ý | Annual 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. |
Title of each class | Name of each exchange on which registered | |
None | None |
Large accelerated filer | ¨ | Accelerated filer | ¨ | |||
Non-accelerated filer | x | Smaller reporting company | x | |||
Emerging growth company | ¨ |
Page No. | |
PART I | |
PART II | |
PART III | |
PART IV | |
• | risks and uncertainties associated with our Chapter 11 proceedings; |
• | the likelihood that our Chapter 11 proceedings may have disrupted our business; |
• | the possibility that the assumptions and analyses used to develop our Chapter 11 plan of reorganization may prove to be incorrect; |
• | the likelihood that our historical financial information may no longer be indicative of our future financial performance; |
• | the possibility that our new board of directors may have a different strategy and plan for the Company's future; |
• | the possibility that our anticipated fresh start accounting could result in a ceiling test writedown; |
• | our ability to attract and retain key personnel may be affected by our emergence from bankruptcy; |
• | the volatility of oil and natural gas prices; |
• | our indebtedness and the amount of cash required to service our indebtedness; |
• | our ability to obtain adequate financing when the need arises to execute our long-term strategy and to fund our planned capital expenditures; |
• | limits on our growth and our ability to finance our operations, fund our capital needs and respond to changing conditions imposed by the Exit Facility (as defined below) and restrictive debt covenants; |
• | the effects of a financial downturn or negative credit market conditions on our liquidity, business and financial condition; |
• | our responsibility for offshore decommissioning liabilities for offshore interests we no longer own; |
• | our ability to find, develop, produce and acquire additional oil and natural gas reserves that are economically recoverable; |
• | approximately 44% of our production being exposed to the additional risk of severe weather, including hurricanes and tropical storms, as well as flooding, coastal erosion and sea level rise; |
• | our ability to successfully develop our inventory of undeveloped acreage; |
• | the possibility of a substantial lease renewal cost or the loss of our leases and prospective drilling opportunities that could result from a failure to drill sufficient wells to hold our undeveloped acreage; |
• | Securities and Exchange Commission (sometimes referred to herein as the "SEC") rules that could limit our ability to book proved undeveloped reserves in the future; |
• | the likelihood that our actual production, revenues and expenditures related to our reserves will differ from our estimates of proved reserves; |
• | our ability to identify, execute or efficiently integrate future acquisitions; |
• | losses and liabilities from uninsured or underinsured drilling and operating activities; |
• | ceiling test write-downs resulting, and that could result in the future, from lower oil and natural gas prices; |
• | our ability to market our oil and natural gas production; |
• | changes in laws and governmental regulations and increases in insurance costs or decreases in insurance availability directed toward our business; |
• | regulatory initiatives relating to oil and natural gas development, hydraulic fracturing, and derivatives; |
• | proposed changes to U.S. tax laws; |
• | competition from larger oil and natural gas companies; |
• | the operating hazards attendant to the oil and gas business; |
• | governmental regulation relating to environmental compliance costs and environmental liabilities; |
• | the impact of potential cybersecurity threats; |
• | the loss of our information and computer systems; |
• | the impact of terrorist activities on global economies; |
• | the possibility that the interests of our significant stockholders could be in conflict with the interest of our other stockholders; |
• | no meaningful trading market for our Class A Common Stock and the volatility of the market price for our Class A Common Stock; |
• | the restrictions in our certificate of incorporation and bylaws which could delay or prevent a change of control of our company; and |
• | the restrictions on our ability to pay dividends with respect to our common stock. |
Item 1 and 2. | Business and Properties |
• | Adopted an amended and restated certificate of incorporation and bylaws; |
• | Appointed four new members to the Successor’s board of directors to replace all of the directors of the Predecessor, other than the director also serving as Chief Executive Officer, who was re-appointed pursuant to the Plan; |
• | Canceled all of the Predecessor’s common stock and 6.875% Series B Cumulative Convertible Perpetual Preferred Stock with the former holders thereof not receiving any consideration in respect of such stock; |
• | Issued to the former holders of the Predecessor’s 2021 Notes and 2021 PIK Notes (collectively the “Old Notes”), in exchange for the cancellation and discharge of the Old Notes: |
◦ | 8,900,000 shares of the Successor’s Class A Common Stock; and |
◦ | $80.0 million of the Successor’s 10% Senior Secured PIK Notes due 2024 (the “2024 PIK Notes”); |
• | Issued 300,000 shares of the Successor’s Class A Common Stock to certain former holders of the Old Notes for their commitment to backstop the Exit Facility (as defined below); |
• | Issued to the Class B Holder (as defined in the Successor’s amended and restated certificate of incorporation) one share of the Successor’s Class B Common Stock, which confers certain rights to elect directors and certain drag-along rights; |
• | Issued to the Class C Holder (as defined in the Successor’s amended and restated certificate of incorporation) one share of the Successor’s Class C Common Stock, which confers certain rights to elect directors and certain drag-along rights; |
• | Entered into a new $50 million senior secured Term Loan Agreement (the “Exit Facility”) upon the repayment and termination of the Predecessor’s Multidraw Term Loan Agreement; |
• | Entered into a registration rights agreement (the “Registration Rights Agreement”) with certain holders of the Successor’s Class A Common Stock and 2024 PIK Notes; and |
• | Adopted a new management incentive plan (the “2019 Long Term Incentive Plan”) for officers, directors and employees of the Successor and its subsidiaries, pursuant to which 1,344,000 shares of the Successor’s Class A Common Stock were reserved for issuance. |
Oil (MBbls) | NGL (Mmcfe) | Natural Gas (Mmcf) | Total Mmcfe* | |||||||||
Proved Developed | 567 | 10,220 | 47,516 | 61,143 | ||||||||
Proved Undeveloped | 619 | 6,802 | 58,648 | 69,162 | ||||||||
Total Proved | 1,186 | 17,022 | 106,164 | 130,305 |
* | Oil conversion to Mcfe at one Bbl of crude oil, condensate or natural gas liquids to six Mcf of natural gas. |
12/31/2018 | 12/31/2017 | |
Oil per Bbl | $68.71 | $52.46 |
Natural gas per Mcf | $3.13 | $3.03 |
Ngl per Mcfe | $4.08 | $3.23 |
MMcfe | ||
PUD reserve balance at December 31, 2017 | 79,506 | |
Conversions to proved developed | (6,514 | ) |
Net additions from extensions, discoveries and revisions | 3,494 | |
Divestitures | (7,324 | ) |
PUD reserve balance at December 31, 2018 | 69,162 |
Proved Developed (M$) | Proved Undeveloped (M$) | Total Proved (M$) | ||||||||||
Estimated pre-tax future net cash flows (1) | $ | 131,909 | $ | 105,601 | $ | 237,510 | ||||||
Discounted pre-tax future net cash flows (PV-10) (1) | $ | 87,543 | $ | 36,482 | $ | 124,025 | ||||||
Total standardized measure of discounted future net cash flows | $ | 124,025 |
(1) | Estimated pre-tax future net cash flows and discounted pre-tax future net cash flows (PV-10) are non-GAAP measures because they exclude income tax effects. Management believes these non-GAAP measures are useful to investors as they are based on prices, costs and discount factors that are consistent from company to company, while the standardized measure of discounted future net cash flows is dependent on the unique tax situation of each individual company. As a result, the Company believes that investors can use these non-GAAP measures as a basis for comparison of the relative size and value of the Company’s reserves to other companies. The Company also understands that securities analysts and rating agencies use these non-GAAP measures in similar ways. |
Total Proved (M$) | |||
Estimated pre-tax future net cash flows | $ | 237,510 | |
10% annual discount | 113,485 | ||
Discounted pre-tax future net cash flows | 124,025 | ||
Future income taxes discounted at 10% | — | ||
Standardized Measure of discounted future net cash flows | $ | 124,025 |
2018 | 2017 | |||||||||||
Reserves | Production | Reserves | Production | |||||||||
Gulf Coast | 8.3 | 9.1 | 13.8 | 10.6 | ||||||||
Gulf of Mexico (1) | — | 0.4 | 10.5 | 6.9 | ||||||||
East Texas | 122.0 | 11.8 | 131.6 | 10.1 | ||||||||
130.3 | 21.3 | 155.9 | 27.6 |
• | the extent of domestic production and imports of oil and natural gas; |
• | the proximity of the natural gas production to pipelines; |
• | the availability of capacity in such pipelines; |
• | the demand for oil and natural gas by utilities and other end users; |
• | the availability of alternative fuel sources; |
• | the effects of inclement weather; |
• | state and federal regulation of oil and natural gas production; and |
• | federal regulation of gas sold or transported in interstate commerce. |
Year Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Production: | ||||||||||||
Oil (Bbls): | ||||||||||||
Gulf Coast | 208,162 | 235,639 | 127,344 | |||||||||
Gulf of Mexico (1) | 18,825 | 304,384 | 336,559 | |||||||||
East Texas | 98,961 | 51,529 | 38,154 | |||||||||
Other (2) | — | 6 | 144 | |||||||||
Total Oil (Bbls) | 325,948 | 591,558 | 502,201 | |||||||||
Gas (Mcf): | ||||||||||||
Gulf Coast | 5,986,675 | 7,352,273 | 5,075,444 | |||||||||
Gulf of Mexico (1) | 292,863 | 4,644,749 | 3,521,044 | |||||||||
East Texas | 9,710,072 | 7,617,452 | 6,350,712 | |||||||||
Other (2) | 23,282 | (3,510 | ) | 1,669,378 | ||||||||
Total Gas (Mcf) | 16,012,892 | 19,610,964 | 16,616,578 | |||||||||
NGL (Mcfe): | ||||||||||||
Gulf Coast | 1,866,425 | 1,787,950 | 1,039,368 | |||||||||
Gulf of Mexico (1) | 20,759 | 466,608 | 356,245 | |||||||||
East Texas | 1,479,205 | 2,198,165 | 2,471,936 | |||||||||
Other (2) | — | 94 | 3,398 | |||||||||
Total NGL (Mcfe) | 3,366,389 | 4,452,817 | 3,870,947 | |||||||||
Total Production (Mcfe): | ||||||||||||
Gulf Coast | 9,102,072 | 10,554,057 | 6,878,876 | |||||||||
Gulf of Mexico (1) | 426,572 | 6,937,661 | 5,896,643 | |||||||||
East Texas | 11,783,043 | 10,124,791 | 9,051,572 | |||||||||
Other (2) | 23,282 | (3,380 | ) | 1,673,640 | ||||||||
Total Production (Mcfe) | 21,334,969 | 27,613,129 | 23,500,731 | |||||||||
Average sales prices (3): | ||||||||||||
Oil (per Bbl): | ||||||||||||
Gulf Coast | $ | 70.18 | $ | 53.19 | $ | 40.91 | ||||||
Gulf of Mexico (1) | 65.03 | 52.63 | 41.41 | |||||||||
East Texas | 66.91 | 52.47 | 38.35 | |||||||||
Other (2) | — | 46.38 | 37.85 | |||||||||
Total Oil (per Bbl) | 68.89 | 52.84 | 41.05 | |||||||||
Gas (per Mcf) | ||||||||||||
Gulf Coast | 3.20 | 3.09 | 2.40 | |||||||||
Gulf of Mexico (1) | 3.03 | 3.04 | 2.09 | |||||||||
East Texas | 3.08 | 2.97 | 2.31 | |||||||||
Other (2) | 3.09 | 2.29 | 1.17 | |||||||||
Total Gas (per Mcf) | 3.12 | 3.03 | 2.18 | |||||||||
NGL (per Mcfe) | ||||||||||||
Gulf Coast | 5.14 | 4.45 | 3.18 | |||||||||
Gulf of Mexico (1) | 6.73 | 3.90 | 2.97 | |||||||||
East Texas | 3.77 | 2.88 | 1.50 | |||||||||
Other (2) | — | 3.63 | 5.22 | |||||||||
Total NGL (per Mcfe) | 4.55 | 3.62 | 2.09 | |||||||||
Total Per Mcfe: | ||||||||||||
Gulf Coast | 4.76 | 4.09 | 3.01 | |||||||||
Gulf of Mexico (1) | 5.28 | 4.61 | 3.79 | |||||||||
East Texas | 3.57 | 3.12 | 2.19 | |||||||||
Other (2) | 3.09 | 2.20 | 1.18 |
Total Per Mcfe | 4.11 | 3.87 | 2.76 | |||||||||
Average Production Cost per Mcfe (4): | ||||||||||||
Gulf Coast | 0.67 | 0.67 | 0.70 | |||||||||
Gulf of Mexico (1) | 1.58 | 2.20 | 2.43 | |||||||||
East Texas | 1.16 | 1.08 | 0.89 | |||||||||
Other (2) | 6.77 | 11.55 | 0.80 | |||||||||
Total Average Production Cost per Mcfe | 0.96 | 1.20 | 1.21 |
(1) | In January 2018, we sold all of our Gulf of Mexico assets. |
(2) | Includes Oklahoma-Woodford. |
(3) | Does not include the effect of hedges. |
(4) | Production costs do not include production taxes. |
Gross | Net | ||||
Productive Wells: | |||||
Oil: | |||||
Gulf Coast | 1 | 0.08 | |||
East Texas | — | — | |||
1 | 0.08 | ||||
Gas: | |||||
Gulf Coast | 3 | 1.20 | |||
East Texas | 69 | 41.97 | |||
72 | 43.17 | ||||
Total | 73 | 43.25 |
2018 | 2017 | 2016 | ||||||||||||||||
Gross | Net | Gross | Net | Gross | Net | |||||||||||||
Exploratory: | ||||||||||||||||||
Productive: | ||||||||||||||||||
Gulf Coast Basin | — | — | — | — | — | — | ||||||||||||
East Texas | — | — | 2 | 1.53 | — | — | ||||||||||||
Other (1) | — | — | — | — | — | — | ||||||||||||
— | — | 2 | 1.53 | — | — | |||||||||||||
Non-productive: | ||||||||||||||||||
Gulf Coast Basin | — | — | — | — | — | — | ||||||||||||
East Texas | — | — | — | — | — | — | ||||||||||||
Other (1) | — | — | — | — | — | — | ||||||||||||
— | — | — | — | — | — | |||||||||||||
Total | — | — | 2 | 1.53 | — | — | ||||||||||||
Development: | ||||||||||||||||||
Productive: | ||||||||||||||||||
Gulf Coast Basin | — | — | — | — | — | — | ||||||||||||
East Texas | 2 | 1.47 | 6 | 4.33 | 1 | 0.81 | ||||||||||||
Other (1) | — | — | — | — | 4 | 0.02 | ||||||||||||
2 | 1.47 | 6 | 4.33 | 5 | 0.83 | |||||||||||||
Non-productive: | ||||||||||||||||||
Gulf Coast Basin | — | — | — | — | — | — | ||||||||||||
East Texas | — | — | — | — | — | — | ||||||||||||
Other (1) | — | — | — | — | — | — | ||||||||||||
— | — | — | — | — | — | |||||||||||||
Total | 2 | 1.47 | 6 | 4.33 | 5 | 0.83 |
Leasehold Acreage | ||||||||||||
Developed | Undeveloped | |||||||||||
Gross | Net | Gross | Net | |||||||||
Louisiana | 4,050 | 1,260 | 24,994 | 19,776 | ||||||||
East Texas | 42,843 | 21,746 | 11,310 | 6,725 | ||||||||
Federal Waters | 5,760 | 163 | 5,760 | 5,760 | ||||||||
Total | 52,653 | 23,169 | 42,064 | 32,261 |
• | royalties and other burdens and obligations, express or implied, under oil and gas leases; |
• | overriding royalties and other burdens created by us or our predecessors in title; |
• | a variety of contractual obligations (including, in some cases, development obligations) arising under operating agreements, farmout agreements, production sales contracts and other agreements that may affect the properties or their titles; |
• | back-ins and reversionary interests existing under purchase agreements and leasehold assignments; |
• | liens that arise in the normal course of operations, such as those for unpaid taxes, statutory liens securing obligations to unpaid suppliers and contractors and contractual liens under operating agreements; pooling, unitization and communitization agreements, declarations and orders; and |
• | easements, restrictions, rights-of-way and other matters that commonly affect property. |
• | requirements for obtaining drilling permits; |
• | the method of developing new fields; |
• | the spacing and operation of wells; |
• | the prevention of waste of oil and gas resources; and |
• | the plugging and abandonment of wells. |
Item 1A. | Risk Factors |
• | relatively minor changes in the supply of or the demand for oil and natural gas; |
• | the condition of the United States and worldwide economies; |
• | the level of global exploration and production; |
• | the level of global inventories; |
• | market uncertainty; |
• | the level of consumer product demand; |
• | prevailing prices on local price indices in the areas in which we operate; |
• | the proximity, capacity, cost and availability of gathering and transportation facilities; |
• | weather conditions in the United States, such as hurricanes; |
• | technological advances affecting energy companies; |
• | the actions of the Organization of Petroleum Exporting Countries; |
• | domestic and foreign governmental regulation and taxes, including price controls adopted by the FERC; |
• | political conditions or hostilities in oil and natural gas producing regions, including the Middle East, Africa, South America and Russia; |
• | the effect of worldwide energy conservation and environmental protection efforts; |
• | shareholder activism and activities by non-governmental organizations to restrict the exploration, development and production of oil and natural gas so as to minimize emissions of greenhouse gas; |
• | the price and level of foreign imports of oil and natural gas; and |
• | the price and availability of alternate energy sources. |
• | it may be more difficult for us to satisfy our obligations with respect to our outstanding indebtedness, including amounts borrowed under the Exit Facility and our 2024 PIK Notes, and any failure to comply with the obligations of any of our debt agreements, including financial and other restrictive covenants, could result in an event of default under the agreements governing such indebtedness; |
• | the covenants contained in our debt agreements limit our ability to borrow money in the future for acquisitions, capital expenditures or to meet our operating expenses or other general corporate obligations and may limit our flexibility in operating our business; |
• | we will need to use a portion of our cash flows to pay interest on our debt, including approximately $3.9 million in 2019 for interest on amounts borrowed under the Exit Facility, which will reduce the amount of money we have for operations, capital expenditures, expansion, acquisitions or general corporate or other business activities; |
• | we may have a higher level of debt than some of our competitors, which may put us at a competitive disadvantage; |
• | our 2024 PIK Notes will increase our debt level at each semi-annual interest payment date if we elect not to pay the interest in cash; |
• | we may be more vulnerable to economic downturns and adverse developments in our industry or the economy in general, especially extended or further declines in oil and natural gas prices; and |
• | our debt level could limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate. |
• | borrowings from banks or other lenders; |
• | the sale of certain assets; |
• | the issuance of debt securities; |
• | the sale of common stock, preferred stock or other equity securities; |
• | joint venture financing; and |
• | production payments. |
• | pay dividends or distributions on our capital stock or issue preferred stock; |
• | repurchase, redeem or retire our capital stock or subordinated debt; |
• | make certain loans and investments; |
• | place restrictions on the ability of subsidiaries to make distributions; |
• | sell assets, including the capital stock of subsidiaries; |
• | enter into certain transactions with affiliates; |
• | create or assume certain liens on our assets; |
• | enter into sale and leaseback transactions; |
• | merge or enter into other business combination transactions; |
• | enter into transactions that would result in a change of control of us; or |
• | engage in other corporate activities. |
• | historical production from the area compared with production from other similar producing wells; |
• | the assumed effects of regulations by governmental agencies; |
• | assumptions concerning future oil and natural gas prices; and |
• | assumptions concerning future operating costs, severance and excise taxes, development costs and work-over and remedial costs. |
• | the quantities of oil and natural gas that are ultimately recovered; |
• | the production and operating costs incurred; |
• | the amount and timing of future development expenditures; and |
• | future oil and natural gas sales prices. |
• | the level of domestic production and imports of oil and natural gas; |
• | the proximity of natural gas production to natural gas pipelines; |
• | the availability of pipeline capacity; |
• | the demand for oil and natural gas by utilities and other end users; |
• | the availability of alternate energy sources; |
• | the effect of inclement weather, such as hurricanes; |
• | state and federal regulation of oil and natural gas marketing; and |
• | federal regulation of natural gas sold or transported in interstate commerce. |
• | the availability of funds and information relating to a property; |
• | the standards established by us for the minimum projected return on investment; and |
• | the transportation of natural gas. |
• | unexpected drilling conditions including blowouts, cratering and explosions; |
• | uncontrollable flows of oil, natural gas or well fluids; |
• | equipment failures, fires or accidents; |
• | pollution and other environmental risks; and |
• | shortages in experienced labor or shortages or delays in the delivery of equipment. |
• | require the acquisition of permits before drilling commences; |
• | restrict the types, quantities and concentration of various substances that can be released into the environment from drilling and production activities; |
• | limit or prohibit drilling activities on certain lands lying within wilderness, wetlands and other protected areas; |
• | require remedial measures to mitigate pollution from former operations, such as plugging abandoned wells; and |
• | impose substantial liabilities for pollution resulting from our operations. |
• | permit two groups of our stockholders to elect up to four members of our board of directors and limit the removal of such directors; |
• | authorize our Board of Directors to issue preferred stock and to determine the price and other terms, including preferences and voting rights, of those shares without stockholder approval; |
• | establish advance notice procedures for nominating directors or presenting matters at stockholder meetings; |
• | prohibit cumulative voting; and |
• | restrict certain transfers (including acquisitions and dispositions) of the Company’s securities to assist in the preservation of the Company’s ability to utilize its current and future tax benefits. |
Item 3. | Legal Proceedings |
Item 4. | Mine Safety Disclosures |
• | Adopted an amended and restated certificate of incorporation and bylaws; |
• | Appointed four new members to the Successor’s board of directors to replace all of the directors of the Predecessor, other than the director also serving as Chief Executive Officer, who was re-appointed pursuant to the Plan; |
• | Canceled all of the Predecessor’s common stock and 6.875% Series B Cumulative Convertible Perpetual Preferred Stock with the former holders thereof not receiving any consideration in respect of such stock; |
• | Issued to the former holders of the Predecessor’s 2021 Notes and 2021 PIK Notes (collectively, the “Old Notes”), in exchange for the cancellation and discharge of the Old Notes: |
◦ | 8,900,000 shares of the Successor’s Class A Common Stock; and |
◦ | $80.0 million of the Successor’s 10% Senior Secured PIK Notes due 2024 (the “2024 PIK Notes”); |
• | Issued 300,000 shares of the Successor’s Class A Common Stock to certain former holders of the Old Notes for their commitment to backstop the Exit Facility (as defined below); |
• | Issued to the Class B Holder (as defined in the Successor’s amended and restated certificate of incorporation) one share of the Successor’s Class B Common Stock, which confers certain rights to elect directors and certain drag-along rights; |
• | Issued to the Class C Holder (as defined in the Successor’s amended and restated certificate of incorporation) one share of the Successor’s Class C Common Stock, which confers certain rights to elect directors and certain drag-along rights; |
• | Entered into a new $50 million senior secured Term Loan Agreement (the “Exit Facility”) upon the repayment and termination of the Predecessor’s Multidraw Term Loan Agreement; |
• | Entered into a registration rights agreement (the “Registration Rights Agreement”) with certain holders of the Successor’s Class A Common Stock and 2024 PIK Notes; and |
• | Adopted a new management incentive plan (the “2019 Long Term Incentive Plan”) for officers, directors and employees of the Successor and its subsidiaries, pursuant to which 1,344,000 shares of the Successor’s Class A Common Stock were reserved for issuance. |
December 31, 2018 | |||
10% Senior PIK Notes due 2021 | $ | 275,046 | |
10% Senior Notes due 2021 | 9,427 | ||
Accrued interest | 20,624 | ||
Accounts payable to vendors | 874 | ||
Other long-term liabilities | 510 | ||
Other accrued liabilities | 2,724 | ||
Preferred stock dividend payable | 14,649 | ||
Liabilities subject to compromise | $ | 323,854 |
Year Ended December 31, | |||||||
2018 | 2017 | ||||||
Production: | |||||||
Oil (Bbls) | 325,948 | 591,558 | |||||
Gas (Mcf) | 16,012,892 | 19,610,964 | |||||
Ngl (Mcfe) | 3,366,389 | 4,452,817 | |||||
Total Production (Mcfe) | 21,334,969 | 27,613,129 | |||||
Sales: | |||||||
Total oil sales | $ | 21,027,470 | $ | 31,258,109 | |||
Total gas sales | 50,768,159 | 60,922,072 | |||||
Total ngl sales | 15,303,178 | 16,107,068 | |||||
Total oil and gas sales | $ | 87,098,807 | $ | 108,287,249 | |||
Average sales prices: | |||||||
Oil (per Bbl) | $ | 64.51 | $ | 52.84 | |||
Gas (per Mcf) | 3.17 | 3.11 | |||||
Ngl (per Mcfe) | 4.55 | 3.62 | |||||
Per Mcfe | 4.08 | 3.92 |
Year ended | Percent of Total | |||||
December 31, 2017 | Company | |||||
Production: | ||||||
Oil (Bbls) | 304,384 | 51 | % | |||
Gas (Mcf) | 4,644,749 | 24 | % | |||
Ngl (Mcfe) | 466,608 | 10 | % | |||
Total Production (Mcfe) | 6,937,661 | 25 | % | |||
Sales: | ||||||
Total oil sales | $ | 16,021,023 | 51 | % | ||
Total gas sales | 14,135,290 | 23 | % | |||
Total ngl sales | 1,821,102 | 11 | % | |||
Total oil and gas sales | $ | 31,977,415 | 30 | % |
Item 8. | Financial Statements and Supplementary Data |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
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. |
Item 9B. | Other Information |
• | On the Effective Date and pursuant to the terms of the Plan and the Confirmation Order, the Class B Holder (as defined in our amended and restated certificate of incorporation) was issued one share of Class B Common Stock. The Class B Holder has the right to elect two directors. The initial term of such directors is the Initial Term, and the Class B Holder will continue to have the right to elect two directors for so long as Corre (as defined in our amended and restated certificate of incorporation) holds at least 20% of the then-outstanding Class A Common Stock (excluding shares of Class A Common Stock issued pursuant to an incentive plan or other incentive arrangement approved by the Board). If Corre holds less than 20% of the then-outstanding Class A Common Stock, the Class B Holder will have the right to elect one director for so long as Corre holds at least 10% of the then-outstanding Class A Common Stock (excluding any shares of Class A Common Stock issued pursuant to an incentive plan or other incentive arrangement approved by the Board). Harry F. Quarls and J. Bradley Juneau are the directors that have been elected by the Class B Holder. |
• | On the Effective Date and pursuant to the terms of the Plan and the Confirmation Order, the Class C Holder (as defined in our amended and restated certificate of incorporation) was issued one share of Class C Common Stock. The Class C Holder has the right to elect two directors. The initial term of such directors is the Initial Term, and the Class C Holder will continue to have the right to elect two directors for so long as MacKay (as defined in our amended and restated certificate of incorporation) holds at least 20% of the then-outstanding Class A Common Stock (excluding shares of Class A Common Stock issued pursuant to an incentive plan or other incentive arrangement approved by the Board). If MacKay holds less than 20% of the then-outstanding Class A Common Stock, the Class C Holder will have the right to elect one director for so long as MacKay holds at least 10% of the then-outstanding Class A Common Stock (excluding any shares of Class A Common Stock issued pursuant to an incentive plan or other incentive arrangement approved by the Board). Neal P. Goldman and David I. Rainey are the directors that have been elected by the Class C Holder. |
• | One director will be elected by the holders of a plurality in voting power of the outstanding shares of Class A Common Stock, who initially is the Chief Executive Officer (such Chief Executive Officer to serve as a member of the Board for the Initial Term). |
Summary Compensation Table for Fiscal Years Ended December 31, 2018 and 2017 | ||||||||||||||||
Name and Principal Position | Year | Salary ($) (1) | Bonus ($) (2) | Stock Awards including Stock Units($) (3) | Option Awards ($) (3) | Non-Equity Incentive Plan Compen-sation ($) (4) | All Other Compen-sation ($) (5) | Total ($) | ||||||||
Charles T. Goodson | 2018 | 668,367 | 221,520 | 8,858 | 0 | 211,971 | 66,635 | 1,177,351 | ||||||||
Chief Executive Officer | 2017 | 668,367 | 105,029 | 593,041 | 24,486 | 188,891 | 81,663 | 1,661,477 | ||||||||
and President | ||||||||||||||||
J. Bond Clement | 2018 | 394,748 | 57,500 | 2,705 | 0 | 125,209 | 40,308 | 620,470 | ||||||||
Executive Vice President, Chief | 2017 | 394,747 | 62,032 | 319,936 | 14,463 | 57,508 | 45,497 | 894,183 | ||||||||
Financial Officer and Treasurer | ||||||||||||||||
Arthur M. Mixon, III | 2018 | 394,748 | 57,500 | 2,766 | 0 | 124,709 | 51,174 | 630,897 | ||||||||
Executive Vice President – | 2017 | 394,747 | 62,032 | 319,936 | 14,463 | 57,009 | 49,884 | 898,071 | ||||||||
Operations and Production |
(1) | Effective January 1, 2017, the annual base salaries of Messrs. Goodson, Clement and Mixon were increased to $668,367, $394,747, and $394,747, respectively. |
(2) | In 2017, the Compensation Committee awarded a discretionary cash bonus of 16.5% of 2016 base salary to each of the named executive officers in recognition of their efforts with respect to the ongoing execution of the company’s operations and financial strategies as established by the Board. In recognition of Mr. Goodson's efforts with respect to recent joint ventures, the Committee awarded him an additional discretionary bonus of $91,520 in February of 2018. On November 5, 2018, the Company awarded discretionary bonuses of $130,000, $57,500 and $57,500 to Messrs. Goodson, Clement and Mixon, respectively. See "- Named Executive Officer Compensation Arrangements-2018 Annual Cash Bonus Plan” below. |
(3) | The amounts in the “Stock Awards” and “Option Awards” columns reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, of awards pursuant to the 2013 Incentive Plan, 2016 Incentive Plan and the Long-Term Cash Incentive Plan. Assumptions used in the calculation of these amounts are included in “Note 6 – Share-Based Compensation”. As discussed above under Items 1 and 2. "Business and Properties-Voluntary Reorganization under Chapter 11 of the Bankruptcy Code”, on the Effective Date and pursuant to the terms of the Plan and the Confirmation Order, all of the Predecessor’s common stock and any share-based compensation based on such common stock was cancelled with the former holders thereof not receiving any consideration in respect thereof. |
(4) | In January 2018, the Compensation Committee approved the scorecard under the Annual Cash Bonus Plan, with a payout of approximately 30% of salary to Messrs. Goodson, Clement and Mixon, respectively. |
(5) | See table below for reconciliation of All Other Compensation for 2018. |
Name | 401(k) Matching Contribution | Medical and Dental Insurance | Life Insurance Premiums | Organization Dues | Total | |||||||||||||||
Charles T. Goodson | $ | 16,500 | $ | 16,366 | $ | 31,509 | $ | 2,260 | $ | 66,635 | ||||||||||
J. Bond Clement | 8,250 | 23,624 | 7,334 | 1,100 | 40,308 | |||||||||||||||
Arthur M. Mixon, III | 16,500 | 16,366 | 15,951 | 2,357 | 51,174 |
Outstanding Equity Awards at Fiscal Year-End December 31, 2018 | ||||||||||||||||||
Option Awards | Stock Awards | |||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) | ||||||||||
Charles T. Goodson | 27,898 | - | 28.33 | 10/09/2019 | - | - | ||||||||||||
15,441 | - | 30.16 | 09/09/2021 | - | - | |||||||||||||
21,458 | 16.73 | 11/12/2023 | - | - | ||||||||||||||
28,334 | 14,166 | (2) | 4.36 | 3/15/2026 | ||||||||||||||
21,893 | 10,946 | (3) | 3.96 | 9/26/2026 | ||||||||||||||
99,933 | 49,966 | (3) | 3.17 | 9/26/2026 | ||||||||||||||
6,378 | 12,752 | (4) | 1.85 | 11/12/2027 | ||||||||||||||
- | - | - | - | 28,694 | 115 | |||||||||||||
93,216 | (6) | 373 | ||||||||||||||||
(7) | 0 | |||||||||||||||||
J. Bond Clement | 11,817 | - | 28.33 | 10/09/2019 | - | - | ||||||||||||
7,475 | - | 30.16 | 09/09/2021 | - | - | |||||||||||||
9,244 | - | 16.73 | 11/12/2023 | - | - | |||||||||||||
23,334 | 11,666 | (2) | 4.36 | 3/15/2026 | ||||||||||||||
66,667 | 33,334 | (3) | 3.17 | 9/27/2026 | ||||||||||||||
3,767 | 7,532 | (4) | 1.85 | 11/12/2027 | ||||||||||||||
- | - | - | - | 16,947 | 68 | |||||||||||||
49,548 | (6) | 198 | ||||||||||||||||
(7) | 0 | |||||||||||||||||
Arthur M. Mixon, III | 13,739 | - | 28.33 | 10/09/2019 | - | - | ||||||||||||
8,449 | - | 30.16 | 09/09/2021 | - | - | |||||||||||||
9,505 | - | 16.73 | 11/12/2023 | - | - | |||||||||||||
23,334 | 11,666 | (2) | 4.36 | 3/15/2026 | ||||||||||||||
66,667 | 33,333 | (3) | 3.17 | 9/27/2026 | ||||||||||||||
3,767 | 7,532 | (4) | 1.85 | 11/12/2027 | ||||||||||||||
- | - | - | - | 16,947 | 68 | |||||||||||||
49,548 | (6) | 198 | ||||||||||||||||
(7) | 0 |
(1) | Calculated based upon the closing market price of our common stock on December 29, 2018, which was $.004 per share. |
(2) | These options would have vested on March 15, 2019. |
(3) | These options would have vested on September 27, 2019. |
(4) | These options would have vested in two equal installments on each of November 12, 2019 and 2020. |
(5) | These restricted stock units would have vested in two equal installments on each of November 12, 2019 and 2020. |
(6) | Represents phantom stock units awarded on November 12, 2017 and that would have vested in two installments and be paid in cash on each of November 12, 2019 and 2020. |
(7) | Represents performance units awarded on November 12, 2017 that would have vested in three installments and be paid in cash on January 1, 2019, January 1, 2020 and January 1, 2021. |
• | Approximately 41.7% of the RSUs were fully vested upon grant. |
• | Subject to continuing employment on the vesting date, approximately 16.6% of the RSUs will fully vest on the earlier to occur of (i) the one-year anniversary of the Effective Date or (ii) a “Change in Control” (as defined in the participant’s termination agreement). In the event of the termination of a participant’s employment by the Company for any reason (other than for cause) or in the event of the participant’s death or disability, these RSUs will become fully vested. |
• | Subject to continuing employment on the vesting date, approximately 41.7% of the RSUs will fully vest on the earlier to occur of (i) the three-year anniversary of Effective Date, (ii) a Change in Control or (iii) the attainment of a 20-trading day volume-weighted average price of $20.00 per share following the date of grant. In the event of the termination of a participant’s employment for any reason (other than death or disability) prior to vesting, these RSUs will be forfeited. |
Director Compensation for Fiscal Year-End December 31, 2018 | |||||||||
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) (2) | Option Awards ($) (3) | Total ($) | |||||
W. J. Gordon, III | 86,667 | 3,781 | — | 90,448 | |||||
J. Gerard Jolly | 127,500 | 3,781 | — | 131,281 | |||||
Charles F. Mitchell, II, M.D. | 86,667 | 3,781 | — | 90,448 | |||||
E. Wayne Nordberg | 75,500 | 3,781 | — | 79,281 | |||||
William W. Rucks, IV | 93,333 | 3,781 | — | 97,114 |
• | an annual cash retainer of $85,000 to any non-employee Chairman of the Board, payable quarterly in advance and pro-rated for any periods of partial service; and |
• | an annual cash retainer of $70,000 to each non-employee director (other than the Chairman of the Board), payable quarterly in advance and pro-rated for any periods of partial service. |
• | each stockholder known by us to be the beneficial owner of more than five percent of our outstanding shares of Class A common stock, |
• | each current director, |
• | each executive officer named in the Summary Compensation Table, and |
• | all directors and executive officers as a group. |
Shares Beneficially Owned (1) | ||||||
Name and Address of Beneficial Owner (2) | Number | Percent of Class | ||||
MacKay Shields LLC(3) | 4,033,549 | 43.8 | % | |||
Corre Partners Management, LLC(4) | 2,609,842 | 28.4 | % | |||
Hotchkis & Wiley Capital Management, LLC (5) | 929,031 | 10.1 | % | |||
Charles T. Goodson(6) | 158,159 | 1.7 | % | |||
J. Bond Clement(6) | 52,720 | * | ||||
Arthur M. Mixon, III(6) | 52,720 | * | ||||
Neal P. Goldman | 0 | |||||
J. Bradley Juneau | 0 | |||||
Harry F. Quarls | 0 | |||||
David I. Rainey | 0 | |||||
All directors and executive officers as a group (7 persons) | 263,599 | 2.9 | % |
(1) | Except as otherwise indicated, all shares are beneficially owned, and the sole investment and voting power is held, by the person named. This table is based on information supplied by officers, directors and principal stockholders and reporting forms, if any, filed with the SEC on behalf of such persons. Based on 9,200,000 shares outstanding on March 10, 2019. |
(2) | Unless otherwise indicated, the address of all beneficial owners of more than five percent of our shares of Class A common stock set forth above is 400 E. Kaliste Saloom Road, Suite 6000, Lafayette, Louisiana 70508. |
(3) | The address for MacKay Shields LLC (“MacKay”) is 1345 Avenue of Americas, New York, New York 10105. MacKay has sole power to vote or to direct the vote of and sole power to dispose or to direct the disposition of all of the shares. |
(4) | The address for Corre Partners Management, LLC (“Corre”) is 12 East 49th Street, 40th Floor, New York, New York 10017. Corre has sole power to vote or to direct the vote of and sole power to dispose or to direct the disposition of all of the shares. |
(5) | The address for Hotchkis & Wiley Capital Management, LLC (“H&W”) is 725 South Figueroa Street, 39th Floor, Los Angeles, California 90017. H&W has sole power to vote or to direct the vote of 915,570 of the shares and sole power to dispose or to direct the disposition of all of the shares. |
(6) | Number of shares beneficially owned represents fully vested RSUs that will be settled in shares of Class A common stock on the earlier of (i) termination of employment for any reason, (ii) change in control of the Company or (iii) March 25, 2019. |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (2) | ||||||
(a) | (b) | (c) | |||||||
Equity compensation plans approved by security holders | 1,486,823 | $6.34 | 2,000,000 | ||||||
Equity compensation plans not approved by security holders | — | — | — | ||||||
Total | 1,486,823 | $6.34 | 2,000,000 |
(1) | Includes options outstanding under the 1998 Incentive Plan, as amended and restated effective May 14, 2008 (the “1998 Incentive Plan”), the 2013 Incentive Plan and the 2016 Long Term Incentive Plan. The 1998 Incentive Plan and the 2013 Incentive Plan were frozen in May 2013 and May 2016, respectively. |
(2) | Includes 2,000,000 shares of common stock available for issuance under the Amended and Restated 2016 Long Term Incentive Plan as approved by shareholders in May 2018. |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (2) | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (3) | ||||||
(a) | (b) | (c) | |||||||
Equity compensation plans approved by security holders (1) | 1,143,957 | $11.25 | 200,044 | ||||||
Equity compensation plans not approved by security holders | — | — | — | ||||||
Total | 1,143,957 | $11.25 | 200,044 |
(1) | Represent shares of Successor Class A Common Stock issuable under the under the 2019 Long Term Incentive Plan. |
(2) | Includes 316,319 shares of Successor Class A Common Stock that may be issued upon the vesting of stock options and 827,638 shares that may be issued upon vesting of restricted stock units (“RSUs”). |
(3) | Represents the number of shares of Successor Class A Common Stock remaining available for grant under the 2019 Long Term Incentive Plan as of February 28, 2019. |
2017 | 2018 | ||||||
Audit Fees(1) | $412,000 | $512,000 | |||||
Audit Related Fees(2) | - | - | |||||
Tax Fees(3) | 64,900 | 76,500 | |||||
All Other Fees(4) | - | - | |||||
Total Fees | $476,900 | $588,500 |
(1) | Audit fees are fees paid to Ernst & Young LLP for professional services related to the audit and quarterly reviews of our financial statements and for services that are normally provided by the accountant in connection with statutory and regulatory filings. In 2017, audit fees included $25,000 related |
(2) | Audit related fees are fees paid to Ernst & Young LLP for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements that are not reported above under “Audit Fees.” |
(3) | Tax fees are fees paid for tax compliance (including filing state and federal tax returns), tax advice and tax planning. Tax fees do not include fees for services rendered in connection with the audit. |
(4) | No other fees for professional services were paid to Ernst & Young LLP with respect to the fiscal years ended December 31, 2017 and 2018. |
Item 15. | Exhibits, Financial Statement Schedules |
(a) | 1. FINANCIAL STATEMENTS |
2. FINANCIAL STATEMENT SCHEDULES: |
3. | EXHIBITS: |
**#2.1 | |||
**#2.2 | |||
2.3 | |||
3.1 | |||
3.2 |
4.1 | |||
4.2 | |||
4.3 | |||
4.4 | |||
4.5 | |||
4.6 | |||
4.7 | |||
4.8 | |||
4.9 | |||
4.10 |
4.11 | |||
4.12 | |||
4.13 | |||
4.14 | |||
†10.1 | |||
†10.2 | |||
†10.3 | |||
†10.4 | |||
†10.5 | |||
†10.6 | |||
†10.7 | |||
†10.8 |
†10.9 | |||
†10.10 | |||
†10.11 | |||
10.12 | |||
10.13 | |||
10.14 | |||
#10.15 | |||
#10.16 | |||
†10.17 | |||
10.18 | |||
10.19 | |||
10.20 | |||
10.21 | |||
10.22 | |||
10.23 | |||
10.24 | |||
10.25 | |||
10.26 | |||
10.27 | |||
10.28 | |||
10.29 | |||
10.30 | |||
10.31 | |||
10.32 | |||
10.33 | |||
10.34 | |||
10.35 | |||
†10.36 | |||
10.37 | |||
10.38 | |||
10.39 | |||
†10.40 | |||
†10.41 | |||
†10.42 | |||
†10.43 | |||
†10.44 | |||
†10.45 | |||
*21.1 | |||
*23.1 | |||
*31.1 | |||
*31.2 | |||
*32.1 | |||
*32.2 | |||
*99.1 | |||
99.2 |
101.INS | ||
101.SCH | ||
101.CAL | ||
101.DEF | ||
101.LAB | ||
101.PRE |
* | Filed herewith. |
** | The registrant agrees to furnish supplementally a copy of any omitted schedule to the Agreements to the SEC upon request. |
† | Management contract or compensatory plan or arrangement |
# | Confidential treatment has been granted for portions of this exhibit. Omissions are designated with brackets containing asterisks. As part of our confidential treatment request, a complete version of this exhibit was filed separately with the SEC. |
(b) | Exhibits. See Item 15 (a) (3) above. |
(c) | Financial Statement Schedules. None |
Item 16. | Form 10-K Summary |
PETROQUEST ENERGY, INC. | |||
By: | /s/ Charles T. Goodson | ||
CHARLES T. GOODSON | |||
President, Chief Executive Officer and Director |
By: | /s/ Charles T. Goodson | President, Chief Executive Officer and Director | ||
CHARLES T. GOODSON | (Principal Executive Officer) | |||
By: | /s/ J. Bond Clement | Executive Vice President, Chief Financial Officer, Treasurer | ||
J. BOND CLEMENT | (Principal Financial and Accounting Officer) | |||
By: | /s/ Neal P. Goldman | Director and Chairman of the Board | ||
NEAL P. GOLDMAN | ||||
By: | /s/ David I. Rainey | Director | ||
DAVID I. RAINEY | ||||
By: | /s/ Harry F. Quarls | Director | ||
HARRY F. QUARLS | ||||
By: | /s/ J. Bradley Juneau | Director | ||
J. BRADLEY JUNEAU |
December 31, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 34,891 | $ | 15,655 | |||
Revenue receivable | 6,364 | 15,340 | |||||
Joint interest billing receivable | 4,716 | 6,597 | |||||
Other receivable | — | 7,750 | |||||
Derivative asset | — | 1,174 | |||||
Deposit for surety bonds | 3,550 | 8,300 | |||||
Other current assets | 3,261 | 2,125 | |||||
Total current assets | 52,782 | 56,941 | |||||
Property and equipment: | |||||||
Oil and gas properties: | |||||||
Oil and gas properties, full cost method | 1,361,374 | 1,369,861 | |||||
Unevaluated oil and gas properties | 23,492 | 21,854 | |||||
Accumulated depreciation, depletion and amortization | (1,301,592 | ) | (1,285,660 | ) | |||
Oil and gas properties, net | 83,274 | 106,055 | |||||
Other property and equipment | 9,282 | 9,353 | |||||
Accumulated depreciation of other property and equipment | (9,056 | ) | (8,843 | ) | |||
Total property and equipment | 83,500 | 106,565 | |||||
Other assets | 1,005 | 792 | |||||
Total assets | $ | 137,287 | $ | 164,298 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable to vendors | $ | 11,699 | $ | 32,148 | |||
Advances from co-owners | 2,020 | 1,730 | |||||
Oil and gas revenue payable | 7,765 | 19,344 | |||||
Accrued interest | 639 | 1,724 | |||||
Asset retirement obligation | 183 | 687 | |||||
Derivative liability | — | 731 | |||||
Other accrued liabilities | 1,259 | 6,476 | |||||
Total current liabilities | 23,565 | 62,840 | |||||
Multi-draw Term Loan | 49,738 | 27,963 | |||||
10% Senior Secured Notes due 2021 | — | 9,821 | |||||
10% Senior Secured PIK Notes due 2021 | — | 271,577 | |||||
Asset retirement obligation | 2,297 | 30,623 | |||||
Preferred stock dividend payable | — | 10,278 | |||||
Other long-term liabilities | — | 131 | |||||
Total liabilities not subject to compromise | 75,600 | 413,233 | |||||
Liabilities subject to compromise | 323,854 | — | |||||
Total liabilities | 399,454 | 413,233 | |||||
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 | 314,268 | 313,244 | |||||
Accumulated other comprehensive income | — | 278 | |||||
Accumulated deficit | (576,462 | ) | (562,484 | ) | |||
Total stockholders’ equity | (262,167 | ) | (248,935 | ) | |||
Total liabilities and stockholders’ equity | $ | 137,287 | $ | 164,298 |
Year Ended | ||||||||||||
December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Revenues: | ||||||||||||
Oil and gas sales | $ | 87,099 | $ | 108,287 | $ | 66,667 | ||||||
Expenses: | ||||||||||||
Lease operating expenses | 20,552 | 33,162 | 28,508 | |||||||||
Production taxes | 3,198 | 3,302 | 354 | |||||||||
Depreciation, depletion and amortization | 22,667 | 32,053 | 28,720 | |||||||||
Ceiling test write-down | — | — | 40,304 | |||||||||
General and administrative | 17,564 | 15,860 | 26,040 | |||||||||
Accretion of asset retirement obligation | 322 | 2,252 | 2,515 | |||||||||
Interest expense | 28,147 | 28,836 | 30,019 | |||||||||
92,450 | 115,465 | 156,460 | ||||||||||
Other income (expense): | ||||||||||||
Other income (expense) | 248 | (408 | ) | (560 | ) | |||||||
248 | (408 | ) | (560 | ) | ||||||||
Loss from operations | (5,103 | ) | (7,586 | ) | (90,353 | ) | ||||||
Reorganization items | 4,293 | — | — | |||||||||
Income tax expense (benefit) | 152 | (949 | ) | 543 | ||||||||
Net loss | (9,548 | ) | (6,637 | ) | (90,896 | ) | ||||||
Preferred stock dividend | 4,371 | 5,139 | 5,349 | |||||||||
Net loss available to common stockholders | $ | (13,919 | ) | $ | (11,776 | ) | $ | (96,245 | ) | |||
Loss per common share: | ||||||||||||
Basic | ||||||||||||
Net loss per share | $ | (0.54 | ) | $ | (0.55 | ) | $ | (5.24 | ) | |||
Diluted | ||||||||||||
Net loss per share | $ | (0.54 | ) | $ | (0.55 | ) | $ | (5.24 | ) | |||
Weighted average number of common shares: | ||||||||||||
Basic | 25,581 | 21,330 | 18,354 | |||||||||
Diluted | 25,581 | 21,330 | 18,354 |
Year Ended | ||||||||||||
December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Net loss | $ | (9,548 | ) | $ | (6,637 | ) | $ | (90,896 | ) | |||
Change in fair value of derivatives, net of income tax (expense) benefit of $106, ($165) and $561, respectively | (278 | ) | 5,028 | (5,697 | ) | |||||||
Comprehensive loss | $ | (9,826 | ) | $ | (1,609 | ) | $ | (96,593 | ) |
Year Ended | |||||||||||
December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Cash flows provided by (used in) operating activities: | |||||||||||
Net loss | $ | (9,548 | ) | $ | (6,637 | ) | $ | (90,896 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||
Deferred tax (benefit) expense | 152 | (949 | ) | 543 | |||||||
Depreciation, depletion and amortization | 22,667 | 32,053 | 28,720 | ||||||||
Ceiling test writedown | — | — | 40,304 | ||||||||
Accretion of asset retirement obligation | 322 | 2,252 | 2,515 | ||||||||
Share based compensation expense | 966 | 1,447 | 1,444 | ||||||||
Amortization costs and other | 1,138 | 554 | 2,106 | ||||||||
Non-cash PIK interest | 2,961 | 22,895 | 5,722 | ||||||||
Non-cash reorganization items | 534 | — | — | ||||||||
Payments to settle asset retirement obligations | (863 | ) | (3,364 | ) | (3,169 | ) | |||||
Costs incurred to issue 2021 Notes and 2021 PIK Notes | — | — | 10,139 | ||||||||
Gain on extinguishment of debt | — | (403 | ) | — | |||||||
Changes in working capital accounts: | |||||||||||
Revenue receivable | 8,976 | (5,046 | ) | (3,818 | ) | ||||||
Joint interest billing receivable | 2,653 | 610 | 41,400 | ||||||||
Accounts payable and accrued liabilities | (14,458 | ) | 2,970 | (72,760 | ) | ||||||
Advances from co-owners | 290 | (600 | ) | (13,788 | ) | ||||||
Net refund (deposit) of surety bonds | 4,488 | (2,037 | ) | (6,162 | ) | ||||||
Other | (1,429 | ) | 408 | 1,102 | |||||||
Net cash provided by (used in) operating activities | 18,849 | 44,153 | (56,598 | ) | |||||||
Cash flows used in investing activities: | |||||||||||
Investment in oil and gas properties | (20,559 | ) | (64,613 | ) | (30,366 | ) | |||||
Investment in other property and equipment | 28 | (54 | ) | (24 | ) | ||||||
Sale of oil and gas properties | (6,478 | ) | 10,707 | 25,482 | |||||||
Sale of unevaluated oil and gas properties | 7,750 | — | — | ||||||||
Net cash used in investing activities | (19,259 | ) | (53,960 | ) | (4,908 | ) | |||||
Cash flows provided by (used in) financing activities: | |||||||||||
Net payments for share based compensation | 43 | (26 | ) | 11 | |||||||
Deferred financing costs | (386 | ) | (174 | ) | (3,156 | ) | |||||
Payment of preferred stock dividend | — | — | (1,285 | ) | |||||||
Proceeds from borrowings | 52,500 | 20,000 | 10,000 | ||||||||
Repayment of borrowings | (32,500 | ) | — | — | |||||||
Redemption of 2017 Notes | — | (22,650 | ) | (53,626 | ) | ||||||
Costs incurred to issue 2021 Notes and 2021 PIK Notes | — | — | (10,139 | ) | |||||||
Costs incurred to redeem 2021 Notes | (11 | ) | — | — | |||||||
Net cash provided by (used in) financing activities | 19,646 | (2,850 | ) | (58,195 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 19,236 | (12,657 | ) | (119,701 | ) | ||||||
Cash and cash equivalents, beginning of period | 15,655 | 28,312 | 148,013 | ||||||||
Cash and cash equivalents, end of period | $ | 34,891 | $ | 15,655 | $ | 28,312 | |||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid (received) during the period for: | |||||||||||
Interest | $ | 5,341 | $ | 7,432 | $ | 33,206 | |||||
Income taxes | $ | 38 | $ | (94 | ) | $ | (18 | ) | |||
Reorganization items | $ | 980 | $ | — | $ | — |
Common Stock | Preferred Stock | Paid-In Capital | Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||
December 31, 2015 | $ | 16 | $ | 1 | $ | 290,432 | $ | 947 | $ | (454,463 | ) | $ | (163,067 | ) | |||||||||
Issuance of shares in debt exchange | 5 | — | 12,520 | — | — | 12,525 | |||||||||||||||||
Retirement of shares upon vesting of restricted stock | — | — | (200 | ) | — | — | (200 | ) | |||||||||||||||
Share-based compensation expense | — | — | 1,444 | — | — | 1,444 | |||||||||||||||||
Issuance of shares under employee stock purchase plan | — | — | 145 | — | — | 145 | |||||||||||||||||
Derivative fair value adjustment, net of tax | — | — | — | (5,697 | ) | — | (5,697 | ) | |||||||||||||||
Preferred stock dividend | — | — | — | — | (5,349 | ) | (5,349 | ) | |||||||||||||||
Net loss | $ | — | $ | — | $ | — | $ | — | $ | (90,896 | ) | $ | (90,896 | ) | |||||||||
December 31, 2016 | $ | 21 | $ | 1 | $ | 304,341 | $ | (4,750 | ) | $ | (550,708 | ) | $ | (251,095 | ) | ||||||||
Issuance of shares | 5 | — | 7,441 | — | — | 7,446 | |||||||||||||||||
Retirement of shares upon vesting of restricted stock | — | — | (10 | ) | — | — | (10 | ) | |||||||||||||||
Share-based compensation expense | — | — | 1,447 | — | — | 1,447 | |||||||||||||||||
Issuance of shares under employee stock purchase plan | — | — | 25 | — | — | 25 | |||||||||||||||||
Derivative fair value adjustment, net of tax | — | — | — | 5,028 | — | 5,028 | |||||||||||||||||
Preferred stock dividend | — | — | — | — | (5,139 | ) | (5,139 | ) | |||||||||||||||
Net loss | — | — | — | — | (6,637 | ) | (6,637 | ) | |||||||||||||||
December 31, 2017 | $ | 26 | $ | 1 | $ | 313,244 | $ | 278 | $ | (562,484 | ) | $ | (248,935 | ) | |||||||||
Issuance of shares | — | — | (11 | ) | — | — | (11 | ) | |||||||||||||||
Share-based compensation expense | — | — | 992 | — | — | 992 | |||||||||||||||||
Issuance of shares under employee stock purchase plan | — | — | 43 | — | — | 43 | |||||||||||||||||
Derivative fair value adjustment, net of tax | — | — | — | (278 | ) | (59 | ) | (337 | ) | ||||||||||||||
Preferred stock dividend | — | — | — | — | (4,371 | ) | (4,371 | ) | |||||||||||||||
Net loss | — | — | — | — | (9,548 | ) | (9,548 | ) | |||||||||||||||
December 31, 2018 | $ | 26 | $ | 1 | $ | 314,268 | $ | — | $ | (576,462 | ) | $ | (262,167 | ) |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Total oil sales | $ | 21,027 | $ | 31,258 | $ | 20,614 | |||||
Total gas sales | 50,768 | 60,922 | 37,963 | ||||||||
Total ngl sales | 15,303 | 16,107 | 8,090 | ||||||||
Total oil and gas sales | $ | 87,099 | $ | 108,287 | $ | 66,667 |
Year Ended December 31, | |||
2018 | 2017 | 2016 | |
Superior Natural Gas | 26% | 29% | 14% |
Shell Trading Company | 21% | 24% | 23% |
Texla Energy Management | 16% | (a) | (a) |
Harvest Pipeline Company | 12% | (a) | (a) |
Laclede Energy Resources | (a) | (a) | 17% |
BG Group | (a) | (a) | 10% |
(a) | Less than 10 percent |
• | Adopted an amended and restated certificate of incorporation and bylaws; |
• | Appointed four new members to the Successor’s board of directors to replace all of the directors of the Predecessor, other than the director also serving as Chief Executive Officer, who was re-appointed pursuant to the Plan; |
• | Cancelled all of the Predecessor’s common stock and 6.875% Series B Cumulative Convertible Perpetual Preferred Stock with the former holders thereof not receiving any consideration in respect of such stock; |
• | Issued to the former holders of the Predecessor’s 2021 Notes and 2021 PIK Notes, (collectively, the “Old Notes”), in exchange for the cancellation and discharge of the Old Notes: |
◦ | 8,900,000 shares of the Successor’s Class A Common Stock; and |
◦ | $80 million of the Successor’s 10% Senior Secured PIK Notes due 2024 (the “2024 PIK Notes”); |
• | Issued 300,000 shares of the Successor’s Class A Common Stock to certain former holders of the Old Notes for their commitment to backstop the Exit Facility (as defined below); |
• | Issued to the Class B Holder (as defined in the Successor’s amended and restated certificate of incorporation) one share of the Successor’s Class B Common Stock, which confers certain rights to elect directors and certain drag-along rights; |
• | Issued to the Class C Holder (as defined in the Successor’s amended and restated certificate of incorporation) one share of the Successor’s Class C Common Stock, which confers certain rights to elect directors and certain drag-along rights; |
• | Entered into a new $50 million senior secured Term Loan Agreement (the “Exit Facility”) upon the repayment and termination of the Predecessor’s Multidraw Term Loan Agreement; |
• | Entered into a registration rights agreement (the “Registration Rights Agreement”) with certain holders of the Successor’s Class A Common Stock and 2024 PIK Notes; and |
• | Adopted a new management incentive plan (the “2019 Long Term Incentive Plan”) for officers, directors and employees of the Successor and its subsidiaries, pursuant to which 1,344,000 shares of the Successor’s Class A Common Stock were reserved for issuance. |
December 31, 2018 | |||
10% Senior PIK Notes due 2021 | $ | 275,046 | |
10% Senior Notes due 2021 | 9,427 | ||
Accrued interest | 20,624 | ||
Accounts payable to vendors | 874 | ||
Other long-term liabilities | 510 | ||
Other accrued liabilities | 2,724 | ||
Preferred stock dividend payable | 14,649 | ||
Liabilities subject to compromise | $ | 323,854 |
For the Year Ended December 31, 2018 | Loss(Numerator) | Shares (Denominator) | Per Share Amount | |||||||
BASIC EPS | ||||||||||
Net loss available to common stockholders | $ | (13,919 | ) | 25,581 | $ | (0.54 | ) | |||
Stock options | — | — | ||||||||
Attributable to participating securities | — | — | ||||||||
DILUTED EPS | $ | (13,919 | ) | 25,581 | $ | (0.54 | ) | |||
For the Year Ended December 31, 2017 | Loss(Numerator) | Shares (Denominator) | Per Share Amount | |||||||
BASIC EPS | ||||||||||
Net loss available to common stockholders | $ | (11,776 | ) | 21,330 | $ | (0.55 | ) | |||
Stock options | — | — | ||||||||
Attributable to participating securities | — | — | ||||||||
DILUTED EPS | $ | (11,776 | ) | 21,330 | $ | (0.55 | ) | |||
For the Year Ended December 31, 2016 | Loss(Numerator) | Shares (Denominator) | Per Share Amount | |||||||
BASIC EPS | ||||||||||
Net loss available to common stockholders | $ | (96,245 | ) | 18,354 | $ | (5.24 | ) | |||
Stock options | — | — | ||||||||
Attributable to participating securities | — | — | ||||||||
DILUTED EPS | $ | (96,245 | ) | 18,354 | $ | (5.24 | ) |
Year Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Stock options: | ||||||||||||
Incentive Stock Options (share settled) | $ | 407 | $ | 820 | $ | 206 | ||||||
Non-Qualified Stock Options (share settled) | 94 | 387 | 164 | |||||||||
Restricted stock (share settled) | 465 | 197 | 1,073 | |||||||||
Cash settled stock units | (241 | ) | 245 | 244 | ||||||||
Share-based compensation | $ | 725 | $ | 1,649 | $ | 1,687 |
2017 | 2016 | |||
Dividend yield | —% | —% | ||
Expected volatility | 80.44% | 62.0%-79.99% | ||
Risk-free rate | 1.925% | 1.255%-2.09% | ||
Expected term | 6 years | 6 years | ||
Stock options granted | 219,130 | 1,168,754 | ||
Wgtd. avg. grant date fair value per share | $1.28 | $1.96 | ||
Fair value of grants | $280,000 | $2,293,000 |
Number of Options | Wgtd. Avg. Exercise Price | Wgtd. Avg. Remaining Life | Aggregate Intrinsic Value (000’s) | ||||||||||
Outstanding at beginning of year | 1,608,646 | $ | 6.20 | ||||||||||
Granted | — | — | |||||||||||
Expired/cancelled/forfeited | (121,823 | ) | 4.98 | ||||||||||
Exercised | — | — | |||||||||||
Outstanding at end of year | 1,486,823 | 6.34 | 7.03 | $ | — | ||||||||
Options exercisable at end of year | 1,047,590 | $ | 7.78 | 6.64 | $ | — |
Range of | Options | Wgtd. Avg. | Wgtd. Avg. | Options | Wgtd. Avg. | |||||||
Exercise | Outstanding | Remaining | Exercise | Exercisable | Exercise | |||||||
Price | 12/31/2018 | Contractual Life | Price | 12/31/2018 | Price | |||||||
$0.00-$2.37 | 250,477 | 8.43 | $1.99 | 105,780 | $2.07 | |||||||
$3.17-$4.36 | 1,013,663 | 7.68 | $3.37 | 719,127 | $3.36 | |||||||
$16.72-$19.52 | 68,190 | 4.42 | $17.11 | 68,190 | $17.11 | |||||||
$20.40-$30.32 | 154,493 | 1.73 | $28.15 | 154,493 | $28.15 | |||||||
1,486,823 | 1,047,590 | $7.78 |
Number of Shares | Wgtd. Avg. Fair Value per Share | ||||
Outstanding at beginning of year | 487,502 | $1.87 | |||
Cancelled/forfeited | (34,946 | ) | $1.85 | ||
Lapse of restrictions | (37,500 | ) | $2.15 | ||
Outstanding at December 31, 2018 | 415,056 | $1.85 |
MRSU | RSU | Total | ||||
Outstanding at beginning of year | 277,733 | 889,587 | 1,167,320 | |||
Granted | — | — | — | |||
Expired/Cancelled/Forfeited | (270,269 | ) | (78,808 | ) | (349,077 | ) |
Vested/Paid | (7,464 | ) | (323,374 | ) | (330,838 | ) |
Outstanding at December 31, 2018 | — | 487,405 | 487,405 |
Year Ended December 31, | |||||||
2018 | 2017 | ||||||
Asset retirement obligation, beginning of period | $ | 31,310 | $ | 36,610 | |||
Liabilities incurred | 7 | 574 | |||||
Liabilities settled | (863 | ) | (3,364 | ) | |||
Accretion expense | 322 | 2,252 | |||||
Revisions in estimated cash flows | (62 | ) | (4,514 | ) | |||
Divestiture of oil and gas properties | (28,234 | ) | (248 | ) | |||
Asset retirement obligation, end of period | 2,480 | 31,310 | |||||
Less: current portion of asset retirement obligation | (183 | ) | (687 | ) | |||
Long-term asset retirement obligation | $ | 2,297 | $ | 30,623 |
Commodity Derivatives | ||||
Period | Balance Sheet Location | Fair Value | ||
December 31, 2017 | Derivative asset | $ | 1,174 | |
December 31, 2017 | Derivative liability | $ | (731 | ) |
Instrument | Amount of Gain (Loss) Recognized in Other Comprehensive Income | Location of Gain (Loss) Reclassified into Income | Amount of Gain (Loss) Reclassified into Income | ||||||
Commodity Derivatives at December 31, 2018 | $ | (990 | ) | Oil and gas sales | $ | (622 | ) | ||
Commodity Derivatives at December 31, 2017 | $ | 6,654 | Oil and gas sales | $ | 1,461 | ||||
Commodity Derivatives at December 31, 2016 | $ | (4,447 | ) | Oil and gas sales | $ | 1,811 |
• | 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: | |||||||||||
At December 31, 2017 | $ | — | $ | 443 | $ | — |
Gains and Losses on Cash Flow Hedges | Change in Valuation Allowance | Total | |||||||||
Balance as of December 31, 2015 | $ | 947 | $ | — | $ | 947 | |||||
Other comprehensive income before reclassifications: | |||||||||||
Change in fair value of derivatives | (4,447 | ) | — | (4,447 | ) | ||||||
Income tax effect | 1,654 | (1,654 | ) | — | |||||||
Net of tax | (2,793 | ) | (1,654 | ) | (4,447 | ) | |||||
Amounts reclassified from accumulated other comprehensive income: | |||||||||||
Oil and gas sales | (1,811 | ) | — | (1,811 | ) | ||||||
Income tax effect | 674 | (113 | ) | 561 | |||||||
Net of tax | (1,137 | ) | (113 | ) | (1,250 | ) | |||||
Net other comprehensive loss | (3,930 | ) | (1,767 | ) | (5,697 | ) | |||||
Balance as of December 31, 2016 | $ | (2,983 | ) | $ | (1,767 | ) | $ | (4,750 | ) |
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 | 6,654 | — | 6,654 | ||||||||
Income tax effect | (2,475 | ) | 1,767 | (708 | ) | ||||||
Net of tax | 4,179 | 1,767 | 5,946 | ||||||||
Amounts reclassified from accumulated other comprehensive income: | |||||||||||
Oil and gas sales | (1,461 | ) | — | (1,461 | ) | ||||||
Income tax effect | 543 | — | 543 | ||||||||
Net of tax | (918 | ) | — | (918 | ) | ||||||
Net other comprehensive loss | $ | 3,261 | $ | 1,767 | $ | 5,028 | |||||
Balance as of December 31, 2017 | $ | 278 | $ | — | $ | 278 |
Gains and Losses on Cash Flow Hedges | |||
Balance as of December 31, 2017 | $ | 278 | |
Other comprehensive income before reclassifications: | |||
Change in fair value of derivatives | (990 | ) | |
Income tax effect | 238 | ||
Net of tax | (752 | ) | |
Amounts reclassified from accumulated other comprehensive income: | |||
Oil and gas sales | 622 | ||
Income tax effect | (148 | ) | |
Net of tax | 474 | ||
Net other comprehensive loss | (278 | ) | |
Balance as of December 31, 2018 | $ | — |
December 31, | |||||||
2018 | 2017 | ||||||
Net operating loss carryforwards | $ | 86,046 | $ | 78,541 | |||
Percentage depletion carryforward | 6,011 | 5,701 | |||||
Interest expense carryforward | 10,540 | — | |||||
Contributions carryforward and other | 194 | 192 | |||||
Temporary differences: | |||||||
Oil and gas properties | 3,673 | 8,279 | |||||
Asset retirement obligation | 602 | 7,602 | |||||
Derivatives | — | (107 | ) | ||||
Share-based compensation | 1,403 | 1,269 | |||||
Original issue discount on debt exchanges | 9,815 | 14,429 | |||||
Other | 432 | — | |||||
Valuation allowance | (118,716 | ) | (115,906 | ) | |||
Deferred tax asset (liability) | $ | — | $ | — |
For the Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Amount computed using the statutory rate | $ | (1,973 | ) | $ | (2,655 | ) | $ | (31,623 | ) | ||
Increase (reduction) in taxes resulting from: | |||||||||||
Impact of rate change on deferred tax | — | 64,915 | — | ||||||||
State & local taxes | (1,731 | ) | (368 | ) | (2,000 | ) | |||||
Percentage depletion carryforward | (256 | ) | (66 | ) | (163 | ) | |||||
Non-deductible stock option expense (1) | 98 | 305 | 77 | ||||||||
Share-based compensation (2) | — | 64 | 707 | ||||||||
Restructuring costs | 1,528 | — | — | ||||||||
Other | 93 | (21 | ) | 1,415 | |||||||
Change in valuation allowance | 2,393 | (63,123 | ) | 32,130 | |||||||
Income tax expense (benefit) | $ | 152 | $ | (949 | ) | $ | 543 |
(1) | Relates to compensation expense related to Incentive Stock Options. |
(2) | Relates to the write-off of deferred tax assets associated with share-based compensation that will not be deductible for tax purposes. |
2019 | $ | 1,240 | |
2020 | 1,173 | ||
2021 | 445 | ||
2022 | 431 | ||
2023 | 392 | ||
Thereafter | — | ||
$ | 3,681 |
For the Year-Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Acquisition costs: | |||||||||||
Proved | $ | 241 | $ | 1,330 | $ | 3,346 | |||||
Unproved (1) | 6,190 | 12,762 | 2,197 | ||||||||
Divestiture of proved leasehold | (2,604 | ) | (4,795 | ) | (7,000 | ) | |||||
Exploration costs: | |||||||||||
Proved | (51 | ) | 9,466 | 715 | |||||||
Unproved | 233 | (287 | ) | 603 | |||||||
Development costs (2) | (18,928 | ) | 32,622 | 1,522 | |||||||
Capitalized general and administrative and interest costs | 8,070 | 8,269 | 7,558 | ||||||||
Total costs incurred | $ | (6,849 | ) | $ | 59,367 | $ | 8,941 |
For the Year-Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Accumulated depreciation, depletion and amortization (DD&A) | |||||||||||
Balance, beginning of year | $ | (1,285,660 | ) | $ | (1,243,286 | ) | $ | (1,157,455 | ) | ||
Provision for DD&A | (22,410 | ) | (31,667 | ) | (27,962 | ) | |||||
Ceiling test writedown | — | — | (40,304 | ) | |||||||
Sale of proved properties and other (3) | 6,478 | (10,707 | ) | (17,565 | ) | ||||||
Balance, end of year | $ | (1,301,592 | ) | $ | (1,285,660 | ) | $ | (1,243,286 | ) | ||
DD&A per Mcfe | $ | 1.05 | $ | 1.15 | $ | 1.19 |
(1) | During 2017, the Company acquired approximately 24,600 gross acres for approximately $9.3 million in cash and 2.0 million shares of common stock. In total for 2017 and 2018, the Company has invested approximately $15.0 million in leasing costs and geological and engineering data. |
(2) | During 2018, the Company sold its Gulf of Mexico properties and removed approximately $28.2 million of future discounted asset retirement obligations, which was recorded as a reduction in the capitalized costs of oil and gas properties. |
(3) | During 2018, the Company sold its Gulf of Mexico properties, receiving no cash consideration and funding amounts related to the future abandonment costs for the properties and purchase price adjustments. During 2017, the Company sold its East Lake Verret assets for net proceeds of approximately $2.2 million and its East Texas saltwater disposal assets for net proceeds of $8.5 million. During 2016, the Company sold its remaining Oklahoma producing assets for net proceeds of $17.6 million. |
Oil in MBbls | NGL in MMcfe | Natural Gas in MMcf | Total Reserves in MMcfe | ||||||||
Proved reserves as of December 31, 2015 | 1,806 | 34,826 | 132,344 | 178,004 | |||||||
Revisions of previous estimates | 247 | (4,380 | ) | (11,854 | ) | (14,748 | ) | ||||
Extensions, discoveries and other additions | — | — | 1,485 | 1,485 | |||||||
Sale of reserves in place | (154 | ) | — | (24,834 | ) | (25,759 | ) | ||||
Production | (502 | ) | (3,871 | ) | (16,617 | ) | (23,501 | ) | |||
Proved reserves as of December 31, 2016 | 1,397 | 26,575 | 80,524 | 115,481 | |||||||
Revisions of previous estimates | 308 | (7,269 | ) | 381 | (5,040 | ) | |||||
Extensions, discoveries and other additions | 777 | 4,565 | 64,704 | 73,931 | |||||||
Purchase of producing properties | 48 | — | 473 | 761 | |||||||
Sale of reserves in place | (90 | ) | — | (1,033 | ) | (1,573 | ) | ||||
Production | (592 | ) | (4,450 | ) | (19,611 | ) | (27,613 | ) | |||
Proved reserves as of December 31, 2017 | 1,848 | 19,421 | 125,438 | 155,947 | |||||||
Revisions of previous estimates | 130 | (1,469 | ) | 2,737 | 2,044 | ||||||
Extensions, discoveries and other additions | 41 | 2,929 | 7,947 | 11,121 | |||||||
Sale of reserves in place | (507 | ) | (486 | ) | (13,945 | ) | (17,472 | ) | |||
Production | (326 | ) | (3,373 | ) | (16,013 | ) | (21,335 | ) | |||
Proved reserves as of December 31, 2018 | 1,186 | 17,022 | 106,164 | 130,305 | |||||||
Proved developed reserves | |||||||||||
As of December 31, 2016 | 1,212 | 13,073 | 47,349 | 67,694 | |||||||
As of December 31, 2017 | 1,078 | 12,564 | 57,409 | 76,441 | |||||||
As of December 31, 2018 | 567 | 10,220 | 47,516 | 61,143 | |||||||
Proved undeveloped reserves | |||||||||||
As of December 31, 2016 | 185 | 13,502 | 33,175 | 47,787 | |||||||
As of December 31, 2017 | 770 | 6,857 | 68,029 | 79,506 | |||||||
As of December 31, 2018 | 619 | 6,802 | 58,648 | 69,162 |
December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Future cash flows | $ | 482,766 | $ | 539,244 | $ | 299,035 | |||||
Future production costs | (171,999 | ) | (184,171 | ) | (117,283 | ) | |||||
Future development costs | (73,258 | ) | (128,447 | ) | (83,720 | ) | |||||
Future income taxes | — | — | — | ||||||||
Future net cash flows | 237,509 | 226,626 | 98,032 | ||||||||
10% annual discount | (113,484 | ) | (99,329 | ) | (30,763 | ) | |||||
Standardized measure of discounted future net cash flows | $ | 124,025 | $ | 127,297 | $ | 67,269 |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Standardized measure at beginning of year | $ | 127,297 | $ | 67,269 | $ | 127,685 | |||||
Sales and transfers of oil and gas produced, net of production costs | (64,148 | ) | (70,362 | ) | (35,993 | ) | |||||
Changes in price, net of future production costs | 18,542 | 53,516 | (30,427 | ) | |||||||
Extensions and discoveries, net of future production and development costs | 2,983 | 50,977 | 864 | ||||||||
Changes in estimated future development costs, net of development costs incurred during this period | 16,241 | 17,144 | 26,356 | ||||||||
Revisions of quantity estimates | 2,755 | (7,482 | ) | (14,889 | ) | ||||||
Accretion of discount | 12,730 | 6,727 | 12,769 | ||||||||
Purchase of reserves in place | — | 549 | — | ||||||||
Sale of reserves in place | 1,614 | (1,305 | ) | (16,701 | ) | ||||||
Changes in production rates (timing) and other | 6,011 | 10,264 | (2,395 | ) | |||||||
Net increase (decrease) in standardized measure | (3,272 | ) | 60,028 | (60,416 | ) | ||||||
Standardized measure at end of year | $ | 124,025 | $ | 127,297 | $ | 67,269 |
2018 | 2017 | 2016 | ||||||
Oil, $/Bbl | $68.71 | $52.49 | $40.85 | |||||
Ngls, $/Mcfe | 4.08 | 3.23 | 2.40 | |||||
Natural Gas, $/Mcf | 3.13 | 3.03 | 1.82 |
Quarter Ended | ||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||
2018 | ||||||||||||
Revenues | $ | 24,917 | $ | 21,507 | $ | 20,886 | $ | 19,789 | ||||
Income (loss) from operations | (821 | ) | (1,326 | ) | (3,657 | ) | 701 | |||||
Loss available to common stockholders | (2,212 | ) | (2,611 | ) | (4,979 | ) | $ | (4,117 | ) | |||
Loss per share: | ||||||||||||
Basic | $ | (0.09 | ) | $ | (0.10 | ) | $ | (0.19 | ) | $ | (0.16 | ) |
Diluted | $ | (0.09 | ) | $ | (0.10 | ) | $ | (0.19 | ) | $ | (0.16 | ) |
2017 | ||||||||||||
Revenues | $ | 20,772 | $ | 24,251 | $ | 28,184 | $ | 35,080 | ||||
Income (loss) from operations | (3,633 | ) | (2,289 | ) | (1,885 | ) | 221 | |||||
Loss available to common stockholders | (4,918 | ) | (3,385 | ) | (3,085 | ) | (389 | ) | ||||
Loss per share: | ||||||||||||
Basic | $ | (0.23 | ) | $ | (0.16 | ) | $ | (0.15 | ) | $ | (0.02 | ) |
Diluted | $ | (0.23 | ) | $ | (0.16 | ) | $ | (0.15 | ) | $ | (0.02 | ) |
1. | I have reviewed this Form 10-K 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 |
1. | I have reviewed this Form 10-K 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 |
\s\ James F. Latham |
James F. Latham, P.E. |
TBPE License No. 49586 |
Advising Senior Vice President |
As of December 31, 2018 |
Proved | ||||||||||||||||
Developed | Total | |||||||||||||||
Producing | Non-Producing | Undeveloped | Proved | |||||||||||||
Net Reserves | ||||||||||||||||
Oil/Condensate – Barrels | 562,258 | 5,447 | 618,734 | 1,186,439 | ||||||||||||
Plant Products – Barrels | 1,638,456 | 64,980 | 1,133,629 | 2,837,065 | ||||||||||||
Gas – MMcf | 46,459 | 1,057 | 58,648 | 106,164 | ||||||||||||
Income Data | ||||||||||||||||
Future Gross Revenue | $211,377,639 | $4,636,415 | $241,970,464 | $457,984,518 | ||||||||||||
Deductions | 80,640,207 | 3,465,677 | 136,369,037 | 220,474,921 | ||||||||||||
Future Net Income (FNI) | $130,737,432 | $1,170,738 | $105,601,427 | $237,509,597 | ||||||||||||
Discounted FNI @ 10% | $ | 86,654,490 | $ | 888,241 | $ | 36,482,354 | $124,025,085 |
Discounted Future Net Income | ||||
As of December 31, 2018 | ||||
Discount Rate | Total | |||
Percent | Proved | |||
5 | $163,532,396 | |||
15 | $100,080,455 | |||
20 | $84,184,361 | |||
30 | $64,508,489 |
Geographic Area | Product | Price Reference | Average Benchmark Prices | Average Realized Prices |
Oil/Condensate | WTI Cushing | $65.56/bbl | $68.71/bbl | |
United States | NGLs | WTI Cushing | $65.56/bbl | $24.46/bbl |
Gas | Henry Hub | $3.10/MMBTU | $3.13/Mcf |
(1) | completion intervals that are open at the time of the estimate but which have not yet started producing; |
(2) | wells which were shut-in for market conditions or pipeline connections; or |
(3) | wells not capable of production for mechanical reasons. |
(i) | Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances. |
Document and Entity Information - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Mar. 10, 2019 |
Jun. 29, 2018 |
|
Entity Registrant Name | PETROQUEST ENERGY INC | ||
Entity Central Index Key | 0000872248 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 5,424 | ||
Class A Common Stock | |||
Entity Common Stock, Shares Outstanding | 9,200,000 | ||
Class B Common Stock | |||
Entity Common Stock, Shares Outstanding | 1 | ||
Class C Common Stock | |||
Entity Common Stock, Shares Outstanding | 1 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Instrument [Line Items] | ||
Preferred stock, par value (usd 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 (usd 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 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 10.00% | 10.00% |
10% Senior Secured PIK Notes due 2021 | Payment in Kind (PIK) Note | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 10.00% | 10.00% |
Consolidated Statements of Operations - USD ($) shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Revenues: | |||
Oil and gas sales | $ 87,099,000 | $ 108,287,000 | $ 66,667,000 |
Expenses: | |||
Lease operating expenses | 20,552,000 | 33,162,000 | 28,508,000 |
Production taxes | 3,198,000 | 3,302,000 | 354,000 |
Depreciation, depletion and amortization | 22,667,000 | 32,053,000 | 28,720,000 |
Ceiling test write-down | 0 | 0 | 40,304,000 |
General and administrative | 17,564,000 | 15,860,000 | 26,040,000 |
Accretion of asset retirement obligation | 322,000 | 2,252,000 | 2,515,000 |
Interest expense | 28,147,000 | 28,836,000 | 30,019,000 |
Total expenses | 92,450,000 | 115,465,000 | 156,460,000 |
Other income (expense): | |||
Other income (expense) | 248,000 | (408,000) | (560,000) |
Other income (expense), net | 248,000 | (408,000) | (560,000) |
Loss from operations | (5,103,000) | (7,586,000) | (90,353,000) |
Reorganization items | 4,293,000 | 0 | 0 |
Income tax expense (benefit) | 152,000 | (949,000) | 543,000 |
Net loss | (9,548,000) | (6,637,000) | (90,896,000) |
Preferred stock dividend | 4,371,000 | 5,139,000 | 5,349,000 |
Net loss available to common stockholders | $ (13,919,000) | $ (11,776,000) | $ (96,245,000) |
Basic | |||
Net loss per share (in usd per share) | $ (0.54) | $ (0.55) | $ (5.24) |
Diluted | |||
Net loss per share (in usd per share) | $ (0.54) | $ (0.55) | $ (5.24) |
Weighted average number of common shares: | |||
Basic (shares) | 25,581 | 21,330 | 18,354 |
Diluted (shares) | 25,581 | 21,330 | 18,354 |
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (9,548) | $ (6,637) | $ (90,896) |
Change in fair value of derivatives, net of income tax (expense) benefit of $106, ($165) and $561, respectively | (278) | 5,028 | (5,697) |
Comprehensive loss | $ (9,826) | $ (1,609) | $ (96,593) |
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Statement of Comprehensive Income [Abstract] | |||
Income tax (expense) benefit related to other comprehensive income due to derivatives | $ 106 | $ (165) | $ 561 |
Organization and Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies PetroQuest Energy, Inc. (a Delaware corporation) (“PetroQuest”) is an independent oil and gas company headquartered in Lafayette, Louisiana with an exploration office in The Woodlands, Texas. It is engaged in the exploration, development, acquisition and operation of oil and gas properties in Texas and Louisiana. To facilitate our financial statement presentations, we refer to the post-emergence reorganized company in these consolidated financial statements and footnotes as the “Successor” for periods subsequent to February 8, 2019, and to the pre-emergence company as “Predecessor” for periods prior to February 8, 2019. As discussed in “Note 2-Voluntary Reorganization under Chapter 11 of the Bankruptcy Code” the Company and its wholly owned direct and indirect subsidiaries filed voluntary petitions for bankruptcy relief and subsequently operated as debtors in possession, in accordance with the applicable provisions of the Bankruptcy Code, until emergence on February 8, 2019. Principles of Consolidation The consolidated financial statements include the accounts of PetroQuest and its subsidiaries, PetroQuest Energy, L.L.C., PetroQuest Oil & Gas, L.L.C, Pittrans, Inc. and TDC Energy LLC (collectively, the "Company"). All intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("US GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates of proved oil and gas reserves and future net cash flows from estimated proved reserves are based on geological and engineering data and depend upon a number of variable factors and assumptions. Changes in estimated proved oil and gas reserves used in the calculation of depreciation, depletion and amortization of oil and gas properties or the present value of the estimated future net cash flows from estimated proved reserves used in the ceiling test could have a material impact on future results of operations. Bankruptcy Accounting and Financial Reporting The consolidated financial statements have been prepared in accordance with Accounting Standards Codification ("ASC") 852, Reorganizations, for the period subsequent to the bankruptcy filing. ASC 852 requires that the consolidated 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 (as defined below) are recorded as reorganization items on the consolidated statement of operations. In addition, the pre-petition obligations that may be impacted by the bankruptcy reorganization process are classified on the consolidated balance sheet in liabilities subject to compromise. These liabilities are reported at the amounts expected to be allowed by the Bankruptcy Court (as defined below), even if they may be settled for lesser amounts. Oil and Gas Properties The Company utilizes the full cost method of accounting, which involves capitalizing all acquisition, exploration and development costs incurred for the purpose of finding oil and gas reserves including the costs of drilling and equipping productive wells, dry hole costs, lease acquisition costs and delay rentals. The Company also capitalizes the portion of general and administrative costs that can be directly identified with acquisition, exploration or development of oil and gas properties. Unevaluated property costs are transferred to evaluated property costs at such time as wells are completed on the properties, the properties are sold, or management determines these costs to have been impaired. Interest is capitalized on unevaluated property costs. Transactions involving sales of reserves in place are recorded as adjustments to accumulated depreciation, depletion and amortization with no gain or loss recognized, unless such adjustments would cause a significant alteration in the relationship between capitalized costs and proved reserves. Depreciation, depletion and amortization of oil and gas properties is computed using the unit-of-production method based on estimated proved reserves. All costs associated with evaluated oil and gas properties, including an estimate of future development costs associated therewith, are included in the depreciable base. The costs of investments in unevaluated properties are excluded from this calculation until the related properties are evaluated, proved reserves are established or the properties are determined to be impaired. Proved oil and gas reserves are estimated annually by independent petroleum engineers. The capitalized costs of proved oil and gas properties cannot exceed the present value of the estimated net future cash flows from proved reserves based on historical twelve-month, first day of the month, average oil, gas and natural gas liquid prices, including the effect of hedges in place (the full cost ceiling). If the capitalized costs of proved oil and gas properties exceed the full cost ceiling, the Company is required to write-down the value of its oil and gas properties to the full cost ceiling amount. The Company follows the provisions of Staff Accounting Bulletin (“SAB”) No. 106, regarding the application of ASC Topic 410-20 by companies following the full cost accounting method. SAB No. 106 indicates that estimated future dismantlement and abandonment costs that are recorded on the balance sheet are to be included in the costs subject to the full cost ceiling limitation. The estimated future cash outflows associated with settling the recorded asset retirement obligations are excluded from the computation of the present value of estimated future net revenues used in applying the ceiling test. Cash and Cash Equivalents The Company considers all highly liquid investments with a stated maturity of three months or less to be cash and cash equivalents. The majority of the Company’s cash and cash equivalents are in overnight securities made through its commercial bank accounts, which result in available funds the next business day. Accounts Receivable In its capacity as operator, the Company incurs drilling and operating costs that are billed to its partners based on their respective working interests. Other Property and Equipment The costs related to other furniture and fixtures are depreciated on a straight line basis over estimated useful lives ranging from three to five years. Deposit For Surety Bonds The deposit for surety bonds of $3.6 million and $8.3 million at December 31, 2018 and 2017, respectively, represent cash collateral paid with respect to the Company's surety bonds which secured its offshore decommissioning obligations. The Company received a refund of the majority of the remaining deposits during March 2019. Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740. Provisions for income taxes include deferred taxes resulting primarily from temporary differences due to different reporting methods for oil and gas properties for financial reporting purposes and income tax purposes. For financial reporting purposes, all exploratory and development expenditures are capitalized and depreciated, depleted and amortized on the unit-of-production method. For income tax purposes, only the equipment and leasehold costs relative to successful wells are capitalized and recovered through depreciation or depletion. Generally, most other exploratory and development costs are charged to expense as incurred; however, the Company may use certain provisions of the Internal Revenue Code that allow capitalization of intangible drilling costs. Other financial and income tax reporting differences occur primarily as a result of statutory depletion. Deferred tax assets are assessed for realizability and a valuation allowance is established for any portion of the asset for which it is more likely than not will not be realized. Revenue Recognition The Company records natural gas and oil revenue in accordance with Accounting Standards Update ("ASU") 2014-09 "Revenue from Contracts with Customers". 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. The Company's sources of revenue are oil, natural gas and natural gas liquids ("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 $6.4 million of revenue receivable at December 31, 2018, comprised of $1.1 million of oil revenue, $4.8 million of natural gas revenue and $0.5 million of NGL revenue. The following table includes a disaggregation of revenue by product including the effects of hedges in place (in thousands):
Concentrations The Company’s production is sold on month to month contracts at prevailing prices. The Company attempts to diversify its sales among multiple purchasers and obtain credit protection such as letters of credit and parental guarantees when necessary. The following table identifies customers from whom the Company derived 10% or more of its oil and gas revenues during the years presented. Based on the availability of other customers, the Company does not believe the loss of any of these customers would have a significant effect on its business or financial condition.
Derivative Instruments Under ASC Topic 815, the nature of a derivative instrument must be evaluated to determine if it qualifies for hedge accounting treatment. Instruments qualifying for hedge accounting treatment are recorded as an asset or liability measured at fair value and subsequent changes in fair value are recognized in stockholders’ equity through other comprehensive income (loss), net of related taxes, to the extent the hedge is effective. If a hedge becomes ineffective because the hedged production does not occur, or the hedge otherwise does not qualify for hedge accounting treatment, the changes in the fair value of the derivative are recorded in the statement of operations as derivative income (expense). The Company does not offset fair value amounts recognized for derivative instruments. The Company’s hedges are specifically referenced to NYMEX prices for oil and natural gas. The effectiveness of hedges is evaluated at the time the contracts are entered into, as well as periodically over the life of the contracts, by analyzing the correlation between NYMEX prices and the posted prices received from the designated production. Through this analysis, the Company is able to determine if a high correlation exists between the prices received for its designated production and the NYMEX prices at which the hedges will be settled. At December 31, 2018, the Company had no derivative instruments in place. See Note 8 for further discussion of the Company’s derivative instruments. Recently Issued Accounting Standards In February 2016, the Financial Accounting Standards Board ("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. This ASU supersedes the lease requirements in Topic 840, Leases, and requires that a lessee recognize a right-of-use asset and lease liability for leases that do not meet the definition of a short-term lease. The right-of-use asset and lease liability are to be measured on the balance sheet at the present value of the lease payments. For income statement purposes, ASU 2016-02 retains a dual model requiring leases to be classified as either operating or finance within the Company’s consolidated statements of operations. Lease costs for operating leases are recognized as a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. For finance leases, interest expense is recognized on the lease liability separately from amortization of the right-to-use asset. ASU 2016-02 does not apply to mineral leases for oil and natural gas properties, but does apply to equipment used to explore and develop oil and natural gas reserves. This ASU is effective for fiscal years beginning after December 15, 2018, including the first quarter of 2019. The Company will adopt this standard using the modified retrospective method applied to all leases that exist on January 1, 2019. The Company made certain elections allowing it not to reassess contracts that commenced prior to adoption and to not recognize right-of-use assets or lease liabilities for short-term leases. Upon adoption, the Company expects the right-to-use asset and lease liability reported on its consolidated financial statements to be immaterial. 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. |
Acquisitions and Divestitures |
12 Months Ended |
---|---|
Dec. 31, 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. On December 15, 2017, the Company completed the sale of its saltwater disposal assets in East Texas for approximately $8.5 million. These sales were accounted for as adjustments 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 was required to contribute approximately $3.8 million towards the future abandonment costs for the properties. 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 received net cash refunds during 2018 totaling $4.5 million related to a depositary account that served to collateralize a portion of the Company's offshore bonds related to these properties. The Company received the majority of the remaining $3.6 million during March 2019, which is included in deposits for surety bonds on the consolidated balance sheet as of December 31, 2018. This sale was accounted for as an adjustment to the capitalized costs of oil and gas properties. Acquisitions: On December 20, 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 $15.0 million in acquisition, engineering and geological costs as of December 31, 2018 and issued 2.0 million shares of Predecessor common stock with respect to these interests. |
Voluntary Reorganization under Chapter 11 of the Bankruptcy Code |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Voluntary Reorganization under Chapter 11 of the Bankruptcy Code | Voluntary Reorganization under Chapter 11 of the Bankruptcy Code The Company's overall liquidity position and cash available for capital expenditures have been negatively impacted by weak natural gas prices, declining production and increasing cash interest expense on its outstanding indebtedness. In addition, beginning with the August 15, 2018 interest payment on the Company's 2021 PIK Notes (as defined below), the Company was 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 10 for additional information). As a result of the forgoing, the Company engaged in discussions and negotiations with the lenders under the Multidraw Term Loan (as defined below), 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. 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 wholly owned 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”). 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 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 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 under the multidraw 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, pursuant to which such parties agreed to support the Plan (as defined below). On January 31, 2019, the Court entered an order (the “Confirmation Order”) confirming the Debtors’ First Amended Chapter 11 Plan of Reorganization, as Immaterially Modified as of January 28, 2019 (as amended, modified or supplemented from time to time, the “Plan”) under Chapter 11 of the Bankruptcy Code. On February 8, 2019 (the “Effective Date”), the Plan became effective in accordance with its terms and the Debtors emerged from the Chapter 11 Cases. On the Effective Date, TDC Energy, LLC, Pittrans, Inc. and Sea Harvester Energy Development, L.L.C. were dissolved. The remaining Debtors (collectively, the "Reorganized Debtors") continue in existence. On the Effective Date and pursuant to the terms of the Plan and the Confirmation Order, the Company:
The foregoing is a summary of the substantive provisions of the Plan and related transactions and is not intended to be a complete description of, or a substitute for a full and complete reading of, the Plan and the other documents referred to above. 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’ pre-petition liabilities are subject to settlement in the Bankruptcy Court. Although the filing of the Petition triggered defaults on the Debtors’ debt obligations, creditors were 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 pre-petition 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 pre-petition 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 Debtor's 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, 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 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. Debtor-In-Possession During the pendency of the Chapter 11 Cases, the Debtors operated as debtors-in-possession in accordance with the applicable provisions of the Bankruptcy Code. In general, as debtors-in-possession under the Bankruptcy Code, the Debtors were authorized to continue to operate as an ongoing business, but were not permitted to engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. Pursuant to motions filed with the Bankruptcy Court that were designed primarily to mitigate the impact of the Chapter 11 Cases on our operations, customers and employees, the Bankruptcy Court authorized the Debtors to conduct their business activities in the ordinary course, including, among other things and subject to the terms and conditions of such orders, authorizing the Debtors to: (i) pay employees' wages and related obligations; (ii) continue to operate their cash management system in a form substantially similar to pre-petition practice; (iii) continue to honor certain obligations related to our royalty obligations; and (iv) pay taxes in the ordinary course. Reorganization Items The Debtors have incurred costs associated with the reorganization, primarily legal and professional fees. In accordance with applicable guidance, costs associated with the bankruptcy proceedings have been recorded as reorganization items within the consolidated statement of operations for the year ended December 31, 2018. Reorganization items included $3.8 million related to post petition professional fees and $0.5 million related to adjustments to certain claims relating to the Chapter 11 Cases and to the carrying value of debt classified as liabilities subject to compromise. Liabilities Subject to Compromise The consolidated balance sheet as of December 31, 2018 includes amounts classified as liabilities subject to compromise, which represent liabilities which have been allowed as claims in the Chapter 11 Cases. These amounts represent the Debtors' current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases, and may differ from actual future settlement amounts paid. Differences between liabilities estimated and claims filed, or to be filed, will be investigated and resolved in connection with the claims resolution process. Liabilities subject to compromise at December 31, 2018 consisted of the following (in thousands):
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Equity |
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Dec. 31, 2018 | |
Equity [Abstract] | |
Equity | Equity As discussed in “Note 2-Voluntary Reorganization under Chapter 11 of the Bankruptcy Code,” on the Effective Date and pursuant to the terms of the Plan and the Confirmation Order, all of the Predecessor’s common stock and 6.875% Series B Cumulative Convertible Perpetual Preferred Stock was canceled with the former holders thereof not receiving any consideration in respect thereof. Accordingly, the following discussion relates solely to the Predecessor’s common stock and 6.875% Series B Cumulative Convertible Perpetual Preferred Stock prior to such cancellation. 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 10). Convertible Preferred Stock The Company had 1,495,000 shares of 6.875% Series B Cumulative Convertible Perpetual Preferred Stock (the “Series B Preferred Stock”) outstanding as of December 31, 2018 and 2017, all of which were canceled on the Effective Date pursuant to the Plan. The following is a summary of certain terms of the Series B Preferred Stock: Dividends. The Series B Preferred Stock accumulated dividends at an annual rate of 6.875% for each share of Series B Preferred Stock. Dividends were cumulative from the date of first issuance and, to the extent payment of dividends was not prohibited by the Company’s debt agreements, assets were legally available to pay dividends and the Company’s board of directors or an authorized committee of the board declared a dividend payable, the Company paid 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 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 the Series B Preferred Stock beginning with the dividend payment due on April 15, 2016. The Old Loan Agreement prohibited, and the Multidraw Term Loan Agreement also prohibited 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 accumulated. As of December 31, 2018, the Company had deferred eleven quarterly dividend payments and had accrued a $14.6 million payable related to the eleven deferred quarterly dividends and the quarterly dividend that accrued through the bankruptcy filing date. The accrued dividend payable is included in liabilities subject to compromise on the consolidated balance sheet. Mandatory conversion. The Company could, 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 gave the conversion notice equaled or exceeded 130% of the conversion price in effect on each such trading day. Conversion rights. Each share of Series B Preferred Stock could 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 an initial 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 elected 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 would have delivered upon conversion (if any) would be based upon a 20 trading day averaging period. Upon any conversion, the holder would 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 was equal to $50 divided by the conversion price at the time. The conversion price was subject to adjustment upon the occurrence of certain events. |
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 follows:
An aggregate of 2.0 million, 1.6 million and 0.9 million shares of common stock representing options to purchase common stock and unvested shares of restricted common stock for the years ended December 31, 2018, 2017 and 2016, respectively, and common shares issuable upon the assumed conversion of the Series B Preferred Stock totaling 1.3 million shares for each of the periods presented were not included in the computation of diluted earnings per share for the years ended December 31, 2018, 2017 and 2016, respectively, because the inclusion would have been anti-dilutive as a result of the net loss reported for the year. |
Share-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation As discussed in “Note 2-Voluntary Reorganization under Chapter 11 of the Bankruptcy Code”, on the Effective Date and pursuant to the terms of the Plan and the Confirmation Order, all of the Predecessor’s common stock (and any share-based compensation based on such common stock) was canceled with the former holders thereof not receiving any consideration in respect thereof. The Predecessor's share-based compensation plan was also terminated on the Effective Date. Accordingly, the following discussion relates solely to the Predecessor’s share-based compensation plan and share-based compensation issued and outstanding prior to such cancellation. The Company accounts for share-based compensation in accordance with ASC Topic 718. Share-based compensation cost is recognized over the requisite service period. Compensation cost for awards with graded vesting is recognized using the accelerated attribution method. Share-based compensation cost is reflected as a component of general and administrative expenses. A detail of share-based compensation cost for the years ended December 31, 2018, 2017 and 2016 is as follows (in thousands):
During the years ended December 31, 2017 and 2016, the Company capitalized $103,000 and $106,000, respectively, of compensation cost related to cash settled restricted stock units to oil and gas properties. No such amounts were capitalized during the year ended December 31, 2018. During the years ended December 31, 2018, 2017 and 2016, the Company recorded income tax benefits of approximately $101,000, $270,000 and $512,000, respectively, related to share-based compensation expense recognized during those periods. As a result of the adoption of ASU 2016-09 during the year ended December 31, 2017, the Company recognized an additional deferred tax asset of $4.7 million related to net operating loss carryforwards for excess tax benefits on share-based compensation that did not meet the criteria for recognition under previous guidance. Share-Based compensation settled in shares At December 31, 2018, the Company had $0.4 million of unrecognized compensation cost related to unvested restricted stock and stock options. Stock Options Stock options may be granted to employees and consultants and generally vest ratably over a three-year period. Stock options may also be granted to directors and generally vest one year or less from the date of grant to align with their term on the board. Stock options must be exercised within 10 years of the grant date. The exercise price of each option may not be less than the fair market value of a share of common stock on the date of grant. Upon a change in control of the Company, all outstanding options become immediately exercisable. The Company computes the fair value of its stock options using the Black-Scholes option-pricing model assuming an expected term based on historical activity and expected volatility computed using historical stock price fluctuations on a weekly basis for a period of time equal to the expected term of the option. Periodically, the Company adjusts compensation expense based on the difference between actual and estimated forfeitures. The following table outlines the assumptions used in computing the fair value of stock options granted during 2017 and 2016. No such grants were made during 2018.
The following table details stock option activity during the year ended December 31, 2018:
The total fair value of stock options that vested during the years ended December 31, 2018, 2017 and 2016 was $1.2 million, $1.6 million and $0.4 million, respectively. The intrinsic value of stock options exercised was immaterial for all periods presented. The following table summarizes information regarding stock options outstanding at December 31, 2018:
Restricted Stock The Company computes the fair value of its service based restricted stock using the closing price of the Company’s stock at the date of grant. Restricted stock granted to employees generally vests ratably over a three-year period. Restricted stock granted to directors vests one year or less from the date of grant to align with their term on the board. Upon a change in control of the Company, all outstanding shares of restricted stock will become immediately vested. The following table details restricted stock activity during the year ended December 31, 2018:
The weighted average grant date fair value of restricted stock granted during the year ended December 31, 2017 was $1.87 per share. No restricted stock was granted in 2018 and 2016. The total fair value of restricted stock that vested during the years ended December 31, 2018, 2017 and 2016 was $0.1 million, $1.3 million and $2.4 million, respectively. Share-Based compensation settled in cash Restricted Stock Units The Company may grant restricted stock units ("RSUs") to employees that vest ratably over a three-year period. Cash payment will be made to employees on each vesting date based upon the Company's closing stock price on that date. Upon change in control of the Company, all of the RSUs will immediately vest. The Company computes the fair value of the RSUs using the closing price of the Company's stock at the end of each period and records a liability based on the percentage of requisite service rendered at the reporting date. During 2018 and 2017, the Company paid $24,000 and $59,000, respectively, to settle 323,374 and 31,703 RSUs, respectively, that vested during the period. Market Based Restricted Stock Units The Company granted 60,767 market based restricted stock units ("MRSUs") to executive officers during November 2014. The executive officers can earn between 0-200% of the MRSUs granted based on the Company's performance versus a defined peer group. The 2014 MRSUs vested in one-third increments on each of the first, second and third annual anniversaries starting January 1, 2016. Upon change in control of the Company, all of the MRSUs will immediately vest. The number of MRSUs that ultimately vest is based on the Company's total shareholder return in the last 20 days of the fiscal year in relation to the last 20 days of the previous fiscal year in comparison to a group of 12 selected peer stocks of similar sized companies which operate within the same sector. The performance period ended on December 31, 2015 and executive officers earned 50% of the MRSUs. The MRSUs are cash settled on each vesting date based on the number of MRSUs that vest multiplied by the Company's closing stock price. In November 2017, the Company granted an additional 270,269 MRSUs. The performance period ended on December 31, 2018 for these grants and executive officers earned none of the MRSUs. The Company estimates the fair value of the outstanding MRSUs using a Monte Carlo valuation model and records a liability based on the percentage of requisite service rendered at the reporting date. The Monte Carlo valuation model considers such inputs as the stock prices of the Company and its peer group, a risk-free interest rate, and an estimated volatility for the Company and its peer group. As of December 31, 2018, the Company had no liability for RSUs outstanding and as of December 31, 2017, the Company had a liability for RSUs and MRSUs outstanding in the amount of $0.3 million, based upon the closing stock price at December 31, 2018 and December 31, 2017, respectively. The following table details MRSU and RSU activity during the year ended December 31, 2018:
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Asset Retirement Obligation |
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Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation | Asset Retirement Obligation The Company accounts for asset retirement obligations in accordance with ASC Topic 410-20, which requires recording the fair value of an asset retirement obligation associated with tangible long-lived assets in the period incurred. Asset retirement obligations associated with long-lived assets included within the scope of ASC Topic 410-20 are those for which there is a legal obligation to settle under existing or enacted law, statute, written or oral contract or by legal construction under the doctrine of promissory estoppel. The Company has legal obligations to plug, abandon and dismantle existing wells and facilities that it has acquired and constructed. The following table summarizes the changes to the Company’s asset retirement obligation (in thousands):
Divestitures of oil and gas properties during 2018 included $28.2 million as a result of the sale of the Company's Gulf of Mexico assets in January 2018. 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 statement of operations as derivative income (expense). At December 31, 2017, all of the Company's outstanding derivative instruments were designated as cash flow hedges. The Company had no outstanding derivative contracts as of December 31, 2018. Oil and gas sales include additions related to the settlement of gas hedges of $0.8 million, $1.5 million and $1.8 million, for the years ended December 31, 2018, 2017 and 2016, respectively. Oil and gas sales include reductions of $1.4 million related to the settlement of oil hedges for the year ended December 31, 2018. There were no settlements of Ngls for any period presented or oil hedges for the years ended December 31, 2017 and 2016. 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 was reclassified to earnings as the hedged volumes were 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 Sheet at December 31, 2017:
Effect of Cash Flow Hedges on the Consolidated Statement of Operations for years ended December 31, 2018, 2017 and 2016:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and 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 was 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 default risk for derivative liabilities. As a result, the Company designated its commodity derivatives as Level 2 in the fair value hierarchy. The Company had no outstanding derivative contracts at December 31, 2018. The following table summarizes the Company’s assets (liabilities) that are subject to fair value measurement on a recurring basis as of December 31, 2017 (in thousands):
The fair value of the Company's cash and cash equivalents approximated book value at December 31, 2018 and 2017. The fair value of the Multidraw Term Loan Agreement approximated face value as of December 31, 2018 and 2017. The fair value of the Company's 2021 Notes and 2021 PIK Notes was determined based upon market quotes provided by an independent broker, which represents a Level 2 input. The fair value of the 2021 Notes was $2.8 million and $7.3 million and the fair value of the 2021 PIK Notes was $82.5 million and $198.7 million as of December 31, 2018 and 2017, respectively. |
Long-Term Debt |
12 Months Ended |
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Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Predecessor 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 Predecessor 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 Predecessor 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 the 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 2.2 million shares of Predecessor common stock to extinguish approximately $4.8 million of outstanding principal amount of 2021 Notes. The 2021 PIK Notes accrued interest at a rate of 10% per annum on the principal amount and interest was 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 accrued interest at a rate of 10% per annum on the principal amount and interest was 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 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 was reflected as part of the carrying value of the 2021 PIK Notes. Such shortfall was being amortized under the effective interest method over the term of the 2021 PIK Notes. 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 was then reflected as part of the carrying value of the 2021 PIK Notes. The excess carrying value attributable to the remaining 2021 Notes was being amortized under the effective interest method over the term of the 2021 Notes. 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 provided 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”) were permitted to 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 of December 31, 2018, the Company had no borrowing availability under the Multidraw Term Loan Agreement. 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 indentures 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 face value of the 2021 Notes and the 2021 PIK Notes, including accrued PIK interest, is classified as liabilities subject to compromise as of December 31, 2018. The Term Loans are reflected net of $0.3 million and $2.0 million of related unamortized deferred financing costs as of December 31, 2018 and 2017, respectively. The adjustments to write off the remaining unamortized deferred financing costs and carrying value adjustments related to the February Exchange and September Exchange are included in reorganization items in the consolidated statement of operations. Successor Long-Term Debt On the Effective Date and pursuant to the terms of the Plan and the Confirmation Order, the Company entered into the Term Loan Agreement (the “Exit Facility”) with the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent. The Exit Facility provides for a $50 million term loan facility. The proceeds of the Exit Facility were used to repay in full the loans and other obligations under the Multidraw Term Loan Agreement. The maturity date of the Exit Facility is November 8, 2023. The interest rate per annum is equal to (i) in the case of LIBOR Loans (as defined in the Exit Facility), 7.5% per annum and (ii) in the case of Base Rate Loans (as defined in the Exit Facility), 6.5% per annum. The Exit Facility is secured by a first priority lien on substantially all of the Company's assets. The Company is subject to a restrictive covenant under the Exit Facility, consisting of maintaining a ratio of (i) the present value, discounted at 10% per annum, of the estimated future net revenues in respect of its oil and gas properties, before any state, federal, foreign or other income taxes, attributable to total proved reserves, using strip prices then 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 aggregate outstanding principal amount of the term loans to be less than 1.50 to 1.00 as measured on the last day of each calendar. If the Company fails to maintain the ratio, it may either (i) prepay the outstanding term loans such that after giving effect to such prepayment, the financial covenant is met or (ii) be in default under the Exit Facility, in which case the term loans and all other amounts owed pursuant to the Exit Facility would become immediately due and payable. The Exit Facility also contains customary affirmative and negative covenants, including as to compliance with laws (including environmental laws, ERISA and anti-corruption laws), maintenance of required insurance, delivery of quarterly and annual financial statements, maintenance and operation of property (including oil and gas properties), restrictions on the incurrence of liens and indebtedness, entering into mergers, consolidations and sales of assets, and transactions with affiliates and other customary covenants. The Exit Facility contains customary events of default and remedies for credit facilities of this nature. If the Company does not comply with the financial and other covenants in the Exit Facility, the lenders may, subject to customary cure rights, require immediate payment of all amounts outstanding under the Exit Facility. An event of default under the Exit Facility, if not cured or waived, could result in an event of default under the 2024 PIK Notes (as defined below). On the Effective Date and pursuant to the terms of the Plan and the Confirmation Order, the Company entered into an indenture (the “Indenture”) with Wilmington Trust, National Association, as trustee (the “Trustee”) and collateral agent, and issued $80 million of its new 10% Senior Secured PIK Notes due 2024 (the “2024 PIK Notes”) pursuant thereto. Interest on the 2024 PIK Notes accrues at a rate of 10% per annum payable semi-annually in kind (“PIK Interest”) on February 15 and August 15 of each year, beginning on August 15, 2019. At the election of the Board of Directors, so long as the Company has provided notice to the holders of the 2024 PIK Notes and the Trustee of such election at least 30 days prior to any applicable interest payment date, interest on the 2024 PIK Notes for any interest period may instead be payable at the annual rate (i) solely in cash (the “Cash Interest”) or (ii) partially as Cash Interest and partially as PIK Interest. The maturity date of the 2024 Notes is February 15, 2024. The 2024 PIK Notes are secured on a second priority lien basis by the equity of the Company's subsidiary PetroQuest Energy, LLC that also secures the Exit Facility. Pursuant to the terms of an intercreditor agreement, the security interest in those assets that secure the 2024 PIK Notes and the related guarantee will be contractually subordinated to liens thereon that secure the Exit Facility and certain other permitted obligations as set forth in the Indenture. Consequently, the 2024 PIK Notes and the related guarantee will be effectively subordinated to the Exit Facility and such other permitted obligations to the extent of the value of such assets. The Company may, at its option, on any one or more occasions redeem all or a portion of the 2024 PIK Notes issued under the Indenture at the redemption prices set forth below (expressed in percentages of principal amount on the redemption date), plus accrued and unpaid Cash Interest together with an amount of cash equal to all accrued and unpaid PIK Interest on the 2024 PIK Notes to be redeemed to, but not including, the redemption date (subject to the right of holders of the 2024 PIK Notes of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the periods set forth below: Period Redemption Price February 8, 2019 to February 7, 2020 102.000% February 8, 2020 to February 7, 2021 101.000% February 8, 2021 and thereafter 100.000% Upon the occurrence of certain change of control events, any holder of the 2024 PIK Notes will have the right to cause the Company to repurchase all or any part of such holder’s 2024 PIK Notes at a repurchase price payable in cash equal to 101% of the principal amount of the 2024 PIK Notes to be repurchased (including any PIK Notes (as defined in the Indenture) or any increase in principal amount of the 2024 PIK Notes in connection with PIK Interest, plus accrued interest to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the related interest payment date). |
Related Party Transactions |
12 Months Ended |
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Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Two of the Company’s senior officers, Charles T. Goodson and Stephen H. Green, or their affiliates, are working interest owners and overriding royalty interest owners in certain properties operated by the Company or in which the Company also holds a working interest. As working interest owners, they are required to pay their proportionate share of all costs and are entitled to receive their proportionate share of revenues in the normal course of business. As overriding royalty interest owners, they are entitled to receive their proportionate share of revenues in the normal course of business. During 2018, in their capacities as working interest owners or overriding royalty interest owners, revenues, net of costs, were disbursed to Messrs. Goodson and Green, or their affiliates, in the amounts of $0 and $20,000, respectively. During 2017, in their capacities as working interest owners or overriding royalty interest owners, revenues, net of costs, were disbursed to (received from) Messrs. Goodson and Green, or their affiliates, in the amounts of $(107,000) and $41,000, respectively. During 2016, in their capacities as working interest owners or overriding royalty interest owners, revenues, net of costs, were disbursed to (received from) Messrs. Goodson and Green, or their affiliates, in the amounts of $(15,000) and $25,000, respectively. With respect to Mr. Goodson, gross revenues attributable to interests, properties or participation rights held by him prior to joining the Company as an officer and director on September 1, 1998 represent all of the gross revenue received by him during these periods. In its capacity as operator, the Company incurs drilling and operating costs that are billed to its partners based on their respective working interests. At December 31, 2018, the Company’s joint interest billing receivable included no amounts due from the related parties discussed above or their affiliates, attributable to their share of costs. In December 2017, the Company sold certain saltwater disposal assets in East Texas to a third party purchaser. In connection with the sale, the Company also entered into a volumetric commitment to deliver saltwater volumes to the purchaser of the saltwater disposal assets over a six year period. One of the minority owners of the purchaser is the son of Dr. Charles Mitchell, II, a member of our Predecessor's board of directors. The transactions were approved by the Predecessor's Audit Committee. |
Ceiling Test Write-down |
12 Months Ended |
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Dec. 31, 2018 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
Ceiling Test Write-down | Ceiling Test Write-down The Company uses the full cost method to account for its oil and gas properties. Accordingly, the costs to acquire, explore for and develop oil and gas properties are capitalized. Capitalized costs of oil and gas properties, net of accumulated DD&A and related deferred taxes, are limited to the estimated future net cash flows from estimated proved oil and gas reserves, including the effects of cash flow hedges in place, discounted at 10%, plus the lower of cost or fair value of unproved properties, as adjusted for related income tax effects (the full cost ceiling). If capitalized costs exceed the full cost ceiling, the excess is charged to ceiling test write-down of oil and gas properties in the quarter in which the excess occurs. In accordance with SEC requirements, the estimated future net cash flows from estimated proved reserves are based on an average of the first day of the month spot price for a historical 12-month period, adjusted for quality, transportation fees and market differentials. At December 31, 2016, the prices used in computing the estimated future net cash flows from the Company’s estimated proved reserves, including the effect of hedges in place at that date, averaged $2.51 per Mcf of natural gas, $40.85 per barrel of oil and $1.82 per Mcfe of Ngl. As a result of lower commodity prices and their negative impact on the Company's estimated proved reserves and estimated future net cash flows, the Company recognized ceiling test write-downs of approximately $40.3 million during the year ended December 31, 2016. The Company’s cash flow hedges in place decreased these ceiling test write-downs by approximately $8.0 million for the year ended December 31, 2016. The Company did not recognize a ceiling test write-down during the years ended December 31, 2018 and 2017. |
Other Comprehensive Income (Loss) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the year ended December 31, 2016 (in thousands):
The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the year ended December 31, 2017 (in thousands):
The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the year ended December 31, 2018 (in thousands):
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The Company typically provides for income taxes at the statutory federal income tax 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, the Company has incurred a three-year cumulative loss. Because of the impact the cumulative loss had 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, of which there were none as of December 31, 2018. The Company had a valuation allowance of $118.7 million as of December 31, 2018 and $115.9 million as of December 31, 2017. 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. As a result of the adoption of ASU 2016-09 during the year ended December 31, 2017, the Company recognized an additional deferred tax asset of $4.7 million related to net operating loss carryforwards for excess tax benefits on share-based compensation that did not meet the criteria for recognition under previous guidance. This additional deferred tax asset was fully offset by the related adjustment to the Company's valuation allowance. The cumulative effect adjustment to record the previously unrecognized excess tax benefits and the related adjustment to the valuation allowance, were recorded in retained earnings on the date of adoption. An analysis of the Company’s deferred tax assets and liabilities follows (amounts in thousands):
At December 31, 2018, the Company had approximately $355.4 million of federal net operating loss carryforwards. If not utilized, approximately $6.9 million of such carryforwards would expire in 2025, $328.2 million would expire by the year 2037 and $20.3 million does not expire and is subject to a limitation of 80% of taxable income. The Company also had approximately $180.7 million of Louisiana state net operating loss carryforwards as of December 31, 2018. If not utilized, approximately $0.3 million of such carryforwards would expire during 2019 and the remainder would expire by the year 2038. The Company has available for tax reporting purposes $28.2 million in statutory depletion deductions that may be carried forward indefinitely. The Company had approximately $43.9 million of carryforwards related to the limitation on deductible interest expense. The interest expense carryforward does not expire and is subject to a limitation of 30% of adjusted taxable income. Income tax expense (benefit) for each of the years ended December 31, 2018, 2017 and 2016 was different than the amount computed using the federal statutory rate (21%) for the following reasons (amounts in thousands):
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies The Company is involved in litigation relating to claims arising out of its operations in the normal course of business, including worker's compensation claims, tort claims and contractual disputes. Some of the existing known claims against us are covered by insurance subject to the limits of such policies and the payment of deductible amounts by us. Although we cannot predict the outcome of these proceedings with certainty, management believes that the ultimate disposition of all uninsured or unindemnified matters resulting from existing litigation will not have a material adverse effect on the Company's business or financial position. The commencement of the Chapter 11 Cases automatically stayed litigation and claims that were or could have been brought prior to November 6, 2018. The claims related to two class action lawsuits filed in October 2016 will be treated as general unsecured claims with a maximum amount that may be distributed to the holders of such claims not to exceed $400,000 under the Plan. Lease Commitments The Company has operating leases for office space and equipment, which expire on various dates through 2023. Future minimum lease commitments as of December 31, 2018 under these operating leases are as follows (in thousands):
Total rent expense under operating leases was approximately $1.5 million for each of 2018, 2017 and 2016, respectively. Subsequent to December 31, 2018 and as part of the Chapter 11 Cases, the Company entered into a lease amendment with regard to its office space in The Woodlands, Texas, which reduced the above noted lease commitments by $1.3 million thru 2022. |
Supplementary Information on Oil and Gas Operations—Unaudited |
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Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplementary Information of Oil and Gas Operations—Unaudited | Supplementary Information on Oil and Gas Operations—Unaudited The following tables disclose certain financial data relative to the Company’s oil and gas producing activities, which are located onshore and offshore in the continental United States: Costs Incurred in Oil and Gas Property Acquisition, Exploration and Development Activities (amounts in thousands)
At December 31, 2018 and 2017, unevaluated oil and gas properties totaled $23.5 million and $21.9 million, respectively, and were not subject to depletion. Unevaluated costs at December 31, 2018 included $0.9 million of costs related to wells in progress at year-end. At December 31, 2017, unevaluated costs included $0.7 million related to two facilities in progress at year-end, which were transferred to evaluated oil and gas properties during 2018. The Company capitalized $1.8 million, $1.6 million and $0.9 million of interest during 2018, 2017 and 2016, respectively. Of the total unevaluated oil and gas property costs of $23.5 million at December 31, 2018, $7.4 million, or 32%, was incurred in 2018, $13.9 million, or 59%, was incurred in 2017 and $2.2 million, or 9%, was incurred in prior years. In connection with the sale of the Company's Gulf of Mexico assets, approximately $5.5 million, or 25% of the total unevaluated balance at December 31, 2017, was transferred to evaluated oil and gas properties in 2018. Of the remaining unevaluated balance at December 31, 2018, the Company expects the majority of the costs will be evaluated within the next three years, including $2.7 million expected to be evaluated during 2019. Oil and Gas Reserve Information The Company’s net proved oil and gas reserves at December 31, 2018 have been estimated by independent petroleum engineers in accordance with guidelines established by the SEC using a historical 12-month, first of month, average pricing assumption. The estimates of proved oil and gas reserves constitute those quantities of oil, gas,and natural gas liquids, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. However, there are numerous uncertainties inherent in estimating quantities of proved reserves and in providing the future rates of production and timing of development expenditures. The following reserve data represents estimates only and should not be construed as being exact. In addition, the present values should not be construed as the current market value of the Company’s oil and gas properties or the cost that would be incurred to obtain equivalent reserves. The following table sets forth an analysis of the Company’s estimated quantities of net proved and proved developed oil (including condensate), gas and natural gas liquid reserves, all located onshore and offshore in the continental United States:
Year Ended December 31, 2018 During 2018, the Company’s estimated proved reserves decreased by 16%. The decrease in reserves was the result of 10.1 Bcfe removed as a result of the sale of our Gulf of Mexico assets in January 2018 and 7.3 Bcfe removed due to the selldown of certain of our PUDs in East Texas. Partially offsetting these decreases was an increase of 11.1 Bcfe of PUD reserves from third party drilling as well as the Company's leasing efforts in East Texas. Overall, the Company had a 100% drilling success rate on two wells completed during 2018. Year Ended December 31, 2017 During 2017, the Company’s estimated proved reserves increased by 35%. The increase in reserves was the result of 73.9 Bcfe added due to the Company's drilling program in East Texas where it drilled eight gross wells during 2017. In response to low ethane prices, during 2017 the Company elected to bypass ethane processing on a portion of its East Texas production. As a result, the Company reduced its estimated proved ngl reserves to reflect the assumption that ethane would continue to not be recovered as natural gas liquids. Overall, the Company had a 100% drilling success rate during 2017. Year Ended December 31, 2016 During 2016, the Company's estimated proved reserves decreased by 35% primarily due to the divestiture of the Company's remaining Oklahoma assets and significant reductions in capital spending during 2016. Extensions, discoveries and other additions of 1.5 Bcfe were primarily due to the successful completion of the Company's final Oklahoma wells. Revisions of previous estimates included the reclassification of certain PUD reserves to probable reserves as a result of the Company's assessment of the timing of development. Overall, the Company had a 100% drilling success rate during 2016 on 5 gross wells drilled. The following tables (amounts in thousands) present the standardized measure of future net cash flows related to proved oil and gas reserves together with changes therein, as defined by ASC Topic 932. Future production and development costs are based on current costs with no escalations. Estimated future cash flows have been discounted to their present values based on a 10% annual discount rate. Standardized Measure
Changes in Standardized Measure
The historical twelve-month, first day of the month, average prices of oil, gas and natural gas liquids used in determining standardized measure were:
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Summarized Quarterly Financial Information - Unaudited |
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Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Quarterly Financial Information - Unaudited | Summarized Quarterly Financial Information - Unaudited Summarized quarterly financial information is as follows (amounts in thousands except per share data):
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Organization and Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of PetroQuest and its subsidiaries, PetroQuest Energy, L.L.C., PetroQuest Oil & Gas, L.L.C, Pittrans, Inc. and TDC Energy LLC (collectively, the "Company"). All intercompany accounts and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("US GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates of proved oil and gas reserves and future net cash flows from estimated proved reserves are based on geological and engineering data and depend upon a number of variable factors and assumptions. Changes in estimated proved oil and gas reserves used in the calculation of depreciation, depletion and amortization of oil and gas properties or the present value of the estimated future net cash flows from estimated proved reserves used in the ceiling test could have a material impact on future results of operations. |
Oil and Gas Properties | Oil and Gas Properties The Company utilizes the full cost method of accounting, which involves capitalizing all acquisition, exploration and development costs incurred for the purpose of finding oil and gas reserves including the costs of drilling and equipping productive wells, dry hole costs, lease acquisition costs and delay rentals. The Company also capitalizes the portion of general and administrative costs that can be directly identified with acquisition, exploration or development of oil and gas properties. Unevaluated property costs are transferred to evaluated property costs at such time as wells are completed on the properties, the properties are sold, or management determines these costs to have been impaired. Interest is capitalized on unevaluated property costs. Transactions involving sales of reserves in place are recorded as adjustments to accumulated depreciation, depletion and amortization with no gain or loss recognized, unless such adjustments would cause a significant alteration in the relationship between capitalized costs and proved reserves. Depreciation, depletion and amortization of oil and gas properties is computed using the unit-of-production method based on estimated proved reserves. All costs associated with evaluated oil and gas properties, including an estimate of future development costs associated therewith, are included in the depreciable base. The costs of investments in unevaluated properties are excluded from this calculation until the related properties are evaluated, proved reserves are established or the properties are determined to be impaired. Proved oil and gas reserves are estimated annually by independent petroleum engineers. The capitalized costs of proved oil and gas properties cannot exceed the present value of the estimated net future cash flows from proved reserves based on historical twelve-month, first day of the month, average oil, gas and natural gas liquid prices, including the effect of hedges in place (the full cost ceiling). If the capitalized costs of proved oil and gas properties exceed the full cost ceiling, the Company is required to write-down the value of its oil and gas properties to the full cost ceiling amount. The Company follows the provisions of Staff Accounting Bulletin (“SAB”) No. 106, regarding the application of ASC Topic 410-20 by companies following the full cost accounting method. SAB No. 106 indicates that estimated future dismantlement and abandonment costs that are recorded on the balance sheet are to be included in the costs subject to the full cost ceiling limitation. The estimated future cash outflows associated with settling the recorded asset retirement obligations are excluded from the computation of the present value of estimated future net revenues used in applying the ceiling test. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a stated maturity of three months or less to be cash and cash equivalents. The majority of the Company’s cash and cash equivalents are in overnight securities made through its commercial bank accounts, which result in available funds the next business day. |
Other Property and Equipment | Other Property and Equipment The costs related to other furniture and fixtures are depreciated on a straight line basis over estimated useful lives ranging from three to five years. |
Accounts Receivable | Accounts Receivable In its capacity as operator, the Company incurs drilling and operating costs that are billed to its partners based on their respective working interests. |
Deposit For Surety Bonds | Deposit For Surety Bonds The deposit for surety bonds of $3.6 million and $8.3 million at December 31, 2018 and 2017, respectively, represent cash collateral paid with respect to the Company's surety bonds which secured its offshore decommissioning obligations. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740. Provisions for income taxes include deferred taxes resulting primarily from temporary differences due to different reporting methods for oil and gas properties for financial reporting purposes and income tax purposes. For financial reporting purposes, all exploratory and development expenditures are capitalized and depreciated, depleted and amortized on the unit-of-production method. For income tax purposes, only the equipment and leasehold costs relative to successful wells are capitalized and recovered through depreciation or depletion. Generally, most other exploratory and development costs are charged to expense as incurred; however, the Company may use certain provisions of the Internal Revenue Code that allow capitalization of intangible drilling costs. Other financial and income tax reporting differences occur primarily as a result of statutory depletion. Deferred tax assets are assessed for realizability and a valuation allowance is established for any portion of the asset for which it is more likely than not will not be realized. |
Revenue Recognition | Revenue Recognition The Company records natural gas and oil revenue in accordance with Accounting Standards Update ("ASU") 2014-09 "Revenue from Contracts with Customers". 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. The Company's sources of revenue are oil, natural gas and natural gas liquids ("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. |
Concentrations | Concentrations The Company’s production is sold on month to month contracts at prevailing prices. The Company attempts to diversify its sales among multiple purchasers and obtain credit protection such as letters of credit and parental guarantees when necessary. |
Derivatives Instruments | Derivative Instruments Under ASC Topic 815, the nature of a derivative instrument must be evaluated to determine if it qualifies for hedge accounting treatment. Instruments qualifying for hedge accounting treatment are recorded as an asset or liability measured at fair value and subsequent changes in fair value are recognized in stockholders’ equity through other comprehensive income (loss), net of related taxes, to the extent the hedge is effective. If a hedge becomes ineffective because the hedged production does not occur, or the hedge otherwise does not qualify for hedge accounting treatment, the changes in the fair value of the derivative are recorded in the statement of operations as derivative income (expense). The Company does not offset fair value amounts recognized for derivative instruments. The Company’s hedges are specifically referenced to NYMEX prices for oil and natural gas. The effectiveness of hedges is evaluated at the time the contracts are entered into, as well as periodically over the life of the contracts, by analyzing the correlation between NYMEX prices and the posted prices received from the designated production. Through this analysis, the Company is able to determine if a high correlation exists between the prices received for its designated production and the NYMEX prices at which the hedges will be settled. At December 31, 2018, the Company had no derivative instruments in place. See Note 8 for further discussion of the Company’s derivative instruments. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In February 2016, the Financial Accounting Standards Board ("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. This ASU supersedes the lease requirements in Topic 840, Leases, and requires that a lessee recognize a right-of-use asset and lease liability for leases that do not meet the definition of a short-term lease. The right-of-use asset and lease liability are to be measured on the balance sheet at the present value of the lease payments. For income statement purposes, ASU 2016-02 retains a dual model requiring leases to be classified as either operating or finance within the Company’s consolidated statements of operations. Lease costs for operating leases are recognized as a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. For finance leases, interest expense is recognized on the lease liability separately from amortization of the right-to-use asset. ASU 2016-02 does not apply to mineral leases for oil and natural gas properties, but does apply to equipment used to explore and develop oil and natural gas reserves. This ASU is effective for fiscal years beginning after December 15, 2018, including the first quarter of 2019. The Company will adopt this standard using the modified retrospective method applied to all leases that exist on January 1, 2019. The Company made certain elections allowing it not to reassess contracts that commenced prior to adoption and to not recognize right-of-use assets or lease liabilities for short-term leases. Upon adoption, the Company expects the right-to-use asset and lease liability reported on its consolidated financial statements to be immaterial. 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. |
Organization and Summary of Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table includes a disaggregation of revenue by product including the effects of hedges in place (in thousands):
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Schedule of significant concentration risk | The following table identifies customers from whom the Company derived 10% or more of its oil and gas revenues during the years presented. Based on the availability of other customers, the Company does not believe the loss of any of these customers would have a significant effect on its business or financial condition.
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Voluntary Reorganization under Chapter 11 of the Bankruptcy Code (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||
Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Liabilities Subject To Compromise | Liabilities subject to compromise at December 31, 2018 consisted of the following (in thousands):
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Earnings Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 follows:
|
Share-Based Compensation (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of share-based compensation | A detail of share-based compensation cost for the years ended December 31, 2018, 2017 and 2016 is as follows (in thousands):
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Schedule of stock option valuation assumptions | The following table outlines the assumptions used in computing the fair value of stock options granted during 2017 and 2016. No such grants were made during 2018.
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Schedule of stock options activity | The following table details stock option activity during the year ended December 31, 2018:
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Schedule of stock option plans, by exercise price range | The following table summarizes information regarding stock options outstanding at December 31, 2018:
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Schedule of restricted stock units activity | The following table details restricted stock activity during the year ended December 31, 2018:
The following table details MRSU and RSU activity during the year ended December 31, 2018:
|
Asset Retirement Obligation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes to the Company's asset retirement obligation liability | The following table summarizes the changes to the Company’s asset retirement obligation (in thousands):
|
Derivative Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 Sheet at 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 Statement of Operations for years ended December 31, 2018, 2017 and 2016:
|
Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Valuation of Derivatives | The following table summarizes the Company’s assets (liabilities) that are subject to fair value measurement on a recurring basis as of December 31, 2017 (in thousands):
|
Other Comprehensive Income (Loss) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 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 year ended December 31, 2016 (in thousands):
The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the year ended December 31, 2017 (in thousands):
The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the year ended December 31, 2018 (in thousands):
|
Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Taxes | An analysis of the Company’s deferred tax assets and liabilities follows (amounts in thousands):
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Income Tax Reconciliation | Income tax expense (benefit) for each of the years ended December 31, 2018, 2017 and 2016 was different than the amount computed using the federal statutory rate (21%) for the following reasons (amounts in thousands):
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Commitments | Future minimum lease commitments as of December 31, 2018 under these operating leases are as follows (in thousands):
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Supplementary Information on Oil and Gas Operations—Unaudited (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Costs incurred in oil and gas property acquisition | The following tables disclose certain financial data relative to the Company’s oil and gas producing activities, which are located onshore and offshore in the continental United States: Costs Incurred in Oil and Gas Property Acquisition, Exploration and Development Activities (amounts in thousands)
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Schedule of proved developed reserve quantities | The following table sets forth an analysis of the Company’s estimated quantities of net proved and proved developed oil (including condensate), gas and natural gas liquid reserves, all located onshore and offshore in the continental United States:
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Standardized measure of discounted future cash flows | Standardized Measure
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Schedule of changes in standardized measure of discounted future net cash flows | Changes in Standardized Measure
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Average sales price and average production costs | The historical twelve-month, first day of the month, average prices of oil, gas and natural gas liquids used in determining standardized measure were:
|
Summarized Quarterly Financial Information - Unaudited (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | Summarized quarterly financial information is as follows (amounts in thousands except per share data):
|
Organization and Summary of Significant Accounting Policies - Other Property and Equipment (Details) - Furniture and Fixtures |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 3 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 5 years |
Organization and Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue receivable | $ 6,364 | $ 15,340 | $ 6,364 | $ 15,340 | |||||||
Revenues | 19,789 | $ 20,886 | $ 21,507 | $ 24,917 | $ 35,080 | $ 28,184 | $ 24,251 | $ 20,772 | 87,099 | 108,287 | $ 66,667 |
Total oil sales | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue receivable | 1,100 | 1,100 | |||||||||
Revenues | 21,027 | 31,258 | 20,614 | ||||||||
Total gas sales | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue receivable | 4,800 | 4,800 | |||||||||
Revenues | 50,768 | 60,922 | 37,963 | ||||||||
Total ngl sales | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue receivable | $ 500 | 500 | |||||||||
Revenues | $ 15,303 | $ 16,107 | $ 8,090 | ||||||||
Minimum | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue recognized, period | 1 month | ||||||||||
Maximum | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue recognized, period | 2 months |
Organization and Summary of Significant Accounting Policies - Concentrations (Details) - Oil and Gas Revenue - Customer Concentration Risk |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Superior Natural Gas | |||
Concentration Risk [Line Items] | |||
Net oil and gas revenues (percent) | 26.00% | 29.00% | 14.00% |
Shell Trading Company | |||
Concentration Risk [Line Items] | |||
Net oil and gas revenues (percent) | 21.00% | 24.00% | 23.00% |
Texla Energy Management | |||
Concentration Risk [Line Items] | |||
Net oil and gas revenues (percent) | 16.00% | ||
Harvest Pipeline Company | |||
Concentration Risk [Line Items] | |||
Net oil and gas revenues (percent) | 12.00% | ||
Laclede Energy Resources | |||
Concentration Risk [Line Items] | |||
Net oil and gas revenues (percent) | 17.00% | ||
BG Group | |||
Concentration Risk [Line Items] | |||
Net oil and gas revenues (percent) | 10.00% |
Organization and Summary of Significant Accounting Policies - Other Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Deposit for surety bonds | $ 3,550 | $ 8,300 |
Other Noncurrent Assets | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Deposit for surety bonds | $ 8,300 |
Voluntary Reorganization under Chapter 11 of the Bankruptcy Code - Additional Information (Details) - Payment in Kind (PIK) Note - 10% Senior Secured PIK Notes due 2021 - USD ($) $ in Millions |
Sep. 27, 2016 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Class of Stock [Line Items] | |||
Stated interest rate | 10.00% | 10.00% | |
PIK Interest | |||
Class of Stock [Line Items] | |||
Stated interest rate | 10.00% | ||
Cash interest payment due | $ 14.2 | ||
September Exchange and Consent Solicitation | PIK Interest | |||
Class of Stock [Line Items] | |||
Stated interest rate | 1.00% | ||
Basis spread on variable rate | 9.00% |
Equity - Common Stock (Details) shares in Millions |
12 Months Ended |
---|---|
Dec. 31, 2018
shares
| |
Austin Chalk Acreage | |
Class of Stock [Line Items] | |
Common shares issued in connection with acquisition | 2.0 |
Earnings Per Share - Reconciliation Between Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
A reconciliation between basic and diluted earnings per share computations | |||||||||||
Net loss available to common stockholders | $ (4,117) | $ (4,979) | $ (2,611) | $ (2,212) | $ (389) | $ (3,085) | $ (3,385) | $ (4,918) | $ (13,919) | $ (11,776) | $ (96,245) |
Net loss available to common stockholders (in shares) | 25,581 | 21,330 | 18,354 | ||||||||
Net loss available to common stockholders (in usd per share) | $ (0.16) | $ (0.19) | $ (0.10) | $ (0.09) | $ (0.02) | $ (0.15) | $ (0.16) | $ (0.23) | $ (0.54) | $ (0.55) | $ (5.24) |
Stock options, effect of dilutive securities | $ 0 | $ 0 | |||||||||
Stock options, effect of dilutive securities, (in shares) | 0 | 0 | |||||||||
Attributable to participating securities | $ 0 | $ 0 | |||||||||
Restricted stock, effect of dilutive securities (in shares) | 0 | 0 | 0 | ||||||||
DILUTED EPS, Loss | $ (13,919) | $ (11,776) | $ (96,245) | ||||||||
DILUTED EPS (in shares) | 25,581 | 21,330 | 18,354 | ||||||||
DILUTED EPS, per share amount (in usd per share) | $ (0.16) | $ (0.19) | $ (0.10) | $ (0.09) | $ (0.02) | $ (0.15) | $ (0.16) | $ (0.23) | $ (0.54) | $ (0.55) | $ (5.24) |
Earnings Per Share - Additional Information (Details) - shares shares in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Restricted Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common stock issuable on conversion (in shares) | 2.0 | 1.6 | 0.9 |
Convertible preferred stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common stock issuable on conversion (in shares) | 1.3 |
Share-Based Compensation - Share based Compensation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Summary of share-based compensation | |||
Share-based compensation | $ 725 | $ 1,649 | $ 1,687 |
Incentive Stock Options (share settled) | |||
Summary of share-based compensation | |||
Share-based compensation | 407 | 820 | 206 |
Non-Qualified Stock Options (share settled) | |||
Summary of share-based compensation | |||
Share-based compensation | 94 | 387 | 164 |
Restricted stock (share settled) | |||
Summary of share-based compensation | |||
Share-based compensation | 465 | 197 | 1,073 |
Cash settled stock units | |||
Summary of share-based compensation | |||
Share-based compensation | $ (241) | $ 245 | $ 244 |
Share-Based Compensation - Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Number of Shares | |||
Outstanding at beginning of year (in shares) | 1,167,320 | ||
Canceled/forfeited (in shares) | (349,077) | ||
Lapse of restrictions (in shares) | (330,838) | ||
Outstanding at end of year (in shares) | 487,405 | 1,167,320 | |
Restricted Stock | |||
Number of Shares | |||
Outstanding at beginning of year (in shares) | 487,502 | ||
Canceled/forfeited (in shares) | (34,946) | ||
Lapse of restrictions (in shares) | (37,500) | ||
Outstanding at end of year (in shares) | 415,056 | 487,502 | |
Wgtd. Avg. Fair Value per Share | |||
Outstanding at beginning of year (in dollars per share) | $ 1.87 | ||
Cancelled/forfeited (in dollars per share) | 1.85 | ||
Lapse of restrictions (in dollars per share) | 2.15 | ||
Outstanding at end of year (in dollars per share) | $ 1.85 | $ 1.87 | |
Additional Information | |||
Weighted average grant date fair value (in dollars per share) | $ 1.87 | ||
Total value of stock that vested | $ 0.1 | $ 1.3 | $ 2.4 |
Share-Based Compensation - Restricted Stock Units (Details) - shares |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2017 |
Nov. 30, 2014 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Number of Shares | ||||
Outstanding at beginning of year (in shares) | 1,167,320 | |||
Granted (in shares) | 0 | |||
Canceled/forfeited (in shares) | (349,077) | |||
Vested/Paid (in shares) | (330,838) | |||
Outstanding at end of year (in shares) | 487,405 | 1,167,320 | ||
MRSU | ||||
Number of Shares | ||||
Outstanding at beginning of year (in shares) | 277,733 | |||
Granted (in shares) | 270,269 | 60,767 | 0 | |
Canceled/forfeited (in shares) | (270,269) | |||
Vested/Paid (in shares) | (7,464) | |||
Outstanding at end of year (in shares) | 0 | 277,733 | ||
RSU | ||||
Number of Shares | ||||
Outstanding at beginning of year (in shares) | 889,587 | |||
Granted (in shares) | 0 | |||
Canceled/forfeited (in shares) | (78,808) | |||
Vested/Paid (in shares) | (323,374) | (31,703) | ||
Outstanding at end of year (in shares) | 487,405 | 889,587 |
Asset Retirement Obligation (Details) - USD ($) $ in Thousands |
1 Months Ended | 12 Months Ended | |
---|---|---|---|
Jan. 31, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Changes to the Company's asset retirement obligation liability | |||
Asset retirement obligation, beginning of period | $ 31,310 | $ 31,310 | $ 36,610 |
Liabilities incurred | 7 | 574 | |
Liabilities settled | (863) | (3,364) | |
Accretion expense | 322 | 2,252 | |
Revisions in estimated cash flows | (62) | (4,514) | |
Divestiture of oil and gas properties | (28,234) | (248) | |
Asset retirement obligation, end of period | 2,480 | 31,310 | |
Less: current portion of asset retirement obligation | (183) | (687) | |
Long-term asset retirement obligation | $ 2,297 | $ 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 - Effect of Cash Flow Hedges on the Balance Sheet (Details) - Designated as Hedging Instrument - Commodity Derivatives $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Derivative asset | |
Effect of Cash Flow Hedges on the Consolidated Balance Sheet | |
Derivative asset | $ 1,174 |
Derivative liability | |
Effect of Cash Flow Hedges on the Consolidated Balance Sheet | |
Derivative liability | $ (731) |
Derivative Instruments - Effect of Cash Flow Hedges on the Statement of Operations (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | $ (278) | $ 5,028 | $ (5,697) |
Designated as Hedging Instrument | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | (990) | 6,654 | (4,447) |
Designated as Hedging Instrument | Oil and gas sales | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain (Loss) Reclassified into Income | $ (622) | $ 1,461 | $ 1,811 |
Derivative Instruments - Narrative (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Jun. 14, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Gas hedges | ||||
Derivatives, Fair Value [Line Items] | ||||
Net settlement of hedges | $ 800,000 | $ 1,500,000 | $ 1,800,000 | |
Crude Oil | ||||
Derivatives, Fair Value [Line Items] | ||||
Net settlement of hedges | $ (1,427,540) | $ 0 | $ 0 | |
Koch Supply & Trading LP | ||||
Derivatives, Fair Value [Line Items] | ||||
Net settlement of hedges | $ 500,000 |
Fair Value Measurements - Commodity Derivatives at Fair Value (Details) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Quoted Prices in Active Markets (Level 1) | |
Net valuation of the Company's derivatives subject to fair value measurement on a recurring basis | |
Commodity derivatives | $ 0 |
Significant Other Observable Inputs (Level 2) | |
Net valuation of the Company's derivatives subject to fair value measurement on a recurring basis | |
Commodity derivatives | 443 |
Significant Unobservable Inputs (Level 3) | |
Net valuation of the Company's derivatives subject to fair value measurement on a recurring basis | |
Commodity derivatives | $ 0 |
Fair Value Measurements - Fair Value and Carrying Value (Details) - Fair Value - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Senior Notes | 2021 Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 2.8 | $ 7.3 |
Payment in Kind (PIK) Note | 2021 PIK Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 82.5 | $ 198.7 |
Long-Term Debt - Face Value to Carrying Value Reconciliation (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
Feb. 17, 2016 |
Jul. 03, 2013 |
Aug. 19, 2010 |
---|---|---|---|---|---|
Senior Notes | 10% Senior Unsecured Notes Due 2017 | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 200,000,000 | $ 150,000,000 | |||
Long-term debt | $ 135,600,000 | ||||
Term Loan | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Unamortized deferred finance costs | $ (300,000) | $ (2,000,000) |
Related Party Transactions (Details) - Officer $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018
USD ($)
party
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Related Party Transaction [Line Items] | |||
Number of related parties | party | 2 | ||
Mr. Goodson | |||
Related Party Transaction [Line Items] | |||
Proceeds from affiliates | $ 0 | $ (107) | $ (15) |
Mr. Green | |||
Related Party Transaction [Line Items] | |||
Payments of distributions to related parties | $ 20 | $ 41 | $ 25 |
Ceiling Test Write-down (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
$ / mcf
$ / bbl
$ / Mcfe
|
|
Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Line Items] | |||
Rate for discounting future cash flows | 10.00% | ||
Ceiling test write-down | $ 0 | $ 0 | $ 40,304,000 |
Mcf of natural gas | |||
Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Line Items] | |||
Average sales prices (usd per unit) | $ / mcf | 2.51 | ||
Barrel of oil | |||
Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Line Items] | |||
Average sales prices (usd per unit) | $ / bbl | 40.85 | ||
Mcfe of natural gas liquids | |||
Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Line Items] | |||
Average sales prices (usd per unit) | $ / Mcfe | 1.82 | ||
Cash Flow Hedging | Commodity Contract | |||
Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Line Items] | |||
Ceiling test write-downs decrease | $ 8,000,000 |
Income Taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 86,046 | $ 78,541 |
Percentage depletion carryforward | 6,011 | 5,701 |
Interest expense carryforward | 10,540 | 0 |
Contributions carryforward and other | 194 | 192 |
Oil and gas properties | 3,673 | 8,279 |
Asset retirement obligation | 602 | 7,602 |
Derivatives | 0 | (107) |
Share-based compensation | 1,403 | 1,269 |
Original issue discount on debt exchanges | 9,815 | 14,429 |
Other | 432 | 0 |
Valuation allowance | (118,716) | (115,906) |
Deferred tax asset (liability) | $ 0 | $ 0 |
Income Taxes - Income Tax Expense (Benefit) Reconciliation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Amount computed using the statutory rate | $ (1,973) | $ (2,655) | $ (31,623) |
Impact of rate change on deferred tax | 0 | 64,915 | 0 |
State & local taxes | (1,731) | (368) | (2,000) |
Percentage depletion carryforward | (256) | (66) | (163) |
Non-deductible stock option expense | 98 | 305 | 77 |
Share-based compensation | 0 | 64 | 707 |
Restructuring costs | 1,528 | 0 | 0 |
Other | 93 | (21) | 1,415 |
Change in valuation allowance | 2,393 | (63,123) | 32,130 |
Income tax expense (benefit) | $ 152 | $ (949) | $ 543 |
Commitments and Contingencies - Litigation (Details) - Class Action Lawsuits, General Unsecured Claims - Pending Litigation |
Oct. 01, 2016
claim
|
Dec. 31, 2018
USD ($)
|
---|---|---|
Loss Contingencies [Line Items] | ||
Number of claims filed | claim | 2 | |
Maximum | ||
Loss Contingencies [Line Items] | ||
Estimate of possible loss | $ | $ 400,000 |
Commitments and Contingencies - Lease Commitments (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2019 | $ 1,240 |
2020 | 1,173 |
2021 | 445 |
2022 | 431 |
2023 | 392 |
Thereafter | 0 |
Total | 3,681 |
Operating leases rent expense | 1,500 |
Lease amendment, decrease in rent expense | $ 1,300 |
Supplementary Information on Oil and Gas Operations—Unaudited - Costs Incurred (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018
USD ($)
$ / Mcfe
|
Dec. 31, 2017
USD ($)
$ / Mcfe
|
Dec. 31, 2016
USD ($)
$ / Mcfe
|
|
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |||
Acquisition costs: Proved | $ 241 | $ 1,330 | $ 3,346 |
Acquisition costs: Unproved | 6,190 | 12,762 | 2,197 |
Divestiture of proved leasehold | (2,604) | (4,795) | (7,000) |
Exploration costs: Proved | (51) | 9,466 | 715 |
Exploration costs: Unproved | 233 | (287) | 603 |
Development costs (2) | (18,928) | 32,622 | 1,522 |
Capitalized general and administrative and interest costs | 8,070 | 8,269 | 7,558 |
Total costs incurred | (6,849) | 59,367 | 8,941 |
Accumulated depreciation, depletion and amortization (DD&A) | |||
Balance, beginning of year | (1,285,660) | (1,243,286) | (1,157,455) |
Provision for DD&A | (22,410) | (31,667) | (27,962) |
Ceiling test writedown | 0 | 0 | (40,304) |
Sale of proved properties and other | 6,478 | (10,707) | (17,565) |
Balance, end of year | $ (1,301,592) | $ (1,285,660) | $ (1,243,286) |
DD&A per Mcfe (usd per mcfe) | $ / Mcfe | 1.05 | 1.15 | 1.19 |
Supplementary Information on Oil and Gas Operations—Unaudited - Standardized Measure (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves, Future Net Cash Flows [Abstract] | ||||
Future cash flows | $ 482,766 | $ 539,244 | $ 299,035 | |
Future production costs | (171,999) | (184,171) | (117,283) | |
Future development costs | (73,258) | (128,447) | (83,720) | |
Future income taxes | 0 | 0 | 0 | |
Future net cash flows | 237,509 | 226,626 | 98,032 | |
10% annual discount | (113,484) | (99,329) | (30,763) | |
Standardized measure of discounted future net cash flows | $ 124,025 | $ 127,297 | $ 67,269 | $ 127,685 |
Summarized Quarterly Financial Information - Unaudited (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 19,789 | $ 20,886 | $ 21,507 | $ 24,917 | $ 35,080 | $ 28,184 | $ 24,251 | $ 20,772 | $ 87,099 | $ 108,287 | $ 66,667 |
Loss from operations | 701 | (3,657) | (1,326) | (821) | 221 | (1,885) | (2,289) | (3,633) | (5,103) | (7,586) | (90,353) |
Loss available to common stockholders | $ (4,117) | $ (4,979) | $ (2,611) | $ (2,212) | $ (389) | $ (3,085) | $ (3,385) | $ (4,918) | $ (13,919) | $ (11,776) | $ (96,245) |
Loss per share, Basic (in usd per share) | $ (0.16) | $ (0.19) | $ (0.10) | $ (0.09) | $ (0.02) | $ (0.15) | $ (0.16) | $ (0.23) | $ (0.54) | $ (0.55) | $ (5.24) |
Loss per share, Diluted (in usd per share) | $ (0.16) | $ (0.19) | $ (0.10) | $ (0.09) | $ (0.02) | $ (0.15) | $ (0.16) | $ (0.23) | $ (0.54) | $ (0.55) | $ (5.24) |
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