x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE | 72-1440714 | |
(State of Incorporation) | (I.R.S. Employer Identification No.) |
400 E. Kaliste Saloom Rd., Suite 6000 Lafayette, Louisiana | 70508 | |
(Address of principal executive offices) | (Zip code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
N/A | N/A | N/A |
Large accelerated filer | ¨ | Accelerated filer | ¨ |
Non-accelerated filer | x | Smaller reporting company | x |
Emerging growth company | ¨ |
Page No. | |
Part I. Financial Information | |
Item 1. Financial Statements | |
• | risks and uncertainties associated with our previous 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 have been 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 (the “Board”) may have a different strategy and plan for the Company's future; |
• | 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 Term Loan Agreement dated as of February 8, 2019, by and among PQE (as defined below), as borrower, the Company, as parent, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (the “Exit Facility”) 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; |
• | the 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 (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, par value $0.01 per share (the “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 any series of common stock. |
Successor | Predecessor | ||||||
June 30, 2019 | December 31, 2018 | ||||||
(unaudited) | (Note 1) | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 16,292 | $ | 34,502 | |||
Restricted cash | 389 | 389 | |||||
Revenue receivable | 3,848 | 6,364 | |||||
Joint interest billing receivable | 19,085 | 4,716 | |||||
Deposit for surety bonds | 75 | 3,550 | |||||
Other current assets | 1,488 | 3,261 | |||||
Total current assets | 41,177 | 52,782 | |||||
Property and equipment: | |||||||
Oil and gas properties: | |||||||
Oil and gas properties, full cost method | 69,344 | 1,361,374 | |||||
Unevaluated oil and gas properties | 126,353 | 23,492 | |||||
Accumulated depreciation, depletion and amortization | (6,399 | ) | (1,301,592 | ) | |||
Oil and gas properties, net | 189,298 | 83,274 | |||||
Other property and equipment | 321 | 9,282 | |||||
Accumulated depreciation of other property and equipment | (19 | ) | (9,056 | ) | |||
Total property and equipment | 189,600 | 83,500 | |||||
Other assets | 371 | 1,005 | |||||
Right of use asset | 1,777 | — | |||||
Total assets | $ | 232,925 | $ | 137,287 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable to vendors | $ | 28,416 | $ | 11,699 | |||
Advances from co-owners | 3,543 | 2,020 | |||||
Oil and gas revenue payable | 4,132 | 7,765 | |||||
Accrued interest | 289 | 639 | |||||
Asset retirement obligation | 1,525 | 183 | |||||
Other accrued liabilities | 883 | 1,259 | |||||
Right of use liability-short-term | 921 | — | |||||
Total current liabilities | 39,709 | 23,565 | |||||
Multi-draw Term Loan | 45,727 | 49,738 | |||||
10% Senior Secured PIK Notes due 2024 | 68,699 | — | |||||
Asset retirement obligation | 2,597 | 2,297 | |||||
Deferred income taxes | 694 | — | |||||
Right of use liability-long-term | 751 | — | |||||
Total liabilities not subject to compromise | 158,177 | 75,600 | |||||
Liabilities subject to compromise | — | 323,854 | |||||
Total liabilities | $ | 158,177 | $ | 399,454 |
Successor | Predecessor | ||||||
June 30, 2019 | December 31, 2018 | ||||||
(unaudited) | (Note 1) | ||||||
Stockholders’ equity (Predecessor): | |||||||
Preferred stock, $.001 par value; authorized 5,000 shares; issued and outstanding 1,495 shares | $ | — | $ | 1 | |||
Common stock, $.001 par value; authorized 150,000 shares; issued and outstanding 25,587 shares. | — | 26 | |||||
Paid-in capital | — | 314,268 | |||||
Accumulated deficit | — | (576,462 | ) | ||||
Stockholders’ equity (Successor): | |||||||
Preferred stock, $.01 par value; authorized 10,000 shares | — | — | |||||
Common stock, $.01 par value; authorized 65,000 shares, issued and outstanding 9,371 shares | 94 | — | |||||
Paid-in capital | 74,678 | — | |||||
Accumulated deficit | (24 | ) | — | ||||
Total stockholders’ equity | 74,748 | (262,167 | ) | ||||
Total liabilities and stockholders’ equity | $ | 232,925 | $ | 137,287 |
Successor | Predecessor | ||||||
Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | ||||||
Revenues: | |||||||
Oil and gas sales | $ | 13,958 | $ | 21,561 | |||
Expenses: | |||||||
Lease operating expenses | 4,164 | 4,972 | |||||
Production taxes | 732 | 334 | |||||
Depreciation, depletion and amortization | 4,136 | 6,023 | |||||
Ceiling test write-down | — | — | |||||
General and administrative | 3,297 | 4,004 | |||||
Restructuring expense | 1,284 | — | |||||
Accretion of asset retirement obligation | 46 | 42 | |||||
Interest expense | 500 | 7,636 | |||||
Lease costs | 271 | — | |||||
14,430 | 23,011 | ||||||
Other income: | |||||||
Gain on sale of oil and gas properties | — | — | |||||
Other income | 164 | 178 | |||||
Derivative expense | — | (54 | ) | ||||
164 | 124 | ||||||
Loss from operations | (308 | ) | (1,326 | ) | |||
Reorganization items, net | — | — | |||||
Income tax expense | (453 | ) | — | ||||
Net loss | (761 | ) | (1,326 | ) | |||
Preferred stock dividend | — | 1,285 | |||||
Loss available to common stockholders | $ | (761 | ) | $ | (2,611 | ) | |
Loss per common share: | |||||||
Basic | $ | (0.08 | ) | $ | (0.10 | ) | |
Diluted | $ | (0.08 | ) | $ | (0.10 | ) | |
Weighted average number of common shares: | |||||||
Basic | 9,371 | 25,568 | |||||
Diluted | 9,371 | 25,568 |
Successor | Predecessor | |||||||||||
February 9, 2019 through June 30, 2019 | January 1, 2019 through February 8, 2019 | Six Months Ended June 30, 2018 | ||||||||||
Revenues: | ||||||||||||
Oil and gas sales | $ | 22,440 | $ | 6,657 | $ | 46,478 | ||||||
Expenses: | ||||||||||||
Lease operating expenses | 6,342 | 2,158 | 12,012 | |||||||||
Production taxes | 1,175 | 298 | 1,561 | |||||||||
Depreciation, depletion and amortization | 6,418 | 1,796 | 12,528 | |||||||||
General and administrative | 4,986 | 2,468 | 7,304 | |||||||||
Restructuring expense | 1,952 | — | — | |||||||||
Accretion of asset retirement obligation | 69 | 17 | 240 | |||||||||
Interest expense | 831 | 307 | 15,117 | |||||||||
Lease costs | 453 | 156 | — | |||||||||
22,226 | 7,200 | 48,762 | ||||||||||
Other income: | ||||||||||||
Other income (expense) | 215 | (290 | ) | 191 | ||||||||
Derivative expense | — | — | (54 | ) | ||||||||
215 | (290 | ) | 137 | |||||||||
Income/(loss) from operations | 429 | (833 | ) | (2,147 | ) | |||||||
Reorganization items, net | — | 262,801 | — | |||||||||
Income tax expense | (453 | ) | (241 | ) | (106 | ) | ||||||
Net income (loss) | (24 | ) | 261,727 | (2,253 | ) | |||||||
Preferred stock dividend | — | — | 2,570 | |||||||||
Income (loss) available to common stockholders | $ | (24 | ) | $ | 261,727 | $ | (4,823 | ) | ||||
Net income (loss) per common share: | ||||||||||||
Basic | $ | — | $ | 9.50 | $ | (0.19 | ) | |||||
Diluted | $ | — | $ | 8.92 | $ | (0.19 | ) | |||||
Weighted average number of common shares: | ||||||||||||
Basic | 9,371 | 25,587 | 25,554 | |||||||||
Diluted | 9,371 | 27,289 | 25,554 |
Successor | Predecessor | ||||||
Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | ||||||
Net loss | $ | (761 | ) | $ | (1,326 | ) | |
Change in fair value of derivative instruments, accounted for as hedges, net of income tax expense of $0 and $172, respectively | — | (84 | ) | ||||
Comprehensive loss | $ | (761 | ) | $ | (1,410 | ) |
Successor | Predecessor | ||||||||||
February 9, 2019 through June 30, 2019 | January 1, 2019 through February 8, 2019 | Six Months Ended June 30, 2018 | |||||||||
Net income (loss) | $ | (24 | ) | $ | 261,727 | $ | (2,253 | ) | |||
Change in fair value of derivative instruments, accounted for as hedges, net of income tax expense of $0, $0 and $106, respectively | — | — | (1,080 | ) | |||||||
Comprehensive income (loss) | $ | (24 | ) | $ | 261,727 | $ | (3,333 | ) |
Common Stock | Preferred Stock | Paid-In Capital | Other Comprehensive Loss | Accumulated deficit | Total Stockholders' Equity | ||||||||||||||||||
Balance, March 31, 2018 (Predecessor) | $ | 26 | $ | 1 | $ | 313,637 | $ | (718 | ) | $ | (564,754 | ) | $ | (251,808 | ) | ||||||||
Share-based compensation expense | — | — | 256 | — | — | 256 | |||||||||||||||||
Derivative fair value adjustment, net of tax | — | — | — | (84 | ) | — | (84 | ) | |||||||||||||||
Preferred stock dividend | — | — | — | — | (1,285 | ) | (1,285 | ) | |||||||||||||||
Net loss | — | — | — | — | (1,326 | ) | (1,326 | ) | |||||||||||||||
Balance, June 30, 2018 (Predecessor) | $ | 26 | $ | 1 | $ | 313,893 | $ | (802 | ) | $ | (567,365 | ) | $ | (254,247 | ) | ||||||||
Balance, March 31, 2019 (Successor) | 94 | — | $ | 73,972 | $ | — | $ | 737 | $ | 74,803 | |||||||||||||
Share-based compensation expense | — | — | 706 | — | — | 706 | |||||||||||||||||
Net loss | — | — | — | — | (761 | ) | (761 | ) | |||||||||||||||
Balance, June 30, 2019 (Successor) | $ | 94 | $ | — | $ | 74,678 | $ | — | $ | (24 | ) | $ | 74,748 |
Common Stock | Preferred Stock | Paid-In Capital | Other Comprehensive Income (Loss) | Accumulated deficit | Total Stockholders' Equity | ||||||||||||||||||
Balance, December 31, 2017 (Predecessor) | $ | 26 | $ | 1 | $ | 313,244 | $ | 278 | $ | (562,484 | ) | $ | (248,935 | ) | |||||||||
Issuance of shares | — | — | (11 | ) | — | — | (11 | ) | |||||||||||||||
Share-based compensation expense | — | — | 617 | — | — | 617 | |||||||||||||||||
Issuance of shares under employee stock purchase plan | — | — | 43 | — | — | 43 | |||||||||||||||||
Derivative fair value adjustment, net of tax | — | — | — | (1,080 | ) | (58 | ) | (1,138 | ) | ||||||||||||||
Preferred stock dividend | — | — | — | — | (2,570 | ) | (2,570 | ) | |||||||||||||||
Net loss | — | — | — | — | (2,253 | ) | (2,253 | ) | |||||||||||||||
Balance, June 30, 2018 (Predecessor) | $ | 26 | $ | 1 | $ | 313,893 | $ | (802 | ) | $ | (567,365 | ) | $ | (254,247 | ) | ||||||||
Balance, December 31, 2018 (Predecessor) | $ | 26 | $ | 1 | $ | 314,268 | $ | — | $ | (576,462 | ) | $ | (262,167 | ) | |||||||||
Share-based compensation expense | — | — | 44 | — | — | 44 | |||||||||||||||||
Net income | — | — | — | — | 261,727 | 261,727 | |||||||||||||||||
Cancellation of Predecessor equity | (26 | ) | (1 | ) | (314,312 | ) | — | 314,735 | 396 | ||||||||||||||
Issuance of Successor common stock and options | 92 | — | 72,749 | — | — | 72,841 | |||||||||||||||||
Issuance of Successor common stock upon vesting of restricted stock, net of shares retired for taxes | 2 | — | 857 | — | — | 859 | |||||||||||||||||
Balance, February 8, 2019 (Predecessor) | $ | 94 | $ | — | $ | 73,606 | $ | — | $ | — | $ | 73,700 | |||||||||||
Balance, February 8, 2019 (Successor) | $ | 94 | $ | — | $ | 73,606 | — | $ | — | $ | 73,700 | ||||||||||||
Share-based compensation expense | — | — | 1,072 | — | — | 1,072 | |||||||||||||||||
Net income | — | — | — | — | (24 | ) | (24 | ) | |||||||||||||||
Balance, June 30, 2019 (Successor) | $ | 94 | $ | — | $ | 74,678 | $ | — | $ | (24 | ) | $ | 74,748 |
Successor | Predecessor | ||||||||||
February 9, 2019 through June 30, 2019 | January 1, 2019 through February 8, 2019 | Six Months Ended June 30, 2018 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | (24 | ) | $ | 261,727 | $ | (2,253 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Deferred tax expense | 453 | 241 | 106 | ||||||||
Depreciation, depletion and amortization | 6,418 | 1,796 | 12,528 | ||||||||
Accretion of asset retirement obligation | 69 | 17 | 240 | ||||||||
Share-based compensation expense | 1,410 | 44 | 593 | ||||||||
Amortization costs and other | 916 | 555 | 402 | ||||||||
Non-cash interest expense on PIK Notes | — | — | 2,961 | ||||||||
Payments to settle asset retirement obligations | (158 | ) | (11 | ) | (75 | ) | |||||
Non-cash reorganization items, net | — | (267,585 | ) | — | |||||||
Changes in working capital accounts: | |||||||||||
Revenue receivable | 9,856 | (7,340 | ) | 7,480 | |||||||
Joint interest billing receivable | (12,177 | ) | (2,192 | ) | 4,078 | ||||||
Accounts payable and accrued liabilities | (2,971 | ) | 8,363 | (24,104 | ) | ||||||
Advances from co-owners | 180 | 1,343 | (1,117 | ) | |||||||
Refund of (Deposit for) surety bonds | 3,475 | — | (4,000 | ) | |||||||
Other | (565 | ) | 2,336 | 242 | |||||||
Net cash provided by (used in) operating activities | 6,882 | (706 | ) | (2,919 | ) | ||||||
Cash flows used in investing activities: | |||||||||||
Investment in oil and gas properties | (18,878 | ) | (5,290 | ) | (9,785 | ) | |||||
Investment in other property and equipment | (71 | ) | (36 | ) | (136 | ) | |||||
Sale of oil and gas properties | — | — | (2,428 | ) | |||||||
Sale of unevaluated oil and gas properties | — | — | 2,928 | ||||||||
Net cash used in investing activities | (18,949 | ) | (5,326 | ) | (9,421 | ) | |||||
Cash flows (used in) provided by financing activities: | |||||||||||
Net proceeds from share based compensation | — | — | 43 | ||||||||
Deferred financing costs | — | (111 | ) | (55 | ) | ||||||
Costs incurred to redeem 2021 Notes | — | — | (11 | ) | |||||||
Proceeds from borrowings | — | — | 2,500 | ||||||||
Net cash (used in) provided by financing activities | — | (111 | ) | 2,477 | |||||||
Net decrease in cash and cash equivalents | (12,067 | ) | (6,143 | ) | (9,863 | ) | |||||
Cash, restricted cash and cash equivalents, beginning of period | 28,748 | 34,891 | 15,655 | ||||||||
Cash, restricted cash and cash equivalents, end of period | $ | 16,681 | $ | 28,748 | $ | 5,792 | |||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest, net of capitalized interest | $ | 829 | $ | 929 | $ | 3,304 | |||||
Reorganization items, net | $ | 1,952 | $ | 4,784 | $ | — |
• | Adopted an amended and restated certificate of incorporation and bylaws; |
• | Appointed four new members to the Successor’s Board 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; |
• | Authorized 64,999,998 shares of the Successor's Class A Common Stock; one share of the Successor's Class B Common Stock, par value $0.01 per share (the "Class B Common Stock"); one share of the Successor's Class C Common Stock, par value $0.01 per share (the "Class C Common Stock") and 10,000,000 shares of the Successor's preferred 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 Class B Common Stock, par value $0.01 per share, 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 Class C Common Stock, par value $0.01 per share, 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; |
• | Adopted a new management incentive plan (the “2019 Long Term Incentive Plan”) for officers, directors and employees of the Successor and its subsidiary, pursuant to which 1,344,000 shares of the Successor’s Class A Common Stock were reserved for issuance. Upon emergence, 827,638 restricted stock units and 316,319 options were granted to officers and directors; and |
• | the General Unsecured Creditor's (the "GUC") pool was funded in the amount of $1.2 million. |
Gain on settlement of liabilities subject to compromise | $ | 168,952 | |
Fresh start adjustments | 102,830 | ||
Reorganization professional fees and other expenses | (5,398 | ) | |
Write-off of deferred financing costs | (370 | ) | |
Other reorganization items, net | (3,213 | ) | |
Total reorganization items, net | $ | 262,801 |
February 8, 2019 | |||
Enterprise value | $ | 155,246 | |
Plus: Cash | 23,073 | ||
Plus: Restricted cash | 5,675 | ||
Less: Fair value of 10% PIK Notes due 2024 | (65,025 | ) | |
Less: Fair value of Exit Facility | (45,269 | ) | |
Fair value of Successor common stock | $ | 73,700 | |
Shares issued upon emergence | 9,371 | ||
Per share value | $ | 7.86 |
February 8, 2019 | |||
Enterprise value | $ | 155,246 | |
Plus: Cash | 23,073 | ||
Plus: Restricted cash | 5,675 | ||
Plus: Current liabilities | 39,758 | ||
Plus: Asset retirement obligations (long-term) | 2,303 | ||
Plus: Other long-term liabilities | 2,845 | ||
Reorganization value of Successor assets | $ | 228,900 |
Predecessor | Reorganization Adjustments | Fresh Start Adjustments | Successor | |||||||||||||
Assets | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 31,881 | $ | (8,808 | ) | (1) | $ | — | $ | 23,073 | ||||||
Restricted cash | 389 | 5,286 | (2) | — | 5,675 | |||||||||||
Revenue receivable | 13,704 | — | — | 13,704 | ||||||||||||
Joint interest billing receivable | 6,908 | — | — | 6,908 | ||||||||||||
Deposit for surety bonds | 3,550 | — | — | 3,550 | ||||||||||||
Other current assets | 924 | — | — | 924 | ||||||||||||
Total current assets | 57,356 | (3,522 | ) | — | 53,834 | |||||||||||
Property and equipment: | ||||||||||||||||
Oil and gas properties: | ||||||||||||||||
Oil and gas properties, full cost method | 1,366,884 | — | (1,314,814 | ) | (12) | 52,070 | ||||||||||
Unevaluated oil and gas properties | 24,033 | — | 94,660 | (12) | 118,693 | |||||||||||
Accumulated depreciation, depletion, and amortization | (1,303,376 | ) | — | 1,303,376 | (12) | — | ||||||||||
Oil and gas properties, net | 87,541 | — | 83,222 | 170,763 | ||||||||||||
Other property and equipment | 9,318 | — | (9,068 | ) | (13) | 250 | ||||||||||
Accumulated depreciation of other property and equipment | (9,068 | ) | — | 9,068 | (13) | — | ||||||||||
Total property and equipment | 87,791 | — | 83,222 | 171,013 | ||||||||||||
Other assets | 4,151 | — | (98 | ) | (14) | 4,053 | ||||||||||
Total Assets | $ | 149,298 | $ | (3,522 | ) | $ | 83,124 | $ | 228,900 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable to vendors | $ | 14,813 | $ | 2,575 | (4) | $ | — | $ | 17,388 | |||||||
Advances from co-owners | 3,363 | — | — | 3,363 | ||||||||||||
Oil and gas revenue payable | 16,059 | — | — | 16,059 | ||||||||||||
Accrued interest | 1,181 | (1,181 | ) | (5) | — | — | ||||||||||
Asset retirement obligation | 183 | — | — | 183 | ||||||||||||
Right of use liability-short-term | 1,080 | — | — | 1,080 | ||||||||||||
Other accrued liabilities | 1,224 | 461 | (6) | — | 1,685 | |||||||||||
Total current liabilities | 37,903 | 1,855 | — | 39,758 | ||||||||||||
Multi-draw Term Loan | 49,754 | 246 | (3) | (4,731 | ) | (15) | 45,269 | |||||||||
10% Senior Secured PIK Notes due 2024 | — | 80,000 | (7) | (14,975 | ) | (16) | 65,025 | |||||||||
Asset retirement obligation | 2,303 | — | — | 2,303 | ||||||||||||
Right of use liability-long-term | 2,604 | — | — | 2,604 | ||||||||||||
Deferred tax liability | — | — | 241 | (17) | 241 | |||||||||||
Total liabilities not subject to compromise | 92,564 | 82,101 | (19,465 | ) | 155,200 | |||||||||||
Liabilities subject to compromise | 321,495 | (321,495 | ) | (8) | — | — | ||||||||||
Stockholder's equity: | ||||||||||||||||
Preferred stock (Predecessor) | 1 | (1 | ) | (9) | — | — | ||||||||||
Common stock (Predecessor) | 26 | (26 | ) | (9) | — | — | ||||||||||
Paid-in capital (Predecessor) | 314,312 | (314,312 | ) | (9) | — | — | ||||||||||
Common stock (Successor) | — | 94 | (10) | — | 94 | |||||||||||
Paid-in capital (Successor) | — | 73,606 | (10) | — | 73,606 | |||||||||||
Accumulated deficit | (579,100 | ) | 476,511 | (11) | 102,589 | (18) | — | |||||||||
Total stockholder's equity | (264,761 | ) | 235,872 | 102,589 | 73,700 | |||||||||||
$ | 149,298 | $ | (3,522 | ) | $ | 83,124 | $ | 228,900 |
1. | Reflects the cash payments made as of the Effective Date from implementation of the Plan: |
Uses: | |||
Payment of accrued interest on the Multidraw Term Loan Agreement | $ | (1,181 | ) |
Payment of financing costs related to the Exit Facility | (124 | ) | |
Funding of the general unsecured claims administrative escrow account | (1,200 | ) | |
Cash transferred to restricted cash for professional fee escrow | (5,157 | ) | |
Cash transferred to restricted cash for consenting creditors fees | (129 | ) | |
Payment of professional fees at emergence | (1,017 | ) | |
Total: | $ | (8,808 | ) |
2. | Reflects the cash reclassified to Restricted Cash as of the Effective Date from implementation of the Plan: |
Reclassifications to Restricted Cash: | |||
Funding of the professional fee escrow account | $ | 5,157 | |
Funding of the consenting creditors escrow account | 129 | ||
Total: | $ | 5,286 |
3. | Reflects the payment of financing costs related to the Exit Facility and the write off of deferred financing costs related to the MultiDraw Term Loan Agreement and the Exit Facility. |
4. | Represents the $3.6 million of accrued expenses related to the success fee recognized at emergence and the payment of $1.0 million of professional fees at emergence. |
5. | Represents the $1.2 million of accrued interest paid at emergence related to the Predecessor's Multidraw Term Loan Agreement. |
6. | Represents the accrual of the tax liability associated with the forfeiture of RSUs issued at emergence. |
7. | Represents the issuance of the $80 million PIK Notes due 2024 at face value. |
8. | Liabilities subject to compromise were settled as follows in accordance with the Plan: |
10% Senior Secured Notes due 2021 | $ | 9,427 | |
10% Senior Secured PIK Notes due 2021 | 275,046 | ||
Accrued interest on Senior Secured Notes due 2021 and PIK Notes due 2021 | 20,624 | ||
General Unsecured Claims & Convenience Claims | 1,749 | ||
Preferred stock accrued dividends | 14,649 | ||
Total liabilities subject to compromise | $ | 321,495 | |
Issuance of the equity to the holders of the Senior Secured Notes due 2021 and PIK Notes due 2021 | (71,343 | ) | |
Issuance of Successor 10% PIK Notes | (80,000 | ) | |
GUC Administration Funding | (1,200 | ) | |
Gain on settlement of liabilities subject to compromise | $ | 168,952 |
9. | Reflects the cancellation of the Predecessor's preferred stock, common stock and additional paid-in capital to retained earnings. |
10. | Reflects the issuance of equity of the Successor. In accordance with the Plan, the Successor issued 8.9 million shares of new Class A Common Stock to the holder of Second Lien 10% Senior Secured Notes due 2021 and Second Lien 10% Senior Secured PIK Notes due 2021 as part of the settlement of certain liabilities subject to compromise. In addition, 300,000 shares of new Class A Common Stock were issued to consenting creditors, as well as 263,599 shares of new Class A Common Stock issued to holders of stock awards which vested at emergence. For those shares issued to the holders of stock awards, 92,479 were surrendered for tax purposes; therefore, a net 171,120 shares were considered outstanding at emergence. Each share of Class A Common Stock has a par value of $0.01. Additionally, the Successor issued one share of Class B Common Stock and one share of Class C Common Stock on the Effective Date in accordance with the Plan. |
Common stock, par value $0.01 | $ | 94 | |
Issuance of the equity to the holders of the Senior Secured Notes due 2021 and PIK Notes due 2021 | 71,249 | ||
Issuance of the equity related to the emergence vesting of RSUs | 1,318 | ||
Issuance of the equity to the consenting creditors | 1,500 | ||
Total equity issued at emergence | 74,161 | ||
Value of shares relinquished to satisfy taxes on the RSUs vested at emergence | (461 | ) | |
Net equity issued at emergence | $ | 73,700 |
11. | Reflects the cumulative net impact of the effects on Accumulated deficit as follows: |
Gain on settlement of liabilities subject to compromise | $ | 168,952 | |
Issuance of the equity to the consenting creditors | (1,500 | ) | |
Issuance of the equity related to the emergence vesting of RSUs | (1,318 | ) | |
Success fees recognized at emergence | (3,592 | ) | |
Accelerated vesting of Predecessor stock compensation | (396 | ) | |
Write-off deferred financing costs | (370 | ) | |
Net impact to Reorganization items, net | 161,776 | ||
Cancellation of Predecessor equity, including vesting | 314,735 | ||
Net Impact to Accumulated deficit | $ | 476,511 |
12. | Fair value adjustments to proved oil and a gas properties, associated inventory, unproved acreage, as well as the respective reset of depletion, depreciation, and amortization balances. See above for a detailed discussion of the fair value methodology. |
13. | Adjustments to record the fair value of the well equipment, leasehold improvements, computer software, computers, as well as the reset of accumulated depreciation. The Company concluded that the net book value of the assets represented the fair value at emergence. |
14. | Represents the write-down of the Indianola investment to fair value based on a five year cash flow analysis. |
15. | Upon emergence, the Predecessor's Multidraw Term Loan Agreement was extinguished in the amount of $50 million and the Company entered into the Exit Facility in the amount of $50 million. This adjustment represents the fair value adjustment associated with the Exit Facility. Fair value was estimated via a discounted cash flow analysis by discounting scheduled debt service payments at a credit spread of 10.1%. The credit spread was determined by performing a synthetic credit rating analysis, considering yields on similarly-rated, energy corporate issues, and adjusting based on recovery rates for first lien debt. |
16. | Represents the fair value adjustments to the 2024 PIK Notes. Fair value was estimated via a discounted cash flow analysis by discounting scheduled debt service payments at a credit spread of 11.9%. The credit spread was determined by performing a synthetic credit rating analysis, considering yields on similarly-rated, energy corporate issues, and adjusting based on recovery rates for second lien debt. |
17. | Represents the net decrease in tax assets and tax liabilities associated with adjustments for fresh start accounting. |
18. | Reflects the cumulative impact of the fresh start adjustments discussed above: |
Proved oil and gas properties fair value adjustment | $ | (11,438 | ) |
Unproved oil and gas properties fair value adjustment | 94,660 | ||
Other asset fair value adjustment | (98 | ) | |
Exit Facility fair value adjustment | 4,731 | ||
2024 PIK Notes fair value adjustment | 14,975 | ||
Net gain on fresh start adjustments | 102,830 | ||
Tax impact on fresh start accounting adjustments | (241 | ) | |
Net impact to Accumulated deficit | $ | 102,589 |
• | Issued to the Class B Holder (as defined in the Successor’s amended and restated certificate of incorporation) one share of 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 Class C Common Stock, which confers certain rights to elect directors and certain drag-along rights; |
• | Adopted 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; and |
• | authorized 10 million shares of the Successor's preferred stock. |
For the Three Months (Successor) Ended June 30, 2019 | Income (Numerator) | Shares (Denominator) | Per Share Amount | |||||||
BASIC EPS | ||||||||||
Net loss available to common stockholders | $ | (761 | ) | 9,371 | $ | (0.08 | ) | |||
Restricted shares | — | — | ||||||||
Attributable to participating securities | — | — | ||||||||
DILUTED EPS | $ | (761 | ) | 9,371 | $ | (0.08 | ) | |||
For the Successor Period of February 9, 2019 through June 30, 2019 | Income (Numerator) | Shares (Denominator) | Per Share Amount | |||||||
BASIC EPS | ||||||||||
Net loss available to common stockholders | $ | (24 | ) | 9,371 | $ | — | ||||
Restricted shares | — | — | ||||||||
Attributable to participating securities | — | — | ||||||||
DILUTED EPS | $ | (24 | ) | 9,371 | $ | — |
For the Predecessor Period of January 1, 2019 through February 8, 2019 | Income (Numerator) | Shares (Denominator) | Per Share Amount | |||||||
BASIC EPS | ||||||||||
Net income available to common stockholders | $ | 261,727 | 25,587 | |||||||
Gain on cancellation of Preferred Shares | (14,650 | ) | ||||||||
Attributable to participating securities | (3,944 | ) | ||||||||
Net income available to common stockholders | $ | 243,133 | 25,587 | $ | 9.50 | |||||
Net income available to common stockholders | $ | 261,727 | 25,587 | |||||||
Gain on cancellation of Preferred Shares | (14,650 | ) | ||||||||
Effect of dilutive securities: | ||||||||||
Preferred shares | — | 1,287 | ||||||||
Restricted shares | (3,944 | ) | 415 | |||||||
Attributable to participating securities | 186 | — | ||||||||
DILUTED EPS | $ | 243,319 | 27,289 | $ | 8.92 | |||||
For the Three Months (Predecessor) Ended June 30, 2018 | Loss (Numerator) | Shares (Denominator) | Per Share Amount | |||||||
BASIC EPS | ||||||||||
Net loss available to common stockholders | $ | (2,611 | ) | 25,568 | $ | (0.10 | ) | |||
Stock options | — | — | ||||||||
Attributable to participating securities | — | — | ||||||||
DILUTED EPS | $ | (2,611 | ) | 25,568 | $ | (0.10 | ) | |||
For the Six Months (Predecessor) Ended June 30, 2018 | Loss (Numerator) | Shares (Denominator) | Per Share Amount | |||||||
BASIC EPS | ||||||||||
Net loss available to common stockholders | $ | (4,823 | ) | 25,554 | $ | (0.19 | ) | |||
Stock options | — | — | ||||||||
Attributable to participating securities | — | — | ||||||||
DILUTED EPS | $ | (4,823 | ) | 25,554 | $ | (0.19 | ) |
• | Approximately 41.7% of the RSUs were fully vested upon grant. Consequently, $1.3 million was recorded as reorganization expense to the Predecessor period ended February 8, 2019 in accordance with fresh start accounting. The officers elected to pay their taxes in stock and consequently 92,479 shares of common stock were retired and are not eligible to be reissued. See "Note 4-Fresh Start Accounting" for the related entries. |
• | 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. |
June 30, 2019 | |||||||
2024 PIK Notes | Exit Facility | ||||||
Face Value | $ | 80,000 | $ | 50,000 | |||
Discount of Debt | (14,412 | ) | (4,273 | ) | |||
Accrued PIK Interest | 3,111 | — | |||||
Carrying value | $ | 68,699 | $ | 45,727 |
Successor | Predecessor | ||||||||||
February 9, 2019 through June 30, 2019 | January 1, 2019 through February 8, 2019 | Six Months Ended June 30, 2018 | |||||||||
Asset retirement obligation, beginning of period | $ | 2,486 | $ | 2,480 | $ | 31,310 | |||||
Liabilities incurred | 20 | — | 7 | ||||||||
Liabilities settled | (292 | ) | (11 | ) | (98 | ) | |||||
Accretion expense | 69 | 17 | 240 | ||||||||
Revisions in estimates | 1,839 | — | (67 | ) | |||||||
Divestiture of oil and gas properties | — | — | (28,214 | ) | |||||||
Asset retirement obligation, end of period | 4,122 | 2,486 | 3,178 | ||||||||
Less: current portion of asset retirement obligation | (1,525 | ) | (183 | ) | (877 | ) | |||||
Long-term asset retirement obligation | $ | 2,597 | $ | 2,303 | $ | 2,301 |
Instrument | Amount of Gain Recognized in Other Comprehensive Income | Location of Gain Reclassified into Income | Amount of Gain (Loss) Reclassified into Oil and Gas Sales | ||||||
Commodity Derivatives - June 30, 2018 | $ | (445 | ) | Oil and gas sales | $ | (307 | ) |
Instrument | Amount of Gain (Loss) Recognized in Other Comprehensive Income | Location of Gain Reclassified into Income | Amount of Gain (Loss) Reclassified into Oil and Gas Sales | ||||||
Commodity Derivatives - June 30, 2018 | $ | (990 | ) | Oil and gas sales | $ | 233 |
• | 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. |
June 30, 2019 | December 31, 2018 | ||||||||||||||||||
Fair Value | Face Value | Carrying Value | Fair Value | Face Value | Carrying Value | ||||||||||||||
2021 Notes | $ | — | $ | — | $ | — | $ | 2,828 | $ | 9,427 | $ | 9,427 | |||||||
2021 PIK Notes | — | — | — | 82,514 | 275,046 | 275,046 | |||||||||||||
Multidraw Term Loan | — | — | — | 50,000 | 50,000 | 49,738 | |||||||||||||
Exit Facility | 45,269 | 50,000 | 45,727 | — | — | — | |||||||||||||
2024 PIK Notes | 65,025 | 80,000 | 68,699 | — | — | — | |||||||||||||
$ | 110,294 | $ | 130,000 | $ | 114,426 | $ | 135,342 | $ | 334,473 | $ | 334,211 |
Gains and Losses on Cash Flow Hedges | Change in Valuation Allowance | Total | |||||||||
Balance as of March 31, 2018 | $ | (546 | ) | $ | (172 | ) | $ | (718 | ) | ||
Other comprehensive income before reclassifications: | |||||||||||
Change in fair value of derivatives | (445 | ) | — | (445 | ) | ||||||
Income tax effect | 107 | (107 | ) | — | |||||||
Net of tax | (338 | ) | (107 | ) | (445 | ) | |||||
Amounts reclassified from accumulated other comprehensive income: | |||||||||||
Oil and gas sales | 361 | — | 361 | ||||||||
Income tax effect | (87 | ) | 87 | — | |||||||
Net of tax | 274 | 87 | 361 | ||||||||
Net other comprehensive loss | (64 | ) | (20 | ) | (84 | ) | |||||
Balance as of June 30, 2018 | $ | (610 | ) | $ | (192 | ) | $ | (802 | ) |
Gains and Losses on Cash Flow Hedges | Change in Valuation Allowance | Total | |||||||||
Balance as of December 31, 2017 | $ | 278 | $ | — | $ | 278 | |||||
Other comprehensive income before reclassifications: | |||||||||||
Change in fair value of derivatives | (990 | ) | — | (990 | ) | ||||||
Income tax effect | 238 | (238 | ) | — | |||||||
Net of tax | (752 | ) | (238 | ) | (990 | ) | |||||
Amounts reclassified from accumulated other comprehensive income: | |||||||||||
Oil and gas sales | (179 | ) | — | (179 | ) | ||||||
Income tax effect | 43 | 46 | 89 | ||||||||
Net of tax | (136 | ) | 46 | (90 | ) | ||||||
Net other comprehensive loss | (888 | ) | (192 | ) | (1,080 | ) | |||||
Balance as of June 30, 2018 | $ | (610 | ) | $ | (192 | ) | $ | (802 | ) |
For the Three Month Period Ended June 30, 2019 | For the Three Month Period Ended June 30, 2018 | ||||||
Oil production | $ | 3,858 | $ | 5,660 | |||
Natural gas production | 8,224 | 11,825 | |||||
Natural gas liquids production | 1,876 | 4,076 | |||||
Total | $ | 13,958 | $ | 21,561 |
For the Successor Period of February 9, 2019 through June 30, 2019 | For the Predecessor Period of January 1, 2019 through February 8, 2019 | For the Six Months Ended June 30, 2018 | |||||||||
Oil production | $ | 6,041 | $ | 1,502 | $ | 11,982 | |||||
Natural gas production | 13,233 | 4,130 | 26,709 | ||||||||
Natural gas liquids production | 3,166 | 1,025 | 7,788 | ||||||||
Total | $ | 22,440 | $ | 6,657 | $ | 46,478 |
1. | ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of the Company's leases where it is the lessee do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. |
2. | The lease term for all of the Company's leases includes the non-cancellable period of the lease plus any additional periods covered by either an option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. |
3. | Lease payments included in the measurement of the lease asset or liability comprise the following: fixed payments (including in-substance fixed payments), variable payments that depend on index or rate, and the exercise price of a lessee option to purchase the underlying asset if the Company is reasonably certain to exercise. Amounts expected to be payable under residual value guarantee are also lease payments included in the measurement of the lease liability. |
• | Adopted an amended and restated certificate of incorporation and bylaws; |
• | Appointed four new members to the Successor’s Board 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; |
• | Authorized 64,999,998 shares of the Successor's Class A Common Stock; one share of the Successor's Class B Common Stock, par value $0.01 per share (the "Class B Common Stock"); one share of the Successor's Class C Common Stock, par value $0.01 per share (the "Class C Common Stock") and 10,000,000 shares of the Successor's preferred 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 Class B Common Stock, par value $0.01 per share, 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 Class C Common Stock, par value $0.01 per share, 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; |
• | Adopted a new management incentive plan (the “2019 Long Term Incentive Plan”) for officers, directors and employees of the Successor and its subsidiary, pursuant to which 1,344,000 shares of the Successor’s Class A Common Stock were reserved for issuance. Upon emergence, 827,638 restricted stock units and 316,319 options were granted to officers and directors; and |
• | the General Unsecured Creditor's (the "GUC") pool was funded in the amount of $1.2 million. |
January 1, 2019 through February 8, 2019 | For the Three Months Ended June 30, 2018 | For the Six Months Ended June 30, 2018 | |||||||||
Production: | |||||||||||
Oil (Bbls) | 26,490 | 84,879 | 185,054 | ||||||||
Gas (Mcf) | 1,312,871 | 4,186,629 | 8,790,650 | ||||||||
Ngl (Mcfe) | 293,135 | 901,151 | 1,798,254 | ||||||||
Total Production (Mcfe) | 1,764,946 | 5,597,054 | 11,699,228 | ||||||||
Sales: | |||||||||||
Total oil sales | $ | 1,502,149 | $ | 5,659,813 | $ | 11,981,670 | |||||
Total gas sales | 4,129,536 | 11,825,143 | 26,709,256 | ||||||||
Total ngl sales | 1,025,172 | 4,076,079 | 7,787,554 | ||||||||
Total oil, gas, and ngl sales | $ | 6,656,857 | $ | 21,561,035 | $ | 46,478,480 | |||||
Average sales prices: | |||||||||||
Oil (per Bbl) | $ | 56.71 | $ | 66.68 | $ | 64.75 | |||||
Gas (per Mcf) | 3.15 | 2.82 | 3.04 | ||||||||
Ngl (per Mcfe) | 3.50 | 4.52 | 4.33 | ||||||||
Per Mcfe | 3.77 | 3.85 | 3.97 |
For the Three Month Period Ended June 30, 2019 | For the Successor Period of February 9, 2019 through June 30, 2019 | ||||||
Production: | |||||||
Oil (Bbls) | 59,119 | 94,242 | |||||
Gas (Mcf) | 3,223,042 | 5,027,324 | |||||
Ngl (Mcfe) | 582,737 | 944,493 | |||||
Total Production (Mcfe) | 4,160,493 | 6,537,269 | |||||
Sales: | |||||||
Total oil sales | $ | 3,858,202 | $ | 6,041,304 | |||
Total gas sales | 8,223,624 | 13,232,950 | |||||
Total ngl sales | 1,876,524 | 3,165,866 | |||||
Total oil, gas, and ngl sales | $ | 13,958,350 | $ | 22,440,120 | |||
Average sales prices: | |||||||
Oil (per Bbl) | $ | 65.26 | $ | 64.10 | |||
Gas (per Mcf) | 2.55 | 2.63 | |||||
Ngl (per Mcfe) | 3.22 | 3.35 | |||||
Per Mcfe | 3.35 | 3.43 |
June 30, 2019 | |||||||
2024 PIK Notes | Exit Facility | ||||||
Face Value | $ | 80,000 | $ | 50,000 | |||
Discount of Debt | (14,412 | ) | (4,273 | ) | |||
Accrued PIK Interest | 3,111 | — | |||||
Carrying value | $ | 68,699 | $ | 45,727 |
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. |
• | 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. |
3.1 | |
3.2 | |
4.1 | |
31.1* | |
31.2* | |
32.1* | |
32.2* | |
101.INS* | |
101.SCH* | |
101.CAL* | |
101.DEF* | |
101.LAB* | |
101.PRE* |
PETROQUEST ENERGY, INC. | ||
Date: | August 12, 2019 | /s/ J. Bond Clement |
J. Bond Clement Executive Vice President, Chief Financial Officer (Authorized Officer and Principal Financial and Accounting Officer) |
1. | I have reviewed this Form 10-Q of PetroQuest Energy, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
1. | I have reviewed this Form 10-Q of PetroQuest Energy, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Charles T. Goodson |
Charles T. Goodson |
Chief Executive Officer |
August 12, 2019 |
/s/ J. Bond Clement |
J. Bond Clement |
Chief Financial Officer |
August 12, 2019 |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Aug. 02, 2019 |
|
Entity Registrant Name | PETROQUEST ENERGY INC | |
Entity Central Index Key | 0000872248 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Common Class A | ||
Entity Common Stock, Shares Outstanding | 9,371,120 | |
Common Class B | ||
Entity Common Stock, Shares Outstanding | 1 | |
Common Class C | ||
Entity Common Stock, Shares Outstanding | 1 |
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
---|---|---|---|---|---|
Feb. 08, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Revenues: | |||||
Oil and gas sales | $ 6,657 | $ 13,958 | $ 21,561 | $ 22,440 | $ 46,478 |
Expenses: | |||||
Lease operating expenses | 2,158 | 4,164 | 4,972 | 6,342 | 12,012 |
Production taxes | 298 | 732 | 334 | 1,175 | 1,561 |
Depreciation, depletion and amortization | 1,796 | 4,136 | 6,023 | 6,418 | 12,528 |
Ceiling test write-down | 0 | 0 | |||
General and administrative | 2,468 | 3,297 | 4,004 | 4,986 | 7,304 |
Restructuring expense | 0 | 1,284 | 0 | 1,952 | 0 |
Accretion of asset retirement obligation | 17 | 46 | 42 | 69 | 240 |
Interest expense | 307 | 500 | 7,636 | 831 | 15,117 |
Lease costs | 156 | 271 | 0 | 453 | 0 |
Expenses | 7,200 | 14,430 | 23,011 | 22,226 | 48,762 |
Other income: | |||||
Gain on sale of oil and gas properties | 0 | 0 | |||
Other income (expense) | (290) | 164 | 178 | 215 | 191 |
Derivative expense | 0 | 0 | (54) | 0 | (54) |
Other income (expense), net | (290) | 164 | 124 | 215 | 137 |
Income/(loss) from operations | (833) | (308) | (1,326) | 429 | (2,147) |
Reorganization items, net | 262,801 | 0 | 0 | 0 | 0 |
Income tax expense | (241) | (453) | 0 | (453) | (106) |
Net income (loss) | 261,727 | (761) | (1,326) | (24) | (2,253) |
Preferred stock dividend | 0 | 0 | 1,285 | 0 | 2,570 |
Income (loss) available to common stockholders | $ 261,727 | $ (761) | $ (2,611) | $ (24) | $ (4,823) |
Net income (loss) per common share: | |||||
Basic (in dollars per share) | $ 9.50 | $ (0.08) | $ (0.10) | $ 0.00 | $ (0.19) |
Diluted (in dollars per share) | $ 8.92 | $ (0.08) | $ (0.10) | $ 0.00 | $ (0.19) |
Weighted average number of common shares: | |||||
Basic (shares) | 25,587 | 9,371 | 25,568 | 9,371 | 25,554 |
Diluted (shares) | 27,289 | 9,371 | 25,568 | 9,371 | 25,554 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.010 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 1,495,000 | |
Preferred stock, shares outstanding (in shares) | 1,495,000 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.001 |
Common stock, shares authorized (in shares) | 65,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 9,371,000 | 25,587,000 |
Common stock, shares outstanding (in shares) | 9,371,000 | 25,587,000 |
Consolidated Statements of Comprehensive (Loss) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
---|---|---|---|---|---|
Feb. 08, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Statement of Comprehensive Income [Abstract] | |||||
Net income (loss) | $ 261,727 | $ (761) | $ (1,326) | $ (24) | $ (2,253) |
Change in fair value of derivative instruments, accounted for as hedges, net of income tax expense | 0 | 0 | 0 | ||
Change in fair value of derivative instruments, accounted for as hedges, net of income tax expense | (84) | (1,080) | |||
Comprehensive income (loss) | $ 261,727 | $ (761) | $ (1,410) | $ (24) | $ (3,333) |
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands |
1 Months Ended | 2 Months Ended | 3 Months Ended | 6 Months Ended | |
---|---|---|---|---|---|
Feb. 08, 2019 |
Mar. 31, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2018 |
|
Statement of Comprehensive Income [Abstract] | |||||
Change in fair value of derivative instruments, accounted for as hedges, net of income tax expense, tax | $ 172 | $ (106) | |||
Change in fair value of derivative instruments, accounted for as hedges, net of income tax expense, tax | $ 0 | $ 0 | $ 0 |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation PetroQuest Energy, Inc., a Delaware corporation, 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 and including February 8, 2019, the Effective Date of the Plan (as defined below). As discussed in “Note 3-Emergence from Chapter 11 Reorganization” the Company and its wholly owned direct and indirect subsidiaries filed voluntary petitions for bankruptcy relief on November 6, 2018 and subsequently operated as debtors in possession, in accordance with the applicable provisions of the Bankruptcy Code, until emergence on February 8, 2019. The consolidated financial information for the period February 9, 2019 through June 30, 2019 (Successor), for the period January 1, 2019 through February 8, 2019 (Predecessor) and for the three and six month periods ended June 30, 2018 (Predecessor), have been prepared by the Company and were not audited by its independent registered public accountants. In the opinion of management, all normal and recurring adjustments have been made to present fairly the financial position, results of operations, and cash flows of the Company at June 30, 2019 and for all reported periods. Results of operations for the interim periods presented are not necessarily indicative of the operating results for the full year or any future periods. The balance sheet at December 31, 2018 has been derived from the audited financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the audited financial statements and related notes thereto included in the Company’s Form 10-K. Certain prior period amounts have been reclassified to conform to current year presentation. Principles of Consolidation The consolidated financial statements of the Predecessor include the accounts of the Company and its subsidiaries, PetroQuest Energy, L.L.C ("PQE"), PetroQuest Oil & Gas, L.L.C, and its former subsidiaries, Pittrans, Inc. and TDC Energy LLC through and including the Effective Date. The Successor's consolidated financial statements include the accounts of the Company, PQE and PetroQuest Oil & Gas, L.L.C. All intercompany accounts and transactions have been eliminated as part of the normal course of business. Bankruptcy Accounting and Financial Reporting The consolidated financial statements have been prepared in accordance with Accounting Standards Codification ("ASC") 852, Reorganizations ("ASC 852"), 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 were realized or incurred in the Chapter 11 Cases (as defined below) were recorded as reorganization items, net in the consolidated statement of operations. In addition, the pre-petition obligations that may be impacted by the bankruptcy reorganization process were classified on the consolidated balance sheet as 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. Upon the Effective Date of the Plan, February 8, 2019, we applied fresh start accounting. See "Note 4-Fresh Start Accounting". As a result of the application of fresh start accounting, as well as the effects of the implementation of the Plan, a new entity for financial reporting purposes was created, and as such, the consolidated financial statements on or after February 9, 2019, are not comparable with the consolidated financial statements prior to that date. A blackline presentation has been used to delineate the lack of comparability between predecessor and successor balances. See Note 4 for additional information on the selection of the Effective Date of fresh start accounting and for further discussion. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities in the normal course of business for the twelve month period following the filing date of these consolidated financial statements. Recently Issued Accounting Standards In August 2017, the FASB issued ASU 2017-12, "Derivatives 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 has adopted this new standard. As there are no outstanding derivatives, there is no effect on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses", that requires entities to estimate all expected credit losses for most financial assets held at the reporting date based on an expected loss model, which requires consideration of historical experience, current conditions, and reasonable and supportable forecasts. This ASU also requires enhanced disclosure requirements to enable users of financial statements to understand the entity's assumptions, models and methods for estimating expected credit losses. For public companies, this ASU is effective for interim and annual reporting periods beginning after December 31, 2019, with early adoption permitted. The Company does not expect this guidance to have a material impact on its financial statements. |
Going Concern |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities in the normal course of business for the twelve month period following the date of these consolidated financial statements. As such, the accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and their carrying amounts, or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern. During 2019, the Company initiated production from three East Texas wells and has drilled but not completed two additional East Texas wells. At June 30, 2019, the Company had approximately $16.3 million in unrestricted cash and had no availability under the Exit Facility. As a result of the Company's limited liquidity position and the decline in natural gas prices, drilling operations have been suspended in East Texas, including deferring the completion of the two wells that have been drilled. The Company continues to evaluate additional sources of liquidity in order to execute its drilling plans. Options include additional debt or equity financing, joint ventures or industry partnerships, along with evaluating potential corporate level transactions such as a merger or a sale of the Company. There is no guarantee the Company will be successful in any of its attempts to strengthen its liquidity position. While there are no pending debt maturities and the Company expects to be able to fund required payments under the Exit Facility in the near term, the Company expects production, cash flow and proved reserves to decline until drilling operations can be resumed. The decline in proved reserves will likely impact the Company's ability to remain compliant with the financial ratio contained in the Exit Facility (the "Coverage Ratio") and, if natural gas prices remain depressed, the Company will likely be out of compliance with the Coverage Ratio as of September 30, 2019 unless it receives a waiver from the lenders under the Exit Facility. As a result, there is substantial doubt about the Company's ability to continue as a going concern. See-Liquidity and Capital Resources-Successor Long-Term Debt-Exit Facility. |
Emergence from Chapter 11 Reorganization |
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Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Emergence from Chapter 11 Reorganization | Emergence from Chapter 11 Reorganization On November 6, 2018 (the “Petition Date”), the Company, 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”). 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’ prepetition liabilities were subject to settlement under the Bankruptcy Code. 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 were entitled to 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 was treated as a prepetition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieved the Debtors of performing their future obligations under such executory contract or unexpired lease but entitled the contract counterparty or lessor to a prepetition general unsecured claim for damages caused by such deemed breach. Counterparties to such rejected contracts or leases may assert unsecured claims in the Bankruptcy Court against the applicable Debtors’ estate for damages. Generally, the assumption of an executory contract or unexpired lease requires the Debtors to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance. Accordingly, any description of an executory contract or unexpired lease with any of the Debtors in this Quarterly Report on Form 10-Q, including where applicable a quantification of the Company’s obligations under any such executory contract or unexpired lease with the applicable Debtor, is qualified by any overriding rejection rights the Company has under the Bankruptcy Code. Further, nothing herein is or shall be deemed an admission with respect to any claim amounts or calculations arising from the rejection of any executory contract or unexpired lease and the Debtors expressly preserve all of their rights with respect thereto. During the bankruptcy process the Company's rejection damages were approximately $0.1 million. Reorganization Items, net Reorganization Items, net incurred as a result of the Chapter 11 Cases are presented separately in the accompanying unaudited consolidated statement of operations for the Predecessor period January 1, 2019 through February 8, 2019 as follows (in thousands):
Fresh Start Accounting Upon emergence from bankruptcy, the Company qualified for and adopted fresh start accounting in accordance with the provisions of ASC 852 as (i) the holders of existing voting shares of the Predecessor received less than 50% of the voting shares of the Successor and (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the Plan was less than the post-petition liabilities and allowed claims. See "Note 3- Emergence from Chapter 11 Reorganization" for the terms of the Plan. The Company applied fresh start accounting as of February 8, 2019. Fresh start accounting required the Company to present its assets, liabilities and equity as if it were a new entity upon emergence from bankruptcy, with no beginning retained earnings or deficit as of the fresh start reporting date. As described in "Note 1-Basis of Presentation", the new entity is referred to as Successor, and includes the financial position and results of operations of the reorganized Company subsequent to February 8, 2019. References to Predecessor relate to the financial position and results of operations of the Company prior to, and including, February 8, 2019. Reorganization Value Under fresh start accounting, reorganization value represents the fair value of the Successor's total assets and is intended to approximate the amount a willing buyer would pay for the assets immediately after restructuring. Upon application of fresh start accounting, the Company allocated the reorganization value to its individual assets based on their estimated fair values in conformity with ASC 805, "Business Combinations" ("ASC 805"). The Company’s reorganization value is derived from an estimate of enterprise value. Enterprise value represents the estimated fair value of an entity’s long-term debt and stockholders’ equity. The Bankruptcy Court approved the Plan, which included as support the Company's estimate that the enterprise value of the core assets (as defined in the Plan) of the Successor was in the range of $104 million to $187 million without cash at emergence. The sum of the estimated range of enterprise value plus the amount of estimated cash at emergence was in the range of $117 million to $200 million. This valuation analysis was prepared using reserve information, development schedules, other financial information and financial projections and applying standard valuation techniques, including net asset value analysis, precedent transactions analyses and public comparable company analyses. Based on the estimates and assumptions used in determining the enterprise value, the Company ultimately estimated the enterprise value of the Successor's core assets to be approximately $155.2 million. Valuation of Assets The Company’s principal assets are its oil and gas properties, which the Company accounts for under the full cost accounting method. With the assistance of valuation experts, the Company determined the fair value of its oil and gas properties based on the discounted cash flows expected to be generated from these assets. The computations were based on market conditions and reserves in place as of the bankruptcy emergence date. The fair value analysis performed by independent third party valuation experts was based on the Company’s estimates of reserves as developed internally by the Company’s reserve engineers. For purposes of estimating the fair value of the Company's proved and probable reserves, an income approach was used which estimated fair value based on the anticipated cash flows associated with the Company's reserves, risked by reserve category and discounted using a weighted average cost of capital of 13.0%. The discount factor was derived from a weighted average cost of capital computation which utilized a blended expected cost of debt and expected returns on equity for similar market participants. Future revenues were based upon forward strip oil and natural gas prices as of the emergence date, adjusted for differentials realized by the Company, and held flat after 2023. Development and operating costs were based on the Company's recent cost trends. The discounted cash flow models also included estimates not typically included in proved reserves such as depletion, depreciation and income tax expenses. The proved reserve locations were limited to wells expected to be drilled in the Company's five year development plan. As a result of this analysis, the Company concluded the fair value of its proved reserves was $52.1 million and the fair value of its unproven reserves was $99 million as of the Effective Date. The Company also reviewed its undeveloped leasehold acreage. An analysis of comparable market transactions indicated a fair value of undeveloped acreage totaling approximately $19.7 million. These amounts are reflected in item 2 in "Fresh Start Adjustments" below. The fair value of the Company's asset retirement obligations was estimated at $2.5 million and was based on estimated plugging and abandonment costs as of the Effective Date, adjusted for inflation and discounted at the Successor's credit-adjusted risk free rate of 10%. See further discussion in "Fresh Start Adjustments" below for details on the specific assumptions used in the valuation of the Company’s various other assets. The following table reconciles the enterprise value per the Plan to the estimated fair value (for fresh start accounting purposes) of the Successor's common stock as of the Effective Date (in thousands):
The following table reconciles the enterprise value to the reorganization value as of the Effective Date (in thousands):
Reorganization value and enterprise value were estimated using numerous projections and assumptions that are inherently subject to significant uncertainties and resolution of contingencies that are beyond our control. Accordingly, the estimates set forth herein are not necessarily indicative of actual outcomes, and there can be no assurance that the estimates, projections or assumptions will be realized. Consolidated Balance Sheet The adjustments set forth in the following consolidated balance sheet reflect the effects of the transactions contemplated by the Plan and carried out by the Company (reflected in the column "Reorganization Adjustments") as well as fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column "Fresh Start Adjustments"). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities as well as significant assumptions or inputs. The following table reflects the reorganization and application of ASC 852 on our consolidated balance sheet as of February 8, 2019 (in thousands):
Reorganization Adjustments (in thousands, except per share values)
Fresh Start Adjustments
The net gain on fresh start adjustments has been included in Reorganization items, net in the Consolidated Statement of Operations. See "Note 3-Emergence from Chapter 11 Reorganization" for additional details of reorganization items, net. |
Fresh Start Accounting |
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Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fresh Start Accounting | Emergence from Chapter 11 Reorganization On November 6, 2018 (the “Petition Date”), the Company, 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”). 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’ prepetition liabilities were subject to settlement under the Bankruptcy Code. 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 were entitled to 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 was treated as a prepetition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieved the Debtors of performing their future obligations under such executory contract or unexpired lease but entitled the contract counterparty or lessor to a prepetition general unsecured claim for damages caused by such deemed breach. Counterparties to such rejected contracts or leases may assert unsecured claims in the Bankruptcy Court against the applicable Debtors’ estate for damages. Generally, the assumption of an executory contract or unexpired lease requires the Debtors to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance. Accordingly, any description of an executory contract or unexpired lease with any of the Debtors in this Quarterly Report on Form 10-Q, including where applicable a quantification of the Company’s obligations under any such executory contract or unexpired lease with the applicable Debtor, is qualified by any overriding rejection rights the Company has under the Bankruptcy Code. Further, nothing herein is or shall be deemed an admission with respect to any claim amounts or calculations arising from the rejection of any executory contract or unexpired lease and the Debtors expressly preserve all of their rights with respect thereto. During the bankruptcy process the Company's rejection damages were approximately $0.1 million. Reorganization Items, net Reorganization Items, net incurred as a result of the Chapter 11 Cases are presented separately in the accompanying unaudited consolidated statement of operations for the Predecessor period January 1, 2019 through February 8, 2019 as follows (in thousands):
Fresh Start Accounting Upon emergence from bankruptcy, the Company qualified for and adopted fresh start accounting in accordance with the provisions of ASC 852 as (i) the holders of existing voting shares of the Predecessor received less than 50% of the voting shares of the Successor and (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the Plan was less than the post-petition liabilities and allowed claims. See "Note 3- Emergence from Chapter 11 Reorganization" for the terms of the Plan. The Company applied fresh start accounting as of February 8, 2019. Fresh start accounting required the Company to present its assets, liabilities and equity as if it were a new entity upon emergence from bankruptcy, with no beginning retained earnings or deficit as of the fresh start reporting date. As described in "Note 1-Basis of Presentation", the new entity is referred to as Successor, and includes the financial position and results of operations of the reorganized Company subsequent to February 8, 2019. References to Predecessor relate to the financial position and results of operations of the Company prior to, and including, February 8, 2019. Reorganization Value Under fresh start accounting, reorganization value represents the fair value of the Successor's total assets and is intended to approximate the amount a willing buyer would pay for the assets immediately after restructuring. Upon application of fresh start accounting, the Company allocated the reorganization value to its individual assets based on their estimated fair values in conformity with ASC 805, "Business Combinations" ("ASC 805"). The Company’s reorganization value is derived from an estimate of enterprise value. Enterprise value represents the estimated fair value of an entity’s long-term debt and stockholders’ equity. The Bankruptcy Court approved the Plan, which included as support the Company's estimate that the enterprise value of the core assets (as defined in the Plan) of the Successor was in the range of $104 million to $187 million without cash at emergence. The sum of the estimated range of enterprise value plus the amount of estimated cash at emergence was in the range of $117 million to $200 million. This valuation analysis was prepared using reserve information, development schedules, other financial information and financial projections and applying standard valuation techniques, including net asset value analysis, precedent transactions analyses and public comparable company analyses. Based on the estimates and assumptions used in determining the enterprise value, the Company ultimately estimated the enterprise value of the Successor's core assets to be approximately $155.2 million. Valuation of Assets The Company’s principal assets are its oil and gas properties, which the Company accounts for under the full cost accounting method. With the assistance of valuation experts, the Company determined the fair value of its oil and gas properties based on the discounted cash flows expected to be generated from these assets. The computations were based on market conditions and reserves in place as of the bankruptcy emergence date. The fair value analysis performed by independent third party valuation experts was based on the Company’s estimates of reserves as developed internally by the Company’s reserve engineers. For purposes of estimating the fair value of the Company's proved and probable reserves, an income approach was used which estimated fair value based on the anticipated cash flows associated with the Company's reserves, risked by reserve category and discounted using a weighted average cost of capital of 13.0%. The discount factor was derived from a weighted average cost of capital computation which utilized a blended expected cost of debt and expected returns on equity for similar market participants. Future revenues were based upon forward strip oil and natural gas prices as of the emergence date, adjusted for differentials realized by the Company, and held flat after 2023. Development and operating costs were based on the Company's recent cost trends. The discounted cash flow models also included estimates not typically included in proved reserves such as depletion, depreciation and income tax expenses. The proved reserve locations were limited to wells expected to be drilled in the Company's five year development plan. As a result of this analysis, the Company concluded the fair value of its proved reserves was $52.1 million and the fair value of its unproven reserves was $99 million as of the Effective Date. The Company also reviewed its undeveloped leasehold acreage. An analysis of comparable market transactions indicated a fair value of undeveloped acreage totaling approximately $19.7 million. These amounts are reflected in item 2 in "Fresh Start Adjustments" below. The fair value of the Company's asset retirement obligations was estimated at $2.5 million and was based on estimated plugging and abandonment costs as of the Effective Date, adjusted for inflation and discounted at the Successor's credit-adjusted risk free rate of 10%. See further discussion in "Fresh Start Adjustments" below for details on the specific assumptions used in the valuation of the Company’s various other assets. The following table reconciles the enterprise value per the Plan to the estimated fair value (for fresh start accounting purposes) of the Successor's common stock as of the Effective Date (in thousands):
The following table reconciles the enterprise value to the reorganization value as of the Effective Date (in thousands):
Reorganization value and enterprise value were estimated using numerous projections and assumptions that are inherently subject to significant uncertainties and resolution of contingencies that are beyond our control. Accordingly, the estimates set forth herein are not necessarily indicative of actual outcomes, and there can be no assurance that the estimates, projections or assumptions will be realized. Consolidated Balance Sheet The adjustments set forth in the following consolidated balance sheet reflect the effects of the transactions contemplated by the Plan and carried out by the Company (reflected in the column "Reorganization Adjustments") as well as fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column "Fresh Start Adjustments"). The explanatory notes highlight methods used to determine fair values or other amounts of the assets and liabilities as well as significant assumptions or inputs. The following table reflects the reorganization and application of ASC 852 on our consolidated balance sheet as of February 8, 2019 (in thousands):
Reorganization Adjustments (in thousands, except per share values)
Fresh Start Adjustments
The net gain on fresh start adjustments has been included in Reorganization items, net in the Consolidated Statement of Operations. See "Note 3-Emergence from Chapter 11 Reorganization" for additional details of reorganization items, net. |
Acquisitions and Divestitures |
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Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Divestitures (Predecessor): 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 a cash refund of $12.4 million related to a depositary account that served to collateralize a portion of the Company's offshore bonds related to these properties. After finalizing purchase price adjustments, during October 2018 the Company settled the remaining liabilities related to this sale for $4.2 million. This sale was accounted for as an adjustment to the capitalized costs of oil and gas properties. |
Equity |
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Equity [Abstract] | |||||||||||||||||
Equity | Equity Predecessor Stockholder's Equity As discussed in “Note 3-Emergence from Chapter 11 Reorganization,” 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 were 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. 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 February 8, 2019, all of which were canceled on the Effective Date pursuant to the Plan, including the $14.6 million of accumulated and unpaid dividends. Successor Stockholder's Equity On the Effective Date, pursuant to the terms of the Plan, the Successor issued 8,900,000 shares of Class A Common Stock pro rata to the holders of the Old Notes. In addition, pursuant to the terms of the Plan, the Successor issued 300,000 shares of Class A Common Stock to certain holders of the Old Notes for their commitment to backstop the Exit Facility. See "Note 9-Long-Term Debt". Additionally, on the Effective Date, the Company:
On the Effective Date, in accordance with the Plan and the Confirmation Order, the Company entered into the Registration Rights Agreement with certain former holders of Old Notes who received Class A Common Stock and the 2024 PIK Notes distributed on the Effective Date. On June 21, 2019, the Company entered into an amended and restated registration rights agreement (the "Amended and Restated Registration Rights Agreement") with such holders, pursuant to which the holders, acting together at any time, may request (i) that the Company file with the SEC a shelf registration statement that includes the Registrable Securities (as defined in the Amended and Restated Registration Rights Agreement) and (ii) that the Company use commercially reasonable efforts to cause all shares of Class A Common Stock to be quoted on an over-the-counter securities market and to use commercially reasonable efforts to maintain such quotation. |
Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share On February 8, 2019, upon emergence from Chapter 11 bankruptcy, the Predecessor equity was canceled and new equity was issued. See "Note 3-Emergence from Chapter 11 Reorganization"and "Note 6-Equity" for further details. Successor A reconciliation between the basic and diluted earnings per share computations (in thousands, except per share amounts) is as follows:
Predecessor A reconciliation between the basic and diluted earnings per share computations (in thousands, except per share amounts) is as follows:
Predecessor An aggregate of 2.0 million shares of common stock representing options to purchase common stock and unvested shares of restricted common stock and common shares issuable upon the assumed conversion of the Series B Preferred Stock totaling 1.3 million shares were not included in the computation of diluted earnings per share for the three and six month periods ended June 30, 2018 because the inclusion would have been anti-dilutive as a result of the net loss reported for such period. Options to purchase 1.5 million shares of common stock were outstanding during the Predecessor period of January 1, 2019 through February 8, 2019 and were not included in the computation of diluted earnings per share because the options' exercise prices were in excess of the average market price of the common shares. Successor An aggregate of 1.1 million shares of common stock representing options to purchase common stock and unvested shares of restricted common stock were not included in the computation of diluted earnings per share during the three month period ended June 30, 2019 and the Successor period of February 9, 2019 through June 30, 2019 because the inclusion would have been anti-dilutive as a result of the net loss reported for such periods. |
Share-Based Compensation |
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Jun. 30, 2019 | |||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||
Share-Based Compensation | Share-based compensation As discussed in “Note 3-Emergence from Chapter 11 Reorganization,” 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, unrecognized stock compensation costs of $0.4 million related to the Predecessor's share-based compensation plan was expensed in fresh start accounting. See "Note 4-Fresh Start Accounting" for the related entries. Upon emergence from bankruptcy, the 2019 Long Term Incentive Plan was established, authorizing a maximum of 1,344,000 shares of stock to officers, directors and employees of the Successor and its subsidiaries. Awards issued under the 2019 Long Term Incentive Plan may consist of unrestricted shares of Class A Common Stock, stock options to purchase shares of Class A Common Stock and restricted stock units to be settled in shares of Class A Common Stock, in some cases subject to the satisfaction of certain vesting criteria. The new members of the board of directors of the Successor (the "Board") were issued 195,000 Restricted Stock Units ("RSU's"). Generally, they will vest in 3 equal installments on each of the first three anniversaries of the grant date of February 8, 2019. Messrs. Goodson, Clement and Mixon received awards under the 2019 Long Term Incentive Plan on the Effective Date and pursuant to the Plan and Confirmation Order. RSUs were awarded pursuant to the 2019 Long Term Incentive Plan as follows: 379,582 RSUs, 126,528 RSUs and 126,528 RSUs, respectively. The RSUs will be settled in shares of Class A Common Stock within a specified period following vesting. The RSUs are subject to vesting as follows:
Stock options (“Options”) were awarded to Messrs. Goodson, Clement and Mixon pursuant to the 2019 Long Term Incentive Plan as follows: 189,791 Options, 63,264 Options and 63,264 Options, respectively. One half of the Options granted to each recipient have an exercise price of $10.00 per share and the other half have an exercise price of $12.50 per share. The Options vest upon the earlier to occur of (i) a 20-trading day volume-weighted average price of a share of the Class A Common Stock at least equal to the applicable exercise price following the date of grant or (ii) a “Change in Control” (as defined in the executive officer’s termination agreement). |
Long-Term Debt |
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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 its common stock. Following the completion of the February Exchange, $135.6 million in aggregate principal amount of the 2017 Notes remained outstanding. The February Consent Solicitation eliminated or waived substantially all of the restrictive covenants contained in the indenture governing the 2017 Notes. On September 27, 2016, the Company closed private exchange offers (the "September Exchange") and a consent solicitation (the "September Consent Solicitation") to certain eligible holders of its outstanding 2017 Notes and 2021 Notes. In satisfaction of the consideration of $113.0 million in aggregate principal amount of the 2017 Notes, representing approximately 83% of the then outstanding aggregate principal amount of 2017 Notes, and $130.5 million in aggregate principal amount of the 2021 Notes, representing approximately 90% of the then outstanding aggregate principal amount of 2021 Notes, the Company issued (i) $243.5 million in aggregate principal amount of its new 10% Second Lien Senior Secured PIK Notes due 2021 (the "2021 PIK Notes") and (ii) approximately 3.5 million shares of its common stock. The Company also paid, in cash, accrued and unpaid interest on the 2017 Notes and 2021 Notes accepted in the September Exchange from the last applicable interest payment date to, but not including, September 27, 2016. Following the consummation of the September Exchange, there were $22.7 million in aggregate principal amount of the 2017 Notes outstanding and $14.2 million in aggregate principal amount of the 2021 Notes outstanding. The September Consent Solicitation amended certain provisions of the indenture governing the 2021 Notes and amended the registration rights agreement with respect to the 2021 Notes. On March 31, 2017, the Company redeemed 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 approximately 2.2 million shares of common stock to extinguish approximately $4.8 million of outstanding principal amount of 2021 Notes. The 2021 PIK Notes 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. Contractual interest on the 2021 PIK Notes for the period November 7, 2018 through December 31, 2018 was approximately $4.1 million and for the period January 1 through February 8, 2019 was approximately $2.9 million. Payment of this interest was stayed by the Chapter 11 Cases effective November 6, 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. Contractual interest on the 2021 Notes for the period November 7, 2018 through December 31, 2018 was approximately $0.1 million and for the period January 1 through February 8, 2019 was approximately $0.1 million. Payment of this interest was stayed by the Chapter 11 Cases effective November 6, 2018. The February Exchange and September Exchange were accounted for as troubled debt restructurings pursuant to guidance provided by Financial Accounting Standards Board ("FASB") 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 PQE 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. 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 3-Emergence from Chapter 11 Reorganization". The face value of the 2021 Notes and the 2021 PIK Notes, including accrued PIK interest of $20.6 million, were classified as liabilities subject to compromise as of December 31, 2018. The Term Loans are reflected net of $0.3 million of related unamortized financing costs as of December 31, 2018. The adjustments to write off the remaining unamortized deferred financing costs related to the Multidraw Term Loan Agreement are included in reorganization items in the consolidated statement of operations for the period ended February 8, 2019. Successor Long-Term Debt Exit Facility 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 (which were lenders under the Company's Multidraw Term Loan Agreement and certain holders of the Company's Old Notes that subscribed to be a lender pursuant to the syndication process) 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, at the Company's election, equal to (i) in the case of LIBOR Loans (as defined in the Exit Facility), 7.5% per annum or (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 no less than 1.5 to 1.0 as measured on the last day of each calendar quarter. 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. See "Item 1A. Risk Factors-Restrictive debt covenants could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests" in the Company's Form 10-K for a detailed discussion of these debt covenants and their effect on the Company's business. 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). As of June 30, 2019, we were in compliance with all of the covenants under the Exit Facility. 2024 PIK Notes 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, 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 PQE that also secures the Exit Facility. Pursuant to the terms of the Intercreditor Agreement (as defined below), 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). As of June 30, 2019, we were in compliance with all of the covenants under the 2024 PIK Notes. The following table reconciles the face value of the 2024 PIK Notes and Exit Facility to the carrying value included on the Company's consolidated balance sheet as of June 30, 2019 (in thousands):
The Indenture contains certain customary events of default, including: (1) default in the payment of any interest when it becomes due and payable, and continuance of such default for a period of 30 days, (2) default in the payment of principal at maturity, upon optional redemption, upon declaration of acceleration or otherwise or failure to purchase the 2024 PIK Notes when required pursuant to the Indenture or the 2024 PIK Notes, (3) default in the performance or breach of certain covenants in the Indenture, which default continues uncured for a period of 60 days (or (x) 30 days in the case of failure to comply with certain restrictive covenants and (y) 120 days in the case of failure to comply with reporting obligations under the Indenture) after (i) the Company receives written notice from the Trustee or (ii) the Company and the Trustee receive written notice from the holders of not less than 25% in principal amount of the 2024 PIK Notes as provided in the Indenture, (4) certain voluntary or involuntary events of bankruptcy, insolvency or winding up or liquidation of the Company or the Guarantor, (5) any judgment or decree for the payment of money in excess of $10.0 million or its foreign currency equivalent at the time such judgment or decree is entered against the Company, any subsidiary guarantor under the Indenture or any significant subsidiary under the Indenture, remains outstanding for a period of 60 consecutive days following the entry of such judgment or decree and is not discharged, waived or the execution thereof stayed and (6) the occurrence of the following: (x) except as permitted by the Note Documents (as defined in the Indenture), any Note Document establishing the liens securing the notes obligations ceases for any reason to be enforceable; provided that it will not be an event of default under the Indenture if the sole result of the failure of one or more Note Documents to be fully enforceable is that any lien purported to be granted under such Note Documents on collateral, individually or in the aggregate, having a fair market value of not more than $15.0 million, ceases to be an enforceable and perfected lien; provided further, that if such failure is susceptible to cure, no event of default shall arise with respect thereto until 45 days after any officer of the Company or any restricted subsidiary becomes aware of such failure, which failure has not been cured during such time period, (y) except as permitted by the Note Documents, any lien purported to be granted under any Note Document on collateral, individually or in the aggregate, having a fair market value in excess of $15.0 million, ceases to be an enforceable and perfected second priority lien, subject to the Intercreditor Agreement and permitted liens provided that if such failure is susceptible to cure, no event of default shall arise with respect thereto until 45 days after any officer of the Company or any restricted subsidiary under the Indenture becomes aware of such failure, which failure has not been cured during such time period and (z) the Company or any other grantor under the Indenture, or any person acting on behalf of any of them, denies or disaffirms, in writing, any obligation of the Company or any other grantor under the Indenture set forth in or arising under any Note Document establishing liens securing the notes obligations. If a default occurs and is continuing and is actually known to a trust officer of the Trustee, the Trustee must send to each holder of the 2024 PIK Notes notice of the default within 90 days after it occurs. Except in the case of defaults in payment involving the payment of principal of or interest with respect to any 2024 PIK Note, the Trustee may withhold notice if and so long as it in good faith determines that withholding notice is not opposed to the interests of the holders of the 2024 PIK Notes. Intercreditor Agreement On the Effective Date, in accordance with the Plan and the Confirmation Order, Wells Fargo Bank, National Association, as intercreditor agent, Wilmington Trust, National Association, as collateral agent, the Company and PQE entered into a lien subordination and intercreditor agreement (the “Intercreditor Agreement”) to govern the relationship of holders of the 2024 PIK Notes, the lenders under the Exit Facility and holders of other priority lien obligations with respect to certain collateral and certain other matters. |
Asset Retirement Obligation |
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Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation | Asset Retirement Obligation The following table describes the changes to the Company’s asset retirement obligation liability (in thousands):
Revisions in estimates for the period February 9, 2019 through June 30, 2019 are primarily due to the change in timing and scope of plugging and abandonment operations at one of the Company's Gulf Coast wells and one of the Company's Gulf of Mexico fields. The divestiture of oil and gas properties during 2018 totaling $28.2 million relates to the sale of the Company's Gulf of Mexico assets. The liabilities incurred, revisions in estimated cash flows and divestitures represent non-cash investing activities for purposes of the consolidated statement of cash flows. |
Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments Historically, the Company has reduced 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 designated its commodity derivatives as cash flow hedges. The changes in fair value of derivative instruments that qualify for hedge accounting treatment are recorded in other comprehensive income (loss) until the hedged oil or natural gas quantities are produced. If a derivative does not qualify for hedge accounting treatment, the changes in the fair value of the derivative are recorded in the income statement as derivative income (expense). At June 30, 2019, the Company had no outstanding derivative contracts. Oil and gas sales include reductions related to the settlement of oil hedges of $307,000 and $571,000, respectively, for the three and six month periods ended June 30, 2018. Oil and gas sales include increases related to the settlement of gas hedges of $0 and $805,000, respectively, for the three and six month periods ended June 30, 2018. No such settlements occurred in the periods ended June 30, 2019 or February 8, 2019. Derivatives designated as hedging instruments: Effect of Cash Flow Hedges on the Consolidated Statements of Operations and Comprehensive Loss for the three month period ended June 30, 2018:
Effect of Cash Flow Hedges on the Consolidated Statements of Operations and Comprehensive Loss for the six month period ended June 30, 2018:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements As defined in ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. As presented in the tables below, this hierarchy consists of three broad levels:
The fair value of the Company's cash and cash equivalents approximated book value at June 30, 2019 and December 31, 2018. The fair value of the Multidraw Term Loan Agreement was determined using Level 2 inputs and approximated face value as of December 31, 2018. The fair value of the 2021 Notes and 2021 PIK Notes was determined based upon market quotes provided by an independent broker, which represent a Level 2 input. The 2021 Notes and 2021 PIK Notes carrying values are included in liabilities subject to compromise at December 31, 2018. The fair value of the Exit Facility and the 2024 PIK Notes was estimated via a discounted cash flow analysis by discounting scheduled debt service payments at a credit spread of 10.1% and 11.9%, respectively. The credit spread was determined by performing a synthetic credit rating analysis, considering yields on similarly-rated, energy corporate issues, and adjusting based on recovery rates for first and second lien debt. This method represents a Level 3 input. The following table summarizes the fair value, carrying value and face value of the 2021 Notes, 2021 PIK Notes, Multidraw Term Loan Agreement, Exit Facility and 2024 PIK Notes as of June 30, 2019 and December 31, 2018 (in thousands):
See Note 4 - Fresh Start Accounting for a detailed discussion of the fair value approaches used by the Company. The inputs utilized in the valuation of our most significant asset, our oil and gas properties, included mostly unobservable inputs, which fall within Level 3 of the fair value hierarchy. |
Income Taxes |
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Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company typically provides for income taxes at a statutory rate adjusted for permanent differences expected to be realized, primarily statutory depletion, non-deductible stock compensation expenses and state income taxes. As a result of ceiling test write-downs recognized, the Company has incurred a cumulative three year loss excluding the impact from the gain on the bankruptcy reorganization. Because of the impact the cumulative operating loss has on the determination of the recoverability of deferred tax assets through future earnings and the strong negative evidence associated with the bankruptcy reorganization, the Company assessed the realizability of its deferred tax assets based on the future reversals of existing deferred tax liabilities. Accordingly, the Company established a valuation allowance for a portion of the deferred tax asset. The valuation allowance was $56.8 million and $118.7 million as of June 30, 2019 and December 31, 2018, respectively. Our emergence from Chapter 11 has resulted in tax cancellation of indebtedness income, which resulted in a reduction of our net operating loss carryforward. Since our net operating loss was fully reserved under GAAP in the current period as well as the previous periods, there was not a financial statement impact as a result of the reduction of debt upon emergence. However, as part of our Fresh Start Accounting adjustments, the Company is now recording a state deferred tax liability of $0.7 million. This results in an effective tax rate of 0.2% for the the Predecessor period of January 1, 2019 through February 8, 2019 and 105.7% for the Successor period of February 9, 2019 through June 30, 2019. |
Other Comprehensive Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income | Other Comprehensive Income The Company designates its commodity derivatives as cash flow hedges for accounting purposes upon entering into the contracts and accordingly, changes in the fair value of the derivative are recognized in stockholders' equity through other comprehensive income, net of related taxes, to the extent the hedge was considered effective. The Company had no outstanding derivative contracts at December 31, 2018, during the Predecessor period January 1, 2019 through February 8, 2019 or the Successor period of February 9, 2019 through June 30, 2019. The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the three month period ended June 30, 2018 (in thousands):
The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the six month period ended June 30, 2018 (in thousands):
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 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 $3.8 million of revenue receivable at June 30, 2019, comprised of $0.9 million of oil revenue, $2.3 million of natural gas revenue and $0.6 million of NGL revenue. The following table includes a disaggregation of revenue by product including the effects of hedges in place for the three month periods ended June 30, 2019 and 2018 (in thousands):
The following table includes a disaggregation of revenue by product including the effects of hedges in place for the the Successor period of February 9, 2019 through June 30, 2019, the Predecessor period of January 1, 2019 through February 8, 2019 and the six month period ended June 30, 2018 (in thousands):
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Leases (Notes) |
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Jun. 30, 2019 | |||||||||||||
Leases [Abstract] | |||||||||||||
Leases | Leases In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 was issued to increase transparency and comparability across organizations by recognizing substantially all leases on the balance sheet through the concept of right-of-use lease assets and liabilities. Under current accounting guidance, lessees do not recognize lease assets or liabilities for leases classified as operating leases. The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years with early adoption permitted. In July 2018, the FASB issued ASU 2018-11, which added a transition option permitting entities to apply the provisions of the new standard at its adoption date instead of the earliest comparative period presented in the consolidated financial statements. Under this transition option, comparative reporting would not be required, and the provisions of the standard would be applied prospectively to leases in effect at the date of adoption. The Company adopted the guidance prospectively during the first quarter of 2019. As part of this adoption, the Company elected not to reassess historical lease classification, recognize short-term leases on its balance sheet, nor separate lease and non-lease components for its real estate leases. The adoption and implementation of this ASU resulted in a $3.8 million asset and a $3.8 million liability at January 1, 2019 ($1.8 million and $1.7 million in assets and liabilities, respectively, as of June 30, 2019) related to the Company's leasing activities which primarily consists of office leases. The Company's adoption of ASU 2016-02 did not impact retained earnings or other components of equity as of December 31, 2018. Accordingly, the Company accounts for leases in accordance with ASC Topic 842. The Company determines if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment), and (2) the customer has the right to control the use of the identified asset. In the normal course of business, the Company enters into various lease agreements for real estate and equipment related to its exploration, development and production activities that are currently accounted for as operating leases. Operating leases are included in right of use asset, right of use liability-short-term and right of use liability-long-term on the Company's Consolidated Balance Sheets. The lease liabilities are initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. Key estimates and judgments include how the Company determined (1) the discount rate it uses to discount the unpaid lease payments to present value, (2) lease term and (3) lease payments.
The Right-of-use ("ROU") asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company monitors for events or changes in circumstances that require a reassessment of a lease. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in profit or loss. The Company has lease agreements which include lease and nonlease components. The Company has elected to combine lease and nonlease components for all lease contracts. The Company has elected not to recognize ROU assets and lease liabilities for all short-term leases that have a lease term of 12 months or less. The Company recognizes the lease payments associated with its short-term leases as an expense on a straight-line basis over the lease term. The Company adopted ASU 2016-02 using a modified retrospective transition approach as of the Effective Date as permitted by the amendments in ASU 2018-11, which provides an alternative modified retrospective transition method. As a result, the Company was not required to adjust its comparative period financial information for effects of the standard or make the new required lease disclosures for periods before the date of adoption (i.e. January 1, 2019). The Company has elected to adopt the package of transition practical expedients and, therefore, has not reassessed (1) whether existing or expired contracts contain a lease, (2) lease classification for existing or expired leases or (3) the accounting for initial direct costs that were previously capitalized. The Company did not elect the practical expedient to use hindsight for leases existing at the adoption date. Further, the Company does not expect the amendments in ASU 2018-01: Land Easement Practical Expedient to have an effect on it because the Company does not enter into land easement arrangements. |
Basis of Presentation (Policies) |
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Jun. 30, 2019 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Recently Issued Accounting Standards | Recently Issued Accounting Standards In August 2017, the FASB issued ASU 2017-12, "Derivatives 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 has adopted this new standard. As there are no outstanding derivatives, there is no effect on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses", that requires entities to estimate all expected credit losses for most financial assets held at the reporting date based on an expected loss model, which requires consideration of historical experience, current conditions, and reasonable and supportable forecasts. This ASU also requires enhanced disclosure requirements to enable users of financial statements to understand the entity's assumptions, models and methods for estimating expected credit losses. For public companies, this ASU is effective for interim and annual reporting periods beginning after December 31, 2019, with early adoption permitted. The Company does not expect this guidance to have a material impact on its financial statements. |
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Leases | Leases In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 was issued to increase transparency and comparability across organizations by recognizing substantially all leases on the balance sheet through the concept of right-of-use lease assets and liabilities. Under current accounting guidance, lessees do not recognize lease assets or liabilities for leases classified as operating leases. The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years with early adoption permitted. In July 2018, the FASB issued ASU 2018-11, which added a transition option permitting entities to apply the provisions of the new standard at its adoption date instead of the earliest comparative period presented in the consolidated financial statements. Under this transition option, comparative reporting would not be required, and the provisions of the standard would be applied prospectively to leases in effect at the date of adoption. The Company adopted the guidance prospectively during the first quarter of 2019. As part of this adoption, the Company elected not to reassess historical lease classification, recognize short-term leases on its balance sheet, nor separate lease and non-lease components for its real estate leases. The adoption and implementation of this ASU resulted in a $3.8 million asset and a $3.8 million liability at January 1, 2019 ($1.8 million and $1.7 million in assets and liabilities, respectively, as of June 30, 2019) related to the Company's leasing activities which primarily consists of office leases. The Company's adoption of ASU 2016-02 did not impact retained earnings or other components of equity as of December 31, 2018. Accordingly, the Company accounts for leases in accordance with ASC Topic 842. The Company determines if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment), and (2) the customer has the right to control the use of the identified asset. In the normal course of business, the Company enters into various lease agreements for real estate and equipment related to its exploration, development and production activities that are currently accounted for as operating leases. Operating leases are included in right of use asset, right of use liability-short-term and right of use liability-long-term on the Company's Consolidated Balance Sheets. The lease liabilities are initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. Key estimates and judgments include how the Company determined (1) the discount rate it uses to discount the unpaid lease payments to present value, (2) lease term and (3) lease payments.
The Right-of-use ("ROU") asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company monitors for events or changes in circumstances that require a reassessment of a lease. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in profit or loss. The Company has lease agreements which include lease and nonlease components. The Company has elected to combine lease and nonlease components for all lease contracts. The Company has elected not to recognize ROU assets and lease liabilities for all short-term leases that have a lease term of 12 months or less. The Company recognizes the lease payments associated with its short-term leases as an expense on a straight-line basis over the lease term. The Company adopted ASU 2016-02 using a modified retrospective transition approach as of the Effective Date as permitted by the amendments in ASU 2018-11, which provides an alternative modified retrospective transition method. As a result, the Company was not required to adjust its comparative period financial information for effects of the standard or make the new required lease disclosures for periods before the date of adoption (i.e. January 1, 2019). The Company has elected to adopt the package of transition practical expedients and, therefore, has not reassessed (1) whether existing or expired contracts contain a lease, (2) lease classification for existing or expired leases or (3) the accounting for initial direct costs that were previously capitalized. The Company did not elect the practical expedient to use hindsight for leases existing at the adoption date. Further, the Company does not expect the amendments in ASU 2018-01: Land Easement Practical Expedient to have an effect on it because the Company does not enter into land easement arrangements. |
Emergence from Chapter 11 Reorganization (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||
Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||
Schedule Of Reorganizational Items | Reorganization Items, net incurred as a result of the Chapter 11 Cases are presented separately in the accompanying unaudited consolidated statement of operations for the Predecessor period January 1, 2019 through February 8, 2019 as follows (in thousands):
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Fresh Start Accounting (Tables) |
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Reorganizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Of Reorganization Value | The following table reconciles the enterprise value per the Plan to the estimated fair value (for fresh start accounting purposes) of the Successor's common stock as of the Effective Date (in thousands):
The following table reconciles the enterprise value to the reorganization value as of the Effective Date (in thousands):
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Schedule of Fresh-Start Adjustments | The following table reflects the reorganization and application of ASC 852 on our consolidated balance sheet as of February 8, 2019 (in thousands):
Reorganization Adjustments (in thousands, except per share values)
Fresh Start Adjustments
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Schedule Of Reorganizational Adjustments | Reorganization Adjustments (in thousands, except per share values)
|
Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
Predecessor A reconciliation between the basic and diluted earnings per share computations (in thousands, except per share amounts) is as follows:
|
Long-Term Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following table reconciles the face value of the 2024 PIK Notes and Exit Facility to the carrying value included on the Company's consolidated balance sheet as of June 30, 2019 (in thousands):
|
Asset Retirement Obligation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes to the Company's asset retirement obligation liability | The following table describes the changes to the Company’s asset retirement obligation liability (in thousands):
|
Derivative Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of Cash Flow Hedges on the Consolidated Statement of Operations | Effect of Cash Flow Hedges on the Consolidated Statements of Operations and Comprehensive Loss for the three month period ended June 30, 2018:
Effect of Cash Flow Hedges on the Consolidated Statements of Operations and Comprehensive Loss for the six month period ended June 30, 2018:
|
Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of debt instruments | The following table summarizes the fair value, carrying value and face value of the 2021 Notes, 2021 PIK Notes, Multidraw Term Loan Agreement, Exit Facility and 2024 PIK Notes as of June 30, 2019 and December 31, 2018 (in thousands):
|
Other Comprehensive Income (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the three month period ended June 30, 2018 (in thousands):
The following table represents the changes in accumulated other comprehensive income (loss), net of tax, for the six month period ended June 30, 2018 (in thousands):
|
Revenue Recognition (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table includes a disaggregation of revenue by product including the effects of hedges in place for the three month periods ended June 30, 2019 and 2018 (in thousands):
The following table includes a disaggregation of revenue by product including the effects of hedges in place for the the Successor period of February 9, 2019 through June 30, 2019, the Predecessor period of January 1, 2019 through February 8, 2019 and the six month period ended June 30, 2018 (in thousands):
|
Going Concern (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
well
|
Dec. 31, 2018
USD ($)
|
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of wells in production | 3 | |
Number of wells started but not completed | 2 | |
Unrestricted cash | $ | $ 16,292 | $ 34,502 |
Emergence from Chapter 11 Reorganization - Reorganizational Items (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
---|---|---|---|---|---|
Feb. 08, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Reorganizations [Abstract] | |||||
Gain on settlement of liabilities subject to compromise | $ 168,952 | ||||
Fresh start adjustments | 102,830 | ||||
Reorganization professional fees and other expenses | (5,398) | ||||
Write-off of deferred financing costs | (370) | ||||
Other reorganization items, net | (3,213) | ||||
Total reorganization items, net | $ 262,801 | $ 0 | $ 0 | $ 0 | $ 0 |
Fresh Start Accounting - Reconciliation of Reorganization Value (Details) $ / shares in Units, shares in Thousands, $ in Thousands |
Feb. 08, 2019
USD ($)
$ / shares
shares
|
---|---|
Reorganizations [Abstract] | |
Enterprise value | $ 155,246 |
Plus: Cash | 23,073 |
Plus: Restricted cash | 5,675 |
Plus: Current liabilities | 39,758 |
Plus: Asset retirement obligations (long-term) | 2,303 |
Plus: Other long-term liabilities | 2,845 |
Less: Fair value of 10% PIK Notes due 2024 | (65,025) |
Less: Fair value of Exit Facility | (45,269) |
Fair value of Successor common stock | $ 73,700 |
Shares issued upon emergence (in shares) | shares | 9,371 |
Per share value | $ / shares | $ 7.86 |
Reorganization value of Successor assets | $ 228,900 |
Fresh Start Accounting - Cash Payments (Details) - USD ($) $ in Thousands |
1 Months Ended | |
---|---|---|
Feb. 08, 2019 |
Feb. 08, 2019 |
|
Fresh-Start Adjustment [Line Items] | ||
Payment of professional fees at emergence | $ (5,398) | |
Reorganization Adjustments | ||
Fresh-Start Adjustment [Line Items] | ||
Payment of accrued interest on the Multidraw Term Loan Agreement | $ (1,181) | |
Payment of financing costs related to the Exit Facility | (124) | |
Funding of the general unsecured claims administrative escrow account | (1,200) | |
Cash transferred to restricted cash for professional fee escrow | (5,157) | |
Cash transferred to restricted cash for consenting creditors fees | (129) | |
Payment of professional fees at emergence | (1,017) | |
Net cash payments | $ (8,808) |
Fresh Start Accounting - Net Restricted Cash (Details) - Reorganization Adjustments $ in Thousands |
Feb. 08, 2019
USD ($)
|
---|---|
Fresh-Start Adjustment [Line Items] | |
Funding of the professional fee escrow account | $ 5,157 |
Funding of the consenting creditors escrow account | 129 |
Net changes to restricted cash | $ 5,286 |
Fresh Start Accounting - Adjustments to Accumulated Deficit (Details) $ in Thousands |
Feb. 08, 2019
USD ($)
|
---|---|
Fresh-Start Adjustment [Line Items] | |
Common stock, par value $0.01 | $ 94 |
Total stockholder's equity | 73,700 |
Reorganization Adjustments | |
Fresh-Start Adjustment [Line Items] | |
Common stock, par value $0.01 | 94 |
Issuance of the equity to the holders of the Senior Secured Notes due 2021 and PIK Notes due 2021 | 71,249 |
Issuance of the equity related to the emergence vesting of RSUs | 1,318 |
Issuance of the equity to the consenting creditors | 1,500 |
Total equity issued at emergence | 74,161 |
Value of shares relinquished to satisfy taxes on the RSUs vested at emergence | (461) |
Total stockholder's equity | $ 73,700 |
Fresh Start Accounting - Schedule on Reorganization Items Incurred (Details) - Reorganization Adjustments $ in Thousands |
Feb. 08, 2019
USD ($)
|
---|---|
Fresh-Start Adjustment [Line Items] | |
Gain on settlement of liabilities subject to compromise | $ 168,952 |
Issuance of the equity to the consenting creditors | (1,500) |
Issuance of the equity related to the emergence vesting of RSUs | (1,318) |
Success fees recognized at emergence | (3,592) |
Accelerated vesting of Predecessor stock compensation | (396) |
Write-off deferred financing costs | (370) |
Net impact to Reorganization items, net | 161,776 |
Cancellation of Predecessor equity, including vesting | 314,735 |
Net Impact to Accumulated deficit | $ 476,511 |
Fresh Start Accounting - Accumulated Deficit Adjustments (Details) - Fresh Start Adjustments $ in Thousands |
Feb. 08, 2019
USD ($)
|
---|---|
Fresh-Start Adjustment [Line Items] | |
Proved oil and gas properties fair value adjustment | $ (11,438) |
Unproved oil and gas properties fair value adjustment | 94,660 |
Other asset fair value adjustment | (98) |
Exit Facility fair value adjustment | 4,731 |
2024 PIK Notes fair value adjustment | 14,975 |
Net gain on fresh start adjustments | 102,830 |
Tax impact on fresh start accounting adjustments | (241) |
Net impact to Accumulated deficit | $ 102,589 |
Acquisitions and Divestitures (Details) - USD ($) $ in Thousands |
1 Months Ended | 5 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|
Jan. 31, 2018 |
Feb. 08, 2019 |
Oct. 31, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Liabilities related to oil and gas properties sold | $ 0 | $ 0 | $ 28,214 | ||
Gulf Of Mexico Properties | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Purchase commitment, remaining minimum amount committed | $ 3,800 | ||||
Liabilities related to oil and gas properties sold | 28,200 | ||||
Refund receivable | $ 12,400 | ||||
Payments for previous acquisition | $ 4,200 |
Earnings Per Share - Narrative (Details) - shares shares in Millions |
1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
---|---|---|---|---|---|
Feb. 08, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Unvested Restricted Common Stock | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share | 1.1 | 2.0 | 0.0 | 2.0 | |
Convertible preferred stock | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share | 1.3 | 1.3 | |||
Common Stock | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share | 1.5 |
Long-Term Debt - Face Value to Carrying Value Reconciliation (Details) - USD ($) |
Jun. 30, 2019 |
Feb. 08, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Face Value | $ 130,000,000 | $ 334,473,000 | |
Payment in Kind (PIK) Note | 10% Secured PIK Notes due 2024 | |||
Debt Instrument [Line Items] | |||
Face Value | 80,000,000 | $ 80,000,000 | $ 0 |
Unamortized Deferred Financing Costs | (14,412,000) | ||
Accrued PIK Interest | 3,111,000 | ||
Carrying Value | 68,699,000 | ||
Line of Credit | Exit Facility | |||
Debt Instrument [Line Items] | |||
Face Value | 50,000,000 | ||
Unamortized Deferred Financing Costs | (4,273,000) | ||
Accrued PIK Interest | 0 | ||
Carrying Value | $ 45,727,000 |
Asset Retirement Obligation (Details) - USD ($) $ in Thousands |
1 Months Ended | 5 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|
Jan. 31, 2018 |
Feb. 08, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Changes to the Company's asset retirement obligation liability | |||||
Asset retirement obligation, beginning of period | $ 2,480 | $ 2,486 | $ 31,310 | ||
Liabilities incurred | 0 | 20 | 7 | ||
Liabilities settled | (11) | (292) | (98) | ||
Accretion expense | 17 | 69 | 240 | ||
Revisions in estimates | 0 | 1,839 | (67) | ||
Divestiture of oil and gas properties | 0 | 0 | (28,214) | ||
Asset retirement obligation, end of period | 2,486 | 4,122 | 3,178 | ||
Less: current portion of asset retirement obligation | (183) | (1,525) | (877) | $ (183) | |
Long-term asset retirement obligation | $ 2,303 | $ 2,597 | $ 2,301 | $ 2,297 | |
Gulf Of Mexico Properties | |||||
Changes to the Company's asset retirement obligation liability | |||||
Divestiture of oil and gas properties | $ (28,200) |
Derivative Instruments - Narrative (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|
Feb. 08, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Derivatives, Fair Value [Line Items] | |||||
Gain or loss recognized in oil and gas contracts | $ 0 | $ 0 | $ 0 | ||
Gas hedges | |||||
Derivatives, Fair Value [Line Items] | |||||
Gain or loss recognized in oil and gas contracts | $ 0 | $ 805,000 | |||
Oil hedges | |||||
Derivatives, Fair Value [Line Items] | |||||
Gain or loss recognized in oil and gas contracts | $ (307,000) | $ (571,000) |
Derivative Instruments - Effect of Cash Flow Hedges on the Statement of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain Recognized in Other Comprehensive Income | $ (84) | $ (1,080) |
Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain Recognized in Other Comprehensive Income | (445) | (990) |
Designated as Hedging Instrument | Oil and gas sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Reclassified into Oil and Gas Sales | $ (307) | $ 233 |
Income Taxes (Details) - USD ($) $ in Millions |
1 Months Ended | 5 Months Ended | 6 Months Ended | |
---|---|---|---|---|
Feb. 08, 2019 |
Jun. 30, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Income Tax Contingency [Line Items] | ||||
Cumulative loss period | 3 years | |||
Valuation allowance | $ 56.8 | $ 56.8 | $ 118.7 | |
State and Local Jurisdiction | ||||
Income Tax Contingency [Line Items] | ||||
Deferred tax liabilities | $ 0.7 | $ 0.7 | ||
Quarterly effective tax rate | 0.20% | 106.00% |
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Disaggregation of Revenue [Line Items] | ||
Revenue receivable | $ 3,848 | $ 6,364 |
Oil production | ||
Disaggregation of Revenue [Line Items] | ||
Revenue receivable | 900 | |
Natural gas production | ||
Disaggregation of Revenue [Line Items] | ||
Revenue receivable | 2,300 | |
Natural gas liquids production | ||
Disaggregation of Revenue [Line Items] | ||
Revenue receivable | $ 600 | |
Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Revenue recognized, period | 1 month | |
Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Revenue recognized, period | 2 months |
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
---|---|---|---|---|---|
Feb. 08, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Disaggregation of Revenue [Line Items] | |||||
Disaggregation of revenue by product | $ 6,657 | $ 13,958 | $ 21,561 | $ 22,440 | $ 46,478 |
Oil production | |||||
Disaggregation of Revenue [Line Items] | |||||
Disaggregation of revenue by product | 1,502 | 3,858 | 5,660 | 6,041 | 11,982 |
Natural gas production | |||||
Disaggregation of Revenue [Line Items] | |||||
Disaggregation of revenue by product | 4,130 | 8,224 | 11,825 | 13,233 | 26,709 |
Natural gas liquids production | |||||
Disaggregation of Revenue [Line Items] | |||||
Disaggregation of revenue by product | $ 1,025 | $ 1,876 | $ 4,076 | $ 3,166 | $ 7,788 |
Leases (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Assets | $ 232,925 | $ 137,287 | |
Liabilities | 158,177 | $ 399,454 | |
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Assets | 1,800 | $ 3,800 | |
Liabilities | $ 1,700 | $ 3,800 |
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