /s/ J. Bond Clement |
J. Bond Clement Executive Vice President, Chief Financial Officer (Authorized Officer and Principal Financial and Accounting Officer) |
1. | I have reviewed this Form 10-Q of PetroQuest Energy, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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. |
1. | I have reviewed this Form 10-Q of PetroQuest Energy, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(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/ Charles T. Goodson |
Charles T. Goodson |
Chief Executive Officer |
November 13, 2018 |
/s/ J. Bond Clement |
J. Bond Clement |
Chief Financial Officer |
November 13, 2018 |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Oct. 30, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | PETROQUEST ENERGY INC | |
Entity Central Index Key | 0000872248 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 25,587,441 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 1,495,000 | 1,495,000 |
Preferred stock, shares outstanding | 1,495,000 | 1,495,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 25,587,000 | 25,521,000 |
Common stock, shares outstanding | 25,587,000 | 25,521,000 |
10% Senior Secured Notes due 2021 | Senior Notes | ||
Stated interest rate | 10.00% | 10.00% |
10% Senior Secured PIK Notes due 2021 | Payment in Kind (PIK) Note | ||
Stated interest rate | 10.00% | 10.00% |
Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Revenues: | ||||
Oil and gas sales | $ 20,886 | $ 28,184 | $ 67,310 | $ 73,207 |
Expenses: | ||||
Lease operating expenses | 4,368 | 8,863 | 16,380 | 23,052 |
Production taxes | 890 | 1,112 | 2,451 | 1,990 |
Depreciation, depletion and amortization | 5,486 | 8,795 | 18,014 | 21,753 |
General and administrative | 4,780 | 3,341 | 12,084 | 10,808 |
Accretion of asset retirement obligation | 42 | 571 | 282 | 1,671 |
Interest expense | 9,371 | 7,371 | 24,488 | 21,776 |
Expenses | 24,937 | 30,053 | 73,699 | 81,050 |
Other income: | ||||
Other income (expense) | 394 | (16) | 585 | 36 |
Loss from operations | (3,657) | (1,885) | (5,804) | (7,807) |
Income tax expense (benefit) | 38 | (84) | 144 | (274) |
Net loss | (3,695) | (1,801) | (5,948) | (7,533) |
Preferred stock dividend | 1,284 | 1,284 | 3,854 | 3,854 |
Loss available to common stockholders | $ (4,979) | $ (3,085) | $ (9,802) | $ (11,387) |
Basic | ||||
Net loss per share (in usd per share) | $ (0.19) | $ (0.15) | $ (0.38) | $ (0.54) |
Diluted | ||||
Net loss per share (in usd per share) | $ (0.19) | $ (0.15) | $ (0.38) | $ (0.54) |
Weighted average number of common shares: | ||||
Basic (shares) | 25,587 | 21,230 | 25,565 | 21,222 |
Diluted (shares) | 25,587 | 21,230 | 25,565 | 21,222 |
Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (3,695) | $ (1,801) | $ (5,948) | $ (7,533) |
Change in fair value of derivative instruments, accounted for as hedges, net of income tax expense (benefit) of $0, ($10), ($106) and $179, respectively | 401 | (17) | (679) | 5,053 |
Comprehensive loss | $ (3,294) | $ (1,818) | $ (6,627) | $ (2,480) |
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Income tax (expense) benefit related to other comprehensive income due to derivatives | $ 0 | $ (10) | $ (106) | $ 179 |
Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial information for the three and nine month periods ended September 30, 2018 and 2017, have been prepared by the Company and were not audited by its independent registered public accountants. In the opinion of management, all normal and recurring adjustments have been made to present fairly the financial position, results of operations, and cash flows of the Company at September 30, 2018 and for all reported periods. Results of operations for the interim periods presented are not necessarily indicative of the operating results for the full year or any future periods. The balance sheet at December 31, 2017 has been derived from the audited financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the audited financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Certain prior period amounts have been reclassified to conform to current year presentation. Unless the context otherwise indicates, any references in this Quarterly Report on Form 10-Q to the “Company,” "we," or "us" refer to PetroQuest Energy, Inc. ("PetroQuest") and its wholly-owned consolidated subsidiaries, PetroQuest Energy, L.L.C. (a single member Louisiana limited liability company), PetroQuest Oil & Gas, L.L.C. (a single member Louisiana limited liability company), TDC Energy LLC (a single member Louisiana limited liability company) and Pittrans, Inc. (an Oklahoma corporation). |
Going Concern |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities in the normal course of business for the twelve month period following the date of these consolidated financial statements. As such, the accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and their carrying amounts, or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern. The Company's overall liquidity position and cash available for capital expenditures continue to be negatively impacted by continued weak natural gas prices, declining production and increasing cash interest expense on its outstanding indebtedness. Due to the sale of the Company's Gulf of Mexico properties in January 2018 and normal production declines, production has declined by 41% in the third quarter of 2018 when compared to the fourth quarter of 2017 and cash flow from operations for the nine months ended September 30, 2018 was $1.9 million. At September 30, 2018, the Company had approximately $25.5 million of cash and approximately $334.5 million aggregate principal amount of outstanding indebtedness, and had deferred ten dividend payments with respect to the Company's Series B Preferred Stock and accrued a $14.1 million payable related to the ten deferred payments and the quarterly dividend that was payable on October 15, 2018. In addition, beginning with the August 15, 2018 interest payment on the Company's 2021 PIK Notes (as defined below), the Company is required to pay interest on its 2021 PIK Notes at 10% in cash (instead of 1% in cash and 9% in payment in kind). The Company elected not to pay the cash interest payments that were due on August 15, 2018 under the Company's 2021 PIK Notes and 2021 Notes (as defined below) which totaled approximately $14.2 million (see Note 6 for additional information). As a result of the forgoing, the Company engaged in discussions and negotiations with the lenders under the Multidraw Term Loan, certain holders of the Company’s 2021 Notes and 2021 PIK Notes, and their legal and financial advisors regarding various alternatives with respect to the Company’s capital structure and financial position, including the significant amount of indebtedness, and the August 15, 2018 interest payments overdue on the Company’s 2021 Notes and 2021 PIK Notes. Voluntary Reorganization under Chapter 11 of the Bankruptcy Code As a result of the forgoing discussions and negotiations, on November 6, 2018 (the “Petition Date”), the Company, PetroQuest Energy, L.L.C. (“PQE”) and their direct and indirect subsidiaries (collectively, the “Debtors”) filed voluntary petitions (collectively, the “Petition,” and the cases commenced thereby, the “Chapter 11 Cases”) seeking relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Chapter 11 Cases are being administered jointly under the caption In re: PetroQuest Energy, Inc., et. al. (Case No. 18-36322). The Debtors will continue to operate as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. The Company expects ordinary-course operations to continue substantially uninterrupted during and after the Chapter 11 Cases. Restructuring Support Agreement In connection with the Chapter 11 filing, on the Petition Date, the Debtors entered into a restructuring support agreement (the “Restructuring Support Agreement”) with (i) holders (the “2021 Noteholders”) of 81.83% of the Company’s 10% Second Lien Senior Secured Notes due 2021 (the “2021 Notes”) issued under that certain Indenture dated as of February 17, 2016, among the Company, the Subsidiary Guarantors (as defined therein) and Wilmington Trust, National Association, as trustee and collateral trustee thereunder, (ii) holders (the “2021 PIK Noteholders” and, together with the 2021 Noteholders, the “Supporting Noteholders”) of 84.76% of the Company’s 10% Second Lien Senior Secured PIK Notes due 2021 (the “2021 PIK Notes”) issued under that certain Indenture dated as of September 27, 2016, among the Company, the Subsidiary Guarantors (as defined therein) and Wilmington Trust, National Association, as indenture trustee and collateral trustee thereunder, and (iii) each of the lenders, or investment advisors or managers for the account of each of the lenders (collectively, and any successors or permitted assigns that become party thereto, the “Supporting Lenders” and collectively with the Supporting Noteholders, the “Supporting Parties”) under the Company’s multi-draw term loan agreement (the “Multidraw Term Loan Agreement”), by and among PQE, the Company, Wells Fargo Bank, National Association, as administrative agent, and lenders holding Term Loans (as defined therein) party thereto from time to time. The Restructuring Support Agreement contemplates the restructuring (the “Restructuring”) of the Debtors pursuant to the plan of reorganization attached thereto (the “Plan”), the terms of which have been agreed upon by the Debtors and Supporting Parties. The Restructuring Support Agreement provides for certain milestones requiring, among other things, that the Debtors commence the solicitation of votes to accept or reject the Plan on or before November 20, 2018, the confirmation order be entered by the Bankruptcy Court on or before December 21, 2018 and the Plan becomes effective on or before December 31, 2018. The Restructuring Support Agreement contains certain covenants on the part of each of the Debtors and the Supporting Parties, including, subject to the terms of the Restructuring Support Agreement, limitations on the parties’ ability to pursue transactions other than the Restructuring, commitments by the Supporting Parties to vote in favor of the Plan, and commitments of the Debtors and the Supporting Parties to negotiate in good faith to finalize the documents and agreements governing the Restructuring. The Restructuring Support Agreement also provides for certain conditions to the obligations of the parties and for termination upon the occurrence of certain events, including without limitation, the failure to achieve certain milestones and certain breaches by the parties under the Restructuring Support Agreement. The Debtors have also filed a motion, and the Bankruptcy Court has entered an interim order, placing restrictions on the trading of the Company’s equity securities for the purpose of preserving certain tax attributes. Proposed Chapter 11 Restructuring The Plan provides, among other things, that:
Reorganization Items, Net The Company has incurred and is expected to continue to incur significant costs associated with the reorganization. These costs, which are expensed as incurred, are expected to significantly affect the Company’s results of operations. Reorganization items represent costs and income directly associated with the Chapter 11 Cases, and will also include adjustments to reflect the carrying value of certain liabilities subject to compromise at their estimated allowed claim amounts, as such adjustments are determined. Effect of Filing on Creditors Subject to certain exceptions, under the Bankruptcy Code, the filing of the Petition automatically enjoined, or stayed, the continuation of most judicial or administrative proceedings or filing of other actions against the Debtors or their property to recover, collect or secure a claim arising prior to the Petition Date. Absent an order of the Bankruptcy Court, substantially all of the Debtors’ prepetition liabilities are subject to settlement under the Bankruptcy Code. Although the filing of the Petition triggered defaults on the Debtors’ debt obligations, creditors are stayed from taking any actions against the Debtors as a result of such defaults, subject to certain limited exceptions permitted by the Bankruptcy Code. Rejection of Executory Contracts Subject to certain exceptions, under the Bankruptcy Code, the Debtors may assume, assign or reject certain executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and satisfaction of certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a prepetition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves the Debtors of performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a prepetition general unsecured claim for damages caused by such deemed breach. Counterparties to such rejected contracts or leases may assert unsecured claims in the Bankruptcy Court against the applicable Debtors’ estate for damages. Generally, the assumption of an executory contract or unexpired lease requires the Debtors to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance. Accordingly, any description of an executory contract or unexpired lease with any of the Debtors in this Quarterly Report on Form 10-Q, including where applicable a quantification of the Company’s obligations under any such executory contract or unexpired lease with the applicable Debtor, is qualified by any overriding rejection rights the Company has under the Bankruptcy Code. Further, nothing herein is or shall be deemed an admission with respect to any claim amounts or calculations arising from the rejection of any executory contract or unexpired lease and the Debtors expressly preserve all of their rights with respect thereto. Process for Plan of Reorganization On the Petition Date, the Debtors filed the Plan, which if confirmed by the Bankruptcy Court, would, among other things, resolve the Debtors’ prepetition obligations, issue new debt and equity for the reorganized Company and establish the reorganized Company’s corporate governance subsequent to exit from bankruptcy. In addition to being voted on by holders of impaired claims and equity interests, the Plan must satisfy certain requirements of the Bankruptcy Code and must be approved, or confirmed, by the Bankruptcy Court in order to become effective. The Plan will be accepted by a class of holders of claims against the Debtors if at least one-half in number and two-thirds in dollar amount of claims actually voting in each class of claims impaired by the Plan have voted to accept the Plan. A class of claims or equity interests that does not receive or retain any property under the Plan on account of such claims or interests is deemed to have voted to reject the Plan. Under certain circumstances set forth in Section 1129(b) of the Bankruptcy Code, the Bankruptcy Court may confirm the Plan even if the Plan has not been accepted by all impaired classes of claims and equity interests. The precise requirements and evidentiary showing for confirming the Plan notwithstanding its rejection by one or more impaired classes of claims or equity interests depends upon a number of factors, including the status and seniority of the claims or equity interests in the rejecting class (i.e., unsecured or secured claims, subordinated or senior claims). Although the Plan provides that the Debtors will emerge from bankruptcy as a going concern, there can be no assurance at this time that the Debtors will be able to successfully confirm and consummate the Plan or any other alternative restructuring transaction, including a sale of all or substantially all of the Debtors’ assets, that satisfies the conditions of the Bankruptcy Code and is confirmed by the Bankruptcy Court, or that the Plan will be implemented successfully. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Accounting and Financial Reporting For the three and nine months ended September 30, 2018 and 2017, the consolidated financial statements have not been modified to reflect the bankruptcy filing. For periods subsequent to filing the Petition, the Company will apply ASC 852, Reorganizations, in preparing the consolidated financial statements. ASC 852 requires that the financial statements distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that are realized or incurred in the Chapter 11 Cases will be recorded in a reorganization line item on the consolidated statements of operations. In addition, the pre-petition obligations that may be impacted by the bankruptcy reorganization process will be classified on the balance sheet in liabilities subject to compromise. These liabilities will be reported at the amounts expected to be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts. |
Acquisitions and Divestitures |
9 Months Ended |
---|---|
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Divestitures: On April 17, 2017, the Company completed the sale of its interest in the East Lake Verret field in Louisiana for approximately $2.2 million. This sale was accounted for as an adjustment to the capitalized costs of oil and gas properties. On December 15, 2017, the Company completed the sale of its saltwater disposal assets in East Texas for approximately $8.5 million. This sale was accounted for as an adjustment to the capitalized costs of oil and gas properties. On January 31, 2018, the Company sold its Gulf of Mexico properties. The Company received no consideration from the sale of these properties and is required to contribute approximately $3.8 million towards the future abandonment costs for the properties, which is included in other accrued liabilities on the Company's Consolidated Balance Sheet as of September 30, 2018. As a result of the sale, the Company extinguished approximately $28.2 million of its discounted asset retirement obligations. In connection with the sale, the Company expects to receive a cash refund of $12.4 million ($8.3 million was received during October 2018) related to a depositary account that serves to collateralize a portion of the Company's offshore bonds related to these properties, which is included in deposits for surety bonds on the Company's Consolidated Balance Sheet as of September 30, 2018. After finalizing purchase price adjustments, during October 2018 the Company settled the remaining liabilities related to this sale for $4.2 million. This sale was accounted for as an adjustment to the capitalized costs of oil and gas properties. Acquisitions: In December 2017, the Company entered into an oil focused play in central Louisiana targeting the Austin Chalk formation through the execution of agreements to acquire interests in approximately 24,600 gross acres. The Company has invested approximately $11.1 million as of September 30, 2018 in acquisition, engineering and geological costs and issued 2.0 million shares of common stock with respect to these interests. |
Equity |
9 Months Ended |
---|---|
Sep. 30, 2018 | |
Equity [Abstract] | |
Equity | Equity Common Stock During December 2017, the Company issued 2.0 million shares of common stock in connection with the acquisition of Austin Chalk acreage (see Note 3). Additionally, during December 2017, the Company issued approximately 2.2 million shares of common stock related to the extinguishment of a portion of the outstanding 2021 Notes (see Note 6). Convertible Preferred Stock The Company has 1,495,000 shares of 6.875% Series B Cumulative Convertible Perpetual Preferred Stock (the “Series B Preferred Stock”) outstanding. The following is a summary of certain terms of the Series B Preferred Stock: Dividends. The Series B Preferred Stock accumulates dividends at an annual rate of 6.875% for each share of Series B Preferred Stock. Dividends are cumulative from the date of first issuance and, to the extent payment of dividends is not prohibited by the Company’s debt agreements, assets are legally available to pay dividends and the Company’s board of directors or an authorized committee of the board declares a dividend payable, the Company pays dividends in cash, every quarter. In connection with an amendment to the Company's prior bank credit facility (which was replaced by the Old Loan Agreement (as defined below) in October 2016 and the Multidraw Term Loan Agreement (as defined below) in August 2018) prohibiting the Company from declaring or paying dividends on the Series B Preferred Stock, the Company suspended the quarterly cash dividend on its Series B Preferred Stock beginning with the dividend payment due on April 15, 2016. The Old Loan Agreement also prohibited, and the Multidraw Term Loan Agreement also prohibits the Company from declaring and paying cash dividends on the Series B Preferred Stock. Under the terms of the Series B Preferred Stock, any unpaid dividends will accumulate. As of September 30, 2018, the Company has deferred ten dividend payments and has accrued a $14.1 million payable related to the ten deferred payments and the quarterly dividend that was payable on October 15, 2018, which is included in preferred stock dividend payable on the Consolidated Balance Sheet. As a result of the restrictions under the Old Loan Agreement, the Company did not pay the dividend that was payable on July 15, 2017, which represented the sixth deferred dividend payment. As a result, the holders of the Series B Preferred Stock, voting as a single class, had the right prior to the Petition Date to elect two additional directors to the Company's Board of Directors (the "Board") until all accumulated and unpaid dividends on the Series B Preferred Stock are paid in full. On April 12, 2018, June 18, 2018 and September 7, 2018, the Company received written notices from separate holders of the Series B Preferred Stock exercising this right by requesting that the Board call a special meeting of the holders of the preferred stock for the purposes of electing the additional directors, as set forth in Section 4(ii) of the Certificate of Designations establishing the preferred stock, dated September 24, 2007. The April 12, 2018 and June 18, 2018 requests were subsequently withdrawn, but the September 7, 2018 request remains outstanding. Mandatory conversion. The Company may, at its option, cause shares of the Series B Preferred Stock to be automatically converted at the applicable conversion rate, but only if the closing sale price of the Company’s common stock for 20 trading days within a period of 30 consecutive trading days ending on the trading day immediately preceding the date the Company gives the conversion notice equals or exceeds 130% of the conversion price in effect on each such trading day. Conversion rights. Each share of Series B Preferred Stock may be converted at any time, at the option of the holder, into 0.8608 shares of the Company’s common stock (which is based on a conversion price of approximately $58.08 per share of common stock, subject to further adjustment) plus cash in lieu of fractional shares, subject to the Company’s right to settle all or a portion of any such conversion in cash or shares of the Company’s common stock. If the Company elects to settle all or any portion of its conversion obligation in cash, the conversion value and the number of shares of the Company’s common stock it will deliver upon conversion (if any) will be based upon a 20 trading day averaging period. Upon any conversion, the holder will not receive any cash payment representing accumulated and unpaid dividends on the Series B Preferred Stock, whether or not in arrears, except in limited circumstances. The conversion rate is equal to $50 divided by the conversion price at the time. The conversion price is subject to adjustment upon the occurrence of certain events. The conversion price on the conversion date and the number of shares of the Company’s common stock, as applicable, to be delivered upon conversion may be adjusted if certain events occur. |
Earnings Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share A reconciliation between the basic and diluted earnings per share computations (in thousands, except per share amounts) is as follow:
An aggregate of 1.9 million and 1.4 million shares of common stock representing options to purchase common stock and unvested shares of restricted common stock and common shares issuable upon the assumed conversion of the Series B Preferred Stock totaling 1.3 million shares were not included in the computation of diluted earnings per share for the three month periods ended September 30, 2018 and 2017, respectively, because the inclusion would have been anti-dilutive as a result of the net loss reported for such periods. An aggregate of 2.0 million and 1.4 million shares of common stock representing options to purchase common stock and unvested shares of restricted common stock and common shares issuable upon the assumed conversion of the Series B Preferred Stock totaling 1.3 million shares were not included in the computation of diluted earnings per share for the nine month periods ended September 30, 2018 and 2017, respectively, because the inclusion would have been anti-dilutive as a result of the net loss reported for such periods. |
Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt On August 19, 2010, the Company issued $150 million in principal amount of its 10% Senior Notes due 2017. On July 3, 2013, the Company issued an additional $200 million in principal amount of its 10% Senior Notes due 2017 (collectively, the "2017 Notes"). On February 17, 2016, the Company closed a private exchange offer (the "February Exchange") and consent solicitation (the "February Consent Solicitation") to certain eligible holders of its outstanding 2017 Notes. In satisfaction of the tender of $214.4 million in aggregate principal amount of the 2017 Notes, representing approximately 61% of the then outstanding aggregate principal amount of 2017 Notes, the Company (i) paid approximately $53.6 million of cash, (ii) issued $144.7 million aggregate principal amount of its new 10% Second Lien Senior Secured Notes due 2021 (the "2021 Notes") and (iii) issued approximately 1.1 million shares of its common stock. Following the completion of the February Exchange, $135.6 million in aggregate principal amount of the 2017 Notes remained outstanding. The February Consent Solicitation eliminated or waived substantially all of the restrictive covenants contained in the indenture governing the 2017 Notes. On September 27, 2016, the Company closed private exchange offers (the "September Exchange") and a consent solicitation (the "September Consent Solicitation") to certain eligible holders of its outstanding 2017 Notes and 2021 Notes. In satisfaction of the consideration of $113.0 million in aggregate principal amount of the 2017 Notes, representing approximately 83% of the then outstanding aggregate principal amount of 2017 Notes, and $130.5 million in aggregate principal amount of the 2021 Notes, representing approximately 90% of the then outstanding aggregate principal amount of 2021 Notes, the Company issued (i) $243.5 million in aggregate principal amount of its new 10% Second Lien Senior Secured PIK Notes due 2021 (the "2021 PIK Notes") and (ii) approximately 3.5 million shares of its common stock. The Company also paid, in cash, accrued and unpaid interest on the 2017 Notes and 2021 Notes accepted in the September Exchange from the last applicable interest payment date to, but not including, September 27, 2016. Following the consummation of the September Exchange, there were $22.7 million in aggregate principal amount of the 2017 Notes outstanding and $14.2 million in aggregate principal amount of the 2021 Notes outstanding. The September Consent Solicitation amended certain provisions of the indenture governing the 2021 Notes and amended the registration rights agreement with respect to the 2021 Notes. On March 31, 2017, the Company redeemed its remaining outstanding 2017 Notes at a redemption price of $22.8 million. The redemption was funded by cash on hand and amounts borrowed under the Old Loan Agreement described below. On December 28, 2017, the Company issued approximately 2.2 million shares of common stock to extinguish approximately $4.8 million of outstanding principal amount of 2021 Notes. The 2021 PIK Notes bear interest at a rate of 10% per annum on the principal amount and interest is payable semi-annually in arrears on February 15 and August 15 of each year. The Company was permitted, at its option, for the first three interest payment dates of the 2021 PIK Notes, to instead pay interest at (i) the annual rate of 1% in cash plus (ii) the annual rate of 9% PIK (the "PIK Interest") payable by increasing the principal amount outstanding of the 2021 PIK Notes or by issuing additional 2021 PIK Notes in certificated form. The Company exercised this PIK option in connection with the interest payments due on February 15, 2017, August 15, 2017 and February 15, 2018. The 2021 Notes bear interest at a rate of 10% per annum on the principal amount and interest is payable semi-annually in arrears on February 15 and August 15 of each year. The February Exchange and September Exchange were accounted for as troubled debt restructurings pursuant to guidance provided by Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 470-60 "Troubled Debt Restructurings by Debtors." The Company determined that the future undiscounted cash flows from the 2021 PIK Notes issued in the September Exchange through the maturity date exceeded the adjusted carrying amount of the 2017 Notes and the 2021 Notes tendered in the September Exchange. Accordingly, no gain or loss on extinguishment of debt was recognized in connection with the September Exchange. The net shortfall of the remaining carrying value of the 2017 Notes and 2021 Notes tendered as compared to the principal amount of the 2021 PIK Notes issued in the September Exchange of $0.6 million is reflected as part of the carrying value of the 2021 PIK Notes. Such shortfall is being amortized under the effective interest method over the term of the 2021 PIK Notes. At September 30, 2018, $0.4 million of the shortfall remained as part of the carrying value of the 2021 PIK Notes and the Company recognized $84,000 of amortization expense as an increase to interest expense during the nine months ended September 30, 2018. The Company previously determined that the future undiscounted cash flows from the 2021 Notes issued in the February Exchange through the maturity date exceeded the adjusted carrying amount of the 2017 Notes tendered in the February Exchange. Accordingly, no gain on extinguishment of debt was recognized in connection with the February Exchange. The excess of the remaining carrying value of the 2017 Notes tendered over the principal amount of the 2021 Notes issued in the February Exchange of $13.9 million was reflected as part of the carrying value of the 2021 Notes. The amount of the excess carrying value attributable to the 2021 Notes tendered in the September Exchange is now reflected as part of the carrying value of the 2021 PIK Notes. The excess carrying value attributable to the remaining 2021 Notes is being amortized under the effective interest method over the term of the 2021 Notes. At September 30, 2018, $0.5 million of the excess remained as part of the carrying value of the 2021 Notes and the Company recognized $132,000 of amortization expense as a reduction to interest expense during the nine months ended September 30, 2018. The indentures governing the 2021 PIK Notes and the 2021 Notes contain affirmative and negative covenants that, among other things, limit the ability of the Company and the subsidiary guarantors of the 2021 PIK Notes and the 2021 Notes to incur indebtedness; purchase or redeem stock; make certain investments; create liens that secure debt; enter into transactions with affiliates; sell assets; refinance certain indebtedness; merge with or into other companies or transfer substantially all of their assets; and, in certain circumstances, to pay dividends or make other distributions on stock. The 2021 PIK Notes and the 2021 Notes are fully and unconditionally guaranteed on a senior basis, jointly and severally, by certain wholly-owned subsidiaries of the Company. The 2021 PIK Notes and the 2021 Notes are secured equally and ratably by second-priority liens on substantially all of the Company's and the subsidiary guarantors' oil and gas properties and substantially all of their other assets to the extent such properties and assets secure the Multidraw Term Loan Agreement (as defined below), except for certain excluded assets. Pursuant to the terms of an intercreditor agreement, the security interest in those properties and assets that secure the 2021 PIK Notes and the 2021 Notes and the guarantees are contractually subordinated to liens that secure the Multidraw Term Loan Agreement and certain other permitted indebtedness. Consequently, the 2021 PIK Notes and the 2021 Notes and the guarantees will be effectively subordinated to the Multidraw Term Loan Agreement and such other indebtedness to the extent of the value of such assets. On October 17, 2016, the Company entered into a multidraw term loan agreement (the "Old Loan Agreement") with Franklin Custodian Funds - Franklin Income Fund, as a lender, and Wells Fargo Bank, National Association, as administrative agent (the "Agent"), replacing the prior credit agreement with JPMorgan Chase Bank, N.A. Effective August 14, 2018, the Company and certain of its subsidiaries entered into a Forbearance Agreement (the "Forbearance Agreement") with the Agent for the lenders with respect to the Old Loan Agreement. Pursuant to the Forbearance Agreement, the Agent and the lenders under the Old Loan Agreement agreed to forbear from taking any action with respect to certain specified events of default occurring under the Old Loan Agreement as a result of non-payment by the Company of interest with respect to the 2021 PIK Notes and 2021 Notes when due and payable on August 15, 2018 under the indentures governing those notes. On August 31, 2018, the Company and PetroQuest Energy, L.L.C. entered into a new Multidraw Term Loan Agreement (the "Multidraw Term Loan Agreement"), which replaced the Old Loan Agreement with the lenders party thereto from time to time (the "Lenders") and the Agent. The Multidraw Term Loan Agreement provides a multi-advance term loan facility in the principal amount of up to $50.0 million. The loans drawn under the Multidraw Term Loan Agreement (collectively, the "Term Loans") may be used to repay existing debt,to pay transaction fees and expenses, to provide working capital for exploration and production operations and for general corporate purposes. On August 31, 2018, the Company borrowed $50.0 million under the Term Loans, and repaid $32.5 million of outstanding borrowings under the Old Loan Agreement, plus accrued interest and fees, and retained the balance of the borrowings for general corporate purposes. As a result, as of September 30, 2018, the Company had no borrowing availability under the Multidraw Term Loan Agreement. The Company’s obligations under the Multidraw Term Loan Agreement and the Term Loans are secured by a first priority lien on substantially all of the assets of the Company and certain of its subsidiaries, including a lien on all equipment and at least 90% of the aggregate total value of the oil and gas properties of the Company and its subsidiaries, a lien on certain undeveloped acreage, a pledge of the equity interests of PetroQuest Energy, L.L.C. (the "Borrower") and certain of the Company’s other subsidiaries, and corporate guarantees of the Company and certain of the Company’s other subsidiaries of the indebtedness of the Borrower. Term Loans under the Multidraw Term Loan Agreement bear interest at the rate of 10% per annum. The Company and its subsidiaries are subject to a restrictive covenant under the Multidraw Term Loan Agreement, consisting of maintaining a ratio of (i) the present value, discounted at 10% per annum, of the estimated future net revenues in respect of the Company’s and its subsidiaries’ oil and gas properties, before any state, federal, foreign or other income taxes, attributable to total proved reserves, using three-year strip prices in effect at the end of each calendar quarter, including swap agreements in place at the end of each quarter, to (ii) the sum of the outstanding Term Loans and the then outstanding commitments to provide Term Loans, that shall not be less than (a) 1.4 to 1.0 as measured on September 30, 2018, and (b) 1.5 to 1.0 as measured on December 31, 2018 and the last day of each calendar quarter thereafter (the "Coverage Ratio"). If the Coverage Ratio is less than 1.4 to 1.0 as of September 30, 2018 or less than 1.5 to 1.0 as of December 31, 2018 or any quarterly measurement date thereafter, the Company may, at its option, prepay outstanding Term Loans or permanently reduce the then outstanding Term Loan Commitments (i.e. the available borrowings) under the Multidraw Term Loan Agreement, or a combination thereof, by a proportionate amount. As of September 30, 2018, the Coverage Ratio was greater than 1.4 to 1.0. Sales of the Company’s and its subsidiaries’ oil and gas properties outside the ordinary course of business are limited under the terms of the Multidraw Term Loan Agreement. In addition, the Multidraw Term Loan Agreement prohibits the Company from declaring and paying dividends on its Series B Preferred Stock. The Multidraw Term Loan Agreement also includes restrictions with respect to debt, liens, dividends, distributions and redemptions, investments, loans and advances, nature of business, international operations and foreign subsidiaries, leases, sale or discount of receivables, mergers or consolidations, sales of properties, transactions with affiliates, negative pledge agreements, gas imbalances and swap agreements. Effective September 14, 2018, the Company and certain of its subsidiaries entered into a Forbearance Agreement (the "Loan Forbearance Agreement") with the Agent for the lenders with respect to the Multidraw Term Loan Agreement. Pursuant to the Loan Forbearance Agreement, the Agent and Lenders agreed to forbear from taking any action with respect to certain anticipated events of default occurring under the Multidraw Term Loan Agreement as a result of the non-payment of interest with respect to the 2021 Notes and 2021 PIK Notes when due and payable on August 15, 2018 and such non-payment continuing for a period of 30 days under the indentures governing the notes. The Loan Forbearance Agreement was effective from September 14, 2018 until the earlier of (i) 11:59 p.m. Eastern time on September 28, 2018 or (ii) the occurrence of any specified forbearance default, which includes, among other things, any event of default under the Multidraw Term Loan Agreement other than the anticipated events of default or a breach by the Company or certain of its subsidiaries of the Loan Forbearance Agreement. On September 28, 2018, October 5, 2018, October 19, 2018 and October 31, 2018, the Company and certain of its subsidiaries, the Agent and the Lenders entered into first, second, third and fourth amendments to the Loan Forbearance Agreement that extended the September 28, 2018 deadline to 11:59 p.m. Eastern time on each of October 5, 2018, October 19, 2018, October 31, 2018 and November 6, 2018, respectively. The Loan Forbearance Agreement terminated on the commencement of the Chapter 11 Cases described in Note 2. Effective September 14, 2018, the Company and certain of its subsidiaries entered into (i) a Forbearance Agreement (the "2021 Notes Forbearance Agreement") with certain holders (the "2021 Notes Supporting Holders") of approximately $7.3 million in aggregate principal amount (representing approximately 77.9% of the outstanding principal amount) of the 2021 Notes, and (ii) a Forbearance Agreement (the "2021 PIK Notes Forbearance Agreement" and together with the 2021 Notes Forbearance Agreement, the "Notes Forbearance Agreements") with certain holders (the "2021 PIK Notes Supporting Holders" and together with the 2021 Notes Supporting Holders, the "Supporting Holders") of approximately $194.6 million in aggregate principal amount (representing approximately 70.7% of the outstanding principal amount) of the 2021 PIK Notes. Pursuant to the Notes Forbearance Agreements, the Supporting Holders agreed to forbear from exercising their rights and remedies under their respective indentures governing the 2021 Notes and the 2021 PIK Notes or the related security documents with respect to certain anticipated events of default occurring under the indentures as a result of the non-payment by the Company of interest with respect to the 2021 Notes and the 2021 PIK Notes when due and payable on August 15, 2018 and such non-payment continuing for a period of 30 days, until the earlier of (i) 11:59 p.m. Eastern time on September 28, 2018 and (ii) the date the Notes Forbearance Agreements otherwise terminate in accordance with the terms therein (the “Forbearance Period”). Pursuant to the Notes Forbearance Agreements, the Supporting Holders agreed to not deliver any notice or instruction in respect of the exercise of any of the rights and remedies otherwise available under the Indenture or the related security documents with respect to such anticipated events of default. The Supporting Holders also agreed to not transfer any ownership in the 2021 Notes and the 2021 PIK Notes held by any of the Supporting Holders during the Forbearance Period other than to potential transferees currently parties to, or who agree in writing to be bound by, the Notes Forbearance Agreements. On September 28, 2018, October 5, 2018, October 19, 2018 and October 31, 2018, the Company and certain of its subsidiaries, and the Supporting Holders entered into first, second, third and fourth amendments to the Notes Forbearance Agreements that extended the September 28, 2018 deadline to 11:59 p.m. Eastern time on each of October 5, 2018, October 19, 2018, October 31, 2018 and November 6, 2018, respectively. The Notes Forbearance Agreements terminated on the commencement of the Chapter 11 Cases described in Note 2. The 2021 Notes are reflected net of $0.2 million of related unamortized financing costs as of September 30, 2018 and December 31, 2017 and the Term Loans are reflected net of $0.3 million and $2.0 million of related unamortized financing costs as of September 30, 2018 and December 31, 2017, respectively. The following table reconciles the face value of the 2021 Notes, 2021 PIK Notes and Term Loans to the carrying value included in the Company's Consolidated Balance Sheet as of September 30, 2018 and December 31, 2017 (in thousands):
The commencement of the Chapter 11 Cases, described in Note 2 above, constitutes an event of default that accelerated the obligations under the Multidraw Term Loan Agreement and the indentures governing the 2021 Notes and 2021 PIK Notes. The Multidraw Term Loan Agreement and the indentures governing the 2021 Notes and 2021 PIK Notes provide that as a result of the Petition, the principal and interest due thereunder shall be immediately due and payable. However, any efforts to enforce such payment obligations under such debt instruments will be automatically stayed as a result of the Chapter 11 Cases, and the creditors’ rights of enforcement in respect of such debt instruments will be subject to the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. |
Asset Retirement Obligation |
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Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation | Asset Retirement Obligation The following table describes the changes to the Company’s asset retirement obligation liability (in thousands):
The divestiture of oil and gas properties during 2018 totaling $28.2 million relates to the sale of the Company's Gulf of Mexico assets. The liabilities incurred, revisions in estimated cash flows and divestitures represent non-cash investing activities for purposes of the statement of cash flows. |
Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments The Company seeks to reduce its exposure to commodity price volatility by hedging a portion of its production through commodity derivative instruments. When the conditions for hedge accounting are met, the Company may designate its commodity derivatives as cash flow hedges. The changes in fair value of derivative instruments that qualify for hedge accounting treatment are recorded in other comprehensive income (loss) until the hedged oil or natural gas quantities are produced. If a derivative does not qualify for hedge accounting treatment, the changes in the fair value of the derivative are recorded in the income statement as derivative income (expense). At September 30, 2018, the Company had no outstanding derivative contracts. Oil and gas sales include additions related to the settlement of oil hedges of ($401,000) and $618,000 for the three months ended September 30, 2018 and 2017, respectively. Oil and gas sales include additions (reductions) related to the settlement of gas hedges of $805,000 and $0 and oil hedges of ($1,026,000) and $404,000 for the nine months ended September 30, 2018 and 2017, respectively. On June 14, 2018, the Company's hedging counterparty, Koch Supply & Trading, LP, terminated the only outstanding hedge contract resulting in a settlement of $0.5 million. The settlement at the termination date remained in accumulated other comprehensive loss and is being reclassified to earnings as the hedged volumes are produced over the original term of the contract. Derivatives designated as hedging instruments: The following tables reflect the fair value of the Company’s effective cash flow hedges in the consolidated financial statements (in thousands): Effect of Cash Flow Hedges on the Consolidated Balance Sheets at September 30, 2018 and December 31, 2017:
Effect of Cash Flow Hedges on the Consolidated Statements of Operations and Comprehensive Loss for the three months ended September 30, 2018 and 2017:
Effect of Cash Flow Hedges on the Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2018 and 2017:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements As defined in ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. As presented in the tables below, this hierarchy consists of three broad levels:
The Company classifies its commodity derivatives based upon the data used to determine fair value. The Company’s derivative instruments at December 31, 2017 were in the form of swaps based on NYMEX pricing for oil and natural gas. The fair value of these derivatives were derived using an independent third-party’s valuation model that utilizes market-corroborated inputs that are observable over the term of the derivative contract. The Company’s fair value calculations also incorporate an estimate of the counterparties’ default risk for derivative assets and an estimate of the Company’s credit risk for derivative liabilities. As a result, the Company designates its commodity derivatives as Level 2 in the fair value hierarchy. The following table summarizes the fair value of the Company’s derivatives subject to fair value measurement on a recurring basis as of September 30, 2018 and December 31, 2017 (in thousands):
The fair value of the Company's cash and cash equivalents approximated book value at September 30, 2018 and December 31, 2017. The fair value of the Term Loans was determined using Level 2 inputs and approximated face value as of September 30, 2018 and December 31, 2017. The fair value of the 2021 Notes and 2021 PIK Notes was determined based upon market quotes provided by an independent broker, which represent a Level 2 input. The following table summarizes the fair value, carrying value and face value of the 2021 Notes and 2021 PIK Notes as of September 30, 2018 and December 31, 2017 (in thousands):
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Income Taxes |
9 Months Ended |
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Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company typically provides for income taxes at a statutory rate adjusted for permanent differences expected to be realized, primarily statutory depletion, non-deductible stock compensation expenses and state income taxes. As a result of ceiling test write-downs recognized, the Company has incurred a cumulative three year loss. Because of the impact the cumulative loss has on the determination of the recoverability of deferred tax assets through future earnings, the Company assessed the realizability of its deferred tax assets based on the future reversals of existing deferred tax liabilities. Accordingly, the Company established a valuation allowance for a portion of the deferred tax asset. The valuation allowance was $117.5 million and $115.9 million as of September 30, 2018 and December 31, 2017, respectively. The Tax Cuts and Jobs Act (the "Act") was enacted on December 22, 2017. The Act, among other things, reduces the U.S. federal corporate tax rate from 35% to 21%, eliminates the corporate alternative minimum tax and changes how existing alternative minimum tax credits are realized, creates a new limitation on deductible interest expense and changes the rules related to uses and limitations of net operating loss carryforwards generated in tax years beginning after December 31, 2017. The Company made a reasonable estimate of the effects on its existing deferred tax balances and recognized a provisional amount of $64.9 million as of December 31, 2017 to remeasure deferred tax assets and liabilities based on the rate at which they are expected to reverse in the future, which is generally 21%. This amount was included as a component of income tax expense (benefit) from continuing operations and was fully offset by the related adjustment to the Company's valuation allowance. The Company finalized its accounting for the Act in connection with the filing of its 2017 federal tax return and determined no adjustment was necessary to the previously recognized provisional amount. |
Other Comprehensive Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income | Other Comprehensive Income The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the three month period ended September 30, 2018 (in thousands):
The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the nine month period ended September 30, 2018 (in thousands):
The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the three month period ended September 30, 2017 (in thousands):
The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the nine month period ended September 30, 2017 (in thousands):
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Recently Issued Accounting Standards |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” to clarify the principles for recognizing revenue and to develop a common revenue standard and disclosure requirements. The core principle of ASU 2014-09 is that an entity will recognize revenue when it transfers control of goods or services to customers at an amount that reflects the consideration to which it expects to be entitled in exchange for those goods and or services. In August 2015, the FASB issued ASU 2015-14 deferring the effective date of ASU 2014-09 by one year to interim and annual periods beginning on or after December 31, 2017. Entities can choose to apply the standard using either a full retrospective approach or a modified retrospective approach, with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. The Company adopted the new standard effective January 1, 2018 using the modified retrospective approach, which resulted in no cumulative effect adjustment upon adoption. The Company’s sources of revenue are oil, natural gas and NGL production from its oil and gas properties. Oil and natural gas production is typically sold to purchasers through monthly contracts at negotiated sales prices based on published market indices. The sale takes place at the wellhead for oil production and at the wellhead or gas processing plant for natural gas. NGL production is sold once natural gas is processed and the related liquids are removed at the processing plant. The contracts for sale of NGL production are with the processing plant with prices based on what the processing plant is able to receive from third party purchasers. Sales of oil, natural gas and NGL production are recognized when the product is delivered and title transfers to the purchaser and payment is generally received one to two months after the sale has occurred. The Company had $6.8 million of revenue receivable at September 30, 2018, comprised of $1.8 million of oil revenue, $3.5 million of natural gas revenue and $1.5 million of NGL revenue. The following table includes a disaggregation of revenue by product including the effects of hedges in place (in thousands):
In February 2016, the FASB issued ASU 2016-02, "Leases" (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The standard is effective for public entities for fiscal years beginning after December 15, 2018, and for interim periods within those fiscal years, with earlier application permitted. Upon adoption the lessee will apply the new standard retrospectively to all periods presented or retrospectively using a cumulative effect adjustment in the year of adoption. The Company is currently evaluating the impact of the new standard on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, "Derivative and Hedging," to improve the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its consolidated financial statements and make certain targeted improvements to simplify the application of the hedge accounting guidance in current US GAAP. ASU 2017-12 is effective for public entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with earlier application permitted. The Company is currently evaluating the effect that this new standard may have on its consolidated financial statements. |
Basis of Presentation (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” to clarify the principles for recognizing revenue and to develop a common revenue standard and disclosure requirements. The core principle of ASU 2014-09 is that an entity will recognize revenue when it transfers control of goods or services to customers at an amount that reflects the consideration to which it expects to be entitled in exchange for those goods and or services. In August 2015, the FASB issued ASU 2015-14 deferring the effective date of ASU 2014-09 by one year to interim and annual periods beginning on or after December 31, 2017. Entities can choose to apply the standard using either a full retrospective approach or a modified retrospective approach, with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. The Company adopted the new standard effective January 1, 2018 using the modified retrospective approach, which resulted in no cumulative effect adjustment upon adoption. The Company’s sources of revenue are oil, natural gas and NGL production from its oil and gas properties. Oil and natural gas production is typically sold to purchasers through monthly contracts at negotiated sales prices based on published market indices. The sale takes place at the wellhead for oil production and at the wellhead or gas processing plant for natural gas. NGL production is sold once natural gas is processed and the related liquids are removed at the processing plant. The contracts for sale of NGL production are with the processing plant with prices based on what the processing plant is able to receive from third party purchasers. Sales of oil, natural gas and NGL production are recognized when the product is delivered and title transfers to the purchaser and payment is generally received one to two months after the sale has occurred. The Company had $6.8 million of revenue receivable at September 30, 2018, comprised of $1.8 million of oil revenue, $3.5 million of natural gas revenue and $1.5 million of NGL revenue. The following table includes a disaggregation of revenue by product including the effects of hedges in place (in thousands):
In February 2016, the FASB issued ASU 2016-02, "Leases" (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The standard is effective for public entities for fiscal years beginning after December 15, 2018, and for interim periods within those fiscal years, with earlier application permitted. Upon adoption the lessee will apply the new standard retrospectively to all periods presented or retrospectively using a cumulative effect adjustment in the year of adoption. The Company is currently evaluating the impact of the new standard on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, "Derivative and Hedging," to improve the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its consolidated financial statements and make certain targeted improvements to simplify the application of the hedge accounting guidance in current US GAAP. ASU 2017-12 is effective for public entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with earlier application permitted. The Company is currently evaluating the effect that this new standard may have on its consolidated financial statements. |
Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
A reconciliation between basic and diluted earnings per share computations | A reconciliation between the basic and diluted earnings per share computations (in thousands, except per share amounts) is as follow:
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Long-Term Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following table reconciles the face value of the 2021 Notes, 2021 PIK Notes and Term Loans to the carrying value included in the Company's Consolidated Balance Sheet as of September 30, 2018 and December 31, 2017 (in thousands):
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Asset Retirement Obligation (Tables) |
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Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes to the Company's asset retirement obligation liability | The following table describes the changes to the Company’s asset retirement obligation liability (in thousands):
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Derivative Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of Cash Flow Hedges on the Consolidated Balance Sheet | Effect of Cash Flow Hedges on the Consolidated Balance Sheets at September 30, 2018 and December 31, 2017:
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Effect of Cash Flow Hedges on the Consolidated Statement of Operations | Effect of Cash Flow Hedges on the Consolidated Statements of Operations and Comprehensive Loss for the three months ended September 30, 2018 and 2017:
Effect of Cash Flow Hedges on the Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2018 and 2017:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net valuation of the Company's derivatives subject to fair value measurement on a recurring basis | The following table summarizes the fair value of the Company’s derivatives subject to fair value measurement on a recurring basis as of September 30, 2018 and December 31, 2017 (in thousands):
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Fair value of debt instruments | The following table summarizes the fair value, carrying value and face value of the 2021 Notes and 2021 PIK Notes as of September 30, 2018 and December 31, 2017 (in thousands):
|
Other Comprehensive Income (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the three month period ended September 30, 2018 (in thousands):
The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the nine month period ended September 30, 2018 (in thousands):
The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the three month period ended September 30, 2017 (in thousands):
The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the nine month period ended September 30, 2017 (in thousands):
|
Recently Issued Accounting Standards (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table includes a disaggregation of revenue by product including the effects of hedges in place (in thousands):
|
Equity - Common Stock (Details) - shares shares in Millions |
1 Months Ended | |
---|---|---|
Dec. 28, 2017 |
Dec. 31, 2017 |
|
Austin Chalk Acreage | ||
Class of Stock [Line Items] | ||
Common shares issued in connection with acquisition (in shares) | 2.0 | |
10% Senior Secured Notes due 2021 | ||
Class of Stock [Line Items] | ||
Shares issued (in shares) | 2.2 | 2.2 |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
A reconciliation between basic and diluted earnings per share computations | ||||
Loss available to common stockholders | $ (4,979) | $ (3,085) | $ (9,802) | $ (11,387) |
Net income (loss) available to common stockholders (in shares) | 25,587 | 21,230 | 25,565 | 21,222 |
Net income (loss) available to common stockholders (in dollars per share) | $ (0.19) | $ (0.15) | $ (0.38) | $ (0.54) |
Stock options, Effect of dilutive securities | $ 0 | $ 0 | $ 0 | |
Stock options, effect of dilutive securities, (in shares) | 0 | 0 | 0 | |
Attributable to participating securities | $ 0 | $ 0 | $ 0 | |
Restricted stock, effect of dilutive securities (in shares) | 0 | 0 | 0 | 0 |
DILUTED EPS, Income (Loss) | $ (4,979) | $ (3,085) | $ (9,802) | $ (11,387) |
DILUTED EPS (in shares) | 25,587 | 21,230 | 25,565 | 21,222 |
DILUTED EPS (in dollars per share) | $ (0.19) | $ (0.15) | $ (0.38) | $ (0.54) |
Earnings Per Share - Narrative (Details) - shares shares in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Common Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 1.9 | 1.9 | 2.0 | 2.0 |
Unvested Restricted Common Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 1.4 | 1.4 | 1.4 | 1.4 |
Convertible preferred stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 1.3 | 1.3 | 1.3 | 1.3 |
Long-Term Debt - Face Value to Carrying Value Reconciliation (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Instrument [Line Items] | ||
Face Value | $ 284,473 | $ 272,629 |
Carrying Value | 334,500 | |
Senior Notes | 10% Senior Secured Notes due 2021 | ||
Debt Instrument [Line Items] | ||
Face Value | 9,427 | 9,427 |
Unamortized Deferred Financing Costs | (193) | (212) |
Excess (Shortfall) Carrying Value | 473 | 606 |
Carrying Value | 9,707 | 9,821 |
Payment in Kind (PIK) Note | 10% Senior Secured PIK Notes due 2021 | ||
Debt Instrument [Line Items] | ||
Face Value | 275,046 | 263,202 |
Unamortized Deferred Financing Costs | 0 | 0 |
Excess (Shortfall) Carrying Value | (425) | (508) |
Accrued PIK Interest | 0 | 8,883 |
Carrying Value | 274,621 | 271,577 |
Line of Credit | Term Loan | ||
Debt Instrument [Line Items] | ||
Face Value | 50,000 | 30,000 |
Unamortized Deferred Financing Costs | (284) | (2,037) |
Excess (Shortfall) Carrying Value | 0 | 0 |
Carrying Value | $ 49,716 | $ 27,963 |
Asset Retirement Obligation (Details) - USD ($) $ in Thousands |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Changes to the Company's asset retirement obligation liability | |||
Asset retirement obligation, beginning of period | $ 31,310 | $ 36,610 | |
Liabilities incurred | 7 | 574 | |
Liabilities settled | (503) | (2,486) | |
Accretion expense | 282 | 1,671 | |
Revisions in estimates | (66) | (161) | |
Divestiture of oil and gas properties | (28,234) | (248) | |
Asset retirement obligation, end of period | 2,796 | 35,960 | |
Less: current portion of asset retirement obligation | (459) | (1,630) | $ (687) |
Long-term asset retirement obligation | 2,337 | $ 34,330 | $ 30,623 |
Gulf Of Mexico Properties | |||
Changes to the Company's asset retirement obligation liability | |||
Divestiture of oil and gas properties | $ (28,200) |
Derivative Instruments - Fair Value of Effective Cash Flow Hedges (Details 1) - Commodity Derivatives - Designated as Hedging Instrument - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Derivative asset | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | $ 1,174 | |
Derivative liability | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability | $ 0 | $ (731) |
Derivative Instruments - Effect of Cash Flow Hedges on the Statement of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain Recognized in Other Comprehensive Income | $ 401 | $ (17) | $ (679) | $ 5,053 |
Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain Recognized in Other Comprehensive Income | 0 | 591 | (990) | 5,636 |
Designated as Hedging Instrument | Oil and gas sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Reclassified into Oil and Gas Sales | $ (401) | $ 618 | $ (222) | $ 404 |
Derivative Instruments - Textual (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Gas hedges | ||||
Derivatives, Fair Value [Line Items] | ||||
Gain or loss recognized in oil and gas contracts | $ 805,000 | $ 0 | ||
Oil hedges | ||||
Derivatives, Fair Value [Line Items] | ||||
Gain or loss recognized in oil and gas contracts | $ (401,000) | $ 618,000 | (1,026,000) | $ 404,000 |
Accrued Liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative liability | $ 500,000 | $ 500,000 |
Income Taxes (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | ||
Cumulative loss period | 3 years | |
Valuation allowance | $ 117.5 | $ 115.9 |
Tax Cuts And Jobs Act Of 2017, incomplete accounting, change in tax rate, provisional income tax expense (benefit) | $ 64.9 |
Recently Issued Accounting Standards (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Disaggregation of Revenue [Line Items] | |||||
Revenue receivable | $ 6,814 | $ 6,814 | $ 15,340 | ||
Revenue | 20,886 | $ 28,184 | 67,310 | $ 73,207 | |
Oil production | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue receivable | 1,800 | 1,800 | |||
Revenue | 5,211 | 7,107 | 17,138 | 21,278 | |
Natural gas production | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue receivable | 3,500 | 3,500 | |||
Revenue | 11,344 | 16,428 | 38,054 | 40,841 | |
Natural gas liquids production | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue receivable | 1,500 | 1,500 | |||
Revenue | $ 4,331 | $ 4,649 | $ 12,118 | $ 11,088 | |
Minimum | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue recognized, period | 1 month | ||||
Maximum | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue recognized, period | 2 months |
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